Sitting of 16 May 1963

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  LONDON COUNTY COUNCIL (IMPROVEMENTS) BILL
    LONDON TRANSPORT BILL
    Read the Third time and passed.
ORAL ANSWERS TO QUESTIONS
  TRADE AND COMMERCE

    Ayr and Prestwick
    Sir T. Mooreasked the President of the Board of Trade if he will designate the burghs of Ayr and Prestwick as a development district.
    The Parliamentary Secretary to the Board of Trade (Mr. David Price): No, Sir.
    Sir T. Moore: In view of that somewhat unsatisfactory reply by my hon. Friend, could he say exactly what degree of need or unemployment in an area must justify its being declared a development district?
    Mr. Price: As my hon. Friend knows, as a result of correspondence which we have had, there is no fixed statistical level of unemployment which qualifies an area for inclusion in the list of development districts. We have to look at both the current level of unemployment and its likely persistency, and we also have to take into account the general incidence of unemployment over the country as a whole.
    Mr. Emrys Hughes: Has the Minister no sympathy whatever with his hon. Friend the Member for Ayr (Sir T. Moore)? Is he aware that at the last election his hon. Friend prophesied full-
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    time employment under a Conservative Government and that this is the worst forecast that has ever appeared in Old Moore's Almanack?
    Mr. Ross: If the Minister is not prepared to consider these two worthy burghs in isolation, will he not give part of Scotland at least the benefit of new thinking in relation to a wider area and consider scheduling the whole of Ayrshire, which would not only meet the needs of the two burghs concerned, but would meet the demands of the Scottish Council that we should think also in terms of growth points?
    Mr. Price: I cannot give an undertaking to schedule the whole of Ayrshire, but I certainly undertake to my hon. Friend and to the hon. Member that we will keep these matters under very close review.

    Wigan
    Mr. Fitchasked the President of the Board of Trade what plans he has for bringing new industries to Wigan.
    Mr. D. Price: My right hon. Friend is prepared to give sympathetic consideration to proposals for local expansions in Wigan or new projects which could not reasonably be expected to move to one of the development districts listed under the Local Employment Act.
    Mr. Fitch: Can the Parliamentary Secretary be more specific? What he has said is very nice, but it does not mean very much. Can he give more details? What has he in mind for Wigan?
    Mr. Price: I regret that I cannot be more specific. The hon. Member knows the general position that we are not prepared to designate Wigan as a development district. We are prepared to do what we can to assist local expansion—the hon. Member and I know of one or two cases which it is not appropriate to discuss in public—and secondly, there are firms who cannot go to development districts but whom we are anxious should go to places like Wigan.

    Textile Machinery (Re-equipment Schemes)
    Mr. Mappasked the President of the Board of Trade the estimated total cost of new machinery in respect of the cotton re-equipment schemes, and the cost and

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    grant, separately, of machinery installed at the latest available date; and if he will estimate the extent of new machinery, to be installed before the time limit expires.
    Mr. D. Price: Up to 1st May, 1963, a total of £5 million was paid as re-equipment grant, being 25 per cent. of total eligible expenditure by the industry of £20 million. This included expenditure on the installation of new machinery and the modernisation of existing machinery. I regret that it is not possible to make the other estimates requested by the hon. Member.
    Mr. Mapp: Is the Parliamentary Secretary aware that those figures fall substantially below the expectations of the Government when the scheme was started? Is it not true that the figures indicate conclusively the complete lack of confidence in Lancashire arising from the Government's policy of allowing an overflow of imports? Is it not about time that the Government looked again at the situation and at least arrested some of the haemorrhage and the damage which is being done to the industry?
    Mr. Price: I do not think the hon. Gentleman is entitled to draw the conclusions that he has done from these figures. Grants under the Act are not eligible for payment until a firm has completed its work, paid its bills and has satisfied the Cotton Board that the necessary conditions have been complied with. To say that the £5 million is a long way behind the forecast does not give a fair picture. The original total estimate given was £30 million, including the closure element. Scrapping took £11£8 million of that, and it remains to be seen whether the final figure comes up to the original estimate. Imports are another matter. If the hon. Gentleman would like to put down a question, I am sure that my hon. Friend the Minister of State will try to answer it.
    Mr. Mapp: Is not the hon. Gentleman misleading the House? Is it not the case that in July last it was anticipated that over £100 million of orders would be firmly placed but that in the ten months that have elapsed only about £30 million has been invested? So is he not being too optimistic in his expectancy for the next two months? Does
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    not this situation prove lack of confidence in Government policy?
    Mr. Mappasked the President of the Board of Trade if he will state the total amount of Government grant at the latest available date for installed new textile machinery under the re-equipment scheme and which is now out of use due to the firms closing down.
    Mr. D. Price: Precise details are not available. The best estimate which the Cotton Board can make from the information they have is that the figure is about £10,000.
    Mr. Mapp: Is the hon. Gentleman aware that the President of the Spinners' and Doublers' Association has referred to a number of mills which have had equipment grants but have now gone out of business due to lack of orders? Is he further aware that under the scrapping scheme adventurers came back into the industry with public money? The second phase of this scheme shows the lack of confidence in the industry. Will the hon. Gentleman do something constructive about it?

    Carpets
    Mr. K. Lewisasked the President of the Board of Trade whether, arising out of the recommendation of the Molony Committee on Consumer Protection that, pending the establishment of a grading system for carpets, all carpets should be labelled stating the weave, fibre content, &c., he will indicate what action it is proposed should be taken.
    Mr. D. Price: My right hon. Friend is still considering this recommendation in the light of comments which he has received from interested bodies.
    Mr. Lewis: Is my hon. Friend aware that he has been considering this too long and that it is time something was done? There is a great deal of consumer discontent on this matter. Is he aware that carpets are still being sold under the old utility label of Grade A, which is quite meaningless today? There are grades above that, but people think they are buying a genuinely Grade A carpet, although they are buying something which is probably nearer to Grade B or Grade C? This is quite disgraceful, and it

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    should be looked at from the point of view of consumer protection.
    Mr. Price: That is exactly the angle from which it is being looked at. When one considers imposing additional legal obligations, these things cannot be done very quickly. It is necessary to study them carefully. A draft British Standard dealing with the labelling of carpets of all types is in the final stages of preparation and covers most of the elements—except that of construction—recommended by the Molony Committee. This goes a long way towards meeting the Molony Committee's recommendations.

    Strategic Goods (Export Control)
    Mr. Frank Allaunasked the President of the Board or Trade, in addition to the list of goods subject to embargo for the state trading countries which is placed before Parliament from time to time, what recommendations or guidance he receives concerning British exports to these destinations of items not covered by the Export of Goods (Control) Order and the Strategic Goods (Control) Order.
    The Minister of State, Board of Trade (Mr. Alan Green): My right hon. Friend receives advice about exports to the state trading countries from many quarters. The only goods subject to export control are those listed in the Export of Goods (Control) Order and in the Strategic Goods (Control) Order.
    Mr. Allaun: Is the list placed before Parliament definitive and complete? As steel pipes are not on the list, is the hon. Gentleman fully supporting the South Durham Steel Company in its efforts to acquire an important order?
    Mr. Green: I gave a reply on 28th March on the export of steel pipes. The position has not altered. I have already said that goods subject to export control are listed in the Export of Goods (Control) Order and the Strategic Goods (Control) Order. Perhaps the hon. Gentleman would care to look them up.

    Export Credits
    Mr. Loughlinasked the President of the Board of Trade if he is aware that small British firms are at a disadvantage with their foreign competitors in the export market arising from a lack
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    of credit facilities; if he will examine this matter; and if he will make a statement.
    Mr. A. Lewisasked the President of the Board of Trade what action he has taken or intends to take to ensure that credit facilities are made available to small firms to enable them to tender for large export orders.
    Mr. Green: My right hon. Friend is satisfied that the credit facilities available to small British firms compare well with foreign facilities, and can enable credit-worthy firms to undertake any export orders within their capacity.
    Mr. Lewis: Will the hon. Gentleman look at the case, details of which have been sent to his Department, in which a British firm with capital assets of £10,000 earned a £250,000 export order but could not get the banks to give credit or the Export Credits Guarantee Department to underwrite it and, therefore, lost the order to West Germany. All the continental countries are able to give, and do give, these credit facilities. Will he look into this matter again? The papers are in his Department. Neither his Department nor the Treasury were able to do anything to help this firm.
    Mr. Green: I am aware of the case. The hon. Member must draw a distinction between the ability of a company to trade within its own resources or to use the normal banking facilities to increase capital assets with which to do more trade than it is already doing and the actual extension of State credit facilities. There is no evidence in my possession which suggests that State facilities in foreign countries, as opposed to banking facilities, are better than or even as good as the State facilities provided here.
    The Earl of Dalkeith: When considering this Question, will my hon. Friend bear in mind that the increase in postal charges on parcels is discouraging certain small firms from continuing with exports and that it is just possible that a review of or assistance with credit facilities may tip the scales in favour of their continuing to export?
    Mr. Green: Questions about postal charges should be addressed to my right hon. Friend the Postmaster-General, but I am sure my noble Friend would agree that we should not subsidise such things.
    Mr. Lewis: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the reply, I beg to give notice that I shall seek to raise this matter on the Adjournment or try to get into the debate next week.

    North-East
    Mr. Greyasked the President of the Board of Trade whether he will state, in respect of the North-East for the year ended 31st March, 1963, the number of industrial development certificates issued, the area covered by them, and the estimated additional employment resulting from them.
    Mr. D. Price: Eighty-five industrial development certificates were issued, with a total area of 2·5 million square feet, and an estimated employment of 6,300.
    Mr. Grey: Is the hon. Gentleman aware that that reply is totally unsatisfactory. How does this compare with the rest of the country in terms of these services? Is he aware that there is still 5·1 per cent. unemployment in the North-East region? The figure he has quoted is totally inadequate.
    Mr. Price: I recognise that the figures of unemployment in the North-East are high. However, over the year in question, the total working population of the North-East represented one-twentieth of the working population of the country as a whole and the new jobs arising from the issue of industrial development certificates in the North-East represented one-tenth of the new jobs created through these certificates in the country as a whole. If the hon. Gentleman follows that up with arithmetic, he will see that the North-East got twice as many jobs proportionately as did the remainder of the country.
    Mr. Grey: I beg to give notice that shall raise this matter on the Adjournment at the earliest possible moment.

    Seaton Delaval and Blyth
    Mr. Milneasked the President of the Board of Trade what has been the number of requests received for development grants since Seaton Delaval and Blyth were scheduled as development districts; how many have been granted; and what are the sums involved.
    Mr. D. Price: Five firm applications have been received for financial assist-
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    ance for projects in Seaton Delaval and Blyth, but only one of these has included a request for a grant: this case is at present under consideration.
    Mr. Milne: Is the Parliamentary Secretary aware that this news is rather disturbing? The efforts of his Department were recently described as having got off to a good start, but will he appreciate that a good start after twelve years of Conservative rule in Britain is not good enough and that we want more than a good start? Will he let us have something tangible in the very near future?
    Mr. Price: Leaving out the political overtones of that supplementary question, I think that we are off to a very good start. As the hon. Gentleman knows, the Board of Trade is building one advance factory in Seaton Delaval and other in Blyth. That seems to be substantial evidence that we mean what we say.

    Consumer Council (Travel Agents)
    Mr. Milneasked the President of the Board of Trade if the functions of the newly-appointed Consumer Council will extend to dealing with travel agents.
    Mr. D. Price: The Committee on Consumer Protection recommended that the Consumer Council should confine itself to those services which are linked with the supply or treatment of goods. The Council's terms of reference require them to have regard to the views expressed by the Committee. My right hon. Friend would not, therefore, expect the Council to consider the activities of travel agents.
    Mr. Milne: Is the Parliamentary Secretary aware that this leaves rather a wide gap in consumer protection? In view of the liquidations and take-overs which have taken place in this trade over the last twelve months, will ILT, ask the President of the Board of Trade to look very closely at this matter with a view to extending the activities of the Consumer Council?
    Mr. Price: My right hon. Friend has an open mind on this issue, but he feels that the Consumer Council has a lot of things to deal with in relation to goods.

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    However, if the Council represents to him that it wishes to look into the matter which the hon. Member has raised, he will certainly consider widening the terms of reference.
    Mr. Mitchison: Is not this an industry in which there has been a bit of trouble with people going out on holiday and finding the facilities they contracted for were not there? Is not the number of travel agents increasing almost as rapidly as the number of betting shops? Would not the hon. Gentleman consider looking at this matter on his own, getting his Department to look at it, to see whether anything can be done to protect tourists before the Summer comes on?
    Mr. Price: The hon. and learned Gentleman will not be surprised to know that I have looked at this. I can tell the House that the Association of British Travel Agents, to which the majority and certainly the more reputable travel agents belong, is very conscious of these matters and has a pretty strict code of standards, probably stricter than Parliament would ever enforce by Statute. It follows from that that if people want to be secure when doing business with a travel agent they know that members of the Association are strictly policed. Equally, there are travel agents not in the Association who are highly reputable and who honour their contracts.
    Mr. Robert Cooke: Will my hon. Friend bear in mind that this question of bad services to the public is just as important as that of the public being swindled by bad goods being provided? Will he keep his mind open and try to say something about it in the debate on Monday?
    Mr. Price: I have an open mind, but it is very much harder to get precise information on matters like these than when one is dealing with goods, which can be much more precisely defined. The Molony Committee had a good deal to say about this matter, and I commend its Report to my hon. Friend. I have an open mind, as my right hon. Friend has, to all suggestions about how services could be better covered.

    Commonwealth and G.A.T.T. Countries
    Mr. Biggs-Davisonasked the President of the Board of Trade what con-
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    sideration has been given to, and consultation with other Commonwealth countries initiated on, the proposals sent him by the honourable Member for Chigwell for amendments to the General Agreement on Tariffs and Trade designed to free and foster trade within the Commonwealth and to reduce tariffs within this and other groups of nations; and whether he will make a statement.
    Mr. Green: I would refer my hon. Friend to the communiqué which was issued after the meeting of the Commonwealth Trade Ministers on 14th May.
    Mr. Biggs-Davison: Is my hon. Friend aware that that communiqué and conference disappointed many of us very much? Is not some modification of the "no new preference" provisions of the G.A.T.T. as suggested, for example, in these proposals prepared by the Commonwealth Industries Association, necessary if Commonwealth preferences, now in danger of being further squeezed by the Kennedy Round, are to be brought into line with the requirements of the modem Commonwealth—or have the Government decided to do away with it altogether?
    Mr. Green: We conferred with our Commonwealth friends about methods of improving their relative position within expanding world trade. The expansion of world trade is surely as much in the interests of the Commonwealth countries as it is in ours or those of any other country.
    Mr. Fell: Will my hon. Friend tell me why we have committed ourselves in advance of the discussion to a slavish support for the Americans' view of what they want on the Kennedy Round of negotiations?
    Mr. Green: My hon. Friend has used rather imaginative terms in describing Her Majesty's Government's attitude towards the Kennedy Round. The Kennedy Round is part of a discussion within G.A.T.T., and the American representatives come to that round armed with more powers for reductions of their own tariffs than had previously been the case. We have welcomed this. We are not slavishly committed to any particular thing within G.A.T.T.

    Coal Mine Closures, Blaydon
    Mr. Woofasked the President of the Board of Trade what information he has been given by the National Coal Board regarding forthcoming closures of coal mines in the Blaydon area.
    Mr. D. Price: The National Coal Board has informed my right hon. Friend that the High Marley Hill, Stanley Burn and Stargate collieries in the Blaydon area are scheduled for closure during 1963.
    Mr. Woof: Is the Parliamentary Secretary aware that these forthcoming closures will make a total of twelve coal mines, two large coking plants and other industrial establishments to be closed in the area? Is he further aware that the mobility of labour is becoming much more difficult because mechanisation is leading to cuts in manpower? Would he not agree to the need for immediate measures to offset these serious dislocations? Can he say what long-term plans there are for industrial development in so far as it affects unemployment in the area?
    Mr. Price: We understand from the National Coal Board that about 395 men are likely to be involved in the three closures which I have mentioned. The Coal Board has said that it is not yet possible to say precisely how many of these can be redeployed to replace natural wastage in neighbouring pits, but that it is unlikely that more than about half the men involved in the closures at Stanley Burn and Stargate can be placed locally. As the hon. Gentleman knows, the Coal Board tries to redeploy men in other parts of the Durham coalfield. We naturally realise that this makes the need to get more industry into the Blaydon area greater, and the hon. Member knows that we are doing the best we can. He may like to know that Blaydon was made a development district in July, 1962, and that since then more than £500,000 has been offered in assistance to firms to go there.

    Development Districts
    Mr. W. Hamiltonasked the President of the Board of Trade how many representatives of firms likely to expand he has met in the course of the last month; and how many firms have com-
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    mined themselves to expand in development districts as a result of these discussions.
    Mr. D. Price: As a result of my right hon. Friend's invitations to the chairmen of companies with growth prospects, twelve meetings have been held since the end of April, and others have been arranged over the next few months. It is too early to expect these discussions to have led to firm decisions to undertake projects in the development districts.
    Mr. Hamilton: Is the hon. Gentleman aware that the President of the Board of Trade left the impression in his Budget speech that he personally would be meeting the representatives of these firms? Is it the case that officials of his Department are meeting them, not the right hon. Gentleman? Can the hon. Gentleman impress on the right hon. Gentleman the need for urgency in this matter, for young people are getting out of the development districts as quickly as they can because of the apparent lack of progress?
    Mr. Price: The hon. Gentleman will appreciate that, in the last three weeks particularly, my right hon. Friend has been away on very important commercial conferences. It has not been unreasonable, therefore, that his junior Ministers and senior officials should have seen some of these chairmen, for the very reason which the hon. Member mentioned—that we want to get a move on.
    Sir H. Harrison: Is my hon. Friend aware that the big concessions announced in the Budget are not as generally well known as he might think, particularly by some of the smaller firms? Will he take all possible steps to advertise these concessions?
    Mr. Price: Yes, Sir.

    Fife
    Mr. W. Hamiltonasked the President of the Board of Trade how many new jobs have been created in the development districts in Fife as a direct result of the operation of the Local Employment Act; and to what extent the creation of these new jobs has been offset by the loss of existing job opportunities.
    Mr. D. Price: Of the 2,000 jobs estimated to arise from projects in Fife for

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    which assistance has been offered under the Act about 450 have already arisen. I cannot say how many existing jobs have been lost, but I understand that about 2,000 redundancies have been notified to the Ministry of Labour since April, 1960.
    Mr. Hamilton: Does not the hon. Gentleman recognise that what is happening in Fife is happening in other parts of Scotland, and, indeed, in other parts of the United Kingdom, where people are dependent on declining basic industries? Is he aware that the measures which the Government introduced in 1960 were blatantly inadequate? Can he give us any hope, even with the newly announced incentives, that the number of new jobs provided will be greater than the increasing number of redundancies which are occurring?
    Mr. Price: I would not be rash enough to try to forecast precisely how this would work out in any development district, but we very much hope that the results of the improved benefits will be as the hon. Gentleman wants.

    Bagpipes
    Mr. Dempseyasked the President of the Board of Trade what was the total value of bagpipes imported into the United Kingdom in the last three years: and what were the countries of origin.
    Mr. Green: Imports of bagpipes are not separately distinguished in the trade statistics.
    Mr. Dempsey: Is the Minister aware that one would expect more wind in his reply that that? Would not it be fair, with an instrument of this nature, to make a separate record to indicate the way in which foreign competition is affecting industries in Scotland which manufacture bagpipes? In view of the state of the Scottish economy, should not the Board of Trade do everything in its power to encourage the production and manufacture of these instruments in Scotland?
    Mr. Green: I would be the last person to decry the importance of the manufacture of these musical instruments to Scotland. If a request were made by the industry for a separate heading, this would be considered, but it is very unlikely that the scope of the trade would
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    be sufficient to warrant this. Perhaps the hon. Gentleman would care to bear in mind that musical instruments are one of the very few categories of goods which are dutiable when imported from the Preference Area, so in fact these instruments have some form of tariff protection if imported from the Commonwealth.

    Carlisle Road, Airdrie (Industrial Estate)
    Mr. Dempseyasked the President of the Board of Trade if he will establish an industrial estate adjacent to the Carlisle Road, Airdrie, in view of the consistently high unemployment rate in the area and the suitability of the site.
    Mr. D. Price: I have nothing to add to my reply to the hon. Member of 10th May.
    Mr. Dempsey: Is the Minister aware that quite recently it was reported that 9·2 per cent. of the insurable population were unemployed in this large locality? Does the Minister realise that it is difficult to induce private enterprise to build factories, and that one of the ways of achieving our objective would be to lay out an estate and provide factories at reasonable rent which could give the area an opportunity of breaking the back of the consistently high level of unemployment there?
    Mr. Price: The hon. Gentleman knows from my reply on 10th May that we are to build a new industrial estate in North Lanarkshire, and we shall announce as soon as possible precisely where that estate is to be located.

    Newspapers and Periodicals (Exports to Canada)
    Mr. Lubbockasked the President of the Board of Trade what is the value of exports of newspapers and periodicals to Canada in the most recent year for which figures are available.
    Mr. Green: In 1962 exports of newspapers and periodicals to Canada as recorded in the Trade and Navigation accounts were valued at £40,830. This figure does not include the exports by post for which details are not available.
    Mr. Lubbock: Does not the hon. Gentleman agree that this valuable source

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    of foreign exchange is likely to be completely dried up by the imposition by the Postmaster-General of a 1,200 per cent. increase in postal charges? Can the Minister say whether any representations have been received on this subject, and, if so, what reply has been made to them?
    Mr. Green: The whole matter has been carefully considered, but the hon. Gentleman will appreciate that the Canadian Magazine Post, which was unchanged since 1907, allowed for specially low rates applicable only to Canada for articles of this kind. This is now going to be changed, and the postal rates applicable to Canada will be the same as those applicable to other overseas countries, and so it will not be absolutely unfair in our exchange with Canada. In addition, I am sure the hon. Gentleman appreciates that the special rates were costing £280,000 a year of public money, and I do not suppose that he really approves of that.
    Mr. Lubbock: Have not the agents who import these newspapers and periodicals consented to pay the full cost, and is it not greatly less than the ls.0½d per lb. which the Postmaster-General is proposing to charge?
    Mr. Green: If I have notice of tint detail I shall look into it and let the hon. Gentleman know, but I cannot give the answer out of my head.

    Brandon and Byshottles
    Mr. Ainsleyasked the President of the Board of Trade if he will add the Brandon and Byshottles Urban District Council to the list of development areas, in view of the continued contraction of the mining industry.
    Mr. D. Price: My right hon. Friend would not be justified in adding the Durham Employment Exchange Area (of which Brandon and Byshottles form part) to the list of development districts, since the rate of unemployment there is well below that prevailing in development districts. But he is aware of the importance of coal mining in these places and will continue to watch the position.
    Mr. Ainsley: The hon. Gentleman will be aware of visiting the neighbouring urban district on the occasion of the inauguration of an advance factory
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    there. This urban district is contiguous, almost identical in size and population and is dependent on what were mining industries. Its only sin is that it does not come into the same employment exchange area. If it is unrealistic to deal only with parts of the Tyneside area, can the Parliamentary Secretary tell me why it is realistic to deal differently with two urban districts which are affected by the same problems? One has been scheduled as a development district since the Local Employment Act came into force, but the other has not been so dealt with.
    Mr. Price: As regards the hon. Gentleman's point about the employment exchange area, over the last year the unemployment figure has been very much lower there than in any of the surrounding development districts. There are at present more jobs in prospect in Durham Employment Exchange area than the total number registered as unemployed. I would be very happy to let the hon. Gentleman have the figures.
    Mr. Ainsley: In view of the unsatisfactory nature of that reply, I beg to give notice that I shall raise this matter on the Adjournment at the earliest opportunity.

    Computers
    Mr. Dalyellasked the President of the Board of Trade what was the value of computers imported into the United Kingdom in each of the last five years.
    Mr. Green: Imports of computers are not separately distinguished in the trade statistics.
    Mr. DalyellWhy not?
    Mr. Green: They are a relatively new item. We are considering whether they should be included in the 1964 circulation list.

    South Yorkshire (Minister's Visit)
    Mr. Jegerasked the President of the Board of Trade whether he will make a statement on the official visit to South Yorkshire of the Minister of State.
    Mr. Green: Yes, Sir. My two-day visit to South Yorkshire this week was

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    one of a number of export promotion visits which I am making to manufacturing centres throughout the country. These visits are a continuation of those made by my predecessor early last year and provide opportunities to meet, in their own offices and workshops or at informal gatherings, as many as possible of those who are already engaged in exports in order to discuss with them their successes, ideas, problems or difficulties.
    Mr. Jeger: While thanking the Minister for that comprehensive reply, may I ask whether it is his intention to go to the Port of Goole, which is the only port in the West Riding of Yorkshire and is a natural outlet for exports from Yorkshire to the Continent of Europe? Will he consult the authorities in Goole with a view to increasing exports through the port?
    Mr. Green: I know the hon. Gentleman will appreciate that one cannot be everywhere at the same time, but the means of moving goods from factories, whether in Yorkshire or in any other part of the country, through the most convenient ports are amongst the matters discussed with industrialists, and therefore the needs and problems of Goole are in fact discussed even though I have not been there.
    Mr. A. Roberts: Is the Minister aware that the public of Yorkshire view this visit with apprehension? Is he further aware that they look on this visit not as a means of increasing exports but as a means of poaching industry out of the county?
    Mr. Green: I assure the hon. Gentleman that those suspicions are wholly unfounded. My sole purpose in making the visit is to help to promote exports, and the location of industry or the moving of industry out of Yorkshire has played absolutely no part, and would play no part, in any of my discussions with the constituents of the two hon. Gentlemen who have raised this matter.

    South Africa
    Mr. Wallasked the President of the Board of Trade what was the value, respectively, of armaments and of other exports supplied in each of the past five years to the Republic of South Africa;
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    and what is the expected value of similar exports during the coming year.
    Mr. Green: The annual values of our total exports to the Republic of South Africa are obtainable from Account IV of the appropriate December issues of the Trade and Navigation Accounts. It is not our policy to disclose the total value of armaments exported to other countries. As far as total exports to South Africa are concerned, they have been rising in recent months, and we expect them to reach a higher level this year than in recent past years.
    Mr. Wall: Is my hon. Friend aware that any cancellations of orders for supersonic naval strike aircraft, which incidentally are wholly unsuitable in terms of security duties, could cause unemployment in east Yorkshire? Would not my hon. Friend agree that the cancellation of orders for political pm-poses is bound to have repercussions on our export trade?
    Mr. Green: In general, I agree with my hon. Friend's comment on that, but he will appreciate that if he has a specific question on that point it is a matter for the Foreign Office and not for me.

    County Durham
    Mr. Shinwellasked the President of the Board of Trade how many advance factories are in process of building in the County of Durham; how many will be completed in 1963; how many are in contemplation; and what estimate he can give of the number of workpeople who are likely to be employed.
    Mr. D. Price: Ten advance factories are being provided in the County of Durham under the present programme. Three of these are already under construction. My right hon. Friend expects that seven will be completed this year and the other three soon afterwards. The 10 factories should provide more than 1,000 jobs.
    Mr. Shinwell: When does the hon. Member expect production to begin?
    Mr. Price: When the factories are completed and we have tenants for them.
    Mr. Shinwell: Is not this all pie in the sky? Is nothing definitely arranged?

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    Is it not a fact that at the end of the day very few men will be absorbed into employment? Is not that the position? Is this the best that the Government can do? In view of the unsatisfactory nature of that shocking reply, I beg to give notice that I shall raise the matter on the Adjournment.
    Mr. Speaker: I do not think that the irregularity of the notice can be successfully concealed in a supplementary question

    Wingate and Peterlee
    Mr. Shinwellasked the President of the Board of Trade what industries he is seeking for the Wingate area in County Durham where coal-mining has ceased and is unlikely to be resumed; and what are the prospects of new industries for Peterlee.
    Mr. D. Price: Any company is welcome which will provide stable employment for men in the Wingate area. In the last few weeks three companies have decided to establish new projects in Peterlee. These are estimated to provide nearly 200 new jobs.
    Mr. Shinwell: Is the hon. Member aware that as a result of the closure of the pit in the Wingate area 600 men have lost their jobs? Does he really believe that the employment of 200 men—when they are actually employed—will make very much difference to that situation?
    Mr. Price: I think that it will. It all helps. Furthermore, I know that in recent weeks a number of other companies have been visiting the Peterlee area, and we hope that some, at least, will establish projects there.
    Mr. Shinwell: In view of the unsatisfactory nature of that reply, I beg to give notice that I shall raise the matter on the Adjournment.

    North Lanarkshire
    Miss Herbisonasked the President of the Board of Trade if he is aware that Kingshill No. 2 Colliery is likely to close, that in the same area 14 collieries and mines and a foundry employing 600 men have been closed since 1948, and that there is already heavy unemployment in the Cleland, Newmains, Forth, Carluke
    1534
    and Wishaw area; and what proposals he has for providing work for the unemployed and those who will become unemployed in this district.
    Mr. D. Price: Projects already secured for North Lanarkshire and Shotts are estimated to provide nearly 6,500 new jobs, and my right hon. Friend will continue to encourage new industry in this area. But he cannot undertake to provide employment specifically to replace jobs lost as a result of a particular closure in a particular place. Travel-to-work is a recognised feature of life today.
    Miss Herbison: Is the Minister aware that this question does not deal with a particular closure of a particular pit? Is he aware that this area has been the worst-hit area in the whole of Britain from the point of view of loss of jobs owing to declining industries? Is he further aware that this is an area where, according to the county plan, in the next few years there will be a great increase in population? Does he realise that none of the 6,000 jobs about which he talks is situated in this area, and that for many people none of these jobs will be in what could be called a travel-to-work area?
    Mr. Price: I do not entirely agree with the hon. Lady in the second part of her supplementary question. I agree with her about the need to bring many more jobs to this area.
    Mrs. Hart: Is the hon. Member aware that in considering this part of the County of Lanarkshire it is absurd to talk in terms of travelling to North Lanarkshire for jobs? Is he aware that there has been great neglect of the needs of this part of the county for new jobs, and will he take that fact into account in his considerations?
    Mr. Price: I am aware of the problems of people travelling from Forth to Carluke and beyond.

  NATIONAL FINANCE

    Rating Valuation (Wimborne and Cranborne)
    Sir Richard Glynasked the Chancellor of the Exchequer whether the same valuer was responsible for revaluation for rates in the rural district of Wimborne

    1535
    and Cranborne, the adjoining county borough of Bournemouth and the rural district of Beaminster; and what directions as to the basis of revaluation were given to the valuer or valuers concerned.
    The Chief Secretary to the Treasury (Mr. John Boyd-Carpenter): No, Sir. A different valuation officer was concerned for each area. The basis for the new rating assessments is prescribed by law. No special directions were given to the valuation officers concerned.
    Sir Richard Glyn: Is my hon. Friend aware that as a result of the activities of these different valuers the rate burden in the rural district of Wimborne and Cranborne has increased by almost double the increase in the adjoining county borough of Bournemouth, which has many more amenities, whereas in the rural district of Beaminster, which has similar amenities to Wimborne and Cranborne, the rate burden has actually gone down? Is not this a very striking discrepancy? Will not my right hon. Friend ask the Inland Revenue to look into the matter again?
    Mr. Boyd-Carpenter: As my hon. Friend the Financial Secretary to the Treasury told my hon. Friend when he brought a deputation to see him and my right hon. Friend the Minister of Housing and Local Government, this question is being looked into. The deputation was quite recent. It submitted a mass of material, and our investigations are not yet completed.

    Premium Bonds
    Mr. J. Wellsasked the Chancellor of the Exchequer if he will alter the regulations concerning Premium Bonds so that they can be held by a trustee.
    The Economic Secretary to the Treasury (Mr. du Cann): No, Sir.
    Mr. Wells: Is not my hon. Friend aware that a number of people hold Premium Bonds in a trustee capacity, and that should these trustees—or sham trustees—die, the Premium Bonds are aggregated to those trustees' estates, to the great inconvenience of the charitable or other bodies for whom they have been acting? Will he look into the matter again?
    Mr. du Cann: I should point out that the Premium Bonds scheme was introduced with the intention of attracting a new class of small savers. In this it has been extremely successful. The expense of the scheme is justified only on that ground, and it is certainly not designed to appeal to trustees.

  RURAL TRANSPORT
  Mr. Speirasked the Prime Minister whether he has now been able to give consideration to the case for assisting and improving the public transport services in the rural areas of Great Britain as put to him by the deputation led by the hon. Member for Hexham which he received last December; and whether he will make a statement.
  Mr. Moreasked the Prime Minister what consideration he has given to the improvement of rural transport, following the deputation which he received last December; and if he will make a statement.
  The Prime Minister (Mr. Harold Macmillan): Final decisions on this matter ought to take account of the special studies of rural transport which my right hon. Friend the Minister of Transport has had made. I understand that the full results of these studies are expected by the end of June.
  Mr. Speir: While thanking the Prime Minister for the personal interest that he is now taking in this problem, may I ask him whether he realises the intense irritation which exists in rural areas of Britain at the failure of the Government to get a move on on this problem? Does he realise that it is more than eleven years ago since the Conservative Party in its Election Manifesto promised better services. Does my right hon. Friend appreciate that it is more than two years ago since Professor Jack's Committee reported on the role of these services. Does my right hon. Friend realise that the National Association of Parish Councils considers that the surveys to which he has referred are so unnecessary and such a waste of time and money that they are not cooperating on them?
  The Prime Minister: The services will be very much improved. It is a question of the cost of them. I regret the delay.

  1537
  but I hope that it will not now be long before a decision is made.
  Mr. More: Have the Government no concern for the increasing difficulties facing the small independent bus operators who have served our country districts so well in years past.
  The Prime Minister: Yes. That fact will be borne in mind.
  Mr. Hilton: As a member of the deputation that the Prime Minister was good enough to see some time ago, may I ask him whether he is aware that when the Beeching Plan is implemented the already inadequate rural transport services will be worsened? Will he give an assurance that before any railway stations are closed—especially in Norfolk—roads will be improved, so that they are able to carry the increased volume of traffic thrown on to them?
  The Prime Minister: It is a question of the profitability of the rural bus services, but I would have thought that if passengers are conveyed only upon the roads, rather than divided between the trains and the roads, it should help the bus services.

  FOREIGN AGENTS
  Mr. Edelmanasked the Prime Minister whether he will introduce legislation requiring any individual or body engaged in promoting for reward the concerns of a foreign State or States to register as a foreign agent.
  The Prime Minister: No, Sir.
  Mr. Edelman: Does the Prime Minister consider it desirable that Britain's public relations men should receive under-cover subsidies in order to promote the interests of countries which might not coincide with those of Great Britain? In those circumstances, will not he study United States legislation precisely on this subject?
  The Prime Minister: No, Sir. I have been informed of the United States decision. Their position is a little different from ours, because, under their system, when Congressional committees are considering legislation they take evidence direct from interested parties, which we do not do. Furthermore, the hon. Mem-
  1538
  ber will realise that legislation is quite a job to fit into the programme, and I do not think that it is worth while at present.

  SECURITY SERVICES
  Mr. A. Hendersonasked the Prime Minister if he will take the necessary steps to safeguard the British security services from interference, following the recent attempt to disrupt their communications.
  Mr. Grimondasked the Prime Minister if he is satisfied with the security arrangements for intelligence services in view of the disruption caused by telephone calls and unauthorised entry into some of their offices; and if he will make a statement.
  Mr. E. Fletcherasked the Prime Minister if he will make a statement on the blocking of telephone lines at Intelligence headquarters and the unauthorised entry of people into these offices.
  The Prime Minister: I am glad to say that reports on this subject have been much exaggerated. Nevertheless, I very much deplore, as I am sure will all responsible people, any attempt, however unsuccessful it may be, to hamper and impede the important and necessary work of our security services. Steps have been taken to minimise the effectiveness of any such attempts.
  Mr. Henderson: Can the Prime Minister say, from the information available to him, whether these represent interferences on the part of irresponsible people, as against a serious campaign of subversion and espionage?
  The Prime Minister: I do not think that they are very serious. I have been given the information that at the beginning of this month an anonymous caller telephoned one of the buildings used by the security services on about eight occasions. The duration of each call was a few seconds only. The calls were either abusive or obscene. On another occasion there was the story of a reporter who declined to give his name and called at the address and who asked for an interview. These calls were on matters of that order of significance. They were a nuisance rather than a danger.
  Mr. Grimond: Can the Prime Minister assist the House by telling hon. Members whether these headquarters are of importance or not? If they are not of importance, one could understand that these calls do not matter. But after the recent revelations about what goes on in the security services of the country I do not think that we ought to be complacent about this. If these headquarters are of importance, should not the right hon. Gentleman assure the House that he is taking effective steps to keep the numbers secret so that even obscene callers do not interfere with the work there?
  The Prime Minister: With regard to the second part of what worries the right hon. Gentleman, I will give the most specific assurance. With regard to the first part, it may perhaps be found possible to get over the difficulty by changing the numbers.
  Mr. Fletcher: The Prime Minister has said that these reports are exaggerated. Can he tell the House whether it is or is not true that, according to the Guardian, there was an occasion on which the whole of the 40 telephone lines of Military Intelligence were blocked for eight hours, with the result that they could not take incoming or outgoing calls? Will the Prime Minister say whether this happened or not, and, secondly, whether any steps have been taken to prevent that happening in future?
  The Prime Minister: What did happen was that over a period of about one and a half hours on eight occasions these calls to which I have just referred were made.

  HIGH ALTITUDE TESTS
  Mr. A. Hendersonasked the Prime Minister whether following the launching of 400 million copper needles into space, he will propose to President Kennedy the establishment of an international agency for controlling such experiments.
  Mr. M. Footasked the Prime Minister if, following the latest space experiments with filaments of copper conducted by the United States Air Force, he will consult President Kennedy regarding the desirability of establishing international control of experiments of this kind.
  The Prime Minister: No, Sir.
  Mr. Henderson: In view of the fact that a large number of scientists, including Sir Bernard Lovell, have declared that this experiment contaminates space, is not it something in the nature of the high altitude tests which have been suspended, and is it not likely that unless some form of international control is established these experiments may well be repeated by other countries which are seeking the same objective as the United States?
  The Prime Minister: I admit that we brought to the notice of our American friends the dangers that if these were released before it was established that the satellite was in its correct orbit some harmful effects might take place on scientific research. In view of all the other difficulties, I do not feel very confident about being able to get agreement on civil international control.
  Mr. M. Foot: Does the right hon. Gentleman's answer mean that the United States Government embarked on this experiment without any consultation with the British Government at all? Does he think that the United States Government have the right to treat the Universe as if it belonged to them—like some Latin-American State? And even if that is the position of the Prime Minister, is the right hon. Gentleman so pusillanimous that he is not even prepared to propose that there should be some international consultation before these experiments are conducted?
  The Prime Minister: We are closely informed by the Americans. This experiment has the greatest importance—or it may have the greatest significance—in one of the most important aspects of defence.
  Mr. Foot: Will the Prime Minister say whether he was asked by the American Government whether he would agree to the experiment, and when he gave his consent—if he was asked—did he consult British scientists such as Sir Bernard Lovell about it?
  The Prime Minister: This experiment was first conducted in October 1961. We were in touch with the United States Government. As I have said, they have agreed that any future experiment will be so arranged that the needles are not

  1541
  released until the vehicle is in its proper orbit. I have been personally into what is proposed. It is an experiment which, I can assure the House, may be of very great significance in the whole system of the deterrent defence.
  Sir H. Legge-Bourke: May I ask whether my right hon. Friend will bear in mind that he will have very considerable support from all the leading scientists in this country and from many hon. Members on both sides of the House if he can use his influence to ensure, so far as possible, that we are not led into a sort of cold war in space involving the distribution of haberdashery all over the universe?
  The Prime Minister: Yes, Sir. The next Question on the Order Paper deals with that to some extent. I must tell the House that so long as I have any responsibility I could not object to this particular experiment being made under the best possible conditions, for it is an important one.
  Mr. Dribergasked the Prime Minister if he will now make a statement on the scope and terms of his communication to the United States authorities on the scientific effects of high-altitude tests.
  Mr. M. Footasked the Prime Minister whether he will make a statement on his recent discussions with British scientists about the effects of high-altitude tests.
  Sir H. Legge-Bourkeasked the Prime Minister if he will now make a statement on the effects on scientific research of experiments in space; and what steps he proposes taking in conjunction with appropriate American authorities to control such experiments.
  The Prime Minister: My noble Friend the Lord President of the Council and Minister for Science arranged for a panel of experts to consider the scientific effects of high-altitude nuclear tests, and to report to him through the Steering Group on Space Research. Their Report is published today as a White Paper, and copies will be available in the Vote Office. A copy of the text has been sent to the United States Government.
  Mr. Driberg: Have the contents of this White Paper been communicated to
  1542
  the United States authorities and can the right hon. Gentleman say what response there has been from them?
  The Prime Minister: The Report has just been concluded and has been sent to them. Regarding the substance of the Report, perhaps the hon. Gentleman would study it. I find myself very unwilling to answer questions "off the cuff" on the rather complicated questions which the hon. Gentleman will see when he reads the Report.
  Mr. M. Foot: While I am sure we are grateful to the Prime Minister for the care which he has taken to get this Report produced, does not he think that it would have been better to have had this investigation and Report produced in this House before he gave his approval to these high altitude tests instead of after they have happened?
  The Prime Minister: The hon. Gentleman knows the whole of this matter. I was asked to get this Report made. It has been made by a number of scientists, including Sir Bernard Lovell. It is unanimous. Perhaps hon. Members will study it and put down further Questions about it.
  Sir H. Legge-Bourke: The whole House will, I am sure, recognise the extraordinary difficulty of the Prime Minister in this matter in view of the fact that this rainbow bomb test was originally a purely American test. Is my right hon. Friend aware that he may rest assured that many people will be deeply grateful for the initiative which he took in arranging for this report? We shall want some time to consider it, but would my right hon. Friend do everything he can to reassure us that before any further tests of this kind take place, the appropriate steps will be taken with the Americans?
  The Prime Minister: Yes, Sir. I think that over this matter the American Government are just as anxious as we are to proceed only with what is necessary and to have every regard to the considerations which I know are felt by my hon. Friend and other hon. Members. Therefore, I will undertake to do that. I must add that I am bound to say that the only final satisfactory end would be if we could abolish these tests altogether by all sides.

  POLARIS SALES AGREEMENT
  Mr. Wiggasked the Prime Minister if steps have now been taken to ensure that the undertaking entered into by the Government under the conditions of paragraph 2 of Article XIV of the Polaris Sales Agreement, Command Paper No. 1995, has been implemented throughout industry, the Armed Services and the Civil Service; and if he will make a statement.
  The Prime Minister: Naturally we are taking the measures necessary to fulfil this undertaking.
  Mr. Wigg: Will the right hon. Gentleman be good enough to tell the House whether, when the Polaris Sales Agreement was being negotiated, he took fully into account the disparity in practice between what happens in the United States and in this country? Has he taken any steps whatever to consult industry, both sides—employers and the T.U.C.—about what is involved in positive vetting if, on this occasion, the Government are to honour the agreement into which they have entered with the United States?
  The Prime Minister: Of course we have gone into this. We are not required to adopt in detail exactly their methods. But our procedures are broadly the same and are known to the Americans. There will be certain cases —very few of them—where there is access to classified information and where special security measures would have to be taken. But those would be taken whether we had an agreement with the Americans or not because it would be the right thing to do.
  Mr. H. Wilson: In view of the concern expressed in the debate on the Report of the Radcliffe Tribunal about the inadequacy of positive vetting in the particular case dealt with by the Tribunal, would the right hon. Gentleman say whether there have been requirements in the system of positive vetting arising out of the Radcliffe Report, and secondly, whether they will apply in other cases in relation to Article 14(2) of the Polaris Agreement?
  The Prime Minister: I am continually discussing this matter with the security authorities. I understood that the
  1544
  anxiety of the hon. Member for Dudley (Mr. Wigg) was lest these procedures might be too severe.
  Mr. Wigg: Is the Prime Minister aware that he is dodging the issue a little? He said that it will not be the same arrangements in detail. That is not the point. He has in honour committed this country to afford the same measure of protection to the concept of Polaris as is ensured by the United States by their methods. That is what the agreement says. If he will read the paragraph, of which surely he is aware, he will see that it uses the words
  "the same degree of protection as is afforded by the Government of the United States."
  Did he before he undertook that obligation examine and see what the obligation meant? Now he has committed the honour of this country, will he for the first time see that we carry out our obligations?
  The Prime Minister: Article 14, subsection (2) reads:
  "Shall undertake such security measures with the Government of the U.K. as are necessary to afford to classified articles, services and documents substantially the same degree of protection…"
  The hon. Member did not read it accurately—
  "as is afforded by the United States."
  That is exactly what I said. Our measures are similar although not precisely the same.
  Mr. H. Wilson: Emphasising the word "substantially" does not mean that the Prime Minister is suggesting it will not be equal even though it may be different in method? Do we understand from him that, while detailed methods may be different, there will be the same measure of protection by our security vetting system that the Americans have with theirs? Since it is quite clear that there was nothing like that amount in the Vassall case because they did not even have the commonsense to look through his Service record or ask the views of his immediate past Service chiefs in Moscow, will the Prime Minister say whether improvements have been made so that in carrying out this article there will be substantially the same measure of protection?
  The Prime Minister: Improvements are continually being made and will be

  1545
  made. I am glad this exchange has taken place, because we hope to have the support of the House if there are measures which may impose a certain degree of distaste or discomfort on a number of workers in different parts of this undertaking.

BUSINESS OF THE HOUSE
Mr. H. Wilson: May I ask the Leader of the House whether he will state the business of the House for next week?
The Chancellor of the Duchy of Lancaster (Mr. Iain Macleod): Yes, Sir. The business for next week will be as follows:
MONDAY, 20TH MAY—Supply [18th Allotted Day]: Committee, which, if the House agrees, will be taken formally to allow debate on the Opposition Motion on Consumer Protection.
Consideration of Lords Amendments to the Protection of Depositors Bill.
TUESDAY, 21ST MAY—Finance Bill: Further progress in Committee.
Motion on the Pedestrian Controlled Vehicles Regulations.
WEDNESDAY, 22ND MAY—Supply [19th Allotted Day]: Committee.
Debate on Agriculture, which will arise on the appropriate Votes.
Motions on Schemes for the United Kingdom on Grassland Renovation, Ploughing Grants, Winter Keep and Fertilisers.
THURSDAY, 23RD MAY—Finance Bill: Further progress in Committee.
FRIDAY, 24TH MAY—Private Members' Motions.
MONDAY, 27TH MAY—The proposed business will be: Finance Bill: Further progress in Committee.
Mr. H. Wilson: Since the last item which he announced is for the beginning of the week before Whitsun, is the Leader of the House now able to say what the Government's intentions are about the adjournment for the Whitsun Recess?
Is the right hon. Gentleman aware that as soon as we come back after the Recess there will be a very strong desire from this side of the House, and perhaps on the opposite side, too, for a full-dress
1546
debate on foreign affairs and disarmament?
Mr. Macleod: I shall make an announcement about the Recess as soon as I can. We hope that with reasonable progress, particularly with the Finance Bill, the Recess will he two weeks and a weekend—17 or 18 days as the case may be.
I take note of what the Leader of the Opposition has said about the business after we come back. We can, of course, discuss that.
Sir G. Nicholson: On the Order Paper no fewer than nine statutory instruments have been set down for consideration, each of which has the note that it has not yet been considered by the Select Committee on Statutory Instruments. How has that irregularity taken place? Are they all of such urgency that they cannot be first considered by the Committee?
Mr. Macleod: No, Sir. The Committee is meeting on Tuesday, the 21st. This is quite normal, as reference to previous business statements would assure my hon. Friend. If any irregularity were found in them, the business of the House which I have announced would have to be altered, but I am sure that my hon. Friend will find, if he looks it up—and he knows about these matters very well indeed—that this is a normal form of announcement.
Mr. Fletcher: May we take it from what the right hon. Gentleman has said that there is no intention of taking any of these Statutory Instruments until the Select Committee has met on the 21st?
Mr. Macleod: That is so; and if anything were found in them which was unsatisfactory the business would have to be altered accordingly. I am glad to have the opportunity of making that clear.
Mr. Biggs-Davison: Having regard to the Motion on the Order Paper in the name of my right hon. and learned Friend the Member for Hertford (Sir D. Walker-Smith) concerning Commonwealth trade, can my right hon. Friend assure me and the House that we shall have an opportunity of debating the important consequences for this country of the E.F.T.A., Commonwealth and G.A.T.T. conferences?
Mr. Macleod: I cannot give that assurance, but I have announced business up to Monday of the week in which we rise for the Whitsun Recess. Naturally, there are matters which we shall have to take in that week.
As to the point raised by my hon. Friend, I think we ought to wait and see how matters at present being discussed turn out. Then in competition with other claimants, I shall consider his suggestion.
Mr. Shinwell: Since the Leader of the House made his statement yesterday on the proposed legislation on House of Lords reform, no doubt he has had time to reflect on it. Can he therefore now tell the House when the Bill will be presented and when a debate on it will take place?
Mr. Macleod: I can answer the first point fairly precisely, but not the second. It is not a difficult Bill to draft, but there are one or two rather complicated purely drafting matters to give effect to the joint Report of the two Houses and the statement I announced yesterday. I hope—it can be no more—that the appropriate Minister will be able to present the Bill to Parliament before Whitsun if this goes well. If not, it will be immediately afterwards, but I hope before.
I cannot say when we shall debate this matter, but, as I said yesterday, we should like to get the Bill this Session.
Mr. McMaster: In view of the continuing seriously high level of unemployment in Northern Ireland, can my right hon. Friend find an early day, or half a day, to discuss its affairs, as was agreed at the end of the last debate on Northern Ireland?
Mr. Macleod: There will be such an opportunity. The precise timing I must leave for the moment.
Mr. D. Foot: Will the Leader of the House say whether his attention has been drawn to the Motion which appears on the Order Paper today in my name and the names of 100 hon. and right hon. Members drawing attention to policies being pursued by the South African Government and calling upon Her Majesty's Government to propose at the United Nations a general embargo upon the shipment of arms or military equipment?
[That this House condemns the policy of apartheid pursued by the Government of South Africa, the denial of elementary human rights to the great majority of the South African people and the series of enactments whereby the South African Parliament have abrogated the rule of law and transformed the Republic into a police state; further condemns the refusal of the South African Government to accept and act on the opinion of the International Court on South West Africa; and, having regard to the views expressed on 6th November 1962 by the General Assembly of the United Nations, calls upon Her Majesty's Government to propose to the United Nations a general embargo upon the export of arms and military equipment to South Africa.]
In view of the great concern which is felt, particularly over arms shipment to South Africa, among the African members of the Commonwealth, will the right hon. Gentleman arrange for a debate on this matter at an early date?
Mr. Macleod: I have, of course, studied that Motion. Every hon. Member holds views and they do not differ, I dare say, from the views of many hon. Members opposite about the policy of apartheid in South Africa. That is not in dispute. What is in dispute is whether the methods of the Opposition are wise or not—and we think that they are not. I could not undertake to find Government time to debate the Motion.
Mr. H. Wilson: Is the right hon. Gentleman aware that while we all may on our lips express detestation of apartheid, there is all the difference in the world between those who are accessories after the fact and those who are not?
Mr. Speaker: Order. I must administer a reproof to myself and to others. We must confine business questions to business.
Mr. Robert Cooke: Will my right hon. Friend say when he expects to proceed further with the Television Bill? Will he bear in mind that the Thursday before Whitsun will be a most inconvenient day for further consideration of such an important Measure as that?
Mr. Macleod: We shall be bringing the further stages of the Television Bill before the House as soon as is reasonably possible and appropriate. Some

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Amendments have been tabled by my right hon. Friend the Postmaster-General. But the Bill is not included in the business which I have announced.
Answering the question which the Leader of the Opposition raised about time to discuss these matters, I shall pay more attention to what he says when I hear him making exactly the same answers in relation to other and Communist countries whose methods we deplore.
Mr. Wilson: Is not the right hon. Gentleman aware that we do not ship arms to Communist countries?Is he further aware—
Mr. Kershaw: On a point of order—
Mr. Speaker: Order. I think that everybody is to blame, probably including myself. We cannot relate this to the business for the ensuing week. As the servant of the House, I am trying to manage the business of the House for it, and I am sure that it is in the common interest to keep the business questions to business, otherwise the discussion ranges too wide.
Mr. Hector Hughes: When will the Government find time for further progress in respect of the Wills Bill, which is much desired?
Mr. Macleod: I am not sure whether the hon. and learned Member is referring to the Bill on intestacy, in which there is a considerable amount of interest. If so, I can tell him that there is a chance that it will be introduced into the House at a very early date.
Mr. Hector Hughes: I was referring to the Bill which is designed to repeal the Wills Act of 1861—a very useful Bill which was introduced last November and opposed by some hon. Members opposite, but which has at last been given a Second Reading and which is now due for the Committee stage. When will he find time for the Committee stage?
Mr. Macleod: I was not clear whether the hon. and learned Member was referring to that Bill or to the Bill on Intestacy, about which I made an earlier answer. I am sorry if I misunderstood him. The Bill to which he now refers
1550
will have to take its turn with all the other Private Members' Bills.
Mr. Grimond: May I pursue the question asked by the hon. and learned Member for Ipswich (Mr. D. Foot) and ask the Leader of the House whether he wishes to correct one impression which he has given? If the House wants to debate a controversial matter, as arms to South Africa certainly is, does he not agree that that is an additional reason for debating it and that as Leader of the House of Commons, and not as joint head of the Conservative Central Office, it is his business to serve the interest of the House and not to make party points?
Mr. Macleod: If there are opportunities which the official Opposition wish to take to debate this matter, they can find them, but in these matters it would be quite wrong to provide Government time for such a Motion as that on the Order Paper.
Sir A. V. Harvey: Is my right hon. Friend aware that a number of hon. Members on this side of the House would like to discuss the whole problem of the export of armaments, including the wisdom of sending military aircraft to countries such as Indonesia?
Mr. W. Hamilton: Will the Leader of the House tell us whether the Government will be making a statement on the suggested rundown in the dockyards, details of which appeared in the Press this morning? Is he aware that there is considerable anger on this side of the House about the way in which this matter has been handled in that the Minister has seen Conservative Members affected, but has not seen hon. Members on this side of the House?
On another point, will he make arrangements for the annual report of the Duchy of Lancaster to be available in the Vote Office? I am informed that that office has never seen it there, although the right hon. Gentleman said that the Treasury presented it to the House.
Mr. Macleod: I will first answer the second of those two slightly unrelated points.
As the hon. Member knows from his inquiries, the Duchy of Lancaster is not

1551
a Government Department and does not have a Parliamentary Vote, but every year the Treasury presents its accounts to Parliament. I will see whether there is any way in which they can be made more conveniently available.
Answering, next, the first part of the hon. Gentleman's supplementary question, there is no intention of making a statement on the matter to which the hon. Member referred within the compass of the business statement which I have announced.
Mr. Emrys Hughes: Does the Leader of the House recollect that several months ago he gave a promise that he would inquire into whether hon. Members who abstain from voting and wish to have their abstentions recorded in HANSARD shall have the right to do so? I do not ask him to make a statement next week, but will he promise to give the matter his early attention?
Mr. Macleod: I have been looking at that and a number of other matters, and I am at the moment in negotiation as to the matters—there are at least a dozen of them—which are possible candidates which might be considered by the Select Committee on Procedure.
Mr. H. Wilson: May I refer to the questions asked by the hon. Member for Chigwell (Mr. Biggs-Davison) and to next week's business? Does the right hon. Gentleman recall that when we debated the position arising out of the break-
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down of the Brussels negotiations, on 11th February, the Prime Minister made a great point of the Commonwealth Trade Ministers' conference in May—the conference which was held this week. Will the right hon. Gentleman give an undertaking that we shall have a full statement made to the House on this week's conference as part of next week's business, so that the House could then consider whether we ought to devote some time to debating the whole position of Commonwealth trade?
Mr. Macleod: Without giving a specific undertaking about that, I should like to consult my right hon. Friends most concerned and to put that point to them.
Mr. Willis: When a statement is made about the future of the dockyards, will it be made in the form of a statement to the House and not in answer to a Question which limits the possibility of further questions?
Mr. Macleod: There is no immediate intention of making an announcement in either of those forms, but I will keep that point in mind.
Miss Vickers: In view of that answer, may I ask whether there is any intention to take action about the reports in the Press which appeared before a statement was made?
Mr. Macleod: I do not think that the responsibility for Press reports comes into the question of the business announced for next week.

ORDERS OF THE DAY

  FINANCE BILL
  Considered in Committee [Progress 15th May].
  [Sir WILLIAM ANSTRUTHER-GRAY in the Chair]

  FINANCE BILL

    Clause 14.—(ABOLITION OF CHARGE ON OWNER-OCCUPIERS.)
    3.49 p.m.
    Mr. G. R. Mitchison: I beg to move, in page 12. line 11, at the end to insert:
    Provided that in order to limit the effect of this section in the case of an individual who occupies more than one residence, such an occupier in respect of any residence other than his principal residence shall be treated as if he were entitled to rent (hereinafter called "hypothetical rent") and hypothetical rent shall be deemed to be included among the rent; to be charged under the said new Case; so, however, that no person shall pay more tax in consequence of this proviso than he would have paid if this Chapter II had not been enacted.
    (2) For the purpose of ascertaining the hypothetical rent of a residence subparagraphs (3) (with the omission of all words after "accordingly") and (4) of paragraph 6 of Schedule 4 to this Act, the provisions of that Schedule relating to deductions and Schedule 7 to this Act shall apply to such individual as aforesaid as they apply to the owner mentioned in the said sub-paragraph (3).
    (3) In this section "principal residence" means the residence which the occupier elects (in such manner and at such time as may be prescribed by the Commissioners of Inland Revenue) to have treated as his principal residence or which, failing such election, has the highest annual value among his residences, or, where there is no election and the annual values are equal, is selected for the purpose by the Commissioners of Inland Revenue.
    The Chairman: I think that it would also be convenient to take, at the same time, the Amendment in page 12, line 21, at the end, to insert:
    (b) hypothetical rents in respect of land in the United Kingdom.
    Mr. Mitehison: Clause 14 is the main Clause dealing with the whole question of the abolition of Schedule A and the extension in place of it of provisions of Schedule D. It relates to premises of every kind—not merely to houses in the ordinary sense of the word, but also to multiple shops, and so on. There can be no doubt about that. The Amendment.
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    however, relates only to dwelling-houses or residences. I have taken the term "residence" because it occurs elsewhere in the Bill and it seems convenient for the purpose.
    The object of the Amendment, put very shortly, is to provide that the relief afforded by this change shall not go to any one person in respect of more than one house in the year of assessment. The relief is given to the occupier and in respect of his beneficial interest, but I imagine that no one will dispute that, just as a multiple shop firm can occupy premises all over the country, so an individual can occupy more than one residence at the same time.
    Take, for instance, a man who has a house in Surrey, perhaps in the part sometimes called the stockbroker belt, and who comes up to a flat in London, exceptionally his own flat, but still his flat, and occupies it during the middle part of the week. He is, as I see it, the owner-occupier of both those residences. I suggest that the Committee—there is very considerable support in the past for this—should not extend this relief to the same person in respect of both those residences at the same time.
    The White Paper shows us that the abolition of Schedule A will mean in the current year a concession of £35 million and in a full year a concession of £48 million. It must be recognised, however, that the way in which it is done may well result in some people being rather worse off for the change, although the majority of them obviously will be better off. Therefore, the Amendment takes the precaution of providing, in accordance with the rules of order, and in this instance I should have thought in accordance with the common sense of the matter, that if it is accepted no one will pay any more tax than he would have been liable to pay but for the whole change. By "the whole change" I mean the abolition of Schedule A and its replacement by Case VIII of Schedule D.
    I confess that we on this side of the Committee, having in the past found this a comparatively simple matter to put on to paper, because all we asked was for an exemption from an existing Schedule A in favour of owner-occupiers and in favour of a single house, found our task a good deal more difficult when the drafting character or the technical

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    character of the change made by the Government had to be considered. It seemed impossible to keep Schedule A alive for the sole purpose of dealing with people who had more than one residence.
    For the reason I will give in a minute, it would have been easy to deal with the commercial or industrial occupier of more than one set of premises, but not so in the case of a resident. It seemed that the only possible way to do it was to treat him in parallel, as it were, as if he had been occupying a rented house, to regard him as paying the rent himself, and to charge that rent or the amount of it under Case VIII of Schedule D.
    This rather involved and artificial process I must say filled me, at any rate, with some terror at the beginning of the operations. When I had finally drafted the Amendment, I showed it to a close associate of mine, whose comment was instantaneous and immediate, because what we were producing was a hypothetical rent. The comment raised, it is true, a small question about tents as residences. It ran like this:
    "There once was a man in a tent,
    Who paid hypothetical rent.
    It was deemed to include
    What he thought might be rude,
    But he never found out what it meant."
    I appreciate the spirit of that comment as applied to the Amendment, but I must say I was encouraged to find that in another part of the Bill the Government have done exactly the same thing. They have done it in connection with estates. They have set out a whole lot of provisions which seem to me to be as applicable to this hypothetical rent as to the rent mentioned there which, I may say, though it is not called hypothetical, is just as hypothetical as this one.
    Accordingly, the Amendment in subsection (2) contains a reference to passages in Schedule 4, on page 71 of the Bill as now printed, which deal with the case of an owner—occupying a residence and being treated as if he were entitled to rent for a period. I need not go into that in detail. I doubt whether the Committee is really concerned with it. The substantial point is the one I have stated, and I mention these matters only to show that what appears at first sight to be a little far-fetched may possibly be the only
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    way of dealing with what hitherto was a fairly simple question, but has become a complicated one by reason of the complete abolition of Schedule A.
    I said something about the history of this matter. It is worth having a look at it. It begins for my purpose in 1961–62, when two Amendments appeared on the Notice Paper in the names of a number of Conservative Members, the leading spirit in one case being the hon. Member for Kidderminster (Sir G. Nabarro) and, in the other, another Conservative Member. They were both quite well supported. Both those proposals, which were to exempt owner-occupiers from Schedule A liability, contained an express reservation that the exemption was only to be in respect of one house or residence in the year.
    What I think is very interesting about it is that one of the supporters of the new Clause of the hon. Member for Kidderminster was the present Financial Secretary. However, something must have happened in the interval, because when the Amendment came to be debated not only did it receive only a little support in Conservative circles, but I notice that the Financial Secretary voted against it. He must have changed his mind. He had no doubt taken his name off the Amendment in the interval. I think that I can rely on this as showing that intelligent and experienced people like the Financial Secretary thought that it was advisable to restrict the benefit to one house in a year.
    I would go a little further. I have looked through the efforts of other parties. We have all been in this. I think that I am right in saying that on every occasion the Liberal Party—I always hesitate to say that, but I think it is on every occasion—has confined the remedy to a single house in a single year.
    Mr. Donald Wade Mr. Donald Wade (Huddersfield, West) indicated dissent.
    Mr. Mitchison: I beg the pardon of the hon. Gentleman. He will agree with me that the Liberal Party did so on some occasions, but there may have been others. Perhaps I have not followed it through far enough.
    Mr. Wade: I may have an opportunity to develop this a little. At this

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    point, may I say that we were prepared to take half a loaf on some occasions, but that we have always wanted the whole loaf?
    4.0 p.m.
    Mr. Mitchison: Be that as it may, the days of Whig lords occupying several houses about the countryside are past, and I think that we shall have to consider this matter in rather different social circumstances. I am interested particularly in the attitude of the Government and their supporters, of whom I expect a mass to come and support us on this Amendment, if on nothing else, when we divide on it. Otherwise, there will be grave inconsistency with what they have said previously.
    For our part, the story is the same. We on this side have never hesitated about it. We have always felt that the reasons for the exemption, as it was in those days, were social reasons, into the merits or demerits of which I shall not go now, upon which, though, there may be a good deal to be said about them when we discuss the Clause as a whole. We have regarded this as a relief which should be given to those who occupy and continuously live in one house.
    We do not wish to exclude the person who has two or more houses; we wish merely to confine the considerable benefit of the Clause, which is what in most cases it will bring, to one house. Accordingly, we provide that a principal residence should be selected. It sounds rather magnificent. It is quite possible for a man to have two small houses, both, by curious coincidence, of about the same size, and by the Amendment we allow the taxpayer to select which house should be treated as his principal residence. If he does not select, we take the one which is most expensive, the one with the highest assessment and, therefore, the most in his favour, but if, even then, he will not opt, we would allow the Commissioners of Inland Revenue to select.
    I imagine that cases of this kind would be rare and, however reluctant the Commissioners might be to accept the duty, it is very doubtful that they would ever be called upon to perform it.
    That is the substance of the Amendment. It must be considered partly with
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    the history of the matter in mind and partly with some consideration for what we are trying to do by the change made in the Bill. It looks very different in form, it covers several matters, but it is intended to be the abolition of Schedule A in favour of the owner-occupier. It is significant, when we are considering a question of this sort, that, whatever the half, three-quarters or whole loaf asked for by the Liberal Party may amount to, the general sense of the House has always been that it ought to be confined to one house.
    I hope that the Government, having considered the Amendment, will tell us what addition or subtraction it would make to the two figures I have already given, the total cost of the concession in the current year and the cost of the concession in a full year. I call it a concession for simplicity, but, of course, it is a radical change.
    We have now to consider what the hypothetical rent, as it is here described, really amounts to. Again, the Bill is quite encouraging to those who want to make things as simple as possible. In Schedule 7, we find the basis on which the hypothetical rent is to be assessed. It is assessed on the ascertainment of annual value. I have looked at the definition of annual value here, and it seems remarkably like annual value as it has been defined and used for other purposes. I hope that I shall be corrected if I am wrong, but there seems to be no great difference, for example, between the annual value as ascertained in this way and the Schedule A valuation as ascertained by the Inland Revenue in the past, subject to questions of Schedule A having had various hypotheses in it which may or may not occur in this case.
    Broadly speaking, when we are dealing with annual value and treating it as the Government do in Schedule 4 as the basis for an assumed rent, we are, in effect, coming remarkably close to what the intention of the Committee has always been in the past, that is, to preserve the Schedule A liability, though in a rather different form, in cases where a man occupies more than one house and has already got the benefit of the change in respect of one house out of the two or the bunch which he occupies.

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    We are, therefore, carrying out what hon. Members have supported enthusiastically in previous years, because the restriction we propose has, for all practical purposes, very nearly always—I put it in that way—been there and clearly represents the view of hon. Members about the social requirements of the concession. What we are trying to do is to consider the case of a man who, to take a very simple example, lives in a single house, does his work from there, and who has felt a sense of grievance in the past because he thought he was being assessed on some money which he had never, in fact, received. I shall not go into the merits of the change as a whole, but I think that that has been the feeling behind it. At least, that is my experience of what the feeling has been, and I imagine that other hon. Members will have found much the same.
    If we are now to extend this to someone who has several houses, to his second, third, fourth and nth house, we shall be doing something which has singularly little relation to the true character of the discontent which has been felt or to the feeling that there was a social injustice in having a tax of this kind.
    I cannot believe that anyone will get really indignant because he only has a concession, which is made to owner-occupiers, in respect of one out of his plurality of houses. If he is so indignant, I cannot find any corresponding indignation in myself. I cannot feel that he has been hardly done by or that there is any social injustice in preserving for him something remarkably like the existing position in respect of all but his first house, his principal residence, as we call it.
    There is always the feeling about the taxation of houses, whether nationally or locally, that there is a sort of imbalance about it—I do not say unfairness—in that one does not pay rates, on, for instance, a Rolls-Royce motor car but one does pay rates on a small house. This has been behind a lot of the feeling about Schedule A. People have noted that those with other property did not pay tax according to what was regarded, rightly or wrongly, as a notional basis, and they have felt that
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    it was rather unfair that their own houses should be selected. On the other hand, when someone has half a dozen houses, there is not the same matter for indignation even on that ground.
    I do not wish to delay the Committee unduly. This is quite a simple matter. As I say, it does not raise the various broad questions which we may have to consider when we debate the Clause stand part. It does not say that the amount of the concession should be limited to a small or large sum and I am open to accept the point that some people occupy houses so large that their property might be treated as being a dozen houses under one roof.
    There are such cases and we cannot deal with every question of social justice or injustice within the taxation machinery, particularly on an Amendment such as this. There is, after all, another side to this matter. In a good many cases the owners of large houses have had other benefits conferred on them. I am thinking, for example, of historic houses, the owners of which may have had help from public funds. There are other cases, particularly historic or artistic premises, where the owners have benefited from the half-crowns received from visitors and, perhaps, as a result of having sold them tea. These are all matters which may arise in connection with this change and we will have to consider the relation of these activities to other trading activities which are carried on from a house.
    In practically every case the owners of multiple shops—which are not touched on in the Amendment—will, no doubt, get out of the Sechdule A assessment, but, in doing so, they may well fail to get the deduction of that assessment which they would otherwise have made in arriving at their profits which are taxable under Schedule D. At first sight, no doubt, it is rather staggering to reflect that the change will relieve some multiple shops—or a bank, for example—of a considerable Schedule A liability in any year. My hon. Friends and I do not think that there is as much in that as appears at first sight because of the consequent result in connection with their Schedule D assessments. That does not arise directly on the Amendment and we shall probably wish to consider it at a later stage.

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    I repeat that the Amendment is concerned with one point only—the question whether a man should be entitled to the benefit of this change in respect of more than one residence in one year. We say that in a modern country, which is supposed to be civilised, we do not want to stretch ourselves to extend tax concessions in favour of someone's second, third or fourth house. He should, in so many cases, be able to get along with one; and if someone can suggest a case where more than one residence is required and should receive this concession I venture to think that any such case would be highly exceptional.
    Having regard to the opinions expressed by all hon. Members in Amendments and proposed new Clauses on previous Finance Bills, to the considerable number of hon. Members who have already indicated their support for the Amendment we are discussing—though in a different form, naturally—I trust that the Amendment will receive the acceptance of the Government. If not, I hope that it will receive the overwhelming support of the Committee.
    I think that my hon. Friends should not be particularly reluctant to face a General Election on the question whether someone should get a valuable tax concession not only in respect of one house of which he was the owner-occupier, but in respect of half a dozen. Most people would think that that was, to use a colloquialism, a bit stiff.
    4.15 p.m.
    Mr. F. J. Bellenger: I sympathise with the purpose of the Amendment and I hope that when the Chief Secretary replies he will not only say whether or not he supports it, but will tell us something about the machinery for operating the change. Many people, some of them hon. Members, have objected to the abolition of Schedule A because of the unfairness which they think would be caused to tenants who pay rent.
    As the Committee knows, Schedule A is an assessment which is generally fixed once every five years, a quinquennial reassessment, on hereditaments. I am wondering, therefore, how the Inland Revenue will ascertain who is the beneficial owner-occupier. Hitherto, the assessments have gone with the hereditaments and the only question has been whether
    1562
    or not the occupier was the owner. If we do away with Schedule A and the whole machinery involved in it, then how will the Inland Revenue assess a hypothetical rent, such as that mentioned by my hon. and learned Friend the Member for Kettering (Mr. Mitchison)? Would a not mean, in effect, reintroducing the whole Schedule A machinery by way of the Inland Revenue's valuer regarding the second, third or fourth house?
    Under the Schedule A procedure—and my hon. and learned Friend did not refer to this—the hypothetical income is part of the taxpayer's income. If he has two, three or four houses he will, for the purposes of assessing his total income, either for Income Tax or Surtax, have a rent or valuation for each property which he holds. Thus, in doing away with Schedule A we are not only doing away with the tax on the hereditament, but we are also giving, for a certain number of owners who own more than one house, a considerable advantage, because once their Schedule A assessments have gone then for all the houses in question they need not insert in their annual returns the hypothetical or Schedule A value for each property.
    It is obvious that while the Government wish to relieve house owners, especially those with mortgages and so on, they are not only giving the relief to these people but are giving to multiple house owners a considerable tax and, perhaps, even Surtax concession. My hon. and learned Friend has inserted in the Amendment a provision to the effect that the tax payable by the multiple property owner or occupier should not be more than what it would have been had he been assessed under Schedule A. Those who own more than one property are well advised by professional people and can eliminate their Schedule A tax by virtue of maintenance claims.
    To that extent, even if the Amendment is accepted, it will be possible for those owning more than one house to evade paying tax on their subsidiary residences, if I may call them that, because of maintenance claims for repairs. My hon. and learned Friend told us that he does not want to put them in a worse position than they are under Schedule A. I think that many hon. Members on both sides of the Committee are in sympathy with his purpose, namely, that although we wish to

    1563
    help, as we have urged on successive Chancellors, those who are buying their own houses and who are already burdened with mortgages, we do not want to give an advantage to those who are not in that position and who can well afford to pay tax on their possessions, whether stocks and shares, or other hereditaments.
    I should like the Chief Secretary to explain a little more about the machinery of assessment under the new Case VIII once he has eliminated the Schedule A assessment. Whether that arises on this Clause, I am not quite sure, but I think that he should at any rate answer the point that I have put to him as to how he will define the owner-occupier under this Clause.
    Mr. Wade: I am inclined to agree with the right hon. Member for Basset-law (Mr. Bellenger) that those who own several houses are the most likely to pay no Schedule A tax owing to the amount that they are able to spend on repairs, thereby cancelling out their Schedule A tax by maintenance claims. Therefore, that somewhat diminishes the merits, if any, of this Amendment.
    The Amendment is somewhat complicated, but I think that the issue is fairly simple, namely, whether the Committee is in favour of total abolition of Schedule A Income Tax. The most powerful arguments for retaining Schedule A tax have been made from the Treasury Bench over a number of years. There will certainly be some eating of words from the Treasury Bench during the course of this debate.
    Those who are opposed to Schedule A have, in previous debates, put forward three points of view. One is that no Schedule A tax should be paid by the owner-occupier in respect of one house. The second is that no owner-occupier should pay Schedule A tax, but, otherwise, Schedule A tax should remain. The third is that Schedule A tax should be abolished altogether. I have been willing to support the proposal for the abolition of Schedule A tax on one house as the first step, but I have always been in favour of total abolition.
    In recent years, the Amendments which I have tabled to Finance Bills have been intended to bring about total abolition, although, as I mentioned on Second Reading, I often puzzled over the
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    whether it could be done by one paragraph or two, and I now find that it requires several pages to do it, but the intention is the same.
    I agree that on questions of social justice and social requirements it is the owner-occupier of one house that we are worried about. I have always felt that there are strong reasons for total abolition. I shall mention two. First, take the case of the landlord, that is both the individual landlord and the property-owning company. I do not think that there will be a loss of revenue there, because tax will be paid on the rent received, less such deductions as are allowed, and it may well be that under the existing law some landlords and some property-owning companies may have been paying less tax than they should have done because they have had the advantage of the statutory allowance, whether they spend money on repairs or not.
    The landlord who spends nothing on repairs gets the benefit of the statutory allowance, whereas, if Schedule A is abolished, the tax will be calculated in a different way and this whole complicated business of property tax and statutory allowance will, as I understand it, no longer arise. Therefore, concerning the landlord, I can see no objection to total abolition of Schedule A.
    The other reason why I have always advocated the abolition of Schedule A is that I think that the whole concept of notional income is too complicated. It gives rise to many anomalies, and it would seem to me that the same kind of arguments which have been deployed against notional income should be deployed against this new idea of a hypothetical rent. For example, under the old Schedule A tax, if I owned two houses, I would pay Schedule A tax on both. If I owned a house and a house-boat, I would pay Schedule A on the house, but not on the house-boat. If I owned a house and a caravan I would pay Schedule A on the house, but not on the caravan. It would seem to me that similar kinds of anomalies would continue here. Would there be a hypothetical rent in respect of the house-boat and the caravan, or would it only apply to the dwelling-house? I do not know the answer. I think that that indicates the kind of difficulties that would arise.

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    Rates have been mentioned, but they are a different matter. However many houses one owns, one would pay rates if they are furnished. I should be out of order in pursuing it now, but I am in favour of paying some rates on empty properties. However, that is another matter. As to Schedule A tax, I would have thought that having at long last got the Government to do something about it, we should be well advised to go all out for total abolition.
    Mr. William Warbey: I suppose that when the Chief Secretary replies he will make a number of hypothetical rents in the hypothetical tent constructed by my hon. and learned Friend the Member for Kettering (Mr. Mitchison). On the other hand, I shall try, if I can, to defend him in advance from these blows that are being prepared to be struck.
    I cannot follow the hon. and learned Gentleman through all the fisco—legal jungle in which he so brilliantly led the Committee in introducing this Amendment, but I should like to take up the point that he made when he asked what we are really trying to do. That is what the layman outside this Committee will ask. He will ask what we are trying to do and whether we have taken the proper steps to achieve it. In general principle, I would say, whatever may later be said from the Government Front Bench, that if it is right to do a certain thing one can find legal and fiscal ways of doing it.
    4.30 p.m.
    It seems to me that what we are trying to do here is to take one more step in the direction of placing our system of taxation on a basis of social justice. The Treasury has argued for years that it is right to tax under Schedule A because a notional income is derived. Today, we shall be told that this is nonsense and that all along the Treasury has been mistaken in regarding the value received by the occupier of a house from living in a house which he owns as something which should be subjected to tax. We shall be told that he has paid for the income which he is notionally receiving. He pays for it when he buys the house, and the purchase price represents the capitalised value of the rent which otherwise he would be compelled to pay if he were not able to afford to buy. Therefore, there is no real addition to income and,
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    consequently, no additional income to be taxed.
    I accept that second view. It seems to me very sensible and reasonable. I accept it on the basis of what seems to me to be an underlying principle of our modern tax law—that we arrange our taxation so that it does not fall upon expenditure on the necessities of life. That is the underlying principle of the adjustments which we make in Income Tax by way of personal and other kinds of relief. We say, in effect, that it is wrong in principle for the State to levy tax on money which people have to use in order to purchase the necessities of life—food, clothing and shelter.
    We apply this principle in certain other fields, for example, when we assess people's liability to contribute towards the cost of legal aid. We then assess them on the basis of their disposable income and we exclude from that disposable income, in making that assessment, the money which they have necessarily to pay in the form of rent or of mortgage payments on their house.
    It seems to me that that principle should now be applied clearly and logically to our tax law. Therefore, it follows that it is wrong to tax a man on the money which he necessarily spends to provide living accommodation for himself and his wife. I shall be introducing to the Committee later, for that reason, a further Amendment to provide relief of taxation on the payment of rent. I cannot discuss that any further now. What I can discuss further is the question whether, having decided that we relieve a man of taxation on the expenditure which he necessarily has to incur in order to provide living accommodation for himself and his family, we should also relieve him of tax on providing not necessary accommodation, but some additional form of luxury or semi-luxury enjoyment for himself and his family.
    There are a great number of people who, in addition to owning a house in town, own a little weekend cottage to which they can go for refreshment and enjoyment. The number of people in that category is increasing, but this is not a necessary expenditure. This is something which people voluntarily choose to do in order to add to their enjoyment of life, just as they voluntarily choose to spend money on alcohol or

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    tobacco. No one for a moment would suggest that they should be relieved of taxation on either of those two items.
    Therefore, whilst I would say that it is absolutely right to relieve people of taxation on their necessary expenditure on living accommodation, whether in the form of rent or mortgage payments or of the notional income from a house, it would be utterly wrong to extend that principle to relieving them of taxation on such additional and supplementary facilities as they provide for their own enjoyment.
    The Chief Secretary to the Treasury and Paymaster-General (Mr. John Boyd-Carpenter): It is a practice, and I think a rather bad one, sometimes in this Committee to begin a speech with the observation that one hopes that such and such a Member will forgive one for not following his arguments on a certain subject.
    In this case, I must begin by asking the hon. Member for Ashfield (Mr. Warbey) to forgive me if I do not debate the very ingenious argument against the Amendment which, first of all, he established and which later, to his own satisfaction and without undue difficulty, he subsequently demolished. I would prefer not to follow him in an interesting essay in sumptuary taxation, but to give the reason why we do not think that this is a good Amendment.
    The hon. Member for Sowerby (Mr. Houghton) obviously recalled, when we came to Second Reading, the fact that in the Budget debate I identified him as the sole mourner beside the coffin of Schedule A. I congratulate him on recruiting another in the guise of his hon. and learned Friend the Member for Kettering (Mr. Mitchison) as, I may say, a mourner rather than a mute. I was interested to note this attempt to maintain just a flicker of life, and perhaps I should say a hypothetical life, in the dying body of Schedule A.
    It was an ingenious argument that was put forward, but I thought, with respect, that the hon. and learned Member for Kettering put far more weight than it would bear on the argument that the proposal had been put forward in this shape by other hon. Members, including
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    no less a personage than my hon. Friend the Financial Secretary and even my hon. Friend the Member for Kidderminster (Sir G. Nabarro). The fallacy of that argument, and nobody knows it better than the hon. and learned Member, is that when one is not in office, and one is seeking to obtain an adjustment or concession on taxation one always puts it, for the purposes of argument, as low as possible.
    The hon. and learned Gentleman knows that perfectly well. When Schedule A was being maintained, it was understandable—and, I should have thought, extremely sound parliamentary tactics—to put the argument for the abolition of part of it, a very large part of it, as low as one could. That is how one always does things if one is out of office, and as the hon. and learned Gentleman has ahead of him, I hope, a great many years in which he will be in this House but out of office, I hope that he will bear in mind that little bit of very friendly advice—
    Mr. Mitchison: I am very much obliged to the right hon. Gentleman. On this side, we meant it; I accept, of course, his proposition that his hon. Friends did not mean it.
    Mr. Boyd-Carpenter: I accept the hon. and learned Gentleman's very graceful acknowledgment of the fact that we are very much better parliamentarians than are his hon. Friends. I must welcome, and admit into our company, the hon. Member for Huddersfield, West (Mr. Wade), who, with a realism rare, if not unique, in his party, said that he would rather have the whole loaf than part of it. The hon. Gentleman will do well in his party.
    The right hon. Member for Bassetlaw (Mr. Bellenger) raised the very practical question of what this limitation of the abolition of Schedule A would mean in terms of administration and mechanics. He is quite right. Although I do not base my argument on this, there are very serious and practical considerations. The fact, to which the hon. and learned Gentleman referred, that there is a provision in the first paragraph of the Amendment to the effect that the new hypothetical rent shall not involve a higher commitment than Schedule A, had it remained,

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    would have involved for the person concerned was, I thought, put in in an attempt to get round the rules of order.
    The hon. Member for Sowerby says that it was, but his hon. and learned Friend says "No—it was also common sense," so I am sorry that we have a split in the party opposite on this issue—
    Mr. Douglas Houghton: Keeping the Amendment within the rules of order is also common sense.
    Mr. Boyd-Carpenter: Yes, but the hon. Gentleman's hon. and learned Friend, in a more generous way, said that it was also common sense on the merits of the matter.
    If we are to maintain this provision, whether on merits, to please the hon. and learned Gentleman, or as a matter of parliamentary adroitness, to please the hon. Member for Sowerby—and I am anxious to meet all tastes in this respect —and have Schedule A continued then, in order to get at that figure—and here the right hon. Member for Bassetlaw is absolutely right—we would have to preserve the whole machinery of Schedule A of statutory deductions, valuations and allowances for repairs. One would think that for a very small matter, as I understand it, in terms of money, it would not be right to preserve all that administrative machinery, the difficulties and, sometimes, the anomalies of which many of us who have had experience in the matter well know.
    I cannot tell the hon. and learned Gentleman what would be saved to the revenue by what he describes as this concession—rather an odd way, in a Finance Bill, of describing a concession—but I am advised that it would inevitably be very small. What is, however, quite certain is that we would have to preserve a good deal of the administrative apparatus of Schedule A. That would be a pity—
    Mr. Mitchison: It seems to me, looking at the passages in page 71 of the Bill as now printed—part of Schedule 4 they are referred to in the Amendment—and looking also at the definition in Schedule 7, that the Government themselves are bound to preserve some of the machinery, and no more than the machinery I would wish to preserve, for quite a number of properties.
    Mr. Boyd-Carpenter: It is quite clear that if we were to preserve adequate machinery to deal with this point of the hypothetical calculation as to what the Schedule A would have been on the house had Schedule A not been abolished, in respect only of such houses as are owned by someone who also owns another house, quite considerable additional administrative organisation would have to be maintained.
    4.45 p.m.
    I agree entirely with what the hon. Member for Ashfield, I think, said—that if there was a really serious value and purpose in it, it would have to be done. I agree with him that administration must follow policy and good sense. But what is really the point of this? In the first place, it cuts dead against the policy of the Clause, which is that the enjoyment of property which does not bring in rent shall not attract taxation.
    That is a good principle, but that good principle would be eroded in this respect in the case of certain people. As I understand, in the opinion of one or two hon. Members, having a second house is in the nature of a luxury—I think that the hon. Member for Ashfield said so—and, because it is a luxury, the people concerned should pay taxation on it and not be relieved as those are to be relieved who have only one house.
    That sounds a plausible argument until one sees how it would work. Is it, in fact, in this day and age, generally proved that the possession of a second dwelling-house is in the nature of a luxury? Hon. Members who are very often faced inescapably with the problem of having a home in their constituency—if far from London—and a home in London, know that it is untrue, and that it is a necessity of their lives. Nor would I say that a country cottage, however humble, is of the nature of such a luxury as specifically to attract taxation which is not attracted by other dwelling-houses.
    The hon. and learned Member for Kettering gave away the whole case when he said, Of course, in respect of one house, we will leave the exemption from Schedule A, however big and grand that house is." It may be one of the greatest houses in the land, such as that in which my right hon. Friend the Member for Woodford (Sir W. Churchill)—whom we

    1571
    are all so delighted to see with us this afternoon—was born. On the other hand, someone may possess a country cottage and a small mews cottage in London. That person is, apparently, to be treated by the Amendment as a more suitable vehicle for taxation on sumptuary grounds than is the owner of one mansion, however enormous. I do not think that that makes sense.
    I can illustrate this point with a case I know of in my own personal acquaintance. It is that of a man who inherited a substantial house in the country in which, under present conditions, he is unable to afford to live. He moved to a cottage and, as his family grew, took back another cottage into possession and occupied that with his family, too.
    That man, had he been rich enough to occupy his ancestral mansion would, as everyone accepts, have been excluded from Schedule A, but because of the reduction in his income, involving his living in two cottages, the Amendment would expose him to the payment of Schedule A on one of them. He would, then, actually pay more tax because he was living, on a relatively limited scale, in two cottages in the park than he would if he were occupying the mansion. I think that illustrates how the idea of using a restriction on withdrawal of Schedule A as a kind of sumptuary taxation would not work.
    Even from the point of view of those who put it forward —and I do not accept that there is any necessity for it—this idea would create far more anomalies of just the class and kind to which I have been referring. I do not think that the Committee need worry about the limited number of very rich men who may have several houses. The level of taxation on large incomes remains so very high—so really substantial—that the question of a Schedule A liability—which, in just those cases, is almost always offset by allowances—is really immaterial.
    One of the general objections to Schedule A, as we have seen, is that rich and well-advised people have in recent times paid very little. The tax, on the whole, falls on those who have not had the advantage of advice about repairing and maintaining their houses.
    1572
    I therefore suggest that to preserve all the machinery just to make sure that a certain number of those people are liable for hypothetical rent in place of Shedule A in respect of a second house—or a third house—seems to be completely misconceived.
    We should involve ourselves in considerable administrative expense, in an attack on the principle of the Clause and in patent unfairnesses and anomalies between man and man for a very small sum of additional revenue. In the circumstances, I must advise the Committee that we should not be wise in putting this addition in the Clause.
    Mr. Bellenger: The right hon. Gentleman has not dealt with the point that I put to him about how one will identify the owner-occupier for tax purposes under this Clause.
    Mr. Boyd-Carpenter: I followed what the right hon. Gentleman said, but I thought that he directed his question to the exemption of an owner-occupier. If there is to be any discussion on the Question, "That the Clause stand part of the Bill", my hon. Friend the Financial Secretary will be able to deal with that point more conveniently than I could deal with it on an Amendment designed strictly to restrict the scope of the tax.
    Mr. John McKay: I do not wish to introduce a discordant note into the debate. I am sure that all lion. Members are particularly anxious to help the ordinary wage-earner in his struggle to get a house. There is a point here which perhaps has been overlooked. My question is: will the Government's proposal help all the people who are trying to buy their own houses? This is a reduction of taxation, and, of course, everyone likes tax reductions. What will the Government's proposal do for the man who pays no tax and who is having a great struggle to pay the mortgage on his house? It will not help such a man. He will be in the same position after the Clause is passed and implemented as he was before.
    This Clause is, in reality, for the better-off people among the working section of the community whom we are all trying to help particularly, but we are not helping those who are worse off and who pay no taxes whatever. There is a very large number of these people, and the

    1573
    question is, knowing that we are helping a large number of owner-occupiers and giving relief to a large number of householders, cannot we do something in future if not at this moment—
    The Chairman: I am reluctant to interrupt the hon. Gentleman, but I hope that he appreciates that we are discussing one Amendment and not the whole Clause.
    Mr. McKay: I am referring to the general principle of the Clause. If I am out of order—
    The Chairman: The hon. Member has just put his finger on the point. He is dealing with the whole Clause, and that is not in order on this Amendment.
    Mr. Cyril Bence: I was interested in the point made by the Chief Secretary about the man who took two cottages. I have sympathy with the Clause. I am not so sure about the Amendment. I have been stimulated to enter the discussion because of what the right hon. Gentleman said. I am thinking of a man with a large family who is evicted from a big house. He might have a claim on a local authority to get a subsidised house and yet he might not be able to do that. Suppose that he sells an investment which perhaps brings in £3,000 in income and then acquires two houses for him and his family. It seems unreasonable to me that he should have to pay taxation even on the second house.
    Mr. Houghton: May I try to help my hon. Friend? I cannot conceive circumstances in which a man with a large family was evicted from a large house and, to cope with that situation, was able to buy two smaller ones.
    Mr. Bence: I was quoting a hypothetical case based on what the Chief Secretary said. His proposition was that suppose a man lived in a very big house but could not afford to keep it and was evicted because he could not keep up the payments or pay the rates on it and that, in trying to keep it up, became bankrupt. He would be thrown out. Because he has got into hopeless debt, someone would throw him out—perhaps the bank manager or the building society. I do not suppose that he would leave it voluntarily. He would be forced to leave by circumstances and
    1574
    would have to find alternative accommodation.
    Suppose he finds a three-room cottage and he and his large family are bundled into it, but because it is overcrowded, and because he has a bit of money but not enough to buy a big house, he buys another cottage.
    Mr. Houghton: My hon. Friend said only a moment ago that the man about whom he is speaking was "broke" and that is why he had to be thrown out of his larger house. Apparently, he could not pay the rent and rates and was hopelessly on his back financially. Yet now, apparently, this hypothetical father of a hypothetical family is buying two hypothetical houses.
    Mr. Boyd-Carpenter: At a hypothetical rent.
    Mr. Bence: It is obvious that this hypothetical man with his hypothetical family living in a hypothetical big house could have a hypothetical bank balance of £3,000, but could not afford to keep up a big house. A man can have a few thousand pounds in the bank, but still not be able to afford to run a mansion. We must not assume that because a man cannot afford to run a mansion he has not any money. I can afford to run a small house, but not a big one. Because I cannot afford to live in a 20-room mansion in Berkshire, it does not mean that I have not got two ha'pennies for a penny. I might be able to buy a cottage in the country, or to buy two cottages.
    I cannot quite accept all this; I am not yet satisfied. I hope that my hon. Friend the Member for Sowerby (Mr. Houghton) will give us further explanation, because I am sure that my hon. and learned Friend the Member for Kettering (Mr. Mitchison) would not put down such an important Amendment without considering the matter. Doubts have been raised in my mind because of the extraordinary situation presented by the Minister and I hope that we shall have clarification of these very hypothetical situations.
    5.0 p.m.
    Mr. Mitchison: It is really quite simple. We are considering whether certain persons ought to get a concession by way of taxation, which as a whole will cost the country £48 million

    1575
    in a full year and £35 million in the current year. These are large sums and this is a valuable concession. It was put forward by the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd), not on the ground that the tax was notionally a bad one, but, as he put it, as an act of social justice to encourage home ownership.
    That is all very well, but is it an act of social justice in the same way to encourage the ownership of a plurality of homes? Is there the same reason in a case of that sort for giving people a concession which had a particular purpose and, in its present form, is certainly intended to be an act of social justice? Ought it to be applied as a matter of social justice and, in order to encourage home ownership, to the ownership of, say, half a dozen houses all of which some one person occupies? The trouble is that one can occupy half a dozen houses; one can occupy a lot more. That is the question which we have to consider.
    The Chief Secretary is a most engaging person. He presents an appearance of complete logic and the confusion in his mind seems to me to be considerable. He came out, quite rightly, with one proposition with which I cordially agree, that administration must follow policy. This was in his best Gibbonian style. I quite agree. Administration must, in-deed, follow policy. Therefore, if this is an act of social justice intended to be done by this Chapter in the Bill, the first thing to consider is whether what is in the Bill, which the Amendment would change, is consonant with that intention and with the social justice which it is desired to further. If it is not, again to quote the right hon. Gentleman, administration must follow policy. I shall show presently, however, that it does not have far to go for the purpose.
    I tried to spare the Committee a long excursus into what the Government are doing in the Fourth and Seventh Schedules. The Government are preserving what is virtually Schedule A machinery in a fairly large number of cases—the owners of estates. From the figures we were given by the Chief Secretary, it is clear that the pluralist or multiple owners of houses are also a comparatively small number of cases.
    1576
    It is putting the cart before the horse with a vengeance to produce as one of the serious arguments against the Amendment that what is done on a small scale might become a real objection to the Bill if the scale was slightly extended.
    That is doubly so when one begins to look at what is being done in connection with these estate owners. They are charged a hypothetical rent, and the basis of that hypothetical rent, subject to deductions, and so on, which one would apply in this case as in that, is the annual value. The annual value is stated in the Seventh Schedule.
    I said to the Committee—the Chief Secretary heard me—that I seemed to have seen this before. This is the ordinary rating formula and nothing else. I did not expect to be told that there was that insuperable difficulty in preserving, at least for the time being, the machinery for rating valuation. Once that has been done, we have ascertained the annual value in accordance with the Seventh Schedule.
    It is throwing dust in the eyes of the Committee to raise all these administrative difficulties. I simply do not believe in them. To do it after having just said that administration must follow policy, and after the previous Tory Chancellor of the Exchequer—I know he is dead, but he is not quite buried—had urged this Measure as a matter of social justice—
    Mr. Boyd-Carpenter: The hon. and learned Member knows well that getting the annual value is only the beginning of the operation. If we are to do as the hon. and learned Member suggests in his Amendment and impose no higher tax liability than would have been imposed had Schedule A remained, all the machinery of statutory deduction, maintenance claims and everything else has to be maintained. It is misleading the Committee to say that because it is not unduly difficult to maintain a figure for annual value, the problem has been made quite easy. That is not quite up to the hon. and learned Gentleman's normally high standard of debate.
    Mr. Mitchison: I am sorry not to be keeping up to the mark, but I will have another try.
    All that is happening here is that the Government for their own purposes, with

    1577
    which I am inclined to agree in this case, are preserving a certain part of the Schedule A machinery. What they are doing is applying the annual value as the basis of taxation in the case of estates. All I am asking the Committee to do is to agree to that also being done in the case of multiple house occupiers. That is no wild extension.
    If I had had to invent all the machinery, I should have had a busy time and probably by now I would be sitting in a lunatic asylum with a wet towel round my head; but the Government, without necessarily going into a lunatic asylum, have done it all for me, not only as a matter of drafting, but as a matter of machinery to be used. Immediately after saying that administration must follow policy, to put up that argument is not up to the right hon. Gentleman's usually high standard of debate.
    It makes one suspicious when we get this kind of case put up—this noise about administrative difficulties, keeping things going, and so on—when one knows perfectly well that this chapter as a whole has been put forward as a supposed measure of social justice and will be supported by right hon. and hon. Members opposite in the coming General Election as something which they have done as a matter of social justice. I enjoin this on them. Whenever they say it, will they kindly point out that they have also provided social justice in the same measure for the fortunate man who both owns and occupies half a dozen houses? They will then have to find out just how popular in the country that bit of social justice will be.
    It was the Chief Secretary who started talking about luxury and the rest. I never talk about luxury in connection with taxation if I can possibly avoid it. I am simply considering whether it is right to give out of public funds to this small group of people a share of the considerable total that is being provided for good purposes out of public funds for other people. It is rather surprising that right hon. and hon. Members opposite are prepared to neglect that aspect and to say that this is stigmatised as luxury—I never used the word, and it is not luxury—and to draw a prophetic and, no doubt, up to a point, a true picture of the man who requires a little weekend house.
    1578
    I doubt whether this will make much difference to him one way or the other. It was the intention of part of the Amendment which I had to put in to comply with the rules of order, something which also seems to me to be quite good sense. But I am not sticking like mad to that. We cannot do anything else in this Committee, since it is right that, given financial control of the Government over expenditure, the Opposition should not be allowed to put down Amendments involving additional charges on the subject. That is the rule. It is simple and one sees the reason for it.
    But responsible Treasury Ministers should not try to use the existence of the rule in order to confuse the issue or to dodge responsibility which really lies on them. If some new charge is involved here, it is up to them to make proper provision for what is required. I do not think other things are required. This is largely a matter of what is in principle an important Amendment, although its monetary effect is not a very large one. Surely the Government have a better defence than this.
    But then we come to the right hon. Gentleman's real defence and it is a most remarkable one. He said that hon. Gentlemen on his side of the Committee have put this proposal down year after year limited to one house only, as a matter of Parliamentary tactics. What leads them to do that? Why should they not have told the people what they really meant? It is not as if this matter had occurred only once and could be described as a slip. It has happened time and time again and has been argued in that sense from the benches opposite. Are we now to take it that when a matter is constantly advocated by hon. Members opposite it must be assumed that they do not mean what they say? That is the only deduction one can draw from this confession by the right hon. Gentleman.
    On this side of the Committee we put down Amendments for the simple reason that we mean them. I find a little difficulty in ascertaining the reasons of the Liberal Party but perhaps they are of less importance on this occasion. They are connected with a loaf of bread, whether half or the whole. But hon. Members opposite are not doing this. It

    1579
    happens in a case of this sort if, in the course of defence, through the mouth of a much respected and senior member of the Government, of their refusal of an Amendment, they have to say that when they put proposals on the Order Paper year after year it was just Parliamentary tactics.
    We on this side of the Committee are not as clever as that. We try to put on the Notice Paper what we think to be the right thing to do. That practice seems to have been entirely abandoned in this matter by the party opposite. In talking about Parliamentary tactics the right hon. Gentleman would have been wiser to have concealed the objective of his hon. Friends rather than flaunt it as the main objection to the Amendment.
    This is really a childish business. Here is a large change to be made in the tax law in the interests of social justice in order to encourage owner-occupiers. I am not concerned with the merits or demerits of the whole business or the machinery for it. I see the point of it and we have made similar proposals in previous years.
    But here is a small part of it which no one can really regard as an act of social justice. If we want to encourage owner-occupation of houses, that is well and good. But are we really going to pay a considerable amount out of public funds in order to encourage someone to occupy as an owner half-a-dozen houses?
    Where is the social justice or sense in that? What is the use of doing that kind of thing and then attempting to defend it by saying, "We have always stood for it but we never meant it. It was tactics and, then again, there are administrative difficulties. The principle applies to one group of people and what we want to do is possible for them, but if one goes too far it becomes impossible. In the words of the poet, administration follows policy."
    Let it, in this instance, follow policy and let policy for once follow sense and have some relation to the purpose of the various changes it is proposed to introduce.
    Question put, That those words be there inserted:—
    The Committee divided: Ayes 154, Noes 222.

    Division No. 115.]

    AYES

    [5.15 p.m.

    Ainsley, William

    Foot, Dingle (Ipswich)

    Lee, Frederick (Newton)

    Allaun, Frank (Salford, E.)

    Foot, Michael (Ebbw Vale)

    Lever, L. M. (Ardwick)

    Barnett, Guy

    Forman, J. C.

    Lewis, Arthur (West Ham, N.)

    Beaney, Alan

    Fraser, Thomas (Hamilton)

    Mabon, Dr. J. Dickson

    Bellenger, Rt. Hon. P. J.

    Galpern, Sir Myer

    McCann, John

    Bence, Cyril

    George,LadyMeganLloyd(Crmrthn)

    MacColl, James

    Bennett, J. (Glasgow, Bridgeton)

    Ginsburg, David

    McKay, John (Wallsend)

    Benson, Sir George

    Gourlay, Harry

    McLeavy, Frank

    Blyton, William

    Grey, Charles

    MacPherson, Malcolm (Stirling)

    Boardman, H.

    Griffiths, Rt. Hon. James (Llanelly)

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

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

    Griffiths, W. (Exchange)

    Manuel, Archie

    Bowles, Frank

    Gunter, Ray

    Mapp, Charles

    Boyden, James

    Hamilton, William (West Fife)

    Marsh, Richard

    Braddock, Mrs. E. M.

    Harper, Joseph

    Mayhew, Christopher

    Bray, Dr. Jeremy

    Hart, Mrs. Judith

    Millan, Bruce

    Broughton, Dr. A. D. D.

    Hayman, F. H.

    Mitchison, C. R.

    Butler, Herbert (Hackney, C.)

    Healey, Denis

    Monslow, Walter

    Carmichael, Nell

    Henderson, Rt Hn Arthur (Rwly Regis)

    Moody, A. S.

    Chapman, Donald

    Herbison, Miss Margaret

    Morris, John

    Cliffe, Michael

    Hilton, A. V.

    Moyle, Arthur

    Collick, Percy

    Holman, Percy

    Mulley, Frederick

    Corbet, Mrs. Freda

    Houghton, Douglas

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

    Crosland, Anthony

    Hoy, James H.

    Oliver, G. H.

    Grossman, R. H. 8.

    Hughes, Emrys (S. Ayrshire)

    O'Malley, B. K.

    Cullen, Mrs. Alice

    Hughes, Hector (Aberdeen, N.)

    Dram, A. E.

    Darling, George

    Hunter, A. E,

    Paget, R. T.

    Davies, G. Elfed (Rhondda, E.)

    Hynd, John (Attercilffe)

    Pannell, Charles (Leeds, W.)

    Davies, Ifor (Gower)

    Irvine, A. J. (Edge Hill)

    Pargiter, G. A.

    Davies, S. O. (Merthyr)

    Irving, Sydney (Dartford)

    Parkin, B. T.

    Deer, George

    Jeger, George

    Paton, John

    Dempsey, James

    Jenkins, Roy (Stechford)

    Pavitt, Laurence

    Diamond, John

    Johnson, Carol (Lewisham, S.)

    Peart, Frederick

    Dodds, Norman

    Jones, Dan (Burnley)

    Popplewell, Ernest

    Donnelly, Desmond

    Jones, Elwyn (West Ham, S.)

    Prentice, R. E.

    Driberg, Tom

    Jones, T. W. (Merioneth)

    Price, J. T. (Westhoughton)

    Ede, Rt. Hon. C.

    Kelley, Richard

    Pursey, Cmdr. Harry

    Edwards, Walter (Stepney)

    Kenyon, Clifford

    Reid, William

    Fernyhough, E.

    King, Dr. Horace

    Reynolds, G. W.

    Fitch, Alan

    Ledger, Ron

    Rhodes, H.

    Roberts, Albert (Normanton)

    Spriggs, Leslie

    White, Mrs. Eirene

    Roberts, Goronwy (Caernarvon)

    Steele, Thomas

    Whitlock, William

    Robertson, John (Paisley)

    Stonehouse, John

    Wilkins, W. A.

    Robinson, Kenneth (St. Pancras, N.)

    Stones, William

    Willey, Frederick

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

    Strauss, At. Hn. G. R. (Vauxhall)

    Williams, LI. (Abertillery)

    Ross, William

    Stross, Dr.Ba-nett(Stoke-on-Trent,C.)

    Williams, W. T. (Warrington)

    Royle, Charles (Salford, West)

    Swingler, Stephen

    Willis, E. C. (Edinburgh, E.)

    Shinwell, RI. Hon. E.

    Taverne, D.

    Wilson, At. Hon. Harold (Huyton)

    Silverman, Julius (Aston)

    Thomas, torwerth (Rhondda, W.)

    Woof, Robert

    Slater, Joseph (Sedgefield)

    Thornton, Ernest

    Yates, Victor (Ladywood)

    Small, William

    Timmons, John

    Zilliacus, K.

    Snow, Julian

    Warbey, William

    Soskice, At. Hon. Slr Frank

    Weltzman, David

    TELLERS FOR THE AYES:

    Mr. Lawson and Mr. Redhead,

    NOES

    Allan, Robert (Paddington, S.)

    Foster, John

    Marples, At. Hon. Ernest

    Arbuthnot, John

    Freeth, Denzil

    Mathew, Robert (Honiton)

    Ashton, Sir Hubert

    Gardner, Edward

    Matthews, Gordon (Meriden)

    Atkins, Humphrey

    Gibson-Watt, David

    Maudling, At. Hon. Reginald

    Awdry, Daniel (Chippenham)

    Gilmour, Ian (Norfolk, Central)

    Mawby, Ray

    Balniel, Lord

    Glover, Sir Douglas

    Maxwell-Hyslop, R. J.

    Barber, Anthony

    Glyn, Sir Richard (Dorset, N.)

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

    Barlow, Sir John

    Green, Alan

    Miscampbell, Norman

    Botsford, Brian

    Gresham Cooke, R.

    Montgomery, Fergus

    Beamish, Col. Sir Tufton

    Grimond, Rt. Hon. J.

    More, Jasper (Ludlow)

    Biffen, John

    Grosvenor, Lt.-Col. R. G.

    Morgan, William

    Biggs-Davison, John

    Harris, Frederic (Croydon, N.W.)

    Morrison, John

    Bingham, R. M.

    Harris, Reader (Heston)

    Mott-Radclyffe, Sir Charles

    Birch, Rt. Hon. Nigel

    Harrison, Brian (Maldon)

    Neave, Airey

    Bishop, F. P.

    Harvey, Sir Arthur Vere (Macclesf'd)

    Nicholson, Sir Godfrey

    Black, Sir Cyril

    Harvle Anderson, Miss

    Nugent, Rt. Hon, Sir Richard

    Bourne-Arton, A.

    Hastings, Stephen

    Oakshott, Sir Hendrie

    Bowen, Roderic (Cardigan)

    Heald, Rt. Hon. Sir Lionel

    Orr, Capt. L. P. S.

    Box, Donald

    Hendry, Forbes

    Osborn, John (Hallam)

    Boyd-Carpenter, Rt. Hon. John

    Hiley, Joseph

    Page, Graham (Crosby)

    Brewis, John

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

    Pannell, Norman (Kirkdale)

    Bromley-Davenport,Lt.-Col.SirWalter

    Hill, Mrs. Eveline (Wythenshawe)

    Pearson, Frank (Clitheroe)

    Brooman-White, R.

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

    Peel, John

    Brown, Alan (Tottenham)

    Hocking, Philip N.

    Percival, lan

    Browne, Percy (Torrington)

    Holland, Philip

    Plckthorn, Sir Kenneth

    Bullard, Denys

    Hollingworth, John

    Pitt, Dame Edith

    Builus, Wing Commander Eric

    Hoonson, H. E

    Pott, Percival]

    Burden, F A.

    Hope, Rt. Rt.. Hon. Lord John

    Price, David (Eastlet)

    Carr, Compton (Barons Court)

    Hornby, R. P.

    Prior, J. M. L.

    Carr, Robert (Mitcham)

    Hornsby-Smith, Rt. Hon. Dame P.

    Prior-Palmer, Brig. Sir Otho

    Cary, Sir Robert

    Howard, Hon. G. R. (St. Ives)

    Pym, Francis

    Channon, H. P. G.

    Hughes, Hallett, Vice-Admiral John

    Quenneli, Miss J. M.

    Chataway, Christopher

    Hughes-Young, Michael

    Ramsden, James

    Chichester Clark, R.

    Hutchison, Michael Clark

    Rawlinson, Sir Peter

    Churchill, Rt. Hon. Sir Winston

    Iremonger, T. L.

    Redmayne, Rt. Hon. Martin

    Clark, Henry (Antrim, N.)

    Irvine, Bryant Godman (Rye)

    Rees, Hugh

    Clark, William (Nottingham, S.)

    James, David

    Rees-Davies, W. R.

    Clarke, Brig. Terence (Portsmth, W.)

    Jenkins, Robert (Dulwich)

    Ridley, Hon. Nicholas

    Cleaver, Leonard

    Johnson, Eric (Blacktey)

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

    Cole, Norman

    Johnson Smith, Geoffrey

    Robson Brown, Sir William

    Cooke, Robert

    Kaberry, Sir Donald

    Roots, William

    Cooper, A. E.

    Kerens, Cdr. J. S.

    Scott-Hopkins, James

    Cordeaux, Lt.-Col. J. K.

    Kerby, Capt. Henry

    Sharpies, Richard

    Corfield, F. V.

    Kerby, Capt Henry

    Shaw, M.

    Costain, A. P.

    Kerr, Sir Hamilton

    Skeet, T. H. H.

    Coulson, Michael

    Kimball, Marcus

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

    Craddock, Sir Beresford (Spelthorne)

    Kirk, Peter

    Smithers, Peter

    Lagden, Godfrey

    Smyth, Rt. Hon. Brig. Sir John

    Crawley, Aidan

    Lancaster, Col, C. G.

    Spearman, Sir Alexander

    Crosthwaite-Eyre, Col. Sir Oliver

    Leather, Sir Edwin

    Spearman, Sir Alexander

    Curran, Charles

    Leavey, J. A.

    Speir, Rupert

    Dalkeith, Earl of

    Leburn, Gilmour

    Stevens, Geoffrey

    Dance, James

    Legge-Bourke, Sir Harry

    Steward, Harold (Stockport, S.)

    d'Avigdor-Goldsmid, Sir Henry

    Lindsay, Sir Marlin

    Studhoime, Sir Henry

    Deedes, Rt. Hon. W. F.

    Litchfield, Capt. John

    Summers, Sir Spencer

    Digby, Simon Wingfield

    Longbottom, Charless

    Tapsell, Peter

    Donaldson, Cmdr. C. E. M.

    Longden, Gilbert

    Taylor, Sir Charles (Eastbourne)

    Doughty, Charles

    Loveys, Water H.

    Teeling, Sir William

    Drayson, G. B.

    Lucas- Other Sir Hugh

    Temple, John M.

    du Cann, Edward

    McAdden, Sir Stephen

    Thather, Mrs. Margaret

    Elliot, Capt. Walter (Carshailon)

    McLaren, Martin

    Thomas, Peter (Conway)

    Emery, Peter

    Maelean,SirFitzroy(Bute&N.Ayrs)

    Thompson, Sir Kenneth (Walton)

    Emmet, Hon. Mrs. Evelyn

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

    Thompson, Sir Richard (Croydon, S.)

    Errington, Sir Eric

    MacLeod, John (Ross & Cromarty)

    Thornton-Kemaley, Sir Colin

    Farey-Jones, F. W.

    McMaster, Stanley R.

    Thorpe, Jeremy

    Farr, John

    Macmillan, Maurice (Halifax)

    Touche, At. Hon. Sir Gordon

    Finlay, Graeme

    Maddan, Martin

    Turner, Colin

    Fisher, Nigel

    Maginnis, John E.

    Tweedsmuir, Lady

    Fletcher-Cooke, Charles

    Maitland, Sir John

    van Straubenzee, W. R.

    1582

    1583

    vane, W. M. F.

    Ward, Dame Irene

    Woodhouse, C. M.

    Vaughan-Morgan, Rt. Hon. Sir John

    Whitelaw, William

    Woodnutt, Mark

    Wade, Donald

    Williams, Dudley (Exeter)

    Woollam, John

    Warder, David

    Williams, Paul (Sunderland, S.)

    Worsley, Marcus

    Walker, Peter

    Wilson, Geoffrey (Truro)

    Walker-Smith, Rt. Hon. Sir Derek

    Wise, A. R.

    TELLERS FOR THE NOES:

    Wall, Patrick

    W oirlge-Gordon, Patrick

    Mr. Ian Fraser sad Mr. MacArthur.

    Question proposed, That the Clause stand part of the Bill.
    Mr. Bellenger: When we were discussing the Amendment, I raised one or two questions of administration which apparently it was not appropriate to discuss on the Amendment. The right hon. Gentleman the Chief Secretary said that his hon. Friend the Economic Secretary would answer my questions later.
    The point briefly is that when we have passed the Bill, Schedule A will disappear from our Income Tax law. All owners of property hitherto have had to declare the value of that property in their Income Tax returns and the net annual value under Schedule A was regarded as part of the owner's income. This part of his income will now cease to be assessable if the owner of property is the occupier. What is to be the method of ascertaining who is the owner-occupier?
    Hitherto, the assessment of the value of property has been made by the fairly well defined machinery of the Inland Revenue valuer assessing what the property was worth, but now that there is to be no Schedule A, the occupier of the property, if he is the owner and not the tenant, will be relieved from paying tax on that property. What I want to know is what is to be the administrative machinery for ascertaining whether the occupier is the owner.
    Different considerations arise if he is a tenant. The owner of the property will then become assessable under a new case, Case No. 8. It would be out of order to discuss Case No. 8 on this Clause, but I can well imagine that the machinery which the Inland Revenue would want to set up in order to get its tax from an owner who was not an occupier would be very intricate. It appears to me that it will be a Schedule D assessment and that the owner of the property will have to render a return, as he now renders a return under Schedule D, showing what his net profits are.
    1584
    Once the Economic Secretary has cleared my question about the machinery which is to identify the owner-occupier, in later Clauses we can go on to discuss how we are to assess the owner of property under the new Case No. 8. In such a discussion there will be considerations which it would be out of order to discuss now.
    5.30 p.m.
    In short, what machinery will be adopted by the Inland Revenue to identify the owner-occupier? I hope that the method adopted will not be a cumbrous one. If the owner of a property has to produce the title deeds to the Inland Revenue to prove that he is in fact the owner-occupier, I suggest that the machinery will be extremely cumbrous. If, on the other hand, he merely has to make a declaration such as an Income Tax payer makes on his annual return that he actually owns the property, that will be very much simpler and he will not be troubled with having to seek professional advice to answer the questions which the Inland Revenue will have to put to ascertain whether the occupier is also the owner.
    Mr. B. T. Parkin: I add myself to the list of mourners identified by the Chief Secretary, but I want to make clear what it is I am mourning.
    Two things are happening in the operation of this Clause. First, owner-occupiers are to be relieved of Schedule A because it has been widely held in all parties that this was a desirable thing to do socially, but it is in fact a political intervention in a fiscal matter. Between last year and this the Treasury has decided that from its point of view it would be a tidy thing to do to scrap the machinery altogether because most of those who are owners, but not owner-occupiers, get assessed under Schedule D anyway, so they might as well use the machinery of that Schedule.
    What I am regretting is that by throwing away that machinery we are throwing away something which we may well wish to recreate. I think that this is one more blow in the demolition of the notion of

    1585
    stewardship in property which unfortunately, while the idea itself is strengthening in the mind of public opinion, is slowly being removed from the laws of this country. Several of the most important laws have been repealed within the last few years. I do not want to survey the whole ground since the days when, after the departure of King John, the young King Edward was brought to Stepney when Parliament was held in the Great Place there and was compelled to reaffirm not only Magna Carta but De Ordinatio Foreste. which we so regrettably repealed in the course of this Parliament.
    The second thing I regret is that we are throwing away a weapon against one of the most serious factors in the housing problem, and one which I regret to say the Chief Secretary in his speech on the last Amendment seemed to brush off as unimportant, as though it could not be cured. He was referring to small owners who could not afford to maintain their properties.
    One of the biggest single factors in the dilapidation of houses and the exacerbation of the housing problem has been the habit of bleeding capital by assuming that the whole of the rent constitutes income. The offenders are not so much great corporations, or big landowners, or spivs, or speculators, as the innocent offenders, the elderly ladies who have inherited a couple of houses—on the assumption by the testator that they would thereby be rewarded in their old age—and who leave the management of these properties in the hands of estate agents. The estate agents are never instructed to put on a squeeze for repairs to be done at an early stage when they could be done cheaply, with the result that the property becomes seriously damaged.
    There is machinery to correct this kind of thing within the operation of Schedule A, but bit by bit it has become atrophied. There is an assumption that under Schedule A people will spend a fixed amount on repairs, and people who are advised and able to spend more thereby manage to escape a great deal of the rest of the burden of Schedule A. An instrument should be devised to reassert the principle that a person ought not to be allowed to bleed away capital
    1586
    which is social capital and thus reduce the total amount of dwellings available to the community.
    Secondly, a taxpayer ought to be allowed to regard as maintenance something which is all too often now treated as an improvement because it means introducing something into a house which ought to have been introduced 50 years ago. In other words, I think we ought to be able to introduce the principle that reconditioning a house to modern notions of amenities should not be treated as an improvement, but as maintenance, and that a way should be found of excusing tax on that kind of expenditure.
    It will, of course, occur to hon. Gentlemen that many of these things could be achieved through the rating system, and that I must not argue now. I must argue as if it could be done within the framework of the Treasury and the collection of Schedule A, as indeed it could, but if the Economic Secretary thinks that some of the ideas I am putting forward would be better handled through the rating system, I hope that he will call the attention of his right hon. Friend the Minister of Housing and Local Government to these arguments so that they can be taken note of.
    I want to see established the notion that the owner of property should be encouraged in every way to carry out arrears of maintenance which are now misguidedly called improvements. I want a window tax in reverse. One does not assume that an owner has in fact spent a certain percentage per annum on maintenance. I want to make him prove it. If, moreover, one is selective about the kind of improvements needed, one introduces a social responsibility. For instance, what could be sillier than to tax a man locally or nationally because he builds a garage, and to let off a man who clutters up the road? There must be some means of achieving that sort of improvement.
    I should like to see a re-establishment of the notion of the difference between gross and net annual value, but not an automatic assumption that tax was payable only on net, and not an automatic granting of exemption from tax on all kinds of expenses on houses such as the building of hard tennis courts or something of that kind. I should like to see a penalty on the absence from the house

    1587
    of any of the things required by local council byelaws or any of the amenities now regarded as standard by the Ministry of Housing and Local Government. In other words, a person would not get his payments reduced to net if there were no inside toilet; so much per cent. extra charged for an outside toilet; so much per cent. extra charged for a shared toilet; so much for the absence of a bath; so much for the different things which at any moment must be regarded as reasonably appropriate to the conditions of living in cities, and so on. These vary from city to city, and from area to area, and one would of course make allowances for this.
    In other words, I want to see a flexibility brought back into this, and I want to see some means by which those who are so easily dismissed as being unable to carry out repairs are enabled to do so. It is possible now for local council loans to be granted for this purpose, but nobody puts the pressure on. Yet nobody stands at that Dispatch Box nowadays and pleads that, however impoverished a farmer may be, however unlucky he is with his harvest, however difficult it is to get local labour, he must be allowed to let weeds run riot over his ground and do damage in all directions.
    A house which has fallen into avoidable decay or neglect is just as much a menace in a city as is a neglected field, full of weeds, in the countryside. We do not have to re-argue the social aspects of taxation in these days. The Treasury boys always tell us that we ought to do this in another way, but we do not take any notice of them because there are so many examples of the fiscal system being used to encourage developments or improvements which are of social value.
    I greatly regret that the Clause embodies so basically the destruction of a piece of machinery which might have been brought up to date and improved, and used as a weapon in the campaign to get old houses restored, improved and maintained. I hope that before we part with the Clause we shall have an assurance from the Treasury that it has not tossed aside any idea of preserving the good things that could have stemmed from a proper implementation of Schedule A, and that those bits of machinery will be reintroduced into our system in some other way,
    1588
    so that the campaign for a social recognition of the importance of maintaining property will be sustained.
    Mr. McKay: I have lately acquired the art of getting out of order. On this occasion, I hope that I shall succeed in keeping within the rules of order. Most of us are in favour of the Clause in principle, but we see many weaknesses in it. We are seeking to give relief to people who are buying their own houses. In fact, the agitation for such a Clause as this has been strengthened because so many so-called owner-occupiers are having a great struggle to make ends meet. They are ambitious to have a house of their own, but they nevertheless knew that they were creating for themselves a problem which might overcome them in the end. It was because of the problem facing these people that the Clause was finally brought into the Bill.
    Unfortunately, the hardest-hit owner-occupiers, whose situation was responsible for the introduction of the Clause, are getting no real advantage from it, because they are so low in the income scale that they do not have to pay any Income Tax. Other owner-occupiers, living in more comfortable houses of greater value, have up to 10 times the income of the ordinary workers at the lower end of the scale. That means that this is another piece of invidious legislation which is really helping those in the higher income groups.
    The Temporary Chairman (Mr. F. Blackburn): If the hon. Member proceeds with this argument he will become out of order. If he will think over what he has been saying he will realise that he has been introducing a number of matters which are not contained in the Clause.
    5.45 p.m.
    Mr. McKay: I do not see that. At the same time, I must obey your Ruling, Mr. Blackburn. I understand that the purpose of the Clause is to help various classes of owner-occupier. If it is not being introduced for that purpose, what is it for? My point is that the Clause seeks to provide some relief for those people who are paying off mortgages on their houses, which will eventually become their own property. Surely that is what I have been saying.
    But although the Government are seeking to provide this help, in fact

    1589
    many owner-occupiers will receive no relief at all. Furthermore, ought we not to consider the position of another section of the population, which does not consist of owner-occupiers? If we are going to provide some relief for owner-occupiers we ought also to remember those people who are paying rent for their houses. Cannot we do something for them?
    The Government ought to take the view that now that owner-occupiers are being helped it is necessary also to be fair to the greater number of householders who pay rent, and to see that in future legislation housing subsidies are increased in order to help those people.
    Mr. Graham Page: I ask my hon. Friend to answer two points. Subsection (1,b) provides for the charging of rents and certain other receipts from land under a new Case of Schedule D. Why is it necessary to have a new Case, when, under Case VI, excess rents are at present chargeable? When one reads the following Clauses it appears that Case VIII has been devised in order to deprive the taxpayer of certain rights which he has under Case VI. I will not go into details because the matter arises in later Clauses. But if we had an explanation from my hon. Friend at this stage why it was decided to have a new Case instead of making the rents chargeable under Case VI, it would assist us in understanding and debating the following Clauses.
    Is it intended that the returns under this Case shall be made on the ordinary form? In respect of Schedule A we made returns of maintenance, repairs and so on to the inspector of the district in which the property was situated. Under Case VIII is it all to go on the one return? Or are we to make returns of rents and profits from rents to the inspector in the district in which the property is situated? It is a machinery point but an explanation of how Case VIII is to be administered would assist us to understand the later Clauses and Schedules.
    Mr. Bence: It has been said that the abolition of Schedule A tax represents a tremendous step forward in devising means to assist potential owner-occu-
    1590
    piers and young people wishing to buy their own home. I always considered that this tax was nonsense. As an owner-occupier, or rather as one who for many years has been paying a mortgage in order eventually to acquire his own house, I have been able to avoid paying any Schedule A tax by reason of the mortgage payments which I have to make and the ground rent and feu duty which I have to pay.
    Few occupiers of modest homes are called upon to pay a considerable sum in this form of taxation. It may amount to £1 or £2 a year. But the psychological effect of its abolition will be to encourage owner-occupation, because owner-occupiers will consider that they have been relieved of an iniquitous form of taxation. The tax was levied on a notional rent for which no income was received. In fact, people lost a source of income because, had they invested their money in something other than a house, they would have received a financial return upon which, of course, they would have had to pay tax. I think it desirable that as many people as possible who can afford to do so should own their own homes.
    There are a number of owner-occupiers who open their property to visitors and charge visitors half-a-crown each. There is a famous mansion somewhere in Bedfordshire. It is a beautiful home where there are juke boxes, and all the rest of it. There are all sorts of sideshows in the grounds. Does the owner escape the payment of tax, or will he be taxed? I presume that the huge mansion in which he lives is his home. No doubt it is expensive to maintain. It may be an architectural gem—I do not know because I have not visited it. But I think that the owner is doing pretty well. Does he escape the payment of tax on the property which to me has the appearance of being more of a business enterprise than a domestic residence? Do the occupiers of such properties escape the payment of tax?
    I support the Clause and I consider that its provisions are desirable. I hope that the burden on owner-occupiers will be still further reduced by more concessions to building societies.
    Mr. Houghton: It would, I think, be a pity to dismiss Schedule A "in disgrace", because it has been a perfectly respectable

    1591
    tax. It has been embodied in the Income Tax Acts for over a hundred years. It annoys me to hear Ministers say that Schedule A was a very unsatisfactory tax and that they never believed in it. They are like Stalinists who have become followers of Khrushchev who denounce the deviations of their former chief. It was only on 21st June, 1960. that the then Chancellor of the Exchequer, now Lord Amory said in this House:
    "While the arguments of the Royal Commission are pretty conclusive on the propriety of taxing notional income of this kind and on the relative equity as between a person who owns his own home as against one who rents his I find the argument in favour of special discrimination as an incentive to house ownership an appealing one."—[OFFICIAL REPORT, 21st June, 1960; Vol. 624.]
    It is on that basis only that the Committee should accept this Clause. It is important that it should be done in this way because, in a subsequent part of his speech in 1960, Lord Amory acknowledged that there were strong arguments both for and against relief from Schedule A tax for owner-occupiers. The proposal has come in Clause 14, after consideration of the social aspects of the tax and its incidence and impact on those trying to buy their own homes, many of whom are handicapped by high prices and high mortgage interest rates.
    We must remember, however, that not all owner-occupiers are buying their houses by means of a mortgage. There are nearly 7 million owner-occupiers, and fewer than 2½ million are buying their houses by means of mortgages from building societies. Some are buying their houses by means of insurance policies, but I do not know how many. It is within the knowledge of all of us that a great many owner-occupiers do not have to struggle with problems arising from the payment of mortgage rates and the high interest charges. I do not wish to develop the point further. In saying "Goodbye" to Schedule A, I should like also to say, "Long life to Case VIII", and to acknowledge what I think is the proper basis upon which the Committee should approve this concession.
    We must not overlook the large number of people who are buying their houses on mortgage and who have family responsibilities, but whose incomes are so modest that they pay no Income Tax at all. Those people receive no benefit from
    1592
    this Clause, though, to be fair, there are provisions in other Clauses in the Bill which will assist them in other ways.
    As my hon. Friend the Member for Wallsend (Mr. McKay) said, millions of people who are paying rent get no relief under Clause 14. We have to remember them because when they have done paying through the nose, as many of them are doing, they will not have a capital asset such as the owner-occupier will have. Still less will they have a capital asset of appreciating value as many owner-occupiers have. When I heard the Chief Secretary referring to some "modest person" who had a small mews cottage, I wondered if the right hon. Gentleman had been looking at property advertisements recently. Does he know what a small mews cottage costs? It costs £25,000—[HON. MEMBERS: "More."]—and many of them of cost more. They were bought for £7,000 a few years ago.
    I know that this is distasteful to hon. Members opposite and there is no political capital in it for me, so I do not propose to continue these remarks any longer. I think, however, that in this Committee, whatever the political situation, occasionally the truth should be told.
    6.0 p.m.
    The Economic Secretary to the Treasury (Mr. Edward du Cann): We have listened to a most engaging speech on which I am quite sure the hon. Member for Sowerby (Mr. Houghton) will not expect me to comment in detail. Indeed, in view of the fact that we have had a long debate, not only on this Clause but on the Amendments proposed to it and also on the whole subject of Schedule A, I imagine that it would be the wish of the Committee that I should be fairly brief while still attempting to reply to specific questions which hon. Members have asked me.
    The purpose of this Clause is to abolish Schedule A on all owner-occupied property and to bring rent within a new Case of Schedule D. As the hon. Member for Sowerby might have said, "Le roi est mort. Vive le roi", although, as my right hon. Friend pointed out, he came here this afternoon to bury Caesar and at the same time to praise him. It may have been to resurrect him, and

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    that would be a cleverer thing to do, I imagine.
    There will be a great deal of rejoicing that. Schedule A is to go. This was foreshadowed by my right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) last year and it has been brought to fruition by my right hon. Friend the Chancellor now. There has been very much pressure for abolition of Schedule A. I am particularly glad to see my hon. Friend the Member for Crosby (Mr. Graham Page) in his place. He has been prominent in that regard, as have other hon. Members, particularly the hon. Member for Westhoughton (Mr. J. T. Price) who is not here at the moment.
    The cost of abolition is £35 million this year and £48 million in a full year; expensive but, I am perfectly certain, worth it on social grounds, as the hon. Member has suggested. I was a little confused when listening to the hon. Member for Wallsend (Mr. McKay). I was not quite clear whether he thought the move towards home ownership a desirable or an undesirable thing. I personally think it a thoroughly desirable move which should be encouraged.
    I have been looking at the figures. It is very interesting to see the change which has taken place in our social scene in recent years. In 1920 there were 8·9 million dwellings in the United Kingdom of which 1·9 million were occupied by owner-occupiers—21 per cent. By 1939 the figures were respectively 12·6 million in total with 2·9 million owner-occupiers —23 per cent. The figures for 1963, in so far as one can estimate them—and these are all estimates; it has not been possible to get precise figures—are 16·8 million dwellings in the United Kingdom and 6·8 million by owner-occupiers—40 per cent. Here is the trend, which I think thoroughly satisfactory in the national interest.
    Mr. Mitchison: Will the hon. Gentleman answer a question which has been puzzling me a little? We have in the White Paper what I presume are the figures resulting from a tax concession by the abolition of Schedule A reduced by a tax gain out of the proceeds of Case VIII. Could the hon. Gentleman give us the figures separately? I hope I have made myself clear.
    Mr. du Cann: The hon. and learned Member has made his question entirely clear. I am not in a position, however, to give him accurate figures at this moment, I am sorry to say, nor do I think it would be possible to estimate them accurately at present. Any estimate would involve a very great deal of work. Quite apart from that, I think it would be impossible to get precise figures. I follow what the hon. and learned Member wants, but I regret that it is not possible to get it.
    The hon. Member for Sowerby said that we had had this tax for a hundred years and it had worked very well. I suppose it would be accurate to say that one could trace the ancestry of the tax as far back as Tudor times. Whatever the truth of that, I and, I think, all my hon. Friends and many hon. Members opposite believe that we are very well rid of it, even though we do not get rid of it in disgrace—I agree with the hon. Member to that extent.
    The hon. Member for Paddington, North (Mr. Parkin), as I understood his argument, was very much in favour of abolishing Schedule A, as are other hon. Members, but he was arguing for greater reform of taxation in general. He instanced several ways in which he would like to see those reforms developed. He asked whether we in the Treasury had closed minds. I think the exact phrase he used was that thinking on further reform of taxation was desirable for social reasons. He hoped that we would not toss aside a good idea. Certainly we do not toss aside any good ideas and we shall pay attention to his remarks. I do not say that we agree with him on all of them, but we are far from being static in these matters in the Treasury.
    My hon. Friend the Member for Crosby asked why we had a new Case VIII. I think that the answer would properly be given during debate on Clause 15 and my hon. Friend the Financial Secretary will provide it then. My hon. Friend the Member for Crosby also asked about the machinery. That I suggest would be properly answered in discussion of Clause 16, and again the Financial Secretary will provide the answer. The hon. Member for Dunbartonshire, East (Mr. Bence) asked a question which related to the Fourth Schedule, 11 (2, c). My hon. Friend the Member for Nottingham, South

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    (Mr. W. Clark) has an Amendment on the Notice Paper on that point. Perhaps the hon. Member for Dunbartonshire, East, will await a specific reply until we debate that Amendment.
    The right hon. Member for Bassett-law (Mr. Bellenger) asked about several things, in particular if we could define "owner-occupier". We all use the phrase. It appears in the side note to Clause 14 and I have used it already in winding up this discussion. It is not a very good phrase to use. The public understand it and we understand it, but it is extraordinarily difficult to define. The right hon. Member will see that nowhere does that expression appear in the Clause, but we talk about the occupier with a beneficial interest. That can mean either a freeholder or a leaseholder.
    The position is that it is the occupier who is assessed for Schedule A and who pays it. He passes it on to his landlord to the extent that he can deduct tax at standard rate from rent. The right hon. Member will know that there are certain limitations on that. A freeholder cannot pass it on at all. The holder of a long lease may be able to pass it on to a limited extent only if his ground rent is small. A leaseholder with a shorter lease may be able to pass it on if his rent is higher. I am reminded of what the Frenchman said—that no one can define an elephant but we all recognise him when we see him. I hope that the right hon. Gentleman will be satisfied with that reply. Even though the definition is not easy to put in layman's language, I think that there is no difficulty, because the position is well understood in law.
    Mr. Bellenger: I am not in the least satisfied. I am not concerned with what we know when we see them but with what the tax inspector will know before he exempts the property from Schedule A tax. If the occupier is a tenant, he pays and then passes it on to his landlord, but if he is a beneficial occupier under a lease or a freehold, then he is exempt from tax. How will the Inland Revenue find out whether the property occupied by an hon. Gentleman apposite or myself, for example, is owner-occupied? It may be a well-understood term for lawyers and the Inland Revenue,
    1596
    but how will they know which house is owner-occupied or beneficially occupied?
    Mr. du Cann: I very much admire the right hon. Gentleman's persistence. He has tried to screw me down hard on this matter. But he interrupted me just as I was about to develop the matter further. I wanted first to deal with the question of definition and then to turn to the question which he asked—and to which he has now directed extra attention—that of machinery. Again, this would be more appropriately discussed under Clause 16. and this will be done.
    I would say to him that, in general, however, we can foresee no difficulty whatever. The Inland Revenue will require returns in the usual way. We are satisfied that the matter will work as smoothly as it did in the old days, even though we are operating a new Case. We can see no problem. But my hon. Friend the Financial Secretary is only too ready to discuss the matter with the right hon. Gentleman when we discuss the Clause which deals with this case.
    Mr. Bellenger: The hon. Gentleman has misunderstood me. The Clause which will be discussed later is the Clause under which rents are being received by the occupier or owner. I am concerned with the case of the individual living in a property. The Inland Revenue has hitherto assessed the tax on the hereditament and has gone to the occupier and said "Pay up. Whether you can pass it on or not is nothing to do with us". Had the Revenue wanted to levy distress it would have levied it on the property. What I ask under this Clause is: having abolished Schedule A, how will the Inland Revenue identify who is entitled to that concession?
    Mr. du Cann: I do not altogether follow the difficulty which is in the right hon. Gentleman's mind, because if an owner-occupier is not in receipt of income from property he does not have to declare it and there will be no Schedule A for him to pay. It will be as simple as that. We foresee no difficulty. I hope that the right hon. Member will accept it from me that we think that there will be no trouble.
    May I pass, very shortly, to more general matters? The proposals con-

    1597
    tained in the chapter, for which this Clause is, so to speak, the starting gun, represent, as the hon. and learned Member for Kettering (Mr. Mitchison) said, a new and far-reaching change in the tax structure. This Clause does not deal with the detail of the matter. Clearly it must follow in an important and complex sector of the tax field such as this that there will be a chain reaction from the major decision to abolish Schedule A tax which is contained in the Clause. It is therefore followed by 19 Clauses and four Schedules, a very substantial amount of legislation to wade through during the rest of the day. But it is these detailed matters, as indicated by the questions of my hon. Friend the Member for Crosby and others, which are of the greatest interest to the Committee. Certainly any substantial move in tax matters obviously merits careful study.
    I want to make it plain on behalf of my right hon. Friend that the Government will welcome discussion of the details of these succeeding Clauses and Schedules. The Committee stage, I am sure, will be valuable to us as hon. Members are good enough to give us the benefit of their informed advice. We are ready to give a general undertaking to beat in mind and to consider with care any suggestions which are made for the improvement of any item. I am not, of course, undertaking that my right hon. Friend will accept every or any suggestion which is made to him, but we are very ready to examine the ramifications of the Chapter with care and with the help of the Committee.
    6.15 p.m.
    The hon. Member for Sowerby the day before yesterday made a suggestion that it might be for the Committee's assistance if a short explanatory statement were sometimes made at the beginning of our discussion of each Clause. We are entirely ready to accept this helpful proposal in respect of the Clauses in Chapter II in appropriate cases. My hon. Friend the Financial Secretary or my hon. and learned Friend the Solicitor-General or I, unlearned, as appropriate, wilt certainly, where the context appears to require it, preface the discussions which we may have on the Clauses in Chapter II by a few short explanatory words. We trust that this arrangement
    1598
    will meet the wishes of hon. and right hon. Members opposite and will be helpful to the Committee in general, as, indeed, is our intention.
    Mr. Mitchison: Will the hon. Member extend that undertaking to Schedule 4, which is a most difficult part of the Bill. I personally—and I think that I speak for hon. Members on both sides of the Committee—would be glad if a statement of that sort were made before we discussed it. I observe the hon. Member nodding in agreement.
    May I ask him a second question about the cost of this concession following the question which I asked him a moment ago? I appreciate the difficulty of giving the figures, but does he know, or will he ascertain for me, what would have been the yield of Schedule A if it had not been abolished—the figure from which the value of the concessions would be deducted?
    Mr. du Cann: The hon. and learned Gentleman appreciates that there are Amendments to Schedule 4 which will have to be dealt with first, but my hon. and learned Friend the Solicitor-General heard the hon. and learned Gentleman's suggestion and he authorised me to say—as no doubt the hon. and learned Gentleman observed—that he will do his best to meet the point.
    The hon. and learned Gentleman will understand that I cannot give him now, while I am on my feet, the figures for which he asked, but I will do my best to see whether I can satisfy him before we conclude our discussions on these matters.
    We had our legs pulled a little—I do not complain of it; it was done very fairly and, as always, very pleasantly—by the hon. Member for Sowerby, who suggested that perhaps we have not been altogether consistent in this matter of Schedule A. That may or may not be so. But, as I mentioned earlier, personally I am glad to be rid of it, and so are my hon. Friends. It is a step forward in a move towards a property-owning democracy. I know that the vast majority of hon. and right hon. Gentlemen opposite similarly welcome it.
    Question put and agreed to.
    Clause ordered to stand part of the Bill.

    Clause 15.—(CHARGE TO INCOME TAX OF PROFITS AND GAINS ARISING FROM LAND.)
    Mr. William Clark: I beg to move, in page 12, line 36, at the end to insert:
    "or in such other period as the Commissioner may direct".
    The subsequent Amendments, I fear, will be fairly complicated, but I am glad to say that this is simple. Under Clause 15(2) as drafted the Inland Revenue must take the whole of the income from property for the fiscal year and there is no means whereby the taxpayer can have a different basis from the 31st March to 5th April accounting dates. By concession of the -Inland Revenue, under Case VI at present, people in this category are allowed to take their normal accounting year as the year of assessment.
    I hope that my hon. Friend agrees that this is a simple and small point, even though I regard it as important. I suggest that in the case of a company or an individual who owns property, the accounting year should be sufficient for his declaration of income and that it should be under this Clause exactly the same as under Case I, Schedule D.
    Mr. Graham Page: I support my hon. Friend the Member for Nottinngham, South (Mr. W. Clark) on one point, which I think strengthens his argument. The charge for furniture and services is in a later Clause kept under Case VI. If under Case VI the taxpayer is allowed to choose his year, it will cause a certain amount of confusion if for the services and furniture charge he chooses one fiscal year and for the rent he has to choose the normal fiscal year. This shows one of the confusions which will arise out of the retention of Cases VI and VIII. I am sure that if the words in the Amendment were added to the Clause it would remove that sort of confusion.
    The Financial Secretary to the Treasury (Mr. Anthony Barber): Subsection (2), as it stands at present, provides that Case VIII assessments on a landlord shall be based on the amount of the rents and other receipts from land to which he is entitled in the year of
    1600
    assessment—that is to say, in the year ending 5th April. The Amendment would allow an assessment to be based on a period other than the year of assessment, where "the Commissioner", as he is described, which presumably means the Commissioners of Inland Revenue, so directs.
    I can see that this Amendment is very relevant to the case of a property company which, as I understand, in the past has been assessed on the basis of its accounting year. It is suggested that Case VIII assessments on such companies should also be made on the basis of the company's receipts and expenditure in its accounting year. It is true that in practice the accounting year has frequently been adopted as the basis for excess rent assessments under Case VI in cases of this kind.
    I can see the force of the argument advanced by my hon. Friend the Member for Crosby (Mr. Graham Page). It will obviously be more convenient, both to the taxpayers concerned and, I have no doubt, to the Revenue, to be able to adopt the company's accounting year as the basis for Case VIII assessments in appropriate cases. But no doubt in the ordinary way a small individual landlord will continue to be assessed on the basis of his receipts in the Income Tax year, as indeed has been done when making excess rent assessments in such cases in the past.
    I certainly think that my hon. Friend the Member for Nottingham, South (Mr. W. Clark) has a point here, but I hope he will understand when I tell him that I cannot accept the Amendment as it stands. It does not, as I think it should do, restrict the period which may be adopted to a period of 12 months ending within the year of assessment. Nor does it specify which Commissioners—the Commissioners of Inland Revenue or the local Commissioners—should have the power to determine what period should be adopted. Having said that I think my hon. Friend has a point, I am bound to say that there are certain other difficulties, with which I will not weary the Committee at this stage, if my hon. Friend will pardon me, about drafting an Amendment to do what he intends. However, I have every sympathy with the objective he has in mind. We will certainly do our

    1601
    best to try to meet it. If we can meet it, of course we shall table an Amendment on Report. I hope that in these circumstances my hon. Friend will not press the Amendment.
    Mr. Mitchison: One small point occurs to me. I recognise that this is existing practice, but it is, as I think the hon. Member for Nottinghamshire, South (Mr. W. Clark) pointed out, in fact a concession. I do not think that there is any authority for it in the Income Tax Acts. I stand to be corrected about that if I am wrong. If one puts half a concession on paper, may we not get into difficulties about the other half. That which is conceded as a matter of practice could perhaps continue to be conceded as a matter of practice. Once we begin to say that it shall be done in some cases, we may by inference leave it doubtful whether it will continue to be done in others. I merely mention this. It is no objection in principle to what the hon. Gentleman has mentioned and what the Government have accepted. Obviously one will have to consider who the right authority—at present designated as "the Commissioner "—is.
    Mr. Barber: Perhaps I might mention that there is also a statutory provision in Section 101(7) of the Income Tax Act, 1952 to this effect—
    "In computing the five-year average for the purposes of this section, the year shall be taken to be the year ending on the thirty-first day of March, or such other date as may be adopted by the owner of the land or houses with the consent of the surveyor of the district …"
    I think, without checking it, that the hon. and learned Gentleman is correct that the practice of assessment under Case VI by reference to the accounting year of a company is mere practice. Certainly this is a factor to be taken into account in ensuring that there are not repercussions from any Amendment which we might table. I would merely say that this is a point which we should like to meet if we possibly can, and we will certainly do our best to achieve that end.
    Mr. W. Clark: I apologise to my hon. Friend the Financial Secretary for the very loose wording of the Amendment. I am very grateful to him for accepting it in spirit In view of what he has said,
    1602
    I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    Question proposed, That the Clause stand part of the Bill
    Mr. Barber: In order to honour the pledge given by my hon. Friend the Economic Secretary, perhaps I should say at the outset that this Clause provides that rents and other receipts from land in the United Kingdom are to be charged to tax under Schedule D under the new Case which we have been discussing, Case VIII. The tax will be charged direct on the landlord instead of partly by assessment under Schedule A, which is normally made on the tenant, who, as my hon. Friend pointed out on the previous Clause, is entitled to deduct the tax from his rent, and partly by an excess rent assessment on the landlord under Schedule D, as at present. Case VIII assessments will be on a current year basis—that is, on the actual receipts, less the actual expenses of the same year.
    By virtue of Clause 14(2) and Clause 20(1), the provisions of this Clause do not take effect until the year 1964–65. The reason is a simple one. It is that the staff in tax offices could not cope in one year both with the other changes instituted by the Finance Bill, in particular the P.A.Y.E. re-coding of 5 million owner-occupiers which is necessary in consequence of their being exempted from tax under Schedule A, and with the introduction of a new system for the taxation of rents and other income from real property. Much preliminary work will have to be done in this year—1963–64—to enable the transition to be carried out, I hope smoothly, in the following year.
    My hon. Friend the Member for Crosby (Mr. Graham Page) asked why we had decided to operate this new system under a new Case VIII rather than under Case VI. As I have said, in the past, tax in respect of rented property has been assessed both under Schedule A and also under Case VI where there were extra rents to be taxed. There was a great mass of special rules which were applicable to Schedule A. As Schedule A is now going, we have had to replace it with other rules which will be in some cases exclusively concerned with rents and analagous income.

    1603
    Because of this, we thought that in the course of abolishing Schedule A it would be more convenient for all concerned if we included these new rules in a new Case VIII rather than in Case VI, which is the residual Case of Schedule D. The answer to my hon. Friend, in short, is simply that we thought that this was the more convenient way to do it. We had to lay down these new rules, which are set out in these 19 Clauses and a number of difficult Schedules, so we thought it best to have a new Case.
    Much of this Clause is self-explanatory. I have tried to give the Committee the gist of it. If there are any special points which hon. Members would like me to answer, I will do my best to do so.
    6.30 p.m.
    Mr. W. Clark: Would my hon. Friend comment on subsection (4), which penalises a person letting furnished accommodation with services—which at the moment is assessed under Case I of Schedule D—from getting earned income relief? Since that income is being put into Case VI of Schedule D it will not rank for earned income relief. This would seem to be against the principle which the Government are trying to put forward in regard to Schedule A. I am not sure, but I think that it was never envisaged that this legislation should penalise anyone who now comes under the new Case VIII.
    Mr. Barber: I cannot give my hon. Friend an answer to that point without further consideration, although it is perfectly true that in certain cases, throughout these provisions in Chapter II, not everyone will find that they are better off or in the same position. A certain number of taxpayers here and there will find that, to a marginal extent, they have to pay slightly more tax. The main point of subsection (4) is to provide for rents of furnished lettings to be wholly chargeable under Case VI, unless the landlord requires the rent proper to be charged under Case VIII.
    I understand, further inquiries having been made, that it is intended that the position will stay as it is. I agree with my hon. Friend that it seems unlikely that that will be the result under the Clause as at present drafted, but as to whether or not it will require to be
    1604
    altered, I will consider the point my hon. Friend has made to ensure either that it is covered at present or that an Amendment to the Clause is put down if required.
    Mr. W. Clark: Am I to understand that if people are going from Case I to Case VI a suitable Amendment will be tabled by the Government on Report?
    Mr. Barber: All I can tell my hon. Friend is that it is certainly not our intention, in those circumstances where there has been a Case I charge in the past, that those taxpayers should now be taken out of Case I. How that is to be achieved I am not quite sure without further consideration; but certainly that is not our intention.
    Sir Eric Errington: I wish at this point to raise a practical question about the actual payments to be made under the proposed Case VIII. One of the most annoying things is that at present under Case VI, charging excess rents, for one receives an intimation of liability when a lot of properties are concerned before the liability has been settled. One must then appeal against the assessment some months before it is possible to arrive at the true amount—that is, if there are certain changes in regard to the properties—if the property is either void or otherwise.
    I should like to be satisfied that under Case VIII the liability is arrived at and that that liability will be for payment of Income Tax at the beginning of the following year and not, as now exists, under Case VI. Under Case VI there is often a notional liability which requires adjustment and which involves an immense amount of paper work. It is at present dealt with by the experts in these matters who send in a pink appeal form which in effect puts the whole amount in issue. I hope that we will get away from the automatic appeals against assessments and come to the position where the exact final liability is arrived at, and payment made after that has been decided.
    Mr. John Diamond: I rise to give the Financial Secretary a little more time in which to discover what he wants to tell us, because at present we are all in a complete fog. It is, perhaps, easier for me to say that than it is for the hon. Member for Nottingham, South (Mr. W. Clark).
    Mr. W. Clark: I am not in a fog. I know what my hon. Friend said about Case 1 and Case VI.
    Mr. Diamond: May I say that I am in a fog?
    Mr. Clark: Yes.
    Mr. Diamond: By the time I am finished I hope that the hon. Member for Nottingham, South will realise that there is a fog around which may envelop a great number of hon. Members. I do not wish to be difficult about this; I merely want to give the Financial Secretary more lime to make inquiries so that we may be clear about this matter.
    Mr. Barber: I intend to clear it up.
    Mr. Diamond: Subsection (2) states:
    "Tax charged under Schedule D by virtue of this section shall be charged under a new Case VIII…"
    which, presumably, includes all amounts of profits and so on and is not limited to the rent being received but to the income in respect of services and other things going with it—the boiler, heating, cleaning and a variety of things that may be related to the rent. All sorts of things can sometimes be included in the rent, sometimes paid separately and sometimes a varying figure. Varied though they may be, they are almost always covered under the terms of the lease. As I say, we are told that the
    "Tax charged under Schedule D…shall he charged under a new Case VIII.."
    and subsection (4) states:
    "notwithstanding anything in subsection (2) …"
    to which I have referred, and it continues:
    "…where rent is payable under a lease tinder which the tenant is entitled to the use of furniture or to services.…"
    Here we have mention of the services to which I referred
    "…tax in respect of the rent (as well as in respect of the payment for the use of the furniture or for the services) shall be chargeable under Case VI of Schedule I) unless the landlord…requires that the rent shall be charged under Case VIII."
    The rules are different, or they may be different in certain respects. Surely there are assessments now under Schedule D and not under either Case VIII or Case VI. Thus we really have three eases to consider; the first is where it is being
    1606
    assessed under one case—where it will be assessed unless notice is given—and the other where the case will be assessed when notice is given. It may be one or the other, or, conceivably, a combination of both—which gives us the third ease. I am glad to say that so far the hon. Member for Nottingham, South, whose knowledge in these matters I respect, is, I think, with me.
    For these reasons, it is important for us to know whether or not this will remain the position—if that is the Government's intention—or whether the Government propose to alter the position and suggest something different and, perhaps, a great deal more simple. It is not simple, for example, when one deals with a very regular form of income—services in connection with the use of the premises, a form of income which, I would remind the Financial Secretary, is not simply calculated but which must be calculated not only by reference to the gross income but to expenses properly deductable in earning it.
    A charge for cleaning, for example, by a landlord is not simply what the landlord receives for the cleaning but what he receives, less what he paid out, which may be less equal to or greater than a given figure. The question of profit or loss arises as well as that of income. We should know whether it will be assessed under one or other of the new arrangements and is not simple to have it all assessed under one Schedule, unless one is giving notice and requires it to be assessed under one case or the other.
    I think that I am not altogether wrong in this and that the matter is by no means simple and straightforward as the Clause is at present drafted. We are making rules. Let us have them as clear as possible. If the Government are now saying that they are not certain that the present position is what they really want, and that they want another situation, we should know all the details of what is in their mind so that the matter can be fully considered.
    One of the reasons why I am on my feet is that I wish to give the Financial Secretary ample time in which to discover the facts so that he can give us a satisfactory answer. I hope that the hon. Gentleman is receiving some assistance from those who are here to help the Government Front Bench. As I say, I am on my feet

    1607
    to allow for the passage of a reasonable amount of time so that the Financial Secretary can gather the necessary information on how the Clause will work in its final form.
    Mr. Barber: The hon. Gentleman is very understanding. I shall try to deal with the two points raised, first, by my hon. Friend the Member for Aldershot (Sir E. Errington), and then by the hon. Gentleman.
    My hon. Friend asked when the tax would be due under the new Case VIII. As he will see, the conjoint effect of Clauses 15 and 16 is that the assessment is made on the basis of the current year, but necessarily by reference to the profit of the previous year and the rents and expenditure of the previous year. There is an Amendment which my hon. Friend has put down, which we shall be considering in connection with Clause 16, to deal with the case where the circumstances of the taxpayer change in the year. Perhaps I may leave comment on that aspect until we come to the Amendment.
    On the point raised by the hon. Member for Gloucester (Mr. Diamond), I quite recognise that many of the provisions in Chapter II are complex and take a considerable amount of understanding, but obviously, as he knows, they have not been drawn up in a complicated fashion because we wanted them to be complicated. In many cases they are complicated because we wished to be fair and do what we thought was the right thing by the taxpayer. I think that Subsection (4), to which he has specifically referred, is just such a case.
    In Subsection (2), besides giving the new case the label of Case VIII, we are providing that the tax shall be charged by reference to the rents or receipts to which the person becomes "entitled"—it is an important word in this context—in the year of assessment. All that we are doing here is preserving the present basis of assessment under Schedule A, which is technically a current year basis, although the fact that revaluations have been made only at intervals of five years, and not at all, I think, since 1935–36, have made it far from that in practice. The anomalies, as I think the hon. Gentleman will see, follow where the recipient's liability is affected. Where the1
    1608
    rents fell temporarily into arrears, for example, his Surtax liability might be increased, or his rents might be received in a year when the standard rate of tax had been altered. That is the reason for the reference to entitlement, which I pointed out a few moments ago.
    Subsection 4 provides for rents for furnished lettings to be charged wholly under Case VI, unless the landlord requires the rents as distinct from the payments for the use of furniture and services to be charged under Case VIII. The reason why it is possible for the rents to be charged under two cases, either Case VI or Case VIII lies in the interests of the landlord. He is given the option because it may suit the landlord in a particular case to be charged under Case VIII in order to take advantage of the provisions in the Fourth Schedule under which excess expenditure on one property assessed under Case VIII can be set against income from another property assessed under that case.
    On the other hand, where rents are paid for furnished lettings, it may be that it is convenient—indeed, I would have thought that it would be in the normal case for both taxpayer and Revenue—to charge the whole payment in one assessment under Case VI. Here again it would, of course, have been quite easy to specify one particular case and to leave it at that, but we thought it right to give the landlord the option because it may be to his advantage.
    I hope that I have had said sufficient to explain to the hon. Gentleman why there are these three Cases involved, Case VIII, Case VI and Case I, which was referred to earlier on on this same Clause.
    6.45 p.m.
    Mr. Mitchison: I am sorry to take up the time of the Committee, but' it will be remembered that in a previous discussion we were told that a grave objection to proposals we made by way of amendment was that they woud mean the continuance of assessment under Schedule A. I am rather puzzled as to what will happen, for instance, in such cases as Section 175 of the 1952 Act. This relates to the taxation of excess rents of immediate lessors arising under

    1609
    certain short leases. The effective provision is subsection (1) that the immediate lessor
    "…shall be chargeable to tax under Case VI of Schedule D in respect of the excess, if any, of the amount which would have been the amount of the assessment of the unit for the purposes of Schedule A, as reduced for the purpose of collection.…"
    I looked at the Schedule to see whether this had been repealed. Apparently it is not in the list of repeals. There may be an Amendment somewhere which answers the matter. Otherwise, one wonders what will be the basis of assessment in the future—whether it is to remain as it is at present, and, secondly, whether, if so remaining, it does not lead to the continuance of that to which the Chief Secretary took such objection in Schedule A machinery.
    Mr. Barber: It is not easy when one is looking at these Schedules of repeals, which occupy a considerable number of pages, to find a particular point without any notice whatsoever. As far as I know, all the necessary repeals are set out in the Schedule to ensure that in the future the assessment of rents will be under Case VIII and not, as previously, under the Schedule.
    Mr. Graham Page: If the hon. and learned Gentleman the Member for Kettering (Mr. Mitchison) had read the Schedule properly he would have seen that on page 90, lines 48 and 49, it repeals Sections 172 to 179. If my mathematics are right, 172 to 179 includes 175.
    Mr. Mitchison: I am sure that the hon. Member's mathematics are perfectly right, and I am much obliged for the reference. That leaves the other part of my question unanswered: what is going to be done by way of assessment in these cases now?
    Mr. Barber: Is the hon. and learned Gentleman talking about excess rents?
    Mr. Mitchison: Yes.
    Mr. Barber: In future, the new Case VIII will replace both the assessment under Schedule A, which is normally on the occupier, and the assessment under Case VI of excess rents, which was on the landlord. In future, Case VIII assessment will replace both those and will be made on the landlord. One would look at the gross rent he received and at expenses
    1610
    in accordance with Schedule 4 and the net result would be the amount on which he would pay tax.
    Mr. Diamond: We are grateful for what the hon. Gentleman has just said about excess rents, but what he has not said is whether the Clause as it now stands is or is not the Clause that he wants in the Bill. The hon. Gentleman is about to ask us to pass the Clause, because that is the Question which will shortly be put to us. We can see what is on the Paper and what is in the Bill, but we do not know what is at the back of the hon. Gentleman's mind, or rather in the mind of the Parliamentary Private Secretary, because, as we know, in these things Parliamentary Private Secretaries have sources of information which are not open to those who sit on the Government Front Bench. I should be grateful, therefore, if the hon. Gentleman will tell us whether the Clause as it stands is the Clause he wants, or whether it is the one which the Government are about to revise or amend in a substantial way.
    Mr. Barber: There is no question, as a result of points raised in the debate, that the Clause will be revised in a substantial way. Two points raised in the debate seemed to be desirable to be looked into. One was on the Amendment in page 12, line 36, which seemed an extremely good point which we ought to try to meet, though my hon. Friend the Member for Nottingham, South (Mr. W. Clark) would be the first to agree, I am sure, that it is a comparatively minor point. We shall, however, try to deal with it.
    Then there was the point raised concerning earned income relief. Our intention was that earned income relief in the circumstances mentioned should not be lost, and if an Amendment is necessary, which I very much doubt, the Bill will be amended. But I am surprised that the hon. Member for Gloucester (Mr. Diamond) should suggest that anything in the nature of a substantial amendment of the Clause is necessary. I hope that nothing that I said gave that impression. At the outset of discussions on this difficult technical matter, it seems to me that the Committee stage is the proper place for suggestions to be made for improving the Bill. I know that the Economic Secretary and the Solicitor-General and I will take very seriously

    1611
    any points of this kind which are made. Indeed, we welcome them. Even when these Clauses have passed the Committee stage, if any hon. Member cares to write to me or my hon. Friends we should be delighted to receive advice on how the Bill might be improved. If any questions are asked of me and I can help the Committee by answering immediately, I will always do so, and if I cannot I shall say so quite frankly and do my best to provide the information later.
    Question put and agreed to.
    Clause ordered to stand part of the Bill.

  Schedule 4.—(CASE VIII OF SCHEDULE D: ALLOWABLE DEDUCTIONS.)
  Mr. W. Clark: I beg to move, in page 72, line 20, leave out from "1952" to end of line 23 and insert:
  "together with actual expenditure on repairs. insurance and maintenance in the year of assessment".
  The Deputy-Chairman (Sir Robert Grimston): It would be convenient also to take the Amendment in page 72, leave out lines 28 to 44.
  Mr. Clark: It must be very obvious to the Committee that my drafting of Amendments is not very good, but I should like to explain to my hon. and learned Friend the Solicitor-General what I am endeavouring to secure here. Over the years property owners have built up a tax reserve under a maintenance claim and at any one time there is a five-year debenture on which the owner has had one-fifth, two-fifths or four-fifths of the actual expenditure. When we are dealing with Schedule A in its own context and bringing these rents under Case VIII this means that we shall cut immediately any maintenance claim built up over the period. This is an anomaly which I think the Government did not envisage. It is fair to say that many landlords are very good landlords. We always see publicity about bad landlords, but there are many good ones and, over the years; these have spent money on maintenance and improving their property and have thereby built up a maintenance claim.
  The object of the Amendments is to allow a property owner, whether it be a company or a private individual, to take advantage over the succeeding five years
  1612
  from 1963–64 up to 1967–68 of the decreasing part of the maintenance claim and so obtain it on an actual basis by adding the actual expenditure over the successive five years. I should like to give the Committee a simple example. Taking the period from 1958–59 to 1962–63, there is a maintenance claim of £100 a year, which gives a total of £500, and the normal one-fifth maintenance claim which, of course, is £100. Under this Bill, in 1963–64 the landlord will receive that £100 and in subsequent years he goes on to a basis of actual expenditure. There is an option to carry on the moving average, but this is merely putting off the evil day for the landlord.
  Under my Amendment, taking the hypothesis of a £500 maintenance claim which has been built up over the period, in the first year 1963–64 the landlord would receive one-fifth, which is £100, plus his actual expenditure over the years 1963–64. Next year it will be only one-fifth of £400, making £80 past maintenance relief plus actual expenditure, but there is an increasing amount of carry-forward expenditure so that at the end of the period the landlord will have received the maintenance claim which he has built up.
  Although I know that there has been a tremendous agitation in all parts of the country to get rid of Schedule A, it has been principally concerned with the position of owner-occupiers. A year or two ago some of my hon. Friends tabled an Amendment asking the Government to abolish Schedule A and to assess rents under Schedule D. I am sure that it was never thought by the business world that a property-owning company would have been a runner for the abolition of Schedule A, as it was thought that abolition was aimed at owner-occupiers. Consequently, there are landlords who have spent money on property thinking that they were building up a reserve of maintenance claim on future rents.
  This provision therefore penalises the good landlord, because the landlord who has not in the past maintained his property and has not built up a maintenance claim to carry forward has enjoyed an additional profit because of the statutory allowance which he has received in respect of amounts which he has not spent on his property. This is

  1613
  another reason why the Government should look sympathetically on the Amendment.
  Although I hope that this is a brief explanation of what I am attempting to do, I should not like my hon. and learned Friend to think that it is any less important because of my brevity. I hope that he will consider whether something can be done to remedy this anomaly which penalises good landlords.
  Mr. Graham Page: Under this part of the Schedule to which these Amendments apply tae taxpayer is given an opportunity to elect to continue on the five-year average basis for a certain number of years up to 1967–68. The only reason why the taxpayer should choose to do that and elect to carry on on a five-year basis would be that over the past two or three years he has had a large expenditure on maintenance and repairs and he hopes to get that back again by averaging over the next few years. He has what one might call an unexpended balance of maintenance claim. This sounds rather like the Town and Country Planning Acts. We used to talk of unexpended balances when we discussed them. In other words, the taxpayer has a reserve of maintenance claim.
  Over the past few years the Government have exhorted landlords to spend money on maintaining their property. There has been considerable agitation for this in recent years. Thus, landlords who have complied with that aim will be penalised by the Clause, but, worse still, they will see that the only way in which to get back that unexpended balance of maintenance claim will be to do no repairs for the next two years; to elect to continue on a five-year average and spend nothing on repairs. Surely, that is not something that we want to encourage.
  I believe that this election is the wrong way altogether. These Amendments would prevent that happening, and would encourage landlords to continue to spend money on repairs and maintenance because, over the next few years, they will be getting back their accumulated balance of maintenance claim as well as the actual expenditure. They deserve it. Otherwise, whether the five-year average ceases now or in 1967 and 1968, the landlord who has spent or, as
  1614
  it were, overspent on repairs—that is to say, has spent more than he can get back—will lose, whatever be the year in which we stop the average applying, unless this provision is built into the Bill.
  What is proposed is only fair, reasonable and just to the landlords who have complied with what the Government have wanted landlords to do, which is to maintain and repair their property. If this provision is not incorporated in the Bill, unscrupulous landlords who want to get back their maintenance reserve by not spending any money on repairs for the next two or three years will be encouraged.
  7.0 p.m.
  The Solicitor-General (Sir Peter Rawlinson): My hon. Friend the Member for Nottingham, South (Mr. W. Clark) is wholly mistaken if he believes that anyone thinks that brevity is in any way to be complained of, or that it concealed the vigour and point of what he said. My hon. Friend has not only launched me into the Finance Bill, which is something most people regret. but he has also launched the Committee into what the hon. and learned Member for Kettering (Mr. Mitchison) has already referred to as the very complex matter of Schedule 4.
  It would not be in order for me at this stage to deal with the whole of the Schedule, but, in order to set the scene for the Amendment, perhaps I may remind the Committee that with the ending of Schedule A after 1963–64 there is to be substituted—or so it is proposed—the system of direct taxation of rents and other income arising from property, under Case VIII, and Schedule 4 sets out a system which will operate in 1964–65 in allowing expenses as a deduction in arriving at the amount of taxable profits. The old system, of which we have recently been talking, of assessment of the net annual value under Schedule A, and the provisions of Section 175, will disappear.
  I note what my hon. Friend said about his drafting, and I quite appreciate what he has in mind, but his Amendment would allow landlords to deduct from rents during the period 1964–65 to 1967–68 both the expenditure on maintenance, repairs and other such matters according to the average over the pre-

  1615
  ceding five years, which is the present basis, and also the actual expenditure on maintenance and repairs—but not on management—in the year concerned. Thus, the whole expenses of maintenance, etc. incurred in 1964–65 would be allowed relief against the rents of 1964–65, and the one-fifth to which my hon. Friend referred—the average of the past five years—could also be used as a relief against the rents of each of the years from 1965–66 to 1967–68. That is the effect of the Amendment, although, as my hon. Friend has pointed out, what he is concerned with is the expenditure over the five years which has not so far been written off. My hon. Friend the Member for Crosby (Mr. Graham Page) has pointed out the difficulties and the problems of the man whom he described as the good landlord.
  Normally, before 1964–65, when Case VIII comes into effect, subject to the deductions in this Schedule, rents will have been taxed under the Schedule A system and the excess rent provisions. Under those provisions the amount on which tax is payable is arrived at by first computing the annual value by reducing the rent by the tenants' rates, etc., that are paid by the landlord and by increasing it by the value of the repair obligations assumed by the tenant, and, secondly, by allowing from this the statutory repairs deduction based upon the proportion that my hon. Friend mentioned. The statutory repairs deduction is at present given whether or not the repairs are done, but if the actual expenditure on maintenance on the five-year average basis was greater than the statutory repairs allowance, relief can be given for the excess by means of a maintenance claim.
  Perhaps the Committee will allow me to use an example in what, I fear, is a very complex Schedule. If, under the present law a landlord acquired a property in 1955-56, rented it at £700 a year and remained responsible for all the repairs, the annual value would be £700 and the repair deduction would be £120; that is, £20 plus one-sixth of the annual value over £100, namely, £600.
  If it is an old property the landlord will be able to make claims in the first five years in respect of the expenditure
  1616
  of his predecessor in title, that is to say, if he were able to show that the five-year average in the period was in excess of £120. Alternatively, he would be able to make maintenance claims on the basis of his current expenditure for the first five years—1955–56 to 1960–61—and then use that expenditure over again in arriving at a five-year average for maintenance claims in subsequent years. If it is a new property, in five years the repairs deduction will have exceeded what has been spent on the property.
  Thus, maintenance claims meet the case year by year where the average expenditure exceeds the statutory repairs deduction. The whole process is, and always has been, one of averaging, and I certainly accept that some items come into computation which would not on a current year basis, but that others are lost from it. What the claimant's predecessor spent may come into computation, or alternatively items may come in twice—under the new owner's concession, but, by and large, what has, in effect. been carried out is that the landlord each year has been given the equivalent of one year's expenditure against one year's income. That has been the approximate position under the existing law but, when Case VIII gets into its stride, the principle will be that the deduction is given against rents for the expenses of the current year, with a set-off of deficiencies, sideways if a pool property, or otherwise carried forwards. But it could be hard on landlords—and this is what the Government have accepted and as my hon. Friends have pointed out—who have incurred heavy expenditure in 1962–63 and who, under the maintenance claim, will obtain relief on only one-fifth in 1963–64.
  With regard to properties in those circumstances, properties which are owned in 1962–63, provision is made that the landlord can remain on the five-year average basis up to 1967–68, or, of course, any earlier year. If they wish to change from that basis earlier than 1967–68 they can do so if they think that that is more favourable. In other words, they are given a choice. The choice is either to stay on the five-year average as it was under Schedule A or to go over to the current basis. I see the force in what my hon. Friends foreshadowed

  1617
  about the time limit for election because of what has happened in the past and the position of what has been properly described as the good landlord and those people who have built up a balance.
  While I cannot recommend the Committee to accept the principle as set out in the Amendment, I think that my hon. Friend the Member for Nottingham, South, has made out a case for considering whether the time limit for election should be made more generous. If that happened, I can see the effect that it would have. I suggest to my hon. Friend that what I have said may meet the point he has in mind.
  Mr. W. Clark: If we extend the time limit, we are merely putting off the evil day. Between now and 1967–68, landlords, if they know that they will lose the maintenance claim in 1967–68, will go on to actual because there is no further election. This will mean that rented property throughout the country will, as a matter of policy, not be maintained. Therefore, landlords will lose the minimum on a built up maintenance claim. I do not think that the point is the timing of the election. If we are going to pay up to 1967–68, we have the five year moving average and we shall be faced with the problem in 1968 instead of in 1963.
  The Solicitor-General: Obviously, under the Bill, the current year basis is the basis on which the person has to go eventually. But it is appreciated that it could be hard for those who have built up a store or reserve who at some time have to transfer to the current basis. I do not think that landlords will adopt the attitude which my hon. Friend foreshadows once the transition has taken place, but I can see that if we make it too swift and too short there may be the hardship about which my hon. Friend spoke.
  Mr. Mitchison: I have certain practical experience, as I am sure many hon. Members have, of this type of claim. I am a little disturbed by what seems to me to be the underlying purpose of the Amendment.
  Take the position of the landlord who, without doing anything imprudent or improper, but in the ordinary course of events, incurred very considerable expenditure, say, a year ago. There may have
  1618
  been all sorts of reasons for it. If he is in the part of Scotland where I live, he may have had a singularly bad attack of dry rot, but there are other reasons. He therefore has to spend a great deal more than usual.
  7.15 p.m.
  Under the present law, these "bumps up" and "bumps down", as it were, work themselves out in the ordinary course of events, and the five-year average has the advantage of corresponding with the way in which things happen. The limit has always been the statutory amount of deduction. One is concerned only with the excess over that. That is worked out in relation to the periodicity, as it were, of the expenditure. That will be abolished in favour of the current year's expenditure.
  I see the difficulty, perhaps the impossibility, of doing the ironing out which hitherto has been done by the moving average, but it has some extremely difficult consequences. Assume that the landlord—and let us not impute motives to him one way or the other—is doubtful about whether he should incur certain expenditure during the current year, and elects to continue the moving average. This surely will swing him on the side of not doing repairs, which is the opposite of what we want to do,
  I should have thought that, in dealing with this type of case, where there was a choice between two pieces of machinery, one should always favour the machinery which, on the one hand, corresponds with the facts and, on the other, presents an inducement to the landlord to do the repairs, or, to put it the other way round, does not present any inducement to the landlord not to do the repairs. I do not want to express myself strongly about this. I can see the very considerable practical difficulties involved. Indeed, they may be insuperable. There may be something inherent in a change which, on broad grounds, we would all welcome.
  I hope that when the matter is considered regard will be had to these two factors. One is that in the nature of the case, with some properties at any rate, there are ups and downs in necessary expenditure, even if we regard the standard of necessity as the same all the time. The accidents of nature. whatever their form, are bound to have that effect.

  1619
  Therefore, one must, if one can, find some means of dealing with that. Secondly, one must be careful of putting the fiscal machinery in the position of becoming an inducement to the landlord —not necessarily a conclusive one but still an inducement—to refrain from doing repairs which he should do.
  Sir E. Errington: I think that it was hardly fair of my hon. and learned Friend the Solicitor-General to take new property as a test for dealing with this sort of matter. New property is very rarely the subject of a maintenance claim of any considerable amount. I therefore think that to look at the matter from the point of view of new property begs the important question which arises on the older type of property.
  I do not consider that there is any merit at all in the election and to extend the time for election in which to decide whether to go on to the actual amount spent does not solve the problem.
  I was further disturbed by the sort of suggestion that was made that on this arrangement those who own property would be getting two kinds of relief, namely, the actual and the relief of the balance of the maintenance claim, what is called the revolving claim. The actual amount spent is referenced to the particular year in which the amount is spent. The balance of the maintenance claim is in respect of other years prior to 1964–65.
  I am not sure that the amount is considerable, but what is clear is that the amount has been spent by those people who own the property. Whether it is done in the way suggested in the Amendment by making a decision definitely to go over to the actual in 1964–65 or whether it is done by giving something in the nature of a tax reserve certificate relative to each year for the unexpended balance of the maintenance claim, does not seem to me to matter.
  What is clearly beyond doubt is that the suggestions in the Amendment do not involve any question of benefit being given twice over. It is clear, I hope, to everybody that the reference to the maintenance claim is prior to the question of the actual amount. In those circumstances, it seems only fair that the balance of the maintenance claim should be given
  1620
  even if the payment in regard thereto is made during a year when an actual claim has been made.
  Mr. Graham Page: I apologise for speaking again on the Amendment, but I do not feel that my hon. and learned Friend the Solicitor-General sees the point as we see it from these benches. I am sure that by his noises and shaking of the head, the hon. Member for Gloucester (Mr. Diamond) is not with us. I believe that I can bring him and my hon. and learned Friend with us by giving a simple if exaggerated example.
  The whole point of the five-year average is, surely, that one does not spend the same amount on repairs and maintenance of a house every year. The repairs are phased. A very large amount might be spent on repairs in any one year, and it is averaged out over the five years and recovered on this average basis.
  Thinking of the phasing and taking the exaggerated example, let us suppose that in the middle year of the last five years, a man spends £500, and nothing in the other years. Because the net annual value is £80, the amount which he can recover over the whole five years is £400. There remains £100 which he has not been able to claim. If the Bill takes effect as drafted, he would never be able to claim that £100 or to recover relief upon it. Whatever he may spend in future, whether it be Id., £100 or £500 in a year, he will get back his actual expenditure but he will never get back the relief on the outstanding £100.
  Whether the formula suggested by my hon. Friend the Member for Nottingham, South (Mr. W. Clark) is correct is a matter for argument. I think that it would work out in fairness to the landlord. There should, however, be a formula which would allow the landlord to spread the missing £100 over the next years and so recover it as well as his actual expenditure for the next few years.
  The Solicitor-General: I appreciate very much what my hon. Friend the Member for Crosby (Mr. Graham Page) has said. Nevertheless, the drafting of the Amendment would allow the landlord to deduct both the expenditure on maintenance and repairs according to the preceding averaged five years and the actual expenditure on maintenance in the year concerned.
  Mr. Graham Page: Why not?
  The Solicitor-General: The whole of the expenses of maintenance incurred in 1964–65 would be allowed for relief against rents of that year and one-fifth of that expenditure could also be allowed in each of the next three years. That is what the Amendment would permit, although I understood my hon. Friend the Member for Nottingham, South (Mr. W. Clark) to be concerned over the expenditure during the five-year period before 1964–65. If there is, as the Bill provides there should be, transference from the five-year average period to the current actual period, there has to be a period of transition, and there will be a period in which in certain circumstances a landlord is in a position when he needs, and should get, more relief in the sense that he has paid out a great deal more than somebody else on a property. It was for that reason that I suggested to my hon. Friend that if this transference to the actual basis is made, the case which he had in mind might be met by extending the time during which the landlord could make the election.
  I can only repeat, as my hon. Friends the Economic Secretary and the Financial. Secretary have said, that the points which have been made in this debate, particularly by my hon. Friend the Member for Aldershot (Sir E. Errington), as well as by my hon. Friends the Members for Crosby and for Nottingham, South, certainly will be studied and considered with the greatest care and attention. The matter is so extremely complex and the ramifications of each part of it are such that it needs, and everyone wants to have, the advice and comment of everybody in the Committee.
  I have listened with great care to what has been said, but it would be wrong for me to say more than that consideration certainly will be given. I have indicated that the period of transference should be examined to see whether it should be extended. It will be examined with care in the fight of all the comments which have been made. In these circumstances, I hope that my hon. Friend will withdraw his Amendment.
  Mr. W. Clark: I am grateful to my hon. and learned Friend the Solicitor-General for what he has said and I take particular notice of his word
  1622
  "generous". The point has been made that some landlords will be penalised because they have built up this reserve of maintenance. If the Government are to be generous in allowing landlords to recoup this built-up maintenance claim over a longer period. I am delighted and I shall look forward with great interest to see what comes out of this debate.
  In view of what my hon. and learned Friend has said, I beg to ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn
  7.30 p.m.
  Mr. Stanley R. McMaster: I beg to move, in page 73, line 13, at the end to insert:
  Provided that nothing in this paragraph shall affect the operation of Section 16 of the Finance Act 1954 (by which investment allowances are made in respect of capital expenditure on new assets).
  Like the one before, this is a technical Amendment, This subject has attracted the attention of professional people who have studied the Bill and whose duty it will be to apply its provisions. It is provided in Clause 22—Treatment of premiums, etc. as rent—that the tenant who is obliged by the terms of the lease to carry out work on the premises is deemed to have paid a premium of an amount equal to the increased value of the premises resulting from that expenditure. This deemed premium is then deductible to the extent which is chargeable on the landlord under sub-paragraph (a) of Schedule 4.
  It is provided by Section 330 of the Income Tax Act, 1952, that, for investment allowance purposes, capital expenditure is excluded expenditure allowed as a deduction in calculating profits. The result of this would appear to be that investment allowances may be precluded to the extent to which expenditure is deemed to be a premium and is deductible in calculating profits.
  This effect is surely not intended, and the purpose of the Amendment is to make it clear that investment allowances will continue to be granted where they would normally be due. In addition to that, if this Amendment is not accepted, the effect will be that a lessor will be required to pay tax on a percentage of the value of the building and plant, although no receipts would have arisen in respect of

  1623
  the deemed premium. That is inequitable. It would also be inequitable to impose a tax on the cost of the work undertaken without making provision for possible reductions in value at the conclusion of the lease.
  These are difficult points which I should like the Government to consider. Perhaps the drafting of the Amendment leaves something to be desired, but these points have been put by professional bodies, including the tax panels of the Federation of British Industries and the Association of British Chambers of Commerce, and the Association of Certified and Corporate Accountants also considers this to be a defect in the Bill.
  The Solicitor-General: I hope that I can reassure my hon. Friend the Member for Belfast, East (Mr. McMaster). Some of his fears are groundless and there is no intention that there should be the effects he mentioned. The effect of his Amendment would be to ensure that any capital expenditure incurred by a tenant of premises which are subsequently sublet, under an obligation in the lease—which sometimes arises—to execute works, particularly industrial undertakings, would not be prevented from qualifying for investment allowances under Section 16 of the Finance Act, 1954, because the obligation would have to be taken into account in arriving at a charge on the landlord under Clause 22(2) of this Bill.
  The fears that traders' investment allowances may be cut by reference to Section 330 of the Income Tax Act, 1952, which defines capital expenditure, are groundless. The capital expenditure of the tenant is not itself allowed to be deducted in computing his profits—and we are foreshadowing Clause 22 in this matter—although his deduction is related to a notional premium, which is, in turn, related to the work to be done and thus eventually reflects the expenditure.
  However, I must advise the Committee that this connection is too remote to prevent the grant to the tenant either of the investment allowances or of the initial and annual allowances. So, to that extent, the Amendment is unnecessary. But I am glad to have had this opportunity of reassuring my hon. Friend. ft points to the fact that certain examinations may still have to be made of this part of the
  1624
  Schedule to ensure that the tenant does not get a double allowance for expenditure and also by reference to the taxable element in a notional premium. I only say that by the way, however. This is an important subject and it was useful to have this Amendment moved but I hope that, on reflection, my hon. Friend will realise that his fears are not as wide as he thought.
  Mr. Diamond: Why does the hon. and learned Gentleman think it right that we should be compelled to consider this Schedule, which relates to Clause 22—indeed, without understanding Clause 22 one cannot understand the Schedule—in between Clauses 15 and 16?
  The Deputy-Chairman: Order. We cannot go into that now.
  Mr. McMaster: In view of what my hon. and learned Friend has said, particularly the last point concerning the possibility of the tenant being doubly relieved—which I had not noticed—I beg to ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Mr. W. Clark: I beg to move, in page 74, line 19, to leave out sub-paragraph (c).
  The Deputy-Chairman: Perhaps it would be possible to discuss at the same time the other proposed Amendment to the Schedule in the name of the hon. Member—in page 76, line 17, at end to insert:
  14. Where the deductions allowable for the purposes of Case VIII exceed the income for any year of assessment. such excess shall be available for relief under Section 341 of the Act of 1952, and in so far as relief cannot be given under that Section it shall be available for relief against any assessment under Cases VI or VIII for subsequent years provided that relief shall be given only once for such excess.
  Mr. Clark: They are related, Sir Robert.
  This again is rather a technical matter. It is a question of Case VIII losses. I am sure that the drafting of the Amendment is again a little inefficient, but the spirit of the thing is that in Case VIII it should be perfectly clear that losses should be allowed to be carried forward even if they cannot be set off against other income, but that in any case any loss on one property should be able to be set off

  1625
  against profit on another property in the same year. Even then, of course, the thing remains a loss and I ask that it should be carried on as in any other case under our tax system.
  The Solicitor-General: The effect of the Amendment would be to deprive some taxpayers of some relief. Paragraph 11(2) of the Schedule lists the expenses allowable against Case VIII receipts other than rents, etc. First of all, it provides for relief for appropriate expenses of maintenance of premises, and, secondly, for reliefs for rents paid and then for these other payments which the Amendment would omit.
  The kind of expenses envisaged, which wore foreshadowed by the hon. Member for Dunbartonshire, East (Mr. Bence) would be expenses incurred, for instance, by somebody in having persons shown round a stately home, which would not, however, be sufficient to amount to a trade assessable under Case I of Schedule D. At present. the receipts would be assessable under Case VI, but under the Bill they fall within Clause 15(1). These expenses would not be covered by paragraphs (a) or (b). If paragraph (c) were removed, as has been suggested, that would have the effect of depriving some taxpayers of relief, and I do not think that this is what my hon. Friend has in mind.
  I turn to the other Amendment, which is an important matter. Although my hon. Friend was commendably brief, I find it more difficult to be brief in reply to him. The scheme of Schedule 4—I fear that I have to go back to this again t indeed, this is one of the difficulties which we all experience—is to allow, first, expenditure attributable to properties let under lessors' repairing leases at full rents against the income arising from the same property and other properties in the pool; secondly, expenses attributable in respect of other properties let at full rents but not on lessors' repairing leases in so far as they exceed income may be carried forward against rents from the subsequent letting of the same property; thirdly, deductions for expenditure attributable to properties which are not let at full rents would be allowable only against rents arising out of the current lease.
  Those are the three different kinds of property which have to be provided for
  1626
  in Schedule 4 and tae object of the change is the replacement of the conventional reliefs, reliefs which there have always been before and which hon. Members say are time-honoured practice, by the deductions for expenditure actually incurred. That does not mean that the excesses of expenditure over income arising from property would qualify for relief in the same way as trading losses. That has been considered, as some hon. and learned Members will recollect, in the House of Lords in various cases. It was pointed out by the Royal Commission that losses in respect of buildings or land were not comparable with losses in business. It is apparent that the receipts and rents chargeable under Case VIII are investment income and not trading income and I think that it is universally accepted that they should not qualify for earned income relief. The ordinary rule with investment income is that no allowance is made for expenses.
  Therefore, the principle followed in Schedule 4—and this is why, I fear, it has taken me some time to reply to this Amendment—is that the landlord is not allowed relief for an excess of expenditure over income where the rent is not a full rent, in other words, where he is not expected to cover all his own obligations.under the lease and the expenses of upkeep. If there were such a letting, it would not be a business transaction and there would be no reason for the landlord to get relief against other income which arose from leases. The excess of expenditure over income arising from the lessors' repairing leases could be set against income arising under leases of the same kind, but not against income from ground rents, which are in the nature of pure profit income. Thirdly, where tenants' repairing leases give rise to a deficiency, that could be carried forward against future incomes for the same premises or set of premises, but not for another set of premises in the group or pool.
  7.45 p.m.
  I must therefore reject any suggestion which is inherent in the Amendment that excesses of expenditure over income arising from property should be assimilated to trading losses and set against property generally. But the other points which arise are such as to merit consideration and, though I fear that I have

  1627
  said it before and I continue to say it each time, we will certainly give further consideration to the points raised by my hon. Friend even—
  Mr. W. R. Rees-Davies: Before my hon. and learned Friend concludes; I am trying to follow and understand, but I cannot claim that I am satisfied, although I have no knowledge of this subject. Many constituents have been plaguing me with this question. Let us suppose that an owner has one property—this is typical of Margate and such places—and he lets off rooms or flats in it and, because of the outgoings and expenditure in one year, he has a bad year and suffers a loss. Could he catch up the following year in respect of that property, saying, "I was sustaining a loss last year and I want to carry that loss forward to next year"?
  I have appreciated that that cannot be done for a pool of properties—one property could not be set off against the other—and I can see the strong case for saying that, because that is not like a business and one could simply plough a lot of money into the losing property and set off one against the other.
  I have two questions. First, is there to be anything simple for the public so that the ordinary boarding house keeper, hotelier or other individual will be able to understand this provision? I will be quite blunt about it. I have not a clue about this and I am doing my best but still not getting very far and I am sure that the public will not. Secondly, if an owner suffers a loss on an individual property—and most of the people I have in mind own only one property—can he carry the loss forward into the following year? I am sorry to be dumb about this, but there it is.
  Mr. Bence: It was a breath of fresh air.
  The Solicitor-General: The icy blast which has blown from my right should have been in another direction. Because of our procedure, we have to deal with Amendments before we are able to explain the Schedule itself. My difficulty is that here we have one of the most complicated Schedules with which the Committee has ever been presented, certainly for a long time, containing a major change in our Income Tax law. The difficulty is that we have to take bits
  1628
  and pieces out of it when replying to various Amendments. I am sorry that it is so complex and I am probably making it much more complicated, but it is very difficult.
  The answer to my hon. Friend the Member for Isle of Thanet (Mr. Rees-Davies) is that the loss on that one property would be carried forward. He has under-estimated his powers of understanding or ability to grope through the murk of Schedule 4. He was quite right in his suspicions that the pool of property where there is a full rent and the repairing obligation is imposed fully on the landlord cannot be extended to cover the third class where there is not a full rent. What he believed to be right was right. The answer to his second question is that it can be done. In reply to his general comments and strictures, I hope that he will join in the discussion of Schedule 4 itself.
  Mr. Graham Page: The point with which we are dealing is a fundamental one, whether a person can carry forward losses on rents and repairs to property in the same way as he can carry forward trade losses. I understand from what the Solicitor-General said that somewhere in Schedule 4, or somewhere else in the Bill, it is provided that a person can carry forward losses on property if it is let at a full rent. I have not spotted the Clause or line which contains that provision, but I accept what my hon. and learned Friend says.
  The whole business of the management of property to let is surely the phasing of repairs and maintenance, and perhaps the repairing of one property when it becomes void. If a landlord is managing properties to let—and after all the Government are trying to encourage owners to build properties to let, and to keep those properties to let—in taxing him it would only be fair, when a loss is incurred in one year, to allow him to carry it forward to the next year in the same way as any other trading loss.
  Why should there be a distinction between the man who owns one house and lets it and is able in one year to spend a lot of money on that house and make a loss which he can carry forward to the next year. and the man who owns five houses, or ten houses, or a hundred houses? Why should he be told that he

  1629
  can only carry forward the losses on one house at one time. If he is managing a whole estate, it might in any one year pay him to keep some houses void for a period and carry out thorough repairs to them. This might be an economic way of doing the job, and in that year he might make a heavy loss. Why should he not be able to carry that loss forward in the same way as a trading man would be allowed to do?
  I think that we are tackling a fundamental point. if we are doing away with Schedule A, let us put this on a proper trading basis, and a basis which will encourage people to go into the business of letting houses, because the Government want to encourage people to go into that business.
  Mr. Bellenger: If there were 20, 30, 40, or 100 houses involved, would not it be possible for the owner of those properties to convert his holding into a limited property company, when the trading would be under a different Case from this one—probably Case I—in which event all legitimate expenses could be put against the income and losses carried forward?
  Mr. Graham Page: I am not sure that that would be Case I, but if it were it would prove my argument. Why should there be this distinction between the limited company and the individual who is trying to run a decent business?
  Mr. W. Clark: My hon. and learned Friend said that he would look at this again. Will he allow the carrying forward of losses because, as my hon. Friend the Member for Crosby (Mr. Graham Page) said, if there is a property company it will be assessed in any case under Case VIII and not under Case I. If it is assessed under Case VIII, whether it owns 10, or 100, or 1,000 houses, are we going to say to that company that it can carry forward the loss on the block of flats A to the future profits on block of flats A, but it cannot carry forward the losses in respect of block of flats B? This will make nonsense of any attempt to simplify the accounting and taxation of property companies. Should that happen, property companies and people interested in property will look back with nostalgia to the days when they were assessed under Schedule A.
  1630
  When I speak about property companies, I accept the point about ground rents. If there is an ordinary property company which has houses or fiats to let, it is impracticable to say that losses can be carried forward only through the channel of identifiable property. If my hon. and learned Friend is saying that in this mass of property which the company owns, losses, excluding ground rents, can he brought forward against successive profits, that is all right, but does my hon. and learned Friend mean separate properties being kept separate in accounts and being brought forward to offset losses against profits?
  Mr. Bence: I was confused at the beginning, and I am more confused now. I apologise for entering into the discussion on this technical matter, but it seems that if an owner of, say, 100 houses, pays out £300 on the repairs to one house in one year, he can only set that against the rent of that house, but if he forms himself into a limited company, he can write off his losses against his 100 houses.
  The Solicitor-General: I hope that I shall not make confusion more confounded. If my hon. Friend the Member for Nottingham, South (Mr. W. Clark) looks at the beginning of Schedule 4, to which we shall come after we have dealt with this, he will see that the scheme is to allow three different kinds of procedures, and I think he will agree that they are reasonable and comprehensive.
  The first is that expenses can be attributable to properties let under a lessor's repairing lease at a full rent against income arising from the same and other properties in the pool based on the same kind of lease. In other words, if there is a full repairing lease and properties are let at a full rent, the expenses can be, as it were, attributable over the whole of that pool. But there are other kinds of rents where the responsibility upon the landlord is not that where there is a full repairing lease and what is known as a full rent. The answer to my hon. Friend's first point therefore is that where there is a pool one can do what he thinks one should be able to do.
  Mr. Diamond: That is the normality of cases. If we can get that into everybody's head, and then make everyone understand that the hon. and learned

  1631
  Gentleman is going to deal with the less normal case, I think that everybody will relax a good deal more.
  The Solicitor-General: Though I should like to see everybody relax, I am afraid that dealing with Schedule 4 is not a relaxing occupation. It needs a great deal of concentration rather than relaxation.
  The class of case to which I have referred is the first which the scheme under Schedule 4 is designed to allow. but then there are other cases of properties which are let at full rents, but not on a lessor's repairing lease. In other words, there are not all the full obligations on the landlord and their expenses can be carried forward against subsequent income for the same property.
  There is the third case which I mentioned, that of expenses which are attributable to properties which are not let at full rents. This means not let at rents which would normally cover what the landlord pays out, and sometimes one has to provide for that. Those expenses are allowable only against loss arising under the current lease. That is because, for obvious reasons, if a person enters into such an agreement he cannot expect to have the advantages he would have if he were letting at the full rent.
  I realise that this is an important matter. As I have said, the comments made by hon. Members on both sides of the Committee will be studied before the next stage of the Bill.
  Mr. W. Clark: In view of what my hon. and learned Friend has said, I beg to ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  8.0 p.m.
  Mr. R. J. Maxwell-Hyslop: I beg to move, in page 75, line 12, to leave out "tidal".
  The Amendment is a simple piece of surgery, involving the amputation of the one word "tidal." This matter has a somewhat lengthy history. Practically the whole phraseology of paragraph 13(1) of the Schedule is taken from the Finance Act of 1853—a century and a decade ago. Since then the provision has undergone no modification worth speaking of
  1632
  —nor, incidentally, has the meaning of the phrase "tidal river" ever been tested in the courts, to the best of my knowledge. Last night I was conducted through the mysteries of Halsbury by a learned friend, and the only thing I found that could be regarded as connected with it was the case of Hesketh and Bray, in the Court of Appeal, in 1888. That case decided another point, but not the question of what constitutes a tidal river.
  On the probably unreasonable assumption that words mean what they say, I take it that any river is a tidal river which does not flow into an inland lake or river. The provision does not refer to the tidal portion of a river. Had that been desired, the provision could have been so worded. So perhaps a tidal river is not the main tidal river but the tidal portion of the river. If it means the tidal portion of the river, which is certainly not what it says, that is also unacceptable, on two grounds.
  It is no less necessary for somebody to protect his property against the overflowing of the non-tidal portion of a river than it is to protect his property against the overflowing of the tidal portion. But if this means a tidal river it restricts the benefit of the allowance of one twenty first part of the capital cost of erecting a flood wall or embankment over a 21-year period to those whose property adjoins the tidal portion of the river or the sea. Even this is more unreasonable than it seems, because in the case of Hesketh and Bray the court established that it was not an encroachment or overflowing of the sea if the sea only moved between its normal high and low water marks. Nor is it an encroachment or overflowing if it merely spreads itself up to its high water mark over the land which it inundates whenever it wants to do so within the existing high water mark. The time when flooding from sea water or tidal portions of rivers is particularly offensive and destructive is when there is a high tide in conjunction with an on-shore gale. The sea then refuses to recognise the high water mark.
  It is quite unreasonable about this, and I apologise to my hon. and learned Friend that it should be unreasonable about it. It is unreasonable then, and it goes right up the estuary, far beyond

  1633
  any high-water mark which the Minister of Housing and Local Government would ever recognise. Then it does not have the decency to confine itself to the natural water course of the river, but overflows on to property belonging to people who may not wish to have its visitation.
  It is for the preservation or protection of such property—which was then called land but is now called premises—that our worthy forebears, in 1853, deemed it expedient to insert this provision, which is Section 37 of the Finance Act of that year, and which the Treasury draftsmen, in their economy, have embodied in every Finance Act since, to the best of my knowledge.
  Since I understand that the matter has never been tested in the courts it is presumably a point which does not often arise. It is not, therefore, likely to be a point which would involve the Treasury in any great loss of treasure. I am informed by the Financial Secretary to the Treasury that this provision does not apply to factories or to agricultural land, because they have much larger allowances under other provisions. This applies only to property which is not factory property or agricultural property.
  I hope that my hon. and learned Friend will treat the Chamber to his learned advice on the meaning of the phrase "tidal river", even though it will not he an opinion that is based on any decision of the courts that I have been able to discover.
  The Solicitor-General: My hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) has introduced a refreshing breeze into the arid debate on Schedule 4. The only thing that has concerned me a little is the question of whose advice he took late last night, and where he conducted his researches. He is quite wrong in telling the Committee that these words have not been the subject of litigation or pronouncement by the courts. Indeed, it started as long ago as the seventeenth century—and that is a long time even by the standards of the law.
  Even in those days Lord Hale said that a river that is called an arm of the sea where the sea flows and re-flows and so far only as the sea flows and re-flows is a tidal reach. Again—and my hon. Friend asked for quotations—I should tell the Committee that Mr. Justice Grove,
  1634
  in the case of Reece v. Miller, dealt with the question of what constitutes a tidal navigable river. He said that that had been discussed in various cases, which he referred to. I appreciate the concern that has driven my hon. Friend to set down the Amendment, but he has had the misfortune of not having had very good advice on the interpretation of the words "tidal river".
  Mr. Maxwell-Hyslop: But the first case which my hon. and learned Friend quoted did not concern a tidal river, but a tidal reach of river. Will he quote specifically the extract which he recommends to us from the case of Reece and Miller?
  The Solicitor-General: My hon. Friend must have misunderstood me. According to Mr. Justice Grove the definition of a tidal river was that it went to the tidal reaches. Mr. Justice Grove said that the question of what constitutes a tidal navigable river had been discussed in various cases. The judgment, which also cites Lord Hale, goes on for a considerable time, and I would not be justified in presenting it to the Committee. These words do not have the difficulty of interpretation which my hon. Friend fears.
  He is right in saying that the landlords of factories and manufacturers receive relief for work done to prevent flooding from anything, he it the wicked sea or the wind and the rain. They get them by capital allowances on industrial buildings and structures.
  Secondly, agricultural landlords and farmers get relief for work done in this respect under Section 314 of the Income Tax Act, 1952. They get a ten-year period of writing off. So we are left with other landlords, commercial landlords and residential landlords. They are given relief by the provisions in paragraph 13 of this 4th Schedule which repeats broadly what has been the law and what is at present the law. My hon. Friend says that it is wrong in that it provides relief only from the sea or tidal river flooding. I can only say to him that it has not been the practice or the law to give relief for protection against other kinds of flooding.
  Mr. Maxwell-Hyslop: Why not?
  The Solicitor-General: It has been, as it were, the relief or protection which has

  1635
  always been considered to be a Crown duty—this is really going back into history—in respect of the sea rather than the river. Therefore, the river is a tidal river in such parts only as are within the regular ebb and flow of the highest tide, and relief is given. That is why relief under paragraph 13 is only and has only been given in respect of such tidal invasion, which is invasion as it were from the sea. It has never been given for any other kind of flooding. For tat reason I cannot advise the Committee to accept the Amendment.
  Mr. Maxwell-Hyslop: Does my hon. and learned Friend accept that the sea can and does flood above the high water mark to which he has referred the Committee, and therefore it might be prudent and necessary for a landlord to erect an embankment or sea wall at a point above the high water mark on the tidal reach, as my hon. and learned Friend defined it, in order to protect his property against encroachment not of a river but of the tidal part of a river?
  The Solicitor-General: If it were the sea which came into the river and reached this particular height and caused particular flooding, it would be within the tidal reaches at a particular time. But I cannot say whether a man would be wise or not to engage in such a building or claim such relief. All I can say is that it would be a matter of interpretation of what caused a particular flood, which would probably give joy to a number of lawyers.
  Mr. J. Grimood: As an amateur, I am interested in this difficult point of definition, upon which I do not pretend to speak with authority. I am sure that the Solicitor-General has convinced the hon. Member for Tiverton (Mr. Maxwell-Hyslop) that the Government know what is a tidal river. But I did not find the Solicitor-General altogether convincing in answering the second question from the hon. Gentleman. He seemed to say that this provision is in the Bill simply because it is repeating what has always been the law, and he implied that it had a long historical justification, and that that is the reason why it is confined to a tidal river.
  The hon. and learned Gentleman failed to advance any reason why it should
  1636
  continue to be confined to tidal rivers, I should have thought he might have said that he would look at this matter again. Apart from the historical reasons, are there any reasons why a landlord who protects his property, and who is not an agricultural landlord but a private landlord protecting his property, should continue to be excluded? Would he benefit under some other legislation, and if not, is there any reason why the differentiation should continue, and will the Government look at this matter again?
  The Solicitor-General: Schedule 4, dealing with Case VIII, when it comes into effect will relate to deductions allowable in certain circumstances against income. That is why paragraph 13 is brought into this part of the Schedule, to provide in this respect.
  Mr. Bence: I am not satisfied with the answer given by the Solicitor-General regarding the definition of a tidal river and of flooding. In the part of Glasgow where I live, which is not far from the Clyde, there is a brook or a burn as it is called, which runs into the Clyde. This brook floods not because of sea water but because the high tide in the Clyde prevents the fresh water in the brook from getting away, and so property is flooded and we have to take precautions against flooding. Am I being flooded by a fresh water burn or by the high tide in the Clyde. I admit that it is fresh water, but was it caused by the tidal reach in the river? Am I being flooded by a tidal river or not? If I take precautions to protect my house from the effects of a high flood tide on the Clyde, am I entitled to set that off as a claim? I am not satisfied with this definition of a tidal river extending to the tidal reach.
  There is a lot of flooding by the river Wye at Monmouth and in Gloucestershire, where the river rises as much as 30 ft. at high tide. There is no flooding in the estuary where the land is high. But at Monmouth, far beyond the tidal reach, where the land is lower, there is flooding. This definition of a tidal river has been taken from the seventeenth century when people did not have the understanding given to Lord's Advocate and Solicitor's-General in these days. At that time Parliament was not so erudite

  1637
  nor had its Members so many resources for research and they were not so qualified in the use or appreciation of language. It is about time that this definition was changed. I do not suggest that I am competent to do it, but I think it should be changed. I hope that the definition will be looked at again and the word "tidal" removed. so that we may obtain protection from flooding whether tidal or otherwise.
  8.15 p.m.
  Mr. McMaster: I am also confused I think I was able to follow what my hon. and learned Friend the Solicitor-General said in distinguishing between a tidal river and non-tidal river. In my constituency there is the River Lagan, which flows into the sea through Lisburn. Is the river a tidal river at Lisburn because it flows into the sea? I should have thought that it was. If it floods at Lisburn, is the flooding there caused by a tidal river, taking the words here.
  "… against the encroachment or overflowing of the sea or any tidal river …"?
  Suppose that it is not the sea? There is here the word "or" in the paragraph and I should have thought that above the reach of the tide would come under the ordinary meaning of these words. In the same paragraph there is reference to the
  "… making of any sea wall or other embankment…"
  If that is meant to be limited to a sea wall or other embankment, I should have thought that the drafting of this paragraph means it is to apply not only to the sea portion but to the rest of the river.
  Mr. Houghton: I think now that the debate has got going we had better all mention our rivers. I have the River Calder. It is a long way from the sea, but storms take place on the Yorkshire Moors and torrents of rain come down into the lower parts of my constituency and flood them doing serious damage to property. One sees river walls holding up gardens and houses where otherwise serious damage would occur.
  I am getting more and more interested in this question of tidal rivers. If the hon. Member for Tiverton (Mr. Maxwell-Hyslop) presses the Amendment to a Division, I shall certainly support him. When the Solicitor-General replies, as he has been studying this matter very closely, will he give information about the tide
  1638
  which is running so strongly against the Government at present?
  Mr. Denys Bullard: I added my name to this Amendment because I was interested in the definition of a tidal river. As the matter has now worked out I am not yet fully aware of the reason why a person who happens to he above the extent of the tidal reaches of the river should not have this benefit as well as the person who is below that part of the river.
  I heard the Solicitor-General answer the right hon. Member for Orkney and Shetland (Mr. Grimond) about the idea of the Schedule, but I do not think he pave any reason why a person further up the river should not have the same benefit. Although I hope that my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) will not press the Amendment to a Division, I should like to be satisfied on this point before we leave the matter.
  The Solicitor-General: In answer to the hon. Member for Sowerby (Mr. Houghton), tides do ebb and they do flow, as we have shown very considerably in the course of this debate.
  Perhaps one may build up very substantial walls against tides and sometimes see those tides withdraw completely so that one lives very much more happily seeing the tide in the distance than if it is beating against the wall. This provision involves the tidal reaches, and that is a question of fact. It will be a question of fact in each case as to what has caused the particular flooding. Paragraph 13 is to maintain what has always been the position. It is to accept responsibility by giving a relief where flooding is caused by the encroachment or overflowing of the sea. Then it involves the question of a tidal river.
  My hon. Friend the Member for Tiverton and my hon. Friend the Member for King's Lynn (Mr. Bullard) have asked, if this relief is given for those concerned with the tidal part of the river, why should it not be given in respect of other types of river? My hon. Friend the Member for Tiverton illustrated how this happens in his part of the world and other hon. Members have said that it happens in their parts, not apparently by the encroachment of the sea, but above the tidal reaches and having nothing to do with the sea.

  1639
  I understand the point made that the word "tidal" should be removed, but I can only say to my hon. Friend that we deal with a river in that sense because never before has this relief been given. Are we in the middle of this Bill, at this time, on paragraph 13 of the Fourth Schedule, to change what has always been the position? [HON. MEMBERS: "Yes."] A case has been made that if the relief is given for this Act of God, or act of the sea, why should it not be given for other matters and other considerations? Then we should have to consider the implications. In paragraph 13 a capital expense is allowed against income. That is very unusual. The same provision—this is not always a good reason, but it sometimes appeals to lawyers—has been applied since 1853 and we thought there was not sufficient reason for the change suggested by my hon. Friends at this time. For that reason the provision has been drafted in this way to include a tidal river because it is the responsibility—I use the term in the broadest sense—an historical responsibility of the Crown. It involves a capital allowance and it seems right to restrict it to tidal rivers.
  Mr. Maxwell-Hyslop: I gave notice of this matter on 2nd May in a letter to the Chancellor of the Exchequer. I cannot see that any very good reason has been put forward against what seemed quite sensible questions. On the first, the question about definition, I understand that if one is up the river one is "up the creek". This is not only a question of being flooded by river water above high tide mark, but also that under certain circumstances the tide does not respect the high tide mark. The object of the manœuvre is to put up a wall, not after one has been flooded by the sea, but before, in advance of the flooding rather than after it has happened, that being a precautionary rather than a funereal measure.
  The only way to prove that the sea is coming up or will in certain circumstances come up beyond the normal high tide mark is to wait until the sea does so. If the Committee takes the view which my hon. and learned Friend has put before us one may erect a sea wall or embankment against an encroachment of the sea, not even the river above the
  1640
  high tide mark, and then have to wait until the tide demonstrates its ability to flood above that point. That does not seem a reasonable thing to do, nor does it seem reasonable that the benefits under this aged Section should be restricted to cases when the water contains a certain amout of salinity rather than other forms of unpleasantness. I feel I must press the Amendment to a Division.
  Question put, That "tidal" stand part of the Schedule:—
  The Committee proceeded to a Division: —
  Mr. PYM and Mr. MACARTHUR were appointed Tellers for the Ayes and Mr. MAXWELL-HYSLOP was appointed Teller for the Noes; but no Member being willing to act as second Teller for the Noes, The CHAIRMAN declared that the Ayes had it.
  Amendment negatived.
  Schedule agreed to.

  Clause 16.—(ASSESSMENT AND COLLECTION OF TAX UNDER CASE VIII.)
  8.30 p.m.
  Mr. W. Clark: I beg to move, in page 13. line 32, at the end to insert:
  Provided that tax charged under any assessment shall not be collected to the extent that the person assessed can show to the satisfaction of the surveyor that it will exceed tax on the rents or receipts to which the person has or will become entitled in the year of assessment.
  I apologise for bringing the Committee back to the arid wastes of Schedule A. This is a simple Amendment. The Economic Secretary referred to it earlier. All that the Amendment seeks to do is to give the taxpayer the right to make a payment on account where his income under Case VIII has decreased during the year. It is on an actual basis and the income will be based on the previous year's assessment adjusted on the preceding 5th April, but there should be a right in the Bill for the taxpayer to obtain a reduction where the amount of property from which he is deriving an income has altered in any way.
  Mr. Barber: Assessments under Case VIII are to be made on a current year basis, but in order to prevent delay in the payment of tax, this subsection, which my hon. Friend the Member for Nottingham, South (Mr. W. Clark) wishes to amend, provides that the Case VIII assessment for the year is to be

  1641
  made in the first instance on the basis that sources of income and amounts of proceeds are the same as in the preceding year and the tax has to be paid accordingly on 1st January; but any necessary adjustments will be made after the end of the year when the figures are known.
  That is a point in what my hon. Friend said. It could cause hardship if a landlord who disposed of some properties in the course of the year or preceding year nevertheless had to pay tax on an assessment based on the preceding year's income without allowance for this fact. But, for a reason which I will explain, I hope that my hon. Friend will on reflection agree that as drafted this Amendment goes too far. It would create a great deal of extra work and would cause delay in collecting the tax under Case VIII if tax due under what I might call a provisional estimate had to be held over just because of small estimated changes in expenditure.
  On the other hand, this major difficulty would be met by a proviso excluding from the provisional estimate any receipts and outgoings in respect of premises which were disposed of before or during the year and not replaced by other premises.
  My hon. Friend will, I think, appreciate that, for these reasons, I cannot advise the Committee to accept the Amendment in its present form, but I give an undertaking that on Report we will introduce an Amendment to go as far as we can and to deal with the more serious cases which have been brought to light as a result of the Amendment.
  Mr. Mitchison: We will look at the Amendment when it is on the Paper.
  Mr. W. Clark: In view of what my hon. Friend said, I beg to ask leave to withdraw the Amendment.
  Amendement, by leave, withdrawn.
  Clause ordered to stand part of the Bill.
  Clauses 17 to 23 ordered to stand part of the Bill.

  Clause 24.—(CHARGE ON SALE OF LAND WITH RIGHT TO RECONVEYANCE.)
  Question proposed, That the Clause stand part of the Bill.
  Mr. Barber: I am sorry to strike a discordant note, but if I say a few words I think it would be for the advantage of the Committee, and, indeed, of those outside. There is one point on the Clause which I should like to make clear. It is, as the Committee will have appreciated—not perhaps from our previous discussion but from reading the Clause —in the main an anti-avoidance provision. However, it has been pointed out that, as it is at present. drafted, it would apply to the case where property is sold and immediately leased back to the vendor. Hon. Members will know that this is a common type of commercial type of transaction these days and, as there is no interval between the sale and the lease, it cannot be contended that the transaction amounts to a lease from the vendor to the purchaser for a period in return for a disguised premium. We are considering how best to deal with this type of transaction, but I think that I should tell the Committee now that we shall table an Amendment on Report to exclude it from the charge which would otherwise arise under the Clause as it now stands.
  Question put and agreed to.
  Clause ordered to stand part of the Bill.

  Clause 25.—(PROVISIONS SUPPLEMENTAL TO SS. 22 TO 24.)
  Question proposed, That the Clause stand part of the Bill.
  Mr. Graham Page: I want to refer to subsection (5). Under Clause 22 a premium is chargeable if the lease does not exceed a term of 50 years. If the lease is granted for more than 50 years, the premium is not chargeable to tax. If the lease is granted for a period of over 50 years with an option to the tenant to break at 14, 21, or any number of years within 50 years, under subsection (5) the lease is treated as of that length and term—14 years or 21 years, at which the tenant has the power to break. The landlord may have no power to break if the option is given only to the tenant. The landlord may be bound to a lease of 50 years or more. Having granted a lease of that length, he would not be chargeable to tax on any premium that he took. The Bill as it stands puts

  1643
  it in the hands of the tenant to decide whether the landlord is chargeable to tax.
  I agree entirely that, if the lease can be broken at any period under 50 years by the landlord, it is right that it should be treated as a lease for that length of years up to the point when the landlord has an option to break to. I submit that when it is merely an option for the tenant to determine a lease and when the landlord, the person on whom the premium is charged to tax, is bound to allow the lease to run over the 50 years, it should be treated as a lease for a period exceeding 50 years, a lease the premium for which is not chargeable to tax.
  Will my hon. Friend the Financial Secretary explain why in subsection 5(a) the words "or by the tenant" appear, with the result that, even though the lease may be for over 50 years and even though the landlord may be bound to let the lease run for over 50 years, it is treated for tax purposes as a lease for the period only up to the point when the tenant can exercise his option?
  Mr. Bellenger: Is this a substantial point? Is it conceivable that a case like this could arise? For example, if a tenant has taken a lease over 50 years and has paid a substantial premium, surely he would not wish to do anything at 14 or 21 years or whatever period it may be, without trying to get some of his premium back. There might, on the face of it, be some justice in the hon. Member's contention, but I do not think that it is ever likely to arise.
  Mr. Barber: Subsection (5) of the Clause contains provisions for determining, for the purposes of Clauses 22, 23 and 24, the length of the lease which may be cut short before it has run its full term.
  I am sure that my hon. Friend the Member for Crosby (Mr. Graham Page), who is knowledgeable in property matters, will have appreciated immediately he saw these provisions that it was necessary to prevent an avoidance of tax on premiums under the formula set out in Clause 22(1) by dressing up a lease as one for a much longer period than that for which it is intended to run.
  My hon. Friend referred in particular to subsection (5,a) which deals with the
  1644
  case where a lease can be determined by notice by either the landlord or the tenant, at which event it
  "…shall not be treated as granted for a term longer than one ending at the earliest date on which it could be determined by notice."
  The point which my hon. Friend has put to the Committee is one which occurred to us but, so far, we have not found it possible to deal with it in the Clause in any way which would not leave this part of the Clause wide open to avoidance of tax.
  In view of what my hon. Friend has said we will certainly have another look at the matter; but I must in all frankness tell the Committee that, from the efforts we have made so far, it is fairly unlikely that we shall be able to find a way to meet my hon. Friend's point.
  Mr. Mitchison: I hope that no way out will be found. I have observed that on the Notice Paper is a not-selected Amendment to the Clause in the name of the hon. Member for Crosby (Mr. Graham Page)--in page 23, line 14. The speech of the hon. Member for Crosby would appear to bear a very close resemblance to that he would have made had that Amendment been selected. I suppose that that is one way of doing it. I find the hon. Member's proposal somewhat curious. I can understand treating a lease for a given term of years one way or the other—either for the maximum or minimum where there is an option to break —but I cannot understand the difference it makes whether it is the landlord who breaks the lease at the first possible opportunity or the tenant.
  I should have thought that for the kind of purposes we are now considering there can be no difference. I agree with the Financial Secretary that we are considering a matter relating to the three foregoing Clauses. The last two of them, if not the three, are obvious anti-avoidance Clauses. It is difficult, in those circumstances, to allow an Amendment to make a change on the lines suggested in the remarks of the hon. Member for Crosby. I should have thought that in an anti-avoidance Clause it was particularly unfavourable, and I trust that the Government will stick to their guns in this matter.
  8.45 p.m.
  These anti-avoidance Clauses are few in number. I am not referring to them

  1645
  in particular, but one of them, apparently, has a fault in it which is to be corrected. I hope that two things will be done: firstly, that they are not in any way weakened, either by an Amendment of the Clause we are discussing, which refers to them, or by any Amendment made to the anti-avoidance Clauses at a later stage; and, secondly, I hope that the Chancellor of the Exchequer, if he gets another chance to introduce a Budget next year, will take this business of anti-avoidance a bit more seriously than the Bill appears to take it. We get up from the Opposition benches year after year and protest against the insufficiency of and-avoidance provisions, and the game seems to be at present that when the nefarious practice becomes sufficiently widespread the Government introduce a Clause to prevent it happening. It has that effect and the avoiders simply do it in another way.
  Question put and agreed to.
  Clause ordered to stand part of the Bill.
  Schedule 5 agreed to.
  Clause 26 ordered to stand part of the Bill.
  Schedule 6 agreed to.

  Clause 27. — (COLLECTION OF OUTSTANDING SCHEDULE A TAX.)
  Question proposed, That the Clause stand part of the Bill.
  Mr. Mitchison: I should like an explanation as to what this Clause is about. The Government started the day quite well. They were to give us explanations on all sorts of things; we have had very few of them. We seem to be proceeding at too rapid a rate at present. We are not giving these matters the consideration which it is our duty to give them. This is not a sort of hopscotch race of the three Treasury Ministers with their legs bound together hopping along through this complicated Statute as fast as they can. They are taking off and putting on taxes. They are making people pay, and if they make a mistake the mistake may be an expensive one, and, more than that, it may, as appeared recently, be an unconstitutional one. Let us know what we are doing and what this Clause is all about.
  Mr. du Cann: I am only too delighted to give the hon. and learned Gentleman for Kettering (Mr. Mitchison) some short explanation of this Clause. Speaking for myself, and, undoubtedly, for my hon. Friend as well, I was a bit disappointed that it did not seem as if the Committee wanted us to explain some of the earlier Clauses. Some of them, I thought, were rather neat and, having gone to a great deal of trouble in preparing happy little speeches, one hoped to have the opportunity of using them.
  Mr. Mitchison: The hon. Gentleman offered to do this. It was up to him to do it. It was not up to us to dash into this foaming torrent of Clauses and try to stop the torrent on its way. It is his business.
  Mr. du Cann: What the hon. and learned Gentleman says is entirely right, but having spent a short and undistinguished period in the Navy during the war, I learnt never to volunteer for anything, even if I felt like it.
  If the hon. and learned Gentleman will be good enough to read HANSARD tomorrow he will find that I said at the beginning that we were only too ready to give an explanation in appropriate cases, and he will agree—to be serious—that the majority of these matters that we have discussed so very quickly are entirely straightforward. I would not wish him to think that we were treating him with any discourtesy.
  This Clause relates to Schedule A assessments made after the end of 1963–64 in respect of the tax for that year and previous years. The position is that although Schedule A assessments are normally made in the year to which they relate, some assessments are made later, for example, on a newly-erected house, because the facts are not known until subsequently. It is necessary to provide for that position and that is what this Clause does. I hope that the hon. and learned Gentleman and the Committee will think it an appropriate and proper provision to make in order to look after this slightly unusual situation.
  Mr. Mitchison: I feel sorely tempted to describe the Clause as fiscal Choctaw. I wonder whether the Treasury could sometimes consider settling down and

  1647
  doing a suitable exercise in making sentences as short as possible and using a short word instead of a long one in so doing. I am sure that if that were tried there would be a good result which would be more intelligible to the taxpayer who otherwise is tempted to suppose that this is a region the language of which he does not know, and in which he must make no excursion, paying his taxes rightly or wrongly without the foggiest notion of what it is all about.
  Mr. du Cann: I see that the hon. and learned Member is a disciple of Gowers, and so are we at the Treasury. I have every sympathy with him and have no hesitation in giving him the assurance for which he asks.
  Mr. Bellenger: I imagine that the assessments which the hon. Gentleman said would be made after 1963-64 would be few in number. It might well be that an occupier against whom the Inland Revenue would seek to recover tax—because it is recovered against the property and the occupier as a rule—could not recover the cost of the tax for which he might be liable. Do I understand that in these circumstances, if he has no right against his landlord to recover the tax, the Inland Revenue would abandon the claim?
  Mr. du Cann: I apologise for making this mistake a second time today. I can give the right hon. Gentleman similarly an unqualified assurance that that point will be dealt with, because the Clause specifically provides that where taxation is recovered from the occupier, in default of payment by the landlord, he is not required to pay tax which he cannot recover by deducting it from rent.
  Question put and agreed to.
  Clause ordered to stand part of the Bill.

  Clause 28.—(AMENDMENTS AS TO SCHEDULE B.)
  Question proposed, That stand part of the Bill.
  Mr. Mitchison: This Clause ought not to pass without comment. We have given Schedule A what I might call a full-dress State burial. This Clause seems to me to represent the disappearance of another little Schedule, perhaps to be buried in some paupers' sanctuary.
  1648
  But we must consider what is happening. To start with, the gap in the alphabet of Schedules will remain for years to provoke historians and economists into inquiries as to what on earth their forefathers were doing about Schedule B. When they come to search for what they were doing, how much will they really find? I am puzzled about what is to happen over Schedule B.
  I can see the words and the effects of the Clause, but what does Schedule B cover now? It covers woodlands not on a commercial basis and not dealt with under Schedule D. I have no doubt that it covers a number of other curious things, but I do not know what they are. When the Schedule disappears, what exactly happens? What will be the cash effect one way or another of the removal of Schedule B or of the effect of the amendments to it? Does it survive? If so, to what extent and to what purpose? We have had two unqualified undertakings in about the same number of minutes on the last Clause. Let us see whether we can beat that here and get three.
  Mr. Barber: I am sure that I shall be able to satisfy the hon. and learned Member completely. Schedule B will remain. It is not to be abolished. The Clause abolishes tax under that Schedule except, as the hon. and learned Member will see from the words of subsection (1), for commercial woodlands in cases where the occupier has not elected to be taxed under Schedule D. It also provides new machinery for determining annual value under Schedule D for commercial woodlands, and re-enacts in relation to land assessed under Schedule B the provision for taxation of income from easements which formerly applied to all land assessed under Schedule A.
  As the hon. and learned Gentleman well knows, Schedule B is charged in respect of the occupation, as distinct from the ownership, of land in the United Kingdom other than dwellinghouses or land used for a trade. It was the Schedule under which farming profits used to be taxed but, since the year 1949–50, all farming profits have been brought under Schedule D. This means that tax under Schedule B is now chargeable only on occupiers of gardens of over an acre, parklands, sports grounds, sand

  1649
  and gravel pits not run on a commercial basis, non-commercial woodlands, commercial woodlands where the occupier has not elected to be taxed under Schedule D, and few other limited classes of property such as slag heaps and local authorities' sewage farms.
  The charge is on an "assessable value" defined as one-third of the annual value, as determined for the purposes of Schedule A. There are now, I think, only about 30,000 items of property assessed under Schedule B, and the yield is not much over £100,000. So the cost of the abolition of Schedule B, except for commercial woodlands, is about £100,000.
  Mr. Mitchison: Is it worth keeping the poor thing—an attenuated wraith derived from some ancient enactment or another? Do we want it any more? I have here the Royal Commission's final Report—published eight years ago—of which paragraph 926 states:
  "… we are not satisfied that (save in the case of commercial woodlands) there are any grounds of principle which would justify the continued imposition of the Schedule B charge."
  There is another sentence:
  "In the circumstances, we recommend the abolition of Schedule B. Commercial woodlands would, of course. continue to be charged bat this might be effected under Schedule D…
  Then there is reference to other matters, but what the Commission said is quite clear. And why not? I should have thought that this was a case where the Government had no doubt hesitated to kill but certainly need not have strived officiously to keep Schedule B alive, which seems to be exactly what they have been doing.
  Whether or not commercial woodlands are assessed under Schedule B depends on a past election. I speak off the cuff, but I think that I am right in saying that in many of these cases, if the election has not been made it is now too late to make it. Whether that is so or not, the distinction between Schedule B assessment and Schedule D assessment of commercial woodlands was, I should have thought, in most cases nothing much worth preserving as that, and that the Government might have gone the whole hog and killed and buried the thing. Indeed, I thought for a moment that they had done so, but they apparently have not.
  1650
  The oddest collection of things emerged. There was something about easements. I do not know how much money one gets out of an easement, but I suppose that it is much about the same as, in some cases, one gets out of a house under Schedule A. If the house is small enough and the easement is large enough, that might be all right, but where is the logic in doing away with Schedule A and continuing easement?
  What do we tax when we tax an easement? What is the basis of assessment? When we assess an easement, what do we do with profit undrawn—is that also assessed under Schedule B? And what about these famous sewage farms? Is there not any other way of dealing with them? Are we to confuse the whole structure of the Income Tax Acts for the sake of a few easements and sewage farms, and commercial woodlands where the owner has not elected to be taxed under Schedule B?
  Surely this matter should be considered again. I know that it takes time for any Government to act on the Report of any Royal Commission, but this was not a heavyweight one. What is the advantage of beginning the alphabet with B instead of C?
  9.0 p.m.
  Mr. Barber: I do not think that this point is as simple as the hon. and learned Member for Kettering (Mr. Mitchison) has suggested. The option of taxing commercial woodlands under Schedule D or Schedule B will remain for the future. It can be exercised in the future in the same circumstances in which it could be exercised in the past. I realise that it is tempting to accede to the advice of Royal Commissions on occasion, but we must consider what the consequences of doing so would be. One consequence in this case would be that we should change the whole basis of assessment of commercial woodlands, and my right hon. Friend decided that, in the circumstances of this year, he did not wish to do so. That is the principal reason why Schedule B remains.
  Mr. Bruce Millan: Can the hon. Gentleman say why the Chancellor of the Exchequer decided that he should not make this change? The hon. Gentleman has said that the right hon. Gentleman decided to leave things as they were. Why?
  Mr. Barber: As the Committee will appreciate, there are many matters which have not been covered in the Bill, but we are making more changes this year than usual. If I were to give an explanation of every aspect of taxation which my right hon. Friend has decided not to change this year, I should take a very long time. My right hon. Friend, like his predecessors, considers the whole field of taxation every year. He did not think that, in all the circumstances, he should change the law relating to the taxation of woodlands.
  The hon. and learned Member for Kettering referred to easements. What I had in mind was subsection (3), which re-enacts for Schedule B lands the provisions which were formerly contained in another section of the Income Tax Act, 1952, a Schedule A provision which is now being repealed, for taxation under Schedule D of profits from payments for easements over or rights to use the land in question in so far as they exceed the assessable value of land under Schedule B. It is convenient now to have the provision in its place in Schedule B.
  This is only a drafting Amendment. We are doing what the hon. and learned Member for Kettering asked my hon. Friend the Economic Secretary to do a few minutes ago, namely, to try to make the Bill a little more intelligible, and it is for that reason only that we have included this provision.
  Mr. Mitchison: This is most unsatisfactory. We are told that the Chancellor of the Exchequer has considered this technical and somewhat difficult problem small though it is, with great deliberation. When the Financial Secretary is asked to give the reasons which led the Chancellor to come to his decision, he says, in a manner reminiscent of Louis XIV, who said, "I am the state", that he will not do so. The result is that we are left with this weird little schedule, hanging on by the skin of its teeth, nearly dead and buried but not quite, operating on a variety of small things, including the remarkable one of commercial woodlands, not assessable under Schedule D.
  Is it worth keeping this provision and disregarding the recommendation of the Royal Commission on a matter of
  1652
  this sort? Is it worth hanging on to this decaying peg something which used to hang on Schedule A, which is being abolished? It is obvious that this provision will have to go. I should not rate highly my powers of criticism of an Income Tax Act, but I would pay some attention to a Royal Commission's Report on a matter of this sort. I know that it takes about eight years to sink into the Government's head, but they have had eight years and I consider that long enough.
  Mr. Barber: I do not know whether what I am about to say will commend itself to my right hon. and hon. Friends, but I should point out to the hon. and learned Member for Kettering (Mr. Mitchison) and to hon. Members opposite that the whole question of the taxation of commercial woodlands was considered in years gone by by Lord Dalton, who, after careful consideration and, I believe, discussion in the House, came to the conclusion that the existing option as between Schedules B and 13 should remain. While that may not be a precedent which will commend itself to my hon. Friends, I hope that it will commend itself to the hon. and learned Gentleman.
  Mr. Mitchison: The Royal Commission reported in 1955. I do not carry all these dates in my head, but it would be interesting to know whether the Labour Chancellor of the Exchequer of those days had that Report before him. The abolition of Schedule A makes a difference and this seems to me to be the wrong moment to choose to keep Schedule B alive and to make this Amendment, hanging on to what used to be in Schedule A. It is not something which can be done by rejecting the Clause or something which can be done in five minutes, and, possibly, it will not be done this year, but I hope that it will be considered. It looks like a rather absurd bit of clinging on to relics and to venerating them.
  Mr. Barber: May I put it this way. We considered both the Report of the Royal Commission and the reasons which commended themselves to Lord Dalton. I put them in that order with no disrespect to him. As to the complete abolition of Schedule B, the hon. and learned Gentleman will, I am sure, agree

  1653
  that the important aspect to consider is not so much whether the Income Tax Acts would look tidier without Schedule B, but what the effect of complete abolition would be on the taxation of certain profits. It was that to which we directed our attention.
  Question put and agreed to.
  Clause ordered to stand part of the Bill.

  Schedule 7.—(ASCERTAINMENT OF ANNUAL VALUE.)
  Question proposed, That this Schedule be the Seventh Schedule to the Bill.
  Mr. Mitchison: I want to know a little more about the Schedule. Am I right in supposing that this Schedule, which lays down the basis for the ascertainment of annual value, produces a basis of valuation similar to that which used to exist both for Schedule A purposes and for arriving at gross valuations for rating purposes? It looks to me to be exactly the same thing. If that is the case, the Government should tell us that the Schedule A basis of assessment is being kept in the cases to which this Schedule refers, which include, for instance, the estate eases that we considered so carefully under the Fourth Schedule
  Mr. Barber: The rules laid down in this Schedule are the same as those for ascertaining gross value for the purposes of valuation for rating in England and Wales. The Schedule lays down the rules for the ascertainment of annual value for Income Tax purposes under Schedule B as it applies to commercial woodlands to which we have just been referring; under Schedule E as it applies to the value of accommodation provided for the holder of an office of employment; and to claims for maintenance relief under Schedule A for 1963–64 or to Case VIII for 1964–65 and subsequent years where the annual value of an owner-occupied property has to be brought into the computation as a condition of allowing relief for the maintenance expenses against the rents of the surrounding estate. These are the circumstances which are dealt with in Clause 20 and Schedule 4.
  The hon. and learned Gentleman is quite right in thinking that, with commercial woodlands in general, the new
  1654
  method of ascertaining annual values under Schedule B is not expected to result in any material change of actual amounts of Schedule B assessments.
  Mr. Graham Page: On reading Schedule 7, it looks very much as if annual values under certain parts of this Bill will be the same as rateable values. If that is the case, it is rather shocking, because the results will be about three and a half times to four times as much as the present annual values. Where this is to apply, particularly where there must be an election under Schedule 4, I wonder what the point will be if the amount which can be set against it is the new annual value.
  Mr. Millan: I understood that Schedule A values were still on the 1936 or 1937 basis. Surely, if we are to bring annual values up to the 1963 or a subsequent year basis we cannot get the same result as we would by taking Schedule A values as they are at present.
  Mr. Bellenger: Another point is that the recent revaluation for rating purposes is putting rating values extremely high. Part of the purpose of doing this was to reduce the rate poundage so that the rates paid by the ratepayer would not be so excessive compared with previous rates. We know, however, that it is excessive —greatly excessive in many cases—compared with what the ratepayer has hitherto paid. If that basis is to be taken for the value of an hereditament, particularly under Clause 45, in cases where the occupier is in the house or hereditament by virtue of employment, it seems to me that the greater burden on the taxpayer under the present rateable values will be considerable.
  Mr. Barber: Obviously I cannot anticipate Clause 45. But I made it clear earlier that Schedule 7 applies not only to Schedule B but to Schedule E, since it applies to the value of accommodation provided for the holder by reason of his office or employment. It may well be, in certain circumstances, that the value as determined by Schedule 7 is higher than the existing, out-dated Schedule A valuation, and it may be argued whether this is right or wrong in relation to the charge under Clause 45.
  The hon. Member for Glasgow, Craigton (Mr. Millan) expressed doubt about the conclusions I have drawn con-

  1655
  cerning the valuation of commercial woodlands under Schedule B. He suggested that if the new valuation is different as laid down in Schedule 7, then the valuation of woodlands under Schedule B will be higher than in the past.
  The answer is that annual values on the old basis have not kept pace with the general increase in property values of woodlands, and that these assessments in respect of commercial woodlands will normally be left undisturbed, certainly while conditions remain as they are. It was for this reason that when I moved the Second Reading of the Bill I pointed out that in general the change was not expected to result in any material difference in the actual amounts of Schedule B assessments of commercial woodlands.
  9.15 p.m.
  Mr. Graham Page: I am sorry to press my hon. Friend again on this, but it is serious. If an owner is to be entitled to make an election as to whether he goes on a five-year basis for maintenance or takes the actual right away, he will be left in doubt about what is to be the figure against which he can set his maintenance and repairs claim. Apparently, the net annual value figure is to alter at the moment of the passing of the Bill. The valuation for Schedule A will go and Schedule 7 will be substituted, but the owner will not know what that figure will be.
  Mr. Barber: Under which Clause is there provision for the election to which my hon. Friend refers?
  Mr. Graham Page: In the margin to Schedule 7 it is said that Schedule 7 applies to Schedule 4. In Schedule 4 there is the machinery for the election, particularly in paragraph 7. If my hon. Friend tells me that the Schedule does not apply at all to the question of election to carry on on the five-year basis, I am happy, but I think that the reference to Schedule 4 should then be deleted from the margin of Schedule 7.
  Mr. Barber: As I understand it, Schedule 4(7) gives an option to claim maintenance on a five-year average for this transitional period. I do not think that there is any doubt or misunderstanding about that. However, in Schedule 7 we are concerned only with how the
  1656
  annual value is ascertained for the various purposes to which I have been referring. I cannot see that there is any inconsistency in the two provisions. All I can tell my hon. Friend is that when I looked at paragraph (7) originally, which was some time ago, it seemed to me that there was an advantage in having an option to claim maintenance on a five-year average for the transitional period. I think that this is so.
  Mr. J. T. Price: The Committee is right to pause for a moment in its consideration of Schedule 7. I am not so much concerned with the theoretical and marginal arguments about commercial woodlands, but I am concerned with the much more important impact of the Rating and Valuation Act, 1961, on house property. Millions of people are now finding that rateable values have been increased by very large amounts, 250 to 500 per cent. in some cases.
  Does the Financial Secretary remember that when the Rating and Valuation Act was being considered in Standing Committee, a Committee of which I was a member, so that I can speak with some knowledge of what took place, we strongly pressed the Minister then in charge about what would be the likely outcome of bringing property valuations, including house property, up to what were called present-day values in view of the grave housing shortage and the collapse of control under the Rent Act? Those are factors which the Treasury likes to brush aside. Until the reform of the law 10 or 15 years ago, rating and valuation matters were for local decision. They were fixed by valuation courts which functioned in the localities.
  Now the whole of the valuation machinery is under the control of the Treasury. When the Minister was challenged on the possible impact of the new Rating and Valuation Act, under pressure from my hon. Friends and myself, he took certain powers to protect himself and his Government against the political repercussions of millions of people finding themselves faced with greatly increased assessments. He took powers to give a remission if the valuations produced hardship. There are powers in that Act under which the Minister can grant a partial remission of the full impact of the rateable value.

  1657
  So far the Minister has not seen fit to avail himself of these powers. No doubt as we get nearer the General Election and the public begin to realise more intensely than they do now just what has hit them the Minister may be forced to use these powers. In other words, he may be forced to reduce the assessable basis for a temporary period up to five years to assauge and mollify the public criticism which will be hurled at his head.
  The Financial Secretary is no doubt aware of this, and I do not wish to be unfair to him or to bore the Committee with a recital of what has happened, but perhaps I might direct his attention to another aspect of the problem, and I hope that I shall not be off beam in raising these general considerations. This fixes not only the basis of the rates to be levied by the local authority on the basis of the new valuations, but the basis of the tax payable under Schedules B and E.
  I am not much concerned about the type of things that fall under that, but I remind the hon. Gentleman and the Committee that when we say,
  "The annual value shall be taken to be the rent which might reasonably be expected to be obtained on a letting from year to year."
  this is the theoretical notion behind the Schedule A tax which I had the honour of criticising in the House, perhaps to the discomfort of some of my hon. Friends who have purist views on this, and this theoretical notion goes haywire while there is a shortage of houses. It is not possible to apply theoretical considerations to valuations if there is no free market in housing.
  This is the sort of thing that is being built into the new legislation to give effect to the impact of the 1961 Act without giving any consideration to the fact that there may be a sitting tenancy, with the result that the valuation of the house, as decided by the Ministry's officials, will not be a true valuation, because a true valuation can be arrived at only if there is a free market and there is no control over the tenancy.
  I think that we are entitled to a fuller explanation of what is behind this and how the Minister proposes to deal with the situation that will arise now that Schedule A is to he discarded under the proposals of this Budget. How will the Minister apply the new valuations to
  1658
  people who were hitherto subject to Schedule A? How will the Minister apply the new valuations to Schedules B and E without taking into account some of the things that I have mentioned?
  Mr. Barber: I think that the hon. Member for Westhoughton (Mr. J. T. Price) has, with respect, misunderstood the way in which this Clause will operate, and also the extent of its operation. The Clause is concerned with the ascertainment of annual values, first, for the purposes of Schedule B as it applies to commercial woodlands. I have already said that, as far as we can see, this is not expected to result in a material change in the annual amounts of Schedule B assessments on commercial woodlands. I assume that the hon. Member is not particularly concerned about that.
  The next matter concerns claims for maintenance relief under Schedule A where the annual value of an owner-occupied property has to be brought into the computation as a condition of allowing relief for the maintenance expenditure against rents of the surrounding estate. I do not believe that the hon. Member was in the Chamber when we discussed this sort of case earlier this afternoon. An example is the case of a mansion house and surrounding property, all of which has been assessed as a single unit. If we did not make provision for dealing with that case the owner of the house, provided that it, together with the surrounding land, is in his occupation, would suffer a significant loss—in other words, a tax increase—unless we had taken steps to deal with the situation.
  Knowing the hon. Member—with whom I once spent a night in the desert a few years ago—I do not suppose that he is specially concerned with the taxation of mansion houses. All that remains are the provisions, of considerable importance, which are contained in Clause 45, and which deal with Schedule E, concerning the valuation of accommodation provided for the holder of an office of employment. In other words, Clause 45 deals with the case where a house is provided for, say, a director, a senior executive or an ordinary workman, either rent-free or at a rent less than the annual value.

  1659
  In those circumstances, bearing in mind that the tenant who lived in his house rent-free or at an uneconomic rent in the past was liable to tax under Schedule A, and had to pay tax under that Schedule, he has to be assessed to tax in some way, as Schedule A is being abolished.
  When we deal with Clause 45 we can consider whether the new basis of taxation under Schedule E, replacing the Schedule A basis, is reasonable. I cannot anticipate Clause 45 to a greater extent than that.
  Mr. Bence: Will the hon. Gentleman explain paragraph (2), which reads as follows:
  "Section 6 of the Rating and Valuation Act, 1961 (adjustment of gross value by reference to provision of or payment for services etc.) shall apply for the purposes of the foregoing paragraph, and in relation to land in Scotland …"
  and so on? Scotland has a different rating and valuation system. It is under a different Act of Parliament. Will the Financial Secretary explain why properties in Scotland should be assessed under an English law? As I understand it, the assessors for rating and valuation purposes in England and Wales are the Commissioners of Inland Revenue, whereas Scotland has county assessors on the advisory council to the Secretary of State for Scotland.
  We do not have the Lord Advocate here, but I have no doubt that the hon. Member has been briefed from the Lord Advocate's Office in Edinburgh, and have no doubt that he can give the Committee—and also the electors of Scotland—an assurance that as a result of the operation of this paragraph Scottish property owners will not have to pay far more tax under the new valuation than under the Scottish Rating and Valuation Act. We who represent Scottish constituencies—at least on this side of the Committee—are entitled to know the answers to these questions.
  9.30 p.m.
  Mr. Mitchison: I agree with what has been said by my hon. Friend the Member for Dunbartonshire, East (Mr. Bence). This is a case of applying English legislation to Scotland by a side wind. If we had a Scots Law Officer in the Committee he could have seen to the matter. It is applying the provisions of what will
  1660
  be a Section of an English Act to land in Scotland as if the legislation extended to the whole of the United Kingdom. That is a very sloppy way of doing things. It required at least one Act of Union to bring the two countries together. For the Treasury now to suppose that English legislation can be applied to Scotland in this manner is not only an insult to that country but it will be a fruitful source of confusion when the legislation comes to be worked out. For some purposes we shall have to look at the English Act and for others we shall have to look at the Scottish Act, and the only safe place to live will be on the Border when one will be able to hop about from one side to the other without much difficulty. That is a situation which ought to be attended to.
  There is a serious point which arises here, and I have put this matter to the Government once or twice before. I will put it again. It seems to me that what the Government are trying to do is value land for the purposes which the Financial Secretary explained to us on the same basis as valuations for rating purposes. I am getting more and more obstinate and it will now require a lot to convince me that that is right. If it be the position, one must remember a little of the history. What has happened is that until rating valuation was changed from what I think we might call the pre-war hypothetical value to the present current value basis—I am talking about dwelling houses—the Schedule A valuation and the valuation for rating more or less went hand-in-hand in practice though possibly not technically so.
  Then the assessment for rating was raised to the current value, and that has been a bit of a shock to some people, largely because they got their assessments before they knew what the poundage Was to be. But it has caused a lot of feeling and a great deal of indignation. Poujadists have popped up and objected to both local and central Government in any and every form, and we do not want to encourage them too much. When the change was made in rating the Government for the time being froze the Schedule A values and if I get the figure right the freezing is now thawing out, and they are to be valued at a proper percentage value on the same basis as for rating. This makes for some difference.

  1661
  I refused to be pushed into commercial woodlands like this, to wander about in a jungle of profit-making spinneys and thickets and so on. I am more interested in the Schedule E taxpayer who is taxed on the house which he occupies for the purposes of his job and who knows the position. He has to pay whatever the tax is and, therefore, it seems to me that in his case where the valuation is an actual taxable item and not, as in some other cases, a deduction one has to look rather carefully at the matter. He is to have that part of his assumed income pushed up sharply. After all, this man is in some ways like the Schedule A owner-occupier. We have been told that here is a man who has had to pay on the value of a house without actually getting the money on which he is assessed for tax purposes.
  I hope I am right; I shall be corrected if I am wrong. I am thinking of the Schedule E taxpayer who has to pay in respect of a house. One does not wish to invite too many nasty comparisons between the man now losing his Schedule A liability and the one who finds that his house, the same object from the taxation point of view, is being increased in value. So far as valuation is concerned, this has had some practical effect. The Government put into the Rating and Valuation Act provisions for softening the wind to the house occupant. Power was given to ease off during the first five years the additional burden it was expected that he would have to carry.
  Taken over the whole country it is arguable how serious the additional burden has finally proved, but one must admit that there have been hard cases. One wonders whether as this additional burden is put on in this way on the Schedule E employee there ought to be something to help him on the same sort of lines as help might have been given—and power was taken to give it—in respect of rating valuations. My hon. Friend was quite right in pointing out this difference and the Government ought to consider it.
  The present position is that the Schedule A valuations are frozen and new rating valuations have actually been made by the Inland Revenue so that we get these two parallel but very different figures. No doubt if the Inland Revenue were called upon to value the same thing
  1662
  twice on the same basis it might arrive at the same result. All the more ridiculous is it that we should not recognise that in the statutes and make it clear that the same valuation will serve for both purposes. If we do not do so we might get into trouble.
  I must not anticipate what comes later in the Bill, but there are provisions about appeal. Those provisions relating to Income Tax in this case, are quite different from the provisions relating to appeal in connection with rating valuations. Therefore, unless the Inland Revenue valuers take some rather arbitrary line we shall get a great deal of divergence owing to the human divergencies between the views of the appeal tribunals concerned in the one case with tax and in the other with valuation. This muddle is unnecessary. We are trying to arrive at the same figure for the same thing. There is no reason whatever to do it twice and make things worse by providing an opportunity for a divergence year by year, which is sure to arise in a number of cases. I do not like this jungle of possibilities. The Government ought to think about this question as partly one of justice to the taxapayer and partly one of not unnecessarily overburdening an administration which has quite enough to do already.
  The election in the Fourth Schedule is not a general election but a collection of local elections. I am afraid I misled the hon. Member for Crosby (Mr. Graham Page), who was on his feet at the time, by referring to the wrong election. The right election is not the one in paragraph 7, but the one in the preceding paragraph, in line 9 on page 71. If we insist on having local elections all over the place we must abide by the confused result which sometimes comes from them.
  Mr. Barber: May I try to deal with the three or four points which have been raised since I was last on my feet?
  In the first place, the hon. and learned Member for Kettering (Mr. Mitchison) said that he was concerned about the person who had to live in a house because that was necessary for his job. Before you came into the Chair. Sir William, I explained at least twice that I could deal with the point satisfactorily only by anticipating Clause 45, which is

  1663
  concerned with the Schedule E taxpayer—the very limited number of Schedule E taxpayers who live rent-free or in houses at rents below the actual value.
  In respect of the person about whom the hon. and learned Member is concerned, the charge will extend only to people who are in law occupiers, and this term excludes an employee such as a bank manager who must live on bank premises or a farmworker in a tied cottage. These are the people about whom the hon. and learned Member is particularly concerned.
  The hon. Member for Dunbartonshire, East (Mr. Bence) said that he was concerned with the possibility of a further increase in taxation for house owners in Scotland. The only house owners to whom this Schedule applies are the owners of mansion houses. Nobody else in Scotland is involved. It concerns only the owners of mansion houses who live on an estate which is assessed, and has been assessed in the past, for Schedule A tax as a unit. In view of the way in which we are dealing with these individuals, I think that on the whole we have dealt with the matter fairly. I think that if the hon. Member looks at the debate on this matter which we had previously and reconsiders the point, he will feel that we have dealt with it fairly.
  The hon. and learned Member asked whether the valuation for the purposes of these various Clauses as laid down in Schedule 7 would be the same as for rating purposes. He thought that it would be rather odd if we had people going round valuing for the purposes of this Schedule and also for rating, and that there might be natural human divergencies, because valuation is not an exact science, as I have learned from a number of letters which I have received from hon. Members recently.
  In determining annual values for the purposes of the Bill the inspector of taxes and the general commissioner for the division in which the land is situated, who under Clause 30 constitute the appellate body in the case of an appeal, will apply the principles laid down by English law for the determination of rating assessments, but they will not be bound by the figure in the rating valuation list, which will necessarily have been arrived at on
  1664
  the facts of a year earlier than the year to which the Income Tax assessments relate. I see the hon. Member for Sowerby (Mr. Houghton) nodding his head in assent. He knows that in practice the rating assessment would normally be followed unless before the next revaluation it fell out of line with current values. There is that minor difference.
  Mr. Houghton: Which it could easily do. If the rating revaluation is five years back and the valuation in the quinquennial year is two years old to start with, obviously there could be substantial changes in the years between the fixing of the valuation for rating purposes and the true valuation for the purpose of determining the amount of payment in kind in a number of cases to be assessed under Schedule E. Part of our difficulty is that we are looking at Schedule 7 without realising that Clause 45 is as much an anti-avoidance Clause as anything else.
  Mr. Barber: I do not know whether I will go as far as that. I did not wish to anticipate the discussion which we shall have on Clause 45 or to be provocative to any section of the Committee.
  9.45 p.m.
  The last question I was asked, by two hon. Members, concerned the change in the law as it applies to Scotland in paragraph 2 of the Schedule. Although rating law, as I understand it, in Scotland and in Northern Ireland, which is also referred to, differs in certain respects from rating law in England, the principles for determining income values will be the same throughout the United Kingdom. This is a departure from the law and the practice which has hitherto prevailed under Schedule A, because in Scotland the figure in the valuation roll was normally regarded as conclusive for Schedule A purposes and in Ireland, I am told, the rating assesement was conclusive by Statute. Under Section 19 of the Finance Act, 1957, the figures were frozen at those in force before the Scottish revaluation of 1961 and the Northern Irish rating revaluation of 1957, pending a decision on the future of Schedule A generally.
  The definition of gross annual value in Section 6 of the Rating and Valuation Act, 1961, referred to in paragraph 2 of the Schedule is, I can assure the hon. Member for Dunbartonshire, East, not very different from the English definition.

  1665
  With that assurance, I hope that I have answered the various points which have been raised in a debate which has been quite a long one and which started with a minor reference to the taxation of commercial woodlands. If the Committee will not think that I am being too corny, I hope that I have done something to enable us to see the wood for the trees.
  Question put and agreed to.

  Clause 29. — (CASES I AND II OF SCHEDULE D: AMENDMENTS IN RELATION TO LAND.)
  Mr. W. Clark: I beg to move, in page 25, line 18, at the end to insert:
  Provided that the deductions which apart from the provisions of this subsection would have been made in respect of the annual value of the said land in computing profits or gains under Case I or Case II for the years 1963–64 and 1964–65 shall be aggregated and deducted as if the aggregate sum were an expense of the trade, profession or vocation for a period commencing on the date on which the said land ceased to be used for the purposes of the trade, profession or vocation and equal in length to the period to which the annual value so aggregated related.
  This is another and very important point which arises only, I hope, because the Government have overlooked it. Because of the abolition of the old Schedule A, some business men will be penalised. Put briefly, as the Clause is drafted, it is clear that no deduction for net annual value of owner-occupied business premises may be made for 1963-64 onwards. Hon. Members will know that, when business profits are computed, the net annual value of any premises that have been occupied and on which Schedule A has been paid can be deducted from the profits.
  There is an inequity here. Where net annual values have been increasing, or where the property has been purchased during the basis year of the accounts which have determined the year of assessment, the inequity is that the owner of the business will not get the full amount of relief against his Schedule D, Case I, profits, in connection with the net annual value.
  At this hour of the evening, after such a lengthy debate on Schedule A, with all its ramifications, I should not like to take up the time of the Committee in giving examples. It is regrettable that back benchers are not able to have their
  1666
  examples circulated in the OFFICIAL REPORT. If my hon, and learned Friend the Solicitor-General is to reply, I can prove to him arithmetically that there is an inequity here. I hope that the Government will look at it, because I am certain in my own mind, and I hope I am right, that in abolishing Schedule A the Government did not intend to create this anomaly by which business men will suffer.
  Mr. Diamond: I rise only to ask the hon. Member for Nottingham, South (Mr. W. Clark) to be good enough to explain what his Amendment is intended to mean. Some of us have difficulty in understanding the Bill, let alone the Amendment. In any case, I do not think that the hon. Member formally moved it.
  Mr. Clark: I am sure that when the hon. Member for Gloucester (Mr. Diamond) reads the OFFICIAL REPORT tomorrow he will note that I said at the beginning of my remarks "I beg to move" and then used the phrase "the words on the Order Paper." I could have read the words out to the Committee, but I thought that it would save time if I moved the Amendment in that way. I am delighted to hear that the hon. Member for Gloucester is confused by a Bill. To be frank, I am confused not only by the Bill but by some of the Amendments I am trying to move.
  I thought that I had explained that my Amendment is merely designed—and I do not claim any special responsibility for its looseness or bad drafting—to clear up one matter. Since the Government have given sympathetic consideration to a number of Amendments during the Committee stage I hope that that is indicative of the fact that they are not too worried about draftsmanship but are more concerned with the spirit and principle of Amendments. Naturally, if the Government Front Bench accept the spirit of an Amendment they can get the Parliamentary draftsmen to further complicate the matter at a later stage.
  In the Amendment I am trying to prevent an anomaly. Where one gets an increasing net annual value for business premises or where business premises have been acquired in the last two years, the business man will not be able to take into full account from his Schedule D profits the total net annual value that he has paid. I hope that my remarks have

  1667
  not confused the hon. Member for Gloucester. I see him listening to me with even greater interest than before and that is some encouragement. I hope that the Government have taken the point of the Amendment and will accept the spirit of it.
  Mr. R. Gresham Cooke: There is an injustice here and I was surprised to hear about it. It seems that now that Schedule A is being abolished the annual value accrued last year and which one would have got deducted against one's Schedule D this year, will not now be deductable. I understand that to be the case and I have great pleasure in supporting the Amendment.
  Mr. Bellenger: Like other hon. Members, I could not quite understand the remarks of the hon. Member for Nottingham, South (Mr. W. Clark) when he first moved his Amendment. Is this not a case where the owner-occupier of business premises was allowed to deduct the net annual value from his Schedule D profits, but he had already paid Schedule A tax? Was it not rather like taking money out of one pocket and putting it into another? I may be wrong, but I do not think that the owner-occupier was exonerated from paying Schedule A tax and, for that reason, I suppose that he was allowed to deduct it from his Schedule D profits.
  Mr. McMaster: There would appear to be a substantial cause for grievance. I do not pretend to understand this matter as fully as some of my accountant friends, but many representations have been made to me by business friends and accountants in my constituency who say that they have cause to worry about the provision. Since my own understanding of the matter is limited, it may assist the Committee if I read a passage from one of the letters I have received rather than try to interpret the correspondence in my own words. It states:
  "Previously Schedule A tax paid on premises owned and occupied for the purposes of a trade has been regarded as a payment on account of the trader's liability, because the Schedule A assessment has been a deduction in computing the liability of his profits under Case I and Schedule D."
  The following passage may be of assistance to hon. Members:
  1668
  "The effect of Clause 29(1) is to deprive traders of the right to deduct their Schedule A assessments for the year 1962(63 and in most cases, depending on the accounting date, for a proportion of 1961/62."
  It is on the following part of the letter that I should like an answer from the Treasury:
  "The hardship does not arise until the premises cease to be used for the purpose of the trade and the Amendment is designed to put the trader in the same position as he would have been if Schedule A had not been abolished for owner-occupied business premises."
  The Solicitor-General: Clause 29, to which this is an Amendment, deals with amendments to the computation of business profits under Cases I and II of Schedule D which are required in consequence of the new system of taxation on real property. This is consequential to that extent.
  I agree with my hon. Friends, who have raised this matter in this Amendment, that there appears to be a problem here as the Clause is at present drafted, and an inequity could arise. The Amendment deals with the question of the deduction to be given in computing the trade profits for the Schedule A assessment on the trade premises. Hitherto, the trader, who is also the owner, has paid tax on the annual value under Schedule A and has been entitled to deduct the annual value in computing the profits for assessment under Schedule D.
  Now that Schedule A is abolished Clause 29 provides—and this is one of the consequential provisions—that there shall be no deduction for annual value in computing trade profits. That applies in 1963–64, and therefore he cannot deduct the Schedule A tax for 1962–63 in computing the profits assessed for 1963–64; although in most cases the Schedule D assessment on profits is in fact based on 1962–63. I accept that there is a problem here. Whereas in most cases this may produce a proper result, nevertheless, I think that this is a matter that needs considerably more study.
  My hon. Friend, who spoke with the voice of Esau, accepted, I think, that here was a problem for the business community, but that the Amendment itself is not satisfactory for reasons which I think are certainly apparent. It would be

  1669
  too wide. It would give relief irrespective of the circumstances which existed when the property was acquired. There would be no inequity in certain cases which would fall within the provisions of the Amendment, but it would not deal with the inequity which it appears could arise when a trader acquires property on a preceding year basis and disposes of it on the same basis. This has the result of his paying Schedule A tax for so many years and receiving a Schedule D deduction for so many years, less one. He would be the sort of person who, because of the abolition of Schedule A, would not be in a fair position having regard to what we are attempting to provide in the Bill.
  Therefore, I would say that this is an Amendment which I am glad has been moved. This is a matter which had been exercising our attention before my hon. Friend raised it. It is a point which we are grateful to the Committee for bringing to our attention, because in a major change there are so many of these points and it is important that they should be seen and studied in Committee. I therefore give the assurance that the purpose of the Amendment will be carefully considered before the next stage of the Bill.
  10.0 p.m.
  Mr. Diamond: I do not think that we can leave matters as easily as all that, because more than one strand of thought has emerged in this short debate. The Amendment which the hon. Member for Nottingham, South (Mr. W. Clark) was so coy about explaining when he introduced it seeks to deal, judging from his speech, with two sets of circumstances only which, on a certain point of view and a certain approach might conceivably be held to be somewhat inequitable. The two circumstances are the curious circumstance of the increasing net annual value of Schedule A, so that one will have paid on a high figure and have a deduction on a low figure, and, secondly, the unusual circumstances of having acquired the property immediately before the assessment of Schedule A, and the property being acquired in a basis year and not in the year of assessment.
  But these were two special cases, whereas there is a general misunderstanding about an alleged inequity under the Clause, to which misunderstanding the hon. Member for Twickenham (Mr.
  1670
  Gresham Cooke) gave voice. He is right in saying that he has had representations. Many of us have had representations, and they have been based on the simple fallacy that because Schedule D assessments are based on the preceding year concept, and the basis of assessment is not the actual product but nevertheless the figure which the profits are deemed to be for the purpose of assessment, people confuse what a person has actually made in a previous year with the basis of assessment. Accountants will understand that the basis of assessment is something quite different from the actual profits of the year.
  The Government have themselves, and themselves only, to blame for the general misunderstanding that has been caused in the business community by this Clause and a number of other Clauses, all of which misunderstandings they could have avoided if they had not been so obstinate and, if I may say with deference, pigheaded in their continual refusal to do something which would help everybody and cause themselves not one iota additional work.
  I refer to the simple request made time and time again by my hon. Friend the Member for Sowerby (Mr. Houghton) and others of my hon. Friends that there should be some explanatory memorandum when we are doing something as complicated as this. I repeat "no iota of additional work" because we have been told with authority by a Government spokesman that such an explanatory memorandum exists, or is being prepared and will be circulated to everybody concerned to make clear what the provisions of the Schedule are. The whole machinery will stop unless this is done. Nobody outside the House of Commons, and precious few inside, know and understand the totality of these provisions with regard to Schedule A.
  Why on earth, therefore, do the Government, when they go to the trouble of preparing an explanatory memorandum not let hon. Members have it? The Finance Bill is virtually the only Bill which is not prefaced by an Explanatory Memorandum. Any other Bill, and most are infinitely simplier than the Finance Bill, has an Explanatory Memorandum. The Memorandum is not the law but it is an indication of what is intended. Here, where we have these complicated

  1671
  provisions, the Government dig their own grave as hard as they can. I should be the last person to object to their doing so, were it not for my concern that there should be the best possible relationship between the tax gatherer and the taxpayer, which is not established by refusing to let us have an explanatory memorandum. I have made my point, and do not wish to underline it further. It has its effect with regard to the misunderstanding on this Clause, and many of us have had the same kind of complaint as that voiced by the hon. Member for Twickenham.
  I was not absolutely clear from the Solicitor-General's comments what was in the Government's mind. What I am absolutely clear about is, if I may say so with deference to the Financial Secretary that what he said during the Second Reading debate was, curiously enough, utterly and precisely correct. He said of Clause 24:
  "Subsection (1) provides that from 1963-64 onwards the annual value of owner-occupied business property shall not be allowed as a deduction in computing profits. The reason is that there will be no actual outgoing and that deduction will no longer be balanced by a Schedule A assessment." — [OFFICIAL REPORT, 6th May, 1963; Vol. 677, c. 46]
  That is absolutely right. Just because we are to pay for a number of years Schedule A tax as compared with Schedule D, it does not at all affect the situation.
  What has happened up to now is that one calculates one's Schedule D profits and, because one will pay part under Schedule A, it is right that that part should be deducted from the part under Schedule D. One pays one's total amount of tax on total profits—partly under one Schedule and partly under the other—the totality being the tax on the total profits one has made. Nothing could be fairer or more just than that, or more simple, but because we stop one of these we have to stop deducting that one from the total. If we are no longer taxed under Schedule A, we can no longer deduct tax under Schedule A from Schedule D, because one has not paid any under Schedule A. We must make that clearly understood.
  What has happened is that because Schedule D is based on a year previous to a year of assessment, and because,
  1672
  therefore, Schedule D tax in a year after Schedule A has ceased may be based on the profits of a year during which Schedule A was paid, a very natural confusion arises. Unless the Government explains this in an Explanatory Memorandum, it creates a lot of misunderstanding, a lot of friction, a lot of difficulty for inspectors of taxes—whom I should have thought the Government would wish to help, and not to hinder—and a lot of difficulty for accountants, who try to help in the collection of tax —reasonably; not too much, but a proper amount. I am sorry to underline this so much at this stage, but neglect of this sort is something against the interests of the Revenue and against the interests of the Government, and it causes quite unnecessary trouble for all of us. It would not have arisen now had not the Government been as obstinate as they have been in refusing to get us an Explanatory Memorandum.
  I recognise that in the curiously limited cases where we have Schedule A with the net annual value rising considerably between the basis of assessment and an actual year there seems to be the possibility of an inequity—and in the other very limited case—but they are two very limited cases, indeed, and we should want to look very carefully at the Amendments the Government say they may wish to introduce in order to see that there is complete equity that is to say, that a business taking account of the total tax paid under Schedule A and Schedule D over the whole of the life of the business—the whole of it, not only the last two years but over the whole of the life of the business—was paying neither more nor less than it would have paid but for this particular change. It is often the practice to make the case by looking purely at the current year when one is switching from one basis to another. In order to see whether there has been complete equity, one has to go back to the start.
  I know what the Amendment seeks to do. I am unable to say whether it will achieve its object. The Solicitor-General thinks that it will not. He is not sure whether the Government know what they want to achieve. We shall look very carefully at what the Government produce when it is produced.
  The Solicitor-General: The Government know what they want to achieve: they want to achieve equity. I think that the points raised by my hon. Friend the Member for Nottingham, South indicate that there is a problem. and therefore I have given the undertaking that we will examine it.
  Mr. W. Clark: In view of what my hon. and learned Friend has said, I beg to ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Question proposed, That the Clause stand part of the Bill.
  Mr. McMaster: I should like to follow up the last remark of my hon. and learned Friend the Solicitor-General that the Government's aim is to achieve equity. I should like to raise a small point which arises from the Amendment which some of us tabled but which has not been selected relating to the word "occupied" in line 33 of subsection (3). I should like the Government to consider before Report whether "occupied" equitably achieves the purpose of the Clause and whether it would be better to substitute the words "in use"
  There are many premises which are owned, for instance, by breweries or petrol companies on which a premium has been paid but which are not occupied by the person who paid the premium. Therefore, in such cases, the person who occupies the premises and uses them for the purposes of trade will not qualify for the benefit which is restricted by the use of the word "occupied" in subsection (3). Therefore, on the ground of equity, I should like my hon. and learned Friend the Solicitor-General to consider whether this word is reasonable.
  The Solicitor-General: I will certainly look at the point which my hon. Friend has made. There certainly seems to be a case, in a limited sense and in a limited field for closer examination. I will examine this point when I examine the other points on the Clause which I have undertaken to examine.
  Question put and agreed to.
  Clause ordered to stand part of the Bill.
  Clause 30 ordered to stand part of the Bill.

  Clause 31.—(DEDUCTIONS IN RESPECT OF TITHE REDEMPTION ANNUITIES.)
  Question proposed, That the Clause stand part of the Bill.
  Mr. Mitchison: What is the Clause about, and why only five-sixths?
  Mr. du Cann: I was hoping that the hon. and learned Member for Kettering (Mr. Mitchison) would ask that question, because I am extremely interested in this subject. I remember so well going to a dinner at which Lord Monckton was the principal guest. This was at the time when he was at the Ministry of Labour. He had spent the whole day in conference and had his most excellent expert Civil Service advisers at his side. Every time that he felt like speaking, they pulled his sleeve and said, "I do not think I would intervene just now if I were you, Minister". He said, Coming to this dinner and having the opportunity to speak is something that I have been looking forward to all day".
  10.15 p.m.
  I would not go quite as far as that, but I am asked "Why five-sixths?" I should be happy, if the Committee wishes, even at this late hour, to retail the long history of tithes. That I will not do. I simply say that Clause 31 preserves the right of an owner-occupier of land charged with a tithe redemption annuity to relief from tax on five-sixths of the annuity.
  I am asked why. It was the amount originally fixed by Section 13 of the Tithe Act, 1936, as a conventional measure of the interest element in the annuity. Unless a general figure of that sort were chosen, obviously there would have to be a large number of specific calculations year by year. It was thought convenient at that time to take a single figure of that sort. The process is being continued in the Clause.
  Question put and agreed to.
  Clause ordered to stand part of the Bill.

  Clause 32.—(INTERPRETATION OF CHAPTER II.)
  Question proposed, That the Clause stand part of the Bill.
  Mr. Mitchison: Again, I want to ask only a short and simple question. What

  1675
  is the sinister meaning of the last two lines of the page, which run like this:
  "assignment', in relation to Scotland, means an assignation"?
  The Solicitor-General: Although not a Scottish lawyer, I think there is nothing sinister in an assignation. Subsection (1) simply makes two Scottish adaptations. It defines "lease", "premium" and "unit of assessment". This last is an expression used in the transitional provisions for 1963–64 in Clauses 20 and 21. It applies the definition of "connected person" contained in paragraph 20 of the Ninth Schedule.
  As to the two lines about which the hon. and learned Member has asked me, I will have to write to him when I have had advice from the Lord Advocate and I will be able to tell him exactly what that means.
  Mr. Mitchison: I trust that these adaptations will not be too promiscuous.
  Mr. Warbey: I rise to speak on the Clause only to call attention to the fact, which is indicated by the rubric, that this is the end of a Chapter. It is the end of Chapter II of Part II of the Bill. I should have thought that this would be a convenient moment at which the Government would be able to indicate to the Committee their intention with regard to the—
  The Chairman: Order. The hon. Member is taking upon himself to move to report Progress. I am accepting no such Motion.
  Mr. Warbey: If I am not allowed briefly to make the point I sought to make, Sir William, I give notice that if after the passing of the Clause the Government do not move to report Progress, I shall ask your leave to move a Motion to that effect.
  The Chairman: The hon. Member should confine his remarks to dealing with the Clause.
  Question put and agreed to.
  Clause ordered to stand part of the Bill.
  Mr. Houghton: I beg to move,
  That the Chairman do report Progress and ask leave to sit again.
  1676
  I move this Motion in order to inquire from the Chief Secretary his desires regarding further progress of the Bill tonight. As my hon. Friend has just said, we have reached the end of Chapter II. Chapter III opens up an important new field of debate. It would be a good thing if the Committee could come fresh to it on another day.
  We have made very good progress, although, to be quite fair, I might say that earlier on in the evening, when it looked as if we might reach the end of Chapter II rather earlier, I said that my right hon. and hon. Friends would be prepared to move into Chapter But it is now twenty minutes past ten. Many of us were here until One o'clock this morning on this Bill, and I am sure that the Chief Secretary and the Patronage Secretary will realise that three days on the Finance Bill is a pretty hard stint, especially for those of us who have had to sit it through. I make no reflection on anyone who has not sat it through, but for those who have it is more arduous still.
  So the right hon. Gentleman may feel that this is a suitable moment at which to leave the Bill until next Tuesday. That would meet our wishes. Perhaps he would consider it. I think we are all feeling a little jaded. Investment allowances are an important matter and may begin a rather long debate on the central economic feature of the Bill.
  We have got along in a spirit of co-operation so far. We were all put out yesterday in our programme by the intervention of the Adjournment debate. We not only came back at Ten o'clock but made very good progress until One o'clock, many of us tearing up most eloquent speeches on various Amendments. We even restrained my hon. Friends from going through the Lobby four time in succession. We confined them to two divisions in succession. They all went away full of frustration and discontent. But that is the sort of thing we have to put up with. I ask the right hon. Gentleman now not to make my job—and after all I share with him a responsibility to a greater power—any more difficult than it is.
  Mr. Boyd-Carpenter: The last words of the hon. Gentleman have touched

  1677
  me to the heart. The idea of making his task more difficult than the weakness of the case he so often has to advocate inevitably makes this Motion so appealing that all I can do is advise the Committee that, in the circumstances, we should accept it.
  Question put an agreed to.
  Committee report Progress; to sit again Tomorrow.

  Mr. Robert Carr discharged from the Estimates Committee; Mr. John M. Temple added.—[Mr. Fraser.]

  ADJOURNMENT
  Resolved, That this House do now adjourn.—[Mr. Fraser.]
  Adjourned accordingly at twenty-five minutes past Ten o'clock.

TRADE AND COMMERCE
  British Standards Institution (Grant)
  British Standards Institution (Grant)
  Development Districts (Loans and Grants)
  Development Districts (Loans and Grants)
  Trade with South Africa
  Trade with South Africa
  Industrial Development, Merseyside
  Industrial Development, Merseyside
  Russia (Trade Mission)
  Russia (Trade Mission)
NATIONAL FINANCE
  Museums (Provision for Purchases)
  Museums (Provision for Purchases)
  Trustee Building Societies (Mortgages)
  Trustee Building Societies (Mortgages)
  Shipbuilding (Finance and Credit Facilities)
  Shipbuilding (Finance and Credit Facilities)
  Government Aid
  Government Aid
  Treasury Bulletin for Industry No. 162
  Treasury Bulletin for Industry No. 162
  Universities (Teaching Posts)
  Universities (Teaching Posts)
  Members' Correspondence (Stationery Allowance)
  Members' Correspondence (Stationery Allowance)
  Exchange Equalisation Account
  Exchange Equalisation Account
SOUTHERN RHODESIA
  Negotiations
  Negotiations
RHODESIA AND NYASALAND
  Social Services (Supplies)
  Social Services (Supplies)
HOME DEPARTMENT
  Poisons
  Poisons
  Queen Frederika of Greece
  Queen Frederika of Greece
  Walton Prison, Liverpool (Prisoners' Mail)
  Walton Prison, Liverpool (Prisoners' Mail)
  Gordon Lonsdale and Greville Wynne
  Gordon Lonsdale and Greville Wynne
EDUCATION
  Teacher Training and School Building Programme
  Teacher Training and School Building Programme
  Teaching by Television
  Teaching by Television
  School Leavers
  School Leavers
  Rates (Educational Expenditure)
  Rates (Educational Expenditure)
  School Dinners
  School Dinners
LOCAL GOVERNMENT
  Building Site, Hull (Appeal)
  Building Site, Hull (Appeal)
  CHIEF ENAHORO
  CHIEF ENAHORO
ROYAL AIR FORCE
  Resettlement Grants
  Resettlement Grants
COMMONWEALTH RELATIONS
  Migration Policy
  Migration Policy
MINISTRY OF HEALTH
  Safety of Drugs (Committee)
  Safety of Drugs (Committee)
EMPLOYMENT
  Young People, Airdrie and Motherwell
  Young People, Airdrie and Motherwell
PENSIONS AND NATIONAL INSURANCE
  Non-Contributory Pensions
  Non-Contributory Pensions
SCOTLAND
  Centralised Hospital, Caithness
  Centralised Hospital, Caithness
  Uncertificated Teachers, Glasgow and Lanarkshire
  Uncertificated Teachers, Glasgow and Lanarkshire
RAILWAYS
  Services, London Area
  Services, London Area
AGRICULTURE, FLSHERIES AND FOOD
  King's College, Newcastle (Department of Agricultural Marketing)
  King's College, Newcastle (Department of Agricultural Marketing)

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

AFTER-CARE OF EX-PRISONERS
3.5 p.m.
LORD STONHAM: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government to state in the latest year for which figures are available, the total Treasury funds expended on the administration of after-care, and on the actual aftercare, of ex-prisoners, respectively.]
THE MINISTER OF STATE, HOME OFFICE (EARL JELLICOE): My Lords, during 1961 the total expenditure of the various after-care organisations was £334,000. Of this amount, £276,000 was spent on administration, including the salaries of prison welfare officers and after-care officers who provide personal service, and £58,000 was spent on direct material aid to former inmates and their families. The total contribution from public funds amounted to £273,000, representing £243,000 for administration and £30,000 for direct material aid.
LORD STONHAM: My Lords, is the noble Earl aware that those figures show that 16s. out of every £1 of the very meagre amount paid for after-care goes in administration and leaves only some £50,000, about 10s. per discharged prisoner, for actual aid to prisoners and their families? I am not commenting adversely on the cost of administration, but does not the noble Earl agree that it is imperative that more funds should be provided for the actual after-care of prisoners, if only because it is much cheaper than letting them go back to prison again?
EARL JELLICOE: My Lords, I think that the noble Lord has done the sum
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quite correctly. I do not necessarily draw quite the same conclusion from it, because, as I mentioned in my original Answer, the sum spent on administration includes salaries of prison welfare officers and after-care officers, and their salaries and expenses are inevitably a large part of the expenditure on a service which is necessarily of a personal nature. The second point I would draw to the noble Lord's attention is that a good deal of expenditure of an aftercare variety falls on the National Assistance Board and, of course, has not been included in the figure I have given to your Lordships' House.
LORD STONHAM: My Lords, nevertheless is it not the case that only some £50,000 was spent on actual after-care of prisoners, and that is what a man looks to when he goes in urgent need of help? It is also the case that the amounts received from the National Assistance Board are quite small. May I put this question to the noble Earl? What plans have the Government in mind for increasing the amounts of actual after-care expenditure on prisoners, many of whom are in desperate need and who, if they do not get help, will inevitably go back to prison?
EARL JELLICOE: My Lords, I do not think that Question Time really provides me with a suitable opportunity for expanding at great length on our plans in this direction. I would remind the noble Lord that we had a very full debate recently on the whole question of prisons, including after-care, and also that my right honourable friend's Advisory Council on the Treatment of Offenders will shortly report on the whole question of after-care and that will provide us with a good opportunity for stock-taking in this very important field.
THE EARL OF LISTOWEL: My Lords, does not the noble Earl agree that it is most necessary, from the point of view of after-care, that the Advisory Council should report at the earliest possible moment, and that the Government should decide on their policy in the light of the views of the Advisory Council as soon as may be?
EARL JELLICOE: My Lords, I entirely agree.

CONDITIONS FOR BROADMOOR INMATES
3.10 p.m.
LORD STONHAM: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government to state, for the latest convenient date, the total number of male inmates at Broadmoor Hospital, the area available to them for open air exercise, and the average number of hours per week that they are able to work.]
THE PARLIAMENTARY SECRETARY, MINISTRY OF HEALTH (LORD NEWTON): My Lords, There are 691 male patients. A total of 33 acres is provided for their outdoor exercise. The time a patient spends at work depends on his mental and physical condition: 300 patients, whose treatment is more advanced, work regularly for 30 to 35 hours weekly; 369 work less regularly, for periods up to 30 hours weekly; and 22 are not fit to work.
LORD STONHAM: My Lords, while thanking the noble Lord for that Answer, may I ask whether he can say if there is any difficulty in the provision of work for the employment of prisoners and, if so, whether his right honourable friend will consult with the right honourable gentleman the Home Secretary, who apparently has no such difficulty, and will be look particularly into the case of many Broadmoor patients who are not allowed into the 33 acres he mentioned, but can exercise in only a very confined space?
LORD NEWTON: My Lords, as regards the first question, I have no reason to suppose at all that there are not sufficient opportunities for work for all those who are capable of working. As regards the noble Lord's second question, every male ward has an adjoining open space of about two acres and there is also a patients' sports field which very nearly all patients are allowed to visit once or twice a week.
LORD STONHAM: My Lords, I will, send the noble Lord particulars of the cases I have in mind, where many men are much under-employed, which makes me wonder whether there is difficulty of
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getting work, and of cases of lack of adequate exercise, which I hope he will look into.
LORD NEWTON: Yes, my Lords, but I would assure the noble Lord that there have never been any complaints at all from any patients claiming that they did not have sufficient fresh air.

COAL LORRY ACCIDENTS
3.12 p.m.
BARONESS BURTON OF COVENTRY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they have any knowledge of any accidents caused by the exercise by weights and measures inspectors of their power to stop coal lorries on the highway and, if so, whether they will give statistics of all such accidents within the last five years.]
THE PARLIAMENTARY SECRETARY, MINISTRY OF TRANSPORT (LORD CHESHAM): My Lords, the available accident statistics do not show whether any accidents have been caused in this way.
BARONESS BURTON OF COVENTRY: My Lords, I thank the noble Lord.

HIGH ALTITUDE NUCLEAR TESTS
BARONESS ELLIOT OF HARWOOD: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they will make a statement on their consultations with British scientists about the effects of high altitude nuclear tests on scientific experiments.]
THE LORD PRESIDENT OF THE COUNCIL AND MINISTER FOR SCIENCE (VISCOUNT HAILSHAM)My Lords, at my request, the Steering Group on Space Research arranged last autumn for a panel of experts to consider this

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question. Their report is published to-day as a White Paper, and copies are available in the Printed Paper Office. A copy of the text has been sent to the United States Government.
BARONESS ELLIOT OF HARWOOD: My Lords, I thank my noble and learned friend for his reply. Can he say whether these tests have any harmful result, either on scientific experiments or on other human beings; and if they do, would Her Majesty's Government ask the United States Government to refrain from such experiments?
VISCOUNT HAILSHAM: My Lords, as regards the first part of my noble friend's Question, there is, I think, no evidence that they have any harmful effects on human health. Certainly I do not think the Report indicates any. With regard to the effects on scientific experiments, this is what the trouble is about. I do not think there is any doubt about that. The high altitude nuclear test which the panel of scientists was concerned with will have very wide effects upon scientific experiments. What exactly is meant by "harmful effects" in that context is more difficult to define, but it will alter the environment of the earth in such a way as to affect scientific experiments seriously.
Obviously, the question of approaching the United States Government is a difficult one. I had contact with them on more than one occasion on this subject. There is more than one factor that one has to bear in mind. I do not think there is any doubt that scientific opinion in this country deplores—or, at any rate, feels—that tests which can affect the environment of the earth or any scientific experiments of other scientists in different parts of the world are a matter of international concern which requires discussion. On the other hand, a Government of any country is concerned, as well, with national security, and in the present state of disarmament negotiations it is not quite certain how far one can go.
There have, of course, been Russian nuclear high altitude tests, as well, which equally could cause trouble, and I think
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one has to face the fact that tests in the high atmosphere or above the atmosphere are one of the consequences of the failure of the Powers to reach a test ban agreement or disarmament agreement; and, in the absence of such an agreement, the most one can do is to make representations when one knows of anything in the air.
BARONESS SUMMERSKILL: My Lords, would the noble Viscount agree that Professor Lovell, whom we all admire and respect, has denounced some of these tests in an unqualified manner?
VISCOUNT HAILSHAM: My Lords, I think if the noble Lady will read the White Paper she will see exactly what the balance of scientific opinion is. I have never known Professor Lovell say anything which I personally would not go along with, and he certainly has not said anything inconsistent with what I have just said to my noble friend. It is simply the fact that many tests of this kind could, if they were initiated after the result of international discussion between scientists, even be valuable. His complaint has been, I think, that it is a unilateral action on the part of any nation that undertakes tests of this kind which can affect the experiments of other scientists; and, in particular, he complained of something which is outside the scope of the White Paper and of the present Question—namely, of an attempted test which was of quite a different character.
The Question refers to high altitude nuclear tests. The first experiment of which Professor Lovell made a complaint was an experiment called Project West Ford, which consisted in throwing up—or attempting to throw up, because it failed—a number of what the Americans called dipoles but what I prefer to call needles, as a means of making experiments in communications, which is a totally different kind of experiment. This has been repeated in the last few days. But I think, partly as a result of what scientists and others said to the American authorities, there are certain "fail safe" devices attached which have made them a good deal less objectionable.

ELISABETHVILLE: DETENTION OF BRITISH SUBJECTS
3.19 p.m.
LORD COLYTON: My Lords, I beg leave to ask a Question of which I have given Her Majesty's Government Private Notice: namely, to ask Her Majesty's Government what information they have received in regard to the arrest of four, or possibly five, British employees of the firm of Gecikat in Elisabethville.
THE MINISTER OF STATE FOR FOREIGN AFFAIRS (THE EARL OF DUNDEE): My Lords, four British subjects were detained for questioning in the course of house searches in Elisabethville the day before yesterday, May 14. Her Majesty's Consul saw them soon after their detention. The four men were released the same afternoon. Her Majesty's Consul saw a member of the group after his return home, and he had no complaints.
LORD COLYTON: My Lords, may I ask, first of all, whether there is any information about the fifth man, a man called Mr. Jimmy Hunter, who was arrested at the same time; and secondly, whether the noble Earl is aware that this is just one of a whole series of incidents of violence in which the Army Nationale Congolese have been involved in the past few months in Katanga and which have resulted in the loss of many European and African lives. Thirdly, may I ask whether Her Majesty's Government will give instructions to make a strong protest, not only to the Resident Minister, Mr. Ileo, in Elisabethville, but also to Mr. Adoula's Government in Leopoldville, and indeed to the United Nations' Representative in the Congo.
THE EARL OF DUNDEE: My Lords, on the first question, the only information we have from our Consul is in respect of the four men whom I have mentioned, whose names were those reported in The Times. We have no information about any others. On the second part of my noble friend's question, of course the situation in Elisabethville, as we all know, is not at all happy, but I should not be inclined to exaggerate unnecessarily what is going wrong, which I think may sometimes happen. On the third question, our Consul did see and make representations to Mr. Ileo and, as I have told your Lordships, the men were released.

FUTURE BUSINESS
EARL ST. ALDWYN: My Lords, with the permission of the House, I should like to make a statement on arrangements for future Business which has been agreed through the usual channels. In response to a request from noble Lords opposite for more time in Committee on the London Government Bill, I have removed most of the Government Business from the days allocated for the Committee next week and the week after next, and my noble friend Lord Colville of Culross has agreed to postpone the Second Reading of the Limitation Bill. The only Government Business which will remain to be taken on those days are Special Orders for Affirmative Resolution. I have not been able to get in touch with the noble Lord, Lord Amulree, to ask him to postpone the Second Reading of the Animal Boarding Establishments Bill, but perhaps the House will agree that this Business may come on at about 7 p.m. on Tuesday next until the Dinner Adjournment. In addition, it has been agreed that the House will meet on Mondays, Tuesdays and Wednesdays at 2 p.m., and on Thursdays at 2.30 p.m., for the next two weeks.
The Business removed to give more time to the London Government Committee has been postponed until after Whitsun. Time must necessarily be found for this postponed Business which will now be added to the other Business already envisaged for the limited time between the Whitsun Adjournment and the Summer Recess. It has therefore been agreed that the House will sit on Fridays after Whitsun. It has been proposed that Friday sittings should start at 11 a.m. and continue until approximately 4 p.m., with a luncheon interval of an hour. I would propose to take on Fridays only Government Business on which the House would not normally expect to divide, and also proceedings on Private Members' Bills.
The agreed allocation of time for the remainder of the London Government Committee is as follows:

To-day: Part II and Schedules 5–7 (concluded):

Monday, May 20: Part III and Schedule 8 (1st day);

Tuesday, May 21: Part III and Schedule 8 (concluded). Part IV (1st day);

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Thursday, May 23: Part IV (concluded). Parts V and VI and Schedules 9–11:

Monday, May 27: Part VII and Schedules 12 and 13 (1st day);

Tuesday, May 28: Part VII and Schedules 12 and 13 (concluded), Part VIII and Schedules 14 and 15;

Thursday, May 30: Part IX and Schedules 16 and 17.

EARL ALEXANDER OF HILLSBOROUGH: My Lords, I am much obliged to the noble Earl for giving this Government plan of Business so far ahead. In the main, we agree on one basis; in so far as the Government have said that they are going to allocate to this Bill only the days mentioned in the final schedule which the noble Earl read out, the arrangement of Business within that time has been noted and agreed. But we have by no means agreed in principle that they are bound to get the Bill through by the end of this month before we go on holiday. My colleagues feel very strongly on that point. We of course accept the provisional plan which is made by the Government, as they have a right to make, on their proposition that they are going to have only so many days allowed before Whitsun. But with important matters still arising on the London Government Bill, both with regard to education, housing, town planning and to all the health and welfare services, it is going to be an exceedingly difficult task, and we ought not to suffer undue physical pressure on such a limited Opposition as we have here at this time.
There is one qualification I should like to make. One Bill which would be among those upon which the noble Earl thinks there would not be likely to be a Division if taken on Friday, is the Contracts of Employment Bill. We are not at all sure about that one. But we could perhaps have further conversations, through the usual channels, about that. The only other thing is perhaps a more general protest, on behalf of my colleagues—and I am quite sure there will be others who desire to protest, whether they do or not, on the Government side—at one being called together on Friday before Whit Monday, when most people will want to be home the night before, or on their way home on that day. That is an exceedingly difficult day for most Peers.
There is one other case which the noble Earl the Leader of the House will remember, or the Chief Whip will remember, we
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put to him. We have a number of our Members in this limited Opposition who have to go on earning their living, as well as serving in this very heavy pressure here; and those of them who are in business reserve Friday to be able to meet people in the business they are concerned with, and clear up matters for the week. Engagements have been made, and that kind of thing. These things are not easy to arrange.
EARL ST. ALDWYN: My Lords, may I interrupt the noble Earl for one moment? I am sorry, but I do not seem to have made myself quite clear. I know that in the original discussions it was suggested that we should meet on the Friday before Whitsun, but as a result of representations from the noble Earl opposite, I said that it would be on Fridays after Whitsun and not before.
EARL ALEXANDER OF HILLSBOROUGH: I must have missed it, and I humbly apologise Ito the Chief Whip, because I would not misunderstand him for the world. I rather gathered that somebody else rose to a point on this statement, and if any other noble Lord does want to rise I wild give way now, as I want to go on to a further point of the Business to-day.
VISCOUNT STUART OF FINDHORN: My Lords, I thank the noble Earl. I was only going to say to the Leader of the House and the Chief Whip that it seems quite clear that the noble Earl opposite and the Opposition want to have it both ways. They are not consenting to an agreed timetable (which is what I always advocated in another place in my time) in which adequate time could be concentrated upon the matters of importance which Members of the Opposition wished to debate and discuss. If the noble Earl opposite said that he could not guarantee that we should get this Bill by any certain date, I wonder whether the deliberate intention is to force upon this House what the Irish Members forced upon another place, the use of guillotines and closures.
LORD MORRISON OF LAMBETH: My Lords, it is always a pleasure to listen to the humorous asides of the noble Viscount opposite, who speaks with considerable experience of these matters as a former Chief Whip in the

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House of Commons. I associate myself with what my noble friend the Leader of the Opposition has said. It is true that this has been provisionally agreed through the usual channels, and certainly when the usual channels are functioning I do not want to quarrel with them. But it is difficult to be certain about these things—for example, the question of housing and town planning. There may riot be an enormous number of Amendments—I do not know; I am speaking from memory—but it is a very big subject on which the whole future of housing and slum clearance in London and Greater London has an enormous significance. It involves other matters. Education is a very big subject. Even if the Amendments are limited, the debate must be adequate. There are some other things too, but we shall do our best in these matters.
There is one point I should like to raise, which is this proposal to meet at 2 o'clock instead of 2.30. I nearly had my digestion ruined the other night with the meat pie and so on which I ate in the Tea Room of another place. But we shall all have our digestions ruined if we are not careful if we have to meet at 2 o'clock without any time to let lunch settle down inside. I do think that is running us a bit hard. Moreover, noble Lords on both sides often have luncheon engagements, and that makes it difficult to get here at 2 o'clock. If would suggest to the Chief Whip that at any rate he might think about this matter; and, to use a famous phrase of a former leader of the House of Commons, "For the rest, we shall have to see how we go and hope for the best."
VISCOUNT HAILSHAM: My Lords, of course I appreciate what the noble Lord says but I think there is more than one side to the question. To begin with, I think that one would always measure the length of time that is necessary for discussion of a subject by its size or importance. The number of things to be said on an important matter may be less than the number of things to say on a relatively small matter, and I am perfectly sure that the House as a whole can co-operate in this plan by asking itself entirely how the best discussion may be obtained on a controversial Bill. We have, I think,
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made very considerable concessions to the other side about it and we have done so in a spirit of reasonableness. It is, I think, important to recognise that we on this side, though we perhaps talk about it a little less, suffer just the same digestive complaints as the Members on the opposite side.
LORD STONHAM: My Lords, can the Chief Whip say whether the 2 o'clock opening is only until the Whitsun Recess, or is it until the Summer Recess?
EARL ST. ALDWYN: My Lords, I certainly hope that it will be necessary only until the Whitsun Recess. Noble Lords opposite asked me to make as much time available as possible for this Committee stage and I thought that the extra half-hour would be appreciated.
3.33 p.m.
EARL ALEXANDER OF HILLSBOROUGH: My Lords, I should now like to raise the question of Business for to-day, which I referred to yesterday in connection with the Ecclesiastical Measure which has been placed down for to-day. I know perfectly well that the right reverend Prelate the Lord Bishop of Chester would be sorry if we had to postpone this discussion, but I beg the House to remember and I am asking specially the Lord Bishop will consider this matter that the Ecclesiastical Measure submitted is a very important document indeed. It has 89 clauses and 9 pages of Schedules, all interrelated. It is the subject of an introductory report from the Ecclesiastical Joint Committee and would require long research by legislative reference back before any ordinary layman could really understand it. It is a tremendous task for anyone to have to undertake, and when one considers what is the business state of the House which was referred to yesterday by the noble and learned Viscount the Leader of the House, that probably we have never had a period from now up to July when there was such pressure on this House of Parliament to deal with legislation, then I beg that we should not still further endanger proper discussion of one of the greatest unmandated Bills ever laid before the House on the local government of Greater London, by having to break off from that to-day to give the

1431
fullest consideration we can to a Measure of such importance as that which is submitted on behalf of the Church of England.
It is a very important Measure. There are some important reforms, and some reforms would no doubt be welcome to members of the Church of England of all views. Some are much more controversial; and when some of them are considered as being in relation to other than purely Church matters, such as civil rights, then I suggest to the noble Viscount, the Leader of the House, that the only possible way of getting a fair view, and then a free vote of the House, as it is not a matter upon which Parties will exercise any influence, and to be able to understand exactly what we are doing, is to have a full day's discussion. I should like to see negotiations take place with the right reverend Prelate the Lord Bishop of Chester, whose name is down to move it to-day. It is a Measure which cannot be amended, with all its consequences. I beg of them to agree to postpone it, and I will help and collaborate between the Bishops' Bench and the noble and learned Viscount the Leader of the House, if he were so inclined, to see whether we could fix a date for the future on which we could give round about a day's discussion to this vastly important Measure.
THE LORD BISHOP OF CHESTER: My Lords, the noble Earl has put me in an extremely awkward position. I greatly respect him, and I should not wish to suggest that I was following any course of action which was disrespectful to him, indeed, I should be anxious to give no suggestion that we are in any way trying to hurry this important Measure. But I have put down this Measure through the usual channels, this day has been allotted for the debate, and many of us have been put to considerable trouble to adjust our times so that it might be possible for us to be present at this debate. The Motion has been on the Order Paper for ten days and the first doubt I heard whether we should be able to debate the matter was at six o'clock last night, when I returned to my home after doing some work on the other side of the county. I have not had any opportunity of discussing the matter with the noble Earl, who could, presumably, have raised it with me at any time during
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the last ten days. Therefore I feel, with great reluctance, that we ought to discuss this matter now, since full notice has been given of it.
EARL ALEXANDER OF HILLSBOROUGH: My Lords, what then becomes of my arrangement with the Government on the discussion of the London Government Bill? We are under a sort of imposition that we must cover to-day right up to the point indicated by the Government in the London Government Bill, and it is really impossible for us to work under the pressure we are with such a small number; nor do I think that half-a-dozen Members of your Lordships' House opposite have had the opportunity to master the intricacies of this particular Measure which is now to come up from the Church. It is impossible to do the two. There are bound to be feelings on both sides of the House with regard to items in this Church Measure, as, if necessary, I shall show later on, and if we cannot come to an arrangement by agreement, then our only way will be to make a sufficiently comprehensive speech on a Motion to adjourn the debate on the Ecclesiastical Measure.
VISCOUNT HAILSHAM: My Lords, I think that almost everything the noble Earl has said could have been said on some Motion or other. At the moment we are only asking questions of the Chief Whip on his Business statement. I think we really must now try to get ourselves into some kind of order. So far as I am concerned, I think the noble Earl, with respect, is mistaken in trying to draw me into this controversy. This is not Government Business. I made my discussions with the noble Earl about Government Business in the knowledge of both of these things—we were both aware that this item was on the Order Paper—and I do not think they are to that extent connected. Our agreements were not conditional and they were not based on any misapprehension. I think it will probably be the wish of the House, when the business is called up, to have the right reverend Prelate develop his case. I do not know anything about the merits of the Measure myself and I do not know how many Members of either side wish to speak. I think we had better see how we go on.
With great respect to the noble Earl who leads the Opposition, I do not think

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this is a matter upon which he is speaking as Leader of the Opposition; I think he is speaking as an individual Member of the House, as in a sense I do, too. Although I wish to expedite the hearing of Government Business, as I think the Opposition does as a body, I think the courteous thing to do in this case is to allow the right reverend Prelate to put forward his Motion. Of course it would be possible, if it should prove that any part needs further consideration, to raise that point in the debate. I think the two political Parties who are in dispute in this House about the merits of the London Government Bill should not try to tie this dispute in any way to the conduct of Business. There are sections of the House to whom ecclesiastical business is important, and I think we should show a certain amount of courtesy and deference to those who wish to discuss other items of Business which are perfectly properly on the Order Paper.
EARL ALEXANDER OF HILLSBOROUGH: My Lords, on the question of how to proceed with Business in this matter, I am not speaking for myself; I am not alone at all. It is the view of the Opposition that we ought not to have pressure put upon us, and then for the Business to be intersected by allowing an important debate such as must arise on a Church Measure. I have always felt, though I have respected the opinions of the Leader of the House, that there should be some conversations between him and the persons who put down Motions as to the state of Business and other arrangements which could be made. I do not accept that sort of half-rebuke for one moment: I have no desire to be discourteous. I think I know enough about Business procedure, after nearly forty years in Parliament, not to do the wrong thing in these matters. What the course must be is perfectly open. If the right reverend Prelate does not give way, then he will move his Motion, and in speaking to the Motion myself, when he has finished, I shall move the Adjournment of the debate, and show with reason and detail why I move it. That is not discourteous; that is actually facing up to the facts of the situation.
VISCOUNT HAILSHAM: My Lords, all I said was that at the moment we
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are not discussing any Motion. We are simply commenting upon the Business statement, which did not in fact contain this item, by the Chief Whip. I would say, with respect to the noble Earl, that the best way of getting on with the Business is to get on with the Business.
LORD MORRISON OF LAMBETH: My Lords, it should be understood the point my noble friend who leads the Opposition is raising is not the merits of the Ecclesiastical Measure at all. That can be discussed at some time, maybe to-day, maybe some other time, and the Whips will be off on our side, and I presume on the Government side, too, and everybody will be free to say what he likes. The only point my noble friend is concerned with now is whether it should come on to-day or at some later date. It has to be remembered, according to the Chief Whip's statement, which had prominent reference to the London Government Bill, that there has been cleared off the list of intended Business pretty well everything other than the London Government Bill. Therefore, my noble friend is perfectly entitled to raise the question whether it is convenient to-day to take the Ecclesiastical Measure when it is a London Government Bill day.
While I am on my feet, if the House will forgive me—I think I am in order, but only just; I will take only a minute—I would add that the House will remember that, in Committee, the Ministers on the London Government Bill said that the Metropolitan Boroughs Joint Standing Committee had assented to the bringing forward of the first election date. I have made inquiries and I am assured that the Standing Joint Committee have not agreed to the bringing forward of that election date.
SEVERAL NOBLE LORDS: Order, order!
LORD MORRISON OF LAMBETH: Do not get cross. Do not stir me up.
LORD LAWSON: My Lords, I must say that I was staggered when I received to-day the document I have in my hand and was told that it had to go through to-day, and I am glad the noble Earl my Leader has made the protest about this matter.

ECCLESIASTICAL JURISDICTION MEASURE, 1963
3.46 p.m.
THE LORD BISHOP OF CHESTER: My Lords, I beg to move the Motion standing in my name on the Order Paper, That in accordance with the Church of England Assembly (Powers) Act 1919 this House do direct that the Ecclesiastical Jurisdiction Measure 1963 be presented to Her Majesty for the Royal Assent. I am grateful to the House for giving me the opportunity of presenting the Measure at this time. Before I start my speech, the most reverend Primate the Lord Archbishop of Canterbury has asked me to say that, owing to the change of time of this debate, he may have to be absent for a short time during it. He hopes the House will understand his absence.
The Ecclesiastical Jurisdiction Measure is one of the most important that has come from the Church Assembly to receive the consent of Parliament. It has as its purpose the recasting of the Ecclesiastical Courts and of their method of working. The system of Ecclesiastical Courts is of very ancient origin, dating from at least the Ordinance of William the Conqueror who separated the Ecclesiastical from the Secular Courts of the Realm. They are part of the judicial system of the land. They exercise, of course, a limited and specialised jurisdiction, for apart from faculty cases, of which I shall speak later, they are solely concerned with the trial and, if necessary, the sentencing of clergymen of the Church of England who are accused of offences involving either their conduct or doctrinal, ceremonial or ritual matters. But the Ecclesiastical Courts are the Queen's Courts, the Judges are the Queen's Judges administering the law of England. Any attempt to reform these courts and their working must therefore be approached with a sense of great responsibility, and this the Church may claim to have done.
The immediate incentive for this Measure comes from the Archbishop's Commission on the Revision of Canon Law which reported in 1947. In the consideration of the sections on the Ecclesiastical Courts it was decided that the matter was so complex and technical that it must be subject to special investigation. At the request of the Convocations, the
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Archbishops in 1951 set up a Commission on the Ecclesiastical Courts under the chairmanship of Mr. Justice Lloyd Jacob. The Commission reported in 1954. Its Report was debated in the Church Assembly in the spring of 1955, and the Canon Law Steering Committees of Convocation and the House of Laity were instructed to make proposals for further action in the Assembly. This they did a year later, and when the Assembly set up a Commission to prepare a Measure it debated the directive it should give to the Commission on the specific reports. Five years later in the summer of 1961 the Measure was presented and received general approval.
In the spring and summer of 1962 it was, because of its importance and complexity, subjected to two stages of revision. In the autumn of 1962 a number of drafting amendments were accepted and the Measure was given final approval. Throughout its passage in the Assembly the Measure was keenly scrutinised; a number of amendments were proposed, and some of substantial importance were carried. No amendment was pressed to a Division. The House may rest assured, therefore, that the Measure has received the full consideration over a long period of time of the Church Assembly, and that there has been no undue haste in presenting reforms of so important an aspect of the life of the Church of the nation.
What is the need for this large-scale reconstruction? The answer is a simple one. It is that in the course of time the system of courts has become so complex and many of them have become anomalous, and in legislation over the last 120 years it has been customary to create new courts to deal with new situations. In consequence, there are at the present time for each diocese four courts and five quasi-courts, as they are called. For each Province of Canterbury and York there are six courts, and at the top there is the Judicial Committee of the Privy Council. This Measure aims at producing order and as much simplification as possible out of what the Lloyd Jacob Commission called "a jungle of courts". It is quite true, as I have said, that the incentive for reform comes in this instance through the Canon Law Commission, but the new system proposed by the Measure is in no way dependent upon Canon Law revision, nor does it prejudge what may be

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later decided. A Measure is needed, Canon Law revision or no Canon Law revision, to clarify and bring order into a system which is at present obscure and chaotic.
I will not burden your Lordships with a detailed description of the system of courts which is proposed, for this can be found in the Measure and in the Explanatory Memorandum. I ask the House therefore to be content with a very rapid survey of their structure. In broad outline, they are designed to deal with three types of proceeding. First, faculty cases; that is to say, applications which in the main deal with the fabric and furnishings of the church. For these the Measure makes only one significant change from the existing procedure. They will be heard in the first instance by the Chancellor sitting in his consistory court in the diocese. There is an appeal to a provincial court and finally to the Judicial Committee of the Privy Council. Only one major change is there, and that is that if the issue involves a matter of doctrinal, ceremonial or ritual consequence the appeal lies to a new court, of which I shall be speaking later, the Court of Ecclesiastical Causes Reserved.
The second group of proceedings are conduct cases: cases which involve breaches of the laws ecclesiastical, unbecoming conduct or serious neglect of duty on the part of a clerk in Holy Orders. In such cases, if the Bishop decides not to exercise his veto the matter is first remitted to an examining lawyer who decides if there is a charge to be answered. Then there is a trial before the Chancellor sitting with two clerical and two lay assessors who act as a jury and are judges of fact, and then there is an appeal to a strengthened Provincial Court. Different procedure is provided for the trial of an Archbishop or a Bishop on a conduct charge, and we trust that this machinery will not often be put into effect.
Finally, there are the cases in which a clerk in Holy Orders is charged with an offence involving doctrines ceremonial or ritual—reserved cases, as they are called. Here the Measure preserves the Bishop's right of veto. If he allows the case to go forward it is first examined by a provincial committee of inquiry. If it recommends that there is a case to be answered, it is to be submitted to a new
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court, the Court of Ecclesiastical Causes Reserved, which coinsists of three Bishops, and two persons who have held high judicial office, sitting with five expert advisers. From this Court the Measure suggests an appeal to a special Commission consisting of three Lords of Appeal who are communicant Members of the Church of England and two Bishops who sit as Lords of Parliament.
The Measure preserves, with certain liberalising amendments, the existing machinery for automatic deprivation consequent upon the conviction of a clergyman in the secular courts for certain serious offences and matrimonial offences. It creates a legal aid system to be financed by the Church Commissioners and the Central Board of Finance of the Church Assembly, and it provides a Rule Committee to draw up rules for the procedure of the courts. It is not to be expected that in a Measure of such length and complexity there would be no controversial elements. The surprising thing is that in fact there are so few, and what there are have been fully considered and vetted in the course of the passage of the Measure.
Broadly, there are three major matters which have caused concern, and I will comment upon them briefly. First, there is the abolition of the Judicial Committee of the Privy Council as the final court of appeal in conduct and reserved cases. In general it is to be noted that the jurisdiction of the Privy Council is in any case of recent origin, having been introduced as late as 1832 to replace the Court of Delegates. In conduct cases under the Clergy Discipline Act, 1892, the Privy Council Judicial Committee exists only as an alternative court of appeal to the Provincial Court, and in the Incumbents (Discipline) Measure, 1947, which has been approved by Parliament, there is no appeal to the Judicial Committee. All six Commissions on the subject since 1883 have recommended that the Judicial Committee should cease to be the final court of appeal in conduct cases. This is a consolidating Measure, and when the framers of it had to decide how they would advise they had before them these alternative procedures, and they decided that this was the right way to go about the matter. So the Measure follows the Lloyd Jacob Commission in providing a strong Provincial Court as the final appellate court in conduct cases.

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The existence of the Judicial Committee of the Privy Council as the final court of appeal in reserved cases has long been a serious cause of conscientious scruple in the Church, for it is widely felt that in the interpreting of the doctrine of the Church of England there should in the last resource be access to a spiritual court. No one would for a moment question the prestige and the authority of the Judicial Committee, but we cannot disregard the undoubted fact that much of the trouble of the last 100 years has been due to the inability, on conscientious grounds, of a great number of churchmen to accept the authority of a court the members of which need not be members of the Church of England, or, indeed, Christians at all, as the final arbiter of the faith and practice of the Church.
As the Lloyd Jacob Commission said, even a court composed of lay judges who are members of the Church of England will not meet the real needs of the Church. In addition to such judges a final court must also consist of judges who both by their office in the Church and by their training have authority to speak on doctrinal, liturgical and spiritual issues. Only the judgments of such a court will command the confidence of the Church. Accordingly, the Measure provides, as the final court of appeal in reserved cases, in place of the Judicial Committee, a Commission under the Great Seal consisting of five persons appointed by Her Majesty, three of whom shall be Lords of Appeal who are communicant members of the Church of England and two of whom shall be Bishops who sit as Lords of Parliament.
I would draw the attention of the House to the fact that there is no attempt here to remove these matters from the jurisdiction of Her Majesty's Courts. The Commission will be one of great eminence, and also it should be noted that the lay judges will be in a majority of its members. Rightly or wrongly, as I have said, the existence of the Judicial Committee as the final court in cases involving doctrine, ritual and ceremonial has been of grave conscientious scruple for the Church of England. I am sure that noble Lords will agree that if it can reasonably be avoided, the law ought not to burden the conscience of those who are subject to it. It is a considerable
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achievement that the Church Assembly, clergy and laity alike, have come to a common mind and have accepted the Commission under the Great Seal as the proper court of final appeal in these matters. It is greatly to be hoped that Parliament will agree to provide the Church with this means of bringing peace and agreement.
In the second case, the Incumbents (Discipline) Measure, 1947, provides that no clergyman may be proceeded against by virtue of his social or political opinions. This Measure continues the defence of political opinions, but no longer allows social opinions as a defence. The reason for this is that the framers of the Measure were advised that the term "social opinions" is so vague as to be incapable of definition, or alternately, it is so wide as to admit a defence in almost every possible charge. The 1892 Clergy Discipline Act does not admit such a defence as this, and therefore the framers of the Measure had to decide the best way of dealing with it. Your Lordships will remember that there are many safeguards in this—the Bishop's veto and the preliminary investigation—so it is not likely that a clergyman would ever be charged in a frivolous way under this heading. And so it has been thought wise to preserve the defence of political opinion, but to go no further.
The last major area of disagreement concerns the retention of the right of the Bishop to veto proceedings in a reserved case. I stress the word "retention" because it is sometimes suggested that this is an innovation in the Measure. In point of fact, it has ancient origins. As the Lloyd Jacob Commission commented, in old days no criminal suit could proceed unless the promoter had first secured leave of the judge for his office to be thus promoted, since, as Lord Stowell said in Maidman v. Maltless in 1794:
"The criminal jurisdiction of the Ecclesiastical Courts was not to be exercised without discretion, or to be left entirely to the judgment of passions of private persons."
The judge had a limited power of refusing leave; but it is from this power of refusal which the judges had in criminal suits that the modern Bishop's veto in clergy discipline cases has developed. The procedure, both in criminal and civil suits, was not that

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of the Common Law courts but an adaptation to the needs of the Church of the procedure of Roman civil law.
In point of fact, all the Discipline Acts and Measures since 1840 preserve the Bishop's right to veto the proceedings, if he sees fit, in both conduct and reserved cases. It is true that the Lloyd Jacob Commission recommended the abolition of the Bishop's veto in reserved cases; but it made an important reservation: it presumed that the introduction of the new courts would coincide with a revision of the law of worship. Again, may I quote its exact words:
"We Welcome what has already been achieved in the revision of the canons towards ending the divergence between law and practice in public worship.
"It is conditional on this work being carried to completion that we recommend the adoption of the procedure set out in the following pages, for the correction of ritual and ceremonial as well as doctrinal offences, and the consequent abolition of the procedure contained in the Church Discipline Act, 1840 and Public Worship Regulation Act, 1874. If, in spite of what has already been achieved in the new canons, the Church decide that the time is not yet ripe for any further action towards ending the divergence between law and practice in public worship, we can see no useful purpose in at present including in our proposals any but doctrinal cases. There will remain for ritual and ceremonial cases the provision of the Church Discipline Act, 1840 and the Public Worship Regulation Act, 1874. In this event, the only safeguard against the enforcement of a law which is repudiated daily in the practice of the Church will be the veto of the Bishop."
That revision of Canon Law and of the law of worship has not yet been possible; and therefore, without the veto, the door would be wide open to frivolous and vexatious prosecution because of the vagueness of the present law of worship. In such cases as may come before the Courts Ecclesiastical the clergy are in a most vulnerable situation. They are to be tried for offences which are not chargeable in the case of the laity in the secular courts—for instance, adultery or heresy. If found guilty, they may lose their office and their means of livelihood. In conduct cases they are particularly subject to malicious gossip and tittle-tattle. In reserved cases, since every word of the Book of Common Prayer is the law of the land and every departure from its strict letter is a breach of the law, the clergy are laid wide open to vexatious prosecution. The power of
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the Bishop in exercising his pastoral office to veto further prosecution is an essential protection for the clergy, whatever tradition they may follow.
I am sorry to labour this aspect of the Measure, but I must do so in view of the representations which have been made to Members of the House and of recent correspondence in the Press. These imply that the retention of the Bishop's veto in the Measure is an innovation and represents an increase in the power of the Bishops. I hope I have convinced the House that this simply is not so. I have examined these representations as sympathetically as I can and, frankly, I am unable to understand what those who object to the veto expect to gain if they should succeed in persuading Parliament to take the grave step of withholding consent for this Measure. Should this Measure not become law, then we are back where we started, with the Bishop's veto operative as it is to-day in every Act and Measure affecting clergy discipline. Nothing will have been gained, and the clergy and laity alike will be deprived of the many liberalising elements which are unquestionably of benefit in the Measure. The abolition of the Bishop's veto in reserved cases was tested on amendment in the Church Assembly. There was a long and careful debate in the Assembly and the amendment to remove it was decisively defeated without resort to a Division. In this way the Church has clearly expressed its mind.
I must apologise to the House for having spoken at such length. Your Lordships will appreciate that behind this Measure lies not only the thought and labour of the last ten years or so, but the investigations of eight Commissions since 1883, which have devoted their attention wholly or in part to the reform of the Church courts. At last we have something to present. At every stage in the framing of this Measure we have consulted with Government Departments, the Bar Council, the Law Society and other interested and eminent bodies. We have had the benefit of advice and experience of such eminent men of law as Sir Thomas Barnes and the late Sir Alan Ellis. We believe that this Measure will make a substantial contribution to the better ordering of the

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life of the Church. I commend it with confidence to this House, for its approval.
Moved, to resolve, That in accordance with the Church of England Assembly (Powers) Act 1919 this House do direct that the Ecclesiastical Jurisdiction Measure 1963 be presented to Her Majesty for the Royal Assent.—(The Lord Bishop of Chester.)
LORD CHORLEY: My Lords, might I ask the right reverend Prelate about the composition of the Court of Ecclesiastical Causes Reserved, which he said was to have a predominance of lay lawyers? Which section covers this?—because looking at Section 5 it seems to be the other way round.
THE LORD BISHOP OF CHESTER: The Court of Ecclesiastical Causes Reserved has a majority of Bishops: it comprises three Bishops and two persons of high judicial experience. The final court of appeal, which is the Commission under the Great Seal, reverses that situation and has three Lords of Appeal and two Bishops.
LORD CHORLEY: Could the right reverend Prelate tell me where this appears in the Measure? I cannot find it.
THE LORD BISHOP OF CHESTER: On page 8, in Clause 11(4).
4.14 p.m.
EARL ALEXANDER OF HILLSBOROUGH: The Question has been put, and therefore I rise to speak to the Motion and to give notice that at the end I intend to move an Amendment to adjourn the debate for the time being. I am very sorry to have to do this. It is true that the Motion was on the Paper, but in the turmoil which we in Opposition have been suffering in arranging Business in the last fortnight—which any Member of the Front Bench opposite would agree has been the position—this matter has hardly been in our thoughts at all. If there has been any inconvenience to the right reverend Prelate the Lord Bishop of Chester because of what I have to do now, I regret it; but in view of the importance of the Measure, which he has no more than outlined to-day—if I may say so; he has given a highly skilled summary of this Measure—there are those of us who have to consider the actual effects of this,
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not from the point of view of discussions in Convocation but of the effect on the people of this country as a whole.
What is to happen to certain rights which civilians have in regard to some processes of law which must necessarily be laid down and, I hope, followed in conjunction with what is, after all, a State Church? Since it is connected with the Constitution of the country, the only Constitution, with Her Majesty as its head, there is an implication that we must have it properly governed in the interests of the only piece of statutory Constitution of the country as a whole that I can ever find (the noble and learned Lord, the Lord Chancellor, will correct me if I am wrong), and that is the Act of 1689, which is the only piece of Statute we have which preserves the Protestant succession. I am bound to say that in this connection I have very grave doubts as to what is in the minds of some people—not all—in the Church as to what the future of the Church in relation to this matter will be.
The right reverend Prelate said in the course of his speech that it was not intended to do this or to do that, but that some of these alterations were necessary. Let me take one point which is very prominent in my mind. There are civil rights in the community, in connection with both Church ecclesiastical law and Church practice, which a civilian has. We are, whether we like it or not, in law a Protestant State. I have not enjoyed very much the opinions which have been expressed in previous debates, such as that on May 10, 1961, and I do not enjoy having to engage in them. But I was born into the Church of England as a baby, I was brought up in it until I was 22; I sang in the choir for many years; and I have said more than once in this House that I love the Prayer Book of the Church of England, I have a great affection for it. In my Nonconformist preaching I often use great passages from it, and I do not suppose there is any other document in my mind which can possibly compare in richness, in humility and praise with the General Thanksgiving in the Prayer Book.
I am also aware of the fact that the Prayer Book is not being followed by ministers. Probably a majority of the

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clergy in the Church of England to-day deliberately ignore the decisions of Parliament in 1927 and 1928, in spite of the trenchant comments in the Report of the Royal Commission in 1906 that the existence of such a state of affairs was a public scandal. Nothing seems to be done about it, or to make sure that the Prayer Book is being properly used and expounded and loved as it should be. If I and high members of espiscopacy take it into their minds to go and deliver sermons at services or meetings which support the clergy in doing these things it becomes an even greater abuse. I cannot understand how a metropolitan Bishop, or the Lord Bishop of Colchester, whom I know slightly, will go and preach in a Church of England, or at a Church Conference, or an Anglo-Catholic Conference, at a Celebration of High Mass, when the trenchant Articles of Religion clearly lay down that it is the belief of the Church of England that the Mass is a blasphemous fable and a dangerous deceit.
You must not expect that all the members of the Church of England can be in Convocation or in Church Assembly, or that there is not a very considerable number of the members of the Church of England who are not in agreement in all respects with the kind of Measure which is now proposed—although I am quite sure that the great majority of Church of England members will welcome many of the milder reforms which are in this Measure. But before Parliament can really make a decision on a Measure of this kind, surely it is entitled to have time to study all its legal implications and what may be its results. I doubt very much whether any lawyer in the House at the present time, unless he is a very confirmed member of the Church who has been interested all the time in the meetings of Convocation and the Church Assembly, could tell me the meanings of every clause in this 89-clause Measure. Nor have we had anything like a detailed explanation by the right reverend Prelate, who spoke so well but in summary. This is a Measure which requires real legal delving into before what is likely to be the result can be fully appreciated.
Now let us look at the reason why I think it is necessary to postpone it for a full debate. I noted all that the noble
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Prelate said about the question of the Bishop's veto. I noticed that he said that it was a retention, and in no sense an expansion. However, it is perfectly true that there are very well respected clergy in the Church of England who are nervous about it; and before I had a chance even to see it at that time I was present at a meeting at Caxton Hall as recently as May 7, at which the Reverend Paul Johnson, a very able speaker and a great preacher of the Gospel, and the incumbent, I think, of that famous church, St. Mary's, Islington, was the principal speaker. To-day I have got hold of a copy of the English Churchman magazine, which reports that meeting, and it picks out in block type words which the Reverend Paul Johnson used. He said:
"Britain's national church is in danger of becoming an episcopal sect".
That is one comment upon it. It goes on to say:
"The New Testament pattern of the local church is in danger of being replaced by a system of diocesan …",
and so on. It goes on to say—I am sorry my sight is not good enough for me to read quickly on this matter; it is purely a question of sight at the moment:
"The doctrinal basis of the Thirty-nine Articles is in danger of being undermined by the sanctioning of services which are anti-Reformation and unscriptural."
For all the years I have been in London there has always been a ministry from St. Mary's, Islington, of great dignity, great honesty, always basing itself, perhaps primarily, as I think it should, upon the authority of the Word of God as being the prime authority to which to turn. The Reverend Maurice Wood, the predecessor of Paul Johnson, was a very charming man and able to get on with most people, but on these matters he was equally firm.
The first real publicity which came to the general public, as distinct from those who were specially interested in meetings of the Church alone in the Church Assembly or in Convocation, was published—and I am glad they did it—by the Daily Telegraph yesterday in a letter from the Editor of the Churchman. I am sure all the right reverend Prelates present will agree with me that the Churchman is a good paper. It is, I

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think, the official organ of the Church Society, which is known to be, of course, quite Protestant in its views, but which contains large numbers of very faithful members of the Church of England—very faithful—and not only clergy but also laymen of that Church. The emphasis laid in that letter was no doubt one of the things which the right reverend Prelate the Lord Bishop of Chester had in mind when he was answering on this question of the veto of the Bishops towards the end of his speech.
But then I see that that is followed up by a circular to all Members of Parliament of both Houses, signed by six lawyers. I do not need to go through the whole list of six; I would take two as being amply sufficient evidence of their capacity and integrity. One is Professor Anderson, who is the Professor of Advanced Legal Studies at the University of London, and the other is Mr. Roche, Q.C., whose reputation at the Bar and whose capacity as a counsel I am quite content to leave in the hands of the noble Viscount the Leader of the House or the noble Lord who sits upon the Woolsack, for them to give their opinion. There is no doubt about their opinion as to the result of the proposals in this Measure with regard to the veto. This Measure extends it.
THE LORD BISHOP OF CHESTER: It extends it in no way whatsoever, my Lords.
EARL ALEXANDER OF HILLSBOROUGH: That is my view, at any rate, from the brief time I have had to look at it. I will go back again to my studies. I do not want to contradict the right reverend Prelate at all. I will look again at it; but that is the impression in the mind of the Editor of the Churchman, and it is the impression, obviously, in the minds of the six learned lawyers who wrote their circular to Members of both Houses of Parliament—and I have looked at that very carefully.
THE LORD BISHOP OF EXETER: I do not think so, my Lords. I think the impression the lawyers were trying to give was not that the episcopal veto was being extended, but that it was a bad thing in principle and ought to be abolished.
EARL ALEXANDER OF HILLSBOROUGH: Perhaps one or two phrases might be read in that connection, but I think that the general weight of the letter is that it is a Measure which ought to be most carefully considered by Parliament—most carefully considered. The right reverend Prelate the Lord Bishop of Chester was present, I think, at the meeting which prepared the Report of the Ecclesiastical Joint Committee; and I think that Report now says that there are two matters only, outside the other matters connected with the courts and in relation to the veto of the Bishops, that are really important. They are—I speak from memory—in Clause 45(3) and Clause 48(5) of the Measure. I take this as referring to the question of the future of the access to the Privy Council Judiciary. That is now to be put in such a way that cases connected with doctrine, ritual and ceremonial can be excluded altogether. In part (from what the right reverend Prelate the Lord Bishop of Chester said) in some respects some of these matters have already been restricted in certain matters of appeal; but in this case they are deliberately provided for to make the law of the future what is outlined in the two subsections which I have mentioned.
How does that really work? I do not know exactly. What I suspect is that, to some degree, part of it has been put in because it is believed that only foolish or highly hysterical people would raise matters in these connections in a charge against an incumbent or other persons or against a Bishop or any Archbishop. That is not so at all. I am President of the United Kingdom Council of Protestant Churches; I am a Vice-President of the International Council of Christian Churches; I am a Vice-President of the Protestant Truth Society. I have a pretty wide circle of contacts and of experience of being able to assess what is in people's minds. In all those organisations we have very many people representative of the Church of England. Some of us are Nonconformist, including Congregationalist. Perhaps to-day the Church of England strongly rue that they ever had them expelled in 1662. They rue the expulsion from the Church of men like Richard Baxter and his like. What a pity that was! I find that in these large and joint Protestant organisations, these people are very reasonable. But always they have

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the firm belief that from the moment the Church of England became a reformed Church, following upon the Reformation led by Martin Luther, then matters changed for this country; and the actual progress and development of this country, and its world influence, have largely been based upon the principles of civil and religious liberty which came only with the Reformation of the Church of England as well as the reformation of other Churches. That is the opinion.
They like to feel to-day, in the Protestant sections of the Church of England, that they have the authority of the Prayer Book which is loved, but which is not always kept. They love the service which was prescribed, and which sometimes is varied in a somewhat sensational manner. I will not comment upon that, because I have not myself heard these sensational services; so I do not know much about them. But there is a feeling in the Church of England, among these members with whom I am acquainted, and whom I respect and admire, that we are tending to fall away from the great high principles of witnessing that we had in the reformed Church of England. That would be a very great pity. The whole state of the world at the present time, I think, would be all the better if there were complete unity in the Church of England on the basic Protestant doctrines which are inherent in the Constitution of our reformed State Church.
It seems to me that if there is a continuing breaking-away from that, then no longer will there be a really fundamental ability to establish the rights of the Church of England alone to be the State Church. That is why I said yesterday, and I say again to-day, that in dealing with laws likely to affect the civil population (as I think they will be affected by the break in the right of appeal to the Privy Council) then, if that break is there, I think you are getting into very dangerous situations. The question of a civil right being taken by means of a part of a Measure published under the authority given by the 1919 Act and having a general effect on the rights of the citizens in this matter is a constitutional concern of the first importance. I do not want to take an unreasonably long time to-day; but in my view it would be very much better if, having heard the summary, which was put in a skilful way by the right
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reverend Prelate the Lord Bishop of Chester, we were now to postpone for the time being the rest of the debate and proceedings on this Bill. Perhaps someone would be willing to take up the offer I made, and we could have a joint agreement between the leaders of the Parties and representatives of the Church so that we could give a whole day at least to a discussion of this matter. When those discussions come, I would suggest that consideration of the constitutional implications of the changes as I see them—where a constitutional change affects not just the Church but the citizenship of the country—ought first to be held not in your Lordships' House, but in the elected Chamber as constitutional business.
I have a lot more in my mind to say. I do not want to delay the House any longer but I think I have made a case that there is grave disagreement in some parts of the country about the proposed changes, and that the people of the country in general have not yet had the opportunity of studying it. The Measure itself, which I have before me and which I see was ordered to be printed by Parliament, could not be bought in Her Majesty's Stationery Office any time this week by any of my friends. They were turned away and sent to the Church Information Office in order to obtain copies. It is only after those people who could get hold of the Measure from about May 4 or 5 have had time to go into the matter in detail that you get the kind of communication published in the Daily Telegraph yesterday and a circular from the lawyers to us—and many more will come. I beg the House to agree that we should postpone further debate on this matter. I will certainly do my best to assist in the arranging of a whole day for discussion in your Lordships' House. At the same time perhaps the right reverend Prelate the Lord Bishop of Chester will consider whether it would not be wise after all, to place this Measure for debate first of all in another place. I beg to move.
Moved as an Amendment, That the debate be now adjourned.—(Earl Alexander of Hillsborough.)
4.39 p.m.
LORD SILKIN: My Lords, the last thing I ever imagined was that I would wish to speak on a matter of this kind. But I feel impelled to support my noble friend for two reasons. Normally I have always regarded these Measures which

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have come from the Church Assembly as domestic Measures which this House is asked to approve as a matter of form, and I think the matter has been treated in that way. But after the explanation of this particular Measure from the right reverend Prelate, it does look as if there are certain matters of principle to which this House will be asked to agree, and I think that in these circumstances the assent of the House should be a real one. It is true that the Measure has been on the Order Paper for ten days. My noble friend says that copies of the Measure were not actually obtainable until quite recently. Be that as it may, I think that most of us who saw it on the Order Paper regarded it as one of the normal Measures which come before us and are passed, after explanation, as a matter of routine.
There are at least two matters which some of us would like to think about and discuss with others perhaps more qualified to express a view than we are ourselves. I am not going to enter into any doctrinal discussions, because I am not qualified to do so. The first point is, as I understand the Measure, that in certain circumstances there is to be a tribunal set up which will consist in part of three High Court Judges, all of whom should be confirming members of the Church of England.
THE LORD BISHOP OF CHESTER: Lords of Appeal.
LORD SILKIN: Yes, my Lords. There may conceivably be a good case for that. But one would like to think about it. I am bound to say that, with my knowledge of the English Constitution, I have never come across a case where a court is built up on the basis of the religious beliefs of the Judges. We pride ourselves that we make no inquiries about the religious beliefs of Judges, and we have Judges of all kinds of religious belief, and possibly of none at all. That a person should hold one particular religious belief or another we do not regard as prejudicial to the holding of high judicial office.
In fact, in the past, we made great sacrifices for the freedom of religious belief and for the avoidance of any kind of bar to holding any kind of office on the basis of religious belief. And in the
high office which the noble and learned Lord the Lord Chancellor holds, there have been men of various religious beliefs, including the late Lord Reading, who was a Jew and not a Christian at all, and he held office with high distinction. While, as I say, there may be a case for this particular court to be composed in the way in which it is proposed, it is a matter which I think this House should not approve lightly or without full consideration, and we have not had an opportunity of that consideration.
Then it is proposed to end the right of appeal to the Judicial Committee of the Privy Council in certain types of case. The right reverend Prelate told us that this was of fairly recent origin, going back only to 1832. But that is quite a long way back and, in fact, it has been the law for 130 years. Again, it should not be lightly abolished. I am not saying that there may not be a case for it, but I would submit to the right reverend Prelate that before Parliment is asked to agree to this, it ought to have a proper opportunity of considering it. The right reverend Prelate has explained quite clearly and fairly what this Measure is, and he has rendered great service to the House in telling us of the substance of the Measure, but, of course, we have not had an opportunity of examining it.
I think that, with the right reverend Prelate's explanation and the Measure before us and a little time, when we are less pressed than we are to-day, we should have a better opportunity of judging whether these revolutionary proposals should be accepted or not. I would appeal to the right reverend Prelate, having made his speech, not to press us further to-day and to give us an adequate opportunity of considering the matter. If the right reverend Prelate presses us, I imagine that he will have his way, but, if I may respectfully say so, he would be ill-advised to do so.
4.47 p.m.
On Question, Whether the Amendment shall be agreed to?
Their Lordships divided: Contents, 34; Not-Contents, 66.

CONTENTS

Airedale, L.

Allendale, V.

Champion, L.

Alexander of Hillsborough, E.

Carrington, L.

Chesham, L.

Chorley, L.

Henderson, L.

Melchett, L.

Devonshire, D.

Henley, L.

Mersey, V.

Dudley, E.

Inman, L.

Ogmore, L.

Effingham, E.

Jellicoe, E.

Shepherd, L. [Teller.]

Elliot of Harwood, B.

Lansdowne, M.

Silkin, L.

Faringdon, L.

Latham, L.

Sinha, L.

Ferrers, E.

Listowel, E.

Stonham, L.

Fraser of North Cape, L.

Lloyd, L.

Summerskill, B.

Grantchester, L.

Lucan, E. [Teller.)

Walston, L.

Harvey of Tasburgh, L.

NOT-CONTENTS

Ailwyn, L.

Dundee, E.

Margesson, V.

Albemarle, E.

Eccles, L.

Merrivale, L.

Aldington, L.

Exeter, L. Bp.

Meston, L.

Alexander of Tunis, E.

Exeter, M.

Mills, V.

Amherst of Hackney, L.

Fortescue, E.

Milverton, L.

Ampthill, L.

Fraser of Lonsdale, L.

Molson, L.

Astor, V.

Gage, V.

Monk Bretton, L.

Balfour of Burleigh, L.

Goschen, V.

Montgomery of Alamein, V.

Beauchamp, E.

Hamilton of Dalzell, L.

Newcastle, L. Bp.

Bessborough, E.

Hanworth, V.

Newton, L

Blackford, L.

Hawke, L. [Teller.]

Onslow, E.

Boston, L.

Home, E.

Poulett, E.

Brentford, V.

Horsbrugh, B.

St. Aldwyn, E.

Bridgeman, V. [Teller.]

Howe, E.

Salisbury, M.

Chester, L. Bp.

Ilford, L.

Saltoun, L.

Colgrain, L.

Jessel, L.

Sandford, L.

Colyton, L.

Killearn, L.

Somers, L.

Conesford, L.

Kilmuir, E.

Soulbury, V.

Craigton, L.

London, L. Bp.

Stuart of Findhorn, V.

Davidson, V.

Long, V.

Suffield, L.

Denham, L.

Luke, L.

Twining, L.

Dilhorne, L. (L. Chancellor.)

McCorquodale of Newton, L.

Winchester, L. Bp.

On Question, Motion agreed to.

EARL ALEXANDER OF HILLSBOROUGH: My Lords, this means that we can go back now to discuss the merits of the Measure, because it has not been fully discussed, and I hope that any Member on any side of the House who has views about it will not let this Measure go through by mere default of proper examination and debate. We have moved, and succeeded in getting people of all Parties into the Division Lobby, in favour of the Amendment for Adjournment and I think at this stage I should like to leave the debate to other noble Lords, if they will join in.
4.57 p.m.
VISCOUNT BRENTFORD: My Lords, it really is a matter of sincere regret on my part that I find myself in opposition to this Motion, first, because I know it is always a great mistake, as well as a matter of personal regret, to find myself on the opposite side of debate to the right reverend Prelate the Lord Bishop of Chester; and secondly, because I am exceedingly conscious of the immense need for a reform of the Ecclesiastical Courts. I am equally conscious of the tremendous amount of work, effort, thought and
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prayer which has been put into the consideration of the reform of the Ecclesiastical Courts over the last ten years. There is so much in this Measure which is good and of which I would whole-heartedly approve that it is, as I say, a matter of exceedingly deep regret that I find there is one point in it which precludes me from voting in favour of its passing.
There are quite a number of points in this Measure which I would prefer to see amended or altered, but there is only this one point which, to me, is fundamental and which causes me to adopt this rather drastic course of voting against it. That point is the one to which the right reverend Prelate addressed himself at considerable length, with great fluency and very convincingly—namely, the question of the retention of the Bishop's veto in reserved cases. There was one point upon which I should like to comment in what the right reverend Prelate said in regard to the debates in the Church Assembly. He repeated very faithfully the history of how the debates went; but I think it is fair to say that when a decision was taken in the Assembly on this particular question of the Bishop's veto, the overwhelming majority of the House of Clergy, not

1455
unnaturally, voted for, or expressed themselves in favour of, the Bishop's veto, and in the House of Laity there was a substantial minority which expressed themselves as being opposed to it.
The basic reason why I am opposed to the Measure on the ground that it retains the Bishop's veto in these reserved cases is that, by so doing, it departs from the basic principles in the Lloyd Jacob Report. There is one thing that I should like to take up with the right reverend Prelate, and that is as regards this being a retention. Of course it is a retention in the sense that in the 1874 Act the Bishops have a right of veto, but I think I am correct in saying that they were able to exercise that right of veto under that Act only with full publication of what they were doing and why they were doing it, whereas in this Measure the right of veto by the Bishop is an entirely private thing, and he is under no obligation, by virtue of the Measure, to impart anything but his decision to anybody at all.
Nor is he under any obligation to give any reasons or causes which have led him to arrive at the decision. If I may refer your Lordships to the Report of the Lloyd Jacob Commission, they say on page 74:
"In the correction of the kind of offence which we have placed in the reserved category there must be some authority with power to decide whether or not the case is to go forward for trial. Even if there is a prima facie case against the accused a trial in a court of law may not be the best means of dealing with the matter, but whether or not the case is allowed to go forward for trial the complainant has every right to have a full inquiry made into the act of which he complains, since it may affect his faith and his part in the services of the Church, and in the event of the case not being allowed to go forward he has a right to know the reason why. The full inquiry, and the decision whether the case should be tried or not, should be made by a body which is more widely representative of the Church than the Bishop of the diocese where the case has arisen, but the Bishop as a pastor will have his own particular knowldege of the circumstances and should be allowed an opportunity of pastoral action before the inquiry stage of making appropriate representations at that stage."
The vital importance of that quotation is, I think, that the full inquiry should be made by a body which is more widely representative of the Church than the Bishop of the diocese, because it may well be understood that it is only in that way that it is possible
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to obtain the uniformity with regard to the three points which come up for consideration under this Measure, namely, the questions of doctrine, ritual and ceremony. Following upon this quotation, the Report goes on at the bottom of page 76 to make the definite recommendation
"that the Bishop should be informed at the outset that the complaint has been made, and that he should be given an opportunity of settling the case by pastoral action. For this he should be allowed one month. The Bishop will not be able to veto the proceedings or to try or sentence the accused clergyman. His action is to be that of a pastor. By talking the whole matter over with the complainant and the accused he may be able to bring both to such a frame of mind that the complainant may decide to withdraw his complaint."
That is the recommendation of the Lloyd Jacob Report, which has been departed from in this particular Measure.
The Commission go on to recommend that there should be a court of inquiry, and the provision with regard to the inquiry is that it should be by a Convocational Committee which would be representative of the whole of the Province. This recommendation was adopted by the Measure and the Committee was also given power of veto, and, therefore, in the Measure as it stands at the present time any complainant has to overcome two hurdles before he can even get his complaint raised in the courts on an action or trial. First of all, he has to overcome the Bishop's right of veto and, secondly, he has to overcome the right of veto of the Committee of Inquiry. Both those rights of veto are entitled to be exercised on exactly the same grounds, namely, that the matter is a trivial one; that it would not be in the interests of the Church of England for it to be pursued, or that the cause arose through extenuating circumstances. In any of those three events, not only is the Bishop given the right of exercising his veto upon the initiation or continuation of the proceedings, but the committee of inquiry is similarly given the same right.
One argument I think the right reverend Prelate put forward for the retention of this right of veto was that it was hallowed by the passage of time, having been exercised by Bishops since early in the last century. But I would pray in aid another argument which

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my noble friend used himself, and that was with regard to the Judicial Committee of the Privy Council. He pointed out that that Committee had been hearing appeals in these cases since 1834 (I think it was) but, nevertheless, that was not any longer hallowed by the length of time in which it had been exercised. When an alternative means of appeal, superior, in my noble friend's estimation, to the Judicial Committee of the Privy Council, came to be discovered, then it was right and proper that the Privy Council's rights of hearing appeals of these cases should be done away with. What is just for the Privy Council is surely just for the Bishop's veto, and if it is found that the Bishop's veto can be superseded by some superior method, then I submit to your Lordships that it is right and proper that the Bishop's veto should go. I submit that this alternative method proposed by the Lloyd Jacob Committee is a superior method.
The right reverend Prelate also indicated that one necessary reason for the Bishop's veto was to put an end to the possible raising of frivolous complaints, for which it was hardly worth while to bring together the superior machinery of this Provincial Committee of Inquiry. I do not attach any importance whatsoever to that argument. To begin with, complaints under Section 19 of the Measure can be made only by an authorised person—that is to say, some person in the parish who has been authorised by the Bishop to make the complaint, or by six members of full age, whose names are on the electoral roll. Those people are going to be sensible and responsible, and they are not going to bring forward a whole host of frivolous complaints, such as was rather indicated might be the possibility and which might lead to the need of the Bishops' veto.
But there is another argument, too, in favour of letting the Committee of Inquiry deal with this matter direct, and that is, that the Committee of Inquiry have the power of ordering a frivolous complainant to pay the costs of the application; and that, I submit to your Lordships, is a very valuable sanction and is certainly going to make people think twice, if not thrice, before they introduce any frivolous complaints.
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I do submit to your Lordships that the Bishops' Veto is bad because, among other things, it enables a Bishop to prevent the enforcement of ecclesiastical law with which he may personally be in disagreement, and I think it might put several of the right reverend Prelates into a position of very grave difficulty if they were called upon to decide whether or not to exercise their right of veto in regard to an infringement of the law which they themselves have regularly practised in the days before they were translated to the Upper Bench. But, in any event, such a procedure would inevitably result in the very grave danger of a lack of uniformity in the enforcement of the ecclesiastical law in the law of this country.
I believe that the inclusion of the Bishop's veto derogates very strongly indeed from the fundamental principle which is implicit in the Report of the Lloyd Jacob Commission, that reserve cases which deal with doctrinal, ritual or ceremonial, and may therefore well affect the whole Church, should be dealt with only at a Church, national or provincial level. This I differentiate from conduct cases, because conduct cases are very largely of a domestic character and can perfectly well be dealt with in the diocese and through the diocesan Bishop himself. But these reserve cases are of infinitely wider importance and wider application to the Church of England as a whole.
My Lords, I will conclude with one quotation, if I may, from a book written and published this year by the Archdeacon of Hastings entitled The Church of England: its members and its business,—and he has noted with dissatisfaction how, as a result of Church Assembly legislation,
"the diocesan Father in God and pastor, with a limited constitutional reign over his diocese, is being replaced by the prelate with the powers of an administrative autocrat. Almost annually some new Measure of the Church Assembly adds to his power of veto and consent in administrative matters. In England the trend is away from constitutional episcopacy to a monarchical Bench of Bishops …. Yet these anomalies have been created by Church Assembly legislation. It may therefore be supposed that the Assembly is not aware of the full effect of some of the Measures of which it approves."
I submit that the Bishop's veto would be a further instance of this anomalous trend, which, by increasing the Bishops'

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autocratic prerogative, can in the end only weaken their pastoral authority. Neither the trend as a whole, nor this particular instance of it, seem to be in the best interests of the English Church, and I therefore submit to your Lordships that we should not pass this Measure.
5.15 p.m.
LORD SALTOUN: My Lords, I think it is a very long time since I have seen our Bishops' Bench in your Lordships' House so well and so worthily occupied, headed by the most reverend Primate himself. In spite of that fact, I cannot help thinking that this Measure which is proposed to your Lordships is something of a curate's egg; parts of it are quite excellent but there are one or two parts on which I should like my mind to be clear before I give a vote of consent to it. In my lifetime, the ritual practice of the Church of England has altered very much indeed. I very much suspect that its doctrine has also altered a good deal, but that is only a suspicion because I am not such a fool as to engage in doctrinal arguments with my parson. I was brought up ferociously plain, and I defy anybody to call the ritual that is practised in the Church of England to-day ferociously plain. I do not mind: it does not matter to me what other people do; other people please themselves. So long as they do not molest me, it makes no difference to me.
LORD HAWKE: My Lords, if I can interrupt my noble friend for one minute—I know perfectly well that within a mile of your Lordships' House he will find at least one place of worship which he would call ferociously plain, and others which are the other extreme. In the Church of England we have to try to find the one we like among many different types.
LORD SALTOUN: I am greatly obliged to the noble Lord, Lord Hawke, because he anticipated me in making exactly the point at which I was going to arrive, because my view of the Church of England is that it is a national Church. It ought, therefore, to accommodate as many varieties of people as it possibly can within its arms, and my feeling always is that of Erasmus, in that you should define doctrine as little as possible in order to embrace all men in Christianity. For that very reason, I am very much disturbed at the proposed abolition of the jurisdiction of the Privy Council
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in doctrinal matters, because doctrine is a matter very largely of definition and I am perfectly certain that the Judicial Committee of the Privy Council is very much more highly efficient in defining the philosophic meaning of terms than would be an ecclesiastical body—for this reason. The ecclesiastical body must necessarily be orthodox, and, therefore, its mind is occupied by certain definite interpretations, whereas the Judicial Committee will have a very much wider scope.
The quarrel in this matter is really the quarrel of authority against logic, and I will remind your Lordships of a very old story which most of the right reverend Prelates who are listening to me will probably remember. It is of the case of Bishop Colenso, who denied entirely the existence of Hell, and so, of course, was guilty of heresy because Hell is mentioned in the Apostles' Creed, which is enjoined by the XXXIX Articles. He was condemned of heresy and he appealed to the Privy Council. The Privy Council absolved him and let him go clear, and the evening papers of the day announced the fact in glorious headlines, saying, "Hell dismissed with costs". For these reasons, I should be very sorry to see the jurisdiction of the Privy Council abolished.
There is another point in this document which gives me considerable concern, and that is that it is proposed that the Court of Ecclesiastical Causes Reserved should take powers to try the most reverend Primate. What would they try him for? I presume it would be for heresy. I have met with an 18th century case of an Archbishop who was tried for heresy by a conclave of Bishops. He was the Archbishop of Lima. The conclave sat, and I believe his body is said to be beneath the central aisle of the cathedral of Lima; and that was the conclusion of that case. But I think it is utterly wrong that a court should take powers to try, on any ecclesiastical charge, the most reverend Primate. If they did so, what would be the effect? The most reverend Primate is chosen by Her Majesty. A congé d'élire goes to the Chapter and they elect him. On election and consecration he becomes, after the Princes of the blood, the principal subject of Her Majesty in this land and a leading Member of your Lordships' House.

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Supposing he was condemned in heresy, what would be the result? He could walk in here exactly the same. It would have no effect. It would be a most absurd procedure, and in any case I think it would be most indiscreet. To take power to commit an indiscretion is a very stupid thing. What is heresy? Every lively church is full of heresy. One of the saddest, if most amusing, episodes in the 19th century, to my mind, is that Cardinal Newman left his Church and went to Rome because he could not make sense of the XXXIX Articles. Well, my Lords, who can make sense of some of the XXXIX Articles? If you could make sense of them they would not be fit to be articles of religion, because the world and the ordering of the world, in spite of all the Church does, is still a large question mark. And the very fact that you cannot make logical sense of some of the XXXIX Articles is that which fits them for their place, because it is reverence for the things you do not know.
Therefore, to me, the only charge conceivable on which the most reverend Primate could be tried by this new court is that of heresy; and to try him would be absurd. And as I hope that not only my noble friends the right reverend Prelates, but the most reverend Primate himself, are very often guilty of heresies, because it shows that their faith is alive, on that ground, too, I would urge an alteration in this Measure. For those two reasons I think the Measure should be taken back and reconsidered, and I hope that many of your Lordships will agree with me.
5.25 p.m.
LORD CHORLEY: My Lords, I think most of the Members of the House who have taken part in, this discussion this afternoon have been practising members of the Church of England. I do not speak from that point of view. The Church is, in fact, the Established Church, and every citizen is therefore entitled to consider all measures of a constitutional character with which it is concerned. Also I have been asked by friends who are strong members of the Church and lawyers to put the point of view, or, rather, to dot the "i's" and cross the "t's" of the remarks made by the noble Viscount, Lord Brentford.
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Therefore, from that point of view, too, I should like to take up a few minutes of your Lordships' time.
I think the main argument against this Measure is the problem of the veto, which has been well put before your Lordships. But before adding a few words on that matter I would cross swords with my noble friend Lord Saltoun, because I think he got the Colenso case a little bit wrong. I agree that the Colenso case is a very strong argument for the view that the jurisdiction of the Privy Council should be retained in cases of this kind. Colenso was the Bishop Barnes of his time from many points of view, because he was, in fact, one of the most eminent mathematicians of mid-Victorian times, just as Bishop Barnes was one of the most eminent mathematicians of the earlier part of this century; and he was, for his own time, very heretical. I do not think he denied Hell: what he said was that punishment was not eternal. He said that it was not consistent with his conception of the Deity and any really proper conception of the Deity to believe that punishment could be eternal. In mid-Victorian times that was a very unorthodox doctrine. He had, of course, been made Bishop of Natal; and, as I recollect it, the Metropolitan of South Africa, Cape Town, proceeded to remove him from the bishopric. And the basis of his appeal to the Privy Council was not really that doctrinal point at all, but on the basis that the Metropolitan of Cape Town was exceeding his jurisdiction in removing him from the See of Natal. It was on that point the Privy Council ruled.
I think that if the noble Lord will refer to the books on the subject, he will find that, although the Lord Chancellor of the day, who presided in the Privy Council, was popularly said to have "dismissed Hell, with costs", the Privy Council did not, in fact, rule on the doctrinal point at all but on the question of jurisdiction. The value of the case is that it needed the objective consideration of these facts by the Privy Council to deal with this matter in a just way. But heresies which now are held by many very devout Christians, including Bishops, had raised such a feeling of emotional passion, not only in South Africa but also on the part of members of the Church of England and Bishops in this country, that they were not able to take an objective

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view and deal with this matter dispassionately. That, I suggest, is one of the compelling reasons why the Privy Council should be kept in this position in regard to matters of this sort, because they are matters which arouse passions of the most virulent kind, as anybody who has made any sort of study of religious history knows. I think the noble Lord, Lord Saltoun, is quite right in saying that the Privy Council's jurisdiction should be retained, even if he did not get the historical facts exactly right.
This question of the veto is a very important one. The arguments set out by these six lawyers, mostly men of considerable eminence in the law and strong churchmen, have been sent, I think, to all Members of the House, and I do not want to go over that ground again in detail. But it does seem to me that there is a strong case against the Bishop coming in, so to speak, as a legal officer. Surely the Lloyd Jacob Commission were quite right when they said that the Bishop ought to be in these cases as a conciliator, as a higher pastor, so to speak, who sees the complainant and discusses the problem with him and, if it seems to be frivolous, tries to dissuade him from going on with it. But that is hardly compatible with the position of being a judge which is then put upon him. He cannot really do both these jobs, and it is not fair to him to require him to do so. No judge who was on terms comparable with those on which a Bishop should be with the priest in his diocese, would do such a thing.
Quite apart from that, in many cases they are on terms of personal friendship, and probably were at college together. Whether it is a case of an allegation of immorality or heresy, how can a Bishop possibly bring a really objective and fair mind to deal with the situation of deciding whether or not to exercise his veto? Suppose it is a question of ritual; he may be a strong ritualist himself. In those circumstances, some bishops would probably say, "This is a silly objection to ritual; I am going to veto it". Others would fall over backwards, in order to try to show that they were being fair, and would go to the other extreme. The great difficulty in a situation of that kind is exercising a judicial function at all.
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In this House there are many of your Lordships who are justices of the peace, and you know perfectly well—I have had it happen to me—that if a case comes before the bench in which you know the accused you immediately say, "I cannot sit on this case; I know the accused". Yet here there is exactly the opposite position: a Bishop knows the accused as one of the priests in his diocese—a man who may be one of his oldest friends—and he is called upon to exercise the veto. Really, my Lords, it is not good enough. Surely the Lloyd Jacob Commission took the only proper view in this sort of situation. As we have heard so often, justice should not only be done but should be seen to be done. This is emphatically a case, where if this proposal goes through, that important principle will be broken.
There are many other points in regard to this matter which are predominantly ecclesiastical. The composition of the Reserved Court itself. It is true that in an exceptional case where there is a petition to the Crown there may be three bishops and two laymen; but in the ordinary case, as I pointed out when asking the right reverend Prelate about Section 5, the tribunal is predominantly ecclesiastical and not lay; and that is so in regard to other points, as pointed out in this Memorandum by the lawyers. So there are really quite a number of serious objections to this Measure as it comes before your Lordships this afternoon. They can be quite easily put right if the Church would take the Measure back and correct it. As most of it is unexceptionable, I am certain that there would then be no difficulty in persuading your Lordships to accept it.
5.35 p.m.
VISCOUNT ASTOR: My Lords, I wish to say a very few words in general support of this Measure. I do not think it is fair to say that it has been rushed on this House. It is the result of a very long period of thought, deliberation and prayer, and it is not necessary for one to have read Church literature—it is enough to have studied merely the responsible Press—to have followed how, over the past two years, this Measure has been worked out. There has been ample opportunity to know its contents.
I think the cause which is closest to the hearts of most Christians to-day is

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the reunion of the Christian Churches. We know that it may not take place in our lifetime, but we also know that in the last few years there has been a change extending through the whole spectrum of Christianity to an increase of charity and a desire for unity. One of the obstacles to unity has been the fact that it is hard for Churches to get together when one of them is subject to essentially political control—a control that may be exercised by Governments which have a very small Christian element in them. That fact was recognised in the Report of the Commission of the Church of England and the Methodist Church sitting under my own diocesan Bishop, the Lord Bishop of Oxford, when the Church of England representatives frankly acknowledged that one of the reasons why the Nonconformists had separated from the Church was that they had objected to the fact that there was a political control (political in a broad sense) over what should be a spiritual society, and that in the long run the Church would have to become again a spiritual society rather than a part of the temporal structure of a political country.
That is equally true in the international sphere. One cannot imagine that if there is to be reunion of Christianity it will be easy to fit in Churches which depend on the Government of some particular country. It can be done only on a universal basis. If that is so, this Measure surely is a tentative but proper step in that direction. With an immense number of safeguards it allows the Church to be more mistress of her own house, but while there has been a great lay element in it, an element appointed by the Crown in this Act, it is moving towards giving more control over its own affairs, becoming a more self-governing spiritual society and less dependent on Parliament.
After all, we know, I think, that one of the reasons why Parliament controlled it was that, at the time of great ecclesiastical fighting, when the aim was to make a line and to say "This is the line you have got to follow"—after the days of the great civil wars, and so forth—was to prevent moves to the right and to the left, if I may use those terms. Now that has changed. Far from trying to be restrictive, the Church is trying to extend hands both to the right and to the
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left towards reunion. I know how strongly some noble Lords, for whom I have the greatest respect, feel on this matter, but those of us who have been brought up in this century have always felt that one of the greatest obstacles to our minds and consciencies was to see denominational strife. Those of us who have lived some time abroad in countries where the Christians form a small minority have always thought it a most awful thing to see the Churches of Christ, instead of loving each other, always pulling at each other and rivalling each other.
Equally those of us who were brought up not in the age of the last century, when everybody was assumed to be Christian, but in the twentieth century, where Christianity has had every form of intellectual and materialistic, agnostic and atheist attack, the Church can no longer, if it is to hold out against attack, afford the luxury of internal denominational strife within the Church. In the end, if it is to play its role it must be an international spiritual society not dependent on Governments; and this Measure is, I think, with great respect, a move in that direction. Obviously if any of us had to draft it, we could each have done it better. But in the end, my Lords, I think it is right that the Church, which has spent such a long time on this, should have the support of this House. The amount of opposition is extraordinarily small, considering how wide and independent the Church is, and it is right that this House should express its confidence and support this Measure.
5.40 p.m.
LORD GRANTCHESTER: My Lords, I am glad that the noble Viscount, Lord Astor, has spoken as he has done, because he has been the first to bring out the wider implications of this Measure. This is why I regret that we did not have a greater opportunity to consider these implications and discuss them, and I hope even now that this Measure may be withdrawn to-day and brought up for fuller discussion when these matters can be more fully dealt with.
The right reverend Prelate, the Lord Bishop of Chester, showed great skill in introducing this Measure but he made no reference to its far-reaching implications—he did not even mention them. What are these implications? Surely this

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is the first step in an attempt to bring the government of the Church within its own jurisdiction. Whatever the merits of this wish—and I agree largely with what the noble Viscount, Lord Astor, said in this matter—the question of Establishment could become involved. It seems to me, therefore, that much longer time should be given for the consideration of this first move in what is really only one of a series of Measures which are being prepared before we are asked to accept it to-day.
5.42 p.m.
THE LORD CHANCELLOR (LORD DILHORNE): My Lords, I cannot share the view of the noble Lord who has just sat down that the right reverend Prelate did not give a perfectly clear, full and complete exposition of this Measure. I cannot really share his view that this Measure is the beginning of an attempt to bring the government of the Church within its own jurisdiction as a step towards Disestablishment. It really is no such thing. You have only to look at the Measure to see that.
One interesting thing about this debate has been that no one has challenged for one moment the need for the reform of the ecclesiastical courts. That appears to be completely common ground. I entirely support the view that the time has come when there should be large-scale reform of the existing courts. The right reverend Prelate, in moving this Motion, referred to the fact that there had been full consultation with all Government Departments. I know that there was full consultation with my predecessor at all stages. If there be, as I think there is, an unanswerable case for reform of the existing machinery so far as ecclesiastical jurisdiction is concerned, then it must be a matter for the Church Assembly to tackle. That is their function; Parliament has delegated it to them. It is quite clear, from what the right reverend Prelate said, that they have spent a great deal of time and have gone to infinite trouble to try to devise a satisfactory form of procedure for the modern world and for the modern Church.
I do not say that if we had this Measure before us as a Bill and were asking for a Second Reading there would not be a long and interesting debate on various
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points in that particular Bill—the kind of point raised by the noble Lord, Lord Saltoun, and many other points. Views on those will differ. But Parliament has delegated to the Church Assembly the task of producing this kind of Measure, which is a most important Measure. I do not think any of us would wish to minimise its importance. But, having done that, then surely when we are asked to approve it we cannot subject it to the kind of examination to which we subject a Bill on Committee. We have to look at it broadly and to say whether or not we are in favour of the principle which is embodied in it; and I certainly am in favour of reform of the ecclesiastical courts.
EARL ALEXANDER OF HILLSBOROUGH: My Lords, may I interrupt the noble and learned Lord the Lord Chancellor? While I agree with the general opening of his speech, I really cannot hold with that last argument, if we have a Motion to resolve, either for or against its approval, and there is no right to amend, however favourably we might amend it, that is quite unreasonable.
THE LORD CHANCELLOR: My Lords, that may be quite unreasonable, but it is the present position with regard to the law.
EARL ALEXANDER OF HILLSBOROUGH: Exactly.
THE LORD CHANCELLOR: The law is, our having delegated this function to the Church Assembly—and no one can suggest for a moment that the production of this Measure is not within the powers of and, indeed, part of the task of the Church Assembly—under our Constitution it is then for Parliament to say "Aye" or "No" whether it approves of the Measure. I do not think there is any dispute between the noble Earl and myself about that.
The point I was making was that we must go to the substance of the matter. There may well be in this important Measure different points on which there are different points of view. Indeed, it was interesting to hear the noble Viscount, Lord Brentford, say that there were a number of points on which he felt doubt. The noble Lord, Lord Chorley, said the same. But both of them fastened really on the one point, the point of principle which led them to the

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conclusion that this Motion should not be carried. There was no real criticism, I think, from either of them as to the constitution of these courts. There was some criticism from the noble Lord, Lord Saltoun, of the fact that the Judicial Committee would lose its jurisdiction, but of course there will still remain on the court which takes the place of the Judicial Committee three Lords of Appeal constituting the majority of that court.
The point of principle on which so much weight has been placed in this debate is what has been referred as the Bishop's veto. I do not speak as any expert in this particular field, but I have had experience over a number of years of having to try to deal and cope with vexatious litigants—people who have a firm belief in the rightness of their case and who will pursue it over the years to the bitter end. We have in our own courts, in our own judicial system, a procedure whereby we can stop vexatious litigants. I have often had to put it in use. It is a painful process, because those people who are vexatious litigants so often believe most sincerely in the righteousness of their cause.
I, myself, believe that if you are going to have this new system of ecclesiastical jurisdiction there must be some veto upon what I would call ecclesiastical vexatious litigation. I do not believe it can be dismissed out of hand, as it was by the noble Viscount, Lord Brentford, who referred to the categories of people who would make complaint, because you can get feelings running high over the most trivial matters, and again they are pursued to the bitter end. If someone is going to have the veto—if that is accepted—in whose hands should the responsibility for its exercise rest? That, I imagine, is the question which gave the Church Assembly a considerable amount of difficulty, and to which a considerable amount of thought has been attached, and their decision is that it should be exercised by the Bishops. If you are going to create this particular system of courts supported by the Bishops, I find it difficult to believe that they, because of any personal views of theirs, would stop any proceedings from coming before these new ecclesiastical courts for the resolution of some particular difficulty.
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I did not intend to speak for very long on this because I am not really fully qualified to do so, but I should like to conclude by saying this. This Measure is the result of many years of effort on the part of many people. It commands, I think I am right in saying, a tremendous amount of support. The real criticism of it has been on account of the Bishop's veto. I think that there must be some veto, and if that veto is wrongly or improperly exercised I think that we can leave it to the Church Assembly to bring in an amending Measure.
5.50 p.m.
THE LORD ARCHBISHOP OF CANTERBURY: My Lords, the right reverend Prelate who has introduced the Motion has already made my apologies for absence during part of the debate on account of an urgent engagement; and I especially regret having missed the concluding part of the speech of the noble Earl, Lord Alexander of Hillsborough. I know that he will forgive me. I always listen to him with great admiration for the depth of his Christian convictions. He and I differ in many things, but when we both go very deep down we find that the things which we share matter far more than the things on which we sometimes have argument.
I should like to ask your Lordships to step back a little and see the matter in rather larger historical perspective than has been mentioned hitherto in this debate, because the particular need of the Church with which this Measure is concerned is connected with a number of other needs of the Church which have been very evident for some time. If we go back to the year 1906, there appeared in that year the Report of the Royal Commission on Ecclesiastical Discipline, a weighty Report which dealt comprehensively with many aspects of of the life of the Church. The findings of that Report were, in their main aspects, twofold. First, it was urged that there should be a restoration of order and discipline in the Church. Second, it was urged that there should be reform of the Church's law on public worship so as to make that law more contemporary in view of the Church's living needs. Those two things, in the judgment of the Royal Commission, went together then, and go together

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still; and I do not believe that they can be separated.
The task given to the Church by letters of business consequent upon the Report of 1906 was a very formidable task involving a long process. In that process there were a number of frustrations. I need not recount the history of these frustrations. The years 1927 and 1928 are a sufficient symbol of what those frustrations were. However, after the last war the Church of England, under the leadership of my predecessor, Archbishop Fisher, set about a comprehensive process of reform dealing with a number of needs of the Church which cannot really be separated. One of those needs is the establishment of workable courts, and the Measure before your Lordships' House deals with that. A second parallel need is for the reform of the law of public worship. That is a complicated matter, and it is our intention to bring before Parliament measures to enable that reform of public worship to take place, not by the method of a comprehensive revision all at once, as in 1927, but by the method of experimental variations for which we will ask for Parliamentary sanction—the sanction for such variations to be made for experimental periods under the Convocations, and, be it noted, the House of Laity as well.
These matters, in a way, all go together—with this difference. The reform of the courts, though it is as complicated in appearance as the Measure now before the House, is far more simple in that it is a thing that, if rightly done, legislation can carry out on one occasion. The reform of public worship is, however, a very much slower and more complicated process, a process that will be spread over a good many years. None the less, the two matters of the reform of worship and the reform of the courts go together in the sense that it is no use having up-to-date courts which litigants are going to use unless you also have an up-to-date law to be worth while using. Equally, it is not much use having, an up-to-date law of public worship unless you have courts with the necessary sanctions behind them. But it is just because it is very difficult to correlate these two things, and because the reform of worship is a very much longer process, that the difficult matter
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of the Bishop's veto has come into the field.
What is the real point of the proposal about the Bishop's veto? The real point, I think, is that until there is a total and complete reform of the law of public worship many things will go on being illegal, both serious things and minor things; and the Bishop's veto is a necessary institution to prevent really vexatious, and perhaps trivial, litigation from occurring in the parishes. I believe that that veto will greatly help the process of order and reconciliation, a process which must always be partly legal and also partly pastoral. It is impossible for it to be wholly one or wholly the other. I believe that the Bishop's veto will maintain that true character for it.
One more thing to which I would refer is this. The noble Lord opposite me referred to the question of Establishment; and, if I understood him rightly, he hinted, if he did not actually say, that this Measure was one of a number of things which might progressively lead to the Disestablishment of the Church. I believe that that is a misreading of the situation. I believe, on the contrary, that this Measure is one of several things which are a necessary condition for the effective continuance of Establishment and the connection of Church and State in this country. Establishment will continue if certain modifications are made in its working, and I believe that this Measure imperatively embodies one of those modifications. I would conclude with a reference to the powerful plea made by the noble Earl, the Leader of the Opposition, and say that, if your Lordships are moved by his plea to reject this Measure, the law and order which he so greatly desires in our national Church will not be improved by one whit, but will, indeed, be greatly hindered.
EARL ALEXANDER OF HILLSBOROUGH: My Lords, I have not asked for your Lordships to reject this Measure to-day. I have moved that the debate be adjourned for the specific reason that I might then have consultations with the Leader of the House, who I hope will consult with the Bishops, so that there may be adequate time for study and, afterwards, to debate the issue.
THE LORD ARCHBISHOP OF CANTERBURY: All that is true, but I am sure, my Lords, that we were in no doubt whatever as to the view of the noble Earl on what ought to happen to this Measure—no possible doubt whatever, in words and arguments, if words and arguments mean anything.
LORD SHEPHERD: My Lords, may I just put this point? I supported my noble Leader, but it was not as the most reverend Primate has said. I supported him entirely on the question of procedure, and I do not wish to be identified with the remarks that he has made.
THE LORD ARCHBISHOP OF CANTERBURY: I referred personally to the noble Earl, partly because of my very great regard for him and partly because of the great power of the speech he made this afternoon. But let me retrace my steps and speak in reference to all those who have opposed this Measure, or have argued for its rejection or delay. To them, my answer would be that by rejecting or delaying this Measure you will not be promoting law or order in the Church by one whit. On the contrary, you will be frustrating a number of the other processes also, which, altogether, are needed for the restoration of law and order and efficiency. The other thing I would say is that by passing this Measure I believe your Lordships will be passing something which embodies one of those conditions upon which the connection of Church and State cart effectively be continued for the good of the country and also for the co-operation of all the Christian Churches in, our land.
6.2 p.m.
THE LORD BISHOP OF CHESTER: My Lords, those of us who have the welfare of the Church and its good order at heart will be very grateful indeed for the serious way in which this House has debated this Measure. I do not think it is necessary for me to go into the detailed points that have been made, because I dealt with many of them in my opening speech. I can assure the House that as we in the Church Assembly went through this Measure, clause by clause, day after day, all these matters were raised, there was a very free expression of opinion, and we came to a mind on each of them. If we were to go over all of this again,
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there would be reasonable and legitimate differences of opinion and we should have to try to find some way through them. We believe that this Measure does so.
I think I ought just to make one point about the Court of Ecclesiastical Causes Reserved. In the past, these doctrinal cases have been bedevilled by the fact that they took place in a criminal atmosphere. We are hoping that this court is going to lift the whole thing up into quite a different sense and feeling, so that these matters of doctrine and ceremonial will be treated more as in a court of arbitration than a man upon his trial for misdeeds. I hope that the noble Viscount, Lord Brentford, who made such a reasoned speech, will realise that that is our hope for this court and that now that we have got this court of inquiry which will look into the matter if the Bishop allows it to go forward, the Bishop will be much less inclined to impose a veto except on something which is of very minor importance.
I think we are all extremely grateful to the noble Viscount, Lord Astor, for the note which he struck in his speech. What we want from this Measure is peace in the Church; and we also believe, as he pointed out, that it will lead also to peace with other Churches, eventually. We have wrestled with this matter, we have worked upon it and we bring it now to Parliament in the firm conviction that this is going to bring into the Church that peace and order which the noble Earl so earnestly requires. We hope, therefore, that your Lordships will overwhelmingly give it your consent.
EARL ALEXANDER OF HILLSBOROUGH: My Lords, before the noble Lord the Lord Chancellor puts the Question, in view of the way things have been put to me by the most reverend Metropolitan and the Lord Bishop of Chester, may I say a word? I think that I have a right to speak on the Motion.
THE LORD CHANCELLOR: My Lords, I understood the noble Earl to speak after the Motion had been moved by the right reverend Prelate. I thought that he spoke to that Motion, and at the end of his speech put his Amendment. I am young as a Member of this House, but I should myself have thought that the noble Earl, having spoken then, had already spoken to this particular Motion.
EARL ALEXANDER OF HILLSBOROUGH: I do not agree. We had a Division upon our Amendment to postpone the debate, and it was in order to get support for that Amendment, which support came from both sides of the House in the Division Lobby, that I made the speech I did. However, I am not going to make a speech, but would say just a word in reply to the points that have been raised by the most reverend Metropolitan and the Lord Bishop of Chester. We are asked this afternoon to approve, without amendment, this Measure as a whole. We do not wish to hold up the Measure at this stage, in view of what has happened, because none of us has had sufficient time to study the matter in order to be able to give a sensible vote. I will take no further action at this stage, but it must he obvious that those of us who have spoken, not on behalf of our particular Party but upon our own individual views, will have to ask for time to have the matter discussed.
On Question, Motion agreed to, and ordered accordingly.

LONDON GOVERNMENT BILL
6.7 p.m.
Order of the Day for the House to be again in Committee read.
Moved, That the House do now resolve itself into Committee.—(The Lord Chancellor.)
House in Committee accordingly.
[The LORD MERTHYR in the Chair.]
Clause 9, as amended, agreed to.
Clause 10:
Traffic regulation in Greater London
10.—(1) Subject to subsections (4) to (7) of this section, the Greater London Council (hereafter in this section referred to as "the Council") may by order make provision for controlling vehicular and other traffic (including foot passengers) on roads in Greater London, being—

(a) roads other than trunk roads; or

(b) trunk roads with respect to which the Minister of Transport has consented to the making of the order in question,

and in particular, but without prejudice to the generality of the foregoing words, for any of the purposes, or with respect to any of the matters, mentioned in Schedule 4 to the
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Road Traffic Act 1960 but no such order shall contain any provision for regulating the speed of vehicles on roads, and paragraph 16 of the said Schedule 4 and section 62 of the London Passenger Transport Act 1933 shall cease to have effect.
(4) Before making any order under subsection (I) of this section otherwise than in pursuance of a direction given by the Minister of Transport under subsection (7) there of, the Council shall consult with the appropriate commissioner of police
(8) The Greater London Council as well as the Minister of Transport shall have power to make an order under section 11(1) of the Road Traffic Act 1962 (which relates to speed limits on roads other than restricted roads) as respects any road in Greater London other than a trunk road.
LORD SHEPHERD LORD SHEPHERD moved, in subsection (1), to omit all words from and including "being", down to the end of paragraph (b). The noble Lord said: On behalf of my noble friend Lord Lindgren, I beg leave to move this Amendment. The purpose of this Amendment is to delete from Clause 10 of the Bill the reference to trunk roads. In effect, this would mean that the Greater London Council would be responsible for all roads within their area. The position at the present is that the Minister retains the control, the authority, for trunk roads; the Greater London Council will be responsible for metropolitan roads; and the boroughs will be responsible for the local classification. The Royal Commission, as the noble Lord, Lord Chesham, will be aware, recommended that the traffic authority (which in this case is the Greater London Council) should also be the highway authority. Therefore, we have the fact that, in this Bill, the Government have departed from those general recommendations by having, in effect, three different road authorities.
Last night I spoke of the need for a strategic plan to take into account the development within the Greater London area and the development outside. On that occasion I stressed that what I conceived as a plan was something not necessarily fixed but something which should be flexible. The noble Lord, Lord Chesham, in his reply, referred to the five-year plan of the London County Council. He also said that it would perhaps not be appropriate to require the Greater London Council to adopt a blueprint or plan for the Greater London area, because,

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as he said, it would not be possible for the Greater London Council as a traffic authority to plan what in five years' time might he required as a one-way street or something else. I would refer the noble Lord, Lord Chesham, to the point I made (and I recognised this difficulty) when I described the need for strategic and tactical planning. Tactical planning obviously would be something that would have to be adapted perhaps month by month or season by season. Certainly I did not advocate that there should be a fixed plan to such an extent that no changes were possible.
At present within the London County Council area, the central part of London, we have no trunk roads. The main and arterial roads in the centre come within the orbit of the boroughs, with the London County Council as the improvement authority. The trunk roads that will come within the definition of Clause 10 are trunk roads that are in the boroughs of the counties that are now going to be brought into the Greater London area. The extraordinary position within the Greater London area is that we will have some of the main trunk roads under the Minister which, as soon as they enter the present London County Council area, immediately come under the Greater London Council. I frankly do not understand this.
I do not see why, at this stage (taking into account the fact that the road is the same; it carries the same type of vehicle) there should be a clear division between the Minister's responsibility and that of the Greater London Council. I quite recognise that the Minister has undertaken that consideration will be given to the transfer of these trunk roads to the Greater London Council. But this is no firm promise; it is an indication of what is in the Minister's mind and is subject to correction. If the Minister maintains the trunk roads in the Greater London area and the Greater London Council does so in the central part, the present London County Council area, we may have the strange position of the Minister of Transport widening and developing the trunk roads in the existing county areas with the Greater London authority perhaps doing nothing. We will then have the case of wide roads up to one point entering into a narrower type.
This type of development, if it can be called development, can be seen on
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many of our main roads in different parts of the country, not only in London, and they depend on the authority who is responsible for the roads. This type of sudden narrowing is a very grave risk to traffic and a cause of accidents. Above all—and this is what we are interested in to-day, if we want a fast, free flow of traffic—it is essential that the character of the road remains the same. I would suggest that there is no likelihood of a uniform development of trunk roads with this division of responsibility. I would suggest you have a choice here: trunk roads and arterial roads in the area should either come within the Minister's responsibility or that of the Greater London Council. I would suggest with all sincerity that there is no case for a division.
I could amplify this by an illustration. I would suggest to the noble Lord, Lord Chesham, that he should look at the development in Holland, where there are really wonderful roads. There you will find that the main roads, even though they drive right through the main cities, are the responsibility of one authority. There is no division. When one sees the fine motorways in Holland and elsewhere in Europe, I would suggest one appreciates there is an overwhelming case for us to adopt the same system in London; that is, one authority. The Committee must make up their mind whether it should be the Minister of Transport or the Greater London Council.
I would now raise with the noble Lord, Lord Chesham, the question as to the cost of these roads. At the present moment the Minister, I believe, makes a 100 per cent. grant in relation to trunk roads in the counties. If the Minister agrees to handing over to the Greater London Council the existing trunk roads within the area, is the burden to be placed upon the ratepayer in the Greater London area—or are these roads still to continue to receive the 100 per cent. grant which the authorities now receive for this type of road? I would suggest, in fairness to the taxpayer of London, that there is a very big case for this class of road to be a national cost. These are, in fact, national roads. They are the roads on which the traffic, commercial and private, seems to centre. As I have said, all roads seem to lead to London.
I would suggest that, if these roads are to be developed to carry the kind of heavy traffic they are carrying to-day and will undoubtedly carry in the future, the cost of this development should be borne by the nation as a whole. I would agree that, in the Bill, it would be possible for trunk roads to become metropolitan roads; that is, if the Minister agrees. But supposing we wish to turn an existing metropolitan road—a road that is classed as a class 1 road and is at present, within the Bill, to be the responsibility of the Greater London Council—into a trunk road. Supposing that road has to be developed to take the type of heavy national traffic that existing trunk roads carry. Will it be possible, with the Minister's consent, to transfer that class of road into the category of trunk road in order that the full grant will become available to the Greater London Council? As I see it, such a provision is not within the Bill. No doubt the noble Lord, Lord Chesham, knows more about this particular section than I do. I have had to look at the Bill broadly. But I have not been able to detect whether it would be possible to turn a metropolitan road into a trunk road in order to receive the full grant.
I would beg the Government to remember the words I spoke last evening, even though we lost our case in the Division: the Greater London Council, if it is to produce a strategic plan and to develop, must have within its control those roads which are suitable and can be developed to carry the heavy traffic which we know will grow up in London. I beg to move the Amendment.
Amendment moved—
Page 10, line 44, leave out from ("London") to the end of line 3 on page 11.—(Lord Shepherd.)
6.20 p.m.
LORD CHESHAM: I was very relieved to hear the noble Lord stress, towards the end of his speech, his understanding of the true position of trunk roads as roads of overall national importance, because that is the whole point. It is part of the inherent concept of trunk roads that they are of national rather than of local importance—and I use "local" there in quite a wide sense—and, therefore, it has always been accepted that the Minister should not only build and maintain them, but also
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control their use by traffic. The Minister has power to regulate the traffic of trunk roads elsewhere in England and Wales, wherever it may be, and, quite frankly, in general, I still do not see any special reason why he should not have that control in London.
If, as he says, the noble Lord fears that there will be some kind of different approach on the planning of future roads between the Minister and the G.L.C., I can give him an assurance here and now that the Minister would certainly consult the G.L.C. before he carried out any trunk road improvements. That is the kind of consultation which goes on with the L.C.C. at present on co-ordinating plans. The A.2 is an example of that; and it is taking place in regard to other proposals. I assure the noble Lord that it is not a question of two independent authorities not working together in these matters. These roads are at the moment, as he said, constructed and maintained 100 per cent. at Government expense. Merely as a technicality, I would observe that it is not a question of 100 per cent. grant aid; it is paying for the work, because they are the Minister's roads.
LORD SHEPHERD: The authority builds them.
LORD CHESHAM: Yes; the authority builds them. It is a slight technicality, because it is not just a question of changing rates of grant. That is why I have made what is rather a small point. If in the normal way trunk roads were de-graded (if that is the right word) to become metropolitan roads, the grant would become, in common with that for other metropolitan roads, 75 per cent. If the argument is that they should attract a grant of 100 per cent. from the Minister, then I think perhaps the argument might also be that they ought to remain trunk roads. I do not think it is right that in the case of trunk roads the G.L.C. should, even theoretically, be able, for instance, to prohibit their use by a class of vehicle for which perhaps they may well have been designed.
I think it will help—I hope the noble Lord will not mind—if in assessing this problem I go a little further into the actual detail of what we are talking about in this problem of trunk roads. As drafted, the Bill proposes no alteration

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in the pattern; and it is that pattern with which I am concerned. At the moment there are about 130 miles of trunk roads, all of which are in fact, as the noble Lord said, outside the present L.C.C. area. But they are, of course, within the proposed area of the G.L.C. I am thinking of roads like the North Circular Road, the Cromwell Road extension, Western Avenue, Eastern Avenue, and so on. For the moment they will remain the responsibility of the Minister; but it is by no means the Minister's intention that this pattern should necessarily remain unchanged. When the results of the survey are available, there will be a review as to how the pattern of trunk roads should relate to the metropolitan roads, which will be the responsibility of the G.L.C. That review will, therefore, have to be carried out in conjunction with the G.L.C., which will naturally be closely involved with it. They will have to consider the question of the financial responsibility mentioned by the noble Lord.
The sort of pattern which the Minister feels may well emerge is that there should be trunk roads into and as far as the North Circular Road and South Circular Road, when it comes into being. It is also possible that it may be felt better that the trunk road should terminate further out—at what, for instance, will be the North and South Orbital Roads. That might be a better pattern when we get a little nearer having them. I suppose we might even end up by not having any trunk roads in the area at all, although I should regard that as unlikely. All in all, it seems better not to try to settle now once and for all where the trunk roads should go, because changes, either one way or another, that the noble Lord asked me about, can be made under Section 7 of the Highways Act, 1959. That power is not in this Bill, because it is in that Act.
The noble Lord told us that what was in the Bill was contrary to the recommendations of the Royal Commission. According to the copy of the Report that. I have here, that is not quite correct: because on trunk roads in the area they have this to say under conclusion (6) on page 119:
"The Minister of Transport should settle after consultation from time to time whether any or if so which roads should remain or become trunk roads."
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That is exactly how the Bill has been drafted. In view of what I have said, I hope noble Lords will think that to leave the Bill alone is the best way to proceed.
LORD SHEPHERD: May I refer the noble Lord, Lord Chesham, to paragraph 779 of the Report of the Royal Commission? My case is that the Royal Commission recommended that there should be one highway authority and one traffic authority. In paragraph 779 they say:
"We have no doubt that all these matters should be the responsibility of the Council for Greater London, and that these powers should apply to all streets and roads whether main roads or otherwise, the Council being free to use Boroughs as its agents for the execution of works of this nature. We can see no other solution."
They go on:
"If it is not adopted, the alternative seems to be for central government to assume dictatorial powers."
In a later paragraph, dealing with planning and housing, they say quite clearly that the responsibility for constructing, improving, maintaining, lighting et cetera should be with the same authority as for traffic. I submit, as I said yesterday, that the Government have adopted not one authority, but three authorities: the Minister for the trunk roads, the Greater London Council for those metropolitan roads defined in Schedule 7, and the boroughs.
The noble Lord, Lord Chesham, said that I need have no fears that there will not be conformity between the Minister's development of the trunk roads within the Greater London area and that of the Greater London Council. I hope that will be the case. But the evidence is in the Report of the Royal Commission where there was—I will not say a dispute, but a difference of opinion in regard to the Hammersmith flyover. That was a case where the Minister wished to proceed with the development of a trunk road system, and the local borough council were not prepared to proceed because they felt that the cost would be too high and too heavy upon the local ratepayers. If the Royal Commission are correct the London County Council did not feel that they were in a position to press the Hammersmith borough to proceed with the work. How many years did we have to wait until the Minister was able to go ahead with the Hammersmith flyover?

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This is a fact, and I am glad the noble Lord, Lord Chesham, can give us the assurance that there will not be similar delay in the future. But we have had this evidence, and there is other evidence throughout the country of what happens when the Minister does not see eye to eye with the local authority, or the other way round.
I still believe—and to me this is a matter of principle—that if we are going to develop these main strategic roads through London, they should be under the control and under the developing power of one authority. I hope that the noble Lord, Lord Chesham, is right, although I had a little doubt—or I may have taken his words wrongly. I understood that it was the Minister's intention to hand over these trunk roads in the existing counties to the Greater London Council. I thought that in his speech the Minister gave an indication that that might not be the case. He said that he might retain the trunk roads to the North Circular Road. That would still be well within the Greater London area. True, in the case of the South Orbital Road, that again would be well inside the Greater London area. If the area which the noble Lord gave this evening covers the North Circular Road, it is clear he does not intend to hand these trunk roads over to the Greater London Council. If I am wrong, perhaps he will correct me; but that was my understanding. I think this would be utterly wrong. I do not know whether the noble Lord, Lord Chesham, has anything further to say.
LORD MOLSON: I cannot think that the provisions of this Bill should make any fundamental change in what has been the generally accepted principle of the administration of roads in this country. Ever since the Act of the '30s introduced by Mr. Hore-Belisha there are certain roads which are regarded as being of great national importance, and there are trunk roads which are the responsibility of the Minister. It has been generally accepted by Ministers of Transport, of both political Parties, that there are other roads which are more suitably administered by, and which are the responsibility of, the local authorities. All that is being done in this Bill is to apply the same principle in the case of the new authority that is being created.
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Of course there are certain difficulties which arise where a road comes from one part of the country into a built-up area, and there is a change in its responsibility. That is a problem which has been with us for the last 25 years. The fact that the Minister exercises final authority by being able to withhold the grant results, in the last resort, in his being able to insist that the policy of the local authority is acceptable to him. I suggest that there is no fundamental change in this respect; that it has worked reasonably satisfactorily in the past, and that it should continue to do so under the provisions of this Bill.
LORD CHESHAM: I am grateful to my noble friend for what he has said. I have only a short word more to say, because I think the noble Lord would agree that we do not want to get into a prolonged argument as to the precise meaning of the Royal Commission's Report on this Amendment. Apart from the fact that the South and North Orbital roads come outside the Greater London Council area—this is just for the record—
LORD SHEPHERD: South Orbital?
LORD CHESHAM: Yes. They do not exist yet. I said the South and North Orbital roads.
LORD SHEPHERD: I thought the noble Lord meant the South Circular Road.
LORD CHESHAM: The point I wanted to make is that the noble Lord must be sure about the differentiation he is trying to make between traffic authority and highway authority in these recommendations. The Royal Commission recommended that there should he in the area an overall traffic authority: that the same authority should be the highway authority for what we now call metropolitan roads, and that the highway authority should be the borough in which it lay. I think the noble Lord must agree that that is so. They then added a further recommendation about trunk roads, which I read out. Therefore, I think I am right when I say that this Bill is drafted strictly in accordance with the recommendations of the Royal Commission.
LORD MORRISON OF LAMBETH: Could the noble Lord tell us the distinction between a "circular road" and

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an "orbital road"? As this is language which has cropped up since I left the Ministry of Transport a long time ago, I do not know the difference.
LORD CHESHAM: They are the names of different road schemes. It is as easy as that. I do not know whether the noble Lord wishes to go into the etymology and derivation of words, but he knows, I presume, where the North Circular is.
LORD MORRISON OF LAMBETH: Yes; and the South.
LORD CHESHAM: The South and the North Orbital Roads are planned roads in a great are round London, further out than the Circular roads. I do not know quite how to differentiate, except that an orbit is usually taken to be rather wider than a perimeter. At the moment, there, is a gentleman up there who could tell us more about that.
LORD SHEPHERD: Will it be possible, with the consent of the Minister, for a metropolitan road to be converted to a trunk road because it is a national road? If it becomes a trunk road and the Minister retains his powers, then it would receive the full grant.
LORD CHESHAM: I thought I had answered that point, but perhaps I did not make myself clear. As I understand it, the Section 7 power in the Act to which I referred would enable the Minister to do that; and, naturally, he would do it by agreement. If he then took it over, he would have to pay 100 per cent. for it.
LORD CROOK: I thought I knew what an orbital road was, but now I am not very certain. As I understood it, the North and South Circular Roads were roads used by people to get around London without going through the middle. As I understood the original conception, I thought the orbital roads were roads which would never permit traffic to come into this city, but would take it around. As I understood it, the orbital road would go right round London. It might even feed the Dart-ford-Purfleet tunnel and so on. Is that the kind of thing? I think it is rather important to know, because some of the arguments which my noble friend has
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advanced on the chargeability and the relationship might turn on that definition.
LORD CHESHAM: It would not, because it is not intended to be a definition; it is the name of an actual planned road scheme. It is to take the traffic around London, without going through swiftly and efficiently. There is no magic in this word "orbital". It just happens to be the name which was given to that road: it is not a classification or category of road. It might have been called the Outer Circle or some other appropriate name; but it was thought appropriate to call it the North and South Orbital road. There is no more magic to it than that.
THE EARL OF LUCAN: I do not want to go into this fascinating discussion on whether a circle is a circle or an orbit an ellipse, or what kind of thing it is. I want to ask a simple question of the Minister. Speaking as a Londoner, and in view of what the noble Lord has said about the responsibility for road planning and for deciding the trace of new roads in the London area, what happens if the inhabitants of a certain London borough object to the surgical operation needed for a trunk road to be taken through their neighbourhood? Where there is a conflict between local interests and the Ministry of Transport how is the matter discussed, and who decides?
LORD CHESHAM: That is a very hypothetical question.
THE EARL OF LUCAN: Not at all, it has happened continuously.
LORD CHESHAM: It is a hypothetical question because the noble Lord heard what I have been saying about trunk roads: that the question of bringing roads through London is extremely unlikely to arise.
LORD MORRISON OF LAMBETH: Good!
THE EARL OF LUCAN: The trunk roads entering the Greater London area must deliver their traffic somewhere. There must be roads sufficient to carry that traffic to its destination. Those roads may involve considerable building of new roads or straightening of roads in London. What happens when the local inhabitants

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do not want to be disturbed for a major road to be driven through their area?
LORD CHESHAM: They make representations to their borough in the normal way.
THE EARL OF LUCAN: And to the Greater London Council, or to the Minister?
LORD CHESHAM: It depends on the road. As I say, it is extremely unlikely
Resolved in the negative and Amendment disagreed to accordingly.
LORD SHEPHERD: The purpose of this Amendment is to obtain an explanation from the noble Lord, Lord Chesham, as to the effect of the words in Clause 10, page 11, lines 23 and 24. They read:
"and shall be exercisable by order made by statutory instrument instead of by regulations".
I have made one or two inquiries in many quarters of this House, and also taken expert opinion, and I have been told that there is in fact no difference between a statutory instrument and a regulation. If that is the case, I wonder whether there is some subtle meaning in this expression in the Bill. Perhaps the noble Lord will inform us, in regard to a statutory instrument, whether it will be dealt with by Affirmative or Negative Resolution.
that they will find a trunk road coming through. It may be a question of the improvement of a metropolitan road, which is the responsibility of the Greater London Council. It would then be for the borough to make representations to the G.L.C.
6.44 p.m.
On Question, Whether the said Amendment (No. 109) shall be agreed to?
Their Lordships divided: Contents, 13; Not-Contents, 58.

CONTENTS

Burden, L. [Teller.]

Longford, E.

Strabolgi, L.

Champion, L.

Lucan, E. [Teller.]

Summerskill, B.

Chorley, L.

Morrison of Lambeth, L.

Walston, L.

Crook, L.

Shepherd, L.

Henderson, L.

Stonham, L.

NOT-CONTENTS

Dundee, E.

Lothian, M.

Ailwyn, L.

Ellenborough, L.

Luke, L.

Albemarle, E.

Exeter, M.

Margesson, V

Allerton, L.

Falmouth, V.

Mills, V.

Amherst of Hackney, L.

Ferrers, E.

Milverton, L.

Auckland, L.

Fortescue, E.

Molson, L.

Balfour of Burleigh, L.

Fraser of Lonsdale, L.

Monk Bretton, L.

Beauchamp, E.

Fraser of North Cape, L.

Newton, L.

Bessborough, E.

Goschen, V. [Teller.]

Perth, E.

Boston, L.

Hanworth, V.

St. Aldwyn, E. [Teller.]

Carrington, L.

Hastings, L.

Salisbury, M.

Chesham, L.

Hawke, L.

Sandford, L.

Colgrain, L.

Hertford, M.

Sandys, L.

Colville of Culross, V.

Home, E.

Somers, L.

Conesford, L.

Howe, E.

Strang, L.

Craigton, L.

Ilford, L.

Stuart of Findhorn, V.

Craven, E.

Jellicoe, E.

Suffield, L.

Cullen of Ashbourne, L.

Jessel, L.

Tweedsmuir, L.

Denham, L.

Lambert, V.

Wolverton, L.

Dilhorne, L. (L. Chancellor.)

Lloyd, L.

Perhaps the noble Lord could give us this information. I beg to move.
Amendment moved—
Page 11, line 23, leave out ("statutory instrument instead of").—(Lord Shepherd.)
LORD CHESHAM: I will endeavour to do just that. I had imagined from the electrifying effect this Amendment would have on the drafting of the Bill that it had been put down in a search for information rather than anything else. First of all, I will say this. In case there is some curious meaning in this context attached to statutory instruments which I too have not apprehended, I will double check the matter to see there is not one. But I know of no magic or curious connotation of the words in this respect. The position at the moment is that the Minister exercises most of his powers as a traffic authority in London by making

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regulations which are laid before Parliament and are subject to Negative Resolution. Incidentally, I do not know that I can say for certain there has never been a Prayer against one, but I know there has not been one recently.
The Minister is handing over his powers to the G.L.C. who will be making their traffic arrangements by order, subject to the reserve powers that the Minister has. These orders will not be laid before Parliament, because I think it is always implicit that when a Minister hands over powers to a local authority there must be some diminution of Parliamentary control, and they will be making orders which will not be laid. That will leave the Minister with not very much to do under Section 34. He will want to make orders for three things, for the regulation of traffic on trunk roads in Greater London; for use in connection with his reserve powers, his last resort power to vary or revoke the G.L.C. orders; and, thirdly, for securing the object of a direction From him with which the G.L.C. has failed to comply.
I do not think there are any logical grounds for laying before Parliament the ordinary day-to-day orders with regard to traffic matters on the trunk roads, which are very similar to those on the other roads made by the G.L.C. which are not laid. It is hardly necessary to lay the second power, to vary or revoke, because it is exactly the same as obtains in the rest of the country for which it is not laid. And the third one, making an order if the G.L.C. should fail to comply, is really purely ancillary as an absolutely last ditch power. It is very unlikely that the G.L.C. would refuse downright to comply, but if they did he would need this purely ancillary power to back up the direction he had given. The intention of this clause is purely that the Minister can "do his stuff", as it were, by order and not have to lay regulations. If there is something peculiar about the drafting, I will certainly have it looked at again, but I know of nothing.
LORD SHEPHERD: I will leave it like that this evening. Perhaps the noble Lord will look at it. It looks peculiar to me, and I was wondering whether there was an ulterior motive. The noble Lord shakes his head. Naturally I accept that, but perhaps he would look
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at the drafting. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD CHAMPION LORD CHAMPION moved to add to subsection (4):
"And the London Borough Council oar Councils concerned or as the case may be, the Common Council."
The noble Lord said: Subsection (4) of Clause 10 of the Bill makes provision for consultation by the G.L.C. with the Commissioner of Police before that Council makes an order dealing with the regulation of traffic inside Greater London. We think that is understandable, because the Commissioner of Police has powers under the London Hackney Carriage Act, 1850, to appoint cab ranks. The actual physical control of traffic in London must inevitably fall to the police. It will be their job to enforce the various measures which have to be taken.
Perhaps what is not quite so understandable is the omission in the subsection of a mention of the Metropolitan Traffic Commissioner, who, under the 1960 Road Traffic Act, has power to fix bus stopping places. We have not mentioned him in our Amendment, but it seemed a little strange to single out the Commissioner of Police for mention in this particular subsection and not the Metropolitan Traffic Commissioner. Certainly I think the fixing of bus stops is extremely important in this connection. You might in fact do very much more to stop traffic by a bad siting of your bus stops than by a bad siting of your cab ranks. So it seems to me, at any rate, as though the Metropolitan Traffic Commissioner ought to have been brought into this subsection, if indeed there is any necessity to bring in the Commissioner of Police.
No express provision, however—and this is the main point of our Amendment—is made for consultation with the councils which are directly concerned, namely the London borough councils. Under the set-up projected in the Bill the 32 borough councils are able to be much more important bodies than the metropolitan borough councils have been hitherto. Throughout the whole of the progress of this Bill and the debates both here and in another place, that has been part of the justification for this Bill. Their decisions will be taken on local matters a little nearer the ground than was the case under the London County Council

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and the Middlesex County Council. The local electors will be stimulated, the Government say, by that fact into taking a much deeper interest in the local government of London. They say that local democracy will function very much better as a result of this Bill. If that is so, then this matter of traffic regulation should clearly be not directly within their jurisdiction but something upon which these borough councils should have a say.
If, for example, the Greater London Council feels that the unloading or loading of goods in a street within the area of a London borough council ought to be banned in the interests of an improved flow of traffic during prescribed hours, obviously the local people ought to be consulted before such a ban is imposed. They should be consulted as to the effect on local traders and everyone else who would be affected by such a ban during such hours as the Greater London Council might decide. If, to use another example, the Greater London Council feels that the only way in which to get traffic moving in a certain area is to cause the removal of a street market, this surely is a decision which should be taken only after the most careful consultation with the councils concerned. I am sure the noble Lord will know many street markets in London and will know instances where, if that street market were removed, the traffic might flow a little better, and the Greater London Council might consider from now on bringing about the removal of that street market in order that traffic might flow more smoothly in that particular area. But surely the local people who benefit from that market, or the councillors who represent them, should be consulted before any such decision is taken. I am sure that many other noble Lords who know London very much better than I do can cite many other cases in which the new London borough councils should be consulted.
In answer to a similar Amendment moved in another place, the Parliamentary Secretary to the Ministry of Transport urged that these consultations would be held in any case; that this is more or less common form, that it is always done; that measures of this sort are never brought into being without such consultation; that no county council would ever dream of making such an
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order without first of all consulting the local people. If that applies to the borough councils, surely it must apply also to the Commissioner of Police, who is specially singled out in this subsection of Clause 10. Under the Statute, the Commissioner of Police would have to be consulted. It seems to us to be odd to single him out and to leave out the important borough councils who are directly representative of the people living in the area. I beg to move.
Amendment moved—
Page 11, line 45, at end insert—
("And the London Borough Council or Councils concerned or as the case may be, the Common Council.")—(Lord Champion.)
7.6 p.m.
LORD CHESHAM: I am only too delighted to have the opportunity to explain the points which the noble Lord has raised and about which he tells us he has doubts which have given rise to the Amendment he has moved. The Amendment is to impose, as he told us, the necessity for a requirement to consult formally with the borough councils or the Common Council as the case may be. First of all, I want to explain to the noble Lord what are the objections to the statutory obligation, which becomes an inflexible obligation to consult in all cases in this way. A formal consultation, by its very nature, may well require consideration by the council or by a committee of a council exercising the power that the council has delegated to it, and this is bound to take time. It is likely to take more time than ever, perhaps, in the summer when the council is in recess, and it could even take several months unless the chairman of a committee has been authorised by delegation from the council to consider any traffic matters which the Greater London Council might have to consult about․but one cannot necessarily rely on the fact that such will be the case. Sometimes it is necessary to consult on these matters and to do it fairly quickly, as I think the noble Lord will agree. There are a lot of minor things in which quick consultation is the essence of success in getting the traffic moving. It creates difficulties there, because if one is going to have a formal consultation with a council it is necessary that the consultation shall be about a specific proposal, and that proposal must be worked out in considerable detail.

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I do not want to take up the time of the Committee and perhaps weary the noble Lord, Lord Champion. I have here some judgments of cases which very much affect this question of consultation, land unless it is held at a pretty advanced stage there is a possible risk, although it may be remote, that the legal interpretation of the order might be open to challenge in the court. That is a slightly legalistic, but nevertheless valid, point that I ought to make. There is another point. If, having consulted on the scheme, there are some trivial changes, it probably means that the consultation has to be carried out all over again. There may be hundreds of almost trivial and certainly uncontentious cases in the courts, and this formal necessity for consultation is likely to impose a very time-consuming burden if it is a statutory necessity. As I have said, it can involve serious delay, and I think the Minister's own experience of having formally to consult the London and Home Counties Advisory Committee has shown in the past how serious these drawbacks can be. Parliament, in fact, released him from that obligation in 1960. His advice will certainly be that the Greater London Council should not be burdened with the statutory obligation to consult.
In the case of the police it is some-what different, because it is no good making an order unless that order can be enforced, and it is the police who have the job of enforcing. As the noble Lord told us, they themselves have some statutory responsibilities for traffic regulation in London, and they are of course, in close, continuous and day-to-day contact with traffic schemes and all kinds of traffic problems. Basically, apart from the necessity to keep them in the picture, the difference from the enforcement point of view is that in that case you are not having to consult a collective body which meets periodically; the police are there for consultation 24 hours a day, and the requirement could be met by quick contact. Up till now, what the Minister, as traffic authority for the London Traffic Area, has done, is invariably to consult the local authorities concerned before making traffic regulations. There is no statutory obligation on him to do so, but he has done, and it works.
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If you do it that way, all the cases I mentioned—and they are going to be many—which do not justify formal consultation by the whole Council or perhaps even by a Committee, have been worked out to everyone's benefit by discussion between an official of the Ministry and the Chairman of the Committee, often at quite short notice. I am sure that the G.L.C. will, in practice, consult the borough councils and any other affected bodies just as fully as the Minister has done up to now. I do not think that they can hope to live a successful life unless they adopt that practice. I think that unless they work together with the boroughs, life is going to be very difficult indeed.
Supposing that the G.L.C. adopt an intransigence about this and do not consult, and the practice it sets up is not satisfactory. Then the Minister has powers under Clauses 10 and 11 to direct the G.L.C. as to procedure. He could perfectly well, and most likely would, use those powers to require the Council to consult specified bodies, and he can also include provisions about the manner of consultation, or timing, or anything else about it. I realise the feelings of borough councils in this matter. If they consider that their views are not being properly taken into account by the G.L.C. even after consultation—and even formal consultation does not necessarily mean that they are fully taken into account; I think the noble Lord would agree with that—then they can make representations to the Minister that they were not being properly consulted and had not been properly brought in; and if those representations were good, he could, as I say, use his powers to direct that consultation should be properly carried out. In brief, we think that that aspect of the Minister's reserve powers actually gives the boroughs better protection than a statutory obligation to consult such as the noble Lord suggests. I honestly think that is the better way to do it.
LORD WOLVERTON: May I ask the Minister this question? If there is feeling in the local area, will the G.L.C. hold a local inquiry or not before they make an order? This causes quite a lot of feeling locally. I have some experience of this as I have been on the roads and bridges committee of West Suffolk for some time. There we often

1495
have the problem that the borough asks for one-way streets. We are under the jurisdiction of the county council, and I think we have to get authority from the Ministry. Often the initiative comes from the borough council, and we then hold an unofficial local inquiry at which the local people make representations to a sub-committee of the roads and bridges committee. I took the chair at one myself the other day, at Sudbury; it lasted all day. We reported back our feelings to the roads and bridges committee, and we made some modifications with a view to helping the local people. This was put up to the full council, because the matter has to be passed by the full council, and then to the Minister for his confirmation. This is a much bigger thing than the matter I am referring to, but I think there ought to be some local inquiry if people feel aggrieved about a proposed Order.
7.15 p.m.
LORD WALSTON: I feel that the principle behind my noble friend's Amendment is absolutely correct, and that there should be consultation with the local authorities. But I must say that I was impressed by the argument of the noble Lord, Lord Chesham, about certain matters being too minor to go through the whole paraphernalia which is necessitated by formal consultation, and also in particular with regard to the need, in certain cases, for speed. I imagine that Christmas traffic regulations might come under the sort of thing he has in mind. Would it not be possible to fulfil the main objectives of my noble friend Lord Champion, but at the same time to overcome the real difficulties that the noble Lord, Lord Chesham, has pointed out, by giving power to the Greater London Council to initiate schemes of the sort laid down here on a temporary basis for, say, three months, after which, if they wish to proceed with them on a permanent basis, then they will have to consult? That would mean that if they decide that they are in fact going to be permanent, they could still act quickly in case of an emergency. If it is obviously a trivial matter, the consultation will not take any time at all during that three months, whereas if it is a more serious matter arousing a good deal of local feeling, there would be ample time in which it could be done.
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I do not know whether that would meet with the approval of my noble friend or not. It seems a common-sense way of doing it.
LORD MORRISON OF LAMBETH: I think that my noble friend Lord Walston has hit upon an idea that may be useful to the Minister and to my noble friend Lord Champion. I appreciate the point that if it is an unimportant and temporary matter it may not be a case for making it obligatory on the Greater London Council to consult the borough, council. On the other hand, if the case I that my noble friend Lord Champion mentioned is involved, the possible abolition of an open air market in the interests of getting a traffic improvement in the area of that market, that is a matter of importance. The Lewisham Borough Council has such a case in mind, at the clock tower. It is a highly controversial matter, and I should not like to presume to guess who is right or wrong. However, that is Lewisham's business. There is nobody to consult except the local traders, which they have done, and they have had an opportunity of expressing their views.
These local markets raise a big question. You get a case such as the Ministry of Transport is landed with—I think two of them: one was at Archway Road in Highgate, for the use of heavy road haulage traffic going to the docks. There was trouble in Islington. As a matter of fact, a row is now going on about making the Rotherhithe and Blackwall Tunnels, before the improvement of Blackwall Tunnel, both one-way routes. In two cases, at least, the Minister has had to give way. The noble Lord opposite who spoke of urgent local inquiries is, I think, going too far, because they can be longwinded affairs and can involve undue delay.
The Minister says that in practice the borough council will be looked after by the Ministry if they complain that the Greater London Council has not adequately consulted them, or if they come to a conclusion which differs from the opinion of the borough council. That seems a long-winded way round to get at the same result. These borough councils, the metropolitan boroughs particularly, like to have a statutory right to be consulted about important things. They are a little offended if they do not get it.

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My noble friend Lord Walston raised the point that if between now and Report we could get some revision of this clause, whereby unimportant things are distinguished from important things, or temporary, seasonal things are distinguished from permanent things, that might solve the problem. I do not ask the Parliamentary Secretary to commit himself as to what he will do at this stage—I know the difficulties of giving hard and fast commitments in advance on what is a complicated matter—but if he would undertake to have the matter looked into between now and Report, without prejudice to our right to raise it on Report, to see whether he could bring up a clause which might substantially meet the points raised by my noble friend Lord Champion, at the same time taking into account the points raised by Lord Walston, my noble friend Lord Champion might perhaps be willing to ask leave to withdraw his Amendment.
LORD CHESHAM: Naturally, I am willing to look at that one. I do not want to adopt a dogmatic attitude about it at all. I agree with the noble Lord in what he said about local inquiries. It is possible for one to be held if that is desirable, but any statutory procedure on that would he going too far and would be even more cumbersome. So far I have not been convinced that I should alter my view. Lord Morrison of Lambeth picked on the Highgate affair, a very good example of how informal consultation actually worked. Representations were made—there is no obligation on the Minister to consult—and, having looked at it as an experimental measure, a good deal of change was made. So there is nothing wrong with putting that forward as an example of the possibilities of informal consultation; in other words that the thing does work. That is all that I am trying to claim: that it works perfectly well. I still have very considerable reservations about the question of a statutory obligation to consult, but I should be glad to look into the suggestion made by the noble Lord, Lord Walston, between now and the later stage, although, as Lord Morrison of Lambeth kindly appreciated, I can enter into no commitment at the present time.
LORD CHAMPION: We recognised when we put down this Amendment that there was bound to be a question of the
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balance of advantage as between speed of action and democratic consultation. I think the Minister has made a number of excellent points on this subject, but I do not propose to answer them all. I should like to comment on the suggestion of my noble friend Lord Walston. As my noble friend Lord Morrison of Lambeth said, clearly one could not permit an order to be operative for three months in the case of a street market. The job would already have been done; you would remove the market and the order would be operative. Therefore, the suggestion for the three months' operation of an order, and then perhaps its ending after consultation, would clearly not work. It seemed to have some merit, as between the truly important and perhaps the unimportant, from the point of view of local interest, and so on. The points of local interest could be cleared up by the unofficial consultation which at present takes place—that is, before the initial order is made.
I see the difficulty which was raised about having a statutory right to consultation, which will mean the convening of meetings, ensuring that the matter is on the agenda, reference to the appropriate committee, bringing it back again to the Council for a ratification, et cetera. Nevertheless, we feel—and I hope the Minister will consider this between now and Report—that the local people must come into the matter of having their amenities and their way of life badly interfered with, as could happen by the introduction of a badly considered order. In those circumstances, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD CHESHAM: I do not know whether the noble Lord, Lord Shepherd, could move the next Amendment after the dinner adjournment. I think the hour is convenient.
LORD SHEPHERD: I think the hour has come.
LORD CHESHAM: I beg to move that the Committee be adjourned during pleasure until 8.35.
Moved, That the Committee be adjourned during pleasure.—(Lord Chesham.)
LORD HASTINGS: On the Motion to adjourn this Committee, I should like to make a statement. I understand that the noble Lord, Lord Morrison of Lambeth, stated earlier this afternoon that I had misled the Committee on an earlier occasion, and I should therefore like to take the first opportunity to put the record straight. I said that the Metropolitan Boroughs Standing Joint Committee had specifically asked for London elections to be advanced from the autumn of 1964, as proposed in the Government White Paper, to the spring of 1964. On this point I now find that I was misinformed, and therefore have no hesitation in offering my profound apologies to the noble Lord and also, of cow-se, to all your Lordships for unwittingly misleading the Committee.
LORD MORRISON OF LAMBETH: I am very much obliged to the noble Lord for that statement. It was a mistake, and an unfortunate one, but Parliament is always good to a noble Lord, or to a right honourable Gentleman in another place, who will confess that he has made a mistake and apologises. But what can you do about it, except thank him very much for taking that course—which is a perfectly proper Parliamentary course? Therefore the noble Lord can be sure that I will not pursue it any further. It worried me because I could not imagine that the Standing Joint Committee would do it, and I had appropriate inquiries made. It was not only bad from the point of view of myself and other noble Lords who had raised the point, but rather rough on the reputation of the Standing Joint Committee. If it had been true, I thought that they had gone haywire—which would be a pity because they have a Labour majority. I am grateful to the noble Lord, both for myself and on behalf of the members of the Metropolitan Joint Committee, for his statement. But, if I were he, when he gets back to that funny Ministry of his I should, so to speak, put somebody across my knee, whoever it was, and give a good spanking. If civil servants go wrong you must knock them about!
On Question, Motion agreed to.
[The Sitting was suspended at half-past seven and resumed at twenty-five minutes before nine o'clock.]
LORD SHEPHERD LORD SHEPHERD moved in subsection (8) to leave out "as well as the Minister of Transport". The noble Lord said: I beg to move this Amendment, to obtain an explanation from the Minister. In Clause 10(8), it is provided:
"The Greater London Council as well as the Minister of Transport shall have power to make an order"
in regard to speed limits. Of course, the Minister has this power under other legislation, and I question whether it is necessary for it to be re-emphasised in this Bill. Therefore I have two questions I should like to put to the Minister. The first is whether the Minister will regard the particular power he has under the 1962 Act as in the category of a reserve power—in other words, that, having granted the Greater London Council power to make orders as regards speed limits on certain types of road, which power the Minister also has, the responsibility will in the main rest with the Greater London Council, and the Minister will exercise his power only where he feels it is absolutely necessary and, perhaps, where the Greater London Council may have failed to use their power. That is the first point.
The second point is this. I wonder whether the power that the Minister has could not in fact be included in the provisions in subsection (2), which would then bring it within the reserve power—in other words, it would be clearly defined. I hope the Minister can give us some information in this matter. I think he recognises the feeling on this side of the Committee, and perhaps in other quarters of it, that we should give as much responsibility as we can to the Greater London Council, the Minister not exactly sleeping but merely using the powers in the last resort. I beg to move.
Amendment moved—
Page 12, line 25, leave out the said words.—(Lord Shepherd.)
LORD CHESHAM: I am very happy to give the noble Lord the assurance that he seeks. In point of fact, the words which he has moved to leave out make no difference to the Bill at all. They are included merely for clarification, and the Minister derives no power whatsoever in this matter from the Bill. So, from the point of view of the Bill, it makes little difference whether they are put in or left out. If they are left out,

1501
the Bill is less clear than if they are left in. The Minister's power in this matter derives, in fact, not from this Bill at all but from Section 11 of the Road Traffic Act, 1962. That applies to limits other than 30 m.p.h. limits, and mostly, of course, to 40 m.p.h. limits.
The idea is—and I am happy to give the noble Lord the assurance he seeks—that this is intended to be entirely a reserve power, in exactly the same way as it is used in the rest of the country. The Bill has been deliberately drafted, and this wording has been used, to make sure that the position on speed limits in London is exactly the same as that in the rest of England and Wales. It would not be quite appropriate to put it in subsection (2), as the noble Lord queried, because there is this difference—and it is something which your Lordships have often brought forward and recommended. It is that there should be a uniformity of application of speed limits on various roads; and we agree that it is most important that there should be this uniformity of application. It is not a question of a uniformity of powers for its own sake, but it is vital in road traffic to-day that speed limits should be properly applied and respected. As the noble Lord knows, a review is going on at the present time over the whole of the country to try to make certain that this is so. I have to admit that, even with the reserve power, it is not yet so, but we hope it will be, because it is most important in regard to the application of the new penalties, and that they should be fairly and properly enforced. So I am able to give him the assurance that this is a reserve power in the interests of seeing that the speed limits are applied with the same criterion all over the country.
LORD SHEPHERD: I am grateful to the noble Lord. In the circumstances I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 10 shall stand part of the Bill?
LORD CHAMPION: We have in this Bill mention of trunk roads, metropolitan roads and a variety of other reads; and to-night we have heard about orbital and circular roads. I should like to know the meaning of the term "special
1502
road", which appears in subsection (2)(c). I do not know that it is used anywhere else in the Bill and, frankly, I do not know what a special road is. I think the Committee ought to know and I should be grateful to the Minister if he would be kind enough to explain this to us.
LORD CHESHAM: I am pleased to be able to do this. I thought I had made it clear that orbital and circular roads were names and not classifications. "Special road" is an accepted term arising from elsewhere and it means a road on which a particular type of traffic is restricted. I suppose, briefly, it means a motorway. Special roads are restricted to various forms of traffic. As the noble Lord may know, some forms of traffic are barred on motorways.
LORD MORRISON OF LAMBETH: I was glad that my noble friend raised this point; I was going to raise it myself. The Ministry of Transport are getting a lot of descriptive names which people do not understand. They will need to publish a glossary. In earlier days the classifications were "I", "II" and "unclassified", and people knew what these terms meant. Now there are circular roads, orbital roads, special roads, and in London there are to be metropolitan roads, borough roads and special roads. It is all getting rather complicated. Is the purpose of the Ministry to invent these terms so that nobody will understand what they are getting at? Do they want to mystify everybody? It seems like it. If we do not know or do not understand—and we are used to politics and public administration—what about the poor ordinary citizen outside? He must be positively mystified.
I wish that the Parliamentary Secretary would pass a friendly hint to the Minister, if he dare, and ask whether he can get away from these numerous descriptions of roads so that the citizen, who after alt has to pay for them, can understand more easily what it is all about. I confess that I did not understand what some of these numerous things meant. And why "orbital"?—it sounds like a space flight. That is something orbital, I think. They must have borrowed it from some suggestion of going into the

1503
universe and thought they might apply it to the roads. Surely simplification of these terms is worth thinking about. I should have thought that a special road could be called a restricted road—that is what it means. But life is getting more complicated.
LORD CHESHAM: I take note of what the noble Lord says. I have explained twice that the North Orbital Road and the North Circular Road are names and not classifications of road. I think, perhaps, I ought to recommend to my right honourable friend, whom I am not in the least afraid of approaching, that possibly we ought to call one of them Morrison Avenue and the other one Chesham Street.
LORD MORRISON OF LAMBETH: I should think not.
Clause 10 agreed to.
Clause 11 [Experimental traffic schemes.]
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF HOUSING AND LOCAL GOVERNMENT (LORD HASTINGS): This Amendment is consequential upon the removal from Clause 9(3) of the statutory obligation on the Greater London Council to appoint a director of traffic. That simply means rephrasing this subsection in the way set out in the Amendment. I beg to move.
Page 13, line 14, leave out from ("whereby") to ("or") in line 17, and insert ("a specified officer, or some person authorised in that behalf by a specified officer, of the Council, if it appears to that officer").—(Lord Hastings.)
On Question, Amendment agreed to.
Clause 11, as amended, agreed to.
Clause 12 agreed to.
Clause 13 [Parking accommodation in Greater London.]
8.46 p.m.
LORD CONESFORD LORD CONESFORD moved, after subsection (4), to insert:
"(5) The powers of the Minister of Transport and the Council under the said section 85 shall not be exercised in the area of a London Borough or the City without either the consent of the Council of such London Borough or the Common Council as the case may be, unless such exercise has been approved by resolution of each House of Parliament."
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The noble Lord said: My Lords, we now come to Clause 13 which from subsection (2) onwards deals with parking meters on the highways. I think we all know that, properly used, parking-meter schemes can make a useful contribution to solving the problems of London; but we also know that, wrongly used, they can inflict very great injury on residents and, indeed, in other cases, on traders.
It is perhaps useful to remind ourselves how great a change in the ordinary law of the land such parking-meter schemes involve. The normal position, in the absence of any parking-meter scheme, is that the householder in a residential street has the right to the uninterrupted access to his house from the highway. Vehicles can come to his front door, including even, occasionally, his own vehicle. In most cases, if he is the freeholder, he owns the subsoil of the road; and if he is the lessee he is entitled to the rights of his lessor in the subsoil. On the other hand, the rights of the public on the highway are simply to pass and repass on the highway and not to use it as a parking place or as a garage. If, however, a parking-meter scheme comes into force the whole position is altered. The householder can be deprived of direct access to his home, and strangers to London can occupy the space in front of his house the whole time. The Statute allows that; and, of course, I do not question it, in a proper case. But clearly, I think, the whole Committee will agree that the strongest safeguards are required to see that such schemes are imposed in the right places and not imposed in the wrong places.
My contention—and I think, perhaps, noble Lords in all quarters may agree with me—is that the best judges of whether a parking-meter scheme should he imposed in London is the authority of the London borough of the area concerned. The London borough is directly conscious of the interests of its own inhabitants, whether residents or traders. If the London borough desires the parking-meter scheme, then in a proper case let it have it if the Greater London Council or the Minister approves. But I submit, with some confidence, to the Committee that such a scheme should not be imposed on the London borough, either by the Minister or by the Greater

1505
London Council, against the wishes of the borough.
This is a startling change in the ordinary legal position. It can be done under the Statute, but if it is wrongly done, in the wrong place, it can completely remove the amenities of a residential street; it can inflict great harm on traders; it can transform a place in London in which it is pleasant to live, and make it a mere convenience or a deposit ground for the cars of people who come into London daily. I made a considerable point, in my speech on Second Reading, of the extraordinary folly in the management of traffic and planning powers in London and so using those powers that a place in which it was pleasant to live became a place in which it was unpleasant to live; and I am glad to say that my noble friend Lord Hastings, in replying to the first day's debate on the opening of the second day's debate on Second Reading, assured us that Her Majesty's Government were in complete agreement, and they desired that the places in London in which it was pleasant to live should remain so. Indeed, they would be very foolish if that were not the case, because there is not a single problem before the Government which would not be made more difficult to solve unless such a principle were observed.
That is the object of my Amendment. It does not alter the position where the London borough itself desires the parking meter schemes but it does ensure that a parking meter scheme, which can do immense injury to the residents and others if it is imposed upon them against their will, shall not be imposed in any part of London against the wishes of the borough, unless the Minister obtains an Affirmative Resolution of each House of Parliament. That is the scheme, and the object is to preserve the use of parking meter schemes where they can make a good contribution but to prevent their use in cases where they can lower the value and the amenities of a London street, spoil a part of London as a place for the enjoyment of its inhabitants and generally injure the public interest. I beg to move.
Amendment moved—
Page 17, line 35, at end insert the said subsection.—(Lord Conesford.)
LORD SALTER: I should like to support the Amendment moved by my noble friend. I do not propose either to duplicate or emphasise his general argument, which seemed to me not only persuasive, but conclusive. However, I should like to add one or two general considerations. The first is this. The object of this Bill, after all, is to make local government more efficient and to qualify it to carry heavier responsibilities. We all hope that that object will be achieved. Many of us, I think, have felt for a long time that the tasks put upon the central Government, upon Whitehall, have been regrettably heavy, and that it would be a good thing if some of the responsibility could be transferred to local authorities. Indeed, the only justification for some of the powers given to the central Government has been—if there is a justification—that the local government system as it existed could not carry out those duties. Here is a case (if you take this in relation to Section 85) where actually more power is being given to the Ministry of Transport of the central Government as compared with the local government system. I think it is regrettable. I think the movement ought to be in the other direction.
The other consideration is this. Within the sphere of central Government itself, the responsibilities, interests and objectives of the Ministry of Transport are, of course, often in conflict with hose of the Ministry of Housing and Local Government. I think many of us feel that when this conflict arises the balance has been tipped too much in favour of the Ministry of Transport. Traffic has tended to run roughshod through the interests of amenities and the planning of housing. Here again, I think, is a reason for doing anything we can to transfer some of the power and responsibility from the sphere of central Government to local government, and within the central Government to tip the balance a little more in favour of the Ministry responsible for the preservation of our amenities as compared with the authority responsible for accelerating traffic.
LORD ILFORD: I desire to add only one or two very brief observations in support of the Amendment which has been moved by my noble and learned friend. He based the case for his

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Amendment upon a statement of the law which is sometimes forgotten and, I think, sometimes overlooked. He pointed out that the frontager is in fact the freeholder of the subsoil of the road, and is regarded as having dedicated the surface of the road as a public highway. My understanding of the law of highways is that my noble and learned friend is quite right in his statement of what happened. But, of course, the situation has been obscured by innumerable statutory enactments which give some public authorities the right to take up the surface of the road and remake it and, indeed, place upon them an obligation to maintain the road. Other statutory bodies have the right to break up the surface of the road and to lay mains of all sorts, and so the ownership of the frontager has come to be obscured.
People do not appreciate that, after all, the frontager on the road is the owner of the road itself, and all that has happened has been that the surface of the road has been dedicated as a public highway. My noble and learned friend said, I think rightly, that the rights of frontagers ought not to be further invaded without at least the safeguard of the approval of the local authority in the neighbourhood where the property is situated. I think that must be a point of view which will appeal to all your Lordships. If, in fact, the rights of the frontager have been already considerably invaded by public enactment, this is a new invasion. It may be a very necessary and desirable invasion, but it is not an invasion which ought to be made lightly and without the consent of at least the public authority who are responsible for the particular road.
9.0 p.m.
LORD MOLSON: I find myself in almost complete agreement with the ideas underlying the speeches made by my noble and learned friends Lord Conesford and Lord Salter, but I am bound to say that I feel great doubt about the wisdom of this particular Amendment. In so far as noble Lords have urged that greater attention should be given to the preservation of the amenities of London, and that something more should be done to try to prevent the peace and tranquillity
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of dwellers in London from being steadily eroded by increasing motor traffic, I am entirely in agreement with them. But when they propose an Amendment which is going to impose restrictions upon parking-meter schemes, I ask myself what benefit the residents are going to derive from the carrying out of this Amendment.
it is not that a parking-meter scheme endangers the privacy of an area of London; it is not a question that if there are no parking meters provided, there are going to be no cars parking. Quite the contrary. The whole purpose of the parking-meter schemes was to try to prevent cars from being parked for the whole day on the Queen's highway, which is, in fact, an abuse of the use of the highway. The value of the parking-meter schemes—and I think public opinion on the whole has supported them, and certainly there has been a great decline in the opposition to them from even the motoring community itself—has been that motorists are able to park for a reasonable period of time at a certain charge, but not to occupy a particular part of the road from early in the morning when they arrive from the country until late at night when they depart.
Therefore, I am unable to support this Amendment, because I do not feel that it would have the effect which my noble friends have in mind. It would merely mean that the congestion which existed before parking-meter schemes would again be restored and there would be some people who would abuse the right of parking by staying there all day. Therefore, while I have in almost all respects dealing with traffic a great deal of sympathy with those who are trying to restore the amenities of London, I could not, as at present advised, support this Amendment because I cannot feel it would have the effect they have in mind.
LORD STONHAM: It seems to me, listening to the noble Lord, Lord Molson, that he missed the whole point, as I understand it, of this Amendment. This Amendment is not on whether or not there should be parking meters, but whether or not they may be imposed on a local authority. That is the whole question that has to be decided. I should have thought that this was a most reasonable and sensible Amendment if we really believe in local government, and one

1509
which the Committee and, I hope, the Government will support.
I do not know, in fact, who makes some of the decisions with regard to parking-meter schemes which so obviously have gone wrong, whether it is the local authority or Lord Chesham's Department; but certainly I should have thought that in most cases the local authority, if they feel particularly strongly about parking meters in a particular place, would be the ones in whose judgment I would place the greatest reliance. Perhaps the noble Lord could tell me who is responsible for the parking meters on Victoria Embankment which are almost universally deserted by possible users in the middle of the day; and also for the parking meters in the Borough of Shoreditch, which are almost completely deserted and cannot possibly earn their keep. I do not say that they were imposed on the local authorities, but certainly they were quite mistaken to put them there. It seems to me that this is a most reasonable Amendment which I hope the House will support.
THE MARQUESS OF SALISBURY: With all deference to the noble Lord, Lord Stonham, I think he has misunderstood the purpose of the Amendment. He said that the purpose of the Amendment was, as I understand it, to enable the local authority to be the final deciders as to meters or no meters. The purpose of the Amendment was to make London a pleasanter place 10 live in, and the real question is whether leaving the decision to the local authority would do that or not; and I, like my noble friend Lord Molson, am very uncertain. I am not opposed to this Amendment if my noble friend Lord Conesford thinks it would do good and the Government think it would do good. By all means let us try it. I myself live in a street which has not got parking meters, and I have to wage a war of attrition, and have done for years, to be able to leave my car anywhere near my house. Therefore I do not think the absence of parking meters is a cure for all our ills.
LORD CHESHAM: Perhaps this would be a convenient moment for me to come in on this matter, because there are one or two points that I think I should very definitely make. The first point is that this Amendment is concerned basically with the reserve—I emphasise "reserve"—power that the Minister has which it is intended to pass on
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to the Greater London Council. I listened with interest and a good deal of sympathy to what was put forward by my noble friends Lord Conesford and Lord Salter, and I certainly should think it wrong to argue a number of the points of principle which they raised.
In view of what has been said, I must be a little detailed in explaining exactly what the position is, because I must show that the fears which the noble Lord, Lord Conesford, in particular expressed are in fact exaggerated fears in regard to the operation of parking-meter schemes as they are brought in. I would say to the noble Lord, Lord Stonham, very briefly that in no case yet has the Minister used his reserve powers. All parking-meter schemes that have been brought in have been brought in by the local authority. My right honourable friend, I admit, has made suggestions here and there, which have been adopted in some cases and not, in others. But what I am saying is that in no case has my right honourable friend imposed a parking-meter scheme on anybody. In every case it has been brought in by the local authority.
LORD SALTER: The noble Lord will agree that a suggestion made by somebody known to have the power to enforce is rather different from a suggestion made by somebody who has not that power.
LORD CHESHAM: I quite agree. It must be true. But a suggestion made depends very much on the spirit in which it is put forward. If you have a pistol and are known to have a pistol, you can still make a perfectly normal suggestion without pointing it. The suggestion falls into a different lie if you pull out the pistol and point it. I think that is also a distinction worth making.
I think that in its application to the Minister this Amendment is not all that far remote in principle from No. 103 which my noble friend Lord Conesford put down before. That, too, was concerned with the exercise of the Minister's reserve powers of traffic regulations, as this is in another context. I do not want to weary the Committee, and my noble friend in particular, by repeating the arguments I then made. My noble friend said that this solution for the earlier problem perhaps went a little far, and I am going to try to show that in my view it goes a little too far in this case as well.
LORD CONESFORD: It may be that my noble friend is going to deal with this, but I should like to know whether he says that my Amendment, if adopted, would not be effective in preventing these parking schemes from being set up without the leave of the London borough.
LORD CHESHAM: Perhaps my noble friend will not mind waiting until I have developed my argument. In its application to the Greater London Council this Amendment puts a further sanction, as the noble Lord explained to us, on their reserve powers the same as it does on the Minister's reserve powers. We must consider for a moment what is the normal operation of Clause 85 in Greater London. The normal operation of that is the making of parking-meter designation orders in the appropriate zones, or rather it will be the normal operation by the Greater London Council on the application of the London borough councils or the Common Council if it is a City one. That is exactly the same as the present position. My right honourable friend the Minister of Transport makes the order on the application of the borough councils.
VISCOUNT MERSEY: May I ask a further question? Has the application been made, or has there been any case of its being asked for, by the Commissioner of Police?
LORD CHESHAM: No, my Lords, it is made on the application of the council concerned.
VISCOUNT MERSEY: If I may repeat my question to the noble Lord, has there been any known case of the Commissioner of Police asking for parking meters?
9.13 p.m.
LORD CHESHAM: If the Commissioner of Police wishes to ask for parking meters he will approach the council concerned and endeavour to persuade them to apply for an order. That will be the procedure. The borough council or the Common Council applying for the order have to advertise the proposals, and the Greater London Council will be in the position of having to take into account any objections which are made to it.
It seems to me that, under this Amendment, if the Greater London Council wanted to make any alterations to a
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borough council's proposal, either as a result of the consideration of the objections or for any other reason, such as that they thought perhaps it was wrong in some respect, they would have to seek and obtain the consent of the borough council concerned, or if they could not get that they would have to obtain the approval of Parliament by an Affirmative Resolution of each House. That is surely taking a sledgehammer to crack a nut, if anything ever was. I should have thought it would entirely weaken the Schedule 10 procedure which in this Bill is the one under which they would proceed, because the requirement that there is on the Greater London Council to take objections into consideration surely implies that the Greater London Council will strike a fair balance between the applicant authority's proposals, on the one hand, and objectors, on the other. If, in short, they are to refer the objections for the consent of the council that put forward the order the council are being put in the position of being judge and jury in their own cause, and the Greater London Council has really no decisive factor left to it. In other words, it should remain in exactly the same position as the Minister is now.
Under Section 85(5) as it is applied to Greater London by Clause 13, the G.L.C. will be able—this is what worries the noble Lord—to make a designation order without application to a borough, if they consider it necessary to do so. That is exactly the same reserve power as the Minister has to-day. They would operate that power only if, after consultation, they had failed to persuade a borough council to apply for an order in respect to the area in question; and it is almost impossible—at any rate, most unlikely—that they could ever operate that power with the consent of the borough council concerned, because if they had failed to persuade them to apply for one off their own bat, the borough surely would not then give consent to the use of the reserve power. That is my whole point, or rather the major part of the point of the noble Lord's Amendment.
Therefore, the noble Lord's Amendment really makes any reserve power to the G.L.C. completely negative, unless of course they come to Parliament for an Affirmative Resolution of each House.

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But may I ask your Lordships to consider this: before they did that, they themselves would have to go through the process of advertising the proposed scheme and of considering any objections to it. I do not see, though, how in the circumstances the G.L.C. can take an irresponsible attitude in this matter. As I have just said, they would have to advertise their proposals and consider objections, among which, no doubt, would be that of the borough council concerned, and they would themselves have to set up and administer any parking-meter scheme that was organised in that way until they could hand it over to the borough council with, if they ever got it, that council's consent.
If, by some quite remote chance, the G.L.C. acted less responsibly than one would expect, there are still available the Minister's reserve powers under Clause 13(2), which in effect gives Parliament some indirect control. One of the main reasons for the Minister's having those reserved powers is that he will be able to use them to intervene on behalf of a borough council, should he feel it is right to do so, in just the kind of circumstances as my noble friend envisages to be a great worry. I think that in fact if we were to accept this Amendment, the protection which the boroughs would have against some—I think the word used was "overbearing"—action by the Greater London Council is actually less than by leaving the Bill as it is. I hope that my noble friend will see the force of what I have said and, therefore, will not wish to pursue the Amendment.
LORD SHEPHERD: I am afraid that the noble Lord has rather laboured a weak case—
LORD CHESHAM: I simply explained the case.
LORD SHEPHERD: I know the noble Lord has gone through a careful explanation; but, frankly, as he went on the weaker and weaker the case appeared, at least to those on this side of the Committee. Are the facts not just two? First of all, the Minister to-night has admitted that he has not so far had to use the powers he already has. He has used threats—at least he has given reasonable notice to local authorities of what is wanted, of what the Minister himself would like to see done, and some of the
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local authorities have conceded, under pressure.
But that is not the strongest case against the Government. The strongest case is found in the very words used by the Government. They wish to create these new strong borough councils; they wish to see local authorities strong. We know that the amenities within the borough can be seriously affected by traffic and parking. The meter system, whether it is right or wrong, is part of the parking system. It is absolutely right, if one accepts the Government case for making local authorities strong and responsible, that before an order is imposed on them they should have the right to accept or refuse it; and if there is any difficulty in the matter and the Minister wishes to impose that regulation, then they should come to Parliament.
I freely admit that this is a restriction on the Greater London Council. I would always stand up for the Greater London Council in this respect, but the borough authorities must not be overlooked. They have a responsibility to their own local community, so do not at this stage deny them the opportunity at least to object if an order is being made to which they are opposed.
9.22 p.m.
LORD CONESFORD: First of all, I should like to say to the noble Lord, Lord Shepherd, that I think he has accurately understood the underlying idea behind my Amendment. I have so frequently supported my noble friend Lord Molson, and he has so frequently supported me, that I am sorry that he has so completely misunderstood me tonight. I think it must have been because I failed to make myself clear. I agree with him, as I said in moving this Amendment, that these schemes have a useful part to play; and this fact can be quite as obvious to the London borough as to anybody else. They are much better able to judge both whether in one case it would be a good thing, and whether, in another, it would be a bad thing. I do not object to their having to get the approval of either the Greater London Council or the Minister—that may be right. It may be right that where they want such an order, and where there is some slight amendment which is rightly desired by the Greater London Council, my Amendment

1515
in its present form may not be absolutely in the best form for providing the right remedy.
But the position I want to meet is the very different position where the local authority—that is to say the London borough—does not want such a scheme at all. I say that where the London borough does not want such a scheme at all in its area it should not be compelled to have it by anybody below Parliament. If Parliament wishes to make it have it, well and good; but nobody else—because they are the best judge—should have that power.
My noble friend Lord Salisbury spoke of his street, which I know very well: it is not far from mine. He and I both have the experience that we can have the roads in front of our houses almost perpetually blocked by other people's cars although there is no parking-meter scheme. But let me tell him, if it interests him at all, that he is not at the moment completely without a legal remedy. There is such a thing as a law of obstruction and a law of nuisance: but, if there were a parking-meter scheme, those remedies would not be open to him. Now I admit that my Amendment may be imperfect, and it may want modification; but in contrast to the present position I say that my Amendment is good. It makes it reasonably clear on the face of the Statute that it is the metropolitan borough and nobody else who shall, in the ordinary case, decide whether or not to apply for such an order. I propose to press that to a Division.
THE MARQUESS OF SALISBURY: I should like to say one word in view of what my noble friend Lord Conesford has said. In his first speech he made great play of the importance to the inhabitants of London of having a pleasant life. That was a great argument in favour of the boroughs: that the borough authorities would be, as it were, a sort of "nanny" to the inhabitants of those boroughs; that they would see that they did not suffer any actual inconvenience where that could be avoided. It is not so, in fact. They do not do anything of the kind. The house of my noble friend Lord Conesford, my house and the houses of hundreds of thousands of people all over London are inconvenienced in spite of the fact that they ought to be looked after by the boroughs. Nothing that he has said now
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makes any difference to me on that particular point.
He says that I ought to know about the law of obstruction. I challenge him to say whether, if I brought an action against somebody for obstruction by leaving a car outside my house, I should be likely to win it. I do not think in the least I should. Therefore, if he is telling me that the purpose of this Amendment is to strengthen the boroughs as against the central authorities, I accept that; but if the argument is that it is going to be any improvement for us who live in London, I do not believe that to be true.
LORD CONESFORD: May I just answer my noble friend? I had a car left for three weeks outside my house. Actually, in the end, I got the police to prosecute by deciding to set down a Motion for debate in this House. The prosecution was successful, and I have been less troubled since. I shall advise my noble friend privately.
THE MARQUESS OF SALISBURY: But will the noble Lord advise the many other thousands of people in London to adopt that course? They cannot.
LORD CONESFORD: Indeed they can. On another occasion I shall be very happy to bring to the attention of Members of the House how very negligent the police are in allowing people to leave their cars for months on end about the streets of London, and doing absolutely nothing about it. I shall be happy to do that. But all I would say to my noble friend—because I agree with him—is that, even though a borough authority does not, perhaps, protect us as much as it would like and as much as it might, in many cases it is very much more eager to protect the amenities of its citizens than is the Minister of Transport.
LORD CHESHAM: If I may be allowed another word, there is just one point to which I should like to address myself. A good deal has been made of the desirability of the boroughs concerned—the noble Lord has just said it—running their own affairs in this matter. As I tried to explain—perhaps I did not do it very well—the power to do these things is somewhere about 95 per cent. in the hands of the borough as it is. We are talking of reserve powers, and I was a little surprised that noble Lords opposite, who all along have

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been arguing in favour of the greater concentration of power in the hands of a single authority, should have vociferously cried "Hear, hear" to the suggestion that this particular power should be decentralised.
LORD MORRISON OF LAMBETH: Does not the noble Lord realise that this is proof of our objective impartiality between the Greater London Council and the boroughs? This is to our credit.
LORD CHESHAM: I must still be allowed my own opinion on the matter. That is how it struck me. Frankly, it still does. It seems to me, if I apprehend things correctly, that what my noble friend Lord Conesford has principally in mind is that the potential villain of this piece is the Minister of Transport. That is what I understood him to say.
LORD CONESFORD: I am sorry that you are so anxious to find a villain. What I am anxious to try to point out to the Committee (and I think many members of the Committee have grasped my point, however badly expressed) is this: that this legalised power of taking away the rights of frontages and obstructing the streets is a very exceptional thing under the law and that it should therefore be sparingly used and should only be used where those best able to judge—namely, the London borough—says that it ought to be used. I am not looking for a villain; I am saying they are the best judge. What I do say is that I leave the reserve power in this way: that if some miracle, some utterly exceptional case, occurs in
which the Minister is convinced that, notwithstanding the view of the local authority, this very exceptional power ought to be given, then I think he should ask Parliament for it.
LORD CHESHAM: I see that point, but I am bound to say that if we are to have this Amendment we are creating a position whereby the reserve power can be used only subject to the consent of the borough council. If you are going to ask a borough council to consent to something, it would only be if they had already refused to do it, because it would be used in no other circumstances, and this Amendment, to my mind, makes nonsense in that respect. It means, in fact, that this reserve power can be used only by an Affirmative Resolution of Parliament, and I think that is going too far in the circumstances—that is all.
LORD CHAMPION; The noble Lord has just twitted the Opposition with supporting this Amendment or appearing to do so. He said that throughout the whole of this Bill we have done certain things. His memory is very short. Does he not remember that just before the adjournment of the Committee we moved an Amendment which would cause borough councils to be brought into consultation in the matter of traffic orders under traffic regulations? I think it is unfair.
9.35 p.m.
On Question, Whether the said Amendment (No. 114A) shall be agreed to?
Their Lordships divided: Contents, 24; Not-Contents, 40.

CONTENTS

Airedale, L.

Elliot of Harwood, B.

Morrison of Lambeth, L.

Auckland, L.

Glentanar, L.

Salter, L. [Teller.]

Balfour of Burleigh, L.

Grenfell, L.

Shackleton, L.

Champion, L.

Henderson, L.

Shepherd, L.

Colville of Cuirass, V.

Ilford, L.

Stonham, L.

Conesford, L. [Teller.]

Longford, E.

Summerskill, B.

Crook, L.

Lucan, E.

Terrington, L.

Ellenborough, L.

Mersey, V.

Wilmot of Selmeston, L.

NOT-CONTENTS

Ailwyn, L.

Denham, L.

Lothian, M.

Albemarle, E.

Dundee, E.

McCorquodale of Newton, L

Allerton, L.

Falmouth, V.

Margesson, V.

Beauchamp, E.

Ferrers, E.

Mills, V.

Blackford, L.

Fortescue, E.

Milverton, L.

Boston, L.

Fraser of North Cape, L.

Molson, L.

Chelmer, L.

Furness, V.

Monk Bretton, L.

Chesham, L.

Goschen, V. [Teller.]

Newton, L.

Cholmondeley, M.

Hanworth, V.

Poulett, E.

Coleraine, L.

Hastings, L.

St. Aldwyn, E. [Teller.]

Colgrain, L.

Hertford, M.

Sandys, L.

Colyton, L.

Ingleby, V.

Tweedsmuir, L.

Craigton, L.

Jessel, L.

Wolverton, L.

Cranbrook, E.

Resolved in the negative and Amendment disagreed to accordingly.

LORD CHAMPION LORD CHAMPION moved, after subsection (2), to insert:
"( ) Notwithstanding anything contained in sections 64 to 101 and Part VI of the Highways Act 1959, before any London Borough or the Common Council carry out any works in pursuance of the powers granted by the said sections and Part, they shall first obtain the consent in writing of the Greater London Council."
The noble Lord said: I think I ought to warn your Lordships straight away that this is a deadly dull subject, certainly having nothing of the liveliness of the last debate, because it is on the highly technical matter of the relationship between the new borough councils and the new Greater London Council, affecting particularly the power of the borough councils to close roads either for works or for certain improvements. As I understand it, Clause 16(2) extends the Highways Acts of 1959 and 1961 to the Greater London Council area, and would enable the borough councils and the Common Council to carry out improvements to stop up and divert roads for which they will become highway authorities under this Bill. If the Greater London Council is to function efficiently as the authority for traffic management in its area, it is essential that the Council should be aware of such projects and that their consent to them should be given in writing; otherwise, such works and the stopping up of roads could not be co-ordinated with the requirements of traffic management generally, related as it must be to metropolitan road improvements. For example, a borough council might propose to stop up a street for local traffic purposes which the Greater London Council might require for a one-way traffic scheme, or a number of local improvements might have a direct bearing on traffic on a metropolitan road and affect the question of its improvement. At present, I am advised that no metropolitan borough council may carry out a street improvement scheme without the consent of the London County Council.
This Amendment was put down in another place but, owing to the operation of the guillotine, it was never discussed, so up to now we have been unable to discover the Government's attitude to this matter. It might be argued that the provisions of the Highways Act, 1959, are
1520
sufficient for the purposes that we have in mind here. Section 137 of that Act provides for the preparation of half-yearly programmes of repair and improvement to roads, but under that section these programmes would be insufficient to enable the Greater London Council to safeguard the position of the traffic management authority, whose principal interest would be to ensure that the permanent effects—and I emphasise the word "permanent" here—of the boroughs' improvements should not militate against the proper flow of traffic on metropolitan and other roads.
Section 137 of the 1959 Act affects only the programming of road improvements, and could be wasteful of the boroughs' efforts in preparing schemes which the Greater London Council may veto or delay, perhaps indefinitely, if such a scheme were considered undesirable on traffic or traffic management grounds. The Amendment we are here proposing would obviate that, and I hope the Minister will find his way to accepting it, because it has been suggested to us by people who are very knowledgeable in this matter of the flow of traffic and the relationship which ought to exist between councils and the authority which has to do the work. I beg to move.
Amendment moved—
Page 21, line 47, at end insert the said subsection.—(Lord Champion.)
LORD CHESHAM: I quite see what is in the noble Lord's mind in moving his Amendment, and I am pleased to be able to reveal to him our thinking on this matter. I am sure he will not mind if I draw this differentiation once again. I think he made it clear (but I do not want there to be any misapprehension about it) that of course any of the activities on the part of the borough to which he refers as possibly being detrimental would be on the highways side only. That would be in connection with the highways side of their work, and not the traffic side, because the Greater London Council are the traffic authority for the whole lot.
As the noble Lord told us, the Amendment follows the lines of the requirement which there is at present on the metropolitan boroughs to get the consent of the London County Council to any works of that kind which they carry out on the roads. This would

1521
extend what is a special London arrangement to the whole of Greater London. As I see it, the Amendment runs counter to the recommendation—which is really quite a clear-cut one—of the Royal Commission, that there should be one overall authority responsible for through routes, and that of other roads should be the responsibility of the London boroughs. The noble Lord is as familiar with that recommendation as I am by now. I think he would agree that there will be many road schemes in the boroughs which will be of no conceivable interest to the G.L.C., and I think that the boroughs would feel a little badly about an obligation to obtain the G.L.C.'s consent to them.
At the same time, I am not trying to say that the noble Lord has not got force in his argument, because he has, and they will certainly have an interest, the amount of which I cannot specify, in the work on the borough roads. I think that interest can, in fact, be met because if certain road works have to be carried out as part of a traffic scheme, the G.L.C. then have the power to require a borough to carry out works which do not involve the actual widening of the highways; but they do involve such matters as altering the kerb line, the erection of bollards and that kind of thing, and they have default powers to do the work themselves if necessary.
I do not quite agree with the noble Lord about the requirement that there is to submit the six months' programme of proposed road works to the G.L.C. I think that will have a higher value than he put on it and they will be able to know in advance. I am sure that I am right in thinking that they are in fact going to have a more or less continuous consultation, and there should be no problems in that respect. When you look at the kind of work that can be carried out by the boroughs under the sections of the Highways Act that the Amendment specifies, I should not have thought that the likelihood of an overall or large-scale harmful effect on the trunk interest seems high enough to justify an overall and complete statutory supervision of the kind that the noble Lord seeks. I should have thought they would have been on terms of sensible co-operation, and the boroughs would normally find out the value of the
1522
schemes that they had in mind before the schemes were started.
There is one thing, though, that occurs to me, and I think the noble Lord will probably agree that this is perhaps one of the most important matters. It is the possibility that there might be difficulties created by a borough building a new junction on to a metropolitan road or increasing the flow of traffic at a particular point. I think there could be harm there. I think that it is possible that that situation could be dealt with on the lines of the obligation which is placed on local highway authorities in Section 26 of the Highways Act to obtain the consent of the Minister before constructing a new highway which will connect to a new trunk road
In view of what the noble Lord has said, I think I ought to consider, which I will do, whether that requirement could, and should, be extended to the London boroughs and the G.L.C. in respect of the metropolitan roads. In my view, if I may say so, that the Amendment as a whole goes too far, but I think, in the major respect, that I ought to consider, which I will do, whether there ought to be action in that particular way.
LORD SHEPHERD: Information to the Minister or to the Greater London Council?
LORD CHESHAM: I said, "on the lines". At the moment the consent of the Minister has to be obtained when you make a new entrance into a trunk road. In this case, the G.L.C. would be the authority for the metropolitan road and it would, therefore, be the consent of the G.L.C.
LORD SHEPHERD: I hope the Minister will consider that. Here, the Minister has acceded that there may be a case of an increased flow because of an opening but, as noble Lords know, you can also increase the flow of traffic by the stopping of a local road some half-mile or three-quarters-of-a-mile away. As the noble Lord knows, like water, it will find its way. If you put a stop on it traffic will find another way, and therefore if a borough did put a stop on a particular road for one reason or another—perhaps quite a valid reason—it might well create a different trend of traffic and extra congestion; and

1523
obviously in such a case the Greater London Council should be aware of it in order that they could make the necessary arrangements. I think the noble Lord should consider a little further than merely putting a junction on a road. The Greater London Council should be aware of any change of arrangements made within a borough that might materially affect the movement of traffic on a metropolitan road.
LORD CHESHAM: I thought I had dealt with that point. Perhaps I did not make it clear. A road can be stopped up, and traffic diverted, only on traffic grounds: only the G.L.C., as the traffic authority, can do it. I said that the borough council would have to give notice ahead of their proposed road works, so that if they proposed to close a road the G.L.C. would know in advance and the matter could be discussed between them.
LORD CHAMPION: The noble Lord has clearly met some of our points. I would agree with him that in some of these roads the G.L.C. would have no conceivable interest whatever. But there must be some of those borough roads where anything the borough council proposes to do, either by way of immediate works or by eventual improvement, might affect the traffic engineering problem of the Greater London Council. All we were suggesting was that the borough council should obtain from the G.L.C. consent in writing, and I should not have thought this would mean any great delay or anything of that sort, but would be a useful measure in order to ensure that money is not spent wastefully. But it is my intention to read very carefully what the noble Lord has said to us and, if necessary, return to this on Report stage. In the meantime, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 16 agreed to.
Clause 17:
Metropolitan roads
17.—(1) The following shall be metropolitan roads, that is to say—
(a) subject to subsection (2) of this section, the highways specified in Schedule 7 to this Act;
9.59 p.m.
LORD CHAMPION LORD CHAMPION moved, in subsection (1)(a), to leave out "the high-
1524
ways specified in Schedule 7 to this Act" and insert:

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

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

but without prejudice to the generality of the foregoing provision, none of the following bridges, that is to say, Blackfriars Bridge, London Bridge, Southwark Bridge and Tower Bridge, and no highway carried by any of those bridges, shall be, or become, such a road."
The noble Lord said: I nearly lost my notes. That would have been a disaster, because, like the last one, this Amendment is pretty technical, and therefore I prefer to stick fairly closely to my note.
This Amendment seeks to define metropolitan roads as all the existing Class I roads and including, as I shall explain later, the Albert Bridge, but excepting the bridges mentioned in the Amendment. If I may deal first of all with the inclusion of the Albert Bridge under sub-paragraph (ii), I have to say that this bridge is on route B.304, and it presents structural problems of considerable difficulty which would justify the Greater London Council having it under its supervision. I cannot pretend to have any particular knowledge of that bridge, or of the difficulties which the experts foresee and envisage, so I must leave that aspect of it to some of my noble friends who do know this bridge and would have some immediate and perhaps local knowledge of it.
A similar Amendment was moved in another place. On that occasion Mr. Hay, then Parliamentary Secretary to the Ministry of Transport, explained the government selection of 60 per cent. of the Class I roads and 4 per cent. of the Class II roads to be metropolitan roads under the Greater London Council. He said, in column 167 of the OFFICIAL REPORT of the Standing Committee:
"I believe that it is better that the metropolitan roads should be selected on the basis of being the roads which axe mainly used by through traffic. That is the criterion that we have adopted in constructing the Seventh Schedule. We have taken as metropolitan roads the roads which are mainly used by

1525
through-traffic and have left to the boroughs all the other roads which are principally used by domestic local traffic."
So he set up two definitions: the first is through-roads as metropolitan roads, and domestic local traffic as borough roads. It seems to us that one can talk of "through" traffic only after defining the area through which the traffic passes. Clearly the Government are not considering "through" traffic in Greater London, because only 3 per cent. of the traffic entering the area passes right through from one side to the other; but if the Government mean traffic through new boroughs, then there is much more "through" traffic than the selection of the metropolitan roads would suggest.
The following have been given to me as examples of "through" traffic for which no metropolitan road is provided. There is much traffic from Sydenham, Penge and Beckenham into central London through Camberwell, but the roads used by this traffic are not proposed to be metropolitan roads. To use a metropolitan road this traffic would have to go round through either Tulse Hill or Lewisham, which is absurd. The second example is that there are through routes from Wandsworth into the South Bank area. Two of them are to be metropolitan roads but the shortest, Battersea Park Road, is not. One of the main roads from the North, via Finchley Road, suddenly ceases to be a metropolitan road at Marylebone Road; but, quite clearly, through-traffic continues down Baker Street and back through Gloucester Place.
On the analogy of Class I roads in the country as a whole the classification by the Ministry of Transport of roads as Class I roads in London is intended to mark those roads which carry traffic from one borough to another, often through an intermediate borough, while the lesser roads in London carry the "domestic local traffic" referred to by Mr. Hay in Standing Committee. Even the selection of the existing Class I network is bound to be arbitrary unless through-traffic is defined in relation to a specific area, and unless a minimum percentage of through-traffic is laid down as a qualifying standard and the figures of a complete traffic survey are available.
Last night, and again to-day, the Parliamentary Secretary told us much about the traffic survey now taking place, and pending the completion of that vast survey it is surely better to use the present Class I roads, which are re-classified from time to time, as a basis for the new metropolitan roads rather than those set out in Schedule 7 to the Bill. He said to-day that the survey might change the pattern of trunk roads. Surely the same thing is bound to apply to these metropolitan and other roads in the Greater London area. We had intended to deal with Schedule 7 later, but I imagine that the noble Lord, Lord Chesham, when he comes to reply, will have to make some reference to this, and this might cause us not to move the Amendment to delete Schedule 7. I beg to move.
Amendment moved—
Page 22, line 22, leave out from (" section ") to the end of line 23 and insert the said new words.—(Lord Champion.)
LORD CHESHAM: I do not know whether I am right or not, but I read this Amendment in conjunction with Nos. 117 and 123, to which the noble Lord has referred, because I could not see how they could be successfully considered in isolation; and true enough, I shall in a moment talk about Schedule 7 and the reasons for it. If this Amendment were to be accepted, we should, as the noble Lord explained, get as metropolitan roads all Class I roads in Greater London, whenever they were classified as such before or after 1965. I am quite prepared to understand that a small error might have crept in, but by the drafting we could also get most of the rest of the roads in London, including Class III roads. I feel that that was probably not intended. I will make nothing of that point. If it was unintentional it could be cleared up.
The second Amendment, which I think must be considered at any rate with this one, deletes from the clause the provisions for altering the selection of metropolitan roads, on application by any London authority to the Minister, who then of course has to consider the representations of the other authorities affected before he comes to a decision. Since there would then be no way of altering the selection once made—I imagine that what noble Lords opposite wish is that it be an almost once-for-all selection over

1527
a wide scale—the only way that a change could be made would be by way of a change of the classification of the road. That is the only way it could be handed over to a borough. If it were to be declassified, I do not imagine that the borough would welcome that much, because it would automatically mean that the grant available for that road was reduced from 75 per cent. to 60 per cent. Therefore, I should have thought the chances of a borough being pleased to accept any road on this basis would have been rather small.
Perhaps I may make the point that I do not think that noble Lords opposite ought to pin too much faith on classification in their argument, because roads have been classified since 1920, which is now 43 years, and the currency of classification has in some ways become a little debased. There have been a lot of changes in function and loadings of roads, and their classification is not always kept up to date. If we start them again now—in a way that is what we are trying to do—the picture would be rather different. But we made a first shot and, as I shall show in a moment, there are means and opportunity for modifying it.
What the noble Lord has put forward is all very well, but my right honourable friend believes that he has interpreted the views of the Royal Commission more correctly than have noble Lords opposite in framing their proposals; that the more limited selection that we are proposing in the Bill will mean that the G.L.C. is the effective highway authority for all the important through roads, leaving the responsibility in the boroughs for all other roads which, even when they are carrying heavy traffic, are more local in character.
I think it is important not to confuse mere weight of traffic—I am rather echoing my honourable friend's words in another place—on a road with the value of the through traffic. There is in our proposals a simple and effective procedure for altering the selection of metropolitan roads which I have already mentioned, and which the new authorities can use when they come into office, and as traffic conditions change. Indeed, it would be highly suitable for dealing with the kind of case which the noble Lord, Lord Champion, mentioned to us. It would be perfectly possible if there was something wrong there for it to be put
1528
right under the procedure in the Bill. The roads adopted by the Minister in his selection under the Bill follow the definition of the Royal Commission that they should be "routes used by through traffic". They are roads forming a continuous network comprising a continuation of the trunk road radials into the centre of London, the routes to the river crossings, the important ring and cross routes, and the main routes to the docks.
In Schedule 7 there are some 500 miles of class I roads dealt with, as compared with the total of just over 800 miles in London as a whole. Also there are some 30 miles of class II and class III roads. It may be surprising to find them in there, but they are roads which in fact have not been reclassified over the years although they are carrying an increasing volume of through traffic. Among them in fact is the Albert Bridge, which I think we are all agreed should be the responsibility of the Greater London Council.
The main difference, therefore, between our proposals and those of noble Lords opposite is how to treat these 300 miles of class I roads that we do not propose should be metropolitan. We do not want the Greater London Council to be responsible, for two reasons. One is that the Royal Commission were not in favour of using the existing classification of roads in London as a means of settling which roads should be the responsibility of the Greater London Council. They recommended that it should be the responsibility of the Minister, as recommendation 4, on page 119, said, to determine, after consultation from time to time, which roads or streets should be metropolitan ones. It is in the light of that recommendation that the Bill has been drafted as it has.
Although class I roads have been given that classification because they are important for through traffic, we have to recognise that there are different degrees of importance for through traffic among roads of that class. There are certainly some which, on balance, are more appropriate to be under the authority of the borough and not the Greater London Council. The powers that the Greater London Council has, amongst others, include powers of direction in regard to planning applications which affect metropolitan roads. That is bound to create a certain amount of extra work and delay

1529
and on that ground there is no reason for them to consider planning applications where their road interest is insufficient for them to do so.
The Minister's selection is not intended to be final, as the selection would be if the Amendment were to be accepted. There have already been a few changes in the composition of the Schedule as a result of the representations made. In fact, I shall later move an Amendment which is the latest of them. Other changes can quite easily be made later under the procedure in Clause 17(2) and (3). I think that our proposals are very much closer, if I may say so, to the recommendation of the Royal Commission. Therefore, I hope your Lordships will keep the Bill as it is and not accept this Amendment.
LORD SHEPHERD: Could the noble Lord say on what sort of criteria the Government made their decision as to which roads should appear in Schedule 7 and which roads would remain within the borough? My understanding of the Royal Commission Report was that the through roads—that is, the roads which carry traffic from one borough to another, or from the outskirts to the centre—should themselves be metropolitan roads. My understanding as that there are many roads which come within the classification which I have mentioned; roads which obviously, subject to improvement, could well be developed to increase the free flow of traffic from one borough to another, from one side of London to the centre. And yet, so far as I know, we have no idea on what basis the Government have made up their mind.
The Government, with the London County Council, are spending £600,000 on a survey. This information is vitally necessary. In fact, I believe that it is one of the first surveys, if not the first, undertaken for many years. This obviously will produce information upon which the strategic planning of the Greater London Council can be carried out. I think it is quite wrong to lay down in this Bill this fixed definition of what roads are metropolitan and what are not. As I said earlier, yesterday and again to-day, in my judgment all the roads of the London area should, in the initial stage, be placed under the Greater London Council. That was rejected. My noble friend has therefore moved this
1530
Amendment, which I support. It does not go so far as I personally should like in these early stages; but at least it would say (and this is the point) that the Class I roads, which are, in the main, the better-class roads carrying the heavy through traffic, should in their total come under the Greater London Council.
Is it, perhaps, that the Government have given 40 per cent. of these roads to the boroughs as a sort of little offering to them for taking over all the second-class and third-class roads? I wonder whether that is not the case. It may be. The noble Lord shakes his head, but, so far as I know, he has not given any definite reason as to how this division was made. He has talked about through traffic and such like, but he has not said whether this division is based upon the amount of traffic that is following through at the present time or whether future development has been taken into account. I should have thought that that latter part was perhaps the most important for the future. In my view, those roads on which the development will take place should from the very beginning be under the Greater London Council. I will support my friend if he decides to take this Amendment to a Division.
LORD CROOK: I would support my noble friend. I had intended to say something about the Albert Bridge, but this is a very late hour and I do not want to keep the Committee if in fact I followed correctly what the Minister said. He used, I think, the words, "We are all in agreement about the Albert Bridge." Perhaps he can just say what it is we are all in agreement about. I must say that I remember when Lambeth Bridge was built, very like the Albert Bridge, and when, in the Great War, we had the "break-step" rule for the troops laid down. We also had the "break-step" rule for the Albert Bridge. We have very real structural difficulties there, and I know the L.C.C. have been concerned about them. I do not want to make a speech about the Albert Bridge, but route B.304, which is mentioned in the Amendment, is the Albert Bridge approach. When the Minister says. "We are all in agreement about the Albert Bridge", if he would tell us what we are in agreement about I might not need to make the speech I might otherwise have had to make.
LORD CHAMPION: Is the noble Lord going to respond?
LORD CHESHAM: If the noble Lord did not understand, let me say—we were in agreement that the Albert Bridge should be the responsibility of the Greater London Council.
LORD CHAMPION: It was mentioned in the Amendment because it used to be a Class II road. That is the reason for its inclusion here. I must say I cannot accept the noble Lord's explanation as being satisfactory. It is true the roads were classified as Class I a very long
LORD SHEPHERD LORD SHEPHERD had given notice of Amendment to leave out subsections (2) and (3). The noble Lord said: Before I move this Amendment, I wonder whether I may have some assistance from the Government. I do not move that the debate be now adjourned in any sense of mischief, but I am sure the Committee will appreciate that some of us have been four days in Committee and are getting to feel the weight of it. As an example, I found that the noble Lord, Lord Chesham, was speaking to an Amendment which was on the Order Paper and which, in fact, proved to be a little bit of nonsense and I had not intended to move it. But he spoke of it and rather used it as a case against us a few
time ago, but it would not have mattered if some little further delay in classification had taken place until such time as we have the results of the survey now going on so assiduously; and the report will not be very long delayed. However as the noble Lord regards the Amendment as unsatisfactory, I hope we shall divide.
10.22 p.m.
On Question, Whether the said Amendment (No. 116) shall be agreed to?
Their Lordships divided: Contents, 13; Not-Contents, 51.

CONTENTS

Champion, L.

Lucan, E. [Teller.]

Summerskill, B.

Crook, L.

Morrison of Lambeth, L.

Walston, L.

Henderson, L.

Shackleton, L.

Wilmot of Selmeston, L.

Listowel, E.

Shepherd, L.

Longford, E.

Stonham, L. [Teller.]

NOT-CONTENTS

Ailwyn, L.

Denham, L.

Jessel, L.

Albemarle, E.

Dundee, E.

Lothian, M.

Allerton, L.

Ellenborough, L.

Luke, L.

Balfour of Burleigh, L.

Elliot of Harwood, B.

McCorquodale of Newton, L.

Beauchamp, E.

Exeter, M.

Margesson, V.

Bessborough, E.

Falmouth, V.

Merrivale, L.

Boston, L.

Ferrers, E.

Mersey, V.

Chelmer, L.

Fortescue, E.

Mills, V.

Chesham, L.

Fraser of North Cape, L.

Molson, L.

Cholmondeley, M.

Furness, V.

Monk Bretton, L.

Coleraine, L.

Glentanar, L.

Newton, L.

Colville of Culross, V.

Goschen, V. [Teller.]

Perth, E.

Colyton, L.

Grenfell, L.

St. Aldwyn, E. [Teller.]

Conesford, L.

Hastings, L.

Salter, L.

Craigton, L.

Hertford, M.

Sandford, L.

Cranbrook, E.

Ilford, L.

Sandys, L.

Cullen of Ashbourne, L.

Ingleby, V.

Wolverton, L.

Resolved in the negative and Amendment disagreed to accordingly.

moments ago, and I am afraid I was not alive to it in order to deal with it. That is an illustration of what some of my noble friends are now going through. We have not got all that amount to do in the way of Amendments, but some of them are quite serious Amendments. With the time available next week and the added time the Government have provided by the arrangements that have been made, I should not have thought it unreasonable to suggest that the Government should agree that this Committee stage should be now adjourned. We will certainly do what we can to see that this particular part is dealt with as expeditiously as possible on Monday.
EARL ST ALDWYN: As your Lordships know, I had hoped that we should finish this Schedule to-day. If I may say so, there has been a general feeling throughout the Committee to get on with the Bill, but it has been delayed by one thing or another. I wonder whether noble Lords would consider carrying on, say, for another 20 minutes. I appreciate that noble Lords have trains to catch, and that many of these cease to run at 11 o'clock. I do not know whether noble Lords opposite would be prepared to carry on for another 20 minutes and take a little more out of this List before Monday. I appreciate that we have a little extra time on Monday, but I would ask noble Lords to agree to this.
LORD SHEPHERD: My noble friend Lord Morrison of Lambeth, to my great surprise, has suggested that we should take the advice of the Government Chief Whip. Wonders never cease! I suppose I have not much option but to take that advice. But ten minutes to eleven is ten minutes to eleven.
EARL ST. ALDWYN: I assure the noble Lord that I will move the Adjournment at that time.
Clause 17 agreed to.
Clause 18 [Delegation or transfer of functions with respect to metropolitan roads]:
10.33 p.m.
LORD ILFORD LORD ILFORD moved to leave out subsection (1) and insert—
("(1) Where the council of any London borough or the Common Council by notice given to the Greater London Council before 1st October, 1964, or before 1st July in any subsequent year so require the Greater London Council shall as from 1st April in the calendar year next following that in which the notice is given delegate to the council which has given such notice the functions of the Greater London Council with respect to the maintenance and improvement of, and other dealing with—

(a) so much of any metropolitan road as lies within the borough or, as the case may be, the City;

(b) any land which does not form part of a metropolitan road but has been acquired by the Greater London Council in connection with such a toad under section 214(5) or (6) or 215(2) of the Highways Act 1959.

upon such terms as may from time to time be agreed between them or, in default of agreement, as may be determined by the Minister of Transport.")
The noble Lord said: This Amendment is concerned solely with questions of maintenance and upkeep of the metropolitan roads. It has nothing to do with road planning or road policy. Your Lordships will recall the arrangements which the Bill makes about the maintenance of metropolitan roads. The trunk roads remain with the Minister, and nothing turns upon them. The metropolitan roads are the responsibility of the Greater London Council, and all other roads become the responsibility of the London boroughs. The London boroughs will thus be responsible for a length of roads which will very much exceed the length of metropolitan roads within their areas. That means That the boroughs Will inevitably have to establish and maintain a large and strong works department, equipped with the heavy plant needed for modern road construction and able to employ the specialist personnel required.
No one disputes that the Greater London Council should be responsible for planning and for the design of the metropolitan roads. This Amendment is concerned solely, as I have said, with the question of finding the most convenient and economical method of maintaining these roads. Clause 18 of the Bill, which deals with this matter, provides that the Greater London Council may agree to delegate or may require the London boroughs to maintain the metropolitan roads within their areas. But the boroughs have no power to require the Greater London Council to delegate to them the metropolitan roads, although they will possess, as I say, a works department within the borough which will be well able to undertake the maintenance, both of the borough roads and of the metropolitan roads.
This Amendment proposes that the London boroughs should be able to claim from the Greater London Council delegation of their responsibility to maintain the metropolitan roads. There is nothing novel in that proposal. The Amendment will place the London boroughs in substantially the same relationship to the Greater London Council which the county districts bear to the county councils in the provinces. Most of the county districts outside London can claim from the county council the maintenance improvement and upkeep of the county roads within their

1535
boundaries without any agreement on the part of the county council. This arrangement has been accepted for many years and, so far as I am aware, works in a satisfactory manner.
The practical importance of this proposal is perhaps more substantial than might appear at first sight. The boroughs must in any case maintain a strong works department, well able, as I say, to maintain the metropolitan roads as well as the roads within their own boroughs. We ought not to encourage the duplication of these works departments. I do not suggest that the Greater London Council, when it comes into being, will necessarily adopt an extravagant or uneconomic mode of administration. I have no doubt that in most cases it will delegate the maintenance of the metropolitan roads to the London boroughs. But these things happen somehow in local government, and we ought to guard against them now in this Bill.
The arrangement which I propose works well in the country outside London, and there seems to be no reason why it should not work equally well in London. I do not anticipate that the noble Lord is likely to accept this Amendment, but I hope he will be able at least to give me some encouragement that at a later stage something of this kind will be considered. This is something which the present boroughs are anxious that their successors should have, and I hope that the noble Lord will be able to give some prospect that they may be able to get something like it. I beg to move.
Amendment moved—
Page 23, line 32, leave out subsection (1) and insert the said new subsection.—(Lord Ilford.)
10.40 p.m.
LORD MORRISON OF LAMBETH: I hope the Parliamentary Secretary's brief is marked, "This Amendment should be resisted." I do not think that this is a wise Amendment. The Bill as it is leaves the door open for free negotiation between the two sides of local authorities, and I think it is best left there. They can negotiate on the basis of equality and try to come to a free decision. I forget whether the Minister in the background can arbitrate between them, but I should be surprised if he cannot. I should expect it in the circumstances.
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But this Amendment, on the other hand, puts it the other way way round: that if the borough claims delegation, it must have it. I do not think that is fair as between the Greater London authority and the London boroughs. But, as I read, the Amendment, if they claim, they get it, and the only way in which the Minister comes in is that they get it
"… upon such terms as may from time to time be agreed between them or, in default of agreement, as may be determined by the Minister of Transport."
So the Minister comes into it only as upon the terms on which they shall have the delegation.
I think it is not a fair Amendment. I think the Bill as it is is more fair because the two authorities can argue and begin on a basis of equality. The other thing I do not like too much, and which a lot of local authorities will not like, is this term "delegation". It means that if they delegate the Greater London Council is going to be "top dog" about finance all the time. There has been a lot of delegation in Middlesex about education, and it has led to a great deal of conflict between the county council and the county districts. I think if the borough is able to do the job, the thing is to transfer to them clear, and they then carry the financial responsibility, subject to such grants as are forthcoming to them from the Minister of Transport. For these reasons, I hope the Parliamentary Secretary will find it right and expedient that he should resist this Amendment, which I think it would be unwise for the House to adopt.
LORD CHESHAM: Swaying slightly on my feet with amazement, I am, of course, in agreement with the noble Lord, Lord Morrison of Lambeth. I know that the boroughs have large maintenance organisations existing and they want to be sure that they are not wasted and, in particular, duplicated by the possibility of the G.L.C. setting up a large works organisation of their own. The Government agree that in practice the G.L.C. ought to delegate this maintenance work and, in fact, they will be encouraged to do so. The Minister will normally delegate maintenance work on trunk roads to the boroughs and not to the G.L.C., but it is one thing to say that it is desirable in practice but another matter to impose the requirements on the G.L.C. to delegate that maintenance. In

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practice, I do not believe they are going to set up this large maintenance organisation of their own, because their 550 miles of metropolitan road is scattered widely over the whole area and it would not seem at all anything like an economic proposition.
I do not think it is right to compare the position in certain counties like Middlesex, Essex and Kent, who maintain, though not perhaps all, the county roads in their respective areas, because they have a greater mileage themselves over a relatively smaller area than the G.L.C. And, apart from Middlesex, in any case they have the onus of looking after all the classified roads in their rural areas as well, so they can justify their larger organisation.
I think your Lordships ought to know that it is my right honourable friend's general intention that the county highway depots and equipment in Greater London should be transferred in due course, by order made under Clause 87 of this Bill, to the boroughs, and not to the G.L.C. To impose this requirement to delegate maintenance on the G.L.C. is, I think, going too far, when we consider that a body of this kind, when it has this responsibility as a highway authority, should be compelled to delegate. In particular, I think it must be wrong in principle for the G.L.C. to be left with the legal responsibility as highway authority while being compelled to delegate, and thus be forced to rely on the boroughs for maintenance and improvement. It does not happen anywhere else under the Highways Act, 1959. The Minister as highway authority for trunk roads retains his discretion throughout about delegation, and so do county councils for classified roads. I do not see why the G.L.C. should be different. The noble Lord, Lord Ilford, mentioned claiming authorities in the country as being a good example to how it works. There is a vital difference, and that is that the claiming authority when the claim is successful becomes also the highway authority, which is a definite contrast to what would be the position of the G.L.C. compelled to delegate only the maintenance.
There is one other point. Apart from the maintenance off ordinary highways, there are questions of special structures in the metropolitan network, such as
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Thames tunnels and bridges. It would be sensible for the G.L.C. to retain the maintenance of those itself, as the L.C.C. now does. They have a very expert team of inspectors who look after this work. They have no large works department for this because it is done by contract. But they have this expertise which it would be wrong to be compelled to delegate. In view of what I have said about the undesirability, I hope the noble Lord, Lord Ilford, will feel a little happier about the position, and not wish to press the Amendment.
LORD ILFORD: I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD HASTINGS: This Amendment is consequential on the removal of the Surveyor from the Greater London Council's statutory list of chief officers. I would only explain that the Amendment was moved in another place and they did not pass the consequential one. I beg to move.
Amendment moved—
Page 24, dine 21, leave out ("their surveyor") and insert ("some officer of the Council").(Lord Hastings.)
On Question, Amendment agreed to.
Clause 18, as amended, agreed to.
Clauses 19 and 20 agreed to.
Schedule 5 agreed to.
Schedule 6 [Amendment as from 1st April, 1965, in Highways Act 1959]:
LORD CHAMPION: Having regard to the lateness of the hour, I do not propose to make the two-hour speech I had prepared on this important Amendment. I will reduce it considerably and try to squeeze it into a very few words. Section 10(1) of the 1959 Highways Act deals with delegation by the Minister of Transport of certain authority with respect to trunk roads. One of the councils to which this delegation may take place is, of course, the County of London; that is, the L.C.C. The words "including the County of London" which appear in that section of that Act are to be repealed by Clause 17 of this Bill, and it follows, therefore, that unless the Amendment is accepted the Greater London Council will be the only highway authority in the country to whom the Minister would, be

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unable to delegate functions respecting trunk roads. This would be a Gilbertian situation, and I cannot imagine that the Government would wish this to take place as a result of the Bill now before us. I beg to move.
Amendment moved—
Page 142, line 22, after the words ("In section 10(1)") insert ("for the words '(including the County of London)' there shall be substituted the words 'with the Greater London Council and'").—(Lord Champion.)
LORD CHESHAM: When I have got something I can accept I get overanxious; and I can accept this, my Lords. The real point as we see it, the value of acceptance, is to use the expert facilities which the Greater London Council will inherit from the London County Council in regard to structures. The work of the inspectorate which we have just been talking about will be very valuable in connection with complicated fly-overs like the one to be built at Brent Cross, and I think we ought to have that expertise available. We should use this power of delegation only in special circumstances, and it is not intended to be regarded as fostering a desire of the Greater London Council to build up a vast maintenance organisation to do this work. It would be used only in special circumstances when their special expertise could be put to good use, and it is expertise which the boroughs could not be expected to have. If they had it we should probably use theirs.
LORD CHAMPION: I am bound to thank the noble Lord for accepting this
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Amendment. I read in the "Day by Day" under "The Stars" column that this was my day to make friends and influence people. I am glad to say that the stars have proved correct.
On Question, Amendment agreed to.
LORD CHESHAM: This is a drafting Amendment for clarity. I beg to move.
Amendment moved—
Page 144, column 27, leave out from ("road") to second ("the") in line 28.—(Lord Chesham.)
On Question, Amendment agreed to.
LORD CHESHAM: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

FELIXSTOWE DOCK AND RAILWAY BILL [H.L.]
The Queen's consent signified, and Bill reported from the Select Committee, with Amendments.

LONDON COUNTY COUNCIL (IMPROVEMENTS) BILL LONDON TRANSPORT BILL
Brought from the Commons; read 1a, and referred to the Examiners.
House adjourned at seven minutes before eleven o'clock.