Sitting of 16 July 1969

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  DUNDEE CORPORATION ORDER CONFIRMATION BILL
    EAST GREEN, ABERDEEN ORDER CONFIRMATION BILL
      FORTH PORTS AUTHORITY ORDER CONFIRMATION BILL
        CLYDE PORT AUTHORITY ORDER CONFIRMATION BILL
        Considered; to be read the Third time Tomorrow.
ORAL ANSWERS TO QUESTIONS
  SCOTLAND

    Longannet Power Station, Fife
    Mr. William Hamiltonasked the Secretary of State for Scotland if he will make a statement on the progress made on the construction of the Longannet Power Station in Fife; and when the first supplies of electricity may be expected to flow.
    The Minister of State, Scottish Office (Dr. J. Dickson Mahon): Construction is at an advanced stage, and I am informed that generation of electricity is expected to start before the end of this year.
    Mr. Hamilton: Can my hon. Friend say whether it is behind schedule, and if so by how much, and for what reasons? Is he satisfied that the Longannet mines will be in a position to supply the power station with coal when it is in full production?
    Dr. Mabon: The answer to the first point is, "Yes, it is behind time by six
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    months." The reasons are certain labour troubles, delivery of steel work for the peculiar kind of construction that is taking place there, and adverse weather. The answer to the second point is that we are confident that the full load of 5 million tons could be met by the pits nearby.

    Water Supplies (Anti-contamination precautions)
    Sir J. Gilmourasked the Secretary of State for Scotland whether he is satisfied with the precautions taken to ensure against contamination of water supplies in Scotland; what facilities are available for detection of contamination; and if he will make a statement.
    Dr. Dickson Mahon: I have no reason to think that water boards do not take all reasonable precautions in discharging their statutory duty to provide wholesome supplies, or that they do not make full use of the medical and laboratory services available to them.
    Sir J. Gilmour: In view of the scare at Auchtermuchty, may I ask the hon. Gentleman whether he is satisfied that the use of chemicals which may be dangerous should be permitted in catchment areas? This is emphasised by what happened in the Rhine the other day.
    Dr. Mabon: There is a difference between the position in Germany and that in our country, because we take a lot of our water from upland sources. When water is taken from a river, there are precise arrangements about filtration, and so on. The hon. Gentleman will know that Circular 32/68 lays all this out. I am concerned about what happened at Auchtermuchty, and I have looked into it closely.

    Roads
    Sir J. Gilmourasked the Secretary of State for Scotland whether he will make a statement on the mileage of motorways and dual carriageway roads completed in each of the last three years; and if he will make a forecast for completions in the next three years.
    Dr. Dickson Mahon: The answer given on 2nd July to my hon. Friend the Member for Rutherglen (Mr. Gregor Mackenzie) sets out the mileages up to 1968–69.

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    I expect that 21 miles of trunk road dual carriageways and motorways will be completed in 1969–70, 15 miles in 1970–71 and 20 miles in 1971–72.—[Vol. 786, c. 105.]
    Sir J. Gilmour: Is it not a fact, though, that although the recent White Paper said that the trunk roads would be completed by 1971 at least the northern half of the road from the Forth Bridge to Perth will be far behind that date?
    Dr. Mabon: Without notice I should not like to make a precise comment on that. A number of roadways have been delayed due to the statutory procedures and arguments over the line of the road. I think that this is inevitable. But we are up to date on mileage.
    Mr. Manuel: Can my hon. Friend inform the House how many miles of motorway we had in 1964, and the mileage that we have today?
    Dr. Mabon: In October, 1964, which I think is the month usually taken for these questions, we had two miles of motorway in Scotland. By the end of 1970, 60 miles will have been completed.
    Mr. Youngerasked the Secretary of State for Scotland what have been the main causes of delays in implementing the programme for building motorways and dual carriageways in Scotland; and if he will make a statement.
    Dr. Dickson Mabon: Delays in building particular roads arise through procedural and constructional difficulties, but as my right hon. Friend told the hon. Gentleman on 24th June, our target for 1970 will be achieved.—[Vol. 785; c. 259–60.]
    Mr. Younger: Is it not highly unsatisfactory that three of the major projects included in both the 1963 and the 1966 White Papers have according to the Minister's answer to me, been delayed until 1972 or 1973? Is not that a delay, and may we be told why it has happened?
    Dr. Mabon: We have been fortunate with the line of the road in some cases and unfortunate in others. Near my constituency we have had a particularly bad disappointment due to the objections of certain individuals. We cannot get over these difficulties. We have laid down certain rules, and we have to abide by them.
    Mr. Gordon Campbell: As my hon. Friend said, the latest White Paper shows that some important sections of dual carriageway trunk road which, according to the 1963 and 1966 White Papers, were to be completed by 1970 will not be completed by then. Is the Minister saying that these delays are entirely due to these procedural hold-ups, and nothing else?
    Dr. Mabon: If the argument is mainly about money and Treasury authorisation, the hon. Gentleman is wrong. We have kept within our estimates, and we shall achieve the mileage up to 1970. If the hon. Gentleman would be good enough to put down specific Questions about specific sections of road, I shall try to answer them. I hope that my hon. Friends will ask me all the favourable ones.
    Mr. Steele: Is my hon. Friend aware that I have a letter in my file dated 1955 in which it was promised that the double carriageway between Glasgow and Carlisle would be completed in 10 years? We are only getting it done now.
    Dr. Mabon: That is entirely due to this excellent Government. I envy my hon. Friend the Under-Secretary who is responsible for the Health Department in answering a Question about the Nine-wells Hospital.
    Mr. Monroasked the Secretary of State for Scotland what steps he is now taking to speed up the construction of motorways and dual carriageways in Scotland; and if he will make a statement.
    Dr. Dickson Mabon: Within the limits of available resources the construction of these roads is proceeding as quickly as the engineering problems and the statutory procedures allow.
    Mr. Monro: Is the hon. Gentleman aware that in Cmnd. 2864 the Secretary of State said that the major links to the South would be completed by 1970? Is he further aware that the A74 cannot possibly be completed for another two or three years? How does he think those waiting in Glasgow traffic jams this weekend will bless him?
    Dr. Mabon: The hon. Gentleman would be the very first to come to the defence of any objectors who raised questions with us about side road orders.

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    Difficulties have arisen in this matter over side road orders. I am glad to say that on the Scottish side most of our difficulties have been overcome, but on the English side there are difficulties and we must respect the rights of persons concerned. I hope that we shall start construction on this vital section early in 1970.
    Mr. Galbraithasked the Secretary of State for Scotland when he plans to hold a public inquiry into the proposed widening of the Great Western Road, Glasgow.
    Dr. Dickson Mabon: This autumn, if necessary.
    Mr. Galbraith: Will this inquiry be able to consider the wisdom of widening the road in view of the relief provided by the Clyde and Lomond motorways and in view of the bottleneck which will be created on the eastern stretch of the road for very many years? Will the hon. Gentleman bear in mind the strong feelings not only in the locality but throughout the whole of Scotland that this is an instance where traffic should take second place to people?
    Dr. Mahon: The hon. Gentleman is not supported by Glasgow Corporation in his last remarks. There are 135 objections, and the corporation is negotiating with the objectors. If some objections are outstanding, there will be an inquiry and these points will be taken up.

    Agricultural Buildings (Rating)
    Mr. Stodartasked the Secretary of State for Scotland for how long he has been considering the issues raised by the rating of certain agricultural buildings and the anomalies which this has created; and when he now expects to make a statement.
    The Under-Secretary of State for Scotland (Mr. Norman Buchan): Since these issues were clarified some two years ago following a series of court decisions, the case for a change in the law has been discussed on a number of occasions with the National Farmers Union of Scotland. I have considered their views with great care, and I shall announce a decision as soon as possible.
    Mr. Stodart: If it is by any chance a lack of enthusiasm on the part of his English colleagues for a change about which he himself expressed the need for considerable urgency, will the hon. Gentleman recollect that prior to 1956 there was a different form of rating legislation for Scotland? If the worst came to the worst, would he consider separate legislation to clear up this matter?
    Mr. Buchan: We are considering every aspect of the problem. It is a very complex one, as the hon. Member knows. As soon as we are ready to announce a decision we will let the House know.

    Local Government Ombudsman
    Mr. Maclennanasked the Secretary of State for Scotland if he will now consider introducing legislation to establish an Ombudsman for local government affairs in Scotland.
    Mr. Buchan: I would ask my hon. Friend to await the statement promised by my right hon. Friend the Prime Minister in his Answer on 24th June, 1969.—[Vol. 785, c. 1209–10.]
    Mr. Maclennan: In view of the negative replies which my hon. Friend has received from local authorities to his inquiries about their having set up complaints offices, does not he agree that in any case it is quite unsatisfactory that members of the public with grievances should have to rely on local authority officials who in many cases are bound to have to act as judges in their own causes?
    Mr. Buchan: We fully discussed this point in the House earlier. I reiterated that I thought that this would be a very useful development. I still exhort local councils to carry this through. As to my hon. Friend's other point, we should await developments.
    Mrs. Ewing: Can the hon. Member say whether any delay in making use of this excellent proposal is merely out of a consideration of cost, or is there any other reason?
    Mr. Buchan: The main problem is one of principle. We are examining this and other aspects of local government, and we shall be examining even more aspects of local government when the Wheatley Report comes out.

    Scottish Economy
    Mr. Youngerasked the Secretary of State for Scotland what representations he has received concerning the effects of current financial measures on the Scottish economy; and what reply he has sent.
    The Secretary of State for Scotland (Mr. William Ross): I have received 11 representations since November, 1968. In the majority of cases the reply emphasised that the financial measures operated since then are necessary to strengthen sterling and to bring the economy into better balance.
    Mr. Younger: Does not the Secretary of State recall that answers given to me recently have shown that S.E.T. is a net burden on Scotland of £58 million and that even taking into account R.E.P. the net burden next year will be £18 million? Does this not suggest that those of his hon. Friends who are saying that this is a financial benefit to Scotland have been talking through their hats?
    Mr. Ross: I do not think so. The hon. Gentleman over-simplifies the issue. He cannot ignore the overall effect upon the country.
    Mr. Grimond: In view of the serious effect of S.E.T. and the increase in S.E.T. on the north of Scotland, can the right hon. Gentleman assure us that evidence relevant to the situation there will be given to the committee which is said to be examining the whole matter?
    Mr. Ross: I think that it is a committee of one man. There is nothing to prevent any information being given or forwarded that would be relevant to consideration of this matter.
    Mr. Lawson: Will my right hon. Friend bear in mind that in this year and until 1970 the net burden on Scotland will be £8 million, and that immense benefit is coming to Scottish industry, as distinct from some hotels and shops? Will he see that this policy is continued and extended?
    Mr. Ross: My right hon. Friend is right to draw attention to the advantages corning to Scotland's manufacturing industry in respect of R.E.P. Bearing in mind that people who are employed in
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    manufacturing want to maintain and extend their work, other people who are complaining should appreciate that if their customers had no money their businesses would be very much worse off.
    Mr. Gordon Campbell: Is it the Government's intention to extinguish small businesses in Scotland? That is what their measures imply?
    Mr. Ross: Unlike what happened under the previous Government, it is not out intention to do so.

    Private Electricity Meters (Charging)
    Mr. Galbraithasked the Secretary of State for Scotland what evidence he has received of the extent of overcharging where private electricity meters are installed; and if he will make a statement.
    Dr. Dickson Mabon: My right hon. Friend has received only a few complaints of overcharging since 1st July, 1965. when maximum resale prices of electricity for domestic purposes were first fixed by the Scottish electricity boards, but the Government are not satisfied with the present arrangements and we are considering what further action is necessary to improve them.
    Mr. Galbraith: Is this unsatisfactory state of affairs not due to the fact that so many rents are uneconomical? Would it not be far better to allow a reasonable return in rents and give the electricity boards power to check private meters at the same time as they check the main meters in the houses?
    Dr. Mabon: I do not accept the hon. Member's point. However, I concede that we might bring this abuse within the scope of rent restriction. Even though it is a minor matter, the case of Miss Hocking, in Edinburgh, is a shocking one.

    Clyde Estuary Development
    Mr. Gordon Campbellasked the Secretary of State for Scotland what consultations he has now had with Scottish local authorities and industry about the potential of the Clyde Estuary to accommodate ships of over 300,000 tons and the consequent prospects of development in that area, in view of the continuing trend towards larger tankers and ore carriers.
    Mr. Monroasked the Secretary of State for Scotland what consultations he has had with local authorities in the Firth of Clyde area with regard to an ore terminal.
    Mr. Ross: I refer hon. Members to the comprehensive reply given by my hon. Friend the Minister of State in the debate on 7th July.—[Vol. 786, c. 1012–23.]
    Mr. Campbell: Does the Secretary of State not agree that this potential is likely to be of great significance to the Scottish economy, and especially to the steel industry? Since it is apparently taking from March to October simply to consider changing the terms of reference of the Advisory Committee, what is the Secretary of State doing to promote a good planning system for the whole area? This is essential, since a change in local authority organisation and in planning procedures is likely to take several years.
    Mr. Ross: If we had taken the advice of some hon. Members opposite and had waited until we had received the report of the Wheatley Commission, it would have taken a great deal longer. What we have done is to bring local authorities together. We have created growth, and there has been more co-operation and co-ordination. If hon. Members opposite were sincere, I am sure that they could have given a little more help. I can think of only one outspoken defence of what was done, and that was put forward by the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor).
    Mr. Monro: Most hon. Members thought that the Wheatley Commission would have reported long before now. Is not the hon. Gentleman aware that there is a great deal of concern at the thought that planning may be going on on an ad hoc basis? Surely there should be much more co-ordinated effort between planning authorities on major projects both nationalised and private enterprise.
    Mr. Ross: Much of what we have done and are doing in anticipating the coming together of planning authorities could have been done before.
    Mr. Galbraith: Instead of getting so angry, could not the right hon. Gentleman use some of his energy to concen-
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    trate on development in an area which is already industrialised, instead of allowing it to proliferate along a coast of great beauty and tourist value?
    Mr. Ross: What makes me slightly angry is the fact that the Opposition speak with two voices. The hon. Member does not want this project to go through. He has said so. This was evident in the speech that he made when we discussed the matter fully.

    Public Buildings (Aids for Disabled Persons)
    Mr. Gorton Campbellasked the Secretary of State for Scotland what guidance he has given to local authorities and building agencies in Scotland on the incorporation in public buildings of basic aids for seriously disabled persons.
    Dr. Dickson Mabon: Two pamphlets on "Access to Public Buildings for the Disabled" and "Design of Public Conveniences with Facilities for the Disabled" were issued to local authorities in 1965 and 1968 respectively.
    Mr. Campbell: Are the Secretary of State and other Ministers concerned satisfied that in all public buildings being designed or built in Scotland there are provisions for at least one point of access for wheel chairs?
    Dr. Mabon: I am glad to tell the hon. Member that my right hon. Friend the Minister of Public Building and Works is at present considering revising and reissuing the earlier pamphlet on access in order to bring it home to the disabled and others that these facilities are essential. Statutory responsibility lies with the local authorities, but we have no reason to believe that they are unsympathetic. I should like to look into the point that the hon. Member has raised specifically and write to him about it.

    Wick and Thurso (Development)
    Mr. Maclennanasked the Secretary of State for Scotland what action the Highlands and Islands Development Board is taking to follow up the report of the Working Party on the Development of Wick and Thurso; and if he will make a statement.
    Dr. Dickson Mahon: The board is working closely with the Caithness county development officer to ensure that sites and facilities are available for such industrial projects as they can attract to the county, and the board has already been authorised to feu land at Ormlie, Thurso, on which to build an advance factory. The board has also lent its support to the purchase by Caithness County Council of 35 acres of land, with buildings, at Wick Airport. Management consultants are being commissioned by the board to help in its efforts to attract fresh industry.
    Mr. Maclennan: While I welcome this increased sense of urgency over the need to develop that area, may I ask my hon. Friend whether he would accept that, although there is employment assured at the Atomic Energy Authority Establishment for five years, nothing would so greatly restore the confidence in the potential of the area as a statement from the Government that in principle they accept the long-term need to retain a research establishment there?
    Dr. Mabon: I have no doubt that my hon. Friend will have been encouraged by the personal visit of the Prime Minister at the weekend and his subsequent remarks. My hon. Friend should remind his constituents that the working party which has been concerned with this for some time has begun to show positive achievements and is engaged in a number of major surveys concerned not only with industry but with fishing, agriculture and tourism.

    Borders General Hospital, Melrose
    Mr. David Steelasked the Secretary of State for Scotland when he expects to announce the starting date for the building of the new general hospital for the Borders on the site recently acquired for the purpose near Melrose.
    The Under-Secretary of State for Scotland (Mr. Bruce Millan): I am unable to add to the reply given to the hon. Gentleman on 12th March.—[Vol. 779, c. 285.]
    Mr. Steel: Will the hon. Gentleman accept that there is growing concern in the Borders that if economic development goes ahead, as we hope it will, it will
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    be necessary to replace this old wood-hutted hospital with something approaching modern requirements? Will he accept that the doctors and nurses do a remarkable job in this hospital in what are really very bad sub-standard conditions?
    Mr. Millan: I do not know that I would accept the description of this as being a very bad sub-standard hospital. I do agree that this hospital ought to be replaced. We have in mind the economic development in the Borders as one of the factors to be taken into account in determining a priority for it.
    Earl of Dalkeith: What capital expenditure has there been on this site so tar, and what does it represent in terms of annual interest so long as it is not built on?
    Mr. Millan: About £1,000 per bed has been spent on this hospital in the last twenty years. Compared with other hospitals in Scotland, it has not been badly treated from that point of view.

    Scotland-Europe (Direct Communications)
    Mr. David Steelasked the Secretary of State for Scotland whether he will ask the Scottish Economic Planning Board to undertake a study of available facilities for direct travel between Scotland and other European countries and their effect on the Scottish economy with a view to their improvement.
    Mr. Ross: This matter is kept under review by the Transport Committee of the Scottish Economic Planning Council.
    Mr. Steel: Can the right hon. Gentleman say whether the Transport Committee of the Economic Planning Council has considered the rather ludicrous situation where Loganair is required to charge fares from Glasgow and Aberdeen to Norway based on the assumption that one travels via London? Is this not outrageous? Ought we not to be able to get a fare structure for the flights which the public need direct from Scotland to parts of the Continent?
    Mr. Ross: I agree that we want as many direct routes as we can. This is a matter not for me but for the licensing authority. If the hon. Gentleman has any point in mind I would be very glad to have a look at it. We do have the

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    links, at present, provided by B.E.A., B.U.A., Iberia, S.A.S. Seaboard, Ice-landair, K.L.M. and Panam.
    Mr. Dalyell: Since Edinburgh Airport is subject to low cloud and fog, is there not a priority requiring B.E.A. to install automatic landing gear for Tridents at this airport before any other United Kingdom airport outside London?
    Mr. Ross: My hon. Friend should put that point to the President of the Board of Trade.
    Mr. Grimond: Surely this is a rather ridiculous charging system, and it is a matter for the Secretary of State, representing Scotland? Is it not also an example of the importance of ensuring that when we go into the Common Market, if we do, all travel is not taken through London? Would the right hon. Gentleman agree that if we are to achieve adequate links from Scotland to the Continent, planning must begin now and this ridiculous nonsense of charging must be stopped and the system simplified?
    Mr. Ross: I do not know whether it is ridiculous nonsense until I know something about it, and that is why I suggested to the hon. Member that he should write to me.

    Teachers
    Mr. Rankinasked the Secretary of State for Scotland what consultations he has had with organisations concerned with secondary school teaching reorganisation; and what plans are being proposed.
    Mr. Millan: I have at present no plans to change the organisation of secondary school teaching.
    Mr. Rankin: Is my hon. Friend aware that teachers associated with secondary education assure me that the staffing position is not a very happy one and that over any given period of, say, seven years one out of three teachers is now leaving, which in turn is placing a demand upon graduates engaged in the primary schools? Does my hon. Friend not regard that as a serious position, to which he should attend?
    Mr. Millan: I know that there are shortages of teachers in secondary schools but recruitment is increasing at the same time. This is true not only of
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    graduates but of honours graduates entering colleges of education.
    Mr. Edward M. Taylor: Has the hon. Gentleman discussed with secondary teachers' organisations the question of the future of the selected schools in Glasgow once fees are abolished? Does he appreciate the very big problems which will arise then, and can he assure us that he will not try to create comprehensive territorial secondary schools in areas where hardly anyone lives?
    Mr. Millan: That has nothing to do with the Question on the Order Paper.
    Mr. Tom McMillanasked the Secretary of State for Scotland if he will make a statement on the progress of the scheme for additional payments in areas of teacher shortage.
    Mr. Millan: A total of 73 secondary and 80 primary schools, mainly in the west of Scotland, have been designated as schools of severe teacher shortage. Provisional figures for the secondary schools are encouraging. These show that between January, 1968, and January, 1969, the pupil/teacher ratio in the designated secondary schools improved from 22·7 to 21·8 despite a slight worsening of the ratio as a whole in Scotland. I do not as yet have figures for the designated primary schools.
    Mr. McMillan: While thanking my hon. Friend for that reply, may I ask him to keep in mind that the scheme should be furthered and its great success in Glasgow borne in mind?
    Mr. Millan: This will happen in any case when the present schemes comes to an end in 1971. So far, the results are very encouraging, and it is something of which we want to take account in our future planning for teacher supply.
    Mr. MacArthur: Does the hon. Gentleman recognise that, while these results are encouraging, any suggestion of direction of teachers would be totally unacceptable?
    Mr. Millan: This is not a question of direction; it is a question of giving financial encouragement to teachers to go to the schools where the shortage is most acute. I should have thought that that would be acceptable to all sides of the House.
    Mrs. Ewingasked the Secretary of State for Scotland how many persons have now been turned down by reference panels for registration with the General Teaching Council in Scotland; and now many such persons are now in the employment of Scottish education authorities in schools, specifying the number in each authority and the jobs these persons are engaged to do.
    Mr. Millan: The hon. Lady is confusing different things. Reference panels are concerned not with the registration of teachers, but only with temporary appointments of unregistered teachers.
    Mrs. Ewing: Does the Minister think that that is a satisfactory reply? Is he aware of the concern of the Educational Institute of Scotland in the matter; and that the Lanarkshire section of the Educational Institute asked for the question to be raised in Parliament? Is he not aware that there is a belief that if that has happened, and we have not heard, it looks like the back-door entrance of unqualified staff?
    Mr. Millan: Whatever the E.I.S. in Lanarkshire may have done, it has not asked for this Question to be put on the Order Paper because, obviously, the Question shows lack of understanding of the purpose of the reference panels. If the hon. Lady referred to the situation in Lanarkshire, where there is controversy about the continued employment of unregistered teachers who have been disqualified by the reference panels, I must say that I have already met the education authority and have obtained what I think are satisfactory assurances on these matters.
    Mr. James Hamilton: Will my hon. Friend also tell the House that I wrote to him, and that I received a reply from him acceptable to Lanarkshire teachers, and particularly the Lanarkshire section of E.I.S.?
    Mr. Millan: I am glad to hear that.
    Mr. MacArthurasked the Secretary of State for Scotland how many teachers in schools had not re-registered with the General Teaching Council at the latest convenient date; and if he will make a further statement.
    Mr. Bruce-Gardyneasked the Secretary of State for Scotland what is his latest estimate of the number of teachers
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    currently employed in schools in Scotland, who have failed to register with the General Teaching Council since 1st April 1969; and if he will state the numbers in this category employed by each local authority in Scotland, respectively.
    Mr. Millan: I have not asked education authorities for the information that would be needed to bring up to date the figure of 2,139 at 1st July that I announced during the Estimates debate in the Scottish Grand Committee on 3rd July. As regards the situation generally, I have nothing to add to the reply given to the hon. Member's Question of 25th june.—[Vol. 785, c. 277.]
    Mr. MacArthur: Will the Minister agree that the constructive course for teachers to take is probably to re-register pending the outcome of the present review? Would he also agree that he cannot allow the present position to drag on, and that the final decision must be seen to be equitable and fair to those teachers who were dismissed earlier this year?
    Mr. Millan: I certainly agree that those who are not registered or who have not re-registered should do so now. The figures of registrations have gone up by 673 in the last fortnight since I announced the previous figures. I agree that the matter of equity between teachers dismissed last year and those not registered this year has to be borne in mind. I also have no wish that this matter should drag on indefinitely.
    Several Hon. Members rose—
    Mr. Speaker: Mr. Hannan.
    Mr. Bruce-Gardyne: On a point of order, Mr. Speaker. I have Question No. 73.
    Mr. Speaker: A late question does not entitle the hon. Gentleman to be called. Mr. Hannan.
    Mr. Hannan: Will my hon. Friend make it known that this is essentially a matter for the teachers themselves to resolve? Will he also try to make it clear that my right hon. Friend the Secretary of State should not be seen to be carrying the responsibility for untoward things that happen as a consequence?
    Mr. Millan: The responsibility for dealing with teachers who have not registered is certainly with the local education authorities. There is also now the question of general support for the

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    General Teaching Council. The continuing responsibility is on the teachers individually and through their associations, and I certainly would not wish to derogate from that responsibility.
    Mr. Bruce-Gardyne: The Minister has referred to the inequity as between those teachers sacked last year and those who have not been sacked this year although they committed precisely the same supposed technical offence, but does he intend to do something about equity? Does he also intend to do something about the situation in which every local authority is in breach of the law, and has been in breach of the law since the beginning of May?
    Mr. Millan: I did not mention any inequity at all. What I said was necessary was the maintenance of equity between the two years.
    Mr. Dewarasked the Secretary of State for Scotland what progress has been made with the discussions with local education authorities following the publication of the recent report on secondary school staffing.
    Mr. Millan: Copies of the memorandum "Staffing of Secondary Schools in Scotland" and of my Department's Circular 714 were sent to all education authorities and to the teachers' and local authorities' associations. I have received comments from some of these bodies. I am arranging a series of discussions with interested bodies in the early autumn.
    Mr. Dewar: Does my hon. Friend accept that everyone in Scotland is anxious to see the Government, particularly by a set of incentives, tackling the problems of staffing in the less fortunate areas, but will he also accept that there is anxiety in areas such as Aberdeen that it may be in the mind of the Government to impose ceilings which would not permit the maintenance of the present excellent staff-pupil ratio in this area? Has he anything to say to reassure us?
    Mr. Millan: I do not want to add anything at the moment to the scheme adumbrated in Circular 714 but we are anxious to have a scheme of distribution which will improve the position in areas which at present suffer from an acute teacher shortage.
    Mr. MacArthur: Will the hon. Gentleman now answer the question I put to him earlier? Will he give the House an
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    assurance that there is no question of direction of teachers being resorted to to ease the shortage in these difficult areas?
    Mr. Millan: I have answered that already; there is no question of direction.

    Music (Grants)
    Mr. Tom McMillanasked the Secretary of State for Scotland what grant and guarantees were made to the Scottish Arts Council in respect of music throughout Scotland for the years ended March, 1968, and March, 1969; and how these figures compare with those for the financial years ended March, 1963, and 1964.
    Mr. Millan: As the Answer includes a number of figures, I will, with permission, circulate it in the OFFICIAL REPORT.
    Mr. McMillan: I thank my hon. Friend for that reply.
    Following is the information:

    Year (1)

    Total Allocation to Scottish Arts Council from Arts Council of Great Britain (2)

    Grants by Scottish Arts Council to Music (3)

    £

    £

    1962–63

    144,666

    44,337

    1963–64

    174,600

    65,600

    1967–68

    707,700

    198,833

    1968–69

    795,000

    257,425

    (provisional)

    (provisional)

    Figures in col. (2) for 1967–68 and 1968–69 include £77,700 and £90,000 respectively from the "Housing the Arts" fund.

    Herring Board
    Mr. Clark Hutchisonasked the Secretary of State for Scotland if he will take steps to increase his power of supervision over the activities of the Herring Board, particularly where staff is concerned.
    Mr. Buchan: No, Sir. Ministers' powers are in general adequate, and as regards staff I consider that the board should be responsible for its own arrangements.
    Mr. Clark Hutchison: If an injustice arises one must deal with the board. Should there not be some system of appeal or supervisory arrangements whereby an outside body or person can give a final answer?
    Mr. Buchan: I know that the hon. Member is referring to a specific case, and that he may be meeting the chairman of the board to deal with the case. The

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    statutes are clear. It is the function of the board to look after certain aspects. I know something of the situation. As I understand it, the decision was in line with the requirements of the statutes.

    Housing
    Mr. Edward M. Taylorasked the Secretary of State for Scotland how many houses have been started and completed, respectively, in Scotland in the first six months of 1969; and what were the comparable figures for the first six months of 1968.
    Dr. Dickson Mabon: The precise figures will not be available until later this month. In the corresponding period last year 21,509 were started and 18,573 completed.
    Mr. Taylor: Would the hon. Gentleman agree that the figures for starts and for completions will be down, and, bearing in mind the figure for starts so far this year, when does he think that his specific pledge of 50,000 houses by 1970 will be achieved?
    Dr. Mabon: The hon. Gentleman is terribly out of date. I cannot give precise figures. When he sees the figures for the second quarter, he will find a substantial improvement on the first quarter, bringing us very close to the figures for 1968, a record year. We shall expect from him his usual congratulatory telegram praising the Government for their superior housing record over that of the Conservatives.
    Mr. Buchanan-Smith: Would not the hon. Gentleman agree that the alarming thing about the housing figures is the much bigger proportional fall in starts than completions compared with last year? Does not this make his target for 1970 an absolute dead duck?
    Dr. Mabon: The hon. Gentleman has not seen the figures for the second quarter, so how can he make these assertions? We have constantly warned him not to calculate performance on one quarter. I expect him also to send a telegram to us.
    Mr. James Hamiltonasked the Secretary of State for Scotland what was the total value of the standard improvement grant and the discretionary grant,
    598
    respectively, over the past four years in Lanarkshire County Council.
    Dr. Dickson Mabon: With permission, I will circulate the figures in the OFFICIAL REPORT.
    Mr. Hamilton: Obviously I do not know what the figures are. Will my hon. Friend give thought and consideration to enlarging this scheme whereby other householders who do not qualify at present could come into it and, as it were, save some of the houses which are badly needed in Lanarkshire?
    Dr. Mabon: My hon. Friend will be proud to know that Lanarkshire County Council on standard grant has more than doubled the grants paid in 1965 and discretionary grants over the last three months were 15 per cent. up. As he knows, we debated the Housing (Scotland) Bill recently, and we shall be issuing a guide book on the matter.
    Following are the figures:

    Standard Grant (amounts paid) £

    Discretionary Grant (amounts approved) £

    1965

    2,782

    11,720

    1966

    5,935

    21,660

    1967

    4,488

    18,889

    1968

    6,719

    13,757

    Mr. Hannanasked the Secretary of State for Scotland how many houses for sale have been built in Glasgow for each of the last three years.
    Dr. Dickson Mabon: 57, 93 and 77 respectively.
    Mr. Hannan: Do not those figures demonstrate the great shortage of land for building within the City of Glasgow? Does this not emphasise the need for Glasgow Corporation to move and agree in the matter of the Erskine development for both private and public building?
    Dr. Mabon: Yes, I quite agree with my hon. Friend, and I hope that the corporation will allow us to get on with the development in Erskine.
    Mr. Galbraith: On the availability of land, does not the hon. Gentleman agree that the very low level of rents discourages people from providing houses for themselves?
    Dr. Mabon: If the hon. Member acquainted himself with present-day facts about housing in Scotland he would know

    599
    that one of the complaints of private developers in Scotland is lack of land and that my hon. Friend the Member for Glasgow, Maryhill (Mr. Hannan) was on a good point when he spoke about land at Erskine because there is land for 4,000 houses there.
    Mr. Hugh D. Brown: Will my hon. Friend institute inquiries into the social problems which spring from lack of facilities to provide land for owner-occupation housing?
    Dr. Mabon: We have much evidence about this already before the Scottish Housing Advisory Committee. We want to see an increase in house building in both the private and the public sectors.

    Part-time Education
    Mr. Edward M. Taylorasked the Secretary of State for Scotland how many pupils in Scotland were receiving part-time education at the latest date for which figures are available; and what percentage of this total was at Glasgow schools.
    Mr. Millan: 11,785 in the week ending 30th May, of whom 55 per cent. were in Glasgow schools.
    Mr. Taylor: Does the hon. Gentleman agree that Glasgow is still carrying far more than its fair share of part-time education? Will he at least give an assurance that he will bear these rather worrying statistics very much in mind when considering the possibility of teachers being suspended because of the G.T.C. issue?
    Mr. Millan: I do not think that the G.T.C. issue arises out of the Question, but the position in Glasgow is still worrying. The figures which I have just given for Glasgow are affected by a fairly large number in primary schools. This year there has been a change in arrangements. The second transfer to secondary schools has been discontinued, but there is still a second entry in primary schools, which means that there have been particular difficulties this year. I hope very much that they will not be repeated in subsequent years.
    Mr. Lawson: Is not a large part of the difficulty in Glasgow due to the fact
    600
    that a very substantial number of teachers prefer to teach in the agreeable areas and schools and will not go to the difficult areas where they would be very valuable?
    Mr. Millan: That may be a factor. So far as it is, the scheme for inducement payments to which I referred previously is an important element in putting the question of distribution on a more satisfactory basis.

    Plant and Machinery (Investment)
    Mr. Rankinasked the Secretary of State for Scotland if he will state the amount of investment in plant and machinery in Scotland for the first half of 1969; and how this compares with the same period in 1968.
    Mr. Ross: Half-year figures are not available; the amount of investment in plant and machinery in Scotland in 1968 will be published in the October issue of the Digest of Scottish Statistics.
    Mr. Rankin: I am sorry that my right hon. Friend has imparted so little information. I had read that there was a fall in investment over last year, but, as one may assume at least constant investment, should not one expect the population, instead of shrinking, as it appears to be doing, to begin to show an increase, too?
    Mr. Ross: I think that my right hon. Friend is referring to a survey by the C.B.I. which referred to the possibility of a fall in relation to plant and machinery.
    Mr. Rankin: Yes, I am.
    Mr. Ross: The same survey suggested that there would be a proportionate increase in investment in buildings. It is a very complex business, and expectations are not always borne out by facts. We shall need to watch the matter. Population is being held at the moment.
    Mr. Younger: Is not this anxiety about a fall in investment a very serious matter for the Scottish economy? If it is, does it not indicate that R.E.P. is not doing what the Secretary of State claimed it could do; namely, increase investment in machinery?
    Mr. Ross: If the hon. Gentleman looks at the statistics on plant and machinery published by the Board of Trade and at the published Scottish statistics, he will find that, compared with the time when the Conservative Party was in office, every year has been a record year for investment in plant and machinery under the Labour Government. I am glad to say that the figures for 1968, which will be published later, will show an improvement over the previous year.

    Mental Hospital Patients
    Sir M. Galpernasked the Secretary of State for Scotland what proportion of patients in Scotland is in mental hospitals at the latest convenient date; and how this figure compares with the average for the last five years.
    Mr. Millan: The average number of patients in mental hospitals during the year to 31st March, 1968, represented 33·01 per cent. of the average number of patients in all hospitals; the average during the five years to 31st March, 1967, was 34·16 per cent. If mental deficiency hospitals are included, the figures are 44·52 per cent. and 44·76 per cent.
    Sir M. Galpern: Would my hon. Friend agree that these figures are disturbing? Would he ascribe the very high percentage of inmates in mental hospitals to the increased alcoholic drinking habits of the people and the strains and stresses of the ever-quickening pace of modern living? What steps have been taken to investigate this very serious illness among the population in Scotland?
    Mr. Millan: The figures has not increased proportionately; they have remained about the same. The numbers of patients being admitted to mental hospitals with a diagnosis of alcoholism have gone up and they now represent about a quarter of all male mental hospital admissions. This is a very worrying factor indeed. A good deal is being done in the health education and other fields on this problem.
    Mr. Edward M. Taylor: Would not the hon. Member agree that one of the reasons for the high figures is that so many beds in these hospitals are full of geriatric patients simply because there is nowhere else for them to go? Would he
    602
    agree that the figures could be substantially reduced if we concentrated on making proper provision for geriatric patients?
    Mr. Millan: The provision of geriatric beds in the hospital service has been very substantially increased in the last few years. The effort of local authorities on community services for mental deficiency has increased very considerably in recent years. But the total numbers and the proportion are not increasing. That does not mean that we are happy that we have the right balance between hospital and community provision. I should like to see the balance tilted towards the latter rather more than it is.

    Surgical Transplants
    Sir M. Galpernasked the Secretary of State for Scotland if he will list in the OFFICIAL REPORT details of all surgical transplants carried out in Scotland during the last year.
    Mr. Millan: I will, with permission, circulate in the OFFICIAL. REPORT a detailed list of all surgical transplants carried out in Scotland during the year ending 30th June, 1969. There were 15, all renal transplants.
    Sir M. Galpern: I thank my hon. Friend for his reply and look forward to reading the information in the OFFICIAL REPORT. Has he formed any view on the recent report of the MacLennan advisory group on transplants in general, and, in particular, has he any views on the creation of a central register of donors who can contract in for transplants?
    Mr. Millan: It is a little early for the Government to take definite views on these matters. We were very anxious that the report should be published so that we could test public reaction to it. The comments in the Press have been very valuable from that point of view. But we should like to have more idea of the general feeling before coming to any firm decisions.
    Mr. Brewis: Why have the Government done so little to encourage people voluntarily to allow their organs to be used after death for transplant surgery?
    Mr. Millan: I am not sure that that is an accurate comment. I think that the

    603
    report of the MacLennan Committee deals with this kind of development as well as
    Following is the list:

    SURGICAL (RENAL) TRANSPLANTS CARRIED OUT IN SCOTLAND DURING YEAR ENDING 30TH JUNE, 1969

    Date of Operation

    Number of Transplants

    Location

    July, 1968

    …

    …

    …

    1

    Nuffield Unit, Western General Hospital, Edinburgh.

    August, 1968

    …

    …

    …

    1

    Nuffield Unit, Western General Hospital, Edinburgh.

    November, 1968

    …

    …

    …

    5

    Nuffield Unit, Western General Hospital, Edinburgh.

    December, 1968

    …

    …

    …

    2

    Nuffield Unit, Western General Hospital, Edinburgh.

    January, 1969

    …

    …

    …

    1

    Nuffield Unit, Western General Hospital, Edinburgh.

    May, 1969

    …

    …

    …

    1

    Nuffield Unit, Western General Hospital, Edinburgh.

    May, 1969

    …

    …

    …

    1

    Royal Infirmary, Glasgow.

    May, 1969

    …

    …

    …

    1

    Western Infirmary, Glasgow.

    June, 1969

    …

    …

    …

    2

    Nuffield Unit, Western General Hospital, Edinburgh.

    15

    Marriage Law (Kilbrandon Committee's Report)
    Mr. Dewarasked the Secretary of State for Scotland what plans he has to implement the proposals of the Kilbrandon Report on the Marriage Law of Scotland.
    Mr. Buchan: My right hon. Friend is in the process of seeking views on the report from the churches, the local authority associations, bodies representing the legal profession, organisations in the social field and the Governments of several European countries. When these consultations have been completed, he will decide what action should be taken on the committee's recommendations.
    Mr. Dewar: Will my hon. Friend ensure that these consultations do not take too long, as consultations on similar matters have sometimes taken in the past? Will he accept that the report contains a very large number of useful references in an important field of law, and is right to emphasise the need to deal with the rather sad and tarnished trade in runaway marriages which continues to lead to embarrassment and complications in our courts?
    Mr. Buchan: The organisations we are consulting have been asked to let us have their views by 30th September next. At that point, we shall be able to decide whether legislation is necessary and, if so, the form that the legislation should take. It would not be proper for me to comment on the various aspects of the report, but my hon. Friend is right to draw attention to the report.

    Legal Aid Scheme
    Mr. Dempseyasked the Secretary of State for Scotland if he will take steps
    others. There are limitations on the point which the hon. Gentleman mentions.
    to extend the Legal Aid Scheme to special cases being tried in burgh and justice of the peace courts; and if he will make a statement.
    Mr. Buchan: I regret that there is no prospect, in the present economic situation, of an extension of the Legal Aid Scheme to such proceedings.
    Mr. Dempsey: Will my hon. Friend at least keep the matter within his view? Is he aware that there are some genuine cases in which legitimate defences cannot be properly argued because of insufficient financial resources to employ the necessary legal representatives for that duty? Will he bear that point in mind when considering any future liberalisation in policy?
    Mr. Buchan: We will take all aspects into account.
    Mrs. Ewing: Apart from the question of expense, does the hon. Gentleman take the point that these courts are often those in which members of the public come up against the force and majesty of the law for the first time, and that it might be more important to ensure that no one is denied legal representation through lack of funds in these courts more than in any other court?
    Mr. Buchan: I agree with the first half of the hon. Lady's supplementary question: I disagree with the second half.

    Primary Schools (Closures)
    Mr. James Davidsonasked the Secretary of State for Scotland what is his policy towards the closure of single-teacher primary schools in remote rural areas; and if he will make a statement.
    Mr. Millan: Any proposal of an education authority for the closure of a

    605
    school requires my right hon. Friend's approval, and he considers each case on its merits. In general, children are believed to gain social and educational advantages from being taught in a larger school community and in more homogeneous age groups than obtain in one-teacher schools, but other factors such as the condition of the existing buildings, the availability and economic use of teachers, the distances which children would have to travel, and the wishes of parents are also taken into account.
    Mr. Davidson: I thank the Under-Secretary of State for his reply. I am well aware of his views on the subject. Will he confirm that he agrees that where the closure of such schools might lead to difficulty and danger to young children travelling in winter conditions, those schools should be maintained, if possible, even though the cost appears to be unjustified?
    Mr. Millan: I certainly take the view that traffic conditions involving any question of danger to the children concerned are a very important factor to be borne in mind in any such proposal.
    Mr. Rankin: Has my hon. Friend ever given any thought to the employment of small aircraft in order to obviate altogether the necessity for this type of school?
    Mr. Millan: No, Sir. I must confess that I have never given it any thought.

    General Teaching Council
    Mrs. Ewingasked the Secretary of State for Scotland if he will make a statement on the progress of the review of the General Teaching Council.
    Mr. Ross: I have nothing to add to my reply of 1st July to the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor).—[Vol. 786, c. 72.]
    Mrs. Ewing: In view of the urgency of the situation in that some hundreds of teachers have not registered under the G.T.C., will the right hon. Gentleman promise to press for a review in order to try to keep every one of these vital teachers on the payroll?
    Mr. Ross: It is not a question of my pressing for a review; I have instituted the review. I have received representations from many organisations and individuals in respect of many aspects of the G.T.C. The final date for the receipt of
    606
    representations was 30th June, but I am not being entirely rigid about that. If anyone has missed the date, I shall still be pleased to hear from him. I hope to make a statement on this subject, probably in the autumn.
    Mr. MacArthur: Will the Secretary of State assure the House that he will treat this review with the utmost possible urgency in view of the need, as soon as possible, to assist in the harmonious establishment of the G.T.C.?
    Mr. Ross: Yes, Sir. But I do not think that in this case speed is necessarily the right thing. We want urgency in relation to the adequacy of consultation and the depth of consideration to be given.

    Employment Target
    Mr. MacArthurasked the Secretary of State for Scotland if he will make a further statement about the progress achieved in meeting the 1970 employment target set out in e White Paper, The Scottish Economy 1965–70.
    Mr. Ross: I have nothing to add to the reply which I gave the hon. Gentleman on 12th March.—[Vol. 779 c. 280.]
    Mr. MacArthur: Is not the Secretary of State yet aware that there are now 35,000 fewer jobs in Scotland than four years ago?
    Mr. Ross: I have already pointed out to the hon. Gentleman that in respect of the targets we have come well up to the provision of new jobs. I have also stated that we have been subjected to a far speedier rundown of the older industries of mining, railways, agriculture and the rest than was expected.

    Radiographers
    Mr. Adam Hunterasked the Secretary of State for Scotland what is the total amount of radiographers currently employed in the hospital service; and how this compares with the last five years.
    Mr. Millan: At 30th September, 1968 radiography staff employed in the hospital service in Scotland numbered 550 in whole-time equivalent. The corresponding figures for preceding years were 543 in 1967, 538 in 1966, 516 in 1965, 494 in 1964 and 504 in 1963.
    Mr. Hunter: Is my hon. Friend aware that for the past few years there have

    607
    been serious staffing difficulties in radiography departments in certain parts of Scotland? Does his answer mean that these problems will be overcome?
    Mr. Millan: I am not aware of any general staffing problems of radiographers. We do not keep a general register of vacancies in the service. If my hon. Friend knows of any particular difficulties in hospitals which he has in mind and will let me know, I will look into them.

    Drugs
    Mr. Adam Hunterasked the Secretary of State for Scotland what was the cost of drugs in Scottish hospitals in the periods 1960 to 1964 and 1964 to 1968, respectively.
    Mr. Millan: £6,036.907 in the four years to 31st March, 1964, and £8,046,312 in the four years to 31st March, 1968.
    Mr. Hunter: Can my hon. Friend say whether the increased costs are due to higher prices or a greater amount of drugs being used? In either event or in both, does he say that this is an improvement in the quality of the National Health Service?
    Mr. Millan: I certainly think improved drugs coming forward all the time mean an improvement in the quality of the service which the National Health Service is able to give to patients. Some of these increases, of course, arise from increases in costs, but others for the other reasons mentioned by my hon. Friend.
    Mr. William Hamilton: Will my hon. Friend say whether there is any machinery in the Scottish Health Department to supervise and inquire into the profit margins of the firms supplying the drugs?
    Mr. Millan: There is, of course, machinery on a United Kingdom basis for looking into drug costs generally both in the hospital service and in the general practitioner service. This was dealt with at considerable length in the Sainsbury Report and in the reply which the then Minister of Health gave on behalf of both Departments in response to the recommendations of that report.
    Mr. Woodburn: Is my hon. Friend aware that increase in the cost of drugs is not always a waste as general practitioners are often able to treat their patients at home with new drugs and thus
    608
    save the expense of sending patients to hospital?
    Mr. Millan: I certainly agree that not all increased expenditure on drugs is by any means a waste. On the other hand, we want to keep drug costs down to a reasonable amount and we do not want to see excessive prescribing of drugs or the wasted use of drugs.

    Kirklands Hospital, Bothwell (Minister's Visit)
    Mr. James Hamiltonasked the Secretary of State for Scotland if he will make an official visit to Kirklands Hospital, Bothwell, in the light of the information given to him by the hon. Member for Bothwell.
    Mr. Millan: I hope to do so later this year.
    Mr. Hamilton: I thank my hon. Friend for that reply. I am quite sure that the information I have given him verbally and also in writing will bear fruit when he visits this hospital, and I hope that at the end of the visit—[HON. MEMBERS: "Question."]—he will come to the same conclusion as I came to long ago.
    Mr. Speaker: Order. The hon. Member should ask a question.

    Maternity Beds (Glasgow)
    Mr. Hannanasked the Secretary of State for Scotland what is the present maternity bed provision in Glasgow; how this compares with five years ago; and what provision is being made for future requirements.
    Mr. Millan: 770 beds. On 31st December, 1963, 765 beds were available for Glasgow mothers; since then 136 new beds have been provided, replacing older accommodation. About 90 per cent. of Glasgow births are now in hospital, and estimates of future needs suggest that the main effort should continue to be on the provision of replacement beds. A new 110-bed unit to be opened at the Southern General Hospital later this year includes 63 replacement beds.
    Mr. Hannan: May I congratulate my hon. Friend on the magnificent achievement in this field as in many others since the advent of this Administration? Can he now give an assurance that at long last the qualifications in the Montgomery Report are being met in respect of Glasgow?
    Mr. Millan: They are more than being met. The Montgomery Committee recommended that there should be 75 per cent. of confinements in hospitals; and in Glasgow there are about 90 per cent. and in Scotland as a whole about 92 per cent. confinements in hospitals.

    Fishing (Hunter Report)
    Mr. Dalyellasked the Secretary of State for Scotland when he now expects to present a Green Paper or White Paper on the Hunter Report on Fishing.
    Mr. Buchan: I regret that my right hon. Friend's consideration is not yet far enough advanced to enable him to say when he will be able to announce his conclusion.
    Mr. Dalyell: Will it be before Christmas?
    Mr. Buchan: I must advise my hon. Friend to wait with as much patience as he can muster.
    Mr. Gordon Campbell: As the report was presented more than three years ago, are the Government already treating it as an archive, or are they giving it proper consideration?
    Mr. Buchan: Of course we are giving it proper consideration. I repeat the advice I gave to my hon. Friend to the hon. Member, some of whose colleagues were not quite so quick on the equivalent Bledisloe Report. which came out before this report.

    Departmental Land
    Mr. Dalyellasked the Secretary of State for Scotland whether he will make a survey of lands in the possession of the Scottish Home and Health Department, the Scottish Education Department and other departments of the Scottish Office, with a view to making a better economic use or sale of potential building land for which he is responsible, and which is currently underdeveloped.
    Dr. Dickson Mabon: The land holdings of my right hon. Friend's Departments are kept under regular review.
    Mr. Dalyell: Is my hon. Friend satisfied that the Scottish Office has sufficient incentive to disgorge surplus land?
    Dr. Mabon: My right hon. Friend the Secretary of State has written to my hon. Friend the Member for West Lothian (Mr. Dalyell) on this subject today.

North-West Atlantic Fisheries (Warsaw Convention)
Mr. W. H. K. Bakerasked the Secretary of State for Scotland if the Department of Agriculture and Fisheries for Scotland was represented at the recent Convention of the International Commission for the North-West Atlantic Fisheries held in Warsaw; and if he has received a copy of the proceedings.
Mr. Buchan: The Department was represented, and I am, of course, aware of the results of the meeting; but the Commission's report of the proceedings has not yet been received.
Mr. Baker: Is it not a fact that only one country voted against a ban on fishing salmon off Greenland? Will the hon. Gentleman make representations to the Foreign Secretary to bring all pressure to bear against that country to get it to ban as well as the rest of the signatories?
Mr. Buchan; All my relevant colleagues are well aware of the position which the hon. Member has outlined.
Mr. Maclennan: Will my hon. Friend say what action the Government propose to take to bring to the notice of the Danish Government the very strong feelings throughout Scotland, in particular, about their reluctance to adhere to the proposals put forward in Warsaw?
Mr. Buchan: I prefer not to answer that, but the problem is known, our attitude is known and we have made our attitude very forcibly known to all the Governments concerned.

Industrial Fishing
Mr. W. H. K. Bakerasked the Secretary of State for Scotland what plans he has for the assistance of the fishing industry to undertake industrial fishing; and if he will make a statement.
Mr. Buchan: The issistance given by way of white fish subsidy has already been extended to cover industrial fishing, and some landing restrictions have been eased. Further measures will depend on the result of investigations now in progress.
Mr. Baker: Would not further assistance in this connection help to ease our balance of payments problem in that more industrial fishing could be carried on?
Mr. Buchan: I am well aware of the importance of this matter and, as the hon. Gentleman knows, I have been giving a good deal of consideration to it. It was partly with the import saving aspect in mind that we have made the improvements we have done.
Mr. Stodart: Will the Under-Secretary undertake to treat this matter with more urgency that he has the Hunter Report? Is he aware that imports of fish meal amount to 86 per cent. of our total consumption and that there is great room for import saving here?
Mr. Buchan: I will certainly undertake to give it exactly the same urgency as I have given to the Hunter Report—that is, considerable urgency.

OVERSEAS REPRESENTATION (REPORT OF REVIEW COMMITTEE)
The Secretary of State for Foreign and Commonwealth Affairs (Mr. Michael Stewart): With your permission, Mr. Speaker, and that of the House, I should like to make a statement on the Report of the Review Committee on Overseas Representation, which has today been laid before the House.
The House will recall that last August I invited Sir Val Duncan, Sir Frank Roberts and Mr. Andrew Shonfield to report urgently on the means of obtaining the best value for money from our overseas representation, having regard to our foreign and defence policies and the economic situation and all that these imply for Britain's rôle in the world.
Their report is far-ranging and draws many important conclusions. These concern a wide variety of matters, from broad issues of policies and priorities to quite detailed points of management. Some of them concern questions which lie outside my direct responsibility. Some are very much in line with thoughts and practices which we ourselves had been developing; others—and I very much welcome this—are novel and suggest new departures in ways of handling the problems concerned.
While the Government warmly welcome the Committee's general approach, my colleagues and I feel that before we can give a specific endorsement to its conclusions, we need to go further into their probable consequences, their
612
implications for the standard and range of our services overseas, and their effect on foreign policy as a whole.
The publication of the report will give many persons inside and outside this House an opportunity to consider these issues. I do not think that it would be right for the Government to commit themselves too deeply before they have had the benefit of this opportunity. I have, therefore, initiated studies and consultations on the report. These include discussions with the appropriate staff associations.
At the same time, I should like to say that I very much welcome the tribute which the Committee has paid to the high standard of our overseas services, and particularly to the competence and adaptability of Her Majesty's Diplomatic Service.
I am sure that the House will join me in thanking Sir Val Duncan and his colleagues for devoting so much of their time to this important task, which they discharged speedily and thoroughly. They have produced a penetrating and objective survey, which has already had a valuable effect in stimulating our own consideration of these problems, and which will be an essential guide through the challenging years ahead.
Several Hon. Members rose—
Mr. Speaker: Order. I remind the House that we have a mass of important business ahead. There can be only a few questions, and brief ones.
Mr. Wood: I join the Secretary of State in his expression of gratitude to Sir Val Duncan and his colleagues. Am I right in assuming that it is their full report which has been laid before the House? Is the right hon. Gentleman aware that we shall need time to study the Committee's conclusions, as he suggested, because it is rather difficult from his statement to gather anything that might be in the report?
Although it is clearly right that we should re-examine the needs of our representation abroad, we shall obviously want to consider the particular proposals that are made in the report. Will the levels of any compensation necessary be sufficient to maintain morale in the Service which is obviously essential if, in the right hon. Gentleman's own words, "the high standard of our overseas services" is to be maintained?
Mr. Stewart: There is a sentence on the first page of the report which explains that the
"published version of the Report includes the full text as originally submitted with the exception only of certain specific references which it was agreed with the Committee should be omitted on security and similar grounds. These omissions are of small significance in the context of the Report as a whole…"
On the second and main point, I accept that my statement does not inform the House of everything that is in the report; nor, without unduly trespassing on the patience of the House, could it have done so. What I wanted to do in this statement was to explain our agreement with the report's general approach and the fact that before specific recommendations could be endorsed it was necessary for the Government to have opinions from people both inside and outside the House; and for that purpose we have been having consultations.
I am well aware that the question of redundancies is important. It is clear that, if we proceed on the general lines of the report, within measurable time the total size of the Diplomatic Service will be less than if there had been no such report. Indeed, as hon. Members will see when they study the report, this would involve substantial savings, but whether this means redundancies or whether it can be achieved by the ordinary process of retirement cannot be definitely stated at this stage. The question of compensation for redundancy is being considered as part of the current review of Civil Service superannuation.
Mr. Driberg: Would my right hon. Friend consider that the very fact of military withdrawal from east of Suez, which is fully supported on this side of the House, may itself make it more necessary that we should retain a strong diplomatic and what might be called a cultural presence in many countries throughout the world, not least in the Commonwealth?
Mr. Stewart: My hon. Friend will find that the central proposition of the report is this. First, that it is both possible and desirable to secure a reduction in the total membership of the Diplomatic Service. Secondly, that in deciding how that is to be done the criterion must always be the relevance of the mission in any
614
particular part of the world to the interests of Britain, regarding as our dominant interest at the present time the maintenance of our commercial interests and the improvement of our balance of payments. This is the general approach of the report, and I believe it to be a right one.
Mr. James Davidson: Does the Secretary of State agree that on the whole our missions abroad are somewhat lavishly staffed by comparison with comparable countries, such as West Germany and France? In view of the increased emphasis on commercial representation, what is the right hon. Gentleman's attitude to the seconding of personnel from the Foreign and Commonwealth Affairs Service to industry and vice versa?
Mr. Stewart: I do not think that the hon. Gentleman's suggestion about staffing can be borne out. I do not think that a reading of the report will support it.
We hope to arrange the type of exchange referred to by the hon. Gentleman and are considering what can be done about it.
Mr. Philip Noel-Baker: As one who has spent a good many years of his life in the Foreign Office, may I endorse the Foreign Secretary's tributes to the work of the Diplomatic Service in times gone by? Will he assure us that the House will have an opportunity of debating the report before the Government implement it?
Mr. Stewart: The question of a debate is not for me. I made my statement today, in effect, to invite study of and comment on the report, and I very much hope that in due time there will be opportunity for the House to consider it more fully.
Mr. Eldon Griffiths: Will the Foreign Secretary accept that many of us who have high regard for Sir Val Duncan nevertheless question some of the major premises in his report? In particular, will the right hon. Gentleman tell the House now whether the report says, among other things, that the Government are guilty of ambiguity of intention in their foreign and defence policies? Is this, perhaps, one of the reasons why his statement has been so unforthcoming today?
Mr. Stewart: No, Sir; it is now open to all hon. Members to read the report, and I do not think that they will reach the conclusion which the hon. Gentleman reaches.
Dr. John Dunwoody: Can my right hon. Friend comment on reports that the Duncan Committee suggested that the British Council should have a much larger and more significant rôle to play, particularly in cultural exchanges and information services?
Mr. Stewart: I do not want to be drawn into trying to give summaries of matters in a report which hon. Members will wish to read in detail. Several recommendations are made about the activities of the British Council which we shall wish to discuss with the Council.
Sir C. Mott-Radclyffe: Now that the Diplomatic Service has been subjected twice in five years to a major inquiry, the first being the Plowden Commission and the second being the Duncan Committee, and both those inquiries having rightly paid a warm tribute to the work of the Service, would it not now be the best thing to allow the Service to get on with its work quietly, without any further committees of inquiry in the offing?
Mr. Stewart: After this report, which hon. Members will realise, when they come to study it, is a very impressive piece of work, I can see no ground for further inquiry for some considerable time to come.
Mr. Luard: The Press has reported, and the Foreign Secretary has tended to confirm today, that the report recommends a concentration of our diplomatic effort in Europe and in North America. Although there may well be economies to be made by concentrating some diplomatic activity for more than one country in a single embassy, would it not be disastrous, especially as we are now withdrawing militarily from Asia and other parts of the world, as my hon. Friend the Member for Barking (Mr. Driberg) pointed out, if we were to neglect the importance of continents such as Africa, Asia and Latin America at present simply because our commercial interests are concentrated in North America and Europe?
Mr. Stewart: I am sure that it is not the intention of the report, and it
616
would certainly not be the Government's view, that one should neglect any area. I think that one may put it in this way. The report pictures a gradation from what it calls an area of concentration where there would be comprehensive missions, then places which would be outside areas of concentration but would still require comprehensive missions, then places which would require what are called selective missions but with some reinforcement, and then places which would have the minimum selective mission.
One's decision as to which kind of mission is required in any particular country cannot be rigid for all time; it must change as the pattern of world trade and power changes. But the decision one makes at any time ought to be related to the relevance of any particular post to British interests, and although among British interests one must put our commercial interests very high, this is not exclusive of the other matters mentioned by my hon. Friend.
Viscount Lambton: Does the right hon. Gentleman agree that the diplomatic downgrading of any country will cause offence and be likely to discourage increase of trade?
Mr. Stewart:I do not think so. I do not see why it should cause any offence if this or any country said that it proposed to arrange its diplomatic representation in a manner which gave the best deployment of the total number of people employed in proportion to the work which they had to do.
Sir G. de Freitas: If the principle of concentration on Europe and North America is accepted, will my right hon. Friend see that potential recruits to the Service at present in the universities realise that they will spend part of their career in the interesting and stimulating outer world and not merely in Washington, Brussels and London?
Mr. Stewart: I should always assume that anyone taking up a career in the Diplomatic Service would expect to serve in many different parts of the world, partly in what are called the areas of concentration and partly in those which lie outside.
Sir K. Joseph: Is it not odd that there is no representative of the Board of Trade

617
here this afternoon? The President of the Board of Trade rejected only a month ago any idea of the reorganisation, which many people have suggested is necessary, of the export promotion services of the Government and industry. Does that rejection still stand in the light of the Duncan Report?
Mr. Stewart: In the light of the Duncan Report, there will obviously have to be consultations between my right hon. Friend the President of the Board of Trade and myself.
Several Hon. Members rose—
Mr. Speaker: Order. I must protect the business of the House.

"SUN" NEWSPAPER
Mr. Murray: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the announcement by the International Printing Corporation of the proposed closure on 1st January. 1970, of the Sun newspaper".
[Laughter.] I am sorry that any right hon. or hon. Members should laugh at the prospect of our losing another national newspaper, whatever their political views. Perhaps I ought to declare my interest as a member of the Society of Graphical and Allied Trades, the largest printing union. In case any other hon. Members laugh, I add that I am not a sponsored union member.
During the last few years, we have seen the disappearance of a large number of national—
Mr. Speaker: Order. We are not debating the subject which we shall debate if the hon. Gentleman is given leave under Standing Order No. 9. He must address himself to the reasons for his request under the Standing Order.
Mr. Murray: They are based, Mr. Speaker, on the immediate prospect that, w thin 100 days, which makes the matter urgent, we are to lose a national newspaper with a circulation of 1 million and employing about 2,000 people of many
618
unions, including my own, the National Union of Journalists, and at least six or seven of the other national unions covering the printing industry. Again, to bring in a point showing urgency, the proposed closure of the Sun means that before long, if the House of Commons does not take some responsibility in the matter, our national newspapers will be governed by only two large newspaper empires, depriving the people of the diversity which they have come to expect from their national Press.
The Royal Commission on the Press and the Economist Intelligence Unit pointed out the dangers inherent in a very small Press. On those grounds, I urge acceptance of my request for an Adjournment debate under Standing Order No. 9.
Mr. Speaker: I learned at Question Time that the hon. Gentleman the Member for Gravesend (Mr. Murray) proposed to ask for an Adjournment debate under Standing Order No. 9. The hon. Gentleman asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
"the announcement by the International Printing Corporation of the proposed closure on 1st January, 1970, of the Sun newspaper".
As the House knows, under the revised Standing Order Mr. Speaker is directed to take into account the several factors set out in the Order, but to give no reason for his decision.
I have given careful consideration to the representation which the hon. Gentleman has made, but I have to rule that his submission does not fall within the provisions of the revised Standing Order, and I cannot, therefore, submit his application to the House.

SCOTTISH AFFAIRS
Ordered, That the matter of Arts and Amenities in Scotland, being a matter relating exclusively to Scotland, be referred to the Scottish Grand Committee for their consideration.—[Mr. Peart.]

NATIONAL INSURANCE ACT 1965 (AMENDMENT)
3.50 p.m.
Mr. Gwilym Roberts (Bedfordshire, South): I beg to move,
That leave be given to bring in a Bill to amend the National Insurance Act, 1965, by reducing the pensionable age for men to sixty.
My proposed Bill has one simple provision, to reduce the pensionable age of men to 60 and thus remove an anomaly which has been with us for about 30 years. Right hon. and hon. Gentlemen on both sides would wish to make the pension ages of men and women the same, although perhaps not all would agree with the age I have chosen. Some might feel that a common pensionable age of 65, or even 70, would be more appropriate. But I believe that the majority of hon. Members feel that the anomaly which has been with us since 1940 should be removed.
It is unfortunate that I am seeking to introduce a Bill of this kind at this late period of the year. The reason is that, like many other hon. Members, I had believed that when we saw the Government's White Paper we would find that in looking ahead to the later years of this century the Government were thinking in terms of equalising the pension ages. I was horrified to find that we are still sticking to the same pattern of 60 for women and 65 for men.
The argument in the Appendix to the White Paper, at page 54, is that most men reaching the age of 65 are married, and that, on average, their wives are about three years younger than they are. But that argument in favour of keeping the present discrepancy between men and women is actuarial nonsense. It may be true that at present there is a three-year gap on average between a man retiring at 65 and his wife. But in married couples below the age of 30 the gap has almost disappeared, and it is becoming narrower as the years go by.
There are many countries where the age of retirement for both men and women is already much lower than it is here. I shall not bore the House by listing them all, but in France, Italy, the Soviet Union, Hungary and many other countries, for example, the pension age is 60, and in Yugoslavia it is 55.
620
We should make the change I propose because there is no actuarial, commonsense reason for the present gap. Even if both men and women retired at 65, women could expect on average to enjoy a retirement pension for four years longer than men. The tragic situation at present is that when a woman retires at 60 she can expect to live for 19½ years, whereas a man who reaches 65 and retires can expect to live for only about 12 years. This means that a man can expect to draw only £3,200 in pension during his retirement, whereas a woman can expect to receive £5,100. Therefore, the present situation makes no sense from the point of view of sexual equality.
I now turn to some of the other arguments for such a change. As I have said, some hon. Members might agree that there is a case for equality, but feel that the equality should be at a higher pension age. Some might feel that 70 or 65 would be a more appropriate common age. Although the short-term tendency is for people to work longer, I believe that in view of the nature of technological change it is wrong for us to plan for a society where people tend to work longer weeks or to have longer working lives. My party was put in power to make people's working conditions better and make life easier, and we have done so to some extent. We should accept the technological argument and look forward to a lower pensionable age for men.
There is no suggestion here that men must retire at 60; the suggestion is merely that they could do so on a pension at that age if they wished. Some of my right hon. and hon. Friends are very young at 80, whereas some of us are old at 40.
Associated with the Bill is a great humanitarian argument for allowing earlier retirement. There are many occupations in which people are forced to retire in their sixties because of the pressures of very hard work. The statistics of retirement in the 1961 census showed that of 128,000 men who had already retired only 41,000 were under 60. The suggestion is that the great majority of men were retiring in their sixties, owing to ill-health, even if they did not then qualify for a pension.
I have had hundreds of letters from men all over the country who feel that

621
they can no longer continue to work after 60. I have received about 2,000 letters on the Bill, not only from men in that age group but from many trade unions and from young people. Some of us who are cynical about young people should reflect on the number of them who have written to me expressing concern that men should have to wait until 65 to retire.
The only argument against the Bill is that of cost. My right hon. Friend the Secretary of State for Social Services has estimated that it would cost £450 million if the present pattern of retirement were maintained. But that does not allow for reductions in medical costs or for a possible change in the retirement pattern. It is all a question of priorities. The present Government have already—
Mr. Speaker: Order. May I remind the hon. Gentleman that he is introducing the Bill under the Ten Minute Rule.
Mr. Roberts: As many of my hon. Friends would agree, the Government have already taken steps to allocate more resources for social security, but here is another direction in which they should move in the not too distant future.
It may be that my right hon. Friend does not feel that he has the money or resources to accept this proposition this year or next, but I appeal to him to ensure, in a White Paper or in any proposals looking towards the end of the century, that this anomaly, this gross discrimination between the sexes should not remain with us.
Question put and agreed to.
Bill ordered to be brought in by Mr. Gwilym Roberts, Mrs. Joyce Butler, Dr. Shirley Summerskill, Mr. Frank Allaun, Mr. Norman Atkinson, Mr. Albert Booth, Mr. Alec Jones, Mr. Brian Parkyn, Mr. Stanley Orme, and Mrs. Renée Short.

NATIONAL INSURANCE ACT 1965 (AMENDMENT)
Bill to amend the National Insurance Act, 1965, by reducing the pensionable age for men to sixty, presented accordingly, and read the First time; to be read a Second time Tomorrow and to be printed. [Bill 196.]
ORDERS OF THE DAY

  FINANCE BILL
  As amended (in the Committee and in the Standing Committee), further considered.
  Mr. Speaker: There are one or two slight modifications in the selection list I have had published today. I take this opportunity of commending not so much those who help me in the formidable task of selecting Amendments for the Finance Bill, as those who type and duplicate the lists in order to serve the convenience of right hon. and hon. Members. It is not an easy task, to be done in a hurry. It was a little late yesterday for obvious reasons. I think that the list has been got out all right today.
  I do not know whether I need call attention to the changes, but on page 6826, Amendment No. 89, standing in the name of the hon. Member for Birmingham, Northfield (Mr. Chapman), in page 73, line 30, at end insert:
  Importation of aromatic bitters shall be exempt from spirit duties. For the purposes of this Schedule, 'aromatic bitters' means bitters, aromatic, containing 44 to 49 per cent. alcohol, and 1·5 to 6 per cent. by weight of gentian, spices and other ingredients, 4 to 10 per cent. by weight of sugar, and packed in containers of capacity less or equal to 0·5 litres.
  is selected, while Amendment No. 300, standing in the name of the hon. Member for South Angus (Mr. BruceGardyne), in page 77, line 40, at end insert:
  (cc) after the word 'asbestos' in subparagraph (i) shall be inserted the words 'or polyolefin'; and after the word 'fabrics' shall be inserted the words 'and fabrics which consist wholly of blends or mixtures of jute, felt, glass fibre, asbestos or polyolefin'.
  is not selected.
  On page 6837, Amendment No. 312, standing in the name of the right hon. Member for Thirsk and Malton (Mr. Turton), in page 15, line 7, leave out '£425 and £680' and insert '£440 and £700', is not selected.
  On page 6843, Amendment No. 238, standing in the name of the hon. Member for Windsor (Sir C. Mott-Radclyffe), in page 21, line 43, at end insert:
  'or

  (d) in carrying out any works for which a grant has been, or will be, given on the advice of the appropriate Historic Buildings Council'.

  is selected.

  623
  On page 6856, Amendment No. 311, standing in the name of the right hon. Member for Enfield, West (Mr. Iain Macleod), in page 126, line 9, at end insert:
  12. Paragraph 1 of Schedule 61 to the Finance Act, 1965, shall be amended by inserting at the end of sub-paragraph (1)(d)(iv) the following proviso:—
  'Provided that for the purpose of this sub-paragraph (iv) a company resident in the United Kingdom, the whole of whose share capital is owned by another company resident in the United Kingdom, shall not be regarded as a subsidiary'.
  is not selected. These are the only new features of today's list.

New Clause 13

  SEVERELY DISABLED PERSONS
  The Minister of Transport may by regulations made by Statutory Instrument provide that, in such cases and subject to such conditions as may be prescribed by the regulations, a mechanically-propelled vehicle shall not be chargeable with any duty under the Vehicles (Excise) Act, 1949, by reason of any use made of it for the purpose of conveying a severely disabled person, where the vehicle in question has been specifically and extensively adapted for conveying such a person and where the nature of that person's disability is such as to preclude him from making use of an invalid carriage to which otherwise he would be entitled.—[Mr. Maurice Macmillan.]
  Brought up, and read the First time.
  4.2 p.m.
  Mr. Maurice Macmillan: I beg to move, That the Clause be read a Second time.
  I understand that we are considering, at the same time, new Clause 22—Vehicles belonging to disabled persons—standing in the name of my hon. Friend the Member for Birmingham, Edgbaston (Mrs. Knight):
  A person who is so disabled that his vehicle must be fitted with hand controls shall qualify for exemption under section 11 of the Finance Act, 1964;
  and new Clause 32—Extension of tax relief for the blind to other seriously disabled persons—standing in the name of my hon. Friend the Member for Liverpool, Garston (Mr. Fortescue):
  Section 9 of the Finance Act, 1962, as amended by section 10 of the Finance Act, 1965 (Relief for blind persons) shall also apply to any other substantially disabled person, which means a person who is deaf, dumb or
  624
  otherwise substantially handicapped by loss of physical or mental faculty provided that person requires constant attendance by reason of the loss of physical or mental faculty.
  I hope that the House will acquit me of discourtesy if I leave after a short while to attend another committee meeting which our late start has caused to clash with discussion of new Clause 13. The objective of the Clause is to grant road tax exemption to certain rather limited classes of severely disabled persons and to lessen the burden on such persons, many of whom are now totally immobile because of the difficulties with which they are especially faced.
  The people to whom this applies are those whose mobility is dependent on travelling as passengers in private transport. We are, therefore, concerned here with a relatively small number of people and the cost is likely to be very small. The wording of the new Clause would strictly limit the number of persons to whom it could be applied for two reasons. The first is for ease of administration and definition and the second is to make it clear that there can be no increase to potential costs through abuse, through creating precedents, or through any form of escalation.
  The limitation is twofold. We ask this concession only for people who fulfil two conditions. The first is that they are so severely disabled as to be unable to use an invalid carriage to which they would otherwise be entitled. This means that, by definition, they cannot use public transport. The second condition is that the vehicle for which we are seeking road tax exemption, in which they are to travel as passengers, shall be so adapted for disabled persons as to be completely identifiable. This means that it has to have a hoist for a wheelchair or other form of extensive alteration which is already a criterion.
  We seek this exemption because, among all those who have the misfortune to be physically or mentally disabled, these are people for whom nothing has as yet been done to help or encourage or enable them to leave their own homes. They are not a large group. It is estimated that between 1,000 and 1,250 would be directly affected by the Clause. The estimated cost is between £25,000 and £30,000 in a year. But the concession would give a great deal of benefit and

  625
  remove a serious anomaly, because these people cannot use any form of public transport, such as a ship, train or aircraft, without first having to use private transport to get there from their homes, and they are by definition unable to use an invalid carriage. They are equally obviously unable to use a bus, tube or any other kind of local public transport. They are, therefore, dependent entirely on their own resources as passengers.
  Secondly, they are the only people among the disabled who get no help for any form of outdoor mobility—the others getting help with the servicing of invalid cars, and so on. The new Clause would only partly reduce the anomaly—an anomaly whereby the State gives help to the disabled man to get himself out of doors if he can drive an invalid carriage himself, but not to those more severely disabled who cannot drive themselves.
  This is a ludicrous anomaly in some ways and one which could be eliminated without very much increase in cost to the State. The costs to the individual are now very high. With purchase tax at over 36 per cent. on vehicles, 4s. 6d. tax on petrol and the road fund tax at £25 it is possible for a disabled person in this sort of category to be paying in tax now between £100 and £110 a year to remain mobile. We are asking that part of the costs—the vehicle licence duty—should be removed from them.
  What about the cost of such concessions? The Joint Committee on the Mobility of the Disabled has made an elaborate calculation indicating that the persons who would be affected by the limited concessions sought in new Clause 13 would number between 1,000 and 1,250. I will not weary the Committee with all the details of these calculations, which seem to have been done with scrupulosity and conservatism as to the numbers. It is true that, if the provisions of the other Clauses we are debating with new Clause 13 were accepted and a more generous definition agreed to, the numbers might rise to between 1,750 people and 2,500. But even this will not be crippling.
  The actual cost, on the same figures as those of the Joint Committee on Mobility for the Disabled, is not more than in new Clause No. 13 alone, between £25,000 and £30,000 a year, which, if the pro-
  626
  visions were extended in the more generous way presupposed in other new Clauses, might rise to between £60,000 and £65,000. The cost is somewhere between £25,000 for what we seek in new Clause No. 13, to a possible £65,000 if it were extended more widely, and this is not a very large concession.
  The disabled passengers for whom we are seeking this exemption are not difficult to identify. The same procedure could be applied as is applied to invalid tricycles. The disabled passengers could satisfy the conditions which they now have to satisfy, and administratively it is not difficult to identify the individuals concerned.
  If the concession is, as we suggest, limited to specially and conspicuously adapted vehicles, those, for example, fitted with car top hoists or van conversions enabling a disabled person to enter the vehicle while still in a wheelchair, there is no chance of abuse, as the vehicle is easily recognised. It is even easier than most such concessions to police, since only two or three firms in the country are capable of undertaking such conversions. So there are no difficulties either in identifying those who are entitled to the concession or in policing the vehicles.
  Purchase tax exemption on van conversions is already granted if the vehicle has been adapted to such an extent that it can in effect be regarded as an ambulance. No abuse has arisen of this concession and I do not think that there would be any abuse of the concession which we are seeking.
  The Chancellor, in. Government Amendment No. 25, is seeking to exempt from vehicle duty cars which are bought by non-residents and which can be used for up to 12 months before being exported. If the Chancellor is saying that those who are exporting cars and who are using them in the period between buying them and sending them overseas can be excused vehicle licence duty, how much stronger is the case of this small number of disabled people to whom a car is not a luxury but the only method by which they can ever see beyond the four walls of their room and the confines of their house and garden.
  Those people, of all people, are in a difficult situation. They cannot go out alone. The mere fact that they require

  627
  constant attendance could be another way of policing this. It could be a condition of road tax exemption that the vehicle is insured for one driver only and that driver a full-time attendant of the disabled person.
  I see no reason why the Government should not accept the Amendment. I hope that the Financial Secretary will tell us that this is what he intends to do. He will be creating no precedent, and he will be helping a small number of people who are badly in need of help. He will be acting in a merciful, compassionate way at no cost to himself, the Government or the future. If he shows himself markedly reluctant, I shall ask the House to take this matter to a vote.
  Mr. Speaker: I would remind the House that we have a massive amount of work ahead of us, many debates, and reasonably brief speeches will help.
  4.15 p.m.
  Mr. Arthur Lewis: I wish to support the new Clause. I agree with the hon. Member for Farnham (Mr. Maurice Macmillan) that there is no reason why the Chancellor of the Exchequer should refuse to accept it. The cost is negligible and could easily be recouped if action were taken to see that those who should pay road tax do so.
  It is high time that assistance was given to disabled persons. I am amazed at how the authorities work. A man earning thousands of pounds a year who ignores the law and never pays his tax or his insurance gets away with it. The wide boys and the wise boys have now been told. "Don't trouble to pay; no one will do anything about it." It may take more than 18 months to bring an offender to court, he has to pay a nominal fine of less than the amount he has saved by dodging, and after being fined two or three times he will refuse to pay and the authorities are hack where they started.
  If the Financial Secretary cannot see his way to give this concession, my advice to the war disabled and other disabled persons is to refuse to pay. They should follow the hundreds of thousands of ordinary motorists who are not paying. Eventually, after 18 months, they may be summonsed and have to pay a nominal fine of £10. If they refuse to pay that,
  628
  after two or three attempts the courts and the police will just give up.
  I do not think that that is the best way of doing it. The best way is to do it honourably and straightforwardly. Disabled people have what is called a yellow disabled certificate which is attached to the vehicle. Many are war disabled ex-Service men and women and they can get from the Ministry of Social Security a disc showing that the vehicle belongs to a war disabled person. There would, therefore, be no difficulty in applying this concession.
  The cost would be infinitesimal. The Treasury would lose nothing in revenue and I hope, therefore, that the Financial Secretary will accept the new Clause. If he does not do so, I may consider voting with the Opposition.
  Mr. Tim Fortescue: I rise to support the new Clause so eloquently moved by my hon. Friend the Member for Farnham (Mr. Maurice Macmillan) and to speak to new Clause No. 32, which provides for the extension of tax relief for the blind to other seriously disabled persons.
  There is a considerable history to this. The Radcliffe Commission, 15 years ago, in 1954, recommended that a tax concession for blind and disabled persons should be introduced. This was proposed in this House in 1956, 1958, 1959, 1960 and 1961. Finally, in 1962, although the then Chief Secretary to the Treasury, now Lork Brooke of Cumnor, adamantly refused in Committee to concede anything to those on both sides who were advocating this concession, unfortunately for him but fortunately for the blind, my hon. Friend the Member for Plymouth, Devonport (Dame Joan Vickers) worked her feminine wiles on him during the brief period between Committee and Report and, on Report, he announced to the House, amid loud cheers, that, after all, he was willing to give this concession. He had given innumerable reasons during Report stage why it would be impossible to do it, but as a result of one visit from one determined hon. feminine Member he was able to change his mind.
  The concession referred only to the blind. It was a figure of £100 a year which had been recommended in 1954 by the Radcliffe Commission and was

  629
  not introduced until 1962, by which time the £100 undoubtedly was worth less. The figure is still £100 in 1969; it has not been changed. The recommendation of the Commission has obviously been devalued. That concession to the blind appears in Section 9 of the Finance Act, 1962, and it has been slightly amended, though not significantly, by Section 10 of the Finance Act 1965.
  In the debate in 1962 in which the Chief Secretary to the Treasury announced this concession, he said:
  "As I said in Committee and as my right hon and learned Friend"—
  that was the right hon. Member for Wirrall (Mr. Selwyn Lloyd) who was then Chancellor—
  "would confirm, it is and continues to be his view that the right way to deal with this problem, this tragedy of disability, is not by tax relief but by direct social benefits. We have an extensive system of those benefits in this country now."—[OFFICIAL REPORT, 2nd July, 1962, Vol. 662, c. 228.]
  But in the Third Reading Debate the right hon. Member for Sowerby (Mr. Houghton), who was then, of course, in opposition, said:
  "I do not share the view that has been so frequently expressed by Ministers on this matter, that the proper way to deal with grave affliction is through the social services and not through tax reliefs.… I hope that in due course the Government—any Government—wilt accept the broad principle put forward by the Royal Commission that grave affliction can so alter the pattern of a person's life that it is proper that tax relief should be given to meet exceptional conditions."—[OFFICIAL REPORT, 6th July, 1962, Vol. 662, c. 886.]
  Since that time the right hon. Member for Sowerby has had an opportunity to put into effect, or to persuade the Cabinet to put into effect, the principles he announced in the debate. But we are still without any tax relief for any category of disabled except the blind.
  Every year since 1962, from the back benches on both sides of the House, the effort has been made to extend the principle of tax relief for the blind to other severely disabled people, but completely without success. I myself have tried on two occasions and many others better qualified than I.
  Now at last, and all credit to the Government, we have a slight change in the situation. In the White Paper Command 3883, "National Superannuation and Social Insurance", issued by the Secre-
  630
  tary of State for Social Services in January this year, the Government said that they recognised the needs of the chronic sick and disabled and intended in the new Social Security Bill, which they are to introduce with effect from April 1972, to introduce a constant attendance allowance for those in need of it. Both sides of the House will welcome this proposal, although possibly will not agree with many of the other proposals in the White Paper.
  The last sentence in paragraph 91 says
  "The Government Social Survey as at present conducting a nationwide survey of the chronic sick and disabled…This is designed, among other things, to establish the facts which are needed before decisions are taken on the precise details of the new allowance."
  Succeeding Chancellors, Chief Secretaries and Financial Secretaries of the Treasury have said that this tax allowance for the blind cannot be extended to other categories of disabled people because of the difficulty of assessing the disability and also the difficulty of identifying the people. Now that the survey is being undertaken this difficulty will to a large extent disappear.
  In Committee upstairs on 3rd July, the Minister of State, Department of Health and Social Security, was being pressed to introduce a constant attendance allowance earlier than April, 1972, since the April, 1972, date for the rest of the White Paper is conditional on the demands of P.A.Y.E. whereas their allowance need not be paid through P.A.Y.E. at all. He resisted that demand and the Amendments moved by the Opposition were voted down. But he then said of the new scheme:
  "We shall have it before us in legislative form in the autumn…There will be a further statement before we come to the autumn which will give a little more information about our intentions not only for an attendance allowance, but for long-term sickness benefits."—[OFFICIAL REPORT, Standing Committee E, 3rd July, 1969; c. 113.]
  We have not yet had that Statement. We have not long to go now before we go away for the Summer Recess and I wonder whether the Financial Secretary today could say when that statement will be made. The system of drawing up a register of severely disabled must be far advanced.
  What I am proposing in the new Clause is that tax relief for severely disabled should be introduced on the lines of tax

  631
  relief to the blind in this financial year. This would mean that the assessment of that tax relief would not be undertaken until after 5th April next year. The income on which the tax relief would be granted would be obtained in this financial year, but under our tax system it would not be assessed until after 5th April, 1970. By that time the survey will have been completed and a register of disabled will either have been completed, or will be well under way. There should be no reason at all why this Clause should not be approved by the Government since by that time the condition making possible such tax relief for the disabled will exist, as the register will exist. There should be no difficulty in the Financial Secretary's conceding this new Clause to us. It is backed, I am sure. by hon. Members on both sides of the House. He will readily agree that it is a necessary and logical extension of what we already do for the blind. I very much hope that he will be able to agree to it. We all know the effect of constant dripping on a stone. I very much hope that it will have the same effect on a "Diamond".
  Mr. Hugh Fraser: I am sure that the whole House hopes that the Government will be able to accept this group of Clauses. There are two further Clauses which relate to the spastics.
  The House will be aware that recently the Spastics Society suffered a grievous loss in taxation relief amounting to a large sum of money. Many right hon. and hon. Members of the House who are associated with this and other movements realise the growing need of these people, who cannot be looked after in the normal way by the State, who fall outside the National Health Service and who are in the greatest possible need of assistance both in the way of tax rebate and of assistance from their friends and various societies who look after them.
  The concessions have been adumbrated by my hon. Friends on the Conservative Front Bench on the new Clause in regard to the blind, in which category people involved can easily be identified. The sums involved in this matter are trivial in a country as large and as rich as ours. Surely the right hon. Gentleman the Financial Secretary, whose return to the
  632
  Front Bench we all welcome, will be able to make this concession.
  The amount of pleasure and real joy these concessions would give to some needy people is quite incommensurate with the small sum of money involved. I hope that the Government will be able to accept the new Clauses.
  4.30 p.m.
  Mrs. Jill Knight: I rise to move new Clause 22, and—
  Mr. Speaker: Order. The hon. Lady cannot move the Clause, but she can discuss it.
  Mrs. Knight: Then perhaps I might do that and, at the same time, associate myself with all that has been said in this debate.
  The case which prompted me to table the Clause arises from an incident concerning a constituent of mine. He went off to war as a young, healthy able-bodied man. Fighting in the Western Desert, he lost both legs. He returned to Birmingham and learnt to walk on artificial legs. Today, he manages them very well. However, because he has artificial legs he is not allowed to drive a car unless it is fitted with hand controls. He does not ask for any help towards the provision of the vehicle. He is perfectly happy to provide his own, but he feels rather sore when the time comes to change his car, because the cost of conversion to hand controls must be borne by him, and the cost is about £25.
  My Clause is the latest instalment in a long running fight over this case. I am sure that hon. Members on both sides recognise that my constituent has reason to feel aggrieved at getting no help of this kind because of his injury.
  Recently, he applied for exemption from payment of the excise duty. He received a letter dated 17th February, 1969, from the Department of Health and Social Security, in which it was explained to him that
  "For a disabled person to qualify for exemption under Section 2 of the Finance Act, 1964, two conditions have to be fulfilled; namely, that the applicant not only qualifies in one of the groups of disabled eligible for one of our vehicles, but also that his vehicle has had special controls fitted because he is unable to drive with standard controls."

  633
  The letter went on to tell him:
  "The report of your recent medical examination indicates that you are able to walk moderate distances and that you do not qualify in any of these categories."
  However many yards or even miles my constituent is able to walk, the Ministry of Transport says that it will not permit him to drive a car unless his vehicle is fitted with a hand accelerator and non-slip foot pedals. In other words, the Ministry of Transport will not accept that my constituent is safe to drive because of his two artificial legs unless he has proper controls. The Ministry of Health and Social Security, on the other hand, rules that because he is able to walk a little way, he does not qualify. He appears to fall between two stools.
  My right hon. Friend the Member for Stafford and Stone (Mr. Hugh Fraser), a moment or two ago, referred to the disabled being able to enjoy their motoring. My constituent's case is a matter of justice, not of enjoyment. He lost his legs in the war, and he asks for very little help. But, as a matter of principle, it seems to me that if the Ministry of Transport says that his car must be fitted with hand controls before he can drive it, that should be the criterion upon which to judge his case.
  I hope that my Clause will receive sympathetic consideration from the Financial Secretary. I have tried to be brief in my remarks about the case, but it is a strong one and I hope that it will be accepted.
  Mr. Evelyn King: The case referred to by my hon. Friend the Member for Birmingham, Edgbaston (Mrs. Knight) points to what anyone who has familiarised himself with these matters knows full well. The degree of variation in the reliefs for the disabled bristles with anomalies. I do not suggest that it is the fault of any of the present occupants of the Treasury Bench, since the situation has been with us for years. However, we are due for a massive overhaul of the whole system.
  I want to touch briefly on the points which were moderately and at times movingly put by my hon. Friend the Member for Farnham (Mr. Maurice Macmillan). Within the context of transport, there is the peculiar fact that the less the degree of disablement, the less the benefit. If a disabled man merely has lost the use of his legs, the State pro-
  634
  vides him with a motor vehicle and treats him generously. If a disabled person is unfortunate enough to lose the use of his legs and his arms, the State does nothing. That is an anomaly which demands urgent attention.
  It was my right hon. Friend the Member for Barnet (Mr. Maudling) who, some years ago, first exempted from taxation motor vehicles used by the disabled. In that connection, it might be relevant to relate the figures quoted by my hon. Friend the Member for Farnham to the total. There are about 27,000 disabled persons who are assisted by the State in relation to their vehicles and at a cost of about £.2¾ million. I am sure that the Financial Secretary will correct me if I am wrong, but that was the figure about a year ago. A person who is disabled to the point at which he can drive gets, on average, a cash benefit of £130 a year. That is a fairly substantial benefit. The unfortunate person who is so disabled that he cannot drive gets nothing. That is an anomaly which should be dealt with urgently.
  I have a vivid memory of a constituent of mine who wrote to me a few months ago asking me to go to see him as he could not come to see me. He did not say what his trouble was. It is not always easy to comply with such a request in a rural constituency, but I managed to get to see hire one evening. He was a fit man aged about 50. He asked me in, and told me that he wanted me to meet his wife. He brought into the room in his arms a woman who was china-white, like a doll.
  My constituent was unable to perform any normal human function. He put her gently into a chair. Then he asked me a simple question, "If a fit unemployed man of 25 is out of work for a few weeks, he receives as of right a fairly generous allowance from the State. Why is it that woman like this who is totally disabled receives nothing as of right?"
  No doubt this Clause cannot deal adequately with that sort of case, but I think that it is reasonable to ask the Financial Secretary to consider the figures which I have given him. The Government spend £2¾ million on the less disabled. All that we ask is that about £65,000 should be added to it to help in some small measure those who have far greater disabilities. Anyone who has seen such cases cannot help feeling

  635
  sympathetic. I hope that the right hon. Gentleman will be able to express that sympathy in practical terms.
  Mr. John Astor: I should like briefly, but most sincerely, to support my hon. Friends on these three new Clauses. I realise that there are many wider reaching problems of disablement about which the Government are concerned and I hope that they will bring forward some solutions, but I hope that this will not stop them accepting the new Clauses, which are deliberately restricted in the scope of the number of people whom they will benefit. They are aimed to bring a little happiness and make life easier for the most severely disabled.
  On new Clause 13, as my hon. Friend the Member for Farnham (Mr. Maurice Macmillan) pointed out, the people who would benefit will never be able to drive cars. Nor will they ever be able to use public transport or an ordinary private car. They can only be hoisted into a specially adapted vehicle.
  I had a recent case in my constituency about which I have corresponded with the Financial Secretary. It concerns a young man who was involved in a severe road accident as a result of which he was completely paralysed in both legs and he has no movement left in his hands. He had formerly belonged to a local motor car club and his colleagues rallied round to meet the cost of adapting a special vehicle for him. They were very dismayed when they found that they would be liable to pay the vehicle excise duty.
  The Financial Secretary, with his usual courtesy, wrote to me expressing the Government's anxiety and sympathy to do all that they could to help disabled people to live as near normal lives as possible, but pointing out the difficulties, the main one being that they were frightened that any concession, however limited, might lead to greater pressure of demand for an extension of this type of concession. However, he ended his letter on a more hopeful note:
  "Despite these difficulties, you may, however, assure your constituents that the type of case about which he writes is known to us and will continue to be kept under review."
  I hope that the Financial Secretary will take the opportunity afforded by the introduction of this Clause to review his earlier decision and that we shall get a
  636
  sympathetic answer at the conclusion of the debate.
  I turn now to new Clause 32, which concerns extension of tax relief for the blind to other categories of disablement. We all recognise the tragedy and consequences of blindness, but there are other forms of disablement which have at least as great an element of tragedy and often an even greater element of physical handicap and restriction which make it more difficult for some of these unfortunate people to find useful employment.
  Certainly, some of these severely disabled people, if they are able to live at home, are involved in additional expenditure at least as great as that which could be involved in blindness. For instance, the expenses of people who depend on an artificial lung with mechanical breathing apparatus, and those who must have an attendant to look after their every need—special diets, extra warmth, and so on—all add up and it seems reasonable that we should do all that we can to help them, especially so that they can continue to live in their own homes.
  Often one tragedy is that the family can struggle to keep a disabled person living in the home in family surroundings, but, due to the financial strain, they are not able to carry on. In that event the disabled person goes into a hospital and occupies a hospital bed which is not necessary from a medical point of view. That is a great cost to the nation and to the Health Service.
  It may be argued that this Clause would only be of benefit to people who have a taxable income on which to receive relief. This may be true, but surely, in these cases, all that the Government would be doing would be allowing these people to retain a little more of their own money with which to meet the expenses forced upon them by no wish of their own. It seems perfectly reasonable that this Clause should be accepted.
  I should like to see the benefit extended to other people who would not benefit by the Clause, but this would at least be a first step. I hope that the Government will take it.
  Sir Douglas Glover: I always think, after many years in this House, that one of the most moving periods is when we are dealing with the

  637
  Finance Bill and back benchers bring forward new Clauses and Amendments dealing with disabled people. The House at that time is always at its best and the Front Bench, through no fault of its own, is always at its worst. In reverse, it is rather like the boy in Holland who had his finger in the dyke. The Government are terrified of taking their finger out because they think that, as a result, there will be an absolute flood. In a society like ours, the fears of Ministers about opening up the floodgates to deal with some of these tragic cases which are raised every year are excessive.
  4.45 p.m.
  My hon. Friend the Member for Newbury (Mr. Astor) spoke movingly on new Clause 32. He said that when the presure on a disabled person's family becomes such that eventually that disabled person has to be hospitalised, the cost to the State is probably far greater than the cost of providing additional tax relief or additional facilities, such as a motor vehicle, which would take the burden off that disabled person's family and enable them to continue to give him the love and personal attention in their home that cannot be obtained to the same extent elsewhere. The net cost to the State would probably be less than it is now because the Government take this difficult and hard line. They are frightened of opening the floodgates by accepting new Clauses on the Finance Bill each year dealing with the severely disabled.
  I think that the whole House must be moved and seized of the absurdity of the situation which is drawn to our attention in new Clause 13. It appears that the State is generous to a person who is half disabled but absolutely flint-hearted if someone is completely disabled. Yet, a completely disabled person puts a far greater burden and strain on the emotions of a family unit. Therefore, the severely disabled should receive the maximum help. I hope that the Financial Secretary will find it possible to accept new Clause 13, because the cost can only be comparatively small.
  I now turn to new Clause 32, which seeks to give tax relief to seriously disabled people, apart from the blind. I should like to call the attention of the House to the difference in the attitude of the public to different kinds of disablement. The blind receive a good deal of
  638
  help from the public because it is easy to see that a person is blind. However, people who are stone deaf or dumb may suffer just as great a disability in the carrying on of their normal lives. However because their disabilities are not apparent to the public as they walk through the streets, appeals for funds for people suffering from those disabilities never receive that same response as appeals for the blind or the physically disabled—people with no legs, and so on. The deaf and dumb are not likely to get the same amount of charitable help which is given to the spastics and other people whose disabilities can be seen by the public.
  Therefore tax relief, allowances and help is even more important for those cases than for those whose disabilities can be seen at a glance by the general public, whose emotions and sympathies are automatically aroused because they can see the problems confronting such people. I hope, therefore, that the Financial Secretary will accept new Clause 32. If it applies to the blind, I suggest that it should apply to people whose disabilities can be very much worse.
  I suppose that all of us from time to time have thought of what would happen if we were disabled. Our first reaction is to be terrified of going blind. But, having met a good number of blind and other disabled people, I am not at all certain whether I would not sooner be blind than deaf or dumb. At least, a blind person can communicate and can hear music. He is not nearly as deprived of contact with the rest of the world. Therefore, these people ought to be treated generously by the State as we now, as a result of the Government's concession, deal with the blind. I hope that the right hon. Gentleman will be prepared to accept both new Clauses.
  Mr. Marcus Worsley: I support the new Clauses, and, in particular, new Clause 32, to which my name is added.
  My hon. Friend the Member for Ormskirk (Sir D. Glover) said that the Front Bench was always at its worst on these occasions. I hope that today is an exception to that rule, because for the life of me I cannot understand the ground on which the right hon. Gentleman the Financial Secretary could oppose

  639
  these Clauses. It would be impossible for him to oppose them on the ground of logic. Once one accepts the proposition that blindness reduces the ability of a taxpayer to pay tax, there is no logical reason for saying that that principle, which I believe to be sound, should not apply to disability as a whole.
  Surely there is exactly the same degree of additional cost in ordinary living, and therefore a reduced ability to pay in the one case as in the other? The Financial Secretary is an intelligent and logical man, and I therefore suggest that he is not able to say that, in logic, he can defend the proposition that the blind should get these reliefs, but other disabled people should not.
  I suppose that the right hon. Gentleman will be driven to the proposition that this is administratively difficult. I have always found that a difficult argument to swallow, because just such a proposition exists in both the war pensions scheme, and in the industrial injuries scheme. I have never understood what the great difficulty is in bringing the sort of criteria used there into national insurance or taxation. The arguments about administrative inconvenience are becoming untenable, for the simple reason that some of the right hon. Gentleman's colleagues have announced that in the autumn they intend to legislate to put an equivalent right into the National Insurance scheme.
  I dare say that the wording of the new Clause is not exactly right. I am sure that if there is a better wording which the Government will accept my hon. Friend will withdraw his Clause in favour of something different. As we are at the end of the summer in Parliamentary terms, it must be true to say that the legislation for the autumn is in draft, and that the machinery for doing this is in existence. I therefore suggest that the Government have, or very shortly will have, within their power the administrative machinery necessary to bring about this relief. I have a feeling that my hon. Friend may be wrong in saying that the Front Bench is at its worst on these occasions. I hope that it is at its best.
  The Financial Secretary to the Treasury (Mr. Harold Lever): I do not accept that the Government, even though they are not the Government of which I am a
  640
  member, are at their worst on these occasions. The truth is that this House is, rightly, always seeking to extend the boundaries of human compassion for those who have been smitten by the tyrant stroke of fate leading to personal disability, and it is right that there should be no fixed boundaries to that compassion. It is right, too, that the House and our society should strive continually to deepen the sense of communication between those who are fit and able, and those who have been afflicted by one or other of these tragic ailments.
  While hon. Members are undoubtedly entitled to seize on individual and perfectly sound points of justice and compassion, there is an obligation on the Government, whoever they may be, to try to make a coherent approach where annually we try—and this is not a party political matter—to bring a greater degree of compassion and help to those who are disabled.
  The truth of the matter—and this must be faced, and I know that it will be by those who have been good enough to assume that I am logical, whatever else I might not be—is that if I accepted every proposal put to the Government there would be as many anomalies and as many illogicalities at the end of the day as there are now. I cannot pretend that the present system of piecemeal compassion as we advance is perfect, or holds together the lines of strictly well-devised priorities. It has just been what, from time to time, different Governments have felt, trying to keep some coherence, and to respond to the feelings of society to move forward on these matters. It is a sort of extemporised system.
  I think that the hon. Member for Dorset, South (Mr. Evelyn King) is right in saying—if we take the first new Clause —that on the face of it it is anomalous that we help those who are able to help themselves by being able to drive, but we are not prepared to make a similar concession for those who are not able to drive at all, and who are really worse off. It is not really as illogical as that, oddly enough, if one comes to think about it. Life consists often in trying to help people who have a borderline capacity to help themselves. It is not always wrong to say that with a few £s we can provide a car—not merely

  641
  the licence duty; we provide the transport itself—for those who are able to drive themselves, whereas it is beyond our means to cope with the vast number of people who are worse off who cannot hope to drive at all.
  We could not possibly provide them with help in that way, namely, with some marginal help of a vehicle, or special type of vehicle, to allow them to drive themselves. But I agree with hon. Members when they say that if we move to help those who are able to help themselves, we are obliged to try to help those who cannot benefit from the concessions that we have made so far.
  On new Clause 13, it is not a question of worrying about floodgates of expenditure, or anything of that kind. I am not in the least concerned with that here. I do not think that vast expenditure is involved. It is simply an attempt to keep some coherence which makes me unwilling to accept the Clause. The truth is that it is quite indefensible. What is done here is to give to those who are rather worse disabled a fraction of the help that we now give to people who are less disabled. This will not do as a remedy, or as a purported remedy. What is worse, the Clause helps those who need a special and extensive adaptation of a vehicle only to the extent of giving them relief from licence duty.
  A. man may be dreadfully disabled. I do not know what is meant by "extensive and obvious alteration of the vehicle", but great stress was laid on this. I take it that what is required is a major change in the vehicle. A man is to get help only if his disability is of a kind which requires a major operation on the vehicle. This is no measure of his disability. He may be totally blind, deaf, and dumb, and no special adaptation of the vehicle is required. It simply means that he needs a vehicle. He is just as disabled as a man who needs a platform, or a special adaptation, but under these provisions he would not benefit at all. It is anomalous to pick that one section of disabled people who would qualify for help if they were able to drive, but are not able to drive, and say that if they cannot be given the facilities to drive they shall be given freedom from licence duty as is given to other disabled people.
  642
  If we are to make progress we have to find a more coherent and adequate way of doing so. This is not a means of economising, or of avoiding responsibility. The Department of Health and Social Security—the appropriate Department—is struggling to enlarge the help that can be given to disabled people in the form of transport. I agree that whatever we do there will be faulty logic and priorities, but what we do is done in good faith. We help as fast as we can. We have to go on with the emphasis on pushing at the borders more helpfully, rather than attempting partial solutions, such as that suggested in the new Clause. For the same reason, the Clause referred to by the hon. Member for Birmingham, Edgbaston (Mrs. Knight) must be resisted.
  5 p.m.
  On the question of general allowances, I do not want to rehearse what was said last year because anyone who wants a full statement has only to turn to last year's HANSARD report. On 3rd July last year, the Minister of State set out copiously all the reasons for rejecting proposals for all these allowances. I will sum up in a few words what he said, and I hope that the House will not think me discourteous for not repeating what he said in detail. He said that it would benefit these people if the cost of an attendant were met, but it would do nothing for those who might incur substantial expense in other ways.
  I keep having this difficult problem when people write to me telling me of persons who would qualify for allowances for an attendant to look after them, but who, unhappily, have become too ill to be able to be looked after at home and have to go into a nursing home, thereby losing the allowance because they no longer have an attendant. This is part of the general problem of trying to bring compassion and coherence into the whole move to help people in these difficulties, without yielding—as one is tempted to do—too immediately to every kindly impulse.
  This is a problem that faces every Minister. We are given particulars of an individual case, and we would very much like to say, "Let it go. Let this man have this concession." But we cannot do that. We have to try to establish a coherent principle upon which to operate the concession.
  Mr. Fortescue: May I remind the right hon. Gentleman of what the Secretary of

  643
  State for Social Security said in paragraph 91 of Cmnd. 3883, namely:
  "A new attendance allowance will therefore be introduced for very severely disabled people."
  Mr. Lever: An attendance allowance is a matter for social security; it is not a tax allowance. That is exactly my point. That is the way to proceed coherently and compassionately by making an allowance positively to those who need it, as generously as the community is willing to allow.
  Mr. Hugh Fraser: The right hon. Gentleman talks about compassion being piecemeal. Compassion always is. Comprehensive compassion, unless one is Almighty God, is impossible. We must have piecemeal compassion.
  Mr. Lever: I accept that. I have not said otherwise.
  The present system came into being piecemeal by pressing certain concessions on the Government of the day. But some semblance of coherence and logic must be maintained. I have dealt with the point that the hon. Member made on the question of a piecemeal concession. I agree. We cannot have a perfect recreation of the whole system of benevolence. We must add to it piecemeal, but we must make the right kind of addition piecemeal, through the Ministry of Social Security. We are using the money to the best effect and in the most logical way. The Amendment would cause us to do so in a rather less logical way.
  The Government are continuing to meet the need of people who are severely disabled through the social security system, on a scale probably more generous than anybody has conceived in the past. There is no point in a society's being constructive and creative if it is not to become more compassionate to its more deserving members.
  Mrs. Knight: Will the right hon. Gentleman bring his influence to bear on the Minister of Transport to try to persuade

  Division No. 331.]

  AYES

  [5.8 p.m.

  Alison, Michael (Barkston Ash)

  Barber, Rt. Hn. Anthony

  Biggs-Davison, John

  Allason, James (Hemel Hempstead)

  Beamish, Col. Sir Tufton

  Black, Sir Cyril

  Aster, John

  Bell, Ronald

  Blaker, Peter

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

  Bennett, Sir Frederic (Torquay)

  Boardman, Tom (Leicester, S.W.)

  Baker, Kenneth (Acton)

  Bennett, Dr. Reginald (Gos. & Fhm)

  Body, Richard

  Baker, W. H. K. (Banff)

  Biffen, John

  Bossom, Sir Clive

  him, in the circumstances which I have outlined, to act in the way suggested by the right hon. Gentleman in providing that it shall not be necessary to demand hand controls in vehicles driven by these people?
  Mr. Lever: It is not for me to dictate to the Minister of Transport the terms on which he should allow people to drive cars. That is an area in which the Treasury writ does not run. I see the anomoly in the case of the hon. Member's constituent who is caught between two Departmental requirements. He does not qualify for the benefit, and has inconvenience forced upon him. I will see that the point is again raised with my right hon. Friend. I cannot say at this point whether he will be able to help the hon. Lady.
  Mr. Patrick Jenkin: We welcome the Financial Secretary's return to our deliberations and hope that he is restored to health. I cannot give the same welcome to his speech. My right hon. Friend the Member for Stafford and Stone (Mr. Hugh Fraser) put his finger squarely on the point of Amendments of this nature when he said that progress in this and other related fields has always been achieved by slow and often unrelated stages. The Financial Secretary is chasing a chimera if he believes that he will be able to pull out of the hat—as a rabbit is pulled out of a hat—a wholly coherent system which would not require further piecemeal advances in helping the disabled.
  The Amendment, moved by my hon. Friend the Member for Farnham (Mr. Maurice Macmillan) and supported by hon. Members on both sides, is a modest one. The Financial Secretary has not made what we regard as a wholly convincing case, and we therefore think that it would be right to divide in favour of the new Clause.
  Question put, That the Clause be read a Second time:—
  The House divided:

  Boyd-Carpenter, Rt. Hn. John

  Hay, John

  Osborne, Sir Cyril (Louth)

  Boyle, Rt. Hn. Sir Edward

  Heald, Rt. Hn. Sir Lionel

  Page, Graham (Crosby)

  Braine, Bernard

  Heath, Rt. Hn. Edward

  Page, John (Harrow, W.)

  Bromley-Davenport, Lt.-Col. Sir Walter

  Heseltine, Michael

  Pardoe, John

  Brown, Sir Edward (Bath)

  Higgins, Terence L.

  Peel, John

  Bruce-Gardyne, J.

  Hiley, Joseph

  Percival, Ian

  Bryan, Paul

  Hill, J. E. B.

  Peyton, John

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

  Hirst, Geoffrey

  Pike, Miss Mervyn

  Buck, Antony (Colchester)

  Hogg, Rt. Hn. Quintin

  Pink, R. Bonner

  Bullus, Sir Eric

  Holland, Philip

  Pounder, Rafton

  Burden, F. A.

  Hordern, Peter

  Powell, Rt. Hn. J. Enoch

  Campbell, B. (Oldham, W.)

  Hornby, Richard

  Price, David (Eastleigh)

  Campbell, Gordon (Moray & Nairn)

  Howell, David (Guildford)

  Prior, J. M. L.

  Carlisle, Mark

  Hunt, John

  Pym, Francis

  Carr, Rt. Hn. Robert

  Hutchison, Michael Clark

  Quennell, Miss J. M.

  Channon, H. P. G.

  Iremonger, T. L.

  Ramsden, Rt. Hn. James

  Chataway, Christopher

  Jenkin, Patrick (Woodford)

  Rees-Davies, W. R.

  Chichester-Clark, R.

  Jopling, Michael

  Ridley, Hn. Nicholas

  Clark, Henry

  Joseph, Rt. Hn. Sir Keith

  Ridsdale, Julian

  Clegg, Walter

  Kaberry, Sir Donald

  Rossi, Hugh (Hornsey)

  Cooke, Robert

  Kerby, Capt. Henry

  Royle, Anthony

  Costain, A. P.

  Kershaw, Anthony

  Russell, Sir Ronald

  Craddock, Sir Beresford (Spelthorne)

  King, Evelyn (Dorset, S.)

  Scott-Hopkins, James

  Cunningham, Sir Knox

  Knight, Mrs. Jill

  Sharples, Richard

  Currie, G. B. H.

  Lancaster, Col. C. G.

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

  Dalkeith. Earl of

  Lane, David

  Smith, Dudley (W'wick & L'mington)

  Dance, James

  Lawler, Wallace

  Smith, John (London & W'minster)

  Davidson, James(Aberdeenshire, W.)

  Legge-Bourke, Sir Harry

  Speed, Keith

  d'Avigdor-Goldsmid, Sir Henry

  Lloyd, Rt. Hn. Selwyn (Wirral)

  Stainton, Keith

  Digby, Simon Wing field

  Longden, Gilbert

  Stodart, Anthony

  Dodds-Parker, Douglas

  Lubbock, Eric

  Stoddart-Scott, Col. Sir M.

  Doughty, Charles

  McAdden, Sir Stephen

  Taylor, Sir Charles (Eastbourne)

  Drayson, G. B.

  MacArthur, Ian

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

  du Cann, Rt. Hn, Edward

  Mackenzie, Alasdair (Ross&Crom'ty)

  Taylor, Frank (Moss Side)

  Eden, Sir John

  Maclean, Sir Fitzroy

  Thatcher, Mrs. Margaret

  Errington, Sir Eric

  Macleod, Rt. Hn. Iain

  Thorpe, Rt. Hn. Jeremy

  Eyre, Reginald

  McMaster, Stanley

  Tilney, John

  Fisher, Nigel

  Macmillan, Maurice (Farnham)

  Turton, Rt. Hn. R. H.

  Fletcher-Cooke, Charles

  McNair-Wilson, Michael

  van Straubenzee, W. R.

  Fortescue, Tim

  Maddan, Martin

  Vaughan-Morgan, Rt. Hn. Sir John

  Foster, Sir John

  Maginnis, John E.

  Vickers, Dame Joan

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

  Marples, Rt. Hn. Ernest

  Waddington, David

  Galbraith, Hn. T. G.

  Marten, Neil

  Wainwright, Richard (Colne Valley)

  Gilmour, Ian (Norfolk, C.)

  Maude, Angus

  Walker, Peter (Worcester)

  Gilmour, Sir John (Fife, E.)

  Mawby, Ray

  Walker-Smith, Rt. Hn. Sir Derek

  Glover, Sir Douglas

  Maxwell-Hyslop, R. J.

  Ward, Dame Irene

  Glyn, Sir Richard

  Mills, Peter (Torrington)

  Weatherill, Bernard

  Godber, Rt. Hn. J. B

  Mills, Stratton (Belfast, N.)

  Wells, John (Maidstone)

  Goodhart, Philip

  Mitchell, David (Basingstoke)

  Whitelaw, Rt. Hn. William

  Goodhew, Victor

  Monro, Hector

  Wiggin, A. W.

  Grant, Anthony

  Montgomery, Fergus

  Williams, Donald (Dudley)

  Gresham Cooke, R.

  More, Jasper

  Wilson, Geoffrey (Truro)

  Griffiths, Eldon (Bury St. Edmunds)

  Morgan, Geraint (Denbigh)

  Winstanley, Dr. M. P.

  Gurden, Harold

  Morgan-Giles, Rear-Adm.

  Wood, Rt. Hn. Richard

  Hall, John (Wycombe)

  Morrison, Charles (Devizes)

  Woodnutt, Mark

  Hall Davis, A. G. F.

  Mott-Radclyffe, Sir Charles

  Worsley, Marcus

  Harris, Reader (Heston)

  Munro-Lucas-Tooth, Sir Hugh

  Wright, Esmond

  Harrison, Brian (Maldon)

  Nabarro, Sir Gerald

  Younger, Hn. George

  Harvey, Sir Arthur Vere

  Neave, Airey

  Harvie Anderson, Miss

  Noble, Rt. Hn. Michael

  TELLERS FOR THE AYES:

  Hastings, Stephen

  Nott, John

  Mr. R. W. Elliott and Mr. Timothy Kitson.

  Hawkins, Paul

  Onslow, Cranley

  Osborn, John (Hallam)

  NOES

  Abse, Leo

  Blackburn, F.

  Carmichael, Neil

  Albu, Austen

  Blenkinsop, Arthur

  Carter-Jones, Lewis

  Allaun, Frank (Salford, E.)

  Boardman, H. (Leigh)

  Castle, Rt. Hn. Barbara

  Alldritt, Walter

  Booth, Albert

  Chapman, Donald

  Anderson, Donald

  Boston, Terence

  Concannon, J. D.

  Ashley, Jack

  Bottomley, Rt. Hn. Arthur

  Conlan, Bernard

  Atkins, Ronald (Preston, N.)

  Boyden, James

  Craddock, George (Bradford, S.)

  Atkinson, Norman (Tottenham)

  Bradley, Tom

  Crawshaw, Richard

  Bacon, Rt. Hn. Alice

  Bray, Dr. Jeremy

  Cronin, John

  Barnes, Michael

  Brooks, Edwin

  Crosland, Rt. Hn. Anthony

  Barnett, Joel

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

  Crossman, Rt. Hn. Richard

  Baxter, William

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

  Dalyell, Tam

  Beaney, Alan

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

  Darling, Rt. Hn. George

  Bence, Cyril

  Buchan, Norman

  Davidson, Arthur (Accrington)

  Benn, Rt. Hn. Anthony Wedgwood

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

  Davies, Ednyfed Hudson (Conway)

  Bidwell, Sydney

  Butler, Herbert (Hackney, C.)

  Davies, C. Elfed (Rhondda, E.)

  Binns, John

  Butler, Mrs. Joyce (Wood Green)

  Davies, Dr. Ernest (Stretford)

  Bishop, E. S.

  Callaghan, Rt. Hn. James

  Davies, Rt. Hn. Harold (Leeh)

  646

  647

  Davies, Ifor (Gower)

  Jay, Rt. Hn. Douglas

  Pavitt, Laurence

  de Freitas, Rt. Hn. Sir Geoffrey

  Jenkins, Rt. Hn. Roy (Stechford)

  Pearson, Arthur (Pontypridd)

  Delargy, Hugh

  Jenkins, Hugh (Putney)

  Peart, Rt. Hn. Fred

  Dell, Edmund

  Johnson, Carol (Lewisham, S.)

  Pentland, Norman

  Dempsey, James

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

  Perry, Ernest C. (Battersea, S.)

  Diamond, Rt. Hn. John

  Jones, Dan (Burnley)

  Perry, George H. (Nottingham, S.)

  Dickens, James

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

  Price, Christopher (Perry Barr)

  Dobson, Ray

  Jones, J. Idwal (Wrexham)

  Price, Thomas (Westhoughton)

  Doig, Peter

  Jones, T. Alec (Rhondda, West)

  Price, William (Rugby)

  Driberg, Tom

  Judd, Frank

  Probert, Arthur

  Dunn, James A.

  Kelley, Richard

  Randall, Harry

  Dunnett, Jack

  Kenyon, Clifford

  Rankin, John

  Dunwoody, Mrs. Gwyneth (Exeter)

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

  Rees, Merlyn

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

  Kerr, Russell (Feltham)

  Richard, Ivor

  Eadie, Alex

  Lawson, George

  Roberts, Albert (Normanton)

  Edelman, Maurice

  Leadbitter, Ted

  Roberts, Rt. Hn. Goronwy

  Edwards, Robert (Bileton)

  Lee, John (Reading)

  Roberts, Gwilym (Bedfordshire, S.)

  Ellis, John

  Lever, Rt. Hn. Harold (Cheetham)

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

  English, Michael

  Lewis, Ron (Carlisle)

  Rodgers, William (Stockton)

  Ensor, David

  Lipton, Marcus

  Roebuck, Roy

  Evans, Albert (Islington, S.W.)

  Lomas, Kenneth

  Rogers, George (Kensington, N.)

  Evans, Fred (Caerphilly)

  Loughlin, Charles

  Ross, Rt. Hn. William

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

  Lyon, Alexander W. (York)

  Rowlands, E.

  Finch, Harold

  Mabon, Dr. J. Dickson

  Ryan, John

  Fitch, Alan (Wigan)

  McBride, Neil

  Shaw, Arnold (Ilford, S.)

  Fitt, Gerard (Belfast, W.)

  MacColl, James

  Sheldon, Robert

  Fletcher, Rt. Hn. Sir Eric (Islington, E.)

  McGuire, Michael

  Shinwell, Rt. Hn. E.

  Fletcher, Raymond (Ilkeston)

  McKay, Mrs. Margaret

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

  Fletcher, Ted (Darlington)

  Mackenzie Gregor (Rutherglen)

  Silkin, Rt. Hn. John (Deptford)

  Foot, Rt. Hn. Sir Dingle (Ipswich)

  Mackintosh, John P.

  Silverman, Julius

  Foot, Michael (Ebbw Vale)

  Maclennan, Robert

  Skeffington, Arthur

  Ford, Ben

  McMillan, Tom (Glasgow, C.)

  Slater, Joseph

  Forrester, John

  McNamara, J. Kevin

  Small, William

  Fowler, Gerry

  Mabon, Peter (Preston, S.)

  Snow, Julian

  Freeson, Reginald

  Mahon, Simon (Bootle)

  Spriggs, Leslie

  Galpern, Sir Myer

  Mallalieu, E. L. (Brigg)

  Steele, Thomas (Dunbartonshire, W.)

  Gardner, Tony

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

  Stonehouse, Rt. Hn. John

  Garrett, W. E.

  Manuel, Archie

  Strauss, Rt. Hn. G. R.

  Ginsburg, David

  Mapp, Charles

  Summerskill, Hn. Dr. Shirley

  Gordon Walker, Rt. Hn. P. C.

  Marks, Kenneth

  Symonds, J. B.

  Gray, Dr. Hugh (Yarmouth)

  Marquand, David

  Taverne, Dick

  Gregory, Arnold

  Marsh, Rt. Hn. Richard

  Thomson, Rt. Hn. George

  Grey, Charles (Durham)

  Mason, Rt. Hn. Roy

  Tinn, James

  Griffiths, David (Rother Valley)

  Mellish, Rt. Hn. Robert

  Tuck, Raphael

  Griffiths, Eddie (Brightside)

  Mendelson, John

  Urwin, T. W.

  Griffiths, Will (Exchange)

  Mikardo, Ian

  Varley, Eric G.

  Hamilton, James (Bothwell)

  Miller, Dr. M, S.

  Wainwright, Edwin (Dearne Valley)

  Hamilton, William (Fife, W.)

  Milne, Edward (Blyth)

  Walden, Brian (Alf Saints)

  Hamling, William

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

  Walker, Harold (Doncaster)

  Harper, Joseph

  Molloy, William

  Wallace, George

  Harrison, Walter (Wakefield)

  Moonman, Eric

  Watkins, David (Consett)

  Hart, Rt. Hn. Judith

  Morgan, Elystan (Cardiganshire)

  Watkins, Tudor (Brecon & Radnor)

  Haseldine, Norman

  Morris, Alfred (Wythenshawe)

  Weitzman, David

  Hazell, Bert

  Morris, Charles R. (Openshaw)

  Whitaker, Ben

  Healey, Rt. Hn. Denis

  Moyle, Roland

  Whitlock, William

  Heffer, Eric S.

  Murray, Albert

  Wilkins, W. A.

  Henig, Stanley

  Neal, Harold

  Willey, Rt. Hn. Frederick

  Hilton, W. S.

  Newens, Stan

  Williams, Alan (Swansea, W.)

  Hobden, Dennis

  Noel-Baker, Rt. Hn. Philip

  Williams, Alan Lee (Hornchurch)

  Hooley, Frank

  Oakes, Gordon

  Williams, Clifford (Abertillery)

  Houghton, Rt. Hn. Douglas

  Ogden, Eric

  Williams, Mrs. Shirley (Hitchin)

  Howarth, Harry (Wellingborough)

  O'Malley, Brian

  Willis, Rt. Hn. George

  Howarth, Robert (Bolton, E.)

  Oram, Albert E.

  Wilson, Rt. Hn. Harold (Huyton)

  Howie, W.

  Orbach, Maurice

  Wilson, William (Coventry, S.)

  Hoy, Rt. Hn. James

  Orme, Stanley

  Winnick, David

  Hughes, Rt. Hn. Cledwyn (Anglesey)

  Oswald, Thomas

  Woodburn, Rt. Hn. A.

  Hughes, Hector (Aberdeen, N.)

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

  Woof, Robert

  Hughes, Roy (Newport)

  Owen, Will (Morpeth)

  Wyatt, Woodrow

  Hunter, Adam

  Palmer, Arthur

  TELLERS FOR THE NOES:

  Irvine, Sir Arthur (Edge Hill)

  Pannell, Rt. Hn. Charles

  Mr. Ernest Armstrong and Mr. John McCann.

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

  Park, Trevor

  Parker, John (Dagenham)

  Parkyn, Brian (Bedford)

New Clause 19

  GENERAL BETTING DUTY
  For the purposes of the general betting duty on bets made on or after 1st October, 1969, section 12(2) of the Finance Act, 1966, shall have effect as if in place of paragraph (b)
  648
  thereof (under which the amount of the duty is an amount equal to five per cent. of the amount staked) there were substituted the following paragraph, namely—

  (b) shall be of an amount equal, in the case of a bet made on an approved horse racecourse or licensed track, to two and a half per cent. of the amount staked and, in

  649
  the case of any other bet, to five per cent. of the amount staked; and.—[Mr. Temple.]

  Brought up, and read the First time.
  5.15 p.m.
  Mr. John M. Temple: I beg to move, That the Clause be read a Second time.
  This is not the first occasion that I have been involved with a new Clause aimed at altering the general betting duty. I remember that in 1966 my hon. Friend the Member for Isle of Thanet (Mr. Rees-Davies) moved a new Clause of a somewhat similar nature and in 1968 my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) tried to do the same thing. Today, I hope to prove to the Financial Secretary and the Government that the situation for on-course bookmakers and on-track bookmakers at greyhound tracks is deteriorating very considerably.
  It is against that background of deterioration of the on-course betting situation and having regard to the considerable malaise in the betting industry that I move this Clause. The Government will recollect that earlier this year the levy extracted by the Horserace Belting Levy Board was doubled under the direction of the Home Office. This year there is to be a new heavy betting licence. Admittedly, this will only affect betting offices operating off-course betting, but all this taxation added together is a gigantic impost on the industry which is in effect supported by the punters.
  As a revenue raiser betting duties have been fairly successful and basically my right hon. Friends and myself support the m. There are limits to all duties and I shall try to prove that with on-course betting the law of diminishing returns is now operating. The new Clause alters the 1966 Act, reducing the amount of duty to 2½ per cent. on-course from the 5 per cent. at which it stands.
  I shall prove also that the on-course betting market needs a shot in the arm because a great deal depends on the on-course market in regard to that enormous industry called the stating price betting industry mainly conducted through betting offices.
  The object of the Clause is clear. It was made clear by my right hon. Friend the Member for Enfield, West last year. It is to encourage the betting market on
  650
  which the starting price on racecourses is based. Significantly, Lord Wigg, who, I suppose, is the most respected expert in the racing industry, made a pronouncement on this matter comparatively recently. I shall quote from the Daily Telegraph, which is also highly respected, of 4th June, in which Lord Wigg, Chairman of the Horserace Betting Levy Board, is reported as having said:
  "Betting in this country is based on the on-course prices, a tiny foundation for an enormous inverted pyramid. There is no doubt that the on-course bookmaker is under considerable pressure and must be given immediate relief if racing, as we know it, is to be saved."
  Those are extremely strong words—"if racing…is to be saved".
  Lord Wigg probably knows more about racing than any other man in this country because, as chairman of the board, he is responsible for getting as large a number of people to attend race tracks as possible. That is why he is very interested in the preservation, and indeed in the strengthening, of the on-course betting market.
  I am always a little anxious when making any forecast, because the Chief Secretary has a habit of pulling me up if my figures are not absolutely exact. I got into difficulty with the right hon. Gentleman last year because I said that I had hacked a winner at 3 to 1 on, but that due to the operations of the tax it was a 4 to 1 on bet. He said that it should have been 3⅞ to 1 on. Therefore, I propose to talk about these matters in round figures.
  Last year, I ventured a forecast. I said that there would be a drop of about 50 per cent. in the amount of money changing hands on the racecourses. In fact, in the first three months of this year, there was a drop of 40 per cent. in the money wagered on all tracks and racecourses. But I was almost correct about horserace courses because the drop in the money wagered on-course on horserace tracks dropped by 46 per cent. —very close to the 50 per cent. which I forecast. This is the justification for bringing forward the new Clause again because there is no doubt that the serious situation which we forecast is coming to pass.
  Mr. James Dance: I am interested in my hon. Friend's figures for

  651
  on-course betting. Has he the equivalent figure for off-course betting over the same period? I have an idea that it has gone up, whereas the figure for on-course betting has gone down.
  Mr. Temple: My hon. Friend is partly right. Lord Wigg forecast that on-course betting would go down by 15 per cent. Overall, off-course betting has dropped by about 11 per cent. Therefore, the off-course situation is very much better than the on-course situation.
  It has been said in several quarters that on-course bookmakers are a dying race. I again quote from the article in the Daily Telegraph:
  "The average age of the on-course bookmaker is 60 and it's going up."
  Having a little experience of racecourses, I do not think that I should want to make a book on a racecourse unless it was a reasonably profitable business, because bookmakers face all kinds of weather and make a book under incredible difficulties, very often in wind and rain in the winter and probably in excessive heat in the summer. Nevertheless, it is the rails bookmakers who are responsible for making the starting price.
  As my right hon. Friend the Member for Enfield, West explained in detail on one occasion, it is not the "bookies" who make the starting price, but the representatives of the Sporting Chronicle and the Sporting Life. But they get their information from the rails bookmakers. At two Northern meetings recently there were only two rails bookmakers operating. We cannot be absolutely certain that the betting taking place on the course is a true reflection of the chances of the horses in the race.
  I come to the real difficulty of a weak course market. I understand that deputations have seen the Financial Secretary recently about the effect of hedging on-course. It was said to me that the hon. Gentleman was extraordinarily sympathetic about hedging bets on-course. But, with the operation of the 5 per cent. general betting levy, hedging on-course has dwindled almost to nothing. Therefore, the strength of the course market and its capacity to reflect the amount of money moving in it has been severely handicapped.
  652
  With a relatively weak market, it is possible to rig or manipulate the market. It is possible to make false favourites. A great deal of money goes on the favourite at the post in the starting price market. I have a little experience of false favourites. One or two let me down very badly. At small Northern meetings it is comparatively easy, in a very weak market, to influence the market so that it does not truly reflect the capacity of an animal to win.
  Some years ago I had the good fortune to race not infrequently in Australia. The Australians are more devoted to racing than to any other sport, even cricket. There has been a betting tax in Australia for many years. Experience there is that a 2½ per cent. general turnover tax is too high and that all racing will stand is a 2½per cent. turnover tax. I warn the Government that the upper limit is being exceeded in all the levies and duties introduced in recent years. But, as was pointed out by Lord Wigg, the fulcrum of the matter is the course market.
  Mr. John Mendelson: As a citizen who has only an occasional bet, I am alarmed by what the hon. Gentleman says. Is he saying that above a certain percentage of levy there is inevitably grave dishonesty and fraud? If so, is not this more a case for Scotland Yard than the Chancellor of the Exchequer?
  Mr. Temple: I shall come to that point, because the hon. Member for Woolwich, West (Mr. Hamling) has spoken on it fairly frequently. I shall warn the Treasury about that matter.
  It will be known to the Financial Secretary that the Committee over which Sir Henry Benson presided recommended a vast modernisation programme for horse-race courses. This has been accepted by Lord Wigg. A lot of the money collected by the Levy Board is going into this modernisation programme. It is not the slightest good providing better facilities if the public do not frequent racecourses. This is one of the main new arguments for an alleviation of the heavy impost on wagers made on the racecourse.
  5.30 p.m.
  Greyhound racing is a sport of which I know very little and to which I am not particularly attracted, but it is Britain's

  653
  second largest spectator sport. On-course betting at greyhound tracks, as reflected in duty, accounts for about two-thirds of all revenue from on-course betting. Greyhound racing is, therefore, a very significant factor in this connection. In 1968–69, the total betting duty raised on-course was about £9 million, of which £6 million came from greyhound racing.
  Greyhound racing is now facing a very serious situation. Attendances have approximately halved in the last 10 years, although the number of meetings held has gone down by only about 8 per cent. The Financial Secretary will know that tracks are closing very quickly. They are very often valuable open spaces fairly near the middle of big areas of urban development. Both from the point of view of revenue and of keeping these areas of open space in urban development, the Treasury should think very carefully before deciding to keep the rate of duty so high that the greyhound racing industry is driven to the wall. The loss of revenue will be enormous.
  The return on greyhound racing tracks is at present only about 4 per cent.—a very meagre return for the amount of capital involved. This is why there are so many applications for planning permission by greyhound racing organisations: the development potential of the area is very much greater than its value as a greyhound racing track. The greyhound racing world is fighting for survival, and the Revenue is vitally interested in that survival.
  I warn the Treasury that owners are racing their horses overseas but that overseas owners are not bringing their horses to Britain just because the on-course situation is not as satisfactory as it used to be. As the on-course market is weakened and the number of punters and bookmakers declines, the on-course situation is rapidly deteriorating. I warn the Treasury that many tracks and courses face deep financial difficulty.
  I come now to the point made by the hon. Member for Penistone (Mr. John Mendelson). I well remember the Bill which introduced betting shops. I did not welcome that Measure, but I realised that belting shops were necessary if betting was to be made legal and kept clean. I am now anxious about a deteriorating situation. I give a very severe warning that information has come to me only
  654
  comparatively recently that the present very high rates of duty must be an encouragement to illegal betting. I leave it at that, but do so as a very real warning.
  We on this side want to see a thriving, healthy and honest racing industry. Encouraging the on-course bookmaker, creating a market that will be strong and will give a fair starting price to the public would be the right way to organise the betting industry. Equally, it would be right for the Treasury in the long run, because the worst thing that could possibly happen would be to have racing driven underground, as it was formerly. I very much hope that in this changing situation—indeed, in a changed situation —the Government will have second thoughts, and will accept the Clause.
  Mr. William Hamling: I have several reasons for hoping that my right hon. Friend will accept the Clause. The hon. Member for the City of Chester (Mr. Temple) has told us that information has come to him about illegal betting. It has come also to me. I referred in Standing Committee to the growth of illegal betting. Looking at the returns of the small bookmakers, and some of the larger bookmakers—and the Mark Lane group as well, which is not small—one sees that their turnover is falling, and I have little doubt that the money is going to other forms of gambling.
  It may be going into the gaming clubs, but I suggest that the small punter's money is going back on the streets, where it used to be, and into the pubs, the clubs and the factories. We all know that in most large factories a syndicate operates. Without mentioning names, I know that a syndicate of bookies is operating actually in a factory down the Thames. Whether the firm also pays the wages, I do not know—perhaps some of our colleagues who complain about pay might look for a job there.
  Mr. Timothy Kitson: I understand that a good deal of betting goes on from this country with bookmakers in South Africa, who return the starting prices on British racecourses. Tax for bets is not deducted in South Africa. This would also seem to be an illegal method.
  Mr. Hamling: I do not have the hon. Gentleman's knowledge, and I do not know how bets are shifted to South Africa, as he obviously does, but I hope that my right hon. Friend will also bear that aspect in mind. My information is that the Revenue is concerned about illegal betting, and has been watching some places. In view of the loss to the Revenue that will ultimately result and the diminishing returns that will ultimately come about, although they may not yet have done so, I regard the decision taken elsewhere in the Bill as foolish, although I would be out of order to refer to it now.
  When money goes into illegal betting, all sorts of strange people start getting their hands on the "dough". Hitherto, we have managed to keep betting free from the large-scale gangsters, but I have no doubt that if illegal betting develops and more and more money goes in that direction it will prove very attractive to some of the criminal gangs which operate in this city and elsewhere in the country. I impress upon my right hon. Friend that this is no idle threat. It is a very important consideration from the point of view not only of the Revenue, but of the moral health of the nation—and, as the Committee knows, I am very strong on these moral questions.
  The need is to create a strong on-course betting market to provide a reasonable basis for good starting prices, and this is one of the main purposes of the Clause. Such a market is important, not only for the on-course bookmaker and the on-course punter, but for the off-course punter as well. There is no doubt that for bookmakers on the racecourses the fixing of S.P. fixes the market for betting as a whole. This is of indirect advantage to the Revenue. If there is a strong betting market that helps the punter off-course as well as on, and this ultimately is of benefit to the Revenue.
  Mr. Dance: Does the hon. Member agree that if there is a lot of illegal off-course betting a lot of money will not go to the racecourse and there will be a fictitous price?
  Mr. Hamling: That is absolutely true; it is the other side of the coin. When the market is weak there is not a good S.P., but a false price. We have seen that in recent weeks.
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  Another aspect is the very small fields which are operating. I looked at the results of about four meetings recently and found that in three-quarters of the cases the favourite won, and in most cases it was odds-on. I suppose that there is an incentive to the punter, but very few bookmakers, especially the small ones, will keep their doors open for long in that sort of market. One has to be fair all round in this matter.
  The small bookmakers to whom I have spoken recently have argued very strongly in favour of a differential for the on-course market. This would help to break down the monopoly of some very big bookmakers. I am not sure that having a monopoly for a few big bookmakers will necessarily help the small punter, particularly because he is not the sort of chap for whom the big bookmaker is looking. He is not interested in the punters, but in the big bets. The small bookmaker services the small punter. It is no good my hon. Friend the Member for Bedfordshire, South (Mr. Gwilym Roberts) shaking his head at that. If he goes into a betting shop in his constituency the proprietor will tell him that it is so. He should do that; it would improve his education. He would also meet many more of his constituents.
  This differential would also help small bookmakers to put up their stands and make the courses more colourful and attractive for visitors and racegoers. One of the objects is to make going to the races more attractive. What is wrong with that? I am all in favour of improving the racecourses rather than increasing betting at home. I regard it as a healthy sport.
  My hon. Friend the Member for Uxbridge (Mr. Ryan), coming from the other side of the water—the right side, where racegoing is a national pastime more than it is here—would agree with that. This would be a help to the industry as a whole. It would improve attendances, courses could be modernised and made more attractive, and it would bring owners and trainers back to the courses. It is necessary that prices should be better so that owners are attracted and money, tourists and visitors are brought to this country.
  That is the advantage of the new Clause. After these remarks, I am sure

  657
  that my hon. Friend the Financial Secretary will be only too eager to accept it.
  5.45 p.m.
  Mr. W. R. Rees-Davies: I join in what has been said, adopt it, and agree with it. The purpose of having a racing industry in this country, having races and a bloodstock industry, is to enable people to enjoy a way of life, the sport of kings—which is racegoing, not telly-watching. Therefore, we should assist one of our major sports not to perish under an undue burden of taxation.
  The difficulty is that there is an increasing burden of taxes year by year upon the racing industry. It has reached levels which now show clearly the law of diminishing returns. I am not so concerned about the returns as to prove categorically that we must have a differential between those concerned in participation in racing as opposed to those who merely want to enjoy betting. Those two are quite separate and distinct in principle.
  It is unique that everyone concerned with racing agrees with this new Clause. It is very unusual to find the racing industry agreeing about anything, but I have found recently that a large number of bookmakers in London and in the country, those concerned with judging, those concerned with the Jockey Club, with trainers, owners and racecourses all agree in principle with this new Clause.
  The Racing Industry Committee of Inquiry said in June. 1968, that there is
  "…a strong case for assisting on-course bookmakers by remitting the tax on course."
  Lord Wigg has already been quoted. Major-General Sir Randle Feilden said the same on behalf of the Jockey Club and the stewards. The trainers have all agreed that it is most important to have a differential between on-course and off-course betting, however high it may be. The jockeys agree, the owners agree—
  Mr. Hamling: Even the horses.
  Mr. Rees-Davies: Of course, the horses agree because it will be to their benefit as their breeding will be all the better. The Government must concede the principle today. We should be quite clear that this year it is the intention of the House of Commons, both parties—the Liberal Party as usual, is not present,
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  but leaving them out as one always does in matters of sport—
  Mr. Hamling: What about indoor sport?
  Mr. Rees-Davies: I was about to say pleasurable sport, I hope we shall have this inured as a principle.
  International competition in horse-racing is growing fast. The Japanese are interested and so are the Germans, the French and the Americans. They are all beginning to recognise that with the coming of the jumbo-jets sport is international. Colour television militates against race-going. In the year ahead we shall find whether there is an opportunity to see such a perfect picture of the Royal Enclosure at Ascot and perhaps next year there will be an even greater wish to take the idle way out and not to go to the races but to telly-watch.
  Another factor is that off-course betting is so much cheaper. If there is removed one of the only real advantages of going to the races, which is that one may get a better price to bet, and one gets no financial advantage but has to pay 30s. or £2 to go on to the course, one asks, why carry that heavy additional burden? Why should one do it in face of the greater difficulties of traffic to and from the course? The racegoer often has a difficult and costly journey in heavy traffic. He has the burden of paying the entrance fee. He then has to spent his money there. Bookmakers have high overheads for their staff on course, in addition to the cost of entry.
  There is also the fact that the United Kingdom has infinitely lower prize money than overseas countries have. As a result, most of our leading owners have at least one French trainer and at least one horse being trained in France. This year the number is rising considerably.
  Therefore, we must seek to encourage people to go to the races and the owners to keep their horses here. We must encourage foreigners to send their horses here. I have noticed a desire on the part of people overseas to become owners in Britain. There is room here for a substantial invisible export by encouraging overseas owners to send their horses to trainers in Britain.
  This is why I say that, whatever the tax be, it should be half on course. It stands at 5 per cent. at present. It will

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  be virtually 6 per cent. There will be a 5 per cent. tax plus an additional 1 per cent. on the rateable value. Some of the small bookmakers, if they were given the advantage which would accrue from the Government's accepting the Amendment, might, as they will have to do anyway, give up their premises and form a small body and become on-course bookmakers. This year there is a fall of 20 per cent. in the number of bookmakers on course.
  I ask the Financial Secretary to make it clear that this procedure will be adopted and to say in terms that action will be taken by the Government to reverse this tendency of diminishing attendances on course, with the resulting diminishing turnover. As my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) pointed out in Committee, the position of the Tote is deplorable. Many racecourses must close because racecourse profits are down considerably. There was a heavy loss of £10,000 even on Eclipse day at Sandown. That should have been one of the leading days of the year. If there was a loss on that day, hon. Members can imagine the losses which have occurred at other racecourses. Practically all the bookmakers who are remaining on the rails are doing so not for profit but for show —to sustain their reputation off-course.
  I do not think that the Government have recognised that it is easy to be perfectly lawful and place bets in Jamaica and Singapore and thereby pay no tax. I leave this with the Government as my final thought. This is going on extensively. I do not know whether the Government recognise that there are a large number of people in Hong Kong, Singapore, Jamaica, the Bahamas, France, the Canary Islands, Pakistan and India who bet on races in the United Kingdom; they bet regularly in their own countries on the outcome of British races. They do not even have the benefit of television to watch the racing. This is potentially a large industry. All of those who use the market presumably do not pay the tax.
  It would be sad if there were a reversion to the old position. I was one of those concerned in pioneering legislation on betting. I always did so with the feeling that the bookmaker should be
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  able to become rather like the publican. My aim was to make the bookmaker into a respectable man with a strong community sense and with great pride in his job. We wanted to take the bookmaker off the streets. This has happened. In the great majority of cases bookmakers are now in a similar position to publicans.
  However, there is here a tendency to go too fast: under this Government the tax of 2½ per cent. as at 1966 was increased to 5 per cent. in 1968. Now there is to be a further tax which will make the tax much higher than even the betting industry of Australia would begin to have with its 2 per cent. on turnover. This is higher than we can stand.
  It is for these reasons that I commend the Amendment to the Government. It is one which my right hon. and hon. Friends and others would like to see enshrined in principle in the Bill and we hope very shortly carried into effect.
  Mr. Albert Roberts: I have been impressed by the three speeches which have been made. I shall speak in support of greyhound racing. A Home Secretary said many years ago that if his family was in mortal danger apart from saving himself he would save his wife and his horse. I would try to save my wife, my dog and myself.
  The sport of greyhound racing as I know it can be well recommended to the general public at any time. I was surprised at the admission by the hon. Member for the City of Chester (Mr. Temple) that he knew little about it. I believe that greyhound racing is good value for money, particularly in London, where it is a good, clean, open sport. One can go at any time of the year in comfortable surroundings and have a West End meal at a much lower price. That is why I am anxious to save my dog.
  From time to time there have been vicious onslaughts on greyhound racing. From 1948 to 1964 it bore a 10 per cent. tax which was imposed by Sir Stafford Cripps when Chancellor. In 1948 there was far more money than goods and there was no objection in the main, because crowds were going to greyhound stadiums.
  Today, it is a case of diminishing returns. The Betting and Gaming Act, 1960, created betting shops and gave freedom of action in that sphere which was

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  denied to greyhound racing. It is time the Chancellor considered what action to take about betting in general. Over the last few years it has been a case of hit and miss. It required a great deal of persuasion before anything was done about bingo and one-armed bandits. I believe that a proper review of the position would result in benefits being given to on-course betting at the expense of off-course betting.
  The question of high pressure, particularly where there is urban development, has been referred to. A few days ago there were newspaper reports of offers for Wimbledon Stadium. When all is said and done, we have to consider the position of shareholders, but as Members of Parliament we must consider also what is good for the public and whether a place like London or some of our provincial towns really need good clean outdoor sports of this kind. If these tracks disappear, not only will it be a loss to the general public but it will be a great and sad loss to any Chancellor of the Exchequer.
  6.0 p.m.
  It is in the national interest and the local interest that we should not be forced to accept the way these changes are going. If the Chancellor will only give due consideration to the situation as it is now, some of our tracks, particularly in the larger centres of population, will start once more to flourish. Aggregate trading profits over the past few years, notably in 1968, have been very little more than 4 per cent. in relation to assets, a very low standard in comparison with present-day industry.
  Attendances have been falling over the past 10 or 12 years and are continuing to fall. If the decline is to be arrested, the Chancellor must adopt the course embodied in new Clause 19. He must give every encouragement to people interested in the sporting world to visit courses and not just stay at home. I think that I can speak impartially on this matter. I have heard what hon. Members have said on both sides, and I have read a little on the subject. I am greatly concerned when I see sports which are good for the public folding up almost overnight simply because those responsible have not given due consideration to the problems. The hon. Member for the City of Chester said that the racing is the
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  second largest spectator sport, in spite of dwindling attendances. It is in great jeopardy now, and action must be taken either at once or in the very near future.
  I give wholehearted support to the Clause because it provides that advantage could be given to on-course betting as compared with off-course betting. A man who is prepared to go to the course and watch the sport is really interested, he wishes to be entertained at a sporting event where one finds no hooliganism, at which one can spend two or three hours in good pleasure and enjoyment of a good clean form of racing. Such a purpose can do nothing but commend itself to the House as a whole. I am sure that other hon. Members will support it and urge the Chancellor to help a sport which is now in jeopardy.
  There are those who have said scathing things from time to time about horse racing and greyhound racing. As a regular churchgoer, I say at once that I have attended this sort of sport in various parts of the country. I am convinced that it is a sport which can readily be recommended to anyone not familiar with it. It is my hope that the Chancellor of the Exchequer will give due consideration to what is urged upon him so that a sport which is good for the public can be maintained and encouraged.
  Earl of Dalkeith: It is unusual to find an atmosphere of such harmony and peace prevailing in the House. I warmly support everything said so far in commending the new Clause, including the two speeches of considerable good sense which we have heard from the benches opposite. I had thought that the hon. Member for West Ham, North (Mr. Arthur Lewis) would lead for his own side, but perhaps he will wind up. I hope that he does, because we can expect a favourable answer from him.
  Mr. Arthur Lewis: Fortunately, or unfortunately, I am not the one who decides which Members should be called. Otherwise, I should probably have called myself first.
  Earl of Dalkeith: Perhaps the hon. Gentleman will wind up for the Government, in which case we can rely on him for the right answer.
  I support the case which has been made in respect of horse racing, but my

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  primary concern in this debate comes from my first-hand knowledge of greyhound racing in my constituency. Because of the problems facing greyhound racing which are daily becoming more plain, and because of the anxieties which I have on that account, I add my voice in an effort to persuade the Government to heed the arguments put in support of the Clause.
  The declining profitability of greyhound racing is now so serious that it could easily lead to the closing of many excellent establishments. This is no mere repetition of arguments which have been put forward year after year. The warning has been given year after year, but now it must be heeded if some important tracks are not to close. There have been references to the law of diminishing returns. The Chancellor must pay regard to that, but it is not the principal standpoint from which I argue the case.
  A community of the size of Edinburgh —there are countless others of the same sort of size—deserves to have a high-quality stadium of the kind which we have at Powderhall. If there were not such an establishment already there, a strong case could be made for one to be built, and, what is more, I have no doubt that a request could be made to the Minister for Sport to provide a grant to assist its building. When we have a track such as Powderhall in existence and contributing so much to the life of the city, it would be a tragedy if we sat back and allowed it to die. That would be bad enough, but if the Government reject the new Clause they will do something even worse; they will deliberately run the risk of directly killing tracks such as Powderhall.
  It can be argued that there are other factors which contribute to the decline in attendances, but these are not matters over which anyone has immediate control. The pool betting duty, on the other hand, and the manner in which it is levied is in a different category; it can be adjusted at the will of the right hon. Gentleman. In considering what to do, he must ask himself the simple question: is it desired to allow greyhound racing to survive, or is it intended that it should be killed? It is as simple as that.
  We are not asking for State aid for a non-viable industry, as happens from
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  time to time, and as I may do on occasion in regard to certain sectors of farming. This is a totally different matter. It is a case of asking that a penal provision which is preventing a venture from being an economic success should be removed or alleviated. When it is in respect of a venture giving pleasure to countless thousands, the Government would be sensible to listen to this plea.
  For many years greyhound racing has been unfairly discriminated against as compared with other sports. The rates of duty have been varied from time to time to take account of the circumstances. This means that the Government are not being asked to depart from precedent. They are being asked to accord with precedent in accepting the Amendment.
  There is no reason why the Inland Revenue should suffer any loss from the sort of adjustment envisaged to the rates affecting on-course and off-course betting. It could put the law of diminishing returns into reverse and result in a gain, which would be to the nation's advantage.
  It might be held that by lowering the rates on on-course betting and increasing the rates on off-course betting we should be unfair to those who have betting shops and the like. But in the long run if greyhound racing collapses because of the taxation burden those who own betting shops will stand to lose as much as, if not more than, anybody else. Therefore, I do not think that even from their point of view the change would be unfair.
  One significant feature of today's debate compared with previous debates is that previously these points were generally speaking, put forward from the greyhound racing lobby, but this year we have been joined more strongly than ever by the horse-racing fraternity, and it is excellent that we should see this unity.
  The situation in my constituency is particularly worrying, because one of the reasons for the decline in attendance at Powderhall is undoubtedly the savage squeeze on the pockets of Edinburgh people because of the incomprehensible way in which the Government are treating Edinburgh in the matter of development district status. I shall not enlarge on that, because I suspect that I should be out of order.

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  If the Government ignore our plea and Powderhall dies as a result, I shall make it my business to ensure that it is as widely known as possible that the reason for its death was the Government's failure to listen to this elementary, simple and straightforward Amendment. I might even go so far as to erect a memorial tombstone engraved with words such as, "Powderhall: murdered by Roy Jenkins".
  6.15 p.m.
  Mr. Arthur Lewis: The hon. Member for Edinburgh, North (Earl of Dalkeith) began his speech by making a remark about my activities and speculating on why I had not spoken earlier. The real reason was that I wanted to hear one of the best speeches this afternoon, which came from the hon. Gentleman, and so I had to wait until he had spoken.
  It is right to say that I have expressed interest in this subject for nearly 21 years now. I well remember how on this and similar subjects I was the lone voice in the early days, and almost everyone in the House was against me. It was then thought infra dig to speak here on behalf of greyhound racing. In those days I was disparagingly referred to as the spokesman for the dog-tracks. In view of my rather slim figure, I did not have to declare an interest in dog tracks then, and I do not have to do so now.
  I am glad to see the hon. and gallant Member for Wembley, North (Sir E. Bullus) present. He and I started to take an interest in the matter because it is not only a question of greyhound racing. Some of our greatest sports have been developed and improved because of greyhound racing. We should all like to obtain tickets for the Cup Final, although we are not always successful. Wembley Stadium would not be in existence but for the money it was able to earn from greyhound racing, to keep it ticking over ready for those odd days when it presented the Cup Final and other football matches. One finds the same sort of thing all round the country.
  I think that the hon. and gallant Member for Lewes (Sir T. Beamish)—a marvellous name for a constituency—has had to leave the Chamber to go to a meeting. But I am sure that he will not mind my speaking about his interest in greyhound racing. He is a director of the Greyhound Racing Association, the
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  largest greyhound racing organisation. I have no connection with it, although I know some of its directors, and on a few occasions I have been to the Greyhound Derby. I think that the right hon. Member for Enfield, West (Mr. Iain Macleod) was lucky enough to go to the last one. I do not know whether he was lucky, but he went. He probably was lucky. I hope that he was.
  Mr. Speaker: Order. I hope that we shall not be too discursive in this debate.
  Mr. Lewis: I am trying to explain why it is essential that we should have a differential in the on-course and off-course betting tax. I am sure that White City, which is one of the Greyhound Racing Association tracks, and which puts on the Greyhound Derby, makes quite a lot of money out of that venture. It is from such ventures that it has been able to help athletics, the Horse of the Year Show, and the like.
  I here declare an interest. I was one of the original Members to press the Treasury to impose fair taxation on all forms of betting, gambling and gaming. A former Chancellor paid a tribute to me when he introduced the taxation on horse-racing. But I emphasise that what I wanted to see was a fair system of taxation. I agree with the noble Lord the Member for Edinburgh, North that for years greyhound racing was discriminated against. It paid the 5 per cent.—originally 10 per cent.—Tote tax, and horse-racing got away scot free. Now there has been some levelling up, but there is still the difficulty and unfairness that many big tracks are having to close down or, as in the case of White City and some of the others, to sell off some of their property for development, and/or reduce the size because there is a falling off in the number of supporters going to the tracks. One of the reasons for this is that people find it much better and easier not to pay to go to the track but to bet at the off-course betting shop.
  Here I declare an interest, and shall speak against my own interests. I have the dubious honour of having in my constituency the largest number of betting shops in any borough in the country. West Ham, Newham and East Ham together have the largest number of betting shops of any town in the country.
  should like to see fewer betting shops everywhere. We could do this by

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  trying to channel back to the tracks some of the money now going into betting shops. If we could achieve this, the Treasury would, in my belief, get a bigger return and there would be more money for the promoters—the same argument applies to horse racing—to develop not only greyhound racing but to help improve track facilities and make them more attractive to the public as well as to help in the development of other sports, such as athletics, tennis, cricket, swimming and football. All of these have been helped in the past because of the money being spent at the tracks.
  Wing Commander Sir Eric Bullus: Does the hon. Gentleman recall that the late Sir Arthur Elvin used to point out regularly how much the Olympic games held at Wembley owed to the fact that greyhound racing was successful at Wembley, and that this had advantages for other sports as well?
  Mr. Lewis: I am glad to be reminded of that, and the hon. Gentleman is quite right. Strangely enough, it was because of greyhound racing that Wembley became an internationally-known place through its association with football and the World Cup. There would have been no Wembley Stadium at all had it nor been for greyhound racing there.
  There is the question of the law of diminishing returns. I am all in favour of getting as much money in taxation from betting, gambling and gaming as it is possible to get reasonably without killing the sport. Someone reminded us in a recent debate on this issue that we must not kill the goose that lays the golden egg but that is precisely what has been happening over the years. Indeed, the Government have killed the goose in one instance. They have killed the whole return on income from fixed-odds betting.
  One of the biggest bookmakers in the world—indeed, it is claimed to be the biggest—is William Hill. William Hill himself has been a Socialist all his life and a very good and active one. He has had to finish up his fixed-odds betting in football pools and horse racing because taxation has killed it. That is the sort of thing happening now. Because of the unfair method of taxation, we are killing the sport.
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  New Clause 19 would mean that there would be a differential between the tax on those who go to the tracks and the tax on those who bet off the tracks. If a person knows that he is going to get better odds at a local betting shop, he will go there and will not incur the expense of travelling to the track and paying the admission charge and programme charge. Does my right hon. Friend the Financial Secretary to the Treasury want to make a witty remark, because I should like to hear it?
  Mr. Harold Lever: Later.
  Mr. Lewis: Very well. I believe that what I have explained is what is happening to most tracks in the country. My hon. Friend the Member for Normanton (Mr. Albert Roberts) mentioned Wimbledon. I have been there a number of times in his company. It is good spectacle and it is a first-class track where one can take one's family. If the tracks find that their competitors in the betting shops are privileged in relation to taxation, it is no wonder that the chances are mounting that the tracks will be taken over or closed down, because people can make a better return for shareholders out of property development than out of greyhound racing. I cannot see why the Treasury should not accept new Clause 19 and why it would not be advantageous to the Treasury if it was to allow a differential to on-course bookmakers so that money was encouraged to go to the track.
  Such a course might, in the long run, have the effect of closing down a few unnecessary betting shops, which is what I want to see. In my constituency, there is a betting shop in almost every street, and this is quite unnecessary. If we encourage people to go back to the tracks, we could close down some of the less necessary of these shops. There would, therefore, be an advantage from that point of view as well as from the point of view of the development of sport generally. I ask my right hon. Friend to give favourable consideration to new Clause 19 and having a differential between on-course betting and off-course betting, whether it be on horse racing, greyhound racing or anything else. It would be to the advantage of all concerned.
  Mr. Eldon Griffiths: The most remarkable feature of the debate is the unanimity of opinion from a great variety of sources in the House. I support new Clause 19, so ably moved by my hon. Friend the Member for City of Chester (Mr. Temple), for two reasons, one particular and the other general. The particular reason is that I have in my constituency the horse-racing capital of this country and possibly of the world—Newmarket. There we have many thousands of splendid horses and some thousands of splendid people who look after them, train them, race them and sell them. I am, therefore, most anxious to do anything to assist the racing industry.
  In Newmarket, we have a number of bookmakers—although perhaps not so many as the hon. Member for West Ham, North (Mr. Arthur Lewis) has in his constituency. I know many of them well. There is no more cheerful, hard-working and, at the moment, hard-pressed section of the community. I am sure that new Clause 19 would be of material help to them.
  My general reason for supporting new Clause 19 is the very high rate of taxation, and especially the high level of taxation on on-course betting. This is damaging to the racing industry as a whole and is a serious matter nationally, because racing gives great pleasure to very large numbers of our fellow citizens. It provides the Inland Revenue with a substantial amount of money which it would find difficult to obtain from other sources, and racing is a strong earner of foreign exchange. It is, therefore, important that the good health of racing should be recognised by this House.
  6.30 p.m.
  I am fortified in these conclusions by the Benson Report, paragraph 60 of which contains these words:
  "There is insufficient money circulating in the industry to maintain or improve the present standard of racing; to match competition from overseas; and to maintain the bloodstock industry."
  I ask the Financial Secretary to note these wise words:
  "In consequence, the racing industry in this country is deteriorating and it is losing ground as compared with racing in overseas countries."
  The next paragraph underlines the case:
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  "Recent increases in taxation have placed exceptional burdens on the racing industry which are greater than those borne by other industries."
  The Benson Report gives further support to the new Clause by showing how drastically attendances at racecourses, where on-course bookmaking is general, has been falling. In 1958 the total attendances at flat and national hunt course meetings was 8,100,000; by 1964 it had fallen to just under 7 million; it is now barely over 6 million. There has been a decline in attendances at racecourses from well over 8 million to a little over 6 million during the last ten years, and this is a serious matter.
  I do not say that the betting tax or the absence of a differential are the only or even principal causes of this decline in attendance. There are many other factors such as the weather, traffic, the habit of watching racing on television and the fact that we still have far too many race tracks, but I have no doubt that the betting tax, and particularly the absence of a differential between on-course and off-course rates, is the largest single factor in pulling down racing and the bookmaker.
  I draw from two respected commentators in the British Press these comments; first, from the Guardian, where Mr. Richard Baerlein wrote this on 13th March this year:
  "If the Chancellor does not agree to a reduction in the tax on on-course betting, then course bookmaking is finished, and racing will take one further serious knock—a knock which could easily end in a complete k.o."
  To go to the other side of the political spectrum, to the Daily Telegraph, the racing correspondent said this:
  "Without doubt the biggest factor contributing to the fall-away in attendance…is taxation. The initial impost of 2½ per cent. in October 1968 rocked an already shaky industry back on its heels. The subsequent double-up in March last year may have been the final blow."
  These are not my words, but the words of intelligent commentators who have at heart the best interests of the industry.
  The figures make the case overwhelming. The on-course turnover has fallen from £133 million in 1967–68 to £103 million in 1968–69. That is a fall of 22½ per cent. over the last 2½ years. Since then the position has deteriorated. In spite of a late Easter this year and nine

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  more fixtures, which incidentally put off-course betting up by 9 per cent., there has been no effect on the accelerating slump in on-course betting. In April of this year, the last month for which I can obtain figures, on-course betting fell by another 10 per cent. to £458,000, and this figure is not enough to keep body and soul together in the bookmakers' fraternity. Comparing January, February and March of the financial year 1967–68 with the same three months of this year, the on-course turnover fell by more than 40 per cent. As I have said, there may be other factors, but the absence of a differential between the tax on on-course and off-course betting is the main factor in bring this about.
  I would like to give one or two specific examples, more eloquent than all the arrays of figures. In Tattersalls Ring at Epsom this year the number of bookies attending has fallen very dramatically. Whereas ten years ago on average there were not less than 75 bookies in Tatter-sails, today there are seldom more than 60. It is the same in the Silver Ring, down from 33 to 24, and Langlands, down from 23 to 10. The average number of bookmakers on our racecourses on any racing day in 1959 was 145. Last year it was 90, and this year it will be down to little more than 80.
  The Financial Secretary will have all the evidence, but if he will examine the charts drawn up by the British Bookmaker, he will find in the sharp decline in bookmakers' attendances in racecourse enclosures that there was a steady downward trend, but just before the introduction of the 2½ per cent. tax. it had levelled out. The tax was imposed and there was a further sudden drop. When the tax was increased to 5 per cent. there was again a precipitate drop. The Financial Secretary can place no other interpretation on these figures than that which has been given this afternoon by my hon. Friends.
  I wish to mention one or two other individual cases because bookmakers are individuals like the rest of us. Last January at Newbury one bookmaker who has many regular customers took, not made, only £213 from six races. Another bookmaker provided the Customs and Excise forms which showed that all he could gather during the entire proceed-
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  ings was a miserable £7. At Nottingham another well-known bookmaker, Mr. Norman Fogg, kept his records and sent photostats of them to Lord Wigg. The records showed bets placed with him of 10s. on the first race, two guineas on the second and 2s. on the third. Mr. Fogg, after that, went home, and after paying his staff and his betting tax, which admittedly was not very much, he estimated that his net loss for that day was more than £20. This may be an exceptional case, but Mr. Fogg's experience as a bookmaker is by no means untypical these days. The average bookmaker in Tattersalls Ring nowadays pays £12 for his betting badge, £3 for his own entrance fee and a further £9 for the entrance fee of his three assistants. He also pays 10s. to the Bookmakers Protection Association, 7s. 6d. for his racing lists, and 10s. or more, when the Bill is passed, for his S.E.T. The outgoings of an average bookmaker on an average day add up to not less than £26 or £27.
  What about his income? To give reasonable odds the bookie has to keep his gross profit down to about 10 per cent. If he takes, say, £1,000 in bets, which is a realistic figure, he can expect to make £100 gross. From his £100 gross he must first deduct the £50 tax—5 per cent. of his £1,000 turnover—and a further £25 7s. 6d. for his other expenses which I have indicated. From the remaining £24 12s. 6d. he has to pay the wages of his three assistants, his travelling expenses, and buy his food. And all this on not a bad day at one of our normally quite popular meetings. There is very little in it for the on-course bookmaker. The off-course bookmaker does not have to meet these many charges. The case which has been made out is quite overwhelming and is unanimous.
  I want to put two final points to the Financial Secretary, because there are other considerations in the matter of differential. The first point is that there is no doubt that it stimulates tax avoidance. The second is that it weakens the Government's own long term prospects of keeping up their revenue from the betting and race course industry.
  On the matter of the positive encouragement of tax avoidance, I would refer to a most excellent article which appeared in the Daily Telegraph of 6th April and

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  was republished in the Sporting Life. The article said:
  "…people are getting together in clubs to bet illegally. In the sporting papers one can often see advertisements for clubs with 'tape and blower services available': these are often places where big backers can go, get odds direct from the course and bet on an undeclared book. Sums change hands in these clubs which would scare the course silly."
  Here is tangible evidence of sizeable tax avoidance, and I suspect the Financial Secretary has included Clause 53 in the Bill in part because he is aware of this growing problem.
  It seems to me that the Government are in danger of damaging their long term prospects of revenue. A collapse of the on-course betting market—and such a collapse is now possible—would imperil not merely the whole betting market, because it is the on-course bookie who makes that market, but it could, perhaps more easily than the Treasury realises, put at risk off-course betting and with it the entire racing industry.
  Last year revenue received from the betting tax was over £54 million. That is a very large sum indeed to put at risk through over-taxation. I submit that the Chancellor is being greedy. He wants to have his cake and eat it, and he would be wise to accept the arguments put forward this afternoon. Perhaps the best answer would be to reduce the tax overall. But he will not, of course, accept that. However, he ought to give some relief to the hardest pressed section and the section which makes the bookie market, that is to say the on-course bookmakers. It is a choice between those who go to the tracks and those who sit at home. For the benefit of the industry as a whole, for the benefit of the revenue and of lawful taxation, it would be in the interests of the Chancellor of the Exchequer and of this country to create this differential and to do it today.
  6.45 p.m.
  Mr. John Ryan: I intervene briefly in the debate to urge the Financial Secretary to accept the new Clause. I intervene with some hesitation because I have no particular constituency interest. My hon. Friend the Member for West Ham, North (Mr. Arthur Lewis) described his constituency in a way that would almost make an ideal sating for some escapade by Damon Runyon. However, I have no such problem in my own constituency.
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  I intervene because I feel that the Financial Secretary ought to consider the many social implications in the present arrangements for the taxation of betting. It is the experience of those of us who represent urban areas that the legislation and licensing of betting shops removed one of the grosser evils, namely, the street bookie and the attendant petty crime and illegal activity that surrounded him. I felt that this was a great step forward.
  We are now getting to a point when we face situations such as exist in my own constituency at London Airport where illicit betting is taking place. The tax is being avoided by the operation of syndicates within the airport. This is a most retrograde step and is extremely difficult for the police to deal with. People will not give evidence against their workmates and they will not jeopardise family connections which they feel are providing a service. In the general context of the betting tax, we may well be reaching a situation of diminishing returns. In the social sense, we seem to be bringing about an increase in illicit betting which is what originally we have sought to avoid.
  I close by mentioning the differential tax suggested as between on-course and off-course bookmakers. There is a strong element of moral overtone to this debate. Many people regard bookmakers as people who get a living out of racing. A bookmaker takes more out than he puts in or he would not stay in business. If one accepts this situation, then there is a differential input between the bookmaker who goes to the course and the bookmaker whose transactions have no place on the course.
  If the Financial Secretary accepts the new Clause, he would conform with other aspects of the Government's policy in regard to tourism. Our racing is the admiration of the world. The decline of on-course betting is an integral part of the general problem of attendancies at race courses. It is a problem which should be put right not only in the interests of racing but in the interests of tourism. With those few words, I would ask my right hon. Friend to accept the new Clause.
  Mr. Harold Lever: This has been an impressive debate for the unanimity of opinion in support of the proposal in the new Clause. I shall indicate right away

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  that the Chancellor has always had firmly in his mind many of the considerations which have been pressed upon us today in argument. I know that at this stage of the Finance Bill it is high season for geese laying golden eggs, although I do not recall any occasion which has been as roughly treated by my hon. Friend the Member for West Ham, North (Mr. Arthur Lewis) in his brief intervention. I take the point that one must take care in the imposition of the duty that one does not go into the famous area of diminishing returns. We have not done so in spite of warnings.
  Many people seem to feel that the market is in danger unless the Chancellor makes a sharp differential between the on-course and off-course bookmakers. Nobody has mentioned that for the first time this year a differential is made between the two. The Chancellor has imposed a duty on off-course bookmakers, for which he has exempted on-course bookmakers, in the form of a rateable value duty charge. For the first time there is something approaching a 1 per cent. differential between the on-course betting duty and the off-course betting duty which will reflect marginally to the advantage of the on-course bookmaker.
  Those who advocate making this concession have rather overstated their case in believing that it will reverse a trend which has been going on for many years. Long before there was any duty on horse racing there was a decline in attendances at meetings. Many hon. Members have recognised that it was going on long before the duty on horse race betting was introduced. I notice that my hon. Friend the Member for Normanton (Mr. Albert Roberts) is present. He is both a churchgoer and racegoer and is probably in a position to know from both his attendances that they tend to decline even when they are not taxed. There may be a long-term trend in one direction which only the changing psychology of people will alter after an interval of time.
  Earl of Dalkeith: It is true that attendances at greyhound race meetings have been declining for some time, but greyhound racing has been singled out for discriminatory taxation for many years, and it is still continuing.
  Mr. Lever: The noble Lord is wrong in supposing, as he implies, that greyhound racing attendances declined because they were singled out for taxation over many years. That is not so. Horse racing attendances declined in the same way although they were not subject to tax. In fact, horse racing was given a differential advantage over greyhound racing in which greyhound racing was heavily taxed and horse racing was never taxed. Nevertheless, both attendances declined together.
  Hon. Members have to be candid with themselves. The attractions of colour television and the tendencies of family life these days all have an effect on attendances at race meetings, taxed or untaxed. I will not go into all the social philosophising which goes on about the recreational aspects of our lives, but all have an effect.
  We shall brood carefully over everything that has been said, and we shall watch to see whether any of the dire consequences on the market develop. We are concerned at the warnings of hon. Members about the danger of the growth of illegal betting. This becomes very important. I know that when we have discussed the betting tax on previous occasions some hon. Members have tended to think that the rates were very low. I think that that is because they do not understand the weight of this duty on a turnover of the betting kind.
  My right hon. Friend the Chancellor of the Exchequer is aware of these problems, and we are keeping a close watch on the situation both from the point of view of preserving the market on-course and from that of preserving the duty.
  Mr. Arthur Lewis: I am grateful for my right hon. Friend's promise, but can he given an assurance that in keeping a watch on the situation he will not do it to the extent that it was done in the case of fixed odds pools on football and horse racing, when it was watched for so long that that form of betting went out of existence?
  Mr. Lever: I cannot remember promising to keep an eye on fixed odds pools—
  Mr. Lewis: I meant the Treasury not my right hon. Friend personally.
  Mr. Lever: My hon. Friend is raising a different point where a duty was fixed

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  in relation to an activity, and it was brought to an end because the duty was so high. Whether justified or not, that is a separate question.
  While I have to reject the proposals which have been put forward, I assure the House that we shall take fully into account all the matters which have been pressed upon us. The remedy proposed by the Clause will not really achieve the great and dramatic ends urged by its advocates.
  Mr. Eldon Griffiths: My hon. Friend the Member for the City of Chester (Mr. Temple) or my hon. Friend the Member for Isle of Thanet (Mr. Rees-Davies) pointed out to the right hon. Gentleman that, even if he could not accept the Clause as it stood, it was hoped that he would comment on the principle that there should be a differential for the many reasons which have been put forward.
  Mr. Lever: I have already made one comment about the principle and said that we have brought in a differential this year. It was a matter closely in my right hon. Friend's mind in coming to his decision. I do not say that that is the last word on betting tax, but we have shown already some recognition of the fact that we wish to impose a lighter burden on on-course betting compared with off-course betting. From this year on, there will be a lighter burden on on-course betting. But certainly we shall keep in mind the other point made by the hon. Member for the City of Chester (Mr. Temple) about the problems of the market in laying off, placing bets and the like. But I cannot accept the Clause, and I have to ask the House to reject it.
  Mr. Iain Macleod: I am grateful for the support of hon. Gentlemen opposite for the Clause. However, I hope that they will not mind if I express the hope that they have now exhausted some of their eloquence. If they talk one for one with us throughout the Report stage, we shall be here for another week or two. Although that does not worry me, it might worry the Chancellor of the Exchequer and even Mr. Speaker in due course.
  I agree with much of what the Financial Secretary has said, though I do not
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  think that he can base any part of his case on the fact that by the betting premises licence the Government have introduced a sort of Irishman's rise in a differential by taxing even more savagely those who do their betting in shops. That is not relevant to the point with which we are concerned.
  I want merely to emphasise two matters, and I do not intend to ask my right hon. and hon. Friends to divide the House on this Amendment.
  First, the right hon. Gentleman said that he would look carefully at the evidence that there are some signs, not yet formidable but beginning to be seen, of an element of illegal betting coming back. Naturally, at this time of the year I get an enormous postbag, and there is clear evidence from many different parts of the country that the runners are again going into the factories and that men are again standing on street corners. This would nullify much of the work which both sides of the House have tried to do over recent years.
  The second and only other point which I wish to make is to emphasise to the Financial Secretary the key importance for the health of racing of a strong on-course market. Although overwhelmingly the weight of betting is off-course, the prices are determined entirely by the betting that is on-course.
  I will not go into the details of how it is done. I did that in the debate on a similar Amendment a year ago. It depends on the absolute integrity of two racing journalists taking the prices that are ruling on the rails at the moment of the "Off". Those prices are accepted at once and without question not only in this country but all over the world. The health of racing depends to a great degree, therefore, on whether the on-course market is sufficiently strong.
  I am closely interested in these matters, and I have studied the Benson Report carefully. I do not agree with all its findings, but I believe that there are only two possible solutions to the sort of situation which we have now. One is a Tote monopoly and the other is a strong on-course market. I know the arguments for a Tote monopoly, but I do not want to see it. I like the pattern of racing that we have. I prefer the participation of the bookmakers.

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  That pattern of racing needs a strong on-course market. If the market is desperately weak, and the tail is wagging a very big dog because the prices returned influence many millions of pounds in the betting shops and, indeed, all over the world, it is easier to rig it. It follows that, with a very weak market, a comparatively trifling amount—£200 or £300 —sent back through the blower on to the courses could give an entirely artificial return and, therefore, although in a perfectly open way, could rig the market. If that on-course market is strong, £200 or £300 would be nothing. Nor would £2,000 or £3,000, for that matter. It would be absorbed. On a really strong market like Epsom on Derby Day or a Royal Ascot meeting, the market cannot be rigged because the money is too strong.
  7.0 p.m.
  What concerns us, and I am sure that it concerns the financial Secretary, is that in the ordinary day's humdrum racing, as my hon. Friend the Member for the Isle of Thanet (Mr. Rees-Davies) said, there has been a fall of about 20 per cent. in the attendance of on-course bookmaking. This has reflected itself in turn in the weakness of the market, and this lays the way wide open to undesirable possibilities.
  I draw these two points seriously to the attention of the Financial Secretary, who has shown that he is aware of them. I believe that the principle is right. The money is not very large, but I think that there ought to be a clear differential between the tax on on-course betting and the tax on off-course betting. I hope in a not-too-distant future Budget that will come about.
  The Financial Secretary has shown himself to be well aware of the matters which have been pressed from both sides of the House. Therefore, I am content that the new Clause should be negatived.
  Question put and negatived.
  Mr. Speaker: Perhaps it is convenient to remind the House that we have ahead of us, in the two remaining days on Report stage, 40 debates at least. Therefore, reasonably brief speeches will help.

New Clause 31

  LIABILITY OF CHARITABLE DONATIONS TO DUTY
  For the purpose of any assessment to pool betting duty made after 5th April, 1969, the proviso to section 7(2) of the Finance Act, 1964 (which exempts the amount of certain charitable donations from the charge to pool betting duty) shall be read and construed as if the last fourteen words thereof had never been enacted.—[Mr. Higgins.]
  Brought up, and read the First time.
  Mr. Terence L. Higgins: I beg to move, That the Clause be read a Second time.
  Mr. Speaker: I suggest that with new Clause 31 we take new Clause 34—"Liability of charitable donations to pool betting duty"—and new Clause 45—"Pool betting duty—charitable exemption".
  Mr. Higgins: New Clause No. 31 is designed to protect the existing position of a number of charities concerning their liability to betting duty on pools which they run for charitable purposes.
  Most new Clauses and Amendments on Finance Bills fall into three categories: a point of substance, what is normally described as a probing Amendment, or perhaps a drafting Amendment. New Clause No. 31 has something of the element of all three. It most certainly includes an important point of substance, on which I hope we shall get a sympathetic reply from the Financial Secretary, because it deals with a serious matter concerning a number of large charities in this country.
  It is also a probing Amendment, because it seeks to clarify the existing law on the liability of these charities to betting duty.
  It is also a drafting Amendment, because we seek to put forward a form of words which will remove any possible doubt about the liability of a charity to betting duty on that part of its contribution which goes directly from the contributor to the charity.
  I stress that I am not necessarily wedded to the particular wording of new Clause No. 31. It may be that the wording of new Clause No. 34 or new Clause No. 45 may be preferable. It seemed that this was a matter of such urgency

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  that we should try a number of different formulations in the hope that the Government would find that one was precisely right and could be accepted as it stands. On Report stage of a Finance Bill, if the wording is not right there is no subsequent occasion in another place where we can get it right. Therefore, we thought it worth while having three attempts at the wording in the hope that one might be acceptable to the Government. I cannot believe that the Financial Secretary, if he is to reply, will not feel able to accept one of these new Clauses.
  The purpose of New Clause No. 31 is not to reverse a decision of the House of Lords in a particular case concerning the liability of charities to pools betting duty, a decision which was made at the beginning of July. However, it will be helpful to spend a short time spelling out some of the points involved in that case, because this will bring me to the main point at issue in the new Clause.
  The effect of the recent decision of the House of Lords has been severely to reduce the amount of money available to a number of charities—in particular the Spastics Society. Indeed, the sums involved are very large—about £900,000.
  The course of this case has been described in various newspaper reports. Essentially what happened was that in the 1964 Act an attempt was made by my hon. Friend the Member for Farnham (Mr. Maurice Macmillan), under the Chancellor of the day, to tighten up the law concerning tax-free pools expenses. The aim was, as far as any shilling stake was concerned, to try to include 7½d. of that stake. Effectively, a number of charities then divided their operations into two separate companies. They felt that in this way they would be able to escape the full impact of the duty on that part of their operations which would normally have been taxable. They still, however, were certain in their minds that the 2d. contribution which the charity received, as against the contribution which went into the pool, would be on perfectly safe ground.
  The House of Lords, after a four-year legal battle, has now decided that the pools company operating on behalf of the charity shall be liable for 10d. out of every shilling, as far as the duty is con-
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  cerned, not merely 2½d. As a result, about £900,000 has been lost.
  This is relevant to the point which I wish to make now, in the sense that it clearly is a severe blow against one of the major charities in this country. Not only is it a blow against that charity, where the revenue from its pools operations contribute about half its total income, but it is also a blow against a number of smaller charities which depend for an important part of their revenue on such pools.
  National Spastics Week took place the week before last. I, in common with many other hon. Members of this House, attended some of the functions taking place in that week. The general attitude of the voluntary workers organising the events on that occasion to raise sums which, while significant and very good, were small compared with the sum that I have just mentioned, were incredulous that any Government should feel it right to pursue this tax in the way that they have. I make no comment on that, because it is not within the scope of the new Clause. None the less, there is a grave danger that we may discourage voluntary work in this sphere, which is very important.
  The point at issue, in the light of the situation that I have just outlined, is that there is now some doubt whether the Spastics Society and the pool which is operated on its behalf and on behalf of other charities will be liable not only to the duty which I have already described but also on the 2d. in the shilling which is an actual donation to the charity itself.
  It should be made abundantly clear that this was not the intention of those who tightened up the legislation in this general field in 1964. I want to quote briefly from a letter written by my hon. Friend the Member for Farnham to the former hon. Member for Bristol, North-West. He stated the position very clearly when he said:
  "This means that of the 1s. paid weekly by entrants only the 2d. donated by them to charity will not be chargeable with duty."
  There is now some doubt whether that 2d itself is not in some danger. That is why we felt it right to table this set of new Clauses.
  I should explain why some doubt has arisen in this matter. Following the

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  result of the High Court case the spastics organisation responsible for running the pool received a letter from Her Majesty's Customs and Excise dated 15th May, saying:
  "I am directed by the Commissioners of Customs and Excise to refer to your letter of 11th March and to acknowledge receipt of your copy of the rules of the Spastics League Club, which are enclosed. I am to inform you that duty is payable on a donation unless a rule can be shown which indicates that it is made voluntarily."
  That indicates that the Inland Revenue intends to pursue this matter still further and to take into tax even the donations made to the Spastics Society at the moment.
  We felt that the House would not wish to see this happen and in order to put the matter beyond any doubt we have tabled these new Clauses in a spirit of some urgency, because this is an important and considerable matter. If the 2d. in the Is. were to become taxable at the duty of 33⅓ per cent. the sum involved for the spastics would be about £500,000. It would have £500,000 less to spend in doing its work of helping spastics. If the issue were taken back to the 1964 Act the loss that the society would suffer as a result of the point that I have just mentioned would be £2½ million. Again, its work would be inhibited to that extent.
  It is not necessary for me to describe in detail the tremendous amount of good work which this charity—like many others affected by this point—carries out. Many hon. Members will have had experience of it in their own constituencies. It is not simply a question of certain groups being affected—for example, spastic children, for whom we have a tremendous amount of sympathy; it is also a question of adult spastics, and especially their employment and training. Here again, the society does a great amount of good work.
  The essential point to be made is that neither local authority help nor National Health Service help is adequate to deal with this problem. In many cases the National Health Service does not provide adequate facilities. The Daily Telegraph, in an article published on 12th July, pointed out that the £900,000 loss was likely severely to curtail the training of 6,000 young spastics, and that the loss of £500,000 would probably bring the
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  spastics' plans to a halt. Yet most local authorities have facilities to train only mildly afflicted spastics. Many of these people are subnormal. Out of the 100,000 spastics probably about 40,000 are subnormal. Of these about half are severely subnormal. Local authorities can seldom make any provision to help them, and the facilities available are simply inadequate.
  7.15 p.m.
  The Spastic Society carries a burden which neither the National Health Service nor local authorities are carrying. This is a matter of tremendous importance in terms of human happiness. Even now the Spastics Society can help only about 20,000 out of the 100,000 spastics. There is a tremendous need for expansion. For that reason it seems totally wrong that on top of the set-back that has already been caused by the House of Lords' decision the society should feel that there is some danger of its plans virtually being stopped dead in their tracks.
  The problem is not simply one of help for children and adults; much research is carried out. About £300,000 has been spent on fundamental research to help spastics. Over 100 social centres for spastics have been provided by the society, which makes it one of our major charities. I do not wish to go into details of these cases; they are sufficiently familiar to the House.
  My argument is threefold. First, if this doubt is not cleared up it will severely affect the morale of the voluntary workers, who do a tremendous job. Secondly, there seems no doubt that the 1964 Act, as originally drafted, was not intended to lead to a situation in which the 2d. donation to the charity was taxable. There is no question, in any sense, of the Government's losing revenue; it is simply that they will not get extra revenue that they did not intend to get and did not expect to get, and which I hope the House will feel they should not get.
  For those reasons, I hope that the Financial Secretary will find it possible to accept whichever Amendment is best drafted. I find it difficult to imagine that anyone in this House could think of a better use for the money which the Revenue might otherwise acquire than that to which it is already being put by

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  the society. I hope that the House will feel that one of the new Clauses should be accepted.
  Mr. Harold Lever: It may be for the convenience of the House if I rise early in the debate. I am not precluding the comments of other hon. Members. This matter has been widely publicised and even more widely misunderstood. The House of Lords decision was not a decision to tax spastics, or any charity; it was a decision which applied to a commercial firm running pools the appropriate law relating to the pool duty on the operations of that firm in respect of its pool. It had nothing whatever to do with taxing voluntary donations to the Spastics Society or any other charity.
  These voluntary donations are not and never have been liable to pool betting duty. I want to make that absolutely plain. Voluntary donations are not, never have been and—as my right hon. Friend the Chancellor prompts me to say —will never be, as far as he is concerned, liable to pool betting duty. Nobody need have the smallest anxiety about that.
  What was decided by the House of Lords was simply—as might have been decided in relation to any other commercial promoter of a pool—the appropriate rate of pool betting duty, having regard to the circumstances of the pool operation. The amount decided by the House of Lords would have been the same if I or if you, Mr. Speaker—if one can conceive of your taking time for the running of a pool—had been running the pool in a commercial way. This was the appropriate duty. That was what the House of Lords found. It was a duty payable by the pool promoter, calculated in accordance with the provisions of the Act in precisely the same way as is done for every other pool promoter. It was not a duty on spastics.
  It has been said in the Press that as a result of the case the Spastics Society will lose £900,000. We understand that the promoters of the pool had said that if the House of Lords case had gone in its favour it intended to make a contribution of something like £900,000 to the spastics. What that amounts to saying is that if something in the region of £12,500,000 of pool duty had been avoided by the particular operations of this pool, £900,000
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  would have been given to the Spastics Society.
  We cannot, in operating the collection of the pool duty, have regard to what people intend to do if they are fortunate enough to find themselves exempt from pool duty should they carry on operations in a particular way. The respondent, Top Ten Promotions Limited, carried on its operations in a somewhat complicated way, as it was perfectly entitled to do, seeking, and hoping, that the consequence would be that it would be relieved of several millions of pounds of pool betting duty—a very laudable and interesting expectation from its point of view.
  On the other hand, from the point of view of the Revenue it was our duty to apply the law to see if we could collect the duty as we would have collected it from any other person. The fact that this company has been disappointed by the House of Lords decision and that its disappointment will be reflected in a lesser donation to the Spastics Society or any other charitable cause, is not a ground on which we could possibly have held our hand in seeking to apply the ordinary rules of pool betting duty. The House must be clear about this. Charity is one thing and pool betting duty is another.
  This is not the charity operating a pool. Even if it were, it must pay the full betting duty just as any other pool pays it, otherwise there may not be any pool betting duty. Pools will be run exclusively by charities. If the House wants this it can make a solid and coherent decision to this effect. Someone must table a new Clause exempting charities from duty.
  Sir John Foster: We have done so.
  Mr. Lever: The hon. and learned Member for Northwich (Sir J. Foster) tells me that there is a new Clause which totally exempts charities from the duty. That must be new Clause 45, which is being discussed with this other new Clause. What has to be done is to exempt all charities and allow them to carry on pools without paying duty, in which case it is only a matter of time before the other pool promoters would be out of business, because they could not compete with a charity wholly exempt from pool betting duty, as the prizes available to the charity would be vastly

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  larger, and the odds vastly larger than those available to the commercial firms.
  We could equally well exempt them not merely from pool betting duty but horserace betting duty so that any charity could conduct a bookmaking business and be exempt from the 5 per cent. duty. There would soon not be any bookmakers left in competition. Once we exempt them, not from the income tax on profits, but from the duty on turnover, there would not be anyone else operating. It may be very desirable in the interests of charity, but it certainly would wipe out the receipts from pool betting duty.
  I do not want to labour the point unduly but I do want to make it absolutely clear that the House of Lords decision was not one to tax spastics or any other charity. It was not the decision of the Lords or the Revenue that voluntary donations should be liable to full betting duty or to any duty of any kind. These voluntary donations are not, have not been and will not be liable to duty. Anyone who wants to give money to the Spastics Society voluntarily will have our total encouragement and total exemption from any kind of duty. If they want to give it to any other charity too, so much the better. It has nothing to do with the point which has received publicity. What we are asking the House to say here is that when we have a pool betting duty we cannot have exempt persons operating because very soon there will be no one else left and we will have to abandon the whole duty.
  Mr. Higgins: I hope I have made it clear that we were not seeking to over-rule the House of Lords decision in any way. I was merely putting it in that context to emphasise that there was already considerable dispute about this. It would be a very great deal worse if the Inland Revenue, on the basis of the letter I quoted, sought to extend the tax even to the contributions to charities.
  Mr. Lever: I did not allege that the hon. Gentleman said anything unfair or inaccurate. There has been a great deal of newspaper and other comment upon this matter and I was very anxious that the House should know the position about voluntary donations. Where there is a simple voluntary donation to charity, it
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  is not and will not be subject to any form of duty. Voluntary donations to charity and arrangements which appear to give a flavour of voluntary donation to charity but which are not voluntary donations and which result in the avoidance or reduction of pool betting duty, are two different matters. I give in unqualified terms the assurance about voluntary donations to charity.
  Purely voluntary donations have been and will remain wholly exempt from pool betting duty or any other duty. I will not go into all the mechanics of this or the House of Lords decision unless there is some interest in my doing so. The House can rest assured that we are applying pool betting duty in the ordinary way, as the House decided. Unless the House feels, against the advice I have given, that we ought to allow charities to operate without any pool betting duty or with a reduced duty, then the House must reject the new Clause.
  Mr. Higgins: I am merely trying to save time. The right hon. Gentleman has not taken the central point. Suspicion has arisen that the Inland Revenue intends to tax the 2d. voluntary contribution, and the basis for that is the letter I have quoted. It is now insisting that the duty is payable on the donation unless a rule can be shown which indicates that it is made voluntarily. If there is no such rule it may still be made voluntarily and there is a grave danger that this case may be fought for another four years by the Revenue.
  Mr. Lever: I was trying to spare hon Members some of the details. These suggestions are not in accordance with the facts, which are as follows. Around the turn of this year the pools promoters in this case introduced revised rules under which weekly payments went up from 1s. to 1s. 6d. and the charitable contribution was increased to 2·7d. per entrant per week for three weeks out of a four-week cycle. Because of the unusual arrangement it was not clear how a club member could voluntarily make a payment of 2·7d. The position was queried by Customs and this produced, I am sorry to say, an evasive reply from the promoters. As a result the query was repeated.
  Some weeks ago a local Customs officer reminded the promoters that the point was still outstanding and since

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  then a letter has been received from the firm's solicitors. No reply has yet been given to the Customs, but it appears that the voluntary donation has now to be paid, or forgone, together with the club payments, the two together totalling a round number of pence. In these circumstances the voluntary donation will be exempt from duty. No one has to worry his head about what is a genuinely voluntary donation. I do not like to use tendentious language, but if there is no unnecessary complication over the voluntary payment in such a way as to make it clear that it is not a voluntary payment but merely an attempted circumvention of duty, then no problem arises. If someone wants to make a voluntary payment they can do so and it is absolutely free from duty and will remain so. I cannot make it clearer than that.
  Mr. Higgins: There is doubt about this matter. Will the right hon. Gentleman accept whichever of the Amendments he feels will meet the situation?
  7.30 p.m.
  Mr. Lever: I cannot see where the doubt is. I have assured the House that if any purely voluntary payment is made by pool promoters to a charity which is a genuinely voluntary payment to a charity, be it the Spastics Society or any other, in no circumstances will pool duty be collected. What more comprehensive assurance does the hon. Gentleman, or even the hon. and learned Member for Northwich, want?
  Sir J. Foster: Would the right hon. Gentleman point out where the word "voluntary" appears in the Statute? The difficulty has arisen because the Customs have introduced the word "voluntary".
  Mr. Lever: We have accepted that the donations given in the form now communicated to us are exempt from duty. The only thing which can be taxed is, not payments made to a charity, but payments which are contributions to a football pool in such form as to be liable to pool betting duty. If they are not contributions to a football pool and hence liable to pool betting duty they will not be taxed. If they are contributions to a charity they will not be taxed.
  Acceptance of the new Clauses, far from clearing up the matter, would complicate it still further. The present law is perfectly simple. The ruling which I
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  have given seems to me absolutely clear and need not trouble anybody. A voluntary contribution to charity and not a voluntary contribution to a football pool is not liable to pool betting duty.
  Sir J. Foster: The confusion has arisen because of the Financial Secretary's definition of "voluntary". He shied off the question when I asked him where the word "voluntary" appeared in the Statute. He said that anything which was not a contribution to pool betting was voluntary. That may be one way of expressing it, but it makes the whole matter unclear. The Customs say, "If it was not voluntary you must pay". The Statute does not say that. The Customs say, "There must be a rule that this is voluntary." I do not know of charities soliciting donations which say in, perhaps, Rule 82 that contributions must be voluntary.
  Mr. Lever: The hon. and learned Gentleman is far too subtle and too intelligent not to have taken my point. Use of the word "voluntary" is another way of saying that they are genuine. One can make contributions which one has to make as part of the pool itself. They are not contributions to charity but are contributions to the pool which one has to make to participate in the pool.
  Sir J. Foster: I take the right hon. Gentleman's point, but the way in which he puts it only makes the situation more difficult.
  The Customs letter says:
  "…that the duty is payable on the donation unless a rule can be shown which indicates that it is made voluntarily".
  The best rule for showing that it is made voluntarily is that which says that when making a donation the subscriber shall subscribe to a statement on oath before a commissioner for oaths that it is made voluntarily. The letter cannot mean that. Therefore, what does it mean?
  The rule then says that in making donations to the club it must be indicated that on no account must the twopence go to the pool betting promoter.
  Mr. Lever: What the word "voluntary" means—
  Mr. Speaker: I hesitate to intervene. We are on Report, which is rather more formal than Committee. I know that an

  691
  attempt is being made to shorten the debate, but the interventions seem to be lengthening it.
  Mr. Levers: Perhaps I can shorten the debate by pointing out that what we meant by "voluntary" was in conformity with the wording of the 1964 Act, which refers to benefit so provided by means of payments made for the purpose by persons making bets and are not payments without which bets cannot be made.
  Sir J. Foster: That was my next point. The right hon. Gentleman says that the situation must not be complicated by considering whether it is voluntary. I agree that this is a little bit of a tease of the right hon. Gentleman. We want to be clear that when 2d. is sent to the spastics club, although it is sent in the same bundle as the 10d., which goes to the pool promoters, the 2d. goes off that way and the 10d. goes in respect of pool betting. In those circumstances, there is no danger of the twopence being caught. How are people to frame a rule which indicates that a payment is made voluntarily? It is difficult for the Government to say, "Our civil servants made a mistake". If they cannot agree, will they draft a rule about payments not being made voluntarily?
  I hope that the Chancellor of the Exchequer will consider the content of new Clause 45 for next year. The Financial Secretary made a very good argument against pools being run by charities, which would exclude all pools. All that new Clause 45 proposes is that when a charity runs a pool it will have to pay betting duty on the amount which goes to the people who win the prizes, but that the part which goes to the charity will not be taxed. We would not press the point this year because it involves a new principle.
  I should like to deal with the point about 40 per cent. of spastics being subnormal. There is a wonderful documentary film sponsored by the Government which shows spastics during their ordinary lives. The mistake which many people make is to assume that, because a spastic talks with a distorted face and has great difficulty in expressing himself, he is mentally retarded. The point of the film, produced by an organisation called, I think, Samaritan Films, which I hope
  692
  many hon. Members will see, because it is very heartrending, is to depict the lives of two or three spastics. It lasts for about 35 minutes. It shows them speaking normally. That only reinforces the need there is for a great deal of money to be spent on these people quite outside the National Health Service.
  Coming back to the main point, I think that the right hon. Gentleman and we on this side are agreed that the 2d. will not be taxed. We—that is, the Spastics Society—were frightened by this letter from the Customs and Excise that we might have another case going to the House of Lords where it would be argued that the 2d. went in with the 10d.
  Mr. Robert Cooke: I am not entirely happy with what the Financial Secretary has said. It appears that because the past rules of the pool did not comply with what has just been laid down, the Customs and Excise is trying to claw back duty on the 2d. The right hon. Gentleman shakes his head. I only hope that that is true, and—
  Mr. Alexander W. Lyon: He has said it.
  Mr. Cooke: With respect, he has not said it. He has said that it will be all right in the future provided that the rule is all right, but it is the past with which we are concerned—
  Mr. Harold Lever: I have said this more than once, but it does not seem to have got home to hon. Members opposite or to the hon. Member for Bristol, West (Mr. Robert Cooke). I have said that the 2d. is no longer in question. The hon. and learned Member for Northwich (Sir J. Foster) has my point. This has been accepted as being free from any pool betting duty.
  Mr. Cooke: I hope that the right hon. Gentleman's statement means that the 2d. subscribed in the past are all right, because it is about those that we are concerned. It is no good the right hon. Gentleman looking entirely surprised—the whole thing has been quite confusing from the very beginning of the discussion.
  We are happy to know that if the rule is written in the way suggested by the right hon. Gentleman things will be all right in the future, but, as I see it, in the light of the letter which was read

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  out by my hon. and learned Friend the Member for Northwich (Sir J. Foster), there was a chance that the Customs and Excise would try to claw back duty on the 2d. proportion of the money being sent to the pool. We may have to return to this matter again at the earliest opportunity if we find that the Customs and Excise, in pursuing, as the Revenue pursued in the past, the duty on that part of the subscription which is a straight contribution to the pool, is also going after this 2d. contribution designed to help the spastics. I am still not happy about that, and I am not at all sure that my hon. Friends are happy about it either.
  I got the impression from what the right hon. Gentleman said that in order to be absolutely in the clear there had to be a rule which said, "You can enter a 1s. stake in the pool, and 2d. will go to the spastics, but if you like you like you need send only 10d. and provide nothing for the spastics at all." It would seem that the right hon. Gentleman by that rule envisages a right to contract out. People did not seem to realise that they had a chance to contract out in the past, and I hope that it will not occur now. I am not the only person who does not understand this rule: some of my hon. Friends also seem still to be worried about it. Our only hope that things will be all right. If they are not, we shall have to return to this matter at the earliest opportunity.
  Sir Brandon Rhys-Williams: If the Financial Secretary had any idea how much this means to some of the most helpless people in the world, he would not equivocate to the House as he is now doing. I have here the letter of 15th May from the Customs and Excise to Regional Pool Promotions Ltd. It reads:
  "In reply to your letter of 7th March, I am directed by the Commissioners of Customs and Excise to inform you that duty is payable on the donation unless you and Regional Club Organisation Ltd., or either of the two companies can point to a rule which indicates that it is made voluntarily."
  It is difficult for these people to do any such thing.
  If the matter is brought to the courts, the Spastics Society, for whom I had the honour to work some years ago, is satisfied that it can produce an adequate defence, but it has just had the ex-
  694
  pense and anxiety of several years of litigation, and it fears that it may have to face a further action of this kind. Will the Financial Secretary say categorically that that letter was written under a misunderstanding, or will he clarify the point now at issue by accepting one of our three variants, any of which would make the matter quite clear?
  I recommend new Clause No. 34, because it would make it plain that whether or not the Customs and Excise is right in reading this Section in the 1964 Finance Act as it has done, Parliament does not wish this vendetta against the spastics to be pursued any further. I therefore ask him to give us a decision.
  The reason for our doubt is the emphasis which the right hon. Gentleman placed again and again on the word "voluntary". I am certain that the 4 million people who take part in the, pool know very well that the money which is intended for the spastics goes to the spastics; and no doubt they join the pool because they are happy that the money should go to the spastics. They will be extremely concerned if this point is pressed home, and £½ million a year, plus, perhaps, £½ million retrospectively, is taken by the Treasury. I repeat, the Financial Secretary would not equivocate if he had any idea of what this means to some of the most helpless people in the world.
  7.45 p.m.
  Mr. Maurice Macmillan: Perhaps I can clear the ground a little by saying that I accept what the Financial Secretary has said about what happened in the past in the light of the House of Lords decision. I fully accept also that it was the intention that the whole contribution made to charity in the course of pool betting by the public should not be subject to pool betting duty, That being so, I find it difficult to appreciate why the right hon. Gentleman will not accept our new Clause. It seems to me that the terms of the Act as it now stands could well be construed to mean that had the Customs and Excise proceeded with its case it could well have won it.
  The Financial Secretary made great play with the word "voluntary". So did the Customs and Excise in writing to the Spastics Society. But in no part of the Finance Act, 1964, nor in the letter

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  which, in a different capacity, I wrote about the Act, did the question of voluntary contribution come in. It is quite clear from the letter of 9th June, 1964, that the intention was that the whole contribution which went to the charity should be exempted from duty, and nothing else. We accept that.
  The right hon. Gentleman has said that the only way in which one can identify the meaning of the words in the Act about payments made for the purpose of charity by persons making bets was to say that the sums must be defined in the rules of any charitable society as being voluntary payments. Can the right hon. Gentleman reassure the House that the Spastics Society will not have to pay any more duty in respect of these contributions? Here we are not concerned only with the spastics. Does this rule mean that all such contributions are safe? In the course of his argument, the Financial Secretary said that the Customs and Excise had found it hard to believe that any contribution of 2·7d. was charity. It seemed that the argument turned on whether they were the sort of people who would decide in advance to give to the Society.
  We must be certain that when any person takes part in this type of pool betting, where there is a defined prior undertaking that a proportion of the total amount sent each week by an individual goes to a charity, that proportion is deemed to be a voluntary contribution. What makes it voluntary is the knowledge of the society and the promoters and the person contributing beforehand that some proportion of that total stake is irrevocably and irretrievably going to the charity concerned. If that is what the Financial Secretary means, we can be happy about it, but if it means that the burden of proof of a voluntary intent is on either the society or the individual, we are not happy about it.
  My limited experience of Customs and Excise is that the Department is properly reluctant to impose any form of taxation of motive. If it can be said that in this case any bet which goes irrevocably each week would have a proportion of the total, which may be 2·63d., laid down beforehand and there is no escaping that it is deemed to be a voluntary contribution, I cannot see why the Financial Sec-
  696
  retary cannot accept one of these new Clauses. Will he also say that he will look into the question of whether the actual working of the proviso in Section 7(2) of the 1964 Act cannot be taken in any other way? It is not a question of whether he wants to take it another way or of the Economic Secretary wanting to take it in another way, but whether it can be taken in another way. Can he make certain that that is the only way in which it can be interpreted?
  Mr. Harold Lever: May I, with the leave of the House, make a last attempt to clear up points which have troubled hon. Members. On the question of voluntary payment, this is the Customs way of trying to use popular language to differentiate between payment made by persons making bets which are not payments without which the bets cannot be made. The Customs are trying to implement the Act. It is not irrevocability which determines it, but the wording of Section 7(2). I shall certainly give some thought to seeing if we can put it in popular language so that there is no misunderstanding.
  The hon. Member for Bristol, West (Mr. Robert Cooke) thought that I was equivocating, but I thought I had made it clear and there was certainly not any equivocation. It may have been stupidity or obtuse language of mine, but I want the House clearly to understand that there is no question whatever, and never has been, over Spastic Society contributions in the past years—[Interruption.] The hon. Member for Kensington, South (Sir B. Rhys Williams) is waving letters at me. I do not think they are letters addressed to the Spastics Society but to the Top Ten Promoters. The Spastics Society over the years has had a number of contributions. There is some suggestion that we are claiming duty and, what is more, backdated duty, but that is out of the question. There is no question of that, and never has been.
  The hon. Member for Kensington, South must stop waving something at me which I cannot read from this distance. No doubt it has a potent force on his emotions, but it cannot have force on my intellect because I cannot read it at this distance. There is no question, and never has been, of a back-dated decision requiring £2½ million or so from the Spastics Society in respect of past donations. If

  697
  that is not clear, I do not know what can be clear. We do not claim, and have not claimed, anything in respect of the payments, 2·7d. or not.
  Customs and Excise thought it rather an odd fragmented sum to qualify within the Section 7(2) provision and went into the question. The Department has since discovered that this is perfectly all right and entirely within the Section 7(2) provision and no question of duty arises on it at all. As to the past, I assert that there never has been a problem, and there will not be a problem. The Customs and Excise are now completely satisfied that these contributions are volunary, that is, they conform to Section 7(2). We need net quibble about what "voluntary" means. The Customs are completely satisfied that they conform with Section 7(2) of the Act and hence are completely free from any question of pool betting duty.
  If any hon. Member still thinks there is cause for anxiety—[HON. MEMBERS: "Yes."] I cannot waste more time of the House repeating that neither the past contributions nor the present ones are to be subjected to full betting duty.
  Mr. Higgins: Will the right hon. Gentleman reassure us on one particular point? Is he saying that there is no liability whether or not the society is concerned as there is no rule showing that the matter is voluntary? That is the point in the letter from the Customs and Excise which is causing anxiety.
  Mr. Lever: This has nothing to do with the rules of the society but is simply a question of the basis on which the payments are made. Do they conform to Section 7(2) or not? These do, we have now decided. The hon. Member and other hon. Members appear to believe that this litigation has been between the Customs and the Spastics Society, but that is absolute nonsense. It has been between the Customs and commercial pool promoters. There is no litigation of any kind between the Customs and the Spastics Society, and I certainly hope there will not be.
  Mr. Higgins: The letter was written to the Regional Pool Promotions Limited and said:
  "I am directed… to inform you that duty is payable on the donation unless you and Regional Club Organisation Limited or either of the two companies, can point to a
  698
  rule which indicates that it is made voluntarily."
  Does the right hon. Gentleman say that it was a mistake to write that letter?
  Mr. Lever: No. This is not a rule of the Spastics Society but as part of the commercial group. That letter was written to that part of the promoters' commercial group. What we wanted to know was that the donations were collected in the manner statutorily provided. We used the word "voluntarily" and satisfied ourselves not that the Spastics Society but this commercial promotion company has collected the money in terms which comply with Section 7(2). That being the case, the payments are and will remain completely free from pool betting duty.
  Mr. Geoffrey Hirst: I have great respect for the Financial Secretary and I know that he is trying to help the House, but I believe that the Society will suffer. If the burden of proof is so plain and the society could not point to the fact that there is a rule to get it out of difficulty, technically whether it is pursued or not begs the question and according to the letter the proportion which the society gets will become taxable.
  There are only two ways in which the right hon. Gentleman can get the House out of its difficulty. He could either accept one of the new Clauses which would put the matter right, or he could say that the Customs and Excise wrote that letter in error.
  Mr. Harold Lever indicated dissent.
  Mr. Hirst: The House cannot trust the validity of the right hon. Gentleman's argument. He has been in this House for a long time, and so haw I. He knows that Treasury interpretations mean absolutely nothing. They do not impress me in the slightest. I have heard many in my time which did not mean a thing. The right hon. Gentleman has responsibility for the Board of Customs and Excise. It cannot interpret the law; that is for the courts to do. If the Customs and Excise were wrong or there is no purpose—
  Mr. Harold Lever rose—
  Mr. Hirst: No, I will continue what I wish to say. The right hon. Gentleman cannot expect the House to accept that

  699
  this argument will put at rest the minds of societies in the future. He has done nothing to assure the House in consequence.
  Question put and negatived.

Schedule 1

  SPIRITS (RATES OF CUSTOMS AND EXCISE DUTIES)
  8.0 p.m.
  Mr. Nigel Fisher: I beg to move Amendment No. 89, in page 73, line 30, at end insert:
  Importation of aromatic bitters shall be exempt from spirit duties. For the purposes of this Schedule, 'aromatic bitters' means bitters, aromatic, containing 44 to 49 per cent. alcohol, and 1·5 to 6 per cent. by weight of gentian, spices and other ingredients, 4 to 10 per cent. by weight of sugar, and packed in containers of capacity less or equal to 0·5 litres.
  I am sorry that the hon. Member for Birmingham, Northfield (Mr. Chapman) is not in his place, because I am sure that he would have moved the Amendment much more persuasively than I shall be able to. By comparison with other Amendments to this Bill, this may appear to be a relatively small matter, but it is important to Trinidad and Tobago and it has the support of hon. Members on both sides who know the West Indies, and Trinidad in particular. Some of us have been pressing the substance of the Amendment on successive Financial Secretaries, of Conservative as well as Labour Governments, for many years. I think I first began to argue the case at least 10 years ago, although this is the first opportunity the House has had of debating the matter.
  The comparative prosperity by West Indian standards, of Trinidad and Tobago has in the past been based mainly upon oil, but that is now a declining industry. Unemployment in that country is increasing. I believe that 15 per cent. of the total work force is unemployed, including no less than 30 per cent. in the 16–20 age group. There is also quite a serious balance of payments problem in Trinidad.
  So the export importance of Angostura bitters to the country is quite considerable, yet this export cannot be increased in volume as long as Angostura is classified as a spirit to drink, because the consequential high import duty makes it
  700
  too expensive for what it really is, which in truth is only a flavouring. Angostura bitters cannot be drunk neat—it is a most disgusting taste. It can be used only for flavouring other drinks or dishes. If it was classified as a flavouring, it would be useful and popular to flavour puddings and cakes as well as to flavour gin. It would be quite a boon to the British housewife, and I believe that consumption would greatly increase. It is almost certain that, because of that, the Exchequer would get as much revenue from the larger quantity imported as it now gets from the larger duty on the small quantity imported. In any case, the loss, if any, to the Revenue would be virtually negligible.
  A large number of countries have already reclassified Angostura as a flavouring. In the last few years Grenada, Guyana, Jamaica and Peru have all reclassified it. Australia did so seven years ago. Canada did so over 20 years ago. In the United States it has been taxed only as a flavouring for over 50 years, including during the period of prohibition.
  I believe that by 1972 we shall be the only major country in Western Europe which still classifies Angostura as an alcoholic beverage, which it is not; unless the Government take the opportunity afforded by this Amendment to correct this obvious anomaly which Great Britain is becoming almost unique in persisting with. I hope very much that my right hon. Friend will take this opportunity tonight. He has, with his usual courtesy, seen the hon. Member for Northfield and myself to discuss it and I know that he has sympathetically considered the matter in his Department. If he cannot give us this concession this year, although I do not think it would cost the Treasury much revenue, I hope that he will at least give me an assurance that he will consider it favourably if he is in the same Government position next year.
  Mr. Harold Lever: I considered this matter very carefully with the hon. Gentleman. This is a problem of the structure of the duty in Britain. It is not a barrier that the hon. Gentleman can lightly get over in his research for treatment of Angostura as being a non-dutiable spice, as it were, or flavouring.
  Mr. Fisher: That is what it really is.
  Mr. Lever: The hon. Gentleman says that what it really is is a flavour or taste. What the Customs says is that what it really is is a spirituous liquor. It can be both things. I think that it is a flavour. I think that it is a spirituous liquor. What the hon. Gentleman is so keen to emphasise is its flavour character and not its spirituous character. The Customs in its dour way seeks to emphasise the spirituous character.
  I do not want to raise any false hopes about this, because there is a structural problem. The hon. Gentleman has made his case with earnestness and with force. I promise once again that we will have the matter under consideration and give it a genuine new look in the hope that we can find some conceivable opening, but I do not want to raise any false hopes. I do not want the hon. Gentleman

  5

  4A.—(1) Where a betting premises licence is granted so as to have effect from the beginning of the licence-year or from a date in that year not later than the end of February, and section 237 of the Customs and Excise Act 1952 does not apply for the reduction of the duty payable on the licence, the licence may at the option of the person liable for the duty be granted on payment of only half of the full duty; and in that case the second half shall be paid not later than the following 1st March.

  (2) If default is made in payment of the second half of the duty, the licence shall be of no effect so long as the default continues.

  (3) If after 1st March any sum remains unpaid in respect of the second half of the duty, that sum may be recovered as a debt due to the Crown.

  10

  Mr. Deputy Speaker (Mr. Sydney Irving): With this Amendment we may discuss the sub-Amendments:

  (a) In line 2, after 'a' insert 'later'.

  (b) In line 2, leave out:

  'not later than the end of February'.

  (c) in line 4, leave out 'the licence may' and insert 'the duty may.'

  (d) in line 5, leave out from 'be ',to end of line 6 and insert:

  'paid, in any case where the licence is to have effect from the beginning of the licence-year, in twelve equal monthly instalments, and in any other case by such number of equal monthly instalments as corresponds to the duration of the licence, and in any such case the licence shall be granted on payment of the first of such instalments'.
  (i) in line 5, leave out from' be 'to end of line 6 and insert:
  'paid, in any case where the licence is to have effect from the beginning of the licence-year, in twelve equal monthly instalments, and in any other case by such number of equal monthly instalments as corresponds to the duration of the licence, such instalments being in either case payable by means of the Post Office Giro, and in any such case the licence shall be granted on payment of the first of such instalments'.
  to think that this is in the nature of any kind of commitment. I cannot give him one. I am glad that he has raised the matter again briefly. I promise to look at it again, without commitment.
  Mr. Fisher: In view of the right hon. Gentleman's gracious reply, even though it does not constitute a firm and definite undertaking, I beg to ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.

Schedule 8

  PROVISIONS RELATING TO BETTING PREMISES LICENCES AND DUTY THEREON
  Mr. Harold Lever: I beg to move Amendment No. 90, in page 81, line 32, at end insert:

  (e)in line 5, leave out:

  'half of the full duty; and in that case the second half shall'
  and insert:
  'twelve equal monthly instalments to'.

  (y) In line 6, leave out '1st' and insert '15th'.

  (e) in line 7, leave out

  'the second half of the duty'
  and insert 'any such instalment'.
  (f) in line 7, leave out second half of'.
  (g) in line 9, leave out from beginning to may' in line 10 and insert:
  ' and the balance of the duty'.
  Amendment No. 91, in page 82, line 7, leave out from 'betting' to end of line 15 and insert:
  then, subject to and in accordance with the following provisions, the holder of the licence shall be entitled to a partial repayment of duty.

  (2) If at the time of the surrender of the licence the whole of the duty has been paid, the repayment under this paragraph shall be—

  (a) three-quarters of the duty paid, if the licence is surrendered before 1st January;

  703

  (b) one-half of the duty paid, if the licence is surrendered on or after 1st January and before 1st April; and

  (c) one-quarter of the duty paid, if the licence is surrendered on or after 1st April.

  (3) lf, by virtue of the exercise of the option under paragraph 4A of this Schedule, only half of the full duty on the licence was paid at the time of the grant, and the second half has not been paid, there shall be no payment under this paragraph unless the licence is surrendered before 1st January, and the repayment shall then be one-half of that which has been paid.

  Mr. Lever: As the Bill stands, the full amount of betting premises licence duty must be paid when the licence is taken out—that is, normally on or before 1st October. The Amendment provides that a person taking out the normal full year licence before the end of February has the option of paying it either in one sum or in two instalments of which the first will be due not later than the day on which the licence becomes effective and the second not later than 1st March.
  Amendment No. 91 makes the necessary consequential alterations in the present provisions for repaying licence duty on discontinuance.
  Sub-Amendment (e) tabled by the hon. Member for the Isle of Thanet (Mr. Rees-Davies) seeks to make the duty payable by 12 equal monthly instalments. It is defective in achieving that end, but that is not the point. We feel that we cannot undertake the administrative additional expense of breaking down these payments into smaller sums, much as I would like to have assisted the bookmakers in meeting the extra charge. I have gone as far as I possibly could to help them by giving them a considerable extension of credit compared with the original situation. It was only with very genuine regret that I concluded that I could not, for reasons of technical administrative difficulty, break down the instalments into smaller sums. It was not for lack of willingness to help. It was simply that the administrative inconvenience of it overcame me.
  For these reasons, I recommend the acceptance of the Government's Amendments.
  Mr. Rees-Davies: I cannot accept that reply to my Amendment. The administrative inconvenience will be no more and no less than that which is already
  704
  accepted and surmounted by all local authorities.
  There are two matters of considerable importance here, and the Treasury has, I believe, totally overlooked one of them. I believe that I am right in saying that there is no precedent in any Finance Act or analogous statute under which one takes a poll tax before the person begins to trade. I challenge the Government to produce a precedent for that type of taxation.
  Let us assume that I take up a licence as a bookmaker. It is proposed that I should pay to the Government three times the rateable value of the premises before I begin to trade. This is grossly inequitable. There is no question of giving credit. Credit has not arisen. I have not begun to develop the trade in respect of which the tax is to be paid. That is the first point.
  There are 16,000 betting shops in this country and 2,000 S.P. outlets, largely by telephone, making a total of 18,000. In 1966, the Government introduced a betting tax of 2½ per cent. In 1968, they doubled it to 5 per cent. This year, seeking to draw a differential, they have imposed a further tax, a tax on earnings and intended to be such, of 1 per cent. levied by a different method. It is intended to take this tax from the trading profits of the bookmakers themselves. Instead of being a tax on the punter, a betting tax, it is a direct tax upon the trader himself. Before he begins to trade, and despite the Government's Amendment, he is asked to pay up a substantial sum of money. I know of no precedent for behaviour of that kind by this or any previous Government. It involves collecting in advance £7 million from the bookmakers. As a result of the Amendment, it involves their paying in the month of February, before the season begins, half that sum, that is, £3½ million, and the other half—I do not quite understand the difference between 5 and 7 months—at a somewhat later date.
  The question of rateable values and the practice in collection of rates is of direct relevance here. It has been the policy of the Labour Party and the Labour Government, both in opposition and in Government, to give people the right to pay by monthly instalments what they are called upon to pay in respect of rateable premises. We are asking no

  705
  more for the bookmaker than we ask for the householder, that he shall pay pari passu on the same system, paying by instalments what is demanded of him, in this case three times the rateable value. Such a system is of even more importance when many of the people concerned have small capital resources and are able to pay only out of their profits and earnings month by month.
  An undertaking was given in Committee that the question would be sympathetically considered. It is no answer to say that the Treasury is unable to do what every local authority is well able to do. There is no reason why a licence should not be taken out for a betting office, the bookmaker being able to pay one month's tax. If he does not pay, his licence is automatically revoked. I do not accept the excuse which has been given, and I do not believe that it is true. I know that it is not. The real reason behind it is the fear that the bookmaker may somehow not meet his obligations. But there is a complete deterrent, namely, cancellation of his licence.
  8.15 p.m.
  Furthermore, this method of taxation is no longer valid. The trend is away from it. As regards bingo, the Chancellor is on record as saying that it is inequitable to continue dealing with it by reference to rateable value of premises since that does not relate to the volume of gaming. Therefore, the Treasury cannot argue this on principle. The principle is now eroded. We are moving into a system under which the tax is calculated according to turnover and the volume of gaming, and there is no case for saying that we should continue to do it by reference to the premises. The House must direct its attention in considering this question to turnover, to the mark-up of profit.
  The reason is plain, and I can give examples which illustrate the point in startling fashion. The Treasury will at least recognise that it is wholly wrong—I always thought that the party opposite took this view, though it does not seem to do so nowadays—to levy on the big company a much smaller amount of tax than is levied on the small trader. But in this case the reverse is true, and I have figures to show how it works which even this Government, with their somewhat jaded palate, must appreciate.
  706
  Ladbrokes has premises with a rateable value of £24,000 and a turnover of £20 million. It will pay in tax by reference to rateable value of only 0·12 per cent. of turnover. On the other hand, a bookmaker at 75 Market Street, Crewe, will carry a tax of £4,791 on a weekly turnover of £1,000 because the rateable value is £1,597. Thus, a small operator working a betting office in Market Street, Crewe, has to pay 4 per cent. in taxation by reference to the premises which he holds. A man fortunate enough to be in premises at 51–2 Castle Street, Canterbury, however, with a weekly turnover of £3,500—over three times more than the man in Crewe—but with a rateable value of only £138 will pay in tax a mere £414, or less than 1 per cent.
  I could cite over 100 examples taken from different parts of the country, but I do not do so because it would bore the House. I am ready to supply figures to the Treasury showing that the percentage variation in tax paid by different betting offices goes from a mere one-tenth of 1 per cent. for Ladbrokes to over 4 per cent. for a bookmaker who happens to have chosen premises in a good area where the rateable value is high.
  What is the effect? First, there is a clear discrimination between the credit bookmaker and the man in a betting shop. The credit bookmaker who works on S.P. and operates through the telephone will pay a relatively small amount of tax because he does not need premises with a high rateable value. Very often, he needs only a couple of offices on an upstairs floor. Those who have premises in new, influential and expensive shopping areas, on the other hand, where the rateable value is high, pay a large amount of tax.
  The effect is that all who remain in business will wish to move to dingy shops in back street areas, where the tax they must pay will be negligible. Those with six or seven different premises will close those in the areas of high rateable value and retain those in dingy, smaller areas with a far lower rateable value.
  But the position is worse, because where they have five or six premises they are unable to carry the payment of 1s. in the pound that the Government have now decreed, when the very small bookmaker is expected to carry on top of that a substantial additional amount of money, which in many cases seems to

  707
  average from £1,500 to £5,000. This is a crippling burden. The bookmakers whom one has seen in different parts of the country recognise that they will not be able to meet this obligation. The Government's policy means that those like Hills and Ladbrokes who are in a substantial way of business will be able to pick up at virtually nominal rates small betting offices in different parts of the country.
  The policy that was accepted by the party opposite when it was introduced by the Government's Conservative predecessors was that we were to give preference to the small local bookmaker, protect the small man and give him the right to practise his trade because of his community interest. This tax, and the way in which it is inequitably fixed, will result in the reversal of that policy. It will mean that the small man will not be able to continue in business, and the big combines will be able to take over. That will be the end of the very principle for which we fought. It will mean that the building up of the individual bookmaker into a respectable status, giving him the chance to grow up and become comparable to the local publican, will be gone. Some of those who are much aggrieved by the Government's policy will unfortunately revert to what they were before.
  Let us not forget who many of the small bookmakers were who had their preference when they applied for betting office licences. I see an hon. Gentleman opposite who has a considerable knowledge, as a justice of the peace, of granting licences of this kind in a large area of London, and he will recognise that what I say is true. In the East End and the City, for example, many licences have been granted to men who were street bookmakers. They came forward and set up businesses which have been properly and carefully look at by the local justices, and they have been very successful. They are continuing in business, but the tax will hit them severely, and those that remain in business will undoubtedly group their businesses, and give up some of their licences—
  Mr. Deputy Speaker (Mr. Sydney Irving): Order. I have given the hon. Gentleman fair scope, but he is not really relating his remarks to the Amendments,
  708
  which are primarily concerned with payment by instalments.
  Mr. Rees-Davies: With respect, Mr. Deputy Speaker, I am. What I am saying is that if one seeks to impose a burden of this kind, where one person is paying a tax of 3 or 4 per cent. on his business and another is paying a mere one-tenth of 1 per cent., it is absolutely essential to enable the small bookmaker, who may be carrying a tax burden of as much as 3 or 4 per cent. on his business, at least to obtain the earnings first. However administratively inconvenient it may be, if it be so, it is essential that he be given the opportunity of paying the tax month by month.
  I do not believe that this is one of the matters which have received the attention of the Financial Secretary to the degree that other matters have. I would have been happier if the Chancellor had thought of giving the matter his attention. We have never yet seen him during the passage of the Bill. We never saw him on Second Reading, he was never seen in Standing Committee, and he was seen yesterday only to report Progress at 11 p.m. Today, he never came in even to listen to the main debate.
  Therefore, we have a unique situation. We have the unique precedent of collecting a tax before anyone has the chance to earn the money to pay it, and the arguments relating to such a precedent are never heard by an absent Chancellor, who treats the House with contempt and is not prepared to listen to an argument of any kind.
  Mr. Alexander W. Lyon rose—
  Mr. Rees-Davies: I shall give way in a moment. The Chancellor, who is an utter disgrace, imposes on the Financial Secretary such a burden as almost to cost him his health, and cannot be bothered to come and listen.
  Mr. Lyon: I hope that having had the courtesy to give way the hon. Gentleman will have the equal courtesy to eat his words. My right hon. Friend the Chancellor was sitting here through most of the preceding debate, when the hon. Gentleman was out of the Chamber. I hope that he will now retract.
  Mr. Rees-Davies: On the contrary. I am delighted that the Chancellor's P.P.S.

  709
  should seek to defend him. I was here through the whole of the debate until about half an hour ago. The Chancellor was not here yesterday, on Second Reading or in Standing Committee. He did not listen to the general spread of the bookmaking argument before, and he has not listened to it now. It is about time he did a little work instead of putting it on his loyal and capable servant to such a degree as to cause a breakdown in other people's health. I very much hope that we shall have him here later, and that he will be given notice before the next series of Amendments, which will also be of the greatest importance to other industries.
  Mr. Arthur Lewis: I support the remarks of the hon. Member for the Isle of Thanet (Mr. Rees-Davies) on the Amendment, but not his comments about the attendance of my right hon. Friend the Chancellor. With great respect to him and my right hon. Friend, I would rather have my right hon. Friend the Financial Secretary here than the Chancellor, because I think that he understands more about this subject and is more liable to be understanding. I am not concerned with whether or not the Chancellor is here.
  The hon. Gentleman is to be congratulated in the case he has made. As I said earlier, I have always been in favour of fair and equitable taxation on betting, gambling and gaming. But the tax with which we are now concerned is completely unfair on a section of taxpayers. We are singling out a section of the business world who happen to be bookmakers and contribute large sums to the Treasury and are saying to them, "You shall pay three times the rateable value of the premises you occupy before you have done any business. Before you have any money you will have to pay that sum. "This is in advance of knowing whether they will actually earn the amount. The hon. Gentleman was also right in challenging my hon. Friend to say whether any other section of the population is so taxed.
  8.30 p.m.
  I believe that I heard someone—if it was not my hon. Friend it was another of the little group in that corner—saying that other licences are paid in advance, and that is true. I pay my dog licence any my radio and television licence in
  710
  advance. But the payment of 7s. 6d. for a dog licence and £6 for the pleasure of watching my television is rather different, both in principle and amount, from charging three times the rateable value on a tax basis. Yet that is what is happening here.
  My sub-Amendment would not only give these people the chance to pay by monthly instalments, but provide my hon. Friend with the ways and means of doing it, thereby obviating his claim that it is not practicable. It would help the Post Office in the process of encouraging the build-up of its giro system.
  The Postmaster-General says that the giro system is in difficulties since it is not getting enough business. If the bookmakers could pay by monthly instalments into a giro account, the giro system, which is computerised, could keep all the records for the Treasury and the Inland Revenue and there would be no need to worry. The giro system could tell the Treasury from day to day whether the bookmakers had paid their monthly instalments on the due date. There would be no extra cost to the Treasury or to the bookmaker and no difficulty with regard to taking on more civil servants. There would also be a helpful income to the giro system.
  The solution is quite simple. My right hon. Friend would be blessed by the Postmaster-General for helping to increase the revenue and services of the giro system—and let us not forget the free advertisement which the giro system would receive. No doubt William Hill would say, "We pay our licence to Giro No. X." I cannot see how any heavy expense or difficulty would be involved.
  The Chamber is almost empty. Few hon. Members are here. Bookmakers are not the most lovable people and not many are willing to speak for them. But this can be a dangerous precedent. I wonder what would happen if the Chancellor were suggesting that we should charge the surtax-payer three times his estimated surtax in advance. One can imagine that the House would be full of surtax-payers. The same would be the case if other forms of taxation were to be levied on the basis of payment in advance of receipt. This is what is happening here and about £7 million is involved, although £7 million may not

  711
  seem much to the Chancellor of the Exchequer with his large Budget.
  There are more betting shops in my constituency than in any other constituence, according to the official records. Most of them are small betting shops and they will have to pay, pro rata, more tax than the large establishments like William Hill, Ladbrokes and so on, in some cases four or five times as much. Can the Financial Secretary honestly say that the system will be fair and equitable? Is it fair that these people should pay in advance three times the rateable value of their premises with no opportunity of paying by instalments? Next door to the betting shop will be the shopkeeper who has to pay tax on the goods he sells, but he can pay the rates on his premises by monthly instalments. Yet the betting shop next door will not be able to pay by monthly instalments a tax which is based upon the same rateable value. The bookmaker will be able to pay the rates on his premises on a monthly basis by giro, but he will not be allowed to make payments through the giro for this tax. Why? What is the difference? What prevents the Chancellor from accepting this suggestion?
  The Financial Secretary has said that there are difficulties and obstacles, but he did not deal with this suggestion, which would be helpful to him, the Inland Revenue, the Post Office and the bookmakers.
  I issue a warning. Once this system starts what is to stop a system of taxation in advance being imposed upon us all? There will be nothing to stop the Treasury from imposing a system of taxation in anticipation of what may be earned.
  Surtax is paid in arrears. But we are not asking that this tax should be paid in arrears or on the dot. We are asking that they should be allowed to pay by monthly instalments as the tax becomes due.
  It would be helpful to the Chancellor if he were to initiate this system. He would have a ready-made book-keeping system which would keep him up to date as to who had paid and who had not. He would then be able to keep an account of what was coming in.
  I should like to pay tribute to the giro system, which is a marvellous inno-
  712
  vation, well-organised and efficient. The trouble is that it does not get enough publicity and not enough people are using it who should use it. The Treasury could encourage use of the system by giving bookmakers the opportunity to pay this tax through the giro. The Treasury could say to the bookmakers, "You may pay the tax through the giro by monthly instalments which will mean that you will not have to pay 12 months in advance". I do not know about the economics of the matter, but such a procedure might help to offset some of the losses which might be incurred by the giro system.
  I ask the Treasury to give careful and serious consideration to this matter. If this suggestion is not taken up now, I prophesy that it will very likely be adopted in some future Budget to get in revenue rather than by the use of other tax methods which the Treasury are so clever in inventing from time to time.
  Sir E. Bullus: I should like to associate myself with the powerful case made by my hon. Friend the Member for the Isle of Thanet (Mr. Rees-Davis) and by the hon. Gentleman the Member for West Ham, North (Mr. Arthur Lewis). I have been in communication with the Financial Secretary on this matter, and I hope that he will not mind my quoting from one of his courteous letters. He said in the letter:
  "The possibility of the licence duty being paid by instalments was discussed in the Standing Committee on the Finance Bill on 11th June, and I then undertook to consider the question of the time factor for payment before Report stage of the Bill. I know that you will not expect me to say more at present."
  I did not expect him to say more at that time, but I hope that he will be able to say something more today.
  I am not a betting man and I never thought that I should be standing up in Parliament defending the bookmakers, but they fulfil a demand in our society. They have a case, they pay their taxes, and they are the constituents of many hon. Members. I have been interviewed by members of the North-West London and Middlesex Bookmakers' Association Limited, and I have learned something about the art of betting and also about some of the difficulties that face bookmakers today.

  713
  They were at great pains to point out the effect of this rateable value tax on some smaller bookmakers. They produced a list, with which I have no reason to disagree, showing that some of the larger bookmakers will not be unduly hit by the tax, although the representations of the big bookmakers said that they rather resented paying this additional tax.
  The Secretary of the Association gave me a list, taken at random, showing how the tax would be likely to hit some of the bookmakers in the Middlesex area. The weekly turnover in a case in Green-ford was £4,500; the weekly betting duty, £245; the rateable value duty, £13; and the increase in tax, 5 per cent., which might appear to be reasonable.
  The right hon. Gentleman said later in his letter:
  "I appreciate that the new duty may not necessarily be borne by betting businessmen in proportion to their turnover, but it is not pitched at such a level as to impose an unfair burden on bookmakers or their clients."
  After listening to the deputation, I came to the conclusion that I could not agree with that last sentence.
  8.45 p.m.
  Among other cases pointed out to me, there was one at Ruislip where the weekly turnover was £385, the weekly betting duty was £19, the rateable value duty was £18 and the increase in tax 95 per cent. In another case at Southall, the increase in tax was 78 per cent. In yet another case at Edgware, it was 48 per cent. These represent considerable burdens on the-smaller bookmaker, and some of them may be put out of business, in which case the Treasury will lose the tax al together.
  I hope that, at some time in the near future, the Financial Secretary will be able to give some help to small bookmakers who may otherwise be driven out of business. It could have far-reaching effects. If the small bookmaker is driven out of business, I can see a return to street betting and the other conditions which pertained prior to the recent Betting Act. The Government's proposal can have long term implications.
  I know that the Financial Secretary is sympathetic, because I have had discussions with him. I hope that he will accept this Amendment and allow payment to be made monthly and also that he will give
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  special consideration to the case of the smaller bookmaker.
  Mr. Herbert Butler: I am sorry that I did not hear the whole of my right hon. Friend's speech. However, I arrived in time to hear him say that it would be very difficult to collect the duty and that the Treasury could not meet the requirements in this respect. Having read the proceedings in Committee where sympathetic consideration was promised, I fail to understand the argument that it would be impossible to collect the duty in monthly instalments.
  For many years, the Labour movement has argued that the rateable value of residential premises has in many cases been inequitable because people are not always able to choose where they reside.
  Since the inception of betting shops, I have served on a betting committee which covers a very large area. The Act requires betting committees to consider the requirements of their neighbourhoods. Certain planning permissions have to be obtained from local authorities, and then a decision is made in each case before an applicant can open a shop. In the area which is familiar to me, sometimes a large shop becomes available and sometimes a small shop. Providing that certain physical conditions are present, the betting committee will usually agree to an application.
  I am no friend of bookmakers. I do not bet. I am no friend of people who gamble. But to impose a tax which is three times the rateable value of premises which are used for a legitimate business has no relevance to equity. It is imposed in an arbitrary fashion. It has no relation to the facts of life and the capacity to pay of the person engaged in the business. It is merely because a shop is sited in a main street as opposed to a back street. But a back street shop may do three times the business of a shop in the main street, because there are often one or two betting shops in the main street.
  If a local authority puts up rails at the edge of the pavement in front of a shop and people cannot pass directly from one point to another, they will not go into the betting shop, furniture shop or other shops. The siting and size of a shop in which a person carries on his

  715
  business is purely fortuitous in many cases. Fundamentally, therefore, the rateable assessment of premises, either for the purpose of residence or for carrying on a business, should have no relation to the amount which people pay to the Exchequer. The relevant consideration should be the profitability of the business in which they are engaged. This runs counter to the whole principle of taxation, which is the ability to pay.
  I am not particularly enamoured of the activities of people engaged in betting professionally or otherwise, but we must have regard to the equities of the situation. In this instance, my sympathy lies with those who are engaged in this particular profession.
  I have a business in my constituency and I know the feelings of people in the area. Even today there is an increasing tendency towards street corner betting with people not conforming to the law taking bets and not only avoiding this, but avoiding other impositions placed upon the betting fraternity. There will be an increase in this type of betting, and then on the telephone, instead of people going into betting shops.
  I am not arguing about the morality of these things or whether we should have this form of conduct. But the man or woman who is carrying on a legitimate business, in accordance with the law, is faced with an imposition which is entirely inequitable and should never be imposed.
  My right hon. Friend has said that he will sympathetically consider the matter. It has been pointed out that local authorities encourage people, in order that they should not be faced with a high bill, to pay their rates in weekly, monthly or quarterly instalments. I can assure my right hon. Friend that many small bookmakers are now in the position that, whereas before they often wanted to sell out to Ladbrokes and other people, they are facing the shutting-down of their businesses consequent upon all kinds of impositions. The Act never visualised making facilities available for the big boys in the betting business to take over the smaller ones. This is the last thing that we, on this side at any rate, want if the Government say that these are legitimate businesses. Surely, we do not want people due to our powers of imposing taxation and levies upon them,
  716
  to be the victims of the big boys who have stepped into this business.
  I ask my right hon. Friend to look again at the argument which he has advanced. He said that it could not be done because it was administratively difficult. That may be, but surely we should have some regard to justice and fairness in this matter.
  Sir Ronald Russell: I rise briefly to support what has been said by my hon. and gallant Friend the Member for Wembley, North (Sir E. Bullus) and the hon. Member for Hackney, Central (Mr. Herbert Butler).
  I apologise for not being here earlier, but I thought that this matter would arise on a later Amendment.
  I was present yesterday with my hon. and gallant Friend at the meeting with the North-West London and Middlesex Bookmakers Association Ltd. Great hardship is being caused to the small bookmakers, whose interests we should protect even more than those of the larger ones. I hope that the right hon. Gentleman will look at this matter sympathetically in view of the street corner betting which is likely to be encouraged.
  Like my hon. Friend, I am not a betting man, but an injustice is being done here. I hope that the right hon. Gentleman will give serious consideration to this in his usual sympathetic manner, and put the matter right, because it is doing a great deal of harm to small bookmakers.
  Mr. Hamling: I should have preferred to have had Amendment No. 5 selected, because that would have suited my case much better than the Government Amendment and the consequent Amendments that we are considering. I should have liked an Amendment to abolish this tax altogether, because it is a bad tax, but I cannot argue that except in an indirect way in so far as it is relevant to this Amendment.
  I should have preferred, when we were presented with this tax, and bearing in mind the Amendment before us, to have had a much more satisfactory explanation of why the tax was put on at all. My right hon. Friend says that the general justification is that we must have some more revenue from this area, and that this is somewhat less than 1 per cent. of the entire turnover.
  Mr. Deputy Speaker: Order. The hon. Member cannot, on this Amendment, argue the whole principle of the tax, but only whether it should be paid by instalments.
  Mr. Hamling: I mentioned that only in passing. I want to come to the point of the Amendment. The Government are proposing that people should pay half the injustice at one date, and half the injustice at another. The fact that someone has to pay an unjust tax in instalments does not make the tax any more just. It merely spreads the injustice over a longer period, and perhaps makes the point of irritation more frequent.
  What we are asking people to do is to pay the tax in instalments before they have the money with which to pay it. I have met a number of small bookmakers in recent weeks, and many of them have told me that they cannot pay even the instalment of the tax, even half the tax, on the date laid down.
  A constituent friend of mine, a bookmaker, lives in Eltham. He is having to sell four of his shops because he cannot meet this sort of obligation, and even if the Amendment is carried he cannot meet it. He has five shops and he may have to sell the lot and perhaps go out of business. He and his family have been reputable bookmakers for about 60 years.
  The Amendment is not good enough, because the instalments referred to are based on rateable value, and this is inequitable. The instalments are inequitable. The bookmaker whom I mentioned has a turnover of about £25,000 a year. I have seen his books and his returns of tax, so I know that the figures are accurate. I have been through them carefully. The rateable value tax he will pay is £780, which is 3 per cent. of turnover. He will be expected to pay the first instalment of £390 before he has earned a halfpenny. He cannot do it. The money is not in his shop to do it. That is what the Amendment does, and what goes for him goes for others too.
  This proposal is grossly inequitable as it affects one betting shop as against another. This man has five shops. The rateable value of Belvedere is £184. The levy will be £550. The rateable value of Wood Green is £78, and the levy will be £294. The turnover of these shops bears
  718
  no relation to the rateable value levy. To that extent I cannot find it in my heart to accept the imposition of tax under the Chancellor's Amendment. I have been sent figures of one shop with a turnover of £69,000 which is liable to pay only £150 in rateable value levy. That bears no relationship to the position in which many other small bookmakers find themselves.
  I ask my right hon. Friend to look again very closely at the whole basis of this tax and to take it from me that the Amendment is not sufficient to deal with the difficulties being experienced by many small betting shops I am afraid that as a result of this imposition some betting shops will close. Far from increasing the amount of revenue, there will be less coming in.
  9.0 p.m.
  Mr. Harold Lever: I recognise the criticisms of rateable value as not being necessarily the ultimate in perfection in assessing the appropriate rates of duty. I accept that there are better and more precise ways for applying taxation where they are possible and appropriate. Certainly we shall keep this impost closely under review this year.
  Mr. Herbert Butler: What does that mean?
  Mr. Lever: It means that we shall examine cases of differentiation such as have been indicated. It is not necessarily either the ultimate in fiscal perfection as a tax or the most permanent instrument of tax. In other words, it does not follow that on review the differential that we were seeking to achieve would be repeated in this form if it produced the kind of difficulties suggested.
  Mr. Butler: What happens to the small bookmaker who has gone broke while the review of the position is being undertaken?
  Mr. Lever: The suggestion that small bookmakers will go broke in the meantime is somewhat exaggerated. The average cost of this duty is about 1 per cent. Some people may be paying 2 per cent. or even 3 per cent. of their turnover, in which case a certain degree of difficulty may arise, but it is quite out of the question that they will go broke in one year.

  719
  Duties of this kind have been imposed before in relation to rateable value, and they are still in existence in respect of gaming premises. The hon. Member for the Isle of Thanet (Mr. Rees-Davies) says that he does not know of a case where a licence requires payment in advance of earning the money. I can give him one example: casinos pay up to £100,000 when they get their licences, and they have to pay it in one lump sum. We must be realistic about this. This provision was announced in April, and bookmakers were told that they would have to pay the lot in October. It was then thought that six months would be enough time. I looked at the position with real sympathy, however, and I decided that we could reasonably split the payments so that bookmakers paid half in October, after six months' warning, and the other half nearly six months later, so as to temper the wind to the shorn lamb and not put the lamb entirely out of business —if lamb is the appropriate description.
  Mr. Rees-Davies: Not only was there the most violent objection to that, in terms of rateable value; it must be remembered that only 12 premises pay that high rate of tax, and they have already made substantial sums of money as assets to enable them to pay the rateable value tax. If it be a precedent of any kind it is of singularly little value.
  Mr. Lever: The hon. Gentleman said that he had never heard of any such thing occurring, and I gave him one example. The bookmakers were given six months' warning in April that this would come in October. I will certainly keep a keen eye on all that is happening. I accept that it is not necessarily an ultimate and permanent way of achieving the Chancellor's objective.
  Might I say a word about the comments, kindly intended towards me but most unjust towards the Chancellor, made by the hon. Member for the Isle of Thanet. He was not his usual self in making these criticisms of my right hon. Friend. I can assure him that the Chancellor has been closely concerned with every aspect of this Finance Bill.
  The detailed labour that goes into it is such that no hon. Member could say that there is a single Treasury Minister, least of all the Chancellor, who is in danger of
  720
  underwork or not contributing enough time and effort towards the preparation of the Budget. I am sure that the hon. Member, when he comes to reflect on this, will not want to persist in his remarks.
  Sir E. Bullus: When the right hon. Gentleman says that he promises to keep this under close review, is he speaking personally or does he mean that if perchance he goes to some other post the Department will watch it closely?
  Mr. Lever: I am speaking for the Government. It will be Government policy to watch it closely. The views I have expressed are not merely a personal commitment or a reflection of my personal attitude. I am reflecting a governmental attitude towards this. I understand some of the disquiet of my hon. Friends, but I hope that they will accept this assurance, and also accept that we have given every reasonable assistance to these people.
  Mr. Arthur Lewis: My right hon. Friend has spoken about the difficulty of accepting monthly payments but has not said a word about doing it by giro.
  Mr. Lever: The difficulty about accepting payments that are too fragmented is that these are licence payments. It is easy for us to get a giro list of people in default or in arrears. The problem will arise as to whether these people ought to be treated as though their licence was not in existence because they were in arrears. Many thousands of people are concerned. This presents a technical difficulty. If licence fees are paid in arrears are the men to be suspended?
  Mr. Arthur Lewis: They should be monthly in advance.
  Mr. Lever: It is a problem of chasing many thousands of people.
  Mr. Rees-Davies: I know what the Treasury thinks, and it is quite wrong. It thinks that bookmakers will not pay. The Government have taken powers to cancel or suspend bookmakers' licences. If they do not pay then they will go to the justices, and the licence will be suspended or cancelled. They will pay all right, they will have to. They cannot afford to wait on the ordinary Inland Revenue processes or they will find themselves summoned with a view to cancellation.
  Mr. Lever: It is a question of balance. We are talking of relatively small sums, £100 to £150 from these small bookmakers. It will be found that the larger bookmakers will be able to manage it. We have given them an extra five months, making nearly a year in all. I would have liked to have met all the requests, but I cannot go beyond what I have told the House. I offer the House the assurance that this will be kept under consideration as it operates.
  Amendment agreed to.
  Further Amendment made: No. 91, in page 82, line 7, leave out from 'betting' to end of line 15 and insert:
  'then, subject to and in accordance with the following provisions, the holder of the licence shall be entitled to a partial repayment of duty.

  (2) If at the time of the surrender of the licence the whole of the duty has been paid, the repayment under this paragraph shall be—

  (a) three-quarters of the duty paid, if the licence is surrendered before 1st January;

  (b) one-half of the duty paid, if the licence is surrendered on or after 1st January and before 1st April; and

  (c) one-quarter of the duty paid, if the licence is surrendered on or after 1st April.

  (3) If, by virtue of the exercise of the option under paragraph 4A of this Schedule, only half of the full duty on the licence was paid at the time of the grant, and the second half has not been paid, there shall be no repayment under this paragraph unless the licence is surrendered before 1st January, and the repayment shall then be one-half of that which has been paid.—[Mr. Harold Lever.]

Schedule 9

  PROVISIONS RELATING TO BINGO DUTY
  Mr. Harold Lever: I beg to move Amendment No. 92, in page 85, line 34, at end insert:
  (b) on any premises in respect of which there is for the time being in force a gaming machine licence under section 5 of this Act, and which have local authority approval under the Gaming Acts by virtue of paragraph 6 of Schedule 11 to this Act; or.
  This Amendment fulfils an undertaking which I gave in Committee to an hon. Member opposite who is not present. It is a relatively minor Amendment. Its effect is to simplify the formalities which would otherwise have to be observed to qualify for exemption when the Gaming Act, 1968, comes into operation.
  Amendment agreed to.

Clause 5

  GAMING MACHINES
  Mr. Deputy Speaker: The next Amendment is No. 6, plus the Amendment to it in the name of the hon. Member for North Fylde (Mr. Clegg)—in line 3, at end insert:
  'and provided that "a penny machine" shall be capable of having more than one slot through which a penny can be placed to operate such machine'.
  Mr. Harold Lever: I beg to move Amendment No. 6, in page 8, line 28, at end insert:
  'and that Schedule: and for those purposes a "penny machine" is a gaming machine which, in order to be played once, requires the insertion of a single penny and which cannot be played in any other way'.
  The effect of these Government Amendments is to create a new category of gaming machine licences to be known as holiday season licences. Holiday season licences will be valid from 1st March to 31st October in any year. They will be available only for premises covered—
  Sir Stephen McAdden: On a point of order. I think that the Financial Secretary is dealing with the wrong Amendment.
  Mr. Lever: I hope that I have not confused matters; I am on the right Amendment; the hon. Gentleman is mistaken.
  The effect of these Government Amendments is to create a new category of gaming machine licences to be known as holiday season licences.
  Sir S. McAdden: On a point of order. You, Mr. Deputy Speaker, called the Financial Secretary to move Amendment No. 6, which deals with the definition of a penny machine, not with holiday licences. I have no objection to the right hon. Gentleman discussing gaming machine licences, but I do not think that he is dealing with the Amendment you called him to move.
  Mr. Deputy Speaker: The hon. Gentleman's impression coincides with mine.
  Mr. Lever: I am referring to Amendments Nos. 6 to 9, 13 to 23 and 93 to 106. This is the group of Government Amendments of which No. 6 is the first. We

  723
  must take them all together in order to understand them.
  Mr. Patrick Jenkin: On a point of order. Perhaps the Financial Secretary was not present yesterday when we encountered this difficulty. The Government spokesman, when moving the first Amendment, announced that it was the first of a series of Amendments. We on this side of the House have had no intimation that all these Amendments were to be grouped together. We are not prepared at this stage to agree to that. We should like the Amendments to be taken separately. If a number of Amendments are to be taken together, we should be grateful if we had advance notice.
  Mr. Lever: If it is the wish of the House, I shall deal with the Amendments separately.
  Amendment No. 6 introduces a definition of a penny machine. The definition is restricted to those machines which can be played once on the insertion of a penny piece. It does not apply to machines made playable on the insertion of a token's worth of a penny or machines which offer three goes for a sixpenny piece or three goes for 6d. It is strictly limited to the definition of a penny machine.
  Mr. Deputy Speaker: I understood that the objection of the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) was not to the Amendments being taken as a group but to the fact that prior notice was not given.
  Mr. Patrick Jenkin: On a point of order. There is a point of substance here. The selection which Mr. Speaker was good enough to make indicated on a number of occasions when two Government Amendments were to be taken together. We would not insist on a change in the usual procedure if two or three Amendments obviously hang together, but when the Government intend to dot about in the Amendment Paper and deal with several Amendments of substance together I should be grateful if we could have notice.
  9.15 p.m.
  Mr. Lever: I did not realise that notice had not been given to the other side, and I must apologise for it.
  Mr. Rees-Davies: I know that my hon. Friend the Member for North Fylde (Mr. Clegg) would have wished to move as an Amendment to the proposed Amendment No. 6, in line 3, at end insert:
  'and provided that "a penny machine" shall be capable of having more than one slot through which a penny can be placed to operate such machine'.
  I bring it to the attention of the House so that the Financial Secretary may have an opportunity to deal with the case of the penny operated machine which can be used with a number of slots—usually, I think, four or five.
  Mr. Arthur Lewis: I understand that the penny coin is to be done away with very shortly. Will my right hon. Friend explain what will happen when we do not have the penny? Will the definition then have to be redefined, or will it cover the position as it will be in six months' or 12 months' time, or whatever the period may be when these machines are operated by coins other than those called pennies?
  Mr. Lever: This definition will stand as long as the penny remains. When pennies go the definition on the Statute Book will not have much relevance.
  Amendment agreed to.
  Mr. Harold Lever: I beg to move Amendment No. 7, in page 8, line 29, leave out from beginning to 'licence' in line 37 and insert:
  (3) A gamine machine licence shall be either—

  (a) an ordinary licence, being—

  (i) a whole-year licence for the period from 1st October in any year to 30th September in the following year, or

  (ii) a half-year licence for the period from 1st October in any year to 31st March in the following year or from 1st April in any year to 30th September in that year; or

  (b) a holiday season licence (for penny machines only) for the period from 1st March in any year to 31st October in that year,

  (all dates inclusive); and where a licence of either description is granted so as to have effect for the remainder of a licence period which has partly expired, the charge to duty shall be unaffected by the circumstance that a licence of the other description has been in force in respect of the same premises for any part of that period.
  (4) The duty on an ordinary.
  Mr. Deputy Speaker (Mr. Sydney Irving): With this Amendment we may take the following:
  Amendment No. 194, in page 8, leave out lines 30 to 36 and insert:

  (a) a licence for any period of twelve months running from the beginning of the month in which the licence first has effect;

  (bs) a licence for any period of four months running from the beginning of the month in which the licence first has effect; or

  (c) in the case of any such premises as are mentioned in section 27(3)(a), (b) and (c) of the Gaming Act, 1968, a licence for any period of seven consecutive days.

  Amendment No. 195, in page 10, leave out lines 16 to 18 and insert:
  (7)(a) The duty on a licence for a period of four months shall be eleven-thirtieths of that which it would have been if the licence were a whole year, but otherwise identical, licence;
  (b) the duty on a licence for a period of seven days shall be one fifty-second of that which it would have been if the licence were a whole year, but otherwise identical, licence plus ten per cent. of that amount.
  Mr. Lever: The Amendment affects the distinction between ordinary licences, the licences dealt with in the Clause as drafted, and holiday season licences. It provides that holiday season licences apply to the penny operated machines only, and it sets their period of validity as being from 1st March to 31st October inclusive. It also provides that if a holiday season licence is exchanged for a unexpired ordinary licence, or vice versa, the duty on the new licence is unaffected by the fact that duty has been paid on the superseded licence.
  I do not know whether I can usefully illumine that by pointing out that the effect of these Amendments as they go along is to provide a new category of gaming machine licences to be known as holiday season licences which will be valid from 1st March to 31st October in any year. They will be available only for premises covered by local authority permits under the social law, and where the gaming machines are penny operated machines. The duty on holiday season licences will be £15 for each penny operated machine, and the first holiday season licences will be issued for a period beginning on 1st March, 1970.
  The Amendments also exempt from gaming machine licence duty to October, 1969, premises which satisfy the conditions relating to holiday season licences. Gaming machine licences dealt with in the
  726
  Clause as drafted are unaffected, except that they become known as ordinary licences. Ordinary licences will continue to be available for those not wanting holiday season licences, or for holiday season licence holders who want to operate outside the holiday season. The effect is to get these licences for penny operated machines from 1st March to 31st October at £15 a year, which is very much less than the proportionate charge.
  This is an attempt to give effect to the wish of both sides of the Committee to distinguish between Seaford and Soho, or the seaside and Soho. This will provide a very cheap rate for penny operated machines for people who need them only in the holiday season from March to October, but will leave the original rate still in force for those who use them all the year round.
  If it is felt by those who have to pay the whole-year duty that these people are being unfairly treated with great indulgence by us the answer is that although these holiday people have an eight-month licence they will be very lucky if they are able to use them for eight months in the year. My reasoning in making this reduction was that very often these people will be able to use the eight-month licence only for a few weeks in the year, owing to the inclement and, to some extent, unreliable character of the British weather at the times when the British holiday makers take their holidays.
  Mr. John Hall: Has the Financial Secretary considered the average earnings made by these machines in the summer?
  Mr. Lever: That varies a great deal, but we have a great deal of evidence. I went into this matter with great care. When the duty was fixed at £15 for the holiday season licence I think I erred on the side of generosity in my recommendations to the Chancellor rather than on the side of severity. Instead of £75 they will pay a mere £15 for eight months of the season. I am satisfied that this is an effective reduction which will help even the less fortunately placed operators. It is no good giving a series of figures in relation to the take of these machines. It varies greatly from one place to another. Having studied in great detail what the takings were as returns for tax

  727
  and other evidence showed, I recommended the reduction which my right hon. Friend accepted. I think this takes care in a generous way of the wishes expressed by hon. Members on both sides of the Committee.
  Mr. Rees-Davies: On a point of order, which I think is quite important. This Amendment deals only with the period of licence, not with quantum or the time which arise on Amendments Nos. 10 and 15. This is a very narrow Amendment dealing with the introduction of holiday season licences and the appropriate period for which there is a reduction. I mention that because the Financial Secretary appeared to go rather wider.
  Mr. Speaker: I am grateful to anyone who narrows a debate. With this Amendment we are discussing Amendments Nos. 194 and 195. The House might like to be reminded that this is the third or fourth of 40 debates we are to have during two days on Report.
  Sir S. McAdden: In moving Amendments Nos. 194 and 195, I start by saying how much I appreciate—
  Mr. Speaker: The hon. Member is not moving those Amendments but may speak to them.
  Sir S. McAdden: I start by saying how much I appreciate the care and thought which the Financial Secretary has given to representations made to him on this narrow question of validity of the licence. I shall not be tempted into the realms of disorder into which the Financial Secretary sought to lead me by dealing with the amount of duty paid on these machines. I will confine myself strictly to the period of the validity of the licence. Because the Financial Secretary was courteous and generous in listening to complaints made to him, it is all the more regrettable that I had to interrupt his preliminary remarks. It is important that we should keep to the narrow point of the period of validity.
  The right hon. Gentleman has made a substantial concession. The Amendment extends from six months to eight months the period during which a licence may be held by a holiday season amusement arcade proprietor. Later I hope to have the pleasure of catching your eye, Mr. Speaker, and of speaking at a little more
  728
  length—but not much—on the problems of seaside proprietors. Now I urge on the Financial Secretary the importance of considering giving some kind of relief to other kinds of operators as well. In this connection I am trying to help the Treasury to get some money. It so happens that unless the Treasury provides some opportunity for people to get licences for a shorter period than six months it may conceivably lose a great deal of revenue. Some of the machines involved in this operation cost several thousands of £s and considerable sums in purchase tax have been paid in respect of them. They will become unusable if they are compelled to be used for the whole period of one year or even for six months. Amendments Nos. 194 and 195 seek to create fresh periods ranging from four months down to seven days. I have no doubt that to the Customs and Excise the suggestion of a period of seven days for a licence comes as a great shock, but some organisations and clubs run a function once a year—for instance, a carnival—when a seven-day licence would be of great value.
  Despite the administrative difficulties, the extent of which I concede, if the Treasury could see its way to creating opportunities for a seven-day licence and a quarterly licence based upon the proportions of the licence fee set out in Amendments Nos. 194 and 195 it would at least get some revenue where otherwise it would get none and it would give relief to some organisations which would greatly welcome it.
  Mr. John Farr: I thank the Financial Secretary for the arrangements he has made consequent upon representations he received from both sides. I am grateful to him for reducing the special licence fee for 1d. machines to £15. I thank him for his sincerity and sympathy and for studying the case which was put to him. I hope he can assure me that, if it should transpire that this licence fee of £15 a year, which seems little enough, but which takes a great deal of getting from ld. a time machines, is working unfairly or harshly on some 1d. machine operators, we can come to him next year and present any fresh statistical evidence that we have gained as a result of a season's working.
  Mr. Harold Lever: I thank the hon. Member for Harborough (Mr. Farr) for

  729
  his attitude. We will keep in touch with this matter. I had discussions with the associations most affected before coming to the conclusion about the £15. I have a feeling that they are surprised as well as happy at the level at which I have been able to recommend this duty. I think that we have met them on this matter. It is impracticable to take instalments weekly or monthly. Much as I would like to help in that way, it would place an impossible burden on the Customs and Excise.
  Amendment agreed to.
  Further Amendments made: No. 8, in page 9, line 7, at end insert:
  'for the purposes of an ordinary licence'.
  No. 9, in line 20, leave out 'a' and insert an ordinary'.—[Mr. Harold Lever.]
  Mr. Rees-Davies: I beg to move Amendment No. 10, in page 9, line 33, leave out 'one' and insert every'.
  Mr. Speaker: With this Amendment the House can discuss also the following

  (8) A holiday season licence shall be granted only for premises as to which the Commissioners are satisfied that they will, on the date on which the licence is first in force, have local authority approval under the Gaming Acts by virtue of paragraph 5 or 6 of Schedule 11 to this Act; and—

  (a) the licence shall be one which authorises the provision only of penny machines up to a number specified in the licence; and

  (b) the duty on the licence shall be £15 multiplied by that number.

  Also the sub-amendment: (w), in line 5, leave out from beginning to end of line 7 and insert:

  (a) the licence shall be one which provides that not more than one-third of the machines authorised by the licence shall be machines other than penny machines;

  (b) the duty on all penny machines authorised by the licences shall be £15 each;

  And (x), in line 7, leave out '£15' and insert'£f12–10–0'.
  9.30 p.m.
  Mr. Rees-Davies: The effect of that arrangement, Mr. Speaker, is that we can deal in one general debate with the position of the amusement trade on the Amendments which cover the amount of tax on the machines, leaving outstanding only one issue on Clause 5, namely, that raised by Amendment No. 16, which deals with multi-player machines. I mention that so that those hon. Members who have come into the debate will understand what the position is. There is a separate narrow issue dealing with multi-
  Amendments: No. 11, in page 9, leave out lines 35 to 37.
  No. 12, in page 9, line 40, leave out'£150' and insert £75
  As the hon. Member for the Isle of Thanet (Mr. Rees-Davies) reminded us, this Amendment is narrow in its own field as the other was in the previous field.
  Mr. Rees-Davies: On a point of order. It might be for the convenience of the House and probably also for the convenience of the Financial Secretary if we traverse also the ground covered by Amendment No. 50. Amendments Nos. 10, 11 and 12 deal with a straight tax of £12 10s. The Government, after these Amendments had been tabled, tabled Amendments to reduce the amount to £15 in respect of a holiday season licence. So all the Amendments go together.
  Mr. Speaker: This makes perfect sense to me, if there is no objecion from the Government. So we will take also Amendment No. 15, in page 10, line 18, at end insert:
  player machines arising on Amendment No. 16. The debates can in that way be channelled into a fairly narrow compass. The present question is, so to speak, the main question.
  Our Amendment would provide that all 1d. machines should pay a flat-rate tax of £12 10s. Following a deputation with which I saw the Financial Secretary, the right hon. Gentleman posed what seemed to be a fair question. The Government wished to hit this trade as hard as if it were carrying a tax similar to the tax on whisky, that is to say, to the maximum amount without at the same time leading to the law of diminishing returns. Therefor, there came the difficult question of deciding what would be the sum which would extract the last drop from the trade without sending it into bankruptcy. The figure we came up with was £12 10s. for all 1d. and 3d machines in the country, leaving the other machines, the 6d. machines, to bear the high impost demanded of them by the Government.
  Why did the Government go so hopelessly wrong in grossly overtaxing this trade? That they did so is evident from Amendment No. 15, the holiday season licence at £41 5s., and the new rate of £15. True, they have taken two steps for which they deserve to be congratulated. First, they have introduced the holiday season licence which will assist seasonal areas and seaside resorts and do something to enable a number of operators to continue in business, although many will still go into liquidation. Second, they are to be congratulated—or the Financial Secretary is to be congratulated—on listening to the argument and not merely introducing the holiday season licence but bringing the figure down to £15.
  I advance several points to support my figure of £12 10s. These points must be beyond dispute. First, in this trade, unlike others, there is no expansion of custom, no question of increasing turnover. Second, with a machine or amusement with prizes there is a fixed figure which is not passed to the customer. It must be borne by the operator. It follows from that that the tax is entirely met by the operator. Next, the operating overheads amount to about 50 per cent. of the takings.
  Next, in a seaside arcade—the "Dreamlands" and other places in which amusements with prizes are available—there are many machines which are really no more than furniture. Out of the total number of machines some are used heavily and others scarcely at all. To tax them all at the same rate would be unfair. Therefore, in considering whether every machine should be taxed at a flat rate of £12 10s., one takes into account that some machines are what is known in the trade as mere furniture. It will be difficult to get rid of them, and I have taken that into account in assessing the figure.
  Next, there will be a heavy loss of capital on discarded machines. There is a constant turnover of investment capital. What the Treasury forgets is that in many cases it is dealing with machines which are novelties, lasting for a mere year or two. The capital involved is very great. The machines cost from £200 to £2,000.
  It must also be borne in mind that purchase tax of 36⅔ per cent. is paid on
  732
  all these machines, and, perhaps more important, that if we reduce the overall number the Treasury will lose not only the purchase tax but the income tax and corporation tax, and the revenue to the local authority from the seaside piers will also be lost. All these points must be borne in mind in considering the appropriate level of taxation.
  In certain holiday camps and selected seaside resorts, a number of arcades and operators of renown have a captive audience. Butlins is one example, with a large captive audience. The figures we supplied to the Treasury came from its concession agreements, together with those of the British Automatic Company and others, so that the Treasury could see the highest figures which could be attained, where there is a substantial, steady audience. The profits are higher there.
  What will be the effect if the tax is not reduced to the best effective level, which we say is no more than £12 10s. for the penny machines? First, there will be the ruin of the rapidly building export trade. Second, there will be the loss of the present import-saving.
  The purchase tax paid by the two main companies exceeded £2 million last year. Those companies were Bell Fruit and Automatic Coin Equipment. The foreign currency saving by Bell Fruit alone as a result of the reduced imports of American, Australian and Japanese machines was more than £4 million in the past 18 months, and in the case of Automatic Coin Equipment the original estimates for exports in 1969 are over £6 million.
  In 1968 Phonographic exported £315,000-worth of machines, and Automatic Coin Equipment more than £250,000-worth. Those figures have not been appreciated by the Treasury. They were not available to it at the time it introduced these measures. Why was not there consultation with the trade in 1968 or this year before the Budget, as there was in 1966 when the Government announced before the Budget that they would impose certain duty? The result has been that the Treasury has imposed hopelessly unrealistic rates of tax on the industry, which will mean many companies going into liquidation.
  The danger is considerable in the case of the Crompton factory in my constituency. I have grave doubts as to whether

  733
  it will be able to continue the export of machines and the import-saving it has developed.
  I have pointed to the general criteria which should have been taken into account but have not. There are many such factors to which I could refer, in addition to those I have mentioned. I want briefly to give only one or two examples which I think will appeal to the House. At 15, Marine Terrace, Margate, there is a small operator. He has 90 machines at 1d. If he obtains a holiday season licence, under Amendment No. 15 that means paying £1,350. He has 11 machines at 6d., which means paying £1,650. Therefore, on the Government Amendment the tax he would have to pay is a minimum tax of £3,000 for the coming year.
  If he were to get an ordinary licence—and we believe that this should be carried through for the 1d. machines—he would have to pay £6,750 for 90 such machines. But he can operate only on a holiday season licence. Even by paying £3,000, this man's gross takings, according to a chartered accountant, are £4,325. After deducting overheads and when he has paid his taxes, he will be unable to operate even under the Government Amendment. That is why I said that, when we provided for £12 10s. right the way through, we were working to the largest possible figure based on the same sort of inequities we have had to suffer from the whisky tax.
  Mr. Russell Kerr: Does it not occur to the hon. Gentleman that perhaps this man is operating an uneconomically large number of machines?
  Mr. Rees-Davies: It is not large. An establishment with 90 machines at 1d. and 10 at 6d. is rather small. In the main, these places are bigger. Most of the concessionaires operate a great many more. It is the small operator with 90 or 100 machines who is going to go into liquidation. The big companies operate over 20 to 25 sites located all over the country. Some pay very well and others do not, but the companies can afford to carry from the profits of their best what I would call losses on the others.
  Unfortunately, the figures show that there are 450 to 500 sites in the seaside
  734
  resorts. These are figures which the Government have not obtained but which are available to the trade associations. They show that three-quarters of these 450 to 500 are site operators with not more than one or two sites. It is these people who are going into liquidation. It is the small man who will go into liquidation and the big man who will survive.
  I give the example of Butlin's camp at Ayr, with 30,000 campers a year and, therefore, a captive audience. It has 550 Id. machines which, at 15.s., gives £7,725; the 30 machines at 6d. give £2,500 and the tax which will be borne is £10,000 a year on the new Government Amendment. The net profit to the concessionaire in that case—Mr. Peter Manning—is only £9,000, so that the tax to be paid will still be higher than the whole of the net profit. It will mean that Butlin's will have to cut down the charge they make to the concessionaire and there will be little profit in it for either of them.
  Let not the Government think they are being generous with their Amendment. It is an endeavour to proceed along the right lines. It will assist with the holiday season licences for penny machines, but it will still mean the end of the others. No concession is given—as in the case of Amendment No. 10, which would reduce the level from £150 to £75—for 3d. machines. It still mean; that we shall see, over the next year, the liquidation of many small companies with subsequent loss of purchase tax, corporation tax and exports—and all this could have been a saving if only the Government had properly consulted the industry before they came forward with their Budget.
  9.45 p.m.
  Mr. Norman Miscampbell: I appreciate that the time of the House is short and I intend to be brief. I wish to make one general observation and one particular observation on the Amendment. I support the Amendment because I should like to see the lowest possible rate of taxation upon these machines. In no sense can 1d. machines in arcades and in seaside resorts be described as hard gambling, or as gambling machines of any description. I find it incredible that they should be subject to any form of taxation. If there is to be taxation, then this Amendment reducing the tax to £12 10s. is to be welcomed.

  735
  My particular point is this. Most arcades have a variety of machines, 1d., 2d., or 3d. machines. As I understand the position—and I should be grateful for correction if I am wrong—a person can have as many ld. machines as he likes, but if he has one or two 2d. or 3d. machines among them he will not be entitled to the concession which is later to be made of £15 for all of them. I see the Financial Secretary is nodding his head.
  If that is the position, those who operate small arcades will inevitably find that they have expensive machines which take 2d. or 3d., and, if they are to get the concession, they will have to scrap these most expensive machines. This is neither in the interest of the Government nor in the interest of the industry.
  I deplore the tax that has been imposed upon these small machines for the reasons which I have given. I can see no reason for applying a tax on gambling to these machines, and I should like to have an assurance that consideration will be given to making sure that where there are mixed arcades the whole arcade will not be taxed as it is under the present provisions, but that the machines will be taxed independently.
  Sir S. McAdden: I recognise that this is a considerable reduction on the original fee proposed of £75 per machine. That shows how ridiculous was the original proposal and how out of touch with reality were those who proposed it. The proposal to reduce the tax to £15, while acceptable, should not preclude us from arguing that it is still a bit unrealistic.
  I do not want to bore the House with mental arithmetic, but £15 in pennies is 3,600 pennies, so to collect in the machine the £15 licence fee it is necessary to have 3,600 pennies going into the machine, but that is not the end of the story. People will not keep on putting pennies into the machine unless they get something out. The Gaming Board is hoping to introduce legislation to make it obligatory for 85 per cent. of what goes in to come out in prizes.
  It is not just a matter of 3,600 pennies going into a machine. About 24,000 pennies must go into each machine before the operator can achieve the £15 he needs to be able to pay the licence fee. He
  736
  then has to pay his overheads. A sum as large as about 24,000 pennies is equal to 400 5s. bags of copper—a tea-chest full of coppers. It takes a long while to get all those coppers together.
  The Treasury may feel that it is being generous, but it is certainly putting a heavy burden on amusement arcade operators in the country who have no other means of livelihood than their amusement arcades and rely upon people visiting them. I am grateful for what the Treasury has done, but amusement arcade operators still carry a severe load.
  My hon. Friend the Member for Blackpool, North (Mr. Miscampbell) referred to the people who within the law have purchased expensive machines to take 3d. and 6d. and who are now to be prevented from using them because of the prohibitive licence fee they will have to pay if they wish to continue using them. They cannot even sell the machines because nobody will buy them.
  Will not the Treasury have another look at this matter? They started off well. They have come down from £75, which was absurd, to £15, which is becoming reasonable. Why not give operators the other £2 10s.? If the Treasury will be happy and accept the Amendment, I will be happy, too.
  Dame Irene Ward: This is a rather new subject for me to speak upon. I am not acquainted with all the mathematical calculations of these machines. But when I see the figures relating to amusement arcades put to me by the local authorities in my area, I wonder whether this is not also a new subject for the Financial Secretary. Although I rarely win a battle with the Fnancial Secretary—we all think that he is pretty good at argument, and it is difficult to get on top of him—I would point out that a concession is no concession at all if it does not keep people in business. It is so near and yet so far away from filling the bill.
  I cannot understand how anybody as expert as the Financial Secretary could ever have permitted himself to impose taxation on some of these small people who make a great contribution to the seaside resorts. The duty that he is imposing is much more than the gross takings. I know that I must not pursue this subject, but I now know why our

  737
  whole financial position is in such a muddle. I cannot believe that this duty was based on the Financial Secretary's own calculations because he is too clever to have made such a mistake. It must be the mistake of those who advise him.
  He has certainly never consulted me about this matter. I am a good representative of my own seaside resorts, and I could have told him all about the seaside resorts on the North-East Coast, about our record, our high level of unemployment and the need to attract tourists. We want every penny we can get out of the Government. If he had asked me what would happen as a result of this ridiculous level of taxation, I gladly would have given him an answer.
  A well known seaside resort in my constituency is Whitley Bay. Through its town clerk, the urban district council tells me that this duty will have a devastating effect on that little seaside resort which already has to cope with many difficulties which I need not recapitulate. It is tremendously important for the Government to give better reliefs to business people in such places in order to help keep them in business. In the North, we always hear that people do not come to our seaside resorts because of the climate. This Government think that they are very grand, but even they cannot alter the climate. However, they can help support the attractions of our resorts.
  I propose to quote one or two figures, although I am sure that the Financial Secretary will tell me that I have them wrong and have not taken account of concessions which the Government have already given. He is probably right, because I find it very difficult to follow them. In my constituency, there are the two resorts of Tynemouth and Whitley Bay, but the same argument applies to the whole of Northumberland and even to places in Scotland which will be knocked out by this unendurable imposition.
  In the case of the amusement arcade in Tynemouth, the duty required will be £9,550. However, last year's gross takings were only £3,027. If the taxation of the rest of the country is based on that kind of assessment, it is no wonder that we are going down the drain. It is idiotic for people to be asked to pay what it is quite outside their capacity to pay.
  738
  In Whitley Bay, there are some pleasure gardens which are greatly enjoyed by everyone. In the gardens, there are three sites containing 1d. amusement machines. The total rental payable to Whitley Bay Pleasure Gardens for the 1968 half-year was £1,600. The duty on the machines would amount to £21,500. The gross takings from the three arcades last year amounted to £6,750.
  Very often in this House, I feel like Alice in Wonderland while this Government are in control. Faced with this ridiculous tax I feel like the Cheshire Cat. Alice in Wonderland, the White Rabbit, the Dormouse, the Mad Hatter and everyone else at once. I cannot make sense of the Government's proposal. After all, these small places are struggling to make a profit and to create something of a seaside atmosphere in an effort to attract tourists.
  I am sure that the Financial Secretary does not work on the basis of being taxed more than he earns. When taxation is imposed, surely it should be at a level which is within the capacity of people to pay. I know that the Treasury is very keen on analyses. It would be interesting to see a statistical return showing how many other undertakings are taxed more than their gross earnings.
  We are told that we cannot have the Prime Minister visit us. Speaking for myself, I would prefer to have the Financial Secretary come instead. I would be delighted to take him round our amusement arcades and let him see for himself the difficulties that they face. In any event, I hope that when he has heard all our pleas he will have some sympathy.
  10.0 p.m.
  Mr. Harold Lever: I can think of few things more delightful than to accept the suggestion of the hon. Member for Tyne-mouth (Dame Irene Ward) for a conducted tour of the Whitley Bay and ancillary Tyneside and Northumberland arcades. But I should like to assure the hon. Lady that I had the same approach to the matter that she has displayed in her speech. I was concerned not to place upon these seaside operators an intolerable burden which they could not possibly survive in all cases. I consulted with experts in those areas, namely, the operators and their associations. I am quite satisfied, despite the figures put forward

  739
  by the hon. Lady, which may have been related to the old £75 duty, that seaside operators with 1d. operating machines, will be able to carry on their businesses and meet the tax on the new holiday season basis.
  The predictions of ruin for them or for anybody else will prove, in the event, to be misplaced. We are not in the habit of imposing taxes for the fun of winding people up. We impose duties in the hope of getting them. Hon. Members who have experience of the Customs—and the Inland Revenue, for that matter—know that, in general, our duties are so tuned that we do not kill off the business from which the duty derives.
  I have looked into the Amendments with great care, but I do not accept, as a matter of judgment and information, that any of the duties are too harsh or that the concession made for the holiday season proves that there is something wrong in the original rate of duty. The original rate of duty still remains at £75 on a 1d. machine when it is operated the whole year round. We had to do a little thinking before we got to a formula which could be justified and tailored to the needs of the seasonal holiday operators. That is why we get this exceptionally favourable rate which I have outlined.
  I must ask the House to reject Amendments Nos. 10, 11 and 12. I hope that it will support the position taken by the Government. The House can rest assured that the ruin predicted from the rates of duty, as amended, will not eventuate.
  Mr. Patrick Jerkin: I am sure that the House listened to the Financial Secretary with a growing sense of disillusionment. That he should be so insensitive to the figures quoted by many of my hon. Friends is, for him, surprising.
  The right hon. Gentleman said that he has studied the figures. But he knows that, even with the massive reduction which the Government have made from the completely ludicrous figure that they were proposing to charge when the Bill was first introduced, it still represents a substantial slice of the average turnover of the machines at these seaside arcades. I have the impression that, before the Bill was introduced, officials of the Customs and Excise wandered round Soho, made a calculation of what goes into the machines in those exceptional arcades, and assumed that what would be appropriate there would be appropriate throughout the rest of the country.
  I suppose that we must be grateful for small mercies. The Financial Secretary, having seen representatives of the industry, now realises that, whatever else was right, that was a nonsense. But he has not gone far enough. The case made by my hon. Friends, many representing seaside constituencies, was very strong. We are bitterly disappointed that the right hon. Gentleman has not felt able to meet it. I believe that we are entirely justified in pressing the Amendment to a Division. I hope that my hon. Friend the Member for the Isle of Thanet (Mr. Rees-Davies) will think it right to do that.
  Question put, That the Amendment be made:—
  The House divided: Ayes 172, Noes 246.

  Godber, Rt. Hn. J. B.

  Maclean, Sir Fitzroy

  Rossi, Hugh (Hornsey)

  Goodhart, Philip

  McMaster, Stanley

  Russell, Sir Ronald

  Gower, Raymond

  Macmillan, Maurice (Farnham)

  Scott-Hopkins, James

  Gresham Cooke, R.

  McNair-Wilson, Michael

  Sharples, Richard

  Grieve, Percy

  Maddan, Martin

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

  Gurden, Harold

  Maginnis, John E.

  Silvester, Frederick

  Hall, John (Wycombe)

  Marten, Neil

  Smith, Dudley (W'wick & L'mington)

  Hall-Davis, A. G. F.

  Maude, Angus

  Smith, John (London & W'minster)

  Harvey, Sir Arthur Vere

  Maxwell-Hyslop, R. J.

  Speed, Keith

  Harvie Anderson, Miss

  Mills, Peter (Torrington)

  Stainton, Keith

  Hawkins, Paul

  Mills, Stratton (Belfast, N.)

  Stodart, Anthony

  Heald, Rt. Hn. Sir Lionel

  Miscampbell, Norman

  Stoddart-Scott, Col. Sir M.

  Heseltine, Michael

  Mitchell, David (Basingstoke)

  Taylor, Sir Charles (Eastbourne)

  Higgins, Terence L.

  Monro, Hector

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

  Hiley, Joseph

  Montgomery, Fergus

  Taylor, Frank (Moss Side)

  Hill, J. E. B.

  More, Jasper

  Temple, John M.

  Hirst, Geoffrey

  Morgan, Geraint (Denbigh)

  Tilney, John

  Holland, Philip

  Morgan-Giles, Rear-Adm.

  Turton, Rt. Hn. R. H.

  Hordern, Peter

  Morrison, Charles (Devizes)

  van Straubenzee, W. R.

  Hornby, Richard

  Mott-Radclyffe, Sir Charles

  Vaughan-Morgan, Rt. Hn. Sir John

  Howell, David (Guildford)

  Munro-Lucas-Tooth, Sir Hugh

  Vickers, Dame Joan

  Hunt, John

  Nabarro, Sir Gerald

  Waddington, David

  Hutchison, Michael Clark

  Nott, John

  Walker, Peter (Worcester)

  Iremonger, T. L.

  Onslow, Cranley

  Walker-Smith, Rt. Hn. Sir Derek

  Jenkin, Patrick (Woodford)

  Osborne, Sir Cyril (Louth)

  Ward, Dame Irene

  Jones, Arthur (Northants, S.)

  Page, Graham (Crosby)

  Weatherill, Bernard

  Jopling, Michael

  Peel, John

  Wells, John (Maidstone)

  Joseph, Rt. Hn. Sir Keith

  Percival, Ian

  Whitelaw, Rt. Hn. William

  Kaberry, Sir Donald

  Pike, Miss Mervyn

  Wiggin, A. W.

  Kershaw, Anthony

  Pink, R. Bonner

  Williams, Donald (Dudley)

  Kimball, Marcus

  Pounder, Rafton

  Wilson, Geoffrey (Truro)

  Kirk, Peter

  Powell, Rt. Hn. J. Enoch

  Wolrige-Gordon, Patrick

  Kitson, Timothy

  Price, David (Eastleigh)

  Woodnutt, Mark

  Knight, Mrs. Jill

  Prior, J. M. L.

  Worsley, Marcus

  Lancaster, Col. C. G.

  Pym, Francis

  Wright, Esmond

  Lane, David

  Ramsden, Rt. Hn. James

  Legge-Bourke, Sir Harry

  Rees-Davies, W. R.

  TELLERS FOR THE AYES:

  Longden, Gilbert

  Renton, Rt. Hn. Sir David

  Mr. Anthony Grant and

  McAdden, Sir Stephen

  Ridley, Hn. Nicholas

  Mr. Anthony Royle.

  MacArthur, Ian

  Ridsdale, Julian

  NOES

  Abse, Leo

  Cronin, John

  Forrester, John

  Allaun, Frank (Salford, E.)

  Crosland, Rt. Hn. Anthony

  Fowler, Gerry

  Alldritt, Walter

  Crossman, Rt. Hn. Richard

  Freeson, Reginald

  Anderson, Donald

  Dalyell, Tam

  Galpern, Sir Myer

  Archer, Peter

  Davidson, Arthur (Accrington)

  Gardner, Tony

  Armstrong, Ernest

  Davidson, James (Aberdeenshire, W.)

  Gray, Dr. Hugh (Yarmouth)

  Ashley, Jack

  Davies, Ednyfed Hudson (Conway)

  Gregory, Arnold

  Atkins, Ronald (Preston, N.)

  Davies, G. Elfed (Rhondda, E.)

  Griffiths, David (Rother Valley)

  Atkinson, Norman (Tottenham)

  Davies, Dr. Ernest (Stretford)

  Griffiths, Eddie (Brightside)

  Barnett, Joel

  Davies, Rt. Hn. Harold (Leek)

  Griffiths, Will (Exchange)

  Baxter, William

  Davies, Ifor (Gower)

  Hamilton, William (Fife, W.)

  Beaney, Alan

  de Freitas, Rt. Hn. Sir Geoffrey

  Hannan, William

  Bence, Cyril

  Delargy, Hugh

  Harper, Joseph

  Benn, Rt. Hn. Anthony Wedgwood

  Dell, Edmund

  Harrison, Walter (Wakefield)

  Bessell, Peter

  Dempsey, James

  Haseldine, Norman

  Bidwell, Sydney

  Dewar, Donald

  Hazell, Bert

  Binns, John

  Diamond, Rt. Hn. John

  Healey, Rt. Hn. Denis

  Bishop, G. S.

  Dickens, James

  Heffer, Eric S.

  Blackburn, F.

  Dobson, Ray

  Henig, Stanley

  Blenkinsop, Arthur

  Doig, Peter

  Hobden, Dennis

  Boardman, H. (Leigh)

  Driberg, Tom

  Hooley, Frank

  Booth, Albert

  Dunn, James A.

  Houghton, Rt. Hn. Douglas

  Boston, Terence

  Dunnett, Jack

  Howarth, Robert (Bolton, E.)

  Boyden, James

  Dunwoody, Mrs. Gwyneth (Exeter)

  Howell, Denis (Small Heath)

  Bradley, Tom

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

  Hoy, Rt. Hn. James

  Bray, Dr. Jeremy

  Eadie, Alex

  Hughes, Rt. Hn. Cledwyn (Anglesey)

  Brooks, Edwin

  Edelman, Maurice

  Hughes, Hector (Aberdeen, N.)

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

  Edwards, Robert (Bilston)

  Hughes, Roy (Newport)

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

  Edwards, William (Merioneth)

  Hunter, Adam

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

  Ellis, John

  Irvine, Sir Arthur (Edge Hill)

  Buchan, Norman

  English, Michael

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

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

  Ennals, David

  Jay, Rt. Hn. Douglas

  Butler, Herbert (Hackney, C.)

  Ensor, David

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

  Callaghan, Rt. Hn. James

  Evans, Fred (Caerphilly)

  Jenkins, Rt. Hn. Roy (Stechford)

  Carmichael, Neil

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

  Johnson, Carol (Lewisham, S.)

  Carter-Jones, Lewis

  Finch, Harold

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

  Chapman, Donald

  Fitch, Alan (Wigan)

  Jones, Dan (Burnley)

  Conlan, Bernard

  Fletcher, Ted (Darlington)

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

  Craddock, George (Bradford, S.)

  Foot, Michael (Ebbw Vale)

  Jones, J. Idwal (Wrexham)

  Crawshaw, Richard

  Ford, Ben

  Jones, T. Alec (Rhondda, West)

  Judd, Frank

  742

  743

  Kenyon, Clifford

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

  Ryan, John

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

  Molloy, William

  Shaw, Arnold (Ilford, S.)

  Kerr, Russell (Feltham)

  Moonman, Eric

  Sheldon, Robert

  Lawler, Wallace

  Morgan, Elystan (Cardiganshire)

  Shore, Rt. Hn. Peter (Stepney)

  Lawson, George

  Morris, Alfred (Wythenshawe)

  Short, Mrs. Renée (W'hampton, N.E.)

  Leadbitter, Ted

  Morris, Charles R. (Openshaw)

  Silkin, Rt. Hn. John (Deptford)

  Lee, Rt. Hn. Jennie (Cannock)

  Morris, John (Aberavon)

  Silkin, Hn. S. C. (Dulwich)

  Lee, John (Reading)

  Moyle, Roland

  Silverman, Julius

  Lever, Rt. Hn. Harold (Cheetham)

  Murray, Albert

  Skeffington, Arthur

  Lewis, Arthur (W. Ham, N.)

  Newens, Stan

  Slater, Joseph

  Lewis, Ron (Carlisle)

  Noel-Baker, Rt. Hn. Philip

  Small, William

  Lipton, Marcus

  Oakes, Gordon

  Spriggs, Leslie

  Loughlin, Charles

  O'Malley, Brian

  Steel, David (Roxburgh)

  Lyon, Alexander W. (York)

  Oram, Albert E.

  Steele, Thomas (Dunbartonshire, W.)

  Mabon, Dr. J. Dickson

  Summerskill, Hn. Dr. Shirley

  McBride, Neil

  Orbach, Maurice

  Taverne, Dick

  McCann, John

  Orme, Stanley

  Tinn, James

  MacColl, James

  Oswald, Thomas

  Tuck, Raphael

  Macdonald, A. H.

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

  Urwin, T. W.

  McGuire, Michael

  Owen, Will (Morpeth)

  Varley, Eric G.

  McKay, Mrs. Margaret

  Page, Derek (King's Lynn)

  Wainwright, Richard (Colne Valley)

  Mackenzie, Alasdair (Ross & Crom'ty)

  Palmer, Arthur

  Wallace, George

  Mackenzie Gregor (Rutherglen)

  Park, Trevor

  Watkins, David (Consett)

  Mackie, John

  Parker, John (Dagenham)

  Watkins, Tudor (Brecon & Radnor)

  Mackintosh, John P.

  Parkyn, Brian (Bedford)

  Wellbeloved, James

  Maclennan, Robert

  Pearson, Arthur (Pontypridd)

  Whitaker, Ben

  McMillan, Tom (Glasgow, C.)

  Peart, Rt. Hn. Fred

  Whitlock, William

  McNamara, J. Kevin

  Pentland, Norman

  Wilkins, W. A.

  Mahon, Peter (Preston, S.)

  Perry, Ernest G. (Battersea, S.)

  Willey, Rt. Hn. Frederick

  Mahon, Simon (Bootle)

  Perry, George H. (Nottingham, S.)

  Williams, Alan (Swansea, W.)

  Mallalieu, E. L. (Brigg)

  Price, Christopher (Perry Barr)

  Williams, Alan Lee (Hornchurch)

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

  Price, Thomas (Westhoughton)

  Williams, Clifford (Abertillery)

  Manuel, Archie

  Price, William (Rugby)

  Williams, Mrs. Shirley, (Hitchin)

  Mapp, Charles

  Probert, Arthur

  Willis, Rt. Hn. George

  Marks, Kenneth

  Rankin, John

  Wilson, William (Coventry, S.)

  Marquand, David

  Rees, Merlyn

  Winstanley, Dr. M. P.

  Marsh, Rt. Hn. Richard

  Roberts, Albert (Normanton)

  Woodburn, Rt. Hn. A.

  Mason, Rt. Hn. Roy

  Roberts, Rt. Hn. Goronwy

  Woof, Robert

  Maxwell, Robert

  Roberts, Gwilym (Bedfordshire, S.)

  Wyatt, Woodrow

  Mellish, Rt. Hn. Robert

  Rodgers, William (Stockton)

  Mendelson, John

  Roebuck, Roy

  TELLERS FOR THE NOES:

  Mikardo, Ian

  Rogers, George (Kensington, N.)

  Mr. J. D. Concannon and Mr. Charles Grey.

  Miller, Dr. M. S.

  Rose, Paul

  Milne, Edward (Blyth)

  Ross, Rt. Hn. William

  Amendments made: No. 13, in page 10, line 16, leave out 'a' and insert 'an ordinary'.
  No. 14, in line 17, leave out 'a' and insert an ordinary'.
  No. 15, in line 18, at end insert:
  (8) A holiday season licence shall be granted only for premises as to which the Commissioners are satisfied that they will, on the date on which the licence is first in force, have local authority approval under the Gaming Acts by virtue of paragraph 5 or 6 of Schedule 11 to this Act; and—

  (a) the licence shall be one which authorises the provision only of penny machines up to a number specified in the licence; and

  (b) the duty on the licence shall be £15 multiplied by that number.—[Mr. Harold Lever.]

  10.15 p.m.
  Mr. Harold Lever: I beg to move Amendment No. 16, in page 10, line 23, leave out from beginning to 'machine' and insert:

  (a) in the case of a penny machine, shall be treated for the purposes of a holiday season licence as a number of penny machines equal to the number of persons who can play the machine simultaneously;

  (b) in the case of a penny machine or any other.

  Mr. Speaker: It will be convenient if we also discuss with this the sub-Amendment to Amendment No. 16, after 'to', in paragraph (a), insert `one quarter of'.
  Mr. Lever: It will also be convenient if we take Government Amendments Nos. 17 and 18.
  This Amendment deals with multiple penny machines and it makes consequential changes in the subsection dealing with multiple machines generally. For the purposes of the holiday season licence—[Interruption.]— multiple penny-play machines are treated as the number of penny machines equal to the number of playing positions.
  Mr. Speaker: Order. Only one Member can be on his feet at once in the House.
  Mr. Lever: For the purpose of a holiday season licence multiple penny play machines are treated as the number of penny play machines equal to the number of playing positions, while for the purpose of an ordinary licence they are
  746
  treated as the number of "lower rate" machines equal to the number of playing positions.
  Mr. Rees-Davies: I hope that the Minister will now take a little time to consider what he has to say about this, because it is of fundamental importance to the trade. It is the one remaining matter about which I have already seen him. We must have this explicit. The position is that the Government are asking the House to say with that where the penny machine is a multi-player, that is to say, a Derby racer or one of those machines upon which a great many people may be invited to participate, we shall multiply what is received by way of tax by the number of those persons who can play the machine simultaneously.
  The Amendment we have proposed after considerable discussion with all those engaged in the trade suggests that it would be reasonable to apply a tax based on a ratio of one-quarter of the total positions for play. It would be one-quarter of the total number of positions for play.
  Let me explain what this means. There were one or two misconceptions in Committee. May I tell the Financial Secretary that only four machines were ever made which could take 40 players? None of those is now in use, so that we can get rid of that. In Committee the right hon. Gentleman was saying, understandably, that he thought that if there could be 40 players in a place there must be a good measure of profit and he was no doubt thinking that there would be some expensive machines. I produced one or two, the Derby racer, the vintage car and others.
  We have to get the full picture. At the seaside these are put in because they are extremely attractive. They are there largely so that people can move in and watch them. In most cases they have a small area for play. A Vintage Racer machine might have 15 official positions but the number of people playing at any one time is normally between four and six. Therefore, only a small proportion of machines which have 15 or 20 positions for play are operated at any one time. It is wholly inequitable to charge 20 times the amount merely because there are 20 position for play.

  747
  I illustrated the matter in this way. In this House there are a number of positions for play. There are not enough positions for 600 Members to play at one and the same time. The House of Commons is designed to give sympathetic consideration to the fact that when there are 100 to 150 Members present it looks full. The whole idea of this type of machine is to encourage this sense of ambience or fulfilment of many people standing around, but they are not playing. Therefore, we do not get the number of players which the machine prescribes.
  I have had the opportunity to show the Financial Secretary some of the attractive drawings of vintage car machines. I shall refer briefly to one, namely, the vintage car race, similar to the Derby racer. It is a 20 player machine. It has a length of only 9 ft. 9 in. One would be far from cosy if more than 10 people were playing. The duty, if this proposal goes through, will be £300 per annum. The price is £2,780, and it has been estimated that more than one-third of the takings of the machine would go straight to the Government. Some figures which I have extracted from one company show that the takings on their machines, which they loan, were only £46 per machine.
  As the figures are not generally known, the Government may like to have the number of multi-player machines with which they are substantially concerned. There are about 1,000 machines with an average of eight player positions per machine. The Government say that they want to take £120,000 tax on these multi-player machines alone. We say that £30,000 would be more than sufficient if the machines are to continue. They are entirely harmless. Children use them every day. They return tiny prizes. People put in their pennies purely as a harmless flutter for fun. Nobody thought that they would be taxed. If the tax is based on the number of players—15 or 20 players, £15 per player, about £300 tax—they will cease.
  These machines are made in this country, which is an import saving. They are exported in large numbers. Purchase tax of 36⅔ per cent. is paid on them. Surely it is unwise to deprive the Government of the revenue and people of the pleasure of them. All
  748
  that we have to do is to find the right multiple. We have suggested dividing by four. The Government must divide by something, otherwise they will divide their own revenue.
  Dame Irene Ward: It would be helpful to have a definition by the Financial Secretary of what he means by "holiday seasons". Who is talking about holidays—
  Mr. Speaker: Order. With respect, the hon. Lady is on the wrong Amendment. We have disposed of Amendment No. 15, and we are now discussing the tax on the multi-player machine.
  Dame Irene Ward: The Financial Secretary talked about the holiday season multiple player, or whatever it is called, so I think that it would be helpful if he were to tell us for how long the multiple players are played. My part of the world has a much shorter holiday season for the operation of these machines than, perhaps, is the case in the constituency of my hon. Friend the Member for the Isle of Thanet (Mr. Rees-Davies). This provision could be even more unfair to a part of the world with a short holiday season than the one with a longer season. That being the case, perhaps we may know what we mean when we talk of the "holiday season".
  Sir S. McAdden: It is very clear from the Government Amendment that the season about which my hon. Friend the Member for Tynemouth (Dame Irene Ward) asks is the period from 1st March to 31st October. Though that may not seem to be a holiday time, it is to that period that the provision refers.
  I can understand the kind of thinking going on behind the Government's action. They say, "If we tax a machine with one slot at a rate of £15, the tax on a machine with 20 slots should be 20 times as much". That reasoning is based on the assumption that a machine of 20 slots will take 20 times as much money as will a machine with one slot only, but that, if I may say so without offence, shows a lamentable ignorance of what goes on in amusement arcades. It just is not true that the machine with 20 slots takes as much money as the machine with one slot. The machine operators would

  749
  be delighted if it were so, but such is not the case.
  Very largely, these are what are described as "flash" machines. They occupy a certain amount of space, and they attract people. A machine with 20 slots will often have no more than six to ten people playing at one time. That is why our Amendment is designed to reduce the Government's figure by some number or other. We do not say that ours is necessarily the right figure, but we certainly say that 100 per cent. tax on every single slot is not the right way to go about things. We therefore hope that the right hon. Gentleman will bend his mind to forming some different kind of judgment. If the proper tax is not one-quarter of that proposed, it might be one levied on half of the available position. At any rate, let us not tax these people on every playing position, because to do so is grossly unjust.
  Mr. A. P. Costain: Our seaside resorts find some sort of wet weather entertainment necessary to encourage people to visit them, and these arcades make some contribution of that kind. Multi-slot machines give amusement to more people than those who play. They are an attraction and a useful adjunct. If the Chancellor of the Exchequer goes ahead with his present proposal these machines will not be viable, and will have to be removed. The figures involved are not very great, and I appeal to the right hon. Gentleman to see whether he cannot make some contribution to keeping the machines in operation.
  Mr. Robert Cooke: I have seen a large number of these multi-slot machines in operation in holiday resorts and in my constituency. I have never seen all the slots in play at the same time.
  Mr. Harold Lever: I am deeply indebted to the fund of experience contributed by different hon. Members to this debate. I am sure that it will be very helpful, although I must confess that the relation of the functions of the multi-provision machine to hon. Member's positions in the Chambers by the hon. Gentleman the Member for the Isle of Thanet (Mr. Rees-Davies) did not seem to be altogether compelling. At all events, he must explain it to me in greater detail outside the Chamber.
  Mr. Robert Cooke: Only one slot works at once.
  Mr. Lever: No fiscal arrangements of the players have yet been evolved by the Chancellor to keep the number of players to a practical minimum at appropriate times.
  10.30 p.m.
  I hope that the hon. Lady the Member for Tynemouth (Dame Irene Ward) is now satisfied with the holiday season definition.
  Dame Irene Ward: I think it a silly one.
  Mr. Lever: I can only try to please the hon. Lady and her constituents by making the holiday season cover a period from March to the end of October, which I thought would cover the whole range of Whitley Bay excitements and possibilities. If I have not gone far enough I regret it.
  I say this reassuringly on the multi-player position. We are not imposing the duty on the number of penny slots but on the number of playing positions. I assure hon. Members that the Customs and Excise will look at machines literally individually to assess fairly what are the number of playing positions so that we get a realistic approximation in the duty paid to what the machine is expected to take.
  Mr. Rees-Davies: The Department cannot do this horse-trading because the player positions are marked on the machines. Therefore presumably this will be tied to the number set out in the specification. This is the difficulty which Customs and Excise will find unless some criteria is laid down.
  Mr. Lever: The hon. Member is underestimating the capabilities of the Customs. If positions are defined three inches apart, no 40 human beings could play. I am sure that the Customs will be able to decide the number of playing positions. That is more reasonable than having a hypothetical number of three, four or whatever is suggested. No one wants to tax these machines unfairly. They will be taxed on the number of playing positions, not the number of slots or necessarily on theoretical playing positions indicated by white lines. Each machine will be examined and assessed by the number of playing positions.
  Mr. Rees-Davies: The right hon. Gentleman has not dealt with the other point. He recognises, I am sure, that not more than half the possible number will be playing at any one time simultaneously except in the rarest circumstances. It cannot be right to consider this on the number of possible players. That factor must be reduced.
  Mr. Lever: That is true of all other machines. They are not in continuous operation all the time. They are intermittently employed and they are taxed at £15 for a holiday season licence even if used only intermittently.
  Amendment agreed to.
  Further Amendments made: No. 17, in page 10, line 26, after 'treated', insert:
  'for the purposes of an ordinary licence'.
  No. 18, in line 30, leave out from beginning to 'as' and insert:
  'in a case not falling within paragraph (b) of this subsection, shall be treated for the purposes of an ordinary licence'.—[Mr. Harold Lever.]
  Mr. Harold Lever: I beg to move Amendment No. 19, in line 39, at end insert:
  'and for the temporary exemption of certain premises where only penny machines are provided'.
  This places a new provision in the Schedule exempting from gaming machines licence duty from October 1969 on premises which satisfy the conditions relating to holiday season licences.
  Mr. Rees-Davies: Why not all the machines this year? It is to be October 1969. What are they to do in Blackpool and the Isle of Thanet throughout the month of October, 1969? What are they to do in the seaside resorts this year merely because the Government were so incompetent that they did not originally fix it at the end of October instead of at the beginning? Anybody who knows anything about the hotel industry must know that if a new tax is to be introduced it should not be done before the season is over. It is reasonable to say that the Government might have introduced this tax on 31st October instead of on 1st October. The Government are making a concession to the holiday season licence, but nobody will want a licence for one or two weeks in October. The occasional conference, with which
  752
  the House is not infrequently concerned, takes place in some parts into the first few days of October.
  I invite the Chancellor to do what Lord Butler, as he now is, used to do on these occasions—to go to the Box and say, "Surely we can make this concession". This should be started fair and square at the end of the season, at the end of October. It is not sufficient to apply this concession to some people only. Why cannot we wrap this paraphernalia up and start fair and square? It would help, not so much my constituency, but those in the North and elsewhere who have to bear in mind the position of continuing some sort of trade in October and who could not pay these heavy licence fees for a short period.
  Mr. Harold Lever: I cannot grant this concession except to those enjoying the concession on the basis I have already outlined of the holiday licence.
  Amendment agreed to.
  Further Amendments made: No. 20, in page 11, line 4, leave out 'a gaming machine' and insert 'an ordinary'.
  No. 21, in line 9, leave out 'and'.
  No. 22, in line 10, leave out 'such a' and insert ' an ordinary'.—[Mr. Harold Lever.]
  Mr. Harold Lever: I beg to move Amendment No. 23, in page 11, line 15, at end insert
  'and
  (d) at any time when a holiday season licence is in force in respect of any such premises, gaming machines shall not be provided for gaming on those premises except penny machines up to the number specified in the licence'.
  This is to make the holiday season licence effective. It makes it an offence for gaming machines other than penny machines up to the number authorised by the licence to be provided for gaming on premises covered by a holiday season licence.
  Amendment agreed to.

  Schedule 11

    PROVISIONS RELATING TO GAMING MACHINE LICENCE DUTY
    Mr. Harold Lever: I beg to move Amendment No. 93, in page 97, line 10, at end insert:
    10A. During the month of October, 1969, a gaming machine licence shall not be required

    753
    in order to authorise the provision on premises of gaming machines at any time when there are on those premises no such machines other than penny machines; but this exemption applies to premises only at a time when they have local authority approval under the Gaming Acts by virtue of paragraph 5 or 6 of this Schedule.
    Mr. Speaker: With this Amendment the House is taking the sub-Amendment, in line 3, leave out:
    'penny machines; but this exemption applies to premises only at a time when they'
    and insert:
    'machines upon premises which'.
    Mr. Lever: This Amendment adds a new paragraph to the Schedule exempting premises which satisfy the conditions relating to holiday season licences from duty during October, 1969: without this, sites which will enjoy the holiday season concession in future years would need a licence to operate during the last few days of this year's holiday season.
    Amendment agreed to.
    Further Amendments made: No. 94, in page 97, line 28, leave out 'a gaming machine' and insert 'an ordinary'.
    No. 95, in line 32, leave out from 'the' to 'licence' in line 34 and insert:
    'date on which the licence is to be in force; and, in the case of an ordinary'.
    No. 96, in line 36, at end insert:
    (2) An application for a holiday season licence in respect of any premises shall be made not less than fourteen days before the date on which the licence is to be first in force.
    No. 97, in page 97, line 41, leave out 'A' and insert 'An ordinary'.
    No. 98, in page 97, line 42, leave out 'a' and insert 'an ordinary'.—[Mr. Harold Lever.]
    Mr. Harold Lever: I beg to move Amendment No. 99, in page 97, line 44, at end insert:
    (3) A holiday season licence shall expire at the end of 31st October next after the date on which it is expressed to take effect.
    (4) If a holiday season licence is granted in respect of any premises, any ordinary licence in respect of those premises shall (if not surrendered under paragraph 17 of this Schedule) become void as from the day on which the holiday season licence is first in force.
    (5) If an ordinary licence (whole-year or half-year) is granted in respect of any premises, any holiday season licence in respect of those premises shall become void as from the day on which the ordinary licence is first in force.
    754
    This deals with the expiry of holiday licences. It is purely consequential.
    Amendment agreed to.
    Further Amendment made: No. 100, in page 98, line 17, leave out 'A' and insert 'An ordinary'.—[Mr. Harold Lever.]
    Mr. Harold Lever: I beg to move Amendment No. 101, in page 98, line 27, at end insert:
    (3) A holiday season licence may be amended under this paragraph so as to increase the number of penny machines which are authorised by the licence for the premises in question.
    This Amendment and Nos. 102, 103, 104, 105 and 106 govern minor administrative conveniences in the administration of the holiday licence.
    Amendment agreed to.
    Further Amendment made: No. 102, in page 98, line 37, leave out 'a' and insert 'an ordinary'.—[Mr. Harold Lever.]
    Mr. Harold Lever: I beg to move Amendment No. 271, in page 99, line 5, at end insert:
    Existing supply agreements
    16A.—(1) The following provisions of this paragraph shall have effect where a person (called 'the hirer') has, before 1st October 1969, entered into an agreement with another person (called 'the supplier') for the provision by the supplier on any premises of a gaming machine during a period beginning before, and extending beyond, that date.
    (2) If the consideration for the provision of the gaming machine was determined on the assumption that someone other than the hirer would pay the duty on any gaming machine licence required for the premise; under section 14 of the Finance Act 1966, and the hirer has paid, or will be accountable for, the corresponding duty under section 5 of this Act, the hirer shall be entitled to recover from the supplier such amount, or to make such reduction in periodical payments due from him under the agreement, as may be agreed between them (or, in default of agreement, as may be determined by the appropriate court) to be fair in all the circumstances having regard in particular—

    (a) to the period for which, under the agreement, the supplier is to provide a gaming machine as aforesaid on the premises in question; and

    (b) to the incidence of the duty under the said section 14 and section 5 as respects that period.

    (3) In the last foregoing sub-paragraph, 'the appropriate court' means—

    (a) where the premises in question are in England or Wales, the county court; and

    755

    (b) where the said premises are in Scotland, the sheriff.

    Mr. Patrick Jenkin: The Financial Secretary should offer some explanation of an entirely new paragraph in the Schedule.
    Mr. Lever: I beg the pardon of the House. Perhaps I should give the reason for the Amendment.
    The Amendment has been sought by the Working Men's Club and Institute Union Ltd., which raised the matter at a late stage. Working men's clubs commonly hire machines from firms of suppliers, and some clubs have entered into long-term agreements providing for the payment of a hiring charge at a rate which includes an element in respect of the existing gaming machine licence duty, under the Finance Act 1966, but without specifically saying so. Though the matter has not been raised by other clubs, it seems likely that some of them will have similar contracts.
    The agreements in question commonly provide for the payment of a monthly rental with no provision for amending it in changed circumstances. Under the Finance Act 1966, the licence duty, of £75 per year per machine, is paid by the supplier. Under the provisions of the present Bill, the duty may be paid by one of a number of people, including the supplier and the hirer, though in practice, so far as working men's clubs are concerned, it is likely to be paid by the secretary of the club and will certainly be so paid where the secretary hires two machines from different suppliers. Moreover, since the supplier could hold the club to the terms of its agreement, it would be possible for unscrupulous suppliers to refuse to take out a licence in future, leaving it to the secretary to do so, but without reducing the hiring charge to take that into account. This would be an unfair financial hardship to the club.
    The Amendment provides for existing contracts to be varied in the light of the changed circumstances in a way which would be fair to both parties. If the parties cannot agree, the matter is to be determined by the court. A similar provision was included in the Finance Act 1966, when the duty was first introduced.
    756
    I hope that that will meet with the approval of the House. It amounts to allowing an appropriate adjustment of agreements to take into account the imposition of the duty, which might have a very odd effect under pre-existing agreements were the right to modification not thus incorporated.
    Amendment agreed to.
    Further Amendments made: No. 103, in page 99, line 6, leave out 'a' and insert 'an ordinary'.
    No. 104, in page 99, line 12, after 'officer 'insert 'either—(a)'.
    No. 105, in page 99, line 15, at end insert:
    'or
    (b) that as from the date of the surrender there will be in force in respect of those premises a holiday season licence'.
    No. 106, in page 99, line 37, after second 'rate' insert:
    'or. as the case may be, as penny machines'. —[Mr. Harold Lever.]

  Clause 6

    VEHICLE LICENCES
    10.45 p.m.
    The Joint Parliamentary Secretary to the Ministry of Transport (Mr. Bob Brown): I beg to move Amendment No. 24, in page 12, line 15, leave out 'subsection' and insert 'subsections'.
    I understand that we are considering at the same time Government Amendment No. 25.
    Although these Amendments are complex in form, they are comparatively simple in effect. Their object is to make a slight extension of the exemption from vehicle excise duty which is provided in Clause 6(1) to vehicles purchased here by overseas residents. The present provisions of Clause 6(1) deal with the great majority of such vehicles, private cars. When such vehicles are purchased here by overseas residents, purchase tax can be remitted by the Customs under Section 23 of the Purchase Tax Act, 1963. This, of course, is undoubtedly an incentive to the sale of British cars, and, indeed, some 20,000 cars are sold each year under these arrangements.
    As a further incentive, Clause 6(1) exempts these vehicles also from vehicle excise duty. This avoids the troublesome

    757
    business for foreign visitors of having to take out vehicle excise licences for four or twelve months and then claiming a refund when they leave with the car.
    A small number of vehicles—probably no more than 500—purchased by overseas residents are not subject to purchase tax. Examples of the sort of vehicles we have in mind are motorised caravans and personnel carriers of the large Land Rover type. Since Clause 6(1) is related to vehicles on which purchase tax is remitted, the vehicle excise exemption which it provides would not apply to such vehicles. It would be illogical, however, to afford exemption to the larger number—the 20,000 private cars—but not to the 500 or so vehicles I have referred to. I am glad to have the opportunity of moving the Amendment and thus to remove illogicality. Amendment No. 24 is the paving Amendment and No. 25 the substantive.
    Mr. Higgins: Is the hon. Gentleman aware that earlier the Government rejected our proposal to remove vehicle licence duty from disabled drivers? Does he think that this is a more deserving case than that? Secondly, is this concession consistent with our obligations under the G.A.T.T.? How many of our foreign competitors are also selling cars to overseas visitors with the same con-session?
    Mr. Brown: It is not for me to comment on the earlier Amendment. This Amendment is an incentive to British car exports and I am sure that the hon. Gentleman must be able to differentiate between vehicle excise licences for the disabled and incentives to exports. I was not in the House at the time, but no doubt one of my right hon. Friends gave good reason for not giving the concession proposed in the earlier Amendment.
    Dame Irene Ward: Is the hon. Gentleman really saying that it is more important to give this kind of concession for exports than it is for disabled people? That is what he is saying and I do not agree with him.
    Mr. Brown: I understand fully the feeling which exists on this sort of matter, but we are not discussing the Amendment relating to disabled persons. I have given an explanation of this
    758
    Amendment and I have no doubt that one of my right hon. Friends has given a reasonable explanation for the rejection of the earlier Amendment. It is not for me to give an explanation again.
    Mr. Higgins: The hon. Gentleman cannot get away with this. He must put it in the context of the Bill. The Government propose to give a concession here rather than the concession which they earlier rejected. If the hon. Gentleman is to justify it, he must obviously show sound cause on that basis. In any case, he has not answered my question about the G.A.T.T.
    Mr. Brown: I apologise to the hon. Gentleman for not answering him about the G.A.T.T. I understand that we are acting in accordance with the agreement to which we are a party.
    Mr. Higgins: How many of our foreign competitors make the same concession?
    Mr. Brown: Without notice I cannot answer that question, but I will write to the hon. Gentleman. I am sure that hon. Members, on reflection, will concede that it is not relevant whether this Amendment should be accepted.
    Mr. Eldon Griffiths: I have only a brief question, but I am not optimistic about getting an answer in the light of the hon. Gentleman's inability to answer my hon. Friend the Member for Worthing (Mr. Higgins). We extend to a large number of diplomatic personnel and members of foreign missions and international organisations such as the International Coffee Board and the International Sugar Organisation, freedom from purchase tax and freedom from tax on vehicles purchased in this country.
    There are on the staff of these organisations many people who are not covered by consular conventions or diplomatic treaties—gardeners, au pair girls, child minders, and so on. If these people should purchase vehicles in this country, will they be able to do so without paying tax? This is a straight factual question that deserves a straight factual answer. If the answer is yes, then the case that has been made from the Opposion Front Bench and by my hon. Friend the Member for Tynemouth (Dame Irene Ward) is even more powerful. It cannot

    759
    be right that the hangers-on of diplomatic and international missions who are not covered by consular and diplomatic immunities should benefit more than the disabled.
    Mr. Arthur Lewis: As I understand it, the object is to encourage people to buy cars by allowing them to run the cars free of tax for twelve months before taking them abroad, and thus to help exports. What action is taken to ensure that this happens? I can assure the Joint Parliamentary Secretary that there are thousands of unlicensed vehicles on the road and neither his Department nor any other Department does anything about it.
    I know of a car bought on this basis which has been unlicensed for two years. Although it has been reported the car is still unlicensed and still unexported. The Department says it is a matter for the police. The police say it is a matter for the G.L.C. enforcement officer. The enforcement officer says that there are so many thousands of these cases that he cannot do anything about it.
    It takes 18 months or two years before a case can be brought to court, and when it gets to court only a nominal fine of £5 is imposed. If the offender does not want to pay the fine he does not do so. After another two years he might again be fined £5 and may again refuse to pay it. After about five years the police give up, the enforcement officer gives up, and the car is sold to a car dealer. The car dealer then sells the car again to an individual who takes it out on the road knowing that it is not taxed or insured. If that man has a hit-and-run type accident and somebody notices the number and takes the matter up with the Ministry, the Ministry will then say "The car should have been exported".
    Mr. Deputy Speaker(Mr. Harry Gourlay): Order. The hon. Gentleman is getting a little wide of the Amendment that is before the House.
    Mr. Lewis: I was trying to explain what was now happening, that not only a coach and horses but a hundred-and-one vehicles were being driven through the existing legislation. To what extent have the present abuses, which have been going on for years, been encouraged by the Treasury? Will the Parliamentary Secretary assure me that these people will
    760
    not be given further encouragement by the Bill?
    I was going on to say, Mr. Gourlay, that people have been dodging the column for years. These cars should have been exported two or three years ago. But has the Ministry taken action? No. The Bill will give further opportunities to people to dodge the column. The Parliamentary Secretary has not said how he can guarantee that these cars will go for export. Is it not possible to ensure that if the cars are not exported within twelve months the whole of the arrears of duty shall be payable, rather than to leave the situation to go on for even more years?
    Mr. Bob Brown: As the hon. Member for Bury St. Edmunds (Mr. Eldon Griffiths) said, there are certain concessions to take account of diplomatic arrangements, but the matter of gardeners and au pair girls is a different issue altogether. Anybody who can be identified as a genuine foreign visitor will have the concession, otherwise they will not.
    My hon. Friend the Member for West Ham, North (Mr. Arthur Lewis) mentioned certain abuses. I am sorry to say that the matter of the dodging of vehicle excise licence has become almost a mania with my hon. Friend. There can hardly be a car in the West Ham area which he cannot identify quite readily and at will.
    We are on this aspect dealing with some 500 vehicles a year. I find it difficult to understand how countless vehicles are running around the country years after purchase, after they should have been exported, without having paid the duty. I cannot understand such an allegation, when we are here talking about only 500 Land Rovers and personnel carriers.
    The system under which the vehicles have "no sale" or export restrictions attached to them is a quite distinctive one. It will be extended to the vehicles to which I have referred. This will put prospective purchasers and taxation authorities on their guard against any attempt to evade the conditions of the exemptions.
    Sir Gerald Nabarro: I had not intended to intervene until I heard the Joint Parliamentary Secretary deride what was said by the

    761
    hon. Member for West Ham, North (Mr. Arthur Lewis), and I rise only to reinforce what he said about the proliferation of licence evasion at every level—
    Mr. Deputy Speaker: Order. The hon. Gentleman must know that we are on Report and dealing with Amendments 24 and 25, which have nothing to do with general licence evasion. The hon. Gentleman may only deal with evasion which may arise out of the Amendments.
    Sir G. Nabarro: I will come to that. I had just referred to the proliferation of licence evasion at every level. The Joint Parliamentary Secretary will recall that I sent him last week an example of the kind of evasion about which the hon. Member for West Ham, North complains. If the Minister cannot stop evasion of that kind, which concerns citizens of this country, how does he propose to stop evasion where vehicles are purported to have been bought for export, which is immeasurably more difficult than apprehending evasion in this country? It is reckoned that there are more than a million unlicensed vehicles running round our roads—
    Mr. Deputy Speaker: Order. I have ruled already that in touching on that aspect of licence evasion the hon. Gentleman is out of order. Perhaps he will address his remarks specifically to the Amendment.
    Sir G. Nabarro: I will finish my sentence. It is estimated that there are more than a million unlicensed vehicles running round our roads, including vehicles which are supposed to be en route to export markets. The fact is that neither the Ministry's officials, nor the licensing authorities, nor the police are in a position to apprehend the offenders. The police take no notice of complaints—
    Mr. Deputy Speaker: Order. The hon. Gentleman is disregarding the Ruling of the Chair. Perhaps he will address his remarks specifically to the Amendment.
    Sir G. Nabarro: I am endeavouring to do that, and I intend to go on making this speech, attaching my remarks to the Amendment.
    If the police are not in a position to apprehend the widespread evasion with motor cars in this country, how can they apprehend motor vehicles which are pur-
    762
    ported to be en route to export markets but which are not exported?
    I want the Joint Parliamentary Secretary to answer this specific question. Has he read the letter which I wrote him last week—
    Mr. Deputy Speaker: Order. As I understand the hon. Gentleman's submission, the letter has nothing to do with the Amendment, and therefore I cannot allow him to speak further on that.
    Sir G. Nabarro: I am sorry you have not read the letter, Mr. Deputy Speaker.
    Mr. Deputy Speaker: I may not have read the letter, but I have been listening to the hon. Gentleman. I gather from his remarks that the letter does not deal with cars which are covered by the Amendment.
    Sir G. Nabarro: I am asking the hon. Gentleman whether he has read the letter, because when he replies to the debate I hope he will tell me whether the cars were en route to export markets. That is the point.
    In this case, a dealer in Reading was forced to recover nine vehicles on account of the non-payment of sums due under hire-purchase contracts. Of the nine vehicles, seven had not been taxed. Were they export vehicles? I doubt it.
    An Hon. Member: Come off it.
    Sir G. Nabarro: I will not come off it. We are being taxed at the rate of £25 a year as perfectly legal car drivers because of the amount of evasion which occurs at present.
    I hope that the Joint Parliamentary Secretary will not deride the hon. Member for West Ham, North, because he is exactly right and the Minister is exactly wrong. He ought to find out what is the extent of evasion, both in respect of vehicles purchased and said to be for export but not subsequently exported, and in respect of those purchased for use in this country and not licensed. The two are parallel problems, resulting in a huge loss of revenue and the legitimate licence owner being taxed more heavily than otherwise he need be.
    Mr. Patrick Jenkin: We recognise the value when Ministers from Departments other than the Treasury come down to the House to take part in debates on the

    763
    Finance Bill on matters that primarily concern the interests of their Department. But the House is entitled to expect that when Ministers from other Departments come down they should be able to answer the questions put to them from both sides.
    It is not good enough for the Parliamentary Secretary, in answer to my hon. Friend the Member for Worthing (Mr. Higgins), to say that something is nothing to do with him. The hon. Gentleman is a member of the Government. When he stands at the Dispatch Box answering a debate on an Amendment of this kind he is answering for the Government, and he has as much responsibility as any other member of the Government who speaks on the Finance Bill. The Parliamentary Secretary has delivered himself of a series of deplorably inadequate replies to the questions that have been put from both sides.
    The hon. Gentleman was asked how this concession was justifiable when the concession which the Government turned down earlier in relation to disabled drivers was not felt to be justifiable. He merely said that it was nothing to do with him.
    He was asked whether it was in accordance with our obligations under G.A.T.T. All that he could say was that he had no reason to believe that it was not. He said that it was an export incentive. This is not an indirect tax which is allowed to be relieved under G.A.T.T. He was asked what other countries gave comparable relief in the export of cars from their territories. He had no idea of any other country that gave this relief.
    The Parliamentary Secretary appeared to be supremely complacent when faced with the evidence put to him by his hon. Friend the Member for West Ham, North (Mr. Arthur Lewis) about the use of this concession by those who wished to evade road tax. This is not good enough.
    We recognise that the Clause and the Amendment are both, in their way, concessions intended to help exports. But I believe that the House is entitled to mark its disapproval of a Minister who

    Division No. 333.]

    AYES

    [11.9 p.m.

    Abse, Leo

    Anderson, Donald

    Atkins, Ronald (Preston, N.)

    Allaun, Frank (Salford, E.)

    Archer, Peter

    Atkinson, Norman (Tottenham)

    Alldritt, Walter

    Ashley, Jack

    Barnett, Joel

    comes down and delivers himself of such inadequate answers by pressing the matter to a Division. I hope that my right hon. and hon. Friends will join me in dividing against the Government's Amendment.
    Mr. Bob Brown: I find it hard to take from the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin)— [Interruption.] With the leave of the House—
    Mr. Deputy Speaker: Order. I remind the House that the mover of an Amendment on Report does not require the leave of the House to speak more than once.
    Mr. Brown: Thank you, Mr. Deputy Speaker. I thought that I was in order.
    I find it hard to take from the hon. Member for Wanstead and Woodford his talk about inadequate replies. The replies that he is beefing about have, in the main, been in response to an earlier Amendment which I have said that one or other of my right hon. Friends has already adequately dealt with.
    Concerning the remarks of the hon. Member for Worcestershire, South (Sir G. Nabarro), bearing in mind what has gone before, particularly the Budget statement of my right hon. Friend the Chancellor of the Exchequer, I should think that he might have said his last word on vehicle excise duties.
    Sir G. Nabarro rose—
    Mr. Brown: No. I have already given way sufficiently.
    We are not discussing vehicle excise duties; we are discussing a concession affecting about 500 vehicles per year. We are introducing this Amendment after discussion with the Society of Motor Manufacturers and Traders, whose members are keen to have it to improve their sales. Therefore, I am surprised that the Opposition should see fit to divide on it.
    Question put, That the Amendment be made:—
    The House divided: Ayes 226, Noes 170.

    Baxter, William

    Griffiths, Eddie (Brightside)

    Morris, John (Aberavon)

    Beaney, Alan

    Griffiths, Will (Exchange)

    Moyle, Roland

    Bence, Cyril

    Hamilton, James (Bothwell)

    Murray, Albert

    Benn, Rt. Hn. Anthony Wedgwood

    Hamilton, William (Fife, W.)

    Newens, Stan

    Bidwell, Sydney

    Harper, Joseph

    Noel-Baker, Rt. Hn. Philip

    Binns, John

    Harrison, Walter (Wakefield)

    Nott, John

    Bishop, E. S.

    Haseldine, Norman

    Oakes, Gordon

    Blackburn, F.

    Hazell, Bert

    Ogden, Eric

    Blenkinsop, Arthur

    Healey, Rt. Hn. Denis

    O'Malley, Brian

    Boardman, H. (Leigh)

    Heffer, Eric S.

    Oram, Albert E.

    Booth, Albert

    Henig, Stanley

    Orbach, Maurice

    Boston, Terence

    Hooley, Frank

    Orme, Stanley

    Boyden, James

    Houghton, Rt. Hn. Douglas

    Oswald, Thomas

    Bradley, Tom

    Howarth, Robert (Bolton, E.)

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

    Bray, Dr. Jeremy

    Howell, Denis (Small Heath)

    Page, Derek (King's Lynn)

    Brooks, Edwin

    Hoy, Rt. Hn. James

    Palmer, Arthur

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

    Hughes, Rt. Hn. Cledwyn (Anglesey)

    Parker, John (Dagenham)

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

    Hughes, Roy (Newport)

    Parkyn, Brian (Bedford)

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

    Hunter, Adam

    Pavitt, Laurence

    Buchan, Norman

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

    Pearson, Arthur (Pontypridd)

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

    Jay, Rt. Hn. Douglas

    Peart, Rt. Hn. Fred

    Butler, Herbert (Hackney, C.)

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

    Pentland, Norman

    Callaghan, Rt. Hn. James

    Jenkins, Rt. Hn. Roy (Stechford)

    Perry, Ernest G. (Battersea, S.)

    Carmichael, Neil

    Johnson, Carol (Lewisham, S.)

    Perry, George H. (Nottingham, S.)

    Carter-Jones, Lewis

    Johnson Smith, G. (E. Grinstead)

    Price, Christopher (Perry Barr)

    Chapman, Donald

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

    Probert, Arthur

    Concannon, J. D.

    Jones, T. Alec (Rhondda, West)

    Rees, Merlyn

    Conlan, Bernard

    Judd, Frank

    Roberts, Albert (Normanton)

    Crawshaw, Richard

    Kenyon, Clifford

    Roberts, Rt. Hn. Goronwy

    Crosland, Rt. Hn. Anthony

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

    Roberts, Gwilym (Bedfordshire, S.)

    Crossman, Rt. Hn. Richard

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

    Rodgers, William (Stockton)

    Dalyell, Tam

    Kerr, Russell (Feltham)

    Roebuck, Roy

    Davidson, Arthur (Accrington)

    Lawson, George

    Rose, Paul

    Davies, C. Elfed (Rhondda, E.)

    Leadbitter, Ted

    Ross, Rt. Hn. William

    Davies, Dr. Ernest (Stretford)

    Lee, Rt. Hn. Jennie (Cannock)

    Rowlands, E.

    Davies, Rt. Hn. Harold (Leek)

    Lee, John (Reading)

    Ryan, John

    Davies, Ifor (Gower)

    Lewis, Arthur (W. Ham, N.)

    Shaw, Arnold (Ilford, S.)

    de Freitas, Rt. Hn. Sir Geoffrey

    Lewis, Ron (Carlisle)

    Sheldon, Robert

    Dell, Edmund

    Lipton, Marcus

    Shore, Rt. Hn. Peter (Stepney)

    Dempsey, James

    Lomas, Kenneth

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

    Dewar, Donald

    Loughlin, Charles

    Silkin, Rt. Hn. John (Deptford)

    Diamond, Rt. Hn. John

    Lyon, Alexander W. (York)

    Silkin, Hn. S. C. (Dulwich)

    Dickens, James

    Mabon, Dr. J. Dickson

    Silverman, Julius

    Dobson, Ray

    McBride, Neil

    Skeffington, Arthur

    Doig, Peter

    McCann, John

    Slater, Joseph

    Driberg, Tom

    MacColl, James

    Small, William

    Dunn, James A.

    Macdonald, A. H.

    Smith, John (London & W'minster)

    Dunnett, Jack

    McGuire, Michael

    Spriggs, Leslie

    Dunwoody, Mrs. Gwyneth (Exeter)

    McKay, Mrs. Margaret

    Summerskill, Hn. Dr. Shirley

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

    Mackenzie Gregor (Rutherglen)

    Taverne, Dick

    Eadie, Alex

    Mackie, John

    Thomson, Rt. Hn. George

    Edelman, Maurice

    Mackintosh, John P.

    Tinn, James

    Edwards, Robert (Bilston)

    Maclennan, Robert

    Urwin, T. W.

    Edwards, William (Merioneth)

    McMillan, Tom (Glasgow, C.)

    Varley, Eric G.

    Ellis, John

    McNamara, J. Kevin

    Wainwright, Edwin (Dearne Valley)

    English, Michael

    Mahon, Peter (Preston, S.)

    Wallace, George

    Ennals, David

    Mahon, Simon (Bootle)

    Watkins, David (Consett)

    Ensor, David

    Mallalieu, E. L. (Brigg)

    Watkins, Tudor (Brecon & Radnor)

    Evans, Fred (Caerphilly)

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

    Wellbeloved, Jamei:

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

    Manuel, Archie

    Whitaker, Ben

    Finch, Harold

    Mapp, Charles

    Whitlock, William

    Fitch, Alan (Wigan)

    Marks, Kenneth

    Willey, Rt. Hn. Frederick

    Fletcher, Ted (Darlington)

    Marquand, David

    Williams, Alan (Swansea, W.)

    Foot, Michael (Ebbw Vale)

    Marsh, Rt. Hn. Richard

    Williams, Alan Lee (Hornchurch)

    Ford, Ben

    Mason, Rt. Hn. Roy

    Williams, Clifford (Abertillery)

    Forrester, John

    Mellish, Rt. Hn. Robert

    Williams, Mrs. Shirley (Hitchin)

    Fowler, Gerry

    Mendelson, John

    Willis, Rt. Hn. George

    Fraser, John (Norwood)

    Mikardo, Ian

    Wilson, William (Coventry, S.)

    Freeson, Reginald

    Miller, Dr. M. S.

    Winnick, David

    Gardner, Tony

    Milne, Edward (Blyth)

    Woof, Robert

    Gray, Dr. Hugh (Yarmouth)

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

    Gregory, Arnold

    Molloy, William

    TELLERS FOR THE AYES:

    Griffiths, David (Bother Valley)

    Morris, Alfred (Wythenshawe)

    Mr. Ernest Armstrong and

    Morris, Charles R. (Openshaw)

    Mr. Charles Grey.

    NOES

    Alison, Michael (Barkston Ash)

    Bell, Ronald

    Black, Sir Cyril

    Allason, James (Hemel Hempstead)

    Bennett, Sir Frederic (Torquay)

    Blaker, Peter

    Astor, John

    Bennett, Dr. Reginald (Gos. & Fhm)

    Boardman, Tom (Leicester, S.W.)

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

    Bessell, Peter

    Body, Richard

    Awdry, Daniel

    Biffen, John

    Boyle, Rt. Hn. Sir Edward

    Baker, Kenneth (Acton)

    Biggs-Davison, John

    Braine, Bernard

    Baker, W. H. K. (Banff)

    Birch, Rt. Hn. Nigel

    Brown, Sir Edward (Bath)

    766

    767

    Bruce-Gardyne, J.

    Hirst, Geoffrey

    Percival, Ian

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

    Holland, Philip

    Pike, Miss Mervyn

    Burden, F. A.

    Hordern, Peter

    Pink, R. Bonner

    Campbell, B. (Oldham, W.)

    Hornby, Richard

    Pounder, Rafton

    Carlisle, Mark

    Howell, David (Guildford)

    Powell, Rt. Hn. J. Enoch

    Chataway, Christopher

    Hunt, John

    Price, David (Eastleigh)

    Chichester-Clark, R.

    Hutchison, Michael Clark

    Prior, J. M. L.

    Clark, Henry

    Jenkin, Patrick (Woodford)

    Pym, Francis

    Clegg, Walter

    Jones, Arthur (Northants, S.)

    Ramsden, Rt. Hn. James

    Cooke, Robert

    Jopling, Michael

    Renton, Rt. Hn. Sir David

    Crowder, F. P.

    Joseph, Rt. Hn. Sir Keith

    Ridsdale, Julian

    Cunningham, Sir Knox

    Kaberry, Sir Donald

    Rossi, Hugh (Hornsey)

    Dalkeith, Earl of

    Kershaw, Anthony

    Royle, Anthony

    Dance, James

    Kimball, Marcus

    Russell, Sir Ronald

    Davidson, James (Aberdeenshire, W.)

    King, Evelyn (Dorset, S.)

    Scott, Nicholas

    d'Avigdor-Gotdsmid, Sir Henry

    Kirk, Peter

    Scott-Hopkins, James

    Dean, Paul

    Kitson, Timothy

    Sharples, Richard

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

    Knight, Mrs. Jill

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

    Drayson, G. B.

    Lancaster, Col. C. G.

    Silvester, Frederick

    du Cann, Rt. Hn. Edward

    Lane, David

    Smith, Dudley (W'wick & L'mington)

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

    Lawler, Wallace

    Stainton, Keith

    Eyre, Reginald

    Legge-Bourke, Sir Harry

    Steel, David (Roxburgh)

    Farr, John

    Longden, Gilbert

    Stodart, Anthony

    Fletcher-Cooke, Charles

    Lubbock, Eric

    Stoddart-Scott, Col. Sir M.

    Fortescue, Tim

    McAdden, Sir Stephen

    Taylor, Sir Charles (Eastbourne)

    Foster, Sir John

    MacArthur, Ian

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

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

    Mackenzie, Alasdair (Ross&Crom'ty)

    Taylor, Frank (Moss Side)

    Gibson-Watt, David

    Maclean, Sir Fitzroy

    Temple, John M.

    Gilmour, Sir John (Fife, E.)

    Macleod, Rt. Hn. Iain

    Tilney, John

    Glover, Sir Douglas

    McNair-Wilson, Michael

    Turton, Rt. Hn. R. H.

    Glyn, Sir Richard

    Maddan, Martin

    van Straubenzee, W. R.

    Godber, Rt. Hn. J. B.

    Maginnis, John E.

    Vaughan-Morgan, Rt. Hn. Sir John

    Goodhart, Philip

    Marten, Neil

    Vickers, Dame Joan

    Goodhew, Victor

    Maude, Angus

    Waddington, David

    Gower, Raymond

    Mawby, Ray

    Wainwright, Richard (Colne Valley)

    Grant, Anthony

    Maxwell-Hyslop, R. J.

    Ward, Dame Irene

    Gresham Cooke, R.

    Mills, Peter (Torrington)

    Wells, John (Maidstone)

    Grieve, Percy

    Mills, Stratton (Belfast, N.)

    Whitelaw, Rt. Hn. William

    Griffiths, Eldon (Bury St. Edmunds)

    Miscampbell, Norman

    Wiggin, A. W.

    Gurden, Harold

    Mitchell, David (Basingstoke)

    Williams, Donald (Dudley)

    Hall, John (Wycombe)

    Montgomery, Fergus

    Wilson, Geoffrey (Truro)

    Hall-Davis, A. G. F.

    More, Jasper

    Winstanley, Dr. M. P.

    Hamilton, Lord (Fermanagh)

    Morgan-Giles, Rear-Adm.

    Wolrige-Gordon, Patrick

    Harvey, Sir Arthur Vere

    Morrison, Charles (Devizes)

    Woodnutt, Mark

    Hastings, Stephen

    Mott-Radclyffe, Sir Charles

    Worsley, Marcus

    Hawkins, Paul

    Munro-Lucas-Tooth, Sir Hugh

    Wright, Esmond

    Heald, Rt. Hn. Sir Lionel

    Nabarro, Sir Gerald

    Heseltine, Michael

    Onslow, Cranley

    TELLERS FOR THE NOES:

    Higgins, Terence L.

    Orr-Ewing, Sir Ian

    Hiley, Joseph

    Osborn, John (Hallam)

    Mr. Hector Monro and

    Hill, J. E. B.

    Page, Graham (Crosby)

    Mr. Bernard Weatherill.

    Peel, John

    Further Amendment made: No. 25, in page 12, line 25, leave out from '9' to end of line 26 and insert:
    'then the provisions of subsection (2C) of this section shall apply in relation to that vehicle.
    (2B) Where in the case of any mechanically propelled vehicle it is shown to the satisfaction of the authority with whom the vehicle is registered—

    (a) that the vehicle is not chargeable with purchase tax; and

    (b) that the vehicle is being acquired from a person who is for the time being registered as a manufacturer of such vehicles by the Minister and who is the manufacturer of the vehicle for the purposes of that register; and

    (c) that the person so acquiring the vehicle would fall to be treated as an overseas resident for the purposes of the said section 23,

    that authority may exempt the vehicle from duty under this Act for a period of twelve months subject to specified conditions, being such conditions as the Minister may from
    768
    time to time think necessary for the protection of the revenue; but if at any time during those twelve months any of the conditions subject to which the exemption is granted is not complied with, the provisions of subsection (2C) of this section shall apply in relation to the vehicle.
    (2C) Where under subsection (2A) or (2B) of this section the provisions of this subsection are to apply in relation to a vehicle, the vehicle shall be deemed never to have been exempted from duty under the said subsection (2A) or (2B)'.—[Mr. Harold Lever.]
    Mr. Deputy Speaker: We now come to Amendment No. 27.
    Mr. John Smith: On a point of order. May I draw your attention to Amendment No. 296, which is supported by hon. Members from both the Liberal and Tory Parties. It is the only Amendment to Clause 9, and unless it is debated, since the Committee stage was

    769
    taken upstairs, the House will have had no opportunity—
    Mr. Deputy Speaker: Order. I cannot hear anything further on that point of order, since the selection of Amendments is a matter for Mr. Speaker, and the Amendment has not been selected for debate.

  Clause 10

    ALTERATIONS OF PERSONAL RELIEFS
    Mr. Michael Shaw: I beg to move Amendment No. 27, in page 15, line 20, at end insert:
    (9) In section 214 of the Income Tax Act, 1952 after 'he has employed some other female person for the purpose' there shall be inserted 'whether or not she is resident with him'.
    Section 214 deals with an allowance given in certain circumstances in respect of a person taking charge of a widower's or widow's children, or acting as his or her housekeeper. The term "housekeeper's allowance" has become well known, and is used not only in this Section but elsewhere.
    I concede that in wording my Amendment as I have I have dealt with a point that only partially covers the question of housekeeper's allowance. I have done so deliberately, because I am dealing only with the allowance relating to a housekeeper employed by the taxpayer, and not with the case where a female relative is acting as housekeeper. However, I believe that if my argument is accepted the case of others acting as housekeepers will be accepted as well, because the arguments are very similar.
    On the whole, however, the point I have selected is the most appealing. Where a claimant proves that he is a widower, and that during any year of assessment he has a female relative living with him to take charge of any children, or to act as housekeeper, he shall receive an allowance. If he has no female relative who can live with him to act as housekeeper, he can employ a female person to act as housekeeper.
    For many years there was doubt as to whether someone employed as housekeeper had to live with him if he was to receive the allowance. That doubt was cleared up in 1964, when the Court of Appeal held that any person employed
    770
    in the capacity of housekeeper had also to be resident with the taxpayer if he was to claim the allowance.
    The allowance was created many years ago. The first relief was given in respect of relatives resident with the taxpayer to look after children. The housekeeper's allowance to look after the children was first given as long ago as 1920. For acting purely as a housekeeper to the widower or widow, the allowance was first given in 1924. These allowances are long-standing. Since those early days conditions under which people live have changed greatly. In those days it was common to have people living in one's home, looking after children or acting as housekeeper. Now it is not. Not only is it not customary to have people living in to assist with the housekeeping, but it is all the more difficult for anyone to obtain the services of such people if it is insisted that they live in.
    Customs have changed. People more readily come to act as a housekeeper if they can go back to their own home at night. Many who are in need of this sort of help find it difficult enough to get any sort of help. The pattern of living for the taxpayer has changed in that the taxpayer may be living in a house in circumstances where it would not be convenient for him to have another person living under the same roof permanently.
    The need for these allowances is as great as it has ever been, and because of the changed circumstances in which taxpayers live there is a great need to change the definition under which the allowance is granted. I am seeking to bring the definition of "housekeeper" up to date. The changing pattern of society fully justifies granting the allowance in accordance with today's conditions.
    Mr. Richard Wainwright: I am happy to support this Amendment because the insistence on residence is no particular virtue. There is no entitlement to tax relief simply because a person has someone resident in his house. This must only have been inserted in the legislation out of an abundance of caution in earlier days aimed at assisting the Revenue in policing the administration of this Measure.
    Insistence on residence has now become an intolerable burden for many

    771
    good reasons adduced by the hon. Member for Scarborough and Whitby (Mr. Michael Shaw), and for several others too. When the allowance was first introduced the use of a telephone by such people was relatively uncommon. Now it is a familiar arrangement, having regard to the difficulty of getting housekeepers to be wholly resident, for the employer to have a telephone. In this way the housekeeper can live out, returning at night to her home—which she wants to keep on, because otherwise her employer may die and leave her homeless—and keep in touch by telephone during the night for emergencies. This arrangement was not possible when the original legislation was drafted. Because these words are in the Statute only as a policing measure and not because of any inherent virtue in them, the time when they were valid is past and insistence on retaining them causes great unfairness and distress to particularly deserving people.
    11.30 p.m.
    Mr. Tom Boardman: I support the Amendment. The requirement about residence was not in the Statute. It sprang from a decision in 1937 which was reaffirmed in 1964.
    One wonders whether it was ever the intention of the House that residence should be a requirement. In my constituency there are a large number of women who go out to work. The position is particularly hard for widows left with small children who wish to go out to work but find that the burdens of taxation make the decision a borderline one. They are often able to get neighbours to look after the children and to pay them. It is eminently reasonable that they should be allowed the relief of the housekeeper allowance for bringing in someone to look after the children while they go out to work. It is good for the widow, for the neighbours and for the economy.
    This is an eminently sensible and reasonable Amendment which I hope will be accepted.
    Mr. Donald Wiliams: I support the Amendment. The problem with the Revenue has been for many years that a person in this capacity would attract a dual allowance—that is, the
    772
    allowance as a wife and the allowance as a housekeeper. The Revenue has fought against this particular form of allowance.
    The Minister has indicated that on the question of interest he over-rode his logic with common sense. Common sense would be brought into the law relating to the allowance for housekeepers if the Government accepted the Amendment. Two allowances are given when a married woman is working. Why cannot the Government give a special allowance for housekeepers?
    A case in point was brought to my notice. A man's wife died and he was left with four children. He could get someone to look after them only during the day. He was not granted a housekeeper allowance. I hope that the Chief Secretary will accept the Amendment.
    The Chief Secretary to the Treasury (Mr. John Diamond): I hope that I can meet the arguments and cases described, but I must make it clear that I cannot accept the Amendment.
    Hon. Members have had in mind the case of the young child. When the housekeeper allowance was first devised—and the recent court case has merely removed doubt and reaffirmed the practice which has obtained throughout—what was envisaged was someone taking the place of a deceased wife in looking after young children. Therefore, after the children's mother died, the person who was helping would naturally live in to look after the children. Residence, therefore, was part of the conditions of the allowance.
    We have moved on very considerably since then. That allowance remains at £75, but an additional personal allowance has largely taken its place, though not entirely. That further allowance, which meets the point made by every hon. Member so far in this debate, has been raised by my right hon. Friend in this very year to £100. It is available to a widow or widower with a young child, but it does not require that a housekeeper shall be employed, or that the housekeeper shall be resident, or even that there shall be a housekeeper. If a person has the use of some friend or relative to help, this allowance of £100 will be available.
    The only purpose which the old housekeeper allowance still serves is a limited purpose, and one which has got some

    773
    distance from the original purpose. The purpose is not that of looking after children, not where a child is involved, but where there is a widow or widower. In this limited number of cases where there is a widow or a widower, and therefore nothing like the same need of help, an allowance of £75 is available only where the housekeeper employed is resident.
    I hope that what I have said about the first allowance meets the real point that hon. Members had in mind. It is, in short, an allowance not of £75 but of £100 to a widow or widower and totally irrespective of whether the housekeeper is living in or is living in her own home and at the end of a telephone. That is the new situation as a result of the increase provided for in this year's Budget.
    On the other allowance, I would not be able to recommend to the House that we should remove the restriction on living in, of residence there, because that would quite simply mean that in time we would inevitably be driven to give an allowance for everyone who employed outside domestic help. That is just what it would come to—to every widow or widower, and it would soon move even wider than that, who employed outside domestic help. It would be enormously expensive, and not based on need at all. It is for the individual to decide how to spend his money, and whether to spend it on outside help or not is an individual decision. I hope I have explained that the case that has been put is met not only as to £75 but as to £100, but I cannot recommend acceptance of the Amendment to the House.
    Mr. Eldon Griffiths: The Chief Secretary's reply is disappointing, and I want to put two very narrow points to him.
    If the concession is confined to housekeepers who remain overnight, the right hon. Gentleman is saying, in effect, that it is available only to those who have a room available where the housekeeper can live. I understand that the policy of both major parties towards the elderly is to encourage them to live in smaller homes; that is to say, to move out of what are in many cases council houses with two or three bedrooms into, in some areas, small specialised old people's homes. In almost every case there is no spare bedroom there, and cannot be. It would be wrong for the nation to
    774
    provide a spare bedroom. It is then not possible for a housekeeper to be resident. She cannot stay overnight, because there is no room for her, and in the circumstances described by my hon. Friend the person concerned is automatically excluded from benefiting from the concession. That cannot be just.
    The other point is equally narrow but equally important. The concession will be available only to those who employ housekeepers to be resident overnight. Many women are glad to work as housekeepers and are badly needed by the elderly, who will not be able to meet the terms described by the Chief Secretary. Those housekeepers cannot be away at night because their husbands and children need them at home. Automatically that group of people, who are perfectly willing to be housekeepers, cannot do this work because of the terms of the legislation.
    In the whole of our social policy with more and more elderly people living alone, it must be desirable to encourage people to work for them, at their own expense and encouraged by tax allowances rather than elderly people having to lean on the home help service or other services provided by the taxpayer. We should encourage people to rely more on their own hiring of help.
    Mr. Michael Shaw: I echo the view of my hon. Friend the Member for Bury St. Edmunds (Mr. Eldon Griffiths) that the reply by the Chief Secretary was disappointing. I am grateful to my hon. Friends for their support for the Amendment.
    With his usual skill, the Chief Secretary divided the case and sought to demolish it on the weaker grounds put forward. I accept that as far as concerns children that was the weaker ground, but acting as a housekeeper is the stronger case which I emphasised. The Chief Secretary said that if he were to grant the concession or extend the allowance by removing the need for residence that would open the whole case for an allowance for domestic help of all kinds. That danger has existed not only recently but since 1924 when the housekeeper allowance was introduced. Even in those days it was asked in what capacity was the domestic help used in the home. One had to satisfy the Inland Revenue that it was in the capacity of a housekeeper. That

    775
    test would still have to be applied whether the housekeeper were resident or not.
    Changes which have come over the social scene in these many years since the original legislation was passed mean that it is natural in normal circumstances for the housekeeper to live outside rather than in the taxpayer's home. That is the whole criterion for this Amendment.
    Amendment negatived.
    Dame Irene Ward: On a point of order. Mr. Deputy Speaker. When you put the Question a second time hon. Members on this side of the House said "Aye". Did you not hear them?
    Mr. Deputy Speaker: I put the Question and collected the voices and determined that the Noes had it, so the Noes have it.
    Dame Irene Ward: Further to that point of order. Hon. Members on this side said "Aye", so you could not have collected the voices.
    Mr. Deputy Speaker: It is for the Chair to decide when the voices have been collected. I have collected the voices on this issue and decided that the Noes have it.

  Clause 16
    REDUCTION IN AGE OF MAJORITY FOR TAX PURPOSES
    Amendment No. 154 made: In page 18, line 33, leave out '12' and insert '13'.—[Mr. Diamond.]
  Clause 18

    DISALLOWANCE OF INTEREST AS A DEDUCTION
    Amendments made: No. 212, in page 20, line 38, leave out from 'or' to 'if' in line 39 and insert:
    'section ("loans made on or before 15th April 1969") of this Act'.
    No. 213, in page 21, leave out lines 13 to 15 and insert:

    (a) to interest on any debt incurred after 15th April 1969, and

    (b) to interest paid after 5th April 1975 on a debt incurred on or before 15th April 1969.

    No. 214, in line 17, after 'sections', insert:
    'and the sections of this Act giving relief in respect of interest.'
    No. 215, in line 24, leave out from first '1970' to end of line 26.—[Mr. Diamond.]

  Clause 19

    LOANS FOR PURCHASE OR IMPROVEMENT OF LAND
    11.45 p.m.
    Mr. Graham Page: I beg to move Amendment No. 266, in page 21, line 37, after 'interest' insert:
    '(including in addition to the purchase money any premium under a mortgage guarantee policy or under a policy of indemnity against defects in the title to the property or against past breaches of obligations to which the property is subject or against unapportioned ground rents, rentcharges of chief rents to which the property is subject; and including also survey fees, woodwork or drainage specialists' fees for reports and guarantees, charges by associations of builders for certificates and guarantees, architects' fees, legal costs and disbursements and stamp duties.)'
    The House will be pleased to observe that we have skipped rapidly from Clause 10 to Clause 19, subsection (2) of which provides that
    "interest is eligible for relief under this section if it is paid by a person for the time being owning an estate or interest in land in the United Kingdom on a loan to defray money applied—
    (a) in purchasing the estate or interest, or one absorbed into, or given up to obtain, the estate or interest".
    The Amendment is concerned with the interpretation of the words
    "money applied in purchasing the estate or interest".
    This could mean the purchase money of the property solely and simply, and nothing more. Or it could mean that money expended in connection with, or in any way part of, the transaction of purchasing the property. If it means only the purchase money and nothing more, it will give rise to many niggling problems about apportionment of interest as between that which is given relief and that which is refused relief.
    I understand the purpose of paragraph (a) to be that the Government do not want to deter purchasers of property by refusing them relief on the interest on a loan which they take to purchase that property. I believe, in particular, that the Government do not want to deter the owner occupier who buys his home with the assistance of a loan. After all, the

    777
    Government have done enough by allowing the increase in interest rates to deter the purchase of homes by owner-occupiers and it would be intolerable if the interest on loans used in the purchase of houses were denied relief under the Clause.
    Subsection (2)(a) provides that the interest on money borrowed for the payment of purchase price is to be an allowable deduction against taxable income. The term "purchase price" is not used in the paragraph. The words are—
    "money applied in purchasing the estate or interest".
    As I have said, this phrase might mean merely the purchase price, or it might mean any money expended in the course of the transaction. I hope that it means the latter, but the Amendment seeks to make that certain.
    I remind the House of the sorts of payments which a purchaser is obliged to make when he is buying his home with the assistance, say, of a building society mortgage. The building society may be prepared to advance 75 per cent. The borrower wants 90 per cent. So the building society will arrange with an insurance company a mortgage guarantee policy to guarantee the payment of the margin of 15 per cent. Normally, it will add the once-for-all premium on that policy to the loan. It is not clear whether that item is money disbursed in the purchase of the property. It is certainly money disbursed in order to obtain the loan.
    Investigation of title may reveal that there is a flaw in the title, for instance, a restrictive covenant providing that the property shall be used only as a single dwelling house, though in the course of years it has been turned into flats. The building society says that it cannot run the risk of someone trying to enforce the restrictive covenant and it wants an indemnity policy of insurance. Again, the once-for-all premium paid for that policy may be added to the loan.
    When he applies to the building society for his advance, the borrower will pay a survey fee. Perhaps the report of the surveyor is that there is dry rot in the house and the drains seems to be defective. The building society requires expert reports on those matters, and they must be paid for. We try to encourage people
    778
    to buy the older houses, and the building societies make advances on them, but there are frequently expenses outside the purchase price in order to put the transaction through.
    Many building societies refuse to advance money on new property unless it has been built by a builder who is a member of the National House-Builders Registration Council and there is a certificate guaranteeing the property for ten years. That certificate has to be paid for.
    Finally, without necessarily declaring an interest, I mention the legal costs and disbursements and stamp duty.
    Mr. Arthur Lewis: Largest of all.
    Mr. Page: No, not largest of all. The estate agent's commission is the largest of all. The legal costs are a small proportion of what the purchaser has to pay out.
    Mr. Lewis: The vendor, not the purchaser, pays the estate agent's fees.
    Mr. Page: The vendor takes that into account in the price which he charges for the property. But that is a diversion, and I return to the fact that the purchaser finds that his bill for buying the property is much more than the purchase price. He has paid the money out. He has borrowed to pay not only the purchase price but also some of these other expenses, and the building society has added on to his total loan the premiums paid on the insurance policies. If he is not to have relief in respect of £30, £60 or £100 of the loan, though he has relief in respect of the rest, it will be a most complicated business.
    I hope that the Chief Secretary will tell me, as he has on other occasions, that my Amendment is unnecessary and it is all in the Bill. But the wording is not clear. If the right hon. Gentleman gives some assurance, one hopes that the Revenue will follow up what he says. The courts are under no obligation to do so, but at least the Revenue has some obligation to obey Treasury Ministers. I hope that there will not be a niggling apportionment of the interest, some subject to relief and some not.
    Mr. John Smith: The general effect of this part of the Bill is to introduce differential rates of interest. There are

    779
    to be certain purposes for which individuals may borrow money at one rate and certain purposes for which they may borrow at another rate. The provisions to which the Amendment relates will enable individuals to borrow money to buy land and property more cheaply than they can borrow it to buy other things. Therefore, it will put up the price of land and property because that will be almost the only asset that an individual can buy on borrowed money and get the interest allowed. When considering the Amendment, that is an important point.
    Indeed one could, if one felt hostile and hypercritical, say that the Government are putting money into the pockets of property speculators. Furthermore, this shift in the nature of things which the individual will hold against borrowed money, from liquid assets to non-liquid assets such as land and property, will make it harder in future to make credit squeezes work. That is another point to consider.
    But if we are to have this irrational distinction between different types of borrowing, clearly we must have the Amendment with it. I support the Amendment in general, but I am sorry to see that after mentioning wood work, drainage and legal costs it includes stamp duty as one of the things which one can borrow money to pay and get the interest allowed for tax purposes. I am sorry to see my hon. Friend the Member for Crosby (Mr. Graham Page) aiding and abetting the Chancellor in preserving this wasteful tax, which is particularly tiresome when it comes to house purchase, because most people who borrow money to buy a house pay four sets of stamp duty—on the house purchase, on the mortgage, on the insurance policy which they probably take out to secure the mortgage, and on the mortgage guarantee policy. Thus, there are four fiddling kinds of duty which should, as I said earlier, have been long since abolished. Although I support the Amendment, I am sorry to see the words "stamp duty" in it.
    Mr. Diamond: Both the hon. Member for Crosby (Mr. Graham Page) and the hon. Member for the Cities of London and Westminster (Mr. John Smith) have contemplated in their speeches borrow-
    780
    ing on a mortgage to acquire property, and in these circumstances, of course, it would be not only rare but would not be the case that the amount of the loan would be greater than the total purchase price, because normally there is either a 10 per cent. or an even greater percentage difference. So, in spite of all these cases, the hon. Member for Crosby need not ask me for any help at all, because the whole of the loan could be said to be devoted to the purchase of the property.
    But let us pursue the matter further, because I want to deal helpfully with the hon. Gentleman, and assume the unheard of case of the loan being fully equal to the whole of the purchase price and in addition covering the variety of incidental expenses to which he referred. I can say with the authority of a Treasury Minister within the Revenue—though, of course, I have none over the courts—that if ever such a ease came along the incidental expenses would be interpreted by the Revenue as being part of the cost of the property. Although I hate using words which he invited me to use, it is correct to say that this Amendment would be an unnecessary refinement.
    12 m.
    Mr. Graham Page: I am very glad to hear those words. The Chief Secretary has cleared up the doubt, but he must admit that there is doubt in the wording. Perhaps a better choice of words could have been made. With that assurance, and with the assurance that the Treasury will construe the Clause in that way, I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    Mr. J. B. Godber: I beg to move Amendment No. 153, in page 21, line 39, at end insert:
    (c) in the day-to-day management of an estate in respect of which rents are received quarterly or half-yearly in arrear, but not on any part of such loan which exceeds the amount of such quarterly or half-yearly rents receivable (provided that where any part of such rent is waived, relief under this section may continue to the extent reasonable in the circumstances) or.
    Mr. Deputy Speaker: With this Amendment we will take Amendment No. 155, in page 21, line 39, at end insert:
    (c) in the case of property let, to the fulfilment of statutory obligations in the matter of estate management, or.
    Mr. Godber: As my hon. Friend reminded the House on the last Amendment, Clause 19 deals specifically with loans for the purchase or improvement of land. Subsection (2), with which these two Amendments are concerned, deals specifically with land ownership. Paragraph (a) gives relief to the purchase of an estate, and paragraph (b) gives relief to the improving or developing of such an estate. In Committee we sought to add maintenance, and this is the point at issue.
    I want to address myself largely to rural estates and the problems that will arise for the estate owner if a change is not made here. I have carefully studied the arguments on this subject in Committee, in particular the comments of the Chief Secretary. I recognise that he was trying to draw a distinction, and at one stage I even thought that he was indicating that if a distinction could be drawn he would be able to look more favourably at the Amendments proposed by my hon. Friends in Committee which he could not at that time accept. The Chief Secretary said this:
    "I cannot, for the masons I have mentioned earlier, possibly contemplate giving this treatment to urban property."
    I gather that this was because of the size of the problem. He went on to say:
    "I cannot see the distinction between urban property and agricultural property, and I conclude, therefore, that I cannot, with regret, recommend to the Committee that the Amendment should be accepted."—[OFFICIAL REPORT, Standing Committee F, 18th June, 1969; c. 474.]
    That appeared to be his argument in rejecting Amendments which sought to add maintenance to purchase and development.
    The Amendments are specifically designed to meet the Chief Secretary's anxiety. Amendment No. 153 is drawn in such a way as to try to differentiate between two different types of maintenance. The Amendment does not relate specifically to agriculture, but refers to the practice, which is almost universal in agriculture but which applies to few other cases, of rents being paid quarterly or half-yearly in arrears. This is where a distinction can be drawn, if the Chief Secretary is seeking to draw a distinction.
    The fact that rents are being paid in arrears reinforces the need for a concession and means that in the majority
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    of cases landlords will wish to carry out the maintenance and to reimburse themselves from the rent properly applicable to the period concerned. There is absolute justice in saying that where the rent is paid in arrears any loan that is undertaken for maintenance at the appropriate time should qualify for relief. The wording of Amendment No. 153 in itself brings a clear justification.
    In drawing attention to the fact that we have tried to meet the Chief Secretary, I make it abundantly clear that I disagree fundamentally with his claim that it is impossible to say that there is a distinction between agricultural estate ownership and urban estate ownership. If there were no special factors affecting agricultural estate ownership, why did a previous Labour Government refer specifically to the rights of capital invested in the agriculture industry as they did in Section 1 of the 1947 Agriculture Act? Why did they also pass the 1948 Agricultural Holdings Act which laid down specific responsibilities of land ownership?
    The Chief Secretary argued in Committee that these responsibilities were no greater than those imposed on urban estate ownership. I would point out that those responsibilities go very much further. If he studies the 1948 Act in its entirety he will see that there is a large volume of responsibility. There is no doubt whatever that that Act shows clearly the wide statutory responsibilities placed on the agricultural landowner.
    Agricultural estate ownership, although it now represents probably only just under a half of all agricultural holdings, continues to play an important part in providing capital for an industry which this Government are denuding of capital in many other ways. It is incumbent on the Government to encourage them in these provisions rather than to discourage them. It is wholly wrong that it should be singled out in this unfair way simply because it does not appear to fit into the tidy definitions of "business" or "private" which the Chief Secretary sought to lay down in Committee.
    Having listened to him yesterday, I feel that his tidy definition got very blurred by some of the concessions he then made. This encourages me to think that be will allow it to be blurred even further in regard to this Amendment.

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    It seemed to me that yesterday he widened his attitude very considerably in one or two of the new Clauses.
    On this particular issue one has to look a little further to understand what the Government are getting at. The Chief Secretary made one statement that irritated me very much when I read it. Admittedly he made it at 3 o'clock in the morning and he may not have been feeling at his best, but in answering a debate about the needs of agriculture he said:
    "The argument is that agriculture is helped in many ways, by the State, by the Treasury, as I know well, and that therefore it should continue to be helped in other ways, too."—[OFFICIAL REPORT, Standing Committee F, 18th June 1969; c. 472.]
    That comment is pure prejudice and nothing else. In my view, the Chief Secretary was seeking to distort the whole argument put forward by my hon. Friends. There was no justification for that comment in their speeches.
    These Amendments have been concerned with people who own agricultural property and who let it instead of farming it themselves. There is nothing wicked about anybody letting out land to farmers. In many cases it represents a real sacrifice because a much better income could be obtained by selling and investing elsewhere. Traditionally the return on estate ownership is one of the lowest in the land. But the help which the Chief Secretary talks of as coming from the Treasury to agriculture is not in the main directed to estate ownership at all but to the farmer, the man who actually farms the land, the tenant farmer in the case of an estate, or the owner occupier. Those are the people who receive the benefits about which the Chief Secretary was talking, although those benefits are steadily being reduced by the present Government. But that is outside the terms of the Amendment, and I say it in passing.
    If agriculture is being helped at all, it is the farmer who is being helped. But it is the farmer, whether a tenant or an owner-occupier, who is safeguarded, because he comes within the Chief Secretary's definition of "business" and has no need to worry about offsetting interest on loans.
    It is the estate owner alone who is involved here. If an estate owner sold
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    off his estate to his tenants, each of them would qualify immediately for the interest on his loans for maintenance to be set off, because each of them would be a business. Therefore, it is manifestly unjust to deny the same relief to an estate owner.
    If, by the intervention to which I have referred, the Chief Secretary indicated that he wanted a chance to hit back at farmers, which seemed to be his intention, his refusal to accept the Amendment moved in Committee was a singularly inappropriate way of doing it. Every farmer in the country already comes within his definition of "business". We think that that is right, but we also think that the estate owner is equally entitled to expect his interest on loans for maintenance to qualify.
    We put forward a straightforward Amendment in Committee, but it was rejected. Now we suggest an alternative method which would embrace agricultural estate ownership in virtually every case and might also include some other peripheral categories, but which is distinct from the generality of urban property ownership. We have therefore met the Chief Secretary's requirement for a distinction, and I hope that I have demonstrated the justice of the case.
    I come now to two specific points on Amendment 153. First, although it has not been restricted to agricultural property but has been drawn quite generally, it is worth pointing out that, in relation to urban property, there are two large sectors to which it will have no relevance. They are property owned by companies, in respect of which interest is allowable, and owner-occupied property, to which the Amendment is irrelevant. In other words, the effect of the Amendment is preponderantly agricultural and can be distinguished in that way.
    Secondly, although farm rents are by universal practice payable six months in arrear, many farm tenancy agreements contain the provision, which is deliberately not put into practice, that the rent is payable half-yearly in advance. It has been customary for land owners to borrow for day to day management sufficient to bridge the six-month lag in the receipt of rents. If owners are to be denied tax relief on the interest on such borrowings, it is logical to consider in contrast the position of a farm tenant. If he

    785
    borrowed to pay his rent, he would be allowed tax relief on the interest. But this is where the bite comes, because in general he does not possess the additional borrowing ability, and the Government's attitude to credit is such that it would be impossible for him to get them.
    Following the passing of the Government's proposals, if an owner implemented the strict terms of such a tenancy agreement in requiring his rent to be paid half-yearly in advance, his farm tenants would have to find a full year's rent in one day. There would be the half-yearly rent traditionally payable in arrear, and the half-yearly rent for the ensuing half-year payable for the first time in advance. There will be no difficulty in imagining the chaos, ill feeling and perhaps worse that would be caused by such a course of action. It would be well nigh impossible for tenants to respond to such requests at the present time, in view of the Government's policy on agricultural credit. However, I do not seek to widen the debate into that subject, although there is strong feeling on this side of the House about it.
    12.15 a.m.
    I instance this as showing the absurdity, as well as the injustice, of the proposals as they now are. The Chief Secretary must surely concede that something must be done to assist here. In regard to agricultural estates, it is nonsense to safeguard the position of those who wish to purchase and of those who wish to improve, yet to deny the opportunity to those who wish to maintain their estates. The maintenance of an agricultural estate is an important aspect of the efficiency of the farming that goes on on that estate. Therefore, I believe that it is essential that some Amendment of this nature should be accepted. If the Government do not like our wording, they can clearly provide their own. But in Amendment No. 155 we have provided an alternative wording which, if accepted, would go a long way to meet the needs.
    I do not wish to go over the arguments again, but we have tried to meet the differences in the points raised by the Chief Secretary. In Amendment No. 155, we have the wording:
    "in the case of property let, to the fulfilment of statutory obligations in the matter of estate management, or".
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    I have already referred to the Agricultural Holdings Act, 1948. That has very sweeping impositions. It is directly in relation to that Act that I think it is possible to claim that there is a responsibility on landlords which the Government should recognise. Indeed, the whole essence of that Act is summed up in Section 1(2) where, in defining agricultural land, it states:
    "land used for agriculture which is so used for the purposes of a trade or business."
    If all agricultural land let by estates is let for trade or business, and if the Government accept that wherever trade or business is concerned it is legitimate to allow interest, surely the man who provides the land for letting to the farmer should equally qualify.
    The Government must recognise the special circumstances of those who own and manage agricultural estates. They do not come within this narrow definition of "business". Yet they are directly related to the business of running farms, and they have specific responsibilities laid down in parliamentary enactments—particularly the 1948 Act.
    If the Chief Secretary does not like Amendment No. 153, then I suggest that Amendment No. 155, with its reference to the statutory obligations, provides the necessary distinction that is required.
    I remind the Government that the obligations of agricultural landlords are very far reaching. They extend far beyond the buildings. They extend to things like fences, gates, farm roads, drainage, farm water supply and many other things which are essential to the running of a farm business. This is a responsibility which the agricultural landlord willingly accepts. Therefore, it is entirely wrong to seek to divorce this from the whole sphere of "business" which the Chief Secretary seemed to think was one of the determining factors in the case.
    I think that this is a very strong case indeed. I hope that the Chief Secretary will see the force of the argument and will concede the point.
    Mr. Michael Jopling: I support what has been said by my right hon. Friend the Member for Grantham (Mr. Godber).
    I cannot understand why the Chief Secretary, in Committee, was not able to accept that ownership of agricultural

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    estates is a perfectly normal business activity and why he distinguished the ownership of agricultural estates from other business activities.
    I can envisage many instances, in the ownership of agricultural estates, when it would be absolutely vital that money should urgently be spent on maintenance, particularly in emergencies, and where that money would have to be borrowed to do it. In recent years there have been many instances of storm damage, particularly in Scotland. Considerable damage has been done to agricultural estates, and the repair and maintenance work has had to be done very quickly, otherwise all the farming operations on the estates would come to a halt.
    The Government must accept Amendment No. 153, which is modest in its requirements. It applies to rents paid quarterly or half-yearly in arrears. It does not apply to estates where the rent is paid in advance, but includes cases where the landlord voluntarily forgoes the payment of rent in advance.
    I have referred only to storm damage. Fire is another natural disaster which sometimes damages buildings which have to be dealt with speedily. Most landlords readily accept this responsibility, and immediately restore the damage that has been done. This is normal maintenance, which is covered in the Amendment, but would not be covered unless the right hon. Gentleman was prepared to meet this case. This is a real problem, and I hope that it will be met by the Government.
    Mr. R. H. Turton: I want to try to clear up what I think is a little puzzling, especially to those who were not on the Committee, since when Clauses 18 and 19 have been changed. My right hon. Friend the Member for Grantham (Mr. Godber) and my hon. Friend the Member for Westmorland (Mr. Jopling) talked about rents being paid in arrear. In some parts of the country the custom is that the rent is not only paid in arrear but there is a lapse of three months between the date the rent is due and when it is collected. This means that when the estate owner is doing repairs he has to wait for the rent which will cover his expenditure on those repairs. Therefore, in the estate's account there is a period of the year when the money is at
    788
    the bank earning interest, and a period of the year when the account carries an overdraft.
    Under this legislation, for the period of the year when the estate owner is earning interest, he pays tax on his interest, and for the period of the year when he is running his overdraft he gets no relief. He therefore loses on both the swings and the roundabouts because of this custom of rent being paid in arrear and the three months' delay. I ask the Chief Secretary to clear this up, because in some parts of the country this is very important.
    Having listened to this debate, and having studied the Committee proceedings, my sympathies lie not only with estate owners but with the inspectors of taxes. It will be extremely difficult to disentangle the problem of what the loan is for, whether it comes within or without the scheme of relief.
    My hon. Friend the Member for Westmorland talked about drainage. If an estate owner renews the drains in a field which was drained, 100 years ago, that is maintenance and repair and not improvement. If, however, he drains a similar field which has never been drained before that is improvement. In the one case the interest on the money that he borrows is allowed for tax relief, in the other it is not.
    I ask the right hon. Gentleman to examine this Amendment with great sympathy, because what applies to drains could apply to buildings. In this modern age in estate management, one is in some cases scrapping old buildings and building new ones where one will be entitled to get relief because this is an improvement. In other cases, one is remodelling old buildings and getting no relief because this is repair and maintenance. I ask the Government to reconsider their attitude on the Committee stage.
    In modern days—it was different in old times—the business of estate management is indistinguishable from any other business under Schedule D, and it is wrong to have one law for one type of person in the countryside and another for the remainder.
    It is easy if an estate owner sells out to another person from the town. The latter can get the interest on the borrowed money free of tax and also relief in respect of interest on the money needed

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    for improvements made when the property is purchased, whereas the estate owner who is carrying out his obligations under the Agricultural Holdings Act gets no relief at all.
    Mr. Edward du Cann: I rise to support warmly the case which has been argued by my right hon. and hon. Friends, and in particular the comprehensive review given by my right hon. Friend the Member for Grantham (Mr. Godber) so clearly and well in moving this Amendment.
    Out of respect to the obvious wishes of the House, I shall be brief. It is this wish of the House which precisely illustrates our difficulty at present. The Committee stage of the Bill took place before a small number of hon. Members and here we are, late in the day—and it is day rather than evening—discussing this important Clause which the Government are proposing amending a Bill which substantially alters the business habits and practice of many important sectors of the community. This is outrageous.
    My hon. Friend the Member for Crosby (Mr. Graham Page) made the point that we went in one remove from Clause 10 to Clause 19. It is a tragedy that we should be passing quickly ill-digested and badly written legislation. The Chief Secretary could curtail the debate in a moment by saying that he will graciously accept the obvious logic of the Amendment, but if he does not do that at least he owes the House an answer to two simple questions.
    The first is: when is a farm a business and when is it not a business? I read the Committee stage report and I have listened to such logic as the Chief Secretary with charm and confidence pretends lies behind Clauses 18 and 19, but I cannot understand how this applies in farming and estate management.
    I repeat the question: When is a farm a business and when is it not? The Chief Secretary remarked in an earlier debate that he cannot influence the courts. We know that, alas, it is not the intention of Ministers which counts but what is eventually in the Act. He went on to say, however, that the Government can influence the Inland Revenue. If he will not accept these Amendments to a Clause which he argues is justified, he at least owes the duty of explaining it clearly and fully and to say what in
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    his judgment constitutes maintenance and what does not, so that we all know precisely where we stand. If he is unwilling to detain the House for long tonight, by doing that, though he owes that explanation to the House and the farming community, let him tell the House how he proposes to make this clear at a very early date, though we should have the explanation before passing this miserable Clause into law rather than subsequently.
    I repeat my two simple questions to the Chief Secretary: when is farming a business, and when is it not; and what precisely constitutes maintenance? I hope that we shall have a clear explanation.
    12.30 a.m.
    Sir Charles Mott-Radclyffe: I support my right hon. Friend the Member for Grantham (Mr. Godber) and my hon. Friends who have spoken so forcefully and clearly to the Amendment.
    I hope that the Chief Secretary will not run away with the idea that this is not a very big issue, because it is. What we are debating is how, in respect of tax relief, loan facilities will be treated for the maintenance of all the agricultural land that is let in England, Wales and Scotland. Since I believe that that is about 48 per cent. of the total agricultural land it is a very large slice of the land on which this country's food production depends. This is not a hole-in-the-corner argument.
    For the first time, as far as I know, the Government have sought to draw a clear dividing line in the way that loans are to be treated in respect of land in hand, which is a business, and land let, which is not. They have also drawn a dividing line for the first time in respect of loan facilities and the tax relief on them for improvement on the one hand and maintenance on the other. I believe that in many respects it will be almost impossible for any inspector of taxes to draw this dividing line.
    The agricultural land owner has obligations far more diverse, diffuse, and onerous than the urban landlord. I agree with every word that my right hon. Friend the Member for Grantham said on this issue. Unlike any other landlord, the agricultural land owner is a party to a bargain with the Government under the 1948 Act, in which the party opposite rightly take pride. A partnership was

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    entered into between the various sectors of agriculture and the Government. The Government undertook to provide guaranteed prices for what were then called scheduled commodities. In return the farmer undertook to abide by the rules of good husbandry, and the land owner undertook to abide by the rules of good estate management. In extremis, both undertakings were enforceable, and rightly so.
    It is clear that no agricultural land owner can choose to carry out repairs on farms that are let on a priority of convenience; he must undertake to do the repairs in a priority of urgency. He cannot say to a tenant farmer the roof of whose Dutch barn has been blown off in a gale, or who has suffered substantial flood damage, or whose milking parlour is in a shambles through an act of God, "I am sorry. I shall not repair your buildings because the half year's rent has rot yet come in. I shall wait until it does. But I shall repair the damage to my own farm buildings in hand, though they were not anything like so badly damaged, because I can get a loan and obtain tax relief on those buildings as the Government say that that is a business. But I cannot get tax relief on a loan for the repair of the buildings which are let, because the Government say that that is not."
    Rightly, no agricultural land owner could possibly say that to a tenant. He must undertake the repairs in order of urgency and damage—and he is under a statutory obligation to do so—because stock are involved. The issue is wider than maintaining the farmhouse. There are the other buildings, drainage, fences —a whole gamut of things which do not concern any urban land owner.
    The right way to deal with these maintenance and repair problems is by a loan. But the cost of the repair can absorb the whole year's rents, and it often does. There is nothing peculiar about that. The right way to do this is to raise the money by a bridging loan until such time as the rents come in. For the right hon. Gentleman to say that this is a loan for private purposes is nonsense. Does he really equate repairs to the roof of a Dutch barn or a farm building accommodating pedigree cattle with the building of a garage or a swimming pool?
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    What sort of order of priorities has he got? Does he understand anything about food production or the increased food production programme which the Government are asking the farming community to carry out?
    This is all double-faced talk unless he meets us in some way on the Amendment. The principle has for long been ceded, because the capital expenditure on fixed farm equipment, which is the landlord's responsibility and the excess maintenance, have always been accepted by every inspector of taxes under the old Sections 313 and 314. If an estate owner has to borrow to discharge his direct obligations under a farm tenancy agreement, whose rents are taxable when they come in, it seems only logical and fair that he should be allowed to charge interest against tax on the money he has borrowed.
    If this is not conceded, I warn the right hon. Gentleman and his colleagues that they will create an incredible number of anomalies. There could be the ridiculous anomaly whereby a farmer-tenant can borrow money to pay the rent and deduct the interest against income from his farm, whereas the landowner, if he borrows money to maintain the tenant's farm, cannot deduct interest against tax. There is the even more ridiculous position where, if the landowner does not wish, or cannot afford to go on with the burden of maintaining let property and sells it, the new purchaser is allowed relief on the loan to buy the farm and on the loan to do the repairs under Clause 19(5). If this is not cloud-cuckoo-land tell me what is.
    My right hon. Friend mentioned the problem of rent six months in arrear. This is by custom, not by Statute. It would be absurd to drive any agricultural land owner into a position whereby he has to ask his tenants to renegotiate all tenancy agreements and pay rent in advance. They would not do it. The right hon. Gentleman is driving the estate owner to cut back on maintenance of land that is let and to concentrate on the improvement of land that he has in hand. This is contrary to the best traditions of estate management, contrary to all custom, and it is thoroughly bad for agriculture as a whole.
    I can only say that if the right hon. Gentleman is serious in his demand that

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    the farming community should increase production I do not understand how he can put forward a policy by which a person can get tax relief on a loan to buy a caravan and go off on a holiday but cannot get tax relief on a loan to maintain farm buildings containing pedigree stock. This is the agricultural policy of a Government who say that they are trying to get into the Common Market.
    Mr. Speaker: Order. Perhaps I might remind the House that after this debate there are 29 debates ahead of us. Brief speeches will not hurt.
    Mr. Peter Mills: There is no doubt that the Government's proposal will have a very real effect on agricultural landlords. It will create serious problems for them. What is at stake is nothing less than good estate management. It is not a question of the agricultural lobby pursuing a small or minor point. Unless the Minister meets us in the Amendment, the effect on agriculture will be very serious. When we consider the size of this problem—48 per cent. of all land—we see how important it is.
    We have been told that it is normal practice for payments to be made in arrears. This can lead to a very serious situation, for land owners obviously would have to borrow to carry out maintenance and repairs. Things are difficult enough in agriculture at present without putting another burden on the industry. Agricultural landlords are in business. They supply capital and fixed equipment to agriculture. They may not be in business in the eyes of the law, but I believe that they are. They play a very important part in the agricultural community, and it is important that they should be helped and not discouraged.
    Work must be done quickly. It is not a question of delaying it. One can put off painting, but one cannot put off emergency work. It is ridiculous to leave a Dutch barn which has collapsed or any other serious maintenance problem. The work must be done quickly, and it must be paid for. The money for it must be found. If the rent is not paid, the landlord must borrow the money. It is easy to see this point. I cannot understand why the Minister cannot see it.
    The alternative is that tenant farmers will have to pay in advance. This is
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    stupid. They cannot possibly find a year's rent in advance, particularly in present conditions, with overdrafts hitting the ceiling. It is hard enough to keep things going now without having to find a year's rent in advance. There is a serious principle at stake. If something is not done, the industry will be left in a critical position. In view of the importance of agriculture and the support which landlords are giving it, careful attention must be given to these Amendments.
    It is not a small sum of money which is involved. Agricultural rents have, rightly, gone up and up. But a lot more money must be borrowed from the banks to finance maintenance and repairs. When one thinks of some of the rents, running into thousands of pounds, one realises what a serious situation could arise if the Minister does not consider the Amendments favourably. I repeat that this is not a small point pushed by the agricultural lobby in the House. Good estate management is at stake. I hope that the Minister will seriously consider the points put to him.
    Mr. Paul Hawkins: I am glad to have a few moments to speak on this subject because I manage several estates. For anybody to say that the management of a landed estate let to farming tenants is not business is absolute nonsense.
    The job of trying to make ends meet throughout the year is very difficult on many estates. Farm rents are payable in arrears, and for quite a time, and particularly during the next year, we will have great difficulty in collecting rents in certain areas which were badly damaged last year by flooding. An enormous amount of drainage work will have to be done, and money will have to be advanced for it so that tenants may produce the crops and pay the rents in future.
    Estate management is a real business. One must try to make ends meet, otherwise the estate cannot be carried on. I do not know whether the borrowing of money by a landlord to pay an agent for managing the estate would be tax allowable, but we cannot go into that now. But there are many sides to this question. In our last agricultural debate, almost every speaker said how necessary drainage work would be in the

    795
    autumn on the waterlogged land. A lot of money will need to be borrowed to enable that work to be done. If we cannot borrow the money and charge the interest against the running of the estate, it will make a big difference. I am glad that the Joint Parliamentary Secretary to the Ministry of Agriculture is present: I hope that he is giving his near neighbours some good advice. I just cannot believe that the Government will not accept the Amendment.
    12.45 a.m.
    Mr. J. E. B. Hill: Can the Chief Secretary tell us how much the Treasury hope to save by disallowing agricultural maintenance? I suspect that the sum is quite large. If it is, that merely emphasises the tremendous significance and importance of maintenance. Is the right hon. Gentleman aware that in any textbook of rural estate management there is a long chapter having as its theme the importance of keeping maintenance up to date?
    Has he further considered the psychological effect on the owner of discriminating against maintenance in this way? It must follow that the tenant occupier of the land will feel that in a time of stringency he can neglect some of his own obligations in return. Nothing could have a worse psychological effect on the industry,
    If the Chief Secretary does not much mind about that, I might tell him that it could have a worse psychological effect on the image of the Government in the eyes of the people, because this action in the Budget is wholly inconsistent with the Government's profession of their support for agriculture, their desire to see an expanding, modern industry. What other industry is having one section of its fixed equipment—the equivalent of the factory floor—and much of its raw materials—the land—discriminated against? How can he justify such discrimination against one sector of one large industry?
    Mr. John Wells: Generally horticultural holdings are owner-occupied, but some of the larger and more complicated ones are inevitably let to tenants. On those maintenance is most costly. A horticultural holding is more labour-intensive and more capital-intensive than a mixed farm. Problem
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    which apply to agriculture generally are multiplied many times when applied to horticulture. There are massive cold stores, packing sheds and buildings of that sort. That maintenance of those buildings and the equipment when they are landlords' property will not be allowed is a great absurdity. When he reconsiders this situation, as I hope he will, I hope that the Chief Secretary will bear this in mind.
    Mr. Tom Boardman: Arguments in favour of this Amendment have been marshalled largely to deal with the problem for agriculture, but my right hon. Friend the Member for Grantham (Mr. Godber) made clear that the evil applies also to urban estates. This is so especially on small estates where the owner is faced with the problem of repairing roofs to houses. He cannot get relief for that, but he can obtain it for constructing a swimming pool. The Chief Secretary must know how artificial is the line drawn in respect of maintenance. The Revenue has to decide how much maintenance arose before ownership started. It will be impossible to decide that when a new roof has to be put on a cottage and how much wear and tear developed over the previous 45 years. It is a nonsense.
    Having listened to the powerful arguments on behalf of agriculture, I remind the Chief Secretary that the Amendment applies also to urban properties. It is far too modest to meet the requirement to do justice to owners of houses and other buildings apart from agriculture, but it is a step in the right direction and I hope that the right hon. Gentleman will accept it.
    Mr. Temple: I would not rise at this late hour if I did not think there was a point which has not been raised already in this debate. The debate has centred mainly on large agricultural estates, but there is a development in farming which is entirely new and which should be considered. I refer to the practice of owner-occupiers selling on a system of leaseback.
    There is tremendous shortage of capital. Any owner-occupier today is desirous of raising more capital to develop possibly an intensive farming interest. The Parliamentary Secretary to the Ministry of Agriculture will know of this

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    new development. An owner-occupier farming his land is in a privileged position under these Clauses, but if he sells out on the basis of lease-back, although the situation is exactly similar, in fact a different ownership has taken place. In those circumstances the maintenance situation in regard to capital requirement to finance maintenance will be different. Is it right to act against this progressive system of lease-back? This practice will increase in the immediate future. In Field and Country Life one often sees advertisements involving the lease-back system to put more money into owner-occupied farms. I believe that, unless the Chief Secretary accepts the Amendment, he will stultify the progress which the lease-back system is making.
    I endorse what my right hon. Friend the Member for Thirsk and Malton (Mr. Turton) said about land drainage. It is well known that land drainage is one of the most important aspects of maintenance. Much of our land drainage was done a century or a century and a half ago. Nevertheless, it is maintenance if that land drainage is being renewed. One of the biggest calls for capital in agriculture, and the most productive investment, is land drainage.
    Of these two points I stress most particularly that about lease-back, because I do not believe that the Government would want to stultify the progress of this new scheme which is effective in bringing capital into argriculture.
    Mr. John Smith: The Government are trying to make a distinction where none exists. With agricultural property there is no true distinction between maintenance and improvement. Some so-called maintenance is improvement. Some owners spend more on repairs and maintenance than the whole of the rent. They gradually work up a higher state of repair and maintenance. As a consequence, they run up an overdraft which they repay occasionally by a sale—for example, by the sale of agricultural cottages no longer required because of the progress of agriculture. Property is not like gilt-edged stock. It cannot be sold in penny numbers to repay an overdraft. It can be sold only in amounts of quite large value occasionally.
    I referred to the difficulties of making this distinction. Owners do not make it
    798
    in their bank accounts. All these provisions which will make it necessary to distinguish between improvement and maintenance, because there are to be differential rates of interest on borrowing, and will mean innumerable separate bank accounts in innumerable different branches of banks. It is simply more sand in the national gearbox. The Chief Secretary recognised this in Committee by saying this:
    "It is impossible, or almost impossible, to segregate money and say. 'This particular pound was used for this particular purpose.' "—[OFFICIAL REPORT, Standing Committee F, 18th June, 1969; c. 446.]
    The converse of what I have said about maintenance often being improvement is also true. Some improvement is maintenance. Many improvements are essential to maintain rental value, just as essential as repairs are. Consequently, all landowners are making improvements all the time. As a result, it will be perfectly simple for them, if they wish, gradually to shift their borrowing on their present amalgamated accounts on to an account which they say is specifically for improvements. Therefore, as in a short time it will be easy for landowners, if they are so inclined, to avoid the purpose of this legislation, I hope that the Chief Secretary will see fit to save them from these subterfuges and accept the Amendment.
    Mr. Diamond: I invite the House to be good enough to consider the present situation with regard to the law affecting landowners and farmers. I answer immediately the question put to me by the right hon. Member for Taunton (Mr. du Cann) by saying that the answer is that farming is always a business. There is no problem about that.
    There is a problem, however, in the existing law. I am not talking about interest or the disallowance of interest. I am inviting the House to consider what the present law is, a law which has been the case for a very considerable time, the time affecting all parties and all Governments. The law is that an agricultural landowner is not treated as carrying on a trade so long as he is an individual. That is the present situation, and it has been so for many years.
    1.0 a.m.
    Time and again, right hon. and hon. Gentlemen have referred to the business

    799
    of estate management. It is a phrase which I well understand. It describes the activities which go on, but those activities of an individual do not constitute a trade for income tax purposes. If, however, an agricultural land owner, be his estates large or small, turns himself into a limited company and by that process segregates these activities from the rest of his personal activities, the activities carried on by him as director of the company, albeit they are the identical activities which he previously carried on as an individual, are treated as a trade, by the sheer process of separating them from the other personal activities which he continues to carry on elsewhere.
    That is the present situation under the law. It is right to describe the position as one of considerable difficulty and complexity, and it is not easy to see why in one case the treatment should be of one kind and in another case it should be different. But that is the present law. We are not proposing to alter that law. Accordingly, business expenses are business expenses, and private expenses are private expenses. Business expenses include a host of things, among them interest on borrowed money.
    Expenses incurred by a company carrying on the trade of estate ownership and management are not trade or business expenses if those same activities are carried on by an individual personally. That is the present situation. I do not say that hon. Members opposite have been satisfied or have even been aware of it, but they have been acting under it for years and years.
    It is not surprising, therefore, that when one puts the searchlight on a particular expense it becomes of importance whether it is treated as a business expense or not; but that depends not on any proposals in the Bill but on the law as it is at the moment. Every estate owner who runs his estate as an incorporated company receives and will continue to receive relief on interest on borrowed money, and every individual who carries on broadly the identical activities will not because he is not carrying on a trade under the Income Tax Acts. If that was to be criticised, the criticism could have come during past years. All I am doing is reminding the House that what we are now experiencing is the high-lighting of the
    800
    difficulty through the development which we are proposing in the Bill.
    Mr. Michael Alison: Why has the Chief Secretary breached this clear principle in the matter of the acquisition and improvement of land?
    Mr. Diamond: The Chief Secretary has not. I have never said that improvement of land is in all cases a business. I have said that we are making, as a deliberate decision of policy, as an exception, the acquisition and improvement of property. We are in a difficult situation, but obviously the situation is not difficult for those who run their estates as companies.
    The right hon. Member for Grantham (Mr. Godber) moved the Amendment with his usual clarity and courtesy. I appreciate that he has gone to considerable lengths to try and separate the functions of an agricultural estate owner from the functions of an urban estate owner. But he recognised that one cannot do this completely, and the hon. Member for Leicester, South-West (Mr. Tom Boardman) has helped the argument considerably by making it clear that one cannot do it at all and that one should not attempt to do it at all. The hon. Gentleman logically went on to say that he did not see why this relief should apply not merely to the urban estate owner but to a man owning a couple of houses, for example.
    The hon. Gentleman is, of course, right. One cannot distinguish in drafting or in common sense or in the pressures of the case. I recognise that there is a considerable case here, and I have gone carefully into all the distinctions which have been drawn, receiving a most valuable deputation and obtaining a lot of useful information. But the fact remains that one cannot distinguish, even in difficulty or in hardship, between an agricultural estate and an urban estate by the compulsions which are put upon the owner.
    Therefore, I cannot accept the Amendment because the difficulty, such as it is, stems from the existing law, which we are not altering, and because the area proposed by the Amendment to be segregated cannot be distinguished in any tenable way from urban property which, in turn, cannot be distinguished from the owner-occupier.

    801
    If one pursues the argument of allowing interest first to the landed estate owner, then to the urban estate owner, and then to the owner-occupier, one has torpedoed the provision completely. One might say that that is a good thing, But I want to make it clear that we could not sensibly bring in this proposal at all if we had in mind allowing maintenance of owner-occupied property. Every owner-occupier incurs maintenance and repairs practically every year—certainly very frequently, and it would be impossible to deny this concession to the owner-occupier with a loan which he had incurred and which was associated with maintenance and repairs. The cost would be such that there would be nothing left of the provision at all. I hope I have made clear the logical steps from the Amendment and why it is utterly impossible to accept it.
    Mr. John Smith: The right hon. Gentleman must not say that it is impossible to distinguish between agricultural and urban property when that distinction is made every day by the Inland Revenue in the matter of estate duty. Indeed, it is easier to distinguish between the two than between maintenance and improvement.
    Mr. Diamond: Of course, I recognise that there is estate duty relief given for agricultural property which is not given for urban property. I am saying that for the purposes of interest one cannot distinguish between one and the other. If the hon. Member for the Cities of London and Westminster (Mr. John Smith) is asking me whether I can distinguish between Smith Street and 10 acres in the middle of Huntingdonshire,

    Division No. 334.]

    AYES

    [1.13 a.m.

    Alison, Michael (Barkston Ash)

    Chataway, Christopher

    Gibson-Watt, David

    Allason, James (Hemel Hempstead)

    Chichester-Clark, R.

    Gilmour, Sir John (Fife, E.)

    Astor, John

    Clark, Henry

    Glover, Sir Douglas

    Awdry, Daniel

    Clegg, Walter

    Glyn, Sir Richard

    Baker, Kenneth (Acton)

    Cooke, Robert

    Godber, Rt. Hn. J. B.

    Baker, W. H. K. (Banff)

    Crowder, F. P.

    Goodbart, Philip

    Bennett, Sir Frederic (Torquay)

    Cunningham, Sir Knox

    Goodhew, Victor

    Bennett, Dr. Reginald (Gos. & Fhm)

    Dalkeith, Earl of

    Gower, Raymond

    Biffon, John

    d'Avigdor-Goldsmid, Sir Henry

    Grant, Anthony

    Black, Sir Cyril

    Dean, Paul

    Grieve, Percy

    Blaker, Peter

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

    Griffiths, Eldon (Bury St. Edmunds)

    Boardman, Tom (Leicester, S. W.)

    Drayson, G. B.

    Gurden, Harold

    Boyle, Rt. Hn. Sir Edward

    du Cann, Rt. Hn. Edward

    Hall, John (Wyoombe)

    Braine, Bernard

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

    Hall-Davis, A. G. F.

    Brown, Sir Edward (Bath)

    Eyre, Reginald

    Hamilton, Lord (Fermanagh)

    Bruce-Gardyne, J.

    Farr, John

    Harvey, Sir Arthur Vere

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

    Fisher, Nigel

    Hastings, Stephen

    Burden, F. A.

    Fletcher-Cooke, Charles

    Hawkins, Paul

    Campbell, B. (Oldham, W.

    Fortescue, Tim

    Heseltine, Michael

    Carlisle, Mark

    Foster, Sir John

    Higgins, Terence L.

    yes, I am capable of doing that. I am trying to make clear that in the context of what we are considering neither I nor the hon. Member for Leicester, South-West can distinguish between the two.
    Mr. Godber: We on this side are shocked at the answer given by the Chief Secretary. It is completely inadequate and lacking in the logic which he normally employs. He has claimed that the difficulty stems from the existing law. The law has certainly continued for a long time the strange dichotomy of the position of the agricultural estate. We accept that, but it is he and his colleagues who are penalising landowners in relation to the law. The Government should accept that they are penalising them and find a way to help them.
    The Chief Secretary gave no explanation that carried any weight with anybody on either side of the House in relation to his distinction between purchase and development and maintenance. He is really saying that he wants money out of urban property, he cannot distinguish between urban and agricultural property and what does it matter about farmers anyway? That is what his arguments came down to. It is a disgraceful reply. It does not meet the case; agriculture will be harmed; estate ownership will be 'harmed; agricultural development, of which we have heard so much from the Government, will be damaged; and I hope that my hon. and right hon. Friends will record their view in the Lobby.
    Question put, That the Amendment be made:—
    The House divided: Ayes 145, Noes 197.

    Hiley, Joseph

    Mills, Peter (Torrington)

    Scott-Hopkins, James

    Hill, J. E. B.

    Mills, Stratton (Belfast, N.)

    Sharples, Richard

    Holland, Philip

    Mitchell, David (Basingstoke)

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

    Hordern, Peter

    Monro, Hector

    Silvester, Frederick

    Hornby, Richard

    Montgomery, Fergus

    Smith, Dudley (W'wick & L'mington)

    Howell, David (Guildford)

    Morgan-Giles, Rear-Adm.

    Smith, John (London & W'minster)

    Hunt, John

    Morrison, Charles (Devizes)

    Speed, Keith

    Hutchison, Michael Clark

    Mott-Radclyffe, Sir Charles

    Stainton, Keith

    Iremonger, T. L.

    Munro-Lucas-Tooth, Sir Hugh

    Stodart, Anthony

    Jenkin, Patrick (Woodford)

    Nott, John

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

    Jones, Arthur (Northants, S.)

    Onslow, Cranley

    Taylor, Frank (Moss Side)

    Jopling, Michael

    Orr-Ewing, Sir Ian

    Temple, John M.

    Joseph, Rt. Hn. Sir Keith

    Osborn, John (Hallam)

    Turton, Rt. Hn. R. H.

    Kershaw, Anthony

    Page, Graham (Crosby)

    van Straubenzee, W. R.

    Kimball, Marcus

    Percival, Ian

    Vaughan-Morgan, Rt. Hn. Sir John

    King, Evelyn (Dorset, S.)

    Pike, Miss Mervyn

    Waddington, David

    Kirk, Peter

    Pink, R. Bonner

    Weatherill, Bernard

    Kitson, Timothy

    Pounder, Rafton

    Wells, John (Maidstone)

    Knight, Mrs. Jill

    Powell, Rt. Hn. J. Enoch

    Whitelaw, Rt. Hn. William

    Lane, David

    Price, David (Eastleigh)

    Wiggin, A. W.

    Legge-Bourke, Sir Harry

    Prior, J. M. L.

    Wilson, Geoffrey (Truro)

    MacArthur, Ian

    Pym, Francis

    Wolrige-Gordon, Patrick

    Maclean, Sir Fitzroy

    Ramsden, Rt. Hn. James

    Woodnutt, Mark

    Macleod, Rt. Hn. Iain

    Renton, Rt. Hn. Sir David

    Worsley, Marcus

    McNair-Wilson, Michael

    Ridley, Hn. Nicholas

    Wright, Esmond

    Maddan, Martin

    Ridsdale, Julian

    Maginnis, John E.

    Rossi, Hugh (Hornsey)

    TELLERS FOR THE AYES:

    Marten, Neil

    Royle, Anthony

    Mr. Jasper More and

    Maude, Angus

    Russell, Sir Ronald

    Mr. Humphrey Atkins.

    Maxwell-Hyslop, R. J.

    Scott, Nicholas

    NOES

    Allaun, Frank (Salford, E.)

    Eadie, Alex

    Lewis, Arthur (W. Ham, N.)

    Anderson, Donald

    Edwards, William (Merioneth)

    Lewis, Ron (Carlisle)

    Archer, Peter

    Ellis, John

    Lipton, Marcus

    Ashley, Jack

    English, Michael

    Loughlin, Charles

    Atkins, Ronald (Preston, N.)

    Ennals, David

    Lubbock, Eric

    Atkinson, Norman (Tottenham)

    Ensor, David

    Lyon, Alexander W. (York)

    Barnett, Joel

    Evans, Fred (Caerphilly)

    Mabon, Dr. J. Dickson

    Baxter, William

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

    McCann, John

    Bence, Cyril

    Fitch, Alan (Wigan)

    MacColl, James

    Benn, Rt. Hn. Anthony Wedgwood

    Fletcher, Raymond (Ilkeston)

    Macdonald, A. H.

    Bidwell, Sydney

    Fletcher, Ted (Darlington)

    McGuire, Michael

    Binns, John

    Foot, Michael (Ebbw Vale)

    McKay, Mrs. Margaret

    Bishop, E. S.

    Ford, Ben

    Mackenzie Gregor (Rutherglen)

    Blackburn, F.

    Forrester, John

    Mackie, John

    Blenkinsop, Arthur

    Fowler, Gerry

    Mackintosh, John P.

    Booth, Albert

    Freeson, Reginald

    Maclennan, Robert

    Boston, Terence

    Gardner, Tony

    McMillan, Tom (Glasgow, C.)

    Boyden, James

    Gray, Dr. Hugh (Yarmouth)

    McNamara, J. Kevin

    Bradley, Tom

    Gregory, Arnold

    Mahon, Peter (Preston, S.)

    Bray, Dr. Jeremy

    Grey, Charles (Durham)

    Mahon, Simon (Bootle)

    Brooks, Edwin

    Griffiths, David (Rother Valley)

    Mallalieu, E. L. (Brigg)

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

    Griffiths, Eddie (Brightside)

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

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

    Hamilton, James (Bothwell)

    Manuel, Archie

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

    Hannan, William

    Mapp, Charles

    Buchan, Norman

    Harper, Joseph

    Marks, Kenneth

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

    Harrison, Walter (Wakefield)

    Marquand, David

    Callaghan, Rt. Hn. James

    Haseldine, Norman

    Mellish, Rt. Hn. Robert

    Carmichael, Neil

    Hazell, Bert

    Mendelson, John

    Carter-Jones, Lewis

    Henig, Stanley

    Mikardo, Ian

    Chapman, Donald

    Hooley, Frank

    Miller, Dr. M. S.

    Concannon, J. D.

    Houghton, Rt. Hn. Douglas

    Milne, Edward (Blyth)

    Crostand, Rt. Hn. Anthony

    Howarth, Robert (Bolton, E.)

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

    Dalyell, Tam

    Howell, Denis (Small Heath)

    Molloy, William

    Davidson, Arthur (Accrington)

    Hoy, Rt. Hn. James

    Morgan, Elystan (Cardiganshire)

    Davies, G. Elfed (Rhondda, E.)

    Hughes, Rt. Hn. Cledwyn (Anglesey)

    Morris, Alfred (Wythenshawe)

    Davies, Dr. Ernest (Stretford)

    Hughes, Roy (Newport)

    Morris, Charles R. (Openshaw)

    Davies, Rt. Hn. Harold (Leek)

    Hunter, Adam

    Morris, John (Aberavon)

    Davies, Ifor (Gower)

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

    Moyle, Roland

    de Freitas, Rt. Hn. Sir Geoffrey

    Jay, Rt. Hn. Douglas

    Murray, Albert

    Dell, Edmund

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

    Newens, Stan

    Dempsey, James

    Jenkins, Rt. Hn. Roy (Stechford)

    Ogden, Eric

    Dewar, Donald

    Johnson, Carol (Lewisham, S.)

    O'Malley, Brian

    Diamond, Rt. Hn. John

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

    Oram, Albert E.

    Dickens, James

    Jones, T. Alec (Rhondda, West)

    Orbach, Maurice

    Dobson, Ray

    Judd, Frank

    Orme, Stanley

    Doig, Peter

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

    Oswald, Thomas

    Driberg, Tom

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

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

    Dunnett, Jack

    Kerr, Russell (Feltham)

    Page, Derek (King's Lynn)

    Dunwoody, Mrs. Gwyneth (Exeter)

    Lawson, George

    Palmer, Arthur

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

    Leadbitter, Ted

    Parkyn, Brian (Bedford)

    Lee, John (Reading)

    Pavitt, Laurence

    804

    805

    Peart, Rt. Hn. Fred

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

    Whitaker, Ben

    Pentland, Norman

    Silkin, Rt. Hn. John (Deptford)

    Whitlock, William

    Perry, Ernest G. (Battersea, S.)

    Silkin, Hn. S. C. (Dulwich)

    Williams, Alan (Swansea, W.)

    Perry, George H. (Nottingham, S.)

    Silverman, Julius

    Williams, Alan Lee (Hornchurch)

    Price, Christopher (Perry Barr)

    Skeffington, Arthur

    Williams, Clifford (Abertillery)

    Probert, Arthur

    Small, William

    Williams, Mrs. Shirley (Hitchin)

    Rees, Merlyn

    Spriggs, Leslie

    Willis, Rt. Hn. George

    Roberts, Rt. Hn. Goronwy

    Summerskill, Hn. Dr. Shirley

    Wilson, William (Coventry, S.)

    Roberts, Gwilym (Bedfordshire, S.)

    Taverne, Dick

    Winnick, David

    Rodgers, William (Stockton)

    Thomson, Rt. Hn. George

    Winstanley, Dr. M. P.

    Roebuck, Roy

    Tinn, James

    Woof, Robert

    Ross, Rt. Hn. William

    Urwin, T. W.

    Rowlands, E.

    Varley, Eric G.

    TELLERS FOR THE NOES:

    Ryan, John

    Wallace, George

    Mr. Ernest Armstrong and

    Shaw, Arnold (Ilford, S.)

    Watkins, David (Consett)

    Mr. Neil McBride.

    Sheldon, Robert

    Watkins, Tudor (Brecon & Radnor)

    Shore, Rt. Hn. Peter (Stepney)

    Wellbeloved, James

    Sir C. Mott-Radclyffe: I beg to move Amendment No. 238, in page 21, line 43, at end insert 'or
    (d) in carrying out any works for which a grant has been, or will be, given on the advice of the appropriate Historic Buildings Council'.
    Mr. Speaker: With this Amendment we are discussing the sub-Amendment, in line 2, at end add 'or under any Act which may enable a local authority to recommend an historic buildings grant'.
    Perhaps I might again remind the House that after this debate there are 28 more debates on Report. I am grateful to hon. Members who responded to my appeal for brief speeches in the last debate. Brief speeches will help.
    Sir C. Mott-Radclyffe: Mr. Speaker, I shall respond to your request and be extremely brief.
    At the outset, I should explain that the hon. Member for Barking (Mr. Driberg) and I are the two Parliamentary representatives on the Historic Buildings Council for England. The Amendment is drafted with the words
    "the appropriate Historic Buildings Council"
    because there are separate councils for Scotland and Wales and we were not trying to obtain a concession in respect of England at the expense of Wales and Scotland, for obvious reasons.
    The Historic Buildings Council is responsible for advising the Government on grants for the upkeep and restoration of buildings of historic and architectural importance as regards both exteriors and interiors. In the case of private houses, we apply a means test to make sure that an owner who has applied for a grant cannot afford the sum required to restore his house, and the conditions imposed are that the house must be open to the public. Of course, the Historic Buildings Coun-
    806
    cil's reports are published annually and can, in effect, be debated by this House.
    We rarely give a grant of more than 50 per cent. of the cost, and that 50 per cent. is seldom given until the work is completed. Thus, an applicant has to borrow the money for the whole cost of the operation knowing that when the work is completed he will get back 50 per cent. or some smaller proportion of the total sum by reason of the grant recommended by the Council. Until now, the owner has been able to set off bank interest against other income for tax purposes; in other words, he has been able to service the loan net instead of gross.
    A completely different situation has now arisen. Under the Government's new Clause 28, anybody who is in receipt of a grant previous to 15th April—Budget day—is all right in relation to tax relief on the loan up to 1975; anybody who is in receipt of a grant after that date will not be able to service that loan net but will have to service it gross.
    Therefore, this curious anomaly will arise. Let us suppose that owner A is in receipt of a grant, upon the recommendation of the Council, early in April this year and owner B is in receipt of a grant upon the recommendation of the Council early in May this year. Owner A will be able to deduct the bank interest against other sources of income, but owner B will not. This creates a ridiculous position.
    It is important that houses of historic interest, together with their contents, should be maintained in a fit state to be open to the public. There is no doubt that the public enjoy seeing them, because the figures of visitors to these houses increase annually. Indeed, there is almost a race between the owners of historic houses to see who can attract the most visitors.

    807
    But there is a great difference between borrowing net and borrowing gross. If we put an unfair or impossible financial burden on an owner, he will not be able to defray 50 per cent. of the cost of maintaining his house or of preserving it into good repair.
    I want to put before the Chief Secretary two simple examples which I have worked out. If my arithmetic is wrong, I am prepared to be told that it is. I want to take two hypothetical owners of historic houses—Mr. A. and Mr. B. I presuppose that the cost of renovating and repairing each of their houses is £40,000. That is for eradicating dry rot, repairing the roof, the stonework, and so forth. Mr. A gets a 50 per cent. grant before 15th April and Mr. B gets a 50 per cent. grant after 15th April; that is, each gets £20,000. Each owner has to borrow the whole £40,000, knowing that he will be getting £20,000 back when the work is completed. Owner A, who was in receipt of the grant early in April, will be able to deduct the interest on the bank loan against his other sources of income. Owner B will not. Borrowing at 10 per cent. on £40,000 is £4,000. Assuming that both owners are surtax-payers at 14s. 9d. in the pound, it will cost owner A about £900 a year to service the loan until the grant is repaid, but it will cost owner B. servicing the loan gross, £12,000. If owner B could afford £12,000 a year. He would not have passed the Council's means test and would not have got the grant.
    So, in two comparable cases involving the same amount of money, one is allowed to deduct the loan interest against tax and the other is not.
    Mr. Arthur Lewis: May I ask whether the means test is based on the social security scale? How is the means test based?
    Sir C. Mott-Radclyffe: The hon. Gentleman knows very well how the means test is conducted. The owner's resources are gone into with very great care. There has never been any dispute about that.
    I am pointing out the ridiculous anomaly which will arise between a grant given before Budget day and a grant given after Budget day. This will raise serious complications. It will mean
    808
    that an owner who applies for a grant now will have to service the loan gross and that will put him in great difficulty. Many of those who would have accepted 50 per cent. and done the necessary renovations to the house will no longer be able to do so, and therefore houses of great historic importance, with valuable contents, will not be maintained to the benefit of the public, but will fall down.
    I know that in theory local authorities have power to clap on a compulsory preservation order. I know that in extremis they have power to acquire compulsorily, but this is a bluff, because we know that the money is not available for them to do so. Therefore, if the Government wish to enable owners to maintain a fit state for the public to see houses of historic interest, it would not only be far easier, but cheaper and more sensible to allow houses in receipt of a grant from the Council to attract tax relief, which they used to get before the Budget was brought in.
    1.30 a.m.
    Mr. Tom Driberg: I shall speak briefly at this time of night. It is nobody's fault in particular that this Amendment happens to arise so inconveniently late, and I am sorry to detain the House for even a few minutes.
    I support the Amendment, because if my right hon. Friend were to reject it he would be doing something which would tend to frustrate the intention of the Government themselves, who provide these grants through the Ministry of Housing and Local Government, on the advice of the Historic Buildings Council, on which both the hon. Member for Windsor (Sir C. Mott-Radclyffe) and I sit. Even in the conditions of economic stringency of the past year the Government saw fit to increase the relatively modest budget of the Council by £100,000. The total budget for each year is now £650,000, which is not an enormous sum, as hon. Members would realise if they could see the immense volume of work that has to be done with it and the number of deserving cases which, unfortunately, have to be turned down. When I say "deserving cases" I mean deserving cases of buildings.
    The only point on which I disagree slightly with the hon. Gentleman is that

    809
    his two hypothetical cases were of people paying surtax. The hon. Gentleman knows as well as I do, because we have been on tours visiting houses, that many of the people who are trying their best to keep these houses in good repair because they are part of the superb architectural heritage of this nation, together with the cathedrals, churches, and other public buildings, are far from well off. As the hon. Gentleman said, stringent financial inquiries are made—and this is the answer to my hon. Friend the Member for West Ham, North (Mr. Arthur Lewis)—and people who can really afford to do these repairs and restorations themselves are simply refused a grant. Indeed, if they are really rich they probably will not bother to apply for a grant because it involves conditions which some of them find rather troublesome, like having to open their houses several times a week, which some may not want to do.
    Do the Government want these houses to be kept in good repair? There is the artistic point, which I have mentioned—and there is the architectural heritage, which I regard is immensely important. There is also the practical point, that these historic houses, so many of which are now open to the public, are a relatively new but increasingly important part of the general tourist attractiveness of this country. It is astonishing how many Americans and visitors from Europe and all over the world come to see these great and small houses, and it would be a great pity if my right hon. Fiend and the House were to turn down this very modest relief which applies to only a limited number of buildings. It is limited to the repair and restoration of buildings, and not to their every-day maintenance. I hope that my right hon. Friend will not say anything like that, because it is restoration and repairs that we are concerned with: we firmly refuse to recommend grants simply for maintenance. I hope very much that my right hon. Friend will be able to accede to this Amendment.
    Mr. Julian Ridsdale: I wish to speak briefly in support of my hon. Friend the Member for Windsor (Sir C. Mott-Radclyffe). I wish to draw the attention of the House to the Local Authorities (Historic Buildings) Act, 1962, and the Local Government (Financial Provisions) Act, 1963, both of which
    810
    enable help to be given for restoration of scheduled buildings and historic buildings by grants or loans.
    The difficulty I see at present, because of the financial policies of the Government, is that the money available for grants is very small indeed and this is making it difficult for those important buildings to be preserved as they should. The only other way money can be obtained is by a loan. The Government are empowered to give loans through these Acts, but are clawing bark the money by not allowing this as a deductible expense. It seems entirely wrong to me and, I am sure, to many people in the country.
    This means that the Government, in order to preserve or to clear the present economic position, are allowing our heritage to be gravely impaired because they are not willing to allow the loans as a deductible charge. It is for those reasons that I wish to support the Amendment.
    Mr. Robert Cooke: I also wish to support my hon. Friend the Member for Windsor (Sir C. Mott-Radclyffe), and I would also endorse what the hon. Gentleman the Member for Barking (Mr. Driberg) said. He speaks from great knowledge. Not only has he an historic building of his own which he makes available to thousands of visitors each year, but he also sits on the Historic Buildings Council and on the Historic Houses Committee of the British Travel Association, on which I have the privilege of serving with him. This Committee is concerned with the enjoyment of buildings restored by the help of the Historic Buildings Council.
    When my hon. Friend the Member for Windsor gave his financial information and statistics, he made the point that it was the owner of the more modest house who would find himself in real difficulty. The big men, the big-time proprietors who hit the headlines, the proprietors of historic houses which have many other activities—and I will not advertise them by naming them—can write off the interest on borrowed money. Some of them receive grants because the cost of maintaining their building or of doing the necessary restoration work is prodigious. It is the smaller people who cannot do this. They are in the majority, and it is their houses which are more modest—and often more beautiful than the palatial residences—which will be lost, not

    811
    immediately, but will be run down over the years.
    Anyone who has had anything to do with them will know that if one does not keep such a building in a reasonable state it can get into a state where it cannot be redeemed, and that is why these grants are given by the Historic Buildings Council. The Government support their policy and give money, but they are making it difficult in cases where they should be even more helpful to smaller people doing a fine job. The hon. Member for Barking spoke of the increasing number of people enjoying these buildings. They bring money in through tourism. I hope the Government will bear this in mind and give a favourable reply.
    Mr. John Smith: This Amendment, among others, is a typical result of the ill-conceived nature of this legislation. The Government are trying to nobble speculators, but all that they appear to be doing is to encourage dry rot in historic buildings.
    I support the Amendment. I have no objection to the Government's trying to stop speculation, but surely they can think of a way of doing it without encouraging dry rot in historic buildings?
    Mr. Diamond: The more one listens to the hon. Member for Cities of London and Westminster (Mr. John Smith) the more one realises that however often he speaks one will never hear anything faintly comparable with dry rot.
    I should like to express our appreciation to both the hon. Member for Windsor (Sir C. Mott-Radclyffe) and my hon. Friend the Member for Barking (Mr. Driberg) for the work they do on the Council. They need have no anxiety about being able to persuade me personally to recognise the value of its work and the great heritage this country has in its ancient buildings and their richness.
    If my hon. Friend had not mentioned it, I would have added to the arguments of the hon. Member for Windsor that obviously these buildings are a great attraction to those from outside who have nothing like a tradition of this kind, and who rightly go to some of the less fre-
    812
    quented parts of the country to see some of the wonderful buildings and architecture. Nobody with the privilege of being the Member for Gloucester could fail to recognise the richness in his own constituency. There is no difference between us on the value of the work of the Council and those who serve on it, the grant that is paid, the wisdom with which it is used, and the wisdom of increasing it.
    But that is not the Government's difficulty. The difficulty is that we have an Opposition who are most anxious that the Bill should be carried out logically. I find it very difficult to accept the whole of the words in the Amendment. I say "the whole", because it includes the words:
    "…carrying out any works for which a grant has been, or will be, given…".
    The House knows now that the distinction is not whether or not a grant has been given, but whether or not the work is improvement. If it is, the interest on the loan will qualify for tax relief. I do not know whether the work is entirely or partly improvement. I suppose that it will vary from case to case. Where it is partly improvement and partly maintenance, repairs which merely restore but do not improve, it will have to be treated in the same way as repairs for all purposes. It would be impossible for the Government to signify their approval of the work of the Council and the need to maintain our historic buildings by giving special income tax treatment. The way for a Government to signify their approval is to give grants, which they are doing.
    As regards income tax treatment, the house owner must comply with the law like any other taxpayer and get the benefit where the loan is for improvement, but not get it where it is not.
    The point raised by the hon. Member for Windsor on the date of the grant is valid. It is not the date of the grant that matters; it is the date of the loan. But it is the same point here as in every other case where one draws a line based on a date. Those who come in before it are treated differently from those who come in after. That is in the nature of things, as when one changes the law from a certain date.

    813
    1.45 a.m.
    It is true that a loan incurred prior to the relevant date will have interest which will rank for tax relief until 1975, whereas a loan incurred after that date will not, if it is a loan purely for maintenance and not improvement. I am sorry that I cannot recommend the House to accept the wording, although I think that a large part of the work that will be carried out will be work of improvement and as such any money borrowed will rank for tax relief.
    Mr. John Smith: The Chief Secretary is under a misapprehension. It is not possible to get a historic building grant for improvement.
    Sir C. Mott-Radclyffe: Will the Chief Secretary clarify a point. We are not dealing with a house assessed under Case 1 of Schedule D, which deals with businesses. Any loan for a business qualifies for tax relief. What we are dealing with are those houses where a loss is incurred under case 6 and can only be set against corresponding profit under the same section. It could of course be that someone might have a house in England running at a loss and one in Scotland running at a profit, but that is unlikely. I am not certain whether the Chief Secretary is right and that a loan, a portion of which is for improvement and a portion for maintenance of a house under case 6 would qualify for tax relief.
    Mr. Diamond: Borrowing money for the purposes of a business is incurring a business expense. We are not concerned with that. I also confirm that whether it is a historic or non-historic house any loan incurred wholly or in part for the improvement of any property attracts tax relief on that part of the interest which represents the proportion of the loan attributable to the improvement.
    Mr. Driberg: If my right hon. Friend is hinting, in a slightly encouraging way, that what we ask for may be covered in part by (2)(b), is there not some risk that (5) would cancel that out in respect of a good many, perhaps most, of the houses eligible for grant?
    Mr. Diamond: It is because I could not be more specific that I had to leave myself to more general remarks. I listened carefully to the comments made by the two members of the Council and
    814
    it seemed that what they described was work which was partly improvement, partly repair. To the extent that it is improvement the loan will rank for relief; to the extent that it is not it will not, and that is the normal law. The real point that I am making is that I could not depart from the normal law for historic houses. If we want to treat them kindly, the way to do it is through grants, which is what the Government are doing.
    Sir J. Foster: It is unlikely that restoration will be an improvement because the house was built in 1252. Everything done after that is by way of repair to bring it back to its original state. The layman thinks that a house with dry rot is improved by removing the dry rot; but common sense is not part of the law. One is merely restoring it to what it was before. This is the difficulty about the grants: they are always for repair purposes.
    We might leave the thought with owners who cannot borrow that if they sell their house to somebody under an estate contract which is registered, and thus avoid stamp duty, they can take advantage of subsection (5), because all the repairs for which grant was payable when it belonged to somebody else would be eligible for deduction of income tax. If they have a son or somebody else is to get the house, they can avoid stamp duty by registering an estate contract. I leave that thought in the air.
    Sir C. Mott-Radclyffe: I am not wholly satisfied with the Chief Secretary's reply, but I know that he has done his best to explain the Government's position. As this was an all-party Amendment, supported by hon. Members on both sides of the House, I beg to ask leave to withdraw it.
    Amendment, by leave, withdrawn.
    Mr. Higgins: I beg to move Amendment No. 119, in page 21, line 43, at the end insert:
    (3) Subject to the provision of this section interest is eligible for relief under this section if it is paid by a person being the holder of a policy of insurance on his life which is a qualifying policy within section 16 of the Finance Act 1968 on a loan to defray money applied—

    (a) in payment of any premium due there-under or a sum in lieu of such premium; or

    815

    (b) under a contract of loan for which the policy forms the security.

    The purpose of the Amendment is to allow for tax relief loans which are made to pay a premium on an insurance policy or raised on the security of an insurance policy.
    We have had the spectacle of the Chief Secretary gradually moving from one line of defence to another, producing at every stage a new principle which we had not heard about and throwing in the wastepaper basket the principles on which he had been defending his case. At various stages he has complained that he has not been able to be as logical as he might have been, but we have consistently argued that he can be logical only by throwing out the whole Clause. Nevertheless, there is a very strong case for his going one stage further, because this is essentially the line at which the battle is now being fought. This is the point—loans on insurance policies—at which he has not yet given way, and it is clearly the point on which he should next give way.
    The arguments in favour of our proposal are overwhelming, even in the terms of the Chancellor's Budget speech. The right hon. Gentleman, before his peroration, extolled the virtues of saving and went on:
    "The new savings scheme I have just described is designed to encourage people to save rather than spend some of the money that they have earned. But it is also important, as part of the same approach, to discourage people from spending money they have not earned, or do not even possess."—[OFFICIAL REPORT, 15th April, 1969; Vol. 781, c. 1039.]
    The essential point about insurance policies is that they are clearly an important form of saving. One of the major incentives for people to invest in insurance policies—in other words, to save —is the fact that they know, particularly with endowment policies, that it is likely that they will be able to raise money on the policy. If the Chancellor raises the cost of borrowing on those policies, it will be a discouragement to people to take out such policies and save. Therefore, it is wrong that he should act in the way that he has. It is contrary to his own policy
    The Chancellor is wrong in saying that these people are borrowing money they have not earned and do not even possess. People with insurance policies are bor-
    816
    rowing money they have earned and possess and have invested in insurance policies. Therefore, the right hon. Gentleman should accept the Amendment. In many ways, people are borrowing their own money.
    People may take out this kind of insurance policy but do not borrow until an emergency arises, or perhaps they say that they cannot continue the premiums for a short period. If this is so, it seems to us clearly desirable that people should be able to continue to maintain their insurance policies and, if necessary, borrow against them in order to keep the premiums going during a period of emergency. But the danger now is that, given an increase in the effective cost of borrowing, people faced with an emergency will surrender their policies, and the total savings will to that extent be reduced, rather than take out a loan to carry themselves over that emergency period.
    It is true that the Government, adopting the position which the Chief Secretary has adopted, have given way on earlier Amendments relating to existing loans. None the less, the point on emergency borrowing, and other points, has not been covered by this so-called concession, so we think it essential that the Government should give way on this Amendment.
    It is particularly important with regard to future loans—perhaps educational loans, or loans carried out by people going back to business school in an endeavour to get more technical education. I shall not weary the House with examples, which we have already discussed to some extent, but the fact is that the whole of this area is one in which the attitude of the Government is contrary to the overall policy.
    We believe that the Chief Secretary, having really no point on which he can reasonably take a stand on any reasonably logical principle at all, ought to concede the Amendment. I hope that he will do so, but if he remains adamant I most certainly hope that my right hon. and hon. Friends will divide the House.
    Sir J. Foster: If the Government were disposed to accept the Amendment we would probably need a manuscript Amendment to include exempt policies as well. Qualifying policies are those dated back to 1968, and it would be illogical to exclude those policies which qualify but are not qualifying policies.

    817
    The present position is a disincentive to saving. The amount of life assurance policies will undoubtedly diminish as a result, because a person will not be willing to pledge so much of his income if he feels that it is, so to speak, gone for ever unless he can surrender it or borrow at an excessive rate. Statistics obtained from the life offices show that the average loan is comparatively small—something under £400. This provision, therefore, does not hit the surtax payer but the man who meets with an emergency—who has to have some money, say, for an operation, for education fees, or the like.
    That man is only borrowing back his own money. He is not creating any kind of income. He is not going in for any tax saving which is part of the philosophy, I understand, of Clauses 18 and 19. The man who takes out an insurance policy like this cannot realise his security as can the person who has borrowed to obtain shares. Surrender is very disadvantageous, and one does not want to see savings diminish, as they will, by large-scale surrender of policies.
    2.0 a.m.
    Mr. John Smith: Unless this Amendment is accepted the Clause will convert insurance policies into an exceedingly non-liquid form of saving. To get back any part one will have to abandon the whole method of saving. As such the method will be far more unsuitable for people of limited means than for richer people.
    When arranging one's saving, one has to put the first tranche into an exceedingly liquid medium such as the Post Office Savings Bank. From then on the more one has the less liquid the form of saving it is reasonable to invest in. Unless the Amendment is accepted the Clause will discriminate in favour of the rich. I do not say that for the sake of effect but because it is true. All Governments have always by legislation and exhortation encouraged life insurance not only as a means of saving but as a means of conducting one's life in a sensible manner for oneself and one's dependants. I therefore hope that the Chief Secretary will accept this Amedment.
    Mr. Diamond: This Amendment raises a very similar point to those raised in Committee. The arguments were then
    818
    fully deployed and the answer I gave then I am afraid I must give now. I cannot see that there is any difference in borrowing on an insurance policy and borrowing on any other kind of security such as stocks and shares. I cannot see why it should be thought that this should attract special treatment for tax.
    I recognise that the case has been made mainly on the ground of the effect on the payer of a modest premium and that the borrowing would be only in proportion. The borrowing would be modest and the interest would be modest, but the tax on the interest would be even more modest. I do not recognise for a moment the force of the argument that because the tax would be one-third of 10 per cent. on a small amount per annum people would be discouraged from entering into insurance policies. Nor can I see the argument that, discouraging as the proposal in the Bill certainly is for people to realise their savings, it is a discouragement to saving.
    On the contrary, if people are saving through insurance policies one wants to encourage them to go on saving. To encourage borrowing on an insurance policy is to discourage saving. It is part of the policy of my right hon. Friend to encourage saving. It is sensible that an insurance policy should be treated as security for a loan, but if it is there is no distinction to be drawn between that kind of security and any other. I am sorry to say in reply to the hon. Member for Worthing (Mr. Higgins), who suggested that I have moved my ground, that I am confronted by an excellent brief to reply to him, but it consists solely of what I said in Committee. Therefore, there is no better argument that I can produce.
    Mr. Higgins: We do not accept the argument which the right hon. Gentleman has put forward in Committee and tonight. Tax relief on the interest on such a loan may seem modest but it will not seem modest to the person with an emergency to cope with. It will seem less modest for a person who, to maintain his policy, has to borrow to pay the premium. The whole point about the Amendment is that if a person has to surrender a policy the matter is at an end, but if he has the policy and can borrow money on it to pay the premiums

    819
    he can resume it when better times come for him. We do not accept the arguments put forward by the Chief Secretary either now or in Committee. I therefore hope that my hon. and right hon. Friends

    Division No. 335.]

    AYES

    [2.4 a.m.

    Alison, Michael (Barkston Ash)

    Hall, John (Wycombe)

    Onslow, Cranley

    Allason, James (Hemel Hempstead)

    Hall-Davis, A. G. F.

    Orr-Ewing, Sir Ian

    Astor, John

    Hamilton, Lord (Fermanagh)

    Osborn, John (Hallam)

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

    Harris, Reader (Heston)

    Page, Graham (Crosby)

    Awdry, Daniel

    Hastings, Stephen

    Percival, Ian

    Baker, Kenneth (Acton)

    Hawkins, Paul

    Pink, R. Bonner

    Baker, W. H. K. (Banff)

    Heseltine, Michael

    Pounder, Rafton

    Biffen, John

    Higgins, Terence L.

    Powell, Rt. Hn. J. Enoch

    Black, Sir Cyril

    Hiley, Joseph

    Price, David (Eastleigh)

    Blaker, Peter

    Hill, J. E. B.

    Prior, J. M. L.

    Boardman, Tom (Leicester, S. W.)

    Holland, Philip

    Pym, Francis

    Boyle, Rt. Hn. Sir Edward

    Hordern, Peter

    Ramsden, Rt. Hn. James

    Braine, Bernard

    Hornby, Richard

    Renton, Rt. Hn. Sir David

    Brown, Sir Edward (Bath)

    Howell, David (Guildford)

    Ridley, Hn. Nicholas

    Bruce-Gardyne, J.

    Hunt, John

    Ridsdale, Julian

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

    Hutchison, Michael Clark

    Rossi, Hugh (Hornsey)

    Burden, F. A.

    Iremonger, T. L.

    Royle, Anthony

    Campbell, B. (Oldham, W.)

    Jenkin, Patrick (Woodford)

    Russell, Sir Ronald

    Carlisle, Mark

    Jones, Arthur (Northants, S.)

    Scott, Nicholas

    Chataway, Christopher

    Jopling, Michael

    Scott-Hopkins, James

    Chichester-Clark, R.

    Joseph, Rt. Hn. Sir Keith

    Sharples, Richard

    Clark, Henry

    Kershaw, Anthony

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

    Clegg, Walter

    Kimball, Marcus

    Silvester, Frederick

    Cooke, Robert

    King, Evelyn (Dorset, S.)

    Smith, Dudley (W'wick & L'mington)

    Crowder, F. P.

    Kirk, Peter

    Smith, John (London & W'minster)

    Cunningham, Sir Knox

    Kitson, Timothy

    Speed, Keith

    Dalkeith, Earl of

    Knight, Mrs. Jill

    Stainton, Keith

    d'Avigdor-Goldsmid, Sir Henry

    Lane, David

    Stodart, Anthony

    Dean, Paul

    Legge-Bourke, Sir Harry

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

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

    MacArthur, Ian

    Taylor, Frank (Moss Side)

    Drayson, G. B.

    Maclean, Sir Fitzroy

    Temple, John M.

    du Cann, Rt. Hn. Edward

    Macleod, Rt. Hn. Iain

    Turton, Rt. Hn. R. H.

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

    McNair-Wilson, Michael

    van Straubenzee, W. R.

    Farr, John

    Maddan, Martin

    Waddington, David

    Fisher, Nigel

    Maginnis, John E.

    Weatherill, Bernard

    Fletcher-Cooke, Charles

    Marten, Neil

    Wells, John (Maidstone)

    Fortescue, Tim

    Maude, Angus

    Whitelaw, Rt. Hn. William

    Foster, Sir John

    Maxwell-Hyslop, R. J.

    Wiggin, A. W.

    Gibson-Watt, David

    Mills, Peter (Torrington)

    Wilson, Geoffrey (Truro)

    Gifmour, Sir John (Fife, E.)

    Mills, Stratton (Belfast, N.)

    Wolrige-Gordon, Patrick

    Glover, Sir Douglas

    Mitchell, David (Basingstoke)

    Woodnutt, Mark

    Glyn, Sir Richard

    Monro, Hector

    Worsley, Marcus

    Godber, Rt. Hn. J. B.

    Montgomery, Fergus

    Wright, Esmond

    Goodhart Philip

    More, Jasper

    TELLERS FOR THE AYES:

    Goodhew, Victor

    Morgan-Giles, Rear-Adm.

    Mr. Reginald Eyre and

    Gower, Raymond

    Morrison, Charles (Devizes)

    Mr. Anthony Grant.

    Grieve, Percy

    Mott-Radclyffe, Sir Charles

    Gurden, Harold

    Munro-Lucas-Tooth, Sir Hugh

    Nott, John

    NOES

    Allaun, Frank (Salford, E.)

    Bray, Dr. Jeremy

    Dell, Edmund

    Anderson, Donald

    Brooks, Edwin

    Dempsey, James

    Archer, Peter

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

    Dewar, Donald

    Armstrong, Ernest

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

    Diamond, Rt. Hn. John

    Ashley, Jack

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

    Dickens, James

    Atkins, Ronald (Preston, N.)

    Buchan, Norman

    Dobson, Ray

    Atkinson, Norman (Tottenham)

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

    Doig, Peter

    Baxter, William

    Callaghan, Rt. Hn. James

    Driberg, Tom

    Bence, Cyril

    Carmichael, Neil

    Dunnett, Jack

    Benn, Rt. Hn. Anthony Wedgwood

    Carter-Jones, Lewis

    Dunwoody, Mrs. Gwyneth (Exeter)

    Bidwell, Sydney

    Chapman, Donald

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

    Binns, John

    Concannon, J. D.

    Eadie, Alex

    Bishop, E. S.

    Dalyell, Tam

    Edwards, William (Merioneth)

    Blackburn, F.

    Davidson, Arthur (Accrington)

    Ellis, John

    Blenkinsop, Arthur

    Davies, G. Elfed (Rhondda, E.)

    English, Michael

    Booth, Albert

    Davies, Dr. Ernest (Stretford)

    Ennals, David

    Boston, Terence

    Davies, Rt. Hn. Harold (Leek)

    Ensor, David

    Boyden, James

    Davies, Ifor (Gower)

    Evans, Fred (Caerphilly)

    Bradley, Tom

    de Freitas, Rt. Hn. Sir Geoffrey

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

    Will suppot the Amendment in the Lobby.
    Question put, That that Amendment be made:—
    The House divided: Ayes 140, Nose 188.

    Fitch, Alan (Wigan)

    Lyon, Alexander W. (York)

    Perry, Ernest G. (Battersea, S.)

    Fletcher, Raymond (Ilkeston)

    Mabon, Dr. J. Dickson

    Perry, George H. (Nottingham, S.)

    Fletcher, Ted (Darlington)

    McBride, Neil

    Price, Christopher (Perry Barr)

    Foot, Michael (Ebbw Vale)

    MacColl, James

    Probert, Arthur

    Ford, Ben

    Macdonald, A. H.

    Rees, Merlyn

    Forrester, John

    McGuire, Michael

    Roberts, Rt. Hn. Goronwy

    Fowler, Gerry

    McKay, Mrs. Margaret

    Roberts, Gwilym (Bedfordshire, S.)

    Freeson, Reginald

    Mackenzie Gregor (Rutherglen)

    Rodgers, William (Stockton)

    Gardner, Tony

    Mackie, John

    Roebuck, Roy

    Gray, Dr. Hugh (Yarmouth)

    Mackintosh, John P.

    Ross, Rt. Hn. William

    Gregory, Arnold

    Maclennan, Robert

    Rowlands, E.

    Grey, Charles (Durham)

    McMillan, Tom (Glasgow, C.)

    Ryan, John

    Griffiths, David (Rother valley)

    McNamara, J. Kevin

    Shaw, Arnold (Ilford, S.)

    Griffiths, Eddie (Brightside)

    Mahon, Simon (Bootle)

    Sheldon, Robert

    Hamilton, James (Bothwell)

    Mallalieu, E. L. (Brigg)

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

    Hannan, William

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

    Silkin, Rt. Hn. John (Deptford)

    Harper, Joseph

    Manuel, Archie

    Silkin, Hn. S. C. (Dulwich)

    Harrison, Walter (Wakefield)

    Mapp, Charles

    Silverman, Julius

    Haseldine, Norman

    Marks, Kenneth

    Skeffington, Arthur

    Hazell, Bert

    Marquand, David

    Small, William

    Hooley, Frank

    Mellish, Rt. Hn. Robert

    Spriggs, Leslie

    Houghton, Rt. Hn. Douglas

    Mendelson, John

    Summerskill, Hn. Dr. Shirley

    Howarth, Robert (Bolton, E.)

    Mikardo, Ian

    Taverne, Dick

    Howell, Denis (Small Heath)

    Milne, Edward (Blyth)

    Thomson, Rt. Hn. George

    Hoy, Rt. Hn. James

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

    Tinn, James

    Hughes, Roy (Newport)

    Molloy, William

    Urwin, T. W.

    Hunter, Adam

    Morgan, Elystan (Cardiganshire)

    Varley, Eric G.

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

    Morris, Alfred (Wythenshawe)

    Wallace, George

    Jay, Rt. Hn. Douglas

    Morris, Charles R. (Openshaw)

    Watkins, David (Consett)

    Jenkins, Rt. Hn. Roy (Stechford)

    Morris, John (Aberavon)

    Watkins, Tudor (Brecon & Radnor)

    Johnson, Carol (Lewisham, S.)

    Moyle, Roland

    Wellbeloved, James

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

    Murray, Albert

    Whitaker, Ben

    Jones, T. Alec (Rhondda, West)

    Newens, Stan

    Whitlock, William

    Judd, Frank

    Ogden, Eric

    Williams, Alan (Swansea, W.)

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

    O'Malley, Brian

    Williams, Alan Lee (Hornchurch)

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

    Oram, Albert E.

    Williams, Clifford (Abertillery)

    Kerr, Russell (Feltham)

    Orme, Stanley

    Williams, Mrs. Shirley (Hitchin)

    Lawson, George

    Oswald, Thomas

    Willis, Rt. Hn. George

    Leadbitter, Ted

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

    Wilson, William (Coventry, S.)

    Lee, John (Reading)

    Page, Derek (King's Lynn)

    Winnick, David

    Lewis, Arthur (W. Ham, N.)

    Palmer, Arthur

    Woof, Robert

    Lewis, Ron (Carlisle)

    Parkyn, Brian (Bedford)

    TELLERS FOR THE NOES:

    Lipton, Marcus

    Pavitt, Laurence

    Mr. John McCann and

    Lomas, Kenneth

    Peart, Rt. Hn. Fred

    Dr. M. S. Miller.

    Loughlin, Charles

    Pentland, Norman

    Mr. Anthony Stodart: I beg to move Amendment No. 157, in page 21, line 43, at end insert:
    (3) Subject to the provisions of this section, interest is eligible for relief under this section if it is paid on a fixed term loan obtained on or before 15th April 1969 on the security of agricultural or forestry property.
    In considering this Amendment we must have in mind the terms of new Clause 28 which was accepted by the House yesterday. That Clause allows relief to be given for six years up to 6th April, 1975, in respect of interest on a fixed loan taken out on or before 15th April this year, namely, Budget day. The object of new Clause 28 was to allow those who had entered into firm commitments to adjust their affairs with more reasonable convenience than the original date of 5th April, 1970, would have allowed them. That was clearly a gesture by the Government, although we regard the principle underlying the Government's approach to this matter as being basically wrong. Therefore, my welcome to that
    822
    gesture must inevitably be somewhat less than warm.
    2.15 a.m.
    The Amendment is designed to allow for the special circumstances under which I believe agriculture and forestry operate. I am not a disciple of the cult of special pleading on behalf of either agriculture or forestry. My general outlook is that I am thoroughly in favour of these industries enjoying similar treatment to other industries getting similar returns for their efforts. But one cannot ignore the fact that the finance required for forestry operations is of the longest possible nature and that agriculture, although its various sectors differ, comes second in that category.
    It is usual for loans to be taken out repayable over 20 years on both the Agricultural Mortgage Corporation and the Scottish Agricultural Securities Corporation. Indeed, a period of 40 years is by no means unusual. This is what puts these basic industries into a

    823
    category of their own, and the length of time involved is due to the fact that from trees one has planted last March there will be no income from thinnings for at least 15 years, while 10 years in farming is only two of the rotations which are still practised on many farms.
    We have a situation in which interest on a loan taken out, for example, 20 years ago, and with 10 or even 20 years still to run, will be disallowed after April, 1975, unless it can be specified how the loan was used. If the loan has been applied to buying land or improving or developing it, the interest is unreservedly allowable. If, on the other hand, some of it has been used for maintenance or perhaps for paying estate duty or for some other purpose, clearly very intricate and elaborate calculations will have to be made, instigated by the inspector of taxes.
    My experience from constituency correspondence is that the Inland Revenue is already hopelessly overburdened without having to delve into the past on a scale and over a length of time such as I have described. This, together with the long-term nature of forestry and agriculture operations and their financing, plus the encouragement which should be given to them as enormous potential import savers—and we tend to concentrate on this aspect of agriculture, forgetting the enormous amount of money spent on importing timber—justifies special consideration being given to these two industries, and that is why the Amendment has been put down.
    Mr. Diamond: The hon. Gentleman wished us to have in mind that the money to which he was referring was being borrowed to be spent on agricultural and forestry property. The form of the Amendment is "on the security of" agricultural or forestry property. May I make the preliminary point that security is totally irrelevant to the purpose of the Clause? A loan can be secured in any way; what is of relevance is the purpose to which the loan is devoted. The hon. Gentleman is asking that where the loan is devoted to agricultural or forestry property it should rank for more than the five years proposed under the new Clause.
    824
    I recognise that there will be many loans in forestry which are needed for a long period. In fixing the five years we did not attempt to fix a period longer than the period for which a loan could be contracted. That would have been impossible. As the hon. Gentleman has said, loans may be for 20 years or 40 years, and it would be impossible to have a new system of disallowance of interest running side by side with a system of allowance of interest for 40 years, and expect the new system to be understood or even to become acceptable. A transitional period of five years to give people time to adjust is understandable, but a period of 20 or 40 years, or, as is proposed, an indefinite period, would be impossible.
    The five-year period is not intended to be a period which will be longer than the loan, but is intended to be a period in which the borrower will have ample time to adjust his affairs. Five years is a long period for that. I do not know what each borrower will do; it will depend on the arithmetic and circumstances of each case, but each person will have nearly six years in which to prepare for the new set of circumstances. I cannot recommend to the House acceptance of the Amendment.
    Mr. John Smith: The point of the Amendment is not so much to give people time to adjust their affairs. The type of loan covered by the Amendment is difficult to adjust, however long may be the period of adjustment—presumably most such loans will have been raised for the payment of estate duty. If they were used for improvement they would in any case qualify for allowance of the interest against tax. Most of the property against which such loans are secured is difficult to sell except as a whole. Therefore, if a person is forced to pay off such a loan, his only way of adjusting his affairs is to cease altogether whatever activity he is conducting with the property. That is not only an unfair state of affairs; it may also be undesirable. Both agriculture and forestry can be satisfactorily conducted only in units of a certain size. Unless the Clause is amended in the way proposed, it will surely have a number of effects which I am sure the Government do not intend and which are not at all desirable.
    Amendment negatived.
    Mr. Graham Page: I beg to move Amendment No. 241, in page 22, line 1, at end insert:
    (a) to defray money applied in a purchase, improvement, development or payment described in that subsection which occurred prior to 15th April, 1969, or
    (b).
    Mr. Deputy Speaker: With this Amendment, we shall discuss Amendment No. 245, in line 7, at end insert:
    'unless that other purpose is a deposit with a bank or an investment in a building society temporarily, pending readiness to fulfil any of the purposes described in the said subsection'.
    Mr. Page: The House is well aware by this time that Clause 19(2) gives relief to interest upon a loan to defray money applied in purchasing land. The draftsmen of that subsection, or should one say the Government, have not made it clear whether the relief is to be given in respect of interest on a loan which is being used simultaneously with the purchase, or for a simultaneous purchase, or for a past purchase, or whether the subsection is meant to cover both circumstances. It is said to be a loan to defray money applied in purchasing land. The question is whether the money is being applied at that time or whether the money has been applied in the past in the purchase of land.
    Subsection (3) says that if the interest is to have relief it must be on a loan in connection with the application of the money for the purchase, and the money must be borrowed either on the occasion of its use for purchase or within a reasonable time from that purchase. It is fairly clear—as clear as a Finance Bill ever endeavours to be—that for somebody who purchased a property a few years ago, having found all the money himself, and who now mortgages the property to borrow on it, no relief would be given for the interest paid on that loan.
    My Amendment seeks to give relief in such circumstances where the property was bought in the past with the purchaser's own money and at a later stage the purchaser finds it necssary or desirable to borrow on the security of the property. Let me give a typical example of what I have in mind. A couple, having married a year or so ago, both then at work and earning, save some money and put down all or a substantial
    826
    part of the purchase money for their home. After a time the wife becomes pregnant and gives up her job, but in order to tide them over the birth of the first child, they borrow some more; they take a further advance on the security for the property, perhaps another 10 or 20 per cent.
    As I read the Clause, interest on that further advance would not rank for relief as the Bill stands. I want it to rank for relief. The result of the Clause as it stands will be that the couple in my example will in the first instance try to borrow up to the hilt. They will borrow more than they need because they will be advised that, if they do not do so and find they nee da little more money in the future, the interest will not rank for relief on that further advance. Surely it is wise to encourage them not to take more than they need at the start, and then, when the wife is out of a job and having her children, they can borrow more and still get the same relief.
    2.30 a.m.
    Now I pass to Amendment No. 245, which is to add some wards at the end of subsection (3). That subsection says that the relief provision, subsection (2),
    "… shall not apply to a loan the proceeds of which are applied for some other purpose before being applied as described in that subsection."
    In other words, there is no relief if the proceeds of the loan are applied for some other purpose before being applied for the purchase of land.
    The Amendment seeks to modify that by saying that a couple shall not be deprived of relief if all that they have done is to put the money on deposit at a bank or with a building society. They will probably want to get their advance out of a building society, and it seems reasonable to let them deposit their money in that way.
    The sort of example that I have in mind is where a purchaser is negotiating for the purchase of property, the negotiations fall through but, in the meantime, he has been able to negotiate a loan, perhaps from a relative, and has received the money. If the Clause remains as it is, it orders him to deposit that money on current account until he finds another property to purchase. Surely it is reasonable to put it where it earns a little interest, on deposit at

    827
    a bank, including the Post Office or Trustee Savings Banks or in a building society.
    Under subsection (3), relief is granted in respect of the interest only if the loan is in connection with the purchase and either on the occasion of the purchase or within a reasonable time after it. I am not concerned in Amendment No. 245 with raising the money after the purchase. I am concerned with the man who has raised the money before the purchase, perhaps considering another property, the negotiations have fallen through, he has the money in hand, and still intends to go on and purchase. To tell him that he must not earn interest on that money in the meantime seems to be ridiculous, and therefore the slight modification that I suggest appears to be appropriate.
    Mr. Diamond: Dealing with Amendment No. 241, I repeat what I said in an earlier debate. We are not concerned with the security on which the loan is obtained. The borrowing may take place on the security of the house. But the hon. Gentleman described the loan as one for the purpose of "tiding over" the couple concerned. I understand what he means. But tiding a couple over is not one of the purposes for which loan interest is treated as qualifying interest, and the fact that the money is borrowed on the property does not make it money borrowed for the purpose of improving property. Therefore, I regret that I cannot accept that Amendment.
    I turn hurriedly to Amendment No. 245 and say to the hon. Gentleman that the temporary deposit of money in a bank or building society cannot be regarded as applying the money for any particular purpose. The money is just resting there. We do not require that it should be held in a pillow case pending deposit with the hon. Gentleman on the purchase of a property by one of its clients. The best way to answer this point is by using the now hallowed words: this Amendment is unnecessary.
    Sir J. Foster: Is it unnecessary? I suggest that the Government are penalis-

    (4) If and so far as a loan made by allowing the debtor to overdraw an account is applied in improving land or buildings (otherwise than by the construction of a building or part of a building) no relief shall be given in respect of interest on the loan falling due more than three years after the end of the year of assessment in which the loan is so applied.

    ing the poorer man, the unsophisticated man, by preventing him putting his money in a more sophisticated form of investment which produces a higher rate. That seems bad luck on him.
    I understand from the right hon. Gentleman that in a building society it is all right; that is not a purpose. How he arrives at that I cannot think, but we are grateful for it. Can the right hon. Gentleman extend that to explain that any money resting is money resting in an investment pending its application? In other words, if it comes under the definition of money supply, would that be all right? I should like to know where he stops. We must be grateful for the interpretation which includes a building society. But why not short-term Government loans, or whatever?
    Mr. Diamond: The short answer is that I was asked to deal with the Amendment, and I have dealt with it.
    Mr. Graham Page: I am obliged to the Chief Secretary for dealing with Amendment No. 245 in the way that he did. I accept his assurance that, in the cases which I had in mind, the relief will be given.
    However, I am disappointed with his answer to Amendment No. 241. It seems wholly illogical that someone purchasing property who does not want all the purchase money advanced to him at that moment, but takes some of it at that time and at a later time takes the rest when he needs it, should not get relief on that second loan. That is the interpretation that the Chief Secretary has given to the Clause and I gather that is what he intends should happen. I can only warn him that it will cause considerable hardship to some people. It will not cause hardship to those who take too much credit, take more money than they need borrow when they purchase, and thereby put more money into circulation, which I should think that the Government would wish to stop.
    Amendment negatived.
    Mr. Diamond: I beg to move Amendment No. 216, in page 22, line 8, leave out subsection (4) and insert:
    Mr. Deputy Speaker (Mr. Harry Gourlay): With this Amendment it will be convenient to take the sub-Amendment, in line 3, after 'building', insert
    'or by carrying out an improvement to agricultural land'.
    Mr. Diamond: The main purpose of the Amendment is to provide that relief for interest on a loan by way of overdraft which has been used for improvements of land or buildings is not to qualify for relief where the interest becomes payable more than three years from the end of the tax year in which the money is spent. I repeat, I am referring to an overdraft.
    Improvements consisting of the construction of a building or part of a building are not affected, because borrowing for building, like borrowing for buying a house or land, cannot be expected to be paid off for a long time.
    The case is different with borrowing for improvements, such as the installation of central heating. Borrowing for such a purpose ought to have been paid off within three years, and there is no reason why it should result in the borrower's being entitled to relief for interest on an overdraft of the relevant amount for ever.
    This is the best that we can achieve for practical purposes of determining what would be an otherwise difficult matter. I hope that the House will regard it as a reasonable compromise.
    Mr. Higgins: Before my right hon. Friend the Member for Grantham (Mr. Godber) comments on the Amendment, may I ask the right hon. Gentleman to tell the House the connection between subsection (4) which is being left out, and the subsection which is now being inserted?
    Mr. Godber: I do not think that I need take long over the sub-Amendment, although it is a matter of some significance. After the rebuff that we had from the Chief Secretary on the agricultural point earlier, my hopes are not very high. This is a matter for which the right hon. Gentleman ought to provide here. He is, in this new subsection (4), taking away some of the assistance being given under subsection (2)(b). This subsection is of significant interest to agriculture. We can understand the right hon. Gentle-
    830
    man's desire to limit the provisions as he is seeking to do in the Amendment, but the words in brackets in the Amendment do not go far enough to safeguard the position in relation to agriculture.
    The right hon. Gentleman has said that it is reasonable to allow loans for the construction of a building, or part of a building, to have a longer term because it would be impracticable to consider repayment within three or four years. If this is logical in relation to buildings, it must equally be logical in regard to a number of matters which are common practice in agriculture. One such practice is drainage. We heard earlier that land drainage is sometimes done at intervals of 100 years. This is by no means abnormal. The cost is high, and it should be spread over a longer period than three years. It must be spread over 15 to 20 years to be reasonable. This is the sort of term that is required if the cost is to be spread evenly before further drainage is necessary.
    The same applies to water supplies, which are becoming increasingly important for irrigation which plays an important part in agriculture. The provision of reservoirs for irrigation is another aspect which is substantially costly, and where the costs should be spread over a much longer period. Farm roads are another example. There are many aspects to which this should apply, and that is why we have suggested the inclusion of the words
    "or by carrying out an improvement to agricultural land."
    Lest the Government feel that this wording is spreading it too wide, I refer again to the normal definition of agricultural land in relation to agricultural holdings, to which I referred earlier. The 1948 Act says that agricultural land means
    "land used for agriculture which so used for the purpose of a trade or business…."
    If that definition is applied to the Amendment, it prevents any abuse of the type which the Government may have in mind in relation to the purposes for which they have moved the Amendment.
    I am merely seeking to widen the Amendment to include a loan obtained for legitimate agricultural purposes, which could not reasonably be repaid over three or four years. I ask the Chief Secretary to consider this as at

    831
    least some concession to agriculture after the curt reply that he gave on a previous occasion
    Mr. John Smith: I cannot see what business it is of the Government's whether a person takes borrowing by way of loan or overdraft. In the past, it has often been completely fortuitous whether a person has taken borrowing by way of loan or overdraft. To make it harder for them to do so by way of overdraft simply damages an extremely effective system which we have developed, far more than in any other country in the world, to our own advantage, namely, the overdraft system which makes a much more effective use of resources than any system based on loans. As the right hon. Gentleman is aware, taking money by way of loan increases the money supply more than taking money by way of overdraft, and it seems to me that pointless and unnecessary damage is done by the Amendment to a system which we have, and which many other countries envy.
    2.45 a.m.
    Sir C. Mott-Radclyffe: I have no wish to repeat what was said on the agriculture Amendments, but I must ask the Chief Secretary to hoist in the fact that on many agricultural estates it is fortuitous whether maintenance and improvements are financed by overdraft, mortgage or loan. It made no difference before this Bill. Long-term arrangements, once made, are difficult to get out of, and one cannot escape obligations under the Agriculture Act, 1947. A loan or grant, whether by overdraft or mortgage, does not solely apply to buildings. They may be buildings on farm A, or an access road on farm B, or fencing on farm C or drainage on farm D. Some of these may have to be done together and others may be separated over many years—that is what the maintenance of agricultural property means.
    That is why this provision of only three years' grace to pay off the loan for relief on the interest does not make any sense at all in terms of agriculture.
    Sir J. Foster: The difference between loan and overdraft is even more absurd, because a joint stock bank can be the one making a loan. If one is careful to go to a bank where one does not have an
    832
    account, and ask for a loan, one will get away with it.
    This is not an argument to stop loans, but is discrimination against overdrafts, because an overdraft is only another way to make a loan. It is a fluctuating loan which goes up and down as one credits it. In countries like the United States, overdrafts are illegal and they would have a much better fiscal system if they allowed overdrafts. This stems from odd historical reasons.
    The Chief Secretary should explain why he is discriminating against overdrafts and forcing people to lending and borrowing in a strained way, contrary to the economic well-being of this nation.
    Mr. Diamond: The hon. Gentleman the Member for Windsor (Sir C. Mott-Radclyffe) referred to a person borrowing by overdraft and to entering into long-term commitments. I do not know quite what he meant, but presumably he was saying that borrowing by overdraft is long-term commitment. The distinction is that an overdraft is not and cannot be a long-term commitment. It is, by its nature, short term and is capable of being called in by the lender at short notice and of being repaid by the borrower at any time. That is not the case with a loan for a fixed term where the borrower can repay at any time but the lender must await the end of the period before calling in the loan.
    That is the distinction one draws and there is great inconvenience in dealing with an overdraft. As the hon. and learned Member for Northwich (Sir J. Foster) said, it is wobbling up and down and is not in the nature of a fixed loan and one cannot make the calculations upon it.
    This is a reasonable way of dealing with the matter—
    Sir Douglas Glover rose—
    Mr. Diamond: If the hon. Member will allow me, I will first respond to the debate. I was asked about Clause 19(4). That is now to be found in new Clause 29(3).
    Sir D. Glover: The right hon. Gentleman the Chief Secretary is not quite correct. There are many instances where a person goes to a bank which gives an

    833
    overdraft on an agreed basis of two or three years.
    Mr. Diamond: The hon. Gentleman has confirmed what I was saying. He talked about two or three years.
    Mr. du Cann: We can all see the distinction the Chief Secretary is drawing between an overdraft and a loan. Of course, the two things can be—I do not say that they always are—very different. But the point we were putting to him was rather different. It was, why does he draw the distinction at all?
    Mr. Diamond: We are drawing the distinction because interest payable on an overdraft ranks for relief in the normal case until 30th June this year. Interest on a fixed loan ranks for relief until 1975. The second is a long-term commitment and the first is not. In the second case it is right to give the person concerned a longer time to adjust his affairs. If the right hon. Gentleman wants to persuade me that that was wrong I shall listen with sympathy, but I do not think that he does.
    The main point, which was not contained in the words of the Amendment, though that is nothing we should bother about, was that of the repairs referred to some would be substantial and some would not. I think that the hon. Gentleman said that the cost of the substantial ones should be spread over a longer period. I was more concerned to find out from him what would be a reasonable period in practice for the borrower to repay the loan, not the period over which the cost should be spread. He is putting to me that beyond what has been provided for here there are things like drainage schemes which are quite substantial, that although they are maintenance they necessitate borrowing which must be repaid over a longer period than that for which provision is made. That is something of which I must take note. There is no intention to disregard it. I cannot take note of it in this Bill, and I am not sure that it is something which will prove to be a difficulty or hardship. I promise him that I will give it consideration during the coming year, and see whether difficulties arise. If they do, I shall hope, without making a specific promise, to bring something before the House in a year's time.
    Mr. Godber: May I say "Thank you" for at least this small concession, which may be of some help to us.
    Amendment agreed to.
    Mr. Deputy Speaker: The next Amendment is Government Amendment No. 275, with which we may discuss Amendments No. 141, in page 22, line 26, after which', insert:
    'has either both of the following dimensions—

    (a) an overall length (excluding any drawbar) exceeding 22 feet;

    (b) an overall width exceeding 7 feet 6 inches

    or'.
    No. 142, in page 22, line 35, after 'subsection', insert:
    '"overall length" and "overall width" shall have the meanings respectively assigned to them in Regulation 3 of the Motor Vehicles (Construction and Use) Regulations 1966 and".
    and Government Amendments No. 276 and 277.
    The Minister of State, Treasury (Mr. Dick Taverne): I beg to move Amendment No. 275, in page 22, line 26, leave out 'which' and insert:
    'but, unless it is a large caravan, no relief shall be given by virtue of this subsection in respect of the payment of any interest unless—
    (a) the caravan'.
    The Amendment deals with the change asked for by the hon. Member for Wan-stead and Woodford (Mr. Patrick Jenkin). I said when he raised his points in Committee that I would consider them. I saw the Caravan Council and was persuaded by it and the hon. Gentleman that this was a change worth making. I am satisfield that it excludes touring caravans. It includes a number of residential caravans in respect of which there might otherwise be some difficulty, because while they are rateable they are not necessarily rated and therefore there would be some difficulty in obtaining relief.
    Mr. Patrick Jenkin: II is right that we should express gratitude for the acceptance of an Amendment, not only in substance, but in every single detail, as we put it forward in Committee. It would be right too, to pay tribute to the National Caravan Council which was very quick off the mark and which has clearly helped to right what would have

    835
    given a serious injustice in the Bill as originally drafted.
    Amendment agreed to.
    Further Amendments made: No. 276 in page 22, line 30, leave out from 'Ireland' to last 'the' in line 31 and insert 'and'(b)'.
    No. 217 in line 44 leave out subsection (9).—[Mr. Taverne.]
    Mr. Taverne: I beg to move Amendment No. 218, in page 23, line 19, leave out subsections (11), (12) and (13) and insert:
    (11) Subsection (2)(a) above shall not apply—

    (a) where the seller and purchaser are a husband and his wife, and either sells to the other, or

    (b) where the purchaser, or the wife or husband of the purchaser, has, since 15th April, 1969, disposed of an estate or interest in the land in question and it appears that the main purpose of the disposal and purchase was to obtain relief in respect of interest on the loan, or

    (c) where the purchasers are the trustees of a settlement, and the seller is the settlor, or the wife or husband of the settlor, and it appears that the main purpose of the purchase is to obtain relief in respect of interest on the loan, or

    (d) where the purchaser is directly or indirectly purchasing from a person connected with him, and the price substantially exceeds the value of what is acquired,

    and subsection (2)(b) above shall not apply where the person spending the money is connected with the person who, directly or indirectly, receives the money, and the money substantially exceeds the value of the work done.
    For the purposes of this subsection—

    (i) references to a husband and wife are references to a husband and his wife living with him,

    (ii) any question whether a person is connected with another shall be determined in accordance with paragraph 21 of Schedule 7 to the Finance Act 1965.

    This Amendment leaves out three subsections now dealt with in new Clause 29. Secondly, it introduces some of the anti-avoidance provisions previously negatived in Committee. The Amendment is directed at the exploitation of Clause 19 by transactions which, in form, are a purchase of an interest in property but which, in fact, are designed to obtain tax relief for loans for other purposes. When the previous Amendments were moved there were a number of criticisms. In particular, there was one which seemed to be a telling one, made by the
    836
    hon. and learned Member for Northwich (Sir J. Foster), that the Revenue might have regard to any case where someone had sold any land, not just the case where he bought back his own. The words "any other land" have been omitted from the new draft.
    The Amendment is now restricted to the sale by one spouse to another, where they are living together—and this is the test the Revenue is to have regard to in any claim for personal allowances—to purchases of a house which has previously been sold, where the main object is to get the relief, sales within settlements, where the main purpose is to obtain relief, and sales between connected persons. The last point was also criticised by the hon. and learned Gentleman. The two conditions have to be fulfilled. Not only has it to be a transaction between two connected persons, but also one for an inflated price.
    Amendment agreed to.
    Further Amendment made: No. 277 in line 36 at end insert:
    'large caravan' means one which has either or both of the following dimensions—

    (a) an overall length (excluding any drawbar) exceeding 22 feet;

    (b) an overall width exceeding 7 feet 6 inches

    where 'overall length' and 'overall width' have the meanings given in Regulation 3 of the Motor Vehicles (Construction and Use) Regulations 1966.—[Mr. Taverne.]

  Clause 21

    SPECIAL PROVISIONS FOR CERTAIN CLOSE COMPANIES
    Mr. Diamond: I beg to move Amendment No. 47, in page 25, line 1, at beginning insert 'Subsection (1) of'.
    Mr. Deputy Speaker (Mr. Harry Gourlay): It would be convenient if we also discussed Amendment No. 264, in page 25, line 5, at end insert:
    'or

    (d) if it is a property investment company or investment company and owns directly or indirectly fifty-one per cent. or more of the ordinary share capital of other property investment or trading companies which are or will be in receipt of estate or trading and/or investment income'.

    and Amendment No. 265, in line 6, at end insert:
    (2)A. (a) The expression 'substantially the whole' as referred to in subsection (2)(c) of

    837
    this section shall mean fifty-one per cent. or more.

    (b) The expression 'property investment company' as referred to in subsection (2)(d) of this section shall mean a company that holds land or an interest in land which is in receipt or will be in receipt of estate income.

    and Government Amendments Nos. 48, 49, 50, 51.
    Mr. Diamond: This Amendment excludes the parent companies of property holding groups from the scope of the Clause. This was an undertaking given in Committee and I hope that the proposals meet with the wishes of the Committee.
    Clause 21 provides, in the circumstances about which we know, that interest paid by companies has to be apportioned to shareholders and charged to surtax so as to prevent the avoidance of surtax by the other simple device of setting up a close investment company and borrowing money with which to buy securities. The Clause does not apply to close trading or property companies. Parent companies of close trading groups are also excluded, but there is no equivalent exclusion for the parent companies of close property groups. This series of Amendments deals with that. I will leave it at that and listen to what hon. and right hon. Gentlemen have to say.
    3.0 a.m.
    Sir J. Foster: Does the Chief Secretary think that the mischief aimed at in Amendments Nos. 264 and 265 is cured? It is difficult to follow how the Amendments work. The object of Amendment No. 264 is to take a property investment company which is defined in Amendment No. 265 and notice that it holds land or an interest in land in receipt of estate income. Therefore, it does not come within the definition of subsection 2(c) of the Clause. One started with a property investment company in which the estate income is not substantially the whole, but the justification for doing that is that the property investment company which the Amendments have in mind owns 51 per cent. of one or more property investment companies and will be in receipt of the estate or trading or investment income from companies lying underneath.
    in drafting the Amendments it seemed to us that if the estate income in the subsidiaries was pushed up in the form
    838
    of dividends the property investment company which should be included in the relief would not be included because its income would not be estate income but dividend income. Does the Chief Secretary think that the problem is solved by the Amendments? If not, is it not right that this kind of company should be included? If, ex hypothesi, property investment companies lying below the limit do not benefit from the exemption because they come up in the form of dividends or come forward in the form of subventions, that would not satisfy the criteria.
    The Amendment is not perfect because when we push it up perhaps there should be "substantially the whole". The Amendment might be interpreted as meaning that if all the property investment companies below did not add up to "substantially the whole" in the top company it might be said that it was contrary to the spirit of the Clause. I would be prepared to agree that one should ensure that when dividends are pushed up which represent estate income the top company should be "substantially the whole" of estate income as expressed in the Amendments.
    Mr. Graham Page: We argued about "substantially the whole" when dealing with an earlier new Clause. What I said then applies in this case. It will be extremely difficult to interpret the meaning of "substantially the whole", but the point is that a different rule should apply to the property holding company, the parent company. When the dividends are passed up from the subsidiaries, surely it is sufficient to cover those or substantially the whole of the income of the subsidiaries without applying that rule to the parent company. There would be no mischief in fixing a percentage for the parent company such as is seen in Amendment No. 264.
    Mr. Diamond: I gather—but I should not like to stake my life, on it—what is being put to me. I gather that we are in broad agreement about our proposal, but that there is difficulty in feeling certain that the character of the dividends coming up from the subsidiary companies can be defined.
    The hon. Gentleman the Member for Crosby (Mr. Graham Page) is anxious about the phrase "substantially the

    839
    whole," as he was on an earlier occasion. On that earlier occasion I acceded to his pressure that I should define the phrase a little more precisely, and referred to something well in excess of 75 per cent. But that sort of definition would be inadequate on this occasion, in my view, because what one is giving here is a blanket exclusion, and if one is giving a blanket exclusion one wants much more than a 51 per cent. character or nature of the dividends coming up. One would therefore want something that was substantially the whole, or practically the whole, in order to justify the blanket exclusion to which I have referred.
    Mr. Graham Page: I am not quite sure whether the right hon. Gentleman is talking about substantially the whole of the income of the subsidiaries or of the parent company. He is tempting me to ask him again what percentage he has in mind. He said earlier in dealing with a new Clause that it would have to be substantially more than 60 per cent., and now he says substantially more than 75 per cent. Where is he going—up to 99 per cent.?
    Mr. Diamond: I do not think that 99 per cent. is a very bad figure here. It would qualify as being substantially the whole.
    I think that we are in broad agreement. I have taken the point. I understand what the hon. and learned Member for Northwich (Sir J. Foster) suggests. I think that the sensible thing to do in the circumstances would be for him to be good enough to allow me to read very carefully what he has said, and to write to him if necessary—the point does not call for any Amendment in the Bill now —to make sure that I was acting reasonably.
    Sir J. Foster: There are two aspects which the right hon. Gentleman must consider. First of all, there is the percentage shareholding which the parent company must have to make the subsidiary company a subsidiary. That is not necessarily substantially the whole, which is another point. Having got the subsidiaries, one pushes up the dividends. Then there comes the question of how much of the total income of the superior, top holding company should constitute estate income, and then, somehow—perhaps by extra-
    840
    statutory concession, of which I disapprove, because there are so many such concessions—to say that the dividends pushed up will constitute estate income.
    Mr. Diamond: I was not necessarily leaning towards an extrastatutory concession: it would be wrong for the hon. and learned Gentleman to read that into my remarks. I was saying that I hoped that he would allow me to read very carefully what he had said, in order to make sure that I was fully seized of the points he had made.
    Amendment agreed to.
    Futher Amendments made: No. 48, in page 25, line 5, after 'is', insert
    'of one or more of the following descriptions, that is—
    (i)'.
    No. 49, in line 5, at end insert:
    '(ii) interest, and dividends or other distributions, received from a subsidiary which is itself within paragraphs (a), (b) or (c) of this subsection'.
    No. 50, in line 6, at beginning insert 'Subsection (1) of'.
    No. 219, in line 8, after 'above', insert 'or section ("loans made on or before 15th April 1969") of this Act'.—[Mr. Diamond.]
    Mr. Graham Page: I beg to move Amendment No. 243, in page 25, line 11, at end insert:
    'or
    (c) to interest, the payment of which is enforceable against the company under the terms of a mortgage, a debenture or other similar charge entered into prior to 15th April 1969 and containing provision that the principal money secured thereby will not be repayable until the expiration of twenty years from the date of the making of the loan in respect of which the interest is payable'.
    As a major concession from this side of the House I suggest that this Amendment may be discussed with Amendment No. 244, in line 11, at end insert:
    (4) This section shall not apply to a company if twenty-five per cent. or more of such of its issued share capital as carries voting power has been allotted to or acquired by the public unconditionally and is so held at the relevant time and if such share capital has within twelve months preceding 15th April 1969 and subsequently been the subject of dealings on a recognised Stock Exchange in the United Kingdom.
    The Amendments deal with different points but they are in the same context. They refer to the end of subsection (3) but to put them into context, I refer to

    841
    subsection (1), which explains what the Clause is about. The subsection says:
    "all interest paid by a close company in any accounting period shall be apportioned under section 78 of the Finance Act 1965 (apportionment for surtax) as if the interest were income of the close company".
    We are not dealing here just with relief in payment of interest—that is, making a deduction from taxable income—but with the apportionment of income among participators for the purposes of surtax. To put it fully on the record, I take the first three lines of Section 78 of the 1965 Act, which says:
    "Subject to the provisions of this subsection, the income of a close company for any accounting period may for the purposes of surtax be apportioned by the Board among the participators,…"
    That is what we are talking about in Clause 21 and it is not quite the same as the contents of Clause 19.
    Amendment No. 243 is intended to remove from the interest to be apportioned for surtax purposes where there is a pre-Budget obligation to pay. This is very much the same as new Clause 28 which, speaking from memory, I think went on to the Notice Paper before this Amendment. The new Clause deals with relief in respect of payment of any interest and seems by those words to refer to Clause 19 rather than Clause 21. It does not seem to deal with apportionment for surtax. It may be that the point is covered by Clause 21(3)(a), which says:
    "This section shall not apply—
    (a) to interest which would be eligible for relief under section 19 above if paid by an individual,"
    I hope that once again the Chief Secretary will be able to tell us that it is all quite all right in the Bill and what I am seeking to do is there already now that we have new Clause 28 and if there is a pre-Budget obligation under a loan to pay interest that is taken out of Clause 21.
    Amendment No. 244 seeks to exclude from the effect of Clause 21 and the apportionment for surtax purposes a certain type of close company. Subsection (2) already excludes certain companies as they are defined but there will be a number of close companies which will not fit in with any of those exclusions. Some will not fit in with the phrase "substantially the whole", with overseas
    842
    subsidiaries and so on. By Amendment No. 244 I am seeking to exclude what I call the public close company. I need not go into all the definition set out in the Amendment, but it is to exclude a further type of public close company which it defines.
    3.15 a.m.
    Mr. Diamond: I can help the hon. Member for Crosby (Mr. Graham Page) by saying that in general terms—I would not be too specific about it—Amendment No. 243 is unnecessary. What the hon. Gentleman was asking was whether the six-year period applies to the Clause. The answer is that it does by virtue of Amendment No. 219, to which the House has just agreed. That covers the essential point which was in the hon. Gentleman's mind on Amendment No. 243.
    I think what the hon. Gentleman is suggesting by Amendment No. 244 is a reversion to the pre-1966 percentage for the purposes of the exemption from the Clause. Under the ordinary close company rules the percentage would otherwise remain at 35. This is an Amendment which I could not accept. I do not think there is any real justification for the hon. Gentleman's anxieties. I will carefully consider what he has said, but I do not think I can advise the House to accept the Amendment, as things stand at the moment.
    Mr. Graham Page: I am grateful to the Chief Secretary for saying that what I sought to do by Amendment No. 243 appears to be covered, except that I included the longer period of 20 years obligation. If the six years covers it, that seems to be satisfactory.
    Amendment negatived.
    Amendment made: No. 51, in page 25, line 33, at end insert:
    'and for the purposes of this section—

    (a) "distribution" has the same meaning as in Part IV of the Finance Act 1965,

    (b) the question whether a company is a subsidiary of another company shall be determined in accordance with paragraph 9 of Schedule 12 to the Finance Act 1965.—[Mr. Diamond.]

    Further consideration of the Bill, as amended, adjourned.—[Mr. Roy Jenkins.]
    Bill, as amended, to be further considered this day.

    APPLE IMPORT LICENCES
    Motion made, and Question proposed, That this House do now adjourn.—[Mr. Concannon.]
    3.18 a.m.
    Mr. George H. Perry: I apologise for delaying the House still further at this very late hour. I only hope that I shall be able to stay awake and make my point.
    My hon. Friend the Minister of State knows that I became interested in this subject as long ago as October, 1967, when I first contacted his immediate predecessor on behalf of a friend of mine of very long standing. On that occasion I was shuttled back and forth between the Board of Trade and the Ministry of Agriculture, Fisheries and Food for some time and succeeded in getting nowhere very quickly. I tried again in October, 1968, and again made no progress.
    In June of this year I put the case in the hands of my right hon. Friend the Member for Belper (Mr. George Brown), in whose constituency my friend now lives. My right hon. Friend told me that until he went into hospital on 3rd July he had been having a battle with the Board of Trade on this question. The day before he entered hospital my right hon. Friend said to me, "I am afraid I got nowhere. They are not prepared to move a hand". My right hon. Friend sent me copies of correspondence he had received from the Board of Trade, including the minutes of a meeting between himself and the Minister of State as long ago as June of this year.
    My right hon. Friend has given me carte blanche to carry on during his absence in hospital. I am still very concerned that the answers given to us over the past 18 months or two years are contradictory, ambiguous or somewhat vague. Is my hon. Friend the Minister of State aware of the full significance of his information to me that the Department has issued as many as 300 apple import licences as at 1st July this year? I have made investigations, and my information is that it is quite possible that over 50 per cent. of those 300 licence holders belong to three small groups. My observations in the East Midlands lead me to the conclusion that in Nottingham,
    844
    for instance, 28 per cent. of the market space is occupied by Dutch and American interests. The same applies in Derby, with 35 per cent. Leicester, 48 per cent. Wolverhampton, 65 per cent., with the space in the markets there occupied by two firms which are actually foreign interests trading under the name of old family concerns.
    This sort of thing is happening all the time. Down the years, the name of Johnson Brothers has been known as that of an established business, but now, although the name still obtains, the firm is controlled from outside. Almost every week a firm is taken over in these localities by one of the large combines, the faceless men who never see an apple. They do not know what an apple looks like, yet they are allowed to make vast fortunes through being given licences.
    The public are being fleeced every week, being almost bled white and exploited by these people who just want to make vast sums of money. Does the Board of Trade know what is going on in this sector of the distributive trade in this country? It seems to me that Lord Thomson's words could apply here. These are not just apple import licences; they are more like licences to print money.
    My constituent and friend, now the constituent of my right hon. Friend the Member for Belper, could not be granted a licence. We were told that the reason was that he does not already hold a licence or he does not import goods at the present time. It is possible to import Australian apples, but one cannot import goods from the Continent without a licence. This is the off-season, but my friend tells me that he can buy a 40-lb box of apples at Southampton docks for 28s. Transport to his own town in Derby is 2s. That is 30s. for the 40-lb box. Yet when he goes to buy them from one of these firms with an import licence, as he has to do to carry on his trade, he has to pay as much as 60s. or 70s. for it—a box of French golden delicious or some such. He then has to add his profit, as he is entitled to do, to earn a margin to pay his staff and meet his rates and taxes. The price to the public can sometimes be 1s. 3d. for a single apple, or 3s. 9d. a pound. One apple has cost as much as 1s. 10d.

    845
    This is the way the housewife is being fleeced, because certain firms have a stranglehold on the market. I very much hope that my hon. Friend the Minister of State can answer my questions and give some assurance through me to my long-standing friend.
    3.23 a.m.
    Mr. John Wells: I follow the hon. Member for Nottingham, South (Mr. George H. Perry) in a more general sense. He has rightly raised the case of his former constituent, but I wish to develop the generality of the matter which he has raised.
    In recent weeks there has been a reallocation of apple licences. My complaint would be more at the attitude of the Board of Trade in this reallocation. There was a massive reallocation in 1967, which was then, reputedly, to last for many years. It was said to be a major change. Why, then, do we need another major change only two years later, and, if we are to have such a major change, why has there not been a much closer examination of the bona fide trading credentials of those who have applied? This is where the House must be grateful to the hon. Member for Nottingham, South, for raising this subject.
    There are people who have applied for licences and, for all I know, have been granted them, and who have done little bona fide trading in apples. They have been trading in other imported horticultural commodities and in order, as it were, to round off their portfolio and make themselves more attractive to trade, they have wanted apple licences. I hope that if there is to be a further reallocation at some future date there will be far greater consultation with the trade. The Minister of State has a good reputation in the House for his fairness and accessibility and his ease of personality, but I remind him that he was less than gracious to the deputation which waited upon him. Hon. Members who know his amiable reputation were surprised by the brusque handling of the existing licence holders, who felt very aggrieved about it.
    This matter is bound to be looked at again. The 1967 review was meant to last a long time but was rethought in a couple of years. I ask him, when the matter is reviewed again, to pay
    846
    closer attention over a longer period to the representations of the bona fide trade and to see that licences are given to the bona fide traders. We all know that licences should not be given for all time, that there should be a flow. We appreciate that times change, but I hope that the Minister of State or his successor—who, I hope, will be drawn from this side of the House—will listen to the trade rather more closely.
    3.27 a.m.
    The Minister of State, Board of Trade (Mr. Edmund Dell): I at once respond to what the hon. Member for Maidstone (Mr. John Wells) has said about my treatment of representations from the existing licence holders. His remarks were completely unjustified. I am grateful to him for his compliments to me but to suggest that I was brusque with the licence holders is totally unfounded.
    What happened was that officials of the Board of Trade held discussions over a long period with the representatives of the fruit trade. One section of the trade subsequently, because it was not satisfied with the way the officials had accepted its arguments, asked to see me. I saw representatives of that section and we had a discussion which I thought was fruitful, following which that section put up to the Board of Trade certain proposals for reallocation. The Licence Holders' Association, which had also had discussions with my officials over a very long period, then also asked to see me. It was indicated to it that it had already presented its arguments and that if a review was to take place by 1st July a decision was likely to follow rapidly after its representatives had seen me. Nevertheless, I added that if they wished to see me personally, they could, and we arranged on that basis for them to come to see me.
    Some of them came to see me and I listened to their arguments and I think that I made it clear to them that, although I had taken note of the arguments, which had already been presented to my officials, I could not guarantee that these would lead to any holding up of the reallocation. In fact, we decided to go ahead with the reallocation a few days later. I see no reason for complaint. They could have asked to see me earlier and I would have been prepared to meet them earlier.
    Mr. John Wells: The 1967 allocation was held up as the great allocation to last for many years. Why the haste within two years? The hon. Gentleman says these people could have seen him sooner. Two years is a very short time.
    Mr. Dell: I am simply answering the remarks made by the hon. Member about the way in which I received the delegation which, if I may say so in my own defence, were completely unjustified.
    I will now come to the basic question of why the Board of Trade decided to carry out this reallocation. Although he welcomes the initiative of my hon. Friend the Member for Nottingham, South (Mr. George H. Perry), the hon. Member for Maidstone is on a different side of the issue. The hon. Member for Maidstone does not want a further reallocation. My hon. Friend wants a far more radical reallocation than has occurred. Although they both welcome the fact that the point has been raised, they are arguing from a different point of view.
    I welcome my hon. Friend's initiative in raising the matter because it represents to the House and to the public something which certain of those from the trades who made representations to me refused to believe, and that is that there was pressure from hon. Members and from people outside for a reallocation.
    The purpose of import licensing is, of course, to keep the amount of imports from the restricted sources within a certain ceiling. Unfortunately, however, the technique used of issuing licences to individual importers inevitably means that we also decide the amount of trade which individual importers can do; we decide, that is, the distribution of the trade between different traders. Our objective here, and I am sure that the House will agree that this is the right objective, is to interfere as little as possible with the way trade would have been distributed between individuals in the absence of restrictions. What we have to do, therefore, is to try to find some criterion by which to judge what the distribution of trade would have been in those circumstances.
    In a situation in which imports of a particular commodity are restricted for the first time, the obvious way of doing
    848
    this is to take the distribution of the trade as it existed immediately before the imposition of restrictions. This is, for example, largely what was done in 1951 when, after a short period during which there were no restrictions on imports of apples and pears from non-dollar sources, such restrictions were reimposed in November of that year.
    As time goes on, however, the continued use of an historical period of that sort clearly becomes less and less defensible. It freezes trade in a pattern which becomes increasingly artificial, and it is unfair. It is unfair to new firms who would otherwise have entered the trade; it is unfair to firms already in the trade who, because they are more enterprising and efficient, would otherwise have increased their share in the trade. It is unfair; and it also leads to abuses. Because of the restriction, licences are valuable and are worth money. That is the point made by my hon. Friend the Member for Nottingham, South. To continue an inflexible system of allocation that has no regard to the way the importing trade is developing generally is to invite abuse of the system. A situation inevitably arises in which we get not just trading in licensed apples but also trading in the licences themselves.
    The problem of remedying this situation lies in the difficulty in finding some criterion, other than trade in quota apples before the restrictions were imposed, by which to assess the trade which individual companies would be doing if there were no restrictions. In the case of apples, we can get some guidance at least from trade in other fresh fruit.
    There are very few traders who would in ordinary circumstances be importing only apples, and only apples from the sources to which the restrictions apply —I should perhaps remind the House that apples from the sterling area are admitted without quantitative restriction. They will normally be importing other fresh fruit also, for example, apples from the sterling area, pears, peaches, citrus and so on. The size of the trade they do in this unrestricted sector is certainly no perfect guide to the trade which they would be doing in apples had there been no restriction. It is, however, some indication, and I think the only one we can at present turn to.

    849
    That is why, when a measure of reallocation was introduced in 1967, a part of the allocation was based on imports of apples from non-quota sources, and imports from the major quota countries of other fresh non-tropical fruit. The main part of the allocation—80 per cent. in fact—was, however, still based on imports of quota fruit, and since these imports were necessarily limited by the licences each trader had, this meant that 80 per cent. of the allocation was still based on the trade which had taken place very many years before.
    That is why earlier this year we felt the time had come to examine the possibility of making a further change in the allocation. We were influenced in this matter by an increasing volume of representations—to the Board of Trade and to the Ministry of Agriculture—that the new allocation was still unsatisfactory. It allowed insufficient scope for new traders to enter the trade, and for the more enterprising existing traders to expand theirs, and, it was alleged, trading in licences, even if carried out in forms which made it very difficult to detect, was still continuing on a sizeable scale.
    The conclusion we came to was that it was wrong to continue an allocation still so very heavily based on trade done partly in 1951 and partly in 1936–39, and that some further change was needed. What we have done is in large part to repeat the procedure used in 1967 but to carry it further in two respects. First, a smaller part of the reallocation—70 per cent. as compared with 80 per cent. in 1967—has been based on trade in quota fruit and a larger proportion—30 per cent. compared with 20 per cent.—has been based on imports of other fruit. Secondly, whereas in 1967 we based this second part of the allocation on imports of non-tropical fruit from our main apple quota suppliers only, this time we have cast the net wider and used imports of such fruit from all sources. I will not go into all the details of the system used. These are complicated and it would take more time than is at my disposal to deal with them adequately. There is no question of people who are not bona fide importers qualifying under the system. I will, therefore confine myself to a few general points.
    First, I would like to explain that we have consulted with the various trade
    850
    associations who represent the interest of importers in this field. It is fair to say that, while the views of traders were divided, the majority certainly were against any further reallocation. It would not, however, have been right to have settled this matter solely on the basis of the majority view inside the trade. We had to take account also of the minority view. We had also to take account of interests outside the importing trade who are affected by the way the importing trade works—I have in mind, for example, the retail trade and indeed the consumer. I should, however make it clear that the consultations we had with the importing trade were not just a sham and that we had careful regard to the points they made. It was in the light of some of these points, for example, that we based part of the allocation on imports of non-tropical fruit from all sources instead of just from the main apple exporting countries. It was in the light of the reactions of the trade that we finally decided to base only 30 per cent. of the allocation on imports of non-quota fruit instead of the 40 per cent. we had originally in mind.
    The second point I should like to deal with is the one which the hon. Member for Nottingham, South has raised, namely why we have based the allocation only on returns of imports and have not thrown it open to other traders such as wholesalers or retailers, one of whom he is particularly interested in, who handle apples but do not themselves act as importers. There were two reasons. First, as I started by saying, our objective was to get as close as possible to the distribution of the importing trade which would have existed had there been no restrictions. If traders do not import fruit other than apples, it is a reasonable presumption that they would not, in the absence of restrictions, be importing apples either. Secondly, to have given licences to such traders would have made the whole licensing system unworkable. The number of traders who handle apples in one way or another, as wholesalers or retailers, is so large that to have given all of them an import licence would have fragmented the importing trade to an impossible extent and have resulted in many licences being of a value which was not commercially usable.
    It may be suggested that we might get over this last difficulty by issuing

    851
    licences only to companies which undertook to import a specified minimum quantity. I frankly do not see how this procedure would help us. Unless we set the minimum very high indeed, a large number of traders would be willing to give an undertaking to import that minimum and the quota would be oversubscribed. We might avoid this by setting the limit very high indeed. It was suggested that the limit should be as high as £250,000. But this would mean that only a few traders would get licences indeed, only 50 if the figure of £250,000 were used. I cannot see any grounds in equity or efficiency for such a restriction in the number of licence holders. On the contrary, it seems to me indefensible to force out of this trade the smaller importer who has for years been importing apples and, on the evidence of his trade in other fruit, is clearly in the importing trade as his normal business and not solely in order to take advantage of the scarcity of quota apples.
    This leads me to another point that my hon. Friend has made, about prices. At certain times of the year there is often a considerable gap between the price that importers pay for their apples overseas and the price that they realise for them in this country. But we cannot hope to restrict supplies—which is what the quota of course does—without affecting the price. It is not as though importers were monopolists holding the public to ransom. There are over 270 licence holders, and no one trader holds more than 4 per cent. of the total licences.
    I do not follow the argument that, if we used an alternative system which might restrict the number of licence holders to a figure well below the 270, we could be sure that that smaller number would not exploit the price situation in the same way as my hon. Friend suggests that the price opportunities are being exploited at the moment.
    My hon. Friend went on to suggest that, in a high proportion of cases, licences were concentrated in a very few hands. I have no evidence of that, and my hon. Friend has not submitted any
    852
    evidence of it to me before now. If he wishes to do so, I will study what he has to tell me.
    Then there is the point about which the hon. Member for Maidstone was clearly concerned, that it might be said that the reallocation is unfair to traders who have lost their licences altogether or who have received a smaller licence in the past. Here we have got to face the fact that if we are going to allow newcomers to the trade, and if we are going to allow a larger trade to those firms which on the evidence of trade other than in quota fruit are the more enterprising, some traders are bound to lose. This takes us back to the crux of the issue with which I started. We have tried to get closer to the distribution of the trade which would have existed in the absence of restrictions. This means that some traders will gain and that some will lose.
    We have had in this matter to strike a balance between conflicting considerations —on the one hand, the obvious imperfections of the earlier system and the need in equity to allow newcomers and give bigger allocations to the more enterprising firms; and, on the other hand, the imperfect nature of the criteria we have used and the possibility which I must accept, that in some cases they will have resulted in a measure of unfairness. I can only say that we examined this whole matter with the greatest care and that I believe that the balance we struck was about right.
    Mr. John Wells: Before the hon. Gentleman sits down, has he any indication of the number of new licence holders who are not British taxpayers; in other words, foreign nationals or companies which are foreign-based?
    Mr. Dell: I cannot answer that question without notice. Clearly it was never an intention within the licence system to limit the granting of licences to British nationals. That is not the way in which the licensing system has ever operated.
    Question put and agreed to.
    Adjourned accordingly at sixteen minutes to Four o'clock.

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  Command Paper No. 3437 (Table 2)
NATIONAL FINANCE
  Hotels, Restaurants and Boarding Houses (Selective Employment Tax)
  Hotels, Restaurants and Boarding Houses (Selective Employment Tax)
  Departmental Purchasing
  Departmental Purchasing
  Income Tax (Reliefs and Allowances)
  Income Tax (Reliefs and Allowances)
  Balance of Payments (Revised Figures)
  Balance of Payments (Revised Figures)
  Pay As You Earn
  Pay As You Earn
CIVIL SERVICE
  Research Establishments
  Research Establishments
MINISTRY OF DEFENCE
  Nuclear Weapons
  Nuclear Weapons
  European Multi-Role Combat Aircraft
  European Multi-Role Combat Aircraft
EDUCATION AND SCIENCE
  Schoolgirls, Devon (Conception Rates)
  Schoolgirls, Devon (Conception Rates)
EMPLOYMENT AND PRODUCTIVITY
  Redundancy Payments
  Redundancy Payments
HOME DEPARTMENT
  Community Development Project
  Community Development Project
  Prisoner, Manchester (Treatment)
  Prisoner, Manchester (Treatment)
  Obscene Publications (Prosecutions)
  Obscene Publications (Prosecutions)
  Prisons, Nottingham and Lincoln (Conditions)
  Prisons, Nottingham and Lincoln (Conditions)
  Harmful Publications (Prosecutions)
  Harmful Publications (Prosecutions)
  British Citizenship
  British Citizenship
HOME DEPARTMENT
  Immigrants
  Immigrants
LOCAL GOVERNMENT
  Planning Appeals
  Planning Appeals
  Norfolk (Conservation Areas)
  Norfolk (Conservation Areas)
MINISTRY OF POWER
  Scotland (Coal Consumption)
  Scotland (Coal Consumption)
  Public Buildings (Solid Fuel)
  Public Buildings (Solid Fuel)
OVERSEAS DEVELOPMENT
  Aid Programmes (Military Purchases)
  Aid Programmes (Military Purchases)
WIRELESS AND TELEVISION
  B.B.C. Licence Fee
  B.B.C. Licence Fee
  Emley Moor Mast
  Emley Moor Mast
  Television Reception (Leyburn)
  Television Reception (Leyburn)
TECHNOLOGY
  Mineral and Geological Surveys
  Mineral and Geological Surveys
  Shipbuilding Industry (Aberdeen)
  Shipbuilding Industry (Aberdeen)
  Departmental Staff (Pay)
  Departmental Staff (Pay)
WALES
  Local Authority Houses (Purchase)
  Local Authority Houses (Purchase)
FOREIGN AND COMMONWEALTH AFFAIRS
  Nigeria
  Nigeria

Preamble
The House met at half past two of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Leicester):
The LORD CHANCELLOR on the Woolsack.

CHEMICALS FROM WOOD AND SUGAR BEET
The Earl of LAUDERDALE: 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 conclusions have been reached by the imports-switching section of the Economic Group in the Department of Economic Affairs upon the possible value of research into the extraction of chemicals from wood and sugar beet.]
Lord BESWICK: My Lords, as the noble Earl was informed by my noble friend Lord Hughes on April 16, the Government consider that the extraction of chemicals from wood is uneconomic at the present time. On the other hand, it is recognised that research into the extraction of chemicals from both sugar beet and sugar cane is valuable and worthwhile. The Government are satisfied, however, that the scale of research in this field is adequate. Possibly I might add, in view of the noble Earl's Question, that responsibility for detailed matters of this kind rests with the Departments concerned and not with the Department of Economic Affairs.
The Earl of LAUDERDALE: My Lords, I thank the noble Lord for that reply. May I ask whether he is aware that his noble friend Lord Hughes, as I understand it, undertook to refer my Question to the imports department of the Economic Group of the D.E.A.? Is he aware that the area of imports to which these matters relate is of the order of £140 million a year; and though particular items, such as glucose, sugar esters, and glues, are
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rather small, there are other items in this held, such as resin-based materials for plastics, that are worth about £65 million a year in imports? Would he get the D.E.A. import-switching section to look at this further?
Lord BESWICK: My Lords, the noble Earl has asked several supplementary questions. He has had correspondence with my noble friend, and I have myself seen him. I do not recognise the import-switching section of the D.E.A. myself, although my noble friend Lord Hughes says he may conceivably have used the phrase. What I would suggest to the noble Earl is that, if he is not satisfied, I will gladly arrange for him to discuss this matter with someone in the Department of Technology.
The Earl of LAUDERDALE: My Lords, I am obliged to the noble Lord.

COUNCIL TENANTS' INCOMES
2.33 p.m.
Viscount MASSEREENE and FERRARD: 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 can confirm that there are approximately 500,000 tenants of council houses with incomes of £2,000 a year or more.]
The PARLIAMENTARY SECRETARY, MINISTRY of HOUSING and LOCAL GOVERNMENT (Lord Kennet): My Lords, it has been estimated on the basis of the 1967 Family Expenditure Survey that there were then about 60,000 council tenants in Great Britain with gross incomes of £2,000 or more a year. I know of no reliable estimate which is more recent than this, nor of any estimated figure which is as high as the noble Lord has mentioned in his Question.
Viscount MASSEREENE and FERRARD: My Lords, I thank the Minister for his reply. Does he realise that there are many retired people and poor people who have put all their life savings into one or two houses which are now rent-controlled? Does he realise that the rents from these houses probably compromise the whole of the incomes of

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such people? May I further ask the Minister, does he therefore think it right that these people should through their rates subsidise housing for far more affluent, and perhaps prodigal, members of the community?
Lord KENNET: My Lords, housing finance is a complicated subject indeed. Some council tenants, especially those in older houses where everything is paid off, subsidise other council tenants. Ratepayers subsidise council tenants, And the Government, I would remind the noble Viscount, subsidises owner-occupiers to about the same extent as it subsidises council tenants in the form of tax rebates and the option mortgage scheme.
Lord GARNSWORTHY: My Lords, is it not desirable that there should be a mixture of persons in different income brackets on local authority housing estates; and is it not a fact that many tenants pay the full economic rent for local authority housing?
Lord KENNET: My Lords, the latter statement of the noble Lord is a fact; many tenants pay more than the full economic rent, as I have just explained. One can easily see the point of the suggestion in the first part of the noble Lord's supplementary questions.
Lord STRATHCLYDE: My Lords, would the noble Lord be good enough to ask his noble friend Lord Hughes whether the statement in the last part of his reply applies to Scotland?
Lord KENNET: In due course, my Lords.
Viscount MASSEREENE and FERRARD: My Lords, might I point out to the Minister—
Noble Lords: No!
Viscount MASSEREENE and FERRARD: My Lords, I am sorry. May I ask the Minister whether he realises that, although there are 60, 000 council house tenants with incomes of £2, 000 or more, there are many hundreds of thousands of council houses where the aggregate income of the whole family is more than that?
Lord KENNET: Yes, my Lords; that is so.
Lord BYERS: My Lords, may I ask the Minister to reject any idea that we should return to the household means test?
Viscount MASSEREENE and FERRARD: My Lords, does the Minister understand that I am trying to help the genuinely poor people who are in the queue for council houses?
Lord KENNET: Yes, my Lords; I do not doubt it. But it seems to the Government that the best way to dc that is through rent rebate schemes, and it is done in that way.

CONCORDE AIRCRAFT PROJECT: FUTURE COSTS
Baroness STOCKS: My Lords, I beg leave to ask the Question which s: ands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what is the precise nature of their commitment to the Anglo-French Concorde project and what would be the further cost should they withdraw at this stage from such a commitment.]
Lord BESWICK: My Lords, our commitment is based on the agreement entered into between the British and French Governments on November 29, 1962, but this does not involve either Government in a commitment to pursue the programme to completion regardless of circumstances. The costs to Her Majesty's Government of withdrawing from the project would depend upon the circumstances giving rise to the withdrawal, and therefore I am unable to give an estimate.
Baroness WOOTTON of ABINGER: My Lords, can my noble friend tell us whether, if we were to withdraw at the moment, there would be any liability other than the expenditure which has already been incurred?
Lord BESWICK: My Lords, I am sure that my noble friend knows that any industrial commercial project of this kind involves contracts with commercial firms, with all of which there is an agreement; and if a contract is cancelled consequences would flow.
Baroness WOOTTON of ABINGER: My Lords, was it not very imprudent of

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Her Majesty's Government to become involved in expenditure of this scale with No idea on what terms they could withdraw from the commitment?
Lord BESWICK: My Lords, I am not quite sure who my noble friend is criticising. The agreement which was entered into with the French Government to embark on this project was dated, as I have just said, November, 1962, and it was therefore concluded by another Government. Any criticism arising should not therefore be directed to any Minister answering for the present Government. As for the rest, as I have said, any commercial undertaking of any kind inevitably must involve the honouring of contracts.
Baroness STOCKS: My Lords, I have one supplementary question. I should very much like to know the answer to it, though maybe I shall not get it. I should like to know whether members of Her Majesty's Government would be bitterly disappointed if they learned that, for some reason other than sabotage, the Concorde prototype had spontaneously combusted in its hangar?
Lord BESWICK: My Lords, the supplementary question is so carefully contrived that I think I should be doing it an injustice if I gave it a spontaneous answer.
Baroness WOOTTON of ABINGER: My Lords, I should like to come back to a slightly more substantial aspect of this matter. I should like to ask Her Majesty's Government what prospect they have of selling a sufficient number of these machines to recoup themselves within a reasonable period for this enormous and continually expanding expenditure.
Lord BESWICK: My Lords, the prospects for selling this aircraft are good, and if things go well there is every prospect of recouping the economic cost of the production aircraft. But it has long been agreed, and has been stated before now, that it will not be possible to recover the cost of research and development.
Lord BYERS: My Lords, are we not in danger of doing the same sort of disservice and damage to the Concorde as was done to the VC10?
Lord BESWICK: My Lords, I am sure that those who are engaged in
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giving a good part of their lives to the building up of this engineering project will be delighted to hear what the noble Lord said.
Baroness WOOTTON of ABINGER: My Lords, is there not a serious question that even supposing a sufficient number of these planes were sold the surcharge necessary for passengers who wish to travel by them as compared with the cost of travelling by existing subsonic aircraft will be so high that it will be very difficult to fill these Concordes? Have Her Majesty's Government considered this?
Lord BESWICK: My Lords, not only have Her Majesty's Government considered it, but some professional people have spent the best part of their working week producing graphs and curves on this very problem, and the results of their research do not bear out what my noble friend says.
Lord THORNEYCROFT: My Lords, is the noble Lord aware that there are many people in this country who feel immensely proud that, not as a single nation but in co-operation with our French allies, on a Continental basis, we are capable of going through a great technical adventure of this character?
Lord BESWICK: My Lords, if I may say so, what is needed here is a cool and rational approach. I agree absolutely with what the noble Lord says. On the other hand, if the thing became hopelessly uneconomic, or if the aircraft had no prospect of getting a certificate of airworthiness, we should have to judge such a situation when it arose.
Lord WAKEFIELD Of KENDAL: My Lords, will Her Majesty's Government be able in the near future to evaluate the immense advantages of what might be described as the side effects from this Concorde project? Are the Government not aware that there are many advantages deriving from it which may not be easily assessable, and will it be possible in the near future to give some evaluation of some of the advantages that are obtained from this immensely valuable project?
Lord BESWICK: My Lords, that is true. Again, the noble Lord ought not to press that question too hard, lest he drives me a little nearer to my noble friend behind me. What he says is right.

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It is true, as my noble friends may say, and indeed they have said in the propaganda that has been put out in the organisation with which my noble friend is quite rightly connected, that the sum of money to which we are committed to the end of the present programme, which runs to some £155 million, if spent in other directions could also reap benefits.
Lord CONESFORD: My Lords, may I ask this question? In estimating the prospects of sales of these machines, are Her Majesty's Government assuming that they will be allowed to fly at supersonic speeds over civilised countries, or that they will not be so allowed?
Lord BESWICK: My Lords, I am not quite sure what the legal effect is of the phrase which the noble Lord put at the end of the supplementary. I can tell him that all calculations have been made on the basis that this aircraft can fly overland and also on the basis that overflights of land would not be possible.
Lord STRATHCARRON: My Lords, as we are not able to go to the Moon, will the noble Lord not agree that it is a matter of some pride that we have such a thing as a Concorde in this country?
Lord BESWICK: My Lords, I agree with the noble Lord that there is a good case to be made out for saying that this is rather more useful than money that is being spent in going to the Moon.
A Noble Lord: Shame!
Baroness WOOTTON of ABINGER: My Lords, my noble friend misunderstood me. I did not make a statement. If I had done, I should have been out of order. I asked a question whether Her Majesty's Government had considered the prospect of getting a sufficient surcharge payment from passengers for travelling on this aeroplane as compared with the cost of travelling on a conventional aeroplane, and I understood my noble friend's Answer to be that he has had professional advice that this will be satisfactory. May I ask whether Her Majesty's Government are accepting this advice at face value.
Lord BESWICK: My Lords, I was not trying to evade the noble Lady's question. I was trying to tell her that this is one
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aspect of this matter which has had particular attention, and the advice is that a surcharge could be made, and indeed should be made, and that potential passengers would be very pleased to pay it.
Baroness WOOTTON of ABINGER: My Lords, one final supplementary question. Will my noble friend accept that the motivation behind these questions is a very real public concern that, what with the noise and other drawbacks of this instrument, there is grave doubt as to whether this expenditure is justified?
Lord BESWICK: My Lords, again I do not want to comment on the latter part of the noble Lady's question, but on the first part I may say that I am aware of this public concern and I think it would be a bad thing in a democratic country if an expenditure of this order were not subject to quite rigorous questioning.
The Lord PRIVY SEAL (Lord Shackleton): My Lords, I think we have perhaps had enough on the Concorde.

LOCH NESS MONSTER: SUBMARINE RESEARCH
2.46 p.m.
Lord KILMANY: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they are satisfied, from assurances given by persons operating submarines in Loch Ness, that any monsters that may chance to inhabit that loch will not be subjected to damage or assault.]
The JOINT PARLIAMENTARY UNDER-SECRETARY of STATE for SCOTLAND (Lord Hughes): My Lords, we proceed from one monster to another. The Answer to the Question is, Yes. The organiser of The Loch Ness Phenomena Investigation Bureau Limited has given assurances to the Chief Constable of the Inverness Constabulary that the submarine operations have no aggressive intent.
Lord KILMANY: My Lords, arising out of that reply, may I ask whether the noble Lord is aware that the Chief

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Constable has in fact given permission for an attempt to be made to obtain a tissue sample from whatever monsters can be found? Is the noble Lord satisfied that this could be done without danger and disturbance, and does the Secretary of State for Scotland condone this course?
Lord HUGHES: My Lords, the organiser has said that the main objective of the submarine will be to try to get a positive identification of any echo which may be picked up by the Bureau's sonar equipment. For this purpose it will be fitted with are lights and photographic gear. In addition, it will have a small compressed air gun designed to fire a retrievable dart so shaped as to extract a small sample of tissue for subsequent analysis. This technique is widely used for tagging whales. In the particular context of this scientific expetition I hardly think it constitutes damage or assault.
On the other question which the noble Lord has asked, while I have no reason to doubt the assurances that have been given to the Chief Constable, I must point out that my right honourable friend the Secretary of State has no real locus in the matter. Unless and until the monster is found and examined we cannot even say whether the provisions of the Cruelty to Animals Act 1876 would be relevant, since that Act does not apply to invertebrates.
Viscount MASSEREENE and FERRARD: My Lords, may I ask the Minister whether he is aware that news has just come through that an enormous apparently prehistoric, monster has been washed up on the Ross of Mull at a place called Uisken? Everybody is very excited about it up there.
Lord HUGHES: Is it alive or dead?
Viscount MASSEREENE and FERRARD: Dead.
Lord BLYTON: My Lords, is my noble friend aware that it will be an act of sacrilege to take away from the Scottish Tourist Board the myth of the monster of Loch Ness by which they get many gullible tourists each year?
Lord HUGHES: I do not know on what scientific ground my noble friend says that the monster is a myth.
Lord LOVAT: My Lords, is the noble Lord aware that neither the Inverness County Council nor the police, nor the riparian owners on the shore were alerted to the fact that two submarines were coming to operate in the Loch? May I further ask him whether he is aware that, according to reports in the Press, "nature study" goes so far as for the "Phenomena" promoters to say that if they cannot contact the monster with lance or submarine they propose to detonate charges below the surface and blow the animal on to the top of the water—something we very much regret in the county where the monster still remains our greatest invisible asset.
Lord HUGHES: My Lords, there are many rumours about the monster, and I know that there were other suggestions about what might be done. An American group were interested in an alternative way of trying to find it, but when they discovered that it would involve them in expenditure of half-a-million dollars they changed their mind.
Viscount ST. DAVIDS: My Lords, will my noble friend make clear to his right honourable friend the Secretary of State for Scotland that there is legislation under which these creatures could be protected and that the British Waterways Board, as the navigation authority, have the right to remove the licences for these vessels if they start annoying the local livestock?
Lord HUGHES: My Lords, I should be very interested to examine any information my noble friend can give me in that direction.
Lord HAWKE: My Lords, how would the noble Lord like to be "potted" by an airgun to take samples of his tissue?
Lord HUGHES: My Lords, provided that the relevant part of my tissue was no greater than the small amount, in proportion, that was taken from the bulk of the whale, I doubt whether I should notice it.
Lord LOVAT: My Lords, the noble Lord's answer is not entirely satisfactory. Is he aware that in America there is considerable embarrassment that these two submarines should have arrived without local authority? They quite rightly take the view that we can hardly launch an expedition on Lake Okeechobee in similar circumstances.

BUSINESS
Lord BESWICK: My Lords, at a convenient moment after 3.30 p.m. my noble friend the Leader of the House will be making a Statement on the Duncan Report.
May I also inform your Lordships of the way in which it is proposed to take to-day's business. It is proposed that we should adjourn the Committee stage of the Housing Bill at a convenient moment round 7 p.m. in order to take the Second Reading of the National Insurance (No. 2) Bill. The Committee stage of the Housing Bill will then be resumed. I hope that this arrangement meets with the convenience of the House.

BUSINESS OF THE HOUSE
Lord KENNET: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That it be an Instruction to the Committee of the Whole House to whom the Housing Bill has been committed that they consider the Bill in the following order, viz.:—

Part I.

Schedule 1,

Part II,

Clauses 43 to 47,

Schedule 2,

Clauses 48 to 52,

Schedule 3,

Clauses 53 to 66.

Schedule 4,

Clauses 67 and 68,

Schedules 5 and 6,

Clauses 69 to 79,

Schedule 7,

Clauses 80 to 88,

Schedules 8 to 10.—(Lord Kennet.)

Lord LEATHERLAND: My Lords, before the Motion is put, may I draw attention to the state of the Benches opposite and ask my noble friend whether he thinks that this Bill can receive proper and mature consideration with so many members of the Conservative Party absent?
Lord SHACKLETON: My Lords, I do not think that we can debate this. I think my noble friend has got all he can out of this situation, but it is noteworthy.
Lord DRUMALBYN: My Lords, may I say that at the appropriate moment my noble friends will be present to take a very full part; but that moment is not yet.
On Question, Motion agreed to.

TRUSTEE SAVINGS BANKS BILL [H.L.]
2.53 p.m.
House in Committee (on Re-commitment).
The CHAIRMAN of COMMITTEES (THE EARL OF LISTOWEL): My Lords, this Bill has been amended by the Joint Committee on Consolidation Bills. No further Amendments have been put down for consideration by the Committee this afternoon. With the permission of the Committee, I will therefore put the Question, That I report the Bill to the House without further amendment.
Moved, That the Bill be reported to the House without further Amendment—(The Earl of Listowel).
On Question, Motion agreed to.
House resumed; Bill reported without further amendment.
Then Standing Order No. 41 aving been suspended (pursuant to the Resolution of July 14), Report received; Bill read 3a.
The Lord CHANCELLOR (Lord Gardiner): My Lords, your Lordships may remember that this was a Consolidation Bill by the Law Commission, with some 21 Amendments to the law, which they thought were necessary in order to effect a useful consolidation. The Joint Committee on Consolidation Bills, for whose work and patience we are all greatly indebted, have concurred with the need to make 16 of these Amendments but have not thought it necessary for various reasons which they have given, to concur with the other five. If I may respectfully say so, I agree with the views they have taken.
The first of the Acts consolidated is the Trustee Savings Bank Act 1954, which itself was a Consolidation Act. Since then there have been ten Acts or pieces of subordinate legislation which have made changes in the 1954 Act. I am sure that to all those who may have

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occasion to use this legislation it will be of considerable convenience for them to have all their Statute Law in one place rather than in ten places. I beg to move this Bill do now pass.
Moved, That the Bill do now pass.—(The Lord Chancellor.)
On Question, Bill passed, and sent to the Commons.

EDUCATION (SCOTLAND) BILL
2.55 p.m.
Lord HUGHES: My Lords, I beg to move that this Bill be now read a third time.
Moved, That the Bill be now read 3a.—(Lord Hughes.)
On Question, Bill read 3a, with the Amendments.
Clause 8 [Power of Secretary of State to require education authority to fix a single school commencement or leaving date]:
Lord DRUMALBYN Lord DRUMALBYN moved Amendment No. 1:
Page 9, line 17, at end insert ("and except where he is so satisfied, on the application of any education authority, the requirement shall be made by regulations;").
The noble Lord said: My Lords, Clause 8 deals with the power of the Secretary of State for Scotland to require education authorities to fix a single school commencement or leaving date. The Clause inserts a proviso into Section 33 of the principal Act, the 1962 Act, which says:
"… if in relation to the area of any education authority the Secretary of State is satisfied, either of his own accord or on the application of that authority, that, having regard to all the circumstances, it is desirable that a single date for commencing school attendance, or a single school leaving date, should be fixed for that area, he may require the authority to fix for the area a single date for commencing school attendance or, as the case may be, a single school leaving date; "
We discussed this at an earlier stage but, unfortunately, the Amendment I had put down would not have done what we wanted to do. It is eminently reasonable that, if an education authority asks the Secretary of State for a single school commencement or leaving date to be fixed and the Secretary of State agrees, he should require the Authority to fix a
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single date. But if the Secretary of State thinks that he himself, "of his own accord" as it says here, should simply require an authority to fix a date for its area, it is arguable whether he should be able to do so without reference to Parliament.
What we on this side think is not justifiable is that, if the Secretary of State wishes to fix a single school commencement or leaving date for the whole of Scotland, he would be able to use this clause to do this, as he could do, so far as I can see, by simply requiring each local authority, one after the other, to introduce a single date. We think that undoubtedly the Secretary of State should come to Parliament by way of placing an Order, so that we could discuss it and agree or disagree with it as we see fit. I suggest to the House that there is a danger of educational matters being treated too much as an educational preserve into which nobody else should trespass at all.
It can be said that, so far as school commencing dates are concerned, this is primarily a matter of organisation, although a great many parents are affected. It cannot be said that the question of a school leaving date is only a matter for educational interests. That seems to me to make it all the more important that the Secretary of State should come to Parliament if he wishes to take action which will result in a single school leaving date being introduced for the whole of Scotland.
From my own experience in the Education Department and the Scottish Office, I myself would have been very surprised if such a power had been asked for by the Department, and I am quite certain that I would not have agreed to it when I was there. I do not see why this should be done by the present Government; nor do I think from my experience elsewhere that this would have been done in any other Department. There is a danger that this is being made too much of an educational preserve. It is not very much to ask that in such circumstances as I have envisaged, or even in circumstances where the Secretary of State is imposing his will on one area, the Secretary of State should make regulations which would be made by Statutory Instrument, and that Statutory Instrument would be laid before the

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House. This is all the Amendment asks for and I commend it to the House. I beg to move.
Lord HUGHES: When the noble Lord, Lord Drumalbyn, withdrew the Amendment which he put forward at the last stage to seek to accomplish this purpose on the grounds to which he has referred, that it was technically defective, he indicated that he would come back to it again at this stage, and if I recollect rightly I said I thought it was unlikely that I would change my mind at this stage. I must admit that, having read the Amendment that was put forward, and having listened to what the noble Lord said, my forecast of my attitude proved to be correct. It would be quite new to seek to involve Parliament in matters of detail of this kind. Twenty years ago the Education (Scotland) Act 1949 empowered the Secretary of State to require an education authority to fix for their area two or more fixed dates for commencing school attendance, and three or more fixed dates, by reference to which, dates for terminating school attendance should be ascertained. There was nothing in that Act about regulations or orders to govern these matters and nothing at all about prior consultation; nor was anything of the kind suggested in either House when the 1949 Act was under consideration.
The noble Lord might well say that this is the other way; that it is one thing to have two or more and it is a totally different thing to reduce it to only one. The important thing is that what we are seeking to do is to prevent a mythical foolish Secretary of State in the future from doing something silly, and it did occur to Parliament in 1949 to have regard to the fact that they might have an irresponsible Secretary of State who might regard two or more, or three or more, as being the justification for having a multiplicity of commencing or leaving dates. Might I suggest that the one is no more unlikely to foresee than the other.
The noble Lord has referred to his own past experience in the matter and he must know that the very wide powers given in the 1949 Act were not so abused by the Secretary of State; nor did the noble Lord or his friends when they were in office see any risks in this matter. They did not seek to amend the Act in order
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to lay on any future Secretary of State the restriction which he now proposes. The only Amendments of substance which have been made to the Act of 1949 were made in 1962 and then by the present Bill. They have both been designed to ensure that the number of leaving and commencing dates should be reduced in the intersts of the education of pupils. It seems to me, as I have said already, inconceivable that a Secretary of State would act irresponsibly in reducing the number of leaving dates to one.
However, let us suppose, for the sake of argument, that some future Secretary of State does wish to act in a foolish way. The implication of the noble Lord's Amendment is that he could be obliged to act by means of an Instrument subject to annulment. There are other means open to Parliament, and other restraints which Parliament can impose on any Minister who acts in an arbitrary or unreasonable way. He can be questioned and his actions debated, and if need be censured in this House or another place. In my view, the pressure that Parliament can exert through these means would in practice be at least as effective in curbing a mythical foolish future Secretary of State as the formal annulment procedure. If a Secretary of State did something of this kind which was not generally acceptable to the people of Scotland, he could not for one moment think that, because there was no need to lay an Order before Parliament, the matter would be completely hushed up. The possibility that there is no such Order to be annulled would probably create an even greater number of means of getting at the Secretary of State than the simple procedure which the noble Lord calls for.
It is not because I am in disagreement with him about the desirability, if this matter does arise, of it being capable of careful examination; it is because I do not wish in this Bill, any more than in other Bills, to see something put in which serves no useful purpose. For these reasons I hope that the noble Lord will feel that perhaps in another way he has helped to make it more difficult, perhaps impossible, for any Secretary of State in the future to do the sort of thing which he seeks to safeguard against even though this Amendment is not made to the Bill.
Lord DRUMALBYN: I thank the noble Lord for having replied in such a reasonable and disarming way. I think he felt, reading between the lines, as one might say, of what he said, that there was a real difference between having two or three school leaving dates and one. If you had only one school leaving date the effect would be that a great many people would come on to the labour market at one particular time, and only one time, in the year. This is not only an educational matter. That is why I thought it was appropriate that, if the Secretary of State wanted to avail himself of this power here, it would be well for him to have an opportunity to lay a Statutory Instrument before the House and so give the House an opportunity to debate it.
I quite appreciate that if he acted without consultation or without sufficient consultation it would be possible for him to be censured. With respect to the noble Lord, I still feel that this would have been the more normal course. I feel that different considerations applied in the 1949 Act, although I dare say that if we had looked back we should have found that the Opposition suggested that this should be made a matter of reference to Parliament. But, in all the circumstances, I certainly should not wish to press the Amendment, even though the Division Bell might bring a great majority to my rescue, because I realise that the Government have made up their mind, and if I did this the only effect would probably be to have the other place disagreeing. That being so, on a matter of this character I am very ready to rely on the assurance which the noble Lord has given; and I have to confess that a great deal of what he said was common sense. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Schedule 2 [Minor and consequential amendments]:
Lord HUGHES Lord HUGHES moved Amendment No. 2:
Page 43, line 17, at end insert—
(". In section 91 (incidental expenses of education authorities)—

(a) in subsection (1), for the word 'duties' there shall be substituted the word 'functions';

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(b) in subsection (2), at the end there shall be inserted the following paragraph:—

'(d) expenses incurred by the parent of any child in connection with any medical or dental inspection, or any medical or psychological examination, of that child, or by any young person in connection with any medical or dental inspection of that young person, under any provision of this Act'.")
The noble Lord said: My Lords, the effect of this Amendment is to ensure that the Secretary of State has power to make regulations sanctioning the payment by an education authority of expenses incurred by a parent in connection with medical and psychological examinations under Clause 10 of the Bill, or by a parent or young person in connection with medical and dental inspections under the 1962 Act and Clause 9 of the Bill. The first part of the amendment, which changes "duties" to "functions", is necessary because authorities have powers as well as duties in this field (for example, powers to require parents to submit their children to medical and dental inspections), and the word "functions" covers powers as well as duties. The second part of the Amendment is the substantive part specifically defining the expenses which can be authorised by regulations.
In the course of the discussion of the Amendment which the noble Lord, Lord Drumalbyn, put down with the same intention on Report, he expressed his concern that the scope of Section 91 might not be wide enough to cover payments to parents escorting children to medical and psychological examinations in connection with their ascertainment for special education and on similar occasions. In reply, I said that the Government proposed to make regulations under the section to cover those payments. I also pointed out that the noble Lord's Amendment was not quite wide enough, because it did not cover them all.
I never lightly pass over Amendments of this kind put forward by the noble Lord, Lord Drumalbyn. It will therefore not surprise him to know that I have given a lot of consideration to this matter since the last stage. We are all agreed that these payments ought to be made in appropriate circumstances, and none of us would wish the power of authorities to put them through to come into question because of any technical flaw in the Statute. Although we think it is

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most unlikely that any regulations which we may propose to make would be challenged, I have decided that it would be wiser to make assurance doubly sure and to put their powers beyond all possible doubt. For these reasons, this Amendment has been tabled. It covers all the medical, dental and psychological examinations and inspections which may be held under the Bill or under the Act. I am grateful to the noble Lord, Lord Drumalbyn, for having raised this issue in the first instance, and I am sure that this Amendment which really has been inspired by him, will be welcomed by your Lordships as an improvement to the Bill. May I say, in relation to the last Amendment, that I was not in any doubt about the noble Lord merely withdrawing it because of the scarcity of support that he had on the Benches opposite. I understand that there are massed battalions elsewhere which would have rallied to his aid.
Lord DRUMALBYN: My Lords, I do not wish to delay the House, but I should like to express my gratitude to the noble Lord for having gone into this matter so fully to meet the point that I had in mind, and, indeed, for having gone even a little further than that.
On Question, Amendment agreed to.
Lord HUGHES: My Lords, I think that in some respects this Bill is the better for the careful consideration which it has received in this House. That is only what we are entitled to expect. I should like to thank, in particular, the noble Lord, Lord Drumalbyn, for the close scrutiny to which he has subjected the Bill and for the suggestions that he has made for its improvement, evens though I have not always felt able to accept them. In one important respect, however, the Bill has been marred by your Lordships. I refer, of course, to the decision taken in Committee to permit the continued payment of fees by parents in those education authority schools where fees were being charged last November. I will not say any more than that it may well be that another place will find it difficult to accept that the necessary reform which was embodied in the Bill should be postponed. That was the only point on which there was serious disagreement in your Lordships' House. The Bill, as I said on Second
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Reading, is a very useful reforming measure, and it is with pleasure that I beg to move that the Bill do now pass.
Moved, That the Bill do now pass.—(Lord Hughes.)
Lord DRUMALBYN: My Lords, I should like to join the noble Lord, Lord Hughes, in commending this Bill to the House. As he says, there was one major point of disagreement. We would not agree that our Amendment mars the Bill. I should think that it saves the Bill from a great mistake, and I remain hopeful that another place will agree wi: h us rather than with the noble Lord.
On Question, Bill passed, and returned to the Commons.

AGE OF MAJORITY (SCOTLAND) BILL [H.L.]
Lord HUGHES: My Lords, I beg to move that the Commons Amendments to the Age of Majority (Scotland) Bill be now considered.
Moved, That the Commons Amendments be now considered.—(Lord Hughes.)
On Question, Motion agreed to.

Commons Amendments
[References are to [Bill 90] as first printed for the Commons.]
[Nos. 1 and 2.]
Clause 1, page 2, line 26 at end insert—
"(9) Section 4 of the Entail Amendment (Scotland) Act 1875 (consent to disentail may be given at 21) is hereby repealed."
Schedule 1, page 3, leave out lines 25 to 27.
Lord HUGHES: My Lords, Amendments Nos. 1 and 2 go together and, with the permission of the House, I beg to move that this House doth agree with the Commons in the said Amendments. I need not take up too much of your Lordships' time with these or, indeed, with the subsequent Amendments, all of which are of a minor drafting nature. The purpose of Amendment No.'.. is to repeal Section 4 of the Entail Amendment (Scotland) Act 1875, which is now spent and should not therefore have been included in the Schedule to the Bill.

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Amendment No. 2 corrects this error by removing the reference to Section 4 of the 1875 Act from the Schedule. I beg to move.

Commons Amendment
[No. 3.]
Schedule 1, page 3, line 35, at end insert—

"c. 44.

The Customs and Excise Act 1952.

Section 244 (2) (a).

Entry invalid unless made by person over 21."

Lord HUGHES: My Lords, I beg to move that this House doth agree with the Commons in the said Amendment. This Amendment seeks to add to the list in Schedule 1 of statutory references to the age of 21 which are to be changed to 18, a further provision which came to light after the Bill had been introduced. The provision in Section 244 (2) (a) of the Customs and Excise Act 1952 provides that no entry on the fficial register containing particulars of the premises where

Commons Amendments
[Nos. 4 and 5.]
Schedule 1, page 4, line 25, at end insert—

1946 S.R. & O. 1156. The North of Scotland Hydro-Electric Board (Borrowing and Stock) Regulations 1946.

Regulation 36 (1) and (2).

Stock held by persons under 21.

1949 S.I. 751. The Gas (Stock) Regulations 1949.

Regulation 19 (1) and (2).

Stock held by persons under 21.

1953 S.I. 42. The Local and Other Authorities (Scotland) (Transfer of Stock) Regulations 1953.

Regulation 12 (1) and (2).

Stock held by persons under 21.

1955 S.I. 1752. The South of Scotland Electricity Board (Borrowing and Stock) Regulations 1955.

Regulation 30 (1) and (2).

Stock held by persons under 21."

line 28, at end insert—

"1957 S.I. 2228. The Electricity (Stock) Regulations 1957.

Regulation 22 (1) and (2).

Stock held by persons under 21.

1963 S.I. 935. The Exchange of Securities (General) Rules 1963.

Rule 1 (1).

Definition of "minor",

1965 S.I. 1420. The Government Stock Regulations 1965.

Regulation 14 (1), (2), (3) and (5).

Stock held by persons under 21."

Lord HUGHES: My Lords, with the permission of the House I should like to deal with Amendments Nos. 4 and 5 together. I beg to move that this House doth agree with the Commons in the said Amendments. These Amendments, like Amendment No. 3, add to Schedule 1 a number of statutory provisions requiring amendment as a consequence of the lowering of the age of majority to 18.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Hughes.)
On Question, Motion agreed to.
an excise trade is carried on shall be valid unless the person making it is 21 or over. A reduction to 18 in this age limit is consistent with the policy underlining the Bill, and this would be the effect of the Amendment. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Hughes.)
On Question, Motion agreed to.
Rule 1 (1) of the Exchange of Securities (General) Rules 1963 defines a "minor" by reference to the age of 21 years, and all the other provisions relate to the holding of stock by persons under the age of 21. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Hughes.)
On Question, Motion agreed to.

MILK (EXTENSION OF PERIOD OF CONTROL OF MAXIMUM PRICES) ORDER 1969
3.20 p.m.
The MINISTER of STATE, FOREIGN and COMMONWEALTH OFFICE (Lord Shepherd): My Lords, in the absence of my noble friend Lord Beswick, I think that the best thing is not to move this Order for approval, and to proceed to the next business.
Lord HUGHES: My Lords, it might be for the convenience of the House if I were to move the approval of the Milk Order. This Order implements the Minister's decision that the powers to control milk prices under the Emergency Laws (Re-enactments and Repeals) Act 1964 should be renewed for a further five years from the end of 1969. The Order will be made by Her Majesty in Council, but a draft must first be approved by Affirmative Resolution of each House. This is merely continuing for a further five years the position which has existed for some time. I would doubt very much whether any noble Lord would wish at this stage to object to a continuation of the procedure which has proved so satisfactory over a number of years. I beg to move.
Lord BELSTEAD: My Lords, the House thanks the noble Lord, Lord Hughes, for getting on with the milking at such short notice. There is a point which my noble friend Lord Nugent, who unfortunately is unwell, has given notice to the noble Lord, Lord Beswick, that he would very much like to put. With the noble Lord's permission, perhaps I might be allowed briefly to explain the point which is troubling the noble Lord, Lord Nugent. On this side of the House, we accept the necessity for a continuation in the price control of milk. Apart from meat, if we lump meat together, milk is the largest individual component in the whole of the food price index, and I would suggest that control is also needed because the efficiency of the market has been achieved by wholesaling only through the Milk Marketing Board, and by retailing through a small group of large concerns.
The point which is troubling my noble friend is this. The main output of milk relies on the direct sale of liquid milk,
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and the output for by-products (butter and cheese, for instance) claims less than half of the market. In September rising costs are going to force up milk prices by ½ d. a pint. During 1968-1969 there has been in fact a reduction in liquid milk consumption, partly because of the removal of free secondary school milk, and partly, possibly, because of the increase in the price of welfare milk. It is fair, I think, for us on this side of the House to be apprehensive of the effect of the September price increase on personal consumption, which is something which in fact has remained pretty steady. There is also every reason to believe that the trend of rising costs will continue, and this may well cause consumption to continue to fall. The problem is that the Government's expansion programme aims for an increase in beef production. This must mean more dairy cows for more beef calves, and a consequent increase in the national supply of milk.
May I therefore ask Her Majesty's Government whether the time has not come for the Minister to reconsider the milk price structure so as to give a bigger proportion of the market to the manufacturing and processing of milk? Presumably such a reconsideration would mean a review to include a thorough replanning of our imports of manufactured milk products. Unless this is done, it is to be feared, we think, that the Government's expansion programme may lead to the production of large, undisposable surpluses of milk. Costs and prices can only rise in this particular industry, where the small farmer is finding profit margins getting smaller and smaller. During the past 15 ye?rs the rise in the wholesale price of milk has been only 7 per cent., whereas the papers this morning, I think, show us that the rise in the cost of living in the past four years is over 21 per cent. May I ask the noble Lord whether the Government will reconsider the price structure for milk before possible further falls in consumption, and increases in production, result in unusable surpluses, which I am sure every one would regret?
3.25 p.m.
Lord BESWICK: My Lords, I am very sorry to hear of the indisposition of the noble Lord, Lord Nugent, and I hope he is soon able to be with us again. I am sorry, too. that I was otherwise engaged when this Order came before the

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House. I am grateful to my noble friend Lord Hughes for stepping into the breach, although he has an interest in this too, of course, from the Scottish point of view.
The problem that the noble Lord, Lord Belstead, put to us and which, as he rightly said, the noble Lord, Lord Nugent, had also mentioned to me, is a real one. I do not underestimate it at all. There is a difficulty in finding a solution. I think to some extent he over-exaggerates the inadequacy of the demand for liquid milk. It has not been falling; there is not a falling trend. There was a temporary reduction last year due to the fact that the free milk for secondary schools was discontinued. That meant a temporary drop in demand. So far as the per capita consumption is concerned, there has been a very slight rise.
The noble Lord speaks of the fact that the cost of milk has gone up so little over the past few years; and this is so. Dairy farming is undoubtedly one of the most efficient sectors of the whole of our economy. The housewife is really getting a bargain when she pays what she does for her milk. If there were to be a further increase yielding a bigger return to the dairy farmer, the impact on the demand would, it is thought, be serious. We are therefore faced with this very real problem of how to stimulate demand and, at the same time, how to give a proper return to the dairy farmer, without reducing demand.
The one solution to which I find so many people coming rather readily is curtailment of importation of milk products. I wish it were possible to give the noble Lord an undertaking that there will be a further curtailment of the importation of milk products, but I cannot give him that assurance. As he knows, we have gone part of the way to meeting this proposal by getting a voluntary agreement. That has been very useful. I hope it will go some way to help in this matter. There is, however, a difficulty with all the international trade agreements, and with our need to export manufactured goods, which we cannot expect to do if we are going to reduce the importation of products of other countries. With these difficulties, I think the effort to get the voluntary agreements has gone about as far as it is possible to go. The problem, as I have
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said, is a real one. It is understood by the Department concerned, and I can assure the noble Lord, Lord Belstead, and, through him, his noble friend, that if it is possible to do more, either to step up liquid milk consumption—and the Milk Marketing Board are doing a lot by their various publicity campaigns—or to secure by voluntary agreement a restriction on the importation of milk products, then that will be done.
Lord WALSTON: My Lords, may I ask my noble friend just one question? He mentioned the efforts that the Government have made to restrict the importation of certain processed milk products. Could he not ask his right honourable friend to look very urgently at the question of reducing the costs of the distribution of retail milk? We still use very much the same methods to-day as we used thirty years ago in distributing the milk. Naturally, it has been impossible, even with the most efficient operators of that industry, to cut down costs beyond a certain point. With the great extension of multiple stores, self-service shops, vending machines, et cetera, would it not be possible to press ahead with making retail milk available through self-service or vending machines at a price very much lower than it must of necessity cost when it has to be delivered on the doorstep every morning? I suggest that as a way of reducing the cost to the housewife without in any way interfering with profit margins, and thereby stimulating demands for liquid milk.
Lord BELSTEAD: My Lords, before the noble Lord replies again, may I thank him for his very full answer. We accept that the total output for consumption is rising slightly, but the worry on this side of the House is that the liquid consumption, which is the basis of the market, is estimated to be a falling quantity. As the noble Lord told the House, the voluntary agreement on processed imports is something which does not work too well. Therefore, although supporting the Order, we shall continue to worry.
Lord BESWICK: My Lords, if I may have permission to speak again, I accept the noble Lord's promise to keep on worrying, and I am sure that what is said from that side of the House, on this subject at any rate, will be constructive. On

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the question of the distribution cost, I do not think there is the room for economy which my noble friend Lord Walston speaks about. As we know this matter was referred to the Prices and Incomes Board, who went into it with some care. It is not right to say that the retail distribution of milk is uneconomic or inefficient. On the contrary, it is highly efficient.
The proposal that, instead of delivering from door to door, the milk should be available, as it is on the Continent, in the shops, so that one has to go and fetch it, sounds attractive if one is thinking simply of distributive costs. But the unanimous view of all the people with whom I have discussed it is that, if the housewife had to go and collect it from the shop, the consumption of liquid milk would fall to a serious extent. The fact that it is placed on the doorstep is one of the best guarantees we have that the demand will be a stable one. As for sales through vending machines, this is something which has been encouraged. The trend is slightly upwards, but again it is not all that attractive to the housewife.
I disagree with the noble Lord when he suggests that nothing has been done to change the method of distribution in the streets. I should have thought that rationalisation in the retail milk distributive trade is one of the most efficient pieces of rationalisation that we have seen since the war. Instead of four or five milkmen coming up the street, there are now only two—one commercial firm and the local co-operative society. This seems to me to be as far as one can expect to take rationalisation. Nevertheless we must not be complacent about this. I take note of what my noble friend has said, and again assure the noble Lord, Lord Belstead, that although butter and cheese are already controlled, they form, after all, two-thirds of the milk products market. If more can be done by voluntary agreement with the other third, it will be done.
Lord RITCHIE-CALDER: My Lords, may I ask my noble friend whether he accepts the statement made by the noble Lord, Lord Belstead, that there is such a thing as unusable milk? It seems to me that the world is desperately short of protein and we are talking here
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about whether we can sell through a mechanical cow, when in point of fact we should be thinking how we cat dispose of the surplus milk that we have.
Lord BESWICK: My Lords, if I may speak again, with permission, I do not disagree with what my noble friend says, but I think it would be extending the limits of this Order rather considerably if I were to go into the whole of that issue.
On Question, Motion agreed to.

OVERSEAS REPRESENTATION: THE DUNCAN REPORT
3.35 p.m.
Lord SHACKLETON: My Lords, with your Lordships' permission I should like to repeat a Statement which has been made by my right honourable friend the Secretary of State for Foreign and Commonwealth Affairs in another place on the Report of the Review Committee on Overseas Representation which has today been laid before the House. The Statement is as follows:
"The House will recall that last August I invited Sir Val Duncan, Sir Frank Roberts and Mr. Shonfield to report urgently on the means of obtaining the best value for money from our overseas representation, having regard to our foreign and defence policies and the economic situation and all that these imply for Britain's role in the world.
"Their Report is far-ranging and draws many important conclusions. These concern a wide variety of matters, from broad issues of policies and priorities to quite detailed points of management. Some of them concern questions which lie outside my direct responsibility. Some are very much in line with thoughts and practices which we ourselves had been developing; others—and I very much welcome this—are novel and suggest new departures in our ways of handling the problems concerned.
"While the Government warmly welcome the Committee's general approach, my colleagues and I feel that before we can give a specific endorsement to their conclusions, we need to go further into their probable consequences, their implications for the

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standard and range of our services overseas, and their effect on our foreign policy as a whole. The publication of the Report will give many persons inside and outside this House an opportunity to consider these issues. I do not think it would be right for the Government to commit itself too deeply before they have had the benefit of this opportunity. I have, therefore, initiated studies and consultations on the Report. These include discussions with the appropriate Staff Associations.
"At the same time, I should like to say that I very much welcome the tribute which the Committee has paid to the high standard of our overseas services, and particularly to the competence and adaptability of Her Majesty's Diplomatic Service.
"I am sure that the House will join with me in thanking Sir Val Duncan and his colleagues for devoting so much of their time to this important task which they discharged speedily and thoroughly. They have produced a penetrating and objective survey, which has already had a valuable effect in stimulating our own consideration of these problems and which will be an essential guide through the challenging years ahead."
The Earl of DUNDEE: My Lords, I should like to thank the noble Lord the Leader of the House for repeating this Statement made by the Foreign Secretary. The noble Lord will appreciate that it was only three minutes ago that this Report became available in the Printed Paper Office of your Lordships' House, and apart from any of your Lordships who may have seen it in advance as members of the Government there cannot be any Member of your Lordships' House who has so far had the least opportunity of seeing what is in it. The noble Lord's Statement has really consisted of saying that the Government are going to study the Report and that they do not think they can make up their minds what to do about it until they have initiated studies and consultations upon it.
It is rather like the famous commercial company which was formed at the beginning of the 18th century, at the same time as the South Sea Bubble, which sent round a circular, asking for
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money to be invested for a project "which shall hereafter be revealed". But having, in the last minute or two, glanced through the headlines of this Report I see that it covers the subject of commercial representation overseas and also of broadcasting. I hope the noble Lord the Leader of the House will agree that these are two of the most important subjects to think about when we are considering the improvement of our overseas services. We may not yet have proceeded far enough in giving equal status to those overseas representatives whose business it is not only to conduct social and diplomatic formalities but to advance British export trade. Similarly, there is a very great deal which can be done to improve and amplify the effectiveness and the quality of overseas British broadcasting services, particularly in respect of getting new and more powerful stations at convenient distances for those parts of the world where we want our voice to be heard.
Lord GLADWYN: My Lords, since, unlike the noble Earl, I have not even seen this Report, it is clearly impossible for me to express any opinion on its merits. Perhaps I might just say that the evident quality of its authors must lead us to suppose that, as the Government appear to think, it is a valuable and constructive study.
May I say that, as I understand it, there are now several long-term Reports under consideration by the Government, including of course Redcliffe-Maud, and I have no doubt that these Reports will take a long time to consider, at any rate before the Government are in a position actually to draw up proposed measures based on them. But I should have thought that the Duncan Report, though naturally it will require considerable consideration at some time, will not take as long as the others I have mentioned—perhaps only a month or two. Would it not be in any case desirable—I merely suggest it—for the Government to arrange a fairly early debate in this House on the Report? There are, after all, many experts here on the various aspects of foreign affairs with which the Report deals, and it is conceivable that their combined wisdom may be of some value to the Government before it finally makes up its mind on what to do about the Duncan Report.
Lord SHACKLETON: My Lords, I thought the noble Earl's remarks were a little odd, but he was only commenting on what is a rather odd traditional procedure. I have always been impressed by the ability of the Opposition to make bricks without straw, other than a sight of the Statement, which may or may not contain much information. I fully appreciate his difficulty. Against that background I agree with the noble Lord, Lord Gladwyn, that this would be an eminently suitable subject for discussion in your Lordships' House when your Lordships have had a chance to read the Report. I also feel that even summarising the headlines in a Report, as we sometimes do in Statements, does not really help until noble Lords have had a chance to look at the Report for themselves. But we are observing the customary courtesy of announcing its publication and expressing appreciation to the authors. Having read the Report, I must say that I am very impressed by the rapidity and thoroughness of the work.
The noble Earl raised one or two important points based on his knowledge; and of course the questions of the B.B.C. and commercial representation do feature very largely in the Report, and I think he will be interested in what it has to say on these issues. There is a reference to the importance of audibility and strength of broadcasting, to which the noble Earl referred, and the Government will review the arrangements in this field. On the commercial side, I think it is not perhaps appreciated just how much the Foreign Service has developed its commercial services. I have been impressed, and I am sure other noble Lords have, by the real enthusiasm of the Diplomatic Service and others of our representatives overseas in fulfilling their commercial responsibilities.
Before sitting down, I would also myself like to pay a personal tribute to the Foreign Service, which in the past has sometimes been thought of as an easy activity for rich men. It certainly is not an easy activity. In my times abroad I have been struck not only by the determination and thoroughness but, in some situations by the actual courage with which they, and their wives and families, have faced their often arduous duties.

HOUSING BILL
3.45 p.m.
Lord KENNET: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now re solve itself into Committee.—(Lord Kennet.)
On Question, Motion agreed to.
House in Committee accordingly.
[The Baroness Emmet of Amberley in the Chair.]
Clause 1 [Improvement grants, standard grants and special grants]:
On Question, Whether Clause 1 shall stand part of the Bill?
Lord BROOKE of CUMNOR: On Clause 1 I have an important question to put to the noble Lord, Lord Kennet, of which I have given him notice. Clause 1 deals with the grants made by local authorities. If I understand the White Paper and also the Explanatory Memorandum aright, the Government wish local authorities to make a considerable drive in developing the improvement of older houses by means of grants, but at the same time wish these to be contained within a ceiling of public expenditure, both local and central.
My question to the noble Lord is, how is this to be managed? Is it proposed that the Government shall ration local authorities individually as to the amounts that it will authorise them to pay out in grants? If not, may we not find it happening that some local authorities, encouraged by the Government's proposals and its legislation, will go ahead on a big scale, and then it will be found that within the ceiling there is not enough money for other local authorities which have not been so active initially? That would be a disastrous situation because it would mean that the improvement was unfairly balanced as between one part of the country and another. But it is a possible situation that might arise, because it is well known that up to now some local authorities have been much more ardent in pushing improvement grants than others. Indeed, I fear there may still be some authorities which, as a matter of principle, do not make discretionary improvement grants. My main question is to ask the noble Lord whether

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he will explain further the financial implications of this Clause in relation to the overall ceiling which I understand the Government are laying down.
Lord KENNET: From now on the efforts and resources that a local authority puts into improvements will be regarded as an integral part of its housing programme; so that "rationing" is not quite the right analogy. The new improvement policies will develop gradually from now with an increasing momentum. There is No intention at present of trying to restrict the number of improvement grants made. Rather, we think that authorities will, in the light of their continuing assessment of housing needs of their own districts, place increasing emphasis on improvements. Some authorities will find that the need to build new houses has diminished; others will want to build large numbers of new houses and carry out ambitious improvement programmes as well.
The need for a high level of new building will, of course, continue for many years. In the Government's best estimates, it will follow from the intrinsic facts of the housing situation that an increasing programme of improvements can be accommodated within the current total levels of public expenditure on housing. Were it not for one fact, I would say that improvement expenditure from now on is simply wrapped up in general housing expenditure and is treated exactly the same, including the priority housing authorities and so on. But the one fact that makes that not quite true—although it is mainly true—is that the standard grants remain payable on demand and are thus uncontrollable either by central or local financial control.
Lord BROOKE of CUMNOR: I am grateful to the noble Lord for that helpful reply. I think it would have been very unfortunate if local authorities felt that they were operating within an allocation scheme and might run up against limits and that thereafter they or other local authorities might be discouraged by the Government from making discretionary grants. I believe it is wholly right at this stage in time to press forward with the grants, both standard and discretionary, and I hope that matters will work out financially as the noble Lord has indicated.
Clause 1 agreed to.
Clause 2 [Improvement grants]:
Lord BROOKE of CUMNOR Lord BROOKE of CUMNOR moved Amendment No. 1:
Page 3, line 22, at end insert ("or has a contract for the acquisition of such an interest, notwithstanding that that contract may be contingent upon the approval of an application for an improvement grant by the local authority").
The noble Lord said: I beg to move Amendment No. 1. This is an Amendment to subsection (6) of Clause 2. Subsection (6) says that
"a local authority shall not entertain an application for an improvement grant"—
I rather like that word "entertain", but I know what it means—
"unless they are satisfied that the applicant has"—
a firm interest in the property. My Amendment is designed to overcome a difficulty which I can foresee occurring. A would-be purchaser or would-be developer may feel that it would be an excellent plan if a small terrace of older houses was bought and put right with the help of improvement grants; that would be profitable from the developer's point of view, highly profitable from the tenants' point of view, and, I should judge, desirable from the Government's point of view, because that is exactly the kind of thing which the Government wish to encourage by this Bill.
Yet it seems to me that such a purchaser or developer would be frustrated unless we amend this subsection, because such a person will not go forward unless he has a firm assurance that his scheme will qualify for improvement grant. I would remind your Lordships that these grants are discretionary, and so the local authority are not bound to grant them. His scheme will break down unless he can ascertain that the local authority will approve his proposals for improvement grant; in other words, that they will favourably entertain his application. That is exactly what the local authority are prevented from doing by subsection (6), because at that stage he has not got the interest in the land which is defined in that subsection.
The object of my Amendment—I need hardly say that I should be only too glad if the Government would help me with the actual drafting of it—is to enable the local authority to give a reply

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and a promise of improvement grant to someone who has a contract for the acquisition of a terrace of houses like that, the contract being contingent upon the approval of an application for an improvement grant. I hope I have convinced the Government that this is a genuine difficulty. I am not trying to upset the main purposes of the clause, with which I agree. I am simply seeking to find words which will enable the provisions to cover the kind of situation which I have described and which may well arise in many places. I beg to move.
3.53 p.m.
Lord KENNET: One cannot but agree with the noble Lord's desire to make every thing easier for everybody and to keep it as flexible as possible, but I think the Amendment is not necessary for a reason I shall give, and it would bring in one or two undesirable side effects which are not very grave but in my submission add up to a case for not amending the Bill.
It is not necessary because the noble Lord said that he wants contracts which are at present contingent upon the grant, to be given grants which are contingent upon the contract. What happens now is that the prospective purchaser goes to the local authority and says, "If I purchase that house or that line of houses will you give me an improvement grant on it or them?"; and the local authority say, "Yes, provided you do it in the way we shall propose," and they all have a general discussion about what sort of way that should be. We have never heard of any complaint about that. There have been no complaints about local authorities not agreeing in the end to the proposal. So it seems that the present situation works well, which is a prima facie reason for continuing it.
The side effects that I mentioned if we were to do it the other way round, as the noble Lord desires, is that the prospective purchaser would have to go to the cost of getting plans prepared and specifications drawn up and to obtain probably two estimates from builders in order to support his application. He would also have to ask the local authority to make a formal declaration that it would give a grant if his purchase was completed. If then, for some reason or other, his contract falls through, it is
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wasted effort and money for the prospective purchaser.
The other side effect is that I think it might create a market in contingent grants. You might get people for a. consideration, selling the certificate in regard to the contract, on the understanding that they are to get a grant on it. Of course, this would be on a small scale, but there is something analogous to the market in planning permission in it and, as I pointed out, it is unnecessary. Secondly, it would have these two minor side effects. I think that, on the whole, it would be wise to leave the Bill as it stands, and I hope that on reflection the noble Lord will agree with me.
Lord BROOKE of CUMNOR: I know that the word "contingent" appears in my Amendment, but I do not believe in the second of the contingencies that the noble Lord mentioned: that a market might grow up in these contingent contracts. In the light of what the noble Lord has said I am inclined to think that it all comes back to that peculiar word "entertain". My concern was that the local authority should not be put off by subsection (6) from giving an answer to the would-be purchaser as to whether he would be likely to get an improvement grant. The noble Lord is saying that, despite the terms of subsection (6), it would be quite in order for a local authority to give an informal indication to a would-be purchaser that if he purchases and if he goes forward with plans such as he has informally submitted to the local authority, he will be likely to get a grant. I do not want to press this Amendment. I think there is agreement between the noble Lord and myself that it would be most undesirable if the law were found to be stopping the kind of development that I have mentioned He seems confident that it will not. In those circumstances, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 2 agreed to.
On Question, Whether Clause 3 shall stand part of the Bill?
Lord BROOKE of CUMNOR: For the purpose of reassurance, may I ask whether the noble Lord will tell us how the Minister intends to use his power of

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specification under subsection (2) of this clause? The wording is
"for such period and conform with such requirements with respect to construction and physical conditions and the provision of services and amenities as may for the time being be specified for the purposes of this section by the Minister."
Has the Minister in mind any immediate novelties in what he will specify, or shall we be going on with improvement grants on the same broad basis as before but for the changes that are made by this legislation?
Lord KENNET: The Minister intends to stick to the present 12-point standard of what is to be done, which has stood the test of time and is well understood, but he intends to give local authorities greater discretion to vary it. They will themselves be able to waive requirements if it is impracticable to satisfy them. At present they need the Minister's approval to do this. Under existing law, authorities cannot make discretionary improvement grants for properties with a life of 15 years or less. There is now under the Bill no restriction as to estimated life, although housing authorities will be expected to consider whether in the case of short-life houses grants under Clause 9 for the provision of standard amenities would not sometimes be more appropriate than discretionary grants. We can return to this point again on Clause 9. All these points will, of course, be put in the circular under the Bill in the usual way.
Clause 3 agreed to.
Clause 4 agreed to.
Clause 5 [Amount of improvement grant]:
4.1 p.m.
Lord AIREDALE Lord AIREDALE moved Amendment No. 2:
Page 4, line 38, at end insert—
("( ) Where a local authority approve an application for an improvement grant, and it appears to the local authority that the Minister may be willing to make a special grant towards the cost of the works, the local authority shall refer the case to the Minister, and shall inform the applicant that the case has been so referred.")
The noble Lord said: I should explain at the outset that, although this Amendment makes use of the expression "a special grant", I am not referring
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to the special grant which is mentioned in Clause 1 of this Bill, "a special grant" in respect of houses in multiple occupation. The sort of special grant I have in mind for the purpose of this Amendment is the one mentioned in Ministry of Housing Circular No. 41 of 1965, in paragraph 6. The first sentence of that paragraph explains the sort of matter that I am seeking to discuss. It says:
"The Minister is also prepared to consider applications for the payment of a grant higher than the normal maximum where there is a need to replace existing floors of rammed earth, bricks, or stone flags by new floors in order to overcome rising dampness."
That is the kind of special grant that I have in mind. It seems to me that at present there are too many discretions standing between the Minister and the applicants, and I do not believe that enough applications for special grants of this kind are getting through to the Minister. I have an experience of my own, which I do not propose to enlarge upon, which seems to me to illustrate that this is a fair point to make.
The first discretion, of course, is the discretion of the local authority whether to make a discretionary grant at all. At the other end of the scale, if an application to the Minister for a special grant is made, there is obviously the discretion of the Minister whether he will, or will not, make a special grant. Obviously there is no compulsion on the Minister to make a special grant—there cannot be. But in the middle, between the exercise of these two discretions, is there a discretion on the part of the local authority whether or not to apply to the Minister for this special grant, even in cases where the local authority have every reason to suppose that the Minister might be willing to make a special grant?
In the particular case I have in mind—it is a case of my own—I was put under a condition in a certain case to make certain floors damp-proof. I did not object to this at all. It was a very expensive operation but it was very necessary and a proper operation, and I did it. When I asked the local authority, "Will you now please apply to the Minister for the special grant referred to in paragraph 6 of the circular?" rather to my surprise the answer was, "No, we are not making an application". I am not trying to air a private grievance, but it seems to me wrong, where a local authority has, to

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begin with, imposed a particular condition which may attract a special grant from the Minister, that the local authority should be allowed to take upon itself not to forward an application to the Minister for this special grant. I should have thought that it made for great unfairness as between one applicant and another, people living in different parts of the country, if the practice in certain cases was that some local authorities never applied to the Minister for a special grant of this kind, and other local authorities always did.
I should like to see uniformity throughout the country in these matters, and the purpose of this Amendment, which I hope is considered by your Lordships to be pretty harmless, is merely to ensure that where the local authority have reason to suppose that the Minister might be interested in entertaining (to use that comic word again) an application for a special grant for a particular purpose, then they shall forward the application to the Minister and they shall inform the applicant that they have referred the case to the Minister.
The only thing I wish to add is that I do not understand how it is that members of the public are supposed to know about these special grants which are mentioned in Ministry circulars. Ministry circulars, as we know, are privately circulated to the housing authorities; they are not made available to members of the public. There is a leaflet which is made available to members of the public, of which I have the latest copy in my hand. It is called, Money to Modernise your home. It is prepared by the Ministry of Housing in collaboration with the Central Office of Information. I have searched this pamphlet, which has several pages, to find any reference to this particular special grant—which I should think would apply in a good many cases—for making floors damp proof, and I cannot find any reference to this, so I do not know how members of the public are supposed to learn about these special grants. If it were made obligatory upon local authorities to apply to the Minister for these grants in appropriate cases, and to tell the applicant that the grant had been applied for, then people would learn about it and some of them would get a pleasant surprise. I believe that the
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housing improvement scheme would get a fillip from this sort of thing because people would think it was being operated rather more generously than they had hitherto supposed. I am sorry to have spoken rather at length about this. I hope this Amendment will be considered at least harmless, and possibly useful. I beg to move.
Lord KENNET: The noble Lord states the matter accurately. There was a circular in which the Minister told housing authorities that he would entertain applications from them for permission to go above the existing links, especially with regard to replacing existing floors of rammed earth, bricks, or stone flags by new floors in order to overcome rising dampness. I think the noble Lord's intense interest in this particular sort of case has led him to draft something which is wider than he intends, and which is in any case unnecessary, because under the new grant system there is a maximum of £1, 000, instead of i.400, for discretionary grants; it has gone up two and a half times. We think there will be plenty of head-room for this sort of work without going to any special level for it.
If, on the other hand, one were to concede the right, as I think the coble Lord's Amendment would concede it, to every householder who is improving his house to demand that the local authority forward to the Minister any old request for a special grant—which could be for something quite fanciful of his own—I think this would deprive our local government system of a lot of its point. We have local councils to settle matters of this kind in accordance with their own wisdom, and if they simply do not think it is worth paying a special grant because of the circumstances either of the house or of the owner, then one cannot really require them to seek the Minister's decision on every case when an owner wants it.
I should add that the Amendment as drafted by Lord Airedale would appear to refer particularly to a kind of special grant which is already in the Bill and which is concerned particularly with the alleviation of conditions where there is multiple occupation. This, too, is a case where there might be a need for special grant. But my main point in inviting

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the noble Lord to withdraw his Amendment is that to put it in, to give anybody direct access to Ministerial decision on such small points, would rather drive a coach and horses through the devolution of authority which we seek to achieve in the modern age.
Lord AIREDALE: I am obliged to the Minister for his reply. I am sorry he thought that anything in my Amendment would entitle an applicant to have (I think these were his words)"any old fanciful application" sent to the Ministry as of right. That certainly was not my intention. What I say in the Amendment is:
"Where … it appears to the local authority that the Minister may be willing to make a special grant … "
If it were any old fanciful notion in the mind of the applicant, those words would not be fulfilled and the local authority would not therefore be required to forward the application and waste the Minister's time. So I did not think I was going to be let in for that sort of criticism. However, I do not think this is a matter of earth-shaking importance. I have aired it, and it may have done a little good. I beg leave to withdraw the Amendment.
Lord KENNET: Before the Question is put, may I say this? I do not want to be harsh to the noble Lord, but, of course, if the local authority does not itself think that a special grant ought to be made it is unlikely that the Minister will think that it ought to be made.
Lord AIREDALE: All I can say about that is that if the local authority has said, "You must, as a condition of getting any grant at all, replace flagstone floors with new damp-proof floors", and if the Minister has said in a circular that this very operation is a matter in respect of which he will entertain special grants, then I should have thought the local authority was on a very bad wicket indeed if they did not forward such an application to the Minister—and that is what I am complaining about. I am very tempted now not to withdraw this Amendment, because it looks rather as though the Minister has not cottoned on to what I was talking about from the beginning. I shall ask leave to withdraw it, but in view of the very last observa-
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tions of the Minister, which I must say I thought were very unfortunate indeed, I shall consider putting down a similar Amendment on Report. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 5 agreed to.
Clause 6 agreed to.
Clause 7 [Standing amenities]:
4.14 p.m.
Lord BROOKE of CUMNOR Lord BROOKE of CUMNOR moved Amendment No. 3:
Page 5, line 32, leave out from ("Minister") to ("and") in line 33, and insert ("shall review annually the amounts specified in Part I of Schedule 1 to this Act and may by order vary the provisions of that Schedule").
The noble Lord said: The point of this Amendment is to ensure annual review of the amounts of the standard grants which are set out on page 51 of the Bill. The concept of standard grants was first introduced in a Bill of mine in 1959, and I think that, broadly speaking, it may be said to have been successful. We now have a proposal here which will increase the total amount, if all the standard grants are claimed, from £155 to £200. The point I wish to put to the Government is that it would have been no bad thing if these amounts had been revised earlier, because as building costs rise it must follow that a maximum fixed in 1959 will be well out of date in 1969, and a maximum that is fixed now, in 1969, may be out of date before long.
I appreciate that in subsection (2) of this clause the Minister has power by order to vary the provisions of Schedule 1, and this presumably includes varying the amounts allowed for each of the standard amenities. My concern is that this should not be forgotten. I believe it would be valuable, and would assist the drive to get the standard amenities provided if the Minister were under an obligation to review the amounts annually. He could then use his power by order, if necessary, to vary the amounts. I beg to move.
Lord AIREDALE: I hope that this Amendment will be acceptable because it certainly could not possibly do the slightest harm.
Lord KENNET: I tend to agree that it would not do much harm, but time

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presses, in a Parliamentary sense, and we are anxious to get this Bill. So I am anxious, for purely tactical reasons—and I think I can say this to noble Lords on all sides of the Committee, because we all support most of this Bill—to get this Bill back to the House of Commons with as few Amendments as possible.
The noble Lord said he has moved this Amendment in order to make sure that the question of reviewing the standard grants is not forgotten. He invented the standard grants in 1959, and he and his friends, when in office, had power to change it at any time they wanted. Indeed, they must have considered whether to change it during the preparation and the passage of the 1964 Housing Act. It is equally true that my right honourable friend's predecessors, and he himself, having had power to change it, have not done so. But I think that the mere fact that it was not changed, although there was full power to change it over the last ten years by Governments of both sides, coupled with the fact that the noble Lord has not alleged that it should have been changed, suggests there is not really very much point in making an Amendment to ensure that it shall be formally examined, in a statutory sense, every year. It seems to me that it would be importing a certain amount of paraphernalia into the Bill by way of statutory procedure, which might be rather complex, for no return. It can be done by any Government whenever they want and will, of course (I speak for the present Government), be done automatically and continuously. We shall keep this under review even without the Amendment.
LORD BROOKE of CUMNOR: I sought to indicate that I thought these amounts ought to have been revised earlier than this by the present Government, if not by their predecessor. I agree, of course, that a review can take place without there being statutory provision for it, and I think I am satisfied by the noble Lord's final words, because I understood that he gave me an assurance that, whether or not these words appear in the Bill, the Minister will review the amounts regularly.
LORD KENNET: Yes.
Lord BROOKE of CUMNOR: If that is a firm assurance, then that suffices me, and I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 7 shall stand part of the Bill?
Lord AIREDALE: I understood the Minister to say in the debate on the Amendment to this clause that he was anxious to get this Bill back to the House of Commons with as few Amendments as possible. I note that we have 59 Amendments on the Marshalled List. I have done a quick count, and I think that 32 of them are Amendments down in the name of the noble Lord, Lord Kennet. So I take it that the noble Lord is hoping that at least 32 Amendments to this Bill will go back to the House of Commons.
Lord KENNET: The Committee is indebted to the noble Lord for his accuracy. I should have said "as few Amendments as possible likely to give rise to prolonged debate in the House of Commons."
Lord BROOKE of CUMNOR: I am grateful to the noble Lord, Lord Airedale, for raising this point. I cannot think that if I had decided not to withdraw Amendment No. 3 and it had been accepted by your Lordships it would have given rise to prolonged debate in the House of Commons.
Clause 7 agreed to.
Clause 8 agreed to.
Clause 9 [Conditions for approval of application for standard grant]:
On Question, Whether Clause 9 shall stand part of the Bill?
Lord BROOKE of CUMNOR: In connection with Clause 9 (7), I should like to ask whether the Minister has any present intentions of giving general or special directions as that subsection empowers him to do. The kind of point that I have in mind is the provision in subsection (1) that:
"… the dwelling is likely to remain fit for human habitation and available for use as a dwelling for a period of not less than fifteen years."
I am doubtful whether standard grants should always be withheld from houses

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solely because the local authority cannot be absolutely assured that the house will last for 15 years. Most houses outlive their estimated life and I feel that it is an act of cruelty to the tenants of a house to say that they cannot have these standard amenities, which we have all recognised as being the minimum amenities of civilised life in a house, because it is thought that the house will last for only 13 or 14 years. Thirteen years or 14 years is an uncommonly long time to go on living without a sink or a hot water supply or an indoor W.C. or whatever is the standard amenity. I shall be greatly assisted if the noble Lord will tell me that the Minister is likely to use his powers under subsection (7) so as to give reasonable flexibility, particularly with reference to that period of 15 years.
Lord KENNET: Yes; it is a little complicated, but I will try to gather it all together. General directions under Clause 9 (7) are being included in a Circular to the authorities after the Bill is passed. They will have a wide discretion; but they may not, under these general directions, give a standard grant where the House has an estimated life of less than 10 years. The clause says 15 years; the general directions will give them flexibility down to 10 years or, where the amenity will not be for the exclusive use of the occupants of the dwelling, or where all the amenities are being provided in a house which remains unfit because of disrepair or instability. It will be open to the housing authorities to ask for special treatment in particular cases in respect of standard grant. I would remind the noble Lord and the Committee that all this does not apply to discretionary grants. We hope to get a system whereby houses likely to stand up for less than 10 years will be eligible for a sort of "mini-discretionary" grant, especially tailored to the short need.
Lord BROOKE of CUMNOR: Am I right in thinking from the noble Lord's explanation that whereas the clause will say that if the house satisfies the other conditions and is likely to remain fit and available for use for 15 years or more, the standard grant can be granted as of right; but that under the Minister's directions, for a house likely to remain fit and available for between 10 and 15 years, then, in effect, it will be at the discretion
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of the local authority whether it will make a standard grant?
Lord KENNET: Yes that is right.
Clause 9 agreed to.
Clauses 10 to 12 agreed to.
4.26 p.m.
Lord AIREDALE Lord AIREDALE moved Amendment No. 4:
After Clause 12 insert the following new clause:
Condition as to occupation of dwellings
".—(1) Where an improvement grant or a standard grant is made with respect to any dwelling, then during the period of three years beginning with the completion of the works towards the cost of which the grant is made, the dwelling shall be let or kept available for letting at all times during which it is not occupied—

(a) by the applicant for the grant or a member of his family, or

(b) if the dwelling or an interest in it has since before the application for the grant been vested in the personal representatives of a deceased person, or in trustees, by a person who on the death, or under the trust, has become interested in the dwelling or interest or the proceeds of sale thereof, or by a member of the family of such a person, or

(c) by a person who on the death of the applicant has (whether or not in consequence of a disposition by will) become beneficially entitled to, or to an interest in, the interest of the applicant in the dwelling or the proceeds of sale thereof, or by a member of the family of such a person, or

(d) by a member of the agricultural population (within the meaning of section 114 of the Act of 1957) in pursuance of a contract of service.

(2) The owner of the dwelling shall, on being required to do so by the local authority, certify that the provisions of subsection (1) of this section are being complied with and any tenant of the dwelling shall, on being required in writing by the owner, furnish to him such information as he may reasonably require for the purpose of enabling him to comply with the provisions of this subsection.
(3) In relation to a residence house of a see or ecclesiastical benefice subsection (1) of this section shall have effect as if paragraphs (a) and (c) were omitted and the subsection shall not apply at any time at which, during the tenure of the see or benefice by the bishop or incumbent, it is occupied by him.
(4) Subsection (1) of this section shall not apply to a dwelling held upon trust for any charitable purpose, so long as it is occupied or kept available for occupation for that purpose.
(5) The requirement with respect to a dwelling to observe the provisions of subsections (1) and (2) of this section shall be

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registered in the register of local land charges by the proper officer of the local authority in the manner prescribed by rules under section 15 (6) of the Land Charges Act 1925."
The noble Lord said: I hope it will be for the convenience of the Committee if with this Amendment we discuss Nos. 5, 6 and 7; because these are a block of clauses which I think will not be unfamiliar to noble Lords who have studied the recent Housing Acts. These are the sections contained in the Housing Acts which imposed conditions designed to secure that where a house improvement or a house conversion scheme is grant-aided out of public funds the house or dwelling which is provided shall be available to be used as a dwelling for somebody to live in during these hard times of house shortages when there are all too few houses in the country to be used as dwellings by people who want somewhere to live. There is a further and important provision and it is contained in the new clause (Amendment 5 on the Marshalled List). This clause contains the enforcement conditions which provide that if the person who accepts a grant does not make the premises available to be used as a dwelling, then the grant shall be recoverable, with interest, by the local housing authority.
These provisions, or provisions very like them, first appeared in the Housing (Financial Provisions) Act 1958 and those provisions have been repeated, I think I am right in saying, in the subsequent Housing Acts. Moreover, they were included in this Bill when it was presented to Parliament. The clauses which I am now moving to reinsert in the Bill were Clauses 13, 14, 15 and 16 of this Bill when it was first introduced to Parliament by the Ministry of Housing. There was a very exhaustive Standing Committee stage on this Bill in the House of Commons and those four, I submit, very important clauses survived the exhaustive examination in the Standing Committee. It was not until the Report stage in another place that these four clauses were struck out of the Bill. What I want to know is why, and was it wise?
All over the country there are houses, large and small, surrounded by outbuildings of various kinds: stable buildings, barns, store buildings and so on. Many of these outbuildings, particularly the stone-built ones, could, at a price, be
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converted into separate dwelling:: and would make very satisfactory dwellings for people to live in. I do not suppose that in a great many cases they would be regarded as satisfactory dwellings to be built for letting, because most of them are too close to the main house, or the only access to them probably is from the garden or something of that kind, and the occupier of the main house would say to himself, "This outbuilding would make a first-class guest house for my weekend guests and for my children and grandchildren on holidays and so on, but it would not be a very satisfactory place to have to make available for letting because I should not like to have strangers living on top of me quite so closely."
Up to now conversion schemes of this sort have not been eligible for grant in cases in which the premises wore to be used as guest houses, because of these four clauses which have been in the Housing Act up to now, and which I now seek to reinsert into this Bill. But now we have a rather different situation developing. We have a maximum conversion amount, not of £400 but of £1, 000, and I think there must be a good many people who might have said up to now, "Well, £400 will not get us very far towards a very expensive conversion scheme to make a guest house in the garden, but £1, 000 really will make a difference". They may say, "If we can get the first £1, 000, let us go ahead and build a guest house in the garden". It will be all right for them now. Parliament has unquestionably given its blessing to spending public money on this sort of thing because, although when the latest Housing Act was first introduced into Parliament the same old sections were there to prevent guest houses and such-like from being grant-aided, those clauses were specifically struck out of the Bill by Parliament, which appears to indicate that, so far as Parliament is concerned, £1, 000 a time for a guest house in the garden is perfectly all right".
My submission to the Committee is that it is not perfectly all right, and that there is not unlimited public money to spend upon housing. We heard an exchange about that between the noble Lord, Lord Brooke of Cumnor, and the Minister at the very beginning of this Committee stage. What public money

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is available for housing ought, in my submission, to be used to provide houses for people to live in, and not to provide guest houses in people's gardens. It is because I fear that there will be an upsurge of demand for guest houses in gardens, financed as to the first £1, 000 from public funds, that I am suggesting that it was very unwise not to keep these four clauses in the Bill so as to make quite sure that all the public money designed for housing is used to provide houses for people to live in.
I believe that great pressure is going to be brought upon local authorities to make grants at their discretion—although that will not apply in every case. There are some local housing authorities, I believe, which have never given anybody a discretionary grant. I do not suppose that I could get the Minister to say so, but I believe that the Ministry of Housing and Local Government have a "black list" of local authorities which have never given anybody a discretionary grant; and certainly those local authorities are not going to give discretionary grants to the wealthy to build guest houses in gardens. But I believe that a great many authorities will in fact make grants; and I believe that pressure may be brought upon them.
Let me repeat figures with which I wearied your Lordships on Second Reading. The noble Lord, Lord Kennet, listened very intently to my figures and was not quite happy about them; but I still think that they are right. I am, however, not infallible over figures, and if I am wrong I shall be glad to be put right. The way I put it was this. The maximum grant is £1, 000; it is subsidised by direct subsidy from the Ministry of Housing and Local Government as to 75 per cent., so the first £750 comes from the Minister. Then there is the general rate support grant which works out, I think, at about 10 per cent. That gives an 85 per cent. subsidy from the central Government, leaving 15 per cent. of the grant to be provided by the ratepayers of the local authority.
Then you have to consider that, before anybody gets a £1, 000 grant, he has to put at least £1, 000 of his own money into the scheme, so when you are considering the proportion of the cost of the house
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that is borne by the local authority, you find that, because of the 50 per cent. which the owner has to produce himself, the 15 per cent. immediately comes down to 7½ per cent. It would be a very clever owner who contrived that his share of the cost should be exactly £1, 000 and no more. In almost every case, the chances are that the owner's proportion of the cost is going to be £1, 500, or £2, 000, or perhaps more; so the local authority's theoretical maximum of 7½ per cent. contribution to the cost of the house comes down to a figure at which one can only guess, but which is probably 5 per cent., 4 per cent. or 3 per cent. of the total cost of the house.
Having produced 3 per cent., 4 per cent. or 5 per cent. of the cost (the Minister is smiling, so I think I have got my sum right; but we shall see) the local authority will then proceed to collect rates on this new house, and it will be getting a pretty good bargain. I can quite imagine local councillors saying "It seems a bit odd to give a grant to somebody to make a guest house for himself in his garden, but it is a pretty good bargain for us as the local authority; and if we do not make the grant—and Parliament appears to have given their blessing to it—the ratepayers and the electors are not going to be very pleased with us, because we shall be throwing away quite a good bargain for ourselves."
I regard this as a whole lot of nonsense. We are getting right away from the principle which ought to obtain in this country in these days: that if public money is going into housing, it ought to go into housing for people to live in and not be spent on grants to wealthy people who want to put a guest house in the garden. I cannot see that these clauses contain anything which anybody who plays fair with his local authority need fear, because although there is a provision that if he does not comply with the conditions he may be required to repay the grant which he has received, it is not mandatory; it is only permissive. The words in subsection (1) of the clause which appears as Amendment No. 5 on the Marshalled List include:
"… the grant shall, on being demanded by the local authority, become payable to them by the owner of the dwelling … "
It does not say that a local authority must demand repayment; merely that

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if it does the owner has got to repay the money.
I believe that any reasonable local authority, if it thought somebody had been fair and open and reasonable, would not demand the repayment of a grant. Suppose somebody had genuinely intended to re-build an outbuilding near his house, and this was to be made available as a dwelling for a tenant; and then, suddenly and unexpectedly, he had to leave the district to take up a new job, or something like that. If he went to the local authority and said, "I am in a difficulty. I cannot comply with the condition that the dwelling will be available for a tenant because I have to sell it and leave the district", and if the local authority felt that he had played fair and had not concealed anything, I do not believe that the local authority would demand the repayment of the grant. It is only people who do not play fair with local authorities who I believe fall foul of this provision and very properly have then to repay the grant. I am sorry to have spoken for so long, but I feel very strongly that in these days public money for housing must go into housing for people to live in and not guest houses in people's gardens. That is why I have moved this Amendment. I am not against people having guest houses in the garden; it is a very good thing that they should. All I say is that they should pay for them. I beg to move.
Lord HENLEY: I am sorry to disagree with my noble friend who has argued this Amendment so exhaustively, so cogently and indeed with a certain logic, but I hope the Government will resist this. I think in taking out those three clauses they gave a very valuable concession indeed and we should be most grateful for it and not seek to have it removed. The object of this Bill is to arrest the decay of our existing old houses. Earlier Bills failed to do this and the Government have given us these new inducements (and very good inducements they are) in order to try and arrest a state of affairs in which most of our old houses were going downhill very rapidly.
The noble Lord fears that we are making a concession to people who ought not to have it. There may be the odd case in which somebody does get something for nothing, as it were, but I do not think
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it will be very much. What it will amount to is that a great many more people will take advantage of the new grants from the Government than would otherwise have taken them and, furthermore, that it will in a way promote the ownership of houses rather than the tenacy of houses, and this, again, with regard to people's homes, is I think a good thing rather than a bad one and for this reason I cannot support my noble friend.
Lord KENNET: I have very little to add to what the noble Lord, Lord Henley, said. The noble Lord, Lord Airedale, has moved these reinsertions into the Bill in accordance with what I think the Committee will now recognise is a propensity to seek to divert the elephant of social advance to stamp upon a gnat of presumed injustice which has caught his attention. The old conditions which the Bill, as drafted, removed required the housing authority to take back the grant if the use of the building changed, or if the owner who received the grant moved. We are removing that requirement. I would remind the Committee as the noble Lord, Lord Henley, did, that this Bill is to do with hundreds of thousands—over a quarter of a million a year—of improvements in the "twilight" areas of our great cities. It is not to do with guest houses in the garden Its application to guest houses in the garden is something which should be left to the local authorities, particularly the rural ones. The Government are content so to leave it. The noble Lord should not refer to building a guest house in the garden; that would not attract an improvement grant, which would be given only for the conversion or improvement of an existing building.
On Question, Amendment negatived.
Clauses 13 to 17 agreed to.
Clause 18 [Improvement contributions]:
On Question, Whether Clause 18 shall stand part of the Bill?
Lord KENNET: I should like to take this opportunity of making an announcement about the level of cost acceptable for grant in London. Discussions have been taking place on levels of assistance for conversions and improvements in Greater London under this Bill. These

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have been carried out by a small subcommittee consisting of officials from the Ministry of Housing and Local Government and local authority officers from the Greater London Council and the London Boroughs Association. This is the sub-committee of the Ministers Standing Working Party on London Housing.
Agreement has been reached by the sub-committee that the maximum allowable costs of conversions and improvements by the local authorities in Greater London and by housing associations working under arrangements with them could go up, in certain cases, to about double the amounts provided for in the Bill. The report of the sub-committee has now been accepted by the main Working Party. It is proposed that in due course the Minister will notify the various local authorities concerned that he has made the appropriate determinations under Clauses 18 (3) and 21 (5) of the Bill in respect of cases in certain classes within Greater London.
Lord BROOKE of CUMNOR: I am grateful to the noble Lord, as we all should be, for making that announcement. If I heard him aright he said that there had been agreement reached in the sub-committee of the Working Party covering the various local authorities concerned in Greater London. That seems very satisfactory news. I am glad that it has been possible on these new arrangements for Greater London, which, as we probably all would accept, is a special case in matters of this sort. I take it that there is no need to amend the Bill because the necessary adjustments can be made by the Minister using his powers to specify or prescribe or do something like that.
Lord KENNET: The noble Lord is quite right. There is no need to amend the Bill. I am grateful to him for his kind remarks. The difficulties in which the London housing authorities might have found themselves have been exercising everybody concerned for some time, and I am sure that all sides of the House will be glad that so generous and realistic a solution has been reached.
Clause 18 agreed to.
Clauses 19 and 20 agreed to.
Clause 21 [Contributions for dwellings provided or improved by housing associations under arrangements with local authorities]:
On Question, Whether Clause 21 shall stand part of the Bill?
Lord BROOKE of CUMNOR: The noble Lord, Lord Kennet, has just made an announcement about what the Minister may specify under Clause 21. I would accordingly ask him whether the Minister has in mind to specify anything special or novel under subsection (3) of Clause 21. I am not asking that question in the expectation that he has a new major announcement to make here, but where we are passing legislation which includes such words as
"as may for the time being be specified for the purposes of this section by the Minister"
it is of value to know whether any departure of policy by way of specification is contemplated.
Lord KENNET: The answer to the noble Lord's inquiry is really the same as that which I returned to him about Clause 3, except that where the life of the property is estimated to be less than ten years the Minister's approval ought to be sought, and housing associations ought not as a general rule to be dealing in short-life properties, anyhow.
Clause 21 agreed to.
Clauses 22 to 26 agreed to.
Clause 27 [Interpretation]:
4.50 p.m.
Lord ANNAN Lord ANNAN moved Amendment No. 8:
Page 15, line 11, at end insert (""dwelling" or "dwellings" shall include residences for students;").
The noble Lord said: I beg leave to move the two Amendments standing in my name and also, if the Committee will permit, the Amendment under Schedule 8. I will not repeat the speech which I made on the Second Reading of this Bill which drew attention to the rising number of students who will be requiring dwellings and residence during the next decade, a rising number which includes not merely university students but also students of the colleges of further education.
The point which I am trying to establish through this Amendment is whether student housing associations are or are not eligible under the provisions of the existing Housing Acts and of this Bill. The fact is that, of 30 student housing associations, none has so far received the authorised arrangements under Section 120 (1) of the Housing Act 1957. I have been trying to discover why this may be so. In pursuit of that object, I consulted the Report of the Committee stage of this Bill in another place and there I found the Minister being pressed on this very point. At 12.30, he was recorded as saying:
"I must emphasise that students are not excluded from the definitions in the two Acts to which my honourable friend referred."
A quarter of an hour earlier, however, he was recorded as saying:
"The normal authorised arrangements that have been discussed are meant to cover housing for the sort of people whom the authority would otherwise expect to accommodate in its own council housing. I do not think that one could say that this applies to students' hostels, where the usual right of nomination by the local authority would not be appropriate."
I think that this shows that there may be some confusion in minds both at the Ministry and in local authorities as to whether student housing associations are or are not eligible. In that respect I should like to draw attention to the fact that later I shall be referring to the distinction made between hostels and dwellings.
In his reply to my speech on Second Reading, the noble Lord, Lord Kennet, was good enough to make two points. He first of all said that the Amendment I intended to put before the House was unnecessary, because it was a declaratory Amendment and there was no more need to insert in the Bill a reference to student housing associations than there would be to insert a reference to housing associations for those with red hair. However, I think there is this distinction, that students are a particular body in the community who have certain recognised and favourable rights granted to them by society as a whole. It is for these reasons that they have formed themselves into housing associations.
The second thing that the noble Lord said was that he hoped I would agree that when facilities of the kind we are
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discussing were made available, students should have a lower priority than some other classes in the community, such as mothers with children. On that I entirely agree. I would not for one moment try to urge that lusty young bachelors should have any priority over unmarried mothers or even over discharged prisoners both of which classes are specifically qualified for help. But equally I would urge that, though they do not in any way claim some special privilege, student housing associations should have equal treatment with other housing associations.
I would make this point to the noble Lord. It is easy for people to picture all students as lusty young bachelors, but there are a great many married students, and married students with children, and it is for these that the student housing associations are particularly interested in getting property so that they can be properly housed. I would also re terate the point that, by helping student associations, we should be helping the very class of people whom I know the noble Lord has so much in mind, those people who are searching for lower income accommodation of one kind or another. If we permit student housing associations to build their own accommodation, we are relieving the pressure on the lower income accommodation which is so vitally necessary for those classes of the community which are under-privileged.
Here I would discuss the distinction between hostels and dwellings. Only too frequently, when local authorities are faced with requests from student housing associations for help under the Housing Acts, they reply that the form of accommodation which the association are putting forward is a hostel. In some cases that may be so, but a great many of the applications have been for property which would qualify as dwellings—that is to say, with their own separate catering arrangements.
I do not want to appear here as the spokesman for a pressure group. It may be that one or two of my noble friends from universities may support me on this, but it is not the intention in this Amendment to claim any special privilege for the student housing associations. I think that in this matter there is a principle of Government. If the associations are not eligible under the Acts, then let us say so perfectly frankly and we know where

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we stand. If they are, let that be said with equal clarity and let it also be said by a local authority, when an application is made, that although the association is eligible under the Acts, there are not enough funds to meet their request because other housing associations have been given priority. There we have clear and, I should say, good Government.
What I think is bad Government is to leave a matter like this so vague that the Acts appear to confer a right of eligibility on student housing associations, yet when they make application under the Acts local authorities deny that that right exists by claiming that they do not satisfy the criteria. I think that this is exactly the kind of thing which leads to cynicism, not only among students but also among many classes of the community when they are met with objections of this kind. I think that we should always accept that even if a right exists under an Act of Parliament, the Government are not always able to fulfil that right for lack of public funds.
This is a probing Amendment, and I would ask the noble Lord, Lord Kennet, if he would be good enough to give me answers on two points. Could he possibly say whether student housing associations are or are not eligible under this Bill and under the existing Acts of 1957, 1964 and 1967? Second, would he be willing to go into the larger matter of student accommodation in general and advise his right honourable friend to set up a Working Party representing the Ministry of Housing, the Department of Education and Science, the University Grants Committee, the local authorities and the student housing associations, to see whether they cannot devise means of getting lower cost accommodation for students than that which is at present being provided—or perhaps I should say not being provided—by the University Grants Committee in the financial stringency under which that body is at present operating—accommodation which would be the kind of accommodation which the student housing association want and under the provisions of the Act?
May I make one last point? Under the Act it is, of course, possible to apply not merely for a preferential rate of interest but also for a loan for the full cost of the dwellings. My own belief is
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that student housing associations would be content merely with the lower rate of interest and it would be up to them to go into the market—to the institutions, to the insurance companies and the building societies—to obtain the loan capital for their dwellings. This I believe they would be ready to do. I think their universities, too, would put up the necessary guarantee or collateral to enable that to be done. But it could not be done unless there were a preferential rate of interest. I beg to move.
5.2 p.m.
Lord BROOKE of CUMNOR: I do not wish to stand between the noble Lord and your Lordships' Committee. It was a great disappointment to me that I was prevented from being present on the day of the Second Reading of the Bill, but I read the speech of the noble Lord, Lord Annan, and that has prompted me to take an interest in his Amendments today. I greatly hope that the Government will be able to give a constructive answer. There are certain features of the situation which it ought to be possible to bring together. First of all, accommodation for students is already a serious problem and is going to become more and more acute. Secondly, there are numbers of students who are anxious to do something about this themselves. That is a feature which Governments should encourage. There is plenty of criticism of students. Criticism of certain students may be deserved, but it should not be applied to the vast number of students who are interested in self-help—and here are students showing themselves keen to provide self-help in the field of accommodation. Thirdly, we know that in the Scandinavian countries and in Canada a great deal has been achieved by student housing associations. I cannot say whether all the claims made for them are true and accurate, but certainly on the face of things it looks as though student housing associations, in collaboration with the public authorities, were making a big contribution towards student accommodation. It seems to me that we should all be trying to bring these three together.
Lord Annan has said, as has been confirmed to me by students who are interested in these matters, that there is a feeling of not knowing where to

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turn. The Government and the Committee in another place said that whether a student housing association qualified as a housing association or not would depend on its character; and I have no doubt that is true. Naturally those who are concerned with these housing associations want a little more information. It appears that their experience has been that on approaching a local authority they are either told that they are talking about hostels and not housing accommodation, which is not the case, or that the local authority has not the slightest interest in a housing association like theirs and cannot help. It seems to me that your Lordships' House should try to help these people who are seeking to help themselves. I am sure that the noble Lord, Lord Kennet, will give all the assistance he can so far as the interpretation of this Bill is concerned, but I am anxious most of all about the next step.
The noble Lord, Lord Annan, suggested a working party. I confess I am sometimes suspicious of working parties, which spend a lot of time working but may not produce expeditious results. At the least, I should hope that the Government would agree that there might be an informal discussion at the Ministry one day, to which some of your Lordships who are specially interested could come along and meet the Minister or one of his colleagues. Leaders of the student housing associations could come and we could talk the matter out under what I might call Parliamentary auspices, because Members of your Lordships' House would be there. In the light of that, it might be possible to see the best course to follow. There are a number of points which could probably be cleared up more rapidly than by referring the whole matter to a working party which might bring matters to a halt until it produced a final and comprehensive report. Above all, I hope the noble Lord, Lord Kennet, when he comes to reply, after the several noble Lords who wish to contribute to this discussion, will be able to reply in the same constructive spirit.
Lord LLOYD of HAMPSTEAD: I should like to say a word in support of my noble friend, Lord Annan, if I may so describe him in a non-technical sense. The noble Lord, Lord Annan, spoke on the Second Reading with great
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eloquence about the actual need of students in this matter, and it is not necessary to add anything to that, but I wish to say a word about the nature of the problem. It is a curious problem which everybody recognises and unfortunately nobody wishes to do anything about. Despite that fact, it is, I think, universally recognised that student housing does contribute considerable relief to the strains on housing in relevant areas, particularly in regard to low rent accommodation.
I have looked at the definitions of "housing association" and "housing society" in the relevant Acts and it seems to me, with all deference, that it is reasonably clear as a matter of legal construction that a student housing association does come within the terms of those definitions. The difficulty is that the local authorities and the Housing Corporation have powers under their respective Acts. They have not got duties, and we all know the difference between a power and a duty. If they are exercising a power they are entitled to apply their own criteria to decide in what way they will exercise that power. They have decided upon comparatively narrow criteria in this matter. They have regard especially to people who would otherwise qualify for council housing. That is all very well for criteria in broad terms, but it does not deal with special groups, and it is special groups to which students as a body belong.
The object of these Amendment.';, as in the case of the previous Amendments moved in another place, is simply this: to try to serve notice upon local authorities that under the existing legislation they have got these powers, because they appear to have set their faces against exercising their powers under the various Statutes in relation to this matter. I have studied the speech of the noble Lord, Lord Kennet, on Second Reading in answer to the noble Lord, Lord Annan, and also the speech of the Minister in another place, and, as I see it, the arguments that are put against Amendments of this kind are threefold.
First, it is said that these Amendments are not needed because, in any case. under the existing law students can qualify on other grounds. I have tried to understand what this means, and it seems to me, with all respect, to make total nonsense of what is now proposed. It seems to mean

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that if students during the course of their education choose to marry, have families and settle down in permanent residences, they will have qualified in the ordinary way for housing under these various grants and no problem will arise; or possibly they may fall into the "relief for the aged group" by converting themselves in some way into old-age pensioners. That has no relevance to the problem of students. In the case of students, there is a turnover every three years or so, and one wants to have accommodation available for students as they move into the higher education sector. In my view, there is nothing in that argument.
Then it is said—and even though it is said in a faintly sympathetic tone, nevertheless, with respect, it seems to me to be said somewhat facetiously—that to put in a provision such as in now suggested is equivalent to carrying into law that anyone can qualify—even because, for instance, he has red hair; and it is said that it would make nonsense of legislation to provide for special cases of this kind. The answer to that, surely, is that if experience shows that under statutory powers certain groups of people are being arbitrarily excluded (and there seems to be some evidence that this is so in the case of students), then it may be necessary to modify the legislation, or give some guidance to show that this arbitrary approach should not be taken up: otherwise we have a class excluded ab initio, notwithstanding that they come within the statutory grounds. If we had a more developed system of administrative law than that which, unfortunately, we possess, there is good ground for thinking that if a class of persons were arbitrarily excluded from a statutory power in this way an administrative tribunal would give relief. But we do not possess administrative machinery to deal with it in that way.
Thirdly, it is said that, if we are considering priorities, we must have regard first to the aged, to those who have large families, and people of that sort: that they are to be preferred to the strong-armed, youthful body of students. Surely the answer to that is: Yes, of course, where there is a question of absolute priorities being determined. But that, in my view, totally ignores the fact that giving assistance to student housing
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associations is going to relieve the problem of housing in other ways, and particularly in regard to that sector of housing for which relief is most needed; that is to say, low-rent accommodation.
I suggest that none of these three arguments is decisive, or indeed even plausible, as an answer to Amendments of the kind that are being suggested. I understand that my noble friend Lord Annan is putting his Amendments forward now only as probing Amendments; he is anxious to have a clear answer from the Minister about this issue, and he has put forward the notion of a Working Party. I feel considerable sympathy towards his suggestion of a Working Party, provided that it does not become a mere expedient for delaying tackling the problem: because, basically, I should have thought that the nature of the problem is fairly well understood.
What is really required is to find a speedy remedy to the problem, because, as my noble friend Lord Annan pointed out, it is becoming increasingly acute, with the great increase in student numbers, and with these student numbers pressing upon that very sector of housing which is most needed by people of small means, who are not in a position to provide housing for themselves. For these reasons, I warmly support my noble friend Lord Annan, and I hope that something practical will emerge from my noble friend Lord Kennet in relation to this pressing problem.
Lord LEATHERLAND: Much of the discussion on this subject has ranged around the desirability or otherwise of having a declaratory Clause in the Bill suggesting that this, that and the other special group of people should be mentioned as being eligible for assistance under this measure. My noble friend Lord Kennet, in the Second Reading debate, suggested that there was hardly any more need for specifying students as one of the groups than there would be for specifying people with red hair. Both my noble friends Lord Annan and Lord Lloyd of Hampstead have mentioned red-haired people this afternoon, so, as one of the few of your Lordships who in days long gone by had a wonderful mop of red hair, I crave your indulgence while I say a few words on this subject.

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In the Second Reading debate I followed my noble friend Lord Annan, and I said it was most likely that if he brought forward Amendments on Committee stage I should give them my support; and this I warmly do. It so happens that the university of which I am treasurer (it is an unpaid office, by the way, and a very arduous one) does not need at this moment to avail itself of any house-building help that might come from the operation of a housing society. But we have an increasing number of graduate students who perhaps in due course will graduate into matrimony, and our need in the years to come may be greater than it is to-day. We have to bear in mind that the University Grants Committee is very much averse to making grants of public money to universities for the purpose of providing student accommodation. We have to bear in mind, also, that in many of the university centres private lodgings are already fairly well occupied, and that lodgings of the requisite character are difficult to obtain.
The Minister may say again, as he said on Second Reading, that it is not necessary to have a declaratory clause specifying that students and various other special groups of people (and I include the redheads among the special people) should be mentioned. But the local authorities do not know this. The local authorities do not know that the existing legislation will permit them to make use of this Bill, when it becomes an Act, in order to provide special accommodation for students.
If my noble friend Lord Kennet is not in favour of setting up this Working Party, as suggested by my noble friend Lord Annan, and is quite certain that the existing law, as amended by the present Bill, is sufficient to cover the case of students wanting houses built through housing societies, would he and his right honourable friend consider issuing a directive to all local authorities, saying to them, in plain, simple terms, that they are entitled to use the machinery of housing societies to provide accommodation for students? In order still further to dispel any doubt, I suggest that the circular might explain to the local authorities which particular kind of housing associations, and which particular kind of accommodation—houses, hostels or what-
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ever it may be—would be eligible for grants and low-interest concessions under this scheme; and also say to local authorities what assistance from Central Government funds will be available. If this were done, I think that much of the doubt which at present surrounds this question could be dispelled. As has been said by other speakers, some local authorities are definitely against participating in any scheme of this kind; and there are others who say that they do not think this applies to them, and they give a negative reply.
This is a very serious question which is going to become more serious with every year that passes. In five or ten years' time we shall probably have 100, 000 more students in the country than we have to-day. Many of them to-day, in the existing accommodation, are not properly accommodated. I hope first, that my noble friend will be able to say unequivocally that the existing legislation is sufficient to cater for the problem, and, secondly, that he will send a directive to the local authorities clearly setting out the position and acquainting them with the opportunities of which they car take advantage.
5.21 p.m.
Lord BOWDEN: I hope the Minister will be able to be sympathetic on this matter. If he could give a firm directive, or prepare a circular, as other noble Lords have suggested, it would transform the whole nature of the problem which confronts many universities to-day. I agree with most of what has been said, and I do not wish to repeat it. I should like to make one observation which I think will explain why it is so necessary that we do something. The fact is that the University Grants Committee, in assessing the grants that should be given to students, assumes that the accommodation they have, the halls of residence in which they live, have already been paid for by capital grants long since written off. In other words, the maintenance grant which a student gets is adequate to pay for a room in a hall which the university owns, and for the meals that he eats, but it is not adequate to pay for accommodation if it has to carry a significant capital charge.
We have tried in Manchester many times, but we always discover that if we buy an old building and adapt it, as

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the Bill suggests we should, and as the students want us to do, the students cannot afford to pay a rent which permits us to recover the capital we have to invest. We are totally inhibited from making use of a very great deal of property which exists, and could be easily adapted for the purpose, as we have to pay conventional bank rate for the money we borrow; and this is beyond the power of the student's purse, because the Government's policy is based on the assumption that grants are calculated for halls of residence which have already been paid for. This is a most curious administrative anomaly. Nevertheless, it has a very profound effect on the student body; and were we able to use student housing associations, we could transform the nature of student life in Manchester.
We have been struggling with this problem for years, and I spent a very great deal of time this past year in negotiations to try to discover whether or not we can get these concessions which have been referred to. It was the view of the Manchester Corporation that the Act would not make it possible. It may well be that it does, but there is no doubt at all that many local authorities have so construed the Act as to convince themselves that it does not.
Lord KENNET: Which Act?
Lord BOWDEN: The one about borrowing at special rates for student housing associations. I am afraid that I cannot cite, as my noble friend Lord Annan has done, the particular reference. The fact is we have been unable to borrow the money, but had we done so we could have converted a dozen or more houses, and accommodated hundreds of students in a manner which they have now come to prefer to more conventional halls, of which we have a few. It is a simple matter of finance. May I repeat it? The grants the students get from the Government are not adequate to pay for accommodation which carries any significant capital charge based on borrowing money at bank rate. It has become true, I think, to say that research students, particularly married ones, and more particularly married ones with children, are among the most underprivileged section of the entire working population to-day.
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I hope that the Minister will see his way to give a directive forthwith. It would have immediate effect, and would be most enthusiastically received by the whole university world. At the very least, I hope that we may have a formal inquiry into the nature of a problem which is bad now and likely to get dramatically worse. The forecasts are that by 1980 the student body will be three times as big as it is to-day. Many of the students will be in universities; many more of them will be in further education, and the problem which besets people trying to organise polytechnics, colleges of music, colleges of art, and the rest of the education machine, is just as serious as it is for the universities. The competition for old fashioned "digs" is acute between students of all these components of the system. I hope the Minister will see his way either to make a declaratory statement, as has been suggested, or, alternatively, to look into the matter in great detail, and with a sense of urgency, in order to assuage what I can assure your Lordships is a very grave sense of disquiet, uneasiness and frustration in the universities, and among the student bodies, which are desperately trying to help themselves, and are unable to do so under the present system.
Lord ROYLE: I shall say only one or two words, and the reason for that will be apparent in a few minutes. I have never had any opportunity of a university education. I have no association with universities in any way, but because I happen to be a resident of Brighton I know of the problems which exist with regard to the Sussex University. University students are accommodated in all kinds of accommodation—some of it not very desirable—in many parts of the town of Brighton. This has aroused my interest constantly. The great problem there is that much of this accommodation is needed in the holiday season. As a result, in the period before the University rises for the summer vacation great problems exist because the owners of boarding houses, and the like, are desirous of getting a better return from their accommodation. Therefore, I want to support what has already been said.

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I am impressed by something that was said by the noble Lord, Lord Brooke of Cumnor. I like his idea of a talk, Parliamentary-based, with the Minister and interested people, and I agree that is better than a Working Party. The noble Lord has an Amendment down relative to the Government's giving guarantees to housing associations for building societies. I think this is very important indeed, and I speak as a director of a building society. I should have hoped that if such a meeting took place leading people in the building society movement might be invited to take part. I know that building societies, in the main, have to consider housing in a normal way, but there is a great demand and need here.
I am quite sure I can speak for very many people in that movement when I say that if that kind of guarantee could be given by the Government it would be a greater incentive to building societies to come along: md make grants to university students' housing associations, among others. I would say to my noble friend Lord Kennet that these are the things that might be considered as a whole, along with the Amendments which are now before the Committee, which have been moved by the noble Lord, Lord Annan.
Viscount GAGE: I trust it is in order for somebody on this side of the House to take part in this debate. I should like to support the noble Lord, Lord Annan, not that I think it will do very much good. My qualification to speak arises simply from the fact that I was for many years President of the National Federation of Housing Associations, to which these student housing associations, if they are formed, are affiliated. In the past, we have had successful schemes of this sort still affiliated to the Association. There has been a very great change in the last few years, not unassociated with the matter we know about well in local government; namely, the "squeeze". My information is not exactly as has been retold by Lord Annan or Lord Leatherland. It is perfectly true that some local authorities are objecting; they do not want to give away any part of their ration or their quota. Some, no doubt, do not know about it, and would profit by a
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circular of some kind, which has been asked for.
I am informed that there have recently been a number of cases where local authorities have been found to be agreeable to sponsoring the building of student housing. My information is that if it is agreed to make a loan of this so, and consent is requested for student housing purposes, the consent has to be given by the Ministry, and it is refused on the ground that students are not families in need and it is for this purpose only that public funds can be made available. Therefore the blockage is an administrative one. I am also told that, even if consent were available, the full benefit of housing associations would not be available., so that the chances of profiting at the present moment are slight.
Unfortunately we are not only governed by what appears in an Act of Parliament. From these Acts of Parliament stem a whole series of circulars and edicts of various kinds. Therefore, although I support the spirit in which the noble Lord, Lord Annan, has moved this Amendment, unless we have the help of the Minister I do not think these student associations will get very far. In my view, the whole situation is most confused, and some discussion, as suggested by my noble friend Lord Brooke, in which possibly the Federation of Housing Associations could also take part, would be very useful at the present moment, and I am glad it has already had some support.
Baroness SWANBOROUGH: I support the suggestion that has been made by the noble Lord, Lord Annan. I would plead that we might consider what the noble Lord, Lord Brooke, has suggested inasmuch as if a practical talk can take place this would be of the greatest help to the students, who want all the help that we can possibly give them. I am myself a member of three energetic housing associations and I am constantly consulted by students who do not fully understand how they can avail themselves of the help that is there to be used. I would support the noble Lord, Lord Annan, and the noble Lord, Lord Brooke, very forcibly. I feel that if we could have such a practical meeting a great deal of useful work would result.
Lord HOLFORD: By supporting, however briefly, the second Amendment standing in the name of the noble Lord, Lord Annan, I realise that I am in danger of doing exactly what he said he was anxious to avoid, that is, giving the impression that this is a sort of pressure group on behalf of the educators; but I want to do so for two special reasons. One is to define the word "students" a little more clearly. For the past 22 years I have been in London teaching postgraduate students, and at present out of 180 of them 70 per cent. or more are married, and I can assure your Lordships that our productivity, humanly speaking, annually is quite considerable.
Secondly, we have students who are taking higher degrees and we have a number of visiting students from abroad, and every year we have this problem of finding houses for them for the period of three, or sometimes four, years while they are here. We do it very largely by exchange. Thirdly, we have junior members of the staff who are also students although they are teaching, in that they are perhaps taking Ph.D.s themselves on the same basis as the others. So the first point I want to make is that in fact the term "students" includes a fairly large range of families.
This brings me to my second point, which is that the criticism may be that if they are ordinary families, as I think the noble Lord, Lord Kennet, said at the end of the Second Reading debate, they take their chance with other families and we do not want to make a special case of them. But they are a special case in an odd way. They are a continuing need in that, although they may only be here for two or three years, they very often hand on their problem to their successors. In other words, the house is often needed although the family changes. Therefore, it seems to me that although their demand on this kind of housing, and particularly on improved housing in towns, is normal, their qualification to meet that demand is not. I wanted to make that special point and I hope the noble Lord, Lord Kennet, will take that into account when he replies.
Lord TAYLOR of GRYFE: I wish to intervene briefly in support of the proposition which has been argued so potently by my noble friend Lord Annan.
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I think the case has been made substantially for recognising the claims of students' associations, but I should like to argue the case on political grounds as well as on economic grounds. I am much attracted to the proposition that a circular might be issued to local authorities giving them some direction on this matter, for it is obvious that there is a misunderstanding of the position so far as local authorities are concerned.
As I see it, the value of the student housing association is not only that it provides reasonable living accommodation for students, and recognition of the fact that there are many thousands of students who are living in squalor in large cities where there are universities; it relieves this problem, but it also provides the students with the opportunity of doing something for themselves. In my view, a good deal of student discontent over the past two years has been due to the fact that students feel some right to participation in their own affairs, and their own affairs are not concerned simply with educational matters but with the whole way in which they live as students in the community. I think, therefore—and this is borne out by experience of student co-operatives and the student housing associations in Europe and also in the United States of America, where students are encouraged to run their own housing associations—that to run their own student organisations concerned with supplies as well as living accommodation gives them an opportunity for exercising self-government and also teaches them the art of mutual aid and dependence on one another. So I would strongly recommend that these Amendments should find a responsive ear in the Government, for these political reasons as well as the very serious economic reasons that have been adduced in support.
5.38 p.m.
Lord KENNET: There are two questions before the Committee. The first question is, are students getting a fair deal as regards housing, and if not, what do the Government propose to do about it? The second question, which is formally before the Committee, is should the Housing Bill be amended in various ways? I am perfectly content to take all these Amendments together in a general discussion. Should the Housing Bill be amended in various ways which might or

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might not get students a squarer deal as regards housing? I propose to speak first about the second question and then to conclude by saying something about the former, and larger, question.
Since our Second Reading debate I have sat down with my advisers in the Ministry and we have combed through the housing law, and we can find nothing in statutory housing law which disadvantages students as compared with any other sector of the community in their attempts to set up housing associations or that special form of housing association known as the "housing society". I have to tell the Committee that, as a fact—and I have to repeat what I said on Second Reading—if our purpose is to identify and remove difficulties under which students may be suffering in achieving their aim to have housing associations, we shall be making a detour, wasting our time and doing that which is unnecessary if we amend this Bill.
Let me go a little into detail. The law of housing associations is one of the most complicated of all pieces of housing law. I myself am still very often confused by it. I admit to remaining in total confussion for the first 18 months in my present job. It may be that some of your Lordships are also confused by the complications. First of all, there are two categories: the housing association and. within that, a sub-species called the housing society. A housing association is able to enter into an authorised arrangement with housing authorities to provide housing, and this attracts housing grant on a standard comparable with what goes to the council house in the ordinary way. A housing society, on the other hand, which is a cost-rent or co-ownership society, does not get the subsidy, but it does normally get funds, two-thirds from a building society, one-third from the housing corporation, and that is public money. It does not have to have authorised arrangements with any local authority because it is not seeking grant.
If students go to local authorities and seek an authorised arrangement to become a housing association in the normal sense, and if they are told by the local authority that there is a statutory bar to such an arrangement, that local authority is misinformed. There is no such statutory bar. I take the point of my noble friend, Lord Leatherland, that
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they think there is: that is something we can go into. But if somebody is mistaken about fact you do not need to amend the Statute Law. My noble friend, Lord Lloyd, said he thought there was evidence that under statutory powers some groups of people are being arbitrarily excluded. If he has that evidence I should be grateful if he would let me have it, because I think there must be some mistake there.
It is perfectly true that the arrangements to be reached between a housing association and the local authority, since they attract Exchequer grant, are subject to my right honourable friend's approval. At the moment he is giving advice to local authorities which is based on the general idea that these housing associations ought to provide housing for the same sort of people that councils themselves normally house. I think that this excludes some students and it does not exclude others. If a student is in housing need, especially if he is married with a family, then he is the sort of person, just as a steel worker or a university teacher on a low salary might be, normally housed by a council. On the other hand, there would be others who would not be persons of the sort normally housed by a council. I can see that if we ever do get forward on this, as I hope we do, the associations or societies one may wish to set up may have to be a bit selective about the kind of students they admit—I do not know; this is speculation.
To turn now to the housing society. For any group of people to turn themselves into a cost-rent or co-ownership housing society there are only four things they have to do, and this is laid down in the 1964 Housing Act. They have to register themselves under the Industrial and Provident Societies Act 1893. They have not to trade for profit. They have to be established for the purpose of, or have among their purposes, constructing, improving or managing houses—which is of course what we are talking about. And the houses have to be kept available for letting, which again is what we are talking about—that is, about statutory powers.
Noble Lords may say—some have said—"I know the law does not need amending, but let us amend it to make doubly clear that there is no statutory bar

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to student housing associations and societies". As I did on Second Reading, I must formally oppose this on the simple social ground (my remark about red hair has been quoted; it was not intended to be flippant) that if you are going to let in students as a category under declaratory statutory law to make it clear that they have a right to this, then I think we must let in first old people, disabled people, unmarried mothers. Those I am sure of; other noble Lords will have other categories they would rather let in first. I would go no further than those three. Since there is no Amendment down to do this, I think we must not amend the Bill to make declaratory statements in favour of students.
The noble Lord, Lord Annan, raised the question of hostels. I think we are clear about this. A hostel comes under student law not so much under housing law, and that is a point I shall come to when I wind up in general. But there are three sorts of things: a housing association, of which there is the sub-species housing society, and separately the hostel, which comes under the umbrella of the U.G.C. and comes accordingly under its rules. I was very interested by Lord Bowden's account of the difficulties in Manchester, and I should like time to think about that and read what he said with some care, and also by Lord Royle's account of the difficulties in Brighton. It is interesting—is it not?—how a standard or value has grown up among the students of Sussex University that it is much better and more desirable and smarter to rough it in the town, without the help of any housing association, than to live on that shining new campus which many of them regard as a sort of social benefit for the weaker brethren and with which they will have nothing to do. Now let me come to the major question of whether students are getting a raw deal, and, if so, what can be done about it.
Lord ANNAN: Would the noble Lord permit me to put one question to him? He mentioned hostels. The point I was trying to emphasise was that very often when an application is made it is turned down on the ground that this accommodation is hostel accommodation, whereas in fact it satisfies the criteria as dwelling accommodation; namely, that it has self-contained catering facilities.
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That was the point I was trying to make about hostels and dwellings.
Lord RENNET: I take the noble Lord's point. It is a question of fact whether or not the plan would satisfy the criteria for being a dwelling. It may be that the criteria should be looked at or that they are being over rigidly applied. I do not know, and I will take this up in a moment.
It so happens that the difficulties of students as regards housing have come up in Parliament in a concentrated and agitated form on a Housing Bill. This is perfectly natural. It may be that they are increasing; I do not know. Several Members of the Committe believe they are, and I think it may be believed rather generally that they are. There is a Housing Bill going through; there is no Education Bill going through; so it is natural that this question should come up on a Housing Bill, but in terms of social reality it is a matter which straddles housing policy and education policy. If more money is to go to it, it is not easy to see whether it should be on the Housing Vote or the Education Vote. Such things have to be sorted out.
The noble Lord, Lord Brooke, suggested that there should be a meeting of one or two Peers and those interested in getting student housing associations going with my right honourable friend or me. For myself—I cannot commit my right honourable friend; I do not know how busy he may be at any particular moment—I would welcome that. I hope the meeting will not be too large. Mass deputations do not get through the difficulties in the matter so quickly as smaller ones; but perhaps after the Recess, or towards the end of the Recess, we could do that. But I should like to say that during the time between now and then my right honourable friend and I will consider what ought to be done.
Lord Annan asked for a Working Party. I cannot promise any precise form of consideration. These are structural matters. One would need to think of the best way of getting it done. The first thing is that my right honourable friend will have to be in touch with the Secretary of State for Education and Science, so that the two Departments can look at it together and consider the problem together. After that, it seems

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to me probable that they, jointly or one of them on behalf of both, will wish to meet other parties concerned. I would sooner not promise a specific form of Working Party, but I do undertake that there will be consideration within the Government of these matters, and after that consultation with interested persons in whatever seems the most appropriate form at the time; and I do undertake that at least I and possibly my right honourable friend will receive interested Peers and others a little later on.
I have distinguished between the two things, the Amendments to this Bill and the general question. I hope that what I have said about the general question may be enough to assuage your Lordships' desire to carry Amendments into this Bill, because if I am right about this, then I shall not need to enter into dettailed arguments on each of the Amendments—and on each of them there are difficulties of a particular nature which are quite unrelated with the general question that we have been discussing. So I hope that the Committee will agree that the best course is not to amend this Bill, since it does not need it, and to accept my assurance that the Government will have a fresh look at this matter in accordance with the most efficient procedure that they can devise, and will later on be ready to discuss it with those who are interested.
Lord ANNAN: I thank the noble Lord for his reply, and also noble Lords who have been kind enough to support me this afternoon. In particular, I should like to express my thanks to the noble Lord, Lord Brooke, because he raised, and it was echoed on this side of the Committee as well, that most important point about what was called the political side of this question. Here are student associations doing extremely good work and displaying a really extraordinary mastery of the complexities of this housing problem which, as Lord Kennet says, is not easy to unravel for amateurs. Nothing has impressed me more than the work which I have seen these associations do, particularly the one of which I am a director, in the past year.
I accept, of course, that the noble Lord, Lord Kennet, was not going to give way on the business of amending the Bill. I am also a little sorry in regard to the terms of his reply, that I felt that some-
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times I was swimming in dough. But I know that there is good will on his side. The only thing that I was worried about was whether he had fully taken into account the point made by his noble friend Lord Leatherland, namely, an instruction to local authorities which would set out the statutory position. I think that if he could give an assurance on this point I myself would be most satisfied to withdraw the Amendment, bearing in mind that he has given us, at any rate, hope on two fronts: first of all, on the short term front that possibly towards the end of the Recess, or the beginning of the next Session, there would be an opportunity for interested parties under Parliamentary auspices to meet the Minister; and secondly, a longer-term assurance that he and his right honourable friend will consider the possibility of setting up a Working Party, which I fully agree with Lord Brooke is a much longer-term affair in that that really would go into, I take it, the best and most economical way of providing residence for students, not merely in universities but in all sectors of tertiary education. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 27 agreed to.
Schedule 1 agreed to.
Clause 28 agreed to.
Clause 29 [Mutual exclusion of general improvement areas and clearance areas]:
Lord KENNET: Amendments Nos. 10 and 11 are drafting Amendments. I beg to move Amendment No. 10.
Amendment moved—
Page 16, line 34, leave out ("by the authority").—(Lord Kennet.)
On Question, Amendment agreed to.
Lord KENNET Lord KENNET: I beg to move Amendment No. 11.
Amendment moved—
Page 16, line 37, leave out ("belonging to the authority and").—(Lord Kennet.)
On Question, Amendment agreed to.
Clause 29, as amended, agreed to.
Clauses 30 and 31 agreed to.
Clause 32 [General powers exercisable by local authority in general improvement area]:
Lord BROOKE of CUMNOR Lord BROOKE of CUMNOR moved Amendment No. 12:
Page 18, line 11, leave out from ("acquire") to end of line 12 and insert ("compulsorily any land within or contiguous to the general improvement area.").
The noble Lord said: Amendment No. 12 is concerned with Clause 32 (1) which to me includes the astonishing statement that a local authority may be authorised by the Minister to acquire any land compulsorily. I am quite sure that is not what is meant. I would stress that Parliament hedges round compulsory purchase powers most thoughtfully and carefully. I believe I am right in saying that it might be desirable to put a compulsory purchase order on land which was just outside the edge of the general improvement area, but I cannot think that it would be desirable for a local authority to be encouraged to make a compulsory purchase order on some countryside two miles away just because it would be rather nice for improving the amenities. If my Amendment expresses what the Government really have in mind, I greatly hope that it will be accepted.
Lord KENNET: Yes; the Amendment seems to the Government to be a good one: that is to say, we agree with the effect that it seeks to achieve, but are not quite happy about the actual choice of words. We think there may be better words. If the noble Lord will agree not to press this Amendment, perhaps I could get together with him and suggest another word which he could move on Report.
Lord BROOKE of CUMNOR: In the circumstances, I am most happy to withdraw the Amendment.
Amendment, by leave, withdrawn.
On Question, whether Clause 32 shall stand part of the Bill?
5.59 p.m.
Lord LEATHERLAND: On Second Reading of this Bill I dealt with the question of compulsory purchase. I argued that local authorities as a whole do not like to indulge in compulsory purchase. I suggested that it would be far more desirable to entrust the local authorities with powers of compulsory repair
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in cases where the landlord would not undertake to carry out repairs that either the tenant or local authority desired.
I admitted in the course of that speech that there were certain categories of housing covered by this Bill in respect of which compulsory repair orders would be permissible; but my noble friend in his reply rather suggested that the number of houses that would be covered by what I liked, that is the compulsory repair order, was rather larger than I myself had in mind. My reading of the provisions leads me to believe that compulsory repair orders would only be issued in a rather small number of cases, whereas the generality of the cases would be dealt with by what I did not like, the compulsory purchase order.
I asked my noble friend a few days ago whether there were any figures in his possession that would enable him to indicate roughly the proportion of houses that would be dealt with, as the Bill now stands, by compulsory repair, on the one hand, and by compulsory purchase order, on the other. If he has the figures convenient perhaps this would be a good moment for him to give them. If he has not, then we can leave this until a later date.
Lord KENNET: I have the figures, but before giving them I should like to explain to my noble friend that it was not so much the absolute figures of cases dealt with this way or the other way that concerned me so much as the circumstances. I was thinking of the case that a local authority had power to do this when it was moved to do so by a tenant who wanted it done and his landlord would not do it, and I wondered in what other circumstances the noble Lord wished to retain this power for the housing authority and I still hope to hear from him about that.
Let me now give the figures. We are talking about Section 19 of the Housing Act 1964, which enables a tenant to initiate action to compel the landlord to install any missing standard amenity. He does this by writing to the local authority who can then, at their discretion and subject to their being satisfied of certain statutory requirements—this is the provision the noble Lord likes—serve a notice on the landlord to do the works.

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Therefore, what we are talking about is the number of notices served during the five year period 1964 to 1969. 3,189 such notices were served, and in 300 of the cases (that is 10 per cent.) the landlords availed themselves of their right to serve a counter notice of purchase on the local authority rather than carry out the improvements.
Clause 32 agreed to.
Clauses 33 and 34 agreed to.
Clause 35 [Disposal and appropriation of land]:
Lord KENNET: I beg to move Amendment No. 13. This is a matter of clarification.
Amendment moved—
Page 19, line 30, leave out subsection (1) and insert—
("(1) Where any land for the time being vested in a local authority for the purposes of this Part of this Act—

(a) consists of or forms part of an open space; or

(b) has been compulsorily acquired under this Part of this Act;

the local authority shall not dispose of it except with the consent of the Minister.")—(Lord Kennet.)
On Question, Amendment agreed to.
Lord KENNET Lord KENNET moved Amendment No. 14:
Page 19, line 42, after ("or") insert ("subject to subsection (4) of this section").
The noble Lord said: Amendments Nos. 14 and.15 relax slightly the conditions governing a local authority's letting of land, including buildings, held under Part II of the Bill. The Amendments will provide that a local authority will not be required to obtain the Minister's consent, where that consent is not otherwise required under subsection (1) of this clause, to the letting of such land at less than the best rent obtainable in cases where the letting is to be for a period not exceeding seven years. The clause, as drafted, would have required consent being obtained to any letting at less than the best rent obtainable. I beg to move.
On Question, Amendment agreed to.
Lord KENNET: I beg to move Amendment No. 15.
Amendment moved—
Page 20, line 14, at end insert ("and the consent of the Minister under subsection (2) of this section shall not be required to any letting for a term not exceeding seven years")—(Lord Kennet.)
On Question, Amendment agreed to.
Clause 35, as amended, agreed to.
Clause 36 [Standard grants in general improvement area]:
On Question, Whether Clause 35 shall stand part of the Bill?
6.5 p.m.
Lord BROOKE of CUMNOR: I am not happy about Clause 36. A standard grant is usually obtainable as of right, but this clause purports to deprive people in general improvement areas of their right to obtain standard grants. Standard grants are made for the installation of amenities which most of us would regard as necessities of life. I ail to see why somebody, just because he is living in an area which requires general improvement, should be deprived of the opportunity of getting the standard amenities into the house as soon as possible.
From reading the debates in another place, I gather that the Minister wished to use this as a kind of blackmailing lever to persuade the owner of the house to do much more than put in the standard grants. That is not really my conception of what the Minister or the local authority should be doing in a general improvement area. In a general improvement area, I should have said the first thing to do was to get all the houses up to a reasonable standard of amenity as quickly as possible, and to top that up in various ways, if possible. I must say I very much dislike the idea of a local authority being enabled by Clause 36 to withhold standard grants from people who are without the amenities. I think that the Commitee would wish for a clear explanation from the noble Lord. Lord Kennet, as to why this clause needs to be included in the Bill.
Lord AIREDALE: I should like to support the noble Lord. Surely the whole point of the distinction between the standard grant and the discretionary grant is that the standard grant is something that you can have as of right, and

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the discretionary grant obviously is purely discretionary. Clause 36 says, in effect, that if you live in a general improvement area a standard grant becomes just a discretionary grant, and that cuts right across the whole point of this important distinction of having the standard grants which are obtainable as of right. Surely the legislation can be drafted so as to preserve this important distinction that standard grants shall be obtainable as of right in all circumstances, and shall not become discretionary just because somebody happens to live in a general improvement area.
Lord KENNET: Supposing there were a compulsory waistcoat and it were one's purpose to introduce in certain places voluntary overcoats on a wide basis. Would one then retain the compulsory waistcoat provision? This is really what it is about. The standard grant in the general improvement areas, as the Bill is drafted, and as Clause 36 says, will be able to be given on application, but it will not be bound to be given by the local authority. In these areas the housing authorities will be hoping to secure the agreement of owners to the improvement of the sound old houses to a level far above the minimum achieved with the standard grants, and in this way they will be hoping to see the full potential of those houses and that area realised.
The noble Lord spoke about blackmail, but I really do not accept that it is. I think the point he was referring to was that if owners of houses were to say, "I demand my standard grant and I will not go with you in your desire to do better than that and pay me a bigger grant" this might provide a stumbling block and raise difficulties in the path of the housing authority, which will be concerned, first and above all, to get the understanding and agreement of everybody who lives in the area before it starts on the general plan. The Government would like to see the hands of the housing authority quite untied as regards the type of grant and the things for which they should pay in the case of all the houses in a general improvement area, although of course there is no proposal to change it outside general improvement areas.
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This does not mean, I repeat, that standard grants will not be available in general improvement areas: they will. And in the cases where they do the job best the local authority will no doubt wish, in the interests of saving everybody trouble, to do it that way. But there may be other cases where in their judgment the job will be better done with a different sort of grant, maybe not very much bigger than the standard grant, but not necessarily complying with the statutory requirements of the standard grant. The Government are very anxious that the housing authorities should not be in any way shackled in dealing with these areas, but should be able to approach them imaginatively and to deal with each one according to its own characteristics and not to any statutory preconception.
The noble Lord, Lord Brooke, asked, "Why cannot they use a discretionary grant to top up after the standard grant has been given?" It does not really work like that. It is far more sensible to give a discretionary grant in the first place, doing under the discretionary grant the work which would have been done under the standard grant, anyhow, and some other work, all in one go. You do not want to start again under a separate procedure.
Lord Brooke also said that this deprives people of their right to a statutory grant. I would sooner put it that it relieves local authorities of their duty to do this thing in the lesser way while they are doing it in the larger way on a voluntary basis all round.
Lord SILKIN: I must confess that, while I appreciate what the Minister has in mind in this clause, it seems to me the wrong way to achieve it. I appreciate that in an improvement area he wants to encourage a rather higher standard of improvement than in a normal area; that is to say, the standard improvements would be of a more ambitious form than normally. But to try to achieve that by withholding a grant, or by encouraging local authorities to withhold it, seems quite wrong. I cannot suggest an alternative way to do it, but I feel that a little more thought ought to be given to this clause. I would respectfully suggest that my noble friend should undertake to look at this again to see whether the same result can be achieved in a better way,

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possibly by encouraging a larger grant, or something of that sort. I am not in a position to make any definite proposal, but I think the problem needs to be looked at again.
Lord AIREDALE: I would accept the analogy of the waistcoat and the overcoat if I felt sure that all the people in these general improvement areas were certain to get their overcoats. What is quite certain from this Clause is that they will not get their waistcoats except at the discretion of the local authority, and I am worried that some of them will not get overcoats either—and I think some of these people are in for a hard winter.
Lord BROOKE of CUMNOR: I think the noble Lord, Lord Kennet, can see that the Committee is unhappy about this clause. I am very grateful to the noble Lords, Lord Silkin and Lord Airedale, for what they have said. Let me assure the Government that I do not want to shackle anybody; least of all those who feel that they can afford to put in standard amenities but do not feel that they can afford to do a great deal more in improving the property. I very much hope that the noble Lord, Lord Kennet, will examine this matter in the light of what has been said because, clearly, there are certain dangers in this clause. I do not intend to press to-night my Amendment to leave out the clause, but I reserve the right to return to it at a later stage of the Bill if the Government themeslves do not put down an Amendment, such as the noble Lord, Lord Silkin, has suggested, which would lessen the potential harm that it might do.
Lord KENNET: I am most anxious to content the Committee, and especially my noble friend Lord Silkin. Perhaps I might say another word. He spoke of the possibility of encouraging a larger grant rather than maintaining this smaller standard grant as of right. I hope it is quite clear to all noble Lords that that is what this whole Bill is about. It is enshrined in Clause 70, which binds authorities to do all they can to improve the area; and the major part of the financial side of this Bill consists of an increase in the maximum grant they may give from £400 to no less than £1, 000—that is an increase of two-and-half times—a factor of 2½. The whole drive and direction of the Bill,
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which has the solid support of the country's housing authorities, is towards encouraging the larger grant, and it is only because that is so that the Government have thought it right to remove the compulsory nature of the smaller grant, which I assure the Committee will be completely lost in the great sweep of improvements we hope to see under this Bill.
I should like to conclude by telling the Committee that last week I saw a pilot scheme at Exeter, part of which is now complete, which has been done by extrastatutory arrangement, as if this Bill were in force, in order to enable us to learn the difficulties and the achievements. It looks absolutely marvellous. It looks very pretty indeed. It is delightful to walk about in. The insides of the houses look absolutely marvellous; and they are delightful to live in. The people are overjoyed. It could not be further removed from the sort of minimum improvement one sees with a standard grant, and I assure your Lordships that the thought of its being in any way relevant to what is being done there to have the old standard grant still compulsory in that area is a strange one to me, as it would be to your Lordships if you had seen this advance sample in Exeter.
Clause 36 agreed to.
Clause 37 [Contributions to local authorities towards expenditure incurred under this Part of this Act]:
On Question, Whether Clause 37 shall stand part of the Bill?
Lord BROOKE of CUMNOR: I do not want to dwell for long on this clause, but I feel it necessary to express the view that unless the figure of £100 in subsection (4) is increased the success of the general improvement area policy is likely to be limited to very small schemes. I have not put down any Amendment, partly because this is a matter of money, but mainly because subsection (5) enables the Minister by order to substitute another amount for the amount of £100 multiplied by the number of dwellings in the area. So there is a let-out there. I do not think there is any secret that the local authorities are concerned at the smallness of this figure, and feel that it will be very restrictive against them in carrying out vigorously the policy which the Government desire to achieve through this Part of the Bill.
Lord KENNET: I do not think the noble Lord will really expect me to add to that: he has answered himself. There is power to vary the grant level by order at any time, and the Government will naturally keep the level under continuous review.
Clause 37 agreed to.
Clauses 38 to 42 agreed to.
Clause 43 [Conversion of controlled tenancies of dwellings provided with standard amenities and in good repair]:
On Question, Whether Clause 43 shall stand part of the Bill?
6.20 p.m.
Lord BROOKE of CUMNOR: We now come to Part III of the Bill. Very briefly, I should like to say something on the machinery, which seems to me to be quite unnecessarily complicated. You have to go to the local authority to get what is called a qualification certificate and then, armed with the qualification certificate, you have to go off to another office, the office of the rent officer, and get a rent registered. Here again I know that the local authorities which will have to operate this machinery are extremely concerned that it has been made so complicated and so detailed. I have not ventured to put down Amendments because I think they would have to be very far-reaching; but I would put it to the Government, even at this late stage in the Bill's progress, that the Bill will work much more smoothly if a great deal of this complicated machinery can be removed in cases where there is no difference of opinion between the landlord and the tenant about the state of the repair of the house.
I think that the local authorities are going to be tied up in a tremendous amount of unnecessary work. I agree that it is desirable that the tenant should not bring pressure to bear on the landlord, or the landlord on the tenant, to agree to something not wholly right; but it is a mistake to treat all landlords and all tenants as though they were at daggers drawn. I believe that if it were not required by Statute that they should go through the immense complications of these next few clauses a large number of cases would be cleared up with complete good will, with ex-
340
pedition and with the saving of a vast amount of manpower, which of course means money as well.
There is going to be a lot of work to be done under Part III; but to be so meticulous about every detail, even in cases where there is entire agreement between the landlord and the tenant, is to invite the danger of clogging the machinery. I know that this view has been put, outside Parliament, to the Government. I know that up to now the Government have not seen their way to simplify the arrangements. I feel that I must take this opportunity of saying that it seems to me a very great pity that the Government have not been willing to arrange for a much more streamlined procedure in all those cases where there is no difference of opinion between the landlord and the tenant and where, therefore, it is not really necessary to bring in the local authority to make a judgment between them.
Lord KENNET: I take the noble Lord's point. The problem is to be sure that there is no difference of opinion, unless you have a statutory procedure which will reveal the certain absence of difference of opinion. I see that the noble Lord has down later Amendments which it seems to the Government might leave it a little uncertain whether there was or was not agreement.
Clause 43 agreed to.
Clause 44 [Application for qualification certificate]:
Lord BROOKE of CUMNOR Lord BROOKE of CUMNOR moved Amendment No. 16:
Page 24, line 32, leave out from ("amenities") to end of line 36.
The noble Lord said: I say frankly that I do not understand subsection (2) or the necessity for the words which my Amendment proposed to leave out. The subsection says:
"An application for a qualification certificate may be made … notwithstanding that at the time of the making of the application the dwelling lacks one or more of the standard amenities, if the application is made … before any works are begun for providing the dwelling with the standard amenities which it lacks."
Why is it necessary to insert that proviso? Why would it matter if the works had been begun? We want to get on with

341
these works—that is common ground between us. I fail to understand why the qualification certificate machinery should be brought to a halt if the application for the qualification certificate is not made until after the works have begun for bringing the dwelling up to par with the standard amenities. I beg to move.
Lord KENNET: Simply to safeguard the interest of the tenant. The essence of the system is that the tenant should be aware of the rent which will be registered after the improvements are carried out before he consents to the improvements. If the landlord can start the improvements without the tenant knowing what the registered rent is going to be, then, if he has consented to the landlord starting, he has done so in ignorance. The provision is drafted in this way in order to ensure that as full information of what is in store for him is given to the tenant before he agrees to the landlord going ahead with the improvements.
Lord BROOKE of CUMNOR: I appreciate that; but what happens if he starts the work without applying for the qualification certificate? Does that render it impossible for him ever to obtain a qualification certificate.
Lord KENNET: I am not sure. I should like time to look at that. But clearly he is proceeding in a way not provided for in the Bill. I assume that he might be at risk in his attempt to get into regulations.
Lord BROOKE of CUMNOR: Perhaps at a later stage we shall be able to discover what will happen if he fails to make an application before the works are begun. It seems to me that, through inadvertence, everything might be brought to an undesired halt. I certainly do not want to press this matter, I am grateful to the noble Lord for what he has said and I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 44 agreed to.
Clauses 45 to 47 agreed to.
Schedule 2 agreed to.
Clause 48 agreed to.
Clause 49 [Appeal in certain cases against issue or refusal of qualification certificate]:
Lord KENNET: Amendment No. 17 is a drafting Amendment. I beg to move.
Amendment moved—
Page 26, line 39, leave out from beginning to end of line 41 and insert—
("(3) The following provisions shall apply on an appeal under this section, that is to say—

(a) the court shall have regard to the state of the dwelling at the time of the hearing as well as at the time of the issue or refusal of the certificate; and

(b) the court").—(Lord Kennet.)

On Question, Amendment agreed to.
Clause 49, as amended, agreed to.
Clause 50 [Postponement in certain cases of effect of, qualification certificate]:
6.30 p.m.
Lord BROOKE of CUMNOR Lord BROOKE of CUMNOR moved Amendment No. 18:
Page 27, line 19, leave out ("January 1971") and insert ("April 1970").
The noble Lord said: I beg to move Amendment No. 18. The Committes will readily agree that Nos. 19 and 20 are linked with it. This is a matter of much greater substance than the Amendments we have been discussing in the last few minutes. It concerns the state and quality of the houses. The noble Lord will correct me if I go wrong (these matters are very complicated), but I believe that we are discussing the houses which are still subject to controlled rents; that is to say, in general the controlled ren that is being paid is twice the gross value in 1958.
The suggestion in this Clause is that even though the landlord has done everything necessary and has obtained his qualification certificate which proves that the house has the standard amenities and is in good repair, and in all other respects fit for human habitation, he is nevertheless not to get the benefit of the new rent which will accrue when the house goes from controlled to regulated status until some date, which may be 1971 or 1972. I understated that. If one reads this in conjunction with Schedule 3, one finds that he is not to get the full rent which is regarded by the rent officer and the rent assessment committee as a

343
fair rent until, possibly, 1976; but we can discuss that when we come to Schedule 3. The point here is that he is not to be entitled to any increase in this avowedly inadequate rent until January 1, 1971, in the case of houses of a somewhat higher rateable value; July 1, 1971, as regards the middle band, and January 1, 1972, as regards the houses of a lower rateable value.
Those amendments put off the increase in rent too long. These are houses which have been—or many of them have been—on the brink of contributing to the numbers of slum houses in the country. The Minister himself used strong words on the Second Reading of the Bill, pointing out how inadequate are controlled rents for keeping houses in good repair. Nevertheless, the owners of these houses will have had to put them in good repair and supply them with all the standard amenties if they are to get this qualification certificate. Even then, the rents are not to begin to be increased towards a fairer figure until 1971 or 1972.
My Amendments suggest that each of the three dates in the Bill should be brought forward by nine months. I believe that there is no reason whatever why that should not be done. In Committee in another place it was argued that the rent officers might be overwhelmed. I have therefore drafted Amendments which make a smaller difference to the dates than the differences which were discussed in Committee in another place. I accept that the proposal in Committee in another place to bring January 1, 1971, back to January 1, 1970, may have gone too far; but the earliest date suggested in my Amendments is April, 1970. If this Bill receives the Royal Assent next week, as we all hope (I think the noble Lord will agree that I have been doing my best this afternoon to expedite the proceedings) there will be a period of no less than eight months before the date, April 1, 1970, at which a beginning of an upward rise towards a fair rent can be made.
It cannot be right that those people who have suffered the inadequacy of controlled rents for many years should see that inadequacy continue for as long as the Bill proposes. I do not think there is any division between the political Parties now—at any rate between their
344
leaders—as regards the inadequacy of controlled rents. As I had always imagined that one of the objects of the White Paper and of this Bill was to encourage house improvement and to make sure that houses did not slip back again into a poor state, it really is undiplomatic—to use the least, the smallest, word—to treat those landlords who are genuinely trying, despite the inadequacy of their rents over many years, to put and keep their houses in the state which the Government desire, in so scurvy a way as this clause will do in the sense of postponing increases of rents. I think the proposals that I have made here are perfectly reasonable. They are that each of these dates should be brought forward by nine months. I cannot see any valid argument against doing this, and I most strongly urge the Government to accept the Amendment. I beg to move.
6.36 p.m.
Lord KENNET: Controlled rent is basically twice the 1956 gross rateable value. The noble Lord, Lord Brooke of Cumnor, said that to delay was a scurvy way to treat landlords who only desire to improve and maintain their houses. The noble Lord knows very well that the Government do not propose to treat those who desire to improve their houses in that way. They get their rent increases at once, and it is in order that they should get those increases at once that the Government propose that those who have already improved their houses—this is the group affected by the noble Lord's Amendments—should wait for their rent increases until those who are about to improve have done so, and have the first flush of the increases. It is because the whole purpose of the Bill is to get improvements done—not enough improvements are being done—that we propose not to advance into regulation the rents of houses where the improvement is already done until we are through the first flush of registrations of houses which will be done under the new provisions.
It is important that the rent officers' consideration of the qualified cases should not delay their dealings with new improvement cases, and that is why we propose that the already qualified cases should be allowed into the rent regulation system after the first flush which I mentioned—and not the new one—is already well

345
under way. The number of dwellings in each of the rateable bands (the noble Lord, Lord Brooke of Cumnor, has an Amendment down which we shall come to later, to reduce the number of phases from live to three) is at present estimated at about 60, 000 to 70, 000. If this Amendment and the two Amendments which we are considering with it were accepted, applications in respect of all the dwellings in the first two bands—about 150, 000—could be made to rent officers between April 1, 1970, and the end of that year.
Lord BROOKE of CUMNOR: I am sorry to interrupt the noble Lord, but may I ask whether, when he speaks of two bands, he means subsection (2) (a), (b) and (c) of Clause 50; or is he referring to figures in Schedule 3 to which I have an Amendment? Are they rateable value bands?
Lord KENNET: Yes, rateable value bands by which the controlled rents go forward into regulation. The Government conclude that the rent officers could not adequately deal with the 150, 000 in the first two bands and the first flush of new improvements both at the same time. We already aim at an initial strengthening of the corps of rent officers by the end of 1969 to take the first increase of work from the improvement cases, and after that we shall have to watch the position very carefully, so that in each year in each area there are enough rent officers to cope with the cases as they come forward. This will be done by getting part-timers to do more and to become full-time wherever possible; by recruiting additional rent officers and by taking on extra ancillary staff. The clerks of the county councils and county boroughs and the London boroughs are already being consulted about plans for their areas. So the Government believe that by the end of 1970 all this will have led not only to a considerable strengthening of the service but also to a more accurate assessment than we have now of the number of already qualified cases, the ones which would be accelerated under the noble Lord's Amendment, because we shall be able to find out the number of qualification certificates which the local authorities are issuing.
We accept that a further expanding of the rent officer service will still be needed
346
to deal with the already qualified cases, but it could proceed on a more realistic and practical basis in the knowledge of the likely number of already qualified cases which would go to rent officers. Under the scheme of this Amendment, the rent officer service would need to be expanded to cope, within about nine months of the start, with up to 100, 000 already qualified cases, over and above the improvement cases and the existing work, which is currently running at over 50, 000 cases a year in England and Wales. The Government fear it is unrealistic to think in terms of a programme to cater for this within a shorter time than is set out in the Bill as drafted.
Nevertheless it is in the Bill, under Clause 50 (3), that the Minister will have power to bring forward by order the dates of conversion (that is, the dates of the passing from control to regulation) in the already qualified cases, either throughout the country or in relation to particular registration areas, if it should prove practical and desirable to do so in the light of experience. I could not advise the Committee to go further than that reserve power which the Minister has to speed things up, if he thinks it safe to do so, by adopting the noble Lord's Amendment which would automatically permit a speeding up by the bringing forward of controlled rents into regulation rents, in those cases where improvement has already been carried out under the old system. I hope that with that explanation of the background on the rent officer service, the noble Lord may be willing not to press his Amendment.
Lord BROOKE of CUMNOR: I am sorry to query the figures again, but other noble Lords like myself may have been somewhat puzzled by them. We are referring now to the three bands of rateable value in subsection (2) of Clause 50. I understand that the Government in another place said that they estimated there were about 200, 000 of these controlled houses which had already been brought up to standard; yet I understood the noble Lord to say that more than 100, 000 of these were in the first band. I find this extremely difficult to understand and I will go on talking for a minute or two in the hope that the noble Lord may be able to elucidate the figures, because it will help us all to reach decisions on this matter if we know what

347
are the estimated numbers in the various bands which I will describe as (2) (a), (2)(b) and (2)(c). Whatever the figures are, I still feel that those landlords who have done their duty are being unjustly treated if the increased rents which they have, as it were, earned by putting the houses into proper condition early are withheld in order that that interval of time may benefit those who have been slower to get on with the job. It may be that the noble Lord can give me the figures for which I asked.
Lord KENNET: Yes. I think the mystery is now cleared up. There are, as I said, in each rateable value band about 60,000 or 70,000 houses, and the first two bands—that is, two out of three—contain, therefore, about 130,000 to 140,000 houses between them. I think the confusion arose in my mind because I dragged in a red herring about another set of bands which the noble Lord was proposing to reduce later on from five to three. This set of bands, (2)(a), (2)(b) and (2)(c), has 60,000 or 70,000 in each. Therefore the first two together are 130,000 to 140,000; and all three together about 200,000. That is the number of old controlled houses which we expect in all to come forward into regulation as a result of this Bill, and that is about half the number of old controlled houses in all.
Lord BROOKE of CUMNOR: I am sorry to disappoint the noble Lord, but I believe these dates are too far forward.
I think it is fantasy to suppose that everybody concerned will arrive at the rent officers' door on whatever date we put into this Bill. In fact, we know from experience in many fields, particularly, if I may mention it in passing, the leasehold field, that though large numbers of people may be entitled by Parliament to do a certain thing at a certain date, it does not happen that way. They come along much more slowly. I am convinced that it is unjust that these owners, who have in fact already done what is required of them, should be kept down to their controlled rent as long as the Government proposed. The noble Lord said that controlled rent was twice the 1956 gross value. By a slip of the tongue I said 1958, but as I have now reminded myself that the Minister himself said on the Second Reading of the Bill that it was twice the 1939 gross value, perhaps the noble Lord and I can both agree on that.
I am sorry to disappoint the noble Lord. I realise that he feels that there would be pressure on rent officers, but I do not think there would be nearly so much pressure on rent officers as he fears. I do not think that the acceleration of these dates will in fact impede the big effort to get houses improved, and I feel it necessary to press this Amendment.
6.50 p.m.
On Question, Whether the said Amendment (No. 18) shall be agreed to?
Their Lordships divided: Contents, 49; Not-Contents, 36.

CONTENTS

Ailwyn, L.

Derwent, L.

Malmesbury, E.

Albemarle, E.

Drumalbyn, L.

Massereene and Ferrard, V.

Allerton, L.

Elgin and Kincardine, E.

Mowbray and Stourton, L.

Audley, Bs.

Falkland, V.

Netherthorpe, L.

Balerno, L.

Falmouth, V.

Newton, L.

Belstead, L.

Ferrier, L.

St. Aldwyn, E. [Teller.]

Boston, L.

Gage, V.

St. Oswald, L.

Brooke of Cumnor, L.

Gsborough, L.

Sandford, L.

Brooke of Ystradfellte, Bs.

Goschen, V. [Teller.]

Sandys, L.

Carrington, L.

Genfell, L.

Selkirk, E.

Clifford of Chudleigh, L.

Gridley, L

Silsoe, L.

Cork and Orrery, E.

Inglewood, L.

Strathcarron L.

Craigmyle, L.

Jellicoe, E.

Templemore, L

Cranbrook, E.

Killearn, I.

Todd, L.

Cromartie, E.

Lauderdale, E.

Vivian, I.

Daventry, V.

MacAndrew, L.

Wolverton, L.

Denham, L.

NOT-CONTENTS

Annan, L.

Blyton, L.

Burden, L.

Archibald, L.

Bowles, L. [Teller.]

Champion, L.

Beswick, L.

Brown, L.

Collison, L.

Crook, L.

Leatherland, L.

Serota, Bs.

Evans of Hungershall, L.

Llewelyn-Davies of Hastoe, Bs. [Teller.]

Shackleton, L. (L. Privy Seal.)

Gaitskell, Bs.

Shepherd, L.

Gardiner, L. (L. Chancellor.)

Maelor, L.

Sorensen, L.

Garnsworthy, L.

Phillips, Bs.

Stonham, L.

Granville of Eye, L.

Raglan, L.

Strabolgi, L.

Heycock, L.

Ritchie-Calder, L.

Taylor of Mansfield, L.

Hill of Wivenhoe, L.

St. Davids, V.

Tayside, L.

Hughes, L.

Segal, L.

Wright of Ashton under Lyne, L.

Kennet, L.

On Question, Amendment agreed to.

Resolved in the affirmative, and Amendment agreed to accordingly.
Lord BROOKE of CUMNOR: I beg to move Amendment No. 19.
Amendment moved—
Page 27, line 22, leave out ("July 1971") and insert ("October 1970").—(Lord Brooke of Cumnor.)
Lord BROOKE of CUMNOR: I beg to move Amendment No. 20.
Amendment moved—
Page 27, line 26, leave out ("January 1972") and insert ("April 1971").—(Lord Brooke of Cumnor.)
Lord KENNET: I beg to move Amendment No. 21. This is a drafting Amendment.
Amendment moved—
Page 27, line 28, after ("elsewhere") insert ("of a value").—(Lord Kennet.)
Clause 50, as amended, agreed to.
Clauses 51 and 52 agreed to.
Schedule 3 [Restriction on Rent Increases]:
6.57 p.m.
Lord BROOKE of CUMNOR Lord BROOKE of CUMNOR moved Amendment No. 22:
Page 56, line 7, leave out from ("of") to end of line 13 and insert ("two years delay").
The noble Lord said: I beg to move Amendment No. 22 and Nos. 23 and 24 are linked with it. I am afraid that we may have queered the pitch of the argument for these Amendments by our debate on the last one. If I am partially guilty for that, I plead for forgiveness. I think that the noble Lord and other noble Lords will agree that these are complicated matters. Whereas on the last group of Amendments we were discussing the dates at which rents should begin to rise towards the fair rent after the issue of a fair rent certificate, in this series of Amend-
350
merits we are debating the period of delay until the full fair rent is reached.
The Government's proposal is that there should be two separate classes. It is proposed that the period of delay should be two years, with the rent going up by one-third of the increment each year, in those cases where the tenancy has become regulated and the rent registered after the completion of works which have received a grant under Part I. On the other hand, in those cases where the tenancy has become a regulated tenancy by virtue of Part III of this Bill, all the necessary work having already beer done to enable the house to qualify, it is proposed that the period of delay should be four years instead of two, with the rent going up by one-fifth of the increment each year.
My Amendment is designed simply to bring the second class into uniformity with the first. I fail to see why it should be necessary to postpone the full rent until the year 1975 or 1976 in those cases where the landlord has been a good landlord, in the sense that he did the necessary work early. In the other case, where the work was done later, and where the landlord therefore may not get such a good mark, the increase is to take place by 1973 or 1974.
In those cases where the work has already been done the rent increase is to be stretched over a longer period and is to rise by only one-fifth each year. There may be some good and logical reason of substance underlying this, but if so it did not come out in debates in another place, nor has it managed to convey itself to the professional societies and organisations which are concerned with housing, for I know that they feel as concerned as I do about the length of the escalator, one-fifth of the increase each year, for those houses which have already been improved. In this case I will not ask the noble Lord about numbers. It may cloud our discussions if we get into a new set of numbers, but I feel strongly that we ought to amend the Bill

351
on the lines I am suggesting, and I now challenge the noble Lord to explain why he should not do so—in other words, why these Amendments of mine should not be accepted.
Lord KENNET: This is a matter of judgment. Some of these rent increases will be quite large. That will not be very pleasant for the tenants, and it is the judgment of the Government that five-year phasing is a more human and acceptable arrangement than three-year phasing. Amendments having the same effect as the noble Lord's were discussed and negatived both in Committee and on Report in the House of Commons. It was a matter of judgment then; it is a matter of judgment now, and the Government are not prepared, by agreement, to see the five-year period reduced to three years. The Committee will not wish me to say any more. We all understand what our judgments are in landlord and tenant law. The difference between the two Front Benches is not an unexpected one, but I hope the noble Lord will not think it worth upsetting here a judgment which has been twice agreed in another place on this matter.
Lord BROOKE of CUMNOR: I have seldom heard a more jejune reply to any Amendment than that. It would shorten our Parliamentary proceedings greatly if the Government's reply on every Amendment was, "Well, this is a matter of judgment and my judgment is
better than yours; therefore this Amendment should be rejected". I had sincerely hoped that the noble Lord would indicate on what grounds his judgment was based. From what has been said I can see no reason whatever why I should not press these Amendments.
Lord KENNET: I, too, had sincerely hoped that the noble Lord would give the Committee his grounds for dissenting from the period of five years that is before the Committee.
Lord BROOKE of CUMNOR: I do that willingly, because I have already done it in my first speech. I said that in this case, if the Bill goes through unamended, various owners of property will not be able to obtain until 1975 or 1976 what the rent officer or the assessment committee has said is the fair rent for the house. That seems to me unreasonable.
Lord KENNET: The noble Lord has not given a reason why a three-year delay is acceptable if a five-year delay is not.
Lord BROOKE of CUMNOR: The answer is obvious; 1973 and 1974 are respectively two years earlier than 1975 and 1976.
7.5 p.m.
On Question: Whether the said Amendment (No. 22) shall be agreed to?
Their Lordships divided: Contents 50; Not-Contents, 36.

CONTENTS

Ailwyn, L.

Daventry, V.

MacAndrew, L.

Albemarle, E.

Denham, L. [Teller.]

McCorquodale of Newton, L.

Allerton, L.

Derwent, L.

Malmesbury, E.

Audley, Bs.

Drumalbyn, L.

Massereene and Ferrard, V.

Balerno, L.

Elgin and Kincardine, E.

Mowbray and Stourton, L.

Belstead, E.

Falkland, V.

Netherthorpe, L.

Berkeley, Bs.

Falmouth, V.

Newton, L.

Boston, L.

Ferrier, L.

St. Aldwyn, E.

Brooke of Cumnor, L.

Gage, V.

St. Oswald, L.

Brooke of Ystradfellte, Bs.

Gisborough, L.

Sandford, L.

Carrington, L.

Goschen, V. [Teller.]

Sandys, L.

Clifford of Chudleigh, L.

Grenfell, L.

Selkirk, E.

Conesford, L.

Gridley, L.

Strathcarron, L.

Cork and Orrery, E.

Inglewood, L.

Templemore, L.

Craigmyle, L.

Jellicoe, E.

Vivian, L.

Cranbrook, E.

Killeam, L.

Wolverton, L.

Cromartie, E.

Lauderdale, E.

NOT-CONTENTS

Annan, L.

Bowles, L.

Collison, L.

Archibald, L.

Brown, L.

Evans of Hungershall, L.

Beswick, L.

Buckinghamshire, E.

Gaitskell, Bs.

Blyton, L.

Burden, L.

Gardiner, L. (L. Chancellor.)

Bowden, L.

Chandos, V.

Garnsworthy, L.

Heycock, L.

Maelor, L.

Shackleton, L. (L. Privy Seal.)

Hill of Wivenhoe, L.

Phillips, Bs.

Sorensen, L.

Hilton of Upton, L. [Teller.]

Raglan, L.

Stonham, L.

Hughes, L.

Ritchie-Calder, L.

Strabolgi, L.

Kennet, L.

St. Davids, V.

Taylor of Mansfield, L.

Leatherland, L.

Segal, L.

Tayside, L.

Llewelyn-Davies of Hastoe, Bs. [Teller.]

Serota, Bs.

Wright of Ashton under Lyne, L.

On Question, Amendment agreed to.

Resolved in the affirmative, and Amendment agreed to accordingly.
Lord BROOKE of CUMNOR: Amendment No. 23 is consequential. I beg to move.
Amendment moved—
Page 56, line 29, leave out from ("second") to end of line 31 and insert ("column").—(Lord Brooke of Cumnor.)
Lord BROOKE of CUMNOR: Amendment No. 24 also is consequential. I beg to move.
Amendment moved—
Page 56, leave out lines 33 to 41 and insert—

("Year of period of delay

Appropriate Proportion

1st year

one-third

2nd year

two-thirds")

—(Lord Brooke of Cumnor.)

House resumed.

NATIONAL INSURANCE(No. 2) BILL
7.15 p.m.
Baroness PHILLIPS: My Lords, I beg to move that this Bill be now read a second time. It may be helpful to your Lordships if I begin by outlining the changes in the rates of benefit that are proposed in this Bill. This is, of course, its main purpose, and as your Lordships will already know, it provides for increasing the standard weekly rates of the flat-rate national insurance benefits, currently £4 10s. for a single person and £7 6s. a week for a married couple, by 10s. and 16s. respectively, to £5 and £8 2s. It is proposed that the increased rate should be payable from the beginning of November. The Government's objective is to restore fully to these benefits the real value, the purchasing power, of the rates of benefit introduced
354
two years ago, in October, 1967. I think it important to remind your Lordships that the values achieved by these increases in October, 1967, were 2d per cent. above the levels of the benefits which the Government found in payment when they took office in 1964. If I may put it another way, the benefits were then given a value of 4s. in the pound above those of October, 1964, and it is this considerable margin that the new rates of £5 and £8 2s. are designed to restore.
It may be suggested that the proposed increases are inadequate, and that the Government should provide, as a means of helping retirement pensioners, in particular, an amount which would not only compensate them for price changes since October, 1967, but also enable pensioners to share in rising living standards. Indeed, it is the Government's long-term policy, set out in the White Paper, National Superannuation and Social Insurance, that inflation-proofing is only a minimum objective. But, as the White Paper makes clear, a responsible Government must take into account the general economic situation in determining the levels of social security benefits.
Against that background, the Government have decided that they can do no more than restore the value of benefits to their October, 1967, level. But your Lordships can be assured that, as in the past, the Government are determined to maintain the value of contributory benefits, the staple source of income on which so many pensioners with limited resources rely. This is an obligation that we owe all the retired members of our community.
Turning to the proposed increases in the levels of benefits paid under the industrial injuries scheme, the Bill provides an increase in disablement pension from £7 12s. to £8 8s. for a person with a disability assessed at 100 per cent. Injury benefit, which is paid with earnings-related supplement, is to be increased by 10s. from £7 5s. to £7 15s. This will preserve, at £2 15s. a week, the differential

355
advantage this benefit has over national insurance sickness benefit. Increases are also proposed for other industrial injury benefits.
With your Lordships' permission it may be convenient at this point if I make a brief reference to the Government's proposals for increases in supplementary benefit rates. The supplementary benefit scheme embodies great improvements introduced in 1966 to make better provision for the most vulnerable members of the community. There scheme of supplementary benefits ensures that no one need have an income below the minimum guaranteed by Parliament. Amending supplementary benefit regulations, which will be put before your Lordships later this week, will provide new rates that are an improvement of between 23 and 24 per cent. in real purchasing power since 1964, and this takes no account of the 10s. long-term addition introduced in 1966.
It may be helpful if I explain to your Lordships the reason why the increase in supplementary benefits in November is smaller than the increase in contributory benefits. It is that these increases are a second instalment, additional to those which have been in payment to persons in receipt of supplementary benefits since October, 1968. The increases now proposed will, therefore, bring the supplementary benefit increases up to the same total amount as is proposed for the contributory benefits; namely, 10s. for a single householder and 16s. for a married couple, over the period since October 1967. But those in receipt of supplementary benefits have had the advantage of receiving the first instalment of this increase since October, 1968.
The benefit improvements brought about by the Bill now before your Lordships will at one time or another affect a large proportion of the adult population. In all, about 9¾ million people will be better off as a result of the increases in National Insurance benefits and about 320, 000 will benefit from the increases in Industrial Injury benefits, Among these people are some 7 million retirement pensioners and about 530, 000 widows, including 140, 000 widowed mothers. About 1 million people will receive the increased flat-rate sickness
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benefit, and unemployment benefit is paid to roughly 300, 000 beneficiaries. This is the measure of the proposed changes in benefits. The people whom the Bill sets out to help are those who are not fit or earning; they are the elderly, the sick, the widowed, the unemployed; essentially the groups for whom our society has the obligation to provide protection and succour.
Before moving on to the Government's proposals for financing the improved levels of benefits, there are two minor, but nevertheless important, benefit changes to which I must refer. The first of these is the proposal to increase the limit beyond which the earnings of a retirement pensioner during the first five years after minimum pension age start to reduce pension entitlement. It is proposed that the limit be raised from £6 10s. to £7 10s. for a married couple. This means that from November they will be able to count on £8 2s. a week by way of pension, and £7 10s. by way of earnings, a total of £15 12s. a week before the earnings rule begins to take effect.
The other change is one which I am sure will commend itself to your Lordships as a worthwhile and humane improvement. The Bill provides an extension of cover for death grant in respect of handicapped people who have never themselves been able to work and contribute to insurance. By this change, death grant in respect of a handicapped person may be payable on the insurance of a close relative. The absence of death grant on the death of such people has in the past often caused distress to relatives who have devotedly cared for someone disabled throughout their youth. This change will affect some 3, 000 cases each year, and is one the Government are pleased to be able to bring forward at this time.
The noble Lord, Lord Drumablyn, said in his comments on the Statement on the Bill, reported to your Lordships on June 10 by my noble friend Lady Serota, that the salient and outstanding point about it was the need to raise £430 million. I should like to say a word in genera] about that comment. As your Lordships are aware, the National Insurance and Industrial Injuries schemes operate on a "pay-as-you-go" basis. This means that money paid into the

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Funds, either by way of contributions or Exchequer support, is used to pay current benefits. It is therefore inevitable that when benefits are increased additional money must be raised. Of the £430 million a year which has now to be found, about £250 million is necessary to pay for the increased benefits for which the Bill provides. The remainder, of the order of £180 million, is needed to put the National Insurance Fund back into a reasonable balance. Over the last two years a number of factors have combined in a way which has involved payments out of the Fund in excess of the payments into it. To support the current benefits, therefore, and to raise them to the new levels this grand total of £430 million has to be raised. Quite simply the sum is needed to pay for the scheme of insurance benefits we now have.
Given the need to raise this substantial sum of £430 million, the Government had to choose between a number of courses. One possibility would have been to raise the money in two stages, the first in November and the second at the time of the quinquennial review due next April. But the Government believe that the interests of all concerned, both insured people and employers, are best served by having the increases rolled into one instead of two in quick succession, with all the uncertainty and inconvenience which that would entail. Had the customary method of raising the amount required been followed, an increase in flat-rate contributions amounting to 3s. 4d. a week would have been needed from both employees and employers. This would clearly have been excessive in relation to the lower-paid; and a disproportionate increase on the employer's side would have been quite unjustified in the present circumstances, as also would have been any move to distort the National Insurance scheme by disproportionate reliance on Exchequer support.
In these circumstances the Government decided on a tripartite solution. First, the weekly flat-rate contribution should be increased by 1s. for a man and 11d. for a woman. Second, the 3¼ per cent. graduated contribution paid on earnings between £18 and £30 a week should be increased to 3¼ per cent. And third, there should a special additional Exchequer payment to compensate for the
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fact that the present graduated contributions do not attract Exchequer support The additional graduated contributions paid by all employees and their employers—whether contracted out of the state scheme or not—will of course earn additional graduated pension. And the Government now propose that the graduated element of retirement pensions, that already earned as well as that 10 be earned in the future, should be included in the biennial reviews of pension and other benefit rates which are to be an integral part of the new scheme planned to start in 1972. By this means, contributors can be assured that all pension earned by the payment of graduated contributions under the 1961 scheme will be guaranteed against erosion by inflation.
A number of objectives are achieved by raising the necessary amount in this way. It will ensure—and I believe that this will find favour with your Lordships—that for some 6 million workers who are earning less than £18 a week, the increase in contributions will be no more than 1s a week. And the planned restructuring of the present graduated scheme will pave the way for an easier transition to the new scheme of earnings-related benefits planned for 1972. For the higher paid worker, the proposals mean that he will pay the largest increase. But it is most important to see this in perspective. The extra 7s. 7d. which a man earning £30 a week or more will pay represents an additional 1-3 per cent. of his earnings. That does not seem too much to ask the more highly paid to contribute to the welfare of non-earners. The additional contributions to be levied on men earning intermediate amounts will range from an increase of less than 0-5 per cent. for the man earning £12 a week, through an increase of 08 per cent. for the man earning £23 to the 1-3 per cert. I have mentioned for the man on the £30 a week mark.
Suggestions have been made in other places that the National Insurance scheme should be financed through the tax system, and of course such a proposal needs serious and informed discussion. Experience suggests that the contribution-pension relationship is well understood by the public and in its proposed earnings related scheme the Government intend to strengthen this fundamental link. My Lords, the proposals in this Bill keep faith with the very many people

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who, because of age, widowhood, sickness or unemployment, have to rely on the National Insurance and Industrial Injury schemes for the income on which to maintain their standard of living. The Bill seeks to fulfil the Government's responsibility to meet that obligation by fair and just contributions to the cost of providing that support. I commend the Bill to your Lordships and hope it may be given a Second Reading. I beg to move.
Moved, That the Bill be now read 2a.—(Baroness Philips.)
7.29 p.m.
Lord DRUMALBYN: My Lords, I should like to thank the noble Lady for her very brisk and clear exposition of this Bill. I think there is a substantial amount of agreement between us. There are certain things I should like to welcome right away. I would welcome the increase in the earnings limit and also welcome the increase in the death grant. That is something which is not increased at every rate review. I should like to ask a question about the close relatives. I can speak from personal experience on this aspect of the matter. I had among my own close relatives the experience of a young boy who was never able to look after himself at all, and who, because his parents were abroad, was left with an aunt and an uncle by marriage. I do not see why the aunt and uncle should be left out of the list of close relatives. I should like to give notice to the noble Baroness of my desire to move an Amendment on that point. It is a small point, but this kind of circumstance must often exist with people who are on foreign postings, for instance, where the boy or girl cannot be said to be living with their parents, grandparents or brother or sister. I commend this particular point to the notice of the noble Baroness. We also agree entirely that when there is to be a review it is right to roll it all into one, rather than make two bites at the cherry. This is obviously good sense.
There are a good many comments that I should like to make on this subject, and perhaps the noble Baroness will bear with me while I make them. As she has said, the memorandum has said that the main object of the Bill is to restore to flat-rate retirement pensions and other insurance benefits the values
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lost because of the rise in prices in the two years since the last increase in October, 1967. So we have an increase of 10s.—about 7 per cent.—for a single person and 15s. for a married couple. Whether the Bill will fully achieve its main objective is, of course, open to doubt. I am informed that by April of this year the value of the single pension and other benefits had already been reduced, as a result of the rising cost of living, by 9s. If that is so, it seems unlikely that 10s. will suffice by November (which is the time at which the increase is due to come into effect) to restore the value of the pension to the October, 1967, level. By contrast, on every one of the occasions when pensions were raised by the Conservative Government, their value was increased to a level higher than their previous value, as indeed the present Government have done on the previous two occasions. Until now there has been a steady improvement in real value, and it is perhaps worth commenting that this is the first occasion for some time when there has not been an increase in real value but only a restoration of value.
At the same time, I would suggest that, whatever may be the determination of the Government to retain the value of the contributory benefits which the noble Baroness has declared, it would be folly to promise at any time that the real value will always be restored every two years, even though there is the biennial review. The value of insurance benefits cannot be isolated from the general state of prosperity, or otherwise, of the country as a whole. We all hope that the standard of living in this country will continue to rise with reasonable steadiness, but no Government can guarantee that it will not suffer a setback in any particular two-year period. Dietitians, sociologists—and even some politicians—sometimes talk as if there were some absolute standard laid up in Heaven which can be established as holding good for the whole population at all times and in all places and in all circumstances. But I think we all recognise that these things are relative, and I believe that it would be unwise to seek to guarantee that at biennial reviews there will always be a restoration—let alone an increase—of the value of the pension to what it was at the last review. It should be for consideration at each review what extra burden, if

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any, it is sensible to place on the working population in order to help those who, temporarily or permanently, have ceased to work.
At least this must be said—and I have to say one or two disagreeable things, as well as agreeable ones. The question of how to pay for any increase must always be considered at the same time as the increase itself. I hope it will never again be allowed to happen that the increases are announced at one time, and the Government's proposals as to how they are to be paid for at a much later date. On this occasion, some two months elapsed between the Chancellor's announcement of the increase in the Budget and the laying of the Bill providing for increases in contributions, accompanied, of course by the explanatory White Paper and the Government Actuary's report.
Considering that the increase is not to take place until next November I submit that the Chancellor's announcement was, to say the least, precipitate. The Government Actuary, in paragraph 11 of his Report (Cmnd. 4074) says that in the financial year 1968-69 the outgo of the National Insurance Fund exceeded income by about £80 million, and it is estimated that if no action were taken the deficit in the current year would be about £125 million and would continue to increase. If one looks at Table 3 of his Report one sees that even taking into account changes in contribution there will be a deficit in the National Insurance Fund in the current financial year of £100 million. No wonder the Government had to transfer £200 million from the National Insurance Reserve Fund last December! And it seems that the £200 million will have been well nigh exhausted by next April, and there is little prospect of the Fund being replenished.
Over the next two years the operational surplus of income over outgo is estimated as only £12 million; and that is on the assumption that unemployment will fall to 2-2 per cent. in those two years. So the Labour Government will have dissipated, I think it is, about a fifth or so of the reserves by the end of this year, and do not intend to replace them. I wonder if the noble Baroness will tell us whether the Government regard these reserves as being available to meet deficits as they occur until the reserves are ex-
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hausted? It would obviously be unwise to allow them to be exhausted altogether, because one must keep certain reserves in hand to meet fluctuations in demand for benefits.
No doubt the Government regard the adverse experience of the National Insurance Fund as being just bad luck. But it is possible to take a different view. Certainly some of the factors have been well known. As the Government Actuary puts it:
"changes in experience have been large and persistent".
As he says,
"there is clearly an underlying upward trend in sickness claims"—
And he goes on:
"The trend to earlier retirement"—
referred to in an earlier report of his—
"has continued".
So these are two big factors which have been going for some time. Indeed, this trend to earlier retirement has been encouraged—and I do not complain of that. It is inherent in redundancy schemes that those who have reached retirement age should be the first to be laid off. But, my Lords, it was anything but prudent—it was hardly even consistent with the Government's own economic policy—to instruct the Government Actuary to assume a rate of unemployment of 2 per cent. in the current financial year. And this is not just hindsight: the Government were warned at the time of the las; review that they were being somewhat over-optimistic.
There are also fewer in employment: there are over 200, 000 fewer than in June, 1964, and some 640, 000 fewer than in June, 1966, according to the latest estimate in the Digest of Statistics—an adjusted estimate, I understand. To the extent that this reflects the tendency for full-time education to be continued, and for better use to be made of those in employment, it is of course to be welcomed. But it is idle to pretend that it was not at least in part predictable in 1967.
I come now to the way in which the Government propose to find the money to pay for the increases which, as the noble Baroness said, amount to £250 million in respect of national insurance and industrial insurance benefits themselves, with a sum of £180 million to put the National

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Insurance Fund back on to a reasonably sound footing. The noble Baroness called this a "grand" total—it is at any rate a formidable one. The big question is this: what differences in contributions is it reasonable to expect people with different earnings to pay for the same basic benefits? To some extent, of course, there are already differences in benefits. There are the additional pension benefits accruing from the graduated contributions introduced in 1961 for those not contracted out of the scheme, which covers earnings between £9 and £18—the 1959 scheme—and there are the graduated sickness and unemployment benefits earned by the ½ per cent. contribution on earnings between £9 and £30 introduced under the 1966 Act.
The problem which faced the Government in 1959 was not dissimilar from that facing the present Government, and almost inevitably the solutions are not dissimilar, unless of course one had chosen to go over to a tax-based form of payment. The problem is how to avoid placing too heavy a burden on the contributor with low earnings. In the circumstances of post-war high employment and high demand, differentials in earnings in different kinds of employment have widened very considerably, for reasons that are well enough understood.
At the present time a married man earning £12 a week pays 19s. 4d. in national insurance, industrial injuries and National Health Service contributions, or 19s. 1d. if he is contracted out, which is over 8 per cent. of his earnings, and he will pay an extra 1s. under this Bill; so he takes home about £11. In return for this he will be entitled to a retirement pension of £8 2s., plus rent if his capital resources fall before a certain level. His pension, plus the 1961 graduated pension earned, and supplementary allowances will thus very nearly equal his net earnings: so he is certainly getting a very good bargain.
But plainly, all the same, there is a limit to the proportion of earnings that can be taken from him to qualify for his pension. In 1964, he was paying 5s. less than he is paying now, or 6s. less than under the Bill, and at that time he was earning a lesser pension, a joint pension of £5 9s. 0d. It is equally plain that there is a limit to the differences
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that contributors with higher earnings can be expected to pay for much the same benefits. So one has got to find somehow a middle way between these two. In 1959 the Government's solution was to hold the weekly contribution, not increase it at all but hold it, for people earning less than £9, at the existing level, and place a charge on all earnings between £9 and £15, the upper limit being increased to £18 in 1964. That charge is now 4¼ per cent.
In this Bill the Government are proposing to increase the basic weekly contribution by 1s. for men and 11d. for women, and at the same time to extend the bracket of earnings on which the charge is placed from £18 to £30 a week to bring it in line with the range of earnings on which the half per cent. charge is made for graduated sickness and unemployment benefits. The difference between the steps that were taken on those two occasions are, in the first place, that the charge on that part of earnings between £18 and £30 is to be 2¾ per cent. in addition to the half per cent. for graduated sickness and unemployment benefit; secondly, that whereas it was, and still is, possible for an employer to contract out of the 1959 graduated contributions scheme if his pensions scheme for his employees provides at least equivalent benefits as under that scheme, it will not be possible to contract out of the extended graduated contributions in this Bill. I think I am right in saying that. Thirdly, that the additional retirement pension earned by graduated contributions under the 1959 scheme was not affected by subsequent pension reviews, whereas the Secretary of State for Social Security has stated that it is the Government's intention that all the pension "bricks", as they are called, the blocks of £7 10s. 0d. of graduated contribution which earn, I think, 9d. each in additional weekly pension, will be revalued every two years in accordance with any rise, but not apparently any fall, in some index.
I should like to ask the noble Baroness what is the index. The pledge, after all, is specific, and so the index should also be specified. I cannot find any reference in the Bill giving statutory form to that intention. It may be there, and, if so, I have missed it. I do not know if the noble Baroness could tell me whether

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this pledge is in the Bill or not. The Secretary of State, it seems to me, has been wise not to lay a statutory duty on future Governments, Conservative, or Labour, if there are any, in view of the Government's manifest intention in the Redistribution of Seats Bill not to be bound by any such statutory duty. It would have lacked credibility, as indeed does his statement of intention. I do not cast aspersions on his statement of intention; it may well be his intention and perhaps it is the intention of the present members of the Cabinet, but it is only their intention.
I think this has to be borne in mind, because the foundation of the National Insurance scheme—and this is tremendously important—is public confidence in the determination of successive Governments to meet the obligations which they have undertaken under the scheme. To have any credibility they should be written into the Bill if they are really intended to last. We are not just talking of the next biennial review; we are talking, after all, of a long period ahead. The actual continuation of the accumulation of the "bricks" may not go on very long, but the revaluation, as I understand it, is intended to go on for a long time.
There is one thing which I have not seen discussed at all so far, and the noble Baroness did not mention it, and that is the effect of these arrangements on the self-employed and the non-employed. The total combined contribution for a self-employed man over 18 is to be raised by 2s. 8d. to 24s. 10d. and for the non-employed by 2s. 2d. to 16s. 5d. Perhaps the noble Baroness will tell me whether I am right in thinking that they will not be affected in any way by the graduated contributions scheme. The fact that the increase is more than double the increase in the basic flat-rate contribution for employed persons would indicate that this is so.
It is well that we should be aware of the proportions of the £430 million which are to be borne respectively by the flatrate increases, the new graduated contributions and the Exchequer. As I look at the Government Actuary's Report it seems to me, if my arithmetic is correct, that in the year 1970-71 they will be 21 per cent. for the flat-rate increases, 62½ per cent. for the new graduated con-
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tributions and 16½ per cent. for the Exchequer. This means a very big switch to graduated contributions. The revenue of the Fund in 1971-72 will consist of only 55 per cent. from flat-rate contributions, 28 per cent. Torn graduated contributions, 15 per cent. from the Exchequer and 2 per cent. from interest.
I draw the attention of noble lords to the diminishing proportion of the Fund's income to come from the Exchequer. This is very much at variance with the criticism of the 1959 arrangements that came from the other side of the House, although it is not necessarily wrong for that reason. There is no principle involved here. Exchequer contributions can be adjusted from time to time, so there is no principle involved. But I think it right to draw attention to this point, particularly as I think it was indicated in the Government's White Paper that it was proposed to hold the Exchequer contribution at about 18 per cent. This does not seem to be borne out by the Government Actuary's figures.
What is of far greater important in the long run is the principle of revaluing graduated contributions. In themselves, they are perhaps not going to amount to all that; the amounts involved in revaluing graduated contributions over the next 2½ years are really comparatively unimportant, although the liability for the future is by no means negligible. Perhaps the noble Baroness will confirm my calculation that some 200 million "bricks" will accumulate over that period, each entitling the contributor to an extra £1 19s. 0d. I think I have over simplified that because I have not taken into account the women's side of it; but it is an extra £1 19s. a year in pension. So the total cost of revaluation might easily add quite substantially to the liability over the years, and it seems to me quite irresponsible for the Secretary of State to yield so lightheartedly to the special, pleading of some large companies and extend the revaluation to "bricks" accumulated under the 1959 Act.
When we come to discuss the Government's long-term proposals—if we ever do—we shall have to consider most carefully the arguments both ways. It may well be necessary to revalue graduated

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contributions from time to time, though whether it should be done in proportion to the up-rating of the basic pension I should doubt. There is a great difference between assuring everyone of a basic amount which will keep pace roughly with the cost of living and may be expected to increase as living standards rise and the wealth of the nation grows on the one hand, and automatically readjusting values of a pension directly related to individual graduated contributions on the other.
The point I wish to make is that our acquiescence in the present proposals must not be taken as committing us to the principle involved. That is a matter for the future when we have all the considerations before us. Side by side with the need for everyone who is able and willing to work to be assured of a basic minimum on which to live when he retires or ceases to be able to work, we must always have regard to the necessity, if we are to survive in freedom as a great industrial nation for people to be encouraged not only to save through contributions to a pay-as-you-go State insurance fund, which spends all its revenue from year to year, but also to save through occupational schemes and to save for themselves—to invest their savings and so increase the wealth of the nation. These two objectives have to be reconciled. The great advantage of the 1959 scheme was that it did not adversely affect individual saving or occupational pensions schemes to any great extent; indeed, occupational pensions schemes have continued to grow and to go from strength to strength. We must ensure that both collective savings and individual savings continue to be available for investment.
My Lords, what we have in this Bill, if I can sum it up, is a very belated and far from apologetic recognition that the means adopted in 1959 of raising money to pay for an acceptable level of basic pension in a time of continuing erosion of the real value of that pension were not only unavoidable but entirely proper. The 1946 Act assumed, first of all, that everyone should pay the same price for the same benefits; secondly, that the value of money would remain more or less constant as it had done in the period between 1925 and 1939; and thirdly, that over the years each individual's contri-
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butions would pay for pensions and other benefits, of course allowing for those who came late into the scheme.
By the late 1950's it had become abundantly apparent that each individual's contributions would not pay for an acceptable level of basic benefits. The Boyd-Carpenter measure, therefore, added a system of graduated contributions. Unfortunately, the public, and even some of the insurance experts who ought to have known better, persisted in comparing the graduated contributions with the ultimate pension that those contributions alone would earn. They said it was a bad bargain. But the whole point was that even those who were paying the graduated contribution or the contracted out payment were getting a very good bargain, those even at the maximum were getting a very good bargain; taking pension and other benefits as a whole—the basic and the "bricks" and all the rest of it—while those who were paying only the basic contribution would receive far and away more in benefits than their contribution alone would strictly have entitled them to receive.
We have now come to the point where even the graduated pensions taken with the flat-rate contributions at their present level do not suffice to keep the Fund solvent. On the last occasion that the increases were made, I warned the Government that this would happen unless they introduced their long-awaited and long-promised earnings-related scheme very soon. I said that unless it was to be introduced in the near future they ought to increase the upper limit of £18 for graduated contributions, in spite of the difficulties that such increases make for those contracted out. Now they are raising the level in a different way, so as to avoid the difficulties for those contracted out, and I am sure that the Life Offices are duly relieved. But difficulties on contracting out are inherent in any State scheme which provides for periodic adjustment of benefits. The Government have said that they want occupational schemes and the State scheme to coexist. It is not enough just to express that as a pious hope. It is an absolute "must" that they should co-exist, in the interests of the economy and of the prosperity of the country and in the interests of our free way of life.
7.57 p.m.
Baroness PHILLIPS: My Lords, I am quite sure that the noble Lord, Lord Drumalbyn, would not expect me to reply in detail to the many factual points which he has raised with his usual skill. I well recall seeing him in action as a Minister, and he always displayed this great skill when dealing with Bills of this character. I would merely say, in relation to graduated pensions, that increased graduated pensions will be earned by increased graduated contributions. Admittedly, it is not a large amount, but the present graduated measures are a stage towards the Government's new scheme which is to be introduced next Session, when not only the noble Lord, Lord Drumalbyn, but all of your Lordships will have ample opportunity to debate the basic issues on which the noble Lord has touched to-night. On the question of the National Insurance Fund, I may say that the deficit in the current year was, and of course will be, due to the adverse experience troughs which the Fund is going through and which the higher contributions are designed to correct. Next year, the first full year in which the new contributions and benefits will operate, will show a surplus of £57 million over expenditure, even with the forecast deficit of £25 million in 1971-72—
Lord DRUMALBYN: It is £37 million.
Baroness PHILLIPS: Yes, I beg your Lordships' pardon; £37 million—what is £20 million when we are dealing with it only on paper? Even with the forecast deficit of £25 million in 1971-72, the income will still exceed the expenditure of the first two full years. That is consistent with the pay-as-you-go basis by which the scheme is financed. I take the point that the noble Lord has made about the death grant, and I look forward to discussing this subject with him when he raises the question in an Amendment. The National Insurance Fund is subject to the changes which the noble Lord has outlined and to which I made some reference—the fact that there are more retirement pensioners and that we may expect more retirement pensioners. From his opening words I take it that the noble Lord at any rate welcomes the major introduction of the increases in the benefits, and I hope that as the Bill progresses we
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shall be able to debate in more detail some of the points which he has raised this evening.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

HOUSING BILL
8.0 p.m.
House again in Committee.
Schedule 3, as amended, agreed to.
Clause 53 [Modification of Rent Act 1968 in relation to improvements assisted under Part I of this Act]:
On Question, Whether Clause 53 shall stand part of the Bill?
Lord BROOKE of CUMNOR: I have put down an Amendment to leave out Clause 53. For all I know, there may be a very good reason for Clause 53 to be in the Bill, but I confess that I have reached a Part of the Bill which at the moment I find difficult to understand. At present, if a landlord carries out improvements he is in the normal case entitled to an increase of 12½ per cent. of his expenditure in the rent. If I understand Clause 53 aright, its purpose is to terminate that. Prima facie that would mean that people who had been thinking of carrying out improvements will now stop. That is clean contrary to the general purpose of the Bill, and therefore I presume that there is some reason for Clause 53 which has so far escaped my notice.
I turn to the explanatory Memorandum at the beginning of the Bill, which says:
"Clause 53 modifies the Rent Act 1968 so that the provisions enabling the r; nt to be increased by 12½ per cent. of the landlord's expenditure on improvements are not to apply where grant is paid under Part I in respect of a dwelling subject to a regulated tenancy."
It may be that the wording of Clause 53 is so drafted that it confines the impact of the clause strictly to dwellings subject to a regulated tenancy, but I confess that does not appear on the face of the clause. My one concern in all this is to get the houses improved as rapidly as possible, and my reason for querying this Clause 1s that it seems at first sight to deny the owner of the house any recompense if he spends money on carrying out improvements with the aid of grant. I

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shall be very grateful if the noble Lord, Lord Kennet, will explain.
Lord KENNET: I shall hope to explain this matter to our mutual satisfaction. If the noble Lord's Amendment to leave out the clause were carried it would enable the landlord under an existing regulated tenancy who carries out improvements with the aid of grant to increase the annual rent (if a fair rent has not been registered) by 12½ per cent. of his net expenditure. It would restore the effect of Sections 21 (5) and 25 (1) of the Rent Act 1968 which deal respectively with contractual tenancies and statutory tenancies and which are disapplied in these circumstances under Clause 53 of the Bill.
Where improvements are carried out with the aid of grant in the case of existing regulated tenancies, Clause 52 together with Schedule 3, provides a scheme for the phasing of the increase in rent up to the registered rent. Under that Schedule, the increase—if it is not less than 22s. 6d. per week—is to be phased evenly over three stages at annual intervals; if it is less than 22s. 6d. per week the maximum increase may not exceed 7s. 6d. per week in any year. The full fair rent will thus be recoverable not later than two years after the fair rent is registered.
Under the present system a condition governing rent attaches to an improvement grant, and it applies for three years. In the case of regulated tenancies the condition limits the rent to the 1963 gross value plus 12½ per cent. per annum of the net cost of the improvements to the landlords, or to such higher amount as the local authority may fix. Under the Bill, rent will no longer be governed by any condition attaching to the grant; instead, the phasing, by providing some abatement of the rent for up to two years, in effect gives some benefit to the tenant from the contribution made by way of grant from public funds. Phasing of the increase in rent in these cases was proposed in paragraph 36 of the White Paper, Old Houses into New Homes(Cmnd. 3602). If the landlord were to be entitled to increase the rent straight away by 12½ per cent. of the net cost of the improvements—which would be the effect of omitting Clause 53—this would limit or possibly nullify the effect
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of the phasing scheme, depending on how near the 12½ per cent. increase brought the existing rent up to the full fair rent. In these cases the existing rent (which would not have been a registered fair rent; otherwise Sections 21 (5) and 25 (1) would not apply) could possibly be at a relatively high level already.
This is, as the noble Lord said, a complicated and confusing part of the Bill. The essence of the matter is that the Bill as drafted, without the Amendment, proposes to get rid of the old 12½ per cent. provision in these cases because of the new provision for registration with the phasing coming into effect of the registered rent, which we were discussing on an earlier Amendment.
Lord BROOKE of CUMNOR: I look forward to studying carefully in Hansard what the noble Lord has said. But this is a complicated matter, and I am not sure that I have followed it. So far as I can judge, the effect of this Clause 1s to slow down grant-aided improvements. Without the clause the landlord could be certain that he would get his 12½ per cent.; with the clause he will get something, but phased over a considerable period. It appears, therefore, that this Clause 1s contrary to the general purpose of the Bill. However, the noble Lord is obviously convinced that it is an essential part of the Bill and therefore, while I reserve the right to return to it if I find his explanation completely incomprehensible or inconsistent when I read it in Hansard, in the meantime I shall not press my Amendment to leave out Clause 53.
Clause 53 agreed to.
Clause 54 agreed to.
Clause 55 [Restriction on powers of court under section 54]:
Lord BROOKE of CUMNOR Lord BROOKE of CUMNOR moved Amendment No. 25:
Page 30, line 33, at end insert—
"(6) This section shall not apply if the tenant is entitled to receive supplementary benefit under the Ministry of Social Security Act 1966."
The noble Lord said: I beg to move Amendment No. 25. This is probably, by common consent, a difficult matter. Clause 55 was not in the original Bill; it was introduced by the Government at a late stage in another place and is designed,

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as I understand it, to protect the tenant who would have difficulty in paying a higher rent. I suspect that the reason why it did not appear in the Bill as originally presented by the Government to Parliament was that the Government are genuinely concerned with the improvement of houses, and did not wish house improvement to be held up because of the chance that a particular house in a terrace was occupied by a tenant who would find difficulty in paying a higher rent. Consequently, I imagine, the Government brought in this new clause.
I entirely agree that one must temper the wind to tenants who cannot afford to pay a higher rent. Nevertheless, at the same time one must recognise that this does strike a blow, which might be quite a heavy blow, at house improvement in many areas. For example, I think it is generally accepted that improvements can be most economically and effectively carried out if they are taken right through a terrace of houses, rather than if Nos. 13, 19, and 27 have to be omitted because there is some difficulty over the tenants in those particular houses. In this clause the Government seems to have surrendered to those difficulties. I am moving this Amendment in the hope that it may reduce the difficulties.
The clause, broadly speaking, protects from the necessity of having to pay a higher rent due to house improvements those tenants who are eligible for rate relief. That is a way of doing rough justice, and of ascertaining those tenants who are less well-off. In this Amendment I am suggesting that the clause should not apply if the tenant is entitled to receive supplementary benefit from the Ministry of Social Security. Under normal supplementary benefit arrangements, as the Supplementary Benefits Commission has taken over from the National Assistance Board the rent is paid by the Commission, as it was formerly paid by the Board. Therefore, if for good and sufficient reason the rent is increased, the Supplementary Benefits Commission would meet that increased rent, just as the National Assistance Board did in the old days.
It seems to me that in the interests of the houses it would be desirable to accept an Amendment of this kind. I think the Government must agree that the Clause itself disadvantages their main purpose of
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getting as many houses as possible improved. It is brought in for compassionate reasons, in order to protect the tenant with a low income from having to pay higher rent. But if that higher rent would not be paid by the tenant in any case but would be paid by the Supplementary Benefits Commission, there seems to be no reason why the house should be made to suffer and be deprived of the improvements which by common consent it needs.
I therefore hope that perhaps the noble Lord will accept this Amendment, which is moved in no hostile or militant spirit at all. It is simply moved in a desire to be helpful and to ensure that the compassionate terms of Clause 55 may not operate in cases where compassion is not needed, and may not operate in such a way as to bold up unnecessarily that improvement of houses which I knew the noble Lord, Lord Kennet, like all of us, has so much at heart. I beg to move.
LORD KENNET: I acknowledge the noble Lord's desire to be helpful. Since we have a thin Committee I will answer him in shorthand. The point is that you may not be on supplementary benefit for ever. Although it is true that supplementary benefit recipients can in general expect to receive additional benefit to cover a rent increase following improvements—and therefore there is at first sight a case for the noble Lord's Amendment—yet we must consider the position of tenants who are temporarily in receipt of a supplementary allowance. If they are wage-stopped their allowance would not cover any of the rent increase; or if they are near the wage-stop limit they would not get the whole of the increase. But whether or not the tenant was wage-stopped when he returned to work and his supplementary benefit came to an end his income after his return might still qualify him for rate rebate but it would then be too late for him to resist improvement works. In the case of a supplementary pension also his circumstances may change so that while being entitled to a rate rebate he was no longer entitled to a supplementary benefit. As I say I have answered in a form of shorthand. If it is too shorthand I will give the noble Lord and the Committee more chapter and verse for it.
LORD BROOKE of CUMNOR: No, I am sufficiently familiar with shorthand to understand what the noble Lord is

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saying but I should like him to accept from me that there is the germ of an idea underlying this Amendment. I never supposed it was perfectly drafted to cover all conceivable cases and I never had any intention of pressing the Amendment. But before I withdraw it I should like the noble Lord to undertake to look at this further to see whether something could not be made of this idea. I give him full credit for wanting to see all improvable houses improved and for not wishing that potential improvements should be held up through matters which are extraneous to the condition of the house.
It seems to me that it might still be possible to amend this Clause in some way as would bring it about that the fact that at a particular time the tenant was eligible for rate relief would not be an absolute bar, as it is now under this clause, to the improvement of the house. As I say, I think there is a germ of an idea in this Amendment. I think this clause, having been introduced at a late stage in another place, has not received as much examination as those clauses which stood in the original Bill have done, and I think it will be found over the years that Clause 55 unamended is so rigid that it is going to hold up desirable improvements. I hope, therefore, that the noble Lord will examine this to see whether something can be made of it. Meanwhile, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 55 agreed to.
Clause 56 [Supplemental]:
Lord KENNET Lord KENNET moved Amendment No. 26:
Page 30, line 38, at end insert—
("(2) The power of the Lord Chancellor under section 106 of the Rent Act 1968 to make rules and give directions for the purpose of giving effect to the provisions specified in subsection (3) of that section shall extend to sections 49 and 54 of this Act.")
The noble Lord said: The purpose of this Amendment is to give the Lord Chancellor power to make county court rules governing the procedure for county court proceedings under Clause 49, which concerns a tenant's appeal against the issue of, or a landlord's appeal against the refusal of, a qualification certificate in
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"already improved" cases; and Clause 54 which deals with a landlord's application to enter a dwelling and carry out improvements to which the tenant has not consented. The intention is that the rules to be made should, first, enable Clause 49 appeals to be heard by county court registrars, and, second, make the landlord or tenant other than the appellant a respondent to Clause 49 proceedings, because if nothing were done only the local authority would be respondent. These changes meet points which were raised in the Committee stage in the House of Commons.
The possibility of costs being awarded against a tenant on a landlord's appeal is, I believe, already adequately covered by the "costs" provision in Clause 49 (3), which will effectively protect a respondent against any award of appellant's costs except where the respondent has conducted the proceedings improperly. A similar "costs" provision was inserted in the Protection from Eviction Act 1964 and the Rent Act 1965, and there is no reason to think that those provisions have not achieved the desired result. I beg to move.
Clause 56, as amended, agreed to.
Clauses 57 to 59 agreed to.
Clause 60 [Means of escape from fire]:
Lord AIREDALE Lord AIREDALE moved Amendment No. 27:
Page 32, line 9, after ("subsection") insert ("may").
The noble Lord said: I simply thought that to insert the word "may" where indicated would make for better English and would make the subsection easier to understand. I beg to move.
Lord KENNET: I am informed that we do not really have to insert the second "may" because it seems that in the existing drafting the word "may" in line 7 relates not only to the words "secure that that part is not used for human habitation" but also to the words "serve a notice under section 16 of the Housing Act.1961." It is a matter of interpretation and the best advice that I have been able to lay my hands on is that one "may" will suffice.
Lord AIREDALE: I think that one "may" will suffice, but I do not think it is very good English. But I am not prepared to divide the Committee on it. I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 60 agreed to.
Clauses 61 to 65 agreed to.
Clause 66 [Amendments with respect to amount of payments made for well maintained houses]:
8.21 p.m.
Lord BROOKE of CUMNOR Lord BROOKE of CUMNOR moved Amendment No. 28:
Page 39, line 13, leave out from ("1957") to end of line 15.
The noble Lord said: I beg to move Amendment No. 28. We have now come to Part V of the Bill which contains a number of improvements that I welcome. Clause 66 is entitled "Amendments with respect to amounts of payments made for well maintained houses." In certain respects it improves these payments but it only does so, if I understand it aright, in cases where the relevant date, within the meaning of Part III of that part of the Schedule so set out, is later than April 23, 1968. If we are to do justice we ought not to limit that justice. In this whole field, the noble Lord knows as well as I do, there has been long-continued ill feeling through the particular application of the law as it stands; and as I have said I welcome the relaxations of the strictness of the law which this part of the Bill offers. My one concern is that in removing some anomalies we shall be creating others.
Having stated the principle of Clause 66, it appears to me that we ought to apply that principle widely to all cases not yet settled instead of confining it, as the Bill proposes, to those cases where the relevant date is later than April 23, 1968—which I believe was the date of the White Paper. I hope that the noble Lord, who must himself have had to deal with many of these hard cases which this Bill is designed to render less hard, will view this Amendment sympathetically.
Lord KENNET: This is the perennial pipe-line problem which you come across whenever you propose to legislate in order to make things better for people. If there is a class of people who are
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engaged in doing something (in this case parting with their slum properties in return for compensation) and you propose to make life easier for them (in this case by increasing the amount of compensation) the question always arises: Who benefits? Those who are—how far?—through the pipe-line may benefit under the proposals. I think that the Bill as drafted has got it about right. Wherever you put it there are going to be people falling just outside the increased rate of compensation, who fall just before it. This is going to be unwelcome to them. If you put it further back, as the noble Lord proposes, there will be another generation, as it were, of slum owners who would not benefit from it. That would be unwelcome to them.
The purpose of the Amendment is to secure the benefit of the new payments for all owners of unfit houses which were in the pipe-line on April 23, 1968 so that all houses not actually acquired by the authority on that date would be eligible for the new payments.
The question therefore to which the Amendments are addressed is: What should be the appropriate starting date for the Bill's provisions? The Bill is already retrospective; and, I think, very generously so. It looks back to events which commenced after the publication of the White Paper on April 23 last year. The Government considered it right that the changes should operate from that date but in a way which would told a reasonable balance between owners of unfit property and the local authorities who have to make the increased payments. I shall come to the question of the Exchequer in a moment. We felt that it would be unfair to commit local authorities to payments which they could not have reasonably expected when they committed themselves to a particular slum clearance action. So the changes described in the White Paper and contained in the Bill hinge upon the first formal action of the authority—and that is in most cases the declaration of a clearance area. Similarly, owners of unfit property already affected by slum clearance action on April 23, 1968, could not have had any legitimate expectation that they would receive more than the compensation allowed for in the current compensation code at the time—which is still in force now. It is understandable that

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this is not welcome to them. But the date proposed in the Bill seems to the Government the most logical and defensible one for the introduction of the changes.
There is another point. To go back further as the Amendment proposes would have, I think, rather capricious effects. For example, if everything turned on the timing of the purchase of the unfit house, owners of houses in the same compulsory purchase order might get different treatment. They would be at the mercy of the inevitable leeway and irregularity of the administrative machine and the longer an order took the more likely it would be that an owner would benefit under the new code. Certain local authorities say, and perhaps certain noble Lords, that if this Amendment were accepted extra financial burdens would fall only on to the local authorities. Certain local authorities may be thinking, "It is up to us; why should we not be more generous, since it is we who pay?"
This is not the whole story. There would be extra financial burdens on the Exchequer by way of subsidy on cleared land used for new housing; and this would not achieve any increase in the rate of slum clearance because the houses affected by these Amendments were already in the pipe-line in April, 1968. The extra cost of slum clearance as a result of the Bill's provisions as drafted is likely to be about £5 million or more in a full year. This, I think, is a price well worth paying for the acceleration in slum clearance which will result once the owner-occupier's grievances are removed. But if the relevant date were made, say, the date of the actual purchase of the property, the additional cost over that £5 million would be more than £6 million—and almost all of that would have to be met in the near future.
So I hope that in view of the financial considerations and in view of what I believe will be the increase in uncertainty and dubiety as between different cases in the same part of the same town, the noble Lord may think it would be best to leave the commencing date for the new code at April 23, 1968.
Lord BROOKE of CUMNOR: It will have become apparent to the Committee that I have down a series of three
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Amendments, which have broadly similar purposes, to Clauses 66, 67 and 68. It is only the Amendment to Clause 66 to which I have spoken so far; and I certainly find it surprising to hear that if the Amendment to Clause 66 were accepted it would increase the cost falling upon the local authorities by £6 million a year. If that is so, I shall be greatly interested to hear what the additional cost expected under Clauses 67 and 68 would be if my Amendments were accepted. I do not wish to argue these at length. I want to ask in every case whether the Government will re-examine these matters between now and the final stage of the Bill. My own judgment is that people whose cases have already been settled will reasonably accept that the question of their payment could not be reopened as a result of this Bill. But where cases have not been settled I think there will be a very strong feeling that this date of April 23, 1968, is artificial as a dividing line. I have No information about whether local authorities would object to my Amendment to Clause 66. I shall be able to speak with confidence about their attitude when we come to Clause 68, but certainly it had appeared to me that the costs involved in my Amendments to Clauses 66 and 67 were probably considerably smaller than those that were involved in Clause 68.
My general belief is that where Parliament declares a new principle, as it is doing in each of these clauses, it is desirable that the new principle should be applied to settling all outstanding cases at the time of the legislation, whatever the original date of declaration—or the relevant date, or whatever it may be called—has been. I am not going to press this Amendment, but I shall ask on it, as I shall ask on the Amendments to Clauses 67 and 68, whether the Government will re-examine these matters sympathetically between now and the closing stages of the Bill to see whether by some Amendment, either by mine or some other, the quantity of painful anomalies may be reduced. I beg leave to withdrawn the Amendment.
Lord KENNET: Before the Question is put, may I say that I owe the noble Lord, Lork Brooke of Cumnor, a humble apology on procedural grounds. My remarks were addressed to the group of Amendments about the back-dating down

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the pipe-line—Amendments 28, 29, 30 and 31—which I think the noble Lord will agree stand together. It is true that he did not say that he was speaking to all four of them, but I am afraid I did not notice that and took it that he was. My observations about the financial effects were, of course, related to the totality of the group and not to Amendment 28 alone. I should perhaps revert to the question of the £5 million and £6 million as I may not have made it clear that £5 million would be the extra cost of slum clearance under the Bill as drafted, and £6 million would be the extra cost of slum clearance under the Bill as drafted and as amended by the noble Lord in this series of Amendments. I am glad that he is not going to press them upon the Committee this evening, and I will readily undertake to look again at this matter; though I should say that I foresee pretty grave difficulties, which I had already adumbrated, about coming to any different conclusion than that embodied in the Bill as drafted.
Amendment, by leave, withdrawn.
Clause 66 agreed to.
Schedule 4 agreed to.
Clause 67 [Payments in respect of partially well maintained houses or parts of buildings]:
8.34 p.m.
Lord BROOKE of CUMNOR Lord BROOKE of CUMNOR moved Amendment No. 29:
Page 39, line 21, leave out from ("maintained") to end of line 30.
The noble Lord said: I beg to move Amendment No. 29, and I think I can do so shortly, as the noble Lord, Lord Kennet, believes that he has already covered this and my next Amendment in his previous comprehensive reply. If he is able to break up his figures of £5 million and £6 million as between Clauses 66, 67 and 68, that would be of interest. So far as I am aware, Clause 67 introduces a new concept, the partially well maintained houses or parts of buildings—the case where either the exterior or the interior of the house has been well maintained. If here we are introducing that new concept I should have thought the argument was overwhelming to apply it to all individual cases not yet settled rather than to have the cut-off dates that
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are set out in the paragraphs (a) and (b), the paragraphs that my Amendment is designed to delete. Obviously, I need not speak at length about it, but I mast get on the Record that I have moved it formally. If the noble Lord is in a position to split up his global figures of £5 million and £6 million between the three clauses, that would be of considerable interest.
8.35 p.m.
Lord KENNET: The noble Lord is perfectly right. This provision is about houses partially well maintained inside or outside at the half rate, and is an entirely new concept. It was first announced on the publication of the Bill. It will take effect under the Bill as drafted after the enactment and there is no provision for back-dating. It would in fact be impossible to provide for back-dating on these partially well maintained payments because the houses will have been inspected on the basis of full maintenance in the traditional way until the Bill comes into force; so there will be no separate examination of the inside as opposed to the outside, or the outside as opposed to the inside, until this new drill goes into effect. The amount of money involved in back-dating the new rate of well maintained payments is small compared with the equivalent back-dating of the owner-occupied subsidies. Only about 11 per cent. of the tenanted houses qualify for payment and the additional cost might be of the order of £500, 000.
Lord BROOKE of CUMNOR: I have put my views on record and I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 67 agreed to.
Clause 68 [Payments to owner-occupiers and others in respect of unfit houses purchased or demolished]:
Lord BROOKE of CUMNOR Lord BROOKE of CUMNOR moved Amendment No. 30:
Page 40, leave out lines 25 to 31, and insert—

("(a) the house was purchased or vacated after 23rd April 1968, in pursuance of an order within the meaning of paragraph 4 (1) of that Schedule; or

(b) the house was purchased after that date in pursuance of an order made under Paragraph 2 of Schedule 2 to the Land Compensation Act 1961;").

The noble Lord said: I beg to move Amendment No. 30. The noble Lord, Lord Kennet, will perceive that Amendment No. 31 to Schedule 5 is linked with it. This is, of course, much the most substantial of these three Amendments. In this case I can say with assurance that the local authorities principally concerned are very anxious that the Bill shall be amended, either on the lines of my Amendment or in some other way. I have received representations on this matter from the Association of Municipal Corporations and from the Greater London Council and these bodies must between them cover most of the unfit houses which would be affected by this clause.
I welcome the general provisions of the clause so far as it goes, but I am seriously concerned about the anomalies that are going to arise. I know that the noble Lord, Lord Kennet, feels that he has given an answer to this Amendment and I do not wish him to reply at length; though I am sure he would not demur to my stating my case on this Amendment as I have done on the others. If I understand rightly, the additional payment which this clause will enact will be available to houses which are owner-occupied in cases where what is called the appropriate action is taken after April 23, 1968. The appropriate action may take various forms, but the typical case is that where the local authority declare a clearance area covering the unfit house that is in question. In such cases it is the date of the declaration that will affect whether or not the owner-occupier will be entitled to the benefit of Clause 68. It will be so if the declaration of the clearance area or the appropriate action, whatever other form it may take, was after April 23, 1968. A great many city councils and borough councils declared clearance areas before April 23, 1968, but have, as yet, acquired few, if any, properties in those areas. This is a common situation because local authorities are very hard pressed in this matter of slum clearance.
If one takes two cases—they may be adjacent cases—where the declaration occurred before April 23, 1968, there will be no benefit from this clause to the owners even though their actual houses may be acquired later than similar houses in other clearance areas declared after April 23, 1968, which will get the benefit
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of this clause. There is undoubtedly going to be a very keen feeling of injustice if the clause goes through unamended, and my Amendments are to apply the date of April 23, 1968, not to the declaration of the clearance area (or whatever the appropriate action has been), but rather to the date of the completion of the purchase of the house or other contingent happenings which may correspond to that. This, it seems to me, will be much more likely to be accepted as fair.
Quite frankly most people owning property, most owner-occupiers in a clearance area, are not likely to be explicit in their minds as to the date when a clearance order was made. There will be no doubt whatever in their minds as to the date when their property is compulsorily acquired or they are made to vacate it. That is the meaningful date for them and I am suggesting that it should be that meaningful date which should apply to determine whether or not they are entitled to the additional payments. I sincerely believe that this will reduce the number of anomalies. I am not suggesting it will eliminate all the anomalies, because it would be quite impossible to eliminate all anomalies, but at any rate those anomalies which remain will be confined to cases where the purchase of the property had been completed before April 23, 1968, which is some way back; there could be no anomalies among people whose property had been purchased since that date.
I cannot see that this Amendment would do any harm except to the local authorities who have to find the money. The local authorities themselves have said that they are anxious to find the money because they know it is a handicap and a brake to successful slum clearance if there is strong local feeling that owner-occupiers are being unfairly treated. I greatly hope that the noble Lord will seriously examine this point. I am speaking for a strong body of opinion, not only the owner-occupiers themselves, and I most seriously believe that a real effort should be made either in this way or in some other way to reduce the anomalies which will otherwise damage the atmosphere for continued and succesful slum clearance. I beg to move.
Lord KENNET: I have already said something about this precociously and I

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have said I will look at it. I foresee difficulties, partly because of the Exchequer subsidy which these proceedings attract. So it is not solely a matter of increased local authority expenditure which they might properly wish to make whatever the central Government think about it but also this point of different results cropping up in the same slum clearance area. If the noble Lord will consider a clearance order which came into effect in April, 1967, then let him consider two householders within that order, one of whom had his house compulsorily purchased in March, 1968, and one of whom had his house compulsorily purchased in May, 1968. What would they think about the effect of his Amendment? However, I have said that we will look at the point again, and that is the sort of difficulty we must look at.
Lord BROOKE of CUMNOR: I quite accept that there will be some sort of anomaly, wherever you draw the line, but I think the anomalies will be less keenly felt where cases have actually been settled some time ago than where cases are now being settled and yet, owing to this clause as drafted, are having to be settled under forms of compensation which Parliament has already rejected for the future. I am grateful to the noble Lord for what he has said. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 68 agreed to.
Schedules 5 and 6 agreed to.
Clauses 69, 70 and 71 agreed to.
Clause 72 [Power of local authority to require repair of house]:
8.45 p.m.
Lord BROOKE of CUMNOR Lord BROOKE of CUMNOR moved Amendment No. 32:
Page 42, line 7, at end insert—
("Provided that no such notice shall be served if the income of the landlord is such that he would be entitled, if he were a tenant, to the protection of section 55 of the Housing Act 1969.")
The noble Lord said: I beg to move Amendment No. 32. Clause 72 empowers a local authority, where a house is in such a state of disrepair that although it is not unfit substantial repairs are required to bring it up to a reasonable
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standard, to serve a notice on the person having control of the house to execute the works specified in the notice. My Amendment is designed to provide the same sort of safeguard to the poverty-stricken owner as by Clause 55 the Government are offering to the poverty-stricken tenant. I need not quote cases of poverty-stricken owners because the Minister himself did it in his Second Reading speech. He pointed out that a very large number of these houses in question are owned by single individuals, many of them elderly; and that where these houses are still rent-controlled the rent payable has for many years been quite inadequate to keep the house in repair.
Therefore there are (and I believe this is universally accepted) a large number of houses owned by individuals, many of whom have inherited the houses, and simply have not got, either from the rent or elsewhere, the money to keep the house in good repair. It would be unreasonable for the local authority to ignore that fact and to seek to extract money for repairs from a person who had not got that money. As the Government thought fit to protect, under Clause 75, from the necessity of paying extra rent for improvements the tenant who really cannot afford to pay any more, so I propose in this Amendment that the owner who cannot afford to ca y out the necessary repairs required by the Authority should be protected in a similar way. I beg to move.
Lord KENNET: The clause as drafted exempts statutory tenants whose income is within the limits for rate relief as certified by the rating authority from having a court order made against them under Clause 54. The Amendment seeks to debar a local authority from serving a repairs notice on a landlord who, if he were a tenant, would be protected by Clause 55. In the Government's view, there is a substantial difference between forcing an impecunious tenant to accept improvements and getting a landlord to carry out his obligations with regard to repairs. It may be difficult for a landlord under a controlled tenancy to find money for repairs out of a rent controlled at its 1957 level—indeed, my right honourable friend said on Second Reading that the cost of repairs had increased by over two-thirds since 1957.

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In my submission, however, the Bill as it is before us will help the landlords in a good many other ways. There are the provisions dealing with the conversion of tenancies from control to regulation, which we have just discussed, where the dwellings satisfy the qualifying conditions. The landlord has his rent increase to look forward to. Landlords will also be able to get improvement grants towards some of the repairs they carry out, provided they are associated with improvements. This is something quite new in this Bill. There has been No improvement grant like this previously, and it is now up to a sum which is half of the total expenditure on repairs.
Clause 72 says that the repairs required must be such as to bring the house up to a reasonable standard, having regard to its age, character and locality. The key is what is "reasonable." This is not a matter for the housing authority alone: it is for the housing authority first and then for the county court, on appeal. Since there is an appeal to the county court, the local authority will inevitably consider the reasonableness of their requirements carefully before they proceed. Moreover, they have a power to act—not a duty—and they will not want to endanger the progress of their general improvement area plans by provoking criticism through too stringent demands on poor landlords. I hope that bearing in mind all the other things in the Bill that will have the effect of protecting landlords against unreasonable conduct, and, I would add, the intrinsic character of most local authorities, which is to avoid unreasonable conduct, the noble Lord will think that the Bill is all right as it stands.
Lord BROOKE of CUMNOR: With great respect to the noble Lord, that is not one of the best of his answers. I believe that there is a real problem here. The noble Lord, in resisting this Amendment, argued that no local authority would act unreasonably. But, as his Minister acknowledged on Second Reading, a large number of individual landlords will be in difficulty if local authorities take advantage of this clause. If I may quote from the Minister, he said:
"There seems little doubt that these 1957 rent levels have meant in many cases that repairs have been neglected. I had a case
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only a week ago of an old lady in my constituency who owned two rent-controlled houses. The tenants of each paid 10s. 6d. a week in rent. She has just spent £40 on repairs and is now faced with spending a further £25 or £30."
That is all right if that particular old lady has some income from elsewhere, but it is not all right if she has not. I am certain that the Government recognise in their hearts that there is a large number of people who own one controlled house in that sort of state and have not the money from the rents, or the rents as this Bill may eventually increase them, to carry out the repairs which under this clause the local authority may require.
I am tempted to press this Amendment but the hour is late and it may not in itself be a perfect Amendment. What would influence me would be if the noble Lord would say that in a circular, which no doubt the Minister will eventually send out when this Bill reaches the Statute Book, local authorities will be told to pay attention to the sort of reasoning which he has just expressed in his speech. It is no use their trying to apply Clause 72 strictly to individual landlords who simply have not the money to do it. It is not reasonable on their' part. My fear is that local authorities may feel that Clause 72 requires them to act in this way in every case and to fight it out in the county court, if necessary. They may feel that because that is pretty well what the clause says. Therefore it would greatly help me if the noble Lord and his Minister would, by some means or other, seek to remind local authorities that though this may be an extremely valuable power to use in certain cases it would be a mistake to use it in those cases where there was not the slightest chance of a landlord being able to afford to carry out the repairs which a strict local authority would require him to do under this clause.
Lord KENNET: I am rather distressed by these repeated requests to send out circulars to explain that the law does not mean something which it does not say. It is perfectly clear that there is only a power to do this, not a duty; and I should have thought that most local authorities were well able to see that they cannot get blood out of a stone and that the way to proceed is reasonably, as indeed the Bill lays a duty on them to do. They must be reasonable. They are not

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bound to use the compulsory powers against landlords unless they judge it right to do so. However, I have taken the noble Lord's point, and when I am able to read Hansard I will examine his worries again with an open mind, and we can if necessary come back to it again.
The Earl of CRANBROOK: I wonder if the noble Lord would take one other point into consideration. Sooner or later we are going to have a form of local government reform which means that every individual elected member of a local authority will be farther away from this sort of administrative problem, which more and more will have to be left to permanent officials. In a case of this sort, in which discretion has to be exercised, it depends on its being exercised by somebody who is not a permanent official and takes the responsibility. And it means that we should lay down the law here rather more specifically than in the old days, where the individual member of a council was able to exercise the discretion himself.
Lord KENNET: When it comes to local government reform, and if it takes the shape recommended by the Royal Commission Report, there will be a point in what the noble Earl says.
Lord BROOKE of CUMNOR: The noble Lord, Lord Kennet, accused me of seeking to urge the Minister to send out lots of circulars. I should not dream of doing that, but if the Minister thinks that he can pass a Bill of this magnitude into law and not send out a circular about it, he will be in serious trouble with the local authority associations. There may be a difference of approach between him and me, but there is a real problem here, and I hope that together we may find some means of mitigating it. Having said that, I beg leave to withdraw my Amendment.
Lord KENNET: With the patience of the Committee, I was not proposing that the Minister should not send out a circular about this Bill. But I hope that the circular he sends out will be confined to saying what the law is and about how to use it, and will not go too deeply into asserting that the law does indeed not say that which it does not say.
Amendment, by leave, withdrawn.
Clause 72 agreed to.
Lord KENNET Lord KENNET moved Amendment No. 33:
>After Clause 72 insert the following new clause:
Increase of fine under s. 170 of Housing Act 1957
". Section 170 of the Housing Act 1957 (power of local authority to require information as to ownership of premises) shall have effect, with respect to offences committed after the commencement of this Act, as if for the words 'five pounds' there were substituted the words ' fifty pounds '".
The noble Lord said: This Amendment, which hangs together with Amendment No. 59 to the Title, deals with the giving of false information. Section 170 of the Housing Act 1957 enables a local authority to require information as to the ownership of premises for certain purposes. Apparently the fine for false information stands at £5. That was settled in 1930. The purpose of the Amendment is to raise the £5 to £50 which is more in accordance with the value of money in this day and age.
Clauses 73 to 76 agreed to.
9.2 p.m.
Lord BROOKE of CUMNOR Lord BROOKE of CUMNOR moved Amendment No. 34:
After Clause 76, insert the following new clause:
Contributions towards strengthening high blocks of flats
". In so far as a local authority is required to incur additional expense on strengthening high blocks of flats in order to safeguard against a repetition of the Ronan Point disaster, the Minister may make a contribution to the authority equal to one-half of the additional expense so incurred."
The noble Lord said: I beg to move the new clause dealing with the means of paying for the additional work in which local authorities have been involved in the course of safeguarding against a repetition of the Ronan Point disaster. I realise that this is a matter of money, and your Lordships' House normally leaves money matters to another place. I would not have tabled this new Clause if I did not feel so strongly that the Government must reconsider the very unfair decision which they have so far made and maintained as to the inadequate amount of Exchequer help to be given to these local authorities.
Every member of the Committee will be familiar with the Ronan Point disaster. They will realise the terror which that set up among tenants of other high blocks of flats with a similar mode of construction. Unquestionably, following the report of the inquiry into the disaster, it was essential that local authorities which had built high blocks of flats that were shown to be vulnerable to similar disasters must take action to safeguard the lives of their tenants and the stability of the buildings. That has involved, and is involving a very large sum of money. The noble Lord, Lord Kennet, may be able to give the latest authoritative estimate. The figure I am in a position to give is £25 million, a very considerable addition to local authority expenditure, bearing in mind that this is not spread equally over local authorities but falls selectively on those local authorities which usually, because of the urgency of their housing problem and lack of land, have been forced to build high. It is expensive to build high, and few local authorities wish to do so if there is another means of meeting their housing problems. But it is well known that certain local authorities have found it inevitable to build high and now they are being very heavily penalised.
The Government have so far said that the Exchequer will meet no more than 40 per cent. of the additional cost which local authorities will incur or are incurring through the necessity to strengthen their high blocks of flats. If my figure of £25 million is correct, that means that the Government is meeting £10 million, and the relatively small number of local authorities with acute housing problems which have very high blocks of flats have to meet the remaining £15 million. The Government said at one stage that whatever happened it should not fall on the tenants, but it is clear that a large amount is going to fall on the ratepayers of the boroughs concerned, including the tenants. These boroughs and cities are places with acute housing problems and with lack of land, otherwise they would almost certainly have gone in for lower and cheaper forms of construction. In other words, they are the authorities which tend to have heavy housing outgoings in relation to the product of a 1d. rate, in relation to their rateable wealth so to speak.
I should have thought that it stood to reason that the Government should relieve such local authorities of much more than two-fifths of the cost. I seek to bring in a very modest new clause saying that it should be fifty fifty. I do not think it should be fifty per cent. I think if local authorities paid 20 per cent. and the Government 80 per cent. that would still fall heavily on local authorities. The reason why I am proposing the fifty fifty division is that a new clause was moved by a Government supporter in another place suggesting that the 40/60 position should be reversed and should become 60/40—the 60 per cent. on the Exchequer and 40 per cent. on the local authorities. In a vote in which it was clear that a number of Government supporters were very uncomfortable, this new clause, moved from the Government Benches, was defeated. It seemed inappropriate to move exactly the same new clause as the Commons had already rejected. I am bound to say that I am in considerable trouble with some of the boroughs and cities concerned who think I am letting them down by pressing for only a fifty fifty split, whereas they think, and I think, it would better be an 80/20 split. It seemed to me that if I were to ask for more than the Government had already refused in another place I might have no chance at all of success. But if I asked for something which was less than justice—less than the Exchequer ought to be prepared to make available to these hard-pressed local authorities—then I might by these means be able to persuade the Government to think again.
I feel that if the Government do not move on this they will severely damage their relations with urban housing authorities. There is intense feeling that this 40 per cent. offer by the Government is inadequate; and it is not confined to those boroughs and cities which are affected, but has gone through the whole of local government. For all other local authorities are perfectly well aware that it was a matter of chance that certain housing authorities were hit by this; that there might have been a disaster of a different kind, and the colossal additional cost might have fallen on other housing authorities.
I beg with all my power that the Government will give fresh consideration to this. It is not wise to sail on a collision

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course with the local authorities as a whole. I do not believe that anybody, except those who went into the Lobby out of Party loyalty in another place, believe that the Government have acted fairly in offering only 40 per cent. I am quite sure that if the Government were now to make a more generous offer, it would sweeten relations between the Government and the local authorities, and give the local authorities a return of confidence, which has been very badly shattered (I say this with knowledge) as a result of the Government's action over Ronan Point. I beg to move.
Lord KENNET: The noble Lord said he was afraid that he was going to get into trouble with the local authorities for proposing only 50 per cent. Government grant on this account. I am sorry to hear it. The local authorities are, of course, in direct contact with the Minister. They came along; there was a meeting; and they asked for 100 per cent. They just landed the whole problem in the lap of Central Government. The noble Lord is more equal in his divisons at 50-50. The Government, as the Committee know, propose 40-60; that is to say, the Government propose 40 per cent. from Exchequer funds.
I was struck by what the noble Lord said about the other 60 per cent. having to come from the local authorities. The Tribunal of Inquiry, in their Report, if the thing is taken as a whole—and I do not suppose the noble Lord would dissent from this—allotted a broad spread of responsibility, not between the two parties, central and local government, but between three—central Government, local government and a third party which the noble Lord did not even touch upon; that is, industry and the professions concerned. Because if a block is built and it falls down, who is involved? The designer of the system used, the architect of the particular block, the consultant who advised on the use of the system—are these people not involved? I conceive that they are. I conceive that their professional standards are in question in this matter. I conceive that if a block falls down, and if other blocks of a similar nature have to be strengthened at great expense, part of the responsibility is theirs. The Tribunal of Inquiry said this, and I agree with them. Part also, no doubt, is the responsibility of the local
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authority which ordered the block and approved it; and part is the responsibility of the central Government which laid down the book of rules under which the proceedings were conducted. It is the view of the Government that 40 per cent. correctly reflects the responsibility of central Government in this tripartite allotment of responsibility for what has to be done as a result of the disaster.
If I may concentrate for a moment on the part which will have to be paid by the local authorities themselves, the middle party, the noble Lord, Lord Brooke, pointed out the remarks of my right honourable friend about how the expense certainly ought not to fall on the tenants; and he said it looked as if it would. I think what my right honourable friend had in mind was that the expense ought not to fall on the tenants of the blocks which had to be strengthened, where all this money would have to be spent. Unfortunately, some of it. is bound to fall on the tenants of that council, because some of it is bound to fall upon the rates, and they are ratepayers. Equally, if the Government were to pay more, like the 50 per cent. proposed by the noble Lord, some of it would fall on the very same people as taxpayers. I wanted to make that distinction between tenants in the blocks concerned and council tenants in the area of the local authority as a whole.
I hope I have said enough about this question. It is not a bipartite division of responsibility between central and local Government; it is tripartite between central Government, local government and those professionals and industrialists who put up the blocks which have been found, to everybody's surprise—and I freely admit to everybody's surprise—not to be good enough.
Lord BROOKE of CUMNOR: The noble Lord did not confirm or deny the estimates of £25 million which I made as to the total additional cost.
Lord KENNET: I should not wish to quarrel with that, but it must remain a very provisional estimate at the moment because the costing is by no means finished. The best I can say is that it may well turn out to be about that in the end. We simply do not know yet.
Lord BROOKE of CUMNOR: The noble Lord has confirmed my view that it is of that order of magnitude, and whatever monies may be available from other quarters, it still remains perfectly clear that out of that £25 million a very substantial unexpected and unexpectable burden has to fall on a small number of local authorities which have been striving to mitigate their housing problems by building tall blocks of flats owing to their shortage of land.
Lord KENNET: I am sorry to interrupt the noble Lord, but I have not confirmed his view that it is likely to turn out to be of that order of magnitude. I have only said that I have no reason specifically to challenge that figure. It may be that; it may be another. It is not likely to be of that order of magnitude; it is quite possible that it will be of that order of magnitude.
Lord BROOKE of CUMNOR: I think we can take £25 million as the only figure that is worth talking about at the moment because we have no other. On a financial matter like this it would be inappropriate for me to press this new Clause in your Lordships' House. I can only express bitter disappointment, and I can but say with the authority of a former Minister of Housing and Local Government that the behaviour of the Government in this matter is not the way to gain, to keep and to strengthen the confidence of the local authorities in central Government. Housing Acts can operate successfully only if there is a genuine feeling of partnership between the Ministry and the local authorities. It is that feeling of partnership which the Government are damaging by their mean decision on this Ronan Point affair.
Lord KENNET: If the noble Lord will permit me, I wonder whether I could put one question to him. Would he admit that there should also be a feeling of partnership between the local authorities, the industry and the consultant?
Lord BROOKE of CUMNOR: Yes; but I cannot tell what the contractual arrangements were there. I do not have the information on all these cases, whether indeed the building regulations were complied with and whether in any particular case they were nationally approved regulations or locally
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approved regulations. That has to be gone into in every case. I beg leave to withdraw the new clause.
Amendment, by leave, withdrawn.
9.17 p.m.
Lord BROOKE OF CUMNORhad given Notice of his intention to move the insertion after Clause 76 of a new clause dealing with assistance to students' housing associations. The noble Lord said: In view of the lengthy discussion we had about student housing associations and the manner in which the noble Lord, Lord Kennet, took up my suggestion that there should be discussions under Parliamentary auspices of the ways in which the Government might be able to further the aims of student housing associations, at this time of night it would be suitable if I did not move this new clause. We can discuss it later.
Lord KENNET: Could I just clarify the use of the words, "Parliamentary auspices "? That slightly suggests some Parliamentary Committee of Inquiry. I know that is not in the noble Lord's mind. What I had in mind was simply an informal meeting and discussion. An "auspice" sounds a little formal.
Lord BROOKE of CUMNOR: I think we are at one about this. When I said, "Parliamentary auspices" I meant that Members, at any rate of the Upper House of Parliament, will be present.
Clause 77 agreed to.
Lord KENNET Lord KENNET moved Amendment No. 36:
After Clause 77 insert the following new clause:
Right to terminate period for which option notice has effect
".—(1) In section 24 (3) of the Housing Subsidies Act 1967 the following shall be inserted after paragraph (vi)—
(vii) the taking effect of a notice under section 26A of this Act.'
(2) After section 26 of that Act there shall be inserted the following section:—
'26A.—(1) Where an option notice has been given in respect of a loan the person or persons in whom the rights and obligations under the repayment contract are for the time being vested may by notice to the lender bring the period for which the option notice has effect to an end on 31st March of any year not earlier than 1973, but only if not less than five years have then elapsed since the date of the repayment contract.

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(2) A notice under this section must be in writing and in such form as the Minister may direct and must be given not less than three months before the date on which it is to take effect.'"
The noble Lord said: This new clause concerns the option mortgage scheme. Its purpose is to give a person who has taken an option mortgage in preference to tax relief on the mortgage interest the right to get out of the scheme and revert to tax relief. This right arises five years after the borrower entered the scheme or any subsequent year after that, but it is a once-and-for-all choice. At the time of the passing of the Housing Subsidies Act 1967 the lending agencies were adamantly opposed to anyone's being allowed to opt out, on the grounds of the administrative inconvenience involved if people were to move in and out of the scheme. The Building Societies' Association since then have reiterated their objection. As a recent discussion with the representatives of the lending agencies, they all agreed—and this was a change in position—to a man's being allowed to opt out after five years.
The benefit of an option mortgage ought to be looked at over the life of the mortgage, and Clause 77 allows the rates of subsidy to be increased, which removes one ground for wanting to get out. If after five years a borrower wants to get out of the scheme, it is reasonable to let him do so, and I am very glad—and I believe the Opposition is also glad—that the lending agencies have come to the conclusion that this is acceptable to them. I need hardly add that the Amendment comes so late in the course of the Bill through Parliament solely because it was only the other day that the lending agencies came to their conclusion. I beg to move.
Lord BROOKE of CUMNOR: I certainly welcome this new clause and I am glad the Government have been able to do this. At this late hour I will not speak at length. I will simply mention that a certain amount of Parliamentary time could have been saved if the Government had accepted a new clause moved by the Opposition in another place to do just this, instead of resisting it then and bringing forward the clause themselves in Committee in your Lordships' House. However, after that little bit of teasing, I should like to thank the Government for what they are doing.
Lord KENNET: If I may tease the noble Lord back, it would have involved brow-beating the building societies into something they did not want to do at that stage—and I think they are his friends.
Clause 78 agreed to.
Clause 79 [Other long tenancies]:
9.22 p.m.
Lord KENNET Lord KENNET moved Amendment No. 37:
Page 46, line 20, leave out from ("it") to ("be") in line 21 and insert ("Schedule 7 to this Act shall apply and, if the tenancy was granted before the commencement of this Act,").
The noble Lord said: Because it is getting late I am going to try to get by with "shorthand" on this one again, though of course I will instantly give the full background if any noble Lord should require it. This is a very complicated matter about long tenancies and the clause as drafted—I hope I make myself clear to those who are on top of the situation—contained both "belt" and "braces", but the "braces" were sufficient and the "belt" succeeded only in squeezing out a few deserving cases which we recently identified, and the Amendment removes the "belt". I beg to move.
Lord BROOKE of CUMNOR: The noble Lord has now switched to a more inscrutable form of "shorthand" and I am quite sure that I cannot interpret it easily. On the other hand, if he were to read out a lengthy brief I am not at all sure, at this late hour of the light, whether I should find it any more comprehensible. If he will assure me that what he has said makes sense in the cold light of morning, I will read it carefully.
This is a difficult clause. I think he will confirm that it was introduced at a fairly late stage in another place and therefore it did not get as intensive an examination as was given to all the clauses in the Bill as originally presented to Parliament. I hope to find that what he is proposing by this Amendment is all right, but I should like to reserve my position as long as he discusses it in any form of "shorthand".
Lord KENNET: In view of what was said in another place about this matter, I am fairly confident in saying that the noble Lord will find it all right.
Lord KENNET Lord KENNET moved Amendment No. 38:
Page 46, line 26, leave out from beginning to ("it") and insert ("within twenty years of the date when")
The noble Lord said: This Amendment is designed to eliminate a small anomaly which was pointed out in the debate on the Report stage in another place, and was also drawn to the attention of the Government by the Law Society. Once again, I think perhaps, unless any noble Lord wishes me to go into detail, it may be enough if I simply move this with that much explanation. I beg to move.
Lord KENNET Lord KENNET moved Amendment No. 39:
Page 46, line 28, after ("granted") insert ("before the passing of this Act or was granted")
The noble Lord said: The rent variation condition in Clause 79 (2) (b) is aimed directly at the prevention of abuse by landlords seeking to capitalise from scarcity. It is therefore not so essential to apply it to existing leases as to future leases. To apply it to existing leases has now been shown, as a result of helpful approaches by the Law Society and others, to deprive a number of genuine long leases with real capital value of the benefit of this clause. The proposal not to apply it to existing leases will not benefit any freeholder. Some tenants with genuine long leases will now benefit, as they should do, while others who hold leases which are basically rack rent tenancies dressed up as long leases will, for the most part, get no benefit.
The type of geniune lease which, if the Amendments I am proposing are made, will still fail to benefit from Clause 79 (2) (b) is the sub-lease which provides for a rent review within a period of 20 years from the date on which it was granted but where there is a superior lease of the dwelling which itself satisfies the condition in Clause 79 (2) (b). A sublease may not be granted until some years
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after the grant of the superior lease, and it may well be essential for the sub-lessor to ensure that the dates for rent review in the sub-lease which he grants shall coincide with the dates for rent review in the superior lease. The new subsection (2) will now cover this case. This is complicated and professional stuff indeed, but I beg to move—though I am ready to give further explanation if desired.
Lord BROOKE of CUMNOR: I would rather read in Hansard what the noble Lord has said before passing any comment.
Lord KENNET Lord KENNET moved Amendment No. 40:
Page 46, line 36, after ("underletting") insert ("of the whole of the premises comprised in the tenancy").
The noble Lord said: These are a run of extremely difficult and abstruse Amendments, but some of them do have some substance, and I think I should get it on to the Record what they are about, even if it is in shorthand. Subsection (2) (c) embodies the principle that to have the capital value that would justify rendering it freely saleable a tenancy should be assignable, since otherwise the capital value of the lease would depend on the tenant's remaining in occupation, which he might not find convenient if his circumstances changed. The Law Society has, however, pointed out that it is not uncommon for leases to permit the assignment of the lease of the whole premises let while prohibiting assignment or sub-letting of part of them only. This prohibition, which is designed to preclude reduction in the value of the premises let or of the lessor's adjoining property, is in no way at odds with the principle of free assignability, the object of which is that the tenant, if he wishes to move, should be free to sell the contractual right of occupation he has himself acquired.
It is thought that proviso (c) as drafted would exclude from free saleability leases embodying the prohibition. This Amendment is therefore required to make it clear that a lease incorporating a prohibition on partial assignment or sub-letting complies with proviso (c), so long as the lease of the premises as a whole is assignable. I beg to move.
Lord KENNET: This Amendment, too, is to cover a point recently made by the Law Society. I think those who have to know what it means will understand what it means, taking the Amendment together with the clause as drafted. I beg to move.
Amendment moved—
Page 46, line 40, leave out from ("term") to ("offer") in line 41 and insert ("requiring in connection with a request for consent the making of an").—(Lord Rennet.)
Lord KENNET: Amendment No. 42 is conseqential on Amendment No. 39. I beg to move.
Amendment moved—
Page 46, line 41, at end insert—
("(3) Where the condition specified in subsection (2) (b) of this section would be satisfied with respect to a sub-tenancy but for a term providing for one variation, within twenty years of the date when the sub-tenancy was granted, of the sums payable by the subtenant, that condition shall be deemed to be satisfied notwithstanding that term, if it is satisfied with respect to a superior tenancy of the premises comprised in the sub-tenancy (or of those and other premises).")—(Lord Kennet.)
Clause 79, as amended, agreed to.
Schedule 7 [Amount of Premium Permissible under Section 79]:
Lord KENNET: This Amendment is consequential on Amendment No. 37 already accepted. I beg to move.
Amendment moved—
Page 65, leave out lines 14 and 15 and insert ("on the grant or an assignment of the tenancy").—(Lord Rennet.)
Lord KENNET: This is a drafting Amendment. I beg to move.
Amendment moved—
Page 65, line 28, leave out ("it") and insert ("the tenancy").—(Lord Kennet.)
Schedule 7, as amended, agreed to.
Clause 80 [Price payable on enfranchisement of leasehold house]:
On Question, Whether Clause 80 shall stand part of the Bill?
9.31 p.m.
Lord SILSOE: It is my hope that this clause will not stand part of the Bill. I should like to express my gratitude to some of those who sit on these Benches who have been kind enough to remain here to speak about it. Clause SO has nothing whatever to do with the Housing Bill; indeed, the Long Title of this Bill had to be altered in order to get it in. It deals with the Leasehold Reform Act 1967 and seeks to amend this in an important particular.
The clause, I think although it is late at night I must explain, because it has not yet had to be explained at all to your Lordships, says:
"This Section is to have effect and be deemed always to have had effect as if in section 9 of that Act there had been inserted after the words ' a willing seller' the words 'with the tenant not buying or seeking to buy'."
Putting that shortly, it prescribes that when a tenant wishes to enfranchise his lease and buy the freehold the pries that the tenant would offer is to be entirely disregarded in fixing the compensation.
In moving the Second Reading the noble Lord, Lord Kennet—may I say I have no grievance whatever about this—did not mention this clause, or indeed any other clause. He gave a short exposition of the whole Bill. I spoke on the Second Reading and asked that this clause should not become part of the Bill. In replying to the Second Reading debate the noble Lord, Lord Kennet, did not explain positively why the clause had been introduced and said that this would be tackled later, by which I assume he meant the Committee stage. I am only sorry that it comes up so late and in such a thin Committee. He did, however, say that when a Government introduce an amendment to the law—and I quote him
"they do not do so on the basis of any judgment whether or not the decision of a court on the law as it stands before that moment is correct or incorrect."—[Official Report, 8/7/69, col. 1017.]
In those circumstances, I feel bound to explain to the Committee from the words of Ministers in another place why the clause was in fact introduced. In the first place, the clause was moved only on the Report stage by the right honourable gentleman the Secretary of State for Wales in these short and clear words:
"It is really a corrective clause which will be welcomed by 1 million householders in

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the country, for it removes the misunderstanding which has existed ever since the Custin's decision by the Lands Tribunal, where it appeared that the Tribunal had taken into account in assessing the price of the freehold, the fact that market value must be shared between the ground landlord and the tenant."
He concluded by saying:
"We now take the tenant, the leaseholder, out of the market; he is not to be considered to be a bidder in the open market, and I believe that the sooner that this gets to the Statute Book the better."
One of the many curious backgrounds of this Clause is that the Amendment does not do what the Secretary of State for Wales asked to be done. It does not, in its powers, have anything to do with altering the sharing of the market value between the ground landlord and the tenant. If that was intended, a gross mistake has been made because the Amendment does not even try to do it. Therefore, the reason given by the Secretary of State will not apply if this Clause is passed.
The Parliamentary" Secretary spoke again in another place and explained more fully what was intended by this Amendment. I ought to say that the Custin's case is named after the tenant, Mr. Custin. It was a case before the Lands Tribunal to assess the amount to be paid by the tenant for obtaining the freehold, and it seems pretty clear to me that the clause was, to use the Secretary of State's own words, "a corrective clause", because a decision by a court had been made which the Government considered was a wrong decision. So far I think your Lordships will agree with my submission that Lord Kennet's idea that the clause was not on the basis of a judgment cannot be readily accepted.
At the end of the Report stage the Joint Parliamentary Secretary used these words—I apologise for quoting them rather lengthily, but I found no way whereby I could quote more shortly without risking being told that I had mis-reported:
"What Parliament can do, as any Government can, is to frame its legislation as carefully as it can, but as I have said again and again, these valuation points are very difficult and the courts or the Tribunal must be left to interpret them."
I wish that had been done. The courts have interpreted them, and the Government have moved to intervene to "dis-
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interpret", if there is such a word, by an Amendment.
"If the matter had gone elsewhere"
by which I think he must have meant "to appeal",
"there might have been a different decision. It was by no means certain, and it could not have been certain after the arguments, that the Tribunal would come to whichever decision."
Finally he said he was surprised that that decision had been made. He said that it breached paragraph 12 of the White Paper, on which the Act was framed, in these words:
"… the fair price enfranchisement will be the value of the freehold interest of the site … This will completely "—
and the Minister repeated the word—
"completely disregard the value of the buildings on reversion."
The Parliamentary Secretary ended his speech by saying:
"Faced with this situation the Government have introduced the new clause."
I hope I have not omitted words that I should have quoted, but I think I have given the sense.
It is beyond argument from this quotation that the Amendment has come from the decision of a court of law, the Lands Tribunal, because the Government thought that that decision was a breach of the White Paper which it introduced before the Act, and that if the tenant was to bid he must be bidding for the bricks and mortar which belonged to him. There is no clearer statement than that, that that was being said. It was not being said by this Minister that it was anything to do with merger value; it was to do with bricks and mortar value, which are absolutely and completely different things. The court made no attempt to value bricks and mortar; they did value the merger value, and I shall show your Lordships exactly what they have said in a moment.
What they did was to say that the tenant was a bidder, and somebody has considered that because the tenant was a bidder it means that bricks and mortar value must come into it. That is, with all due respect to everybody concerned with this, a complete misapprehension. Site values are valued day in and day out in all sorts of ways—for taxation, rating and various matters. The valuation

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of the site and the valuation of the buildings are perfectly easy things to understand for anyone who works in practice, and the court was valuing the site value. What they have said is that the tenant's bid is to be considered in valuing the site value. If there are more bidders for anything—site value, bricks and mortar, whatever it may be—it may very well affect the value of what you are valuing, but it cannot affect the value of anything you are not valuing. I dare say that in a lot of these cases the presence of the tenant will put up the site value, but there is a tremendous misconception about this. It has nothing whatever to do with building value, and I cannot myself find out why this Amendment has been put down, and who has done wrong.
Lord KENNET: For the sake of clarity, I think it would assist the Committee if the noble Lord were to say what he means by "this Amendment". The noble Lord has said that he cannot make out why this Amendment was put down. What is before the Committee is a proposal by the noble Lord to leave out Clause 80.
Lord SILSOE: I spoke inaccurately. I am speaking on whether this clause should stand part of the Bill. I am sorry I mentioned the word "Amendment "; I should have said "this clause". When I spoke on Second Reading I was able to speak only from my own experience in this matter, but since the Second Reading the institutions of chartered surveyors—there are three in number—have written a paper on this question and on this clause and they have sent a copy to every Member of your Lordships' House who spoke on Second Reading, including myself and, I know, the noble Lord, Lord Kennet. They said this:
"It is understood that this provision arises as a result of the Custin's decision. In this case, the Lands Tribunal, in arriving at the valuation of the freehold interest under the provisions of Section 9 … took into account the higher price that the tenant would pay for the advantage of merging the freehold and leasehold interests. It has now been suggested that the valuation of this merger included some part of the valuation of the bricks and mortar, thus conflicting with the principle of the Leasehold Reform Act that the land should be considered as belonging to the freeholder and the building to the leaseholder. The Chartered Land Societies Committee, which represents all Chartered valuers in England and Wales docs not accept that the valuation of any part of the bricks and mortar was included, as the figures used by the Lands
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Tribunal relate to the valuation of the site only, and in any case only part of the merger valuation was attributed to the freehold interest."
It is perhaps not directly relevant to this clause, but at the end of their report the Committee say this:
"The Committee also considers that there are a number of defects in the Leasehold Reform Act which require study and that amendments should not be made pie: emeal by way of insertions into other Acts which are not apposite."
There is the clearest possible professional opinion on what the Ministers m another place said had not happened. I ventured to say it on my own authority on Second Reading, and I now have the very strong support of the professional opinion of all surveyors.
But there is another, much more compelling, reason why I think this clause should not stand part of the Bill. In their judgment, which fortunately is in writing—and it has been published verbatim widely throughout the profession in this country—they said this:
"In our view the expression 'willing seller' means no more than that the vendor cannot expect more than the market price on a sale on the statutory terms because he might be thought to be selling with reluctance; but there is no reason why he should sell below the market price."
We then come to the very fundamental wording of the Lands Tribunal. I should like to pay a tribute to the Lands Tribunal which I am sure the noble Lord will second. The Lands Tribunal is now used by every Government with complete confidence and matters of this sot are always referred to them. This is what they said on this case:
"We note that Section 1 (1) of the Leasehold Reform Act 1967 requires that the acquisition should be ' on fair terms.'"—
Those are words in that section—
"and we do not think that the exclusion of the tenant would result in a 'fair term; ' sale because a price which was calculated on a basis which ignored the price which a tenant would be prepared to pay would not be on 'fair terms'. We have therefore come to the conclusion"—
Please note the word "therefore"—
"that the sitting tenant should not be excluded from the market."
This is precisely and unambiguously the wording of this new clause. It is therefore quite clear that in spite of a finding of law and fact by this admirable Tribunal, the Lands Tribunal, the Government are seeking by this clause to put in

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words which will, in the view of the Lands Tribunal, not be fair when it is passed. These, in fact, were the final words of the judgment on the point of law.
Where do we find, as the Parliamentary Secretary in another place stated, that this Tribunal was in any form of doubt? He said that they were very doubtful about this. Well, some of us have been at the Bar and some of us have done law and we know that judges are particularly kind to people whose arguments they are going to destroy. They were very courteous to the losing counsel. They said he had a formidable argument; but really the judgment was never more clear.
Three things I finish with. Whatever this clause does, it does not in any way at all alter the merger value, the very reason, the only reason, given by the Secretary of State for Wales. It also only alters the number of bidders by excluding the tenant on site value. I agree that it may alter the value of the site value in so doing; but it will not affect the bricks and mortar. Lastly, it deliberately—and none of this was mentioned in another place—it deliberately goes against the views of this eminent Tribunal in saying that the terms will still be fair when this Amendment is passed. For all those reasons, I hope that this clause will not stand part of the Bill.
Lord HOLFORD: I wish to say only a few sentences on Clause 80. I am a supporter of the Bill. I do not want to do anything to interrupt its passage. But in running along with it, I must say that Clause 80 seems to me like a small, rather sharp stone in my shoe. Unlike the noble Lord, Lord Silsoe, who wishes for the omission of Clause 80 from this Bill, I am not a lawyer and I am not a valuer. But the things in which I am interested—the planning, the layout, the construction of new buildings or the improvement of an old house—all these practical, constructive things, cannot start until the valuers and lawyers have arrived at a fair determination and the client receives. What worries me about this is whether in fact the terms are fair. Again I must repeat that I am not a lawyer, and I do not know whether the terms are fair. Reading Custin's case, it seems to
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me that they are not. But there is certainly doubt whether the terms are fair under this clause, and one is bound to ask, therefore, why this Clause is included in the Bill. We have here a very nice portmanteau, with a great many subdivisions closely packed in a very complex Bill; and then there is this additional clause, this uncertainty which is squeezed into it; and it seems to me, as an inexpert, that it looks as if it might break the lock.
9.51 p.m.
Lord MAELOR: I beg the noble Lord, Lord Silsoe, not to carry his Amendment to a Division because this Clause is vital to leaseholders and clarifies the position following the first two cases heard by the Lands Tribunal. However, in the latest case, decided only yesterday, another point arose; whether or not the ground landlord can use the so-called inflationary method of valuation. During discussion on this Clause in another place Mr. Arthur Skeffington, the Parliamentary Secretary to the Ministry of Housing and Local Government, used these words:
"In the Custin case"—
the first case to go to the Tribunal—
"the Tribunal was firm in its opinion that most valuers agreed that it was impossible to make calculations which would take account of the value of money for 30 or 40 years ahead."
Notice what Mr. Skeffington said; that in Custin's case the Tribunal was "firm". It did not appear to be quite so firm yesterday when it came to its decision, because it did not rule against this principle of the inflationary method of deciding the value. Will the Minister confirm (I hope that he will do so to-night) that this method is not valid; and will he look at the position in case we have to clarify it by a further Amendment? I believe that we shall then gain real social justice for the thousands of leaseholders we have in Wales. On the last occasion when I spoke in your Lordships' Chamber I called this system "a damnable system", and I repeat that it is a really damnable system. We in Wales have been suffering from it for years and years, and I see some hope, through this and the other clauses, of some redress after all the suffering which we have experienced throughout those years.
Lord HELSBY: It seems clear on the face of it that this Clause is the "odd man out" in the Bill. It does not really belong in a Housing Bill; it is in a sense an Amendment to the Leasehold Reform Act. It appears to be based on the belief that a certain finding of the Lands Tribunal should be altered. Now we are told by the noble Lord, Lord Maelor, that the Lands Tribunal has given another judgment in a somewhat different sense only yesterday. I cannot pretend that I have absorbed the meaning of that; indeed I have not seen the judgment of yesterday. But what does seem to stand out is that a market is a market. If we talk about a willing seller and a willing buyer, we are talking about a free market; and surely a free market means that we must not by law disregard a bid from anybody who would wish to bid. There is nothing artificial about that; there is nothing, I think, that the ordinary layman, as well as the lawyer, could fail to understand. The only reason for excluding the tenant on the lines of the Custin decision appears to have been that it was thought in some quarters that the Lands Tribunal had taken into account the bricks and mortar value; but we have good authority for believing that whatever else it may have done, it did not do that. What the Tribunal did believe was that a free market is a free market, and that the tenant, when he puts in a bid, has as much right to be considered part of the market as anybody else. Surely that should be a clear case for us to take into account.
9.55 p.m.
Lord KENNET: The Committee will have listened with the greatest attention to the noble Lord, Lord Silsoe, because, as we all know, he is a very great expert in all matters of valuation and property. I know that it was only an oversight on his part that neither on this occasion nor on Second Reading did he mention his own interest in the matter at stake, as the leader of one of the greatest freeholders granting leases in the country.
Lord SILSOE: May I ask for leave? I have not stated my interest because I retired last week. So far as I know, I own nothing, either privately or publicly in the world.
Lord KENNET: I must apologise to the noble Lord for being out of date. Of
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course the Second Reading was last week.
Lord SILSOE: I declared my interest two years ago, very fully. Now I have No interest, and I should like everybody to know. Unfortunately I have retired and am no longer earning money.
Lord KENNET: The Committee will be glad to learn the precise details of the noble Lord's interest. The noble Lord is the greatest expert in the world about valuation but I honestly do not think he knows what Parliament is for. Parliament is not for deciding if this or that decision by a court or tribunal is right or wrong. It is for changing the law. All the Government are doing is saying to Parliament:
"We do not think the present law is right, and the main reason why we do not think the present law is right is because of what happened in Custin's case (which was quite surprising). We therefore propose to change it. Do you agree? "
It is on that basis that I shall continue.
All I am saying is that the Government think Parliament ought to change the law. I absolutely decline to be drawn into any discussion of the rectitude or the ability or the appositeness of that decision by the Lands Tribunal or by any other court. The courts' job is to say what the law is. The Government's job is to propose, from time to time, changes in the existing law which it thinks will improve it, and that is what I am doing.
There are two or three things which I will state very simply which seem to be quite clear. First of all we have ample evidence that since the decision in Custin's case a great many freeholders have been asking more than they had been, or they were proving more reluctant to come to terms with their enfranchising leaseholders. This is no theory; this is the fact, and I think there is a casual relation. The second thing is that the Lands Tribunal themselves did, whatever the noble Lord says, think the Act less than clear about whether the open market referred to in Section 9 was supposed to include or to exclude the tenant, although they decided—and the Government are not disagreeing with them in their interpretation of the existing law—that the Act included the tenant.
The third thing is that the Government's decision to recommend Parliament

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to make it clear for the future that the tenant is to be excluded in recommending a change for the purpose of determining price was warmly welcomed by both Parties in another place and I myself am most anxious to hear what the noble Lord, Lord Brooke, is going to say about this, if indeed he is going to speak, because the Opposition in the House of Commons did not oppose Clause 80 when it was taken into the Bill, and indeed, they joined with Government spokesmen in an attempt to improve the clause. As a matter of fact, the main criticism that was brought against it by Opposition spokesmen—I may not quote Mr. Rossi—was that it would be wrong to congratulate the Government on bringing this Clause in because they had brought it in much too late and ought to have brought it in a long time ago. They did not say that it should not pass and, indeed, they did not oppose its adoption.
There is no likelihood that I should persuade the noble Lord, Lord Silsoe, that this is a good clause. On Second Reading he quoted the Lands Tribunal as saying that a price which ignored the price which a tenant was prepared to pay would not be on fair terms and he called this a finding of fact by the law. I do not dissent that it is a finding in law. The Government are now asking Parliament to change that law. What I pay great attention to is the fact that the noble Lord said that the Amendment would not have the effect desired. Coming from him, these are words to which we must pay the greatest attention. The intention of the Amendment is that when the sum to be paid by the leaseholder is being determined on enfranchisement it shall be determined as though those bidding in the open market for the freehold interest did not include the leaseholder, because he would be prepared to go higher than the run of the market because of his superior interest in marrying the freehold and leasehold together. The noble Lord said that the Amendment is not going to achieve that but did not say why. I am extremely worried.
Lord SILSOE: So far, I am in complete agreement with the noble Lord. I did not say that. Of course, the Amendment would not allow the bidder to be considered. What I said was that the Amendment would have no effect what-
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ever either on the merger value or on the bricks and mortar value. That is all I said; and I still say it. I agree that the Amendment is perfectly clear and that nobody in valuing the site value would in future be allowed to consider the bid of the tenant.
Lord KENNET: I take the noble Lord's point. It is a philosophical one. The noble Lord maintains that real values are there whatever Parliament says about them. The only purpose the Government seek to achieve is to establish the actual value, but I must agree with him philosophically that we may imagine a ghost value existing under legislation. In another place, the Opposition spokesmen, so far from resisting the clause, suggested an Amendment—an improvement of it, in my view—to extend the provision that not only the tenant should be excluded from the market but also the tenant's family. If this clause remains in the Bill, I shall be moving an Amendment which will meet the point raised by Opposition in another place about the desirability of extending the operations of the clause. We must not go into valuation philosophy here. Parliament is here to make the law. I think that Clause 80 will improve the existing law in a perfectly concrete social way, and I hope that the Committee will agree to let it stand and will join me in improving it as regards the tenant's family.
10.4 p.m.
Lord BROOKE of CUMNOR: I am neither a lawyer nor a valuer, thank Heaven! (perhaps I ought not to say that and I apologise to noble Lords who are), but I approach this as a plain man. I have been thinking hard about this since the debate started and it seems to me that the noble Lord, Lord Kennet, has left himself wide open by the manner in which he has defended this clause. He has said that the noble Lord, Lord Silsoe, does not understand Parliament; that Parliament is here to make or to change the law; that Parliament is supreme and can do what it wishes. What Parliament cannot do—
Lord SILSOE: I must now interrupt the noble Lord. I did not say that Parliament could do what it wished. I said that Parliament was there to change the law.
Lord BROOKE of CUMNOR: Parliament was there to change the law. As nobody else can change the law, Parliament is presumably supreme. But Parliament cannot be inconsistent with itself. What has become absolutely clear to me, listening to the noble Lord, Lord Kennet—it may not have been clear to my colleagues in another place—is that the Government here are asking Parliament to deny one or' its own statements. I think that this finding by the Lands Tribunal is conclusive on that—conclusive unless it is reversed on appeal—because although Parliament can change the law it cannot delete what the courts or bodies like the Lands Tribunal say.
In this judgment by the Lands Tribunal which the noble Lord, Lord Silsoe, has quoted, the Lands Tribunal said:
"Section 1 (1) of the Leasehold Reform Act requires that acquisition should be on fair terms, and we do not think that the exclusion of the tenant would result in a 'fair terms' sale because a price which was calculated on a basis which ignored the price that a tenant would be prepared to pay would not be on fair terms."
That is the final conclusion of the highest legal authority to which this matter has been submitted. It could have gone to appeal, but the Government decided to legislate before there was opportunity, to hear what might be said or found on appeal.
What is clear now from the noble Lord's speech is that the Government are proposing to amend this Act of 1967 (which says in its first Section that acquisition is to be on fair terms) in such a way that the acquisition will not be on fair terms. That is to say, the Government are asking Parliament to contradict itself. This is something which no Government can do. You cannot have in Clause 1 of the Bill that something must take place on fair terms, and a provision subsequently inserted into the Bill designed to ensure that the acquisition shall take place on terms which have been found by a judicial authority to be unfair terms. That is the simple issue here, and if the noble Lord decides to press this Amendment I shall certainly support him in the Lobby. Whether he will decide to press this Amendment in this very thin House this evening I do not know. The amount of support he has received from the Cross-Benches on this matter is
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impressive. This is not an Opposition Amendment; all the running has been made by the Cross-Benches who hare no Party interest in it.
I have been arguing not on grounds of Party philosophy but on plain grounds: that Parliament must not contradict itself in the course of a single Act of Parliament. I am sorry that the Committee is so thin because I do not know whether we could achieve a just result to-night if the matter were pressed. I think that either now or at some later stage your Lordships should come to a decision on this clause.
Lord KENNET: I think there is 2very advantage in coming to a decision. I do not expect that I shall convince the noble Lord, Lord Silsoe, because he is a valuer and I am a Parliamentarian, and we see the world in slightly different ways. Lord Brooke's relationship with those of his Party who in another place supported this clause which he now proposes to vote out of the Bill is something that I must leave entirely to him; but I note the confusion in the ranks of the Opposition Party. In the House of Commons they want it; in the House of Lords they do not want it. The Government want it in both Houses, and I hope that the Government will be able to retain it if the noble Lord, Lord Silsoe, forces the matter to a Division at this late hour.
Lord SILSOE: I have tried to be a Parliamentarian, but I admit that I have not much skill. I am certainly not a Party politician. I try to understand matters. I understand that the Government of the day—or, indeed, a private individual—can bring into Parliament a change of the law. We have not had any reason given, save one that was given in another place, and that has been contradicted. It is now denied that this idea of moving this clause stems from a decision in the courts being wrong. That was the reason, and the only reason, given in another place. But those of your Lordships who have followed the noble Lord carefully will not remember a single reason why this change of the law is recommended.
I hope I am right in saying that it is normal to give a view when the same Government are amending a law, and when it is something that they themselves

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introduced only two years ago, I should have thought there was all the more reason for saying why there has to be a change. I am afraid that in these circumstances I look very much to those who sit on the Government Benches—I hope they will not mind my being impertinent. A mistake has been made. This clause should not have been brought up, at any rate in this form, because, so far as I can make out, it is not going to do what the Government desire. In those circumstances, one would have thought that something would have been offered
Resolved in the negative, and Clause 80 disagreed to accordingly.
which would have enabled me to say that we could think about it again and possibly return to it at a later stage. But nothing has come up. I have been encouraged by the noble Lord, Lord Kennet, to go to a Division, and, with due respect to your Lordships, that is what I wish to do.
10.12 p.m.
On Question, Whether Clause 80 shall stand part of the Bill?
Their Lordships divided: Contents, 22; Not-Contents, 23.

CONTENTS

Addison, V.

Heycock, L.

Serota, Bs.

Beswick, L.

Hilton of Upton, L. [Teller.]

Shackleton. L. (L. Privy Seal.)

Bowles, L.

Hughes, L.

Shepherd, L.

Brockway, L.

Kennet, L.

Stonham, L.

Campbell of Eskan, L.

Llewelyn-Davies of Hastoe, Bs. [Teller.]

Strabolgi, L.

Champion, L.

Taylor of Mansfield, L.

Gardiner, L. (L. Chancellor.)

Maelor, L.

Wilson of Langside, L.

Goodman, L.

Ritchie-Calder, L.

NOT-CONTENTS

Airedale, L.

Conesford, L.

Monson, L.

Balerno, L.

Cork and Orrery, E.

Mowbray and Stourton, L.

Belstead, L.

Denham, L.

Netherthorpe, L.

Boston, L.

Falkland, V.

Sandford, L.

Brooke of Cumnor, L.

Falmouth, V.

Selkirk, E.

Brooke of Ystradfellte, Bs.

Gridley, L.

Silsoe, L. [Teller.]

Carnock, L.

Helsby, L. [Teller.]

Strathcarron, L.

Clifford of Chudleigh, L.

Holford, L.

10.21 p.m.
Lord KENNET Lord KENNET moved Amendment No. 45:
After Clause 80 insert the following new Clause:
Amendment of Rent Act 1968 s. 46
". At the end of section 46 of the Rent Act 1968 (determination of fair rent) there shall he added the following subsection:
'(4) In this section "improvement" includes the replacement of any fixture or fitting.'"
The noble Lord said: This Amendment follows up what I said on Second Reading about bringing this Bill into line with the Scottish Bill as regards whether or not tenants' replacements of things in houses should count for the determination of a fair rent under the regulated tenancy. I beg to move.
On Question, Amendment agreed to.
Clauses 81 and 82 agreed to.
Clause 83 [Interpretation]:
Lord KENNET Lord KENNET moved Amendment No. 46:
Page 48. line 32, leave out from ("capacity") to end of line 34.
The noble Lord said: There is a restriction in the Bill as drafted that the cost of works carried out by housing authorities for works for improvement and standard contributions and for contributions towards environmental improvements, cannot include the salaries for private authorities taking part in this, employed in an advisory or supervisory capacity. The Amendment removes that restriction so that they can be. I beg to move.
On Question, Amendment agreed to.
Clause 83, as amended, agreed to.
Clauses 84 to 87 agreed to.
Clause 88 [Citation, construction, commencement and extent]:
Lord KENNET Lord KENNET rose to move Amendment No. 47. The noble Lord said: Since Clause 80 has been lost, this Amendment will have to refer to Sections 78 and 79 instead of to Sections 78 to 80. Therefore, with the leave of the Committee and the approval of the Lord
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Chairman, I will move the Amendment so that it reads
"Page 50, line 1, leave out from ("Act") to first ("the") and insert ("except Sections 78 and 79, shall not come into force until").
Most of this Bill the Government would wish to bring into force one month after it received the Royal Assent, which is the usual procedure. It gives time for things to be drafted and for everything to be lined up, but there are certain provisions in Clauses 78 and 79 where there is nothing to be prepared and where the market in certain types of transaction is frozen, awaiting these provisions in the Bill. Therefore, it seems to the Government that nothing would be lost and much convenience would be gained if Clauses 78 and 79 were to come into effect immediately instead of waiting for the usual period of a month. I beg to move.
Amendment moved—
Page 50, line 1, leave out from ("Act") to first ("the") and insert ("except sections 78 and 79, shall not come into force until").—(Lord Kennet.)
On Question, Amendment agreed to.
Lord KENNET: Amendment No. 48 is consequential on Amendment No. 36. I beg to move Amendment No. 48.
Amendment moved—
Page 50, line 4, after ("section 77") insert ("and section (Right to terminate period for which option notice has effect)").—Lord Kennet.)
On Question, Amendment agreed to.
Clause 88, as amended, agreed to.
Schedule 8 [Minor and consequential Amendments]:
Lord KENNET: Amendment No. 48 rectifies an omission. I beg to move.
Amendment moved—
Page 66, line 18, leave out ("and 16") and insert ("16 and 21 (1)").—(Lord Kennet.)
On Question, Amendment agreed to.
Lord KENNET: Amendment No. 51 is a drafting Amendment for the sake of clarity. I beg to move.
Amendment moved—
Page 67, line 15, leave out ("Sections 98,") and insert ("Section 98 of that Act shall apply as if the reference therein to a purchase under Part V of that Act of a house to be used for

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housing purposes included a reference to a purchase under Part II of this Act of any house.
Sections")—(Lord Kennet.)
On Question, Amendment agreed to.
Lord KENNET: Amendment No. 52 is consequential upon Amendments carried in the House of Commons. I beg to move.
Amendment moved—
Page 68, line 18, at end insert—
(". In section 57 (4) of that Act for the words from 'section 4' to '1958' there shall be substituted the words 'Part I of the Housing Act 1969'").—(Lord Kennet.)
On Question, Amendment agreed to.
Lord KENNET: Section 14 of the Housing Subsidies Act 1967 empowers the Minister to reduce, suspend or discontinue the payment of annual subsidies in certain circumstances. One of those circumstances is where the Minister "is satisfied that a local authority have failed to discharge any of their duties under the Housing Acts 1957 to 1965". This Amendment will bring the composite reference to the Housing Acts up to date by referring to the Housing Acts 1957 to 1969. I beg to move.
Amendment moved—
Page 68, line 34, at end insert—
("The Housing Subsidies Act 1967
In section 14 (5) (a) of the Housing Subsidies Act 1967 for the word '1965' there shall be substituted the word '1969'.")—(Lord Kennet.)
On Question, Amendment agreed to.
Schedule 8, as amended, agreed to.
Schedule 9 [Savings and transitional provisions]:
Lord KENNET: Amendment No. 54 is a drafting Amendment. I beg to move.
Amendment moved—
Page 69, line 5, after ("application") insert ("or arrangements made or proposals").—(Lord Kennet.)
On Question, Amendment agreed to.
Schedule 9, as amended, agreed to.
Schedule 10 [Repeals]:
Lord KENNET: The Amendment repeals from the Housing Act 1957 a reference to a subsection of that Act which is already repealed by this Bill. It is tidying up. I beg to move.
Amendment moved—
Page 70, leave out line 10 and insert ("In section 59, subsection (3) and the word 'or (3)' in subsection (4)").—(Lord Kennet.)
On Question, Amendment agreed to.
Lord KENNET: Amendment 56 is a drafting Amendment. I beg to move.
Amendment moved—
Page 71, leave out lines 24 to 26.—(Lord Kennet.)
On Question, Amendment agreed to.
Schedule 10, as amended, agreed to.
In the Title:
Lord AIREDALE Lord AIREDALE moved Amendment No. 57:
Line 3, after ("dwellings") insert ("and houses").
The noble Lord said: Line 4 of the Long Title refers to "improving dwellings and houses". Line 3, where I seek to insert this Amendment, refers to "providing dwellings by conversion". I seek to insert the word "houses" there so as to make it read "providing dwellings and houses by conversion". There is no doubt that the conversion of a large barn may provide a large house, and if the word "dwelling" does not automatically include the word "house", as presumably it does not because they are both referred to separately in line 4, then I should have thought it better that they were separately referred to in line 3, so as to leave no doubt that in line 3 the provision of a house by the conversion of quite a large building is covered by the Bill. I beg to move.
Lord KENNET: Only the term "dwelling" is used in Part I of the Bill in relation to improvement grants for conversions, and so to carry the word "houses" into the Long Title would be inappropriate because it would not reflect what is in the Bill. The term "dwelling" is not defined in the Bill, but an ordinary house provided by the conversion of, for example, a building such as a barn, would qualify for improvement grant aid under Part I as being a dwelling provided by the conversion of a building. I hope that may satisfy the noble Lord.
Lord AIREDALE: Well, I do not understand what is the need for using the expression "dwellings and houses" in line 4 if "dwellings" alone is sufficient

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in line 3. I think I had better read in Hansard what the noble Lord has said, and see if I can understand and accept it, and whether or not I ought to move an Amendment at the next stage of the Bill. In the meantime, I beg leave to withdraw this one.
Amendment, by leave, withdrawn.
Lord KENNET: Amendment No. 58 is consequential on Amendment No. 36. I beg to move.
Amendment moved—
Line 19. leave out ("section 28") and insert ("Part II"—(Lord Kennet.)
On Question, Amendment agreed to.
Lord KENNET: I always like to say what consequentials are consequential on, for the benefit of posterity and students. This Amendment is consequential on Amendments Nos. 33 and 45. I beg to move.
Amendment moved—
Line 20, after ("1967") insert ("to amend section 46 of the Rent Act 1968; to increase the fine which may be imposed under section 170 of the Housing Act 1957")—(Lord Kennet.
On Question, Amendment agreed to.
On Question, Whether the Title, as amended, shall stand part of the Bill?
Lord CONESFORD: I only wish to ask the Parliamentary Secretary: Does the Title require an Amendment as a result of the last Division?
Lord KENNET: I do not know. It may require one. I shall have a look at it and, if so, raise the matter on the next occasion.
Title, as amended, agreed to.
House resumed: Bill reported, with the Amendments.

RACE RELATIONS
10.32 p.m.
Lord O'HAGAN Lord O'HAGAN rose to ask Her Majesty's Government whether they are aware of the deterioration of race relations in the United Kingdom, and of the harm being done by the tone of public debate on race and immigration; and whether they will come forward with proposals which will reassure the inhabitants of the United Kingdom, whatever their colour.
The noble Lord said: My Lords, I am sad that I have to raise this subject in your Lordships' House. I am sad that this country, of all countries, is in danger of letting a chance of real achievement slip away. Calmly and quietly I will try to indicate what I should say may be needed, and how Her Majesty's Government have the opportunity for satisfying that need.
Before I turn to each of the three parts of my Question it will probably be helpful if I tell your Lordships what I propose to talk about to-night. I am not going to talk about the rate or level of immigration control: those decisions have very largely been taken. I shall be talking about the inhabitants of the United Kingdom, the people who are already here. Every one of your Lordships wants all who live here to prosper and to get on well with each other. Nevertheless, since the way immigration is controlled does affect the approach of the immigrants and indigenous inhabitants towards race or community relations,]'. feel that I must touch on it.
The first part of my Question asks the Government
"whether they are aware of a deterioration of race relations in the United Kingdom."
I am not belittling the achievements of this Government, particularly their bolstering of the Race Relations Board and the establishment of the Community Relations Commission, to both of which I take off my proverbial hat. Still, things are getting worse. Who says so? Not just myself. It is the pervading impression that I have picked up from talking to people of good will actively concerned at all levels. The Community Relations Commission, in their first Report, say in cautious and dispassionate language:
"Many knowledgeable observers and many workers in this field would no doubt write 1968 down as a year of deterioration in community relations."
I have, myself, observed the many forces militating against peaceful development. Some of these I will indicate in more detail later on. The Rose Report shows that the situation is full of hope; but hope is not enough and must be nourished by action.
At this moment, I will point a finger at Her Majesty's Government. Some of their measures have contributed to the

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decay. The Commonwealth Immigrants Act 1968 broke pledges. It is blatantly discriminatory, and was rushed through Parliament in panic. Your Lordships will remember the threat of the1¼ million "yellow peril". This has taken its toll of good will. The restriction on fiancees has curdled the faith of many. I specifically ask the noble Lord, Lord Stonham, to explain to me and to the House what would happen if two British white sisters got engaged, one to a German, one to a Pakistani, and subsequently both pairs got married. Is not the position at the moment that the Commonwealth citizen would probably not be allowed to remain here, while in due course of time the alien probably might be? I have been told that many Commonwealth immigrants have had little faith in the Conservative Party, but in the case of the Labour Party, seen as a bastion for the under-privileged, that trust has been considerably undermined with destructive consequences.
I now move on to "the tone of public debate." The Conservative Party have given no strong lead. So far as I am aware, there has been no firm statement of intent on community relations, even from Mr. Hogg. Perhaps we are waiting for a consensus. The numbers coming in and the concentration of those here are important factors, but discussion of those points should not obscure the need for a constructive and positive declaration of faith on race or community relations, followed by details of measures in store. By talking all the time about immigration the Conservatives are helping to mask the facts about the prejudice that exists in this country, and they are helping to focus attention on entry, rather than on the challenge for action presented by the state of race relations here to-day; and so the public debate is diverted from its most profitable role in a way that disturbs rather than calms.
Of course, no discussion can proceed until the facts are made public. We are all grateful for the solid material in the Institute of Race Relations Report. All the facts there must be made generally available; and the way they are presented is very important. There is the system whereby local authorities can obtain a grant if their area has special needs attributable to immigrants. Well
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and good. The figures which the local authorities have to obtain to get the money to deal with the problems of poverty (under which head the immigrants come) have been, in some instances, over-exposed by the local Press. The problem is turned on its head. The immigrants were made to seem responsible for the poverty. This is an example of what can happen in public discussion with genuine facts.
Your Lordships will expect me to be more particular on the decline in the tone of public debate. In my view, much of the blame sits heavily on the shoulders of Mr. Enoch Powell. I do not for one moment question his right to state his views. I believe in free speech. I am not indulging in character assassination; I am not saying that Mr. Powell is an evil human being. I am confident that he believes he is helping his beloved country. Still, it is stupid to dismiss him as a sort of Malcolm Muggeridge, or the Maharishi Yoga, as he is now called. One has only to note the attention which the Press gives to Mr. Powell's speeches—not so much those in another place, but those he makes up and down the country—to feel his impact. I should like to examine some of the facts contained in his latest speech.
Your Lordships will of course know how the B.B.C. poll on repatriation, to which Mr. Powell attached so much importance, has been dismissed by the pollster responsible.
"It was a straw poll, and as such it was not something on which a philosophy can be based",
said Mr. Taylor, of the Opinion Research Centre. Mr. Powell's strategy of repatriation appears to be based upon a flimsy foundation. But at the centre of Mr. Powell's argument lies the threat to a continuing high level of immigrant births in relation to total births. We know the truth, especially now that the Rose Report is out. Fewer immigrants are coming into the reproductive age than are going out of it; new immigrants are mostly highly skilled and tend to have small families; those already here gradually attune themselves to our social norms, and have fewer children. Dr. Eversely, an expert, to whom Mr. Powell himself refers in his latest speech, considers that the birth rate will fall very quickly.
Mr. Powell has now turned statistician. His dubious anecdotes have had their emotional impact, and now he seems to pose as the detached observer. I think that he has been misled by his zeal to preserve what he feels to be the truly British nature of Britain; and so he encourages his Party and the country to ignore the task of building bonds of trust between those who live here. It was another gentleman with a Welsh name who said in Shakespeare's Henry IV, Part I:
"I can call spirits from the vasty deep!"
The bluff English reply was:
"Ay, but will they come when you do call for them?"
Mr. Powell's appeals call up the most powerful phantasms from the very vasty deep. I sometimes wonder if he understands the nature of the responses he inspires. Does he look beneath the outer surface of all that proud patriotism?
Your Lordships will be relieved when I turn to the third part of my Question. I am asking Her Majesty's Government,
"Whether they will come forward with proposals which will reassure the inhabitants of the United Kingdom, whatever their colour."
If the problems connected with immigrants and their descendants are seen to be tackled, confidence in the possibility of their solution will flow round the country and make that solution more likely. The Rose Report shows how much goodwill there is, especially among the younger people here.
Let us capitalise on it. I know that much is being done: urban aid increases; the rate for grants under the 1966 Local Government Act has been raised; the local authorities have put more forward; the Race Relations Board prospers; the Community Relations Commission promises well. I attach a lot of hope to the Community Relations Commission. But are the Government satisfied it is accessible to the immigrant in the street? One wonders. Do the Government really believe in the Commission? Is it true, I ask the noble Lord, Lord Stonham, that the Commission was not consulted over the fianc´e restrictions? I hope the noble Lord can tell us that the Commission will be given all possible assistance and more money, and that it will be trusted to do its job.
My Lords, I ask for proposals in three specific spheres. Housing is perhaps the
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key to the future. The new Housing Bill will help, for the nature and the location of the home determines the education of the child, which in turn influences his or her future employment. Can the Government indicate whether they will really co-ordinate the efforts towards urban renewal, so that there is more drive from the centre? Will they put greater emphasis on the criterion of need in local housing projects? The urban renewal programme must be tied up with the local housing policy. Will this come about? Specifically, will there be a chance for local associations to obtain funds without going through local authorities?
On education, are the Government satisfied that dispersal policies are sound? Will they attempt to substitute a linguistic criterion for the present odd immegrant criterion? Will they see that their disposal policies are properly implemented, so that the danger of predominantly immigrant schools, which lead to a coupling of colour and inferiority, is avoided? Will they ensure that the syllabuses and the intentions of the colleges of education and the like are relevant to the needs of the immigrants? Cannot the Department of Education and Science give a bit more of a lead?
On employment, will the Government make up their mind about something they have been thinking about since 1966—whether to put an anti-discrimination Clause in Government contracts? Will they make sure that private employment bureaux are regulated and their records open for inspection? Lastly, police. Will the Government have a look at the complaints procedure and the training of police in the field of race relations and put a stop to the harmful involvement of the police in vetting the accommodation for the dependants of immigrants?
My Lords, I hope I have not preached to your Lordships. If I were going to I might have chosen as my text the last words of a lady whose statue is not far from here. Nurse Cavell said before she died:
"Patriotism is not enough; I must have no hatred or bitterness towards anyone".
In that spirit I have tried to ask my Question. In that spirit I hope the debate will continue.
10.47 p.m.
Lord SANDFORD: My Lords, I am sure that your Lordships would all like

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me to congratulate the noble Lord, Lord O'Hagan, in bringing this Question before us, and not the least in his persistence with it. It has been on the Order Paper for some time. It is not his fault, in my view, that the Question is, however, a little mistimed. I do not refer to the fact that it is now 10.45 p.m. I do refer to the fact, however, that it is mistimed in relation to this Report from the Institute of Race Relations. The noble Lord began his Question by putting to us his view that there had been a deterioration in race relations; and that certainly is a debatable point. If he had asked it of us a week ago or a fortnight ago we should have had to discuss it with the best evidence and advice we could have laid our hands on. But if he asks us to discuss it to-night, we know that all the information, much the best available, is here in the Report I have in my hands. But for my own part, I am only too ready to confess that I have not had time to "read, mark, learn and inwardly digest" this admirable Report with anything like sufficient thoroughness to bring it into a debate on this complex subject in your Lordships' House. I venture to doubt whether many other noble Lords have yet had time to do so.
However, I offer a few brief observations about current attitudes to race relations culled from a very brief scanning of this valuable Report. Perhaps I may turn aside for one moment, because I think that this is the first occasion that this subject has been debated since this Report was published, to give it a welcome and to congratulate all those who have taken any part in its publication: the Institute of Race Relations and Mr. Philip Mason, for his insight, I think seven years ago, that basic information on this problem was so sorely needed; Dr. Leslie Farrer-Brown of the Nuffield Foundation, who had the insight in those early days to see the scale of the research that was required and to allocate the necessary funds; and, not the least, to Mr. Jim Rose and his associates for the perfectly sterling work they have done in producing it.
From just a very brief scanning of this Report, it seems to me that there are four elements in current attitudes to race relations which have a bearing on the question which the noble Lord posed to
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us. These four elements are, it seems, as follows: There is one set of attitudes, often the most extreme, which have their origin more in the disordered personality of those who hold and express them than in the factual situation to which they are said to relate. We really must not allow ourselves, my Lords, to get worked up into a lather about these attitudes, still less to let such attitudes govern policy, even if they do manage occasionally to get broadcast and reported.
The second group of attitudes seem to me—and this Report endorses it—to spring from fear or ignorance, or both. They are clearly susceptible to an educational approach on formal lines in schools and colleges and, perhaps more importantly, on informal lines in clubs, churches, trades unions and in every possible setting where people meet for ordinary converse. This Report when it has been read, marked, learned, inwardly digested and disseminated, will prove a most signal contribution in this field. I am sure that it will have a very marked and salutary effect.
The third group of attitudes, which has already been touched on by the noble Lord, Lord O'Hagan, springs from multiple deprivations. These occur whenever too many people, and particularly when there are black and white in competition with each other, are chasing inadequate housing, inadequate schooling, insufficient playgrounds, not enough jobs or any other facilities and benefits which are in great demand. These attitudes are clearly susceptible to local government action, and I am sure that the noble Lord, Lord Stonham, in his reply to the debate, will tell us how things are getting on in the urban areas of special need, the educational priority areas and so on.
The fourth group of attitudes are those, alas! that are engendered and built up by the mass media. These media are, regrettably, only too apt to give prominence to the views of extremists because in their view this produces a better debate and a more exciting entertainment. They thus confer an importance on those views, and on the holders of them, which is not inherently deserved. Unfortunately, the mass media are not particularly susceptible to outside advice. One hopes that more responsible policies will in time

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prevail, but that in the meantime fewer and fewer people will believe everything they read in the newspapers, hear on the radio and see on television.
With all the evidence in this Report to hand but, alas!, at present unread—or certainly not read at all thoroughly by me—I do not want to venture any deeper into this topic to-night. Perhaps one of the main findings of the Report will provide some of the reassurance that the noble Lord, Lord O'Hagan, is asking for. I read from the third paragraph on page 737:
"The extent of tolerance in Britain cannot be stressed too often and is indeed one of the major facts of the actual situation. This has to be communicated to people whose anxieties on this score may stem in part from the mistaken view that there is not only widespread anxiety about coloured immigration but widespread hostility towards coloured people as such. What is needed, in short, is not an effort to make people unprejudiced but rather to remind them that they are unprejudiced."
Nevertheless, this is a most important social issue and further debate in your Lordships' House in due time would be a good thing, but I would submit that further debate based on conjecture and on incomplete evidence, when we have 800 pages of fresh evidence based on widespread and thorough research waiting to be read and digested, would not in my view be wise.
10.56 p.m.
Lord CAMPBELL of ESKAN: My Lords, I am sure that Lord O'Hagan's Question discloses a real and frightening problem. I will try not to speak for too long—certainly not more than about 10 minutes—but I feel that even at this late hour on a hot night, and especially after the two moving speeches that have gone before, the importance of the subject demands more than a glancing blow. I have the honour to be one of the two Deputy Chairmen of the Community Relations Commission, under the forthright chairmanship of Mr. Frank Cousins, with his lifelong concern for people, whoever they are and wherever they come from.
There can be no doubt that the purport and tone of some notorious recent speeches on race and immigration have made the work of improving community relations in Britain immeasurably harder. The noble Lord, Lord O'Hagan, referred to Mr. Powell's speeches in a truly dramatic way. The assumption nderly-
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ing these speeches seems to be that coloured people somehow pollute or corrupt our pure British society, and the greater the numbers the greater the pollution. This is evil and dangerous nonsense. We are a hotch-potch of nationalities. Britain has been a country of immigration throughout its history. British life and culture have been created and enriched by successive waves of immigrants. Nobody now seems to object to white Commonwealth immigrants. Unreason and hostility begin only with people whose skins are a different colour. I believe that this sort of prejudice is a far greater menace to our democratic system and our cultural values than any coloured man, women or child could possibly be. It threatens our rights to call ourselves a civilised society.
It is not at all difficult to make speeches playing upon people's baser instincts and emotions, but the trouble is that every time views of this sort are uttered and given prominence by the Press they tend to gain currency. Mischievous gossip always travels far and fast (the noble Lord, Lord Sandford, made this point most effectively, if I may say so); this encourages the spread of intolerance, and makes it acceptable rather than thoroughly disreputable to talk a racially prejudiced way. And this, as I have said, makes it much more difficult to promote good relations between members of different races within the community. Moreover, all Community relations work depends on co-operation from local authorities in giving practical and moral support in promoting good relations. There is clear evidence that another damaging effect of these notorious speeches is to increase the Commission's difficulties with some local authorities.
It is maddening that so many people will confuse race with immigration or immigration with race. Often this is sheer thoughtlessnes, but sometimes, as in the case of a thoroughly obnoxious leaflet that I received through the post this morning from the National Front, it is done wih calculated evil intent. Of course it is justifiable to talk about controlling immigration to the extent that the net inflow of people into Britain must not be more than our housing, employment and social services can cope with. But what is wrong and barbarous is to

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discriminate, in immigration as in anything else, against coloured peoples simply because of their race and the colour of their skins. It is perhaps understandable, though hardly hospitable and worthy of the British sense of fair play, to treat newcomers, any newcomers, as outsiders; but it is outrageous to treat the quarter of a million coloured children born and bred in Britain as outsiders, and to try to relegate them to the permanent ranks of second-class citizenship. That is the implication of publicly induced racial hostility. I always find myself surprised at how supposedly intelligent men and women can say the things they do without ever stopping to think what they would feel like if they were at the receiving end of their own speeches. Arthur Koestler referred to some people as "mimophants"—people who, where their own susceptibilities are concerned, curl up like mimosa, but who trample like a herd of elephants on the susceptibilities of others.
One of the difficulties underlying the noble Lord's Question is that community and race relations work is for the most part very unspectacular. It is a new and untried and extremely complex field of social service. It is a matter of public education and public information. It is a matter of repairing what bridges there are in our society and trying to build new ones. This does not attract publicity, unless perhaps there is a Royal opening. But blow up a bridge, or even threaten to blow it up, or put some plasticine under it that looks explosive, and you hit the headlines the next day.
Even that admirable paper, the Financial Times, went out of its way a week or so ago in a main leader to allege, quite untruthfully, that the Race Relations Board was having to consider usurping the functions of the Community Relations Commission owing to its failure to make any real impact. This was about as ill-informed as it is possible to be and grossly unfair to both bodies. Incidentally, I must confess that even the New Statesman, of which I have the honour to be Chairman, did not do much better. I was very pleased to see that Mr. Mark Bonham-Carter, the splendidly successful Chairman of the Race Relations Board, lost no time in writing to the Financial Times to refute their heresy and
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to explain that the functions and spheres of operation of the two bodies are quite different from each other.
Community and race relations work is going to be even harder than it need be unless the British Press can learn not only not to discriminate against colour, but also to discriminate between the dramatic, spectacular, destructive story and the constant, plodding work of the bridge-builders in our society. Their work through and by influencing others scores no credits. But my old grandfather used to say, "You can achieve far more if you don't care who gets the credit for it."
I want to finish with two quotations. The first is from Mr. James Sweeney-Fenton, who described himself as public relations officer for the Montserrat Progressive Society when he was recently giving evidence at Hackney to the Select Committee on Race Relations and Immigration. He said:
"We should work together to make this a better place for us to live in, because this is a very good country and we could help to make it better."
He was talking as an immigrant. The second quotation comes from Colour and Citizenship: A Report on British Race Relations, by E. J. B. Rose and Associates, to which the noble Lord, Lord Sandford, has so warmly and rightly referred this evening. I hope that its great battery of recommendations will be taken seriously by the Government and translated into practice. I quote from that Report:
"By throwing light on a series of major social issues … immigrants illuminate the strength and weaknesses of our social system and indicate the surgery which it requires … In short, our society is in important respects an unjust society organised in such a way as to perpetuate these injustices. Immigration, by stimulating a concern for social justice, may also provide the solvent for the inflexibility which helped to produce the symptoms now ascribed to the presence of immigrants."
I believe that the best way, in the words of the noble Lord's Question, for the Government to reassure the inhabitants of the United Kingdom, whatever their colour, is not to single out immigrants or coloured people, but to attack poverty and injustice wherever they occur.
11.5 p.m.
Lord GARNER: My Lords, at this late hour I do not propose to detain your Lordships for more than a few moments,

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but I should like to congratulate the noble Lord, Lord O'Hagan, for bringing forward this important Question. I half agree and half disagree with some of the words which fell from the lips of the noble Lord, Lord Sandford. I am sure that the noble Lord, Lord O'Hagan, is not entirely responsible for the timing, since he put down his Question some days earlier.
Lord SANDFORD: My Lords, I said is was not the noble Lord's fault.
Lord GARNER: I accept that. Since the Question was put down, the Report has appeared. This discussion may help to focus attention on its important recommendations, and I trust will encourage us all to study it in more detail. I would certainly agree with the noble Lord, Lord Sandford, that it is a basic document. One of the things that we lack in dealing with this problem is knowledge of the real facts, and it is on a statement of this kind that we can base future policies.
I do not wish to say very much about the general question this evening. I am not sure that I share Lord O'Hagan's view that race relations are deteriorating in this country. In many ways, I think there are signs of improvement; and I should certainly have thought that it was something for the better that we are approaching many of these problems nowadays with more honesty and realism than was the case in the past. It is a factor for the better that it seems—I say this from my own observation—that younger people, on the whole, are freer from prejudice than many of the older generation, and this should be an increasing advantage in the future. The Report itself, as the noble Lord, Lord Sandford, said, holds out various signs of encouragement for the future.
What is the case, I think, is that the tone of public discussion on race problems has deteriorated, and this, surely, is to be deplored: because what we are seeking for is a reasonable way of being able to live together as human beings, and if both sides take an extreme course, it will be extremely difficult to find solutions to the problems. Certainly fear, prejudice, intolerance and calumny are not suitable guides for us.
I want to mention one particular aspect of the problem, and that is the question
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of overseas students, who would not perhaps normally come into this category of things affecting the general problem. I raise it because I think the network of students round the world studying in various other countries is one of the factors making for a lessening of narrow, selfish nationalisms, and of helping perhaps to create a saner world order. In this country we have always prided ourselves on our ancient seats of learning, and more recently on our technical institutions, our medical schools and the various other establishments where people can receive training of every kind, and can conduct research under the most modern conditions. We have for centuries welcomed people from abroad to come for training and education in this country, and in recent years the British Government have been extremely generous in providing facilities for students from overseas.
I happen to be Chairman of the Commonwealth Scholarship Commission in the United Kingdom, and perhaps on that account I should declare an interest in this matter. At the present moment, for example, we have more than 600 scholars and Fellows, men and women, from all parts of the Commonwealth. But that is only a small part of the total flow of students who come to this country in a variety of ways for a number of different disciplines and skills, and. the total number at the present time is something of the order of 70, 000. My point is this. Of course, the primary purpose of students coming to this country is to receive the appropriate training, but this can only be achieved if they live tender congenial conditions conducive to their work.
But there is a further point. I think it is not unfair that we in the receiving country, so to speak, should hope that the students who come here for two, three or four years should return to their own countries—where before long many of them are bound to be in leading positions—with an understanding of the British, and perhaps with a disposition to favour our attitudes. But how is the student likely to react if he hears the doctrines of racial intolerance being preached and applauded? How is he likely to react if he finds discrimination being practised against people whose only crime is that the colour of their skin happens to be precisely the same as his own? Or,

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indeed, if he or she is the victim of some petty persecution—because, after all, students are not distinguishable from other categories of people when they travel up and down the country? I am not for a moment claiming that instances of this kind are frequent. But no one can deny that some do occur from time to time. One has to remember that a hundred acts of kindness are treated as natural and no particular attention is paid to them, whereas one single, isolated act of an insult can leave a searing impression for life. There are far too many authenticated cases of students—men who establish themselves later—from Asia or Africa, who, because of some no doubt unthinking act on the part of an individual in their student days, have been soured for the rest of their lives.
On one occasion I was friendly with an Indian member of the I.C.S. who was speaking to me of his student days in London, and of the very happy time he had with a family. He was in lodgings in London, and spent three years with the family continuously. He said to me, "You must remember when I came to Britain for the first time you captured me, and when you captured me you did so for life". He ultimately rose to very high positions in the Indian Government service. He was certainly on occasion, when necessary, strongly critical of British policies, but he never lost his basic affection and understanding for this country. My whole point is that, surely, that is the atmosphere we wish to preserve; and my only reason for mentioning this this evening is as an additional reason for advocating that we should establish sanity in the conduct of our race relations in this country and moderation in our public discussions on the subject.
11.12 p.m.
Lord BROCKWAY: My Lords, I should like to join with others in thanking Lord O'Hagan for initiating this discussion. I regret the time, but I do not entirely accept the view which has been expressed by the noble Lord, Lord Sandford, that this is the wrong period in which to have this discussion. We have had within recent weeks the Report of the Race Relations Board; we have had the Report of the Community Relations Commission. We have now had this
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momentous document from the International Relations Institute, Colour and Citizenship. While I appreciate that many have not been able in three days to read that large document, it has been well covered in the daily Press. Apart from those three reports, a Select Committee of another place which has been discussing the question of school leavers is now going to discuss the system of appeals in immigrant countries. Next week we shall be adjourning until October; therefore I think my noble friend was quite entitled to raise this issue tonight before we resume in October.
I want to say a word or two about those Reports. There is the Report of the Race Relations Board. I endorse with deep appreciation the service which Mr. Mark Bonham Carter has contributed as Chairman of that Board. It has been quite outstanding. The one point which particularly interested me in their Report was the statement that Commonwealth immigrants are inclined to go to those firms which welcome them, while a large number of firms do not accept them as employees. Therefore Commonwealth immigrants refrain from going to those firms, and because they refrain the fact that there is discrimination by those firms is not brought before the Race Relations Board. Tonight I want to urge that the Race Relations Board, who have within their terms of reference initiative where discrimination takes place, should challenge on this issue of discrimination the many firms in this country which do not employ coloured persons. I may mention, incidentally, that I have never seen a coloured person as a clerk in any of the banks in this country.
On the Report that has been issued by the Community Relations Commission I want to make this comment. It has a distinct contribution from the Race Relations Board. The Race Relations Board have to deal with discrimination when it takes place. The Community Relations Council have to seek to prevent discrimination occurring. Frankly, although there are two members of that Commission in the House this evening I was a little disappointed by their Report. I was disappointed because it did not reveal positive action by that Council to prevent discrimination, as one would like to see it. There was little indication that

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they were carrying out the educative work against discrimination which seems to me to be within its terms of reference.
I just throw out this other suggestion. I am not a Scot, but when I have been to Scotland I have been tremendously impressed by the absence of racial feeling in that country, particularly in relation to coloured persons. There may be some religious feeling between Orange and Green, but there is none between those who are white and those who are coloured, and I should have liked to see the Community Relations Council establishing in Scotland the co-operation between the different races which might be an example to this country as well.
Let me just say one other thing, because I think it is important. The Community Relations Council are a quite extraordinary departure in our pattern of constitutional and voluntary organisations in this country. They have a statutory centre, but under that statutory centre are local voluntary organisations. I am one of those who believe in a democracy which is not just centralised in government and not just centralised in local authorities. I believe in a democracy which is local, spontaneous and dynamic, and I regard this pattern of a statutory central authority with these local voluntary organisations as an example of what might be an advance in democratic relations in this country. And I would only say to the Community Relations Council that I think they must be very careful indeed of their statutory position, not to impose upon local voluntary organisations requirements which may often not be according to local circumstances, and which may very often prevent the voluntary, spontaneous, enthusiastic dedication of individuals to the cause of community relations. I say that because I believe in a democracy which has local spontaneity.
I turn to the third Report, which is the Report on Colour and Citizenship, to which reference has been made. I regard this as a quite historic document. One thing that impresses me in this Report is some doubt about the point which is made in Lord O'Hagan's Question as to the deterioration of racial relations in this country. There are factors for it; there are factors in the immigration policy which Her Majesty's Government has pursued which have caused great resentment among very many of our coloured
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population. In that matter I wan: particularly to refer to one problem which I have raised previously in this House, arising from the decision that immigrants should have entry permits before they leave their territories. I want to ask very strongly about this. It is much easier at Heathrow, much easier for our immigration officers here, much easier for the Home Office.
But what is the situation in the countries from which the immigrants come? I ask the Minister to tell us when he replies—this has gone on for about five weeks now—has one single appeal come from any territory from which immigrants have been desiring to come to this country against the decisions in those territories? I do not believe there has been one. That does not mean that there is not the desire. It means that there has been a total collapse of the whole machinery by which those appeals could be voiced. I know the situation. I am Indian born; I come from an Indian village. I have seen the reports about women with children in their arms who for days and days have asked for the right to come to this country, and there has been no answer. That has been going on for weeks. Nothing has been done.
Lord STONHAM: My Lords, nay I interrupt my noble friend? He told us that this had been going on for weeks long before we introduced the question of the need for compulsory entry certificates. There is nothing new in this, and it has no direct relationship to the need for compulsory entry certificates.
Lord BROCKWAY: Of course it has. It was going on for weeks before, and I exposed it in this House. But now that these people are not allowed to leave these territories without getting their entry permits it means that there is greater and greater delay; and the Government have been guilty of establishing no machinery at all by which the appeals can be made. I challenge the Minister to say that one single appeal has been made since this inhuman treatment in our Commonwealth countries has been established. I speak deeply about this because I know of it. I am not suggesting that our Government are inhuman. They are appallingly ignorant, and the suggestion that someone should be appointed to investigate this matter

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may take six weeks; and these wretched people from their distant villages are left absolutely uncared for because the Government have introduced a system of control which, although it may be easier here, does not help those wretched people in the territories. I apologise for speaking in this way, but I feel very deeply about this because I have a knowledge of it.
I want to turn to the Report which has been issued on Colour and Citizenship. There is one most interesting proposal here. It is the proposal that responsibility should be transferred from the Home Office to the Department of Health and Social Services, and the argument is that the problem of coloured immigrants in this country is largely a problem of urban poverty, of housing, of employment and of education. I think all of us who have any knowledge of this problem will accept that. But it is not only that. We have to acknowledge that in addition to the problem of poverty there is certain racial prejudice.
On that proposal, I would say that while in the long run it may be desirable to transfer this authority from the Home Office to the Department of Health and Social Services, I rather doubt whether it should be done immediately, partly because this is a new Department which has its own large problems, and partly because it is also a matter of racial prejudice, in addition to the problem of poverty.
I want to look at two problems which are raised in this Report. The first is that of housing. The Report indicates that local authorities have not been equitable in their allocation of houses to the Commonwealth immigrants; and also that the absence of accommodation at low rents has meant that there has been overcrowding in immigrant homes because of the high rents and, even when homes have been bought, by the high mortgage rates. I hope that Her Majesty's Government will very strongly urge local authorities to find accommodation in their council estates on an equal basis for Commonwealth immigrants, and will take advantage of the allowances which are now made for meeting mortgage charges and for home grants, which will enable these problems to be dealt with.
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The other problem with which I want to deal especially is that of schools and education. I find it very difficult to come to a decision whether the proposal for the dispersal of the children of Commonwealth immigrants is correct or not. It is incorrect in the sense that it recognises the difference of colour; it has the advantage of distributing children of Commonwealth immigrants among a larger section of the community, and therefore meeting very many prejudices which occur. I believe it to be quite wrong to take the view that when these children have become masters of the English language they are any disadvantage to educational advance.
In another place I used to represent the constituency of Eton and Slough. We have in Slough a large immigrant population. I want to read to the House the statement made by the Slough Education Officer, Mr. Charles Smythe, last week. He said:
"More and more immigrant children at secondary schools are taking G.C.E.s and passing them. In schools with large numbers of them they tend to be the pace setters, and often raise the whole academic standard. In many cases Asian children arrived in Slough with little or no English so they did not pass the 11 plus, but once the handicap was overcome they often surged ahead and became the pace setters at around the age of 13 to 14. Another factor was the young immigrants dedication to school work, aided by Asian parents who set great store on education."
I believe that as we now go forward we have a great opportunity, because I think the psychological situation is much better than it was. As we go forward with the recognition of the equality of human beings, whatever be their race or their colour, we must welcome them, give them an opportunity, and we may be able to solve the problems based on the Reports which have been presented in the last few weeks in a way which will be encouraging for the future, and which may mean that we may not suffer what has happened in some other countries as a result of racial discrimination.
11.34 p.m.
Lord GRIDLEY: My Lords, I should like to express my appreciation of the Question which has been tabled by the noble Lord, Lord O'Hagan, which I think is of immense importance not only to this country but to people with humanitarian ideals everywhere. In the speeches that have been made so far, the consequences

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of this subject have covered a very wide aspect, but I should like to get back particularly to the terms of the Question put by the noble Lord, Lord O'Hagan. The noble Lord is specifically asking Her Majesty's Government
"whether they are aware of the deterioration of race relations …, and of the harm being done by the tone of public debate on race and immigration; and whether they will come forward with proposals which will reassure the inhabitants of the United Kingdom, whatever their colour".
My Lords, I do not know exactly what was in the mind of the noble Lord when he framed that Question, but I want to confine myself very strictly to the issues which I think it raises.
What has rather surprised me tonight is the fact that no noble Lord has really touched on the Commonwealth and all its aspects. When I think of racial relations and the tone of public debate, I think instinctively of the Commonwealth, for whose people I have a very deep affection. Racial problems do not really exist with the old Commonwealth as we understand it, composed as it is of our own and European stock. The difficulties that arise involve the peoples that come from the new, independent nations—post-1945. I suggest that the problems of race and immigration which have arisen would have been immeasurably easier to discuss if we had set the tone of our debate with some clear concept of the Commonwealth and what I think the Commonwealth means to all your Lordships.
We have no real idea what the Commonwealth to-day stands for. There is no concept about the Commonwealth except that we do not interfere with the internal affairs of member States, and that we are all independent. Some of these independent nations recognise the Crown and Her Majesty as being Head of the Commonwealth. Other nations, such as Malaysia and India, do not recognise the Crown and have their own Heads. The real result of the situation is that, independent as all of us are, we are free to criticise each other. The independent nations are free to criticise us, and do so on racial problems in the United Nations and elsewhere.
There are two problems which arise here. There is the fear of the immigrant and the fear of our own, European, white population. This raises doubts and fears in Britain, and antagonises sections of our
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own population. It does not make the solution of our own racial problems, any the easier, and it does not help, I would venture to suggest, if we do not explain ourselves and if we do not seem to answer the criticisms that are made against us. I submit that this is very largely the position, that we do not defend ourselves; and at the present moment there is no leadership within the Commonwealth.
Then, my Lords, in our public debates and in the debates which are carried on in the Press and on the radio and television there are the convictions as to how we should deal with racial and immigration problems, very sincerely held by many of us, which may be diametrically opposed, and yet each of us in his own way passionately desires to see a solution to these problems. If we allow passion to rise it raises the temperature. Anything said about race can be inflammatory, whether it is said about our own race or the coloured races, and I would submit that this sometimes happens.
In this country there is an organisation known as Black Power which exists to exploit the wishes of the extremists. In my humble submission, it has no relevance in Britain. Basically, the British people are fair-minded and tolerant; and for this reason alone it has no relevance. But Black Power increases the fear and will never help in the furtherance of good race relations. I should be the first to admit that there are white racialists just as much as there are black racialists. But both categories are in the minority and nothing should be said or done which would increase the numbers of those minorities.
The Question tabled by the noble Lord, Lord O'Hagan, was:
"To ask Her Majesty's Government whether they are aware of the deterioration of race relations in the United Kingdom, and of the harm being done by the tone of public debate on race and immigration; and whether they will come forward with proposals which will reassure the inhabitants of the United Kingdom, whatever their colour."
I do not think that the tone of debate on race and immigration has always been as high as it might have been, for the reasons I have given; but I certainly do not think it has been deplorable. I think the public would tend to be reassured if we were seen to be debating these

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question with knowledge and understanding, entirely without passion, and with some proposals for the future. Among the proposals that I have in mind would be proposals to establish confidence with our own people and with those of the immigrant community. We should always proceed, so far as is humanly possible, by persuasion rather than by compulsion.
My Lords, if there was anything which could impress on us all the fact that we must live together it was the television picture of the world in space, the picture which was passed back to earth last Christmas by the television camera of the astronauts, Lovell, Borman and Anders. But we sometimes tend to forget that we exercise considerable influence over a quarter of the earth's surface. I firmly believe that we should use that influence for the good and benefit of mankind. We have the experience and the knowledge to deal with these problems. It is my opinion that if we use that influence wisely and well, this indeed willl be a contribution to humanity and mankind. I would make one final comment. I should like to see within the Commonweath countries, in the newly independent nations and in our own nation and Government and people less desire to air their grievances and difficulties and a greater desire to be constructive and to seek areas of agreement. If we did that I think that much of our problems would be solved and that this would be a great contribution to the stability and happiness of our own people and of the immigrant community we have with us.
11.44 p.m.
Lord GOODMAN: My Lords, I do not propose to take the merciless view that as we have sat here so long there is no practical reason why we should not sit here all night. I shall in fact say what I want to say briefly. The noble Lord, Lord O'Hagan, flattered me by asking me to give him some little support in this debate. I must say that I was very attracted by the subject he selected. It seems to me to be a matter of particular importance this moment of time and one worthy of the attendance and notice of a number of noble Lords. I venture to say, without being patronising, that I was particularly gratified to see a very young man take an interest in these matters. I hope he will not resent
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the observation that he is a young man. There is no particular importance in his being young except that we have the comforting knowledge that for a good many years to come there will be a Member of your Lordships' House concerned, and intelligently concerned, with matters of this importance, and that is the significance of his youth. I should like to say this. First, no one could possibly deplore the tone of the debate this evening. It has been exemplary, and if all discussions had been conducted in this manner, no complaint would have arisen from any quarter.
I do not know whether the noble Lord, Lord O'Hagan, is justified in saying that there has been a serious deterioration in race relations because of a few people who have made unseemly and inappropriate observations calculated, perhaps deliberately calculated—one cannot be sure—to exacerbate the situation. I am inclined to think that on the whole the amount of publicity they have received exceeds their importance of their lasting significance. That is my own belief. But I do not think that anyone could deprecate or deplore too strongly any observations calculated to arouse misgivings on the part of any section of the community that people were concerned to bring up a feeling of hate and resentment against them. I know of no higher crime that a man can commit against his neighbour than that he should make him feel that sections of the community living round him hate him, resent him and may wish to do him injury. If that could be instilled in the minds of the people concerned, perhaps for political motivation; if they could realise the extreme enormity of what they were doing, without perhaps having in mind that they were committing a crime of such magnitude, I am sure that that crime would be committed far less often and in far less extreme manner.
It is because that needs to be said that I have ventured to keep your Lordships here at this hour of night and after a very long and exacting debate. But having kept you here, there is one other observation I should like to make about the Press. I do not think that the Press, on the whole, has been too bad. If you review the Press as a whole you find a fairly even, a fairly responsible, a fairly just and a fairly tolerant approach to this matter. I have not seen

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the particular examples to which the noble Lord, Lord Campbell of Eskan, referred in his admirable speech. I did not see the example in the Financial Times, a paper from which I should have expected total moderation and total good sense. Nor did I see the example in the New Statesman, which I am sure ought to have been a leader in proper and sensible judgment in these matters. I have seen features in the newspapers that I have deplored and thought to be wrong, but on the whole I have not thought that the Press has done badly. What the Press does do, and what I think is often very wrong, is to call up illustrations from other countries and warn us of the dangers that exist and which we can find if we examine the history and folklore of some other place. Nearly always it is totally inappropriate, and nearly always they relate to our friends in the United States of America.
If I may venture to say so, it is great nonsense to find any parallel at all between this problem in the United States and the problems of our coloured immigrants in this country; because in the United States of America there is, unhappily, an established history of the most unfortunate and often the most prejudiced and the most difficult character. We have no such history. We are not saddled with this kind of legacy. We have not the problems of the Southern States, of lynching, of the Scotsborough cases and matters that are bound to remain in the minds of the coloured population in that country for generations. We are in the fortunate position of starting from scratch. We have none of those matters to prejudice the position, to ruffle the surface, to make it more difficult for us to build sensible and reasonable institutions in relation to people living side by side as civilised neighbours.
I think it is very wrong to call up these foreign illustrations. It is particularly wrong because nobody ever calls up illustrations from countries which have no such problems. No one ever calls attention to the fact that, for instance, apart from individual political matters, on the whole in France this problem has never been of serious significance for years, for generations, for centuries. It is always to a problem based on conditions where no parallel of any kind exists that our attention is directed and solemn warnings are uttered. It is some-
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thing that needs to be dealt with, and, on the whole, I think it is time that we pointed out that people who are celling up the customs of other countries ought to have an intimate knowledge of those countries; and they ought also to have an intimate knowledge of their own country before they make these false and invalid comparisons.
I would conclude by congratulating the noble Lord on having raised this issue. I am not sure how timely it is, I am not sure how important it is, at this moment of time to seek to find that there are real and valid problems to be dealt with. In some ways, as the noble Lord speaking from the Opposition Benches rightly said, it may be more important to seek to find that the problems do not exist. What we want to do is to emphasise not the absence of tolerance but the presence of tolerance. The fact remains that this young Lord has drawn our attention to a matter of great conscience and great importance and the House ought to be very grateful to him.
11.49 p.m.
The Earl of SELKIRK: My Lords, may I intervene very shortly before the noble Lord replies? I should like, to say how glad I am that the noble Lord, Lord O'Hagan, has raised this question. I am sorry that there is not a fuller House, because I think noble Lords would have liked to hear what was said on this important subject. I will mention only one subject quite shortly. This is a debate on race relations, and it is constantly referred to as "coloured immigration". The noble Lord, Lord Brockway, used that expression. I would never dare to go to anybody and say, "You are a coloured immigrant", and if I do not like saying that to a man's face I do not like saying it to his back. It is slightly offensive, it is slightly perhaps disparaging, it is slightly condescending. I should like to see the words "coloured immigrant" cut out of our terminology altogether.
It is suggesting, for instance, that we are not coloured. I will not refer to the colour of your Lordships' faces, but you are all different colours. It if a question of what one means by "colour". The Northern Chinese are far whiter than any of your Lordships are to-night. This expression suggests

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that we are normal and the rest of the world are abnormal. That is wholly wrong. Let us call people, if we may, by the names of which they are proud: Indian, Pakistani, West Indian, Malay, Singaporian, or whatever it may be, but do not just call them together a lump sum, which of necessity is slightly offensive. If we want a collective word, let us speak of "non-European immigrants", but do not pretend that "coloured immigrants" can possibly cover everybody. They are individuals, proud of the country they represent. I apologise for intervening before the noble Lord for a moment.
Lord RITCHIE - CALDER: My Lords, may I intervene briefly? The reason why I did not put my name down was the reason why I now feel compelled to intervene. I wanted to be here, as your Lordships have, to show what I think is a proper respect for the Question which the noble Lord, Lord O'Hagan, put down. The only thing which brings me to my feet—and I shall be brief—was not so much the provocation of my noble friend Lord Brockway as his encouragement to speak. I, like my noble friend Lord Campbell, am a member of the Community Relations Commission. I always listen to my noble friend Lord Brockway, with the profoundest respect and am usually in complete and absolute agreement with him.
I do not complain that he criticises the nature of our Report. I should think, like every intelligent Minister and every intelligent body, that the more you criticise us for not doing what we want to do the better we, on the Community Relations Commission, shall be pleased. We are a body whose ultimate success will be achievements that nobody will recognise. The chevron of our victory will be that it is never going to happen. The less we impinge on the public consciousness, except in supporting the causes we have in mind, the less we invite either praise or blame, the better—because, surely, as the noble Earl, Lord Selkirk, has just said, what we are doing is to try to forget that the people we are talking about are different kinds of people—the "we" and the "they's". Remember Kipling:
"Father and mother and me,
Sister and auntie', say—
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All good people like us are 'we'
And everyone else is 'they'.
And they live over the sea,
And we live over the way.
But would you believe it—
Would you believe it?—
They look upon 'we'
As just a kind of 'they'?"
I feel that if we merge, through the work of the Commission and not, with all due respect, through the Race Relations Board, not through envigilation but through the disappearance of differences, we shall achieve success.
11.56 p.m.
The MINISTER of STATE, HOME OFFICE (Lord StonhaM): My Lords, the world will never believe and the newspapers of this country will not take the slightest notice of the fact that at 11.56 p.m. we are debating this subject in the House of Lords and that at this time, apart from those noble Lords who had signified their intention of speaking, we have had two "chalk jockeys" in the shape of the noble Earl, Lord Selkirk, and of my noble friend Lord Ritchie-Calder. Another fact which is significant but of which again nobody will take the slightest notice—not that that worries me at all—is that we are virtually in complete and passionate agreement on this subject.
My noble friend Lord Goodman has just said that although the Press had not done badly on this subject, they were wrong to call up other countries as examples of what could happen in Britain; it was not appropriate to us. That is another way of saying that this country is unique; and though we never say so and leave it to other people to point it out, in very many ways this country is unique. I am sure that this debate will be intensely gratifying to all noble Lords—and I suppose that means everyone in this House—who believe in human decency and in justice, and I want to add my thanks to the many already expressed to the noble Lord, Lord O'Hagan, for raising this Question to-night.
As my noble friend Lord Goodman said, the attendance of so many noble Lords at this hour is an indication of our intense interest and also, I hope, of our particular pleasure that this subject was raised at this time, despite all difficulties, by one of the younger and newer Members of your Lordships' House. That is tremendously encouraging.

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The fact that so important a subject has been raised in your Lordships' House is an augury of the increasing volume and importance of the work we do and an illustration of the fact that there are occasions when, because of the great pressure of business on Parliament as a whole, your Lordships' House is the only place where matters of this kind can be urgently raised. Let us be grateful for that and grateful also for the fact that we have had this debate, which should help to dispel some of the murky myths of immigration and get over some of the facts.
The noble Lord, Lord O'Hagan, made references to the tone of public debate in this country on this subject. Unquestionably the tone of public debate on race and immigration has a significant effect on race relations in this country. Unquestionably, also, much harm results if debate is conducted irresponsibly or in extreme terms. We need rational and informed comment on this matter of legitimate public concern, and unfortunately—I dislike having to say this—some recent speeches have fallen far short of this: for example, one of Mr. Powell's in which he focused attention on the alleged unpleasant activities of a tiny minority, with the implication that this is how most coloured people behave now and will behave in the future. And there are other speakers who have argued that some members of our community are unalterably alien because their skins happen to be darker than the majority. I was pleased to have the last minute intervention of the noble Earl, Lord Selkirk, who suggested that the words "coloured immigrant" should be cut altogether, and that they should be referred to, if they so wish, by names indicating the countries from which they have come and of which they are so proud.
People who make the kind of speeches to which I have referred obviously never stop to think what it feels like for a coloured teenager, born and bred in Manchester or Birmingham—who follows the exploits of Manchester City or the Warwickshire county cricket team—to be told that he is a foreigner and that he ought to go off to Jamaica or Barbados or wherever his parents came from. As my noble friend Lord Campbell of Eskan said, it is outrageous: indeed, I would go further and say that it is obscene. It was West Indians and Indians who raced on
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to the field at Lord's to congratulate Hampshire on completing his test century. He was no less their hero because his skin was white and he had made his runs against men with coloured skins. Apparently these racialist speakers are indifferent to the humiliation which a person feels when his application for a job or a house is rejected because of the colour of his skin, or the embarrassment and resentment which arises from widespread use of derogatory expressions for negroes or other coloured people.
Unquestionably, Mr. Powell is an intelligent man, so I cannot acquit him on the grounds of ignorance. But I have to say that, in my view, he utters his distortions of considered intent. The surprising thing is that, despite this, some people still say that he is an honourable man. My Lords, I cannot. Because the tragedy is that these speeches are thus accepted as respectable comment and encourage otherwise decent people to express racialist views.
Then there are those contributions to public debate which imply that immigration to this country is getting out of hand and that our people are about to be overrun by alien coloured hordes. The truth is that the number of people entering this country for permanent set lenient is declining, and immigration to this country is under firm but humane control. In 1967, 61, 377 Commonwealth citizens were admitted for permanent settlement. In 1968 the number dropped to 53, 069. In the first four months of 1969 the total number admitted was 14, 269, compared with 17, 988 in the first four months of 1968. If admissions for the remainder of this year continue at the same rate as the first four months the 1969 total will be under 43.000.
I give these figures because they are facts, despite my firm agreement with the noble Lord, Lord Campbell of Eskane, in deploring the fact that people will confuse race with immigration, and vice versa. Nevertheless, these figures are important to the people of this country, and it is right that I should give them. I trust the noble Lord, Lord O'Hagan, will feel that these remarks of mine will show that I wholeheartedly agree with him and with other noble Lords, particularly the noble Lord, Lord Garner, that public debate on race relations and immigration has deteriorated, and that

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this can do great harm if it is not conducted in a fair and rational way. Highly emotional debate may bring major issues to the surface, but it also confuses them and makes no constructive contribution to their solution, and this applies particularly to the expression of extremist views.
It is perhaps fair to make the point that racialism has its black as well as its white spokesmen, as the noble Lord, Lord Gridley, has said. That there is ample scope for a constructive approach is shown by the quality of response to some alarmist speeches which have been made. We do know this response. It is up to us. The late Dr. Martin Luther King said that this generation will repent, not the outrageous acts of evil men, but the appalling silence of good ones. Surely, no man worthy of the name who heard his widow speak in St. Paul's can remain silent.
The noble Lord, Lord O'Hagan, suggests that there has been a deterioration of race relations in the United Kingdom. During the debate other noble Lords, for example, the noble Lord, Lord Garner, have supported this view. I reject that suggestion, which I would submit is not supported by recent independent evidence. First, we have this massive report Colour and Citizenship just issued by the Institute of Race Relations, which the Government welcome as of considerable value and consider that it is likely to make an important contribution to the understanding of race relations in this country. That report, in chapter 28, gives the findings of a survey which showed that among the people interviewed 73 per cent. (an enormous percentage; I should be delighted if the Government could be so fortunate as to get 73 per cent. of the people of this country behind them, and I could equally say this about the Opposition) were tolerant, or tolerant inclined, only 27 per cent. were prejudice inclined and 10 per cent. highly prejudiced.
If it is argued that this survey may be a little out of date, I would point out that its findings were, broadly speaking, confirmed by the nation-wide survey carried out recently by the Daily Express. I was delighted to see in that newspaper that most British people say that coloured immigrants already in this coun-
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try should be made to feel at home, with no different treatment from anybody else, and that six out of ten people accepted present immigrants and said they should be given equality of treatment.
This does not tie up with deteriorating relations, and it has been conducted all over the country—and I would add the following from Colour and Citizenship. It says:
"First, the extent of tolerance in Britain cannot be stressed too often and is indeed one of the major facts of the actual situation which has to be communicated to people whose anxieties on this score may stem in part from the mistaken view that there is not only-widespread anxiety about coloured immigration but widespread hostility towards coloured people as such. What is needed in short is not an effort to make people unprejudiced, but rather to remind them that they are unprejudiced."
As the Daily Mirror put it even more succinctly,
"Tolerance is what comes naturally to the people of Britain".
Please, my Lords, let us hang on to this. This is us. This is unique, and as this has been confirmed by two completely different inquiries do not let us forget this, and do not let us forget that we have a big job to do.
Colour and Citizenship runs to 800 pages with no fewer than 78 pages of conclusions and recommendations; therefore comprehensive comment from me, as I hope the noble Lord, Lord Sandford, will agree, must await another occasion—an occasion to which I look forward. Meanwhile, I can give your Lordships the assurance that while a number of the recommendations in the Report have inevitably been overtaken by developments since the Report was written, the remainder are receiving careful consideration by the various Departments concerned and will no doubt be the subject of further discussion in due course.
I now come to the last part, after the semi-colon, of the noble Lord, Lord O'Hagan's Question, on which the noble Lord, Lord Gridley, concentrated his remarks. I point to the very important practical measures which the Government have taken to assure all our people that they can look forward to a future in which no one will be at a disadvantage because of his or her colour. You cannot banish discrimination by Statute, but the great majority of people obey the law, and we now have a Race Relations

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Act which is as wide in scope as any national legislation anywhere in the world. Your Lordships will recall the care with which noble Lords on both sides of the House considered the details of the Bill which was before Parliament last year. Indeed, we improved it in several important respects. The Act makes discrimination on grounds of race, colour, ethnic or national origin, unlawful, in housing, employment and the provision of goods, facilities and services, and it provides machinery for the settlement of differences by conciliation, and for the ultimate sanction of the courts where conciliation fails. Above all, it sets a standard of behaviour and conduct to which I believe most people will willingly conform. Whatever the standard of debate, we have this legal framework within which we must all live. The Act has now been in force some seven months, and today's debate comes shortly after the publication of the first Report of the re-constituted Race Relations Board. I am most grateful to the noble Lord, Lord Brockway, for the tribute which he paid to Mr. Mark Bonham Carter, the Chairman of the Board. I am not so much in agreement with my noble friend on the other aspersions which he raised on the Government, and which I cannot accept.
If I may now deal with my noble friend's point, the machinery is in operation. As he challenged me to say so, I will respond to the challenge. There has in fact been an appeal. The distinguished assessors are waiting for customers, and perhaps the reason why they have no customers is because almost no dependants are being refused admission into this country, because they have entry certificates. And to stop my noble friend getting to his feet and interrupting me, let me say that the other end of the business is also being attended to. I do not feel in this matter any less than he does. When he refers to these unfortunate people waiting family by family, perhaps for a week or more, outside the High Commissioner's office, or wherever it may be, I would point out that they were doing this before ever we introduced compulsory entry certificates; and I ask my noble friend to accept that my right honourable friend the Home Secretary and I will be dealing with whatever deficiencies remain as quickly as ever we can.
Lord BROCKWAY: My Lords, I acknowledge that my noble friend is just as humanly concerned in this matter as I am. The point I put is this. How many weeks is it—five weeks, six weeks? There was a promise that voluntary organisations were to be assisted in giving help to these people. Have any of these voluntary organisations yet received this help? What has been done for these wretched people in the ports of departure who are just left without any knowledge of this procedure? Of course there have been no appeals; they do not know about it. There is no machinery for it. That is the point I was putting.
Lord STONHAM: My Lords, I must reject this again. I really cannot go on with this. I apologise to the noble Lord, Lord O'Hagan, because to some extent this is irrelevant to the Question, but I had to answer the point. The appeal system is there. In fact one applicant has used it. It is not our fault that there are no other applicants; it is a virtue on our part. My noble friend raised the question of voluntary organisations. I gave a pledge on behalf of the Government and it stands. My noble friend knows as well as I do about these various voluntary organisations and about the failure to secure unanimity of agreement with some of them. I would ask him to leave it at that and ask him to accept the good will of the Government in this matter. These problems will be solved.
I was referring to the Race Relations Board, and in their Report covering the period to March 31 last the Board stressed the value of the declaratory effect of the Act. They point out, for example, that several major firms have been prompted by the Act to take positive steps and to adopt non-discriminatory employment policies. This accords with the information that has come to us from the Department of Employment and Productivity, that a number of employers who previously denied employment to immigrants have amended their policies. After only seven months it is clearly too soon to draw firm conclusions, but the present indications are that it is having the desired effect in those important aspects of human activity in which racial prejudice could, unless checked, find expression in acts of discrimination.
Your Lordships will recall that one effect of the Race Relations Act has been

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to replace the voluntary National Committee for Commonwealth Immigrants with the new statutory body, the Community Relations Commission, of which my noble friend, Lord Campbell of Eskan is Deputy Chairman. The Commission's first Report appeared about three weeks ago and it covers the work of the National Committee for Commonwealth Immigrants for the period from January I to November 25 last year, and the work of the Commission from November 26 to March 31 this year. The Report merits close study, as it sets out in some detail the many practical measures which can be taken to bring about an understanding of the real, as opposed to the mythical, social problems with which we have to deal. The conferences, courses, lectures and projects that the Report describes, and which go on week in and week out, up and down the country, are precisely the activities which can make a positive contribution to the wellbeing of our society and stand in sharp contrast to the negative approach of certain public figures.
My Lords, the noble Lord, Lord O'Hagan, asked, in effect, whether we are taking any notice of the Community Relations Commission. He spoke about fiancees. Of course we take a great deal of notice of the Commission and listen to them. But while it is certainly the Home Secretary's intention that the Commission should have full opportunity to express their views on, and discuss, immigration policy in general, or any legislation in this field, the Government have to accept the responsibility for authorising administrative changes in conditions of entry; and as the noble Lord should be aware, timing is usually the essence, and there are obvious difficulties in the way of advance consultation about them.
Let me give your Lordships a particular example of what the Commission can do. The educational needs of immigrant children are in many respects much the same as the educational needs of other children—and this is, I think, a point worth emphasising—but some of them have additional needs which must be met before they can take their full place in our society—primarily the need to learn English. At the same time, teachers need to acquire a full appreciation of the new dimension which the presence of immigrant children has introduced into their
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work. These are problems which the Commission are energetically facing in co-operation with the Department of Education and Science and the local education authorities.
The teachers themselves are responding in a magnificent way to this challenge. One of the things which I find most impressive is the enthusiasm with which they, and others in the schools, training centres, and colleges, are meeting this challenge to their skills. They are actually doing the job, and theirs is not the story of gloom and despondency which is disseminated in some quarters. Please let us help them: do not let us talk of despondency. They are doing the job. Theirs is a story of wider interests, new horizons and knowledge, which are of benefit to themselves and to all the children for whom they are responsible. My impression is that this sort of response is in fact typical of those many professional workers who now come into contact with immigrants and their children and to my mind this is a most reassuring sign for the future.
I believe that we can be reassured by the many voluntary activities which take place at the local level. The Government fully support the concern of the Community Relations Commission with the establishment and encouragement of voluntary organisations in those areas of the country where immigrants have made their homes. By the end of March this year the number of community relations councils had risen to 78 and the number of full-time officers serving them to 42. The Commission, rightly in my view, have recognised the importance of the work of these officers, and the need to improve their professional standing and career prospects. Theirs is not an easy job. On the one hand they must command the confidence of the community as a whole; on the other they have to provide the expertise and initiative behind local efforts to improve community relations; but their work is of major importance, since it is at the local level in the field where the real problems arise in confrontations between human beings, and where, in the final analysis, they must be solved.
Now where do the Government fit into all this? When Mr. Jenkins was Home Secretary he defined integration as:
"not a flattening process of assimilation, but as equal opportunity accompanied by cultural

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diversity, in an atmosphere of mutual tolerance".
That remains our aim, and I say that we have provided the framework within which it can be achieved. Then there is the quite massive programme of grants to local authorities who employ staff to deal with the special problems of culture and language associated with immigration, which are paid under Section 11 of the Local Government Act 1966. I was perhaps a little despondent that the noble Lord did not deal with the massive effort that we are making there. This year the sum eligible for 75 per cent. grant is expected to be £4½ million for liaison officers, teachers, and all kinds of special workers. You get a lot of them for £4½ million. They are specially appointed to cope with difficulties of language and customs. I would again emphasise to your Lordships that this is an open-ended subsidy, in the sense that local authorities can spend as much as they like on staff within the range of jobs covered. I look at my noble friend Lord Goodman: would he not like an open-ended subsidy in some of his fields?
In addition, there is the urban programme of aid to areas of special social need, in many of which immigrants have settled. This year's expenditure will be a further £½ million, and I would remind your Lordships that it is based on need as recommended in Colour and Citizenship. Many thousands of nursery school places are being provided. The noble Lord, Lord Sandford, asked whether I would say how it was progressing. It is going on extremely well and it is ascending all the time. This is really providing massive help. In addition, the Government departments support and complement the work of the Board and the Commission in consultation with professional and voluntary organisations and the local authorities.
There is one other point I might deal with. The noble Lord, Lord O'Hagan, spoke about the collection of statistics and suggested that the figures were overexposed in the local Press. Well, we have to collect statistics. It is true that the Home Office circulated a memorandum to the Select Committee on Race Relations indicating Government support for the collection of statistics about immigrant groups, and of course many of the figures must come from local authorities.
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They are necessary if policy is to be developed on the basis of real facts, which is the only basis on which we can proceed. That is not to deny the need for the greatest care in using the figures in a responsible way and with full appreciation of their limitations and precise application.
The noble Lord asked about the police making inquiries about accommodation for the dependants of immigrants. I would point out that the police in fact are the only national body who can do this work. It is not possible, as the noble Lord appeared to suggest, for welfare workers to do it. Moreover, the police normally do it very well. Possibly, the difficulty is that many immigrants do not yet quite understand—I hope they will do before long—that the police in this country are unique and are there to help them.
Lord O'HAGAN: My Lords, if I may now interrupt—it is the last thing I want to do really—the noble Lord has put his finger on the point that the immigrants do not, in some instances, fully appreciate the role that the police fulfil in this country in contrast to some of the countries from which they come. It is the unfortunate association of the police force with persons who come and inspect your private rooms that is so harmful. If we want the immigrants to trust the police it is rather short-sighted to make the police fulfil this duty when it in fact undermines the growing confidence that so many of the immigrants do have in the police.
Lord STONHAM: My Lords. I cannot accept that the police are undermining this growing confidence. But this is a matter which we are carefully considering. Indeed, a few weeks ago I attended a seminar with the police on this particular subject, and we are hoping to improve their standing.
My Lords, important as all these practical steps are, perhaps the most important task for the Government is to set the right tone. At the end of their Annual Report the Race Relations Board say,
"In the field of race relations British society faces a straight choice between segregation and integration. In our situation, a segregated society would be one in which a tiny, readily identifiable minority of the population would be treated in an inferior fashion."

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I accept that analysis. We have chosen the second course, integration, in the sense which I have already defined, and I have outlined some of the steps which are already being taken to make this policy a success. That is my reassurance to all members of the community for which the noble Lord, Lord O'Hagan, has asked. The Government have made our objective clear in word and deed. There is scope for public debate about the methods by which we can achieve it; but that debate must be informed, constructive, reasoned and moderate. The Government have made racial discrimination unlawful. It is for your Lordships and other leaders of public opinion to show that it is also an obscenity. I hope this debate will have made some contribution to that end.

CITY OF LONDON (VARIOUS POWERS) BILL YORK CORPORATION BILL
Returned from the Commons, with the Amendments agreed to.
WITHAM NAVIGATION COMPANY BILL [H.L.]
Returned from the Commons, agreed to, with Amendments: the said Amendments considered, and agreed to.

STATUTE LAW (REPEALS) BILL [H.L.]
Reported from the Joint Committee on Consolidation Bills, with Amendments, and recommitted to a Committee of the Whole House.
House adjourned at twenty nine minutes before one o'clock.