Sitting of 7 March 1967

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

  INCOME TAX
  The VICE-CHAMBERLAIN OF THE HOUSEHOLD reported Her Majesty's Answer to the Address, as follows:
  I have received your Address praying that the Double Taxation Relief (Taxes on Income) (Canada) Order 1967, be made in the form of the Draft laid before your House.
  I will comply with your request.

  INCOME TAX
  The VICE-CHAMBERLAIN OF THE HOUSEHOLD reported Her Majesty's Answer to the Address, as follows:
  I have received your Address praying that the Double Taxation Relief (Taxes on Income) (Singapore) Order 1967, be made in the form of the Draft laid before your House.
  I will comply with your request.

  IMMUNITIES AND PRIVILEGES
  The VICE-CHAMBERLAIN OF THE HOUSEHOLD reported Her Majesty's Answer to the Address, as follows:
  I have received your Address praying that the Double Taxation Relief (Taxes on Income) (Trinidad and Tobago) Order 1967, be made in the form of the Draft laid before your House.
  I will comply with your request.

ORAL ANSWERS TO QUESTIONS
  NATIONAL FINANCE

    Civil Service Pay Research Unit
    Mr. Gardnerasked the Chancellor of the Exchequer if he will publish the findings of the Civil Service Pay Research Unit in order to provide a comparison of pay and conditions between private employment and the norm accepted by the Civil Service National Whitley Council.
    The Financial Secretary to the Treasury (Mr. Niall MacDermot): No, Sir. Much of the information received by the unit is available only if treated as confidential.
    Mr. Gardner: Will my hon. and learned Friend accept that this was intended to be a helpful Question? Would not he agree that the very important finding of this unit would be helpful in setting an objective standard by which we could decide precisely who were the lower paid workers?
    Mr. MacDermot: I accept what my hon. Friend says about his intention, but the difficulty about publication is that the usefulness of this work depends on retaining confidentiality.

    Inland Revenue (Staffing and Working Methods)
    Mr. Hooleyasked the Chancellor of the Exchequer if he is satisfied that the staffing and working methods of the Inland Revenue are adequate to meet all the demands of economic and social planning especially in the field of personal taxation; and if he will make a statement.
    Mr. MacDermot: The Inland Revenue has been staffed to carry out the work which Parliament has directed it to do. Working methods are kept under continuous review to meet changing requirements.
    Mr. Hooley: Will my hon. and learned Friend confirm that changes in taxation which are necessary on social grounds will not be held up on the plea of administrative difficulty?
    Mr. MacDermot: That is rather a wide proposition. Administrative factors are

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    often very important in deciding what alterations one can make to the tax position, but I assure my hon. Friend that social considerations are very much taken into account when considering taxation proposals.
    Mr. Iain Macleod: Would not the hon. and learned Gentleman agree that it is desirable that all forms of taxation should be operated by the fiscal departments, and as we had a most serious departure from this last year with regard to the Selective Employment Tax, can he say when the normal Department will regain control of this tax?
    Mr. MacDermot: The right hon. Gentleman will understand that I cannot make any statement on that at this stage.

    International Monetary Fund (Loan Repayments)
    Mr. Winnickasked the Chancellor of the Exchequer what loan repayments will be made during 1967 by Her Majesty's Government to the International Monetary Fund.
    The Chancellor of the Exchequer (Mr. James Callaghan): The Government will repay in full by 2nd December, 1967, the drawing of £357 million taken in December, 1964. The balance outstanding has already been reduced to £311 million as a result of drawings of sterling by other countries from the Fund, and this figure may be reduced still further by similar drawings during the year.
    Mr. Winnick: Will my right hon. Friend say whether, in certain circumstances, the remainder of the debt for 1967 will be delayed, and can he give target dates for the other loan repayments to the International Monetary Fund?
    Mr. Callaghan: No, Sir. I see no prospect of delaying the payment of the first instalment. It will be very much to the credit of this country when the repayment is undertaken in full. The second drawing is repayable some time between 1968 and 1970.
    Mr. Hordern: Has the right hon. Gentleman made any estimate of the proportion of Government portfolio investments which might be needed for this repayment?
    Mr. Callaghan: I am not able to make any statement about that today.

    Rhodesia (Sanctions)
    Mr. Goodhewasked the Chancellor of the Exchequer (1) what was the total cost to Great Britain, including loss of trade, loss of invisible earnings, loss of sterling balances, subsidies to Zambia, military and naval policing, and all other measurable effects, direct and indirect, of the Government's sanctions policy against Rhodesia, in the first full year;
    (2) what he estimates will be the total cost to Great Britain, including loss of trade, loss of invisible earnings, loss of sterling balances, subsidies to Zambia, military and naval policing, and all other measurable effects, direct and indirect, of the Government's sanctions policy against Rhodesia for the first full year following the implementation of the United Nations resolution on mandatory sanctions.
    Mr. Wallasked the Chancellor of the Exchequer what has been the effect on the British economy of sanctions against Rhodesia.
    Mr. Hugh Fraserasked the Chancellor of the Exchequer if he will now publish a White Paper showing the cost to this country of Rhodesian sanctions bearing in mind military costs, loss of trade and invisibles, emergency loans, and, taking 1964 as the norm, increased import prices and cost of foreign exchange for raw material substitutions.
    Mr. Callaghan: I would refer the right hon. and hon. Gentlemen to the Answer which my right hon. Friend the Prime Minister gave to a Question by the right hon. Gentleman, the Member for Streatham (Mr. Sandys) on Tuesday, 21st February.—[Vol. 741, Cols. 1433–8.]
    Mr. Goodhew: But is it not patently absurd for right hon. Gentlemen opposite to continue to try to pretend that they can separate the cost of the sanctions policy from their total attitude and policy against Rhodesia, and will they now come into the open with the House and say how much it is costing the country, instead of writing it up in the Commonwealth and trying to play it down here?
    Mr. Callaghan: That seems to be largely a matter of opinion, but if the hon. Member reflects he will see that it is impossible to measure the effect on the balance of payments arising out of sanctions as distinct from the whole illegality of the action. I ask any Member who disputes this to reflect how it is possible to determine what effect there would have been on the cost of copper under certain alternative circumstances, and how one is supposed to enumerate that in the balance of payments. That is why I have consistently given the House of Commons the effect of the loss of exports and the direct effect on the Exchequer.
    Mr. Wall: Surely the Chancellor must be able to make an estimate. He must have some idea of the cost of Rhodesian U.D.I., directly and indirectly, on the British economy. Cannot he give the House an approximate figure. Is it £100 million a year, or more?
    Mr. Callaghan: On a number of occasions I have given the House the direct cost to the Exchequer. [Interruption.] The hon. Gentleman asks for both the direct and indirect cost. As to the indirect effect, there are so many alternative assumptions which can be made that in my view no reliable estimate can be made, but if I had to make a guess I would guess at a figure somewhere between £50 million and £100 million.
    Mr. Fraser: Surely whatever the Chancellor may say in this House, this sum has been worked out by his Department. Surely he can tell the House what that sum is. I have given details to him not of copper but of other things.
    Mr. Callaghan: That is putting the same question in a different way. I have nothing to add to what I have already said.
    Mr. Whitaker: Will my right hon. Friend bear in mind the possibility of suing the Rhodesia Front and its supporters for the cost of their action?
    Mr. Callaghan: That is a different question from the one I answered.
    Mr. Sandys: How is it that the Chancellor says that he cannot give an estimate, when the Prime Minister was able to give an estimate of about £100 million
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    for the total cost to Britain, at the Commonwealth Prime Ministers' Conference last September?
    Mr. Callaghan: I have already said that it is not possible to give a reliable estimate of that. If the right hon. Gentleman has any evidence perhaps he will produce it and tell us where he got it.

    Petrol Tax and Car Registration Fees
    Mr. Ogdenasked the Chancellor of the Exchequer what was the annual amount received from petrol tax for the years 1960, 1961, 1962, 1963, 1964 and 1965; and what was the annual amount received from car registration fees for the same years.
    Mr. MacDermot: With permission I will circulate a table of figures in the OFFICIAL REPORT.
    Mr. Ogden: Can my hon. and learned Friend say how much it would cost the Inland Revenue account to register one car?
    Mr. MacDermot: Not without notice.
    Following in the table:

    Estimated revenue from tax on road fuel

    Estimated revenue from vehicle excise duties on cars

    £ million (figures for Great Britain)

    1960

    …

    342

    71

    1961

    …

    383

    83

    1962

    …

    431

    100

    1963

    …

    461

    111

    1964

    …

    529

    122

    1965

    …

    663

    147

    Mr. Ogdenasked the Chancellor of the Exchequer what would be the loss to the Exchequer if the annual registration fee was reduced from £17 10s. per annum to £2 10s. per annum; and how much per gallon would have to be added to the present tax on petrol in order to recoup such a loss
    Mr. MacDermot: £145 million and 8d. per gallon.
    Mr. Ogden: I do not ask my hon. and learned Friend to anticipate his right hon. Friend's Budget, but I suggest that he has sufficient information in these two Questions to form the basis of a reasonable reform in April.
    Mr. MacDermot: I do not know whether my hon. Friend appreciates that,

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    since commercial and industrial vehicles use more petrol than private vehicles, what he is proposing would represent a substantial shift in taxation from private motoring to industrial costs.

    Board of Customs
    Mr. Peytonasked the Chancellor of the Exchequer if he will introduce legislation to enable the Board of Customs to be amalgamated with or taken over by the Board of Inland Revenue.
    Mr. MacDermot: No, Sir.
    Mr. Peyton: Is the hon. and learned Gentleman aware that if this suggestion were adopted the Commissioners of Customs and Excise might contract the desirable habit of repaying money to which they have no entitlement? Will not he examine Customs procedures, especially with regard to bonding and returnables, because their inflexibility tends to produce both inefficiency in trade and injustice?
    Mr. MacDermot: If the hon. Member has anything to support his wild allegation I will consider it. The case that he has in mind—which I know he has been discussing with the Chief Secretary—is not one in respect of which I accept his point of view.
    Mr. Peyton: In view of the most unsatisfactory nature of that reply, I beg to give notice that I shall raise the matter on the Adjournment.

    Tobacco (Taxation)
    Dr. Winstanleyasked the Chancellor of the Exchequer if he will introduce measures to provide a financial inducement to cigarette smokers to change to the smoking of pipes or cigars.
    Mr. MacDermot: As this is a budgetary question, no comment can be made now.
    Dr. Winstanley: Is the Financial Secretary aware that a transfer from cigarette smoking to the smoking of pipes and cigars could result in a future saving of thousands of lives every year? Secondly, will he accept my assurance that it would be an easy matter to impose a stamp duty on each packet of cigarettes while
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    making an overall reduction in tobacco duty, so as to maintain the revenue at the same level?
    Mr. MacDermot: The hon. Member's latter suggestion is not as simple as he thinks. This matter was raised in the debate on last year's Finance Bill. I can assure the hon. Member that my right hon. Friend has taken note of what he has said.
    Dr. John Dunwoody: Does not my hon. and learned Friend agree that 30,000 deaths a year in this country from lung cancer form a strong argument for changing tobacco taxation? Will not he assure the House that he will consult his right hon. Friend the Minister of Health before the final Budget proposals are brought before the House?
    Mr. MacDermot: My right hon. Friend has already taken note of this and will consider the matter with my right hon. Friend the Minister of Health.
    Sir G. Nabarro: Will the hon. and learned Gentleman resist these blandishments to use the tax system for a purpose for which it was never devised, namely, to warp consumer choice? Will he leave it to consumers to decide what they smoke?
    Mr. MacDermot: If the hon. Member will read carefully what I have said I think he will find that I have neither accepted or resisted the blandishments.
    Mr. Shinwell: Does my hon. and learned Friend realise that if he took some tax off tobacco it would have a remarkably calming influence on hon. Members?

    Economy (Reflation)
    Mr. Channonasked the Chancellor of the Exchequer what proposals he now has for reflating the economy.
    Mr. Dickensasked the Chancellor of the Exchequer if he will make a statement on the reflation of the economy.
    Sir C. Osborneasked the Chancellor of the Exchequer in view of the lack of confidence now felt in many sections of trade and industry and the depressed balance sheets being reported, when he proposes to take steps to reflate

    1237
    the economy; what will these steps be. how long they will take to become effective; and what effect they will have on his plans to strengthen sterling.
    Mr. Callaghan: I cannot anticipate my Budget statement.
    Mr. Channon: Does that reply mean that the Chancellor hopes to make some progress towards this end in his Budget statement?
    Mr. Callaghan: No, Sir. It means that I cannot anticipate what I shall say on 11th April.
    Mr. Dickens: Notwithstanding that reply, does my right hon. Friend accept the view of the London and Cambridge Economic Service that the loss to the British economy in 1967 caused by the Government's policy of deflation will amount to £1,000 million, in terms of lost output? If so, does not he agree that this is a most shortsighted and socially undesirable way of solving a phoney balance of payments crisis?
    Mr. Callaghan: No, Sir.
    Mr. Hordern: Does the right hon. Gentleman look for a fall or an increase in productivity this year?
    Mr. Callaghan: An increase in productivity.

    Public Schools (Tax Rebates)
    Mr. Juddasked the Chancellor of the Exchequer what tax rebates have been made to public schools in each of the years 1960, 1961, 1962, 1963, 1964, 1965 and 1966; and what is the estimate for 1967.
    Mr. MacDermot: I regret that this information is not available.
    Mr. Judd: Does my hon. and learned Friend agree, if it were necessary to have to agree, that by no stretch of the imagination can these exclusive institutions be described as charities and that the Government should give early priority to defining the meaning of a charity in law?
    Mr. MacDermot: That is a separate question, not for my right hon. Friend. It would be an invidious task for my right hon. Friend to have to pick and choose between different charities.
    Mr. Evelyn King: Whatever may be the social arguments, is it not abundantly clear on financial grounds that these schools save the taxpayers far more than the schools could ever get in rebates?

    Registered Charities (Christmas Cards)
    Mr. Juddasked the Chancellor of of the Exchequer what plans he has to exempt registered charities from Purchase Tax on Christmas cards.
    Mr. Rowlandasked the Chancellor of the Exchequer whether in order to enable printing contracts to be placed in good time for next Christmas he will reduce Purchase Tax now levied on Christmas cards sold by charitable organisations.
    Mr. MacDermot: I would refer my hon. Friends to the reply given to the hon. Member for Belfast, South (Mr. Pounder) on 21st February, to the effect that such a reduction would result in unfair competition with other Christmas cards which have to bear the tax.—[Vol. 741, c. 241.]
    Mr. Judd: Does not my hon. and learned Friend agree that, in view of the important work done by charities in promoting a sense of social responsibility and in practical social work, there is a need for an urgent review of this tax, and its elimination altogether?
    Mr. MacDermot: For the reason that I have given I do not think that this would be acceptable. Where charities enter into trading activities, most people would expect them to trade on an equal basis with those with whom they compete. Their profits are free of tax.
    Mr. Rowland: Instead of protecting commercial Christmas card operators, would it not be better if the Treasury reviewed this matter in the light of the economic squeeze which has made life very hard for charities for the last few months?
    Mr. MacDermot: I do not think that charities are suffering in this way. It is not a matter of protecting other traders, but protecting the Revenue.
    Mr. John Hall: In view of the fact that the Chancellor told me previously

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    that he has received no representations from manufacturers or retailers protesting against the system which gave preference to charities, will not he reconsider the question and at least consider repaying to charities, in the form of a grant, the difference between the tax as it now stands and the tax that he proposes to impose?
    Mr. MacDermot: The principle involved is an important one. It cannot be confined to Christmas cards. If this concession were to be made there are many other fields in which charities could turn to trade, and trade on terms which meant that they did not compete fairly. The suggestion that the hon. Member is making would mean concealing what would still exist—discrimination in favour of charities.

    Civil List Act, 1952
    Mr. Frank Allaunasked the Chancellor of the Exchequer whether he will introduce legislation to secure the posponement of any increases payable under the Civil List Act, 1952 until the end of the period of the wages standstill and severe wages restraint.
    Mr. Callaghan: No, Sir.
    Mr. Allaun: Is it not both unfair and provocative that thousands of men taking home less than £13 a week should be denied a small increase, when an 18-yearold schoolboy can have his income doubled to £30,000 a year?
    Mr. Callaghan: I do not think that that is the position. The Civil List Act of 1952 laid down quite clearly in Section (2) what were to be the payments to the Duke of Cornwall, and it is that legislation which is now being fulfilled.

    Tax System (Simplification)
    Mr. St. John-Stevasasked the Chancellor of the Exchequer what plans he has to simplify the tax system.
    Mr. MacDermot: I would refer the hon. Member to the Answer my right hon. Friend gave on 17th January to the hon. Member for Folkestone and Hythe (Mr. Costain)—[Vol. 739, c. 6]—and to my speech in the debate on 27th January.
    —[Vol. 739, c. 2006–20.]
    Mr. St. John-Stevas: Would not the Treasury be well advised to start a pro-
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    cess of simplification with the abolition of the grotesque and inequitable Selective Employment Tax and so save us the trouble of abolishing it when we return to power?
    Mr. MacDermot: That is hardly a very good example, because the Selective Employment Tax is one of the simplest and cheapest taxes to collect.
    Mr. John Hall: Would not the hon. and learned Gentleman agree that the Chancellor of the Exchequer, in introducing his first Budget, said that it was his intention to simplify the tax structure? Would he not also agree that any accountant or secretary will tell him that the taxation system has never been more complicated than it is now and that it is most important to arrive at an accurate assessment of tax liability?
    Mr. MacDermot: Most accountants would tell the hon. Gentleman that the introduction of Corporation Tax has enormously simplified company taxation.

    Public Office Rules (Revision)
    Mr. John Hallasked the Chancellor of the Exchequer if the revision of the Public Office Rules has now been completed; and when a Statutory Instrument will be made.
    Mr. MacDermot: Yes, Sir. The Statutory Instrument bringing the new Rules into operation should be laid before Parliament at about the end of next week.

    Bank of England (Blocked Gold Reserves)
    Mr. John Wellsasked the Chancellor of the Exchequer what countries, Governments, former Governments and similar groups have blocked gold reserves in the Bank of England; and what sums are involved in each instance.
    Mr. Callaghan: None, Sir.
    Mr. Wells: Is the right hon. Gentleman saying that the former Baltic States have no gold reserves located in the Bank of England?
    Mr. Callaghan: The gold which was owned by the former Baltic States was vested in the Custodian of Enemy Property in 1941 and the House gave legislative effect to that in 1951.

    Decimal Currency
    Mr. Rowlandasked the Chancellor of the Exchequer how many representations he has now had from members of the public and from trade organisations expressing a preference for a decimal currency based on a £1 unit and expressing a preference for a 10s. unit.
    Mr. Callaghan: Since the issue of the White Paper on 12th December last I have received 355 representations on decimalisation from members of the public and trade organisations. Of these 44 were in favour of a £, and 153 of a 10s. major unit.
    Mr. Rowland: Would my right hon. Friend agree that these figures and the Gallup Poll published last week invalidate his statement on 31st January that the general public, on the whole, prefer the £? In view of this, would he agree that, if his argument is strong enough—I should like to support it if it is—it would be better to leave it to the free judgment of all the Members of the House of Commons?
    Mr. Callaghan: This is a matter in which it is the clear duty of the Government to give a lead to the House on the best system. I am looking forward to the debate on the issue. When it comes, it will then be for the House to make up its mind, but the Government must advise their supporters to support—[HON. MEMBERS: "Oh"]—one cannot flop around on an issue like this with a free vote. It is the Government's duty to give a lead to their supporters, and this lead has been given.
    Mr. lain Macleod: Would the right hon. Gentleman accept from me that, in all parties and on both sides of the House, this is a matter of very great concern indeed, and that, as far as I at least am concerned, it has nothing whatever to do with party politics—[Interruption.]—nor for the Chancellor of the Exchequer, I accept that. But, because this is so, would he please not make up his mind in advance of the debate which we are to have in this House, and would he take the opinion of the House into consideration before final decisions are made?
    Mr. Callaghan: As far as I know, there is no means of dragooning anybody into a Lobby, but it is the Government's job
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    —[Interruption.]—if there is, we are singularly unsuccessful at it. It is the Government's job to say what the policy should be and it is for the Government's supporters to support the Government, the choice having been made.
    Mr. Crawshaw: Has my right hon. Friend received any representations over the last week as a result of certain incidents in this Chamber last Thursday? Is he aware that many hon. Members on this side, for various reasons, are very anxious that he should make a cast-iron case for the choice which he has made?
    Mr. Callaghan: I have been waiting since 1st March last for the opportunity of doing that, and I am looking forward to the debate very much indeed.
    Mr. Iain Macleod: Would the right hon. Gentleman accept that, in a matter like this, which will affect this country perhaps for 1,000 years or so, it is vastly more important to make the right decision than to make an early decision? As this is not in any political party's programme, would he not treat this on a different basis from the ordinary discussions in the House and genuinely consult the House of Commons on this matter?
    Mr. Callaghan: It is very late for the Opposition to raise this question. I announced the proposal to decimalise on the £ over a year ago. There was not even a cry from anybody—
    Mr. Lubbock: Oh, yes, there was from me.
    Mr. Callaghan: Except for the hon. Gentleman—I will give him that. But he is not, in name, yet a member of the Conservative Party.
    I published a White Paper in December. Again, apart from the hon. Gentleman and a few others, there was very little protest. The protest started on the day that the Bill was introduced. This is not a hurried decision, but a decision which has been talked about now since 1963. It is the duty of the Government to give a clear lead to their followers and the House on this matter and not to shilly-shally around and say, "We do not mind whether it is one or the other." We do. I am confident that the case for the £ is very strong.
    Mr. Lubbock: Does the right hon. Gentleman agree that the figures which he has given this afternoon show that four times as many people are against the Government's decision as are in favour of it? Will he publish a list showing the important organisations—such as the Consumer Council, the C.B.I., the Trades Union Congress and the Institute of Chartered Accountants—who are opposed to the Government's proposal, so that members of the public can make up their minds on the basis of the expert advice which has been given?
    Mr. Callaghan: We are going to debate all this, but it is a dangerous assumption that it is the people who are in favour of the Government's decision who write to the Government. On the whole, I find that it is those who are opposed to such a decision who write and not those who are in favour of it.
    Mr. Michael Foot: If my right hon. Friend thinks that he has such a strong case on this matter, why does he not rely solely on his powers of persuasion?
    Mr. Callaghan: What the hon. Gentleman is challenging is the normal basis on which business in this House is done on both sides. There is nobody on that side of the House who would stand up and offer a free vote, if he were in my place here, on an issue of such importance. I would say to my hon. Friend that I have not the slightest doubt that, when he hears the argument, he will come in willingly, freely, hand-in-hand and arm-in-arm with me.
    Sir T. Brinton: Is not the reason for the Government's obstinacy about this free vote, as in the case of the Ombudsman, that they have already taken administrative action which has committed them to taking a wrong decision?
    Mr. Callaghan: It is a matter of opinion and I should like to remind you, Mr. Speaker, that we are going to debate this issue. I would say to the hon. Gentleman that the decision is, in my view, the correct one. Administrative decisions—[HON. MEMBERS: "Answer."]—I am about to answer. Administrative decisions have, of course, been taken —[HON. MEMBERS: "Oh."]—and a number of companies, based on the decision announced by the Government over 12 months ago, have already entered into
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    particular commitments on this matter. That seems to me to be a matter of elementary prudence and common sense on their part.
    Sir S. McAdden: On a point of order. Is it not a gross breach of order for any member of the Government, no matter how exalted, to attempt to instruct you, Mr. Speaker, in your duties?
    Mr. Speaker: I did not understand the right hon. Gentleman to be trying to instruct me. If he had attempted to do so, it would have been an attempt in vain.

    Balance of Payments (Immigrants)
    Mr. John Hallasked the Chancellor of the Exchequer if the National Institute of Economic and Social Research has yet completed its study of the effect of the large-scale inflow of immigrants on Great Britain's balance of payments.
    Mr. Callaghan: I understand that the National Institute expects to report in about 12 months.
    Mr. Hall: Would not the right hon. Gentleman agree that that is a rather long time to wait? Would he not further agree that this is a very important problem, particularly in view of his reply to me on 22nd November, in which he accepted that problems were involved arising from the effect of this on our balance of payments?
    Mr. Callaghan: The National Institute has told me that it is undertaking a very deep-ranging study which will cover the general economic effects as well as the specific balance of payments effects of immigration.

    Selective Employment Tax
    Mr. Alasdair Mackenzieasked the Chancellor of the Exchequer if he will make a statement as to the cost of administering the Selective Employment Tax as it affects agriculture and other industries entitled to a refund.
    Mr. MacDermot: The cost of administering refunds to the private sector is about £375,000 in a full year, and about a third of this is for refunds to agriculture. The cost of collection cannot be separately identified.
    Mr. Mackenzie: Does the Financial Secretary recognise that this imposition

    1245
    is a waste of time and money? Would not he agree that it would be better to abolish this tax entirely, certainly for those industries which are given the refund?
    Mr. MacDermot: As I said in answer to a previous Question, it is not a waste of time and money. This tax, including the cost of paying the refunds, is an unusually cheap tax to administer.
    Mr. Deanasked the Chancellor of the Exchequer whether he will announce the results of the studies he has made of the effects of the Selective Employment Tax on those parts of the country with the smallest proportion of employees engaged in manufacturing industry.
    Mr. Callaghan: I cannot anticipate my Budget statement.
    Mr. Dean: Does the right hon. Gentleman realise from the figures he has already given that those parts of the country least able to pay are bearing the biggest burden? Will he give an assurance that he will put this right at an early date?
    Mr. Callaghan: The hon. Gentleman will understand from my original reply that I can give him no assurance, and that he can draw no deductions from my original Answer.

    Income Tax Returns (Accountants' Fees)
    Mr. Ronald Bellasked the Chancellor of the Exchequer why the fee of an accountant for preparing the Income Tax return of a taxpayer is not allowed as an expense against the income which is declared in the return.
    Mr. MacDermot: Because it is an expense which is unrelated to the earning of the income and is a personal outgoing for which the law does not give relief.
    Mr. Bell: Does the hon. and learned Gentleman realise that the Government have made the Income Tax laws so complicated that very few taxpayers are now able to make a return of Income Tax without the assistance of an accountant? That being so, is this not really an expense which is pertinent to the income being returned?
    Mr. MacDermot: No, Sir. I do not agree, and many taxpayers do make their own Income Tax returns.
    Mr. Patrick Jenkin: Is it not a fact that taxpayers who are in business are allowed to set off the expenses which they incur in preparing their tax returns? Would not there be a saving of time and expense to the Exchequer if this concession were allowed to all taxpayers?
    Mr. MacDermot: In the case of business and professional men, it is only because it would not be practicable to divide an inclusive accountant's fee into the part relating to the preparation of the accounts and the part that would not be deductible because it related to personal income that this exception is made.

    Savings Stamps
    Mr. Kenneth Lewisasked the Chancellor of the Exchequer whether he will reinstate the 6d. denomination of savings stamps for the benefit of young savers.
    Mr. Callaghan: No, Sir. The abolition of the 6d. stamp was necessary to reduce the very high administrative costs of the savings stamp scheme. I am confident that young savers will soon acquire the habit of collecting their sixpences until they can afford one of the new 2s. stamps.
    Mr. Lewis: Is the right hon. Gentleman aware that the very young saver gets the saving habit only because his parents teach him the habit? Is he aware that many parents cannot afford to provide their children with the money to buy these 2s. saving stamps, as a result of which a great disservice is being done to the National Savings Movement? Does he also recognise that this is causing a complication in the make-up of the 15s. savings book?
    Mr. Callaghan: I do not think so. This matter was thoroughly discussed with the National Savings Movement before the abolition took place. One factor was that more than 90 per cent. of the stamps were cashed before they were converted into securities. It was, therefore, felt that this was an administrative saving that could be made without harming the movement.

    Taxpayers (Investments)
    Sir G. Nabarroasked the Chancellor of the Exchequer whether he is aware that Her Majesty's Inspectors of Taxes respectively at Willesden, Cheltenham and Stratford, E.15, have requested from taxpayers lists of investments at 6th April, 1965, contrary to Treasury instructions and not required by Statute; and, as this practice represents unwarranted and illegal intrusion into private monetary affairs of investors, whether he will issue a general direction to all tax inspectors forbidding such practices in connection with capital gains duty.
    Mr. MacDermot: If the hon. Gentleman will let me have particulars of the cases to which he is referring, I will look into them and consider whether any reminder should be issued that there is no statutory requirement on taxpayers to supply this information.
    Sir G. Nabarro: While thanking the hon. and learned Gentleman for that invitation—and I will submit the evidence to him at once—may I ask him to recall that months ago the First Secretary assured the House that the Treasury was not conniving at inspectors of taxes breaking the law by demanding these details, which are personal and private to the taxpayer? Will he make it abundantly clear that no taxpayer has any statutory obligation to divulge these details?
    Mr. MacDermot: I think that the hon. Gentleman is under a misapprehension. No question of breaking the law arises. Not even civil servants need statutory authority to ask questions. The only thing that would be wrong—and I will consider the matter from this point of view when I see the evidence which the hon. Gentleman says he will give to me—would be inspectors suggesting that there is an obligation on taxpayers to provide this information. However, many taxpayers find it convenient to give it, and I do not see why we should stop them from doing so.
    Mr. Hordern: Do the inspectors point out on every occasion that taxpayers have no obligation to answer such questions?
    Mr. MacDermot: I will look into that matter when I have had the opportunity of studying any examples which may be given to me.
    Sir G. Nabarro: In view of the most unsatisfactory nature of the hon. and
    1248
    learned Gentleman's Answer, I give notice that I will raise this matter on the Adjournment as soon as possible.

    United States Securities
    Captain W. Elliotasked the Chancellor of the Exchequer what was the value of the United States securities owned by British nationals when these were compulsorily acquired by the British Government during the last war; and what is the value of these securities today, including the proceeds of sales already made.
    Mr. Callaghan: The value of United States securities acquired by Her Majesty's Government from British nationals during the war was about £163 million. Many of them were sold during the war and in more recent years. Securities to the value of £316 million held in liquid form were transferred to the first line of reserves in February, 1966. The value of those which remain is approximately £180 million.
    Captain W. Elliotasked the Chancellor of the Exchequer whether Her Majesty's Government have completed the sales of British-owned United States securities.
    Mr. Callaghan: No, though much the greater part of the portfolio is now in liquid form.
    Captain Elliot: Would not the right hon. Gentleman agree that the increase in the value of these securities as well as being most satisfactory is rather startling? Would not he consider that if he needs money to repay loans, it might be better to use these assets as a security to raise a loan instead of using the proceeds as if they were current earnings?
    Mr. Callaghan: I agree that it would be an alternative proposition. I have followed what I thought was an excellent precedent set by my predecessor, and I do not feel that it would be right for me to depart from it at this stage.

    New Commercial Buildings (Depreciation)
    Mr. Templeasked the Chancellor of the Exchequer what would be the estimated cost to the revenue of allowing depreciation at the rate of 10 per cent. per annum to be written off for new commercial buildings.
    Mr. MacDermot: The cost would rise annually to about £160 million a year, assuming current rates of expenditure.
    Mr. Temple: Is not the Financial Secretary aware that, in view of the enormous increase in building material stocks at present, this might well be a very good way of using an investment grant? If he cannot give an investment allowance, will he consider giving an investment grant for commercial buildings?
    Mr. MacDermot: That is an entirely separate question and one which the hon. Gentleman should address to my right hon. Friend the President of the Board of Trade.

    International Liquidity
    Mr. Newensasked the Chancellor of the Exchequer what progress has been achieved within the Group of Ten towards an agreement on the present international liquidity problems, as a result of the recent discussions on this subject.
    Mr. Callaghan: Welcome progress has been made in the joint talks between the International Monetary Fund Executive Directors and the Group of Ten Deputies. Two further meetings have been fixed for April and June.
    Mr. Newens: Is not my right hon. Friend disappointed at the slow progress that is being made towards solving the real problems that are involved? Can he forecast any real advance being made during the course of this year?
    Mr. Callaghan: I am, of course, disappointed that faster progress has not been made, but when dealing with international problems and when a number of countries have to be carried along at the same pace, one must temper one's disappointment with realism. As to future prospects for discussing this matter, two meetings have been fixed and they will show whether, when we get to Rio de Janeiro in the autumn, there are any likely prospects of agreement.
    Mr. Bruce-Gardyne: Does the right hon. Gentleman still expect to get agreement on a contingency plan in time for the I.M.F. meeting? Does he believe that this will be much more than a scrap of paper in view of the attitude of the
    1250
    creditor countries about the use of credit facilities?
    Mr. Callaghan: If heads of agreement were reached before September, then I would certainly feel, the nations having put their hand to them, that they intended that it should be more than a scrap of paper—otherwise we would all be wasting our time. As to future prospects, I think that the two meetings which are to be held will show us more clearly just what the prospects are.

    Industrial Investment and Production
    Mr. Sheldonasked the Chancellor of the Exchequer what action he is taking to increase industrial investment and industrial production.
    Mr. Callaghan: A temporary increase in the rates of investment grant was announced by my right hon. Friend, the President of the Board of Trade, on 1st December last. The reduction in Bank Rate on 26th January, the fall in interest rates generally, and the special aids given to the development areas should also be helpful to industrial investment, and hence to the prospect for industrial production.
    Mr. Sheldon: Is my right hon. Friend aware that in the last six months the Index of Industrial Production has fallen from 135 to 131 and that investment this year is not expected to be better than 10 per cent. behind last year and that, despite the many burdens which my right hon. Friend has to bear, the House expects him to accord the highest priority to investment and output of industry in this country?
    Mr. Callaghan: I entirely agree with my right hon. Friend.
    Sir G. Nabarro: Right hon. Friend?
    Mr. Callaghan: He will soon be my right hon. Friend. He will certainly be right hon. before the hon. Gentleman is. I agree with my hon. Friend's general philosophy on this matter and it is for this reason that special aids have been given for investment. We must ensure, however, that there will be a reasonable return on capital when an investment has taken place and that there will be a market for the product; and the Government's policy on this matter has been clearly stated.
    Mr. Hirst: Does the Chancellor of the Exchequer appreciate that even special aids when not—as I think they are—wrongly directed, will not affect this issue as long as industry and commerce do not see any reasonable sign of consumer demand? They will not be bribed merely into producing.
    Mr. Callaghan: The Government's policy is not to have a general consumer reflation. It is to encourage investment through greater exports, which, I am very glad to say, is already taking place, and through increasing investment in particular ways that will enable healthy growth to follow.
    Mr. Harold Walker: Would not my right hon. Friend agree that his report is an indictment of the private manufacturing sector of the economy, and will he not seek to utilise the resources of the State, including the Industrial Reorganisation Corporation, to offset the weaknesses of private manufacturers?
    Mr. Callaghan: I do not think that it would be possible for the State to undertake all the private investment that I expect manufacturers to do. I do not think that it is an indictment of them if they look cautiously ahead at market prospects and decide what their future will be, but it should be the aim of all of us, on all sides of the House, to ensure that when we have a healthy period of growth the markets will be there.
    Mr. Hordern: Is the Chancellor of the Exchequer aware that the Index of Industrial Production is rather below what it was at the end of 1964? Are we to look forward to another 100 days of dynamic Government?
    Mr. Callaghan: The Index of Intrial Production is not the most reliable of the indices we have to provide. I remember that once during my predecessor's term of office it was revised by four points in two months, in an upward direction on that occasion, but clearly we need an increase in industrial production, and it is towards that that the Government's policy is directed.

    Personal Savings
    Mr. Boyd-Carpenterasked the Chancellor of the Exchequer what proposals he now has to encourage private savings.
    Mr. Callaghan: I am glad to say the level of personal savings remains high. I would, of course, like to see this level even higher, and am always willing to consider ways of increasing it.
    Mr. Boyd-Carpenter: Can the right hon. Gentleman assure the House that he is actively considering such further steps, in view of his own observation last year that the higher savings were, the less the need for tax?
    Mr. Callaghan: Yes, Sir. The right hon. Gentleman has in his time gone through a period similar to that through which I am passing at this moment.

    Earned Incomes (Taxation)
    Mr. Boyd-Carpenterasked the Chancellor of the Exchequer what percentage of his earnings above £5,000, £8,500, £10,000, and £15,000 a year is retained after payment of income tax and surtax by a married man with two children and no unearned income; and what are the comparable figures for a similar man after payment of direct taxation in the United States, France, West Germany and Japan, based on information he derives from international organisations.
    Mr. MacDermot: It depends on how much extra earnings he has. I will, with permission, circulate a table in the OFFICIAL REPORT.
    Mr. Boyd-Carpenter: Does the Financial Secretary accept that economic harm is done to the country's competitiveness if rates of personal taxation remain higher than those on comparable people in competing countries; and that, indeed, once we were in the Common Market these rates would be impossible to maintain?
    Mr. MacDermot: No, Sir. I think that the right hon. Gentleman's proposition is much too wide, and perhaps he had better wait until he sees the table.
    Mr. Newens: Is my hon. and learned Friend aware that many wage earners are receiving incomes not sufficient to keep their families at subsistence level? Is it not more important to turn attention to that type of person before turning to the more highly paid executives?
    Mr. MacDermot: We shall take all relevant matters into account, but I agree

    1253
    with my hon. Friend that our prime object is to get fairness in our tax system.

    PERCENTAGE OF ADDITIONAL EARNINGS (UP TO £100) RETAINED AFTER PAYMENT OF INCOME TAX AND SURTAX, OR THEIR EQUIVALENTS

    Level of earnings

    United Kingdom*

    United States†

    France

    West Germany‡

    Japan§

    £5,000

    …

    …

    …

    …

    63·3

    62·1

    78·4

    61·7

    42

    £8,500

    …

    …

    …

    …

    43·3

    47·3

    71·2

    54·7

    36

    £10,000

    …

    …

    …

    …

    26·25

    41·6

    60·4

    52·9

    36

    £15,000

    …

    …

    …

    …

    16·25

    37·6

    53·2

    49·8

    30

    Notes:

    * Excluding the effect of the 10 per cent. surcharge, and assuming the children are both under 11.

    † An equivalent rate of $5 = £1 has been assumed to allow for the substantially higher cost-of-living in the United States. The figures shown relate to California. The tax deducted includes Californian income tax which is partly deductible for Federal income tax; it also includes the proposed 6 per cent. Vietnam surcharge on Federal income tax.

    ‡ The scale rises continuously, and so the percentage remaining relates only to small increases in earnings above the levels given.

    § An equivalent rate of 1,010 Yen = £1 has been taken. The figure allows for Prefectural and Municipal Inhabitants Income Tax, not deductible for the National Income Tax.

    Foreign Exchange (Estimated Saving)
    Mr. Barnettasked the Chancellor of the Exchequer if he will give an analysis of the estimated saving of £100 million in foreign exchange forecast on 20th July, 1966, together with a comparative analysis of the savings to date.
    Mr. Callaghan: I would refer my hon. Friend to the Answer I gave to the hon. Member for Belfast, North (Mr. Stratton Mills) on 22nd February. —[Vol. 741, c. 319–20.]
    Mr. Barnett: Does that reply mean that there will be a saving of at least £100 million in 1968–69; that this will be the real net saving, and not be offset by increases elsewhere?
    Mr. Callaghan: The figures that were published in the Defence White Paper, which I gave in my earlier reply, show that defence savings will build up to an annual rate of about £75 million by the end of 1967–68.
    Mr. Stratton Mills: Will the Chancellor of the Exchequer remind the House that the Answer to the Question to which he refers shows that the saving during 1967–68 would be only £70 million, some £30 million short of what the Prime Minister promised on 20th July?
    Mr. Callaghan: That is the figure I gave of the savings I could see at this moment building up during 1967–68.
    Mr. Barnettasked the Chancellor of the Exchequer what is his estimate of
    Following is the Table:
    the saving in foreign exchange in 1966–67 and 1967–68, respectively, from the restriction of foreign travel allowance for holidays to £50 per head and if he will give an assurance that when the restriction ends in November, 1967, he will revert to the practice previously in force.
    Mr. Callaghan: It is estimated that the exchange control measures taken in July, of which travel restrictions were one, will save about £50 million a year in foreign exchange. A decision about the next travel year will depend on the balance of payments prospects generally, and on experience of the present arrangements.
    Mr. Barnett: I had understood that this restriction was to last only 12 months. Does this reply mean that it could last longer? Is not my right hon. Friend aware that this restriction is giving a totally false impression of Britain abroad, and would he perhaps reconsider the Answer he has given?
    Mr. Callaghan: No, Sir. I see no reason to reconsider the Answer I have given, which is that the decision for the next travel year will depend on how well we do on balance of payments generally.

    RHODESIA
    Mr. Biggs-Davisonasked the Prime Minister what new efforts he has made to solve the Rhodesia problem.
    The Prime Minister (Mr. Harold Wilson): I would refer the hon. Member

    1255
    to the many Answers to Questions on this subject given by my right hon. Friends and myself in recent months.
    Mr. Biggs-Davison: While recognising that the Prime Minister has many problems on his mind, may I ask him whether he is now able to answer the question he failed to answer on 21st February when I asked him a supplementary question, namely, whether the Government, being unable to take on South Africa, are contemplating the use of force against Rhodesia?
    The Prime Minister: I was not aware that I had failed to answer the question. The answer is that we are certainly not contemplating and certainly do not intend to use force.
    Mr. Bellenger: In view of the many grave complications that are bound to arise—for example, in the repudiation of debt guaranteed by the British Government and other matters—can my right hon. Friend say whether an initiative will be taken at some time, or is it to be left to the United Nations?
    The Prime Minister: Debts are a separate question. There has been a whole succession of defaults by Rhodesia on international borrowings. As to the United Nations, as my right hon. Friend knows, it was through the United Nations that the resolution on mandatory sanctions was obtained, and this will have its effect on Rhodesia.
    Mr. Sandys: Since the Prime Minister has told us that the estimate of the cost of the Rhodesian crisis which he gave to the Commonwealth Prime Ministers has proved too high, why does he so doggedly —[Laughter.]—refuse to give us the revised figure? Is this not another example of his contemptuous attitude towards Parliament?
    The Prime Minister: No, Sir. My contempt was to the right hon. Gentleman for his failure to tell us where he got that document from; and also to the fact that he has systematically tried to represent my statement to the Commonwealth Prime Ministers as being the cost of sanctions when it was the then estimate, which was never withdrawn, of the total cost to us of what Rhodesia has involved us in. With regard to a revised estimate we do not have final figures, but if the
    1256
    right hon. Gentleman cares to put down a Question I will certainly do my best to give him the up-to-date figure for 1966.
    Mr. Faulds: Can we have an assurance that the necessary contingency planning has been made if at the end of the day we have to snuff out Smith and his rebel clique by military means?
    The Prime Minister: I have already made it plain that the right way to solve this problem, after the very serious efforts we made in December to do it by discussion, does not include the use of military force.

    EUROPEAN ECONOMIC COMMUNITY
    Mr. Winnickasked the Prime Minister if he will make a progress report on his visits to the European Economic Community countries; and if he will now make a statement of the Government's future intention on joining the European Economic Community.
    Mr. G. Campbellasked the Prime Minister if he will make a statement on the situation resulting from the visits he has so far made to European capitals on the question of the United Kingdom joining the Common Market.
    Mr. Channonasked the Prime Minister whether it is now the intention of Her Majesty's Government to apply to join the European Economic Community.
    Mr. St. John-Stevasasked the Prime Minister whether he will make a statement on the progress of Her Majesty's Government's policy towards the European Economic Community.
    The Prime Minister: I have at this stage nothing to add to the reports I have already given the House on the visits of my right hon. Friend the Foreign Secretary and myself to Rome, Paris, Brussels, Bonn and The Hague.—[Vol.739, c. 643. Vol.739, c.1765. Vol.740, c.769. Vol.741, c.1427. Vol.742, c. 267.]
    Mr. Winnick: Does my right hon. Friend agree that a majority of people in this country are neither fanatically for or against our entry but believe that we should go in if suitable conditions can be

    1257
    negotiated, and will he agree also that there are certain matters, such as the free movement of capital, which will need a good deal of negotiating before our entry?
    The Prime Minister: I agree that there is a considerable body of opinion, the majority of opinion in this country, which thinks that we should enter the European Economic Community if the right terms can be obtained. The purpose of our visits is to learn more about the sort of conditions which could be obtained. Certain aspects of the question of the free movement of capital raise one of the difficult questions which I have told the House still remain unsolved.
    Mr. G. Campbell: Although the visit to Luxembourg still has to be made, has the Prime Minister now enough information to decide what to do next, and will the Government take a decision upon the next move soon?
    The Prime Minister: As I have told the House, as soon as the complete round of visits is over it will then be for the Government to consider their next step. I agree with what I think is at the back of the hon. Gentleman's mind. I have said more than once that it is essential to maintain the momentum of what we have started.
    Mr. Channon: I agree very much with what the right hon. Gentleman has just said about maintaining the momentum, but does he think that after his visit to Luxembourg he will be able to make a statement in the House on the Government's decision before the Easter Recess?
    The Prime Minister: I doubt that it will be before the Easter Recess. The whole House will recognise the serious importance of any decision of this kind. It is certainly our intention to get down to this question as quickly as possible after we, my right hon. Friend the Foreign Secretary and I, have been able to evaluate the results of our visits. A decision will not be delayed a day longer than is necessary, but it will be recognised that, while we desire to maintain the momentum, momentum depends on other people as well.
    Mr. St. John-Stevas: Will the Prime Minister show some courage and brave the yelps and sharp nips of his—[HON.
    1258
    MEMBERS: "Oh."]—it should have been hyenas—the yelps and sharp nips—[Interruption.]
    Mr. Speaker: Order. We must get away from the metaphors and come to the question.
    Mr. St. John-Stevas: —the nips of his metaphorical Friends below the Gangway and take a decision on entering the Common Market now?
    The Prime Minister: I have already answered the question about what we shall do in coming to a decision after returning from Luxembourg. As for the rest of that laboured supplementary question, the hon. Gentleman's standing outside the House—I say this quite seriously—is so great in other matters that it is unfortunate that he believes that he is also a Parliamentary wit. If he goes on like that, he will never reach half that level.
    Sir G. de Freitas: In any consideration of our obligations to the Commonwealth, which are very real, will my right hon. Friend take into account that yesterday it was announced that Kenya, Uganda and Tanganyika were once more opening formal negotiations for association with the Six, thus following the example of Nigeria?
    The Prime Minister: Yes, Sir, that is very important for dealing with an important area of Commonwealth difficulty, although, as the House recognised when negotiations were on foot four or five years ago, there are other very important Commonwealth problems particularly in the area of the temperate countries in relation to their food exports to Britain.
    Mr. Turton: After the Prime Minister's past protestations of the need to safeguard the Commonwealth, will he now give an undertaking that before he reaches a decision on this matter he will have consultations with the Prime Ministers of the leading Commonwealth countries, such as Australia and New Zealand?
    The Prime Minister: As the right hon. Gentleman knows, my right hon. Friend the Commonwealth Secretary is on the way back from Australia and New Zealand and has discussed these matters

    1259
    there. I assure the right hon. Gentleman that we shall do everything reasonable in the matter of consultation with Commonwealth countries as well as with the E.F.T.A. countries, whose interests are concerned.

    MINISTER OF LABOUR (SPEECH)
    Mr. Stratton Millsasked the Prime Minister if the public speech of the Minister of Labour in Glasgow on 12th February on an incomes policy represents the policy of Her Majesty's Government.
    The Prime Minister: Yes, Sir.
    Mr. Mills: Has a final decision been made to retain some form of statutory control over incomes?
    The Prime Minister: As the hon. Gentleman knows, negotiations with the T.U.C. and the C.B.I. have been continuing for some time. I met the T.U.C. representatives last week on the eve of their meeting of trade union executives. Discussions will, of course, continue with the T.U.C. about what is needed to supplement its voluntary scheme, on which, I am sure, the whole House will wish to congratulate the T.U.C., by other means particularly while the scheme is getting under way.
    Mr.Park: Will my right hon. Friend agree that the voluntary approach as proposed by the T.U.C. is much more constructive than the continuance of punitive legislation, and will he accept that the possibilities of success of this voluntary approach would be gravely endangered if the Government were to seek to introduce new legislative powers?
    The Prime Minister: It is not quite so simple as the antithesis between purely voluntary means and purely statutory means. We have always taken the view that the policy could never succeed by statutory means alone. Indeed, the great success of the last six months of last year was due above all to the voluntary co-operation given to the Government. At the same time, we have doubt about whether, particularly in the early months when there will be a number of claims which have been postponed awaiting settlement, when the new machinery is getting into operation, it can function
    1260
    successfully unaided. That is the basis on which we are having discussions with the T.U.C.
    Mr. Heath: When will the House be told what the proposals are? They are being discussed very widely outside and conveyed to the Press. Cannot the House of Commons be told what the proposals are and also be allowed to debate them?
    The Prime Minister: I know that the right hon. Gentleman appreciates the great importance of achieving a successful and effective policy in this field. I saw in the gossip columns of The Times yesterday that he has now made this plain. [HON. MEMBERS: "Get on with it."] I think it rather important that the right hon. Gentleman should make clear where he stands on this. As regards the discussions themselves, having regard to the nature of the matter, the right hon. Gentleman, as a former Minister of Labour, will know how important it is that we continue to discuss even if these things do reach the light of day. As regards a statement in the House and a possible debate, I thought that the right hon. Gentleman had said a little time ago that he would propose an economic debate on the first available Supply Day. We shall be very glad to go into these questions with him on that occasion.
    Mr. Ashley: Will my right hon. Friend bear in mind that, although the vote of the trade union executives in support of a voluntary prices and incomes policy is to be welcomed, there were nearly one million votes cast against that voluntary policy. In view of this, is it not necessary for him to retain some powers of delay under Part II of the Act rather than Part IV when it finishes in August?
    The Prime Minister: As I said last week, not only the decision to have a continuing incomes policy but the surrender of sovereignty by individual unions to the T.U.C. was a historic decision which all of us must welcome. The only doubt arising, I think, relates to the treatment of minorities who seek their own selfish interests and also to the early period when, as I say, there will be all the delayed wage claims in the pipeline. This is why we feel that it needs some supplementation, and that is what we are discussing with them.

    THE PRESS
    Mr. Frank Allaunasked the Prime Minister what steps he proposes to prevent the further shrinking of newspaper control into fewer hands; and if he will consider subsidising the supply of newsprint to the less highly profitable newspapers.
    Mr. Bostonasked the Prime Minister if, in view of the report of the Economist Intelligence Unit's inquiry into the newspaper industry, a copy of which has been sent to him, he will now undertake to appoint an official inquiry into the industry.
    The Prime Minister: I would refer my hon. Friends to the speeches made by my right hon. Friends the President of the Board of Trade and the Minister without Portfolio in the debate on the Press on 8th February.—[Vol. 740, c. 1663. Vol. 740, c. 1776.]
    Mr. Allaun: Has no action at all followed the recent debate, since when the price of newsprint has gone up by £2 a ton? Does my right hon. Friend propose to do nothing before further closures take place?
    The Prime Minister: I said in January, and my right hon. Friend said in February, that this must in the first instance be a matter for the newspaper industry itself. There is effective machinery for discusison, with representation from both sides. If they have any propositions to put to the Government, we shall consider them. I said in January also that there seemed to me to be no reason why any existing newspaper should have to close in present circumstances.
    Mr. Boston: Will my right hon. Friend take it that, while we accept the paramount need to ensure Press freedom, many of us feel that further closures would themselves impair Press freedom? Has he completely ruled out the possibility of help for the Press from public sources, with adequate safeguards, if necessary?
    The Prime Minister: The feeling of both sides of the House in that debate was, as I said in January, that there are grave dangers in any kind of public intervention in this way, however carefully
    1262
    one were to erect safeguards against possible abuse. There seems to be no reason why any newspaper should close down. If one were in danger of so doing, if the industry or the newspaper concerned approached the Government, we would then consider whether it was possible to give help while maintaining adequate safeguards.
    Mr. Thorpe: Is the right hon. Gentleman aware that the newspapers themselves are the last to want State subsidies and State help? Will he agree that the E.I.U. Report, which was commissioned by the industry, coupled with the recent successful talks with The Guardian, are a step in the right direction, and is not the further fact that the Newspaper Proprietors Association and the trade unions are getting down to talk about the whole future of the industry the most hopeful feature? Is it not much better to carry on letting them run their own affairs?
    The Prime Minister: There has been considerable progress since the turn of the year—I refer particularly to The Guardian discussions and what is now going on—but I think that one danger which all of us feel is that, while newspapers would not want to approach the Government or anyone else for help, sometimes things go on till the very last moment without anyone knowing that a paper is likely to close down, and it closes down, as on a famous occasion, between one edition and the next. This would be deplored by the whole House
    Sir A. V. Harvey: Will the Prime Minister give an assurance that, in the event of Lord Thomson trying to take over the Sun, he would not condone it?
    The Prime Minister: Any question of take-over within the newspaper industry is now, in terms of laws passed in the House, one on which my right hon. Friend the President of the Board of Trade can refer the issue to the Monopolies Commisison to see whether there would be undesirable concentration of ownership.
    Mr. Alfred Morris: Does my right hon. Friend feel that a proper balance is being achieved in the allocation of Government advertising in the Press?
    The Prime Minister: That matter is continuously being reviewed. It is the duty of those responsible for placing

    1263
    Government advertising to see that it is done in accordance with the best commercial practice, in terms of the best yield in advertising readership for the money spent. We are examining that carefully all the time, and if it were possible to make improvements in the system I would be very anxious to see that it was done.
    Mr. Murray: Is it not possible for my right hon. Friend to look again at a levy on Press advertising or newsprint? Before he listens to the voices opposite about the freedom of the Press, will he ask some of the former eight editors of the Daily Mail about it?
    The Prime Minister: The question of proprietorial intervention is not raised by the first part of my hon. Friend's question. My hon. Friend will know that while there have been proposals for levies on advertising, similar to what is already done in commercial television, it is very difficult to draw the line between the big, medium-sized and small papers; and some small local papers which are so essential to local services and the functioning of our democracy might be the first to suffer if that policy were adopted.

RAILWAYS (FREIGHTLINER TERMINALS)
The Minister of Transport (Mrs. Barbara Castle): Mr. Speaker, with your permission, and that of the House, I wish to make a statement.
As the House will know, I have during the last week been holding intensive discussions with the National Union of Railwaymen on the opening of freightliner terminals to all road haulage vehicles. The dispute between the National Union of Railwaymen and the Railways Board over open terminals was a longstanding one which had prevented the full use of freightliner services, and the opportunity to discuss it further arose when the Union asked to see me on 16th February about the completion of the Transport Holding Company's acquisition of the Tartan Arrow Company.
I am happy to be able to tell the House that, in the light of the discussions and of the assurances given, the N.U.R. Executive withdrew its objection to open terminals and agreed to co-operate in the full expansion of the freightliner network.
1264
It is a primary aim of my policy to exploit to the full the railways' ability to transport large flows of freight in containers with maximum efficiency; this will be a vital element in developing the new railway.
The Railways Board will shortly be putting forward for my approval proposals for the investment of about £7 million in Stage 2 of the freightliner project. Expenditure of this order could not have been economically justified without open terminals. The Board will also be seeking my approval for further investment in cartage vehicles to service the freightliners, and this is expected to total about £2 million. With the establishment of open terminals, I confidently expect that these proposals will prove to be soundly based.
I am anxious that the railway workshops should share in the benefits of the expansion of the freightliner network, and I have just approved the setting up of a modern and efficient container production line which will enable the Derby workshops to manufacture up to at least 4,000 containers a year. The removal of the present restrictions on the Board's powers of manufacture which I shall propose in my forthcoming Transport Bill will also help to ensure that the railway workshops in general, on whose modernisation about £17 million has been spent in the past few years, are used to their fullest extent.
As I said in the House before Christmas, the British Railways Board and the Transport Holding Company have already taken the first steps to create an integrated freight system by establishing joint machinery to promote interworking in the parcels and sundries field. As a further step towards integration it has now been agreed between the Railways Board and the Transport Holding Company that the Board will take a 50 per cent. holding in Tartan Arrow, and so become joint owners with the Transport Holding Company.
The Board and the Holding Company will make an immediate start on securing the mutual benefits to be derived from joint ownership of Tartan Arrow even before the legal formalities are completed. Discussions will cover means of integrating the use of trains and job opportunities. There will be full consultation with all the unions concerned.

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The Chairman of the Railways Board has reaffirmed the assurances already offered to railwaymen that there will be no redundancies among cartage or other railway workers as a result of the opening of the terminals to private hauliers and that earnings will be suitably safeguarded. The Board will shortly be starting discussions with the trade unions with the aim of translating these assurances into an agreement which will meet specific points raised by the N.U.R. Executive.
The service planned by Tartan Arrow will be starting between its own depots at London and Glasgow next month with one train daily in each direction. The Railways Board also intends to add further trains to its own London-Glasgow service in the near future as traffic expands with the establishment of open terminals.
In these ways we shall continue to work towards the fullest use of freightliners. I look forward to the continuing expansion of this traffic, in which I am confident that all sections of the railway industry will share.
Mr. Peter Walker (Worcester): Is the right hon. Lady aware that we on this side of the House are very relieved that at last all these terminals will now be opened to the majority of lorries wishing to deliver goods to them instead of just the minority in public ownership? At this moment, are all the terminals open to all free enterprise lorries, or will there be need to await the detailed agreements which the right hon. Lady mentioned? Has the Transport and General Workers' Union now changed its former position of agreeing to their drivers' delivering to only three of the terminals for an experimental year? Will it now allow its drivers to deliver to all the terminals?
Can the right hon. Lady also assure the House, as I gather that there is some delay in the programme due to a shortage of containers, that before the railway workshops' production line comes into operation private enterprise will be used to provide such containers if necessary? Does she now believe that the original estimates in the Beeching Report that with open terminals £100 million invested in the freightliner train project could reduce the railways' deficit by as much as £50 million a year?
Mrs. Castle: I am glad that the hon. Gentleman shares my delight at our success in opening the terminals. The agreement to open the terminals came into operation automatically. The National Union of Railwaymen's Executive was speaking on behalf of the whole membership.
On the hon. Gentleman's second question, one of the unions in Manchester—not the Transport and General Workers' Union—had some difficulty about allow-in B.R.S. vehicles to use the terminals, but the Transport and General Workers' Union is certainly not raising any objection to the decision.
The hon. Gentleman raised so many points that I have forgotten his third.
Mr. Walker: Containers in workshops, and the other was on the Beeching point.
Mrs. Castle: The Railways Board is expanding its manufacture of containers as rapidly as possible and is confident that shortages will have been met by the end of April.
The hon. Gentleman's fourth question was about the Beeching investment programme. As I have said, I shall shortly have before me the request for the second stage of investment, £7 million plus £2 million on cartage vehicles. We must wait and see what the response is to the use of the terminals in the new situation before we consider the investment for the third stage.
Mr. Ron Lewis: Is my right hon. Friend aware that we congratulate her on her personal success in ending the dispute? Many of us know that it would not have been possible to have had a solution except in the context of her policy for integrating road and rail freight traffic, thus offering a new deal to the railways and the railwaymen.
Mrs. Castle: I am grateful to my hon. Friend for those remarks. I think that he is quite right. As I have said time and again, the railwaymen had legitimate anxieties and fears which it would not have been possible to meet except in the context of my wider policy.
Mr. Bessell: Is the right hon. Lady aware that we on the Liberal bench welcome her statement? We congratulate her upon her success in the negotiations, which is part of the realistic programme she has adopted towards British

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Railways, and which we thoroughly applaud. Has she any idea of the amount of increased tonnage that the agreement is likely to result in British Railways carrying?
Mrs. Castle: I am grateful to the hon. Gentleman for his kind and generous remarks. It is impossible for me to say what increase there will be in tonnage as a result of the present agreement. All we can say is that the way is now open for a rapid expansion of the tonnage which can be carried by our freightliners. I am sure that the Railways Board is determined to go out and get as much business as it can.
Mr. J. T. Price: Is my right hon. Friend aware that her statement will give unqualified pleasure to every hon. Member on this side of the House—which is something in these days? Does not she agree that the removal at long last of the artificial restrictions on making the fullest use of our national resources in the railways, both in rolling stock and in the new design to relieve the enormous congestion on the roads, plus her desire to give greater freedom to the railway workshops, will increase the morale of the industry and of all of us on this side who have advocated this policy for so long?
Mrs. Castle: I thank my hon. Friend. I know that he will agree—I am sure the whole country agrees—that in our railway system we have a valuable national asset which must be used to carry an increasing share of the traffic which threatens to congest our roads. Therefore, this agreement marks an important break-through.
Mr. Fortescue: Is the right hon. Lady able to tell the House what element of subsidy there is now in the charges made by British Railways for transport by freightliners?
Mrs. Castle: I would not accept that there is an element of subsidy. British Railways are anxious to earn as much money as they can.
Mr. Mapp: While congratulating my right hon. Friend in a very broad sense in taking the political poison out of this subject, may I press her more strongly about the capital investment she mentioned, totalling £9 million? Is this based
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on a market survey of the next five years or does she expect the railways to take their courage in their hands and look forward in terms of 10 years, in which case the investment is not by any means enough?
Mrs. Castle: I would not like my hon. Friend to think that this stage will be the final stage of investment in the freightliners. On the contrary, I am hoping that, when the stage 2 investment comes into play, leading to the opening of eight more terminals, we shall begin to get manufacturers accustomed to using the freightliners and that this will merely be paving the way for still more investment in future, which I shall certainly welcome and accept if it can be economically justified.
Mr. Ridley: Since the right hon. Lady is making the railways go into the manufacture of containers, will she allow private enterprise to go into the running of railways?
Mrs. Castle: I did not think that it was ever the policy of right hon. and hon. Members opposite to take away from the nationalised industries the manufacturing powers they already possessed. What I propose to do, however, is to expand those powers so that the railways can compete fully and fairly with private enterprise for the home market and in the export trade.
Mr. Francis Noel-Baker: Is my right hon. Friend aware that railway workshop men throughout the country, not least in Swindon, will wish to join us in congratulating her and thanking her very warmly for what she said about the workshops? Can she give an unqualified assurance that they will be given a fair crack of the whip in container manufacture and in all other work when her legislation goes through?
Mrs. Castle: Yes, I can. It has always been the basis of our policy that the railway workshops must be able to manufacture and produce commercially. There is no intention of having any subsidy here. I am confident that, with modernisation, the workshops will be able to compete fully and fairly. Indeed, I visualise the manufacture of wagons in the workshops increasing from the present figure of 280 a year to more than double

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—about 600 a year—and container production in Derby, Glasgow and Horwich reaching 6,000 containers a year compared with 1,500 at present.
Mr. Patrick Jenkin: When the right hon. Lady is framing her Transport Bill in relation to these manufacturing powers, will she consider the wisdom of introducing provisions for the availability of figures comparable with those that were introduced by the Minister of Power into the Iron and Steel Bill? Unless these figures are available regularly, we cannot take her assurance that these are intended to be fully commercial ventures.
Mrs. Castle: I appreciate that it is important to have separate costing of workshops. I do not think that the railwaymen want a hidden subsidy here. My purpose is to enable the railwaymen to hold up their heads. They do not want to get any hidden or secret advantage. The exact way in which we shall interpret that concept in the new Bill is being discussed in detail with the C.B.I. and the unions.
Mr. Manuel: Is my right hon. Friend aware that every hon. Member on both sides of the House with the well-being of British Railways at heart will heartily and sincerely congratulate her on the agreement she has attained? Is she further aware, however, that if hon. Members opposite had continued in
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office, there could have been no decision to go ahead with liner train terminals until there had been full agreement with the unions, and that this would have held us back for many years?
Mrs. Castle: I think that it is true that the railwaymen—the N.U.R., in particular—had many fears and anxieties as a result of years during which our railway system was allowed to run down under unqualified commercial considerations and during which "integration" was a dirty word. Now they know that they are to collaborate with a policy that will give railwaymen a fair deal.
Several Hon. Members rose—
Mr. Speaker: Order. We must move on.
Later—
Mr. Baxter: On a point of order. I regret very much that I was not called —and it is quite in order that I should not have been—but I would have liked someone to pay tribute to my right hon. Friend the Member for Hamilton (Mr. Tom Fraser) for the work that he has done in respect of the project which we have been discussing.
Mr. Speaker: An ingenious point of order, which the House has taken in good spirit, I think.

ORDERS OF THE DAY

  LEASEHOLD REFORM BILL
  Order for Second Reading Read.
  Mr. Speaker: Before I call on the first right hon. Gentleman to speak, may I remind the House that many hon. Members have vital constituency interests in the Bill before the House this afternoon. I appeal to hon. Gentlemen whom I call to be reasonably brief in their speeches. I hope that the House will take note of what I am asking.
  3.50 p.m.
  The Minister of State, Ministry of Housing and Local Government (Mr. Frederick Willey): I beg to move, That the Bill be now read a Second time.
  I am entitled to anticipate that this Motion will be generally acceptable to the House. Just a year ago, the House unanimously welcomed—although some Members opposite expressed their approval in somewhat niggardly terms—the proposals contained in the White Paper as a basis for legislation. This Bill is based on the White Paper.
  Just before the last General Election, the Conservative Party took the course which the Monday Club has described—and I am sorry that the Monday Club should regard it as regrettable—of
  "jumping on the bandwagon of leasehold enfranchisement".
  Indeed, at the last General Election, the Conservative Party declared that it would
  "legislate to allow ground leaseholders to buy or rent their houses on fair terms except where the property is to be redeveloped."
  I emphasise that any such action must depreciate the landowner's interest. We know that the Conservative Party would not shrink from that consequence. We have the precedent of the Landlord and Tenant Act, 1954. That Act has been a complete failure. It has not stemmed the continued demand for leasehold reform. The Conservative Party admitted this at the last election, and do so today. The 1954 Act allowed the leaseholder to continue in occupation, but only under the terms of a statutory tenancy and only at a rack rent.
  The tenant got no real security, he was forced to pay a rent for occupying his own house, and was often faced with
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  onerous dilapidation claims. But, at the same time, the Act drastically depreciated the value of the landowner's interest. For example, a freeholder's interest which had previously been worth £1,500 as a result of the 1954 Act was depreciated to £550; a freeholder's interest of £4,000 was halved to £2,000. Hon. Members opposite are the last people in the world who can complain of leasehold reform depreciating the value of the landlord's interest.
  But all this was quite pointless, because no one was satisfied—neither the landlord nor the leaseholder. Certainly, no one today would claim that this particularly stupid legislation has provided a solution to the leasehold problem, and, clearly, there is still a need for reform.
  What I think is equally clear is that the need for such reform is urgent. A great many leasehold estates were built in the second half of the 19th century— particularly in South Wales and in some English industrial areas. The houses had to be built near the pit, or near the mill or factory, and landowners used their monopoly power to allow only leasehold development. Now, in growing numbers, these leases are drawing to an end, and the leaseholders are experiencing the full harshness of the leasehold system.
  When I looked at the leasehold problem, another factor struck me very forcibly. Nowadays practically everyone buys his house on mortgage. With a good many years to run, a purchaser of a lease will pay virtually a freehold price. But, as he pays off the mortgage, so also the lease runs its course. What happens when he reaches the end of the mortgage term? The owner-occupier finds that after he has discharged the mortgage he will have an interest which is far less valuable than it was when he bought it. Indeed, he may find it difficult to sell, because a subsequent purchaser may not be able to get a mortgage—and we should not forget that the 1962 White Paper told us that there may be mortgage difficulties whenever a lease
  "has about 30 years or less to run".
  The owner-occupier buying on mortgage finds himself caught—the victim of the leasehold system. This is now a matter of urgency, because this is the reality now facing many owner-occupiers who bought their houses when they were particularly scarce, on setting up home immediately

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  after the war. It is callous to say that they did so with their eyes open. In the first place this is not true, and in the second place, houses were scarce and they had no choice.
  Thirdly, when we talk of leasehold, we should not receive ourselves that we are talking about a relic of the bad old Victorian days. A large number of houses now being built are being provided on leasehold terms at a price which is little, if anything, less than a freehold price, and subject to ground rents which very often are quite substantial.
  In Greater London, for many years now, about half of the total development of private housing estates has been on leasehold terms. Again, this is largely because houses are still scarce and the house purchaser has really no alternative. Again, against this exploitation, I am sure it is right to protect owner-occupiers by giving them the right to purchase the freehold at a fair price.
  But quite apart from any question of exploitation, supposing that some house purchasers prefer to buy on leasehold terms, because it may be slightly cheaper, what we are considering are people's homes, and I cannot see any reason why owner-occupiers should not be able to purchase greater security—should not have the opportunity later of buying the freehold on fair terms.
  Mr. Alfred Morris (Manchester, Wythenshaw): While everyone accepts my right hon. Friend's skill and perseverance in bringing in a most important Measure of this kind, may I ask whether, during his speech, he will be spelling out what he means by fair treatment? Can he give any example of what would be the terms for the average type of property?
  Mr. Willey: My hon. Friend has anticipated what I will refer to in my speech.
  I can fairly assume, I am sure that my hon. Friend does, that both the need for leasehold reform and the urgency of that need are established. Equally, I am convinced that the pattern of that reform—leasehold enfranchisement and the extension of the leases—is now generally accepted. The Labour Party has been committed since 1951 and—in spite of
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  the Monday Club—the Conservative Party since the last General Election.
  Faced, then, with the urgent need for leasehold reform, 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 improvements created and maintained wholly by and at the expense of a succession of leaseholders.
  This is nothing but legal confiscation. What is demanded is a radical change of the law. What is needed—and this is just what—
  Mr. James Dance (Bromsgrove)rose—
  Mr. Willey: Mr. Speaker has said that a large number of hon. Members wish to take part in the debate, and I would rather open the debate and allow hon. Members to participate later.
  I have been told—and, no doubt, I will be told again this afternoon—that what the Bill is doing is wrong, because it divides the realty; it separates the buildings from the land. But it is not the Bill that does this; it is the leasehold contract itself.
  Put very simply, this is how leasehold —this remarkable contract peculiar to English law—arises. The landowner puts this remarkable proposition. He says, "I will let you build a house on my land, but I will not sell you the land. What I will do is to lease you the land. I will give you a long lease and it will be at a ground rent—that is, a rent for the land alone."
  Traditionally, we have a pattern of 99-year leases and we know that there is no difference—or at most only a nominal difference—between the price of the leasehold and the freehold, and, as the 1962 White Paper tells us, these contracts were entered into
  "in the belief that the buildings to be created would not last longer than a century and the property would then need to be redeveloped".
  But what the law says is that the house—the buildings—the bricks and mortar—become part of the land. So, at the end of the lease—at the end of the 99 years—the landowner gets back not

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  only the land, which he has leased to allow someone else to build a house upon, but also the house itself, although it is still habitable and enjoyed as his home by the leaseholder. So the leaseholder and his successors who, at their own expense have built the house or bought it, and have maintained and improved it, lose it; and it is their family home. What we are saying in the Bill is that this is outrageously unfair, and we are altering the law.
  The Bill provides qualified leaseholders with two basic rights. We say to the landowner, "You leased the land so that the leaseholder could build a house on your land and live in it and enjoy it as his home. As it turns out, at the end of the lease, the house is still habitable, still a comfortable home. Therefore, we think it right and proper that you should go on leasing the land to the owner-occupier of the house."
  If we do this, what are fair terms?
  Mr. Dance: Surely the right hon. Gentleman must give way.
  Mr. Willey: Admittedly, not the original ground rent: it would be unfair to compel the landowner to continue it. But, equally, it is fair to extend the lease at a modern ground rent for the land—for the site—indeed, what it would fetch today.
  We also say this. In the circumstances of this remarkable contract—in the circumstances of the leasehold arrangement —where the landowner allows someone to build a house on his land, renounces all interest in his land save that of "a long term fixed investment interest"—to use the words of the 1962 White Paper —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.
  Mr. Dance: The Minister must give way.
  Mr. Speaker: Order. If the right hon. Gentleman does not give way, mere repetition will not make him do so.
  Mr. Willey: If a property-owning democracy makes any sense, social justice requires that the owner-occupier should have the opportunity of obtaining
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  the basic fundamental security which the owner-occupier prizes most, the freehold, with all the liberty and responsibility that goes with it.
  The Bill, therefore, gives the qualified leaseholder two rights. First, for those who do not want to enfranchise or find it financially inconvenient, the right to a 50 years' extension of the current lease. This is provided in Clauses 14, 15 and 16 and affords the leaseholder security of tenure. Of course, in some cases, any extension of the lease must necessarily depreciate the value of the landowner's interest insofar as at present it reflects the vacant possession value of the house. But I would remind the hon. Member for Crosby (Mr. Graham Page) that when we debated the White Paper, speaking for the Opposition Front Bench in the shadow of the General Election, he said that the extension should be for "a substantial and definite term".
  Because we regard the occupying leaseholder as continuing to own the building, the landlord is entitled to no more than a fair ground rent, a modern ground rent, reflecting the site value, subject to its use by the leaseholder, and after 25 years it will be reviewed and, if necessary, brought up to date.
  Secondly, we provide—and it is now generally agreed that we should do so—for enfranchisement. This is dealt with in Clauses 8 to 13. Necessarily, these Clauses deal with incumbrances, rent charges, covenants and mortgages, but Clause 9, which provides for the price of enfranchisement, is the most important.
  As we said in the White Paper, where there is no development value
  "the fair price for enfranchisement will be the value of the freehold interest of the site, subject to the lease and its extension for 50 years."
  This will ensure that the value of the buildings on reversion is completely excluded.
  As I said in the debate on the White Paper, the fairest solution is the most obvious.
  In most cases consideration of development value will not arise and, of course, it is usually significant only towards the end of the lease. But if a site has any development value which would give it greater value than that of a site for the particular house, then the

  1277
  freeholder is entitled to that value—that is, its value subject to the lease, its value at the time the leaseholder negotiates the purchase of the freehold.
  Not only does Clause 9 provide a fair solution; it provides also a simple solution. By dealing with the extension and enfranchisement together, the effect is to limit the landlord's reversionary interest to the value of the site only: the value of the buildings on reversion is completely excluded. But equally the provisions of the Bill will never expropriate from the landowner any of the reversionary value of the land.
  In any particular case, it should not be difficult to work out what the price of enfranchisement will be. Usually, it will
  be negotiated by the parties without difficulty. But a variety of circumstances can affect any particular case, and
  it is not easy to give examples which can be taken as representative. However, with this reservation, it may be helpful, as my hon. Friend the Member for Manchester, Wythenshawe (Mr. Alfred Morris) said, if I give the House a few examples to illustrate the effect of the Bill.
  In South Wales, in the case of a house with vacant possession value of £1,500 with an unexpired term of five years at a low ground rent, the price of enfranchisement might be about £230. In the case of a house with vacant possession, value of £2,000, with 23 years to run at a ground rent of £2, I worked out the price of enfranchisement at £105. In the Midlands, a house with vacant posession value of £2,750, with 50 years unexpired at a ground rent of £10, might be enfranchised for about £200. In London, a house with vacant possession value of £7,500 with 21 years to run at a ground rent of £20, the cost of enfranchisement should be about £800.
  In giving these examples, I emphasise, first, that the leaseholder may, of course, look to the building societies for assistance, and, secondly, that vacant possession value is very much affected by occupancy. Possession is not only nine-tenths of the law; it can also amount to a considerable slice of the vacant possession value.
  I have mentioned qualified leaseholders. The qualifications are defined in the early Clauses of the Bill.
  The leaseholder must hold a lease originally granted for more than 21 years
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  at a ground rent. This is provided in Clauses 3 and 4. The leaseholder must be occupying the house, or part of it, as his residence and must have done so as a ground-rent paying leaseholder for the last five years. This is provided in Clauses 1 and 2.
  The fact that a house is being used partly for business purposes or is partly sublet does not of itself take the house outside the Bill. The essential criterion is that the house is still capable of occupation as a single dwelling even though at the time it may be occupied separately. For instance, a son-in-law may be living in a house and occupying the top floor with a separate bathroom, but the owner-occupier will still benefit from these provisions unless he has blocked off the staircase and provided an outside staircase.
  Sir John Langford-Holt (Shrewsbury): The Minister used the words "the original lease". Does this apply to the original lease of the building or the original lease by the present occupant of the building?
  Mr. Willey: It applies to the original lease of the building.
  Mr. S. C. Silkin (Dulwich): My right hon. Friend has given examples of the likely cost in various circumstances of buying the freehold. I fully appreciate the difficulty of trying to do that in the abstract. Clause 9 imports into
  the calculation the term "the house and premises". Can my right hon. Friend explain this? Is the effect of this that what would otherwise be a speculative investment is transformed into a well-secured one and that the consequence is to add substantially to the number of years purchase—the multiplier—which would otherwise be the correct one?
  Mr. Willey: I am not seized of the point made by my hon. and learned Friend. If he is fortunate enough to speak during the debate, that is a matter which might be dealt with when my right hon. Friend the Secretary of State replies.
  Mr. Leo Abse (Pontypool): Will my right hon. Friend give way?
  Mr. Willey: I would rather not, because a large number of hon. Members wish to speak and my right hon.

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  Friend will, I am sure, adequately and competently reply to the debate.
  Clause 1 of the Bill expands the provision of continuous occupancy for five years to include a total of five years out of the last seven years. This is to avoid hardship to families who, for instance, may have been compelled to go abroad for a while. The house must be within the rateable limits of the Rent Act, and the Bill does not include flats and maisonettes. The purpose of the Bill is to rectify by legislation the leasehold contract where it causes the greatest hardship. Therefore, the Bill is limited to residential long leases. It is not concerned with leases for business purposes or leases held solely for investment.
  The Bill is concerned with the person who holds the lease of the house in which he lives as his home and who has probably had little alternative but to live in a leasehold house. Within residential leases, therefore, we have drawn a line by reference to the value of the house so that the Bill identifies those in real need. We have accepted the limits recently adopted for rent control, and this is probably right. The Bill will exclude little more than 1 per cent. of the total number of houses, but I know that in some places—for example, Cambridge—the proportion of houses over the rateable limit is higher than elsewhere. No doubt this is something which we can pursue further, in Standing Committee.
  Clause 2 excludes flats and maisonettes. Most flats are let at a rack rent and would not in any event fall within the scope of the Bill. We have, however, excluded flats for practical reasons—for example, the difficulties of flying freeholds. As the House knows, the Wilberforce Committee has reported; the Government are preparing legislation to implement the Report and this may well make it possible to bring flats within the scope of leasehold reform.
  Clause 5 provides that the leaseholder exercises his right to enfranchise or extend his lease by service of a notice on his landlord. This Clause contains the useful provision that the benefit of such a notice is assignable with the lease. If, therefore, a leaseholder is selling his house because he has to move, perhaps to take employment elsewhere, he can sell his house and move without having to
  1280
  wait until he completes the whole transaction of enfranchisement and extension.
  The Government's pledge to leaseholders whose leases expired before the Bill
  could be introduced is made effective by Clause 34. Leaseholders whose leases expired after 8th December, 1964, but who have remained in possession of their houses are given the same rights as present leaseholders under the Bill, provided that they exercise their rights within three months of the Bill being passed.
  It may be that for one reason or another a lease may expire without any leaseholder having exercised his right to enfranchise or extend the lease. In such a case, Clause 39 provides that the leaseholder will have the benefit of the fair rent machinery under the Rent Act.
  Having dealt with the leaseholder, I now turn to the rights of the freeholder. These are dealt with in Clauses 16, 17 and 18 of the Bill. Clause 16 provides that the 50-year extension is a once-and-for-all extension and enables the landlord to protect himself by having included in the extended lease a statement to this effect.
  Where the leaseholder has not enfranchised, Clause 17 gives the landlord, provided he can show that he genuinely intends to redevelop the property, the right to get possession either at the start of the 50-year extension period or at any time during it. The Clause, however, provides for the leaseholder to be compensated for the loss of his extended lease. Consequentially, Clause 38 of the Bill takes away the landlord's present right under Part I of the Landlord and Tenant Act, 1954, to recover possession from the leaseholder for redevelopment without giving the leaseholder either compensation or alternative accommodation.
  Mr. Graham Page (Crosby): The Minister was very helpful earlier in giving examples and figures. Has he any examples of the compensation which a man would have to pay to buy back his own house in such a case as is dealt with in Clause 17?
  Mr. Willey: The developer would buy back the house at the value of the house. That is plain and straightforward.
  The landlord, if he acquired his interest before the publication of the White Paper, is also entitled, under Clause 18,

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  in the last year of the lease—I have chosen this period solely on practical grounds—to resist enfranchisement or extension on the grounds that he wants the house for occupation by himself or his family when the lease expires and that he would be caused greater hardship by being refused possession than would the leaseholder.
  If the county court decides in favour of the landlord, he, of course, will have to pay compensation for the value of the leasehold interest as it would have been if the 50-year extension had been granted—that is, in round terms, the bricks and mortar value.
  As we said in the White Paper, the Bill makes special provision for well-managed estates where enlightened management often makes a real contribution to their distinctive character. It would be unfair to deny leaseholders on these estates the right to enfranchisement, but, equally, it would be unfortunate unnecessarily to disrupt the benefits of comprehensive estate management.
  Clause 19 therefore provides machinery to ensure that the benefits of a well-managed estate are not lost even though individual leaseholders decide to buy their freeholds. After a certificate for a particular
  estate has been granted by the Minister, the Clause provides for a scheme of management being settled by the High Court. Although, in the first instance, the initiative must be with the present freeholder, the Clause provides for the responsibility for the scheme subsequently being taken over by a local authority or by a specially constituted body so that the scheme should not be prejudiced by a lack of interest by the freeholder following widespread enfranchisement.
  The principle of a qualified lease-holder's right to enfranchise or extend his lease still holds good where the landowner is a local authority or any other public body. Special provision, however, is made for special cases.
  By Clause 28, the Minister is empowered to veto enfranchisement or extension against a local authority or other public body, including universities and statutory undertakers, by certifying that the property will shortly be needed for
  1282
  redevelopment. It would be stupid to allow the leaseholder to enfranchise where he is shortly afterwards compulsorily to be bought out for redevelopment. The leaseholder, however, will, of course, receive compensation to the value of his leasehold interest with the 50-year extension; that is, bricks and mortar value.
  Clause 39 allows a local authority, a new town authority and some other public authorities to retain, by restrictive covenant, any development rights on the land where the leaseholder exercises his right of enfranchise, and Clause 30 ensures that new town and expanding town authorities are able to attach preemption covenants in order to ensure that the houses continue to be occupied by people from the part of the country for whose overspill problems the new or expanded town is built.
  Although the Bill does not bind the Crown, nevertheless the Crown Estates and Duchies and Government Departments who are freehold owners of houses let on long leases will act in accordance with its provisions, and Clause 33 contains provisions enabling the Crown to comply with the Bill and making it possible for a leaseholder to enfranchise for a landlord who has bought the freehold from the Crown. The Crown Estate, however, will retain control over houses of special architectural historical or amenity value, and Clause 32 preserves the inalienability of certain land held by the National Trust.
  In one respect the Bill goes beyond the scope of the White Paper. Clause 39 stops a new racket by making long tenancies at rack rents—that is, ordinary tenancies—subject to the Rent Act, 1965. This is to protect the tenants against a growing and blatant evasion of the Rent Act. Some landlords, especially in London, but also elsewhere, usually landlords of cheaper and poorer property, ordinarily let on weekly or monthly tenancies, have discovered the device of letting the property for 22 years or more, often at high and sometimes escalating rents, and outside the protection of the Rent Act. They will no longer escape, but will be subject to the Rent Act. This provision will act retrospectively and will apply to long tenancies at rack rents whether they were granted before or after the Bill.

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  The Bill is being criticised as bringing windfall profits to leaseholders, and a lot of offensive things are being said about owner-occupiers. But we are only dealing with residential long leases, and it seems to be forgotten that the family which sells its home will have to obtain another.
  Again, the Bill is being criticised as prejudicing redevelopment. But we should not assume that the present leasehold system is wholly advantageous to development. Many of the leasehold areas are twilight areas marred by almost wanton neglect because the freeholders are not interested in development and the occupiers have not sufficient incentive to maintain their homes in good condition.
  We must also recognise that often development has been carried out not where it was most desirable but where it could be carried out cheaply because, as the leases fell in, the landlord obtained free of charge properties which someone else had built. Good substantial, well-maintained buildings have often been pulled down long before it was necessary. But, admittedly, the provisions of the Bill may make redevelopment more difficult and less profitable for freeholders on some estates. This is the price of a social reform urgently needed.
  The Bill is a measure of social justice and reform long overdue giving hundreds of thousands of people the security and pride of home ownership. It will bring relief to a quarter of a million leaseholders in Wales and a million leaseholders in England—of which, incidentally, I am one; although, as I have a 999 years' lease, I am not especially interested in enfranchisement and certainly not in an extension.
  As I have said so often, one of the most striking features of British politics is the tenacious hold that landed interests have had on the Tory Party. Conservatives believe in a property-owning democracy, but only where real power rests with the property-owning company and the landowner. On the contrary, we believe that the first priority is with the home and the family. That is why the Bill redresses grievances long endured and brings security and fairness to the leaseholder who owns his house under the leasehold system.
  4.25 p.m.
  Mr. Anthony Barber (Altrincham and Sale): I beg to move, to leave out from "That" to the end of the Question and to add instead thereof:
  "this House, while accepting that ground leaseholders should be permitted to buy or rent their houses on fair terms except where the property is to be redeveloped, declines to give a Second Reading to a Bill which seeks to provide leasehold enfranchisement on confiscatory terms."
  At the last General Election, the Conservative Party, to which the Minister referred at the end of his speech, stated clearly and unequivocally its policy on leasehold enfranchisement, and I do not doubt that some hon. Gentlemen opposite will use every means to distort the proposals which we then made and distort the criticism of the Bill which I shall make today. Certainly, the Prime Minister will if he has anything to do with it. Therefore, it is right at the outset that I should place on record the proposals on which the Conservative Party fought the last election.
  They were that a ground leaseholder of residential property holding a lease originally granted for more than 21 years and who has occupied the house as his residence for at least the last five years should have three choices towards the end of his lease. I should like to list the three alternatives which we proposed should be open to the ground leaseholder. The first was the right to a statutory tenancy. If the leaseholder so wished, he could opt to remain in the house as a statutory tenant under the provisions of the Landlord and Tenant Act, 1954, in which case he would pay a new full market rent.
  The second alternative was the right to a new lease, and by that we meant that a leaseholder could choose to negotiate a new long lease for a fixed term and negotiate a new ground rent and premium. In such circumstances, the courts or the Lands Tribunal would have power to fix a fair price for both the ground rent and the premium in the event of disagreement between the parties.
  The third alternative was the right to buy the freehold. But here we said, unlike this Bill, that the price to be paid should reflect the bricks and mortar value of the house as a house.
  Mr. William Hamling (Woolwich, West): Why?
  Mr. Barber: I shall come to that in a few moments.
  Once again, the courts would be available in the case of disagreement about that price.
  As this Amendment shows, we stand by those proposals, but, for reasons which I shall elaborate in a moment, I believe that those proposals were reasonable and fair and that the proposals in the Bill amount to nothing short of confiscation.
  First, I should like to make a few general points. I am sure that the Prime Minister would agree that it is no longer true that a dog is a man's best friend. During the past few days, we have had a fascinating insight into the working of the Labour Party—
  Mr. Speaker: Order. The right hon. Gentleman will relate his remarks to the Second Reading, I hope.
  Mr. Barber: Mr. Speaker, I was going on to say that this is highly relevant to the confiscatory provisions of the Bill, for this reason. In purely party political terms, there was no need for the Government to do what they are doing in the Bill, which is to pander to the Left wing's pathological hostility to the landlord. I see right hon. Gentlemen shaking their heads in disagreement, but, after all, it was the Leader of the House who said when he was Minister of Housing and Local Government:
  "I have a natural prejudice against landlords."
  This is precisely what comes out in the Bill. I hope that the right hon. Gentleman will laugh at a quotation I am now going to make, because there was a highly illuminating article in yesterday's Financial Times. It contained one paragraph which would have made, if I may say so with respect, even the most insensitive Minister wince. I will read the paragraph to the right hon. Gentleman and perhaps his right hon. Friend might like to comment on it when winding up the debate tonight.
  The paragraph said:
  "When the White Paper on Leasehold Reform first appeared, officials at the Ministry of Housing were privately apologetic. This, they would explain, was a fudged-up piece of electioneering: nothing so disastrously damag-
  1286
  ing would ever seriously appear as a piece of legislation."
  Then comes the punch-line:
  "They misjudged their Ministers."
  Indeed they did.
  Dr. David Kerr (Wandsworth, Central): It was a great tribute.
  Mr. Barber: The right hon. Gentleman, like myself, is a member of the Bar. I can only say that he will go down in history for two achievements, for having devised in the Land Commission Act legislation which is regarded by even the most erudite lawyers as gibberish, and for having, in this Bill, flouted the basic principles of equity as a political sop to his colleagues.
  To give the ground leaseholder the legal right to buy the freehold is an arguable proposition, but there can be no argument at all in favour of leasehold enfranchisement on terms which are confiscatory as is the case in this Bill. After all, this is not merely my personal opinion or the opinion of a few Conservative Members of Parliament. It is the widely expressed view of one reputable commentator after another in the Press, as the right hon. Gentleman knows. That is true. One could quote a whole series of them. The Times said this:
  "This is, bluntly, confiscation."
  That has been echoed by leader writers
  in every reputable newspaper. I know of no reputable commentator who has said that the compensation terms are fair.
  I certainly agree that where the public interest is in conflict with private interest there are occasions when the public interest must predominate, and this may mean legislation. For example, ever since 1915 Rent Acts have been passed by Governments of all political opinion, National, Conservative, Labour and Coalition. The Conservative Party was also responsible for the Landlord and Tenant Acts of 1927 and 1954.
  Mr. David Winnick (Croydon, South): And 1957.
  Mr. Barber: Does the hon. Gentleman wish to say something?
  Mr. Winnick: Can the right hon. Gentleman tell us whether, if the Tories were returned to power, which is hardly likely, they would bring back provisions of the 1957 Rent Act?
  Mr. Barber: The hon. Gentleman has not been listening to what I have been saying. The point I have made is that under successive Governments of varying political persuasion Rent Acts have been passed, some of which were palatable to some hon. Members and some to others.
  But the blunt fact is that the Conservatives, just as did the Labour Government, the National Government and the Coalition Government, passed Acts which affected the level of rents and which also affected the sanctity of contracts. That is true. Indeed, as I went on to say, the Conservative Party was also responsible for the Landlord and Tenant Acts of 1927 and 1954. The right hon. Gentleman will find few people, who have had experience of the 1954 Act, who would agree with him that it has not been successful within the limited aims which it set out to achieve.
  The House will recall that those Acts gave protection, first to business tenants with long leases and then to both business and residential tenants. And, of course, there are the various Measures which give local councils powers of compulsory purchase for redevelopment, and so on. But—and this is of vital importance—it is no light thing to interfere with contractual or private rights. There must be a clear case for doing so, and one which will stand up to examination and be capable of being defended on the most objective criteria.
  It was precisely because we, on this side of the House, believe that the Land Commission Bill is a totally unnecessary and unjustified interference with individual rights that we opposed it at every stage, and intend to repeal it at the first opportunity.
  How should we approach this question of leasehold? I accept that in some parts of the country, notably in South Wales, practically all house property is on a leasehold basis. There is no real freedom of choice for the prospective home buyer as between leasehold and freehold, and, therefore, there is probably not a great deal of difference between leasehold and freehold prices. In other parts of the country this is, of course, not so, and it is right that we should keep the problem in perspective.
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  There is a second factor, which is the growing desire of people to own their own homes, and, what is even more important, their ability to do so. The right hon. Gentleman, in his concluding remarks, castigated the Conservatives for their views on property. He seemed to suggest that we were not interested in home ownership. That seems a strange sort of implication to come from the right hon. Gentleman because, under the Conservative Government between 1951 and 1964, the number of home owners was doubled to reach nearly 8 million.
  That was a tremendous achievement. The right hon. Gentleman and his Friends in the Ministry of Housing and Local Government can sit there smiling, but I believe that it is one of the tragedies of Socialism that ever since the Labour Government took office, as a deliberate act of policy—and let us make no mistake about this—the number of homes built for sale has been falling each year—
  Mr. Winnick: No.
  Mr. Barber: The hon. Gentleman says "No", but let me give him the figures. In 1965, the number built was 4,000 down on 1964, and last year the number was nearly 13,000 down on 1964. Those are facts.
  Taking those two factors together, the special problems in certain areas like South Wales and the growing desire for home ownership, we accepted at the last election that there is need for further legislation on the question of leashold. But in our
  view that legislation should be built on the principles of the 1954 Act. I will tell the House why.
  That Act, as hon. Gentlemen who are familiar with it will recall, provides that when a long lease comes to an end the leaseholder should be entitled to a new tenancy at a market rent unless the ground landlord can satisfy the courts either that he genuinely proposes to redevelop or that his personal need for the property is greater than that of the leaseholder—in other words, the proof of greater hardship. Any proposal for leasehold enfranchisement should have been founded on an extension of that Act of Parliament.
  Dr. David Kerr rose—
  Mr. Barber: I do not intend to continue to give way. I want to complete my speech.
  Towards the end of his lease the long leaseholder would normally have an opportunity of buying the freehold. I have stated what I believe ought to have been done. Before I come to the compensation terms in the Bill, I want to say—I will give way to the hon. Gentleman.
  Mr. David Weitzman (Stoke Newington and Hackney, North): Under the 1957 Act a leaseholder, at the end of his lease, has to pay what the right hon. Gentleman calls a "market rent". Why should a man who has paid the ground rent of £5 a year for a considerable number of years, for his own house which he has maintained and improved, have to pay a market rent at the end of that period? Why?
  Mr. Barber: I propose to deal, in a few moments, with the suggestion that the bricks and mortar belong to the leaseholder and that the land alone belongs to the landlord. This is basic to the whole of the right hon. Gentleman's Bill. That is something which I shall be dealing with in a few moments.
  I would say to the party opposite that we all know that in the ideal—and I use that word in its best sense—Communist State virtually all property is shared and private ownership is forbidden. Whatever the merits may be of such an ideal society, it is a fact of life that in this country the ownership of property and the sanctity of contract are not features which can be lightly cast aside without very serious consequences.
  I know that there are many hon. Gentlemen opposite who genuinely would like to see the country becoming a nation of council house tenants. This is a concept which we on these benches utterly reject, but the principles of the Government ale obvious from their action, and I have already given the figures.
  Mr. Winnick: If what the right hon. Gentleman alleges is true, that we want this to become a nation of council tenants, can he explain why we are bringing in the mortgage subsidy scheme to help people to become owner-occupiers?
  Mr. Barber: There is not much sign of the Government bringing in such legislation. I am basing my argument on
  1290
  the facts, and I shall give them to the hon. Gentleman.
  I have already told the House that the number of houses built for sale in 1965 was 4,000 down on 1964, and that the number built last year was 13,000 down. That is the reality of the Labour Government's housing performance, and what I want to see are not only more homes for owner-occupiers, but also positive encouragement to make available all types of homes for renting. Council houses fulfil an essential need, but so does the private landlord, and we shall never encourage the private building of homes to rent if it is known that a Labour Government will come along with legislation which amounts to confiscation.
  Dr. David Kerr rose—
  Mr. Barber: No. This is not some legal nicety, or the opinion of a latter-day Forsyte. It is a matter of great social consequence for all those citizens who are inadequately housed or who have no homes of their own. There is not one hon. Member in the House who does not want to increase the nation's stock of houses, but, equally, there is no one here, including the right hon. Gentleman the Minister of Housing and Local Government, who can deny that despite the fact that in October, 1964, there were 434,000 houses under construction, in 1965 and again in 1966 the Government failed to reach their stated target of 400,000 houses.
  The Minister of Housing and Local Government (Mr. Anthony Greenwood)indicated dissent.
  Mr. Barber: The Minister indicates his dissent. Would he like to intervene? Obviously he does not, because he knows that that is true.
  Mr. Ivor Richard (Barons Court)rose—
  Mr. Barber: No. I said that I would give way to the right hon. Gentleman.
  Mr. Abse: As the right hon. Gentleman is expressing his concern about the number of houses to let and those that are to be built for sale, will he explain why, with his interest in home ownership, he is putting forward a plan which in Wales will mean that 250,000 people will become tenants in their own homes? Is this his idea of increasing home ownership?
  Mr. Barber: I am sorry, but the hon. Gentleman has got it all wrong. I said that under the Conservative Government the number of home owners doubled, whereas under the Labour Government it has been falling.
  Mr. Hamling: On a point of order. Mr. Deputy Speaker, are we discussing the Leasehold Reform Bill or not?
  Mr. Deputy Speaker: We are having a Second Reading debate on the Bill.
  Mr. Barber: I am grateful to you, Mr. Deputy Speaker. I was making the point to the right hon. Gentleman that in both years the Labour Government failed to reach their target. The right hon. Gentleman shook his head, but he refused to get up and intervene.
  Mr. Greenwood: I was waiting for the right hon. Gentleman to deal with the matters contained in the Bill.
  Mr. Barber: Now we know that the righ hon. Gentleman accepts what I said, and it is a good thing that we have that on the record.
  One of the reasons for the length of the housing queue is the Labour Government's doctrinal hostility to the private landlord, which we have heard today from the interventions of hon. Gentlemen opposite. This results in a consequent discouragement of the building of houses to let other than by local authorities, and it is this deep and ingrained hostility to the private landlord which has led the right hon. Gentleman in this Bill to include provisions which amount to no less than confiscation, as has been said by many people outside the House.
  The Bill is based on a White Paper which we debated on the very day when the General Election was announced, and I might mention, in passing, that it is not without significance that when it is necessary to publicise an election bribe the Government can afford one day's debate on the White Paper and one day on the Bill, but when the election is over and the whole House wants to do just that again on the issue of decimalisation, the Leader of the House condemns the proposal as a nonsense.
  To return to the White Paper.—[HON. MEMBERS: "Hear, hear."]—I was going to ask hon. Gentlemen opposite to stop yapping as I thought that that might be
  1292
  more appropriate. It is an interesting reflection on hon. Gentlemen opposite that when I quote their appalling housing figures—[HON. MEMBERS: "Get on with it."] We are considering housing, and I have every right to give my views about the record of hon. Gentlemen opposite.
  Mr. Abse: On a point of order. Mr. Deputy Speaker, is it not widely outside the whole question of the leasehold system to be discussing these irrelevant housing figures? May we have some direction to ensure that the issue which the right hon. Gentleman is so vehemently dodging is discussed, namely, the leaseholders who are now to have this great right to secure their own property?
  Mr. Deputy Speaker: It is well known that the Second Reading of a Bill provides very wide scope for debate, and my view is that everything said by the right hon. Gentleman so far has been in order.
  Mr. Barber: Once again, I am grateful to you, Mr. Deputy Speaker. It is significant that hon. Gentlemen opposite seem to think that these appalling housing figures are irrelevant to the nation's needs. We on these benches take a different view.
  There are a number of references in the White Paper to equity, and I must say that with reference to the proposals in the Bill the term "equity" is really an abuse of the English language. It is becoming a growing habit of the Government, when they are doing something particularly obnoxious, to talk vaguely about fairness and the public interest, no doubt in the hope that the general public will accept what Ministers say at their face value, even if their back benchers do not. But what objective observer can seriously pretend that it is equitable that ground landlords should have their property confiscated in this way?
  As I said earlier, I accept that leaseholders should have the chance to buy their freeholds, but it is precisely because this affects the ground landlord's rights that we consider it to be of the utmost importance that the price paid should be fair. Of course, one can see the political reasoning behind the Government's decision on compensation. Indeed, it is patently obvious. There are many more leaseholders than there are ground landlords, and so, says the right hon. Gentleman, "Let us bash the landlords and

  1293
  glean some cheap popularity with the leaseholders". Equity for the minority is irrelevant, on the simple Wilsonian thesis that the only thing that matters in politics is votes.
  The right hon. Gentleman has admitted that under the Bill the landlord is to receive no compensation at all for the house which he owns. The right hon. Gentleman nods assent, so it is true that under the Bill, whether people agree with this or not, the landlord is to receive no compensation at all for the house which he owns. I believe that this is monstrously unfair, and that this is what I mean by confiscation. The right hon. Gentleman knows in his heart that this is what it is. He has attempted to wrap it up in a principle which simply does not bear examination.
  The Government's case for basing the price of enfranchisement solely on site value rests on the wholly false argument that the house belongs to the leaseholder. What the leaseholder has bought is not the house itself, but the right to live in it for the period specified in the lease. Dr. Denman, Head of the Department of Land Economy at Cambridge University, has put the position succinctly. He says:
  "Leaseholders buy leaseholds, interests in property limited in time, and have to pay for them accordingly. Land-owners who buy freeholds subject to leases pay prices which reflect the value of their expectations to enter into vacant possession of the premises (building and land) at the end of the lease."
  That is a factual statement of the present position.
  I hope that the House will note the contrast between the confiscatory price that the ground landlord will receive on enfranchisement and the full market price which the landlord will have to pay if he successfully resists enfranchisement because he needs the house for his personal occupation—the "greater hardship" ground. My hon. Friend intervened to ask if the right hon. Gentleman would give some figures. If he can give figures on one side of the balance sheet he can give them on the other. We are entitled to have more details.
  Whereas the leaseholder will be able to enfranchise for a few hundred pounds, if the landlord successfully resists enfranchisement he will have to pay
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  thousands of pounds. [HON. MEMBERS: "Hear, hear."] That is the reaction of hon. Members opposite. They say, "Hear, hear." This system is utterly unfair. I do not know to what extent the Government and hon. Members opposite have realised that there is nothing to prevent the leaseholder, having obtained the house at a rock bottom price, from promptly selling it and making a quick profit.
  Mr. Dance: Does my right hon. Friend not agree that whereas 99 years ago the ground rent may have been fair and practical, for the past 20 years the tenant has been enjoying virtually a peppercorn rent, and the landlord should get some compensation for that?
  Mr. Hamling: He is to get it under the Bill.
  Mr. Barber: I gave way to my hon. Friend only because he tried three times to intervene in the speech of the Minister and was refused.
  Mr. Hamling: Get on with the Bill.
  Mr. Barber: As even the hon. Member for Woolwich, West (Mr. Hamling), in his ignorance, must know, many of the ground landlords concerned are charities, pension funds and small persons. Where is the justice in robbing them in this way? This is barefaced robbery. The Minister may contend that if the price of enfranchisement took account of the house as well as the site some leaseholders might have difficulty in finding the money. That may be the case.
  Mr. Willey: The right hon. Gentleman will have heard the figures that I gave and the effect of the 1954 Act. Was that barefaced robbery?
  Mr. Barber: The right hon. Gentleman has not stated the position under that Act, namely, that market price is the governing factor. This is all that we are asking to be inserted in the Bill. The Bill contains no market price; the bricks and mortar pass without any consideration. That is the difference between the right hon. Gentleman and myself. It is all very well for him and other hon. Members opposite to laugh when I refer to charities, but there are many charitable estates. That fact cannot be lightly brushed aside.
  Mr. Willey: The figures that I gave were market prices. As a result of the 1954 Act the freehold of the market price of £4,000 became valued at no more than £2,000.
  Mr. Barber: I am sure that the right hon. Gentleman will accept from me that all I want inserted in the Bill is a provision that market prices should be paid as in the 1954 Act for what belongs to the landlord—no more and no less. The right hon. Gentleman knows that the principle which he has enshrined in the Bill will not stand up to examination.
  Mr. Emlyn Hooson (Montgomery): The right hon. Gentleman is deploying his argument with care, but does not he agree that it would be unfair to call upon the leaseholder to pay for the bricks and mortar when his father may have built the house?
  Mr. Barber: In many cases the house was originally built by the owner of the land, and in those cases the Bill will operate in a grossly unfair way.
  The right hon. Gentleman may contend that if the price of enfranchisement took account of the house as well as the site some leaseholders might have difficulty in finding the money. I accept this. I therefore suggest two ways in which the Government could help the leaseholder to buy. First, the Government should bring in the mortgage option scheme now instead of waiting until April, 1968. The Government can afford large and indiscriminate subsidies for council house building but nothing to help home buyers until April, 1968. That is wrong.
  Secondly, the Government should bring in right away a scheme to help with the initial deposit. We have always realised that this was an essential corrollary to any plan for easier mortgage payments. Those are the right ways to help leáseholders who find it difficult to pay. The compensation provisions are obviously inequitable, and the fact that the Bill adversely affects only a minority of citizens makes it even worse. To bully a class or group of people whom the Government regard with disfavour is the worst type of discrimination.
  We shall wish to consider many matters of detail in Committee but I want to mention two of great importance.
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  The first concerns the question of redevelopment, to which the right hon. Gentleman referred, and the second concerns good estate management. There are many excellent estates. Clearly, unless there are substantial safeguards, these estates will suffer. Clause 19 gives some cause for hope, but why should the Minister have complete discretion in the matter? What is required is more objective criteria than are at present laid down in the Bill.
  Having laid down these objective criteria the Government should leave the decision to the High Court in each case. There is no need for the right hon. Gentleman or his successor to place himself in the position of deciding whether or not schemes for the retention of management powers should go forward to the High Court.
  On the question of redevelopment the Bill enables the ground landlord to resist, through the courts, a 50-year extension of the lease on two grounds—either that he wants to occupy the house himself or that he genuinely intends to carry out redevelopment. But he can resist enfranchisement only on the ground that he intends to occupy the house; the general intention to redevelop is no defence against enfranchisement. This is illogical. Perhaps the right hon. Gentleman will explain why the defence of redevelopment is available in the case of the leaseholder who wishes to obtain a further lease but is not available to the landlord against the leaseholder's wish to purchase the freehold.
  It would surely be more reasonable if the various options available to the leaseholder under the Bill were restricted to the latter part of the lease—say, the last seven or 10 years. I cannot see why, in equity, they should be available at any time during the lease, as the Bill provides. I say this because it is usually only when the lease is beginning to near its end that the ground landlord can be expected to contemplate the question of redevelopment, which we on this side—and I think the right hon. Gentleman himself—regard as of major importance.
  There are many other matters which we shall wish to consider in Committee. I have spoken for rather longer than I intended, because of several interruptions from hon. Gentlemen opposite—
  Mr. Hamling: The right hon. Gentleman asked for them.
  Mr. Barber: I was grateful for them. They gave me an opportunity of replying to hon. Gentlemen opposite.
  I can sum up our attitude in two sentences. We stand by our declared policy of leasehold enfranchisement. We are opposed to confiscation.
  5.1 p.m.
  Mr. E. Rowlands (Cardiff, North): Many Bills which pass through this House affect the individual, the family and the community, but none so immediately as this Bill, which affects all three possibly more directly than anything else which we have put through the House since the General Election. I think, after listening to the right hon. Member for Altrincham and Sale (Mr. Barber), that I now know why there is only one Tory seat in South Wales. If the right hon. Gentleman, who spoke at a businessmen's club in Cardiff recently, had left the club and talked with some of the leaseholders in South Wales, he would have been wiser than he appeared to be this afternoon.
  I must declare a direct personal interest. I am a leaseholder. I declare an interest, too, for nearly all my constituents and for South Wales. If I had been objectively listening to the right hon. Gentleman and had not been a Member for a South Wales constituency, I would not have understood the point of this reform. I should have known a lot about some bogus figures concerning housing, but nothing about the leasehold system or its effect on many thousands of people, particularly in South Wales—
  Mr. Barber: Which of the figures which I quoted were bogus?
  Mr. Rowlands: The whole thing was bogus, because the right hon. Gentleman did not put it in perspective.
  The Bill discusses this reform in the language of lawyers. I should like to discuss it in language which would
  be understood by my constituents and to explain the feelings and the anguish which many have expressed while waiting such a long time for this Bill. What does it mean in real terms to people in South Wales? The leasehold system has meant, increasingly, insecurity, uncertainty, worry and concern among leaseholders as
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  to what they will do in 10 or 15 years when their houses—as a result of Tory Party policies anyway—revert to the landlords.
  This is a householder's problem, the problem of almost every householder in South Wales and in my constituency. Such streets in my constituency as Merthyr Street and May Street are small streets of old terraced houses which are nevertheless firm and solid and worthwhile living in. They have been owned and occupied perhaps for generations by the same family. They were built during the housing boom 70 or 80 years ago as a direct result of the Industrial Revolution in South Wales.
  Every year, these householders pay what seems a small and insignificant ground rent. No one denies that this rent is small. I have examples of rents as low as £ a year, sometimes £2 10s. and sometimes the astronomical figure of £5 a year on the older property. That sum is nothing. If that were all, we should have no leasehold problem in South Wales. If it meant that they could carry on paying a small ground rent for any length of time until the house was uninhabitable we should have no problem. But behind this small sum is a situation which has worried householders, and those in South Wales particularly.
  As everybody knows, the leases have only a short term to run. The majority of leases in the central area of my constituency—and in the centre of most other South Wales urban areas—have only 10 or 15 years to run, and in many cases the time is down to five years. Some have already fallen in. Those are the few harsh examples of what could befall the rest of the community under the leasehold system.
  As a result, many householders have felt deep concern. They have been covered in the sense that they are safeguarded and cannot be tossed immediately out of their own houses. Nevertheless, they have drawn mortgages on these houses which they have been paying off. Now they are told by the right hon. Member for Altrincham and Sale that they do not own the houses, the bricks and mortar, on which they have been paying mortgages. I have a mortgage and I was surprised when he told me that I did not own my house. I shall write to ask my

  1299
  landlord to pay my mortgage as well, because that will be a great relief to me, though I doubt to him.
  Of course, not only is the problem a question of security of tenure of a householder who thought he owned his house. It is also a problem of buying and selling houses in central areas like that of Cardiff. Very few building societies or local authorities will give mortgages on these houses. As the right hon. Gentleman said, the leaseholder has a traditional way out which has existed for some time. It as been there for many years; he can always write to the ground landlord to ask to purchase the freehold.
  My files are full of little notes returned by ground landlords in response to such leaseholders in South Wales. They are curt notes saying that it is not the policy of the company or the estate to sell the freehold. These notes dash the hopes of thousands of leaseholders. Even when an offer is made to what would be regarded in South Wales as a contradiction in terms, a generous landlord, the price is hefty.
  The right hon. Gentleman did not mention the prices for some of the older properties at the moment. I know of some vacant property which is not worth more than £1,500 to £2,000 outright, for which leaseholders have been asked anything up to £800 for a lease with five years to run. I know of one price of £1,000. Is this the price which the right hon. Gentleman wants the average householder to pay? [An HON. MEMBER: "No."] I think that he does. He did not contradict me.
  Even when the ground landlord has been, theoretically, generous in offering renewal to the leaseholder whose lease is running out, the leaseholder has not only had to pay a modern ground rent, which we all accept is reasonable, but also a heavy premium. Again, the right hon. Gentleman reaffirmed that if the Tory Party were in power they would still maintain the premium—
  Mr. Barber: I said no such thing. I laid down three alternatives. One was leasehold enfranchisement. If the hon. Gentleman and his constituents will read tomorrow what I said, they will find that that is so.
  Mr. Rowlands rose—
  Mr. Hamling: Is my hon. Friend aware that if the Tories were in power they would do nothing?
  Mr. Rowlands: I am sure that the right hon. Gentleman said this, and I shall send him a copy of HANSARD tomorrow to confirm it. He said that the leaseholder can either be a tenant in his own house, although he has bought it, or can renew the lease with a premium and a modern ground rent. The right hon. Gentleman definitely included premiums. Will the right hon. Gentleman get to his feet and repeat what he said?
  Mr. Barber: I am sure that the hon. Gentleman does not want me to repeat everything I said, particularly since my remarks were set out in our policy at the last election. In my speech I set out three alternatives, one of which was leasehold enfranchisement—which, after all, is the purpose of the Bill.
  Mr. Abse: By premium.
  Mr. Barber: No. I referred to leasehold enfranchisement and gave the details. My hon. Friends and I stand by the proposals which we made at the last election.
  Mr. Rowlands: Being a fair-minded man, I will put another question to the right hon. Gentleman and will willingly give way if he wishes to reply. One of his alternatives was the renewal of the lease on a modern ground rent with a premium. Did he say that?
  Mr. Hamling: This is their second option.
  Mr. Rowlands: Obviously, the right hon. Gentleman does not wish to answer my question. Certainly, we would not be having any form of leasehold reform had the Conservatives been returned to power at the last election. One can thumb through OFFICIAL REPORTS from the 1880s and occasionally find reports of private hon. Members attempting to introduce a measure of leasehold reform. On three occasions during the recent 13-year period when the Conservatives were in power private hon. Members—including one hon. Gentleman opposite—tried to introduce a reform of the leasehold system. My right hon. Friend the Member for Cardiff, West (Mr. George Thomas), who is now a Minister, has campaigned

  1301
  in the past in Wales for this reform, and I pay tribute to him. I know that my right hon. Friend would have loved to have been here for this debate.
  The Conservatives have not so much ignored the possibility of leasehold reform but have positively and bitterly opposed it, just as we have seen them doing this afternoon. They have opposed it in the most intemperate language. Indeed, when the House debated the White Paper—although I was not an hon. Member at that time—the right hon. Member for Altrincham and Sale spoke of it as a "moral outrage". Phrases such as "legalised theft" were used, and when I first read the remarks I thought that the right hon. Gentleman was speaking not about leasehold reform but about the leasehold system.
  Mr. Hamling: Is my hon. Friend aware that hon. Gentlemen opposite are frightened to vote against this reform?
  Mr. Rowlands: Perhaps the right hon. Member for Altrincham and Sale will confirm that. Certainly they back down at the last moment at the conclusion of the debate on the White Paper. Of one thing we can be certain; had the Conservatives won the last election we would not be getting this reform. There would have been no sign of it had they had their way. This is one reason why they have been unable to make a breakthrough in South Wales and why they lost one of their two remaining seats there at the last election. If they wish to make any headway in South Wales they will have to stop defending the system of ground landlordism which has existed for so long.
  This is an all-important Bill for the future of South Wales, Wales generally and many parts of the country where this problem of leasehold has been of major concern. Clauses 1 and 9 give important rights. Clause 1 gives the leaseholder the right to purchase the freehold; and no longer will the ground landlord be able to return the sort of curt notes to leaseholders which I described earlier. Clause 9 establishes the important right of a fair price being asked. This will not be an exaggerated market price but a fair price. In South Wales one has little alternative than to purchase a leasehold property. This Clause ensures that the price makes a just distinction
  1302
  between the land on which the house is built and the house itself, the house probably being bought on a mortgage or having been paid for by the leaseholder.
  Another important right makes it possible for a leaseholder who cannot afford to pay any price for the freehold to have his lease extended by 50 years. This is an important additional option and it is right and proper that it should be included in any system of leasehold reform. However, I hope that my right hon. Friend will explain why, once a person has chosen to extend his lease by 50 years, that rules out his successor having the opportunity of opting to purchase the freehold. Why must this be a once-and-for-all choice? Since an elderly person might choose to extend his lease by 50 years but may then pass the property to his son or might sell it, ought not his successor to be entitled to the same right of purchasing the freehold?
  A large number of houses in Cardiff are old and are divided into three flats with a common staircase. The leaseholder might reside in the ground floor flat while his tenants live above. The rents and rateable value of the three flats together could exceed £200 a year. Does this rule out the possibility of the leaseholder who lives on the ground floor from enfranchising? If so, we will have to consider this £200 rateable value limit in detail in Committee.
  Finally, I plead with the Government to persuade local authorities, banks and others to make available as much money as possible to ensure that as many people as possible are able to enjoy the rights conferred on them under the Bill. It is important that the vast majority of leaseholders, particularly in areas such as South Wales, have the opportunity of benefiting from the Bill. Many of these leaseholders are elderly and it will be difficult for them to raise even the quite smallish sums which will be required for enfranchisement. I trust, therefore, that the local authorities and banks will be generous.
  We must ensure that the rights conferred by the Bill on leaseholders are used to the maximum advantage and as quickly as possible. Although I see no chance of the Tories being returned to power, we must ensure that there will be

  1303
  no possibility of them introducing amending legislation which would damage the rights contained in the Measure. Many thousands of leaseholders will wish to take immediate advantage of the Bill. It is an advantage which they deserve and I therefore wholeheartedly support the Measure.
  5.15 p.m.
  Mr. John Boyd-Carpenter (Kingston-upon-Thames): Like the hon. Member for Cardiff, North (Mr. E. Rowlands), I must, before taking part in the debate, declare my two somewhat conflicting interests. As the House knows, I am a director of a property company. I am also the holder of a long lease which, owing to the ineptitude of the Inland Revenue, is at the moment above the rateable value laid down in the Bill.
  The hon. Member for Cardiff, North spoke with the feeling and emotion which one expects from a Welsh hon. Member on this subject. The trouble with the emotion
  which he and some of his hon. Friends have expressed is that it has confused what is actually being sought to be done by the Government in the Bill. As I understand it, the issue is not whether or not there should be measures of leasehold reform, but whether this is a fair and acceptable Measure. It is to that aspect that I propose to address my remarks.
  In considering the principle of this Measure, I would ask the House, first of all, to reflect on some very wise words in the Jenkins Report. The Jenkins Committee was, as the House will remember—and I say it with the utmost respect to the right hon. Gentleman—the last independent outside body to review the approach to this subject. It stated:
  "While freedom of contract should certainly be subject always to public policy, private property should only be taken for the benefit of the community as a whole—never for private advantage, and on terms of full compensation for the freeholder."
  The essence of this Bill, and this is why it seems to me to raise very serious questions of principle, is that—as The Times so rightly described it, when it was published, in an article headed "An Unfairly Drawn Bill"—it amounts to the expropriation of one citizen for the benefit of another. That seems to be an objectionable principle, and a principle none the
  1304
  better for the fact that the Prime Minister was able to gloat the other day about what he thought would be the favourable response of a million leaseholders.
  The objection in principle is fortified by one practical point. Where one has had for a very long time both parties to a lease, and their successors in title, dealing with the matter on the basis that the lease is an interest in house and land for a definite period, coming to an end on a predetermined date—and we have in the case of most long leases a whole variety of transactions undertaken on the basis that this is an interest limited in time—and then later in the process we intervene by Statute and so wholly alter the relation of the parties, we create a whole mass of unfairnesses and anomalies.
  This is where, I think, the right hon. Gentleman went wrong in his repeated references to the leaseholder having built the house. In many cases that is not true, as my right hon. Friend the Member for Altrincham and Sale (Mr. Barber) has said. It is not so in most of the great London estates, but it is true in the case of some others. But even where it is so, the house was built by the original leaseholder knowing perfectly well the basis on which it was done, that basis being the possession of house and land for a precisely stated period to which he agreed.
  But the right hon. Gentleman must accept that when we talk of these long leases, and the example of the 99-year lease is perhaps the one we are most discussing, this is not now the concern of the original leaseholder. The lease has changed hands many times, perhaps by inheritance—although I gather that some hon. Gentlemen opposite do not approve of that—but more often by purchase, with the purchase price reflecting the fact that a shorter and shorter interest was being bought.
  The right hon. Gentleman tried to deal with this in the White Paper debate when he stated
  "… but also to the house which has been built on his land, even though he has neither provided nor maintained it. That is legal confiscation. The leaseholder is expropriated. He is left with nothing, even if the house which he or his predecessors have paid for still has many years of useful life."

  1305
  My hon. Friend the Member for Gloucestershire, South (Mr. Corfield) then intervened to ask:
  "Can the right hon. Gentleman explain how that amounts to confiscation in a case where the lessee has himself purchased the lease at a price which reflects the fact that it will come to an end at a certain date?".
  To that the Minister unbelievably replied:
  "I would ask the hon. Gentleman to read the White Paper again. One has to take an historic view of both the freehold and leaseholds interests."—[OFFICIAL REPORT. 28th February, 1966; Vol. 725, c. 905.]
  The right hon. Gentleman was simply not applying his mind to the point put to him.
  It is not only possible, but happens many times that people buy the fag-end of a lease—the last six or seven years at the end of a lease—at a very moderate price. In fact, part of the Minister's argument was that such a lease was very difficult to sell and could be bought very cheaply. Yet he comes here with a Bill, not to give to the mythical and long-since-dead builder of the house these rights, but to give them to someone who has bought, at a modest sum, that fag-end of a lease—
  Mr. Hamling: Not in London.
  Mr. Boyd-Carpenter: It happens every day in London, and it will happen even more frequently if this Bill goes through.
  The right hon. Gentleman must address himself to the fact that these transactions have gone on during the lifetime of the lease, again and again, everyone knowing the basis on which they were done, and it is really quite outrageous to say that the person who happens to have got a lease quite cheaply shall be presented with these valuable rights which, as my right hon. Friend so rightly said, having acquired under the Bill he will be able to sell on the free market the next day for the full price—
  Mr. Willey: The right hon. Gentleman will remember that I said that it is not the White Paper or the Bill that provides the distinct interests, but the leasehold contract itself. This is a very real difficulty, because they are parallel interests. What happens on the leasehold side has nothing to do with what happens on the freehold side, although they are contemporaneous interests. If one is thinking of the leaseholder's interest one has only
  1306
  to look at the leasehold side, and the fact that one leaseholder sells to another leaseholder has nothing to do with the freeholder, just as a freeholder can sell to a freeholder without the leaseholder being aware of the transaction. Why I speak of the historic view is that one has to look at the whole interest and say, "Here is a leaseholder", and provided one takes the historic view, with the land being made available at a ground rent—it is only if one does that and accepts what the contract is—dividing the property in this way —that one can reach an equitable settlement.
  Mr. Boyd-Carpenter: I do not think that that argument helps the Minister very much. If I understood his lengthy intervention aright, it is that he is more concerned to penalise the freeholder than to help the leaseholder. He must face this. What merit is there in presenting someone who bought the fag-end of a lease perhaps six years ago for a very modest sum—presenting him, at the cost of the freeholder—with a freehold that he can sell on the market tomorrow? Can the right hon. Gentleman say how he justifies that?
  Mr. Willey: I certainly can. I gave the example of a leaseholder buying on a mortgage. It may well happen—though it will not happen in the future—that he has bought the lease mid-term, and when he comes to the end of his mortgage he has paid for the house, but he finds himself with something far less valuable. Perhaps someone buys it from him for less than he paid, but that has nothing to do with the freeholder who may be a freeholder who has held the lease for 50 years or who has held the lease for 5 years.
  Mr. Boyd-Carpenter: The right hon. Gentleman makes matters worse. He is running away every time from my example of the fag-end of a lease, whether on mortgage or not What he is doing, and I do not think that he challenges it, is to say that someone who bought for a few hundred £s the fag-end of a lease in London is now to be presented with the right to sell it freehold on the market tomorrow if he likes.
  Mr. Willey: What I have done is to define a genuine leaseholder occupying his house. If the right hon. Gentleman wants to challenge that, he can do so. The basis of the definition is the five

  1307
  years' continuous occupancy, or the five years out of seven years. That is the definition of the genuine home owner, and he is the person who will benefit from this legislation. If the right hon. Gentleman pursues his argument that person will be excluded from the benefits of the Bill.
  Mr. Boyd-Carpenter: First, I would exclude this person at the fag-end of a lease. But the point goes not only to the exclusion of such a person; it goes to the fallacy of the whole principle of the Bill. The person with the fag-end is the most vivid illustration. I shall now finish that illustration, if I may.
  Six years ago, this person bought the end of a lease of a valuable house in London for a few hundred pounds. Let us take the example of the house to which the right hon. Gentleman referred.
  Mr. Hamling: Will the right hon. Gentleman give way?
  Mr. Boyd-Carpenter: Certainly not. I am in the middle of an argument.
  Mr. Hamling: The right hon. Gentleman is frightened.
  Mr. Boyd-Carpenter: The hon. Gentleman flatters himself if he thinks that I am frightened of him.
  Mr. Hamling: The right hon. Gentleman is frightened of the truth.
  Mr. Boyd-Carpenter: I am engaged in an argument with the Minister. Although the hon. Gentleman may rightly think that his right hon. Friend is not doing very well—
  Mr. Hamling: No.
  Mr. Boyd-Carpenter: —I am still entitled to continue the argument with the right hon. Gentleman, to whom I have already given way twice. I am sure that the hon. Gentleman will understand that that is fair.
  Let us take the right hon. Gentleman's example. Such a person can then sell that house on the market for £7,500, the price which the right hon. Gentleman himself said was its vacant possession value. How does he justify that?
  This goes back through the chain of the lease, which has been bought in the
  1308
  knowledge that a thing of less and less value was being bought each time. This is the complaint against the right hon. Gentleman. He is at this stage intervening by what is, in effect, retrospective legislation in a whole series of transactions over many years solely to benefit the person who at present happens to be the owner of, perhaps, a few years of the lease. The right hon. Gentleman does not seem to understand the muddle into which he is putting everyone.
  Mr. Willey: In fairness, perhaps the right hon. Gentleman will give the House a figure. He has used the example of a house with vacant possession value of £7,500, with 21 years to run. What does he put as the market value freehold interest?
  Mr. Boyd-Carpenter: I thought that the right hon. Gentleman was giving vacant possession value. I am not prepared to make the calculation on my feet. It is a great deal more than the figure of £800 which the right hon. Gentleman gave. Does he challenge that? Is it a great deal more?
  Mr. Willey: No.
  Mr. Boyd-Carpenter: The right hon. Gentleman says that he is giving market value for the freehold interest.
  Mr. Willey: The right hon. Gentleman is a member of a property company. He can give us his estimate of the market value freehold interest.
  Mr. Boyd-Carpenter: I shall gladly tell the right hon. Gentleman if he will undertake to accept my estimate and put it in the Bill.
  Let the right hon. Gentleman consider another illustration of the muddle which will be created by this truly retrospective Bill. The owner of prospective reversions has died in recent years. For Estate Duty purposes, his estate has been assessed on the value of his prospective reversions. They have a value at the date of death which has been the value for Estate Duty purposes, on the assumption that the law continues as at present. If the Bill becomes law, however, that will turn out to be a wholly false basis because the larger part of the value, as the right hon. Gentleman says, will have been taken away. Are the Government prepared to reopen all those cases in

  1309
  which Estate Duty has been paid on that basis so as to repay to the heirs of that man the duty which has been paid on the basis of values which the Government have subsequently destroyed? This is another example of the difficulty in which the Government put themselves by a Measure of this kind.
  It would be bad enough to deprive great property companies and great landlords of their rights by this sort of action —[Laughter.] I am sorry that hon. Members laugh. It is the mark of a civilised society that one does not transfer the rights of one citizen to another by expropriatory legislation. One relies on taxation, if one wishes so to do, to deal with disparities of wealth. One does not proceed on the Robin Hood principle of transferring one man's property to another.
  It is very much worse morally when the people robbed are pension funds, including the funds—if hon. Members opposite care to inquire—of certain trade unions, of charities, educational charities—
  Mr. Weitzman: Widows and orphans?
  Mr. Boyd-Carpenter: It is all very well for the hon. and learned Gentleman to sneer at widows and orphans—
  Mr. Weitzman: Will the hon. Gentleman give way?
  Mr. Boyd-Carpenter: In a moment. If the hon. and learned Gentleman cares to sneer at widows and orphans, he should remember that this is just the kind of investment which is very often made for widows and orphans.
  Mr. Weitzman: I hoped that, by making that remark, I would induce the right hon. Gentleman to give way, because I wanted to point out the fallacy of his argument. If the cases he has given show that it is wrong to adopt the course taken by my right hon. Friend, why did the Tory Party, in the 1954 Act, give statutory protection to a leaseholder whose lease comes to an end? If the right hon. Gentleman's argument is right, it is equally wrong to do that.
  Mr. Boyd-Carpenter: I shall not be tempted to give way again to the hon. and learned Gentleman, since he has indicated that he obtained my concession by a
  1310
  trick. It does him little credit, but I shall answer him none the less.
  The point which the hon. and learned Gentleman is, apparently, incapable of apprehending is that, under the 1954 Act what was given to the holder of a lease at the end was security of tenure—it was necessary in the conditions of housing shortage at that time, accentuated as they have been since then by the mismanagement of the present Government—given at a market rent, the full rent. If the hon. and learned Gentleman cannot understand the difference between expropriation of a capital asset and the grant of a tenancy at a market rent, he seems doubtfully qualified for the prefix "learned".
  This is the objection. It is wrong in principle so to transfer to other citizens rights in property, whether the transfer be from property companies and great landlords or from pension funds, widows and orphans or any of the many admirable people who own reversions.
  The hon. and learned Gentleman's intervention has induced me to go further and remind the House of another fairly common category of person, the person in our public service, for example, who knows that he is to retire at a certain date. He buys the freehold reversion of a long lease so that he will have the ground rent while he is still at work and possession of the house to retire to when his work comes to an end. There are a good many such examples in our South Coast towns. What is the right hon. Gentleman doing to that man? He says to him, "When you retire, if you are to obtain possession of the house to which you plan to retire, the rights in which you have bought from a certain date, you shall have it only if you first can persuade a court that your hardship is greater than that of the occupant, and, second, on payment of compensation for a 50-year lease which you have been compelled to give him". Does the right hon. Gentleman think that that is giving a square deal?
  I want the House to realise what happens once one embarks on expropriatory and confiscatory legislation of this kind. One does a great deal of injustice.
  The wrong principle of the Bill is shown up by the exceptions. If this is
  simple justice, if it is right, as the hon.

  1311
  Member for Woolwich, West suggests, to bash the landlords because they have bashed the tenants—
  Mr. Hamling: Not half!
  Mr. Boyd-Carpenter: —it is interesting to know that that is the hon. Gentleman's attitude—if that is right, why do we end this great principle at £200 a year in the country and £400 in London? Why is it not applied to flats? The right hon. Gentleman knows that the £400 and £200 are Rent Act figures.
  Mr. Elystan Morgan (Cardigan): Does the right hon. Gentleman appreciate that, at the date of the last debate, there were in Wales only 799 houses above the £200 and £400 limits and only 110,000 in the whole country? The number of houses leased in that category must be very small indeed.
  Mr. Boyd-Carpenter: That seems a most curious reason. The Bill does not deal solely with Wales; it deals with England and Wales. I am trying to test the validity of the right hon. Gentleman's principle. If it is such a right principle as he suggests that if the leaseholder built the house and it is, to use his own phrase, "legalised confiscation", for the landlord to resume possession at the end of the period of rent, why is it not legalised confiscation if the annual value is £210 a year?
  Mr. Willey: As I said, we are intervening by legislation to rectify a contract and doing it in the cases of greatest hardship. The right hon. Gentleman is persuading me that this is a matter we should look at again.
  Mr. Boyd-Carpenter: I have long since abandoned any hope, during the Land Commission debates, of any capacity to persuade the right hon. Gentleman of anything, particularly anything that happened to make sense. He must realise that those questions test, I think decisively, the validity of his principle.
  The Rent Act limits were genuinely designed—I think wrongly, for I think that they were placed too high—to cover the areas where there was shortage and where it was necessary to protect tenants, or would-be tenants, from the effects of the housing shortage. They had nothing to do with transfer of a capital asset, a
  1312
  capital asset which can be resold. Therefore, one is left in great doubt whether the right hon. Gentleman believes in this convenient principle, if he does not apply it right across the board.
  Why is it that at £210 a year in the provinces that great principle that the present law provides for legalised confiscation comes abruptly to an end? Why does it not apply in the case of flats? The right hon. Gentleman said something about flats in his speech, and I hope that his right hon. Friend will clear it up in his reply. Did his indication that flats might be brought into this category because of other legislation dealing with the Wilberforce recommendations concern an Amendment to be introduced into the Bill or subsequent legislation?
  Mr. Willey: I am obliged to the right hon. Gentleman for allowing me to continue the discussion. That would not be a matter for this legislation because we must await the legislation promised pursuant to the Wilberforce Committee's Report.
  Mr. Boyd-Carpenter: Then flats are outside this great principle under present legislation.
  Mr. S. C. Silkin: I think that the right hon. Gentleman's point is the only one I have heard from him so far with which I entirely agree. May I take it that he and his right hon. and hon. Friends would join with hon. Members on this side of the House who put down an Amendment to remove the rateable value limits from the Bill and also to include flats?
  Mr. Boyd-Carpenter: If the hon. and learned Gentleman agrees with me, I must be wrong, because no one has been more wrong than the hon and learned Gentleman in this matter. Because I thought that he was not in the House I did not mention earlier that he has written an article of which he knows that I am aware—and he is aware of mine on the same subject—in which he makes the flat-footed statement that the leaseholder built the house.
  He knows that the purpose of what I am doing is to test the validity of the Government's principle and not to see whether anything can be patched up out of this hotch-potch of a Bill. I do not want to extend the mischief effected

  1313
  by the Bill an inch further than the Minister wishes. But I am entitled to point out—and I think that it is some embarrassment to the Minister—that his own principles are put in doubt by drawing that line of demarcation.
  I am sorry to have detained the House for longer than I had expected, but it was because I gave way to many interventions. I hope that I did not incur the displeasure of the Chair. I must now come to the point of development and redevelopment.
  I hope that the Minister realises the damage he is doing to redevelopment. As I understand the Bill, if when the leases fall in the freeholder wants to redevelop an estate, he must first grant a lease of 50 years to the leaseholder and then get back the lease and compensate the leaseholder for it. That means that on top of the high cost of building today —the right hon. Gentleman knows that it has never been higher—a redeveloper will have to pay a large fine for every house he takes in for redevelopment—the value of the 50-year lease. I hope that the right hon. Gentleman realises the damage he is doing to redevelopment in that way.
  He is making it inevitable that redevelopment will not take place except where it is thought that colossal rents can be demanded for the redeveloped property. That is a recipe for the creation of slums. One can see in parts of London, such as Islington and Southwark, fine houses that have gone back to slums through not being redeveloped. The Bill is a further blow to redevelopment, and if he is remembered for nothing else the right hon. Gentleman will be remembered as the creator of slums.
  Mr. E. Rowlands rose—
  Mr. Boyd Carpenter: I cannot give way again or I shall incur the grave displeasure of the Chair, and I want to finish.
  The Bill seems to me to be designed for Party political purposes. As my right hon. Friend said, it has had a thoroughly bad reception. It has been unanimously
  condemned by the serious Press and the professional bodies. It flies flat in the face of the considered recommendations of the Jenkins Committee.
  1314
  The Prime Minister may be right, and it may be popular with the million leaseholders. It is easy to make oneself popular with people by handing over other people's property to them. But I wonder whether one does make oneself quite so popular in that way and whether the Prime Minister, not for the first time, has not underrated the quality of the people with whom he is dealing. There may be many among those million leaseholders who will regard it as a pretty shabby thing that another citizen, not necessarily better off than themselves, should have his property removed by legislation and handed over to the leaseholder.
  I think that the citizens of this country do not like that kind of thing. To start removing the property of what may be thought to be an unpopular minority and transferring it to other citizens is a dangerous step for a Government to take. It is an unhappy precedent, recalling things that happened in other countries in our lifetime. It is a desperately unwise step, but it may serve its purpose in connection with the forthcoming elections. The Government may buy votes with it, but they will do so at a very high price and the price of their honour.
  5.48 p.m.
  Sir Barnett Janner (Leicester, North-West): This subject has been before the House for 30-odd years within my recollection. The speech of the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) has shown that the Tory Party stands where it has stood at all times on these issues. Did they really think that the pernicious—
  Mr. F. A. Burden (Gillingham): On a point of order, Mr. Deputy Speaker. Is it possible to get the hon. Member for Woolwich, West (Mr. Hamling) either to speak more quietly, or to rise if he wishes to intervene, rather than to continue a running conversation when an hon. Member is speaking?
  Mr. Deputy Speaker (Sir Eric Fletcher): It is desirable that all interventions should be made from a standing and not a sedentary position.
  Sir Stephen McAdden (Southend, East): Further to that point of order. Am I right in believing that no hon. Member is allowed more than one speech in

  1315
  a Second Reading debate? As the hon. Member for Woolwich, West (Mr. Hamling) has been talking incessantly, may I take it, Mr. Deputy Speaker, that you will not call him?
  Mr. Deputy Speaker: Interventions do not rank as speeches.
  Mr. Hamling: Further to that point of order. I was replying to a question from my hon. and learned Friend the Member for Stoke Newington and Hackney, North (Mr. Weitzman).
  Sir B. Janner: After that interesting and enlightening set of interventions, may I resume my speech?
  What hon. Members opposite have not yet realised is that their view of leasehold reform is not acceptable to the country. They should have learned that from the result of the General Election. Anybody in this country who is older than about 30 can remember the agitation carried on by the late Mr. Lloyd George. Everybody knew that people were beginning to reiterate "God gave the land to the people and not to the landlords".
  Everybody began to talk about the fact that when large plots of lands and estates had been given away interests in them were created artificially. They said if anything belongs to the people it is the land on which they stand. The distinction between the land itself and what is built on the land is substantial. In other words, what a person puts into the land he is entitled to get a return for it, but what he does not put into the land is not his but is something created by somebody else.
  What we are doing today is trying to put the position into its proper perspective. I do not deny that there is bound to be trouble and difficulty for some people. Every piece of legislation brings difficulties to somebody. But it is no good anyone suggesting that this proposal has not been on the cards for many years. It has been known that when a Labour Government came into power it would introduce leasehold reform of this nature.
  Who can complain? The people who speculated on the fact that leasehold reform might not be introduced? Are they entitled to say that although a majority of the country were in favour of lease-
  1316
  hold reform, they did not believe that it would ever come about, took a chance on this and therefore are entitled to complain about the Bill? The right hon. Gentleman believes that the transactions which took place were based on the fact that leasehold reform would never come about, although even the Tories pretended that they would introduce it. I hope that he will remember that when considering the difficulties. We did not create the difficulties. The Tory Party created them. They have led people to believe that this would not happen. The country was not prepared at the last election to accept that belief. We debated this subject only a few days before the election. It was not pushed under the carpet. It was a live and important proposition which was put to the country, and the country accepted our view.
  Mr. Burden: A great many propositions were put to the country at the last election on which the Labour Government have completely scuttled.
  Sir B. Janner: I am talking about this subject. I know that hon. Members opposite are trying every device to avoid the issue, but they should not try that with me. I am too old a politician for that. It is like water off a duck's back. But I am far from being too old to argue my case.
  Let us discuss this matter on its merits. There are difficulties, some people will suffer and some will lose. But after 60 years of the Rent Acts, to say to the country that the sanctity of contracts is such that it must under no circumstances be interfered with is sheer nonsense. We then have to deal with the position which was created because the social conscience of the country said that there are certain contracts relating to tenancies and occupation of land which are contrary to the public interest, and although some people will suffer by not getting higher rents, although they expected to get them, nevertheless, we must deal with the matter.
  How can it be suggested that we must not alter the circumstances relating to property? Every piece of legislation alters something and almost invariably contracts, either written or unwritten, are in existence in regard to the subject matter. Are we to take the correct step, in spite of the difficulties which may arise, or shall we remain in the same

  1317
  bad condition in regard to land about which I, for my part, and many hundreds of thousands of people have been complaining year in and year out for many years?
  Mr. Peter Hordern (Horsham): Is it the hon. Member's proposition that any contract which is made, and which is subsequently found by a Government in their view not to be in the public interest, can be broken at any time?
  Sir B. Janner: No. The hon. Member must not put words into my mouth. I have never said that and never would. I said that if it is in the interests of the community as a whole, if it has been put to the community, as this issue was put to the community, and if the community have returned a Government which included leasehold reform as a substantial part of its programme, particularly in Wales, then, irrespective of the harm which may be done to some individuals, the Government are right to introduce that reform. We are doing what we can to mitigate that harm as far as possible, and I will explain how.
  This is an extremely interesting matter. I am President of the British Association of Leaseholders, and for 30 years I have felt that the leasehold system is a blot on the country. Men and women who have built houses, and established their homes in them, have subsequently lost them under the leasehold system. I could give illustrations from the Welsh valleys. What happened there? Often the land had no more value that that of agriculural land. [HON. MEMBERS: "Less."] I prefer not to exaggerate. Some of the land is worth something for agricultural purposes. But in the main they did not use that land. They occupied land which was not worth even that amount, and there they established villages and towns because people were building there and were creating values for that area. Consequently, the landlords are not only not entitled to the building, I am not sure that they are entitled to any increase in value which has accrued to the site as a consequence of the development.
  Mr. Ednyfed Hudson Davies (Conway): In many areas land was not only valueless but was land which had previously belonged to the whole society as common land but had been taken over
  1318
  by the ground landlord under the Enclosure Acts.
  Sir B. Janner: I have a limited time at my disposal and I do not want to incur your rightful wrath, Mr. Speaker, by speaking for too long. This is a wide subject and perhaps another hon. Member will deal with the question of common land. I want to deal with another point. I would ask the right hon. Gentleman to look at this from that point of view. Sanctity of contract? Yes, as long as it does not interfere with public good. There must come a time when some change must be made which, in spite of contracts, must affect the tenants. Again, is it not reasonable for any one to say that it has not been in contemplation that the strict sanctity of contract in respect of land cannot be upheld since 1915 if against public interest. It has worked.
  I know the position in South Wales very well. What nonsense it is for people to talk about this being a struggle to make profits out of it by the tenant. Do they understand what a home is? Do they not know how many tens of thousands of people have realised that this Act will come into force and have looked upon their houses as their homes? Do they not know that these people would regard it as robbery if these so-called market values are imposed? What is so wrong with a landlord being told:
  "Look, you may have made a mistake and miscalculated; you did not think that leasehold reform would come in, but it has. What is your interest? Your interest is in the site."
  [Interruption.] Yes, I know the expression "de solum jusque ad caelum". That should not mean it is for God. The house is definitely different from the land.
  I would like to raise a question of duress. If a man who has to find a home near his work and has to rent a piece of land and is told that he himself must build the house on it for the landlord to take possession of eventually, is it believed that he would want to do that? He was forced to do it, although the land was worth nothing, and the contract into which he was entering was a contract obtained by force.
  Perhaps I have spoken with more emotion than I should, but I know the position and I know what these families are suffering from. I know that in the

  1319
  London area there is to a great extent the same problem. I would like the right hon. Gentleman to look at this again. For my part, I would tell the House that I am not happy as to whether we are not giving away more than we should. Let my right hon. Friend go down to South Wales and ask what the people there feel about it. This is a Measure which, when it protects people who come within, the same limits of the Rent Act, allows for some argument. Supposing that these people were allowed to stay on for 50 years, at a controlled rent, does the House not think that that might have been an alternative which could have been introduced so that the landlord would not have been any better off?
  He would have been in just the same position as he is being put in now; possibly he is in a better position now than he would have been in those circumstances. He bought the land if he did not inherit it—which happened in many cases—because he thought that vacant possession would come and he would edge in on this. Perhaps some would say "Good luck" to him if he gets away with it, but he is being stopped, and if the landlord sits down and works it out he will find that the case for the Bill is a reasonable one. He suffers, but he does not really deserve to feel aggrieved, because he knew that the country would have leasehold reform whether he or anyone else was against it, since he knew that the Tories could not exist as a Government because of their inefficiency and the way in which they mishandled the country's affairs.
  6.5 p.m.
  Mr. Hugh Rossi (Hornsey): I find myself in substantial disagreement with a great deal that has been said on both sides of the House from both Front Benches. Before I develop my argument, I have to declare three interests. The first is a professional interest. A close concern over the years with the problems of landlord and tenant has led me very firmly to the view that the anomalies and inequities of our leasehold system can be cured only by compulsory enfranchisement.
  My second interest is a personal interest. I am also a leaseholder, but like
  1320
  the Minister, my lease is of such a length that it is not of very immediate concern to me whether I acquire the freehold. Like my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), the rateable value of my property is such that it could not concern me in any event under the Bill as it now stands.
  The third interest that I have is a constituency one, and it is this interest which I desire to argue this evening. Hornsey is an inner area of London, which saw its greatest development between 1880 and 1900, at the turn of the century. This is the story of much of Greater London. The sudden expansion was due to the great industrial growth which took place, and to the increasing facilities of transport and commuting, brought about by our growing railway system.
  The development to provide the accommodation for people flooding into the towns was brought about by the leasehold system. It was a system admirably suited to what was required in those days. It advantaged all the parties to the contract. The landowner was assured of an income over a period of 99 years, far greater than he would have received per acre if he had continued to use the land for arable or pastoral uses, without any of the vagaries of the season to take into account. The builder was able to set about his business of building and selling houses without the capital outlay that would have been involved in acquiring the land—
  Sir B. Janner: The hon. Member should know, and should be good enough to say, that it would have cost him practically nothing to buy the land.
  Mr. Rossi: In terms of present-day money, yes, but in terms of those days, it might have been a substantial amount. It also advantaged the house purchaser, because all that he was concerned to do was to pay the builder his profit for building property. He was not concerned with the capital payment for the land, spreading his ground rent over a great number of years into the future. For the purchaser there was this considerable advantage, which the hon. Member would surely recognise—he had a guarantee that the amenities of his property would be preserved by restrictive covenants

  1321
  imposed for the benefit of the whole estate. This was really important in days when town planning did not exist. Do not let us decry the leasehold system as something which has fulfilled no useful function in the history of the development of our cities.
  If conditions had remained the same, if the parties to the original contract had remained the same, it would be extremely difficult to argue today in favour of enfranchisement. After all, the leaseholder paid his price willingly and openly—
  Mr. Hamling: No.
  Mr. Rossi:—for the use in those days of land and property over a period of years in the knowledge that ultimately that property would revert to the owner. But—and this is the big reservation, the big proviso—neither the parties to the contract nor social conditions have remained the same over the years. We must consider the leasehold system in the light of both those considerations. This requires an historical approach, as the Minister indicated.
  I should like to take two aspects of the interests in property—the freehold and the leasehold. On the freehold interest, changes in family fortunes and the incidence of Estate Duty led to the break up of large estates. Between the two world wars large estates were sold to insurance companies and trust funds, and there was a recognised value for the freehold reversions. The price was normally calculated at between 20 and 25 times the ground rent. Therefore, a £10 a year ground rent would be purchased for about £250, which represented to the trust fund or insurance company a 4 per cent. return on its invested capital.
  When those estates were coming on the market, the leaseholders were not, unfortunately, given the opportunity to buy at these prices, because it was far more convenient to the landowners to sell blocks of 20 or 50 leasehold properties rather than engage in 20 or 50 individual transactions. Therefore, the leaseholder was by-passed and he lost the opportunity to buy his freehold.
  Then we come to post-war circumstances, when it became the policy of insurance companies and trust funds to move into equities—into stocks and
  1322
  shares. This was made much easier by legislation which widened the powers of investment of funds of this kind. In more recent years—and here I speak from what I have seen in my constituency—insurance companies and trust funds and the Church Commissioners have been selling to leaseholders at about 40 to 50 times. the ground rent. One might say that this was equitable and fair, because the jump from 20 to 40 times the ground rent represents the decline in the purchasing power of the £ and they were recouping to themselves their original capital.
  However, they found that their market at these prices was limited, in the main, to the leaseholder, because as an investment a freehold reversion was not very attractive. There was a great flurry of activity in this matter 10 or 15 years ago. The freeholders sold as many freeholds as they could to the leaseholders. A residue of leaseholds was left in their hands because some leaseholders were not wise; they passed up this second opportunity. An option on the residue was given in the London auction market to the gentlemen who inhabit that institution. In the main, these gentlemen are speculators waiting to move in for the kill as soon as the leaseholder finds that he is forced to buy the freehold for one reason or another. That, as I see it, is the way in which freehold interests have devolved in my constituency since their creation about 99 years ago.
  Similarly, the leasehold interest has changed hands a great number of times, but not as between investors, people looking for a safe deposit for their money and a reasonable return on their capital, but as between people looking for homes and roofs to put over their heads and the heads of their families. As the pressure of population grew on the centres of our towns, as the competition to buy these houses became more and more fierce, the wasting nature of the leasehold interest tended to be disregarded in the purchase price paid for the property. Because of the social conditions which have appertained in the post-war period, people have paid considerably more for their leasehold interest than it is worth in the nature of a wasting asset.
  Surely our concern is to take note of these social conditions and to ameliorate the situation where we can by legislation. For this reason, I am wholeheartily in

  1323
  support of any Measure—I do not necessarily say this Measure—which would ensure to the leaseholder the ability to buy the freehold of his property.
  There has been talk about the sanctity of the contract, and it has been said that to give the leaseholder the power to buy the freehold against the will of the freeholder is a breach of that principle. But what does this concept really mean? It means that when two adults have freely entered into a contract the law will ensure that the bargain between them is enforced. This principle must be right, because otherwise there would be complete chaos in every activity.
  Sir B. Janner: I am listening with considerable interest to what the hon. Gentleman is saying, but he will remember the words in the 1915 Act to which I referred:
  "any agreement to the contrary notwithstanding".
  Mr. Rossi: I appreciate that. Perhaps the hon. Gentleman would let me develop my argument on this matter.
  The common law recognises circumstances in which contracts apparently freely entered into can, nevertheless, be set aside, since it would be inequitable to enforce them becausee of the measure of agreement between the parties; they were not completely ad idem. There are elements of misrepresentation and duress. The courts cannot consider duress caused by social circumstances, but we as legislators can, and this is our function today as I see it.
  However, while I believe wholeheartedly that relief must be given to the leaseholder and that he must be protected against the speculators who are waiting ready to move in for the kill, it would be wrong of us to propose that the terms of enfranchisement should be such that, in turn, we create an injustice against somebody else. It must be our function to try to hold the balance fairly and equitably between all the parties concerned.
  As I see the problem, there are two points in time in the life of a lease when difficulties can arise. The first and most obvious is at the end of the lease. To some extent, the 1954 Act has mitigated the situation by enabling the leaseholder to claim a statutory tenancy. The
  1324
  initial repairs that the leaseholder is required to carry out following the covenants as to the condition in which he must keep his property have, however, in my view, broken down much of the value that would otherwise be contained in that right.
  Time and time again I have seen schedules of dilapidations wielded as instruments of terror against leaseholders at the end of long leases, with the result that they have been dispossessed by the promise of the freeholder to tear up his schedule and forget about it. This situation is completely wrong and should not be allowed to continue. One way of curing this difficulty is to enable the leaseholder to buy in the interest that places him in this position.
  The second point of time at which the speculator normally moves in for the kill is at the 30-year point, when there are about 30 years to run on the lease, and the owner of the leasehold property cannot sell because no buyer is able to obtain a mortgage for 15 or 20 years with only 30 years to run on the property. The leaseholder is, therefore, obliged to go cap in hand to his freeholder and say, "Sell me the freehold so that I can dispose of my house and move to another part of the country because my job compels me to do this." At this point in time, again great injustices arise because freeholders take advantage of this situation.
  I recognise these injustices and I wish to see them cured, but not by another injustice being superimposed. I hope that the Government will be sufficiently fair about this matter not to mar what is otherwise an enlightened social Measure and have it dubbed as a cynical popularity-seeking Measure and to discard fair dealing and all morality in the process. I ask the Government to look again at the formula which they lay down for the purchase of the freehold interest.
  We have had great talk today on who owns what, who owns the land and who owns the building. All the argument has revolved around these concepts. I would like to put forward a pair of alternatives. I do not regard the freehold interest in the same way as has been spoken of today, for the historical reasons which I have been at pains to give at length.
  The ownership of a freehold interest in the circumstances of a 99-year lease

  1325
  is obviously no more than an investment. It is regarded as a safe place in which to put one's capital to give oneself a given return. Therefore, if one looks at the matter from that point of view, one of two things can he said. The first is that the freeholder should be paid such sum as, invested at a modern rate of return —say, 7 per cent.—would produce to him the ground rent that he is at present receiving, with some adjustments to provide for the fact that when he bought he did so with the view of a lease running out—something in the nature of a dated stock.
  If one could combine a formula with both those factors, it would be possible to arrive at a fair price mechanism without becoming embroiled in arguments about who owns what, merely regarding it, as the freeholder has always regarded it, purely and simply as an investment for his capital.
  The other way of dealing with the matter would be to look to the capital sum which the freeholder originally paid. This would require a disclosure on his part. One would then apply a multiplier to that sum based on the amount by which the purchasing power of the pound had fallen since he first invested his money in that type of investment.
  That would result in the freeholder getting back his original capital at its present-day purchasing price. If he were to be given back his money in full, he could not be heard to complain that he had been expropriated; he would have been given back what he had originally put in. What the speculator would be losing would be the profit which he had hoped to make at the expense of the householder. To that extent, I weep no tears over him. We should, however, take away from the Bill any suggestion of expropriation and we should look to a formula that would produce a situation in which the freeholder cannot say that he has lost his money as a result of measures that this House intends to take.
  Mr. S. C. Silkin: I agree 99 per cent. with everything that the hon. Member has said. On the first of his two alternatives, however—that of the lessor who has in mind that when the lease comes to end he will be able to realise an asset—would not the hon. Member agree that that is precisely what he would be getting as the result of the provisions of the Bill, because
  1326
  he would be getting the value of the land for redevelopment purposes?
  Mr. Rossi: I had considered that aspect, but I was, with deference, putting forward my alternatives because they remove us at once from the argument of who owns what, a somewhat fruitless and pointless argument, and provide an alternative method of calculation which would bring about equity between the parties. Either of the methods which I have suggested has the virtue of simplicity.
  On the proposals as put forward by the Government, the leaseholder and the freeholder cannot escape having to employ professional valuers to apportion the open-market vacant-possession price of the property between the leasehold interest and the freehold interest at any given point in time. Anyone who has had any dealings with this matter knows that valuers, like experts, often disagree. One sees it in compulsory purchase. There can be endless and tedious argument, calculations and, possibly, litigation about the value of a house and property.
  Ultimately, the only answer is that the value is what someone at any given point in time is prepared to pay for it. There is no absolute criterion in valuation. This is why valuers fall out and disagree. It is like the fair rent basis under the new Rent Act. We know how much difficulty and heartache there is about this. People who think that they will get a very low rent find that a "fair rent" means something different. They are disadvantaged because they go before the rent officer or panel and find that the other side has a better valuer than their own. This kind of situation and the expense of employing these people will be inevitable in using the methods proposed by the Minister in the Bill.
  If it is considered that the proposals which I have put forward are practical, fair and equitable, the Treasury can easily produce a table which can go into a Schedule in the Bill giving the multiplier to be applied to the price originally paid by the freeholder for his investment so that he gets back today's purchasing power of his original investment.
  I put forward these suggestions seriously because I am unhappy with the proposals contained in the Bill. It will be seen that I have argued for the Bill,

  1327
  against the compensatory aspects of the matter and against some of the speeches which have come from this side, and, at this point in the debate, I do not feel able to support either side, having very strong and firm views of my own.
  6.30 p.m.
  Mr. Robert Davies (Cambridge): I hope to be reasonably brief, and my task is made a good deal easier by the fact that the hon. Member for Hornsey (Mr. Rossi) conceded at the outset of his speech that the anomalies and injustices of the leasehold system could in his view be cured only by compulsory enfranchisement, and also by reason of the fact that he did not follow his right hon. Friends the Member for Altrincham and Sale (Mr. Barber) and the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) in their doctrinaire criticism of the principle upon which the Bill is based. So far as I can see, the alternative method of assessing compensation which he advanced is not very greatly different from the figure which would be derived from the appropriate Clause in the Bill as it now stands.
  I welcome the Bill. It will be of great benefit to hundreds of thousands of families and will remove from them the very real fear of being dispossessed of their properties or, alternatively, the insult of remaining in their own homes as tenants, which was the effect of the 1954 Landlord and Tenant Act. It is a Bill for which the Government have a clear mandate and for which the Labour Party has argued for the past 15 years.
  I welcome it in particular because it will be of considerable benefit to many of my own constituents. Something like 6 per cent. of the houses in Cambridge are leasehold, many of them recently built, and something like 10 to 12 pet cent. of all owner-occupied houses in Cambridge. The freeholds frequently are institutionally owned by colleges, though not always Cambridge colleges, and perhaps these are some of the charities to which the right hon. Member for Kingston-upon-Thames referred, because certainly they are charities. In the case of one very large area of land which is one of the remaining areas of building land in the city, the freehold is owned by a London teaching hospital.
  I accept entirely the principle upon which the Bill is based. It was chal-
  1328
  lenged by the right hon. Member for Altrincham and Sale and by the right hon. Member for Kingston-upon-Thames that the freeholder owns the land and the occupying leaseholder is morally entitled to the ownership of the building which has been put and maintained on the land. In fact, those words appear in the White Paper, and I cannot understand the objections which have been raised to that principle or to its implementation. But I will refer to some of these matters in the course of what I have to say.
  Reference has been made to the Report of the Jenkins Committee. As I understand it, one of the objections is that this change in the law would undermine the sanctity of contract in that the effect of the contract entered into originally will not be the same when the Bill becomes law. In my view, in many if not in most cases the parties to the original contract were not on an equal footing. It was not a free contract between equals, and it would not be inequitable to restore a balance which did not exist at that time. On the contrary, it would be inequitable not to restore the balance.
  After all, the leaseholder, who put the house on the land originally, acquired it from his father or bought it, was activated by need. The freeholder was activated, if not by greed then by a sense of gain or because it was a wise investment. That puts the parties on a very different footing. Very often, the leaseholder seeking to acquire the lease was not free to choose to do otherwise if he wanted to build a house, because the landowner was frequently in a monopoly position, owning all or most of the land. At present, there is often no option whether or not to choose to buy a house built on freehold land, and that is largely the case in my constituency at the present time. There is a great shortage of building land in the City of Cambridge, and the most readily available modern houses are built on leasehold land the freehold of which belongs to St. Thomas's Hospital. That has not reduced their price. The price of those houses is as great as that of comparable freehold houses.
  If it is suggested that the Bill would affect the original contract, would interfere with the terms of that contract and, therefore, affect the sanctity of contract, I would point out that it was also the

  1329
  case with regard to the 1954 Landlord and Tenant Act. I see that the right hon. Member for Altrincham and Sale accepts that.
  It has also been suggested by the right hon. Member for Kingston-upon-Thames that this involves retrospective legislation in that it affects retrospectively the expectations of the parties to the terms of the original contract. That was a point which was made in the minority Report of the Jenkins Committee. But the Bill applies to the present and future, and not to the past. It refers to the past only in the sense that all legislation may refer to the past, but it does not follow that, because the present is partly determined by actions and agreements made in the past, the present and future ought to be unalterable.
  It is like tax legislation. The incidence of a new tax may be affected by actions and agreements made by individuals in the past and, therefore, it will be different according to those past actions. It does not mean that a tax is retrospective because its incidence will be different according to the actions taken in the past. I do not accept the Amendment which has been tabled, which is based on the assumption—indeed, the terms make it quite explicit—that at the end of the lease the house should be regarded as the property of the landlord. In my view—and this is a clear choice of how one regards this matter—the principle on which the Bill is based is absolutely right and therefore is does not involve expropriating the landlord to pay him the full value—indeed, the market value—of the land on which the house is built. Therefore, I consider that the Bill is wholly fair and equitable to all parties, and that it would be most inequitable not to change the law as it now stands.
  But I have considerable doubt whether it is fair or equitable to exclude from the right to enfranchisement the owner-occupiers of houses with a rateable value of over £400 in greater London or £200 elsewhere. The principle on which the Bill is based, that the land belongs in equity to the landowner and that the house belongs in equity to the occupying leaseholder, holds good equally in the case of houses with a rateable value of up to £200 and those with a rateable value over that amount. If it holds good in the one case, equally it holds good in the other. I see no reason why owner-occupiers of
  1330
  leasehold houses with a rateable value of over £200 outside London should be expropriated, if one accepts the principle that this is what will happen with this ceiling, without compensation at the end of their leases.
  If, as I believe, the present law is inequitable in the case of a rateable value of under £200, it is no less inequitable in the case of a rateable value over that figure. Indeed, the expropriation in the case of houses of higher rateable value would be greater. I see no reason for any ceiling whatsoever, nor can I see anything special about the 1965 Rent Act limits when those limits are applied to leasehold enfranchisement or the right to extend a lease.
  It is true that throughout the country as a whole only 1 per cent. of leaseholders will be excluded from enfranchisement or the right to extend their leases. I understand that the figure is 1½ per cent. in greater London. If it is argued that therefore this exclusion does not really matter, then, if it does not matter, why have any ceiling at all? It does matter, however, because although this may be the national average, as the Minister of State said when opening the debate, there are cases where the percentage is very much greater than 1 per cent., and indeed such is the case in my own constituency.
  In Cambridge the effect of the £200 limit will be quite serious in many cases. This arises from the fact that the cost of renting accommodation and of buying houses in Cambridge is very high, perhaps due indirectly to the presence of the university and colleges. Consequently, rateable values are correspondingly high. As a result, about 17 per cent. of leasehold houses in Cambridge are over the ceiling of £200 rateable value. A higher proportion of leaseholders than the national average, and a higher proportion than in Greater London, will be denied enfranchisement or the right to extend their leases. Indeed, I understand that it is a higher proportion than in any other place in the country.
  I would find it very hard to justify this to those of my constituents who occupy houses—not very big ones—with a rateable value of over £200. One good lady wrote to me. Her house, which is not particularly large, belongs to one of the colleges—I believe it is Trinity

  1331
  College—and has a rateable value of £202. I suppose that she could knock down the garage and reduce it to £200, but I cannot see why she should do that. There is no justice in it that I can see, and I hope the Minister will reconsider it.
  Many of my constituents believe that they already suffer from the fact that the size of the city is restricted in the supposed interest of the university and colleges. One consequence of that is that there is a shortage of building land. The price of accommodation is very high, hence high rateable values and this exclusion. It would be regarded as double injustice if the houses of leaseholders were now to revert to the colleges, many of whom own the freeholds, since leaseholders are put in this position because of the alleged interest of the university and colleges. I hope that the Minister will be prepared to reconsider this in Committee and will enfranchise those leaseholders also.
  Finally, I am concerned about the provision in Clause 28 enabling the university and colleges, and also boards of governors of teaching hospitals, to frustrate the wish of leaseholders to purchase the freehold of their houses or to extend their leases by obtaining a certificate from the Minister that the property will shortly be required for development. This would have most unfortunate effects in Cambridge if not properly applied, and would create a good deal of resentment. I hope I will be told, by either the Minister or the Parliamentary Secretary, what considerations the Minister will have in mind in deciding whether or not to give such a certificate.
  More precisely, what does "shortly" mean in the Clause? In other words, how long before the end of a lease can such a certificate be given? Will it be at the end of the lease, or could it be some years before the original lease terminates? What does "development" mean? Does it mean any permitted development under town planning, even if it were only investment, or does it mean, as I hope it does, only development for some public purpose, for example in pursuance of the activities of the university, the colleges, or hospitals concerned?
  If the leaseholder were frustrated in his wish merely to enable a university or col-
  1332
  lege to develop land for putting shops on it, then this would not go down at all well in my constituency, and I can see no justification for that. I hope that the interest of leaseholders will not be sacrificed to the university or colleges, as commercial developers, putting up shops or offices, and I hope that the Minister can give some reassurance on this point, which is of considerable concern to some of my constituents.
  I should like to make a similar point in regard to Clause 29, which enables a college or university, when selling the freehold or extending the lease, to reserve the right of future development subject to the consent of the Minister. I should like to know whether this is development of any kind or development which is germane to the pursuance of the objectives of that institution?
  Again, I hope very much that this right of veto, or retention of the right of future development, will only be exercised with the consent of the Minister if it is in the interest of the development of the university or college, and will not be exercised merely in the interest of future commercial development. I hope that the Minister will consider this point in committee.
  6.50 p.m.
  Mr. Emlyn Hooson (Montgomery): I follow the hon. Member for Cambridge (Mr. Robert Davies) in his argument that there is really no reason in principle for the exclusion of houses with a rateable value of £200 or over elsewhere, or £400 in London. The argument advanced in an intervention by the hon. Member for Cardigan (Mr. Elystan Morgan) that only 1 per cent. of the houses in the country will be affected by this exclusion is no reason whatsoever for their exclusion. If the principle of the Bill is right, and I am convinced it is, there is no reason whatever for importing a restriction which only has relevance to the Rent Acts.
  I hope that if the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) did nothing else—and I hope he did nothing else—he at least convinced the Minister of the rightness of not maintaining this exclusion, and from the Minister's reaction I thought that I saw signs that he was prepared at least to reconsider the matter.
  Mr. Roland Moyle (Lewisham, North): I hope that the hon. and learned Gentleman will think that the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) also did something useful in urging the inclusion of flats and maisonettes in the Bill.
  Mr. Hooson: I accept that, and I am glad that the hon. Gentleman mentioned it. I did not think that the right hon. Member for Kingston-upon-Thames actually advocated this. He brought it in as a sidewind, saying that because they had not been included this was a reason why the Bill as a whole should be thrown out.
  I think that this is the third debate on leasehold reform in which I have taken part since I came into the House slightly less than five years ago, and I think I am right in saying that no fewer than 25 Bills have been introduced into this House since 1887 in an attempt to deal with this problem. Whenever such a Bill has been introduced, whether by the Government or by a
  private Member, it has provoked the most tremendous attacks. It is astonishing how the landed interests find means of attacking any Bill, whatever its nature, and however moderate, to reform the law on this subject. They always find a means of attacking it, and so far they have always attacked leasehold reform very successfully.
  It is said that it is difficult to reform leasehold law. Of course it is. Whatever principle of reform one adopts when one starts interfering with our land law, one runs into difficulty, but this is no reason for running away from the problem. Basically we are dealing with an injustice which has been embodied in the law. Land law particularly is a reflection on the social structure of the time, and one finds that in the 19th century the law was manipulated, changed, and modified by the then ruling class to satisfy certain social aspirations and concepts.
  Mr. Martin Maddan (Hove): Of the Whigs.
  Mr. Hooson: Of the Whigs, and of the Tories, and no doubt it will be changed in time to suit the purposes of the Socialists.
  It is said that the land law of a country reflects its social structure. When
  1334
  I hear the argument hat one must not touch leaseholds, that one must not have the emancipation, the enfranchisement, of leaseholds because of the sanctity of contract, I really wonder, as I hope an enlightened lawyer, what we are coming to.
  This ghost was laid low many years ago. One has only to read the great judgments of Lord Wright or Lord Atkin in which they considered the circumstances in which the principle of sanctity of contract could be set aside or modified in the interests of the community at large. In these great judgments in the 'twenties those learned judges set out the principles to be considered when this kind of social amelioration was proposed by legislation and affected the sanctity of contracts.
  What kind of equality of bargaining was there when some of these leases were entered into? At one stage during the speech of the right hon. Member for Altrincham and Sale I thought that he was almost arguing that there was a case for separate legislation for Wales. It seemed that at one stage he conceded that the position in South Wales was markedly different from that in London and elsewhere. It may be, I know not. All I do know is that my experience of leaseholds is confined to Wales, and certainly there no one could possibly suggest that in the nineteenth century there was anything like equality of bargaining power between the landlord and the leaseholder,
  The truth is that the landlords owned a great deal of the land. People moved into the valleys and towns of South Wales in search of employment. They had to work or starve, and the only way in which they could obtain a house was to agree to take it on a lease. It was not that they entered into a bargain openly and freely. It was the only "bargain" open to them. They had to take it or go away and starve. There was a virtual monopoly in the holding of land. The monopolists called the tune, and there was nothing that the prospective leaseholder could do about it. In these circumstances, it is not only justifiable for this House to intervene; the House has a duty to do so to put the matter right.
  Looking back on it, especially I think in South Wales and North Wales, in the

  1335
  Llandudno and Bethesda areas, it is equally true to say that our land law saw to it that the landlord had a permanent interest in the land and the ending of the lease was to his benefit because he took over the bricks and mortar as well. This was unjust. When the right hon. Member for Altrincham and Sale argued that the basis of the compensation proposed by the Government was unfair, he forgot to say that he could make that criticism only if the initial bargain was just and fair. What we are trying to do by this Bill is to put right a wrong which has persisted for decades.
  I think that the right hon. Member for Kingston-upon-Thames is right to this extent; that when there is reform one cannot achieve complete fairness for everybody. Somebody is hurt to some degree or other. This is highly regrettable, but it occurs, and all that the House can do is to try to see that the hurt is as small as possible, and that it is distributed as fairly as possible. I think that the question we have to answer is which is the greater injustice—to prevent the enfranchisement of leases, or to allow the enfranchisement to take place on these terms knowing that some people will be hurt to some degree or other?
  I thought that the speech of the hon. Member for Hornsey (Mr. Rossi) was in marked and enlightened contrast to the speech of the right hon. Member for Altrincham and Sale, and indeed that of the right hon. Member for Kingston-upon-Thames. It was one of the most interesting speeches that I had ever heard in this House in a debate on leasehold reform. His proposals as a basis for compensation are at least deserving of study. He did not convince me of their rightness, but he clearly had thought about them, and they deserve closer study in Committee.
  The right hon. Member for Kingston-upon-Thames took the example of a man who had bought the fag-end of a lease and would therefore benefit from the Bill. But, the line has to be drawn somewhere. Wherever it is drawn, it can be argued that someone will benefit unfairly; that someone will get a windfall and benefit from a general principle although his individual circumstances are such that perhaps he ought not to derive that benefit. However, I think that even the
  1336
  right hon. Member for Kingston-upon-Thames will concede that the line has to to be drawn somewhere. Where would the Conservative Party draw that line? This really is a basic question.
  Mr. Boyd-Carpenter: If the hon. and learned Gentleman had been here he would have heard my right hon. Friend the Member for Altrincham and Sale (Mr. Barber) say where—at market price.
  Mr. Hooson: With the greatest respect, I was here throughout that speech and I heard the three alternatives put forward by the right hon. Member for Altrincham and Sale. But he did not deal with the fact—and the right hon. Member for Kingston-upon-Thames has not dealt with it—that in Wales many leaseholders either built their houses or inherited them generally from parents who had built them. Is it to be said that the only fair basis for enfranchisement of their leaseholds is that they should buy what they built? That seems completely wrong.
  The hon. Member for Hornsey was correct in saying that most landlords regard the purchase of ground rents as an investment. If they are decent landlords they regard them as a long-term investment. If they are speculators, of course, they regard them merely as matters of speculation. In Wales we have been more concerned with the original bargain.
  I understand that the main burden of the argument of the Opposition is that it is difficult to reform. If we reform we are bound to cause some injustices. That is conceded, but that is no argument against reform. This reform has to be tackled; it is long overdue. There was a basic injustice in the original law. We do not want to perpetuate that injustice simply because various transactions have taken place in the meantime on the basis of the original legal position.
  Many Bills concerning this subject have been given a Second Reading, but they have not become part of our statute law. I hope that the Government will ensure that this Bill—which may be amended considerably in Committee—does become law. It is vitally important that it should.
  7.2 p.m.
  Mr. Roland Moyle (Lewisham, North): It is a great pleasure to follow the hon. and learned Member for Montgomery (Mr. Hooson). Whatever criticisms we

  1337
  may sometimes have of the Liberal Party it is fair to say that it has a long tradition of embattlement against landed interests. I am glad to see that the light is still burning brightly, and that the hon. and learned Member is doing his best to keep it alive. I notice from the debates on leasehold reform that it is a tradition to declare one's interest. I have to tell the House that unless the Bill is passed there is some prospect that in 900 years from next 7th July I and my family will be facing eviction from our present establishment. I can bear the prospect with such fortitude that it is unlikely to cloud my judgment of the issues before the House. However, I am contemplating moving into another house shortly. That has only the fag-end of 80 years remaining of a 90-odd year lease. Perhaps I ought to declare that interest, too.
  Before I entered the House I was employed in industrial relations. In those days I often thought that the relationship in our society which caused the greatest amount of
  tension was that of employer and employee. Since I became a candidate and subsequently a Member of Parliament and have held my advice service and surgery in my constituency, I have come across a more significant relationship which causes a much greater degree of tension, namely, the relationship of private landlord to private tenant—on all fronts—including the private tenant rack-renting a flat or the leaseholder renting from a freeholder, which is the main subject of our discussion this afternoon. When that relationship goes wrong, as it often does, it affects the whole warp and woof of life. It causes more unhappiness than the relationship between employer and employee, possibly because it affects women more than men, in the first instance, and women may not be so capable of subduing their feelings of injustice from which they suffer day by day in the permanent framework of their lives. In last Sunday's Press a book was being reviewed by a learned gentleman who indicated what he thought was the profound effect on human emotions and developments of the desire to acquire territory. It may be that the acquisition of a house in which to live is a reflection of this fundamental human instinct. If so, we are playing with a very dangerous element in human nature when we con-
  1338
  sider the supposedly humble problem of housing our population.
  In the long run, therefore, we must try to get rid of the relationship between the private landlord and private tenant. We must cease to regard houses as things like ice creams, to be bought and sold, or taxi rides, and to treat them with a much greater degree of respect. I regard the Bill as a contribution to the removal of the private landlord-private tenant relationship. Many of my constituents have been waiting for this Bill to be introduced, and are waiting for it to be passed, rather like a parched man hopes to find water while crossing the desert. It is no exaggeration to describe their attitude in that way.
  The agitation for leasehold reform is not of recent origin. As the hon. and learned Member for Montgomery reminded us, it goes back over many years. It must be admitted that hon. and right hon. Gentlemen opposite have played their part in pushing forward the pressure for reform that we have today. I want to be fair about this. It was their repeal of the Labour Government's planning legislation which caused the increasing inflationary rise in house prices throughout the 1950s and in the early 1960s. The average leaseholder likes to regard his house as does the average freeholder. The price he has paid for his property is probably the same as that paid by the average leaseholder. The average leaseholder wants to put into his house—at least in the early part of the lease—the same care as does the average freeholder. He wants to look after it and he takes a pride in it. If he wants to sell it he wants to get the same price as his freehold neighbour. The bitter experience of many of my constituents in this respect was that they were unable to partake of any advantage from the rising prices of houses for sale to the same extent as are their freehold neighbours.
  It was this permanent factor in the situation that caused the immediate impact of the leasehold problem in my constituency. It is possible to take a high, moral tone in this matter. We all have our reservations about exploiting the inflationary rise of the market, but it was necessary in the 1950s and the early 1960s to keep up with that inflationary rise in house prices if we wanted to have a

  1339
  proper chance of buying another house when we moved from our existing one.
  The general objections to the leasehold system are well known. There is the payment of ground rent, for which most landlords do nothing at all. On this point I find myself in some disagreement with the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter). He tried to demonstrate that the passage of this Bill would increase the number of slums in our towns and cities, but I find that the existing law helps greatly to create slums in my constituency. Many tenants of what might technically be called "flats"—often rooms split into two by a piece of plywood with a cooker on the landing outside—come to me and say that the landlord or landlady is a leaseholder and refuses to do anything to improve the property because the lease will fall in in a few years, and they have no permanent interest.
  These tenants have to suffer because of the iniquities of the leasehold system. This not only affects the relations between the freeholder and the leaseholder but carries on throughout society and affects the relationships of the tenants—
  Mr. Hooson: Would the hon. Gentleman not concede that there might be something in the right hon. Gentleman's point about the extension of 50 years as opposed to the enfranchisement?
  Mr. Moyle: There might be, but my point is that the existing law contributes directly to the creation of slums—
  Mr. E. Rowlands: Would my hon. Friend also point out that, in many leases, there is a provision which makes the leaseholder pay money to the Crown landlord if he wants to improve, add to or alter his house? I know of cases in which a fee of £40 has to be paid before he can make this improvement.
  Mr. Moyle: I am grateful to my hon. Friend. I know his constituency well and know that he is well versed in the leasehold law. This is a problem which I, too, have come across.
  This is often not just a question of a lease affecting a house or a group of houses. In parts of my constituency, in Blackheath, there is a number of Regency houses, the leases of which would fall in at different times. However, on the other
  1340
  side of the constituency, where houses were developed in the 1920s or before the First World War, it is not only a case of one street in which the leases would fall in at one time but of whole groups of streets on one estate which were developed at the same time.
  Here again, we face the question of the balance of the bargain between the freeholder and the leaseholder. Much has been said about the unfortunate circumstances in the nineteenth century, in which the leaseholder was forced into a bad bargain, but that is still going on, at least in my area. If a person wanted to buy a house in my constituency, there would be very little choice of the sort of house. If he went househunting at the right time and a freehold house was available, he could buy it, but if, on another occasion, only a leasehold house was available for sale, he would have to buy that.
  A careful study of the property columns shows no difference at all in the purchase price asked for the two types of house. Here again, therefore, the iniquities of the situation in the nineteenth century are being carried into the buying situation of the twentieth century; the problems of the leasehold system and the injustices which people suffer will probably be carried into the twenty-first century, because 99-year leases are being created now under the same sort of commercial conditions as affected the bargains of the nineteenth century—
  Mr. Hamling: Would not my hon. Friend also agree that, in the Blackheath part of his constituency, the fact that leases fall in at unequal times means that the development is piecemeal and haphazard?
  Mr. Moyle: This occasionally happens, though there is great social pressure from the people in Blackheath to secure an overall and balanced development and to maintain their amenities. To digress, we have an excellent residents' association which looks after these matters.
  There is a lack of security in the leasehold system, which especially affects the situation when the lease is nearing its end. There is also the question of the sanctity of contract, which is not one of those immutable scientific laws. This needs to be said, in view of some of the remarks made by hon. Gentlemen opposite. It is

  1341
  not like Boyle's law, which always operates at normal temperature and pressure; nor like Archimedes' principle—though I cannot quite remember what Archimedes' principle is at the moment—but the sanctity of contracts is not that sort of a principle. It is a legal principle which should apply in the circumstances for which it was made, in which two parties can come together in positions of relatively equal commercial strength. That is an entirely different position and one could have a different argument about it.
  I am glad to see that, in my right hon. Friend's reform, the emphasis is not on houses. I have said that we ought to get away from the idea that houses are like ice cream or taxi rides, for buying and selling. The emphasis of this reform is on homes and this is the important thing. This is where it appeals to people's sense of justice.
  This happens because the sub-tenant, who is actually resident in the house, has the right of enfranchisement, as opposed to the tenant, who is not resident. There are some attractive provisions in Clause 7 which would provide that, if the person who
  has the right of enfranchisement dies, that right passes to his next-of-kin who has lived in the house for a considerable time and becomes the tenant. This emphasises the principle of homes as opposed to buying and selling purely properties and commodities.
  There are one or two defects which should be reformed. I should like to see the delimitation of the leases to be affected by this Bill, which at present relates to all those over 21 years, amended to read "21 years and over". This would marginally include a large number of leases which, at the moment, are just marginally excluded and are causing a great sense of injustice.
  I lay myself open, in saying this, to the criticism that those just below 21 years may develop the sense of injustice, but I think that 21 years is a very popular length of time for a lease to be granted. That reform would please many people without doing much harm.
  Like most hon. Members, I felt at one point that the right hon. Member for Kingston-upon-Thames was going to urge that flats and maisonettes should be included in the Bill and I was bitterly disappointed when he did not. I follow his
  1342
  general argument, but would give his logic a different twist, and say that the Bill ought to be extended to include flats and maisonettes.
  I follow his logic in another respect, but take a different route. I believe that the Rent Act limits of rateable value ought to go and all leasehold houses should be included in the enfranchisement provisions.
  I understand that it is very difficult, on principle, to bind the Crown Estates, but the Minister ought to think again and find a way in which the obligations which other freeholders are being asked to accept should be accepted by the Crown Commissioners as a matter of law and not just of convenience.
  If it is left as a matter of convenience, there will always be a doubt in the mind of a purchaser of a leasehold house from the leaseholder of the Crown Commissioners that the latter would be able to step in and thwart the right of enfranchisement, and that this would affect the leasehold price. I should like the Minister to reconsider this matter thoroughly.
  I have devoted very little time to a consideration of the speech of the right hon. Member for Altrincham and Sale (Mr. Barber), because I began to wonder during his speech whether he and I had lived in the same community all our lives and were fellow countrymen. I found no point of contact between his remarks and what I believe to be the feelings of the vast majority of people. He made great play with the fact that the law was being altered. It is, fundamentally so. But he cannot get it into his cranium that the ordinary people of Britain feel a deep-rooted sense of injustice about the existing law. That being so, the law must be altered to conform with what they believe to be a just situation.
  This is not a Socialist or minority view. It is the view of the overwhelming number of my constituents, most of whom have had direct personal experience of the operation of the leasehold laws. This is a fact of life from which the right hon. Member for Altrincham and Sale appears to be completely cut off.
  By far the most distinguished contribution from the benches opposite came from the hon. Member for Hornsey (Mr. Rossi), although my right hon. Friend

  1343
  should be wary of being distracted by his blandishments. After all, this is the best leasehold reform Measure we have and in view of the long history of frustration which movements to this end have undergone, my right hon. Friend should take his courage in both hands and drive straight through with the Bill—subject, of course, to accepting the suggestions which I have made for improving it.
  I listened with distress to the confession of the hon. Member for Hornsey that his house was outside the rateable value limit for enfranchisement under the Bill. I heard the same information being given by the right hon. Member for Kingston-upon-Thames, although I regret that, in view of his contribution, I did not feel the same distress as I felt for his hon. Friend the Member for Hornsey.
  Mr. Boyd-Carpenter: Does the hon. Gentleman mean that he would not support any Amendments such as his hon. Friends have been talking about to raise the limit?
  Mr. Moyle: I was coming to that and would say that if the hon. Member for Hornsey would do what the majority of the electorate has already done—and put his fate in our hands—he could rest assured that we would give him the right to enfranchise his house.
  7.23 p.m.
  Mr. Gwynfor Evans (Carmarthen): I am glad to be speaking following the helpful speech made by the hon. Member for Lewisham, North (Mr. Moyle), and I was pleased to note that he has some connection with the country with which I am most concerned. In that country we have been waiting for a very long time indeed for the alleviation of an old injustice, and, bearing in mind the length of time during which this social injustice has been continuing, it is fair to say we should have had this legislation not this year or last year but 20 years ago.
  It is some reflection on our constitutional position and political arrangements that this Measure was not introduced sooner. The injustices arising from the leasehold system have been more acutely felt in Wales than elsewhere in these islands. In Wales we have a widespread form of house-ownership. Over the years, our menfolk have built their own homes and the custom of owning one's own
  1344
  house is considered by everybody to be a good one. Home ownership strengthens family ties and it enables the home to be handed on to future generations and provides some independence in the face of the over-shadowing power of the State. The White Paper recognised, though not adequately, the injustice of the situation and stated that while the land belonged in equity to the landowner, the house belonged in equity to the occupying leaseholder.
  Contrary to what some hon. Members have said, I believe that this principle is eminently fair and reasonable and, as far as the Bill goes in sticking to this principle, I welcome it warmly; and if there is a Division tonight I will vote with the Government. However, it is disappointing to note that this principle is not actually written into the Bill and I feel that the courts will be able to disregard it.
  Even such provisions that are made in the Bill come too late for some of the areas where this injustice is felt most acutely; where contraction of old industries—something which has for long been foreseen—has been allowed to cause migration, unemployment and depopulation and where the Government have failed to secure condition to bring about alternative employment.
  Many hon. Members have recently been to the Rhondda. One cannot help being depressed as one moves through the valley streets and sees the vast number of houses lying empty and for sale. This is an area which has 9·1 per cent. unemployment. The population has fallen to just over half what it used to be in a very short space of time and people are still leaving at the rate of 800 a year. One wonders how much this Measure will do for leaseholders in this area. What is the value of the Bill when assets like this are declining so sharply? How can it be valuable to people on the dole who wish to buy their freeholds?
  We must recognise, however, that for those who are in a position to buy their freeholds the Bill will be of considerable help—but they will have to pay what is said to be a fair price and one must consider whether the basis of the compensation is fair. I gather that the price will be based on value of estate in fee simple, subject to a tenancy, but this

  1345
  appears to leave much to be desired because it follows that the longer the tenancy has to run the lower the price the tenant must pay for enfranchisement. Most of the leases in Wales were negotiated more than 40 years ago. In this situation, tenants will be at a grave disadvantage compared with newer areas which have been developed since the war, of which there are comparatively few in Wales.
  Where a tenant cannot afford to buy the freehold, the only alternative is to apply to a 50-year lease. That being so, let
  us consider the position. At any time after the granting of this 50-year extension the landlord may, at any time during the extended period or within 12 months before it begins, apply to the court for an order to resume possession for purposes of redevelopment. Thus, these leases could be terminated at any time during the 50-year period for the benefit of landlords. The Conservatives do not appear to have much room for complaint since this is as much a landlords' charter as it is a tenants' charter.
  Mr. E. Rowlands: The hon. Gentleman states that the lease could be terminated after it had been extended, the leaseholder having chosen to opt for the 50-year extension. Surely that extension is binding and cannot be terminated.
  Mr. Evans: I would be glad if the Minister would confirm that to be the case. I understand that if the property is required for redevelopment the steps I outlined could be taken. That is why this provision defeats the whole purpose of the Bill and there seems nothing to prevent speculative landlords from taking advantage of it.
  In areas where such large estates as Plymouth Estate and the places at which Western Ground Rents operate, one can at once see what a precarious provision the 50-year extended lease could be for the tenant. Perhaps even more important is the case of many estates where the price of the freehold of the properties, which are nearing the end of their terms of lease, will not be, say, five years plus 50 but, rather, five years with a likelihood that landlords will put in an application to the courts under Clause 17 to increase the price of the freehold. In that situation, therefore, I believe that the leaseholder may be unfairly expected to pay not only the price of the land
  1346
  but the development value also. As the Bill stands, all the landlord need do is to put in an application not more than 12 months before the end of the current lease and the value of the freehold to him will be virtually the value of the land with a lease of not more than 12 months left. That could be a way of getting more than a just price, yet the purpose of the Bill is to preserve the people's right to treat their house as their own.
  The Bill could also be a licence for extortion. In view of the age of many of the properties in Wales, the provision could be self-defeating unless radically amended—
  Mr. Hooson: There is substance in what the hon. Gentleman says, but would not his point be met if instead of having an option of enfranchisement or the extension to a 50 years lease there was a simple provision for enfranchisement of the leasehold?
  Mr. Evans: That may be so; it is largely a matter of drafting to see how that end could be reached. I doubt very much whether it is in the mind of the Government to allow that situation to exist.
  The Bill provides another way for big landlords to exploit tenants. Clause 9(3) provides that the interest of the landlord in neighbouring property shall be taken into account in assessing the price payable. The site value, if it is to be fair to tenants, should be its value for housing untrammelled by other considerations. Again, Clause 15(2) can cause widespread concern in Wales if its purport becomes known, because it is too favourable to ground landlords and the larger property companies. The new ground rent is to be the letting value of the site. In areas where the economy is declining that provision can have little meaning, but in areas where there is development of town centres—Cardiff, Newport, Barry, Swansea, Merthyr Tydfil, Llanelli, and others—will the leaseholders be charged a ground rent based on the site value for office, commercial or industrial development? If that is so, could not that rent be prohibitive? Consideration of this point in Committee may lead to some adequate amendment.

  1347
  If my interpretation is right, it seems possible that there is one law for the private landlord and another—
  The Secretary of State for Wales (Mr. Cledwyn Hughes): The hon. Member is wrong in what he has just said about Clause 15. I would ask him to look more carefully at subsection (2,a) of that Clause. He must study the Bill more carefully before making these sweeping statements.
  Mr. Evans: The Minister will be able to reply later.
  As I see it, there appears to be one law for the private landlord and another for the public landlord, and this question crops up in connection with the Bill's application to local authorities and new town corporations. The 21-year lease has been mentioned, and one knows that the wording of the Bill may possibly exclude local authorities because under the Local Government Act, 1933, a local authority is prohibited from granting a lease in excess of 21 years. Perhaps the Minister will comment on that side. I should be glad of an assurance that leases granted by local authorities since 1933 are not outside the purview of the Bill. It appears from the wording that they may be, but—
  Mr. Alan Williams (Swansea, West): To the best of my knowledge that is not so, because the authorities in Wales are at present, as ground landlords, giving leases for 99 years.
  Mr. Evans: There is the point that even in the case of leases made since 1933 the right of enfranchisement is restricted by the power given to local authorities to say that the property will shortly be required for development. These are points to be looked at from the standpoint of the tenant to see whether this Measure can be so amended as to ensure adequate treatment of the present situation in Wales.
  7.35 p.m.
  Mr. Ednyfed Hudson Davies (Conway): We are considering the Second Reading of a Bill that will remove not only an injustice but an iniquity. This is a moral measure as well as a legislative one. The Government are fulfilling a pledge and this is a very proud day for many hon. Members who have for several decades
  1348
  been working hard to this end. I am delighted to see some of them on the Government Front Bench. They are to be congratulated on their work.
  Leaseholds have to a very considerable extent been a Welsh problem and we should pay some tribute to the Western Mail and the Liverpool Daily Post for their very devoted efforts in agitating for reform.
  The Minister of State for Commonwealth Affairs (Mr. George Thomas): And the South Wales Echo.
  Mr. Davies: Yes. I thank my hon. Friend for that addition.
  It is most appropriate that my right hon. Friend the Secretary of State for Wales, who has been involved in the preparation of the Bill will wind up this debate.
  I want to go back to a speech made by David Lloyd George part of whose constituency I now have the honour to represent. He made it several years before he was elected to Parliament in 1890, while addressing the Caernarvon County Council. He was advocating leasehold enfranchisement then and urged its adoption on the grounds that it was not a question that affected one political party but the community at large.
  He said that Caernarvonshire is as badly affected as any part of Britain and he pointed out, to illustrate the urgency of the problem, that the whole of the town of Port Madoc was built on leases of only 60 years and that the majority of the houses had been built by workmen for themselves.
  "Yet as a result of the present iniquitous system all the fruits of their initiative and enterprise will fall into the lap of the ground landlords who have not spent one penny piece on the property. The whole system is nothing short of legalised robbery."
  That speech was made nearly 80 years ago but it could equally appropriately have been made in this House today, because that condition of legalised robbery has continued up till now.
  I do not want to go into details or examples, but when I intervened earlier, the hon. Member for Birmingham, Hall Green (Mr. Eyre) seemed to take objection to my mentioning that in some cases the land owners had in the first place acquired the land at no expense at all to

  1349
  themselves through Acts of Enclosure. I have one such example in my constituency, where almost half the whole town of Llandudno was built on such land. After an Act of Enclosure in 1843, 957 acres of common
  land were acquired by the freehold parishioners of the parishes of Eglwysrhos, Llandudno and Llangwstennin. What most of the parishioners did not recognise at the time was that the share of common land that they would get would he in proportion to the amount of land they owned within those parishes. As a result, the prime movers in the enclosure—and Lloyd Mostyn was Member of Parliament for Flint at that time—the Mostyn family, acquired 832 acres of the total 957 acres, since the Mostyns were the largest landowners.
  Mr. George Thomas: What was his party?
  Mr. Davies: They then had the problem of what to do with the land they had acquired. It was relatively valueless as it was then, a good deal of it being marsh ground. Eventually, of course, it became the land on which the town of Llandudno was built. This was the time of the development of seaside resorts. When the sale of the land first began in 1849, it was the intention initially that it should be sold outright, but the agent of the Mostyn family firmly advocated that the land should be disposed of leasehold and not freehold.
  The researches of a journalist and local historian of Llandudno, Ivor Wynne Jones, have failed to reveal that there was at that time any intention to benefit from acquiring property at the end of the period of lease. There was a down payment and a rental over 75 years and it seems that the estate at that time would have been content with this. However, the estate was managed by a succession of shrewd agents, and the terms on which further leases were granted were tightened up considerably. In some cases, for example, it was stipulated that if there were to be any alterations to property built on the land the plans for such alterations should be drawn up by the estate and payment made to the estate for them. It was also stipulated that fire insurance should be taken out only with an insurance company for which the estate was agent. The owners were getting it every way.
  1350
  The leases were initially for 75 years, as I have said, and then for 99 years and in some cases 999 years. Many have been expiring in recent years, and outrageous sums have been asked for the freehold, with the result that householders have had to negotiate extensions of lease on terms which were most unjust and unfavourable for them.
  There is an instance which should
  be mentioned and it will be well known to many hon. Members. It has nothing to specifically with domestic property, but it is an example which clearly shows the attitude of many landlords. There was a chapel, the English Baptist Chapel of Zion, in Llandudno built on leasehold land. The lease expired. The chapel trustees found it very easy—they were quite surprised—to renew their lease for a short period on apparently quite favourable terms. But, at the end of the short period of extension, there was no reprieve and they found that, by the short extension which they had accepted, they had disqualified themselves from certain protection which they would previously have had as trustees of a place of worship.
  That extension of lease expired on Christmas Day 1965. The members of the chapel were not allowed to enter to conduct their Christmas or New Year services in the chapel. They were locked out and within a few days the benches were being taken out of the chapel so that it could be converted into office property.
  That is the kind of thing which has been happening under the existing law based on the principle that when someone leases land for a period, at the end of the period he gets back not only the land but the property built on it as well. It is that principle which is attacked by the Bill, and that is why I welcome it. I welcome particularly that the Bill is retrospective to 8th December, 1964 the date on which it was first announced that a Bill would be introduced.
  I am a little unhappy about some of the exclusions. I am not very happy that the Bill's provisions are confined to domestic properties. If we accept the principle that, at the end of the period of lease, the landowner has a right only to the land and not to the property built on the land, I do not see why the principle

  1351
  should vary according to the kind of property built on the land. I very much hope that the Minister will look carefully into the question again.
  Like several of my hon. Friends, I am somewhat unhappy also about the rather arbitrary limits of £200 rateable value in the Provinces and £400 in London. If we accept the principle, I do not see why any limit should be set in that way. The same applies to flats. I take the point that there are difficulties in the case of flats and maisonettes which make it inconvenient to include these properties in the present Bill. This Bill is designed to tackle the most serious problem first, but it is important to bear in mind that the problem of flats and maisonettes will also have to be tackled. When the Government act on the Wilberforce Report on Positive Covenants, that will be an excellent opportunity for dealing with this other problem and I very much hope that this is done.
  The Bill is perfectly fair to ground landlords. At the end of the period of lease, they will have a return on the current value of the land, not its original value but its value now, a value which may have become inflated not by any action of theirs but by the growth which has taken place in the area and by what society has added to it. Their just claims are fully taken into account in the Bill.
  I remember having to speak on this issue several times during the last election campaign, and phrases which were used then, and which I attacked, were used again today by the right hon. Member for Altrincham and Sale (Mr. Barber) in his opening speech. It was said that the Conservative Party advocated reform based on the principle that people should be able to buy or rent their own houses for a fair price or at a fair rent. There is no such thing as a fair rent or a fair price for a house which is already one's own. That phrase is iniquitous, yet it is still used in the House, and hon. Members opposite unashamedly speak of a fair price or a fair rent for property which is already a man's own.
  I very much hope that the Opposition will not have the effrontery to divide on the Bill tonight. If they do, they will most certainly lose face in the country in a way in which they have seldom done on any issue before.
  7.47 p.m.
  Mr. Reginald Eyre (Birmingham, Hall Green): The hon. Member for Conway (Mr. Ednyfed Hudson Davies) made a strong case with his historical description of the acquisition of common land near Llandudno. Perhaps one may point out that the leaseholders who subsequently came to occupy those lands and conducted prosperous boarding houses there provided very happy holidays for hundreds of people from Birmingham, and they succeeded in making quite a decent profit out of providing that service.
  Almost everyone with a practical working knowledge of the leasehold system as operated in Birmingham and other areas about which we have heard favour a proper and responsible measure of enfranchisement. Here I should declare an interest as a solicitor and as a director of companies holding both leasehold and freehold properties.
  The argument most strongly advanced against leasehold enfranchisement is that based on sanctity of contract. I have a good deal of respect for the principle of sanctity of contract, but I feel that it can be applied and imposed in pure and undiluted form only where the parties to the contract have had a full and free choice as to the nature and extent of the contract into which they have entered. It must be recognised that no such free choice has been available to thousands of leasehold home owners in the Birmingham area and elsewhere because in many such districts the would-be owner-occupier has had no practical choice but to buy a leasehold house in order to provide a home for his family.
  That being the situation, we have to bear in mind the difficulties which have arisen in leasehold home ownership. Many of those difficulties have been mentioned in the debate today. The first is that leasehold homes begin to decline in value as the remaining period of lease falls below 60 years.
  Secondly, when the unexpired portion of the lease comes down under 40 years, leasehold houses become very difficult to mortgage and sales and transfers are hampered. In industrial areas that considerably hinders the widespread acceptance of another very important principle, namely, the encouragement of home ownership. A serious problem is developing in parts of Birmingham and

  1353
  other industrial cities. In districts such as Small Heath and Alum Rock in Birmingham, houses that are good for many years of life are being neglected because the leases have fallen below 30 years unexpired. Therefore, there are falling standards of housing which could be avoided.
  For all those reasons, I strongly favour reform. But in all cases the freeholder can and should be adequately and fairly compensated for the loss of his investment. It is precisely on that ground that I fall out with the terms of the Bill, because it cannot be right or honest to deprive a freeholder of his estate without proper compensation. I am compelled to deny the validity of the "bricks and mortar" argument of the Minister. It is a plausible theory, and it is certainly votewinning, but I am convinced that examined against the facts it is unjust.
  To try to establish that, I want to
  quote just one example from my own knowledge. Some years ago a relative of mine in Birmingham bought a fairly substantial leasehold dwelling house which had a
  lease of 28 years unexpired. The price was pretty low because of the difficulty of sale which I have mentioned. It was the equivalent of about one-quarter of the cost of building a similar property at that time. Now the lease of the property has been reduced to about 12 years and under the Minister's formula the leaseholder will be entitled to buy the freehold quite cheaply, with the result that the present value of the house will immediately be trebled. That is a considerable bonus to be immediately handed to the enfranchising leaseholder. The owner-occupier will make a considerable profit at the expense of the freeholder.
  Anxious as I am to see people fully owning their own houses, that principle is obviously not right or just. It cannot be right or equitable to use the power of the law in that way. With fag-end leases such as I have described, the Robin Hood bonus given to one citizen at the expense of another will be considerable.
  In any event, in thousands of cases where the leases are longer, and the immediate bonus will not be so great, it will be as though the Government had taken £50 or £60 out of one man's pocket and transferred it to the pocket of another. That doctrine may be popular with some who benefit this time, but the
  1354
  principle is ugly and could later be used to undermine the rights of small individuals everywhere.
  Looking ahead, I think that there are sound and practical reasons why the temptation of that aspect of the Bill should be resisted. Under the terms of the Bill, the Land Commission again rears its head. It is made clear that on the sale of the freehold the levy will be payable on the underlying development value of the site upon which the enfranchised house stands. Ministers and the population in general will be surprised by the number of transactions in which development value will exist and where the levy will be payable. The Minister has quoted 10 or sometimes 15 per cent. as the percentage of private house transactions that will be affected. But I think that he will find that the percentage where development value exists and levy will be chargeable is higher.
  The freehold will be acquired by the occupying leaseholder on the basis of nominal compensation, but the payment of the levy will be calculated on the basis of the full market value of development relative to the freehold reversion at that date. There is immediately a conflict. There is nominal compensation for the freeholder, but a market value calculation of some kind in respect of the Land Commission.
  Remembering the Land Commission's very wide powers of compulsory acquisition, we should insist on full compensation in all transactions where there is compulsory acquisition by the Land Commission or local authorities. If we think that that is right in principle in that kind of transaction, we should not accept a breach of the principle in this Bill. If we do not stick to principle, in time owner-occupiers may find themselves riding on a Land Commission tiger.
  Fair compensation should always be payable in all land transactions, and the Bill fails to measure up to that standard. I was very attracted by the argument of my hon. Friend the Member for Hornsey (Mr. Rossi) in his second alternative, when he suggested that the price paid to the freeholder should be related to the price paid and should be examined and made good against the historical fall in the value of money because that would

  1355
  be a way of calculating compensation which, it could not be denied, would be fair. It would avoid the almost theological dispute as to the way in which we are to calculate the value of freehold reversions.
  Despite what the hon. Member for Conway said, the present-day function of freeholders cannot be brushed aside. It is not a matter of just getting hold of marshland and making it available for development. One of the consequences of inadequate compensation to freeholders will be that no new housing development will be carried out on a leasehold basis. Therefore, new house prices are bound to increase in the Midlands by £200 or £300, or even more in certain circumstances. That consequence will be immediate, because no part of the land cost will be carried by the freeholder as in the past.
  The proposals for future management of comprehensively managed estates put forward by the Minister are imaginative, but I fear that they will be unworkable. In those circumstances, the problems of the good quality estates will be better met by the 50-year extension only.
  I hope that the Minister will seriously reconsider the limitation on the right to enfranchise. It seems an unnecessary restriction to limit it to £400 rateable value in London and £200 in the provinces. There will be some startling cases of hardship near the boundary of London where one house with a rateable value of £390 will be entitled to enfranchisement and just across the road another house with a rateable value of £210 will be deprived of the enfranchisement by that rather false ruling. False distinctions between neighbours should be avoided. I therefore hope that the Minister will wipe out that unjustifiable distinction and extend the Bill's operation without limitation by reference to rateable value.
  8.0 p.m.
  Mr. Julius Silverman (Birmingham, Aston): I am glad to follow the hon. Member for Birmingham, Hall Green (Mr. Eyre), because he began by outlining Birmingham's problem in franchise and leasehold reform. He recognises that there is a problem and in that respect I support his argument. In my
  1356
  constituency and in other parts of Birmingham there are many thousands of leasehold houses.
  The problem arises, as the hon. Gentleman said, over the "fag-end" of a lease. As the hon. Member for Hornsey (Mr. Rossi) said, there are two aspects. The first is when the lease comes to an end. The second is when it reaches the 30-year stage—the period remaining. There are a large number of houses like that in Birmingham. I agree that not many of the leases in Birmingham are coming to an end, as is the position in Wales, but a large number have a residue of about 30 years to run.
  The problem here is that such a house becomes unsaleable except at a very low figure. This is not because of the increased value of the reversion but because of the difficulty of getting a mortgage for such a limited period. The consequence is that the leaseholder finds himself in possession of a wasting asset which cannot be sold. That is not only bad for him but is bad for public policy as a whole, because, if houses are unsaleable, twin evils arise—we do not get the mobility of labour through the mobility of house occupiers and we tend to get a perpetuation of under-occupation because an owner often has to live in a house which is too large because there is no prospect of selling it.
  The Bill will remedy both these evils to a very large extent and on behalf of thousands of Birmingham leaseholders I welcome it. I cannot agree with the hon. Member for Birmingham, Hall Green on the issue of compensation. I believe that the compensation provided for in the Bill is fair. But what is fair compensation? One will never get complete agreement between a freeholder and a leaseholder. No doubt the freeholder who is unable to exact everything that he could exact in a market that is entirely in his favour will consider that he is being deprived of his rights. This is where we get the word "confiscation" being used in the Amendment. But it is nothing of the sort.
  Let us take the case mentioned by the hon. Member for Birmingham, Hall Green—that of a property bought at about one-quarter of its value. It means also that it was sold at one-quarter of its value. Why? It was not because the reversion was worth three-quarters of the

  1357
  value. The cause of the difficulty lay in getting a mortgage. The fact that the owner-occupier—the leaseholder—gets a windfall does not necessarily mean, however, that the landlord is being deprived of a similar amount of money or that he is being treated unjustly. Under the present system, when the 30-year period is reached, the leaseholder sees his asset wasting but it does not necessarily follow that the landowner's asset is appreciating to the same extent.
  Mr. Eyre: The point I was trying to make was really in reply to the Minister of State's assertion that one should look historically at the course of the lease. One of the consequences of that is that the leaseholder—the purchaser—did get a bargain. This should be borne in mind in determining what is fair compensation at the end of the lease.
  Mr. Silverman: I do not think the same applies to the historical argument. My right hon. Friend was dealing with long leases, such as those in South Wales, which are now expiring. There, one goes back to the history of how the property was built, the circumstances of the time, how it has probably been in the same family for generations, and so on. I do not think that one can always apply an historical basis to this subject. Therefore, we have to determine what is a fair value, and I believe that the basis for leasehold properties as set out by the Bill is fair. Bearing in mind that we do not wish a leaseholder to be deprived of his right to obtain a saleable property, the price is fair, assuming that both parties should be in an equal position to negotiate—which, unfortunately, they are not.
  Certainly, as far as Birmingham leasehold properties are concerned, there is no element of confiscation here in the real sense, except, of course, always that the person who does not get his pound of flesh out of the market probably does not think that he is getting fair compensation. But I do not accept that. On the other hand, it can be a windfall to the tenant. But what about that? Not only is it a windfall to the tenant but I am sure that it is in the interests of public policy. It will benefit thousands of my constituents and many others in Birmingham and I therefore welcome the Bill and hope that the basis of compensation set out will be maintained.
  8.7 p.m.
  Mr. Harold Gurden (Birmingham, Selly Oak): It is appropriate that a number of Welsh and Birmingham hon. Members should be taking part in the debate. A very large number of properties in Birmingham are under leasehold, just as many properties in Wales are.
  I am pleased that the Government have introduced this Bill. I had a fear at one stage that it might go the way of many other promises by the Labour Party, but I congratulate the Government on bringing in the Bill. I am delighted that it is here, although I disagree with some of the provisions. We have now reached the stage in this long-drawn-out argument over so many years that those of us who want to see this reform will accept almost anything in the form of a Bill in this direction.
  Nevertheless, it is a fair criticism that the Bill is not right in many respects and ought to be adjusted in Standing Committee. The opponents of the Bill are worried by the breach of the sanctity of contract and the confiscatory provisions, as they have called them. Certainly, to some extent, these things worry me but I agree with those who have said that we cannot have this reform without some injustice. That is a fair view. It has been said from both sides. Nevertheless, it is worrying when one sees so much legislation being introduced which breaches fair contracts which have been made between people.
  I certainly would not vote against the Bill, although I hope that some of these provisions will be put right. I would not vote against it because, ever since I came here, I have pledged my constituents that I would support leasehold reform, and I was glad to take part in discussions that led to my party giving the same pledge. I would also not vote against the Bill because, clearly, the Conservative Party is pledged to encourage home ownership and there certainly could not be proper home ownership without leasehold reform. Home ownership must mean freehold. How else in places like Wales and Birmingham could a person be a home owner unless such a Bill is brought in? It is unfortunate that there is a predominance of leasehold property in certain areas, particularly Birmingham.
  If there were the opportunity for people to choose between freehold or leasehold,

  1359
  then the case for the Bill would be weakened. There is nothing wrong with the right to let, either weekly, monthly or yearly tenancies or by agreements for 99 years. What is wrong is that the would-be home owner has had no option but to take leaseholds in certain areas. What is questionable is the Socialist Party's intention to provide the opportunity for true freehold home ownership for all. The Birmingham City Council have followed this principle of giving everyone the opportunity, including municipal tenants, to become home owners in the real sense. At present the Socialist Party on Birmingham City Council are opposed to this and are trying to stop it.
  Mr. Julius Silverman: The hon. Gentleman surely knows that the case of the Socialist Party on the City Council is that these sales will prejudice the position of people on the housing register and that the homeless "Cathy's" and others will have to wait for a much longer period for houses on the register if these houses are sold.
  Mr. Gurden: The hon. Gentleman always puts up this case, but I do not accept it and the argument goes on. What is quite clear, and what he has not refuted is the fact that these people are prevented from becoming home owners in Birmingham, and I understand that this has the support of Socialist Members of Parliament. This cuts right across what has been said today, that the Socialist Party are trying to help people to become real home owners. I do not accept that this is what they want.
  What causes this trouble about leasehold versus freehold is the shortage of houses. Here we shall have to recognise, sooner or later, that the shortage of houses is mainly caused by control. So long as we perpetuate the amount of controls that we have, and certainly rent control, we shall have this shortage. One does not have to show in detail how this works out, because one can see how controls of any sort affect supply and demand.
  I want to turn to a Clause of the Bill which I think is very wrong. Several Members on both sides of the House have objected to this £200 and £400 limit on the rateable value. If I thought that the
  1360
  Government would adjust this I would be very happy, and even consider voting for the Bill, because this is a very serious point. This and another provision are extremely important. I cannot believe that the Government will give way on this. They have specifically put into this Bill this arbitrary figure bearing no relationship to the principle.
  The Minister of State, Welsh Office (Mrs. Eirene White): Perhaps the hon. Gentleman heard my right hon. Friend say that this was a matter which perhaps deserved further consideration?
  Mr. Gurden: I am very pleased that the Minister has intervened, because those of us who watch the progress of Standing Committees must recognise that the Government do not give way. They make all sorts of pleasant noises, but when it comes to the crunch, they will not give way. Out comes the Whip to get the hounds into the pen.
  Mr. Barber: The hon. Lady has made a very important statement which will affect the value of much property in this country. I should like to be absolutely clear. Is she saying that the Government are seriously considering extending the limits beyond £200 and £400? This is very important.
  Mrs. White: My right hon. Friend said at an earlier stage of the debate that this was a matter which should be further examined. He gave no commitments. I want that to be clear.
  Mr. Gurden: This is a purely political move. This Clause is inserted purely to suit the Socialist Party, the idea being that there must be more people living in houses which have a rateable value of £200 who would be more likely to vote for the Socialists. There cannot be any other intention, however one looks at this. There is no other logical explanation. I am sorry that the Government have put this in and it is one of the main reasons why I will not vote for the Bill tonight.
  I want to deal with provision for the maintenance of a decent estate. How can covenants be properly enforced? Within my constituency, leaseholders have been allowed to buy the freehold, some of them many years ago. We see the difficulty, almost weekly, of people trying to enforce these covenants against their

  1361
  neighbours. It is practically impossible and often means expensive litigation, for which people are not prepared to pay. I see no provision in the Bill for the protection of an estate and its amenities.
  I have only to give the example of the Bournville Estate to gain agreement on both sides of the House. Supposing that people in Bournville were allowed to buy their freeholds. We should soon see the beginning of the end, and the beginning of a slum area. There is a provision for the Minister to determine whether a wellmaintained estate may remain on a leasehold basis, but this does not go far enough.
  There are many very small areas with probably a dozen or two houses or just a few streets, which need to be protected or else they would begin to be slums. This is another reason why I cannot vote for the Bill tonight, but I would certainly not vote against the Bill giving us leasehold reform. It is very desirable in Birmingham and I know that many of my hon. and right hon. Friends feel the same way.
  8.20 p.m.
  Mr. David Weitzman (Stoke Newington and Hackney, North): For many years leasehold reform has been an important plank in the Labour Party's electoral programme. In his statement on 8th December, 1964, the Leader of the House, then Minister of Housing and Local Government, announced the Government's intention to introduce legislation and, in particular, promised to protect leaseholders whose lease expired after 8th December that year. That promise is, I am glad to say, redeemed in the Bill.
  The need for reform has been recognised for many years. In opening the discussion on 28th February, 1966, on the White Paper, which was the prelude to the Bill, the Minister reviewed the position over the years and he quoted from the supplementary Report of Cardinal Manning as long ago as 1884. It may he important to remember the words which were quoted:
  "…legislation favourable to the acquisition on equitable terms of the freehold interest on the part of the leaseholder would conduce greatly to the improvement of the dwellings of the people of this country."—[OFFICIAL REPORT, 28th February, 1966; Vol. 725, c. 904.]
  I am sorry that my hon. Friend the Member for Birmingham, Small Heath
  1362
  (Mr. Denis Howell) has departed, because on 7th December, 1962, he introduced a Bill for leasehold reform and the then Conservative Government through the right hon. Member for Leeds, North-East (Sir K. Joseph), who was then Minister of Housing and Local Government, opposed it on the ground that there was sufficient portection for leaseholders on the expiration of their leases in the Landlord and Tenant Act, 1954. It is true that the right hon. Gentleman went on to say that compulsory enfranchisement could be considered only on the basis of market value and—I ask the House to note these words—only when the landlord did not want to develop.
  We discussed the White Paper on 28th February, 1966, when the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), who spoke today as a back bench Member, reiterated that policy. Today the right hon. Member for Altrincham and Sale (Mr. Barber) said that the Government's White Paper had been put forward before an election. I remind him that his party did not have the guts to go into the Lobby and vote against the White Paper, which was the prelude to the Bill. Was that because it was afraid that the electors might know what its attitude was?
  That there is a necessity for some measure of reform is clearly beyond doubt. Even the hon. Member for Hornsey (Mr. Rossi) and other hon. Members on the side opposite have agreed with that. The debate has been monopolised by voices from Wales and Birmingham. The voice of London should also be heard, because the problem in London is acute. I know that the hon. Member for Hornsey put his side of the case.
  Mr. Rossi: I am a London Member who has spoken.
  Mr. Weitzman: I recognise that the hon. Gentleman represents a London constituency. With respect, I represent a much more important part of London.
  Mr. Rossi: Oh, yes?
  Mr. Weitzman: In the area of Finsbury Park, which is very close to the hon. Member's constituency, there are many hundreds of houses, whose occupants hold the remainder of a 99-year lease, in which exactly the conditions described

  1363
  by the Minister exist. Houses have been built, maintained and improved by the lessee, and all the ground landlord has has done is to receive regularly his ground rent, and, but for legislation, he would be entitled at the end of the lease to turn out the lessee and his family of what is rightly regarded as the family home and to take possession.
  It is manifestly unjust—and I do not think that anybody could disagree with this statement—that a landlord should be entitled, at the end of a lease, to assume possession, free of charge, of all the buildings and improvements created wholly by and at the cost of a succession of lessees irrespective of the value of those buildings and improvements. Obviously that was the state of affairs which provided a strong incentive to people to neglect the maintenance of the property, particularly over the last few years, and must inevitably lead to the creation of slum property.
  Many attempts were made to remedy that situation. It is interesting to recall that in one of the debates on a Bill for leasehold enfranchisement it was argued by its supporters that enfranchisement would give small proprietors an interest in maintaining and improving their holdings, would encourage in them a sense of domestic and civic responsibility and—mark these words—would remove a powerful stimulus to Socialism and conditions likely to bring about revolution.
  Perhaps that commends itself to right hon. and hon. Members opposite in support of the Bill. For the Conservative Party, the objection then was—and I hope that the right hon. Member for Altrincham and Sale will listen to this—that it was wrong in principle to interfere with the free exercise and development of capital and property. Even the Conservative Party has moved a long way from the enunciation of that principle. It recognised the obvious injustice and sought to allay it by the provisions of Part I of the 1954 Act.
  But clearly that was no solution to the problem. When the right hon. Member for Kingston-upon-Thames was speaking, I made an intervention. He was talking about cases in which people obtained leases, together with buildings, and paid something for them. It was suggested that there was injustice. He said that this
  1364
  was wrong and that there was an element of confiscation in what we were doing. If what we are doing is wrong, what the Conservative Party did in 1954 was wrong on the same principle because in recognition of the injustice it attempted to allay it by the provisions of the 1954 Act.
  My right hon. Friend the Minister has referred to what has happened to the value of properties and how their value has been reduced. The point is that there was no general security of tenure under the 1954 Act. The lessee who previously paid a small ground rent—£5 a year or a nominal sum—was called upon to pay for his own house, which he had maintained and improved, a market rent which often he could not afford to pay. He still remained liable for dilapidations. Even the Opposition now recognise that that is not good enough and they have moved from that position.
  My hon. Friend the Member for Leicester, North-West (Sir B. Janner) said something about the attitude of the Tories being the same as it always was. It is not. Even the Tories changed—[An HON. MEMBER: "Not much."]—from their declaration by the passing of the 1954 Act that it was a question of the protection of capital and property. Now, they recognise that the 1954 Act is not sufficient.
  The view of the Tories was expressed by the right hon. Member for Kingston-upon-Thames when he gave their policy on 28th February a year ago. This represents the advance which the Tories have made. The right hon. Gentleman said:
  "We therefore think it right to build on these past policies of ours, and to go further."
  That shows movement.
  "We think that the ground leaseholders occupying residential property towards the end of his lease, where the landlord has no definite plans to redevelop or to occupy himself, should be given the option either of a lease at a rent fixed by the courts or to buy the property at a fair market price."—[OFFICIAL REPORT, 28th February, 1966; Vol. 725, c. 926.]
  That shows how the Opposition have advanced. They do not now attempt to set out the long-exploded argument about the sanctity of contract. That has clearly gone. It has gone in the legislation of the Rent Act and of the Moneylenders Act, which show that sanctity of contract is not a basis which can be put forward. The

  1365
  public good must override it. Nor do the Tories now put forward the last-ditch argument about sacred rights of capital and property. That has gone.
  The Opposition agree that there should be a right to a lease or a right to enfranchisement. It is true that they would make it subject to the landlord having no definite plans to redevelop or to occupy the property himself. The Bill gives the landlord the right to resist a claim for enfranchisement or extension of lease on the ground that the house is for his own occupation and that he would suffer greater hardship if he did not have it. There are provisions in the Bill which preserve the benefits of comprehensive estate management.
  What, therefore, is the objection by the Opposition on which they will divide against the Bill? It presumably relates to the terms of compensation. The Opposition say that enfranchisement should be at a fair market price. We agree. Certainly, it should be at a fair market price, but a fair market price for what? There have been many attempts to find a reasonable basis for the purchase of the freehold. I think that the Government have chosen a very good one.
  As my right hon. Friend the Minister has said, clearly, in the way that leasehold property has developed, the land belongs in equity to the land owner and the house belongs to the occupying leaseholder, who has built the house and maintained and improved it. The landlord is entitled to a fair market price, but he is entitled to that fair market price for the land and for nothing more.
  Similarly, if a lease is granted for 50 years, the landlord is entitled to a fair market ground rent for the land, disregarding the building upon it. It follows, therefore, that if a landlord defeats a claim for enfranchisement, he should pay compensation to the tenant by way of a fair market price for the building upon it. This is a simple, logical and fair way of doing it.
  For the right hon. Member for Altrincham and Sale to sit there and grin about this and, after one has thought about the history of the Tory Party and the way that they have gone from stage to stage driven by the logic of events to give in, to talk now about confiscation is about the most ridiculous thing I have ever known.
  Mr. Barber: The reason why I was laughing was because at that very moment I was reading the headlines from The Times,
  "This is bluntly confiscation",
  and from the Financial Times,
  "However much the Government dislikes private landlords, it cannot pretend that it is just to confiscate their property."
  [HON. MEMBERS: "Speech."] Be quiet. Stop yapping. This is not only my view. It is also the view of many people who try to look at the matter objectively.
  Mr. Weitzman: The right hon. Gentleman is in very good company, having a couple of papers which support him. I could give a number which do not support him.
  Mr. Barber: Name one.
  Mr. Weitzman: I could name a good many. Let not the right hon. Gentleman read out from newspapers paragraphs or headings. Let him face the logic of the matter. After all, he has been a prominent member of the Tory Party for many years, during which time I have had the pleasure of seeing him across the Floor of the House putting forward views with which I strongly disagree. He is a nice, reasonable, cheerful individual, but he must look at the position logically. To say that this is confiscation is ridiculous.
  I have pointed out the logic of the matter and the way in which the Tory Party has moved step by step to a recognition of the fact that the injustices which the 1954 Act attempted to cure have not been removed. It has not allayed the position at all. Instead, it has made it worse. They themselves have recognised it and moved further from it.
  As I understand it, they agree that there should be leasehold enfranchisement or the grant of a new lease. I agree entirely that it should be on the terms of a fair market price, but a fair market price for the land to the landlord in the case of enfranchisement, and a fair market ground rent to a lessee on the grant of a lease. Viewed from that standpoint, it is quite unanswerable.
  There are two further points which I want to refer to shortly. As I read the Bill, if a leaseholder opts for a lease of 50 years, he has no right thereafter to

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  claim enfranchisement. I do not understand that. I do not see why he should not have a claim thereafter.
  Secondly, I note that, in accordance with their promise, the Government have given the right of enfranchisement in the case of a lease expiring after 8th December, 1964, where the lessee has remained in possession. I know that there must be some limit, but there are many leaseholders with leases which expired before that date who became statutory tenants under the 1954 Act. They have suffered an injustice, and I hope that perhaps in Committee further consideration will be given to their position.
  I welcome the opportunity which the Government have taken in the Bill to close the gap where, by creating a tenancy of 22 years at a rack rent, a landlord was able to escape the provisions of the 1965 Rent Act. I am particularly pleased about that, because such tenancies were created in my constituency, and I was able to bring them to the attention of the Minister. I am glad that that position has been rectified.
  I welcome the Bill and I hope that it will have a speedy passage on to the Statute Book.
  8.37 p.m.
  Mr. Martin Maddan (Hove): It may be welcome to hon. Members if I strike out over rather different territory and in a different direction from that followed by other right hon. and hon. Gentlemen who have spoken. However, before I do that, I should like to address a few comments to the major proposition in the Bill as a whole.
  Perhaps I might start by saying that I am a leaseholder in London, and I find that considerable benefits arise from being a leaseholder in that the landlord who manages the estate requires every leaseholder to maintain very good standards. I recommended my hon. Friend the Member for Birmingham, Selly Oak (Mr. Gurden) to become a neighbour of mine—I told him I would refer to this—and I might not have done that had I known that he would be able to buy his own freehold and no longer be required to observe the regulations imposed by the landlord.
  The fact is that there are well-managed estates where the leasehold system im-
  1368
  proves the quality and standard of the property. There are also badly managed estates where the leasehold system causes them to deteriorate and become slums. One of the problems which the right hon. Gentleman has had to face in drafting the Bill—and it is a problem which he has not solved—is how to differentiate effectively between different types of estate, though I appreciate that he has made an effort under Clause 19.
  I now pass on to the new terrain which I promised, and I should like right hon. and hon. Members to consider a landlord who has always adhered to and perhaps pioneered the principle that the land belongs to the landlord and the bricks and mortar belong to the lessee. In cases of estates of that character, this Bill is really completely irrelevant, because they have always worked on the basis which the right hon. Gentleman says he now wants to impose on other leasehold estates.
  Mr. Willey: In the case of Letchworth, which I believe the hon. Gentleman may have in mind, he ought not to use the word "always". It was necessary to intervene by legislation.
  Mr. Maddan: The right hon. Gentleman is quite right that it was necessary to intervene by legislation in the case of Letchworth, but that legislation was timely and the principle was maintained, and has been maintained, since the inception of that garden city in 1903. It is not right that, without discrimination, all leasehold estates should be covered by the terms of the Bill.
  The right hon. Gentleman mentioned Letchworth and, looking around the House, I see many hon. Members who were not here in 1962 when we dealt with the legislation to which he referred. I was at that time the hon. Member for Hitchin. I propose to read from the Letchworth Garden City Corporation Act, a handsomely bound volume which was presented to me by the Letchworth Urban District Council. In the purposes of the statutory Corporation which now manages
  the Letchworth estate, there is enshrined, in Section 11, the principles on which this estate has always been managed. It says that it is to be managed
  "as an entity in accordance with the principles upon which the Letchworth Garden City was founded and has been managed until the end

  1369
  of the year nineteen hundred and sixty and, in particular, in the extension or renewal of ground leases, shall have regard only to the increased value of the land clear of the buildings (if any) situated on the land and of any improvements to the surface made by the lessee."
  That is a little better than the principle of the right hon. Gentleman, because it includes improvements to the surface of the land which, as someone said, should be taken into account. Therefore in such cases it seems inappropriate for the provisions of the present Bill to apply.
  The founders of Letchworth Garden City
  were inspired by Ebenezer Howard who wrote a book called "Garden Cities of Tomorrow", which was published about 1894. What he wanted to do was to deal with some of the problems which hon. Members on both sides of the House at that time saw arising from abuses of the leasehold system, and his venture, which saw the light of day when a company was incorporated in 1903, was supported by many distinguished members of the Tory Party such as the then Lord Salisbury and A. J. Balfour, and Neville and the then Lord Leverhulme. At the heart of the whole intent was the principle that as the value of the ground—not the houses, but the ground, because that was what the company was interested in—increased as it developed, the increase in the value of the ground should go to the community as a whole for its benefit and not to individual lessees and not to a commercial company operating as a commercial landlord.
  Section 32 of the Act provides that
  "any balance may in whole or in part be devoted to the provision of traffic facilities, lighting, drainage, markets, libraries, baths, or otherwise "—
  and this is a nice turn of phrase—
  "for the embellishment of the undertaking of the Corporation, the provision of means of education, recreation or amusement for the people or for any other purpose which the Corporation may deem to be a requisite public service."
  In those circumstances, whereas the hon. and learned Member for Stoke Newington and Hackney, North (Mr. Weitzman) described how, as he saw it, the Tory Party had progressed up to a certain point, I am inviting him and his hon. Friends and his right hon. Friend to progress with me a little further. I hope that in Committee the right hon.
  1370
  Gentleman will find it possible—I know that there are difficulties, but I know that they can be got round—to maintain this more advanced position which is enshrined in the Statute from which I have been quoting, and which provides an example of the sort of estates about which I am talking.
  The right hon. Gentleman mentioned Letchworth, and I think that it is a good example with which to continue. The effects of the Bill on the Corporation, which was set up by Statute to give effect to those principles, will be very deleterious, for several reasons. For example, when compensation was awarded by the Land Tribunal to the former commercial undertaking to which the right hon. Gentleman referred—and this compensation had to be paid by the Corporation, and was backed by the ratepayers of Letchworth—the Lands Tribunal took into account the fact that when the leases of houses with large gardens fell in the land might be redeveloped by the Corporation at rather higher densities, and therefore in the amount of money which the Letchworth Corporation had to pay to the old private company there was the assumption that in due course the Corporation would benefit from this redevelopment. Under the Bill, if nothing is done about it, that chance of reaping further revenue will be removed, and yet the Corporation will have the obligation to service with interest the money which it has had to borrow to pay the compensation to the old Garden City Company. This is the first bad effect which the Bill will have on Letchworth.
  Secondly, there is the question of the extension of leases. At the moment many people who have leases of perhaps 40 or 50 years to run ask the Corporation for an extension and this is readily granted and, in computing the amount of ground rent for the remaining period, an average is taken of the existing ground rent and the ground rent for the future and it is this which becomes the ground rent throughout the period. This has the effect of bringing forward money into the Corporation's coffers at a time when the Corporation needs it. Under the provisions of the Bill people will no longer seek to extend their leases. They will wait until just before the last year of the lease and then decide what to do, and

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  therefore that source of increased revenue to the Corporation is likely to dry up.
  Another factor which will be hard on Letchworth arises from Clause 28(6) which is concerned with short-term development. If this provision is implemented the amount of compensation paid to individual householders, if there is a town centre redevelopment, will be considerably in excess of what would be paid to people under existing leases.
  The Corporation has been in the habit of managing its leases so as to have similar termination dates for whole areas, as a matter of policy and good estate management, with a view to suitable redevelopment. Nothing in the Bill could possibly apply to give the Letchworth Corporation the opportunity to control future development as has been its practice in the past.
  I think that I have shown that there will be many harmful effects, arising from the fact that Letchworth is already in a more advanced position than that which the right hon. Gentleman visualises arriving at by the Bill. It is worth adding that the residents of the town will individually suffer from the break-up of a unified estate.
  I have already mentioned that in my view a good, well-run estate can benefit all residents. This has been the case with Letchworth. It is much better that a central body should decide what areas should be redeveloped at higher densities rather than that it should be done higgledy-piggledy and piecemeal by various people who acquire freeholds and decide, perhaps, to build bungalows in their gardens. The town will also suffer financially, because surplus funds of the Corporation were to be devoted to the benefit of the community as a whole.
  If, under the provisions of Clause 19, Letchworth were to be regarded as a comprehensively-managed estate, a problem would still arise. As my hon. Friend the Member for Selly Oak said, the incentive to landlords to apply the provisions of this Clause will be very small when they no longer have an interest in the full reversion at the end of their leaseholds. My hon. Friend described how, if anything were to be done in respect of Birmingham, it would be by litigation between neighbours which is unlikely to be under-
  1372
  taken. Therefore, the whole concept of a unified estate goes.
  Some people may object and say, "There is a town all in one leasehold ownership, and people should have a right to buy their freeholds." That is an attractive proposition, but it so happens that Letchworth is contiguous to two other towns—Hitchin and Baldock—so it has no monopoly position. It is worth recalling how, before the Letchworth Act was promoted, the town voted in a statutory town poll. There were 3,183 for the present system and 903 against, which is more than three to one. It is clear that the residents as a whole are strongly in favour of the present system.
  When the provisions of the Bill reach the Statute Book, if they are in anything like their present form, Letchworth Garden City Corporation will find itself with a jumble of leases interspersed with residential freeholds. It will have industrial and commercial freeholds and the freehold of flats and maisonettes. There will also be some private houses, but the whole concept of a community, enshrined in the Statute from which I have quoted, will be broken. All the ratepayers of the town will be the losers, unless something is done to prevent it.
  I want to refer to some statements which have been made, which I hope will help to convince the Minister that the problem of this type of estate must be dealt with. The Letchworth Garden Corporation Act had all-party support, not only in Letchworth but also in Parliament. The hon. Member for Hitchin (Mrs. Shirley Williams), whom I am glad to see present, as I said I would be referring to this matter, wrote in a letter which appeared on Friday 25th September, 1964, in the Hertfordshire Express:
  "The Labour Party, which strongly supported the Letchworth Act, recognises the unique nature of the town and will preserve it."
  That was a statement about the Labour Party, so I am certain that the right hon. Gentleman will do everything possible and will not be too put off by procedural difficulties, which I know we can deal with, to preserve the position which I have mentioned.
  The right hon. Member for Fulham (Mr. M. Stewart), who was then the

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  Opposition spokesman for these matters, referred in the Second Reading debate on the Letchworth Bill to
  "…the original principles, which I believe commend themselves to everybody in the House…"—OFFICIAL REPORT, 20th March. 1962; Vol. 656, c. 334.]
  I trust, therefore, that, if I am selected —as I hope I shall be—for the Committee on the Bill and move Amendments to this effect, they will not only receive sympathetic consideration but will be positively welcomed.
  8.56 p.m.
  Mr. Evan Luard (Oxford): I will be brief, as I do not want to enter into the great debate on the purposes and principles of the Bill, which have already been more than adequately defended by the Minister and other hon. Members on this side of the House. I want to raise mainly two detailed points of particular interest to my constituency. The first has been mentioned several times already—the limitation on the rateable value of those properties which will qualify for enfranchisement.
  I can see no rhyme or reason for the distinction between these properties above rateable values of £400 in London and £200 in the provinces and those below. The simple point surely is that if it is right and just that certain leaseholders should be able to buy up their freeholds under the Bill, it is right and just that others should also be able to do so. Otherwise this will justifiably be regarded as a case of one law for the rich and another for the poor, or perhaps, more accurately in the present case, one law for the poor and another for the rich.
  I am glad to see the Minister present, as I have had some correspondence with him on this point. Although he has put the argument in favour of this distinction most persuasively and informatively, I am afraid I have not been convinced. He basically used two arguments. The first was that the Bill simply incorporates the provisions of the Rent Act of 1965. This is not an argument at all. I can see no reason why the considerations which made a limitation necessary in that Act are relevant to this Bill on a totally different subject.
  His second argument was simply that he is intervening to break a legal contract and that he can feel justified in doing so only if there is a strong ground
  1374
  in equity. But surely the grounds in equity are precisely the same for a leaseholder of a larger property as for a leaseholder of a smaller one. If both bought the building on the property over the years by payment of rent, this would be true in both cases. I seriously ask him to reconsider this whole provision, as he will otherwise leave many householders feeling themselves deprived of the right which has been granted to others.
  This matter affects my constituency considerably because a large proportion of the property in the area is above the rateable value of £200 laid down in the Bill. Various estimates of the number of such properties have been made, the lowest being well over 200 out of probably 1,000 or more. This means that more than 20 per cent. of the properties will be adversely affected. Another estimate suggests that about 600 houses will be affected. Certainly the occupants of many properties in my constituency will feel a sense of injustice because of the £200 limit.
  The next point is the distinction made in the Bill between London and the provinces in this matter of rateable values. It may be true that the average rateable value in London is twice that of certain other parts of the country, but it is not true of Oxford. As has been pointed out, the same can be said of Cambridge and a number of other constituencies where average rateable values are high. In parts of Oxford rateable values are higher than in parts of London and this emphasises the injustice of this provision.
  One of the most unjust aspects is that the provision penalises precisely those leaseholders who have done the most by adequate care and attention to maintain the value of their property. They would have raised the rateable value of their property thereby and they are now to be penalised and deprived of their right of enfranchisement.
  Mr. S. C. Silkin: Is my hon. Friend aware of a case in my constituency, where, by extending his garage, an occupier's property is above the £400 limit, he having made this improvement at his own expense?
  Mr. Luard: That shows how unjust this provision can be in certain cases. Injustice

  1375
  will also be felt by people living just outside the borders of London whose property has a rateable value which puts them outside the benefit of the Bill, although they would benefit if they were in London.
  The second point I wish to raise concerns Clause 28, which also affects most of my constituents in Oxford. That Clause is the provision by which public authorities will be exempted from the Bill, if they obtain a certificate from the Minister to the effect that the property is required for development. Subsection 5 states:
  "This section applies …to any university body, that is to say, any university, university college or college of a university…"
  In Oxford, by far the greater part, probably nine-tenths, of the leasehold property in the City is owned by the College and would come within that provision. Thus, it would be possible for that property to be exempted if it could be proved to the Minister that it was needed for "development" purposes.
  I have raised this matter privately with the Minister and he has assured me that the provision applies only in respect of property required for the normal purposes
  of a particular institution or authority; that is, education in the case of colleges or universities. It is important that this should be made clear in the Bill because, as at present drafted, the provision is ambiguous—it might refer simply to development in the sense of property development by the authority concerned, and while my right hon. Friend may say that he personally would apply this to mean only for the purposes of education, in the years to come he will be succeeded by other Ministers who may give the provision a completely different interpretation. It is, therefore, of the utmost importance that this matter should be cleared up and made completely incontrovertible in the wording of the Bill.
  At the very least, even if he is not ready to amend the Bill, I hope that he will make an explicit statement, either this evening, or in Committee, or subsequently, in order to make clear that the word "development" as it is used in the Clause refers only to development for the purposes of the particular authority concerned and specified in the Clause.
  1376
  We have heard argument from the benches opposite about confiscation being implicit in the Bill. I would like to have been able to take up this point which has not been sufficiently emphasised in this debate. This legislation is not perfect, it will cause certain injustices in certain cases. But it is not realistic to talk of confiscation. This seems to be based on the assumption that properties are to be given away from the existing freeholders to the leaseholders. The provisions of this Measure do not make that possible in any shape or form.
  That argument totally ignores the very large appreciation in the land value of properties that has taken place over the 99 years, or whatever period it may be, that the leaseholders have been in occupation. In very many cases this appreciation is something that leaseholders have very much to bear in mind. They will not get these properties for a song. This is true in my constituency and in many others, because most are situated in large urban areas where great appreciation has taken place. In most cases the leaseholder will have to pay a considerable price to acquire the property, and that implements the fairest kind of principle—probably the fairest, though not perfect—that could be applied in the circumstances.
  For these reasons I accept that this is a good Bill. But it could be much better still if the Minister would make the various changes I have suggested.
  9.7 p.m.
  Mr. Graham Page (Crosby): The Minister declared an interest when he said that he had a 999-year lease, but added that this was so remote that he probably was not affected by the Bill at all. I am not so sure. This Minister, whose office is dead, but he will not lie down, keeps popping up on the Government side with Bills that are far from welcome either to Members of the House or members of the public outside. We welcome him, but not the Bills he brings. Perhaps the understatement of the week was made by the hon. Member for Oxford (Mr. Luard) just now when he said that this Bill is not perfect. It certainly is not; there are many respects in which it is far from perfect.
  As the right hon. Gentleman declared his interest, may I, too, in accordance

  1377
  with the traditions of the House, declare my interest in the subject matter of the Bill. I am a member of the committee of a housing association, a director of a building society and of a trust property company which owns no long leasehold houses, and in each I have no more than the necessary qualification shares for directorship. Perhaps, having regard to what my hon. Friend the Member for Birmingham, Hall Green (Mr. Eyre) said, I should also declare my interest as a solicitor. We solicitors are reputed to make a lot of money out of the right hon. Gentleman's Bills when they become Acts. I can assure him that all we get are a lot of headaches. I should also perhaps declare an interest, having regard to what the hon. Member for Cambridge (Mr. Robert Davies) said, in that I am a governor of St. Thomas's Hospital.
  I want first to make as sharp and clear as I can the dividing line between Government and Opposition. It is not now whether or not there should be leasehold enfranchisement; it is upon what terms there shall be leasehold enfranchisement.
  We on this side believe in home ownership, but even in priority to that we believe in the home, that is to say, that no man shall be arbitrarily evicted from the house which he has made his home. In applying that principle, the Conservative Government in 1954 gave the occupying ground tenant at the end of a ground lease a controlled tenancy. I do not object now that such a tenant will become a regulated tenant under this Bill, if he takes no steps for enfranchisement. I think that that is probably the right course to take now. In effect, it is to give, as we did in 1954, a right of residence for an indefinite period. It is no great step to proceed, from that recognition of the right to a home, to the alternative—the right to home ownership, a right to buy out the ground landlord, to buy the right to live rent free and own one's home.
  That is the sort of leasehold enfranchisement which we recognise on this side of the House, and on that basis we have tried to think out the correct scheme to give those rights to the ground tenant. My right hon. Friend the Member for Altrincham and Sale (Mr. Barber) spelt out the Conservative policy. He said
  1378
  that, first, we recognise the desire and the ability of people to own their own homes. In following up that recognition, we say that the person who has made the long leasehould house his home shall have a right to choose in what capacity he remains there, whether as a regulated tenant at a fair market rent settled by rent officer or rent assessment committee, as a ground tenant at a modern ground rent, or as a freeholder. Those are the choices which we would give the ground tenant at the end of the ground lease.
  The first, to remain as a tenant at a rack rent, contains an element of compensation in the fair market rent itself. If the tenant chooses the second or the third, to continue as a ground tenant or to become the freeholder, he deprives the present freeholder of an existing right to possession of the house at the end of the lease, and he should pay for what he takes or for what he is given by Statute.
  Briefly, the proposal would be compulsory acquisition of existing rights at their existing value. The conditions of this would be that the right should not be exercised against a genuine need for development. It should not be exercised against a genuine need of the freeholder to use the house as his own residence or that of a member of his family if it would be a greater hardship for him to be kept out of possession than for the tenant to be turned out. The right should be exercisable only during the last few years of the lease and, as in the present Bill, by a person who has been in residence for a substantial period.
  There are other corollaries, such as that the tenant should be credited with the cost of improvements and, as my hon. Friend the Member for Hornsey (Mr. Rossi) said, should not be penalised by dilapidation claims. There must be adequate building society loans, supported by the Government if necessary, as in the previous scheme for loans on older properties. There must be assistance with the deposit, namely, the Conservative scheme for grants towards savings made for the payment of that deposit. Those are the sort of conditions on which we would grant leasehold enfranchisement.
  Leasehold enfranchisement is no new idea in proposals for property reform. Until I listened to the Minister today I would not have thought that anyone

  1379
  would really want to destroy leasehold tenure altogether. As my hon. Friend the Member for Hornsey said, development on a leasehold basis has been of the greatest advantage to the community in the past. There is no reason why we should destroy it. Yet the Minister said of leasehold: "This remarkable contract." He seemed to try to justify the Bill by railing at leasehold tenure as a whole. If he is expressing the Government's view on this, it is strange that he should leave leasehold for everyone other than what I call the "five-year residence" qualifying tenant. He leaves it also for those above a certain rateable value.
  Let us have some certainty about that. Are the Government really dithering about the rateable value limit, or are they fixed on it? Dithering in this debate will have grave effects on the value of properties and transactions between parties at the present time. We should know definitely when the Minister replies whether the Government are wavering on the limit or whether it is firm.
  I said that leasehold enfranchisement is no new idea. But two things in the Bill are new—first, the fiction that the bricks and mortar morally belong to the leaseholder, and secondly the complete disregard in the Bill of transactions which have taken place on the basis of existing law. Many hon. Members opposite have said that they think that the existing law is unjust. But people have acted upon it.
  Until the publication of the White Paper which we debated last February, if anyone intended to disturb existing relationships and property rights which had been acquired with money, he would not have thought of doing so without compensation for the rights lost by one party to another. But the Bill disregards that and while hon. Members are entitled to hold the view that the present law is unjust, it is far more unjust not to recognise that people have acted upon it and acquired rights for money under the existing law.
  Of course, any changes in the law of property are bound to produce anomalies and complications. We saw that in the Land Commission Bill, but this Bill also has its fair share of those anomalies and complications.
  Sir Harmar Nicholls (Peterborough): Disasters.
  Mr. Page: Indeed, perhaps disasters, as my hon. Friend says. The reason is that it is based on the monstrous immorality that five years' residence in a house results in a compulsory gift of that house to the resident. [An HON. MEMBER: "He has paid for it."] The Government seek to give him something he did not purchase.
  Mr. George Thomas: What did he purchase?
  Mr. Page: The Minister tried to justify that sort of policy with the argument that the leaseholder originally built the house on the plot—whether it was the existing leaseholder or his predecessor in title I do not mind. That seems to be the argument on which the Minister bases his advocacy of the Bill, but it is not carried out in the Bill.
  The Bill grants a right by compulsory acquisition in respect of leases of 21 years and one day. It is ridiculous to talk about a leaseholder building a house on land on which he has a lease for only 21 years and one day. No one would be as crazy as that. While that remains, the right hon. Gentleman cannot justify the confiscation of the freeholder's property in the house on the ground that the tenant built it. That is a false argument altogether.
  I take as simple a case as I can. It is is a very ordinary case, of which there must be tens of thousands throughout the country. I will take the figures of examples which the right hon. Gentleman gave. He said that there were small houses in Wales at low ground rents and gave the example of one with five years to run with a present vacant possession value of £1,500. The value of the leasehold interest, I suppose, when paid a year or so ago, with only five or six years to run, would be only a matter of a few hundred pounds. So the existing ground tenant in a property of that sort would have paid, say, £200 or £300 to get into the house. He would now pay the enfranchisement price of £230 according to the right hon. Gentleman. The whole thing would have cost him about £500—and, when the Bill became an Act, he can serve notice on the landowner and flog the house the next day for £1,500.
  The Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. Arthur Skeffington): This is very interesting. Will the hon. Gentleman tell the House what would be the comparable figure for the scheme he was putting forward just now? Let us assume that there was no development and that the lessee could enfranchise.
  Mr. Page: Indeed, the lessee would be entitled to the property at market value, subject, of course, to the length of the term which he still has in his lease. I cannot give figures unless I know the length of the term for the lease. [Interruption.] I will give round figures.
  On the basis of 20 years to run, the freehold reversion in a lease would be worth about one-third of the vacant possession value. Therefore, the market value of the leasehold interest would be two-thirds. So, for a £2,000 house with a 20-year lease to run, one would expect it to be somewhere around £700 or £800 and the remainder would be the market value of the reversion. [HON. MEMBERS: "Now we know."]
  Mr. Speaker: Order. There is a choir of interruptions. Can we have a solo?
  Mr. Page: Let me enlarge on this. I take the second example, a lease with 23 years to run and vacant possession value now of £2,000. The right hon. Gentleman said that the enfranchisement price would be £105. So the qualifying tenant—the five-year resident—could acquire the house for £105 and, I repeat, next day could "flog" it for £2,000. So he acquires it for £105 and sells it next day for £2,000.
  In a burst of morality and equity—words which have treacled through the White Paper and oozed into the debate—hon. Members opposite will probably say, indeed have almost said, "Good luck to him if he can do it. Let him take it off the wicked landlord for £105 and "flog" it for £2,000".
  This will be called in future "flogging Freddy's freeholds" and if the freeholder is a large charity, or college, or teaching hospital or trust fund or insurance company, this is quite impersonal. It is voteless and it does not matter if the money is taken from that source. But perhaps any hon. Member who has a life policy with profits might think of the harm he is doing himself through depriv-
  1382
  ing insurance companies of some of their investments.
  I ask hon. Members to pause to think how a freehold of that sort, in a house on a ground rent, has most probably been
  acquired by the person from who it is now to be taken. It is most likely, if it is a single owner, that the landowner will not be the same person as the original lessor, and the ground tenant will not be the same person as the original lessee. The freehold reversion may have been bought, say, ten years ago as an investment or possibly, as my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) said, for the purpose of occupation by the purchaser.
  If the owner bought it about ten years ago, he would have paid about £500 for the reversion. Taking into account interest lost over the 10 years on his £500 invested and the ground rent received, it might have cost him a total of £650. He receives £105 and, on the right hon. Gentleman's figures, he will therefore lose £550 while the tenant makes a handsome windfall of £1,900.
  Mr. Hooson: The hon. Member has surely overlooked the fact that the landlord receives the ground rent in the meantime?
  Mr. Page: I have not overlooked that fact at all. I have taken it fully into account if the hon. and learned Gentleman will look at my figures, in talking about the interest from the £500, and setting off a small ground rent against it. This windfall, which the right hon. Gentleman is inventing in this Bill, is most unfair to the Home Secretary who is trying to curb the immorality of gambling clubs. It is not right that the Minister should begin this sort of racket.
  This is a disgraceful and cynical disregard of rights of property which have been acquired. The most extravagant point is that the bonus for the tenant and the robbery of the landowner occurs when the landowner is an individual who holds one freehold property. If he is a big estate owner the landlord can claim development value under Clause 9(3). He can claim:
  "such addition as may be just to take account of any additional value"
  due to his owning the additional land.
  That is, he can claim from the tenant the development value due to his being able to marry a number of plots together.

  1383
  I am strongly advised that in South Wales this may bring the price to the tenant up to the price for plot and bricks and mortar. The plot vacant, when married with neighbouring plots, may be as valuable as a plot with a 99-year-old terraced house standing on it. The Government are kidding many leaseholders in this Bill. Some of the big estate owners will receive under Clause 9(3) fair compensation as they should. Why should the single owner be the one selected for expropriation in this way?
  Mr. Elystan Morgan: Does the hon. Gentleman realise that under the Housing Act, 1957, valuers have had to make valuations of site value, and in South Wales and many other parts of Wales site value is sometimes valued at £50, £60, £70?
  Mr. Page: Yes, but when one site can be married to a lot of others it becomes more valuable. This is what I am advised by valuers.
  Furthermore, the landlord, in Clause 19 can obtain the approval of the Minister to a scheme to convert his ground rents into a management fee. It is the same thing, only I suppose that this is the method of the Government's buying off the opposition from large estates. Yet the single owner will have no such benefit. He loses his ground rent and his £2,000 house and gets only
  £105 for them—and the Minister talks about morality and equity.
  If the landlord is a public body, it receives certain benefits denied to the individual. It can retain the development value of the land. Thus, throughout the Bill the Government have shown favouritism towards some lucky ground tenants and some large landowners, and gross unfairness to the ordinary individual ground landlord, robbing him of what is justly and legally his. The final insult comes in Clause 18. If the ground lessee wants the house, he gets it, land and building, for £105. If the true owner wants his own house for his own home, he has to pay £1,900 for it.
  This is not justice, and it cannot be justified in any way. The Conservative plan holds the balance fairly between the parties concerned, taking care not to obstruct development so that we can produce modern dwellings. We would give the residential long leaseholder the
  1384
  right during the last few years of his ground lease to continue in his home as a long leaseholder or as a freeholder, as he may choose, upon paying compensation for the loss suffered. These are fair terms to both sides compared with the gross injustice of the Bill.
  9.31 p.m.
  The Secretary of State for Wales (Mr. Cledwyn Hughes): It was almost a year ago when my predecessor in office, my right hon. Friend the Member for Llanelly (Mr. James Griffiths), concluded the debate on the White Paper on Leasehold Reform, which we introduced at that time. Then, hon. Members opposite, although they described the White Paper variously as a "spiv's charter" and an "act of confiscation", did not vote against it. Tonight,' on a pretext, they are voting against the Bill, notwithstanding the fact that it reflects the White Paper almost in its entirety. The country must judge the motives of right hon. and hon. Members opposite. At a rough estimate, they have had nearly 20 opportunities since 1884 to take some practical action on leasehold reform, and this they have signally failed to do. Tonight, on a technicality, they try to take yet another step backwards.
  The purpose of the Bill is to achieve a permanent and lasting reform of the leasehold system in that sector where history has shown that there has been much injustice and distress. It is not, therefore, concerned with leasehold interests held purely for business use, nor with those held purely for investment. It relates to the man who holds the leasehold interest in a house because he lives there and because it is his home. The Bill confers the benefit on the tenant, not on a company or a body of trustees.
  In a very important respect—and this is a point worth making at this stage of the debate—the Bill improves on the White Paper because it allows the tenant to assign his rights in the property to an intending purchaser. This would allow a man, for example, living in London in a leasehold house to move to South Wales or to the north of England or elsewhere to take up a new job without having to wait for the process of transfer to take place. This is a considerable advance on the White Paper.
  A number of points have been raised in the debate with which I should like

  1385
  to deal. If I leave anyone out, I hope that it will not be taken as a discourtesy it is a question of time.
  The right hon. Member for Altrincham and Sale (Mr. Barber) raised the question of rateable value limits. In order to identify those who particularly need the protection of the Bill, and for no other reason, we have adopted a distinction based on the rateable value of a house. A little over 1 per cent. of the houses in England and Wales have a rateable value above these limits. In Wales there are estimated to be fewer than 800 houses excluded by these limits. My hon. Friend the Member for Cardiff, North (Mr. E. Rowlands) asked whether the £200 limit would rule out a man whose house is above that limit because it is divided into flats. It would exclude such a house, although I should have thought that cases of this sort are likely to be very rare in Cardiff and confined to rather more expensive property. It is important to note that if the division into flats is such as to make it impracticable to use the property as a single dwelling, it will be outside the Bill on those grounds.
  Mr. Barber: The point which I sought to make was that there had been one or two suggestions from the Government Front Bench during the debate to the effect that the £200 and £400 limit might be altered. This would obviously have a significant effect on the value of the property concerned. The House should therefore, be told specifically whether the Government will be prepared in Committee to consider arguments to alter these limits.
  Mr. Hughes: The Government are always prepared to listen to arguments, but these are the limits which we have set and to which we adhere. Clearly, there will be considerable discussion about this, however, in Committee, which is where the detailed argument should take place.
  My hon. Friend the Member for Lewisham, North (Mr. Moyle) asked whether 21-year leases should be included in the Bill. The answer is in the negative. Twenty-one year leases are often granted at rack rents. To apply the Bill to them would mean making rights under it available to people who can hardly be said to have paid for the value of the bricks and mortar in the house.
  1386
  The Bill's definition of a long lease is just about right. In any event, it is based on precedent.
  During the debate we have heard a great deal from the Opposition about confiscation. That is the substance of their Amendment. Our view is that any talk of confiscation of the landlord's interest is nonsense. If anybody is having his property confiscated, it is the leaseholder and not the landlord. The Bill puts matters right. If anyone is concerned about the depression in the market value of freeholds as a result of the Bill, he should reflect on the effect which the 1954 Act, conceived by right hon. and hon. Members opposite, had on the value of reversionary interests. As my right hon. Friend the Minister said in opening the debate, that Act achieved the wonderful result of pleasing practically nobody.
  The hon. Member for Hornsey (Mr. Rossi) made a thoughtful and constructive speech and put forward two interesting alternative suggestions about the price of enfranchisement. I have no doubt that he will develop those arguments in Committee.
  My hon. and learned Friend the Member for Dulwich (Mr. S.C. Silkin) spoke about the premises going with the house and asked whether this affects the price as given in Clause 9. The answer is that the premises are merely the garden and garage let with the house and occupied with it. The price naturally covers those items as well as the house. The freehold interest has to be valued as secured by the presence of the building.
  The right hon. Member for Altrincham and Sale asked why rights would be available to the leaseholder long before there is any question of the lease running out. The answer is that this would defeat one of the main objects of the Bill, which is to enable the leaseholder to escape from the leasehold system before it has had time to work its effect. In South Wales, for example, building societies are unwilling to lend money on leases with less than 40 years left to run. I regard the leasehold system in its present form as unjust and I can see no justification for postponing the leaseholder's remedy.
  My hon. Friend the Member for Cardiff, North, asked why, once a leaseholder has chosen to extend the lease

  1387
  rather than enfranchise it is to be a once-and-for-all choice binding on his successors. There is nothing to prevent a leaseholder holding an extended lease from enfranchising under the Bill if he does it before the original term date, and he will have made up his mind well before then.
  The hon. Member for Carmarthen (Mr. Gwynfor Evans) made what I thought was a rather carping speech. His knowledge of Welsh people is limited if he is not aware that the Bill has had a tremendous reception in the Principality. He asked how Clause 17 works. That Clause enables the landlord to recover possession of the property for redevelopment either on the original term date or during the 50-year extension period, but only if he compensates the leaseholder for the value of the extension or such part of it as is left.
  Again, the right hon. Member for Altrincham and Sale asked in his opening speech why the Minister is allowed to decide whether a scheme of control for a well-managed estate should be put to the High Court. That is a reasonable question, and the answer is that it is because this is a limitation of the rights conferred by the Bill, and it is for a Minister to take the responsibility of deciding whether there is a prima facie case for doing it. In addition, it would be extremely difficult to draw up criteria on which a court could make a proper judgment.
  My hon. Friends the Member for Oxford (Mr. Luard) and the Member for Cambridge (Mr. Robert Davies) asked about Clause 28. They wanted to know in what circumstances a certificate will be given under Clause 28 in relation to freeholds owned by universities and teaching hospitals. The Clause is concerned primarily to prevent nonsenses arising such as would happen if a leaseholder enfranchised and his house was purchased compulsorily shortly afterwards. Consequently, certificates will be given under the Clause in circumstances similar to those in which it would be proper to confirm a compulsory purchase order. "Shortly", in this context, means a few years at the most; the kind of period in which it would be appropriate to purchase land compulsorily in advance. Clauses 28 and 29 will operate only in
  1388
  the case of redevelopment for public purposes; that is, for university or hospital redevelopment in the cases with which my hon. Friends are concerned.
  My hon. Friend the Member for Lewisham, North asked whether the Crown Commissioners should be bound by Statute. To put the Crown under legal obligations to part with a freehold interest in land at the instance of a subject would be a complete novelty in our law. This evening, I can give the House a complete assurance that the Crown will conform fully with the principles of the Bill.
  I should like to say a word about the date of commencement. We have adopted the appointed day procedure for Part I, because it will be necessary for rules of court to be prescribed for county courts to follow in the exercise of their jurisdiction under the Bill. That procedure normally takes two or three months. In any case, a qualified leaseholder whose lease expires between Royal Assent and the appointed day will still be able to exercise his right under the transitional provisions of the Bill.
  I must say something about the problem as it affects Wales. Over many decades, there has been a deep and bitter feeling in Wales about leaseholds. If it is such a good system as many right hon. and hon. Gentlemen opposite have tried to make out, why should there be that deep and bitter feeling in the Principality?
  Let us look very briefly at the past. The hon. and learned Member for Montgomery (Mr. Hooson) in a very good, radical speech—one of the best which he has made in the House—spoke about the past. For Welshmen, this is an historic debate. The present leasehold situation in Wales is the creation of the second half of the last century. It took root in Wales, particularly in the industrial areas, because most of the land was held by large family estates which regarded it as a continuous source of investment income. These owners, not content to make fortune after fortune from the minerals underground, wished to profit also from the needs of the workers and the immense population explosion that was engendered by the coal and steel revolution in South Wales. In Glamorgan alone, where this is an acute problem today, the population increased from 318,000 in 1861—over 100 years

  1389
  ago—to 1,120,000 by 1911, an increase of 253 per cent.
  These workers, who came from rural Wales and from many parts of England, had to have homes, and the landowners could not miss the opportunities which the leasehold system gave them of profiting from this need. We have heard this evening about well-managed estates. The landowners were not concerned to set up well-managed estates. To them the leasehold system offered opportunities of disposing of useless mountain-sides at tremendous profit. Ground rent of £2 a year was charged for building plots. This may not sound exorbitant, but over 99 years it produces far more than the landlord would dare ask in a lump sum, and at 20 houses to the acre, with a ground rent of £2 a year, total receipts of about £4,000 over 99 years did not represent a bad return. It was a very good return for nothing.
  On top of that, they had their reversionary rights. If we look at the evidence given before the Select Committee on Towns and Dwellings in 1886, we see how the land, by no effort of the landlord, increased in value. My hon. Friend the Member for Conway (Mr. Ednyfed Hudson Davies) made a very good speech, and he will know, from his own experience, about such development in North Wales. The Rev. T.J. Weldon of Blaenau Ffestiniog told the Committee that in the village, and in surrounding villages, the owners of the land would not sell the freehold. Quarrymen and shopkeepers were obliged to build on leasehold land, and out of about 2,500 houses in Ffestiniog parish, the local quarrymen themselves built 1,500 on leasehold plots. The total ground rent for all the houses in the village during the 60 years of the average leases amounted to more than £175,000, which arose from about 77 acres of land which, before building took place, was worth less than 7s. 6d. an acre. [An HON. MEMBER: "Confiscation."] This is the Welsh background: This is what makes this Bill historic. [HON. MEMBERS: "Hear, hear."] It was under these conditions that owner-occupation grew in Wales, both in the industrial north and among the much greater populations of the industrial south.
  In 1884 the Medical Officer of Health for Merthyr Tydvil, Mr. Thomas Jones-
  1390
  Dyke, told the Royal Commission on the Housing of Working Classes that the cottages of the Welsh mining population were generally built on 99-year leases. Mr. Dyke said that the new houses then being built had been put up by private individuals taking leases from the owners of the land.
  Is it any wonder that there has been a growing sense of grievance against the leasehold system, and that, throughout Wales, there has been pressure for reform for many years? There is another instance, from the urban district council of Bethesda represented by my hon. Friend the Member for Conway. It is now nearly 60 years since the Bethesda Urban District Council passed a resolution championing the right of compulsory enfranchisement for leaseholders. It declared that the ground rents charged in almost all cases were much above the agricultural value of the land at the time the lease was granted, and that it was unjust that the hard earnings of the leaseholders and their improvements should lapse on the termination of the lease to the freeholder who had in many cases already benefited to the extent of hundreds per cent. on the original value of the land.
  That this sense of grievance was not unjustified is clear from a number of independent investigations. In 1884 the Royal Commission on Housing of the Working Classes, while not recommending universal leasehold enfranchisement, admitted that
  "the evidence laid before us shows that there is a widely spread sense of injustice among lessees. This feeling probably is particularly strong in cases where working men and others build their own houses and, where being unable to obtain land, they are practically compelled to build on leases for short terms."
  In 1921, the Report of the South Wales Regional Survey Committee which was set
  up to examine the housing situation in the coalfield area said:
  "Owing to the very limited area of suitable building land, combined with the fact that the prevalent system of tenure is leasehold, and that the land belongs to a comparatively small number of large landowners, the land monopoly is a very close one, and the ground rents and purchase prices charged in past years have been exceedingly high. For land acquired for school purposes in Glamorgan and Monmouthshire, the local education authorities have had to pay sums ranging from £300 to £1,700 or more per acre, and for housing purposes ground rents on a

  1391
  similar scale have been charged to individuals, the land being let on lease for 99 years."
  I am sorry to have to say this, but very few landlords in Wales have shown any positive estate management. In recent years most of the estates have been crudely liquidating their property as they have had occasion to raise capital. There is little doubt that most of the companies now holding leases consider their property ownership in Wales as an investment and as a matter of financial management. On this question of estate management about which we have heard so much, there is no estate management company which will take the pride in its homes which the individual owner occupier will take, and this I know from my personal experience of the lessees of Wales.
  The Labour Party has worked very hard for a very long time in this field, and so many of my colleagues have taken part in this fight that it is hard to single out any individual. To say that the Bill has anything to do with an election or a by-election is a grotesque distortion of the truth. This Government and this party have been working for this Bill throughout the whole of this century, but I am sure that it is right to mention the important part played by my predecessor the right hon. Member for Llanelly in getting the White Paper solution to the problem worked out, and perhaps I might also be allowed to pay a tribute to my former colleague at the Welsh Office, now the Minister of State for Commonwealth Affairs, who collected the petition which was signed by more than 40,000 people in Cardiff.
  Mr. George Thomas: Sixty thousand.
  Mr. Hughes: My hon. Friend's arithmetic is always better than mine.
  It is also appropriate this evening to refer to our late colleague, Mr. Iorwerth Thomas, the former Member for Rhondda, West, who worked so hard to draw attention to the hardships caused by this leasehold system in his own valley and in the valleys of South Wales. But, as I have said, so many of my hon. Friends from South Wales' constituencies have taken part in this fight that I can hardly mention them all.
  Nor has the battle been fought by the
  Labour Party alone. There have been other just men associated with this
  1392
  reform, some of them associated with the party opposite, and I pay tribute to them. I recognise the contributions made by the hon. Member for Barry (Mr. Gower). I want to refer also to Alderman A.F. Dolman of Newport, who made a report to members of the Council of the Wales and Monmouthshire Conservative and Unionist Association. He made a very important contribution in his report.
  The right hon. Member for Altrincham and Sale made great play of what the newspapers had said about the Bill—and especially what the Financial Times had said. My general impression is that the Bill has been welcomed by large sections of the Press, but I want to quote to the right hon. Gentleman what the The Times said when he was a Minister in the last Government, namely, that the Conservative Government had adopted as one of its objectives the theme of "a property owning democracy"—a slogan which today strikes one as more foolish than it was then. The Times went on to say that
  "it may not unfairly be said that if the Government's policy is truly a property owning democracy, then it must will the means to the full implementation of that policy. Not until the house-owner is free from the difficulties and hardships of the leasehold system can it be said that the Government has taken all the steps which it reasonably could take to implement its own policy."
  It is sheer political hypocrisy for the Opposition to say what they have been saying today, after 13 years of opportunity and Government.
  It is interesting to take up the claim made by hon. Members opposite that they would be for the Bill if enfranchisement could be carried out at a fair price without compulsion. In 1961 a study was made of some of the prices asked for freeholds, or renewals of leases with about 10 years to run. The study revealed that many figures proposed by ground landlords were so high that they could not be regarded as minor differences of opinion about the economic future of the premises.
  A householder in Tonypandy was asked by his landlord to pay £650 for his lease when the valuation officer of the Inland Revenue had put the "fair price" at £200. In Cardiff the asking price was six times the "fair price" and in Llandeilo it was five times the "fair

  1393
  price". In the case of a house with a nine-year lease to run at Porth, where the ground rent was 10s. a year, the freeholder refused an offer of £250 for the freehold.
  The debate has demonstrated an important thing—the tremendous gulf that exists between the Tory Party and the Labour Party. We have heard more doctrinaire speeches from that side of the House today than for a long time. References have been made to the sanctity of contract. The party opposite is more interested in the sanctity of property than the sanctity of contract. Hon. Members on this side of the House are concerned with the sanctity of men and women.
  Many measures of reform will come before the House during the life of this
  Parliament. This is as it should be. We are a Government and a party of reform. But for Wales, where about one-third of all houses are leaseshold—a much higher proportion than in England—this Measure has a special significance. For Welshmen, this is a day of achievement, a day on which an ancient wrong is righted and an inveterate grievance removed. By a coincidence, it is almost 83 years since a similar Bill had its Second Reading in this House, on 20th March, 1884. It was defeated by 118 votes to 104. On this day, 83 years later, I have confidence that this House will give the Bill a Second Reading.
  Question put, That the words proposed to be left out stand part of the Question:—
  The House divided: Ayes 319, Noes 197.

  Division No. 283.]

  AYES

  [10.0 p.m.

  Abse, Leo

  Darling, Rt. Hn. George

  Ginsburg, David

  Allaun, Frank (Salford, E.)

  Davidson, Arthur (Accrington)

  Gordon Walker, Rt. Hn. P. G.

  Alldritt, Walter

  Davidson,Jamea(Aberdeenshire,W.)

  Gower, Raymond

  Allen, Scholefield

  Davies, Dr. Ernest (Stretford)

  Gray, Dr. Hugh (Yarmouth)

  Anderson, Donald

  Davies, G. Elfred (Rhondda, E.)

  Greenwood, Rt. Hn. Anthony

  Archer, Peter

  Davies, Ednyfed Hudson (Conway)

  Grimond, Rt. Hn. J.

  Armstrong, Ernest

  Davies, Harold (Leek)

  Gunter, Rt. Hn. R. J.

  Ashley, Jack

  Davies, Ifor (Gower)

  Hamilton, James (Bothwell)

  Atkins, Ronald (Preston, N.)

  Davies, Robert (Cambridge)

  Hamling, William

  Atkinson, Norman (Tottenham)

  Davies, S. C. (Merthyr)

  Harper, Joseph

  Bacon, Rt. Hn. Alice

  de Freitas, Rt. Hn. Sir Geoffrey

  Harrison, Walter (Wakefield)

  Bagier, Gordon A. T.

  Dell, Edmond

  Hart, Mrs. Judith

  Barnes, Michael

  Dempsey, James

  Haseldine, Norman

  Barnett, Joel

  Dewar, Donald

  Hattersley, Roy

  Baxter, William

  Diamond, Rt. Hn. John

  Hazell, Bert

  Bellenger, Rt. Hn. F. J.

  Dickens, James

  Healey, Rt. Hn. Denis

  Benn, Rt. Hn. Anthony Wedgwood

  Dobson, Ray

  Heffer, Eric S.

  Bessell, Peter

  Doig, Peter

  Henig, Stanley

  Bidwell, Sydney

  Donnelly, Desmond

  Hooley, Frank

  Binns, John

  Driberg, Tom

  Hooson, Emlyn

  Bishop, E. S.

  Dunn, James A.

  Horner, John

  Blackburn, F.

  Dunnett, Jack

  Houghton, Rt. Hn. Douglas

  Blenkinsop, Arthur

  Dunwoody, Mrs. Gwyneth (Exeter)

  Howarth, Harry (Wellingborough)

  Boardman, H.

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

  Howell, Denis (Small Heath)

  Booth, Albert

  Eadie, Alex

  Hoy, James

  Boston, Terence

  Edelman, Maurice

  Hughes, Rt. Hn. Cledwyn (Anglesey)

  Boyden, James

  Edwards, Rt. Hn. Ness (Caerphilly)

  Hughes, Emrys (Ayrshire, S.)

  Braddock, Mrs. E. M.

  Edwards, Robert (Bilston)

  Hughes, Hector (Aberdeen, N.)

  Bradley, Tom

  Edwards, William (Merioneth)

  Hughes, Roy (Newport)

  Brooks, Edwin

  Ellis, John

  Hunter, Adam

  Broughton, Dr. A. D. D.

  English, Michael

  Hynd, John

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

  Ennals, David

  Irvine, A. J. (Edge Hill)

  Brown, R. W. (Shoreditch & F'bury)

  Evans, Albert (Islington, S.W.)

  Jackson, Colin (B'h'se & Spenb'gh)

  Buchan, Norman

  Evans, Gwynfor (C'marthen)

  Jackson, Peter M. (High Peak)

  Buchanan, Richard (G'gow, Sp'burn)

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

  Janner, Sir Barnett

  Butler, Mrs. Joyce (Wood Green)

  Faulds, Andrew

  Jay, Rt. Hn. Douglas

  Callaghan, Rt. Hn. James

  Fennyhough, E.

  Jeger, George (Goole)

  Cant, R. B.

  Finch, Harold

  Jenkins, Hugh (Putney)

  Carter-Jones, Lewis

  Fitch, Alan (Wigan)

  Jenkins, Rt. Hn. Roy (Stechford)

  Castle, Rt. Hn. Barbara

  Fitt, Gerard (Belfast, W.)

  Johnson, Carol (Lewisham, S.)

  Chapman, Donald

  Fletcher, Raymond (Ilkeston)

  Johnson, James (K'ston-on-Hull, W.)

  Cloe, Denis

  Floud, Bernard

  Jones, Dan (Burnley)

  Coleman, Donald

  Foley, Maurice

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

  Concannon, J. D.

  Foot, Sir Dingle (Ipswich)

  Jones, J. Idwal (Wrexham)

  Corbet, Mrs. Freda

  Foot, Michael (Ebbw Vale)

  Judd, Frank

  Craddock, George (Bradford, S.)

  Ford, Ben

  Kelley, Richard

  Crawshaw, Richard

  Forrester, John

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

  Cronin, John

  Fowler, Gerry

  Kerr, Dr. David (W'worth, Central)

  Crosland. Rt. Hn. Anthony

  Fraser, John (Norwood)

  Kerr, Russell (Feltham)

  Grossman, Rt. Hn. Richard

  Freeson, Reginald

  Leadbitter, Ted

  Cullen, Mrs. Alice

  Gardner, Tony

  Ledger, Ron

  Dalyell, Tam

  Garrett, W. E.

  Lee, Rt. Hn. Frederick (Newton)

  Lee, Rt. Hn. Jennie (Cannock)

  Norwood, Christopher

  Skeffington, Arthur

  Lee, John (Reading)

  Oakes, Gordon

  Slater, Joseph

  Lestor, Miss Joan

  Ogden, Eric

  Small, William

  Lever, Harold (Cheatham)

  O'Malley, Brian

  Snow, Julian

  Lever, L. M. (Ardwick)

  Oram, Albert E.

  Spriggs, Leslie

  Lewis, Ron (Carlisle)

  Orbach, Maurice

  Steele, Thomas (Dunbartonshire, W.)

  Lipton, Marcus

  Orme, Stanley

  Stewart, Rt. Hn. Michael

  Lomas, Kenneth

  Oswald, Thomas

  Stonehouse, John

  Loughlin, Charles

  Owen, Dr. David (Plymouth, S'tn)

  Strauss, Rt. Hn. G. R.

  Luard, Evan

  Padley, Walter

  Summerekill, Hn. Dr. Shirley

  Lubbock, Eric

  Page, Derek (King's Lynn)

  Swain, Thomas

  Lyon, Alexander W. (York)

  Palmer, Arthur

  Swingler, Stephen

  Lyons, Edward (Bradford, E.)

  Pannell, Rt. Hn. Charles

  Symonds, J. B.

  McBride, Neil

  Park, Trevor

  Taverne, Dick

  McCann, John

  Parker, John (Dagenham)

  Thomas, George (Cardiff, W.)

  MacColl, James

  Parkyn, Brian (Bedford)

  Thomson, Rt. Hn. George

  MacDermot, Niall

  Pavitt, Laurence

  Thornton, Ernest

  Macdonald, A. H.

  Pearson, Arthur (Pontypridd)

  Tinn, James

  McGuire, Michael

  Peart, Rt. Hn. Fred

  Tomney, Frank

  McKay, Mrs. Margaret

  Pentland, Norman

  Tuck, Raphael

  Mackenzie, Gregor
  (Rutherglen)

  Perry, Ernest G. (Battersea, S.)

  Urwin, T. W.

  Mackie, John

  Prentice, Rt. Hn. R. E.

  Varley, Eric G.

  Mackintosh, John P.

  Price, Christopher (Perry Barr)

  Wainwright, Edwin (Dearne Valley)

  Maclennan, Robert

  Price, Thomas (Westhoughton)

  Wainwright, Richard (Colne Valley)

  McNamara, J. Kevin

  Price, William (Rugby)

  Walden, Brian (All Saints)

  MacPherson, Malcolm

  Probert, Arthur

  Walker, Harold (Doncaster)

  Mahon, Peter (Preston, S.)

  Pursey, Cmdr. Harry

  Wallace, George

  Mahon, Simon (Bootle)

  Randall, Harry

  Watkins, David (Consett)

  Mallalieu, E. L. (Brigg)

  Rankin, John

  Watkins, Tudor (Brecon & Radnor)

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

  Redhead, Edward

  Weitzman, David

  Manuel, Archie

  Reynolds, G. W.

  Wellbeloved, James

  Mapp, Charles

  Rhodes, Geoffrey

  Wells William (Walsall, N.)

  Marquand, David

  Richard, Ivor

  Whitaker, Ben

  Marsh, Rt. Hn. Richard

  Roberts, Albert (Normanton)

  White, Mrs. Eirene

  Mason, Roy

  Roberts, Goronwy (Caernarvon)

  Whitlock, William

  Maxwell, Robert

  Roberts, Gwilym (Bedfordshire, S.)

  Wigg, Rt. Hn. George

  Mayhew, Christopher

  Robertson, John (Paisley)

  Wilkins, W. A.

  Mellish, Robert

  Robinson,Rt.Hn.Kenneth(St.P'c'as)

  Willey, Rt. Hn. Frederick

  Mendelson, J. J.

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

  Williams, Alan (Swansea, W.)

  Millan, Bruce

  Rodgers, William (Stockton)

  Williams, Alan Lee (Hornchurch)

  Miller, Dr. M. S.

  Roebuck, Roy

  Williams, Clifford (Abertillery)

  Milne, Edward (Blyth)

  Rogers, George (Kensington, N.)

  Williams, Mrs. Shirley (Hitchin)

  Mitchell, R. C. (S'th'pton, Test)

  Rose, Paul

  Williams, W. T. (Warrington)

  Molloy, William

  Ross, Rt. Hn. William

  Wilson, William (Coventry, S.)

  Moonman, Eric

  Rowland, Christopher (Meriden)

  Winnick, David

  Morgan, Elystan (Cardiganshire)

  Rowlands, E. (Cardiff, N.)

  Winstanley, Dr. M. P.

  Morris, Alfred (Wythenshawe)

  Ryan, John

  Winterbottom, R. E.

  Morris, Charles R. (Openshaw)

  Shaw, Arnold (Ilford, S.)

  Woodburn, Rt. Hn. A.

  Morris, John (Aberavon)

  Sheldon, Robert

  Woof, Robert

  Moyle, Roland

  Shinwell, Rt. Hn. E.

  Wyatt, Woodrow

  Mulley, Rt. Hn. Frederick

  Shore, Peter (Stepney)

  Yates, Victor

  Murray, Albert

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

  Neal, Harold

  Silkin, Rt. Hn. John (Deptford

  TELLERS FOR THE AYES:

  Newens, Stan

  Silkin, Hn. S. C. (Dulwich)

  Mr. Charles Grey and

  Noel-Baker, Francis (Swindon)

  Silverman, Julius (Aston)

  Mr. George Lawson.

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

  Silverman, Sydney (Nelson)

  NOES

  Alison, Michael (Barkston Ash)

  Bryan, Paul

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

  Allason, James (Hemel Hempstead)

  Buchanan-Smith,Alick(Angue,N&M)

  Dodds-Parker, Douglas

  Astor, John

  Buck, Antony (Colchester)

  Doughty, Charles

  Atkins, Humphrey (M't'n & M'd'n)

  Bullus, Sir Eric

  Douglas-Home Rt. Hn. Sir Alec

  Awdry, Daniel

  Burden, F. A.

  Elliot, Capt. Walter (Carshalton)

  Baker, W. H. K.

  Campbell, Gordon

  Errington, Sir Eric

  Balniel, Lord

  Carlisle, Mark

  Farr, John

  Barber, Rt. Hn. Anthony

  Cary, Sir Robert

  Fisher, Nigel

  Batsford, Brian

  Channon, H. P. G.

  Fortescue, Tim

  Bell, Ronald

  Chichester-Clark, R.

  Foster, Sir John

  Bennett, Dr. Reginald (Gos. & Fhm)

  Clark, Henry

  Fraser,Rt.Hn.Hugh(St'fford & Stone)

  Berry, Hn. Anthony

  Clegg, Walter

  Galbraith, Hn. T. G.

  Biffen, John

  Cooke, Robert

  Gibson-Watt, David

  Biggs-Davison, John

  Cooper-Key, Sir Neill

  Giles, Rear-Adm. Morgan

  Birch, Rt. Hn. Nigel

  Cordle, John

  Gilmour, Ian (Norfolk, C.)

  Black, Sir Cyril

  Corfield, F. V.

  Gilmour, Sir John (Fife, E.)

  Body, Richard

  Crawley, Aidan

  Goodhart, Philip

  Bossom, Sir Clive

  Crosthwaite-Eyre, Sir Oliver

  Goodhew, Victor

  Boyd-Carpenter, Rt. Hn. John

  Crouch, David

  Grant, Anthony

  Braine, Bernard

  Crowder, F. P.

  Grant-Ferris, R.

  Brewis, John

  Cunningham, Sir Knox

  Hall, John (Wycombe)

  Brinton, Sir Tatton

  Dalkeith, Earl of

  Hall-Davis, A. G. F.

  Bromley-Davenport,Lt.-Col.SirWalter

  Dance, James

  Hamilton, Michael (Salisbury)

  Brown, Sir Edward (Bath)

  d'Avigdor-Goldsmid, Sir Henry

  Harris, Frederic (Croydon, N.W.)

  Bruce-Gardyne, J.

  Dean, Paul (Somerset, N.)

  Harris, Reader (Heston)

  1396

  1397

  Harrison, Col. Sir Harwood (Eye)

  Macmillan, Maurice (Farnham)

  Rodgers, Sir John (Sevenoaks)

  Harvey, Sir Arthur Vere

  Madden, Martin

  Roots, William

  Harvie Anderson, Miss

  Maginnis, John E.

  Royle, Anthony

  Hastings, Stephen

  Marples, Rt. Hn. Ernest

  Russell, Sir Ronald

  Hay, John

  Marten, Neil

  St. John-Stevas, Norman

  Heald, Rt. Hn. Sir Lionel

  Maude, Angus

  Sandys, Rt. Hn. D.

  Heath, Rt. Hn. Edward

  Maudling, Rt. Hn. Reginald

  Scott, Nicholas

  Heseltine, Michael

  Maxwell-Hyslop, R. J.

  Sharples, Richard

  Higgins, Terence L.

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

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

  Hill, J. E. B.

  Mills, Peter (Torrington)

  Sinclair, Sir George

  Hirst, Geoffrey

  Mills, Stratton (Belfast, N.)

  Smith, John

  Hobson, Rt. Hn. Sir John

  Miscampbell, Norman

  Stodart, Anthony

  Hogg, Rt. Hn. Quintin

  Mitchell, David (Basingstoke)

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

  Holland, Philip

  Monro, Hector

  Tapsell, Peter

  Hordern, Peter

  Morgan, Geraint (Denbigh)

  Taylor, Sir Charles (Eastbourne)

  Hornby, Richard

  Morrison, Charles (Devizes)

  Taylor, Frank (Moss Side)

  Howell, David (Guildford)

  Mott-Radclyffe, Sir Charles

  Teeling, Sir William

  Hunt, John

  Munro-Lucas-Tooth, Sir Hugh

  Temple, John M.

  Hutchison, Michael Clark

  Murton, Oscar

  Turton, Rt. Hn. R. H.

  Iremonger, T. L.

  Neave, Airey

  van Straubenzee, W. R.

  Irvine, Bryant Godman (Rye)

  Nicholls, Sir Harmar

  Vaughan-Morgan, Rt. Hn. Sir John

  Jenkin, Patrick (Woodford)

  Onslow, Cranley

  Vickers, Dame Joan

  Jennings, J. C. (Burton)

  Orr, Capt. L. P. S.

  Walker, Peter (Worcester)

  Jones, Arthur (Northants, S.)

  Osborn, John (Hallam)

  Walker-Smith, Rt. Hn. Sir Derek

  Jopling, Michael

  Page, Graham (Crosby)

  Wall, Patrick

  Joseph, Rt. Hn. Sir Keith

  Page, John (Harrow, W.)

  Walters, Dennis

  Kaberry, Sir Donald

  Pearson, Sir Frank (Clitheroe)

  Ward, Dame Irene

  Kerby, Capt. Henry

  Peel, John

  Weatherill, Bernard

  Kershaw, Anthony

  Percival, Ian

  Webster, David

  Kimball, Marcus

  Peyton, John

  Wells, John (Maidstone)

  King, Evelyn (Dorset, S.)

  Pounder, Rafton

  Whitelaw, Rt. Hn. William

  Kirk, Peter

  Powell, Rt. Hn. J. Enoch

  Wills, Sir Gerald (Bridgwater)

  Kitson, Timothy

  Price, David (Eastleigh)

  Wolrige-Gordon, Patrick

  Lancaster, Col. C. G.

  Prior, J. M. L.

  Wood, Rt. Hn. Richard

  Legge-Bourke, Sir Harry

  Quennell, Miss J. M.

  Woodnutt, Mark

  Lewis, Kenneth (Rutland)

  Ramsden, Rt. Hn. James

  Worsley, Marcus

  Longden, Gilbert

  Rawlinson, Rt. Hn. Sir Peter

  Wylie, N. R.

  Loveys, W. H.

  Rees-Davies, W. R.

  Younger, Hn. George

  McAdden, Sir Stephen

  Renton, Rt. Hn. Sir David

  MacArthur, Ian

  Ridley, Hn. Nicholas

  TELLERS FOR THE NOES:

  Maclean, Sir Fitzroy

  Ridsdale, Julian

  Mr. Francis Pym and

  McMaster, Stanley

  Robson Brown, Sir William

  Mr. Jasper More.

  Bill read a Second time.
  Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

  BUSINESS OF THE HOUSE
  Ordered,
  That the Proceedings of the Committee of Ways and Means may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[Mr. McBride.]

  WAYS AND MEANS
  Considered in Committee.
  [Mr. SYDNEY IRVING in the Chair]

LEASEHOLD REFORM (BETTERMENT LEVY)
Motion made, and Question proposed,
That, if provision is made by any Act of the present Session to enable tenants of residential property to acquire the freehold, then any conveyance of a reversionary interest required to be made for that purpose shall for
1398
the purposes of Part III of the Land Commission Act 1967 be treated as a conveyance on sale or assignment on sale of that interest, and the price payable for the interest shall be treated as consideration payable in respect of the disposition of the interest, and betterment levy shall be chargeable accordingly.—[Mr. MacDermot.]
10.14 p.m.
Mr. Graham Page (Crosby): To use the example we have been using in the last hour or so, does this Resolution really mean that a man who has been deprived of a £2,000 house, compulsorily, for £105 will now have to pay a betterment levy on part of that £105? Is this really so? If it is, what happens when the tenant sells? What is the base value when the tenant comes to sell? Is the base value the consideration of this transaction. £105, and, if he sells the property for £3,000, does he pay development value levy of 40 per cent. on the difference between £105 and £3,000? We ought to have an explanation and not let this Resolution go through on the nod.
The Minister of State, Ministry of Housing and Local Government (Mr. Frederick Willey): Obviously, the hon. Gentleman is confused. He has exerted

1399
himself strenuously in replying to the Second Reading debate from the Opposition Front Bench and he has not got this matter clear. It is consequential on Clause 25(2) of the Bill.
It was anticipated in the White Paper. We explained that, if there was development value, the development value would attract the levy. The levy is a universal charge, and it is right and proper that any development value realised should attract the levy. The whole principle of Part III of the Land Commission Act which the hon. Gentleman and I have discussed exhaustively is that development value which has already borne levy will not bear the levy again.
Mr. Graham Page: The right hon. Gentleman has not answered my question. This only goes half way. What is the next stage? When the tenant sells, we have to discover a base value and a market value on the sale in order to arrive at the net development value on which betterment levy is charged. On the sale what is the base value?
According to the Schedule to the Land Commission Act as it stands, it will be £105. So the tenant selling, after he has acquired the property compulsorily, would have to pay on the difference between £105 in my example and what he may sell the property for, perhaps £3,000 or £4,000.
Mr. Wiley: I can only repeat that the hon. Gentleman is confused. The example I gave in which the figure of £105 came was a case which did not involve development value at all.
Sir Harmar Nicholls (Peterborough): The right hon. Gentleman ought to try to answer my hon. Friend's question. If he does not understand the Resolution which he has put to the House, he ought to say SO. [HON. MEMBERS: "Do you?"] I confess that I do not understand it. But at this stage, before we pass the Resolution, we are entitled to a clear explanation. I add the further question: if a tenant acquires ownership under the Bill, does he have to pay Capital Gains Tax if he sells at the other figure later on?
Mr. Anthony Barber (Altrincham and Sale): This is an important matter. My hon. Friend's question was crystal clear and simple. We ought to have had an
1400
answer from the Minister, but, as we have very important business to transact before we rise this evening, we shall return to the matter in Committee.
Mr. Willey: I respond at once to the right hon. Gentleman's invitation. I have explained that I cannot answer the hon. Gentleman's point because he referred to a case which did not involve development value at all. Obviously, he was not informed. We have published explanatory leaflets about Part III of the Land Commission Act, and I recommend hon. and right hon. Gentlemen to read them before they raise the matter again.
Question put and agreed to.
Resolution to be reported.
Report to be received Tomorrow; Committee to sit again Tomororw.

NATIONAL INSURANCE ACTS 1946 AND 1948 (AMENDMENT) [MONEY]
Queen's Recommendation having been signified—
Resolved,
That, for the purposes of any Act of the present Session to amend the enactments providing for benefits out of the Industrial Injuries Fund in respect of industrial diseases, it is expedient to authorise the payment out of moneys provided by Parliament of any increase in the sums which, subject to the provision made by section 61 of the National Insurance (Industrial Injuries) Act 1965 for reimbursement out of the said Fund, are so payable under the said section 61 or that section as applied by—

(a) section 3(5) of the Workmen's Compensation (Supplementation) Act 1951; or

(b) section 4(1) of the Pneumoconiosis and Byssinosis Benefit Act 1951; or

(c) the corresponding provision of any Act of the present Session repealing and re-enacting the said section 3(5) or 4(1),

being an increase attributable to any provision of the first-mentioned Act of the present Session for securing that, where the extent of a person's disablement resulting from pneumoconiosis, or from pneumoconiosis accompanied by tuberculosis, would, if that person's physical condition were otherwise normal, be assessed under the said Act of 1965 at not less than fifty per cent. or be determined in accordance with a scheme under one of the other Acts afore-mentioned to be of comparable gravity, and the pneumoconiosis is accompanied, or further accompanied, by emphysema or chronic bronchitis, the effects of the emphysema or chronic bronchitis may be treated as if they were effects of the pneumoconiosis.—[Mr. MacDermot.]

PRICES AND INCOMES (LIMB-FITTERS)
10.21 p.m.
Mr. Maurice Macmillan (Farnham): I beg to move,
That an humble Address be presented to Her Majesty, praying that the Temporary Restrictions on Pay Increases (20th July 1966 Levels) (No.1) Order 1967 (S.I, 1967, No. 98), dated 30th January 1967, a copy of which was laid before this House on 30th January, be annulled.
This matter was first raised by my hon. Friend the Member for Richmond, Surrey (Mr. A. Royle) in an Early Day Motion taken up in an Adjournment debate on 18th November, which was replied to by the then Parliamentary Secretary to the Ministry of Health, the hon. Member for Gloucestershire, West (Mr. Loughlin). At Question Time on 5th December, in reply to a Question from my hon. Friend, the Minister of Health said:
"An agreement has been reached between the employers and the union, and the limb fitters have today resumed normal working."—[OFFICIAL REPORT, 5th December, 1966; Vol.737, c.926.]
Again in reply to my hon. Friend, after the Order which we are debating was made, the Minister said:
"Work is proceeding normally at Roehampton and no special measures are necessary."—OFFICIAL REPORT, 6th February, 1967; Vol.740, c.200.]
I think that the fact that that is so is due only to the restraint of the limb-fitters and their union, A.S.S.E.T. In the previous Adjournment debate, criticism—perhaps regret would be a more accurate word—was expressed on both sides of the House about the go-slow of the limb-fitters. My right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) perhaps expressed the view of the whole House when he said:
"I have the greatest sympathy with the union over having what I understand was very nearly a firm agreement frustrated by the accident of a few days".—[OFFICIAL REPORT, 18th November, 1966; Vol.736. c.902.]
In this debate, both sides of the House will have even more sympathy with the union and the limb-fitters because they have been frustrated not by an accident but by the deliberate policy of the Government, using the D.E.A. and the Prices and Incomes Act to over-rule what
1402
amounted to a firm undertaking given to the union by the Minister of Health and the Government, preventing the employers honouring their undertaking to the union concerned.
I must express the admiration of this side of the House for the restraint being shown by the union and the limb-fitters in the face of extreme provocation. Perhaps it would be for the convenience of the House if I briefly recapitulate the events and the facts in this distressing case.
In all, about 180 limb-fitters are concerned. They are all members of A.S.S.E.T., which has been negotiating wages and conditions on their behalf for over 20 years. Out of the total, 170 fitters are concerned with fitting artificial legs and 10 deal with arms and hands, and 60 per cent. of them are employed by Messrs. J.E. Hanger and Co. Ltd., which is the largest of some eight firms working for the Ministry under contract.
It is extremely skilled work. Their job is to translate the doctors' prescriptions into artificial limbs, and it requires considerable personal qualities as well as great technical skill. I understand that the normal apprenticeship for the manufacture of artificial limbs is five years and that it takes six years or more after completing the apprenticeship to acquire sufficient skill to become a fitter.
So great is the contribution made by the limb-fitters to the well-being of their patients that many of the private patients who go to them do not, I understand, obey the rules imposed on the National Health Service of necessarily seeing a doctor first except for purely mechanical repairs. The fitters had a rise of £50 a year in March, 1964, and again in March, 1965, which brought them to the present level of £1,368 a year, or just over £26 for a 37-hour week. I come now to the melancholy chronicle of this dispute, not between the union and the employers, but between the limb-fitters and the Government.
On 15th March, 1966, A.S.S.E.T. approached Messrs. J. E. Hanger and Co. Ltd., as the major employer whose lead is followed by the other firms in the industry, and submitted a claim for £250 a year rise. The first meeting between the union and the management took place on 18th April, 1966, leading to an

1403
offer by the firm in June to negotiate increases if A.S.S.E.T. accepted the proposals for increased efficiency. Finally, an agreement was reached on 9th August, 1966, for an interim rise of £100 a year, to be paid retrospectively to 1st May, 1966. I quote a letter written by the union to the management:
"I am writing to confirm the understanding we reached today on the desirability of taking whatever steps are open to both of us to improve productivity, efficiency, and economic work within your establishments…Accordingly, we propose to recommend to our members, in line with the theme of our talks, that they become party with you to a special Working Party on Efficiency and Productivity."
We thus had, on 9th August, an agreement for an interim rise of £100 a year and an agreement to enter into a special working party on efficiency and productivity.
It was this agreement that the company was initially prevented from honouring because of its voluntary adherence to the Government's prices and incomes policy. On 24th August, there was a meeting at which the company stuck to its position that no payment could be made until 1st January, 1967, when the standstill period became the period of severe retraint. As a result, on 2nd September, 1966, the limb-fitters started to work to rule. During the course of this dispute there were various meetings, in which A.S.S.E.T. produced a formula for a six-months' pause between May and November, 1966, which was unacceptable.
Finally, on 2nd December, 1966, agreement was reached on the firm offer to pay the £100 increase from 2nd January, 1967, and to hold further discussions on methods of improving efficiency. It was the formal acceptance of this agreement on 5th December, 1966, that enabled the Minister of Health to make an announcement to the House that normal working had been resumed. It was at this point that the Minister, having welcomed this agreement as a fairy godmother and given his blessing, was replaced by the demon king in the person of the D.E.A., who on 9th January, 1967, referred the agreement to the Prices and Incomes Board.
This was too much for the patience even of the firm, who rightly rejected the Government's request and began pay-
1404
ing the £100 a year increase from 1st January, 1967. On 13th January, 1967, the Secretary of State gave notice of his intention to make an Order under Section 29 of the Prices and Incomes Act. Despite representations from the union and from the firm, that Order was made on 29th January and came into force the next day.
It is this Order that we are praying against tonight, and I hope that we shall have the support of hon. and right hon. Gentlemen in all parts of the House for I cannot find any valid reason why this Order should not be annulled. On an examination of the conduct of the union, the firm and of the Government, any sane judgment of the events must lead those of us who feel this way into the Lobby against this Order.
I can find no valid reason why this Order should be supported, but I can anticipate some of the arguments which the hon. Gentleman the Parliamentary Secretary will put forward. No doubt we shall hear of the importance of maintaining the integrity of the prices and incomes policy. This surely comes within the terms of one of the two White Papers, either on the stand-still, or the period of severe restraint. It is surely reasonable to regard this as a special case. It concerns very few people, 180 of them, and a rise of £100 a year—£18,000 less tax. Surely this is something which can hardly create a precedent and which can hardly lead even this Government into difficulties.
The Joint Parliamentary Secretary to the Ministry of Labour (Mr. Roy Hattersley): It would be a convenience to the House if, when he says that the claim comes within the terms of the White Paper, the hon. Gentleman would draw the attention of the House to which part of the White Paper he means.
Mr. Macmillan: If the hon. Gentleman will wait for me to develop my argument, he will find that he has plenty to answer.
I would refer the House to the remarks of my right hon. Friend the Member for Kingston-upon-Thames, who referred to this in an Adjournment debate and said:
"…we are within six months…of the period of absolute freeze, and we then begin the period of what is called severe restraint.

1405
If I understood it aright, that is a period in which advances may be made in some cases."
It is my plea to the House that this is a case in which an advance should be made. If it is the worry and concern of the Government to maintain the prices and incomes policy, they should think a little about the integrity of their own statements and of the implications of what they have said in this House. The then Parliamentary Secretary to the Ministry of Health, in the previous debate on the Adjournment, said:
"…the only thing we can hope for is that, as a result of the debate today, the appeals which I shall make before I finish will evoke a response."—[OFFICIAL REPORT, 18th November, 1966; Vol.736, c.895–902.]
They did evoke a response, and the Minister welcomed the settlement and the end of the work-to-rule.
But what happened then? No hint had
been given by the Minister to this House nor by the Ministry to the firm that the agreement was not acceptable to the Government. Very suddenly, the Department of Economic Affairs stepped in, and I am rather sorry for the Minister of Labour and the Parliamentary Secretary, who have been landed with the task of defending this dishonourable and arrogant disregard of the spirit, if not the letter, of the implied pledge given by the Minister.
Another argument which may well be
brought forward is that there would be unfairness to others who have been affected by similar Orders. I have a list of one or two. Laundry and dry-cleaning charges were frozen. An Order banning any pay increase in the case of Thorn Electrical Industries was in force on 2nd November. Then there were the newspaper, printing and distribution workers, the Metropolitan Police draughtsmen, the Rockware Glass workers and a lot more. I cannot believe that the unions or the people affected by those Orders would resent in any way an exception being made in the case of 180 limb-fitters who have been treated so shabbily.
There are those who have had a rise, some without a productivity agreement and some with. There are the senior bank staffs, bakery workers, wholesale grocery and provision workers, local authority white-collar workers, railway-
1406
men, municipal busmen, gas workers, doctors and a whole range of others. If these can get a rise sanctioned, it is going too far to make an example almost of the limb-fitters.
I understand that 284 proposals for increases in pay to take account of increases in productivity, and which were to take effect in the period of severe restraint, had been submitted to the Ministry of Labour by 16th February. I understand, further, that 89 cases had been examined up to 16th February this year and that 73 of these had been allowed as complying with the provisions of the White Paper and 16 were stopped. The case of 180 limb-fitters is one of those which has been stopped.
The question of productivity is of particular importance, because it is not only concerned with output or economy or the more efficient use of resources. The words "productivity" and "increased efficiency" take on a new meaning, because the case in question is concerned with the well-being, the happiness and the efficient and effective treatment of the disabled.
It is fair to say that part of the reason why the limb-fitters, members of A.S.S.E.T., are so dissatisfied with the treatment which they have been given is that they are not happy with the treatment which they are able to give and with the circumstances that surround their working conditions and the organisation under which they work. They treat 400 patients a week, which means that each fitter has very often to deal with more than one patient at a time. It is a factor which did not matter so much when most of the patients were ex-Servicemen, but it is one which is becoming more important now that there are more amputees among elderly people who have lost limbs as a result of disease rather than accident and who perhaps are a little more sensitive about group treatment.
Mr. Eric Ogden (Liverpool, West Derby): Is the hon. Gentleman saying that ex-Servicemen should be treated differently from civilian amputees?
Mr. Macmillan: The hon. Gentleman has misunderstood me. I was saying that a number of youngish ex-Servicemen of the same age are less likely to mind having their lower limbs exposed when other people are present than middle aged or

1407
elderly ladies. It is a very simple argument and not one carrying the connotation which the hon. Gentleman is seeking to give it.
Mr. Ogden: Read HANSARD.
Mr. Macmillan: Other difficulties which they are facing but which I need not develop tonight concern the division of responsibility, the whole question of procedure, the amount of time spent waiting, the difficulty of dealing with the ambulance services, and so on.
It is widely admitted by the Ministry, by Messrs. Hanger and the other firms concerned, by the medical authorities and by the limb-fitters and their union, that there is much room for improvement to remove these somewhat difficult and, in some cases, unpleasant conditions for all concerned. It is that as much as a wage increase which is being threatened by the Government.
The wages index is up by one point only between December, 1966, and January, 1967, largely due to an increase in the minimum earnings of the engineering industry. The Government, quite rightly have allowed that increase and others, but they are not allowing this one to a numerically insignificant, tiny group of technicians, and they have chosen this one on which to stand firm. It is one which, on any commonsense judgment, could have been an exception to any rule, however rigid in other ways. It is the rigidity which they are showing which is arrogant and cynical. Not only does it affect the reward of a small number of devoted and skilful men, but, by ignoring the improvements which will come with the increase in the salaries of the limb-fitters—improvements which both sides have undertaken to negotiate—it is refusing to ease the burden on the disabled and to increase the comfort with which they and the injured are treated.
Mr. Deputy Speaker (Mr. Sydney Irving): Mr. Hugh Jenkins.
Mr. Anthony Royle (Richmond, Surrey): On a point of order, Mr. Deputy Speaker. In view of the fact that much of this debate affects in great detail the running and management of the National Health Service, is it not a disgraceful contempt of the House that there
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is no Minister on the Front Bench representing the Ministry of Health?
Mr. Deputy Speaker: Order. This is for the Government and is not a point of order for the Chair.
10.43 p.m.
Mr. Hugh Jenkins (Putney): Seldom have we seen a more dramatic conversion than has taken place this evening in the attitude of hon. Gentlemen opposite to trades unions and their members. Nothing so dramatic has taken place since Saul became Paul on the road to Damascus. It is new to hear from hon. Gentlemen opposite a record of what has occurred here. I hope that my hon. Friend the Joint Parliamentary Secretary has taken note of it, because it was an entirely accurate record, taken in large part from a hand-out issued by A.S.S.E.T.
Mr. Maurice Macmillan: That is true, but I checked it with a speech made by the then Parliamentary Secretary to the Ministry of Health, and it tallied in every detail, except for a minor point about when the dispute started. I wish that the hon. Gentleman or some other representative of the Ministry were here to listen to the debate.
Mr. Jenkins: I am not criticising the hon. Gentleman for taking note of a trade union publication—I am praising him for doing it. I am certainly saying that this is an unusual development, but of course it is a welcome development because conversion, however belated, must always be welcomed. We must give thanks for this.
But I would not have known, to listen to the hon. Gentleman the Member for Farnham (Mr. Maurice Macmillan), that the Motion to which he referred—the Early Day Motion put down by his hon. Friend the Member for Richmond, Surrey (Mr. A. Royle)—was not exactly in the highly encouraging terms which he has been able to use tonight. I am delighted that the situation has now changed, and that hon. Members opposite see that there has occurred here something which in my view is a miscarriage of justice.
Many of the 180 limb-fitters live in my constituency. They work at the limb-fitting centre attached to Queen Mary's Hospital at Roehampton. They are of the finest type of British craftsmen, and they are a great deal more

1409
than that, as I shall show. I will say something of their work in a moment, but I should also like to say that these responsible men also contribute to the community in their leisure time. Some serve on local authorities as aldermen or councillors; some serve in other ways, such as youth leaders. One of the chief fitters recently received an honour which was recognised as a tribute to the group as a whole. So we are dealing here not with a bunch of irresponsible persons but with a very responsible group of people.
To lose a limb is a disaster which only the strongest of personalities can survive undamaged, and many of those who undergo this loss remain in a state of great distress. This is why the limb-fitter is more than a craftsman, even more than a technician. He has to be a psychologist of great delicacy and skill, for he is handling men, women and children; he is literally handling the maimed.
Let me ask the hon. Gentleman who is going to reply to the debate what more responsible work is there than that? Who deserves higher esteem, and who should be more richly rewarded?
There are, of course, rich rewards in this field, but they do not go to these men. They go to their employers who are contractors to the Ministry of Health and most of whom are wholly-owned subsidiaries of the International Vokes Engineering Group. But the cost of increases in these men's wages does not fall on their wealthy employers; it falls on the Ministry of Health.
The employers have negotiated the sort of agreement that any contractor might envy, in which, if they increase wages they get the increase back from the Ministry of Health. It might be thought that this would work to the advantage of the men, but it has not because the Ministry has influenced the employers to the contrary.
What these men—and their union—say is this. Their skill and the duties which they perform are under-valued both in status and remuneration. The reasons for that are to be found in the ambivalent attitude which the community brings to those who are maimed.
At one time doctors were butchers, dentists were barbers and opticians were quacks. All these have succeeded in making the jump into professional status
1410
because they treat the community as a whole. The limb-fitters have failed to do so because their skill is confined to an area which, on the whole, the community does not want to know about.
If we all needed the attention of limb-fitters they would be the highest paid and most esteemed professional people in the community. They would not be employed by contractors, nor forced to work in factory-line conditions. The limb-fitter—or prosthetist as they would like to be called-receives a doctor's prescription, examines the patient, measures, discusses, orders the limb and then keeps with the patient until there is satisfaction, or if there is no satisfaction he still stays with him because there is no where else to go. This is an important factor, because the limb-fitters and the limbless men form, together, a community of interest and a strong bond. Many limbless people signed petitions in support of the claims of the limb-fitters.
The attempt made in the Press to drive a wedge between the limbless people and these men was thoroughly discreditable.
Sir Harmar Nicholls (Peterborough): This is an occasion when my hon. Friends and I agree with the hon. Member. Will he suggest that the Government Whip tries to get a Member representing the Ministry of Health here? The hon. Member has referred to the Ministry of Health twice, and to the part that it has played. He ought to ask for a Minister from that Ministry to be present.
Mr. Jenkins: I hope to persuade my hon. Friends on the Front Bench not to oppose the Prayer, or at least to give some undertakings in connection with it. They are capable of listening to what I am saying and also, if not of changing their minds themselves at least of advising their right hon. Friends to change theirs.
As I have said, the relationship between the limb-fitters and the limbless is akin to that between a doctor and his patient. These men must be highly qualified not only in the technique of their job but also in anatomy, and must be able to translate their skills into forms acceptable to a crippled old person. a deformed child, or a young woman who may feel that life is no longer worth living. This is a very high quality of skill. Some of these men have been abroad to lecture,

1411
and people from other countries come to Roehampton to learn how this job is done.
This is a sphere in which this country stands high, but the conditions in which these men have to work in Roehampton leave much to be desired. There are the children crippled by thalidomide, whose limbs have constantly to be changed as they grow up. New responsibilities are constantly being required of these men by our times. At present each man is required to handle far too many patients. This has led to a situation in which each one tries to deal with several patients at once—as though a dentist had six chairs and had to run from one to the other. That is a fair comparison with what occurs at Roehampton.
In March last year the men decided, through A.S.S.E.T., to make an endeavour to achieve a substantial improvement in their position and status. If they are compared with skilled technicians and engineers they are underpaid by at least £250 a year, and the extra qualities and skills they require are not required by technicians in other fields.
There are about 700 craftsmen at Roehampton, and 50 limb-fitters. The 50 limb-fitters are the most skilled of all. They are the top of the pyramid. This claim is not on behalf of the 700 craftsmen; it is only on behalf of the 50 limb-fitters at Roehampton, or the 180 in the whole country. The freeze was not on when this claim was made. The increase of £100 a year was an interim settlement, instead of the substantial settlement which the men wanted, but the freeze went on and the management did not honour the agreement. After a further abortive meeting the men started to work to rule on 2nd September.
To understand this decision is not to approve it, but it can be easily understood when one considers the objections the men have made for years about the conditions under which they have to serve patients at Roehampton. They rightly object to the Ministry of Health's appointments system, which subjects patients to long waits and forces the men to deal with as many as six patients at a time and sometimes more. Their disappointment over the claim was the last straw. Some hon. Members will have seen an
1412
article in the New Statesman by a limbless man objecting to the abuse that had been poured on the limb-fitters, and pointing out that they were protesting not only on their own behalf but on behalf of their patients, who are subjected to scandalous conditions at Roehampton.
I warmly endorse the conclusion of that article, which is that the men should be employed by the Ministry of Health and not by a private contracting firm, and should be given the status and pay which their skills justify. In all other advanced countries, the conditions which the Roehampton
men enforced by working to rule are the normal practice. Some patients welcomed the individual attention which they received for the first time, while others naturally resented the long waits, some even having to go home and return on another day.
A further meeting with the union took place and eventually a settlement was agreed of £2 a week from 1st January, 1967. The settlement was announced in the House by
the Minister of Health, with no suggestion that it would not be honoured. That was on 5th December, and the agreement was honoured, but, in January, the Minister of Labour referred this completed agreement to the Prices and Incomes Board, and the First Secretary topped the whole thing off by making an Order preventing the further payments of the increase, after they had received it for four or five weeks. This is the Order now before the House.
These men are being subjected, if not to victimisation, at least to gross mistreatment by the Government. The reason that the Government have acted in this deplorable manner is threefold. First, they are affected by the hostile propaganda against these men by the Press. They have allowed their proper sympathy with the limbless to be channelled into hostility against the limb-fitters. Some hon. Members have been similarly affected.
Second, the case is seen as a challenge to the prices and incomes policy. Third, they resent the non-co-operation of A.S.S.E.T. and its General Secretary, Clive Jenkins, and are determined to show him who is boss. I know this to be the case because the question of whether or not the limb-fitters deserve the increase is the last thing which Members of the

1413
Government refer to in speaking of this matter. They are not concerned with justice, but just want to win.
I am not content that my constituents should be treated in this way. The case illustrates that the Government do not have the mechanism to run a fair wages policy. These men have been selected for this treatment because the case came to public notice. Meanwhile, other unions—and indeed A.S.S.E.T. itself—have negotiated increases which are currently being paid. At least 41 negotiated by the same union as in this case are being paid. In many cases, I am sure, these increases are no better or more socially justified than this increase, but simply have not been noticed. The machinery is not there to notice them.
But there is no justice or reason in penalising those whose work is in the more important and sensitive areas and allowing those who do less publicly important work to receive increases. This case illustrates that the Government do not know what they are doing. My right hon. Friends the Ministers of Labour and Health and the First Secretary are like three bulls thrashing about in the delicate, complex and multifarious china shop of industrial negotiations. They are doing infinite harm.
They are not motivated by a determination to make drastic readjustments. In the remuneration of the various sections
of the community in a fairer and more Socialist direction. If they were, they would get full support and incidental injustices would be tolerated. But they are not doing that. They are doing the opposite. The tendency seems to be that the more wealthy are becoming wealthier, whereas those who deserve most from the community are not getting their desserts. The "spivs" are thriving.
This is not what the Government should be doing. It is because I know that these men should not be further harassed but should be allowed to receive the increase which their employers are willing to pay that I shall not be able to support the Government in the Lobby tonight. I urge my hon. Friend to throw his brief away and to recognise that it is not always the back benchers and the trade unionists who are wrong. The Government, too, can make mistakes. Let my hon. Friend have the grace to recognise
1414
that this is one of them and announce that the Order will be withdrawn.
It would be a great day not only for the limb-fitters but for the Government if they could but say that. But if they persist in their error, it would be wrong for those of us who see that they are mistaken to emulate their myopia by supporting it in the House. If we tolerate small injustices like this—which is easy—we shall encourage the Government to larger errors; if we do that we shall do them a great disservice. For their own good, it is desirable that my right hon. Friend should be prevented from inflicting this injustice on a very long-suffering group of people as well as on the limbless. I fear that if the Government are obdurate, there will be art explosion of righteous indignation at Roehampton in which the chief sufferers will be those who have suffered too much already.
I therefore appeal to the Minister to have the courage to change his mind. I do not necessarily urge any of my hon. Friends to do what I feel that I must do tonight. I shall take this action because I know these men personally, because I know their case personally and because they are my constituents. I strongly believe in their case. However, each hon. Member must use his own judgment. For my part, I urge my hon. Friend to change his mind and concede to the limb-fitters this belated and inadequate recognition of their true worth to the community. But if he will not do that, then I regret that I will not be able to follow him into the Division Lobby tonight.
11.1 p.m.
Mr. Anthony Royle (Richmond, Surrey): I congratulate the hon. Member for Putney (Mr. Hugh Jenkins) on having made an excellent speech. He is showing great courage and the whole House admires the support which he is giving to his constituents. I hope that he will go a step further and not just abstain but vote with us against the Government. My hon. Friend the Member for Farnham (Mr. Maurice Macmillan) skilfully detailed the background to this Order, as did the hon. Member for Putney, so that there is no need for me, at this late hour, to go into the history from the beginning.

1415
I first became involved, and raised the matter in an Adjournment debate on 18th November last, after my local newspaper in Richmond had been asked, at an early stage in the affair, not to print the details of the dispute that was then taking place in view of the damage that the publicity might do. As a result of that request, I became involved. The limb-fitters were working to rule at that time. They had started working to rule on 2nd September and that had caused a great deal of distress to many disabled people, as the House already knows.
It has also been pointed out that very few people were involved in the actual dispute. At the limb-fitting centre in Putney only about 28 men were involved and I believe that, with one exception, and he is a constituent of mine, all of them are constituents of the hon. Member for Putney. Only 170 to 180 men in total throughout the country were involved.
I shall never forget the appeal which was made by the then Minister at the conclusion of the Adjournment debate which I initiated. The then Parliamentary Secretary to the Ministry of Health stated:
"I would ask the general secretary of A.S.S.E.T., whose great humanity and understanding I know, to influence, in the name of humanity, the ending of this dispute. I would appeal to the fitters at the centre, whatever dispute they may have with the Government and their economic policy. 'Please see to it that the patients who rely on you and us do not suffer in the way in which they are suffering now'".—[OFFICIAL REPORT, 18th November, 1966; Vol.736, c.901]
That appeal was made by the then Parliamentary Secretary. I am glad to see that the present Parliamentary Secretary has joined us. I thought it strange that he was not in his place at the beginning of this debate, but I have no doubt that there is a certain amount of feeling between the Ministry of Health, the Department of Economic Affairs and the Ministry of Labour regarding the handling of this case.
The Parliamentary Secretary to the Ministry of Health (Mr. Julian Snow): I assure the hon. Gentleman that I am, neither physically nor temperamentally, a blushing violet. I had hoped that he would have done me the courtesy of understanding that I had other work
1416
to do. I thought that I was well within my duty in leaving this matter in the competent hands of my hon. Friend the Joint Parliamentary Secretary to the Ministry of Labour, who has the Departmental responsibility.
Mr. Royle: Far be it for me to argue with the hon. Gentleman. I am sure that he is aware that his duty to the House of Commons comes before all other duties. At any rate, I am glad to see him in his place now. Following the Parliamentary Secretary's appeal, a settlement in this case was finally agreed on 2nd December, and a great deal of work was done by the present Minister of Health to bring about that settlement.
The settlement was for an increase of £2 a week to take effect from 2nd January of this year. The employers were willing to backdate that award to 1st May, 1966. I well remember the Minister of Health announcing this to the House, and the cheers with which that announcement was greeted, and which greeted the success of the Ministry of Health and the forbearance and cooperation which the limb-fitters and A.S.S.E.T. displayed in reaching that agreement with Messrs. Hanger and the Ministry.
Then what happened? The Department of Economic Affairs immediately started to meddle. The matter was first referred to the Prices and Incomes Board, and then the Secretary of State produced his freeze Order, which we are now discussing. Why have Ministers in the Department of Economic Affairs been so dogged in dealing with this dispute in such a cruel and unnecessary way? Only 180 men are involved in the whole of the country—28 at the limb-fitting centre at Roehampton. The cost, as already mentioned by my hon. Friend, is small—£360 a week or about £18,000 a year. It is a very small amount.
On 9th February last my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), in a supplementary question to the Secretary of State, asked:
"Is not the total amount involved absolutely trivial in terms of the national economy or in relation to the amounts at stake in respect of electrical contractors and the agricultural workers? As these men are specially skilled men, limited in number, who do a vital job of work for disabled people is it not very petty

1417
to invoke this great instrument with criminal penalties to stop the increase which their employers want to give them"?—[OFFICIAL REPORT, 9th February, 1967; Vol.740, c.1809.]
I think my right hon. Friend summed up the situation very well.
Mr. Alexander W. Lyon (York): In the cases which the hon. Gentleman has mentioned there were references to the Prices and Incomes Board before the increases were announced. All that is being asked of the limb-fitters is that they should have awaited the report of the Prices and Incomes Board. Why is it so disgraceful to ask them to wait those few more weeks, perhaps, before the report comes out?
Mr. Royle: The hon. Member says that all that is being asked of these limb-fitters is that they should wait longer, but this case has been going on for eight or nine months. They have already been waiting eight or nine months because of the freeze. These men have been treated shabbily for months, and the hon. Member's attitude is typical of the attitude of the Government Front Bench.
I have spent a lot of my life in the insurance industry—in Lloyds of London—and one thing I have always been taught there is that one's word is one's bond. When a Minister on behalf of Her Majesty's Government gives his word in respect of an agreement that has been perfectly fairly reached round the table with the trade union and then goes back on it it is a disgraceful action. This is what has happened. It is a shabby and dishonourable action on the part of Her Majesty's Government.
We have already seen that the then Parliamentary Secretary to the Ministry of Health has now been switched to another Ministry. Otherwise, his personal position must have been very difficult. I wonder at the personal position of the Minister of Health. After all, his honour was committed in reaching that agreement with the limb-fitters, yet he still remains as Minister of Health. I think that in view of the action taken by his colleagues in the Department of Economic Affairs the right hon. Gentleman should look very carefully at his own position.
In the Adjournment debate last year, I attacked the behaviour of the limb-fitters in working to rule, and I gave details of the distress being caused to
1418
many disabled people as a result of that work-to-rule. I now consider that the limb-fitters have behaved with great restraint. I say that frankly tonight. In the early days, they should not, in my view, have worked to rule. However, they then reached agreement with the Ministry of Health, an honourable agreement, and they have now been let down by the Government. These skilled men have behaved with great restraint over the last few weeks since that agreement was reached.
There are few hon. Members on either side of the House who would not feel extremely bitter if, having reached a fair and honourable agreement with their employers round the table and having gone away thinking that that agreement had been finalised, they then found that, as a result of action taken by other Departments, the agreement which they thought had been achieved was whisked away from in front of them.
I shall not detain the House longer because I know that there are others wishing to speak. I hope that there will be many hon. Members opposite, apart from the hon. Member for Putney who has already shown his courage tonight by defying the Government Whips, who will do as they know they should and join us in the Lobby to vote down this disgraceful Order which should never have been put before the House of Commons.
11.11 p.m.
The Joint Parliamentary Secretary to the Ministry of Labour (Mr. Roy Hattersley): In conformity with the precedent set by my hon. Friend the Member for Birmingham, Aston (Mr. Julius Silverman) in a previous debate on one of these Orders, I begin by declaring my interest. I am a member of the Association of Supervisory Staffs, Executives and Technicians I hope that that declaration of interest, as well as clearing my position with the House, will give particular validity to my first insistence, namely, that it is monstrously wrong to suggest that the Government are in some way taking a special delight in pursuing prices and incomes Orders against that union.
The simple fact is that the Government are obliged by their policy to preserve the workings of prices and incomes policy. They are obliged by their policy to conform to the regulations in the White

1419
Paper. It is a statistical consequence that those unions which choose to breach
those proposals most frequently are the ones against which most Orders are made. The relationship between the Government and A.S.S.E.T. is no more and no less than that.
What has been said this evening about the quality of workmanship, the importance of the job and the level of skill and training necessary before a man can become a qualified limb-fitter is not in dispute across the Floor. These things are not in question. There is no argument there in which it is appropriate for us to indulge. The Government accept entirely all that has been said about the men, all that has been insisted upon about their work, the special obligations they have to undertake and the special responsibilities with which they are charged. That is not what we are debating.
We are debating whether there should be a breach of the incomes policy, whether there should be a calculated breach, a capricious, random and arbitrary breach. It is no good—
Mr. John Biffen (Oswestry): Will the hon. Gentleman reflect on the use of the words "calculated and capricious"? A.S.S.E.T. itself has proudly said that there are many other instances in which the policy has been infringed. Why have no Orders been made in those instances?
Mr. Hattersley: Not only A.S.S.E.T. but other people, the hon. Gentleman among them, often proudly say—though whether pride is the appropriate emotion is a matter for dispute—that the policy has been breached. They always state it in the general and never in the particular. On those occasions when hon. Members have announced in the House—Acrow was a case in point—that there has been a breach, examination has proved that in fact there was no breach. If A.S.S.E.T. has evidence about breaches on which it is prepared to give chapter and verse, not only is it its duty to give the evidence but it would make its case a good deal more convincing if it was prepared to do so.
Mr. Biffen rose—
Mr. Deputy Speaker: The Minister is not giving way so the hon. Member must not persist.
Mr. Hattersley: The hon. Gentleman the Member for Farnham (Mr. Maurice Macmillan), in his opening speech, suggested that this was acceptable under the Government's prices and incomes policy. He said that the White Paper would allow this to go forward. I interrupted him in the hope that he would give the House details of that contention. I felt that the debate would be conducted with dispatch and clarity were he prepared to point to the White Paper and say in which terms, paragraph, clause and line this increase, negotiated with the Roehampton workers, could be allowed under the terms of the Government's policy. Unfortunately, he was unable to give a specific example. Those hon. Members who have talked this evening about the necessity and propriety of allowing this increase have made no case at all for suggesting that it could go through under the terms of the White Paper or the Government's policy.
Sir Robert Cary (Manchester, Withington): Although this might not be in line with the White Paper, for the most humane reasons such as this surely the Government have a discretionary power to breach the policy.
Mr. Hattersley: I am obliged to the hon. Member. He has conceded my initial point.
Mr. Norman Atkinson (Tottenham): Will my hon. Friend give way?
Mr. Hattersley: Not until I have answered this point. The argument is about whether there should be an arbitrary and capricious breach of policy. Hon. Members have been arguing that the policy would allow this to go through. The hon. Gentleman the Member for Manchester, Withington (Sir R. Cary) is arguing that an exception should be made. This is what I want to discuss. Nobody has given chapter and verse under which the increase could be allowed under the incomes policy.
Mr. Atkinson: On this question a breach was made for the medical profession with whom the limb-fitters work very closely. The medical profession

1421
had increases on 1st October, 1966, which was exactly midway through the freeze period. The Government took the decision to increase their rate, why is it not possible to do it for the ancillary workers?
Mr. Hattersley: If my hon. Friend will do me and the House the courtesy of reading the White Paper he will see that the Government will approve existing commitments and allow them to go forward. The doctors' increase was an existing commitment within the terms of the White Paper. This is not. This commitment was not entered into in any form or final sense until the last week of August. There is a distinction between those commitments entered into before 20th July and those entered into afterwards.
I can only say to hon. Members who want a special exception to be made in this case that the incomes policy as it stands would not allow it and I want to suggest why the Government believe that such an exception should not be made.
It is a monstrous misrepresentation to suggest that my right hon. Friend the Minister of Health somehow announced that this payment could be made. The hon. Member for Richmond, Surrey (Mr. A. Royle) actually asked a question of my right hon. Friend and he has therefore a particular obligation to quote accurately and clearly the answer he got. On 5th December my right hon. Friend did no more than tell the House what the position was. He said that agreement had been reached and that normal work had been resumed. He did not say that the agreement was within the scope of the Government's policy. He merely made an announcement of the fact that agreement had been reached.
Mr. A. Royle rose—
Mr. Deputy Speaker: The hon. Member is not giving way.
Mr. Hattersley: I will gladly give way to the hon. Member when I have finished the point I am making. The Minister of Health would be the first to say that he was in no way in a position to say that this agreement was in conformity with our economic policy.
Mr. A. Royle: I am grateful to the hon. Gentleman for giving way. I never said anything of the sort. I mentioned
1422
in my speech that his right hon. Friend the Minister of Health announced to the House that a settlement had been reached and the dispute was therefore finished. The settlement reached was the agreement to pay an extra £2 a week. The hon. Gentleman knows that as well as I do.
Mr. Hattersley: But then the hon. Gentleman went on to say that since my right hon. Friend made that announcement he was in some strange way under an obligation to resign—because he had announced a fact, because he had told the House of the position as it was at Roehampton at that moment. In fact he did not give his blessing to it or say that it was in conformity with Government policy; he simply announced what the position was at that time.
Mr. Maurice Macmillan rose—
Mr. Hattersley: I must get on. I want to come on to some of the other points that were raised.
Mr. Macmillan rose—
Mr. Deputy Speaker: Order. If the House is to use the time to the best advantage it would be better if it listened quietly to the Minister.
Mr. Hattersley: I now turn to some of the other things the hon. Gentleman said, such as the scorn he poured on the Order because it concerned only a small number of men. I disagree with that judgment, and agree much more with the point of view of the right hon. Member for Enfield, West (Mr. Iain Macleod) when he discussed another Order in the House on 13th December. In his view it was immaterial whether the number of workers affected was 30,000, 120 or only one. The important point was whether it was right in terms of equity, justice and Government policy that it should go forward.
I am happy to discuss the equity and propriety of the Order, but I want to get it clear that some of the points made are totally extraneous to the considerations of Government policy. It may well be—and the Government in no way contend anything other—that in terms of equity and justice and all the criteria laid down by the hon. Gentleman that the limb fitters of Roehampton are underpaid. It may well be that the claim that

1423
A.S.S.E.T. initially made on their behalf for a pay increase of £250 a year is justified in all abstract terms.
Because the Government were not sure what payment was justified, and because they wanted a guide and yardstick, they properly referred the claim to the Prices and Incomes Board. That was the intention of that reference. Had the union been prepared to allow the reference to go through in the normal way the unhappy events that followed need not have been brought about. I can give an assurance that, even though the Order is now in force, if the Prices and Incomes Board produces a report which says that in terms of Government economic policy, in the terms of the prices and incomes policy, that award or part of it should go through, the Government will use their powers to withdraw the Order and allow the payment to go on.
The Government are committed to and bound by whatever recommendation the Board may make. It is a great pity that the union and men were not prepared to allow that reference to take its natural course and await the report. I reiterate and make clear to all those right hon. and hon. Gentlemen—
Mr. Terence L. Higgins (Worthing): Do I understand that the Government will do whatever the Prices and Incomes Board recommends?
Mr. Hattersley: What I said was that if the Prices and Incomes Board tells the Government that the award, or part of it, or any aspect of it, is possible within the terms of Government prices and incomes policy we shall implement that recommendation.
Mr. Higgins: Did the hon. Gentleman not say that the Government were bound by whatever the Prices and Incomes Board said?
Mr. Hattersley: I have given the assurance, and I give it again, that if the Prices and Incomes Board tell the Government that part or all of the award is acceptable within the prices and incomes policy then on this specific occasion we shall be bound by that recommendation. That is why the Government viewed with great regret the original refusal of the union to have its claim adjudicated in that fashion. That is why the Government so regret the
1424
undoubted suffering, hardship and friction which came about as a result of the work to rule. That is why we were forced to make this Order, which does not limit the remuneration for ever to the levels before 20th July, but simply imposes a standstill, a pause, a period for reflection during which the Prices and Incomes Board can deliberate.
Sir Harmar Nicholls: How can the hon. Gentleman suggest that the Government have no discretion in this sense while, at the same time, saying that, in this special case, they will bind themselves to what the Prices and Incomes Board says? If it is that they can make an exception in that sense, why cannot they use their discretion to withdraw the Order?
Mr. Hattersley: I will say it again because I am sure that the hon. Gentleman will want to quote it against me. It is worth saying a third time. If the Board says that this award or part of it is compatible with the prices and incomes policy, then of course we will allow it to be honoured. I have said no more and no less than that. It is not a matter of discretion but of interpretation, of holding the line, not breaking it. It is a matter of asking the Board to see where the line is and applying that line as the Board draws it.
Hon. Members who have spoken have said, and others no doubt feel, that compassion requires the Government to break all their rules in this case. But the Government have their obligations not to go forward in what I would describe as an arbitrary fashion. We have obligations to every section of the community in equally socially important industries with an equally high social content, but where the workers have been prepared voluntarily to co-operate with Government policy.
The hon. Member for Farnham is wrong in saying that the comparison is between this Order and others made to enforce our policy. The real comparison is between these men and those sections of the economy where no Order was necessary—between these men and the police, between these men and the firemen, between these men and the teachers of handicapped children, between these men and all who may have had wage limitations imposed in a sense and who

1425
have accepted the situation in a much more real sense.
We have a special obligation to such people, and compassion and social justice require us not to withdraw this Order and thereby break the line of the incomes policy. There is an even more important point. If the great social policies, in which we on this side believe, are to be put into operation, if we are to have the compassionate services of which my hon. Friend the Member for Putney (Mr. Hugh Jenkins) spoke so eloquently, we can only have them in a healthy economy and a prosperous society. It is the judgment of the Government that such a society in a sense is dependent on the prices and incomes policy.
Mr. Maurice Macmillan: What about the special relationship of the Minister of Health in this matter? The hon. Gentleman attempted to say that the Minister had given no sort of undertaking in this matter. Surely the whole role of the Ministry of Health over this
is totally different from other, similar cases because the Minister himself was, in some sense, a party to the agreement, since the employers are contractors for the Ministry and the Ministry and the Government have prevented the contractors from meeting the original claim and reaching agreement sooner.
Mr. Hattersley: My right hon. Friend the Minister of Health is no more responsible for the actual level of remuneration and cost charges at Roehampton than any other enterprise is responsible for the costs and charges of its contractors. The prices and incomes policy is the collective responsibility of the Government. It is wrong to suggest that the Minister of Health commented or wished to comment on the validity and propriety of this award in terms of the Government's economic and prices and incomes policies.
Question put:—
The House divided: Ayes 153, Noes 226.

Division No. 284.]

AYES

[11.29 p.m.

Alison, Michael (Barkston Ash)

Fortescue, Tim

Macmillan, Maurice (Farnham)

Allason, James (Hemel Hempstead)

Foster, Sir John

Maddan, Martin

Astor, John

Gibson-Watt, David

Maginnis, John E.

Awdry, Daniel

Giles, Rear-Adm. Morgan

Marten, Neil

Baker, W. H. K.

Gilmour, Sir John (Fife, E.)

Maude, Angus

Balniel, Lord

Goodhew, Victor

Maxwell-Hyslop, R. J.

Barber, Rt. Hn. Anthony

Gower, Raymond

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

Batsford, Brian

Grant-Ferris, R.

Mills, Peter (Torrington)

Bennett, Dr. Reginald (Gos. & Fhm)

Grimond, Rt. Hn. J.

Miscampbell, Norman

Biffen, John

Gurden, Harold

Mitchell, David (Basingstoke)

Biggs-Davison, John

Hall-Davis, A. G. F.

Monro, Hector

Birch, Rt. Hn. Nigel

Hamilton, Michael (Salisbury)

More, Jasper

Black, Sir Cyril

Harris, Reader (Heston)

Morgan, Geraint (Denbigh)

Body, Richard

Harrison, Brian (Maidon)

Morrison, Charles (Devizes)

Boyd-Carpenter, Rt. Hn. John

Harvie Anderson, Miss

Mott-Radclyffe, Sir Charles

Boyle, Rt. Hn. Sir Edward

Hastings, Stephen

Munro-Lucas-Tooth, Sir Hugh

Braine, Bernard

Heath, Rt. Hn. Edward

Murton, Oscar

Brinton, Sir Tatton

Heseltine, Michael

Neave, Airey

Bromley-Davenport,Lt.-Col.SirWalter

Higgins, Terence L.

Nicholls, Sir Harmar

Brown, Sir Edward (Bath)

Hirst, Geoffrey

Nott, John

Bruce-Gardyne J.

Hobson, Rt. Hn. Sir John

Onslow, Cranley

Buchanan-Smith, Alick (Angus,N&M)

Hogg, Rt. Hn. Quintin

Osborn, John (Hallam)

Campbell, Gordon

Holland, Philip

Page, Graham (Crosby)

Carlisle, Mark

Hooson, Emlyn

Page, John (Harrow, W.)

Cary, Sir Robert

Hordern, Peter

Pearson, Sir Frank (Clitheroe)

Chichester-Clark, R.

Howell, David (Guildford)

Peel, John

Clegg, Walter

Hunt, John

Percival, Ian

Cooke, Robert

Hutchison, Michael Clark

Peyton, John

Cooper-Key, Sir Neill

Irvine, Bryant Godman (Rye)

Pounder, Rafton

Cordle, John

Jenkin, Patrick (Woodford)

Powell, Rt. Hn. J. Enoch

Crawley, Aidan

Jopling, Michael

Prior J. M. L.

Crosthwaite-Eyre, Sir Oliver

Joseph, Rt. Hn. Sir Keith

Quennell, Miss J. M.

Crouch, David

King, Evelyn (Dorset, S.)

Ramsden, Rt. Hn. James

Crowder, F. P.

Kirk, Peter

Rees-Davies, W. R.

Dalkeith, Earl of

Kitson, Timothy

Renton, Rt. Hn. Sir David

Dance, James

Knight, Mrs. Jill

Ridley, Hn. Nicholas

Dean, Paul (Somerset, N.)

Legge-Bourke, Sir Harry

Rodgers, Sir John (Sevenoaks)

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

Lewis, Kenneth (Rutland)

Roots, William

Doughty, Charles

Longden, Gilbert

Rossi, Hugh (Hornsey)

Elliot, Capt. Walter (Carshalton)

Loveys, W. H.

Royle, Anthony

Errington, Sir Eric

Lubbock, Eric

Russell, Sir Ronald

Eyre, Reginald

MacArthur, Ian

Scott, Nicholas

Farr, John

Maclean, Sir Fitzroy

Sharples, Richard

Fisher, Nigel

McMaster, Stanley

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

Smith, John

Vaughan-Morgan, Rt. Hn. Sir John

Winstanley, Dr. M. P.

Stodart, Anthony

Wall, Patrick

Wolrige-Gordon, Patrick

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

Walters, Dennis

Worsley, Marcus

Taylor, Sir Charles (Eastbourne)

Weatherill, Bernard

Wylie, N. R.

Taylor, Frank (Moss Side)

Webster, David

Younger, Hn. George

Teeling, Sir William

Wells, John (Maidstone)

Turton, Rt. Hn. R. H.

Whitelaw, Rt. Hn. William

TELLERS FOR THE AYES:

van Straubenzee, W. R.

Wills, Sir Gerald (Bridgwater)

Mr. Francis Pym and

Mr. Anthony Grant.

NOES

Abse Leo

Freeson, Reginald

Murray, Albert

Alldritt, Walter

Gardner, Tony

Neal, Harold

Allen, Scholefield

Garrett, W. E.

Noel-Baker, Francis (Swindon)

Anderson, Donald

Gordon Walker, Rt. Hn. P. C.

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

Archer, Peter

Gray, Dr. Hugh (Yarmouth)

Norwood, Christopher

Ashley, Jack

Grey, Charles (Durham)

Oakes, Gordon

Atkins, Ronald (Preston, N.)

Hamilton, James (Bothwell)

Ogden, Eric

Bacon, Rt. Hn. Alice

Hamling, William

O'Malley, Brian

Barnett Gordon A. T.

Harper, Joseph

Oswald, Thomas

Barnett, Joel

Harrison, Walter (Wakefield)

Owen, Dr. David (Plymouth, S'tn)

Benn, Rt. Hn. Anthony Wedgwood

Hart, Mrs. Judith

Padley, Walter

Binns, John

Haseldine, Norman

Page, Derek (King's Lynn)

Bishop, E. S.

Hattersley, Roy

Palmer, Arthur

Blackburn, F.

Hazell, Bert

Parker, John (Dagenham)

Blenklnsop, Arthur

Henig, Stanley

Parkyn, Brian (Bedford)

Boardman, H.

Hooley, Frank

Pavitt, Laurence

Boston, Terence

Houghton, Rt. Hn. Douglas

Pearson, Arthur (Pontypridd)

Boyden, James

Howell, Denis (Small Heath)

Pentland, Norman

Braddock, Mrs. E. M.

Hoy, James

Perry, Ernest G. (Battersea, S.)

Bradley, Tom

Hughes, Roy (Newport)

Price, Christopher (Perry Barr)

Brooks, Edwin

Hunter, Adam

Price, Thomas (Westhoughton)

Broughton, Dr. A. D. D.

Hynd, John

Price, William (Rugby)

Brown,B0b(N'c'tle-upon-Tyne,W)

Jackson, Colin (B'h'se & Spenh'gh)

Probert, Arthur

Brown, R. W. (Shoreditch & F'bury)

Jenkins, Rt. Hn. Roy (Stechford)

Randall, Harry

Buchan, Norman

Johnson, Carol (Lewisham, S.)

Reynolds, G. W.

Buchanan, Richard (G'gow, Sp'burn)

Johnson, James (K'ston-on-Hull, W.)

Rhodes, Geoffrey

Cant, R. B.

Jones, Dan (Burnley)

Richard, Ivor

Chapman, Donald

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

Roberts, Albert (Normanton)

Coe, Denis

Judd, Frank

Roberts, Goronwy (Caernarvon)

Coleman, Donald

Kelley, Richard

Roberts, Gwilym (Bedfordshire, S.)

Concannon, J. D.

Kerr, Dr. David (W'worth, Central)

Robinson,Rt.Hn.Kenneth(St.P'c'as)

Corbel, Mrs. Freda

Lawson, George

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

Craddock, George (Bradford, S.)

Leadbitter, Ted

Rodgers, William (Stockton)

Crawshaw, Richard

Ledger, Ron

Rogers, George (Kensington, N.)

Crossman, Rt. Hn. Richard

Lestor, Miss Joan

Rose, Paul

Cullen, Mrs. Alice

Lever, L. M. (Ardwick)

Ross, Rt. Hn. William

Dalyell, Tam

Lewis, Ron (Carlisle)

Rowland, Christopher (Meriden)

Davidson, Arthur (Accrington)

Lomas, Kenneth

Rowlands, E. (Cardiff, N.)

Davies, Dr. Ernest (Stretford)

Luard, Evan

Sheldon, Robert

Davies, G. Elfed (Rhondda, E.)

Lyon, Alexander W. (York)

Shore, Peter (Stepney)

Davies, Ednyfed Hudson (Conway)

Lyons, Edward (Bradford, E.)

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

Davies, Harold (Leek)

McBride, Neil

Silkin, Rt. Hn. John (Deptford)

Davies, Ifor (Gower)

McCann, John

Silkin, Hn. S. C. (Dulwich)

Davies, Robert (Cambridge)

MacColl, James

Slater, Joseph

de Freitas, Rt. Hn. Sir Geoffrey

MacDermot, Niall

Small, William

Dell, Edmund

Macdonald, A. H.

Snow, Julian

Dempsey, James

McGuire, Michael

Spriggs, Leslie

Dewar, Donald

McKay, Mrs. Margaret

Steele,Thomas (Dumbartonshire,W.)

Dobson, Ray

Mackie, John

Swingler, Stephen

Doig, Peter

Mackintosh, John P.

Symonds, J. B.

Donnelly, Desmond

Maclennan, Robert

Taverne, Dick

Dunn, James A.

McNamara, J. Kevin

Thomas, George (Cardiff, W.)

Dunnett, Jack

MacPherson, Malcolm

Thornton, Ernest

Dunwoody, Mra. Gwyneth (Exeter)

Mahon, Peter (Preston, S.)

Tinn, James

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

Mahon, Simon (Bootle)

Tomney, Frank

Eadle, Alex

Mailalieu, E. L. (Brigg)

Tuck, Raphael

Edelman, Maurice

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

Urwin, T. W.

Edwards, Rt. Hn. Ness (Caerphilly)

Manuel, Archie

Varley, Eric G.

Edwards, Robert (Bilston)

Mapp, Charles

Wainwright, Edwin (Dearne Valley)

Edwards, William (Merioneth)

Marquand, David

Walden, Brian (All Saints)

Ennals, David

Mayhew, Christopher

Walker, Harold (Doncaster)

Evans, Albert (Islington, S.W.)

Mellish, Robert

Wallace, George

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

Millan, Bruce

Watkins, David (Consett)

Faulds, Andrew

Miller, Dr. M. S.

Watkins, Tudor (Brecon & Radnor)

Fernyhough, E.

Milne, Edward (Biyth)

Weitzman, David

Finch, Harold

Mitchell, R. C. (S'th'pton, Test)

Wellbeloved, James

Fitch, Alan (Wigan)

Molloy, William

Wells, William (Walsall, N.)

Fitt, Gerard (Belfast, W.)

Moonman, Eric

Whitaker, Ben

Fletcher, Raymond (Ilkeston)

Morgan, Elystan (Cardiganshire)

White, Mrs. Eirene

Ford, Ben

Morris, Alfred (Wythenshawe)

Whitlock, William

Forrester, John

Morris, John (Aberavon)

Wilkins, W. A.

Fowlor, Gerry

Moyle, Ronald

Williams, Alan (Swansea, W.)

Fraser, John (Norwood)

Mulley, Rt. Hn. Frederick

Williams, Alan Lee (Hornchurch)

1428

1429

Williams, Clifford (Abertillery)

Woodburn, Rt. Hn. A.

TELLERS FOR THE NOES:

Williams, Mrs. Shirey (Hitchin)

Woof, Robert

Mr. Charles R. Morrison and

Winnick, David

Yates, Victor

Mr. Ernest Armstrong.

Winterbottom, R. E.

ADJOURNMENT

Resolved, That this House do now adjourn.—[Mr. Harper.]

Adjourned accordingly at twenty minutes to Twelve o'clock.

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Preamble
The House met at half past two of the clock, The LORD CHANCELLOR On the Woolsack.
Prayers—Read by the Lord Bishop of Birmingham.
The Lord Cromwell—Sat first in Parliament after the death of his father.

SELECTIVE EMPLOYMENT TAX REFUNDS
2.35 p.m.
EARL FERRERS: 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 why those who process and pack poultry are entitled both to a refund of the selective employment tax and to the premium, whereas those who process and pack vegetables are entitled only to the refund but not to the premium.]
THE PARLIAMENTARY SECRETARY, BOARD OF TRADE (LORD WALSTON): My Lords, entitlement to premium or refund under the Selective Employment Payments Act 1966 depends upon the category in which the activities of any establishment are classified in the Standard Industrial Classification. The processing of poultry, which usually involves a series of operations to convert the live bird into a packed product, is regarded as manufacturing for the purposes of this classification. The processing of vegetables is also regarded as manufacturing if preservation by canning, bottling or quick-freezing is involved. Both processes attract premium. If, however, the processing of vegetables simply involves preparation for sale, it is regarded as a part of wholesale distribution which attracts neither premium nor refund. When the preparation and packing of vegetables is carried out by the producer himself it is regarded as part of his agricultural or horticultural activities and qualifies for refund. In the same way, the preparation of poultry for
1318
the market, if undertaken by the producer himself, would normally qualify for refund.
EARL FERRERS: My Lords, would the noble Lord agree that the complexity of the Answer which he has just given indicates that some more uniform method of application of the selective employment tax is highly desirable?
LORD WALSTON: No, my Lords. I would suggest that the Answer I have given is an extremely simple and straightforward one. Any complexity—and there is complexity—arises in the variety of processes and the forms in which they can be carried out on the farm, in the agricultural enterprise, in the factory, in the retail establishment, or wherever it may be.
EARL FERRERS: My Lords, what happens if a manufacturer of pre-cooked meals wishes to put both poultry and vegetables into the same packs? Does he get a premium or only a refund?
LORD WALSTON: My Lords, a manufacturer is classified as a manufacturing enterprise and receives the appropriate treatment.

STAMP DUTY ON FOREIGN TRAVELLERS' CHEQUES
2.38 p.m.
LORD REDMAYNE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they will introduce legislation to provide for the collection of stamp duty on foreign travellers' cheques by means other than adhesive stamps.]
LORD BOWLES: My Lords, I understand that the noble Lord has already made this suggestion in a letter to my honourable and learned friend the Financial Secretary to the Treasury and the matter is under consideration.
LORD REDMAYNE: My Lords, while thanking the noble Lord for that reply, may I ask him to press the Treasury to ensure that the clause necessary for this quite small reform is included in this year's Finance Bill?
LORD BOWLES: My Lords, I am sure my honourable and learned friend will take notice of what the noble Lord has just said.

ADEN: FORCES' TOUR OF DUTY
2.40 p.m.
LORD GRENFELL: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what is the present tour of duty for a battalion in Aden.]
THE MINISTER WITHOUT PORT-FOLIO (LORD SHACKLETON): My Lords, the battalions now in Aden are on a tour of duty of about nine months, except for one which is on a tour of seven months.
LORD GRENFELL: My Lords, I thank the noble Lord for his Answer. Can he tell me how long the battalions now in Aden have been stationed there? Secondly, while paying sincere tribute to the troops in Aden, may I ask, in view of the mental and physical strain of the present emergency, whether the Minister will consider more frequent relief than would otherwise be customary?
LORD SHACKLETON: My Lords, I am not sure whether I can tell the noble Lord exactly how long each battalion has been in Aden. Certain of them are due to be relieved. For instance, the 3rd Royal Anglians are due to be relieved in May, when they will have done only seven months' duty there. But they are being relieved in May because this follows a tour overseas elsewhere. The 1st Royal Northumberland Fusiliers are due to leave in June. I could go through the list, but most of the infantry units there now are due either to go home and be relieved, or to go home. A number are, in fact, being relieved by other units some time in the course of this summer.
As regards the ardousness of duty in Aden, which I think was the second part of the noble Lord's supplementary question, it is the view of the Government, which I share, that the tour is not too long. There is no doubt about the arduousness of the task of countering organised terrorism, which is a particu-
1320
larly unpleasant, worrying and thankless task; and it is not made any easier by unfounded allegations about their conduct.
SEVERAL NOBLE LORDS: Hear, hear!
LORD SHACKLETON: As I am sure your Lordships would agree, they are behaving with great courage and restraint, and, I believe, effectiveness.
LORD GRENFELL: My Lords, I thank the noble Lord for his answer.

DECIMAL CURRENCY: THE POUND UNIT
2.43 p.m.
THE EARL OF DUNDEE: 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, in view of recent expressions of opinion in both Houses of Parliament on decimal currency, whether they will consult representative business, industrial professional and consumers' organisations before irrevocably committing themselves to a 20s. main unit.]
THE LORD PRIVY SEAL (THE EARL OF LONGFORD): My Lords, this task was carried out carefully and comprehensively by the Halsbury Committee, which was appointed by the previous Government. All the relevant evidence was taken into account by the Committee, and the Government gave full weight to the opinions which had been expressed before they took their decision. No new considerations have been put forward, either in general discussion or in the debates to which the noble Earl refers.
THE EARL OF DUNDEE: My Lords, I thank the noble Earl for his reply, but is he bearing in mind that the White Paper was published only just before Christmas? Is it not usual, and wise, when a decision of such magnitude is about to be taken, that the Government should consult the people in the country who know most about it, outside as well as inside the City of London? And can the noble Earl say whether, since the White Paper was issued, any representations have been received by the Government from industrialists, chambers of

1321
commerce, trade unions and consumer organisations?
THE EARL OF LONGFORD: My Lords, I could not answer the last question without notice, but may I submit to the noble Earl that the Government's decision in principle was announced in March last year, two and a half years after the Halsbury Committee had reported. So that there had been wide opportunity, both while the Committee were sitting and taking evidence and during the three years that elapsed before the White Paper was issued, to take into account all these considerations.
THE EARL OF DUNDEE: I appreciate that, my Lords, but is the noble Earl aware that the Chancellor's announcement on March 1 last year was made as a kind of momentary diversion, in the middle of his pre-Election Budget statement, at a time when many people's minds were a little preoccupied with other matters?
THE EARL OF LONGFORD: My Lords, I am not aware of that. I should regard it as a rather frivolous comment.
BARONESS BURTON OF COVENTRY: My Lords, does the noble Earl realise that there are people who are very disturbed about this decision, and is he aware that had the Halsbury Committee been sitting to-day they might possibly have felt that times have changed? Is he further aware that those of us—and I speak for myself—who would wish to support the Government are disturbed at the attitude the Government are taking by implying that the opposition comes from people whose views are really not worth considering, and that this is just not the case?
THE EARL OF LONGFORD: My Lords, I am very glad that the noble Baroness is strongly supporting the Government, in spite of any indications to the contrary.
BARONESS BURTON OF COVENTRY: No; what I said was that I "would wish to".
THE EARL OF LONGFORD: I gather, then, that she would wish to, and that there is still a reasonable chance of her doing so. I would fall back on the wise words that flowed from the noble Earl, Lord Halsbury—and nobody could
1322
accuse him of any Party bias—who in our last debate on this matter said:
"We are merely talking about a factor of two in the size of the major unit, and it is not an issue on which any man should express intemperate opinions."—[OFFICIAL REPORT, 30/1/67, col. 831.]
Very humbly and respectfully, I submit that to the House this afternoon.
BARONESS ELLIOT OF HARWOOD: My Lords, is the noble Earl aware of the fact that the Decimal Currency Action Committee now has 16 organisations supporting it, among which are retail, distributive, manufacturing, commercial and transport interests? Will the noble Earl ask the Government to be kind enough to consult these representatives, who represent many millions of people in all these different fields?
THE EARL OF LONGFORD: My Lords, the Government—in fact Governments, both the last Government and this one—have now been considering this matter for over three years, and there comes a time when a Government must reach a decision. The decision has been reached. We shall always be very glad to hear from all these excellent people, but a decision has been reached.
LORD CARRINGTON: My Lords, does the noble Earl realise that this is not a Party question at all? There are differing views on both sides of the House. Does it follow from what he has said that the Whips are going to be on, both in another place and here, on Government supporters to support the decision?
THE EARL OF LONGFORD: I am sorry that the noble Lord should have introduced the question of Party. I said nothing whatever about it.
LORD CARRINGTON: The noble Earl did.
THE EARL OF LONGFORD: What did I say about Party? I give way to the noble Lord.
LORD CARRINGTON: The noble Earl quoted Lord Halsbury as saying that this was not a Party issue, and rather rebuked my noble friend.
THE EARL OF LONGFORD: My Lords, clearly, as usual, I have failed to make myself sufficiently articulate. I

1323
did not wish to introduce Party considerations at all. I quoted the words of the noble Earl, Lord Halsbury, who is a completely non-Party figure, in order to remove any sort of Party suggestion. This is not a question of Party consideration, but the Government have to reach a decision, and having reached the decision they must see it through.
LORD REDMAYNE: My Lords, why did the noble Earl quote the noble Earl, Lord Halsbury, as saying that opinion expressed against the pound unit was intemperate? Is he therefore suggesting that all the multiplicity of opinion which is now being expressed is intemperate? Will he not understand, on behalf of the Government, that it is useless to use the argument that public opinion did not greatly express itself last March or thereafter, since public opinion regards this matter as something that is going to happen in the long-distant future, in 1971, and therefore it is only now, when the subject has become topical, that public opinion is expressing itself? Will not the Government listen to that opinion?
THE EARL OF LONGFORD: My Lords, I am sorry that I have made myself so completely misunderstood. I simply brought in someone who might be regarded as non-Party in order to indicate that I thought this was not in any way a Party question. If noble Lords have come here to-day determined to fasten some Party attitude on me, I would only suggest that there was nothing in what I said to support that position.
May I answer the point put by the noble Lord, Lord Redmayne? He made a very powerful speech on this question a short while ago and, with great respect, I would point out that we had a debate on it just over a month ago, and I do not think the House will want to debate it again to-day. There is a Bill now before the House of Commons, which is another reason perhaps for not wanting to go into this subject at great length. But if we are talking of public opinion, may I remind your Lordships that the noble Lord, Lord Redmayne, did say, only a month ago [OFFICIAL REPORT, 30/1/67, col. 800]:
"…if you put the question to those who have had no reason to give the subject great thought—and they are, after all, the vast
1324
majority of the people—they would express precisely the same sentiment"
in favour of the pound. Therefore, while I am putting what I believe to be the expert point of view, if we are going to judge by public opinion, the noble Lord concedes that it is in favour of the pound.
LORD CARRINGTON: My Lords, if this is not a Party question, why do the Government not allow a free vote?
THE EARL OF LONGFORD: The noble Lord is quite aware of the answer to that one. Many issues are not Party questions—one might say that the Common Market is not a Party question. There are all sorts of questions which are not Party questions, but finally the Government of the day have to make up their mind. When that point is reached, they have to see it through. The noble Lord is perfectly aware of that position.
THE EARL OF SWINTON: My Lords, may I put this question to the Leader of the House? If it is necessary, contrary to what a great many people on his side and on the other sides think, to discipline the noble Earl's Party and Parliament on what are Party matters, is the Government's dictatorial attitude really going so far as to say that when there is something very like unanimity—at any rate, obviously a great majority opinion—in all parts of both Houses that a matter which the noble Earl admits is not a Party one requires reconsideration, that opinion is to receive no consideration?
THE EARL OF LONGFORD: My Lords, I always defer to the noble Earl on any matter of experience and wisdom. But here I am bound to think that he comes under the censure of the noble Earl, Lord Halsbury (whom we all respect so much), for his use of "intemperate" language. There is no question of unanimity in this matter. The noble Lord, Lord Redmayne, who has made such a speciality of this question concedes that the vast majority of the British people at this moment would favour the pound unit.
LORD REDMAYNE: My Lords, if I may take up that point of the noble Earl, that was precisely the point of my supplementary. There was no urgency in the mind of the people on this matter, because they regarded it as being a long way off

1325
—in 1971. But now that it has become topical, public opinion is aroused and the Government should pay attention to it.
THE EARL OF LONGFORD: My Lords, if I were not a rather biased participant in these discussions, I should venture to suggest to the noble Lord that he was making a speech.
LORD SALTOUN: My Lords, may I ask the Government to consider this point, which might help them very much? Will they publicly change their mind and then see the outcry which will come in favour of the pound unit?
LORD SOMERS: My Lords, in view of the differences of opinion on this subject, does not the noble Earl consider it a little disappointing that, when my noble friend Lord Sinclair of Cleeve produced a very effective compromise between the two systems, he received no reply whatsoever from the Government speaker?
THE EARL OF LONGFORD: My Lords, I should not like to criticise in any way any proposals which flowed from such a great industrial expert as the noble Lord, Lord Sinclair of Cleeve. But I would repeat that the Halsbury Committee reported in the autumn of 1963, so there was plenty of time for compromises before 1967.
BARONESS STOCKS: My Lords, would it not be expedient, from the point of view of public relations, at a time when the Government have been accused, rightly or wrongly, of "steam-rollering", to allow a free vote on a matter which does not raise any question of social justice or Party policy?
THE EARL OF LONGFORD: My Lords, I was not quite sure when the noble Lady began which side she was on, but I gather she is not on the side of the Government. Is that right?
BARONESS STOCKS: My Lords, I am very much on the side of the Government. I want their public relations to be as good as possible.
THE EARL OF LONGFORD: My Lords, I am very grateful to the noble Lady for calling my attention to the need for better public relations. But may I say that this is an important economic issue;
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and it is one that should be determined in the interests of the ultimate welfare of the British people, and not, if I may say so with great respect, in the interests of the public relations of any particular Government.
LORD AIREDALE: My Lords, if they have not already done so, will Her Majesty's Government consult the foreign bankers with regard to the international aspect of this matter, bearing in mind that this is something which the Halsbury Committee did not do, the Halsbury Committee having been told by the Bank of England that it was no use consulting foreign bankers because different foreign bankers might give different replies?
THE EARL OF LONGFORD: My Lords, I do not think that the noble Lord's suggestion would help the cause of those who favour the smaller unit. We are told that the opinion would be likely to be in favour of the pound unit. But, seriously, to say at this time of the day that we have to go back and consult foreign bankers, would be, I think, a derogation from our own British strength.
LORD AIREDALE: But the foreign bankers have not been consulted so far, because the Bank of England persuaded the Halsbury Committee not to consult them.
THE EARL OF LONGFORD: My Lords, I cannot say off-hand whether they have or have not been consulted. But there is no doubt whatever that those concerned with international trade have been thoroughly consulted.
LORD HARLECH: Yes, my Lords, but since the Halsbury Committee reported has it not become very clear that this idea that foreign bankers might take flight from the pound because it was a 10s. unit rather than a pound unit is now not supported by anybody?
THE EARL OF LONGFORD: My Lords, I am not sure whether there is a clash between the noble Lords. The noble Lord, Lord Airedale, seeemed to be stressing the need for our looking at the international aspects of the matter, but in fact he is well aware that the Government consider that the arguments in favour of the course proposed are both international and national, and in each case

1327
all those most relevant have at some time been consulted.
LORD HARLECH: My Lords, did I not understand the Chancellor of the Exchequer to say that he no longer laid any stress on the international argument?
THE EARL OF LONGFORD: My Lords, I do not think that is right. I think he said that more stress is now laid on the national aspect.
LORD CONESFORD: My Lords, since the noble Earl the Leader of the House has said in answer to most of the supplementaries that he is not quite sure whether or not the questioner is on the side of the Government, may I ask him this question? Does he not think it possible that some of the Socialist Back-Benchers are on the side of the Government; and if he thinks that possible, why should their request for a debate before the Second Reading comes up be ignored?
THE EARL OF LONGFORD: My Lords, I gather that is intended to be ironical, but, frankly, I do not think it is a contribution to this discussion. May I, with very great deference, suggest to the House that I have been given quite a good run around, as one might say, and that we might perhaps now pass on to the other business.

LINER TRAINS
LORD BOWLES: My Lords, at some convenient moment after 3.30 p.m., my noble friend Lord Hughes will be making a Statement upon open terminals for liner trains.

PARLIAMENTARY COMMISSIONER BILL
2.57 p.m.
Report of Amendments received (according to Order).
Clause 5:
Matters subject to investigation
5.—
(4) Nothing in this section shall be construed as authorising or requiring the Commissioner to review by way of appeal any decision taken by a government department or other authority in the exercise of a discretion vested in that department or authority.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved to leave out subsection (4). The noble and learned Lord said: My Lords, I beg to move the first Amendment on the Order Paper, to leave out subsection (4) of Clause 5. This arises out of Amendments moved by the noble Lord, Lord Wade, and the noble Lord, Lord Airedale, on the Committee stage, when the noble Lord, Lord Wade, said that he would prefer to see subsection (4) taken out altogether; he would be happier if it were not in the Bill at all. He said:
"I am anxious that the Commissioner should be free to investigate where he thinks fit, and I am not sure that that is quite clear at the moment."—[OFFICIAL REPORT, 21/2/67, col. 676.]
The noble Lord, Lord Harlech, said:
"I think we all appreciate that the Parliamentary Commissioner cannot become a sort of Court of Appeal against every ministerial decision. This would make Government impossible. But also we are anxious—and here I agree with my noble friend—that Departments or Ministers should not avoid investigation simply by declaring that the decision they had taken was one which was in exercise of the discretion vested in them by Act of Parliament".—[col. 679.]
I also said that I thought it was clear what we all wanted. On the one hand, we wanted the Commissioner, whether or not at the end of the day there was a question of discretion, to be perfectly free to investigate; while, on the other hand, if, having investigated, he found that there was no maladministration at all he was not to be a one-man Court of Appeal from a question of policy or discretion vested in a Minister by Parliament.
I ventured to express the view that the subsection was, perhaps, open to misinterpretation in the clause in which it

1329
was in the Bill, because everything else in the clause was a statement as to when the Commissioner could investigate and when he could not. I was therefore a little apprehensive about the fact that where in such a clause you find a subsection which says that the Commissioner may not review something, it might, rightly or wrongly, be argued that, being in a clause the marginal note to which is Matters subject to investigation, with everything else in the clause defining his sphere of investigation, the effect was that when at the end of the day there was a discretion there could be no investigation.
I said that it would be my intention, if those Amendments were withdrawn, to move on the Report stage, first, an Amendment deleting this subsection, and then, in a later part of the Bill, an Amendment to insert a clause to make it clear that where, having investigated, the Parliamentary Commissioner was satisfied that there was no maladministration it was not for him to review on the merits a decision taken in the exercise of a statutory discretion. This is what this Amendment and Amendment No. 7 do, and I naturally move this Amendment on the footing that Amendment No. 7 will be accepted, but no doubt we can argue No. 7 when we come to it. I hope that this Amendment will therefore be a popular choice. I beg to move.
Amendment moved—
Page 4, line 10, leave out subsection (4).—(The Lord Chancellor.)
BARONESS BURTON OF COVENTRY: My Lords, may I say very humbly to the noble Lord the Lord Chancellor that, as a layman, I am very glad he has withdrawn this subsection? I am not dealing now with the later Amendment, of course; but during the Second Reading debate, speaking for people with no legal knowledge, I said I found this subsection very difficult to understand, and I should like to express my very great appreciation to the Lord Chancellor for withdrawing it.
VISCOUNT COLVILLE OF CULROSS: My Lords, I think that the suggestion of the learned and noble Lord the Lord Chancellor was that we should take this Amendment fairly shortly, and should discuss the substitute for it at whatever length the House thinks fit when we come to Amendment No. 7. If that is so,
1330
then I do not wish to say anything at this stage, but will reserve any remarks I might have until the discussion on the later Amendment.
On Question, Amendment agreed to.
Clause 10:
Reports by Commissioner
10.—
(3) If, after conducting an investigation under this Act, it appears to the Commissioner that injustice has been caused to the person aggrieved in consequence of maladministration and that the injustice has not been, or will not be, remedied, he may, if he thinks fit, lay before the House of Commons a special report upon the case
(4) The Commissioner shall annually lay before the House of Commons a general report on the performance of his functions under this Act and may from time to time lay before that House such other reports with respect to those functions as he thinks fit.
(5) For the purposes of the law of defamation, any such publication as is hereinafter mentioned shall be absolutely privileged, that is to say—

(a) the publication of any matter by the Commissioner in making a report to the House of Commons for the purposes of this Act;

(b) the publication of any matter by a member of that House in communicating with the Commissioner or his officers for those purposes or by the Commissioner or his officers in communicating with such a member for those purposes;

3.2 p.m.
VISCOUNT COLVILLE OF CULROSS VISCOUNT COLVILLE OF CULROSS moved, in subsection (3), to leave out "the House of Commons" and insert "each House of Parliament". The noble Viscount said: My Lords, this Amendment concerns basically a Lords Minister and a special report made by the Parliamentary Commissioner under this Bill. This matter has been discussed twice, first on Second Reading and also when my noble friend Lord Harlech moved an Amendment during the Committee stage, which the noble Lord, Lord Shackleton, said three times, I think, that he would look at again. I think that at that time the noble Lord, Lord Shackleton, was not altogether sure of the merits of this point, but I would think there are two matters which ought to be considered.
First of all, there is the position of this House if a Member of it who is

1331
either a Minister at the time or (perhaps, in some cases, more important) who has been a Minister, either in a previous Government or in a previous form of the same Government, but is no longer in that position, is criticised by the Parliamentary Commissioner for something which he or his Department have done. So long as this House exists in its present form, I very much hope that we shall always have the noble and learned Lord the Lord Chancellor, of whatever Party, in charge of his Department and sitting here. I well recall, from various discourses that the noble and learned Lord has given us about the duties of his Department, that he has indicated that he has to deal with a very wide range of subjects. He has explained this at great length, and indeed has led us to believe that it is the job of a superman to fit in all these tasks in the 24 hours of a day; and I well believe it. Each one of them, however, might well be the subject of the sort of criticism which would go to the Parliamentary Commissioner.
The Lord Chancellor's Department is his own responsibility. Any Minister in another place would hardly be able adequately to answer for what was done by the noble and learned Lord and his Department, and he would be the only person who could give a satisfactory explanation of a decision which had been taken. If the Parliamentary Commissioner reported—and, of course, I use this only as an example, because there are other Ministers with departmental duties who might well sit in this House—and made an adverse report upon one of the activities of the noble and learned Lord's Department, then, as the Bill stands at the present moment that report would go only to another place. I think, first of all, it would be very difficult for this House, in those circumstances, to debate it; and, secondly, there are grave difficulties about a Member of this House—and a Minister is no exception in this respect—going to give evidence or to appear in front of a Select Committee in another place.
In these circumstances, I find it difficult to see how Parliament would be able to examine a Minister who sat in this House on the subject matter of a report made by the Parliamentary Commissioner—and, of course, the whole essence
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of this Bill is that Parliament should be able to examine Ministers, Ministers of this House being no exception. Therefore, notwithstanding the difficulties which might arise under Standing Orders and things of that nature, which I would have thought did not necessarily arise or need to be discussed on this Amendment, but could be dealt with later by the appropriate Committee, I think we at any rate need to found a jurisdiction for ourselves to discuss these matters, either in the House itself or, if we choose to set up some other form of machinery, by that means. This must mean, I think, that the special report of the Parliamentary Commissioner must also be made to this House, so that where it concerns a Minister who sits here we may have proper cognisance of it and may deal accordingly with it. That is the first point, and I do not think it is in fact all that different in principle from the one which is the subject matter of the later Amendment to be moved by the noble and learned Lord the Lord Chancellor himself, providing that annual reports, which might include such criticisms, although perhaps not so directly or personally, should in fact come to this House. I think the principle is very much the same.
The other point is the Minister's own position. It may well be that in most cases this House will think fit to dispense with its Rules—I do not know—and allow a Lords Minister to go and give evidence, perhaps, in front of a Select Committee of another place; or there might be machinery incorporating some of your Lordships in the Select Committee in those circumstances. That, I think, is not the point. But unless we make this House capable of dealing with these reports, a Minister who sits here may have grave difficulty in defending himself and the work of his Department. I think it would be proper for this House to ask him to do so, since he is a Member of it; and I think we should like to hear his explanation. But I think, above all, that he ought to have the opportunity in his own House to get up and explain the conduct of which he is accused, and try to make out his justification for acting in the way in which he did.
I think my Amendment on this special report from the Parliamentary Commissioner would set the scene for both these

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matters being put right. It is not the complete answer in itself, but I think it would bring this House into the picture in such a way that we could make other arrangements to deal with the perhaps more complicated but I think subsidiary matters of the machinery by which these investigations could in fact take place. I therefore hope that the noble Lord, Lord Shackleton (if it is he who is to reply), may have considered this matter more favourably in the interim, and may now be able to accept this Amendment as embodying no different principle at all from that in the Amendment about the annual report which the Government themselves are to move. I beg to move.
Amendment moved—
Page 7, line 32, leave out ("the House of Commons") and insert ("each House of Parliament")—(Viscount Colville of Culross.)
LORD REAY: My Lords, I should like to support the Amendment of the noble Viscount. Apart from the reasons which he himself has given in support of it on the grounds that there might be cases of Ministers in this House against whom such a report is directed, these occasional reports are still reports made by the Parliamentary Commissioner, as he is to be called. I cannot see what the Government stand to lose by agreeing to lay these special reports before both Houses of Parliament. I accept, as the noble Lord, Lord Shackleton, said in Committee, that it seems to be the Government's intention that they should be referred to a special Committee which will consist only of Members of another place, but this decision is always one which could be changed by the Government, and changed independently of the future of this Bill; and, indeed, it might be possible that they will change their minds and set up a Committee comprising Members of both Houses.
But even if the reports are to go to a Select Committee formed only of Members of the House of Commons, I suppose this House might in practice feel some inhibition or some frustration when it came to the question of debating them; whereas, if they were laid here also, I think that, when the time came that this House wanted to debate one of these reports, the Government could less easily argue that it was not the business of this House to do so. It seems to me that that is a sufficient
1334
reason for supporting this Amendment, and if it came to a Division I think I should tend to support it in that Division.
LORD AIREDALE: My Lords, I should like to say a word or two in support of the Amendment. This House not infrequently debates cases of alleged injustice to particular individuals. Very often, this House has more time than another place to devote to matters of that kind. Very often this House can arrange debates on matters of that kind more speedily than is possible in another place. I should have thought there was no better example of a proper subject for debate of this kind in your Lordships' House than a case falling within this subsection, where the Parliamentary Commissioner had found that injustice had been done to some particular individual and it appeared that the injustice would not be remedied. I think it would be a very great shame if this House were to feel in any way embarrassed at debating matters of this kind because this House had not officially been given the special report of the Commissioner into the case so that it seemed that in some way this was a matter that was being reserved for another place and not for this House. I should have thought the Government might well give way and accept this Amendment in order that these particular cases could freely be debated in this House just as easily as in another place.
3.13 p.m.
LORD SHACKLETON: My Lords, first of all I should like to congratulate the noble Viscount, Lord Colville of Culross, on hitting on a point both of great interest and of some real substance. It is the intention of the Government to accept this Amendment. I should like to give a little background, because it relates closely to some of the other material in the noble Viscount's speech. I know he suggested that perhaps we should not go into this at any great length to-day, but it is the basis of the Government's thinking in this matter.
On the Committee stage I suggested that these reports were primarily concerned with matters referred to the Parliamentary Commissioner by Members of another House. Your Lordships, by a quite decisive vote, decided that we did not ourselves wish to have access to the Parliamentary Commissioner. It is right

1335
(and here I think there will be no disagreement) that in this matter the Select Committee of the Commons will be the body to whom the Parliamentary Commissioner will turn in regard to those matters on which it is appropriate for him to consult them and to whom he wishes to refer matters of dispute.
In accepting the Amendment I am not accepting it so much in the terms of the argument which the noble Lord, Lord Airedale, advanced; that this will be the place where we might have more time to discuss questions of individual injustice. I do not deny for one moment your Lordships' right and indeed, in certain circumstances, your duty, to raise particular cases. But traditionally—and I am sure most noble Lords will agree—these are matters which tend on the whole to be essentially constituency matters, which will fall to be dealt with in another place. When I was resisting the Amendment on the Committee stage I suggested that there would be nothing to stop your Lordships from raising a particular case here, and that what we wanted was a situation in which, while the report did not come to us it was, so to speak, "copied" to us. This aroused some indignation on the part of the noble Lord, Lord Harlech, but it represented to my mind precisely the sort of relationship that I believe existed. We did not ourselves necessarily want to get directly involved in these special reports; but we wished to be able to take cognisance of them and, like any copy addressee, if necessary, to weigh in.
The noble Lord raised a more fundamental issue than that: the relationship between this House and another place. He suggested that difficulties might arise over the possible request of a Member of this House to give evidence before the Select Committee on a matter of which this House had no cognisance, or on which it was not likely, officially, to see the report. The Government have decided—I think rightly and it in no way fetters your Lordships in any action you take—that this is clearly a matter in which, in the interests of good relations between the two Houses, and on the merits of the case put forward by the noble Viscount, all the appropriate reports which the Parliamentary Commis-
1336
sioner may issue should be laid before both Houses of Parliament. The Government are going to accept the Amendment.
I should like just to touch briefly on the wider question of whether Members of your Lordships' House can be summoned to appear before a Select Committee in another place. Obviously, this is a matter which, in the first instance should perhaps be examined by the Committee on Procedure. It may be that we shall even wish to talk about it further on Third Reading. I have made a few preliminary inquiries of my own, and, while I do not wish to suggest that what I say is authoritative, I am reasonably satisfied about the situation, notwithstanding the rather restrictive nature of Standing Order No. 22.
That Order states:
"No Lord shall either go down to the House of Commons or send his answer in writing, or appear by counsel, to answer any accusation there."
That was a Standing Order of 1674. In fact, this House appears to have taken a lenient view of this Standing Order and in a number of cases in the past did not enforce it at all. If any noble Lord wished to examine the authorities, he would find that there have been a number of cases, going back to the Duke of Buckingham; and later on a predecessor of the noble Lord, Lord Somers, was freely allowed to attend in another place. This was dependent on the interpretation, I think, of the word "accusation".
In 1805, however, your Lordships took rather a more restrictive—I should have thought more precise—view of the meaning of this Standing Order in the case of Lord Melville. But even then, they applied their restrictions within definite limits and, on the advice of the Committee for Privileges, came to the view that:
"…it appears undeniably by uniform series of precedents down to the present time that the course adopted by the House respecting the giving leave to Members of this House to go down to the House of Commons has been first to permit the Members of this House on their own request to defend themselves in the House of Commons if they think fit on any points which that House had not previously passed any accusatory or criminating resolution against them."
Noble Lords who are historians will recall that it was not long before that date that the House of Commons had

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passed a very frankly criminating resolution with regard to Lord Melville. Notwithstanding that, he did subsequently go down, although he did not appear before the Select Committee but appeared before the whole House. I think, therefore, that there is a long tradition in this matter that your Lordships have been given permission to attend in another place.
The Parliamentary Commissioner, although he himself has the power of a court of record, will not be operating, as the Swedish Ombudsman does, as a prosecutor. As we know, the Swedish Ombudsman can bring people before the administrative court. Our scheme is a practical, very typically British-adapted arrangement designed to put wrong right in the quickest and most effective way. I am sure that in this matter it is likely that this House will continue to take the liberal view that they have done for several centuries past. None the less, I would agree with the noble Lord that this is a matter which might be examined by the Committee on Procedure, if only because it appears that in this day we are likely to take a more precise view of the meaning of a Standing Order than perhaps in the lackadaisical days in the past in your Lordships' House. Therefore I must congratulate the noble Viscount, Lord Colville of Culross. I have not been able to give as full a constitutional account of the position as I should have liked, because this is based only on some final reading I did a short while before the debate; but I am sure that your Lordships are glad that these reports will be coming before your Lordships' House.
VISCOUNT COLVILLE OF CULROSS: My Lords, I am grateful to the noble Lord, Lord Shackleton, and I think that the House is, too. It must be a matter of rejoicing to him that in his position as Deputy Leader he has been able to take some active step which I think will add to the comity between the two Houses, which is of great importance and was, I think, the fundamental point which this Amendment raised. I agree with the noble Lord that it may well be that in the vast majority of cases your Lordships will not wish to discuss the special reports at all, but I was anxious that there should be no bar upon the House doing so, which seemed to me to be the case.
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Finally, my Lords, so far as Standing Order No. 22 is concerned, I agree with the noble Lord that this should go to the Committee on Procedure. But he will of course recognise that it would have been singularly difficult for the Committee on Procedure to make any general or any particular ruling on this if the subject-matter of the report was not before the House at all. This was the difficulty that I foresaw and which the noble Lord, in accepting this Amendment, has, I think, wholly done away with. I am therefore very grateful to him, and I hope that the House will agree that this Amendment should be made.
On Question, Amendment agreed to.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, in subsection (4), to leave out "the House of Commons" and insert "each House of Parliament". The noble and learned Lord said: My Lords, if no noble Lord disagrees I would venture to address your Lordships on Amendments Nos. 3, 4, 5 and 6 together and then to move them, because they all relate to exactly the same point. These Amendments arise out of an Amendment moved from the Liberal Benches on the Committee stage and relate to the publication of the annual report.
I apologise for the fact that I have this afternoon, on this and other Amendments, to carry on something of a colloquy with noble Lords on the Liberal Benches, while at the same time turning my back on them. This, as your Lordships may know, is entirely due to Thomas Cromwell. Henry VIII passed an Act the object of which was to get the Archbishops off the steps of the Throne and sitting where they now sit, and to get Thomas Cromwell on the steps of the Throne, because he was the man whom Henry had decided would despoil the monasteries. He was to preside over Convocation, though he had never been ordained; in fact, he had not even got a university degree. That being the object of the Act, in order to camouflage it King Henry VIII also laid down in the Act where a number of other people were to sit, so that it looked merely as though it was an Act to arrange where people were to sit. It was there laid down, and is still law, that the two seats nearest the Throne in front of the

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Benches now occupied by the Liberal Party were, and indeed still are, the seats of the two Royal Dukes. The third seat is the Lord Chancellor's seat. Of course, he has not sat on it for about 350 years, because he always sits on the Woolsack. The reason why, though a member of the Government, I address your Lordships from the Opposition side of the House instead of from the Government side is that that is where I should be if I got up from the seat that I have not sat on for 350 years. I am not sure that this is not a point which ought to engage the attention of the noble Lord, Lord Alport, or other reformers, at some stage. I apologise for turning my back to them in this way.
The noble Lord, Lord Wade, contended that at least the annual reports ought to be put before this House as well as the other House. I said I was quite prepared to accept that on the part of the Government, though I had been advised that the noble Lord's wording was not quite correct and that some consequential Amendment would be needed. My Lords, this Amendment gives effect to that undertaking, and the remaining Amendments are the consequential Amendments referred to. I beg to move.
Amendment moved—
Page 7, line 34, leave out ("the House of Commons") and insert ("each House of Parliament").—(The Lord Chancellor.)
3.23 p.m.
LORD REAY: My Lords, as the noble and learned Lord the Lord Chancellor has pointed out, since this Amendment was in substance moved in Committee stage by my noble friend Lord Wade (who, incidentally, regrets very much that he is unable to be here this afternoon), I should like to say that we on these Benches are very grateful to the Government for accepting it in this its improved version. The arguments advanced now and then seemed sound, and if there is a justification for the title of "Parliamentary Commissioner", and any justification for the responsibility of this House for his removal from office he must, at some level, be made accountable to this House, and it should be made formally clear that his work is open for us to debate and to comment upon. I think this has been made clear, and we
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are pleased that the Government have seen fit to introduce this Amendment.
On Question, Amendment agreed to.
THE LORD CHANCELLOR: My Lords, I beg to move Amendment No. 4.
Amendment moved—
Page 7, line 36, leave out ("that House") and insert ("each House of Parliament").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: My Lords, I beg to move Amendment No. 5.
Amendment moved—
Page 7, line 43, leave out ("the House of Commons") and insert ("either House of Parliament").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: My Lords, I beg to move Amendment No. 6.
Amendment moved—
Page 8, line 1, leave out ("that House") and insert ("the House of Commons").—(The Lord chancellor.)
On Question, Amendment agreed to.
Clause 12 [Interpretation]:
3.28 p.m.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved to add to the clause:
"It is hereby declared that nothing in this Act authorises or requires the Commissioner to question the merits of a decision taken without maladministration by a government department or other authority in the exercise of a discretion vested in that department or authority."
The noble and learned Lord said: My Lords, this is the other Amendment which I agreed to move on Report stage in association with Amendment No. 1. I hope it does that which we have all, I think, always intended. As the noble Lord, Lord Harlech, said on Committee stage, no Government could tolerate a Commissioner being made a one-man Court of Appeal from a discretionary decision. This Amendment makes clear that it is in no way restricting what the Commissioner investigates. The Amendment reads:
"It is hereby declared that nothing in this Act authorises or requires the Commissioner to question the merits of a decision taken without maladministration by a government department or other authority in the exercise of a discretion vested in that department or authority."
Parliament has, of course, left many questions of policy and discretion to Ministers. Whether you have a new town at place A or place B is a question of discretion, and no one, I think, ever intended that the Parliamentary Commissioner should express an opinion on the merits of what, at the end of the day, is a question of discretion. I hope, therefore, that this meets with the approval of the House, and accordingly I beg to move.
Amendment moved—
Page 9, line 28, at end insert the said subsection.—(The Lord Chancellor.)
LORD AIREDALE: My Lords, as I have an Amendment to this Amendment on the Marshalled List, I think it is correct that I should say a word now as to the Amendment which I was proposing to move—
LORD SHACKLETON: My Lords, will the noble Lord be moving his Amendment now?
LORD AIREDALE: My Lords, I think it is in order if I now move Amendment No. 8, which is to insert in the proposed new subsection, after the word "taken", the words, "in good faith". The purpose of this Amendment to the Amendment is to ensure that "maladministration" refers not only to the machinery of collecting the matters which require consideration at the time the consideration is made and placing them before the person considering them in exercising his discretion upon them, but also to the actual careful consideration of all those matters by the person about to exercise his discretion.
If maladministration includes all those things, then I shall concede that this Amendment to insert "in good faith" will be unnecessary and I shall be pleased to withdraw it. But if maladministration means merely the machinery of collecting the documents together and the matters which have to be considered, and no more, then I submit that it would be appropriate to accept the Amendment so as to make certain that it is necessary, in order to escape the attention of the Parliamentary Commissioner, that the person about to exercise his discretion in a case shall have carefully considered all the matters requiring consideration in good faith at the time that his discretion is exercised. I beg to move.
Amendment to Amendment moved—
Line 3, after ("taken") insert ("in good faith and").—(Lord Airedale.)
VISCOUNT COLVILLE OF CULROSS: If I may comment first on the Amendment to the Amendment moved by the noble Lord, Lord Airedale, I shall of course be interested to hear what the noble and learned Lord the Lord Chancellor has to say about it, but the impression I have received from reading the Reports of the various stages of the Bill in another place and in your Lordships' House is that we cannot define maladministration by any series of nouns which attempt to put in extra synonyms, because we shall always leave out some set of circumstances which might conceivably arise. Therefore, the best thing to do is to accept the fact that when we find maladministration we shall recognise it even if we cannot define it in advance.
I should have thought that to add another phrase to the definition of the circumstances in which the Parliamentary Commissioner can act might have a confusing rather than a clarifying effect, because it would then appear that, on the one hand, there is maladministration, including all the plethora of circumstances which have been exemplified elsewhere, and on the other, a lack of good faith. I should think that if it could be spotted in time to appeal to the High Court, lack of good faith in itself would be a reason to ask the court to overturn the Minister's decision. I do not know what would have happened when Mr. Franklin sued the noble Lord, Lord Silkin, about the original Stevenage New Town. I understand fully and accept that the matter was done in the best of faith but, if it had been clear that the noble Lord had acted in bad faith, then I think that the court might have come to a decision other than the one it came to—but nothing of the kind happened. Here is where we impinge on the jurisdiction of the court itself, and I suspect that here we ought to be really careful.
Coming to the Amendment itself, I am sorry to see the end of the phrase "review by way of appeal", which at one stage I thought I had begun to understand. I hope that I am not going to add to the muddle about this by what I am going to say. But I would ask what is now going to happen. If there is no

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maladministration, in whatever form it may be defined, we cannot ask the Parliamentary Commissioner to consider the merits of a decision; but if there is maladministration, then not only that maladministration itself but also the decision that was reached by that means is open to being impugned. If that is so, as I think it is, we have an important clarification of this matter, which I do not think could have been immediately read out of the old Clause 5(4). It may well be that we have here the clearer statement of the matter which everybody was seeking at Second Reading.
I should like to make a suggestion to the noble and learned Lord. This is an important matter. It goes to the root of the whole relationship of the Parliamentary Commissioner to Government in all its forms. Is it not perhaps a pity to put in this declaratory subsection as part of the ragtag and bobtail of definitions in Clause 12? Does it not merit a clause of its own, with a separate side-note so that attention is attracted to it? I suggest that to the noble and learned Lord, because this is an important matter to which everybody's mind ought to be drawn.
THE LORD CHANCELLOR: First, as to Amendment No. 7, I agree with the construction given to it by the noble Viscount, Lord Colville of Culross. As to the suggestion that it should be given a more prominent place, this is a matter of opinion and of presentation, but I will consider it before Third Reading.
All your Lordships must agree that my noble friend Lord Shackleton and I have leant over backwards to be as accommodating as possible so far this afternoon, but I am afraid that the limit of accommodation has been reached on the Amendment of the noble Lord, Lord Airedale, really for the reasons given by the noble Viscount. We have all agreed that maladministration is the widest possible word. It certainly includes bad faith and delay. I said on Second Reading that it covers negligence, ineptitude and dishonesty. These are things which everybody recognises. Maladministration is difficult to define, but I should like to make clear that it certainly includes bad faith.
If it is then said that, if we agree that it includes bad faith, what can be the
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harm in putting in the Bill, "in good faith", one difficulty at least is—I think that all lawyers, including the noble Viscount, would agree—that if we put in here "in good faith" the legal mind will then say, "Ah, ha! Maladministration does not include bad faith wherever else we find it, otherwise it would not have been necessary to put in the words 'in good faith' in this particular clause" That is the main reason why I am afraid I cannot accept the Amendment.
LORD AIREDALE: I am not surprised to learn that the limit of the Government's accommodation has been reached and that this Amendment is not acceptable. My noble friend Lord Wade and I put it down only as a probing Amendment. We hoped it would draw from the noble and learned Lord the Lord Chancellor the kind of assurance that it has drawn, I am glad to say, and in these circumstances I am very happy to ask to withdraw my Amendment.
Amendment to Amendment, by leave, withdrawn.
On Question, Amendment agreed to.

FREIGHT-LINER TERMINALS
3.40 p.m.
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR SCOTLAND (LORD HUGHES): My Lords, it may be convenient for the House if at this stage I repeat a Statement which is being made by my right honourable friend the Minister of Transport in another place. I will make use of her own words:
"As the House will know, I have during the last week been holding intensive discussions with the National Union of Railway men on the opening of freight-liner terminals to all road haulage vehicles. The dispute between the National Union of Railwaymen and the Railways Board over open terminals was a long-standing one which had prevented the full use of freight-liner services, and the opportunity to discuss it further arose when the Union asked to see me on February 16 about the completion of the Transport Holding Company's acquisition of the Tartan Arrow Company. I am happy to be able to tell the House that, in the light of the discussions and of the assurances given, the N.U.R. Executive withdrew their objection to open terminals and

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agreed to co-operate in the full expansion of the freight-liner network.
"It is a primary aim of my policy to exploit to the full the railways' ability to transport large flows of freight in containers with maximum efficiency; this will be a vital element in developing the new railways.
"The Railways Board will shortly be putting forward for my approval proposals for the investment of some £7 million in Stage 2 of the freightliner project. Expenditure of this order could not have been economically justified without open terminals. The Board will also be seeking my approval for further investment in cartage vehicles to service the freight-liners, and this is expected to total about£2 million. With the establishment of open terminals, I confidently expect that these proposals will prove to be soundly based.
"I am anxious that the Railway Workshops should share in the benefits of the expansion of the freight-liner network, and I have just approved the setting up of a modern and efficient container production line which will enable the Derby workshops to manufacture up to at least 4,000 containers a year. The removal of the present restrictions on the Board's powers of manufacture which I shall propose in my forthcoming Transport Bill will also help to ensure that the railway workshops in general, on whose modernisation some £17 million has been spent in the past few years, are used to their fullest extent.
"As I said in the House before Christmas, the British Railways Board and the Transport Holding Company have already taken the first steps to create an integrated freight system by establishing joint machinery to promote interworking in the parcels and sundries field. As a further step towards integration it has now been agreed between the Railways Board and the Transport Holding Company that the Board will take a50 per cent. holding in Tartan Arrow, and so become joint owners with the Transport Holding Company. The Board and the Holding Company will make an immediate start on securing that mutual benefits to be derived from joint ownership of Tartan Arrow even before the legal formalities are completed. Discussions will cover
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means of integrating the use of trains and job opportunities. There will be full consultation with all the Unions concerned.
"The Chairman of the Railways Board has reaffirmed the assurances already offered to railwaymen that there will be no redundancies among cartage or other railway workers as a result of the opening of the terminals to private hauliers and that earnings will be suitably safeguarded. The Board will shortly be starting discussions with the trade unions with the aim of translating these assurances into an agreement which will meet specific points raised by the N.U.R. Executive.
"The service planned by Tartan Arrow will be starting between their own depots at London and Glasgow next month with one train daily in each direction. The Railways Board also intend to add further trains to their own London—Glasgow service in the near future as traffic expands with the establishment of open terminals.
"In these ways we shall continue to work towards the fullest use of freight-liners. I look forward to the continuing expansion of this traffic in which I am confident that all sections of the railway industry will share."
My Lords, that concludes my right honourable friend's Statement.
3.46 p.m.
LORD NUGENT OF GUILDFORD: My Lords, I should like to thank the noble Lord, Lord Hughes, for this Statement, and also for kindly furnishing me with a copy of it. Is the noble Lord aware that there is great interest in this subject, and that a settlement of this three-year-old dispute, which has been depriving us of the great value of Lord Beeching's brilliant innovation, is welcome indeed? There are several questions I should like to ask the noble Lord by way of clarification.
Is the noble Lord aware that there is some anxiety about the arrangements by which the depots have been opened to Tartan Arrow by the nationalised industries buying out Tartan Arrow? Will the noble Lord assure us that now all liner train depots will be unconditionally opened to all private hauliers? Secondly, is the noble Lord aware that the innovation of the

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rail workshops manufacturing containers will be carefully watched to ensure that the railway workshops are not put on a basis to compete with private manufacturers by means of a wasteful subsidy?
Is the noble Lord able to tell us now what overall increase in freight traffic is forecast for the next 12 months, and whether it will be enough to reverse the falling trend of freight traffic over the last two years? Then, is the noble Lord satisfied that the rates to be charged for this service are set at a level which will help to reduce British Railways' deficit, and are not set at an uneconomically low level in order simply to attract traffic off the roads? Finally, can the noble Lord tell us whether in fact any jobs will become superfluous as a result of this very welcome statement?
LORD HUGHES: My Lords, I thank the noble Lord for his welcome of this Statement, which I am quite certain is a welcome generally felt by all Members of your Lordships' House. He has set me quite a considerable task in the variety of questions he has asked. If I may take them not necessarily in the order in which he tabled them, I will do my best to answer.
The noble Lord asked whether there will be any jobs which will become superfluous. He is aware of the fact that my right honourable friend's Statement says that the jobs of those presently employed by the Railways Board will be safeguarded. That, one would imagine, will be done in the ordinary way: that such diminution of employment as may be necessary will arise in the ordinary way through wastage rather than dismissals. On the subject of whether the rates that will be charged will be such as to reduce the deficit, I think that is implicit in the Statement. The whole object of the liner trains arose because Lord Beeching and the Railways Board thought that this was a method by which the railways could take traffic on a remunerative basis; and it would obviously be the height of folly to invest money of this order if it were thought that at the end of the day the deficit would have increased. So I can give a firm assurance that the intention is as the noble Lord hopes.
The noble Lord asked what the freight might be over the next twelve months.
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I am not in a position to give any answer to that question, other than this. At the present time the amount of freight is believed to be at the rate of some 750,000 tons a year. The estimate made by the Railways Board some three years ago was that the potential traffic would be some 30 million tons a year. The rate at which we can proceed over the next twelve months must be a matter upon which the advice of a former distinguished Prime Minister is appropriate: let us wait and see.
Because of the speed with which the noble Lord put these questions I wrote them down hurriedly, and I am unable to read my own writing. I think he asked something about the opening of the workshops, and whether there would be a subsidy or whether they would be operated on a commercial basis. I think the answer which I have given to the other question about the rates to be applied is equally appropriate in the case of the opening of the workshops. A considerable amount of money had been invested in these workshops. The purpose of the Government's proposals in relation to the manufacturing activities which are to be available is that the workshops shall be developed in the most economic fashion and that the best possible use shall be made of the money invested in them. I can assure the noble Lord that it is the intention of the Government that this will be work of economic value, and that object would be frustrated if we were merely encouraging them to do things on which they were going to lose money.
The final point to which I am going to reply was, I think, the noble Lord's first one; namely, would all depots be open unconditionally to all hauliers? Whether I would be justified at this stage in putting it exactly in those words I am not quite certain, but it will not have escaped the noble Lord's notice that my right honourable friend's Statement refers specifically to open depots, and when she talks about open depots I think she means exactly what she says.
LORD CHAMPION: My Lords, I do not think we ought to pass from this matter without congratulating my right honourable friend on the successful outcome of an extremely difficult set of negotiations. I happen to have been able to look at these negotiations both from

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the Government side and also, as a member, still, of the N.U.R., from the N.U.R. side. I should like to feel that we all recognise the tremendous amount of work that my right honourable friend has done and the common sense of the Executive of the N.U.R. in arriving at a settlement which will safeguard their essential interests and at the same time ensure the better use of our railways.
LORD BALFOUR OF INCHRYE: My Lords, could the noble Lord make one point clear? In the Statement the Minister spoke in general terms of assurances given to the N.U.R., and then, later in the Statement, instances were given of a number of such assurances. Can the noble Lord say that the total number of assurances are those read out by the noble Lord to the House and that no other assurances were given, such as a long period of time for manufacture, or assurances in some other direction of which we have not heard?
LORD NUGENT OF GUILDFORD: I should like to thank the noble Lord, Lord Hughes, for the answers which he gave to my questions. On the last point, may I just ask him this further question? Is he aware that the terms of his Statement appear to be rather guarded in regard to the general opening of the terminals as compared with the opening for the Tartan Arrow Company? Further, is the noble Lord aware that it is on this point that public opinion generally has the strongest possible feeling that the wish is to see these depots open to all road traffic?
LORD HUGHES: My Lords, perhaps if I were to indicate the build-up of the services it would give some reassurance to the noble Lord. There are now seven two-way services, five days a week, carrying some 1,350 containers weekly. Expansion to 27 services a week by the end of 1967 is planned. Under Stage 1 the present terminals are London (York Way), Liverpool, Manchester, Glasgow and Aberdeen. The rest of Stage 1 comprises terminals at London (Willesden), Cardiff, Newcastle-on-Tyne, London (Stratford), Stockton, Sheffield, Leeds, Edinburgh, Birmingham and Hull. Stage 2 consists of eight more terminals, but I cannot yet state precisely where these will be.
To reply to the point raised by the noble Lord, Lord Balfour of Inchrye, I
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think the Minister's Statement is very forthcoming about the assurances that have been given. It would be equally wrong to attempt to read into the Statement more than is in it or, on the contrary, to assume that anything has been deliberately omitted from it.

PARLIAMENTARY COMMISSIONER BILL
3.57 p.m.
Report stage resumed.
LORD REAY LORD REAY moved to add to the clause:
"() For the purposes of this Act the term maladministration shall not of itself be understood to exclude those cases where, notwithstanding the fact that administrative procedures may have been properly followed, an arbitrary and unreasonable decision by a government department or other authority resulted in an injustice."
The noble Lord said: My Lords, Amendment No. 7, which was moved by the noble and learned Lord the Lord Chancellor, certainly improves the Bill. As the noble Viscount pointed out, it admits the principle that the merits of certain discretionary decisions—namely, those which have not been taken without maladministration, and, therefore, presumably those in which there has been some maladministration—may be questioned by the Parliamentary Commissioner. But what it will admit in practice remains conjectural, because maladministration is undefined in the Bill. The noble Viscount pointed out that in fact it would be almost impossible to give a definition to "maladministration". My Amendment does not attempt to do this, but seeks to make explicit that the term, in its application, can include what it might well otherwise be taken not to include; namely, cases where, however correct the procedures were—if no delay was incurred, no files were lost, no instructions disobeyed, no behaviour lax—nevertheless the decision taken was ultimately both arbitrary and unreasonable.
I think this is, more or less, what most people, who were disturbed about it in the early stages of the Bill, want to see. They want it to be quite clear that the arbitrary, perverse, unjust and unreasonable consequences of administration, however correctly the established formulae of administrative procedure

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may be observed, are open to direct investigation. I would go further and suggest that this possibly represents the most crucial area of the field with which this Bill is concerned, and that failure to make this clear is the principal reason for that lack of public acclaim which the noble Lord, Lord Shackleton, complained of on Second Reading.
It is argued, I think, by the Government, and also by the noble Viscount, Lord Colville of Culross, in a rather frightening alliance that they seem to have established, that the term "maladministration" already covers these cases. I think this opinion may well be wrong. In those examples I have given, namely in cases where files have been lost, instructions have been disobeyed, and so on, an explanation can be given to account for any perverse decision. Such cases would qualify easily for the description of "maladministration". But I am thinking of cases where no explanation at all can be found, where every detail of procedure is correct and where the only fault—apart from the unjust consequences of the decision—will be either that procedures were too correctly and inflexibly followed or that there was some indiscoverable psychological quirk in someone's mind at the moment when the decision was taken. It is those cases—precisely the kind one is after—inexplicable and unjust which I think may be disqualified from the description of maladministration, precisely because they are inexplicable.
Even if the Government are right, there is a great deal to be gained and nothing at all to be lost if it is made perfectly explicit that these cases are covered by the term written in the Bill. This Bill is written more or less personally for the Parliamentary Commissioner. Unlike other legislation that comes to this House, it is not written for the courts to interpret. I know this means that an audacious Parliamentary Commissioner will make much more of it than a modest one, and presumably the Government will have had the opportunity to consult the present incumbent of this as yet uncreated office for his views on this point. But it also means that the interpretation given in this House by Government officers and interpretations given by legal advisers to the Government are not final,
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and possibly they are less useful than in the case of ordinary legislation.
Furthermore, the Bill needs to be understood not only by the Parliamentary Commissioner but also by M.P.s. After all, it is the M.P.s who have to decide whether complaints are eligible for passage to the Parliamentary Commissioner. It needs to be understood also by civil servants, in order that they should be deterred from the practice of unreasonable decisions. I would suggest that if it was understood by the Press and the public that the sort of cases I have outlined were covered by the term "maladministration", the Government would stand to gain far greater credit for this Bill than they have already and more than they will do if this question is left ambiguous.
I had better say a word on the drafting of this Amendment. The word "arbitrary" is coupled with the word "unreasonable" in order to meet the objection that the Parliamentary Commissioner could otherwise question departmental policy. To be arbitrary I think a decision would have to be more or less out of line with the pattern of the decisions taken by a particular authority. The word" unreasonable" is quite familiar as a usable criterion in a court of law. Finally, the whole Amendment has been put negatively; that is to say, it reads "should not by itself exclude", rather than "should include", in order to avoid stating all the necessary conditions which might have to apply before any arbitrary and unreasonable decision could be described as maladministration.
For the reasons I have given, I think this Bill could be interpreted as meaning that these examples of unreasonable decisions were excluded from the term "maladministration". But even if I am wrong and they will be interpreted as being included, more is to be gained than lost by making this more explicit. Therefore I think this Amendment would improve the Bill. I shall certainly listen very carefully to the noble and learned Lord the Lord Chancellor's answer, but I think that a statement by a Member of the Government, even if it is satisfactory, would be less useful than an Amendment to the Bill. I beg to move.
Amendment moved—
Page 9, line 28, at end insert the said subsection.—(Lord Reay.)
VISCOUNT COLVILLE OF CULROSS: My Lords, I think I ought to say one word on this Amendment, because it relates to a point I raised on Second Reading. I shall of course be exceedingly interested, as I am sure the House will be, to hear what the noble and learned Lord the Lord Chancellor has to say on this matter. I think it exemplifies about the limit of the Parliamentary Commissioner's range. If he finds that he has to decide whether or not to enter into the lists on a subject where there has been no infringement of the technical rules, but on something which might conceivably be said to be a perverse decision and one not supported by any facts before the Minister or the Department concerned, he may well find himself in difficulty.
The difficulty in which I find myself is that if you try to specify what does or does not come within the term "maladministration", I am very much afraid that instead of making it more clear all you will do is to limit the operation of the Parliamentary Commissioner. It would seem to me wrong to try to define too closely what he may or may not do—this may be the opposite of what I was arguing earlier on—and that you must leave him, being a responsible person chosen for that quality, to decide where his range ends and how far he can go. I think there will be cases of this sort, which are cases of perverseness without any infringement of rules, where he thinks he can intervene. On the other hand, it may be very difficult to distinguish that sort of case from one where there has been a decision with which he does not agree, but with which he can find no specific fault, either in the machinery or in the terms of the decision, or in the relationship it bears to the facts and evidence upon which it was based. On the whole I would be against putting an Amendment in the Bill which tried to pin down the realms where the Parliamentary Commissioner could operate any more than is absolutely necessary. I think the term "maladministration" will become clearer in practice than it is now, and I hope we shall not try to define it any further in the Bill.
LORD REAY: My Lords, may I ask the noble Viscount a question, since this forms the kernel of his objection to the Amendment? Would he not agree that you are not pinning down the Parliamen-
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tary Commissioner if you are not making an exclusive definition? If all that you are doing is pointing out that a certain thing can be taken as being included in the term "maladministration", you cannot be said to be limiting him in the interpretation of "maladministration".
VISCOUNT COLVILLE OF CULROSS: The Amendment says that something shall not be excluded. If you say that it shall not exclude this but, on the other hand, you do not say anything about anything else it may not exclude, I think you are in the same difficulty mentioned by the noble and learned Lord the Lord Chancellor earlier: you have drawn attention to one set of words and then thrown doubt about what may be meant by the term in relation to other unspecified situations. It is precisely for the reason that you are picking one thing only out of a large range which is in a way pinning it down, because it is pointing to a particular aspect of maladministration and saying nothing about any other aspect.
THE LORD CHANCELLOR: My Lords, I cannot advise the House to accept this Amendment, largely for the reasons given by the noble Viscount. In the Whyatt Report and ever since two things have been distinguished: on the one hand maladministration, and on the other hand, discretionary decisions. As a remedy for the first, the Whyatt Report proposed a Parliamentary Commissioner. As a remedy for the second it proposed an extension of the powers of the Council on Tribunals and perhaps a new general administrative tribunal. Not long ago your Lordships, with another place, passed the Tribunals and Inquiries Act, enabling the Council on Tribunals to supervise new kinds of ministerial inquiries which they had no power to supervise before. I am hoping quite shortly to lay before Parliament an Order applying that to something like a hundred different kinds of ministerial inquiries where the Council on Tribunals has had no power before. In this Bill the Government have throughout on this point sought to follow in substance the recommendations of the Whyatt Committee. I think that your Lordships this afternoon have substantially improved the Bill, not because the Government have changed their mind, but because the Bill now expresses that mind much more clearly.

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On the Second Reading of the Bill my right honourable friend, the Lord President said:
"Nor do we include under maladministration that whole group of discretionary decisions which Sir John Whyatt treated separately in the first part of his Report. Discretionary decision, properly exercised, which the complainant dislikes but cannot fault the manner in which it was taken, is excluded by this clause."—[OFFICIAL REPORT (Commons), 18/10/66, col. 51.]
My Lords, I agree with the noble Viscount that this Amendment would merely introduce confusion in attempting what is, in effect, a partial definition of "maladministration". It would enable the Parliamentary Commissioner to intervene, although at the end of the day he found there was no maladministration at all, if he thought the decision arbitrary or unreasonable. I have looked up "arbitrary" in the Concise Oxford English Dictionary, and its primary meaning appears to be derived from mere opinion. Of course this must be so at the end of the day. The Minister has to decide whether there is to be a town at place A or B. One of the things which maladministration includes, but which we have not mentioned, is not observing the law. Of course, if the law is that he cannot do that unless there is a public inquiry he must have a public inquiry. If there has been no delay, and none of the factors to which I have referred, then at the end of the day his decision must be derived from his own opinion, and in many cases, although it is an arbitrary decision, one man would take one view and another man another. If one is to say that the Parliamentary Commissioner can cause the decision to be overruled because he thinks it unreasonable, then this again is only substituting one man's opinion for another.
I apprehend that one of the reasons why the noble Lord, Lord Harlech made it plain at the Committee stage of the Bill that no Government could allow a one-man court of appeal from discretionary decisions is, that one of the reasons why the Minister may decide on scheme A rather than scheme B, is because scheme B might cost another £3 million. One cannot have the Parliamentary Commissioner with power to override the Budget. This Amendment to the Amendment, therefore, would, I suggest,
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merely introduce confusion into what I think is now reasonably clear and reasonably simple in the Bill as we have it. It is for those reasons, allied to those put forward by the noble Viscount, that I hope the noble Lord will be prepared to withdraw the Amendment to the Amendment.
LORD REAY: I still feel that this matter has not been made clear. It seems to me that the speech of the noble and learned Lord was (if he will excuse the word) in some sort of sense regressive, in that it again seemed to me to be reintroducing this distinction between maladministration and what may be improper discretion. I do not see how one can distinguish where there has been a discretion, the manner of which has been correct in some sort of sense, although the result or essence has been incorrect.
The noble and learned Lord objected to the use of the word "arbitrary". In practice I do not think it is usually taken as referring simply to the expression of somebody else's opinion: in ordinary language, it is usually used more exclusively and severely than that. I included it only in order to meet an objection which I thought the noble and learned Lord would otherwise make, and which I pointed out when I was originally moving the Amendment—namely, that it would otherwise enable the Parliamentary Commissioner to encroach on the policies of a Department. This was something we had attempted to take account of in an Amendment which we had down on the Committee stage but which the Government felt unable to accept.
Certainly no one wants the Parliamentary Commissioner to be a one-man appeal court, but I think that in a court of law one would not be led to expect that this is how it would be viewed if the word "unreasonable" appeared in the Bill. It is perfectly clear that the Parliamentary Commissioner is not being advised simply to revise, on the basis of a man entitled to an equal opinion, the decision of the Department, if he is being empowered to review the decision, to criticise it, on the grounds that it was, in his eyes unreasonable. My Amendment would impose a much stronger requirement than merely that a decision of a Minister did not appeal to the Commissioner as being a correct decision.

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I must confess that I am not entirely satisfied. I am not even now certain, as I thought I was to start with, that it has been the intention of the Government that the Bill should cover the cases of which I have given an example—namely, those where, although the administrative procedures have been correctly followed, and cannot in detail be faulted, nevertheless the result looked a wholly unreasonable one, as occasionally the verdicts of juries are taken to be unreasonable in courts of law. I am now not so certain that the Government even mean that cases of this sort should be included in the term "maladministration". However, whichever opinion is given by a member of the Government in this House as to what the Government themselves mean, this is not going to be final. I think the only substantial objection made to this particular Amendment is the word "arbitrary". I do not think that is very important, and since I should prefer to see the Bill with this Amendment in it, I shall ask the Committee to decide.
On Question, Amendment negatived.
Schedule 2 [Departments and authorities subject to investigation]:
THE LORD CHANCELLOR: My Lords, this Amendment is simply to include in the relevant Departments the Social Survey. The Social Survey, which is at present a division of the Central Office of Information, is to become a separate department on April 1, 1967, and it is therefore necessary to add it to the list of Departments coming within the field of the Commissioner. I hope your Lordships will not press me as to what good it is going to do anybody to make the Social Survey a separate Department. It was in accordance with a recommendation of the Heyworth Committee on Social Studies. The acceptance in principle of this particular Heyworth recommendation was announced by the noble Lord, Lord Shepherd, in answer to a Question in this House by Lord Taylor on November 30, 1965. The intention to establish the Survey as a separate Department from April 1 was announced by my right honourable friend the Financial Secretary to the Treasury in an Answer in another place on February 17, 1967. Legislation is not necessary to achieve it, but it should therefore plainly be inserted in the Schedule, and I beg to move.
Amendment moved—
Page 13, line 3, at end insert ("Social Survey")—(The Lord Chancellor.)
VISCOUNT COLVILLE OF CULROSS: My Lords, is the Social Survey an entity recognised by the law at this moment, so that we can properly insert it in the Schedule? The House will remember that we could not include in the list the Land Commission until the Act which set it up was passed. I do not know whether the Social Survey requires some statutory instrument, or order, before it is turned into a separate entity, but if it does, presumably we cannot take notice of it, as it were, legislatively, until such order has been made. Can the noble and learned Lord tell us that the Survey is capable of being independently recognised now, even before April 1, 1967?
THE LORD CHANCELLOR: My Lords, as I understand it, if I may speak again, it is at present a division of the Central Office of Information, and it can become a separate Government Department under the prerogative. In fact, all the main present Departments, I think, were anciently Departments of State created under the prerogative. It is a modern habit to require an Act of Parliament or an order for them. No Act or Order would be required for this.
LORD AIREDALE: My Lords, is the Parliamentary Commissioner himself yet a separate entity known to the law?
THE LORD CHANCELLOR: I do not think he will be until this Bill is passed. He is merely designate and in the background.
On Question, Amendment agreed to.
Schedule 3:

MATTERS NOT SUBJECT TO INVESTIGATION
8. Action taken on behalf of the Minister of Health or the Secretary of State by a Regional Hospital Board, Board of Governors of a Teaching Hospital, Hospital Management Committee or Board of Management, or by the Public Health Laboratory Service Board.
LORD REAY: My Lords, I beg to move the Amendment standing in the names of myself and my noble friends, to omit paragraph 8 of Schedule 3. I do not think I need to say a great deal on this Amendment, since it was debated here on the Committee stage and also

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very fully in another place. I think the onus lies on the Government to justify the inclusion of this paragraph in the Bill, and it seems to me that they have not yet discharged this onus. I do not think it can be justified by arguing, as has been argued in respect of the nationalised industries, that in the case of hospitals and hospital boards the Ministry are not answerable to Parliament: it explicitly concerns action on his behalf in this case. They cannot, I think, be made analogous to local authorities, since their Boards are appointed by the Minister and there is no element of democratic responsibility whats over in their case. It cannot be argued that it will provide small, and it has been argued vexatious, complaints of negligence against doctors, since the Parliamentary Commissioner has the protection of Clause 5(2) for cases where there is a remedy of law.
I personally do not believe in the validity of the argument that it would bring in cases of a clinical judgment for which the Parliamentary Commissioner would be unfitted to adjudicate, not because he could not equip a staff which was there qualified to deal with them, as he might have to do in other complicated professional cases, such as technology, but because the Parliamentary Commissioner is only empowered to deal with cases of maladministration explicitly. Where he spots cases of contested technical judgment, cases where he can see no evidence of anything other than a decision taken in perfectly good faith, then the Parliamentary Commissioner will surely simply opt out of the business of offering an opinion or a decision at all.
I do not accept the argument that the present complaints procedure is sufficient. Recently the Government have taken to vaunting it a bit. I do not accept this, because it is perfectly clear that this procedure is not generally known to the people who would complain at the times that they would complain, nor do I think it ever could be made known. Moreover, it operates on an ad hoc basis, and is established, as often as not, by those against whom the complaint is indirectly aimed.
It has been argued by the Government that to exclude this paragraph and to include the Regional Hospital Boards would create the anomaly of including
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in the scope of the Bill Regional Hospital management, while excluding the general practitioner service and the health service which are administered by the local authorities. But, in the first place, we already have this anomaly in so far as we have hospitals in this country already directly responsible to the Minister of Health. This was not a principle considered sufficient to warrant the exclusion of, for example, matters of transport from the Bill, where there are a variety of different roads some of which are responsible to the local authority and therefore outside the scope of the Bill, some of which are responsible to the central authority and are within the scope of the Bill. And, finally, to argue that it would be unjust to seek to remedy certain injustices on the ground that one is unable to remedy them all, seems to me sufficiently perverse to provide one with an adequate reason for rejecting this entire Bill.
On the other hand, it has also been argued by the Government, somewhat ambivalently I think, in view of the last argument I have mentioned, that the Parliamentary Commissioner would simply become overburdened with complaints. In the first place, this is a direct admission that this field is a fertile source of public grievance, and in my mind that in itself gives an overpowering reason to include it in the scope of the Bill. Secondly, I assume that the worst result of this, if the Government are right, which they might be, would simply be delay. I do not suppose that the Parliamentary Commissioner would physically collapse, like the camel under the last straw; and I think that the delay, which would be the worst thing that one could expect, is something that one should mind less about and something which the public would understand more readily than the total exclusion of this source of grievance from any chance of remedy at all.
In conclusion, I would repeat that the Government have not made a case; and, finally, I would point out that they gave no reason here on the Committee stage why the reconsideration which they had promised on the Report stage in another place that they would give to this paragraph has produced no change of mind on their behalf, and there has been no improvement in the arguments they have

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used. If the Government make a better case this time, well and good. If not, then I think it would be a strong argument for pressing this matter to a Division. I beg to move.
Amendment moved—
Page 14, line 23, leave out paragraph 8.—(Lord Reay.)
4.25 p.m.
LORD NUGENT OF GUILDFORD: My Lords, may I add a word in support of the case which the noble Lord, Lord Reay, has so cogently put from the Liberal Benches. This matter was, of course, as he said, discussed at some length on the Committee stage, and therefore I need not recapitulate the arguments I used then. I should like to say to the noble Lord, Lord Shackleton, that I have most carefully studied the arguments which he then gave us, and I recollect their being given in his most persuasive tones. But, in brief, his answer really amounted to "not yet", and I noted that part of his answer rested on the opinion of the Ombudsman himself, given informally of course. While I recognise that it is an unusual advantage for Parliament to have the advice of an officer before it appoints him, it still is not enough to persuade me that Lord Shacklelton was right.
May I just briefly recapitulate the history of this, which I think lends weight to the statement which Lord Reay made that there is a good deal of public feeling about this, and that there was the quite general expectation that the Hospital Service would be included in the scope of the Parliamentary Commissioner. Before the 1964 General Election, Labour Party spokesmen clearly indicated that they meant to bring this within his scope, and in particular I refer to an article written by Mr. George Brown in the New Statesman, which specifically stated this, and which was referred to in another place in the debates there. Therefore, it was not surprising that there was general disappointment when the Bill was originally published with this exclusion.
When this point was debated on the Committee stage in another place, the support given for bringing the Hospital Service within the scope of the Parliamentary Commissioner was sufficient from the Labour Benches, on a vote, to bring it hack into the Bill; and there-
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fore the Bill arrived back on the Report stage in another place with the Hospital Service included. There was then a considerable debate on the subject, and the Lord President of the Council, who moved to exclude the Hospital Service again, was allowed his Amendment, but it was late at night and only on the undertaking, to which Lord Reay has already referred, that this point would be reconsidered here when the Bill reached this noble House. In fact, every speech that was made from the Labour Benches, except the Front Bench, in another place on the Report stage urgently pressed the Government to include the Hospital Service.
I think all this indicates that there really is a considerable weight of public opinion expecting that the Hospital Service will be included within the scope of the Parliamentary Commissioner. If we now accept this Amendment, so that the Hospital Service is included, by excluding this subsection, we shall at any rate have declared our opinion from this House, and we shall also give another place the opportunity either to agree with us, or if they do not agree, to take it out again. But I feel that both the history of it and our general impression of the expectation is such that to include the Hospital Service really is justified. I hope that the noble Lord, Lord Shackleton, will continue in the gracious vein that he and his noble friends have been in this afternoon of conceding the good cases that have been put to them. I have much pleasure in supporting the Amendment.
VISCOUNT ADDISON: My Lords, I have already declared an interest in this matter as the Chairman of a Regional Hospital Board on the Committee stage, and, contrary to the views of the last speaker, the noble Lord, Lord Nugent of Guildford, I am a Back-Bencher and am against the Amendment; so there are certain Labour speakers who do not agree with the Amendment. I think that the complaints which arise in the Hospital Service are unsuitable, too diversified and mostly too trivial to be appropriate for ventilation to the Parliamentary Commissioner. Incidentally, nearly all the complaints have some sort of clinical element to a greater or lesser degree.
The responsibility for running the Health Service, which is a vast and complex organisation, spending over £1,000

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million every year, is divided between three sets of authorities: the local authorities, who provide the domiciliary and welfare services; the executive councils, who administer the family practitioner side; and the Regional Hospital Boards, who are charged with running the Hospital Service through their hospital management committees and boards of governors of teaching hospitals.
A patient normally finds his way to hospital via the medium of one of the other branches of the Health Service. The present Bill is so drawn as to exclude from its scope all local statutory bodies, and thus all three parts of the Health Service are outside the Bill; the local authorities are executive councils by definition, and the hospital authorities by inclusion in Schedule 3. If, therefore, the Hospital Service is to be brought within the Bill we shall have the unsatisfactory position that whereas a complaint could embrace all three parts of the Health Service, the Parliamentary Commissioner would have to confine his investigations to one part only. There seems to me to be no particular merit in this kind of arrangement and it might have the effect—and this is a very important consideration—of weakening the strong ties between the three branches of the Service.
It has become the fashion to attack the Hospital Service and it has been very difficult to obtain a fair picture in reply to criticisms. In fact, I myself have now had, very reluctantly, to insist that, so far as my Regional Board is concerned, they will only agree to broadcast in future under the auspices of the B.B.C. television services in a live programme. Our experience in the past with this medium has been, to say the least, very unfortunate. I have no complaint against the Press, having always found them very willing to publish my letters and to give a fair showing to any member of the Board or the Board's staff who has attempted to correct any unfair impression that might have arisen. For the record, I would say that the Hospital Service is a thriving organisation which is in no danger whatsoever of "folding up" or grinding to a halt "as some people seem to want us to believe. Well-established channels of procedure for complaints are already in existence, and when the
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Ministry of Health, as mentioned by an earlier speaker this afternoon, issued a general scheme for guidance in the matter of complaints in the early part of 1966, it was found that the Board's arrangements already in operation complied with their requirements.
We have recorded what has happened under the recommended procedure, and I think the figures will be of interest and enlightenment to the House. These figures relate to the nine months April to December, 1966. In my Board's area there are about 200 hospitals of all kinds, and the total number of complaints during the nine months' period was 358. Of these complaints, 51 came direct to my Board and 307 through hospital management committees. Forty-six of the complaints were found to be of a serious character, 216 not serious, and 96 trivial. Of this total it was found that 168 were justified and 190 unjustified, so that it will be felt that a fair hearing was given to the complainants one way or another. It should again be, stressed that the majority of the complaints had some sort of clinical element. It is of course very regrettable that 168 complaints were found to have substance, but the numbers should be viewed against the background which I will now give to the House. That background is: 263,000 in-patient admissions; 407,000 out-patients; 401,000 casualties, together with a further 799,000 attendances in accident and emergency departments. These figures do not include attendances for such things as X-ray and physiotherapy treatment.
The noble and learned Lord the Lord Chancellor in his speech on an earlier stage of the Bill noted very rightly that one always has to envisage a considerable "lunatic fringe". The ratio of this section of the public would not be smaller among hospital patients than elsewhere, because we actually cater for a large number of patients who are nowadays defined as "mentally disturbed". The word "lunatic", of course, has no place in the modern medical vocabulary. Complaints from this kind of patient are sometimes difficult to resolve, and I should not like to wish the burden upon the Parliamentary Commissioner. I think I ought to say that we successfully cure very large numbers of these unfortunate people.
Speaking personally, I have no particular views in the matter one way or

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another. I am just concerned with the practicalities of the situation at present. I have tried to make it clear that the Regional Boards and the Ministry of Health have well-established channels for dealing with complaints, and my impression is that the complainants are fully satisfied that their complaints have been thoroughly investigated.
VISCOUNT STUART OF FINDHORN: My Lords, did the noble Viscount give a figure in relation to the mentally disturbed?
VISCOUNT ADDISON: No, I did not give a figure.
VISCOUNT STUART OF FINDHORN: Could the noble Viscount not give one?
VISCOUNT ADDISON: No; it would take a lot of research. It seems to me that unless one is willing to consider the Department of the Parliamentary Commissioner as containing considerable administrative staff, comprising professionals such as doctors and nurses, one must feel that the Amendment would not be practicable. I speak on behalf of one Regional Board only, and there are altogether 15 of them, so that presumably the statistics which I have quoted could be multiplied pro rata. It is perhaps fair to say that mine is one of the larger Boards, but even if one were to multiply the total number of complaints in our Region by 12 instead of by 15, they would number something over 4,000 altogether in the nine months'period—that would be the potential. I hope that I have been able to convince some noble Lords of the difficulty of the matter and the disadvantages that would result if the Amendment were to be passed. I trust, therefore, that the noble Lord will see his way to withdraw it.
LORD SOMERS: I must say this in response to what the noble Viscount has said. He stated that a great many of the complaints would be of a trivial and unimportant nature; but he must remember that the complaints are going to reach the Parliamentary Commissioner through Members of Parliament, and surely the whole purpose of making that provision is so that those Members shall be able to weed out the trivial from the important complaints. I think one must admit that there have been important complaints at times—not very frequently,
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I am thankful to say—against certain maladministration in the Health Department. For that reason, I sincerely hope that this Amendment will go through.
4.39 p.m.
LORD PLATT: My Lords, as I left the Hospital Service some 18 months ago, I think that I have no longer any interest to declare. After a good deal of thought and study—because in many ways it would have been easier for me to take a contrary view—I have come to the conclusion that I ought to speak and, if necessary, vote against the Amendment. I should be very unhappy if, by saying this, it was thought that I was trying to take the side of the doctor against the very proper rights of his patient to complain of his actions. This would be inconsistent with the views I have held all my life. I have indeed always taught my students that the patient is nearly always right, and in various correspondence which crops up from time to time from the Patients' Association I frequently find myself on the side of the patients.
I am somewhat swayed, though by no means entirely, by arguments that to include the hospital service might overload the Parliamentary Commissioner at a very early stage, and make his job very difficult. There are only two arguments which seem to me to be serious on which I would personally reject this Amendment. The first is that I believe—and in a way I think the noble Lord, Lord Reay, agrees with me—that this Bill is not meant to cover the actions of individuals pursuing their proper professional activities. Also I believe, with others, that with hospital complaints it will be difficult, or almost impossible in many instances, to separate the clinical from the purely administrative. Take, for instance, from many instances which could be given, the case where a mother is prevented from visiting her child. The clinical question immediately arises, "Was it in the interest of the treatment of the child's illness that the child should not have been visited by its mother?" I can think of nothing more calculated to infuriate a complainant than to find that while half his complaints can be dealt with by the Parliamentary Commissioner, the other half cannot.
The noble Lord, Lord Reay, has said that the actions of doctors would in any

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case be excluded—I do not think he said exactly this, and I hope that I am not misinterpreting his remarks—because the patient has the right of appeal to the law. But, of course, this arises only in cases where the patient has, or claims to have, suffered harm through the wrong action of a doctor. Unfortunately, there are a number of cases where some members of my profession act in an imperious and, maybe occasionally, arrogant way, but the patient has not suffered material harm and could hardly go to law with such a case. It may be that the professional activities of, for instance, a hospital architect could be interpreted as actions on behalf of central Government, but in my view to equate the actions of doctors and nurses in caring for their patients with administrative actions carried out on behalf of central Government would be to introduce a new and possibly disastrous look at professional duty.
During all the years when I served in the hospital service, when I was treating a patient it never occurred to me that I was performing an administrative act for or on behalf of central Government. It may be that unknowingly this was precisely what I was doing, but I am glad to say that it never occurred to me during a consultation. If I take this view as a responsible doctor or ex-doctor. I have to be satisfied that the patients' rights are met in another way. The circular issued by the Ministry of Health a year ago goes some way to meet this and should be given a further trial.
My view—and this really brings me to my second point—is that if the patients' rights are not adequately met by present regulations this is not the way to put them right, for the reason already given—if for no other—that it separates different parts of the profession. Again, I can think of little more infuriating to the complainant than to find that the part of his complaint which relates to the hospital doctor comes within the ambit of the Parliamentary Commissioner, but that after being discharged home to his general practitioner it is no longer possible for the Parliamentary Commissioner to deal with exactly that same complaint or the continuation of it. Finally, I am comforted to remember that should noble Lords in a majority agree with me, and should it later be
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found that we were in fact wrong, this can be amended by an Order in Council.
4.46 p.m.
LORD MITCHISON: My Lords, I feel very strongly that this Amendment ought not to be pressed to a Division. With respect, I think that it would do a great deal of harm to have it pressed to a Division, whatever the result. One or two factors must be considered here. First of all, all of us who have served in another place know the type of complaint which one receives about the hospital service. I do not want in any way to exaggerate—in fact, I want rather carefully not to exaggerate; but quite a high proportion of complaints, at any rate, fall into one of two classes. One is of complaints which have either little substance or no substance, and are often motivated by some deep element of emotion which leads people to feel things in a way which, if they were considering the position more calmly, they might not feel.
The other class of complaints seem to arise from a sort of general suspicion of doctors. I respectfully entirely agree with what was said by the noble Lord who has just sat down, who knows more about this, or at any rate from a different angle, than I do. The Ombudsman's business is to deal with maladministration, and if a doctor makes a mistake in diagnosis or treatment, or in any other exercise of his professional skill, clearly that is not maladministration. Who is he maladministering—himself or what? So that if the Ombudsman had any responsibility in this matter, he would have to confine himself to maladministration and to keep off the whole clinical aspect of the matter. There would have to be not only the true distinction, but also the distinction as it might appear to the patient concerned, because all these cases—and one must recognise this—contain a very strong element of emotion, suspicion and the rest of it. Even where there is a wholly reasonable case, one cannot put that aside.
That is the first point and, as I see it, it involves a distinction which, whatever reality it may have in the law or in the terms of an Act of Parliament, has singularly little reality in what we are now considering; that is, the mind of the patient affected. He does not draw

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this kind of distinction, and if the Ombudsman is obliged to draw it it will make things very difficult for him. I use the word "Ombudsman" (I know that it is not the right one) for the purpose of convenience.
There are two other points which seem to be rather conclusive in this case. The first is that no one has yet said, except very tentatively, that there is anything wrong with the working of the present arrangements, which have been working for some considerable time. I quote from a Written Answer given by the Minister in another place on December 8, 1966. The object of these arrangements, he said, is:
"to ensure that all such complaints"—
that is to say, complaints by and on behalf of patients in connection with the hospital service; it is very wide—
"are received sympathetically, dealt with promptly, and seen to have been fully and fairly discussed."—[OFFICIAL REPORT. Commons, 8/12/66, col. 372.]
Leaving aside for a minute the distinction between maladministration and lack of professional skill or judgment, what more could the Ombudsman do than is already being done in this way? The noble Lord who moved this Amendment fully realised this, because all he said about it, I think—and I took a note of his words at the time—was to object that the present procedure is not widely known. I do not know how that can be. I should have thought that if anyone wanted to complain he would find out how to do it quite quickly, and that it was in everyone's interest—at least, everyone who was acting properly in the matter—to see that he knew at once the right way to get his complaint dealt with. After the part I have quoted, there is a whole column of the OFFICIAL REPORT of another place setting out the procedure. I will not weary your Lordships by reading it but it sets out a quite careful procedure designed to deal with different types of complaint, both as regards their seriousness and as regards their general character.
I think I am allowed, in this somewhat personal Chamber, to say that we have a remarkably good Minister of Health at the moment, and I think that everybody, apart from Party, recognises it. I am quite certain that the present situation would not have continued for so long as
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it has done if there were obvious improvements to be made. I am sure the Minister would have known about any deficiencies. He is the kind of man who finds out for himself, and he is quite undeterred by any minor obstacles in his way, as everyone knows. I noticed that in another place there were a number of complimentary references of this character—and that is important when we are considering what is happening at present.
My Lords, what we are really considering to-day, as I see it, is not a question of whether this type of complaint should never be investigated by the Parliamentary Commissioner (to give him his right name) but whether this should be stated in the Bill at the moment. This particular paragraph, of course, was put back on Report stage in another place, and, at the same time, in the course of the same sitting, a clause was introduced to allow the Minister of the day, by an Order subject only to the Negative Resolution procedure, to take it out. That is to say, if you take the paragraph out, you let the letter of it in, because there are excluding paragraphs; and accordingly it would be open to the Minister of the day at any time to make this Order, to put back what it is now sought to exclude from the Bill as it is, and thereby to do what is intended to be done by this Amendment.
But there is a difference. This is an experiment (I am talking about the Parliamentary Commissioner generally, and this Bill), as I think was generally admitted by everyone on Second Reading. In the circumstances, I should have thought that, given the necessary, inevitable character of the complaints; given the difficulty of dividing in practice between maladministration and lack of professional skill or judgment; and given also the fact that there is other machinery working at present, and that it does not follow that either the other machinery or what the Parliamentary Commissioner might do would be the ultimate solution—given all that, and this being, I repeat, an experiment, I ask: is it wise to try to put this rather doubtful field of investigation into the Bill now?
It seems to me that it would do a great deal of harm. We are dealing not just with ourselves, not even just with the medical profession. We are dealing with a large number of sick, hurt and aggrieved

1371
people, and one wants them to be dealt with in the right way. One certainly does not want to see a way which may be the wrong way put into the Statute when there is machinery for putting it in later if a further trial should prove that it would be proper to insert it. I beg your Lordships to bear in mind that it is a further trial of two things. The first is how the experiment of the Parliamentary Commissioner works—incidentally, if he were to try to do what is now proposed, it would add considerably to his staff and his cost—and the other is what exactly is happening in connection with the present procedure, as was described in the Written Answer on December 8.
I go one stage further. I think that in the world we live in to-day, in this country, the professions, be it the teachers, the lawyers or, in this case, the medical profession, are very properly subject to review. I think one must be very careful about this. One is dealing with matters of very great importance, not only to the individuals concerned but to the community, and one is dealing with a facet of our life which seems to me to be singularly difficult to deal with and singularly easy to make a mistake about. I would say one thing to your Lordships—and I am afraid that I have been a little long: I earnestly hope that nobody will think that this is a way of "getting at" the Government, or of defending the Government, or any nonsense of that sort. It seems to me to be a very serious matter. I have no doubt whatever of the right answer, and I earnestly hope that there will not be a Division, whatever the result might be.
4.57 p.m.
LORD GRENFELL: My Lords, I want to say just one word—and, as the House will know, I am chairman of a hospital management committee. We get complaints. Of course we get complaints—all hospitals do. But usually one finds that these are due to misunderstandings, perhaps between a doctor and a mother or father; or it may be that one or other is a little irrational. Parents and friends are always rather irrational when their loved ones are in hospital.
What happens is that they either write or come to me, or to the group secretary, and we discuss the matter. Usually, with just a little understanding, we can clear
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the matter up in a very few moments. I think it would be disaster if an irrational person, worried about somebody in hospital, with some small complaint, could rush off to the Ombudsman so that it all came to light, with the danger of the matter being blown up to such a degree that it was difficult to settle it. If it can be left with the hospital management committees and the boards, and so on, I am sure that that is by far the best way. I hope that this Amendment will not be pressed.
LORD AIREDALE: Before the noble Lord sits down, may I point out that nobody can go "rushing off" to the Ombudsman? If anyone feels he has a complaint he must first rush off to a Member of the House of Commons; and a Member of the House of Commons will not rush off to the Ombudsman if he thinks that the matter can be dealt with more easily without the necessity for the Ombudsman to investigate it.
LORD GRENFELL: I quite understand that, but surely it is easier to come straight to the hospital concerned. Some people may not realise this and will go straight to the Member of Parliament, who will feel that he has to take it on further. I am sure it is right that this should not occur.
EARL FORTESCUE: Even if the question of medical skill is excluded? It appears to me—and I think it will appear so to others—that there are a number of things that can happen in the Health Service in which the Ombudsman might well intervene. Such a case recently came to my notice. It concerned a woman with a broken leg. When she saw her doctor there was no inquiry as to the home circumstances, and no notification to the district nurse. Later, the doctor ordered physiotherapy, which was only available five miles away. There was no mention of transport. When the question of transport arose the woman was told, "Oh yes, there is plenty of transport". In fact, although ordered the transport frequently did not turn up; and there was no machinery whereby the doctor could know that the woman was not getting the physiotherapy that he had prescribed. I think that might be within the province of the Ombudsman; it is purely administrative.
5.2 p.m.
LORD SHACKLETON: My Lords, I think this paragraph in Schedule 2has probably caused as much controversy as any issue we have debated in the Bill. It has certainly given rise to a great deal of discussion. I hope that in the process of this discussion there has been a certain amount of enlightenment seeping in, although I failed to detect this in the speech of the noble Lord, Lord Reay, who I thought moved his Amendment in somewhat excitable language.
I should like to make another attempt to explain to him the purpose of the Bill—and this is a Bill that the Government have introduced. It is to enable the Parliamentary Commissioner to investigate complaints of maladministration in connection with action taken by or on behalf of a central Government Department and authorities listed in Schedule 2 of the Bill. It has been made clear all along that the scope of the Commissioner does not extend to services for which there is an autonomous local statutory authority. Indeed, no such body is listed in Schedule 2 of the Bill. It is not included in the Long Title of the Bill, although that could be amended. I should like to apply this basic principle to the subject we have been discussing to see how it affects the various bodies which are responsible for the administration of the National Health Service. This is not without relevance to the remarks of the noble Earl, Lord Fortescue.
As your Lordships know, there are three main parts to the National Health Service; and my noble friend Lord Addison dealt with them in a very knowledgeable speech. They are: the general practitioner services arranged by the local executive councils; the local health authority services, run by the local authorities; and the hospital service, run by the hospital authorities. Both the executive councils and the local authorities are local bodies set up under the National Health Service Act. As such they do not act on behalf of the Crown, and they are therefore automatically excluded from the scope of the Commissioner. Hospital authorities are also local bodies set up under the National Health Service Acts. Their staff are not civil servants any more than the staff of local health authorities or executive
1374
councils—or for that matter general practitioners, opticians, dentists or chemists who work within the Health Service. They are not just the local offices of a central Government Department. I stress this again. They are not part of central Government administration in the way that the Tax Office is or a local office of the Ministry of Labour or Ministry of Social Security. But technically these hospital authorities do act on behalf of the Minister of Health or the Secretary of State for Scotland. To ensure uniformity of treatment therefore it was decided—though this was not the sole reason—to make specific provision to exclude hospital authorities from the scope of the Commissioner—hence paragraph 8 of Schedule 3.
But first let me make it clear that this exclusion in no way affects the position of the Ministry of Health itself so far as the Commissioner is concerned. Like any other central Government Department or authority listed in Schedule 2, any failure within that Department in the exercise of their administrative functions in connection with any part of the National Health Service, including the hospital service, will be susceptible to investigation by the Parliamentary Commissioner. Among these functions will be the Ministry's responsibility for the special hospitals—Broadmoor, Rampton and Moss Side. Also included in paragraph 8 is the Public Health Labaratory Service Board; but since no noble Lord has referred to this, I will not take up your Lordships' time by dealing with it fully.
The most important of the reasons against including the hospital service is that it is only one part of the National Health Service. The noble Lord, Lord Reay, has said that it was unsound to argue that if you cannot do justice to all you must refrain from doing justice to one part only. This is an attractive argument, but this is not the sole reason for excluding the Health Services. I will try to give the reason for this. There would be really serious practical difficulties if we were to apply the provisions of the Parliamentary Commissioner Bill to one part of the Health Service. In most cases, patients receiving hospital treatment normally begin by consulting their family doctor. Following the completion of hospital treatment they may

1375
need to avail themselves of the services provided by the local health authority. Thus, for the same ailment, patients may need to use the services provided by all three parts of the National Health Service—and not necessarily one at a time.
In the event of complaints involving the whole chronicle of events it would be a really startling proposition if the Parliamentary Commissioner were able to investigate only that facet of the complaint relating to the services administered by the hospital authority and not the services which are the responsibility of the local health authority and the local executive council. Even this might in certain types of cases—psychiatric and geriatric, for example—prove to be difficult to do in practice because the borderline of responsibility between the hospital authority and the local health authority is often not easy to distinguish. A further point which must be borne in mind is that by the very nature of the service concerned, complaints—and this has been made very clear by a number of noble Lords; and it was very valuable to have had the opinion particularly of the noble Lord, Lord Platt—will frequently involve problems of clinical judgment.
I suggest that there are special difficulties here. Whereas it is possible to conceive of a system in which they can be overcome, the difficulties are of a kind which we must face up to before we amend the Bill in the way suggested. When the Minister of Health or the Secretary of State has before him a complaint about a hospital he is able to call on the advice of his own medical staff; and, if necessary, the staff can comment on what is said from a clinical point of view. In theory one could also give the Parliamentary Commissioner some medical staff and he could be advised by them. But we should then have no less than three successive medical opinions on hospital cases involving clinical judgment. There would be the opinion of the hospital doctors themselves; there would be the opinion of the Ministry of Health doctors, and there would then be the opinion of the Parliamentary Commissioner's own medical advisers in a matter of professional clinical judgment. If there were a difference of opinion, it would be very difficult to say who was right and who was wrong, and there would certainly
1376
be no hierarchical relationship. It is rather important to stress that there would be no hierarchial relationship to settle the matter. We have to recall that central Government is hierarchical, coming up to the Minister. Here we have a very different type of organisation.
Another alternative would be that, when the Commissioner came up against a clinical question he would say that he had no expertise in that field and must therefore forbear to comment. He would have to accept the word either of the hospital service or of the Ministry of Health doctors. This again does not seem to be the kind of arrangement which the Bill contemplates, or indeed which I believe any noble Lord would wish, and it seems unlikely that it would be accepted without protest by claimants and be damaging to the image and reputation of the Parliamentary Commissioner.
Clinical judgment enters into so many hospital complaint cases that the inclusion of hospital authorities in the Bill, on the basis that the Commissioner could do nothing about clinical judgment, would really lead to its being regarded as a sham. And it is important to bear in mind that there is a very wide variety of complaints which hinge on the issue of clinical judgment. I have already mentioned that the Commissioner will have within his scope certain directly administered State institutions, and questions of clinical judgment might arise. But these are exceptional and they are organised in a very different way from the National Health Service. If it is suggested that the Hospital Service is brought in only in respect of complaints which concern non-clinical matters, I should like to ask the noble Lord how he distinguishes between a clinical and a non-clinical matter. Frequently they are inextricably mixed. Even if we were able to isolate the non-clinical elements of a complaint, they could seldom be investigated effectively without also going into the clinical side.
For instance, a very obvious complaint about whether a patient needed treatment would involve a clinical judgment and could not be separated from a dispute as to whether the facilities of the hospital were offered or denied to a patient. There might be a complaint from a patient that he had had to wait for a long time in

1377
the out-patient department and that the appointment system was faulty. But the effectiveness of any investigation into the matter would be limited severely if there was no assessment of the clinical considerations likely to underlie the delay. For example, priority might have to be given to emergency cases, and the doctors might possibly be called away suddenly to visit patients in a ward; or there might be some event which was not foreseeable.
I am not saying there is no maladministration in this field; I am saying that in many cases it would involve a question of clinical judgment. There might be a complaint about delay in admitting a patient to hospital several weeks ahead of his operation, or there might be complaints of favouritism. The question whether a patient should be admitted to hospital, and if so when, rests on clinical judgment, not only in relation to the patient concerned but also in many cases in relation to the needs of other patients.
Under Section 3 of the National Health Service Act 1946 the duty of the Minister to provide a hospital service is limited to such as he considers necessary to meet all reasonable requirements; that is to say, there is a discretion. There might be a complaint that a particular patient had been refused some treatment, or some drug, at a particular hospital, but again this is fundamentally a matter of clinical judgment in regard to the needs of the patient.
I would make the further point, which has already been made by noble Lords (particularly in a notable speech by my noble friend Lord Mitchison, and there were interesting references by the noble Lord, Lord Grenfell, from his experience), that there is already a system for dealing with complaints concerning the Hospital Service. This has recently been developed further. As my noble friend Lord Mitchison said, a circular was issued by the Ministry of Health giving comprehensive guidance on the procedure to be followed in the handling of complaints, and there is power in certain circumstances to set up an ad hoc independent tribunal including both a doctor and a lawyer. Again, I am not saying that this procedure could not work alongside that of the Parliamentary Commis-
1378
sioner, but I would strongly urge your Lordships to give this system a trial and not complicate the Bill at this stage.
My Lords, if we bring this large area into the Bill, we are undoubtedly adding very greatly to the burden of the Parliamentary Commissioner. Apart from the arguments on merit which I sought to put forward, I would urge your Lordships to confine the activities of the Parliamentary Commissioner to the central Government at this stage which has always been the purpose and object of the Bill. I know that the Liberals have attempted to bring in local authorities, and that they have a somewhat enthusiastic desire to extend the Bill much more widely than was originally intended. In this matter they can speak with a clear conscience because when they were the Government—which was a very long time ago—they did not put themselves in the position of refusing to introduce a Bill to set up a Parliamentary Commissioner. But I find it rather surprising that the Conservatives should support them.
As noble Lords have pointed out, this is not a Bill on which there should be Party political controversy, and I am quite certain that were the noble Lords who are supporting the Liberals in office to-day, they would not dream of imposing this additional responsibility on the Parliamentary Commissioner. Do they in fact want doctors, who operate as professionals in their own field, to become in this respect like civil servants? There was an absolute guarantee to doctors when the National Health Service was set up that they would not be civil servants. The procedures applying to civil servants are the kind which are appropriate for administration and which would not be appropriate for doctors.
I hope very much that if the noble Lord, Lord Reay, decides to press this Amendment to a Division your Lordships will reject it. This is a Bill which is generally welcomed. At times the welcome has been a bit muted, but I hope that we shall give it a send-off. The Government have been pretty accommodating in your Lordships' House. We have treated matters here purely in terms of the practical operation of the Bill. This Bill could come into effect very soon. If this Amendment is accepted and not subsequently rejected by the House of Commons it will undoubtedly mean that

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the setting up of the Parliamentary Commissioner will be delayed. We hope that the Parliamentary Commissioner will begin to operate possibly round about April 1, and I make a plea to noble Lords opposite not to vote for this Amendment.
This is a matter of practicality only, this is not a major Party political issue. I cannot see any virtue in sending this back to the Commons only to have them reject it again. If your Lordships decide to divide on this Amendment, I hope that as many of your Lordships who have listened to the arguments from the noble Lord, Lord Platt, and the noble Lord, Lord Grenfell, and others, will bear in mind that the great weight of experience in this House has been against the inclusion of the Hospital Service in the Bill. I hope that the Government will be supported and that we shall not have to send this Bill back with this Amendment to another place.
LORD AIREDALE: My Lords, before the Minister sits down, may I say that if he uses the argument that doctors must not be treated as civil servants, will that not prevent him from ever acceding to a proposal of this kind?
LORD SHACKLETON: My Lords, if the noble Lord would like me to go on with this I will do so. The objections are very serious. There has been no discussion with the doctors. If a doctor works as a civil servant, he is a civil servant, but a doctor in the hospital service is not a civil servant. I must express my personal opinion. Although undoubtedly this Government and subsequent Governments will consider this again, I am very doubtful whether the hospital service can be brought within the ambit of the Parliamentary Commissioner as at present envisaged.
LORD REAY: My Lords, I do not think that it will be necessary for me to attempt to meet the arguments of the noble Lord, Lord Shackleton. I have already stated my opinions on the questions to which he replied, and it is not surprising that nothing new has come up. There is one question I should like to ask the noble Lord. He implied that it has all along been the intention in the Bill that local statutory bodies and the hospital service should be excluded, and also that other Amendments would be
1380
necessary if this paragraph were deleted. Is that his current opinion, or is it undoubtedly necessary?
LORD SHACKLETON: My Lords, I do not understand the noble Lord's reference to other Amendments.
LORD REAY: In the Long Title, for example.
LORD SHACKLETON: My Lords, I drew an analogy with the local authorities and pointed out that the hospital service is dissimilar to the central Government Departments, which are servants of the Crown, and that hospital boards are not like regional offices of a Government Department. None the less they operate on behalf of the Ministry of Health and technically they come within the Bill and the Long Title.
LORD REAY: My Lords, the noble Lord inferred that it was a technical matter, but I think it is debatable whether it is technical. The effect is that they are answerable to a Minister in Parliament. They are not within the ambit of the local authorities in so far as there is no democratically elected element in their management. To this extent they are unique, but the argument still remains for considering that the Parliamentary Commissioner's power should apply to them and to their activities. The noble Lord envisaged the clinical difficulties which we must face. I must accept that a great many complaints will be concerned with these difficulties. The Parliamentary Commissioner will not investigate these. He will see inmost cases that there is no reason to suspect that a decision taken by a doctor in a case would not be taken in other than in good faith, and presumably it would be outside his competence to provide an opinion on the matter.
This Amendment had a great deal of support in another place. The noble Lord, Lord Shackleton, wished to pray in aid the support of the doctors, but I think that this is largely a statistical accident. In another place there were managers of Regional Hospital Boards who supported this Amendment, and it was carried in Committee. In pressing this Amendment I would say that it implies no attack on the hospital service as a whole. I say this in view of a remark made by the noble Viscount, Lord Addison. If one objects to anything,

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perhaps one objects to the complaints procedure in that it does not go far enough as it is now operating. As I said, this procedure can never be made known to people who want to complain, and it is the wrong type of complaint procedure. Moreover, there may be complaints against the working of the complaints procedure inside the hospital service and it would need somebody like the Parliamentary Commissioner to investigate these.
If the Bill were passed with this paragraph excluded and with the hospital service in, this would be an earnest of the Government's intention to carry the activities of the Parliamentary Commissioner into the local area; and this is something which the Government have indicated they would consider doing in regard to local authorities as a whole. I see no reason to wait in this respect. The Government have withdrawn to the extent that they have now made it possible at a later stage to include the hospital service. I think that the Bill would get a better send off if we were to include it immediately, and I would press this Amendment.
LORD SHACKLETON: My Lords, before the noble Lord sits down, may I ask whether he is prepared, if this Amendment is accepted, to accept the inevitable consequence that the setting up of the Parliamentary Commissioner will be delayed?
LORD REAY: By how long?
LORD SHACKLETON: Months, possibly.
LORD NUGENT OF GUILDFORD: My Lords, may I add one word before we part with this Amendment?
LORD CHAMPION: My Lords, may I remind the noble Lord that we are not in Committee.
LORD NUGENT OF GUILDFORD: May I ask leave of your Lordships to make one comment before we come to a decision about this? I was joined by noble Lords on the Liberal Benches in moving this Amendment. I should like to thank the noble Lord, Lord Shackleton, for making out the case against the Amendment so cogently. I recognise that it is a powerful case, but there is the
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exceptional case of complaint against the hospital service. Somebody has made a serious complaint, it is rejected, and there is no way of following it up.
LORD SHACKLETON: I must point out to the noble Lord that his right to speak under Standing Orders does not give him the right to put in new matter. He is familiar with that, and I feel bound to point it out. I do not wish to restrain him, because I am sure that he wishes to be helpful to the House, but if he looks at Standing Order No. 28 he will see that this is so.
LORD NUGENT OF GUILDFORD: My Lords, I am not aware that I am bringing in any new matter. I am only making a comment on the noble Lord's remarks. If I am not entitled to do so of course I will sit down, but I was not under the impression that I was out of order. I have a comment to make on one or two replies of the noble Lord which would be helpful to the House in reaching a conclusion.
LORD SHACKLETON: My Lords, the noble Lord puts me in a difficult position because I am taking part in this. The last thing I want to do is stand on procedure, but I notice a certain restiveness on the part of noble Lords. Standing Order No. 28 says that no noble Lord may speak twice on any Motion, whether on a Bill or other matter unless it be to explain some material point, no new matter being introduced, and that not without the leave of the House. This does not apply to Committee. I am sure that the House would give the noble Lord leave to speak. Although I am quoting from the Companion, it precisely follows the terms of the Standing Order and it is very specific. There is a tendency among us always to think that Report stage is the same as Committee. With that, I will leave it to the judgment of the noble Lord.
LORD NUGENT OF GUILDFORD: My Lords, I thank the noble Lord for his explanation and information. The last thing I wish to do is to strain the patience of the House, especially when I think our cause is a good one. Therefore I will proceed no further.
5.31 p.m.
On Question, Whether the said Amendment (No. 11) shall be agreed to?
Their Lordships divided: Contents, 47; Not-contents, 59.

CONTENTS

Airedale, L. [Teller.]

Ellenborough, L.

Margadale, L.

Albemarle, E.

Elliot of Harwood, Bs.

Massereene and Ferrard, V

Ashbourne, L.

Erroll of Hale, L.

Merrivale, L.

Asquith of Yarnbury, Bs.

Ferrers, E.

Nugent of Guildford, L.

Balfour of Inchrye, L.

Gladwyn, L.

Oakshott, L.

Brecon, L.

Goschen, V. [Teller.]

Ogmore, L.

Brooke of Cumnor, L.

Gridley, L.

Reay, L.

Brooke of Ystradfellte, Bs.

Grimston of Westbury, L.

Runcorn, L.

Byers, L.

Harlech, L.

St. Aldwyn, E.

Carrington, L.

Hawke, L.

St. Helens, L.

Colville of Culross, V.

Henley, L.

St. Oswald, L.

Colyton, L.

Howard of Glossop, L.

Sandford, L.

Denham, L.

Jellicoe, E.

Strange of Knokin, Bs.

Derwent, L.

Killearn, L.

Stuart of Findhorn, V.

Drumalbyn, L.

Kilmany, L.

Teynham, L.

Dundee, E.

Kinnoull, E.

NOT-CONTENTS

Addison, V.

Greenway, L.

Platt, L.

Ailwyn, L.

Grenfell, L.

Plummer, Bs.

Ampthill, L.

Henderson, L.

Popplewell, L.

Archibald, L.

Hilton of Upton, L. [Teller.]

Raglan, L.

Arwyn, L.

Hughes, L.

Rhodes, L.

Balerno, L.

Hurcomb, L.

Ritchie-Calder, L.

Beswick, L.

Iddesleigh, E.

Royle, L.

Blyton, L.

Kirkwood, L.

Sainsbury, L.

Bowles, L. [Teller.]

Latham, L.

Shackleton, L.

Brockway, L.

Leatherland, L.

Sorensen, L.

Burden, L.

Lindgren, L.

Stocks, Bs.

Caccia, L.

Longford, E. (L. Privy Seal.)

Stonham, L.

Cawley, L.

Maelor, L.

Strang. L.

Champion, L.

Mitchison, L.

Summerskill, Bs.

Crook, L.

Morris of Kenwood, L.

Taylor of Mansfield, L.

Effingham, E.

Morrison, L.

Walston, L.

Fleck, L.

Moyle, L.

Wells-Pestell, L.

Gaitskell, Bs.

Pargiter, L.

Willis, L.

Gardiner, L. (L. Chancellor.)

Peddie, L.

Ypres, E.

Granville-West, L.

Phillips, Bs.

Resolved in the negative, and Amendment disagreed to accordingly.

DEER (AMENDMENT) (SCOTLAND) BILL [H.L.]
5.39 p.m.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Commitee.—(The Duke of Atholl.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD MERTHYR in the Chair.]
Clause 1 agreed to.
VISCOUNT MOUNTGARRET VISCOUNT MOUNTGARRET moved, after Clause 1, to insert the following new clause:
". Subsection (2) of Section 23 of the said Act (unlawful taking or killing of deer) shall
1384
be repealed and replaced by the following subsection:—
'(2) Subject to Section 33 of this Act, it shall be an offence to take or wilfully kill deer otherwise than by shooting, and shooting for the purposes of this section means discharging a firearm or using ammunition, as defined in the Firearms Act, 1937, other than as prohibited by Schedule (Prohibited Firearms and Ammunition) to this Act.'"
The noble Viscount said: With your Lordships' permission, I should like to speak to Amendments Nos. 5 and 6, together with Amendment No. 1, as they are consequential on this Amendment. In moving the Amendment, I wish to make it perfectly clear that I in no way seek to be controversial or to suggest anything which might hinder the passing of this excellent Bill. I merely wish to encourage your Lordships to be humane, and there is nothing controversial in humanity.
The object of the Amendment is to try to prevent the use of inadequate

1385
weapons for the killing of deer. As the Deer (Scotland) Act stands, almost any weapon may be used, presumably more in the hope than the expectation of success. So far as I can establish, the noble Marquess, Lord Willingdon, first raised this point some years ago, but regrettably little impression seems to have been made. However, in 1963 Parliament saw fit to prohibit most unsuitable weapons in the Deer Act of that year, which applies to England but not to Scotland. I cannot understand why, if it is thought that a ·22, for example, is unsuitable for English deer, it is considered suitable for Scottish deer. They are the same deer and the same weapon, and it seems to me to be quite illogical.
The cruelty that has been perpetrated on deer by ignorant people who attempt to kill them with shot-guns and the like literally has to be seen to be believed. These noble beasts, which once inspired Landseer to paint a masterpiece, who grace the glens and corries where they make their home, in billowy seas of shifting mists, whose angry roar of challenge to their rivals breathing defiance to the world is an inspiration to all, are peppered like vile rats. They are seldom killed; the shots of smooth-bore guns merely penetrate the skin and inflame the flesh. The wounds may become gangrenous or, if by chance the shot is taken close enough, a leg or a shoulder may be broken. This makes the winter even harder for the poor beast—a winter during which it would probably perish in a slow, lingering death. If they survive this attempted butchery, they hobble round the hills maimed and handicapped.
Much the same argument applies to a ·22 riffle. The weight of the bullet is far too small—even the latest type, which some people pretend is sufficient—to do its job properly. It has about the same effect on a stag as a No. 6 shot cartridge has on a goose. On more than one occasion I have killed a stag (or an apology for a stag) with several ·22 bullets lodged firmly in and around the shoulder. On the last occasion I personally removed nine lumps of lead, each of which would have been sufficient to have killed the beast if a suitable weapon had been used. As it was, the beast was crippled and underweight, the meat was inedible, and the sight disgusting. As a nation which prides itself on its sportsmanship, we
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ought to be ashamed of ourselves for allowing, or continuing to allow, this sort of thing to go on. I should perhaps say a word about the restriction of solid bullets. If such a bullet is fired from a high velocity rifle, it has a tendency to go clean through the animal, which means in all probability that the quarry is wounded, and any other animal which happened to be in the line of fire might get killed instead.
I have heard several arguments why this Amendment should not be pressed. I am told that it could be inserted into the Criminal Justice Bill, which is now on its way to your Lordships' House. I am told also that the Government will not agree to the Amendment because the farmers and crofters would get upset, which might defeat the whole Bill. I do not agree with these arguments, although some of them may have a certain amount of validity. To take the first point, I think there would be a certain danger that the noble Lord who presumably will be conducting the Criminal Justice Bill in this House might well seek to defeat an Amendment on the lines I am now suggesting, on the grounds that it was more applicable to a Deer Bill and should be incorporated in that. Therefore, I should find myself back in square one.
I see no reason why this Amendment should unduly affect the farmers and crofters. The only argument is that it might cost them some money to obtain weapons which are legal. I believe a lot of them have only shot-guns and think they are adequate for the purpose, but for the small sum of about £65 it is perfectly possible to buy a B.S.A.. ·276 rifle. I do not think it is asking too much for the sake of decency, on the one hand and, on the other hand, the knowledge that a farmer possesses a suitable weapon. I cannot agree that this Amendment would cause the whole Bill to be defeated in another place. If the clause was not approved there it could always be taken out, but at any rate your Lordships would not lay yourselves open to the charge of inhumanity.
I would add that I have the support of the Deer Society and the chairman of the Red Deer Commission, who himself states in a letter to me that he did not think anyone could possibly object to a clause restricting firearms. To sum up, I

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ask your Lordships to give this Amendment your approval on the grounds that it brings the Scottish Act more into line with the English Act, and that it will put an immediate end to the wanton cruelty that is annually inflicted on deer, who deserve a better fate. I beg to move.
Amendment moved—
After Clause 1, insert the said new clause.—(Viscount Mountgarret.)
VISCOUNT MASSEREENE AND FERRARD: I should like briefly to support my noble friend on humane grounds. It is quite illogical that we should have this prohibition on unsuitable firearms for deer in the English Act but not in the Scottish Act. Like my noble friend I have shot stags which, when they were skinned, were found to be full of buckshot and ·22 bullets, and it is really inhumanly cruel. I do not wish to delay your Lordships, so I will say no more on that aspect. I can quite understand that perhaps the present Bill is not the correct one in which to insert this Amendment, but I hope that in the not so distant future Her Majesty's Government will seriously consider this matter and bring in legislation to correct this absurd anomaly. I most heartily support my noble friend in this Amendment, which is moved entirely for humane reasons.
THE DUKE OF ATHOLL: I have listened with great sympathy to both my noble friends who have spoken, and I agree with almost every word they say. Personally I think the use of inadequate weapons on deer is extremely cruel and ought to be stopped as soon as possible, but I am afraid I cannot recommend your Lordships to let this Amendment go through in this Bill. Contrary to what my noble friend Lord Mountgarret says, I think it is almost certain that were this Amendment to be inserted in the Bill, the farming interests in another place would see that it got no further because, regardless of cruelty, most farmers at the moment find that the shotgun is the most effective weapon against marauding deer. This is, of course, a pity and is something we all deplore, but none the less it is a fact of life.
I should also like to point out to my noble friend that, under his Amendment, one could not use a shot-gun against roe deer. I think I should have the support
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of most people who have woodlands in Scotland when I say that there is seldom any practical way of keeping roe deer under control except by shooting them with heavy shot from a shot-gun. Since the roe deer is much smaller than red deer or fallow deer, if it is sufficiently close, and if the shot-gun is fired by someone who is a reasonable shot, there is no reason why the deer should not be killed stone dead. It is very difficult in thick cover and thick undergrowth to control roe deer in any other way. The brief I had from the Deer Society specifically excluded roe deer from their provisions that shot-guns should not be used against deer. Having said this, I hope that my noble friend will withdraw his Amendment, but if he does not I must ask your Lordships to vote against it.
Loan SOMERS: May I say a word or two in support of this Amendment? I am rather surprised at the attitude the noble Duke has taken. It is always surprising to me to hear people say that they entirely approve of everything that has been said, and that the Amendment is going to improve a most undesirable situation, and then to find that they suddenly end by saying, "But I hope he will not press this Amendment, and that it will not be carried", simply because we dare not press any Amendment which we think might not be agreed to in another place. The respect which I have for another place is very genuine, but I feel that it is time that we stopped being so afraid of expressing our own opinion that we never say anything which we feel would not receive wholesale approval in the other place.
VISCOUNT MASSEREENE AND FERRARD: With due respect to my noble friend, he is really completely off the rails. If this Amendment did go to another place it would probably be agreed to by the Left Wing of Her Majesty's Government. There are other reasons. I feel quite sure that in the future Her Majesty's Government will bring in legislation to put this situation right.
LORD SOMERS: I entirely agree with the noble Viscount. I am merely commenting on what the noble Duke said.
LORD SWANSEA: May I intervene briefly? I have the greatest sympathy with my noble friend who moved this

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Amendment, but I think that it does not go far enough. I have never been able to understand why the restrictions on firearms defined in the 1963 Deer Act did not also apply to Scotland. I hope that if the noble Viscount sees fit to withdraw his Amendment at this stage, and reintroduces it at a later stage, defining the prohibited firearms and ammunition as laid down in the 1963 Act, it will gain much wider support.
5.54 p.m.
LORD HUGHES: I had not intended to intervene in what is a very interesting private quarrel on the other side, but there is a misconception on the part of the noble Lord, Lord Somers. The suggestion by the noble Duke was not made from any fear of what another place might do, but was simply a recognition of the facts of life. This is a Private Member's Bill, and at this stage in the Parliamentary Session its chances of getting through the machinery in another place are very slim. Its chance is improved considerably if it concerns only items to which no one has objection. It is not for me to speculate whether this Bill would receive support from the Left Wing on the Government side, or meet with violent opposition of the Right Wing of the Opposition side: it needs only one objector, and it is lost.
What noble Lords have to decide is this. Do they wish to make a gesture, with which we can probably all agree, and the effect of which is that nothing will be done to deal with this problem, because the Bill will not get anywhere, or are they willing to accept the facts of life and pass a Bill which will get through in another place, and then say, "Let us press as hard as we can for any form of legislation in which this may be done, but accept the regrettable fact that putting it into this Bill will not bring it into operation one day sooner than if it goes into the appropriate measure"?
Some noble Lords may feel that a humane gesture is worth the loss of all the other items in the Bill. What the noble Duke has done is to introduce a Bill to implement one specific item on which the Red Deer Commission asked for legislation. It may well be that they wish legislation on this: it may be that they wish legislation on other matters. But the point upon which the noble Duke has based his Bill is what the Red Deer
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Commission have asked for. I would strongly support him in his plea that we should not, for the sake of a humane gesture, throw away the advantages which we may well secure from the passing of this Bill.
VISCOUNT MOUNTGARRET: I am glad to feel that I have some support on this side for the basis of my Amendment, but I cannot wholly ignore the desires of my noble friend the Duke of Atholl and the noble Lord, Lord Hughes. I agree entirely with what the noble Lord, Lord Somers, said: that if you feel strongly about something, you should push it through; and if it is accepted let another place deal with it in the best fashion they think fit. I am very inclined to ask your Lordships to come to a decision on this point, because I certainly agree with it.
The noble Lord, Lord Swansea, said that I ought to have restricted the firearms in line with the 1963 Act. I think I am right in saying that in fact they are already so restricted.
Loin SWANSEA: Except in regard to shot-guns. That was the point I had in mind.
VISCOUNT MOUNTGARRET: Shotguns were allowed, I think, only for roe deer.
THE DUKE OF ATHOLL: The English Act prohibited the use of shot-guns of less than 12 bore. But it permitted the use of shot-guns of 12 bore, and greater, with suitable cartridges.
VISCOUNT MOUNTGARRET: Then the 1963 Act is equally wrong in this respect. Next year, no doubt, there will be a Report from the Red Deer Commission in regard to 1967, and no doubt it will contain certain matters on which they will require us to pass legislation. If they do not on that occasion ask for restriction of firearms, I shall look forward to bringing up this point again, and possibly following it through with a bit more force. For the present, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 2:
Amendment of section 33 of the Act of 1959
2. Subsections (2) and (3) of section 33 of the said Act (exemptions for certain acts)

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shall be repealed and replaced by the following subsections:—
(3) Notwithstanding the provisions of section 21 of this Act, or of any order made thereunder, it shall not be an offence—
(a) for an occupier of agricultural land or of enclosed woodlands, or for any person authorised by him in writing in that behalf, to take or kill during a close season any deer found on any arable land, garden grounds or land laid down in permanent grass (other than moorland and unenclosed land) forming part of that land, or on such woodlands, as the case may be, and
LORD BURTON LORD BURTON moved to leave out, "Subsections (2) and (3) of section 33 of the said Act (exemption for certain acts)", and to insert:
"(1) In subsection (1) of section 33 of the said Act (exemptions for certain acts) for the words from "prevention" to the end of the subsection there shall be substituted the words "purpose of preventing suffering by an injured or diseased deer, or by any deer calf deprived of its mother".
(2) Subsections (2) and (3) of the said section 33".
The noble Lord said: The object of this Amendment is to ensure that one may legally kill a calf out of season which has for some reason or other lost its mother. Your Lordships may well have found the Amendment on the Marshalled List somewhat complicated. I certainly did, and this is all the more reason for my gratitude to the noble Lord, Lord Hughes, and his officials at the Scottish Office who have drafted the Amendment as it now stands. I am sure this must be an entirely non-controversial Amendment. It has been introduced to legalise what has been a general practice for many years, and which only became illegal by the Deer Act 1959 by what was probably an oversight. If a hind dies or has to be killed for some reason or other, on humanitarian grounds alone, let alone good deer management, it is obvious that any calf it may have under one year old should be humanely destroyed. If it happens that the calf has to be killed during the hind shooting season, then as the law stands at the moment anyone shooting a calf stands a fifty-fifty chance of killing a stag out of season. I think my Amendment should rectify this position, and accordingly I beg to move.
Amendment moved—
Page 1, line 10, leave out from beginning to ("shall") in line 11 and insert the said words.—(Lord Burton.)
THE DUKE OF ATHOLL: My Lords, I am sure we all agree that where possible a humanitarian practice should be enshrined in the law and should not be made possibly the subject of a prosecution. It is undoubtedly an humanitarian practice to kill the calf of a deer when it is under one year old. I am sure that the fact that this was made illegal in 50 per cent. of the cases by the Deer Act 1959 was an oversight at the time. I think the sooner this is rectified the better, and therefore I would ask your Lordships to accept the Amendment so well put forward by my noble friend Lord Burton.
On Question, Amendment agreed to.
6.4 p.m.
VISCOUNT MASSEREENE AND FERRARD VISCOUNT MASSEREENE AND FERRARD moved, in the proposed new subsection 3(a), to leave out "enclosed woodlands" and to insert "woodlands enclosed by a deer fence". The noble Lord said: My object in putting down this Amendment is to try to have the phrase "enclosed woodlands" defined as regards deer. So far as I can ascertain there is no definition of enclosed land as regards deer. As the Amendment says, I should like to include the words "woodlands enclosed by a deer fence" to define enclosed land regarding deer. This is perhaps too strong for agricultural land at the moment, but with regard to woodlands you can have mature woodlands which are surrounded by tumbledown or old rickety pieces of fencing. The deer can have free access into those woodlands, and therefore they can be shot out of season.
In the Second Reading debate I also drew attention to the fact that some farmers I can think of have made a habit of ploughing up pieces of land in the hills and sowing some rye grass, rape, or white turnip and putting a few old fence posts and strands of wire around it so that it becomes enclosed land. Of course, in winter-time every deer comes on to that patch from miles around and farmers can shoot a great number with great profit to themselves and do great damage to the sporting interests of the estate. Of course, you then have a decreased rental on the sporting rights. We

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have seen in the official reports (probably most of your Lordships read the Field newspaper) that in the deer ground in large areas of the Highlands there has apparently been a great decrease in the numbers of deer. It is not, of course, solely due to the unsatisfactory position regarding enclosed land; there are also other reasons which I need not go into now. Certainly none of the reasons is owing to the proprietors of the deer forests of the sporting tenants.
I hope that at some future date, not too far distant, when we have more legislation on the subject of deer, Her Majesty's Government will have this phrase "enclosed woodlands" properly defined legally. As it now stands, it is most unsatisfactory. I do not intend to press this Amendment, but I beg leave to move the Amendment in the hope that I may have some reply from the noble Lord opposite as to his opinions on this matter.
Amendment moved—
Page 2, line 12, leave out ("enclosed woodlands") and insert ("woodlands enclosed by a deer fence").—(Viscount Massereene and Ferrard.)
THE DUKE OF ATHOLL: I have listened with great interest to my noble friend, and I see exactly what he is trying to get at. Perhaps I should first declare an interest, in that I am convinced that if this Amendment were carried it would cost me an enormous sum of money to fence the woodlands in the way which my noble friend apparently considers necessary. It also has several other disadvantages, and perhaps I may briefly enumerate them. The term "enclosed woodlands" has been in common use since at least 1939 and, so far as is known to the Red Deer Commission and other bodies, has not given rise to any difficulties from the point of view of definition.
It has been suggested that some so-called "enclosed woodlands" are not really enclosed; and this, I think, is the problem at which my noble friend is aiming. I would also point out to him that as drafted his Amendment would apply only to killing deer during the close season. The occupier of the woodlands would therefore still have the right to kill deer on enclosed woodlands but not on deer-fenced woodlands during the other parts of the year. This would in-
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troduce into the Bill an anomaly which I think would be undesirable.
It would also have the disadvantage that presumably if woodlands were to be enclosed by deer-fencing they would have to be deer-fenced all the way round. It is my experience—and I think that of most people—that this is not common practice. It is unnecessary and would add a great deal of expense which forestry can ill afford at the moment. Normally, one deer-fences woodlands on the side where they are most likely to be accessible to the deer, the side which is open on to the moorland; woodlands are not normally fenced where they are accessible only from arable land, because one presumes—in many cases probably wrongly —that the deer do not have access to this arable land. In order to be within the terms of my noble friend's definition, I think it would be necessary to deer-fence the woods on all sides.
The Amendment would also introduce difficulties, because in many places woodland and arable land are muddled up, and it would mean that you might be able to shoot deer out of season once they got on to the arable land but not when they are actually in the woodlands. This would lead to difficulties, and I think such a provision would be almost impossible to enforce. I am pleased, and grateful, therefore, to hear that my noble friend does not intend to press this Amendment, which, as I say, seems to me to be slightly impracticable. However, I fully sympathise with the thought behind it.
LORD HUGHES: The noble Viscount asked for my comments. All I wish to say is that I will adopt everything the noble Duke has said, with the exception of his opening remarks. I have no personal interest in this matter, and I should not be involved in any expense if the Amendment were accepted.
VISCOUNT MASSEREENE AND FERRARD: I certainly have no intention of running my noble friend into tens of thousands of pounds' expenditure by reason of erecting deer fences. In Germany or Austria, mature woods are not fenced at all. They are not fenced because the deer do little damage to mature woodlands—they do, perhaps, 5 per cent. damage. I wanted this Amendment to apply to young plantations, but as the

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Bill now stands, in mature woodlands, which cannot be really harmed by deer, one can shoot the deer out of season. However, having made that point, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 2, as amended, agreed to.
6.12 p.m.
VISCOUNT MASSEREENE AND FERRARD VISCOUNT MASSEREENE AND FERRARD moved, after Clause 2, to insert the following new clause:
Prohibition of sale of venison during close season
".— (1) Notwithstanding anything contained in the Act of 1959 as amended by this Act, if any person sells the carcase or part of the carcase of:—

(a) any stag, being a red deer, or any hind, being a red deer, during the respective close seasons for deer of such descriptions and species specified in section 21(1) of the Act of 1959; or

(b) any deer of any species and description other than red deer named in an order made under section 21(2) of the Act of 1959 during the period fixed by such order in respect of deer of that species and description

he shall be guilty of an offence and shall beliable on summary conviction to a fine not exceeding £20 and in the case of a second or subsequent conviction to a fine not exceeding £50 or to imprisonment for a term not exceeding 3 months or to both such fine and imprisonment.
(2) For the purposes of this section the expression 'Act of 1959' means the Deer (Scotland) Act 1959 and the expression 'red deer' has the same meaning as in the Act of 1959."
The noble Viscount said: In putting down this Amendment I was also anxious to air the subject of the killing of deer out of season. This Amendment would cure two evils. It would stop the present abuse of the law in regard to poaching, which is extremely excessive out of season owing to the fact that the deer are far easier to approach in that period. The other reason is that poaching out of season and the indiscriminate shooting by poachers, as it almost always is, leads to great cruelty. The shooting of hinds heavy in calf, the shooting of hinds with calves at foot, with the calves dying, the wounding and shooting of deer of the wrong age, and so on, lead to great abuses. Here, again, I would hope that at some future date Her Majesty's Government would follow the custom on the
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Continent, where they are far ahead of us in many of these matters relating to game preservation.
As I mentioned on Second Reading, I should really like to see here the tagging of deer carcases. Here is a field where the Red Deer Commission could take over, as is done by the Forstmeister in the various regions of Germany. The deer forest owners would apply to the Deer Control or Commission before the season commenced for a certain number of tags relative to the number of hinds and stags which they required to shoot, and they would have to fix them to the carcases. These seals cannot be used again. We should therefore completely eradicate the profitable market in the sale of out-of-season venison. It works perfectly adequately on the Continent, and I cannot see why we cannot have it here.
I should also like to see the RedDeer Commission adopt the same system regarding marauding deer. Any proprietor, and the Forestry Commission, too, ought to be answerable to the Red Deer Commission for the shooting of their marauding deer. Here again, the carcases would have to be tagged. Dealers dealing in venison would have to be licensed to deal only in tagged venison. It is only by doing this that we can prevent the enormous illegal killing of deer which, as I have said, brings the law into great disrepute. I shall not press this Amendment because this Bill is not suitable for my Amendments, but I hope that in future something like this can be done, because it is the only way we can do away with this horrible practice of the indiscriminate poaching which leads to great cruelty and is doing such damage to the deer stocks in the Highlands. I beg to move.
Amendment moved—
After Clause 2, insert the said new clause.—(Viscount Massereene and Ferrard.)
VISCOUNT MOUNTGARRET: I wish to support this Amendment of my noble friend, and I hope that he does not seek to withdraw it, because I feel that it is even more important than the other Amendments which have been proposed. There is one additional aspect of this point which would lend more force to his already quite lucid argument. The annual amount of venison exported is currently running at about £425,000 a year. This is a highly competitive business, and if we allow ourselves to fall

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into the trap of thinking that our venison is superior to that of others it will not belong before we lose this most valuable contribution to our exports. The prohibition on the sale of venison out of season would greatly help to maintain the high quality.
It is, of course, quite understandable that many hill farmers and crofters sell the carcases of marauding deer which they shoot in order to help to recompense themselves for the damage they have suffered. Marauding deer are invariably in poor condition, and the meat is well below any form of acceptable standard. Of course, if they were in good condition they would not be marauding deer; they would have no need to trespass at all. By prohibiting the sale of venison out of season we should remove from the market these carcases which are being sold, and only prime venison would find its way abroad, and that would help to maintain the present high standard.
If poor venison continues to be sold, there could be a severe risk that we should lose this export market. If venison could not be sold, owners could not afford to maintain the staff to cull their deer. This in turn would lead to unemployment and further depopulation, rents could be affected, and rates and taxes might have to be found from elsewhere if these deer forests were no longer forthcoming. They could only be found from the remaining inhabitants; namely, hill farmers and crofters. For these reasons I feel that it would be right to accept the Amendment.
LORD BURTON: First of all, I should like to thank the Committee for accepting the Amendment which I moved a little earlier. Although I have a great deal of sympathy with the noble Viscount on this Amendment, I feel that, in view of the arguments which have already been put forward on previous Amendments, we cannot accept it. It is obvious, from Second Reading speeches and remarks which have been made to-day, that there are many matters which require legislation to alter the law relating to deer in Scotland. I hope that it will be possible to have that further legislation in the near future. I am confident that agreement can be reached between various bodies after sufficient discussion, and that a good many of the points can
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be resolved. Even if this Amendment is withdrawn, I hope that the Government will look very carefully and consult with the Commission to see whether we cannot get agreement to try to get some of these other Amendments through.
LORD HUGHES: If the Committee will permit me, I should like to say that I am led to believe that the Red Deer Commission favour an amendment of the game laws to make this possible, but they appreciate that the amendment which is necessary is to the game laws, not to the Deer Acts. I must emphasise that, although I believe this is a conclusion at which they have arrived, they have not yet submitted any recommendation to my right honourable friend the Secretary of State. I can say, however, that if such a recommendation comes from the Commission, the Government will consider it carefully.
Your Lordships will understand that in a very crowded legislative programme it would be exceedingly rash for me to make any promise about legislation in this matter. However, one never knows what opportunities will occur, and perhaps by the sort of assiduous cultivation of interests which the noble Duke has pursued on the subject of this Bill, with, I hope, the successful co-operation of his noble friends in withdrawing Amendments, there may yet be a similar field of activity for somebody else in another Bill at a later stage. However, the first thing is to see what the Red Deer Commission actually ask the Government to do in this matter. What is quite certain is that legislation is difficult enough for people to follow without starting to amend the Game Acts while Parliament is in course of dealing with a Private Member's Bill on deer.
THE DUKE OF ATHOLL: I have listened with great interest to all that has been said by my noble friends and by the noble Lord, Lord Hughes. I think that this is a problem and it undoubtedly needs some form of legislation to deal with it. I do not think that this particular Amendment is the answer, partly for the reasons which Lord Hughes outlined and partly for other reasons. As I understand it, the main object of this Amendment was to prevent bad quality venison from being exported abroad. I think my noble friend Lord Mountgarret

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regarded that as being a great point in favour of this Amendment. I think, too, that it is largely up to the dealers to stop bad quality venison from being exported abroad.
I gather that yesterday the Red Deer Commission and representatives of the dealers held a meeting in order to try to get some agreement on this matter and on suitable amendment to the Game Act 1831, as extended to Scotland by the 1860 Act, for the registration of dealers and for the power to look at dealers' books. If this was done, and if legislation was passed on these lines, I feel that it would go a long way towards getting over the second difficulty which my noble friends have enumerated, and that is the poaching of out-of-season venison. I feel that if the Red Deer Commission had a right to inspect game dealers' books they would be able to see which dealers were dealing in excessively large numbers of out-of-season venison and from whom they were obtaining it. This would enable them to keep track of where this venison was coming from and to see that the people concerned were really playing the game and acting within the spirit of the 1959 Act.
I am sure that, if this Amendment was passed, the National Farmers' Union of Scotland would feel that we had broken faith with them in relation to the 1959 Act. We must remember that the 1959 Act was a measure which was agreed between the various interested bodies, and one of the reasons why the farmers agreed was that the extra damage they were likely to suffer from marauding deer would to a certain extent be compensated by the price which they were able to obtain from the sale of these deer as venison. I also feel that in these days, when we need to maximise our assets, to put a complete ban on the sale of out-of-season venison would be very uneconomic as well as unrealistic. This venison is perfectly all right for making into dog and cat food, and I cannot believe that it would be a good thing to ban its sale for at any rate these purposes. I hope that my noble friend will, as he
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said—and I am grateful to him—withdraw his Amendment, because I believe that while the Red Deer Commission are in consultation with the dealers it would not be a good moment to press such an Amendment. I hope that other noble Lords will allow my noble friend to withdraw it.
VISCOUNT MASSEREENE AND FERRARD: Before withdrawing this Amendment, I should like to point out that my main reason for putting it down was completely humane. If any noble Lords here had seen some of the sights I have seen of deer which have been maimed out of season by poachers, I am sure they would feel as I do. The other reason why I put the Amendment down was that while you can sell venison out of season, it is a great temptation to small farmers, and perhaps some large farmers, to lure deer on to their holdings during the close season to shoot them for sale. It can be extremely profitable, and I know instances where farmers have done this on purpose. With those few remarks, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 3 agreed to.
THE DEPUTY CHAIRMAN OF COMMITTEES: Does the noble Viscount wish to move Amendment No. 5?
VISCOUNT MOUNTGARRET: Yes, I do. When moving Amendment No. 1 I asked your Lordships if I could move Amendments Nos. 5 and 6 at the same time.
THE DEPUTY CHAIRMAN OF COMMITTEES: The noble Viscount cannot move more than one Amendment at a time. I understand that Amendments Nos. 5 and 6 are consequential on the first Amendment, which I think the noble Viscount withdrew, so I wondered therefore whether he wished to move No. 5.
VISCOUNT MOUNTGARRET: Not moved.
House resumed: Bill reported with an Amendment.

AGRICULTURE BILL
6.30 p.m.
Order of the Day for the House to be again in Committee read.
Moved, That the House do now resolve itself into Committee.—(Lord Walston.)
On Question, Motion agreed to.
House in Committee accordingly.
[The EARL. OF LISTOWEL in the Chair.]
Clause 37 agreed to.
LORD WALSTON LORD WALSTON moved, after Clause 37, to insert the following new clause:
Recovery of possession of farmhouse vacated on amalgamation and let on regulated tenancy
".— (1) The following provisions of this section shall apply where—

(a) as part of an amalgamation to which a scheme under section 26 of this Act applies, the occupation of a dwelling-house is relinquished by a person who, at any time before he relinquished it, was responsible (whether as owner, tenant, or servant or agent of another) for the control of the farming of any part of the land comprised in the amalgamation, and

(b) the dwelling-house is thereafter let on a regulated tenancy otherwise than to, or to the widow of, that person, any other person who relinquishes his occupation of a dwelling-house as part of the amalgamation, or any person who is or at any time was employed by the landlord in agriculture.

(2) If—

(a) not later than the commencement of the regulated tenancy, the tenant has been given notice in writing that possession may be recovered under this section, and

(b) apart from the Rent Acts, the landlord would be entitled to recover possession of the dwelling-house, and

(c)the court is satisfied that the dwelling-house is required for occupation by a person employed or to be employed by the land-lord in agriculture,

the court shall, in proceedings commenced by the landlord at any time during the period of five years beginning with the date on which the proposals for the amalgamation were approved by the appropriate Minister, make an order for the possession of the dwelling-house, whether or not it would have power to do so under section 3 of the Act of 1933, and section 5(2) of the Act of 1920 shall not apply in relation to the order.
(3) In this section—
"the Rent Acts" means the Rent and Mortgage Interest Restrictions Acts 1920 to 1939, or any of those Acts, and "the Act of 1920" and "the Act of 1933" mean respectively the Increase of Rent and Mortgage Interest (Restrictions) Act 1920 and the
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Rent and Mortgage Interest Restrictions (Amendment) Act 1933;
"employed" and "agriculture" have the same meanings as in the Agricultural Wages Act 1948 or, in Scotland, the Agricultural Wages (Scotland) Act 1949;
"landlord", "tenant" and "tenancy" have the same meanings as in the Act of 1920;
"regulated tenancy" means a tenancy to which the Rent Acts apply by virtue of section 1 of the Rent Act 1965; and
"order for possession", in relation to to Scotland, means decree of removing or warrant of ejection or other like order."
The noble Lord said: It may be convenient, if your Lordships agree, to discuss together the new clause which stands in my name and the Amendment to it in the name of the noble Lord, Lord Nugent of Guildford. When two farms are amalgamated under this Bill, there may be cases in which one of the farmhouses falls vacant on the departure of the outgoing occupier. The man who is going to farm the new unit will probably need one house for his own occupation. He is probably already in occupation of it, but he may be undecided, at the time when the amalgamation takes place, whether he is going torequire the second house for the proper operation of the amalgamated holdings, or whether it can reasonably and conveniently be let to somebody who is not engaged in agriculture.
In such a case, of course, the farmer would know that if he let the vacant house to anyone else the tenancy would be subject to the provisions of the Rent Acts, so that he might be unable to recover possession when he needed the house in connection with farming the unit. So it could well be that in such circumstances he would consider it only prudent to keep the house unoccupied until he had made up his mind whether or not he was going to use it.
When this matter was discussed in another place, the argument was advanced that it would be wrong to allow good agricultural houses to remain vacant in this way, and very possibly to deteriorate as a consequence of being unoccupied. So the Government undertook to examine the whole problem and this new clause, which has now been set down in my name, embodies our proposals for dealing with the special case of the farmhouse which falls vacant as a result of a farm amalgamation under this Bill, and which is thereupon let on a regulated tenancy.
We have provided, first, that the tenant should be told at the time of the letting that the special provisions of the clause will apply, and that if the provisions of the clause are satisfied the court shall make an order for possession notwithstanding other provisions in the Rent Acts which might otherwise prevent this. Your Lordships will, of course, be aware that the Government place importance on making quite certain that, wherever possible, farmers who give up their holdings for amalgamation under this Bill shall be allowed to remain in occupation of their farmhouse if they so wish. This principle has not been questioned at any time, so far as I know, during the passage of this Bill.
Alternatively, the landlord may offer the outgoing occupier the other farmhouse instead—perhaps because his old house is the better one on which to base the amalgamated homestead. The object of such an arrangement would be defeated if the landlord who had allowed the outgoer to stay were then given powers to dispossess him. I think your Lordships will agree that it is essential that this class of person should enjoy the protection of the Rent Acts, and we have framed the new clause accordingly. It is also proposed to exclude from the special powers in the clause lettings to past or present agricultural employees of the landlord. Your Lordships will know that such persons are already excluded from the similar provisions of Section 16 of the Rent Act, 1965. Repossession from such tenants is dealt with by Section 33 of that Act. The Government's new clause puts lettings to farm workers under it on the same footing as under the 1965 Act.
The power to recover possession is limited to a period of five years from the time when the amalgamation was approved by the Minister, and this is the provision which the noble Lord, Lord Nugent of Guildford, seeks to delete by his Amendment. I have personally given a lot of thought to this matter, because I confess that I felt there was a great deal of force in the noble Lord's Amendment. But I have come to the conclusion that five years is both a reasonable and an ample period, during which the needs of the individual holding should become abundantly clear. I feel that if
1404
the landlord has not exercised his option during that time, the house should be treated in the same way as any other rural dwelling which is not used for letting to agricultural workers.
The Government consider that the amalgamator—the man who has taken on 'the two holdings—must make up his mind in a reasonable time whether or not he needs the house. Ideally, of course, he should make it up at the time of the amalgamation. He should decide then which of the houses he wants to use, as if he does not do so the amalgamation will to some extent suffer. I accept, though, that it is imposing too much of a burden on him to insist that he makes up his mind at the very moment of amalgamation, or within a few months. He may well want some time to decide whether he needs any other of those houses for a worker, and, if he does, to install a worker in it. But I do not think it would be reasonable to insist that he should have a permanent option to repossess the house for general agricultural purposes; and especially not to serve as a farmhouse again. I feel that he should show within a reasonable time of the amalgamation that the house is, in fact, wanted for a farm worker.
The Government are concerned that amalgamations under the Bill should not allow a house which is needed for a farm worker to lie idle, even for a limited time. Nevertheless, we must protect those who have given up their homes to allow an amalgamation to proceed. We must also ensure that the extension of this class of temporary tenancy is firmly linked to the needs and difficulties arising from the amalgamation. I hope, therefore, that your Lordships will agree that by this new Amendment we have struck a reasonable and fair balance between these objectives.
I am grateful to the noble Lord, Lord Nugent of Guildford, for putting down his Amendment, and I have explained why it cannot be accepted at this present time. I do not know whether he would like at this stage to explain some of his reasons for feeling, in spite of what I have said, that it is perhaps a desirable Amendment.
Amendment moved—
After Cause 37, insert the said new clause.—(Lord Walston.)
6.39 p.m.
LORD NUGENT OF GUILDFORD LORD NUGENT OF GUILDFORD moved, as an Amendment to the Amendment, in the proposed new subsection (2), to leave out "during the period of five years beginning with the date on which" and to substitute "after". The noble Lord said: May I thank the noble Lord, Lord Walston, for explaining the purpose of his new clause and for discussing the merits of my Amendment to it? I should like, first, to welcome his new clause, which is substantially the same as the one that I put down earlier on the Order Paper and subsequently withdrew. This reflects the view expressed by the Conservative spokesman in another place, that this was a provision which should be made: that when an amalgamation took place the spare farmhouse constituted a special case. I was disappointed that in another place the Government divided against the proposal and defeated it, but I am delighted that wiser counsels now prevail, and that the Government see the wisdom of making provision to meet this case, and to extend the provisions of the 1965 Rent Act to cover the spare farmhouse.
The new clause moved by the noble Lord, Lord Walston, goes rather further than did my new clause, because it makes special provision for the retiring farmer or his widow to continue to live in the spare farmhouse if they wish to do so. I quite accept that that is both humane and sensible, and the proper thing to do. In fact, unless such was done there probably would not be an amalgamation at all, so it is an entirely sensible thing to do. But I am not entirely happy with the five-year limitation, because I think it might well frustrate the very purpose for which the clause sets out to make provision.
I would agree with the noble Lord, Lord Walston, that if the farmhouse is vacated by the farmer who had the holding before, five years should be enough for the amalgamator (as the noble Lord called him) to make up his mind whether or not he wants the farmhouse for the future running of the amalgamated holding. But where it seems to me the five-year limitation may frustrate the whole arrangement is where the retiring farmer or his widow stays on and continues to live in the farmhouse, because the term of five years runs from the time
1406
of the amalgamation, and the retiring farmer might very easily stay on for many more than five years. He might stay on for 10 or 15 years before he left his vale of sorrow and went to a happier place; and by that time the farmer who was farming the holding and waiting to get the farmhouse would have lost the possibility of getting control of it. In these circumstances, while I see the point in the noble Lord's mind, I think that this five-year limitation is a limitation which may destroy the purpose of the new clause. That is the reason why I put this Amendment down.
I know that the feelings I am expressing are strongly shared by the National Farmers' Union, who I think have already written to the noble Lord about this point. I realise that this new clause has only recently arrived on the Order Paper, and that there has not been much time to work out all the implications of it. In the circumstances, I wonder whether the noble Lord would consider taking back this new clause now and giving further consideration to it before the Report stage, to see whether or no he really feels that the five-year limitation should be kept in. I feel that there is so little between us on this. We both want the substance of the clause, and what it sets out to do; and the only difference is on the five-year point. I wonder whether, in those circumstances, the noble Lord would be prepared to give further consideration to it. I beg to move.
Amendment to the Amendment moved—
Subsection (2), line 11, leave out ("during the period of five years beginning with the date on which") and insert ("after").—(Lord Nugent of Guildford.)
LORD WALSTON: As the noble Lord has said, I agree that this is a new Amendment and that there has not been much time to think about it, although a great deal of thought has gone into its preparation. I would be misleading the noble Lord if I said that we would reconsider the principle of the five-year period. I think that has been gone into with great care, and that we have achieved the right balance. However, there may be circumstances of the type that he has mentioned, in which the farmer lives for some time afterwards and the amalgamator would like a certain

1407
period of time after the death or disappearance of the other farmer, or the occupier of the second farmhouse, in which to consider his plans.
I think there could be some argument for making some form of extension in that respect, and therefore I should be glad to give further thought to this. I think it might be more convenient if the Amendment in my name—that is, Amendment No. 30—were agreed to now, but subject to the proviso that more thought will be given to it, and that a subsequent Amendment might be produced on Report stage to meet the point raised by the noble Lord.
LORD NUGENT OF GUILDFORD: I thank the noble Lord for going that far to meet my point, and in those circumstances I am happy to beg leave to withdraw my Amendment.
Amendment to the Amendment, by leave, withdrawn.
On Question, Amendment agreed to.
Clause 38 [Provisions relating to Northern Ireland]:
6.46 p.m.
LORD WALSTON: The next Amendment is consequential upon the previous Amendment, No. 30. It provides that the new clause added by Amendment No. 30 shall not extend to Northern Ireland, where the existing law already enables dwelling-houses to be repossessed in the circumstances specified in the new clause. I beg to move.
Amendment moved—
Page 45, line 9, at end insert ("and section (Recovery of possession of farmhouse vacated on amalgamation and let on regulated tenancy)").—(Lord Walston.)
On Question, Amendment agreed to.
Clause 38, as amended, agreed to.
Clauses 39 to 43 agreed to.
Clause 44:
Rural Development Boards.
44.—
(2) Those special problems and needs include the special difficulties in the formation of commercial units of agricultural land in such areas, the need for an overall programme for guidance in making decisions as to the use of land in such areas for agriculture and
1408
forestry, so that those two uses are complementary, the need for improved public services in such areas in step with their development for agricultural and forestry purposes, and the need for preserving and taking full advantage of the amenities and scenery in those areas in the course of their development for those purposes.
(8) The provisions of subsections (51, (6) and (7) of this section shall not apply to Scotland, and on the establishment of a Rural Development Board in Scotland, the Secretary of State shall cause a notice referring to the provisions of this Part of this Act controlling sales of land and controlling afforestation to be lodged at the principal office of the county council of every county in the area of which any part of the Board's area lies, and the notice shall be available for inspection free of charge at all reasonable hours.
LORD BALERNO LORD BALERNO moved, in subsection (8), after "country", where that word occurs a second time, to insert:
"and at the office of every burgh and every district council".
The noble Lord said: I beg to move Amendment No. 33, which stands in my name, and with which the name of my noble friend Lord Massereene and Ferrard is associated. As regards the formation of Rural Development Boards in Scotland, while notice of the intention to form a Board is fairly adequately provided for by intimation in the local papers for two successive weeks, the local papers are not a terribly good medium, because they do not always circulate to the farms. 'The agricultural Press—one of the two farming papers—is more likely to be read by the people concerned than are the local papers.
The point I wish to bring to the attention of your Lordships' Committee, and which I wish to make by this Amendment, concerns subsection (8) of Clause 44, where it is required that a notice referring to the establishment of a Rural Development Board in Scotland is
"to be lodged at the principal office of the county council of every county in the area of which any part of the Board's area lies,…"
The purpose of my Amendment is to extend this requirement to include district councils, as well as any burgh that is within that area.
There are great distances within certain counties in Scotland. If I may give an illustration, many of your Lordships who have perhaps not been to Scotland will be acquainted with Dr. Finlay's Casebook, in which case Tannochbrae will be

1409
vivid in your minds. To quote the opening words of Clause 44, it is comprised of typical "rural areas of hills and uplands". Very few people from Tannochbrae would wish to go to Perth, or would have occasion to go to Perth. They will go down to Stirling, which is unlikely to be associated with Perthshire in connection with a Rural Development Board. But from Tannochbrae to Perth is really a comparatively short distance. One must appreciate that Perthshire extends considerably further from Perth than Tannochbrae: it goes right up to Aberfoyle, across to Loch Katrine, almost to Loch Lomond; then it comes to the River Falloch, which runs into Loch Lomond. Anybody who lives in the valley of the River Falloch will certainly go down Loch Lomondside (his line of communications is down Loch Lomondside) into Dumbartonshire and will go several miles further on the other side of Glen Falloch. So the distances are great; and some of the small farmers are not accustomed to going great distances other than to their markets. Certainly the people from Glen Falloch would not be in the habit of going to Perth in ordinary circumstances; it will be a big job for them.
A further instance in an area which might be covered is the Cabrach, in Aberdeenshire. To my mind, the Cabrach, which borders Aberdeenshire and Banffshire, forms an excellent area for a Rural Development Board as envisaged in this clause. It is full of small farms and crofts of 30 to 40 acres; and the farmers there are not necessarily in the habit of going to Aberdeen, except perhaps when visiting their sons and daughters at the university.
A kind fairy has been helping me with this particular Amendment. I had not thought about the burghs in the area of the Rural Development Board. But they have been inserted, and I hope that the good will that has improved my intentions will permeate the Government Benches and that we in Scotland shall receive favourable consideration for this peculiarly Scottish case—for this is a Scottish clause, affecting Scotland only.
Amendment moved—
Page 50, line 28, after ("county") insert ("and at the office of every burgh and every district council").—(Lord Balerno.)
VISCOUNT MASSEREENE AND FERRARD: I should like to support my noble friend in this Amendment. He talked about the great distances in Perthshire, but they are as nothing compared with the even greater distances in Argyllshire. When we have a General Election, the ballot boxes from Argyllshire usually take three or four days to reach their destination. Some have to come by rowing boat from the small islands. It would be extremely difficult for any of the residents in these outlandish places to go to the county capital. I would say that Argyllshire, even more than Perthshire, is a county of crofters and smallholders and it would be impossible for a great many people anxious to go to the county offices to travel the distances required. Therefore I support the Amendment.
6.54 p.m.
LORD HUGHES: The noble Lord, Lord Balerno, did an excellent conducted tour of Dr. Finlay's Casebook territory. But it runs in my mind that in one of the recent episodes Janet made an expedition away from Tannochbrae—though I do not remember where she went. When the noble Viscount, Lord Massereene and Ferrard, brought in Argyllshire I thought we were going to get a similarly well-conducted tour of Argyllshire. Instead, he contented himself with reminding us that it takes four days for the bad news of the results of a General Election in Argyll to reach us. However, I will now come a little more relevantly to the Amendment.
I think it is correct that the purpose of the Amendment (and of the one following in the name of the noble Viscount) is to make more widely known any establishment of a Rural Development Board. May I, at this point, take the opportunity of saying that in future I shall refer to such a Board merely as "the Board"? The Amendment would also apply to conferring powers of control over land transfers and afforestation on the Highlands and Islands Development Board. The Government have no plans at present to set up a Scottish Board. This has been said more than once; but we have not said that we will not at any time set up a Board. We can only state this as the likely position. It is

1411
quite proper, in dealing with a Bill, that we should proceed on the basis that the unlikely may in fact take place. I agree that if such a Board should be established the fact should certainly be made known to all those who may be affected. But I think that this is provided for in paragraph 5 of Schedule 5, which refers to the advertisement of the making of the Order and the deposit of a copy of the Order where it is to be available for inspection. I would remind your Lordships that this follows the procedure set out in Schedule 5, concerning advertisement of a proposed Order, objections, public inquiry and finally Affirmative Resolutions by both Houses of Parliament.
The lodging with the county council of a notice under Clause 44(8) serves a different purpose altogether. It is designed to enable the purchaser of land in Scotland to ascertain from an authoritative source at any given point of time whether any of the land is subject to the powers of control under this Part of the Bill either by such a Board or by the Highlands and Islands Development Board. I would remind the Committee that normally the purchaser of land looks to the Register of Sasines for any possible limitation. This, of course, would not be found there. It is for this reason that it was thought that the purchaser of land, his agent or his lawyer, would not find it a burden to make inquiries at the county council. So we are dealing with two quite different aspects. I think the purpose the noble Lord seeks to achieve is already accomplished in the other part of the Bill. This serves adequately the purpose intended, the more limited one of the actual purchaser of land.
I started on an irrelevancy. If I may, I will finish on another by replying to a question which the noble Lord, Lord Balerno, put to me yesterday. He asked whether a piece of mobile equipment which was neither a harvester nor a tractor would be eligible for grant. In order that the noble Baroness may know that we are not completely hidebound in these matters, that we are not firmly immersed in the end of the last century or the beginning of the present one, I can say that the answer to the question of the noble Lord. Lord Balerno is, Yes, if the machine is to be used for agriculture; if
1412
the machine is self-propelled; if it is licensed, and, finally, if it is not normally capable of exceeding a speed of 30 miles per hour. So there is now one additional piece of equipment which is mobile and yet acceptable. Having given the noble Lord these glad tidings, I hope it will encourage him to accept my explanation in relation to this Amendment, that he will find it possible to withdraw his Amendment, and that the noble Viscount, Lord Massereene and Ferrard, will not find it necessary to move the next Amendment.
LORD BALERNO: I thank the noble Lord, Lord Hughes, for his reply and especially for clearing up the point which I raised yesterday. It does rejoice me to think that when this Bill becomes an Act I shall be able to apply for a grant for a self-propelled lawn mower which collects the grass, which makes it a forage harvester.
LORD HUGHES: If it is used for agriculture.
LORD BALERNO: I think that if you live on a farm you can make a case for it being used for agriculture. After all, you have to keep the sward down in the the cause of good husbandry. It would make a very pretty point to argue with the Scottish Department of Agriculture.
THE DUKE OF ATHOLL: May I ask my noble friend Lord Balerno whether he thinks that the amount of the licence fee would be as much as or more than the grant?
LORD BALERNO: To the noble Duke I would say that, if the machine would relieve me in my old age of the amount of sweat that I now pour out by rushing after a lawn mower which I have to follow on my legs (for if it were a self-propelled machine I should expect it to be one on which you could ride as the Americans do), it would be an article which I have for several years wished that I could secure. I am grateful to the Government for managing to make it possible for me to do so.
With regard to the Amendment, sometimes a crofter wishes to acquire further land from a neighbour who has died. This

1413
happens not infrequently and if this subsection is not amended it will mean that the crofter would have to make a very long journey merely to discover in the first instance whether or not the land is acquirable. I should have thought the Government could concede this point. The fact that subsection (8) applies only to Scotland means that there is a possibility of Rural Development Boards coming to Scotland. But, in view of the assurance of the noble Lord, Lord Hughes, I feel that the matter is not of sufficient immediacy to justify my pressing the Amendment. Therefore, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD HILTON OF UPTON: The purposes of the Amendment is to delete the reference to the Minister of Land and Natural Resources. Your Lordships will know that, as from February 16 this year, the functions of the Minister of Land and Natural Resources, so far they related to forestry matters in England were transferred to the Ministry of Agriculture, Fisheries and Food. This Amendment, and, if I may mention it now, those to Clauses 45, Nos. 50, 51 and 53, are necessary to delete references to the funtions of the Minister of Land and Natural Resources in respect of the appointment and duties of Rural Development Boards. I beg to move.
Amendment moved—
Page 50, line 33, leave out from ("to") to end of line 37 and insert ("Wales, the Minister of Agriculture, Fisheries and Food and the Secretary of State for Wales acting jointly").—(Lord Hilton of Upton.)
On Question, Amendment agreed to.
Clause 44, as amended, agreed to.
Clause 45:
Functions of Rural Development Boards
45.—
(b) in consultation with such local authorities and other bodies as appear to the Board to have an interest, to draw up a programme for action to meet those problems and needs and, so far as the programme will entail expenditure by the Board, to submit to the appropriate Minister for his approval proposals for that expenditure,
7.5 p.m.
LORD MOLSON LORD MOLSON moved, in subsection (1)(b), after "in consultation with", to insert " planning authorities and" The noble Lord said: I beg to move the Amendment standing in my name. The effect of it would be that the clause would read:
"It shall be the function of a Rural Development Board…in consultation with planning authorities and such local authorities and other bodies as appear to the board to have an interest…".
It is strange that all through this Bill there is practically no reference to planning authorities. It maybe because the Ministry of Agriculture, Fisheries and Food has never had very much to do with planning law. Generally speaking, agricultural buildings are excluded from the restrictions and restraints which are imposed upon other buildings. It appears to the amenity interests desirable that there should be close and friendly discussion between the agricultural authorities and the planning authorities. That would appear to be particularly the case in these hilly districts where Rural Development Boards are going to be set up.
The effect of the Amendment will be two-fold. In the vast majority of counties the planning authority is a committee of the county council. I think it reasonable that Rural Development Boards should consider the county councils as one of the local authorities which should appear to have an interest in any of the programmes of development which they advance. But the effect of these words would be to make it obligatory on the Rural Development Boards to consult. In respect of two of the National Parks the matter is more important. Planning Boards have been set up in respect of the High Peak and also the Lake District and they are independent of the local authorities. I am sure it is extremely desirable that in those hilly districts, which would appear to be particularly appropriate for Rural Development Boards, other considerations besides purely agricultural ones should be taken into account and the planning authorities should be consulted by the Rural Development Boards. This does not in any way give a veto to the planning authorities on what the Rural Development Boards wish to do, but it makes certain

1415
that there shall be consultation between them. I beg to move.
Amendment moved—
Page 51, line 1, after ("with") insert ("planning authorities and").—(Lord Molson.)
LORD WALSTON: As is usually the case, I find myself in very strong agreement with what the noble Lord, Lord Molson, has said; but, with respect, I suggest to him—I hope that he will be persuaded by what I am about to say—that there is no need for the Amendment because the matter is already covered in the Bill as it is drafted. The subsection already provides for local authorities and other bodies that have an interest to be consulted by Boards when drawing up their programmes. What is more, all planning authorities which have an interest, whether they be local authorities or not, will be consulted by the Boards and any necessary planning consents obtained. I can assure the noble Lord that the Boards will be subject to the control of the planning authorities, and in no circumstances will the Board be able to override a planning decision. I hope therefore that the noble Lord will agree that in view of these assurances his Amendment is unnecessary and that he will be prepared to withdraw it.
LORD MOLSON: I am extremely happy to hear the Parliamentary Secretary's statement. Naturally I accept it. I think that the drafting of the Bill is not as clear as it might be, and after my friends and I had looked at it we did not think that this matter was covered. However, the methods of Parliamentary draftsmen remain to me as obscure as they were some thirty years ago when I first began to study legislation, and I accept the assurance the Minister has given on behalf of the Government that in all these cases the local planning authorities and other bodies interested in planning will invariably be consulted. In view of that assurance, I ask your Lordships' permission to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD HILTON OF UPTON: This Amendment is consequential on those de-
1416
leting the references to the Minister of Land and Natural Resources in so far as they relate to the functions of a Rural Development Board in England. I beg to move.
Amendment moved—
Page 51, line 21, leave out ("England and").—(Lord Hilton of Upton.)
On Question, Amendment agreed to.
Clause 45, as amended, agreed to.
Clause 46 agreed to.
Clause 47:
Promotion of amalgamations and boundary adjustments by Rural Development Boards
47.—(1) Without prejudice to the generality of section 45 of this Act, a Rural Development Board shall have power to acquire, hold and dispose of land in their area for the purpose of effecting amalgamations of agricultural land and reshaping agricultural units, and power for the said purposes to enter into transactions involving loss, including—
LORD HILTON OF UPTON: It has always been the intention that under this clause a Board should have powers to acquire land only by agreement. The clause gives the Board the same powers as the Minister to enter into transactions involving loss for amalgamation purposes and to apply Schedule 3 by deed to holdings amalgamated in this way.
During the passage of the Bill through another place, the Government undertook, provided there were no legal difficulties, to give favourable consideration to the proposal that the wording of the Clause should leave no room for doubt that the Board had power to acquire land only where the owner agreed. During my speech on Second Reading I stressed this same point. I am happy to be able to put forward this Amendment, which I hope your Lordships will find acceptable. I beg to move.
Amendment moved—
Page 52, line 28, after ("acquire") insert ("by agreement").—(Lord Hilton of Upton.)
On Question, Amendment agreed to.
Clause 47, as amended, agreed to.
Clause 48:
Control of sale of certain land
48.—
(3) The Board shall not refuse consent unless they are satisfied that the land to which the application relates, if acquired by them in accordance with this section.—
(c) is land which, in the opinion of the Board and the Forestry Commission, ought to be planted by the Forestry Commission, or
(4) The Board shall, within two months of receipt of an application duly made for consent under this section, serve on the applicant notice of the manner in which the application has been dealt with; and, except where their decision is to grant their consent, the notice shall give the reasons for their decision.
7.13 p.m.
THE EARL OF DUNDEE THE EARL OF DUNDEE moved in subsection (3)(c) to leave out "the Board and". The noble Earl said: Perhaps your Lordships will agree to my speaking to Amendments Nos. 39 and 40 together, as they are on the same point. They would have the effect of slightly amplifying the powers of the Board to interfere with free sale. I am aware, of course, that some of your Lordships do not particularly like that power, but as we are accepting it I feel that it is reasonable and fair that it should apply equally to public and private forestry. As it stands, the clause appears to discriminate against private forestry, because the Board are allowed to refuse a licence for a sale on the ground that it might be desirable that the land should be planted by the Forestry Commission and not on the ground that it might be desirable that it should be planted under a dedication scheme.
As many of your Lordships are probably aware, under the forestry programme of 1943 private planters so far have rather more than fulfilled the target which was set them. The Forestry Commission, for various reasons which are not their fault, have not succeeded in doing that. I think that the Government generally would agree with me that the Forestry Commission and private forestry ought to do a great deal more planting than they are doing, especially in areas containing a large proportion of marginal and hill land, where forestry is required to prevent further de-population, or to
1418
encourage the re-population, of the area. That is the kind of area in which it is contemplated these Boards should be set up.
It seems to me that there are three good reasons why private forestry, as well as the Forestry Commission, should be considered under this clause. The first is the possibility of competition. There is no necessary harm—in some cases, it might even be a good thing—that a private planter, or a group of private planters, should be allowed to compete with the Commission in making an offer for a piece of land. They may think that they are able to give a better price, or to do the planting better. I think it would be unfair that the Board should be allowed to create a monopoly for the Forestry Commission by holding up the sale merely in order that the Commission may get it at a fixed price, with no competition. I think that is one good and valid reason.
The next reason, which I know more about, is that it would encourage co-operation, not competition, between private planters and the Forestry Commission. I myself have never competed with the Forestry Commission in seeking land for planting, and I have often co-operated with them. On two occasions within the last ten years I have acquired land for planting which the Forestry Commission agreed ought to be planted but which, for various reasons, they did not wish to acquire and plant themselves. They agreed that the land was suitable for dedication, and with their knowledge I acquired the land, which in each case was a considerable area of several hundred acres. I planted the land under dedication schemes, which means, of course, that they are controlled in the public interest.
I have also done the reverse. Whenever I want to get rid of any land which I think ought to be planted but which I cannot plant, I always offer it to the Forestry Commission, at least in the first instance. On one occasion, I was not able to plant some land which I felt ought to be planted within a short period of time. The Commission, who agreed that it should be planted, found it inconvenient that they themselves acquire it, and I therefore sold it to a private individual,

1419
who I understand intends to get a dedication agreement. This is exactly the kind of thing which, in my view, might happen in numerous cases in the areas where these Boards are most likely to be set up.
In an area as large as Wales, or wherever it is proposed to set up these Boards, this sort of co-operation is desirable. It is possible, as the noble Lord, Lord Hughes, pointed out, that a Board might be set up in Scotland; and when it was mentioned during the Second Reading debate that the Secretary of State had no intention at present of setting up a Board for Scotland, a Member of your Lordships' House, who was English, asked indignantly: "What has Scotland done to deserve this favour?" In Clause 51 you find many reasons for that. I am trying to make it better and easier for these Boards to be set up, although I do not want one in Scotland, and we are glad to know that there is no intention of extending their powers to the Highlands Development Board. But in an area of the size of the Highlands Development Board, or any area with possibilities under this Bill for a Rural Development Board, it would be difficult, without this co-operation between private owners and the Forestry Commission, for the Board to keep under continual review all the applications for licences to sell which they receive, and to make sure in every case that no land which ought in the national interest to be forested is not lost to forestry by being acquired, perhaps, for some economic purpose. That is the second reason.
The third reason is that if the clause is left as it is now it will give a discouraging impression to private foresters. The whole of Part III gives the impression that the Government are deliberately discriminating against private forestry in favour of State forestry, but we need the full co-operation of both. I know that the noble Lord, Lord Hughes, is just as anxious as I am for the afforestation programme to be substantially increased in areas of this kind in Scotland, and in many parts of England, too. I am pretty sure, also, that he will not be able to indicate to-night the possibility of any concession on this Amendment, which, in my view, is an important one and has a real bearing on the prospects of carrying out our forestry programme.
The arguments that I have advanced, if I may be allowed to say so, are based on some personal knowledge and experience. I can hardly believe that these points have all been thought out as fully as perhaps they ought to be by the Departments which prepared this Bill. If the noble Lord could tell me that he will give them the opportunity of considering, before Report stage, these arguments which I have put forward, I should be prepared to wait until then before pressing the matter further. My object is not to create controversy about forestry, but to accelerate our planting programme. I beg to move.
Amendment moved—
Page 54, line 18, leave out ("the Board and").—(The Earl of Dundee.)
7.23 p.m.
LORD HUGHES: I am very conscious of the fact that the series of Amendments in relation to forestry which have been put forward by the noble Earl, Lord Dundee, are motivated solely by his desire that forestry should play an increasing part in helping the economy of the country, and I find myself so much in agreement with him that I am afraid we are both in danger of being labelled as people who are unduly biased in favour of forestry, and therefore to be suspect in relation to the other uses of the land. The noble Earl has a little more freedom in this respect than I have. I have to try to steer a careful course, and therefore I must to a certain extent limit my enthusiasm for this subject which comes as naturally to me as it does to the noble Earl, although I do not have the benefit of his wide personal experience of the subject.
I wish to speak separately to the two Amendments, although they are related. If I may deal first of all with Amendment No. 39, we cannot accept this Amendment, although I apreciate the purpose of it. The effect of the noble Earl's Amendment would be to allow the Forestry Commission to be the final arbiter, with the Board merely acting as their agent. The Board is the executive body charged with the duty of meeting the problems and needs of their area, and they will be concerned with the co-ordinated development of agriculture and forestry. They will also see that the needs of private forestry are not overlooked.

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A Board when drawing up their programme will decide that certain areas should be planted with trees, either as part of the Forestry Commission's programme or by private planting. As regards private planting, Clause 48(3)(b) is intended to facilitate this by empowering a Board to refuse their consent where land is earmarked for afforestation or more detailed redevelopment and the land is not in the Forestry Commission programme. If the Board subsequently purchase the land, at the request of the vendor, they would be free to sell some or all of it for private afforestation and to use the balance, if any, for amalgamation purposes or to carry out boundary adjustments of neighbouring units.
Clause 48(3)(c) is complementary to Clause 48(3)(b) and empowers a Board to refuse consent to a sale, so obtaining the chance of buying the land if the owner so wishes, in cases where the Board and the Forestry Commission both consider that the land should form part of the Forestry Commission's programme. This will of course be co-ordinated with the Board's programme by virtue of Clause 45(3). Nevertheless, I think it right that the Board should satisfy themselves in each individual case that the land should be part of the Commission's programme before refusing their consent.
The reasons for which a Board may refuse consent are clearly defined in subsection (3). Under subsection (3)(c) a Board may refuse consent to a proposed transfer of land which if acquired by the Board ought in the opinion of the Board and the Forestry Commission to be planted by the Commission. A Board will decide that certain areas should be designated for afforestation or for co-ordinated development of agriculture and forestry, but they have no power to compel people to plant, nor have they power to purchase the land in question compulsorily. The noble Earl's Amendment would enable a Board to refuse consent to a transfer of land which is considered suitable for planting by a private owner under a dedication covenant or agreement. If land is suitable for private afforestation, with or without a dedication agreement, there is no need to bring it within the ambit of this clause.
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I wish to go on to read what I have here, because this relates to the Bill as it stands, and as until this afternoon we contemplated it should remain, and then I will go a little further. If a private owner wishes to plant trees and has come to a tentative understanding with the Forestry Commission about a dedication scheme, the owner should make an application to the Board for a tree-planting licence. If an area is considered suitable for afforestation under a Board's general development plan, I am sure the licence would be readily forthcoming. I shall return to this point in a moment or so. If it is the noble Earl's intention that the Board should, under this paragraph, refuse consent and so obtain the chance to acquire land which could suitably be planted by private persons, I am advised that this could already be done under the powers of paragraph (b).
I can assure your Lordships that paragraph (c) is in no way giving favourable treatment to the Forestry Commission. It merely makes provision for the particular case where a Board refuses consent to a proposed transfer because both the Board and Commission consider that the land, if acquired by the Board, should be planted by the Forestry Commission. The most likely case is where a plot of land adjoins an existing Forestry Commission plantation.
I read out the words about the position where there was an understanding with the Commission that there was to be a dedication scheme and that the owner should make an application to the Board for a tree-planting licence. The noble Earl has a succeeding Amendment on this, No. 46, but there is a Government Amendment, No. 45, which goes part of the way to meet the point of the noble Earl's Amendment No. 46.
THE EARL OF DUNDEE: May I ask whether the noble Lord is reading from a paper which is going to be circulated, or from something which is going to be put in the Bill?
LORD HUGHES: No, I am reading from the brief with which I have been provided. I am now in a position to say that I am prepared to accept Amendment No. 46, which the noble Earl will

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be moving, subject to some Amendments which will have to be made upon it on Report stage. These are of a minor nature, but I think the knowledge that his main Amendment is to be accepted will make it easier for the noble Earl to withdraw these Amendments and perhaps not to move some other Amendments which were, in a way, second best to his No. 46. In these circumstances I hope the noble Earl can accept my assurance that what he wishes to retain under these two Amendments is in fact within the purpose of the Bill at the present time, and that his general object of encouraging private afforestation will be helped forward by what the Government intend to do with his Amendment No. 46.
THE EARL OF DUNDEE: I am most grateful to the noble Lord for what he is doing to meet me in this matter. I understand from what he has just said that paragraph (b) of subsection (3) of this clause definitely puts the interest on private forestry, so far as this clause is concerned, on a par with that of public forestry.
LORD HUGHES: May I perhaps read the point once again? If it is the noble Earl's intention that the Board should, under this paragraph, refuse consent and so obtain the chance to acquire land which could suitably be planted by private persons, I am advised that this could already be done under the power of the preceding paragraph (b).
THE EARL OF DUNDEE: I am grateful to the noble Lord and glad to have that on the Record. Since my purpose is to help things on, I ask leave of the Committee to withdraw this Amendment.
Amendment, by leave, withdrawn.
THE EARL OF DUNDEE: I put this Amendment down because it seemed to me that two months would be rather a long time for an applicant to wait, particularly if the sale was caused by the death of the owner and the heirs were pressed in any way for leave to get the estate sold. If the noble Lord can give me a convincing reason why it should be as long as two months, I shall certainly be willing to consider what he says. I beg to move.
Amendment moved—
Page 54, line 27, leave out ("two months") and insert ("one month").—(The Earl of Dundee.)
THE DUKE OF ATHOLL: I think this is a point of some importance. I can foresee difficulties being caused and I wonder whether the noble Lord, Lord Hughes, if he is going to reply to this, would give some agreement that the Board should, if possible, give the reply within one month? I can see that on occasions it might be difficult for it to give the reply within one month, but I should have thought that in 90 per cent. of the cases it would be possible. If the noble Lord can commit the Boards of the future by saying that, wherever possible, they will give the reply within one month, it will be a great help.
LORD HUGHES: I think the answer which I am about to give will be satisfactory to the noble Earl and the noble Duke. The period stated is the maximum period, and it is the opinion of the Government that in the vast majority of cases—without mentioning a particular percentage: I would not really expect that the noble Duke would be far wrong—it would be easy to reach a decision in a much shorter period than two months. But, after all, we are prescribing a period in a Bill and it ought to cover all the cases with which the Board may have to deal. There is the possibility that some cases will be so complex that a longer period will be needed, and we think the period of two months is sufficient to cover any contingency with which the Board may be faced. I hope, therefore, that the noble Earl will feel able to withdraw his Amendment.
THE EARL OF DUNDEE: In view of the noble Lord's explanation, which I am glad to have, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 48 agreed to.
Clause 49 [Control of sale of certain land: exceptions and supplemental provisions]:
LORD HILTON OF UPTON: The purpose and effect of this Amendment is to define the "National Parks planning authority", which is to be exempt from

1425
the control of land transactions exercised by a Rural Development Board. This Amendment is proposed because the Government now feel it is desirable to define in this Bill a "National Parks planning authority", about which it appears there might otherwise be some doubt. I beg to move.
Amendment moved—
Page 58, line 4, at end insert ("and, 'National Parks planning authority' means a local planning authority whose area consists of or includes the whole or part of a National Park".—(Lord Hilton of Upton.)
On Question, Amendment agreed to.
Clause 49, as amended, agreed to.
Clause 50 [Schemes for co-ordinated amalgamations and reshaping of agricultural units]:
LORD HILTON OF UPTON: This Amendment is necessary to delete references to the Minister of Land and Natural Resources in so far as they relate to the powers of a Rural Development Board in drawing up schemes for co-ordinated amalgamations and reshaping of agricultural units in England. These powers will now rest with the Minister of Agriculture, Fisheries and Food in England, and with that Minister acting jointly with the Secretary of State for Wales, in Wales. I beg to move.
Amendment moved—
Page 60, line 30, leave out from ("to") to end of line 34 and insert ("Wales, the Minister of Agriculture, Fisheries and Food and the Secretary of State for Wales acting jointly"). —(Lord Hilton of Upton.)
On Question, Amendment agreed to.
Clause 50, as amended, agreed to.
Clause 51 [Control of afforestation]:
7.40 p.m.
LORD HUGHES LORD HUGHES had given Notice of Amendments to subsection (1), the first being after "granted", to leave out "to him". The noble Lord said: I would suggest to your Lordships that this Amendment should be considered with Amendment No. 61 and associated with it Amendment No. 62 in the name of the noble Earl, Lord Dundee. This Amendment No. 44, is a drafting Amendment, and is required because of the proposed
1426
Amendment to subsection (5) of the clause which is contained in the Government Amendment No. 61. The Bill as it stands provides that in cases of transfer of land, either by normal sale or a death, the new owner should apply for a fresh planting licence so that the Board would have the opportunity to review their decision. However, do consideration of the arguments that were put forward in another place the Government think it reasonable that tree planting licences should pass with the land.
The Amendment provides for this to be achieved by a simple endorsement of the licence by the Board at the instance of the new owner and with the agreement of the licensee. Additionally, we have provided for transfer at the Board's discretion in cases where the interest taken by the new owner is not identical with that of the old owner under this same simple endorsement procedure. This Amendment really gives effect to an undertaking given in another place that we would look at this matter again. I think it meets in a rather ingenious way the point which was raised in another place, and in a way which will be completely satisfactory to all concerned. I hope it will be acceptable to your Lordships. I beg to move.
Amendment moved—
Page 60, line 37, leave out ("to him").(Lord Hughes.)
THE EARL OF DUNDEE: I had always found it difficult to understand why a licence should be attached to an individual and not to the land in respect of which it was granted and, as the noble Lord has said, one of the Amendments which I put down, which I do not suppose we can reach to-night, was designed to redress that. But I have no doubt that what he has said will alter the position in regard to my Amendment, and perhaps it will not be necessary for me to move it. I am very grateful to the noble Lord for having met us to this extent.
On Question, Amendment agreed to.
THE DEPUTY CHAIRMAN OF COMMITTEES: I must inform your Lordships that if Amendment No. 45 is agreed to I cannot call No. 46.
LORD HUGHES: I indicated that I was not proposing to move No. 45, as I intended to accept No. 46.
THE EARL OF DUNDEE THE EARL OF DUNDEE moved in subsection (2)(b) to omit "on the establishment of a Rural Development Board". The noble Earl said: The noble Lord has very greatly shortened the course of these proceedings by his kind indication in advance that he was prepared, subject to certain qualifications which he will no doubt tell us in a few minutes, to accept this Amendment. This Amendment, No. 46, is the one to which I attach the greatest importance. I would have spoken at some length upon it, but I shall now confine myself to a few very brief remarks in view of the noble Lord's indication that he is willing to accept it.
I feel in general—and I think it is worth saying this—that most people in this country, including anybody who is likely to be on any board, including most of the general public, have really no conception of the scale on which afforestation ought to proceed in Great Britain. We are still the most hopelessly badly wooded country. Ten years ago when the last Census was taken we had only 3·9 million acres of woods, of which only about half were properly stocked, compared with 28 million acres in France—and France is a fairly rich agricultural country as well. I felt, and feel still, although I am delighted to hear what the noble Lord has said, that Clause 51 in general might have been specially designed by some person who was particularly anxious to stop the progress of afforestation in Great Britain.
That is how the clause has always struck me, and that is the reason why I took part with others in going on a deputation to the Secretary of State for Scotland more than a year ago, a deputation which was very glad to have the assurance to which the noble Lord has referred to-night, that the Secretary of State did not intend either to create Rural Development Boards in Scotland or—and this was the important point—to transfer these very vexatious powers of interference with private forestry to the Highland Development Board, which can be done under this Bill. We cannot help feeling that, although the present Secretary of State, we are glad to know, does
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not intend to do this, there will be nothing in the law to prevent his successor, if he takes a different view, from doing so. That is the reason why I put down a whole series of Amendments to this clause, simply for the purpose of avoiding putting a spoke in the wheel of private forestry. I have had a great deal of experience of how difficult it is to persuade private owners to do as much planting as they ought to do, and I think all our legislation ought to be aimed solely at encouraging and never discouraging afforestation.
The general conception of most people is the traditional one that forestry should be confined to a few little patches of ground here and there which are not much good for anything else. I will not go into the Zuckerman Report, which I think many of your Lordships have studied—I am sure the noble Lord, Lord Hughes, has done so. It pointed out again and again, in passages which I had intended to quote but will not do so now because it is not so necessary to rub them in, how desirable it was that a great deal of our marginal land should be planted, and that the benefits to the nation from afforestation in so many areas would be very much greater than the continuation of poor uneconomic attempts at continuing agriculture. The Report deplored the fact that the Forestry Commission have not been able to sustain the tempo of the programme embarked upon as a result of the 1943 White Paper. It gave good reasons for regretting what it called that deplorable fact. That was ten years ago, and since then there has been no acceleration. On the contrary, it was accepted by the late Government in 1960 that we should have to scale down our target, which I thought was a very deplorable thing.
In order to get things right, especially in areas like the Scottish Highlands—and also, I am sure, in many areas in England and Wales which may become subject to these Boards—it is essential, if we want to stop de-population and retain there a proportion of young people, to get very large-scale planting done. I am afraid that the Boards appointed under Part III of this Bill are bound to consist of a great many people who do not know much about forestry, and, not

1429
unnaturally, the whole force of inertia is always against it.
Both among the public and officials—and, of course, among a great many landowners—there is a feeling that they do not see why they should alter traditional scenery. It is difficult for them to appreciate the national benefit of forestry, especially as many of them will not see in their own lifetime the benefits of planting. I feel with the greatest intensity that any legislation which imposes any restriction on planting is bad in the interests of this country, and that is why I do not like anything much in this Clause 51 and why I hope to amend it.
However, the noble Lord has indicated that he is willing to accept this Amendment, No. 46, and I feel that by exempting dedicated land a very large part of the objection is removed, because in my opinion most serious planting ought to be dedicated. I do not say there are not cases in which it would be a great pity to interfere with private planting in small areas which are not being dedicated, but the acceptance of this Amendment would remove a very large part of my objections, because I am always in favour of giving people inducements to dedicate. This, of course, would be a kind of negative inducement to do so. Therefore, I thank the noble Lord most sincerely for what he has said. I also think that one or two of my noble friends may wish to say a word on this Amendment before I withdraw it.
Amendment moved—
Page 60, line 41, leave out from ("is") to ("subject") in line 42.—(The Earl of Dundee.)
THE DUKE OF BUCCLEUCH AND QUEENSBERRY: Better arrangements for combining forestry and farming, and the best choice of land crops and trees for each, would of course be very acceptable. The nature and tone of the clauses which bring forestry into an agricultural Bill have been most disappointing and alarming to anybody who helped to promote forestry and to practise it. I was hoping that this Amendment, and also subsequent Amendments, would all be accepted, and I am very grateful to the noble Lord for what he has said in advance. Otherwise, the effect on persons willing to help by growing timber
1430
would be very damping. Surely in a forestry Bill such an attitude to farming would never arise or be allowed. Licences for planting, and control of what species anyone may plant, are appearing for the first time. Surely, the case for this is very weak, and must have a restraining effect on expansion of forestry and on the increase of planting. Also, these clauses have given an impression of an attitude which is unfriendly or indifferent to private forestry, even while ignoring it in relation to State forestry. Ministerial assurances have been given about equality for both, and these are welcome, as is their encouragement to forestry. But the wording in the Bill is important and we are complaining of its effect. An improvement is necessary if confidence is to be restored.
We feel, further—and I should like to pursue this—that evidence of a more helpful attitude to private forestry at a very early date is needed, just as much as for farming. The blame for the wording of these clauses must surely be due to a lack of attention or consultation between the Government and the forestry associations, and also with the Home Timber Advisory Committee and the Forestry Commission. I hope that this matter can be remedied soon, in order to correct the harm done by such weak support for forestry in this Bill, and in other ways. I hope that one result of our disagreement in these matters will be a closer association between the representatives of Government and the forestry industry. But who is the Minister responsible for forestry? If there is one, surely he will give stronger support for forestry?
I should like to support very briefly my remarks about the inadequacy of attention to forestry, and to refer to three special items: the refusal of a grant for new roads necessary to make planting possible on land now too difficult of access, and to reduce costs of extracting timber. Secondly, the refusal of investment grants or allowances for machinery and equipment. Thirdly, the exclusion from this Bill, or recent ones, of co-operative activities. In all these cases, and others, valuable help has been given for farming but is denied to forestry; and there is nothing to show that the

1431
treatment is not deliberate. I hope that the Minister will go further in accepting the Amendment, and will endeavour, so far as he can, to bring the Minister responsible for Forestry into closer touch with the industry.
LORD HUGHES: First of all, the noble Earl, I think inadvertently, said that he would withdraw his Amendment.
THE EARL OF DUNDEE: May I apologise? I thought the noble Lord said that he was going to accept the Amendment, in a different form, on Report stage; that I should have to withdraw it first. If he means that he will accept it now, I am, of course, even more delighted, and shall be glad to consider any necessary adjustments on Report.
7.57 p.m.
LORD HUGHES: It is a very pleasant experience to find one's goodies are so good that they cannot be believed on first hearing! In fact I am proposing to accept the Amendment as it stands. What I must say is that it may be necessary, on further examination of it, to have a consequential Amendment on Report stage. This would be only for the purpose of ensuring that there was satisfactoryliaison between the Commission and the Board in relation to these areas of land.
Having said that, I wish to rebut what the noble Earl and the noble Duke have said regarding the purposes of this clause. It has been interpreted as being anti-forestry. It is not. The whole purpose of these Boards is to ensure the most satisfactory use of land within the area of a Board by having co-ordination of activities to ensure that all aspects are considered and that the best use is made of the land. I think that forestry stands to gain by such a co-ordinated approach, because in the past it has been one of the complaints of those who were devotees of forestry that agriculture proceeded from the basis that the natural purpose for land is that it should be farmed, and that everybody else must prove his case against that. The purpose of the Rural Development Board is to consider all the uses to which the land in these areas
1432
may be made, and forestry will therefore start off from a better footing, perhaps, than it has ever done before.
But we cannot proceed from one extreme to another. If it was unsatisfactory that forestry had to prove its case against agriculture, we cannot just go to the other extreme and say that forestry must be accepted as the natural thing in other areas and that other factors are not to be considered. Therefore, we wish to have Clause 51 for its co-ordinating activities. The reason why I have accepted Amendment No. 46 is that we think we see the way to do this without conflicting with these co-ordinating activities, while at the same time removing a misconception that it was intended to be an obstacle.
The second thing the noble Earl said with which I disagree was his reference to the cutting back of the programme in 1960: he said there has not been any acceleration since. He has forgotten the fact that the present Government have twice accelerated. We in Scotland were immediately able—and I must remember that I am not speaking as a Scottish Minister at the moment—within an overall programme to accelerate in 1964, by taking advantage there of a short-fall which England and Wales could not at that time use. There has since been a further expansion in the total programme, and the matter is again being looked at. So, while the accelerator may be being pressed a little too gently for the noble Earl's liking, the foot is definitely on the accelerator to some extent.
I hope therefore (and I believe that this is probably the last piece of Business which the Committee will do to-night) that the noble Earl will be able to go off and consider the matter, in the knowledge that he has achieved his main objective, and pursue assiduously the task of scrutinising his other Amendments in order to see how many of them he can withdraw so that we may the more speedily get down to the ultimate form of his successful Amendment at the next stage.
THE DUKE OF BUCCLEUCH AND QUEENSBERRY: Before my noble friend speaks, may I say that the interpretation to which the noble Lord refers is quite widespread outside this House, and

1433
I hope that his words will restore confidence to the industry.
On Question, Amendment agreed to.
LORD HILTON OF UPTON: I think we have made reasonable progress and that this might be an appropriate moment
1434
to resume the House. I therefore beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.
House adjourned at three minutes past eight o'clock