Sitting of 20 June 1967

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  SAINT BARNABAS, LEWISHAM BILL [Lords]
  Read the Third time and passed, with Amendments.
DARTFORD TUNNEL BILL
  SAINT STEPHEN, SOUTH LAMBETH BILL [Lords]
  As amended, considered; to be read the Third time.
MINISTRY OF HOUSING AND LOCAL GOVERNMENT PROVISIONAL ORDERS (BUXTON, STOCKPORT AND YORK) BILL
  MINISTRY OF HOUSING AND LOCAL GOVERNMENT PROVISIONAL ORDER (GREATER LONDON PARKS AND OPEN SPACES) BILL
    MINISTRY OF HOUSING AND LOCAL GOVERNMENT PROVISIONAL ORDER (WEST HERTFORDSHIRE MAIN DRAIN AGE DISTRICT) BILL
    Read the Third time and passed.
CHURCHES AND UNIVERSITIES (SCOTLAND) WIDOWS' AND ORPHANS' FUND (AMENDMENT) ORDER CONFIRMATION BILL
  PITTENWEEM HARBOUR ORDER CONFIRMATION BILL
    ROYAL BANK OF SCOTLAND ORDER CONFIRMATION BILL
    Considered; to be read the Third time Tomorrow.
ST. ANDREWS LINKS ORDER CONFIRMATION BILL
To be considered Tomorrow.
ORAL ANSWERS TO QUESTIONS
  LOCAL GOVERNMENT

    Planning Applications (Parish Councils)
    Sir T. Beamishasked the Minister of Housing and Local Government whether, during his current review of the planning machinery set up in the Town and Country Planning Act, 1962, he will consider the proposal that parish councils should have, as of right, a copy of all planning applications that affect them.
    The Minister of State, Ministry of Housing and Local Government (Mr. Frederick Willey): My right hon. Friend has considered this proposal, but he thinks it better to encourage voluntary arrangements for consultation with parish councils.
    Sir T. Beamish: Is the Minister of State aware that quite unnecessary friction and delay occur through the failure of planning authorities to inform parish councils about these matters? Will he give every thought to the possibilty of statutory requirements making it necessary for parish councils to be kept fully informed?
    Mr. Willey: As far as I am aware, the voluntary arrangements are working well. If the hon. Gentleman cares to call my attention to cases where he thinks that they are not working effectively, certainly I will look at them.
    Mr. Allason: How does the right hon. Gentleman reconcile the desire of the Government that individual neighbours should be informed with his answer that he does not require parishes to be informed?
    Mr. Willey: The voluntary arrangements are working well, and I think it is better left to voluntary arrangement. It is difficult to provide standardised procedures to meet the needs of all counties. I think that it is better to rely upon this, if it works.

    Protection of Wild Life
    Sir T. Beamishasked the Minister of Housing and Local Government what advice he has given to local authorities

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    about the damage to wild life caused by the indiscriminate and careless use of modern hedge-cutting machines and weed killers on road verges; and if he will encourage the setting up by county councils of countryside sub-committees of county planning committees, with access to scientific advice, as in East Sussex.
    Mr. Wiley: My right hon. Friend believes local authorities are well aware of the objections to these processes, but he considers the setting up of countryside sub-committees to be a question of management best decided by the county councils themselves. Full access to scientific advice need not depend on this particular arrangement.
    Sir T. Beamish: Is the Minister of State aware that the attitude of councils varies from the enlightened to the extremely callous, as must be apparent to a great many people travelling round the countryside? Does he not feel that there is a clear case for persuading local authorities concerned with road verges to keep in touch with the Nature Conservancy and with voluntary organisations like the county naturalist trusts?
    Mr. Willey: I agree that the Nature Conservancy has served very usefully in helping local authorities with scientific advice, and we shall encourage that.

    Local Authority Membership (Financial Interest)
    Mr. Arnold Shawasked the Minister of Housing and Local Government if he will take steps, by legislation or otherwise, to disqualify contractors, estate agents or any persons who have financial dealings with local authorities, from membership of such bodies.
    The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. James MacColl): No, Sir. There are already statutory provisions to ensure that the financial interests of elected members do not conflict with their public duties.
    Mr. Shaw: How does my hon. Friend square that with the answer he gave on 25th April concerning the civic rights of teachers?
    Mr. MacColl: There is a lot of difference between being in permanent and continuous employment of a local
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    authority and having an occasional contract with one.
    Mr. Alan Lee Williams: Will my hon. Friend reconsider the whole question? Is he aware that in my constituency there is a great deal of public anxiety about the sale of certain parts of Hornchurch Airfield? I am not suggesting that there is corruption, but will my hon. Friend look into the question of introducing legislation in regard to estate agents?
    Mr. MacColl: My right hon. Friend's tendency, as was the Maud Committee's, is not to increase the number of pecuniary interest tests but to make the legislation a little more sensible.

    Rivers and Estuaries (Pollution)
    Mr. Wallasked the Minister of Housing and Local Government what is the estimated total cost to local government and industry, respectively, of implementing existing legislation about the pollution of rivers and estuaries.
    Mr. MacColl: I do not think that it would be practicable to make any estimate. The maintenance or restoration of the wholesomeness of our rivers is a continuous process. Future changes in the volume and complexity of the waste waters to be treated cannot now be predicted accurately.
    Mr. Wall: Is the hon. Gentleman aware that the high standard demanded by river authorities is putting a very severe strain on industry, and also now on local authorities who receive no Government grant for this purpose? Would not it be wise to phase this necessary legislation over a period of years so that the financial burden is not as acute as it is today?
    Mr. MacColl: As Lancashire Members my right hon. Friend and I know a thing or two about polluted rivers, and I do not think that we would want to do anything to discourage river authorities from getting on with this work.

    New Gasholders, Macclesfield
    Sir A. V. Harveyasked the Minister of Housing and Local Government if he will receive a deputation from Macclesfield concerning the proposal to erect new gasholders there.
    Mr. Willey: My right hon. Friend has called in for decision by himself an application by the North Western Gas Board for planning permission to erect gasholders and buildings at Paradise Farm, Macclesfield. A public local inquiry at which interested parties will be able to state their case is being arranged and it would therefore be improper for him to receive a deputation.
    Sir A. V. Harvey: Is the right hon. Gentleman aware that a few weeks ago his hon. Friend—one of the UnderSecretaries—gave an undertaking that he would visit Macclesfield to look at the site? Is he further aware that the proposal to erect two gasometers, 135 feet in diameter, in the most beautiful country in the Pennines is sacrilege? Will he protect the interests of local residents?
    Mr. Willey: As this is to be the subject of a local inquiry and my right hon. Friend will be exercising an appellate jurisdiction, the hon. Member will not expect me to comment upon what he has said.

    Local Authority Expenditure
    Mr. Biffenasked the Minister of Housing and Local Government by what amount he intends to revise the projected expenditure of £4,392 million by local authorities in 1969–70, at 1965 Survey Prices, in account of the underfulfilment of the National Plan; if he will specify the services affected by the revision; and if he will make a statement.
    The Minister of Housing and Local Government (Mr. Anthony Greenwood): I would refer the hon. Member to what my right hon. Friend the Chancellor of the Exchequer said in his Budget statement.
    Mr. BiffenOn this subject, that was remarkably uncommunicative. Does the right hon. Gentleman expect that figure to be revised as a result of the Chancellor's statement? As soon as the revision is fulfilled, will he undertake to report to the House in the detailed manner requested in the Question?
    Mr. Greenwood: I am not sure that it is possible to be more communicative to the hon. Gentleman, because no one is clear what his Question requests. It refers to figures on both current and capital account, to England, Scotland, Wales and Northern Ireland, and the
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    responsibility of many other departmental Ministers. I can go no further than my right hon. Friend the Chief Secretary did in reply to the hon. Gentleman on 13th June.

    Smokeless Fuel Plant, Coventry
    Mr. Edelmanasked the Minister of Housing and Local Government whether he is aware of the hazards to health and the damage to amenities caused by the Homefire Plant at Keresley, Coventry; and if he will ensure that the process of making smokeless fuel in the interests of health and aesthetics should not itself result in fouling of the atmosphere.
    The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. Robert Mellish): I much regret the conditions caused by this plant at present, and I am concerned that every effort should be made to improve them in the interests of health and amenity. I understand that smoke emission from an incinerator has been much reduced and is expected to improve further shortly. The need to minimise air pollution was in mind when the plant was planned and the alkali inspectorate will seek to ensure, in co-operation with the National Coal Board, that this aim is realised.
    Mr. Edelman: While appreciating my hon. Friend's efforts, is it not absurd that a plant designed to eliminate smoke should cover the neighbourhood with a pall of black, soggy fall-out? Will my hon. Friend act more energetically to avoid this extraordinary paradox?
    Mr. Mellish: To my hon. Friend's credit, he has been active on behalf of his constituents. I understand that there will be a further reduction in smoke emission in three months and that the new arrestment plant which is being installed will ensure that it runs properly. I can only apologise on behalf of those who operate the plant; I am not here to defend it.

    Garages (Rates)
    Mr. Sharplesasked the Minister of Housing and Local Government whether he will seek to amend the law so that those garages rateably occupied by householders and used in connection with their occupation of a nearby dwelling may be entitled to the 5d. rate deduction

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    given to householders under Section 48(1) of the General Rate Act, 1967.
    Mr. MacColl: No, Sir. The purpose of the present provision is to reduce the rate burden on householders in respect of their dwellings and garages only benefit incidentally as parts of dwellings. While I understand the annoyance of some ratepayers, the amount involved is normally very small and any alteration would still leave anomalies.
    Mr. Sharples: Is the hon. Gentleman aware of the sense of unfairness between occupiers of houses, who are entitled to this deduction, and those of flats, who are not? Will he consider this again?
    Mr. MacColl: Most people would feel a sense of unfairness that they never had any rebate before on domestic payments. I think that most ratepayers recognise the generous nature of the Government's provision.
    Mr. Boyd-Carpenter: Is it not curious that if a garage is part of the structure of the house it gets relief but that if it belongs to the owner of a flat and is a few yards away it does not? Does the hon. Gentleman really defend that?
    Mr. MacColl: It is not for me but for the courts to defend it. The question of whether or not a garage is separately rated must be settled by the courts, and any ratepayer is entitled to test it in the courts.

    Caravans (Rates)
    Mr. Lubbockasked the Minister of Housing and Local Government what steps he will take to ensure that caravan site operators pass on to the residents the saving in rates they have realised as a result of individual rating of caravans.
    Mr. MacColl: My right hon. Friend would certainly expect site operators in these circumstances to adjust their pitch rents, but he is not yet satisfied that special steps to compel them to do so are needed.
    Mr. Lubbock: What information has the hon. Gentleman about the practice of site operators in this respect? Does he not consider it grossly unfair that those residents who have been levied as to two years' back rates are entitled to claim
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    rebates only from April last year, and will he introduce legislation to remove the anomaly?
    Mr. MacColl: My right hon. Friend is looking at the problem, but the difficulty is that there are many other people to whom this may happen and not just those in caravans. But as regards refunds of rates, I imagine that site operators are very much aware that the eyes of the hon. Gentleman and other are on them at the moment and will think this is the sensible thing to do.

    Statutory Undertakings
    Mr. Neaveasked the Minister of Housing and Local Government what progress he is making with his review of present legislation relating to the position of statutory undertakings in regard to planning and compensation; and whether he will make a statement.
    Mr. Willey: Consultations are proceeding with the other Departments concerned in setting on foot an investigation of the position of the statutory undertakers under planning; and I am to meet the local authority associations and the Greater London Council early next month.
    Mr. Neave: Does not the Minister consider that the Abingdon dispute demonstrated how urgent it is to have a review, and to continue his personal investigation and intervention to solve this problem by peaceful means?
    Mr. Wiley: I am very much aware of the hon. Member's concern about this matter. The discussions will be held early next month, and in the light of those discussions we shall consider what action we should take.

  HOUSING

    Rent Act (Caravans)
    Mrs. Renée Shortasked the Minister of Housing and Local Government if he will now introduce legislation to extend the protection of the Rent Act to caravan dwellers, in view of the report of the Consumer Council entitled "Living in a Caravan."
    Mr. MacColl: My right hon. Friend has studied the comments so far

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    made on the report and has asked the local authority associations for their views. He will then be able to decide how best to deal with the problems of caravan dwellers.
    Mrs. Short: Does not my hon. Friend agree that the report underlines what many of us have been saying to him for some time, and that it is quite wrong that a small number of site owners should be able to behave like petty dictators? Will he take action as soon as possible to deal with the situation.
    Mr. MacColl: As my hon. Friend says, the report indicates that this involves a very small number of site owners. I think the report also shows the complexity of the problem. It is not a simple one to solve.
    Mr. Rippon: Do the Government accept as a matter of policy that a caravan can be a good permanent home, provided that there is adequate supervision and proper site arrangements?
    Mr. MacColl: Yes.

    Housing Development Authority
    Mrs. Renée Shortasked the Minister of Housing and Local Government if he will now seek powers to set up a housing development authority able to acquire land from the Land Commission and to hand out building contracts in order to stimulate house building wherever this is required.
    Mr. Mellish: No, Sir. My right hon. Friend is well satisfied that local authorities can build the houses needed in the public sector and that building for owner occupation is equally going well.
    Mrs. Short: But does not my hon. Friend accept that some local authorities are not building as they ought to build, and does not he agree that part of the difficulty with the housing programme and with the supply of materials necessary for it is the fact that there is instability in the demand? Will he look at this again? I sent him a long memorandum and I was dissatisfied with his reply.
    Mr. Mellish: It may be that some local authorities are not doing as well as they
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    could, but the Question is concerned with the setting up of a housing development authority to take over this work. With respect, I think that by the time it was set up and we got it organised, and it took over the land, we could have built a lot of houses.
    Mr. William Price rose—
    Mrs. Short: In view of the unsatisfactory nature of that reply, it is my intention to raise this on the Adjournment at the earliest opportunity.
    Mr. Speaker: The hon. Lady should note that she has cut out a supplementary question.

    Rents
    Mr. Frank Allaunasked the Minister of Housing and Local Government if he is satisfied that rents registered in 1966 under the Rent Act are actually ½ per cent. higher than previous rents; how he explains this failure to take the shortage factor sufficiently into consideration when fixing rents; to what extent rents registered recently are higher than those for similar dwellings determined in the early operation of the Act; and if he will make a statement on the changes he proposes.
    Mr. MacColl: The figure of ½ per cent. is the overall average of a roughly equal number of reductions and increases and does not in my view show how any particular rent has been reduced because of scarcity value. Rents registered recently are in general no higher than the early registrations for comparable groups of dwellings. On the last part of the Question, I would refer my hon. Friend to my reply to the hon. Member for Manchester, Blackley (Mr. Rose) on 6th June.—[Vol. 747, c. 168.]
    Mr. Allaun: Will my hon. Friend confirm that the intention of the 1965 Rent Act was to right the injustice of the exhorbitant rents which were encouraged by the Tory Rent Act? Will he bring this to the attention of those members of the rent assessment committees who are ignoring it?
    Mr. MacColl: My hon. Friend is quite right in saying that the intention was to remedy injustices. I am sure he will like to know that the evidence is that in London, for all houses with a gross value of less than £125, the average registered

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    rents are lower than the rents previously paid. The same is true for flats and rooms.
    Mr. Graham Page: Is it not the case that a body of precedents is emerging, as was hoped, on which the assessment committees can decide how they judge scarcity, and that they are doing their work very efficiently?
    Mr. MacColl: I think that they are doing their work very efficiently. My right hon. Friend is most anxious that more tenants should take advantage of their services.

    Older Houses (Survey)
    Mr. Frank Allaunasked the Minister of Housing and Local Government if he will make a statement on the results of his national survey of older houses; and what steps he intends to take to improve them, particularly by installing baths, hot water systems and inside water closets.
    Mr. Mellish: My right hon. Friend hopes to publish provisional results of the sample survey very shortly.
    Mr. Allaun: Will my hon. Friend, in his proposals, consider asking local authorities to make far wider use of their powers to improve whole neighbourhoods, as this is probably the best way to get it done, by compulsory methods where needed?
    Mr. Mellish: My right hon. Friend is at the moment considering new proposals in the comprehensive review that we are having, and I shall take into account what my hon. Friend has said.

    Rent Assessment Cases (Surveyors)
    Mr. Winnickasked the Minister of Housing and Local Government what progress has been made in arranging to provide surveyor's assistance for tenants who appear before the rent assessment committees.
    Mr. MacColl: As I mentioned in reply to my hon. Friend the Member for South Shields (Mr. Blenkinsop) on 6th June, my right hon. Friend is considering this question with the professional bodies concerned, and he is also considering whether some general guidance might be given to help those presenting their case before a committee.—[Vol. 747, c. 167.]
    Mr. Winnick: For some time my hon. Friend has spoken about helping tenants. Is he aware that in some areas landlords and property companies have so organised themselves that they are willing to fight every decision when the rent officer reduces the rent?
    Mr. MacColl: I hope that tenants will also organise themselves and be prepared to take action in the same way.
    Mr. R. C. Mitchell: Will my hon. Friend treat this as a matter of extreme urgency? Is he aware that tenants who appear unrepresented before rent assessment committees are placed at a grave disadvantage vis-à-vis] landlords, who often have the highest quality technical assistance?
    Mr. MacColl: I know that most of the presidents of panels agree with my hon. Friend that it would be a great help to them if there were representation for tenants, and we are getting on with our discussions with the bodies concerned.
    Mr. Rippon: Will the hon. Gentleman accept that there will be widespread support for any action that he takes on this matter? Is he aware that there is great anxiety at the slowness in dealing with this? Will he introduce some legal aid or surveyor aid scheme for this?
    Mr. Winnick: Under the 1957 Rent Act?
    Mr. MacColl: I was discussing this only three hours ago. We are getting on with it.
    Mr. Blenkinsop: May we have a definite date when we shall receive a reply in view of my hon. Friend's earlier replies to questions which I have asked on this subject?
    Mr. MacColl: I do not think that it would be wise to give a firm date, but as soon as we have something definite we will put it forward.

    Council Houses (Sale)
    Mr. Gwilym Robertsasked the Minister of Housing and Local Government, in view of the fact that some local authorities intend to sell large numbers of council houses, thus reducing the chances of those on the waiting lists being housed, if he will now introduce legislation to define the limits of local authority

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    action with regard to the sale of council housing.
    Dr. David Kerrasked the Minister of Housing and Local Government if he will seek powers to ensure that no local housing authority can sell any units of rented accommodation until he has satisfied himself that the sale would not adversely affect the position of families on the waiting list for rehousing.
    Mr. Greenwood: Adequate powers already exist to control the sale of council houses. I have recently advised local authorities on policy on this question, including advice that they should not sell existing houses in areas where there is still an unsatisfied demand for houses to let at moderate rents.
    Mr. Roberts: Is my right hon. Friend aware that thousands of people on waiting lists would welcome Government intervention? Does not my right hon. Friend agree that it is important for the Government to make it clear that they will not have social advance held up by Tories temporarily in control at the town hall or county hall?
    Mr. Greenwood: I think that I have made my position perfectly clear on this. I deprecate the sale of council houses if the sale of them affects the waiting lists and reduces the stock of available houses.
    Mr. Rippon: Will the Minister give an assurance that if a council is satisfied that there is a legitimate demand for council houses to be purchased, he will not thwart the electoral will by financial control?
    Mr. Greenwood: I can understand the right hon. and learned Gentleman's anxiety about this in view of the fact that the sale of council houses in Birmingham is now falling substantially, but we shall certainly keep the whole question of general consent under review. I think the House would like to remember that I can withdraw or modify the general consent at any time, and I shall watch the situation very carefully.
    Mr. Crawshaw: Would my right hon. Friend agree that while the sale of council houses may have a short-term benefit on the housing revenue account, it is bound to have a long-term detrimental effect? Will he, instead of advising local
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    authorities, where he thinks it necessary remove subsidies if he feel that councils have enough houses to sell?
    Mr. Greenwood: I think that the economic consequence might be as my hon. Friend says, and I think it might be worth while potential purchasers considering the economic advantages or disadvantages of making these purchases.
    Mr. Doughty: Is the Minister aware that thousands of people wish to buy these houses? Will he give every encouragement to people to become their own house owners, and provide Government money to councils for their own purposes?
    Mr. Greenwood: I take the view that houses for sale are a matter for private enterprise. There are equally thousands of people on waiting lists who are waiting for houses to rent.

    National House Builders Registration Council
    Mr. Robert Howarthasked the Minister of Housing and Local Government if he will introduce legislation to provide financial support to the work of the National House Builders Registration Council and requiring building societies and local authorities to grant mortgages for new houses only on properties constructed by National House Builders Registration Council registered builders.
    Mr. Mellish: I do not think that the work of the Council, which is expanding rapidly, is being hampered by lack of finance, and I know that the Council attaches importance to the self-supporting character of its scheme of protection for house purchasers. The Building Societies' Association has recommended member societies to grant mortgages for new houses only on properties built by registered builders, and a similar recommendation was made to local authorities by my right hon. Friend's predecessor. He would like to see how these voluntary arrangements work out before considering the need for legislation.
    Mr. Howarth: Is my hon. Friend aware that the N.H.B.R.C. at the moment offers a fair measure of protection to private house buyers, but that if Government assistance were given it could increase the amount of inspection

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    it now undertakes, which would benefit millions of prospective buyers?
    Mr. Mellish: We are in close touch with the N.H.B.R.C. What my hon. Friend says is not the view that it has expressed to us. At this time there is a voluntary scheme. Present figures show that 5,800 builders have joined, representing over 70 per cent. of those who build private houses. This has all been achieved within the last year. We should give it a little more time before talking about Government intervention.
    Mr. Loveys: Does not the hon. Gentleman agree that although the figure of 70 per cent. of new houses being built by members of the N.H.B.R.C. is undoubtedly correct, a considerably smaller proportion than 70 per cent. of individual builders are members of this Council, and that further action is necessary to encourage membership?
    Mr. Mellish: The hon. Member is on a very important point, on the question of those builders who are outside the scheme. At some stage the House may have to consider what to do in order to achieve 100 per cent. membership.

    Controlled Tenancies
    Mr. Boyd-Carpenterasked the Minister of Housing and Local Government whether, in view of the progress now made by rent officers in fixing fair rents, he will exercise his powers under the Rent Act, 1965, to bring into regulation under that Act all tenancies at present controlled.
    Mr. MacColl: My right hon. Friend has no such proposals at present.
    Mr. Boyd-Carpenter: Does the hon. Gentleman recall that when the present Lord President of the Council took these powers he gave an undertaking that they would be exercised as soon as the initial rush of applications under the Rent Act had been dealt with? In view of the progress that has now been made with these applications, does the Minister's Answer means that the Government intend to welsh on this pledge?
    Mr. MacColl: My right hon. Friend is keeping an eye on the progress made under the Rent Act. As Answers to previous Questions today have shown,
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    many more tenants ought to go for protection to the rent officers. We hope that they will.
    Mr. Blenkinsop: Will my hon. Friend note the anxiety of hon. and right hon. Members opposite to increase rents at every possible opportunity?
    Mr. Graham Page: Is it not a fact that many rent officers have not sufficient work to do under the present Act and could easily take on this new duty? Would that not make it possible for many landlords of controlled properties, where rents are too low, to carry out repairs and keep their properties in a proper condition?
    Mr. MacColl: My right hon. Friend keeps under continuous review the work loads on rent officers and makes necessary adjustments as the need arises.
    Mr. Lubbock: What is the explanation for the failure of tenants to ask rent officers to assist them in regulating the rents of their properties? Ought not the Government to undertake an investigation of this matter in order to discover why the rate of progress has been so slow?
    Mr. MacColl: My right hon. Friend is keeping a close eye on the recent statistics and is considering their implications. The main explanation is probably still fear of eviction. In spite of the protection of the Rent Act, too many tenants still think that they will be evicted if they go to their rent officers.
    Mr. Boyd-Carpenterasked the Minister of Housing and Local Government how many houses and flats respectively are held under controlled tenancies in London and in the rest of the country; and what in each case is the average rent.
    Mr. MacColl: Precise figures are not available; but I estimate that in Greater London there are about 200,000 controlled tenancies of houses and about 100,000 of flats; in the rest of England and Wales about 1·1 million of houses and about 50,000 of flats. The estimated median annual rent is £66 in Greater London and £38 in the rest of England and Wales.
    Mr. Boyd-Carpenter: In view of the fact that the hon. Member himself said

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    a moment ago that he wished more tenants would come forward and use the services of their rent officers, have not rent officers now the ability to deal with cases of this size and number? Is it not now clear that it is political cowardice rather than administrative difficulty which prevents his right hon. Friend taking the action which the Lord President of the Council pledged himself to take?
    Mr. MacColl: In Greater London—to which area the right hon. Gentleman referred—in many places there is still a heavy backlog of cases.
    Mr. Hugh Jenkins: Does not my hon. Friend agree that the reason why tenants will not go to their rent officers is that in their experience, in the majority of cases—certainly in my constituency—the consequence is to put the rents up?
    Mr. Speaker: Order. That supplementary is really on a previous question.
    Mr. Rippon: Does the pledge still stand? If so, when does the hon. Member hope to implement it?
    Mr. MacColl: All the pledges of the Labour Party stand.
    Mr. John Hallasked the Minister of Housing and Local Government if he is aware that the level of rents which can be charged for properties coming within the scope of the Rent Acts makes it impossible in many cases for property owners to keep their properties in reasonable repair; and what action he is proposing to take to prevent such properties degenerating into slums.
    Mr. MacColl: My right hon. Friend is aware of the many problems surrounding the condition of the older parts of the housing stock. I would also refer the hon. Gentleman to the reply to a question by my hon. Friend the Member for Rushcliffe (Mr. Gardner) on 13th June.
    Mr. Hall: Does the hon. Gentleman agree that that Answer gets us nowhere? Would he listen much more sympathetically to the plea that controlled rents should now be brought within the scope of the 1965 Act, so that fair rents can be fixed and properties can be kept in order?
    Mr. MacColl: I have already dealt with the questions of controlled rents.
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    Raising rent does not, by itself, get property into repair.
    Mr. John Fraser: Will my hon. Friend recognise that many statutory tenants in London are prepared to arrest the degeneration of their houses by buying them and doing the necessary improvements, and the fact that the money lent by local authorities is only half what it was two years ago is preventing tenants being able to do this?
    Mr. MacColl: My right hon. Friend is answering a Question on the second part of that supplementary question later.

    Private Houses
    Mr. Gardnerasked the Minister of Housing and Local Government if he will introduce legislation to enable local authorities to set up agencies for the exchange and sale of private houses.
    Mr. Mellish: My right hon. Friend is at present reviewing the experimental arrangements made last year by seven local authorities, in consultation with the Department for maintaining local registers of houses for sale. I think it would be better to see how far these arrangements could be developed rather than to seek powers for local authorities to act as agents.
    Mr. Gardner: Does not my hon. Friend think that as a result of this experiment such a central agency for local authorities could provide a useful service? Is it not about time that there was some competition in this business?
    Mr. Mellish: Seven authorities were concerned on this experiment—Salford, Enfield, Wolverhampton, Reading, Southampton, Leicester, and Newcastle-upon-Tyne. We have had a meeting with the town clerks concerned and a full report is being prepared on the activities of the last few months. Only two of these authorities have been going for a year. Let us get some real information before making any decision.
    Mr. Hiltonasked the Minister of Housing and Local Government whether he will take steps to bring standards of privately-built houses into line with those applying to local authority and co-ownership housing.
    Mr. Greenwood: The best way of securing progressive improvement in the standards of private houses is by encouraging builders to register with the National House Builders' Registration Council. With the Government's support, the Council have greatly increased the number of registered builders and is raising the standards to which its members must conform. I think we should see how these arrangements develop before considering the need for more direct intervention by the Government.
    Mr. Hilton: Would my right hon. Friend not accept that that does not indicate that these houses were built to Parker Morris standards? As we intend to build 500,000 houses a year within the next few years, this means that half of them will be subject to Parker Morris standards and the half built for private ownership will not, and there is a great danger that the slums of the future will be those houses built for private ownership and purchased at considerable expense?
    Mr. Greenwood: I am interested in what my hon. Friend says. Many Parker Morris standards have been included in the new specifications of the National House Builders Registration Council, and we must all try to maintain a balance between the need to raise standards and the need to meet the requirements of house purchasers within costs which they can afford.

    Fire Insurance
    Mr. Gardnerasked the Minister of Housing and Local Government if he will advise local authorities to seek discussions with the insurance companies with a view to securing reductions in the premiums payable on fire insurance policies for houses owned by them where the electrical wiring systems in the houses concerned conform to the appropriate safety standards.
    Mr. Mellish: This is a matter for the local authority associations. My right hon. Friend has no reason to think that they need further advice on the subject at this time, but I have no doubt that they will take note of the question.
    Mr. Gardner: Is my hon. Friend aware of the number of fires caused by faulty electrical installations? Would it
    1404
    not be a good thing to encourage insurance companies to offer this kind of incentive both to local authorities and householders in order to ensure proper and safe installations, especially in new houses?
    Mr. Mellish: My hon. Friend's Question related only to local authorities. The advice that I have received is that local authorities do a first-class job of work in the houses under their control. As far as I know, they already enjoy reduced rates of insurance.
    Sir G. Nabarro: Is the hon. Member aware that what is really wrong is that the appropriate standards referred to in the Question have hardly been amended since 1937, and that what is required is a total revision of all electrical wiring standards for houses to bring them up to contemporary standards of good quality and excellence?
    Mr. Mellish: That may be so—
    Sir G. Nabarro: It is so.
    Mr. Mellish: It does not follow that because the hon. Member expresses a view he is right, as we know only too well. I give an undertaking on behalf of my right hon. Friend that we shall discuss this matter with local authority associations and see what their evidence is on this very important matter.

    Building Societies (Interest Rates)
    Mr. Robert Howarthasked the Minister of Housing and Local Government if he will make a statement on the results of his most recent discussions with the building societies on the question of lowering their lending rates of interest to private house buyers in view of the several reductions in the bank rate.
    Mr. William Priceasked the Minister of Housing and Local Government what further discussions he has had with building societies with a view to reducing interest rates on home mortgage loans.
    Mr. Greenwood: I have had no recent discussions with the building societies on this subject. They are, of course, aware that the Government would wish them to reduce the rates charged to borrowers as soon as they find it practicable to do so consistent with the need to attract and retain funds adequate to

    1405
    sustain a rising private housing programme.
    Mr. Howarth: Is my right hon. Friend aware that I find that reply very disappointing? Is he further aware that land, I presume, other hon. Members—have had letters from irate constituents drawing attention to the alacrity with which building societies increase their rates of interest when the Bank Rate rises but do not do the reverse when the Bank Rate goes down?
    Mr. Greenwood: In fairness to the building societies, my hon. Friend should appreciate that their rates are determined by what they have to pay for the money which they borrow to lend to other people, and it is necessary to maintain that flow of supplies at present.
    Mr. Price: Is my right hon. Friend aware that people are not impressed by academic arguments about the supply and demand of money? When will they get the low interest rates which they were promised?
    Mr. Greenwood: I do not regard the flow of money as an academic consideration. As my hon. Friend is well aware, most mortgage payers are covered by Income Tax relief and others will be helped by the option mortgage scheme, which will substantially reduce the rate of interest paid.
    Mr. Speaker: Mr. Lubbock, whose family anxieties are happily over. And we are very glad.
    Mr. Lubbock: Thank you, Mr. Speaker.
    Although we would like a reduction, would not the effect be that many people who wanted to borrow money during the rest of the year were barred because the funds were not available?
    Mr. Greenwood: I would add my congratulations to the hon. Gentleman.
    Yes, that would be the effect. Funds are flowing into the building societies satisfactorily and, as a result, their commitments are extremely promising. They were £81 million in October and rose to £146 million in May, which is very satisfactory.
    Mr. Rippon: Further to the supplementary question by one of the Minister's
    1406
    hon. Friends about election pledges, when will the mortgage rate be reduced to the Foreign Secretary's 3 per cent., or even 4 per cent.? Does this Labour election pledge still stand on its head?
    Mr. Greenwood: That is a very hoary one, even for the right hon. Gentleman, but perhaps he will study the debates on the option mortgages Bill.

    Caravans (Rates)
    Mr. Evelyn Kingasked the Minister of Housing and Local Government if he will introduce amending legislation in order to ensure that caravan dwellers are not liable for payment of back rates which the site owner has already paid.
    Mr. MacColl: No, Sir. Where caravanners become subject to individual assessment and thereby liable for rate-arrears, the site-operator normally becomes eligible for a rate-refund in respect of the same period, so no double rate-payment will in the end have been made.
    Mr. King: Is the hon. Gentleman aware of the monstrous injustice at Sleepe, near Wareham, where, due to a sudden decision to rate sites individually, constituents are being asked for enormous retrospective sums, which they do not possess and cannot pay which have already been paid by the landlord on whom there is no certain legal obligation to reimburse?
    Mr. MacColl: That is a decision not of my right hon. Friend but of the courts.

    New Houses (Size)
    Mr. Brooksasked the Minister of Housing and Local Government what advice he proposes to give local authorities about the proportion of one-, two-, three- and four-bedroomed houses they construct to meet the needs of families on their waiting lists.
    Mr. Mellish: Local authorities are well acquainted with the circumstances and needs of their areas and are best placed to take decisions about the proportion of new houses of different sizes which they should build. The Central Housing Advisory Committee is considering whether there are any general lessons to

    1407
    be drawn from the local authorities' experience.
    Mr. Brooks: Does not my hon. Friend agree that there is need for local authorities to be more explicit and more consistent as to their criteria? Is not the composition of the nation's housing stock too important to be left solely to those whose judgments are often based on short-term financial considerations?
    Mr. Mellish: The problem here is whether Whitehall is competent to tell local authorities what the need is in their own local areas. The answer is that it would be quite impossible for Whitehall or any central authority to say whether a local authority needed one-, two-, or three-bedroomed houses. They ought at least to know that.
    Mr. Graham Page: Is not that reply a little complacent? Would it not assist local authorities to have a thorough investigation into this point and then advise them? Is it not true that in many areas the single-bedroomed dwellings are far too few to cope with the elderly people wanting dwellings and, at the other end of the scale, four bedrooms are not sufficient to cope with the large families? Does not this position need a thorough investigation and advice to local authorities?
    Mr. Mellish: The figures we have show that single-bedroomed dwellings account for more than a quarter of the new houses built, while one-bedroomed and two-bedroomed dwellings account for 60 per cent. We do not deny that there are some local authorities where the assessments may be very bad, but one does not indict other local authorities because one among them is not very good.

    High Rise Dwellings
    Mr. Brooksasked the Minister of Housing and Local Government whether he will issue a circular to local authorities to meet their housing density requirements on the basis of low-rise, rather than high-rise development.
    Mr. Mellish: Circular No. 36/67, issued on 25th April, asked local authorities and local planning authorities to reappraise their policies for housing densities and layouts where these appear to demand a high proportion of high-rise dwellings. The Circular also required
    1408
    special justification for housing subsidies at net densities above 165 bedspaces to the acre in conurbations and 120 bed-spaces per acre elsewhere.
    Mr. Brooks: Does my hon. Friend consider that his reply goes far enough? Are not there serious psychological problems faced by mothers with large families and small children in high blocks? Is it not time to reflect people's requirements and wishes instead of architectural follies?
    Mr. Mellish: If my hon. Friend will read the debates in Committee on the Housing Subsidies Bill he will see that the whole argument about high blocks was then raised. These high blocks are essential in our great towns and cities to deal with the enormous populations, but the Minister has already made it clear, from the form of subsidies we have introduced, that we shall not give subsidies for what we call the prestige blocks.

    Blighted Properties
    Mr. Loveysasked the Minister of Housing and Local Government whether he will issue a circular advising local authorities to purchase property required for development purposes as soon as the proposals are decided so as to prevent hardship to owners possessing blighted properties.
    Mr. Willey: A circular to this effect was issued in 1959. So far as I am aware, local authorities are operating it.
    Mr. Loveys: Would not the right hon. Gentleman agree that considerable hardship is still being caused to owners of blighted property, and that the special hardship arrangements apply almost solely to owner occupiers? Would he not remove this anomaly by placing blighted property in the same category when dealing with hardship cases?
    Mr. Willey: The circular allows for discretion. If the hon. Gentleman feels that there are cases in which it is not being effectively applied, perhaps he will draw the attention of the local authority to this circular.
    Mr. Graham Page: Is the right hon. Gentleman satisfied with circulars in this matter? Would he not consider whether the legislation itself needs amendment in order to provide for those who do not

    1409
    come within the narrow limit of blighted property as defined by the Act at present?
    Mr. Willey: As the hon. Gentleman is aware, I am not unaware of his concern. I am giving the matter my attention.

    PRIME MINISTER AND MR. KOSYGIN
    Sir Ian Orr-Ewingasked the Prime Minister what plans he has for a further meeting with Mr. Kosygin.
    The Prime Minister (Mr. Harold Wilson): I have as yet no further information to give the House about my next meeting with Mr. Kosygin.
    Sir Ian Orr-Ewing: Has the Prime Minister noted that at the United Nations yesterday Mr. Kosygin said that Israel must return to her 1949 borders? Would he remind Mr. Kosygin that Russia captured part of Finland, all of Estonia, Latvia, Lithuania and East Prussia and a large part of Poland, and held them all after 1945 on the ground that they were essential to her security? Is not the security of Israel also important?
    Mr. Speaker: This is interesting, but we cannot have speeches at Question Time. The Prime Minister.
    The Prime Minister: The position of Her Majesty's Government was stated by my right hon. Friend the Foreign Secretary in a speech in the country on Saturday, which will be made available to the House. And, of course, my right hon. Friend will be expressing further the position of Her Majesty's Government on this and other questions when he intervenes in the Assembly debate.
    Mr. Shinwell: Would it not be advisable at some stage to remind Mr. Kosygin, when he talks of aggression on the part of one nation, about the aggression perpetrated seven years ago by the Soviet Union against Hungary?
    The Prime Minister: I believe that there are very many arguments that could be used in an atmosphere of tit for tat, but I believe that in the present situation —in the present very difficult and grave situation—in the Middle East we must all try to get the debate in the Assembly
    1410
    now, at any rate, on to a more constructive level.
    Mr. Heath: Can the Prime Minister tell the House whether he has yet reached a decision about going to the General Assembly while Mr. Kosygin is there and, if he has, what the reasons for his decision are?
    The Prime Minister: This is a matter which I discussed with the President of France. In the present situation in the Assembly I doubt whether this would be very useful, but I shall be in touch with the President of France and, of course, considering whether at the right moment it might be possible to get high-level talks on a more constructive basis. At the moment, I thought that the tone of the Assembly would suggest that there would be no purpose in it.
    Mr. Sydney Silverman: After Mr. Kosygin's speech yesterday at the United Nations, does my right hon. Friend think that any useful purpose would be served by having any further conversations with him?
    The Prime Minister: Yes, Sir. [Interruption.] I am afraid that many things are being said in New York, and I fear that many things will be said in New York, that are not likely to lower the temperature in a situation where it is important to lower the temperature, but none of these, in this present overheated atmosphere, are any arguments at all why we should not, at the appropriate moment, have talks with Mr. Kosygin either in the present context or on my visit to the Soviet Union.
    Sir C. Osborne: Do not some of these supplementary questions suggest that we are having too many summit meetings, which cause people to expect too much too quickly in regard to very difficult problems? Would it not be better to leave the Diplomatic Service to do the job more quietly and expeditiously?
    The Prime Minister: I am not responsible for all the supplementary questions put. I believe that, however difficult the problem and however overheated the situation may be at the moment, nothing but good can come in the long term from frequent meetings with leaders of other countries, provided, as the hon. Member says, that excessive

    1411
    expectations are not raised by each new meeting.
    Mr. Heffer: Despite the difficulties we are having at the present moment, will the Prime Minister inform the House whether it is the Government's intention to make every effort towards a four-Power summit conference?
    The Prime Minister: It is still our position that, at the right moment, a four-Power summit meeting or a four-Power meeting at another level would probably be very helpful. We are more likely, I think, to get constructive and imaginative ideas in a high-level sort of meeting—obviously in consultation with the countries affected—than if it were left to the procedure of debate and argument and counter-argument, but I fear that, in the present situation of the Assembly, we are not at this stage yet, and may not be for some little time.
    Sir G. Nabarro: Following the question by the hon. Member for Liverpool, Walton (Mr. Heffer), would not the Prime Minister tell the House whether President Johnson consulted the Prime Minister before he approached Mr. Kosygin over a summit meeting in New York? Does the Prime Minister therefore share the rebuff administered to President Johnson?
    The Prime Minister: Consultations between the American President and myself are normally confidential except when it is necessary to make a report to the House—for example, on talks I have had over there—but I should have thought it a very natural thing for the Head of Government, indeed Head of State of the host country, to say that he was willing to meet with a distinguished visitor who is a Head of Government. I do not think this matter can be treated in terms of rebuffs and phrases of that kind.

    EUROPEAN ECONOMIC COMMUNITY
    Mr. Tilneyasked the Prime Minister whether, in order to overcome the difficulties for New Zealand should Great Britain sign the Treaty of Rome, he will propose a federation of the United Kingdoms of Great Britain and Northern Ireland and of New Zealand.
    The Prime Minister: I have no reason to think that the hon. Member's suggestion would be acceptable to the Government and people of New Zealand.
    Mr. Tilney: Would the Prime Minister agree that New Zealand is closer to this country in terms of transport than Scotland was to London at the time of the Act of Union, that the economy of New Zealand has been closely geared to that of Great Britain for decades, that New Zealand has served this country magnificently in the past in many fields and that the more that the economy of New Zealand is brought together with that of Europe, the better it will be for all?
    The Prime Minister: I have not done the calculations, but the point about transport is certainly true, and it is probably true of nearly every country in the world. As to the other parts of the supplementary question, the whole House agreed in the recent debate on the Common Market that it is our duty to see that New Zealand's problems are solved in any application. I indicated a large number of possible solutions, but I do not think it right for us to say at this stage which is the right one. My right hon. Friend has been discussing this and I have discussed it with the Deputy Prime Minister of New Zealand. This particular proposal did not come up. I think we have all agreed that we should leave it to see what is the best way of meeting the legitimate requirements of New Zealand.
    Lord Balniel: The Prime Minister keeps referring, quite rightly, to New Zealand posing a special problem. Is it his objective to maintain the existing volume of trade in butter, cheese and lamb? Is that the objective in the negotiations?
    The Prime Minister: I do not think I should add to what I said in a long, perhaps over-lengthy, speech in the debate on the Common Market. We have had these discussions with New Zealand recently. I think these matters are best left, as I think New Zealand would prefer them to be left, to the negotiations.
    Mr. Winnickasked the Prime Minister what progress has been made in starting negotiations to join the European Economic Community.
    The Prime Minister: I understand that the European Economic Community Council of Ministers is meeting on 26th June to discuss our application for membership of the European Communities. Her Majesty's Government trusts that this will result in a substantive reply to our application.
    Mr. Winnick: Does my right hon. Friend think the negotiations are actually likely to start in the near future? Can he give the House details about the length of such negotiations? If it looks as if the negotiations are going to be played around with, will he consider withdrawing the application?
    The Prime Minister: No, I do not think that would be the most helpful way of dealing with the situation, but I am certainly not in a position, even after the last 48 hours, to give a specific and clear reply to the first part of my hon. Friend's question. What I have been able to do in the last 48 hours is to stress the great urgency we feel about this matter, not only for the sake of Britain but of France and Europe.
    Mr. Doughty: In view of the apparent difficulties of obtaining admission to the European Economic Community—which most of us want—will the Prime Minister take care to see that E.F.T.A. is not destroyed and we are left with neither the E.E.C. nor E.F.T.A.?
    The Prime Minister: This is a point we have made on a number of occasions about our position in relation to E.F.T.A. There are alternatives which are possible, or could be possible, but the Government feel that this is by far the best solution for us and the rest of Europe, and indeed for the world.

    COMMONWEALTH SUGAR AGREEMENT
    Mr. Tilneyasked the Prime Minister what is the approximate average cost in each of the last three years to the British taxpayer of the Commonwealth Sugar Agreement; and whether he will seek to guarantee the equivalent sum in aid to the signatories of that Agreement who are developing countries.
    The Prime Minister: No cost falls on the Exchequer, Sir. The rest of the Question does not therefore arise.
    Mr. Tilney: As consumers in this country are nearly all taxpayers, will the Prime Minister agree that the average expenditure on the Commonwealth Sugar Agreement in this country is of the order of £60 million a year and that the more the economies of developing countries are diversified the better it will be? If it is possible, would it not be better for Europe to consume more cane sugar and less beet sugar?
    The Prime Minister: The hon. Member is right, of course, that the way in which this Agreement is honoured is by the consumer in effect paying for it under the equalisation arrangements. Certainly the figures of the order of those quoted by the hon. Member represent the kind of contribution we are making. Compensation would not solve the problem of finding work for those currently engaged in the sugar plantations and sugar processing industries, but, as the hon. Member knows, my right hon. Friend is this week presiding, over a conference of representatives of sugar-producing members of the Commonwealth.
    Mr. James Johnson: Would my right hon. Friend agree that without the Agreement islands with a monoculture economy, particularly Mauritius and Barbados, would suffer almost certain economic death without some help? Will he bear this constantly in mind during the negotiations?
    The Prime Minister: My hon. Friend is right that, whereas we are concerned about the Commonwealth position as a whole, islands and other areas with a monocultural economy would be particularly hard hit. It is this problem my right hon. Friend is seeking to deal with in his discussions with representatives of the Commonwealth sugar producers.

    ARMED FORCES (SELECTIVE RELEASES)
    Mr. Ronald Atkinsasked the Prime Minister if he will instruct the First Secretary of State and Secretary of State for Economic Affairs, the Secretary of State for Defence and the Minister of Labour to assess the nation's need for manpower and to consider whether selective releases of members of the Armed Forces returning from abroad be in the national interest.
    The Prime Minister: Regular assessments are already made both of the overall manpower needs of the nation and of the specific needs of the Armed Forces.
    Mr. Atkins: Is my right hon. Friend aware that some experts believe that the present numbers of men in the Armed Forces may be excessive for highly-mechanised forces apart from the reduced need for men in the Forces? Will he, therefore, reconsider his Answer and make it possible to give more purposive employment to a number of men in the national interest?
    The Prime Minister: I think my hon. Friend will agree that it would be right for the House to wait, and for my hon. Friend to wait, until we are in a position to make a full statement on the results of our defence considerations which are going on at present. Obviously, manpower must be one of the questions raised in such a survey.
    Sir Ian Orr-Ewing: Will the Prime Minister tell us what is to happen to our economy in Great Britain if we are no longer able with a population of 52 million to employ 400,000 in our Armed Forces and to pay and equip them?
    The Prime Minister: This raises wide questions about defence policy. I am sure the hon. Member, who has great knowledge of defence questions from his service in Departments concerned with these matters, will want to wait until we make a statement about defence when he could raise that question again.

    DISARMAMENT
    Mr. G. Campbellasked the Prime Minister if he will now appoint a further Minister with responsibility for disarmament.
    The Prime Minister: The Minister of State for Foreign Affairs, my right hon. Friend the Member for Sheffield, Park (Mr. Mulley), has assumed this responsibility.
    Mr. Campbell: Is there any difference in the disarmament field between the appointment of Lord Chalfont in 1964 and the new appointment of the Minister
    1416
    of State, the right hon. Member for Sheffield, Park (Mr. Mulley).
    The Prime Minister: My noble Friend, who has worked assiduously on the disarmament problem — [Laughter.] — I should have thought hon. Members who laugh would feel that after last Saturday there are few more important matters in the world. We have now reached a situation where, at Geneva, the prospects of disarmament, despite all the difficulties, have been brought to a new state of hopefulness. A great deal of the credit for this is due to my noble Friend and the Minister of State will carry on from where he left off.

    PRIME MINISTER AND PRESIDENT DE GAULLE (DISCUSSIONS)
    Sir Knox Cunninghamasked the Prime Minister if he will make a statement on his visit to the President of France.
    Mr. Martenasked the Prime Minister if he will make a statement on his visit to General de Gaulle.
    Mr. Eldon Griffithsasked the Prime Minister if he will make a statement on his recent talks with General de Gaulle.
    The Prime Minister: With permission, I will answer Questions Q8, Q9 and Q11 at the end of Question Time.

    MIDDLE EAST
    Mr. G. Campbellasked the Prime Minister if he will make a statement about his discussions with other heads of Governments on the situation in the Middle East.
    The Prime Minister: I would refer the hon. Member to the Answer I gave to a Question by the hon. Member for Chigwell (Mr. Biggs-Davison) on 15th June. As to my talks with the President of France, I will be answering Questions on them at the end of Question Time today. —[Vol. 748, c. 127.]
    Mr. Campbell: Can the Prime Minister now impart any information about progress towards opening the Suez Canal, because Government spokesmen have

    1417
    shown an extraordinary inability to give information to the House on this subject?
    The Prime Minister: I have nothing to add to what my right hon. Friend told the House at the end of last week, but as soon as it is possible to hear from the Foreign Secretary, who is at the United Nations now, I will of course see that the necessary information is given to the House.
    Mr. Francis Noel-Baker: Is my right hon. Friend aware that there is very widespread disappointment that he did not take this opportunity of going to the Special Assembly of the United Nations and of helping to turn it into a super-summit and that that disappointment will have been increased by his earlier reply this afternoon, which seemed to imply that he had written off the U.N. and preferred four-Power negotiations?
    The Prime Minister: I certainly have not written off the U.N. in any sense. I believe the present situation in the U.N. will be very overheated and does not provide at this moment—I should not like to forecast at this moment what might happen in a day or two or a week or two—the most favourable situation in which a four-Power or X-Power summit under the aegis of the United Nations could best be held, but at the right moment, of course, I would take a different view.
    Sir G. Nabarro: Arising from the blockage of the Suez Canal, will the Prime Minister tell the House what action he proposes to take about the threatened rise of a penny per gallon in the price of petrol and the longer-term prospect of petrol having to be rationed because of the continued blockage?
    The Prime Minister: I have nothing to add to what the House has already been told about the petrol situation. The main problem arising, both with regard to the cost of petrol and the possible availability, relates not so much to the closure of the Suez Canal, grave and intolerable though that is. It arises from the interference with the flow of oil from oil-producing countries. I do not believe we shall get that oil flowing again quickly either by tough action, which I think the hon. Gentleman wants, or even by tough talk of the kind he was treating us to.
    Mr. Molloy: Will my right hon. Friend, despite other advice which has been given to him, assure the House that he will accept the principle that he will be prepared to talk and to encourage talks on this grievous problem of the Middle East based on the simple thesis that "jaw jaw is better than war war"?
    The Prime Minister: Yes, Sir, as soon as I am satisfied that the jaw in question will be constructive and not merely, as I think it might be for the moment, a series of speeches taking sides within the United Nations. I think we have to proceed from this stage of acrimony and bitterness there to a situation where constructive talks could be held.
    Several Hon. Members rose—
    Mr. Speaker: Order.

PRIME MINISTER AND PRESIDENT DE GAULLE (DISCUSSIONS)
The Prime Minister (Mr. Harold Wilson): With permission, I will now answer Questions Nos. Q8, Q9 and Q11.
During our lengthy discussions yesterday and this morning, President de Gaulle and I had, as we had planned, a most useful and wide-ranging exchange of views about the world situation as a whole. In particular, we discussed the Middle East and considered how best we could work together to promote a lasting and just solution to the Arab-Israel problem. We agreed to work closely together on this and to keep in close and continuing personal touch.
As regards the British application to join the European Communities, President de Gaulle further explained to me the views which he had expressed at our meeting in January of this year and at his Press conference on 16th May. I told him why we do not believe that any of the problems arising out of our application are in any sense insoluble, why we do not intend to take no for an answer, and I emphasised the added compulsion we saw, in the light of recent events, for urgent action to strengthen and unify Europe in an industrial and technological sense, as a prior condition of greater political strength and influence.
In particular, we dealt fully with prospects for technological co-operation in the electronic and computer field, and

1419
in research and development generally, and with the possibilities of promoting closer co-operation and partnership in the civil application of nuclear energy on a European scale.
This morning, we reviewed the Middle East and world situation in the light of yesterday's and overnight developments.
Sir Knox Cunningham: What was the suggestion made by the President of France about an apprenticeship period before the United Kingdom joined the European Economic Community? Is such a suggestion acceptable to us for our entry?
The Prime Minister: It was not, in fact, raised at all in discussions generally. The position of Her Majesty's Government on association has been made clear to the House on a previous occasion.
Mr. Marten: Did the Prime Minister get any indication about the solutions to the various problems which he unearthed during his probe; and, if so, what were they?
The Prime Minister: I am not sure whether the hon. Gentleman is talking about world problems or the particular problems of the Common Market.
On world problems, we had an extremely full discussion, which we were not able to have in January—on the problems of the Far East, including defence policy, on the problems of the Middle East, which took the greatest part of our discussions, and on the problems of Africa and elsewhere. I think that the two Governments now much more fully understand each other on these problems, and that on some of them, at any rate, we were closer together than we thought we were before yesterday.
Mr. Eldon Griffiths: What impression did the Prime Minister form of General de Gaulle's enthusiasm for collaboration with Britain in the defence field, particularly in respect of nuclear weapons? What evidence has the Prime Minister that there may now be closer co-ordination between British and French policies in the third world, in particular in the Middle East?
The Prime Minister: We discussed world defence issues, naturally. The question of nuclear defence policy, for example,
1420
in the European context, was not raised at all by the President and was not discussed. Both of us, I think, felt that there were very great opportunities for collaboration on the civil aspects of nuclear policy, where we have a great deal to contribute to Europe, as, indeed, has France.
As regards co-operation, we have arranged to keep in very close touch about the Middle Eastern problem. In past years, I think that we have approached the problem fairly closely together. We discussed some of the differences which have arisen. We shall keep in very close touch indeed, especially about progress in the United Nations.
Sir G. de Freitas: Whatever was said in the discussions with the President of France, will my right hon. Friend now point out to the Governments of the Six the great advantages there would be to all parties if, at the next meeting of the Council of Ministers, there was present a British representative who was perpared to ask and answer questions?
The Prime Minister: Yes, Sir; I fully agree with that. I made this clear yesterday—that, if not at this first meeting, at any rate at an early meeting, Britain ought to be there so that we can answer some of the difficulties which have been raised, many of them, I feel, unreal difficulties which I did something to get rid of in my argument yesterday.
Mr. Alfred Morris: Having regard to the cost of applying arising from the effect of the active consideration now being given to diversify their trade by many of our present trading associates, can, my right hon. Friend tell us what the President's reaction was to our policy that we shall not accept "No" for an answer? Is there any time limit on this policy?
The Prime Minister: I did not think it right to put a time limit on this policy, but I made it very plain to the President that if, as I think we all of us in the House felt—or most of us—it was very urgent two or three weeks ago, it is even more urgent now. I gave the President many reasons why this was urgent and why failure to act quickly could lead to the development of other things in world affairs which would be inimical to the progress and unity of Europe.

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The question of diversification, mentioned by my hon. Friend, is a thing which has been going on progressively for a number of years. It is one more reason why we are approaching this with a full sense of urgency.
Mr. Mendelson: During these talks with the President of France, covering the Far East, was my right hon. Friend able to discuss with him a new initiative to bring the war in Vietnam to an end? As such, a joint approach might make it easier for the parties concerned, particularly for the United States, to give a positive reception.
The Prime Minister: Obviously, we discussed the Vietnam issue very fully indeed. I think that it would be right to say that one of the big issues poisoning world affairs, and which has made the Middle Eastern situation that much more dangerous and difficult, is the continuing problem of Vietnam and the poisoning of relations, particularly between the United States and the Soviet Union.
We discussed all the possibilities here, though I end as I began with the conclusion that, if there were any sign on the part of Hanoi of a willingness to come to the conference table, I believe that we could get this peace very quickly indeed. Hanoi is now saying—this was one of the points we discussed yesterday —that it wants an assurance that America would quit South Vietnam quickly after the talks. In fact, this assurance has been given on a number of occasions by the President of the United States.
Mr. Awdry: The Prime Minister keeps telling us what he told the President of France. Will he now tell us what the President of France said to him?
The Prime Minister: I am not sure to which issue the hon. Gentleman is directing his question.
Mr. Awdry: On the Common Market.
The Prime Minister: On the Common Market, I would not want to suggest to the House that the President is more enthusiastic about British entry than he has been at any other time. I think that his greatest anxiety still is about the change in the shape of the Market if a number of new countries come in, a matter which is greatly worrying him, and one which he feels, understandably,
1422
has got to be discussed among the Six themselves.
I think that I was probably successful in answering some of the anxieties which the President has had about a number of issues which he raised in his Press conference. For example, I think that he would feel now, remembering the serious effect on the previous discussions of the Nassau Agreement, that our present posture in these matters would make entry a great deal easier for Britain. But he still has his basic underlying anxieties.
Mr. Thorpe: Will the Prime Minister sharpen it a little and say whether, on the Common Market, his impression is that the President's reply will be "Oui", "Non" or "Peutêtre"?
The Prime Minister: I think that there are other possible alternatives going through his mind, including "Oui, mais", and several other variants on that theme. I do not think that it would be helpful at this moment to start speculating on which answer he would give. The important thing was to stress—and I think that he understands this—the sense of urgency about it, whatever his anxieties.
Mr. Speaker: As a matter of order, and for the record, the questions were about "Yes", "No" and "Perhaps".
Mr. Shinwell: Is my right hon. Friend aware that some of us on this side, and probably on the other side of the House as well, are quite satisfied with the result of his conversations with General de Gaulle on the Common Market; but, now that this is done with, now that my right hon. Friend, quite rightly, has had the opportunity of a few days in Paris—we all hope that he enjoyed himself—may we have an assurance that this country, the Government, the House, the industrialists and the workers, will now concentrate on the need to build up our economy, putting our hearts into the job and pulling up our socks?
The Prime Minister: I was in Paris for little more than 24 hours, not for a few days. I am well aware of what my right hon. Friend says on his own behalf and that of others, but these matters were very fully debated and the House took a decision on them more than a month ago.
I certainly agree with the last part of what my right hon. Friend said. There

1423
is no question that, whatever the prospect, this country can achieve the objectives which are common to the whole House only by the efforts of this country, whether inside the Common Market or outside it or in any other grouping. There is no alternative to that. What we can argue about is what is the best grouping within which these efforts can achieve the most successful result.
Sir A. V. Harvey: Did the Prime Minister discuss with the President the present closure of the Suez Canal? Bearing in mind that the present situation is delaying the flow of grain to starving millions in India and, perhaps, to refugees in the Middle East, why are not the Government, together with other leading Powers, taking up this problem more in order to get the canal cleared and open to world shipping?
The Prime Minister: This is one of the central factors in our thoughts. The hon. Gentleman is right to stress the effect which it is having on starving millions in India and elsewhere, and also on the economic position of Egypt as well as of the user countries. I think that we are more likely to get something done by patient work at the diplomatic level than by striking postures or by taking action which might lead to still more difficulties regarding the Suez Canal.
Mr. Edelman: Whatever the enthusiasm of the President of France for British entry into the Common Market, did my right hon. Friend have time to notice the rising tide of enthusiasm among ordinary French men and women for British entry into the Common Market?
The Prime Minister: I understand that that is the position. It was not a subject which we discussed at any length. I hope that I have not given the House —my hon. Friend referred to the President's "enthusiasm"—an exaggerated idea of the President's enthusiasm at this point of time.
Sir C. Osborne: The right hon. Gentleman will recall that the Foreign Secretary, in answer to a question from me some time ago, said that we had a 50–50 chance of getting into the Common Market. After his discussions yesterday, does the Prime Minister think that that 50–50 chance has been materially improved?
The Prime Minister: I have always thought, and, indeed, some pronouncements of President de Gaulle recently would suggest, that the figure might be rather higher. I think that the question is not about estimates of ultimate likelihood, but about the speed which it can be done, because President de Gaulle has said publicly on a number of occasions that there is no question of Britain not getting into the Common Market at the right time. We have something of a difference about the urgency with which it should be approached.
Mr. Manuel: In his discussions on the Common Market, I take it that my right hon. Friend gave prior place to the five conditions laid down by the annual conference of the Labour Party. If so, what was General de Gaulle's reaction to these five conditions?
The Prime Minister: I think that the President is as well informed on our activities and decisions at the Labour Party conference in Brighton in 1962 as he is about the statements made by the Government on 2nd May and the decision adopted by the House as a whole by a very large majority.
Mr. Heath: To the public eye, there have been considerable differences of view between the Prime Minister and the President of France on both the Middle East and the Far East. Can the Prime Minister now be more specific about those places where they found themselves, apparently, in agreement, and, in particular, about the measures which ought now to be pursued in the Middle East?
Second, on Europe, the Prime Minister has just said that there was a difference of timing. This is true. Ever since 1960 General de Gaulle has said that Britain will come into the Common Market at the right time. Can the right hon. Gentleman now be more explicit about this? He himself has spoken of negotiations before Christmas, to be concluded before Christmas. Is the President of France thinking of a slightly longer time, or in years, perhaps many years?
The Prime Minister: In the quotation to which the right hon. Gentleman refers I did not speak of negotiations to be concluded by Christmas. I said that, in our view, they ought to open before the summer and we ought to know where we

1425
stand by Christmas; in other words, whether it looks like being negotiation to a solution, or whether there is likely to be an indefinite period of hanging about. That is what I meant. I am still in no clearer position about the answer to that. The important thing was to make clear to the President, in what I think were favourable circumstances, our sense of urgency and the reasons why it is as much for France to show a sense of urgency as it is for us.
On the first part of what the right hon. Gentleman said, I think that there have been some differences, perhaps more of emphasis and of public posture, in recent weeks on the Middle East. What we were concentrating on now was trying to see how far we could agree about the way to go forward. I think that the President would accept that, for the next day or two and, perhaps, the next week or two, there is not much that can be done in the way of following up his initiative for four-Power talks, which we very strongly support.
On the Far East, the President takes a line more in favour of total withdrawal by European Powers from that area than we do, but, as the right hon. Gentleman knows, we shall be making a statement on our conclusions on that matter during the course of the next few weeks.
Our talks on Africa were, I think, very constructive. The record of the French in decolonisation, like that of this country under successive Governments, has been a remarkable one. There are still one or two outstanding problems, and we tried to apply ourselves to how they could be overcome.
Mr. Roebuck: Did my right hon. Friend seize the opportunity to discuss with the President of France the appalling events of last Saturday in China? Did he form the view that the President was likely to urge all people to sign a nonproliferation treaty? If this matter was not discussed, has my right hon. Friend any plans for discussing it with the President?
The Prime Minister: It was discussed, and it lent an additional sense of urgency to our discussions on a number of issues. I have stressed the importance of a non-proliferation agreement, and this has been immensely underlined by the events of last Saturday. There is the danger
1426
of other Powers now saying that they must rush to become nuclear Powers, with all the dangers that that represents. I have, naturally, asked for the fullest co-operation from our European friends and partners on the matter. It is of the highest importance, and it was recognised to be such yesterday.
Mr. Peyton: Is the Prime Minister aware that he has not given us a lot of information, and that his answers really amount to a sort of soliloquy by a rather run-down Hamlet?
The Prime Minister: The hon. Gentleman can have his bit of fun if that is how he likes to feel about it. If these talks were to be rewarding and productive they must be on the basis that they would be confidential. If I am to be asked everything that the President of France said on every issue it might cause great entertainment in the House and great interest, and it might be the subject of many newspaper articles, but it would be completely counter-productive to all the purposes that most of us in the House have in mind—whatever the Second Gravedigger opposite may think.
Mr. Blackburn: Did my right hon. Friend make it clear to the President of France that not all of us are wildly enthusiastic about the Common Market, that some of us find it humiliating to go begging, and that some of us would be very happy if he continued to say, "Non"?
The Prime Minister: I think that the President of France is well aware of the division of feeling in the House and the country on this matter. He is perfectly capable of studying the Division records of the House—in a quantitative sense and not necessarily the sense of how each hon. Member voted. But he will be aware that the majority in the House on 10th May was very, very much greater than the majority in the French Parliament some years ago.
There was no question of begging in my posture yesterday. What we were trying to point out to the President— and I think that this rang a bell up to a point—was what we can contribute not only to the future development of France and Europe but to European unity and Europe's world influence.
Several Hon. Members rose—
Mr. Speaker: We must proceed.
Sir Harmar Nicholls: On a point of order, Mr. Speaker. For the sake of the accuracy of the record, is it not right at this early stage that we should have some explanation of the contradiction in that the Prime Minister told my hon. Friend the Member for Bury St. Edmunds (Mr. Eldon Griffiths) that there had been no nuclear discussions but later said that he had discussed the Chinese bomb and the Nassau Agreement?
Mr. Speaker: I think that the hon. Gentleman can be assured that the record will have clear whatever is said in the House. It is not unknown for right hon. and hon. Members to make statements which seem to be at variance with each other.

SCOTTISH ESTIMATES
Estimates set out hereunder referred to the Scottish Grand Committee:

Class III, Vote 2, Scottish Home and Health Department.

Class IV, Vote 5, Roads, &c., Scotland.

Class V, Vote 2, Department of Agriculture and Fisheries for Scotland.

Class V, Vote 4, Department of Agriculture and Fisheries for Scotland (Agricultural Grants and Subsidies).

Class V, Vote 6, Department of Agriculture and Fisheries for Scotland (Agricultural Price Guarantees).

Class VI, Vote 2, Scottish Development Department.

Class VI, Vote 5, Housing, Scotland.

Class VI. Vote 15, National Health Service, &c., Scotland.

Class VI, Vote 16, National Health Service (Superannuation, &c.), Scotland.

Class VII, Vote 2, Scottish Education Department.

Class VII, Vote 4, Teachers' Superannuation (Scotland).

—[Mr. Crossman.]

ORDERS OF THE DAY

  LEASEHOLD REFORM BILL
  As amended (in the Standing Committee), considered.
  3.53 p.m.
  Mr. Speaker: Order. Will hon. Members please leave the Chamber quietly?
  As is my custom, I have posted up the Amendments which I have selected, and the first is new Clause No. 1.

  LEASEHOLD REFORM BILL

    New Clause No. 1.—(ENFRANCHISEMENT WHERE LANDLORD CANNOT BE FOUND.)
    (1) Where a tenant of a house having a right under this Part of this Act to acquire the freehold is prevented from giving notice of his desire to have the freehold because the person to he served with the notice cannot be found, or his identity cannot be ascertained, then on an application made by the tenant the High Court may, subject to and in accordance with the provisions of this section, make such order as the Court thinks fit with a view to the house and premises being vested in him, his executors, administrators or assigns for the like estate and on the like terms (so far as the circumstances permit) as if he had at the date of his application to the High Court given notice of his desire to have the freehold.
    (2) Before making any such order the High Court may require the applicant to take such further steps by way of advertisement or otherwise as the Court thinks proper for the purpose of tracing the landlord; and it after an application is made to the High Court and before the house and premises are vested in pursuance of the application the landlord is traced, then no further proceedings shall be taken with a view to the house and premises being so vested, but subject to subsection (7) below—

    (a) the rights and obligations of all parties shall be determined as if the applicant had, at the date of the application, duly given notice of his desire to have the freehold; and

    (b) the High Court may give such directions as the Court thinks fit as to the steps to be taken for giving effect to those rights and obligations, including directions modifying or dispensing with any of the requirements of this Act or of regulations made under this Act.

    (3) Where a house and premises are to be vested in a person in pursuance of an application under this section, then on his paying into the Supreme Court the appropriate sum there shall be executed by such person as the High Court may designate a conveyance in a form approved by the High Court and containing such provisions as may he so approved for the purpose of giving effect so far as possible to the requirements of section 10 above; and that conveyance shall he effective to vest in the person to whom the conveyance is made the property expressed to be conveyed,

    1429
    subject as and in the manner in which it is expressed to be conveyed.
    (4) For the purpose of any conveyance to be executed in accordance with subsection (3) above, any question as to the property to be conveyed and the rights with or subject to which it is to be conveyed shall be determined by the High Court, but it shall be assumed (unless the contrary is shown) that the landlord has no interest in property other than the property to he conveyed and, for the purpose of excepting them from the conveyance, any underlying minerals.
    (5) The appropriate sum to be paid into the Supreme Court in accordance with subsection (3) above shall be such amount as a surveyor selected by the President of the Lands Tribunal may certify to be at a fair valuation the price payable in accordance with section 9 above, together with the amount or estimated amount remaining unpaid (as determined by the High Court) of any pecuniary rent payable for the house and premises up to the date of the conveyance.
    (6) Where a house and premises are vested in a person in accordance with this section, the payment into the Supreme Court of the appropriate sum shall be taken to have satisfied any claim against the tenant, his executors, administrators or assigns in respect of the price payable under this Part of this Act for the acquisition of the freehold in the house and premises.
    (7) An application under this section may be withdrawn at any time before execution of a conveyance under subsection (3) above and, after it is withdrawn, subsection (2)(a) shall not apply; but where any step is taken (whether by the landlord or the tenant) for the purpose of giving effect to subsection (2)(a) in the case of any application, the application shall not afterwards be withdrawn except with the landyord's consent or by leave of the High Court, and the High Court shall not give leave unless it appears to the Court just to do so by reason of matters corning to the knowledge of the applicant in consequence of the landlord being traced.
    (8) A conveyance executed under subsection (3) above shall have effect as provided by that subsection notwithstanding any interest of the Crown in the property expressed to be conveyed.—[Mr. Willey.]
    Brought up, and read the First time.
    The Minister of State, Ministry of Housing and Local Government (Mr. Frederick Willey): I beg to move, That the Clause be read a Second time.
    Although the Clause stands in my name, I do not claim to be the parent. This will subsequently be known as the "Rossi Clause" of the Bill. It owes everything to the hon. Member for Hornsey (Mr. Rossi) and his diligence and pertinacity in Standing Committee. I asked him to withdraw a proposed Clause which I recognised was well drafted so that we could have the advice
    1430
    and assistance of Parliamentary Counsel. I present the Clause as improved, but acknowledge the debt we owe to the hon. Gentleman.
    Mr. Speaker: The Question is, That the Clause—
    Mr. Hugh Rossi rose—
    Mr. Speaker: Is the hon. Gentleman seeking to catch my eye? He had better hurry up.
    Mr. Rossi: May I thank the right hon. Gentleman for the way in which he has introduced the Clause and accepted the principle enunciated in Committee? There are two criticisms that I must make about the new Clause as it appears on the Notice Paper. Perhaps the right hon. Gentleman will not think me too churlish if I draw attention to those two matters in spite of what he has said.
    First, in Committee we sought to give jurisdiction to the county court in this matter, whereas the Minister has seen fit to give the power to the High Court, and presumably it follows that this will become a Chancery Division matter. I accept immediately that the wealth of experience in dealing with conveyancing matters of this kind in the courts is found in the Chancery Division rather than any other judicial tribunal. However, procedure in the Chancery Division is somewhat long-winded and very expensive.
    If this Clause is to be used—and I would like to see it used—I would like to have available to tenants a simple, quick and cheap procedure. I fear that this will not be found in the Chancery Division. I would have hoped that some form of regulation could be produced along the lines suggested in Committee, which would have enabled the county court to deal with the matter. That is my first criticism.
    The second is that although the new Clause provides for payment of the value of the freehold interest into court where the landlord cannot be found, it does not appear to provide for the payment out of the money after a period of time has elapsed and everyone has become satisfied that the landlord will never be found and will, therefore, never claim the money. There has been a great deal of public comment on the Bill about windfalls. It would appear that here is a windfall for the State, because the money

    1431
    will go into court and there it will remain for a very long time and subsequently be taken out by the Government and used for various purposes, as unclaimed funds are from time to time.
    The whole object of the new Clause proposed in Committee was that where a tenant could not find the freeholder and had not paid his ground rent for a number of years because it had not been claimed, such a tenant should be given the right to acquire the freehold title by a form of procedure under the control and jurisdiction of the courts. The courts would require the tenant to satisfy them beyond all reasonable doubt, providing for evidence to show that the landlord, the freeholder, had disappeared and that active steps, such as advertisements, had been taken to try to find him. The court would have to be absolutely satisfied that despite all this he could not be found.
    We also wanted to ensure that the tenant would pay a proper price. Again, there would be provision by regulation for assessment of the price the tenant had to pay for the freehold interest, and the court would again have to be satisfied on expert evidence that the right price was to be paid. The money would go into court, which would issue a certificate vesting the freehold title in the tenant, who would then be free to dispose of the property as he wished.
    Without this procedure, the tenant would remain in possession of his property until the natural term of his lease expired. Examples were given in Committee of 500-years freehold let on a primrose, where the freeholder had never bothered to collect. In these circumstances, if the tenant remained in possession for 12 years after the expiry of his contractual right, he would be able to acquire the freehold by adverse possession, as a squatter. It would thus never be necessary for a tenant to use this procedure. If it is too cumbersome and expensive, no tenant will use it, but will wait until he has acquired squatter's rights.
    Subject to these two criticisms, the Clause will be a dead letter from the moment that it goes on the Statute Book. Unless a tenant is to rely on his squatter's rights, as he can in any case, he must
    1432
    have something cheap and quick and uncomplicated. I ask the right hon. Gentleman to reconsider the matter on these lines, perhaps later in the course of the Bill.
    4.0 p.m.
    Mr. Emlyn Hooson: I should also like the right hon. Gentleman to reconsider the Clause. I refer to the first requirement that it should go to the Chancery Division. Procedure for dealing with householders should be as simple and swift as possible. The Chancery Division always frightens people off. The Minister should consider this again or give some cogent reasons why it is necessary to use the High Court rather than the county court, particularly as he will seek later to reintroduce the original limitations. Surely there is no reason why the county court should not deal with these matters. It is competent to do so. County court judges and, more importantly, registrars, are accustomed to them and there is no reason to substitute the High Court.
    Mr. Willey: I am willing to consider this again to assist the hon. Gentleman in improving the Bill. Lawyers never agree on jurisdiction. We have considered this carefully and there was much discussion in Committee on jurisdiction. Our best advice is that there would be difficulties in referring this to the county court. Knowing the interest of the hon. Member for Hornsey (Mr. Rossi) in primroses, we made a special provision that the rent would be a pecuniary rent, so that vanloads of primroses would not turn up for delivery.
    On payment out, there is equity between leaseholders. The leaseholder opts to take advantage of the Bill. We feel that we should leave the payment in court, which does not prejudice the leaseholder, so that anyone can prove title for ever and a day. We are willing to consider this again, as it may go against the hon. Gentleman's first intentions.
    Mr. Leslie Hale: I have a direct personal interest in some Clauses of the Bill, though not this one, because my landlords are the Dulwich College Estate governors. When I was a member of the Leasehold Committee, years ago, and a member of the ad hoc Committee in this House on leasehold, I had no interest, and up to that time

    1433
    never had. It is fortuitous that I now have a leasehold house and I have, therefore, tried to refrain from controversy. I would vote along these lines, although I doubt that there is any advice on the subject.
    One matter which has escaped notice is the situation of houses in Oldham, many of them on 999-year leases. One customarily dismisses this as something so remote that people will not be concerned, but I am sure that landlords would welcome any enfranchisement which would save the costs of collection of trifling sums every six months under a long lease and, of course, for property in which they would have no residual interest for 800 or 900 years. Most are very small properties.
    A very serious problem was created when large estates were split up and the obligation to pay the rent for a large plot was vested in one person. When 14 houses were built upon it, he still had that obligation to collect the share of the ground rent from each of the 40 people, which is somewhat difficult. I know that, in such leases, these people have to apply—
    Mr. Speaker: Order. I hesitate to interrupt the hon. Gentleman, for whom we all have a high regard, but he must

    Clause 3.—(PROVISIONS WHERE LANDLORD DESIRES TO SELL FREEHOLD.)
    5

    (1) Where the landlord of any leasehold house of which the tenant has a right to acquire the freehold under Part I of this Act gives written notice to the tenant of his desire to sell the freehold then, subject to the provisions of this section, such notice shall have effect as if the tenant had given notice to the landlord under subsection (1) of section 8 of this Act.

    10

    (2) Where a landlord has given notice to a tenant under subsection (1) of this section the tenant may within one month of receipt of such notice give to the landlord notice in accordance with the provisions of section 14 of this Act and such notice shall have effect as if it had been given immediately before the notice given by the landlord.

    15

    (3) When a tenant is bound to make any payment in consequence of a notice given to him under subsection (1) of this section, he may request the landlord to leave the whole or a part of the amount of such payment against the security of a mortgage of the house, and the landlord shall agree to make such a mortgage and shall not require interest thereunder in excess of five per cent. per annum nor repayment each year of more than one-twentieth of the original sum due.—[Sir H. Lucas-Tooth.]

    Brought up, and read the First time.
    Sir Hugh Lucas-Tooth: I beg to move, That the Clause be now read a Second time.
    I hope that there will be as much agreement about this Clause as about the last, although, unfortunately, I could not put it to the Government in Committee. Nothing in the Clause implies my agreement with the principle of the
    1434
    come to the Clause. We are not discussing the Bill as a whole.
    Mr. Hale: I am coming to the Clause, Mr. Speaker.
    Under the Clause, the sort of ground rent payable is 16s. 6d. for six months, as it was in the last case that I handled. One man had to collect fourteen 16s. 6d.s, many of the roads were unmade, and there were frightful problems over repairs. It is difficult to trace the landlord in many cases.
    There is some strength in the Opposition's argument that to have to go to the Chancery Division over 16s. 6d. every six months is not a particularly attractive solution. This is surely a matter for the local county court. I welcome the fact that the Minister has provided to deal with the depressing case of a man who cannot trace his landlord, but in these cases, involving very small sums and no substantial financial interest, the Chancery Division presents, unless the rules are changed to allow a simple procedure before a Master, an insurmountable obstacle for many of these tenants in Oldham.
    Question put and agreed to.
    Clause read a Second time and added to the Bill.
    Bill or the procedure under it, but we must assume that it will be passed in roughly its present form; it is on that basis that I put forward the Clause to improve the Bill.
    The Bill permits a tenant separately to deal with his own house. He can either acquire the freehold or extend the lease at any time during the tenancy. In the case of a single house with a single landlord, no great difficulty is presented.

    1435
    It may be inconvenient to the landlord, but no more than that. But, of course, many if not most leasehold houses are held in groups or estates or in streets, for example, and the result of the Bill in such cases will at best work out as a network of freeholds and extended leases. In most cases, there will not only be enfranchised freeholds, but leaseholds remaining as extended leases.
    But with many houses concerning which there is uncertainty extending over all sorts of periods—probably anything up to half a century or more—there will be immense doubt about what the position is and how the landlord of such an estate will find himself. The purpose of the Clause is to try to clear up some of the doubts in these cases. It gives the landlord the right to serve notice on his tenant in effect requiring him to make up his mind whether he will purchase the freehold or whether he will extend the lease or do neither.
    There is a strong case for arguing that it is only fair to the landlord to give him this corresponding power, but I am not putting the Clause forward on the ground of fairness to the landlord. I do not think that that would be acceptable to the Government. I put the case forward on the ground of good management of property. It will be impossible for landlords of estates of the kind I have mentioned to conduct them with good management if they do not know where they stand.
    I have no objection to the Amendments to my Clause standing in the name of the hon. and learned Member for Dulwich (Mr. S. C. Silkin), which would insert certain words in lines 5 and 7.
    His Amendments are really no more than consequential. Indeed, I would go a little further than they do. I would now leave out from Clause 9(3,b) the words:
    "… if given within the following five years."
    If we are to ensure the good management of what are now leasehold estates, but which will be mixed estates if the Bill goes through, it will be essential to have some sort of finality. The purpose of the Clause is to produce something nearer finality. It cannot produce finality because the Bill is so bad.
    I commend the Clause to the House and I hope that the Government will at least
    1436
    say that they are in favour of the principle of the Clause and are prepared, if they cannot accept it in this form, to consider the matter again in another place.
    Mr. Speaker: As the House will have gathered, we are taking with new Clause No. 3 the two Amendments standing in the name of the hon. and learned Member for Dulwich (Mr. S. C. Silkin) mentioned by the hon. Member for Hendon, South (Sir H. Lucas-Tooth): In line 5, at end insert:
    Provided that the following provisions of section 9 of this Act shall not apply for the purposes of this section—

    (a) in subsection (3)(a) the words from 'effect' to the last 'and';

    (b) subsection (4).

    In line 7, after first notice ', insert:
    'or together with any written notice which he may give to the landlord in accordance with section 9(3) of this Act, whichever is the later '.
    4.15 p.m.
    The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. Arthur Skeffington): It is a great pleasure to have the hon. Member for Hendon, South (Sir H. Lucas-Tooth) taking part in our debates. The Standing Committee very much regretted that he was not a member, for we might have had the benefit of his considerable experience of these matters. Having said that, I am sorry if I appear churlish when I say that, on matters of greater importance than drafting, the Clause does not find ready acceptance by the Government.
    There are three reasons for this. First, it would curb the rights of leaseholders in ways which would not be desirable. Secondly, it would be a very heavy piece of machinery for a limited result. Thirdly, it would, curiously enough, be very harsh to the landlord in a number of cases.
    I agree that the Clause appears to be constructive in the sense that it might enable the landlord to force a leaseholder to declare himself rather than keep the landlord waiting in suspense, perhaps for a number of years, before electing either to purchase the freehold or extend the lease. What is obvious from a study of the Clause, however, is that the leaseholder could not be forced to buy the freehold. The option of extending the lease would still leave the landlord uncertain, for the tenant could still buy the

    1437
    freehold right up to the original term date, except under Clause 17, whereby the landlord can say that he has an interest in redevelopment and serves notice within the last 12 months.
    Despite the service of a notice, there would not be the certainty that is imagined by the hon. Gentleman. Extension would not help either. It would not materially benefit the landlord because the modern ground rent would not be payable until the extension came into force at the end of the original term. The result of the machinery of the Clause would be that only in the last two years of the original term—in the most favourable circumstances to the landlord, who might be proposing to redevelop and could serve notice within 12 months—would a leaseholder be able to serve, under the appropriate Clause, notice that he wished to extend or purchase. In that case, he would be entitled to an option. Only in those circumstances would the landlord get any advantage under the Clause—in other words, only in the two years before the end of the term. My right hon. Friend feels that it is hardly worth while adding very considerably to the length and, to some extent, the complexity of the Bill to achieve this purpose, for it would be a very small result from a lot of machinery.
    There is really no reason to put any further limit upon the leaseholder's option as to when he chooses either to enfranchise or to extend. Such freedom should be allowed to the maximum degree. Circumstances change. The tenant may hope to buy but may not be able to do so at the time. He may take an extension for financial or other reasons. The balance of fairness seems to the Government to lie in this case with leaving the Bill as it is, with a greater amount of freedom to the tenant.
    Sir H. Lucas-Tooth: The hon. Gentleman has said dogmatically that the tenant must be allowed his choice right up to the end. Can he justify that? Why should the tenant be allowed this advantage while the landlord is not allowed to take any action?
    Mr. Skeffington: First, even this Clause would in no way abrogate the other provisions of the Bill, which will allow, even while the original term is running, a tenant to change his mind.
    1438
    He will be able to change his mind at any time with the exception of those 12 months in cases where the landlord is interested in development.
    The hon. Member's Amendment does not alter that. We think that is fair because tenants' circumstances change. A tenant may hope to be in a position to buy the freehold and his circumstances may change. Therefore, it is right that the tenant should have the maximum opportunity to fit his circumstances. There is nothing to prevent a landlord and tenant from coming to any other agreement. The right of the tenant to maintain his right of option to the end is important.
    The third part of the hon. Member's Clause is a novel one. That does not mean to say that it is unprecedented or in any way wrong, but to say that the enfranchisement should be financed by a compulsory mortgage could operate very harshly on the landlord. First, where the house is the only asset the landlord has the provision in Section 3, which restricts him from requiring payment of more than one-twentieth of the capital in any one year, and denies him the use of his capital for 20 years. This is compulsory under the Clause in circumstances where enfranchisement would be elected by the tenant.
    Sir H. Lucas-Tooth: The Clause comes into operation only if the landlord himself gives notice. If it is against his interests, he would not put it into operation.
    Mr. Skeffington: I think the hon. Member has destroyed the attraction of the proposition. I understood that he was putting in this proposition so that, where he serves notice, the landlord would finance the transaction.
    The circumstances of landlords alter. In operation this requirement means that the landlord loses the use of his capital for 20 years. It is for the hon. Member to decide whether it is reasonable or not. I am saying it is very harsh on the landlord. In the same way it would deprive the mortgagor of his normal right to decide to whom he will lend his money. Circumstances could arise in enfranchisement where the original enfranchisee sells his property and the then landlord has still to be bound to those who have taken the title after the

    1439
    original landlord. The Government feel that this is a harsh provision on the landlord.
    For the reasons I have given, that this rather complicated machinery would only give, in practice, a year's more notice than exists under the Bill, I could not advise the House to accept the new Clause.
    Mr. Graham Page: The Parliamentary Secretary is making very heavy weather of objecting to the Clause of my hon. Friend the Member for Hendon, South (Sir H. Lucas-Tooth). I cannot see what valid objection there is to it. The Clause gives the tenant something more than that which he has under the Bill. It gives him the right, should the landlord wish to come to some finality, to a 100 per cent, mortgage from the landlord. This is a right course to encourage, but the Parliamentary Secretary said that the intention was to force the leaseholder to declare himself. That is not so. The intention is to persuade the leaseholder to declare himself, and it holds out the carrot of a 100 per cent. mortgage if he does.
    Everyone desires that the Bill should result in agreement between the landlord and tenant over enfranchisement rather than a squabble. The landlord is to take the initiative under my hon. Friend's Clause in trying to bring that agreement about, and he offers the carrot of a 100 per cent mortgage to that end.
    The benefit to the landlord is that he may, by this means, have a clear idea of what will happen to his estate. Will it be fragmented between freeholds, long leaseholds and property let at a rack rent, or can he organise it in future on some reasonable basis of wholly long leasehold or wholly freehold without anybody enfranchising thereafter? The Clause would encourage the tenant to come to a decision so that the landlord might in future know how his estate is to be managed.
    I am sorry that the Parliamentary Secretary would not even accept the principle. None of us can draft a Clause right the first time. There may be some gaps in it, but it seems to me a very reasonable principle within the framework of the Government's Bill.
    Mr. Skeffington: We did consider this matter very carefully, but the practical
    1440
    consequences are that the certainty, which the hon. Member for Crosby (Mr. Graham Page) thinks desirable—and no one is against bringing arrangements about the future of an estate to a conclusion as quickly as possible—would still remain at the maximum of two years. This is very heavy machinery which would place burdens on the landlord, in relation to mortgages, which the hon. Gentleman understands very well, and which I must advise the House not to accept.
    Question put and negatived.

    New Clause 4.—(LOCAL PLANNING AUTHORITY CERTIFICATES.)
    (1) Upon the application of the landlord of an estate area, the local planning authority, if it is of the opinion that the estate area or any one or more parts thereof

    (a) by reason of any one or more of the following factors relating thereto namely, the architectural design, lay-out, appearance, amenities used in common, other amenities, the unified control exerciseable by the landlord, the unified control in fact previously exercised by the landlord and any other factors which in the opinion of the local planning authority are relevant, should be retained and managed as a whole by the landlord; or

    (b) should be redeveloped by the landlord (whether immediately or at any future time) as a whole in accordance with comprehensive scheme of development and should be retained and managed as a whole in the meantime,

    shall by a certificate given to the landlord designate the estate area or such one or more parts thereof (as the case may be) as an area of comprehensive development; and any area so designated shall be included in the development plan as an area of comprehensive development.
    (2) The local planning authority shall not give a certificate under this section, unless the landlord has given to the tenants of all the houses in the estate area written notice stating—

    (a) that the question of giving such a certificate is under consideration by the local planning authority; and

    (b) that if within twenty-one days of the giving of the notice the tenant makes to the local planning authority representations in writing with respect to that question, they will be considered before the question is determined;

    and if any tenants makes such representations within those twenty-one days, the local planning authority shall consider them before determining whether to give the certificate.
    (3) Immediately after giving to the landlord a certificate under subsection (1) above, the local planning authority shall submit the certificate to the Minister as a proposal for an

    1441
    alteration or addition to the development plan, and the Minister shall have all the powers in relation thereto contained in Part II of the Town and Country Planning Act 1962; and the Minister shall have power to revoke or amend the certificate as he considers expedient.
    (4) Where an application by the landlord for a certificate under subsection (1) above is pending and has not been withdrawn or the certificate refused, then if (whether before or after the making of an application) a tenant of a house in the estate area or such part thereof to which the application relates gives notice of his desire to have the freehold under this part of this Act—

    (a) no further proceedings need be taken in relation to the notice beyond those which appear to the landlord to be reasonable in the circumstances; but

    (b) the tenant may at any time withdraw the notice by a further notice in writing given to the landlord, and section 9(4) above shall not apply to require him to make any payment to the landlord in respect of costs incurred by reason of the notice withdrawn.

    (5) Where a certificate under subsection (1) above has been given for an area and remains in force then a notice of a person's desire to have the freehold under this part of this Act of a house comprised in the area shall be of no effect.
    (6) If at any time after a certificate under subsection (1) has been given for an area the local planning authority is of the opinion that such area or any part thereof ought no longer to be included in an area of comprehensive development by reason of any change in any of the relevant circumstances (including, but without prejudice to the generality of the foregoing, any change in the personality of the landlord of the area or of any part thereof), then the local planning authority may, after giving to the landlord an opportunity to make representations and considering any such representations, revoke or amend the certificate as it considers expedient.
    (7) The landlord of an estate area shall not be entitled to apply for a certificate under this section in respect of any area during the period of five years after an application for a certificate in respect of that area has been refused by the local planning authority or has been revoked or amended as regards that area by the local planning authority or the Minister.
    (8) For the purposes of this section—

    (a) 'estate area' means any area a substantial part of which is for the time being occupied directly or indirectly under tenancies held from one landlord (apart from property owned by him or his licensees or for the time being unoccupied);

    (b) 'the local planning authority' and 'development plan' have the meanings respectively assigned to those expressions by sections two and four of the Town and Country Planning Act 1962.—[Mr. Graham Page.]

    Brought up, and read the First time.
    Mr. Graham Page: I beg to move, That the Clause be read a Second time.
    1442
    The Bill was originally put before the House on the basis of hardship to long leaseholders particularly in certain areas of the country—South Wales and Birmingham.
    The Opposition agree that there is hardship to long leaseholders who are nearing the end of the term of their long lease and do not know what is to happen to their homes. Provided there was sufficient and proper compensation to the landlord, we agreed that there should be leasehold enfranchisement in those cases. However, the Bill as it now stands is in no way restricted to cases of hardship and is in no way restricted geographically.
    The Bill applies indiscriminately to the large and small estates and to any parts of those estates within a limit of rateable value which we may debate later. The election is simply with the individual leaseholder whether any property shall be enfranchised and whether any estate may be fragmented by different kinds of enfranchisement—the acquisition of the freehold or the acquiring of a long lease. Even within any rateable value limits which the House may fix, there may be fragmentation of some of the estates which have been well managed, well developed, and in which the local areas take some pride.
    Whether those estates are broken up will depend entirely on the tenants' choice. For the benefit of the community, I would have thought that it would be proper to let the authority which governs that area—the local authority—to have some say in the matter, for the benefit of good planning, for the benefit of good local government and for maintaining the amenities on some of these leasehold estates, not only for the tenants on the estates, but for the whole town in which they have been developed. Therefore, in many cases these estates are assets to the district and well worth preserving. To take sections out of the estates which I have in mind would cause hardship to the tenants.
    4.30 p.m.
    In this new Clause we have suggested that it should he left to the local planning authority to give certificates to an estate area which reaches the standards mentioned in subsection (1,a) and which are:
    "by reason of any one or more of the following factors relating thereto, namely, the architectural design, lay-out, appearance,

    1443
    amenities used in common, other amenities, the unified control exercisable by the landlord, the unified control in fact previously exercised by the landlord and any other factors which in the opinion of the local planning authority are relevant, should be retained and managed as a whole by the landlord …".
    If a local authority gave a certificate to say that this was an estate of that nature, that would have the effect only of preventing the tenant from acquiring the freehold; it would not justify preventing the tenant from acquiring a long lease. If the existing long lease were extended for a further 50 years, as the Bill would provide, this Clause would have the effect of maintaining estates of the kind which I have mentioned.
    All I wish to avoid by means of the Clause is fragmentation of what, in Committee, we referred to as well-managed estates. That is a very narrow phrase. I am thinking of things other than management, but I will call them well-managed estates by way of shorthand. Such estates should not be fragmented by freeholds being taken out of them, although there would be no objection to tenants acquiring an extension of an existing lease for a further 50 years. Under the Clause the Minister would have the final decision. The local planning authority would grant the certificate, but the Minister would then have to give his approval before the certificate could take effect.
    Local authorities themselves which own and manage local leasehold estates could take advantage of these provisions. The local planning authorities would give the permission, but the local authority could apply to it for such a certificate. All kinds of estate would thus be covered if the local planning authority thought that they were worth preserving.
    I do not think that anyone realised when we first debated the White Paper, or even when the Bill was published, or on Second Reading, that the Bill would have such an extensive effect. We had in mind the hardship cases to which both sides of the House wished to give some relief, the long leaseholders, but in our debates in Committee it has emerged that the Bill will have a very wide effect, and one which we would not wish it to have on some estates.
    It could be argued that there are later Clauses in the Bill which would take
    1444
    the place of this new Clause, but they deal only with management and are quite insufficient to deal with the sort of case which we have in mind. It is quite unlikely that landlords will take advantage of those later Clauses which deal with management. Something more positive is required to preserve estates which are the pride of the towns in which they have been developed and some of which are among the best residential developments in the world. There should be a provision by which these estates could be properly preserved, some provision other than Clause 19. There should be something positive, controlled by the local planning authority which knows the need of its area and which could say of an estate which it regarded as worth preserving that it was worth a certificate.
    This is by far the better way in which to control the devastating effects of the Bill than to have limits, even limits of rateable value. The matter would be left to the local planning authority, subject to the Minister's approval.
    Mr. Willey: As the hon. Member for Crosby (Mr. Graham Page) said that we might deal with this problem on a geographical basis, I thought that I heard the voice of Professor Denman. We are agreed that we ought to endeavour to preserve well-managed estates, and it is against that background that we have to strike equity among individual leaseholders. Having done that—and this is why we prefer Clause 19 to the hon. Gentleman's proposal—we have to make provision to see as best we can that we preserve the character of the well-managed estate. That is what we do by Clause 19.
    As the hon. Gentleman has said, his proposals go well beyond Clause 19. I recognise the hon. Gentleman's enthusiasm for local government and I notice that he called attention to the power which the Minister would be given by his Clause, but I do not think that it is appropriate for a local planning authority to decide whether an individual leaseholder shall have the right of enfranchisement. This is something which we ourselves have to provide in the Bill.
    Our main objection—and the hon. Gentleman will appreciate that this is probably the difference between his and my side of the House—is that his proposal would drive a very elastic coach and

    1445
    four through the Bill, and it is for that reason that the Clause is unacceptable to the Government.
    Mr. Martin Maddan: There have been one or two examples of a coach and four in the Bill. We drove out one when we considered the Bill in Committee, but the right hon. Gentleman is now to back it in again; and backing in a coach and four, an elastic one at that, is quite an operation.
    On Second Reading and in Committee I said many times that one of the weaknesses of the whole concept of the Bill was that it did not adequately differentiate among different types of estate. The right hon. Gentleman says that he does not like my hon. Friend's proposal, but rather than say that we must, therefore, make do with the provisions for good management, he and his experts should apply their minds to finding some other way, perhaps not using local authorities, of excluding certain estates where the application of the Bill will clearly be harmful not only to the tenants as a whole, but to the community as a whole. It is this blindness, this insistence on adhering to a principle which is applicable in some cases but not in others, which is so distressing.
    In my new Clause—"Saving for estates held under certain statutory enactments or trust deeds"—which was not selected, I suggested another mechanism for excluding at least the enfranchisement provisions, while not the leasehold extensions.
    Something of that sort, the High Court playing a part in it, could be adapted to take account of the sort of criteria that my hon. Friend has mentioned. At this stage, I will not go into the rights and wrongs of Letchworth, but I beseech the right hon. Gentleman to think as hard and constructively as he can to devise some methods of differentiating between these estates, whether it be Letchworth, or Cadogan, or Bourneville. There are entirely different circumstances operating in these cases as compared with, say, South Wales.
    While the Bill fails to recognise those differences we are sure to end up with
    something extremely unsatisfactory. I am not unsympathetic to what the right hon. Gentleman is trying to do, but I object to having the medicine for the sick man rammed down the throats of those who are well. It does not do them any good.
    Mr. Arthur Jones: This new Clause emphasises the difficulties facing the right hon. Gentleman and his colleagues in trying to put right what they see as a system of inequity. The right hon. Gentleman said that the Bill was an attempt to strike equity between individual leaseholders. We do not quite agree with him on that—there are grave differences of opinion. In trying to legislate in that respect, the Government are finding themselves denying—this applies particularly to local authorities—responsibilities to bodies which they had previously held. I am thinking particularly about the whole question of planning.
    It is true that this and previous Governments, have granted widespread planning powers and responsibilities to local authorities, some of which are now to be reduced or withdrawn under the terms of the Bill. I am thinking of the trouble to which planning authorities go to encourage developers to create estate of good character, on sound planning principles. I know of the concern of planning authorities about the maintenance of the character of existing estates, and the tremendous amount of manpower and professional ability which is brought to bear.
    This responsibility, which has existed since the right hon. Gentleman's right hon. Friends introduced the 1947 Act, will be impinged upon by this Bill. A substantial amount of what has been done over the last 20 years will be frustrated—all that they had planned to do in the future will come to nought. The right hon. Gentleman should have regard to the withdrawal of powers from local authorities, which must flow from this enactment.
    Question put, That the Clause be read a Second time:—
    The House divided: Ayes 129, Noes 217.

    Division No. 372.]

    AYES

    [4.44 p.m.

    Allason, James (Hemel Hempstead)

    Bennett, Sir Frederic (Torquay)

    Boyd-Carpenter, Rt, Hn. John

    Balniel, Lord

    Biffen, John

    Brewis, John

    Bell, Ronald

    Black, Sir Cyril

    Bossom, Sir Clive

    Brinton, Sir Tatton

    Hutchison, Michael Clark

    Prior, J. M. L.

    Brown, Sir Edward (Bath)

    Irvine, Bryant Godman (Rye)

    Pym, Francis

    Bruce-Gardyne, J.

    Jenkin, Patrick (Woodford)

    Quennell, Miss J. M.

    Bryan, Paul

    Jennings, J. C. (Burton)

    Renton, Rt. Hn. Sir David

    Bullus, Sir Eric

    Johnson Smith, G. (E. Grinstead)

    Ridley, Hn. Nicholas

    Campbell, Gordon

    Jones, Arthur (Northants, S.)

    Rippon, Rt. Hn. Geoffrey

    Cary, Sir Robert

    Jopling, Michael

    Rodgers, Sir John (Sevenoaks)

    Channon, H. P. G.

    King, Evelyn (Dorset, S.)

    Rossi, Hugh (Hornsey)

    Clegg, Walter

    Lambton, Viscount

    Russell, Sir Ronald

    Cooke, Robert

    Lancaster, Col. C. G.

    Scott, Nicholas

    Costain, A. P.

    Lewis, Kenneth (Rutland)

    Sharpies, Richard

    Craddock, Sir Beresford (Spelthorne)

    Crosthwaite-Eyre, Sir Oliver

    Lloyd, Rt. Hn. Selwyn (Wirral)

    Shaw, Michael (Sc'b'gh & Whitby)

    Dean, Paul (Somerset, N.)

    Loveys, W. H.

    Sinclair, Sir George

    Digby, Simon Wingfield

    MacArthur, Ian

    Smith, John

    Dodds-Parker, Douglas

    Maclean, Sir Fitzroy

    Stainton, Keith

    Elliott, R. W. (N'c'tle-upon-Tyne, N.)

    McMaster, Stanley

    Stoddart-Scott, Col. Sir M. (Ripon)

    Emery, Peter

    Maddan, Martin

    Tapsell, Peter

    Eyre, Reginald

    Maginnis, John E.

    Taylor, Edward M. (G'gow, Cathcart)

    Fletcher-Cooke, Charles

    Marten, Neil

    Taylor, Frank (Moss Side)

    Fortescue, Tim

    Maxwell-Hyslop, R. J.

    Thatcher, Mrs. Margaret

    Foster, Sir John

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

    Tilney, John

    Gibson-Watt, David

    Mills, Peter (Torrington)

    Turton, Rt. Hn. R. H.

    Glover, Sir Douglas

    Miscampbell, Norman

    van Straubenzee, W. R.

    Glyn, Sir Richard

    Mitchell, David (Basingstoke)

    Vaughan-Morgan, Rt. Hn. Sir John

    Goodhart, Philip

    Munro-Lucas-Tooth, Sir Hugh

    Walker, Peter (Worcester)

    Goodhew, Victor

    Murton, Oscar

    Walker-Smith, Rt. Hn. Sir Derek

    Grant, Anthony

    Nabarro, Sir Gerald

    Wall, Patrick

    Gresham Cooke, R.

    Neave, Airey

    Walters, Dennis

    Grieve, Percy

    Nicholls, Sir Harmar

    Ward, Dame Irene

    Griffiths, Eldon (Bury St. Edmunds)

    Noble, Rt. Hn. Michael

    Weatherill, Bernard

    Hall, John (Wycombe)

    Onslow, Cranley

    Webster, David

    Hamilton, Michael (Salisbury)

    Orr-Ewing, Sir Ian

    Whitelaw, Rt. Hn. William

    Harrison, Brian (Maldon)

    Osborn, John (Hallam)

    Wills, Sir Gerald (Bridgwater)

    Harvey, Sir Arthur Vere

    Osborne, Sir Cyril (Louth)

    Wilson, Geoffrey (Truro)

    Hawkins, Paul

    Page, Graham (Crosby)

    Wolrige-Gordon, Patrick

    Heald, Rt. Hn. Sir Lionel

    Page, John (Harrow, W.)

    Wood, Rt. Hn. Richard

    Higgins, Terence L.

    Pearson, Sir Frank (Clitheroe)

    Worsley, Marcus

    Hiley, Joseph

    Peel, John

    Holland, Philip

    Peyton, John

    TELLERS FOR THE AYES:

    Howell, David (Guildford)

    Pink, R. Bonner

    Mr. Jasper More and

    Hunt, John

    Powell, Rt. Hn. J. Enoch

    Mr. Hector Monro.

    NOES

    Abse, Leo

    Dalyell, Tam

    Griffiths, Rt. Hn. James (Llanelly)

    Albu, Austen

    Darling, Rt. Hn. George

    Hale, Leslie (Oldham, W.)

    Allaun, Frank (Salford, E.)

    Davidson, James (Aberdeenshire, W.)

    Hamilton, James (Bothwell)

    Alldritt, Walter

    Davies, G. Elfed (Rhondda, E.)

    Hamilton, William (Fife, W.)

    Allen, Scholefield

    Davies, Ednyfed Hudson (Conway)

    Hamling, William

    Anderson, Donald

    Davies, Harold (Leek)

    Hannan, William

    Armstrong, Ernest

    Davies, Ifor (Gower)

    Harper, Joseph

    Atkins, Ronald (Preston, N.)

    de Freitas, Rt. Hn. Sir Geoffrey

    Harrison, Walter (Wakefield)

    Atkinson, Norman (Tottenham)

    Dempsey, James

    Heffer, Eric S.

    Bagier, Gordon A, T.

    Dickens, James

    Herbison, Rt. Hn. Margaret

    Barnes, Michael

    Dobson, Ray

    Hilton, W. S.

    Barnett, Joel

    Doig, Peter

    Hooley, Frank

    Baxter, William

    Donnelly, Desmond

    Hooson, Emlyn

    Beaney, Alan

    Dunwoody, Mrs. Gwyneth (Exeter)

    Houghton, Rt. Hn. Douglas

    Bence, Cyril

    Dunwoody, Dr. John (F'th & C'b'e)

    Howarth, Harry (Wellingborough)

    Bennett, James (G'gow, Bridgeton)

    Eadie, Alex

    Howarth, Robert (Bolton, E.)

    Bidwell, Sydney

    Edelman, Maurice

    Howie, W.

    Blackburn, F.

    Edwards, Rt. Hn. Ness (Caerphilly)

    Huckfield, L.

    Blenkinsop, Arthur

    Ellis, John

    Hughes, Rt. Hn. Cledwyn (Anglesey)

    Boardman, H.

    Ensor, David

    Hughes, Emrys (Ayrshire, S.)

    Booth, Albert

    Evans, Albert (Islington, S.W.)

    Hughes, Roy (Newport)

    Bottomley, Rt. Hn. Arthur

    Evans, loan L. (Birm'h'm, Yardley)

    Hunter, Adam

    Bowden, Rt. Hn. Herbert

    Faulds, Andrew

    Braddock, Mrs. E. M.

    Finch, Harold

    Janner, Sir Barnett

    Bradley, Tom

    Fitt, Gerard (Belfast, W.)

    Jay, Rt. Hn. Douglas

    Brown, Hugh D. (G'gow, Provan)

    Fletcher, Raymond (Ilkeston)

    Jenkins, Rt. Hn. Roy (Stechford)

    Brown, Bob (N'c'tle-upon-Tyne, W.)

    Foot, Michael (Ebbw Vale)

    Johnson, Carol (Lewisham, S.)

    Butler, Herbert (Hackney, C.)

    Ford, Ben

    Jones, Dan (Burnley)

    Butler, Mrs. Joyce (Wood Green)

    Forrester, John

    Jones, J. Idwal (Wrexham)

    Cant, R. B.

    Fowler, Gerry

    Jones, T. Alec (Rhondda, West)

    Carmichael, Neil

    Fraser, John (Norwood)

    Judd, Frank

    Coe, Denis

    Freeson, Reginald

    Kelley, Richard

    Coleman, Donald

    Gardner, Tony

    Lawson, George

    Concannon, J. D.

    Garrett, W. E.

    Leadbitter, Ted

    Conlan, Bernard

    Ginsburg, David

    Ledger, Ron

    Corbet, Mrs. Freda

    Gray, Dr. Hugh (Yarmouth)

    Lee, Rt. Hn. Frederick (Newton)

    Craddock, George (Bradford, S.)

    Greenwood, Rt. Hn. Anthony

    Lewis, Arthur (W. Ham, N.)

    Crawshaw, Richard

    Gregory, Arnold

    Lipton, Marcus

    Crossman, Rt. Hn. Richard

    Grey, Charles (Durham)

    Lomas, Kenneth

    Cullen, Mrs. Alice

    Griffiths, David (Rother Valley)

    Loughlin, Charles

    1448

    1449

    Luard, Evan

    Paget, R. T.

    Snow, Julian

    Lubbock, Eric

    Palmer, Arthur

    Spriggs, Leslie

    Lyon, Alexander W. (York)

    Pannell, Rt. Hn. Charles

    Steel, David (Roxburgh)

    Lyons, Edward (Bradford, E.)

    Park, Trevor

    Steele, Thomas (Dunbartonshire, W.)

    McGuire, Michael

    Parkyn, Brian (Bedford)

    Stonehouse, John

    McKay, Mrs. Margaret

    Pavitt, Laurence

    Strauss, Rt. Hn. G. R.

    McMillan, Tom (Glasgow, C.)

    Pearson, Arthur (Pontypridd)

    Symonds, J. B.

    McNamara, J. Kevin

    Pentland, Norman

    Thornton, Ernest

    MacPherson, Malcolm

    Perry, Ernest G. (Battersea, S.)

    Thorpe, Rt. Hn. Jeremy

    Mahon, Peter (Preston, S.)

    Price, Thomas (Westhoughton)

    Tinn, James

    Mahon, Simon (Bootle)

    Price, William (Rugby)

    Varley, Eric G.

    Manuel, Archie

    Probert, Arthur

    Wainwright Edwin (Dearne Valley)

    Mapp, Charles

    Rankin, John

    Watlace, George

    Marsh, Rt. Hn. Richard

    Reynolds, G. W.

    Watkins, David (Consett)

    Mayhew, Christopher

    Rhodes, Geoffrey

    Watkins, Tudor (Brecon & Radnor)

    Mellish, Robert

    Richard, Ivor

    Weitzman, David

    Mikardo, Ian

    Roberts, Albert (Normanton)

    Wells, William (Walsall, N.)

    Miller, Dr. M. S.

    Robinson, W. O. J. (Walth'stow, E.)

    Whitaker, Ben

    Milne, Edward (Blyth)

    Rogers, George (Kensington, N.)

    White, Mrs. Eirene

    Molloy, William

    Rose, Paul

    Whitlock, William

    Morgan, Elystan (Cardiganshire)

    Rowland, Christopher (Meriden)

    Willey, Rt. Hn. Frederick

    Morris, Alfred (Wythenshawe)

    Rowlands, E. (Cardiff, N.)

    Williams, Alan (Swansea, W.)

    Morris, Charles R. (Openshaw)

    Ryan, John

    Williams, Alan Lee (Hornchurch)

    Moyle, Roland

    Sheldon, Robert

    Williams, Clifford (Abertillery)

    Murray, Albert

    Shinwell, Rt. Hn. E.

    Winnick, David

    Neal, Harold

    Shore, Peter (Stepney)

    Winstanley, Dr. M. P.

    Noel-Baker, Francis (Swindon)

    Short, Rt. Hn. Edward (N'c'tle-u-Tyne)

    Winterbottom, R. E.

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

    Short, Mrs. Renée (W'hampton, N. E.)

    Oakes, Gordon

    Woodburn, Rt. Hn. A.

    Ogden, Eric

    Silkin, Rt. Hn. John (Deptford)

    Woof, Robert

    O'Malley, Brian

    Silverman, Julius (Aston)

    Orbach, Maurice

    Silverman, Sydney (Nelson)

    TELLERS FOR THE NOES:

    Orme, Stanley

    Skeffington, Arthur

    Mr. Alan Fitch and

    Oswald, Thomas

    Slater, Joseph

    Mr. Neil McBride.

    Padley, Walter

    Small, William

    New Clause No. 5.—(HOUSING ASSOCIATIONS.)
    No person shall be entitled under Part I of this Act to acquire the freehold or an extended lease of property if the landlord is a housing association (as defined by section 189(1) of the Housing Act 19571.—[Mr. Allason.]
    Brought up, and read the First time.
    Mr. James Allason: I beg to move, That the Clause be read a Second time.
    Mr. Deputy Speaker (Mr. Sydney Irving): We can discuss, at the same time, new Clause No. 8 entitled "Saving for housing societies":
    A person shall not be entitled under this Part of this Act to acquire the freehold of property or an extended lease of the property where the freehold is vested in a housing society as defined by section 1(7) of the Housing Act 1964 and where the cost of acquisition or construction of the property has been financed by a housing society in whole or in part by means of loans from the housing corporation or from a local authority and but for the redemption of such loans the rent ordinarily and reasonably paid by a tenant of the property to the housing society would not he a low rent.
    Mr. Allason: New Clause No. 5 excludes from the operation of the Bill housing associations and the tenants of housing associations. I call in evidence paragraph 16(d) of the White Paper, which reads:
    1450
    "Housing Associations normally let houses on short leases, so they will seldom have leaseholders qualified under the Bill. But in any case, since Housing Associations exist only for the benefit of their tenants, it would not be appropriate to give rights against them under this scheme."
    Throughout the Bill's passage, the Minister has shown great devotion to the White Paper. Whenever he has been tempted to go away from it, he has always been led back to it, whether it be in Committee or occasionally on reconsideration after the Committee stage. It would, therefore, seem that he would wish to take account of the White Paper in this case.
    There are three principal types of housing association. There are the charitable housing associations which, in general, let short tenancies at low cost. It is very unlikely that they would in any circumstances let a long tenancy, but it is conceivable, and one would think that it should be covered.
    Secondly, there are the cost-rent housing associations which, again, normally let on short leases, but there is nothing to stop them letting on long leases. It might well occur that there was a long lease. That is paid for by the housing association taking a mortgage over a long period. The cost of the mortgage is collected by way of rent and at the end of,

    1451
    say, 40 years the house belongs to the association and is available in the association's housing pool in order to reduce rents generally of the rest of the association's houses. It is, therefore, fairly clear that it is not desirable that there should be enfranchisement.
    Lastly, there are the co-ownership societies. In this case there is joint ownership, but, in general, there is a mortgage over 25 years to be paid off. When it has been paid off, the tenant has the balance of a long lease of probably 99 years which he enjoys. At the end of that time the house reverts to the housing society. Therefore, again, it hardly seems desirable that the tenant should be entitled to enfranchisement.
    All three types of housing association are covered by the definition in the Housing Act, 1957, and, therefore, new Clause No. 5 covers all three. The cost-rent housing associations and the co-ownership societies are covered by the definition in the Housing Act. 1964. Therefore, new Clause No. 8 would substantially cover the same ground, but it would omit the charitable housing associations which I should have thought it was desirable to leave in. Clearly, under the White Paper, the Government's intention is that all types of housing association should be included from the Bill.
    Therefore, I suggest that new Clause No. 5 fulfils a great need in the Bill, and I hope that the Government will accept it.
    Mr. Skeffington: We are grateful to the hon. Member for Hemel Hempstead (Mr. Allason) for raising this point. There is no doctrinal difference between the two sides of the House on this matter.
    As the hon. Gentleman said, the White Paper specifically excludes housing associations. There is no provision in the Bill for them for the simple reason that we have not been able to find any associations which have long leases at low rents which would bring them within the terms of the Bill; and we have made fairly extensive inquiries. I am aware that in certain co-operative housing societies houses are available to members on long leases, but in all the cases which I have seen the lease terminates on the death of the tenant. That would exclude them from the definition of a long lease under Clause 3.
    If the hon. Gentleman would be prepared to withdraw the new Clause, my
    1452
    right hon. Friend the Minister will think about the matter further. It may be desirable to make provision, even though we know of no cases. I suppose that a co-operative housing association might let houses on long leases and that, in the course of time, the rent might become two-thirds of the rateable value and therefore would be brought within the terms of the Bill, particularly if there was not a provision saying that the lease terminated on the death of the tenant.
    I cannot commit my right hon. Friend to say that we shall introduce a new Clause in another place, because if it is not absolutely necessary there is no point in making the Bill longer. We should like an opportunity to have second thoughts about it. In any case, the Government could not accept new Clause 5 or new Clause 8 because, inevitably, it would be necessary to cover a number of other instances, such as how the new Clause would be operated in the case of a housing association which might buy leasehold property with a sitting residential tenant who would be qualified under the existing law to enfranchisement, or the case of a housing association which, as a commercial operation, might possess itself of a leasehold property with a tenant and sell the freehold elsewhere. Once one is committed to legislation, one has to tie up all the loose ends, and the resulting Clause always becomes a good deal longer than one would wish. It would be no use putting forward legislation if it were not effective.
    5.0 p.m.
    To summarise what I have said, we have not found specific cases where housing associations would be harmed by the provisions of the Bill. A situation might arise in the future, however, and we should like to have further thought about it. My right hon. Friend will undertake to think about it, and, if it seems necessary to make provision for it, we will add to the Bill in another place.
    Mr. John Fraser: We have listened to a rather sketchy response to the arguments in favour of exempting certain housing associations from the provisions of the Bill, and I hope to show that there are circumstances which call for a much clearer assurance that some exemption will be given.

    1453
    I do not lend my support to new Clause No. 5, because I can see defects in its drafting. For example, the housing associations which are defined by Section 189 of the Housing Act, 1957, include those associations formed for the construction and sale of dwellings. It is for that reason that in my new Clause No. 8 I have chosen the definition in Section 1(7) of the Housing Act, 1957, which refers specifically to housing associations incorporated under the Industrial Provident Societies Act, and formed specifically for letting so as to exclude those associations formed for some other purpose.
    It is common ground that there should be a third arm in the housing sphere and that the Government should encourage the building of houses to let. To that end, the Housing Act, 1961, provided for £25 million for housing associations, and the 1964 Act extended that to £300 million, provided jointly by the Housing Corporation, the building societies and other associations.
    The arrangements for letting which take place under these schemes are generally financed by the Housing Corporation or by local authorities, which the Minister has encouraged to lend money to housing associations. But a new concept of a tenancy was introduced on advice given by the Government. Instead of having tenancies running from week to week or month to month, housing associations were encouraged to grant tenancies for a period of 99 years.
    The purpose of that was to institute a new feeling of ownership and responsibility so that the tenant of a housing association had more pride and longterm interest in his property than perhaps a person living in a council house, renting it from week to week and only thinking of repairs and improvements in those terms. The Housing Corporation has followed the Government's example and submitted 99-year leases to housing associations. These have been taken up by co-ownership housing associations, at any rate.
    The rents for 99-year leases—though some are for shorter periods of, say 21 or 35 years—are made up of the services of the association, the cost of repairs and insurance, and matters like that. But, of course, the principal part of the rent
    1454
    is the proportion of mortgage repayments which the individual tenant makes. It does not matter while the mortgage is being repaid because, in most instances, the rent will be more than two-thirds of the rateable value at the time that the lease was granted. But the Government have introduced Amendment No. 16, which exempts from the calculations of rent any charges for services, repairs, and so forth. Consequently, when the longterm mortgages of 40 or 60 years have been paid off, the rent payable, ignoring services and repairs, will be nil. These long leases of 99 years will be enfranchise-able in 40 or 60 years' time, when the mortgages have been paid off. The Government have advised this type of lease, and the Government must take responsibility for keeping these dwellings for letting and not make them available for enfranchisement when the mortgages are paid off.
    If I can anticipate some comments which may be made, it will be said that these leases are determinable upon death and, therefore, do not qualify for enfranchisement. However, it has been found proper to say that a lease, though determinable upon the death of the tenant, in certain circumstances can be assigned to a member of the family. If a 99-year lease has been given to a man, and he dies, the lease can be transferred to his widow or perhaps to his children living in the same house. Following the precedent set by the Government, this has been done, and these leases will be enfranchiseable.
    It may be said that housing associations have it in their power at the moment not to grant leases which would become enfranchisable. But when the mortgages have been paid off, the Government and local authorities will have no influence over future operations of housing associations, and the beneficiaries of those predecessors who by hard graft have paid the mortgage will be able to take those premises out of the sector for private letting and enfranchise them. Furthermore, I have evidence from certain local authorities in the north of England that they are now thinking of refusing loans to housing associations because of the risk that, at the end of the period of repayment, enfranchisement may take place. This is probably a matter which has been overlooked, but it is a situation which is

    1455
    exacerbated by the Government's Amendment No. 16, because clearly that will make any long lease enfranchiseable.
    I ask the Government to look at the effect of their Amendment No. 14, because where there is a series of leases going over a total of 21 years, again enfranchisement can take place. It is quite common and, in other circumstances, both the Housing Corporation and the Government have thought fit to recommend provisions in the rules or tenancy agreements of associations that, at the end of a period of a three or seven-year lease, it ought to be renewed and renewed again to assure tenants that they have a reasonable period of security and that a majority of tenants should not gang up upon any one tenant. Once again, under the provisions of Amendment No. 14, these leases would be subject to enfranchisement.
    To anticipate another argument which may be put forward, it may well be that my drafting is defective. I realise that I have missed out Section 7 loans and building society loans. However, the argument will not be about the drafting, but about the spirit of the Clause. I ask the Government to look at the situation which they are likely to create as a result of the leases which in the past they have themselves prescribed, and give the assurance that the provision of housing for letting will not be diminished in 40 or 60 years' time when these loans are paid off.
    Mr. Graham Page: I have to declare an interest as a member of a committee of management of a housing association. If the Parliamentary Secretary had to declare a similar interest, he would not have made such a silly speech. He has completely missed the point. It was irrelevant, and he should have corrected his brief before reading it.
    To begin with, we have the White Paper, which says clearly that it is not intended that tenants of housing associations should enfranchise. The only excuse which the hon. Gentleman put forward for not keeping that promise in the White Paper was that he could not find any housing association of which there were long leasehold tenants.
    The extremely clear speech of the hon. Member for Norwood (Mr. John Fraser), explaining how the Bill may affect hous-
    1456
    ing associations, was more telling. I know these documents which have been sent to housing associations advising them to let on 99-year leases, including the services as part of the rent, and that this rent for services ceases after a period of time. These will undoubtedly eventually be caught by the Bill, particularly, as the hon. Member for Norwood said, having regard to Amendments Nos. 16 and 40. I am glad the Parliamentary Secretary said there was no doctrinal difference between us, but if this is so, why wait for another place? Why not accept the Clause now, and put on the trimmings in another place?
    The hon. Gentleman said that he accepts the principle that housing associations should not be within the Bill, and his hon. Friend has shown that they may come within it. I assure the hon. Gentleman that we come even closer than that, as a number of housing associations are already seeking to purchase houses subject to long lease with a view to development in due course; tenants of such houses may be able to refuse that development. Housing associations have to go through an elaborate business before they are allowed to purchase. They have to get the consent of this, and the consent of that. It takes months. The lists of properties available for them to purchase are sent out by the housing corporations, and the lists include long leasehold property. Housing associations are encouraged to buy this type of property for the purpose, for example, of turning it into flats.
    The Parliamentary Secretary said that he cannot find any housing association which is holding long leasehold properties. I do not know whether at this very moment there is one which is holding leasehold property, but I know that the one with which I am concerned has considered houses subject to long leases on the lists supplied to it by the housing corporation. I know that housing associations have been encouraged to let their own houses on 99- or 40-year leases which may become leases at a low rent. I therefore ask the hon. Gentleman to accept the Clause now, and to tidy it up later. This matter can only come back to us if there is a Lords' Amendment. We get only that chance, and if their Lordships do not make an Amendment we do not get another chance to discuss this.
    Mr. Skeffington: Perhaps I might try to reassure both sides of the House. I am sorry if my assurances were not acceptable before. There is really no point of division between either the Government and the Opposition, or between the Government and my hon. Friend the Member for Norwood (Mr. John Fraser) who has written to us about housing associations, and we have carefully considered what he has said.
    I start by saying that there is no provision in the Bill because—and I ask the House to accept this; I do not say it lightly—after fairly extensive research, we could not find any examples, nor have any been supplied to us. I did not refer to housing associations not having long leases. I was talking about long leases which would be qualified for enfranchisement under the Bill because they were long leases at a low rent.
    Because of that, and the fact that no specific example has been sent to us, we have not put a provision into the Bill, but it may be, and I suggest that it could be, that by a combination of circumstances this risk might arise in the future. I still think that it is very unlikely, but because of this we would like to consider the position further and to deal with it comprehensively in another place.
    As my hon. Friend said, the proposed new Clause No. 8 is much more restricted in that he uses the definition in the 1964 Housing Act, which is very much narrower than that in the 1957 Act, and he gave his reasons for it. But if it were necessary to legislate we should need a proper definition to include a rather wider category of societies. I think that it would be fair and proper to do this. I make no complaint about it, but new Clauses 5 and 8 would not answer the purpose, as I tried to suggest in my first speech, because we have to make provision not only for the main principle, but for the number of contingencies which will arise in respect of property which is in the course of transfer to the associations. In its present form Clause 5, in particular, would be much too narrow to carry out the undertaking in the White Paper.
    In view of what has been said, I give an undertaking that the matter will be thoroughly reconsidered. I feel fairly
    1458
    satisfied on the evidence that there is no danger, but if it seems that a contingency may arise in the future, we will take steps to put the matter right in another place.
    5.15 p.m.
    Mr. W. S. Hilton: I, too, would like to declare an interest in this subject in that I am on the board of the Co-ownership Development Society. I speak not only for myself and the members of that board, but for thousands of people of all political persuasions who, without reward, have put their time and energies behind the development of the co-ownership idea.
    The Minister has made a placatory statement about the Clause. He has said that he may do something about this problem, but already there is apprehension in the minds of those who are trying to promote co-ownership that because of the implications of this Bill the end result will not be what they want, and therefore they will not enter into co-ownership schemes as of now. I therefore think that the matter should be considered urgently.
    Most of the speeches today have been couched in legal terminology. Mine will not be along the same line, for I do not understand this terminology as well as it is understood by my hon. Friend the Member for Norwood (Mr. John Fraser) and the hon. Member for Hemel Hempstead (Mr. Allason). Too often the bleak phrasing of a Clause leads to the destruction of a humane and ideal concept, and as far as I am concerned the finest type of housing in this country at the moment is not council administered property or owner occupation but co-ownership. It is not a property-owning democracy, but a democracy which owns property and tries positively to ensure that it is used as beneficially as it can be.
    We have had meetings of people who now inhabit dwellings erected by co-ownership schemes. These meetings, which have sometimes lasted for two or three hours, are devoted to considering how the landscaping should be carried out, what should be done about general amenities, and so on. This responsible attitude is what we should be trying to to encourage, and if there is any possibility that the Bill might discourage this, the Minister should take steps to ensure that it does not happen.

    1459
    Every speaker has been writing the Minister's reply for him and anticipating what he would tell us. I think that he might give two replies, apart, of course, from saying that he will accept my hon. Friend's new Clause! First, he might say that it is not possible legally. Secondly, that it is not desirable. I defy anyone to say that it is not desirable to promote co-ownership schemes. Nor do I think it can be said that it is legally impossible to provide for meeting these Amendments and I ask my hon. Friend to give us a definite assurance, something rather more than he has done so far, that he will look at this matter with care, and within a short time will bring in some method by which he can circumvent what we see as a possible problem in the future.
    Mr. Allason: The Parliamentary Secretary said that he had not been able to find any examples, and, therefore, he saw no need for this Clause. That was the main burden of his speech, that he could riot find any examples, but he went on to say that he would reconsider the whole matter. It is a poor case to say that because it has not been possible to find examples we should not introduce any legislation. This is clearly a developing subject. At the moment leases can be granted to terminate on the death of the tenant, and that this provision carries leases outside the terms of the Bill seems to be a bad argument. I hope that these leases will not continue for very long.
    We have also heard from the hon. Member for Norwood (Mr. John Fraser) that there are variations. I hope that this will become the rule rather than the exception. It is highly undesirable that the lease should terminate on the death of a tenant when it is a beneficial lease to his family. A case is clearly made out for the Clause. The argument is reinforced by the speeches made by the hon. Member for Norwood and the hon. Member for Bethnal Green (Mr. Hilton).
    I agree that there are difficulties, which cannot be met by the drafting of new Clause No. 5, in the case of tenants who already have the right of enfranchisement leaving a house subsequently taken over by a housing association. They clearly need protection. I hope that we can have a clear understanding from the Parliamentary Secretary that he intends to meet the problem. On that under-
    1460
    standing, I beg to ask leave to withdraw the Motion.
    Motion and Clause, by leave, withdrawn.

    New Clause 6.—(PURCHASE NOTICE RELATING TO COMMON PARTS OF A LEASEHOLD ESTATE.)
    The owner of any land which is a road, footpath, watercourse, sewer, drain, garden, parkland, recreational or sports ground, communal building or other premises, used in common by or for the benefit of the residents of any neighbouring house and premises of which that owner is the landlord by virtue of a long lease at a low rent, may, within the time and in the manner prescribed by regulations under the Town and Country Planning Act 1962 serve on the Council of the County Borough or County District in which the land is situated a notice requiring that council to purchase his interest in the land in accordance with the provisions of Part VIII of the said Act and the notice shall have the same effect as a purchase notice under Part VIII aforesaid and the condition that the person serving the said notice is the owner and landlord aforesaid shall take the place of the conditions set out in section 129 of the said Act and the provisions relating thereto as stated in that section. —[Mr. Clegg.]
    Brought up, and read the First time.
    Mr. Walter Clegg: I beg to move, That the Clause be read a Second time.
    The Clause is designed to deal with one of the consequences which are bound to follow upon enfranchisement. There is no doubt that the effect of enfranchisement will be to fragment the larger estates. In the garden city type of estate many landlords are responsible for keeping up a network of roads, sewers and drains, besides open spaces, sometimes at considerable expense. Following upon enfranchisement, the natural incentive to a landlord to maintain such amenities as open spaces, roads and drains will be gone. In the past, the provision of such amenities gave him a better letting value for his premises.
    We may, therefore, reach a situation in which a landlord will not want to maintain these common amenities. That would be bad for the new freeholders, or even for those who had extended their long leases. Under the present state of the law—at least, until we receive the report on positive covenants—I do not see any effective way of dealing with this problem other than that proposed by the new Clause.

    1461
    The Clause gives a landlord a right, if he finds that the maintenance of the common facilities is becoming a burden, to require the local authority to purchase them from him. It seems to those of us who support the new Clause that the local authority is the right body to take over these common facilities from the landlord. Some local authorities might well like to be able to buy them from landlords. I am thinking of places like Letchworth.
    The Clause deals with a problem that is certain to arise. If the right hon. Gentleman accepts it it will operate fairly for the landlords and those who have either extended their leases or have bought in the freehold.
    Mr. Willey: I am in a dilemma. If I say that I will think about this I shall excite the hon. Member for Crosby (Mr. Graham Page), and if I say that I will not I will excite him even more. I am persuaded by what the hon. Member for North Fylde (Mr. Clegg) has said. A few days ago I received a deputation from some of the Cambridge colleges which raised a similar point. I am not enthusiastic about cluttering the Bill with provisions which are not effective. That is the reason for my hesitation. Later, we shall be discussing Amendments which may affect the attitude of those who have made representations to me, but I am willing to consider the question. I shall explain why I have doubts about this.
    As the hon. Member said, we are here concerned with estates. If Clause 19—on management—is accepted, provision could be made for contributions towards maintenance, but where there is no such scheme the problem has to be faced by the freeholder. There might be extensive enfranchisement and he might have left on his hands the open spaces and roads. It is not merely a question of purchase; it is a question of maintenance.
    Let us take the case of a road where the leaseholders have enfranchised. The freeholder of the remaining part of the estate would be under no obligation to maintain the road. I doubt, however, the wisdom of providing machinery to transfer property compulsorily to a local authority. The essential problem is that of maintenance—whether the local authority thinks that an open space should be properly maintained. Generally
    1462
    speaking, the most satisfactory way of dealing with the problem would be by agreement. If that were done, the open spaces would be taken over and properly maintained.
    However, in the light of what the hon. Member has said and the representations made to me recently, I am willing to consider the question again to see whether those who are mainly affected—the larger estates—feel that such a provision should be made for compulsorily acquiring the community part of an estate.
    Mr. Oscar Murton: I hope that the right hon. Gentleman will not take it amiss if I point out that the leader in The Times this morning takes the view that the Bill is a mess. I take exception to the fact that the right hon. Gentleman does not want to clutter up the Bill with various provisions. The Bill is a hotchpotch as it is. I can foresee many difficulties of interpretation. When my hon. Friends and I attempt to iron out some of the anomalies the Minister should at least consider them. I hope that on this occasion he will accept the new Clause.
    Mr. Hooson: I cannot see why the right hon. Gentleman should not accept the new Clause and, if necessary, amend it in another place. It seems to deal with a matter which is not dealt with anywhere in the Bill. It is not only in the landlords' interest and the interest of leaseholders; it is also in the public interest that this provision should be included.
    It is natural that with a Bill dealing with as complicated a subject as leaseholds there are bound to be gaps. The hon. Member for North Fylde (Mr. Clegg) has done a service to the House in drawing this point to our attention. The right hon. Gentleman says that this matter is best dealt with by agreement. That may be so, but what about circumstances when agreements are not possible—when a local authority, for some reason, does not wish to co-operate with landlords? What happens then?
    I have always been a passionate advocate of leasehold enfranchisement, but it seems to me that there may be circumstances in connection with the enfranchisement of larger estates where those estates can no longer afford to maintain the amenities. The local authority may, in its lack of wisdom, decide not to do anything about the matter. Upon whom does the obligation rest? The legal

    1463
    obligation is upon the landlord, but there is no incentive for him, after enfranchisement, to maintain these services.
    I would have thought that the right hon. Gentleman could give way on this point. He can amend the Clause in another place if necessary. It would give a good deal of reassurance to those who are concerned to make this a good Measure if the new Clause were accepted by the Minister.
    Mr. Hale: I do not want to make purely verbal points, but does the hon. Gentleman realise that, in every 999-year lease in Oldham, this would enable the authority to be compelled to take over every drain—and just the drains—that serves two adjoining houses? I doubt whether one house in Oldham is not confronted with that problem and the local authority would have to be responsible for all such drains.
    5.30 p.m.
    Mr. Hooson: I doubt whether any hon. Member is as great an authority on the 999-year leases in Oldham as the hon. Gentleman.
    Mr. William Hamling: And on many other things.
    Mr. Hooson: I concede that.
    I listened to the hon. Gentleman's points with great interest. I do not suggest that the new Clause is ideal, but it deals with a glaring gap in the Bill. The Minister of State should accept it now and amend it in another place.
    Mr. A. P. Costain: The right hon. Gentleman said that he was in a dilemma because he had not thought enough before Report, but would do so after. He would not be in this dilemma if he had thought about it before. I was impressed by the speech of my hon. Friend the Member for Crosby (Mr. Graham Page). I have not the expert knowledge of the hon. Member for Oldham, West (Mr. Hale) of leasehold estates, but I have considerable knowledge of property purchased by owner-occupiers where there is some doubt who owns the drains, roads and communal services.
    The new Clause is serving the Bill and not cluttering it up. The Minister of State does not realise how, once an estate
    1464
    is broken up, these things, which have happened automatically in the past, cease to happen because the estate has been fragmented. He should accept the Clause. If he needs to give it further thought, he should at least show his desire to help the Bill by accepting it at this stage.
    Mr. Willey: I am not anxious to do that, for two reasons—apart from the difficulty of the present drafting of the Clause mentioned by the Member for Oldham, West (Mr. Hale). The first reason is that the House wishes to give compulsory powers against a local authority, which we should consider further. The second is need. This was raised with me only recently. The well-managed estates have been very active but this was the point which they took when the Cambridge deputation raised this with me.
    When I said that I was unenthusiastic, it was because one does not know whether they feel that this is a need which ought to be met. One estate which was mentioned when I met the deputation was Sunningdale, but it was at once said that if certain Amendments were accepted they would not be so concerned about the matter. I want to establish that those responsible for the estates are satisfied that this would meet the need and we should also see that local authorities would find it acceptable.
    Otherwise, there would be the difficulty of maintenance, which is what we are concerned about. We do not want to prejudice that by something which is regarded as unnecessary or as not the most effective and practical solution.
    Mr. Graham Page: I do not want to prolong the debate, particularly as the right hon. Gentleman has given an undertaking. I have no objection to his thinking about this again—although he ought to have thought about it before—first, because the White Paper gave no undertaking about this, and, second, because the Clause is built on a legal fiction. It is none the worse for that, and I think that it would be effective, but it would have to be looked at again. Other matters flow from this and need decision.
    Nevertheless, the Clause should be accepted and, if necessary, amended later. After all, what will happen to the common parks if the estates are broken up? This is not a question only of university

    1465
    estates—this was put to me before the Minister had discussed it with the university estates—but particularly of the private roads on these estates. What will happen to them? Some solution must be found for the tenant, the landlord and the public. The Government have put forward none yet except to see whether it can be done by agreement.
    We have at least had a shot at a solution and the Government could have responded better with their own positive solution. However, on the right hon. Gentleman's undertaking I think that we shall see something later. It is very disappointing that the Government should not bring forward a positive proposal on a matter which they agree needs solution, and that we should have to think up a solution which, so as not to clutter up ten pages of the Notice Paper, must be based on a legal fiction. I still think it works and I wish that the right hon. Gentleman had accepted it.
    Mr. John Peyton: The right hon. Gentleman said that the new Clause would clutter up the Bill. But, as my hon. Friend the Member for Poole (Mr. Murton) said, it is not distinguished for its elegance as it is. When the Minister says that, he is like a man energetically defending against insult the character of an incorrigible rogue. This is late in the day; it is a classic case of shutting the stable door after every horse has gone, because the Bill is a clutter.
    We are told that one does not know that this need ought to be met. The Bill, unfortunately, has seen the light of day for a long time, and by now the Minister should have had every opportunity to study its inadequacies and my hon. and right hon. Friends have deployed their skill to pointing out some. I was depressed to be told at this late hour that the Government do not know that this is a need which ought to be met.
    No one can complain that the right hon. Gentleman's Department is undermanned. Counting the Parliamentary Private Secretaries, as one must, there are eight of them. I wish that they would hire themselves an eight and go for a row on the river. I should be prepared to cox the boat, although I do not say that it would come back, but I should at least have served a useful purpose in getting rid of such a gang. I
    1466
    would not have spoken on this at all had I not been exceptionally depressed by the low standard of the Minister's argument.
    Mr. Willey: I might wish later that the hon. Member for Yeovil (Mr. Peyton) were sculling on the river. On the question of need, we have said several times that we were willing to look again at Clause 19 to meet anything which the well-managed estates thought should be met. I am not complaining, but one of those affected has raised this point with us late in the day, and the hon. Gentleman did the same this afternoon.
    The other point, which is important, is that if one is looking to the result one does not necessarily get the right result by compulsion. I think that we too often rely on compulsion. If what we want is the maintenance of the amenities of the estate by the local authorities it may be better to do it other than by compulsion, as in the case of Hampstead Garden Suburb, where it has been done by agreement.
    Sir H. Lucas-Tooth: If the Minister's words mean that he is ready to accept Amendment No. 63, it will do much to reassure us.
    Mr. Hamling: The hon. Member is kidding himself.
    Mr. Clegg: I am sorry that the right hon. Gentleman has not seen fit to accept the Amendment. I doubt whether he will get anywhere by agreement—there must be a reserve power such as that in the Clause to make it effective.
    However, in view of the Minister's undertaking, I beg to ask leave to withdraw the new Clause.
    Motion and Clause, by leave, withdrawn.

    New Clause No. 7.—(CHARITIES.)
    Where a certificate under section 19 of this Act is given by the Minister in favour of a landlord which is an institution, organisation or trust establishment for charitable purposes no person shall be entitled under Part 1 of this Act to acquire the freehold or an extended lease of the property of that landlord.—[Mr. Arthur Jones.]
    Brought up, and read the First time.
    Mr. Arthur Jones: I beg to move, That the Clause be read a Second time.

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    The Clause represents a special plea for charities. I declare my interest as a nominee of the Harpur Charity which, among other things, has endowments for the benefit of the major schools in Bedford, almshouses and other things. There is widespread concern in the world of charities lest they should be unable to continue to make the important contribution they have made, in some cases, over centuries. Here there is the beginning in some cases of the likely break up of the estates for which these charities are responsible, and from which flow substantial benefits in one form and another.
    This is a matter of great concern to them. When the charities were originally formed the assets may have consisted of fields near London—Holborn is the borough in which the estates of the Bedford charity stand. Down the years those estates have, I hope, been wisely administered for a wide variety of beneficiaries, and have made very substantial contributions to education. I wonder whether this was the subject which those who represent the Cambridge colleges put to the right hon. Gentleman—perhaps not. If we stand in the way of the original deeds of covenant, and the intentions of the founders, it will lead to the deprivation of those who, down the centuries, have benefitted from charities. There are substantial grounds for the special pleading I make.
    When this matter was discussed in Committee I was not able to be present, but I hope that it may be possible to make some special provisions for charities. This is not public money, in the true sense, but charitable money, which is often put to far better use than public money, dependent on the terms of the trust deeds, and so on. To see the beginning of the end of some of our substantial charities would be regrettable.
    5.45 p.m.
    Mr. Wiley: As the hon. Member for Northants, South (Mr. Arthur Jones) has said, a very powerful case was put in Committee for this suggested provision, though not in the same form. The Clause is open to the objection that there is no real reason for the exception that is sought to be made. First of all, there is no precedent—these charities were not exempt in the 1954 legislation, although the effect of that legislation was very
    1468
    much to depreciate the value of the freehold interest. It also affected the way in which charities felt it right and proper to deal with the leases, which was unfortunate.
    The second objection to the Clause is that one cannot justify this indefensible distinction between leaseholders which would result if it were accepted. One cannot differentiate, for example, between the leaseholders of the Hampstead Garden Suburb and the leaseholders of the Dulwich Estate. The cardinal difficulty is that one cannot distinguish between leaseholders according to the character of their freeholders. That is why, hitherto, it has not been possible to exempt charities.
    Mr. Peyton: I rise only to say how glorious it is to see the light dawning on the Minister's face as he realises what an appalling Bill it is.
    Mr. Hamling: It is a very good Bill.
    Mr. Graham Page: It certainly is not a very good Bill when the result is to deprive charities of funds which they have used for purposes which, in many cases, the taxpayer will have to finance in future.
    This case was deployed in great detail in Committee, and I shall not repeat that detail but will put the principle. We cannot look at this from a point of view of landlord and tenant in the case of charities, and I agree with the right hon. Gentleman when he asks how in that respect we can distinguish reasonably between the landowner who is a charity and the landowner who is a private individual. I do not think one can.
    The distinction is that the Bill takes away certain funds of the landlord. It may be quite right, according to the right hon. Gentleman, that the Bill should take away the assets of a private individual, but when it takes away the assets of a charity and fails to give proper compensation for taking them, it is taking money that would otherwise be devoted to education, educational research or even to medical aspects. We have referred again and again to the Dulwich Estate which, through its funds, finances half a dozen or so schools or charities, and which will, if its capital is taken, as it will be under the Bill, be unable to do that in the future.

    1469
    The tragedy of the Bill is that it does not make distinctions in these cases. It would not have needed to make distinctions if it had provided for proper compensation for the landlord's interest, but as it does not so provide it should make distinctions in favour of those landlords who use their funds for charitable purposes.
    Mr. Hooson: The hon. Member for Crosby (Mr. Graham Page) has provoked me to speak, because there is no reason in principle for a distinction between the leaseholder who holds the lease from a charity and the leaseholder who holds it from any other concern. The fact that the charity has performed good work is no reason why it should not do so in future. Its assets are the greater, in the considered view of the House, than they would have been if we had had an equitable system of land holding from the beginning. It is because of the leasehold system that charities, like other land owners, have had the value of their property enhanced. It would be quite inequitable to draw distinctions in the Bill between lease-holders who hold their leases from charities and those who hold their land from other landlords. I therefore hope that the Minister will stand firm.
    Mr. Arthur Jones: In speaking of the balance of interests of the lessee and the leaseholder the hon. and learned Member for Montgomery (Mr. Hooson) did not address himself to the question of fairness to the freeholders, and it is with the equitable treatment of the freehold, the charity in this case, that we are concerned. I understood the hon. and learned Member's remarks to lay emphasis on the treatment of the lessee.
    Mr. Hooson: I think the compensation terms are fair.
    Mr. Arthur Jones: I have no comment to make on that, except that I am in complete disagreement. I am surprised to hear the hon. and learned Member say that. I think there is special pleading on his part as well.
    Mr. Hamling: On both sides.
    Mr. Arthur Jones: I have pleaded on my side for charitable purposes. I accept that the matter was discussed fully in
    1470
    Committee and I have no option but to beg to ask leave to withdraw the Motion.
    Motion and Clause, by leave, withdrawn.

    Clause 1.— (TENANTS ENTITLED TO ENFRANCHISEMENT OR EXTENSION.)
    Mr. Clegg: I beg to move Amendment No. 1, in page 1, line 9, after 'house', to insert:
    'other than the tenant of a leasehold house holding under a premium lease as defined in section 37 of this Act'.
    Mr. Deputy Speaker: With this Amendment we may discuss the following Amendments: No. 17, in Clause 4, page 5, line 27, at end insert:
    (c) if the tenancy was granted partly in consideration of the payment of a sum other than the rent reserved under the tenancy in respect of the property, there shall be deemed to be included in the rent payable under the tenancy in respect of the property one fifteenth of such sum;
    No. 32, in Clause 9, page 12, line 25, after 'and', insert
    'other than in premium leases (as defined in section 37 of this Act) as';
    No. 41, in Clause 14, page 21, line 33, after 'house', insert
    'other than the tenant of a leasehold house holding under a premium lease as defined in section 37 of this Act';
    No. 77, in Clause 37, page 57, line 2, at end insert—
    (h) 'premium lease' shall mean a tenancy under the terms of which the payment of a premium was required;
    No. 78, in line 2, at end insert—
    (i) 'Premium' shall mean the payment of a capital sum on the grant of a tenancy not greater than the capitalised sum (calculated in accordance with Schedule 8 to this Act) of the difference between the actual rent reserved by the tenancy and the estimated rack rent of the premises on the day of the grant of the tenancy;
    and No. 80, new Schedule—(Calculation of capital sum)—
    For the purpose of calculating the capitalised sum referred to in section 37(1)(i) the basis of reference shall be Parry's Valuation Tables allowing interest on capital of seven per cent. and for the redemption of capital at two-and-a-half per cent.
    Mr. Clegg: This Amendment and the Amendments which we are considering with it are designed to deal with a problem which we discussed in Committee and

    1471
    which we were quite unable to solve. It is the problem of the premium lease. In this Bill, as has been frequently stressed by the Minister, there are terms of compensation based on the principle that the landlord owns the land and the tenant owns the bricks and mortar on the land. Although I disagree with that principle in general, I wish to accept it for the purpose of the argument on premium leases.
    In these Amendments we are concerned with the case where the tenant has neither built a house on the land himself or made any payment to the landlord, or someone else who may have built a house, for the bricks and mortar. That is the sort of problem which arises where the landlord, instead of accepting the normal rack rent for the premises, has accepted payment of a capital sum as premium with a low rent over a term of years.
    I shall give an actual example which ilustrates more clearly the sort of problem with which we are faced. I have information about a small cottage-type property in Kensington with a present-day rentable value of £286. In 1939 it was let at 12s. 9d. a week inclusive, and during the war the rent rose to £80 a year. Later the property was modernised and improved and in 1958 it became available for reletting. The landlord offered the prospective tenant either a full repairing lease for seven years at a market rent of £225 a year, or a lease for 31 years at a rental of £80 a year on payment of a premium of £1,625. This premium was calculated on a 7 per cent. basis giving just over one year's rental of £145.
    The tenant chose the premium with the low rental. It seems clear that in the premium which the tenant paid there was no question of his purchasing the bricks and mortar. He was taking another version of the market rent of the property. Applying the Minister's principles of compensation, that the landlord owns only the land and the tenant the bricks and mortar, it seems unfair in a case such as this that the tenant should have the right to enfranchisement. In this Amendment there are two ways of dealing with the problem. I apologise if there are technical defects in the drafting, but if I have managed to convince the Minister of the principle no doubt at a later stage he can put forward Amendments accepting the principle.
    1472
    The first method is set out in all the Amendments with the exception of Amendment No. 17. It seeks to distinguish between the case of a premium which in reality was a payment for the bricks and mortar and the case where there was a premium and a low rent which together made up a rack rent on the day when the lease was granted. These Amendments show what the premium would be.
    The premium is then added to the capitalised sum of the actual rent, that is, the low rent, and if this does not exceed the capitalised rack rent the house should be excluded from the provisions of the Bill. What we have been trying to do by this Amendment, because we thought that in Committee this worried the Minister, is to make sure that enfranchisement is refused only in a case where it is clear beyond any doubt that there was no actual purchase by the tenant of the bricks and mortar and certainly that he did not build the house.
    The second method is set out in Amendment No. 17. It is a somewhat simpler measure whereby we try to get the same result by adding to the rent reserve a one-fifteenth of the rent by premium. This would increase to about 7 per cent. We are not particularly wedded to this figure. It could go up to a twentieth and still perhaps be fair. In Committee my hon. Friend the Member for Basingstoke (Mr. David Mitchell) raised the problem of premium leases and the Minister was good enough to write to him expressing his views on the matter. I understand that the right hon. Gentleman does not think this Amendment necessary because the premium lease would breach the principle of the tenant owning the bricks and mortar. I think we have shown clearly that this is not so and that there can be cases where there is no question of the bricks and mortar principle arising.
    I refer the right hon. Gentleman to a very interesting article in The Times today by the hon. and learned Member for Dulwich (Mr. S. C. Silkin). I am glad to see him present. The general purpose of this most interesting and thoughtful article I take to be that the Minister should take the Bill back and reconsider it. The article says:
    "Four main arguments are levelled against this principle. First, it is said that the Bill's provisions do not guarantee that the principle

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    applies only to houses built at the lessee's expense. It is true that as at present drafted the Bill may let in some marginal cases which are outside this principle. The Minister should certainly reconsider the definition."
    I hope that if he insists on driving the Bill through the House and sending it to another place, the Minister will think again about the question of premium leases. I am sure that unless he does something on this he will give the right to enfranchisement to tenants whom he does not think should have it.
    Mr. Skeffington: We come once more to a subject which caused a good many discussions in Committee and which has been referred to under the heading of the premium lease. I congratulate the hon. Member for North Fylde (Mr. Clegg) on the series of Amendments in which he has sought very ingeniously to achieve the purpose of excluding this category of lease from the benefits—I stress the benefits—of the Bill for a very large number of leaseholders.
    I shall not take any technical points about the drafting of the Amendment, but there are a number of practical points which if we acceded to the principle—and we do not—would prevent it achieving the purpose the hon. Member has in mind.
    6.0 p.m.
    I must put on record, first, that there is a distinct difference in principle between the two sides of the House. Within the definitions in the Bill of what are long leases and low rent, we must include this category of lease, because, having considered the matter very carefully, we have come to the conclusion, as did the Minority Report of the Committee on Leaseholds, that in the majority of instances the characteristics, the unfairness, and the inequity in the leasehold system are generally as manifest in this type of lease as they are in any other.
    If one examines, as I have, many of the cases where a lump sum was paid, which may be in association with all sorts of other conditions in the lease, one generally finds that in the majority of cases the lump sum is equal to the value of the house. This is so whether it is calculated in accordance with the suggestion made in Amendment No. 78 or by any other means. The lump sum or the premium calculated on a practical
    1474
    actuarial basis shows very little difference whether it is charged on a perpetual lease, on a 99-year lease, or on a 50-year lease. I am not saying that on very short leases this is always true. Certainly in a time of shortage of accommodation, in the majority and overwhelming number of cases the premium or lump sum is indeed equal to, and in some cases in excess of, the value of the house. Therefore, in the Government's view, in these circumstances it would be wrong to exclude this type of leaseholder from the benefits of the Bill. This is the point of principle which I must maintain.
    I must point out some difficulties, though not in connection with the drafting. Indeed, I congratulate the hon. Gentleman on his drafting of this series of Amendments. The first difficulty is that in Amendment No. 78 the hon. Gentleman does not say on what basis the rack rent is to be calculated. Clearly, it should be estimated on the assumption that it is a repairing lease with obligations which are identical with the lease in question. If that is so, it makes a very considerable difference to the actual value of the rent which is being paid.
    Secondly, an effort would have to be made to estimate what the rack rent would have been at the time of granting the lease. I have taken some advice on this. It is true that with shorter leases this is no doubt recorded, and there would not be any great difficulty. With older leases, this is bound to be very difficult and even controversial.
    Thirdly, the capitalisation of the difference between the rack rent and the actual rent should be at interest rates ruling at the time of the grant of the lease, not at 1967 rates, which might be extremely unfair, although that is the proposition in the hon. Gentleman's proposed new Schedule.
    Fourthly, one of the characteristics of leases—this is held to be one of their great advantages; I think that it is an advantage which is very much overestimated and which leaves much uncertainty —is their infinite character. To get the capitalisation of the difference between the rack rent and the actual rent and the premium, unless one knows what burdens were to be shared by the tenant and the landlord, one could arrive at an extremely inequitable result. As I said in answer

    1475
    to a proposition made by the hon. Member for Hendon, South (Sir H. Lucas-Tooth), in some cases one would be unfair to the landlord. In a greater number of cases, because of the repairing obligations, the unfairness would be on the tenant, because there is no way of bringing these calculations in a realistic way into the operation of this series of Amendments. There may be other burdens which the tenant has undertaken in relation to building or extensions as well as repairs.
    Consequently, even if we accepted the principle of excluding premium leases, which we do not, this series of Amendments would not achieve the object in a practical way. It would be very difficult to arrive at a conclusion. If one did, it would be unfair to one party or the other. For all these reasons, much as we admire the hon. Gentleman's ingenuity, we cannot accept the principle and we must say that it is impractical as well.
    Mr. S. C. Silkin: I rise because the hon. Member for North Fylde (Mr. Clegg) was good enough to refer to certain comments I made in Committee and to seek support for his Amendments in those comments. He also referred to an article which appeared in a newspaper this morning which, I must confess, I, too, found very interesting and with whose contents I generally found myself in sympathy. I did not find, either in that article or in what I said in Committee, any real support for the Amendments.
    As I understand it, the principle behind this series of Amendments is that, where a lessee undertakes in a lease to pay a ground rent and, in addition, undertakes to pay his lessor a capital sum which represents the difference between the occupation value and the land value of the premises, in such case the premises are to be excluded and the lease is to be excluded from the benefits of the Bill.
    If that is right, there cannot be any ground for supporting that principle, because there cannot by any difference between the lessee who pays a lessor the capital sum, which is in effect the value of a house which is being built, and a lessee who pays a private builder, or a lessee who pays somebody who has erected a house and who then sells the leasehold interest at the cost of the house to the lessee. Therefore, it would make
    1476
    a most unreal distinction if, simply because this capital sum were transferred direct from the lessee to the lessor, rather than to some intermediary person, the benefits of the Bill were removed from the lessee in those cases.
    The sort of case I had in mind when I made my remarks in Committee was a totally different type of case. The type of case I had in mind was the grant of a lease for a period of years, certainly in excess of 21 so that it would be caught by the Bill, but at a genuine occupation rent at the time, which in the course of years has become something less than two-thirds of the modern rateable value, where in fact the lessee did not contribute at all to the cost of the building, the whole of which was paid for by the lessor or by his predecessors in title. That is an entirely different case. I have endeavoured to deal with that matter in Amendment No. 108. I tried to deal with it in Committee by an Amendment which was applauded for its simplicity but criticised on almost every other ground. I accept the criticisms then made, and I have now sought a different way of doing it, which, I hope, we shall discuss in due course.
    Mr. Allason: Very skilfully, the Parliamentary Secretary related this problem to very long leases, whereas the real issue is seen on shorter leases, as the hon. and learned Member for Dulwich (Mr. S. C. Silkin) has pointed out. It is difficult to relate the matter to the beginning of a 99-year lease. There is very little difference in value between a freehold and a 99-year lease, just a few £s, which can be said to be negligible. But this is not the point. At the beginning of a 99-year lease, when the landlord provides a house and the tenant, rather than buying the freehold of the house, deliberately accepts a 99-year lease at a low ground rent, paying a premium which is probably substantially less than the freehold value, this is a bargain clearly drawn between the parties on the understanding that the tenant will surrender the lease at the end of 99 years and the landlord will recover the premises. This is an entirely different circumstance from what the Minister is now achieving under the Bill.
    The problem is seen to be much greater in relation to shorter leases. On a shorter lease, the premium is something paid to

    1477
    the landlord as a lump sum in lieu of payment of a rack rent for the period of the lease granted, say, 25 years. This is a convenience to both landlord and tenant, a lump sum being paid rather than a considerable sum being paid in rent each year out of taxed income. The landlord has provided the house, and the tenant acquires it merely by paying a lump sum in lieu of rent.
    The Parliamentary Secretary said that the premium was roughly equal to the value of the house, but he then qualified that by saying "except in very short leases". I take it that by that he meant very short long leases, that is, about 25 years. But this is the essence of the matter. If the Government can make a change here which will leave out the very long leases, we might be nearer to agreement. I agree that it would be difficult to draft such a provision, but the Parliamentary Secretary has admitted that, in the cases of leases under 50 years, there is an injustice here to the landlord in terms of compensation, and it is that injustice which the Amendment would put right.
    Amendment negatived.
    6.15 p.m.
    Mr. Graham Page: I beg to move Amendment No. 2, in page 1, line 10, after 'residence', to insert 'at the relevant time'.
    This is a simple point of drafting. In Committee, we added to this subsection the provision that a tenant might qualify for enfranchisement if he resided in the house not only for the last five years before giving his notice but also if he had resided in the house for five years during the last 10 years. It needs no great mathematical brain to realise that, unless we make the matter clear, there might be two tenants entitled to enfranchise. Each might have resided there for exactly five years in the last 10. This may sound incredible, but it might easily be a matter carefully worked in order to carry out an enfranchisement.
    The problem could have been solved, perhaps, by saying "more than five years", but I cannot refer to that Amendment because we are not discussing it. It can be solved by saying that the tenant who gives notice must be in residence at the relevant time, that is, at the moment
    1478
    of giving notice, and he must, therefore, be the last five-year man, if I may put it like that. There could not then be two people entitled to enfranchise.
    Mr. Willey: The hon. Gentleman the Member for Crosby (Mr. Graham Page) has expressed himself more moderately than he did on another occasion. Because of his previous expression of opinion, I thought it wise to take the best advice available. That advice is to the effect that the Amendment is otiose. I had better stick to my brief. It says that the Amendment is otiose because Clause 1(1)(b) lays down that the tenant has this right where he has at the relevant time been occupying the house as his residence for the last five years, and these words "has been occupying" imply that he is still occupying. For these reasons, I am advised not to accept the Amendment.
    Mr. Graham Page: For the life of me. I cannot see how "has been occupying" means that he is still occupying. However, I shall not press the matter to a Division. On the Minister's assurance, I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    Mr. Wiley: I beg to move Amendment No. 3, in page 1, line 10, to leave out 'for fair compensation' and to insert 'on fair terms'.
    Mr. Speaker: With this Amendment we can discuss Amendment No. 31, in Clause 9, page 12, to leave out lines 24 to 28 and to insert:
    (a) (i) that the vendor is selling for an estate in fee simple at a price to be assessed in accordance with section 5 of the Land Compensation Act 1961,
    (ii) that that estate is subject to the tenancy and to the rights of a tenant of the house and premises under Part I of the Landlord and Tenant Act 1954 but not to require an extended lease under this Act,
    (iii) that the vendor is selling an estate in respect of which there is a right of development or redevelopment (with other property if the vendor owns any other property capable of development or redevelopment with the house and premises the subect of the tenancy) for any of the purposes for which planning consent might reasonably be exepected to be granted, and
    (iv) that the number of persons seeking to purchase similar houses and premises in the locality is not substantially greater than the number of such houses and premises in the locality which are available for purchase.
    Mr. Graham Page: On a point of order, Mr. Speaker. First, will you be good enough to say whether you will allow a Division on Amendment No. 31 when we reach it? Second, I invite you to say that we may discuss with Amendment No. 3 Amendment No. 33 also, in Clause 9, page 12, line 28, at the end to insert:
    'but that it contained a provision that either at the date twenty-five years before the original term date or at the relevant time (whichever is the later) the rent would be the letting value of the site ascertained in accordance with section 15(2)(a)'.
    Amendment No. 33 is closely connected with the subject of both Amendment No. 3 and Amendment No. 31.
    Mr. Speaker: That seems to be a quid pro quo, if the House has no objection. Very well. We will take Amendments Nos. 31 and 33 with Amendment No. 3, and, as the hon. Gentleman has asked for it, I am prepared to allow a Division on Amendment No. 31.
    Mr. Willey: Amendment No. 3 is a drafting Amendment. I accepted an Amendment proposed by the hon. Member for Crosby (Mr. Graham Page) in Standing Committee, and I said that we might have to revise the words accordingly. This I am now doing, on advice.
    Mr. Peyton: This drafting Amendment, as the Minister cunningly calls it, is the beginning of the very tricky part of the Bill. We have always objected to the Bill on the ground that the compensation is so unfair that acquisition of the property in many cases amounts to confiscation. It was for this reason that I was sorry that the Opposition did not vote against the Bill straight. In saying that, I do not suggest for a moment that there are not severe problems to be met in various parts of the country. But I believe it to be fundamentally wrong that in a free society one man's property should be taken away without adequate compensation and given to another, particularly when we find that the only reason is that the latter is more numerous.
    I do not understand the right hon. Gentleman's reasoning here. I understand that the Government have throughout sustained the argument that their proposals make fair and adequate compensation possible. The fact that they wish to alter these words seems to me
    1480
    to suggest a guilty conscience. The right hon. Gentleman naively suggests that he is not covering up a guilty conscience but is just tidying up the drafting. It is at this sort of moment that one feels that his right hon. Friend the Minister of Housing and Local Government is very prudent and well-advised. He appeared on the Front Bench only for a moment during an uncontentious episode earlier in the afternoon. How sensible and wise he is to stay away now, and leave his right hon. Friend to bear the burden of the argument.
    Mr. Speaker: Order. We must discuss the Amendment before us. The hon. Gentleman sees it on the Notice Paper.
    Mr. Peyton: My generosity led me to congratulate the Minister on staying away from this embarrassing argument. But I shall not press the point.
    I believe it to be wholly wrong—and I say so with conviction—that the Minister should suggest that this is only a drafting Amendment. Fair compensation is not allowed by the Bill, and I imagine that that is the reason—it is the only real reason that I can see—for the Minister objecting to those words being in the Bill and to want to go back to the vaguer terminology of "fair terms".
    I do not believe that the argument need be prosecuted at great length. The right hon. Gentleman is showing signs of feeling guilty of the charge we have made all along of gross unfairness amounting to confiscation and an action which should never be permitted in a free society because it is wholly inimical to freedom. I very much hope that my hon. Friend the Member for Crosby (Mr. Graham Page), who has conducted the case against the Bill with such skill throughout, will echo the condemnation which I have tried most inadequately to utter, and that he will advise all hon. Members on this side of the House to go into the Division Lobby without hesitation.
    Mr. Graham Page: I can assure my hon. Friend that that is exactly what I shall do.
    I think that the right hon. Gentleman's statement that this was a drafting Amendment was the saying of the week, month or even the year. He says that it is a drafting Amendment, when he admits that compensation is not fair! He wants to remove from the Bill the statement

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    that compensation under it is fair. I know that the right hon. Gentleman is patently honest, and I agree that if the Bill remains as it is I would support the Amendment. But I hope that the Bill will not remain as it is. As it is, the compensation is not fair, even within the principle which the Government accept of the tenant owning the bricks and mortar and the landlord owning the land. It is not fair even on that principle because it considers only what is being taken from the landlord, and not the asset which is being acquired by the tenant.
    What happens when the tenant enfranchises? He gets the freehold of the land and the bricks and mortar with it. He is put in the position, if he so wishes, to let that property on a further long lease and at a modem ground rent. The property may originally have been let on a long lease many years ago for a very small ground rent. On enfranchisement, if the tenant acquires the freehold he acquires the right to let at the modern rent. This is recognised in another part of the Bill, and where the tenant takes a 50-year lease instead of taking the freehold it is subject to rent revision clauses every 25 years.
    In an effort to make the Government's principles fair within themselves, we put down Amendment No. 33. We are looking to the point that the tenant is acquiring something by taking the freehold; we are not looking to the value of the asset which the landlord is losing so much as the value of the asset the tenant acquires. We disregard altogether the value of the bricks and mortar, as the Government desire, and treat only the land. But the tenant is getting that land so that he can relet at a modern ground rent, and the difference between the old and modern ground rent is recognised in other Clauses. In order to reach that modern ground rent we should assume that there is a rent revision clause in the existing long lease taking effect about 25 years before its end or at the date when he gives notice to enfranchise and take the freehold. This seems to me a perfectly fair formula on which compensation should be granted. It values the asset which goes to the tenant on the basis of the Government's principles. Without such a formula, the compensation is unfair, even on the Government's principles.
    But we go much further than that. We have said throughout the debates on
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    the Bill that the property which is transferred to the tenant should be paid for at its proper market value, and in Amendment No. 31 we have tried to spell out that market value fairly. The formula in Amendment No. 31 has four parts. The first is that the assumption shall be that the vendor is selling for an estate in fee simple and on the ordinary basis of compensation under the Land Compensation Act, 1961. That means that he is selling subject to the existing long lease at the market value for his freehold interest. That is the first figure one reaches—the normal compensation which has always been recognised in our law and by Parliament as being proper when we take property for the benefit of the community.
    If it is right when we are taking property for the benefit of the community, surely it is right when we are taking it for the benefit of one individual that that compensation should apply? But it must be modified by the other three points in Amendment No. 31. First, we must recognise that under the existing law the tenant on a long lease has a right to remain in possession at the end of it as a statutory tenant, under the Act of 1954, if he is in residence at the end of that long lease. That is recognised, and the value of the property would accordingly be reduced under the second part of the formula set out in Amendment No. 31.
    6.30 p.m.
    Sub-paragraph (iii) deals with the development value of the property. I am still in doubt as to whether the Bill includes development value in the compensation to be given to the landlord. The right hon. Gentleman gave us a number of conclusions on this point during the Committee stage. He assured us that the landlord would be getting development value in the money paid to him for his interest. I would like to ensure that this is so by setting it out in words and have done so in sub-paragraph (iii) of Amendment 31. Will the right hon. Gentleman deal with this point again? It may have been explained in Committee but there are people outside who are still in great doubt about it and if the Government can give any help on that alone this debate will have been useful.
    Sub-paragraph (iv) of Amendment No. 31 is to the effect that, if the landlord is

    1483
    entitled to the present market value of his estate, it may well be said that he is getting in that payment a certain value for the scarcity of dwellings at the present time. This is a point which we recognised in the Rent Act, 1965, when dealing with tenanted property. Of course there is a scarcity value in the sale and purchase of freeholds. Therefore, to be fair to the tenant I have added sub-paragraph (iv), which says:
    "that the number of persons seeking to purchase similar houses and premises in the locality is not substantially greater than the number of such houses and premises in the locality which are available for purchase."
    That should be taken into account in ascertaining the figure of compensation for the vendor. The House should recognise the phrasing. It comes from the Rent Act, 1965, and is applied to freeholds rather than to leaseholds, as in the Rent Act. It takes into account scarcity value.
    Mr. S. C. Silkin: Can the hon. Gentleman say whether that provision to eliminate scarcity is intended to apply only additionally to the occupation value of the standing house or in addition to the scarcity element in development or redevelopment value derived from Schedule 2?
    Mr. Graham Page: In drafting the Amendment, I was tempted to include the word "estate" in sub-paragraph (iv), which might have answered the point put by the hon. and learned Gentleman. But I feared that we should be getting into too many legal discussions if I did so. I merely want to say that scarcity value should be disregarded, and disregarded in the case of site and therefore in the development value as well. There may be a substantial development value even if one discounts scarcity. There is still the value of the development of the plot. But this would be unfair to the right, which we recognise, of the resident tenant in his possession of the house. He is residing there at present and therefore it should not be assumed that the place is vacant and that it comes into the market at the value of other vacant property.
    Sir Harmar Nicholls: These Amendments are perhaps the most important we have to consider. Can my hon. Friend give an example? One fol-
    1484
    lows the argument, which is a typically Committee argument, but my hon. Friend has said that people outside do not understand it. They are more likely to do so if he could give hypothetical cases and let them be disproved, if possible, by the right hon. Gentleman.
    Mr. Graham Page: I would like to be able to give a number of hypothetical cases, but so much depends in any example on the length of the lease and the various permutations one has to apply. I will put it as simply as I can.
    Amendment No. 31 asks for market value for a landlord's interest which is to go to the tenant. It asks for that market value having regard to certain things which should be taken into account. Normally, a tenant will have a right to continue in occupation under a statutory tenancy, and the Amendment takes into account that he should not be asked to pay scarcity value because he is already the sitting tenant. I am sure that this is really fair to both parties. It is the basis on which we would have brought forward our proposals for leasehold enfranchisement. We have said throughout that we cannot support the Bill while it fails to compensate properly for the interest of the landlord.
    Mr. Evan Luard: The hon. Gentleman has explained in great detail what he regards as the defects of the proposal for compensation in the Bill and he has explained the Oppositon's alternative proposal. Is it the intention of the Conservative Party, if it is returned to power, to introduce legislation implementing the treatment of compensation on a basis similar to the one he is now describing?
    Mr. Graham Page: It depends on what occurs in the meantime. If a later Amendment on the Order Paper were accepted to postpone the effect of the Bill for two years, I would answer "yes". But I am not going to be as wild as the party opposite was in the 1964 election, when it said that it would repeal the Rent Act, 1957. In office, the Government only repealed one paragraph of Schedule 12 of the Act.
    Mr. Speaker: Order. The hon. Member for Crosby (Mr. Graham Page) usually keeps strictly to his Amendments. He must now do so.
    Mr. Graham Page: I will do so, Mr. Speaker. I was tempted to stray off them. I need not labour the point further. Our Amendments provide market value for the landlord's interest. I have endeavoured to show that, even on the basis on which the Government have put forward the Bill, the compensation is not fair and that they should provide for such a formula as is contained in Amendment No. 31.
    Mr. Wiley: Amendment No. 3 is a drafting Amendment because, as the hon. Member for Crosby (Mr. Graham Page) will recall, he moved the insertion of the words "for fair compensation" in Committee and I am now substituting the words "on fair terms" for drafting reasons. Here, there might be some confusion if we referred to compensation. The Committee was agreed that the word "fair" should be there.
    On Amendments No. 31 and 33, the Opposition must make their choice because the effect of Amendment No. 31 would be that the price would be more than the market value. This must be so if the ground rent is increased. They are asking us to pay market value or more than market value.
    I think that Amendment No. 31 will not be moved when the time comes because it has a second disadvantage in that it would discourage enfranchisement until the very end of the lease, and I am sure that neither side would wish to persuade the leaseholder to delay enfranchisement until the lease was running out.
    I need not deploy further the argument about market value. It ran throughout our proceedings in Committee. We believe that market value is not a fair price. We do not believe that it is fair that the leaseholder should pay twice for the building. This is what divides us.
    What we provide—and this distinction has been brought out by taking these Amendments together—is that, at the expiry of the current lease, the leaseholder should have the advantage of the extension at a modern ground rent. It is upon this that the Opposition should focus their attention. In Committee, the hon. Gentleman, to his credit, faced the dilemma and brought out the difference between the two sides most clearly, because he said that the extension should
    1486
    not only be on a modern ground rent but at a premium as well. One has only to think for a moment to realise that this means that the premium is compensation for something that the leaseholder is not obtaining.
    I can do no more than say that this is a clear distinction which has divided the two sides since we began our discussions, not on the White Paper—there was no Division on the White Paper—but on the Bill which implements the White Paper. We say that the price for the freehold should not be on present market values, but the fair value, including the development value, of the land alone.
    Mr. Maddan: My hon. Friend particularly pressed the Minister to give us an assurance about development value and he referred to proceedings in Committee. I think it is Clause 19, Clause 17 and a Schedule which have to be read together.
    Mr. Willey: The hon. Gentleman will find the reference in column 382 prefaced by the line,
    "MR. MADDAN: Where? "—[OFFICIAL REPORT, Standing Committee B, 25th April, 1967; c. 382.]
    Mr. Maddan: I am not put off by that. There are various sorts of development values. There is the natural increment in the land which comes from development in the whole area. It is possible under these terms that the landlord gets some recognition of that increment taking place over time. What he will not get under the Bill as it is at present drafted, including the Amendment, is the extra or second type of development value which comes from a change of user in the land.
    I will give an example of a lease which has 35 years to run on a plot of land with one house which specifically requires the usage of that land to be confined to that one house. Under the terms of the Bill, the assumption is made that 50 years is added to the 35 years when determining the price. The leaseholder then enfranchised. At any time within that 85 years it is permissible under the Bill for the enfranchised leaseholder to go to the local planning authority and, even if it is a well-managed estate, get the consent of the estate to redevelop that land not for the user provided for in the

    1487
    current lease—one house—but perhaps for four houses.
    That second type of development value is something which in equity belongs to the landlord. Yet under all those provisions scattered about in the Bill, as I read it, the landlord will not get any compensation or terms, or whatever we call them, for that type of development value and it is about that that I would like to hear an explanation from the right hon. Gentleman.
    Mr. Hooson: The fallacy in the argument of the Opposition is to equate market value for fair terms. We are trying to remedy an evil which has existed for a long time. Market value today is an enhanced value because of the existence of the leasehold system. It has always been unfair to the leaseholder. If one were to change the terms of the Bill to allow for compensation on the
    terms of the modern market value one would be compensating the landlord and giving him the full benefit of the leasehold system as it has always existed.
    The hon. Member for Hove (Mr. Maddan) asked earlier if I thought the price of the compensation to charities was fair. I believe it is fair as provided by the Bill. The interest of the landlord has increased in value because he will have the lease falling in eventually and would then sell the lease again or renew it at a high premium. This was a grossly unfair system. The Bill is putting a matter right which has been wrong for many years. What the Conservatives suggest would not put it right and it would be grossly unfair to the leaseholder not to allow the Amendment to go through.
    Question put, That the words "for fair compensation" stand part of the Bill:—
    The House divided: Ayes 118, Noes 205.

    Division No. 373.]

    AYES

    [6.45 p.m.

    Allason, James (Hemel Hempstead)

    Hamilton, Michael (Salisbury)

    Osborne, Sir Cyril (Louth)

    Astor, John

    Harris, Reader (Heston)

    Page, Graham (Crosby)

    Balniel, Lord

    Harrison, Col. Sir Harwood (Eye)

    Page, John (Harrow, W.)

    Bell. Ronald

    Harvey, Sir Arthur Vere

    Pearson, Sir Frank (Clitheroe)

    Bennett, Sir Frederic (Torquay)

    Heald, Rt. Hn. Sir Lionel

    Peyton, John

    Biffen, John

    Heseltine, Michael

    Pink, R. Bonner

    Bossom, Sir Clive

    Higgins, Terence L.

    Powell, Rt. Hn. J. Enoch

    Boyd-Carpenter, Rt. Hn. John

    Hogg, Rt. Hn. Quintin

    Prior, J. M. L.

    Brewis, John

    Holland, Philip

    Pym, Francis

    Brinton, Sir Tatton

    Hunt, John

    Quennell, Miss J. M.

    Brown, Sir Edward (Bath)

    Hutchison, Michael Clark

    Renton, Rt. Hn. David

    Bruce-Gardyne, J.

    Irvine, Bryant Godman (Rye)

    Ridley, Hn. Nicholas

    Bryan, Paul

    Jennings, J. C. (Burton)

    Rippon, Rt. Hn. Geoffrey

    Buck, Antony (Colchester)

    Jones, Arthur (Northants, S.)

    Rossi, Hugh (Hornsey)

    Bullus, Sir Erie

    Jopling, Michael

    Russell, Sir Ronald

    Campbell, Gordon

    King, Evelyn (Dorset, S.)

    Scott, Nicholas

    Carlisle, Mark

    Lambton, Viscount

    Sharpies, Richard

    Cary, Sir Robert

    Lancaster, Col. C. G.

    Shaw, Michael (Sc'b'gh & Whitby)

    Clegg, Walter

    Lewis, Kenneth (Rutland)

    Smith, John

    Cooke, Robert

    Lloyd, Rt. Hn. Selwyn (Wirral)

    Stainton, Keith

    Costain, A. P.

    Loveys, W. H.

    Stoddart-Scott, Col. Sir M. (Ripon)

    Craddock, Sir Beresford (Spelthorne)

    MacArthur, Ian

    Summers, Sir Spencer

    Dean, Paul (Somerset, N.)

    Maclean, Sir Fitzroy

    Taylor, Edward M.(G'gow, Cathcart)

    Deedes, Rt. Hn. W. F. (Ashford)

    McMaster, Stanley

    Thatcher, Mrs. Margaret

    Digby, Simon Wingfield

    Maddan, Martin

    Tilney, John

    Dodds-Parker, Douglas

    Maginnis, John E.

    Turton, Rt. Hn. R. H.

    Elliott,R.W.(N'ctle-upon-Tyne, N.)

    Marten, Neil

    Vaughan-Morgan, Rt. Hn. Sir John

    Emery, Peter

    Maxwell-Hyslop, R. J.

    Walker-Smith, Rt. Hn. Sir Derek

    Eyre, Reginald

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

    Wall, Patrick

    Farr, John

    Mills, Peter (Torrington)

    Walters, Dermis

    Fletcher-Cooke, Charles

    Miscampbell, Norman

    Ward, Dame Irene

    Fortescue, Tim

    Mitchell, David (Basingstoke)

    Webster, David

    Gibson-Watt, David

    Monro, Hector

    Whitelaw, Rt. Hn. William

    Glyn, Sir Richard

    Munro-Lucas-Tooth, Sir Hugh

    Wills, Sir Gerald (Bridgwater)

    Goodhart, Philip

    Murton, Oscar

    Wolrige-Gordon, Patrick

    Goodhew, Victor

    Nabarro, Sir Gerald

    Worsley, Marcus

    Grant, Anthony

    Nicholls, Sir Harmar

    Gresham Cooke, R.

    Noble, Rt. Hn. Michael

    TELLERS FOR THE AYES:

    Grieve, Percy

    Onslow, Cranley

    Mr. Jasper More and

    Griffiths, Eldon (Bury St. Edmunds)

    Orr-Ewing, Sir Ian

    Mr. Bernard Wearherill.

    Halt, John (Wycombe)

    Osborn, John (Hallam)

    NOES

    Abse, Leo

    Allen, Scholefield

    Bagier, Gordon A. T.

    Albu, Austen

    Anderson, Donald

    Barnes, Michael

    Allaun, Frank (Salford, E.)

    Atkins, Ronald (Preston, N.)

    Barnett, Joel

    Beaney, Alan

    Harper, Joseph

    Owen, Will (Morpeth)

    Bence, Cyril

    Harrison, Walter (Wakefield)

    Padley, Walter

    Bennett, James (G'gow, Bridgeton)

    Herbison, Rt. Hn. Margaret

    Paget, R. T.

    Bidwell, Sydney

    Hilton, W. S.

    Palmer, Arthur

    Binns, John

    Hooley, Frank

    Pannell, Rt. Hn. Charles

    Blackburn, F.

    Hooson, Emlyn

    Parkyn, Brian (Bedford)

    Blenkinsop, Arthur

    Homer, John

    Pavitt, Laurence

    Boardman, H.

    Howarth, Harry (Wellingborough)

    Pearson, Arthur (Pontypridd)

    Bowden, Rt. Hn. Herbert

    Hoy, James

    Pentland, Norman

    Braddock, Mrs. E. M.

    Huckfield, L.

    Perry, Ernest G. (Battersea, S.)

    Bradley, Tom

    Hughes, Rt. Hn. Cledwyn (Anglesey)

    Price, Thomas (Westhoughton)

    Brown, Hugh D. (G'gow, Provan)

    Hughes, Emrys (Ayrshire, S.)

    Price, William (Rugby)

    Buchan, Norman

    Hughes, Hector (Aberdeen, N.)

    Probert, Arthur

    Butler, Herbert (Hackney, C.)

    Hughes, Roy (Newport)

    Pursey, Cmdr. Harry

    Butler, Mrs. Joyce (Wood Green)

    Hunter, Adam

    Rankin, John

    Cant, R. B.

    Hynd, John

    Rees, Merlyn

    Carmichael, Neil

    Irvine, A. J. (Edge Hill)

    Reynolds, G. W.

    Castle, Rt. Hn. Barbara

    Jeger, Mrs.Lena(H'b'n & S.P'cras,S.)

    Rhodes, Geoffrey

    Coe, Denis

    Johnson, Carol (Lewisham, s.)

    Richard, Ivor

    Coleman, Donald

    Jones, Dan (Burnley)

    Roberts, Albert (Normanton)

    Concannon, J. D.

    Jones, J. Idwal (Wrexham)

    Robinson, W. O. J. (Walth'stow, E.)

    Jones, T. Alec (Rhondda, West)

    Conlan, Bernard

    Judd, Frank

    Rogers, George (Kensington, N.)

    Corbet, Mrs. Freda

    Kelley, Richard

    Rose, Paul

    Craddock, George (Bradford, S.)

    Kerr, Mrs. Anne (R'ter & Chatham)

    Rowland, Christopher (Meriden)

    Crawshaw, Richard

    Kerr, Russell (Feltham)

    Rowlands, E. (Cardiff, N.)

    Crossman, Rt. Hn. Richard

    Lawson, George

    Ryan, John

    Dalyell, Tam

    Leadbitter, Ted

    Sheldon, Robert

    Davidson, Arthur (Accrington)

    Ledger, Ron

    Shinwell, Rt. Hn. E.

    Davidson, James(Aberdeenshire, W.)

    Lee, Rt. Hn. Frederick (Newton)

    Shore, Peter (Stepney)

    Davies, G. Elfed (Rhondda, E.)

    Lee, John (Reading)

    Short, Rt.Hn.Edward (N'c'tie-u-Tyne)

    Davies, Ednyfed Hudson (Conway)

    Lever, Harold (Cheetham)

    Short, Mrs. Renée (W'hampton, N.E.)

    Davies, Harold (Leek)

    Lewis, Arthur (W. Ham, N.)

    Silkin, Rt. Hn. John (Deptford)

    Davies, Ifor (Gower)

    Lipton, Marcus

    Silkin, Hn. S. C. (Dulwich)

    Davies, S. O. (Merthyr)

    Lomas, Kenneth

    Silverman, Julius (Aston)

    Dell, Edmund

    Loughlin, Charles

    Silverman, Sydney (Nelson)

    Dempsey, James

    Luard, Evan

    Skeffington, Arthur

    Dobson, Ray

    Lubbock, Eric

    Slater, Joseph

    Doig, Peter

    Lyon, Alexander W. (York)

    Snow, Julian

    Donnelly, Desmond

    McBride, Neil

    Spriggs, Leslie

    Dunwoody, Mrs. Gwyneth (Exeter)

    Macdonald, A. H.

    Steel, David (Roxburgh)

    Dunwoody, Dr. John (F'th & c'b'e)

    McGuire, Michael

    Steele, Thomas (Dunbartonshire, W.)

    Eadie, Alex

    McKay, Mrs. Margaret

    Stonehouse, John

    Edwards, Rt. Hn. Ness (Caerphilly)

    McMillan, Tom (Glasgow, C.)

    Thornton, Ernest

    Ensor, David

    MacPherson, Malcolm

    Thorpe, Rt. Hn. Jeremy

    Evans, Albert (Islington, S.w.)

    Mahon, Peter (Preston, S.)

    Tinn, James

    Evans, loan L. (Birm'h'm, Yardley)

    Manuel, Archie

    Varley, Eric G.

    Faulds, Andrew

    Mapp, Charles

    Wainwright, Edwin (Dearne Valley)

    Finch, Harold

    Marquand, David

    Watkins, David (Consett)

    Fitch, Alan (Wigan)

    Mayhew, Christopher

    Watkins, Tudor (Brecon & Radnor)

    Foley, Maurice

    Mellish, Robert

    Weitzman, David

    Foot, Michael (Ebbw Vale)

    Milter, Dr. M. S.

    Wells, William (Walsall, N.)

    Forrester, John

    Milne, Edward (Blyth)

    Whitaker, Ben

    Fowler, Gerry

    Molloy, William

    White, Mrs. Eirene

    Fraser, John (Norwood)

    Morgan, Elystan (Cardiganshire)

    Whitlock, William

    Gardner, Tony

    Morris, Alfred (Wythenshawe)

    Willey, Rt. Hn. Frederick

    Garrett, W. E.

    Morris, Charles R. (Openshaw)

    Williams, Alan (Swansea, W.)

    Gray, Dr. Hugh (Yarmouth)

    Moyle, Roland

    Williams, Alan Lee (Hornchurch)

    Greenwood, Rt. Hn. Anthony

    Murray, Albert

    Williams, Clifford (Abertillery)

    Gregory, Arnold

    Neal, Harold

    Winnick, David

    Grey, Charles (Durham)

    Norwood, Christopher

    Winstanley, Dr. M. P.

    Griffiths, David (Rother Valley)

    Oakes, Gordon

    Winterbottom, R. E.

    Griffiths, Rt. Hn. James (Llanelly)

    Ogden, Eric

    Woodburn, Rt. Hn. A.

    Hale, Leslie (Oldham, w.)

    O'Malley, Brian

    Woof, Robert

    Hamilton, William (Fife, W.)

    Orbach, Maurice

    Hamling, william

    Orme, Stanley

    TELLERS FOR THE NOES:

    Hannan, William

    Oswald, Thomas

    Mr. William Howie and

    Mr. Ernest Armstrong.

    Proposed words there inserted in the Bill.
    Mr. Willey: I beg to move Amendment No. 4, in page 1, line 12, after 'rent', to insert:
    'and the rateable value of the house and premises on the appropriate day is not (or
    1490
    was not) more than £200 or, if it is in Greater London, than £400'.
    Mr. Speaker: I propose that with this Amendment we should take Amendment No. 5, in page 1, line 12, after 'rent' insert:
    'and the rateable value of the house and premises on the appropriate day is not (or was not) more than £300 or if it is in Greater London than £500'.

    1491
    Amendment No. 99, in line 12, after 'rent', insert:
    'and the rateable value of the house and premises on the appropriate day is not (or was not) more than £400
    Amendment No. 9, in page 2, line 26, at end insert:
    (4) In subsection (1)(a) above, 'the appropriate day', in relation to any house and premises, means the 23rd March 1965 or such later day as by virtue of section 43(3) of the Rent Act 1965 would be the appropriate day for purposes of that Act in relation to a dwelling house consisting of that house.
    and the two Amendments to Amendment No. 4, after 'premises', insert:
    '(other than any house and premises being within an area in respect of which the Minister has granted a certificate under section 19 of this Act)'
    and leave out '£200' and insert '£300'.
    Mr. Willey: I did not expect to be in the position of defending and justifying the lone stand of the hon. Member for Crosby (Mr. Graham Page). On the other hand, I have the consolation of inviting the House to return to the purity of the White Paper.
    What I am asking the House to do is to return to the provision, which we suggested in the White Paper, confining the Bill to houses of a rateable value within the Rent Act limits. This issue was very much discussed both on Second Reading and in Standing Committee when I said that I found myself in some difficulty about Amendments then suggested. I was. I said that I would be willing to consider the matter again—I do not want to minimise my difficulties—and I then said that I considered the provisions of those Amendments to be too restrictive.
    We have considered them again. The essential difficulty is that which I emphasised in Standing Committee and which is that one has to be hesitant and cautious about how far one should go in rectifying contracts which have already been made between the parties. There is a whole host of legislative precedent for intervening in contracts between parties, but in such circumstances one has to look to the areas of hardship. For that reason, in the White Paper we followed the precedent of the limits of the Rent Act.
    There were two major alternatives. The first was to have no limits at all, which was argued on grounds of logic and con-
    1492
    sistency in Standing Committee, particularly by my hon. and learned Friend the Member for Dulwich (Mr. S. C. Silkin). However, although that might be a more logical approach, one would have to be cautious that it did not carry rectification of the contract too far in the sense of taking it to unnecessary limits, especially if one paid regard to hardship.
    The other difficulty of removing the limits was that by doing so one brought two types of property much more prominently into the range of the Bill. These are mixed premises and premises which, although used as residential premises, are in character really investment properties. Although the leaseholder himself might live in them, they could be boarding houses, or sub-let, thus being more investment premises than the main residence of the leaseholder. There is also the difficulty of the definition of predominant use, or some such character, of the premises which would make it difficult to accept the complete abolition of limits.
    We therefore considered all the various combinations and permutations of limits. If we accept having some limits, then all the arguments against the limits of the Rent Act will apply—the border-line cases and the anomalies—and one is driven to the conclusion that the most defensible line is the limits drawn by the Rent Act.
    For those two reasons—the doubts of the need to go as far as abolishing limits altogether, with the difficulty of devising satisfactory definitions of the categories of properties which ought not to fall within the Bill and, secondly, the difficulty of justifying any other limits against the present Rent Act limits—we were driven back to where we began. I invite the House to accept the original limits and to agree that the Government were right in the first place.
    7.0 p.m.
    Mr. John Boyd-Carpenter: First of all, as this is the first time that I have taken part in the debates on the Bill at this stage, I must again declare my somewhat complicated interests as, on the one hand, the tenant of a leasehold house, grossly over-valued by the Inland Revenue, and secondly, as a director of a property company. Despite these complicated qualifications, or disqualifications, I welcome the right hon. Gentleman's reconversion.

    1493
    One might be inclined to introduce the hackneyed reference to St. Paul if one had not a much more recent example of a sudden Ministerial conversion, so I will content myself with saying that the right hon. Gentleman's conversion is the most dramatic one that we have had in this House since the Foreign Secretary yesterday decided to return to sanity in connection with Aden.
    The right hon. Gentleman's reasons were, as is often said of the reasons given by lay magistrates for perfectly sound decisions, really rather damaging to the decision itself. The great Willey principle:
    "The bricks in equity belong to the leaseholder and only the site to the landlord"
    about which we heard in the White Paper and on Second Reading, seems to have wilted a little in enthusiasm when he now says that it is better not to carry rectification further than one must. There is not exactly the zeal of the great reformer who has seen a splendid principle, which such amateurs as the professional committees who looked at this never saw. Instead he says one must not carry this further than one must. What tremendous zeal!
    There are very good reasons why we welcome the reimposition of these limits. I am particularly glad to have the chance of giving them because, apparently, in some quarters, I have been regarded as the right hon. Gentleman's secret weapon in this respect. The right hon. Gentleman may find me a little difficult to identify in that role, but I am particularly anxious to say why I am pleased that the right hon. Gentleman has returned, not to sanity but at any rate to a condition of semi-coma.
    As I said in reply to an intervention by the hon. and learned Gentleman the Member for Dulwich (Mr. S. C. Silkin) on Second Reading, being, as I am, completely opposed to the principles of this Bill, which I believe are frankly malicious and confiscatory, I want to see its scope as limited as possible. I would be much happier to see much lower limits; but any limit is better than none, any restriction of the scope of the Bill must be good because it diminishes the scope of injustice.
    Secondly the introduction of this limit completely blows the gaff on the great
    1494
    Willey principle. All this edifice that has been erected about the leaseholder having built the house and it being a robbery for the landlord to take it back at the end of the term; all the remarks of hon. Gentlemen below the Gangway about how it was confiscation for the reversioner to resume possession of his property—all that kind of thing is shown up as the arrant nonsense that it is when it becomes clear that this immutable principle mutates at rateable values of £400 and £200 a year. The right hon. Gentleman saw this point, according to the report of the Committee.
    It is therefore a particularly good thing that the right hon. Gentleman has now come down and now faces rectification as far as one must. In other words he has given way, as far as he must, to the pressures from South Wales and from behind him, and is not now to be the apostle of a great and brilliant new principle. It is very satisfying, in practical terms, that the right hon. Gentleman should have done this, although I am bound to say that I agree, in his doing it, with what is said in a most interesting article in The Times today, written by the hon. and learned Member for Dulwich. He says:
    "The embarrassed Minister must sacrifice logic to expediency."
    That is what his own hon. and learned Friend thinks—I believe absolutely correctly. What an embarrassment this is for the right hon. Gentleman. In Committee, and I have read the reports very carefully, he did not just acquiesce in what was being done, he voted for the Amendment to take the limits out. It is fair to say that the only person who had the consistency of principle to oppose it and to go into the Lobby against it was, as one would have expected, my hon. Friend the Member for Crosby (Mr. Graham Page).
    It is quite true that the right hon. Gentleman, in seeking to justify his attitude said this:
    "That is why I prefer to leave it that we will put something down on Report that will afford the opportunity for further debate."— [OFFICIAL REPORT, Standing Committee B, 11th April, 1967; c. 82.]
    He need not worry about that. Would anyone have thought, when the right hon. Gentleman said that, when he said that

    1495
    the Bill would be altered in a major feature, that he would accept the Amendment and put something down on Report which would give rise to further debate, that what the hon. Gentleman meant was that he would restore the Bill to its original form, and himself come forward to advocate the reintroduction of the precise provision which, a few moments later, he was to vote to excise from the Bill? Would anyone have thought that that was the right hon. Gentleman's meaning, or indeed that that was the way in which the Minister in charge of a Bill should conduct it?
    We would like to know a little more about the reasons, first for the right hon. Gentleman's original change of mind, and secondly for his change back. Will he tell us now what representations were made to him to take these limiting words out of the Bill in the first place? Will he tell us why, when he considered the Amendment on the Notice Paper, he did not put on the Government Whips to retain it if he thought then, as he appears to think now, that this was right? Why did he surrender then? Why, having done this, has he now changed his mind?
    Will he tell us what representations have been made to him, and whether he has had serious representations from the Church Commissioners, backed by threats of resignations? Will he tell us what representations he has had made to him which are causing him to make this highly salutary change, one which is absolutely inconsistent with his own action a few weeks ago?
    The right hon. Gentleman has told us nothing about this. He just said that he has come to the conclusion that he must not rectify further than he must. He did not tell us what the two "musts" were—what the first "must" was that took this out and what the second "must" was that put it back. The right hon. Gentleman is not treating the House properly, nor serving his own interests by conducting this Measure in this way. For my part I would not oppose his proposal, I have said so throughout. It is absolutely right. I would like the right hon. Gentleman, as he is so volatile and flexible, to take the matter further, and perhaps reduce the limits more. I will certainly accompany him upon this path. But I think that the right hon. Gentleman
    1496
    owes it to the House to tell us two things: why he took it out, and why he is putting it in.
    Mr. S. C. Silkin: I listened to my right hon. Friend the Minister moving his Amendment with a judicious mixture of sympathy, admiration and incomprehension: sympathy for the task which he has found himself compelled to take upon himself; admiration for the manner in which he has performed it; and incomprehension of the reasons which he has advanced for performing it.
    It is right to say, however, that my sympathy extends to a number of hon. Members opposite, because when we remember the events which took place in Committee it will be recalled that I, who had the honour of moving the Amendment which succeeded in removing the rateable value limits from the Clause, was willing, and expressed my willingness, to withdraw the Amendment on the undertakings given by my right hon. Friend to consider the points made. But hon. Members opposite, with the sole exception of the hon. Member for Crosby (Mr. Graham Page), were so persuaded by the logic of the argument which I advanced that they refused to allow that to be done, and it was they who forced a vote. If I am the devil's advocate in this matter, then I do not know what hon. Members opposite are, because they have gone even further than the devil.
    Mr. Hamling: The devil's sheep.
    Mr. Silkin: As a result of the activities of hon. Member's opposite in forcing a division in order to assert the principle which I had advanced, we found ourselves with a majority of 18 to one in Committee in favour of the logic of saying that if the principle of the Bill was right it must apply universally.
    I have heard my right hon. Friend's explanation of why that should not be the case. I am bound to say that if one is to be quite frank about it the real reason is not that which he has given to the House; the real reason is that it is feared that if the limits, particularly the limit for Greater London, are not reinserted in the Bill, a number of wealthy people will become very much wealthier. That is no doubt a factor to which consideration must be given.

    1497
    The question, however, is whether the right way of dealing with that matter is to sacrifice logic for expediency, as I put it in the article referred to, or to seek some other way of doing it. I believe that it would be right to seek a different way of doing it, and at the end of the article which I wrote I put forward a proposition to which I hope my right hon. Friend and the Government as a whole will give very serious consideration. Certain matters—not only this one but others—arise from the Bill which cause anomalies which can be put right if appropriate measures are taken. I support entirely the general provisions of the Bill. I do not think it right to adopt the methods which the Government are now seeking to adopt in simply restoring the rateable value limits.
    Let me turn to the two Amendments to the Minister's Amendment which I desire to move. I move them on the supposition that—
    Mr. Speaker: Order. The hon. and learned Gentleman is not moving them; he is talking about them.
    7.15 p.m.
    Mr. Silkin: I beg your pardon, Mr. Speaker.
    The Amendments to the Amendment are tabled on the supposition that the general principle of the Minister's Amendment is accepted. The Amendments in my name seek to modify the principle put down by the Minister in two ways. The first seeks to omit from the rateable value limit provisions those premises which fall within an area in respect of which the Minister has granted a certificate under Clause 19—that is to say, what is called the comprehensively managed estate. In the case of a comprehensively managed estate on which some of the property is above the rateable value limit and some of it is below, there cannot be any logic in exempting that property which is above the limit and leaving that which is below. In practice, areas which have been developed as a single comprehensive unit will have parts available for enfranchisement and other parts which are not. I therefore hope that the Minister will be able to modify the proposals which he has made in this respect.
    1498
    The other Amendment in my name seeks to deal with the position outside London. This is not a matter which concerns my constituency, but it certainly concerns the constituency of my hon. Friend the Member for Oxford (Mr. Luard) and areas like Cambridge. It is clear from all the information which we can get that in areas of that kind where there are large Victorian houses the £200 limit is unrealistic and unsatisfactory. The fact that it is the limit fixed by the Rent Act for other purposes is not the point. In dealing with leasehold houses, unless the limit outside London is raised from £200 to £300, there will be excluded from the benefits of the Bill a very large number of houses which are identical with houses in London which would be included.
    I therefore hope that, whatever else happens about the Amendment proposed by my right hon. Friend, he will find it possible to modify his proposals in this respect.
    Mr. Clegg: I feel compelled to speak to the Amendment because, unlike my hon. Friend the Member for Crosby (Mr. Graham Page), I was one of those who in Committee voted for the removal of the limit. I should, therefore, perhaps offer some explanation to the House about how I view the latest Amendment.
    When we were considering this matter in Committee, I understood that we were debating the principle of enfranchisement. I agree with the hon. and learned Member for Dulwich (Mr. S. C. Silkin), that, in principle, if there was to be enfranchisement, it should be across the board. I may have been a little political naive because at that time the terms of compensation still remained to be discussed under Clause 9. It is true that earlier we had had some discussion on the fair compensation provisions, but we hope to convince the Minister that we should change the terms of compensation which were included in Clause 9.
    When we came to Clause 9, the right hon. Gentleman was adamant and refused to amend the principle of compensation which he had set out earlier and which we have heard referred to today as "the tenant's bricks and mortar principle." It seems to me, therefore, that the compensation provisions in the Act are unfair and that, as a result of the last Division, it is unlikely that they will be changed to any degree at this stage.

    1499
    As a believer in enfranchisement, I had hoped to see a Measure before the House dealing once and for all with all the problems arising from the long leasehold at low rent system. It appears now that we shall not get that. Should I, therefore, support this Government Amendment, because I believe in enfranchisement right across the board?
    I believe that the provisions in the Bill for compensation are confiscatory, and I feel, on balance, that I should vote for the Amendment because it would limit the confiscatory terms of the Bill. I am disappointed at having been put in this position, because the right hon. Gentleman has had ample opportunity to bring forward a major reform which, if he had put fair compensation provisions in the Bill—
    Mr. Speaker: Order. I have listened to the hon. Gentleman with great interest. I am not quite as naïve as to allow a debate as wide as that. He must speak to the Amendment.
    Mr. Clegg: Mr. Speaker, I will of course bring myself back to the subject of the Amendment.
    The result of bringing back the rateable value limits is that the system will survive and will grow, because landlords who have properties about those limits can again enter into the same type of contract. However, with my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), I wonder why the Minister has changed his mind. The explanation which he gave today did not satisfy his hon. Friends and it does not satisfy me. What influence has the noble Lord, Lord Cadogan, on the right hon. Gentleman and his Party—
    Mr. Hamling: None at all.
    Mr. Clegg: —in contrast to the noble Lord, the Earl of Bute? I cannot think why the Government should want to see one noble Lord in one situation, and another noble Lord in another.
    I am completely mystified about the motives for the change. Nothing that I have heard today indicates why it has happened. Before the debate comes to an end, I hope that the right hon. Gentleman will let us know. To those outside the House, it must look very strange. We
    1500
    should like to know what siren voices have been singing, if not in his ears, in those of many of his right hon. Friends in the Cabinet who have come to this decision. We should like to know what the voices were and what they were singing, because then perhaps we shall be able to vote on this matter with more knowledge.
    As I have said, I felt compelled to speak and to define my attitude. In the end, I think that it has been logical, but perhaps it has taught me a poliotical lesson which I shall remember in future.
    Mr. Luard: Discussion of these Amendments is central to discussion of the Bill as a whole, because they raise in the clearest form the principle upon which the Bill is based. In describing that principle, I cannot do better than quote what my right hon. Friend the Minister of State said in moving the Second Reading:
    "… all past experience points to the conclusion that no real solution will be found unless we rectify the fundamental injustice of the leasehold system. This fundamental injustice arises because under the leasehold system the landlord is entitled—indeed, has the impertinence—to take free of charge the house and the improvements created".
    Later, he added:
    "… surely then it is fair that the leaseholder —the owner-occupier—should have the opportunity to buy from the landowner the freehold of the land upon which his house has been built."—[OFFICIAL REPORT, 7th March, 1967; Vol. 742, c. 1274–5.]
    The basic principle which the Minister has defended many times is that the buildings should belong to the leaseholder and the land to the freeholder.
    Most of the 18 hon. Members who voted in favour of the Amendment in Committee did so in the belief that, if that principle was right and just in the majority of cases of leaseholds, it was equally right and just in all cases. We were by no means convinced that any of the arguments put forward previously for making certain exceptions held any validity.
    It is clear that the Government have not been prepared to accept that this is a universal principle which can be applied in all cases and, regretfully, most of us have come to the conclusion that we must accept unwillingly that certain exceptions will be made. However, what we have

    1501
    the right to expect is that, if exceptions are made, they will be based on some clear, logical and understandable principle. In particular, we have the right, first, to expect that the provisions which are made shall not discriminate unfairly between one part of the country and another. I would submit as strongly as I can that the present proposals discriminate most unfairly between London and the provinces.
    The Bill makes the quite unwarranted assumption—admittedly one inherited from some other provision, but no more logical nor reasonable for that reason—that rateable values in London on average are something like twice the level of those in the provinces. I would submit that there is no justification in fact for that assumption, and there are certain facts which one can quote which give some plausibility to that contention.
    One can see this to some extent from the effect of the Bill in different parts of the country. In London, except for the areas of central London where rateable values are extremely high and where certain properties are well above the limits for London set down in the Bill, there are few properties which are excluded by the limit of £400. In the constituency of my hon. and learned Friend the Member for Dulwich (Mr. S. C. Silkin), which contains a great deal of leasehold property in the form of large houses of a considerable size which are owned and occupied by fairly wealthy middle-class people, virtually none is above the rateable value limits set down in the Bill.
    That does not apply to the limits set down for the provinces, because there are certain areas in the provinces where substantial numbers of houses are excluded by the present limits. My own constituency is one of them. It is by no means alone, because Cambridge is in a similar position, where something like one-sixth of the leasehold houses will be excluded under the terms of the Bill. There are also a large proportion in Birmingham. In the case of Oxford, I have clear evidence which conflicts with that which has been given by the Minister, and it is some information from the Bursar of St. John's College. Hon. Members will know that the majority of leasehold property in Oxford is owned by St. John's College. A few days ago—after the terms of the Bill become known—the Bursar
    1502
    made a speech in Oxford, in the course of which he said, referring to the restoration of the limits previously set down:
    "In Oxford, this will mean that about 250 of St. John's total of 1,300 tenants will not be given the right to compel the college either to sell them the freehold of their homes or to grant them a 50-year extension of their leases."
    In other words, something like a fifth of those houses will be excluded under the terms of the Bill.
    It is thus a fatal defect of the present limits that they discriminate unfairly between one part of the country and another by the arbitrary and false assumption that rateable values in London on average are something like double those in the provinces. One thing which I think we have the right to expect in legislation of this kind is that if exceptions are made they will, in a logical way, meet the difficulties with which they are designed to deal.
    7.30 p.m.
    There are three main difficulties which have been suggested as the reason for having some kind of limit. The first is one which the Minister has given several times in the past, and he repeated it again today. In fact it is the only one that he mentioned today, namely, that if it is necessary to interfere in an existing legal contract, this should be done only to meet the cases of greatest hardship. I respectfully submit that this argument has no validity when considered in the context of many of the properties in the provinces. I think it is true to say that in my constituency one cannot distinguish in any meaningful way between the hardship being suffered by people living in houses with a rateable value of more than £200 and those in houses with a rateable value of below that figure.
    I would like to quote from one of many letters which I have received. It is from someone who lives in a house which is rated at just over £200:
    "The rateable value of my house is £206. A few doors away from me, in the same street is an almost similar house, but with one or two fewer rooms, whose rateable value is just under £200 …"
    and he later explains why. He then says:
    "Since buying the house I have spent something like £2,000 on maintaining and improving it."

    1503
    Does the Minister maintain that it is just that this householder should be penalised, should be deprived of the opportunity of acquiring his leasehold under the terms of the Bill, because he has been public-spirited and proud, and has taken the trouble to maintain and improve his house and in doing so has increased its rateable value?
    I referred earlier to 250 houses which are owned by St. John's College, excluded by the Bill. But these are all basically similar houses. They are fairly large houses and the fact is that those living in houses with a rateable value of more than £200 will suffer just as much hardship as those living in houses with a lower rateable value. If they are deprived of their houses on the expiry of the leases, which will be fairly soon, they will be placed in considerable difficulty, because there is an acute shortage of housing in Oxford. Many of them will be able to find only leasehold houses in the area, and they will thus suffer real hardship. I therefore do not believe that the Minister's argument holds good when considered in relation to conditions in many parts of the country.
    The second argument which has been used by the Government is that they decided to reimpose the limit because unless they do so there will be a substantial windfall gain for some of the tenants of the larger houses who will be able to sell the properties at a substantial profit. I cannot say how far this is true in London. It may be that in central London there will be an opportunity for making substantial profits of this kind, but I do not think that there will be any significant windfall gains in Oxford or in other areas. Certainly any gain which is made will be no different from the gain which will be made by selling houses with a rateable value of less than £200. As I said during the Second Reading debate, the tenants of these houses will have to pay a substantial sum for the land, with development value, on which they are situated.
    Mr. Eric Lubbock: Does not the hon. Gentleman think it rather significant that the Minister did not mention the windfall gain argument in his speech at the beginning of this debate? It is for this reason that one is entitled to assume that this could be dealt with
    1504
    by an Amendment somewhere else in the Bill.
    Mr. Luard: I agree with the hon. Gentleman. Many of us have suggested to the Minister that, if this is an important argument, it can be met by other means, and is in no way a sound reason for depriving many leaseholders of the right of enfranchisement. I do not think that there will be any substantial windfall gains for tenants in Oxford, and certainly the gains from the two types of houses will in no way be distinguishable.
    The final argument which has been used, and it has been aired in the Press and elsewhere, is that the comprehensive redevelopment of some large estates will be made impossible if all leaseholders are given the right of enfranchisement. I do not believe that this argument holds good for any area outside central London. It may hold good in Belgravia. If one gave the right of enfranchisement to the tenants of all the properties in an area of larger properties, it may be that comprehensive redevelopment would not be possible. But this holds good only if all the properties on the estate are above the limit. There are many estates with houses below the limit, and therefore this again is not really a valid argument.
    What I think these three arguments show conclusively is that if a distinction is to be made, it cannot be made between different parts of the country, or between London as a whole and the provinces, but only between central London, with the kind of rateable value which is normally prevalent there, and every other part of the country. The rateable value limits in the Bill are inappropriate to the purposes of the Measure, and the kind of exceptions which it wishes to make. But, above all, it discriminates unfairly between London and the provinces because it assumes a relationship in their rateable values which does not exist. It is for this reason that I tabled an Amendment asking for a uniform level of rateable value for the country as a whole. If the Government wish to impose a special limit for central London I have no objection to this being done, but the kind of considerations which apply to most parts of London—in fact some parts of London have a rateable value below that which applies in Oxford, and Cambridge, and certain other areas—apply

    1505
    to other areas as well. I therefore submit that a uniform principle should be applied for all parts of the country except central London, namely, £400.
    Mr. Hooson: I shall not follow the hon. Member for Oxford (Mr. Luard) in what I thought was an unanswerable case for the limit of £400 to be applied to the whole country, but the logic of his argument was that there was no reason for any limit at all. I did not have the advantage of being a member of the Committee, and I therefore did not witness the 18 to 1 vote. I am aware of the great Willey principles, but I suspect that the debate today is connected with the performance of double somersaults because I cannot see that the right hon. Gentleman made any case for going back to his original contention that there should be limits.
    If he is concerned, as he has said he is, with putting forward a principle for the abolition of leasehold, or the enfranchisement of leaseholds, what justification is there for the imposition of these limits? The hon. and learned Member for Dulwich (Mr. S. C. Silkin) said that he sympathised with the right hon. Gentleman because he was compelled to do this. I did not understand what the hon. and learned Gentleman was referring to. What is the compulsion? Who has applied it? Is it because of compulsion, or persuasion by the hon. Member for Crosby (Mr. Graham Page)? He is an extremely compelling, if not a persuasive man. Or is it the influence of the Church Commissioners? The right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) seems to have some inside knowledge. What is it that has caused the Minister to change his mind?
    In an earlier debate on an Amendment to exclude charities the Minister said that there was no reason for drawing distinctions. The right hon. Gentleman is drawing a distinction if he says that no hardship is involved in the case of those who occupy houses with a rateable value of more than £400 in London and £200 in the provinces. It may be equally argued that there is more hardship for a charity than for a private landlord. The right hon. Gentleman refused to draw a distinction. He must be aware that when, for the second time in succession, he is congratulated from the Conservative
    1506
    benches upon a return to sanity, there is something wrong with the Government.
    Mr. Boyd-Carpenter: I did not go so far as that. I suggested only that the right hon. Gentleman had passed from complete unconsciousness to a state of semi-coma.
    Mr. Hooson: If the right hon. Gentleman reads the OFFICIAL REPORT tomorrow I think that he will find that he revised his opinion. He first congratulated the right hon. Gentleman on a return to sanity and then he qualified it.
    The right hon. Member for Kingston-upon-Thames regards the Bill as malicious and confiscatory. That is a typical attitude of those who have benefited for many years from a malicious and confiscatory system. The Bill is calculated to put right a system which we regard as iniquitous and which is of itself malicious and confiscatory, in respect of the money that is always made when a lease falls in. If regarded in the proper light, is it not confiscatory to impose a penalty for the renewal of a lease? What justification has the right hon. Gentleman for going back on the principle he accepted in Committee, of imposing these limitations?
    If we consider the speech made by the hon. Member for Oxford we see that the right hon. Gentleman has not begun to justify this return to so-called Conservative sanity. I hope that hon. and right hon. Gentlemen opposite who voted in favour of no limitations in Committee will have the courage of their convictions and go into the Lobby to vote against the right hon. Gentleman. I have yet to hear from the Conservative benches any true justification for anyone going back on his vote in Committee.
    Mr. Hamling: Like my hon. and learned Friend the Member for Dulwich (Mr. S. C. Silkin), I have great sympathy for my right hon. Friend on this occasion. I shall proceed to tell the House why. It must be difficult for any Minister to present, on Report, a change in the Bill. I must admit that the Government have asked for this. Before the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) starts smirking about it he might tell us what his personal view is on this matter. He is supporting the Government Amendment. I do not see

    1507
    what he has to giggle about. His speech was a nice exercise in party politics, and one could understand that.
    Mr. Boyd-Carpenter: The hon. Member asked what I had to laugh about. I do not giggle, incidentally. I will tell him. When a Minister in charge of a major Bill votes one way in Committee and, within a matter of weeks, moves an Amendment to reverse his own vote a little merriment is surely permitted for those who are not among the right hon. Gentleman's unqualified admirers.
    Mr. Hamling: So long as we can put it down to innocent fun that is all right, but we are not having innocent fun on this Bill. Having said that, we can dismiss the right hon. Gentleman's speech. It was not a contribution to the debate.
    We are concerned with the logic behind the various Amendments. The Government have got themselves into this mess. They have given the impression that they have given way to the big vested interests in estates. I know that this is not true, and I will tell the House why. The Government have not given way to them; they have given way to other points of view. They have given way to the Socialist point of view—and the Socialist point of view is that the Bill as it stands provides for large capital gains to be made by people who are already very wealthy. That is why the Government have moved the Amendment.
    Mr. Hooson: In that case, does not the hon. Gentleman think it rather odd that the Minister did not give this reason in his speech?
    7.45 p.m.
    Mr. Hamling: I am reading the Government's mind in this matter. I am more entitled to do so than any hon. Member opposite. I do not give much credence to hon. Members opposite who always see outrageous motives behind any change in Government policy. In this debate they have given evidence that they suspect that the Government have given way to base pressures from big financial interests. I do not accept that. That does not mean that I think that the Government are right.
    Amendment No. 5 provides for a limit, for the very good reason that some people
    1508
    would make big financial gains out of the Bill if there were no limit. Anyone who who reads the report of the proceedings in Committee will discover plenty of evidence, in the speeches of hon. Members opposite, to support this view. It is a proper point of view to consider and a proper possibility to guard against.
    On the other hand, there is some logic in saying that there should be no limit. That is the point of view that I put upstairs. In any case, there is a certain illogicality in the Bill itself. It is a basic thing in this Bill. I do not know why the right hon. Member for Kingston-upon-Thames should find that amusing. Many things in our lives are illogical, but we find them very attractive. That is one reason why I find the Bill most attractive. It is illogical in that it gives a leaseholder a right which hitherto the law has never permitted him to have. The Bill provides a breach of previous contracts. To that extent it is illogical. Nevertheless, we must ask ourselves how far we ought to modify this illogicality.
    Amendment No. 5 provides for a limit of £300 outside London and £500 inside. There is more logic in that than in the Government proposal. My hon. Friend the Member for Oxford (Mr. Luard) has referred to Oxford, and I want to refer to other places outside London. I can think of certain properties in Liverpool whose rateable values exceed £200. The hon. Member for Crosby (Mr. Graham Page) will know them very well. I can think of some properties around Liverpool Cathedral which are leasehold and whose rateable values in many cases are over £200.
    I can think of certain parts of London—not Belgravia; not in the Golden Square Mile but in more humble places, as in parts of my constituency—in which houses have rateable values exceeding £400. This applies even in Hampstead, where leaseholders have as much right to be enfranchised as those just below the £400 limit, and that is the reason for the Amendment—
    Mr. Murton: The hon. Gentleman said earlier that there should be a limit and now says that he proposes one. Why, in Committee, did he vote against any?
    Mr. Hamling: I have been persuaded by arguments since Committee that some sort of limit is reasonable because some

    1509
    people would make profits of £15,000 or £20,000. These people are not the normal leaseholders whom those of us who favour this enfranchisement have in mind They are a very small percentage—
    Mr. Maddan: Would they be subject to Capital Gains Tax?
    Mr. Hamling: I am advised not—
    Mr. Ben Whitaker: Could not that difficulty be simply cured by some fiscal measure? Are not the inhabitants of all these leasehold houses as entitled to security of tenure after having lived there for many years with their families as anyone else? That is what they want—security of tenure—not a large capital gain.
    Mr. Hamling: I am not sure that I have all that much sympathy with people who will receive capital gains of £20,000. I do not think that I was sent to Parliament to look after the interest of such people or that the Labour Government were elected on the basis that they should give justice to millionaires.
    There is some illogicality about this, but one must draw the line somewhere. I have been persuaded that some limit is reasonable but the limits in the White White Paper, which are embodied in the Bill and to which my right hon. Friend is returning, are not high enough. We have suggested a modest increase which ought to be supported by the Government and commend itself to hon. Members opposite. That is why we framed the Amendment so moderately.
    Mr. Percy Grieve: The Minister's plight in seeking to defend the Government's change of attitude reminded me of that of Saint Lawrence on the gridiron. Whichever may he turned he was likely to be grilled, both from his hon. Friends and from hon. Members this side.
    The reason is not far to seek. On his own side, the hon. and learned Member for Dulwich (Mr. S. C. Silkin) and the hon. Members for Oxford (Mr. Luard) and Woolwich, West (Mr. Ham-ling) naively assume that the Bill is founded on a principle. I do not know what the principle can be, except that it is sometimes desirable for Government to procure the support of some people by giving other people's property away
    1510
    to them. That is what I and my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) see in the Bill.
    The hon. and learned Member for Dulwich and the hon. Member for Oxford seem to believe that the Bill is founded on the principle that the bricks and mortar, for some curious reason, belong to the leaseholder, whereas the land on which the house stands belongs to the freeholder. How that can possibly apply in the many cases of houses built by the freeholder passes my comprehension—
    Mr. S. C. Silkin: As the hon. and learned Gentleman regards the Bill's principle with such abhorrence, did he and his right hon. Friend vote against the White Paper and the Bill?
    Mr. Grieve: No, I did not vote against it, but I have been careful to express my opinion about it on every occasion, and I do not hesitate to do so now.
    How the Bill can be founded on a principle which is belied by the facts of the leasehold system passes comprehension, but if it is founded on any principle it should clearly be applied to all houses, because justice should not be for only one section of the community but for all. Whether a man is rich or poor, he should have justice. I believe that I came here to represent all my constituents who elected me, whether rich or poor, and not just one section, as the hon. Member for Woolwich, West boasted just now that he did—
    Mr. Hamling: I said millionaires.
    Mr. Grieve: I see no principle in the Bill beyond a squalid attempt to purchase the support of one section—
    Mr. Deputy Speaker (Sir Eric Fletcher): Order. As I understand, we are not discussing the principle of the Bill but a rather narrow Amendment about what the limit should be.
    Mr. Grieve: I apologise, Mr. Deputy Speaker. The debate has proceeded on the question of principle, but I should not have wandered too far.
    The Bill is not founded upon principle, which is why I welcomed the Minister's last minute repentance. At least some people will be spared from having their

    1511
    property taken with inadequate compensation, although they may be a comparatively small proportion of freeholders and owners of ground rents. To that extent I welcome the Minister's action, but I am shocked at the lack of principle behind the concession which the Minister made to his hon. Friends in Committee and now behind the withdrawal of that Amendment and the reinstatement of the property limit.
    I welcome that reinstatement, because it will save from being broken up the great urban estates which have done so much for the development of our major cities and because it is a concession to some individuals whose property will not be taken away with inadequate compensation and given to other people. If people are taken in by this and accept the gifts brought to them with inadequate compensation, they will rue the day, because this kind of inroad into the contracts and rights of ordinary citizens cannot lightly be made.
    The hon. Member for Oxford was right to say that there was one way of dealing with the situation which the Minister has had to deal with and I understood him to mean that adequate compensation should be given. If the Minister were to give adequate compensation, it would destroy the Bill's purpose, which is to buy the support of one section of the community at the expense of another.
    8.0 p.m.
    Mr. Roland Moyle: I shall speak briefly, because my hon. and learned Friend the Member for Dulwich (Mr. S. C. Silkin) and my hon. Friend the Member for Oxford (Mr. Luard) have already spoken ably for myself and my hon. Friends, but I want to underline the very strong feeling there is on this side against the reimposition of the rateable value limits and to make a last attempt to persuade my right hon. Friend to change his mind and drop this Amendment. Before doing so, I have two things to say. First, I am not running a constituency interest in any way. In the whole borough of Lewisham there are only two houses that have a rateable value of over £400, and neither is in my constituency. I intervene purely on a matter of principle, because I believe that there is a principle in the Bill.
    1512
    I have sympathy with my right hon. Friend, because I was a member of the Standing Committee and can remember the circumstances in which the rateable value limits were eliminated. The hon. and learned Member for Solihull (Mr. Grieve) may be interested to know that it was not a concession to my side of the Committee but to him and his hon. Friends. I remember my right hon. Friend urging caution on the Committee before it was caught up in what I can only describe as a great wave of emotion which swept the rateable value limits from the Bill as it then was.
    One principle in the Bill is that if there is a wrong type of contract covering the leasehold relationship it should be put right, not only in connection with properties having a rateable value below the limit, but those where it is above. That has already been stressed this evening, and I will say no more about it.
    Another principle runs through the Bill. We advance the proposition that a house is not just a total of legal relationships that can be enshrined in the leasehold contract but is an essential part of a family home. We have tried to recognise this in the Bill. If a house below a rateable value of £400 in London is a home for someone, the same principle must apply to people who live in houses with a rateable value above that figure.
    Here I am very disappointed to say that I take issue with my hon. Friend the Member for Woolwich, West (Mr. Hamling), with whom I so often find myself in agreement. I believe that I was returned to this House in the national interest to look after the sort of people to whom my hon. Friend referred as well as others—
    Mr. Hamling: Will my hon. Friend tell me how many millionaires he represents?
    Mr. Moyle: I represent no millionaires, but I have said that in intervening in this debate I do not intend to run any constituency interest but to take my stand purely on principle.
    In many parts of the country, if someone has built a garage and attached it to his house, he is a public benefactor. It is true that he may have many motives in doing so, but if he takes his car off a road that is probably already choked with parked cars he has made a contribution to the public welfare. He is

    1513
    already penalised to some extent by paying higher rates, but if he then finds that he has also put his house beyond the confines of this Bill, it will be a bitter pill to swallow—
    Mr. Whitaker: Perhaps I can cite an actual case to my hon. Friend. A constituent told me that because of his initiative in putting up a garage in recent years the rateable value of his house is now just over £400. Are Her Majesty's Government really advising my constituent to go out and pull down that garage with his bare hands? That is really what they are asking.
    Mr. Moyle: That was exactly the kind of thing I had in mind in saying what I did. I am only too happy to find practical examples that can be quoted. However, I hope that in the interests of the community my hon. Friend's constituent will not tear down his garage with his bare hands but will retain it.
    I do not take the extreme view that reimposition of these rateable value limits will destroy the whole benefit of the Bills but it is an inconvenience and an irritation. The Government have gratuitously handed a weapon to those right hon. and hon. Gentlemen opposite who have always take the view, utterly wrongly, that this Bill is a looting operation. It will just make it a little more difficult now for us on this side to defend the Bill as a matter of principle, and just a little more easy for the hon. Member for Crosby (Mr. Graham Page) and those who think like him to attack us. But it would be wrong to go quite as far as did my hon. Friend the Member for Oxford (Mr. Luard), who said that the Amendment went to the heart of the Bill. Many thousands of leaseholders will continue to get substantial benefits from rectification of inequity contained in it.
    I see one small ray of light on the horizon. In advancing the case for reinserting the rateable value limits, I thought my right hon. Friend made it perfectly clear that he had been in no way influenced by the campaign which had been run by the Cadogan Estates, and their allies in the west of London and elsewhere—
    Mr. Clegg: Who knows?
    Mr. Moyle: Well, does the hon. Member really think that my right hon. Friend has been influenced by them? Did he say he had? There is a perfectly recognisable influence on the maintenance of the amenities. It is that all these estates depend in the ultimate on the desire of the tenant of the house to maintain it and to maintain its value with its amenities, and any services provided by the landlord are incidental. That applies throughout the whole range of leasehold properties.
    When I was a lad, we used to go to birthday teas. When we went to birthday teas, we consumed buns. When we consumed buns, there were some that had little bright red cherries on them. I do not think that those buns tasted any better than the other sort, but they were always the more popular. What the Government have now done is to spoil the whole look of this bun by removing the cherry from the top of it.
    Mr. Lubbock: There have been some extremely curious propositions advanced this evening, including that of the hon. Member for Lewisham, North (Mr. Moyle), who says that when a Minister maintains that he has not been influenced from any quarter one can take his word for it. The Cadogan Estates and the other big landlords have been waging an active campaign behind the scenes, perhaps not directly with the Minister—I dare say they have not approached him personally—but no doubt with the officials of the Ministry there has been a great deal of coming and going, the big landlords have got their way, and I greatly regret it.
    The other very curious thing was the statement made by the hon. Member for Woolwich, West (Mr. Hamling) that it did not matter if justice was not done to people above a certain income level. That is the most curious and abhorrent doctrine I have ever heard expressed in this House. I hope that on reflection he will agree that this is not really his view and that he only said it in the heat of the moment.
    Mr. Hamling: If the hon. Member reads my remarks, he will see that I am against people making very big capital gains. That is my objection.
    Mr. Lubbock: If the hon. Member had said that I would have agreed with him,

    1515
    but it has already been shown how that can be taken care of in another part of the Bill. The hon. Member also said that he was not concerned with justice for millionaires. I am concerned with justice for every citizen no matter what his income. By reinstating these rateable values from the Bill the Minister has not only harmed millionaires but others.
    Mr. Hamling: Does the hon. Member say that it is just for wealthy people to make very big capital gains?
    Mr. Lubbock: I have already stated my view on that. It is quite possible to put it right in another part of the Bill. It was highly significant that the Minister did not use the argument about the enormous uncovenanted gains by millionaires to alter these limits. He has tacitly admitted that this is no longer a point in the Amendment before the House.
    The third extremely curious proposition was that by the hon. and learned Member for Solihull (Mr. Grieve), who suggested that however violently one may oppose some Measure introduced by the Government it did not matter if one did not cast a vote against it in the Division Lobby. I always thought that one of the most important duties of hon. Members when they thought the Government wrong was to register that belief by going through the Lobbies. I am sure that the Leader of the House will be glad to hear this new theory because it may be a means of saving time.
    As to conversions, the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) was quite amusing, but he did not get to the nub of the problem. The Foreign Secretary, with whom he compared the Minister, was converted yesterday, but he is not actually a convert, he is an apostate. The Foreign Secretary has made only one somersault, whereas the Minister has made two. From my reading of the hagiographers and theologists I find no example, not even that of St. Lawrence on the gridiron, to compare with this. I do not think that when St. Lawrence came off the gridiron he lapsed into the pagan faith again as the right hon. Gentleman has done.
    What the hon. Member for Oxford (Mr. Luard) said was not only relevant
    1516
    to the £200 rateable values with which he is concerned in his constituency, but to any limit we might mention. There will always be a difference between those who are just below and those who are just above the limit. A person who is just above the limit may have spent a large sum of money on a house which has put it just above the rateable value which has been chosen. The hon. Member was advancing an argument, not against the £200 as it applies to his constituency, but against any greater value limit in the Provinces as well.
    8.15 p.m.
    Let us look at the comparison between the principle here and that in the Rent Acts from which these limits derive. I can claim to speak with knowledge of those Acts, because I was on the Rent Bill Committee. I was convinced by the arguments of the Leader of the House, who was then Minister of Housing and Local Government, about the limit of £400 in Greater London and £200 in the Provinces being perfectly right and proper. One reason was that we had had a recent survey by the Milner Holland Committee which found plenty of housing available in Greater London with a rateable value of £400 or £500.
    That meant we were in the context of an arm's length market and not of an artificial forcing up of rents by reason of scarcity element. The Minister went on to say that £400 in Greater London and £200 in the Provinces were slightly higher limits than were strictly necessary, but that was deliberate and intentional because it was necessary to have some reserve in the open market to see that the rateable value was appropriate lower down. These were all very carefully detailed arguments which have been entirely absent from our discussion this afternoon. All that the Minister has said is that he has taken these limits from the Rent Act, 1965, and that because they are in that Act they must be in this Bill.
    Two entirely different arguments apply. We are not concerned with problems of scarcity and ensuring that we have property within these rateable limits and the other considerations which led to the presentation of the legislation to the House by the Government in 1965. We need an entirely separate justification of these rateable value limits based on first principles. The Minister owes it to the

    1517
    House not merely to pass figures from one Measure to another when they have no relevance whatever in the context of leasehold property.
    I agree with hon. Members who have said that an absence of rateable value limits in this Bill is vitally necessary to preserve logic and consistency. I disagree with the hon. Member for Woolwich, West, who likes to import a little illogicality to our debates. We should examine the facts and come to a logical conclusion. By doing what he has done this afternoon the Minister has been making the House a laughing-stock. I hope that he will not succeed in his attempt but that hon. Members on both sides of the House who object to this volte face will join us in the Division Lobby in opposing it.
    Mr. E. Rowlands: I can follow the hon. Member for Orpington (Mr. Lubbock) in his latter comments because I was one of the 18 who in Committee supported the removal of the limits. With the hon. Member for Basingstoke (Mr. David Mitchell), the hon. Member for North Fylde (Mr. Clegg), the hon. Member for Hornsey (Mr. Rossi) and others I supported the move to get rid of the limits.
    I found it a little unconvincing because I see so much eye to eye with him on leasehold matters that the hon. Member for North Fylde said that he would not have voted for the Amendment had he known the confiscatory nature of the compensation provided for in the Bill.
    Mr. S. C. Silkin: Will my hon. Friend allow me to assist him on the point he has made? Does he recall that when the matter came to a vote the hon. Member for Crosby (Mr. Graham Page), who had not then intervened in that debate, said that in view of the circumstances he would intervene and that he wished it m be known that he would vote against the Amendment for the very reason that he objected to the compensation principles in the Bill. None the less, all the other hon. Members of his party voted in favour of the Amendment.
    Mr. Rowlands: My hon. and learned Friend is quite right in his description of what happened. The hon. Member for Hemel Hempstead (Mr. Allason), who is on the Opposition Front Bench, did
    1518
    not associate himself with the remarks of the hon. Member for Crosby (Mr. Graham Page). We are all in this together and we can support each other on this Amendment. The hon. Member for North Fylde said that he thought the Minister had been hearing voices. I regret that apparently he has not heard our voices. The Minister contends that there is a need to limit the rectification of the contract and that we should make sure that the rectification does not also cause hardship.
    My hon. Friend the Member for Oxford (Mr. Luard) gave conclusive proof that hardship would occur in cities such as Oxford and Cambridge. I believe that certain types of property and leaseholder would be discriminated against. My hon. Friend cited the example of someone taking active steps to improve the quality of his house and thereby raising its rateable value.
    I want to cite the case of a small but important group of people in my constituency who should not have been excluded from the terms of the Bill. I cite the instance of an oldish Victorian house, not an investment property as such, in which the family has lived for many years. The children have now left home and the husband and wife are living in a house which is larger than they require. It is leasehold property. They take the sensible and socially laudable course of letting off the first and second floors. They live on the ground floor as owner-occupiers. If they lived in the house on their own, the rateable value would not be anywhere near £200, but, because they have decided to let off the two upper floors, the total rateable value is £202, made up as follows: the rateable value of the part they occupy is, perhaps, £70; the first floor is worth £70; the second or top floor is worth £62.
    This type of person and property will, if the limits are included, be excluded from the terms of the Bill. This type of leaseholder should not be penalised. In every sense of the word, he qualifies under the terms of the Bill. He qualifies in that he has lived in the house for a long time. He qualifies in the general sense of the type of lessee or leaseholder we are interested in, a person who in every sense of the word owns his house. He may have built it himself, or he may have bought it from a building contractor.

    1519
    In every sense of the word he is a leaseholder under the terms of the Bill. Yet, because of the rateable value restriction, he is excluded. I should like to see the rateable value limits deleted. If nothing else, I would like the Government to take special note of this type of property and leaseholder.
    The whole business of rateable value limits is absurd, because we are also asked to approve an Amendment to provide that the time at which it is to be judged is 23rd March, 1965. Properties which on that date had rateable values, in London of over £400 and in the provinces of over £200, are to be included in the terms of the Bill. It may be that in 1967 a house which on 23rd March, 1965 had a rateable value in the provinces of more than £200 will no longer be so highly rated. Am I right in thinking that a leaseholder of such a house will not be able to obtain benefits? If I have a house which on 23rd March, 1965 had a rateable value in excess of £200 but which now, because of happenings in the neighbourhood, has a rateable value of less than £200, will I be excluded from the terms of the Bill? According to the consequential Amendment, I shall be.
    Where is the logic of such limits? If there are to be limits, I ask the Government to think again about these limits of £400 or £200. As the hon. Member for Orpington (Mr. Lubbock) and others have said, the rateable value limits used in the Rent Act have no logic in the context of leasehold reform. No one in the House would think any the worse of my right hon. Friend if he undertook to reconsider this matter with a view to changing his mind yet again. The case has been so strongly put by both sides that this should be done.
    Mr. Hugh Rossi: I want to follow my right hon. Friend for Kingston-upon-Thames (Mr. Boyd-Carpenter) and plead very mixed interests. I pleaded them on Second Reading—professional, personal and constituency interests. I also want to follow my right hon. Friend in some of his observations about the remarkable conduct of the Government in general and of the Minister in particular.
    In explaining the Amendment, the Minister said that the Government's
    1520
    attitude was one of hesitation and caution. Correct English usage would substitute the words "vacillation and humbug" for "hesitation and caution". This sordid chapter in this unhappy Government's hesitation began with the White Paper published in February, 1966, in which the country was told that the basis for leasehold reform would be subject to these rateable value limits. The General Election which followed was fought on this basis.
    The Conservative Party took the view that these rateable value limits were wrong and illogical. Its spokesmen said this throughout the General Election campaign. I fought this issue in my constituency. The Conservative Party stated that the compensation terms proposed in the White Paper were confiscatory and wrong. During this debate some of my right hon. and hon. Friends have, quite properly, chosen to link the two matters of compensation and rateable values. They have taken the view that, as long as the compensation remains wrong, they should seek to restrict the Bill in its operation as much as possible.
    I want to concentrate for a few moments on the Government's attitude. When the Bill went to Committee, it was plain for all to see that there was an open door. During the months since publication of their White Paper, the Government had had a change of mind on this question, and it required no great inspiration for the hon. and learned Member for Dulwich (Mr. S. C. Silkin) to put down his Amendment removing the rateable value limits. Member after Member on the Government side of the Committee spoke in favour of that Amendment, and, when he replied to the debate, the Minister said:
    "… it is right and proper that I should assure the Committee that if this Amendment is withdrawn the Government will put something down on Report to meet the wishes which have been expressed here".—[OFFICIAL REPORT, Standing Committee B, 11th April, 1967; c. 81.]
    The wishes there expressed were for the removal of the rateable value limits. We have all witnessed the agile but rather pathetic somersault which the Minister has had to perform in public today.
    8.30 p.m.
    One can only inquire what has happened between the Committee stage, but

    1521
    a few weeks ago, and today. Those of us interested in this matter noted that, immediately after the decision of the Committee, which, but for my hon. Friend the Member for Crosby (Mr. Graham Page), was unanimous—just one vote against—there was a lull, and then, suddenly, 10 days or two weeks later, what had happened seemed to hit home. There was a spate of articles and letters in the national newspapers written by or on behalf of representatives of the larger property owners, particularly those concerned with estates in the city centres. It is common knowledge that there was intensive lobbying by these large vested interests. The Minister received deputations from these gentlemen and their representatives. We know that this went on. It is public knowledge.
    Plainly, the Minister has given way to that pressure, to that political lobbying, and we now have the remarkable spectacle of the Labour Party as the friend of the large property interests of this country. I do not complain that these landlords used proper constitutional means open to them to endeavour to protect their personal interests. They used the time-honoured method of lobbying and political pressure. There is nothing to be said against them for doing it. But one must comment and express surprise that the Labour Government, with all the propaganda which they put out on class warfare lines about vested interests, should have succumbed to that pressure. I find it most remarkable. But there it is. This is the conclusion to be drawn and the lesson for the country as a whole, plainly spelt out by the events of the last few weeks.
    I have a great deal of sympathy for those large property owners who fought so desperately in protection of their interests. They made their complaint on two grounds. First, they said that the provisions of the Bill are confiscatory. So they are. This side of the House fought the Bill line by line on the question of compensation. Not one opportunity was lost to try to amend its provisions on compensation and to make sure that a fair price was paid on enfranchisement of a leasehold interest. We must continue to do that. This is the attitude of my right hon. and hon. Friends, that the Bill is wrong in the matter of compensation.
    Mr. Deputy Speaker: Order. We are not dealing with compensation on this Amendment.
    Mr. Rossi: I am grateful to you, Mr. Deputy Speaker, if I have strayed too far from the point, but I am seeking to follow arguments which have been put forward on this matter.
    Mr. Deputy Speaker: That may be, but we are not discussing compensation on this Amendment.
    Mr. Rossi: I bow to your Ruling, Mr. Deputy Speaker.
    The effect of having the rateable value limit now so as to protect the large property interests is that we shall have one law for the small landlord and another for the rich landlord. That is what the Party opposite is doing. The small landlord owning freeholds in the less valuable properties will be subject to the enfranchisement measures of the Bill—
    Mr. Tony Gardner: Do I hear the hon. Gentleman aright? Is he suggesting that only small landlords own small houses, or have small houses built on their land?
    Mr. Rossi: That does not follow, any more than the old syllogism of sailors and bellbottom trousers. I am saying that it is clear from the events that have occurred that the Government have given way to a particular class of interest, and by introducing the Amendment it is that class which they are protecting. If the arguments made by those interests are correct and the Bill is a robbery against them, they are also correct for the small men, the owners of the less valuable properties. It is equally a robbery against them.
    By adopting these artificial levels the Government are making one law for the large vested interests owning the large estates of high rateable value and another law for the smaller freeholder owning the less valuable property. This is an important point, and let the Labour Party face what it is doing today by this Measure if it pushes it through. I have every sympathy with all the landlords faced with these confiscatory terms. Good luck to them if they can escape one way or the other. I should like to see fair compensation introduced.

    1523
    The other argument that the landlords have put forward for having this rateable value limit reintroduced is that they say that most of the areas in which there is high rateable value are in the city centres due for redevelopment as large estates, that the enfranchisement would lead to fragmentation of those estates, and that it will not be possible to redevelop the centres efficiently and economically once the leasehold interests have been dispersed. That too can be met by an Amendment making special provision for the large city centre estates where there is development potential, just as one can cure the Bill's defects concerning compensation. The way to do it is not by introducing this totally false and artificial means, and importing from another Act arbitrary rateable value levels.
    Mr. S. C. Silkin: Is the hon. Gentleman accepting that second argument? Is he accepting that properties the rateable value of which exceed £400 are the sort of properties likely to be right for redevelopment?
    Mr. Rossi: I am suggesting that the criteria should be kept apart. If it is right that an estate in a town centre should not be fragmented because that would hinder redevelopment, the Bill should contain a special provision dealing with that type of estate and excluding it, in much the same way as in the new Clause put down by hon. Members on this side, which the Government have not accepted. I am trying to say that to attempt to cure all this variety of problems not on their merits by special attention directed to them but by trying to have a blanket means of introducing the rateable value level is quite the wrong approach and will lead to greater hardship, unfairness and complications throughout.
    Let us consider what this rateable value level means. Hon. Members opposite have pointed out that there will be considerable hardship in marginal cases. One example is of a leaseholder with a house rated at £199 outside London and his next door neighbour with a house rated at £201. The leaseholder has improved his property—building a garage was one example given, and putting in central heating is another—has spent money on the building, which, according to the prin-
    1524
    ciples underlying the Bill is his property. But by improving the building he has taken the property outside the rateable value limits, whereas his neighbour who has not spent that money has not done so. By doing this, he has excluded himself from the right to acquire the freehold and has made a present, according to the principles of the Bill, of the improved building to his landlord. That is what happens if one accepts the philosophy of the Government as expressed in the Bill.
    This is one of the illogical side-effects of the rateable values which are being introduced. But the matter is far more fundamental. At risk of boring the House, I want to refer to a decision of the Court of Appeal which was reported in the All England Law Report, 1965. This was the famous case of Peachey Property Corporation against Paddington Valuation Officer. It was fought in the High Court and in the Court of Appeal shortly after the introduction of the 1963 valuation list, because the owners there of certain properties felt that the rating officer had unfairly rated purpose built flats in contrast with houses. They sought the issue of a writ of certiorari and mandamus in the High Court to quash the 1963 valuation list on the basis that it was bad in law.
    The court in this case had to go very carefully into the whole question of valuation procedures in order to see how the rateable values were arrived at by valuation officers. I want to quote the observations of two Lords Justices, because these comments on our valution lists and rateable values are pertinent to the debate, for here we are seeking to exclude certain people from what the Government call the "benefits" of the Bill by the use of a particular yardstick. Let us see what the courts have said about that yardstick and then we can judge whether or not this is the correct yardstick for the House to adopt.
    Mr. Herbert Butler: On a point of order, Mr. Deputy Speaker. Is it in order on this Amendment to discuss the whole of the rating system?
    Mr. Deputy Speaker: It is not in order on the Amendment to discuss the whole rating system but it is in order for the hon. Member for Hornsey (Mr. Rossi) to adduce arguments derived from a judgment of the Court of Appeal in indicating

    1525
    why the Amendment should be objected to.
    8.45 p.m.
    Mr. Rossi: I am grateful, Mr. Deputy Speaker. I want to quote first from the judgment of Lord Justice Danckwerts. It is reported on page 850 of the report:
    "In this respect I must make some comment on the steps taken by the first respondent, in common with other valuation officers, it appears, to obtain information. The relevant Acts give the valuation officers the right to obtain information from occupiers in regard to the properties which they occupy. It is clear that there is a duty on a valuation officer to obtain information, for otherwise it is impossible for him to perform his task. For this purpose forms have been used of a standard kind for, it appears, the whole country, in which a number of questions are asked. It seems to me to be an obvious comment that there must be a duty to ask questions which are useful and are likely to produce relevant information, and not to ask questions which are quite useless, because they may result in confused or equivocal answers and are not likely to produce any useful information. In particular, questions ought to be asked which will disclose the rents which are being paid and the terms and circumstances in which such rents are paid. The forms which we have seen seem extraordinarily inept and most unlikely to produce useful and, indeed, essential information, on the matters on which the valuation officer ought to be informed. In the result the first respondent in the present case seems to have elicited very little useful information and to have neglected what useful information he did obtain. He seems to have proceeded on some preconceived theories and to have relied on comparison of other hereditaments in the area which were not sufficiently relevant in quality to be really helpful, when much more useful information was to hand, if he had taken the trouble to ascertain it. I do not say that comparison with other hereditaments"—
    Mrs. White: On a point of order. Is not this verging on a filibuster—
    Mr. Deputy Speaker: I do not think it is. The hon. Member is entitled to quote from a judgment of the Court of Appeal as indicating why limits on rateable value are not appropriate.
    Mr. Herbert Butler: Although it is in order, Mr. Deputy Speaker, and we must sit here and listen to a discourse about whether the rateable system is right or wrong, must we also listen to aspersions, in the guise of statements by judges, upon rating officers who carry out a statutory duty? Is this what we are here for on the Amendment?
    Mr. Deputy Speaker: I have ruled that on the Amendment, which is concerned
    1526
    with whether there should be limits concerned with rateable value, it is in order for the hon. Member to give the basis on which rateable values are held by the courts not to be appropriate. There must be some limit to the extent to which the hon. Member may read from a judgment of the Court of Appeal, but in my opinion he has not so far exceeded that limit.
    Mr. Rossi: I am coming to the end of the quotation, but I am satisfied that it was right to read it when one sees the reaction of hon. Members opposite. They do not like to hear this because it destroys their case completely so far as rateable value limits are concerned.
    The learned judge went on to say:
    "I do not say that comparison with other hereditaments is necessarily wrong but they must be sufficiently relevant to be useful. In this way, the first respondent"—
    this is the valuation officer producing rateable values of separate flats and houses which we are about to use to decide whether the leaseholder is entitled to enfranchise, yea or nay—
    "produced results by the disregard of matters which were proper to be regarded and by the consideration of matters which should have been ignored."
    What greater condemnation could one get of this particular yardstick which the Government are seeking to introduce for judging whether a man should be able to enfranchise or not?
    I will read one sentence from the judgment of Lord Justice Salmon at page 855. He said:
    "… the applicants have succeeded in establishing is a fairly high degree of incompetence on the part of those responsible for the valuation list and that as a result of this incompetence the valuation list contains many errors."
    On the basis of that incompetence and on the basis of those many errors, the House is being asked to decide who is entitled to enfranchise his lease.
    The Government should have the courage of their own convictions and be fair with compensation, not to be confiscatory, hold the balance fairly between leaseholder and freeholder and make sure that this Measure is then available to all leaseholders throughout the land.
    Mr. Skeffington: Would the hon. Gentleman have the goodness to tell the

    1527
    House what the final result was? Was not the rating officer in fact upheld?
    Mr. Rossi: Although the court found incompetence and error, it did not find a sufficient mistake in law by the valuation officer of such a nature as to entitle the court to say that the whole legal basis of the valuation list had been destroyed. The judges suggested that the correct move for these litigants was to appeal against each individual rating assessment to the appropriate tribunal. The fact remains that it has been clearly judicially found that the preparation of our valuation lists is a most haphazard and arbitrary exercise. It is wrong for the Government to try to found anything on these arbitrary, haphazard lists.
    Mr. Ivor Richard: I intervene in the debate because I believe that the House should hear the views of someone who was not a member of the Standing Committee. So far, everyone who has taken part in the debate, from the Minister downwards, has been a member of the Standing Committee and was present on the now famous occasion—[HON. MEMBERS: "No."]—in that case I am wrong; however, I believe that I am the only speaker from this side of the House so far who was not a member of that Standing Committee.
    This is a thoroughly bad move by the Government. The history of this matter is that when the White Paper was published a number of us had reservations. As we read the report of what was happening in the Standing Committee, one at least thought that the Government were being principled and consistent, but we now find, for reasons which I do not follow or appreciate, that limits are to be restored.
    There are two issues which the Government have to explain. The first is why there should be a limit at all and the second, if it is necessary to have a limit, is why the Government should have picked the limits which they have chosen. It is noteworthy that, apart from hon. Members opposite, who regard the re-imposition of limits as a victory for their side of the case on leasehold enfranchisement, no one on this side of the House has spoken in support of the Government's proposal to put limits back in the Bill and no one has approved the limits proposed. We have heard no
    1528
    reason in principle why the arguments put forward by my right hon. Friend himself at one stage should now be thrown out of the window.
    The right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), in his usual elegant and sulphurous way, asked my right hon. Friend a perfectly valid question—why, if the principle was right for £399 rateable value in London, it should become wrong at £401 in London, and why, if it was right for £199 outside London, it should suddenly become wrong at £201 outside London.
    My right hon. Friend said that we must be hesitant and cautious. With the very greatest respect, hesitancy and caution are not two of the qualities which the Government were elected to pursue in this particular sphere, and they are not qualities which my right hon. Friend should put forward as excuses.
    Mr. Willey: My hon. Friend ought not to talk about what we were elected upon, because we were elected upon the White Paper.
    Mr. Richard: I accept that. All that I am saying is that those of us who opposed the limits rather regret the Government using hesitancy and caution in this sphere of leasehold enfranchisement as qualities which are somehow or other put forward as an argument in favour of the limits.
    I do not see how the principle can be accepted of putting a limit in, whether the limit be £300, £400 or £500. What on earth is the limit there for? The principle is right, and, after all, we have, since Committee and Second Reading, tried to take a stand on principle. I have had a number of letters from constituents complaining that they feel that they have been rather misled by the way in which the Government have treated this issue. At one stage they found themselves outside of these principles, but when the Committee debates took place they then rejoiced that they were to get the benefits of enfranchisement, the same as others. I have now had letters within the last week complaining that those who thought that they were entitled to enfranchisement, and as far as I can see they were, are not now to have it.
    We therefore have this extraordinary position, and I use the word, I hope, not

    1529
    unadvisedly, that on a matter which was originally put forward as one of principle, the Government appear to have changed their mind and, as far as I have heard this evening, can give no reason for so doing. It is not a step that I welcome.
    Mr. Hale: The hon. Member for Barons Court (Mr. Richard) must not use the word "extraordinary" about the history of leasehold reform. If he had had 22 years of trying to get a Measure introduced, with Labour Governments, if he was in my position of recalling the battles held and the advice and instruction that I had from a Left-wing Attorney-General, who at the moment is writing to The Times as my landlord denouncing the Bill, he will understand that nothing very extraordinary does happen in this connection.
    The really important thing about this Amendment is that usually nothing happens at all. I want to make that clear. I do not wish to be unkind to the hon. Member for Hornsey (Mr. Rossi), who is now absent, because most of us have had a struggle with our stomachs in these last two hours. I do not want to comment on him unkindly, but if I just said de gustibus non disputandum, we could finish it at that, except to say that quite obviously his speech was calculated to cause more embarrassment to the Front Bench opposite than to my hon. Friend or hon. Friends, because the one thing that is quite clear about this is that, whatever views there are on either side, there is not, in all these 100 Amendments put down from both sides, a single Amendment calculated to help tenants.
    The arguments have all been on one side, and I cannot give my right hon. Friend any hope in this connection. The point made by the hon. and learned Member for Dulwich (Mr. S. C. Silkin) about the differing rateable value on new and developing estates is so well known, so clear and indisputable, that the case against my right hon. Friend's withdrawal of his Amendment is so strong that it is not necessary to add a word.
    9.0 p.m.
    On the other hand, I have been very concerned this evening on one aspect, and here I must mention the hon. Member for Orpington (Mr. Lubbock), for whom I
    1530
    have a profound respect. Had he been here I would have told him that I learned about leasehold reform from David Lloyd George. When I was a member of the Committee on leasehold reform I could not get the Liberal Member, who remained a Member of the House up to the last election, to say a word in its favour or to cast an opinion in its favour. This is a controversial subject. I have never disputed that. What influence has been brought to bear I do not know. Often in the corridors the name has been quoted of one of the most distinguished figures in the Cabinet, a man for whom I have a profound and long-standing veneration and a respect for his character and ability perhaps verging on idolatry. But if the Archangel Gabriel with a flaming sword came to me tonight and offered to improve my golf swing, I should say that I would prefer Jack Nicklaus.
    I have been in politics for a long time. I hardly recall an occasion in my political experience when a Minister has conducted such a controversial and difficult Measure, the basic principle of which was conceived in difficulty and elaborated in explanation. Although it is an admirably drafted Bill in many ways, it is one in respect of which the Court of Appeal will say that, roughly speaking, it means what the Minister said it meant. This is almost an unprecedented occurrence on any Bill in the last 10 years. But the Minister, who has supported the Measure and believes in the Measure, has presented the case with conspicuous moderation. He has today accepted two Amendments from the Opposition, either in principle or on consideration, not wholly with my support, but at least with reason and with a desire to meet every possible case which can be put. He has done this under fairly constant attack and in the face of some gibes which might not have been made with a single-minded desire to put through a major social reform.
    I hope that before I go I shall see this Government put through a major social reform. I think that we are witnessing the process. Therefore, I beg my colleagues, however strong their views, to consider their attitude before they force this issue into the Lobby. I appeal to them not to add more fuel to the fire of controversy.

    1531
    I hope that my hon. Friend the Minister of State to the Welsh Office will treat the arguments which have been put forward with respect. It has already been said that some matters will be reconsidered in another place. I hope that we shall have an undertaking that the powerful arguments which have been deployed today will be reconsidered in another House and that we shall feel that we can, with honour, not press strong views into the Lobby tonight.
    The Minister of State, Welsh Office, (Mrs. Eirene White): In the famous sitting of the Standing Committee, my right hon. Friend the Minister gave the following undertaking:
    "… we will put something down on Report that will afford the opportunity for further debate".—[OFFICIAL REPORT, Standing Committee B, 11th April, 1967; c. 82.]
    I think that we must all agree, after the hours that we have been sitting here, that that pledge has been amply fulfilled.
    I have the utmost sympathy with the Opposition. I sympathise with those Members who happily revolted against the leadership of the hon. Member for Crosby (Mr. Graham Page) and who rushed with almost Gadarene zeal to vote with the Government on this matter and who now have to explain, sometimes—if I may respectfully suggest it to the hon. Member for Hornsey (Mr. Rossi)—at inordinate length, why they have changed their view. No one could have known that the case which he was describing was lost, but never mind.
    I have some sympathy with the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), who has made it clear that he has a personal interest in this matter. He would be less than human if at one moment a hope did not rise in his breast that his house would be included, only to have the cup dashed from his lips. But he may have a longer lease than I had thought—
    Mr. Boyd-Carpenter: In fact, I have quite a long lease. In any event, in respect of any gift from this Government, I am afraid that I would say, Timeo danaos et Bona ferentes.
    Mrs. White: That is very high-minded, but, if the right hon. Gentleman has such a long lease, perhaps he is not quite so high-minded as all that.
    1532
    It has been suggested that the reconsideration which my right hon. Friend said that he would give and which has resulted in the restoration of the limits included not only in the White Paper but also in the Bill as published, has been due to some kind of pressure. I say with the utmost emphasis that that is completely untrue.
    It is true that the great estates, as they have been called, have made their representations, as they are entitled to do. Various people have taken perfectly proper steps to protect their interests, as they see them, and, to our knowledge, certain estates have circulated brochures, letters and so on to various hon. Members. We do not suggest that that did not happen. It did.
    I can assure the House that we were not moved by the picture painted in one of the Sunday newspapers of Lord Cadogan being driven from the United Kingdom into estate speculation in the Bahamas or elsewhere. That hardly influenced us.
    Turning to the special plea that the great estates have somehow to be protected, otherwise they may break up, I am sad to say that anyone looking round London is only too well aware that the fact that there may have been some historic ownership of land has not given any guarantee of the preservation of aesthetic standards. As The Times pointed out only this morning, one has only to look at Portman Square and what has happened to it. To take a slightly less aristocratic level, one of the most delightful parts of St. John's Wood was ruined when the leases fell in. One cannot take seriously the argument that there is some automatic protection if the great estates are left untouched. If that were so, it might have been a strong argument. Unfortunately, we know only too well that the great estates can fall for the wiles of developers, just as small men may do. That argument, apart from the fact that there are other arrangements in a later Clause to deal with that aspect of it, did not move us at all.
    On the other hand, we were influenced to a degree by some of the wealthier members of the Socialist Party who were shocked when they discovered the enormous tax-free capital gains which they were liable to make under the Bill if the limitations were removed entirely. That

    1533
    was something to which we listened. When one examines the windfalls that could accrue to people with short leases in central London, the sums are such that one could not easily defend them.
    In any case, it was not for those people that we have pressed over the years for this Measure. Here I speak as a Welsh Member. It was, after all, for the people in South Wales, in Lancashire, in Birmingham and in some areas of London where these conditions existed—and South Wales was the classic instance—that the Labour Party campaigned for many years for leasehold reform. Our aim was to bring relief to leaseholders who suffered from the law, not only at the moment of the expiration of the lease, but for a number of years beforehand because of the difficulties, which we discussed in Committee, such as those of obtaining mortgages, and so on.
    We had them in mind, but I think my right hon. Friend made clear the very serious consideration which was given to this matter following our discussions in Standing Committee. It was this which led the Government to the conclusion that if we removed all limits, or if we put in some other ones—and various limits have been suggested, including those in the Amendments—we would find ourselves in even greater difficulty. In response to pleas from both sides, my right hon. Friend naturally said that he would look at this again. He did so. He looked at it with great care, and he has, I think, explained to the House that if we remove all limits there will he the real windfalls—
    Mr. Rossi rose—
    Mrs. White: I think not. The hon. Gentleman had a very long say in the debate [HON. MEMBERS: "Give way."] No. I am sorry, but we have taken a very long time over this set of Amendments. I understand that we wish to take the remaining stages of the Bill tonight, and I therefore suggest that we should make as much progress as possible.
    My right hon. Friend made it plain that if we resolved all limits we would be in certain difficulties. If, on the other hand, we were to put in other limits, we would find that, wherever we drew the line, there would be anomalies on one side or the other. We recognise that there are difficult cases. My hon. Friends have men-
    1534
    tioned a number of instances, and we fully understand that anyone who is near the borderline of an administrative decision, whatever it is, is apt to feel aggrieved. We sympathise with that point of view.
    On the other hand, if there are no limits, other difficulties will arise which will arouse other frustrations, particularly where there is what in lawyers' jargon is called mixed property. There will be the utmost difficulty of definition. By retaining the limits in the Bill we avoid a great deal of the undoubted jungle in which we would rind ourselves in defining mixed properties.
    When my right hon. Friend made it clear that the limits were to be restored The Times called this a grand triumph for pragmatism. In matters of this kind it is not a bad thing to be pragmatic. I assure my hon. Friends, who I know feel strongly on this matter, that we have looked at it extremely carefully. We would have met the wishes of both sides of the House had we felt that we could conscientiously do so, but having looked at the matter we felt that we could not.
    9.15 p.m.
    My hon. and learned Friend the Member for Dulwich (Mr. S. C. Silkin) asked for some special exemption for premises which would be dealt with under Clause 19. I respectfully suggest to him that that kind of exclusion would not overcome the problems of the large or mixed properties to which my right hon. Friend referred earlier. As the hon. Member knows, estates which have a certificate of good management will almost always be estates with mixed properties of various kinds—some enfranchised and some not, even though the tenant would have the right to do so; some commercial and not touched by the Bill, and others properties where the tenants have decided to apply for an extension of the lease instead of enfranchisement. It is for that reason—
    Mr. Lubbock rose—
    Mrs. White: I am sorry; I cannot give way to anyone. We have taken a long time. For the reasons that I have given I advise the House that the Government are not able to accept the Amendments to my right hon. Friend's Amendment.
    Mr. Lubbock: Before the right hon. Lady sits down will she deal with the

    1535
    argument that I put, that the considerations in the minds of the Government when introducing these rateable value limits in respect of the Rent Act were carefully defined and based first on the Milner Holland Committee's recommendations and, secondly, the careful arguments which the then Minister—the present Leader of the House—produced from first principles. The figures of £200 and £400 were then decided upon. Is it purely coincidence that those figures happen to be appropriate in this case?
    Mrs. White: The limits seemed to be reasonable for this case. The hon. Member said that we were not concerned with problems of scarcity, but that is not entirely so. One of the moral principles behind the Bill—and here I am speaking again as a Welsh Member—is that many leaseholders in South Wales and the people who built the houses originally had no choice, whereas those who come above the rateable value limits as suggested are better placed than those who come below the limits in the choice of their habitation.
    Mr. Graham Page: When a Government find it necessary to legislate for breaking contracts and confiscating property, as the Minister said, we should look to the area of hardship and try to keep within it. That area is probably covered by lower figures than those now put forward by the Government—I suggest about £150 for the provinces and £300 in London. But the Minister is at least approaching the area of hardship by providing limits of £200 and £400. If the terms of compensation had been fair this problem would never have arisen. While there is unfair confiscation in the Bill, however, the Bill should be restricted to that area of hardship, and I therefore advise my right hon. and hon. Friends to support the Government in restoring these limits.
    Question put, That those words be there inserted in the Bill:—
    The House proceeded to a Division—
    Mr. WALTER HARRISON and Mr. MCBRIDE were appointed Tellers for the Ayes, but no Member being willing to act as Teller for the Noes, Mr. SPEAKER declared that the Ayes had it.
    Mr. Speaker: We now come to Amendment No. 7, with which we will discuss also Amendment No. 8 and the Amendment thereto, at the end to insert:
    Provided that that part has (or, if separately rated, would have) a rateable value on the appropriate day of more than one-half of the rateable value of the house on that day.
    Mr. Wiley: I beg to move Amendment No. 7, in page 2, line 8, to leave out from 'tenancy' to 'his' in line 9 and to insert, 'occupying it as'.
    This is a drafting Amendment.
    Mr. Arthur Jones: May I refer to the Amendment to the Government's Amendment, No. 8?
    Mr. Speaker: I have been waiting patiently for someone to do so.
    Mr. Jones: I am glad to have your assurance, Mr. Speaker.
    The Amendment concerns the difficult question of a mixed hereditament, a residential property sublet not only for residential but for commercial purposes. We are dealing with the relationship of the leaseholder and the freeholder in this context.
    The Government's aim is based on the fact that long leases have worked very unfairly against the occupying leaseholder, but this is not the case when a leaseholder is making a substantial annual profit from a property by sublets of any description. What justification is there for the alleged grounds of unfairness in these conditions and for enfranchisement of a leaseholder in these circumstances?
    In an earlier Bill we had the complications of mixed hereditaments and ran into difficulties resulting not only from the differing rateables of mixed hereditaments but from circumstances in which separate occupancies were not separately rated. The terms of the Amendment take account of those circumstances. There is, therefore, a substantial case to be made on grounds of equity for the exclusion of this type of mixed hereditament. For that reason we ask that this aspect of enfranchisement should be considered.
    Mr. Skeffington: The proposed Amendment to our Amendment No. 8 would have the effect that if the leaseholder had sublet part of his house he would not qualify if the sublet part amounted to more than half the house on a rateable

    1537
    value basis. I can well understand that there was something to be said for some proposition in this direction when the Bill was as it was before we had our last somewhat lengthy discussion, because with no rateable limits it is perfectly true that although a single property as defined in the Bill could, subject to the leasehold agreement, be held by a leaseholder, the possibilities of very considerable commercial letting would have been there. We feel, however, that with the restoration of the rateable limits a provision of this kind is unnecessary.
    Such a provision is not only unnecessary but would probably create a very large number of anomalies and a good deal of unfairness. I will not weary the House with all the possibilities—I am sure that they are known to most hon. Members who have taken a close interest in the subject—but I can refer to the most obvious case of the shop with the tenant of the shop living over. By the proposed Amendment, if the leaseholder was the occupier of a shop he would no doubt be within the terms of the Bill, because he would be within the terms of the rateable limits, but it is quite likely that the shop, if let separately, would not be within the terms because the commercial or business valuation is a higher valuation in many properties.
    One would then have the case where the shopkeeper, being the original leaseholder, had retired and sublet, which is the normal thing, but because the property that he might have occupied all his life, giving good service to the community, would by the Amendment be outside the Bill because he would be occupying less than half the house on a valuation basis. That is unfair and anomalous. One could understand that there was a case for the provision if the rateable value limitations had been removed, but with their restoration it does not seem necessary. The type of case I have mentioned is only one of a number in which the result would be anomalous and unfair. For those reasons, I hope that the House will not accept the proposed Amendment.
    9.30 p.m.
    Mr. Graham Page: This Bill was intended to protect the long leaseholder's home, not his business. We must draw the line somewhere between commercial properties and private residences. We
    1538
    have tried to draw the line by the Amendment to the Amendment. It may be that we have drawn it just a fraction in the wrong place. The Parliamentary Secretary gave the example of a flat with a shop underneath, but as the Bill stands there is no line at all. The Government have not come forward with any positive proposition of how the distinction is to be made between commercial and residential premises.
    In subsection (3) the Bill does not apply to premises which are ancillary to some other purpose, but that is vague. We have endeavoured to bring some sort of certainty to the Bill by this Amendment to the Amendment. I am sure that it would bring that certainty and would avoid the sort of case where the tenant may be living in a small apartment of a large house and letting off the whole of the rest of the house. Is he entitled to the franchise or not? It is impossible to tell as the Bill stands. How does one distinguish that case from the case of a guest house, a boarding house or an hotel? Is the letting off of the rooms ancillary to the residence, or is the residence ancillary to the letting of the rooms?
    I regret that the Government have come forward with nothing positive but merely with a negative statement that the line suggested in our Amendment is not in the right place. If we could have a positive suggestion of how the courts are to determine whether the tenant is entitled to franchise or not it would be far more satisfactory.
    Mr. Arthur Jones rose—
    Mr. Speaker: The hon. Member has exhausted his right to speak. The Amendment we are discussing is in the name of the Minister. The hon. Member spoke on his Amendment but did no: move it as it was not selected.
    Mr. Arthur Jones: I was about to refer to the Amendment.
    Mr. Speaker: Order. I know the hon. Member wanted to comment on what the Parliamentary Secretary said but we are on report and the hon. Member has exhausted his right to speak. I am terribly sorry.
    Amendment agreed to.
    Further Amendments made: No. 8, in page 2, line 11, leave out from beginning to 'and' in line 14 and insert:
    (a) references to a person occupying a house shall apply where he occupies it in part only:
    No. 9, in line 26, at end insert:
    (4) In subsection (1)(a) above, 'the appropriate day', in relation to any house and premises, means the 23rd March 1965 or such later day as by virtue of section 43(3) of the Rent Act 1965 would he the appropriate day for purposes of that Act in relation to a dwelling house consisting of that house.—[Mr. Skeffington.]

    Clause 2.—(MEANING OF "HOUSE" AND "HOUSE AND PREMISES", AND ADJUSTMENT OF BOUNDARY.)
    Mr. Skeffington: I beg to move Amendment No. 11, in page 2, to leave out lines 27 to 30 and to insert:
    (1) For purposes of this Part of this Act, 'house' includes any building designed or adapted for living in and reasonably so called, notwithstanding that the building is not structurally detached, or was or is not solely designed or adapted for living in, or is divided horizontally into flats or maisonettes; and

    (a) where a building is divided horizontally, the flats or other units into which it is so divided are not separate 'houses', though the building as a whole may be; and

    (b) where a building is divided vertically the building as a whole is not a 'house', though any of the units into which it is divided may be.

    (1A) References in this Part of this Act to a house do not apply to a house which is not structurally detached and of which a material part lies above or below a part of the structure not comprised in the house.
    Mr. Speaker: With this Amendment we can discuss the Amendment to the Amendment, to leave out subsection (1A), which is in the name of the hon. and learned Member for Dulwich (Mr. S. C. Silkin), plus Amendment No. 106, in Clause 14, page 22, line 34, at end insert:
    (6) Notwithstanding anything contained in section 2 of this Act, where a building is divided horizontally into flats or other units designed or adapted for living in and subject to separate long tenancies at low rents, the obligation to grant an extended lease provided for in this section shall apply to each such flat or other unit as if it were a separate house and shall not apply to the building so divided.
    Mr. Skeffington: Hon. and right hon. Members who were on the Committee will remember that it was suggested that the Government should give some further positive definition to the word "house" in the Bill, so that for the purposes of these benefits while there would not be
    1540
    too narrow a definition there would be something a little more precise than that which appeared in the Bill at that time.
    Some guidance was given as the Bill was originally introduced by the words in Clause 1(2,b) about the tenant's occupation of part of the house counting as occupation of the whole
    "unless two or more parts are so divided off from each other as to make the house in its existing state unsuitable for one occupation."
    This provision was much criticised. It was suggested that a leaseholder who had attempted to deal with possible occupancy of his premises by others in a sensible way by making a permanent alteration would be excluded by the operation of the words
    "so as to make the house in its existing state unsuitable for one occupation"
    whereas a leaseholder who had behaved in a more slapdash fashion and not made arrangements, by way of a separate staircase, for example, would be within the Bill.
    When the Committee agreed to the removal of the words in relation to a house being so divided as to be unsuitable for one occupation, it became clear that, although we had been doing the correct thing, as the Government thought, in bringing in a leaseholder who had made a proper conversion, we were at the same time, by the wording of the Clause, running some risk that the other type of leaseholder would fail to qualify. Hence the present redraft to Clause 2 which, while not dealing exhaustively with "house", gives it a wide meaning to include, first, converted property. This could be a converted mews or, in the country, a barn or oast-house, or perhaps a purpose-built dwelling and shop combined.
    It has always been the Government's intention that mixed premises of this type should be covered by the Bill. This also includes, not purpose-built flats, which are excluded, but old property which has been the subject of a lease and which has been converted into flats. These are now within the definition of the new subsection (1). Paragraph (a) enables a leaseholder to count as a house a house which has been converted into flats or maisonettes. An individual flat will not count as a house. So a leaseholder can compulsorily enfranchise the whole building as long as he has the long lease of it and can live in one flat himself.

    1541
    Paragraph (b) deals with the case where a leaseholder living in a house formed out of a vertical division—it may be an old house—it might be an old vicarage, premises of the type in which I live, which could be vertically divided, although they have not been so vertically divided, but where two separate hereditaments are created—and by that division it counts as a house and so qualifies.
    Subsection (1A) is the previous subsection (1) cut down. There was a specific reference to a semi-detached house or a terrace house. Now the provision goes a little further, as it covers what ordinarily would be counted as separate houses, for example, houses built on a slope. Now we have the definition which we have had to introduce elsewhere to exclude flats. It is often the case that where there are separate houses in this kind of geographical position the question of support arises. Portions of one house may overhang another house. These houses might raise problems of shelter or support. Subsection (1A) goes much further and I hope this makes the whole position clear.
    It is true that we have not given an absolutely precise definition. One could have gone a good deal further, but the danger of going much further is that one could exclude perfectly genuine residences, particularly those made by conversion in one form or another. This is very popular today, and what we are putting to the House now is the result of the best advice we could get. The question has been discussed widely, and what is now proposed has been generally accepted by various bodies. We had to tidy up the Clause because we removed the provisions about dividing the house so as to make it incapable of one occupation. but, at the same time, we have not, we hope, drawn it so rigidly as to exclude those cases of conversion which might fall outside a more precisely drawn definition.
    Mr. Hale: Before my hon. Friend sits down—
    Mr. Grieve: Before the Minister sits down—
    Mr. Speaker: Order. Two hon. Members seek to ask a question before the Minister sits down. We will take them in turn.
    Mr. Hale: I am not trying to impugn the validity or desirability of the point which my hon. Friend makes, but I am concerned, because I had not heard him clearly, on the question of a house divided horizontally and a house divided vertically, expressions which do not convey anything very clear to me, unless one is talking—if this is it, we had better say so—about the division between separate tenements or separately occupied parts of a house.
    The opening words of the new subsection provide that "house" includes any building designed or adapted for living in, which could cover a pig sty or a bird cage, notwithstanding that it was not originally solely designed for living in, which could bring in a piece of cheese. It seems to me that the inclusion of the rather curious words to the effect that the building could reasonably be called a house is made simply because nothing else in the Clause could reasonably be called a house, and if the judges have to decide what can reasonably be called a house, the words of this Amendment will give them a rather vague question to determine.
    Mr. Grieve: I have always understood that there are many houses, certainly older houses in London in terraces, where parts do overlap. Is the effect of subsection (1A) to exclude from the Bill such terrace houses where there may be overlapping of the structures? If so, is that the intention?
    Mr. Skeffington: I said that we desired not to have too close a definition, but I did not think that we had gone so wide as to encompass the matters suggested by my hon. Friend the Member for Oldham, West (Mr. Hale). It includes any building designed or adapted for living in, and, if it is designed or adapted for living in, it must be such as to comply with the regulations made under the Public Health Acts.
    Perhaps I had better recite the matter again. Originally, we were in the difficulty that, for reasons which have been given ad nauseum in Committee and subsequently, we could not in this Measure, whatever may be done hereafter, include purpose-built flats. There was an argument in these circumstances, where an old house had been converted either horizontally or vertically, about whether in

    1543
    such cases the apartments should be enfranchised, whether the leaseholder of the whole house lost the benefit. The Bill was rather narrowly drawn in the first place, and it had the result that, where a proper conversion, so to call it, had been made, with separate entrance and staircase, the leaseholder who had done the conversion could lose his rights to enfranchise, whereas, if it had been a casual arrangement, with some people living upstairs and using a common staircase, the leaseholder would be able to enfranchise. Therefore we took out the words to which I referred:
    "… unless two or more parts are so divided off from each other as to make the house in its existing state unsuitable for one occupation."
    When we did that it was said that one would have to define the purpose of a house rather more carefully than before in view of the gap we had torn, and at the same time to cover the sort of conversions which are common. With respect to my hon. Friend, I do not think that a birdcage would be suitable, for the reasons I have given, but there is no reason why oast-houses, barns and mews cottages which are now very common conversions should not be included.
    9.45 p.m.
    The point of the hon. and learned Member for Solihull (Mr. Grieve) is that, whereas we subsequently define flats which are excluded for the purpose of the Bill, there are cases such as I have mentioned, particularly of the geographical type, where houses are built on slopes and therefore one part of a house goes over another. These are to be excluded by reason of the definition which excludes purpose-built flats. That is one case. The other is where there may be a row of houses in which one will perhaps find that a small box room or a cistern is over the ceiling of the house next door. Those are not to be excluded, and this definition brings them in.
    Mr. S. C. Silkin: My hon. Friend has explained the purpose of the Amendment—
    Mr. Speaker: Will the hon. Gentleman speak up? I think that the reporters find it difficult to hear him.
    Mr. Silkin: I am sorry, Mr. Speaker. My hon. Friend has explained the purpose
    1544
    of the Amendment, which arises from the removal in Committee from Clause 1 of certain words which had the effect that a conversion of an ordinary house was excluded from the benefits of the Bill. But it was thought that the words in Clause 2(1) might still exclude that type of property. I applaud the way in which the problem has been dealt with in the first part of the Amendment. The dilemma was that one wanted to include that type of building and at the same time to give effect to the Government's determination, at this stage at any rate, not to include flats in the benefits of the Bill. It was necessary to devise somewhat complex wording to achieve those two objectives.
    It seems to me that the objective has been clearly achieved in the first part of the Amendment. There it is specifically stated that where a building is divided horizontally the flats or other units into which it is so divided are not separate houses, and therefore do not attract the benefits of the Bill. For some reason which escapes me at present, the draftsmen, having accomplished both those objectives, has reincorporated into the Amendment the wording to which objection was orginally taken in Clause 2(1) and has put that into subsection (1,a).
    It seems to me that either that is quite unnecessary, because the flats problem has already been dealt with in the first part of the Amendment or that it achieves something, that it achieves the kind of thing to which the hon. and learned Member for Solihull (Mr. Grieve) has referred, that is, it excludes from the benefits of the Bill any building which happens to be above some part of another building. For example, it might be that an ordinary house is built with part above the garage of the next-door neighbour. Indeed, this kind of architecture is becoming more and more common these days.
    Mr. Grieve: The sort of case I had in mind, and which the hon. and learned Gentleman has in mind, is where one house has taken over the basement or cellar of the next house or another floor.
    Mr. Silkin: These are other examples of the kind of thing which could happen. I cannot follow why 1(a) is necessary at all if the purpose is to give effect to the Government's intention at this stage to avoid including flats in the Bill. I hope that my right hon. Friend will look at this matter again because it seems to me

    1545
    that it may have a more far-reaching effect than is necessary and that the Amendment could well accomplish its intent without 1(a).
    Amendment No. 106 is a matter of more substantial principle. Its effect would be that, although flats will not be included in the provisions of the Bill for the purpose of enfranchisement, they would be included for the purpose of the alternative of the extension of the lease. The whole question of fiats was argued at considerable length in Committee. My right hon. Friend advanced a number of substantial reasons as to why we should not give the right to the lessees of flats to acquire their freeholds in advance of the implementation of the Wilberforce Committee's Report on Positive Covenants and other measures which would make it easier for freehold flat ownership to become as accepted in England as I understand it is already accepted in Scotland.
    The Committee was prepared to accept that advice in the Circumstances, but reluctantly, because many of us took the view, just as in the debate on rateable values, that a principles which applies to leases generally should apply throughout the scale—that a principle which applies to houses should apply to flats as well. But we were impressed by the practical difficulties of the freehold flat.
    Towards the end of that debate, it was suggested that the difficulties of creating the freehold flat in no way applied to the giving of the alternative of an extension of 50 years to the lessees of flats. If it is the intention of the Government, as many of us hope, that flats will ultimately be brought within the benefits of the Bill, perhaps in a subsequent Measure, it would be more desirable to prepare the path for that by giving at this stage, the lessees of flats the encouragement of knowing that they could at any rate obtain the extension that the Bill provides for.
    There are no difficulties that I know of in doing this. There are flats coming towards the end of their leases, although it may be true that the majority are more recently developed than houses. I hope that the Government will, therefore, agree to look at this suggestion once again. It was made towards the end of the debate in Committee and I do not think that
    1546
    my right hon. Friend had the opportunity of giving it consideration and commenting upon it during the Committee stage. He has that opportunity now and I hope he will give it at least sympathetic consideration.
    Mr. Graham Page: I hope, on the other hand, that the Minister will not embark on introducing flats into the Bill at this or any later stage.
    I have always wondered how the Minister would apply what has been referred to as "Willey's theory" to flats. With land and a house built on it, one can say that the landlord owns the land and the tenant owns the bricks and mortar. What do you say about a flat—that the landlord owns the air and the tenant owns the bricks and mortar inserted into that cube of air? I do not know how one applies the theory to that. We are obviously not ready in this state of the law to introduce flats into the Bill.
    I join with the hon. Gentleman the Member for Oldham, West (Mr. Hale) in criticising the wording or grammar or whatever it may be of the Amendment. He said that birdcages and pigsties might come within the phrase, "adapted for living in." Why do we have to use this phrase, "adapted for living in"? Why not "built as a dwelling" or "suitable for a dwelling"? This is the sort of thing we are used to. Apart from the preposition ending a phrase, it is a most inelegant statement, "designed or adapted for living in and reasonably so called". A pigsty or a birdcage would not reasonably be called a house, but what about things like the public house, the monkey house, the doghouse? I can think of others, too. It is not phraseology that will be very suitable for interpretation when we come to trying to work out whether a tenant is entitled to enfranchise.
    The hon. Gentleman was right in tackling this by trying to redefine a house. However, this only increases the difficulty of deciding who is the qualifying tenant. We are being presented on Report with something like a new Bill. The Amendment means that with property which may be converted into six, eight or ten flats, so long as a long leaseholder is occupying one small flat in that building he will be entitled to enfranchise the whole of it. This may be applied to well-converted buildings in St. John's

    1547
    Wood or multiple occupation in Lambeth, but in both instances the building can hardly be called the long leaseholder's home, which is what the Bill was originally intended to protect.
    The Parliamentary Secretary said that he was going further than the Government originally intended. He certainly is. He is going further than anyone expected. As I say, we are being presented almost with a new Bill which is enabling enfranchisement of converted houses, and I am not so sure that it avoids the purpose-built flat. The proper interpretation of the Amendment might well be to allow enfranchisement of a purpose-built block of flats, within the rateable limit, if the long leaseholder happened to own one flat in the block.
    Mr. Skeffington: By leave of the House; without wishing to bore hon. Members, I will briefly deal with the first point raised by my hon. and learned Friend the Member for Dulwich (Mr. Silkin). The problem is to bring in flats in old converted houses, while excluding purpose-built flats, for reasons which I will come to connected with Amendment No. 106. To leave out subsection (1A) would undoubtedly remove the disqualification of flats, and we must certainly not do that at this stage, for the reasons we have given.
    As at present advised, we do not believe that there is any point which we have missed.
    Mr. Hale: Will my hon Friend say why? We started with a Clause referring to houses not structurally detached.
    It being Ten o'clock, the debate stood adjourned.
    Ordered,
    That the Proceedings on the Leasehold Reform Bill may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[Mr. McBride.]
    Question again proposed, That the words proposed to be left out stand part of the Bill.
    Mr. Speaker: I remind the hon. Member for Oldham, West (Mr. Hale) that an intervention must be brief.
    Mr. Hale: I hope that account is taken of that necessary intervention in my inter-
    1548
    vention, Mr. Speaker. The Amendment clearly includes the sort of building in which an underground garage or cellar stretches under adjoining houses, and they are frequent and common. I cannot see any argument to suggest that the Amendment does not include those.
    Mr. Skeffington: I do not want to rehearse my arguments. Perhaps my hon. Friend did not follow what I was saying before. I was saying that the Amendment of my hon. and learned Friend the Member for Dulwich to leave out subsection (1A) would remove the disqualification on flats, which is why we think that that provision must stay. I do not say whether there are other consequences. I defined the sort of case, certainly where property was detached—which would be within the scope of the Bill and be enfranchised.
    By his very important Amendment No. 106, my hon. and learned Friend seeks within the compass of the Bill, despite what we have had to say about the difficulties of flats, to give the occupiers of flats or maisonettes on long leases the right to a 50-year extension. Although the difficulties of enfranchisement in this case would not be so great, some formidable objections have been put to us. First, there are a number of old flats on long leases and although the number may be small, which is not a logical reason for not accepting the Amendment, I do not think that there is any great grievance to be remedied.
    Granting the right of extension to flat leaseholders at this stage in advance of other possible legislation in relation to covenants would, we are advised—certainly representations to this effect have been made—adversely affect not only the management, but the financial complications which would arise.
    In view of the representations which we have had and the fact that the position will be reviewed in the Wilberforce Report, it would be premature even to grant extensions at this stage, and I hope that my hon. and learned Friend will he patient a little longer until the Government can bring forward that legislation.
    Amendment agreed to.
    Mr. Graham Page: I beg to move Amendment No. 13, after 'tenancy' to insert 'at a low rent'.

    1549
    This subsection seeks to take into account the extension of a lease as part of an original long, tenancy, and says:
    "Where the tenant of any property under a long tenancy at a low rent, on the coming to an end of that tenancy, becomes or has become tenant of the property or part of it under another tenancy"
    he shall be deemed to be the long tenant under the original lease.
    The Amendment would ensure that his lease at the relevant time is at a low rent, that is, an extended long lease at the ground rent. Otherwise, a tenant on a rack rent who happened to be tenant when he was enfranchised would be able to take advantage perhaps of five years as an ordinary tenant at a rack rent, just because he had continued from a long tenancy. The Clause was not intended to cover a rack rent tenant, I am sure, and the Amendment is, I think, merely a drafting one. I hope that it will be accepted.
    Mr. Skeffington: The Amendment is unnecessary and seems to be based on a misunderstanding. It seems to attempt to secure that the provisions of Clause 3(2), which provides that a short tenancy or series of short tenancies granted in continuation of a long tenancy at a low rent is to count as a long tenancy, operates only if the short tenancies are at a low rent. I think that the hon. Gentleman has fallen into error because this Clause deals with what is a long tenancy and the next one with what is a low rent. The two must be read together because of the complications for a leaseholder to qualify. The insertion of a reference to rent here is not only unnecessary but would be complicated.
    Mr. Graham Page: I understand that the words are really implied there, and therefore I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    Mrs. White: I beg to move Amendment No. 14, in page 4, line 35, at the end to insert:
    (4) Where before the commencement of this Part of this Act a tenancy had been granted for a term of years certain not exceeding twenty-one years, but with a covenant or obligation for renewal without payment of a premium (but not for perpetual renewal), and the tenancy had been once or more renewed so that the total of the terms granted (in-
    1550
    cluding any interval between the end of a tenancy and the grant of a renewal) exceeded twenty-one years, then this Part of this Act shall apply as it would apply if the term originally granted had been one exceeding twenty-one years.
    Mr. Speaker: With this Amendment, we are discussing Amendment No. 12, in page 4, line 11, to leave out 'twenty-one' and to insert 'fifty', plus the four Amendments to Amendment No. 14 on page 9246 of the Notice Paper—in line 1, after 'before' to insert 'or after'; in line 2, to leave out 'twenty-one' and to insert 'fifty'; in line 6, to leave out 'twenty-one' and to insert 'fifty'; and in line 7, to leave out 'twenty-one' and to insert 'fifty'.
    Mr. Graham Page: On a point of order. As we are taking these Amendments a little out of order, I am not certain whether you would permit a Division, Mr. Speaker, on No. 12 should it be desired.
    Mr. Speaker: With all the good will in the world, I cannot go back on the Notice Paper. We are on No. 14 and cannot have a Division on No. 12 now. I am sorry; this might have been thought about before.
    Mrs. White: I have moved Amendment No. 14 with satisfaction because it has been tabled to meet the needs of some deserving leaseholders in Abertillery. We should be happy to receive information about other instances from any hon. Members, but, to the best of our knowledge, it is only in Abertillery, for historical reasons, that this form of leasehold has been established. When the Bill was originally drafted, our historical researches were not as comprehensive as they became later. We were not aware that the Bill would have excluded a number of leaseholders in this mining village who in all other respects were entirely comparable with leaseholders in other parts of the South Wales coalfield. Therefore, as in every other respect they were on all fours with people to whom the Bill was intended to apply, my right hon. Friend thought it proper that we should make provision for them.
    We believe that the situation is peculiar to Abertillery where there are leases which cannot be said to exceed 21 years but where, on the other hand, without any payment of premium there is an

    1551
    automatic right of renewal. We suggest that this is a sensible way to bring this very small number of people, who have just as much right as their neighbours, within the provisions of the Bill.
    Mr. Clegg: Amendment No. 12 seeks to delete "21 years" and to insert "50 years". We had a debate in Committee on a similar Amendment, but that proposed to increase the term to 90 years. In that debate, the Minister made it clear that he wanted to stick to 21 years, for one main reason, that he was following precedent, which, as he told us, he likes to do, particularly the precedent set in the 1954 Act. But I do not think that precedents can help him a great deal in connection with the Bill, because the other Measures with which we were concerned, particularly the 1954 Act, allowed the tenant to stay in the property, whereas in the Bill we are concerned with enfranchisement and the purchase of the freehold, which is completely different.
    As far as I know, there is no precedent for what has been called the "Willey principle"—that is, that the bricks and mortar belong to the tenant. In that principle the right hon. Gentleman is breaking completely new ground and therefore he cannot call in aid precedents which left the freehold of the property in the landlord's hands.
    In Committee, I detected that the Minister realised that by choosing such a short term as 21 years he was raising many difficulties, one of which we have just discussed today—premium leases— and there might he much wisdom in accepting the term of 50 years to which it would be much more clear that the Willey principle was germane. It is very strange that either the landlord or the tenant, in such a short term as 21 years, could have come to the conclusion that the land belonged to the tenant and the bricks and mortar to the landlord. It would not be an economical proposition for the tenant to enter into a 21 year lease and pay for the bricks and mortar.
    In Committee the Minister said that by proposing 90 years we were going further than the Chartered Land Societies. But now we are taking a figure which he said at that time they recommended, namely, 50 years. That figure would be fair and would catch the real long term lease and would not catch, as the period
    1552
    of 21 years does, leases which are outside the spirit of the Bill and which were never meant to be included in it. I hope that the Minister will listen to the arguments and substitute 50 years for 21 years.
    10.15 p.m.
    Mr. E. Rowlands: On my own behalf and on behalf of my hon. Friend the Member for Abertillery (Mr. Clifford Williams), I want to thank the Minister for the Amendment. My hon. Friend the Member for Abertillery is the historian who did the researches and who unearthed the peculiar, unusual leases which turned up in his constituency. Following the debate in Standing Committee and as a result of the evidence which my hon. Friend put forward, this Amendment has been moved to cover those leaseholders, and we are grateful to my right hon. Friend.
    Mr. Boyd-Carpenter: The Government's Amendment serves to strengthen the suspicion which many of us on this side of the House have had that the whole basis of the Bill, which seeks to alter the English law on leasehold, is based upon the problems of Wales. The fact that an Amendment is put down at this stage to deal with one district of Wales strengthens that suspicion. The law on leasehold in this country has served us very well, and it is quite wrong that it should be altered because of special problems in Wales, rather than the Government bringing forward a proposal limited to Wales to deal with Welsh problems.
    I support Amendment No. 12, and I want to express my regret, Mr. Speaker, that, for the procedural reasons which you have indicated, it will not be possible for those of us who support the proposition to show our views in the Division Lobby. If I may say so, it is a great pity, because the issue raised is one of real importance which goes to the root of the Bill.
    At earlier stages in the Bill's progress, both the Minister and the hon. and learned Member for Dulwich (Mr. S. C. Silkin) have argued again and again for the principle by making the assertion that the house was built by the leaseholder. Indeed, the hon. and learned Gentleman will recall that he included that statement, without qualification, in a certain newspaper article which was

    1553
    one of a series to which I had the privilege of contributing.
    I do not think that it is generally true in respect even of a 99-year lease, though certainly in that context it is more arguable. However, plainly, it is not true of a lease of 21 years or a little more. It is inconceivable that any sane person would undertake the cost of building a house on land for which he had a lease of only 21 years or a little more. Such a person would not be acting reasonably.
    Amendment No. 12 tests the sincerity of the Government's proposal. If the Government are convinced and if their supporters are convinced by the argument for giving all rights in the bricks and mortar free to the leaseholder because the leaseholder, either himself or indirectly at his expense has built the house, that is an overwhelming argument for putting 50 years into the Bill. I accept that there may be cases, though they are not the majority, of leases in excess of 50 years where the house has been built by someone who took the land on a ground lease. In some cases, that must have happened, but I do not think that even the hon. and learned Gentleman, with his great knowledge of the subject. could give me an example of someone who has gone to the expense of building a house on land for which he has a lease of only 21 years.
    If that is right, we are going to the heart of the Bill in insisting on taking the Government at their word and saying, "All right. Make this transfer of the rights of one citizen to another without compensation on your theory of the house having been built at the expense of the leaseholder. But do not use that assertion to cover the transfer of property in circumstances in which that cannot conceivably have happened."
    I hope that my right hon. and hon. Friends will press their Amendments, even to what I might call the Abertillery Clause, as a means of indicating, in default of our opportunity to press the matter over the whole field, as I personally would have wished, our opposition to this, and to see whether the Government are using this argument about the leaseholder building as a cover for a general confiscatory measure,
    1554
    or whether the idea, however muddled, really is sincere.
    Mr. Clifford Williams: I thank my hon. Friend the Member for Cardiff, North (Mr. E. Rowlands) for his kind remarks, and I express my thanks to the Minister for tabling this Amendment. If it is accepted, it will relieve great and grave anxieties, chiefly among people in my constituency. With respect to the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), he lives in a more salubrious area. Those who have lived in constituencies such as mine know the problems with which the people there have had to deal for many years, and this provision will be welcomed with joy and with acclamation by them. Because of the leasehold law, we have witnessed legalised robbery for many years. If the Bill is passed it will be one of our greatest measures of social reform, and Amendment No. 14, which I understand is particular to the people in the Abertillery constituency, will settle once and for all the injustice which they have suffered for so long.
    I shall not delay the House for very long. The company which owned a good deal of land in my area some years ago was known as the forty thieves, as were some other people, one of whom lived in another salubrious area, Penarth. Parliamentary language prevents me from using the vernacular of the pit to describe her. Here was one ground landlord who, without pity and without compassion, ruthlessly used this instrument of legal piracy of short term recurring leases to inflict great social consequences on leaseholders for more than 70 years. This is why I must pay my sincere tribute to my hon. Friend for introducing the Amendment.
    In Committee I quoted a poem which was written many years ago, and perhaps I might quote it again:
    "The law locked up the man or woman,
    Who stole the goose from off the common,
    But left the greater villain loose,
    Who stole the common from the goose."
    It is only poetic justice that after all these years opportunities will be given to short term leaseholders, not to rob, not to steal, but to have a fair chance of securing their homes for all time.
    Mr. S. C. Silkin: The right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) raised the question of how one is to ensure that the bricks and mortar principle as applied in the Bill is restricted to those cases where it properly applies, that is to say where the lessee—or his predecessors in title—is the person who has constructed as well as maintained and improved the house. If the right hon. Gentleman had been a Member Of the Standing Committee, he, like his hon. Friends, would have heard a series of debates in the course of which I put very strongly the point of view that it was essential, if the equities of the Bill are to be preserved, that there should be proper definitions and proper limitations to ensure that we give effect to that principle.
    I took the view—and I still do—that one can give effect to it best by the use of Clause 4 rather than Clause 3, and when we come to the next series of Amendments that matter will be considered. Although I have the utmost sympathy for the position in Abertillery, my Amendment raises an entirely different and much more general problem. I am concerned to ensure that in future landlords do not make use of devices for evading the provisions of the Bill so as to deprive lessees of benefits that they would otherwise receive.
    The purpose of my Amendment is to ensure that where, in the future, a lessor provides that the initial term of a lease shall be 21 years only, and it therefore does not attract the benefit of the Bill, he is not enabled to avoid the effect of the Bill by giving the lessee a right to renew the lease at the end of 21 years, again at the end of 42 years, and perhaps yet again at the end of 63.
    We can test the position in this way: if a lessee were given a lease for 84 years, with a right, at the lessee's option, to break the lease at 21, or 42, or 63 years, there could then be no doubt whatever that he would be entitled to the benefit of the provisions of the Bill. If, on the other hand, the lessor gives a lease for 21 years with a right to extend to 42, a further right to extend to 63, and yet another right to extend to 84, owing to the provision that it is necessary to have an original lease of more than 21 years
    1556
    the lessee would not have the benefit of the Bill's provisions.
    This question was raised in Committee and I understand that my right hon. Friend said that he would reconsider the matter. He has done so, and has given me to understand that the view taken is that such a lease would not be regarded as a commercial proposition and that no lessor would grant such a lease to a lessee. With the greatest respect to the advice that he has received, in my opinion, in conditions of scarcity—which still obtain—it might well be practicable for lessors who are anxious to avoid the effect of the Bill upon their estates in future to refuse to grant leases except upon these terms. The lessee, in effect, will be getting precisely the same as if he were granted an ordinary long lease—except the right to enfranchise.
    If the right to enfranchise is that which makes such a lease commercially impracticable, what on earth is the point of the Clause providing that any covenant which seeks to include the right to enfranchise shall be of no effect? This is a real danger. It could be cured simply by the insertion of the words in my Amendment, and I can see no reason—even if there is only a suspicion that the danger exists—why the Government should not accede to my proposition.
    Sir H. Lucas-Tooth: It seems to me that the hon. and learned Member is saying that in his opinion no leases should be granted in future. Will he say whether that is the case? It is of some interest to the Committee to know what hon. Members intend in respect of the Bill.
    10.30 p.m.
    Mr. Silkin: I am sorry if the hon. Gentleman has so construed what I have said. I said nothing of the kind. I said that rather than grant a lease of, say, 84 years with the right to break at certain periods, it would be open to a lessor to grant a lease initially for 21 years, with an option to the lessee—the lessee alone—to extend it on a number of occasions, so that, in the end, he would have the 84 years in exactly the same way. For the purely technical reason that one is done in one way and the other is done in the other way, one will have the right to enfranchisement and the other will not. That is what I object to.
    Mr. Graham Page: On a point of order, Mr. Deputy Speaker. We are discussing with Amendment No. 14 both Amendment No. 12 and the several Amendments to Amendment No. 14. Mr. Speaker ruled tht, as we were taking them in that order, it would not be in order to have a Division on Amendment No. 12. Might we move our Amendment to Amendment No. 14—in line 2, leave out 'twenty-one' and insert 'fifty'—and have a Division upon that? It has the same sort of principle as Amendment No. 12.
    Mr. Deputy Speaker: I understand that the position is that we have passed Amendment No. 12 and Amendment No. 13 and are discussing Amendment No. 14. If the Opposition would like to have a Division on the Amendment to Amendment No. 14—in line 2, leave out 'twenty-one' and insert 'fifty'—I am prepared to put the question in order that there may be a Division on it. If it is convenient to the House, I will put it now.
    Mrs. White: It is, of course, for you, Mr. Deputy Speaker, to rule on how the business is to be conducted. Amendment No. 14 is intended to meet a particular situation and would not be improved if the Amendments proposed to it were accepted. I thought that I had made it clear that it was concerned with a special instance in the Abertillery district. I am delighted to see my hon. Friend the Member for Abertillery (Mr. Clifford Williams) here and that he was able to convey to the House something of the feelings in that part of the country.
    We fully appreciate the logic of the Amendment proposed by my hon. and learned Friend the Member for Dulwich (Mr. S. C. Silkin). He is quite correct in suggesting that in future it would be open to a landlord so to offer property that he would, in a way, defeat the purpose of the Bill. We feel that my hon. and learned Friend has made out a convincing case that it would be open to the landlord to offer leases of 21 years which would. in the aggregate, amount to very long leases, with possible breaks. He is right to suggest that we should make provision in the Bill on the lines he proposes and I am happy to say that in this instance the Government wish to accept his Amendment.
    1558
    I turn now to matters raised by the Opposition. I believe that it is the first time that they have put the case in a way which leads one to understand that presumably they are now converts to regional differentiation. The right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) suggested that the Bill should be confined to Wales. But there are other parts of the United Kingdom also very much affected, although we in Wales have had a peculiar historical position in this respect which makes us feel so intensely about it. Apparently, the right hon. Gentleman has been reading again the leading article in The Times this morning, in which it is proposed, rather late in the day, that
    "enfranchisement ought to be confined to those areas, mostly in South Wales and the industrial North-West, where the monopoly power of the original landlords was greatest and the social grievance is keenest …"
    We ought to be told whether this is now the attitude of the Opposition. In Committee, we had some eloquent speeches from other hon. Members opposite, for instance, the hon. Member for Hornsey (Mr. Rossi), generally in favour of the principle of enfranchisement for their constituents. If they are now following the line of the right hon. Member for Kingston-upon-Thames, they will, no doubt, make clear their view that they are quite content that the provisions of the Bill should be confined to Wales, perhaps with some extension to the industrial North-West.
    As this argument has been adduced in terms only by one right hon. Member opposite, and rather late in the day at that, perhaps we need not take it too seriously. On the other hand, the purpose of the Opposition Amendments is to extend the period of 21 years to 50 years. They made a spirited attempt in Committee in favour of 90 years, which was defeated, and they have now come back to the attack, in somewhat modified form, in favour of 50 years.
    It is curious that it was the right hon. Member for Kingston-upon-Thames who came in on this again. We had a little badinage earlier in our discussions on the subject of conversions. It seems that the right hon. Gentleman has seen some light—or darkness, whichever way one takes it—because he is on record as saying quite specifically, apropos of the

    1559
    White Paper in which the reference is to 21 years, that
    "We do not disagree with the White Paper which itself follows our own 1954 Act in limiting the provisions to leases originally in excess of 21 years."
    Mr. Boyd-Carpenter: If the hon. Lady will quote fully what I said in context, in a speech, which, I admit, was of some length though, I think, rather good, she will find that I argued there for enfranchisement on fair terms in respect of leases of 21 years and more. My argument today in favour of 50 years was based, first, On the fact that the Bill does not offer fair terms, and, second, on the Government's refusal to offer fair terms on the ground that the leaseholder built the house. The 50 years argument relates to the allegation that the leaseholder built the house. Perhaps the hon. Lady will deal with my challenge on whether she knows of any leaseholder who built houses on 21-year ground leases.
    Mrs. White: When commenting on the White Paper, the right hon. Gentleman was well aware of the basis on which the Government were putting forward this proposition, so he cannot expect to put that across now. We had a very long argument in Committee on this question of the 21 years. It was included in the White Paper as well as in the Bill. We shall not benefit much by going over the ground again. My right hon. Friend said in Committee that he thought it would be wrong to leave the impression that the Government had any intention of changing their minds. He gave fair notice that, on this question of the 21 years, we had no intention of changing Our mind. We have no such intention and we,
    therefore, ask the House to reject the Opposition's Amendments.
    Mr. Grieve: I had not intended to intervene, because all that I could have said had been admirably covered already by my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), but, since the hon. Lady has suggested that my right Friend stood alone in suggesting that the law of this country ought not to be distorted, private rights ought not to be over-riden, and private property ought not to be taken away without adequate compensation, for the sake of a peculiar situation in South Wales, I rise to say that he is not alone in taking that view. I take it, too, and I believe that there are many others on this side who take it. I believe that there is a case, as was suggested in that leading article this morning, if there is a peculiar situation in South Wales, for legislating for that peculiar situation, but not for legislating for the whole country, destroying the leasehold system which has stood the country in good stead for many hundreds of years and destroying private rights without adequate compensation, for the sake of that peculiar situation.
    Amendment proposed to the proposed Amendment: In line 1, after 'before' insert 'or after'.—[Mr. S. C. Silkin.]
    Question, That 'or after' be there inserted in the proposed Amendment, put and agreed to.
    Amendment proposed to the proposed Amendment: In line 2, leave out 'twenty-one' and insert 'fifty'.—[Mr. Graham Page.]
    Question put, That 'twenty-on' stand part of the proposed Amendment.
    The House divided: Ayes 184, Noes 102.

    Division No. 374.]

    AYES

    [10.40 p.m.

    Abse, Leo

    Blenkinsop, Arthur

    Crawshaw, Richard

    Albu, Austen

    Boardman, H.

    Crossman, Rt. Hn. Richard

    Allaun, Frank (Salford, E.)

    Booth, Albert

    Cullen, Mrs. Alice

    Alldritt, Walter

    Braddock, Mrs. E. M.

    Dalyell, Tam

    Allen, Scholefield

    Bradley, Tom

    Davidson, Arthur (Accrington)

    Anderson, Donald

    Brown, Hugh D. (G'gow, Provan)

    Davidson, James(Aberdeenshire, W.)

    Armstrong, Ernest

    Buchan, Norman

    Davies, G. Elfed (Rhondda, E.)

    Atkins, Ronald (Preston, N.)

    Butler, Herbert (Hackney, C.)

    Davies, Ednyfed Hudson (Conway)

    Bagier, Gordon A. T.

    Butler, Mrs. Joyce (Wood Green)

    Davies, Ifor (Gower)

    Barnes, Michael

    Cant, R. B.

    Dell, Edmund

    Barnett, Joel

    Carmichael, Neil

    Dempsey, James

    Beaney, Alan

    Castle, Rt. Hn. Barbara

    Dobson, Ray

    Bence, Cyril

    Coe, Denis

    Donnelly, Desmond

    Bidwell, Sydney

    Coleman, Donald

    Dunn, James A.

    Binns, John

    Conlan, Bernard

    Dunwoody, Mrs. Gwyneth (Exeter)

    Blackburn, F.

    Corbet, Mrs. Freda

    Dunwoody, Dr. John (F'th & C'b'e)

    Eadie, Alex

    Leadbitter, Ted

    Pearson, Arthur (Pontypridd)

    Edelman, Maurice

    Ledger, Ron

    perry, Ernest G. (Battersea, S.)

    Edwards, Rt. Hn. Ness (Caerphilly)

    Lee, Rt. Hn. Frederick (Newton)

    Price, Thomas (Westhoughton)

    Faulds, Andrew

    Lee, John (Reading)

    Price, William (Rugby)

    Fernyhough, E.

    Lever, Harold (Cheetham)

    Probert, Arthur

    Fitch, Alan (Wigan)

    Lewis, Arthur (W. Ham, N.)

    Rees, Merlyn

    Foley, Maurice

    Lipton, Marcus

    Reynolds, G. W.

    Foot, Michael (Ebbw Vale)

    Loughlin, Charles

    Rhodes, Geoffrey

    Ford, Ben

    Luard, Evan

    Richard, Ivor

    Forrester, John

    Lubbock, Eric

    Robinson, W. 0. J. (Walth'stow, E.)

    Fowler, Gerry

    Lyon, Alexander W. (York)

    Rogers, George (Kensington, N.)

    Fraser, John (Norwood)

    Lyons, Edward (Bradford, E.)

    Rose, Paul

    Gardner, Tony

    Macdonald, A. H.

    Rowland, Christopher (Meriden)

    Ginsburg, David

    McGuire, Michael

    Rowlands, E. (Cardiff, N.)

    Gray, Dr. Hugh (Yarmouth)

    McKay, Mrs. Margaret

    Sheldon, Robert

    Greenwood, Rt. Hn. Anthony

    MacPherson, Malcolm

    Shore, Peter (Stepney)

    Gregory, Arnold

    Mahon, peter (Preston, S.)

    Short, Mrs. Renée(W'hampton, N.E.)

    Grey, Charles (Durham)

    Mahon, Simon (Bootle)

    Silkin, Rt. Hn. John (Deptford)

    Griffiths, David (Rother Valley)

    Manuel, Archie

    Silkin, Hn. S. C. (Dulwich)

    Griffiths, Rt. Hn. James (Llanelly)

    Mapp, Charles

    Silverman, Julius (Aston)

    Hale, Leslie (Oldham, W.)

    Marquand, David

    Skeffington, Arthur

    Hamilton, James (Bothwell)

    Maxwell, Robert

    Sprigge, Leslie

    Hamling, William

    Mellish, Robert

    Steel, David (Roxburgh)

    Hannan, William

    Mikardo, Ian

    Thornton, Ernest

    Harper, Joseph

    Miller, Dr. M. S.

    Tinn, James

    Harrison, Walter (Wakefield)

    Milne, Edward (Blyth)

    Tuck, Raphael

    Henig, Stanley

    Molloy, William

    Varley, Eric G.

    Hilton, W. S.

    Moonman, Eric

    Wainwright, Edwin (Dearne Valley)

    Morgan, Elystan (Cardiganshire)

    Hooley, Frank

    Morris, Alfred (Wythenshawe)

    Wainwright, Richard (Colne Valley)

    Horner, John

    Morris, Charles R. (Openshaw)

    Watkins, David (Consett)

    Howarth, Harry (Wellingborough)

    Moyle, Roland

    Watkins, Tudor (Brecon & Radnor)

    Howarth, Robert (Bolton, E.)

    Murray, Albert

    Weitzman, David

    Howie, W.

    Neal, Harold

    Whitaker, Ben

    Hoy, James

    Norwood, Christopher

    While, Mr. Eirene

    Hughes, Rt. Hn. Cledwyn (Anglesey)

    Oakes, Gordon

    Whitlock, William

    Hynd, John

    Ogden, Eric

    Willey, Rt. Hn. Frederick

    Irvine, A. J. (Edge Hill)

    O'Malley, Brian

    Williams, Alan (Swansea, W.)

    Jeger, Mrs.Lena (H'b'n & St.P'cras,S.)

    Orbach, Maurice

    Williams, Alan Lee (Hornchurch)

    Jenkins, Rt. Hn. Roy (Stechford)

    Orme, Stanley

    Williams, Clifford (Abertillery)

    Johnson, Carol (Lewisham, S.)

    Oswald, Thomas

    Winnick, David

    Jones, Dan (Burnley)

    Owen, Will (Morpeth)

    Winstanley, Dr. M. P.

    Jones, J. Idwal (Wrexham)

    Paget, R. T.

    Winterbottom, R. E.

    Jones, T. Alec (Rhondda, West)

    Palmer, Arthur

    Woodburn, Rt. Hn. A.

    Judd, Frank

    Park, Trevor

    TELLERS FOR THE AYES:

    Kerr, Mrs. Anne (R'ter & Chatham)

    Parkyn, Brian (Bedford)

    Mr. loan L. Edwards and

    Kerr, Russell (Feltham)

    Pavitt, Laurence

    Mr. Neil MeBride.

    NOES

    Allason, James (Hemel Hempstead)

    Harvey, Sir Arthur Vee

    Pearson, Sir Frank (Clitheroe)

    Astor, John

    Heald, Rt. Hn. Sir Lionel

    Percival, Ian

    Balniel, Lord

    Heseltine, Michael

    Pink, R. Bonner

    Biffen, John

    Hogg, Rt. Hn. Quintin

    Powell, Rt. Hn. J. Enoch

    Biggs-Davison, John

    Holland, Philip

    Prior, J. M. L.

    Black, Sir Cyril

    Hornby, Richard

    Pym, Francis

    Boyd-Carpenter, Rt. Hn. John

    Hunt, John

    Quennell, Miss J. M.

    Brewis, John

    Hutchison, Michael Clark

    Renton, Rt. Hn. Sir David

    Brinton, Sir Tatton

    Irvine, Bryant Godman (Rye)

    Ridley, Hn. Nicholas

    Brown, Sir Edward (Bath)

    Jones, Arthur (Northants, S.)

    Rippon, Rt. Hn. Geoffrey

    Bruce-Gardyne J.

    Jopling, Michael

    Rossi, Hugh (Horneey)

    Carlisle, Mark

    Joseph, Rt. Hn. Sir Keith

    Russell, Sir Ronald

    Clegg, Walter

    King, Evelyn (Dorset, S.)

    Scott, Nicholas

    Cooke, Robert

    Lancaster, Col. C. G.

    Sharples, Richard

    Costain, A. P.

    Lewis, Kenneth (Rutland)

    Shaw, Michael (Sc'b'gh & Whitby)

    Dean, Paul (Somersel, N.)

    Mac Arthur, Ian

    Sinclair, Sir George

    Deedes, Rt. Hn. W. F. (Ashford)

    Maclean, Sir Fitzroy

    Stoddart-Scott, Col. Sir M. (Ripon)

    Dodds-Parker, Douglas

    McMaster, Stanley

    Summers, Sir Spencer

    Drayson, G. B.

    Maddan, Martin

    Taylor, Frank (Moss Side)

    Elliott, R.W. (N'c'tle-upon-Tyne, N.)

    Maginnis, John E.

    Tilney, John

    Farr, John

    Marten, Neil

    Turton, Rt. Hn. R. H.

    Fletcher-Cooke, Charles

    Maxwell-Hyslop, R. J.

    van Straubenzee, W. R.

    Fortescue, Tim

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

    Vaughan-Morgan, Rt. Hn. Sir John

    Foster, Sir John

    Mills, Peter (Torrington)

    Walker-Smith, Rt. Hn. Sir Derek

    Gibson-Watt, David

    Miscampbell, Norman

    Wall, Patrick

    Glover, Sir Douglas

    Mitchell, David (Basingstoke)

    Walters, Dennis

    Glyn, Sir Richard

    Monro, Hector

    Ward, Dame Irene

    Goodhew, Victor

    More, Jasper

    Webster, David

    Grant, Anthony

    Munro-Lucas-Tooth, Sir Hugh

    Whitelaw, Rt. Hn. William

    Gresham Cooke, R-

    Murton, Oscar

    Wolrige-Gordon, Patrick

    Grieve, Percy

    Nicholls, Sir Harmar

    Wood, Rt. Hn. Richard

    Griffiths, Eldon (Bury St. Edmunds)

    Noble, Rt. Hn. Michael

    Worsley, Marcus

    Hall, John (Wycombe)

    Onslow, Cranley

    TELLERS FOR THE NOES:

    Harris, Reader (Heston)

    Osborne, Sir Cyril (Louth)

    Mr. Reginald Eyre and

    Harrison, Col. Sir Harwood (Eye)

    Page, Graham (Crosby)

    Mi. Bernard Weatherell.

    Proposed words, as amended, there inserted in the Bill.

    Clause 4.—(MEANING OF "LOW RENT".)
    Mr. Rossi: I beg to move Amendment No. 15, in page 5, line 14, to leave out 'two-thirds' and to insert 'one-fifth'.
    Mr. Deputy Speaker: I think it would be convenient also to take Amendment No. 108, in page 5, line 14, after 'two-thirds', insert:
    '(or, in the case of a tenancy which is capable of subsisting for a term or successive terms in total not exceeding 42 years. one-third)'.
    Mr. Rossi: Clause 4 deals with the definition of a low rent, which is, we are told, a rent which does not exceed two-thirds of the rateable value of the property on the appropriate day, which is 23rd March, 1965. This definition leads to a difficult situation. The Bill deals with long leases, leases created for 21 years or more. In 1963, rating lists throughout the country were drastically revised and, as a result, on average rateable values rose by approximately three times, the reason for that large increase being that the previous revaluation had been in 1939.
    Therefore, leases granted for 21 years or more prior to 1963 at rack rents, because of the revaluation of 1963 could now be leases on low rents, and therefore subject to enfranchisement. This, on the very basis of the Bill, is an undesirable situation, because the basis is that the equity in the land belongs to the landlord while the buildings belong to the tenant, so that the rent reflects the rent for the land. However, when we deal not with low rents but with rents representing the use of the buildings, it cannot be said that we are dealing with something which the Bill seeks to alter.
    The Amendment would redress the situation by taking account of the fact that rateable values went up so much in 1963 and would therefore take a lower proportion—one-fifth is suggested on the advice of valuers—to adjust the position equitably for long leases granted before 1963.
    A similar Amendment was moved in Committee. It suggested that we should go back to the 1939 valuation list as the basis for deciding whether the rent of a lease was low, taking two-thirds of the 1939 valuation. However, the Minis-
    1564
    ter took the view that the 1939 list, by reason of the way in which it came into existence, was too uncertain a factor to use for these purposes.
    Some of us think that that the 1963 valuation is also an uncertain factor, and we have had arguments on this earlier this evening. Nevertheless, one has to bear in mind, for example, that a lease created in 1950 for a house that had a rateable value of, say. £100, the rent charged then being £200—and that was an average situation in London—that rent would be a rack rent, controlled by the Rent Acts of that day. In 1963, the rateable value would be put up to £300 and the £200 rack rent would now became a low rent on the basis of the Bill as it stands. This is a situation which clearly needs adjustment, and we ask the Minister to consider sympathetically this method of seeing that equity is done.
    Mr. S. C. Silkin: The Amendment which is in my name, associated with the one just moved, is intended to deal with the same sort of problem. The White Paper on which this legislation is founded set out the principle that the benefits of the legislation should be given to landlords who were able to satisfy two conditions, one of them being to hold a lease originally granted for more than 21 years at a ground rent.
    The problem has always been that while we probably all know what we mean by ground rent, it is very difficult to find a form of words which in law gives effect to that term. The Bill tries to do so in the course of Clause 4 and, in order to define those two words, takes something like a page and a half. In doing so, it raises the possibility at least that the true effect of the ground rent does not arise from the provisions of the Bill. I have made this point in Committee and this afternoon.
    What is clearly intended by the Bill, and particularly the parts of the Bill which deal with the price to be paid, and the bricks and mortar principle, is that the lessee should pay the land value because, and only because, he or his predecessors are deemed, understood and believed in one way or another to have paid for the construction, maintenance and improvement of the house, and the equity contained in the Bill could not arise if that situation did not exist. That

    1565
    situation exists in the ordinary way where a lessee pays a true ground rent, because the very reason that he pays his ground rent is that he or his predecessor have paid for construction of the building. If the lessor had paid for the construction, what would be paid would be an occupation rent and not a ground rent.
    The difficulty that arises from Clause 4 of the Bill as it stands is that although it seeks by the use of the well-known formula of two-thirds of rateable value, not so much to define ground rent as to provide that low rent referred to is in fact a ground rent, it leaves open the situation in which that hope might not be realised.
    11.0 p.m.
    In particular, the possibility exists that in the case of a lease of something in excess of 21 years but not very much in excess of 21 years, particularly the sort of lease that might have been created during the war or just after, what was then an occupation rent has become, or will become in the course of time, a rent which is less than two-thirds of the rateable value. If that were so, one might well have the situation that although the lessor, the freeholder, had paid for the construction of the house, none the less because of the definition contained in Clause 4, the resultant rent at the relevant time when the lessee seeks to enfranchise is a low rent within the provisions of Clause 4, though it is not really a ground rent at all and though the lessee, on the equities, cannot reasonably have the right to acquire the freehold at the price set out in the Bill.
    This seems to me to be a problem which can only arise in the case of relatively short leases. It seems to me that the pragmatic way of solving the problem—not the way that I suggested in Committee, but a way which ought to appeal to the Minister because it conforms to the general formula of Clause 4—is that where one has a lease which cannot last more than a total of, say, 42 years in all—a relatively short lease, but still over the 21 year minimum limit—then the two-thirds rateable value shall be one-third. It seems to me that in those circumstances, if one had a one-third rateable value limit there would be no reasonable possibility that that would not be a true around rent, whereas there would be a
    1566
    very reasonable possibility that two-thirds in those circumstances would be something other than a true ground rent.
    I suggest that this is a simple way of curing the sort of anomaly of which, for example, hon. Members opposite so very readily make use when they say, in relation to what we regard as the equities of this Bill, "It is all very well for you to talk about those equities; we say that this is robbery and confiscation because you cannot ensure that the lessee did pay for the building of the house himself". I think that it is very necessary that we should have as cast iron a definition as possible so that that possibility of criticism is totally removed. The one that I am now proposing following the discussion that we had in Committee—I have given full effect to everything that my right hon. Friend said then—seems to me to meet that case, and I strongly commend it.
    Mr. Skeffington: Both the Amendments that we are considering raise interesting and important points in our attempts to deal with a situation in which I am afraid, whatever formula and whatever definition is used, there may be some cases which are not absolutely just.
    I can assure the hon. Member for Hornsey (Mr. Rossi) that we gave considerable thought in the preparation of the Bill to whether we should in all circumstances depart from the two-thirds rule which has been part of English law ever since the first Rent Act and is well understood, applied and practised and affects considerable sections of legislation elsewhere. We came to the conclusion, particularly having considered all the other possibilities, that in the case that he is seeking to meet more anomalies would result if we adopted any other formula and that we should have to have a very strong case to upset this very well-established connotation as to what a low ground rent is.
    A difficulty arises on both Amendments, though the Amendment of my hon. and learned Friend the Member for Dulwich (Mr. S. C. Silkin) is restricted to a rather narrower type of lease. In both cases, certainly in relation to the broad problem as put by the hon. Member for Hornsey, the difficulty is to arrive at a formula which is realistic and fair for ground rents created in the past, those created now and those to be created in future.

    1567
    We considered at one stage whether or not we should have a series of formulae—cases A, B, C, D, E, F and so on—I see a frown on the face of the hon. Member for Crosby (Mr. Graham Page)—reminiscent of the Land Commission, but we decided that it was too complicated. Even if one had a series of different fractions for the different periods, 25 or 50 years, there would still be anomalies. Very reluctantly—because there is a case here; there will be some hard cases—we came to the conclusion that it was extremely difficult to depart from the two-thirds formula without creating further anomalies and hardships.
    I should mention two other factors in relation to Amendment 15. If we had a fraction lower than two-thirds in the case of ground leases created now and in the future there is a very considerable likelihood that we should exclude from the benefits of the Bill, because the formula provides for this sort of rent, cases which normally one would wish to have the benefits. If we went as low as the Amendment suggests, to one-fifth, many people would be denied the benefits of enfranchisement. Also, if we had a formula as low as this it would be very much easier for landlords to devise ground rents which would exclude their tenants from the benefits of the Bill. Assuming that the rateable value of a house was £150 and that the rule was one-fifth, if the ground rent was £31 the tenancy would be taken out of the benefits of the Bill.
    Mr. S. C. Silkin: I do not follow my hon. Friend's point about ground rents created in future. One is here presumably presupposing buildings built in the future either at the expense of the lessor or at the expense of the lessee. We are trying to catch those built at the expense of the lessee. Will not the appropriate date from the point of view of rateable value for the purposes of Clause 4 in the case of buildings built in the future he the date when the building is constructed, and in those circumstances is it likely that the ground rent fixed by the lease will be above a third of the rateable value?
    Mr. Skeffington: The advice that I have received from various quarters is that this could conceivably be the case. I remind my hon, and learned Friend that the next property revaluation is not due until
    1568
    1973. Consequently, for some years there would be a temptation in certain cases.
    For all these reasons—I rest my case very much more on the fact that it is almost impossible to find a better formula than the two-thirds rule to deal with leases—I could not advise the House to accept Amendment 15.
    I turn to my hon. and learned Friend's Amendment. He is dealing with a particular type of lease which was probably granted during the war or immediately afterwards for a period of, say, 25 years. It may be that in some cases one cannot say that the premium would represent the value of the bricks and mortar. If he had restricted it between 1945 and 1967, it might have been better, but even then it would have been difficult and there would have been more complication. I doubt whether the formula would work in the future and I doubt whether his suggested formula would identify the cases which he has in mind. I am advised that on the tests which we have made it woulid exclude a number of people who are genuine leasehold tenants and who are entitled to the benefits of the Bill.
    I have sympathy with what my hon. and learned Friend is trying to do. There is equity in what he is trying to do for a limited number of people. But we are advised that his proposal might not catch the individual cases which he has in mind and it would damage others. For those reasons, I cannot advise the House to accept either of the Amendments.
    Mr. Graham Page: The Joint Parliamentary Secretary began his opposition to the Amendments by basing it on the Rent Act, 1920. He is going back a long way. What is magic about two-thirds of the rateable values in the Rent Act? We were then dealing with different rateable values. Even in the 1956 and 1965 Rent Acts we were dealing with different rateable values. It is ridiculous, on a property rated at £400, to call a rent of £266 13s. 3d. a low rent. That makes a complete farce of the Bill. It is already a tragedy. The hon. Member should not turn it into a farce, too. Our suggestion of one-fifth—£80—as a low rent is very generous. We are talking here of ground rents of £5 and £10, not of £266 13s. 3d.
    An extraordinarily anamolous position will arise with controlled property. The

    1569
    £266 on a £400 rateable value might well be more than the controlled rent, the latter being twice the gross value in 1956. We all know the difference between the 1956 rateable values and the rateable values in 1965. It is possible that a property at a controlled rent or a rent equal
    to a controlled rent could be declared to be a property at a low rent, thus creating a nonsensical position under the Bill.
    Question put, That 'two-thirds' stand part of the Bill:—
    The House divided: Ayes 170. Noes 99.

    Division No. 375.]

    AYES

    [11.15 p.m.

    Abse, Leo

    Gray, Dr. Hugh (Yarmouth)

    Moyle, Roland

    Albu, Austen

    Greenwood, Rt. Hn. Anthony

    Murray, Albert

    Allaun, Frank (Salford, E.)

    Gregory, Arnold

    Neal, Harold

    Alldritt, Walter

    Grey, Charles (Durham)

    Norwood, Christopher

    Allen, Scholefield

    Griffiths, David (Rother Valley)

    Oakes, Gordon

    Anderson, Donald

    Hale, Leslie (Oldham, W.)

    Ogden, Eric

    Armstrong, Ernest

    Hamilton, James (Bothwell)

    O'Malley, Brian

    Atkins, Ronald (Preston, N.)

    Hamling, William

    Orbach, Maurice

    Bagier, Gordon A. T.

    Hannan, William

    Orme, Stanley

    Barnes, Michael

    Harrison, Walter (Wakefield)

    Oswald, Thomas

    Barnett, Joel

    Henig, Stanley

    Paget, R. T.

    Beaney, Alan

    Hilton, W. S.

    Palmer, Arthur

    Bidwell, Sydney

    Hooley, Frank

    Park, Trevor

    Binns, John

    Horner, John

    Parkyn, Brian (Bedford)

    Blackburn, F,

    Howarth, Harry (Wellingborough)

    Pavitt, Laurence

    Blenkinsop, Arthur

    Howarth, Robert (Bolton, E.)

    Perry, Ernest G. (Battersea, S.)

    Booth, Albert

    Howie, W.

    Price, Thomas (Westhoughton)

    Braddock, Mrs. E. M.

    Hoy, James

    Price, William (Rugby)

    Bradley, Tom

    Hughes, Rt. Hn. Cledwyn (Anglesey)

    Probert, Arthur

    Brown, Hugh D. (G'gow, Provan)

    Hynd, John

    Rees, Merlyn

    Buchan, Norman

    Jeger, Mrs. Lena (H'b'n & st. P'chas, S.)

    Reynolds, G. W.

    Butler, Herbert (Hackney, C.)

    Johnson, Carol (Lewisham, S.)

    Rhodes, Geoffrey

    Butler, Mrs. Joyce (Wood Green)

    Jones, Dan (Burnley)

    Richard, Ivor

    Cant, R. B.

    Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)

    Roberts, Albert (Normanton)

    Carmichael, Neil

    Jones, J. Idwal (Wrexham)

    Robinson, W. O. J. (Walth'stow, E.)

    Castle, Rt. Hn. Barbara

    Jones, T. Alec (Rhondda, West)

    Rogers, George (Kensington, N.)

    Coe, Denis

    Judd, Frank

    Rose, Paul

    Coleman, Donald

    Kerr, Mrs. Anne (R'ter & Chatham)

    Rowland, Christopher (Meriden)

    Concannon, J. D.

    Kerr, Russell (Feltham)

    Rowlands, E. (Cardiff, N.)

    Crawshaw, Richard

    Leadbitter, Ted

    Sheldon, Robert

    Crossman, Rt. Hn. Richard

    Ledger, Ron

    Shore, Peter (Stepney)

    Cullen, Mrs. Alice

    Lee, Rt. Hn. Frederick (Newton)

    Silkin, Rt. Hn. John (Deptford)

    Dalyell, Tam

    Lee, John (Reading)

    Silkin, Hn. S. C. (Dulwich)

    Davidson, Arthur (Accrington)

    Lever, Harold (Cheetham)

    Silverman, Julius (Aston)

    Davidson, James (Aberdeenshire, w.)

    Lewis, Arthur (W. Ham, N.)

    Skeffington, Arthur

    Davies, G. Elfed (Rhondda, E.)

    Loughlin, Charles

    Spriggs, Leslie

    Davies, Ednyfed Hudson (Conway)

    Luard, Evan

    Steel, David (Roxburgh)

    Davies, Ifor (Gower)

    Lubbock, Eric

    Tinn, James

    Dell, Edmund

    Lyon, Alexander W. (York)

    Tuck, Raphael

    Dempsey, James

    Lyons, Edward (Bradford, E.)

    Varley, Eric G.

    Dobson, Ray

    McBride, Neil

    Wainwright, Edwin (Dearne Valley)

    Donnelly, Desmond

    Macdonald, A. H.

    Wainwright, Richard (Colne valley)

    Dunn, James A.

    McGuire, Michael

    Watkins, David (Consett)

    Dunwoody, Mrs. Gwyneth (Exeter)

    McKay, Mrs. Margaret

    Watkins, Tudor (Brecon & Radnor)

    Dunwoody, Dr. John (F'th & C'b'e)

    Mahon, Peter (Preston, S.)

    Weitzman, David

    Eadie, Alex

    Marion, Simon (Bootle)

    Whitaker, Ben

    Edelman, Maurice

    Manuel, Archie

    White, Mrs. Eirene

    Faulds, Andrew

    Mapp, Charles

    Willey, Rt. Hn. Frederick

    Fernyhough, E.

    Marquand, David

    Williams, Alan (Swansea, W.)

    Fitch, Alan (Wigan)

    Maxwell, Robert

    Williams, Alan Lee (Hornchurch)

    Foley, Maurice

    Mellish, Robert

    Williams, Clifford (Abertillery)

    Foot, Michael (Ebbw Vale)

    Mikardo, Ian

    Winnick, David

    Ford, Ben

    Miller, Dr. M. S.

    Winstanley, Dr. M. P.

    Forrester, John

    Milne, Edward (Blyth)

    Winterbottom, R. E.

    Fowler, Gerry

    Molloy, William

    Fraser, John (Norwood)

    Morgan, Elystan (Cardiganshire)

    TELLERS FOR THE AYES:

    Gardner, Tony

    Morris, Alfred (Wythenshawe)

    Mr. Joseph Harper and

    Ginsburg, David

    Morris, Charles R. (Openshaw)

    Mr. Ioan L. Evans.

    NOES

    Allason, James (Hemel Hempstead)

    Boyd-Carpenter, Rt. Hn. John

    Cooke, Robert

    Astor, John

    Brewis, John

    Dean, Paul (Somerset, N.)

    Balniel, Lord

    Brinton, Sir Tatton

    Deedes, Rt. Hn. W. F. (Ashford)

    Bennett, Sir Frederic (Torquay)

    Brown, Sir Edward (Bath)

    Dodds-Parker, Douglas

    Biffen, John

    Bruce-Gardyne, J.

    Drayson, G. B.

    Biggs-Davison, John

    Carlisle, Mark

    Elliott, R.W. (N'c'tle-upon-Tyne, N.)

    Black, Sir Cyril

    Clegg, Walter

    Eyre, Reginald

    Farr, John

    Lancaster, col. C. G.

    Renton, Rt. Hn. Sir David

    Fletcher-Cooke, Charles

    Lewis, Kenneth (Rutland)

    Ridley, Hn. Nicholas

    Fortescue, Tim

    MacArthur, Ian

    Rippon, Rt. Hn. Geoffrey

    Foster, Sir John

    Maclean, Sir Fitzroy

    Rossi, Hugh (Hornsey)

    Gibson-Watt, David

    McMaster, Stanley

    Russell, Sir Ronald

    Glover, Sir Douglas

    Maddan, Martin

    Scott, Nicholas

    Glyn, Sir Richard

    Maginnis, John E.

    Sharples, Richard

    Goodhew, Victor

    Marten, Neil

    Shaw, Michael (Sc'b'gh & Whitby)

    Grant, Anthony

    Maxwell-Hyslop, R. J.

    Sinclair, Sir George

    Gresham Cooke, R.

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

    Stoddart-Scott, Col. Sir M. (Ripon)

    Grieve, Percy

    Mills, Peter (Torrington)

    Summers, Sir Spencer

    Griffiths, Eldon (Bury St. Edmunds)

    Miscampbell, Norman

    Taylor, Frank (Moss Side)

    Hall, John (Wycombe)

    Mitchell, David (Basingstoke)

    Tilney, John

    Harris, Reader (Heston)

    Monro, Hector

    Turton, Rt. Hn. R. H.

    Harrison, Col. Sir Harwood (Eye)

    Munro-Lucas-Tooth, Sir Hugh

    van Straubenzee, W. R.

    Harvey, Sir Arthur Vere

    Murton, Oscar

    Vaughan-Morgan, Rt. Hn. Sir John

    Heald, Rt. Hn. Sir Lionel

    Nicholls, Sir Harmar

    Walker-Smith, Rt. Hn. Sir Derek

    Heseltine, Michael

    Noble, Rt. Hn. Michael

    Wall, Patrick

    Holland, Philip

    Onslow, Cranley

    Walters, Dennis

    Hornby, Richard

    Page, Graham (Crosby)

    Webster, David

    Hunt, John

    Pearson, Sir Frank (Clitheroe)

    Whitelaw, Rt. Hn. William

    Hutchison, Michael Clark

    Percival, Ian

    Wolrige-Gordon, Patrick

    Irvine, Bryant Godman (Rye)

    Pink, R. Bonner

    Wood, Rt. Hn. Richard

    Jones, Arthur (Northants, S.)

    Powell, Rt. Hn. J. Enoch

    Worsley, Marcus

    Joplin, Michael

    Prior, J. M. L.

    TELLERS FOR THE NOES

    Joseph, Rt. Hn. Sir Keith

    Pym, Francis

    Mr. Jasper More and

    King, Evelyn (Dorset, S.)

    Rees-Davies, W. R.

    Mr. Bernard Weatherill.

    Mr. Willey: I beg to move Amendment No. 16, in page 5, line 21, at the end to insert:
    (b) 'rent' means rent reserved as such, and there shall be disregarded any part of the rent expressed to be payable in consideration of services to be provided, or of repairs, maintenance or insurance to be effected by the landlord, or to be payable in respect of the cost thereof to the landlord or a superior landlord; and
    This is pursuant to an undertaking which I gave in Committee to the hon. Member for Hemel Hempstead (Mr. Allason). It is also to meet a point raised by the Law Society. I commend the Amendment to the House.
    Amendment agreed to.
    Further Amendment made: No. 18, in page 6, line 15, leave out subsection (5).—[Mr. Willey.]

    Clause 5.—(GENERAL PROVISIONS AS TO CLAIMS TO ENFRANCHISEMENT OR EXTENSION.)
    Mr. Willey: I beg to move Amendment No. 19, in page 7, line 47, at the end to insert:
    'but where a tenant's notice ceases to have effect by reason of a notice to treat served on him or on the landlord, then on the occasion of the compulsory acquisition in question the compensation payable in respect of any interest in the house and premises (whether or not the one to which that notice to treat relates) shall be determined on the basis of the value of the interest subject to and with the benefit of the rights and obligations arising from the tenant's notice and affecting that interest'.
    This Amendment is to meet an assurance which I gave in Committee. It
    1572
    makes it clear that the compensation is transferred to the leaseholder.
    Amendment agreed to.

    Clause 6.—(RIGHTS OF TRUSTEES.)
    Mr. Skeffington: I beg to move Amendment No. 20, in page 8, line 21, at the beginning to insert:
    (1) Where a tenant of a house is occupying it as his residence, his occupation of it at any earlier time shall for purposes of this Part of this Act be treated as having been an occupation in right of the tenancy if at that time—

    (a) the tenancy was settled land for purposes of the Settled Land Act 1925, and he was sole tenant for life within the meaning of that Act; or

    (b) the tenancy was vested in trustees and he, as a person beneficially interested (whether directly or derivatively tinder the trusts), was entitled or permitted to occupy the house by reason of that interest.

    References in this section to trustees include persons holding on the statutory trusts arising by virtue of sections 34 to 36 of the Law of Property Act 1925 in cases of joint ownership or ownership in common.
    This Amendment puts beyond doubt certain cases which generally arise under the Settled Land Act and there are beneficiaries who may be in occupation but not strictly in title. But when there is a change of circumstances, such as when the trust comes to an end or there are joint tenants and one tenant dies—in all the cases enumerated in the Amendment—a period of occupation will go towards the qualifying period of the tenancy.
    Amendment agreed to.
    Mr. Skeffington: I beg to move Amendment No. 21, in page 8, line 22, leave out second 'the' and insert 'a sole'.
    This is little more than a drafting Amendment. It is to make clear that where there are joint tenants for life under the Settled Land Act, and only one may be in occupation, the right of enfranchisement can be extended to either of the parties.
    Amendment agreed to.
    Further Amendment made: No. 22, in page 8, line 36, after 'a', insert 'sole'.[Mr. Skeffington.]
    Mr. Skeffington: I beg to move Amendment No. 23, in page 8, line 42. leave out and' and insert:
    (3) Without prejudice to any powers exercisable under the Settled Land Act 1925 by tenants for life or statutory owners within the meaning of that Act, where a tenancy of a houes is vested in trustees, then.
    The hon. Member for Hornsey (Mr. Rossi) will remember that we had a number of discussions about the position of statutory owners, and this Amendment disposes of the doubt raised in Committee that "statutory owners" under the Settled Land Act are not trustees.
    Amendment agreed to.
    Further Amendment made: No. 24, in page 9, line 10, leave out 'statutory owners or trustees' and insert 'or statutory owners or by trustees for sale'.[Mr. Skeffington.]

    Clause 7.—(RIGHTS OF MEMBERS OF FAMILY SUCCEEDING TO TENANCY ON DEATH.)
    Mr. Skeffington: I beg to move Amendment No. 25, in page 9, line 25, leave out from claim 'to as' in line 26 and insert 'made by him at the time of his death have been treated'.
    This Amendment, which is consequential upon the new subsection (1) of Clause 6, allows a succeeding member of a family to count any period which his predecesor could count by virtue of the new subsection.
    Amendment agreed to.
    Mr. Skeffington: I beg to move Amendment No. 26, in page 10, line 26, at end insert:
    (4A) Subsections (3) and (4) above shall apply, with any necessary adaptations. Where
    1574
    a person becomes entitled to a tenancy on the termination of a settlement or trust as they would apply if he had become entitled in accordance with the settlement or trust.
    (4B) The reference in section 6(2) above to the rights which a beneficiary under a trust would have if he were the tenant occupying in right of the tenancy includes any rights which he would have by virtue of this section.
    The new sub-section (4A) extends the operation of sub-sections (3) and (4) which deal with cases where the tenancy is subject to a strict settlement or is otherwise held on trust. This puts the provisions of the bill in line with the Settled Land Act and Sections we have already agreed to.
    Amendment agreed to.
    Mrs. White: I beg to move Amendment No. 27, in page 10, line 30, after 'daughter', insert 'or a son-in-law or daughter-in-law'.
    This Amendment is really just a sensible extension of the definition of family in response to representations made by the hon. Member for Crosby (Mr. Graham Page) and the hon. Member for North Fylde (Mr. Clegg), and the following Amendment No. 28 is consequential.
    Amendment agreed to.
    Further Amendment made: No. 28, in page 10, line 37, at end insert ', and "son-in-law" and "daughter-in-law" shall be construed accordingly'.—[Mrs. White.]

    Clause 9.—(PURCHASE PRICE AND COSTS OF ENFRANCHISEMENT, AND TENANT'S RIGHT TO WITHDRAW.)
    Amendment made: No. 30, in page 12, line 19, leave out 'subsections (2) and (3)' and insert subsection (2)'.—[Mr. Willey.]
    Amendment proposed: No. 31, in page 12, leave out lines 24 to 28 and insert:
    (a) (i) that the vendor is selling for an estate in fee simple at a price to be assessed in accordance with section 5 of the Land Compensation Act 1961,
    (ii) that that estate is subject to the tenancy and to the rights of a tenant of the house and premises under Part 1 of the Landlord and Tenant Act 1954 but not to require an extended lease under this Act,

    1575
    (iii) that the vendor is selling an estate in respect of which there is a right of development or redevelopment (with other property if the vendor owns any other property capable of development or redevelopment with the house and premises the subject of the tenancy) for any of the purposes for which planning consent might reasonably be expected to be granted, and
    (iv) that the number of persons seeking to purchase similar houses and premises in the
    locality is not substantially greater than the number of such houses and premises in the locality which are available for purchase.—[Mr. Graham Page.]
    Question put, That the words proposed to be left out stand part of the Bill: —
    The House divided: Ayes 167, Noes 98.

    Division No. 376.]

    AYES

    [11.30 p.m.

    Abse, Leo

    Greenwood, Rt. Hn. Anthony

    Moyle, Roland

    Albu, Austen

    Gregory, Arnold

    Murray, Albert

    Allaun, Frank (Salford, E.)

    Grey, Charles (Durham)

    Neal, Harold

    Alldritt, Walter

    Hale, Leslie (Oldham, W.)

    Norwood, Christopher

    Allen, Scholefield

    Hamilton, James (Bothwell)

    Oakes, Gordon

    Anderson, Donald

    Hamling, William

    Ogden, Eric

    Armstrong, Ernest

    Hannan, William

    O'Malley, Brian

    Atkins, Ronald (Preston, N.)

    Harper, Joseph

    Orbach, Maurice

    Bagier, Gordon A. T.

    Harrison, Walter (Wakefield)

    Orme, Stanley

    Barnes, Michael

    Henig, Stanley

    Oswald, Thomas

    Barnett, Joel

    Hilton, W. S.

    Paget, R. T.

    Beaney, Alan

    Hooley, Frank

    Palmer, Arthur

    Bidwell, Sydney

    Horner, John

    Park, Trevor

    Binns, John

    Howarth, Harry (Wellingborough)

    Parkyn, Brian (Bedford)

    Blackburn, F.

    Howarth, Robert (Bolton, E.)

    Pavitt, Laurence

    Blenkinsop, Arthur

    Howie, W.

    Perry, Ernest G. (Battersea, S.)

    Booth, Albert

    Hoy, James

    Price, William (Rugby)

    Braddock, Mrs. E. M.

    Hughes, Rt. Hn. Cledwyn (Anglesey)

    Probert, Arthur

    Bradley Tom

    Hynd, John

    Rees, Merlyn

    Brown, Hugh D. (G'gow, Provan)

    Jay, Rt. Hn. Douglas

    Reynolds, G. W.

    Buchan, Norman

    Jeger, Mrs. Lena (H'b'n & St. P'cras, S.)

    Rhodes, Geoffrey

    Butler, Herbert (Hackney, C.)

    Johnson, Carol (Lewisham, S.)

    Richard, Ivor

    Butler, Mrs. Joyce (Wood Green)

    Jones, Dan (Burnley)

    Roberts, Albert (Normanton)

    Cant, R. B.

    Jones. Rt. Hn. Sir Elwyn (W. Ham, S.)

    Robinson, W. O. J. (Walth'stow, E.)

    Carmichael, Neil

    Jones, J. Idwal (Wrexham)

    Rogers, George (Kensington, N.)

    Coe, Denis

    Jones, T. Alec (Rhondda, West)

    Rose, Paul

    Coleman, Donald

    Judd, Frank

    Rowland, Christopher (Meriden)

    Conlan, Bernard

    Kerr, Mrs. Anne (R'ter & Chatham)

    Rowlands, E. (Cardiff, N.)

    Crawshaw, Richard

    Kerr, Russell (Feltham)

    Sheldon, Robert

    Crossman, Rt. Hn. Richard

    Leadbitter, Ted

    Shore, Peter (Stepney)

    Cullen, Mrs. Alice

    Ledger, Ron

    Silkin, Rt. Hn. John (Deptford)

    Dalyell, Tam

    Lee, Rt. Hn. Frederick (Newton)

    Silkin, Hn. S. C. (Dulwich)

    Davidson, Arthur (Accrington)

    Lee, John (Reading)

    Silverman, Julius (Aston)

    Davidson, James (Aberdeenshire, W.)

    Lever, Harold (Cheetham)

    Skeffington, Arthur

    Davies, G. Elfed (Rhondda, E.)

    Lewis, Arthur (W. Ham, N.)

    Spriggs, Leslie

    Davies, Ednyfed Hudson (Conway)

    Loughlin, Charles

    Steel, David (Roxburgh)

    Davies, Ifor (Gower)

    Luard, Evan

    Tinn, James

    Dell, Edmund

    Lubbock, Eric

    Tuck, Raphael

    Dempsey, James

    Lyon, Alexander W. (York)

    Varley, Eric G.

    Dobson, Ray

    Lyons, Edward (Bradford, E.)

    Wainwright, Edwin (Dearne valley)

    Donelly, Desmond

    McBride, Neil

    Wainwright, Richard (Colne Valley)

    Dunn, James A.

    Macdonald, A. H.

    Watkins, David (Consett)

    Dunwoody, Mrs. Gwyneth (Exeter)

    McGuire, Michael

    Watkins, Tudor (Brecon & Radnor)

    Dunwoody, Dr. John (F'th & C'b'e)

    McKay, Mrs. Margaret

    Weitzman, David

    Eadie, Alex

    Mahon, Peter (Preston, S.)

    Whitaker, Ben

    Edelman, Maurice

    Mahon, Simon (Bootle)

    White, Mrs. Eirene

    Faulds, Andrew

    Manuel, Archie

    Willey, Rt. Hn. Frederick

    Fernyhough, E.

    Mapp, Charles

    Williams, Alan (Swansea, W.)

    Foley, Maurice

    Marquand, David

    Williams, Alan Lee (Hornchurch)

    Foot, Michael (Ebbw Vale)

    Maxwell, Robert

    Williams, Clifford (Abertillery)

    Ford, Ben

    Mikardo, Ian

    Winnick, David

    Forrester, John

    Millan, Dr. M. S.

    Winstanley, Dr. M. P.

    Fowler, Gerry

    Milne, Edward (Blyth)

    Winterbottom, R. E.

    Fraser, John (Norwood)

    Molloy, William

    Gardner Tony

    Morgan, Elystan (Cardiganshire)

    TELLERS FOR THE AYES:

    Ginsburg, David

    Morris, Alfred (Wythenshawe)

    Gray, Dr. Hugh (Yarmouth)

    Morris, Charles R. (Openshaw)

    Mr. Alan Fitch and Mr. Ioan L. Evans.

    NOES

    Allason, James (Hemel Hempstead)

    Black, Sir Cyril

    Carlisle, Mark

    Astor, John

    Boyd-Carpenter, Rt. Hn. John

    Clegg, Walter

    Balniel, Lord

    Brewis, John

    Cooke, Robert

    Bennett, Sir Frederic (Torquay)

    Brinton, Sir Tat ton

    Dean, Paul, (Somerset, N.)

    Biffen, John

    Brown, Sir Edward (Bath)

    Deedes, Rt. Hn. W. F. (Ashford)

    Biggs-Davison, John

    Bruce-Gardyne, J.

    Dodds-Parker, Douglas

    Drayson, G. B.

    Joseph, Rt. Hn. Sir Keith

    Pym, Francis

    Elliott, R.W. (N'c'tle-upon-Tyne, N.)

    King, Evelyn (Dorset, S.)

    Rees-Davies, W. R.

    Farr, John

    Lancaster, Col. C. G.

    Renton, Rt. Hn. Sir David

    Fletcher-Cooke, Charles

    Lewis, Kenneth (Rutland)

    Ridley, Hn. Nicholas

    Fortescue, Tim

    MacArthur, Ian

    Rippon, Rt. Hn. Geoffrey

    Foster, Sir John

    Maclean, Sir Fitzroy

    Rossi, Hugh (Hornsey)

    Gibson-Watt, David

    McMaster, Stanley

    Russell, Sir Ronald

    Glover, Sir Douglas

    Maddan, Martin

    Scott, Nicholas

    Glyn, Sir Richard

    Maginnis, John E.

    Sharples, Richard

    Goodhew, Victor

    Marten, Neil

    Shaw, Michael (Sc-b'gh & Whitby)

    Grant, Anthony

    Maxwell-Hyslop, R. J.

    Sinclair, Sir George

    Gresham Cooke, R.

    Maydon, Lt.-Cmdr. s. L. c.

    Stoddart-Scott, Col. Sir M. (Ripon)

    Grieve, Percy

    Mills, Peter (Torrington)

    Summers, Sir Spencer

    Griffiths, Eldon (Bury St. Edmunds)

    Miscampbell, Norman

    Taylor, Frank (Moss Side)

    Hall, John (Wycombe)

    Mitchell, David (Basingstoke)

    Tilney, John

    Harris, Reader (Heston)

    Monro, Hector

    Turton, Rt. Hn. R. H.

    Harrison, Col. Sir Harwood (Eye)

    Munro-Lucas-Tooth, Sir Hugh

    van Straubenzee, W. R.

    Harvey, Sir Arthur Vere

    Murton, Oscar

    Vaughan-Morgan, Rt. Hn. Sir John

    Heald, Rt. Hn. Sir Lionel

    Nicholls, Sir Harmar

    Walker-Smith, Rt. Hn. Sir Derek

    Heseltine, Michael

    Noble, Rt. Hn. Michael

    Wall, Patrick

    Holland, Philip

    Onslow, Cranley

    Walters, Dennis

    Hornby, Richard

    Page, Graham (Crosby)

    Webster, David

    Hunt, John

    Pearson, Sir Frank (Clitheroe)

    Whitelaw, Rt. Hn. William

    Hutchison, Michael Clark

    Percival, Ian

    Wolrige-Gordon, Patrick

    Irvine, Bryant Godman (Rye)

    Pink, R. Bonner

    Wood, Rt. Hn. Richard

    Jones, Arthur (Northants, S.)

    Powell, Rt. Hn. J. Enoch

    Worsley, Marcus

    Jopling, Michael

    Prior, J. M. L.

    TELLERS FOR THE NOES:

    Mr. Jasper More and Mr. Weatherill,

    Mr. Willey: I beg to move Amendment No. 35, in page 13, line 3, after 'as', to insert:
    'on a sale in the open market'.
    This Amendment and Amendment 36 are drafting Amendments.
    Amendment agreed to.
    Further Amendment made: No. 36, in page 13, line 4, leave out.
    'on a sale in the open market'.—[Mr. Willey.]
    Mr. Willey: I beg to move Amendment No. 37, in page 13, line 26, to leave out
    'under section 5(6) above or'.
    This Amendment and Amendment 42 are consequential.
    Amendment agreed to.

    Clause 12.—(DISCHARGE OF MORTGAGES ETC. ON LANDLORD'S ESTATE.)
    Mr. Rossi: I beg to move Amendment No. 38, in page 19, line 32, at the end to insert:
    (5) Upon receiving the amount which in accordance with this section discharges the house and premises from the charge, the person entitled to the benefit of the charge shall give an effective discharge (in writing) of the house and premises from the said charge.
    The Amendment concerns a conveyancing point, which I will take shortly as the arguments were fully adduced in Committee upstairs. The object of the Amendment is merely to give statutory effect to the requirement that a person receiving money from a tenant, being a mortgagee, shall enter into the convey-
    1578
    ance and give a discharge for the mortgage for which he has received the money.
    In Committee, an undertaking was given by the Minister to consider this matter, and I hope that he will accede to the Amendment. It would be a great help to the legal profession in dealing with legal titles if there could be a statutory requirement compelling a person receiving these moneys to give a proper receipt and discharge.
    Mr. Skeffington: As promised, we gave careful consideration to the point raised by the hon. Member on 27th April in Committee. Indeed, my right hon. Friend wrote to the hon. Gentleman and other hon. Members about it. The difficulty about this suggestion—a difficulty to which the Law Society attaches considerable importance—is that there would be no way in which such a provision could be enforced. I am sure we would all agree that we do not wish to have a criminal sanction here and the House is always reluctant to make a provision which cannot be enforced.
    Mr. Graham Page: One does not pay the person the money unless he signs. That is the way to enforce it.
    Mr. Skeffington: Perhaps I was trying to short circuit the argument. I had better read the full explanation.
    The real difficulty we feel about putting the mortgagee under a specific duty to discharge a mortgage on enfranchisement is that there would be

    1579
    no effective sanction against the mortgagee who refused to comply with any such duty, unless we were to invoke some penal sanction as well.
    Under Clause 12, as it stands, there is nothing to prevent an enfranchising leaseholder who wants documentary proof that the mortgage is discharged from applying to the court for an order requiring the mortgagee formally to acknowledge that the mortgage is discharged, so that the imposing of a duty on the mortgagee to do so will not improve the leaseholder's position. But in any case, all the enfranchising leaseholder need do, as far as any purchaser or subsequent mortgagee is concerned, is to show that he acquired the freehold under the Bill, so that the mortgage has in fact been discharged automatically. In practice, a special condition is likely to be imposed in the contract for sale preculding the purchaser from making requisitions of objections in respect of the mortgage.
    A further point which I should put on the record is that a proposal on these lines could well work against the lease-holder's interests, because if he had it in his power to require the mortgagee to discharge the mortgage but did not do so, he might well have difficulty in persuading a purchaser to accept his title when he came to sell.
    Amendment negatived.
    Mr. Rossi: I beg to move Amendment No. 39, in page 19, line 33, to leave out subsection (5).
    In order to consider this matter, one must first refer to subsection (2) of Clause 12, which requires a tenant paying the price for the freehold first of all to apply the money to discharging any mortgage there might be on the freehold interest. Then, when we come to subsection (5), which is the subsection we are concerned with, it states that this provision
    "… shall not apply to debentures-holders' charge …"
    In other words, where there is a debenture on the freehold, the tenant is not required to comply. This seems a little illogical and for this reason we ask that subsection (5), which excludes the requirement, where there is a debenture, of the tenant to pay money to the trustees for the debenture holder, be removed from the Bill.
    Mr. Willey: The hon. Gentleman is pressing me to go too far by this Amendment, but we have received representations from the Law Debenture Corporation about this and it is possible that the subsection may operate unfairly where there is a fixed charge. I assure the hon. Gentleman therefore that this will be looked at in another place. I have already asked Parliamentary Counsel to look into it.
    Mr. Rossi: I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    11.45 p.m.
    Mr. Willey: I beg to move Amendment No. 40, in page 20, line 16, at the end to insert:
    Provided that, where the tenancy is granted after the commencement of this Part of this Act (whether or not it is, by virtue of section 3(3) above, to be treated for other purposes as forming a single tenancy with a previous tenancy) and the tenancy has not by the time of the conveyance of the house and premises to the tenant become binding on the persons interested in the charge, the conveyance shall not by virtue of this section discharge the house and premises from the charge except so far as it is satisfied by the application or payment into court of the price payable for the house and premises.
    This is to meet a point which has been raised by the Building Societies Association. The purpose is to avoid the possibility of fraud and collusion. It would be possible, but for this provision, for a freeholder whose house was subject to a mortgage to grant to, say, a member of his family, or, at any rate, collusively, a long lease at a low rent and to make that grant without the consent of the mortgagee. Then, after five years, there might be enfranchisement, which would mean that the property would be free of the mortgage under subsection (1), and the sole remedy would be on the personal covenant.
    We are proposing this Amendment to avoid that possibility. It will apply only after commencement of the Act, and it will apply only if the tenancy has not become binding on the mortgagee by the time of the conveyance on enfranchisement. I think that this is a proper provision to make. We have carefully considered the drafting. It is difficult to tailor it to avoid only the possibility of the evasion to which I have referred, but I do not think that it will be unnecessarily to the disadvantage of the leaseholder.

    1581
    It will mean that he will have to inquire and make sure that the property is not subject to mortgage. In other words, there will be an obligation to investigate title.
    Amendment agreed to.

    Clause 14.—(OBLIGATION TO GRANT EXTENDED LEASE.)
    Amendment made: No. 42, in page 21, line 43, leave out 'under section 5(6) above or'.—[Mr. Willey.]
    Mr. Skeffington: I beg to move Amendment No. 43, in page 22, line 31, at the end to insert:
    Provided that, where the existing tenancy is granted after the commencement of this Part of this Act (whether or not it is, by virtue of section 3(3) above, to be treated for other purposes as forming a single tenancy with a previous tenancy) and, the grant being subsequent to the creation of the charge on the landlord's estate, the existing tenancy is not binding on the persons interested in the charge, a lease executed to give effect to this section shall not by virtue of this subsection he binding on those persons:
    (4A) Where a lease is executed to give effect to this section, and any person having a charge on the landlord's estate is by reason thereof entitled to possession of the documents of title relating to that estate, the landlord shall within one month after execution of the lease deliver to that person a counterpart of it duly executed by the tenant, and the instrument creating or evidencing the charge shall apply in the event of his failing to deliver a counterpart in accordance with this subsection as if the obligation to do so were included in the terms of the charge as set out in that instrument.
    (5) A landlord granting a lease under this section shall be bound to take such steps as may be necessary to secure that it is not liable in accordance with the proviso to subsection (4) above to be defeated by persons interested in a charge on his estate; but
    This is the same point in relation to an extension of a lease as that raised by Amendment No. 40 in connection with enfranchisement. It would he possible for a long lease to be created without notification to the mortgagee, with the effect that, after, perhaps, the freeholder's friend or relative had been in occupation for five years, he could then seek an even longer lease, say, 20–50 years longer in total, and then be free of the obligations due under the outstanding debt. This matter has been brought to our notice by the building societies. We are taking the opportunity to insert this provision and also the further provisions in the other two paragraphs.
    Amendment agreed to.

    Clause 15.—(TERMS OF TENANCY TO BE GRANTED ON EXTENSION.)
    Mr. Allason: I beg to move Amendment No. 44, in page 23, line 17, to leave out 'twenty-five' and to insert 'seven'.
    Mr. Deputy Speaker (Mr. Sydney Irving): We may discuss at the same time Amendment No. 45, in page 23, line 18, to leave out 'those twenty-five years' and to insert 'every seventh year'.
    Mr. Allason: This Amendment relates to the conditions of the 50 years extended lease after the original term date of the long lease, in which case the Government have laid down that there shall be one rent review after 25 years. Ground rents are customarily settled for long periods, but upon a basis which has now gone. The basis was that there was a benefit to be acquired by the landlord at the end of the lease. Now, however, we have to consider a simple lease of a piece of land, and a rent review after 25 years takes no account of the fall in the value of money during that time. One rent review after 25 years is quite inadequate, and there should be a review every seven years.
    On a similar Amendment in Committee, the Parliamentary Secretary said:
    "… one cannot always hope by legislation, particularly in matters of this kind, to insulate some members of the community from all changes in the value of money over very long periods. This is something which no Government and no legislation can do."—[OFFICIAL REPORT, Standing Committee B. 2nd May, 1967; c. 509.]
    But, of course, this is not what was being asked. Here the Government are making provisions not to insulate people, which is very different.
    Mrs. White: I am afraid that we cannot accept the Amendment, because we do not believe that this is a reasonable suggestion. When the matter was discussed in Committee there was another aspect—the question of the increase in costs and services. That is dealt with in Amendment No. 46, which makes clear that we feel a certain sympathy on that aspect. But we do not think that to revise a ground rent every seven years makes sense. Property owners should be able to foresee conditions for 25 years ahead we are not suggesting that they should crystal-gaze for as long as 50 years. Therefore, the suggestion is that, if the landlord wishes, there should be a

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    break halfway through the 50-year extension. If the lease is extended it is at a modern ground rent, so that there is revision. It is not at the old ground rent: that is fully understood. We do not think that there is any convincing reason for ground rent, as opposed to rack rent, being subject to alteration every seven years.
    Amendment negatived.
    Mr. Wiley: I beg to move Amendment No. 46, in page 23 to leave out lines 30 to 41, and insert:
    (2A) Where during the continuance of the new tenancy the landlord will be under any obligation for the provision of services, or for repairs, maintenance or insurance, the rent payable in accordance with subsection (2) above shall be in addition to any sums payable (whether as rent or otherwise) in consideration of those matters or in respect of the cost thereof to the landlord; and if the terms of the existing tenancy include no provision for the making of any such payments by the tenant, or provision only for the payment of a fixed amount, the terms of the new tenancy shall make, as from the time when rent becomes payable in accordance with subsection (2) above, such provision as may be just for the making by the tenant of payments related to the cost from time to time to the landlord, and for the tenant's liability to make those payments to be enforceable by distress, re-entry or otherwise in like manner as the liability for the rent.
    The Amendment is to meet a point raised by both the hon. Member for Crosby (Mr. Graham Page) and my hon. and learned Friend the Member for Dulwich (Mr. S. C. Silkin). The point is similar to that which I mentioned on an Amendment to Clause 4.
    Amendment agreed to.
    Mr. Wiley: I beg to move Amendment No. 47, in page 24, to leave out lines 16 and 17 and insert:
    'the sums payable to the landlord in respect of the house and premises (after making any necessary apportionment) for rent and matters referred to in subsection (2A) above fall short in total of the sums that would have been payable for rent and matters so referred to under the new tenancy,'
    The Amendment is consequential to the previous Amendment.
    Amendment agreed to.

    Clause 16.—(EXCLUSION OF FURTHER RIGHTS AFTER EXTENSION.)
    Mr. S. C. Silkin: I beg to move, Amendment No. 107, in page 24, line 46, to leave out subsection (1)(a).
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    The provisions of the Clause as they stand relate to the alternative possibility of obtaining an extension of 50 years, and provide for certain limitations upon that right. They provide in particular in subsection (1,a) that although a tenant who has exercised his right to extend may acquire the freehold if he wishes, that power will be subject to his giving notice of his desire to do so not later than the original term date of the tenancy.
    The purpose of the Amendment is to remove that qualification upon the lessee's right to obtain the freehold after having exercised his right to extend, so that if the Amendment is accepted he would be in a position to obtain the freehold at any time up to the end of the extension. The problems that arise out of the leasehold system which have given rise to the provisions of the Bill include in particular the deterioration which so often sets in in property once the "fag end" period of a lease is reached, when it is difficult if not impossible to obtain mortgages, and when the premises often pass into the hands of people who are not prepared or able to spend money on their maintenance and improvement. It is for those reasons, among others, that the Bill rightly provides the power to enfranchise as an alternative to the power to extend the lease.
    It is believed that, given the situation of owner occupation and the right and ability of the new owner to obtain a mortgage, people will be encouraged to improve and properly maintain their property and, as a result, our housing stock will be preserved much better than at the present time. I personally conceive this to be one of the major benefits which the Bill will produce.
    We are saying that if a lessee exercises his right to extend then, although he can still obtain the freehold, he cannot do so once the original term date has passed. If he fails to do so within that limited period we shall be putting off for an additional 50 years the evils we are seeking to cure by virtue of the provisions of the Bill. I can see no reason, either in equity or from a practical point of view, why that limitation should be imposed.
    We should be in a much better position to preserve our housing stock for the

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    future if we enabled the lessee, even after he has exercised his right to extend and even after the original term date has passed, nonetheless to obtain the freehold. His right to do so in those circumstances would be subject to the other provisions of this part of the Bill which enable the landlord, once the right to extend has been claimed, to step in and say, "I want to redevelop". If the landlord can satisfy the court that he has that intention he can get his property back. Subject to that right, which I would preserve, I can see no valid reason why the lessee should not, at any time during that 50 years extension, obtain the freehold and give to the property the benefits that owner occupation undoubtedly would produce. This is the kind of proposal which I would have thought would be welcomed by right hon. and hon. Members opposite who set such great store by the advantages of owner occupation. Therefore, I very much hope to have their support and a sympathetic hearing from my right hon. Friend.
    Mr. Willey: I must be very careful. There is a good deal in what my hon. and learned Friend has said, but I did not like his appeal to the right hon. and hon. Members opposite to support him, because I might advise him to withdraw his amendment, whereupon they would no doubt force a Division.
    I recognise that there is a valid argument for the extension of the right to enfranchise after the termination of the original lease. However, we made it plain in the White Paper that the right to enfranchise should be at any time during the original term of the lease.
    12 m.
    Secondly, pursuant to the White Paper, we have given two specific rights to the leaseholder which are exercisable during the term of the original contract between the parties. As my hon. and learned Friend has said, one would have to provide for a conflict between the rights of the freeholder and those of the leaseholder. Finally—this is rough and ready —the period of 50 years has been selected to ensure that ordinarily the lease runs for the profitable life of the buildings.
    For those reasons I am unable to accept the Amendment, although I recog-
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    nise that my hon. and learned Friend has advanced cogent reasons for such a provision during the period of extension. It is our view that we are providing these two specific rights to the leaseholder and that they should be provided in this final form.
    Amendment negatived.

    Clause 17.—(REDEVELOPMENT RIGHTS (EXCLUSION OR TERMINATION OF EXTENSION).)
    Mr. Allason: I beg to move Amendment No. 48, in page 26, line 38, to leave out "twelve months" and to insert "three years".
    Clause 17 permits the landlord to recover premises at the end of a lease, on proper compensation, for the purposes of redevelopment, but he has only twelve months before the end of the lease in which to seek that power, and that is an inadequate time. It is unreasonable to expect him to go to great expense in making detailed planning proposals and all the preparation necessary in order to put a major redevelopment scheme into effect just twelve months after the time he gets permission. He has to choose between waiting until he discovers whether he will get authority to recover the premises and then set about the redevelopment plan, which may take a long time to prepare, and spend a great deal of money beforehand. Therefore, from the landlord's point of view, a year is inadequate.
    It is also unsatisfactory to the tenant, for he will learn only twelve months before the end of the lease that he is to get notice to give up the premises. He would sooner know somewhat earlier.
    The Government's objection to my proposal is that one year is the shortest time during which a tenant will have the right to enfranchise, but how valid is that objection? When the lease had had more than three years to run, the tenant would already have had the chance to enfranchise and suddenly to be served with notice then would not do much harm to him. Alternatively, if he had only one year of the lease to run when the Bill came into effect, the landlord would be entitled at once to make his application and, if the application were successful,

    1587
    the tenant would have no chance to enfranchise, although he would get compensation. The only people affected are those who at the passing of the Bill have leases with between one year and three years to run. Such tenants would be adversely affected by losing their tenancies if their landlords got authority to redevelop, although they would get compensation.
    I agree that it is hard in this small number of cases, but I think it would be better to make special provision for the small number of cases rather than to have the very unsatisfactory period lasting for the whole time the Bill will be the law of the land.
    Mr. Skeffington: The hon. Member for Hemel Hempstead (Mr. Allason) has moved this Amendment very fairly and we have given reconsideration to the matter and letters have been sent to the hon. Member and to the hon. Member for Crosby (Mr. Graham Page) and my hon. and learned Friend the Member for Dulwich (Mr. S. C. Silkin). We are in a real dilemma here which I think the hon. Member realised. I can put this on record in a succinct and comprehensive way by quoting the second paragraph of that letter.
    "The difficulty about doing this"—
    that is, extending the period in which he can serve notice to three years—
    "is that it only becomes of real value to landlords who have ideas about redevelopment, while Clause 17(6) still provides for the lease-holder's right of enfranchisement to cease on the making of the order fixing the date for the lease to terminate—and the order could be made two years or more before the end of the lease. This would bite too deeply into the leaseholder's right to enfranchise during the original period of the lease. On the other hand, if Clause 17(6) were amended so as to allow the leaseholder to enfranchise even after the court order had been made, there would be grave risk of the landlord wasting his money."
    —and then, of course, finding that the tenant was going to enfranchise. For both these reasons, we feel on balance that we should leave the matter as it stands. The hon. Member has fairly stated that some leaseholders would be disadvantaged and I must equally concede that some landowners would also be, if it is left as it is, but on balance we feel this is the wisest course to adopt.
    Amendment negatived.

    Clause 18.—(RESIDENTIAL RIGHTS (EX CLUSION OF ENFRANCHISEMENT OR EXTENSION.)
    Mrs. White: I beg to move Amendment No. 49, in page 28, line 35, after 'daughter', insert 'or a son-in-law or daughter-in-law'.
    This and the following Amendment are logical counterparts to Amendments already made to Clause 7.
    Amendment agreed to.
    Further Amendment made: No. 50, in page 28, line 42, at end insert ', and "son-in-law" and "daughter-in-law" shall be construed accordingly'.—[Mrs. White.]

    Clause 19.—(RETENTION OF MANAGEMENT POWERS FOR GENERAL BENEFIT OF NEIGHBOURHOOD.)
    Mr. Willey: I beg to move Amendment No. 51, in page 29, line 36, leave out from beginning to 'High' in line 37 on page 30 and insert:
    (1) Where, in the case of any area which is occupied directly or indirectly under tenancies held from one landlord (apart from property occupied by him or his licensees or for the time being unoccupied), the landlord on an application made within the two years beginning with the commencement of this Part of this Act obtains from the Minister a certificate that, in order to maintain adequate standards of appearance and amenity and regulate redevelopment in the area in the event of tenants acquiring the landlord's interest in their house and premises under this Part of this Act, it is in the Minister's opinion likely to be in the general interest that the landlord should retain powers of management in respect of the house and premises, or have rights against the house and premises in respect of the benefits arising from the exercise elsewhere of his powers of management, then the High Court may, on an application made by the landlord within two years of the giving of the certificate, approve a scheme giving the landlord such powers and rights as are contemplated by this subsection.
    For purposes of this section 'the Minister' means as regards areas within Wales and Monmouthshire the Secretary of State, and as regards other areas the Minister of Housing and Local Government.
    (2) The Minister shall not give a certificate under this section unless he is satisfied that the landlord has, by advertisement or otherwise as may be required by the Minister, given adequate notice to persons interested, informing them of the application for a certificate and its purpose and inviting them to make representations to the Minister for or against the application within a time which appears to the Minister to he reasonable; and before giving a certificate the Minister shall consider any representations so

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    made within that time, and if from those representations it appears to him that there is among the persons making them substantial opposition to the application, he shall afford to those opposing the application, and on the same occasion to the landlord and such (if any) as the Minister thinks fit of those in favour of the application, an opportunity to appear and be heard by a person appointed by the Minister for the purpose, and shall consider the report of that person.
    (3) The Minister in considering whether to grant a certificate authorising a scheme for any area, and the.
    I can perhaps explain at the same time, for the benefit of the Whips, that having considered the related Amendments set down, we propose to accept the Amendment to this proposed Amendment, in line 12, leave out 'two years' and insert 'one year', and Amendment 61, in page 34, line 7, leave out 'two years' and insert 'one year'.
    This is a matter we discussed in Committee. We think the first period of two years is right and that it would be wrong to extend it. I can see the argument for extension, bearing in mind the point which the hon. Member for Crosby (Mr. Graham Page) raised in Committee, that we recognise that some estates are being built and that it will be some time before we can get the Wilberforce legislation but on the second period, the view was canvassed in Committee that it should be reduced to one year.
    The Amendment is to meet the points made in Committee and made in representations by spokesmen of well-managed estates. We have endeavoured, first, not to confine this to estates in the way we did in the Clause as originally drawn. In other words, we accept that the Clause was at first drawn too narrowly, and also in subsection (2) we have put the Minister under the specific obligation to hold an inquiry where there is substantial opposition. I think we have, in this way, improved the provisions of the Bill. I assure the House that, having discussed this and listened to the arguments in Committee, we have done our best to meet the wishes of the well-managed estates.
    Sir H. Lucas-Tooth: I wish to comment on the right hon. Gentleman's acceptance of the Amendment to substitute "one year" for "two years" in line 12 of the proposed Amendment that we are discussing. I do not know whether he has spoken to any of his neighbours on the subject, but I can assure him
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    that many people have been to see me and have expressed their strong objection to any suggestion that the period of two years should be reduced. I have had representations that a period of five years, as suggested in the Amendment in the name of my right hon. and learned Friend the Member for Hexham (Mr. Rippon), would be preferable.
    I do not know that this is a matter of great importance. I do not think this provision will really operate, as I shall develop on a later Amendment. At the same time, I should like to place on record my strong objection to the proposal to reduce the period from two years to one year.
    Mr. Willey: Perhaps I can set the hon. Gentleman's mind at rest. We have not sought to reduce the first-mentioned period of two years. I understand the reasons for this point being raised, but we feel that it would be wrong to reduce that period. Similarly, we have not accepted the proposal to extend that period to five years.
    Mr. Graham Page: It is the first-mentioned period which is important. A period of two years goes some way to help, but I wish it could have been five years. It would have covered the situation better. I do not complain about the reduction of two years to one year in the second case. I think the right hon. Gentleman has improved the Clause, so far as it will have any use at all. Frankly, I do not think it will have any purpose. I do not think anybody will take advantage of it. I do not think there is any purpose, when a landlord has had his estate broken up, in asking him to manage it.
    I think the right hon. Gentleman has got things the wrong way round. He should have put himself in the position of the High Court, and the High Court should be in the position of himself. We argued this in Committee, and I merely put on record my belief that the Clause is wrongly shaped, and I do not think there is any purpose in it.
    Mr. S. C. Silkin: I should like to say a few words on behalf of my hon. Friend the Member for Birmingham, Northfield (Mr. Chapman), two of whose Amendments have been accepted by my right hon. Friend—one to my right hon.

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    Friend's proposed Amendment and, I think, a consequential Amendment later on. My hon. Friend the Member for Northfield regrets his inability to be here, but he asked me if I would deal with his Amendments on his behalf, and I am certain that he will wish me to thank my right hon. Friend for accepting those two Amendments.
    As to the first period in my right hon. Friend's Amendment, which is the subject of another Amendment by my hon. Friend the Member for Northfield, no doubt my hon. Friend would wish to press that Amendment. Although I take the view, and expressed it in Committee, that these periods ought to be as short as is reasonably practical, none the less there is a built-in incentive to the freeholder so far as the first period is concerned to take action as rapidly as possible, because if he does not do so he is liable to find that lessees have given their notices to acquire the freehold before those notices have taken effect and before the lessor's application can intervene to suspend the effect of those notices. I think my right hon. Friend is perfectly right to curtail the second period rather than the first, in view of that incentive.
    12.15 a.m.
    I turn to the Amendment in my name. The words now proposed to be used in my right hon. Friend's Amendment are somewhat different from those that appeared in the original Clause. In particular, we now have inserted in the Clause the expression "and regulate redevelopment". In other words, the Minister is able to give a certificate in accordance with Clause 19 if he takes the view that this is necessary not merely to maintain adequate standards of appearance and amenity—that phrase appeared previously—but in order to regulate redevelopment in the area.
    Precisely what that means I do not at present know. I am extremely unhappy about that expression and extremely worried about its possible implications. Does it mean that the freeholder would be entitled to make a case to the Minister to the effect that he should continue to be in a position to say when redevelopment ought to take place? Does it, in other
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    words, go to give the freeholder positive powers of deciding when redevelopment should take place? Or are the powers that are meant to be implicit in the Clause negative powers simply to say when redevelopment ought not to take place?
    This is extremely important because the power of the court to approve a scheme includes a power to give effect to the matters which the Minister has to have regard to when he gives his certificate. If "regulate redevelopment" has the positive meaning to which I referred, then it would apparently give the court the right to tell the freeholder "You can have the power to tell the enfranchising lessee when he must pull his house down and when he must redevelop." That seems to me to be completely wrong. There is no case for it. It is contrary to the whole principle of the Bill. If there is a case for redevelopment we have the Land Commission and the planning powers, which will enable redevelopment to be given effect to.
    The words "regulate redevelopment" seem to me to be open to that meaning. If there is any ambiguity about them, I suggest that other words should be substituted which make it clear that there is not that positive power. But even if there were only a negative power, I still do not understand why it should be necessary for the freeholder in the exercise of his powers under Clause 19 to be able to tell the lessees who are now enfranchised "You must not now redevelop". Why is that not a proper subject for the exercise of ordinary planning powers, and why should that power be given to the former freeholder?
    I can well understand that the sort of power that ought to be given is a power if redevelopment takes place, to say what sort of redevelopment it ought to be. That is an entirely different matter. If that is all that is meant, then I should have no objection. But the term "regulate redevelopment" seems to me to be far too wide. I hope that my right hon. Friend will say exactly what he has in mind, and if it means something much less than I fear that it may mean I hope that he will look at the wording again so that at a later stage the limitations of this power may be made absolutely clear.
    Mr. Willey: I agree with my hon. and learned Friend the Member for Dulwich (Mr. S. C. Silkin) that the ordinary planning powers would apply.
    We are trying to recognise the particular character of well-managed estates and to make special provision for it. The words "regulate redevelopment" are negative in connotation, but I do not want to over-emphasise the negative aspect of the regulation of redevelopment. We are recognising that a well-managed estate is not static but is both present and future. For this reason, to preserve and maintain the character of the estate it is proper to make provision for regulating redevelopment.
    Mr. Luard: I share some of the concern expressed by my hon. and learned Friend the Member for Dulwich (Mr. S. C. Silkin) about the phrase in the Amendment providing for regulating redevelopment and I should be grateful if the Minister would clarify it. The Clause, as I understand it, is intended to apply to areas where there is large-scale development, all of a similar type, normally being carried out at the same time with houses of a similar type.
    I do not want to be too parochial in speaking about the situation in Oxford, but circumstances have arisen in a certain part of Oxford which are relevant to the Clause. It is an area where there are houses of many different types, and also shops—an area of some size but not one of comprehensive development of a uniform kind. I strongly suspect that the landlords of the area—St. John's College—have it in mind to claim that this area represents a well-managed estate for the purposes of the Clause. Within the last two or three months they have set aside this area as being a single estate for which they plan a certain kind of development. The leaseholders of the area would be very disturbed if they learned that, as a result of the Clause, although they would have the right to enfranchisement, they would not have the normal right of redeveloping the plot concerned which they would expect to acquire with the right to enfranchisement.
    Although tenants of an estate which has all been developed in a similar way in the past will perhaps be prepared to
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    understand the reasons for limiting and controlling their rights to redevelop, that will be totally unacceptable to people living in an area where every house is separate and different and there is nothing at all to distinguish the area and give it character of an estate other than the fact that the landlord of all the houses is the same. I should be grateful to the Minister if he would clarify these words in order to make it clear, in any subsequent interpretation, that the Clause is not intended to cover an area of that kind.
    Mr. Moyle: I should be grateful if the Minister would clarify for my hon. Friends and myself the meaning of the phrase "regulate redevelopment". As far as I understand, it is not a legal term of art. I have never seen it used as a term in conveyancing. It is an entirely new term, and it strikes me as an incredibly vague term.
    I regard the reply which the Minister gave to my hon. and learned Friend the Member for Dulwich (Mr. S. C. Silkin) as totally unsatisfactory. To put it at its worst, what will happen to the idea of security of tenure with this provision written into the Bill? Will there be any terms for compensation if the landlord is allowed to take over a tenant's house and redevelop it? If so, what are to be those terms? Is it envisaged that care will be taken of such problems? We should have an answer to those questions, as this is a very important matter.
    Mr. Willey: Two points have been made. I said that we have provided that the Clause is not so narrowly drawn, so that estates previously excluded may now qualify. We are primarily considering the character of the estates. On redevelopment, we recognise that, if this is a well-managed estate and satisfies the criteria, development would affect its character. We provide for enfranchisement within its desirable and well-managed environment, but the regulation of redevelopment must obviously affect its character. That is why we have made this reference to it.
    Question, That the words proposed to be left out stand part of the Bill, put and negatived.
    Question proposed, That the proposed words be there inserted in the Bill.
    Amendment to the proposed Amendment made: In line 12, leave out 'two years' and insert 'one year'.—[Mr. S. C. Silkin.]
    Proposed words, as amended, there inserted in the Bill.
    Mr. Willey: I beg to move Amendment No. 54, in page 30, line 43, at the end to insert:
    ';but regard may also be had to the past development and present character of the area and to architectural or historical considerations, to neighbouring areas and to the circumstances generally'.
    This Amendment goes with one which we have already discussed, which enlarges the factors which the High Court can take into account in deciding whether or not to approve a scheme put forward by the freeholder of an area for which a certificate has been granted. It allows the court to take into account not only the benefit to the area as it stands but also its past development, any architectural and historical considerations, and the general environment of the area.
    Mr. Clegg: I give a qualified welcome to the Amendment, which widens the court's scope, but Clause 19 is weakly and will be of singularly little use. Why has the Minister differentiated between the properties of private landlords and those of the Crown? On 31st March, in a Written Reply to his hon. Friend the Member for Woolwich, West (Mr. Hamling), he said:
    "The various Crown authorities will agree to enfranchisement and extension of leases for qualified leaseholders holding from the Crown on the terms provided for in the Leasehold Reform Bill, except that enfranchisement will be refused where the house is of special architectural or historic interest or adjoins such houses and is important in safeguarding them and their surroundings …"—[OFFICIAL REPORT, 31st March, 1967; Vol. 747, c. 42.]
    In these cases, it seems that the tenant will not be able to enfranchise his holdings. The right hon. Gentleman is not applying the same criteria to the houses which are the freehold of a private individual, but is drawing a distinction.
    Another Clause deals with National Trust properties, tenants of which, subject to certain qualifications, will not be able to obtain enfranchisement. Perhaps the Minister would tell us why he draws this distinction between Crown properties and properties the freeholder of which is a private individual or company.
    12.30 a.m.
    Mr. Willey: I congratulate the hon. Gentleman on his ingenuity, which I have always admired. He had an Amendment down which was not unrelated to this matter. This is not related to the point which we are discussing. But I take his point about buildings of historic or architectural value which are in the hands of the Crown. The analogy is the analogy which he made: it is more with the National Trust. We recognise that there are some properties in the hands of the Crown which are held for the nation because of their historic and architectural interest. It is for those reasons that enfranchisement would be inappropriate.
    Amendment agreed to.
    Further Amendments made: No. 55, page 31, line 1, leave out '(2)' and insert '(1)'.
    No, 56, page 31, line 2, leave out 'notwithstanding subsection (2)'.
    No. 57, page 31, line 13, leave out '(2) to' and insert '(3) and'.
    No. 58, page 32, line 11, after 'the', insert 'redevelopment,';
    No. 59, page 33, line 18, leave out from 'that' to 'as' in line 19 and insert 'a certificate could in accordance with subsection (1) above be given'.
    No. 60, page 33, line 33, leave out 'subsection (2) above' and insert 'this section'.—[Mr. Willey.]
    No. 61, page 34, line 7, leave out 'two years' and insert 'one year'.—[Mr. S. C. Silkin.]
    Mr. Maddan: I beg to move Amendment No. 62, in page 34, line 16, at the end to insert:
    (14) Where pursuant to a certificate issued under subsection (2) of this section application has been made to the High Court to approve a scheme and the landlord shows to the satisfaction of the High Court that the area is held under statutory enactment or trust deed and that the profits therefrom are used for some public or charitable purpose the High Court shall be empowered to approve a provision in the scheme enabling the landlord to retain such development rights in respect of the house and premises for any user additional to that provided in the tenant's lease current at the time of acquisition by the tenant of the landlord's interest in the house and premises.
    In the event of such a provision being included in a scheme then the purchase price to be paid by the tenant under section 9 of this

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    Act shall ignore any value attaching to the development rights retained by the landlord.
    The Amendment is inspired by the troubles which Letchworth will find itself in as a result of the Bill's passage, because Letchworth has never had the disease which the Bill seeks to cure. The tenants there have always had security of tenure on land value only. I will deal briefly later with the point which the Joint Parliamentary Secretary made in Committee when he cast doubt on that aspect.
    My main point can be introduced by reference to what the Minister said on an earlier Amendment today about rateable value. He said that the purpose of the Bill was to deal with those areas which suffered the worst hardship under the leasehold system. The fact is that no hardship is being suffered under the peculiar leasehold system of Letchworth. Also, the Bill damages the community of Letchworth because the Corporation holds the land for the benefit of the community. The Amendment seek to help the Corporation financially, though it will not help it in some of the larger battles.
    May I read the concluding phrase of the leading article in The Times of 4th May which referred to the effect of the Bill on Letchworth.
    "Now it"—
    that is, Parliament—
    "is being whipped into passing another Act which has the incidental effect of undermining them"—
    that is, the principles embodied in the Letchworth experiment—
    "and this in spite of the fact that by taking account only of site value in the renewal of leases Letchworth already observes one of the rules which the Leasehold Reform Bill is most concerned to establish."
    The purpose of this Amendment is to retain for the community in Letchworth—and it could be elsewhere—the increment in the development value which will arise if the enfranchised leaseholder redevelops within the period of the lease plus the 50 years' extension.
    Now the right hon. Gentleman says the corporation has not compulsory powers and therefore it could never have benefited from such redevelopment anyway. If that is what he continues to say, I think there is a misunderstanding.
    1598
    The practice is this. In Letchworth, lessees have been in the habit of coming to the corporation seeking extensions long before their leases are running out and when they have 40 years or even 60 years to go. When that happens the new ground rents are agreed. Now the leases naturally provide that any change of user can only be made with the consent of the Corporation. Perhaps the leaseholder wants to build a bungalow or two in his garden.
    Previously—and upstairs in the Committee—great play has been made about Clause 17 giving the freeholder the right to regain possession for redevelopment purposes, and therefore it has been alleged that the full redevelopment value is going to go back to the landlord anyhow. But I do not think this is true for a number of reasons, one of which is that Clause 17 only envisages a situation where premises are going to be actually demolished and reconstructed. I did develop many other reasons in Committee, but I am not going to restate them tonight, and that is the main one. This may be related to the point we have been discussing about regulating redevelopment, although I do not know that it is.
    But the consent of the landlord to further development is only given to the leaseholder at the present time for a quid pro quo in the form of a higher ground rent, and this also brings forward revenue to the corporation which otherwise it would have to wait to the end of the lease to realise. Under the Bill, this right to a quid pro quo goes into the pocket of the enfranchised leaseholder and not into the benefit of the corporation on behalf of the community.
    The Minister's statement on the need for compulsory purchase powers, to which I have alluded, is, I think, wide of the mark for another reason, and I think he may have had in mind the 1954 Rent Act. If that is what he has in mind this difficulty can always be overcome in Letchworth by the Letchworth Urban District Council acting on behalf of the Corporation, so that really there is no great lack of compulsory powers here should they be required.
    What the Amendment does is to give the High Court power to grant to well-managed estates held under Statute or trust deeds and whose profits are used

    1599
    for some public or charitable purpose the right to future development value. The Amendment, I would like to stress, is not otiose—one of the right hon. Gentleman's favourite words—because so far as I can see without it the High Court might decide that such provision is ultra vires. The Amendment can serve a useful purpose.
    The Amendment is to Clause 19 and not Clause 29, as might have been expected, because the right hon. Gentleman has consistently although illogically said that any relief for Letchworth must come under Clause 19.
    I conclude by emphasising that the Amendment will bring only partial relief for Letchworth. The only proper, logical and fair, course is to exclude Letchworth from the provisions of the Bill. At the beginning of my remarks I pointed out that in Committee the Parliamentary Secretary had cast doubts on the security of the leaseholders of Letchworth. He pointed out that under the Letchworth Garden City Corporation Act the Corporation can extend and renew leases. I understand that the Corporation will, in the event of its being excluded from the provisions of the Bill, introduce a Private Bill to enshrine this policy as a statutory duty and will pay compensation at the fair market price, including the assumption that the lease is extended by 50 years. In the meanwhile, the Amendment will give Letchworth the opportunity of a little financial relief from the adverse effects of the Bill, and I hope that it will have the support of the Government and all hon. Members.
    Mr. Graham Page: As an acknowledgment of my hon. Friend's determination and gallant persistence in the cause of Letchworth, I hope that the right hon. Gentleman will accept the Amendment.
    Mr. Willey: I certainly join the hon. Member in taking note of his hon. Friend's gallant persistence, but I am surprised, at this late stage in our dialogue, that he should expect me to be ready to accept the Amendment. On the question of development value there is complete accord between Ebenezer Howard and his followers and the Government. Ebenezer Howard and his followers at Letchworth believe that there should be 100 per cent. betterment levy. This is the difference between us.
    1600
    The Amendment relates to the discussion we had on Clauses 28 and 29 in Committee. We were able to meet Letchworth on Clause 28, but not on Clause 29, and the hon. Member, with his usual ingenuity—which again I admire—is raising the matter on this Clause. The difficulty is that the Letchworth Corporation has no compulsory purchase powers, and therefore has not the machinery to enforce the purpose of the retention of the development rights.
    The hon. Member referred to the provision concerning the regulation of the redevelopment of an estate. What he said should have reassured my hon. and learned Friend the Member for Dulwich (Mr. S. C. Silkin). This is the difficulty facing Letchworth. It is a question of not having compulsory purchase powers. As far as I know there are no leases with less than 40 years to run in Letchworth, so Letchworth, by the fact that it is subject to the leasehold system, is precluded from redevelopment except by buying out leaseholders. That matter has been previously discussed in our proceedings.
    If the Letchworth Corporation is going to seek powers under a Private Bill it may well decide that it should seek compulsory purchase powers. This would be a question of some importance—it would be a question whether Parliament should accord compulsory purchase powers to such a public body. Unless that is done, unless Parliament so decides, there are very real difficulties about this. That was why I dealt with Clauses 28 and 29 together. We were happy to meet the case of Letchworth under Clause 28, but we could not do so under Clause 29 because of the difficulty which I have mentioned.
    12.45 a.m.
    Mr. Maddan: The purpose of redevelopment value is not necessarily simply for central area redevelopment, as the Minister imagines. Anybody in an outlying area who decides to build three bungalows in his garden does so to his private gain and, therefore, at the expense of the community, who at present have the benefit of that development value because, as a leaseholder, such a person has to come back to the corporation to get permission for the redevelopment. Once he is enfranchised, that has gone. As for central area development and,

    1601
    possibly, the need for compulsory purchase powers and to bring in a lot of leases at the same time, I reiterate that the urban district council would act for the corporation if that was necessary. Therefore, that is not required.
    I know that the Minister is to see representatives of Letchworth next week. I hope that he will tell us that he will see them in a frame of mind sympathetic to what they are trying to achieve and that he will be determined to try to understand their point of view, which, I am certain, they will put more eloquently than I have done, because I certainly do not seem to have made my point sink in.
    Mr. Willey: I would be surprised if the eloquence of the delegation from Letchworth, gracious though it may be, matches that of the hon. Member. I assure him that I am anixous to meet the representatives of Letchworth and to persuade them that what we are doing is not to the prejudice of Letchworth.
    I share the hon. Member's admiration of the Letchworth Estate and its management. I have, however, undertaken to see the delegation again. As the hon. Member knows, the point mainly at issue is whether Letchworth is prejudiced by the terms of compensation under the Bill in relation to the terms of compensation under which it acquired the estate.
    Amendment negatived.
    Sir H. Lucas-Tooth: I beg to move Amendment No. 63, in page 34, line 16, at the end to insert:
    (14)(a) If the Minister is satisfied that a body

    (i) sufficiently represents the interests of the tenants of houses in an area as regards which the requirements of subsection (1) above are in his opinion satisfied; and

    (ii) has been properly appointed or constituted; and

    (iii) is so constituted as to be able to perform the functions to which this subsection relates,

    he may certify that body as a body for the purposes of this subsection and this certificate shall define the area to which it relates;
    (b) subject to the provisions of this section any body certified by the Minister under paragraph (a) above may apply to the Court for approval of a scheme relating to the area defined in the certificate and accordingly the expression 'landlord' in this section shall, where the context so admits, include any body so certified by the Minister:
    1602
    Provided that when the expression 'landlord' includes such a body, subsection (5) above shall be modified by substituting for the words 'a degree of control out of proportion to that previously exercised by him' the words 'a degree of control out of proportion to that previously exercised by the landlord'.
    In moving the Amendment, I am particularly concerned with the Hampstead Garden Suburb, a substantial part of which is in my constituency. It is certainly one of the best-known and best-run areas of the kind which we are considering under the Clause. I might mention that it has among its residents and among my constituents the Prime Minister, the Minister without Portfolio, the right hon. Member for Easington (Mr. Shinwell) and the Minister in charge of the Bill. That accounts, perhaps, for the size of my majority.
    Hampstead Garden Suburb is a homogeneous area. All the houses are leasehold. They are now all owned by the same landlord, although on a variety of leases and subject to various conditions and terms. A large majority of the tenants in the area are extremely concerned about the effects that the Bill will have upon them. I do not know whether they speak to the Minister about this, but they certainly speak to me and they sent a deputation to see me. There is among them a strong and understandable desire that they should preserve not only the amenities of the garden suburb, but the general character of the area, a view with which, I think, the Minister will agree.
    The rules which have made the suburb what it is and which govern it are enshrined in the leases which have been granted to the various tenants. These rules include positive and negative covenants of the most stringent kind. Undoubtedly, when enfranchisement takes place it will put a complete end to these rules and leave the suburb without any control whatsoever.
    I do not think I need say that the general planning law is quite inadequate to deal with this situation. I will grant the Minister that Clause 19 as amended might be satisfactory to deal with it. I am not saying that it is perfect or what I would have asked for but at any rate it will go some way towards dealing with the situation. But the trouble about the Clause, even as amended, is that it

    1603
    can only be brought into operation by the landlord himself.
    Although I have no quarrel with the present landlord of the suburb—it is an immense undertaking with immense resources—I share the apprehensions of my constituents about the probability, to say the least, that the landlord will not take the necessary action. I cannot see why he should do so.
    These are all leasehold properties, the great majority of which will come within the purview of the Bill. It is surely inevitable that, sooner or later, probably sooner rather than later, a very large proportion of my constituents will seek to enfranchise their leaseholds and convert them into freehold properties. If that is so, why should the landlord merely saddle himself with an immense responsibility? I do not think that there is any reason to hope that he will do so.
    During the Committee stage, an Amendment was moved by the hon. and learned Member for Dulwich (Mr. S. C. Silkin) in similar terms to this Amendment and the Joint Parliamentary Secretary was very sympathetic. He concluded his reply by saying:
    "… but we certainly would be prepared to have another look to see if there is any practical way in which we could do what he wants."—[OFFICIAL REPORT, Standing Committee B, 4th May, 1967; c. 654.]
    What the hon. and learned Gentleman wanted was, roughly speaking, what I want today. The only difference is that, whereas he wanted to empower the local authority to come, I do not wish that, nor, I understand, do my constituents.
    The Joint Parliamentary Secretary gave the reasons for not accepting the Amendment moved by the hon. and learned Gentleman under four heads. I am not certain that they came to four, but he said there were four. I will analyse what he said. First, he said that it would be difficult for the Minister to decide which group of tenants should be empowered to exercise these powers.
    My Amendment proposes that the powers should be vested in a body—which is a word used in the Bill so there is nothing in new or extraordinary about it in this context. As the right hon. Gentleman knows, the Hampstead Garden Suburb is at present at work upon the drafting of a Private Bill to consti-
    1604
    tute just such a body. So we would meet that by this Amendment. It is proposing to create a corporation, to be constituted of eight members, four being appointed one each by the Law Society, the R.I.B.A., the Royal Institute of Chartered Surveyors and the National Trust. I believe that all these bodies have consented to act. The other four members would be elected by local residents.
    In the second place, the Minister said that it would be difficult to define the area in question. That seemed a somewhat thin argument, and, in any case, it is covered by the present Amendment. In the third place, it was objected that a group of tenants could delay enfranchisement. I need only state that objection to show what nonsense it is. In the present case, the tenants want this proposal. There may be an odd one who does not, but a little delay here will do no one any harm. In the fourth place, it was asked, who is to appoint the group of tenants in question? That has been answered by what I have said about the proposed corporation.
    I hope, therefore, that my Amendment meets all the objections which the Government have been able to scrape up. It is a reasonable proposal. It relates to an area well known to the Government, and it may well apply to other similar areas. I do not know about that, but I have referred to the particular case because it is of some importance, covering many thousands of houses. If the Government will not accept the Amendment in terms, I hope that they will at least give a firm promise that they will deal with the matter when the Bill goes to another place.
    Mr. Moyle: The hon. Member for Hendon, South (Sir H. Lucas-Tooth) advanced some compelling arguments in favour of the Amendment, and I would not like my right hon. Friend to think that support for it comes only from the benches opposite. It gives me great pleasure to say that, at this late stage in our deliberations, this is the first Amendment coming from the party opposite which I consider to be wholly attractive, greatly to be welcomed, and for the benefit of lessees.
    We all want to preserve, as far as possible, the well managed estates. This is

    1605
    not in issue. The concept of a scheme of management is an excellent one, which can be developed, but, with respect to my right hon. Friend, we have not got it right yet. The trouble with the Clause unamended is that, as the hon. Member for Hendon, South pointed out, the initiative lies entirely with the landlord. Here, I must record, with some surprise, my agreement with certain points made by the hon. Member for Crosby (Mr. Graham Page). If there is a large move towards enfranchisement on well-managed estates, the landlord will not be interested in taking on the powers of management which the Clause as drafted provides for, and I suspect that it is the difficulties in this connection which have driven my right hon. Friend to use such vague and rather dangerous concepts as the regulation of the redevelopment of an estate. If he accepted the Amendment now proposed, my right hon. Friend could, very largely, drop that dangerous concept, which has caused my hon. Friends and me such concern.
    We all know what the Government's objections are, but I urge them to accept that this is an occasion when they should be bold. I have had some experience as an estate director in running well-managed estates, as they have been called, and, in my experience, the real drive towards the maintenance of such estates comes not from the services provided by the landlord in the maintenance of the amenities as such. The real power behind the preservation of these estates is the desire of the individual tenant to maintain and enhance the value of his property. That should be recognised and developed. The hon. Member for Hendon, South has indicated how we may do that, and we should be grateful to him.
    1.0 a.m.
    The real snag with getting the tenants to take the initiative in maintaining the well-managed estate is that they are a rather large and disparate body. One must get over the initial hurdle of organising them. When attempts are made to do this there is no doubt that there is always the odd awkward tenant. There is always the odd tenant who tries to hold back, and although he pretends to do so on principle it may be that the scheme has been promoted at a time of temporary financial embarrassment for his family.
    1606
    Only the gentlest pressures are required to bring the tenants together. Once the initial hurdle is over they are perfectly capable of running a first-class scheme for the preservation of a well-managed estate. The Amendment provides a suitable framework for so doing. I should like wording covering a body which is set up after the Act comes into force and which does not just apply to a body that is already in existence when it comes into force.
    I said that the gentlest of outside pressures were required to get a scheme of this sort going. Perhaps the Ministry of Housing and Local Government is not at present equipped to exert that sort of pressure. It has been suggested to me that my right hon. Friend the Minister might care to create some sort of national body with the responsibility for pomoting organisation among the tenants, and organising negotiations between those who wish to enfranchise and the landlord. I should like to have the Minister's comments on that.
    Subsection (7) provides for the rights of the landlord to be taken over either by the local authority or by any other suitable body. I have always read that as meaning a committee of the tenants of the estate. But it may well be that the wording is loose enough to cover something like the national commission or committee to which I have refered. I should be grateful if the Minister could tell me about that.
    Mr. S. C. Silkin: I too am grateful to the hon. Member for Hendon, South (Sir H. Lucas-Tooth) for moving the Amendment, which is in principle identical to that which I moved in Committee. If he looks again at that Amendment and the Clause he will see that we are not even at issue over the question of local authorities, because I was merely repeating what appeared in subsection (7) and transferring it to new circumstances.
    I am not so pessimistic as the hon. Gentleman about what the freeholders of the estates are likely to do. I was rather encouraged in my greater optimism by hearing my right hon. Friend say earlier this evening that he had been approached by the freeholders of some of the large estates, and that it was as a result of that approach that he revised the wording of Clause 19. That seems to show that they are sufficiently interested in Clause

    1607
    19 at any rate to want him to alter its terms in a way which would presumably be more likely to encourage their interest.
    It would be wrong to assume that the process of enfranchisement on the large estates will be very rapid. It is bound to take a number of years, and I cannot see why any estate owner should be prepared in the transitional period to relax the control he now enjoys, which can only affect his land values in the course of the period of enfranchisement. None the less, one must cater for the sort of cases where the freeholder would not take the steps under Clause 19. It is for this purpose that the hon. Gentleman has moved his Amendment and it seems to me to be valuable.
    Sir H. Lucas-Tooth: The hon. and learned Gentleman has made what appears to be the valid point that the landlord will wish to preserve the value of his land. However, as he will never receive the reversion, because it will always be snatched away from him as it is becoming due, that argument is unreal. He has to manage the estate with a tenant sitting there. He cannot let or increase the rents, so he will have no inducement to take on the responsibility for those who enfranchise.
    Mr. Silkin: I do not agree with the hon. Gentleman. As I am agreeing with the Amendment, perhaps we ought not to spend time dealing with this in detail.
    What the landlord will obtain by way of redevelopment value must depend on whether the estate, at the time when enfranchisement takes place, is in good or bad condition.
    Be that as it may, this is a valuable provision. I should like to see this sort of principle, which is what one might call a housing association or housing society principle, extended much further than merely to estates which are at present leasehold and which will become freehold. I regard it as a very valuable experiment which, if successful, as I believe it will be, can be applied much more generally in urban areas and can be capable of creating residential communities in the true sense of the term.
    Mr. Skeffington: The hon. Member for Hendon, South (Sir H. Lucas-Tooth) recalled that in Committee I was sym-
    1608
    pathetic to the case put by my hon. and learned Friend the Member for Dulwich (Mr. S. C. Silkin). I am glad to report that my right hon. Friend is still very sympathetic to this principle and, even at this late stage, would like to take any practical step he can to meet it. That was and still is the position, but there were certain difficulties.
    I am sorry that the hon. Gentleman used the words "scraped up objections". When one has sympathy one does not care to find obstacles to prevent one from carrying out what one would like to achieve. Certainly on broad democratic principles of self-government, if it is possible to get a body that could discharge this task, it would be ideal. In theory and in practice a body of residents who cared about the estate and area in which they lived would be the ideal body to undertake a scheme and to see that its provisions were enforced.
    There are difficulties, however, which I must mention again. I realise that the hon. Gentleman is speaking very largely with a particular estate in mind where some of the difficulties which I mentioned in Committee are not likely to arise in such a severe form. If the composition and constitution of the body is regulated by a private Act of Parliament then many of the difficulties would not arise with the estate which he has in mind.
    However, the Amendment would also relate to other areas, and the Minister would have to be satisfied that the body sufficiently represented the interests of the tenants and had been so constituted as properly to be able to perform the functions of the subsection. A heavy responsibility would rest on the Minister to see that it was done properly. I am not sure about the sort of machinery which would be required, but it would obviously involve some fairly comprehensive inquiries. I mention these things not because I want to defeat the object of the Amendment, but in order to show that there are practical administrative difficulties.
    We all know how committees are sometimes elected—although not in the area which the hon. Gentleman represents—and that is a difficulty which any Government would want to regard as satisfactorily solved before embarking on this sort of solution. Even if one got over that difficulty—and I said in Standing

    1609
    Committee that it was not beyond the wit of man to devise ways in which to do that—there would still be the fact that it would be difficult, if not impossible, for a group of tenants to hold up enfranchisement. I do not mean that it would be wrong for a group to do so, but there would be interference with the fundamental rights of the freeholder.
    There is nothing in the Amendment to prevent the owner of the freehold from disposing of it at any time, whether or not a group of tenants was in being or in process of being formed. There would be some estates where some tenants would want to get on with their enfranchisement and there would be nothing to prevent the freeholder from disposing of the freehold while the scheme was being set in being, even if the court could stop the disposal of freeholds after that time, although I am not certain of the full legal effects of the Amendment.
    However, I share the belief that in a number of cases the leaseholders will want to operate schemes and that with leases of 999 years, there is some inducement for the freeholder to maintain the estate in the best possible condition. My right hon. Friend has been impressed by the argument here, in Committee and elsewhere. He very much believes in this form of control and he would like to consider the matter further. He cannot accept the Amendment and it is impossible for him to do anything immediately, but certainly the door is not closed and if it is practicable to add a provision to the Bill to provide for what the hon. Gentleman has in mind, my right hon. Friend would very much like to do so.
    If the group of whom the hon. Gentleman has spoken would like to discuss any matters with my right hon. Friend, even at this stage, he would be happy for the hon. Gentleman to bring it to see him. I cannot advise the House to accept the Amendment, but my right hon. Friend is still very sympathetic and if it is possible in any way to meet the point, he will do so.
    Sir H. Lucas-Tooth: In view of the hon. Gentleman's generous offer, I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.

    Clause 21.—(JURISDICTION OF LANDS TRIBUNAL.)
    Amendment made: In page 36, line 7, leave out from '15(2)' to the end of line 8.—[Mr. Willey.]

    Clause 23.—(AGREEMENTS EXCLUDING OR MODIFYING RIGHTS OF TENANT.)
    Mr. Willey: I beg to move Amendment No. 65, in page 38, line 35 [Clause 23], after 'binding', to insert:
    'or any provision of such an agreement excluding or restricting for a period not exceeding five years the right to give a further notice of either kind with respect to the house or any part of it;'.
    This Amendment was prompted by a suggestion of the hon. Member for Crosby (Mr. Graham Page). We are here avoiding prejudicing reaching agreement by the possibility of a party insisting on the provisions of Clause 9(3). I hope that the Amendment will be acceptable to the hon. Gentleman.
    Amendment agreed to.
    1.15 a.m.
    Mr. Skeffington: I beg to move Amendment No. 66 in page 39, line 18, to leave out from 'court' to first 'and' in line 20.
    This is little more than a drafting Amendment. We accepted an Amendment in Committee, moved by the hon. Member for Crosby (Mr. Graham Page) and it was pointed out that the insertion of the words "the freehold or" in line 14 left a certain amount of doubt in drafting and the words on the Order Paper restore the position.
    Amendment agreed to.
    Mr. Skeffington: I beg to move Amendment No. 67, in page 39, line 26, at the end to insert:
    Provided that where the existing tenancy is granted after the commencement of this Part of this Act (whether or not it is, by virtue of section 3(3) above, to be treated for other purposes as forming a single tenancy with a previous tenancy) and, the grant being subsequent to the creation of a charge on the landlord's estate, the existing tenancy is not binding on the persons interested in the charge, a tenancy so granted shall not by virtue of this subsection be binding on those persons.
    This is a precisely similar point to that in Amendments No. 40 and No. 43 where we were seeking to prevent a fraud upon the mortgagee. I explained it and I am

    1611
    willing to explain it again if the House would like, but there could be collusion with the freeholder by creating a long lease and, after the qualifying period of five years, the occupier asking for a new lease. He could then sell the freehold without encumbrance. We are safeguarding the position of the mortgagee.
    Amendment agreed to.
    Further Amendments made: In line 8, leave out from 'above' to 'except' in line 29, and insert:

    (a) the terms of the new tenancy may exclude any right to acquire the freehold under this Part of this Act; and

    (b).

    In line 30, leave out '16(1) to (6) above' and insert:
    '14(4A) above, section 16(1) to (6)'.—[Mr. Skeffington.]

    Clause 25.—(APPLICATION OF PRICE OR COMPENSATION RECEIVED BY LAND LORD, AND CHARGE OF BETTERMENT LEVY ON ENFRANCHISEMENT.)
    Mr. Graham Page: I beg to move Amendment No. 101, in page 41, line 7, after 'shall' to insert 'not'.
    This is a nice, brief Amendment for this time of night; and may I take the opportunity of saying an omnibus "Thank you" for the Amendments passed in the last few minutes?
    I hope I shall be able to say "Thank you" when the hon. Gentleman has accepted this Amendment to the Clause which imposes betterment levy on receipt by the landlord of compensation from his tenant. This is the Clause which adds insult to injury. Property is taken away from the landlord for a fraction of its value and then he is asked to pay betterment levy. This is a shocking position.
    This Amendment is to relieve the landlord of liability for betterment levy and of course there should be that relief. I hope that the right hon. Gentleman, who intends to take an owner's property and give it to a third person, will step out of the shoes of middle man and not try to seize a commission on the way. That is what he is doing here. I know that it is going to his own baby, the Land Commission, but I hope he will here and now drop the idea of getting that cut on the way and that he will accept this Amendment.
    Mr. Willey: The hon. Gentleman knows that there is no possibility of my affording him an opportunity to say "Thank you" to me. Where there is betterment, obviously there must be betterment levy. If there is betterment here, then, just as in the other case of compulsory purchase, the levy will follow.
    Amendment negatived.

    Clause 28.—(RETENTION OR RESUMPTION OF LAND REQUIRED FOR PUBLIC PURPOSES.)
    Mr. Willey: I beg to move Amendment No. 70, in page 42, line 30, to leave out 'by them for' and to insert 'for relevant'.
    This Amendment, with subsequent Amendments, provides that where action is taken under Clause 28 it will be in respect of property which is taken for the primary purpose of a public body and not for investment purposes. It is to meet a point which was raised by my hon. Friend the Member for Oxford (Mr. Luard) in Standing Committee.
    Mr. Luard: I should like to express my appreciation to the Minister for moving this Amendment. To me this is a matter of great concern, as it is to many people in Oxford.
    Under a certain interpretation of the Clause, it could mean that very few leaseholders in Oxford would have enjoyed the right of enfranchisement as they have the right to expect. I should like my right hon. Friend to clarify one or two points. I refer particularly to subsection (1,b). The general purpose of this paragraph is to refer to the university itself, or a college as being included in the term "a university body", and as being interchangeable for the purposes of this Clause. The effect of this is that the landlord whom we have in mind in Oxford will be able to ask for a certificate from the Minister not only in the case when it is claimed that it needs one of these properties for itself but in any case where the claim is for the university as a whole.
    Anybody who has lived in a university town knows that the demands of a university for property are wholly insatiable. They are put forward again and again every year. If this Clause means that in every case when a university needs land for any purpose whatever, all it has

    1613
    to do is to go to St. John's College and ask the college to apply to the Minister for a certificate under this Clause, and in those circumstances the Minister will be bound under the wording of the Clause to grant—
    Mr. Speaker: Order. We are not debating the Clause. We are debating an Amendment. The hon. Gentleman must relate his remarks to the Amendment which is before the House.
    Mr. Luard: With respect, Mr. Speaker, I am attempting to obtain clarification of paragraph (b).
    Mr. Speaker: We are not in Committee now. We are not discussing the Question "That the Clause stand part of the Bill." We are discussing an Amendment, in page 42, line 30, to leave out "by them for" and to insert "for relevant".
    Mr. Luard: I understood that we were taking two subsequent Amendments at the same time, Mr. Speaker.
    Mr. Speaker: Not that I am aware. We are discussing one Amendment at the moment.
    Mr. Willey: I apologise for intervening, Mr. Speaker, but I referred to these as being a series of Amendments.
    Mr. Speaker: I am sorry—I did not know we were taking them. Please continue.
    Mr. Luard: I had almost finished in any case, Mr. Speaker. I should be grateful for clarification from the Minister, that in granting certificates of this kind, the Minister concerned will be expected to interpret this Clause in a reasonable way which will not interfere unduly or unjustly with the rights of enfranchisement which leaseholders in Oxford or any other university town have a right to expect. I trust that this provision will not be allowed to be used by St. John's College, or the university as a whole, to deprive leaseholders of that right and enable the university to acquire almost any property that St. John's College chooses to make available to them.
    Mr. Willey: I am not altogether sure that I can completely satisfy my hon. Friend. Here we are concerned with the purpose and whether the purpose is
    1614
    educational. It is a fact that under these provisions a college could redevelop its property to provide accommodation for another college or perhaps provide a new university laboratory. But what we are concerned about is whether the purpose is educational or whether it is investment.
    Amendment agreed to.
    Further Amendments made: No. 71, in page 44, line 9, leave out from beginning to 'to'.
    No. 72, in line 22, at end insert:
    (5A) In subsection (1) above `relevant development', in relation to any body to which this section applies, means development for purposes (other than investment purposes) of that body, but so that—

    (a) the purposes of a county council or county borough council shall be taken to include the purposes of a police authority which is a committee of the council; and

    (b) the purposes of a university body shall be taken to include the purposes of any related university body (a university and the colleges of that university within the meaning of subsection (5)(c) above being related to one another within the meaning of this paragraph); and

    (c) in the case of a Regional Hospital Board, Hospital Management Committee or Board of Governors of a teaching hospital, the purposes of the National Health Service Act 1946 shall be substituted for the purposes of the body.—[Mr. Willey.]

    Clause 29.—(RESERVATION OF FUTURE RIGHT TO DEVELOP.)
    Mr. Allason: I beg to move Amendment 73, in page 44, line 37, to leave out 'development' and to insert:
    'material development as defined in the Land Commission Act 1967 and in statutory instruments made under the authority of that Act'.
    The Clause reserves the value of development rights in the case of local authorities, new towns and university bodies. The reason is given in paragraph 15 of the White Paper, which starts:
    "Different considerations apply to enfranchisement of land owned by local authorities. Where future development rights in land have already been vested in the community in the public interest, it is not right to transfer them back to private individuals."
    The method used in the Clause permits covenants to be made against any improvements taking place to property. For example, if an enfranchised tenant wanted to put up a garage, greenhouse or sun room, in making any development of that sort he would be acting improperly.

    1615
    The Amendment would permit reasonable minor improvements by using the definition of material development, which is now fairly well recognised as being a development which attracts Land Commission levy. This is the sort of development which is, clearly, intended in the White Paper. I am sure that the White Paper was not drafted in terms of minor improvements to a house as being something which is entirely against the public interest and must be stopped at all costs.
    Those who live in new towns have very great pride of ownership and wish to be able to improve their property. Where they have long leases, they will wish to enfranchise, and they certainly will not expect to have covenants imposed on them that will prevent reasonable improvements. I hope that the Minister can accept this small Amendment.
    Mr. Skeffington: The hon Member for Hemel Hempstead (Mr. Allason) has rightly quoted the reason for Clause 29 and the restriction by way of covenant which certain bodies can invoke in agreements where their tenants are about to enfranchise. I do not think that there has been any general quarrel with the principle that where development rights are already vested in a public authority, it would be absurd to pass them back and then make the authority compulsorily acquire them again.
    1.30 a.m.
    The hon. Member was right to say that the White Paper does not suggest that authorities need to be oppressive in their covenants. They must reserve their rights, but all sorts of development are possible by permission or understanding or agreement. But the hon. Member failed to realise that the Clause derives from Section 17 of the Land Commission Act in relation to the position of Crownholders and that it uses the broader term and not the narrow term which he uses. He uses the precedent from the Land Commission Act which suits his purpose, but he does not use that which was the father of this provision. The reason that "material development" was used in the Land Commission Act is that it was not thought reasonable to impose levy on a very wide range of development which it
    1616
    was hoped that those concerned would undertake.
    But the hon. Member was wrong to refer to "minor" development. It is true that in some paragraphs of the General Development Order some of the matters dealt with are trivial. But the developments permitted under Schedule 3 which do not carry levy under the Land Commission Act are not minor. Under Schedule 3 one can rebuild as many times as necessary the house which one occupies as long at it does not increase it by one-third or 1,750 cu. ft. more than the original cubic capacity. That is hardly minor development. It would be ridiculous to say that public authorities may retain development rights by covenant and at the same time allow people to rebuild as many times as they liked in enlarging the house. For those reasons, I must ask the House to reject the Amendment.
    Moreover, authorities can—and sensible and wise authorities I am sure will—and Ministerial suggestions to this end can be made if they do not—implement these provisions reasonably. These are rights which do not always exist with a private landlord. Further, a local authority is not obliged to insert covenants if it is sure—in relation to its development rights—that it is not likely to require the property for, say, 50 or 60 years. That will be governed by the plans.
    The general principle is that if the development rights are vested in the authority it would be absurd to prevent the authority from exercising them. I must ask the House to accept the Clause as drafted.
    Amendment negatived.

    Clause 34.—(TENANCIES TERMINATED SINCE 8TH DECEMBER 1964, OR SUB JECT TO EARLY TERMINATION.)
    Mr. Skeffington: I beg to move, Amendment No. 75, in page 50, line 30, at the end to insert:
    For purposes of this subsection a tenancy granted to the tenant of the house under a tenancy granted by way of continuation of the former long tenancy, or to the person retaining possession of the house by virtue of any such statutory tenancy as aforesaid, shall be regarded as granted by way of continuation of the former long tenancy.

    1617
    This Amendment ensures that the provision of Clause 34(1) applies to a case in which the original tenancy was followed by two or more contractual or rack rent tenancies or a statutory tenancy which in turn was superseded by a contractual tenancy. We were fairly satisfied that the position was covered by the Clause as drafted, but in view of representations made by my hon. and learned Friend the Member for Dulwich (Mr. S. C. Silkin), we have decided to put it beyond peradventure.
    Amendment agreed to.

    Clause 35.—(PROCEEDINGS AND ORDERS UNDER LANDLORD AND TENANT ACT 1954.)
    Mr. Willey: I beg to move, Amendment No. 76, in page 54, line 28, after 'claimant' to insert:
    '(whether before or after the making of the claim)'.
    The Amendment meets a point raised with us by the Law Society. It improves the landlord's position in a case under the transitional provisions where a leaseholder about to be dispossessed lodges a claim in court and nullifies his landlord's court order for possession. It is purely procedural, but it facilitates the action which the landlord can take.
    Amendment agreed to.

    Clause 37.—(INTERPRETATION OF PART I.)
    Mr. Graham Page: I beg to move, Amendment No. 104, in page 56, line 16, after second 'day ' to insert:
    '(not earlier than two years from the passing of this Act)'.
    This Clause brings the Bill into operation on an appointed day, and I am being very generous in allowing the Minister second thoughts about the Bill. I am glad to see that the Minister has joined us, as he has certainly come to direct the Minister of State to accept the Amendment. I am giving them both the opportunity to escape from their follies and to put the Bill on the shelf for a couple of years. The main consideration is not so much to give them second thoughts as the fact that, by that time, this Government will have packed up and gone to the country and there will be a Conservative Government, which will have the opportunity to bring in a Bill for fair enfranchisement and not this Bill. They
    1618
    should put it on the shelf for a couple of years and accept the Amendment.
    Mr. Willey: That was a fine speech for this time in the morning, but the hon. Gentleman does not expect me to accept the Amendment. We do not need second thoughts. The Amendment only emphasises the hon. Gentleman's distaste for the subject of leasehold reform.
    Amendment negatived.

    Clause 38:—(MODIFICATION OF RIGHT TO POSSESSION UNDER LANDLORD AN TENANT ACT 1954.)
    Amendment made: No. 79, in page 58, line 21, after 'applies' insert:
    'and the property is required for relevant development within the meaning of section 28;'.—[Mr. Willey.]

  Schedule 1.—(ENFRANCHISEMENT AND EXTENSION BY SUB-TENANTS.)
  Mr. Willey: I beg to move Amendment No. 81, in page 64, line 11, at the end, to insert:
  ', and he shall deal directly with the claimant if the claimant by written notice given to him and to the reversioner so requires.'
  I am glad to realise that we have now reached the Schedules. This is another Amendment arising out of comments by the Law Society; it will provide for more flexibility.
  Amendment agreed to.
  Mr. Skeffington: I beg to move Amendment No. 82, in page 65, line 37, at the end to insert:
  (2) Where by reason of section 11(2) of this Act it is necessary to make (otherwise than out of the price payable for the house and premises) any payment for the redemption of a rent-charge or other rent, the reversioner, if he is not the landlord liable or primarily liable in respect of the rent-charge or rent, shall not he required to make that payment otherwise than out of money made available for the purpose by that landlord, and it shall be the duty of that landlord to provide for the redemption; and similarly where by reason of section 12(8) proviso of this Act it is necessary to discharge the house and premises from a charge affecting the interest of any landlord.
  This is partly consequential on our Amendments to Clause 12. where there is a chain of leases. It seeks to deal with the case in which, under Clause 11(2), it is necessary for a landlord to discharge a rent charge by means of a money payment otherwise than out of the price which he is to receive, or by reason of

  1619
  the proviso inserted in Clause 12(8) by a previous Amendment, to discharge the house and premises from a mortgage by a payment out of his own pocket. The Amendment provides that the reversioner, unless he is the landlord liable under these provisions to make the payment, will not be liable to do so except out of money provided by the landlord who is liable.
  Amendment agreed to.
  Further Amendments made: No. 83, in page 65, line 39, to leave out
  'the consideration or part of'.
  No. 84, in page 66, line 49, after 'landlord', to insert:
  ', and shall give effect to section 15(2A) on the basis that account is to be taken of obligations imposed on any of those landlords by virtue of the new tenancy or any superior tenancy;'.—[Mr. Willey.]
  Mr. Skeffington: I beg to move Amendment No. 85, in page 67, line 49, at the end to insert:
  (2) Where by reason of section 14(4) proviso of this Act it is necessary to make any payment to discharge the house and premises from a charge affecting the interest of any landlord, the reversioner, if he is not the landlord liable or primarily liable in respect of the charge, shall not be required to make that payment otherwise than out of money made available for the purpose by that landlord, and it shall be the duty of that landlord to provide for the charge being discharged.
  This Amendment is similar to Amendment No. 82 where there is a chain of leases. This is a similar case in which the landlord might be otherwise forced to pay money out of his own pocket when the debt has to be discharged. In fact, the obligation is due to another holder of one of the leases. The Amendment so provides.
  Amendment agreed to.
  Mr. Willey: I beg to move Amendment No. 86, in page 68, line 16, at the end to insert:
  14.—(1) This Schedule shall apply notwithstanding that the tenancy in possession is a tenancy from the Crown within the meaning of section 33 of this Act; and where under section 33(1)(b) the appropriate authority gives notice that as regards a Crown interest the authority will grant or concur in granting the freehold or an extended lease, then except as regards the manner of execution of any conveyance or lease this Schedule shall have effect in relation to that interest and in relation to the appropriate authority on behalf of the
  1620
  Crown as it has effect in relation to other landlords and their interests, but shall not empower a person other than the appropriate authority to execute a conveyance or lease on behalf of the Crown.
  (2) A conveyance or lease executed in pursuance of paragraph 4(3) above shall be effective notwithstanding that the interest intended to be conveyed or bound is a Crown interest or a tenancy from the Crown.
  This Amendment is concerned with a chain of leases where one of the superior interests is held by the Crown. Subsection (2) of the Amendment is similar to the "Rossi" new Clause which we discussed earlier.
  Amendment agreed to.

  Schedule 2.—(PROVISIONS SUPPLEMENT ARY TO SECTIONS 17 AND 18 OF THIS ACT.)
  Mr. Skeffington: I beg to move Amendment No. 87, in page 70, line 48, after 'subject' to insert:
  'to any statutory requirements as to payment of capital money arising under a settlement or a disposition on trust for sale and'.
  Under paragraph 7(1) of Schedule 2 the written receipt of the leaseholder is, unless the compensation is ordered to be paid into court, to be a complete discharge to the freeholder for the compensation payable to him when the freeholder succeeds in terminating his extended tenancy under Clause 17 or Clause 18.
  This Amendment slightly modifies the above rule by providing that if the leasehold interest is subject to a strict settlement or trust for sale the normal rule is to apply when on a disposition of land capital money is payable to the trustees. That is to say, a good discharge will not be obtained if there are fewer than two trustees—except where one of them is a trust corporation, for example, the Public Trustee or a bank.
  Amendment agreed to.
  Mr. Skeffington: I beg to move Amendment No. 88, in page 71, line 8, at the end to insert:
  (3) Where the tenancy is held on trust for sale, any sum received in respect of it by way of compensation under an order for possession shall be dealt with as if it were proceeds of sale arising under the trust.
  This Amendment, which is complementary to Amendment No. 87, provides

  1621
  that where the leasehold interest is settled on trust for sale the compensation payable under Clause 17 or Clause 18 in respect of the leasehold interest is to be dealt with as if it were proceeds of sale arising under the trust. In other words, it is to be invested or distributed among the beneficiaries according to the terms of the settlement. This brings the matter into conformity with legislation relating to trusts.
  Amendment agreed to.

  Schedule 3.—(VALIDITY OF TENANT'S NOTICES, EFFECT ON LANDLORD AND TENANT ACT 1954 ETC. AND PROCEDURE GENERALLY.)
  Amendments made: No. 89, in page 72, line 13, leave out 'given' and insert 'made'.
  No. 90, in line 16, leave out 'given' and insert 'made'.
  No. 91, in line 29, leave out 'given' and insert 'made'.—[Mr. Willey.]
  Mr. Willey: I beg to move Amendment No. 92, in page 72, line 34, after 'that' to insert:

  (a) this sub-paragraph shall not apply where the landlord gives his written consent to a claim being made after the end of those two months; and

  (b).

  This Amendment again is to provide for a greater measure of flexibility.
  Amendment agreed to.
  Further Amendment made: No. 93, in page 77, line 20, leave out 'this Part' and insert 'Part I'.—[Mr. Willey.]
  Mr. Willey: I beg to move Amendment No. 94, in page 77, line 24, at the end to insert:
  Provided that in the case of a debenture-holders' charge within the meaning of section 12(5) of this Act this sub-paragraph shall not authorise the service of a notice on. or require a notice or copy to be sent to, the persons entitled to the benefit of the charge, other than trustees for the debenture-holders, but where the notice is served on the landlord and there is no trustee for the debenture-holders, he shall forthwith send it or a copy of it to any receiver appointed by virtue of the charge.
  This Amendment is to make provision in the case where there is a debenture-holder's charge.
  Amendment agreed to.
  Mr. Willey: I beg to move Amendment No. 95, in page 77, line 26, to leave out from 'freehold' to 'then' in line 31 and to insert:
  'or an extended lease under Part I of this Act, and the interest of the person to whom the notice is given, or of any person receiving a copy of it under paragraph 8 above, is subject to a charge to secure the payment of money,'.
  This Amendment is to meet a point which was raised by the Building Societies Association which we think should be met.
  Amendment agreed to.
  Further Amendment made: No. 96, in page 77, line 38, after 'include', insert
  'a charge falling within section 11 of this Act or'.

  Schedule 4.—(SPECIAL COVENANTS WITH LOCAL AUTHORITIES ETC. ON ENFRANCHISEMENT OR EXTENSION.)
  Amendment made: No. 97, in page 82, 82, line 8, after 'purposes', insert '(other than investment purposes)'.
  No. 98, in line 20, at end insert '(other than investment purposes)'.—[Mr. Willey.]
  Order for Third Reading read.—[Queen's Consent, on behalf of the Crown, signified]
  1.45 a.m.
  Mr. Willey: I beg to move, That the Bill be now read the Third time.
  We have had a protracted debate on this Bill. Any measure affecting property, I am driven to conclude, is a matter of some complexity, but I say at once that I am obliged to hon. Members who, in the Standing Committee and the House, have helped us to improve the provisions of the Bill.
  This is a major Bill, and an important measure of social reform which is giving to a million householders in England and Wales the right to become owner-occupiers in the truest sense. I should have thought that this was something the whole House would welcome. It brings to an end an injustice which has been felt for decades; an injustice which the previous Government were unable to solve.
  I know that the House will be anxious to reach a decision on Third Reading so I will do no more than call in aid

  1623
  the concluding words of our White Paper which we are now implementing:
  "The Government thus intends to redress the grievance felt by those living in their own homes under the leasehold system. This they will do by ending the basic defect of the system that the dwelling provided and maintained by the leaseholder or his predecessors passes to the landowner without compensation, and by giving the occupying leaseholder the opportunity to become the full owner of his home on terms fair to both parties."
  We are achieving this, and unfortunately it is this issue which has divided the House.
  1.49 a.m.
  Mr. Graham Page: The Times called this a curiously bad Bill when it headed its corrrespondence on it. It is a bad Bill, and I have other epithets for it. The Times later called it a mess, and it still remains a mess.
  I noted that, on Amendment No. 4, the Minister said that one should look to the area of hardship. Indeed, that should have been the theme of the Bill, but as it stands it does not only look to the area of hardship, it has extended it further. What we have tried to do throughout the discussions on this Bill in Committee and on Report is to diminish the scope of the injustice it causes. If it brings to an end an injustice, as the Minister said just now, then it creates many others.
  There is still the serious injustice of the lack of compensation for the property which is being taken away from the landlord; there are the injustices to the many great estates which will be fragmented as a result of this Bill—[Interruption.] The hon. Gentleman has not been here through all the debates this evening. Perhaps it would be a good idea if he kept quiet for a minute.
  Mr. Robert Maxwell rose—
  Mr. Page: No, I am not giving way to him. As I said, both in management and in development the country will suffer by the damage done. The Government have pressed forward determined to give away an owner's property to his tenant—apart from that, without really knowing what they wanted to achieve. As they worked out the proposals contained in the Bill in legislative form many anomalies appeared, but the Government obstinately refused to remove them. The
  1624
  Bill could have been a good Bill, but as it is—[Laughter.] I do not know what the hon. Member for Buckingham (Mr. Maxwell) finds so amusing. It is a serious matter, as the right hon. Gentleman said. We have tried to remove some of the injustices, but I believe that by the Bill more injustices will be created than will be removed. The Bill is a Bill of indecisions and ambiguities; a Bill of unfairnesses and injustices, and a Bill of political and electoral expediences, and it will be a disgrace to the Statute Book.
  1.52 a.m.
  Mr. Boyd-Carpenter: It is a bad thing that we should have to take the Third Reading of what the right hon. Gentleman himself described as a major Bill as we approach Midsummer dawn. I have been concerned with the Bill since the electioneering White Paper, and I want to say a few words about it. It is a very bad Bill, as all the expert bodies, all the intelligent Press and all the professional bodies have made clear, culminating in a most powerful leading article in The Times of yesterday morning. It is a bad Bill because it is founded on the false principle that in equity a house—the bricks and mortar—belong to the leaseholder.
  Based on that false principle a very dangerous step is being taken in using the power of legislation to transfer the rights of one citizen to another without proper compensation. It is a very dangerous precedent. It is made none the better for the fact that as soon as this has happened there is nothing to prevent the beneficiary flogging the property for the market price the next morning. Hon. Members delude themselves if they think that restoring the limits will prevent people making substantial capital gains as a result.
  There will be substantial gains by people who may have bought the fag end of a lease. This is wrong and unjust, and we should not allow the Bill to pass without saying bluntly why it has been brought forward. The Government have calculated that there are many more leaseholders than reversioners, and that this will please some of their supporters in South Wales. They admit that this is the reason.
  But I wonder whether they do not underrate our fellow country men, and

  1625
  whether from thinking people and people of moderate views they will get any credit for taking a step which involves the transfer, without compensation, of one citizen's property to another. Many Bills passed by the House have done injustice inadvertently. This is uniquely repulsive because it does it deliberately.
  1.54 a.m.
  Mr. G. Elfed Davies: The right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) has described the Bill as a bad Bill. Knowing him, I can understand that. When I say that in my view it is a good Bill, knowing me, he will understand what I mean. I come from the place which he regarded as one of the determining factors behind the introduction of the Bill—South Wales. Why should not South Wales have some say in this matter? We have suffered for many years from this iniquitous system. The Government are deserving of the good wishes of all the people of South Wales, who will say "What a good Bill it is".
  It is not as good as we would have liked, but it has done something to remove once and for all the many iniquities that we have suffered in South Wales for so long. The people of South Wales will bless this day. When the right hon. Member for Kingston-upon-Thames suggests that it is a bad Bill, the people in South Wales will be waving the flags tomorrow. [Interruption.] Oh, yes. Hon. Members opposite can laugh. Funnily enough, we had an interest declared earlier from the benches opposite. I, too, have an interest to declare. I am a freeholder. But, my God, so many of my constituents are leaseholders that I bless this day. I give credit to the Government for doing something that the party opposite for so long refused to do. The Government deserve praise, and South Wales will bless them for this day.
  Question put, That the Bill be now read the Third time:—
  The House divided: Ayes 140, Noes 84.

  Division No. 377.]

  AYES

  [1.58 a.m.

  Abse, Leo

  Foot, Michael (Ebbw Vale)

  Marquand, David

  Albu, Austen

  Ford, Ben

  Maxwell, Robert

  Allaun, Frank (Salford, E.)

  Forrester, John

  Mikardo, Ian

  Alldritt, Walter

  Fowler, Gerry

  Miller, Dr. M, S.

  Allen, Scholefield

  Fraser, John (Norwood)

  Mime, Edward (Blyth)

  Anderson, Donald

  Gardner, Tony

  Molloy, William

  Armstrong, Ernest

  Gower, Raymond

  Morgan, Elystan (Cardiganshire)

  Atkins, Ronald (Preston, N.)

  Gray, Dr. Hugh (Yarmouth)

  Morris, Alfred (Wythenshawe)

  Bagier, Gordon A. T.

  Greenwood, Rt. Hn. Anthony

  Morris, Charles R. (Openshaw)

  Barnes, Michael

  Grey, Charles (Durham)

  Moyle, Roland

  Barnett, Joel

  Hamilton, James (Bothwell)

  Murray, Albert

  Bidwell, Sydney

  Hamling, William

  Norwood, Christopher

  Binns, John

  Hannan, William

  Oakes, Gordon

  Blackburn, F.

  Harper, Joseph

  Ogden, Eric

  Blenkinsop, Arthur

  Harrison, Walter (Wakefield)

  O'Malley, Brian

  Braddock, Mrs. E. M.

  Henig, Stanley

  Orbach, Maurice

  Brown, Hugh D. (G'gow, Provan)

  Hilton, W. S.

  Orme, Stanley

  Buchan, Norman

  Horner, John

  Oswald, Thomas

  Butler, Mrs. Joyce (Wood Green)

  Howarth, Harry (Wellingborough)

  Paget, R. T.

  Cant, R. B.

  Howarth, Robert (Bolton, E.)

  Palmer, Arthur

  Carmichael, Neil

  Howie, W.

  Park, Trevor

  Coe, Denis

  Hughes, Rt. Hn. Cledwyn (Anglesey)

  Parkyn, Brian (Bedford)

  Coleman, Donald

  Hynd, John

  Pavitt, Laurence

  Conlan, Bernard

  Jeger, Mrs.Lena (H'b'n & St.P'cras,S.)

  Perry, Ernest G. (Battersea, S.)

  Crawshaw, Richard

  Johnson, Carol (Lewisham, S.)

  Price, William (Rugby)

  Crossman, Rt. Hn. Richard

  Jones, J. Idwal (Wrexham)

  Probert, Arthur

  Cullen, Mrs. Alice

  Jones, T. Alec (Rhondda West)

  Rees, Merlyn

  Dalyell, Tam

  Judd, Frank

  Rhodes, Geoffrey

  Davidson, Arthur (Accrington)

  Kerr, Mrs. Anne (R'ter & Chatham)

  Richard, Ivor

  Davidson, James(Aberdeenshire, W.)

  Kerr, Russell (Feltham)

  Robinson, W. O. J. (Walth'stow, E.)

  Davies, G. Elfed (Rhondda, E.)

  Lee, John (Reading)

  Rogers, George (Kensington, N.)

  Davies, Ednyfed Hudson (Conway)

  Loughlin, Charles

  Rose, Paul

  Davies, Ifor (Gower)

  Luard, Evan

  Rowland, Christopher (Meriden)

  Dell, Edmund

  Lyon, Alexander W. (York)

  Rowlands, E. (Cardiff, N.)

  Dobson, Ray

  Lyons, Edward (Bradford, E.)

  Ryan, John

  Dunn, James A.

  Macdonald, A. H.

  Sheldon, Robert

  Dunwoody, Dr. John (F'th & C'b'e)

  McGuire, Michael

  Shore, Peter (Stepney)

  Evans, Gwynfor (C'marthen)

  McKay, Mrs. Margaret

  Silkin, Rt. Hn. John (Deptford)

  Faulds, Andrew

  Mahon, Peter (Preston, S.)

  Silkin, Hn. S. C. (Dulwich)

  Fernyhough, E.

  Mahon, Simon (Bootle)

  Silverman, Julius (Aston)

  Fitch, Alan (Wigan)

  Manuel, Archie

  Skeffington, Arthur

  Foley, Maurice

  Mapp, Charles

  Steel, David (Roxburgh)

  Tinn, James

  White, Mrs. Eirene

  Winstanley, Dr. M P.

  Varley, Eric G.

  Willey, Rt. Hn. Frederick

  Winterbottom, R. E.

  Wainwright Edwin (Dearne Valley)

  Williams, Alan (Swansea, W.)

  Watkins, David (Consett)

  Williams, Alan Lee (Hornchurch)

  TELLERS FOR THE AYES:

  Watkins, Tudor (Brecon & Radnor)

  Williams, Clifford (Abertillery)

  Mr Neil McBride and

  Whitaker, Ben

  Winnick, David

  Mr Ioan L. Evans.

  NOES

  Allason, James (Hemel Hempstead)

  Harris, Reader (Heston)

  Pearson, Sir Frank (Clitheroe)

  Astor, John

  Harrison, Col. Sir Harwood (Eye)

  Percival, Ian

  Biffen, John

  Heseltine, Michael

  Pink, R. Bonner

  Biggs-Davison, John

  Holland, Philip

  Powell, Rt. Hn. J. Enoch

  Black, Sir Cyril

  Hornby, Richard

  Prior, J. M. L.

  Boyd-Carpenter, Rt. Hn. John

  Hunt, John

  Pym, Francis

  Brewis, John

  Hutchison, Michael Clark

  Ridley, Hn. Nicholas

  Brinton, Sir Tatton

  Irvine, Bryant Godman (Rye)

  Rippon, Rt. Hn. Geoffrey

  Brown, Sir Edward (Bath)

  Jones, Arthur (Northants, S.)

  Scott, Nicholas

  Bruce-Gardyne, J.

  Jopling, Michael

  Sharples, Richard

  Clegg, Walter

  King, Evelyn (Dorset, S.)

  Shaw, Michael (Sc'b'gh & Whitby)

  Cooke, Robert

  Lancaster, Col, C. G.

  Sinclair, Sir George

  Dean, Paul (Somerset, N.)

  MacArthur, Ian

  Stoddart-Scott, Col. Sir M. (Ripon)

  Deedee, Rt. Hn. W. F. (Ashford)

  Maclean, Sir Fitzroy

  Summers, Sir Spencer

  Dodds-Parker, Douglas

  Maddan, Martin

  Taylor, Frank (Moss Side)

  Drayson, G. B.

  Maginnis, John E.

  Tilney, John

  Farr, John

  Marten, Neil

  Turton, Rt. Hn. R. H.

  Fletcher-Cooke, Charles

  Maxwell-Hyslop, R. J.

  van Straubenzee, W. R.

  Fortescue, Tim

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

  Vaughan-Morgan, Rt. Hn. Sir John

  Foster, Sir John

  Mille, Peter (Torrington)

  Walker-Smith, Rt. Hn. Sir Derek

  Gibson-Watt, David

  Miscampbell, Norman

  Wall, Patrick

  Glover, Sir Douglas

  Mitchell, David (Basingstoke)

  Walters, Dennis

  Glyn, Sir Richard

  Monro, Hector

  Webster, David

  Goodhew, Victor

  More, Jasper

  Whitelaw, Rt. Hn. William

  Grant, Anthony

  Munro-Lucas-Tooth, Sir Hugh

  Wolrige-Gordon, Patrick

  Gresham Cooke, R.

  Murton, Oscar

  Worsley, Marcus

  Grieve, Percy

  Noble, Rt. Hn. Michael

  Griffiths, Eldon (Bury St. Edmunds)

  Onslow, Cranley

  TELLERS FOR THE NOES:

  Hall, John (Wycombe)

  Page, Graham (Crosby)

  Mr. R. W. Elliott and

  Mr. Bernard Weatherill.

  Bill accordingly read the Third time and passed.

  MALTA (GIFT OF A BOOKCASE)
  Mr. Simon Wingfield Digby, Mr. Maurice Edelman, Rear-Admiral Morgan Giles, Miss Joan Lestor and Mr. John Pardoe to have leave of absence to present, on behalf of this House, a bookcase containing Parliamentary and Constitutional reference books to the House of Representatives of Malta.—[Mr. Walter Harrison.]
ZAMBIA (GIFT OF A SPEAKER'S CHAIR)
Mr. Austen Albu, Sir John Hobson, Sir John Langford-Holt and Mr. Geoffrey Rhodes to have leave of absence to present, on behalf of this House, a Speaker's Chair to the National Assembly of Zambia.—[Mr. Walter Harrison.]

ADJOURNMENT
Resolved, That this House do now adjourn.—[Mr. Walter Harrison.]
Adjourned accordingly at five minutes past Two o'clock.

HOUSING
  Birmingham (Study)
  Birmingham (Study)
  Local Authority Lending
  Local Authority Lending
  Newham
  Newham
  Building Rate
  Building Rate
  Building Societies (Advances)
  Building Societies (Advances)
  Traditional Skills and Methods
  Traditional Skills and Methods
  Racial Discrimination
  Racial Discrimination
  Rationalised Traditional Houses, Northern Region
  Rationalised Traditional Houses, Northern Region
  Housing Corporation (Borrowing Powers)
  Housing Corporation (Borrowing Powers)
  Greater London Council (Policy)
  Greater London Council (Policy)
  Agricultural Land (Records)
  Agricultural Land (Records)
  Holiday Accommodation (Vacant Possession)
  Holiday Accommodation (Vacant Possession)
LOCAL GOVERNMENT
  Caravan Sites
  Caravan Sites
  Post Office Properties (Rating)
  Post Office Properties (Rating)
  Direct Labour (Report)
  Direct Labour (Report)
  Coastline (Report)
  Coastline (Report)
  Dual Flush Cisterns (Byelaws)
  Dual Flush Cisterns (Byelaws)
  Footpaths and Bridleways (Maps)
  Footpaths and Bridleways (Maps)
  Land Prices
  Land Prices
  Caravans (British Standard 3632)
  Caravans (British Standard 3632)
  Beaches (Clearance Powers)
  Beaches (Clearance Powers)
  National Anti-Litter Week
  National Anti-Litter Week
  Stansted Airport (Buildings of Architectural or Historic Interest)
  Stansted Airport (Buildings of Architectural or Historic Interest)
  Deputy Engineer and Surveyor, Easthampstead (Salary)
  Deputy Engineer and Surveyor, Easthampstead (Salary)
  Drowning Accidents (Flag Warning System)
  Drowning Accidents (Flag Warning System)
  Pinewood Hospital, Wokingham (Inquiry)
  Pinewood Hospital, Wokingham (Inquiry)
  Rate Rebate (Claims)
  Rate Rebate (Claims)
  Deferred Projects
  Deferred Projects
  Stansted Airport (South-East Regional Economic Council)
  Stansted Airport (South-East Regional Economic Council)
  Gas Industry (Radio Control Towers)
  Gas Industry (Radio Control Towers)
  Air and Water Pollution (Expert Committee)
  Air and Water Pollution (Expert Committee)
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  Maud Committee (Report)
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COMMONWEALTH AFFAIRS
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MINISTRY OF POWER
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COAL
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NATIONAL FINANCE
  P.A.Y.E. Computer Centre, Scotland
  P.A.Y.E. Computer Centre, Scotland
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  Economic Outlook
  Gold Coins
  Gold Coins
  Choice of Careers—No. 4 Librarians (Reprint)
  Choice of Careers—No. 4 Librarians (Reprint)
  Corporation Tax
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TRANSPORT
  Car Parks (Railway Stations)
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  Monorail, Manchester (Study)
  Monorail, Manchester (Study)
  Transport Facilities (Manchester Area)
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BOARD OF TRADE
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  Exports
  Exports
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  Imports
  Hire-Purchase Debt
  Hire-Purchase Debt
  Home Costs and Prices
  Home Costs and Prices
  Industrial Development Certificates (Lancashire)
  Industrial Development Certificates (Lancashire)
  Infant Milk Foods
  Infant Milk Foods
  Companies (Trading Profits)
  Companies (Trading Profits)
AVIATION
  Heathrow Airport (Automatic Landing)
  Heathrow Airport (Automatic Landing)
  Welsh Advisory Committee for Civil Aviation (Members)
  Welsh Advisory Committee for Civil Aviation (Members)
ECONOMIC AFFAIRS
  Industrial Establishments (Common Register)
  Industrial Establishments (Common Register)
  Industrial Production
  Industrial Production
MINISTRY OF LABOUR
  Hourly Wage Rate Index
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  Manufacturing Industries (Employees)
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  Unemployment
  Unemployment
  Unfilled Vacancies
  Unfilled Vacancies
  Apprenticeships
  Apprenticeships
  MIDDLE EAST
  MIDDLE EAST
  SUEZ CANAL
  SUEZ CANAL
  LIBYA
  LIBYA
  PALESTINE REFUGEES (CONTRIBUTIONS TO U.N.R.W.A.)
  PALESTINE REFUGEES (CONTRIBUTIONS TO U.N.R.W.A.)
MINISTRY OF DEFENCE
  Colonel Lohan
  Colonel Lohan
  EUROPEAN ECONOMIC COMMUNITY
  EUROPEAN ECONOMIC COMMUNITY
  NATIONAL SECURITY (VETTING)
  NATIONAL SECURITY (VETTING)
  MAUD COMMITTEE (RECOMMENDATION)
  MAUD COMMITTEE (RECOMMENDATION)
  TREASURY (PARLIAMENTARY SECRETARY)
  TREASURY (PARLIAMENTARY SECRETARY)
  TREASURER, COMPTROLLER AND VICE-CHAMBERLAIN OF HER MAJESTY'S HOUSEHOLD
  TREASURER, COMPTROLLER AND VICE-CHAMBERLAIN OF HER MAJESTY'S HOUSEHOLD
  ASSISTANT WHIPS
  ASSISTANT WHIPS
  LORDS COMMISSIONERS
  LORDS COMMISSIONERS
  PRIME MINISTER (PARIS TALKS)
  PRIME MINISTER (PARIS TALKS)
  PRESS (D NOTICES)
  PRESS (D NOTICES)
AGRICULTURE, FISHERIES AND FOOD
  Welsh Rural Development Board
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  Rural Development Boards (Powers of Compulsory Purchase)
  Rural Development Boards (Powers of Compulsory Purchase)
  Antibiotics (Joint Committee's Report)
  Antibiotics (Joint Committee's Report)
  Gifts of Cattle to Italy (Welsh Heifers)
  Gifts of Cattle to Italy (Welsh Heifers)
EDUCATION AND SCIENCE
  Minister of State (Inquiry)
  Minister of State (Inquiry)
  Library Books (Charge to Borrowers)
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  Teachers, Wales
  Teachers, Wales
  Universities (Study of World Problems)
  Universities (Study of World Problems)
  Mineral Resources, Wales (Survey)
  Mineral Resources, Wales (Survey)
HOSPITALS
  Mental Hospitals (Voluntary Social Workers)
  Mental Hospitals (Voluntary Social Workers)
  Nurses and Midwives
  Nurses and Midwives
  Complaints (Independent Commissioner)
  Complaints (Independent Commissioner)
MINISTRY OF HEALTH
  Dental Service (Regular Visits)
  Dental Service (Regular Visits)
  Dental Treatment (Emergency Cases)
  Dental Treatment (Emergency Cases)
HOME DEPARTMENT
  British Summer Time
  British Summer Time
  Children (Residential Care Staff)
  Children (Residential Care Staff)
OVERSEAS DEVELOPMENT
  Middle East (Irrigation and Afforestation)
  Middle East (Irrigation and Afforestation)
POST OFFICE
  Special Stamps
  Special Stamps
  Premium Bonds (Northern Ireland)
  Premium Bonds (Northern Ireland)
WIRELESS AND TELEVISION
  B.B.C. Television (Reception)
  B.B.C. Television (Reception)
SCOTLAND
  Croft Access Roads (Grant)
  Croft Access Roads (Grant)
  Farm Improvement Scheme (Minimum Lease)
  Farm Improvement Scheme (Minimum Lease)
  Road Programme (Development Areas)
  Road Programme (Development Areas)
  Tayside Study (Consultants)
  Tayside Study (Consultants)
SOCIAL SECURITY
  War Disablement Pension No. O/M6/9126
  War Disablement Pension No. O/M6/9126
  Family Allowances (Cost of Living)
  Family Allowances (Cost of Living)
TECHNOLOGY
  Metal Fatigue and Stress (Research)
  Metal Fatigue and Stress (Research)
WALES
  Regional Employment Premium
  Regional Employment Premium
  Industrial Trading Estates (Rural Areas)
  Industrial Trading Estates (Rural Areas)

Preamble
The House met at half past two of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Worcester):
The LORD CHANCELLOR on the Woolsack.
The Earl of Cork and Orrery—Sat first in Parliament after the death of his kinsman.

MENTAL HOSPITALS: TREATMENT OF ELDERLY PATIENTS
2.30 p.m.
LORD AMULREE: 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, in the light of the article in the Sunday Times of June 4 dealing with the treatment of elderly patients in some mental hospitals, steps are being taken to improve the situation where necessary.]
THE PARLIAMENTARY UNDER-SECRETARY OF STATE FOR COMMONWEALTH AFFAIRS (LORD BESWICK): My Lords, the Government are aware of the allegations reported in the Sunday Times of ill-treatment of the elderly in hospital. None is supported by particulars of a kind that would make it possible to pursue inquiries; individuals are not identified and there is no indication where the alleged incidents took place. Such allegations cast unfair suspicion on large numbers of hospital staff who are doing difficult work with skill and devotion, and they must cause distress to patients' relatives. The professional and other bodies concerned and the Ministry of Health set high standards of care and are always seeking to improve them. If undesirable practices are occurring the Government wish to have evidence in a form that will enable investigations to be made, so that such practices may be stopped.
LORD AMULREE: My Lords, I should like to thank the noble Lord for his reply and to put one supplementary question to him: namely, supposing it were possible to amalgamate the roll and the register of the general nurse with the mental case nurse, does he not think that these two bodies could rotate a little and in that way take away some of the strain from the mental nurses in the work that they have to do?
LORD BESWICK: Yes, my Lords. The proposal that the noble Lord puts forward is, as is the case with every contribution that he makes in these matters, a constructive one, and I will certainly see that it is considered. However, as he possibly knows, one of the difficulties is that registered nurses in psychiatric and non-psychiatric hospitals possess different qualifications which are not interchangeable. As a matter of fact, a proposal has been made in an opposite sense to that made by the noble Lord; namely, that registers should be split for psychiatric and non-psychiatric enrolled nurses. Nevertheless, I will undertake to see that what he has suggested is considered.
VISCOUNT DILHORNE: My Lords, have the Government invited or asked the Sunday Times to provide information which will enable the Government to investigate these allegations, if there is any evidence at all anywhere in support of them? If that has not been done, may I ask that the Government should ask the Sunday Times to furnish particulars to support the allegations that they have made?
LORD BESWICK: My Lords, there has in fact been a long history of correspondence between the Minister and a Mrs. Barbara Robb, who is the authoress of a book which is about to be published, and on which I understand the article is based. She has given certain information which has been examined, and it was found that the allegations then made were unfounded. I will certainly see whether anything more can be done to get her either to substantiate or to withdraw what she has said.
LORD ILFORD: My Lords, may I ask the noble Lord whether the Government have invited the newspaper to supply the information upon which this article was based?
LORD BESWICK: My Lords, I will certainly see that what the noble Lord suggests is considered.
BARONESS WOOTTON OF ABINGER: My Lords, cannot the Government give a definite instruction that when elderly people are admitted to these hospitals they shall not be deprived of their dentures and spectacles?
LORD BESWICK: My Lords, guidance to hospital authorities on the care of mental patients has been issued, and that practice has been ruled out except on medical advice. I have absolutely no reason to think that that particular charge is justified at all.
BARONESS HORSBRUGH: My Lords, can the noble Lord say whether the Ministry has inquired of hospitals throughout the country where there are a great many elderly people, whether they have received a great many complaints, although I know these elderly people and their friends are often frightened to complain?
LORD BESWICK: My Lords, I do not think it is for the Ministry to inquire into individual cases. But last year a memorandum was issued by my right honourable friend the Minister of Health, containing comprehensive guidance in relation to the procedure for inquiries into complaints made on behalf of or by patients.

"KEEP BRITAIN TIDY" WEEK
THE EARL OF IDDESLEIGH: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what action they are taking to support the organisers of the national "Keep Britain Tidy" week.]
LORD SORENSEN: My Lords, the purpose of this Week and of the organisers behind the scenes is certainly most commendable, and I am sure that the noble Earl will be gratified to know that considerable progress has been made. In many parts of the country there is evidence that the campaign has been succeeding; and, of course, the schools have done a great deal in this direction, with
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some success, judging from the admonition that I received from my six-year old granddaughter the other day for tossing a matchstick out of my car window. This indicates the fact that children certainly are absorbing the great necessity for this tidiness.
The organisers themselves have an annual grant from the Exchequer and are helped annually by the production of posters and other material, available without charge to local authorities and other organisations. Many of these offers have been taken up and posters have been displayed. My right honourable friend is speaking at the opening conference for the Week which has the Government's best wishes for success. May I add that it is certainly to the credit of noble Lords that, on the whole, we in this House keep our own House quite tidy compared with—I will not say another place, but elsewhere.
THE EARL OF IDDESLEIGH: My Lords, I thank the noble Lord for that reply. I greatly hope that during this Week in particular, which is the first national Week ever held with this object, intensified instruction will be given in schools in this sense.

KENYA: LAND PURCHASE SCHEME AND PROPERTY SALES
2.38 p.m.
LORD WEDGWOOD: 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 whether they will say how many British farmers have refused offers under the present Land Purchase scheme in Kenya; and whether those offers refused are due to disputed valuations; and, if so, whether any of these cases have been investigated by the British High Commission.]
LORD BESWICK: My Lords, I understand that of 31 offers of purchase made by the Kenya Agricultural Development Corporation 20 have been accepted, seven refused and four withdrawn. All offers were made on the basis of willing buyer/willing seller. Some of the refusals are believed to have been due to disagreement over valuation, but there

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may have been other factors involved. The High Commission were informed of the valuations and of the offers made, but since the offers were in accordance with the agreement reached between the Kenya and British Governments, the High Commission have had no cause to intervene other than to seek clarification of various issues raised by individual farmers.
LORD WEDGWOOD: My Lords, while thanking the noble Lord for his comprehensive Answer, I should like to ask whether he is aware that under the present scheme offers to purchase are based on a valuation figure for the farm concerned which is not made available to the seller? Would he not agree that as these offers, which are made on a lock, stock and barrel basis, show no breakdown of fixed and loose assets, the farmer is at a great disadvantage in any subsequent negotiations? Further, does he realise that these somewhat arbitrary methods of purchase, from which there is no appeal, are creating much bitterness in the British farming community in Kenya whose farms are now required to be taken over by the Kenya Government over the next three years?
LORD BESWICK: Offers under this programme are based on current market values as determined by professionally qualified valuers of the Kenya Lands Department, and are in accordance with the agreement reached between Her Majesty's Government and the Kenya Government. Moreover, as the noble Lord will know, the valuation itself is now made known to the High Commission, and if it is thought it is an unreasonable valuation and not in accordance with current values there is then a possibility for the High Commission to intervene.
THE MARQUESS OF SALISBURY: My Lords, do Her Majesty's Government realise that many of these farmers were pressed strongly, as a public duty, to go to Kenya; and do they realise, further, that in many cases these men put their all into the farms, and years of work as well? Lastly, do the Government realise, as the noble Lord, Lord Wedgwood, has already said, that the present basis of valuation is very different from what it was before the grant of independence for Kenya? In those circumstances may I
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ask the noble Lord whether there will be any chance of Her Majesty's Government themselves doing something to bridge the gap between the former values of these farms and the valuation now put upon them?
LORD BESWICK: My Lords, the fact of the matter is that Her Majesty's Government have made available £30 million of British taxpayers' money to enable purchase of these farms on a willing buyer/willing seller basis. The procedure for valuation has been agreed between the British and the Kenya Governments, and I do not believe any further action is either called for or justified.
LORD WEDGWOOD: My Lords, would the noble Lord not agree that his statement about willing seller/willing buyer is not strictly applicable to this purchase scheme? May I draw his attention to the fact that these farms are required for purchase by the Kenya Government for their own purposes, and although it is strictly legal that the seller does not have to sell, is the noble Lord aware that there are no other purchasers in the market except the Agricultural Development Corporation? Would the noble Lord not agree that there is some room for improvement in the method of purchase under this scheme, so that a demonstratively more fair procedure could be arrived at?
LORD BESWICK: My Lords, it is a fact that these sales are effected on a willing buyer/willing seller basis. If the present owner does not wish to sell, then there is no compulsion at all upon him to sell. I do not believe it is correct to say that this scheme was agreed first and foremost for the benefit of the Kenya Government; it was agreed as a means of enabling those who wished to leave Kenya to do so without sacrificing any of their capital. Moreover, it is a fact that there are facilities for private sale, and Her Majesty's Government have made available very substantial sums of money to the Land Bank to enable private buyers to purchase farms if such a sale can be effected.
LORD PARGITER: My Lords, would the noble Lord not agree, having looked at what has happened in many parts of that continent, that the arrangements in Kenya would appear to be excellent?
LORD WEDGWOOD: 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 how many cases are outstanding of British subjects in Kenya who wish to sell their property for compassionate reasons, and are either unable to do so or have not yet received payment in full.]
LORD BESWICK: My Lords, there are no cases outstanding. All those who have recently accepted offers of purchase for their farms under this scheme, with one exception, have now been paid in full.
LORD WEDGWOOD: My Lords, I thank the noble Lord for his brief and reassuring reply. I wonder whether the noble Lord could further reassure us that in any future arrangements for dealing with compassionate cases, these people will have all the help and attention that the British High Commission in Nairobi can give them?
LORD BESWICK: My Lords, I gladly give that assurance. I might add that the possibility of continuing this scheme is being considered, and I hope that a statement will be made in the near future.

BRITISH RAILWAYS (NO. 2) BILL
Read 2a, and committed to the Committee on Unopposed Bills.
MANCHESTER CORPORATION BILL
Read 2a, and committed to a Select Committee.

DANGEROUS DRUGS BILL
2.47 p.m.
Order of the Day for the Second Reading read.
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE, HOME OFFICE (LORD STONHAM): My Lords, I beg to move that this Bill be now read a second time. It is a year since the noble Viscount, Lord Amory, initiated a valuable general debate about
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drugs. That debate underlined our awareness that the problem was growing and your Lordships expressed concern that the situation should not get out of hand. In my remarks at the end of the debate I said:
"… the length of my speech will, I hope, be taken as an earnest of the great seriousness with which the Government view this situation or, perhaps, I should say the prospective situation."—[OFFICIAL REPORT, 30/6/66, col. 837.]
Since then the situation has indeed become more serious. A few figures will make my point. In 1965 convictions for offences against the Dangerous Drugs Act totalled 767, including 626 for cannabis. Last year the total was 1,174 including 978 for cannabis offences, an increase of more than 50 per cent. in a single year. Under the Drugs (Prevention of Misuse) Act 1964 there were 958 convictions in the 14 months ending December, 1965, and 1,261 in 1966, including 676 in the last half of that year. The police, with an augmented force of specialist officers, have been still more active this year. Convictions still show an increasing trend and a sentence of ten years imprisonment was recently imposed for drug peddling.
I have no need to scare the House about the drug problem. The time to sound the alarm is past. To my mind one of the striking features of the past twelve months has been the speed with which Press and public comment has moved from dismay that drug-taking occurs in the United Kingdom, to constructive interest in why young people get involved in drug abuse and what can be done to stop it. An example of both the increase in the danger and willingness to take active steps to meet it, was the issue last month by the Chief Education Officer to the Greater London Council of a circular to the heads of 300 London schools giving advice and urging them to make sure their staffs can recognise that a boy or girl is taking drugs, and to report it.
To some people publicity about the drug problem has caused misgiving, but I believe that in the past year responsible journalists and other commentators have greatly helped in improving public awareness of the intricate difficulty of this social problem. The effects of different drugs, the dangers of "escalation", the problems of treatment—these and other matters naturally prompt questions. There are calls for "authoritative guidance".

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Most people, however, now understand that this guidance is very difficult to provide because—and here I quote the Brain Committee Report:
"the phenomena of habituation, dependence and addiction involve a complex variety of social, medical and psychological factors".
Because of the publicity I have mentioned certain points are now taken for granted. It is understood, for example, that drug-taking cannot be prevented or addiction cured simply by legislation; that drug peddling and abuse cannot be controlled by police action alone; and that addiction or drug dependence threatens not the majority of sensible healthy young people but a susceptible minority difficult to identify and hard to protect—a minority which is subject to mental, physical and moral deterioration; to unquenchable craving and increasing misery.
I have begun with these general reflections because today we are concerned mainly with one part of the problem. As I deal with this part, I want your Lordships to understand that I am fully aware of the other parts and of the links between them all. I know of the increasing menace of the amphetamines, of cannabis and of LSD which can induce madness. I know that addiction to hard drugs often has its roots in general drug abuse, abuse which sometimes starts by youngsters copying the unhappy example of a few of their "pop" idols. The Government are concerned about the whole drug problem. They are striving to approach it with balance and discrimination. They believe that this Bill, short as it is, will nevertheless help considerably in containing the general problem and bringing compassionate but real help to those who need it.
The Bill is concerned with addiction to "hard" drugs and particularly with heroin and cocaine addiction. I need hardly remind the House how this problem has been growing. In 1960 the number of known addicts to "hard" drugs was 454; four years later it was 753. In 1965 it had risen to 927 and last year to 1,349. Thus in six years the number of known drug addicts has trebled. In 1960 the number of heroin addicts was 68; in 1964 the number had risen to 342, in 1965 to 521 but in 1966 it was 899. That means that in the last six years known heroin addicts have increased
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thirteenfold. Last year more than 90 per cent. of the known addicts, whose addiction was not therapeutic in origin, were addicted to heroin. And there were some 300 heroin addicts under the age of 20 in 1966, as against only one in 1960—one person, not 100; in other words, a three-hundred-fold increase.
These are the figures for known addicts identified by inquiries into the supplies of drugs recorded by doctors and pharmacists. How many more have not yet come to notice? I can offer the House little guidance. Some observers, relying upon what they assert to be the economic basis for the new addict's life, argue that each must find or make two or three other addicts who will pay for part of his legitimate supply. On the other hand, addicts arc free at any time to seek treatment, including, if the doctor thinks fit, a prescription for the drug of addiction. In 1960 the Brain Committee felt that, by and large, most addicts came to notice quickly. Although we do not know for how long—or indeed why—individual addicts delay before seeking treatment from a doctor or a hospital, the numerical trends are obvious and alarming. They led an American Research Institute early this year to estimate that there could be 11,000 or more heroin addicts in this country by 1972.
Why has this wave of heroin addiction occurred? I do not think anyone can say with authority. Our problem in this country is quite novel. The new addicts have come from all classes of society. There is no close parallel with American experience. The reasons for other trends of drug abuse in the past are equally obscure. I will not take up the time of the House to-day with speculation. This is a field where we need to make full and continuing inquiry.
If we do not know the reasons for the increase in addiction, at least we know the source. The Interdepartmental Committee, in its Second Report, was satisfied that the increase had been fed from a surplus of drugs prescribed for addicted patients by a handful of doctors. The Committee gave examples of over-prescribing, which I need not repeat to-day. I must, however, tell the House that there is still no evidence of significant supply to addicts, other than through doctors' prescriptions—which are at present legitimate—and perhaps thefts.

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As the House will know, the addiction problem was carefully studied in 1959 and in 1964 by the Interdepartmental Committee on Drug Addiction under the chairmanship of the late Lord Brain. I should like to pay particular tribute on behalf of the Government to the very great assistance which Lord Brain gave, both in his leadership of this Interdepartmental Committee and in the discussion of many other important problems. It was his Committee which recommended that a Standing Advisory Committee should survey and advise upon the whole field of misuse of drugs and we had hoped that he would have been able to launch it. His death has been a sad loss to us all.
The Brain Committee's 1961 Report, written when problems of control were not challenging, was largely concerned with questions of procedure and treatment. Its second Report, published late in 1965, examined the new wave of known addiction and recommended appropriate counter-measures for what it likened to an epidemic. The three main measures were: compulsory notification of addicts, the setting-up of panels to advise doctors whether a patient is an addict or not, and the provision of special treatment centres. After very full consideration the three proposals have been fully accepted by the medical profession and the Government.
There are very difficult dilemmas here and it is important that I should make clear the implications of the Bill. Where addiction is pervasive rather than passive there are three choices for counteraction. One is to treat the addict as a criminal and try by police action to eradicate all drug abuse and peddling. That has been the American approach to heroin addiction and it has shown no signs of final success. We reject it. The second approach is to regard the addict as a dangerous patient and detain him for compulsory treatment. This has been tried in one or two countries, and very recently the State of New York has passed legislation providing for the compulsory institutional treatment of addicts for periods up to three years. The price to be paid for any compulsory and restrictive régime is, of course, much the same: a massive black market and dire complication of the general problem of crime. We reject that also.
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The third approach is to regard the addict as a sick person and to try to win his co-operation on voluntary treatment. That has been the United Kingdom policy for many years: doctors being free under the law to supply dangerous drugs to addicts whilst making every effort to cure their addiction. I am sure that no one would want us to abandon this basic principle and, by a repressive policy, encourage criminal elements to establish and exploit a thorough-going illicit traffic. On the other hand, it is plain—and the Government recognise this—that the present British system has defects and weaknesses. We have a rapidly growing number of addicts to heroin and cocaine. Many of them are young, unstable and eager to enlarge the unhappy army of addiction. They represent a formidable challenge to the general practitioner. We have seen more than once that the problem is accentuated when an individual doctor feels unable to continue to help a large group of addicts. All of us have read in the Press of cases of this kind: of how, for example, some addicts are lost to view; how others approach inexperienced doctors (I mean inexperienced in the question of drug addiction) with urgent pleas for help.
In these circumstances, it is natural to ask whether the principles of treating addicts need to be changed. The present principles are broadly based on advice given by the Rolleston Committee in 1926. These principles presuppose, first of all, that the general practitioner will make every effort to cure the addiction. If those efforts fail, however, the doctor may continue to prescribe dangerous drugs—in the words of the Rolleston Committee:
"where complete withdrawal produces serious symptoms which cannot be treated under the ordinary conditions of general practice, or where the patient, while capable of leading a useful and fairly normal life so long as he takes certain non-progressive quantities, usually small, of the drug of addiction, ceases to be able to do so when the regulated allowance is withdrawn".
Obviously, my Lords, if these principles were abandoned, or even thought by addicts to be abandoned, many would look to an illicit source for their drugs, and that is a development we must strive to avoid. Your Lordships will recognise that the doctor's dilemma—arising at every stage in his handling of the patient—is profound: whether to

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encourage withdrawal at the risk of driving the addict to the pedlar, the "pusher", or whether to give the addict just enough of his drug not to prejudice the hope of progress to a cure. It is this concept of "just enough" that is so difficult to evaluate. In their Report in 1961 the Brain Committee gave general support to the present principles. The Government believe that they continue to command general acceptance by the medical profession. Accordingly—and I should like to stress this—the Bill is based on the assumption that certain doctors will continue, subject to their professional judgment, to apply the Rolleston principles and give maintenance dosage.
It is to preserve these principles and create conditions in which their adoption can be more beneficial to addicts and to society that the Government propose to change the organisation of treatment on the lines recommended by the Brain Committee. I will leave it to my noble friend Lady Phillips to describe in more detail, when she comes to wind up the debate, our plans for a system of special treatment centres for addicts to heroin and cocaine. The case for confining the treatment of such addicts to special centres is, in the Government's view, fully made out on two considerations. Prescribing can be more effectively controlled by a comparatively small number of selected doctors in these centres than is possible under conditions of general practice; and, more positively, treatment centres closely linked to the resources of hospitals should be able to offer more comprehensive treatment. Noble Lords will recall that the Brain Committee, in both their Reports, expressed the view that satisfactory treatment of addiction is possible only in suitable institutions. The Government believe that addicts are likely to be more encouraged to seek institutional care if efficient out-patient facilities are available.
It will be obvious that to transfer addicts away from general practitioners to a limited number of treatment centres involves a difficult transition. The problem is complicated because we do not know how many addicts will be prepared to seek treatment from a centre. Nor do we know how many unknown addicts—that is, unknown at present—will in due
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course want to do so. Nevertheless, the Government are convinced that general practice is no longer the right or adequate means for dealing with the new type of young addict—and in saying that I fully appreciate the dedicated help that has been given in the past by a number of doctors to many difficult addict patients. The addict's first and most compelling purpose is to get his "fix", and it is reasonable to assume that he will go to a treatment centre where he can get it—but without a surplus which he could sell to others. It is equally reasonable to suppose that many who attend the centres can be persuaded to attempt a cure.
We must therefore make the best estimates we can of the provision to be made. We must try to provide facilities which will ensure a close and sympathetic relationship between the individual addict and skilled centre staff. We have got to build up the confidence, both of addicts and of treatment centre staff, in the merit of our proposed new arrangements. Above all, we have to phase the arrangements so that in the individual case there is no gap between the support now being given by a general practitioner and the help which can be obtained from a treatment centre. All these considerations are being kept in mind in the course of Government planning.
I turn now to the Bill itself. It is an enabling measure, with necessary provision for enforcement, concerned solely with drugs scheduled under the Dangerous Drugs Act 1965. It extends to Scotland and Northern Ireland. Clause 1 extends the powers to make regulations conferred on the Home Secretary by Section 11 of the 1965 Act. Under the extended powers he will be able to make regulations to require the notification of addicts by medical practitioners and to prohibit medical practitioners, except under licence, from providing addicts with specified drugs. As I have indicated, the initention, initially, is to specify heroin and cocaine; but other drugs will be specified if it becomes necessary. The medical profession will be fully consulted in the preparation of these regulations.
As regards notification, the regulations will have to define addiction, lay down the circumstances in which notification will be required, specify the central authority (this will be the Chief Medical Officer of the Home Department) and prescribe the procedure for notification. Our aim,

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however, will be to keep the administrative burden on doctors to a minimum. I would emphasise that notification will have no legal consequences of any kind for the addict. It will merely indicate to the central authority that a particular doctor has attended upon a patient whom he considers or suspects to be addicted. It will not give that patient any continuing status as an addict as if he had been registered. As the House will know, the Brain Committee were firmly opposed to any system of registration. The central records of notification will simply enable the inquiring doctor to be put in touch with any doctor who previously notified that patient. Information provided by doctors under the regulations will be subject to the safeguards of the Official Secrets Acts. It is not contemplated that there will be disclosure of notification except to doctors with a professional interest in the individual case, and to the police.
The police have a special interest which I would explain. At present the Home Office obtains its information about prescriptions to dangerous drugs from routine police examination of records kept by pharmacists. The Brain Committee envisaged that this routine scrutiny would be continued to provide a means of ascertaining addicts who had not been notified. The police need to be informed therefore, as at present, when a case of addiction is made known and confirmed to the Home Office, so that the relevant prescriptions can be taken into account in the routine police scrutiny of the Pharmacists Registers.
As to licensing, the intention is that in selected National Health Service hospitals the doctors who receive licences will be consultant psychiatrists, in charge of the treatment of persons addicted to heroin and cocaine, and certain other medical staff under their supervision. The question of criteria to be applied for licensing doctors in approved centres, outside the National Health Service is under consideration. In the exercise of his licensing power my right honourable friend, the Home Secretary, will be advised by the Chief Medical Officer of his Department. He will, of course, take into account the requirements and plans of hospital authorities and any advice thereon which my right honourable friends, the Minister of Health and the
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Secretary of State for Scotland, may wish to offer.
As to prescribing for ordinary medical purposes, the Bill makes no provision for change. Regulations will allow doctors to continue, without restriction, to prescribe any dangerous drug in the course of medical treatment, provided it is not related to addicts. I remember the noble Lord, Lord Saltoun, sometime ago asking me whether our proposals might preclude the possibility of his continuing his prescription for laryngitis. I am glad to assure him that our proposals will not interfere with him in any way. The regulations will not prevent a doctor from prescribing heroin or cocaine to an addict where that drug is needed for a medical purpose, other than treatment for addiction.
The larger part of the Bill is concerned with enforcement. The Brain Committee felt that since notification of addicts and prescribing for addicts closely involve the exercise of professional judgment it would he inappropriate for a court of law to deal with breaches of the new obligations on doctors. They suggested that a more appropriate tribunal would be the Disciplinary Committee of the General Medical Council, but they did not take evidence from the General Medical Council on this proposition. Behind this, no doubt, was the thought that the medical profession should, if possible, discipline itself, especially where the issue turned on matters involving an assessment of a doctor's professional judgment. When the matter was discussed with the Council, the latter explained that the Committee's proposal did not fit in with the Council's established functions. It is not the Council's responsibility to deal with contravention of statutory obligations or offences; or to intervene in matters of professional judgment on medical treatment.
The conduct of a doctor, acting sincerely, who gives a generous supply to an addict would not necessarily be infamous conduct in a professional sense of the kind with which the Council deals, even though it might help to complicate and magnify the general addiction problem. Accordingly, the Government accepted that neither the Council nor its Disciplinary Committee were ready-made bodies for tackling the enforcement of regulations under the Bill. In devising

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alternative machinery the Government have tried to give effect to the wish of the profession for a suitably qualified tribunal and for the opportunity of representations against a tribunal's recommendation. The relevant provisions may appear somewhat involved, but the Government believe that by elaborating the substantive provisions in Clauses 2 and 3 and in the Schedule they are properly protecting the interests of the individual doctor, and of any other persons who may be involved in an inquiry into his professional conduct. The medical bodies have fully accepted the proposals in the Bill. The Council on Tribunals has also been fully consulted and has expressed agreement with what is proposed about the tribunal.
In this context I ought to say a word about Clause 4. This enables regulations under the 1965 Act to provide that contravention of particular regulations shall not constitute a criminal offence under Section 13 of the Act. It will also allow the Secretary of State to apply the safeguards of the tribunal and advisory body procedure in cases in which a court has found a doctor guilty of an offence under the Act and consideration is being given to withdrawing the doctor's authority. In this way it will be possible to deal with all withdrawals by a common procedure.
There are some other points I should mention. First, the Bill does not provide for implementing the Brain Committee recommendation for detaining addicts during treatment. The Committee did not favour compulsory detention as a principle. It had no belief in the success of this approach. It felt, however, that when a patient entered hospital voluntarily for treatment it might in certain circumstances he useful if the staff could detain him for a very limited period during a crisis in his recovery. The proposal was discussed later with Lord Brain who came to the view that initially it should not be proceeded with. As your Lordships will appreciate, any element of compulsion would materially affect the transition from one régime to another. The Government are convinced that the wisest course is to exclude compulsory detention at this stage.
Again, the Bill does not deal with the problem of dependence on "soft" drugs. The Government are, of course, very much
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concerned about this question, but although facilities for treatment are available there is no consensus that the same controls are necessary for amphetamines and barbiturates. Indeed knowledge about dependence on these drugs is very limited. We need to assess this area of the general problem by much further study and inquiry before considering statutory provision for notification or other measures. The Government propose, however, to make certain important aditions to the Bill at the Committee stage, and I shall be tabling Amendments in due course. This will be of particular interest to the noble Lord, Lord Derwent, whose continuing interest in this problem and whose knowledge and pursuit of it are greatly appreciated by Her Majesty's Government.
The first of these Amendments relates to the safe keeping of drugs, the second to the powers of search. My right honourable friend the Home Secretary has for some time felt concern about the inadequacy of present arrangements for the safe keeping of drugs in the premises of manufacturers, wholesalers and pharmacists. When addiction is increasing and abuse of "soft" drugs appears to be widespread, the need for effective security becomes vitally important. My right honourable friend has recently consulted the representative bodies of the pharmaceutical industry and pharmacists, with a view to strengthening his powers of requiring safe keeping, record keeping and packaging of "hard" and "soft" drugs. I am glad to tell the House that the representative bodies have fully endorsed the principle of my right honourable friend's proposals for wider enabling powers. As with the regulations on notification and prescribing, the effect will be to allow my right honourable friend the opportunity to impose or modify controls as the situation develops. It will be understood that the requirements which it may be appropriate to introduce will be the subject of detailed discussion with the interests affected.
As to police powers of search, Section 14 of the Dangerous Drugs Act 1965, and Section 3 of the Drugs (Prevention of Misuse) Act 1964 (the creation of the noble Lord, Lord Brooke of Cumnor, and the favourite of his assistant, the noble Lord, Lord Derwent) required that the names of the individual police officers

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should be endorsed upon the search warrant. This has been found to cause difficulty when police action is required at short notice. The requirement originated many years ago. It is an anachronism and serves no useful purpose to-day in the changed conditions, and the Government therefore propose that it should be repealed.
Apart from this, the police have been hampered in detecting offences of unauthorised possession by the present limits on their power to search on suspicion. It is noteworthy that a very high proportion of the convictions obtained under the 1964 Act have been made in the Metropolitan Police area where police powers arc more extensive. The Government therefore propose to sek your Lordships' approval of an Amendment which will give the police power to stop and search without warrant any person suspected of being in unlawful possession of a drug controlled under the Acts of 1964 and 1965. My Lords, we mean to stop the "pushers" and the pedlars of drugs by all means in our power, and we look confidently for the support of your Lordships in the measures that we shall introduce.
My Lords, I have spoken at some length because, although this Bill is short and its substance mainly concerned with the conduct of doctors, it foreshadows great changes in the organisation and treatment for addicts. No doubt much of our discussion on the Bill will be about differences of view on the planning of that treatment and related matters. The Bill, I would remind your Lordships, was passed by another place without amendment. The Government believe its provisions are sound and they have the full support of the interested bodies. For this reason, I hope that your Lordships will welcome the Bill and give it a unanimous Second Reading. My Lords, I beg to move.
Moved. That the Bill be now read 2a.—(Lord Stonham.)
3.23 p.m.
LORD SANDFORD: My Lords, at last we have something. We welcome this Bill now it is here, so far as it goes, but it is nearly two years since the Brain Committee on Drug Addiction rendered its Second Report, and it has taken Her Majesty's Government 18
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months to set up the Standing Advisory Committee on Drug Dependence which, as the noble Lord, Lord Stonham, has pointed out, is so obviously needed to give continuous attention and authoritative advice on the whole rapidly changing and extremely anxious problem. And it has taken Her Majesty's Government 20 months to bring forward this very modest piece of legislation, most of which was spelt out for them by the Committee in its Report.
Not only has there been this really regrettable delay; there has, I submit, been a failure by Her Majesty's Government to grasp the nature, and particularly the urgency, of this problem. I do not want to exaggerate the size of the problem—the noble Lord has spelt that out admirably, and it is sombre enough reading on its own—but I do want to stress the extreme urgency (the figures given by the noble Lord speak for themselves) and the need to get to grips with this problem quickly, before it gets out of hand. One measure of Her Majesty's Government's failure to grasp the problem is the fact that it was left to the Lord Chief Justice to brine forward the Private Places of Entertainments Bill in January of this year, a vital weapon in the fight against this menace. At any rate, my Lords, here at last is the Bill, and I now turn to it.
The noble Lord, Lord Stonham, called it an enabling Bill, and it is indeed an enabling Bill, with a vengeance. We have the noble Lord's description of what is to happen under it, and we can accept that. We are glad to know that this is how it is to work. But little of that is in the Bill. Everything of substance is still to come under regulations which are not yet before us. Here we have a Bill dealing with addicts, yet to be defined, covering—and I quote from Clause 1(1)(a)—"drugs of any description" but yet to be specified, which no doctors, except those yet to be licensed by the Home Office, will be allowed to prescribe to addicts. We understand that licences will be granted only to doctors on the staffs of treatment centres yet to be provided.
Clause 2 indicates that all this is going to involve tribunals and advisory panels which have yet to be set up; so there is quite a long way to go yet. Incidentally, there are going to be more people on each set of tribunals and advisory

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panels than there were doctors (only six) who were the original cause of this particular mischief of over-prescribing heroin. I wonder, do the doctors know what is happening to them? Presumably they do. It is not for me, a member of another profession, to offer any advice to the doctors about how they should run theirs. But, my Lords, the clergy of the Church of England have long experience of nationalisation—we were nationalised by Henry VIII—and I think that the right reverend Prelate the Bishop of Worcester would agree that if we had been put in the position in which the medical profession was put by the Brain Committee Report, we should certainly have followed the advice of the noble Lord, Lord Brain, and tried very hard to keep the disciplinary procedures required under this Bill under the control of the profession itself—in this case, under the control of the General Medical Council.
LORD STONHAM: My Lords, is the noble Lord suggesting, first, that we did not try very hard, and secondly, that the B.M.A. were willing to accept this responsibility? I hope I made it clear that they were not.
LORD SANDFORD: My Lords, I was just coming to that. I believe that the doctors themselves will come to regret their decision to do otherwise than the Brain Committee recommended, and I think it is our duty in this House to-day to make quite clear (I shall be interested to hear what the noble Lord, Lord Amulree, and the noble Lord, Lord Segal, have to say about this) that it is not the decision of Parliament or of Her Majesty's Government, and it is certainly not the wish of the Opposition, but the decision of the medical profession which will bring down upon them all this paraphernalia of tribunals referred to in Clauses 2 and 3 and in the Schedule. It is not the Government who brought this about, and I am sure that noble Lords on these Benches would have sought to do as the Brain Committee recommended. However, be that as it may.
I now turn to the hospitals and what they have to say and do under this Bill. They are not mentioned in the Bill, but, as the noble Lord, Lord Stonham, made quite clear and explained, the whole object
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of the Bill is to shift the treatment of addicts into the centres to be established, primarily in the London and Metropolitan hospitals. But nothing can happen under this Bill, as the noble Lord's friend the Minister of Health made quite clear in another place, until these centres are provided, staffed, equipped and ready to function. No extra money is to be provided for this purpose. Very few doctors working in hospitals have much experience of treating addiction, and I do not believe (though noble Lords who are doctors and who hope to follow me in this debate will correct me if I am wrong) that the treatment of addiction figures to a great extent in the training of doctors. It is therefore, I submit, highly relevant for us to know how the hospitals are getting on with this task.
The Minister of Health set out what he wanted of the hospitals in his Memorandum H.M. 6716 of March 7, and asked for a report from them within a month—that is to say, by April 7—of what they had done and were planning to do in order to implement their part of this programme. So by now he must know, the noble Baroness must know, and I think that we should know, too, exactly how they are getting on. The noble Lord, has so far told us nothing. I hope that the noble Baroness, when she winds up the debate, will tell us a great deal. If she does not, I fear that our suspicions will be greatly increased.
My information, admittedly incomplete and unverified—and, I hope, incorrect—is that the hospitals are far from satisfied about the arrangements for these centres. They have not been given any extra money to bring them into practice. They are far from clear about how the centres are to operate, and they are far from being ready to take the steps without which the provisions of this Bill cannot possibly be brought into operation. As I say, the noble Baroness must have available the replies from the hospitals to this Memorandum of March 7, and the House should be given an accurate summary of them before giving its final approval to this Bill. I hope therefore that she can do that for us.
It is not quite accurate to say that the Bill implements the whole of the Brain Report—and I do not think that the noble Lord, Lord Stonham, said so. It implements part of it. In particular, it

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does not implement recommendation No. 7, as the noble Lord mentioned, in which power for detaining addicts in centres was recommended. I agree entirely with him that we should be unwise to copy the approach of the United States of America to this problem. Unfortunately for them, they have a far more extensive experience than we have in this matter. To treat the addict as a criminal would be disastrous, but I am not yet convinced that the modest measure of compulsion which the Brain Committee asked for would not be helpful in a number of cases. I know that it is the experience of the Convent of Spelthorne St. Mary, which has dealt with drug addicts on a voluntary basis for some number of years, that a court order applied to a voluntary patient is extremely helpful in keeping him at the centre until his cure has been successfully completed. Perhaps the noble Baroness can deal with this matter further. That is all I have to say on the Bill itself.
I should like now to follow the noble Lord, Lord Stonham, and for just a few moments turn to the problem of drug addiction as a whole. It could he said—and I know that my noble friend Lord Brooke of Cumnor, who was Home Secretary at the time, would readily admit—that the terms of reference given to the Brain Committee when it was reconvened were somewhat narrowly drawn. But this had the great advantage of enabling the Committee to deal with the comparatively narrow matter of the over-subscribing of drugs for heroin addicts and to report quickly. That is an advantage which, I submit, by their dilatoriness Her Majesty's Government have now largely thrown away. That decision to ask for a report on a narrow front now means that we find an urgent need for much fuller information and authoritative guidance covering the whole of this disturbing and rapidly changing programme. For example, the illicit sources of supply of heroin are now thought to be quite different from those discovered by Lord Brain's Committee. As well as the over-prescription of herion, we now face, as the noble Lord mentioned, the smuggling of drugs out of factories, raids on pharmacies and the forging of prescriptions. These are now outstripping the over-prescribing of drugs by a handful of doctors.
LORD STONHAM: My Lords, I made it quite clear that we have no evidence of any substantial supplies of heroin and cocaine other than those arising from prescriptions. The references which the noble Lord is now making to my speech are references to the other field of amphetamines and so on. He should make this clear distinction.
LORD SANDFORD: My Lords, I am most grateful to the noble Lord. I thought I had made it clear that I am now dealing with the whole problem, and that these remarks cover all drugs. I fully accept what he says about heroin. It is good to know that the regulations tightening the security over all drugs that may be harmful are having some success.
Another matter which the Brain Committee were not asked to report upon and did not report upon was cannabis and all its derivatives. This is a dangerous drug within the terms of the 1965 Act. Last April there were suggestions and letters to The Times, not at first particularly authoritative, that reefer smoking, the smoking of marijuana and hashish, was not too bad, no worse than the drinking of alcohol. A letter by Mr. Manfred Mann, who started the correspondence, was followed eventually by two long articles by Dr. David Stafford Clark, a well-known psychiatrist, in which he spoke of the "relative innocence" of marijuana by comparison with alcohol. If that is a good expression of our experience in this country, it is only because marijuana has not been smoked long enough by a sufficient number of people to reveal anything else. My information is that not only is marijuana with amphetamines one of the many roads leading eventually to heroin addiction but—and here I am relying on information in the latest edition of British Journal of Addiction—in time marijuana on its own leads to incurable insanity. It would be helpful to the House and to the public at large if the noble Baroness could give us some authoritative guidance on this point, because, if I am right, it is important that this is spelled out.
Perhaps she could deal also with the question of soft drugs, on which the noble Lord has touched. This Bill deals only with those people who have reached the end of the road; it does not touch those who are just starting on it or under

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temptation to start. I think that the House could well hear a little more than it has had already on what Her Majesty's Government have in mind for this part of the problem. Can the medical profession, for instance, justify the continued production of so many addictive stimulants in such large quantities for quasi-medical purposes, like slimming, when other non-addictive drugs, I am told, are available as alternatives? I understand that this matter is under consideration. If so, I suggest that it ought to be considered with dispatch, as the matter is urgent.
Finally, I come to the rehabilitation of addicts, a matter I raised in a Question last March, the answer to which I fear revealed remarkably little forward-thinking or planning in Government circles. I understand that there have been further consultations early last month, but I do not believe that the light has yet fully dawned. Ail the time and the money and the effort that is being expended on making provision for medical treatment in such centres is going to be wasted, unless adequate long-term social support for addicts who have been withdrawn from their drug is also provided to see them through, right to the end of a successful cure.
Rehabilitation and the provision of rehabilitation hospitals is supremely a job for a partnership between statutory and voluntary bodies. But the position in this respect is not, so far, an encouraging one. With a few notable exceptions, such as the long-standing contribution of the Covent of Spelthorne St. Mary, I see only a few struggling pioneers, grappling with very daunting problems of finance, with little positive contribution from medical officers of health in this field—though I should be the first to acknowledge their contribution with education officers in the field of education—and great uncertainty in the Ministry itself as to what to do next.
Further guidance on rehabilitation was foreshadowed in the hospital memorandum which I have already quoted. We should like to hear from the noble Baroness whether it has been given, and if so, in what terms. If the noble Baroness who replies can say anything to dispel the rather anxious and gloomy view that I at present take about this
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subject, no one will be more pleased than I shall. Meanwhile, while hoping for considerably more from the Government, and soon, we on this side of the House welcome and support the Bill.
3.42 p.m.
LORD AMULREE: My Lords, I am sure that anyone would give support to a Bill which made some attempt to deal with this very serious moral, social and physical problem, and I feel certain that your Lordships will give this Bill an unopposed Second Reading. The state of the law regarding medicines has been unsatisfactory for quite a long time, and one has been promised—or it has been suggested—that by now more comprehensive legislation would come out dealing with more drugs than this Bill deals with. That principle was accepted by all. But such legislation has not come, and we must be content with this little ad hoc Bill, which deals purely with the dangerous drugs of addiction, the so-called "hard" drugs.
There is a good deal of evidence that the use of the so-called "soft" drugs, which I think might be called the dependent drugs, as opposed to the addictive drugs, does lead to increasing dependence upon hard drugs and to becoming addictive. It is claimed by some people that soft drugs when taken in reasonable quantities do no harm; some people even claim that they may have a beneficial effect. But this, I think, is a point of view which should not be encouraged, because I am sure that, fundamentally speaking, they are dangerous to all people. One has seen in the Press from time to time remarks by people who think themselves prominently important encouraging the use of these drugs, and who say that they take them themselves. This is something that is greatly to be deplored.
A great deal of what I should like to say has already been said by the noble Lord, Lord Sandford, and I am in general agreement with everything he said. I should like to say, in passing, that I was a friend of the late Lord Brain, and I am not a member of the General Medical Council. I would rather not pursue this matter further.
One agrees entirely that an addict should be regarded as a sick person rather than as a criminal. One has seen

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that the opposite attitude did not work in the United States. But because of that, and because the Home Office is the Department which deals with drugs, it will need a close co-operation and working together between the two Departments. The Home Office does a great and good work in all sorts of ways, and although at present it is one of the kindest and most humane of the Departments of State, the fact remains that in the minds of the public a certain penal quality attaches to it. That, I think, is inevitable. But I am sure that the Government will do what they can to ensure that the Ministry of Health, via the National Health Service, are given a proper part to play in the treatment of these unfortunate people.
There are one or two points to which I should like to refer. I gave the noble Baroness who is to reply notice of some questions, and I will ask a certain number of them. Clause 1(1)(a) of the Bill says that the doctor shall furnish particulars of a patient he
"has reasonable grounds to suspect …"
is addicted, and so on. This is something about which I am a little worried, because my profession is not accustomed to being turned into detectives of crime. I do not know whether this provision has any particular sinister connotation. I do not think it has, but I was rather surprised and sorry to see it in the Bill.
Then, although there is not going to be any register of addicts, the names of such people are to be recorded somewhere: there will be some information centre. I should like to ask whether the addict will be told that his name has gone to that information centre. And supposing the man says that he is not an addict, will he have any appeal against his name being sent? And supposing he is successfully cured, will his name be expunged from the record at the centre? Then, what will be the position supposing an addict is taken to hospital suffering from some other disease, and the hospital happens to be situated some distance from where he lives and where his treatment centre is? Will the doctor at the hospital, although he is not the registered doctor, be able to give the addict his supporting drug, or will it be necessary for the doctor with whom the addict is registered to
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come and give the drug? And supposing the addict himself, due to his current complaint—a broken leg, or whatever it may be—cannot travel to the centre, will it be possible for the doctor treating him in hospital to give him his dose of drugs?
There is to be an information centre where all this information will be collected together. Will that centre be open for the whole of the 24 hours of the day? I ask this because addicts are "cagey" people, who do not keep regular working hours and if the addict comes to a centre and one cannot ring up to check from the information centre at any time whether he is already registered with somebody else, that can lead to some kind of abuse of the powers. What kind of steps will be taken to ensure that one addict—as I say, they can be cunning and clever people—does not register with more than one doctor, or with more than one treatment centre? That is all I have to say on Clause 1 of the Bill.
I should like to turn now to Clause 5, where subsection (3) seems to me to be extremely wide. I am not quite sure what it means. It seems to me to give the Minister enormous powers, but I cannot think that this is intended. I assume that this covers merely drugs in the Schedule to the principal Act. Suppose that there were further drugs to be added by the International Convention to the drugs in that Schedule: would it mean that this Bill, when it becomes an Act, would fall and that we should need to start again, or would this Bill then apply to Schedule 1 to the amended principal Act? I trust that I have made myself clear.
LORD STONHAM: My Lords, may I answer now? The answer is, Yes, of course; we could add the other drugs in Part I of the Schedule to the 1965 Act.
LORD AMULREE: I thank the noble Lord. That has cleared up that point. I was going to ask whether provision was going to he made whereby pharmacists and chemists and drug houses could protect the drugs but the noble Lord said that he would move an Amendment on that question, so I shall not proceed with that any more. That is all I have to say about the Bill itself.
I should like to add just one of two remarks before I sit down. First, I hope that the old machinery, such as it is, will

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not be taken away before the new machinery is absolutely ready. Drug addicts are curious people and it is not easy to move them from one place to another from the point of view of getting treatment; and, furthermore, they like to feel that they are going to have the same person treating them for a long time. So I trust that that will be borne in mind and that we shall not see any danger of the general practitioner being banned from prescribing drugs to addicts until the network of treatment centres over the country is completely finished and is working properly. If that does not occur, it will make a black market, and illicit sales of drugs will occur immediately. So although I consider the matter to be urgent, I trust that we shall not proceed too quickly and take away the old system, such as it is, before we have evolved a new and complete one in its place.
I do not know a great deal about the new centres. I have seen that there are to be two in London teaching hospitals, and four more are proposed. What I should like an assurance about is this. These new centres will cost money. Further premises may need to be provided; it will be necessary to provide extra staff to work them. That will cost money. The Minister in another place was closely questioned about that matter, and I thought he was rather cagey in what he said. I should like from the noble Baroness an assurance that extra money will be found for the establishment of these clinics and staff and, if necessary, premises; and not only that it will be found for the first year but that it will go on being found for subsequent years, for as long as the centres are in existence. One has observed in the past that money has been given for the first year of a new project, and in the second year it has been said, "This must come out of your budget. You will have to rearrange your internal affairs." One would like some guarantee that that is not going to happen in this case, because if it did I think it would go a long way to negative the value of the Bill. In conclusion, I would say that I trust that this Bill will succeed in the object it sets out to achieve. But I should like to say again that a drug addict is a curious and elusive creature, and it may be very difficult to pin him down.
3.56 p.m.
THE LORD BISHOP OF WORCESTER: My Lords, I imagine that every right-minded person will give his support to this Bill, which I see as part of a plan to tackle the problem of drug addiction. And here it might be well to remind ourselves of the wise words of Edmund Burke:
"In all forms of government the people is the true legislator."
This Bill, like any other Bill which deals with a matter of reformation, however well conceived, depends in the final analysis for its implementation on the good will and support of the people.
In order to have this community support it is necessary to have three things. First, people must have faith in the legal and administrative machinery that is being set up. Secondly, they must appreciate the fact that there are limits to what legislation can achieve; and, thirdly, in the particular case of this Bill, they must realise that we are all involved, that drug-taking is an inevitable by-product of a technically advanced society such as our own. Drugs are now used extensively in medical practice. Most of us have benefited from this, and there can be only a few fanatics who would think it wrong to do so.
Without wishing to weary your Lordships, I should like briefly to develop these three points. First, people must have faith in the proposals of this Bill and see their point. This is important, because I imagine that many people, old or young, are ill-informed and prejudiced about drug-taking. At one extreme there are those who make sweeping condemnation of "the teenage drug menace", and demand action to "stamp out this vice". At the other extreme there are a lot of young people who defend drug-taking in extravagant language and, one suspects, are more ignorant than they will admit about the dangers involved. There is, of course, between these groups a complete lack of communication. Someone has indeed said that the:
"gap between the generations yawns wider at this point than anywhere else".
But there is also a third group, made up of many young people, parents, teachers and just ordinary everyday decent folk, who are prepared to ask questions about the use of drugs, to examine the

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facts objectively and to take part in intelligent and rational discussion of the problem involved. I support the Government most heartily in the promotion of this Bill. But I should also be glad to have the assurance that they will produce the material necessary for such discussion as I have suggested on, say, the teacher/pupil level, or by youth club leaders and club members, or parents' associations.
This brings me to my second point. If people are to be aware of what legislation can or cannot do in this matter, they must be told what are the medical facts about dangerous drugs; why some young people experiment in drug-taking; what are the social and personal pressures which make a person liable to addiction, and how society ought to tackle this problem. I should have thought that education and discussion on these lines is essential if the Title of this Bill is to be fulfilled. It is described as:
"An Act to provide for the control of drug addiction and to make further provision with respect to drugs."
It is this "further provision" which to me seems so important.
My third point is that once people are aware of the problem they are usually prepared to be involved in its solution. And I must confess that I feel that a better Title for the Bill would have been, "Potent Drugs (Prevention of Abuses) Bill". The World Health Organisation now discourages the use of the word "addiction" and prefers the word "dependence", for basically drug dependence is the abuse and misuse of something which in its proper use is a great blessing and power for good. Countless thousands have reason to be grateful for morphine and cocaine, and other drugs, after accidents or major surgery. They have removed pain, or made it easier to bear, and for many people their passing from this life has been made an easier and less fearful experience. The tragedy is that, human nature being what it is, in this case as in many others it tends to change what should be a blessing into a source of evil.
Here, young people are peculiarly vulnerable, for, because they lack experience, the drug pedlar and those who support him have found them easy targets for making vast profits in their diabolical
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trade. These young people, like adults, gradually develop a state of mind called "psychic dependence", and it is to help such people that the various clauses of this Bill are designed. The Bill enables the Secretary of State to take certain action where it seems advisable, but behind the Bill are the causes which have made such a Bill necessary. The Bill deals with ends. It is the community who must deal with the causes, because, as I have suggested, the whole community—that is, all of us—share responsibility for the anxiety, the negative attitude to life, that drives some people to the extremes of escapism in the use of such self-destructive drugs. Therefore the whole community shares a great responsibility for dealing with the situation.
The ordinary citizen will no doubt discharge his duty in this regard with a certain amount of grumbling; will shoulder the higher taxation, if that is necessary for the new out-patient facilities for supplying drug dependents and inpatient facilities for withdrawal treatment. But this is not enough. Experience has proved that a great deal of personal voluntary effort is required to supplement what I would call the "professional case-work curing technique". The Salvation Army and the Church Army, to mention only two of many organisations thus involved, have shown, on the one hand, what can be done for the "incurables", and, on the other, how voluntary effort can help in the rehabilitation and resettlement of those who have successfully undergone treatment.
I believe that to-day there is an enormous potential of individual voluntary workers who cannot find any outlet for their urge to serve. They are not just "do-gooders"; they are anxious to be trained and equipped for the job, and it is a situation for an incisive national lead to be taken by the three Ministries responsible for coping with the abuse of dangerous drugs, in the co-ordination of these voluntary resources. At national level let there now be a complete frankness about what is required of such voluntary effort. Is it redistribution of wealth without tears? Is it collecting money for the new social service which cannot be obtained from increased taxation? Is it the creation of a community spirit so that the known drug dependent is not driven away to

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sleazy hidey-holes? Or is it really the provision of lodgings, sitting-in for overworked staff of hospitals, or finding and equipping and setting up hostels financed from statutory services? I very much hope that the ministerial statement in another place that:
"there is scope for valuable contributions by voluntary bodies"
means that we are soon to have a comprehensive statement as to precisely what personal contributions ordinary people of good will can offer towards the success of the plans to be built upon this Bill.
Let me presume to conclude by quoting some words of Ralph Waldo Emerson, uttered in a speech in Manchester in 1847—and I feel that the situation which he then envisaged, applies to-day:
"I feel in regard to this aged England … I see her not dispirited, not weak, but well remembering that she has seen dark days before—indeed, with a kind of instinct that she sees a little better in a cloudy day, and that in storm of battle and calamity, she has a secret vigour and a pulse like a cannon".
I believe that this is true to-day. Let the Government tell the people that this is a great challenge, in which the whole nation is involved, for it is nothing less than the opportunity to use, for once, the great benefits of scientific research and discovery for the benefit and not the destruction of humanity. The response will, I am convinced, be such that when the history of these times comes to be written, this Bill debated here to-day will be seen to have marked a great step forward in our national life.
4.5 p.m.
LORD SEGAL: My Lords, I should like, if I may, to preface my speech by one or two comments on the remarks made by the noble Lord, Lord Sandford, who opened up from the Opposition Front Bench. He accused the Government of undue delay in bringing forward this Bill. If I may say so, I am inclined to think that this criticism of culpable delay is somewhat unwarranted. Eighteen months of discussion with professional medical bodies is, in the light of my experience, not an unduly long time, and, as the whole House will realise, the working of this Bill must depend on the active co-operation of the medical profession, who in themselves are not by any means agreed upon its machinery. Another point on which the noble Lord spoke was that
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of exercising some pressure on the medical profession in order to get, as he said, certain professional bodies to co-operate more actively. My own feeling is that if we cannot exercise compulsion upon the addicts themselves, by what right can we hope to exercise compulsion upon the medical profession? The noble Lord went on to say that the medical profession may yet have some cause to regret their decision in this matter. I am inclined to think otherwise. I think the decision was reached after long and careful discussion, and if the General Medical Council's Disciplinary Committee had assumed full responsibility for the disciplinary aspect of this Bill I think they would have been abrogating from the medical profession as a whole a good deal of their inalienable rights, which they would reluctantly yield to any Government.
Perhaps I may be allowed also to venture one slight criticism of one of the remarks made by the right reverend Prelate. He suggested a change in the title of the Bill and thought it might be improved if it were described as the Potent Drugs (Prevention of Abuse) Bill. To my mind every drug in the Pharmacopœia is in itself, if it were prescribed in sufficiently large doses, a potent drug. In fact, so far as my knowledge is concerned, I am totally unaware of any drug which can be described as an "impotent" drug.
I think we can all agree that this is not only a necessary Bill but also a measure of extreme urgency. To me, the most welcome part of the Bill is the provision that the regular prescribing of dangerous drugs should be taken out of the hands of the general practitioner and devolve upon licensed consultants who will be able to keep a strict control over the patient. It is highly important that the element of financial gain to the general practitioner by his prescribing of dangerous drugs to an addict should be entirely removed.
In discussing this measure, we are conscious to-day of the absence from our midst of Lord Brain, whose untimely death leaves a painful gap, not only in the profession which he adorned, but also in the membership of this House. His wisdom and kindliness and, above all, his quite unique knowledge of the subject we are discussing this afternoon,

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leave us not only greatly enriched by his life, but sadly the poorer for his passing.
The Brain Committee's Second Report, in paragraph 11, quotes the notorious case of one doctor who in 1962 alone prescribed 600,000 tablets or 6-kg of heroin to addicts, but that in all only six doctors, out of more than 20,000 on the Medical Register, prescribed very large amounts of dangerous drugs to individual patients. Whether they were well remunerated the Brain Report does not say, but I suspect that some financial gain must have accrued to the doctors concerned. I can recall a case of straightforward prescribing by an elderly ex-Army doctor, living mainly on his Army pension, who started giving a weekly prescription of heroin to a confirmed addict and for only a very nominal fee. But the weekly amount gradually became used up in less than three days and the patient kept coming more and more frequently for his prescriptions. In the end, the doctor had to issue him with a daily prescription, so that his fees from this one patient soon became increased sevenfold. And even this soon got out of control. With the date carefully inserted in the prescription, the patient was found standing on the pavement outside an "open-all-night" chemist, waiting for his day's supply of heroin to be dispensed on the stroke of midnight. So his daily supply became used up long before the next 24 hours were over, and the doctor had to insert on his prescription, "Not to be dispensed before noon".
At this Second Reading stage, I would express some of my anxieties about this Bill. Can the Minister give the House an assurance that, on the Bill's vesting day, there will not be a vast increase in the overall amount of heroin dispensed? What I fear may happen is this. If patient "A" is now receiving from a doctor a given amount of heroin and is able promiscuously to dispose of part of it to addict "B", with whom he may even be living, or to peddle part of it on the black market, it may well be that on vesting day addict "B", who until now has drawn all his heroin from an illegal source, will come forward to a doctor and ask for his case to be notified to the specified authority. Once notified, he will then presumably receive his required amount of heroin from a properly legal
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source. But would patient "A" then receive from the doctor licensed to prescribe only a half, or a third, or a quarter of his former prescription, to be used exclusively for his own requirements? I can foresee a very real danger on vesting day, not only of a large increase in the number of addicts now known, but also a vast increase in the overall quantity of heroin prescribed.
LORD STONHAM: My Lords, may I interrupt my noble friend? He may well be right; perhaps there is some reason to hope for a vast increase in our knowledge of known addicts, and he may well be right in regard to the total amount prescribed. Where he cannot be right is in thinking that the individual addict will receive more than he properly needs for the treatment of his addiction. He will not get enough to supply to other addicts.
LORD SEGAL: My Lords, I fully accept my noble friend's statement that he will not receive more, but there are certain cases where the people to whom he has been passing his excess heroin will be entitled then to have their own supply, and the original addict "A" should properly receive less than he formerly received. I think the Minister should be forewarned of the trap he may be laying for himself under the Bill. Does he propose that no doctor, not even a specially licensed doctor, should be allowed to prescribe any dangerous drug for a new patient on vesting day? If so, would not this be an unwarranted interference with a doctor's freedom to prescribe? What exactly are his plans in this matter?
May I add another warning? Great stress was laid in another place upon the provision of adequate facilities for treatment, and it has also been referred to in your Lordships' House this afternoon. I shall come to this aspect later on. But cases have occurred not infrequently of patients undergoing treatment at a treatment centre who peddle heroin secretly among themselves, thus undoing all the good work of the doctors and nurses who are trying so assiduously to effect their cure. These cases are sometimes so persistent that the doctor treating them is left only with the hope that they may eventually be convicted of a criminal offence, such as forging the quantity of dangerous drugs on a prescription, and receive a prison sentence. Then there is

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a good chance of a cure being effected. For on admission to prison their clothing is searched for dangerous drugs and they are admitted at once to the prison hospital, where attempts at cure can be strictly controlled. But even then the chances of a cure are not absolute, for cases have occurred in the past where, on their discharge from prison, all their property has been returned to them, including the heroin and syringes found on them at the time of their admission. Such cases of immediate relapse after cure, I believe, cannot occur to-day.
LORD STONHAM: My Lords, I am sorry to interrupt again. I do not think there have in fact been instances of heroin actually being returned. There have been instances of syringes being returned, but action is now being taken to ensure that there is no possibility of a recurrence of that.
LORD SEGAL: My Lords, I am glad to be able to confirm from my own knowledge what my noble friend has said. But I should like to draw the attention of the House to the fact that, without question, abuses have been known to occur in the past.
There is a third point which I should like to bring to the notice of the Minister. Till recently, I have always felt that our approach to this problem was far more humane and considerate than that of America. In this country we have always regarded the drug addict as a sick person, as much in need of treatment as the rheumatic patient or the diabetic. But during the last six years the increase in known cases of heroin addiction has been so great, as has been said, from 68 in 1960 to 749 in 1966, and so much crime and suffering is being caused as a result, that I feel the prescribing of heroin to any new patient should now be prohibited altogether. It would be utterly wrong to deprive a known confirmed heroin addict of his controlled access to the drug he needs. Once addiction has set in, no substitute for heroin can, I believe, be truly effective. But in a case where no addition to heroin as yet exists, a vast number of alternative synthetic drugs, highly efficient as pain-killers, are available to a doctor, and all of them far less habit-forming than heroin. So, while the banning of heroin to confirmed addicts would be wrong and inhuman, I feel that
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legislation to prohibit altogether the prescribing of heroin to any new patient is now long overdue.
One of the terrible pitfalls that face a doctor confronted for the first time by a new patient asking for heroin is that lying is one of the patient's main symptons. It is an axiom of English law that a man must be presumed innocent until he is proved guilty. But with a drug addict I have come round to believe, contrary to my own sense of fairness and from long and bitter experience, that it is always safer to assume that the patient is lying until it can be proved that he is telling the truth. Few doctors in general practice, I believe, would willingly undertake the treatment of an unlimited number of addicts unless they had some financial interest in the proceeds. I know of one doctor who did so purely in the interests of medical research. He said he would treat all-comers for a period of one year and register them on his National Health Service list. During that year he collected, thanks to the underground "grape vine", no fewer than 24 heroin addicts.
Then he decided to give them up and have them removed from his list: they were so demanding of his time and energy at all hours of the day and night that he refused to take them on any more. But he soon found that he could not give them up. The doctor/patient relationship with the 24 had become so complex that he felt he would be letting them down if he handed them over to the care of another doctor. But he also felt that all his other patients were being affected by this relationship and receiving less of his care than they needed. Under this Bill he can transfer all those addicts to a specially licensed consultant, far better able to give them the time and care they need, and far better able to exercise a strict control over their dosage and to initiate their treatment. The comment of this doctor to me was "Any general practitioner who would willingly take drug addicts on to his list ought to have his head examined".
Take the case of another doctor. He was prescribing for a heroin addict, an artist, living in circumstances of abject poverty. Suddenly the doctor was surprised to find the patient's house beautifully decorated, fitted with luxurious new furniture, and the patient himself was seen driving about in a large American

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car, far more expensive than the doctor himself could ever afford. The addict explains this by saying that he has sold a few more of his paintings. The doctor has his suspicions. What does he do? Quite rightly, he phones up the Dangerous Drugs branch of the Home Office and reports his suspicions. But the addicts' parents, who are also beneficiaries in their son's new-found prosperity, go off this doctor's list. The addict's wife and children also ask to be transferred to another doctor. The whole street may come to hear of it and the doctor's practice may suffer. This Bill, by transferring the care of this addict automatically to a specially licensed doctor, will effectively protect a conscientious practitioner from these pressures, and enable him to continue doing his good work with a tranquil mind.
Reference was made in another place to the cost of this Bill. I firmly believe that the cost will be negligible compared with the wastage in manpower, in human material, often of valuable human material, some of it highly gifted, intelligent and creative, of enormous potential value to the community, desperately in need of help and now being thrown aside on the scrap heap. The urgent need of the moment, however, is for strict control. The genuine addict must be granted, in the first instance, the right of access to his drugs, free of all cost to himself and under the National Health Service. But prescribing must be kept under the strictest control to ensure that the whole amount of the drug prescribed is used only by the patient himself. By this means we may eventually hope to destroy the black market in these drugs.
But before we start to condemn any addict, and accuse him of lying and of deceit, let us remember that under the present system an addict is sorely tempted to ask a doctor for far more heroin than he really needs. He is often unfit for work; he may have little inclination to go out and work. He knows that he can always readily dispose of any surplus heroin and effect an easy living by this means. I imagine that many heroin addicts, if not all, who desire to go straight and always to tell the truth about the amount of heroin they need for themselves must find this temptation hard to resist. So that if at any time an increase
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in quantities is required, that should be the signal to recommend a course of treatment to the patient in his own interest.
The strictest control can, I believe, be achieved under this Bill. That is why I welcome the Bill wholeheartedly and with but few reservations. But again I would emphasise that, while research is important and urgent, and treatment even more important and urgent, by far the greatest urgency of all is that the consumption of these drugs must be brought fully out into the open and kept under the severest control. Let us remember that research takes time; and this problem cannot wait. Let us also remember that in treatment the rate of relapse is appalling, and that months and years of patient treatment can often be destroyed in a single week. But control can be stringent and absolute.
Many addicts will have to be allowed to live with their addiction, as a rheumatic with his rheumatism. We may not be able to cure his rheumatism, but we can prevent it from getting worse. That is often the most humane and understanding approach to the problem of drug addiction, and I believe in many cases the only true medical one. I once heard of a large employer of labour, the head of a prosperous business, who travelled to his office each day in his Rolls-Royce, under the constant care of a trained nurse, and who was daily injected with more than 30 times the maximum official dose of heroin. Why was that? Simply because he had developed an abnormal tolerance to the drug, which was originally prescribed for him 16 years previously after a major surgical operation. Yet that man was able to run his business efficiently and to look after more than 2,000 employees.
He lived to well beyond the allotted span. Would anyone be so foolish as to suggest that this man should submit himself voluntarily to undergo a course of treatment? He was happy and efficient, left as he was after 16 years under the strictest and medical nursing control. Yet he was able to render a useful service to the community, far more useful than if, at the age of 75, he had been induced to undergo a course of treatment.
But in bringing the consumption of dangerous drugs under control, let us be

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careful at this stage not to change the present machinery. I believe that it works well now, and can be made to work even better under this Bill. There is the closest working collaboration in these matters between the Ministry of Health and the Home Office. The machinery is well established. The personnel is excellent. Some modification may indeed prove necessary in the near future and in the light of working experience under this Bill. But now, at all costs, let us avoid a leap in the dark, only to find later on that we may have created a pedlar's paradise.
I also believe that on balance the General Medical Council were right to remain outside the disciplinary machinery required for this Bill. But this is a matter perhaps more suitable for discussion during the Committee stage. Let us also ask ourselves: why should there be a sudden rush for in-patient treatment under this Bill? Do addicts rush to get cured? I greatly doubt it. A taste of "cold turkey" or treatment by means of gradual withdrawal of the drug may well tend to put some of them off. I rather think that as regards the provision of in-patient treatment things will go on for a while much as before. I only hope that as the need for in-patient treatment steadily increases facilities may gradually be made available.
But do not let us delude ourselves with fantasies of vast new hospitals, with special wards for specialised treatment, suddenly springing up overnight. Nor about millions of pounds having to be diverted from other pressing needs of the National Health Service for the treatment of drug addicts. Such ideas, I believe, are a delusion, and a cruel delusion at that. We are dealing here with human material, humans who are desperately in need of medical help, and who have the right to receive that help at the hands of our community. May I say, finally, that I believe this to be a good Bill. It is a highly necessary Bill. It is a Bill which should command approval from every quarter of this House.
4.30 p.m.
BARONESS HORSBRUGH: My Lords, I had not intended to speak on this Bill, although for some time I have been extremely interested in the problem. In
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the days of the League of Nations I was one of those working with the Narcotics Committee and was well instructed by Sir Malcolm Delevingne of the Home Office. I realised then how certain measures that had been taken had brought about a wonderful improvement in the problem of the appalling traffic in illicit drugs that had been going on throughout the world. The basis of this was that a complete record was kept of the drugs from the raw state. The Committee discussed and examined how many acres were used in the cultivation of the opium poppy. They kept records of the raw materials which were taken into a country and manufactured into certain drugs to be administered. Records were kept of amounts taken in by retailers and sent out by retailers. They had complete records and could know at once when and where there was a leakage into the illicit traffic.
I know that the noble Lord, Lord Stonham, has told us to-day that the illicit traffic, or the illicit source of drugs in this country, is very slight and that addiction has come from over-prescribing by a certain number of doctors. It seems to me that if—which I hope will occur as a result of this Bill—over-prescribing is stopped, we shall have to watch very carefully to see that those who are dealing with this traffic do not find other ways of circulating these drugs. We have only to look at the history of this terrible trade to see how clever people are, to what extremes they will go. and what trouble they will take to get the material they want on which they will make large sums of money by peddling it to the poor victims.
What sort of records are we keeping in this country? I know, sadly enough, that during the war the world-wide records were destroyed. The Narcotics Committee moved to Canada, and I saw some of the records then. They are now, I think, attached to the United Nations. A great deal was lost during the war and I doubt very much whether it has been possible to build up again the scheme we had before the war. I should like to know what is the system now. Do we know the amount of raw material that comes into this country? Do we know the manufacturers to whom it goes? Do we know the amount that is manufactured by them, and have we a record of the amount that goes to the various retailers

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and pharmacists? Do we know how much goes to the doctors who have the right to prescribe, and do we know—if we have those records—the amount of leakage, and can we trace it? We know, of course, that other stuff will be brought in. I do not think we can evaluate what the problem is and what the illicit problem will become unless we have those records.
I did not wish to detain your Lordships for any length of time, but I was so impressed with what I learnt and with the speech of the noble Lord, Lord Segal, who showed us how complex this problem is. It is no good thinking that when we have passed this Bill, that instead of people being over-prescribed by a doctor, they will just go off to the right place where we should like them to be that they will be willing to go in and to give up this addiction, and that there will be no thought of trying to get more of the stuff and peddling it one from the other. I wish that were true. Those of us who know anything about this appalling difficulty will know the problems: how much we shall have to deal with deceit; how much we shall have to deal with the appalling craving, and how much we shall have to deal with people who, at the beginning, do not think it matters, and find later that it matters more than they can possibly express.
4.36 p.m.
LORD ST. JUST: My Lords, may I have the presumption to say to Lord Stonham, who I know is not present in the Chamber at the moment, that his speech, and the speech of the noble Lord, Lord Sandford, who followed him, were so clear that I have thrown away my prepared speech and am working entirely from a few notes. Everything I was about to say has already been covered. I am certain that the Government are correct in treating the drug addict as a sick person. This is an important, fundamental point from which to work. One point, also, that I think is important is that when the time comes for an addict to go into a hospital or treatment centre his treatment should at that time be entirely on a voluntary basis. I think everybody will accept this, and I am certain it is the right way to approach the matter. There is difficulty, however, when the treatment of withdrawal has started, and then in some cases some form of limited
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compulsion must, I think, be held over the patient's head. I think it is impossible that when a man has gone into hospital and started a cure, having been, let us say, a serious addict for a number of years, and with withdrawal symptoms having started, he should be in a position to say: "I have had enough; I am now going out." This may be an extremely dangerous thing for a patient to do.
May I go on to another point connected with a subject already spoken about on many sides of the House to-day—the staffing of these centres? It is a question not only of doctors, but also of finding staff, psychiatric staff, to man these centres. This is a very important and serious problem in many of the psychiatric clinics attached to teaching hospitals at the present time. The clinics have some doctors, but they cannot get the psychiatric staff. After all, a great deal of work—especially in this branch of medicine—falls on the heads of staff nurses and even on junior nurses. This is a very difficult point to deal with, and I am certain it must be gone into in great detail.
I have a suggestion to make which the noble Baroness may throw out with the greatest of pleasure if she does not agree with it. When efforts are being made to persuade these addicts to go to centres and undergo treatment of withdrawal, I am wondering whether it is possible for people who have been cured to be present and argue with those patients the reasons why they must take a cure. It is the same idea as with Alcoholics Anonymous. A patient comes voluntarily into a psychiatric hospital to take a cure and when the psychiatrist or doctor sees him the patient turns round and says, "But you do not understand what it is like". However clever a doctor or psychiatrist, or anybody, may be, this is a true fact: the doctors do not know. I believe there may be something in this argument. I think it is exceedingly difficult to send a person who has been cured as a drug addict out again into the wide world to face these people, because there is a terrible danger that he will become an addict again. But if some people who have been cured could be present at the centres, where the staff could keep an eye on them, they might be able to help enormously in persuading addicts to take the cure and, when started, to go on with it.

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I have little more to say, except that I am certain that by this Bill the Government are moving in the right direction. As we know, drug addiction is a vast problem, but the country itself is now moving forward in its awareness of what has to be faced in dealing with it. As I said, this Bill is a step in the right direction.
4.41 p.m.
VISCOUNT ADDISON: My Lords, I did not mean to intervene in the debate, and I shall not keep your Lordships more than a couple of moments; but there are two or three points on which I should like to touch. First of all, I think this is a good Bill and deserves all support, and I have no doubt that your Lordships will give it a Second Reading. Also, it is a Bill which may work out well in practice. I could not help agreeing very much with the noble Lord, Lord Sandford, when he said he felt that the legislation had come later rather than earlier. But my noble friend Lord Segal seemed to think that that was because of the rather protracted nature of the deliberations of members of his own profession, so I suppose we must accept that and give the Government credit for the Bill.
I should just like to make two points. First, I share the view, which was also expressed by the noble Lord, Lord Sandford, that it is a pity that recommendation 7 of the Brain Report was not incorporated in the Bill—though I can see that there would be grave difficulties in doing so. I also agree with the noble Lord. Lord St. Just, about how helpful it might be if we could produce cured addicts. But I wish I knew of any who had been cured of addiction to heroin. I wish it could be established that people can be cured, perhaps by detaining them long enough to get over the habit. This is a very vital aspect of the need for work on this subject, but I do not think it can be done without implementing recommendation 7 of the Brain Report.
On the question of the constitution of the tribunals and the advisory bodies set up under Clause 2, I should like to think that there was some lay representation. There will be a barrister chairman and four 'doctors on the tribunals, and two doctors on the advisory bodies. But I feel (I am speaking only for myself, and
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not for the hospital board which I represent) that we should have some experienced lay representation on those bodies. I do not wish to put down an Amendment, but I hope that the Government will look at this point before the next stage of the Bill.
4.44 p.m.
LORD SOMERS: My Lords, before the noble Baroness replies, I wonder whether I may ask one or two questions. I was most interested in what the noble Lord, Lord Stonham, said, and I entirely agree with him that the guilty person is not the addict but the person who peddles the drug, and it is on him that the full weight of guilt should fall. Of course, the addict must presumably have a moment of weakness when he first starts, but he is not always responsible for that.
The noble Lord, Lord Stonham, spoke of the doctor's dilemma in knowing how much of these drugs to prescribe, and for whom they are necessary. But I should like to know, if the noble Baroness can give me an answer, whether there are ever cases in which these habit-forming drugs must be prescribed. After all, there are plenty of sedatives which are not habit-forming, and I should have thought that the use of drugs as sedatives could be confined only to any essential cases. Also, I wonder whether there could be some system by which there is complete anonymity for an addict receiving treatment at a hospital. Unfortunately, as with alcoholism, these patients are apt to bear the stain of what they have been suffering from, even though they may be entirely cured. In addition, it is not always known whether they are entirely cured or will go back again to drugs. But if it were possible for them to get treatment anonymously it would be much better if they want employment afterwards.
4.46 p.m.
BARONESS PHILLIPS: My Lords, your Lordships have indeed set me a task in replying, or attempting to reply, to the many questions that have been raised during the Second Reading of this Bill. At the outset. I would say to those noble Lords who do not receive a reply this afternoon that it is not because Her Majesty's Government are unable to provide it, but probably because on this occasion I, as their mouthpiece. do not have the necessary information. But those of your Lordships who know me can

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accept my assurance that I will see that replies are sent to those questions which were raised later in the debate.
The discussion has ranged widely and has covered the problem of addiction over the whole range of drugs—the so-called "hard" drugs, the narcotics and the "soft" drugs—the prevention of addiction, including controls and their enforcement, and the extending of treatment and rehabilitation to those who become addicted. The Government are fully aware that the Bill we are discussing this afternoon does not set out to tackle all these problems. I was very heartened when the noble Lord, Lord Segal, told the noble Lord, Lord Sandford, that the allegation of unwarranted delay was not perhaps justified, and that in the opinion of a member of the medical profession 18 months was not long to consult with, and secure the agreement of, the medical profession. I hope that the noble Lord, Lord Sandford, will accept those words as coming not from me but from a member of the medical profession. I was heartened, too, by the fact that the noble Lord said that had the Opposition been in the position of the Government they also would have acted on the recommendations of the Brain Committee.
The noble Lord put several questions to the Government to which I shall endeavour to give him replies. He asked, as indeed did several other noble Lords, whether the Government were going to give some guidance about rehabilitation. My reply is that the Minister proposes to issue guidance about rehabilitation and the co-ordination of the services of hospitals, of local health authorities and of voluntary bodies. This guidance will be issued on the advice of the Advisory Committee on Drug Dependence, which is urgently considering the question of how best to provide effective rehabilitation. In other words, certain further measures will rest on the recommendations of this Advisory Committee.
Because of our mutual interest in the National Council for Social Service, I know that the noble Lord, Lord Sandford, will be aware that it is very active in this field, and that the Bristol Council for Social Service is hoping to provide a hostel for drug addicts. He will also be glad to know what other voluntary organisations have set up hostels for addicts. They are the Hill Farm Enterprise, near Birmingham;
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Narcotics Anonymous, in London, and the Crossroads Trust, in Watford. Others which are working on setting up hostels include the Birmingham Midland Committee for the Prevention of Drug Addiction, the Life for the World, in Gloucestershire, and the Manchester and Salford Methodist Mission. I should like to assure the noble Lord, Lord Sandford, that my own very warm feelings for the voluntary bodies will enable me to press their case strongly with my right honourable friend when it comes to a discussion about assistance for the voluntary bodies in this field.
The noble Lord also inquired (or, rather, I think that here he made a more definite statement) about the fact that hospitals were not happy about the proposals in a certain memorandum, and he asked what response there had been to this. I am not sure that my information entirely agrees with that of the noble Lord, but the Minister feels that the hospitals, after full discussion of the memorandum, are quite happy about the proposals and that the response has, in fact, been most satisfactory. Where, in the case of some teaching hospitals, additional funds are required, the Minister has informed them—and I know this will please the noble Lord—that these will be forthcoming. Some hospitals have particular problems to overcome, as has been mentioned by, I think, the noble Lord, Lord St. Just, such as the appointment of additional staff, and these are being urgently looked at in conjunction with my right honourable friend.
The noble Lord, Lord Sandford, also raised a question which I should prefer to discuss with him privately. That was the question of authoritative guidance on cannabis. I should prefer to do that privately partly because it is slightly outside the scope of the Bill that we are discussing this afternoon; but I have some facts which I should be happy to let him have. Naturally, they are not in any way private, so they could be mentioned at later stages of the Bill if it is desired that they should be on the record. I was indeed delighted to hear the noble Baroness, Lady Horsbrugh. I am sorry I cannot give a direct reply to her question on the record of drugs. A voice behind me, from the noble Lord, Lord Stonham, tells me that this reply will be available in a moment. If the noble Lady will accept that somewhat

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unorthodox voice of Her Majesty's Government I will see whether before the end of the debate we can satisfy her.
Having had a doctor in the house, as it were—my son-in-law, who has been a general practitioner for many years and with whom I have discussed this question on many occasions—I should be the first to agree with the noble Lord, Lord Segal, and with other noble Lords who have mentioned this fact, that the drug addict is very difficult. It is perhaps more truthfully said that he is amoral rather than immoral, and in his attempt to secure what he feels to be a necessity he will not always stick to the truth. I believe all general practitioners will agree with this. I should guess, with the noble Lord, Lord Segal, that most general practitioners will welcome this Bill for that reason, if for no other. I felt that the noble Lord, Lord Segal, gave us a great deal of help, as he always does, not only by way of the valuable medical information with which he supplied us but also by way of the suggestions which he made. These, I am quite sure, will be looked at carefully by my right honourable friend, because those who have been concerned in the treatment of patients of this kind are always those best able to give practical advice.
There is only one point on which I would attempt to reply to the noble Lord, and that is on the question of vesting day for the suggested prohibition of heroin for new patients. I believe my noble friend Lord Stonham has already dealt with this point most admirably, but I add this as a further comment. Heroin is regarded as the best drug for use in certain cases of intractable pain, and it is certain that the medical profession would not accept a prohibition on the prescription of heroin for the treatment of new patients. This in some way rather cuts across the point which the noble Lord, Lord Somers, made, and as to which I felt I was going to say I agreed with him, because I know that there are doctors who claim that heroin is no longer necessary. Perhaps this is a point upon which the medical profession themselves must come to some agreement and those of us who have been on the receiving end of medical attention will know that, as a profession, they are rather like the legal profession—not always unanimous
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in their acceptance of various recommendations.
The right reverend Prelate the Bishop of Worcester, of course, echoed again the sentiments that we should all express namely, that prevention is always better than cure. I shall certainly pass on to my right honourable friend his admirable suggestions for the involvement of more voluntary people. I know from my own work in the voluntary social service field that there is a vast, untapped source of real good will available, not only in this field but also in many others. I agree wholeheartedly with him that this must also be a very real part of our work that the Bill alone is far too narrow if we leave it merely to the treatment of the known addict.
The noble Lord, Lord Amulree, was kind enough to give notice of his questions, and I therefore hope that I can give him slightly fuller replies than I have been able to give to some other noble Lords. I should first of all like to reassure him (and my noble friend Lord Stonham will repeat this, I am sure, during the passage of this Bill) that the old machinery will certainly not be removed before the new machinery is established. I should like to give him a quite categoric assurance that this will be so.
I feel that the questions which the noble Lord raised on the subject of notification perhaps need a little general comment from me. First of all, we are, of course, referring always to notification, and not to registration. The noble Lord did not in fact use this phrase, but the layman may be a little misled if we do not keep strictly to the fact that we are talking always about notification. The basic task is to identify the addict at the time he presents himself to a doctor for treatment, and that need, which arises when first prescribing for the addict, is in most cases a difficult matter for clinical judgment. Also, under the new regulations, a general practitioner will commit a breach if he prescribes heroin or cocaine to an addict for the treatment of his addiction.
Broadly speaking, there are two possible approaches to the problem of identification. One would be to rely on the addict identifying himself—for example, by an identity card, a registered number, or some other symbol of his continuing con

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dition. This would require a number of formalities. There would have to be a formal assessment, a provision for appeal, continuing reports and formalities for denotification. Procedures of this kind would be elaborate and cumbersome, in order to keep the addict's recognised status up to date. In addition—and this will be quite obvious to all your Lordships—it would be open to evasion. The Brain Committee rejected this kind of approach on the ground that registration—and I quote:
"might seem to imply that the addict is officially recognised as having a right to an approved quantity of a dangerous drug".
The other approach is to leave to doctors the task of identifying the addict, and to help by making that task as easy as possible. This was the approach recommended by the Brain Committee. That is why they recommended, and the Government accepted, that there should be an advisory panel to help the doctor who is in doubt about whether a patient is an addict.
The other help that can be given is by a central reference system, run on quite different lines from registration. The scheme of notification planned by the Government will simply indicate to the central authority that a particular doctor has attended a patient whom he considers or suspects to be an addict. Notification will allow the central authority to put in touch with the notifying doctor any other doctor who has cause to inquire about the patient he notified. Provided the central authority can identify each notified person from its records, and is in a position to refer any doctor inquiring about an identifiable addict to the doctor or doctors who last notified him, it can be left to the doctors concerned to exchange information without the central records being encumbered with details which might be medically important.
I should now like to answer the first specific question asked by the noble Lord—namely, will an addict be notified that he is being put on to the register? As I have already said, there will be no register, in the strict sense of the word, but only a list of notified names. On the question of whether to tell the patient, we believe that it is better to leave this to the doctor to decide. There are obvious dangers, of which the noble Lord will be only too well aware. If the doctor were
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to tell the patient that he intended to make such a notification the patient might be scared into thinking that it meant more than it does. This would have the effect of sending the patient "underground".
The doctor is the person in the best position to judge the implications and value of any disclosure to the patient and the need to protect both the patient and himself in the immediate circumstances. The Bill will not prevent an addict from asking the doctor whether his name has been or will be notified; nor will it prevent a doctor from giving the information to the addict. Will it be possible for the addict to appeal against his name being put on the register? As I have tried to explain, the inclusion of the name in the list maintained by the central authority will have no lasting significance and the fact of notification will be safeguarded (and this, I think, is the answer to a point raised by several noble Lords) by the Official Secrets Act.
Notification will not mean that the patient is in fact an addict: all it will signify is that a particular doctor has found, or thought, that he was an addict at a given date. If, subsequently, another doctor is in doubt about that patient and asks the central authority about him, the central authority will not say—indeed will not be able to say—that he is an addict; but will refer that doctor to the doctor who had previously notified him. There will be no need, therefore, for any appeal procedure. I wondered, as a layman, whether there is any comparable procedure in the case of notifiable diseases. If so, I feel certain that I must be registered on many lists, for I have had almost every notifiable disease there is—with a few exceptions.
The third question was: Will an addict's name be removed from the list when he is cured; and will he be so informed? As noble Lords are aware, the Home Office have maintained for many years a list of known addicts. The information is obtained from examination of the records of prescriptions kept by pharmacists and by subsequent inquiries made by the regional medical officers of the Ministry of Health. The Home Office list is constructed annually and includes the names of all addicts who have come to notice in a given year.

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The Government hope that it will be possible under the notification scheme to confine the particulars required to a minimum and to keep records uncluttered by the names of patients notified too long ago. It may be that it will be possible to construct the list on much the same annual basis as at present. This will mean that automatically the names of addicts who are cured will be dropped. The treatment centres will maintain their own records and we should hope to keep the central records up to date as regards the cures by information from that source. There will be no need to tell an addict that his name has been removed from the central list; because since its inclusion on the list in the first place is of no significance, its removal from it will equally be of no significance.
I was also asked whether the central authority register would be open for information 24 hours a day, and whether there is any danger that an addict's name will appear on more than one register. We shall be having further discussions with the medical profession about the operation of the central reference service; but our present feelings are that it will be unnecessary to maintain a 24-hour service for this purpose. But this is a matter for further study.
There will be only one central record maintained by the Chief Medical Officer at the Home Office, and we shall try to organise this so that doctors will be put to the minimum trouble in submitting notifications. The noble Lord, Lord Amulree, also inquired whether an addict who was admitted to hospital suffering, say, from gallstones (I am not sure that the noble Lord actually mentioned gallstones) would still be able to get drugs from the doctor with whom he was registered. The straightforward answer to that question is, Yes.
LORD AMULREE: My Lords, may I interrupt the noble Baroness? What I meant was, supposing that he was admitted to a hospital a long way away from where he was registered, could the doctor at that hospital give the drug, so as to avoid the patient's own doctor having to travel a long distance; or would he get into trouble if he did so?
BARONESS PHILLIPS: As I understand it—and I am subject to correction—the answer is Yes; because for medical
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reasons this patient would be in need of the drug.
I noticed that the noble Lord, Lord Sandford, inevitably and very sensibly, inquired whether extra money would be made available for opening the new treatment centres. I should like to tell him that all hospital boards are given additional money each year for development, and in general the Minister expects them to be able to finance the treatment centres from this money. It may be more difficult for the teaching hospitals whose budgets are smaller than those of the Regional Hospital Boards; but the Minister has said that if necessary extra money will be made available from a small contingency fund. The Government do not expect the provision of treatment centres to be held up by financial considerations. It will be obvious to noble Lords that, the treatment centres having once been involved as part of the service, they will then form a continuing part of the estimates submitted yearly. I hope that this will satisfy the noble Lord, Lord Sandford. If he is not satisfied I am sure that at a later stage of the Bill he will tell me so.
I was asked to tell the House something about the treatment centres. I am not certain at this stage that it would be something your Lordships would particularly wish to know. I feel—though it may not be very humble of me to say this—that often we talk too long on one subject in this House. I would therefore suggest, that at this stage of the Bill, I should confine myself to replying to questions. The noble Baroness, Lady Horsbrugh, asked about illegal sources of heroin. As it may be for my right honourable friend to note, my noble friend Lord Stonham emphasised in his speech that we have no evidence that the black market in heroin contains drugs smuggled in from abroad or manufactured illegally, as is the case in many other parts of the world. The illicit supplies are, so far as we know, derived wholly from the legitimate supplies and prescriptions and, perhaps, from forged prescriptions. This ends the note I have, but does not give the reply that the noble Baroness sought. This I will endeavour to do.
My Lords, apart from some rather minor points of criticism, I feel that there has been a general welcome to this

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Bill. There has been a wealth of professional advice tendered this afternoon. If any noble Lord is not happy with my rather inadequate replies, I am certain that during the passage of the Bill there will be ample opportunity for raising again the various points which have been raised to-day. I hope that the House will appreciate that Her Majesty's Government in this narrowly-drawn Bill are endeavouring to deal with what was rightly described by one noble Lord as a terrible trade. With that in mind, I would ask your Lordships now to give this Bill a Second Reading.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

SHIPBUILDING INDUSTRY BILL
5.10 p.m.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(Lord Shackleton.)
On Question, Motion agreed to.
House in Committee accordingly.
[The BARONESS WOOTTON OF ABINGER in the Chair.]
Clauses 1 and 2 agreed to.
Clause 3:
Grants to assist reorganisation of resources
3.—(1) If it appears to the Board that a person carrying on—

(a) a shipbuilding undertaking in relation to which, a grouping scheme has taken effect at any time after 24th March 1966; or

(b) a main engine manufacturing undertaking,

is putting, or has put, into effect a reorganisation of the resources used by him for the purpose of carrying on that undertaking and that the reorganisation is likely to lead, or has led, to increased efficiency in the use of those resources for that purpose, the Board may, subject to the provisions of this section, make grants to that person—
LORD DRUMALBYN LORD DRUMALBYN moved, in subsection (1), after "purpose", to insert:
"and that there are good prospects of the undertaking ultimately being able to be carried on successfully without further assistance of a kind provided under this Act".
The noble Lord said: The noble Lord, Lord Shackleton, will recognise where this Amendment is drawn from—it comes from the Distribution of Industry Act. In that Act it was thought fit not to give financial asistance to firms unless they showed a prospect of being able ultimately to carry on successfully without further assistance. In this case, it would seem sensible to make it a condition of giving a grant or loan of public money that it should appear to the Shipbuilding Industry Board not only that a reorganisation is taking place, or has taken place, which is likely to lead to increased efficiency, but also that the efficiency will be increased sufficiently to ensure that in the long run the group will be able to carry on without State assistance. Forming groups is not in itself a guarantee of competitiveness, or even of survival, and since public money is involved this would seem to be a quite desirable Amendment. I beg to move.
Amendment moved—
Page 2, line 27, after ("purpose") insert the said words.—(Lord Drumalbyn.)
THE MINISTER WITHOUT PORTFOLIO (LORD SHACKLETON): I am sure that any Amendment coming from the noble Lord, Lord Drumalbyn, has a respectable ancestry, and I acknowledge this one. The purpose of the Amendment is, of course, an entirely laudable one, that it would be no use if the result of carrying out this policy were not to lead to increased efficiency, and indeed to the continued viability of the firm, without continuing Government assistance. I should like to assure the noble Lord—and I hope that he will accept this for the reasons that I will give—that what he seeks to achieve is already provided for in the Bill. Under Clause 3(1) in order to qualify for a grant a shipbuilding group or an engine building firm has to be putting into effect or has put into effect a reorganisation of their resources which is likely to lead or has led to increased efficiency in their use. It is the intention that assistance given under this Bill should result in shipbuilding and engine building firms which will be able to stand on their own feet in three to four years' time.
Under Clause 1—the noble Lord might like to look at subsections (1) and (3) of that clause—the Shipbuilding Industry Board is required to exercise its

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powers, which includes powers for making grants and loans
"For the purpose of promoting the ability of the shipbuilding industry…to compete in world markets…"
A shipbuilding or engine building firm which is not likely to be able to stand on its own feet in the timescale we envisage will clearly not promote the competitive ability of the industry, and it would be no good wasting scarce money and resources upon it. It is for the firm to convince the Shipbuilding Industry Board not merely that it would like loans, grants or guarantees, or that with such assistance it would become somewhat more efficient than at present, but that with this support it would be able to get back on its own feet in three to four years' time. Unless the firm is able to do so, the Board could not, consistent with their duty under Clause 1, give the assistance which is requested.
While, therefore, there is no difference between the noble Lord and myself on this matter, I can assure him that his point is already catered for in the Bill—not, I admit, in such precise terms as he suggests, but I am sure that he would be the first to agree that we ought not to put into a Bill words which are not really necessary. Having gone into this very thoroughly with my advisers, I am satisfied that the purposes of the noble Lord are met.
LORD DRUMALBYN: I am grateful to the noble Lord. I agree that our intentions are exactly the same on this issue. Perhaps when we began to discuss this matter I ought to have said that it would be convenient to discuss Amendment No. 3 at the same time. This Amendment deals with grants and Amendment No. 3 with loans. I would merely make the point that, so far as loans are concerned, Clause 4(4) says:
"Any number of loans may be made…to the same person."
This perhaps makes it a little more difficult to see what will be required ultimately, but in view of what the noble Lord has said I think your Lordships may rest assured that this will be the object of the Shipbuilding Industry Board, and I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 3 agreed to.
Clause 4:
Loans
4.—
(2) Subject to the provisions of this section, the Board may make to any person carrying on a shipbuilding undertaking—
(b) whether or not such a scheme has taken effect in relation to that undertaking, a loan for—

(i) the provision or improvement of buildings, structures, works, plant or equipment used or to be used by him for the purpose of carrying on that undertaking;

(ii) the re-training of workers for employment by him for that purpose.

(3) Subject to the provisions of this section, the Board may make to any person carrying on a main engine manufacturing undertaking a loan for the purposes of that undertaking generally or for such purposes of that undertaking as the Board thinks fit—

(a) if a grouping scheme has taken effect in relation to that undertaking at any time after 24th March, 1966; or

(4) Any number of loans may be made under this section to the same person.
5.16 p.m.
LORD DRUMALBYN LORD DRUMALBYN moved, in subsection (2)(b)(ii), to leave out from "employment" to the end of the subparagraph, and to insert "in the shipbuilding industry". The noble Lord said: The effect of this Amendment would be that loans could be given for the retraining of workers not only as is stated in the Bill, for employment by the undertaking for the purpose of the undertaking, but also the re-training of workers for employment in the shipbuilding industry. Your Lordships will be aware that the hope is that there will be two groups formed on the Clyde and two in the North-East of England. There may, of course, be other companies which will get together, and there may also be companies which will remain individual companies.
The re-training of workers will be necessary in many cases, and it may well be convenient for the re-training to be done by one group of companies, or by one company, on behalf of other companies. In that case, the appropriate company to get the loan would be the company doing the re-training. Under this Bill it would not be possible for a company whose workers were being retrained by another company or a group

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of companies to get a loan for that purpose at all. It seemed to me that as drafted the clause is a little too restrictive, and the purpose of the Amendment is to make it a little wider. May I ask the noble Lord whether the word "workers" is entirely clear? It is not defined in the interpretation clause. In the notice in The Times today about the Confederation of Shipbuilding Unions, the word "workers" is given a much wider significance than is, I think, often given, and I should be grateful if the noble Lord would tell me exactly what is the significance of the words in the context of the Bill. I beg to move.
Amendment moved—
Page 3, line 14, leave out from ("employment") to end of line 15 and insert ("in the shipbuilding industry.").—(Lord Drumalbyn.)
LORD SHACKLETON: I was interested in the noble Lord's arguments, one of which I must admit I had not fully appreciated. I should like to give the case as I see it, but it may well be that I should like to take further advice. Basically, this clause and the particular subsection enables the Shipbuilding Industry Board to make loans to shipbuilding firms, whether grouped or not, for the retraining of workers to be employed in the firm concerned in its shipbuilding industry. The present Amendment will have the effect of enabling the S.I.B. to provide loans to shipbuilding firms for retraining workers in the industry at large whether or not they are employed by that firm and whether or not the new skills which they will acquire are required by that firm in carrying on its business.
Paragraph 551(c) of the Geddes Report, on which this provision is based, recommends the provision of loans to groups to provide funds for retraining of workers for the purpose and benefit of grouping if the cost thereof could not be covered by existing arrangements under the Industrial Training Act. Paragraph 588 also recommends the provision of funds to non-grouped firms for the purpose of retraining. In recommending that finance might be provided for retraining purposes, it is clear that the Committee did not envisage that loans should be made available for general retraining schemes in the industry—for example, as a result of technological change to retrain workers in new techniques or crafts. Their recommendation covered only that retraining
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which is made necesssary by an internal reorganisation of resources whether in a grouped or a non-grouped firm. In order therefore that the benefits of such retraining should be secured to the firm to which the loan is being made it is clearly necessary that the retrained worker should be employed by the firm for the purpose of carrying on its business.
The noble Lord made two points which I should like to look at further. He is concerned that loans may not be available for workers who need to be retrained in a firm which would not be entitled to grants. I do not think that he is correct in this, but knowing the thoroughness with which he studies legislation I hesitate to say that I am sure he is not correct. The retraining of workers in the shipbuilding industry to meet developments in the industry generally is covered by the Industrial Training Act 1964. The limited funds available under this Bill are intended to assist the reorganisation of the industry and should not be used for matters covered by other legislation.
I think this goes some way to meet the noble Lord's point. I agree that there may be difficult areas of judgment, and that technological change may occasionally be associated with reorganisation but as the Bill stands we believe that it is wide enough to give the necessary discretion to the Shipbuilding Industry Board without exposing them to requests for help which really ought to come under the Industrial Training Act. I am not sure that the noble Lord did not have a hand in passing the Industrial Training Act into law, and I should like to say to him that that is an Act which is obviously bearing good fruit. I will certainly consider this again, and also look at his point on the definition of "workers". I assume that the word is defined in other Acts. I must confess that for the life of me I cannot recall what it is. If I may deal with this point, if necessary, at a later stage, I shall be glad to do so.
LORD DRUMALBYN: I am grateful to the noble Lord. Perhaps I read the words rather more restrictively than they are intended to be read. I am still not absolutely certain that the loans would be available for the retraining of workers where the retraining was being done on behalf of another shipbuilding firm. I am glad that the noble Lord has said

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that he will look at this, and I do not propose to pursue it further now. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD DRUMALBYN LORD DRUMALBYN moved to add to subsection (5):
"which, however, shall not be withheld without assigning a reason, which the Board shall forthwith communicate to the applicant."
The noble Lord said: The point of this Amendment is that it is clearly desirable that the applicant for a loan should know why a loan negotiated between him and the Board is refused by the Minister, otherwise he does not know what to do to rephase the loan in order to make it acceptable. I assume that in the ordinary way loans will be negotiated between the Board and the applicant, and that the result will be passed on for the approval of the Minister.
Under the Distribution of Industry Act the President of the Board of Trade can approve proposals for financial aid to an applicant in whole or in part, but cannot give aid in excess of such proposals or where no such proposals are made. Here the only power the Minister has is to approve or refuse a loan. If an application is refused after it has been agreed between the Board and the applicant, without any reason being given, the applicant is bound to feel unfairly treated and aggrieved. It is difficult to see what course is open to him in such a case other than to approach his Member of Parliament and have the case taken to the Ombudsman. It would save a lot of trouble for the Department if a reason were given for a refusal of a loan.
It was stated on behalf of the Government in another place that in most cases the Minister would give a reason, but that it was possible to conceive of circumstances in which it would be embarrassing to do so. No indication was given of the sort of circumstances the Government had in mind. If it is possible to conceive of them, then the Government should be able to say what are the circumstances they conceive. Otherwise the conception is somewhat imaginary and, one may say, rather barren. There is no harm at all in the Government saying that they have refused a loan because they did not think that even with a loan the company would be viable in the long run, even if the Board thought so. Nor is
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there any reason why the Government should not refuse a loan in terms that they did not consider the status or stability of a company was sufficient to warrant a loan. I think it is right to be as frank as possible, and I think that the Government would be wise to accept this Amendment. I beg to move.
Amendment moved—
Page 3, line 38, at end insert ("which, however, shall not be withheld without assigning a reason, which the Board shall forthwith communicate to the applicant.").—(Lord Drumalbyn.)
LORD SHACKLETON: I hope that the noble Lord will not think that, because I express sympathy with his purpose but am not so helpful in my reaction, this sympathy is merely designed to calm his fears. In any case, I know that it is difficult to deceive the noble Lord by false assurances. I do not think there is any disagreement between us. The Minister hopes that he will seldom, if ever, need to withhold his approval where the Shipbuilding Industry Board wishes to make a loan under this clause. If he does withhold approval it will be in the normal exercise of his administrative discretion under the Bill. It may not be for one or more specific reasons, but on the balancing of considerations. It is argued that some of the considerations may be confidential for the time being; for example, in respect of information which might affect other firms or, indeed, other industries, or in respect of new legislation which might be under consideration. It might, therefore, be undesirable for the Minister to be under a statutory duty to give his reasons for withholding approval.
I know that it is all too easy for the Executive to protect itself in this way, but there is a further sanction, of which the noble Lord is well aware, if I understand this correctly, in the Parliamentary Commissioner Bill. It will be possible in such circumstances to ask the Parliamentary Commissioner to investigate, and for him to establish whether the discretion had been properly used. It is my understanding—but I should like this to be subject to correction—that in certain circumstances the refusal to give this permission could itself amount to maladministration. It is early days in the administration of the Parliamentary Commissioner, but it

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is in this sort of area that he could be effective. As the noble Lord said, the Minister has given an undertaking that he will normally grant this. There is the further sanction, in that Clause 8(2)(b)(iii) requires the Board in its Annual Report to state cases where the Minister has withheld this approval for grants and loans. We think that this goes some way to meeting the point of view of the Opposition.
I am still rather sympathetic towards the noble Lord, because I remember some of the discussions on the Steel Bill, where the Government were able to be more forthcoming. But this is rather an unusual, and experimental Bill. It is possible to conceive of circumstances where it might be difficult, and I have given some examples, although it is a question for judgment whether the examples I have given are wholly convincing. But I will give an undertaking that I shall talk further to my right honourable friend on this, and if for some reason it is not possible to amend the Bill in the way the noble Lord wishes, I will see whether it is possible to give an even stronger understanding in regard to this matter. As we know, the Minister is open to Parliamentary check, as well as that of the Parliamentary Commissioner. I think it is a finely balanced argument. I will certainly undertake to consider this again, although I do not wish to mislead the noble Lord into thinking that I can make a promise.
LORD DRUMALBYN: I am obliged to the noble Lord for his undertaking to give further consideration to the matter. When he is doing so, will he take into account the fact that the reference in Clause 8(2)(b)(iii), as I understand it, is not a great deal of help to somebody who has had an application refused. It may be quite a long time—a year or more—after the refusal, and I should have thought that the purpose of putting this in was rather to give a more general idea of the policy the Minister is adopting towards applications and the number of refusals that are being made than to deal with any particular refusal. Having said that, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 4 agreed to.
Clause 5 [Relief for interest on loans]:
5.33 p.m.
LORD DRUMALBYN LORD DRUMALBYN moved, in subsection (1), to leave out "being interest in respect of any period before the end of 1970." The noble Lord said: The point of this Amendment is quite simple. As the clause is drafted, the Board is able to remit only the interest payment on a loan during any period before the end of 1970. Apart from the fact that the life of the Board may continue longer than that—it may go until 1971—it may well be that a loan would be negotiated, say, in 1970 itself, or in 1969. It does not seem altogether reasonable that if a man negotiates a loan in 1967 or 1968 he can get a remittance of interest in the early part of the loan, but not if he happens to negotiate the loan in 1969 or 1970—certainly in 1970. It seems reasonable that the words,
"being interest in respect of any period before the end of 1970",
should be omitted. I beg to move.
Amendment moved—
Page 4, leave out line 6.—(Lord Drumalbyn.)
LORD SHACKLETON: On this matter, unlike the previous Amendments, I am, I fear, in disagreement with the noble Lord. I understand the purpose behind his Amendment, but I hope I can convince him that this would be a step which could be counter-productive in regard to the purposes that we both have in mind. Under Clause 5(1) the Board's power to give relief of interest applies only to interest accruing up to the end of 1970, and, as the noble Lord said, there is no provision for this period to be extended, even if the Shipbuilding Industry Board's life is extended. The effect of accepting this Amendment would be to enable the Board to give grants in relief of interest throughout its life, including any period up to the end of 1971 for which that life is extended. The Geddes Report, in paragraph 551(a), recommended that the Shipbuilding Industry Board should be empowered not to charge interest on loans in the first three years; that is to say, in respect of interest due not later than the end of 1970. The present Amendment could result in loans being eligible for remission of interest for a period of four years or more and is. therefore, contrary to the recommendation of the Geddes Committee.

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The remission of interest, as I am sure the noble Lord will agree, is a valuable additional assistance to the industry and therefore an incentive, and the sooner a company qualifies for and receives a loan, the longer the period over which it will be eligible for relief of interest. This provision is intended as a further incentive to get on with reorganisation as quickly as possible. By extending the period during which grants could be made in remission of interest, the Amendment would to this extent reduce the incentive and blunt the sense of urgency which it is vital to maintain in the industry.
The noble Lord may say that this is not significant, and it is more important to be able to give this extra incentive afterwards. But I am sure he will agree with me that the shipbuilding industry is facing serious and urgent problems. The level of orders taken by the industry last year and during the first four months of the present year, both from home and overseas owners, was very low. Many of the firms in the industry suffer serious financial problems. It is therefore vitally important that the industry should take the necessary steps—by the grouping of firms, reorganisation of resources without delay, and so on—to become competitive.
The power of the Shipbuilding Industry Board to provide the loans is the incentive to grouping and reorganisation; the power to provide grant in remit of interest is a valuable additional assistance to the industry. And again I stress the importance of getting on with it quickly. The sooner it qualifies and receives a loan, the longer the period over which it will be eligible for interest. To be effective, such a bonus scheme must be open for a limited time only. The Geddes Report recommended a period of three years, and this has been followed in the Bill. The Amendment could mean that the time for which the scheme is open was extended to four years or more, and this would reduce the incentive and blunt the sense of urgency which in present circumstances it is so vital to maintain in the industry. Although the noble Lord knows I am not anxious to pressure him on this matter, it is so vital that almost every day counts in this matter. So I am afraid that I must disagree with him. This would not serve a valuable purpose and could even be a disincentive.
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It is, of course, arguable what period it should be. We could pick on a number. It certainly was the considered view of Geddes that it should be three years, and I see no reason to alter that; although I can see reasons against it. I stress that the firms who are considering this now have to move quickly, and anything which suggests something to the contrary would. I think. be damaging. So, reluctantly, I must disagree with the noble Lord.
LORD HAWKE: I rather wonder whether the noble Lord and the Government are not trying to ride two horses on this particular issue. He has mentioned the deterrent, the sense of urgency and using this as a deterrent to encourage people take their loans quickly. But, normally speaking, loans of this sort sometimes have an escape clause on interest, on the ground that the loan has not borne fruition for a certain number of years. I should have thought that was a much more reasonable way of looking at these loans, and that the proper course would be to use a time inducement by saying that there would be no loans available after a certain period: but always say that the Government in any case can remit the interest for the first three years while the loan is beginning to bear fruit.
LORD SHACKLETON: I did not use the word "deterrent"; I used the word "incentive"—
LORD HAWKE: Incentive, yes.
LORD SHACKLETON: —though what I am concerned with here is the deterrent effect—anything which suggests that it is not urgent, when almost every day counts. I agree that there is force in the noble Lord's arguments in general terms, but we are dealing with an unusual situation. This "package" has been carefully thought out. It has been discussed, and indeed I have myself argued the case, as I always do. I always try to argue the case for the opposition before I come along to argue the case against the oppossition. And I am convinced that the stand we have taken on this is right.
There are, of course, other provisions in the Bill with regard to funding in certain matters, and we shall come on

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to these in relation to possible investment in the company. But I think that in this particular context I am satisfied, although one could argue as to which year would be the right one. The noble Lord might even argue that it would be better to have no limit, but I see no particular virtue in adding the extra year. It is not the case that we have just "thought of a figure" and are sticking to it. This is the one that has been recommended, and I am satisfied that it is the right one.
LORD DRUMALBYN: I wonder whether the noble Lord would take this into consideration. There are, of course, under Clause 4, two separate aspects of loans. First of all, there is the loan for acquiring shares. On that, I can see that one can deal with the financial aspects fairly quickly. It may well be that the grouping first arranged will not prove to be the best one. There may be within the next two or three years adaptations of the grouping, and this may call for further financial assistance. So it may well happen that by, say, 1970, in three years' time, some further acquisitions or expansions, amalgamations, mergers and the like, will have to be considered.
The second aspect is that there are the physical consequences of the regrouping, and these may take a good deal of planning. There is the question of building structures and works, and so on, and also the point that I have already mentioned, that under Clause 4(4) the Bill envisages that any number of loans may be made to the same person. It may well be that a series of loans will be initiated over the same period. That being so, however great the incentive required in order to encourage people to get on with the work, it must be envisaged that there will be a succession of loans throughout the period. It does not seem to me entirely sensible that it is only the loans in the early part of the period that will be entitled to remission of interest. I do not propose to press this matter further now, but I should be grateful if the noble Lord will look at it again. In the meantime, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 5 agreed to.
Clause 6:
Assistance by acquisition of share
6.—
(3) The Board shall not dispose of any shares acquired by it by virtue of this section except with the approval of the Minister.
5.47 p.m.
LORD DRUMALBYN LORD DRUMALBYN moved to add to subsection (3):
"if the sale of the shares would realise a sum less than that subscribed by the Board for them."
The noble Lord said: I beg to move Amendment No. 6. The point of this Amendment is simply this. Obviously, if there were going to be a loss to the Treasury there would be a good deal to be said for requiring a Board which is to be given the latitude we understand this Board is to be given to apply to the Exchequer before disposing of the shares. But I should have thought that neither the Exchequer nor the taxpayer would have objected in any way to the shares being disposed of at a profit. Therefore, if a profit were available on the shares it would seem unreasonable to deny the Board the discretion in this matter of disposing of the shares at a profit. The point is a simple one. It does not seem to me that there is any reason why the Board should not reduce its holding if it is advantageous to do so. I beg to move.
Amendment moved—
Page 4, line 27, at end insert the said words.—(Lord Drumalbyn.)
LORD SHACKLETON: In this case the Government have thought it desirable to provide under this clause that the Shipbuilding Industry Board should have the power to acquire shares in shipbuilding firms. Of course, one of the reasons is that if the firm concerned becomes profitable the public should be able to participate in the profits which accrue, and if a firm becomes, or looks like becoming, so profitable that the value of its shares in the market rise above their issue price, it is right that the Government should have the option of retaining those shares so as to secure for the public purse a share of the profits which the public investment has helped to make possible.
If we give the Shipbuilding Industry Board freedom to dispose of shares and relieve it of the obligation to secure the

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Minister's approval for disposing of such profitable shareholdings, it will deprive the Government of this option. One may argue on this that it is unlikely that the Shipbuilding Industry Board would not behave responsibly in this matter, and it certainly would be argued that it would not go for a quick profit merely to make the final report look good. But, unlike other bodies which are concerned regularly with investment, this is essentially a short-term Board. It is an unusual situation, and I think that the Minister must, in the end, be responsible. After all, he is going to take over the holdings after the Shipbuilding Industry Board is disbanded and I do not really see any virtue in putting this responsibility on to the Board.
Indeed, although the Board's advice can be vital in this matter I think this is a power which should ultimately rest with the Minister concerned. I can see there are dangers of adding more and more responsibility on to Ministers, and if this were a continuing Board it might be a different situation. I would not wish to argue that in the case of the Industrial Reorganisation Corporation, they have these powers, but this is a rather unusual case and therefore I think it is better to leave the responsibility with the Minister who, in any case, will have to continue that responsibility after the Board is wound up.
LORD DRUMALBYN: I do not attach a great deal of importance to this Amendment and in any case one would recognise that the Board would be likely to be in close contact with the Minister. I do not think I need press this Amendment and therefore I beg leave to withdraw it.
Amendment, by leave, withdrawn.
On Question, Whether Clause 6 shall stand part of the Bill?
5.52 p.m.
LORD DRUMALBYN: As the noble Lord is well aware, this is a matter on which we cannot see eye to eye on our side of the Committee with the Government's point of view, but the particular reason why I have put down an Amendment to leave out Clause 6 is that on the Second Reading the noble Lord, Lord Beswick, expressed sympathy with my view that it would be wrong for the Board or the Government to make it a
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condition of giving financial assistance that part or all of the money should be advanced against an issue of shares, or that the loan should be convertible into shares at the option of the Board or, after 1970, at the option of the Minister. I hope, therefore, that the noble Lord is now able to tell me that the Government share the noble Lord's sympathy and that neither the Board nor the Minister will insist on having shares in the equity as a condition of giving financial aid.
It is Government policy that the Geddes recommendations that companies should reorganise themselves into groups should be implemented. It would be quite wrong if that policy were to be frustrated in any instance by insistence on the part of the Board or of the Minister that the applicant should concede shares in the company as a condition of getting the money, even if that was acceptable to the recipient of the money. It seems to me it would be equally wrong to bring the full force of Government pressure to bear on a group or a company to make them issue shares against their better judgment. I personally have no objection in principle to the taking up of shares in a company by the Board or the Government, provided it is done with the full consent of the company given in accordance with the Companies Act: but it must be a matter for agreement between the parties and must not be something imposed by one party upon the other.
I would repeat what I said on Second Reading: that at the same time there are obvious practical difficulties. If the Board or the Government have an interest in the equity of one group and not of others, or have a greater such interest in one group than in others, it would be idle for the Government to delude themselves into thinking that actions would not be influenced by that interest. I think we are all entitled to assume that Ministers or Government-appointed Boards and civil servants are human and that they do not act differently from any other group of managers who have particular interests to safeguard. To claim that they do is either self-delusion or hypocrisy. Even if ministers and civil servants sprouted wings and, by virtue of belonging to the British Government, became de-humanised, as it were, the remainder of Her Majesty's subjects could

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scarcely be expected to believe in such transformation; and it seems to me wholly undesirable that the Board or the Minister should be thought to be prejudiced in these matters by reason of an interest in the equity in favour of one group and against the rest. I hope the Government will think again about this matter, but the main point I want to establish is that, whatever may be thought of the merits or demerits of this clause, it will not be used oppressively; that is to say, it will not be used in the way of denying a group or company the financial benefits of the Bill unless a share of the equity is conceded in return.
LORD SHACKLETON: Let me give the best assurance I can that this clause will not be used oppressively. It is always impossible to guarantee everything in life, but it is certainly not the intention of the Government that it should be used oppressively, and it is not the intention of the Shipbuilding Industry Board. I should like to give rather a full reply to the noble Lord because I think it is important, although I cannot meet him on this matter—and I do not think he expects me to—so far as leaving out the clause is concerned. On the other hand, it is important that there should not be anxiety or misunderstanding about the intentions behind it.
First of all, let me say that I do not think we ought to attach overmuch importance to this particular clause. It seems to me perfectly proper that the Government, like any other provider of capital, should be enabled to invest in the particular company, and we have seen developments along these lines in other forms of public company. The framework was made—I cannot remember whether it was by this Government or the previous Government. I think the previous Government were interested in the idea of taking equity in one of the airline companies. Clause 4 empowers the Shipbuilding Industry Board to provide shipbuilding and engine firms with capital in the form of loans and in certain circumstances for the purposes described. This enables the capital under Clause 4 to be made available in forms other than a simple loan. First, the Shipbuilding Industry Board is enabled to make a loan on terms which provide for the debt to be discharged by its taking up new shares
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issued by the borrowing company, and, secondly, the Shipbuilding Industry Board is enabled, instead of making a loan, to take up new shares in the first place.
It is intended that the loans made under Clause 4 should be at the Government credit rate. Clause 5 enables the Shipbuilding Industry Board to make grants in relief of any interest payable up to the end of 1970, and this clause may result in capital being made available on very much more favourable terms than are obtainable commercially. The Shipbuilding Industry Board may then be in the position of an investor putting money into a new or reconstructed business without expectation that the investment will pay off immediately. But whereas the investor would expect to benefit later as the business became profitable, the return to the Exchequer under the Clause 4 loan will continue to be limited to the Government credit rate at the time the loan was made. In those circumstances the Government considered that the Shipbuilding Industry Board should have the additional options provided by this clause and thus have normal commercial freedom to negotiate with the undertaking seeking capital about the form in which this capital should be provided.
The noble Lord was worried that this procedure might be used too oppressively, and might in certain circumstances be used to deny a loan that would otherwise be desirable. The only reason, I should have thought, for resistance by a company in such circumstances would be the anticipation of a much higher rate of profit than the interest which otherwise they would pay. I really do not see why, in these matters between a willing lender and a willing borrower, this should not be the subject of ordinary negotiation. The first advantage of this proposal is that the Shipbuilding Industry Board could, in suitable circumstances, ensure that the public purse, from which the capital was provided, could participate in the profits which might accrue later to the borrower as his efficiency and profitability increased. Otherwise the return to the Exchequer, which initially provided the money at specially favourable terms, and possibly also with grants in relief of interest, would be limited for the period of the loan to the Government credit

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rate at the time the loan was made. If, as is hoped, the profitability of the enterprise rises above this interest rate, the benefit would go to the private investor, and the public would be precluded from participating in the profitability which its provision of capital had made possible. For the life of me, I cannot see any reason, other than the fears expressed by the noble Lord, why there should not be this provision and why the public should not benefit from their own investment. They, after all, are providing this help, and we all agree that this help is necessary. I do not think the noble Lord seriously disagrees that the Government and the taxpayer should benefit in this way.
This clause would enable the Shipbuilding Industry Board in effect not to expect any return for a period extending beyond the end of 1970. This could be done in certain circumstances, but this could be a mixed blessing. Clearly borrowers with little confidence in their own long-term profitability could see it as a way to secure what amounted to loan capital at little or no interest, and the Government would not expect the power to be exercised in such a case. This is not intended to prop up companies which cannot stand on their own feet. It is doubtful whether a company anxious to have capital on those terms for this reason would be a suitable recipient even for a loan. While the Shipbuilding Industry Board may be as sure as they can be that a particular undertaking has excellent prospects of becoming profitable, it may be uncertain as to the precise timing, or the Shipbuilding Industry Board may in the case of a second stage reorganisation, starting possibly in 1968, reach the view that the company could not be expected to pay interest on the capital quite as soon as the end of 1970. In that event the provision of capital under this clause might not be just a safe option for the borrower but an arrangement which has eventual financial advantage both to the undertaking and the Exchequer.
Thirdly, the Shipbuilding Industry Board might consider it should take a more direct interest than is normally taken by a provider of loan money in the steps taken to develop the management of a particular enterprise. It is true that the Shipbuilding Industry Board has other powers, such as that of giving
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or refusing grants under Clauses 3 and 5, and recommending guarantees under Clause 7, but these are essentially in the nature of vetoes exercised from the outside, and the Shipbuilding Industry Board may feel it could contribute more as a participant in the undertaking's equity. Indeed, there are signs, as I know, that this is already happening in order to forward some of the progress that is necessary.
This clause, therefore, provides the shipbuilding industry with certain options to meet a changing situation, and it is subject to two limitations. The cost of any shares acquired will be taken into account for the purposes of the ceiling on loans under Clause 4, so that loans and share acquisitions together cannot exceed £32½ million. further, the Minister must approve the acquisition or disposal of shares just as he must the provision of loans under Clause 4, and since the cost of any shares acquired will he met from voting money under Clause 10(2)(a) and subsection (7), there will be the usual Parliamentary control.
The noble Lord suggested—and this was also suggested in another place—that the Shipbuilding Industry Board should not be provided with this option since their competitors would be bound to suspect that the Shipbuilding Industry Board would be more favourably inclined to a firm in which it had an interest, whether or not the suspicion was justified. The option is between an equity share or a loan, possibly for as long as 15 years. In either case the Board will have a powerful interest in the firm concerned. The fact that somebody has loan capital in a firm does not alter the fact that the Board is greatly concerned with the firm's progress, and it is doubtful, therefore, whether the interest would be greater if there were equity participation instead of a loan.
I would never accuse the noble Lord of unworthy suspicion, but I really think this is not a very meaningful suspicion, and it would certainly not be the intention of the Shipbuilding Industry Board to behave in a way in which they showed particular favouritism, or were more inclined to make a loan because of the return upon it. They will have to judge this within the terms of the Act, and it seems to me proper to provide that the public should get the benefit, if benefit there should be, and that it should not be

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transferred to the private investor. I would say this is a very happy and balanced arrangement. I apologise to the noble Lord for the length of the reply.
6.8 p.m.
LORD DRUMALBYN: I do not think the noble Lord need apologise at all. I think he has given a much better justification of this particular clause than has been given before. Indeed I go so far as to say it was because of the way in which the Government approached this clause in another place that I put down this particular Amendment, because it was said, not once but several times, that this would be at the choice of the Board, in consultation with the Minister, and not—and this was the point—at the choice of the person who was going to receive the money. The noble Lord, in his justification of it, has made it fairly clear (and this of course may be so) that it may be to the advantage of both parties. What I am saying is, accepting that we have to have this clause, are we assured that it will be used only where it is patently to the advantage of both parties, and not just to the advantage of the Government; in other words, can we be assured that the Government will not deny financial assistance unless it is taken in a certain way. I think the noble Lord has answered that question in the affirmative, unless I am mistaken. I hope he has.
LORD SHACKLETON: I am sorry if my eloquence has had an even wider effect than I intended. Here is a group wanting certain support and they get it on certain terms which will be judged best for the industry. But clearly it is arguable that if people think they are on to a good thing, and loans they are going to make will bring in a good return in a few years' time, it may be that they would prefer to have it at loan capital at less than commercial rates.
It seems to me that the public interest must be respected in this matter. It is not a question of harrassment or using a stick; it is a question of arriving at a satisfactory agreement and a satisfactory negotiation. But I should not like to suggest that a firm will be entitled to loans regardless of what the prospects may be.
I hope that I have given a rational explanation. I am sure that this will be conducted in a sensible and negotiating
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way. I am sure that the Shipbuilding Industry Board will be reasonable. Equally, the companies concerned must realise that it is right that they should not get something for nothing. If there is some equity profit and there is perhaps convertible loan stock, or whatever it may be, I do not think they will necessarily want to take the equity. I do not know what form it will take, but we will say that it will take the form of convertible loan stocks. To my mind, it would be desirable that in this case the lender should not be more handicapped than any other big institutional lender. This is a considerable, if I may use the term, bailing out of private enterprise, and it seems to me that private enterprise should reasonably pay what they would pay to others, bearing in mind already the favourable terms of the Government.
LORD DRUMALBYN: I do not think I can reasonably dissent from what the noble Lord has said, except perhaps in one particular to which he almost returned in his second reply. At an earlier stage he said that the only reason for resistance to the suggestion that shares should be taken up by the Board would be the anticipation of much higher profits for the existing shareholders than if the assistance were given by way of loan. I do not believe that that is so. I think that there are other reasons, reasons of control and management, which would lead people, companies or groups to be not altogether favourably disposed towards the acquisition of shares by the Shipbuilding Industry Board or the Government. I think that one has to take that into account.
But I agree that a balance must be reached, and I hope that the ventilation of this matter in Committee to-day will to some extent enable the industry to be reassured that they are not going to be forced against what seems to be their will and their interest and, in some cases they may think, common sense, to issue shares in return for assistance, instead of taking it by way of loan, where taking it by way of loan would seem to be just as beneficial to the Government and to the taxpayer. In other words, I hope there will be no doctrinaire approach on either side in this matter.
Clause 6 agreed to.
Clause 7:
Guarantees in connection with shipbuilding Guarantees by Minister
7.—(1) Subject to the provisions of this section, the Minister may, with the consent of the Treasury, guarantee the payment by any person who is an individual resident in, or a company incorporated under the law of any part of, the United Kingdom, any of the Channel Islands or the Isle of Man of any sum payable by that person in respect of principal or interest under arrangements (whether by way of loan or otherwise) entered into by that person for the purpose of financing—

(a) the construction to the order of that person in a shipyard situated in the United Kingdom of a ship of not less than one hundred tons gross tonnage; and

(3) No guarantee shall be given under this section except on the recommendation of the Board, and the Board shall not make such a recommendation unless it appears to the Board—

(a) that the person carrying on the shipbuilding undertaking comprising the shipyard in question—

(i) has since the date of the commencement of this Act put into effect a reorganisation of the resources used by him for the purpose of carrying on that undertaking (including a reorganisation begun but not completed before that date); or

(ii) is making satisfactory progress in the preparation of plans for, or in putting into effect, such a reorganisation as aforesaid,

being a reorganisation which has led, or is likely to lead, to increased efficiency in the use of those resources for that purpose; and

(b) that the carrying out of the order in question in that shipyard is consistent with, or will contribute to, that increased efficiency and will secure that use is made of resources which are then or will shortly be available and are otherwise unlikely to be used.

6.15 p.m.
LORD DRUMALBYN LORD DRUMALBYN moved, in subsection (1)(a), after "construction" to insert "conversion, adaptation or substantial modification". The noble Lord said: This is an important Amendment, and it has the backing of both shipbuilders and shipowners. After "the construction" this Amendment would add the words, "conversion, adaptation or substantial modification". The paragraph would then read:
"The construction, conversion, adaptation, or substantial modification to the order of that person in a shipyard situated in the United Kingdom of a ship of not less than one hundred tons gross tonnage."
Here we are dealing with the giving by the Minister of guarantees under Clause 7. I am told that unless this Amendment is made, in the course of the next year or two British shipowners will have to dispose of some ships to foreign buyers, if they can find any, or alternatively have the work done abroad. I quite accept that ship repairing has to be excluded from the Bill. But conversion and adaptation to a new kind of use seems to be markedly different from repairing or normal overhaul: the major conversion of, say, a passenger ship to a one-class ship, or major conversion of a freighter to make it suitable for containers or the process of what I believe is called "jumboisation". If it is a fact that British shipbuilders could be covered under the Export Credit Guarantees for such work of foreign shipowners, why on earth should they not be covered by this clause for British shipowners? But even if they cannot be so covered, there seems to be a strong case for keeping fitting out yards occupied with conversion work, especially where reorganisation is in process, if there is no other work to do in the lifetime of the Shipbuilding Industry Board or at any particular interval, rather than let the work or the ships go abroad into foreign ownership. It seems to me that there is a strong case here for widening the clause and allowing guarantees to be given, not just for construction, but also for major conversions, for adaptations or substantial modifications. I hope that the noble Lord will be able to see his way to conceding this Amendment. I beg to move.
Amendment moved—
Page 4, line 37, after ("construction") insert ("conversion, adaptation or substantial modification").—(Lord Drumalbyn.)
LORD SHACKLETON: The noble Lord has helped me, and I shall not attempt to explain his Amendment because he has explained it quite clearly. Even the way in which he used that unfortunate word "jumboisation" gives one confidence. Of course, the cost of such a process certainly could be more than the cost of building a ship. It could go up to £1 million or £2 million. There is a border line between shipbuilding and ship-repairing and it is difficult to delimit. I have already mentioned one border line in relation to this process

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to which the noble Lord has referred. There is another, that ship repairing can be carried out not only in a repairing yard which is part of a shipbuilding concern, but actually in a yard normally used for shipbuilding. Indeed, in the case of a major ship repair or conversion job, the shipbuilding yard may be the more appropriate.
This Amendment seeks to extend the clause, which is concerned with shipbuilding orders; that is, orders relating to the construction and fitting out of a ship. There are problems, some of which are awkward; one of which, of course, is this problem of definition. Conversion, adaptation and modification are not exact terms. Quite small jobs on quite small ships can include an element of conversion or modification, and the only practical way of drawing a distinction would almost certainly be to provide for a minimum contract price, to make the conversion or modification job with a contract price exceeding £500,000 eligible. That is an example.
A more important problem is that, although there is evidence that ship orders by British owners are going abroad because of the interest disparity which the clause is designed to overcome, I am sure there is no such body of evidence that ship conversion jobs are going abroad for this reason. I am very willing to consider any further evidence on this, but if it is argued, despite the absence of any body of evidence, that the extension of this provision to conversion or substantial modification jobs would have an effect on the placing of the orders, then the major difficulty becomes clear. Even large conversion or modification jobs can be carried on in ship repair yards which are not part of shipbuilding groups. If, in order to qualify, the orders had to be placed either in a shipbuilding yard or in a yard belonging to a shipbuilding undertaking, then it would be most unfair discrimination against ship repair undertakings which are not in a shipbuilding group, because it would tend to divert business from one concern to another and, in effect, to draw what is ordinarily regarded as ship repair work from specialist ship repair concerns to shipbuilding concerns.
To sum up, even if the problem of definition could be overcome, and if there were evidence that disparity in credit
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terms was having the same effect on ship repair as it has on shipbuilding, the Government do not think they could extend this clause to cover ship conversion without extending it, and possibly the Bill as a whole, to cover assistance to the ship repairing industry. Therefore, reluctantly—although one always tries to do everything that is possible—I must say that I think this inevitably goes beyond the purpose of the Bill, and it certainly goes beyond the financial Resolution, which clearly I cannot discuss. I therefore hope that the noble Lord will not press his Amendment. It has, as he knows, been very carefully considered by the Government, and there have been discussions. I should not like to say that this is just a "good try", as I see the force behind it; but I do not think that it is strong enough to amend and widen the Bill in the way he suggests.
LORD MITCHISON: Before "jumboisation" is put into the Bill, could we be told if it means to prevent a ship from being a white elephant or to make it one?
LORD DRUMALBYN: I do not know whether the noble Lord's noble friend would like to answer that question; do not think I should venture to do so.
The noble Lord has left one very small chink open to me to see if I can get information which would satisfy him, although I think we all recognise the difficulties of definition involved. Before we part with this particular point, I wonder if I could ask him one other question. Clause 7(1)(a) deals with the construction of a ship, a complete ship. I believe it is sometimes the case that a shipyard will construct a whole section of a ship—the middle section or something of that kind—and I should have thought that considering this is clearly a shipbuilding job, it should be possible to get the assistance envisaged for that kind of operation, even if assistance for adaptation and conversion were not available. I wonder whether the noble Lord would help us a little further on this. I imagine that, whatever may be said about the financial Resolution, it would probably be possible to bring that within the financial Resolution. If not, I have no doubt that it will be possible to make the necessary Amendment, if the other place should think fit. I do not know

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whether the noble Lord opposite is going to add to this discussion, because he knows a great deal about these matters. But, unless he wishes to do so, at this stage I ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
6.26 p.m.
LORD DRUMALBYN LORD DRUMALBYN moved, in subsection (3), to leave out from first "Board", to the end of the subsection. The noble Lord said: The effect of this Amendment is to leave out all the various conditions which have to be observed before a guarantee can be recommended by the Board. I would concede at once that there are obvious arguments in spelling out for the Board the conditions on which it should give or withhold guarantees. My objection is not to the spelling out of the conditions, but as to the conditions which are spelt out. It seems to be unfair for the Bill or the Board to discriminate between British shipbuilders in a way in which E.C.G.D. does not discriminate.
If a foreign shipowner places an order for a ship, the guarantee does not depend on whether the order is placed with the shipbuilder who is at present reorganising or with one who is not. It is very odd that it should do so if the order is placed by a British shipowner. The clause has departed a long way from the Geddes recommendations, and it appears that the Bill was held up for a considerable time to enable the clause to be worked out. Naturally, the clause is supported by those shipbuilders who intend to reorganise, but surely, if there is to be discrimination, the guarantee should depend on the efficiency of the shipbuilder and his ability to make a profit at competitive prices, and not whether he has to reorganise to do so.
One could really take this argument very much wider and say that in the shipbuilding industry one is dealing with an entirely international industry, and ask whether those who build ships in this country should not receive credits on the same basis as is available to shipowners if they go abroad for the same order. The point is that shipowners should not be driven abroad to order from foreign shipbuilders if they can get the ship built in this country on the same terms, apart from the credit terms. Yet in certain
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cases this is happening and shipowners are being driven to order abroad merely because of the credit facilities given and guarantees attached. I should have thought this was the right way to have tackled the matter rather than try to attach it as an additional incentive to encourage people to reorganise. Whether they do so or not, it seems to be only fair and reasonable that shipowners should not be deterred from ordering in any particular British shipyard because the same terms which they can get if they order a ship abroad are not available to that particular British shipyard. I beg to move.
Amendment moved—
Page 5, line 2, leave out from first ("Board") to end of line 21.—(Lord Drumalbyn.)
LORD SHACKLETON: As the noble Lord has pointed out, subsection (3) of Clause 7 provides that the Minister shall not give a guarantee except on the recommendation and in accordance with the criteria, and the criteria is spelt out clearly, and it seems to me to be desirable. In recommending guarantees, the S.I.B., in the exercise of any of its powers, must consider whether the action it recommends would promote the ability of the shipbuilding industry to compete. The noble Lord seeks to delete the detailed criteria. He argues that they are in some degree contrary to the Geddes Report and could be used with unfair discrimination against shipbuilding firms which did not need reorganising. It is the contention—and I know no one connected with the Shipbuilding Industry Board who would say otherwise—that there is no shipbuilding firm in the country which does not need reorganisation. Of course, the situation has changed very considerably since the Geddes Report was published. In certain respects the change works in support of the noble Lord's argument; namely, the rather desperate situation and the tremendous decline in orders which have led to the Government's producing so very much bigger a scheme for £200 million.
But there is, of course, a difference from loans obtained under the Export Credits Guarantee Department, which the noble Lord realises are guaranteed by the Department, though they are provided from commercial sources. This money comes from the Exchequer. Again, while Geddes did not specifically recommend

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that loans might not be made in accordance with these criteria, he considered that preference should be given to reorganisation. The urgency of the situation and the certainty of those concerned that reorganisation and regrouping virtually everywhere are going to be necessary, have made the Government face this squarely and insist on applying these criteria.
LORD DRUMALBYN: May I intervene for one moment? Is the noble Lord right in saying that the money which is to be guaranteed comes from the Exchequer? Are we not confusing two sets of loans here? Because the loans that are to be guaranteed in this case are the loans to be made by banks to the shipowners in periodic payments.
LORD SHACKLETON: Yes. I beg the noble Lord's pardon. I know that if ever I go wrong the noble Lord can always be relied on to put me right in the nicest possible way. I would withdraw from that argument.
Let me look more closely at my brief on this. The arrangements under this clause are temporary, and the guarantees can be given only on the recommendation of the S.I.B., which will be dissolved at the end of 1970, or possibly in 1971. The real difference—and this, I fear, is where I went wrong—apart from the technicality that the loans come from commercial sources rather than from the Exchequer, is that the Geddes Report envisaged a modest ceiling. I must apologise to the noble Lord for getting that wrong. But, even so, this does not significantly alter my argument, that the whole purpose of this Bill is to stimulate reorganisation, and it is the view of the Government that these criteria are necessary and need to be specifically stated.
At one stage I considered whether these criteria were necessary, and whether Clause 1 covered the point. But after discussion it is quite clear that these are the criteria which we want to apply, and we want to apply them specifically. Whereas there could be a certain argument on justice in this matter, I do not believe that any real issue of this kind arises. The reorganisation will be necessary and will come about, and it will be of a kind that it is vital we should proceed to as quickly as possible.
LORD DRUMALBYN: I am obliged to the noble Lord, but when he looks very closely at the conditions he will see that they are very tight. The person must have:
"since the date of the commencement of this Act put into effect a reorganisation".
It is not just that he has to be contemplating it; he must have already put it into effect. It may well be that in the meantime, before the reorganisation has been put into effect—
LORD SHACKLETON: I do not think the noble Lord is quite correct. The paragraph goes on
"or … is making satisfactory progress in the preparation of plans".
Perhaps on this occasion I have been able to correct the noble Lord.
LORD DRUMALBYN: I am obliged to the noble Lord. As he said, the paragraph says:
"is making satisfactory progress in the preparation of plans for, or in putting into effect, such a reorganisation as aforesaid".
But it may be a very difficult matter to judge how far a shipbuilder has got in his plans. I should like an assurance from the noble Lord that, so long as a shipbuilder has signified his intention of going ahead with plans and has indicated that he is doing something in that direction, a guarantee on a ship which he is to build will not be refused in a case of that kind. It is very important that this should not be regarded in too tight a manner; otherwise we may find that orders which could have kept a firm going will go elsewhere, and the firm may go out of business altogether before it has even been able to lay the basis of the plans. I hope that the noble Lord will give us an assurance that this provision will be interpreted in the widest possible manner.
LORD SHACKLETON: I am not sure that the argument which the noble Lord has advanced does not weaken his case. If the firm is in danger of going out of business, the reorganisation or making of plans is all the more necessary. If it is in danger of going out of business, and has not even started planning for the future, it may not be a suitable recipient of this help. But here again I must stress that this is part of the package and, as I understand the position, there is a great deal of

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activity towards reorganisation. So far as I know, of the requests put forward for guarantees (of course, the requests cannot yet be accepted because the Bill has not been passed), the Shipbuilding Industry Board expects to agree every one; and there are other ships under consideration.
I can see the anxiety of the noble Lord, but I must stand on the principle. However, I should be very willing to go into this a little further, and perhaps give a little more information on it at a later stage of the Bill. Certainly I can make no promise, nor give any undertaking of the kind for which he has asked; nor do I think it would he proper to do so. But I may be able to make him a little happier, which may also relieve other people's fears. But we must stand firm on the principle.
LORD DRUMALBYN: I am grateful to the noble Lord. I take the view that if a firm is going to remain in business it must get orders, and that that has an even greater priority than reorganising. There is no point in reorganising unless the firm has orders in hand and has something to get on with. But in view of what the noble Lord has said, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 7 agreed to.
Clause 8 [Reports and accounts]:
6.40 p.m.
LORD DRUMALBYN: This is a minor, probing Amendment put down to discover whether the statement of "grants" in the annual report is to include remission of interest on loans, which under Clause 5 is to be treated as grant. I beg to move.
Amendment moved—
Page 6, line 4, at end insert ("including any such grant as is referred to in subsection (2) of section 5 of this Act,".—(Lord Drumalbyn.)
LORD SHACKLETON: I realised that this was a probing Amendment. As I understand it, all the grants provided in the Bill are covered, and there is therefore no need to itemise this particular kind of grant. So I think the noble Lord has achieved his purpose.
LORD DRUMALBYN: I am much obliged. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD DRUMALBYN: The reason for putting this Amendment down is because it seemed to me that a mere statement of loans made is not very informative unless one also knows what is the rate of interest at which, and the period for which, each loan is made. I recognise that the terms of the loan may be complicated. Nevertheless, the information asked for in the Amendment should help Parliament and the Press without misleading them in any way. I beg to move.
Amendment moved—
Page 6, line 4, at end insert ("and the rate of interest at which and the period for which the loan is made.").—(Lord Drumalbyn.)
LORD SHACKLETON: I entirely agree with the noble Lord. He is asking something that is reasonable, and I do not think there can be any objection to it. I would have been inclined to accept this in principle and to suggest that another Amendment should be put down at Report stage. I am willing to consider this with the noble Lord, Lord Drumalbyn, and any other noble Lord who is interested, certainly before Third Reading, when I think we should also be able to amend it. If I gave the noble Lord an absolute assurance that the Government would—I hesitate to use the word "instruct", because I am not sure without checking it how far they can give a precise direction on this—but would certainly procure that in some way the Shipbuilding Industry Board include this information in their annual report, I wonder whether that will satisfy him. In other circumstances I should have preferred, as would the noble Lord, to put this in the Bill, and certainly if the Shipbuilding Industry Board were going on for a long while then I think it should be framed in legislation. But I hope that, having given the assurance that it will be put in, this will meet the noble Lord's wishes. He might wish to consider that aspect of it further; but certainly I agree with him that this is a worth while objective.
LORD DRUMALBYN: Naturally, one always likes to have things of this kind put in a Bill if it is at all possible, but

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we are in the difficulty, which I completely recognise, that the industry is very anxious that the Bill should go through as quickly as possible, and one does not want to hold it up in any way at all. I am not quite certain how long it takes for another place to make an Amendment, and if on inquiry the noble Lord were to find that this could be dealt with quite expeditiously, then I should have thought that it was an Amendment worth making. It certainly would not be debated, and would he readily approved in another place if it were made. At any rate, I am grateful to the noble Lord. We can discuss this. I beg leave to withdraw this Amendment.
Amendment, by leave, withdrawn.
Clause 8 agreed to.
Clause 9:
Dissolution of Board
9.—(1) Subject to any order under subsection (2) of this section, the Board shall cease to exist at the end of 1970.
(2) The Minister may at any time before the end of 1970 by order direct that the Board shall not be dissolved until such later date, not being a date after the end of 1971, as may be specified in the order.
LORD DRUMALBYN LORD DRUMALBYN moved, in subsection (1), to leave out "exist" and to insert "operate". The noble Lord said: Perhaps it may be convenient to take Amendments Nos. 11, 12, 13 and 14 together. I am afraid that what the noble Lord said on the last Amendment does not encourage me to think that he will accept this series of Amendments.
LORD SHACKLETON: The noble Lord does not mean No. 14, but Nos. 11, 12 and 13.
LORD DRUMALBYN: Not No. 14? Would the noble Lord like to deal with that separately?
LORD SHACKLETON: It is a separate point, I should have thought. If I may deal with it in that way, I can perhaps be more helpful on it.
LORD DRUMALBYN: The purpose of these Amendments is to secure that after the Board has ceased to operate and before it finally ceases to exist it will make a final report. It seems decidedly odd that a body should issue its final report after it has ceased to exist, and subsection (4),
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which provides for the Minister to make an order laying down, so to speak, its obsequies, does not help very much. I shall deal with the other point when I come to it.
LORD SHACKLETON: I am sorry. Perhaps I should not seek to guide the noble Lord. Perhaps it would be as well to mop up No. 14, too.
LORD DRUMALBYN: I think it would be convenient to discuss them all, because they were conceived as coming together. It seems to me desirable that Parliament should know exactly what are the assets, rights and liabilities which the Board hands over to the Minister. I strongly suspect that my Amendment No. 14 is defective, but I hope that the noble Lord will approve of at any rate the way, if not the actual words, in which the four Amendments seek to deal with the demise of the Board and what might be described as its last testament, which customarily comes before, rather than after, death. I beg to move.
Amendment moved—
Page 6, line 32, leave out ("exist") and insert ("operate").—(Lord Drumalbyn.)
LORD SHACKLETON: Perhaps I may deal with the first three Amendments and then make some comments on Amendment No. 14, too. These Amendments accept the principle that the Board's operations should cease on those dates, but leaves the date of the actual dissolution of the Board indefinite; and the Amendments obviously have the purpose of providing a period after the Board has ceased to operate during which it will be able to prepare its final report and put its affairs in order. I submit that these first three Amendments are not really necessary. The Government recognise that such a period may be necessary, but have provided for this, first, by making provision for the extension of the life of the Board (and in considering such an extension the need of a period for tidying up the Board's affairs will be taken into account) and by providing in subsection (4) of Clause 9 power for the Minister to modify the provisions of Clause 8. For example, as regards the periods covered by the final report of the Board, which have been precisely laid down, power is given to the Minister to modify that, and this is to meet the situation at the time.

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These provisions enable the Minister to ensure that the affairs of the Board will be put properly in order before its dissolution. They also provide flexibility in dealing with administrative matters which cannot be foreseen at present and which may arise on the Board's dissolution. At the same time, they ensure that there will be no doubt as to the date on which this statutory body will cease to exist. I think it should be possible to secure that the last few weeks of the Board's life is a running down period in which it is largely tidying up its affairs, and it should be able to prepare its final report and accounts during this period in such a way that they cover the time right up to immediately before the Board's dissolution. The final report and accounts could then be rendered formally, immediately before dissolution. In any event, if, when the time came, there was any difficulty about this, Clause 9(4) is wide enough to enable provision to be made whereby the final report and accounts could be rendered on its behalf after its dissolution by the final members of the Board. There is also a technical difficulty on the word "operate".
May I now turn briefly to the last Amendment, Amendment No. 14? It is arguable that there is really no need to require the Board to report on the exercise of its functions or to repeat information already published about the rights and liabilities to be vested in the Minister. I must say that the Government are sympathetic to what the noble Lord seeks to achieve. In other circumstances, I should have suggested putting down an Amendment, perhaps at a later stage; and this can be done. But while I agree that this sort of information ought to be in the Statutes, we are not legislating for all time; we are legislating for a period of three or four years. It may be that in 1970 or 1971 there will be a situation which will call for further legislation. This we do not know; but it would be wrong to ask Parliament to consider that at the moment. There may be further matters which will have to be dealt with. I am not suggesting that there should be a successor body. This is intended to be a major rescue and reorganisation operation.
I think, therefore, we have enough flexibility. But I will give an under
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taking to the noble Lord, by Amendment or othewise, that we will ensure that the final report will contain the sort of thing he wants—both the functions and any recommendations that may be made. Certainly we shall see that the final report gives a general review and, in particular, an up-to-date statement of the rights and liabilities vested in the Minister. I will give a clear undertaking that this will be provided for, and we can consider whether in the circumstances there is any need actually to put down an Amendment.
LORD DRUMALBYN: I am much obliged to the noble Lord for what he has said. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 9 agreed to.
Clause 10 [Financial provisions]:
LORD DRUMALBYN LORD DRUMALBYN moved, in subsection (7), to leave out "(a)". The noble Lord said: This is the last of the Amendments we have to deal with. Before I move it, I should say to the noble Lord that we very much appreciate the work he has put into this particular Bill amid all his other responsibilities and cares at the present time. I know he has had to take this Bill on rather at the last moment.
This particular Amendment looks very small. The subsection as at present drafted says in effect, as I understand it, that where the Board (or, after 1970, the Minister) exercises an option under a loan agreement to take up shares under Clause 6(1)(a), the Minister must repay the loan into the Exchequer out of moneys voted by Parliament—that is, out of the annual Vote. The annual Vote can, of course, provide for this contingency in advance. The Minister will then hold the shares he has taken up out of the loan agreement. What I do not understand is why shares should be paid for out of the annual Vote in a case where they are taken up under a loan agreement some time after it was made, but should not be paid for in the same way if they are taken up against an advance at the time when it was made.
If there is to be this distinction between the way in which shares and loans are

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financed in the case of options exercised, why should there not be the same distinction when the original advance is made partly by making a loan and partly by subscribing for shares—or, for that matter, entirely by way of subscribing for shares in one case and entirely by way of loan in the other case? The point is that a loan should be repaid, whereas the money paid for the shares will not normally be repaid. Even if the shares are sold it is unlikely that the amount received will be exactly the amount paid for them. To a considerable extent this is really a bookkeeping matter; but it is also a matter of accountability to Parliament. I should be grateful if the noble Lord could explain why there is this distinction. I beg to move.
Amendment moved—
Page 8, line 5, leave out ("(a)").—(Lord Drumalbyn.)
LORD SHACKLETON: I was about to say that this is a most unintelligible Amendment. It is one which I had to take the greatest care in understanding. I agree with the noble Lord that what it deals with may not be a major point, but certainly it is interesting and significant. I hope the answer I give will satisfy him, as I doubt whether I shall be able to give him another. Subsection (7) of Clause 10 preserves the distinction that is made in Clause 10(1) and Clause 10(2) of the Bill—and this follows the usual practice—between the financing of loans by the Board and the financing of all other expenditure by the Board. The loans are to be financed directly out of the Consolidated Fund, as the noble Lord knows, and all other expenditure, including the purchase of shares, is to he financed out of Votes. The power to make loans dischargeable by the issue of shares calls for a special provision to maintain this distinction in any case where a loan is in fact discharged by the issue of shares. The necessary provision is contained in Clause 10(7) which ensures that the Consolidated Fund is reimbursed from Vote money for any loan money originally taken direct from the Consolidated Fund under the terms of Clause 10(1) which, instead of being repaid under the terms of the loan agreement, is discharged by the issue of shares. Perhaps that is clear. Possibly, if I had put in a
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full stop it might have been easier to understand.
The power of the Shipbuilding industry Board to enter into loan agreements containing provisions of this nature derives from paragraph (a) of Clause 6(1). The power given under paragraph (b) of that subsection is a power to acquire shares directly and not through convertible loan agreements. When shares are acquired directly, the purchase will in any event be financed out of Votes, since the cost will be "an expense" of the Board and therefore covered by Clause 10(2)(a). The reference to paragraph (a) of Clause 6(1) is therefore precise and exact. The deletion of this reference in subsection (7) of Clause 10 would really add nothing to the clause. I hope that answers the noble Lord. I could give him a fuller explanation. I should like to thank him for his help. I would say that this has been a pleasant change from South Arabia—but not without its complications.
LORD DRUMALBYN: I am much obliged to the noble Lord. I found his explanation entirely clear, but I am afraid it prompts me to ask a question that I asked on Second Reading. What is the amount of the Vote for the purchase of shares during the current year? I wonder whether the noble Lord is able to give me that information.
LORD SHACKLETON: That is a very fair point; but I am afraid I do not have the answer. Perhaps I may give the noble Lord the answer on Third Reading. I remember that he asked that question. I do not know how far it is possible to provide in anticipation of legislation; but, of course, it is always possible to proceed by Supplementary Vote.
LORD DRUMALBYN: I am much obliged to the noble Lord. I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Clauses 10 and 11 agreed to.
Clause 12 [Interpretation]:
7.0 p.m.
On Question, Whether Clause 12 shall stand part of the Bill?
THE MARQUESS OF ABERDEEN AND TEMAIR: I have no exact wording for an Amendment which I should like to

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move, but if I am not out of order, I should like to refer to a particular point. Clause 12, the interpretation clause, refers in line 34 to the "main engine manufacturing undertaking and obviously accessories not essential for the vessel are excluded from grant. There is, I claim, one class of machinery which cannot be looked upon as an accessory and without which a ship would be useless; that is to say, the refrigeration machinery. There are certain classes of vessels which cannot go to sea without this machinery.
Without refrigeration they are quite useless. When I first started work (I hope that the noble Lord, Lord Shackleton, will agree when I say that I was a worker; and my mates and I felt that we were workers) we were making fishing vessels of less than 100 tons and at that time the vessels did not have refrigeration plant; they had to use ice in the cargoes. To-day no fishing vessel can take to sea without refrigeration.
I do not wish to extend the argument fully, but the other vessels to which I wish to refer (they are mentioned in the Geddes Report) are classed as refrigerated vessels. In paragraph 90 of that Report there is an explanation of the importance of refrigerating plant which is in increasing demand. It is true that the demand is not so great as it was at one time. I may say that the firm with which I was engaged produced refrigerating machinery for refrigerated vessels and supplied 50 per cent. of the entire world output. We are a long way from that to-day, but in fact such vessels are built to take the plant and cannot be used without it. The vessels are used for the importation to this country of meat and many other items. A third class of ship in which refrigeration is used is the passenger vessel, which to-day, of course, is always fitted with refrigerating machinery. I would ask the Minister to consider whether it is right to exclude that very important plant, which is essential for a ship, from any form of financial help. I cannot put it in the form of an Amendment, but I hope that the suggestion may be accepted and considered by the Minister.
LORD SHACKLETON: I certainly recognise the noble Marquess as a
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worker. He is the oldest apprentice in this House, and probably in his long and interesting life has known more about shipbuilding, and indeed industry, than any Member of your Lordships' House. So one is bound to respect what he says. I fully accept the force of the argument advanced by the noble Marquess, although I have not had an opportunity to consider his suggestion. The fact is that there is a large amount of ancillary equipment for ships, including, I am afraid, refrigeration equipment, which is not covered by this Bill. The noble Marquess may say that this is a mistake, but the Bill relates basically to the organisation of the shipbuilding Industry. The refrigeration industry is not part of that industry, and were we to act on the suggestion of the noble Marquess we should be going far beyond the purposes of this Bill.
I will consider what the noble Marquess has said, and if there is any further explanation that I can give to him I shall be happy to do so on Third Reading. But, so far as I can tell not only is this point not covered, but I do not see how it could come within the terms of the Bill or of the Financial Resolution. I suppose that this type of equipment would be bought-in, and the provisions of the Bill are not directed to that particular aspect of shipbuilding. The particular aspects to which the Bill is directed are described in the Long Title. So, reluctantly, because I should like to be of help to the noble Marquess, I can offer little hope, beyond an undertaking to comment further at a later stage.
THE MARQUESS OF ABERDEEN AND TEMAIR: If I may, I would remind the noble Lord, Lord Shackleton, that the matter is mentioned in the Geddes Report.
LORD DRUMALBYN: The noble Lord, Lord Shackleton, has said that the matter is not covered specifically, but there is no doubt that it is broadly covered by the words in Clause 1(1):
"For the purpose of promoting the ability of the shipbuilding industry in the United Kingdom to compete in world markets …"
In the Long Title there is a reference to "marine engine manufacturing undertakings". I do not know whether a marine refrigeration engine is a specific and separable kind of engine, but if so I should have thought this could be

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brought within the ambit of the Bill quite simply. The great difficulty that I pointed out on Second Reading is that the margin by which the cost of British ships has to be brought down is quite considerable—it is of the order of 15 per cent.—to make the industry competitive. Any way in which costs can be brought down, by the organisation of plant or by any assistance which can be given, to make British shipbuilding as a whole more competitive would certainly be very much in line with the objects that we are pursuing by this Bill, and I do not think this suggestion should be rejected out of hand. I think that the noble Marquess has conferred a benefit by drawing attention to this point.
LORD SHACKLETON: It is, of course, an interesting point, but I should be very surprised if we could alter the definition, which I think is what the noble Lord, Lord Drumalbyn, wants to do in relation to main engine manufacturing. The fact that there is a definition does not mean that it can be altered to mean something which is not implicit in the name itself. The noble Lord, Lord Drumalbyn, who supported the noble Marquess, has been able to put a point now which he would not be able to put on Third Reading, because we should no longer be able to add to the Bill. But your Lordships are usually pretty tolerant, and I will try to give an answer. I must say, although I make no complaint, that this is rather a "swift one" to be bowled in the last stage of the Bill, and if I have not batted as well as I should, I think that the noble Marquess must bear some of the responsibility. However, I will certainly think further about it and tell the noble Marquess the answer.
LORD SOMERS: I note that there is a reference in the clause to engines for propulsion. Are steering engines therefore excluded?
LORD SHACKLETON: I think that I should have to go back to the noble Lord. Lord Drumalbyn, to help us, but as I understand it, they are not necessarily a "main engine". For all I know, such engines are manufactured by a main engine manufacturing undertaking, but I am going so far outside my brief that I really think I had better say no more.
Clause 12 agreed to.
Remaining clause and Schedule agreed to.
House resumed: Bill reported without amendment.
LORD SHACKLETON: My Lords, we are all agreed on the urgency of this Bill, and if there are any further matters with which we wish to deal by Amendment, perhaps they can be dealt with on Third Reading. I beg to move that this Report be now received.
Moved, That the Report be now received.—(Lord Shackleton.)
LORD DRUMALBYN: My Lords, I am agreeable to the course proposed by the noble Lord. I feel certain that any further matters that have to be dealt with can be dealt with on Third Reading.
On Question, Motion agreed to, and Report received accordingly.

ROAD TRAFFIC (AMENDMENT) BILL
7.12 p.m.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(Lord Popplewell.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD AIREDALE in the Chair.]
Clauses 1 to 6 agreed to.
Clause 7 [Exemption from disqualification and endorsement for offences against construction and use regulations]:
LORD NUGENT OF GUILDFORD LORD NUGENT OF GUILDFORD moved, to leave out Clause 7 and insert the following new clause:
Discretion of court not to endorse driving licence in certain circumstances
".The requirement under subsection (1) of section 7 of the 1962 Act that the court shall order the particulars of the conviction of any offence specified in Part I or Part II of Schedule 1 to the 1962 Act, and of any disqualification ordered on such conviction to he endorsed on the driving licence of the convicted person, shall not apply to any offence specified in paragraph 19 of Part 11 of Schedule 1 to the 1962 Act. The Court may order that

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particulars of the conviction of such an offence shall be endorsed on the driving licence of the convicted person if it thinks fit so to do."
The noble Lord said: I beg to move the new clause which stands in my name on the Marshalled List. I called attention to this point on the Second Reading of the Bill. I recognise that Clause 7 makes some improvement on the law as it stands now under the 1962 Act—let credit be given where credit is due. My Amendment will go a little further in what I think is the right direction.
As the law now stands, the owner of a commercial fleet of vehicles is held vicariously responsible for the roadworthiness of every vehicle in his fleet, and his own personal driving licence is in peril of suspension by the endorsement procedure in the event of a prosecution. This new clause gives the owner a statutory defence. He shall not be liable to be disqualified under Section 5 of the Road Traffic Act if he proves that he did not know, and had no reasonable cause to suspect, that the facts of the case were such that an offence would be committed. This difficulty is awkward to overcome. It means that the fleet owner has to prove a negative, and that is always difficult. It will put him to considerable trouble and expense to do so. I think that normally it would oblige him to attend court. It may be that it is allowable to submit written evidence, but obviously that would weaken his case, and where his personal licence is in danger it would normally be obligatory upon him to attend court in order to make sure that his case was as strongly put as possible.
I would put this question to the noble Lord, Lord Winterbottom. Is it really in the public interest to twist an employer's arm to this extent and take up his time—it usually takes a full day, travelling to court, and with all the waiting about that is inevitably involved—in order to deal with this kind of danger that besets him? My Amendment would remove the threat of endorsement one stage further away from the fleet owner. The court would still have power within its discretion to order an endorsement following a conviction, but the onus of proving that it was justified would be thrown on the prosecution. Of course, this does not in any way affect
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the punishment by fine which would follow conviction in the normal way, but it would ensure that a fleet owner is not needlessly put at risk of losing his personal licence and therefore obliged to spend valuable time attending court defending himself. If in special circumstances the court were satisfied that it was a proper penalty, an endorsement could still be ordered.
There is one further point which I think is worth mentioning briefly. On Second Reading I expressed the view that the penalty of endorsing the fleet owner's personal driving licence seemed to me an illogical, if not an improper, penalty. Endorsement, leading by the totting up process to disqualification from holding a driving licence, is normally the punishment for driving offences which cause danger on the road and indicate a lack of personal care in driving which in the public interest should be corrected by a stiff punishment. In most cases of offences of this kind involving fleets of vehicles there would be no such element present with regard to the fleet owner—none at all. Indeed, it would really be as logical to endorse the driving licence of the Minister of Works on account of a breach of regulations by a motor car in the Government car pool as it would be to do this. All cars in the fleet come under the Minister of Works, and a logical application of this Bill would make him responsible, and indeed the noble Lord, Lord Winterbottom, with his special responsibility in that Ministry might find his own licence endorsed, too. This is something I should not wish to happen in any circumstances, but I am making my case that this is unfair and illogical to the point of being ridiculous.
The logical case is not to act against the person, the fleet owner, but to act against the vehicle by suspending the vehicle licence for a short period. There is a respectable precedent for this in the 1962 Act, in that a carrier's licence for a goods vehicle can be suspended for breach of the Construction and Use Regulations. Therefore, I would suggest to the noble Lord that if the Government want an additional penalty on top of the fine as in the 1962 Act, this would seem to be the logical course to follow.
I am surprised that Her Majesty's Government have not been more receptive to this since I made the suggestion on

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Second Reading. Here I should thank the noble Lord, Lord Shepherd, in his absence, for the lengthy reply which he gave to the points which I raised, but it indicated no sort of welcome to the improved ideas I was putting forward. However, I am content for now to accept the basis of the existing law, illogical though it is, and to move the new clause on the Marshalled List, which will at least remove the immediate threat to the fleet owner's driving licence, and I hope that the Government will accept it. I beg to move.
Amendment moved—
Leave out Clause 7 and insert the said new clause.—(Lord Nugent of Guildford.)
LORD SOMERS: I should like to support my noble friend's Amendment. I am not against endorsement as a principle, but the whole point of it seems to be to provide a record for the magistrate of the driving faults of the person before him. It is of no importance to the magistrate to know that on such-and-such a date the person standing before him exceeded the 30 m.p.h. limit by 2 m.p.h., or that he parked in a wrong place, or something of that sort. What he wants to know is whether the man is a dangerous driver, or a careless driver, and what his general standard of driving is. I do not feel that purely minor offences like this deserve a licence endorsement. I have heard of a case of a young man who was driving through a town somewhere in the West of Wales at about 3 o'clock in the morning, when there was nothing else on the road, and he attained a speed of 35 m.p.h. He was fined £5 and his licence was endorsed. While I am not in favour of breaking the law, I feel that this sort of practice makes motoring law, as it stands at present, somewhat absurd.
7.22 p.m.
THE PARLIAMENTARY SECRETARY, MINISTRY OF PUBLIC BUILDING AND WORKS (LORD WINTERBOTTOM)THE PARLIAMENTARY SECRETARY, MINISTRY OF PUBLIC BUILDING AND WORKS (LORD WINTERBOTTOM) I am glad that the noble Lord, Lord Nugent of Guildford, feels that we have moved in some direction to meet an objection to existing legislation which I think both sides of the Committee agree should be altered. The only thing that separates us is the measure by which existing legislation is to be altered, either by our Amendment or
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by that of the noble Lord. He has said that this is a wider freeing of the rights of the individual in this matter. As a fleet owner, I think it is certainly an uncomfortable feeling to know that at the moment one can receive a series of endorsements to one's licence which can lead to the loss of the right to drive, even though the offences have not been committed by oneself. It is not only because of my present position, to which the noble Lord referred, that I share this view, but also as a farmer with vehicles on the road—and I understand that in that feeling I am not alone in this House.
It is generally agreed that something must be done to amend present legislation, but again, in the philosophy lying behind so much recent legislation on road traffic (one remembers the Road Traffic Bill with which we dealt not long ago) there has been a tendency towards stricter control of suitable penalties, because we are all concerned at the recent death toll that road traffic is taking. It is for this reason that the Government do not feel that they can go as far as the noble Lord would like them to go in his Amendment. The reason is that the type of offence covered by the Amendment is only one of a number specified in the Schedule—and from the point of view of road safety by no means the least serious of them—for which conviction carries with it the additional penalty of licence endorsement and, in consequence, the risk of disqualification. The purpose of the provisions relating to mandatory endorsement and the totting-up procedure is to create a compelling reason for better observation by motorists of their statutory obligations, and to ensure that persistent and serious offenders do not escape adequate punishment because of leniency by the courts.
This question of leniency has been drawn to the attention of your Lordships on numerous occasions. Knowingly to use, or to cause or allow the use of, a vehicle in a condition in which it is a potential danger to all road users, and which might be the cause of a fatal accident, is, in the view of the Government, too serious an offence to admit of any justification for mitigating the present penalties. To do so in the way proposed by the noble Lord would be unwarranted in itself, would create a precedent for other exemptions from the totting-up

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provisions, and could not fail to weaken the whole structure of the penalty provisions.
We do not feel that we can be too lenient in this matter of the safety of all road users. We must make the owner of ha group of vehicles remember at all times his vicarious responsibility, and use his best endeavours to make certain that the vehicles which he owns, and for which he as an individual is responsible, should be kept in the best possible working condition. It is for this reason that I must, with regret, reject the noble Lord's Amendment, although I am, as I am sure we all are, in sympathy with its aims.
LORD NUGENT OF GUILDFORD: I must thank the noble Lord at any rate for the manner of his rejection even if the matter was so unsatisfactory; and I should also like to thank my noble friend Lord Somers for his support. The brief to which the Minister was speaking repeats, of course, the point made in the letter which I received from the noble Lord, Lord Shepherd: that any concession of my point that the action should be against the vehicle rather than against the person would in the view of the Ministry create a dangerous precedent. This is, of course, a typical Ministry of Transport reaction. In a large number of cases I should accept that their collective wisdom would justify their sticking their toes in, but here I believe that they have an illogical procedure. I am sure that this point will not stand the test of time. The 1962 Act was wrong in this respect. I do not think it would necessarily be conceding a greater leniency to change the law in this respect. To suspend the licence of a vehicle is quite a serious punishment, and could, indeed, be more serious financially than suspending the driving licence of the fleet owner.
But it is the logic of the matter with which I am concerned. I find something objectionable in proceeding against the personal driving licence of the fleet owner when, as will be the case, he has no control of the condition of the vehicle. I am not criticising the philosophy underlying the endorsement and disqualification procedure, which in my view is a sound procedure for personal driving cases. However, I have made my point. I hope I have made some mark with the Ministry of Transport and that they may
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think about this in the future. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 7 agreed to.
LORD WINTERBOTTOM LORD WINTERBOTTOM moved, after Clause 7, to insert the following new clause:
Extent of powers under Motor Vehicles (International Circulation) Act 1952
". It is hereby declared for the avoidance of doubt that—

(a) the power conferred on Her Majesty by section 1 of the Motor Vehicles (International Circulation) Act 1952 (Orders in Council for implementing international agreements about international road traffic) to make provision by Order in Council for modifying any enactment relating to vehicles or the drivers of vehicles includes power to make provision corresponding to any such enactment; and

(b) the reference in subsection (1)(b) of that section to any enactment is a reference to any enactment passed before or after that Act.".

The noble Lord said: On behalf of my noble friend Lord Shepherd I beg to move Amendment No. 2, and, with the permission of the Committee, I should like at the same time, to speak to Amendment No. 3 because it is consequential on this Amendment. This is quite an interesting point. Its purpose is to remove a doubt about the correct legal interpretation of Section 1 of the Motor Vehicles (International Circulation) Act 1952. Even when this Act was passed some doubt was expressed as to whether it covered any enactment relating to vehicles in existence in 1952, or would cover enactments passed in the years subsequent to 1952.
Apparently this point has not caused any great difficulties so far, but we now have before this House the Criminal Justice Bill, and this may affect the issue. Under the Criminal Justice Bill power is given to a magistrates' court, when committing a person to a higher court for sentence in respect of a disqualifiable road traffic offence, to order the person concerned to be disqualified until his case is heard by the higher court. A certain procedure is laid down about the production of the licence, its endorsement and notification of the particulars of the ordering of the interim disqualification. It will be necessary to adapt this procedure for persons who drive in Great Britain on permits used under the

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provisions of the Motor Vehicles (International Circulation) Order 1957, because these permits will not be covered by the procedure laid down by the Criminal Justice Bill when it becomes law.
I suppose the situation foreseen is that a foreign visitor to this country comes in with an international driving licence, gets into some traffic trouble which justifies disqualification, and that it is conceivable that the circumstances covered by the provisions of the Criminal Justice Bill will apply. One can foresee the situation in which a foreign visitor might have to leave his vehicle here, and with the result that sundry complications would arise. It is with this difficulty in view that this Amendment has been tabled, so that the provisions of the Criminal Justice Bill, when it becomes law, can be applied in these cases. I beg to move.
Amendment moved—
After Clause 7, insert the said new clause.—(Lord Winterbottom.)
On Question, Amendment agreed to.
Remaining clauses agreed to.
LORD WINTERBOTTOM: I beg to move Amendment No. 3.
Amendment moved—
In the Title, line 6, at end insert ("and to remove doubts about the extent of the power to make Orders under the Motor Vehicles (International Circulation) Act 1952").—(Lord Winterbottom.)
On Question, Amendment agreed to.
Title, as amended, agreed to.
LORD POPPLEWELL: In expressing my thanks to your Lordships for dealing with this Bill, may I say that I sincerely hope that everyone will realise the importance attached to the particular principles involved in the Bill. I think it is a good step forward in accordance with the rules of safety which we are trying to instil, and in our efforts to create a better atmosphere on the roads and reduce the accident record so far as the nation is concerned. All of us are very concerned indeed with the very high toll of the death rate which we experience with the motor car, and we should take every possible step to prevent it. I am sure that this is a very useful Bill, and I am very grateful to your Lordships who have taken part in the Committee stage. Now that my
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noble friend has returned, I will simply give the Bill my blessing.
House resumed: Bill reported, with Amendments.

NIGERIA
7.36 p.m.
LORD BROCKWAY LORD BROCKWAY rose to ask Her Majesty's Government what action has been taken to facilitate a peaceful solution of the constitutional confrontation in Nigeria. The noble Lord said: My Lords, I rise to ask permission to put the Unstarred Question which I have on the Order Paper. I have thought very carefully about whether I should maintain this Unstarred Question and initiate this debate. The situation in Nigeria remains critical, and a wrong word may exacerbate it rather than contribute towards a solution. For this reason I ask your Lordships to excuse me if I keep more closely to my notes than is usual.
Since the exchange of Questions and Answers in the House last week I have done my best to obtain the fullest information to enable a balanced decision to be made. I have seen the Minister of State, his Principal Adviser on West African Affairs, and the Minister in this House; I have seen the Commissioner for Nigeria and the Permanent Secretaries to the Ministry of Foreign Affairs and Industry and Trade in the Federal Government; I have seen the High Commissioner Designate appointed by the penultimate Government in Nigeria, and learnt something of the attitude of the East. I have seen the Head and the Deputy Head of the Commonwealth Secretariat. I have seen individual Nigerians and British citizens who have been resident in Nigeria. From these conversations I have been impressed not only by the urgency of the crisis but by the need for caution in approaching it. I shall endeavour to speak in that spirit, and I know that those who follow me will do so also.
The situation in Nigeria is urgently critical. Probably as many deaths have occurred as in the Israeli/Arab war. There are probably as many refugees. There is a blockade now of the East by the Centre. The last news indicates that the Centre may feel compelled to invade the East by force. Should this happen, disastrous civil war, with incalculable loss of

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life and ruinous division and antagonism, would occur. To those who have been closely associated with events in Nigeria this would be a tragic disappointment. We had hoped that it would be a model for Africa. It is worth remembering to-day that tolerance and patience shown by the South in the achievement of the united Independence of Nigeria. The East and West regions of the South could have obtained their independence two years earlier if they had been prepared to go forward without the North. They preferred to wait until the North was ready. The East was prominent then in urging the unity of all Nigeria. Both Dr. Azikiwe of the East and Chief Awolowo of the West showed great statesmanship at that time.
We must speak carefully to-day because of the sensitivity of independent States to any suggestion of external intervention in internal affairs. My supplementary question eight days ago was interpreted as an indication that the Commonwealth Secretariat had offered mediation. My actual words were that the Secretariat had made "an approach on these matters". In fact the deputy head of the Secretariat was very careful in his visit not to infringe Nigerian independence. His visit was entirely fact-finding and exploratory.
The rights inherent in independence must be very much in our minds as we seek to find a way to help heal the wounds in Nigeria now. I am aware of the series of helpful steps which the Government have taken since April and before. They have been concerned to prevent an outbreak of violence but have refrained from overt actions of a character which might give any suggestion that the Commonwealth Office has retained any residue of the colonialist attitude.
It is clear that any appeal for a settlement, from whatever quarter, must have the support of the Nigerian Government and of the Parties which are in dispute. I am so anxious to avoid saying anything which would aggravate the difficulties that I do not propose to attempt to estimate the events which have led to the present division between the Federal Government and the East. These events affect bitterly the present dispute, but for us they can await history. The immediate need is to avert further disaster.
Nigeria has proved its recognition of the value of membership of the Commonwealth. It is also loyal to the Organisation of African Unity with which the African independent States are associated. African nations in the Commonwealth and the O.A.U. are deeply concerned about what is happening in Nigeria, and are anxious to help. Indications of "good offices" have already been made by Ghana, Tanganyika, Zambia, Gambia and Basutoland within the Commonwealth, and by Ethiopia, Liberia and Dahomey among other African States. There is one Englishman—or rather a Scotsman—in Africa whose advice would be trusted by African leaders: Malcolm MacDonald. He has indicated his concern.
The political climate in Africa is such that any hopeful approach should come from Africa itself. It would be wise, even, in the first instance, that this should not he too formal. The dispute between the Federal Government and the East has now become one involving sovereign status. Therefore any mediation by heads of State might be unacceptable to Lagos as implying equality of status. This does not rule out, however, the offer of "good offices" which the East has to-day indicated its readiness to accept.
The African Governments, with their own problems of minorities and disputed areas, are against secession and the division of existing States. None of them has recognised Biafra. Biafra has declared its sovereignty; but still I do not believe a solution is impossible. Colonel Ojukwu has not completely shut the door. The Nigerian Association which he is proposing includes many common services, including shipping, harbours, ports, railways and airways, free movement of goods without customs barriers, co-ordination of currency management and monetary policy, and dual citizenship. General Gowon has not yet been so specific, but he also has indicated that he is thinking of a centralised authority for common services, which would provide extensive autonomy for the States. I hope he will soon expand this in a communication to the military governors of the regions. Whether the term is used or not, both sides are proposing what is in effect a confederation in Nigeria.
The problem of the areas of the States remains. General Gowon has proposed

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twelve, which would involve the separation of the oil producing area of the East, which Colonel Ojukwu resents. But this could surely be a matter for consideration by the Commission which is examining the problems of the future Constitution of Nigeria. We should welcome this approximation of the views of the Federal Government and the East on the relations of the Centre to the States. This is one of the most important issues in Africa to-day, and Nigeria might again give an example which would be of value to the whole continent.
Africa needs not further Balkanisation, but further union on a basis which recognises continuing racial and tribal loyalties. It might even be that Nigeria could find a basis of association between Regions and the Centre which could not only contribute to the solution of its own problems but even encourage some of its neighbours in West Africa to become associated with it. Very often in politics the solution of localised difficulties can be found with eyes on a wider horizon.
There is an immediate British interest, or rather an interest of those concerned in the oil companies whose installations are stationed in the East. At present their tankers are permitted to breach the blockade, but the question arises to whom they should pay their royalties. I hope they will not become involved in the conflict. The advice of the Commonwealth Secretary, Mr. Herbert Bowden, is probably wise—that they should place what is due into a suspense account until the issue is resolved.
The alternative to an approach of conciliation may be tragic conflict. The point is near where there can be no return. One welcomes the appointment of twelve civilian Ministers, including Chief Awolowo, to the Federal Executive. This should contribute an all-Nigerian solution. The East may be alone in having defied the Government, but the West, where Chief Awolowo has influence, is also uneasy. The civilian element in the military government may hold back the tendencies towards conflict. Nevertheless, the danger is very near. General Gowon may feel that he is compelled to act militarily.
May I speak for a moment not in my role as a citizen of this country, not as a Member of this House, but as one who has identified himself with the African
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struggle for political freedom, often in opposition to the policies of Governments here, and as one whose happiness it is to claim so many Africans and their leaders as my friends? I beg them not to allow this further disaster to occur in Nigeria. My plea to the Federal Government is to hold its hand. My plea to the East is to keep the doors open. My plea to the peoples of Nigeria is to control sectional passions in the interests of co-operation within a wider and liberal union.
My Lords, I believe Parliament would have failed in its duty if we had not taken notice of this grave issue. Our minds are on the problems of the Middle East, but meanwhile issues are arising in Africa which may be as decisive for the future of the world—Nigeria to-day, Rhodesia to-morrow. Nigeria is the largest nation in Africa. What happens within it will affect the future of the whole of this controversial continent. The last thing which we should do in the psychological disturbance of Africa is to give any impression of imposing our will. Only as friends can we try to contribute to a solution which will avert tragedy for Nigeria and all Africa. It is in that spirit that I appeal to the Government and to the Commonwealth Secretariat. I know what they have done, and that this appeal will not fall on deaf ears. It is not for either to dictate, but both can help to create an atmosphere in which African Governments, within the Commonwealth and outside, will be encouraged to explore urgently the best means of contributing to a solution and in which both the Federal Government and the East will be encouraged to respond.
7.58 p.m.
BARONESS ELLIOT OF HARWOOD: My Lords, I have listened with the greatest interest to the speech of the noble Lord, Lord Brockway, which I think could not have been better. He has put the case in the most moving and simple terms, and he obviously has enormous knowledge of this subject. I am making this short intervention because Nigeria is the one country in Africa which I have had the honour to visit. I went there with a Parliamentary delegation as one of the people who were invited to attend the Independence Celebrations. We even gave to the Government of Enugu the Mace and the book

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by Erskine May which is always given at the start of these Parliaments. I have vivid recollections of how extraordinarily happy one felt that here, at last, the Africans had evolved, in a very peaceful manner, a Parliamentary system which they themselves were extremely keen to work and which should be a great success.
There did not seem to be any of the problems which beset any of the other countries. There was no question of the whites and the Africans quarrelling in any way, because the whole of Nigeria was being governed by African Nigerians. That particular problem which has bedevilled so much of the African world simply was not there. Equally, one felt that the enthusiasm of the Africans and their friendliness towards those of us who had the honour to go out there representing this country was really tremendous. One felt that they were most anxious to carry on the traditions which we had started. Everything seemed to be just what one had hoped for the future. Therefore, it was with a great feeling of sorrow and unhappiness that one read of the happenings of last year.
I think that the noble Lord, Lord Brockway, has struck the right note. Obviously we cannot impose or suggest anything much from this country. But we have always had, or so it seemed, the respect of both the Eastern and the Western Nigerians. As we have that respect, I agree with the noble Lord's suggestion that perhaps an appeal to the Africans on such lines might help to delay matters before anything absolutely desperate occurs which would be quite irrevocable. Perhaps their friendship with us in the past might allow them to enlist, anyway our friendship if not our help, in trying to solve these Parliamentary and Federal problems. They are desperately difficult problems.
I agree with the noble Lord that, because of the vast size of Nigeria and the fact that it has been so enormously successful, this is probably one of the most important decisions which can be taken. One remembers the things that happened there leading up to independence. There was the establishment of the university and of the medical
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school at Ibadan, and the other universities that have been started. One hoped that all these things would lead to the creation of a number of Parliamentarians who were educated and interested, and able to carry through what admittedly is a complicated system, the Parliamentary system. That that should all be destroyed by precipitate action on one side or the other is nothing short of tragedy.
I am sure that everyone will agree with me in the hope that Her Majesty's Government will be given the opportunity of being able to help in some way, at any rate to stop any irrevocable step in the breaking out of hostilities. It seems that the people are hesitating. Although in a sense they are lined up against each other, they are not anxious to begin a civil war, the most terrible of all wars. I hope that, with the words which the noble Lord, Lord Brockway, has contributed to this debate—and no doubt others will follow—together with the words of the Commonwealth Secretary and the support which everyone would give to any move to try to stop the breakup of this remarkable coming together of African interests in Nigeria, we might well stop anything desperate happening, and that that which we all hoped for so much at the Independence celebrations, namely, the successful development of Nigeria, can still take place in spite of the difficulties which at the present time seem so overwhelming.
8.5 p.m.
EARL JELLICOE: My Lords, I am grateful to the noble Lord, Lord Brockway, for giving us this opportunity of briefly discussing one of the more threatening developments on the international scene. That scene, as we all know, is threatening enough; clouds of violence and uncertainty hang over much of Asia. The Middle East, to put it mildly, is disturbed; and now the threat of civil war, with all its attendant horrors and possible carnage, is suspended over the largest State in Africa. I do not always find myself in total agreement with the noble Lord, Lord Brockway, but I am in entire agreement with him that this is a serious, indeed potentially a tragic, situation. I should like to echo what my noble friend Baroness Elliot of Harwood has said, and say how delighted I was

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at the caution and circumspection with which the noble Lord addressed himself to this problem, because we all know how much deep emotion underlies what he said.
Unlike the noble Lord and my noble friend, I cannot claim any personal knowledge of Nigeria and its peoples; yet, like most of us, I had entertained high hopes of this great and comparatively new independent member of the Commonwealth. When all around successive coups had accelerated the downward spiral in Africa, until quite recently Nigeria seemed set on a much happier course. It had seemed the best guarantee that West Africa, indeed Africa as a whole, would not witness, to use the noble Lord's phrase, a progressive Balkanisation.
I need not therefore dwell on Nigeria's importance. It is the largest African State. It has considerable and growing resources. As the noble Lord, Lord Ogmore, reminded us only a few days ago, Nigeria is in many ways the key to Africa, and its future stability and prosperity is of not inconsiderable importance to us in this country. I will not dwell on our assets there, our growing imports of oil—not insignificant in quantity, and not insignificant because they come from the Atlantic area. It is not just those bread and butter, or the palm olive and oil aspects of the matter, which mainly interest us this evening. It is because we are partners with Nigeria in the Commonwealth, and because this country has had such a long and close association with Nigeria. Therefore, I echo what the noble Lord has said about the dangers in the present situation, and I echo what he said about the disastrous result which can flow from its further aggravation.
Perhaps I may take the opportunity provided by this short discussion of asking the noble Lord who is to reply whether he can bring us up to date, briefly, with the present situation. I should like to know, in particular, whether he has anything further to add about the situation in the Northern area of Eastern Nigeria. How many of the British nationals, for example, have availed themselves of the facilities to leave, which I understand have been put at their disposal by the British High Commissioner? What can he tell us of the blockade? Can he confirm, as I understand is the position as
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sketched by the noble Lord, Lord Brockway, that despite the blockade oil exports are still flowing?
What can we do in this situation? Quite clearly, this is pre-eminently a situation in which this country and its representatives must act with the utmost delicacy. Ultimately, this Nigerian dispute must be settled, we hope for the better, by Nigerians themselves. What to well-wishers might appear as friendly and studiously neutral advice or mediation, might to those in Nigeria appear, or be portrayed, as arrogant neo-colonialist interference. In my view, that is why we must resist any temptation to offer any unsolicited advice or mediation in these difficult circumstances. We must neither interfere nor be thought to be interfering. I believe that this applies with equal force to other well-wishers of Nigeria inside Africa or in the Commonwealth Secretariat, or wherever it may be. This may appear to be somewhat fairly negative advice—it is. I should like to qualify it in two respects: and here I am saying nothing either original or what has not been said already in your Lordships' House this evening.
In the first place, I very much hope that, despite the present difficulties, the economic progress and development of Nigeria will not be held up; that oil, exports and trade will continue to flow. This, of course, immediately involves the difficulty which the noble Lord, Lord Brockway, touched on: the difficulty over royalty payments, which could become very acute in a few weeks' time. As the noble Lord said, in another place the Secretary of State for Commonwealth Affairs mentioned the possibility of making such payments into a suspense account. This would only postpone a final solution of this aspect of the difficulty, but it would at least postpone it; we should gain a little time here. I hope myself that this idea can be pursued and that agreement—if only temporary—can be reached on it, and I should like to ask the noble Lord who is replying whether he can confirm what I understood the noble Lord, Lord Brockway, to say: that that has been tendered as official advice by Her Majesty's Government to the oil companies concerned.
My other qualification is to make it clear that we are not opposed to our offering advice or mediation, or whatever

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it may be, as such, but only to our offering it unsolicited. The same applies to the Commonwealth Secretariat and the other well-wishers of Nigeria, whether inside or outside Africa. I share the inhibitions expressed by the noble Lord about mediation, should there be a possibility of it, at Head of State level; and, for example, should the good offices of the Commonwealth Secretariat be invoked by the responsible authorities in Nigeria I, for one, could see no objection to their trying their hand, and I know they would do it circumspectly.
It would be clearly more dangerous for Her Majesty's Government, or a distinguished British individual, to respond to such a request from Nigeria and Nigerians. But the stakes are so high, the hazards in any further deterioration of the situation are so great, both in Nigeria and Africa, and the well-wishers of Nigeria in this country are so numerous, that I believe we should, if we were to receive an appropriate request, whatever the dangers involved, be prepared to respond. I do not, of course, wish to prejudge in what way we should respond. That said, I await with interest the noble Lord's reply.
8.15 p.m.
THE PARLIAMENTARY SECRETARY, BOARD OF TRADE (LORD WALSTON): My Lords, I too should like to add my thanks to those of the noble Baroness, Lady Elliot of Harwood, and the noble Earl, Lord Jellicoe, to my noble friend not only for having introduced this debate, but also for having approached it in such a restrained and helpful manner. This is, of course, a matter which has given Her Majesty's Government, and all the many friends of, Nigeria, and indeed Africa, a great deal of worry over a long time. Your Lordships will remember this is not something which has blown up suddenly; there have been many unhappy events in the past year or eighteen months which have led up to the present state. I will not go into them; they are well known to your Lordships.
We have been watching carefully—indeed anxiously—what has been happening in Nigeria, and we have done so for many reasons. We have done so, of course, because we are fellow members of the Commonwealth; we have done so
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because as humane people we hate to see other human beings suffering and dying—especially if they are, as is so often the case in such events, innocent human beings. Also we have watched with anxiety because we know so well the enormous potential of Nigeria, the potential not only in material wealth—which is as great as that of any of the richest countries of Africa—but also because of the potential to which the noble Baroness referred: the universities, places of education, Parliamentary processes and example which was there for other countries of Africa to see and to follow.
We have watched, too, because we ourselves have such a close historical tie with Nigeria, both in its earliest days, and in its more recent days—because, after all, it was this country that brought Nigeria to independence. We have, as noble Lords who have spoken have mentioned, immediate, perhaps personal, interests in Nigeria. There are at the moment some 20,000 United Kingdom subjects working and living there. We have a vast trade with Nigeria, an annual turnover of some £170 million, and British firms have very wide investments there which have been to the benefit both of Nigeria and of ourselves. There are, of course, the relatively newly discovered oil deposits which are being exploited now with such enormous success.
For all these reasons we have watched with very great anxiety, as I say, what has been happening. Perhaps at this point, in mentioning the United Kingdom subjects, I should reply to the question of the noble Earl, Lord Jellicoe, about the number of British nationals who have left. I cannot give him the exact figures, but there are in the Eastern Region a substantial number of families, women and children, who have left on official advice. In the North, so far as I know, no British subjects have left. In the East there remain United Kingdom subjects who are doing a job mainly in the oilfields, and we hope that it will be possible for them to remain there, going on doing their job, which is a very valuable one to the whole country.
We have of course made it very plain to the leaders of Nigeria, to all Nigerian leaders, that we have no intention whatsoever of intervening in the internal affairs of Nigeria. It is only right that we should make that completely plain.

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But that does not mean that we take no interest in what is happening; and we have also made it plain to them that we hope very strongly that the present difficulties can be solved, and solved peacefully and by negotiation. Her Majesty's Government share with those noble Lords who have spoken the belief that it is in everybody's interest that a formula should be found which will enable Nigeria to remain a single political economic and international unit on a basis which commands general support. We have said this on earlier occasions, and I repeat it now.
Perhaps I should answer the other question of the noble Earl, Lord Jellicoe, concerning the advice given, or reputedly given, to the oil companies. Her Majesty's Government have given no official advice to them. We do not feel that that is our job. They are independent bodies who act in what they consider to be their own best interests and, obviously, on the best legal advice and other advice which they can obtain. In my view it would not be right for us to give them any official advice on this matter.
I come to the matter of mediation. The Nigerians know that we are ready to help in any way we can, if they ask us to do so and if our help is acceptable to all parties. In fact, as your Lordships will remember, there was an attempt at mediation by General Ankrah, of Ghana. He was able to make what looked to be a constructive and helpful contribution in the early months of this year, when he was able to bring together the leaders of both sides near Accra. Unfortunately, this did not prevent the East's breakaway move at the end of May. But I should like to pay tribute to the efforts which the Ghanaian Government made to bring the Nigerian leaders together again, and in those efforts the Ghanaian Government had our fullest sympathy and support. Others have offered help, too. Several African leaders have said publicly that they would be ready to mediate if they were asked to do so, and there have been some rather less publicised messages from Heads of Government in Africa and elsewhere. Also, since the actual secession of the East a number of African leaders have called for a peaceful solution for the sake of Africa. So there is no dearth at all of
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good will or of offers of help from a very wide range.
With regard to the Commonwealth Secretariat, it is perfectly true that towards the end of April one of the Deputy Secretary-Generals of the Commonwealth Secretariat paid a visit to Nigeria at the invitation of the Nigerian Government. As he himself explained in a Press conference at that time, his visit was purely a fact-finding mission so that he could make himself familiar, and through him the Secretary-General and the Secretariat, with the situation in one of the many Commonwealth countries which the Secretariat serves. These visits are nothing unusual; they are often paid, and it is clearly right that the Secretary-General should keep himself informed of developments in the countries of the Commonwealth, and that he should maintain a close liaison with their Governments.
But it would not be right that the Secretary-General should be required to report to other member Governments his impression of the internal affairs of a member, an impression which has been obtained while he was making these visits or members of his staff were making visits on his behalf. Therefore we have not approached the Secretary-General in any way to attempt to get him to disclose to us things which may have been said during that visit. During his visit the Deputy Secretary-General made it very clear that the Secretariat had no authority on its own to intervene in the internal affairs of a Commonwealth country, but that it would naturally not refuse to help in trying to resolve the crisis if the country asked it to do so. In other words, there have been offers of mediation not only from African countries and other countries but also from the Commonwealth Secretariat.
There is no need for me to remind your Lordships that mediation cannot be imposed on a sovereign Government, and nothing can be done unless those concerned wish and request it. But, of course, this does not prevent any of us, including the Commonwealth Secretary-General, from keeping in touch with the Government of Nigeria. I am quite certain that the Government of Nigeria—and I say this from what the Secretary-General and his Deputy and others have told them—know very well what sort of facilities

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would be available to them to help in the present crisis if they wished them.
Now let me come to the British position. There are two things which stand out very clearly. First of all, the Federal Government look upon the present difficulties as essentially an internal matter for Nigeria. I believe that they realise full well the widespread international concern, but as the internationally recognised Government of Nigeria they are entitled to claim that other Governments have no right to intervene. Internationalising the dispute therefore clearly poses very special problems.
Secondly, it is clear that in spite of our interest in Nigeria—indeed, one might say to some extent because of our interest—neither the Federal Government nor the Eastern Government would regard a public initiative by Her Majesty's Government as being entirely helpful. If anyone is able to help in this mediation, and I sincerely hope that they can, it is not necessarily ourselves. There is no reason to apologise for this but, for reasons which have been mentioned by my noble friend and by the noble Earl, it would be unrealistic to pretend that these feelings do not exist in Nigeria. I repeat that we have no wish whatsoever to interfere in Nigerian internal affairs, and it would be misleading to let anyone believe otherwise.
Therefore our position is this. We should be delighted to see any initiative from any quarter, and I am thinking particularly—and here I am at one, as so often, with my noble friend—of Africa itself, which meets the crucial test that it would have a chance of success. To press for a more active British role not only would be misinterpreted in Nigeria but would not help ourselves or the Nigerians or those British people living in Nigeria. But this does not mean that we are not deeply concerned with the course of events in Nigeria. I agree with all those who have said that it would be a tragedy if fighting were to start. I still hope that it will be possible for the present dispute to be solved peacefully, because once violence is used it is very difficult to prevent it from spreading and to bring it to an end.
I hope the Nigerians will realise the very real amount of sympathy which exists for them in this country—and I
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am sure that any of them who read the report of this debate will be in no doubt about that—and in the Commonwealth, too. For our part we are ready, as we always have been, to help in any way we can; but it is difficult, it is impossible, for us to do so unless all those concerned want our help. At the moment this is not the case. Meanwhile we want to remain on good terms and to continue to do business with all Nigerians on the same disinterested basis as in the past. Our greatest wish is to see this conflict brought to a peaceful conclusion, so that this great country of Africa can continue on the path on which it started so confidently and so excitingly not many years ago, to develop its vast resources of all kinds for the benefit of its own people, for the benefit of the continent of Africa and for the benefit of the whole world.
EARL JELLICOE: My Lords, before the noble Lord finally resumes his seat, I wonder whether I may ask him one question arising from his reply. Given the nature of this debate and the care with which he was replying to the Question, I did not wish to interrupt him in the course of his remarks, but I was puzzled by what he told me about the official advice tendered by Her Majesty's Government, but not to the oil companies. I would remind the noble Lord that on June 6 in another place the Secretary of State for Commonwealth Affairs said in reply to a Question—and I quote from column 811 of Hansard:
"I understand that oil supplies are normal at the moment. I hope that that will continue to be the position and that any oil royalties will be paid into a suspense account, if necessary, for a temporary period."
That statement was authoritatively tendered in Parliament by the responsible Secretary of State, and the question I should like to ask the noble Lord is: When does advice from Her Majesty's Government constitute "official" advice?
LORD WALSTON: My Lords, perhaps we are getting somewhat into technicalities here. What I meant when I said that no official advice had been proffered was that there was no letter from the Secretary of State, in his official capacity, advising the oil companies to do this. He said these words in public as his hopes, as what he would like to see happen. Undoubtedly that is true.

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But I think there is a technical difference between giving official advice and making the remarks to which the noble Earl has referred.
LORD BROCKWAY: Again technically before my noble friend sits down, may I ask him one question? In view of the terrible urgency of this matter—in which, according to the last reports, the Federal Government now feels that it must resort to arms—is it not possible for Her Majesty's Government, in association with the Commonwealth Secretariat, to communicate with the African members of the Commonwealth to see whether, jointly, they can take some action to prevent this tragedy occurring in Nigeria?
LORD WALSTON: I think that if my noble friend reads carefully the words that I used he will realise that there can be no doubt in the mind of the Nigerian Government that there are many countries in Africa, many Commonwealth
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countries, the Commonwealth Secretariat and ourselves who, if we were asked, would be very happy to help. There can be no doubt that the Nigerian Government know that; so there is no point in telling them that again. The point I wished to stress was that offers of unwanted help might be construed as being interference, so that, until there is a definite indication that the Nigerian Government wishes for that help which it knows is available from all these sources, not only would it do no good to offer such help but it might even do harm if we were to attempt to force it on them.

GREATER LONDON COUNCIL (MONEY)(No. 2) BILL
Reported without Amendment.
House adjourned at twenty-eight minutes before nine o'clock.