Sitting of 22 April 1971

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

  ISLE OF WIGHT COUNTY COUNCIL BILL
  Order for consideration, as amended, read.
  Hon. Members: Object.
  Bill to be considered upon Tuesday next.

PETITION

  Rhymney Valley (Hospital Services)
  Mr. Fred Evans: To the Honourable the Commons of the United Kingdom of Great Britian and Northern Ireland in Parliament assembled.
  The Humble Petition of the residents of the Rhymney Valley sheweth that there is grave foreboding over the effect of proposals now before the Secretary of State for Wales for the reorganisation of hospital services in the Greater Cardiff area in so far as they will affect the Valley, for these proposals were prepared without adequate prior consultation.
  A representative committee appointed by a public meeting and consistently supported by the public has for two-and-a-half years tried, without success, to obtain an opportunity for adequate consultation upon the planning of hospital health services.
  The people are apprehensive that proposals without prior consultation will not provide adequate services for effective community care in the Rhymney Valley now and in the future, in spite of the many millions of pounds of public money which has been spent in the Cardiff area.
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  Wherefore your Petitioners pray that the present proposals should be set aside and that the Secretary of State for Wales should immediately institute a review of present facilities and plan, in consultation with all interested organisations, including particularly local health authorities, general medical practitioners and other local informed medical opinion, for the development and expansion of Caerphilly District Miners' Hospital to meet the needs of this rapidly growing area.
  And your Petitioners, as in duty bound, will every pray.
  To lie upon the Table.

ORAL ANSWERS TO QUESTIONS
  HOME DEPARTMENT

    Drug Addiction (Portsmouth)
    Mr. Juddasked the Secretary of State for the Home Department what reports he has received of increasing drug addiction in Portsmouth; how these reports compare with reports from other major urban areas; and what consultations he has had with the appropriate authorities concerning improved preventive measures.
    The Minister of State, Home Office (Mr. Richard Sharples): The Chief Constable of Hampshire's information is that in 1970 dependence on narcotic drugs such as heroin remained reasonably static, but that there was a marked increase in the use of LSD. This is much in line with reports from elsewhere. Home Office inspectors keep in touch with the police Drug Squad, and the local drug dependency centre.
    Mr. Judd: I thank the hon. Gentleman for that reply. Does not he agree that, while excellent work is being done in rehabilitation in the Portsmouth area and similar urban centres, this is still a serious problem, particularly as it affects the young; that there is need for far greater emphasis on preventive measures, including public education; and that resources on the necessary scale are likely to be provided only on a national level?
    Mr. Sharples: Yes, Sir. The Misuse of Drugs Bill will make a contribution.

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    Emphasis particularly on the educative rôle of the Advisory Council is most important.

    Probation Service
    Mrs. Renée Shortasked the Secretary of State for the Home Department what proposals he has for the recruitment and training of the additional probation officers announced recently.
    Mr. Wilkinsonasked the Secretary of State for the Home Department whether he will announce special measures to improve the recruitment and retention of personnel for the probation and after-care services.
    The Under-Secretary of State for the Home Department (Mr. Mark Carlisle): New one-year probation training courses for mature students at the polytechnics of Birmingham, Manchester and Newcastle-upon-Tyne have been advertised to start this autumn. These courses, together with additional places on existing courses, should provide over half of the proposed 200 new training places. Plans will be made for further places to be available in 1972.
    Mrs. Short: I am obliged to the hon. and learned Gentleman. I am delighted to hear that there is to be an expansion of training facilities for probation officers, who are in very short supply. Is the hon. and learned Gentleman aware that to continue with a situation in which child care officers can get very much more—perhaps £300 or £400 a year—than probation officers is leading to a crisis in the probation service, and that many probation officers are leaving? Does not he think that he should look at this aspect urgently?
    Mr. Carlisle: I assure the hon. Lady that I am fully aware of all the relevant considerations. There are several other Questions on the Order Paper, including one from her, relating specifically to this issue.
    Mr. Wilkinson: Can my hon. and learned Friend assure us that the pay negotiations now in train will be expedited, since not only is the starting salary of fully qualified after-care and probation officers about £400 less than for their counterparts in the social security departments of local authorities, but also, fur-
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    ther up the scale, there is every inducement for trained personnel to make a transfer?
    Mr. Carlisle: As I said, there are Questions later about this. My right hon. Friend the Home Secreary is well aware of the urgency.
    Mr. Chapman: Does my hon. and learned Friend—whom we all congratulate on his recent legal promotion—agree that, as well as being the lowest-paid people doing social work, they are also doing some of the most important and most diverse work, not only in the criminal courts but in the divorce and county courts? In view of this, and in view of the terrible shortage in the West Midlands about which I know from personal knowledge, it is a matter of urgency that they should be granted a pay scale beginning at £1,380 per annum.
    Mr. Carlisle: I assure my hon. Friend that I am fully aware of the important part which probation officers play in the penal system, and it is being taken into account.
    Mr. Peter Archerasked the Secretary of State for the Home Department how many recruits have joined the Probation Service in the last period of 12 months for which figures are available; and how many of them are graduates.
    Mr. Carlisle: 430 persons were appointed as established officers in 1970. 133 held a university qualification, which includes, as well as a degree, a certificate or diploma in social studies awarded by a university.
    Mr. Archer: Will the hon. and learned Gentleman forgive me if I add a further voice to the lobby pressing him? Without in the least underating the contribution made by non-graduate probation officers, including those holding diplomas, would it not be a tragedy if graduates were attracted away from the probation service by better salary and career structures elsewhere?
    Mr. Carlisle: I entirely agree with the hon. and learned Gentleman that there is a need for professionally trained graduates to join the probation service, and they will always be welcome.
    Mr. Fowler: Does my hon. and learned Friend agree that the point about this

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    Question and Question No. 2 is that over a long period the probation service has not been given sufficient resources and that there is now substantial justification for treating it as a special case in view of the pressure on prison accommodation and the need to develop alternatives to prison sentences?
    Mr. Carlisle: I take account of what my hon. Friend said. There are several more specific Questions on this subject later on the Order Paper.
    Mr. David Stoddartasked the Secretary of State for the Home Department if he will ensure that, following the interim review of the pay of probation officers, salaries are offered that will attract suitable people to the Probation Service and offer an incentive to existing officers to remain in the service.
    Mrs. Renée Shortasked the Secretary of State for the Home Department what progress has been made in negotiations on the probation officers' pay claim.
    Mr. Carlisle: The Joint Negotiating Committee for the Probation Service is at present awaiting an indication of the Government's attitude. My right hon. Friend fully recognises the importance of bringing these negotiations to an early and satisfactory conclusion.
    Mr. Stoddart: Will the Minister give that indication of his attitude as soon as possible? As has been shown by the many questions on the subject this afternoon, there is a great deal of concern about the loss of officers from the service because of low pay and the bad career structure.
    Mr. Carlisle: I fully appreciate the expressions of concern from both sides of the House. All I can say is that the Home Secretary hopes to be in a position to give that indication in the near future.
    Mrs. Renée Short: Was not the interim pay award promised by the Labour Government to be operative from last January?
    Mr. Carlisle indicated dissent.
    Mrs. Short: I stand corrected. Does not the hon. and learned Gentleman think that take-home pay of £16 a week for a qualified young probation officer offers no incentive to him to stay in the service
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    and no incentive for new officers to enter the service?
    Mr. Carlisle: In regard to the factual situation, I would point out that the agreement was entered into in April, 1970. It was an agreement which was due to last for 21 months until December, 1971, but it contained a "break" clause which provided for negotiation from January, 1971, to consider whether there was a justification for an interim pay award to take effect from April this year. If any pay award is made as a result of these negotiations, the Home Secretary would have power to backdate it to 1st April. In regard to the second part of the hon. Lady's comments, I fully appreciate the great value of the part played by the probation service and the importance of having adequately trained members of the probation service.
    Mr. Hiley: If the main problem is shortage of money, as I expect it is, would the Under-Secretary consider averaging the remuneration of probation officers with that of other local government officers because people in the probation service are better equipped to do the job than are those in other sections of local government service?
    Mr. Carlisle: My hon. Friend's suggestion may be attractive but has its difficulties. Pay in the probation service is a matter for the Home Secretary, whereas the Government have no say about the pay in respect of other social workers who are paid by the local authorities.
    Mr. Hooson: Since concern is felt on this matter in many sections of the community, does it matter whether the matter of pay is dealt with by the government or by the local authority? In view of the increased demands upon the probation service and the tremendous pressures to which it is subjected, it is surely unrealistic to expect a good probation service at the present level of remuneration.
    Mr. Carlisle: As the hon. and learned Gentleman knows, we have already announced increased figures in respect of the probation service, but my point in answer to my hon. Friend the Member for Pudsey (Mr. Hiley) was a valid one: it is difficult to merge two amounts of money when they come from two separate

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    sources. The amounts paid by local authorities to the social services is one matter which is being presented to the Home Office in relation to the present negotiations.
    Mr. Deedes: Would the Under-Secretary of State also consider, apart from the merits of the claim, the important considerations which bear upon this matter, not least the rival attraction of other social services and the increased load which we may wish to place on the probation service, not least in the realm of parole?
    Mr. Carlisle: I can assure my right hon. Friend that through the representations which have been made and as a result of the meetings of the Home Secretary with the National Association of Probation Officers, the Home Secretary is fully aware of the strength of feeling on the first point and of the need for the second.
    Mr. Elysian Morgan: Would not the Under-Secretary accept as a matter of principle that a pay range of between £970 and £2,000 per annum is wholly unrealistic for the tasks which are now to be carried out by the probation service, certainly bearing in mind the extended tasks in the realm of non-custodial sentences which may very soon be placed on that service?
    Mr. Carlisle: The hon. Gentleman realises that it would be improper of me to make any comment about existing pay scales at a time when negotiations are proceeding, other than to remind the House that they were the scales which were negotiated in January, 1970, and at that time represented a 15·6 per cent. increase on the previous existing scale.
    Mr. Barnesasked the Secretary of State for the Home Department if he will take steps to grant basic grade officers in the Probation Service comparability with local authority social service Departments.
    Mr. Edward Lyonsasked the Secretary of State for the Home Department what steps he is taking to halt the drain of personnel from the Probation Service to local social service departments.
    Mr. Carlisle: The salaries of local authority social workers are a factor
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    which is being borne in mind in the current review of probation pay.
    Mr. Barnes: Would the Under-Secretary not agree that during the last six months competition from local authority social work departments and also a sharp increase in the cost of living, particularly in the London area, has brought about a situation in London in which the service, far from being able to extend its operations, cannot even fill existing vacancies? Does he not think that he should put the salary scales on a par with local authority social work departments so as to get the necessary recruits?
    Mr. Carlisle: I am not sure that the question of the rise in the cost of living is directly relevant to this Question, but in regard to the hon. Member's other point I agree that it is within the last six months that this substantial alteration in differential between local authority social workers and probation officers has occurred. As I said in answer to an earlier Question, the Home Office is aware that 78 probation officers left to join local authority social services during 1970 and we are being continually pressed on this matter by the National Association of Probation Officers. However, I can go no further than to say that the Home Secretary is aware of these matters and is considering them.
    Mr. Spearingasked the Secretary of State for the Home Department what representations on matters for which he is responsible he has received from the Middlesex Area Probation and After-Care Service; what reply he has sent; and whether he will make a statement about comparability of pay scales of probation officers with officers in local authority social work departments.
    Mr. Carlisle: The Home Office has received a number of such representations about probation salaries. Replies have said that these will be noted. The salaries of local authority social workers are being borne in mind in the current review of probation pay.
    Mr. Spearing: Is the hon. and learned Gentleman aware that until the announcement of the pay award comes through, many probation officers in the meantime will be working under a great

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    deal of personal sacrifice because they are waiting before applying for other work in social work departments? Since he said that last year there were 78 transfers, could he say how many transfers there have been this year?
    Mr. Carlisle: Although I am aware of the whole position, I do not feel that anybody would wish to exaggerate it. I am afraid that I cannot without notice give the figures for this year, but I have reason to believe that they are running roughly at the same level as they were during 1970. However, I would have to check whether I am correct.
    Mr. Marksasked the Secretary of State for the Home Department if he will introduce legislation to transfer the Probation Service to the social services departments of local authorities.
    Mr. Carlisle: No, Sir.
    Mr. Marks: Is the hon. and learned Gentleman aware that the probation officers are becoming increasingly isolated from other social workers both in their professional organisation and in their pay and conditions? Will he have discussions about this with all concerned? The Seebohm Committee was precluded from reviewing the probation service. Will the Minister reconsider this question?
    Mr. Carlisle: I am perfectly prepared at any stage to have discussions with anyone on this matter. The position of the probation service is somewhat different from that of other social services because of its close relationship with the courts and its link with the prison system. For that reason it has always remained a separate service and not a local authority service.
    Mr. Adam Butler: Will my hon. and learned Friend take note that, whatever his intentions, if the present trend continues in the county of Leicestershire there will be a transfer? Is the Minister aware that in Leicester, in 1970, of the 17 field officers operating outside prisons four left the service, three of whom went to local authorities? Is this not a compelling argument for considering as generously as possible in the present economic circumstances the salaries and promotion prospects of these men?
    Mr. Carlisle: I am fully aware and take note of everything my hon. Friend says. In 1970, in the country as a whole 78 probation officers left to enter local authority social service. As I said in reply to an earlier Question, this is obviously a matter of importance to the Home Office in the present negotiations.

    Drugs (Official Conference)
    Mr. Dalyellasked the Secretary of State for the Home Department if he will make a statement on his official conference on drugs at Moreton-in-Marsh.
    Mr. Sharples: The event last month to which the hon. Member refers was a seminar organised by the Home Office for heads of police drugs squads to study general aspects of the drug problem.
    Mr. Dalyell: What did the Department learn from the seminar about the early identification of drug taking among young people?
    Mr. Sharples: It was not the purpose of the seminar, part of which I attended myself, to do that. The seminar was concerned with prevention, the importation of drugs and drug trafficking. It was mainly a seminar for drugs officers in police forces.

    Civil Defence
    Mrs. Knightasked the Secretary of State for the Home Department what are his intentions with regard to the future rôle and organisation of civil defence; and if he will make a statement.
    Mr. Sharples: The Government's examination of Home Defence arrangements is still in progress and it is hoped that a statement will be ready before the Summer Recess.
    Mrs. Knight: Will my hon. Friend bear in mind that the civil defence people carry out a wide-ranging group of functions and that they are valuable voluntary workers who feel concerned about what the future of the service is to be? Will my hon. Friend expedite the report as quickly as he can?
    Mr. Sharples: I appreciate the concern of the voluntary workers who have taken part in civil defence activities, but it is right that there should be a full and comprehensive review of the whole of the

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    civil defence arrangements, which is what we are embarked upon, to ensure that we achieve not only effectiveness but cost-effectiveness.
    Mr. Hugh Jenkins: Is it being taken into account in the review that it is generally accepted that there is no such thing as civil defence against nuclear war and that the services of these very good people might be better used in creating a national emergency service for general civil disturbances and emergencies of various sorts?
    Mr. Sharples: We are carrying out a very broad review in order to cover the whole question, including the kind of question which the hon. Gentleman raised.
    Mr. Longden: If, while the review is going on, a citizen wants to know, as one of my constituents does, what he or she should do in the event of a surprise nuclear attack, to whom does he or she turn for information?
    Mr. Sharples: I think that in the short term she had better ask my hon. Friend.

    Northern Ireland
    Mr. St. John-Stevasasked the Secretary of State for the Home Department whether he will make a statement of policy concerning Northern Ireland.
    Mr. Roseasked the Secretary of State for the Home Department whether he will make a further statement on the current situation in Northern Ireland, so far as Her Majesty's Government is responsible.
    Mr. Sharples: I have nothing to add to the statement made by my right hon. Friend the Prime Minister on 22nd March and to what my right hon. Friend the Home Secretary said in the debate on 6th April.
    Mr. St. John-Stevas: In view of the alarming rumours circulating about plots to kidnap members of the Armed Services and hold them to ransom, can my hon. Friend assure the House that precautions are being take to protect them and public officials in Northern Ireland?
    Mr. Sharples: I can assure my hon. Friend that the necessary precautions are
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    being taken to deal with any threat about which we know.
    Mr. Rose: Will the hon. Gentleman make a statement on the efficacy of attempts to find unlicensed arms? Will he also take into consideration the more than 70,000 licensed arms in Northern Ireland and the more than 80 rifle clubs, many of which have been joined by former members of the B Specials and are connected with U.V.F.? Will he look into this matter, which is an equal cause of concern as extremists on the other side?
    Mr. Sharples: The Northern Ireland Government have initiated a check with all holders of firearms under certificate in Northern Ireland to see whether it is necessary for them to possess the weapons. The R.U.C. is undertaking these checks.
    Mr. Lane: Does my hon. Friend agree that there is very wide public support and admiration for the policy of firmness coupled with restraint under which the Army is carrying out its disagreeable task?
    Mr. Sharples: I am grateful to my hon. Friend and entirely agree with what he said.
    Mr. Dell: Can the hon. Member say whether the policy embodied in the Industrial Development Bill introduced at Stormont yesterday, which enables the Stormont Government to take equity holding in private industry, has the approval of Her Majesty's Government and whether Stormont will be recommending Her Majesty's Government to do the same thing in development areas in this country?
    Mr. Sharples: All that the Stormont Government do in these matters is for the Stormont Government. They have responsibility for the action they take.
    Mr. Kilfedder: Will my hon. Friend persuade the Prime Minister to visit Northern Ireland next month, because the Ulster Festival '71 will open next month and its success will help to restore the economy of Northern Ireland to normal and perhaps will help to reduce tension.
    Mr. Sharples: I understand that a later Question on this matter is addressed to my right hon. Friend the Prime

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    Minister. If my hon. Friend catches your eye, Mr. Speaker, it will be possible for him to raise that point then.
    Mr. Kaufman: Can the hon. Gentleman say what progress has been made in tracking down the murderers of the three young soldiers, as the Catholic community, in particular, in Northern Ireland is anxious that the perpetrators of this filthy crime should be discovered?
    Mr. Sharples: I cannot report on the progress being made. The hon. Gentleman will understand that this is a matter for the police. However, the whole House shares his sentiments.

    Mr. Abbie Hoffman
    Mr. Fellasked the Secretary of State for the Home Department what were the circumstances under which Mr. Abbie Hoffman was allowed into Great Britain.
    Mr. Sharples: Mr. Hoffman was inadvertently admitted as a visitor on 21st March. He left for the United States three days later.
    Mr. Fell: I am delighted that it was inadvertance. But is not the situation rather serious? Surely the Yippies are well known to the Home Office. They have stated, "We are going to make them"—that is, Britain—"regret letting us in". That was over a year ago. They further stated that—[HON. MEMBERS: "Reading".] It is best to get things right, is it not? They further stated that they supported the National Liberation Front in Vietnam, the Black Panther movement and the Irish Republican Army. Perhaps they were lucky to get in, but what does the Minister propose to do to prevent the inadvertent letting in of undesirable people of this type?
    Mr. Sharples: Considering the very large number of people passing through London Airport, the immigration officers do an extremely good job. A mistake was made in this case, and steps are being taken to ensure that it does not recur.
    Mr. Merlyn Rees: Who is Mr. Hoffman?
    Mr. Sharples: I have a long description of Mr. Hoffman. Perhaps I had
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    better write to the hon. Gentleman setting out the full description.

    Animal Welfare (Littlewood Committee)
    Miss Fookesasked the Secretary of State for the Home Department if he will take steps to implement the recommendations made in the Report of the Littlewood Committee on the welfare of animals, in particular by strengthening his Department's advisory committee on animal welfare.
    Mr. Carlisle: I am not yet in a position to add anything to the reply which I gave on 18th November to a Question by the hon. Member for Glasgow, Govan (Mr. Rankin).—[Vol. 806, c. 442.]
    Miss Fookes: May I ask what that reply was, as I do not have it to hand?
    Mr. Carlisle: My hon. Friend may ask, but, in the words of F. E. Smith, although it may make her wiser, I am not sure that it will make her any the better informed. The words were:
    "I am not at present in a position to make a statement."

    Parole
    Mr. Hardyasked the Secretary of State for the Home Department if he will state the number and proportion of those granted parole who were released from prison within six weeks of completing the minimum period of their imprisonment.
    Mr. Carlisle: Out of 2,171 cases which have been analysed, the answer is 1,133, or 52·2 per cent.
    Mr. Hardy: I thank the Minister for that reply and for the release on parole today of a constituent about whom I wrote to him. Will the Minister consider reducing the time which must elapse before parole is allowed, and so make a contribution to the problem of overcrowding in our prisons?
    Mr. Carlisle: As the hon. Gentleman knows, anyone who has served either one-third of his sentence or 12 months is eligible for parole. The matter of extending parole is being considered in the Home Office, and we have recently set up two new parole panels in Manchester and Birmingham. I cannot say anything further at this stage.

    Telephone Calls (Tapping)
    Mr. Leslie Huckfieldasked the Secretary of State for the Home Department who is responsible for the authorisation of the tapping of telephone calls; and to whom this authorisation is given.
    Mr. Carlisle: The practice follows the recommendations made in 1957 in the Report of the Committee of Privy Councillors appointed to inquire into the interception of communications.
    Mr. Huckfield: That is an interesting though not very informative reply. Will the hon. and learned Gentleman tell me how many telephone tappings were authorised last year, and whether the practice of tapping the telephone lines of hon. Members of this House has been resumed?
    Mr. Carlisle: The answer to the first part of the supplementary question is, "No, Sir, I cannot." Birkett recommended that it would be wrong for figures to be disclosed by the Secretary of State. The answer to the second part of the question is that there has been no change in practice from that announced by the previous Prime Minister on 17th November, 1966.
    Mr. St. John-Stevas: May I ask how the liberties of the subject are to be protected in this matter? When I addressed a letter to the Home Office about the fears of a distinguished Weymouth Street doctor that his telephone was being tapped, I was told that I could be given no information of any kind whatsoever.
    Mr. Carlisle: I am aware of the letter which my hon. Friend wrote to me and of my reply. I must stand by what I said, that it has been the agreed policy of previous Governments for many years, and of the present Government, that no answers of a factual nature can be given in these matters.
    Sir Elwyn Jones: Was not the Birkett Committee satisfied that this power was being exercised responsibly and carefully? Is there any reason to think that there has been any diminution in the care taken since the Birkett Committee reported?
    Mr. Carlisle: I am grateful to the right hon. and learned Gentleman for what he said. I entirely agree with what the Birkett Committee recommended,
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    and I can assure the House, as I said in my answer, that the practice recommended by that Committee has been effectively carried out since.

    Fire Services
    Mr. Tilneyasked the Secretary of State for the Home Department what are his plans for the expansion of fire services staff for the ensuring year, when the Fire Precautions Bill is enacted.
    Mr. Sharples: Provision has been made for an eventual addition of about 400 to the staff of fire authorities for the purposes of the Fire Precautions Bill, but precise requirements from time to time will be decided by the individual authorities.
    Mr. Tilney: What consultation has my hon. Friend had with the fire brigades and the Chief Fire Officers Association on methods of recruitment and training?
    Mr. Sharples: Discussions have taken place about this, but the implementation of the increases will be a matter for the individual fire authorities and will depend upon the rate at which the various stages of the Fire Precautions Bill are brought into operation.
    Mr. Merlyn Rees: When will the recruitment of the extra staff in the Home Office begin?
    Mr. Sharples: Very few extra staff will be required in the Home Office, and I do not think that any particular problem arises there.

    Magistrates' Courts (Applications for Bail)
    Mr. Clinton Davisasked the Secretary of State for the Home Department if he will introduce legislation to ensure that an accused person appearing at a magistrates' court is asked whether or not he wishes to apply for bail.
    Mr.Carlisle: No, Sir. This is not a matter on which a mandatory provision would be appropriate.
    Mr. Clinton Davis: Is the hon. and learned Member aware of the disquieting information disclosed by Mr. Michael Zander in the last edition of the "Criminal Law Review" that in about 50 per cent. of the 513 cases which he investigated, the question of bail was

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    not first raised by the court? Is he further aware that there is a danger that an accused person who is not aware of his entitlement to make an application could well find that what might be a successful application could not be entertained?
    Mr. Carlisle: I am aware of the article which Mr. Michael Zander has written in the "Criminal Law Review", and the Home Office is considering the matter generally. I do not think that a mandatory provision requiring magistrates to ask every person whether he required bail, even if they have already decided that in no circumstances would it be granted, is the appropriate method for dealing with this problem.
    Mr. Elystan Morgan: Does not the overriding presumption of an accused person's innocence up to the time he is found guilty demand such a mandatory provision as the Minister rejects?
    Mr. Carlisle: With respect, I do not think it does. Mr. Michael Zander in his article pointed out that there were cases in which bail is "not a realistic possibility". It would seem absurd in those cases to make a mandatory requirement on courts to invite the person to apply for bail when they clearly were not able to give it.

    West Yorkshire Constabulary
    Mr. Edwin Wainwrightasked the Secretary of State for the Home Department if he will call for a report from the Chief Constable of the West Yorkshire Constabulary, giving the number

    Year

    Recruitment excluding transfers

    Wastage (including normal loss e.g. through retirement, but excluding transfers)

    Wastage*of officers with less than 10 years' service

    Wastage* of officers with 10 to 20 years' service

    Authorised establishment at 31st December

    Strength at 31st December

    Deficiency

    1966

    280

    196

    —

    —

    4,602

    3,439

    1,163

    1967

    342

    169

    —

    —

    4,663

    3,578

    1,085

    1968

    205

    244

    47

    12

    4,663

    3,527

    1,136

    (from 1st October)

    (from 1st October)

    1969

    265

    236

    149

    24

    4,663

    3,532

    1,131

    1970

    296

    167

    111

    12

    4,663

    3,648

    1,015

    1971

    76

    41

    22

    7

    4,663

    3,680

    983

    (1st January to 31st March)

    (31st March)

    (31st March)

    * Information is not available for the period prior to amalgamation on 1st October, 1968.

    of policemen who have left the police force during each of the past five years, the respective numbers who had served less than 10 years, and from 10 to 20 years, the numbers recruited each year and the present shortfall.
    Mr. Sharples: As the answer contains a number of figures, I will, with permission, circulate it in the OFFICIAL REPORT.
    Mr. Wainwright: Would the hon. Gentleman agree that the figures he has given prove that for too long we have been short of manpower in our police force, especially in the area covered by the West Yorkshire Constabulary? If the recent increase does not stop this wastage in the police force, will he guarantee that there will be a review within six months to try to make certain that new measures are taken in respect of salaries to improve recruitment? What is he doing about staff appraisal and other service conditions in the police force to try to make the service more attractive?
    Mr. Sharples: The matters referred to in the latter part of the hon. Gentleman's supplementary are matters for the Police Council and for negotiation in that council through the normal channels. I recognise that there is a problem in the West Yorkshire police force but I am glad to say that the rate of wastage has been going down and that, as compared with a net wastage of 39 in 1968, there was in 1970 an overall increase in the strength of the force of 129.
    Following is the information:

    London Airport (Taxi Service)
    Dr. Glynasked the Secretary of State for the Home Department whether, in view of the unsatisfactory arrangements for travellers arriving at London Airport seeking taxi services, he will take steps to ensure that the existing six-mile limit is altered to anywhere in the greater London area.
    Mr. Sharples: The Committee on the London Taxicab Trade has recommended that taxi drivers should be compelled to accept all hirings from London Airport to certain specified postal districts in central London. This and other approaches to the problem are being considered in the consultations following upon the Committee's report.
    Dr. Glyn: I thank my hon. Friend for that helpful answer. Is he aware that the first impression received by visitors when they arrive at London Airport is a most unfortunate one and that many taxi drivers would welcome some action since the situation has given taxi drivers a very bad name? Is he also aware that a change in the law may require special byelaws by the airport authority to enable any steps to be effective because these taxi ranks are on private property?
    Mr. Sharples: Yes, Sir, I am aware of the problem to which my hon. Friend refers, and I hope that we shall be able to proceed with the recommendation in the Stamp Report.

    Communications Media (Political Bias)
    Mr. Hugh Jenkinsasked the Secretary of State for the Home Department whether he will recommend the appointment of a Royal Commission to inquire into the question of political bias in the comunications media.
    Mr. Carlisle: No, Sir.
    Mr. Jenkins: Is the Under-Secretary not aware that a number of his hon. Friends take the view that as television and radio media have not as firm a pro-Tory bias as the majority of the Press, this means that they are not independent? Will he look into this matter again and try to ensure that the Labour Party has
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    one-quarter of the amount of bias which is apparent in all the media?
    Mr. Carlisle: No, Sir, I will not look at that answer again. I do not see any need for a Royal Commission, and the question of impartiality is one for the B.B.C. and I.T.A. As for the hon. Gentleman's comment about newspapers and pro-Tory bias, I would remind him that it is free for anyone with political views to publish a newspaper at any stage, provided that he feels that he can sell enough copies to make it viable.
    Mr. Fowler: Does the Under-Secretary not agree that the case would be completely met if a broadcasting council were set up to which complaints could be referred?
    Mr. Carlisle: By statutory force so far as Independent Television is concerned and by administrative arrangement so far as the B.B.C. is concerned this has always been a matter for the governors of those two bodies, to whom any member of the public is entitled to refer a complaint.

    Mr. Menachem Beigin
    Mr. Mayhewasked the Secretary of State for the Home Department if he is aware that Mr. Menachem Beigin, leader of the opposition in the Israeli Knesset was responsible for the massacre of Deir Yasin; and whether it is his policy to grant visas to those who have perpetrated war crimes and gone unpunished, such as the aforementioned person.
    Mr. Sharples: As a citizen of Israel, Mr. Beigin would not need a United Kingdom visa. His admission would fall to be considered in accordance with the published immigration rules (Cmnd. 4296), and on present information I have no reason to suppose that refusal of leave to land would be justified.
    Mr. Mayhew: Will the hon. Gentleman bear in mind that the facts of this extraordinary case are not disputed and that very strong and understandable feelings are held about it by the Arabs who have been the victims of this appalling massacre of Deir Yasin? Will the hon. Gentleman take into account those feelings in reaching his decision?
    Mr. Sharples: I have seen the report by Mr. Louis Heren and the reply by Mr. Beigin in The Times of 14th April. It

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    is relevant that Mr. Beigin is a member of the Legislature of a country with which the present Government, as did previous Governments, maintain friendly relations. This case has been carefully considered, and all the information that I have shows that there is no reason to withhold permission to land.
    Mr. Hafer: Is the hon. Gentleman aware that this episode took place in 1948, that it was condemned overwhelmingly by the majority of Israeli people, and that the Israelis have never been happy or satisfied with the episode? Is he further aware that, if we were to stop all people who at one time or another were responsible for atrocities, obviously we should bar about every leading politician in the world?
    Mr. Sharples: Without agreeing with the hon. Gentleman, there are probably two sides to this matter.
    Mr. Kaufman: While no one of decent sensibilities would have other than contempt and loathing for Mr. Beigin and his record, would not it be as well to allow him here so that he might learn a little democracy, just as members of the El Fatah terrorist organisation who are shortly to come here may also learn a little democracy in this country?
    Mr. Sharples: As I said, we see no justification for refusing Mr. Beigin permission to land in this country.

    Metropolitan Police (Informers)
    Mr. Hoosonasked the Secretary of State for the Home Department whether medical certificates are called for by the Metropolitan Police when persons with a history of serious psychiatric illness are employed by them in any capacity, including that of an informer.
    Mr. Sharples: Medical reports are required on people who wish to join the police force or seek permanent employment on the civil staff. The police are well aware of the need to assess and as far as possible, to verify material supplied by an informant, whatever his history.
    Mr. Hooson: The hon. Gentleman must be aware of the very disturbing report in a national newspaper that ex-Sergeant Challenor, who has retired from the police force on psychiatric grounds, has been employed and paid as an
    1354
    informer by the West End Central police authorities. Is this story true? It has been repeated in other magazines. If it is, is not it a grave cause for disquiet, in view of that man's record?
    Mr. Sharples: I understand that the Commissioner of Police has informed the editor of the paper concerned in these terms:
    "There is no record of Challenor having been paid any reward from Metropolitan Police Funds for information supplied since he left the police service."
    I understand that there may be legal proceedings arising out of the article. In view of that, it would be improper for me to make any further comment.
    Mr. Clinton Davis: Can the hon. Gentleman assure us that in no circum stances will ex-Detective-Sergeant Challenor be employed in any capacity, whether as an informer or in any other capacity, by any police force in the country, especially having regard to the fact that he led other young officers into a situation as a result of which they were convicted and imprisoned?
    Mr. Sharples: As I said, I understand that there may be legal proceedings arising out of this matter. It would be improper for me to make any further comment.

    Vandalism (Financial Restitution)
    Mr. Longdenasked the Secretary of State for the Home Department if he will list the existing powers magistrates' courts have to exact financial restitution from persons convicted of vandalism.
    Mr. Carlisle: The main powers are given by provisions in the Malicious Damage Act, 1861; Section 14(1) of the Criminal Justice Administration Act, 1914 (as amended); and Section 34 of the Magistrates' Courts Act, 1952 (as amended).
    Mr. Longden: While thanking my hon. and learned Friend for that answer, is not the target for all these young hooligans their pockets, in view of the fact that it is no longer considered civilised to visit their sins on their backsides?
    Mr. Carlisle: I have a good deal of sympathy with what my hon. Friend says. The Criminal Damage Bill going through the House at the moment provides for the

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    payment of compensation in magistrates' courts to a maximum of £400 by those guilty of offences of criminal damage.

    Magistrates' Courts (Rights of Appeal)
    Sir Elwyn Jonesasked the Secretary of State for the Home Department what steps are taken in magistrates' courts to ensure that defendants are informed as to their rights of appeal.
    Mr. Carlisle: The clerk of the court will advise defendants of their rights of appeal on request; and where they are represented, their legal advisers will do this.
    Sir Elwyn Jones: Should not there be a duty laid on courts to inform those convicted of their right of appeal? Will not the Under-Secretary take steps to see that the practice is improved?
    Mr. Carlisle: I am quite prepared to look at the practice. But I think that the right hon. and learned Gentleman will not feel, on reflection, that this is an appropriate matter for statutory provisions, especially when one thinks of the number of cases dealt with every day in magistrates' courts where pleas of guilty are even made by letter.

    Community Development Project
    Mr. Juddasked the Secretary of State for the Home Department whether he will now make a statement on the Government's plans for an extended programme by its Community Development teams.
    Mr. Sharples: The number of local authorities taking part in the Government-sponsored Community Development Project has now increased to seven—including one in Scotland and one in Wales. Three more local authorities have been invited to participate. It is hoped later this year to invite two further authorities, making twelve in all.
    Mr. Judd: I thank the hon. Gentleman for that reply, but would he not agree that, as that scheme was in the nature of an experiment, it would help to have a full report assessing the success of the scheme to date, at the same time as the Government make more detailed proposals about those towns in which they intend to introduce new schemes?
    Mr. Sharples: The hon. Gentleman is right: this was an experimental scheme. I will consider his point.
    Mr. Freeson: Without intending to be flippant, may I ask the hon. Gentleman to consider, in consultation with the Secretary of State for the Environment, a possible transfer of the general oversight of this programme to that Department, so that it can be more closely linked with general planning procedures and housing procedures in general improvement areas? Would he also consider more closely linking it to the urban aid programme, which is also to be similarly transferred?
    Mr. Sharples: The hon. Gentleman's question raises much wider issues, which are, of course, for my right hon. Friend the Prime Minister.

  UNEMPLOYMENT
  Mr. Barnettasked the Prime Minister what replies he sends to letters he receives on the subject of unemployment.
  Mr. Carterasked the Prime Minister how many letters he has received and replied to on the subjects of employment and job opportunities since 1st January.
  The Prime Minister (Mr. Edward Heath): About 50, Sir. The great majority of these letters relate to individual cases of unemployment, which are then followed up by the Department of Employment.
  Mr. Barnett: One would have hoped that the Prime Minister could give some consolation to the letter writers. If the right hon. Gentleman is not prepared to accept the forecast made by very serious commentators that the number of unemployed could rise to at least a million, will he assure the House that he will act long before it reaches that alarming level? If he does not, we shall conclude that he is not even prepared to act to prevent it reaching that kind of level.
  The Prime Minister: Taking the first part of the hon. Gentleman's question, a number of these correspondents apparently do not know the right method of obtaining assistance in employment, and therefore it is right for me to pass their letters to the Department of Employment,

  1357
  which will do everything possible to help them.
  As for the second part of the hon. Gentleman's question, my right hon. Friend the Chancellor of the Exchequer made it plain in his Budget speech and the wind-up speech that he has made his initial Budget judgment and that, if he wishes to take further action, the means are open to him.
  Mr. Carter: Is the Prime Minister aware that the Chancellor of the Exchequer yesterday once again stated the Government's view that cost inflation is the cause of unemployment—the view that the Prime Minister himself was not able to provide evidence to support in this House last Tuesday? Will the right hon. Gentleman now admit that it is the declared policy of the Government to use unemployment as their principal instrument of economic policy, with all the hardship that that entails?
  The Prime Minister: The hon. Gentleman is talking absolute nonsense, as usual, and he knows it. If he were more closely in touch with industry, whether it be on the trade union or on the management side, he would know of the many examples of firms which, because of wage increases, are attempting to keep down unit costs, and that the only way to do that is to stand off labour.
  Mr. St. John-Stevas: With regard to unemployment, are not the guilty men the Leader of the Opposition and his heir apparent, the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins), who, as we now know, connived at cost inflation to win the election?
  The Prime Minister: Yes, Sir.
  Mr. Harold Wilson: The Prime Minister told my hon. Friend the Member for Birmingham, Northfield (Mr. Carter) that he was "talking nonsense, as usual". If the right hon. Gentleman will wait for the statement after Questions, perhaps he will find that that was a very inapposite comment to my hon. Friend, who was talking sense before the Government did on the matter which is to be discussed.
  As for what the right hon. Gentleman said about cost inflation, will he give us details of redundancies in the steel industry, where, in order to avoid redundancies, the workers were prepared to accept a cut in wages of £2 10s. a week?
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  Will the right hon. Gentleman take that into account in the sweeping and inaccurate generalisations that he makes to explain the failure of his Government to maintain his pledge on unemployment?
  The Prime Minister: The right hon. Gentleman knows, because he was in power at the time, that the programme of redundancies in the steel industry announced yesterday by the British Steel Corporation was considered and worked out while he was in power—[HON. MEMBERS: "Oh!"] What is more, the right hon. Gentleman will also recall that, during the Second Reading of the steel nationalisation Bill, one of the major arguments put forward by the then Minister, the right hon. Member for Greenwich (Mr. Marsh), was that the purpose of nationalising the steel industry was to rationalise it, to remove the older plant, and thus to achieve lower costs to enable British steel to be sold abroad.
  Mr. Chichester-Clark: Concerning unemployment, has my right hon. Friend noted the comments of the largest single industry in this country, the construction industry, to the effect that the measures contained in the Chancellor's Budget will be helpful in producing a higher work load and more jobs?
  The Prime Minister: Yes, Sir. It is not just the view of the construction industry. This was the view expressed by the C.B.I., both publicly and in the National Economic Development Council, in the discussion after the Budget.
  Mr. Harold Walker: Does the Prime Minister recall that in his now notorious and cheap electoral stunt of 16th June he said that his alternative policy would not only reduce rising prices at a stroke but would reduce unemployment at a stroke? Will he, in his replies to letters, explain why this is not happening and why he has failed so disastrously on this as on so many other matters?
  The Prime Minister: There is no doubt that the cut in S.E.T. announced by my right hon. Friend the Chancellor of the Exchequer has held prices and, indeed, in some sectors, reduced prices.
  The Government's intervention on steel prices has prevented that nationalised industry from putting up prices to the extent that it wished. For that we have been thoroughly criticised by right hon.

  1359
  and hon. Gentlemen opposite. They had better make up their minds whether they want us to prevent rising prices or whether they themselves want to increase prices.
  Mr. Harold Wilson: In his optimistic reply to his hon. Friend the Member for Londonderry (Mr. Chichester-Clark) about the construction industry and the "Neddy" discussions, the right hon. Gentleman sought to give the House the impression that the cut in S.E.T. would lead to an increase in employment. Will he give a pledge to the House that unemployment by the end of this year will be less than the 800,000 recorded last week?
  The Prime Minister: I shall adopt the procedure followed by the right hon. Gentleman and his colleagues, and not make forecasts.
  Mr. Thorpe: As unemployment in part of my constituency is running at 10.1 per cent., when the Prime Minister writes these letters will he say whether the present astronomic figures for unemployment came as a surprise to the Government, whether they were all along expected by the Government, how much longer they will place the exclusive blame for them on the record of their predecessors, and when they are prepared to be judged on their own policies?
  The Prime Minister: I have constantly explained the impact of the rising wage costs under the previous Administration and the efforts which we have been making to halt them. We have constantly and consistently been criticised and condemned by the Opposition for our efforts.

  PRIME MINISTER (SPEECHES)
  Mr. Sheldonasked the Prime Minister if he will place in the Library a copy of his public speech made to the British Electrical and Allied Manufacturers Association in London on 16th March on economic policy.
  The Prime Minister: I did so on 17th March.
  Mr. Sheldon: The Prime Minister stated in that speech that the escalation of wage demands had been "brought to a halt". "Brought to a halt" were the words which he used. Since this does not apply to industry generally, will the
  1360
  Prime Minister at least undertake to reconsider some of his policies?
  The Prime Minister: I shall deal with the public and private sectors separately. Not only has escalation in the public sector ceased, but de-escalation has begun. That is why we are criticised by right hon. and hon. Gentlemen opposite, who do not support that.
  Over a large part of the private sector the escalation has been halted and we have seen lower wage awards. There have been instances which are quite plain to everybody, particularly in the motor industry, where that has not happened. I do not see that that is a matter for satisfaction for the former Chancellor of the Exchequer to grin at. I should have thought that it was a matter for regret.
  Mr. Skinnerasked the Prime Minister whether he will place in the Library a copy of the public speech made by him at the Cutlers' Feast, Sheffield, on 18th March on industrial relations.
  The Prime Minister: I did so on 19th March, Sir.
  Mr. Skinner: Is the Prime Minister aware that when he spoke in the steel city he referred, among many obscure generalisations, to one man's strike call being another man's redundancy notice? Will he be more specific and tell the House which strikers have been responsible for the many thousands of steel workers who are to be thrown on the scrap heap, especially when we consider that this industry has been relatively strike-free for many years?
  The Prime Minister: I have already dealt with redundancies in the steel industry, which were planned under the last Government and which Lord Diamond, when winding up a debate in this House, said would help to reduce the over-manning which was a constant source of criticism in the steel industry.
  Concerning strikes, I should have thought that this was not a matter of contention between those who study these matters. When people lose orders because of strikes, undoubtedly employment diminishes afterwards.
  Mr. Harold Wilson: Is the right hon. Gentleman aware that the total number of man-days lost through strikes from

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  all causes in the first three months of this year under the Conservative Government exceeds the total number of man-days lost through strikes from all causes in the first three years of the Labour Government, when he was very vocal on the matter? Will he publish figures showing the comparable number of days lost per week from strikes, on the one hand, and, on the other, lost through unemployment which is now so much higher under the Conservatives than it was a year ago?
  The Prime Minister: I will certainly consider publishing any figures which the right hon. Gentleman requires. If he will put down a Question he will get the answer.
  Concerning strike figures, no doubt the right hon. Gentleman has included all the days lost through political strikes against a Measure put forward by a democratically elected Government.

  WEST LOTHIAN
  Mr. Dalyellasked the Prime Minister if he will pay an official visit to West Lothian.
  The Prime Minister: I have at present no plans to do so.
  Mr. Dalyell: Would not a decision to extend R.E.P. beyond the mid-1970s, with its effect on investment expectations, be about the most helpful thing which the Government could do for the development areas?
  The Prime Minister: I am sorry to differ from the hon. Gentleman, whose intentions, I know, are good. After all, his own Government were intending to bring R.E.P. to an end in 1974. That was announced by the former Chancellor of the Exchequer when he introduced it. There is no point in the hon. Member for Willesden, East (Mr. Freeson) shaking his head. He had better read the report of the debate.
  The criticism always made of R.E.P. is that it is given indiscriminately to everybody already in an area and does not concentrate on inducing new investment from firms outside the area. The purpose of regional development must be to bring new investment into an area, particularly Scotland.

  RHODESIA
  Mr. Roseasked the Prime Minister whether he will now make a further statement on his negotiations with Mr. Ian Smith.
  The Prime Minister: As the House knows, exploratory exchanges are continuing. The House will be informed when there is something of substance to report.
  Mr. Rose: Will the Prime Minister give an unequivocal undertaking that there will be no departure from the five principles laid down by his right hon. Friend the Foreign Secretary during the period of office of the last Conservative Government and indicate whether there has been any change of heart whatsoever on the part of the Smith régime?
  The Prime Minister: These exploratory exchanges are being carried out, as the House already knows, on the basis of the five principles. It is right that such exchanges should continue until there is something of substance to report to the House, and we shall then report it.

  GOVERNMENT DEPARTMENTS (COMPUTER DATABANKS)
  Mr. Leslie Huckfieldasked the Prime Minister who is responsible for the maintenance of standards of privacy and confidentiality in the storage of personal information in Government departments' computer databanks.
  The Prime Minister: The Minister in charge of the Department concerned.
  Mr. Huckfield: I still have not received an answer, but I shall continue to seek it. Is it not about time that the Minister was identified, because, in a recent Civil Service Department report of 182 pages, there were only five lines tucked away in an appendix, on the security of files? Therefore, will the Prime Minister try to identify the Minister and tell him to re-examine that report and the whole question of file security?
  The Prime Minister: Privacy and confidentiality in Government Departments is concerned not only with computers but with the whole of the activity of the Government so far as it affects personal

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  records. It is essential that we should always keep this in the forefront of our minds. Therefore, the Minister responsible for a Department must be responsible for privacy and confidentiality throughout all the activities of his Department, which includes the use of computers.

BUSINESS OF THE HOUSE
Mr. Harold Wilson: May I ask the Leader of the House whether he will state the business for next week?
The Lord President of the Council and Leader of the House of Commons (Mr. William Whitelaw): Yes, Sir. The business for next week will be as follows:
MONDAY, 26TH APRIL—Second Reading of the Social Security Bill.
Motion on the Ministry of Aviation Supply (Dissolution) Order.
TUESDAY, 27TH APRIL—Motion On the Family Income Supplements (Computation) Regulations.
Motions relating to the National Health Service (Charges) Regulations.
At Seven o'clock, the Chairman of Ways and Means has named Opposed Private Business for consideration.
WEDNESDAY, 28TH APRIL—Second Reading of the Finance Bill.
Motion on the Amendments to the Potato Marketing Scheme, 1955.
THURSDAY, 29TH APRIL—Supply [16th Allotted Day]: There will be a debate on unemployment, on an Opposition Motion.
Motion on the Motor Vehicles (International Circulation) (Amendment) Order.
FRIDAY, 30TH APRIL—Private Members' Bills.
MONDAY, 3RD MAY—Second Reading of the National Insurance Bill.
Mr. Harold Wilson: The right hon. Gentleman will be aware that there have been undertakings to keep the House informed about the situation in Pakistan. Is he aware—if he is not, may I inform him—that the Opposition officially intend to table a Motion on the very grave situation in Pakistan, not in censorious terms but expressing the concern of, I
1364
am sure, the whole House? Would he consider how this might be properly debated, either as a separate Motion or as part of an early Foreign and Commonwealth Affairs debate?
Second, the right hon. Gentleman has announced the unemployment debate, for which we have allotted a Supply Day. Is he aware of the deep concern in all quarters of the House about the further prospective redundancies in the steel industry, speeded up as a result of Government policy, despite the Prime Minister's attempt to disclaim responsibility today? In view of this, would he recall that the Government—[An HON. MEMBER: "Question."]—this is a question to the right hon. Gentleman—have undertaken that their review of the steel industry, which is why they have not made other statements earlier, should be concluded in a week or two? Does the right hon. Gentleman understand that we shall then expect an emergency debate on the steel industry as soon as we have that report? Will he also give an assurance that that report will not be delayed beyond the time that we were promised by the Secretary of State for Trade and Industry?
Mr. Whitelaw: I note what the right hon. Gentleman says about Pakistan. Of course I agree that the whole House is very concerned about this situation, and my right hon. Friend the Foreign and Commonwealth Secretary has, as the Prime Minister made clear, been using every influence that this country has to ensure an end of the bloodshed as soon as possible. The Foreign Secretary will wish to keep the House informed and I am prepared to discuss through the usual channels how the Motion which the right hon. Gentleman tells me is to be tabled might be handled in future.
As for the steel industry, the matters to which the right hon. Gentleman referred can most properly be discussed very simply, provided that the Opposition Motion—as I understand it—allows that to happen, in the debate on unemployment. I understand that that is their intention—[HON. MEMBERS: "No."] I think that hon. Members have misunderstood me. The question of the redundancies in the steel industry can be discussed on that Motion.
As for the question of the review of the steel industry, I certainly note what

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the right hon. Gentleman has said. The result of that review will be announced as soon as it is ready, and I undertake to report to the Secretary of State for Trade and Industry what the right hon. Gentleman has said. Pending the debate on unemployment, I do not accept some of the implications of the right hon. Gentleman's supplementary question. Lord Melchett made it clear that these redundancies were part of the rationalisation programme which had previously been planned.
Mr. Harold Wilson: There should be no misunderstanding: I heard Lord Melchett too. Is the Leader of the House aware that, while the noble Lord said that this was not due to Government policy in relation to the intervention on prices, he said that it was due to the falling off of demand, and if that is not Government policy no one in the House knows what it can possibly be. [AN HON. MEMBER: "Get On with it."] If the right hon. Gentleman makes obiter dicta in a business answer he will get further questions in a business question.
With regard to the business for next Thursday, on which he also pronounced obiter dicta, is he aware that we who will be responsible for the Motion would feel that a debate on unemployment obviously would not rule out the question of redundancies in steel? But it is not principally about steel. When 7,000 redundancies for the coming month are compared with a 48,000 increase in unemployment—[Interruption.] If the right hon. Gentleman seeks to give guidance to the Chair on what is in order. I am allowed, as the author of the Motion, to tell the right hon. Gentleman where he is wrong.
Is he aware, therefore, that although in our view the question of steel will be included in that debate, we shall be very much concerned to discuss the wider increase in unemployment affecting other industries, including white-collar industries, and that we still require a debate on steel—not only on redundancies but on the Government's interference with the industry?
Mr. Whitelaw: I thought I had made that perfectly clear. If I did not make it clear before, I shall make it clear now. All I said was that I understood that, if we were to have a debate on unemployment, naturally the question of redun-
1366
dancies in the steel industry would be part of that debate. Of course I accept that there are many other issues in that debate, but clearly I understood yesterday after the Motion under Standing Order No. 9 was moved that it was part of the Opposition's desire that there should be an opportunity, among other discussions of unemployment, to refer also to the redundancies in the steel industry. That was all I said. As for the rest of the steel industry, I have made the position perfectly clear for the future.
Mr. Crouch: I should like to raise an entirely different subject. I should like my right hon. Friend to remember that he assured the House some weeks ago that a statement on the question of the siting of the third London airport would be delivered to this House before it was released to the Press. Last night, in the Evening Standard, and also on the radio and in the morning's papers, there was an air of authority about statements concerning the siting of the third London airport which gives me cause for great concern and which causes a great deal of concern to the hundreds of thousands of people who are involved. I hope that my right hon. Friend can assure me and every hon. Member that that was not an organised leak to soften the blow—
Mr. Speaker: Order. Is the hon. Gentleman asking a question?
Mr. Crouch: I am asking my right hon. Friend to assure the House that there is no question of an organised leak to soften the blow of this very serious decision facing Parliament and the people of this country. I would ask him to remember that back benchers will not sit back for ever being fobbed off, with information being delivered to the public before it is delivered in this Chamber.
Mr. Whitelaw: I make it absolutely clear to my hon. Friend and the House that I cannot be responsible for speculation. I am responsible for promising the House when a statement will be made, and it will be made as soon as the Government are ready to make it. No one regrets speculation more than I. No one is more anxious than I to see it stopped, and if I were given some help in doing it I should be very grateful and would do everything in my power to stop it.
Mr. John Mendelson: With reference to the steel debate—and some of us do speak for steel constituencies, although they have not had much of an innings so far—does not the right hon. Gentleman recall that yesterday when a debate under Standing Order No. 9 was sought, and in the subsequent questions, there was a demand for a debate on the position in the steel industry? The Prime Minister made the misleading declaration today that Lord Melchett had said that these redundancies were the result of the last Government's policy, when he knows that Lord Melchett had said many times up to about three months ago that they would be phased over a period of five years or more as new jobs were coming through new steel works all over the country. Since the Government have prevented Lord Melchett and the Corporation from pursuing that policy, which they agreed with the last Government, the issue ought to be debated separately as soon as possible.
Mr. Whitelaw: I will not follow the hon. Gentleman in his various remarks about the steel industry. As I have said, the question of the immediate redundancies in the industry will, I understand, form part, although perhaps as the Leader of the Opposition said not necessarily a major part, of the debate next Thursday. I have also undertaken that as soon as my hon. Friend the Secretary of State for Trade and Industry is ready to announce the results of his review of the industry he will so announce them. The question then of a debate can be considered.
Dr. Glyn: Has my right hon. Friend seen Motion No. 478, standing in my name and the names of 100 other hon. and right hon. Members on both sides of the House, relating to special opportunities for back bench speakers? Is he aware that this is in line with what Mr. Speaker himself has been pressing back benchers to do—to keep their speeches down to ten minutes?
[That this House considers that, in order to increase the opportunities for back benchers to contribute to proceedings, the occupant of the Chair should have the power to limit the time taken by back bench speakers to ten minutes in any debate, except by leave of the House.]
Mr. Whitelaw: I have noted the terms of the Motion. These are matters which can properly be considered by the Select Committee on Procedure in its review of the legislative process. I suspect that it is doing just that.
Mr. Orme: Is the right hon. Gentleman aware that many hon. Members who have constituents directly affected by the recent announcement of the British Steel Corporation do not feel it satisfactory to include it in a general debate, since the Government will be able to slide off the problem? Who will answer on behalf of the Government? Will that Minister have authority to give an answer on the steel questions? Many of us on this side feel that the steel industry ought to be discussed very soon—in fact, that it might be advantageous to have a debate before the Secretary of State comes to his conclusions so that he can hear what the House has to say about the matter.
Mr. Whitelaw: I am grateful to the hon. Gentleman, since his question helps me to say that the Government are anxious to meet what they feel will be the wishes of the House. My right hon. Friend the Secretary of State for Trade and Industry will be the first Government speaker during the debate on unemployment next Thursday.
Mr. Hugh Fraser: Clearly, there cannot be an early debate on the Pakistan situation. Therefore, would my right hon. Friend arrange for a statement to be made next week, especially regarding the question of international relief organisations and whether any progress has been made in making facilities available to them in Pakistan?
Mr. Whitelaw: I appreciate that point. My right hon. Friend the Foreign and Commonwealth Secretary has made is clear that he is most anxious to keep the House fully informed. If a statement can usefully be made to the benefit of the House he will make one.
Mr. Atkinson: Will the right hon. Gentleman reconsider his decision or comment about including the steel industry in the debate on unemployment, mainly because of the contradictory statements made by the Government and people representing the steel industry? As I understand it, the leaders of the steel

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industry have said that many of the redundancies will arise from the refusal of the Government to allow a price increase above 7 per cent. If that is the case, surely the Prime Minister has no right to suggest that many of the redundancies now occurring are the result of Labour's original rationalisation plan. Surely we should have a separation of these topics so that we can debate that aspect of the problem much more thoroughly than if it is taken in with the debate on unemployment.
Mr. Whitelaw: I can only repeat what I have said. Inevitably, in a debate on unemployment the recent announcement of redundancies in the steel industry is bound to have a part. I do not wish this to be taken as prejudging what may happen in future. I only mentioned that inevitably the immediate position of these particular redundancies—the reason for which Lord Melchett made clear yesterday—could form part of the debate on unemployment. I did not go further than that.
Mr. Money: Will my right hon. Friend give an opportunity to debate the arts in the near future?
Mr. Whitelaw: I will bear that in mind, but I cannot promise when.
Mr. Mayhew: Can the right hon. Gentleman find time for a debate on the far-reaching report of the committee of inquiry into Farleigh Hospital? Has he noted the Early Day Motion, signed by 170 hon. Members on both sides, calling on the Government and the local authorities to take urgent action for the better care and treatment of the mentally handicapped?
[That this House, aware of the widespread and acute suffering caused by mental disorder, welcomes the launching of the Mind Campaign by the National Association for Mental Health, with the support of many other voluntary organisations; and calls on the Government and local and other public authorities to support the objectives of the campaign, in particular by further increasing the provision of community care for mental sufferers.]
Mr. Whitelaw: I recognise the importance of the subject and the hon. Gentleman's interest in it. I cannot promise an immediate debate. There are, of
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course, other means by which the subject can be raised. If I can find time for a debate, I will be pleased to do so.
Mr. James Johnson: Has the right hon. Gentleman seen Early Day Motion No. 510, in the names of hon. Members on both sides, including mine, and particularly including those from fishing constituencies? If we enter the Common Market there will be redundancies in the fishing industry also, particularly in the coastal fisheries. Will he give time to debate this important matter?
[That this House believes that matters essential to the future prosperity of the British fishing industry such as the access to coastal waters, grading, minimum prices and the importation of fish fillets should be negotiated with the European Economic Community prior to Parliament being asked to approve British entry.]
Mr. Whitelaw: The question of fisheries in the Common Market is a subject in the current negotiations. I cannot promise time for a debate in the immediate future, but when the full issue is discussed inevitably this is one of the subjects that will be raised then.
Mr. Rose: In view of the winding up of one of the industrial training boards announced by means of a Written Answer, will the right hon. Gentleman ask the Secretary of State for Employment to make a full statement to the House on the future of industrial training?
Mr. Whitelaw: I will report to my right hon. Friend what the hon. Gentleman has suggested. It is in accordance with precedent that my right hon. Friend's announcement was made by Written Answer on this occasion.
Mr. Fernyhough: Will the Secretary of State for the Environment be taking part in next Thursday's debate on unemployment? When we asked which Minister was responsible for the North-East, we were told that he would do that job. Since unemployment there, and particularly in my constituency, has risen to almost astronomical heights in the last three or four months, we would like to hear what the Secretary of State for the Environment, as the Minister responsible, is going to do about it.
Mr. Whitelaw: In response to what I believe would be the desire of the House, my right hon. Friend the Secretary of State for Trade and Industry will speak first and my right hon. Friend the Secretary of State for Employment will reply.
Mr. Lawson: Does not the right hon. Gentleman agree that it is about time he set up a Select Committee on Scottish Affairs if he is going to set one up at all?
Mr. Whitelaw: I understand that discussions to this end are currently proceeding through the usual channels.
Mr. Harper: In view of the deteriorating situation in the Middle East, with the consequent effect upon future oil supplies, will the right hon. Gentleman find time, if not next week, for a debate?
Mr. Whitelaw: I appreciate the importance of the subject and the relevance of what the hon. Gentleman has said. I could not offer time for a debate in the near future.
Mr. Leadbitter: Yesterday, I transferred my request under Standing Order No. 9 to my right hon. Friend the Member for Newton (Mr. Frederick Lee), who drew particular attention to the problem of Irlam Steel Works arising from the closure announcement. You ruled, Mr. Speaker, that the application for a debate could not be accepted for reasons which you were not obliged to give to the House. However, you added that there were other ways of dealing with this matter. I therefore ask the Leader of the House to reconsider the position he has taken, because my hon. Friend the Member for Cleveland (Mr. Tinn), said in his contribution:
"… may I appeal through you, Mr. Speaker, to the Leader of the House to give us an assurance that we will have opportunity for a debate in the near future?"
The Leader of the House said, in response to that:
"I would hope that by some changes which I may be able to make to meet this point of view I should be able to offer some satisfactory answer at business questions tomorrow."—[OFFICIAL REPORT, 21st April, 1971; Vol. 815, c. 1181.]
I appreciate how the usual channels have worked—
Mr. Mellish: Hear, hear.
Mr.Leadbitter:—but, while I respect the usual channels and, of course, I respect the Ruling of the Chair, the Leader of the House gave a firm undertaking about a debate on steel. I put it to the right hon. Gentleman that he has not been as fair to the House as he intended to be yesterday. We are not at this juncture concerned about the Secretary of State's review. We want a debate on the state of the steel industry now. Will the Leader of the House be fair to the House and give an undertaking, as he promised yesterday—which we understood would be carried out—that we shall have an early debate on steel?
Mr. Whitelaw: I entirely accept the words which the hon. Gentleman has quoted, though I should like to check the matter in detail in the OFFICIAL REPORT. I believe that what I said to you, Mr. Speaker, and to the House was that it would be possible to discuss through the usual channels how best these matters could be handled in the immediate future. That I did, and I am grateful for the expression of support, having myself occupied the right hon. Gentleman's position on the other side of the House for some time.
Mr. Mellish: Hear, hear.
Mr. Whitelaw: This was discussed, and I think that the arrangement which was made is reasonably satisfactory for the immediate future. I note entirely what the hon. Gentleman has said as regards the longer term, but I cannot make any promise as yet.

VEHICLE AND GENERAL INSURANCE COMPANY
The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. John Davies): I think that it would be for the convenience of the House, in view of the publicity given to it, if I were to make a short statement about the question of unauthorised possession of confidential information concerning the Vehicle and General Insurance Company.
At a meeting between the directors of the Vehicle and General Insurance Co. Ltd. and my Department on 18th November last year, the former revealed

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knowledge acquired through a source outside the Department of internal exchanges between officials of the Department about the affairs of the group. A Departmental investigation was put in train at once. This investigation was inconclusive, and the matter was referred to the Director of Public Prosecutions early in Janauary. With the approval of my right hon. and learned Friend the Attorney-General, the Director decided that a further investigation should be carried out by the Metropolitan Police with a view to a possible prosecution. The papers are now with the Treasury prosecuting counsel.
Mr. Carter: May I put four questions to the right hon. Gentleman? First, will he reconvene the Departmental inquiry into the leak, will its finding be made public, and will full Ministerial responsibility be accepted for it?
Second, will the terms of reference of the present inquiry into Vehicle and General be extended to cover the Department?
Third, when it was known last July that the Vehicle and General Insurance Company was in difficulties, why did the Department not take action sooner, particularly since it discovered in November that the leak had occurred?
Fourth, from Parliament's point of view, does not the right hon. Gentleman feel that a Select Committee should be appointed and report all its findings to the House?
Mr. Davies: First, I have no reason to reconvene the Departmental inquiry until such time as the Treasury prosecuting counsel has had access to, and consideration of, the papers which have been put before him. I must leave it to him first and foremost to reach his conclusions on what has been put to him.
Second, the Companies Act inquiry will not cover the specific matter which is the subject of my statement, because it is an inquiry into the affairs of the company. It will look into relations between the company and the Department but only in so far as they affect the company's own affairs.
The third question which the hon. Gentleman raised is not germane to the statement which I have made. He referred to doubts which we had in July,
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which he considers we did not follow up quickly enough. This is not a relevant question arising on my statement.
Fourth, as to a Select Committee, again it is necessary first to see what is the reaction of the Treasury prosecuting counsel to the information put before him. It would be wrong to try to anticipate it.
Mr. Rost: Will my right hon. Friend consider asking the Stock Exchange Council to hold an investigation into the share dealings prior to the collapse of the company so that, if there were beneficiaries with financial gain resulting out of this affair, they may at least be identified, which would not allow insinuations or allegations to be made against possibly innocent parties, such as civil servants or even Ministers?
Mr. Davies: I entirely appreciate the motive behind that request, but again I must say that until such time as we have the conclusions reached as a result of the investigations which have taken place, about which there are papers, we should not seek in any way to devise a new method of inquiry.
Mr. Benn: Does the right hon. Gentleman realise that, without the persistence of my hon. Friend the Member for Birmingham, Northfield (Mr. Carter), his statement would never have been made to the House at all? Second, does he appreciate that in his statement he has revealed a far graver situation even than was apparent tram the Sunday Mirror leak and the letter written to my hon. Friend yesterday, inasmuch as it now appears that the leak was known on 18th November, and there was thereafter a Departmental inquiry, the Director of Public Prosecutions was not brought in until January, but meanwhile the company was allowed to continue in business when it was known by the Department that a leak had occurred about the Departmental attitude to the company? Does the right hon. Gentleman recall that in his statement to the House on 2nd March, he made no reference whatever to the leak? Indeed, he said that one reason why he had not acted earlier was that he was afraid that if anything go: out the company might collapse, although at the time he knew that something had got out three months earlier.
Hon. Members: Scandalous.
Mr. Benn: Can the right hon. Gentleman say now whether any of the directors or principal shareholders of Vehicle and General sold their shares between 18th November and the date when the company collapsed?
Further, does the right hon. Gentleman appreciate that an episode of this kind, however it arose—perhaps it included the passage of documents, and he will tell us—undermines the whole basis of confidence between Government and industry and really does merit an inquiry going well beyond either a police investigation or a Companies Act inquiry —requiring, indeed, a Select Committee which will allow every aspect of the matter, including Ministerial responsibility, to be called into account?
Mr. Davies: I cannot accept the exaggerated views expressed by the right hon. Gentleman. This leak was detected on 18th November. A Departmental inquiry was instituted. It was inconclusive. The necessary proper steps were then taken, and have been taken throughout. I entirely disagree that this should be broadened in the way the right hon. Gentleman seeks into some massive consideraton of confidence, which it absolutely does not justify.
As regards the revelation of this situation, which the right hon. Gentleman ascribes to his hon. Friend's persistence, I understand his point of view, but I must say that from the Departmental point of view it would not have seemed a matter which would have benefited greatly from revelation. [HoN. MEMBERS: "Oh!"] I reaffirm what I have said, that what was important was to get to the bottom of the matter, and this is what we have sought to do. When the hon. Gentleman addressed a letter to a Minister in my Department posing a specific question, it would have been impossible to do other than answer him directly, as has been done.
Mr. Benn: Does not the right hon. Gentleman realise that it was his own statement just given to the House which revealed for the first time that a source outside the Department had access to information which he knew, were it to become general, would precipitate the collapse of the company? Were documents passed? In view of the situation which now confronts us, is it not right
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that there should be an inquiry looking into every aspect of this matter and not just into the handling of the company? Is the right hon. Gentleman aware that some subjects whose revelation may not be beneficial for some people may be highly beneficial to this House and the public?
Mr. Davies: I am very conscious of that. I am certainly not trying to conceal anything in this matter. [HoN. MEMBERS: "Oh."] But when matters have been referred to the Director of Public Prosecutions, when a police inquiry has been instituted, and when papers have been produced by that inquiry and submitted to the Treasury prosecuting counsel, it is proper that they should be gone through with, and that is what I have adhered to.
Mr. Ashton: Does not the right hon. Gentleman remember that when the hon. Member for Worcestershire, South (Sir G. Nabarro) made allegations two years ago of a Treasury leak, allegations which received extensive publicity, my right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins), the then Chancellor of the Exchequer, immediately set up a Select Committee of inquiry to get to the bottom of the matter? Will the right hon. Gentleman give an assurance that on this occasion, irrespective of what the Director of Public Prosecutions finds out, he, too, will set up such a Select Committee to ascertain whether information has been divulged?
Mr. Davies: No, I will not do so irrespective. I will first and foremost see what the conclusion of the Treasury prosecuting counsel is.
Mr. J. T. Price: In view of what the right hon. Gentleman has now told the House in mitigation of this deplorable incident, is he not aware that long before he held his present office there was another serious insurance company collapse, that of the Fire, Auto and Marine Insurance Co., as a result of which the House passed amending legislation strengthening the Companies Act? I served for three months on the Committee considering that Bill. All hon. Members on both sides who took part in that consideration were satisfied that his Department were suitably armed to

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deal with similar cases. It is simply because his Department has procrastinated and failed to use the amended legislation available to it over the past 12 months that hundreds of thousands of policy holders have been inflicted with misery as a result of the collapse of Vehicle and General.
Mr. Davies: It is thanks indeed to such legislation that I am able to carry out the inquiry which is in course, so it would be wrong for me to do other than to be grateful for the existence of its provisions. But I cannot deal with the first part of the hon. Gentleman's question, which does not arise from my statement.
Mr. Thorpe: The whole House will agree that matters which may be of a criminal nature are very properly being investigated by the Director of Public Prosecutions, and it would not be right to comment on them. But the right hon. Gentleman has told the House today as a fact that a source outside the Government knew of exchanges within a Department relating to confidential information. Is he aware that the public are very concerned about the possibility of Governments obtaining information and making it known to third parties, and that nothing more than a thorough Departmental inquiry, the results of which will be published, whatever the outcome of the Director of Public Prosecutions' inquiry, will satisfy the public, although the right hon. Gentleman may be prepared to be satisfied with something less?
Mr. Davies: I think the right hon. Gentleman has jumped a stop, because I have not said that the Government revealed anything. I have said that information was acquired through a source outside the Government. That does not imply necessarily that the Government have revealed it.
Mr. Thorpe: How does the right hon. Gentleman consider that a source outside a Government Department knew what went on between two officials in a Government Department without one of those officials being indiscreet?
Mr. Davies: I simply ask the right hon. Gentleman to use his imagination On that. [HON. MEMBERS: "Oh!"] I can
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think of several methods of so doing. I will not discuss any of them with the right hon. Gentleman pending the report of the Treasury prosecuting counsel.
Mr. Roy Jenkins: The Secretary of State has made the most extraordinary series of statements to the House this afternoon. An event such as we are discussing is, fortunately, extremely rare in our administrative experience. What is clear is that this was known to the right hon. Gentleman on 18th November. The matter went to the Director of Public Prosecutions in January. It has become known to the House at the present time, and his statement, it is clear from what he has said, has been made only because of the intervention of my hon. Friend the Member for Birmingham, Northfield (Mr. Carter). It is most extraordinary that the Prime Minister should have chosen today to say that my hon. Friend was wrong as usual. The right hon. Gentleman has made it quite clear that he would not otherwise have made this statement. Is not it a most extraordinary state of affairs that this should be revealed to the House solely because his hon. Friend the Under-Secretary had to reply to my hon. Friend, and therefore revealed it incidentally? Is not the right hon. Member for Devon, North (Mr. Thorpe) on a very strong point when he says that Treasury prosecuting counsel are concerned only with the criminal aspect of the affair, but that there is a much wider aspect, which is the general relations of confidence between public Departments and business and the public generally?
Mr. Davies: I am very well aware of what the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) says. I am simply saying that until such time as I see the results from the work carried out by the police and the Treasury prosecuting counsel I shall take no further action, and I am convinced that that is right.
Mr. Jenkins: Will the right hon. Gentleman assure us that as soon as he sees that he will make a statement to the House without having to be prodded by my hon. Friend the Member for Northfield?
Mr. Faulds: Honest Government.
Mr. Davies: I do not very much take to the dig at the end, but I will certainly

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consider what further statement can usefully be made to the House in due course.
Mr. Tugendhat: Is my right hon. Friend aware that there is considerable support on this side of the House and throughout the country for the Government's attitude of not jumping to conclusions before the facts have been fully investigated? Is he also aware that under previous Administrations of both parties great harm has been done to the reputations of individuals when Governments have assumed that certain allegations have been right and have acted before the full facts have been assessed? This is a matter of which the Opposition have considerable personal experience.
Mr. Davies: It is for that reason that I do not wish at this stage to take action in anticipation of the results of the work in hand.
Mr. C. Pannell: Is the Secretary of State seized of the point which I think puzzles the whole House, that this was known at the end of last November? Bearing in mind the precedent of frankness between Government Departments and the House, why have we had to wait until now before any statement was made? We could quote many precedents of Ministers faced with similar situations being frank with the House and the matter —after disclosure—being treated as sub judice until all the facts were known. I make no assertions about this, but because the Minister came late to Government service he does not seem to have appreciated the conventions of the relationship between the Government and the House.
Mr. Davies: I do not think that that has anything to do with it. The truth is that when matters arise which involve the possibility of criminal prosecution it is infinitely better to let the proper course of investigation be proceeded with, and that is what has happened.

VEHICLE AND GENERAL INSURANCE COMPANY
Mr. Carter: 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
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that should have urgent consideration, namely,
"the leak of confidential information from the Department of Trade and Industry to outside interests concerned with the Vehicle and General Insurance Company."
I shall be brief, because most of what I have to say is already generally known.
There is, particularly as a result of what the Secretary of State for Trade and Industry has said today, a great deal of disquiet in the country, not only about the affairs of his Department but about motor insurance generally. It will be widely held outside that the Government have mishandled the whole affair. As to motor insurance generally, we must bear in mind that over the past few years over 2 million motorists have lost their cover as a result of the failure of insurance companies. With Vehicle and General over one million policy-holders lost their cover. If we take into account the losses of the small investor we could easily get to a figure of £30 million in losses. This is no small matter. The collapse and the leak, the whole affair, demand the attention of the House and I would ask you, Mr. Speaker, to accede to my request.
Mr. Speaker: The hon. Member asks leave to move the Adjournment of the House for the purpose of discussing an important matter which he thinks should have urgent consideration, namely,
"the leak of confidential information from the Department of Trade and Industry to outside interests concerned with the Vehicle and General Insurance Co."
I have considered the matter and have heard the exchanges that have taken place today, and listened carefully to what the hon. Gentleman has said. This is a matter for my decision and I have decided that I cannot submit the application to the House.

BALLOT FOR NOTICES OF MOTIONS FOR MONDAY 10TH MAY
Members successful in the Ballot were:

Mr. George Wallace.

Mr. Eric S. Heller.

Mr. Peter Mills.

ORDERS OF THE DAY

  SHIPBUILDING INDUSTRY BILL
  Order for Second Reading read.
  4.13 p.m.
  The Minister for Industry (Sir John Eden): I beg to move, That the Bill be now read a Second time.
  This is a short and simple Bill, the effect of which is to raise from £400 million to £700 million the statutory ceiling on the power to give guarantees under Section 7 of the Shipbuilding Industry Act, 1967, to facilitate the financing of orders for ships placed by British owners with British shipbuilders. It does nothing more. For reasons which I shall explain later in my speech, it does not prolong the life of the Shipbuilding Industry Board which under the 1967 Act must finish at the end of this year.
  The Bill follows an established path. When the home credit scheme was first introduced under the 1967 Shipbuilding Industry Act, the provision for credit guarantees was set at a relatively modest ceiling of £200 million. At that time the average order book seemed to be on the decline and international competition in shipbuilding was extremely severe. Overseas purchasers of British ships has access to credit at concessionary rates through E.C.G.D. British shipowners, however, could obtain cheap credit only by buying their ships abroad. The home credit scheme, by extending credit guarantee facilities to cover purchases of ships in Britain by home owners, was intended to prevent such orders from going abroad solely to obtain easier credit terms.
  Following the 1967 Act, it was found that far from declining as had been initially anticipated by the then Minister of Technology, the number of orders for ships to be built at British yards increased substantially. It became necessary by means of the 1969 Shipbuilding Industry Act to raise the statutory ceiling on shipbuilding credit to £400 million. Last year yet a further step was taken when the previous Government introduced legislation to increase the limit to £600 million. This Bill was lost on the dissolution of Parliament. So we have seen
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  what was at the outset a comparatively modest scheme grow into one which involves very substantial sums of money. This money is made available by the banks—not by the Exchequer—but there is of course a contingent liability on the Exchequer.
  The House will, I know, wish to consider the need for this further Bill against the background of events and policies since the Geddes Committee reported in 1966 and in the context of the Government's shipbuilding policy as a whole. The debate provides the first occasion to tell the House about some of the conclusions we have reached following on from the review in which we have been engaged.
  The basis for the policy followed by the last Administration is to be found in the recommendations of the Geddes Committee. Geddes proposed that the industry should be given a once-and-for-all opportunity to strengthen its competitive position in world markets through the provision of Government assistance. The industry was to make "a new start" and there was to he no open-ended commitment, no featherbedding—that was particularly emphasised by the right hon. Gentleman. The once-and-for-all character of the assistance was written into the legislation by setting a time limit to the life of the Shipbuilding Industry Board. There was no provision for Government assistance thereafter.
  The House will recall that the Geddes Report recommended that the Shipbuilding Industry Board should be empowered to make loans of up to £32·5 million and grants up to £5 million. In the event the assistance given was substantially in excess of these sums. The provision for grants to the industry through the S.I.B. was increased to £20 million and in addition substantial sums of money were provided outside the 1967 Shipbuilding Industry Act—£7 million for Upper Clyde and £1½million for the Cammel Laird shipyard.
  The total level of assistance already provided under the Act is £18 million in grants and £19 million in loans and the Shipbuilding Industry Board has further applications under consideration. Assistance has also been given to the industry through the rebate of indirect taxation at present worth 2 per cent. of the contract price of a ship. This is known as

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  the Shipbuilders' Relief and originated as an extension of the export rebate scheme to home sales of ships. It was retained for the shipbuilding industry alone following withdrawal of the export rebate scheme from manufacturing industry in 1968.
  These measures together with the home credit scheme gave substantial support to the industry over a period of some five years.
  Since 1967 international developments have been very favourable to the industry. We have seen a massive and continuing boom in shipbuilding. World order books in 1967 were 40·4 million gross tons. Today they are nearly 80 million gross tons. Prices of ships have responded to the world boom though costs have also risen substantially. A 250,000 deadweight-ton tanker in 1967 was priced at about £6-£7 million. The same tanker ordered today would cost about twice that figure. Lengthening order books have enabled shipbuilders gradually to secure more favourable terms and many have now negotiated contracts with escalation clauses.
  This then is the background to the review of the industry that we set in hand on taking office. We found that in recent years, in spite of favourable world market conditions and of Government grants and loans approaching £50 million, most merchant shipbuilders have made substantial losses. Performance, of course, has not been universally bad, and I do not mean to imply that it has been. There have been some notable successes. But taking the industry as a whole, although orders have been plentiful, the merchant ship order book is today worth about £737 million, production here has been virtually static. World output has been steadily increasing. In 1967 United Kingdom completions were 1·2 million gross tons; last year the figure was 1·3 million gross tons. The decline in our share of world output has not been arrested. United Kingdom shipyards now account for only 6·5 per cent. of world tonnage, compared with 15 per cent. in 1960, and 43 per cent. in 1950.
  I am sorry to have to say to the House that even though the urgent need for improvement was underlined over and over again in the Geddes Report, and despite the warnings given by the right
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  hon. Gentleman the then Minister of Technology, a good part of the industry's indifferent performance must be attributed to poor labour relations. The strike record of the shipbuilding, ship-repairing and marine engineering industries has been far worse than the average for other industries. Provisional estimates for last year indicate that 1,975 days per 1,000 employees were lost in shipbuilding, ship-repair and marine engineering through strikes compared with an average of 468 days for other industries. It is sterile in these circumstances to attempt to apportion blame. Both management and unions are responsible for what has been happening. They are taking too long to shake off old attitudes and they are wasting the opportunities they have been given to put their own house in order. It is their joint failure in this vital area, combined of course with the inflationary policies of recent years, that has proved so damaging to our shipbuilding industry and left it still saddled with problems which could—and should—have been solved years ago.
  Since it is usual for at least two years if not more to elapse between an order and the delivery of a ship, this is an industry which is particularly vulnerable to the effects of rising costs. And it has been hard hit: the scale and direction of past Government assistance has encouraged unreasonable wage demands and exacerbated inflationary trends. From October, 1967, to October, 1970, in a period when output has been stagnant and the financial position of most shipbuilding companies has failed to improve, weekly earnings in the shipbuilding and ship-repairing industries taken together have increased faster than the average for all manufacturing industries and faster than in engineering alone. In October, 1967, average earnings in shipbuilding and ship-repair were 61 pence more than those in engineering industries and 11 pence more than the manufacturing industry average. By October, 1970, these differentials had increased to 149 pence and 70 pence respectively.
  The inescapable fact is that a good part of the capital assistance to the industry has done little to strengthen longer term prospects. Some of the assistance was undoubtedly directed at maintaining employment in the short term, but insufficient account was taken of the prospect

  1385
  of ultimate profitability and security of employment. In fact, the only major facilities represented by almost £50 million of capital assistance are the building dock and associated steel facilities at Harland and Wolff, the new facilities under construction at Scott Lithgow, and a small dock project at Appledore.
  The previous policies have not transformed the industry to the extent that had been hoped. We do not intend to follow them. All hon. Members would agree that there is no doubt that what this industry needs is a period of stability in labour relations and relief from inflationary pressures. Here the Government can certainly help. In the longer term I am sure that the most effective way is to encourage self-reliance in management, to reward efficiency, and by supporting international efforts to help bring about the progressive elimination of practices that distort competition.
  Immediately, however, we recognise that a further breathing space is needed to complete the processes of readjustment in which the industry has been engaged. We have therefore extended the life of the S.I.B. to the end of this year, the latest possible date under the Act. This gives the industry a final opportunity to apply for what remains of loan assistance under the Act either for investment or for working capital, and enables the Board to complete outstanding business. It was never the intention that the Board should become a permanent feature of the landscape, and I repeat: we do not intend to extend its life and its powers to give grants and loans beyond the end of this year.
  An essential feature of the legislation which set up the S.I.B. was always that it was transitory—it was created to provide temporary assistance for the once-and-for-all re-organisation of the industry. And in relation to the size of the industry —in 1968 it accounted for about 1 per cent. of manufacturing industry—it must be said that it has received quite a disproportionate share of temporary assistance from public funds. Against this background, we do not see a case for singling out the shipbuilding industry as the continued recipient of a special payout from the taxpayer which can only weaken morale and lessen the incentives on management and employees alike to learn to operate competitively in the world market.
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  However, it would be unjust, as well as likely to lead to economic distortion, for shipbuilding to operate under significantly disadvantageous conditions compared with other manufacturing industry. Since it lacks the tariff protection enjoyed by other manufacturing industry, we have concluded that it is right to continue shipbuilder's relief which is equivalent to 2 per cent. of the contract price of a ship; the industry will continue to receive import duty drawback, and, as I announced to the House just before Easter, we are relaxing the rules about the import content of ships qualifying for credit guarantees in order not to hinder the use of imported steel where supplies on competitive terms cannot be obtained from the domestic market.
  Apart from the indirect help of the home credit scheme, to which I shall return in a minute, we do not consider that there is any justification on economic grounds for further special assistance to the shipbuilding industry as such—that is apart from assistance available to all industries operating or investing in development areas.
  In line with the policy of giving the industry an opportunity to readjust, we have accepted the proposals of the Northern Ireland Government for the future of Harland and Wolff. There is no doubt that this shipyard, which has some of the finest physical facilities in the world for building large tankers, has the genuine potential for coming out of its present, difficulties on a secure long term basis. The Northern Ireland Government will ensure that the company will be provided with funds to make it financially viable. Once these have been provided, the Northern Ireland Government have made it clear that there can be no question of further support if the company again gets into financial difficulties. I too wish to make it clear that the company will not he able to look for further support to the United Kingdom Government.
  Mr. Edmund Dell: Before the hon. Gentleman leaves Harland and Wolff, he will be aware that the Northern Ireland Government at Stormont yesterday introduced an industrial development Bill which makes it possible for the Northern Ireland Government to take an equity holding in private industry. Is the hon. Gentleman aware of whether it is the intention of the Northern Ireland Government to take an equity holding in

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  Harland and Wolff representing the level of the assistance they propose to give?
  Sir J. Eden: I am not aware of their intentions and what may be the exact motives lying behind that Measure.
  The House is aware of the Government's decisions as regards Yarrow (Shipbuilders) where we have taken action to safeguard the present orders and future programme of the Royal Navy. The separation from U.C.S. of Yarrow(S) will enable U.C.S. to concentrate on merchant shipbuilding and the intended capital reconstruction will enable the company to reflect the realities of their financial position. U.C.S. are confident of their future and I would emphasise that they have not asked for any new assistance from public funds.
  I mentioned the home credit scheme and said I would be returning to it. At the beginning of this year guarantees given or offered subject to the passage of legislation had brought the potential limit of liability to £600 million. This was sufficient to provide credit on full order books for the industry until mid-1972. The proposed increase to £700 million, together with forecast repayments of £25 million expected this year, should enable the industry to receive credit guarantees on all home orders on which fabrication will start by mid-1973.
  Some shipowners who have been offered guarantees subject to legislation now need to draw on guaranteed credit to meet their obligations under their contracts with the shipbuilders. If the House gives a Second Reading to this Bill I propose to enable these shipowners to draw on guaranteed credit by anticipating enactment of the Bill and giving guarantees in excess of the present statutory limit of £400 million. Guarantees given in advance of enactment will, of course, be counted against the proposed limit of £700 million.
  Mr. Anthony Wedgwood Benn: The hon. Gentleman is adopting the old practice of jumping ahead of parliamentary support. Is this not a nonsense? Of course he will get parliamentary approval to make these guarantees available, but they would have been available under the Act which he is repealing.
  Sir J. Eden: Because I am aware of this point I have given extra special emphasis to it in my remarks. Indeed, I paused at that point in my speech to give the right hon. Gentleman time to intervene.
  The answer to his substantive point is that I realise this is an unusual procedure. I thought it absolutely right to say this openly to the House. If the House does not agree with this course it will not be proceeded with. If the right hon. Gentleman is intervening to say that it is wrong for us to do it this way and that it should not happen, I assure him that I have taken note of his view.
  Mr. Benn: The hon. Gentleman is talking as if this were a debating point. It is not unusual, but illegal, to anticipate parliamentary approval. What I say in a supplementary intervention does not make it legal. I appreciate that he was underlining this point and I am grateful to him for that, but he has just repealed an Act which would have rendered legal the provision of these guarantees. He then comes before us with a smiling face, knowing that he has the good will of the House, to say that he proposes to do something which he has just made illegal by the repeal of another Act. This is an absurdity. Naturally the House wants to see the industry receiving these guarantees. The Industrial Expansion Act not being applicable until the expiry of the Shipbuilding Industry Act, there is a short overlap, but beyond that my point is wholly substantial.
  Sir J. Eden: It is not wholly relevant to the Industrial Expansion Act, and the right hon. Gentleman will be aware of what I said at the outset. These are bank advances and, as the right hon. Gentleman knows from what has already taken place, there are good grounds for a certain degree of optimism here. I have taken note of his remarks, and if he wishes me to understand that he does not think this is the way to proceed in this case in view of the circumstances—
  Mr. Dick Douglas: Before the Minister continues, as he is representing the Government at the Dispatch Box, may I ask him to be frank and indicate how much of the gap between the £400 million and £700 million has already been pre-empted

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  in terms of credit guarantees by the financial institutions?
  Sir J. Eden: I cannot give those figures. The decisions rest primarily with the Shipbuilding Industry Board first of all.
  Mr. Frederick Willey: This is an important matter and we must not overlook the responsibilities of the Comptroller and Auditor-General. What is the exact position? Either the Minister has the authority to do this or this legislation is a waste of time. Either way, he cannot say that because of apathy or this matter not having been dealt with he is taking this step, or that shipbuilding orders will be held up without this authority. It seems impossible for the House of Commons on a Second Reading debate to give the Minister authority to act in the way he is seeking authority to act.
  Sir J. Eden: I would accept the right hon. Gentleman's strictures if I had attempted to conceal something from the House, but I have certainly not attempted to do that. I recognise some of the points that have been made about this being a somewhat novel way of proceeding. It is with a desire to help the industry that this step is being taken, but I will return to the issue later in the debate if that will be of help.
  The proposed new limit of £700 million will help the industry to maintain its present order book, but it will not be sufficient to meet all applications this year for guaranteed credit. The Shipbuilding Industry Board in determining which applications to recommend will, therefore, have regard to the date of commencement of fabrication work in the yard.
  The Government are considering what should happen when the S.I.B. ceases to exist at the end of the year. We are taking into account the prospects for the shipbuilding industry and also the fact that, if the scheme is to continue, some change in the institutional and statutory arrangements would, in any case, be needed after 1971.
  Mr. Simon Wingfield Digby: My hon. Friend said that up to the end of 1973 there will be sufficient credit. He must know as well as I do that many of the big yards are trying to get orders for 1974. Is he really saying
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  to home owners that they might as well look abroad—is he trying to divert them abroad—because there will not be credit guarantees at home?
  Sir J. Eden: I was about to say that we are considering what should he the position when the S.I.B. ceases to exist.
  Mr. Dell Mr. Dell rose—
  Sir J. Eden: The British shipbuilding industry does not exist in a vacuum. It is part of the world shipbuilding industry and the form of any Government support in the future must have regard to what is happening abroad, as well as to the effect of prospective changes in this country in investment incentives and company taxation.
  I am not, therefore, in a position to give any categoric assurance today about the terms on which finance for shipbuilding may be available in future.
  Mr. Dell: We want to be absolutely clear about this extremely important and worrying statement which the Minister has made. As the hon. Member for Dorset, West (Mr. Wingfield Digby) pointed out, British shipowners are wishing to place orders now, and that would take the figure beyond £700 million. The Minister has himself said that the present decision involves rationing by the S.I.B. Are the Government really leaving the British shipowner and shipbuilder without any guarantee as to the future in respect of credit?
  Sir J. Eden: I was saying that we are now having to look to the future beyond the time when the existing vehicle comes to an end.
  Dame Irene Ward: If my hon. Friend is just beginning—we are not quite sure about this—to look to the future, may we know when he started looking to it and how long he thinks it will be before he catches up with the future?
  Sir J. Eden: Perhaps hon. Members will give me the opportunity of repeating the remarks I made before this last set of interventions, because it was particularly important and may go a long way to answering the questions which are now being put to me.
  I said that we had to look to the future and have regard to what was happening

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  abroad as well as to the effect of prospective changes in this country in investment incentives and company taxation. I went on to say that I was not in a position to give any categoric assurance about the terms on which finance for shipbuilding might be available in future.
  The Government recognise the importance for the industry of assured credit facilities. I hope to be able to make a fuller statement about the arrangements for shipbuilding credit before the Summer Recess.
  Mr. Arthur Blenkinsop: Surely the country and the shipbuilding industry were told that a major statement would be made on this occasion. They have made clear their interest in the future and the financial position of the industry. Is the hon. Gentleman now saying that after all the months of waiting for this Bill he cannot say anything more definite than what he has just said?
  Sir J. Eden: The hon. Gentleman is underestimating the significance of what I have said. Perhaps when he has studied my statement he will moderate his references to it and take comfort from it.
  Capital grants and loans will continue until the end of the year and will cease with the dissolution of the Shipbuilding Industry Board. Shipbuilders relief and import duty relief will be carried on. The credit rules on steel imports have been relaxed. The credit ceiling is being raised by the Bill, and a further statement on future credit facilities will be made before long.
  Taken together, these measures add up to realistic support for the industry which should give it every opportunity to improve its efficiency and to prosper. Despite inflation, it is possible for an efficient shipbuilder with good labour relations to flourish—as witness the case of Austin & Pickersgill, which has not received one penny in capital assistance from the Shipbuilding Industry Board. The industry as a whole has healthy order books. The extension of the home credit scheme to £700 million shows the potential demand for ships for United Kingdom registration. There are also profitable export orders to be obtained
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  and, indeed, the industry could well do more in this direction.
  But the fortunes of any particular company must depend on its own efforts, skill and judgment. No level of Government support can guarantee success. The industry, however, now has the opportunity to regain its independence and add further honour to its long and distinguished past. I ask the House to approve the Bill.
  4.43 p.m.
  Mr. Edmund Dell: The hon. Gentleman has just announced the Government's virtually total disengagement from the shipbuilding industry. Unlike the Governments in virtually every other shipbuilding country, the British Government have decided to disengage from this industry, which is vitally important to our balance of payments, vitally important to our own shipping industry and vitally important to the British engineering industry. They are abandoning the industry entirely to market forces. That is what their policy amounts to. That is what it is in all essentials.
  The hon. Gentleman said that perhaps we would find more comfort in his statement when we had an opportunity to study it. I must protest against the delay in making even this statement to the House. The Bill was introduced on 12th February. On 18th February the Under-Secretary of State said in Committee on the Industry Bill that the Second Reading of this Bill would be taken as an opportunity for a major statement of policy on the shipbuilding industry. We have been waiting two months since then. It even appears now that on the subject of credit guarantees we shall have to wait until the summer Recess.
  Even so far we have waited two months. Yet I remember the preaching we used to have from hon. Members opposite about the dangers of leaving industry uncertain. For two months the shipbuilding and shipping industries have been left uncertain by the Government as to what their intentions are—and for no reason at all. Everything which the hon. Gentleman has said today could have been said two months ago. If the Second Reading of this Bill could not have been fitted in before, then the hon. Gentleman's statement could have been made separately to the House. But for

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  two months the Government have been prepared to leave these two vital industries in uncertainty as to what they intended, and today we find that even now they have not fully worked out their policy.
  Mr. Blenkinsop: In addition, we have had no kind of statement on the repair side of the industry, although we understood that we were going to get that as well.
  Mr. Dell: I agree. I was coming to that point. Only yesterday the Under-Secretary of State said, in answer to a Question, that if only we would wait until today we would have a statement on ship repairing. I do not know whether it is his intention to make that statement in his reply tonight, but if so it means that we shall not be able to debate it. That would be an extraordinary situation. We were assured that ship repairing was also under consideration by the Department, that we were to hear the Government's intentions about it and that, apparently, we would be able to debate them. But we shall not be able to debate them if the statement on ship repairing is to be made at the end of the debate instead of, as would be proper, at the beginning. The attitude of the Government is extraordinary and deserves the condemnation of the House.
  In relation to credit guarantees, for two months, apparently, the Government have been saying to themselves, but not to the House, "Give us the Second Reading of this Bill and then we will go through the processes of raising the limit of credit guarantees to £700 million." During these two months, the Government could have had their Bill. They could have enabled themselves to do what they propose to do, legally instead of illegally, taking advantage of the consideration of the House towards the industry. But their programme has been taken up with far less important and far more damaging Measures in the interval. For two months legislation which could have been got through, and which is vital to enable these guarantees to be given, has been held up. Now the shipbuilding and shipping industries are left uncertain as to the future intentions of the Government towards them.
  Dame Irene Ward: Before the right hon. Member for Birkenhead (Mr. Dell)
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  proceeds with his speech, I would like to know from my hon. Friend whether the shipbuilders, ship repairers and ship owners have been told all this information and what their views are.
  Mr. Dell: The hon. Lady cannot ask me for that answer.
  Dame Irene Ward: No. I am asking my hon. Friend.
  Mr. Dell: There are so many leaks from the Government, however, that it is quite possible that they have been told before the House has been told. But the hon. Gentleman has made his speech and has provided them with all the information that they are going to get from the Government for the next few months. The hon. Lady must rest on her disappointment and take the matter up with the Government in the vigorous way for which she is well known.
  The Government have decided, in effect, to revert to the pre-Geddes policy of allowing market forces to dominate the future of the industry. The industry will therefore be placed in a position entirely different from that of virtually every other shipbuilding industry in the world. What has happened to the industry since the war has lessons for industrial policy in this country generally. It shows the effects of the policy to which the Government are now reverting. After the war ours was the leading shipbuilding industry in the world. It was a growth industry, with a mounting demand for ships all over the world. Yet it was abandoned to the operation of market forces. It was abandoned to competition mounted from Japan with other than market forces operating there. The Government in this country were prepared to allow this growth industry, in which we had a world lead, to lose its competitive position year by year, even though, quite obviously, it could not, faced by the international competition it had to deal with, maintain its competitive position alone.
  That was the situation up to the Geddes Report. The industry was left to market forces, to which we are now to revert. The result was a catastrophe for the industry from which only the Geddes Report and the Geddes policy, implemented by the last Government, rescued it.
  The Under-Secretary of State for Trade and Industry (Mr Nicholas Ridley): What the right hon. Gentleman says does not square with the facts. The industry's share of the market, indeed its production, continued to decline even under the Geddes policy.
  Mr. Dell: I shall deal with the Geddes policy and remind the hon. Gentleman of the successes achieved under it. But, having allowed the industry to deteriorate for 20 years in face of international competition, it was not reasonable, especially if internationally subsidies were to continue, to expect that the industry could be rescued from its predicament in four years.
  The Geddes Report was based on the presumption, explicitly stated in the Report, that it would be possible to withdraw support at the end of 1971, although I think it was optimistic in that, but on the assumption that something was done internationally about subsidies. Nothing, or virtually nothing, has been done internationally about them. The competitive position, in its reality, remains as it was when the Geddes Committee reported.
  The Government have contented themselves with blaming management and workers, as the Minister for Industry did today. Because the industry cannot compete in these circumstances, or cannot regain its share of the market, we say that it must be management and workers who are to blame, whereas, although a great deal more could be done by management and workers, in this competitive situation what is needed is Government help.
  We shall not get anywhere by attempting to flagellate management and workers for the fate which the shipbuilding industry has suffered through the operation of market forces. Criticism of management and workers is self-fulfilling. We leave an industry to face this type of international competition, and it fails to meet it. There is not adequate investment and there are inadequate increases in productivity. Management is not recruited as it should be, and the fear of redundancy makes workers less cooperative with proposals for increased productivity. Though one result of the Geddes Report was that there was a great improvement in the willingness of trade unions in the industry to co-operate in schemes for increasing productivity.
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  Associated throughout with the shipbuilding industry, which was abandoned to market forces and which elsewhere in the world is assisted, was the shipping industry—again an industry with a world lead, again left to market forces and again left relatively to decline until investment grants were introduced when, oddly enough, the industry began to regain something of its relative position in the world. The Government have withdrawn investment grants. The Rochdale Report recommended their withdrawal but said that equivalent assistance should be given. It has not been given. Assistance to the shipping industry has been considerably reduced. The consequence is serious for the shipping industry, as leaders of it have pointed out. It is also serious for the shipbuilding industry because necessarily it will have an effect on orders placed by British shipowners in British yards.
  The shipping industry has throughout its history operated a policy of placing orders where economically it could best place them. A very large proportion of its orders has been placed abroad, which is understandable from its point of view. No other national shipping industry with a major shipbuilding industry in its own country has followed that policy. Whether the reason is that they were not permitted to follow such a policy is an interesting subject of speculation. If the British shipping industry had been prepared to give the shipbuilding industry the guarantees of future orders which were given in, for example, Japan, where 100 per cent. of Japanese shipping orders go to the Japanese shipbuilding industry, or in Germany, where 80 per cent. of orders go to the German shipbuilding industry, it would have been interesting to speculate whether we would have today a shipbuilding industry better capable of satisfying the requirements of British shipping. This has been one of the factors which have led to the relative decline of the British shipbuilding industry.
  Hon. Members opposite try to emulate the principles of Adam Smith. But even Adam Smith would not have allowed this to happen. He, being a good Scotsman, believed that the power of the State should be used to support British shipping. He was not nearly so much in favour of disengagement as hon. Members opposite.

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  In this way, these two growth industries were allowed to decline in face of international competition. Then, in 1965, the Geddes Committee was appointed. The Geddes Committee and the policy which followed its Report enabled the industry to survive, provided the industry with valuable additional resources which are today enabling it to get important orders which it would not otherwise have been able to get, has enabled it to increase its orders to the highest figure for many years and enabled it last year to achieve the highest volume of completions it has achieved for many years.
  The Secretary of State—and he has explained his absence today to me—is fond of saying, and the Minister for Industry repeated today, that money provided under the Geddes policy has gone down the drain. One result of the Geddes policy was the recent Shell tanker order which would not have been placed in this country without that policy. The value of orders like that to our balance of payments far exceeds the amount of money spent as a result of the Geddes Report, and the policy will bring further orders to the yards which will be of value to Northern Ireland and to our balance of payments.
  But, following the Geddes Report, the industry has not succeeded in dealing with its problems in two respects; and, in the face of international competition, it could not have done. First, it has not made itself profitable, and, secondly, the level of investment, other than the investment supported by Geddes, has continued low. We know about the low level of investment because we have the investment grant figures, which show that during the years since the Geddes Report privately financed investment has been very low. It will now probably be lower because of the withdrawal of investment grants. Incidentally, one of the advantages of the investment grant system is that we know facts like that, whereas under the Government's tax allowance system we shall not have these figures.
  We need today not another Geddes Committee but a decision by the Government on what share of a growing world market the United Kingdom industry should aim at, which the Government must achieve by means of large-scale investment assistance. On the other hand, if we should get out of this industry, as
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  the Government apparently believe, then the Government should say so. The statement of the Minister for Industry today merely confirms the indications that that is what the Government intend. He indicated that there will be no continuing support for the industry other than possibly further credit guarantees. We already knew of the demise of the Shipbuilding Industry Board. We know about the abandonment of investment grants, which, in an industry like this which is unprofitable, means that there will be no investment incentives at all. There is the end of the regional employment premium. In these circumstances I do not understand how the Government can expect the industry to be able to compete in world markets.
  I attribute no value to the exordium which the Minister has given us today that if only the industry would pull up its socks it could compete against the subsidised competition it faces abroad. This is not an industry which we can leave to market forces, we have lost far too many years, competition is loaded against us, the industry is still too weak, and if inflation continues at the present rate, even the escalation clauses will not save its profitability.
  The hon. Gentleman said that we must have regard to what is happening abroad. Let us look at world competition in the industry. Japan has 50 per cent. of the world market. Their shipbuilding industry is more efficient, which, given the investment that has taken place in that industry over the last twenty years, is hardly surprising. In addition, Japan has an undervalued currency, The Times, in a review of the Japanese shipbuilding industry a few weeks ago, said that the threat of yen revaluation haunts the industry, and I can understand that. An undervalued currency is a subsidy from the great mass of the population to its exporting sector.
  Japan is putting in eight new yards, which will raise its capacity from about 10 million gross tons now to 15 million gross tons by 1975. This is being done with the assistance of central and provincial governments. What estimates have the Government made of forward demand for shipbuilding in the world? According to estimates made by the British shipbuilding industry, these eight additional yards will be capable of raising Japan's 50 per cent. share of world

  1399
  shipbuilding to more like 60 per cent. Is that confirmed by the Government, or do they have different figures? It looks from these figures as though Japan is not even content with the record so far achieved but is going for an even larger share of the market.
  Let us look at the European position. There are overt subsidies in France and Italy. All over Europe there are yards maintained with Government help, despite financial crisis. Götaverken has had a financial crisis but has not gone out of existence. Burmeister and Wain has had a financial crisis but has not gone out of existence. Both are getting assistance from their Governments. Only the British shipbuilding industry is to be abandoned. There is also the other factor which I have mentioned of the greater loyalty of national shipping companies to their own shipbuilding yards.
  Given the history of the industry, given the nature of the international competition, given the freedom of British ship owners to order abroad, and given the abolition of investment grants and the regional employment premium, how can one reasonably hope that adequate investment from private sources will sustain a viable shipbuilding industry in this country? The only possible source of adequate investment is the State. I know that the Government's position is, as the Minister for Industry said, that they will not feed inflation by subsidies and grants. They apparently believe that the only effect of the implementation of the Geddes Report was to feed wage inflation in British shipbuilding yards. This is an extraordinary point of view for a Government which have decided to fight wage inflation through the public sector. The sector that can in the last resort rely on support from the Government is the sector which the Government have chosen to fight wage inflation.
  One of the new arguments for taking over the commanding heights of the economy—and the Government might consider this—is to help them fight wage inflation. But apparently in the shipbuilding industry assistance merely creates wage inflation. To give companies some guarantee of a future existence creates wage inflation. It depends on the method of providing Government aid. In the history of the shipbuilding industry there
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  have been too many Government rescue actions. When people are rescued from time to time they come to expect the next rescue. There has been too little consistent determination by the Government through aid to maintain a viable shipbuilding industry. Had that been the policy before Geddes as well as during Geddes we would have seen investment, higher productivity and a competitive shipbuilding industry, and rescues would not have been needed.
  So there is this vital question for the Government, and the Government have decided to abandon the British shipbuilding industry to market forces, and have taken this decision at a time of mounting unemployment generally and in the development areas. They have told us today that if there is a danger of collapse in particular shipbuilding companies because of the unprofitability of orders which they have taken on in the last few years, they will take no action, despite the current levels of unemployment in development areas. The Minister for Industry has made an amazing statement today against the background of the most recent unemployment figures and their trend.
  I believe that this policy is wrong. The Government should support the shipbuilding industry and undertake a continuing commitment to such support. The question is whether, where companies are so dependent on Government support and there is a prospect of that support being required long term, there is any point in continuing the forms of private ownership. If Government support is given, the reality must be strong Government control to ensure that we achieve the objects of the support—higher productivity, adequate management, greater competitiveness. There is, therefore, a strong argument for bringing the form into line with what must be the reality by means of public ownership. The Government have decided, as the Minister for Industry has told us today—
  Sir J. Eden: Is the right hon. Gentleman saying that it is the policy of the Opposition that the shipbuilding industry of this country should be nationalised?
  Mr. Dell: I am giving an expression of my view that if finance for particular shipbuilding companies to make them competitive has to come from the Government, there is a strong argument that

  1401
  such companies should be taken into public ownership, and for the form to be brought into line with the reality which is strong Government control of shipbuilding companies that require Government support.
  Sir J. Eden: Is the right hon. Gentleman giving it as his personal view that the industry should be nationalised, or is he speaking officially on behalf of the Opposition from the Dispatch Box and saying that the British shipbuilding industry should be nationalised?
  Mr. Dell: The hon. Gentleman is not in a position to argue, following the Government action on Rolls-Royce, that there are not situations in which on merit public ownership is required. I referred in a previous intervention to the Northern Ireland Government introducing the Industrial Development Bill which permits the Northern Ireland Government to take equity shares in private companies. There too, apparently, it is increasingly realised that public ownership is necessary to establish certain industries on a competitive basis. I believe that where an industry or a company is so dependent on Government support as is much of the shipbuilding industry, it should be publicly owned. The Government, on the contrary, have decided to abandon the industry, a decision which takes no regard of the employment consequences. They are prepared to allow the industry to die.
  We shall give a Second Reading to the Bill because it will enable certain further orders to be placed with the industry, and it is important that those orders should be placed, but we regard the statement of policy which has been made today as utterly calamitous for the industry and we utterly reject it.
  5.10 p.m.
  Mr. Simon Wingfield Digby: The right hon. Member for Birkenhead (Mr. Dell) had some responsibility for this industry when he was a member of the Labour Government, and, therefore, we listened with interest to what he said. Indeed, he said a number of things with which I would agree, but I would not go the whole way with him in many of his remarks. The fact that he attributed the revival of the shipbuilding industry to investment grants was far too broad. There have been wide-
  1402
  spread abuses of investment grants, and, though they have probably helped the shipping industry more than others, I am sure that it was right to do away with them.
  Mr. Dell: The hon. Gentleman says that there have been widespread abuses of investment grants, and I do not deny that in the case of the shipbuilding industry. Will he ask himself whether similar abuses are not possible in regard to tax allowances?
  Mr. Wingfield Digby: Abuse is always possible but I believe that investment grants particularly lend themselves to abuse.
  I did not agree with what the right hon. Gentleman said about the Geddes Report. When one looks at the implementation of its recommendations over the years, it can be seen that results have been most disappointing. One of the most disappointing things is the way in which money which was to have been available under Geddes in the way of grants and loans has been spent. It would be a brave man who would not say that the Upper Clyde had had too much of the money and that if that money had been spent in other areas it would not have been done very much more for the industry.
  I was amazed to hear the right hon. Gentleman say that public ownership would solve the problems of the industry. If a large amount of money is spent on an industry there must be a degree of public control, but the record of public ownership has not been one which I would wish to see followed in the shipbuilding industry.
  Although the Bill deals with a somewhat narrow point of Government guarantee for credit facilities, it also raises wide issues about the future of shipbuilding and its profitability. An article in the Economist Weekly on 27th March entitled "Should Europe Build Ships" pointed to the difficulties of ourselves and our competitors. The difficulties of the British shipbuilding industry can be regarded as typical of the problems of other industries, though perhaps in a more acute form. Lack of profitability, price inflation, fixed price contracts, labour relations and high wage claims are problems which are to be found in many industries other than shipbuilding, but since shipbuilding is an assembly industry which takes orders

  1403
  covering a long period ahead it has been particularly hard hit by these factors.
  I should like to stress that demand for shipping is very buoyant indeed. World demand for shipping has increased, and is increasing. Secondly, our shipbuilding competitors, despite the subsidies which they receive, also have their difficulties. Therefore, we should not get too depressed about the difficulties of our own shipbuilding industry, although they may seem a little more acute than those faced by some of our competitors.
  The Bill concerns home owners' orders; it has nothing to do with orders from overseas, which can be financed in other ways. It is, therefore, relevant to notice the degree to which the shipbuilding industry of Britain has become dependent on home owners. According to the latest figures for 1970, only 20 per cent. of compensated tonnage orders were foreign, and in regard to gross registered tonnage the figure was 18 per cent.
  Dame Irene Ward: Perhaps my hon. Friend would add that Swan Hunter on the Tyne has received a terrific fillip because it has just obtained an order to build a Norwegian liner, and this has helped us in our plans for the future.
  Mr. Wingfield Digby: That is very good news indeed, but the fact remains that home owners were responsible for 80 per cent. of the orders in 1970. If we look at the total order book the picture is very much the same: 22 per cent. of compensated tons only ordered from abroad, and in regard to gross registered tonnage the figure is 25 per cent. Therefore, we must see how far future orders will continue to come from our home owners.
  The trend which has led to foreign owners ordering away from Great Britain began some time ago. I remember that many years ago when I had some responsibility for the shipbuilding industry the tradition among Norwegian owners and others was to order in this country. Unhappily, that tradition has declined. As recently as 1966 65·7 per cent. of orders came from abroad; in 1967 it had fallen to 33 per cent. and by 1968 to 18·3 per cent. Therefore, our shipbuilding industry is largely dependent on home owners.
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  We have already heard from the Minister, in a somewhat disappointing statement so far as I was concerned, that the sum of £700 million will not be sufficient to meet all the orders which home owners might be willing to place in 1974 and after. This is bound to make those owners take their orders overseas where there are greater incentives open to them, such as better credit terms, than we are able to offer in this country. The ceiling in the original Bill, which was dropped a year ago because of the General Election, was £600 million. The figure is now £700 million but, according to my calculations, that is only six months' worth of orders and, therefore, is less generous than the original Bill.
  A good deal of uncertainty has been created because shipbuilders have been unwilling to order components and steel until they were sure about the credit position. They have been uncertain about the final cost and delivery dates, and this has made it more difficult for them to plan future voyages and the profitability of ships.
  Another factor which has altered since the original Bill is that Bank Rate has now been cut to 6 per cent. while at the same time the rate of interest allowed to banks has gone up from 5½ per cent. to 7 per cent. Therefore, the terms have increased enormously in favour of the banks. I do not understand why the banks are reluctant to advance this money when they can get 1 per cent. above Bank Rate for it. It could be argued that there is no great advantage in the Government guarantee since the owners can go to the market and get the favourable terms of reduced Bank Rate. That may be so, but I cannot understand the reluctance of bankers to lend their money on terms of this kind, all the more so at a time when we read that export credit guarantees have increased so much. According to my figures, they were up 17 per cent. in the last quarter of last year. I should have thought that this cause was just as worthy in terms of foreign exchange as guarantees for export credits.
  I now come to my comments on the Geddes Report. Ever since I was first associated with the industry, I have believed it to be one of the greatest complexity. It was probably impossible for any outside committee to come into the

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  industry and make the correct recommendations. Looking back, we can all see that our doubts about the main recommendations were more than justified. My hon. Friend the Under-Secretary of State has more than once drawn attention to the emphasis on shotgun weddings. The right hon. Member for Bristol, South-East (Mr. Benn) is the patron saint of shotgun weddings. He always seemed to want them. But they have not worked out at all easily, especially on the Upper Clyde, and if some of the other proposals between Northern Ireland and the North-West had been implemented, the position would have been even worse. This is one of the reasons why too much of the Geddes money was spent in the wrong place.
  Mr. Douglas: Will not the hon. Gentleman concede that paragraph 276 of the Geddes Report says:
  "During the past ten years the industry has spent over £60 million on land, buildings and new plant and machinery. It appears to us, however, that little if any attempt has been made before investing new capital to estimate the return in terms of increased profit or reduced costs…"?
  That was the industry under private enterprise.
  Mr. Wingfield Digby: I do not see what that has to do with shotgun weddings. Some of the amalgamations could have been encouraged and would have been good. But there is no doubt that the action of the last Government in forcing them on people has done, and will continue to do, a great deal of harm. The mere fact that they did it with the best intentions does not exculpate them or put them in the position of saying that Geddes was wonderful in every respect.
  Mr. Albert Booth: The hon. Gentleman is a fair man. He referred to my right hon. Friend the Member for Bristol, South-East (Mr. Benn) as the patron saint of shotgun weddings. Surely he will agree that in the case of the shipbuilding industry my right hon. Friend implemented a measure which had been agreed within the industry. He was not responsible for foisting the Geddes policy on the industry. The industry had agreed to it.
  Mr. Wingfield Digby: The hon. Gentleman will remember that Geddes
  1406
  made definite recommendations, one of which would have meant that shipbuilding in his own constituency would be joined to that in Northern Ireland. I do not know whether he thinks that that would have been a good plan. I think his constituency would have suffered.
  Then the Geddes Report dealt with machinery and components. Here again, its recommendations have not worked out very well. I find it difficult to attribute blame, though I feel that the Shipbuilding Industry Board has proved to be a disappointment. Certainly I expected more from it than has been achieved.
  Although the difficulty about industrial relations was recognised by Geddes, undoubtedly that has also done a lot of harm. In support of that assertion, I use not my own words but those of the article in The Economist:
  "…repeated rescue operations have given shipyard workers the impression that the taxpayer will probably pay for whatever unreasonable wage demands they make."
  I think that that comment is justified, and the right hon. Member for Birkenhead came very near to agreeing with it.
  Another point that right hon. and hon. Members opposite must remember when they claim credit for Geddes is that they ignored the most important of all the Committee's recommendations, which was that shipbuilding should once again have a cheaper rate of steel, as it did in the old days. I have said this many times before in this House, and I say it again. I am happy to congratulate the Government on holding down the price of steel, and my hon. Friend is to be congratulated for altering the position about getting cheaper steel from abroad. Steel is a very important part of every ship, and it is sad that this important provision of the Geddes Report was ignored for so long.
  What are the prospects today, after Geddes? World demand is great. In our yards we have great skill, and we have certain skills of management. I have always believed in our doing the tasks at which we excel. Great Britain is good at shipbuilding, whatever the temporary difficulties. For that reason, certain help is justified. The provision of this guaranteee does not cost the Government a penny. Even the Bill says that it will not cost any money. I do

  1407
  not see why the bankers should not put up the extra money to turn the Government's proposal into a full revolving credit.
  In a highly competitive world it is difficult to find an industry which does not have difficulties. The shipbuilding industry is a concentrated one, and unemployment has severe social consequences. I believe that there is a place for the British shipbuilding industry in the world today, although our share of world markets has been reduced so seriously. In the few cases where we have the kind of equipment which can be compared with that of the Japanese—for example, at Harland and Wolff—I hope we shall be able again to show the world, but it can be done only with the co-operation of all sections of the industry, including the workers.
  I hope that my hon. Friend will lose no time in considering the home owners, making up 80 per cent. of our market, who contemplate ordering ships for 1974. As a result of what has been said today, I fear that they will be inclined to look abroad more than ever. Our shipping industry has pulled up. It has shown itself more enterprising than it was after the war. It is going in for bulk carriers and container ships in advance of the world. It is a very competitive industry. At 2 or 3 per cent., its return on capital is very small. It must be able to order in the cheapest place. I am sure that most owners would prefer to order at home. and I still believe that it can be made possible for them to do so. For those reasons, I hope that my hon. Friend will complete his further look at the industry as rapidly as possible.
  5.28 p.m.
  Mr. Frederick Willey: I begin by declaring an interest. My constituency probably contains the greatest concentration of shipyards in the country.
  It is pointless for the Minister to talk about shipbuilding representing only 1 per cent. of British industry. Shipbuilding is concentrated in three or four districts, and in those districts, obviously, it is of great local importance. Incidentally, my constituency contains the best and most successful yards in Britain in terms of management and men, though
  1408
  they have not the resources of other yards. The Minister mentioned Austins, and he will be delighted to know that the company is celebrating the centenary of the SD14.
  I mention these local factors because there are two that I want to emphasise. The Minister said that Austins has received no aid. In fact, the Sunderland shipbuilders are very independent. They are reluctant to take aid. Compared with other shipbuilding districts in Britain, they have had practically no aid.
  I also think that it is unfortunate that the operations of the S.I.B. have been too subject to political pressures. If we looked at the industry coolly and rationally, probably more aid would have been concentrated on areas like Sunderland where the yards have been so successful. Indeed, we have helped other yards. The best thing that was done about U.C.S. was to get Stan Douglas from Austin Pickersgills. I mention this to draw the Government's attention to the warning given by the S.I.B. in its last report, when it said that
  "large sectors of the industry will continue to require access to capital which they will not be able, in the near future at any rate, to generate in sufficient amounts for themselves."
  The S.I.B. said that this was a real risk and warned us that this year, the period we are just in, the S.I.B. will find itself unable to deal with some of the applications made to it.
  I have mentioned Sunderland's background because I think it may require aid. I want an assurance from the Government that any such request will be looked at rationally and realistically and that Sunderland's claim, if it should be made, will be considered against the background of the aid which has been given to competing shipbuilding districts, because Sunderland is facing competition not only subsidised from abroad but in this country, too. The Sunderland yards are not prepared to be out-subsidised by the other British yards which have been so heavily financed.
  The second local factor which I emphasise is that, like most shipbuilding districts, Sunderland is in a development area. I have acknowledged in previous debates that Sunderland is now a special development area. At the moment it has male unemployed at 9· per cent., but it has had male unemployment bumping

  1409
  10 per cent. for three years. Shipbuilding has to be considered in this context.
  It is no use the Government telling me that Rolls-Royce will be considered in the interests only of Rolls-Royce. As Rolls-Royce has been nationalised we must pay attention to the fact that the Rolls-Royce factory in Sunderland is vital to maintain even the present rate of employment.
  The Minister referred to labour relations. I should like to emphasise one particular consideration. For many years shipbuilding has been a contracting industry. Our Sunderland yards have been making 300 to 350 workers redundant every year. A lot of nonsense is talked about the shipyards. There has been heavy rationalisation in the yards, and this has taken place in areas of heavy unemployment. In these circumstances, labour relations are frightfully difficult. We had a disastrous strike at Doxfords for 13½ weeks last year. That is why I have mentioned the difficulties which we may be facing.
  The Minister must appreciate that asking men to accept the rationalisation of their industry within the context of heavy unemployment is a real difficulty. Other factors affect the matter. Sunderland has redundancy among miners, too, but one should think of the terms which they get on redundancy. I mention this because these matters have to be considered as part of regional policy.
  The tragedy about shipbuilding is the need—which we have had for years—for an expansionist attitude in the industry. Consider the present position. We have an order book to discharge facing serious cost escalation. Think of the incentive that there ought to be to speed production, if only to mitigate prospective losses. It is not altogether a good thing to have accumulated this order book. It carries liabilities.
  I have previously made clear my position on steel prices. The steel price is 20 per cent, of the cost of a ship. We should be doing all that we can to hold down price increases as we have done previously, but it should be done in the context of a prices and incomes policy. We should mitigate prices in the nationalised industries. We should do what our competitors would do in the present situation; we should see that the British shipyards, to encourage them to speed
  1410
  production, by one device or another receive steel more cheaply than at present.
  I should like to pay tribute—I am surprised that no one has done so—to Sir William Swallow. Sunderland has been fortunate. It has not troubled the S.I.B. greatly. However, the industry recognises that Sir William Swallow has done a very good job. But the job was only a holding operation. The melancholy fact is that in broad terms Geddes has been only a partial success. It has been a partial failure. We are reaching the dates set down by Geddes but we have no prospect of reaching the target of 2¼ million gross tons or 12½ per cent. of world output. As has been pointed out, the output is just over half that and there are no signs of it rising. I am not suggesting that the solution is easy or that it is stereotyped, but we must consider the British shipbuilding industry in the context of world shipbuilding.
  My right hon. Friend the Member for Birkenhead (Mr. Dell) mentioned Japan. When I last spoke in a debate on the shipbuilding industry a couple of years ago I pointed out that Japan was then producing six times the shipping that we were producing. The amount is now nine times higher. Two years ago I gave the world output figures. I said that we should probably be pipped for third place by Sweden. We are now a poor fourth, and Sweden is well above us. But France and Spain are on our tail. Spain has made a spectacular increase. These countries are not going in for shipbuilding to carry losses. There must be some attraction in building ships.
  Our export figures have been mentioned. They are the worst for five years. But what is appalling and disastrous—this is the crux of the debate—is that, despite the aid which the Bill will give, British orders from abroad worsen from year to year. It is fantastic, compared with 20 years ago, that last year new British shipping built abroad was far greater than the total output of British yards. This is not a matter of nationalisation. That is irrelevant but we must recognise that other countries have, and pursue, a national policy for their national industries of shipping and shipbuilding.
  Japan's yards have, in our terms, a fantastic order book which has put them

  1411
  in an entirely different league. Yet, despite that, 100 per cent. of Japan's home orders go into Japanese yards. This does not happen by accident.
  The Japanese merchant fleet has multiplied five times in the last 10 years. In 1969 it overtook the British fleet, and now it is 1 million tons larger. All that has been built in Japanese yards. The Japanese have an entirely different national attitude to their national industries. It has nothing to do with nationalisation. It is a matter of national will and determination.
  That attitude is to be found not only in Japan but in other shipbuilding countries. I have mentioned France. France did not have a Geddes Report. People there recently looked at their industry, and there has been a thorough reorganisation of the basic principles of shipbuilding in France. The result is that since the beginning of 1970 France has topped the list of countries building specialised shipping. She builds more oil tankers than we do. She has an order book as big as we have, but the important thing is that in France they have looked rationally at the market, decided what they could take, and have got on with it. All this has not been done by accident. It has been the result of a concerted national effort, and it is this attitude that we have to recognise. We must adopt a similar approach, and what I am saying about shipping and shipbuilding applies to other industries, too.
  Geddes—and it should not have been put any higher—was a salvage operation. It is no good saying to the shipbuilding industry, "We have given you a launching pad, off you go". We must see what other shipbuilding countries have done, learn from them, and then show equal skill, sense and determination here.
  I intend to be brief. Nothing has been said about marine engineering. Every year I read with melancholy the S.I.B. report that no progress has been made and that the position is thoroughly unsatisfactory. Our marine engineering industry should look at other countries to see what is happening. No mention has been made of ship repairing, which is facing major difficulties.
  What we want is a national will and spirit to settle the problem. I am dif-
  1412
  fering from my right hon. Friend about nationalisation, because this is not a simple matter. This must be a joint operation. At the moment we are considering the banks providing cheap credit, with Government guarantees, discriminating in favour of an industry. This is an industry upon which my constituents depend to a great extent, and I support this, but the problem is complex. I am not saying that if shipbuilding and shipping are considered, we must not consider other industries, too. What I am saying is that however great the difficulties, we must face them.
  It will not be easy to evolve a pattern for dealing with difficulties in this industry. If one considers the history of Japanese shipbuilding, one realises how complex it can be—at one time it was supported by a levy on sugar. Let us show the kind of determination that has been shown by the Japanese, not only in shipbuilding but in shipping. They have now shown such a determination to go ahead in shipping that Liberia had better watch out.
  I am disappointed at the Government's attitude. I do not think that they can abnegate their responsibilities. Shipbuilding and shipping are international industries. We must learn from what has been done in other countries, and do the same kind of thing here. If we do not, then not only these industries but the whole country will slide into trouble. Probably it has slid too far already. What we need above all else is a national will. The Government cannot leave somebody else to deal with the industry; they must give a lead and see that people pull together. For years I have argued that this ought to be an expansionist industry. What we want to see in the industry again is spirit and determination to deal with the problems which face it.
  5.45 p.m.
  Mr. Stanley R. McMaster: I denounce, straight away, the air of depression which was so apparent in the speech of the right hon. Member for Birkenhead (Mr. Dell). I welcome the Bill. As the right hon. Member for Sunderland, North (Mr. Willey) said, the shipbuilding industry has a great future. I, too, have a large shipbuilding yard in my constituency. During the last 10

  1413
  to 12 years this yard has been modernised, and it now has a large building dock, one of the largest in the world, and certainly the largest in Europe. New fabrication sheds are nearing completion, and when they are in operation they will place this country in the forefront of world shipbuilding.
  The right hon. Member for Birkenhead does no service to the industry when he calls for the nationalisation of the shipyards. One has only to consider what has happened in other industries that have been nationalised. For example, the steel industry, to which the right hon. Gentleman referred, has had seven different political bosses during the last five years. What good does it do an industry to bring it under public control and change its management with every change of Government?
  Mr. Dell: The hon. Gentleman is a Northern Ireland Member who frequently talks about the situation at Harland and Wolff. In fact, he has been described as the hon. Member for Harland and Wolff. Perhaps he will comment on the Industrial Development Bill introduced yesterday. Does he know whether the Northern Ireland Government intend to take a shareholding in Harland and Wolff, a company to which they are giving financial assistance, and to which they are likely to continue to give such help?
  Mr. McMaster: The right hon. Gentleman has anticipated my speech. If he will forgive me, I shall deal with that issue in due course.
  I welcome the Bill, and I am glad that the limits are being increased. This is the second increase in the limits provided for in the 1967 Act. These are reforms which I and the stalwart few who always attend these debates have advocated for many years. The whole purpose of the Bill is to place the British shipbuilding industry on a par with shipbuilding industries throughout the world. Considerable sums of money are tied up when a ship is being built in German, Swedish or Japanese yards. Five years may elapse from the placing of an order to the delivery of the finished vessel. The building of the ship often has to be financed at gruelling interest rates. For many years interest rates abroad have
  1414
  been lower than in this country. Bridging the gap and providing a guarantee has not cost the Government one penny. They have been at risk, but they have not lost anything through having to provide these guarantees since the provisions for them were introduced in 1967.
  Therefore, with the expenditure of the taxpayers' money, the Government can give a guarantee which has enabled the shipowner, British or foreign, to order vessels in this country at very competitive interest rates. I would remind the House that one or two per cent. on the interest rate can account for many hundreds of thousands of pounds in the final cost of the vessel.
  I agree that perhaps the limit of £700 million may not be adequate. I am glad that the Minister did not close the door on this point. I would urge him to reconsider it, as it costs the Government nothing—although our money is at risk —and I do not see why they should not provide a guarantee subject to ordinary commercial considerations. After all, the banks can be relied on to vet the purchasing shipping line carefully. They would bear the loss in the first instance.
  I suggest that a limit of about £1,000 million is more realistic. I said this when we discussed the original Bill, and I said it when the limit was raised to £400 million in 1969. By the same token, I believe that the £700 million is inadequate. The Minister almost said as much.
  I hope that the Minister will pay particular attention to what is happening abroad. Our main competitors, of course, are other European yards. We know that some of them, particularly France and Italy, are subsidised. British Rail placed an order just over a year ago with the Italians, who receive a 15 per cent. subsidy. In France the industry receives between 15 and 17 per cent. subsidy, which can be further increased by another one or two per cent. if the yard is in a development area. I do not go along with the Minister. I feel that it would be better if there were no subsidy provided for any yard, but as this is an international business, we have at least to match the foreign subsidies.
  I might then be asked: what of the Japanese? But they do protect their industry, since any Japanese ship owner who orders his ships abroad has to pay

  1415
  import duty. As Japan has been able, on the strength of her own home market, to build up a strong shipbuilding industry, surely, if we cannot persuade our other main competitors to drop this policy, we should consider matching it and protecting our own shipyards. I accept completely what the right hon. Member for Sunderland, North said: shipyards are vital to this country.
  I welcome the Shell tanker order, which is valuable not only directly to the shipyard in my constituency but also to our balance of payments. It saves vital earnings abroad. Also, since these tankers will carry crude oil all over the world, this country will be assisted in that way too in the long run. So for trading reasons, it is essential, not just important, that our shipyards should be made as competitive and viable as possible.
  Also, we are a maritime nation. Our defences are completely dependent on the seas. Certain economists have advocated that since our foreign competitors are prepared to subsidise their yards, since capital and labour are scarce, we should buy the ships which they are offering at low prices, allow the shipyards to decay and redeploy the men into other industries. [Interruption.] I am referring to articles in the Economist and other journals.
  Mr. Douglas: Would the hon. Gentleman not concede that his Front Bench have a peculiar addiction to the views of the Economist? The policy announcements for the steel industry and their practice in that industry were announced in the Economist months ago.
  Mr. McMaster: I welcome the Government's action over the steel industry, and I am tempted to follow the hon. Gentleman into that argument. But if he considers the Minister's speech carefully, he will see that what I have said is correct. In other words, this is not the policy of Her Majesty's Government. I would strongly refute any such policy, for both trading and defence reasons.
  When an industry like shipbuilding is making large bulk purchases of steel, there is a good case for the quotation of a special price. I very much welcome the Government's action in halving the increase suggested by the industry from 14 per cent. to 7 per cent. Steel is a large
  1416
  factor in the price of a ship—more than 20 per cent.—so this is a matter of great concern to British shipbuilders.
  However, I wonder whether this is the complete answer to the problems of British shipbuilding. It would do the shipbuilding industry no good if it paid such a low price for its steel that the steel industry suffered. The reason for the difficulties which our shipyards have got into, particularly over the last decade or two, is the rapid rise in its prices, which is directly related to increased labour costs and increased prices in the country as a whole. Where escalation clauses were added to contracts—many contracts had none—they proved totally inadequate because costs have risen so sharply.
  I would like the Minister to consider carefully whether we should not now have a prices and incomes policy. If the escalation in current trends continues in the shipbuilding industry, under which wages costs have risen more rapidly than in other parts of the engineering industry, our shipbuilding industry will be badly damaged.
  In the present circumstances, we cannot control our shipbuilding prices, and it is unreasonable to expect that we can. Therefore, although I have not advocated this in the past, I feel that now, considering the particular problems of our shipbuilding industry, the time has come for the Government to lay down some norm or, perhaps, even go further and impose a statutory policy on the country restricting the increase of prices and incomes, perhaps even for a long period. I feel that it is the Government's duty to take a lead in this way, and I ask them, in the light of this debate, to reconsider the whole question.
  Now, a word about Harland and Wolff, During the Easter Recess I took the opportunity to go round the yard and see for myself the progress being made in building facilities there. There are five modern slips, added 10 or 12 years ago, in the Musgrave Yard, which are still in operation, but much more impressive is the new large building dock capable of taking tankers of up to 1 million tons, which looks as far ahead as one can see.
  At the moment, the dock is being used to build a tanker of 250,000 tons, and, as we know, it recently received orders

  1417
  for more such vessels from Shell. There are orders on the books from both Shell and Esso, and also from Onassis.
  The productivity of this modernised yard will help Britain to recover her position in the world as a major shipbuilder. Once the steel fabrication sheds are finished and brought fully into operation—by June of this year, I hope—the metal will flow through from one side of the yard, through the shot blasting, cutting and other parts of the fabrication sheds, where large sections will be prefabricated under cover in a way never possible before. Very large sections can be prefabricated, and, as I saw for myself, there is giant cranage available so that the plates may be welded together in the building dock.
  All this means that the facilities can be used on two, or even on three shifts, I hope, if there is pressure, as there is a great deal of capital tied up. This is something revolutionary in British shipbuilding, but it is vital if we are to bring down our costs so as to compete with Europe and Japan. One would not expect fabrication in the building dock to go on round the clock, because of the weather conditions which we so often experience in this country, but this would not be necessary. So long as large portions can be assembled under cover in the fabrication shed, it should be possible for the company to reduce its costs considerably.
  For these reasons, I am far more optimistic now about the future of shipbuilding in this country. We have great skills available. We have a skilled work force. The trade unions have made clear that they are prepared to meet the management on flexibility of labour in a way which we have not known for many years. The co-operation of the trade unions and the better management which, I hope, will be available will put this country back among the leading shipbuilders of the world.
  I hope that we can be told a little in the winding-up speech about the Governmenes plans for the management of Harland and Wolff. This is a matter of some concern in Belfast, particularly after the recent uncertainty about the future of the yard and the possible plan to sell a large part of the interest in the yard to an overseas interest. I was very pleased
  1418
  that, in the end, control of the yard remained in this country.
  I come now to the point made about nationalisation by the right hon. Member for Birkenhead. I do not regard nationalisation as the answer for our shipyards. If Government money has to go into our shipbuilding industry so that it may meet subsidised competition from abroad, it is right and proper that the Government should protect their interest by taking an equity holding in the yard and having representatives on the board; but that is totally different from Government management and control.
  The trouble with nationalisation is that we have frequent changes of Minister and changes of Government policy, and nationalised yards become subject to terrific political pressure. This cannot help any industry, whether shipbuilding, steel, coal or transport. It is far better that that industry should be given some stability, security and continuity for the future. Nationalisation would not secure this for our shipyards. That is why I reject the suggestion that either Harland and Wolff or British shipbuilding generally should be nationalised.
  Mr. Dell: I did not suggest that the nationalisation of particular shipbuilding companies was the answer to the problem. I suggested that it might be part of the answer. But will the hon. Gentleman answer this? He believes that equity holdings should be taken by the Government in firms to which Government money is given. Will he tell us what proportion of the equity of Harland and Wolff would now be in public ownership if the capital provided by the Government to that yard were represented as a share of the total capital of the yard?
  Mr. McMaster: I think that my hon. Friend the Minister would be in a better position to answer that than I am at this moment. I am aware that the entire shipyard of Harland and Wolff is grossly under-capitalised, but I should not like to go into that in great detail now. For one thing, part of the money advanced by the Shipbuilding Industry Board to Harland and Wolff may be advanced by way of loan. Before giving a realistic and sensible answer, one would have to determine what proportion of Government money would best be made available on loan, which could reasonably be expected to be

  1419
  repaid in the future, and what proportion should be put in permanently by way of equity. There are many arguments as to the pros and cons of each method. What is advanced by way of loan has to be serviced, and interest rates are high, which puts a large charge on the company. On the other hand, the company retains a much greater degree of independence. If a company is under-capitalised, it is possible for people to go into the stock market and, by spending comparatively little money, particularly if the company is not doing well, gain control. All these are matters which would have to be considered. I should not like to give a firm answer to the right hon. Gentleman.
  I return to my original point. While welcoming the Bill, I should like the Government to look again at the total limit available and see whether it would be more sensible to increase it. As a nation, we ought to adopt a far more confident frame of mind. Whether the money made available to Harland and Wolff or to other yards is public or private money will depend very much on confidence: in the one case, the confidence of the individual investor, debentureholder and shareholder, and, in the other case, the confidence of the British public in allowing public money to be spent in this way.
  The British shipbuilding industry merits our confidence. As a result of the Geddes Report and the efforts of the last two Governments, Labour and Conservative, our shipbuilding industry has been modernised. I imagine that the reason why there are so few hon. Members attending the debate today is that people are, perhaps, more optimistic about the future of our yards. There certainly does not seem to be great concern evident in the House that the industry needs further help, for if there were there would be more hon. Members present.
  Therefore, I totally reject the depressed air which hung over the House during the opening speeches, and particularly that of the right hon. Member for Birkenhead. With a revision of the total amount of guarantee, which is not costing the Government a penny, we can look forward to a brighter future for our shipyards.
  6.10 p.m.
  Mr. E. Fernyhough: I apologise to the Under-Secretary of State because I may not be able to hear his reply as I hope to take part in another forum at 8 o'clock. It was a commitment made long before I knew that there would be this debate, a debate in which I am glad to take part.
  I am intrigued by the contradictions of the speech of the hon. Member for Harland and Wolff. He has no belief in nationalisation, but praises the Minister who, if the steel industry had not been nationalised, would not have had the power to intervene in the commercial judgment of the Steel Corporation and make it keep the price of steel down. Our steel prices are still competitive. The shipbuilding industry has already made it clear that it does not believe that there will be any advantage to be gained by being able to import foreign steel, because it does not believe that it will be able to get better prices and quality than it can get here.
  If I felt as hon. Members opposite do and lived in a town where there was a naval dockyard, I should be very unhappy and uncertain, because there is something publicly-owned that is part and parcel of the shipbuilding and ship-repairing industry. I presume that Conservative hon. Members will go to Gosport and Portsmouth and various other places like that and tell the people there that the yards are inefficient and must be put in the hands of private enterprise, that the State which runs them is incapable and is running them in an inefficient and costly and wasteful way. We know that that will not happen.
  The main theme of the Minister's speech was that most of our problems in the shipbuilding industry are apparently due to wage cost inflation. I do not understand what is happening. The Government are publishing broadsheets telling the people that we must get into the Common Market. Articles are published in the papers saying that the wage rates of British workers are £5 to £7 a week lower than in the Common Market. If our wage rates are inflationary now, what will they be like when we get Common Market wages? What will the effect be if our lads say, "If Common Market wages are £5 to £7 above ours,

  1421
  it is time we made up some leeway and caught up. It is time we levelled out this unfairness."? That would place us in an even more uncompetitive position. It is all right to say that the Common Market workers are more productive and so on. One of the major factors that very few hon. Members will realise, in regard to the shipbuilding industry or any other of our major industries, is that this country has carried a defence burden far greater than all its competitors. It is that, more than anything else, which has placed us at a competitive disadvantage in industry in general.
  What disappointed me most about the Minister's speech was that he made no reference to ship repairing. The Under-Secretary of State said yesterday in reply to a Question by the hon. Member for Tynemouth (Dame Irene Ward):
  "A report prepared by the Ship Building and Ship Repairing Council on the ship-repair industry as a whole was considered by my right hon. Friend before deciding, last August, that further Government assistance for the Palmers ship-repair yard would not be justifiable. The Council released its Report to the Press last September."
  Before the decision was made to close Palmers the Government had studied the report, which makes it perfectly clear that the North-East had the lowest cost in ship-repairing of any of the ship-repair yards in this country. If the costs in the North-East were the lowest of any of the yards, how did it come about that the most up-to-date ship-repair yard in the North-East was closed down? Why were not the Government prepared to give a much longer look at that problem and at the social problem which is created?
  The Under-Secretary also said yesterday:
  "The Minister for Industry or myself, if we catch your eye tomorrow, Mr. Speaker, will hope to say something about policy for the ship-repairing industry."—[OFFICIAL REPORT, 21st April, 1971; Vol. 815, c. 1178–9.]
  The Minister did not say a word about it, and therefore we are in the dark. It may be that the Under-Secretary will give us a little more hopeful news about the ship repairing industry than we have had about the shipbuilding industry. The Bill, with its limitations, and the other announcements made today, will bring no great joy to the hearts of directors, managements and workers in the shipbuilding industry.
  Mr. Blenkinsop: Does my right hon. Friend agree that it is very unsatisfactory for us not to have had that statement at the beginning of the debate?
  Mr. Fernyhough: It will be decidedly unfair to everyone taking part in the debate if a statement is made in the winding up speech on which no one will be able to make any comment, no matter how acceptable or unacceptable the statement might be.
  The one part of the speech of the hon. Member for Belfast, East (Mr. McMaster) with which I agreed was that in which he referred to the British shipbuilding industry being as important a part of our defence as any ballistic missile or any other weapon. No nation such as we are, the biggest importers in the world, dependent upon ships more than any other single nation, could ever afford to allow its shipbuilding industry to disappear, whatever the causes. The Government would have to do a Rolls-Royce if things went too badly wrong. Of course they would then recognise that the ships which bring in our food and raw materials are as important as the aircraft engines which we have been discussing in the House recently. I do not believe that the future of the industry is quite so hopeless. It is possible to encourage better relations which can lead to improved productivity and greater competitiveness. A Government which wants that kind of thing ought not to have done what this Government have done.
  There is a dispute on the Tyne at present. I wonder what the Secretary of State for Employment's conciliation officers are doing to bring about a settlement. We know that this is a Government of no interference; they do not believe in getting mixed up with such things. They cannot run away from their responsibilities for 56 million people in this country and they cannot run away from their responsibility for what is happening in industry. It is the duty of the Minister to attempt to use his good offices to bring about a settlement in the dispute.
  If we accept the philosophy which was behind the Minister for Industry's speech we can see that this is a Government which believe in standing aside. What they have to realise is that there are countless thousands of people who believe that they are not interfering enough. We

  1423
  cannot have an unemployment problem such as exists in my constituency and surrounding constituencies, of enormous magnitude, with all the worries apprehensions and fears which accompany such a problem, and expect the people affected not to think that it is the duty of the Government to intervene.
  Naturally they want the Government to intervene because they believe the Government's policies are largely responsible for their fears and apprehensions. The Under-Secretary could bring a little brightness to what has been a dull and sombre picture by saying something which will encourage those in the ship-repairing industry and give them a little more hope for the future than they received when I brought a delegation from Vickers, Hebburn to meet him last year.
  6.23 p.m.
  Dame Irene Ward: I am a little apprehensive about taking part in the debate because I have so little expert knowledge to contribute. However, for many years I have taken a great pride in the shipbuilding and repairing industry in my part of the world and I would not like a shipbuilding Bill which contains certain helpful features to be passed on to the Statute Book without expressing my appreciation of it and some of the anxieties about the future of the industry. After listening to the Minister for Industry, I felt that my limited knowledge of the industry was not sufficient to enable me to cope with the statement made my him.
  We have had to wait a long time to hear that speech. In my own small way I have been instrumental in pressing my Government to get on with this Bill and I feel in an unfortunate position. In parliamentary life one learns to pick up information and to exercise judgment as to who to believe and who not to believe. I had understood that it was very embarrassing to the Department responsible for the Bill that we have had to wait so long for its introduction. I had emphasised to the Leader of the House on many occasions that we ought to have the Bill.
  To my consternation, when the Minister for Industry got up he did not seem to be ready to make the statements which I thought he was ready to make because
  1424
  he was so anxious to get the Bill on the Statute Book. I am in an unfortunate position because I do not know who is speaking the truth. Perhaps the Under-Secretary can say whether the Government are in a position to state their case fully, and I hope it will be better than that which has been stated this afternoon. When are we to know? How far have representations from the shipbuilding, ship repairing and other shipping interests been taken into consideration here?
  I do not want to get into a political conflict today, but I must say that the views of the right hon. Member for Birkenhead (Mr. Dell) did not accord with mine. It was refreshing to hear the right hon. Member for Sunderland, North (Mr. Willey) rightly paying tribute to the shipbuilders on his river. We have always known of the first-class shipbuilding industry in Sunderland. There have been a lot of small, competent family firms there. According to what the right hon. Gentleman said, they were not demanding money from the Government and certainly not demanding nationalisation.
  I agree with the right hon. Member for Jarrow (Mr. Fernyhough) that we have not had the promised statement on ship repairing. I shall not argue with the right hon. Gentleman about who has the best ship-repairing yard in the North of England, but in my constituency there is a first-class repairing yard. I am naturally anxious to hear about it.
  It is not always the Whips or, indeed, Ministers who encourage one to press the Leader of the House to find time for a Bill. It is quite pleasant when it comes up. I was naturally expecting that we should have the pledge redeemed and that we should hear something about ship repairing. Nothing seems to have happened and nothing seems to have been said. It was very difficult to fathom exactly what the Department of Trade and Industry was intending to do, what its ideas were, or whether it was having difficulties with the Treasury. By the time I had listened to my right hon. Friend, I had no idea exactly where we were on this very important issue. I hope that later we shall have a great deal more reliable, consistent and helpful statements made so that the shipowners and those who build ships on our rivers,

  1425
  on the Tyne and in other parts of the North-East, will be assured of their future.
  It is well worth while to remember that our shipping industry has contributed a great deal to our invisible exports. As the industry is part and parcel of the active side of our economic survival, we should give it all the help that we can. The letter sent from the Department of Trade and Industry to the Chamber of Shipping on the business of perhaps helping a little in the transfer from investment grants to investment allowances was rather mean. We could have been a little more helpful and generous to an industry which has contributed so much to our invisible exports. I am not pleased by that letter.
  Another difficulty with which I am faced at present with regard to shipbuilding is what we can do to help. It was interesting to hear my hon. Friend the Member for Belfast, East (Mr. McMaster) —the hon. Member for Harland and Wolff, as he is described. He ought to be very pleased, proud, hopeful and appreciative, as I am sure will be his constituents. I have always thought that the Upper Clyde received a great deal more attention from the previous Government than did Tyneside or, perhaps, Belfast. Political pressures from sections of the community play their part in Parliament, as we well know. I was not all that pleased because sufficient help had not been given to marine engineering. I have often raised that question in the House, but unsuccessfully. Also, ship repairing on the Tyne, which is very important to owners who sail from that river, has not had a fair share of help.
  Hon. Members on both sides of the House have been pretty restrained in the debate. But we are faced with a very difficult situation on the Tyne with regard to the fitters' strike. I have not seen the latest figures, but it is a terrifying situation for everyone on Tyneside, whether they are engaged on shipbuilding or not. One cannot continue to run private or nationalised industries without profitability. That is quite clear. When I speak to friends who are not particularly interested in shipbuilding on the Tyne, they always say, "You are all right up there now, because you have full order books." Up to a point, that is true. But a major shipbuilder in our country, Swan Hunter, is not building at a profit. In the end, without profit there will be no money
  1426
  to tax to maintain the general instruments of government. This is a serious situation. Although full order books provide employment, that will be no good if those who work in the shipbuilding industry know that, in the long run, a time of reckoning is coming.
  I sympathise with the right hon. Member for Jarrow when he talks about loss of jobs and so on. Unemployment is a frightful situation for any person to face. But the people who are carrying out this strike in a certain section on the Tyne are running the risk that Swan Hunter will close some of its yards. This would have an escalating effect on unemployment on the Tyne and would deprive first-class shipbuilders, first-class workers, their wives, the shopkeepers, ratepayers and everyone else. Many additional unemployed would be added to the already regrettable number.
  Obviously there has been controversy about the Government's decision on the steel industry, a decision which I warmly applaud. The reason for giving shipbuilders the release to import foreign steel was the continuing losses in the nationalised steel industry and its continuing demands for increased prices.
  The other day I listened to the head civil servant in research. What he said about the possible future of all our industries in relation to competition from. Japan ought to be noted by every man and woman who has any responsibility for government. To my knowledge, what was related to the many men and women who were present was a very frightening statement of fact. I hope that we are now to be told when the anxieties of the shipbuilding, ship repairing and shipping industries will be alleviated.
  Many of the Minister's remarks made me anxious. For example, he did not comment on a point which the right hon. Member for Bristol, South-East (Mr. Benn) raised. This may not seem terribly important to some, but it is important to me. Apparently the Secretary of State for Trade and Industry told the Opposition why he could not be present for this debate. That was polite of him, but I would have liked to have been told too. I have a shrewd suspicion that because of pressure from hon. Gentlemen opposite, this debate is taking place today, with the result that my right hon. Friend, because of an appointment from which

  1427
  he could not escape, is not able to attend. That is my guess. He graciously informed the Opposition of that. He might have told his hon. Friends as well.
  Sir J. Eden: I apologise to my hon. Friend for not having mentioned this before. Her guess is absolutely correct.
  Dame Irene Ward: Psychology is important, particularly in Parliament. Having been here for many long years, I want the Government to know that I want to be put in the picture as well.
  I am still not sure whether this Measure will achieve anything. Although I listened carefully to the remarks of the Minister for Industry, I do not know what section of the industry will benefit or how, when, why and if it will benefit. We must do everything possible to keep our first-class shipbuilding industry in operation, and competitively and profitably in operation.
  I must sound a political note which I am sure will not be acceptable to hon. Gentlemen opposite. I would like to see built here the frigates which South Africa wants. One of our great mistakes of the past was the loss of naval shipbuilding. We once had a first-class naval shipbuilding industry, but we now seem to build very few naval ships. I do not know if any have been going to Belfast or the Clyde, but certainly they have not been coming to the Tyne. We would like to see some built on our river, for a number of reasons, and especially because it would help to reduce unemployment.
  I am today neither congratulating nor hammering the Government. I dislike finding myself in the position of having heard a Minister's speech, not understanding what he said. Whatever he said, he said it charmingly, but charm does not tell one anything. I want to know some absolutely reliable facts. All the charm in the world—it is fun to be charmed and we have some extremely charming Ministers—will not provide the wherewithal for life. In other words, one cannot live on charm.
  I want to know how, if at all, the Bill will help our shipbuilding and ship-repairing industry. I hope that the Under-Secretary will answer this question and all the others I have asked in a way that will give us the facts and also, perhaps, get a good reaction. It is the
  1428
  job of the Opposition to criticise and when we were in opposition we criticised hon. Gentlemen opposite. Indeed, I often enjoyed doing it. I find it difficult to criticise the Government because I am such a loyal supporter of theirs, but what we had today from the Minister was not good enough.
  Our great shipbuilding industry has done much for Britain. Our shipowners have earned great invisible exports. Long may they go on doing so. I want to know what a Conservative Government intend to do to ensure their survival economically, competitively and profitably.
  I trust that the Under-Secretary will comment on the strike on the Tyne and will point out to the men precisely what they are doing. I believe that if industry can earn substantial profits—I refer to any industry, but in this context I am concerned with shipbuilding—they should be distributed in an equitable fashion so that everybody benefits.
  However, it is not a good idea—indeed, I oppose it root and branch—for one section of the shipbuilding industry to run the risk of doing lots of valuable men out of jobs and thereby increasing unemployment on our river, for that would be the result of such action. Nor do I think it right that our shipping interests, which are so valuable to the nation, should be threatened. I trust that the Under-Secretary will, when replying to the debate, bear in mind the many questions that need answering, and answering satisfactorily.
  6.46 p.m.
  Mr. Arthur Blenkinsop: I assure the hon. Lady the Member for Tynemouth (Dame Irene Ward) that she is not alone in expressing dissatisfaction with the speech of the Minister for Industry. Indeed, it would be hard to find an hon. Member on either side who had any greater understanding than she had of that speech. She can console herself with the thought that her anxieties are shared in all parts of the House.
  We have every reason to be dissatisfied because, as she said, we have been pressing for this debate. The Bill was published some time ago and we were given to understand that this would be made the occasion for an important statement of Government policy on the future

  1429
  of the shipbuilding and ship repairing industry. This has not happened. Far from a full statement of the views of the Government about these two important sections of industry, we have even had an uncertain account of the provisions of the Bill and all that goes with it.
  One would have thought that the Minister would at least have been able to give an account of a two-Clause Bill, with all the background information to it. One might equally have expected to have been told whether the existing credits were adequate for the orders which the industry has already taken. When questioned about the existing credit facilities, and whether the maximum figure had been reached, leaving aside the future, the Minister did not give a clear reply.
  Neither did we receive an assurance about whether the provision made by the Bill will be adequate to meet the orders for which tenders are now being offered. The industry wants to know whether it should seek business ahead. We are in a fantastic situation because while the industry is saying that the figure should not be £700 million but between £800 million and £1,000 million, the Minister did not try to explain the position.
  All he did was to say that there were doubts about the future, that the matter was being examined. His phrase was that the Government were "looking to the future". I do not know whether we can take much comfort from that. Presumably, they have been looking to the future for the last six months or more. The fact that they have not been able to come up with an answer, even though the debate has been repeatedly postponed, does not greatly encourage us to expect much more from the Minister who replies. That is one matter on which we think it right to express our dissatisfaction, and this unsatisfactory way in which the Government have brought forward the Bill ought to be pursued vigorously.
  As my hon. Friend the Member for Jarrow (Mr. Fernyhough) said, we are dissatisfied not only with the way in which this modest Bill has been introduced, but because we have not had a statement setting the Bill in the wider perspective as we were promised. This wonderful Administration of expert businessmen and the rest is not showing up particularly brilliantly, and certainly
  1430
  the businessmen concerned with this industry will be even more uncertain about their future after the debate. We know that they are already expressing their uncertainty clearly and vigorously.
  We are dealing with industries which affect thousands of people. It may not employ a large proportion of the total employed population, but in my constituency it employs a very large proportion of the total employed. The industry has been contracting in any case as part of the reorganisation which we all foresaw as being inevitable with the changes in the industry, but that makes it all the more difficult for the unions to implement and accept changes of a kind which all agree to be desirable.
  The unions have accepted great changes in procedures in order to make for more flexibility. They have accepted great changes in pay structures. I agree that they have fought for and secured important improvements in pay and earnings, but they have also accepted a great many changes in all the enormous range of rates of pay customary in the industry. Although there have been great improvements, there is no doubt that they have been implemented only with great difficulty. That has imposed an immense strain on the trade unions and it must be understood that that process has been going on while changes have occurred in this industry that only a few years ago might have seemed not very likely, if not impossible. That is one element of the situation which ought not to be forgotten.
  My right hon. Friend the Member for Sunderland, North (Mr. Willey) called attention to the success story of Sunderland. I have an equal claim for my constituency where all the launchings of a major shipyard last year were well ahead of the order date. Those are facts. There are many disappointing facts which we have to face, but for heaven's sake let us not decry the positive work which is also being achieved. When people have successes, it is not particularly encouraging to them to get the kind of blanket condemnation which is all too often made. I claim that the successes we have had over that period have been due to the Labour Government's efforts to ensure that the recommendations of the Geddes Report were implemented, for because of that it has been possible to

  1431
  make some important changes. There are thus successes to be set against the disappointments.
  On the other hand, it is suggested by the ship owners that the ship repair industry, which has been fairly profitable recently, is placed in the North-East. We welcome that recommendation, but it is a fact which ought not to be dodged that the ship repair industry still continues many out-dated practices, and we all know it. We have to ensure that the modernisation which must come occurs in that industry too. But we will not get the advantages we want unless there is more understanding by management of what discussion with workers really means.
  Unfortunately, it is still true that the management of far too many ship repair yards do not have real discussions with the men of a kind which any of us would recognise by that term. It is a tragedy that there is still so much of the atmosphere of casual labour about the industry, in spite of many improvements. If we are to get the advantages available to us and to develop the ship repair industry fully, this is one of the most urgent matters to put right.
  That is why we want some clear initiative by the Government to bring the two sides of industry together openly to discuss the future of the shipbuilding indusstry and the ship repair industry, not a discussion only by a few people at the top, but an attempt to open the whole of the industrial background to discussion by a wide range of representatives of the men, as well as of the management, so that these problems may be brought into the open. Until we can do that, we have little hope of getting the atmosphere of expansion which is needed.
  I am not so doubtful as my hon. Friends about looking at the possibility of some form of greater public intervention in the industry. It is a vital industry for the country. My anxiety was aroused because the Minister seemed to be casting the industry out, to be standing aside, willing to see the industry disappear. If it disappeared, that would be the end of employment for 156,000 men and women all over Britain. It would mean in the northern area some 34,000 to 35,000 more men out of work. In my
  1432
  constituency alone it would mean another 5,000 men out of work in addition to the nearly 14 per cent. who are already out of work.
  Surely this is a situation which no Government can accept in the kind of casual way which seemed to be conveyed in the Minister's speech. I therefore call upon the Government to make a clear statement of their attitude to the whole industry, both shipbuilding and ship repairing, and to offer some hope of a new initiative to set against the great anxieties and fears which most of us have drawn from the hon. Gentleman's speech.
  7.0 p.m.
  Mr. W. E. Garrett: Several hon. Members have called this a fairly dull, listless and somewhat sombre debate. This is because the Minister spoke with not much delight and enthusiasm for his task. I hope that when the Under-Secretary of State replies we shall get more enthusiasm and some distinct replies to the many questions raised on both sides of the House.
  Like the hon. Lady the Member for Tynemouth (Dame Irene Ward), I could not understand the important part of the Minister's speech dealing with credits. I hope that the Under-Secretary of State will give a clearer explanation; otherwise, I am afraid, there will be misapprehensions which could result in extreme gloom and dismay in the North-East and other parts of the country. I hope that the hon. Gentlemen will consult and try to put it in simpler terms for ordinary hon. Members like myself.
  Basically, the attitude of the Government towards this industry is one of indifference. I cannot understand that really, because there is an impression that the industry is being heavily subsidised. It is not. We are talking about credits, and these are paid out at interest. The term "revolving credit" means that we have a kitty of Government credits out of which the Government make money. The situation is different in certain parts of the Upper Clyde area, where some subsidies have been granted. But these are infinitesimal compared with the vast sums of money handed out for Concorde—£400 million at least—or in agricultural subsidies. When considering the financial state of the shipbuilding

  1433
  industry, we should relate it to the amount of money spent on other industries.
  We in this House also seem to have a masochistic delight in putting certain industries before the public eye. We debate the shipbuilding industry and coal mining, bat we rarely debate the chemical, electronic or civil engineering industries and others which should possibly be given an airing on occasion. This is the fourth or fifth debate we have had on this subject over the last four to five years. What we are saying in many cases is a reiteration of a familiar theme.
  Again, the myth that self-destruction seems to pervade the industry should be destroyed. The industry is not desperately sick. It is not going as well as some people would like, but still in some regions it is prosperous, and it is going through a period of reorganisation. If I had to criticise the Geddes Report it would be on the time limit. I believe that the time limit it set for the period of reorganisation was too short. I would like to have seen it extended. That is why I am so disappointed that the Shipbuilding Industry Board's term will expire in December. I ask the Minister even at this stage to think about that again. The Board still has a useful job to do. If its term were extended for another three to four years, it could be a most useful tool for the reorganisation of the industry.
  Much has been said about labour relations in the industry, and one could get the impression that there is complete anarchy. There was. It had a bad labour relations record. But it is not as bad as it used to be. The hon. Gentleman referred to the bad state of labour relations, but, taking the record over the last decade, there has been a decided improvement, in spite of some unfortunate disputes, particularly on the Upper Clyde and the one which is taking place on Tyneside at the moment.
  Here I must declare my interest, because I am a member of the Amalgamated Engineering Union, whose members are in dispute with the Swan Hunter Group. This is basically an old-fashioned dispute. The management gave a rise to the boilermakers and the engineers think that they are entitled to a similar rise on a question of parity. I appeal to
  1434
  the management once again to make some approach to the trade union so that negotiations can begin and the five-week-old strike ended as quickly as possible.
  The marine engineering side was at one time a very important facet and adjunct of the industry, but it is not so important now. As the Geddes Report said, our influence on that side has declined. Nevertheless, it still has a part to play, and I would like to have heard something more positive from the Minister and some guidance as to what is to happen to some of the shipbuilding research councils, particularly the one at Wallsend. We are possibly the top nation in shipbuilding design. We have given a lead in shipbuilding techniques. But there again we have let them go to other countries, I regret to say. The Japanese, in particular, have taken advantage of much of the techniques we acquired through research over the years.
  Both the Minister for Industry and the Under-Secretary of State were born in and have connections with the North-East. They know full well that the men in the shipbuilding industry are basically hard working and have a great belief in their industry. I hope the Government will continue to rethink their attitude to the industry and, above all, give it much more hope than they have done up to now. If we get that, the debate will have served some useful purpose because it will give men and management and the unions the incentive and desire to make this industry once again one of the premier industries of Britain.
  7.9 p.m.
  Mr. Dick Douglas: The Minister for Industry endeavoured, albeit unsuccessfully, to put the shipbuilding industry into the context of the capital goods industries as a whole. If I have any direct quarrel with the Government in relation to their industrial strategy—if I can dignify it with such a term—it is that they are attacking directly the capital goods industry. The shipbuilding industry is a major capital goods industry, but it also, as my hon. Friends have pointed out, has a number of facets that relate, in terms of employment, production and import saving, to other industries as well. The supply of auxiliary materials to ships is of vital importance. Yet the Government

  1435
  have sought, in their policy of withdrawing from industry as a whole, to attack and undermine confidence in the capital goods industries. One of the unpleasant features of the rise in unemployment is that whereas before the assets in question could be classified as wasting assets, the Government are attacking an asset which is not a wasting asset and which therefore has distinct possibilities of regeneration.
  However, that does not, in the short term, excuse the high level of unemployment which is directly attributable to Government policy. If the Government can claim any credit, it is that they have removed the seasonal variation. In future, one winter will be integrated with the next. The Government have eliminated the seasonal variation, and in future we shall have a continually upward trend.
  The Minister indicated some of the Government's solutions to the problems facing the industry in general and the shipbuilding industry in particular. He said that many of the industry's problems could be cured if we could eliminate, in some magical way, cost-push inflation. I do not dispute that occasionally inflationary bargains are made which will not be justified in terms of long-run productivity; that is a question of judgment and balance for management and men. But I do dispute that the Government can, by exhortation, achieve an incomes policy.
  I refer to the speech of the Chancellor of the Exchequer last night. It is in this context that we consider industrial relations in the shipbuilding industry and other industries. The hope which the right hon. Gentleman holds out is this:
  "Our interim aim is to achieve a substantial de-escalation of pay settlements accompanied by a levelling off in the rate of unemployment Later, when pay settlements have returned to more sensible levels, it should be safe to allow output to grow at a rate sufficient to reduce the level of unemployment".
  The right hon. Gentleman is saying to the unemployed, "Before there is any prospect of reducing unemployment, the level of wage bargains must be de-escalated". No framework is suggested in which that can be done. This is the prospect for men in industry. With this psychological approach, is it any wonder that industrial relations are bad?
  1436
  The Government are saying to men in industry, "You must resolve your differences by magic. We shall stand back and let you battle it out. But we shall create a climate in terms of the level of demand which is conducive of insecurity".
  We may be wrong about the psychology of the working man. Having worked in a shipyard, I can speak personally about this matter. Rightly or wrongly, the working man does not fear inflation—perhaps he should. He fears unemployment. Unless the Government give a guarantee that the level of unemployment will be significantly reduced in the coming winter, they will be in for a bad time in terms of industrial relations. It does not please me to say that, but that will be the result of their policies.
  Mr. McMaster: Is the hon. Gentleman asking the Government to say to people employed in making stage coaches, "We guarantee that you will always be employed in making stage coaches"? Can a Government give such a guarantee? Is it not in the nature of things that men have to accept change in a changing world?
  Mr. Douglas: I agree that men must accept change. But it is the Government's responsibility to create an economic climate in which change is acceptable, and the present Government are manifestly not doing that. That intervention comes ill from an hon. Member who has advocated an incomes policy. The Government have denied responsibility for any type of incomes policy other than a policy of exhortation. If an incomes policy or de-escalation could be achieved by mere words, the Government should be successful, because they have devoted more words to that than to almost any other topic.
  On 25th March, the Under-Secretary of State for Trade and Industry said:
  "I am in some difficulty in that my right hon. Friend will be making a major statement on shipbuilding policy on the Second Reading of the Shipbuilding Industry Bill, and I do not wish to anticipate him on that occasion."—[OFFICIAL REPORT, 25th March, 1971; Vol. 814, c. 1060.]
  If the Minister's speech today was a major statement of policy, it will not give any cheer to the shipping companies or to the shipbuilding industry, because all that the hon. Gentleman said was known on 25th March and when the Bill was

  1437
  published. There has been no supplementary statement about the Government's policy. We have an interim Measure which says, in -effect, "The Shipbuilding Industry Board will be wound up at the end of 1971". I agree with my hon. Friend the Member for Wallsend (Mr. Garrett) that the time scale in connection with the Board leaves much to be desired, because the deep-rooted problems of the industry are so great—perhaps a lot greater than the Geddes Committee thought—that the work of the Board should continue.
  I turn to that part of the Shipbuilding Industry Act, 1967, which deals with the guarantees, Section 7(3), which reads:
  "No guarantee shall be given under this section except on the recommendation of the Board, and the Board shall not make such a recommendation unless it appears to the Board"—
  and then it gives several pointers. Subsection (3)(b) states that the Board shall not make a recommendation unless
  "the carrying out of the order in question in that shipyard is consistent with, or will contribute to, that increased efficiency and will secure that use is made of resources which are then or will shortly be available and are otherwise unlikely to be used".
  Therefore, the Board has a specific responsibility to ensure that increased efficiency will result.
  When the Board is wound up at the end of 1971 and its administrative powers devolve to the Minister, how will the Minister act, directly or indirectly, in connection with the yards to ensure increased efficiency? Will he, because of his non-interventionist view, leave the matter to the operations of the yards? I do not believe that £700 million is sufficient because claims up to that figure have, I think, already been made. It is the Government's responsibility to consider what is to happen to the industry.
  The change from investment grants to tax-based incentives has not necessarily benefited the industry.
  Taking a tanker costing £5 million, will the Government quantify the difference in terms of the life of that asset related to free depreciation and the investment grant procedure and the pre-1966 position? There is no point in the Minister taking refuge in the Rochdale view of investment grants. Rochdale was asking for a pre-1966 position with investment allowances where sometimes
  1438
  140 per cent. of the asset could be written off. We have the position where only 100 per cent. of the asset can be written off over the life of the asset. The Government have a responsibility to give their views on the future of this industry, particularly after 1974 when regional employment premiums will end.
  Is it the Government's intention to alter the differential betwen manufacturing industry and other industries in development areas? This is extremely important from the point of view of shipbuilding orders now being taken. The Minister said that we should receive, some time in the future, a further statement of policy, but will his further statement require legislation? His Department has dismantled the structure set up under the Industrial Expansion Act, and has abolished the Industrial Reorganisation Corporation. These instruments could have been held in reserve at no great cost to facilitate some of the residual powers of the Shipbuilding Industry Board.
  I turn to steel prices. It would be ill-received on this side of the House if a yard such as Harland and Wolff, or any other yard in receipt of governmental or public subvention, chose to use indirectly public money to import massive quantities of steel from abroad, when the British steel industry is under such severe attack by the Government. I share the view of the hon. Member for Belfast, East (Mr. McMaster) on steel prices. The Japanese industry which has grown so massively in the past 20 years to 10,000 million tons, has done so because of the competitive prices of Japanese steel. This has again been a purposeful element of the Japanese Governmental policy of creating massive integrated steel works. It would ill serve our future prospects if, by allowing higher steel imports, we indirectly subsidised Japanese and other producers to the long-term detriment of the British steel and shipbuilding industries.
  The Government must look at their industrial policy overall. If we are to save the British shipbuilding industry we must take measures to save the British steel industry. If we are to have cheaper ships along the lines Geddes suggested, it is vital that the British Steel Corporation should have Government backing for massive investment in the industry. It will

  1439
  not do to say that the shipbuilding industry can import in the short run cheaper steel from abroad.
  On analysing the figures, I am perturbed about the decline in the proportion of the British flag fleet to total world shipping. Over 20 years the British proportion of the world flag fleet has halved, whereas the Japanese proportion has doubled. I am concerned about this proportionate diminution in the number of ships under direct British control. From discussions with constituents who are concerned in supplying British and other shipbuilding industries with auxiliary equipment, I understand that it is much easier for them, for language and other reasons, to obtain orders for a ship under the British flag built in a British yard.
  I believe that there is a future for the British shipbuilding industry, but that future can only be made secure if the Government are behind the industry's efforts to solve the problems. I depart from the view of my right hon. Friend the Member for Birkenhead (Mr. Dell) and I ask the Minister who is to reply not to do so on the direct issue of whether the industry should be publicly owned. That is not the question now. Changing the name on the door will not solve the industry's problems. Unless the industry is given a clear guarantee of governmental support and assistance during the next five or ten years, the morale of the men and management will be impaired. This industry has suffered more than any other industry in the past from dynastic entrepreneurship. We have to create dynamic entrepreneurship, and that is the responsibility partly of the industry and partly of the Government. The Government should not sit back and adopt a non-interventionist attitude but should take direct responsibility.
  7.27 p.m.
  Mr. William Small: I listened with dismay to the speech of the Minister. I have worked in the shipbuilding industry man and boy and I shall deal only with the broad aspects of it. In the old days when we were asking the Minister of Transport—who was then the right hon. Member for Wallasey (Mr. Marples)—for support for the shipbuilding industry, I used to say that there would be demarcation
  1440
  disputes and empty berths. At that time there were empty berths because of the lack of a labour force, the lack of ships and of orders. If a census were to be taken, it would show that the Labour Government gave more support to the shipbuilding industry and made it more stable.
  In my generation parents used to say that every boy should have a trade, and I speak as an engineer. However, we all know that rivers cannot be moved to suit anybody, not even engineers. We are naturally a shipbuilding nation and I am an interventionist. Sixty years ago the United States and the Soviet Union were merely economic backyards. The economic blocs of today in building up maritime strength are taking the trading routes from Britain. We all know that in the airways the Government are hiving off profitable routes to private enterprise, but now our sea routes are being stolen from us and abroad we have the image of a backward nation in this respect.
  I speak as an engineer who worked in industry for many years. I know that there is dismay among workers in the shipbuilding industry when considering the matter of their security and whether they will be able to look forward to a lifetime of work in the industry and will ever be able to draw a pension.
  The recommendations of the Geddes Committee were welcomed by the trade unions. It was a demonstration of what could be done by Government intervention, and it paid off. The shipbuilding industry did not need an Industrial Relations Bill to control its relationships. There were teething troubles in the industry, but the style of change which flowed from Geddes was welcomed. What came out of the Geddes Report was transferability of job functions so that there were no demarcation disputes, which had always been a crime condemned by everybody. This was why we were not getting orders.
  In looking at the situation on the Clyde, we must ask ourselves whether that area benefited from the activities of the Labour Government. I personally acclaim the efforts of my hon. and right hon. Friends when in Government for bringing stability to the Clyde and a greater sense of security than had ever been the case

  1441
  before. The Government must now consider whether Government intervention should continue.
  To come on to the rôle of the Shipbuilding Industry Board, it must be said that the Board put public money into the Clyde in the form of grants and loans and that that money was necessary. Fairfields fell out of the picture before Geddes reported, and I hope that the present Government will take some action over that yard, since it is one of the most important yards on the Clyde.
  We must consider the style of what is taking place under the Industrial Expansion Act and consider the situation which will arise because of the abolition of regional employment premiums. The names of the shipbuilders on the Clyde are, to me, household words, as are the names of the various employers within the shipbuilding industry. The employers certainly felt that the 37s. 6d. per head per employee in employment premium helped as a balancing factor in terms of employment ratio and enabled a situation to obtain in which there was not rivalry in the pricing policy of various engineering companies. This helped the industry and stabilised the labour force. Therefore, the regional employment policy had a considerable effect in the shipbuilding areas.
  The Secretary of State for Trade and Industry is due to come up to the Yarrow Yard on 14th May to open one of the covered-in building berths. This will be one of the biggest of its kind in the world—three ships can be built under cover. For the benefit of all those dilletantes who may not know these facts because they have never dirtied their hands, I would inform them that a shipyard worker often has to work in fog and in frost, day and night, in the open. Therefore, a figure of absenteeism of 16 per cent. during the winter must be seen in the context of the sort of conditions in which such a tradesman must work. The development of these covered building berths means that the assembly and prefabricated units will be covered in and will be directly accessible to the workers and a man's productivity is likely to go up by 30 per cent. This development took place with Government support and I hope that this initiative will be continued. I understand that there are some employers who regard that sort of ex-
  1442
  penditure as unjustified. In fact, it is more than justified, and I am sure that this will be shown by the results.
  I think that it is wrong to put a credit ceiling of £700 million into legislation when one bears in mind the length of time it takes to build a ship, and indeed to build up an order book. The one-off job is no use in these modern days. We now have to go for four and five jobs at a time and we must aim at standardisation. This is what is happening in the Upper Clyde Shipbuilding Group which specialises in building four or five ships at a time.
  We all know that there has been an extension of the principle of container ships. I will not go into details because we all know that the Under-Secretary of State who is now on the Front Bench is an intelligent and knowledgeable young man who has lived in the modern world. He will know the large increase in container ships and many developments are taking place in this respect which will mean that the shipping lanes will be turned into a vast trunk road.
  The fact remains that I am somewhat disappointed with the Government's policy and with the provisions of the Bill. I would restyle the well-known work by Ivor Novello "Careless Rupture" and would apply it to the Secretary of State, who does not know where he is going.
  7.38 p.m.
  Mr. Bruce Milian: Unfortunately, this debate has not been very satisfactory because of the inadequacy of the information that we had from the Minister in opening it. I shall come back a little later to what he said—or perhaps to what he did not say.
  I wish to begin by taking the House back to the Geddes Report and its recommendations. The report made the important point, which many people at that time had not sufficiently appreciated, that there was an expanding demand on a worldwide basis for shipping and shipbuilding. The United Kingdom industry in face that expanding world demand had not itself been expanding sufficiently, or indeed at all. This was the important and basic message of Geddes—namely, that this country should share in that increased demand for shipbuilding.

  1443
  Geddes said that the industry in this country would not be able to share in that expansion unless it was radically reorganised. The Geddes recommendations were intended to achieve the reorganisation of the industry partly by the efforts of the industry itself, both management and men, which would involve a considerable amount of Government assistance and the establishment of the Shipbuilding Industry Board to oversee the reorganisation which that Committee felt was required.
  The Labour Government accepted the basic premises, arguments and recommendations of the Geddes Report, and they were implemented in the 1967 Act. The various schemes for giving grants to the industry, loans for reorganisation, additional working capital, and the home credit scheme whose extension we are considering today, all come from the 1967 Act.
  The point which I want to make more than any other about the Geddes Report and about the 1967 Act, leaving aside for the moment all the very important details of the Act, was that when the Labour Government passed the 1967 Act they took on a commitment to the prosperity of the industry. We accepted the Geddes statement that the industry had a future, and that it had a bright future if it could reorganise itself on the lines that Geddes recommended. We expressed our confidence in the industry, and it was part of the general confidence that we expressed at the time and attempted always to express in the six years of Labour Government in British industry as a whole being able to solve the problems with which it was confronted.
  What has happened to the Geddes recommendations in the light of the support that the Labour Government gave in the 1967 Act? It is a mixed picture. Obviously, all the hopes held out at the time of the Geddes Report and the passing of the Act about reorganising the industry and putting it on a sound economic basis for future expansion have not been achieved within the time limit that Geddes laid down, which, with slight alterations, was accepted by the Labour Government of the day. But there is an impressive record of achievement, and a good deal of the policy of reorganisation has been implemented over the last few years.
  1444
  At this point, it would be remiss of us not to pay tribute to the Shipbuilding Industry Board. Sir William Swallow and his colleagues have shown tremendous enthusiasm and courage in very difficult circumstances. They have achieved a considerable amount in the period of the Board's existence. But we have not solved all the problems of the shipbuilding industry. It is still true that our share of world orders is far too low. It is also true, unfortunately, as my right hon. Friend the Member for Sunderland, North (Mr. Willey) said, that the share accruing to the British shipbuilding industry has been reducing rather than increasing over the last few years.
  Some of the figures are alarming, when one sees what Britain has been able to achieve compared not just with Japan, where the figures are quite remarkable, but with Sweden, West Germany, even France, and Spain as well. Taking a 10-year period, in terms of ships launched using gross tonnage figures, which I appreciate are not necessarily the best figures to use, the figures show that the 1970 launchings from British shipyards at 1·2 million gross tons were very little different from the 1960 figures. In fact, they were slightly down. They were, admittedly, an increase over the 1968 and 1969 figures, but they were still very much at the 1960 level. In the case of Japan, the gross tonnage has moved from 1·7 million in 1960 to no less than 10.5 million in 1970. In the case of Sweden the tonnage has gone from 700,000 in 1960 to 1·7 million in 1970. West Germany also shows a very substantial increase. So does France. The Spanish figures are now beginning to represent another alarming picture on the scene from the point of view of competition to British industry.
  In the time that we have had since the Shipbuilding Industry Board was established and the 1967 Act was passed, obviously we have not brought up our share of the world total in the way that we might have expected and hoped. Similarly, our productivity is not as good as that of some of our major rivals, though one hesitates always to make generalisations about these matters because different yards have different records of productivity and some are very much better than others. Our labour relations have improved considerably.

  1445
  That is certainly true on the Clyde. But there is a long way to go there as well. Our cost figures have not been sufficiently under control compared with those of some of our international competitors. In the last year or two, partly because of contracts taken on at very small margins which have then been eroded by subsequent cost increases, our industry has been running at a very low level of profitability and, in some cases, with considerable losses.
  The situation is by no means a completely satisfactory one. As my right hon. Friend the Member for Birkenhead (Mr. Dell) said, it may be that one of the difficulties that we have been facing is that the Shipbuilding Industry Board has not had enough powers to implement and push through the reorganisation as quickly as it should have been done. The implication of that is that what is required here is not less Government intervention and Government control in the industry but more direct Government intervention and a great deal more Government control when very large sums of public money are being put into the industry.
  Above all these considerations, the important one to fix firmly in our minds about what has happened over the last two or three years and what the record of the Shipbuilding Industry Board has been is simply that if it had not been for the 1967 Act and the activities of the Board, the British shipbuilding industry would have been completely obliterated by 1971. There is no one in Clydeside who would argue that in Upper Clyde we would have any shipbuilding industry if it had not been for the 1967 Act and the action taken since then. That is the really important consideration that one should have in mind when looking at the admitted disappointments that we have had in some areas of actvity over the last few years. We have this achievement to our credit, and it is a very important one. We have maintained a British shipbuilding industry in circumstances where, without these efforts, it would not have been possible to maintain it at all.
  One of my criticism of the Minister's speech is that he made too few of his remarks in the context of what is happening in the world as a whole and in terms of the worldwide demand for shipping and shipbuilding. The state of the world's order books is better than ever
  1446
  before. Orders are very buoyant, and there is a tremendous amount of work available in different parts of the world. Many of our competitors continue to increase their share of the amount of orders available.
  Another important feature of the present situation is that we should not be too depressed by some of the difficulties on cost and profitability that we have in the British shipbuilding industry. Similar problems face our competitors. Even the Japanese are not completely excluded from them. The Swedes and Germans are facing similar difficulties of contracts taken on in a period of inflation on what were virtually fixed prices which subsequently turn out to be unprofitable. The problems that we face are not unique from the British point of view or intrinsic only to the British situation. The same problems are faced by our competitors, and, while directly that situation does not help us, indirectly it gives us some cause for optimism.
  We are finding that our competitors, as well as ourselves, are having to insist on contracts with appropriate cost-escalation clauses, because without them they are unable to run at a satisfactory level of profitability. The more contracts which are taken on with cost-escalation clauses, and provided that our industry—this is an important proviso—is able to reduce its delivery periods to match what some of our competitors are able to achieve, the more we can be satisfied that the long-term future, from the profitability point of view, is a good deal brighter than now.
  With an increasing world demand and better prospects of profitability, it seems that the question facing this Government, which would have faced any Government, is whether, having already invested large sums in the industry, they should continue that investment and get the advantages which can come from it, or abandon the industry altogether.
  It is important to look at the attitude of other countries in this respect. In many cases they face problems similar to our own. They have at times reluctantly been pushed into providing subsidy and support over the last few years. However, I know of no major competitors of ours in shipbuilding who have taken the attitude that they should abandon their industry. The opposite has happened. They

  1447
  have all, by Government action and policy, reasserted that they have every intention of seeing that their industry survives and will expand.
  What we expected, and were entitled to have, from the Government today was a similar expression of confidence and determination in the continuance and prosperity of our shipbuilding industry. It is a particularly bitter disappointment that we heard nothing from the Minister expressing that determination and confidence. There seems to be a particular lack of self-confidence in the Government generally about British industry. Some of the talk about lame ducks and allowing industry to stand on its own feet, and so on, is simply a mask for a complete lack of self-confidence and policy towards industry. The Government are frightened of some of the problems with which they have to deal, and they take refuge in these general philosophies and principles which do not bear serious examination either as principles or in practical application.
  I should like to have heard today the kind of approach outlined by my right hon. Friend the Member for Birkenhead in his opening speech: first, a statement on the Government's determination to support the industry, and, secondly, an assessment of what they think its place will be in a worldwide context and the kind of achievements which would be open to it, given the necessary support and determination within itself. Such forecasts were made at the time of the Geddes Report. We are entitled to know how the Government see the place of British industry in that worldwide context and what they intend to do to support the industry in order to achieve the objectives which they have in mind for it.
  What have the Government done which bears upon the prosperity of the industry? First, we have had the changeover from investment grants to allowances. This is not an appropriate time to deal with the change in investment grants policy dealing with industry as a whole. However, it is generally accepted in industry now that the changes announced by the Government in October were at the very least mistimed. There may be a certain body of opinion within
  1448
  industry that, on the merits, some of these changes ought to be made; but, at the very least, I find that industry takes the view that the changes were mistimed.
  Many parts of the country, including the regions, which have particular support from the investment grant system, go very much further, as I do, and suggest that the changes themselves, apart from their timing, are essentially wrong in principle. Certainly they are mistimed, because they have been made at a time of low profitability within industry as a whole. The change from investment grants to allowances for taxation purposes is likely to be unattractive to large sectors of industry, particularly those running at low levels of profitability and those attempting to expand their activities in the development areas.
  We know that the shipping industry has protested vigorously about the changes made by the Government in the grants and allowances available to it. There is no doubt—Rochdale admitted it, though it subsequently went on to advocate certain changes—that a good deal of the increase in orders over the last few years was directly attributable to the change which the Labour Government introduced in the investment grant arrangements. The Chamber of Shipping certainly takes the view that the changes which have now been announced by the Government are detrimental to the shipping industry and will lead to a falling off in orders which, as has been pointed out on a number of occasions today, will have a serious effect on our shipbuilding industry because so many of the orders which we have had over the last few years have been by British shipowners.
  There are also the transitional arrangements for the shipping industry and the particular problems which it has had because of the terms on which the Government announced the change from 27th October, 1970. I understand that there have been some discussions with the Government on the problems arising from that change. I hope the Minister will be able to give us some information about the present position.
  Another thing which the Government have done positively, or, rather, negatively, is to announce today what one assumed from the terms of the Bill, that

  1449
  the Shipbuilding Industry Board will go at the end of 1971. I agree that the 1967 Act visualised that the Shipbuilding Industry Board, in terms of the various financial incentives which it would give to the industry, would have a limited life. This was in line with the Geddes recommendation that what was required was a reorganisation operation to be done quickly and with vigour by the industry itself, not something which would take a long time. Geddes recommended that the sooner the reorganisation was done the better. But it did not necessarily follow that when the reorganisation had been done the Government would disengage from the industry altogether, contract out, and say: "The job has now been done. The Board has fulfilled its purpose. It will now be wound up, and nothing will take its place."
  We had an extraordinary statement from the Minister to the effect that the Board would be wound up at the end of 1971. However, he was not able to tell us what would take its place. He had no idea about the administration of the credit scheme which had been done by the Board or what was to be done, even administratively, when the Board was wound up at the end of the year. More important than the administrative arrangements, the Minister was unable to tell us anything about Government policy towards the kind of things which the Board had been doing so successfully over the last few years.
  The job will not be finished at the end of 1971—we might have hoped that it would be finished, but it will not—and the Minister gave no indication of what was to take the place of the Board at the end of this year. Again, we are promised some kind of statement about it before the Summer Recess.
  Mr. McMaster: I am following the hon. Gentleman's remarks very closely, and I am obliged to him for giving way. A few minutes ago he charged the Government with lack of confidence in the industry. What could be a greater token of lack of confidence than suggesting that the Board should be carried on in perpetuity or, as his right hon. Friend suggested, that our shipbuilding industry can survive only if it is nationalised?
  Mr. Milan: I think that not for the first time the hon. Gentleman has mis-
  1450
  understood the point that I am making. There is nothing more damaging to the confidence of the industry—I should be willing to wait and see the reaction of the industry to the Minister's speech today in order to see who is right—than the uncertainty which will be continued by the kind of speech made today by the Minister. The obvious inability of the Government, after 10 months in office, to make up their mind about the industry will be the most damaging thing of all to arise from today's debate.
  The increase to £700 million in grants and guarantees is a disappointment, not only because of the amount itself but because of the unwillingness and inability of the Minister to give any indication whether this is the end of the road for guarantees or whether there will be something more in the future when the sum of £700 million is exhausted.
  The Minister said that the limit laid down in the Bill would take us up to ships for which the fabrication would be starting by the mid-point in 1973, but, as the hon. Member for Dorset, West (Mr. Wingfield Digby), and others, said, this is completely unsatisfactory to deal with the present position, because many of the orders which ought to be placed now relate to periods beyond the mid-point in 1973. The Chamber of Shipping has been making this point repeatedly over the last two months, and we have had an admission from the Minister today that the Shipbuilding Industry Board has been turning down applications, apparently for no reason other than that funds, even at the £700 million level, are completely exhausted. The Bill, therefore, provides no real extension to the guarantee scheme.
  I think that it was the hon. Member for Dorset, West who said that the Bill as it stands, even without looking further into the future, was a good deal less generous than the Labour Government's Bill of a year ago because the amount of money which ought to have been made additionally available is more than the difference between the £600 million proposed by the Labour Government and the £700 million in the Bill.
  I agree with those who have said that unless we get further assurances, and very quickly, from the Government about what is going to happen, orders will be placed abroad. This is particularly so where

  1451
  there is a full order book and shipowners are, naturally, concerned to get their place in the queue established as quickly as they can and cannot wait any longer for government decisions about credit terms. The delay in establishing a policy is particularly disastrous because orders lost now are unlikely to be regained, even if the Government make a further and more optimistic statement in a few months' time.
  My right hon. Friend the Member for Sunderland, North said that there had been a delay of up to two months, but the delay has been considerably more than that. We have been waiting for a statement of policy on the shipbuilding industry ever since the Government were elected to office last June. They have now been in office for 10 months. We have been expecting, and have been entitled to, a statement from the Government long before now, and the excuse that we are given now about the lack of parliamentary time is ludicrous.
  The Government have found the time to introduce legislation to denationalise State pubs. They have found the time to bring in the ridiculous Education (Scotland) Bill. I detail only those pieces of legislation which I particularly abhor, but we have been presented with all sorts of legislation which could easily have been put back to enable this Measure to be brought forward if the Government were really anxious to end the uncertainty in the industry.
  There has been uncertainty in the industry for all that time, and promises were made that the uncertainty would be ended when the Bill was debated. To get the kind of negative and uninformative speech that we had from the Minister this afternoon is merely to add insult to injury. Nothing has been said about marine engineering. Nothing has been said about the ship repair industry, even though we were promised that a statement would be made about it today.
  We had the extraordinary spectacle of the Minister saying that because of the Government's dilatoriness he intended to act illegally and anticipate the passing of the Bill by giving guarantees which he had no legislative authority to give. I say this for the Minister, that he had the grace to look shamefaced when he
  1452
  made that statement, but that is all that one can say on his behalf.
  There is, too, the extraordinary situation of U.C.S. On 11th February the Secretary of State for Scotland made an announcement about capital reconstruction at U.C.S. One assumes that the arrangements for that were made before the statement was made in the House, but two months have elapsed since then and we have had no more information, and when the Secretary of State is questioned about it he says that details have not been worked out. It is an extraordinary situation, and seems to be typical of the complete lack of decision in the Department about the industry.
  We have not been told whether, when the new statement is made, further legislation will be required to implement what is said. This point was made by my hon. Friend the Member for East Stirlingshire (Mr. Douglas). Will further legislation be required? Is this all that we are to have in the way of legislation, or will something else be produced before the Summer Recess, or perhaps after it? Once again a cloud of uncertainty hangs over the whole issue.
  What is particularly damaging is that this uncertainty will continue in an industry which is situated almost exclusively in areas of high unemployment. I represent an area of Glasgow where there is a high rate of unemployment. The situation in that part of Glasgow, and in the West of Scotland and elsewhere, during the last few months has been marked by an uncertainty and a lack of confidence the like of which I have not known for 10 years. This state of affairs is attributable, first, to uncertainty about the Government's regional policies and, secondly, to the inadequacy of the Chancellor's statement in October, and the inadequacy of statements made by the Government since then.
  We may argue about the merits of various policies, but it is a fact that there is a greater lack of confidence now than at any time during the last 10 years. With unemployment figures as excessively and disgracefully high in the areas to which I have referred, it is particularly abhorrent that we are to have added to it uncertainty about the shipbuilding industry. The uncertainty could easily have been removed if the Government had made up their mind about what

  1453
  policy they would pursue, and had been able to announce it this evening.
  If we cannot be given details of Government policy—and, obviously, they have not worked it out, or they would not have been so discreet about it, or, alternatively, as the hon. Member for Tynemouth (Dame Irene Ward) said, they have not been able to get Treasury approval for it—I hope the Minister will at least express confidence in the industry and a determination to see that it prospers and achieves a higher rate of production than it is achieving now. If we get such a statement, something might be saved from the debate on the Bill.
  Obviously, we have to support this Measure, because it does something useful, but we do so with feelings of bitter disappointment at the Government's having been unable to tell us what they have in mind for the future of this industry.
  8.10 p.m.
  The Under-Secretary of State for Trade and Industry (Mr. Nicholas Ridley): I should like to answer straight away the point of the reference of my hon. Friend the Member for Belfast, East (Mr. McMaster) about Harland and Wolff. The question of the management or capital reconstruction are matters for the Government in Northern Ireland, and I cannot help my hon. Friend with the answers he seeks, although I understand their importance.
  The second matter to which I should like to turn straight away is ship repair. I said at Question Time yesterday that either I or my hon. Friend would say something about this industry today. I apologise if it is inconvenient to hon. Gentlemen that it was decided to put this in the wind-up, but if any hon. Gentlemen wish further elucidation as I speak we still have a little time and I will try to answer their questions.
  As the House knows, the Shipbuilders and Repairers Council produced a report in August, 1970, which showed, sadly, that the industry had been shrinking for 10 years and to some extent put the blame on the changing world trade routes, which did not bring ships to our shores for repair so readily, and on the failure of our industry to hold its share of the traffic. The report was made public and I should like to mention five recommen-
  1454
  dations which it made and report on what the Government consider should be done about them.
  The first recommendation was that the industry should take steps to strengthen itself, that there should be much closer discussions between unions and management, and that there was scope for beneficial mergers, arranged by management, not Government. They commissioned at the same time a report from the Economic Intelligence Unit on the marketing difficulties of the industry and came back clearly with the answer that it was performance, the speed and reliability of carrying out repair contracts, which was the difficulty with the industry, and not the price at which it could tender.
  In a second recommendation, the report asked that the Government should exceed the two per cent. shipbuilders' relief to the industry, but since it appears that it was not cost which was the industry's problem, and since no economic case was made for this concession, the Government have not see fit to accede to it.
  The right hon. Member for Bristol, South-East (Mr. Benn), on Second Reading of the Shipbuilding Industry Bill in 1967, said:
  "… there is no intention that any of the finance made available under the Bill shall be devoted to ship repairing."—[OFFICIAL REPORT, 9th March, 1967; Vol. 742, c. 1887.]
  We still do not believe that there is a case for that now.
  Third, the report asked that we should find ways to persuade ship owners to repair their ships in this country rather than abroad, a sort of arm-twisting suggestion which I believe would be unacceptable both to opinion in this House and indeed to the interests of ship owners themselves, who must be allowed the freedom to decide where it is right and proper to repair their ships.
  Mr. Blenkinsop: Is the hon. Gentleman not aware that nearly every other country ensures that an extremely high proportion—in some cases 100 per cent.—of their ship repairs are done in their own country? Is this suggestion so unreasonable? Should it be dismissed quite so casually as the hon. Gentleman has done?
  Mr. Ridley: But hon. Gentlemen have also spoken a lot about the importance of a big and successful shipping industry. A

  1455
  large number of British registered ships never call at British ports. We are perhaps foremost in cross trades. Therefore, it would be a tremendous step for Government to take to try in some way to bring those ships home for repair when they may be ploughing several thousand miles from our shores. The reactions of the shipping industry to this suggestion are strongly against it.
  Mr. Willey: What is the position about the Japanese mercantile fleet, which is larger than our own?
  Mr. Ridley: Without notice. I cannot be exact about the rules about repairing in that country. I can only say that the Government believe that a measure of this sort would not be in the interests of the Merchant Marine or of the British repairing industry in the long run.
  Mr. Douglas: On this point, have the Government made representations to the shipping companies to see why it is, even when the ships come fairly regularly to British ports, that they are not brought here for repairs and refits? As the report said, this is a problem of marketing. Do the Government intend to have some discussions with the shipping companies, or are they just going to wash their hands of it?
  Mr. Ridley: I will come to that in a moment.
  The next recommendation dealt with the rating and taxation of dry docks. There are cases before the courts on both these matters, and it is impossible to comment on them until they have been decided. But the Government are keeping a keen eye on this, because clearly this is an important matter.
  The last matter was the question of fall back pay. The up-and-down nature of employment in the ship-repair industry has costly results for the industry, and the redundancy pay and contracts of employment legislation has in the past made difficulties for this industry. The House would not like to exempt the ship-repairing industry from the standard behaviour in these matters towards the work force, and we are not considering anything of the sort. But if the industry can find ways which would help to solve this problem, either with the unions or by some acceptable relaxation of regulation,
  1456
  we should be only too pleased to try to help them. But we do not accept the industry's case that special Government funds should be made available to cover these payments because it is an exceptional industry and incurs them more often than others.
  The right hon. Member for Jarrow (Mr. Fernyhough), who courteously explained why he could not stay, and other hon. Gentlemen have felt some apprehension about this industry. I know that, in the industry, it is sometimes thought that it is unfortunate because it has not received the same degree of aid as shipbuilding. But the Economic Intelligence Unit did not believe that cost was the industry's problem and talks with shipowners, perhaps at second hand from myself, have led me to understand that there is a feeling among shipowners that it is this question which is paramount in their minds, as to where to place repair contracts.
  But what is encouraging is that the outlook does seem to be improving in a number of firms. Indeed, some ship repair firms are doing well. It appears that we now have a competitive edge in this industry, and if the speed and reliability of the work can be improved, the industry should have a considerable future without any subvention from Government.
  I turn now to the steel price question, which was the subject of considerable debate. It is general knowledge that the original request from the British Steel Corporation was for a 22·2 per cent. increase in shipbuilding plate, but that has now been brought down to about 10 per cent., which I believe will be of great benefit to the shipbuilding industry in future.
  On top of that, the Government have waived the credit admissibility rules so that it will be possible on occasion to import steel to manufacture ships which are subject to credit arrangements. The point of this is that it will introduce a thoroughly competitive atmosphere and shipbuilders will be able to buy their steel on the most competitive terms available. If we have to live in the highly competitive atmosphere of shipbuilding, it is clearly right that the cost of plate should be equally highly competitive. It is not only a question of cost; all sorts

  1457
  of other factors come into it, the terms of delivery, quality, and so on.
  Now, the question of extending credit to urgent cases if the Bill receives a Second Reading tonight. We have waited, for reasons of courtesy to the House, and have not extended credit up to the £700 million limit because it is wrong to anticipate legislation in that way. On the other hand, there is nothing illegal in so doing, and right hon. and hon. Members who have used the word "illegal" are quite wrong. It is a matter of courtesy to the House. If the House were to agree to the principle of the Bill by giving it a Second Reading, I see no reason why, as these guarantees are urgently needed, my right hon. Friend should not now issue them.
  That would not be to anticipate legislation in any sense to the same extent as the right hon. Member for Bristol, South-East did when he appointed the members of the Shipbuilding Industry Board six months in advance of the Second Reading of the Bill which brought the Board into existence. I do not think that we should greatly complain about that, especially as money was not involved on a large scale. But I must ask hon. Members whether they want us to use this credit now, because it is urgently needed by shipowners and is having an effect on the liquidity of some shipbuilders who need credit instalments for their cash flow purposes.
  Mr. Willey: I am concerned about this. It has been strongly argued in the debate that we may have to go beyond £700 million. Do I understand from what the Minister has said that he will be able to do that and that he need not come to the House with legislation?
  Mr. Ridley: There is no legal impediment to anticipating the passage of the Bill. The only reason that the Government have not done it so far, before Second Reading, stems from the obvious question of courtesy to the House.
  Mr. Willey: I am putting it to the Minister that he may find that he ought to exceed the £700 million after the Bill has become law. I gather from what he said that he is able to do that. This is very important, because if the industry is in troube all he need do is make a statement that the guarantees can be given.
  Mr. Ridley: May I put that right? It would be wrong and totally illegal for the Government to extend guarantees beyond the £700 million limit covered by the Bill. Nor would it help very much if the banks were not prepared to provide the money, for it is not just a question of the Government's willingness to provide guarantees; there is also the question of whether the money would be forthcoming.
  Mr. McMaster: Hon. Members on both sides strongly questioned whether £700 million would be adequate, particularly in view of what was said in the opening Government speech. Will my hon. Friend consider whether an Amendment could be introduced to increase the £700 million, since it appears to hon. Members on both sides that the proposed limit is totally inadequate, and it would not cost the Government any money anyway?
  Mr. Ridley: I am coming to that, if my hon. Friend will have patience. I have quite a bit to say about the future. The Bill takes us to a limit of £700 million, which, with the £25 million repayments which are expected, will be enough to produce credit for all home orders where work starts by the middle of 1973. There is no question whatever but that anyone who wants to draw credit from the hank, provided that he has the necessary guarantee and documentation, will be able to do so, as far as we can judge, right up to the middle of 1973. The total amount of credit so far drawn is, I think, £258 million.
  Mr. Small: With this knowledge before the shipbuilding community, there will be a bunching and administrative problems created thereby before the S.I.B. is wound up this year.
  Mr. Ridley: I shall be grateful if hon. Gentlemen will allow me to complete what I have to say. I think that they will find their questions answered and that they will be reassured.
  I shall stick for the moment to the question of drawing credit, and I shall then come to the question of provision for the future. We have, as I say, ample credit which can be drawn for any order up to the middle of 1973. Within the totals, there is a certain amount available for any ship which might be required to

  1459
  be delivered early, because a berth was found for early delivery, and this will apply in the case of small ships. I feel that the House will agree that it is right to use the available credit under the £700 million limit for those ships which may be built and in respect of which, therefore, money may need to be drawn.
  As my hon. Friend the Member for Dorset, West (Mr. Wingfield Digby) said, it is the banks which finance these credits, and the demand for credit of this type creates problems for the banks. Fixed-rate lending is tending to pre-empt an increasing proportion of the banks' resources, as the right hon. Member for Sunderland, North said. That is the reason for the ceiling in the Bill. It is not purely a decision which can be attributed to the Government. It is clearly right and proper, therefore, that beyond the ceiling of £700 million the Government will have to do something else for the future, and, as the hon. Member for East Stirlingshire (Mr. Douglas) said, there will have to be new arrangements for underwriting the guarantees after this stage is complete.
  On the question of home credit after the £700 million, I hope that I can convince the House that the cries of alarm from hon. Members opposite are not justified. We cannot tell the House today the terms on which finance for shipbuilding will be available. The Government fully recognise the importance for the industry of assured credit facilities and we hope to make a statement on the future arrangements before the Summer Adjournment. I appreciate that the hon. Gentleman would like me to be even more forthcoming, and I should like to be. But I remind the House that the money comes from the banking system, although backed by a Government guarantee, and I ask right hon. and hon. Members to accept that it might be more helpful to the objective which they seek, and which we all share, not to press me to anticipate further what facilities will be available.
  Mr. Dell: The Minister is evidently indicating that in future a different technique may be used for home orders from that which was used in the past. He evidently cannot say what that technique will be. However, can he give an assurance that it is the Government's intention to provide British shipowners ordering
  1460
  ships in British shipyards with terms which are competitive with those that would be available if they placed those orders abroad?
  Mr. Ridley: I think that I answered that question entirely when I said that I cannot tell the House today the terms on which finance for shipbuilding will be available in future. But I should have thought that any shipowner who reads what I have said today will feel that it is not so difficult for him to consider which of the alternatives before him he would like to choose if he wishes to order a ship.
  Dame Irene Ward: Why cannot my hon. Friend say why he cannot tell us. If he just told us why we could perhaps take it in.
  Mr. Ridley: The reason why I cannot go further than that is that the matter has not been decided. I have said that I cannot yet tell the House the terms on which credit will be provided in future. But, as I have also said, it is perfectly clear that there is enough credit to last until 1973. So I do not see why the House is so terribly keen to know how the terms will be arranged, in the period long before that.
  Mr. Dell: The Under-Secretary seems to imagine that on the basis of his statement British shipowners will be able to make decisions, but his statement is that he cannot tell them the terms on which the future guarantees, by whatever method, will be available. Surely, the implication is that British shipowners will take the terms they know they can get abroad rather than wait for uncertain terms which the Government may or may not announce in the future.
  Mr. Ridley: The right hon. Gentleman is doing a great disservice to the shipbuilding industry by trying to confuse and twist what I have been saying, which is perfectly clear. Never have shipowners been able to know the terms on which fixed rate credit would be available in the future. The interest rate went up in the middle of last year, but they were not told that five years before. The exact rate of interest on which credit might be available, or the terms of any sort, have never been announced five years ahead. I implore the right hon. Gentleman not to try to make out something which was

  1461
  intended to be clear and helpful to be the reverse.
  Mr. McMaster: Listening to my hon. Friend carefully, I am in some doubt. He said that he would increase the £700 million guarantee because the banks may not be able to lend the money. There is no guarantee that they will lend the money, is there? All that my hon. Friend has to do is to increase the guarantee, and whether the banks have the money and are willing to lend it is nothing to do with the Government. Therefore, is there an undertaking that moneys will be made available by the banks up to the limit of the Government's guarantee?
  Mr. Ridley: My hon. Friend should know full well that it is the money the shipowners want, not the guarantee. The guarantee is by no means the hardest part of the operation. The problem which must be faced up to is providing these very large sums of money at a fixed rate against a background of liquidity.
  I should like to make one further point about credit before moving to the industry as a whole. The shipbuilding industry has an ample stretch of orders ahead. The order books are very long and very fat. So there is no question but that there will be a complete continuation of work, and there is no suggestion that this will affect the shipbuilding industry.
  Mr. Douglas: The hon. Gentleman has had a number of interruptions, and I apologise for interrupting him again. He has given certain figures which I understand represent a ceiling of credit guarantee of £700 million. That is what the Bill is about. He said that about £240 million has been drawn. Can the hon Gentleman tell us how much of this cash has already been pre-empted? How much have the banks given in terms of credit on the assumption that this Bill will be passed? Has he any figures on that?
  Mr. Ridley: It is difficult to give an accurate figure because there is a large block of orders under consideration. If they were all to be granted then it would bring us quite near to the limit. If, on the other hand, they are not all granted, and there are uncertainties of sufficient importance for it to be misleading to try
  1462
  to quantify an answer, then there would be much more leeway.
  I believe that I have made the position entirely clear and I hope that it is clear to my hon. Friend the Member for Tynemouth (Dame Irene Ward). I hope that it is clear, even though it may not be entirely acceptable to some hon. Gentlemen opposite.
  My hon. Friend was taken to task a little for not saying enough about the international aspects of shipbuilding. It has been said that the domestic industry will be at a disadvantage compared with shipbuilders elsewhere because of the extent of overseas government support. This is an area in which comparisons are fraught with difficulty. Moreover, the importance of subsidies can be exaggerated. Differences in the costs of material, labour, productivity and finance are factors of great importance, difficult to quantify. Our experience over the past five years demonstrates that substantial financial assistance does not necessarily ensure success.
  The right hon. Member for Birkenhead (Mr. Dell) suggested that nothing had been done about international subsidies. It should not be overlooked that some countries have already reduced the rate of assistance or protection to their industry. France and Italy have been reducing their building subsidies. Only five years ago the French building subsidies were about 20 per cent. of the cost of a vessel. Now they have been reduced to 5 per cent. Japan has removed her tariff on the import of vessels over 10,000 tons and intends to widen her home credit scheme, currently restricted to domestic orders in domestic yards, to cover orders placed by Japanese shipowners abroad. This is a great opportunity for our industry to attract Japanese orders.
  There is also the agreement on levelling up credit rates which was made last year. All this shows the progress being made in ironing out international subsidies. While the effect of subsidies can be exaggerated, I would not dismiss them as unimportant. Their existence is damaging to fair competition. They can also represent a waste of resources and while there are real difficulties in the way of rapid progress towards an elimination of Government aid the current programme of O.E.C.D. is encouraging.

  1463
  All the main shipbuilding countries are co-operating to find a basis for reducing assistance in a fair and equitable manner. This is necessarily a complex task but I believe that the work now in train will in due course result in a further agreement to complement the understanding on export credit for ships. For our part we intend to give full support to these discussions to ensure that they reach fruition.
  Some hon. Members appear to think that we should continue indefinitely a system of subsidies for the United Kingdom shipbuilding industry. To do so would clearly undermine the international discussions to which I have referred and this would damage the longer-term interests of the industry in turn.
  As has been pointed out, the whole Geddes concept was a once-for-all injection of funds for the industry to get itself on its feet. The life of the Shipbuilding Industry Board could not be extended beyond the end of this year even under the Act passed by the party opposite. It would have required new legislation. I will quote from what the right hon. Member for Bristol, South-East said when he introduced the Bill. He will agree that he shared this view strongly at that time.
  He said:
  "If I had to summarise the Geddes Report in three sentences, I should do it like this. First, the competitive success of the British shipbuilding industry depends on the industry itself, the managements and workers in it. Secondly, the Government should help, but all public expenditure should be directed to and conditional upon the reorganisation of the industry. Thirdly, the job is urgent: the industry must not look forward to aid on a continuing basis. This is a job that has now to begin."—[OFFICIAL REPORT, 9th March, 1967; Vol. 742, c. 1778.]
  Mr. Benn: Before the hon. Gentleman concludes the reference to what I said, he will recall that that speech was made, I think, in 1967 on the recommendation of Lord Geddes himself, which we accepted. But nothing in that speech precluded the possibility that at the end of the period we would see where we were and take necessary measures, and nothing in that speech indicated what we have heard today: the dismantling of the whole policy towards the shipbuilding industry, no help whatever for ship re-
  1464
  pairing, and the credit scheme to be brought to an end, with no indication of what is to happen thereafter.
  Mr. Ridley: The right hon. Gentleman knows that his last sentence was wrong and mischievous. As I remember, the credit scheme introduced by the previous Government had a limit of £600 million with no prolongation of the Shipbuilding Industry Board or any other different policy from what I have been talking about.
  But, whatever may be the case, this phase has come to an end. The industry has had this chance. I do not think it is wrong to go over the effects of giving the industry this chance, and I should like to do that. But at this stage I join with hon. Gentlemen in paying a very real and warm tribute to Sir William Swallow and his Board, and to Mr. Barker, the director. The only reason why my hon. Friend did not do this earlier was that he did not know whether it was right to pay a warm tribute nine months before the end of the life of the Board, but since other hon. Gentlemen have decided to do so, I am sure that it would be right that we should add our grateful thanks for the hard and intelligent work that its members have done for the industry.
  The right hon. Gentleman, and other hon. Gentleman, thought that the Board should continue longer. He seemed to say that there should be no rescue operations—there we agree with him—but that there should be a sustained period of aid for the industry. I wondered, en route, how long he thought that this sustained aid would need to continue. For the last four years, the industry has had nearly £50 million of State capital, and the home credit scheme has now taken £258 million of advances, and, in addition, £15·7 million has been spent on shipbuilders' relief. This adds up to £65 million of capital and £258 million of loans from the banks.
  This industry represents 1 per cent. of our manufacturing capacity. Production is still lower than the 1954 post-war peak of 1·5 million gross registered tons. In 1970 it was 1·3 million only. Our world market share between 1954 and the present time has fallen from 27 per cent. to 6·5 per cent.
  Mr. Benn: Would the hon. Gentleman give the figures for 1966, when the Geddes

  1465
  recommendations first began to be implemented?
  Mr. Ridley: I do not have them with me, nor are they in my head. If the right hon. Gentleman would like to look them up, I will give way to him so that he can give them.
  Productivity does not appear to have risen. Our productivity is lower than that of our rivals, although I agree with the hon. Member for Glasgow, Craigton (Mr. Millan), who said that it is very difficult to quantify. In the three years from 1967 to 1970, wages in the industry have risen by 34·6 per cent., which is more than the average for all wages and the average for the engineering industry. This has been the cause of the fixed price contract losses which have brought the industry into difficulties and affected its liquidity.
  The hon. Member for East Stirlingshire seemed to think that the Government was making an attack upon all capital-intensive industry. But what is doing that is wage inflation at this rate, because often it is two or three years, or even more, between the need to tender for a ship and having to pay the final wages Bill for work on it.
  During this period the number of days lost per 1,000 employees through industrial disputes went up from 750 in 1960 to 1,975 in 1970, a staggering record, the figures being almost trebled.
  A number of comments have been made about the strike on the Tyne. I do not wish in any sense to intervene or comment on it, except to say that this continued record of strikes not only damages the reputation of the industry but greatly adds to its costs, and costs must be got down if the industry is to be competitive.
  I can sum up the Government's policy so that my hon. Friend the Member for Tynemouth is in no doubt about it. My hon. Friend the Minister for Industry made this policy quite clear, but it may be helpful if I go over it. Since coming to office, the Government have given an extra 1½ years' breathing space, until the end of 1971, for the existing weapons to remain in existence—the S.I.B., grants and loans, credit and so on—and loans will still be applied by the S.I.B. if companies wish to claim them.
  We have decided to give three more years of R.E.P. until the date when it is
  1466
  due to come to an end. We have decided to continue with the credit scheme, and I have spoken of the difficulties of this, particularly for the future. We have decided to continue the 2 per cent. shipbuilders' relief. We have also decided to provide a competitive situation for the provision of plate for shipbuilding.
  On the other hand, we have decided to end the S.I.B. at the end of this year and to provide no further grants or loans apart from those already undertaken by the S.I.B., and, of course, apart from the assistance which is available to all industries operating in the development areas.
  The right hon. Member for Sunderland, North was right—I greatly admired his speech—when he said that national will and determination was required. He seemed at the end of his remarks to say that it should be will and determination on the part of the Government. I believe that it must be will and determination exercised by everybody concerned with the industry.
  The conditions are there, the market is buoyant and order books are long. The Government are providing far greater help for this than for many other industries. I see no reason whatever why this industry should not go ahead and succeed, provided it has the national will and determination for which the right hon. Member for Sunderland, North called.
  Nothing would be more disastrous than to follow the advice of the right hon. Member for Birkenhead and nationalise this industry, so plunging it into the uncertainties of nationalisation. Sufficient has been said about the harm caused by uncertainty. In view of the history of the steel industry, I would have thought that nobody would advocate that treatment for shipbuilding considering what happens once an industry becomes the shuttlecock of politics.
  Further to the remarks of the hon. Member for East Stirlingshire, I see no reason to believe that changing the name of the owner on the gate would solve the problems of this industry.
  Mr. Dell: Would the hon. Gentleman indicate to the House whether there were any political motives behind the assistance to Harland and Wolff? Would he indicate to the House whether there were

  1467
  any political motives behind the assistance to Yarrow? Would he indicate to the House whether there were any political motives behind the capital reconstruction of U.C.S.?
  Mr. Ridley: Would the right hon. Gentleman indicate to the House whether there were any political motives behind his suggestion that the Government should nationalise the shipbuilding industry?
  Mr. Dell: I hope that the hon. Gentleman will answer my questions.
  Mr. Ridley: The right hon. Gentleman knows full well that there are all sorts of considerations in a Government's mind. What I want to know from the Labour Party is whether hon. Members opposite intend this to be their policy in future. If they do, the nation will know and pudge. I believe that the Government's policy is quite clear and that it gives great opportunities to the industry, and I therefore hope that the House will give the Bill a Second Reading.
  Mr. McMaster: I must admit that I am very disappointed. In reply to questions from both sides of the House, my hon. Friend said earlier that he could not increase the £700 million because of the lack of availability of money from the bank. But he knows as well as I do that this money is advanced by the banks, on the Government's guarantee, for the purchase of ships built in this country. The money is to be spent in this way and one way or another it will find its way back to the banks where, subject to the liquidity ratio, it can be re-lent, so that the banks do not have to find a penny and can get their 7 per cent., less what they have to pay on deposits. Why do we have to stick to £700 million? Could it not be increased to £1,000 million? The money goes round, and my hon. Friend knows it.
  Mr. Ridley: My hon. Friend seems to have found a form of financial perpetual motion. I do not believe that such a thing exists, and I hope he will ask the banks and discuss the matter with the Committee of the Clearing Banks. I am not prepared to discuss the willingness of other people to lend
  1468
  their money. It is entirely a matter for them to explain to him.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Standing Committee, pursuant to Standing Order No. 40 (Committal of Bills).

SHIPBUILDING INDUSTRY [MONEY]
Queen's Recommendation having been signified—
Motion made, and Question proposed,
That, for the purposes of any Act of the present Session to amend section 7 of the Shipbuilding Industry Act 1967, it is expedient to authorise any increase in the sums payable out of moneys provided by Parliament or into the Consolidated Fund which is attributable to any amendment of the section increasing the limit of £400 million imposed by subsection (5), as amended by section 1 of the Shipbuilding Industry Act 1969, on the Secretary of State's liabilities on guarantees given under section 7, but so that the new limit shall not exceed £700 million less the amount of any sums which have been paid by the Secretary of State to meet a liability falling within the subsection and have not been repaid to him.—[Mr. Ridley.]
8.53 p.m.
Mr. Edmund Dell: I should like to ask the Government some questions about this Money Resolution. The Under-Secretary left us in some doubt on the subject of legality and I should like to follow the questions put to him by my right hon. Friend the Member for Sunderland, North (Mr. Willey).
The Under-Secretary seemed to be saying that it would be illegal to go beyond this £700 million because there was no legislation, but not illegal to go beyond the current legislative limit of £400 million, although there is no legislative authority to do so. I wonder whether he would explain what is illegal, what is done simply because it is courteous to the House, and from where exactly the limits of this operation derive in law so that we may be quite clear what he meant when he said that what the Government were proposing to do after Second Reading was not illegal. My right hon. Friend the Member for Sunderland, North was making an important point. If it is true on the face of it that it is not illegal to go beyond the current

1469
limit of £400 million, why will it be illegal to go beyond the next limit of £700 million if the interests of the industry so require?
Secondly, as he knows, there have been representations from the Chamber of Shipping about these guarantees expressing concern about the fact that orders placed by British shipping companies in British shipyards have not been covered in full and that, apparently, it is not proposed to cover them in full. For example, the owners of four container ships have been told that only the vessels themselves may be covered, but not the containers, which are essential for the operation of the ships. Exactly what is the limit of operation of these guarantees? Do they cover orders in full, and to what extent do they not cover the orders?
I am sorry to revert to the next point, but it must be clear to the hon. Gentleman that he has left the House in some doubt about what is to happen after May 1973 when the £700 million expires.
One of the original intentions behind these credit guarantees was that eventually, they would rotate—in other words, enough guarantees would be released in order to enable the Government to cover new orders. Do we understand from the hon. Gentleman that that ambition is now dead, that these guarantees will never get to the point of rotating and that some other method will substitute entirely? In other words, is this the case not just for any requirements above the £700 million which may be necessary in future but over the whole range? Is it the case that the £700 million of credit guarantees will gradually come to an end altogether and that this system will play no part in the further support of orders placed by British shipowners with British yards?
The Under-Secretary of State for Trade and Industry (Mr. Nicholas Ridley): I will do my best to answer the questions put by the right hon. Member for Birkenhead (Mr. Dell), although I shall not go over again the ground I have covered in relation to the future of the credit scheme.
First, the Government can do anything they wish legally unless they are expressly forbidden by legislation to do so. I apologise for giving the right hon. Gentleman a wrong answer earlier. I am advised that we could give credit guarantees to
1470
any amount so decided without legislative authority and be strictly within the law. It is clear, however, that it is right that we should obtain authority for so doing. We should particularly obtain legislative authority because if there is a default and credit is not paid we would have to present the bill to Parliament and would have to be able to justify to the House that it should cover that bill. Therefore, there is no reason why we should not go over the £700 million. But I believe that it is perfectly justifiable, once a Bill has obtained its Second Reading, to advance guarantees against the £700 million limit contained in the Bill, and that is what we intend to do.
Secondly, the credit is available to cover all the equipment of a ship. It can be used to cover containers. The limit of £400 million has been biting hard and the only question has been whether it is better used, in view of the short supply of credit, for new ship orders or for containers. We are at present consulting the Chamber of Shipping, with the introduction of the Bill, to see what it would like to do in this respect, although the Government will eventually decide how to use the money.
Thirdly, the right hon. Gentleman asked whether we would substitute a new scheme for the existing credit. He himself knows the answer. It is impossible to do anything about credit which has been advanced to an amount of over £200 million and therefore it would be impossible to consider substituting an existing credit mechanism for a new one.
Mr. Dell: I do not think the hon. Gentleman has taken my point. The intention was for these guarantees to rotate —in other words, as guarantees fell out because the ship was paid for, that value of guarantee would be used for new orders. Obviously, there would have to be a certain minimum value of credit guarantees available before that could happen and a certain time would elapse. That was the original intention. Has that intention been clearly abandoned? The hon. Gentleman suggested that beyond the £700 million there would be a new system, although he could not give the terms. I was asking whether the £700 million which would be available would be allowed to rotate—that is, fill in some of the gaps as part of it is released—or whether the whole thing would be

1471
abandoned and everything would depend on the new scheme.
These are fairly clear questions which derive from the nature of the credit guarantee scheme and I should have thought that the hon. Gentleman could answer them.
9.0 p.m.
Mr. Ridley: With leave, may I say that the fund is rotating and that when the money is repaid it becomes available for relending. We estimate that £25 million will become available for relending this year, which will increase the amount of the credit from £700 million to £725 million, although the ceiling level is not affected. The right hon. Gentleman is right in saying that the scheme can rotate.
I have said many times that I do not yet know, and therefore cannot tell the House, the terms of any credit scheme which may be announced later. For that reason, I cannot answer the right hon. Gentleman's second question.
Mr. Bruce Milian: I should like to pursue the question of the legality or illegality of what the Government intend to do. The Under-Secretary of State has said that it is not necessary to have legislation because there is a general Government power to cover guarantees. He is saying that he can act as he likes unless we tell him that he must not go beyond a certain limit.
However, I should have thought that in the Money Resolution there was a specific debarment against the Government going beyond a certain limit because, unless the Resolution is completely meaningless, it says in the third last line that
"the new limit shall not exceed £700 million".
I presume that during the passage of the legislation which laid down the present limit of £400 million the House solemnly passed a Money Resolution saying that the limit should not exceed £400 million. The House said to the Government, "You have authority to go to £400 million but not beyond." Now we are giving the Government authority to go to £700 million but not beyond it.
1472
Either the Money Resolution is completely meaningless or what the Secretary of State has said is not accurate. Can the hon. Gentleman reconcile what he has said with what he is asking us to pass in the Resolution?
Mr. Frederick Willey: I support what has been said from this side of the House. This is a matter of considerable constitutional importance. I am prejudicing myself in a way because I am anxious that the industry should have the money, but we cannot let the Government behave like this.
The Government must realise that they cannot spend a penny unless they obtain Parliament's authority. The Money Resolution refers to "moneys provided by Parliament". That was the position before, and it is the position now. The Comptroller and Auditor General should be alerted to this matter. If guarantees have been given, the position should be exposed. All that the Secretary of State is saying is that if a guarantee has not been given he will guarantee the money out of his own pocket. It is exactly the same position as the position which exists between a local authority and the district auditor, and the House should be alive to it.
We cannot tolerate this sort of slipshod administration, with the Government saying, "It does not matter. There will be a Bill some day—this week, next week—but we are sure to get it. Therefore, we can go ahead in a slipshod administrative way". This is vitally important, because the control that Parliament exercises over the Executive is that of finance. The Executive cannot spend anything unless it has parliamentary approval for it. Here we have expressed parliamentary approval subject to a limit. If the Government give guarantees, they must be covered by legislation backing those guarantees. We should not let this go idly by.
Criticism was made earlier of the arrogant way in which the Department disregarded the opinion of the House of Commons. Now the Minister says, "That is the view I take." I have been here longer than the hon. Gentleman and he might not be as aware as I am of the traditions that the House has established over a long time. I cannot

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remember a Minister ever coming to the House and saying, "We are considering legislation, but do hon. Gentlemen mind if we ignore it and give a few guarantees?".
Mr. Ridley: The right hon. Gentleman is wrong.
Mr. Willey: If I am wrong, let us have an explanation. The Secretary of State is here and the obligation is upon him to give the explanation, he is in charge of the Department—or let us have a Law Officer. Let us have someone who can satisfy the House about what after all is the cardinal control that the House exercises over the Executive.
Mr. Ridley: The right hon. Gentleman may be aware that the previous Government advanced £7 million to Upper Clyde Shipbuilders not very long ago and never sought legislative authority to do so. Can he explain that one away? Since he claims such great knowledge and wisdom in constitutional matters, can he tell us by what authority the Labour Government did that?
Mr. Willey: First, we are in the unusual position of discussing a Money Resolution without a Treasury Minister being present. That point was taken at the opening of the debate. Secondly, there is express legislative provision here. I am not concerned with what was done about U.C.S., I am concerned about what is done in regard to Section 7. If the hon. Gentleman is saying that he can give these guarantees without parliamentary authority this is a matter which we can raise if the £700 million is exceeded, but from the Money Resolution it appears that the Minister is completely wrong.
Mr. Dick Douglas: I am not wholly conversant with financial procedures in this House, but I have some regard for financial probity. If we have exceeded the guarantees of £400 million, do I understand that the Government are liable in law, if there should be any default, only to pick up the pieces for £400 million? When the Bill becomes law, will the Government be liable in law only to pick up the pieces for £700 million? Will there be no legal liability for the Government to pick up the pieces in excess of £700 million? The Minister is giving a misleading impression to the House and to
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the people who might be obliged to give loans to companies wishing to build ships if he is saying that he will be able to exceed the £700 million.
The hon. Gentleman appeared to be misinterpreting the rôle of this House in the control of Supply. I have already confessed my lack of knowledge of the procedures of the House, but I would ask the hon. Gentleman if either the accounting officer in his Department or indeed the Comptroller and Auditor-General was consulted before this Bill came before the House?
Mr. Stanley R. McMaster: To return to the point relating to the £700 million limit, I would suggest to the Under-Secretary of State that it is not sufficient when dealing with a Bill of this importance to say "Go and talk to the joint stock banks about it".
It is a well known principle of banking that every advance creates a deposit. The loans are guaranteed by the Government, and a loan is made to the shipowner who has placed the order for a ship. He takes the money as he requires it to pay advances on the building of the ship. The money is then paid to the shipbuilder, who pays it out either for steel or in wages. The money is paid in that way, and it goes back into the banking system. The banks have the same total of money to re-lend subject to their liquidity ratio, which usually amounts to a third. In other words, the money rotates. This is normal banking practice. It is the way in which business has been financed for many hundreds of years.
I cannot see in logic why the Government say that they cannot guarantee more than £700 million. I suggest that my hon. Friend goes and talks to the joint stock banks about it. Why should the figure of guarantee not be increased? In concluding the Second Reading debate my hon. Friend said that he could not tell what in future would be the interest charged on the money. He does not even know what money will be available for lending by the joint stock banks. If in six months or a year's time the joint stock banks found that they could lend up to £1,000 million to the shipyards, would another amending Bill need to be introduced into this House? Why should the total limit not be increased at this stage even above what the joint stock

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banks are willing to advance? Would my hon. Friend address his mind to this matter?
Mr. Milan: The way in which the Government have drawn this Money Resolution is expressly designed to prevent the hon. Member for Belfast, East (Mr. McMaster) or anybody else increasing the limit in Committee. This is another objection to the present drafting of the Money Resolution.
Mr. McMaster: Yes, I accept that point.
9.15 p.m.
Mr. Anthony Wedgwood Benn: I beg to move, That the debate be now adjourned.
I take this step because in the course of this debate the House has heard from two Front Bench speakers three or four totally contradictory explanations. First, the Minister for Industry began by saying that he thought he should tell the House that after the Second Reading he would be advancing the credit. He then indicated that if there was any opposition from this side of the House he would not do so, but that if we were prepared to approve the Bill without a Division he would be willing to authorise the credit. He well knew that we wanted this to be done. I said that this was illegal.
In summing up, the Under-Secretary of State said that this was not to be the case and that the Government could do what they liked as far as I understood it, resting on a prerogative view of Government which is unusual. He cited other cases about the Shipbuilding Industry Board which are not on all-fours with this. He then said that it would be possible, with the authorisation of this Bill, to give credits of more than £700 million. [HON. MEMBERS: "No."] Yes, he did. He said, "On exactly the same basis as Industry said that we can go ahead now in anticipation of Parliament, since the Government can do what they like there is nothing to prevent their going beyond the £700 million unless Parliament expressly prohibits it." But that is exactly what the Money Resolution does. It says:
"…shall not exceed £700 million."
These are complicated matters, but, inadvertently, the hon. Gentleman misled
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us in what he said. This is important. I will not got into any discussion of banking matters that the hon. Member for Belfast, East (Mr. McMaster) raised, be-caused I am not competent to do so. But there is genuine anxiety about the amount of credit and whether it is sufficient.
If this Money Resolution goes through tonight, we shall have legislated, since in a sense the Money Resolution limits the amount of money available, to make it impossible in Committee even to urge any further expenditure, because the Government have the power to limit the amount that Parliament can recommend should be spent. If we pass the Money Resolution tonight, we rule out the possibility of any extension beyond £700 million, plus the rotating fund.
Since the Money Resolution is in the name of the Financial Secretary to the Treasury, since very important legal matters arise on which we may need the advice of the Law Officers, since it is of no consequence whether the Resolution is passed tonight in that the Minister will give credit anyway when the Bill has received a Second Reading, which it has already, and since the Resolution is exempted business which could be put on at 10 o'clock any night, when five minutes from the Financial Secretary could resolve our differences, I seriously suggest that the debate on the Money Resolution be adjourned so as to give the Government an opportunity to put before us a clear statement of the position, and we can then proceed in the light of that.
The Minister for Industry (Sir John Eden): I do not think it would be helpful to proceed in the way that the right hon. Gentleman has suggested. I believe it would be more helpful to attempt again to go over the ground and try to answer his points.
As I understand the position, the Bill relates simply, strictly, and, in my view, righly to the powers of my right hon. Friend the Secretary of State for Trade and Industry to give guarantees and to the possible consequences for parliamentary approval of expenditure in the event of a guarantee being called. That is the important point. In this regard, there is no difference here from previous Acts which the right hon. Gentleman's Administration brought before the House. The

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Bill, after all, is a simple amendment of the 1967 Act.
In general terms, if one decided to give guarantees against bank advances, one could go up to any figure that one chose. But where one is limited is that, in the event of that guarantee being called, Parliament has not authorised the expenditure beyond the sum of money set in the Bill.
Mr. Benn: Obviously, I have not the record before me, but I take it that the Money Resolution on my last Bill to become an Act was identical to this, except that it said:
"…shall not exceed £400 million."
That being the case, the Minister has now said that the guarantees that he would be giving beyond the £400 million that he is ready to give now that the Bill has received a Second Reading would be illegal were they to fall due for the Government to pay. So, in anticipating the Money Resolution, the Government have given guarantees that it would be illegal for the hon. Gentleman to discharge by making payments, but not, he claims, simply to give. This raises the point made by my right hon. Friend the Member for Sunderland, North (Mr. Willey). This is why, with the best will in the world, we must have a lawyer or a Treasury Minister here if we are to dispose of the matter.
Sir J. Eden: I understand the pressure from the right hon. Gentleman. The difficulty or the difference of opinion arises—I am doing my best to try to make this clear—on the use of the word "illegal", which is taken to cover the proper procedures by Parliament for the control of expenditure which, in constitutional terms, is something different.
There are two points. The first is whether it is legal or illegal. When this was first used, it was in a much wider context. It would not have been illegal to have authorised expenditure because it could be drawn from the Civil Contingencies Fund or something like that. In the examples which have been given, this has been done by the previous Administration and by others. In that sense my hon. Friend was using the expression "not illegal". I hope that I have made that point clear.
Concerning the control of Parliamentary expenditure—this is the important
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aspect in considering the Money Resolution—in the event of guarantees being called, the expenditure may not exceed £700 million. If, before the Bill becomes an Act, guarantees were called, those guarantees could not exceed £400 million, because that is the amount in the Act. The right hon. Gentleman knows that Parliament has authorised the issuing of guarantees up to a total of £400 million in previous legislation.
Mr. Wiley: I am still not satisfied. I understand the hon. Gentleman to be saying that this is not illegal or improper because if this unlikely event occurred we could scratch up the money from the Consolidated Fund or elsewhere. I do not accept that. I know of no grounds for believing that if Parliament makes an express provision the Government can scratch around and find some fund to save themselves. This would be denying the whole purpose of the legislation.
I can appreciate the hon. Gentleman's point in saying that this is an awful bore and that it is a most unlikely call to be made on the Government. But we are concerned with guarantees and the legal basis for them. I cannot accept what the hon. Gentleman said on the first point.
On the second point, I can understand the Minister saying: "I have come to tell the House frankly my difficulties. I hope the House will be tolerant and, having heard the position, will allow me to go ahead and do something which is quite reasonable". However, I cannot accept that. If we allow this kind of slipshod administration we shall run into very real difficulties. This is why we have the Comptroller and Auditor-General and accounting officers. I was horrified to hear that this is being done on the advice of the accounting officer. He, at any rate, is identified and will have to account to the Comptroller and Auditor-General in due course. But it is asking the House to do too much to say that a Minister whom we trust and who is a nice chap is doing something which is regrettable but which the House is pressing him to do, and that therefore we should not bother about constitutional propriety. That is just the one thing which we must bother ourselves about.
Mr. Milan: I agree with my right hon. Friend the Member for Sunderland, North (Mr. Willey): The Minister for Industry has not dealt with my point about what

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the Under-Secretary said earlier, that the Government could pay out anything unless they were specifically debarred. I would accept that as a general constitutional principle, but, unless the legislation is meaningless—I do not think that it is—once one has passed legislation, one has laid down a certain limit beyond which the Government are not authorised to go.
But then the Minister goes on to say that the principle is something different. The principle is not that one cannot go beyond the guarantees laid down in the legislation. One can go beyond it, he says: the difficulty arises only when one is called upon to pay up on the basis that the guarantees now have to be discharged. But that is not what the 1967 Shipbuilding Industry Act says. It does not say that the limit of £200 million, which was subsequently raised to £400 million, is a limit on guarantees which have fallen to be discharged by the Government. Section 7(5) says:
"The aggregate amount of the liability at any time of the Minister in respect of guarantees under this section…shall not exceed £200 million."
It does not say that the aggregate amount of the expenditure, but to the liabilities. Therefore, the Minister cannot take on liabilities exceeding £400 million under the present legislation.
The Minister is trying to draw a distinction between a liability and payment, but the Act specifically directs a limit of those liabilities. So what the Minister has been saying tonight does not represent what the legislation say. It is certainly completely inconsistent with what the Under-Secretary said earlier.
I suggest sincerely that it will help everyone if this Resolution were withdrawn. The Bill has had its Second Reading and the Money Resolution can come forward at any time. It limits discussion in Committee, but it can be passed subsequent to the Second Reading. The Government would suffer no disability.
The Minister and his hon. Friend have tried to explain the exact position. I mean him no disrespect in saying that he has not convinced the House that he understands the questions which we are putting. In any case, the Resolution is in the name of the Financial Secretary. It used to be a courtesy, which seems to
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have been disregarded in recent years, that a representative of the Treasury was always present during discussion of money resolutions. It would be useful to hear from a Treasury Minister or a Law Officer, and this could easily be done. The Money Resolution could be exempted business on any evening next week. I suggest this course, because we are anxious not to vote against the Resolution.
9.30 p.m.
Mr. McMaster: I am confused on the question of illegality, and I hope that the Minister can help me by explaining at what point illegality would arise. The Money Resolution would provide:
"That, for the purposes of any Act of the present Session to amend section 7 of the Ship building Industry Act 1967, it is expedient to authorise any increase in the sums payable out"—
I underline those words "payable out"—
"of moneys provided by Parliament or into the Consolidated Fund which is attributable to any amendment of the section increasing the limit of £400 million imposed by subsection (5). as amended by section 1 of the Shipbuilding Industry Act 1969, on the Secretary of State's liabilities on guarantees given under section 7, but so that the new limit shall not exceed £700 million less the amount of any sums which have been paid by the Secretary of State to meet a liability falling within the subsection and have not been repaid to him."
Does that mean that the Minister will be acting illegally only if he pays out more than £700 million? In other words—
Mr. Speaker: Order. The hon. Gentleman must direct his attention to the question whether the debate be now adjourned, not to the merits of the Money Resolution.
Mr. McMaster: In order to decide whether the debate should be now adjourned, Mr. Speaker, I want to know whether there is something in the Money Resolution which would render action by the Government unlawful or ultra vires if they guaranteed more than £700 million but were not in fact called upon to pay out more than £700 million.
The 1967 Act has not led to the payment out of any money. On the experience of the past four or five years, the Government could advance a great deal more than £700 million without in any way acting ultra vires because they would not in fact be required to pay out more than £700 million. Would the Government be acting illegally only if they pay out, as

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opposed to guarantee, such sums? The Money Resolution as such imposes a liability on the Treasury, but the guarantee itself raises no liability on the Treasury.
Mr. Arthur Blenkinsop: Could we have the help of the Leader of the House? I am sure that he would accept our suggestion that the Money Resolution be withdrawn at this stage. To do so would put the Government in no difficulty, and it would enable the matter to be rectified in a much more sensible and relaxed way. I feel that the Leader of the House will appreciate that, and will be able to advise in that sense. I hope that we might have his support in doing so, as it seems to me the appropriate thing to do at this moment.
Mr. Benn: I hope that the Minister will accept that there is a little difficulty here and that it is important that people should understand the exact legal position. I know that he was trying to help us, but with the best will in the world it is not possible for a Minister, caught with questioning that it is easier to put than to answer, to give absolutely authoritative replies.
My hon. Friends and I support the Bill and are anxious that the Money Resolution should go through so that the Bill should proceed, but since there is no problem about time the matter could be brought back on Monday. It would show sensible flexibility and sensitivity if the Minister would simply accept that we should put the Resolution on one side and that he should come back with an absolutely clear, authoritative statement on Monday, Tuesday, or whenever it may be, and it would then go through.
After this long day's debate, with so much discussion about the question, I beg him not to try to push us on to the Money Resolution before we have an absolutely clear answer to this question.
Mr. George Lawson: If the Minister accepts what has been said by my right hon. Friend the Member for Bristol, South-East (Mr. Benn), I shall not want to press the matter any further, but if he does not I would certainly wish to put the case put by my right hon. and hon. Friends. Will he say that the Government will look at the matter again?
I have not taken part in the debate, and I hesitated to intervene now, but
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the subject under discussion is of first importance. The Minister did not seem to be very clear in what he was saying. It seemed to me that he was trying to withdraw the word "illegal", trying to suggest that the earlier use of the word had been inept, that it did not quite mean what "illegal" usually meant but merely meant that perhaps the Government were doing a little bit of something that was not quite in order but nothing that was really wrong. If so, he is saying that a Money Resolution can be disregarded by any Government. When a maximum figure is stipulated, whether of the guarantee or the maximum paid out, it seems to me that that is the ceiling.
I have always understood that a Money Resolution is virtually absolute. With your experience, Mr. Speaker, you will be very clear on this matter. It is often the Government's concern to tie up legislation by means of a Money Resolution. It used to be a regular exercise by my right hon. Friend the Member for Kilmarnock (Mr. Ross) and the previous Member for Edinburgh, East, Mr. George Willis, to look very closely into Money Resolutions, because they knew of their importance for the legislation in question, and the facilities that a Committee would have in amending legislation. They knew that these were contingent upon the Money Resolution, which was absolute for the Committee dealing with the Bill. It is the regular practice of a Chairman when a Committee begins its deliberations on a Bill to advise the Committee that the Money Resolution is available, and we can do nothing outwith the terms of the Resolution. It is an absolute instruction for any Committee of the House.
The power and authority of this House reside in its ability to control the purse strings. It can say that a Government have been given power to spend up to a certain limit and not beyond. There must be a further sanction. We all can recall special Bills that have been passed to give a Government power to make certain expenditures. The Minister for Industry seems to be saying that we do not mean by "illegal" what is commonly meant by the word, but nevertheless if it suits the Government's purpose they can commit themselves to more than this and not just a pound or two. There is apparently no limit.

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If this is so, it is different from what I have always understood to be the position. If this is the proper interpretation of a Money Resolution, then I would say that in no Committee of this House dealing with a Bill would hon. Members be legitimately silenced by a Chairman who says that the Money Resolution lays down the terms under which expenditure can be committed. Any future Committee would be entitled to say that the Money Resolution was only a rough guide. It could say that if the Government can allow expenditure in excess of a Resolution, then the representatives of the people can insist that they do it in Committee, too.
No hon. Member worth his salt would accept rules for a Committee that do not apply to the Government. We should have from the Secretary of State a statement to the effect that what has been said earlier has been misleading in the sense that the word "illegal" was wrongly used and in the sense that the Government do not have latitude to commit themselves to more than is here stipulated. The Government have no more latitude than we have as a Committee to involve themselves in further expenditure. I have no doubt that hon. and right hon. Gentlemen opposite are wrong, and it would be an absurd position if, having talked in this way, they have to come back and admit that they were mistaken.
I do not say this disrespectfully but there is no Minister on the Front Bench who properly understands this. It is reasonable for right hon. Gentlemen opposite to say that there is a doubt and that the matter should be withdrawn and brought back next week. Unless this is done, my hon. Friends will have no alternative but to push this as far as we can, which may mean dividing.
9.45 p.m.
Mr. Tom Boardman: I apologise for having been absent during the earlier debate, but I understand that the hon. Member for Motherwell (Mr. Lawson) shared a similar disadvantage.
Mr. Lawson: I took no part in the debate on the Bill. I heard only parts of it here and there. But I have heard all the debate on the Money Resolution.
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and it is the Motion that we adjourn the debate on that Resolution that I have been talking about.
Mr. Boardman: Like the hon. Gentleman, I was not here for the debate, but I heard the criticisms raised about the Money Resolution and so on, and I accept the hon. Gentleman's argument—it is perfectly valid—that it is the duty of the House to control the public purse, and that is right. But is it not also right that we should ration our time carefully? I heard the suggestion that this matter should be taken on a future occasion. One asks what there is in the Resolution to which hon. Gentlemen opposite object. It is a matter in which the Resolution—
Mr. Millan: We are not talking about the Money Resolution in those terms. We are talking of a Motion to adjourn the House because of the confusion. As I understand it, Mr. Speaker, you have already announced that we are not entitled to object to the Resolution as such. With great respect, the hon. Gentleman is in no position to make a sensible contribution to the debate.
Mr. Boardman: The hon. Member for Glasgow, Craigton (Mr. Millan) will accept that every Member of the House has a right to contribute to any debate. The money to be supplied for this vital industry concerns hon. Members on both sides of the House. I accept that that is not the issue which is being debated at present. What is being debated now, and what concerns me, is the use of parliamentary time. This is a precious commodity. I am sure that the hon. Member for Motherwell would agree with that.
Mr. Lawson: Hear, hear.
Mr. Boardman: Indeed, the hon. Member does. We are wasting a great deal of parliamentary time. My intervention will be brief.
Mr. Dell: Tell us what it means.
Mr. Boardman: Does the right hon. Gentleman wish me to give way?
Mr. Dell: The simplest way of saving time is for the Government to explain what the Money Resolution means.
Mr. Boardman: If I understand the right hon. Gentleman correctly—again apologising for my absence—it seems

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that this is what hon. Gentlemen opposite are seeking to prevent the Government from doing by seeking the adjournment of the debate, thereby preventing my right hon. Friend from putting to them the Resolution, a Resolution which I believe —I hope that I am not out of order—commends itself to the House as a whole.
Mr. Benn: I am sorry that the hon. Gentleman appears to be making fun of this.
Hon. Members: No!
Mr. Benn: The hon. Gentleman was absent, no doubt for good reasons, when the Money Resolution was put to the House and debated. Certain problems arose in the Ministerial explanation, and I moved that the debate be adjourned. My hon. Friends have not prevented the Money Resolution from being put. We are merely waiting for the Minister or the Secretary of State, who, after a busy day, courteously came in for the end of the debate, to give an authoritative reply to some of the unresolved questions.
Mr. Boardman: I gathered that that was the meat of the argument. The right hon. Gentleman is wrong to accuse me of taking this matter lightly—[Interruption.]—particularly as some of his hon. Friends appear to be taking it lightly.
Sir J. Eden: The House is in a dilemma because of the rather hasty action of the right hon. Member for Bristol, South-East (Mr. Benn) in moving the adjournment of the debate. It is now impossible, without going out of order, to answer the questions which hon. Members put about the Money Resolution. It would be helpful if my hon. Friend would press the right hon. Gentleman to withdraw his Motion so that we may proceed with the discussion of the Money Resolution.
Mr. Boardman: I understand that the Money Resolution has been debated and that a number of points—
Mr. Lawson: On a point of order. It must be clear to you, Mr. Speaker, that the hon. Member for Leicester, South-West (Mr. Tom Boardman) has been asked to kill time until troops can be gathered to vote down this Motion. Would it not be wise to ensure that the hon. Gentleman knows what he is talking about before he is permitted to continue?
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In other words, is it in order for him to go on talking when he knows nothing about the subject under discussion?
Mr. Speaker: If the hon. Gentleman is asking the Chair to apply that test to every speech, it would be a very broad issue.
Mr. Boardman: I had the advantage, if that is the right word, of hearing the remarks of the hon. Member for Motherwell (Mr. Lawson). I have no doubt that many good questions have been posed by hon. Gentlemen opposite, and it is clear that the Minister is anxious to answer them. I hope that the right hon. Member for Bristol, South-East will enable him to do so, and, with the penitence of one who has not had the advantage of hearing all the debate, I ask him to withdraw his Motion.
Sir J. Eden: With the leave of the House, I ask the right hon. Member for Bristol, South-East (Mr. Benn) to consider withdrawing his Motion. I appreciate the spirit of his follow-up speech after he moved it, and I am sure he was trying to be helpful.
In the exchanges which have taken place since the right hon. Gentleman moved his Motion I have taken further advice, and I understand that the answer I gave about the differentiation between what is legal and what is within the bounds of the parliamentary expenditure control procedures was substantially correct.
Mr. Benn: Substantially?
Sir J. Eden: I say that only out of courtesy to the House.
I wish to have an opportunity of elaborating a little further on the Money Resolution on that point. It would be easy to take up the points mentioned by the hon. Member for Motherwell (Mr. Lawson)—the question, for example, of when action is legal. As has been said, it is perfectly legal to pay money out of the Civil Contingencies Fund to the U.C.S., as the previous Government did —they never came before the House specifically for authorisation to do so. However, this Money Resolution is concerned with parliamentary control of expenditure, and it is to that that I particularly wanted the opportunity to reply.

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For that reason, I urge the right hon. Gentleman, again in the same spirit in which he urged me to accept the Motion, to be good enough to withdraw it.
Mr. Benn: By leave of the House, I wish to explain why I am not prepared to withdraw my Motion to adjourn the debate. If I withdraw the Motion and the hon. Gentleman withdraws the Money Resolution, we shall be getting somewhere and we get back to it again. But, lest people outside reading HANSARD and the words "I have had the opportunity of taking advice" misunderstand what that means, let me say that traditionally it means that there has been a great deal of scurrying among colleagues so that a Front Bench spokesman may be assisted from scraps of paper to know whether what he said earlier was right. That is what is meant when a Minister in difficulty "takes advice". There is no harm in being a little more accurate in describing it.
It does not mean that the Secretary of State himself, whose responsibility it is, has felt able to intervene; nor that a Law Officer has been consulted; nor that a Treasury Minister has been consulted. It means that one has gone to advisers, who must remain anonymous and invisible, but who are present, and asked, "Was I right to say that?" and those advisers have said, "Yes, Minister, broadly you were right." But that is not enough when dealing with the financing of an industry which is faced with uncertainty.
The Minister knows full well that we support the Bill: it was our Bill and it has now been somewhat extended and brought in again. We support the provision of money under the authorisation of a Money Resolution. But we are not prepared to pass a Money Resolution after the Under-Secretary has said that it does not preclude him from going above the sum of £700 million and when the Minister knows full well that when the Bill goes to Committee we shall be unable to move Amendments to increase the sum to more than £700 million.
That is the basic problem which still remains unresolved. In the circumstances, I repeat my request that the Money Resolution be withdrawn so that the Secretary of State may bring it back on Monday
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when a short, clear, crisp statement explaining the position would have the Money Resolution through the House without further debate and within five minutes, more or less as long as it would take to read the statement and get a word of thanks from the Opposition.
In those circumstances, the Resolution should be withdrawn and I intend, if we do not get such a withdrawal, to advise my hon. Friends to press the Motion.
Mr. Charles Fletcher-Cooke: The right hon. Member for Bristol, South-East (Mr. Benn) is not rising to the situation. He is an intelligent and important person. He wants the present £400 million limit to be raised to £700 million, he perhaps more than anyone in the House, because he believes more than I do in this sort of State guarantee. He knows perfectly well that, in view of the crowded and clouded view of the future of Parliamentary business, if he pushes the Motion the Money Resolution may well be lost. What is wrong with passing this Money Resolution?
Mr. Millan Mr. Millan rose—
Mr. Fletcher-Cooke: I do not think I shall give way.
Mr. Milian: The hon. Member was not here.
Mr. Fletcher-Cooke: I have to confess the penitence of my hon. Friend the Member for Leicester, South-West (Mr. Tom Boardman) for coming late into the Chamber.
I realise that in 1967 the Act created a limit of £200 million. That was subsequently raised to £400 million, and it is now wished to raise it to £700 million. Precisely the same parameters and considerations apply to the £700 million as applied to the £200 million and the £400 million, precisely the same considerations whether it be de minimis or, possibly by means of virement, possibly by means of the matters mentioned by my hon. Friend the Member for Bournemouth, West (Sir J. Eden) which would apply to the new figure. [Interruption.] Of course they do. They are exactly the same. They may be right—
It being Ten o'clock, the Motion for the Adjournment of the debate lapsed, without Question put.
Original Question put and agreed to.
Resolved,
That, for the purposes of any Act of the present Session to amend section 7 of the Shipbuilding Industry Act 1967, it is expedient to authorise any increase in the sums payable out of moneys provided by Parliament or into the Consolidated Fund which is attributable to any amendment of the section increasing the limit of £400 million imposed by subsection (5), as amended by section 1 of the Shipbuilding Industry Act 1969, on the Secretary of State's liabilities on guarantees given under section 7, but so that the new limit shall not exceed £700 million less the amount of any sums which have been paid by the Secretary of State to meet a liability falling within the subsection and have not been repaid to him.

BOLTON (INDUSTRIAL OBSOLESCENCE)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Monro.]
10.0 p.m.
Mr. Laurance Reed: I represent the independent and robust town of Bolton in Lancashire—or at least one-half of it since the other half is represented by my friend and colleague the hon. Member for Bolton, West (Mr. Redmond). I should like to say how pleased we are to see him back in circulation following his illness.
Bolton is the third largest town in the North-West Region, second only to Manchester and Liverpool, and it has been described as the "quiet giant" of the North-West. The early fortunes of the town were founded on cotton—first bleaching and later spinning—and so successful were we that we became the world centre of fine cotton spinning. At one time there were 122 mills operating in the town, employing two-thirds of the town's work force.
Because of our commitment to and, therefore, our dependence on cotton, it was inevitable that Bolton should suffer severely when the Lancashire textile industry was forced to contract. By 1957 the total number of mills operating was down to 103, and by 1967 textiles lost their place as the leading source of employment for the first time, ceding that position to engineering trades. Today there are 26 mills still working and the closure of 80 mills during the past 13 years has resulted in the loss of 15,000 jobs. The rundown however is not yet
1490
complete because, if the present plans for streamlining the industry are fulfilled, a further 5,000 to 6,000 jobs will be lost before 1975—a cut of 50 per cent.—bringing the total number employed in textiles to less than 7,000 as against 37,000 in 1955.
Throughout this period the town has been successful in keeping the level of unemployment below the national average, and I believe that this accomplishment bears testimony to the skill and initiative of the people and their Corporation, for it has been done without Government assistance. Indeed, we can say that it has been done despite Government assistance because, when seeking new investment and new industry, we have had to compete on grossly unequal terms, not only with Merseyside, which enjoys full development area status, not only with four new towns that are being built in the area, but, of course, with the North-East Lancashire Intermediate Area which borders our northern frontier.
The Bolton Corporation Act, 1970, widened the powers available to the council to promote a programme of self-help, but there is one problem we are not able to solve single-handed and for which we are now seeking special assistance—namely, the problem of industrial obsolescence. By that term I do not mean technological backwardness. Bolton has always been innovation minded and our thinking remains orientated towards the future. It was no coincidence that two leading innovators of the 18th century, Crompton and Arkwright, lived and worked there. By "obsolescence" I mean both dereliction and decaying industrial premises. It is the last which gives us most cause for concern.
Immediately to the south and west of Bolton there is the largest stretch of derelict land in the county. Within the borough's boundary, however, there are comparatively few waste acres, although where they exist in Darcy Lever, adjoining Little Lever, they are particularly depressing. What we have is a number of derelict buildings and mills. When truly derelict, they attract the 75 per cent. grant established by the Local Employment Act, 1970. But we are pressing the Government to widen the definition of "industrial dereliction" to include abandoned and disused properties which

1491
are unlikely ever again to be accommodated with worthwhile activity because of their great age. These buildings are an eyesore in many neighbourhoods. They attract vermin and vandalism. They are dangerous to children. They take up valuable land space and are very costly to remove.
In common with representations made by the North-West Industrial Development Association, we are also seeking to persuade the Government to increase the 75 per cent. grant to the 85 per cent. enjoyed in development areas. It is all very well for the Department of the Environment to say that we can submit as many schemes as we wish and it will approve the lot, but we have the problem of finding the money because the grant relates only to 75 per cent. of the loss incurred after taking account of the after-use value. It does not mean 75 per cent. of the cash outlay needed to finance a clearance operation, and the loan charges on that are immediately chargeable to the rates.
The Hunt Committee described dereliction as
"one of the outstandng examples of the way in which unfavourable environment can depress economic opportunity … it deters the modern industry needed for the revitalisation of those areas and helps to stimulate outward migration."
But important as dereliction is, I must emphasise that it is not our major headache. Bolton has 600 acres of parks, and open spaces and there is some magnificent moorland immediately to the north. The new motorway network brings us to within an hour of the Lake District, the Peak District and the Yorkshire Dales. This enhanced mobility has dramatically improved the quality of life of people living in the area.
Far more dangerous to our future progress is the state of the working environment. Of a total of 39 million sq. ft. of industrial floor space in Bolton, no less than 80 per cent. was built before the First World War and as much as 40 per cent. before 1870. Altogether, 15,000 people, or one in five of the working population, are obliged to work in buildings more than 100 years old.
In 49 mills taken over for purposes other than cotton, 4¾ million sq. ft. have been reoccupied. However, they are used
1492
for purposes very different from that for which they were originally constructed, and working conditions in them are less safe, less healthy and less comfortable than modern techniques and design would allow. Certainly they compare very unfavourably with modern, purpose-built factories, and it is not surprising that the restrictive physical layout leads to low productivity, or certainly lower productivity than in up-to-date premises. Thus, bad buildings mean not only that work-people have poor conditions but that the level of earnings remains relatively low in relation to effort expended.
Whilst statistically the reoccupation of these old mills has appeared to absorb several thousand of the jobs lost through the contraction of the textile industry, the figures conceal the fact of outward migration of people seeking work outside. Bolton has been losing population at the rate of 1,000 a year over the last 10 or 11 years. Twenty-three thousand people go out of the town and district every day to find work, 14,000 come into the district for work, leaving a net outward migration of nearly 8 per cent. of the working population.
During the emergency situation of the last 13 years, Bolton has had to run very hard to stay where it is, and we are noticeably losing ground. In the past 18 months, further mill closures have been accompanied by a wide variety of closures of other factories. In 1969, 1,000 jobs were lost in Bolton and district as a result of major closures. In 1970, the figure was 1,500. What is particularly worrying about last year's redundancies is the wide variety of jobs involved—400 in printing, 200 in paper, 370 in textiles, 300 in brewing, 120 in engineering and 130 in office and laboratory work.
Of the last seven major factory closures, four relate to former cotton mills more than 90 years old, involving as much as 650,000 sq. ft. of floor space. For the entrepreneur, the great asset of these old mills is that they provide ready-made factories at relatively low cost, but once this initial capital advantage of occupying cheap premises disappears, he is left with higher unit costs of producing in a multi-storey building.
He also has the problem of recruiting labour to work in very poor conditions, and sooner or later it pays him to move from those premises into a purpose-built

1493
plant. Because incentives elsewhere are better than in our own areas, the chances are that that will not be in Bolton. We are now seeing old mills falling empty for the second and third time, and with each change in occupation the activity attracted to them becomes of lower and lower grade, involving fewer skills and fewer jobs.
Because only a very small amount of modern industry with growth potential goes into these old mills, the town's whole manufacturing capability is being seriously undermined. It is in this context that I have been concerned to learn of Ministry officials stalking Bolton, trying to persuade long-established businesses to move out. It is one thing to ask us to compote on unequal terms for new industry and investment: it is quite another for us to lose existing firms, many of which have been there for generations.
I hope to have an undertaking tonight that this sort of "headhunting" will cease forthwith. I also want an assurance that industrial development certificates will not be withheld for new developments which authorities in Bolton and district can attract for themselves and for the development of existing firms which wish to expand in their present locality.
I have dealt primarily with this problem as it affects Bolton, but I make it clear that the views which I have expressed are held in common by other towns represented on the Bolton and District Industrial Development Committee. I know that the hon. Member for Farnworth (Mr. Roper) is anxious to speak before the Minister replies.
None of us on that committee is unaware of the needs of other areas in the North-West, but we do not see the value of a regional policy which discriminates against us so strongly that we have no chance of solving our own difficulties. We believe that the scale and implications of industrial obsolescence cannot have been fully understood, or older towns in the region, other than Merseyside and the Furness area and North-East Lancashire, would have received some special assistance before now.
I am asking the Minister to treat as a matter of urgency an in-depth study of the problems and implications of industrial obsolescence as I have defined it.
1494
I am asking that Bolton and district should be selected as the area for the study and the test bed for any pilot projects. The study should include a comparative study of productivity and earnings in old multi-storey buildings and purpose-built premises, and of working conditions in both.
In particular, it is important that an attempt should be made to discover whether there is any correlation between industrial accidents and disease and the age of industrial premises. This study would reveal the hard facts and the information needed before more specific policy recommendations can be made.
10.15 p.m.
Mr. John Roper: I am grateful to the hon. Member for Bolton, East (Mr. Reed) for raising this matter, and particularly for so raising it that it referred not only to the county borough of Bolton but also to the districts which I and the hon. and learned Member for Darwen (Mr. Fletcher-Cooke) represent. This is an important problem to the northern part of my division just as much as it is to the area about which the hon. Member has spoken. I agree very much with what he has said and certainly with his request that there should be far more hard research and then action to solve the serious problems which exist.
We in Farnworth are proud to say that it was a Farnworth man, Sir Joseph Hunt, whose committee produced the excellent report which diagnosed the cumulatively depressing picture of industrial obsolescence and the depressingly slow rate of industrial building in the North-West. We have the lowest rate of growth in industrial building of any region in the country. We certainly have the lowest rate of any sub-region in the Bolton area in comparison with the rest of the country.
The hon. Member for Bolton, East referred to the problem of the mills. In the northern part of my division we have some of the largest mills in Lancashire. Some are historic buildings and appear in Pevsner's Buildings of Lancashire. Certainly some will be preserved as archaeological relics unless rapid action is taken. These mills, the top floors of which are empty, give a depressing and gloomy appearance in the towns which we represent. They put up factory costs

1495
of production. They often stay on the market for 10 years lying empty; they are derelict and cast gloom around them.
The Financial Times in a supplement today on Trafford Park went outside Trafford Park and looked at the rest of the region and said:
"Too many factories are left overs from an earlier industrial age and are frankly worn out."
The article goes on to point out
"New roads are simply bringing closer together a great many tired industrial installations which have small chance of being competitive in modern conditions."
The North-West Industrial Development Association and the Bolton Industrial Development Association have both pressed for 100 per cent. grants to deal with these relics of the nineteenth century and for clearing useless industrial buildings. There are gaps in our legislation in this respect. Furthermore, in an area such as Bolton we need to have the same arrangement as applies in the intermediate areas in regard to building grants. Finally, we need to have industrial development certificates available so that we can develop properly in our own region.
In my division house building is going well, but we are not getting the rebuilding of industrial premises to go with it. Existing grant structure is not satisfactory to enable us to reorganise our land use on a sensible pattern and to get away from the land use pattern of the nineteenth century with a mill at the end of every street. We want a new and imaginative approach to this problem if we are to get any progress in this matter.
The rate of unemployment in the past has been relatively low but only yesterday in my division I heard of 400 redundancies in one of the large engineering works, a subsidiary of Hawker Siddeley. We are now in a situation of great danger which is liable to lead to rapid industrial decay.
The final paragraph of the Financial Times supplement says:
"The Government are in the middle of recasting their policy for regional development. If the new policy is to be an advance on the methods of the 1960s, they will have to make provision for the special problems arising from industrial old age."
1496
I hope that we shall hear that the Government are aware of these problems and will take urgent action to deal with them.
10.20 p.m.
Mr. Charles Fletcher-Cooke: The hon. Member for Farnworth (Mr. Roper), who is a constituent of mine, and my hon. Friend the Member for Bolton, East (Mr. Laurance Reed), who is a neighbour of mine, have put the case for Bolton and district so well that I need add very little. Both Front Benches have neglected the problems of Bolton and the people in that part of Lancashire who have had none of the advantage of those in other parts of Lancashire. I know that my hon. Friend the Under-Secretary of State is sympathetic to our problems, and I hope that he will consider the pleas which have been made much more ably than I could have made them. I will not take up the limited time of the House further beyond saying that I endorse all that both hon. Members have said.
10.21 p.m.
The Under-Secretary of State for Trade and Industry (Mr. Anthony Grant): I must first congratulate my hon. Friend the member for Bolton, East (Mr. Laurance Reed) on his choice of subject in this Adjournment debate and the skill and conviction with which he has spoken on a subject which I know both he and his constituents have very close at heart. I am also grateful for the interventions of the hon. Member for Farnworth (Mr. Roper), and also that of my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke). I congratulate them both on the crisp way in which they have managed to express their points. Industrial obsolescence is an important subject and one with which the Government are much concerned.
I should like to say a word or two in general about the problem of dereliction and obsolescence, and in particular about these problems as they appear in Lancashire. There is of course no room for complacency and none of us would deny that, from the point of view of amenity and of industrial efficiency, it would be very desirable that all our factories should be new and should have the most modern layout. There is no doubt that in Bolton and elsewhere in Lancashire the harsh features of industrial architecture of the last century—in some cases

1497
of the century before that—cast a gaunt shadow over the lives of those who live and work in the area today. Nor, too, can one deny that old, multi-storey buildings are in use today by firms whose activities demand carefully planned, single-planned premises where there can be a proper flow of work.
At the same time, it must be recognised that the problems of Lancashire have been immeasurably assisted by the existence of sound, but serviceable industrial premises, available for acquisition at very reasonable cost and into which new industry has moved. Unlovely and indeed hideous as many of these buildings are, I know that many areas have envied Lancashire of their availability. Because of them the industrial structure of the area has been changed and diversified in recent years with a great measure of success.
The point that I want to make is that we must not assume that all old industrial buildings are an unmitigated evil in an area or conclude that all old industrial buildings are derelict buildings. Indeed I do not think that hon. Members would disagree that some old industrial premises in Lancashire were built to exceptionally high standards and have been adapted with great ingenuity. Nor do I think that hon. Members would dispute that obsolescence and dereliction are not a question of historical age. I have seen plenty of factories which are not so very old that are certainly candidates for early demolition on environmental and efficiency grounds.
Having said that—and I say it only to put the question a little into perspective—I must emphasise how very much importance this Government attaches to the clearance of dereliction: and obsolescent industrial premises when left empty are an aspect of dereliction. That is of course a matter for my right hon. Friend the Secretary of State for the Environment. He has pledged in this House before that the first decade of his new Department will be the decade for the substantial removal of dereliction. That is the measure of the importance which the Government attach to the matter.
The hon. Member for Bolton, East has pointed out the grants which are available. It is because so much importance
1498
is attached to clearing dereliction that, above the 50 per cent. grant available to local authorities for restoration schemes, grants of 75 per cent. are available in the intermediate and derelict land clearance areas and 85 per cent. in development areas—provided, in the case of the 75 per cent. and 85 per cent. grants, that my Department certifies that the scheme is
"expedient with a view to contributing to the development of industry"
in the area. We interpret that phrase very liberally. This means that a large proportion of the derelict land clearance projects in the Bolton area will attract grant at 75 per cent.
When all this is said and done, I remain only too well aware that there are still far too many elderly industrial premises which, while not derelict, are obsolescent and do not provide satisfactory places in which to work.
The onus here must rest on the firms themselves. Modernisation of premises would, naturally, enhance the value of the buildings, and the return on investment of this sort would doubtless be considerable.
Mr. Reed: The point is that they are being given incentives to go elsewhere than Bolton and district.
Mr. Grant: Inherent in any regional policy must be that attractions in some areas are greater than in others. If there is time I shall come back to the question of status.
The point which I was trying to make was that there is strength, in many cases, in the argument that the Government should not have to give a grant to encourage industry to do what it should in any case do in its own interest. My hon. Friend will appreciate that the provision of grant in such cases would involve great difficulty. In equity it would only be right to ensure that the amount of the grant took into account the increase in the value of the premises concerned. This might involve the necessity to deduct betterment value, which would involve a good deal of administrative complexity. My hon. Friend deplored the effect of obsolete premises on productivity. I deplore it, too. But I do not believe that this is something the

1499
Government can solve. Those concerned in the firms—both management and labour—have an interest in ensuring that they maximise their level of productivity. I believe it would be naïve—wholly mistaken—to think that productivity can be increased by subsidy paid in relation to one feature of a firm's activities. The firms which will increase productivity are those with enterprise, and enterprise was never called forth by subsidy. I must say here that the Bolton County Borough has a fine record of self-help and initiative in trying to solve its own problems, and I should not like this occasion to pass without this being recognised.
I should like to say something about the accusation made by my hon. Friend about various officials seeking in droves to take industry out of the area. This is not true and not our desire. If my hon. Friend does not agree, I should be pleased to receive any evidence that he may have.
I.D.C.s will be freely granted in this area. Indeed, as evidence of that I should point out that no I.D.C.s have been refused for nine years in Bolton. I emphasise that I.D.C.s are freely available in this area.
My hon. Friend expressed concern about the level of unemployment in the Bolton area. I appreciate and share his concern. But my hon. Friend will understand that at 3·5 per cent., which is abut the national average, it does not compare with other areas—for example, 60,000 unemployed in West Central Scotland and 22,000 on Tyneside. We must look at the country as a whole.
1500
My hon. Friend suggested that the Bolton area might he used for a pilot study scheme. This is not for me to pronounce upon. It is for my right hon. Friend the Secretary of State for the Environment and my hon. Friend the Minister for Local Government and Development. I shall certainly discuss my hon. Friend's suggestion with them. I should point out that consultants are already carrying out pilot studies in Nelson and Rawtenstall, and the results are expected in the summer.
I am sorry that time is against me. However, I agree with some of the points raised by my hon. Friend about the need for hard statistical facts to be available Here he strikes a sympathetic chord, and I shall certainly study carefully what he has said.
I again emphasise that in dealing with the higher rates of grant my Department liberally interprets the phrase in the Act
"expedient with a view to contributing to the development of industry in the area."
I hope that in the short time available this evening I have been able to show that the Government are not at all complacent about the real and serious problem which hon. Members have raised. They are, however, continuing problems and there is no instant solution. It is right, however, as my hon. Friend has shown, that we should be constantly looking at practical and realistic ways of tackling the legacy of industrial obsolescence. This the Government are doing, and will continue to do.
Question put and agreed to.
Adjourned accordingly at half-past Ten o'clock.

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

LAW OF THE SEA AND THE SEABED
LORD KENNET: 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 steps they are taking to review their policy in preparation for the International Conference on the Law of the Sea and the Seabed to be held in 1973.]
THE LORD PRIVY SEAL (EARL JELLICOE): My Lords, Her Majesty's Government are keeping constantly under review their policy on the matters to be discussed at the Conference proposed for 1973. The enlarged United Nations Seabed Committee, whose terms of reference now include the preparation of all aspects of the proposed Conference, including those relating to the Law of the Sea, held its first session in Geneva in March. Although the Committee did not at this stage embark on the drafting of articles for conventions on the Seabed or the Law of the Sea, important decisions were taken on the organisation of the Committee's work over the next two years, and there was a general debate in which a large number of countries, especially the new members of the Committee, took part. Her Majesty's Government hope that at its next session in July and August the Committee will be able to make further progress on the substance of its agenda. Between now and July we shall be in close touch with other Governments, and also, as appropriate, with British commercial interests, in preparation for that session.
LORD KENNET: My Lords, I thank the noble Earl for that very full and helpful Answer. May I ask whether, during the meetings of this international body,
776
the Government will seek to work out a new concept of international territorial waters, bearing in mind the powers recently taken by the Oil in Navigable Waters Bill, under which there could be an international régime exerting over what used to be the high seas in narrow areas the same powers as were exerted by nations within their own territorial waters; and also certain new controls over the communications and navigation gear of tankers, the training of their officers, and their routing?
EARL JELLICOE: My Lords, I think I may say with a degree of assurance that the Conference proposed for 1973 will give an opportunity for discussion of all the matters in this area which require further consideration, and quite specifically the matters which the noble Lord has just ventilated. But I should add that we do not think it either necessary or possible to set up a single agency to deal with all the problems connected with the marine environment.
LORD DAVIES OF LEEK: My Lords, while thanking the noble Earl for that useful answer, may I ask this question for information? Because of the new approach to the Chinese People's Republic and their membership of the "thermonuclear club", is there a possibility of some rapprochement and détente about including this troika of power in the discussions?
EARL JELLICOE: My Lords, answering "off the cuff"—this is not an area for which I specifically have a Departmental responsibility, and therefore it is "off the cuff"—I should have thought that that would depend upon a resolution of the problem of Chinese membership of the United Nations.
LORD WYNNE-JONES: My Lords, are the Government, in their review of the policy, proposing to review also the problem of dividing up the sea into areas for exploitation?
EARL JELLICOE: My Lords, this is of course one of the matters which are under consideration, along with a whole host of others, as the noble Lord well knows.
LORD WYNNE-JONES: My Lords, are the Government going to move in this matter with more than their normal speed?
EARL JELLICOE: My Lords, the present Government move with both speed and resolution.

FOWL PEST AND BROILER CHICKENS
3.12 p.m.
LORD KILMANY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what action has been taken following the statement of the Chairman of the National Egg Producer Retailers' Association that broiler chickens suffering from fowl pest are being sold to the public and whether they are now satisfied that danger from this source of infection no longer arises.]
EARL ST. ALDWYN: My Lords, the movement of poultry for slaughter from premises infected with fowl pest is authorised by the Ministry of Agriculture only when the consignment has been found by a veterinary officer to be free from evidence of fowl pest. Licences are available for up to two days, but if in the meantime the poultry concerned show symptoms of disease they may not be moved. Movements of the kind referred to by the Chairman of the National Egg Producer Retailers' Association are therefore illegal. Immediately he made his statement, the Association was asked to provide evidence to support it. Information relating to a single case has now been provided and is under urgent investigation. I will write to the noble Lord when these inquiries have been completed.
LORD KILMANY: My Lords, while thanking my noble friend for that very reassuring reply, may I ask him whether he will bear in mind that the Chairman's statement in fact received wide publicity; and will my noble friend therefore do what he can to ensure that the Answer he has now given to the House is circulated to all the trade journals concerned?
EARL ST. ALDWYN: My Lords, believe it is normal for the trade journals to watch Questions in your Lordships' House, but I will ensure that their particular attention is drawn to this Answer.
LORD BESWICK: My Lords, may I ask the noble Earl whether the Government are considering having a wide-ranging and thorough inquiry into all the procedures affected by the control of this pest? I have in mind something along the lines of the inquiry we had into the recent outbreak of foot-and-mouth disease.
EARL ST. ALDWYN: My Lords, I am sure the noble Lord is aware that when a similar question was put to the Parliamentary Secretary in another place a few days ago he said that he would consider the suggestion. I am afraid that I cannot add anything further at the moment.
BARONESS SUMMERSKILL: My Lords, can the noble Earl tell the House how one diagnoses fowl pest in a human being?
EARL ST. ALDWYN: My Lords, I should hesitate to take on the noble Baroness in connection with such a matter, but so far as I know fowl pest can produce conjunctivitis, which in itself is short-lived and has no residual effect. Beyond that I am afraid I am not in a position to give the actual diagnosis.
BARONESS SUMMERSKILL: My Lords, may I ask the noble Earl a further question? If, therefore, even he has not been informed by the Department what the symptoms are, how is it possible for any doctor in the country to diagnose this condition and then in turn inform such people as the owners of broiler houses that they are infecting the population?
EARL ST. ALDWYN: My Lords, as I am sure the noble Baroness will appreciate, conjunctivitis can be produced in human beings by other means than fowl pest.
BARONESS SUMMERSKILL: Certainly, my Lords.
EARL ST. ALDWYN: My Lords, I am afraid I cannot tell the noble Baroness how to differentiate between conjunctivitis contracted through fowl pest and conjunctivitis contracted in other ways. Whether she is in a position to inform the House, I do not know.
BARONESS SUMMERSKILL: No, my Lords, I am not.
LORD PARGITER: My Lords, having regard to the fact that conjunctivitis can be introduced by fowl pest, I wonder whether the members of the Government might suffer from it from time to time?

FORD PAY SETTLEMENT AND GOVERNMENT POLICY
3.15 p.m.
LORD BESWICK: 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 to what extent the recent settlement of the Ford workers' pay claim is in accordance with Her Majesty's Government's policy of stabilising prices and de-escalating wage claims.]
THE MINISTER WITHOUT PORTFOLIO (LORD DRUMALBYN): My Lords, the Government's policy, which has been made clear to employers and unions, is to bring about a reduction in the present high level of wage settlements. It does not rely on detailed criteria not on a percentage limit within which all settlements are expected to fall, as they will be affected by the special circumstances of each case. The Government, however, deprecate settlements which do not contribute to this policy, or which carry forward the present high rate of settlements into future years.
LORD BESWICK: My Lords, may I ask the noble Lord two questions, one general and one particular? May I ask, first, for how much longer Her Majesty's Government can pretend that the posture they are adopting with regard to prices and incomes is a credible posture in the light of what is happening? Secondly, is the noble Lord not a little ashamed of the treatment which Her Majesty's Government forced upon some of the most useful, reliable and kindly people in our community, namely, the postmen, in the light of what has happened since?
LORD DRUMALBYN: My Lords, the noble Lord asks me how much longer Her Majesty's Government can pretend that this posture is credible, but the point is that a settlement of the nature
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of the Ford settlement is a peak settlement. A great many settlements are going on at the present time which are within the policy of the Government. These are not reported because they are not news, but the noble Lord will be aware that there are methods by which the Government get to know of things, and the Government are not dissatisfied with the way in which their policy is going.
LORD POPPLEWELL: My Lords, can the noble Lord say what is the context in which high salaries can be allowed, such as has been the policy of the Government, and what salary structure the Government deprecate? It seems that on one side high-ranking military officers, higher civil servants and others get huge increases, agreed to by the Government, but when the Ford workers and others, such as the dustmen and the postmen, ask for an increase it is deprecated—
SEVERAL NOBLE LORDS: Order! Speech!
LORD POPPLEWELL: My Lords, will the Minister inform the House what is the salary level that is accepted by the Government?
LORD DRUMALBYN: My Lords, I am sure the noble Lord appreciates that there are two areas, one in which the Government have a special responsibility in regard to wage settlements, and the other which is the area of free negotiation. What the noble Lord does not realise, I think, is what I have already said: that the main body of negotiations that take place on the free side are now coming into line with the settlements that have been made in the Post Office and other settlements of that kind, and that the Ford settlement is an exceptional case.
THE EARL OF DUNDEE: My Lords, may I ask my noble friend whether he does not think it possible that the increase in new money supply mentioned in the Budget Statement, estimated at four times as much as the increase in annual production, may be an encouragement to employers to make these inflationary wage settlements?
LORD DRUMALBYN: My Lords, that might or might not be so; but the Government's policy on this matter is known,

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and it must be apparent to all employers, and indeed employees, that if they arrange between themselves settlements which are excessive this will in the long run do damage to themselves as well as to the country.
LORD ROBBINS: My Lords, I wondered whether the noble Lord could give the House some indication of any published statistics which would bear out the rather sanguine pronouncement which he made in answer to the original Question?
LORD DRUMALBYN: No, my Lords, I cannot do that. I will inquire how far the returns that are sent to the Government by the C.B.I. bear out exactly what I say, and I will, if I may, write to the noble Lord.
LORD FRASER OF LONSDALE: My Lords, with regard to the question asked by the noble Lord opposite, which seemed to be a class-conscious question—I think it was, and I think it deliberately was—is it not true that the ordinary trade unionist asks for and generally gets a rise every year, whereas top civil servants, Ministers, Members of Parliament and other men in the higher ranks of industry generally get rises every three or four years?
LORD DRUMALBYN: My Lords, the noble Lord has asked me a question on which I am not expert, but of course conditions vary from employment to employment. In some cases the rises are phased over a period of years and in some they are negotiated from year to year.
LORD PARGITER: My Lords, would not the noble Lord agree that as the Ford company have arrived at a settlement which is commercially viable so far as the company are concerned, and as the Party opposite are concerned with commercial viability, they have no right to say anything about the Ford settlement at all? And with regard to the suggestion about the Post Office settlement, is it not a fact that there is at this moment no settlement?
LORD DRUMALBYN: My Lords, whether the particular settlement negotiated in Ford's is viable or not will be shown by what happens in the future. No doubt Ford's, in reaching the settlement, did so on a balance of advantage and disadvantage. It does not follow that it is a settle
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ment did so on a balance of advantage and disadvantage. It does not follow that it is a settlement which they would themselves have chosen had they been able to negotiate on a basis of complete equality in this matter.
LORD PARGITER: But surely, my Lords, the basis of equality must be on the availability of labour to withhold their labour or the availability of capital to pay what labour asks.
LORD DRUMALBYN: My Lords, the basis of equality here depends very much on the position of the firm at the time. If the position of the firm is under pressure, if there is a shortage of liquidity, if they are under pressure to maintain their markets overseas or to meet a particular contract, then those pressures may modify that equality.
LORD PARGITER: My Lords, is that not an indictment of the capitalist structure?
LORD BESWICK: My Lords, may I ask the noble Lord to clarify the original Answer? Do I gather that if the present disparity between public sector settlements and private sector settlements continues Her Majesty's Government are not disposed to take any further control at all?
LORD DRUMALBYN: My Lords, that is obviously a hypothetical question. What Her Majesty's Government hope for, and indeed expect, is that due note will be taken by all concerned of the policy of the Government, which is clearly in the interests of the country as a whole, and that in formulating their wage demands and reaching their wage settlements employers and employees will have regard to the need to bring down the rate of settlements if we are not going to have inflation of a very serious nature.
LORD FERRIER: My Lords, is it not possible that recent levels of wage settlements in the Ford company have contributed to that company's decision to cease expanding their operations in this country?
LORD DRUMALBYN: My Lords, that is a matter of speculation, for which, I am afraid, Her Majesty's Government are not responsible.
LORD SHACKLETON: My Lords, while not wishing to prolong questions indefinitely, may I ask the noble Lord whether he will take careful note of what the noble Lord, Lord Robbins, has said? Is he aware that details of many wage settlements are published in the Ministry of Labour Gazette? Since he has made a very serious, and apparently justified, statement on figures, could he make those figures available to the House very soon, if we put down a Private Notice Question or another Question? May I further ask, arising out of my noble friend's question, whether if these settlements in the private sector continue at the present rate—and they are continuing at that rate—Her Majesty's Government intend to urge the public sector to increase wage rates there, or will they maintain the policy referred to by the Prime Minister of continuing to squeeze the public sector?
LORD DRUMALBYN: My Lords, with regard to the first half of the question, of course I will see how we can meet the wishes of the noble Lord and the House. With regard to the second half of the question, I think the noble Lord is under a misapprehension. As I said before, everyone always looks at the higher settlements and is apt to treat them as the norm. All I am saying is that they are not the norm and that the Government are not dissatisfied with the way their policy is going at the present time.
VISCOUNT ST. DAVIDS: My Lords, the noble Lord has said that Her Majesty's Government deprecate the high settlements which have been offered recently. Where they are too high no doubt we would agree with him. Will he say, which he has not yet said, whether he deprecates the particular wage rise referred to in the Question?
LORD DRUMALBYN: My Lords, I think I have said enough to make it clear that this was not in line with Her Majesty's Government's policy. It was a settlement which, in terms both of the immediate settlement and of the fact that it was promising further high settlements in the future, was outside the terms of Her Majesty's Government's policy.
EARL JELLICOE: My Lords, I do not wish to come between the noble Lord and your Lordships' House, but I think that following the supplementary your Lordships may wish to move on to other business. I do not wish in any way to curtail questioning on a matter which touches matters of vital importance to the health and prosperity of our nation, but this is not really one which is susceptible to easy question and answer. We can always debate it; the Opposition have a couple of days at their disposal quite shortly.
LORD DOUGLASS OF CLEVELAND: My Lords, may I ask the noble Lord whether the size of an agreement or an award is the only criterion by which its value is judged? For the first time for a number of years there is now a guarantee of peace for two years in the Ford works. Is that of no value when you are assessing the amount; and can you come to a decision on the amount to be paid without having a look at all the circumstances which surround the negotiation, including in that particular plant a nine and a half weeks' strike?
LORD DRUMALBYN: My Lords, I entirely agree with the noble Lord—I may say that I very often do. Where an agreement is going to contribute to stability in the future, that is clearly of great value, and it is one of the circumstances that I referred to when I said that settlements will be affected by special circumstances in each case. But in saying that, I do not mean to say that the Government were happy about the whole of the arrangement. They were happy about the prospect of stability in the industry.

GREATER LONDON COUNCIL (GENERAL POWERS) (NO. 2) BILL
Read 2a, and committed to the Committee on Unopposed Bills.
KESTEVEN COUNTY COUNCIL BILL
Read 2a, and committed to the Committee on Unopposed Bills.

INTEREST ON DAMAGES (SCOTLAND) BILL
3.30 p.m.
LORD BALERNO: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Balerno.)
On Question, Motion agreed to.
House in Committee accordingly.
[The EARL OF LISTOWIEL in the Chair.]
Clause 1 [Extension of power of courts to grant interest on damages]:
LORD WHEATLEY LORD WHEATLEY moved Amendment No. 1:
Page 1, line 25, after ("appropriate") insert ("even if those damages or such part of them have not been liquidated").
The noble and learned Lord said: I beg to move the first Amendment on the Marshalled List. This Amendment and the following Amendments are designed not to emasculate the Bill but to strengthen it. I approve of the purposes underlying the Bill, but I am doubtful whether it effectively achieves some of those purposes, and it may have overlooked some practical considerations. A problem which arises from time to time is that the courts are constrained to place a construction on an Act of Parliament different from the intendment of Parliament when the Bill was before it. Accordingly, it seems to me axiomatic that, if any doubts can be discerned in a Bill, it is a function of Parliament, so far as possible, to eliminate those doubts before the Bill passes from the legislative Chambers.
Subsection (1) extends the terminus from which interest may be awarded back beyond the former limit imposed by the Act of 1958; namely, the date of the commencement of the action, to the date when the right of action arose. It is a permissive power given to the court, which can award interest on the whole, or only part, of the total sum awarded, for the whole, or any part, of the period starting from the date when the right of action arose, and at such rate, or differing rates, of interest as the court may specify. This subsection applies to all actions for damages; for example, it
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would extend to actions for breach of contract as well as actions for damages for personal injuries. In view of the permissive and selective power conferred on the court, the test for a discriminatory decision, having regard to the qualifying conditions of the clause, will obviously be appropriateness in the particular circumstances of the individual case.
Subsection (1A) deals only with damages in respect of personal injuries and it first makes the power to award interest on such damages mandatory. But the subsection proceeds to qualify that mandatory provision in two respects. In the first place, it ceases to be mandatory since interest will only be given if the court is of the opinion that it is appropriate that interest should be awarded on the whole, or part, of the damages. Secondly, the award of interest can be withdrawn if the court is satisfied that there are special reasons for so doing.
In such damages there may be broadly four heads: out of pocket expenses; loss of wages, or wage-earning capacity, up to the date of proof or trial; loss of wages, or wage-earning capacity, subsequent to the proof or trial; and what we call "solatium"—that is, compensation for pain and suffering, and loss of amenities. In a jury trial it is virtually impossible to differentiate between these constituent elements because the total sum awarded by a jury does not make such a differentiation, and accordingly the constituent elements are not quantified. The evidence may in some cases give a clue to some of these constituent elements but not all. In particular, the amount attributed to solatium, and the amount attributed to loss of future earnings, or future wage-earning capacity, cannot be identified. On the other hand, in a proof before a judge without a jury, it would be possible for the judge to define the awards in respect of these different constituent elements, even to the extent, if need be, of dividing up solatium where that was appropriate.
It is the use of the qualifying phrase, "as the court considers appropriate", and the other phrase, "unless the court is satisfied that there are special reasons", which give rise, in my mind, to some doubt. "Appropriate" may he appropriate in fact or appropriate in law. Appropriate in fact may mean that it is ascertainable and has been ascertained.

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It would not, for instance, in my view, be appropriate to grant an award of interest in respect of future wage loss, because that is a loss that, at the date of the decree had not yet been ascertained. But it might be appropriate to make an award of interest on past ascertainable loss of wages on the principle that the pursuer has been out of pocket on sums of money to which he was previously entitled.
On the other side of the coin, appropriate in law may mean that interest should be awarded only on those elements which the principles of law entitle interest to be awarded upon. At common law that was when the element of damages concerned had been ascertained and liquidated. It may be said—and it may well be right—that the provisions of subsection (1) supersede that common law principle. The same might have been said about Section 1(1) of the 1958 Act, which this Bill seeks to amend, because although that subsection was differently phrased, extension anterior to the date of decree when the damages were liquidated was permitted in appropriate cases by that Act. Nevertheless, in the case of Macrae v. Reed and Mallik, decided in 1961 following upon the passing of the 1958 Act, one of the reasons given for not awarding interest on solatium was that solatium was not a surrogatum for monetary loss and money wrongfully withheld—the principle at common law on which interest is normally awarded.
As I understand the position, one of the purposes of this Bill is to get round such a restrictive interpretation as the court applied to the 1958 Act. It is because I am not certain that subsection (1A) does this that I have tabled this Amendment. And I am not certain that the arguments which prevailed against the wider application of the 1958 Act might not succeed against this Bill, if it became an Act in its present form. If there is a doubt, and it can be removed, then I feel it is our duty at this stage to remove it, and not leave it to the decision of the court, which cannot be forecast. It may be that the terms of my Amendment are not habile to effect this purpose. If there be doubt about this, I shall be quite happy to leave it to the expert draftsmen to see whether there is a way out and whether an appropriate
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formula can be devised, so that it can be incorporated at a later stage of the Bill. In the meantime, I beg to move.
3.40 p.m.
LORD BALERNO: I have consulted my noble friend the Minister of State and her advisers about this and other Amendments tabled by the noble and learned Lord. We are indeed very conscious of the points which he made on Second Reading, and we most sincerely appreciate his desire to make the Bill a more perfect instrument. For the reasons stated in the Second Reading debate by my noble friend Lady Tweedsmuir of Belhelvie, the Bill is much more definite than the 1958 Act, in that in the normal case the powers given by it are to be exercised by the courts unless there are special reasons to the contrary. What is questioned by the noble and learned Lord in tabling the Amendment is the extent of those powers and, in particular, the discretion which goes with those powers. As a complete layman in regard to the law, my own personal predilection is for a measure of flexibility in the application of the law to the very varied types of human problems arising from an award for damages.
We are dealing here solely with interest on damages, the length of the period for which it should be given and the rate of the interest. I appreciate the fear of the noble and learned Lord, that this discretion may be used to invoke old rules which are now inappropriate as grounds for limiting or excluding the award of interest on certain elements of damages, particularly on the element of solatium, which I was informed yesterday is compensation for pain and suffering. Under the 1958 Act, a judgment was made that solatium should never be awarded from a date earlier than that of decree, as the noble and learned Lord has said. The 1958 Act indicated that only if circumstances warranted should interest be awarded on any element of damages. The present Bill indicates—and, to my mind, indicates beyond peradventure—that interest on solatium must be awarded from the date of the right of action, unless there are good causes to the contrary. Assuming that, despite this Bill, the court might hold it inappropriate in principle to award interest on an element of solatium, I am advised that the present Amendment is not adequate to allow

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such interest and, further, that as this Amendment is only to subsection (1A) it may, by contrast, restrict undesirably the scope of the powers in subsection (1).
For these reasons, among others, I cannot accept the Amendment now proposed. Bat if the noble and learned Lord will agree to withdraw it, I shall undertake to consider further with my noble friend before the Report stage the problems raised by the Amendment and, if so advised, to table any Amendment which seems appropriate. But in considering the possibility of such an Amendment, I remind the noble Lord that this is a Private Member's Bill supported by all Parties in another place. I am advised that, unless it can return expeditiously to the place from whence it came, it will be in grave jeopardy. It is interesting that your Lordships have before you at the present moment two Private Members' Bills concerning damages. The other is the Law Reform (Miscellaneous Provisions) Bill brought forward by the noble and learned Lord, Lord Stow Hill. That also comes from another place agreed, like this Bill, without a Divison and after thorough discussion.
I should like to draw the attention of the noble and learned Lord, Lord Wheatley, to the words of the noble and learned Lord, Lore Gardiner, speaking in support of that other Bill last Tuesday. He said:
"Those who wish to see this Bill passed into law this Session would obviously be anxious that any unnecessary Amendment should not be put down and I would with respect ask any noble Lord who is thinking of putting down an Amendment to appreciate that if the basis of this Bill, Part II, were to be changed so that there is a conflict between the two Houses at this point of the Session, it is most unlikely that the Bill would become law at all this Session."—[OFFICIAL REPORT, 20/4/71; col. 541.]
Further, in the same debate the noble and learned Lord the Lord Chancellor, referring to the statement of the noble and learned Lord, Lord Gardiner, said that the House,
"…may have the choice between making a botched jab or losing the Bill altogether owing to the exigencies of the Parliamentary timetable."
I trust that the noble and learned Lord, Lord Wheatley, will not consider me either vindictive or unfair if I make a further quotation from the speech of the noble and learned Lord the Lord Chan-
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cellor. It is one of his obiter dicta which so enliven our debates, and is therefore perhaps worth repeating. He said:
"What is true is that the law is not of the lawyers' creation. The law affected by Part II is the sole product of the labours of Parliament. It is not judge-made law; it is Parliamentary law."—[col. 556.]
Again, I ask the noble and learned Lord, Lord Wheatley, not to press his Amendment.
3.49 p.m.
THE MINISTER OF STATE, SCOTTISH OFFICE (BARONESS TWEEDSMUIR OF BELHELVIE): I should like to say briefly, on behalf of the Government, that I have listened with the greatest care to the points put forward by the noble and learned Lord, Lord Wheatley, and also to what I felt was a very convincing reply made by my noble friend Lord Balerno. I quite agree with the noble and learned Lord, Lord Wheatley, that we must try as far as possible to remove doubt in legislation, as he put it; and I think those of us who are interested in this Bill all have, in common, the wish to strengthen it and not to emasculate it. But we also wish to see that, in practice, this Bill is interpreted in a less restrictive way than its predecessor, the 1958 Act, which it seeks to amend.
The noble and learned Lord, Lord Wheatley, said that he felt that perhaps the terms of his Amendment might not be quite perfect, but he gave very cogent arguments in support of it. I put it to him, however, that, after having considered this matter with my noble friend Lord Balerno, we feel that, at present, the Bill covers the less restrictive provisions which he has in mind. If, however, he feels able to withdraw the Amendment this afternoon, we will certainly look at it again to see whether it is either possible or necessary to try to strengthen the Bill in the manner which he has in mind.
LORD WHEATLEY: May I make four brief points in answer to those which have been made in the last two speeches, for which I thank both the noble Baroness and the noble Lord? In the first place, I want to make it clear that I am not against flexibility in the courts of law. It is a great relief to have flexibility. What I was seeking to do was not to curtail flexibility but

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to remove uncertainty. I think it is the function of Parliament while giving flexibility to remove uncertainty.
Secondly, with respect to the noble Lord, Lord Balerno, he did not, I think, deal with the problem which I raised arising out of the qualification in the word "appropriate". It is that qualification which gives rise to the doubt in my mind as to whether this Bill in its present form will achieve the purpose it is designed to achieve, and that is a point which I should like those advising the noble Lord and the noble Baroness to pay particular attention to.
The third point is that it was said that this Bill had been given a thorough discussion in another place. It was given a thorough discussion on the matters raised in another place, but the subject I have raised to-day, and the other matters which I propose to raise, were never raised in another place. Therefore, the fact that the Bill received universal acceptance on other matters in another place is no argument against the point which I have raised here. The next and last point is this. On the hypothesis that the Bill is deficient—and it is simply on that hypothesis—is it right that that deficiency should be overlooked? If the test in your Lordships' House, to quote the words of the noble and learned Lord, the Lord Chancellor, is whether we have to accept a botched job or lose the Bill, I should like to think that it was in the traditions of this House that we do not pass a botched job. In the circumstances, however, and in view of the undertaking given, which I realise is quite a qualified undertaking and I accept it as such, I am prepared to withdraw the Amendment.
Amendment, by leave, withdrawn.
3.53 p.m.
LORD WHEATLEY LORD WHEATLEY moved Amendment No. 2:
Page 2, line 1, leave out ("special reasons") and insert ("reasons special to the case").
The noble and learned Lord said: As subsection (1A) of the Bill is phrased "special reasons" might be interpreted as special reasons in law, with the difficulties which I have already outlined in relation to the previous Amendment. At the Second Reading, the noble
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Baroness, Lady Tweedsmuir, indicated that "special reasons" meant "reasons special to the particular case". If that is what is intended, then in my submission that is what should be said, and the matter should not be left open to doubt and the perils of adverse judicial interpretation. I recognise that this phrase, "special reasons", is used in the Road Traffic Acts, but that is in a different context and does not provide a suitable or possibly reliable precedent. For that reason I move the Amendment.
LORD BALERNO: I am inclined to think that the use of the word "special" in this context can only mean "special to the particular case", as circumstances which constitute the special reason must be such as are not generally present in the ordinary or the normal case. Nevertheless, I appreciate the force of the argument presented by the noble and learned Lord, and having discussed the matter with my noble friend Lady Tweedsmuir I am prepared, if the noble and learned Lord will withdraw his Amendment, to discuss the matter further with my noble friend. In the light of the advice we receive we could consider introducing an appropriate Amendment at the Report stage.
LORD WHEATLEY: Subject again to that undertaking, I am prepared to withdraw this Amendment.
Amendment, by leave, withdrawn.
LORD WHEATLEY LORD WHEATLEY moved Amendment No. 3:
Page 2, line 2, at end insert
""(1B) Where the Court pronounces an interlocutor decerning for payment by any person of a sum of money as damages in terms of minutes of Tender and Acceptance, the Court may award interest on that sum at such rate and for such period as to it seems just and equitable having regard to all the circumstances of the case."
( ) In section 2 of the said Act of 1958 there shall be inserted at the end "having regard to the provisions of the Interest on Damages (Scotland) Acts 1958 and 1971"."
The noble Lord said: There are two parts to this Amendment. They deal with different circumstances and, with your Lordships' permission, I will deal with each in turn. I must apologise for perhaps wearying your Lordships with matters of rather a technical nature in the judicial and legal field. The first

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part of the Amendment deals with the position where a decree is pronounced in terms of Minutes of Tender and Acceptance, and I think it fair to explain to your Lordships exactly how that arises. If a pursuer raises his action for damages and it is defended, the defender may at any time during the currency of the case lodge a tender offering to pay a certain sum of money in full of the conclusions of the summons against him; and if the pursuer accepts a tender by a Minute of Acceptance the court is then invited to grant a decree in terms of these Minutes of Tender and Acceptance. In that situation no evidence will have been led and so there will be no evidence on damages.
It could therefore be argued in that situation that this was a special reason why no interest should be awarded on any part of the sum. If that view were taken by the court it might result in two disadvantages to a pursuer. In the first place, he might be in a worse position than a pursuer in like circumstances who went on to have his claim adjudicated either by jury trial or by proof, although the former pursuer, by accepting the tender, 'was saving the expense of a proof or jury trial. Secondly, such a pursuer might be induced not to accept the tender which he might otherwise have accepted because the amount of interest involved, if the matter went to inquiry, might well in certain cases be substantial. In that situation, by refusing the tender in order not to lose the chances of getting interest, he might be incurring the risk of being found liable in expenses if, at the end of the day, the sum awarded did not exceed the tender.
As a tender is a lump sum and does not differentiate the various elements of damages, it might be difficult, I appreciate, for a judge to award appropriate interest on the appropriate elements of damages, but there might be agreed facts or other circumstances which would enable him to do so by wielding a broad axe. I would only mention, in passing, that the explanation given on Second Reading by the noble Baroness, Lady Tweedsmuir of Belhelvie, that the judge will have some guidance from the pleadings, is one that would not apply in many cases. May I briefly explain why?
In many cases, particularly where the injuries are serious, the pursuer in his averments sets out the injuries he has sustained, their duration, the amount of wages he has lost in the past as a result of the accident injuries and the loss he is liable to sustain in the future, either by loss of wages or by loss of wage-earning capacity. The defender, on the other hand, in his pleadings, may often deny the extent of the pursuer's injuries, aver that he had fully recovered from them some considerable time before the action came to be heard and had no future loss at all. Therefore to that extent they are often poles apart, and the pleadings can give no guidance.
It may be said that the other provisions in this Bill would enable a judge, in these circumstances to grant decree on Minutes of Tender and Acceptance, by exercising a discriminatory selection when the circumstances entitled him so to do. What I fear is that it might be decided, as a matter of general principle, that the circumstances attending a decree following upon Minutes of Tender and Acceptance would constitute a "special reason" within the meaning of subsection (1)(a) to avoid awarding interest on damages so granted. It is to avoid that possibility that I am moving this Amendment. I beg to move.
Perhaps I should point out that what I have said refers only to the first part of the Amendment. It may be that I should have dealt at the same time with the second part, since it is all comprehended in the one formal Amendment. May I seek the guidance of the Committee on this matter?
THE CHAIRMAN OF COMMITTEES: The noble Lord is moving one Amendment. He is entitled to speak to both parts at the same time.
LORD WHEATLEY: In that situation, perhaps, with your Lordships' indulgence, I may very briefly mention the second part, which is to insert:
"In section 2 of the said Act of 1958 there shall be inserted at the end 'having regard to the provisions of the Interest on Damages (Scotland) Acts 1958 and 1971'."
This deals, of course, with an entirely different point. It is a small point, and it relates to a very uncommon type of action nowadays, namely, a jury trial

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in the sheriff court, and to the even rarer occurrence of an appeal in such an action to the Court of Session, Now the Interest on Damages (Scotland) Act 1958. by Section 2, makes provision for the Court of Session, on such an appeal, when it relates to the failure of the court below to award interest, or when the interest awarded is said to be inadequate or excessive, to make such order as to interest as to the Court of Session seems just. This is a wide discretionary power, and the question is whether it would be automatically attached to and qualified by the provisions of this Bill. If not, then two different standards would apply, one generally to all other actions of damages and another to this very specialised form. It is to remove any doubt about this that the second part of the Amendment is tabled. I beg to move.
4.3 p.m.
LORD BALERNO: As explained by the noble Baroness on Second Reading, when the court pronounces an interlocutor following Minutes of Tender and Acceptance the pursuer may move for 'interest since the interlocutor is one decerning for payment of money as damages, and is therefore covered by the present Bill. The purpose of this Amendment is to make express provision for such cases, and to ensure that the court will not in such circumstances decline to award interest on the ground that the absence of information on which to base a calculation of interest constitutes a special reason for withholding such an award. I am not fully convinced of the necessity for such express provision, but having some recollection of how the Bruce came to be crowned on the Stone of Destiny I have some sympathy with those who want to "mak siccar" and I am prepared to discuss the matter further with the Minister.
LORD WHEATLEY: In view of that undertaking and what might follow thereon, I am prepared to withdraw this part of the Amendment. But the noble Lord has not dealt with the second part, and I am in rather a difficulty.
LORD BALERNO: I fell into the same trap as the noble and learned Lord. With regard to the second part of the Amendment, this is designed to ensure, as the
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noble and learned Lord has stated, that on an appeal from the sheriff court on the grounds that no interest has been awarded, or that the amount of interest is either too little or too much, the Court of Session shall take into consideration the provisons of this Bill in determining what order should be made. I am happy to include this matter also in my undertaking to consider further before the Report stage, subject of course to the approval of my noble friend.
LORD WHEATLEY: In these circumstances, I withdraw both parts of the Amendment.
Amendment, by leave, withdrawn.
LORD WHEATLEY LORD WHEATLEY moved Amendment No.4:
Page 2, line 5, leave out (""damages" includes solatium, and")
The noble and learned Lord said: I come, I am sure to your Lordships' ultimate relief, to the last of the Amendments that I propose to move. As I understand it, the provision in the clause, "'damages' includes solatium", is to draw the court's attention to the fact that solatium has to be considered in dealing with interest on damages for personal injuries. But solatium is and always has been an element, and a constituent element, of damages in such cases, and with respect I do not think that even Parliament requires to tell the judges or the profession this. Not only is this definition tautological, but it could possibly be mischievous. As it reads at present, the clause says,
"In this Act, 'damages' includes solatium…"
May that not give rise to an argument that, outside this Bill, when it becomes an Act, it does not, contrary to the accepted practice throughout the years? So why invite trouble if it is tautological? I suggest that that trouble ought to be avoided by removing this definition from the Bill. I accordingly beg to move.
LORD BALERNO: Our purpose in including the passage which the noble and learned Lord wishes to delete was to "mak siccar" about what precisely is included in the term "damages". I would assure the noble and learned Lord that I have no desire to be "mischievous" on any aspect of the Bill whatsoever, and I am quite certain that

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nothing could be further from the mind of my noble friend who sits on the Front Bench. This aim may well be affected by the other Amendments of the noble and learned Lord, and I suggest that we might include reconsideration of it along with the other points which he has made to-day. May I, as a Parthian shot, just say to him something that Cicero said a very long time ago? It is that
"nothing is harder to find than perfection".
BARONESS TWEEDSMUIR OF BELHELVIE: As this is the last Amendment, perhaps this is a suitable moment for me to say to the noble and learned Lord, Lord Wheatley, that I shall certainly be very glad to consider these Amendments with my noble friend Lord Balerno. They have of course been on the Order Paper and printed since the 14th, but I think it true to say that the noble and learned Lord did not have the opportunity to discuss them with the Lord Advocate until this week. Also Amendments on the Marshalled List do not always appear to be quite the same when they are moved, because it is the thinking behind the Amendment which is so important and which one should understand and hear at first hand. As I said earlier, the first Amendment, and the next two, which had the purpose of trying to remove doubt and to make things perhaps a little more restrictive, are in fact the opposite of the last Amendment, which seeks to remove something which we felt made it all doubly clear. However, we shall certainly examine these matters. I must confess that we are not entirely convinced, but in view of the noble and learned Lord's very great personal interest, and of the fact, as I think he will realise, that this is a very difficult subject, we should like to look at this again to see whether it is necessary or indeed possible to amend the Bill.
LORD WHEATLEY: Then may I take the opportunity of thanking the noble Baroness and also the noble Lord, Lord Balerno, for the patience and understanding they have exercised in listening to these Amendments and also the Committee. I should like to assure the noble Lord that I was not suggesting that those responsible for this Bill were being "mischievous", as they say in the part
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of Scotland where I was brought up. What I meant was that it might result in a mischief which is not appreciated. So far as the second Amendment is concerned, this idea of "making siccar" is all right but you must draw the line somewhere. It is like putting into a Bill that "issue" includes "son". This is, in effect, being done in this definition. In view of the various undertakings that have been given, particularly in relation to the Amendment under discussion, I ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clasue 1 agreed to.
Remaining clause agreed to.
House resumed: Bill reported without amendment.

NULLITY OF MARRIAGE BILL
4.13 p.m.
LORD GARDINER: My Lords, I beg to move that this Bill be now read a second time. The Bill is a further chapter in the Law Commission's task of codifying our matrimonial law. Parliament has dealt with divorce reform and with property and financial provisions. There is an outstanding Report of the Law Commission on polygamous marriages, with a draft Bill, but Parliamentary time has not yet been found for that. If I understand the position rightly, there will be only one more subject matter, the rather difficult one of conflict of laws where it may be necessary to decide a case according to the laws of some other country, on which the Law Commission are still at work and on which there is not yet a Report.
My Lords, our law on the nullity or marriage is partly statutory and partly case law; that is to say, so far there is no place where it has all been written down. The object of this Bill is to put it all in one place. There is just one other preliminary observation that I should like to make before coming to the clauses. As your Lordships know, I have an idiosyncracy, which is that I am anxious to see that Members of Parliament, and particularly those of the other place, should be given rather more help than they are given to consider legislation which comes before them. For example, where the main object of a Bill is to alter an existing Act it is helpful to have

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a Keeling Schedule setting out in large type the alterations which are proposed and, I would think, setting out in italics the parts which are to be left out. Members of Parliament can see, by looking at this Schedule, exactly what the Bill before them proposes without having constantly to look from the Bill to the Act and from the Act back to the Bill. I have never been able to persuade Parliamentary draftsmen to do that. The noble and learned Lord the Lord Chancellor has been kind enough to consider that question recently and has also come to the conclusion that it cannot be done in a Schedule to the Bill.
I do not mind whether it is done in a Schedule to the Bill or on a piece of paper. But our procedural methods for putting pieces of paper before Members of Parliament are themselves to me extremely obscure. I mention this point on the Second Reading of this Bill for this reason. This is a Bill which, being a Law Commission Bill, I suppose might be expected in the ordinary way to be a Government Bill; but we all know the difficulties over Government time, and such Bills are sometimes handed to private Members. Mr. Alexander Lyon, the honourable Member for York, introduced the present Bill. As usual with a Law Commission Bill, there was a Report which argued the reasons for any change made in the law when codified in this way followed by an Appendix containing a draft Bill, and then some notes on the clauses which helpfully summarise the substance of the Report for those Members who have not the time to read the whole Report; and there are references back to the paragraphs concerned. In their Report the clauses are printed on the left-hand page and the relevant notes on the clauses are printed on the right-hand page. This is an obvious convenience.
In these circumstances, with this Bill Mr. Lyon submitted to the Public Bill Office of another place a Bill containing the clauses of the Bill on the left-hand page and the Law Commission's notes on the clauses on the right-hand page. He was told that as this had never been done before, it could not be done. I do not want anyone to think that I am in any way criticising the Public Bill Office of the other place—that would be quite
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wrong. I assume that it would not have been their orders to accept it in that form. What the honourable Member did, as your Lordships will see from the Bill, was to make the Explanatory Memorandum much longer than usual. It is, in fact, the Law Commission's notes on the clauses. He got them before the Members of Parliament, but in a much less convenient form; because you have to look backwards and forwards all the time from the clause to the Explanatory Memorandum and from the Explanatory Memorandum to the clause. I was glad to note that the honourable Member for York said that he hoped that the Procedure Committee of the other place would consider this matter, and I was still more gratified to find that the Solicitor General also expressed the hope that this question would be considered by the Procedure Committee of another place. If so, your Lordships may think that it would be convenient to have it considered by our own Procedure Committee as well.
Clause 1 deals with the grounds on which a marriage may be void; that is to say, there has been no marriage at all. Clause 1 applies only to marriages taking place after the commencement of the Act. There is no retrospection about it. It sets out three grounds under paragraph (a) because they are all present grounds under the Marriage Act 1949: first, in subparagraph (i) prohibited degrees of relationship. These were considered by the Royal Commission on Marriage and Divorce who suggested one alteration which was made in the Marriage Enabling Act 1960. There has been no other suggestion that these grounds should be altered. They are the existing law. Secondly, in sub-paragraph (ii) that one of the parties was under 16 at the date of the marriage. The Latey Committee on the Age of Majority considered whether there should be a change in the minimum age of marriage and they unanimously recommended that the age should remain at 16; and so it does in the Bill. The third paragraph deals with formal requirements. These are being reviewed by a Working Party set up by the Registrar General and the Law Commission, but the Bill preserves the existing law. Then there is paragraph (b),

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that one of the parties was already married. This curiosity is not statutory, it is common law. Then there is a new ground introduced in the Commons. This is in paragraph (c) which reads:
"That the parties are not respectively male and female".
That is new, but the Commission were unanimous about it. The Law Commission considered it, but it has arisen only quite recently and I think in only one or two cases. The Law Commission did not include this in the Bill for two reasons: first, because the question really only arose after they had concluded all their consultations on the Bill and on their Report with the bodies that they normally consult. They did not think that it would have been right to start their consultations all over again. They said that the question involved an issue of social policy on which Parliament will be the judge. They said:
"We appreciate, however, that there may he the rare case in which one party has some of the sexual characteristics of both male and female and in which there may be a genuine doubt which characteristics predominate, or, indeed, in which one party believed at the time of the marriage that he or she was of the opposite sex. It may be thought that in these tragic cases the court should be empowered to grant the normal range of financial provision and that the courts can be relied upon to distinguish cases of this sort, where such relief is appropriate, from those in which it is not. If this view is taken by Parliament Clause 1 of the draft Bill appended to this Report will require amendment."
My Lords, this matter was carefully considered in the other place and there was a unanimous decision to include this additional ground. So much for Clause 1, although in one sense there is a further change: it is that the consequence of absence of consent by one of the parties is at the moment in some doubt, as to whether the case is one of void or voidability. I think the better view is that it is probably void. The Law Commission, for reasons they gave, thought that it ought to be voidable; the Bill accepts that and therefore I can deal with the point under Clause 2.
Clause 2 deals with the grounds on which the marriage is voidable. Here again, it applies only to marriages celebrated after the passing of the Act. Paragraph (a) that one of the parties was
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incapable of consummating the marriage, is at present a ground in common law; paragraph (b), that one party has wilfully refused to consummate the marriage, is at present in Section 9 (1) (a) of the Matrimonial Causes Act 1965; and paragraph (c), lack of consent, will make a marriage voidable, whereas it is at present probably void on this ground. In paragraphs 11 to 15 of their Report the Law Commission explain that this ground differs in several ways from the other grounds upon which a marriage is void and logically fits more readily in the category of voidable marriages. The Commission present arguments for the change in the law which they recommend.
Paragraph (d) of Clause 2 reformulates the test of mental disorder which is to be a ground of voidability, and will be welcomed by the courts which have to decide such cases. The difficulties of the present provisions are explained in paragraphs 69 and 74 of the Law Commission's Report. Epilepsy is removed from the ground of nullity, because medical opinion to-day does not regard it as mental illness and because it can be kept under control by treatment. Paragraph (e), that one of the parties was suffering from a communicable form of venereal disease at the time of the marriage, is at present Section 9(1)(c) of the Matrimonial Causes Act 1965; and paragraph (f), that the wife was pregnant by another man at the time of the marriage, is Section 9(2)(d) of the same Act. There is one other question which arose on this clause in the other place; it is whether wilful refusal to consummate the marriage should be, as it is now, a ground on which a marriage is voidable, or whether it should be a ground for divorce. I will say something about that later on.
Clause 3 deals with the bars to relief in the case of voidable marriages. There is, of course, no bar if the marriage is void, and this clause will apply also only to marriages celebrated after the date of the Act. It really codifies the bars in these cases. Subsection (1) deals with approbation cases in which the petitioner has approbated the marriage after knowledge of all the relevant facts, and in which it would be unjust to the respondent to void the marriage. There is a new formulation which avoids reference to public policy which, as we all know, is

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an unruly horse; and it should also remove fears that if, under the existing law, there is an attempt at reconciliation, such an attempt might be held to amount to approbation and thus constitute a bar.
Subsection (2) says that the petition must be filed within three years of the marriage and applies an additional bar on grounds other than incapacity or wilful refusal, and replaces Section 9(2) of the Matrimonial Causes Act 1965. In the case of the communicable form of venereal disease and the pregnancy of the wife, these will apply only if the petitioner was ignorant of the facts at the time of the marriage. It replaces Section 2(a) of the Matrimonial Causes Act 1965 and there is also provision in relation to knowledge in the case of mental disorder. Subsection (4) otherwise abolishes existing bars of approbation and ratification, and what we used to call lack of sincerity. Subsection (5) alters the definition of "the court" from the form of the Bill as put forward by the Law Commission because the county court now has a nullity jurisdiction.
My Lords, Clause 4 deals with
"Marriages governed by foreign law or celebrated abroad under English law"
and is, I think, sufficiently explained in the Explanatory Note attached to the Bill. Clause 5 deals with the
"Effect of decree of nullity in cases of voidable marriage."
In paragraphs 21 to 28 of their Report the Commission considered fully the question whether all or some types of voidable marriage should be regarded as valid and be terminated only by divorce. They concluded that there was a real distinction between grounds of voidability and grounds for divorce, and they recommended that the category of voidable marriages should be retained. However, they further recommended that a voidable marriage should be treated as valid until the decree absolute was made.
Clause 6 provides that collusion shall be no bar to nullity or to a declaration of dissolution of marriage on presumption of death. The Law Commission pointed out in their Report that collusion had been removed as a bar in cases of divorce, and for the same reason as they did that, it should be removed in relation to nullity. Clause 7 deals with the Short
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Title, consequential amendments and repeals, and savings, and I think that those are sufficiently dealt with in the Explanatory Memorandum.
I will now come back to a matter which caused some controversy in the other place and to which I said I would return. It is the question dealt with in paragraph 26 onwards in the Report as to whether wilful refusal to consummate the marriage ought to remain a ground of nullity or whether it ought to be a ground for divorce. For reasons which I will explain later, I think that I should shortly summarise the arguments, even at this stage of the Bill. What is said for making the change is simply this: that in the case of voidable marriages the grounds, all or nearly all of them, relate to something which was in existence at the date of the marriage; whereas of course wilful refusal to consummate the marriage takes place after the marriage. Therefore, it is said, it would be more logical to make this a ground for divorce. That is the only argument for the change. It is a perfectly sensible argument, it is a logical argument.
The Law Commission carefully considered this, and for four reasons they were against it. Their first reason was:
"Wilful refusal to consummate is in most cases the alternative allegation to impotence as it is often uncertain whether the respondent's failure to consummate is due to one cause or the other the petitioner may not know whether the respondent refused to consummate the marriage because he is unable to have sexual intercourse or because, though able to have sexual intercourse, he does not want to have it in such cases the court must draw an inference from the evidence before it and it seems unreal that the relief granted to the petitioner—nullity or divorce—should depend in any given case on the court's view as to which of the two reasons prevented the consummation of the marriage."
If I may pause here, the Law Commission, in their usual careful way, have got out the statistics in an Appendix, giving the average figures for the last ten years. When we talk about nullity this is (if your Lordships will forgive the expression) the guts of nullity in real life, because something like 90 per cent. of the 966 petitions and 780 nullity decrees are granted on the ground that the marriage has not been consumated. Out of the 780 decrees, 69 were for void marriages; and 13 of the voidable marriages were on the ground of unsound mind or epilepsy; 14 on the

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ground of pregnancy; 2 on the ground of venereal disease; 349 on the ground of incapacity, and 333 on the ground of wilful refusal. These may be said to be joined hand in hand.
The Law Commission's second reason is this:
"Failure to consummate, whether it be because the respondent is unable or because he is unwilling to have sexual intercourse, deprives a marriage of what is normally regarded as one of its essential purposes, Parties would think it strange that the nature of the relief should depend on the court's decision whether non-consummation was due to the respondent's inability or whether it was due to his unwillingness. From the parties' point of view the relevant fact would be that the marriage had never become a complete one. To tell them that, in the eyes of the law, failure to complete it due to one cause results in the marriage being annulled, whereas such failure due to another cause results in their marriage being dissolved, would seem to them to be a strange result."
As your Lordships will appreciate, while there can be physical incapacity, determined by the medical inspectors in a nullity case, perhaps more often, if there is an incapacity, it is a mental incapacity, a psychological aversion either to sexual intercourse altogether or—which seems strange perhaps to members of the public—an impotence qua the very woman the man has chosen to marry, though he can have intercourse with other women. Of course, to determine whether there is an invincible repugnance to intercourse either by the man or by the woman, or whether it is simply that they do not want it, whether it is something they can overcome or something they cannot overcome, is obviously extremely difficult. That is why in all these cases the pleading is in the alternative, that either he, or she, is incapable or refuses.
Thirdly, the Law Commission say:
"The circumstances in which the court can entertain suits for nullity and divorce at present are not the same: for instance, the court has jurisdiction to hear a suit for nullity where, irrespective of domicile, both parties are, or the respondent alone is, resident in England, but there is no jurisdiction (except under the provisions of the Matrimonial Causes Act 1965, Section 40) to hear a suit for divorce unless both parties are domiciled in England; therefore, if wilful refusal to consummate were to become a ground for divorce while impotence remained a ground for nullity, a petitioner might find himself unable to allege the two grounds in the alternative Although he himself might not know which of these was the effective cause preventing consummation of his marriage."
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Then there is the fourth ground, which I think probably had rather more weight with another place than any of the others.
The Commission say:
"A petition for divorce may not be presented until three years have elapsed from the date of marriage unless the court gives leave to present an earlier petition on the ground of exceptional hardship suffered by the petitioner or of exceptional depravity on the part of the respondent; …The need to wait three years before being able to start proceedings to terminate the marriage would be a substantial hardship on a man or woman whose partner is unable or unwilling to consummate the marriage …"
May I add this? Of course we have many blows in life which are none of our making, but there is one situation I always think is very sad. It is when a normal girl is in love with a man whom she naturally supposed to be an ordinary man; they get married, and then on the wedding night he makes no attempt to consummate the marriage; and so it goes on, night after night. It is a very difficult position for her because, if she loves him, the last thing she wants to do is to upset him. She is in a very unhappy position. The question is ought we merely to make the law theoretically tidier and for the first time say that a woman in that position, who at the moment can petition for nullity at any time, will not know where she is for three years because, simply to make the law tidier, we think that refusal to consummate ought to be a ground for divorce.
My Lords, if I have said rather more than usual on the Second Reading of this Bill, on what on the face of it is a Committee point, I do so for this reason. If any noble Lord is thinking of putting down an Amendment to keep incapacity for nullity and make wilful refusal a ground for divorce, I would point out the possible effect, at this stage in the Session, of making a change on a point which the Commons decided only by a very small majority, on a point on which the Law Commission said would be a mistake and which the Government consider would be a mistake. I see that the Solicitor General said in another place:
"It is …an argument which does not commend itself to any other common law country which accepts this ground for getting rid of marriage. In all other common law countries where it is a ground, except Australia where they have a hybrid system, they all go along with us and leave it to the ground of nullity. Beyond this clamour for logic,

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what is the reason? Now we have a situation for which we have been working for 34 years to everyone's satisfaction and convenience, and I see no reason why we should disturb this situation, unless we were disturbing it for something which was so blindingly right and compellingly more simple that there was no alternative; but the arguments do not seem such to me."—[OFFICIAL REPORT, Commons Standing Committee C, 17/2/71, cols. 22–23.]
After saying a good deal more, he ended his speech by saying:
"…I am persuaded that this is a case for leaving well alone and saying, 'Why, why, why should we be compelled to make this change in this simple matter?'."
So the position is that the opposite view does not commend itself to me, to the Law Commission, to another place or to the Government, and I very much hope therefore that on this point we may be able to leave the law as it is. With those observations, I beg to move that the Bill be now read a second time.
Moved, That the Bill be now read 2a. (Lord Gardiner.)
4.39 p.m.
LORD SIMON OF GLAISDALE: My Lords, I venture to address your Lordships on this Bill because until very recently I had some responsibility for the sphere of law with which this Bill is concerned. I know that your Lordships will wish me first of all to express our appreciation to the noble and learned Lord, Lord Gardiner, for his lucid explanation in introducing this Bill, and to the Law Commission for the work they so competently did.
As the noble and learned Lord explained, this is a Bill partly for the codification of the common law by Statute, partly for consolidation. I do not know whether it was a slip of the tongue when he suggested at the outset that there was only one subject left in this field of law on which we await the advice of the Law Commission. That is not so. There are widely expected, and indeed long overdue, recommendations to rationalise and render more equitable the law of married women's property.
The necessity of reform in that field has been very much accentuated and aggravated by the Divorce Reform Act 1969. It was many months ago that we were promised a comprehensive framework of proposals in this field within a few months. Instead, there was the
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Matrimonial Proceedings and Property Act, which did little more than tinker with the existing law. The substantive proposals are still awaited. I mention that merely because, although this seems to me, on the whole, a useful measure, and one which unlike some that have been put forward in this field does not do any active harm, there are far more urgent matters that we require to deal with and on which we look to the Law Commission to frame proposals.
Codification and consolidation can be very useful. It can make the law more accessible; it can, in exceptional circumstances, make the law more intelligible to ordinary people—and that is particularly desirable where the law affects everyday life, like the matrimonial law. Some judges—my noble and learned friend Lord Denning is a conspicuous example—have a knack of explaining and expounding the law in a way that makes it immediately intelligible to laymen. That is not always possible. The great consolidation and codification measures of this century, the property legislation of the 1920s—which I suppose will always stand as a monument—effected a great improvement, a great simplification and a great increase in perspicuousness of the law: but they still require lawyers to interpret. Of course, if you make the matter easier for lawyers, you make it in turn easier and cheaper for laymen, too.
I sometimes think that the noble and learned Lord, Lord Gardiner, rather oversimplifies the value of codification and consolidation. I sometimes feel that he has in mind a picture of two elderly people arguing amicably about their rights and, finding themselves at variance, reaching up for one of the 12 volumes in which the whole of English law is set out with great simplicity. If they are lucky, they find one of his own measures—one that I mentioned recently, the Matrimonial Proceedings and Property Act 1970—and they read there:
"Section 9, subsection (1) and subsection (3) of this Act shall apply to an order made or deemed to have been made under section 15 of the Act of 1965 in its application to proceedings for restitution of conjugal rights under section 21 of that Act or under section 34(1)(c) thereof as they apply to the orders mentioned in subsection (2) of the said section 9."
This Bill at least avoids that sort of nonsense. It is indeed reasonably clear

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and can be reasonably understood, at least by lawyers.
There is another matter on which it seems to me that this Bill has been well framed. The Act which I have just cited has occupied endless time of the court and involved great expense to litigants and the public because it did not make clear how far the Act was retrospective. As the noble and learned Lord has explained, this Bill is at least clear on that matter. Moreover, it removes certain anomalies and inconsistencies. It simplifies the law.
I thought that the noble and learned Lord was inclined to dismiss too airily the value of logic and absence of anomaly in the law. The value of logic is that anomaly and lack of logic, first of all bring the law into disrepute, and secondly, sooner or later, lead to injustice. Logic leads to consistency, and therefore to equity. I suppose most of your Lordships have had to undergo this sort of conversation from children: "Why cannot I do that? You let Bobby do it", to which the answer is "Bobby is two years older than you." That is exactly the way lawyers reason. Are circumstancies fundamentally the same, so that they shall be treated similarly in equity, or is there a difference that makes all the difference? When, therefore, one finds a major anomaly and illogicality perpetuated, such as the one to which the noble and learned Lord, Lord Gardiner, referred in Clause 2(b), it does discredit to the law and is liable to cause injustice to litigants.
I should like to say a word or two about the authority of the Law Commission in this matter. Although the Law Commission have done valuable work in this and other fields, it would be unfair to them, and quite wrong, to approach their deliberations as if they were sacrosanct. This matter has been investigated by other bodies. There was the Morton Royal Commission on Marriage and Divorce, which sat for three years. That was a very distinguished body: it was carefully balanced ideologically; it contained persons of all Parties and no Party; it contained women as well as men; it contained laymen as well as lawyers; and it contained practical people as well as intellectuals. In those respects I think it stands in contrast and
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advantage to the Law Commission. It recommended on this matter diametrically opposite to what the Law Commission have done; namely, that wilful refusal should become a ground for divorce and should cease to be a ground for nullity. The Archbishops' Commission on this subject also recommended this, and so did the Bishop of Exeter's Commission which produced the document, Putting Asunder. The Law Commission gave great weight in other parts of their Report to that body of "minority opinion", as they put it, but brushed it aside on this subject.
But the matter does not only rest with the institutional bodies. After the Law Commission had issued their Report I formally consulted all the Judges of the Probate, Divorce and Admiralty Division. They were unanimous that the Law Commission were wrong on this matter and that the Royal Commission were right. It was of course not my place to consult those Lords Justices who have sat in the Probate, Divorce and Admiralty Division formerly—a majority of them have—but I consulted most of them, all except two, informally, and they were unanimously of the same opinion that the Law Commission were wrong on this matter. That is also the view of my noble and learned friend Lord Hodson, who has sat on the Bench for 33 years—he has only just retired—and for most of that time in the matrimonial jurisdiction.
As for the view of the other place, that the noble and learned Lord suggested should keep us from putting forward an Amendment in Committee, I would venture to point out that, according to my recollection, an Amendment on this point was defeated by a majority of four to three. It seems to me to be an extraordinary constitutional doctrine that this House should be precluded from reviewing a matter on which there are weighty opinions, as I have suggested, to the effect that the Bill is wrong in this respect, by a majority of that sort.
Otherwise it seems to me that this Bill effects an improvement in the law. There were many matters that were very unsatisfactory about the 1937 Act—A. P. Herbert's Act. Some of them have disappeared in this Bill. For example, the description of the mental disability that invalidates a marriage is much improved in this Bill. And it was certainly an

811
anomaly that epilepsy should be a ground of nullity, even though existing at the time of the marriage, when no other physical ailment, and only to a very limited extent mental ailments, invalidated a marriage.
My Lords, may I finally draw attention to one further matter relating to wilful refusal. I suppose that anyone, lawyer or layman, would say that it would be a complete nonsense that the same matter should be at the same time a ground for divorce and a ground for declaring a marriage void. Yet that is what the Bill in effect does. Under the Divorce Reform Act 1969, Section 2(1)(b), the court shall give a divorce on the ground of irretrievable breakdown of marriage if it is proved that the respondent has behaved in such a way that the petitioner cannot reasonably be expected to live with the respondent. Clearly wilful refusal to consumate a marriage would fall within that paragraph and would thus be a ground of divorce, while this Bill purports to declare that it should also be a ground of nullity.
I do not propose at this stage to go further into the matter. In my respectful submission none of the Law Commission's reasons stand up to detailed or informed scrutiny. As I have told your Lordships, the Judges gave their opinion in the light of the Law Commission's Report. I have no desire to hold up this Bill in any way; I certainly would not oppose a Second Reading, and if the noble and learned Lord, Lord Gardiner, feels that an Amendment, if discussed at great length, might endanger its future, the matter lies entirely in his hands: he can indicate that the Amendment will be accepted. I personally propose to move an Amendment at the Committee stage to remove this anomaly, but otherwise I commend the Bill to your Lordships.
4.58 p.m.
THE LORD CHANCELLOR: (LORD HAILSHAM OF ST. MARYLEBONE): My Lords, I am sure that the whole House is grateful for the lucid explanation of the purposes of the Bill given us by the noble and learned Lord, Lord Gardiner, and for the weight of experience and wisdom with which my noble and learned friend Lord Simon of Glaisdale has en-
812
riched the debate. They clearly differ on one important point to which I will come. It is desirable that I should declare both my own and perhaps also the view of the Government on the issues which have been raised.
As the noble and learned Lord, Lord Gardiner, has said, this is another law reform Bill arising out of a Report of the Law Commission. Occasionally, the Law Commission will produce Reports which introduce matters of controversy, but I do not think that this is controversial in that sense. I am therefore able to welcome the Bill wholeheartedly on behalf of the Government. I should like to give thanks both to the Member in the other place who undertook the burden of sponsoring the Bill, and to the noble and learned Lord, Lord Gardiner, for sponsoring it in this House.
I should like to take the opportunity to repeat that it is my settled intention to use whatever influence I possess to secure an easy passage for law reform Bills which are not politically controversial and which have passed the Law Commission or one of the Law Reform committees. But it is an essential part of this policy that once I have cleared the Bill through the Government machine I should be able to count on the good offices of Private Members in each House, and of all Parties, to sponsor as many of these as are capable of being handled—and some of them are not capable of being handled—by Private Members in both Houses. I think there are a good many Members of both Houses who would be glad and proud at least once in their Parliamentary lives to have passed a Bill of their own into law, and I can promise them the full co-operation of my own Office in any technical assistance which it is in our power to give.
The noble and learned Lord, Lord Gardiner, has already explained the purpose and scope of the Bill, and I am sure the House will not expect me to duplicate his labours; not would I desire to do so. I will therefore turn, if I may, to the one or two points that are likely to give rise to discussion in Committee. But, if I may do so, I should like to preface it by one or two observations about the philosophy of marriage underlying the Bill. The Bill deals with nullity of marriage. What is marriage? Marriage is for this purpose

813
a contract giving rise to a status. And nullity of marriage is a process of law designed to discover and declare the state of affairs where, despite appearances to the contrary, it can be established either that no marriage has ever existed or that circumstances are such that one party is entitled at his option to rescind the marriage and restore so far as possible the status quo.
The first situation is dealt with in Clause 1. The second in Clause 2 and, I think, Clause 5. Obviously, the second situation partakes of something in common with divorce. Although it is called nullity, a marriage subsists up to the moment of decree and therefore what is done is to break the vinculum, the bond, of marriage. But it is done on the ground that the marriage is annulled. If there is said to be an anomaly in the sense that my noble and learned friend has just been talking about from the Cross-Benches, I would suggest it probably lay in allowing the second situation to subsist as nullity, rather than bringing the whole thing into the field of divorce. But, for the reasons which the Law Commission give, I am wholeheartedly in favour of retaining the law of nullity in the case of the voidable marriage. The noble and learned Lord, Lord Gardiner, adumbrated the reasons, and, as I understood my noble and learned friend's speech, the second speech, who differed on the one point of wilful refusal, he did not complain of the general proposition. But if there is an illogicality it lies there, and I shall be going on to argue, when I come to deal with my noble and learned friend's speech, that it does not lie so much in the field where he thought to find it.
But, basically speaking, nullity on the grounds of voidability, as distinct from the situation where the marriage is void ab initio, is not the same as divorce. To begin with, there is not the same religious objection to it where religions believe that there is an objection to dissolution. One cannot say that there never is the same religious objection to it, because unfortunately the law of nullity, as explained by the Roman Curia, is not identical with the law of nullity, as it exists in English law, or as it will exist in English law if this Bill comes into effect. But when you have to advise as a matter of practical politics a party
814
that has an "unhappy" marriage (if I may put the word in inverted commas), and also has the misfortune to belong to a religion which holds that there is an objection to divorce but not to nullity, one sometimes does find the distinction of very considerable importance in actual practice.
Moreover, consequences are different. And it differs in the connection which has become relevant from divorce from a procedural point of view in so far that a petitioner for nullity on the grounds of voidability can take advantage of his remedy from the start; that is to say, he can bring his petition at once and he need not wait three years. Indeed, your Lordships will see if you turn to Clause 3 of the present Bill, which very largely reproduces the existing law, that for some purposes a petitioner for nullity loses his right to nullity if he in fact waits for a long time; or may lose his right to nullity if he waits for a long time before exercising it. And, if I may say so to my noble and learned friend whose speech has really provoked to some extent my own, I think there he may find the answer to the ingenious but, I suspect, somewhat specious point that he made about the 1969 Act providing the same ground for divorce as this Act provides for nullity, because of course the 1969 Act might very well apply where the grounds for nullity were barred under Clause 3 of this Act. So it may not be so stupid or anomalous to allow both grounds or both kinds of proceeding as my noble and learned friend seemed to think.
There is one other preliminary point I think I ought to make. It is of course normally one of the parties that seeks to establish the invalidity of a marriage. In a case of a void marriage, of course this is by no means necessarily the case—titles of honour, succession to property often depend on whether or not a marriage has taken place. And third parties can often raise the question directly or obliquely when they wish to set up a state of facts which, if established, would establish also and indirectly the nullity of somebody else's marriage. But, strictly speaking, although the result of such proceedings will be governed to some extent by the law declared in this Bill, such proceedings are not correctly described as the proceedings for nullity of marriage. They

815
are actions of one sort or another in which the case for one side or the other depends on the proposition either that no marriage has taken place or that facts exist which, if true, would have that result.
The two really contentious clauses in the Bill are the subsection which relates to marriages between persons who are not of opposite sex and the subsection which relates to wilful refusal to consummate the marriage. In the first case there are those, including the Law Commission, who would wish to put the alleged unions outside the law of nullity altogether. What would be the difference, what would be the effect, of doing so? The effect would be that the parties who wish to attack a union of that kind would be left to proceed by action for a declaration. This of course would mean that the party seeking the declaration would be unable to obtain ancillary relief; that is to say, would be unable to obtain maintenance if the party was a woman. That would deprive them of an important ancillary relief which is available to them in what are strictly nullity proceedings. As sent up to us, the Bill does make such a union void, but allows nullity proceedings between the parties to be available, although for the reason I have stated it will also in certain circumstances be open to third parties to attack the marriage for reasons of their own. I shall advise the House to accept the view of the other place in this respect.
In the second case there is, as appears from the very powerful speech of my noble and learned friend from the Cross Benches, a respectable school of thought, backed apparently by all the Judges of the Probate, Divorce and Admiralty Division, who want to make wilful refusal to consummate a ground for divorce and not for nullity. This Bill, which follows the status quo which has operated for, I think the noble and learned Lord said, 34 years—at any rate since the Herbert Act of 1937—sticks to nullity in the voidable class and therefore continues the status quo. Although I recognise the strength of what is alleged to be a purely logical argument, although I shall seek to attack its logic at one stage, the other way, I myself have absolutely no hesitation in advising the House to retain the Bill in its present form; and this corre-
816
sponds to the advice given by the Law Commission in paragraphs 26 and following of their Report.
I want, if I may, to give some reasons for my attitude on each of these two controversial topics. There is, however, one ground common to both. I absolutely agree that the other place is not infallible. This is not a Chamber that has simply got to rubber-stamp decisions which the other place makes. I would very strongly resist the suggestion that, simply because they have put us in a certain position in the Parliamentary year, we should necessarily refuse to change what they have done if we think they are wrong. But I would suggest that when we are not talking about matters of high principle, and when we are not talking about politically contentious Bills, one ought to keep disputes between the two Houses to a minimum and one ought not to start with the presumption that the other place has made a mistake; because they are occasionally right, and in this case on both of these contentious issues I would suggest that they are in fact right.
This brings me to the two issues. The first is what I might call the unisex "marriage"—using the word "marriage" in inverted commas. Obviously cases can, and obviously cases do, exist where such marriages are nothing better than a conspiracy against the law as it now is. In such cases I have no sympathy whatever with those people; and if in fact that was the only type of case coming under this head I would agree with the school of thought which says, "Do not bring it within nullity at all, for nullity proceedings, even in a void marriage, give a wife right of maintenance from the husband, and in a unisex alliance there is no true husband and no true wife".
Those arguments prevailed with the Law Commission; but, on balance, I reject them. Equally I may say in passing that I reject the rather charismatic speech which was uttered in another place and which suggested that all unisex "marriages" should be treated with the same respect as a proper one. But the reason I give for rejecting the Law Commission's view is that in practice alliances of the type which I condemn, and condemn wholeheartedly, are not the only, although they may be the most common, alliances of this class. For instance, I

817
know of at least one case, from my own experience, where the so-called husband had both testicular and ovarian tissue in his body, and in that case the wife had no particular desire to disavow the marriage which resulted. There are other cases where one of the parties has the external organs of one sex and the internal organs of the other. I should say, with respect, that there is no reason in cases of this doubtfulness, where alliances were entered into in good faith, why the parties should be deprived of maintenance or ancillary relief.
Moreover, in nullity cases—and I think one must remember these practical details—evidence can be given in camera, and in my opinion evidence of this kind is very much better given in camera. I think the feelings of parties who have a humiliating experience of this kind ought to be considered. Painful and intimate matters are better not ventilated in public, and the law of nullity provides for such evidence to be given in camera.
To ray mind, another and in this case I think conclusive, argument (and I am happy on this occasion at least to agree with the judges) is that the rights and wrongs of the situation set up in the case have been fully considered in two of the reported cases in the courts in the last five years. There was a case called Talbot in which the two parties were alleged to be women, or basically female, and there was a case called Corbett where the contrary was the situation. The judges argued the matter out at great length and eventually came to the same conclusion that I have set forth. Although I agree with the Law Commission that financial relief is inappropriate where parties enter into the relationship with their eyes open, since financial relief is discretionary the courts are quite forth. I think, to establish their own practice in the matter. I thought it right to say how I stood on that subject because it is something which we may be considering later.
That brings me to the argument of my noble and learned friend about wilful refusal to consummate. I agree unequivocally with the Law Commission. I admit that they are not infallible—I have just been stating my reasons for differing from them—and although I respect the members of the Morton Commission and
818
the two Church reports, and perhaps more than any of them my noble and learned friend Lord Simon of Glaisdale, I adhere to my view. Apart from the general reason I have given for leaning in favour of another place in a matter of this kind, there is a great deal to be said for leaning in favour of the status quo. It would create anomalies to make marriages ending before a given date void on nullity proceedings and after a given date to dissolve them. That is an anomaly and it would give rise to results which in my view would be undesirable. From the practical point of view I agree with the noble and learned Lord, Lord Gardiner.
The logical truth of this matter is that although theoretically an incapacity to consummate a marriage and a wilful refusal to consummate a marriage are mutually exclusive alternatives, they must almost always in practice, if we want to achieve justice between the parties—which, after all, we are seeking—be pleaded in the alternative. At least that is so when one is acting on behalf of a petitioner who wishes to terminate the marriage on the grounds that it has not in fact been consummated and where there is no physical reason why it has not been so consummated—that is to say, where there is nothing wrong, for instance such as the absence of external sexual organs. Incapacity is, and must, by consent remain in the field of nullity. My noble and learned friend does not suggest the contrary. Indeed he could not, because incapacity is one of the age-old grounds for nullity. I think it is one of the grounds accepted by the Roman Catholic Church.
However, it would be a real departure from logic to move wilful refusal into the field of divorce. This is because, as the noble and learned Lord, Lord Gardiner, pointed out, incapacity is often mental and not psychological, and the point at which it ceases to be incapacity and becomes wilful refusal to consummate is often a matter of degree, or at least a matter of opinion not discoverable until evidence is given at length. In my view, some of the earlier cases of nullity on the grounds of incapacity, before 1937, were at least really cases of wilful refusal.
As I have said, the difference between nullity and divorce which is reflected in the so-called three-year rule relating to divorce is that whereas in divorce one

819
should only proceed to it when the marriage has irrevocably broken down, whether one is acting under the old rule or under the new (and therefore in the absence of exceptional depravity not for three years) in cases of nullity the practical answer is "the sooner the better"—much sooner, much better. Although both parties should make every effort to consummate their marriage, inability or complete refusal to do so can usually be ascertained beyond a peradventure long before three years are up.
Before I sit down I should like to pass to a short point which was raised by the noble and learned Lord, Lord Gardiner, not on the content of the Bill but on the way in which it is set out. He referred in passing to the Keeling Schedule, but he then went on to point out that in another place the Solicitor General gave a sympathetic reply when the sponsor of the Bill referred to the possibility of explanatory matters—in this case the clause notes, I think, of the new Commission—being interleaved with the Bill instead of the limited Explanatory Memorandum printed at the beginning of the Bill. He ventilated the theory that the Bill would have been better had it been printed in that way. Of course it must be clear that in theory each House can determine the manner of printing the Bills in front of it. It could be done, I suppose, by a simple Resolution of each House. I suppose also (although I do not know this) that by the time the Bill was passed from one House to the other—if it was initiated here, from this House to the other place; and if it was initiated there, from the other place to this House—it would have to be printed in a form which that House was willing to accept, and joint resolutions, preceded by a Joint Select Committee or Joint Sub-Committees of their two Procedure Committees, would in my view be a necessary method before a permanent change was Made. Of course, there could be experimentation in either House, but I doubt whether it would be desirable for the two Houses to pursue different lines of policy in the matter.
As regards the merits of the proposal, the Solicitor General, as the noble and learned Lord said, gave a sympathetic reply. I am personally a little more sceptical than he was. It would of course
820
be easy and helpful enough in the case of a simple law reform Bill sponsored by the Law Commission, like the present, but what goes into or is left out of the explanatory material in more contentious Bills might very well turn out to be a matter of great controversy, and people might be accused of either omissions or insertions which were misleading. For instance, in the case of Bills floated by private Members one might have material inserted for publicity reasons. Or in the case of contentious Bills floated by the Government—the Industrial Relations Bill, the Immigration Bill or perhaps a Common Market Bill—no doubt the Explanatory Memorandum inserted by this Government would be very helpful; but then again it might not, and it would almost certainly be tendentious and in the worst cases openly propagandist.
I am grateful to the noble and learned Lord for raising the subject, but if he wishes to take it further I think the next step would be to put it before the Procedure Committee or raise it through the usual channels. I see the problem as a little more difficult than it appears at first sight. In the end it is for the House to decide, and not the Government, but I fancy that a good deal of preliminary Committee work would be necessary before a viable plan could be made, even supposing the principle were accepted. I hope that I have made my position plain on this Bill. I am not, as is so often the case on a Private Member's Bill, neutral; I am in favour of it as it stands, not merely for the procedural reason which the noble and learned Lord gave in his opening speech, but because I think on its merits it stands better than any alternative on the two contentious points.
5.23 p.m.
VISCOUNT BARRINGTON: My Lords, may I with your Lordships' permission, ask a question—probably a stupid question? It is certainly a layman's question, and one which has only just occurred to me, in view of the two extremely lucid interesting expositions I have heard. It relates to one of the two clauses which are in dispute, that is to say Clause 1(c), the unisex marriages. I do not think anybody anywhere, in this House or elsewhere, would dispute the object of this clause; that if a male

821
marries somebody whom he believes to be a female and then finds he is wrong, or a female marries somebody whom she believes—wrongly as it turns out—to be a male, that is not a proper marriage. In the case of a husband who finds he has not got a wife, or a wife who finds she has not got a husband, that is adequately dealt with in this way.
These cases happen very seldom, but I know that they do happen, and they are not jokes. What happens if the husband finds that he has not got a wife and the wife finds that she has not got a husband? As the clause is worded—"that the parties are not respectively male and female"—that applies, unless "respectively" has a legal sense. One might go into the marriage hoping to be the husband and finding oneself the wife. It might avoid trouble, if this point has not been covered, if we were to deal with it. I wonder if there is another way of wording it. I apologise if I have wasted your Lordships' time, but we live in a progressive age when strange things happen.
LORD GANRDINER: My Lords, I am grateful to noble Lords who have taken part in the discussion of this Bill. I am not sure, with the greatest respect, that I got the last point of the noble Viscount, Lord Barrington, right. Was he asking what will apply if the man who thought she was a man turns out to be a woman and the woman who thought she was a woman turns out to be a man?
VISCOUNT BARRING1ON: Yes.
LORD GARDINER: If that is so, I should have thought the new subsection would not apply—the question is whether they are "not respectively male and female". If in fact they are male and female, there is no reason why there should be a nullity of that marriage. I will consider that point further, if I may, before Committee stage.
There is no Member of your Lordships' House from whom in a matter of this kind we would sooner hear than the noble and learned Lord, Lord Simon of Glaisdale, whose knowledge and authority in this field are, of course, quite unrivalled. It is, I think, quite right to say that the Law Commission are still considering the question of community property. We know that it is difficult, and I hope they
822
may find a practical solution. I am very glad to know that the noble and learned Lord, while not being as passionate an adherent of codification as I am, is of opinion that this is a Bill which removes anomalies and inconsistencies, as well as codifying the part of the existing law which remains, and that he differs from the Bill only on the one point, which is whether wilful refusal should continue, as at present, to be a ground of nullity or should be a ground of divorce.
It would not be right that I should continue the discussion of this point at this stage of the Bill. All I can ask him to do is to be kind enough, if he will, before we approach Committee stage, to consider the reasons I ventured to give. I had of course taken into account the views of the Morton Commission some 15 years ago. I would ask him similarly to take into account not only the views of the Law Commission, but also the views of, I think, all other common law countries, and in particular, of course, the observations which the noble and learned Lord the Lord Chancellor has expressed in this House today. Perhaps it is not too bad for the Second Reading of any Bill that only one point of objection is taken to anything in the Bill, and then only by one Member of your Lordships' House. That makes it sound to me as if it is rather a good Bill.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

COURTS BILL [H.L.]
5.28 p.m.
THE LORD CHANCELLOR: My Lords, I beg to move that the Commons Amendments be now considered. I apologise for the rather formidable looking menu which is now before the House, but I look forward to being assisted a good deal by the noble and learned Lord, Lord Gardiner, in the grouping and handling of any points which need discussion. My own belief is that there is practically nothing which raises a question of principle, and if I may try to move along as quickly as possible with a mass of technical and misconsequential Amendments and to raise any new matter as I go along, I hope that we may dispose of this formidable series of Amendments fairly reasonably quickly.
Moved, That the Commons Amendments be now considered.—(The Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[References are to Bill 85 as first printed for the Commons]
[Nos. 1–3]
Clause 7, page 6, line 28, after second "period" insert "for the respective purposes of paragraphs (a) and (b) of this subsection".
Clause 9, page 7, line 12, at end insert—
("( ) Subsection (2) above has effect subject to any enactment relating to any such appeal which expressly limits or restricts the powers of the court on the appeal."
Clause 10, page 7, line 33, at end insert "which, by any provision of any of those Acts, is to be final."
THE LORD CHANCELLOR: My Lords, perhaps I may say in advance that I am going to move in the case of each Amendment, That this House cloth agree with the Commons in the said Amendment. There is no Amendment which I am moving otherwise. May I take first Amendments Nos. 1, 2 and 3. I think they are purely drafting, and I do not think I need detain your Lordships with them at ail. I beg to move that this House doth agree with the Commons in Amendments Nos. 1, 2 and 3.
Moved, That this House both agree with the Commons in the said Amendments.—(The Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 4]
Clause 13, page 10, line 9, leave out from "person" to end of line and insert—

"(a) who has been committed in custody for appearance before the Crown Court, or

(b) who is in custody pursuant to a sentence imposed by a magistrates' court, and who has appealed to the Crown Court against his conviction or sentence, or

(c) who is in the custody of the Crown Court pending the disposal of his case by the Crown Court, or

(d) who, after the decision of his case by the Crown Court, has applied to the Crown Court for the statement of a case for the High Court on that decision, or

(e) who has applied to the High Court for an order of certiorari to remove proceedings in the Crown Court in his case into the High Court, or has applied to the High Court for leave to make such an application,

and the time during which a person is admitted to bail under any provision of this subsection
824
shall not count as part of any term of imprisonment or detention under his sentence."
THE LORD CHANCELLOR: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 4. This again is really no more than technical. It is intended to clarify the power of the Crown Court to grant bail. It makes clear that that Court can grant bail to persons awaiting trial, or sentence, or waiting for their appeals to be heard.
Moved, That this House doth agree with the Commons in the said Amendment.—(The Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 5]
Clause 15, page 12, line 34, leave out "shall consult".
THE LORD CHANCELLOR: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 5, which is a purely drafting Amendment.
Moved, That this House doth agree with the Commons in the said Amendment.—(The Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 6]
Clause 17, page 13, line 33, leave out "inability" and insert incapacity"
THE LORD CHANCELLOR: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 6. It might be convenient—although I shall put the Question formally at Amendment No. 11—if I discussed Amendment No. 11 with this Amendment. Clause 17(4) enables the Lord Chancellor to remove a Circuit judge from office on the ground of inability or misbehaviour. Clause 21(6) enables him to terminate the appointment of a recorder, or part-time judge, from office on the ground of inability or misbehaviour. The Commons have substituted the word "incapacity" in each case for the word "inability". I am disposed to think that that is a better word. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(The Lord Chancellor.)
LORD GARDINERH: My Lords, this was an Opposition suggestion. I agree that the wording is an improvement, and we are grateful to the Government for accepting the Opposition suggestion.
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 7]
Clause 19, page 15, line 31, leave out subsection (4) and insert —
"(4) Sections 2 to 9 and 15 to 17 of the Administration of Justice (Pensions) Act 1950 (lump sums and widows' and dependants' pensions) shall apply in relation to a circuit judge and service as such a judge as they apply in relation to the persons specified in Schedule 1 to that Act and the service specified in that Schedule as their relevant service."
THE LORD CHANCELLOR: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 7, which is a purely drafting Amendment.
Moved, That this House doth agree with the Commons in the said Amendment. —(The Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[Nos. 8–10]
Clause 20, page 16, line 12, leave out subsection (1) and insert —
"(1) Every Circuit judge shall, by virtue of his office, be capable of sitting as a judge for any county court district in England and Wales, and the Lord Chancellor shall assign one or more Circuit judges to each district and may from time to time vary the assignment of Circuit judges among the districts.
(1A) Subject to any directions given by or on behalf of the Lord Chancellor, in any case where more than one Circuit judge is assigned to a district under subsection (1) above, any function conferred by or under the County Courts Act 1959 on the judge for a district may he exercised by any of the Circuit judges for the time being assigned to that district."
line 20, leave out from "Wales" to "if in line 21 and insert "and"
line 24, leave out subsection (3) and insert—
"( ) Notwithstanding that he is not for the time being assigned to a particular district, a Circuit judge—

(a) shall sit as a judge of that district at such times and on such occasions as the Lord Chancellor may direct; and

(b) may sit as a judge of that district in any case where it appears to him that
826
the judge of that district is not, or none of the judges of that district is, available to deal with the case.

( ) So much of Part I of the County Courts Act 1959 as makes special provision in relation to county court districts within the Duchy of Lancaster shall cease to have effect."
THE LORD CHANCELLOR: My Lords, I beg to move that this House doth agree with the Commons in their Amendments Nos. 8, 9 and 10. I should like to take with them Nos. 30. 66, 67, 90, 116 and 167, which are all linked with them, although I shall formally put the Question on them later. These Amendments restate the provisions of Section 4 of the County Courts Act 1959 which deals with the assignment of judges to county court districts, and it does so in a form more appropriate to the Bill. It will also simplify the procedure whereby Circuit judges and deputies are to act as judges for county court districts. I could explain that at greater length but I think it is unnecessary to do so. It is a simple improvement to the Bill. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendments. —(The Lord Chancellor.)
5.35 p.m.
LORD GAR1DINER: My Lords, on this group of Amendments it is not my intention to ask your Lordships to disagree with the other House. However, I should like to ask the noble and learned Lord the Lord Chancellor what his intentions are. It is within the spirit of the Beeching recommendations that we all badly want to get a greater degree of flexibility in the use of our judge power. Therefore, I do not object at all to what these Amendments do in form—namely, in the simplest way, enabling the noble and learned Lord the Lord Chancellor to ask any Circuit judge to act as a county court judge. But I would just like to know, if we may, how the Lord Chancellor proposes to use this power, because it is my earnest hope that this will happen only on very rare occasions.
I have often thought that in some ways a county court judge is more important than a High Court judge—or, rather, that he has a more difficult task: because, after all, the High Court judges have experienced counsel to explain the points and refer them to the relevant cases, and

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so on. The ordinary person is much more likely to find himself in a county court than in the High Court. Secondly, the judge in a county court has either solicitors or young counsel—or, often, no one—and the first thing the judge has to do, in an action, say, between two Jamaicans, is to discover what on earth the case is about. Also, he has to deal with whether people are to lose their homes, and other matters of importance. If the noble and learned Lord could wave a wand, one which I should have liked him to wave would be one that resulted in all the High Court judges acting for three months as county court judges, and all the county court judges acting for three months as High Court judges. I cannot help thinking that if that could happen both groups would learn a good deal.
Some county court judges sit occasionally on criminal cases at sessions, but their main work is of course civil; they are men who are appointed specifically with county court work in mind, and in my experience most of them are of a very high standard. I should not like to think that they would be taken away from that work to do criminal work (other than in very rare cases indeed) while a Circuit judge, who may never have been in a county court since his youth, is used as a county court judge. Therefore, if that is his intention, I would ask whether the noble and learned Lord will be good enough to confirm that, while the power will be there, he does not anticipate that it is one which will often require to be used.
THE LORD CHANCELLOR: My Lords, I hope I can satisfy the noble and learned Lord on this point. It is very difficult to generalise because the capacities, and the inclinations, of the various members of the Judiciary who will become Circuit judges when this Bill is passed vary almost infinitely. To take two extreme cases—and they are two extreme cases—the Vice-Chancellor of the County Palatine of Lancaster will be virtually a Chancery practitioner, and he will really be doing Chancery work there as he does now. The only thing is that he may have to do a little more of it than he does now, owing to the fact that he may have to undertake a few more days sittings in order to be able
828
to take cases from a larger catchment area. On the other hand, the full-time chairman of London Sessions does practically nothing but criminal work, and I hope he will remain doing practically nothing but criminal work. Those are the two extreme cases; between those extremes there is almost every variation of individual difference. Some county court judges, as they now are, undertake quite a lot of criminal work as chairmen and deputy chairmen of quarter sessions. They will, therefore, be quite likely to continue the same work, presiding over their local Circuit courts as they do now, with justices sitting with them. In appointing Circuit judges, or their equivalent now, one looks for what the vacancy requires, and one provides a man to fit that vacancy so far as one can fit a round peg into a round hole.
The purpose of these powers is to enable them to be moved to deal with the unusual case, so that they all have the jurisdiction to act if they are required. If I may make one qualification to what the noble and learned Lord said, my own conviction—I do not know if it was his when he was Lord Chancellor—is that it is good for a judge not to get into a rut. One advantage of being a High Court judge is that you do both criminal and civil work, and it is very good indeed for a civil judge to have done criminal work and divorce work as well as his own civil assize work. I think the same is true in the county courts, and I think it was quite a bad thing when in my youth they were regarded as something of a backwater.
I agree with the noble and learned Lord that county court judges come into contact with the respectable public a great deal more than almost anybody else. But I think to have a knowledge of what is going on round the corner in the Crown court will do them nothing but good. Although one must be extremely sparing about it, because there is no specialised Bar quite so specialised as the criminal Bar in some of its reaches, I think it is very good for the criminal specialist occasionally to see what goes on in the county court, because you never know in a criminal court when you are going to meet a respectable man for once, and it is very important to be able to recognise him.
I will use the power sparingly. It is designed to give a common jurisdiction

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to a very wide range of judges who will be doing quite a variety of different types of work, but I think I can wholly accept the general proposition which the noble and learned Lord put.
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 11]
Clause 21, page 17, line 24, leave out "inability" and insert "incapacity".
THE LORD CHANCELLOR: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 11. I have already explained this Amendment.
Moved, That this House doth agree with the Commons in the said Amendment.—(The Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[Nos. 12& 13]
Clause 23, page 18, line 23, after "of", insert "continuing to deal with"
Clause 23, page 18, line 24, leave out "he may have heard" and insert "may have been begun before him".
THE LORD CHANCELLOR: My Lords, I beg to move that this House doth agree with the Commons in their Amendments Nos. 12 and 13, with which I should like to mention the linked Amendments, Nos. 20 and 21. These are very little more than drafting. Clause 23(4), as it stands, gives a Circuit judge or recorder sitting in the High Court power, notwithstanding the expiry of the period of time for which he has been requested to sit, to attend at the High Court,
"for the purpose of giving judgment in, or dealing with any ancillary matter relating to, any case which he may have heard when sitting as a judge"
of the High Court. Clause 24(5) gives the same powers to temporary High Court and Circuit judges. The Amendments make it clear, which was not the case on the original wording, that a Circuit judge or recorder or deputy judge, as the case may be, may return to a case which had been adjourned part-heard. I am not myself convinced that this Amendment was necessary, but as doubts have been expressed it has been inserted—and I think rightly—by the Commons. I beg
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to move that this House doth agree with the Commons in their Amendments Nos. 12 and 13.
Moved, That this House doth agree with the Commons in the said Amendments.—(The Lord Chancellor.)
LORD AIREDALE: My Lords, Amendment No. 12 introduces into the Bill the phrase "continuing to deal with giving judgment", which I should have thought was a pretty inelegant expression. I suppose what it means is continuing to give judgment, and I am only sorry that the Amendment did not say so.
THE LORD CHANCELLOR: My Lords, I stand rebuked on behalf of my colleagues in the Commons.
On Question, Motion agreed to.

COMMONS AMENDMENT
[Nos. 14–19]
Clause 24, page 18, line 35, leave out "temporary" and insert "deputy"
Clause 24, page 18, line 41, leave out "temporary" and insert "deputy"
Clause 24, page 19, line 8, leave out "temporary" and insert deputy"
Clause 24, line 13, leave out "temporary" and insert "deputy"
Clause 24, line 24, leave out "temporary" and insert "deputy"
Clause 24, line 25, leave out "temporary" and insert "deputy"
THE LORD CHANCELLOR: My Lords, I beg to move that this House doth agree with the Commons in their Amendments Nos. 14 to 19 inclusive. I should like to take with those the linked Amendments, Nos. 22 to 25 inclusive. These Amendments substitute the word "deputy" for "temporary" in the clauses dealing with temporary appointments. Your Lordships may remember that, when the Bill passed through your Lordships' House, the title "temporary" incurred a certain amount of criticism, not least from my noble and learned predecessor Lord Dilhorne, and that criticism was repeated in another place. I think it was the Opposition who suggested that "deputy" was preferable to "temporary", and I am certainly very happy to accept it. I beg to move that this House doth agree with the Commons in their Amendments Nos. 14 to 19 inclusive.
Moved, That this House doth agree with the Commons in the said Amendments. —(The Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[Nos. 20–25]
Clause 24, page 19, line 27, after "of", insert "continuing to deal with"
Clause 24, page 19, line 29, leave out "he may have heard" and insert may have been begun before him"
Clause 24, page 19, line 29, leave out "temporary" and insert "deputy"
Clause 24, page 19, line 30, leave out "temporary" and insert "deputy"
Clause 24, page 19, line 35, leave out first "temporary" and insert "deputy"
Clause 24, page 19, line 35, leave out second "temporary" and insert "deputy"
THE LORD CHANCELLOR: My Lords, I have already spoken on Amendments Nos. 20 and 21 when I spoke on Nos. 12 and 13, and I spoke on Nos. 22 to 25 when I was dealing a moment ago with Nos. 14 to 19. I shall therefore move them en bloc. I beg to move that this House doth agree with the Commons in their Amendments Nos. 20 to 25.
Moved, That this House doth agree with the Commons in the said Amendments.—(The Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 26]
Clause 33, page 24, line 3, leave out "shall, if any party to the proceedings so requests" and insert "may, if the court thinks fit"
THE LORD CHANCELLOR: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 26. Clause 33 states in modern form the law about what used to be called rather obscurely "praying a tales" for a jury. As originally drafted, it expressed the existing rule that a tales is prayed at the request of one of the parties. But, in practice, the judge at present determines the matter and, if necessary, elicits a request from one of the parties. The court should be enabled to initiate the procedure of its own motion and this Amendment achieves this effect. The praying of a tales arises when the court runs out of jurors. I beg to move that this House doth agree with the Commons in their Amendment No. 26.
Moved, That this House doth agree with the Commons in the said Amendment.—(The Lord Chancellor.)
LORD GARDINER: My Lords, I have no objection to this Amendment, but now that we are in the field of juries I wonder whether I might ask the noble and learned Lord the Lord Chancellor what are the prospects of the implementation of the Report of the Committee on juries, of which the noble and learned Lord, Lord Morris of Borth-y-Gest, was Chairman. I think it met with a cordial reception from nearly everybody, but it is now years since it was published. I am rather sorry that I was a Member of a Government which did not themselves take steps to implement that Report, although I think we should have done so by now had we been returned to office. Whether the Home Office have something against it or what exactly the trouble has been, I really do not know. So I shall be grateful for any information which the noble and learned Lord can give us about it.
THE LORD CHANCELLOR: My Lords, I am afraid that the latest information I can give to the noble and learned Lord was given in another place by my honourable friend Mr. Mark Carlisle of the Home Office, and that is to be found in Hansard of the House of Commons for April 7, 1971, at column 524. As he is a Minister, I can read what he said, which was:
"What I can say is that the Government are considering the Report. We have been in office for nearly a year. The right honourable and learned gentleman"—
he was referring to Sir Elwyn Jones —
"accepted that the Labour Government had the Report for five years, and I cannot believe that the compartments were quite so watertight that the Attorney General's Department never knew what the Home Office had in mind for the criminal law. The Government are considering this. I am sure that they will bear in mind the views expressed to-day, and if it is decided to implement the Report in full, then legislation will be considered. But I cannot go beyond that."
I am sorry to say that I cannot go beyond that either.
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 27]
Clause 37, page 26, line 18, after first "him", insert "or that the Crown Court or

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any other Court has excused him from jury service for a period which has not terminated".
THE LORD CHANCELLOR: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 27, which enables a previous excusal from jury service to operate where a person receives another jury summons during the period for which he was excused. I think I can say that this is purely technical.
Moved, That this House doth agree with the Commons in the said Amendment.—(The Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 28]
Clause 39, page 27, line 34, leave out from "had" to "as" in line 35 and insert "such period of time for deliberation".
THE LORD CHANCELLOR: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 28, which is of slightly more substance than the ones with which I have been dealing. This Amendment was first moved by the Opposition in Standing Committee and it was accepted by the Government. Its effect is to remove the requirement in Clause 39(3) of the Bill, that a jury must have had at least two hours for deliberation before bringing in a majority verdict in civil proceedings, and to leave it to the court to decide what period is reasonable. The requirement of a two-hour period was inserted in the Bill following the precedent in the Criminal Justice Act 1967, which provides the requirement for criminal proceedings.
The Government have accepted that different considerations may apply in civil proceedings, where the burden of proof is not so heavy and the issues, though important, are not so vital as those involved in criminal proceedings which may result in imprisonment. I understand that the noble and learned Lords, Lord Parker of Waddington and the Master of the Rolls, were consulted at the time and were in favour of the Amendment. In these circumstances, I feel happy to recommend it to the House. I beg to move that this House doth agree with the Commons in their Amendment
Moved, That this House doth agree with the Commons in the said Amendment.—(The Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 29]
Clause 40, page 28, line 4, leave out subsections (2) and (3) and insert —
"(2) No judgment after verdict upon any indictment, or after verdict in any other trial by jury in any court, shall be stayed or reversed by reason —

(a) that the provisions of this Act about the summoning or impanelling of purors, or the selection of jurors by ballot, have not been complied with, or

(b) that a juror was not Minded in the relevant jurors' book or jury list, or

(c) that any juror was misnamed or misdescribed, or

(d) that any juror was unfit to serve.

(3) Subsection (2)(a) above shall not apply to any irregularity if objection is taken at, or as soon as practicable after, the time it occurs, and the irregularity is not corrected.
(3A) Nothing in subsection (2) above shall apply to any objection to a verdict on the ground of personation."
THE LORD CHANCELLOR: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 29. This simply states in modern terms the relevant parts of Section 21 of the Criminal Law Act 1826, and is therefore a tidying-up Amendment.
Moved, That this House doth agree with the Commons in the said Amendment.—(The Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[Nos. 30–31]
Clause 42, page 29, line 19, leave out "4 of the County Courts Act 1959" and insert "20(1) of this Act".
Clause 47, page 32, line 30, leave out "cost" and insert "costs".
THE LORD CHANCELLOR: My Lords, I have spoken to Amendment No. 30 when I was dealing with Amendments Nos. 8 to 10, and Amendment No. 31 is drafting. I beg to move that this House doth agree with the Commons in their Amendments Nos. 30 and 31.
Moved, That this House doth agree with the Commons in the said Amendments.—(The Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[Nos. 32 and 33]
Clause 47, page 32, line 40, leave out "and giving evidence".
Page 33, line 3, leave out "and giving evidence".
THE LORD CHANCELLOR: My Lords, I beg to move that this House Both agree with the Commons in their Amendments Nos. 32 and 33, with which I should like to take, if I may, Amendment No. 55. The purpose of these Amendments is to remove any doubt that a witness who attends at the request of the court or either party, but who is not subsequently required to give evidence, shall qualify for payment of witness fees and expenses. These Amendments bring the provisions of the Bill into line with those of Section 26 of the Criminal Appeal Act 1968 and amend the Costs in Criminal Cases Act 1952 to the same effect, I beg to move.
Moved, That this House doth agree with the Commons in the said Amendments.—(The Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 34]
Clause 47, page 33, line 4, leave out subsection (5) and insert —
"(5) References in subsections (3) and (4) above to a witness include any person who is a witness to character only and in respect of whom the court certifies that the interests of justice required his attendance but no sums shall be payable in pursuance of an order made under this section to or in respect of any witness who is a witness to character only and in respect of whom no such certificate is given."
THE LORD CHANCELLOR: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 34. This Amendment removes an implication in the original wording of Clause 47 that the award of character witnesses expenses should be exceptional. Although this implication is removed by the Amendment, the court is still obliged to consider separately from other costs the question of costs for character witnesses and no distinction is made between a character witness called during the course of a trial and one called to give evidence in mitigation of sentence as this was not thought to be necessary or practical. A consequential
836
Amendment is made in Amendment No. 55. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(The Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 35]
After Clause 51, insert the following new clause:
Award of costs where information or complaint is not proceeded with
".—(1) Where an information charging an indictable offence is laid before a justice of the peace for any area but the information is not proceeded with (either by summary trial or by an inquiry by examining justices) a magistrates' court for that area may order the payment out of central funds of —

(a) the costs properly incurred in preparing a defence to the offence charged; and"

(b) such sums as appear to the court reasonably sufficient to compensate any person attending to give evidence as a witness for the defence for the expense, trouble or loss of time properly incurred in or incidental to his attendance.

(2) The amount of costs ordered to be paid under subsection (1) above shall be ascertained as soon as practicable by the proper officer of the court.
(3) Where—

(a) an information is laid before a justice of the peace for any area but the information is not proceeded with (either by summary trial or by an inquiry by examining magistrates), or

(b) a complaint is made to a justice of the peace acting for any area but the complaint is not proceeded with, a magistrates' court for that area may make such order as to costs to be paid by the prosecutor to the accused or, as the case may be, by the complainant to the defendant as it thinks just and reasonable.

(4) An order under subsection (3) above shall specify the amount of the costs ordered to be paid.
(5) Subsections (1) and (2) above and, so far as they relate to informations, subsections (3) and (4) above shall be construed as one with the Costs in Criminal Cases Act 1952; and for the purpose of enforcement an order under subsection (3) above made in relation to a complaint which is not proceeded with shall be treated as if it were an order made under section 55 of the Magistrates' Courts Act 1952 (power to award, and enforcement of, costs in civil proceedings)."
THE LORD CHANCELLOR: My Lords, I beg to move that this House doth agree with the Commons in their

837
Amendment No. 35. I should also like to deal with Amendment No. 56, which is consequential on it. Amendment No. 35 is a new clause which was moved by the Government following a proposal by the Opposition that a lacuna in the law over costs should be closed. It had often been accepted in the past that where a person is acquitted after the case or because the prosecution offers no evidence he can get his costs, but where the prosecution agrees to withdraw the case and the offer is accepted he cannot get his costs. The new clause makes sure that the defendant still has a right to ask the court to grant him costs where the prosecution offers to withdraw the case whether it be an indictable or non-indictable offence. I hope your Lordships will think that this is a sensible reform. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(The Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 36]
Clause 52, page 36, line 16, leave out from "words" to end of line 18 and insert "from 'magistrates' in the first place where it occurs to the end of the paragraph there shall be substituted the words 'appointed from among their own number by the magistrates for the county in accordance with a scheme made by the magistrates' courts committee for, or for an area including, the county and approved by the Secretary of State'."
THE LORD CHANCELLOR: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 36. This Amendment enables Magistrates Courts' Committees to make a scheme for the selection of justices to serve on police committees. As originally drafted, the Bill would have obliged all magistrates in a particular county to take part in the selection and this procedure would have been unduly cumbersome. In large counties it will be more practicable to divide the county into parts so that each part can appoint its representatives to the police committee. My Lords, I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(Tine Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 37]
After Clause 52, insert the following new clause:
Boroughs: honorary offices
".—(1) The Council of a borough shall have power to appoint a person to be honorary recorder of the borough.
(2) Where there is a borough civil court, the council of the borough shall have power to appoint the honorary recorder of the borough, or some other person, to be the judge of the court, and a person appointed under this subsection shall hold his office during good behaviour.
(3) A person shall not be qualified to hold office as an honorary recorder of a borough or as judge of a borough civil court unless he is a Circuit judge or Recorder (that is to say a Recorder appointed under this Act):
Provided that this subsection shall not apply to a borough which immediately before the appointed day—

(a) had power by charter to appoint a recorder of the borough and

(b) did not have a separate court of quarter sessions.

(4) Where, immediately before the appointed day, there was a judge of a borough civil court, but he did not hold office by virtue of holding the office of recorder abolished by this Act, he shall continue to be and act as the judge as if appointed under subsection (2) above and subsection (3) above shall not apply to him."
THE LORD CHANCELLOR: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 37. This new clause, which was moved by the Government as the result of representations made during the Second Reading of the Bill in another place, has two separate but connected purposes. At present, broadly speaking, boroughs have recorders, and those recorders are the judges of quarter sessions and sit alone and without magistrates. When this Bill becomes law boroughs will not in that sense ever have recorders again. An essential part of the scheme is that all these courts of quarter sessions merge into the Crown court and will be presided over by circuit judges sitting with magistrates.
This caused, and I think understandably caused, a certain amount of pain to two separate classes. First of all, there were the classes of ordinary boroughs. They had frankly said, "We should like to retain some sort of personal connection with a part-time member of the bench or a full-time member of the bench, giving him a titular recordership. He will not

839
sit as a judge in our court but he will have social relations with us. He will be called by the name of the borough if he wants to use the title. He will possibly help to discuss problems with magistrates. He may even sit on the borough bench; at any rate he will be a friend of the borough". It will be part of the public relations connected with the scheme, and I wholeheartedly commend it. Whether it works or not will depend on whether it is used or not and what the appointees make of it. It does not interfere with the scheme and it may add a little to its good will.
There are two slightly different cases. One is that there are three or four boroughs in the country which have charters which entitle them to appoint recorders, a notable example being Kingston-upon-Thames. Kingston-upon-Thames has not held any quarter sessions for years, as long as I can remember, but it almost always appoints as recorder a reigning Attorney General; and if the reigning Attorney General is appointed recorder he gets two enormous chevalières but he does nothing else for it. But for some reason the borough of Kingston-on-Thames enjoys having a distinguished recorder. At present it enjoys the services of Sir Elwyn Jones, who was appointed during his tenure of office and remained in office after he lost Her Majesty's favour. Everybody likes him very much and I cannot see any harm in it. There are three or four boroughs like this. The purpose of this group of Amendments is to allow this practice to go on. I had representations from the Member of Parliament for Kingston-upon-Thames and certain other Members of Parliament similarly affected, and I think also from Sir Elwyn Jones. I am not quite sure whether he mentioned it to me. I think this was a popular Amendment and I heartily commend it. There is a third case where recorderships have been linked with a number of moribund civil courts which for various reasons I should dearly have liked to do away with. The group of Amendments also tidies up the position as regards them. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(The Lord Chancellor.)
LORD GARDINER: My Lords, I am not going to ask the House to reject this Amendment or to disagree with the Commons, but I am not at all happy about the position. It was the essence of the Beeching reforms that one would get away from unreality. I appreciate that there was a feeling that "We like having our own pet recorder", which is partly the reason why this proper reform has not been carried out before. First of all, there are places where apparently there is some right by charter. That the Attorney General should be recorder of Kingston-upon-Thames without ever going near the place is all right—that is historic—but I am not at all clear from what the noble and learned Lord has said whether the others in that category—Durham, Hartlepool, Preston, Wells, and Wycombe—means that there will be members of the Bar who will be able to call themselves, for example, recorder of Preston when in fact they do not sit at all. If they are likely to sit there, it is getting very like the existing system.
And I am still less clear what the noble and learned Lord said about moribund courts. I thought we were getting rid of those—in the Bill we are getting rid of the Bristol Court of Tozey and so on. There are some hundreds of moribund courts. Whether they are going to have honorary recorders is not at all clear to me. There are courts of pie poudre, as the noble and learned Lord knows, which were granted to boroughs in their charters. In Volume 8 of the Second Edition of Halsbury's Laws of England courts of pie poudre are referred to. Paragraph 1469 reads:
"These courts, which are courts of record, had jurisdiction to decide as to all manner of contracts, trespasses, covenants, and debts done within the time of fairs or markets and within their precincts. The jurisdiction only extends to questions arising at the particular fair or market in question, and not to those arising at any previous one. If it appears that the cause of action is not within the jurisdiction",
and so on.
"The law administered… is the law merchant. The court of pie poudre is only authorised to sit on a day for which the fair or market is granted by the charter, and not on any other day on which the fair or market may actually be held. The procedure… is simple—pleas are begun without a writ, and an answer has to be made within a day,

841
in many cases within an hour… Judgment may be deferred to the time of another fair or market".
Then it says:
"Courts of pie poudre are almost obsolete…"
I do not know what "almost obsolete" means.
Then there follows a long list of innumerable courts of record of which the first alphabetically is the Abingdon Court of Record, which has jurisdiction in personal actions up to£10 and is directed to be held weekly. There is a recorder of Abingdon, who is to be judge of the court. Paragraph 1472 continues:
"The proceedings are as at common law under the old practice of the superior courts before 1852. The court has been in abeyance since 1836. No rules of court or tables of fees are in existence.
"There is also a court of pie poudre, which had long been out of use in 1835, and a court leet."
I am not at all clear from what the noble and learned Lord has said whether this means that all these quasi-moribund courts are to have honorary recorders. If so, is that really within the spirit of modernising our law put forward by the Royal Commission?
THE LORD CHANCELLOR: My Lords, if I may go into a little more detail about this, subsection (1) of the new clause is, I think, fairly plain. This gives the council of a borough power to appoint a person to be honorary recorder, and it is intended to preserve the right of boroughs to make these appointments. That should be read with subsection (3), which limits the persons who may be appointed honorary recorders of a borough or judge of a borough civil court to Circuit judges and new-style recorders; that is to say, they will have to be members of the Bench appointed on my recommendation by Her Majesty, and they will be part of the Circuit judge system. But inside the borough they may have the title of honorary recorder.
The exceptions to subsection (3) are the very few cases which I mentioned. One is Kingston and another is Durham—I think the noble and learned Lord recited them all—which have by charter the right to appoint a recorder, who will of course not be confined to the Circuit Bench because the charter so approves.
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Indeed, the Attorney General cannot be a member of the Circuit Bench, and in the case of Kingston Sir Elwyn Jones presumably would not want to be a member of the Circuit Bench. I could not have excepted Kingston by name. There are about four of them. They have a very ancient right which their local Members of Parliament no doubt appreciate even more strongly than their constituents. In the case of Kingston, a very distinguished person holds the appointment. It does nobody any harm, and I feel wholly unrepentant about my act of public relations in allowing them to go on with what they have got so long as it does not do anybody any harm.
Now a more substantial question, but one of very little importance, arises in relation to what I call the moribund courts. There are, as the noble and learned Lord indicated, a number of boroughs which have local civil courts. Whether they could be called small claims courts or not, they seem to have died for want of business, for want of any other expression. I do not conceal the fact that I should have liked to have got rid of them. We did get rid of some, as the noble and learned Lord pointed out, but we should have liked to have got rid of them at the same time as we got rid of the main ones. But we accepted advice, which I think was sound, that the necessary consultations would have held us up unacceptably. We also reluctantly accepted the advice that what we could undoubtedly have done by a side wind, but rather deviously, would have been to abolish them by depriving the courts of their judge, which we could have done because of the provisions of Section 175 of the Municipal Corporations Act 1882. This section provides for the recorder of a borough to be the judge of the civil court, if there is one, except where the court independently possesses its own judge, as is occasionally the case. Section 175 is repealed by Section 11 of the Courts Bill, and subsection (2) of the Amendment was inserted to take its place.
Now it is quite true, as the noble and learned Lord indicated, that these courts are very numerous and very different and wholly anomalous. They have been established at one time or another either by Royal Charter or by local Act, or

843
Sometimes, I am told, even by prescription, whatever that may mean in the circumstances. If your Lordships are interested in research, you will find a list of them in Halsbury's Laws of England, Third Edition, Volume 9, at pages 486 to 575, which indicates that it occupies a disproportionate amount of an encyclopædia of English law considering the little importance that it has. I could go on reciting cases. There were the Great and Small Barmote Courts of High Peak, which relate to lead mining in Derbyshire. There is the Dartmouth Court of Record, which has a jurisdiction upon the water extending about a mile from the castle and as far as the white rock a mile below Totnes. This has not sat since 1821. A third is the Congleton Court of Record, one of whose officers is a catchpole. The catchpole, I must say, is the mediæval Latin cacepollus, which means the man who chases chickens. He is equivalent to a sheriff's officer.
Now the only thing I would say about all this is that if we wanted to get the Bill through there was no alternative but to keep them theoretically on the Statute Book. It would have taken an inordinate time to get rid of them; and those of your Lordships who went through the traumatic experience about whales and dolphins some weeks ago will realise why I hesitated to embark upon a wholesale clearance of what I regard as lumber. Somebody would turn up, even in this House, to preserve them if they could. At any rate, it would have been impossible to get rid of them all. They do absolutely no harm, because they do nothing. So they remain on the Statute Book; and it would have been dishonest to have abolished them by inference by depriving them of their judges. They do not really come under this new clause, because all this new clause does is to allow these boroughs, with all the other boroughs, to appoint their honorary recorders, who I suppose will attend mayoral dinners and, I hope, will attend sentencing exercise with local borough justices and tell them some of the things which local borough justices ought to know, and discuss their problems with them. But they will not sit at any quarter sessions.
Where it is provided that there is one of these extraordinary little places by
844
name which never sits, I suppose I have got to keep on with it because, as I say, we have not been able to abolish the courts by the Bill, and it would have been dishonest to abolish them by pretending not to do so and then abolishing the section which provides for their judges. So there we are. It will do no harm; and I think I have taken on as much as I can in the Bill in order to get it through in time. I am not really in a white sheet about this. We cannot tidy up the entire mass of mediæval law which can be dug out of Halsbury if you look deep enough; and the actual Amendment that I am proposing has the sole object of providing for those honorary recorders, which will give a good deal of quite harmless pleasure.
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 38]
Clause 55, page 38, line 12, leave out paragraph (a).
THE LORD CHANCELLOR: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 38. If I may, I will take with it the linked Amendments Nos. 63, 64, 65, 71, 72, 78, 101 and 103. I think all these are essentially drafting. The object is to avoid any risk of confusion when the Crown Court includes lay justices. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(The Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 39]
Clause 55, page 38, line 22, at end insert —
"( ) Except where the context otherwise requires, in any Act passed after this Act the expression `recorder' shall not include the Recorder of London or an honorary recorder of a borough.
( ) Any power of making orders contained in any provision of this Act shall include power to vary or revoke an order made under that provision."
6.10 p.m.
THE LORD CHANCELLOR: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 39. The first part of the Amendment is consequential on Amendment No. 37. The second part gives

845
power to vary or revoke an order made under any provision of the Bill. This is rendered necessary because of an omission in the Interpretation Act 1889 whereby the power to make most instruments carries with it the power to vary or revoke such instruments. Unfortunately, this does not include orders as such.
Moved, That this House doth agree with the Commons in the said Amendment.—(The Lord Chancellor.)
LORD AIREDALE: My Lords, the first proposed new subsection in Amendment No. 39 gives in advance an interpretation of the expression "recorder" "in any Act passed after this Act". That is what it says. We are therefore in this subsection seeking to bind our successors in Parliament. I think that most Members of both Houses of Parliament for the time being always rather resent any attempt having been made in the past by their predecessors to bind them, and consider that it is not really very satisfactory for Parliament ever to try to bind successive Parliaments. I wonder whether it is necessary to provide an advance interpretation of the meaning of the word "recorder"; because this means that in the years to come, whenever future legislation is drawn up concerning recorders, regard will have to be had to this subsection. Perhaps it is necessary; but on principle I feel that a word of warning ought to be given by somebody whenever Parliament is seeking, even in a small field, to bind Parliaments of the future.
THE LORD CHANCELLOR: My Lords, I am beginning to realise since I came back to your Lordships' House how very conservative the Liberal Party can be—at least when it reaches this House. In fact there is no attempt whatever to bind successive Parliaments. The intention is to save their time. We have had this argument out at least once this Session in connection with another Bill and we have established the point that it it is no more binding upon successive Parliaments than the Interpretation Act of 1889 is binding on successive Parliaments. It saves time in drafting to explain what statutory language means; but if successive Parliaments desire to use words like "Humpty-dumpty" in any sense they please, then they are at liberty to do so, notwithstanding this subsection. I hope that the House will agree to the
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Motion and see that it is a convenient way of legislating.
On Question, Motion agreed to.

COMMONS AMENDMENT
[Nos. 40 and 41]
Clause 57, page 39, line 27, at end insert "and section 56".
Schedule 2, page 42, line 34, after "above", insert "and service (before 1st April 1965) as a salaried chairman or deputy chairman of the court of quarter sessions for the county of London or of Middlesex".
THE LORD CHANCELLOR: My Lords, I beg to move that this House doth agree with the Commons in their Amendments Nos. 40 and 41. They are purely drafting.
Moved, That this House doth agree with the Commons in the said Amendments.—(The Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 42]
Schedule 3, page 43, line 13, leave out from "effect" to end of line 17 and insert—

"(a) as respects any premises which were, up to the appointed day, being used to any extent for business of the abolished courts, and

(b) as respects the local authority who were providing the accommodation for the abolished courts."

THE LORD CHANCELLOR: My Lords. I beg to move that this House doth agree with the Commons in their Amendment No. 42 which is one of a little substance. If I may, I should like to take with it the linked Amendment No. 44 and deal with that at the same time. The provisions of Schedule 3, dealing with accommodation, are somewhat complicated. During the passage of this Bill some Amendments became necessary as a result of consultations with local authority associations and also, I say with gratitude, as a result of proposals by the Opposition.
As unamended, paragraph 1 of Schedule 3 imposes a duty on the local authority to which a building belongs to continue to make the premises available for the use of the Supreme Court and county courts. This did not cover adequately the position where one local authority owned the building but let it to another local authority, with the effect that the second local authority, the tenant local authority, could provide

847
courts for assizes and quarter sessions which it was under a statutory duty to provide. In many cases the tenant authority could not be said to own the building because it was a tenant, and the word "belong" was therefore inappropriate. The Amendments make it clear that the duty to continue to provide accommodation after the appointed day will rest on the local authority which at present has the duty to provide accommodation and not on the local authority which happens to own the buildings in which the courts are provided. Where the providing authority pays rent for the premises to the owning authority, the appropriate Minister will, under paragraph 1(6), contribute a fair proportion of the rent.
Moved, That this House doth agree with the Commons in the said Amendment.—(The Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 43]
Schedule 3, page 44, line 25, at end insert —
"() Where under the preceding provisions of this paragraph the authority are to make available any fittings, or furniture, office or other equipment or other chattels —

(a) it shall be their duty to keep them in order and repair and to clean them;

(b) the appropriate Minister shall pay their reasonable and necessary charges under paragraph (a) above;

(c) if and so far as greater use is made of any such fittings or chattels for Supreme Court and county court business as compared with their use for business of the abolished courts, the appropriate Minister shall make such payment to the authority by way of hire payments as is reasonable, but not so as to make any payment in respect of anything taken into account in paying rent under sub-paragraph (6) above."

THE LORD CHANCELLOR: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 43. This corrects a very minor omission, and I think I need not give it any further consideration.
Moved, That this House doth agree with the Commons in the said Amendment.—(The Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 44]
Schedule 3, page 44, line 32, leave out "to whom they belong" and insert subject to those obligations as respects the premises.
(9) Where sub-paragraph (1)(b) above applies to two or more local authorities, the obligations imposed by this paragraph shall be shared among them in a way corresponding to that in which they provided for the abolished courts, and, where a direction is given under sub-paragraph (3) above, for any magistrates' court.
THE LORD CHANCELLOR: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 44 to which I have already spoken.
Moved, that this House doth agree with the Commons in the said Amendment.—(The Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 45]
Schedule 3, page 45, line 39, at end insert "or estate".
THE LORD CHANCELLOR: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 45. With it is linked No. 50. These Amendments are also concerned with local authorities that own premises which are let to other local authorities that have a duty to provide court accommodation. At present the owning authority would be caught by the provisions of paragraph 3(4) and 3(5) of Schedule 3 which would enable the Secretary of State to acquire their premises, in so far as they were used for the abolished courts, without compensation. This would be unfair to a local authority which let premises to another authority on a more or less commercial basis because, as landlord, they were under no duty to provide courts. The Amendments ensure that the relevant paragraphs do not apply to local authorities which were not using premises to discharge any obligation to provide accommodation for the abolished courts. Amendment No. 45 is simply a drafting Amendment to pick up the correct terminology of paragraph 3(1) while the later Amendment deals with the substantial point and with related matters such as loan charges.
Moved, that this House doth agree with the Commons in the said Amendment.—(The Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[Nos. 46 –49]
Schedule 3, page 46, line 27, leave out "the date of acquisition" and insert "the relevant date"
Schedule 3, page 46, line 29, leave out "the date of acquisition" and insert "the relevant date"
Schedule 3, page 46, line 32, at end insert —
"In this sub-paragraph 'the relevant date' means the date of acquisition or such other date as may be agreed by the appropriate Minister and the local authority."
Schedule 3, page 46, line 48, at end insect —
"(3) The two last preceding paragraphs, and this paragraph, shall apply in relation to any loan charge in respect of any fittings, or furniture, office or other equipment or other chattels made available under this Schedule or acquired by the Secretary of State, as they apply to premises so made available or acquired, but subject to any necessary modifications."
THE LORD CHANCELLOR: My Lords, I beg to move that this House doth agree with the Commons in their Amendments Nos. 46, 47, 48 and 49 which are merely technical Amendments related to the repayment of loan charges where premises are acquired under Schedule 3.
Moved, that this House doth agree with the Commons in the said Amendments.—(The Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[Nos. 50 –53]
Schedule 3, page 46, line 48, at end insert:
Premises in which more than one local authority are interested
".— (1) If a compulsory purchase order authorises acquisition of the interest or estate of more than one local authority, whether or not each of them were using the premises to discharge obligations as respects the abolished courts, the notice under paragraph 3(1)(a) above shall be given to each of them.
(2) Sub-paragraphs (4) and (5) of paragraph 3, and paragraphs 4, 5 and 6 of this Schedule shall not apply to a local authority who, although having an interest or estate in the premises, were not using the premises to discharge any obligation to provide accommodation for the abolished courts.
This sub-paragraph is without prejudice to the application of the said provisions to the local authority in relation to any other premises.
(3) If different parts of the premises were used for different abolished courts, subparagraph (2) above shall be applied to the different parts of the premises as if the parts were different premises.
There shall be made all such apportionments of compensation for compulsory purchase and of loan charges and other sums as are required to give effect to this sub-paragraph, and to take account of ancillary accommodation and of the degree to which it served the respective courts."
Schedule 4, page 49, line 16, leave out, "or a county court"
Schedule 5, page 51, line 27, leave out from "money" to end of line.
Schedule 5, page 51, line 28, at end insert "and held immediately before the relevant date"
THE LORD CHANCELLOR: My Lords, I beg to move that this House doth agree with the Commons in their Amendments Nos. 50, 51, 52 and 53. I have already spoken to Amendment No. 50. Amendments Nos. 51 to 53 are purely drafting.
Moved, That this House doth agree with the Commons in the said Amendments.—(The Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 54]
Schedule 5, page 51, line 49, at end insert —
"( ) On the relevant date there shall be vested in the Accountant General of the Supreme Court any outstanding liabilities of the Lancaster Palatine Court in respect of sums which at one time formed part of the funds in court in the Lancaster Palatine Court but which ceased to do so at some time prior to that date; and any amounts required to meet any such liabilities shall be paid out of the Consolidated Fund to the Accountant General."
THE LORD CHANCELLOR: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 54, which deals with funds in the Lancaster Palatine Court. It is necessary because the transfer of funds of that court to the High Court involves the transfer of a contingent liability to meet claims on dormant funds. This is not possible under the Schedule as drafted and the Amendment now makes it possible.
Moved, That this House cloth agree with the Commons in the said Amendments.—(The Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[Nos. 55 and 56]
Schedule 6, page 55, line 6, at end insert —
"( ) In each of subsections (3) and (4) of that section the words and giving evidence' shall be omitted.
( ) After subsection (4) of that section insert the following subsection —
"(4A) References in subsections (3) and (4) above to a witness include any person who is a witness to character only and in respect of whom the court certifies that the interests of justice required his attendance, but no sums shall be payable in pursuance of an order made under this section to or in respect of any witness who is a witness to character only and in respect of whom no such certificate is given." "
Schedule 6, page 55, page 55, line 39, at end insert
"or
(c) where an information is not proceeded with, as mentioned in section (Award of costs where information or complaint is not proceeded with) (1) of the Courts Act 1971"
THE LORD CHANCELLOR: My Lords, I beg to move that this House doth agree with the Commons in their Amendments Nos. 55 and 56. No. 55 I spoke to with Amendment No. 33, and No. 56 with Amendment No. 35.
Moved, That this House doth agree with the Commons in the said Amendments—(The Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 57]
Schedule 7, page 58, line 8, leave out paragraph 2 and insert —
"2.—(1) In Schedule 4 to that Act, in paragraph 1, in sub-paragraph (1) after the word "composed" there shall be inserted the words "subject to sub-paragraph (2) below", and at the end of sub-paragraph (1) there shall be inserted the following sub-paragraph: —
"(2) The magistrates' courts committee for any area may, with his consent, co-opt a judge of the High Court, Circuit judge or Recorder to serve as a member of the committee"
(2) Paragraphs 1(3) and 4 of that Schedule shall be omitted."
THE LORD CHANCELLOR: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 57. This Amendment enables the magistrates' court committee to co-opt a judge of the Crown Court as a member of that committee to replace chairmen of quarter sessions who are at present members of such committees.
Moved, That this House doth agree with the Commons in the said Amendment—(The Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[Nos.58 –78]
Schedule 8, page 60, line 17, leave out "which relates"
Schedule 8, page 60, line 19, leave out from first "the" to "for" in line 20 and insert "local authorities"
Schedule 8, page 60, line 23, leave out from second 'the' to 'for' in line 24 and insert "local authorities".
Schedule 8, page 60, Line 33, at end insert —
"(4) References in this paragraph to local authorities —

(a) do not include the Greater London Council,

(b) include county councils, but not any authority for a part of a county:

Provided that as respects matters in the Isles of Scilly the Council of the Isles of Scilly shall be the local authority.
(5) So far as any matter referred to in this paragraph relates to the Inner Temple or the Middle Temple, references in this paragraph to local authorities, or to clerks of local authorities, are references to the Sub-Treasurer of the Inner Temple or, as the case may be, the Under-Treasurer of the Middle Temple."
Schedule 8, page 60, line 40, leave out "coming into force of this Act" and insert "appointed day"
Schedule 8, page 60, page 61, column 2, line 31, leave out from beginning to "or" in line 32 and insert "the Crown Court or the High Court"
Schedule 8, page 60, line 36, column 2, leave out "Crown Court judge" and insert "the Crown Court"
Schedule 8, page 60, line 40, column 2, leave out "a Crown Court judge" and insert "the Crown Court"
Schedule 8, page 60, page 62, line 7, column 2, leave out "appointed for" and insert "assigned to"
Schedule 8, page 60, line 9, leave out from "judge" to end "to end of line 10 and insert so assigned"
Schedule 8, page 60, line 39, at end insert —

Any right to apply to a court of quarter sessions limited to a specified sitting of the court next after, or in the calendar year of, a 21st or other anniversary of an enclosure award or other event.

A right to apply to the Crown Court within twelve months from the anniversary.

The Crown Court may modify or supersede any associated time limit for the giving of notice of the application, or for the confirmation of any decision on the application."

Schedule 8, page 60, line 50, at end insert "and nothing in the Table above shall apply to any reference to records of any court"
Schedule 8, page 63, line 36, after "from", insert "judge"
Page 64, line 11, leave out "a judge of".
Page 64, line 15, leave out "a judge of".
Page 64, line 39, leave out "with".
Page 65, line 11, after "Act", insert "of 1915".
Page 65, line 33, leave out "Part II of".
Page 65, line 37, leave out "Judges of the".
Page 66, line 33, at end insert "(8)".
Page 66, line 42, leave out "a judge of the Crown Court" and insert "that court".
THE LORD CHANCELLOR: My Lords, I beg to move that this House doth agree with the Commons in their Amendments Nos. 58 to 78. Amendments Nos. 58 to 62 inclusive are drafting. Nos. 63 to 65 I have spoken to with Amendment No. 38. Nos. 66 and 67 I have spoken to with Amendments Nos. 8 to 10. Amendments Nos. 68 to 70 are drafting, and Nos. 71 and 72 I have spoken to with Amendment No. 68. Amendments Nos. 73 to 77 are drafting and Amendment No. 78 has been spoken to with Amendment No. 38.
Moved, That this House doth agree with the Commons in the said Amendments.—(The Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 79]
Schedule 8, page 66, line 45, at end insert—
".At the end of the said section 14 add:—
"(6) The powers conferred by this section shall not be taken as restricted by any enactment about committal by a magistrates' court to the Crown Court which authorises the Crown Court to deal with an offender in any way in which the magistrates' court might have dealt with him:
Provided that any term fixed under subsection (1)(c) above as respects a fine imposed by the Crown Court in pursuance of such an enactment, that is to say a fine which the magistrates' court could have imposed, shall not exceed the period applicable to that fine (if imposed by the magistrates' court) under Schedule 3 to the Magistrates' Courts Act 1952 or section 285 of the Customs and Excise Act 1952." "
THE LORD CHANCELLOR: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 79. This Amendment will enable the Crown Court to impose
854
a penalty of imprisonment, in default of payment of a fine, in certain cases where courts of assize or quarter sessions do not have such power at the moment, owing to a lacuna in the Criminal Justice Act, 1967.
Moved, That this House doth agree with the Commons in the said Amendment.—(The Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 80]
Schedule 8, page 67, leave out lines 13 to 18 and insert —
"(b)the High Court may release on bail a person —

(i) who, after the decision of his case by the Crown Court, has applied to the Crown Court for the statement of a case for the High Court on that decision, or

(ii) who has applied to the High Court for an order of certiorari to remove proceedings in the Crown Court in his case into the High Court, or has applied to the High Crown Court for the statement of a case for the High Court on that decision, or

THE LORD CHANCELLOR: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 80. This Amendment preserves the power of the High Court to grant bail where a person appeals by way of case stated to the Divisional Court or where the High Court is being moved for an order of certiorari. It is really consequential on the general provisions of the Bill giving the Crown Court powers in relation to bail.
Moved, That this House doth agree with the Commons in the said Amendment.—(The Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 81 –87]
Schedule 8, page 67, line 19, leave out subparagraph (2).
Schedule 8, page 67, line 24, leave out sub-paragraph (4).
Schedule 8, page 68, line 3, after "in", insert "Northern"
Schedule 8, page 68, line 9, leave out from "to" to end of line and insert "'are referred' substitute' in the Crown Court'"
Schedule 8, page 68, line 11, after "Schedule 1", insert "to the Administration of Justice (Pensions) Act 1950"
Schedule 8, page 68, line 21, after "sessions' ", insert "or 'a court of quarter sessions '"
Schedule 8, page 68, line 22, leave out "83 and 86" and insert "86, 89 and 122(1)(c)"
THE LORD CHANCELLOR: My Lords, I beg to move that this House doth agree with the Commons in their Amendments Nos. 81 to 87. These Amendments are purely drafting.
Moved, That this House doth agree with the Commons in the said Amendments.—(The Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 88]
Schedule 8, page 68, line 23, at end insert—
"( ) In section 1 of the said Act (issue of summons or warrant of arrest at beginning of proceedings) at the end of subsection (2)(d) add', or
(e) if the offence was committed outside England and Wales and where it is an offence exclusively punishable on summary conviction, if a magistrates' court for the county or borough would have jurisdiction to try the offence if the offender were before them '."
THE LORD CHANCELLOR: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 88. This Amendment makes an important change in the law with regard to the issue of warrants for the arrest of a person who is accused of an offence not committed in this country but triable here—for instance, an offence committed on a British ship or aircraft. The immediate relevance of the Amendment, as your Lordships will doubtless perceive, is to deal with hijackers. As the law at present stands, there is no provision for the issue of a warrant for the arrest of a person unless he is in this country or normally resident here at the time. Thus, where an offence is committed on a British ship or aircraft and the offender does not come to this country, or is not normally resident here, there is no way in which a warrant can be issued. Since the issue of a warrant is, of course, the first stage in extradition procedure, this means that, as the law stands at present, the offender can escape entirely.
I hope your Lordships will agree that this change in the law should be made. It is achieved by an amendment to the Magistrates' Courts Act 1952. Any justice may now issue a warrant for the arrest of a person alleged to have committed an offence outside England and Wales which
856
is triable on indictment here; and he may also issue a warrant in respect of a purely summary offence committed outside England and Wales, if that offence is triable by a magistrates' court for the county or borough for which he is a justice of the peace.
Moved, That this House doth agree with the Commons in the said Amendment.—(The Lord Chancellor.)
LORD GARDINER: My Lords, I wonder whether the noble and learned Lord could tell us, if he happens to have it in mind, how far this increases the number of cases in which we can be arrested and tried here for things, particularly small, summary things, which we have done abroad, other than those on a British ship or aircraft—which of course are a special case.
THE LORD CHANCELLOR: My Lords, I think that what the noble and learned Lord, Lord Gardiner, is asking is what offences committed out of this country could be punished summarily and are covered by this Amendment. The only answer I can give is that, so far as I know, certain offences committed aboard British ships, under the provisions of Sections 685 to 687 of the famous Merchant Shipping Act 1894, and offences on board British aircraft, under the Tokyo Convention Act 1967, Section 1. So far as I know, the offences are limited to those cases.
On Question, Motion agreed to.

COMMONS AMENDMENT
[Nos. 89 –94]
Schedule 8, page 68, line 25, at end insert —
"( ) In section 85 of the said Act (abandonment of appeal)—

(a) subsection (1) (which is superseded by the provisions of this Act authorising the making of Crown Court rules) shall cease to have effect;

(b) after subsection (2) insert: —

(2A) In this section "appeal" means an appeal from a magistrates' court to the Crown Court, and the reference to a notice to abandon an appeal is a reference to a notice shown to the satisfaction of the magistrates' court to have been given in accordance with Crown Court rules'."
Schedule 8, page 68, line, 39, at end insert:
"(3) In section 201 of the said Act, in the definition beginning 'judge' for the words `appointed for a district under this Act' substitute 'assigned to a district under section 20(1) of the Courts Act 1971'."
Schedule 8, page 68, line 39, at end insert —
"Highways Act 1959
—(1) In section 60(2) of the Highways Act 1959 for the words from the beginning to 'clerk of the peace substitute' The complainant for an order under the last foregoing section shall give notice in writing of the application to the appropriate officer of the Crown Court'.
(2) At the end of section 108(7) of the said Act for the words clerk of the peace' substitute 'clerk of the appropriate authority.'
(3) In section 108(8) of the said Act for the words from 'to the clerk of the peace 'to the end of the subsection substitute to the clerk of the appropriate authority, together with any written consents produced to the magistrates' court under subsection (7) of this section'."
Schedule 8, page 68, line 39, at end insert —
"Obscene Publications Act 1959
.In section 3(5) of the Obscene Publications Act 1959 (tme of coming into force of forfeiture order) for the words from fourteen days 'to' order is made' substitute 'the period within which notice of appeal to the Crown Court may be given against the order'."
Schedule 8, page 68, line 42, after "60(1)" insert "65(1)".
Schedule 8, page 68, line 46, at end insert —
"Caravan Sites and Control of Development Act 1960
'.In section 9(2) of the Caravan Sites and Control of Development Act 1960 (time of coming into force of order revoking a licence) for the words from on such date' to the words 'case stated or otherwise' substitute 'on such date as the court may specify in the order, being a date not earlier than the expiration of any period within which notice of appeal (whether by case stated or otherwise) may be given against the conviction'."
THE LORD CHANCELLOR: My Lords, I beg to move that this House cloth agree with the Commons in their Amendments Nos. 89 to 94. Amendment No. 89 is purely technical, on costs. I have spoken to Amendment No. 90 when dealing with Amendments Nos. 8 to 10, and Amendments Nos. 91 to 94 are purely drafting. I therefore beg to move.
Moved, That this House cloth agree with the Commons in the said Amendments.—(The Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos. 95 —97]
Schedule 8, page 69, line 34, after first: "chairman "insert" a vice-chairman".
line 35, after "and' insert "(a)".
line 36, leave out and "and" insert —

"(b) a metropolitan stipendiary magistrate chosen from among the members of the committee by the chief metropolitan stipendiary magistrate shall be vice-chairman, and

(c)".

THE LORD CHANCELLOR: My Lords, I beg to move that this House doth agree with the Commons in their Amendments Nos. 95 to 97. These Amendments deal with the Committee of Magistrates for the Inner London area. The chairman is at present the chairman of quarter sessions whose office will be abolished by the Bill. The new chairman will be the chief metropolitan magistrate. These Amendments give the chief metropolitan magistrate power to appoint a vice-chairman from among the stipendiary magistrate members.
Moved, That this House doth agree with the Commons in the said Amendments.—(The Lord Chancellor.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 98]
Schedule 8, page 70, line 29, at end insert —
"Criminal Appeal Act 1966
. In section 1(3) of the Criminal Appeal Act 1966 the words 'of the Queen's Bench Division' and paragraph (a) shall be omitted."
THE LORD CHANCELLOR: My Lords, I beg to move that this House cloth agree with the Commons in their Amendment No. 98. This Amendment is small but contains one point of substance. It will enable any judge of the High Court to sit in the Criminal Division of the Court of Appeal at the request of the Lord Chief Justice. At the moment the Court consists, I think, merely of Queen's Bench Judges, apart from the Lords Justices. Many of the judges, for instance, in the Probate, Divorce and Admiralty, are well qualified to sit in the Criminal Division of the Court of Appeal, and I think that your Lordships will agree that this small Amendment will be of some use to the Lord Chief Justice when planning sittings in the Criminal Division of the Court of Appeal. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(The Lord Chancellor.)
LORD GARDINER: My Lords, I agree with this Amendment. I rose only to say that the remaining Amendments do not seem to me to raise any matter which should take up the time of your Lordships' House; and if the noble and learned Lord the Lord Chancellor chooses to take them en bloc, I should respectfully offer no objection.
THE LORD CHANCELLOR: My Lords, I am very much obliged to the noble and learned Lord. I will put this Amendment separately and the rest en bloc.
On Question, Motion agreed to.

COMMONS AMENDMENT
[Nos. 99–168]
Schedule 8, page 71, line 2, after "20" insert "22(3)"
Schedule 8, page 71, line 7, at end insert —
". In section 16(2) of that Act (exemption from jury service of persons concerned with criminal cases) after paragraph (c) insert: —
"(cc) officers of the Crown Court, and persons appointed or employed to assist them, being officers or other persons whose work is wholly or mainly concerned with the day-to-day administration of the Crown Court." "
Schedule 8, page 71, line 10, leave out "a judge of the Crown Court and insert that court"
Schedule 8, page 71, line 24, at end insert —
"( ) After the said subsection (1) insert: —
"(1A) Subsection (1) above does not apply where the power conferred by the said section 14(1) is excluded by subsection (5) of that section (fine imposed on appeal from a magistrates' court)." "
line 30, leave out "a judge of the Crown Court" and insert "that court"
Schedule 8, page 72, line 29, at beginning insert —
" (1) In section 3(7) of the Children and Young Persons Act 1969 for the words "quarter sessions substitute "the Crown Court".
(2)"
Schedule 8, page 72, line 30, leave out "Children and Young Persons Act 1969" and insert "said Act".
SCHEDULE 9
Schedule 9, Page 73, line 13, at end insert —

"Ordinance Survey Act.1841.

Section 2"

Schedule 9, Page 73, column 2, leave out line 16 and insert "Section"
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leave out line 25 and insert —

"Highways and Locomotives (Amendment) Act 1878.

Section 37."

leave out line 38.
Schedule 9, Page 73, column 2, leave out line 42 and insert "Section 102"
Schedule 9, Page 73, line 42, and insert —

"Pharmacy and Poisons Act 1933.

Section 21(2)."

Schedule 9, Page 74, line 43, column 2, leave out "8, 11" and insert "8 to 11"
Schedule 9, Page 74, line 49, at end insert—

"Compulsory Purchase Act 1965.

Section 12(3)."

Schedule 9, Page 75, line 10, at end insert—

"Town and Country Planning Act 1968.

Section 50(7).

Section 53(6)."

Schedule 9, Page 75, column 2, leave out lines 18 and 19 and insert "Section 31"
Schedule 10, pace 77, line 13, leave out from "been" to end of line 15 and insert "assigned to that district (in his capacity as a Circuit judge) under section 20(1) of this Act"
Schedule 10, pace 77, line 46, at end insert—
".—(1) The repeal by this Act of section 10 of the Criminal Justice Administration Act 1956 shall not affect the continuing liability of the city council of Liverpool or the city council of Manchester to pay to the Lord Chancellor under subsection (2) of that section, at such times as may be agreed between him and the council concerned, one-half or such other part as may with the concurrence of the Treasury be so agreed, of any sums payable under that Act on account of any pension or other benefit payable after the appointed day in respect of any person's service as Recorder of Liverpool or Recorder of Manchester at any time before that day.
(2) Any sums received by the Lord Chancellor by virtue of this paragraph shall be paid into the Exchequer."
Schedule 10, Page 78, line 40, at beginning insert "(1) Subject to sub-paragraph (2) below"
Schedule 10, Page 78, line 41, leave out "clerk of the peace of a county or"
Schedule 10, Page 78, line 50, leave out "or" and insert "and"
Schedule 10, Page 78, line 51, at end insert —
"(2) Sub-paragraph (1) above shall not apply in the case of a person who is a contributory employee to whom the preceding paragraph applies and who exercises the right given to him by sub-paragraph (2) of that paragraph to pay contributions of the like amount as if his remuneration had not been reduced."
Schedule 10, Page 80, line 20, at end insert—
"Seconding of staff from local or other authorities
16.—(1) This paragraph has effect in order to meet any temporary shortage of staff to

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be appointed by the Lord Chancellor for the Supreme Court or county courts which may arise in the course of bringing the provisions of this Act into force.
(2) A local or other authority may enter into any agreement with the Lord Chancellor for the placing at the disposal of the Lord Chancellor, on such terms as may be provided by the agreement, of the services of any person who is employed by the authority and who gives his consent.
(3) For the avoidance of doubt it is hereby declared that for superannuation purposes service rendered by a person whose services are placed at the disposal of the Lord Chancellor in pursuance of this paragraph is service rendered to the authority by whom that person is employed.
(4) This paragraph applies whether or not the staff to be placed at the disposal of tie Lord Chancellor were employed in the discharge by the Authority of duties of which the authority will be relieved by this Act, and is without prejudice to any other power exercisable by the authority for the purposes set out in sub-paragraph (2) above."
Schedule 11, page 80, column 3, leave out lines 34 to 41 and insert Section 21"
Schedule 11, Page 81, column 3, leave out lines 34 to 37 and insert "In section 1 the words from the last "and" in proviso (a) to "the Indictments Act 1915" "
Schedule 11, Page 86, line 18, column 3, at end insert "In section 5, in subsections (3) and (4), the words "and giving evidence" "
Schedule 11, Page 86, line 31, column 3, at end insert "and paragraph 31(2)(3)"
Schedule 11, Page 87, line 39, column 3, at beginning insert—
"In section 7 the words from "before or at" to the end of the section."
Schedule 11, Page 88, line 28, column 3, at beginning insert "which"
Schedule 11, Page 88, line 33, column 3, leave out "Section 10" and insert "Sections 10, 11 and 12"
Schedule 11, Page 88, line 51, at end insert—

"3 & 4 Vict.c.110.

The Loan Societies Act1840.

In section 4, the words following 'general quarter sessions' to transmitted to him as aforesaid', and the words without motion '."

Schedule 11, Page 88, line 54, column 3, at end insert —

"In section 5, the words from and in case it shall happen' to in the execution of the purposes of this Act.'

In section 6, the words or by such inhabitants as aforesaid '."

Page 89, line 11, at end insert —

"10&11 Vict. c.16

The Commissioners Clauses Act 1847

In section 3, the definition of 'quarter sessions'. Section 93.

"10&11 Vict c.27

The Harbours Docks and pier Clauses Act 1847

section 26.In section 85, the words 'England or.'

In section 90 the words' or the court of quarter sessions', the words' or of the chairman of the court' and the words or chairman'."

Page 89, line 11, at end insert —

"10 & 11 Vict. c. 28.

The county Buildings Act 1847.

The whole Act".

Page 89, line 12, column 3, at beginning insert —"In section 3 the definition beginning 'The expression" quarter sessions" '."
Page 89, line 24, at end insert —

"10 & 11 Vict. c. 89.

The Town Police Clauses Act 1847.

In section 3, the definition beginning "The expression "quarter sessions" "."

Page 89, line 35, column 3, leave out "or"
Page 89, line 48, at end insert—

"24 & 25 Vict. c. 45.

The Piers and Harbours Act 1861.

In section 15, the words "England and""

Page 90, leave cut lines 52 to 54.
Page 91, column 3, leave out line 7 and insert" "and enforced" to the end of the section"
Page 91, line 36, column 3, leave out from "to" to end of line 38 and insert "168.
Page 91, Sections 175 to 177." line 51, column 3, at end insert "(where they first occur)"
Page 92, line 4, column 3, at end insert "Schedule 6"
Page 92, column, 3, leave out line 19 and insert —

"In section 34(e) the words "to the return of panels or juries, or"."

Page 93, column 3, leave out line 12 and insert "and the words from" the assizes "to" the judges" except for the words "petty sessions" "
Page 94, line 32, column 3, after "assize" insert "county"
Page 94, line 35, column 3, at end insert "In Schedule 3, in Part the words "Official Referee to the Supreme Court" "
Page 94, line 37, column 3, at end insert "and in column 2 of that Schedule paragraphs 2(ii) and 4(iii)"
Page 94, line 49, at end insert —

"18 & 19 Geo.5.c.26.

The Administration of justiceAct1928.

Sections 3 and 4. In Schedule 1, the amendments of sections 112 and 116 of the Judicature Act 1925."

Page 95, line 50, at end insert —

"1 & 2 Geo. 6. c.67

The Supreme Court of Judicature (Amendment) Act 1938.

In section 2, subsections (2) and 3) "

Page 96, line 15, after "1859" insert "the Local Government Act 1888"
Page 96, column 3, line 29, leave out from "words" to end of line 34 and insert "by the sheriff, mayor or other person"
Page 97, line 42, column 3, after "1" insert "the entry beginning "Judge appointed for a district "and"
Page 98, line 25, column 3, at beginning insert—
Section 1(4)."
Page 98, column 3, leave out line 36 and insert—
"Section 84. Section 85(1)."
Page 98, line 49, column 3, leave out "section 20" and insert "sections 20 and 29"
Page 99, line 2, column 3, at end insert—
"Section3."
Page 100, line 14, column 3, leave out "clerk or deputy clerk of"
Page 100, line 23, column 3, at beginning insert" "to"
Page 100, line 24, column 3, at end insert —
"Section 2. Schedule 1."
Page 100, column 3, leave out lines 34 to 39 and insert —
"In section 2(2), the proviso. Sections 3 to 10."
Page 101, line 14, at end insert —

" 1963 c. 2.

The Betting Gaming and Lotteries Act 1963

In Schedule 2, in paragraph 6, the words from "in accordance" to "1849".

In Schedule 3, in paragraph 13(2), the words from "in accordance" to "1849".

In Schedule 7, in paragraph 5, the words from "in accordance" to "1849"."

Page 101, column 3, leave out line 21, and insert "subsections (1) and (2) of section 23"
Page 102, line 39, column 3, at beginning insert "In section 1(3) the words" of the Queen's Bench Division "and paragraph (a)"
Page 102, line 39, column 3, at end insert —
"In Schedule 2, paragraph 5."
Page 103, line 4, after "2" insert "paragraph 1 and "
Page 104, line 25, column 3, at end insert—
"Section 25(1)(a). Section 26(1)."
Page 104, line 26, column 3, at end insert—
"Section 45(1)."
Page 104, line 26, column 3, at end insert —
" In Schedule 2, in paragraph 6, the amendments of sections 70, 109, 113, 115 and 116 of the Judicature Act 1925, and paragraph 10 In Schedule 9, paragraphs 8 and 21."
THE LORD CHANCELLOR: My Lords, in pursuance of the noble and learned Lord's invitation, I now beg to move that this House doth agree with the Commons in the remaining Amendments.
Moved, That this House doth agree with the Commons in the said Amendments.—(The Lord Chancellor.)
LORD AIREDALE: My Lords, I think it was only a day or two ago that we were congratulating ourselves as a House that a Bill which we had sent to the Commons came back to us with only, I think, four Commons Amendments. We thought that indicated that we had done our work rather well. To-day would seem to be a day for self-congratulation on the part of the other place who have succeeded in introducing 168 Amendments into a Bill which we sent to them.
THE LORD CHANCELLOR: My Lords, I am obliged to the noble Lord, Lord Airedale. I think the truth of the matter—without undue congratulation to either place—is that in order to get this Bill this Session I had to prepare it, owing to the Parliamentary Time-table, on such a date that it would go through this House first in the early part of the Session. One has to do this, I think, every year if one is to get the maximum use out of two Houses of Parliament. The result was that there were a number of blemishes on the Bill, some of which I tried to remedy on Committee and Report here; but some of which were remedied in the Commons because they were spotted only after the Bill left this House. I am not depreciating the work of the Opposition in the other place, who were most helpful. We have seen from time to time, in the course of this rather

865
dull debate, that the Commons, either the Opposition or the Government, have managed to introduce new matter which is of value. But I am very grateful to the noble Lord, Lord Airedale.
On Question, Motion agreed to.

MOTOR VEHICLES (PASSENGER INSURANCE) BILL
6.30 p.m.
VISCOUNT COLVILLE OF CULROSS: My Lords, I beg to move that this Bill be now read a second time. I think that I had better say a few words in support of my Motion and explain the Bill to your Lordships. Every noble Lord knows that anyone using a motor vehicle on the roads must by law have an insurance policy covering him against third party risks. That has been the law since 1930, and it is now to be found in the Road Traffic Act 1960, a consolidation measure. That policy of insurance does not extend to passengers in or on a vehicle.
The matter is dealt with by Section 203(4) of the 1960 Act, and that is the passage with which my Bill deals. I will tell your Lordships what that subsection says. It says:
"The policy —
the insurance policy, that is —
"shall not, by virtue of paragraph (c) of the last foregoing subsection, be required to cover —
(a) liability in respect of the death of, or bodily injury to, persons being carried in or upon, or entering or getting on to or alighting from, the vehicle at the time of the occurrence of the event out of which the claim arises…"
Then there are two paragraphs (b) and (c), with which I am not concerned, followed by a proviso, which says:
"Provided that paragraph (a) of this subsection shall not have effect in the case of a vehicle in which passengers are carried for hire or reward or by reason of or in pursuance of a contract of employment."
So the people mentioned in the proviso have to be compulsorily insured, but not other passengers, This Bill does away with that exemption in paragraph (a) and since the proviso is meaningless without paragraph (a), it does away with the proviso as well. From now on, if this Bill becomes law, it will be necessary —and it will be a criminal offence if it is not done —to have an insurance policy
866
which covers a passenger riding in or on a vehicle.
The origin of the exception to compulsory insurance in the case of passengers is not very plain, but it seems to have rested upon the theory, prevalent at any rate in the 1930's, that if a passenger chose to get into or on to a motor vehicle he assessed the risk of whether he would be injured or killed, and if he thought that it was very dangerous he would not get in or get off. The result of this has been, to say the least, very unhappy. Many people have pointed to the results of this exception. Indeed, this Bill is the third in the last ten years to be introduced to deal with this problem. It is, however, the first that has actually passed through another place. It was carried through by my honourable friend the Member for Stretford, who was supported from all parts of the House.
That support, I think, arises largely from a growing awareness of the social evil involved as a result of the exemption from compulsory insurance for passengers. It also results from the expert consideration given to this matter by a Committee, under the chairmanship of Sir Harold Kent, which reported three or four years ago, having been set up by the right honourable Lady the Member for Blackburn, Mrs. Castle, as a result I think of the first Bill I mentioned.
Support now also comes from those who at one time were very suspicious about this measure, and I must say that this includes those who are interested in motor bicycles. I would join my congratulations with those voiced in another place to the British Motor Cyclists' Federation upon their highly constructive approach to this Bill, which has been most helpful to my honourable friend, and also on the communications they have had with me. Those who considered that they might be prejudiced have been most carefully consulted by my honourable friend. So, too, have the motor insurers, as has the Department of the Environment, which is highly involved in this matter. I am also in touch with these parties and it appears that all of them support the principle of this Bill. Of course, I will continue with the consultations and will consult with any noble Lord who wishes to raise points on this measure, but I hope that the principle of it is acceptable to the House.

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I must say just a word about the social evil which this Bill is intended to remedy. I am told that in 1969 there were 1,132,000 car owners who had no insurance for their passengers. That is only one-tenth of the total number of car owners in this country, so it is not a large proportion; but it is a high number in absolute terms of the number of cars. There were also I million or thereabouts of motor cyclists in the same position—that is, about 90 per cent. of the motor cyclists in this country. There were also half a million owners of agricultural vehicles, as well as some others.
In 1969, 113,000 motor vehicle passengers were killed or injured in accidents. The huge majority of these were of course covered by insurance, but I have recently seen a figure that there may be up to 4.000 of these passengers who are killed or seriously injured yearly and who are not insured at all. If only the driver of their own vehicle is involved, and they cannot put the blame on the driver of the other vehicle, at any rate in part, there is no insurance cover for them at all. This is a serious situation.
I will not attempt to harrow the House with the gruesome and pathetic details of some of the cases that have arisen in this way, but if noble Lords care to read the debate of the Second Reading of this Bill in another place on February 5 of this year, they will find many examples of this. Putting it as briefly as I can, the result of this lack of insurance takes three forms. First of all, the injured passenger himself, or, if he is killed, his dependants, can look only to the driver of the vehicle for any sort of recourse in damages. The driver may not have any money. If so, their prospects are indeed bleak.
But it is not only they who are in trouble: the driver himself can get into severe difficulties. He may be held responsible, in whole or in part, in negligence and very large sums can be awarded in the case of some of these accidents. It is quite likely that the driver is put in the position, having no capital and no insurance policy, in which the only way he can attempt to meet the damages that have been awarded against him is to accept responsibility for a small weekly payment, which may impede him in his financial affairs for years and may be
868
of such an amount that there is no prospect of it being paid off within his lifetime, or indeed within three of his lifetimes. This is disastrous both for him and to the person injured or the dependants of the person killed.
It is a third and very important consideration that, so long as passenger insurance is not compulsory by law, no assistance can be obtained from the Motor Insurers' Bureau. This is an institution which has the most admirable and laudable agreement with the Department of the Environment to help if a risk which the law requires to be insured against is not in fact insured against. In that event, injury or death arising out of an accident will be backed up by the Bureau, and payments to those injured, or to the dependants of those killed, are made by the Bureau. But, of course, that is done only if the particular insurance cover that should have been in force is required by law. In the case of passengers, at the moment it is not, and therefore the Bureau do not step in. They will do if the Bill is passed.
That is important, I think, in three situations. First of all, if the driver has broken the law and has not insured himself, as he would be required to do under this Bill, then the Bureau will step in. Secondly, they will do so if the insurance company reneges on the contract, because perhaps there has been some alteration to the vehicle of which they have not been told. For instance, there was a case where somebody put an extra carburettor on his car without telling the insurance company, and they said that the description of the vehicle had been changed and they would not honour the contract. In those circumstances, the Motor Insurers Bureau would step in, but only if this Bill becomes law.
There is another circumstance, where the insurance company goes into liquidation. Noble Lords will have very much in mind one particular case where this recently occurred. A large sum of damages was awarded against somebody who was insured with that company. The man was perfectly lawfully insured with the company against risk, but by the time the court dealt with the claim and awarded the damages the company had gone into liquidation. So again, had it not been for the Motor Insurers Bureau, if this had been a third party claim, there

869
would be no recourse. In this case there was a passenger claim, and because the Bill was not law there was no recourse and the Motor Insurers Bureau did not step in: though I am bound to say—and I am sure that the House will be glad to know about this—that the British Insurance Association have come to the aid of the particular individual faced with payment of the award, so that, fortunately, all is not lost; but that course would not have been necessary had this Bill been law.
So I would suggest that the change that the Bill makes must be welcome to all in principle. Moreover, we shall only be catching up with all the other countries of Europe, except for Italy, which for some reason does not have compulsory insurance. All the other countries in Europe have compulsory insurance for passengers. They include Northern Ireland, which brought this measure into force on January 1 of this year. So, as I say, we a re only catching up with the rest of Europe.
My Lords, the picture looks so rosy that it would appear that there cannot possibly be any snags. But of course there are; there are bound to be difficulties in any matter of this sort. I should like briefly to touch on one or two matters which have been raised by way at least of partial objection to this Bill. First of all, some people have suggested that there should be exemptions from this compulsory passenger insurance. My honourable friend the Member for Stretford, the Minister in charge of this Bill in another place, and indeed the whole of the Standing Committee, all agreed that there should not be exemptions. Respectfully, I agree with them. I say that this is a matter of principle. It is worth noting that the Northern Ireland Government allowed a very minor exemption, and I am told that even so soon as this moment, they now regret that they did so.
The difficulties about exemptions are, first of all, that it is extremely difficult to decide what, if any, sort of vehicle should be exempted. Secondly, it is difficult to enforce any exemption if it is allowed. All sorts of means have been suggested of doing this, but none that I know of stands up to any test of practicality. Then there is the third, and I should have thought fairly obvious, proposition, that
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there is almost no vehicle—and nobody has ever suggested one in the course of the passage of any of these Bills—which cannot carry a passenger. Some of them may not be meant to or allowed to carry passengers, but physically I know of none which cannot. For instance, a small motor-cycle may be made as a single seater—although many of them now are not—but for a very small sum a kit can he bought whereby a conversion can be made to carry a passenger on the back: and many of these vehicles are quite powerful enough to do so.
Then, my Lords, what about agricultural tractors? Is there no kindly farmer in the country who will ever give a child a ride on his tractor? I do not believe it. Then I read of a case, again concerning a friendly driver of a mechanical digger, who used to give children rides in the bucket on the front of his digger, and most unfortunately, one of these children was crushed to death. Although there was no equipment to carry passengers on that machine—and indeed, I should think it was illegal—a passenger was being carried, and he was killed. As I have said, the Committee in another place considered this matter and came to the conclusion that there should be no exemption.
Then, in that case, people say that the premiums will be very high, and perhaps prohibitive to some people. It was in order to elucidate this sort of point that consultations were held with the insurance companies. It seems that the extra premiums are not likely to be so large as some people fear. Of course, in many cases people already have this insurance anyway—as I have said, nine-tenths of the car owners have—and in their case there will be no additional charge at all.
There has again been some concern about motor cycles. Figures were given in the debates in another place, and I have had a communication from one experienced and knowledgeable writer in the motor cycle world who says that he accepts as realistic a range from 50p for a single seater moped to about £7 for a 750 cc. machine with a driver over 25. Those were figures given by my honourable friend the Member for Stretford. I am not denying that bad risks will pay more, but so they do in the case of any insurance for any motorist.

871
Despite that, and despite the talks with the British Insurance Association, some of the motor cycling interests are still not quite satisfied that the insurance industry should be allowed to work this Bill out in the market without further supervision. Of course there is control of insurance companies by the Department of Trade and Industry under, among other things, the Companies Act 1968. But there was put forward in another place a clause suggesting a code of practice which should be incorporated unless expressly excluded in every policy. That clause was considered carefully in Standing Committee, who rejected it as impracticable. Again I entirely agree that the legal difficulties are substantial. In any event, I would suggest to the House that this is not the right measure in which to introduce codes of practice or other general matters relating to the insurance business, because that is a much broader affair and not really suitable to be dealt with in this rather limited, though important, measure.
One must remember, of course, in terms of premiums and how the market will work, that the wider the premiums are spread the lower they should be for any individual. Indeed, in the case of one vehicle, which, on its face, is either incapable of carrying or is not allowed by law to carry passengers, one would expect the risk to be so small that the insurance premium would be equally minimal in its turn.
Then some people suggest that the risks involved in motor cycling have been overestimated by the insurance companies. I mention this because the British Motor Cyclists Federation produced some statistics, which they presented to various Members in another place, and which they have since said—I dare say, rightly—have not been challenged, to show that perhaps people have overestimated the risks from riding as a driver or a passenger on a motor cycle. My view about these statistics is this. If the risks are, contrary to what they say, great, then it is all the more important that passengers should be insured against them. If they are, as the statistics suggest, very much exaggerated, then this should be reflected in the level of premium, and it ought to be possible to obtain a policy at a much less price than perhaps some people would fear.
872
I suppose that in all these conversations about the insurance companies and how the Bill will work in practice it is most reassuring that there is a promise of a continuing dialogue between the motor cycling interests, in particular, the British Insurance Association, and indeed the Department of the Environment, during the whole of the time before which the Bill becomes law. It is to be brought into force by virtue of an order to be made at such date as the Secretary of State thinks right. There is still time for discussions to be worked out. I hope it will not be thought that anything ought to be put in the Bill about this.
I come to the last drawback, and it is upon this that I would welcome the assistance of my noble and learned friend on the Woolsack, if he is able to give it. About four days after this Bill was given a Second Reading in another place, Mr. Justice Ackner decided a case called Bennett v. Tugwell. It is reported in The Times of February 9 this year. What happened was that a passenger in the car was injured through the admitted negligence of the driver of the car, Mr. Tugwell. The driver had comprehensive insurance covering passengers, but for some reason he had put a notice on the dashboard of the car which said:
"Passengers travelling in this vehicle do so at their own risk."
It was a little notice which had cost him 12½p to buy.
The result for him was very unfortunate, although I do not in any way wish to criticise the decision of the learned judge. The passenger was injured and claimed £1,100 damages. In fact, £500 was paid into court, and the insurance company, although it won the case, allowed him to keep this, to their credit. The defence essentially by the insurance company was that he got into the car, saw the notice and therefore voluntarily accepted the risk. Mr. Justice Ackner said that there was no need for a contract but merely for the defendant's assent, not to the infliction of injury but merely to the assumption of the risk of such injury. He then went on to point out that if he had thought that the insurance company was trying to "get away with it" rather than deal with the point of principle, he would have been very severe, at any rate in his criticism of them; but their conduct plainly showed that they were not seeking to do that.

873
He added—and this is important—that he hoped that the main effect of his judgment would be to expedite the passage of legislation to make passenger insurance compulsory, a change in the law which the legal profession had long sought. And not only he said that. In a case in 1969 the noble and learned Lord, Lord Denning, to whom I know this House listens with great attention, said it, too, and I know that there have been many others over the years who have said the same. It may well be that as the result of that recent case an Amendment is necessary to this Bill in order to remedy the matter. It is on that that I should like the assistance of my noble and learned friend. I know that it has been discussed between his Department, himself and my honourable friend in another place. I feel sure that in view of the promises that have been made of remedial action it may be that we should have an Amendment in this House.
My Lords, I have touched upon most of the points of principle which I believe to be important. I can, I hope, answer questions if there are other matters which I have left obscure. I hope that I have convinced your Lordships that this is a worthy and necessary Bill, and that there are no inferential or consequential problems which override the public good which will come of it. I beg to move that the Bill be now read a second time.
Moved, That the Bill be now read 2a.— (Viscount Colville of Culross.)
6.54 p.m.
LORD GARDINER: My Lords, as we know in this House, any Bill introduced by the noble and learned Viscount is always clearly explained to us, and we are grateful to him. It is a great personal pleasure to me to be able to support the Bill on behalf of the Opposition, because, like practically all working lawyers, I have come across these tragic cases where men and women, often young, are crippled for life and then find that there are no damages because the driver has no money and is not insured. Sometimes it is even worse—you do not find it out until a fortnight or so after the trial, when a girl who may be crippled for life and has heard a judge award her £21,000 has to be told, "He is not insured; he cannot possibly pay more than £5 a month". That would take
874
350 years and she will not be there to get the money. All lawyers feel strongly about this matter because of these personal experiences.
In a case in 1969, Lord Justice Sachs said:
"It is now the best part of forty years since a large measure of compulsory insurance for motorists was brought into force, having regard to the perils to which other road users were put by the motor car drivers incapable of paying damages. That was indeed a great step forward, though even at that time there was a measure of criticism of the plight in which passengers were left. Since then the courts have seen only too often a procession of gravely injured passengers who were bereft of compensation because the drivers were too mean or too careless to take out a more comprehensive form of policy…"
In 1961, Mr. Cronin, the honourable Member for Loughborough, introduced a Bill to remedy this great wrong, but, as we all know, he was defeated at that time by the motor-cyclists' lobby. When I found myself a member of a Government I was naturally concerned about this matter. Mrs. Castle, when Minister of Transport, appointed a special committee of the National Road Safety Committee, under the chairmanship of Sir Harold Kent, who made a strong report in favour of compulsory insurance for passengers, with no exception. That was in 1968. My recollection is that very soon after that Mrs. Castle was transferred to another Ministry. I then had to tackle Mr. Marsh. On March 10, 1969, Mr. Marsh made a statement saying that the Government would legislate as soon as possible. Before they had been able to do so, in February, 1970, the honourable Member for Nelson and Colne, Mr. Waddington, introduced a Bill which passed its Second Reading and Committee stage in April. Then came the General Election. From the Cronin Bill until March, 1969, 25,000 pillion passengers met death or injury—that is over 70 a week. In 1969 alone there were 1,491 on scooters and 4,400 on motor-cycles. Vehicle for vehicle, in relation to the number of vehicles there are five times as many passengers injured on scooters and motor-cycles as in cars.
We have now an advantage in the experiences of Northern Ireland, because the Northern Ireland Government passed an Act providing for full compulsory insurance, excluding vehicles which were not equipped to take a passenger. That

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has been very useful to us, for two reasons. First, we now know from experience that the premiums are no higher than those who can afford to buy motorcycles can afford to pay, and, secondly, we know that to have an exclusion of that kind is absolutely unworkable, because that is what they have found in practice. The relevant Minister says that his Government are going to change that as soon as they possibly can. My Lords, for those reasons I strongly support this Bill, as I hope and believe all my noble friends will, and I hope that noble Lords in all parts of the House will do so.
6.59 p.m.
EARL HOWE: My Lords, my object in intervening briefly in the passage of this Bill at this late hour is to endeavour to give a measure of support to the motorcycling fraternity, to whom it appears the Bill may have some harsh financial implications. No doubt it is felt by many people that the average motor-cyclist is a noisy, wild young man in a leather jacket whose very youthfulness gives him a "devil may care" attitude to other road users. There are not so many motorcyclists about to-day, and out of these I can assure your Lordships that only a minority fall into the category I have just mentioned. The majority take pride in their machines and in their riding and are both skilled and considerate. Yet on account of the stupid behaviour of a minority group, they are not always, in my opinion, given fair publicity. In fact, I am not sure that some people would not like to see the motor-cycle removed from our roads.
I referred just now to the comparative scarcity of two-wheeled vehicles. I think it is true to say that the motor-cyclist of yesterday has now become the owner and driver of a small car to-day. There is no better training, quite frankly, for road-craft and eventual driving expertise than starting your career on a motor-bike. Many of the world's finest drivers—some of whom I know very well indeed—started their careers on motor-cycles. So once again I stress that any attempt to price this not necessarily wealthy class of road user off our roads would be a stupid mistake. I am not suggesting for one moment that that is the intention, but it is in the minds, I know, of motorcyclists.
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I have only recently had the opportunity to discuss this insurance Bill with one or two well-known motor-cyclists. Of course, it is difficult in theory to fault the Churchill Bill, and I would congratulate Mr. Churchill on his work on it; but in actual practice it may not work out so well for everyone entitled to use the roads. We all want to see that injured passengers have open to them the same sources of compensation as other third parties have. But I am concerned with the possibility that premiums are likely to be excessive, because compulsory motor insurance is unique in our commercial law; the normal rules of supply and demand and market competition cannot apply. The customer is obliged to buy, and the vendor is not obliged to sell except on his own terms. I know that motor-cycle clubs, organisations and riders generally suspect that extortionate premium levels will be charged out of all proportion to the alleged risks of motor-cycling. On this point, it is interesting to note that in relation to the numbers of two-wheeled vehicles in use there are very few passenger accidents. I am not going to quote a lot of statistics which I have been given, but I do not believe that motorcycles present a more significant passenger risk than do motor cars.
The doubts to which I have referred are understandable by the failure of the insurance industry to quote firm premium estimates for compulsory passenger cover, and the present high levels for voluntary passenger cover. No special rates are given, so far as I can see, for solo bikes, and special terms are rarely, if at all, given for good risks. The collapse of the insurance company to which my noble friend Lord Colville of Culross has just referred cannot have given great confidence to the British Motor-cyclists' Federation—as would apply to any insurance company for that matter, if this had unfortunately happened to them. Both the R.A.C. and the A.C.U. have argued that single-seat motor-bikes should be exempt from compulsory passenger insurance. Why should the riders pay for something that they do not and cannot use? This seems a reasonable argument. If very occasionally a passenger is carried illegally on a solo machine, and in some discomfort—that is to say, without

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a proper pillion seat—then the risks of civil action for damages should be taken into account at a reasonable premium.
My Lords, there is a large section of the motor-cycling community proudly owning veteran and vintage vehicles—and this is very important. They generally have to pay disproportionate running costs when their use may be confined to, say, half a dozen runs a year. For these costs to rise much higher than they are at present would only swell the already alarming export rate of really irreplaceable historic vehicles from this country. Owing to rising costs, et cetera, far too much of historical interest is leaving these shores already. It was not so long ago that we lost London Bridge. If this is slightly irrelevant, I apologise, but it seems a pointer to the way things are going to-day. I suggest it is our duty to try to call a halt to all this if it is within our power, particularly so far as these rather magnificent vintage machines are concerned. I like the idea put forward in another place, that the Minister should be given enabling powers to exempt specified classes of vehicle pro tempore until he is satisfied that suitable insurance arrangements are available.
It is quite possible that the enforcement of compulsory passenger insurance with high premiums would add to the number of insurance dodgers. I hope that the noble Viscount, Lord Colville of Culross, who I know has spoken to my informant so far as motor-cyclists are concerned, will give consideration to all these small points which are nevertheless very deeply felt by those who ride motorcycles. I frankly admit that I feel slightly embarrassed speaking between two such very learned gentlemen as the noble arid learned Lord the Lord Chancellor and the noble and learned Lord, Lord Gardiner; but I understand the feelings of road users, with whom I am proud to have been connected for so many years in so many different capacities.
7.5 p.m.
LORD DE CLIFFORD: My Lords, I personally should like to give a wholehearted welcome to the principles of this Bill. What is bothering me, and a certain number of other people, is not exemptions, to which the noble and learned Lord, Lord Gardiner, referred, but inclusions. It appears to me from reading the Road Traffic Act (not being a very
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able reader of Acts) that there can still be a number of passengers free of insurance cover. Apparently it is the insurance companies who are really going to operate this law. I know that a number of insurance companies insist, in the case of vans and pick-up vehicles, that passengers shall be carried only in fixed seats. If we are coming down to a situation in which the insurance company can say that only a passenger in a fixed seat is covered, we should know how such a law is going to be enforced. It is quite common, particularly in the country, for people to carry passengers in non-fixed seats—on cushions and so forth in the back of vans—and they will not be covered. How is a law going to be enforced so that they will be covered?
Something else that has been slightly worrying me is the subject of tractors. Under this Bill, people have to be covered as passengers, but most tractors have no seating for passengers. Are we then to say that tractors in the country are not to carry passengers? Are the insurance companies going to say that, or that passengers may be carried only in seats constructed for passengers? At the present moment, I personally know of one gentleman in the country who lives two and a half miles from the bus stop and who goes down to collect his mother from the bus. The method by which he brings her home is on a cushion, with a rug stretched over it, on the mudguards of a tractor. Is this lady to be covered; and how is a premium going to be assessed for covering her? I know people who go to work on the mudguards of tractors. Furthermore, if we are going to allow the insurance company to be the interpreter of this law, is it right that that should be so? I thought that Members of Parliament of both Houses were the people who decided what the law should be.
There is another series of items which tend to worry me. Take trailers. It is a common practice in the country, particularly at harvest time, for workers and children to be taken to and from hayfields and cornfields, and suchlike, on trailers. I understand that the law says that a trailer is part of a vehicle when a substantial amount of its weight is carried by the prime mover. I may be wrong in this, but that is what I understand. If a trailer is merely attached to the prime mover, will the passengers on

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that trailer be covered by these provisions—because at the moment, as I understand it, they are not part of a vehicle which has compulsorily to be insured for passengers. I feel that they should be covered, and that this Bill should be made to do that, because in many cases it is very young people who become involved as passengers in this way.
This also applies to what I think are described as low-loaders, which are merely hitched on to an articulated vehicle. I myself have seen a low-loader in the dark draw up at traffic lights; a number of young hitchhikers have got on the back, and even the driver has not known they were there. How are we to cover those people? Are they automatically covered as passengers, or will the driver unwittingly be breaking the law? What I am worried about in regard to all the laws that apply here is how they are to be enforced. It is hopeless to make a law that cannot be enforced. I am 100 per cent. with the noble Viscount in this matter.
I now come to motor cars. I am 100 per cent. in agreement that all passengers in cars should be covered. How are we to say which passengers in that car are to be covered? The car is constructed perhaps to carry five or six people. People go out to a dance, get into a party; somebody's car breaks down, and seven or eight people pile into the one car. Which, out of those seven or eight, if the number of passengers covered is to be restricted to five, are not to be covered; and if they are not covered how is the law to be enforced in such a way that they will be covered? This worries me, my Lords, and while I heartily support the noble Viscount in the principle of this Bill, I hope that somebody can reassure me on some of these points.
LORD AIREDALE: My Lords, if the Liberal Party is somewhat thinly represented this evening, at least it is not alone in that regard. But I think I can speak for all my noble friends in warmly supporting this Bill.
7.13 p.m.
THE LORD CHANCELLOR: My Lords, I should first like to thank my noble friend Lord Colville of Culross for undertaking the burden of what I think is a public service in sponsoring this Bill through your Lordships' House. I should
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also like to say what a pleasure it is to me to support not only him but a Bill which I think represents the first separate legislative endeavour of the new Member for Stretford, who bears the honoured name of Mr. Winston Churchill and whom one is glad to see, for every reason, in Parliament—an additional reason that applies to me that does not apply to noble Lords of the opposite Parties.
I think I can wholeheartedly support this Bill without any qualification at all. If I may deal with some of the points that have been raised, I should like first to answer the question put to me by my noble friend Lord Colville about the Tugwell decision. It is my intention at the Committee stage of the Bill to introduce a clause against contracting out, or, if my noble friend would prefer to do it himself, I can provide him with a little preliminary draftsmanship and support him, which would be just as welcome to me. But at any rate it is my intention to try to prevent contracting out, so as to nullify the effect of the Tugwell decision. This, of course, is not a criticism of Mr. Justice Ackner, who decided the law on what I should have thought any lawyer would agree to be correct grounds, but we just do not want it to be the law any longer. We are going to amend it, and this is a suitable legislative opportunity to do it. Secondly, I should like to thank the noble and learned Lord, Lord Gardiner, for what he said. I specifically endorse his arguments because he, like me, has seen too much of this business to want anything else but to see this law in force as quickly as possible.
That brings me to the two speeches of my noble friends, who were slightly—but I hope only slightly—more critical. First, there was my noble friend Lord Howe, who spoke, as he said, in defence of the motor-cycling fraternity. I do not want to differ in any way from his encomium on the general run of motorcyclists, any more than I want to differ from him or anyone else about an equal encomium about the ordinary run of motor-car drivers or lorry drivers. The great majority of people who use the roads use them responsibly. But anybody who has driven a car for as long as my noble friend, or even anybody who has driven a car as long as I have, which is since 1926, knows what accidents are about. Accidents are not about criminal driving or reckless driving; they are

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about negligence, and if anybody thinks he can drive on the roads for forty years without ever driving negligently he is either a knave or a fool.
That is true of motor-cyclists no less than of motor-car drivers, and I wonder whether really it is a defence of motorcyclists to say that they should not be liable for acts of negligence which they may show towards their own pillion riders, if those pillion riders suffer damage—damage which, as the noble and learned Lord, Lord Gardiner, reminded us and as every practising lawyer on the common law side knows, may involve either death (in which case there is a widow and young children, whom we were discussing on Tuesday in connection with the Law Reform (Miscellaneous Provisions) Bill) or injury which may involve permanent loss of faculties. Is it really the desire of the motor-cycling fraternity that their pillion passengers should not be protected from a momentary act of carelessness? Which of us can honestly say, crossing his heart, that we have not been guilty of momentary acts of carelessness where, but for the grace of God, we should have been involved in a serious accident? Speaking for myself as rather an ageing man, when I think of how I drove when I was an undergraduate I really would not have applied to myself the wholehearted encomium which my noble friend Lord Howe applied to his clients. I did not always drive safely; I did not even always drive according to the letter of the law. Sometimes I drove dangerously.
I hope and believe that I have learned to drive safely over the years, and not the least factor which has taught me to drive safely has been forty years of experience in the common law courts, seeing the misery and pain and sorrow, persisting year after year, of perfectly innocent people, passengers and others, who haw been guilty of no more than a moment's folly, unable to get compensation because of that moment of stupidity or even of a slight deviation from the standards required by the courts. Is it really a defence of the motor-cycling fraternity—
EARL HOWE: My Lords, if I may dare to stand up and interrupt the noble and learned Lord, the Lord Chancellor, may I say that I was more concerned with the height to which the premium might be
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raised. What worried me so much was the fact that the motor-cyclist is not a particularly wealthy user of the roads, and although I quite understand that he should have a premium to pay I was worried that it might be very high.
THE LORD CHANCELLOR: M2,' Lords, I was just about to come to that point, but I am glad that I need not labour the point of principle. I have lived with this controversy in Parliament for years, like the noble and learned Lord. Lord Gardiner. I lived with it in another place and I have lived with it in a previous Government. The motor-cycling fraternity are rather apt to forget that the insurance is just as much for their advantage as for the advantage of their passengers. What person, if he drives a motor-cycle and if he really thought about the implications, would like to start out on his life as a young man with a judgment of £21,000 against him which he could not afford to pay? It would mean that if at any time in his life he acquired some money he could have it taken away from him by the representatives of the person, or the person whom he had injured. Let us be responsible and let us be realistic about the principle. I have laboured it only because my experience has been that the motor-cycling fraternity are rather apt to lose sight of it, and when an old, bald-headed lawyer goes and tells them the facts of life they do not want to hear. But I am certainly old enough and mad enough to go on telling them, whether they want to hear it or not.
Now I come to the question of premiums, which I agree is, in one way, the crux of the matter. I would first of all refer my noble friend to what my noble friend Lord Colville of Culross said in opening, because it has been established by experience in Northern Ireland that the premiums are not unduly high. You cannot get anything for nothing in this world, and you cannot get additional cover for nothing. But they can be as low as £7, and on the very largest type of motor-cycle, with the driver with the worst possible record, I suppose they could go up to £25, or something like that. That is the sort of range. My noble and learned friend Lord Colville in his opening speech indicated that in the case of the ordinary type of cycle and the ordinary type of driver the premiums are in fact much less.
VISCOUNT COLVILLE OF CULROSS: My Lords, I do not want there to be any doubt about this. I gave £7 as the top of the range for powerful machines with a driver of 25 or over. It could be very much less than this in some cases; for instance, in the case of the single-seat moped it could be only 50p.
THE LORD CHANCELLOR: My Lords, I think it could be more for the bigger machine and for the younger driver. In fact, I think there are some machines of more than 750 cc. on the roads. But the experience of Northern Ireland is perfectly reliable, because it represents what has actually happened; it is not guesswork. And I am informed, and believe, that Northern Ireland is in fact, with Glasgow and London, for some reason, an area of rather high premiums rather than low. In the greater part of the country the premiums would be less and not more than in Northern Ireland, although about the same in Glasgow and in London. So much for the level of premiums.
I would also venture to say, bearing in mind that the moped premium is down to 50p (I would still prefer to call it 10s.), that if you can afford to buy a 750 cc. vehicle you can afford to insure it; and if you cannot afford to insure the 750 cc. vehicle, as against your mopeds, there are some stern old gentlemen who would take the view that you ought to buy a less powerful machine. I may be a "square", and I may be stupid and unable to absorb the great enthusiasm of youth for more c.c.'s; but I do feel that, if they are as responsible as my noble friend says, they ought to realise that if they are going to use a lethal weapon on the roads it is not enough to say "I am a good rider "; they must also insure the passengers.
I quite see that there are classes of vehicles that do not normally carry passengers in the ordinary way. My noble friend Lord Colville made reference to this point. These questions have been very carefully considered at least since 1960, when the first Private Member's Bill was discussed, both by the Department and by the Kent Committee. Their conclusion was against any form of opting out, and the reason is that the stakes are much too big, and the damage done in these vehicle accidents much too large.
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Vehicles can change hands, can be converted, can be lent. Passengers are in fact carried on vehicles where there are no passenger seats, and from time to time they will be carried on vehicles where the driver has actually undertaken not to carry passengers. It is just those cases where the odd accident will happen and irreparable damage will be done. Incidentally, may I say that it is in those cases that the premium will be lowest, because, as my noble friend Lord Colville pointed out, it is these mopeds which have no seats where the actual factor in the premium which will cover passengers will be the smallest.
I should like now to say one or two things about the questions—I am not sure that they were intended as criticisms —asked by my noble friend Lord de Clifford. First of all, I think we must get clear what this Bill does. It simply removes an exception to the existing law. That is the first thing, to get absolutely plain. He asks me how the law is going to be enforced. The answer is, in exactly the same way as it has been enforced for the last 40 years. What we have done is not to introduce a new law, but to remove an exception from an old one. There is no difficulty about enforcing the law. It will still be enforced, even when the passengers are not covered, in exactly the same way as in the not infrequent cases that occur now—for example, where the assured in some way breaches his policy and invalidates it. He will be committing a crime, and the Motor Insurers' Bureau will pick up the damage as regards an injured passenger just as they now do in other cases of voided policies when a person who is not a passenger is injured by negligence. There is absolutely no difficulty about that at all.
The same principle applies to tractors, to trailers, to motor cars, and all the other instances that my noble friend gave. It presents no difficulty which is not met with every day under the general law, because all we are doing is to remove from it an important, though still relatively small, exception—I say relatively small because, as my noble friend Lord Colville pointed out, nine out of ten policies already cover passengers without any enforcement behind it. When they are not covered, the Motor Insurers Bureau will stand behind the injury. Perhaps I may deal with one other point made by the noble Earl, Lord Howe, and

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the noble Lord, Lord de Clifford, who spoke about the insurers enforcing the law. My Lords, they will not enforce this law, any more than they have done for 40 years. There has been compulsory insurance since 1930. The only thing we are doing is to take out an exception. They will not enforce this law any more than, but they will do so just as much as, they have done for 40 years.
I would say that no one want to encourage insurance companies to charge excessive premiums. As a driver of very many years' standing, I think my interests as a driver override my interests, which I must also declare, as a name at Lloyd's. But the fact of the matter is that all the trouble in the insurance world, at any rate in the last three years, has been caused not by excessive premiums but by inadequate premiums. That seems to me the reality of the case. If Vehicle and General had charged excessive premiums, they might not be where they are now.
LORD CONESFORD: Did the noble Lord say Legal and General?
THE LORD CHANCELLOR: I said Vehicle and General—V. and G., not L. and G. At any rate, I did not mean Legal and General, and I do not think I said so. At any rate, that really covers that kind of point. I therefore end by saying that I hope that this Bill, with the addition of the new clause that I shall be proposing in Committee, will go through in the form in which my noble friend has introduced it.
7.28 p.m.
VISCOUNT COLVILLE OF CULROSS: My Lords, I am immensely grateful to noble Lords from all parts of the House for the support they have given. I also interpreted the speeches of my noble friends Lord Howe and Lord de Clifford as being, in principle, in support of this Bill—and I am glad to see them nod their assent. My noble and learned friend has answered the points that I raised, very much to my satisfaction. I should have referred to my own position and declared an interest as a name at Lloyd's, and I certainly do so now; but I confess that it had not occurred to me that I have any direct interest in this Bill.
My noble and learned friend has also answered a good deal more fully and competently than I could have done all questions asked. Perhaps I could put one
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gloss on the point Lord de Clifford made about insurers interpreting the law. I do not believe that they will do so, any more than my noble and learned friend believes they will. But what I believe may happen is that when drivers, obtain insurance, which will have to include cover for their passengers, it may become apparent to them that there are things—such as carrying passengers on tractors—which are illegal. It may become known to them through their insurance policy that this is so. It may also become apparent to them that they should not carry passengers in the back of a van upon anything other than fixed seats, and they may do something about it. I cannot guarantee that this will be so. If they do not, and as a result their insurance policy in any way becomes void, then, as my noble and learned friend said, there is still recourse to the M.I.B. But possibly and incidentally, it may be that the people who at the present moment do things which are perhaps not entirely safe for their passengers will be encouraged to mend their ways. At any rate, I am delighted with the reception that this Bill has had in this House, and I hope that it may now receive a Second Reading.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

RATING BILL
7.31 p.m.
THE PARLIAMENTARY UNDER-SECRETARY OF STATE, DEPARTMENT OF THE ENVIRONMENT (LORD SANDFORD): My Lords, I beg to move that this Bill be read a second time. The main purpose of the Bill, which I now commend to your Lordships' House, can be stated quite simply and briefly. It is to remove certain anomalies in the application of rating law to agricultural buildings in which new methods of animal husbandry are employed. By way of background, it might be of interest if I explained a little more fully to your Lordships the circumstances which have given rise to this measure.
Speaking generally, agriculture has been partially or wholly derated for a very long lime. Agricultural land in England and Wales was completely de-rated by the Local Government Act 1929, and so were agricultural buildings within

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the definition of that term. For this purpose an agricultural building is one which is occupied together with agricultural land, and is used solely in connection with agricultural operations on the land. This definition has stood ever since, subject to a minor addition to which I shall refer later, and now appears in Section 26 of the General Rate Act 1967. The position in Scotland has been much the same as in England and Wales, but it was not until 1956, in the Valuation and Rating (Scotland) Act of that year, that the Scottish law was brought into line with that South of the Border in regard to the method by which agricultural land and buildings were derated. Hence the corresponding reference to that Act in Part II of the Bill, which deals with Scotland.
Until quite recent times this definition of agricultural buildings was not unreasonable. Buildings used for agriculture were normally used in connection with agricultural land, and occupied by the farmer for the purposes of farming the land. And the buildings were usually solely used for those purposes. In recent years, however, as your Lordships will be well aware, we have had the development of more intensive forms of livestock husbandry. With the advent of these developments animals are kept in buildings, in an environment constructed and controlled to suit their needs. Instead of foraging for their food on agricultural land, the food is brought to them. It has been found that these intensive systems promote increased production in terms of eggs or meat for the food supplied. Current practice is to rear most pigs, poultry and some cattle in this way.
This process has had predictable rating consequences. Agricultural buildings gain exemption because they are used solely in connection with agricultural operation on agricultural land in the same occupation. But with intensive husbandry, there is not this sole connection. For example, some of the food for the animals may come from the farmer's land, but not normally all of it; sometimes perhaps none of it. Consequently, the courts have increasingly been finding that intensive livestock buildings are not exempt under the existing law because they do not comply with the condition of sole use in connection with
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agricultural land. We thus have the position that a farmer who uses traditional methods of farming enjoys rate exemption in respect of his agricultural buildings, whereas the farmer using newer methods which have now become accepted agricultural practice is rated in respect of his intensive buildings. This is the anomaly to which I referred at the beginning of my speech, and one which the Government were pledged in their Manifesto to remove when they came into office. This Bill implements that promise.
The main provision for this purpose is, for England and Wales, in Clause 2 which, subject to conditions set out in the clause, gives buildings in which livestock are kept or bred rate exemption in their own right, without, that is, their having to be used in connection with operations on agricultural land. Moreover, the clause also exempts, in a manner analogous to the building derated by the existing law, buildings used in connection with operations in the livestock buildings. Thus we have two sets of exempt premises: agricultural land, and its ancillary buildings under the existing law; and livestock buildings and their ancillary buildings under the Bill. And I might usefully add here that the clause provides for cases where a building falls partly under the old dispensation and partly under the new because of a mixture of uses; and also for land occupied and used in conjunction with the livestock buildings.
When the Bill was first introduced into Parliament, in another place, it applied to buildings in which all animals which had become regarded as agricultural animals, are kept and for this purpose the Bill defined livestock (again for England and Wales) in accordance with the definition of that term in the Agricultural Act 1947. This definition covers
"any creature kept for the production of food, wool, skins or fur, or for the purpose of its use in the farming of land".
In the course of the consideration of the Bill in another place, both the Government and the Opposition accepted that exemption could not be justified in respect of animals kept for their skins or fur, and the new definition, in subsection (3) of Clause 1, now refers only to mammals or birds kept for food, wool, or use

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in the farming of land. A similarly revised definition appears in Clause 4(6) in relation to Scotland.
In mentioning only mammals or birds, there is the obvious omission of two kinds of creatures—fish and insects. On fish, I would merely say that the Bill was never intended to apply to fish, which are not agricultural creatures, and the Amendment prevents any argument that it might have done so. On the second, the only insects which might have been involved were bees, but the provisions of the Bill as it stands do not fit the circumstances in which they are kept, so nothing is lost in excluding them from the definition. But I ought to say at this point that the Government are sympathetic to giving the benefit of the Bill to the ancillary buildings of bee-farmers, and if the House gives the Bill its Second Reading it will be my intention to move Amendments for this purpose at a later stage.
There is one other point of some importance which I should mention now before going on briefly to the secondary purposes of the Bill. I refer to the provision in subsection (4) of Clause 2 (and in subsection (5) of Clause 4 for Scotland) which makes it a condition of exemption that the livestock and ancillary buildings should be contiguous to, or surrounded by, not less than five acres of agricultural land, subject to certain disregards. The purpose of the condition is to deny exemption to livestock and ancillary buildings inside built-up areas. The Government take the view that intensive livestock rearing is not a suitable activity in such areas, and they do not consider it appropriate to extend rate exemption to them.
I should now like to mention briefly one or two significant features of the Bill. The first relates to the term "solely" in relation to the use of a building. This, your Lordships will recall, appears in the existing definition, and the courts have interpreted the terms strictly, so that anything more than a de minimis use would disqualify a building from exemption. Where the exemption does not apply, the building becomes rateable on the assumption that it is wholly used for a rateable purpose. The Government accept that a building should be predominantly used for agricultural purposes in order to qualify for exemption, but consider that the present rule operates too harshly; so provided that the non-qualifying use does
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not amount to a substantial part of the time, Clause 1(2) (and corresponding provisions in Part II of the Bill) ensure that exemption is not lost.
Secondly, I must devote a minute or two to Clauses 3 and 5, which deal with the position of buildings occupied by agricultural co-operatives. This is a complex subject, and I do not want to weary your Lordships with the detail of it. The necessity for special provisions arises from the requirement in the original definition of an agricultural building that it must be occupied with agricultural land. But since the original definition 40 years ago, co-operation between farmers has developed to a considerable degree. And to take the simplest case under the law as it stood in 1929, a single building might be occupied by several farmers for the purposes of the farming activities of each. Such a building would fail the test for exemption, but would still be just as much used for agricultural purposes as if one farmer occupied all the land, and the building. Because of developments of this kind, the Rating and Valuation Act 1961 (and. for Scotland, an Act in 1963) extended the derating of agricultural buildings to cases where the building was occupied by an unincorporated syndicate of farmers, and used in connection with their land which they occupied individually.
It is, in the first place, clearly right for the Bill to deal with this kind of situation in relation to livestock buildings and ancillary buildings; for example, where a syndicate occupies a building used in connection with the livestock buildings occupied by the individual members. In the second place, however, farmers have recognised the benefits of incorporation, and we now have corporate agricultural bodies occupying buildings which serve the agricultural land of their members. The Government consider that exemption should also be extended to these buildings. To achieve this it is necessary, first, to give the benefits of the 1961 and 1963 extension of derating to corporate bodies—for example, to corporate bodies occupying buildings ancillary to the agricultural land of their members—and, secondly, to give similar exemption to buildings occupied by corporate bodies in connection with the livestock buildings of their

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members. All these purposes are achieved by Clauses 3 and 5 of the Bill.
Finally, I ought to emphasise that the Government do not see this Bill as in any way prejudging the general issue of the rerating, or the continued derating, of agriculture which they must clearly consider in their current review of local government finance. It does no more than take the present agricultural exemption as it finds it, and amends it to bring it into line with newer agricultural methods and techniques. Agricultural re-rating is a separate issue which requires, and will be given, consideration in a wider context. I hope that that has made clear the purposes of this Bill. My Lords, I beg to move.
Moved, That the Bill be now read 2a.—(Lord Sandford.)
7.43 p.m
LORD GREENWOOD OF ROSSENDALE: My Lords, this is a measure which has come to us after a long and hard-fought battle in another place, where it evoked a great deal of passion, and the noble Lord's skilful presentation to-night does not make it any the more palatable. I want, if I may, to avoid being drawn into discussion about the ethics of factory farming, and I want instead to say, quite briefly, why I think that this Bill is bad simply as a piece of rating legislation.
My first objection is that it is retrospective in its effects; indeed, Clause 1(5) was specifically introduced to make it retrospective. I am quite certain that most noble Lords share my dislike in principle of retrospective legislation, and I think that the Government's arguments in respect of this are particularly thin. Mr. Graham Page, who revels in the minutiae of rating, explained to another place that one only condemns retrospection if it creates a retrospective liability, or confiscation, or a burden, and not if it awards a benefit. But the point is that if some ratepayers pay less, other ratepayers have to pay more and I think it is wrong for the Government to have made this measure retrospective.
What it amounts to is that they have decided to help their factory farming friends at a most inauspicious time; and it is inauspicious because the average rate increase this year is somewhere in the
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neighbourhood of three old shillings in the pound, or 15p. It is also a year in which the yearly increase in the domestic element of the rate support grant—the method which the last Government devised to protect ordinary householders —has been reduced by half, in spite of all the present Government's complaints at what they regarded as our niggardly treatment of domestic ratepayers in the last Parliament. I think that to introduce this further measure of derating is very unjust to the domestic ratepayers and, at the same time, unfair to the Government's friends in the local government field who have been sacrificed to the factory farming interests, and who have legitimate ground for complaint against their own Government.
My second objection is about the absurdity of the definition. I think it can be summed up by asking: when is a non-railway a railway? The Bill goes out of its way to emphasise that a railway which no longer has any rails is, nevertheless, a railway; and, of all the complicated definitions, Clause 2(4) states:
"A building is not an agricultural building by virtue of this section unless it is surrounded by or contiguous to an area of agricultural land (as defined in the principal section) which amounts to not less than five acres; but in determining for the purposes of this subsection—

(a) whether a building is contiguous to or surrounded by an area of agricultural land; or

(b) whether an area contiguous to or surrounding a building is an area of agricultural land and what is the size of such an area;

there shall be disregarded any road, railway or watercourse, any agricultural building (as defined in the principal section of this Part of this Act) and, if occupied together with the first-mentioned building, also any other building and any land which is not agricultural land."
That is a really full definition—I think probably too full a definition. It really is quite remarkable that it should have been necessary to provide in the Bill that,
"railway' includes the former site of a railway from which railway lines have been removed."
It transpired in the course of debate in another place that a watercourse can include a tidal estuary, and it may well be that one can have agricultural land in the Liverpool Docks or in Cardiff, because it is contiguous to a waterway

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of that kind. I should like to ask the noble Lord whether it is true that, provided a building is used solely for the keeping or breeding of livestock, it need not be situated on agricultural land to qualify for relief; it need only, under Clause 2(4), be contiguous to five acres of agricultural land and it may be separated from that land by a road or railway. Is it not also true—and this is. I think, even more surprising—that there is no requirement that the building and the land to which it is to be contiguous should be in common occupation or common ownership, or that there should be any connection between the agricultural operations carried out on the land and those carried out in the building? I think that the Government have produced a nonsense in trying to spell out this definition in the way that they have done.
My final objection is that this is a further erosion of the rating principle which I think is made, in spite of what the noble Lord said in his concluding remarks, at an absurd moment when the Green Paper is on the way and when we should have it later this year. There is nothing urgent about the need for the Bill which the noble Lord has introduced and it would have been much more sensible, in my view, to have taken it at the same time as the Green Paper on local government finance. In the circumstances, it is not unnatural that the local authority associations—or at least two of them —have reacted very badly to this Bill. The Urban District Councils Association regard it, as I do, as a further erosion of the rating principle and they qualify that by saying this. I quote from a letter which they issued in February:
" We say yet 'a further erosion' because the Government have it currently in mind to reduce by one-half the part of the rateable value of mineral hereditaments which is attributable to the occupation of land for the purpose of winning and working, grading, washing, grinding and crushing of minerals."
The Association of Municipal Corporations has reacted even more strongly against this proposal. After quoting the Conservative Party's Election Manifesto, the Association says that it is opposed to the Bill in principle. I hope that your Lordships will have had an opportunity of studying the A.M.C.'s document Reform of Rating, issued in November last year. It is, I think, an invaluable document in clearing one's mind on the
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financial requirements of local authorities. I certainly share the view of the A.M.C. and also of the Redcliffe-Maud Commission that rates are almost certain to continue as the main source of locally collected revenue. Everybody dislikes rates but nobody has yet come up with a viable alternative, and I have much sympathy with A.M.C.'s view that all encumbrances which have the effect of eroding the basis of rating should be abolished. Derating in fact—and I think this is the basic argument against this Bill—narrows the local authorities' tax base and I want local authorities to have as much financial independence as possible.
It is interesting to look back to the fact that as long ago as 1929, when the Government issued a White Paper on the Local Government Act passed that year, the White Paper said:
"The most important effect of the derating proposals on the position of the individual local authority is clearly the narrowing of the basis of taxation available to that authority, which necessarily involves a greater or less impairment of the capacity to meet considerable fluctuation in certain classes of expenditure inevitable from time to time. This is a matter of less significance in the case of larger authorities or of those whose resources are drawn from a wide area but is of the greatest importance in the case of smaller and financially weaker authorities."
I think that one must accept the situation against the background of agricultural Berating, derating which began, I think I am right in saying, in the Public Health Act of 1875, was continued in the Agricultural Rates Act 1896 and again in 1923, and again in the case of the Local Government Act 1929, to which I am happy to say that my father led the opposition in another place. In the face of this long history, it would obviously be extremely difficult to rerate all agricultural land, but I am sure that the A.M.C. are right in saying that they have no doubt that industrialised farming should be rated and should not be derated.
For those reasons, my Lords, I think that this is a silly Bill. I think it is introduced for an unacceptable purpose. So far as its retrospective effect is concerned it has been pushed through with unjustifiable haste, and I believe that it may well cause damage to the structure of local government. Interpreting the quaint fact that in this country, if a

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Party persuades three out of ten electors to vote for it it has a mandate, it may be argued that the Government has a mandate for this Bill. With that, my Lords, I leave it.
7.55 p.m.
LORD BALERNO: My Lords, the rates burden on Scottish livestock farmers is proportionately much more severe than it is South of the Border. One-fifth of the total rates payable on these buildings in Great Britain as a whole is paid in Scotland, despite the fact that Scotland enjoys the 50 per cent. derating on these buildings which was introduced a year ago; and I remember the arguments and persuasion we had with the noble Lord, Lord Hughes, on this subject. Perhaps that is the reason why Part II of this Bill, dealing with Scotland, is half as long again as Part I which deals with England.
Steadily increasing pressures for greater efficiency in the production of livestock have caused major changes in the methods of husbandry. The factor with which I have been most concerned for about fifty years is the efficiency of live weight gain, which one can also call the economy of feed consumption. It was my colleague, Dr. Alan Greenwood, of the Poultry Research Department in Edinburgh, virtually its founder, who first demonstrated the importance of the controlled environment in the economic production of livestock. The valuation authorities called the consequent developments factories, and put them on the valuation roll despite the fact that they were situated in the heart of the country and in not a few cases were run jointly by a group of farmers. That is why I welcome the statement by my noble friend Lord Sandford regarding the sections concerning the provision for the co-operation of farmers in this matter. It is with units such as these that the farmer, or group of farmers, can most easily meet changes in the pattern of consumer demand that is of fundamental importance in the future feeding of the human population.
Because they have seen enterprising fellow farmers having to close down intensive operations owing to the high incidence of rates, other farmers have decided against the use of progressive methods over a considerable range of
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livestock production activities. Derating is available on buildings only if they are used in a manner which was appropriate, effective and sensible up to twenty years ago, but which are now obsolescent. Factory farming, my Lords, is an emotive phrase, and I question whether the noble Lord, Lord Greenwood, appreciates that any abuse of or cruelty to animals is taken care of by other legislation, and that in any case no true farmer will ever make a profit if he keeps his animals under cruel conditions. So far as that is concerned, intensive farming need not necessarily be factory farming. One hopes that factory farming, where this emotive phrase is used, is on its way out—it hardly had come in.
I therefore welcome this Bill because it will give a real stimulus to production and do away with all the petty anomalies, some of them extremely local, which have borne unevenly on farmers in different parts of the country. I see that in another place there has been a discussion of the word "livestock". I congratulate the Government on accepting a clear-cut definition of the two great zoological classes of mammalia and aves—mammals and birds—and, with respect to the noble Lord, Lord Beswick, opposite, I want to say how very glad I am that they have not used the word "creatures". The traditions of animal legislation in this country are to use the word "animals", and not to use the word "creatures". This is a matter in which I am glad the new Government have made this substantial scientific advance.
My Lords, this is a tremendous improvement in animal legislation, because, as I say, the definitions were becoming quite illogical. There are, however, three examples of animals outside these two great classes which I would submit for consideration to my noble friend. First, there are the bees—and he made mention of these. Naturally, bees are livestock and are free to roam where they wish; but there are the hives, and there may be ancillary buildings in connection with them. I understand that consideration is being given to the question of bees, and I hope that there will be an Amendment put down on the Committee stage.
The second class comprises fish, both fresh water and salt water fish. I question whether the present Government

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really appreciate the tremendous developments that there may be in fish farming—growing fish primarily for food in this, country. Already overseas—and I would say most particularly in Scandinavia—fish farms are of major importance, and not merely provide a contribution to the human food of their own country but are also an important export to other countries. If you are going in for fish farming, you can only do it from a secure base, and some tanks for the breeding of fish are as much buildings as are swimming pools. Therefore, these should be distinguished, and in my submission should be de-rated. Almost invariably the land on which they are located is agricultural land, even if it supports only a few black-faced sheep. I would certainly take issue with my noble friend Lord Sandford that fish cannot be agriculture. They may indeed be a form of culture.
LORD BESWICK: My Lords, am I right in understanding, therefore, that if this suggestion were accepted and fish were included, the noble Lord himself would move an Amendment to delete the word "animal" and substitute the word "creature"?
LORD BALERNO: No, my Lords. What I was considering one might do was to revert to the old Animals Act of more than 100 years ago, and come down to vertebrates, because the farming of frogs as well (provided they were for food, of course) would come within the terms of the Bill. Thirdly, as the noble Lord, Lord Beswick, may well anticipate, there are crustacea, more particularly the lobster. Here again, very substantial developments are taking place in the deliberate culture of the lobster. I would suggest that these three cases can all be dealt with by amendment of the Act of 1956, as you will find in Clause 7 of the Bill, which relates to Scotland, where the fact that ponies are on the land does not necessarily mean that it ceases to be agricultural land.
My Lords, I welcome the Bill. I look forward to some possible improvements to it. It is a Bill which is designed to keep up to date with farming developments. The suggested improvements that I would make to it are anticipatory of further developments in the not-too-distant future.
8.6 p.m.
LORD NUNBURNHOLME: My Lords, first of all I should like to say that I think this Bill has been wrongly named. It is not a rating Bill: it should be a de-rating Bill. Speaking as a farmer, I welcome the Bill, but as a ratepayer in the rural district of Tenterden, Kent, I do not like it. Our total rateable value in Tenterden rural district is £227,000: the population is 8.000: the number of rateable properties is 3,500; and the rates from agricultural buildings amount to £5,000. The council will be the loser by between £2,500 and £3,000 if this Bill is passed in its present form. The rates will therefore have to go up by somewhere between 75p and 100p per rateable property, or about 1 per cent.
Another part of the Bill that I do not like concerns the definition of five acres in Part I, Clause 2(4). For a company to be de-rated seems wrong. This lets in large commercial undertakings, without their paying any rates. They may be producing food, but are in no way connected with the feed produced for livestock from adjacent land. They may be only a packing station. My suggestion, after having consulted with the Rural District Councils Association, is that the de-rating should apply only to farmers with general agricultural use of the buildings, and that if in doubt the rating officer should apply to the local Ministry of Agriculture office for advice. I will endeavour to introduce an Amendment to this effect on Committee stage. I should like to thank the noble Lord, Lord Balerno, for including fish, and also frogs. I live on the Royal Military Canal; we have a lot of frogs down there and they are eatable.
8.9 p.m.
LORD SANDFORD: My Lords, I am grateful to the noble Lord, Lord Greenwood of Rossendale, for acknowledging that we have a mandate, which we are now fulfilling, for the introduction of this legislation. I am also grateful for his observation that this is not the moment at which to engage in a discussion on the ethics of intensive livestock farming —and I am grateful to other noble Lords who have spoken for following that advice. I must confess that if I had been in the noble Lord's position of having to oppose rather than to move the Second Reading of this Bill I, like he,

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could not have resisted the temptation to have some fun with the definitions. I think that perhaps I might well have, gone a little further than he did. But we can certainly return to them at a later stage if any noble Lord wishes.
As to the loss of rate income, this is really not a very large figure. It is only £1 million, spread over the whole of the country; and, as the noble Lord, Lord Nunburnholme, said, in his own district, which I must confess is the kind of district most affected, it is £3,000 out of £227,000. However, that is a factor not to be disregarded. I think that the noble Lord, Lord Greenwood, made rather much of the retrospective aspect. It will be a matter of only a few weeks. The intentions of the Government have been quite clear and, as he knows, it is normal practice for a change in rating made during a rating year to be retrospective to the beginning of that year. This case is no exception.
I am grateful for the general welcome from the noble Lord, Lord Balerno, for the help this Bill will give to co-operatives and farmers generally using modern techniques. I am glad that he is happy with the definitions. I repeat my reassurance about the bees. I, and all noble Lords, shall be intrigued to see what the Beswick-Balerno co-operative produces in the way of changes to deal with fish, frogs, lobsters and other crustacea at the next stage. But, having said that, I should like to end by thanking all noble Lords for their general welcome of this Bill.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

TOWN AND COUNTRY PLANNING (MINERALS) REGULATIONS 1971
8.13 p.m.
LORD SANDFORD: My Lords, I beg to move that these Regulations be now approved. When comprehensive planning control was introduced in 1947 it was recognised that mineral working involves special problems and that in some respects it would be necessary to adapt and modify general planning law in relation to minerals. Successive regulations have been made and approved by your Lordships from time to time. The most recent were the Town and Country
900
Planning (Minerals) Regulations 1963, which followed the consolidating Town and Country Planning Act 1962. These are now to be replaced by the Regulations which are before your Lordships for approval.
The need for fresh regulations stems from the Town and Country Planning Act 1968, which changed some of the provisions referred to in the 1963 regulations dealing with various enforcement powers and procedures. With the exception of Regulations 6 and 7, there is nothing new in substance in the latest Regulations, and I need not detain your Lordships with a description of these.
But the exception is an important one. Regulation 6, to which Regulation 7 is ancillary, modifies Section 65 of the Town and Country Planning Act 1968 so far as mineral working is concerned. The purpose of Section 65 was to deal with redundant planning permissions—"shake them out" as the phrase goes. Over the years there had been a steady build-up of permissions for various forms of development, some of them no doubt highly speculative, others possibly better grounded but not pursued for one reason or another. The intention was to clear the decks and make it easier for local planning authorities to assess the reality of unexercised permissions.
Section 65 of the 1968 Act attacks this in two ways, one concerned with the past and one with the future. Subsection (1) deals with planning permissions granted before April 1, 1969. Any such permission will lapse on March 31, 1974, unless the permitted development has begun by then. Subsections (2) and (3) deal with permissions given from April 1, 1969, onwards. These permissions will give the developer five years to get started, or such other period as may be specified in the permission. In other words, there is a fixed five years period for pre-April, 1969 permissions, but a more flexible arrangement for later permissions. The Regulations now before your Lordships are concerned only with subsection (1), past permissions—that is to say, they modify the general law in that respect.
Regulation 6 will give mineral operators an extra five years in which to begin operations under permissions granted before April 1, 1969. Any

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unexercised mineral working permissions will not lapse, therefore, on March 31, 1974, as they otherwise would, but will run until 1979. Of course if the development begins before April 1, 1979, it will be free to continue after that date. Section 65 is concerned only with the starting of development, not with its completion.
When the local authority associations were consulted about the proposed modification they were far from unanimous in approving the five-year extension for minerals. I think it would be fair to sum up their reactions as a grudging acquiescence. It was quite clear that any period going beyond 1979 would not have been acceptable to them, since it would have militated against their desire to see the end of a number of quite unreal and speculative permissions. On the other hand, the Confederation of British Industry made it clear that they would have liked much longer than ten years—even complete exemption, as was proposed during the Committee stage of the 1968 Town and Country Planning Bill in another place.
The Secretary of State recognises that mineral operators must plan ahead and must have reserve land, especially when heavy capital investment is involved. Indeed, it is in everyone's interest that the mineral industries should look well ahead, as should the local planning authorities. The conferences dealing with sand and gravel production in South-East England, launched by our Department, bear witness to the importance he attaches to foresight and the need to steer mineral working to the places where it will least harm amenity, while ensuring future supplies of essential minerals. But it is essential to bear in mind the whole point of Section 65—to clear the board of clutter so that realistic proposals can be looked at afresh. It is quite impracticable to sort the sheep from the goats in any other way. No one can say with authority that operator "A" means business, but operator "B" never intends to work the land.
As it is, mineral operators will now have plenty of time to make new applications for land which they do not expect to start working before April 1, 1979. And, although it is a minor point, the procedure for re-submitting an application for a lapsed permission has been simplified, so that fresh application forms
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and plans are not required so long as sufficient information to identify the lapsed permission is supplied.
I understand that there may be some apprehension lest new permissions carry more onerous conditions than the earlier ones. This is a distinct possibility. Some early permissions were very lax about restoration, and it will be to the general good to tighten up where it is justified. On the other hand, conditions could equally well be relaxed in the light of experience. 'Operators who are aggrieved by conditions, like operators who are refused permission, have a right of appeal to the Secretary of State. It would be unrealistic to assume that Section 65 will be allowed to bring essential workings to a halt
My right honourable friend will be there to hold the ring and to see fair play, and in any appeal against new conditions he will obviously have regard to both amenity aspects and producers' economic needs.
For the comfort of the mineral industries I should add that the Secretary of State proposes to send a circular to local planning authorities saying that it should not be assumed that the substitution of ten years for five years for pre-1969 permissions means that ten years win be a standard period to allow in future mineral cases.
Each application will need to be considered on its merits, and authorities must have regard to the operators' reasonable requirements in planning his production and investing in plant. A period of substantially more than ten years may be justified in certain cases, just as on occasions a shorter period may be proper.
I therefore hope that the five-year extension provided for in Regulation 6 will commend itself to your Lordships as a fair modification of the general rule laid down in the Act of 1968 and as one which makes a reasonable compromise between the needs of the industry and the success of the shake-out operation. I beg to move.
Moved, That the Town and Country Planning (Minerals) Regulations 1971 be approved.—(Lord Sandford.)
8.20 p.m.
LORD GREENWOOD OF ROSSENDALE: My Lords, I think it would be wrong to take up your Lordships' time

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by going in any detail into the proposals in the Statutory Instrument, but I should like to say that I broadly support what the noble Lord, Lord Sandford, has said. I have taken the views of the Association of Municipal Corporations and the Urban District Councils Association, and also of the C.B.I. I refreshed my memory about the discussions which took place, both with industry and also with the associations during the time that the 1968 Act was going through Parliament, and my recollection confirms what the noble Lord has said; that although there was pressure from the mining interest at the time the local authorities associations reluctantly acquiesced in what was proposed.
My Lords, I think that these Regulations represent a reasonable compromise between two points of view, and that there is sufficient flexibility and scone for discretion on the part of the Secretary of State to make this a perfectly fair and workable proposition. I am glad to hear that the Secretary of State is to issue a circular to the industry, and I think it only right that I should say how greatly one must be impressed at the way in which the best of the sand and gravel merchants have reinstated the gravel and sandpits for which they have been responsible. Some are extraordinarily good, and I believe that reasonable co-operation between the local authorities and the mineral extractors can make this a most valuable instrument. I am grateful for the clarity and the brevity with which the noble Lord explained the matters to your Lordships' House.
LORD SANDFORD: My Lords, before the Question is put, I wonder whether we could just get it clear, for the Record, that the circular is for the benefit of the mineral operators, though it is a circular to the local planning authorities.
On Question, Motion agreed to.

TOWN AND COUNTRY PLANNING (MINERALS) (SCOTLAND) REGU- LATIONS 1971.
LORD MOWBRAY AND STOURTON LORD MOWBRAY AND STOURTON rose to move, That the Town and Country Planning (Minerals) (Scotland) Regulations 1971, be approved. The noble Lord said: My Lords, the Town and Country Planning (Minerals) (Scotland)
904
Regulations 1971 are in all respects similar to the Town and Country Planning (Minerals) Regulations 1971 which have just received your Lordships' approval. Their effect is indeed precisely the same. The differences in appearance, so far as they do not arise from minor differences in tradition and drafting, and in the presentation of the Regulations result from the fact that planning legislation was consolidated for England and Wales in the Act of 1962, whereas, so far, there has been no consolidation of planning legislation in Scotland, although that is a matter which we hope will be rectified in the foreseeable future. Because we have not consolidated our planning legislation, these Regulations have to operate on the Acts of 1947, 1954 and 1969, and that is the explanation of their superficial difference in appearance.
Since, in effect, the substance of the Regulations is, as I have said, precisely the same as that of the English Regulations which your Lordships have just approved, I do not think it necessary for me to detain your Lordships with a long explanation. I therefore beg to move that the Town and Country Planning (Minerals) (Scotland) Regulations 1971 be approved.
Moved, That the Town and Country Planning (Minerals) (Scotland) Regulations 1971 be approved.—(Lord Mowbray and Stourton.)
On Question, Motion agreed to.

MOTOR VEHICLES (INTERNATIONAL CIRCULATION) AMENDMENT ORDER 1971
8.24 p.m.
LORD MOWBRAY AND STOURTON LORD MOWBRAY AND STOURTON rose to move, That the Draft Motor Vehicles (International Circulation) Amendment Order 1971, laid before the House on March 25, be approved. The noble Lord said: My Lords, this Order is made under the Motor Vehicles (International Circulation) Act 1952. The general purpose of Orders made under this Act is to modify existing enactments where such modifications are necessary to enable us to comply with international agreements to which we are a party. The present Order is an Amendment Order, the purpose of which I will explain as briefly as I can.
Article 5 of the Motor Vehicles (International Circulation) Order 1957, as amended, contains provisions which exempt motor vehicles brought here temporarily from abroad from payment of vehicle excise duty, subject to certain conditions. This exemption stems from our obligation under the Geneva Convention for the taxation of road vehicles in international traffic. The main conditions attached to the grant of exemption for vehicles from excise duty is that the vehicle is exempt from road customs duty. For this reason the exemption from vehicle excise duty afforded to visiting vehicles is expressed as being conditional on release being granted under the appropriate customs instrument.
In the case of private cars, in Article 5(21(i) of the present Order this Instrument is referred to as the Customs Duty (Personal Reliefs) No. 2 Order 1968. However, that Order has now been revoked and replaced by the Customs Duty (Personal Reliefs) Order 1970. The new Article 5, which is inserted in the 1957 Order by Article 4 of the present Order, therefore refers to the 1970 Order instead of to the 1968 Order.
My Lords, there is a practical effect here to which I should draw attention. Part 7 of the 1970 Order affords relief from customs duty to vehicles temporarily imported by servicemen of visiting Forces. Because of this exemption, such vehicles should become entitled to exemption from the vehicles excise duty for a maximum period of a year. This, as I. have explained, follows our commitment under the 1956 taxation convention which requires vehicle excise exemption to be given where there is exemption from customs duty. The second change made to the terms of Article 5 of the 1957 Order is that the new paragraph 3 conveys the formal exemption from vehicle excise duty to vehicles coming here temporarily from
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the Isle of Man. The customs Orders do not apply to such vehicles because movement to and from the Isle of Man is not regarded as importation or exportation. Isle of Man vehicles do not therefore benefit from the general exemption based on customs exemption. It has been the practice for many years to exempt these vehicles from vehicle excise duty when they come here temporarily. This exemption is now being put on a formal basis.
The only other change of substance is that the fees for the issue of international driving permits and international certificates for motor vehicles to British motorists going abroad is raised from 53p (or, as my noble and learned friend the Lord Chancellor would say, "10s. 6d." because he prefers that) to £1. These fees have previously remained unchanged for many years—in fact since 1930, in the case of the driving permit. The motoring organisations who issue these documents on behalf of my right honourable friend have pointed out the considerable increase in costs in handling, storing and issuing these documents, and this modest increase in fees seems entirely justified.
The other changes made by this Order are purely textual ones, such as the dropping of references to international documents no longer in use and the replacement of references to the Vehicle Excise Act of 1962 by references to the 1971 Act which was, as the House will know, a consolidation measure. This, my Lords, is a useful, if modest, measure which can be regarded as a modernisation exercise, and I commend the Order to the House.
Moved, That the Draft Motor Vehicles (International Circulation) (Amendment) Order 1971 be approved.—(Lord Mowbray and Stourton.)
On Question, Motion agreed to.

LANCASHIRE COUNTY COUNCIL (GENERAL POWERS) BILL [H.L.]
Reported, with Amendments.
NATIONAL SAVINGS BANK BILL [H.L.]
Returned from the Commons agreed to.
RENT (SCOTLAND) BILL [H.L.]
Returned from the Commons agreed to, with an mendment: the said Amendment to be printed.

ATTACHMENT OF EARNINGS BILL [H.L.]
Returned from the Commons agreed to, with Amendments: the said Amendments to be printed.
House adjourned at twenty-eight minutes past eight o'clock.