Sitting of 6 March 1973

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

  GLAMORGAN COUNTY COUNCIL BILL [Lords]
  Queen's Consent, on behalf of the Crown, signified.
  Read the Third time and passed, with Amendments.

  HUMBER BRIDGE BILL
  Read the Third time and passed.
ORAL ANSWERS TO QUESTIONS
  SOCIAL SERVICES

    In-Patient Costs
    Mr. Carter-Jonesasked the Secretary of State for Social Services what is the average cost per patient in intensive care units, surgical departments of hospitals, acute departments in large general hospitals, geriatric wards, mental illness and mental handicapped departments; and if he will make a statement.
    The Under-Secretary of State for Health and Social Security (Mr. Michael Alison): Information is not available in the form requested. The patient costs collected summarise the activities of each hospital as a whole, classified according to its overall type.
    Mr. Carter-Jones: While thanking the Minister for that non-answer, may I ask whether he is not convinced that the amount involved is a substantial sum? Will he consider whether it is possible to keep patients out of hospital, thereby saving considerable sums of money, and sharing such savings among local authorities and the relatives of patients by pro-
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    viding massive support in technical aid, access and money so that these people can lead a dignified life at home when they so wish?
    Mr. Alison: I take the hon. Member's point. He will have noticed from the public expenditure White Paper that the rate of increase in resources allocated for the personal social services operated at local level is increasing at about three times the rate of public expenditure as a whole.
    Dr. Stuttaford: Would my hon. Friend agree that the fact that his Department has recently decreed that items hitherto placed on the revenue account are now to be charged to capital account means that capital expenditure on hospitals will fall by 10 per cent. in the next few years? Is he aware that for the East Anglia Regional Hospital Board that is equivalent to sacrificing one district general hospital?
    Mr. Alison: I cannot reconcile my hon. Friend's figures with the fact that the total capital sum to be spent on hospital building in the present five-year public expenditure period is 50 per cent. greater than that spent by our predecessors.

    Social Workers (Training)
    Mr. Dormandasked the Secretary of State for Social Services what guidance his Department has given about the training of social workers.
    The Secretary of State for Social Services (Sir Keith Joseph): Promotion of social work training is the responsibility of the Central Council for Education and Training in Social Work, whose interim plans envisage an expansion in the output of qualified staff from training courses of about 50 per cent. between now and 1976. In asking local authorities for 10-year development plans for the social services, I have suggested that in forecasting their training programmes they should assume a substantial and continuing expansion in output of qualified staff throughout the period of the plan.
    Mr. Dormand: Does the right lion. Gentleman agree that there will be a vast increase in the number of social workers in the next few years? In view of this and the wide variety of the work involved, does he not think that the time has now arrived to take a broad look at

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    the whole of education and training for social workers? Will he in the first place take steps to call a conference of all interested parties, which would include the Department of Education and Science and representatives of social workers, to assess future needs and in particular to stop the fragmentation of training and education which is already taking place?
    Sir K. Joseph: The Central Council is an independent body and I think that the best thing I can do is to suggest that the hon. Member might meet the chairman or officers of the council.
    Mr. Edward Taylor: Does my right hon. Friend agree that one way in which we could expand social worker recruitment would be to remove uncertainty among medical social workers about their future under the health service reorganisation? Has any progress been made in this connection?
    Sir K. Joseph: Yes. I believe that I have heard and digested all the arguments on both sides and I hope to come to a decision very soon.
    Mr. Grimond: Can the right hon. Gentleman tell us how the supply of trained social workers is keeping up with the growing demand?
    Sir K. Joseph: There is an almost in exhaustible demand for trained social workers. The training programmes are expanding as fast as is practical but there are not enough trained social workers coming out yet.

    Community and Cottage Hospitals
    Mr. Moateasked the Secretary of State for Social Services when he expects to be able to publish the results of his study on the future rôle of community hospitals.
    Mrs. Knightasked the Secretary of State for Social Services whether he is now in a position to make a statement on the future position of cottage hospitals.
    Sir K. Joseph: I cannot at present add to my reply to my hon. Friend the Member for Billericay (Mr. McCrindle) on 6th February.—[Vol. 850, c. 60.]
    Mr. Moate: Does my right lion. Friend agree that many small local hospitals have a rôle to play in strengthening the
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    links between general practitioners and the hospital service, and also in providing much-needed local minor casualty services? When he presents his report, will he consider the possibility of allocating extra resources for the modernisation of many of these local facilities?
    Sir K. Joseph: The Government last year announced that, contrary to previous policy, they saw a need for the survival of a number of cottage hospitals to serve the rôle of community hospitals in support of district general hospitals. That cannot be a charter for the survival of all cottage hospitals. I hope to make a statement within a relatively short time.
    Mrs. Knight: Is my right hon. Friend studying the suggestion that patients with relatively minor ailments needing fairly simple treatment are often dealt with just as well and considerably more cheaply in cottage hospitals than in hospitals of the juggernaut variety?
    Sir K. Joseph: It is the definition of what conditions are and are not suitable for community hospitals that is being discussed by me with the medical profession.
    Dr. Summerskill: Does not the right hon. Gentleman agree that the maintenance of the small community hospital encourages the concept of community care and that approximately one-third of the patients who are now in large hospitals, particularly geriatric and mentally ill patients, could be cared for in smaller hospitals which are easier to staff and usually cheaper to run?
    Sir K. Joseph: Yes. I am glad that the Labour Party has changed its view about the function of the community hospital.

    Retirement Pensions
    Mr. Leadbitterasked the Secretary of State for Social Services, taking the retirement pension for single and married persons as 100 at the date of the last increase, what are the values at the latest available date.
    The Under-Secretary of State for Social Services (Mr. Paul Dean): The value was 98·5 at January 1973.
    Mr. Leadbitter: Is the Minister aware that those figures do not reflect the serious

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    situation of old-age pensioners? Have not his right hon. Friends recently refused to help old-age pensioners with the cost of television licences and failed to protect old-age pensioners against the pressures of increasing prices? Will he therefore treat this matter with greater urgency?
    Mr. Dean: The figure I have given is entirely accurate. It means that just over 1p in the pound has been lost from the real value of the pension. As the hon. Gentleman knows, for the first time the Government are committed to an annual review of pensions.
    Sir B. Rhys Williams: Will my hon. Friend ask the Chancellor of the Exchequer when he introduces his Budget this afternoon to announce a sharp increase in earnings-related contributions to national insurance so that when the up-rating Bill is introduced in the autumn the pensioners can have a bumper increase?
    Mr. Dean: I am sure that my hon. Friend would not expect me to have a moment of glory by anticipating my right hon. Friend's statement, even if I knew what was in it.

    Disabled Persons' Vehicles
    Mr. John Hannamasked the Secretary of State for Social Services if he will replace existing three-wheeled disabled vehicles with passenger-carrying four-wheeled vehicles, in view of further representations made on the subject.
    Mr. Alison: This and other questions relating to the vehicle service will be considered in the light of the report on the mobility needs of disabled people expected later this year.
    Mr. Hannam: Does my hon. Friend agree with the conclusions of the survey recently carried out by the Devonian Orthopaedic Association, which showed that of 51 three-wheelers driven by disabled drivers 95 per cent. were found to be unsafe in windy conditions, more than 95 per cent. were found to be dangerously slow on hills and an average of 13 breakdowns occurred in every 4,000 miles? Does not this demonstrate that the three-wheeler is unsafe, unreliable and antisocial and should be changed as a matter of priority?
    Mr. Alison: It is not beneficial to the large number of people who use and enjoy using three-wheelers, and have done so for many years, to cast unnecessary doubt upon the reliability or safety of these vehicles. They are safe vehicles which, if regularly maintained and properly looked after, give good service.
    Mr. Ewing: Does not the Minister agree that the provision of three-wheeler vehicles is an example of miserable penny-pinching? Is not the answer to stop the manufacture of three-wheeled vehicles and to supply four-wheeled vehices to provide for the travelling companionship which disabled people so vitally need?
    Mr. Alison: Some categories of disabled people can secure four-wheelers. There are some categories of disabled people who can drive only three-wheelers with their light front-wheel steering.
    Mr. Marten: I appreciate that the Government must await the outcome of the inquiry by Baroness Sharp which was supposed to be due in February. Will the Minister explain why it has been delayed and say whether, when it comes, it will be published?
    Mr. Alison: I cannot give a detailed reason for the delay, but no doubt the complexity of the subject which is being investigated has a bearing on it. The report, when available, will be published and my hon. Friend will be able to judge for himself how deeply the matter has been investigated.
    Mr. Kinnock: Is not the Minister convinced of the need for the family use of invalid vehicles? Is not the strongest argument for four-wheeled vehicles that disabled people should not be isolated from ordinary family life?
    Mr. Alison: There is no doubt a strong case for the family use of invalid vehicles. There is an even stronger case for the National Health Service to concentrate resources on long-stay hospitals, mental illness hospitals and geriatric hospitals.

    Hospital Developments (Blyth)
    Mr. Milneasked the Secretary of State for Social Services if he will make a statement on his Department's talks and discussions with Northumberland County Council, Blyth Borough Council and the

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    various hospital boards concerned in future hospital developments in Blyth and the retention of the existing hospitals.
    Sir K. Joseph: The consultations have been undertaken, as is normal practice, by the Newcastle Regional Hospital Board. I shall consider fully the representations and the board's recommendation before reaching a decision.
    Mr. Milne: I thank the Minister tor that reply, but will he bear in mind the view expressed to him by the Blyth League of Hospital Friends which has done excellent work for the patients of Blyth hospitals and whose knowledge of local hospital needs surpasses that of the hospital boards, and also the views of the Beulah House Association which has fought to retain this hospital or to secure an alternative one?
    Sir K. Joseph: Yes, Sir.
    Mrs. Monks: Are similar consultations going on with the Lancashire County Council?
    Sir K. Joseph: I do not have the details in my mind to enable me to answer my hon. Friend's question. The regional hospital boards must carry out consultations before making proposals for any closure.

    Industrial Disputes (Benefit)
    Mr. Bruce-Gardyneasked the Secretary of State for Social Services if he will make a statement on the progress of his investigation into the payment of supplementary benefit in industrial disputes, indicating when he now expects to complete it.
    Sir K. Joseph: The Government's review is continuing and I cannot forecast a date for its conclusion.
    Mr. Bruce-Gardyne: Is my right hon. Friend satisfied that the sight of strikers striking in defiance of an order making a strike illegal under phase 2 of the counter-inflationary policy and receiving subsidy from the taxpayer to prolong that strike will appear entirely logical to the mass of the community? Will he confirm that it is likely that such strikers in phase 2 will also receive subsidised butter supplies?
    Sir K. Joseph: The question of subsidised butter is still being considered by Ministers. It is not the striker who receives the benefit—[HON. MEMBERS: "Hear, hear."] I apologise to my hon. Friend for drawing cheers from an unwelcome quarter on this subject. It is not the strikers who draw benefit, except in the rarest case; it is the wives and children. It still remains a matter of urgent public concern that £8 million of the taxpayers' money, coming to some extent from relatively poor people in indirect taxation, went for this purpose last year. That is why the review by Ministers is so important.
    Mr. Wellbeloved: Will the Minister bear in mind that it is in the national interest that there should be reconciliation and co-operation rather than confrontation and conflict, and that the spirit of the British working class will not be broken by petty restrictions on payments to the wives and families of men fighting for their democratic rights?
    Sir K. Joseph: Yes, but I hope that the hon. Gentleman will preach the same doctrine to all concerned.
    Mr. William Clark: Does not my right hon. Friend agree that it is illogical for unions to bring men out on strike and refuse to give them strike pay and that it is nonsensical that the taxpayer should adopt the rôle of the trade unions and pay strike pay? Surely there should be a notional deduction from supplementary benefits to take account of strike pay which should be paid.
    Sir K. Joseph: The possibilities inherent in my hon. Friend's supplementary question are among those being considered by Ministers, but Ministers have to be sure that any proposal that is introduced is workable and will not harm wives and children.
    Mr. Heffer: The right hon. Gentleman should not apologise for drawing Opposition cheers. He is only explaining to his hon. Friends in words of one syllable exactly what the situation is. Is it not clear to the right hon. Gentleman and his right hon. Friends that the reason why the Government have nad to pay out so much in benefits this year is the absurd industrial relations policy pursued by the Government?
    Sir K. Joseph: No, I do not accept that, and I am glad to correct the hon. Gentleman. The record of payment of benefit was very high last year but so far this year has been relatively low.

    Hypothermia
    Mr. Loughlinasked the Secretary of State for Social Services if he has completed his study of the extent to which retirement pensioners are dying from hypothermia in consequence of insufficient food and inadequate heating; and if he will make a statement.
    Mr. Parryasked the Secretary of State for Social Services if he will make a statement on research into aged people dying from hypothermia directly due to lack of food and insufficient heating.
    Mr. Alison: I cannot at present add to my right hon. Friend's replies to the hon. Member for Sutton and Cheam (Mr. Tope) on 6th February.—[Vol. 850. c. 57–8. 61.]
    Mr. Loughlin: The hon. Gentleman is virtually saying that no progress has been made. Is it not true to say that literally thousands of aged people die from hypothermia each winter in consequence of a lack of food and heat? [HON. MEMBERS: "And lack of gas."] The gas strike has been on for only two or three days. [An HON. MEMBER: "Where have you been?"] I am talking about the situation that applies winter after winter. Will the hon. Gentleman speed up these investigations? May I put a suggestion to him? [HON. MEMBERS: "No. Ask a question."] This is a question. If the Under-Secretary finds difficulty in persuading his Treasury colleagues to give more money to retirement pensioners, will he ask them to consider the production of heat coupons in the same way as we had tobacco coupons?
    Mr. Alison: The hon. Gentleman refers to the consideration by the Supplementary Benefits Commission of the so-called Fox Report. It is still giving urgent consideration to whether the administration of its discretionary power to increase benefit when there are exceptional needs, including extra needs for heating, requires any alteration.
    Mrs. Knight: Would my hon. Friend consider making available a supply of
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    paper handkerchiefs to catch all the crocodile tears shed by Opposition Members, especially when we bear in mind that people in the West Midlands area are now in far greater danger from hypothermia because of the gas strike than from anything else?
    Mr. Alison: The implications of the continuation of the gas strike must give ground for concern in this context.
    Mr. John Silkin: Does the hon. Gentleman recall the British Medical Journal survey of 27th January last on body temperature in the elderly?
    Sir K. Joseph indicated assent.
    Mr. Silkin: Does he recall that one of the recommendations of that survey was that the development and use of low-wattage electric blankets for people on supplementary benefit should be considered? Have any steps been taken to implement this recommendation?
    Mr. Alison: We are considering every aspect of Dr. Fox's report and we are asking him to come to the Department so that we may talk to him directly and personally. Serious potential safety hazards are involved in the use of even low-wattage electric blankets.

    Local Authority Social Services
    Mr. David Clarkasked the Secretary of State for Social Services if, in his actions designed to promote rate restraint, he will bear in mind the need to preserve the work of local authority social services departments.
    Mr. Alison: In considering the rate of growth of local authority expenditure, my right hon. Friends and I will naturally bear in mind the requirements of the personal social services.
    Mr. Clark: Does the hon. Gentleman realise that many people are worried that one result of Government pressure on local authorities could be a cutback in home help and domiciliary services? Will he give the House a guarantee that he is prepared to monitor the activities of local authorities to ensure that people do not suffer from the lack of domiciliary home help and other services?
    Mr. Alison: I see no prospect of any such cutback as the hon. Gentleman postulates. In fact the White Paper on

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    Public Expenditure lays down a substantial rate of increase in the public resources allocated to personal social services at local level between now and 1976.
    Mr. Winterton: Another sphere of local authority responsibility in social service departments is the provision of Part III accommodation. Is my hon. Friend aware that in many areas this accommodation is in extremely short supply, and what action is he prepared to take to remedy this serious shortcoming?
    Mr. Alison: Substantial steps are being taken. My hon. Friend will be interested to know that loan sanction approvals for homes for the elderly increased by 50 per cent. between the last year of Labour Government and last year.
    Mr. John Silkin: In line with the circular sent to local authorities about the appointment of new local government social services staff, has the Secretary of State received any representations from the directors of social services since it would appear to be the almost universal impression that there is an intense shortage of trained social service workers and a growing work load?
    Mr. Alison: This matter goes rather wider than the original Question. My right hon. Friend has said that he recognises the existing shortage of trained social workers. We are doing everything possible to accelerate the process. I will write to the right hon. Gentleman about representations.

    Secure Accommodation (Convicted Girls)
    Mrs. Renée Shortasked the Secretary of State for Social Services what progress local authorities have made with the provision of secure accommodation for girls convicted of offences.
    Sir K. Joseph: I understand the hon. Member to be concerned with girls between 14 and 17 who may temporarily be remanded to a prison or remand centre if the court certifies that the girl is too unruly to be safely committed to the care of a local authority. A considerable expansion of secure accommodation for girls is in hand or projected.
    Mrs. Short: Is the right hon. Gentleman aware that public opinion has been
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    incensed at the cases which have occurred during the last year of girls of the age he mentioned being committed to Holloway prison? Is he also aware that the Home Secretary, in reply to a similar Question that I put to him on this matter recently, said that he could not guarantee that cases of this kind would not occur in future? What has the Secretary of State to say about the situation? Can he say when the accommodation which is being prepared is likely to be ready and available?
    Sir K. Joseph: Some more accommodation will become increasingly available in the next two or three years. The hon. Lady is right to be concerned about this matter, and we are providing accommodation as soon as possible.
    Mr. Burden: Is it not a fact that although the girl in question to whom I think the hon. Lady refers—
    Mrs. Short: How can the hon. Gentleman know what I have in mind?
    Mr. Burden:—was committed to Holloway prison, she was not accepted at the prison when she arrived?
    Sir K. Joseph: I am sure my hon. Friend is right about that one case, but I believe that the hon. Lady had in mind a girl who was admitted to Holloway.
    Mr. Callaghan: Has the Secretary of State in mind the case of a girl about whom I have been in communication with the Home Secretary—a girl who was convicted three years ago and who at a later stage will need to be transferred to another institution? Since it looks as though that girl may have to go to prison, is it not obvious that it is time we had secure accommodation for that type of girl?
    Sir K. Joseph: It is agreed that we need more secure accommodation. More is now being built and more is projected.

    Private Hospital (Manchester)
    Mr. Marksasked the Secretary of State for Social Services what proposals have been made for the building of a private hospital in Victoria Park, Manchester; and if he has examined the likely effect on nursing staffing in the area.
    Sir K. Joseph: I understand that the City of Manchester Planning Department

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    has received an application for the development of a private hospital in Victoria Park, Manchester. The commissioning of such a hospital should not, at present, affect the general situation over the recruiting of nurses in the area.
    Mr. Marks: Is the right hon. Gentleman aware that there is a staffing problem and there are also very long lists of patients awaiting treatment at local hospitals? When applications are made for private hospitals to be built, does he examine the situation which that will possibly create?
    Sir K. Joseph: My approval is not required for the building of private hospitals. I am concerned about waiting lists, and I hope that in the next few months I shall he giving advice to hospital authorities about how to reduce them.
    Mr. Kaufman: I wish to support what was said by my hon. Friend the Member for Manchester, Gorton (Mr. Marks). Is the right hon. Gentleman aware that this project is planned in Victoria Park which is in my constituency and which is a stress area? Does he appreciate that a hospital of this kind would not be used by the overwhelming majority of my constituents because they could not afford to go there? Is he further aware that this plaything of an ex-Tory councillor would take up land which could be used for the benefit of my constituents?
    Sir K. Joseph: It is for the local planning committee to weigh all the factors that are within its right to weigh. My permission is not needed for such a hospital.

    Hearing Aids
    Dr. Vaughanasked the Secretary of State for Social Services what progress is being made in research with the development of hearing aids.
    Mr. Alison: We are considering with the Medical Research Council an overall strategy for future research into hearing difficulties, including hearing aids. Meanwhile several small but important projects are in hand.
    Dr. Vaughan: Does my hon. Friend agree that the regulations urgently need to be changed so that young people can continue to have head-worn aids under the National Health Service after they
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    leave school? Does he agree that that is a most important time for young people and young adults? It is a time when they most need to have something which is discreet and unobtrusive, but the present arrangements for chest aids are quite the reverse of this.
    Mr. Alison: I have great sympathy with the point made by my hon. Friend. We certainly do not overlook the importance psychologically of enabling youngsters to use head-worn aids. It is for that reason amongst others that we are actively looking into the possibility of issuing head-worn aids through the National Health Service.
    Mr. Pavitt: Will the hon. Gentleman introduce a little urgency into this problem in view of the fact that the report which he mentioned was published as long ago as last April? Will he do something about the aural aids which cost only about £2 more than the Medrescos and which, if developed with the help of the Post Office, would give deaf people an advantage at something like one-tenth of the commercial price they have to pay?
    Mr. Alison: We are treating this matter with a sense of great urgency and enthusiasm in my Department. The hon. Gentleman knows that the question of hearing aids is closely integrated with epidemiological studies and clinical questions. One is bound to hasten slowly.
    Mr. Costain: Does the current research include investigations into hearing aids that are sometimes sold to the public at high prices so that their price can be related to their efficiency?
    Mr. Alison: I think my hon. Friend will know that the Consumers Association has published regular reports evaluating the benefits, advantages or disadvantages of hearing aids provided privately.

    Disabled Children (Financial Assistance)
    Mr. Astorasked the Secretary of State for Social Services whether he will make a further statement as to the progress being made by the Rowntree Trust in distributing the £3 million provided starving their wives and children?
    Sir K. Joseph: The trust's arrangements are now well advanced and it will be able to start receiving applications from

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    families on 2nd April, in the first instance from those whose children are aged between 10 and 15. It has appointed a chief officer to administer the fund and a consultative as well as a management committee to ensure that it has the necessary expert advice.
    I am writing to local authorities and interested voluntary bodies giving them information about the operation of the scheme and inviting their help.
    Mr. Astor: Is my right hon. Friend aware that the setting up of the fund was widely welcomed in all parts of the House? May I thank him for the further statement which he has been able to make? Is he aware that many of us feel that this sum of money—or even double this sum—is likely to be insufficient? Can he give an estimate of the number of children who will be eligible for support?
    Sir K. Joseph: No, I cannot at this stage. The help from the fund is intended to complement the help available from the statutory local and voluntary services. We must wait a few months to see the demand before forming any judgment.
    Mr. Carter-Jones: I accept the right hon. Gentleman's statement about the £3 million and I welcome it. If it proves, as many of us believe, to be small in relation to the problem, will the right hon. Gentleman give us an assurance that more money will be made available to meet this very real problem?
    Sir K. Joseph: No. The hon. Gentleman knows that the Government must consider a whole mass of competing priorities. I cannot give that assurance.
    Mr. John Hall: Has my right hon. Friend's attention been drawn to the results of recent research which indicates that an increasing number of handicapped children are being born to mothers who have previously had an abortion? If experience shows this research to be well founded, does it mean that we shall have to make available much more money than is now being made available to help such handicapped children, unless we change our policy on abortion?
    Sir K. Joseph: My hon. Friend has raised a question far too technical and clinical for me. If he cares to put down
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    a Question I will give him as good an answer as I can provide.

    Pensioners (Expenditure)
    Mr. R. C. Mitchellasked the Secretary of State for Social Services what proportion of the average pensioner's income is spent on food and heating at the last convenient date.
    Mr. Dean: Information is not available in the form requested, but the latest Family Expenditure Survey data shows that about 45 per cent. of average weekly expenditure for pensioner households is on food, fuel, light and power.
    Mr. Mitchell: Does the hon. Gentleman agree that the figures show that pensioners are suffering very severely from the enormous increases in food prices over the last two or three months? Is there not a need for at least the poorest pensioners to have increases in their pensions dating from 1st April of this year so that they do not have to wait until the autumn? Is there not still time for the Secretary of State to have last-minute consultations with the Chancellor of the Exchequer?
    Mr. Dean: There has been a substantial real improvement in the buying power of the pension under this Government. There is now an annual review of pensions, which takes fully into account rising prices, including food prices.
    Dame Irene Ward: I acknowledge everything that my hon. Friend says. However, can he tell me whether he is getting on with considering a special heating allowance? The increase in the price of coal, gas—when gas is available—and electricity is imposing a very great burden on the elderly, the sick and the handicapped. I am very anxious that we should devise some means to have a special heating allowance. I am looking forward to the co-operation of the Treasury and the Department of Health and Social Security in this matter.
    Mr. Dean: I can assure my hon. Friend that we are giving very sympathetic consideration to the people she has mentioned.
    Mr. Frank Allaun: While the hon. Gentleman is aware that some of us are pressing for better heat allowances, does he accept that a basic pension increase is

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    greatly preferable as so many people needing the extra allowances do not take them up?
    Mr. Dean: That may be true of supplementary pensions in some cases. It is not true, as the hon. Gentleman is aware, of the national insurance pension. With regard to heating allowances, there is a campaign which started last autumn and which is still proceeding to bring heating allowances to people's attention and to advise them about better insulation of their houses so that better use is made of the heat which is available.

    Departmental Employees (Wage Levels)
    Mr. William Hamiltonasked the Secretary of State for Social Services how many civil servants within his Department are in receipt of basic wages of less than £25 a week.
    Mr. Dean: About 40,380. This figure reflects the very high proportion of young clerical and executive staff. Many of that number—some 19,590—are on pay scales with a maximum above £25 a week, and they can expect to reach that figure between the ages of 23 and 27.
    Mr. Hamilton: Does the hon. Gentleman agree that there are many thousands of civil servants within his Department who are on basic wages substantially less than £25 a week? Indeed, some of them in local offices give out supplementary benefits in excess of their basic wages. That is a situation which will get worse under phase 2. The people at the higher figure of £25 will get no more than a £2 a week increase, which will mean a substantial reduction in the standard of living of a man on a basic wage of £25, if he has a family, over the next 12 months.
    Mr. Dean: As I explained to the hon. Gentleman, many of these people are very young and have ahead of them good career prospects. As the hon. Gentleman knows, salaries in the Civil Service reflect the salaries of comparable employment outside.
    Sir B. Rhys Williams: Is not the best and the most selective way of helping people who are in need because of low wages to increase family allowances?
    Mr. Dean: My hon. Friend knows that a good deal has been done in this area of family poverty, particularly through the family income supplement.

    Strikers (Payment)
    Mr. Dixonasked the Secretary of State for Social Services whether he will consider legislation whereby payments made to strikers should in the first instance be payable from union founds.
    Sir K. Joseph: As my right hon. Friend the Secretary of State for Employment said in reply to my hon. Friend the Member for Haltemprice (Mr. Wall) on 7th November, it is clearly right that trade unions should bear their proper share of financial responsibility for official disputes. The larger issue of which this is part is under thorough review by Ministers.—[Vol. 845, c. 799–800.]
    Mr. Dixon: Is it not true that a system whereby the first call for striker's benefit should be on union funds has been practised in a number of other countries and has been extremely successful, not least in countries such as Denmark, which has a strong social democratic tradition?
    Sir K. Joseph: I would welcome such a practice here being universally followed. But it is not necessarily possible to move from that to enforcing such a practice. It is one possibility that Ministers are having considered at the moment. But it is only one of them.
    Mr. Michael Stewart: Does the Secretary of State agree that what is in issue in this Question is the payment of social security benefits to the wives and children of men on strike? Does he agree that it is now accepted in this civilised country that in no circumstances should the standard of life of mothers and children fall below a certain level, modest though it is, and that if in the course of an industrial dispute employers want to bash their employees they must find some other way of doing it than starving their wives and children?
    Sir K. Joseph: I do not think that the right hon. Gentleman has the issue correct at all. The issue is, while fully respecting the right to strike, whether the payment of benefits to the wives and

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    children of strikers marginally or more than marginally influences the number of strikes disproportionate in their effect on the public to the grievance of those concerned.

    Local Offices
    Mr. Hardyasked the Secretary of State for Social Services if he will ensure that the views of local authorities and communities are sought and considered before any arrangements are made to close local offices of his Department.
    Mr. Dean: It is normal practice for my Department to notify local authorities of any change in local office arrangements some time before the reorganisation takes place.
    Mr. Hardy: In that case, will the hon. Gentleman offer an explanation and some apology to the Urban District Council of Maltby which has learned that the local office has to be closed although no consultations have taken place?
    Mr. Dean: I apologise to the hon. Gentleman and to the urban district council. There was an oversight in this case. I can assure the hon. Gentleman that it is intended to retain a full-time inquiry office at Maltby to deal with questions about social security.

    Emergency Dental Service
    Mr. Edward Lyonsasked the Secretary of State for Social Services if he will set up an emergency dental service in all major centres of population; and if he will make a statement.
    Mr. Alison: I would refer the hon. Member to my right hon. Friend's reply to my hon. Friend the Member for Wycombe (Mr. John Hall) on 14th November last.—[Vol. 846, c. 72.]
    Mr. Lyons: Does not the hon. Gentleman consider it to be illogical that whereas at night, at weekends and at holiday times facilities exist for the relief of pain in other parts of the body there are none for the relief of dental pain? Is the hon. Gentleman aware that dental pain can be not only excruciating but persistent? Will he take urgent action to provide a nationwide service at these times for the relief of dental pain?
    Mr. Alison: Hitherto, it has been the view that a real need for a comprehensive
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    emergency service for dental patients did not exist. However, we have asked the Working Party on Dental Services to look at this matter again in view of representations like those of the hon. Member. Anyone suffering from dental pain or a dental emergency can, of course, get treatment at hospitals, as the hon. Gentleman knows.
    Dr. Summerskill: Does the hon. Gentleman recognise that the British Dental Association is pressing for an emergency service? Will he bear in mind also that it is becoming increasingly difficult for people to obtain not only an emergency service but ordinary dental care under the National Health Service because dentists are opting out of the dental service to go into private practice? Can the hon. Gentleman say when the Working Party on Dental Services is likely to report?
    Mr. Alison: I am afraid that I cannot answer the last part of the hon. Lady's supplementary question about when the working party will report. Obviously the British Dental Association is itself taking part in it. The working party will consider all the matters that the hon. Lady has raised.
    Mr. John Hall: In view of the representations being made to my hon. Friend, may I ask whether he recognises that there is a real need for an emergency dental service? Furthermore, following the supplementary question asked by the hon. Member for Halifax (Dr. Summerskill), does my hon. Friend also recognise the need to strengthen the existing service?
    Mr. Alison: It is precisely because we recognise that circumstances may have changed since the Estimates Committee reported in 1962 that we have asked the working party to look at the situation again.

    Disability Income
    Sir B. Rhys Williamsasked the Secretary of State for Social Services if he will now publish a Green Paper on the proposal for a disability income.
    Miss Fookesasked the Secretary of State for Social Services if he is now able to make a statement following the review by his Department of provision for the disabled.
    Sir K. Joseph: The possibilities and priorities for further improvements in cash provision for the disabled are being studied. But there is a great deal more work to be done and I have no proposals to put forward at the present time.
    Sir B. Rhys Williams: Does my right hon. Friend agree that Members in all parts of the House now accept the need for a disability income and that we look to him to provide specific recommendations about procedure, the numbers likely to be affected and the likely cost?
    Sir K. Joseph: Certainly the Government are studying all the proposals made in connection with disability, but it is still true that I cannot make proposals at this stage.
    Miss Fookes: Will my right hon. Friend bear in mind the plight of the disabled who are able to earn very small incomes but cannot afford national insurance contributions and then find that they cannot qualify for existing benefits because they are told that they have not made contributions?
    Sir K. Joseph: I share my hon. Friend's impatience but I hope she will appreciate that whereas three years ago no money was paid out to the civil disabled, for civil disability we shall have reached under this Government an additional annual cash pay-out, as well as improving the services, of £100 million by the end of next year.
    Mr. Molloy: Is the Secretary of State aware that a number of voluntary organisations like the Disablement Income Group have supplied him with a lot of material which they have researched themselves and that in all fairness we should be looking forward to a White Paper rather than a Green Paper? Cannot the right hon. Gentleman say that he accepts the principle and that an appropriate measure will shortly be introduced?
    Sir K. Joseph: I greatly respect the DIG, but I do not necessarily accept all its conclusions.

    INDUSTRIAL RELATIONS
    Mr. Norman Lamontasked the Prime Minister whether the public speech of the Secretary of State for Employment
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    on 16th February at Farnham on industrial relations represents Government policy.
    The Prime Minister (Mr. Edward Heath): Yes, Sir.
    Mr. Lamont: Although under the voting procedure of yesterday's special TUC conference there was a majority in favour of action against the Government's pay policy, and although individual trade union members will now feel themselves under some pressure to follow that lead, since rank and file trade union members were not consulted is not it the case that there is no reason to believe that yesterday's vote was widely representative of the trade union movement?
    The Prime Minister: I cannot comment on the situation of individual unions. But what my hon. Friend said was reflected in the comments of many of those at yesterday's meeting.
    Hon. Members: Have a ballot.
    Mr. Grimond: Is the Prime Minister satisfied with the effects of the Industrial Relations Act on the present round of strikes?
    The Prime Minister: As for the operation of the Act on individual union members, it is being used more and more and greatly to their benefit. From the point of view of the present unofficial action or what might be called "day" action—the short strikes—I do not think that the Industrial Relations Act is affecting them very much. If people have proposals to make for its amendment, I have constantly made it clear that we are prepared to consider them. So far we have not had any proposals either from unions or from employers.
    Mr. Churchill: Will the Prime Minister make it clear that nothing is doing more to depress the value of the pound and consequently to put up food prices than the current industrial unrest? Will my right hon. Friend emphasise that there will be no surrender to those politically-motivated militants who seek to defy the will of Parliament by indulging in a vicious round of community-bashing directed specifically against the sick and the elderly?
    The Prime Minister: This is a matter that we have discussed with the TUC and

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    with employers on previous occasions. Any industrial action which affects the pound, as it is likely to, is working against their own interests because a lower pound is bound to push up the price of food. It is therefore defeating the objective of those using it. It is true that no one will gain a penny from the present industrial unrest. Many will suffer, some very grievously. A solution to these problems has been put forward already. As for the National Health Service ancillary workers, they can have their increase in pay next week. It is due next week. They have been offered an increase of £2 a head for every man and £1·80 for every woman. For women there is an additional sum payable in October to take account of the movement towards equal pay. Surely everyone in this House must ask himself whether it is justifiable to cause this damage and suffering to people in hospitals.
    Mr. William Hamilton: Will the Prime Minister tell the House why the provisions of the Industrial Relations Act have not been invoked against these so-called militants? Does he regard the nurses in the National Health Service as militants because, for the first time in our history, they are now threatening to strike? Does he regard them as Left-wing Communists?
    Mr. Heffer: "Community bashing" was what that idiot on the Government side said.
    The Prime Minister: I can make no comment about that or about individuals who are at the moment urging strikes or taking part in them. The pay increase of the National Health Service ancillaries would be the second largest they have ever had, and it is available to them next week. It is £2 for men and £1·80 for women, with the additional payment towards equal pay in the autumn. Therefore, I do not believe that it can possibly he justifiable for any reason to cause anxiety and suffering to people in hospital.

    ECONOMIC POLICY
    Mr. Meacherasked the Prime Minister if he will place in the Library a copy of his public speech at Birmingham on 16th February on economic matters.
    The Prime Minister: I did so on 16th February, Sir.
    Mr. Meacher: The Prime Minister was unwise to mention that the Government are taking the opportunity to exploit North Sea gas and oil. What is he doing to stop what has been publicly exposed as the most gigantic spree of palpable deception by Ministers at the taxpayers' expense? What is he doing to recover the £1,500 million of tax losses and to renegotiate the fourth round of licensing when the oil companies made their biggest gains ever and made the British Government look absolute fools?
    The Prime Minister: The hon. Gentleman is hopelessly out in his statement. As the oil has not yet been produced, obviously there have been no profits and there will not be any for another two years. He must wait for the Government's comments on the report by the Public Accounts Committee.

    EUROPEAN ECONOMIC COMMUNITY
    Mr. James Lamondasked the Prime Minister if he will make arrangements to meet the Heads of Government of the other EEC countries to discuss future financial policy.
    The Prime Minister: Heads of Government already meet as occasion requires. In addition there are regular contacts both among Finance Ministers and among officials.
    Mr. Lamond: Is the Prime Minister in favour of moving more quickly towards European monetary union? If not, what is he going to do about the floating pound which is now drifting like a ship without a rudder?
    The Prime Minister: The summit communiqué set out the agreement of all Heads of Government, which is to move towards economic and monetary union by 1980. Perhaps the hon. Gentleman will await the speech by my right hon. Friend the Chancellor of the Exchequer.

    PRIME MINISTER (ENGAGEMENTS)
    Mr. Skinnerasked the Prime Minister if he will now answer Questions about his future engagements.
    The Prime Minister: It is not my practice to list in advance my general programme of engagements, but I regularly answer Questions about whether I will undertake specific engagements.
    Mr. Skinner: Does the Prime Minister think that today is the most appropriate time to announce that he will revisit the scene of the crime by taking a trip back to Selsdon? Then, like a dog, he could eat his own vomit.
    Mr. Rost: Do my right hon. Friend's future engagements include a visit to this House tomorrow so that he may congratulate and welcome back the hon. and learned Member for Lincoln (Mr. Taverne)?
    The Prime Minister: I shall continue to carry out the happy customs of this House on the arrival of a new Member.

    GERMANY
    Mr. Martenasked the Prime Minister if he will make a statement on his visit to Germany.
    The Prime Minister: I had talks with the Federal German Chancellor on 1st and 2nd March during my official visit to Bonn. We discussed a wide range of subjects including currency matters, the implementation of the programme laid down at the Paris summit and Community external relations. Herr Brandt and I also signed an intergovernmental agreement to establish an Anglo-German Foundation for the study of industrial society.
    Mr. Marten: On the question of the summit meeting and its conclusions, may I ask my right hon. Friend whether he made it clear to the Chancellor that the expression so often used in 1971 and 1972—that we would go as far and as fast as the Six towards monetary union—cannot now be our policy, because surely it would be a mistake to have a settlement of monetary matters under the shadow of the present crisis?
    The Prime Minister: The point about the summit meeting was that the Heads of Government agreed about the pace at which they would go on all the different matters of policy which were agreed.
    I cannot agree with my hon. Friend on the last part of his supplementary ques-
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    tion. Often when countries, either together in Europe or in the IMF, have to deal with a crisis, then is the opportunity to work out a solution which is not possible at other times.

    BLOXWICH AND WILLENHALL
    Mr. Stonehouseasked the Prime Minister if he will pay an official visit to Bloxwich and Willenhall.
    The Prime Minister: I have at present no plans to do so, Sir.
    Mr. Stonehouse: Is the Prime Minister aware that householders in this area, as elsewhere, face a 25 per cent. increase in domestic rates? When does he expect to make an announcement about his review of the position?
    The Prime Minister: I do not think that the right hon. Gentleman will have very long to wait.

    GOVERNMENT OFFICES (DISPERSAL)
    Mr. Edward Taylorasked the Prime Minister if he has completed his consideration of the Hardman Report on the dispersal of Government offices; and if he will make a statement.
    The Prime Minister: I refer my hon. Friend to the reply which I gave to my hon. Friend the Member for Middlesbrough, West (Mr. Sutcliffe) on 22nd February.—[Vol. 851, c. 173.]
    Mr. Taylor: Is my right hon. Friend aware that Scotland, which has had severe emigration of graduates and trained people over the years, is now looking forward to this report with enthusiasm? We hope that substantial numbers of offices can be moved. May I ask whether, when the job is completed, consideration can be given by a similar committee to the possibility of moving some of the jobs and headquarters of nationalised industries?
    The Prime Minister: My hon. Friend will appreciate that this is a very important report and obviously contains a great amount of detail. We undertook from the beginning to discuss it in all its aspects with the staff side because, as

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    I have told the House before, we must recognise that this report makes a very important impact on the lives of civil servants and their families, particularly on their children at school. I will consider whether, after this matter is completed, we might deal with various aspects of the nationalised industries, though obviously their relationship with the Government is different.
    Mr. Bagier: If the right hon. Gentleman is genuine in his desire for the Civil Service to move outside London, may I ask how he equates that with the removal of the Department of Births, Marriages and Deaths from Somerset House to Knightsbridge?
    The Prime Minister: I have already explained that the present review is concerned with those dealing with policy matters who therefore have to be within close communicating distance, whether physically or by other means of communication, with Ministers to meet the needs of Parliament. This explains the complexity of the present review and why we are giving so much attention to its substance.

    MINISTERIAL BROADCAST
    Mr. Bidwellasked the Prime Minister if he will arrange for a copy of his ITV broadcast and interview on Thursday 22nd February on Government policies to be placed in the House of Commons Library.
    The Prime Minister: I did so on 26th February, Sir.
    Mr. Bidwell: While thanking the Prime Minister for making that available, may I remind him and the House that in that broadcast he alluded to national average earnings being about £35 a week? Is he aware that averages are very misleading? Millions of people in this country are in receipt of incomes far lower than that. The hon. Member for Southall has received correspondence in terms of bitter anguish requiring him to make known the feelings of people in receipt of incomes of £20 and £25 a week, to point
    234
    out that the Government's prices and incomes code does nothing to rectify this serious position, that the formula of El plus 4 per cent. has nothing to do with the question whatever, that we must consider—[HON. MEMBERS: "Too long."]—not so much low-paid jobs as low-paid industries and that the Prime Minister's formula moves away from doing something seriously for the low-paid workers?
    The Prime Minister: I agree with the hon. Gentleman on the misunderstanding of many people, which has also been shown in my correspondence, about average industrial earnings. Of course, to take au average means that a large number of people are below that figure as, indeed, a large number of people are above it in industrial earnings. The point that I was using and have used before was to show that, for example, on rent rebates, the new arrangement which we have made will enable everybody up to average earnings not to pay more even after the increase under stage 2 of the policy. It was certainly justifiable to use it in that way. However, I agree that whenever an average figure is quoted, by its very nature there must be a number below as well as above.
    Sir Gilbert Longden: Will my right hon. Friend tell the House how very many pay settlements have already been made within the guidelines of phase 2?
    The Prime Minister: A considerable number have been made, I agree. I can let my hon. Friend have the details if he would like to have them, or publish them in the OFFICIAL REPORT. The major ones of course have been notified to us and we know about them.

    MINISTERIAL BROADCAST

      NEW MEMBERS
      The following Members took and subscribed the Oath:

      Giles Heneage Radice, esquire, for Chester-le-Street.

      George Machin, esquire, for Dundee, East.

WAYS AND MEANS
  BUDGET STATEMENT
  Mr. Deputy Speaker (Sir Robert Grant-Ferris): Before I call the Chancellor of the Exchequer, it may be for the convenience of hon. Members if I remind them, that at the end of the Chancellor's speech, as in the last five years, copies of the Budget Resolutions will not be handed around in the Chamber but will be available to hon. Members in the Vote Office.

  INTRODUCTION: ECONOMIC STRATEGY
  3.34 p.m.
  The Chancellor of the Exchequer (Mr. Anthony Barber): The central objective of the Government's economic strategy is to maintain a faster rate of growth of national output. And a key part of that strategy must be to control inflation. There are no other means, no economic devices, no fiscal formulas for achieving the prime purpose which every hon. and right hon. Member of this House shares—to improve the living standards of all our people.
  The twin theme of our strategy therefore is this—expansion and the attack on inflation. I start with expansion.

  Expansion
  The primary objective of last year's Budget was to set our nation on a course of faster economic growth. I said then that the aim was that our national output should increase at an annual rate of 5 per cent. over the eighteen-month period to the present half-year. There are still some months to go but the indications are that we shall broadly achieve that objective. Indeed, in the closing months of last year industrial production, consumers' expenditure, and retail sales all showed increases over a year earlier of considerably more than 5 per cent. And the indications are that a rapid pace of expansion is being maintained this year.
  At the time of the last Budget I said that no Government could tolerate the level of unemployment which we had at that time. The facts of the past year are these. At the last count on 12th February the number of unemployed was over 200,000 lower than a year earlier. And the number of vacancies was over 100,000
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  higher—nearly twice as high as a year ago.
  The very fact that our national output has been growing rapidly over this past year or so has been one of the principal reasons why, last year, living standards—measured in the conventional terms of real personal disposable income—rose faster than in any year since the end of the war. Whatever the problems ahead—and there are plenty—our nation starts this year with a standard of living which is about 10 per cent. higher in real terms—that is, after allowing for inflation—that it was when we came to office.
  There is, I know full well, a sharp contrast between these very real achievements—in increased production, improving employment, and a higher standard of living—and the frustrations which are so often expressed.
  And the reason, I think, is two-fold. First, our progress has been made up of a very large increase in money incomes, offset in part by an increase in prices. It is all too easy to look at price increases and not to take into account the fact that the increases in pay have been greater.
  The second reason is this. Over a period, the improvement in most people's real income has taken place in steps—when they have got their pay rise. But from then until their next rise they have seen their gain in part whittled away by rising prices—the inevitable result of the large pay increases of others, and sometimes, I may say, of their own. This has obscured the fact that, taking one year with another, pay has gone up much more than prices.
  Not only does inflation create injustice as between one individual and another. It also binds us, as a nation, to our real achievement. Instead of satisfaction it breeds resentment. There is only one way of removing the causes of this attitude, and that is by attacking inflation itself.
  I turn now to the future. We have achieved our first objective—to lift the economy on to a path of higher growth. My aim in this Budget, looking ahead over the next year or so, is to continue on that path.
  But it is well recognised that the faster rate of growth we are now achieving depends partly on taking up slack in the economy. If this faster growth is not to be a transitory affair, and if we are

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  to succeed in our long-term objectives, three conditions must be fulfilled.
  First, there must be a higher level of industrial investment. This is required to increase our sustainable growth of productivity, to improve our international competitiveness, and to provide sufficient capacity to re-employ more people so that unemployment can continue to decline.
  Second, we must not find ourselves compelled to bring growth to a halt in order to deal with difficulties which ought to be tackled in other ways, whether those difficulties are concerned with inflation or with the consequences of inflation for the balance of payments. Indeed, we have consistently affirmed that sound and sustained growth is a major element in our programme of action to deal with inflation.
  Third, we must conquer inflation. The battle against rising prices is crucial not only in its own right because inflation is bad, unfair and socially disruptive; but also because our success or otherwise will have a major impact on confidence at home and abroad. Without confidence at home there will be insufficient investment and reduced prospects for sustained growth and for the achievement and maintenance of a high level of employment. As for confidence abroad, there would be no soft options for an economy which allowed itself to become uncompetitive. Pressures on sterling would be intensified by lack of confidence and would lead in one way or another to a depreciation of the exchange rate which in turn would exacerbate the inflationary spiral.
  I will be dealing later and in detail with each of these pre-conditions for growth. But it is right that I should say at the outset that I believe they can be met.
  One thing that has made a great impression on me was our experience in the 1960's. In those years the prosperity of our nation was improving more slowly than that of most other advanced countries. This was due, above all, to our failure to match their economic performance. So the standard of living of the British people fell further and further behind those of other countries, and we were getting into a frame of mind where it was almost assumed that we did not
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  have it in us, as a people, to do as well as others. Our self-confidence was sapped, and the very fact that our economic performance had been poor led to social tensions which would otherwise have been avoided.
  But I just do not believe that we are innately less capable that are those other countries of achieving a better economic performance. What they can do, we can do.
  And so, on the economic front, the strategy of this Budget, like that of its predecessors, will be to keep the economy growing, and to keep it growing over the next year or so at a rate comparable with that we have now achieved. But as I have said on earlier occasions, it is crucially important to look beyond the next year and to lay firm foundations on which we can build a fast rate of economic growth in the future. We have had spurts of fast growth before and they have always either petered out or been brought abrupty to an end because we have not taken the proper measures to ensure that they could be sustained. We are determined not to let this happen again.

  THE ATTACK ON INFLATION
  I now come to my second main theme—the attack on inflation.
  At the time of the Budget a year ago, we had had a considerable measure of success in moderating the rate of increase of both pay and prices. But by the summer that trend was being sharply reversed, and it was against that background that the Government entered into the tripartite talks with the TUC and the CBI.
  The breakdown of those talks made it essential for the Government to take statutory action. By October and November last year both average earnings and hourly wage rates were running 15–17 per cent. above a year earlier and, in spite of the restraint exercised by a large part of British industry, including the nationalised industries, the October retail price index was nearly 8 per cent. above a year previously. The standstill introduced on 6th November was essential to provide a breathing space and to reverse the upward thrust of pay and prices.
  The Government's policies for the next stage of the attack on inflation are expressed in the Bill which is now before

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  Parliament and in the Consultative Document on the Price and Pay Code which we debated yesterday.
  This Budget is based on the determination that these policies shall succeed: and that success is crucial to all the nation's hopes for steadier prices and rising prosperity.
  The country has cause to be grateful for the efforts to restrain prices which most of British industry was already making before the standstill, as a result of the CBI initiative. It may seen onerous that there should now be a further period under which companies are asked to do their utmost to absorb cost increases, with the back-up of a profit margin control. But industry stands to gain with the rest of us from sustained economic growth and the investment which it requires and stimulates. There is no bar whatever to increased earnings either from exports or from the bigger turnover on the home market which growth will make possible. And we certainly have no intention of impeding investment. By making it less easy to pass on increased costs and by asking that the benefits of increasing productivity be passed on in prices, we are reinforcing competition, not working against it.
  The objectives of the counter-inflation policy—faster growth, steadier prices and more help for the lower paid and the pensioners—are all common ground between the Government, the TUC and the CBI. I therefore still hope very much that the TUC, as well as the CBI, will join in the wide-ranging consultations on the drafting of the Price and Pay Code. If the TUC cannot see its way to do this, the result will be a loss to the community in general and to its members in particular. I repeat that the Government are ready at any time to resume discussions with the TUC.
  It is not given to those involved in public affairs always to form a unanimous view as to what should be done, but I do not think it can be said that we have been unreasonable in our attitude. We have given prority to rapid economic growth. We have held down nationalised industry prices. We have made massive reductions in taxation so as to increase employment. We have already increased old-age pensions proportionately more than ever before. We have provided relief
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  on rents, and relief on rates. [HON. MEMBERS: "Oh."] We have given special help to the low paid. All these are major items of policy where we have taken action in the national interest, and where that action has coincided with the requests and recommendations of the TUC.
  Under stage 2, with particular emphasis on the need to improve the position of the lower paid, we are permitting pay increases which would be considered large on any normal reckoning. Of course, I fully realise that intervention in the cycle of pay settlements creates anomalies between different groups. But to have allowed inflation and rising prices to continue without check would have been far more unfair. And we have made it clear that for stage 3, starting this autumn, we shall ask the Pay Board to make recommendations for tackling some of these anomalies.
  The Pay Board's inquiries during stage 2 will enable it to get an overall measure of these problems. During this stage it will be expected, on the basis of its knowledge of the whole range of cases, to advise on the ways in which these problems should be dealt with within the framework of stage 3. It will be on the basis of that advice that the Government will consult the two sides of industry and Parliament on the revision of the code for stage 3.

  TAX REFORM
  Before I return to the immediate issues of economic management, it is right that I should make some general observations about our strategy for taxation and tax reform.
  Since we came to office, we have reduced taxation on a scale unprecedented in our history. Taxation as a proportion of gross domestic product has been cut from 35 per cent. to 30 per cent.
  In the field of taxation reform it was decided, right at the outset, that it was no longer enough merely to tinker with the system, patching it up here and changing it there. The right course, we decided, was to make a complete and thorough-going review of three main areas—the taxation of income, the taxation of expenditure and the taxation of companies.
  On the first, the taxation of income, the old dual system of income tax and surtax is being replaced next month by a new unified tax, simpler, more logical, and easier to understand. That reform is complete.
  On the second, the taxation of expenditure, the purchase tax and the selective employment tax are being replaced next month by the value added tax, with a single standard rate. That reform is complete.
  On the third, the old corporation tax is being replaced next month by a new style corporation tax allied to a simpler and more generous system of investment incentives than we have ever had in this country before. That reform is complete.
  In less than three years, we have tackled not one tax but the whole framework of our tax system. I would like to express my gratitude to those in all parts of the House who have contributed to the detailed legislation but, in particular, to those on this side who, by their support, have made these reforms possible. All these reforms will be in full operation next month. To those who complain of the inevitable problems of transition, my reply is that to avoid those problems is to eschew all fundamental reform. I have no doubt that the changes which come into operation next month, coupled with the unprecedented cuts in taxation, will make a significant contribution to a more dynamic economy. What is now required is to give the new system the opportunity of settling down.
  It is right, therefore, that I should add—no doubt to the relief of those who bore the brunt of two of the longest Finance Bills in our history—that so far as the traditional system of taxation is concerned, these reforms are for the time being complete.
  But outside and beyond the traditional framework of our tax system are the proposals for a tax credit system which I announced to the House last year. The case for the tax credit system rests not upon narrow arguments relating to administrative advantage, great though they are, but upon a broad case of philosophical considerations. When we took office we felt that the first task was to reform the present tax structure and to reduce taxation, for only in this way could we lighten the dead hand of exces-
  242
  sive taxation which had rested too long on our community, stifling incentive, curbing enterprise and penalising thrift.
  But successive Chancellors—or at any rate those who have reduced income tax, whether by cuts in the rates or by increasing the allowances—have been acutely conscious that cuts in direct taxation cannot help people who do not pay tax; and by definition the people who do not pay direct taxation are the poorer members of the community—the low paid, the pensioners, large families, particularly those with young children, and so on.
  The tax credit system—which is a logical extension of our existing tax system—is specifically designed to help these people: and in so doing it will buttress the social security system in a way which channels help to people without individual means-testing and without the problem of take-up. It was in this spirit that the new system was proposed. It was in this spirit, I am sure, that it was welcomed on all sides of the House.
  The scheme is now being examined by a Select Committee of the House. This will be one more case, I believe, where the process of reform will benefit greatly from the more open government which the Green Paper approach facilitates, and from the contribution of a Select Committee.
  There is, however, one point which I should add. This concerns the payment of child credits. The House should know that the Government will not adopt any arrangement which leaves mothers being paid less than they are at present.

  EXTERNAL DEVELOPMENTS
  I turn now to external developments.
  Last September the Committee of 20 was set up by the IMF to advise and report on all aspects of reform of the international monetary system.
  This was particularly gratifying to the United Kingdom, because of the lead which successive Chancellors have consistently given to the reform of the old international monetary system—particularly my right hon. Friend the Member for Barnet (Mr. Maudling) and the right hon. Member for Cardiff, South-East (Mr. Callaghan) as well as myself. This is work, the urgency of which has been increased by the strains on the existing

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  system which have been experienced this year.
  We have already debated in this House the course of events leading up to the dollar devaluation of 12th February. As I said during that debate, nothing could have emphasised more starkly than those events did, the paramount need for a more efficient monetary system.
  We were able to achieve last month—and with remarkable speed—a set of moves which, I have no doubt, has established an exchange rate for the dollar against other currencies at which the United States economy will be fully competitive in world markets and which would, in due course of time, provide the United States with a strong balance of payments. Yet the exchange markets did not settle down and were again acutely disturbed just before this last weekend. Consultation started almost immediately. The purpose of that consultation is to ensure that trade and production, whether on a worldwide scale or a European scale, are not strangled by the sort of disruption which has been experienced in the foreign exchange markets.
  I do not think that any previous Chancellor has found himself attending an international conference of major importance two days before delivering his Budget or has been faced with having to be abroad for further discussions for three more days before the Budget debate has ended. I know the House will appreciate the reason if I reluctantly have to miss some parts of the debate—[An HON. MEMBER: "You will be very lucky."] Perhaps I might interject here that when I explained to some of my colleagues in Europe that attending the meetings would create great difficulty for me because I would have to miss part of the Budget debate, they made much the same observation.
  Although these are matters of great importance and urgency, there is no crisis affecting our own currency. Sterling has not been under pressure. What we are having to deal with is the international payments system as a whole.
  Our discussions this week will include countries other than those in the Nine, and our objective will be to try to agree on action on a worldwide basis. Last Sunday, in the meeting of the EEC Council, a number of ideas were put
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  forward for dealing with the situation. These included, as is well known, the possibility of a joint float by the European currencies as a means of protecting European countries from extreme speculative pressures and of ensuring that the development of the European economic system is not distorted by movements in relative exchange rates in Europe which are not related to underlying economic realities.
  With regard to the proposal for a common float, I said that a number of conditions were essential in the interests of the Community as a whole in order to ensure both that a common float could come into existence and that it could endure. In the current economic situation, these were the only conditions which would guarantee that the collective float could succeed and they were therefore in the interests of all the other countries concerned as well as of the United Kingdom.
  Those conditions are: first, the starting pattern of central rates must be acceptable to each member in terms of its immediate economic problems.
  Second, each member must have an unimpaired right to change its central rate after consultation with the Council of Ministers.
  Third, we must all be prepared to grant support without limits of amount, without conditions, and without obligation to repay or to guarantee. Only the knowledge that support is unlimited and does not impose impossible burdens on the receiving countries can make the system proof against short-term capital flows of the magnitudes now experienced. This is an essential condition for the whole Community; and certainly the United Kingdom could not join in a collective float unless it is met in full.
  Fourth, some, at least, of the support should be interest-free.
  Fifth, the pattern of exchange rates established in connection with a joint scheme should not lead to an immediate increase in food prices for the United Kingdom and any necessary increase should be spread over a long period.
  On this basis the arrangements proposed would have three positive advantages for the United Kingdom, in addition to the advantages for Europe inherent in the scheme itself. The

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  advantages for the United Kingdom would be these: first, they would enable us to maintain an exchange rate at a level which would help the attack on inflation by keeping down import prices.
  Second, the rate structure would be supported by the resources of the whole EEC and would be secure against speculation.
  And, third, the United Kingdom would be effectively insulated from the perennial risk presented by our widespread sterling liabilities.
  Such arrangements would, of course, represent an important step towards Economic and Monetary Union.
  But a collective float is only one of a number of solutions which are being considered this week, and it remains to be seen which of the various ideas will emerge as the agreed line of action in the wider group. This is not an esoteric exercise, nor is the work of the Committee of 20. Decisions taken in these conferences vitally affect employment, prices and national prosperity.
  The Finance Ministers of the EEC will be considering proposals for the reform of the system at a meeting later this month, and the Committee of 20 will be meeting again in Washington in the following week. I am sure that by the time we meet at the IMF in Nairobi in September we can and should reach agreement on the main framework of a plan for reform on the basis of which we can take practical decisions.
  Details of the balance of payments outturn for 1972 are published today. We had a small surplus on current account, with the deficit on visible trade slightly more than offset by the further large surplus from services and income from abroad.
  The House will recall that in my Budget Statement a year ago, I said that the balance on visible trade would be less favourable as imports increased with the pick-up in domestic demand. On the other hand there was a general expectation—not only in this country but in organisations such as the OECD—that world trade would become more buoyant. In the event world trade was sluggish. This was especially so in primary producing countries, on whose markets we particularly depend.

THE ECONOMIC OUTLOOK

  Balance of Payments
  I turn now to the outlook for the coming year, and first to the balance of payments. I should at the outset make it clear that last month's currency re-alignments should not have a significant effect on our current balance. As last year, I expect to see a substantial overall surplus on services like shipping, banking and insurance, and from income from overseas investment. This surplus is at present running at an annual rate of about £700 million. It is expected to continue at broadly this rate, and this is after allowing for the initial payments to the EEC budget. This surplus will offset much of the visible trade deficit which is likely to persist through the year.
  In this connection, it is particularly important to bear in mind that the exceptionally high current surpluses in 1970 and 1971 reflected low domestic demand and high unemployment. It was wholly predictable that high growth and falling unemployment should lead to a growing volume of imports. But as industry becomes geared up to higher output and home supplies increase, the rate of increase of import demand should ease, especially because the pattern of growth of demand is likely to be more even than last year, with less emphasis on cars and consumer durables, and with demand on the heavy engineering industries, where there is most slack, beginning to pick up.
  Furthermore, there are now strong signs that the recovery of world trade is under way. The beginning of this expansion was reflected in our export performance in the second half of last year. Although overall volume growth was modest we increased very substantially the volume of our exports to the faster growing and highly competitive markets of Western Europe. Between the two halves of last year the volume of our exports to EEC countries rose by over 5 per cent. This year the recovery in world trade should be more widely spread, and recent increases in world market prices of food and basic materials will eventually be reflected in an increased demand for imports by the producing countries.
  British industry is now exceptionally well placed to seize the opportunities provided by this situation. The productive

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  capacity is available, and the movement of sterling since last June has improved the competitiveness of our exports.
  It has also improved the competitiveness of United Kingdom goods on our home market compared with imports from overseas. As these changes work through they will make a direct contribution to a more fully employed economy and to an improvement of the trade balance by curbing the volume of imports and increasing the volume of exports.
  It is obviously desirable to ensure that the capital outflows which are necessary—for example to provide for aid and investment in less-developed countries and for export credits—are offset to an adequate degree by inward capital flows. The House will know that, after the excessive inflow of dollars in 1971, we withdrew exchange cover facilities for foreign currency borrowing by certain public sector bodies. Similar facilities will now be restored and the Government will accordingly consider applications in appropriate cases.

  Reserves
  I should also remind the House that despite the outflow in those few days last June, before it was decided to float the £, because we did not hesitate to act, our reserves are still more than twice as large as they were in June 1970 and, of course, since then we have repaid the whole of the short and medium-term official debt, amounting to nearly £1,500 million.

  The Domestic Economy
  I come now to the prospects for the domestic economy. As I said earlier—and I think this is generally accepted—the economy is now on a growth path of around 5 per cent. a year. Looking ahead over the next year or so I believe that this rate of around 5 per cent. will be maintained, with most elements of demand sharing in the expansion.
  The growth of consumers' expenditure, though below the exceptionally rapid rate of the past year, should still be high by past standards. In saying this, I have taken account of a rising level of employment and of the provisions for pensions and other benefits which will come into effect in the autumn.
  For reasons I gave earlier the volume of exports should rise much faster than last year and the volume of imports more slowly.
  It is, I think, generally agreed that there is likely at some stage to be a marked increase in investment in stocks, which was very low last year, although the time path of stockbuilding is notoriously hard to predict. This, too, will contribute to the growth of total demand and activity.
  The forecast path of public expenditure on goods and services is for a relatively rapid growth up till about the middle of this year, after which there is a marked slowing down.
  By contrast industrial investment is expected to grow at an accelerating rate from now on.

  Budget Judgment
  One of our major objectives must be to ensure that this rise in investment comes about and is maintained, because on this depends our prospect of achieving sustained growth at a high rate and with a high level of employment.
  As a result of the changes we have already made, we now have in the United Kingdom a more generous system of national incentives for industrial investment than in any member country of the enlarged Community or in the United States. Furthermore, I reaffirm the intention that the new system of investment incentives should endure at least until the end of the EEC transitional period, that is 1st January 1978.
  With these exceptional incentives already in operation, I have no doubt that the most effective way to encourage a higher level of investment is to pursue a policy which industry and commerce know will result in a sustained rate of growth of demand. This means aiming at a growth of demand over the next year or 18 months which is sufficiently high to maintain a steady movement towards the full use of our productive capacity, but not so extravagantly high that when all the slack has been taken up we have to change gear abruptly and so damage confidence in the prospect of sustained expansion.
  In the light of all these considerations I have come to the conclusion that

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  the Budget should on this occasion be broadly neutral. I believe that on this basis the economy will continue to grow at an annual rate of around 5 per cent. over the 18 months from the second half of 1972 to the first half of 1974.
  I must stress, as my predecessors have, that this is a "central forecast" and subject to the many uncertainties to which, as every former Chancellor knows, such predictions are necessarily subject. For this reason, I shall if necessary not hesitate to act at any time of the year, in whatever direction the economy may require, on expenditure, on taxation or on monetary policy.

PUBLIC EXPENDITURE AND MONETARY POLICY

  Public Expenditure
  There has recently been much discussion about the trend of public expenditure. There are two aspects to be considered—the medium term and the short term.
  First, the medium term. In the recent White Paper, we estimated that the average rate of growth in demand terms of the programmes as a whole up to 1976–77 would be 3 per cent. to 3½ per cent. a year. On any reasonable assumption about the future growth of the economy this rate of increase should be acceptable.
  Next, the short term. In order to help to bring spare resources into use and to bring unemployment down, public expenditure has been deliberately increased during the period 1971–72 to 1973–74. Part of this increase has taken the form of specific additions to programmes concentrated on the regions, and those additions run down rapidly after the coming financial year 1973–74.
  But much of the other additions to expenditure which will continue beyond 1973–74 is also helping to deal with the particular problem of regional unemployment. And a significant part of the continuing increase in expenditure, as compared with the previous year's White Paper, has been due to substantially higher pensions, which I have yet to hear criticised in any quarter. Looking ahead to the total picture after this coming financial year, 1973–74, the White Paper shows the planned rate of growth of public expenditure coming down to only 1·5 per cent. to 2 per cent. a year.
  In my judgment, the situation does not demand precipitate cuts in public expenditure. Nevertheless, as we move closer to full employment, it becomes increasingly important for us to get the right balance between the different claims on the national output. The House should know three things.
  First, the main Supply estimates for the coming financial year, 1973–74, are now more than £130 million below the corresponding total in the White Paper. In addition to this—also in respect of 1973–74—there is likely to be a substantial reduction on the White Paper provision for the capital expenditure of the nationalised industries, bringing the total reduction in the two items to over £200 million.
  Secondly, the Select Committee, in a report last July, said that
  "the use of public expenditure to correct short-term deficiency of demand is an essential element of policy".
  I accept that without reservation, but it is equally the case that, if circumstances warrant it, public expenditure should be cut back. Effective action requires proper preparation, with continual need for contingency work. And so, when last year the Government completed their review of the programmes, this contingency work was at that time put in hand. But lest anyone should jump to conclusions, I should say that this is not a hint of things to come. It is only common prudence.
  Thirdly, my colleagues and I are in any event determined that, having now achieved the faster rate of growth of the economy, as we set out to do, there will be the strictest control of expenditure, both on existing policies and for any new proposals.

  Monetary Policy
  I turn now to recent monetary developments and to monetary policy. A year ago I warned the House that the high growth of output I intended to sustain would entail a growth of money supply which was also high by the standards of previous years.
  As I predicted, the growth of money supply has indeed been fast by either of the more commonly used conventional meausures, that is, MI, which consists of currency in the hands of the public and

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  current accounts held by private sector residents in United Kingdom banks, or M3, which adds in the corresponding interest-bearing deposit accounts.
  But it is sometimes overlooked that the movements of these figures can be influenced by considerations which have no general economic significance. For instance, the structural changes in the banking system introduced by the far-reaching reforms of 1971 have increased the rôle of the banks as financial intermediaries at the expense of other institutions whose activities are not included in either the MI or M3 measurements.
  The rapid growth of certificates of deposit is a major instance of this. After the severe pressures on company liquidity in 1969–70 it was highly desirable that companies should add to their liquid assets. They have done so and they have also found it convenient to hold much of their short-term assets in certificates of deposit with the banks, and this has caused M3 to rise.
  Moreover, in the conditions of 1972, individuals as well as companies increased their savings and added substantially to their money balances. This is another way of saying that the response of demand to the many measures taken by the Government to expand the economy was slow until the second half of the year, and that money balances were built up rather more than I had expected.
  Towards the end of 1972, however, when there were clearer signs that real demand was expanding, I thought it right to take action to prevent the liquidity of the banking system from leading to an over-rapid expansion of credit and hence of demand in the months ahead.
  Short-term interest rates had been allowed to rise sharply during the currency outflow in June, and the banks were subsequently asked to ensure that they had sufficient resources to meet the needs of industry and, as necessary, to make credit less readily available to property companies and for financial transactions.
  In the autumn there came a change in money market arrangements with the introduction of the more flexible "minimum lending rate", This improved the authorities' techniques for influencing short-term market rates, which are in turn under the new system one of the principal
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  mean of influencing the growth of bank credit.
  Towards the end of the year, there were two calls for special deposits, totalling 3 per cent. in all, to get the reserve base of the banks and financial houses on a tight rein by sterilising £700 million. This curtailed the ability of the banking system to expand credit.
  As a result of all these developments money interest rates have risen substantially over the past year. Interest rates are at the heart of monetary control, but in conditions of changing prices it is misleading to look at them solely in nominal terms. The rate of inflation determines the real amount of any particular rate of interest, and therefore the consequences of the rate of interest for the decisions taken by individuals and companies. And the important point is this. Because expectations about the future rate of inflation are a major factor in determining the level of interest rates, the success of counter-inflation policies is crucial to improvements in this sphere as in others.
  In the coming year, as I shall explain shortly, the public sector borrowing requirement will be high. With real demand expanding, the objective must be to prevent this large borrowing requirement from leading to too rapid a growth of money supply. I therefore intend to take action at once to ensure that, to the maximum extent, the Government's borrowing requirement is met by means which do not increase the money supply.
  Before I deal with the measures I have in mind, however, I should comment on the development of the Governmnt borrowing requirement in the past year and its probable size in the year ahead, and the implications of this for economic and monetary policy.

  Borrowing Requirements
  At the time of the Budget last year I expected the public sector borrowing requirement for 1972–73 to be £3,358 million. In the event it is probable that the figure will prove to be some £500 million less than the Budget estimate.
  There is one important aspect of this matter which is often misunderstood. Over the past year, notwithstanding the size of the borrowing requirement, very little of it has in fact been financed

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  through the domestic banking system. About £1,200 million net of public sector debt has been sold to the non-bank public, and of the remainder of the borrowing requirement about £1,600 million was financed by a running-down of foreign exchange reserves, most of which occurred in June last year.
  By contrast, the private sector made very large demands on the banking system, and the increase in money supply, broadly defined, was almost equal to the banks' lending to private-sector borrowers. I think it right to put the public sector borrowing requirement into its proper perspective and to scotch the idea that it, and it alone, was responsible for the large growth in money supply last year. That was not the case. Indeed in 1972 the public sector made net repayments of debt to the banks.
  Coming now to the year ahead, the borrowing requirement will be increased by some £800 million as a result of the once-for-all change in the timing of tax receipts and payments which arise from the new system of indirect taxation. But, as I shall explain, the effect of this £800 million on the claims on resources should be very small. However, including this £800 million and on the basis of my Budget proposals, I expect the public-sector borrowing requirement to be £4,423 million.
  But it is important to recognise that this in no way resembles a current deficit. The increase in prospective borrowing does not come about because the public sector is raising insufficient revenue to cover its current expenditure. Indeed the reverse is the case. The public sector is expected to have a surplus of revenue over current expenditure in 1973–74 of £3,223 million, which is some £260 million greater than in 1972–73.
  I should add that the substantial increase in the borrowing requirement arises only partly from the public sector's own current and capital expenditure. Two other factors are equally important.
  The first is the Governmnt's rôle as a source of finance for third parties—export credits, finance for industry, and so on. The second factor is the one I have referred to—the very substantial change next year, not in overall tax liabilities, but in the timing of tax collec-
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  tion. This is the biggest single factor accounting for the rise in the borrowing requirement and it is, of course, unique to this particular year. As a result of the new arrangement for collecting VAT there will be a temporary interruption of the flow of revenue from indirect taxes, which will mean that the borrowing requirement in 1973–74 will be some £800 million more than it would have been if SET and purchase tax had continued. Of this, £112 million is due to the ending of the SET "forced loan" by industry.
  This is a once-for-all change and does not alter the underlying tax liabilities as distinct from the timing of revenue receipts. Because of this, its effect on the claims on resources should be very small.
  Nevertheless, the large borrowing requirement in 1973–74 poses a considerable financing task for the authorities. It would be quite unacceptable to rely to any substantial extent on borrowing from the banking sector.

GOVERNMENT FINANCE AND SAVINGS
  General
  I am therefore determined that a sustained effort shall be made in the coming year to sell Government securities to the non-bank domestic public. To do this, it will be essential that the terms on which Government securities are made available remain fully competitive. I therefore have a number of immediate proposals which I do not doubt will increase the attraction of gilt-edged stock, national savings and other Government securities for investors. There are in particular three sectors of the public which will be in funds this year and to which Government obligations must be available on the right terms.

  Company Sector
  First, there are the industrial and commercial companies, whose liquidity next year will be considerable, partly because of the exceptional delay in the collection of taxes and partly because company expenditure on new capital equipment may not catch up with company income until later in the year. The need to do something to appeal to companies has

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  become particularly clear in recent months as company liquidity has steadily been channelled into bank deposits, so contributing to the growth in the money supply.
  To some extent the fiscal system has itself contributed to this development because under existing tax law the interest element on the sale of certificates of deposit held by non-financial institutions escapes liability to tax. I propose with immediate effect to remove this anomaly and give the public sector a chance to compete on equal terms with the banks for company funds. Gains on sales of these certificates will be made liable to corporation tax, or income tax in the case of an individual holder, and the new charge will apply to gains on certificates acquired after today.
  But I intend to go further. A new facility will be made available to all incorporated businesses. With effect from 1st April companies will be able to open accounts, which will be operated by Inland Revenue Collection Offices, into which they can deposit surplus funds. If these funds are subsequently applied to the payment of a company's mainstream corporation tax liability, the interest credited on them will be the average Treasury Bill rate for the period of the deposit plus a bonus of 2½ per cent, a year. If, on the other hand, the funds are withdrawn, the bonus will not be paid and the interest will be simply that payable on Treasury Bills. I believe that corporate treasurers will find these tax deposit accounts a useful medium for employing liquid funds, preferably in anticipation of a tax liability but with no substantial penalty if they are needed for other purposes.

  Stock Issues
  Secondly, there are the big financial intermediaries through which much personal saving is channelled. I refer to the life insurance companies, and the pension and provident funds. These bodies naturally look to the gilt-edged market as an important outlet for their funds. Two new stocks will be issued.
  The first will be a convertible stock on terms which I believe will have considerable appeal for institutional investors. The issue will be of £1,000 million with a coupon of 9 per cent. and an issue price of 99½. The initial stock will mature in 1980; but at that point, lenders will
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  have the option of converting the initial stock into a new 9 per cent. stock maturing in the year 2000, and of accepting £110 of that new stock for every £100 of the initial stock. The yield to maturity over the full 27 years will be about 9·6 per cent.; but investors will, of course, have the option of repayment at par in 1980 if that is what they prefer.
  Second, there will also be a further new issue to help meet the steady demand from investors for stocks of a low coupon. There is some evidence that, for this type of stock, the balance between supply and demand is now such that large purchases have a disproportionate effect on price, with an unsettling effect on the market. The position is being aggravated by the fact that two further 3 per cent. stocks mature on 1st April. There will therefore be a new issue of £400 million, maturing in September 1979, with a coupon of 3 per cent. and an issue price of 75.

  National Savings
  Next, there is the personal sector. The encouragement of personal saving in all its forms is a major objective of Government policy, and we have recognised this in the changes which we have already made in the system of personal taxation. A high level of saving is important for a number of reasons. In the first place, it provides the funds out of which the nation's investment needs can be financed, and in this way it contributes to the achievement of steady and sustained growth.
  Secondly, saving brings security and independence for the individual. Thirdly, as successive Chancellors have pointed out, savings and taxation are in a very real sense alternatives. The more people save, the less Chancellors have to tax them. To be more specific, the most recent figures for total personal savings show that in the first three-quarters of last year, they were nearly £600 million higher than they were in the corresponding period of the year before. This meant that, given our objectives for the growth of the economy, the need for taxation was at least £600 million less than it would otherwise have been.
  Within the total of personal savings, National Savings are of particular significance in present circumstances. As a source of Government borrowing, they are

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  an important factor in the fight against inflation.
  Once again, over this past year, National Savings have been highly successful. Although in recent months the flow of National Savings has no doubt been affected by the general rise in interest rates which has added to the competition for funds, at the end of January the amount held by the public in all forms of National Savings was over £10,000 million, some £800 million more than a year earlier.
  At this point I want to pay tribute to the dedication of the members of the voluntary savings movement under the leadership, in England and Wales of Sir Robert Bellinger, and, until he retired recently after seven years in office, of Lord Birsay, who was Chairman of the National Savings Committee for Scotland. This tribute is no mere formality, for those men, and the Savings Committees under them, are a remarkable example of voluntary service.
  As the House knows, I have already taken some action to ensure that good progress is maintained. In particular, the rates of interest in the ordinary and investment departments of the Savings Banks were recently increased.
  I expect to receive very shortly the Report of the Committee to Review National Savings which I set up two years ago under the chairmanship of Sir Harry Page. I do not want to propose too many extensive changes in National Savings when that report is so near to completion. On the other hand it is essential that the range of National Savings facilities should remain fully competitive, and I am therefore making the following changes.
  First, the maximum permitted holding of the decimal issue of National Savings Certificates will, from tomorrow, be increased from £1,000 to £1,500. This will provide the opportunity for additional investment to those people already holding the present maximum.
  Second, there will be a new issue of British Savings Bonds with improved terms. The new bond will be sold in multiples of £5, will have a life of five years and a maximum holding of £10,000. In these respects there is little change from its predecessors. The rate of interest, however, will be increased from 7 per cent. to 8½ per cent. with a tax-free bonus
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  on maturity of 3 per cent. The new bond will be on sale by about the end of May.
  Third, Premium Bonds, by adding ⅛th per cent. to the rate of interest, it will be possible to double the weekly prize money. In addition to the existing prizes, therefore, there will, from July, be a further 25 prizes of £1,000 each, every week. Bonds bought this month will be in time to qualify for the July draw. With all the other prizes, the total prize money going to Premium Bond holders will then be £50 million a year.
  Fourth, I have decided that a depositor with an account in the ordinary departments of the National Savings Bank or the Trustee Savings Banks should be able to hold up to £1,000 without incurring any income tax liability on the interest earned. The exemption limit will accordingly be raised from £21 to £40. This increase in the exemption limit will come into operation for the year of assessment 1974–75, but will effectively cover interest received in 1973–74 in all those cases where, as is usual for accounts continuing over a period of years, the liability for any year of assessment is based on the amount received in the preceding year.
  Taking account of all these measures—the new tax deposit accounts, the new long-term stock, the new low-coupon issue and the new arrangements for National Savings—I expect during the coming year a considerable increase in the net sales of Government obligations of one sort or another to the non-bank public.

  Share Savings Scheme
  National Savings are, however, only part of the picture. We also need, if we are to achieve sustained growth, to encourage more people to save and invest in British industry.
  Last year we introduced legislation to regulate employees' share option and share incentive schemes. But most existing schemes have been prepared on the basis that participation is offered only to senior staff. In any event, the terms of many schemes would make them unattractive to other employees. What is wanted is a wider share-ownership scheme which will encourage companies to make it possible and practicable for each and every one of its employees who wants to,

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  to acquire a real stake in the company for which he works. The necessary provisions for a new "Share Savings Scheme" will, therefore, be included in this year's Finance Bill.
  The new arrangements will enable any any company with an approved scheme to offer, to all its regular full-time workers not already covered, the chance to buy shares on specially favourable terms. Indeed these arrangements will make it possible for schemes to be operated so that an employee can save up through Save As You Earn in order to buy shares for as little as 70 per cent. of the normal price ruling when he joins a scheme, but still retain the option, at a later date, either to take up his shares at a profit, or alternatively—if he changes his mind—to keep his savings in cash.
  These schemes will work in this way. First, the shares will be bought by the employee from Trustees on the special terms available, but no substantial payment will be required at the outset. The employee will provide the purchase money for his shares by means of regular Save As You Earn payments.
  Second, the employee's SAYE contributions under such a scheme will be limited to £20 a month, which will enable him to acquire shares costing up to £1,680. But if the company prospers, the value of the shares is likely to be greater when the SAYE contract matures.
  Third, the increase in the value of the shares will not attract any liability to tax until they are disposed of, when the usual capital gains tax rules will apply. The SAYE rules will be revised to permit anyone who already makes the maximum SAYE contributions to join a scheme of this kind.
  Fourth, there will be protection against a fall in the value of the shares during the saving period because there will be the right to opt out of the share purchase when the SAYE contract matures and instead to keep the cash proceeds.
  The result is a scheme which combines the attractions and incentives of employee share schemes with the security and bonuses of SAYE. It is a further step towards wider share-ownership. It will enable all those who participate to share in the prosperity of their company—to take up their shares at a profit—but
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  always with the safeguard that, if they change their mind and decide not to take them up, there is absolute protection against losing their savings.

ESTATE DUTY

  Date of Valuation
  I turn now to taxation, and first to estate duty. Last year I made major changes which provided substantial relief from estate duty for bequests to widows and charities. They were widely welcomed.
  The House will also recall that at the time of the last Budget we published a Green Paper on a possible inheritance tax, and comments were invited. I am grateful to the numerous bodies and associations, as well as individuals, who have made their views known. The change to an inheritance tax obviously have very important and far-reaching implications concerning the disposition and devolution of property, and it is therefore right that the Government should take time to consider these important questions.
  There is, however, one reform, not too costly, which will be made this year. This concerns a rule which has been a constant source of complaint.
  Ever since the introduction of estate duty nearly 80 years ago, it has been the general rule that assets must be valued as at the date of death. This rule has been considered on a number of occasions, but the conclusion hitherto has always been that it could not be changed. This has been so despite the fact that it can cause real hardship if executors are compelled to sell quoted shares or securities some time after the date of death when the Stock Exchange quotation has fallen. The result is that estate duty is paid on a valuation which is higher than the actual sale value of the shares. In certain circumstances this can actually mean that the duty exceeds the realised value of the shares. This is clearly inequitable.
  New rules will therefore be introduced. These will apply to shares and securities quoted on a recognised Stock Exchange and to holdings in authorised unit trusts. Where such investments have been charged to estate duty, executors, or other persons accounting for duty, who realise them within 12 months of the

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  death, will, subject to certain safeguards, be able to claim that the total of the sale prices should be substituted for the total of the date of death values of the investments realised. The cost of the relief will depend on the movement of Stock Exchange prices, but it is likely to be about £2 million in 1973–74. The new rules will apply in relation to deaths occurring after today.

  National Heritage
  I should also mention one other change in estate duty which, although comparatively minor, is important to protect our national heritage. The Finance Act 1930 allows a wide range of objects of historic or artistic value to be exempted from estate duty. In addition, under the Finance Act 1956, the Government can accept an individual outstanding work of art in payment of estate duty. It was thought in 1969 that historic documents were covered by the 1956 Act as well as the 1930 Act. Subsequent legal advice has shown that this is not in fact the case. To put the matter right, the two Acts will be aligned so as to enable the same categories of objects to be accepted in payment of estate duty as can already be exempted from duty.
  The necessary steps will be taken to apply these two estate duty changes to Northern Ireland.

COMPANY TAXATION

  Corporation Tax
  I now turn to corporation tax. The new system of corporation tax for which we legislated in last year's Finance Bill comes into effect next month—in April. As from then, the old system will no longer be operative. As the House knows, however, corporation tax is paid in arrear. It follows therefore that in this Budget it is necessary to fix the rate for the financial year 1972, the last under the old system. There will be no change in the present rate and it will therefore remain at 40 per cent. for the financial year 1972. Next year the rate will re-sect the change in the system, but it is too early yet to reach a decision as to what the appropriate rate will then be.
  As far as the structure of the corporation tax is concerned, the Finance Bill
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  will provide two significant changes affecting groups of companies. These are the outcome of consultations between the Inland Revenue and representatives of industry.
  I was urged last year by a number of important groups of companies, and in particular those with large overseas interests, to make more flexible the provisions under which companies may surrender advance corporation tax to their subsidiaries. The problem was that I could not contemplate any relaxation in the treatment of groups unless I could also take action to counter certain artificial manipulations of the group relief provisions involving in effect the sale of capital and other allowances at a discount. This abuse was spreading rapidly and there was reason to fear a possible loss of tax of the order of £100 million a year.
  We have now found a solution to deal with this problem. This is another instance of the value of the kind of consultation, at professional level, which we have tried constantly to foster in the programme of taxation reform. The changes will be described in detail by my hon. Friend the Chief Secretary later in the debate.
  Last year much consideration was given and rightly so, to the position of unquoted companies under the new tax system. I have looked again at the possibility of devising a transitional scheme of relief for such companies. But the hard fact is that any scheme of this kind would inevitably be costly: to give a significant degree of relief across the board could well entail a cost of £75 million in the initial year. The House will understand why I cannot contemplate a cost of this order in present circumstances.

  Offshore Oil and Gas
  I come now to two further important changes concerning business taxation.
  Under the law as it stands at present the United Kingdom sector of the Continental Shelf is outside this country for the purposes of taxation. The result is that profits from exploration and exploitation of the resources of the Shelf are normally liable to United Kingdom tax only if they are earned by an enterprise which is resident in the United Kingdom. This follows because a resident

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  enterprise is liable to tax on all its income from any source throughout the world. But under the present law profits which a non-resident enterprise makes from such operations on the Continental Shelf are not liable to tax here unless made through a branch in this country.
  This situation is no longer justifiable. All profits from exploration and exploitation of the United Kingdom sector of the Continental Shelf will therefore be brought within the charge to United Kingdom tax. At the same time employments on the Shelf which in many cases have been outside the scope of United Kingdom income tax, will become chargeable to tax under the normal rules.
  The Public Accounts Committee last week drew attention to the probability that the yield of tax to the British Exchequer from the North Sea profits may in the case of many of the companies be seriously impaired by the setoff of artificial losses made by those companies from their trade in oil from other parts of the world, and it recommended that the Government should take action substantially to improve the effective tax yield from operations on the Continental Shelf.
  I am sure that the Committee was right, and I accept this recommendation. The House will wish to know how these artificial losses arise. The companies producing oil in the Middle East and elsewhere sell the crude oil at what are called "posted prices". These prices are largely dictated by the governments where the oil is produced. But these "posted prices" are considerably higher than normal commercial prices and the broad effect of these arrangements, therefore, is to produce an artificially inflated profit in the producing country which the government of that country can tax, and a corresponding artificial loss in this country which under the existing law is available for relief against other profits.
  Up till now this has been a theoretical rather than a practical problem as there have been little or no other profits against which the losses could be set. But the situation will be quite different with the profits from North Sea oil. If we are to safeguard our position we must take action. The magnitude of this problem can be judged from the fact that the losses which have already accumulated amount to £1,500 million. This means
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  that, unless we make a change, the first £1,500 million of profits from North Sea oil would effectively be exempted from corporation tax. And this in its turn might well mean that, as the PAC observed, we should get little tax revenue from North Sea oil production even by 1980.
  To implement the recommendation of the PAC it is therefore necessary to deal both with the new losses and with those which have already accumulated. The PAC Report makes special mention of two techniques for this purpose. First, for dealing with current losses which arise from the use of artificial prices it would be possible to prescribe an alternative administered price for United Kingdom tax purposes. Second, the accumulated losses could be segregated so that they were set only against future profits from the existing business and not against profits from the Continental Shelf.
  I agree with this approach and propose to follow it. In the normal way I would have legislated in this year's Finance Bill. But the issues involved are complex and it is therefore in the general interest to have full consultations with the industry first to ensure that the legislation takes full account of the practical problems involved.
  Profits from North Sea oil will probably not arise until 1975 so that deferment of the legislation should not create difficulties. But in any event I wish to make it clear that the Exchequer must not suffer as a result of any delay caused by the need to consult. The legislation will therefore provide that the new arrangement to prevent current losses will apply to the current trading year of the companies; the arrangements for accumulated losses will apply to any losses which had arisen for tax purposes up to the end of the companies' last accounting period.
  The PAC also pointed out that under the present arrangements the Exchequer's share of the "take" from oil operations on the Continental Shelf is substantially less than is obtained in other countries. As I have already said, profits from North Sea oil will probably not arise until 1975, but I can assure the House that the Government already had under consideration the other important questions affecting licensing terms and the Government's

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  "take" from operations on the United Kingdom Continental Shelf to which the PAC has drawn attention.

  PERSONAL DIRECT TAXATION
  Turning now to personal taxation, there is one particular matter on which I should briefly report to the House. This past year has seen the beginning of the end of post-war credits. Thanks to the special arrangements made by the Inland Revenue, this has been a remarkably trouble-free operation, despite the fact that the credits relate to a period beginning more than 30 years ago. Since last April, about £130 million, including interest, has been paid to 3¼ million people, mostly to those who produced certificates but, since 1st January, also to those who—like myself—had mislaid them.
  Next, one matter consequential on unification. The Finance Bill will provide that the investment income surcharge shall apply to all income of trusts that is or may be accumulated. A beneficiary who receives income from such a trust and is not himself liable to the surcharge will be able to reclaim it in the same way as he can reclaim basic rate tax.
  The yield from this change is estimated to be £5 million in a full year.
  I come now to a change concerning the dependent relative allowance. It has long been the practice that the full allowance is given for maintaining a dependent relative whose only income is the basic National Insurance retirement pension or other income of an equal amount. In consequence there have in the past been frequent changes in the dependant's income limit as pensions have been increased. Now that there is a review of pensions every year the changes would be even more frequent. The traditional practice will therefore be formalised so that instead of fixing the dependant's income limit in figures it will be stated as a general principle that the full allowance will be due if the dependant's income is no more than the amount of the basic pension at any particular time. The purpose, of course, is to ensure that a person contributing to the support of a relative does not have his or her tax
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  allowance reduced as a result of an increase in the pension.
  Next, the age exemption. The purpose of this exemption is to recognise the special position of the elderly. The limits will be raised so that no married couple, where either spouse is aged 65 or over, will pay any tax on an income of £1,000 or less. For any single person, aged 65 or over, the new limit will be £700. The cost of this will be £7 million in 1973–74, and £12 million in a full year.
  The new unified system of personal taxation will come into effect on 6th April, but there is one matter left over from the old system, and that is surtax for 1972–73, the last year for which it will be imposed. There will be no change in the starting point or rates. As far as the new unified system is concerned, all the rates were provisionally fixed last year. Those rates will stand.
  I have no hesitation in saying that I believe that most people will consider top rates of 75 per cent. for earned income, and 90 per cent. for investment income, to be quite high enough. These top rates are still significantly higher than in almost all other developed countries.
  I see that the Federal Republic of Germany has recently imposed a 10 per cent. temporary surcharge on higher incomes. Even with that, the top rate in Germany will still be only 60 per cent.
  It is, at this stage, relevant to remind the House that, taking all the changes in taxation which have been made since we came to office, taxation has been reduced in the current year by over £3,000 million.
  Of this nearly a quarter represents reductions in taxation on spending—in purchase tax and SET.
  The balance represents reductions in direct taxation. Some of this has gone to industry—with the object of encouraging investment and creating jobs. But most has gone to individuals. The greater part of this represents the big increases in the income tax allowances, which cost over £1,000 million. First, the increased allowances for children and then, last year, the biggest increases ever made in the married and single allowances—giving everyone remaining liable to tax a flat rate tax reduction of £1 a week.
  Two facts are beyond dispute. First, taking the whole of the changes in personal direct taxation, 80 per cent. of the total has gone to people with incomes of less than one-and-one-half times the average adult manual wage. Second, the tax threshold—the point at which people start paying tax—has been raised, not just in money terms, but in real terms. For example, since we took office, the threshold for a married man with two young children has been raised by 8½ per cent. in real terms. It is perhaps not without significance that, taking the period 1964–70, the tax threshold for the same family was lowered, in real terms, by no less than 12 per cent.

  LAND HOARDING CHARGE
  In the White Paper on the second stage of the counter-inflation policy (Cmnd. 5205) it was stated that the Government intended, before the next stage of the policy comes into operation, to bring forward proposals concerning building land.
  Accordingly, my right hon. Friend the Secretary of State for the Environment will be making a full announcement before the end of this month. But there is one important legislative change, the details of which will be in that announcement, which I should outline now.
  It is generally accepted that the recent increase in the price of land has been due to the failure of supply to catch up with demand. It is also self-evident that there is no point in taking any step which would either lead people to withhold from the market land which would otherwise have been made available or which would lead to an even steeper increase in prices, or both. I have no doubt that—however superficially attractive to deal with an emotive situation—an increase in the capital gains tax on land transactions would do just that.
  It would put up the price of land, just as the now defunct betterment levy put up the price of land. The hard fact is that additional taxation would simply aggravate the situation. I should mention, incidentally—it is sometimes overlooked—that all gains from speculative land transactions by individuals are already taxed at the full income tax rates ranging up to 75 per cent. from next month, or in the case of companies are subject to corporation tax.
  The only effective way, in both the short and the longer term, of tackling the price of housing land is to make more land available for building. A number of steps have already been taken, but it is necessary also to take action to prevent the hoarding of building land, because this contributes directly to increased prices,
  After consultations have taken place with the local planning authorities, legislation will therefore be introduced to penalise, by a special land hoarding charge, any unjustifiable delay in developing land which is the subject of planning permission for housing.
  The charge will be levied for failure to complete the permitted development within a specified period appropriate to the land in question. That period will be extended only in special circumstances.
  The charge will be levied on the full market value of the property as on the day immediately after planning permission was granted or, in the case of land with planning permission granted before my right hon. Friend makes his announcement, on the value on that day.
  The charge will begin to accrue day by day from the end of the permitted completion period by reference to a fixed percentage of the full market value.
  The charge will be secured on the land itself and will be collected by the Inland Revenue.

  RATING REVALUATION
  There is one further matter concerning land and housing. The Government are to take action to help those domestic ratepayers who face big increases in rates due to revaluation. Revaluation itself is both fair and necessary, but because the 1968 revaluation was shelved, the relative changes in the rateable values of different properties are much bigger this year than a quinquennial revaluation would normally have produced.
  After discussion with the local authority representatives, the Government therefore propose to phase the effects for those hardest hit by meeting half the cost above 10 per cent. of any increases in domestic rate bills in 1973–74 which are attributable solely to the effects of revaluation We are assured that the local authorities can readily implement this. The cost to

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  the Exchequer is estimated to be at least £10 million.
  The Government have already agreed to provide Rate Support Grant in England and Wales at a level higher than ever before, and have done so particularly to ease the position of the domestic ratepayer. The additional help I have just announced will help those hardest hit by revaluation. There will be a proportionate addition to Rate Support Grant in Scotland.
  My right hon. Friend the Secretary of State for the Environment will be amplifying this later today.

INDIRECT TAXATION

  VAT rate
  Next month purchase tax and SET will be abolished and be replaced by VAT. In last year's Finance Act, the standard rate of VAT was provisionally fixed at 10 per cent. The House will recall that in our debates last year it was suggested by hon. Gentlemen opposite that I had it in mind to use the powers which I then took to fix the initial standard rate of VAT at 12½ per cent. Fortunately that is neither necessary nor appropriate. There will be no change in the provisional figure, and the standard rate of VAT will therefore be 10 per cent. The rate of car tax was also fixed at 10 per cent. in last year's Act, and it will remain at that figure.
  I should add that, if we had decided to collect the same amount of revenue as at the higher rates of purchase tax and SET, which existed when we took office, we should have had to fix the rate of VAT at 15 per cent. Instead, as a result of the massive cuts in indirect taxation which we have already made since June 1970, the 10 per cent. rate will be the lowest standard rate in Europe.

  Revenue Duties
  It is convenient next to deal with the revenue duties.
  In accordance with the arrangements for joining the E.E.C., protective duties charged on imports from the other member countries will be progressively reduced and finally abolished. The relatively small protective elements in
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  the customs revenue duties will therefore be reduced by one-fifth in respect of imports from the E.E.C. in accordance with the timetable set out in the Treaty of Accession. The Treasury will be empowered by order to make the further adjustments to these duties required by the Treaty, beginning on the 1st January 1974.
  Next I deal with the question of those goods liable to revenue duties which from 1st April will also be chargeable with VAT at the standard rate. They are alcoholic liquor, tobacco, matches and mechanical lighters. The basic rates of these duties will be abated by such amounts as are necessary to secure from the goods concerned broadly the same total revenue—that is from revenue duty and VAT combined—in 1973–74 as would have been obtained solely from the existing rates of revenue duty.
  It follows from the decision to abate the revenue duties fully to offset the introduction of VAT that stocks which are held by registered VAT traders, and which have paid duty at the higher rates, will qualify for relief, to the extent of the abatement, under the stock rebate scheme which has already been announced, and to which I turn next.

  Transitional Arrangements
  Last November I announced proposals for avoiding double taxation on goods which have been acquired before VAT comes into force on 1st April, but which are sold by a registered VAT trader after that date and so attract VAT. The transitional problem arises when such goods have borne either purchase tax, or one of the revenue duties which will be abated to take account of the introduction of VAT.
  The rebate scheme has been widely welcomed by the trade interests concerned, and as a result of the scheme there will be no excuse for increasing retail prices on the argument that traders need to recover purchase tax or revenue duty as well as VAT on goods in stock on 31st March.

  Government Action on Prices and Publicity Campaign
  This leads to the action we are taking to safeguard the consumer, first, by special powers in the Counter-Inflation

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  Bill which is now before Parliament, and, second, by a major campaign of newspaper and television advertising starting next week.
  In the Counter-Inflation Bill we are taking special powers to ensure that, where the yield of VAT is less than that of the purchase tax and SET which it is replacing, the cuts in taxation will lead to prices being reduced in line with the tax reduction, and that, where the reverse is the case, any price increases will be no more than is strictly justified by the tax change.
  Mr. Denis Healey: I wonder whether the Chancellor could clear up one point which his right hon. Friend said that he would deal with today? In fixing the legitimate amount of retail price under the value added tax, will traders be expected to take account of constant percentage margins of profit or of constant cash margins of profit, because, as the Chancellor knows, this will make all the difference in many cases?
  Mr. Barber: I am coming in a moment to the discussions we have had with the retailers. What I can say is that the situation will be entirely different from that which dealt with decimalisation where the Government had no powers of any kind. Even when this special provision comes to an end, there is no question of a free-for-all—that is, when the special powers end—because prices will continue to be subject to the strict control provided for in the Bill.
  The newspaper and television advertising campaign will begin next week. We have had extensive consultations with representative trade bodies, in order to work out with them patterns of price changes which will be both commercially realistic for retailers and acceptable to the Government as correctly reflecting all the tax changes—the abolition of SET and purchase tax as well as the introduction of VAT. All this has, of course, been on the provisional basis of last year's Finance Act. The trade organisations could not have been more co-operative with the Government.
  I am grateful also to those consumer bodies and others who have already published fair and balanced forecasts of price changes, on the basis of the pro-
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  visional rate of VAT. Some newspapers and magazines in particular, have in this respect performed an invaluable public service.
  From some other quarters, there have been totally misleading statements about the consequences of the changeover from purchase tax and SET to VAT—some of them, I am sorry to say, made in this House.
  What we shall do, therefore, in this newspaper and television campaign is to give the nation the facts. We shall give the housewife clear information about how the changeover will affect her.
  We shall set out in newspaper advertising and in leaflets a list of more than 150 main items of consumers' expenditure, and show how as a result of the tax changes their prices are likely to move. If any member of the public finds that prices in a particular shop have changed in a way which is out of line with this Shoppers' Guide he or she will be able to complain to the Weights and Measures Inspectorate—[Interruption.]—as we were requested by the TUC to do during the tripartite talks—who will be empowered to investigate whether the retailer has properly reflected the tax change in his prices.

Charities (VAT and Covenants)

  VAT and Charities
  As a result of consideration in the course of the year, there will be two changes concerning VAT and charities—one comparatively minor and the other of considerable importance to those running charity shops.
  One of the points to which some charities have attached importance is that goods exported by a charity, for example to assist the victims of an overseas disaster, might bear VAT. This is not what was intended, and an order will be laid which will ensure that all exports by a charity are zero-rated.
  Perhaps the greatest anxiety about the effects of VAT on charities has been in respect of sales of donated goods by charity shops. The many voluntary workers in these shops are being increasingly successful in raising substantial sums for deserving causes.
  In the light of advice from a number of charities, I have decided that the best course is simply to zero-rate the sale in

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  a charity shop of all goods, both new and used, which have been given for resale to a charity established for the relief of the distressed. There will be no limit to the relief in respect of the value of goods donated by private individuals, and the relief will extend to gifts from stock by registered traders up to the statutory £10 limit for business gifts. The necessary order will be laid today. This change will be of very great help to charity shops and I am sure it will be welcomed by the charities concerned.

  Covenants
  There is one further matter concerning charities which it is convenient to deal with at this point. It arises as a result of the new system of unified income tax.
  Under the new system, charities which receive income under covenants for a net sum—that is a covenant which expresses the amount to be paid as a fixed sum after deduction of tax—will receive a smaller repayment of tax because the new basic rate tax of 30 per cent. is less than the old standard rate tax of 38·75 per cent.
  This is, of course, a problem which has arisen whenever the standard rate of income tax has been cut. Nevertheless, I have received many representations that the resulting cut in the income of charities will create considerable difficulties for them, because they are committed in the coming years to expenditure which they had expected to be financed out of covenants made before the 30 per cent. basic rate was announced in 1971. New covenants need of course cause no problem, because they can take account of the change. I believe that the charities have a convincing case.
  There will therefore be a scheme of transitional relief for charities which should relieve them of their difficulties. Under this relief, charities making tax repayment claims in respect of charitable covenants will be able to claim a supplementary payment for the four years from 1973–74 to 1976–77. This payment will be based on the tax repaid to them in respect of net covenants for the year 1971–72. For 1973–74 it will be the difference between that amount and what would have been repaid had the standard rate been 30 per cent. in 1971–72: for
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  1974–75 it will be 75 per cent. of that difference: for 1975–76 50 per cent. and for 1976–77 25 per cent. These payments—which will be borne on a special subhead of the Inland Revenue Vote—are estimated to cost about £3 million in 1973–74 and some £7½ million in all.
  I should perhaps add that there is no case for continuing payments of this sort indefinitely. The reason is that most covenants are for seven years, and that by 1977–78 almost all payments will be under covenants made in the knowledge of the new system, which those entering into covenants will have been able to take into account.
  The House may know that the National Council of Social Service has circulated a report which assesses the effect of the various changes in taxation which I made in last year's Finance Act. The Council selected a sample of 95 charities, but they did not all respond. However, 52 provided information which, in the view of the Council, was sufficient for the survey. Of those 52 charities, 42 were charities engaged in the relief of the distressed. While I must, in fairness, say that I do not accept some of the assumptions on which the report is based, the House should know that even on the assumptions and conclusions of the National Council itself, with the changes which I have just announced, those 42 charities will, overall, gain next year.
  The concessions to charities which I have made last year and this year are substantial. It has sometimes been suggested that charities should not be expected to bear VAT at all. But it has never been accepted by any Government that charities should be relieved of all indirect taxation, and they have always borne purchase tax on the goods they have purchased.
  Taking into account the estate duty and capital gains tax concessions I made in last year's Budget and the concessions which I have just announced, there can be no doubt that the net benefit to charities as a whole substantially outweighs the cost of the changeover to VAT. Taking full account of the changeover to VAT, the cost to the Exchequer of the concessions to charities which I have made in these last two Budgets is estimated to be of the order of £20 million in 1973–74.

  Young Children's Footwear
  In the course of last year's debates, I promised to set up a Committee to consider the special problems of VAT and children's shoes. That committee, under the chairmanship of Mrs. Alison Munro, was asked to consider to what extent the price of children's footwear contributes to the incidence of foot abnormalities, if it is possible and desirable to define approved standards of footwear for young children, and if so to explore ways of encouraging the wearing of footwear to these standards.
  The committee's report is being published today. When hon. Members have had an opportunity to study it, I am sure that they will join with me in congratulating and thanking Mrs. Monro and the members of her committee for producing such an excellent and wide-ranging report.
  The report recommends that there should be prepared a standard for young children's shoes, which would include basic minimum design features. In the long term, relief from VAT should apply, not to children's shoes generally, but only to shoes conforming to this standard and sold through outlets conforming to agreed standards of stockholding and fitting services. Because the drawing up of an approved standard will take time, the report recommends that, for the present, young children's footwear conforming to the present purchase tax exemption should be zero-rated for VAT. Everyone on both sides of the House will be pleased to know that I accept that recommendation. As far as the longer term is concerned, I am considering the practicalities of the proposals with my right hon. Friend the Secretary of State for Social Services.

  Young Children's Clothing
  As far as VAT and young children's clothing is concerned, we went over this ground at great length during last year's debates, and I can sum up my decision by saying on Shrove Tuesday, the traditional day of repentance: "I was wrong". It will be zero-rated.
  But it is essential that the criteria should be altered. And for this reason. One of the aspects of this matter which has throughout troubled successive Chancellors has been the very considerable
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  abuse of the relief for young children's clothing. It has been estimated that as much as 25 per cent. of so-called young children's clothing which is exempt from purchase tax is in fact worn by adults. This is, of course, to make a complete nonsense of the relief, and unfortunately it is no part of my responsibility as Chancellor of the Exchequer to add to the many advantages already enjoyed by slim and nubile young women.
  I therefore asked Customs and Excise to see whether they could not work out a more restrictive scheme, in order to cut the abuse to the minimum. This they have done, though they will, I suspect, have needed all their ingenuity to deal with a situation where, for instance—so the Customs experts tell me—the waist measurement of the current Miss World is that of an average young girl of 12.
  The cost of zero-rating young children's clothing and footwear will be £35 million in 1973–74, and £55 million in a full year.

  Purchase Tax Food
  There is one other tax which falls heavily on families with children. It is a tax which started at a rate of 15 per cent., and was three times increased, in July 1966, in March 1968, and again in November 1968, first to 16½ per cent., next to 20 per cent. and then to 22 per cent. I refer to foods, other than pet foods, which are at present charged to purchase tax—mainly all kinds of confectionery, and ice cream, crisps, soft drinks and so on.
  The day has passed when these items can seriously be regarded as luxuries in the old sense of the word. They are bought by all sections of the community, and expenditure on these foods is now running at over £1,000 million a year. I have decided that they should be entirely relieved of tax—in other words, zero-rated for VAT. An order is being laid today. The cost will be £75 million in 1973–74, and £110 million in a full year.
  The two taxes which have borne directly or indirectly on food have been purchase tax and SET. In March 1971 I announced that SET was to be cut by half, and in July 1971 purchase tax on food was cut from 22 per cent. to 18 per cent. As from the 1st April both purchase tax and SET will be abolished and, as a result of the decision I have just announced, all food sold in the shops

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  for human consumption will be relieved from VAT.
  By way of contrast, at the rates in force when we took office, the yield of purchase tax and SET on food would next year have been £225 million. I am sure that this change will be welcomed in all parts of the House.

  General
  To put the change in the system of indirect taxation into perspective, the phased changeover from purchase tax and SET to VAT will mean that, compared with the rates of purchase tax and SET in existence when the changeover was announced, the yield of VAT on a full year basis will be about £900 million less than it would otherwise have been.
  Whatever may be the views of individual right hon. and hon. Members about the change in the system of indirect taxation, I am sure that the whole House will join me in paying tribute to Her Majesty's Customs and Excise and to my hon. Friend the Financial Secretary, who has borne the brunt of the detailed work.

  SOCIAL SECURITY BENEFITS
  I come now to pensions and social security benefits. First I should remind the House that the prescribed amounts for Family Income Supplement will be increased next month by sums varying from £1 to £2.50 depending on the size of the family.
  The House will recall that until last year, it had been the practice for pensions and related benefits to be reviewed only once every two years. No one has doubted that we were right to change that, and to provide for a review every year.
  My right hon. Friend the Secretary of State for Social Services will tomorrow be making a full statement of the Government's proposals but, so that those proposals can be seen in the context of the Budget, I will—as in the previous two Budget Statements—give the House the background to our decisions and the substance of those decisions.
  One of the main points of agreement in the tripartite talks last autumn was that the more the Government and the
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  nation act together to counter inflation, the more the low paid, the pensioners and others least able to protect themselves will benefit. It is a fact of life, which is all too obvious to the pensioners, that whatever the Government—any Government—decide to do to improve the position of the pensioner, the result depends on the rest of the community not trying to grab more than their share, and also on being willing to pay the cost.
  My right hon. Friend the Prime Minister in introducing the Government's counter-inflation policy, pledged that the pensioners would share in the growth of national prosperity. The first fruit of that pledge was the special once-and-for-all payment three months ago of £20 for a married pensioner couple and £10 for a single pensioner. I hope that everyone in the country will note that it is because we are determined that the counter-inflation policy shall succeed that we are able to make a further real improvement in pensions.
  We believe that it is right this year to give priority to pensions and supplementary pensions, the increase of which will therefore be greater than in the case of other benefits.
  Short-term benefits—that is, primarily sickness and unemployment benefit—and the basic rates of supplementary benefit will be increased by £1 a week for a married couple and 60p a week for a single person.
  Last year the increase in the pension for a married couple was £1.20 and for a single person 75p. This year the pension will be increased by £1.60 for a married couple to £12.50 and by £1 for a single pensioner to £7.75. In addition, of course pensioners and others receiving social security benefits will stand to gain substantially from the Government's other measures such as rent rebates and allowances. The total cost of all the improvements in national insurance benefits is estimated at about £500 million in a full year. This, of course, leads me to the consequent increase in contributions.
  The largest share of the increase in contributions will again be met by the employers' contributions, and the increases in employees' contributions will be wholly earnings related. As previously, there will be flat-rate increases

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  for the self-employed and non-employed. The Exchequer will continue to contribute about 18 per cent. of the total revenue from contributions. These are the details.
  The employers' flat-rate contribution for men will go up by 14p. The earnings ceiling for graduated contributions will be raised from £48 to £54 a week, and the rate of graduated contributions will go up by 0·25 per cent. on earnings between £9 and £54 a week.
  Next, the employees' flat-rate contributions. Last year they were not altered at all. My right hon. Friend and I think that it would be wrong to leave them unaltered this year. In order to protect the lower paid, the employed man's flat-rate contribution will therefore be reduced by 4p a week. This will mean that for all men with earnings below £24 a week, their total payments will be slightly less than at present. I am sure that, in the context of the counter-inflation policy, the House will agree that this is right.
  It was announced in December 1971 that, with annual reviews, increases in pensions and related benefits would be paid in November. Because of the early Budget, my right hon. Friend has arranged for the date to be advanced to 1st October.
  With this latest increase, the pension will have been increased by the present Government in a period of just over three years by 55 per cent. in cash terms, or more than during the whole of the previous 12 years. Or to put the matter in real terms, over the same period the pension will have been increased by almost twice as much as the increase in prices. That is what my right hon. Friend, the Prime Minister, meant by promising that the pensioners would share in the growth of national prosperity.

  CONCLUSION
  But the old and the retired can be given a proper share of our rising national output only if others do not take more than their fair share.
  And in the interests of the pensioners, no less than of the nation as a whole, it is right that I should make one further point so that there is no risk of misunderstanding. In the past the situation during wage negotiations was one where it was always possible to argue that a week or two on strike, or some other form of industrial action, would result in a compromise and an improved offer.
  Today the situation is quite different because the Government have for the time being laid down, in the interests of the nation as a whole, clear and definite limits on pay increases. In these circumstances it is inconceivable that any Government could agree to a dispute being settled by an offer outside the limits laid down. And it follows that industrial action which sets out to achieve that will merely make the nation poorer, and no one richer. As a people we can now show, for a welcome change, that militancy does not pay, and that responsibility, moderation and common sense will prevail.
  The central objective of this Budget is to maintain the economic expansion which we have sought for so long, and which we are now at last achieving. And to succeed we must all—Government and nation alike—be steadfast in our resolve to control inflation. Only in this way can we give the British people the opportunity to create a new wealth and a new strength for our country. And we mean to do just that.

  ROYAL ASSENT
  Mr. Deputy Speaker (Sir Robert Grant-Ferris): I have to notify the House, in accordance with the Royal Assent Act, 1967, that the Queen has signified Her Royal Assent to the following Acts:

  1. Atomic Energy Authority (Weapons Group) Act, 1973.

  2. Housing (Amendment) Act, 1973.

  3. Glamorgan County Council Act, 1973.

BUDGET RESOLUTIONS AND ECONOMIC SITUATION

  AMENDMENT OF THE LAW
  Motion made, and Question proposed,
  That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance; but this Resolution does not extend to the making of amendments with respect to value added tax so as to provide—

  (a) for zero-rating or exempting any supply;

  (b) for refunding any amount of tax;

  (c) for varying the rate of that tax otherwise than in relation to all supplies and importations; or

  (d) for any relief other than relief applicable to goods of whatever description or services of whatever description.—[Mr. Barber.]

  5.32 p.m.
  Mr. Harold Wilson: The House will once again agree with me in the tribute that it is usual to pay to the Chancellor of the Exchequer on his presentation of the Budget. Over the past three years we have become accustomed to this regular pattern and the right hon. Gentleman's style of presentation. On Budget Day the right hon. Gentleman invariably presents his speech agreeably, fluently, clearly and—as far as the subject matter allows, as it did once or twice again today—entertainingly, what with his utility shoes and his nubility ratios of young ladies, however measured, and I have no hesitation in congratulating him on behalf of the House yet again.
  It has not passed the notice of the House that what should have been and should always be a restful weekend of mental and physical preparation has for the right hon. Gentleman this year been a time of very heavy strain, not only physical but set by the gravity of the decisions and the policies that he has been forced with his colleagues to examine at home and in Brussels. It was a pity that this should happen on the very eve of the Budget presentation.
  Just as the right hon. Gentleman's style of speech is part of a regular pattern, so we have seen other regularities. For example, as well as my own regular congratulations to the right hon. Gentleman there are usually the full-throated cheers of his right hon. and hon. Friends when
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  he sits down. I thought that they were a little muted today compared with last year—[Interruption.] If Government supporters want to make up for it now I do not mind. But another part of the pattern each year when this has happened has been my warning to those right hon. and hon. Members who have cheered him that the Budget which they cheer in April will not look the same in the late spring or early summer, by which time the Chancellor's Budget has become as though it had never been and we have the usual mini-Budget or new Budget about the middle of the year not quite so tastefully presented but usually heralding a major lurch or change of direction in Government policy.
  The same will again prove to be true this year. That would have been the case even without this week's monetary crisis. The proposals in the right hon. Gentleman's speech were quite clearly drawn up before the crisis occurred. Whatever the decisions in Brussels, the right hon. Gentleman will have to reconsider the whole of his policy in the light of those decisions, whatever they are. If the outcome of the Brussels decisions is that no attempt is made to fix the parity, he will have the support of the Opposition. He knows that to fix it too high would make us vulnerable to a future orgy of speculation because the speculation would be spurred on rather than sated by the success of speculations against the dollar. On the other hand an attempt to insure against that by fixing a very low parity is simply a prescription for forcing up food and raw material prices, reinforcing inflation and increasing the already excessive payments that we have to make to Europe. So the Chancellor has the Opposition's support in all that we believe he is trying to do in his discussions in Brussels and elsewhere in Europe.
  Even without the monetary crisis, the Budget—and we admire the right hon. Gentleman's ingenuity—is posited on a cruel dilemma created by the exuberance of the right hon. Gentleman's earlier actions and the expectations raised by the Prime Minister in the General Election and in his subsequent actions. The right hon. Gentleman has asserted again that the economic growth rate is on target, and, with the usual allowance for the deficiencies in the various figures, there is

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  strong evidence to support its continuing at the rate which he has been describing. The right hon. Gentleman knows that the reality underlying that growth rate is associated with—not only concomitant with but causally associated with—a prodigal dissipation of the balance of payments surplus of £650 million that we bequeathed to him in 1970 with a built-in momentum carrying it to over £1,000 Million in 1971—[An HON. MEMBER: "What about the debts?"] We did not get from the right hon. Gentleman today the extent to which during our period in office we built up a surplus in non-Government debts and, since this Government came to office, the extraordinary amount of borrowing by British industry and British finance which has been part of this whole transaction.
  The £1,000 million which the right hon. Gentleman enjoyed in 1971 has gone. The estimates for this year by various competent authorities vary from a £500 million to a £1,000 million overall deficit. The trade balance has worsened by £1,000 million in a year—that is, over the last year. It is still deteriorating. The National Institute, in its on the whole friendly and optimistic review of the right hon. Gentleman's prospects, forecasts the visible trade balance for 1973 at £1,625 million. The Department of Applied Economics, Cambridge, warns of a £1,000 million balance of payments deficit unless the growth rate is cut. It seemed to me that what the Chancellor said about the prospects for trade was unusually complacent in the light of what has been happening recently.
  The problem of the parity, whether under a free float or under some new fixed régime, is not the right hon. Gentleman's only dilemma. He and his colleagues have boasted—he did it again today—of the tax cuts of the past 2½ years. They are not due to the right hon. Gentleman's providence. They are not due to cuts in Government expenditure, which the Prime Minister told us in the last election would alone be the means of getting tax cuts. Government expenditure has increased more rapidly under this Government than under any previous Government. The tax cuts that have been made have been financed as a result of Government borrowing—in fact, by deficit financing at this time.
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  In the last fiscal year of the Labour Government the net borrowing requirement was negative. It was a debt repayment of £1,117 million. Taking the financial years for which this Government have been responsible, in 1971–72 there was net borrowing of £515 million. I do not know whether that has been varied with the figures that the Chancellor has examined today. I thought I heard the right hon. Gentleman say—he will correct me if I am wrong—that there will be about £2,800 million net borrowing, and next year, with all the qualifications that he made, he spoke of an even higher figure than I have seen estimated. The CBI speaks of a figure of £4,000 million, but the Chancellor spoke of £4,423 million before making certain qualifications on how it has been reached.
  So expenditure has not fallen. Under this Government expenditure has risen more rapidly than at any time in our history. I sometimes read the suggestion that it is rising more rapidly than at any time in peace time. In fact, it is not only in peace time: but, on figures I saw today—I should like to check them further—it looks as though the Government's borrowing requirement now is greater even than in the years of the war.
  Sir Harmar Nicholls: The right hon. Gentleman ought to check them.
  Mr. Wilson: I did as far as I could, but I was waiting to hear the Chancellor's figure.
  We have the unanimous report of the Select Committee on Public Expenditure. The December forward projection, compared with that of November 1971, showed an increase in expenditure over the coming year of £1,200 million. Some have estimated £1,500 million as the increase of expenditure over a single year compared with what was forecast for this year. According to the Select Committee, only £200 million was counter-cyclical in the form of measures to deal with developing unemployment on the Select Committee's two-year criteria.
  Though the October 1970 expenditure programme, which we had soon after this Government came into office, cut Labour's forward projection by £942 million, all that survives of those cuts is the miserable saving from the denial of school milk. From November 1972 expenditure has

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  increased by £482 million compared with £1,213 million over the past year. The Select Committee reports that the increase over the Labour Government's spending proposals for this year has now increased net by £750 million. On top of this we have the increase in the money supply.
  I asked the Prime Minister recently about interest rates. We have heard little about these today, except the big figures for national savings. Interest rates are rapidly becoming about the most cost-inflationary element in the business, to say nothing of the inevitable effect—I was surprised that the Chancellor did not deal with this today—on building society mortgages for young would-be owner-occupiers on whom the Prime Minister, as we all recall, lavished so many insincere Central Office glycerine tears during the election. What will be the effect of the new National Savings incentives—I agree that they reflect only the conditions in the market—on the volume of funds available to building societies and through building societies, at whatever rate they may have to be, for young would-be owner-occupiers?
  I was surprised that the Chancellor did not deal with the effects of the so-called free market in the City. If it could ever have worked, if one felt that this particular notion of a free market in the City could have worked, it certainly cannot work against the background of a £4,000 million borrowing requirement. Many hon. Gentlemen opposite, as well as many people in the City and in industry, know that. It cannot function against the background of a totally demoralised gilt-edged market in a situation where on one day of the week the joint stock banks' base rates go up and, a few days later, bank clients' inter-bank dealings leapfrog over them until the base rates again join the leapfrog game.
  The whole process is aggravated, as is the foreign balance, by the volatile Eurocurrency markets. I was surprised that the Chancellor did not deal with that to any extent today in his two-hours otherwise informative speech. How much he might have told us of his estimates—I hear different estimates—of the total volume of the Euro-currency market, but none of the authoritative estimates seems less than 100 billion or indeed 120 billion dollars or beyond. We had reason
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  last year to feel the effect on our balance of payments, but equally it is making utter nonsense of monetary management and therefore forcing up interest rates in the City.
  I now come to the Chancellor's more important announcements. We heartily welcome his conversion on the subject of children's clothing. He has been a very slow learner, but we are happy that he got there in the end. I have no doubt that certain newspapers will claim the credit by their belated campaign. I am sure they will. They did not report us when we raised this matter last year. They did not report our vote and they did not report the vote of the right hon. Gentleman and all the specious arguments that he then employed about children's clothes, which we are glad to see he has forsworn today.
  In one of his earliest points, the Chancellor referred to the payment of tax credits to mothers. So far as we understood his formal words, we welcome this. As some of us said in the debate on the Address, this should never have been in question. I am glad that the right hon. Gentleman put the position right today.
  On oil in the North Seas—I presume that what the Chancellor was saying referred to the Celtic Seas as well—we welcome the decision about their liability to corporation tax and non-relief losses in the Middle East or elsewhere. We also welcome the provision to see that these measures are effectively backdated to prevent any of the bonanzas that they were hoping to get away with before he acted. As many of us have argued, it means having the equivalent of posted prices, which was inevitable in what the right hon. Gentleman said this afternoon.
  However, we must ask him—we shall want to examine this—whether it goes far enough. Although it is not comparable with the Norwegian settlement in respect of the Egofisk field, or, unless the Chancellor or another Minister corrects this later, with the kind of domestic revenue enjoyed by Governments in the Middle East and, I believe, in substantial parts of Canada and the United States, it is a step in the right direction. It is a big change from the time when the Government, instead of auctioning off these things, were handing them over at a few hundred pounds each—each of which was capable of making hundreds

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  of thousands or millions of pounds of revenue.
  I welcome what the Chancellor said on the dependent relative allowance and age exemption.
  On building land, after all this thought, it is a bitter disappointment that the Chancellor has not more to propose to us. He must realise the relevance of this matter to the whole appeal that the Government are making for a prices and incomes policy. In a year when people have been tightly held down on incomes and are being hard hit by rising prices, it is offensive, indecent, obscene and a total breach in the Government's proclaimed policy that people can make fortunes literally in an afternoon and go on television and boast that they have made a quarter of a million pounds on a property deal in this way.
  Although it looks as though the right hon. Gentleman is going to act, up to a point, I must warn him that he has left it far too late. The damage has been done. Vast amounts of public and private householders' money—it will probably run into several hundred million pounds—have poured over the dam while he dithered about and refused to act. Certainly he has not done anything now to ensure what I think would be the wish of everyone on this side of the House, and I hope some hon. Gentlemen opposite, that values created by the community should accrue to the community that created them.
  I did not hear the right hon. Gentleman say very much about the empty offices. There was his proposal for a building withholding tax, or something to that effect—we can check his phrase later—but it seems to me that this is not the way to deal with the scandal of unused sites and of unused buildings, some of which have been standing empty for years. What the Chancellor should do, if he is not going to act himself, is give the local authorities full powers to rate those buildings, not merely on a permissive but on a mandatory basis. They should be mandatorily rated, and I see no reason why the rate percentage should be limited to 100 per cent. Again, it is offensive in this situation that these properties are not used, and the rates could well go up to 150 per cent. or 200 per cent. per annum.
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  On VAT, we consider that the Chancellor's 10 per cent. decision is deplorable and inflationary, however he tried to erode it by certain exemptions. I have referred to children's clothing. Some of his decisions on charities are very much welcome, although some of my right hon. and hon. Friends and the charities themselves will want to study how far they go. There are still some very important charities, I think, which have not benefited in a way which would have been right and reasonable. We welcome his decision, of course, on sweets and confectionery, but it is a bit of a mockery if that is his answer to the problem of rising food prices.
  What was significant about this speech —agreeable though it was—was the long list of things with which the right hon. Gentleman failed to deal. He failed, over a large field, to deal with rates. What he said may help in some cases, but it will be very unjust, very arbitrary in how it affects different local authorities, very unequal in incidence, by relating it purely to revaluation.
  The right hon. Gentleman did not provide, particularly, for some of our big cities, our older cities, our big urban areas, where the problem is not so much revaluation—in some cases not at all revaluation—as one of inflation in the fulfilment and operation of essential community services. With the cost of these services going up inevitably, with the services being required—I have not heard the Government say that the services should be cut—I am very disappointed, and I think that the local authorities and the ratepayers will be disappointed, at what seems to me a very limited, tinkering approach to this problem.
  I was surprised that when he talked about the regions—I do not think that I missed what he said on this—the right hon. Gentleman did not tell us what his policy will be for REP. Surely that is one of the most essential things. He told us a bit about the regions but he should have made the announcement about REP this afternoon. It has been long delayed and the right hon. Gentleman is being pressed for a decision by many people who at one time were against it, including, I think, the CBI.
  Also, I had hoped, when he talked about the regions and the community, that the right hon. Gentleman would

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  state firmly and clearly that the Government will not allow any of our development or intermediate areas to be scheduled as part of the central areas of the Community, as is being currently proposed by M. Borschette, the Commissioner for Competition.
  Those are some of the things with which the Chancellor did not deal. Even when he referred to the threshold, he did not deal with the problem of fiscal drag over the past year. How many of those of whom he spoke, who last year were eased because of the effect of inflation and were therefore eased in taxation by his pound a week proposals, are now paying more tax as a result of inflation?
  But, above all, the Chancellor has not dealt with food prices in the slightest, although that is the main item entering into most family budgets. He has not dealt with housing, he has not dealt with, or announced a suspension of, the increase in council house rents due to come in next month. He has not announced any suspension or stop in the process of decontrol in privately-rented houses.
  On the other side—this is what makes the whole economic policy, taking into account the prices and incomes policy, such a totally unfair package—he has not said that he is going to halt the —300 million and more relief voted in the last Budget for the wealthiest taxpayers, many of whom will be automatically taking home, after deductions, a figure much bigger that the total amount that the richest person in the country can hope to get under the prices and incomes policy. They are limited to 5 per cent. The wealthiest taxpayers, including some who are dependent on unearned income, will have a lot more take-home or sent-home than that. This is a condemnation of a fundamentally unfair economic and social policy. It is because it is unfair that, increasingly, the Government will find that it is unworkable.
  So, however agreeable his presentation, the Chancellor cannot get away from the economic background to the Budget—the biggest increase in the cost of living in our peacetime history, indeed, going up at a more rapid rate than even in the years of the last war; the fact of 18 months of unemployment of over 750,000—the figure that the Prime Minister repeatedly forecast in the last Parlia-
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  ment would happen under the Labour Government, although we never came within a long distance of it; a record trade deficit against a record inherited surplus two years ago; the virtual certainty of a record balance of payments deficit; record interest rates; record house prices; record land prices; the lowest house building figures since the Tories were last in office; the lowest public authority house building for over ten years; two devaluations in eight months, three in fourteen, now amounting—[HON. MEMBERS: "Rubbish."] Oh, yes. [HON. MEMBERS: "Hear, hear."] These devaluations are being paid for by the pensioners. They are being paid for by everyone who is paying high prices in consequence. We had to devalue, after inheriting an —800 million deficit. The Tories have three times devalued after a —1,000 million surplus.
  Theirs has been a miserable record in industrial investment. Why did not the Chancellor mention the record of industrial investment announced this morning —manufacturing investment down by 18 per cent. last year when compared with the previous year? Was that the kind of glowing economy that he was trying to draw to our attention today? Is that why he said that industry is better prepared now to take advantage of rising world markets?
  Finally, industrial relations. More man-days were lost through disputes last year than in nearly six years of a Labour Government—[An HON. MEMBER: "Whose fault was that?"] The fault of this Government and that Prime Minister—the man who was going to solve all the strike problems, who embittered them with the Industrial Relations Act and with his confrontations and with his arrest of the dockers and so on. No, Sir—that is the reality underlying this Budget. That is the reality that we shall see more clearly as these months go by.
  Therefore, I end my compliments to the right hon. Gentleman as I began them —with a tribute to his agreeable presentation, though very unevenly to his content. It was, of course, anything but a maiden speech. The Chancellor lost his fiscal virginity a long time ago. Nevertheless, in terms familiar in this House, we shall expect to hear from him again in the very near future.
  Several Hon. Members rose—
  Mr. Gerald Kaufman: On a point of order. The Chancellor, in his Budget statement, said that the Secretary of State for the Environment would be making a statement on rents. Could the Leader of the House say whether this statement will be made to this House or outside the House?
  Mr. Deputy Speaker (Miss Harvie Anderson): That is not a point of order.
  5.58 p.m.
  Mr. Percy Grieve: I was very sorry that the obligations of political faction constrained the right hon. Gentleman the Leader of the Opposition to refuse to my right hon. Friend's Budget the credit and welcome it deserves. I do not believe for one moment that the right hon. Gentleman's reaction will be that of the country as a whole. In my right hon. Friend's Budget there appear to be concessions and advantages for the whole spectrum of our community.
  I begin with a welcome to the increase which is provided for pensioners. As my right hon. Friend the Chancellor said, in the comparatively short time during which the present Government have been in office they have done more for the pensioner than has been done for years previously, and certainly during the whole period of office of the Government over which the present Leader of the Opposition presided.
  The right hon. Gentleman made it a feature of his criticism that my right hon. Friend had not given way to pressures which have been brought upon him in a great many quarters to go back upon the tax concessions and tax reforms which he promised and has formulated in the last two Budgets. I am extremely happy that my right hon. Friend has had the courage of his convictions, which I profoundly believe are to the advantage and interest of our country.
  The Leader of the Opposition referred to a fall off in industrial investment. But what greater cause has there been over the years for a decline in industrial investment than the penal taxation for which Chancellors of the right hon. Gentleman's Government were responsible year after year? The concessions which have been made, and have been so much criticised by the right hon. Gentleman, to the holders of investment income were no more than a small recompense for the
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  years in which they suffered completely penal taxation.
  I represent a constituency in which a large number of retired people are living on investment incomes, the fruits of a lifetime of saving and of the sale of the businesses which they have built up. My constituents in that class year after year, found that their incomes were eroded by the Labour Government's penal taxation. I get letter after letter from constituents rightly telling me that their standard of living when they retire falls away completely.
  The concession which my right hon. Friend has made with regard to the first —2,000 of investment income is a modest concession which will bring a great relief to many who have served the country well throughout their lives, who have not relied on pensions for their retirement but on savings, and who find that as a result of the highest rates of direct taxation in the western world they are very hard put to it to maintain a reasonable standard of living in their retirement.
  Regarding the provisions relating to taxation, I particularly welcome the concessions on death duties. As my right hon. Friend said, it has been grotesquely unfair that, certainly as far back as I can remember, estate duty has been payable on the values prevailing at the date of death. The position has frequently been reached, where a slump has followed the death of someone who has left a provision for his family, that the assets of the estate have sometimes not been sufficient to pay the duty. The reform proposed by my right hon. Friend, which we shall see incorporated in the Finance Bill, is that new rules are to be laid down for valuing assets at the date of sale. That is a welcome concession to a very large number of people, some of whom are of quite modest means, and to their dependants when they die.
  I am sometimes horrified by the fact that when a breadwinner dies his widow and family not only lose their staple support but, by reason of death duties, find that their whole standard of living is completely cut away. The concessions which my right hon. Friend made in previous Finance Bills with regard to the first —15,000 of capital left, and then the —15,000 left to a spouse, have gone a long way to remedy this difficulty. The

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  concessions on valuation now made are an extremely important mitigation of the burden of estate duty.
  I hope that my right hon. Friend the Chancellor and my hon. Friend the Financial Secretary will not refrain from further investigation of the whole problem and weight of estate duty. I have always thought that if we had much more moderate duties on death than those we have at present, people might well not feel compelled to take the measures of avoidance which they now take, often at very considerable sacrifice to themselves, by making over money to their children during their lifetime. The yield from estate duty, were it more moderate, might be greatly increased.
  So far, so good. I congratulate my right hon. Friend upon the concessions made so far. There is another matter which I should have been happy to see dealt with in the Budget, and my hon. Friend the Financial Secretary knows what that is as I have written numerous letters to the Treasury about it. That is the problem of the taxation of the income of married women.
  One of the first things done by the present Government, a laudable thing, was to give the option of separation of the incomes of husbands and wives when that income was earned income. I could do nothing but applaud that. But by concentrating on earned income the Government have committed yet a further act of discrimination against investment income. It is surely grossly unfair that a married woman with an estate of her own should find herself poorer on marriage and paying more tax on her income, through her husband, than she would have paid had she remained single.
  At a time when Women's Lib is rightly a cause in respect of which many hon. Members have nailed their flag to the mast, it is surely a matter for comment that in many cases it would pay people, in respect of their taxation position, to live in sin rather than to get married. If we are to avoid discrimination against women it is vital—sooner or later we must come to it—that married women should be given the option of paying tax separately as single individuals upon their incomes and that these incomes should
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  not be aggregated with those of their husbands. I have taken up this matter with Treasury Ministers on numerous occasions over the years and I make no apology for raising it again today. It does not in any way detract from my congratulations to my right hon. Friend upon his Budget, which continues the right policy for the economy of this country, a policy of concentrating on growth while trying to beat inflation.
  Every passage of the long, careful summary of my right hon. Friend as he introduced his Budget was redolent of the importance for the future of our country and its present prosperity of combining those two objectives and carrying them through to a successful conclusion.
  I should like to welcome some other provisions in the Budget. I do not believe that any hon. Member would not congratulate my right hon. Friend on his decision with regard to children's shoes and children's clothing, a matter which has greatly disturbed the public and on which I have received numerous letters from constituents. No one will withhold congratulations to my right hon. Friend for the concessions he has (made with regard to value added tax and charities. To be particularly welcomed are those provisions dealing with goods which are sold in charity shops. I have on my desk at present a lengthy petition from supporters of Oxfam in my constituency. They will go to bed happier tonight in the knowledge that the work which they put into this noble cause is to have the support of the Chancellor through the tax concessions which have been made.
  I end this short appreciation of the Budget, made, as such an appreciation must be, on the spur of the moment, just after the Chancelor has outlined his Budget to the House. I end where I began. This Budget as I see it contains something for every member of the community. The Leader of the Opposition, who indicated to me as he left the Chamber his regret at having to leave, said this was not a fair Budget. I believe that when it goes out to the country it will be seen to be extremely fair, carefully balanced to preserving growth and giving all the concessions that can be given to every person throughout the community. I congratulate my right hon. Friend.
  6.11 p.m.
  Mr. Roy Hughes: The hon. and learned Member for Solihull (Mr. Grieve) said that in his opinion this was essentially a fair Budget. I thought that the distribution was inequitable, but I agree with the concessions that have been made to the pensioners and I welcome the increase of —1·60 for married couples and —1 for single persons. I also welcome the improvements in the supplementary allowances, and the concessions on food are to be welcomed.
  But not so welcome are the concessions on confectionery, ice cream, crips, chocolates, sweets and so on. I speak as a father of three young children and I feel that these concessions are too generous. Certainly, they will provoke a lot of dental troubles and my children already have too many of these commodities.
  There are to be concessions to charities in respect of value added tax. I have written on numerous occasions to the Chancellor about the problem and I am glad that he is taking action and is granting the necessary concessions. My right hon. Friends have been engaging in considerable agitation for a long period on the vexed question of children's clothing, so again we welcome that the Chancellor has taken note of our representations.
  The principal subject I want to deal with concerns rates. Certainly the Chancellor has recognised the problem by granting the concession—a sort of subsidy—for half the cost of increases above 10 per cent, for ratepayers for the period 1973–74. He has estimated the cost at some —10 million. The concession to confectionery will cost about —110 million and I would have preferred to see the figures the other way round.
  The Chancellor admits that there is a problem but as I see it, and as the Leader of the Opposition has pointed out, he is tackling it only by dealing with revaluation whereas, of course, inflation has been an equally large problem in local government. Many local authorities are in a desperate position and I can only quote the position of my local authority. After all, charity begins at home. The Town Clerk of Newport wrote to the Prime Minister a few weeks ago pointing out that according to his authority's estimates it would need an increase in the rates of
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  36 per cent. After certain discussions had taken place with the Department of the Environment the figure was reduced to 31 per cent. but this will still be a colossal increase. In my constituency some domestic ratepayers would be faced with increases of no less than 90 per cent. in their rate demands, and this is a serious situation.
  The Government, of course, for some time have been keen to take action against wages and this is what the Counter-Inflation Bill is all about. They have done little directly to control food prices in line with what the TUC has requested. They regard this as something approaching an impossible task apparently, yet two countries in Western Europe—Sweden and Austria—are adopting these practices.
  House prices last year rose by 47 per cent., and rents have been increasing at a similar rate. Much of this is due to the pernicious Housing Finance Act. One would have thought that the Government, who are allegedly going all out to combat inflation, would have been more generous in their assistance to the ratepayers in the difficult situation they now face.
  Certainly, revaluation has twisted the balance from industrial and commercial properties to the domestic ratepayer. A fortnight ago an old-age pensioner from my constituency told me that the valuation of his flat had increased from —66 to —176, about a 250 per cent. increase. That is an indication of the berserk way in which valuations are acting upon owner-occupiers and tenants.
  Of course, their position has been influenced by soaring inflation in property values, quite apart from increased rents. It is reckoned, certainly in Newport, that tenants in post-war council houses would face an increase of over 15 per cent. and that approximately 2,000 of them would have increases of 50 per cent. or more. There is evidence of disproportionate increases in rateable values of council houses. I can only repeat that local authorities are facing the combined effects of inflation and revaluation but the Chancellor this afternoon seemed only to have recognised the problem of revaluation.
  Perhaps the most serious problem is that of inflation. The estimated expenditure in Newport for 1973–74 reflects the

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  increased cost of the existing services, quite apart from the growth of services, much of which is being encouraged by the Government. Certainly, the increase in the rate support grant has been insufficient to meet these increased financial costs. The Government originally requested that rates should be increased by only about 5 per cent. Again I can only illustrate what would happen in my own town. Such an increase would mean a severe cutback in services, but it could also mean redundancies. Already in recent months we have experienced a redundancy figure of over 2,000, and this therefore poses a serious problem.
  The Government already have power under the Local Government Act 1966 to increase the rate support grant at any time if they find that an unforeseen increase has taken place in the level of prices, costs and remuneration. The implementation of this section of the Act is surely justified in present circumstances.
  The Association of Municipal Corporations has called for differential domestic relief in defined individual circumstances, as it puts it—in other words, to restrict the total amount of increases to be paid by individual householders. The Chancellor has taken note of this point of view, I agree, by granting half of the 10 per cent. increase. But still more assistance is due to our local authorities. Again, I can give only the figures of my own town. If the increase were limited to 15 per cent. in Newport the cost to the Government would be —173,000. If the increase were limited to 10 per cent. the cost to the Government would be —230,000. The Chancellor should have second thoughts about this matter and grant these concessions to our local authorities which are at present having such a difficult time.
  6.21 p.m.
  Mr. Wilfred Proudfoot: This Budget has had the most peculiar run-up of any Budget ever. Floating the pound has left us almost insulated from the currency crisis. I am sure the remarks of the Leader of the Opposition have convinced the House this afternoon that, if he was not before, he is now a floater.
  The newspapers have not known what to say, except that the Budget would be a neutral one and would slap on even
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  more taxation. In my opinion virtually all the newspapers have it wrong.
  Listening to the Leader of the Opposition was like taking a stroll down memory lane. He has not found out that this country is in a new era. There is an entirely new ball game. The Government and the party to which I belong have entirely changed the parameters within which business and people work. Entry into Europe has also had something to do with this. The whole situation has changed.
  What has delighted me today, as I am sure it will delight those outside the House, is that the Chancellor has, correctly, identified the total determination of the Government to go for growth. I urge my right hon. Friends and hon. Friends in the Government not to read too many of the sayings of the economists and economic journalists. They have to keep writing their articles and in so doing they flit from one theory to another. Recently they were saying we have been growing too fast and that we could not sustain this rate of growth. I for one do not believe that. To a certain degree economic growth is almost a habit. Once we have achieved that habit we can keep on growing.
  It is foolish to pretend that everyone in this country likes growth. The environmental lobby says—and, incredibly enough, it has been saying it recently—that economic growth can destroy the environment. I believe that argument cannot be sustained and should be ignored.
  When discussing economic growth we must recognise that it means change and, with a 5 per cent. growth rate, massive change. It means the centres of towns being torn out and the construction of motorways to give access to the residents of the towns involved and surrounding towns so that the whole place may become more efficient. It means that slum clearance can go ahead at a faster rate. It means that everything we look at is in process of change.
  If our people do not want economic growth, the corollary is that they do not want change and they want to be left alone in the ways they know. It is impossible to opt out of the world in the way advocated by those who are fighting this change. This change is inevitably coming; the Government recognise it, and

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  they are working on the side of change. I am convinced it is right to do so.
  In the last few weeks the words "fine tuning of the economy" have started to creep into the sayings of the economic journalists. I do not believe the economy can be fine-tuned. It is a lumbering great beast. It is 55 million people's effort, or lack of effort. It is all the companies, the nationalised industries and the sum total of the efforts of the country. It is the sum total of what people do—whether they stay in or whether they go out and spend frivolously, or on consumer durables. This is what has happened. I for one do not believe that we can fine tune to the degree we have kidded ourselves we could in the past.
  Over the last two years when unemployment was rising, the Opposition shouted and howled at the Government about percentage increases, and so on. Then, when we started to turn the economy round—and it takes time to react—everybody agreed to changing the economy this way and to the expenditure of more Government money to trigger off growth.
  The Government did exactly that. Yet those fickle chaps who write the economic articles were saying only last week, "Whoa! We should be careful; it might have been right then, but now it is wrong to have spent that money to get rid of unemployment." These chaps who write in the newspapers have one responsibility —to sell newspapers and to entertain us when we read them. Indeed, newspapers have an entertainment value and they should be read from that point of view more often than from any other. Being a Government is a sensible business-like operation. I am sure the Government have matters right on this score.
  Let us consider for a moment how to run a country or an economy. Just as in any other business, there is a handful of figures. The chaps at the top look at that handful of figures and if one of the figures goes wrong, underneath each figure is another pyramid of figures to be looked at. We therefore look at the figures in our economy. One figure at which hon. Members on both sides of the House look is that of unemployment. If we look at the pyramid of figures below that figure, nobody, but nobody, believes them. The Opposition do not believe them, the Government do not believe
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  them and the businessmen in the country do not believe them.
  Mr. Harry Ewing: The unemployed believe them.
  Mr. Proudfoot: I live, and was born, in an area with 30 per cent. unemployment. When it comes to the emotional psychological impact of unemployment I have as much personal experience of this as any Opposition Member. But I do not think that that was the case. Indeed, on the local television channel I even got away with saying that the unemployment we experienced a year or 18 months ago was probably the healthiest we had ever had although that might have seemed a peculiar expression to use. I believe it was shake-out and that industry was being mobilised. I am convinced that is right.
  If the hon. Member for Stirling and Falkirk Burghs (Mr. Ewing) examines carefully what has happened to regional policy and what is now happening in connection with the EEC regional policy, he will see the effort is more determined than ever before.
  But let me caution the hon. Member not to be to excited by this, nor to think that Wales, Scotland and the North-East can be put right overnight. If the aim was to put matters right overnight, both parties must accept they have failed. I happen to believe the North-East will be the area to come right most quickly. The infrastructure has been put in and it looks across the North Sea to the Common Market.
  But let us not pretend that Governments, no matter how big, can change the economic forces easily. Both parties have tried to help the regions massively.
  In the North-East, which I know best, capital allowances and grants essential to businesses have created the most incredibly modern industry entirely capital-intensive and not labour-intensive. In that respect, therefore, they have failed in their purpose. Any hon. Member who does not know the North-East should go up there and see how it has changed. He would get a tremendous shock. It would entirely change his idea as to what development regions are really like.
  The noise from the Opposition about unemployment was supported by what I believe was an unconscious pressure on

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  the Government caused by the cross-party voting last year on entry into the European Economic Community, which I strongly supported. I believe that the Government had to back away then, as the shake-out was going on, so that Opposition Members could vote with them for entry into Europe. Otherwise, those Labour Members who favoured entry would have been under such enormous political pressures that they would have had to go into the anti-Common Market Lobby against their best wishes. [Interruption.] That is what I observed in the past two years and I am sure that that observation is as good as the observations of the journalists who write about what goes on here.
  My right hon. Friend the Prime Minister said that he wanted to be a radical, reforming Prime Minister, and he has succeeded beyond my wildest dreams, to such an extent that the man in the street does not know what has happened.
  Mr. Ewing: Watch it.
  Mr. Proudfoot: I have no need to watch it.
  Mr. Speaker: Order. I want to call as many hon. Members as possible. The hon. Member who is talking from a sedentary position is simply lengthening the speech of the hon. Member for Brighouse and Spenborough (Mr. Proudfoot).
  Mr. Proudfoot: I am sorry, Mr. Speaker. I shall try not to be provoked.
  An incredible amount will happen on 1st April. We are starting a new system of company taxation; we are going on to a unified tax; and we are getting rid of SET and purchase tax, with the introduction of value added tax. There is to be a 20 per cent. cut in import tax, which is the beginning of competition from the Common Market. We also start a month of local government elections to create new local authorities. I believe that all those reforms will work. They put into effect our General Election programme, and I have no doubt that carrying out that programme will take us to victory at the next General Election.
  I was amazed that the Leader of the Opposition had not taken on board what my right hon. Friend the Chancellor said about land. When I was previously a
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  Member I heard debates raging in the Chamber and in the back-bench committees of my own party about the price of land. In the 1930s the Tory Party tried to tax land development. A Bill introducing a betterment charge went through the House, but it was never operated. The Labour Party has had two goes since the war, ending in miserable failure. All that was achieved was to put up the price of land.
  Wherever we go in the country we find the problem raised by many people who are frightened about the situation. But when we look into the logic of what is happening we find that it is virtually impossible to tax increases in the price of land. My right hon. Friend the Chancellor said today that once planning permission has been given it must he operated as quickly as possible, and that there will be a tax on a percentage of the increase in price. He did not name the percentage, though it can be pretty swingeing. That will increase the availability of land and speed up the building of houses. It is the most practical step that has been taken over the price of land.
  Mr. William Edwards: Does not the hon. Gentleman appreciate that the proposal has the same defect as our Land Commission provisions, because if there is a possibility of a levy on receipt of planning permission some people who have land ripe for development will not apply for planning permission? The levy in this case is uncertain; there are at least four variants in the provision that enables people to get out of paying it.
  Mr. Proudfoot: I accept completely what the hon. Gentleman has said. I do not think that there is any foolproof way of taxing profits on land, except to tax up to 75 per cent. once a man has sold land.
  I think that my right hon. Friend's proposal is a once-for-all adjustment for going into Europe. I learnt from the newspapers that even Spaniards came here and started to buy land. The hon. Gentleman shakes his head but he will find that in France and other European countries the savings institutions are not trusted as they are here. People do not put their money into banks, building societies, and so on. If a family saves

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  some money it buys land, and that forces up the price. I believe that the price of land here has risen to equal the prices on the Continent.
  I also welcome my right hon. Friend's incentives for workers in certain enterprises to be shareholders in those enterprises. I hope that the new share savings scheme will succeed beyond his wildest dreams. It reminds me very much of Louis O'Kelso's two-income plan, except that the workers will not be lent the money to buy their shares: they will have to save it first. I welcome that. The Liberals will say that my right hon. Friend has stolen their clothes, but I welcome the scheme and wish it every success. I am sure that it will give people a completely new outlook on what the whole of business is about.
  The tax credit system delights me. Like every hon. Member, I have had representations from all kinds of people about the family allowance going to the dads instead of the mums. I had thought that Andy Capp was dead, but many social workers believe that unisex, with people sharing everything, does not exist in some areas. I am surprised at that, but I am sure that my right hon. Friend was right to make the decision he did, in view of the political pressures.
  The increased pensions will be enormously welcomed by the old people. The Labour Party must look at the facts behind the pensions. I know that young people are very worried about the old, but the fact is that although the young bride-to-be no longer has a bottom drawer, those who are about to retire do, with sufficient sheets and other linen. They do not want to part with their favourite furniture. When hon. Members, and young people in particular, consider the position of old-age pensioners they should remember that retired people are not establishing a home, and so their expenses are very different. I am delighted at what my right hon. Friend has done.
  I am also delighted that value added tax is to be at the rate of 10 per cent. I must declare an interest here. Businessmen and everyone else will be able to work out the 10 per cent. rate. Everyone lost sight of the position with purchase tax; none of us knew how much he was paying.
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  Many prices will come down under VAT. If Labour Members think that customers do not go to weights and measures departments to complain they have another think coming. There is quite a number of barrack room lawyers among the customers. After the Trade Descriptions Act came into force I heard about a customer who took a 2s. collar stud to his weights and measures department because it was stated to be of mother-of-pearl and he did not believe that it was.
  I come next to children's shoes. When my children arrived I was told that So-and-so's shoes were good for their little feet, and all three of my children had shoes of that make. By the time they had finished with them a consumers' organisation had found that they were the worst possible shoes for children's feet. Therefore, I am very pleased that in exempting children's shoes from VAT my right hon. Friend has made the proviso that they should be acknowledged to be healthy for the children. In view of what he has done about chocolates and sweets, I think that although we may have got rid of the lobby on tees we shall have a lobby on teeth.
  I have noticed an incredible change in my constituency in the past three years. Going around some of the 440 factories there, I see different attitudes, new tools and new techniques—all because the people have been motivated by tax reductions. It is absolutely and completely right that that should be so, and I hope that we shall be able to carry on reducing direct taxation.
  Lastly, in the words of the Leader of the Opposition, I should think that this Budget has left all the political options open if we have to have an election between now and Chirstmas.
  6.41 p.m.
  Mr. Laurie Pavitt: I had the fear for a moment that the hon. Gentleman the Member for Brighouse and Spenborough (Mr. Proudfoot) was going to try to emulate the marathon effort of the right hon. Gentleman the Chancellor of the Exchequer. I shall not attempt to follow his wanderings down all the byways, but he spoke time and time again about change, and certainly this Govern-
  ment have changed. Almost all, the

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  policy with which they went to the electorate has changed. They have done a U-turn since then, and come back in the other direction.
  The hon. Gentleman emphasised his adherence to, acceptance of and desire for, growth, but he probably failed to look at the small print. In his profession he always has to look at the small print, If he had done he would have seen that the Chancellor said "growth until and unless", so it may well be only a limited period before we have to retrench. He almost indicated a summer or autumn Budget.
  I want to talk mainly about the blind, the disabled and the chronically sick, but first I want to touch on a number of points made by the right hon. Gentleman in his opening address on the Budget. This is my fourteenth Budget, and I must confess that I thought that the right hon. Gentleman did extremely well in speaking so nearly to the exact two hours. I welcomed the fact that when he got to his peroration, when I felt that perhaps it was going on for ever, his voice took on a bit of life and colour. I enjoyed the peroration very much indeed, as it presaged the end of a long speech.
  I want to take up the right hon. Gentleman on a number of points. Like most hon. Members, I welcome the fact that the Government are going to give rate relief after 10 per cent. increases, but I should like the Treasury to address itself to the problem in constituencies such as mine. In my constituency there is an extremely good brewery called Guinness, which makes an excellent beverage. Mine is a working-class area, and two-thirds of my constituents live in shared accommodation, many of them sharing lavatories and bathrooms. What will happen is that Guinness, which makes a good profit as well as good beer, will find that its rates are reduced, while some of my poorer constituents living in railway cottages will find that their rates are increased? When the Financial Secretary to the Treasury prepares his arrangements with local authorities and his Finance Bill I hope that he will address himself to what can be done in cases where, because of the Government's wish to help industry, they have changed the ratio of rates in a way that will hit the hard-pressed people who live in rented property and have to pay rates through
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  rents and relieve profit-making concerns who can afford to pay.
  I welcome very much the incentive to saving by raising the tax-free amount from —21 to —40 on Post Office and trustee savings banks, but I ask the Treasury why, if we are to have "Save As You Earn" we do not have "Save As You Spend". The hon. Gentleman knows that the Co-operative movement is a large repository for working-class savings. Unfortunately, the success of the movement has been due not to its high ideals and its social purpose—which remain important—but to the fact that in 1844 it was discovered that it was possible for working-class people to save as they spent by means of a dividend on their weekly food bills at the end of each half year. A large percentage of working-class savings accrued in that way, by the housewife spending money and having her nest-egg in the Co-operative Society. But I am afraid that no Chancellor of the Exchequer, even in the six years during which my party was in office, has seen fit to encourage people to leave their money in the Co-operative instead of spending it. The same kind of tax advantages should be given to people who have their money in a Co-operative Society as to those who save in Post Office Savings or trustee savings banks.
  I welcome the action on children's shoes. I shall look with great interest at the report which the Chancellor announced. I only hope there will not be the same kind of institutional, workhouse approach, with the official shoes—the State shoes—being exempt from VAT but other kinds, for those who want a little variety, not being exempt. That is the kind of mistaken approach that was made in the case of children's spectacles. If children want to wear a smart, socially acceptable frame they cannot have it on NHS; they have to wear steel frames. I welcome the shoe concession very much, because there is no doubt that in terms of orthopaedic surgery one of the biggest problems, not only with the young but with the old, has been caused by bad shoes and by the fact that in the past mothers have been unable to change their children's shoes often enough when the feet were growing rapidly.
  Moving from Guinness to biscuits, I have in my constituency United Biscuits, McVitie Price. For many years I have

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  been concerned not so much with the question of crisps and ice cream as with the purchase tax on chocolate biscuits. In my area there are nearly 13,000 old-age pensioners for whom a chocolate biscuit with a cup of tea is one of their luxuries. I am therefore very pleased that the Chancellor has been able to exempt chocolate biscuits from the 10 per cent. VAT.
  I am concerned mainly with the effect of VAT on charities and the complete omission of any provision for our blind and disabled people. As a result of the change from purchase tax to VAT people will be subject to VAT who have never been subject to any other form of taxation. I take as an example the Wireless for the Blind Fund. Blind people are given radio or television sets on a permanent loan basis, for which they pay about —15. That means that under the new arrangement blind people will be paying a 10 per cent. tax on the —15 they pay for their radio. Talking-book machines are another example. About 9,000 talking-book machines a year are used by blind people, and VAT at 10 per cent. will apply to them. When the Treasury is preparing the Finance Bill I hope that some of these matters, on which I shall be moving amendments otherwise, will be taken up.
  The Royal National Institute for the Blind has raised a number of points on the whole question of the provision of apparatus and also in connection with holiday accommodation. Many charitable bodies provide such accommodation for the disabled, the sick, the elderly and the blind at heavily subsidised rates. From now on all these holidays will attract 10 per cent. VAT. The same applies to blind people who live in hostels and homes. The running costs will inevitably rise by 10 per cent. on the whole of the provision of material goods, furniture and furnishings, all of which the hostels have to provide and renew. The right hon. Gentleman has exempted food, but a whole series of items and all services will attract the 10 per cent. tax.
  I listened carefully to the charity exemptions, but I noted that these will not include convalescent homes. I hope that they will be given some consideration. Many charity convalescent homes are run at almost nominal charges. One of
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  these is the Mary Macarthur Homes. Opposition Members have a sentimental attachment to these, because Mary Macarthur was an extraordinary woman. She was a trades union pioneer who, in 1880, came from Ayrshire to England to do something for the working-class people here as well as in Scotland. The homes have done a tremendous job for ordinary working mothers who are tied by their family and need a holiday but cannot afford it. In spite of the fact that the mother pays only —8 a week, these homes are not exempt and the 10 per cent. VAT will have to be paid on that sum. The Co-operative movement, in which, as the House knows, I have an interest, also runs convalescent homes. There is one in Gilsland, near Newcastle-upon-Tyne, where the patients are elderly people. They have to have a recommendation form signed by a doctor, and the current charge is —18 for a two-weeks' holiday. That means that the old person has to find —18 plus —1·80, unless the Treasury can find some way of making him exempt from VAT.
  My last point concerns the relief for earnings of blind and disabled persons. For a long time I have been urging the House—and there is a relevant motion before the House which has attracted a large number of signatures—that the facility given in 1962 to blind persons should be extended to those who are chronically sick or disabled. At present the relief for earnings of blind persons is —130 per annum, disregarded for tax, and this has not risen to any extent since 1962. I am urging that the amount of disregard should at least take account of current changes in the value of the pound and current prices.
  The whole object of the exercise in which the Secretary of State for Employment is at present engaged—four experimental studies on how one can get chronically sick and disabled persons, blind persons and deaf persons into the community, not only working in sheltered workshops but taking the whole responsibility of working as an ordinary person within the community—rests on the fact that these people will be willing and will want to go out to work. But if, when they do go out to work, they find that taxation takes away a greater percentage of their earnings, the incentive to them to continue to work will not be so great.

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  In 1952 a Government committee recommended that there should be a disregard for such people, and it took 10 years to get it. I was not in the House at the time, but I express now my gratitude to the hon. Member for Plymouth, Devonport (Dame Joan Vickers) and a number of hon. Members opposite who managed to get it done in 1962. It was not until that year that the disregard of —100 was given. But it is now 1973, and that —100 should surely be raised to at least —200 or —250. That would not be raising the figure in real terms; it would merely be keeping pace with the change in the cost of living since 1962. I urge the Chancellor to give serious consideration to this point, which concerns very needy and worthy people.
  This seems a very mixed Budget. It is rather like the curate's egg. We always welcome what we like in a Budget and object to the parts that we do not like. I welcome certain parts of this Budget but I feel that the right hon. Gentleman has basically failed to ensure that justice is seen to be done between those sections of the community which received the large concessions last year and those which are being asked to pull in their belts this year. I hope that we shall eventually achieve a greater amount of social justice in the fiscal arrangements which the Budgets puts before the country each year.
  6.52 p.m.
  Mr. Edward Gardner: I think that I had the pleasure of following the speech of the hon. Member for Willesden, West (Mr. Pavitt) in the Budget debate last year. On that occasion he spoke, as he has today, of the need to provide relief for the disabled and others who require State aid. I know that he holds that aim very dearly and strongly, and I share it with him. But, unhappily, I cannot agree with his view that this is an unjust Budget. I speak, as we all do today, off the cuff, as it were, because I have not read the Budget statement. I have only heard it. I regard it as a progressive Budget. I believe that it is most remarkable, in that it has been made against the background of a startling international crisis and an equally serious crisis at home.
  My right hon. Friend described the Budget as "neutral". With respect, I disagree. I do not think that it is a neutral
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  Budget—certainly not wholly neutral. It has a positive quality for those who stand in need of help. I congratulate my right hon. Friend on the way in which he has framed it and on the priorities he has underlined in its contents. With each year that passes of his tenure of the great office of Chancellor of the Exchequer my right hon. Friend grows in stature, as I think the House will agree. Even when he makes the most provocative of proposals he is listened to with great respect by both sides of the House. I declare without embarrassment that I am one of his great admirers.
  Like other hon. Members, I had many private hopes for the Budget. Some of them were, of course, inspired by correspondence from my constituency. For example, I was urged to give support for the relief of value added tax on charity shops, to see that it did not fall on children's clothing and footwear and, as far as one could do so, to see that everything was done to encourage the Government to increase pensions.
  I find, to my pleasure—and, I am sure, to the pleasure of many hon. Members on both sides—that all these things have been done. I am particularly pleased about the relief of VAT on charity shops. Indeed, this morning I had four letters from my constituents containing pages and pages of signatures under the heading of "Oxfam". The signatures were organised by a local branch of that admirable organisation, and the letters asked for relief of VAT on the goods which come to these shops and on goods being sent out to distressed areas. I am very happy that my right hon. Friend has agreed to make these reliefs possible.
  There is another matter, on which I should like a reply. It troubles the country greatly and is a matter of no small consequence. It will affect millions of mothers. What will happen about the payment of child credits? My right hon. Friend said, in effect, that mothers would not be paid less by way of allowances for their children than they are at the moment. A Select Committee of the House is considering how these payments should be made—whether they should be made to the father or to the mother.
  I plead with the Government to adopt what I believe the majority of people consider to be the sensible solution—to make it possible for the mother to have

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  direct access to the payments so that she should not experience difficulties—which in some cases could be considerable—in having to recover them from her husband. If the Government could say now that they are prepared to ensure that in future these payments will be made directly to the mother there would be a great relief from the anxiety now felt by many people.
  The Budget shows that the Government are out to help the weak, and those who need help. I can only hope—and I say it with all the feeling at my command, and with a genuine expression of anxiety —that this example will be followed by those who are making wage claims which, if pressed to the hilt, could have a disastrous effect on the economy and would greatly affect those whom the Government are seeking to assist in the Budget.
  Debate adjourned.—[Mr. Gray.]
  Debate to be resumed tomorrow.

GREATER LONDON COUNCIL (GENERAL POWERS) BILL (By Order)
Order for Second Reading read.
Motion made, and Question proposed, That the Bill be now read a Second time.
Mr. Speaker: Mr. Spearing.
Mr. Nigel Spearing: On a point of order, Mr. Speaker. Is it in order for me to speak first or should it be the hon. Member for Cities of London and Westminster (Mr. Tugendhat) who wishes to introduce the Bill?
Mr. Speaker: I was told that the hon. Gentleman was to speak first. Mr. Tugendhat.
7.1 p.m.
Mr. Christopher Tugendhat: In introducing the Bill it would be more appropriate to sit on the cross-benches—if we had them in this House—because it is essentially a non-partisan measure. It has been approved by both parties in the Greater London Council, and many of its provisions relate to the boroughs, some of which are Conservative-controlled while others are Labour-controlled. It is, as much as anything
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can be in politics and in this House, a non-partisan measure.
Lest there be any misunderstanding, I make it clear that I am proud of the record of the Tory-controlled GLC and would be happy to defend its record in the election, in canvassing activities and in speeches. Today I shall endeavour to be as non-partisan as the measure. My intention is simply to present the Bill
Mr. Reginald Freeson: Before the hon. Gentleman leaves that rather general and controversial point, would he care to say how he can be proud of a record of 4,000 housing starts per year compared with the 9.000 planned some years ago?
Mr. Tugendhat: If I were to take up the hon. Gentleman's point I should feel the necessity to counter it with other achievements of the GLC. I am tempted to do so, but I feel that it would be more in the spirit of the Bill and the way in which it is being introduced to the House if I stick to the terms of the Bill rather than exchange claim and counter-claim, of which we shall no doubt hear a great deal in the coming weeks. I think the hon. Gentleman would agree that I am not backward in coming forward and talking about London matters. On this occasion, however, I will resist the temptation.
The hon. Gentleman's intervention leads me to make one other point with which I hope he will agree. All of us representing London seats regret the necessity for a London debate on the General Powers Bill. [HON MEMBERS: "Hear, hear."] I am glad to have support on that point at least. We all recognise the necessity for the Bill, and yet, because of the way in which the House deals with London business, it is difficult for hon. Members to raise matters of great constituency interest and of general interest, such as the River Thames.
Because of that they are forced to raise these matters on an occasion such as tonight, when it is not really an appropriate opportunity. Because hon. and right hon. Gentlemen opposite put their names down in opposition to the Bill it gives the impression outside that they oppose it, whereas often they merely want to raise issues which they have no opportunity to raise on other occasions.

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I hope that the House will find a more satisfactory way of dealing with this situation. Perhaps hon. Gentlemen opposite will agree with me if I say that if we do not adopt a more satisfactory way many of us at least hope that our debate will not often fall on Budget night. It is a great inconvenience when one has just listened to the Budget speech and would like to be thinking about it to have to revert to other issues.
The Bill has been published for some time and the GLC has circulated documents about it. I will not go into the details at length. I am sure that those hon. Members sufficiently interested in London matters and the provisions of the Bill to have remained behind when they do not have to must also have read the Bill. I know that many others have points which they will seek to raise, and because this is a limited debate the more time I take the less time they will have.
All that I shall do is to mention some of the high points of the Bill, so that those who read our debates outside will realise that we have taken it as seriously as it deserves and so that the Minister may see the context in which our deliberations are taking place. A large number of the early clauses deal with landing places. The opportunity has arisen for the GLC to acquire certain Thames landing places from the PLA and these clauses are designed to empower the GLC to acquire, construct, maintain and operate these places in the interests of its responsibility as the strategic planning and transport authority.
This is a matter of particular interest to the hon. Member for Acton (Mr. Spearing) who has devoted a great deal of his time since he entered the House to the problems of London's river. It is a subject on which he is a considerable expert. Clauses 19 and 20 are also connected with the river because they provide for the strengthening of flood defences. Here we must refer to the Thames Barrier and Flood Prevention Act which we discussed last year. Clause 19 provides for dams relating to the proposed barrier and Clause 20 deals with penalties for interference with flood prevention. I am sure that all of us who live in the area affected must welcome this.
Mr. James Wellbeloved: As the hon. Gentleman will be aware, flood prevention for London is a matter of vital interest. I hope that in his brief from the GLC he will be able to find some information dealing with the progress of the flood defence scheme. Can he say whether the GLC is satisfied that the powers it obtained in the Thames Barrier and Flood Prevention Act are sufficient? Can he give us a progress report?
Mr. Tugendhat: I have received a great deal of information from the GLC about this Bill. Nothing is included in the documents relating to progress on the barrier. I assume—and this is a tentative assumption; I will take advice during the course of the evening—that since the GLC has kept me so fully informed of the things about which it is unhappy this must be one of the things on which it is happy. It is a complex subject and I know that through his constituency the hon. Gentleman has a particular interest in these matters. I will try to secure an answer to his question.
Clause 21 changes the subject completely and updates the existing arrangements for allowances to members of the GLC to take account of the 1972 Local Government Act.
Clause 23 is one about which I feel particularly strongly and I am pleased to be in a position to introduce it. It is designed to prevent the phenomenon knows as "creeping hotels". As hon. Members on both sides know this is a desperately serious and quite disgraceful problem in the middle of London. There have been proposals from boroughs, notably Kensington and Chelsea, to deal with this and at last the opportunity has arisen to get a grip on the problem. That must be beneficial. Certainly in my part of London we feel we have, if anything, an excess of hotels. Many of these are at the higher end of the price bracket. At the higher and lower end it is found that residential property is being used, in effect, for tourists and other transients.
We are desperately short of residential property. We have long housing waiting lists, and many problems arise from the shortage of housing accommodation, and the way in which some housing stock has been misused for this purpose has been quite disgraceful. This clause in the

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Bill will make a substantial difference and I am delighted that an opportunity has arisen to deal with the problem.
Mr. Freeson: If I may put a point to the hon. Member at this time in connection with the clause, has he been advised by the Greater London Council how such a planning amendment—because that is what it is—could be policed?
Mr. Tugendhat: The difficulty in answering that question in the context of the Bill is that policing will lie with the boroughs. It will be up to individual boroughs first of all to give or to refuse the changes in planning. I hope very much that they will be stringent in their interpretation of this power. I would have thought that certainly in Westminster, where the problem is serious, the council, through its existing activities, would have the resources to enable it to handle this problem. I know that Kensington and Chelsea, which pioneered proposals along these lines last year, seemed to be in no doubt that it was able to do so. I believe policing is less of a problem than ensuring that the provisions are sufficiently stringently interpreted.
Clause 24 of the Bill is covered by the Housing (Amendment) Bill which I believe has now passed through all its stages in this House. It having received the Royal Assent, this clause will be withdrawn. Clauses 25 to 29 are designed to help boroughs to recover rates without having to go to the extremes of distraint and imprisonment.
I know that these are controversial clauses and that they may have been misconstrued outside the House. It is important, therefore, to emphasise that their object is to enable the boroughs to take a more lenient rather than a harsher line. There are occasions when rents are not paid for a variety of reasons when the only choice open to the boroughs is either distraint and imprisonment, on the one hand, or to let the matter rest on the other, and plainly this is sometimes too extreme a choice. These clauses are designed to make rates a charge on the premises and recoverable, therefore, in the event of sale or death. It is a device to enable the boroughs to take a more lenient attitude on those occasions when the circumstances of the ratepayer are such that the more extreme action which
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at present is open to them would not be appropriate.
Mr. A. W. Stallard: Is the hon. Gentleman saying that these powers are in lieu of or in place of those existing, or in addition to those existing?
Mr. Tugendhat: The boroughs still could go to the extremes of imprisonment and distraint and there are circumstances in which such action would be appropriate, but they now have an alternative, a softer option, and this is a useful addition. These provisions are in addition to, not instead of, those already existing.
Clause 30 blocks a loophole in the Food and Drugs Act. Danger arises in that situations can occur in which a conviction takes place involving an individual, but the offending premises can then be used by another individual for a period of time before the necessary countervailing action can be taken. This is an abuse with which cities other than London have had to deal. It is a wellprecedented clause. Manchester, Derby, Port Talbot and Coventry have all introduced or sponsored legislation along these lines. The object of safeguarding public health by making quite sure that premises which have been operated by somebody who has been convicted cannot be used continuously is desirable.
Clause 31 is designed to give the public in coin-operated laundries the same protection in dealing with the machines in those establishments as workers have in factories. Various Factories Acts provide a high standard of safety in factories where dangerous or potentially dangerous machinery is in operation. This clause is designed to give the public the same protection in coin-operated laundries as is given to people who work in factories with similarly dangerous machines.
Clause 32 is designed to bring the consumer advisory and protection service into line with the latest practice as established under the Local Government Act, 1972. The London Boroughs Association has asked for this. The Association believes that the changes advocated here will establish a consumer advisory and protection service greater than at present and also provide pre-shopping advice.
I believe all of us would agree that this is not only in keeping with the spirit

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of the times but that improvements along these lines are particularly helpful and desirable in an area such as London, where the opportunity for people to deal with corner shops and small shopkeepers and, as it were, to know the state of the market in their shopping is much less than it is in small towns and in the country. Help along these lines is certainly desirable. Clause 33 deals with the maintenance cost of children in care.
These are the major provisions of the Bill. There are other clauses which I have not mentioned to which other hon. Gentlemen may refer during the debate, and I will endeavour to handle any questions which arise. Otherwise, I will certainly promise to ensure that the Greater London Council replies to any points which arise in this debate. My experience is that during the course of a debate unexpected points tend to arise and I will endeavour to get answers for hon. Gentlemen.
I should like to end my speech at this point so that hon. Gentlemen on both sides can raise matters of interest both within the direct provisions of the Bill and perhaps sometimes moving a little outside. I commend this Bill to the House.
Mr. Freeson: Before the hon. Gentleman sits down, may I point out that he has not touched on Clause 34? Could he advise us why there is no reference to a development fund being established, or to power to establish such a fund being placed with the Greater London Council as well as with the boroughs?
Mr. Tugendhat: I regret that I am unable to provide the hon. Gentleman with that information but I will do my best to obtain it for him.
7.18 p.m.
Mr. Nigel Spearing: I believe the whole House will agree that the hon. Member for the Cities of London and Westminster (Mr. Tugendhat) has contributed signally to the debates we have had in this House on London matters. I recall particularly his contribution on 15th December last.
I agree with him that there are devices which we have necessarily to use to ensure that London matters are discussed. I believe that in relation to its area, London is the most densely-membered area of the country, having, I believe, more
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Members than the whole of Scotland. Therefore it is right that we as a House should have time to debate London matters, and I am very glad that we have achieved that this evening, although perhaps, unfortunately, overshadowed by other events.
The powers of the Greater London Council which we are discussing this evening in the General Powers Bill are related directly to the powers contained in other statutes, and in terms of effect, at least, to what the Government decide to do and what the Government decide the GLC shall or shall not do. It is right, therefore, that the Government should have a listening ear. We are pleased to see the Under-Secretary of State for the Environment, who will be able to hear the views of hon. Members on both sides of the House on many non-party matters which worry London people. I shall try to deal with matters as objectively as I can in the first instance and deal with party differences in a self-contained addendum.
One of the marked characteristics of our debates is that hon. Members representing London constituencies are able to look at the problems of London as a whole and to differ on the solutions. There will be a choice of solutions next month for the citizens of London when they go to the polls.
I wish to deal with three broad aspects. I first wish to comment on the Layfield Report. Secondly, I wish to refer to the docks study about which we have heard but which we have not seen and, thirdly, I wish to comment on matters concerning the River Thames which arise from the Bill.
No doubt there will be a debate on the Layfield Report in Government time, but some matters which bear on the powers and responsibilities of the GLC should be discussed tonight because they are relevant to the way in which the GLC and the Government make decisions for London in the near future.
Since our debate last December, it has become more widely known that London faces an employment crisis, not in the sense of the unemployment which is a feature of the development areas but in the imbalance of employment. The Layfield Report did not come to that conclusion. Nearly every public representative, whether parliamentary, GLC or

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borough, would disagree with the findings of Layfield. The Secretary of State for the Environment, in paragraph 17 of the Statement which he circulated but did not read, said this of the Layfield Report:
"On specific issues they regard the policy of seeking to reduce the rate at which jobs are leaving London as unjustified. The GLC feared that a continuous exodus of jobs would have an adverse effect on the income of Londoners, principally by removing the jobs which earned good incomes; but the Panel, after a lengthy review of the complex evidence on this difficult subject, have come to a quite contrary view: that on balance a continuing decline in population and employment at recent rates is likely to produce greater benefit in living and working conditions for everybody concerned—both those who stay and those who leave."
I am worried about that finding, because everybody to whom I have spoken believes that the opposite is true. Many of the people who go to new or expanded towns under the ægis of the GLC are skilled or semi-skilled and are relatively young, perhaps with growing families. One reason why they may be given priority for movement is that they have housing problems. They leave behind a relatively ageing population, thus making the age and social balance in certain areas more critical than it would otherwise be. That argument can be justified by evidence from academic sources which I have read. But for some reason which I do not understand the Layfield Panel does not come to that conclusion.
Paragraph 5.71 of the report reads as follows:
"We were not presented with any evidence which shows this assumption to be true …"
That is the assumption that the number of jobs is rapidly running down.
"… and we, therefore, see no need for the policy in order to achieve the aim."
The aim was to slow down the rate. In paragraph 25.16 the panel reports:
"Voluntary movement by firms out of Central London, in co-operation with their workers, is indeed to be encouraged, but a policy which deliberately restricts growth in the centre in order to put jobs closer to homes is not."
The first part of that sentence refers to the official policy of the Government and the GLC to move out of London industry that can as well be carried on else-
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where. Employment in the manufacturing industries in London has been going down rapidly. Various estimates have been made of how many years it will take before there is no manufacturing industry in London. The Layfield Panel may not face that prospect with qualms, and the Government may not. In view of increased specialisation in towns throughout Europe, this may be a natural consequence of increased efficiency and industrial reorganisation. But I suggest that the social side effects of such a policy would be disastrous.
In 1966, 1,431,000 people were engaged in manufacturing industries in Greater London. By 1970 that number had been reduced by 177,000. The unofficial figures show that in one year, between 1970 and 1971, that number went down by more than 50,000. That rate of reduction may begin to smooth out in a few years' time, but anyone who lives in an industrial area of London knows that there is a critical balance in the so-called pool of labour and experience and the structure of sub-contracting industries and trades, and that after a certain point has been reached the run down is more rapid and harder to arrest. I hope that the Government will urgently pay attention to this phenomenon and question closely whether the Layfield conclusions on this matter are correct.
The conclusion of the Layfield Panel which I read in my last quotation concerns employment in central London. We touched on this in our debate on 15th December, when my hon. Friend the Member for Holborn and St. Pancras, South (Mrs. Lena Jeger) referred to answers she had received to Questions about office space. She said that she was told on 20th November 1972 by one of the Ministers in the Department of the Environment that 9 million sq. ft. of office premises were unoccupied, 11·1 million sq. ft. were under construction and another 8·6 million sq. ft. were the subject of planning permission but had not been built. Those figures add up to nearly 30 million sq. ft. over and above the office accommodation already occupied.
Much of this empty office accommodation is in central London, and we all know the office blocks in question. In that previous debate we anxiously waited

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to hear the Minister for Housing and Construction say what he intended to do about this. We also wondered whether the Chancellor of the Exchequer this afternoon might say something about it. He said something that may have a marginal effect, but the pledges that were given by a former Secretary of State for the Environment have not yet been fulfilled. These empty office blocks represent a waste of resources and create an artificial office market which has repercussive effects on property values throughout London. When the value of an office development is artificially high, site values are likewise over-valued. The inflation in site values and accommodation throughout London, which everyone agrees is a curse, is an effect of this office market syndrome. I hope that if he intervenes the Under-Secretary of State for the Environment will be able to tell us something about that, because many people in all parties in London are very much concerned about it.
The next subject dealt with in the Layfield Report on which I wish to speak is that of transport. No doubt at a later stage there will be a lengthier debate on it, and it would be wrong to go into detail now. Since this is the first time that we are able to give our reactions to the proposals concerning roads, about which everyone was surprised, it seems appropriate to do so now. The report talks about the great housing crisis in London and recommends drastic measures to deal with it—measures which have been foreseen by my colleagues at County Hall and to which my hon. Friend the Member for Hackney, Central (Mr. Clinton Davis) may make reference. But the report recommends a road pattern which would mean that 10,000, more or less—in any case a substantial number—of houses would have to be pulled down to provide for Ringway 1.
It may be that many of those houses will need to come down in any case, but probably many of them would not need to be pulled down. It seems extraordinary that this plan would do the most social damage by having the road go through areas which are already under social stress. It may be that the environment of those areas is not so pleasant as that of others further out in the area of the proposed Ringway 2 and Ringway 3, but that does not mean that environmental
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stress should be piled on to the very great social stress which is already present.
My second question concerning transport is about public transport. The most significant paragraphs on this are contained in pages 361 and 362 of the report, dealing with fares. Whatever the convenience such as interchange or through-ticket arrangements, the total cost in the weekly or monthly budget of through movement by public transport is the important point. It is a reflection on the inadequacies of the Greater London Development Plan revealed by this report that almost at the same time as the report was made public the Secretary of State for the Environment saw fit to establish with the GLC a pane] to investigate a rail plan for London. These physical plans were left out of the Greater London Development Plan. I think that was an admission of failure.
Of course the road plans cause great controversy. I understand that the Secretary of State accepts certain things and leaves out others. That seems illogical. He has accepted the road plan apparently to deal with what he calls "congestion in London". I know that some people occasionally experience congestion in London. We have heard that on a famous occasion the Prime Minister experienced it. But what is not realised is that in general traffic in London is flowing relatively fast, indeed faster than it was 10 years ago. The Intelligence Unit Quarterly Bulletin of 16th September 1971 published figures to prove this. I will not quote the figures but I quote the conclusion:
"Off-peak speeds average 12 miles per hour in the centre, 17½ miles per hour in inner London, 24½ miles per hour in the outer areas, and 32 miles per hour on primary roads.
Since 1962, the average speed on the primary network has increased by 3 miles per hour, largely due to the construction of new motorways, and has remained virtually unchanged on other roads. Meanwhile, traffic levels have risen by about 50 per cent."
I stress that in general traffic is flowing fast. It is only when a lorry breaks down or some such event occurs that traffic builds up. This is increasingly true on main motorways between cities. Those of us who listen to the radio almost every morning hear of a motorway where some accident has occurred and motorists are advised to take an alternative route. But there are not objective surveys of the

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actual amount of congestion, nor is the congestion compared with what it might be or what it was before the war. There is a great question whether the apparent reason for constructing Ringway 1 is congestion in Greater London.
Mr. Toby Jessel: Would the hon. Member agree that the improvements in the average speed of traffic in London to which he has just referred have been achieved largely through the work of the GLC by computerisation of traffic lights, traffic management schemes such as clearways and waiting restrictions, and no-right-turns, one-way streets and so on? Would he agree that the number of such traffic management schemes has been very large over the last five or ten years, but that the scope for these is coming to an end and that there are not many others which could be effectively employed? When that limit is reached, further improvements in the speed of traffic flow can be attained or maintained at the present level only by construction of new roads.
Mr. Spearing: I am glad to agree entirely with the first part of the hon. Member's intervention. I spent many hours with him and many of his colleagues working on the schemes that he mentioned. He was quite right in what he said in the first part of his intervention, but I did not agree with the second part. He suggested that we have reached the limit to which traffic management schemes can go.
Mr. Jessel: Near the limit.
Mr. Spearing: Near the limit. He said that to improve traffic movement we have to build more roads. Many of my colleagues and I say that that is illogical. First, the population of Greater London is going down—going down faster than the GLDP suggested it would. The increase in total motor mileage in London is not so fast as the GLDP estimated. Thirdly, if we built more roads, particularly of the kind which the hon. Member and his Friends advocate, we should be increasing the number of people who wish to use cars over and above anything that is needed in the provision of secondary roads. Therefore we should move to public transport to maintain the balance
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and make it easier for people to change from private transport to public transport. I am glad that the hon. Member made the point because it illustrates a party difference which will be of increasing importance in the next few months.
I turn to "the report that never was" That is the consultants' report on a very important part of London east of Tower Bridge which is generally referred to as the docklands. It would be right to rehearse the history of this study because many hon. Members on this side of the House are very gravely worried at the way in which that has been presented—or not presented—to public representatives and to the public.
A few weeks ago the Secretary of State for the Environment told the House that a consultative study giving a number of options for the development of this very important area of London would be published on 5th March. There were various leaks of this study, and indeed in today's newspapers we have descriptions of the so-called options for this area produced by the consultations at great expense. But yesterday when I went to the Vote Office to ask for a copy of this study —a document which I thought would have been placed there by the Department of the Environment—I was told that they did not have a copy. Therefore, I telephoned the Greater London Council this morning and asked whether I could have a copy of the study which was published yesterday. They confessed that although they had some responsibility for the document, there had been some delay either at the printers or on the part of the consultants and they had only three or four copies in County Hall, and even those copies were not available.
This is not the standard of public administration that we expect. First, I question the wisdom of the Secretary of State for having come to the House to give us a foretaste or trailer of what was to come and then, when the great day arrives, providing no copies of the report. The powers of the GLC will be crucial in this area of London, and the GLC is carrying out a vast public relations exercise in consultation with the people of the area. What is the use of such an exercise when even a short version of this study is not placed in the hands of hon. Members when the House is discussing the Greater London Council (General

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Powers) Bill. I fear that this is characteristic of some of the methods adopted by the present administration, but it is not good enough and I hope that the Under-Secretary of State will be able to give some information, if not an apology, on this point.
The study gives me great cause for worry because, if we are to believe the Press reports, there are to be five self-contained options for an extensive area on either side of the Thames encompassing several London boroughs and providing in detail a number of imaginative schemes. This is rather on the lines of architectural consultants being given a plot of land of 20 or 30 acres and being asked to provide a number of alternatives in terms of housing and other activities within that area. Some would solve the problem by suggesting the installation of ponds or pools, others would advocate high-density housing, and others would put forward low-density park space. That may be all very well for a 20-acre or even for a 100-acre plot of land outside a city or new town, but many of us know that the dockland areas cannot be considered on those lines.
The dockland area is not an area which has been razed after bombing or following some natural disaster, but is very much a going concern. There are considerable industrial and commercial enterprises at work there and a large number of people live there. It is certainly not a virgin site from which one is starting from scratch. Yet from the way in which the study has so far been presented, one would imagine that it was a virgin site. It is felt that a new agency is required to deal with the area since many parts of the area have common features. Certain financial problems will have to be resolved, and perhaps some new mechanism will be required.
What is forgotten is that large and efficient London boroughs are already involved within these areas—for example, the London boroughs of Tower Hamlets and Southwark, which have large areas of land within the so-called dockland area. Any mechanisms which are introduced to help to rehabilitate and develop these areas must have some connection with the London borough councils which are already there and which are the planning authorities. There must be some convenient marriage between existing
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statutory authorities and there should be full consultation with the local authorities if the Minister decides to introduce any new mechanisms.
Local authorities are already complaining that they have not been adequately consulted and I suggest that both the local authorities and the Member of Parliament concerned should be consulted before the Minister suddenly announces his decision about any statutory mechanism which he proposes to introduce to deal with various developments.
The consultant studies assume that the Royal Docks will be available for development. This is an unjustified assumption because the Royal Docks are an integral part of the Port of London. The docks are important particularly in terms of ship repairing and for laying up purposes. Therefore, for many reasons it would be both premature and wrong to assume that, even within a measureable time, they will not retain a water function and be part of the port.
Finally, I would emphasise that if there is to be any redevelopment in this area there must be jobs to go with it. I have already asked the Government about their proposals for a new town for the possible third London Airport at Maplin. I do not know whether they have considered that the Maplin area could provide jobs for the people in the dockland area. There will be many jobs available and it will be better to use the dockland area than to take people to a new town.
I feel that it is appropriate to concentrate on Part II of the Bill which makes provision for the Greater London Council to take over from the PLA responsibility for piers in the centre of London. I feel that it is right at this stage to recall a very great ex-Member of the House of Commons, Sir Alan Herbert, who for many years rightly criticised the LCC and the Minister of Transport for their conduct in respect of piers. I remember a caption written by Sir Alan which appeared beneath an illustration of old Waterloo Bridge and which went something like this:
"In the far distance is the site of the Temple pier, which was towed away by the LCC Nearer to the camera is the police pier where one may not land. On the left of the picture is a recess in the embankment for a pontoon There is now no pontoon. Behind the photographer is Charing Cross pier on which there is a notice 'Danger Keep off. L.CC property'.

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The bridge in the picture is Waterloo Bridge which is falling down."
That was in 1932 and it is at least something that we have moved on a little way from then and that the GLC is not only taking over these piers but is taking additional powers to construct a few more. In this respect the GLC is to be congratulated, and I hope that these rather complex clauses will be adequate to deal with a difficult task of taking over the management of these piers—and possibly, later, the river as well.
Clause 4 deals with powers to dispose of piers. I hope that the GLC will not decide to dispose of any piers which it purchases or constructs on a waterway. Piers are public places where one can land. In London it is difficult to land anywhere where there are not piers. For any pier to be leased or disposed of in such a way as to prevent access to it by the public or by watermen plying for hire would be a retrograde measure. In the Queen Anne's reign there were 40,000 watermen plying for hire on the Thames between Gravesend and Windsor. Unfortunately, there are far fewer today. It would be wrong if the places where they could ply for hire were reduced in any way.
Clause 6 deals with temporary closure of piers. I hope that at some stage the GLC will agree that before it can close piers under the byelaws available in the clause it will consult those most closely responsible for providing river services. Sometimes local authorities act a little arbitrarily, and there should be some safeguards.
Similarly, Clause 15 is a safeguarding clause. There are agreements which may or may not be in operation at the moment and these might be looked at carefully. In river management there are many hidden pitfalls, and in the Thames ancient rights and mediæval practices still to some extent hold sway.
The GLC is now entering into a new field. The House should know that last week in the Committee on the Water Bill the Under-Secretary of State for the Environment suggested that the GLC may take over not just the piers but in due course the powers and responsibility of the Port of London Authority between Teddington and the barrier site. That is
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an improvement which many people have advocated for some years. The river in central London forms a coherent whole between these places and will play an increasingly important part in what we hope will be a better central area. Such powers are not in the Bill. They will no doubt require a separate Bill if the Secretary of State's suggestions come to fruition.
I deplore in some ways the circumstances which made the Under-Secretary of State's announcement necessary. I think that they were part of another deal and were not put forward necessarily on their merits. It so happens that the proposal for the GLC to take over from the PLA the upper London river has some advantage. I look forward to a future debate on the general powers of the GLC. If the hon. Member for the Cities of London and Westminster introduces such a measure it will probably meet with complete accord on both sides of the House, which will not necessarily be achieved tonight.
7.53 p.m.
The Under-Secretary of State for the Environment (Mr. Reginald Eyre): I think that it would be convenient to this House if I intervened briefly at this stage. Although I shall be very glad to note carefully the points that are made by right hon. and hon. Members who are privileged to represent London constituencies, I regret that it is not appropriate for me on this occasion to comment on the points made by the hon. Member for Acton (Mr. Spearing) about office development or employment. I regret the delay in making the dockland report available. I willingly apologise to the hon. Gentleman. As he will know from his reading of the newspapers, certain factors are having a disruptive effect on the timing of matters of this kind. However, the report will be available shortly and with the minimum possible delay.
I shall refer to the practical points which the hon. Gentleman made about dockland. As he knows, a short booklet will be published after the report is published. The next step will be to canvass public opinion on the results contained in the report. For that purpose a major public participation exercise will be launched, a programme for which will be announced later. Decisions will also need

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to be taken in consultation with the Greater London Council and other local authorities concerned on the machinery necessary to carry out the redevelopment of the area. I appreciate the importance of that matter. I assure the hon. Gentleman that there will be full consultation about the machinery.
The hon. Gentleman also referred to the Port of London Authority's operations. Decisions about any dock closures are dependent on the operational planning of the Port of London Authority. The development possibilities for the purposes of the study are based on the consultants' assumptions, which do not commit any of the parties concerned. I hope that my brief reference to those two points will adequately reassure the hon. Gentleman.
I shall say little about the Bill on behalf of the Government. It is generally acceptable to the Government. There are one or two conditions which should assist central London boroughs to cope more effectively with some of their most important problems. My right hon. Friend has a number of minor reservations about the Bill, but these mainly concern drafting matters which we hope shortly to be discussing with the promoters. All that I have to say about the Bill, which was so ably introduced by my hon. Friend the Member for the Cities of London and Westminster (Mr. Tugendhat), is that I hope the House will decide to give it a Second Reading and send it to a Committee. The members of the Committee will be in a much better position than we are to examine indetail the issues involved. They will have the added advantage of hearing expert evidence.
Mr. Clinton Davis: Will the hon. Gentleman elucidate one point that he made about the Bill? He said that it materially assists the solving of the problems of central London boroughs. Presumably, he was referring to the stress areas, such as my constituency. Will he indicate how the Bill deals with the problem of homelessness which now afflicts my constituency, with the scandal of the misuse of improvement grants, and the way in which landlords abuse their rights in relation to tenants? I cannot see such provision in the Bill.
Mr. Eyre: The hon. Gentleman has raised on a number of occasions the serious matters to which he has just referred. On behalf of the Government, my right hon. Friend and I have always been prepared to discuss those matters in detail with the hon. Gentleman. However, the purpose of the debate is to deal with the proposals of the Bill, which, as my hon. Friend said, in introducing it, was brought forward with the agreement of both major parties on the Greater London Council. The planning provision regarding temporary sleeping accommodation is one of the items relevant to the problems in central London. The members of the Committee will be in a much better position than we are to examine in detail the issue involved. They will have the added advantage of hearing expert evidence. I commend the Bill to the House.
7.59 p.m.
Mr. Reginald Freeson: I was glad to hear the Under-Secretary of State's general welcome for the Bill. There are things in it which, as he and the hon. Member for the Cities of London and Westminster (Mr. Tugendhat) indicated, were put forward by both parties on the GLC. I was a little disappointed that the hon. Gentleman did not extend his remarks a little further, particularly that certain clauses of the Bill will provide substantial help for central London boroughs in handling some of their most serious problems. He had the opportunity to respond to the intervention by my hon. Friend the Member for Hackney, Central (Mr. Clinton Davis).
I want to touch on one or two features of the Bill. In doing so I hope that my remarks will be of direct relevance to the clauses in which I have a special interest. I begin almost back to front, by welcoming Clause 34. I do not know to what extent the Under-Secretary realises the implications of the clause, to which he gave a general acceptance on behalf of the Government. I was delighted to hear it.
If the power given in the clause is used fully by London boroughs it will open up great opportunities in terms of freedom of action from Government interference financially, and will provide more scope for urban renewal in its broader

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sense. What is more, it will do both at great savings to the ratepayers.
Perhaps I should explain those remarks at slightly greater length. The clause refers to powers being granted to the London boroughs to establish individual development funds and sets out the formula upon which they may operate and the ceiling to which they will be empowered to establish such a fund. In any one year it may receive a contribution of four times the product of a penny rate.
My own borough is not untypical, though obviously the figures will vary from borough to borough. It means that if the borough of Brent decides to use the power it will be able to make a contribution of £340,000 in any one year to such a development fund. The clause goes on to provide that the maximum ceiling permitted at any one time shall be 16 times the product of a penny rate. In my borough that would produce a figure of £1,360,000. I should love to see every London borough establish a development fund of that order.
I am reminded of my question to the hon. Member for Cities of London and Westminster. I understand why he could not answer it off the cuff. Obviously, he did not have the background information. I look forward to an answer in due course. The clause should be redrafted to cover the GLC. It is not good enough for the GLC, in its General Powers Bill, merely to be the vehicle for the smaller authorities in London—the boroughs—to establish development funds. The GLC should itself be taking power.
I am aware that because of its immense financial resources the GLC can spend a good deal more from revenue on capital works than can any London borough or, for that matter, any other authority in the country. It is spending about £20 million a year on housing by way of capital raised from revenue, as distinct from borrowing. I realise that there is not the same economic pressure on the GLC. However, I suggest that this concept of a development fund for the improvement, redevelopment and development of whole areas is needed by the GLC if it is to implement its planning powers sensibly and positively in a way that it has signally failed to do for a number of years. My hon. Friend the Member for Acton (Mr.
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Spearing) illustrated this point with a number of examples—
Mr. Ronald Brown: It will be within my hon. Friend's memory that I mentioned in this House the fact that the GLC refused to authorise open spaces in my constituency on the basis of the puerile argument that it did not have sufficient money—and that was in respect of only two or three acres which required development.
Mr. Freeson: My hon. Friend tempts me to pursue my argument on planning procedures. I am not speaking now of planning control but of more positive planning in the shape of urban renewal. This is a matter where local government generally still has a great deal more to do in terms of the organisation of its departments and its finances. It will be enabled to do it by effective Government action and if central Government and local government organise the financing of urban renewal on more coherent and long-term lines.
I welcome the concept of development funds. However, it is important for the GLC itself to establish such a fund. If some reference to the GLC were written into the clause and it used such a power, in any one year it could produce a contribution to a development fund for London of £72 million, and if the ceiling laid down-16 times the penny rate—were applied the fund would be £280 million. That is not an unimportant capital fund to have available for longterm positive planning.
Anyone who has had experience in local government and of the relationship between it and central Government in trying to get capital programmes going and maintained over a period of years will know the importance of establishing this kind of reserve so that there is flexibility and the capacity to move over a longer period of time than just from one year to another or from one period of two or three years to another period of two or three years, in terms of programming.
I could quote instances from my own area of redevelopment schemes being held up for want of some amenity provision because spending the necessary money would require either an extension of the locally-determined Vote head which the Government laid down or the inclusion

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of open space provision under the general freedom of action in terms of capital expenditure on housing. The Ministry has refused the latter, and the locally-determined Vote heads are by no means big enough—and will not be big enough for years—to allow the local authority to lay out the urgently needed open space and amenities for an area which has been redeveloped over the past seven to 10 years. Land has been bought, and is standing developed. The local authority wants to get the open space provided with various amenities to complete an urban renewal scheme in what has been our worst slum area. It cannot do so because of the financial inhibitions of this Government. It is there that I see provisions of this kind coming to the aid of local authorities.
I resist the temptation to discuss the matter further, though it is of tremendous importance, but I urge the GLC—if not the present regime, then any new administration which may follow the elections next month—to reconsider this matter. The matter may be pursued further in Committee, and the clause may be amended.
My next point is a general one on planning, which my hon. Friend the Member for Acton discussed at length. I want to deal with only one aspect. There is a need for better planning in London, in the positive sense to which I have referred. I hope that I do not sound arrogant, but I watch what is going on from an arms-length distance, and in my view there has for years been a need to give the planning department at County Hall a more effective role. It is still far too much an advisory department, which is dominated by road engineers' planning.
We come back to the motorway problem, which was raised by my hon. Friend the Member for Acton. Nowhere is this lack of effective planning policy and machinery in action to be seen better than in the whole mess into which we have got with the motorways. From the start, up to the public inquiry under Lay-field, the planning of motorways in London has been divorced from general town planning considerations.
Some years ago, when the proposals were first formulated and put forward for discussion, planning departments at borough level were pointing to the failure to plan roads in relation to the
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total neighbourhood planning of the areas in which they were proposed to be put. I am not talking about the bandwagon of action against motorways in various parts of London—and I do not say that in any way cynically. These comments were made at length and in detail by local planning departments when the schemes were first formulated. From the time that Layfield called for further information—which was not available—on matters relating to housing connected with the motorway proposals right up to today, the planning of these motorways has virtually been divorced from general town planning considerations.
It is said that 15,000 homes are involved. We do not know for sure, because of the qualifications and reservations which have appeared in the Lay-field recommendations. In Brent about 1,500 homes are involved. I assure my hon. Friend the Member for Acton and others that a high proportion are very good, not poor, homes. There might be some sense in trying to relate new motorways to areas which are in need of redevelopment and reshaping, pulling down, and rebuilding houses in the same time span as the motorways are being built, but that is not what is being planned. The motorways are being carved through districts where there is no need to demolish. They will wreck those districts not just in terms of houses being demolished but by virtue of the impact that they will have on the whole neighbourhood. I am speaking not only of Brent but of other areas, which have received much wider publicity on this matter. In my opinion, there has been a total lack of proper town planning. It is time that the planning departments were given a better rôle.
I turn now to Clause 23, on which I intervened earlier, which relates to creeping hotelisation, to use an ugly term. I look forward to hearing further details in Committee. By virtue of what we say today we may be supplied with further briefing material by County Hall.
I cannot see how this matter can be more than marginally affected, because I do not think that it can be properly policed. I do not see how we can expect to go into people's houses and see what is happening inside in terms of sleeping accommodation. I am not decrying the effort, because it needs to be made. We

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discussed this matter on the Floor of the House about a year ago on a motion proposed by my hon. Friend the Member for Holborn and St. Pancras, South (Mrs. Lena Jeger). Not only is it unlikely to be more than marginally effective; it does not deal with what is threatening to become a more important problem.
No doubt the creeping hotelisation of houses will continue. The indications are that there was a switch away, and publicity has been given in the Press recently to the fact that ordinary family dwellings are being held as such, in character with modernisation, repairs and redecoration, but that tenants are being put out because the properties are being sold over their heads and the flats are being held for transient visitors. Flats in properties which are being switched to hotel-type accommodation are being let to visitors to London. Families and residents of long standing are being pressurised out one way or another. Where tenants are moving out voluntarily, instead of the vacancies being relet to other well-established residents or prospective residents of a permanent kind they are being made available for visitors to London.
Therefore, Clause 23 will not be able to tackle the problem. Although there may be some resistance ideologically by hon. Gentlemen opposite, at the end of the day the only way to tackle the problem, if the market pressures continue, is by municipalisation. Hon. Gentlemen opposite may not like this term. They may feel ideologically so committed against it, because we on this side of the House have been advocating it for so long, that they will do nothing about it. However, I suggest that the only way to hold rented accommodation in London is by municipalising it, with the help possibly of housing associations, but it must be under the policy, direction and positive action of local authorities.
This was one of the views expressed by the Layfield Committee on the ground not only of the hotelisation of residential property, but on the need to deal with housing adequately in central London.
Mr. Tugendhat: I do not wish to become involved in the question of municipalisation, as the hon. Gentleman
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will appreciate. When dealing with blocks of flats, hotelisation is desperately unpopular with the bona fide residents, as the hon. Gentleman knows. I think that by virtue of that fact alone we could rely on considerable public participation in reporting abuses of this kind. Does the hon. Gentleman agree?
Mr. Freeson: Frankly, no. If the flats are to be relet as I have described, they will be relet as flats. I do not see how, in law, a local authority will be able to stop anyone doing that. I do not see how it can be policed. The hon. Gentleman said that he did not wish to become involved in the question of municipalisation, and that I understand, but sooner or later the logic of the situation will involve him. Having heard and read articles by him on housing, I suspect that he is a good deal nearer to the Socialist approach than to his party. When it becomes respectable and accepted as an idea by Conservative voters, as indeed is happening, perhaps we shall get hon. Gentlemen opposite supporting us on this matter.
Clause 23 will not solve the problem of properties being bought and sold over the heads of tenants, which is one of the spark-offs of this kind of activity, but some kind of tenants' enfranchisement measure would. Tenants would have to be notified by law of any prospective sale of property which they occupied. Local authorities would also have to be notified automatically when any prospective sale was to take place. Furthermore, tenants, forming themselves into a co-operative housing association, would be able to purchase the property by law, as of right, and/or to nominate the local authority to act on their behalf. I will not go into further detail but I suggest that the way to solve the problem is a mixture of municipalisation, tenant enfranchisement and socialisation of rented property, not Clause 23. It may help marginally, but it does not tackle or solve the problem. Sooner or later the problem must be tackled along these lines.
I turn finally to a very serious though perhaps not surprising omission from the Bill—on the subject of land in London. The time has long since come in city areas—certainly in London, which has the most intense housing stress—to empower local authorities to have first call

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on all land becoming available for sale, and at controlled prices. I do not propose to go into detail as to how this should be done. I put forward proposals on these lines to the previous Secretary of State for the Environment over a year ago. They were thrown out, after I had had a long correspondence with him on the matter. Until we tackle this subject we cannot tackle London's housing problems—not just the specific problems that we have been discussing but the general question of housing.
One figure is on the record at County Hall. About 46,000 planning approvals for new dwellings in Greater London on land at present available for such development have not been taken up. Most of them have been approved for over three years. The land is there and the planning approvals are there. About 1,000 acres of this land exists in London. It is about time that action was taken by local authorities and the G.L.C., not just to put restraints on the people who are holding this land but to get that land into public ownership, so that it can be used for the housing that has been approved.
It is a scandal and a disgrace that this situation should continue and that the GLC should still fail to seek the appropriate powers to take action in London because it does not have the political will to get on with the job of housing.
Some years ago—I think as far back as 1967—a GLC housing programme was under way which would by now have resulted in between 9,000 and 10,000 new dwellings being started each year by the GLC alone—never mind the boroughs. In fact, I suspect that if that programme had been maintained it would by now have been much bigger. Today, I believe —quoting from memory—we have a situation in which the GLC started 4,000 dwellings last year. I am not sure whether it achieved even that—
Mr. Clinton Davis: It was fewer than 4,000.
Mr. Freeson: In fact, it was fewer than 4,000, instead of the 9,000 to 10,000 in the programme for this year. I believe that that figure could go up, and needs to go up, to 12,000 or 15,000 a year. But there has been a dismal and abysmal failure by the GLC in these last years
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to undertake its responsibility in this field.
It is another disgrace and scandal that the biggest authority in the country should have failed so badly to keep to its housing programme. It failed not by accident but by political decision. It failed because it did not have the political will to get the houses built. We are all agreed on the need to get them built. The need is so great as to require in London a doubling of the new house building programme by local authorities generally, of which that 12,000 or 15,000 would be the GLC's annual contribution.
To spark off that programme, to get it going again, action needs to be taken on land. The first priority is to bring into public ownership the land with planning approval for 46,000 dwellings already granted, to get the dwellings started. There is nothing in the Bill to move along those lines, and this is probably the central issue in London today. The reason that it is not in the Bill is that the present administration at County Hall does not have the political will or desire to do anything more about the house building programme than its present pitiful record shows.
8.25 p.m.
Sir Brandon Rhys Williams: This is a Bill with which it is difficult to quarrel, and hon. Members on both sides have so far tended to refer to things which might have been in the Bill but are not, rather than its actual contents. I will tread the same path in what I have to say about Clause 23, which has already attracted some attention.
They say that imitation is the sincerest form of flattery, and I am naturally delighted that the GLC should have reproduced in this general powers Bill substantially, if not identically, the same provisions as were piloted through the House last year in a Private Bill introduced by my own borough. I am glad to see this protection extended for the benefit of all the boroughs of Greater London, because it is a thoroughly useful one.
I do not share the misgivings, particularly of the hon. Member for Willesden, East (Mr. Freeson), that it will prove unenforceable. This is something that only the passage of time will show. The fact that the conversion of property by creeping hotel development is illegal without

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planning permission will deter many speculators, even if some are sufficiently audacious or foolhardy enough to go ahead and defy the regulations nevertheless. This is a useful measure, and I am delighted that it is in the Bill.
However, I wonder whether it is not possible to tackle the creeping hotel problem on a somewhat wider basis. I have previously recommended in the House another approach which I should like to repeat now in the hope that the Committee might be in order in considering it, possibly including something in the Bill along these lines.
What we are trying to tackle is a planning change which makes no apparent structural alteration, or may require none, but which, at the same time, substantially changes the character of the user of the property—particularly blocks of flats—and the sort of tenant. This is the point which regular Londoners find so objectionable.
The question is, how to catch all the changes which make up the creeping hotel problem. If we catch the provision of up-to-three-week accommodation, we shall have done something useful, but there are also short-stay tenancies of more than three weeks which change the character of a block when it has been used for unfurnished letting for perhaps seven or ten years or longer periods before that.
The hon. Member for Willesden, East is right to draw attention to the need to have a readily enforceable system of rules. If we analysed this, we might find our way to a solution which goes beyond what is in the Bill. First, the change that we are speaking of invariably increases the cost of the accommodation. That is obviously the purpose of the change. Second, the existing tenants have to be pushed out by one means or another. They are the people, as my hon. Friend the Member for the Cities of London and Westminster (Mr. Tugendhat) pointed out, who are most likely to draw attention to what is going on.
There is therefore an army of "informers" who are able to let the planning authorities know their suspicions as soon as they find that vacancies arise in a block of flats that the landlord seems in no hurry to fill. When one finds that
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there is a number of empty flats in a block, one must suspect that a change of use is intended. This very soon attracts attention, particularly where tenants are somewhat jumpy about landlords' intentions. The extra revenue per room normally arises from an increase in the service charges, taking the service charges in a very general sense. Often one finds that quite luxurious accommodation is provided by expensive furnishing or redecoration, and a relatively high standard of service is sometimes provided in order to attract the sensational rents which can be obtained in central London, particularly at the height of the tourist season.
If one looks for increased service charges of a sudden kind or the introduction of a service charge where none existed previously, one is probably focusing one's attention on this problem in the best way. It is the sudden increase in service charges which the creeping hotelier is trying to achieve, so that is a point at which the change of use can be detected and controlled. I have suggested previously in the House that the introduction of a service charge when none existed previously, or an increase of 50 per cent. in service charges in any one year, or perhaps 100 per cent. over a longer period of two, three or even five years, should be taken to constitute a change of user for planning purposes and should require specific planning consent.
I do not know whether that is an idea which will commend itself to the Committee or whether it would be in order at this stage of a Bill of this kind to add to the provisions brought before the House on Second Reading. But I hope that my suggestion will receive further study in Committee or in the Department. I have given this problem a certain amount of thought and we have experience of it in South Kensington. I believe that this is the way ahead.
In general, I find what the Bill contains largely uncontroversial. I wish the Bill a safe and rapid passage through the Committee.
8.32 p.m.
Mr. Thomas Cox: I wish to speak about Clause 34, in the hope that if it is enacted it will help to improve some of the things about which I wish to comment.

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I am sure that many hon. Members on both sides of the House who represent London constituencies will agree that whereas some parts of Britain have singular problems of unemployment, housing, transport, the environment, and so on, we in London have all of them. When I first became a Member of Parliament, at my advice surgery the problems generally centred on housing, but I now find that the question of employment is fast overtaking the problems of housing.
Many of my hon. Friends and I have asked Questions about the Government's policies on employment for London, in the hope that the Government could start to give some genuine hope to Londoners, be they school leavers or adults, as to the kind of staple secure employment that will be available for them in London. Although we are promised many things in the replies we receive, we know only too well, as do our constituents, that very little has been achieved despite the pressure we have been putting on the Government for many months.
Many of the inner London boroughs and a large number of the outer ones have long had a history of local employment —employing local people, both skilled and unskilled—and of apprenticeships being available to young people in those areas. Generally, because of this, the whole community has flourished. Unfortunately, much of this is now in fast decline. The most recent figures indicate that in the last six years—from 1966 to 1972—Greater London has lost over 400,000 jobs. Not only have these jobs been lost; the apprenticeships which clearly would have been available but for this kind of loss have also been lost. The position worsens month by month.
In my borough, which once had many industries operating along the waterfront from Battersea, through into Wandsworth and along to Putney, we have found in recent years that many industries have closed. Those industries offered a great deal of employment to local people in the borough and from surrounding boroughs. They have closed down. Regrettably, nothing has come into the borough to replace the jobs which have been lost in recent years. I am sure that other hon. Members could relate similar experiences in boroughs that they represent. Some of the jobs have obviously gone because factories have moved out.
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Many of us are increasingly concerned that jobs have been lost not because industry has left but because factories have been closed down under the guise of one reason or another, and the owners of some of those factories have been making substantial profits from selling their sites, often to private developers and speculators who have embarked on enterprises which have not been of benefit to local residents. There can be no dispute about that.
It may surprise hon. Members that we in Greater London have the highest weekly figures of redundancies of any region in the country. We now lose 6,000 jobs a week. The great difficulty that this causes is something that we can all understand. In my constituency skilled men have lost their jobs and have taken unskilled employment, often in public services. Great credit is due to them for taking this work, because we know of the problems that have been facing many of the essential public services in our cities in recent years. They have taken these jobs, with a corresponding loss of income, for one reason only—to get stability of employment. Other skilled workers have tried to retain the skills and follow the jobs they may have been in for many years, and this has resulted in their travelling to other parts of London, with all the problems that that causes. They have to allow for travelling time and the increased cost of travelling resulting in a lower weekly income. This is much of the cause of the industrial disputes now taking place and, tragically, it is a point that the Government seem completely to miss or to ignore. It has great relevance to my constituency.
Mr. Ronald Brown: Does my hon. Friend realise that by the loss of these 400,000 jobs that cannot and will not be replaced there is therefore a continual decline throughout the industrial scene in London?
Mr. Cox: I agree with my hon. Friend, but I hope in the latter part of my speech to deal with the prospect which I hope we can hold out to London generally. If properly applied Clause 34 could provide for the redevelopment of industry and greater job opportunities in Greater London and I am sure that he, like myself and other hon. Members, would welcome that.
Mr. Eyre: I am interested in the points the hon. Gentleman is making. I see a number of compulsory purchase orders affecting land in various London boroughs, and often those orders affect small factories and businesses which have to close down and be reaccommodated. Often the inspector recommends to the local authority that it should provide alternative sites for those businesses. In view of what the hon. Gentleman said, perhaps he will agree that it is important that local authorities should do everything possible to provide alternative sites, in view of the important contribution that the businesses can make to the variety of employment in London.
Mr. Cox: I take the Minister's point and I go a long way with him. There are two factors on which he has not commented. One is the cost and the other—to which I referred earlier when I mentioned the Questions that we had put to the Government—is the granting of IDC certificates for London. We cannot get satisfactory answers, although many hon. Members have repeatedly put these Questions to the Secretary of State for Employment and the Secretary of State for Trade and Industry about the position in Greater London. With the greatest respect, we get a load of waffle, but nothing at all constructive.
To reply to the Under-Secretary's point, so concerned was my borough of Wandsworth about its loss of employment that it commissioned the report published in August of last year. Five council officers worked full time for many months in compiling the report. It has now been agreed that a full-time officer should be appointed with the sole responsibility of trying to encourage jobs back into Wandsworth. I am sure that the kind of efforts we are making in Wandsworth are typical of those being made by other London authorities.
In the debate the problems facing London and Londoners of all age groups as a result of loss of employment must be realised. Great criticism can be made of the GLC for its lack of concern in this matter. No concern has been shown by the GLC, although the necessary evidence has been available for a very long time.
There is hope under Clause 34 if it is correctly applied. My hon. Friend out-
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lined the kind of finances available. I suggest that the finances available from the GLC added to those that the boroughs could raise by way of rates might total about £100 million a year. I do not suggest for a moment that that sum should be applied for employment alone, but a large part of it could be so applied and thus begin to give hope to many thousands of Londoners who, week after week, are uncertain how long they will remain in their jobs. This is a matter at which we should look in greater depth than we have so far done.
Several other points ought also to be examined. In Greater London some developers have been obsessed with certain kinds of development. One can cite office development or hotel development which has had little benefit for anyone living in my constituency.
The point already made in the debate regarding the amount of square feet of office development in London should be reiterated: nine million square feet unoccupied, eight million under construction and eight and a half with planning consent. We have gone mad on office development in London. But again there appears to be very little co-ordination between the GLC and the Government to stop this development. It appears to he very easy to obtain office planning permission in London—in spite of all the evidence available of millions of feet of office development remaining empty not for months or weeks but for years on end—rather than to try to encourage into London industries which will offer jobs for which skilled people are available in the city.
The kind of facts we must attempt to ascertain from the Government concern such matters as the granting of IDCs for London. As I said earlier, we are told that these are available, but one hears an entirely different story from any local authority that has attempted to get them.
Another matter which must be scrutinised much mare closely is the question of Government grants for industry to move out of London. This has become an absolute racket. Some firms will move out of London willy-nilly, without any concern for the social problems they cause purely because they receive substantial Government grants with which

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they virtually remodernise their factories. In fact, such firms allow this run-down in the hope of receiving a sizeable Government grant and then remodernise with no concern for the many people who will be left behind and without in many cases hope of future employment.
It is, therefore, time for Government help to be given to encourage employment either to remain and develop, or to develop afresh, in London. All the evidence points to the kinds of job that have been lost when there is indisputably a demand for the kinds of product that were previously being made in London. But the jobs have gone, resulting in a great deal of human suffering. What is needed is regular meetings between representatives of the Government, the GLC and the London Boroughs Association, not meetings once or twice a year but regular meetings where the general problems of London can be discussed. I suggest a committee named "Employment and Industrial Development for Greater London". That shows how important the problem has become.
The issue crosses party lines. No party considerations are involved. At least, they should not be, because whether we represent the Labour Party or the Conservative Party our first obligation as London Members is to try to safeguard the job opportunities of Londoners. We have not been very successful. All the evidence points to the continuous rundown of job opportunities in London in recent years, and unfortunately that is continuing.
If there is willingness on the part of the Government and the GLC, there can be no question about the willingness of the boroughs, many of which have repeatedly requested the Secretary of State for Trade and Industry to have regular meetings at which the problem can be discussed. With that willingness by the Government and the GLC we can in a very short time start to give greater hope to Londoners of all ages—the adult man who finds himself redundant, with little hope of secure employment, and the youngster who, even when apprenticeships are available, and there are not many, will question the wisdom of entering one when he will ask, "How long will the factory remain open? Shall I still be an apprentice in a year, or will the firm then be closed?"
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Our task as London Members is to fight to give that hope. It is of the utmost priority for all of us who are concerned about the problem.
8.48 p.m.
Mr. David Price: Unlike the hon. Member for Wandsworth, Central (Mr. Thomas Cox) and all the other hon. Members who have spoken so far, except my hon. Friend the Under-Secretary, I am not a London Member. But I am concerned about the Bill.
I am very dubious about Parliament's allowing the Greater London Council any further powers in any respect until the GLC learns to exercise its current extensive powers with more responsibility and more concern towards people and local authorities outside London. I shall illustrate my argument by reference to the behaviour of the GLC in South Hampshire. Hon. Members may have seen Motion No. 216. I can probably put my argument most succinctly by reading it to the House. It says:
"That this House deplores the efforts of the Greater London Council to buy for London housing development 30 acres of land at Lowford in the parish of Bursledon, adjacent to the City of Southampton, which land lies in Area 18 of the South Hampshire Interim Plan (S.H.I.P.II), thus negating the entire strategy of the South Hampshire Structure Plan which specifically excludes planned immigration into South Hampshire; and invites the Secretary of State for the Environment to prevent the Greater London Council from buying land anywhere in South Hampshire which has major development problems of its own."
My complaint can be put on four counts. First, I do not believe that the GLC should be buying any land at all in South Hampshire because we have major growth problems with our own indigenous shortage of land. These problems have been brought together in the draft of the South Hampshire Structure Plan and are well known to GLC officials.
Secondly, I suggest that South Hampshire is too far away from London to be of any real assistance in the serious housing problems of London, whether for elderly people or for people of working age. If anyone in the GLC thinks it is possible to journey from anywhere in my constituency to work in the factories of Wandsworth which the hon. Member for Wandsworth, Central (Mr. Thomas Cox) was talking about, I recommend

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him to do the journey and see what it is like.
As for elderly people, we have seen the same problem in other parts of England. The GLC have said that it is good for elderly people to be at the seaside, but certainly, to my knowledge, it has not proved successful. These people come down under pressure from the GLC and become the responsibility of other authorities and hence of other ratepayers. I am sure that every hon. Member knows that as regards the elderly there is a limit in any given area to the amount of voluntary support which can be got to help the old with their needs. There are threshold levels in regard to numbers. I do not believe that it is the proper solution for elderly people to take them away from the environment and the community they know, from their family, their children, their grandchildren and their neighbours. This is not, socially, the right answer and I do not believe that it is any solution to a major social problem.
My third point is that if the GLC wishes to buy land outside London it should have the common courtesy to consult the local authorities concerned. The GLC is not the only body concerned with the sort of problems we are hearing about today. I know its problems are on a larger scale, but qualitatively they are no different from the problems of many other local authorities around the country. Now particularly, when we are to have metropolitan and non-metropolitan counties, the GLC should recognise that although it remains the largest local authority in the country, we are not all non-league sides, if I may draw a further analogy, and the GLC the only member of the first division.
Mr. Freeson: I think we are all rather surprised, to put it mildly, by something the hon. Gentleman is telling the House. Could he tell us whether it is correct that the GLC has failed to hold consultations even with the joint planning committee for the South Hampshire development?
Mr. Price: If I may take the specific point I refer to in my motion, it is the Winchester Rural District Council, and according to my local authorities it was
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never informed at all, nor was the Hampshire County Council. We have not yet got the new non-metropolitan county of Hampshire, so there are three parties to the structure plan—the Hampshire County Council and the county boroughs of Portsmouth and Southampton. In a year's time we shall become the new non-metropolitan county of Hampshire.
The fourth point I make is that, when the GLC bid for land, I believe they should do it openly and not through agents. My local authorities have described to me the recent action of the GLC in South Hampshire as akin to that of thieves in the night. That is the language of my own officers. I can tell the House that the South Hampshire members of both parties have supported the concept of our strategic planning, although there have been certain criticisms from some of the interests in our constituency that insufficient land for building is to be made available for immediate local needs
I think I ought to illustrate this by explaining to the House that the South Hampshire Structure Plan is itself based on three earlier studies—the South East study of 1964, the South Hampshire study of 1966 and the Strategic Plan for the South East of 1970. I draw the attention of the House to the first and third of these, because the GLC participated in both these plans. In the South Hampshire Structure Plan, just to show hon. Members that I do not think we are being unreasonable, we are talking about a growth rate from the base year of 1966 of an actual population of 800,000. I give round figures to keep it simple. It is estimated that by 1981 the population will be up to 1 million, that by 1991 it will be up to 1,200,000, and that by 2001 it will be up to 1,400,000. This is a massive growth.
It is also calculated that the permanent dwelling need in South Hampshire is likely to give rise to a new house building need of some 145,000 new dwellings in the period from 1966, our reference year, to 1991. That is from a 1966 base of 261,000.
I turn now to the context of land use, which, again, is relevant to my complaint against the GLC. Our total land needs between 1966 and 1991 will be approximately a further 10,000 acres above existing commitments and above what is made

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available by redevelopment. This amounts to an increase of more than 16 per cent. in our total area of 60,000 acres of built-up land. I think that in these circumstances the House will agree that my complaint is not unreasonable.
The draft structure plan has not yet gone officially to my right hon. and learned Friend the Secretary of State for the Environment for approval. The plan states categorically:
"No provision is made for the planned intake of population into South Hampshire."
Let it be noted by those hon. Members who represent London constituencies, lest they think that I and my colleagues on the local authorities in Hampshire are not sympathetic to the major problems which face the GLC, that we in Hampshire are involved in two properly planned overspill schemes at Basingstoke and Andover. We are playing our part in helping London.
Mr. Wellbeloved: London Members on this side of the House are entirely with the hon. Gentleman in the points he is making. We think it scandalous that the Conservative-controlled GLC should be treating local authorities with such contempt, particularly when in London there are areas of land which could be developed if oniy the GLC would get down to the job of doing it.
Mr. Price: There is nothing illegal in what the GLC is doing. The London Government Act 1963 gave it complete authority. Nor has my right hon. and learned Friend the Secretary of State any power to intervene in these matters. I have consulted those who are learned in the law on that point. I believe that the situation will have to be remedied by amending legislation, and I give notice that I and some of my colleagues from Hampshire may well endeavour to do so.
Since these issues of South Hampshire have come to light, and since I and some of my hon. Friends placed Early Day Motion No. 216 on the Notice Paper, other hon. Members from other parts of southern England have indicated to me somewhat similar cases in their own areas. I believe that if the GLC is determined to continue with this practice, legislative remedy is necessary. In the meantime, I cannot support a Bill to give any more power to the GLC until it has at least, in
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the language of the lawyers, purged its contempt of the people and local authorities of Hampshire.
9.0 p.m.
Mr. Ronald Brown: I can assure the hon. Member for Eastleigh (Mr. David Price) that I very much support him in what he said about the GLC. I hope to show just cause for saying that he is right. I am continually having sessions with the GLC about constituency matters. The housing situation in Hackney is frightening.
I want to tell the House about one case in particular which I heard about from a probation officer. It concerns a family comprising a mother, father and seven children. The males are aged 23, 17, six and four, and the females 19, 14 and three. The two young men of 23 and 17 sleep in the same room as their sisters of 19 and 14. A younger brother shares one of the bunk beds with his sister. The other child sleeps with his parents. I raised this with the local authority because it is a local authority two-bedroom house in which this family is living. I received a letter from the local authority acknowledging that this was a real problem but saying that it was unable to help and not likely to be able to help in future. The letter said:
"I am most concerned that such a serious overcrowding situation exists in a Council dwelling … everything possible will be done to transfer them to larger accommodation … In addition to these commitments, there are at present 18 4 and 5 bedroom families who have the maximum medical priority awaiting rehousing."
The case I have cited is not as bad as the other 18 and the House has heard of their bad living conditions.
I asked the council to nominate this family to the Greater London Council but was told that the council is not allowed to nominate such families to the GLC because it has no accommodation for four-bedroom families. I have had a copy of that document from the GLC sent to me. Having adduced all the arguments about not having any property, I am now told that not half a mile away from where this man is living in such appalling conditions there are 14 four-bedroom houses owned by the GLC up for sale. Providing any of these people can afford from £11,000 upwards, there is a four-bedroom house just down the road.

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I have passed this information on to the Department and asked for a public inquiry into the scandalous situation whereby a Member of Parliament can be so misled in his inquiries. This is not the only case. I have frequently been told that there was no possibility of housing urgent cases because of a lack of premises yet at the same time the GLC has gone ahead with the sale of houses. I have a list of places within a short distance of my constituency where there are such houses for sale…14 four-bedroom houses, four four-bedroom houses, 16 three-bedroom houses, 33 three-bedroom houses, two two-bedroom houses.
Provided a person has from £8,000 up to a figure which has not yet been decided, but which if rumour in my constituency is correct will be fixed at £12,000 for a group of 10 three-bedroom houses, he can obtain a home. The document I have received points out that gross earnings per month must be five times the monthly mortgage repayments. An example is given showing that to afford the lowest-priced house of £8,000, payable over 25 years, a person needs £250 a month or £58·50 a week. This is a scandalous situation not least because it involves the misleading of Members of Parliament. My hon. Friends and I are told that there is no property available, yet the GLC prefers to play this silly game of putting homes up for sale.
Now I come to South Hampshire. All around London there are houses available for people living in Hackney where, incidentally, there are 10,000 people living in inadequate accommodation. More and more homeless are coming in from South Hampshire and other places and here the GLC is trying to sell houses in London to people from South Hampshire and at the same time going down to South Hampshire and stealing land from under the very noses of the county council. This is a GLC gone mad, and the House must at some stage take it to task.
It is an impossible position when we find that our constituents are living in these appalling, miserable conditions. I would underline the fact that the case I have quoted is typical and not unusual. It seems to me we would not be doing justice to our constituents if we did not raise such cases under the General Powers Bill, which is the only way I can protest
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on behalf of my constituents against the work of the GLC.
Mr. Clinton Davis: Would my hon. Friend agree that the number of cases that he and I get of the kind to which he has been referring must be some 20 or 30 a week and that absolute hopelessness is written on the face of so many of our constituents?
Mr. Brown: I do confirm that. I have told the Minister this and the standard reply is that, however serious such cases are, they are very sorry but there are just no properties available. I am submitting tonight that that is grossly untrue. It is a political decision of the GLC that properties are not available.
I would like to talk on a second item, on which I intervened when my hon. Friend the Member for Wandsworth, Central (Mr. Thomas Cox) was speaking in relation to open spaces. For many years since I have been in the House I have raised the matter of the need for open spaces in my constituency, which has none. There is no green grass or trees. We have three principal areas which have been under compulsory purchase order since 1965, in Shepherdess Walk, in Shoreditch Park and Haggerston Park, each partially developed with an acre or two of very sparse grass.
Back in 1968 I took up with the GLC the question of establishing Shepherdess Walk Park. It would mean development, with houses being pulled down and families rehoused. The properties are in a disgraceful condition and people there who have been subjected to compulsory purchase since 1965 have sat patiently, coming to see me regularly about the situation. I have gone regularly to the council while trying to persuade my constituents to be patient in the hope that eventually the GLC would get round to doing the job.
In April 1971 an order was laid transferring open spaces in London from the GLC to the individual London boroughs. I prayed against that order but the Government would not find time for me to establish may case, why I thought it was bad and why Hackney would be unable to provide that kind of open space, first because of the lack of money, secondly, because families could not be rehoused, having regard to the situation about which I have spoken, and thirdly because it was

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impossible to do all the reorganisation and taking out of industry, quite apart from housing.
The Minister—the hon. Member for Crosby (Mr. Graham Page)—sent me a three-page letter when I raised this matter in the House, pointing out how wrong I was and telling me that he had spoken to the GLC about the transfer of land in Shepherdess Walk and had been assured that conversations were going on between the GLC and the London Borough of Hackney and that there would be no problem.
Nearly two years have elapsed, there is no park, and no conversations are going on. Those people are still living in Shepherdess Walk in appalling conditions waiting to be rehoused. The London Borough of Hackney answers me by saying, "We are terribly sorry. We will get in the public health inspector and do what we can." The owners do not spend any money on the buildings because they are under a compulsory purchase order. Not only is there no park, which was planned years ago, but these people are forced to continue to live in deplorable conditions because the GLC, having started on this venture at my insistence in 1968, has handed it over to somebody else who is unable to do it. I do not blame the GLC, which was trying to shift the burden of responsibility, but I do blame the Government. The Government refused me the right to put my case before they approved the order.
Mr. Stallard: Will my hon. Friend accept that that is a common story in London? In North St. Pancras the plan for an open space has been in the state described by my hon. Friend not since 1965 but since 1951. The LCC sat on the proposals and when they were handed over to the borough a compulsory purchase order was put on the site. One can imagine the blight that has affected the area ever since 1951. Literally nothing has been done. Many of the houses have no standard amenities. The Government eventually turned down the compulsory purchase order proposal. The speculators move in and the harassment begins. But I will tell the House about that shortly if I catch your eye, Mr. Deputy Speaker.
Mr. Brown: I am grateful to my hon. Friend for supporting me. In years to come Clause 34 may put that matter to
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rights and the borough council may be able to develop the open space.
The GLC has been dilatory, and that is why I am calling for a public inquiry. It is a matter of the greatest public importance, and the GLC should not be allowed to get away with this sort of behaviour.
On 26th January I wrote to the Minister, but so far I have received no reply. I ask him to stop the sale of the houses pending an inquiry into the needs of Hackney. It is a matter of great importance that a decision should be taken urgently.
I have raised frequently the transport situation in my constituency, which is an absolute disgrace by any yardstick. Every heavy juggernaut in London comes through the area. Night after night my constituents are kept awake by heavy vehicles. I have petitioned the GLC many times and recently the council has been a little more helpful.
Originally, I was misled into agreeing to a temporary ban on heavy vehicles using one road. I was given a promise that within 12 months the arrangement would be made permanent unless there was some impediment. That was three years ago, and the arrangement is still not permanent. One of my colleagues on the GLC told me that I was being misled by the council, but I chose to believe what the council said, since it is not my wont to disbelieve public representatives. But my colleague was right, and I am still waiting. Since my intention to oppose the Bill has become known I have received a letter from the GLC stating that it is the council's intention to put in train the legal formalities necessary to implement the promise given three years ago. I pay tribute to the GLC to that extent.
It is not the responsibility of hon. Members in this House to keep fetching and carrying for Greater London Council. The council knows what is wrong and it knows what its powers are and what it should be doing. It is quite insufferable that we have to act virtually as welfare officers running after the officers of Greater London Council to tell them to make sure that their political masters make intelligent decisions.
I hope that our discussion tonight will again underline to the Greater London

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Council how very dissatisfied London Members are with our relationship. I accept the point made by the hon. Member for Cities of London and Westminster (Mr. Tugendhat) that we should have other means of expressing our grievances than those provided in debate on this Bill. It is unsatisfactory that on this occasion we have to make these comments, because our boroughs have asked for certain powers. But this is the only way in which we can put forward these problems.
There is a great problem in London over housing for nurses and teachers, who are in revolt. The Government will not allow teachers to get their measly allowance. The cost of living in the London Borough of Hackney where they are trying to teach is enormous. Yet the Government will not give them the London allowance to help them to cope with extra costs. I believe all the schools are closed either because of shortage of teachers or shortage of gas. It is an impossible situation, but the Government appear to ignore it in the hope that people will revolt and that the teachers will suffer opprobrium from the public. They are seriously wrong, for public support is behind the teachers.
When one sees the conditions under which they have to teach and the deplorable situation they have to face, one understands why they want some help to meet the cost of living in London. No one volunteers to come to teach in my constituency. They are all pressed men. When they come to the constituency they have nowhere to live and they find the conditions for work deplorable. They stay because they are dedicated—not because the conditions are right. They are loyal to the educational service and to the children. I pay them that tribute. London teachers are entitled to the London allowance in full. I support them 100 per cent. It is disgraceful that they are being forced to go on strike so as to call attention to the deplorable situation they face.
I hope that another way will be found for discussing our grievances. I believe the GLC is guilty of dereliction of duty and has behaved in a disgraceful way. What it has done in South Hampshire cannot be excused. Why does the council
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go to South Hampshire to steal land when only a few yards away there is the London Borough of Bromley which is well enriched? They go to the London Borough of Bromley to do their dirty work. They have done a deal with that borough.
Mr. Freeson: Is my hon. Friend aware that, according to information which I have had put before me only this week, a similar arrangement or deal has been done between the present GLC administration and Kingston? It is an agreement not to build any GLC housing there, provided that there is a I per cent. nomination per year.
Mr. Brown: I thank my hon. Friend for that information. That is the kind of thing that is happening in terms of South Hampshire. The GLC is going all that way when there is plenty of land available in Kingston and Bromley which will help to solve some of these problems.
Mr. Thomas Cox: My hon. Friend has cited the situation in Bromley. Could I draw his attention to a Question which I tabled for answer on 11th December last when I sought to discover the number of local authority dwellings which were under construction. My hon. Friend will be surprised to hear that in Bromley there is not one GLC house under construction. Indeed the borough has only 228 under construction. In Enfield there is not one GLC house under construction. The borough has 272 under construction. In Hillingdon there is not one GLC house under construction. The borough has 551 under construction. In Kingston-upon-Thames six GLC houses are under construction—so at least Kingston is making a start.
Mr. Deputy Speaker (Sir Robert Grant-Ferris): Order. The hon. Gentleman's intervention is rather long, and he knows that he must not make two speeches.
Mr. Brown: I am grateful to you Mr. Deputy Speaker, and I am also grateful to my hon. Friend the Member for Wandsworth, Central, for drawing my attention to that information. We have tried to illustrate that the GLC has a responsibility which it has not been discharging. This is the gravamen of the charge we make. This is not a party political issue. Hon. Members in their constituencies have to face the people

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and say to them, "There is no hope for you to obtain housing accommodation". I know of a mother and father and seven children living in a two-bedroomed council flat for whom there is no hope of alternative accommodation. The situation is absurd, and I hope that this debate will lead the GLC to behave like a genuine local authority. If it does not do so, then it must get out and let in somebody who can do the job.
9.23 p.m.
Mr. Michael McNair-Wilson: I cannot remain in my place and allow the Greater London Council to be attacked in this way, as though everything the council does and thinks is politically motivated. We have heard mention of open spaces. Why cannot the Labour-controlled Waltham Forest borough find £6,000 to convert derelict land into playing fields for the use of 400 children, when at the same time it can provide a sum of £15,000 to erect aerials for the reception of colour television? If the hon. Member for Shoreditch and Finsbury (Mr. Ronald Brown) thinks those are the right social priorities, I do not agree. That has nothing to do with the GLC. It has something to do with a council which has strange priorities and which claims to be Labour.
We have heard a good deal about housing and we in Waltham Forest have a waiting list of 6,000 people. I recently asked the housing manager why the figures seemed to go down so slowly, if at all. He answered that as people get married at a younger age, there is a greater demand for housing and people who live in bad houses are demanding better housing. The result is that housing that was once good enough to live in is no longer thought fit to live in—and nor should it be. This causes the problem.
In the same way when a tenement block is pulled down, then the housing accommodation that is put in its place must be of a much better standard than that which was provided in the tenement, and this means more units of housing, for generally people are asking for better housing. I agree that around Greater London there are too many sites that for various reasons have not been pressed into action. Such sites do not belong
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just to the GLC but, for example, to British Rail and the British Waterways Board. The time has come for somebody to do a survey of land in London that could be used for housing. I suspect that we would find that there is a good deal more of it than many of us realise.
Mr. Freeson: Perhaps the hon. Gentleman has overlooked the fact that such a study was embarked upon and completed by the London Action Group, chaired by his hon. Friend the Under-Secretary of State for the Environment. We are still waiting to hear the results of such information being collated and additional acreage being made available to local authorities for housing purposes.
Secondly, is the hon. Gentleman aware that one of the reasons that Waltham Forest is suffering today is because, under the hon. Gentleman's party administration only a few years ago, there was a sharp cut in the housebuilding programme year by year for three years?
Mr. McNair-Wilson: I do not intend to pursue matters relating to Waltham Forest, as we are talking about the GLC, but if a site of roughly one acre of derelict land can remain completely useless and not be used for the benefit of children or for housing, I find it difficult to believe that the council, which is now Labour-controlled, has its priorities right.
I now want to speak about Clause 30 which relates to hygiene in food shops and stalls. I am sure that all hon. Members will agree that it is entirely right that we should pay the greatest attention to the standard of hygiene in food shops and at stalls. We must be concerned if there is any danger to public health because of vermin, refuse or any of the other dangers set out in the Bill as being within the terms of what the officer of health may discover.
This is the first time in any GLC Bill that the GLC has attempted to lay down one standard for street market stalls throughout Greater London. It is a departure from custom which I welcome. In my constituency there is a successful and bustling street market which has been in existence for 40 years. Anyone who has been to see it on a Friday or Saturday will realise that it

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is something of a magnet for North-East London. It is welcomed by the shopkeepers in the High Street. They appreciate that it brings to them a great deal of custom.
The street market sells a wide variety of goods, including foodstuffs. The stalls are prized possessions of those who hold licences within the market. However, the market is licensed by the borough and therefore does not come under the GLC, except for Clause 30.
An unfairness which exists between some markets relates to the passing on of the holding of the stall from one family to another. The stalls often pass from father to son, or even from a father to a nephew. Under Section 21(2)(a) of the London County Council (General Powers) Act 1947, as amended by Section 33 of the London County Council (General Powers) Act 1962, when somebody holding a stall dies an application by the person or relative to whom the deceased stallholder wished to leave the stall must be made within 10 days. A number of the stallholders in Waltham-stow are of the Jewish faith. As I understand it, when a member of his family dies a Jew mourns for seven days. A situation is thus created whereby the son or the daughter of Jewish parents finds it extremely difficult to make application for the stall that once belonged to his or her father or mother. I consider this to be a considerable unfairness to persons of that faith, more especially because in Walthamstow and in the inner London boroughs application must be made within 10 days, whereas in the City of London 21 days are allowed. It seems nonsense to say that in one area of London there shall be a 10-day period while there is a 21-day period in another. Therefore, it is surely necessary for the GLC to produce some sort of common practice applying to all street markets on matters concerning applications for licences.
If I may pursue the point a little further, the word "relative" has different meanings in the City of London and in the outer boroughs or the old LCC area. In one case a very broad category of people is included and in the other a very narrow one. Here again, there is an unfairness which should be ironed out, though of course the GLC's Clause 30 is
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beginning to introduce commonality, which is a move in the right direction.
The reference in Clause 30 to food hygiene suggests that the clause will hold good throughout the whole of Greater London. However, I do not know whether it will supersede legislation such as the Walthamstow Corporation Act 1956. Will the penalties laid down in Clause 30 replace those in the Walthamstow Corporation Act, or will both Acts have a bearing? If they will, the street traders of Walthamstow are likely to run a double risk. If a food inspector in Walthamstow believes that a stall is unhygienic he has the power to revoke the licence. But he must give seven days' notice and he must be willing to listen to an appeal from the stallholder. Under thte GLC's Clause 30, 24 hours' notice is all that is required to close down a stall. Will the stallholder in Waltham-stow be put in a position where he can be had under one of two Acts and, if so, which one?
Mr. Ronald Brown: The hon. Gentleman will find that the provisions under Part IV come directly from the London Boroughs Association. Waltham Forest will have been involved in the drafting of the clause. This is not a Greater London Council clause. This is the part of the Bill in which the GLC allows the London Boroughs Association to put forward its proposals. Waltham Forest will have the right to apply this power itself. In other words, in spite of the Walthamstow Corporation Act, presumably it feels that this proposed power will be helpful.
Mr. McNair-Wilson: I am grateful to the hon. Gentleman for raising that matter. I should have thought it was clear. But it is not. I know that there is provision for compensation in Clause 30 if subsequently the stallholder is found to be not guilty. However, there is some possibility that he is in jeopardy twice over, and that does not seem reasonable.
Then there is the matter of complaints which may be made against the stall-holder for having premises which are unsatisfactory or whose structure, fittings, fixtures and equipment are defective. Does that mean that all stall holders selling foodstuffs from now on should seek to have their stalls examined by a GLC inspector to ensure that they meet whatever are the criteria being laid down?
Mr. Ronald Brown: It is obvious that I did not explain myself very well. This is not the GLC. The Waltham Forest Borough Council will operate Clause 30. The clause happens to be contained in the GLC Bill, but only because the London Boroughs Association asked the GLC to insert Clause 30. It is the borough councils' clause. Waltham Forest will apply Clause 30, not the Greater London Council.
Mr. McNair-Wilson: I do not wish to pursue the point too far. The clause reads,
"If on complaint by the proper officer a magistrates' court is satisfied".
We seem to be talking about the courts.
I should like to continue the point I was on, because there is strength in it. Who shall decide whether the stallholder's stall is up to the required standard? There is also the question of
"infestation of vermin or accumulation of refuse,"
all of which is said to be likely to be a hygiene risk.
Mr. Wellbeloved: The hon. Gentleman will see that in Clause 2 "proper officer" is defined as being the
"officer appointed by a borough council".
Therefore, the Waltham Forest Borough Council will determine whether to proceed under the provisions of the Bill, if enacted, or under the provisions of any Act already in existence. It will be within the power of the local authority, not the magistrates' court. It is the local authority's proper officer who will initiate the necessary steps.
Mr. McNair-Wilson: I am grateful to the hon. Gentleman for that intervention, but I am informed that there is a risk of double jeopardy. Hence my question to whoever is to wind up the debate: is there a double jeopardy? If so, it seems unreasonable.
My last point relates to vermin or refuse. I gather that most stalls are lit in the winter by either Tilley or paraffin oil lamps. One can imagine the amount of refuse that is left around a street market. I invite any hon. Member to visit Walthamstow High Street on any Friday or Saturday evening to see the enormous amount of waste paper that accumulates around the stalls. Obviously
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Tilley or paraffin oil lamps are high fire risks. Therefore, I suggest that the recommendation put forward by some of the stall holders, that electric points or some form of electric lighting should be supplied to avoid this risk, is worth consideration.
I come back to the point at which I started. There seems to be a real need to harmonise the regulations governing all street markets in Greater London.
9.37 p.m.
Mr. A. W. Stallard: I know that a number of my hon. Friends wish to participate in the debate even at this late hour, so I will be exceedingly brief.
I find much in the Bill that is commendable. I accept that many advances have been made. However I deplore the fact that we must use this device and time for the discussion which has proved so necessary by the contributions which have been made.
I have spent over 20 years in London government. On a number of occasions in the last two years I have been appalled at the apparent lack of knowledge of many Government spokesmen about conditions in London not only in housing, but generally.
I do not think that hon. Members generally appreciate the utter mismanagement of GLC property that has gone on in the past few years. The appalling conditions in which some GLC tenants have been forced to live during the past three or four years must be seen to be believed. These conditions have arisen because the GLC has run down its maintenance staff or has dismissed what was a very good direct labour force. This will create many difficulties unless it is stopped. The Bill does not mention that kind of management or anything like it.
Mr. Ronald Brown: My hon. Friend will probably be seized of the point that whilst the GLC has allowed the condition of its properties to deteriorate it has not been slow to put up to £5 a week the rent for a two-bedroomed flat, only one room of which can be used because the rest is so damp.
Mr. Stallard: My hon. Friend has anticipated what I was about to say regarding the rents charged for miserable hovels which go under the name of GLC

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accommodation. I could enlarge on many matters, particularly the complete mismanagement—I could use stronger language—of many GLC estates and properties in inner London.
Like my hon. Friends, at my weekly advice service I am constantly confronted by constitutents who have tried for the last two or three years to get a minor repair done. After a while, these become major necessities, and still nothing is done. The state in which some of our people have to live in alleged G.L.C. flats, at fantastic rents, is a scandal and should be stopped.
There are some things in the Bill that I welcome, particulary Clause 23. My only reservation is that it should be extended. In inner London we are worried not only about the change from residential to tourist or hotel accommodation but also about the complete loss of rented accommodation, furnished and unfurnished. Hon. Members will know that I have been worried for a long time about the antics of speculators in London in this respect. It is very lucrative to empty properties with speculation in view. I could go on for the next two or three hours about the way in which properties are being emptied in London by professional "winklers", as they are called, so that the vacant property can be developed into hotel or similar accommodation or into furnished accommodation.
This is becoming a major problem in London, and this is why my hon. Friend the Member for Shoreditch and Finsbury (Mr. Ronald Brown) mentioned the difficulty of teachers, for instance. I did a small survey this week at one school, asking some of the teachers who had been to see me about the London allowance what kind of accommodation they had. One of the complaints of these young teachers is that they can no longer find accommodation in inner London. This of course, causing our education service in London many headaches, and it will get worse as time goes on.
As a result of my survey, I learned that in cases where these youngsters have been able to find anything at all it is usually some tatty room with a couple of sticks called furniture, for an average of £10 a week. I am prepared to give details of the teachers whom I consulted and their rents, and so on. It
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is an impossible situation, and only gives more credence to the claim, not just for the London allowance for teachers but for far better wages and conditions to attract teachers into the inner London area, rather than creating the conditions in which they have to live.
I would have hoped that this provision could go further than just ending the change of use from residential to hotel. I should like completely to stop the change from residential. Perfectly good residential accommodation, above shops in the older-established shopping areas, is now being turned into offices, warehouses and stores. Gradually, what results is a dead area with shops and nothing above them. I would have liked to see this provision go further and prevent the change of any residential accommodation, particularly when it is rented, furnished or unfurnished.
I would certainly welcome some of the things which have been mentioned. The hon. Member for Walthamstow, East (Mr. Michael McNair-Wilson) mentioned something else which is long overdue—an attempt, under Clause 30, to control the conditions of some of the filthy stalls that we see, particularly in the West End. Probably the constituency of the hon. Member for the Cities of London and Westminster (Mr. Tugendhat) suffers most from this kind of thing. Having lived near his constituency for many years, I have often felt that something should be done in that regard and I am glad that a start has now been made to try to clean up some of these repulsive things which go under the name of stalls or food premises.
I welcome many of these provisions, but I would have liked them extended. I conclude by hoping that the sponsor of the Bill will agree with me on two counts—first, that the GLC has failed miserably in its complete and utter mismanagement of many of the estates in inner London, and, second, that the change of use of residential accommodation to hotel accommodation should be extended to include any change of use.
9.45 p.m.
Mr. Clinton Davis: Like many of my hon. Friends, I welcome some of the points made in the Bill. The Bill is rather like the Budget in a way. While it has some good points, its

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thinking is monumentally irrelevant to the problems facing London at present, in just the same way as the Budget today was monumentally irrelevant to the problems facing the country. The Bill lacks a coherent philosophy, an urgency and a comprehension of these problems.
I should like to make one point at the very beginning of my remarks. I gave notice of this matter to the hon. Member for Sutton and Cheam (Mr. Tope) when he deigned to come into the Chamber for a few moments during this debate on London. It is rather noticeable that although the Liberal Party today espouses the cause of community politics, it espouses that cause everywhere but in this place. I am told that the hon. Member for Sutton and Cheam is his party's spokesman on housing. If I am speaking behind his back, that is not my fault. As a spokesman on housing, he has shown remarkable reticence about opening his mouth on the vital issue of housing in London. We have had debate after debate on housing, on rates and now on the Greater London Council. The hon. Member is elsewhere. One would have thought that Sutton and Cheam had suddenly declared UDI from the GLC. But it may be only the hon. Member for Sutton and Cheam who has declared UDI. However, it is a sad commentary on the Liberal Party, which makes a spurious claim to identify with the people yet is absent when the issues are being debated. I make no more point about that. It is not worth wasting any more time on the Liberal Party.
I refer next to something which troubles me enormously. I have given notice of this point to the hon. Member for Cities of London and Westminster (Mr. Tugendhat). This concerns Clause 12 and the powers of arrest which are to be conferred on
"Any constable or any officer or servant of the Council authorised in writing to enforce any byelaws made by the Council under section 6 … and any person called to the assistance of such constable, officer or servant may without other warrant than this Act seize and detain any person committing or having committed any offence against any of such byelaws …"
That is a gross interference with the liberty of the subject. It extends to virtually any servant of the Greater London Council. It extends, perhaps, to a foreman on a site who is authorised in writ-
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ing under this clause to have afforded to him the powers of a constable, the power of arrest without warrant. I understand that the GLC employs Securicor. This power would be conferred upon members of the staff of Securicor. My hon. Friend the Member for Woolwich, West (Mr. Hamling) and I have spoken previously about Securicor. The clause would confer upon employees of Securicor this wide power of arrest without warrant.
Mr. William Shelton: Does the hon. Gentleman have any experience of such a power ever having being used?
Mr. Davis: If there is no evidence of the power having been used, there is simply no point in this power being invoked, as a number of my hon. Friends have said. I challenge the hon. Gentleman to indicate why this power should be included in the Bill if it is not to be used. I am told that it is based on virtually the same phraseology as the Thames River Steamboat Service Act 1904. The point about civil liberties may well have been overlooked in the debate, such as it was, which took place in 1904. I have done no research into that.
Mr. Tugendhat: The hon. Member was kind enough to give me notice that he was to raise this matter and we discussed earlier the implications of the Thames River Steamboat Service Act 1904, and the clause is based upon that. There are three points arising from the hon. Member's comments. First, the 1904 Act is still in operation as it applies to Greenwich Pier. Now that the GLC is acquiring more piers and is going into steamboat services it is an extension of the existing power rather than a new power. Secondly, though it is true that the officers of the council would have these powers in these circumstances it is important to realise that they can be applied only against persons, whose name or residence is unknown and cannot concurrently be ascertained. The officer of the council would have to take the malefactor to a police station or before a justice of the peace to be dealt with according to law.
The purpose of this provision is to meet those occasions which might arise on a boat on the river where rowdyism is taking place, where the GLC official attempts to bring it under control and is told to "get lost". This would enable

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him to bring the malefactors before a justice of the peace or a policeman, and the fact that nothing could be done without a policeman or a justice of the peace is a safeguard.
This matter has, of course, been looked at by the Home Office without objection, and no doubt after the hon. Member's interjection the Committee which will look into the Bill, if the Bill gets a Second Reading, will pay particular attention to the point he raised.
Mr. Davis: Having listened to the hon. Member's wind-up speech by way of intervention, I am grateful to him for his observation but I suggest to him that what ought to "get lost" is this part of the Bill.
Mr. Ronald Brown: And the GLC with it.
Mr. Davis: To base it on the Steamboat Act of 1904 seems to me an unwise precedent. I do not think that the House will be convinced by the hon. Member and I do not think—I have a great deal of admiration for him—that he is convinced about it himself. The Bill will confer upon people who are not in uniform a very wide power of arrest and I do not think it should have any place in this sort of legislation.
I go on to one aspect of transport to which I have wanted to refer for some time. We are told that it is a little uncertain how Hackney will be affected by the motorway box, but my constituency will be affected by it. Many of my constituents already have been adversely affected by developments of that kind. There was the Eastway route which caused people to come to my surgery Friday after Friday and to write letters because they were in a state of acute distress through having to face up to the difficulties of noise nuisance and pollution, difficulties they still face, not for a matter of a few hours, but day after day and night after night. The problem has existed for about four years. Those who felt that the structure of their houses was being affected were constantly told by the GLC that this was nonsense. When they saw cracks appearing in the walls the GLC would say, "Absolute nonsense."
The tenants will not be assisted, as I understand it, by the Land Compensation
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Bill, but they are as adversely affected as the owner-occupiers. They were at the periphery of the development and they had to cope with all the horrendous pressures that were involved. These difficulties will be multiplied throughout many areas of London, and the lessons are clear. I am glad that the Labour Party in London has declared unequivocally that it will have none of it.
I turn next to housing. We have had an appalling history of lack of consultation between Hampshire and the GLC and it is no fault of Hampshire at all. That insensitivity, that lack of co-operation, is reflected in so many other aspects of the behaviour of the GLC towards the London boroughs.
One of the matters that have been referred to by my hon. Friend the Member for Willesden, East (Mr. Freeson), about which the GLC ought perhaps not necessarily to consult so much but to do something practical, is the policy of the Tory outer London boroughs to refuse to co-operate in the provision of land for inner London. We have heard about the so-called agreement—a scandalous agreement—made between the GLC and Bromley. Where does the Minister stand on this? Presumably he approves. His silence would certainly indicate that he does not dissent from what has happened.
Mr. Eyre: I must ask the hon. Member to be careful in the allegations he makes. He will know that very considerable efforts have been made by the London Housing Action Group, which includes very experienced aldermen and councillors from both the major parties in London, to assess the situation and to encourage from all the boroughs in London the maximum contribution towards the very serious housing problems we know exist.
Mr. Davis: I like the hon. Gentleman so much. He has so many qualities. After all, he, like me, is a solicitor—
Mr. William Hamling: Brothers in crime!
Mr. Davis: But I am afraid that bromide will not do, because the London Housing Action Group has not produced an acre of housing in London. It is full of very good intentions, but it is urgent action that needs to be taken now.

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Indeed, information was provided by London borough councils and outer London borough councils that 12,000 acres of land would be available by 1980 which would house thousands of people in the stress areas, but the Government are sitting idly back. If the Government were to move in and, as they should, demand that the outer London boroughs act and make land available now, a great many votes for the Conservative Party would be lost in the forthcoming GLC elections. The outer London boroughs do not want people from my area or that of my hon. Friend the Member for Shoreditch and Finsbury (Mr. Ronald Brown) or of my hon. Friend the Member for Acton (Mr. Spearing) or from the stress areas of Hammersmith and Kensington to move into these areas because they feel it would blight these areas and reduce values. One hears about this every time one argues the point with Conservatives in such areas.
Question accordingly negatived.
It being after Ten o'clock, the debate stood adjourned
This matter goes to the very heart of our problems. In Hackney we cannot resolve our housing problems without aid from outer London. If the Government merely say, "Let us wait for another six months or another year until the Action Group has reported and then we shall consider the report", let me tell the Minister that for every day that passes while this occurs, people continue to live in appallingly tragic conditions, where delay cannot be brooked any longer. This is the criticism I make not only of him, and of his Department, but in particular of the Government as a whole. There is no urgency because there is no will. If there were the will, action would be taken.
Mr. Tugendhat rose in his place and claimed to move, That the Question be now put.
Question put, That the Question be now put:—
The House divided: Ayes 35 Noes 49.

Division No. 78.]

AYES

[10.0 p.m.

Burden, F. A.

Jessel, Toby

Shelton, William (Clapham)

Chapman, Sydney

Jopling, Michael

Shersby, Michael

Clark, William (Surrey, E.)

Knox, David

Stanbrook, Ivor

Clarke, Kenneth (Rushcliffe)

Lamont, Norman

Taylor, Robert (Croydon, N.W.)

Cormack, Patrick

Lane, David

Tebbit, Norman

Crouch, David

Loveridge, John

Temple, John M.

Eyre, Reginald

McNair-Wilson, Michael

Thompson, Sir Richard (Croydon, S.)

Fidler, Michael

Maddan, Martin

Ward, Dame Irene

Fookes, Miss Janet

Murton, Oscar

Weatherill, Bernard

Gray, Hamish

Page, Rt. Hn. Graham (Crosby)

Gurden, Harold

Price, David (Eastleigh)

TELLERS FOR THE AYES:

Havers, Michael

Russell, Sir Ronald

Mr. Christopher Tugendhat and

Hunt, John

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

Mr. Barney Hayhoe.

NOES

Blenkinsop, Arthur

Hunter, Adam

Smith, Cyril (Rochdale)

Boardman, H. (I.eigh)

Jones, Dan (Burnley)

Spearing, Nigel

Brown, Ronald (Shoreditch & F'bury)

Lamond, James

Spriggs, Leslie

Buchan, Norman

Lawson, George

Stallard, A. W.

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

Lestor, Miss Joan

Steel, David

Davis, Clinton (Hackney, C.)

McBride, Neil

Stewart, Rt. Hn. Michael (Fulham)

Davis, Terry (Bromsgrove)

Mackenzie, Gregor

Thomas, Jeffrey (Abertillery)

Douglas, Dick (Stirlingshire, E.)

McNamara, J. Kevin

Urwin. T. W.

Duffy, A. E. P.

Mikardo, Ian

Wainwright, Edwin

Eadie, Alex

Millan, Bruce

Walker, Harold (Doncaster)

Edwards, Robert (Bilston)

Morgan, Elystan (Cardiganshire)

Wells, William (Walsall, N.)

Ewing, Harry

Morris, Charles R. (Openshaw)

Whitehead, Phillip

Fernyhough, Rt. Hn. E.

Prescott, John

Woof, Robert

Fletcher, Ted (Darlington)

Rees, Merlyn (Leeds, S.)

Garrett, W. E.

Robertson, John (Paisley)

TELLERS FOR THE NOES:

Griffiths, Eddie (Brightside)

Roderick, Caerwyn E.(Brc'n&R'dnor)

Mr. James Wellbeloved and

Hamilton, William (Fife, W.)

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

Mr. William Hamling.

Hooson, Emlyn

Small, William

Debate to be resumed upon Thursday next.

GREATER LONDON COUNCIL (GENERAL POWERS) BILL (By Order)
  ADJOURNMENT
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Gray.]

DANGEROUS SUBSTANCES (CARRIAGE BY ROAD)
10.9 p.m.
Mr. Robert Edwards: I am grateful for this opportunity to discuss an issue of great importance, It deals with the movement of chemicals and toxic materials on the roads. The genesis of the debate was an incident last year in my constituency, when a wave of poison gas swept through a residential area and withered and destroyed little gardens and vegetation. It came from a steelworks, where the workers were disposing of drums fed by road to the works from a chemical firm. The drums contained liquid chlorine. The workers disposing of them had no knowledge of the contents, and as they burnt a hole in a drum a poisonous cloud swept the area. Many of my constituents suffered greatly from breathing trouble, and a passer-by collapsed and was taken to hospital.
No one on the spot knew how to handle this hazard and the poison gas continued to flow from the drum for two hours, until a group of specialists from ICI in Runcorn, many miles away, arrived to plug the hole. I attach no blame to the chemical firm concerned. With refreshing honesty, it admitted the mistake. It was a human mistake. Within two hours it had sent a team of competent emergency safety men. It offered compensation, and so far I have had no complaints from any of my constituents that they were not satisfied.
But my point is that the situation could have been much more serious than it was. It was a rather dramatic incident, but almost every day we read of road accidents involving the spilling of toxic materials, chemicals and liquids, to the great danger of the community and the men who drive the transport vehicles concerned.
On the borders of my constituency, a few years ago, a lorry-load of chemicals leaked and finally exploded, injuring 17 people and damaging 40 houses. Only a
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few months ago a dreadful accident took place on the M6. A poor woman was literally dissolved in acid. One can barely imagine the agony of that woman and her family. The accident arose out of a collision, when sulphuric acid spilled out over the road. Only a few weeks ago an accident took place on the border of Belgium and France, when several people were killed and 100 houses shattered by the explosion of a great tanker after a collision.
Mr. John Loveridge: Has the hon. Gentleman considered the severity of the danger and the damage that might arise if a lorry carrying nuclear waste were to be hit and release its horrors upon us?
Mr. Edwards: We have an Act of Parliament and regulations dealing with the movement of radioactive material. The workers responsible for its transport are specially trained. They have special protective clothing. They are not allowed to touch the material when there is an accident. There is 24-hour monitoring. I want a similar Act of Parliament and regulations to protect the community and drivers from chemicals and toxic materials.
I have studied all of our Acts and regulations, including the one which I have mentioned. I cannot find anything in them laying down a standard for the men who move dangerous chemical and toxic materials. There is no standard training. It is left entirely to the firms concerned. I was so interested in this subject that I commissioned the Aston University of Birmingham to do a survey on the problem. Some of the information collected on my behalf is most interesting.
I discovered from the inquiries made among a cross-section of drivers—members of my own union, the Transport and General Workers Union—that 25 per cent. of those moving chemicals and toxic materials on the roads had no training whatever in the handling of these products in the event of an accident. Among contractors I discovered that 39 per cent. of the drivers had no training at all. It is scandalous that no compulsion is involved in the training of the men handling these products. I can not find in any of our Acts or regulations any protection for drivers. They do not even

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mention it. Only when the whole community is in danger do we begin to think in terms of the danger to these workers.
I do not want to make these general statements without pointing out that some of our best firms, such as ICI, BP, Distillers and Allbright and Wilsons, have a very efficient srevice. They monitor the movement of their products 24 hours a day. They have trained safety squads ready to move in when there are dangers. Many of the contracting firms are not capable of handling the dangers that might arise for the community in an emergency. We need new legislation. At the moment this problem is under the control of four Government Departments. Surely we need one Department handling the new problem that faces the community as a result of the dangers arising from the development of new products almost every month of the year. We do not know the full extent of the danger of these products because some have never seen the light of day before.
In our discussions we discovered that the drivers had some very constructive suggestions to make. Not all were discontented. Many praised their firms and said they did not know what more could be done. Here are a few quick points from the replies to interviews and questionnaires. The drivers say that most vehicles are not adequate for the job. They are not strong enough. The noise and vibration in the cab should be cut down. They do not even have time to think. They say that continental vehicles are much quieter than ours. They also say that first-aid kits must be carried in all vehicles. They suggest that such lorries should have lights all round the back end, as the continental vehicles have. There should be a tightening up within the companies who contract transport to ensure that these drivers know what they are carrying, and that they are trained. There should be courses on safety and health. All these points come from the men concerned. They say that car drivers need to be more aware of what is involved in the driving of tankers and what they carry. It may be that larger labels or notices are required on the wagons. All chemical drivers should be medically examined on a regular basis, and so on.
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I could give many more examples. I have mentioned these to show that drivers want to co-operate in finding a constructive solution to the problem. Many firms are supposed to supply what are called "transport emergency cards". Anybody who grumbles about a driver earning £50 a week who reads what a driver needs to do in an emergency would have second thoughts. In an emergency the driver should notify the police and fire brigade immediately, stop the engine, mark the road, warn other road users, keep the public away from the danger area, keep off the wind, put on protective clothing, in case of spillage contain liquids with sand and earth, avoid absorbing injurious substances, refrain from using a water jet on a leak in a tank, and, if a substance has entered water courses or sewers, or contaminated streams, advise the police, keep containers cool by spraying with water, and so on.
That is what these men are supposed to do in case of emergency. These are very important instructions, which are difficult to comply with. Nevertheless, they give information. But what do we find on inquiry? Taking a representative section of drivers, of those for manufacturing companies only 25 per cent. use these cards, and of contracting companies only 22 per cent. use them. Is it not time that this transport emergency card was made compulsory? This should be written into new legislation, so that at least a driver knows what he is handling. Every material that is being handled should be clearly defined. With information of this kind in his cap a driver should know how to deal with an emergency. I have touched only on the fringe of this important subject.
Only a few days ago I read a report based on what is happening in South Wales, where 18 chemicals had been found dumped in farmland and three poisonous chemicals had seeped into rivers and waterways. There must be control over the handling of waste materials. It should be monitored. In order to safeguard the community local authorities should be alerted and should know what is being dumped in their areas. There must be compulsory training and medical examinations for drivers, and a proper monitoring system 24 hours a day. If this is not done, I tremble to think of the terrible accidents that may take place in some congested area, which

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will cause the community and the nation to wake up to the danger of a catastrophe that we have avoided so far.
10.25 p.m.
The Under-Secretary of State for the Home Department (Mr. David Lane): I am grateful, as I know the House will be, to the hon. Member for Bilston (Mr. Robert Edwards) for raising this subject tonight. The hon. Member has special experience, gained over the years, of dangerous chemicals. It is an exceedingly important and exceedingly urgent matter, and I am glad that the hon. Member has spoken so frankly. Towards the end of January we had a broadly similar debate, initiated by my hon. Friend the Member for Bristol, West (Mr. Robert Cooke). The fact that we have discussed this problem twice on the Adjournment within six weeks is a measure of its importance.
I am extremely sorry that the constituents of the hon. Member for Bilston suffered in the way they did from the accident he described. I acknowledge the fair comment he made on the chemical company concerned on that occasion.
The hon. Gentleman underlined the danger to the men who drive these lorries. We read of terrible tragedies when men are trapped in their cabs in ordinary accidents. How much more ghastly is an accident to a vehicle carrying one of the substances that the hon. Gentleman mentioned. I hope to persuade him that much of what he wants to be done is either already being done or soon will be done by regulations we have in mind. The accident he mentioned involved organic peroxide. We are to bring organic peroxides within our control in the near future.
The hon. Gentleman spoke of the importance of training drivers in emergency procedures. That is more for the Department of the Environment than for the Home Office, and I will draw the attention of the Department to what the hon. Member has said. He complained that responsibilities within Government are diffused. However much we might like a tidier solution, inevitably more than one Government Department is involved. I assure the hon. Gentleman that I will draw to the attention of my colleagues in the Department of the Environment the wider problems he mentioned at the end of his speech. My colleagues and I are
376
working closely together, through sitting on committees and through regular consultation at working level.
I remind the hon. Gentleman of the Robens Committee's recommendations which the Government have already accepted in principle. We shall soon be bringing forward further proposals for implementing the Robens recommendations in the direction of an across-the-board control which I am sure he will welcome, not least because of the extra safeguards this will bring to workers, wherever they may be, who have to handle dangerous substances either when they are static or in transit.
We are rightly and increasingly alarmed about the dangers which have been referred to. It is estimated that the number of dangerous substances of an inflammable, corrosive or toxic nature that are regularly being carried by road in this country is over 1,000. Some of them are very dangerous indeed, particularly if there is a fire or if they are spilt after an accident.
To put the matter into perspective, we already have regulations applying to more than 300 of these substances and to those which constitute the bulk in weight of the tonnage we are talking about. In the case of the substances that are already brought under control, we require notification of any accident involving death or personal injury from the substances concerned. During the last five years 15 such accidents have been notified, involving 35 injuries of which, alas, nine were fatal.
We acknowledge the need for more and better controls over the conveyance of these substances, and since 1965 the Government of the day have been working on a systematic plan to introduce and carry out a comprehensive scheme of regulations under the general guidance of my right hon. Friend's Standing Advisory Committee on Dangerous Substances. The existing controls, which are based on the Explosives Act 1875 and the Petroleum Consolidation Act 1928, have been introduced as a result of a system of priorities which has been drawn up by the advisory committee. As a result of its work, the first regulations were introduced in 1968 and they applied certain basic safety requirements and labelling controls to vehicles and packages used for the conveyance of inflammable

377
liquids. Three years later, in 1971, these were followed by a similar range of requirements for corrosive substances. That is the present position.
Looking to the future, later this year we propose to impose similar controls over organic peroxides such as those in the accident which the hon. Gentleman mentioned. Draft regulations have been prepared. We are circulating them within a few weeks to everyone concerned with the conveyance of these substances by road. We attach great importance to these consultations to make sure that we get the regulations right. We are also preparing regulations which will expand the existing controls over inflammable liquids and corrosive substances by laying down requirements about the construction and operation of the vehicles used to convey them. These construction and operation regulations also should be made before the end of this year, and I assure the hon. Gentleman that they will take full account of the accident on the M6 to which he referred.
The next priorities after that will be to extend the construction and operational controls to organic peroxides, and then to extend the whole range of controls over dissolved, liquefied and compressed gases and toxic substances. Here, I hope that we can draw lessons from the accident in France to which the hon. Gentleman referred. We believe that those are the major hazards.
Later again we want to extend controls to substances which give off inflammable gases on contact with water, to spontaneously combustible substances, inflammable solids and oxydising substances. Each of these classes includes certain potentially very dangerous substances, but in general we believe that they represent a lesser degree of risk, and they are not carried in the same quantity as the substances with which we are dealing earlier in the programme.
The labelling regulations provide that packages above a certain size containing the substance liable to control must be marked with the name of the substance and with a label showing the nature of the hazard. Similarly, the regulations which we shall be introducing about construction and operation are intended to ensure that all vehicles are fitted with
378
suitable engines, exhaust and electrical equipment, and that tank vehicles and their fittings provide an adequate degree of safety. All these requirements will surely help to increase the safety of drivers, for example, by laying down the strength of tank shells, the cabin separation distances, the stability of vehicles, and matters of that kind.
So much for the general range of the regulations and the programme which we are carrying through as urgently as we can. However, there are two other matters about which I wish to tell the hon. Gentleman. The "Tremcard" scheme was referred to by the hon. Gentleman as being very important. I share his hope that it will be pressed ahead with quickly. My latest information is that in the scheme, which is sponsored by the Chemical Industries Association, 100 Tremcards have been issued already and a further 100 are with the printers and should be available for distribution in May—and it is hoped that a third batch of 100 cards will be issued before the end of the year. I am sure that all the companies concerned will take note of what the hon. Gentleman said near the end of his speech.
The other safeguard, in addition to the statutory regulations, is round-the-clock advice. We have given guidance from the Home Office, and we shall go on giving it, to the emergency services about the steps needed to control fires or spillages involving dangerous substances. This kind of advice is constantly changing, because new substances are constantly being evolved. We need some facility for the emergency services to be able to get advice at short notice about any particular substance. I acknowledge the help that we are already receiving from some of the major chemical companies which provide a round-the-clock advisory service for incidents involving their products.
We have asked the Chemical Industries Association to consider whether arrangements could be made to provide the emergency services with advice of this kind on a nationwide basis. The association has set up a working party to consider the feasibility of such an arrangement and that working party is expected to report in the summer. We shall eagerly look forward to what it says.

379
Another point that I should mention, though it is more the responsibility of my right hon. Friend the Secretary of State for the Environment, concerns the suggestions that have been made about route control. My right hon. Friend the Minister for Transport Industries is approaching firms engaged in conveying dangerous substances to establish the routes customarily taken by their vehicles so that he can consider whether more might be done, through the imposition of voluntary controls or otherwise, to ensure that routes are adopted for this traffic which will reduce the prospect of accidents and will give rise to the least danger to the public in the event of such accidents occurring. In all this we have in mind the twin duties, which surely we all feel, to the workers concerned and to the public.
Whatever may be done to convey more of these substances by rail—many hon. Members want this to happen—we must assume that a large and increasing volume of this traffic will still travel by road. On the whole, despite the tragic accidents of which we know, the industry's record is good. In the absence, so far, of extremely wide-ranging controls, this is a tribute to the responsibility of the firms and drivers involved.
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I very much hope that the increasing degree of control which I have sketched to the House, which we shall be introducing steadily during the months and years ahead, will do more than offset any likely increase in the volume of this road traffic. This greater safety can come about only if, recognising the dangers of these substances, other road users exercise the greatest care when they are in the neighbourhood of such loads. If that is to be achieved, surely the first need is for all members of the public—hon. Members can do a great deal to help in this respect in their constituencies—to be more conscious than they now are of the significance of the various warning notices that these vehicles carry. When the new marking controls come into operation the Government propose to bring them more widely to public notice than has been the practice hitherto.
I am grateful to the hon. Gentleman for raising this matter. I hope that he feels, from this quick sketch, that we are tackling the problem urgently. We certainly intend to go on doing so, for the greater safety of both the workers and the public.
Question put and agreed to.
Adjourned accordingly at twenty-two minutes to Eleven o'clock.

SOCIAL SERVICES
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  Physiotherapists and Remedial Gymnasts (East Riding)
  Physiotherapists and Remedial Gymnasts (East Riding)
  Departmental Staff (Earnings)
  Departmental Staff (Earnings)
  Hospital Staff (Earnings)
  Hospital Staff (Earnings)
  Family Planning
  Family Planning
  Euthanasia
  Euthanasia
EDUCATION AND SCIENCE
  Visually-Handicapped Persons (Vernon Report)
  Visually-Handicapped Persons (Vernon Report)
  London Allowance
  London Allowance
  Schools of Architecture
  Schools of Architecture
  Nursery Education (Bedfordshire)
  Nursery Education (Bedfordshire)
  Polytechnic Students
  Polytechnic Students
  Art Colleges (Part-time Staffs)
  Art Colleges (Part-time Staffs)
  Teachers (London)
  Teachers (London)
  Partmental Staff (Earnings)
  Partmental Staff (Earnings)
SCOTLAND
  Hypothermia
  Hypothermia
  Firearms Licences
  Firearms Licences
  Departmental Staff (Earnings)
  Departmental Staff (Earnings)
  Lay Summary Courts
  Lay Summary Courts
  Rates
  Rates
  VIETNAM
  VIETNAM
  CIVIL SERVICE
  CIVIL SERVICE
  BELFAST
  BELFAST
  DEPARTMENTAL STAFF (EARNINGS)
  DEPARTMENTAL STAFF (EARNINGS)
AGRICULTURE, FISHERIES AND FOOD
  Livestock Rustling
  Livestock Rustling
  Eggs (Exports to EEC Countries)
  Eggs (Exports to EEC Countries)
  British Sugar Corporation
  British Sugar Corporation
  Cheese
  Cheese
  Meat Consumption
  Meat Consumption
  Food Prices
  Food Prices
  European Economic Community (Agricultural Review)
  European Economic Community (Agricultural Review)
  Departmental Staff (Earnings)
  Departmental Staff (Earnings)
CIVIL SERVICE
  Departmental Staff (Earnings)
  Departmental Staff (Earnings)
DEFENCE
  Land (Nugent Committee)
  Land (Nugent Committee)
  Portsmouth Harbour (Car Ferry)
  Portsmouth Harbour (Car Ferry)
  Departmental Staff (Earnings)
  Departmental Staff (Earnings)
ENVIRONMENT
  Rates
  Rates
  Caravans
  Caravans
  Operation Eyesore
  Operation Eyesore
  Pedestrian Crossings
  Pedestrian Crossings
  Motor Vehicle Insurance (European Countries)
  Motor Vehicle Insurance (European Countries)
  Rossendale
  Rossendale
  Whitehall Buildings (Cleaning)
  Whitehall Buildings (Cleaning)
  Parliament Square
  Parliament Square
  Passenger Transport Vehicles
  Passenger Transport Vehicles
  Local Government Expenditure
  Local Government Expenditure
  Departmental Staff (Earnings)
  Departmental Staff (Earnings)
  Commonwealth Games
  Commonwealth Games
  Liverpool (Cargo Handling)
  Liverpool (Cargo Handling)
FOREIGN AND COMMONWEALTH AFFAIRS
  Overseas Staff (Children's Holiday Visits)
  Overseas Staff (Children's Holiday Visits)
  Departmental Staff (Earnings)
  Departmental Staff (Earnings)
HOME DEPARTMENT
  Pornography (Licensing of Shops)
  Pornography (Licensing of Shops)
  Borstal Institutions
  Borstal Institutions
  Police Stations (London)
  Police Stations (London)
  Prisons (London)
  Prisons (London)
  Departmental Staff (Earnings)
  Departmental Staff (Earnings)
  Remand Centres (County of Holland)
  Remand Centres (County of Holland)
NORTHERN IRELAND
  Building Regulations (Coal Storage)
  Building Regulations (Coal Storage)
  Royal Ulster Constabulary
  Royal Ulster Constabulary
  Police Families (Protection)
  Police Families (Protection)
  Crimes of Violence
  Crimes of Violence
  Church Buildings (Damage)
  Church Buildings (Damage)
  Ulster Museum (Admission Charges)
  Ulster Museum (Admission Charges)
  Departmental Staff (Earnings)
  Departmental Staff (Earnings)
  Casement Park (Army Occupation)
  Casement Park (Army Occupation)
NATIONAL FINANCE
  Joint Stock Banks (Facilities)
  Joint Stock Banks (Facilities)
  Departmental Staff (Earnings)
  Departmental Staff (Earnings)
  Value Added Tax
  Value Added Tax
POSTS AND TELECOMMUNICATIONS
  Departmental Staff (Earnings)
  Departmental Staff (Earnings)
TRADE AND INDUSTRY
  Mopeds (Sales)
  Mopeds (Sales)
  Scrap Metals (Export)
  Scrap Metals (Export)
  United States of America (British Investment)
  United States of America (British Investment)
  Nationalised Industries (Plant and Equipment)
  Nationalised Industries (Plant and Equipment)
  Supermarkets
  Supermarkets
  Factories (Rossendale)
  Factories (Rossendale)
  Departmental Staff (Earnings)
  Departmental Staff (Earnings)
WALES
  Baglan (Pedestrian Bridges)
  Baglan (Pedestrian Bridges)
  Departmental Staff (Earnings)
  Departmental Staff (Earnings)
EMPLOYMENT
  Productivity
  Productivity
  Noise Control
  Noise Control
  Apprenticeships
  Apprenticeships
  Training
  Training
  London
  London
  Departmental Staff (Earnings)
  Departmental Staff (Earnings)
  Activity Rates (Wales)
  Activity Rates (Wales)
  Rossendale
  Rossendale
  Earnings (Increases)
  Earnings (Increases)
  Electricity Supply Industry Training Board
  Electricity Supply Industry Training Board
  Scotland
  Scotland
  Vacancies
  Vacancies

Preamble
The House met at half past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Gloucester.

COMPTROLLER AND AUDITOR GENERAL
LORD BALOGH: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they would consider setting up machinery to avoid the possibility of the Comptroller and Auditor General having to act in matters for which he bears responsibility as accounting officer of a Department.
THE LORD PRIVY SEAL (EARL JELLICOE): My Lords, the Comptroller and Auditor General is an independent statutory officer, appointed by the Crown and answerable only to Parliament. As such, he naturally bears no responsibility as the accounting officer of a Department other than in connection with the Exchequer and Audit Department.
LORD BALOGH: My Lords, I thank the noble Earl for his answer, which did not really cover my Question. Is it not important that steps should be taken to ensure that the independence of the Comptroller and Auditor General should be not merely there (I have no doubt it is there) but also seen to be there? If that officer has been in the service of Her Majesty, would it not be better not to appoint him, or to appoint someone else, on questions in which he bore responsibility as the accounting officer in years past?
EARL JELLICOE: My Lords, the noble Lord's Question is referring to the present time; his supplementary question, as I understand it, is referring to the past time. All I would say imme
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diately in reply is that I know of no case in which the independent judgment of the Comptroller and Auditor General has been impugned or has in any way been seen to be impugned. If there is a particular problem which the noble Lord has in mind, and he would like to write to me about it or discuss it with me, I should be very glad to entertain his representations.
LORD SHACKLETON: My Lords, I wonder whether the noble Earl would agree with my view that the Question could be interpreted as referring to "former accounting officer". Is the noble Earl aware that my noble friend was in no way impugning the position or the integrity of any occupant now or in the past? Does he also note that in fact there is a possibility of less generous-minded people attributing a bias when a matter comes before the Auditor General in regard to a Department in which he was formerly the accounting officer?
EARL JELLICOE: My Lords, I recognise that there could be a problem here, but I think we should be very careful about getting ourselves into a position in which it was thought wrong ever to appoint to this very important post someone who had been a Permanent Secretary in a Department. This would be excluding us from the possibility of appointing people with the sort of experience which I should have thought is required in this particular job.
LORD SHACKLETON: My Lords, I should not take my noble friend's Question off him, and I apologise to him; but is the noble Earl aware that my noble friend is not suggesting that ex-Permanent Secretaries should not be appointed, but merely that they should not act in those matters that relate to a Department in which they were formerly the accounting officer, and that someone else should carry the responsibility?
EARL JELLICOE: My Lords, I am not quite clear whether the noble Lord the Leader of the Opposition is necessarily the correct interpreter for his noble friend; he may be. But it seems to me that he is taking the Question rather off his noble friend.
LORD BALOGH: My Lords, would the noble Earl care to read my Question?
LORD SHACKLETON: My Lords, the noble Earl, Lord Jellicoe, does not answer my noble friend. He may realise why others have to join in in his support.
SEVERAL NOBLE LORDS: Hear, hear!
EARL JELLICOE: My Lords, noble Lords opposite say, "Hear, hear!", but I thought that they might do me the justice of acknowledging that, naturally, I read the noble Lord's Question before answering it.
LORD BALOGH: May I read the Question to the noble Earl?
SEVERAL NOBLE LORDS: No!
LORD BALOGH: It does not matter what you say—"To ask—"
SEVERAL NOBLE LORDS: Order!
EARL JELLICOE: My Lords, I am not intervening to answer the noble Lord's supplementary question, which I shall be very glad to do. I am intervening, as the Leader of your Lordships' House, to say that the supplementary question of the noble Lord, Lord Balogh, I think goes a little wide, when he says, "It does not matter what you say." That is not the normal way in which we address noble Lords anywhere in your Lordships' House. I would say that to the noble Lord or to any noble Lord opposite, as I would say it to any noble Lord sitting behind me.
LORD SLATER: My Lords, would the noble Earl—
EARL JELLICOE: My Lords, I am sorry, but I still have to answer a supplementary question from the noble Lord, Lord Balogh.
LORD BALOGH: My Lords, I merely wish to say that I did not impugn anybody. I wanted to ask the noble Earl what sort of machinery should be devised in order to avoid possible impugnment in future, and this I think the noble Earl has not answered.
EARL JELLICOE: My Lords, I should be very glad to look into this position. I really do not feel that, in practice, there is the problem which I think is worrying the noble Lord, Lord Balogh. But I should be very glad to look into the position and, if need be, to discuss it with
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him and, indeed, with any other noble Lord who is interested in the matter. I fully recognise that it does touch on an important point. I would say, most emphatically, that I am sure that the noble Lord, Lord Balogh, is barking up the wrong tree if he is in any way impugning the independence of any particular person.
LORD SHACKLETON: My Lords, if I may come back to the noble Earl, may I ask him to withdraw the statement that my noble friend is impugning anyone? He was at great pains not to do so and, in the general interest of good relations, perhaps the noble Earl would accept—for all of us heard this—that there was no suggestion of impugning an individual. My noble friend stressed the matter as one of appearance. We all accept that there is no criticism of any individual.
EARL JELLICOE: My Lords, I should be very glad to withdraw that suggestion if in fact I had made it, but it is not within my recollection that I did.

NORTH SEA OIL: BRITISH SHARE
2.43 p.m.
LORD BALOGH: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government on what basis the statement was made that the British share of the oil reserves in the British part of the North Sea was 58 per cent.; how many oilfields were included, and at what tonnage; how many further oilfields have already been proven, and whether Shell was considered as a totally British company.
THE MINISTER WITHOUT PORTFOLIO (LORD DRUMALBYN): My Lords, the figure of 58 per cent. applied to the British share of oil reserves in the fields so far proved, Forties, Auk, Brent and Argyll, counting Shell as 40 per cent. British. At least four other finds may prove commercial. Figures of reserves in individual fields are confidential. The current estimates of future oil production are now being reviewed, and the outcome of the review will be announced shortly.
LORD BALOGH: My Lords, would the noble Lord not agree that the statement such as has been made was really rather misleading?
LORD DRUMALBYN: My Lords, is the noble Lord suggesting that the statement I have just made is misleading? If so, would he care to say in what respect it is misleading?
LORD BALOGH: My Lords, I fear that perhaps I have to set myself up as a teacher of English grammar, which is a very unlikely job for me. I said "had been made"; not "had been made this minute" but "had been made in the distant past"—to wit, the original statement which I was asking to be cleared up.
LORD DRUMALBYN: My Lords, I hope that any efforts that have been made to clear up this matter have not been unsuccessful. I am not aware that any statement was misleading. I am grateful to the noble Lord for bringing into the open what has already been said to him in a letter.
THE EARL OF LAUDERDALE: My Lords, would my noble friend not agree that there are several kinds of reserves, notably "possible", "probable" and "proven", and that among proven reserves common experience is that not more than 15 per cent. are in fact recoverable?
LORD DRUMALBYN: My Lords, I think that perhaps 15 per cent. is putting it a little low. Thirty per cent., on the other hand, might be putting it rather high.
LORD BALOGH: My Lords, would not the noble Lord agree that it is misleading when one says (after we had a little misunderstanding about 21 per cent. and 12 per cent.) that the figure was 59 per cent., and it is also said that British interests have been protected but it then turns out that it is only four fields, and one bears in mind the composition of the respective consortia, which is not in the least usual?
LORD DRUMALBYN: My Lords, I do not think so. I think there has been a genuine confusion between an estimate based on the territories allotted and an estimate based on the resources proven. But there was never any confusion in my
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mind, and I am sure the noble Lord's mind is so clear that there is none in his.
THE EARL OF LAUDERDALE: My Lords, would my noble friend not agree that to use the term "oilfields" is to use a very general term for something which is variously interpreted? It could mean "basin", or it could mean a particular well. Is not this a common source of confusion?
LORD DRUMALBYN: Yes, my Lords; I think that may well be so. However, I am not sure that it arose in this case.

CULTURAL RELATIONS WITH CHINA
LORD SEGAL: 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 have been taken to develop cultural relations with the People's Republic of China since the exchange of Ambassadors with Peking; and what further intentions they have in mind on this subject.
THE MARQUESS OF LOTHIAN: My Lords, the Great Britain/China Committee was established last year to promote personal and professional exchanges with China in the cultural-scientific field. Exchanges in science, sport and culture will continue and a senior British Council officer will visit Peking in April.
LORD SEGAL: My Lords, I should like to thank the noble Marquess for that reply. Would he not agree that this is hardly enough in dealing with one-fourth of the world's total population? Could not the development of cultural relations, especially in the fields of science and medicine, be given a far higher priority and a much greater sense of urgency than appears to be the case at the present time?
THE MARQUESS OF LOTHIAN: My Lords, I entirely agree with the noble Lord that we want to step up the whole range of cultural exchanges with China, but considering that we have been in a position to do so for only the past 12

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months or so, things have been moving very fast. After all, the London Philharmonic Orchestra is going out to China this month, and an exhibition is being mounted over here in September—cultural pleasures which ought to be extremely interesting and effective. And of course, on the scientific and medical side, the noble Lord may well be aware that Sir George Godber, Chief Medical Officer at the Ministry of Health, is going to pay a visit to China in the next month. So I do not think there can be any doubt that things are moving.
LORD DAVIES OF LEEK: My Lords, is the noble Lord aware that probably all of us in this House and elsewhere in Britain were glad when in March, 1972, we recognised full diplomatic status when our excellent Ambassador there, John Addis, signed with Chiao Kuan Hua, the Chinese deputy Foreign Secretary, the note of understanding? In consequence of China's being in the main stream of life, as historically she always has been, does not the noble Marquess think that it might be an excellent exercise for the Minister of Education to encourage an exchange of schoolchildren? We can eradicate the propaganda from both sides. Would not a committee to study this problem of schoolchildren exchanges be valuable?—for the future is theirs, whatever nationality they may bear.
THE MARQUESS OF LOTHIAN: My Lords, I think that is a most interesting suggestion, and I will certainly pass it on to my right honourable friend.
BARONESS SUMMERSKILL: My Lords, having had the opportunity of visiting China and seeing many of the health services there, may I ask the noble Marquess whether he would have it in his mind as a possibility to see whether delegations of Chinese doctors might be invited to this country? I believe the noble Marquess and his colleagues would be very much surprised to know how many of these doctors qualified here in the early 1920s and are still alive.
THE MARQUESS OF LOTHIAN: My Lords, it would certainly be interesting to do as the noble Baroness suggests, and I will bring the suggestion to the attention of my noble friend, who is sitting beside me. I believe he will be able to
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confirm that we are proposing to send over specialists from this country to China.
LORD O'NEILL OF THE MAINE: My Lords, may I ask whether the Minister is aware that as long as the Chinese go on paying for their purchases of British aircraft in cash, cultural interests will improve at a very rapid rate?
THE MARQUESS OF LOTHIAN: My Lords, I am obliged to my noble friend.
LORD SHEPHERD: My Lords, I hope they will not be the Harrier.
LORD SEGAL: My Lords, may I ask the noble Marquess whether, in addition to the arrangements being made through the British Council further arrangements could not be made direct with some of our British universities to invite scholars and research workers to come to this country, which would be to our mutual advantage?
THE MARQUESS OF LOTHIAN: My Lords, this probably could be arranged and I will undertake to make representations in this regard.

VIETNAM: INTERNATIONAL CONFERENCE ON PARIS AGREEMENT
2.52 p.m.
LORD BROCKWAY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what conclusions were reached at the International Conference on Vietnam.
THE MARQUESS OF LOTHIAN: My Lords, a copy of the Statement made yesterday in another place by my honourable friend the Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs has been published in the OFFICIAL REPORT.
LORD BROCKWAY: My Lords, I thank Her Majesty's Government for having published that Statement which enables us to comment with some knowledge. While welcoming the international endorsement of the Agreement between the United States of America and Hanoi, may I ask whether this Declaration is not

993
very inadequate in its failure to provide for international action to see that this agreement is observed? Further, while the International Commission of Control and Supervision will make reports, is it not a fact that there is no provision whatsoever for the implementation of those reports? I should also like to ask whether the danger of Canadian withdrawal is not very serious. What has been the role of Her Majesty's Government in all this?
THE MARQUESS OF LOTHIAN: My Lords, I believe the noble Lord has put his finger on one of the problems involved in this very difficult situation. He will have read the Statement made yesterday by my right honourable friend, in which he said that this Agreement will work only if all parties to it are convinced and are willing to try to make it work. I am sure the whole House will wish the Agreement well and hope that it will stick. The Canadian Government, as the noble Lord knows, said that there is a possibility that they might not be able to carry on after 60 days. We do not know whether in practice that will turn out to be the the case, but so far as Her Majesty's Government are concerned, we intend to give our support, so far as we can, to the implementation of the Agreement.
LORD BROCKWAY: My Lords, is the Minister aware that I am putting these questions not in any partisan way but out of a very deep concern over the chaos which has been left in Vietnam and Indo-China as a result of the ceasefire? May I ask Her Majesty's Government to keep a very careful watch on the situation. I should also like to ask whether it is the desire of Her Majesty's Government that this matter should be left in the hands of the United States and Hanoi? Do they not think it is regrettable that the United Nations has been kept out of it, and is it not possible that some international interest may still be necessary before this complicated situation can be resolved?
THE MARQUESS OF LOTHIAN: My Lords, we will certainly keep as close a watch as we possibly can on the situation. As the noble Lord must be aware, Her Majesty's Government are as interested as any other in the preservation of peace. We ourselves would like
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to have seen the United Nations playing a part in this situation and the time may yet come when they will be able to do so.
LORD HARVEY OF PRESTBURY: My Lords, would my noble friend agree that the chaos referred to is more likely to be cleared up if the exchange of prisoners takes place as arranged?
THE MARQUESS OF LOTHIAN: Certainly, my Lords; and we must hope that that will happen.

COSTS IN CRIMINAL CASES BILL [H.L.]
On Question, Bill read 3a, and passed, and sent to the Commons.

COAL INDUSTRY BILL
2.57 p.m.
EARL FERRERS: My Lords, I beg to move that this Bill be now read a second time. Last week, on a Motion introduced by the noble Lord, Lord Tanlaw, your Lordships discussed in a far-seeing and indeed fascinating debate the future prospects of energy from the point of view of the requirements for it, its availability and the sources from which it comes now and from which it may come in the future. If there was one thing that emerged from that debate it was that we know that we do not know all the answers. We do not know how much energy will be required in the future, how available it will prove to be and from where it will come. What was clear from that debate was the underlying opinion that we should keep all our options open. We heard how coal plays a vital part in meeting our energy requirements. It is a source of indigenous energy with vast reserves which could help to supply our needs for many years to come. But several speakers spoke of the uncertainties which surround alternative sources of energy, and because of these uncertainties, if for no other reason, it would be quite wrong to regard coal as a dying industry.
I recall these points because they show how this Bill, which provides support to the coal industry on a large scale over the next three to five years, is not an

995
attempt to rescue something from the past but is essentially a forward-looking Bill, and it deals with an industry which has an important future. The importance of coal in our national life can be illustrated by two quite simple figures: it produces almost 70 per cent. of our electricity supplies, and it employs more than a quarter of a million men.
Despite the difficulties which have been caused by the declining trend in the market for coal, the Board made a small surplus in 1970–71. They hoped to repeat, or even to better, this in the following year, but unfortunately in the event they ended the year not with a profit but with a loss of £157 million. This, of course, was mainly the result of the miners' strike and the overtime ban which preceded it. I do not want to go into past history or to tread on tender ground, but we must recognise that there is a continuing result from this; namely, the continuing increased costs which have to be borne. The prospects about a year ago, were, therefore, for continuing losses. Without Government help the Board could only have remedied their financial position by a massive contraction of the industry. The fact that more than half of all pits were shown to be loss-makers gives an idea of how drastic this contraction would have needed to be. In addition to this, most of the pits which would have had to be closed if such a contraction had taken place are in the assisted areas, where unemployment was already high. And because there is often no alternative local work in the small mining villages which would have been affected, the hardship would have been even greater than current employment figures alone indicate.
Neither this Government nor, I suggest, any other Government, would have been prepared to face the social and human consequences which would have ensued had the industry been allowed to collapse. If we had allowed that to happen the decision would have been almost irrevocable. Pits, once closed, are almost impossible to re-open, and even more important is the fact that once the highly skilled labour force had been dissipated it would have been very difficult, if not impossible, to build it up again. It would have been very foolish to permit such a thing to happen, particularly so long as the current uncertainties surround our
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alternative fuel supplies—especially oil. This again was underlined by your Lordships last week. These were the reasons why the Government considered that help was justified, even if it meant help on a massive scale.
But the Government believe that the most important element of all in securing the future of the coal industry must be the efforts of those engaged in it, both management and men, to make it economic. It was for this reason that the Minister for Industry wrote both to the unions and to the management before framing this Bill, to ask what contribution they were prepared to make towards putting their house in order. He subsequently discussed their joint proposals with them at meetings which were unique in that the Government, the Board and the three unions concerned with mining were all represented.
The outcome was very encouraging. The two sides of the industry set out measures which they proposed to take, and which they believed would provide a real opportunity for the industry to be restored to a viable basis. The industry in their turn made proposals for Government help which we found to be substantially acceptable. They have been published and have been fully taken into account in framing the Bill. It was against this background that the Government decided to ask for the powers which are proposed in the Bill. The Bill falls into three major sections. The first deals with the valuation of the Board's assets. The figure on their books was unrealistic in relation to their earning capacity. There was also the burden of interest which was carried as a result of past losses. Our proposals will enable the Board to start 1973–74 with a clean slate on capital account.
It has been accepted by this Government and the previous Administration that there are certain social costs which are associated with running the industry which the Board cannot be expected to pay entirely on their own. The statutory provisions under which the Government help the Board with these costs were coming to an end. The Bill makes it possible to help the Board with costs, pensions, and redundancy payments up to about £50 million a year for the next three, or possibly five years. Thirdly, the Bill will enable grants, averaging up to

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about £125 million a year, to be made to the Board on operating account to give them a breathing space in which to find their feet commercially. Finally, there is a clause dealing with the membership of the Board and then the usual clauses and Schedules on interpretation and other legal points.
I will now deal with the individual clauses of the Bill. The Board's auditors, who are appointed by the Government, have been consulted about the earning capacity of the Board's assets other than those which are to be brought under the holding companies to which I shall refer later. They advised that the assets in question are over-valued on the Board's books by about £275 million. Secondly, by the end of the Board's current financial year, on March 31, 1973, the Board will have accumulated losses of between about £170 million to £180 million; the exact amount will not, of course, be known until the year has ended and the accounts are available.
Under Clause 1 of the Bill both these amounts will be written off the Board's accounts, and the Board's debts to the Secretary of State will thus be reduced by the total of about £450 million. This will save the Board interest of approximately £25 million a year, and their depreciation charges will be reduced by about £17 million. Some of the provisions of Clause 2 are consequential on Clause 1. The Board's present borrowing limit is £950 million, and in the light of the reduction in their debt this is being reduced to £550 million, but with provision for it to be raised to £700 million by Order. Similarly there is a new limit on the accumulated deficit which the Board may carry on their books. It will be £50 million which can be raised by Order to £100 million. In an enterprise of the magnitude of the Board the occasional deficit may be unavoidable. But the hope is that it will never again be of this order. The other provisions of this clause clarify and adjust the Board's borrowing powers and I do not think I need detain your Lordships with the details.
I come now to the second group of measures. Even with the Government help envisaged some pit closures are inevitable. There will be some cases in which reserves become exhausted, and it
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may prove impossible to avoid intolerably heavy losses in others. Government help will be needed to enable the Board to provide fair terms for the men affected.
Clause 3 authorises grants of up to 50 per cent. towards the Board's social costs associated with pit closures. The costs involved here are: redundancy payments under the Redundancy Payments Act; compensation for premature retirement and loss of prospects for the staff; payments towards rehousing and resettlement of men employed elsewhere in the industry, and maintenance of welfare activities. This is a continuation of powers which were first introduced by the previous Administration in 1965 and continued by this Government under the 1971 Act. Those powers expired at the end of 1973–74. The new powers run to March 1976, and can be extended by Order to March 1978.
Similarly, Clause 4 extends to March 1976 the Government's powers to make Redundant Mineworkers' Payments Schemes. These would have expired in March 1974. Under the present scheme a man made redundant over the age 55 can have his earnings maintained at 90 per cent. of their previous level for three years. An improved Scheme is being discussed with the Board and the unions, and when the discussions are completed the new Scheme will need to be approved by both Houses of Parliament. The Secretary of State has announced that the new Scheme will apply as from December 11, 1972.
Clause 5 authorises grants to be made to the Board towards the cost of improving the existing mineworkers' pension. The present rate is £1·50 a week, and discussions are going on between the Board and the unions on the basis of an improvement of £3 a week. This provision also runs to March 1976, but can be extended by Order to March 1978.
The third group of measures bears more directly on the Board's operations and less directly on the position of the men. In the short run it is possible that the Government's measures to control the contraction of the industry could lead to coal surpluses. These would either be sold to the Electricity Generating Board at suitable prices, or be put to stock.

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Clauses 6 and 7 will enable the Government to help finance these measures if they are needed. Clause 6 enables the Government to pay the costs of the Electricity Generating Boards if they burn more coal than they would have done solely on commercial grounds. The National Coal Board and the Generating Boards are negotiating on this "extra-burn". I do not wish to anticipate the outcome of these discussions, but naturally the Government will need to be satisfied with any agreement which is reached. This clause only runs to March 1976. Clause 7 provides for assistance with stocks. It will not apply to stocks over a total of 30 million tonnes, or below one-twelfth of the annual deep-mined output. This provision runs to March 1976 but it can be extended to March 1978.
Clause 8 will enable support to be given to the production of coking coal. This is prudent in view of recent world shortages of this essential material. The clause will enable the United Kingdom to participate in the coking coal subsidy scheme which is now under discussion between the members of the European Coal and Steel Community. Again the powers run to March 1976, but are extendable to March 1981. Clause 9 breaks slightly new ground for this country. I have already described the hardship which a collapse of the mining industry could cause in regional unemployment. The fact is that 90 per cent. of this industry is situated in assisted areas, and it is with that fact in mind that the Government are taking power in this clause to give grants specifically to moderate the contraction of the industry. Up to £210 million may be given for this purpose over the next three years.
Clause 10 will enable the Board to be strengthened by the addition of three further part-time members. We all recognise that the Board face a very difficult and complex task in restoring the industry to viability and in reorganising their ancillary activities. It is no reflection on their present skills that they will in the future be able to draw on outside expertise. The remaining clauses are really just technical adjustments.
We hope that this reorganisation will help the Board to bring the industry back on to its feet. It will be a big task
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and one involving large sums in public expenditure. I should of course point out that the amounts mentioned in the Bill are maxima. Actual payments will depend upon the performance and the prospects of the industry. The Government's commitment to the industry is not open-ended, and both sides of the industry realise that if it is to have a viable future it is essential that total costs are kept in line. But it cannot be stressed too strongly that the future must depend upon the industry's own efforts in increasing efficiency and containing costs. The productivity records which the industry set in November and December are promising. With that kind of effort within the industry I suggest that the Bill will provide a real opportunity for it to regain its feet as a competitive supplier of a large proportion of the country's energy needs. I am sure the House will wish the industry well in its task, and will wish it success. I beg to move that the Bill be now read a second time.
Moved, That the Bill be now read 2a.—(Earl Ferrers.)
LORD DAVIES OF LEEK: My Lords, before the noble Earl settles down to listen to the debate I should like to ask him a question. If he considers that it should be left until the Committee stage I will accept his ruling. I was interested in his expression in dealing with Clause 9 when, if I heard him aright, he said that a further sum of £210 million would be granted to moderate the contraction of the pits. Is the noble Earl able to tell me whether that £210 million, which will be used in uneconomic pits, will be extra to the main amount granted, or is it within the main grant?
EARL FERRERS: No, my Lords, this is a special amount which can be provided over the next three years in order to help the pits to contract at a slower rate than otherwise would have been possible had the grant not been available.
LORD DAVIES OF LEEK: My Lords, I thank the noble Earl for that clarification.
3.13 p.m.
LORD SHEPHERD: My Lords, we on this side of the House, and I hope on all sides, express appreciation to the noble Earl not only for his speech in regard to its content but also for the general

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attitude that he had in his mind when making that speech. I say that because I think the House, and we on this side in particular, recognise that what the noble Earl has now said is in fact a complete reversal of what the Party opposite had in store for the coal industry when they achieved power in 1970. So while some of us may have had some suspicion of what were the real intentions, I believe that the noble Earl's speech, and particularly the manner in which he made it, will give us some assurance. I shall be particularly anxious to hear what my noble friends Lord Blyton and Lord Taylor of Mansfield, two Members of your Lordships' House who have not only an intimate knowledge of the industry but a continuing one with those who work in it, have to say, to see whether (as I hope they will be able to say) those who now work in the industry feel reassured as a consequence of the statement made last year by Her Majesty's Government and which is now contained in this Bill.
The noble Earl referred, I think on two occasions, to the fact that this Bill will put the industry back on its feet. The strike of last year had a devastating effect, not only on the financial condition of the industry but also on the structure of the pits. Like the noble Earl, I do not intend to say a great deal about that particular episode. It is, however, a matter of regret that there had to be this major injury to this industry in order that the miners could obtain pretty well all their demands as a consequence of the Wilberforce Inquiry into pay and conditions in the industry. It is a matter of regret that there was not the machinery available, or acceptable to the two sides, to find a proper solution (as eventually the Wilberforce Committee found) without having to go to the length of that disastrous strike.
I will return now to the subject of putting the industry back on its feet, for if one looks at the whole history of the coal industry since it was nationalised it can be seen that it has been one of gradual (but developing in momentum) improvement, not only in the conditions of its workforce, in which not only the Board but previous Governments can take pride, but also in increasing efficiency. One only needs to look at the various graphs that are to be found in
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the last annual report of the National Coal Board to see how significant those improvements have been. It is indeed gratifying to read in this report of the major improvements in productivity that the Chairman of the National Coal Board can report, following the strike. One of the remarks of the Chairman that struck me as of great significance was about the determination of the Board that as a consequence of that strike there had to be much closer consultation between the two sides of the industry. All the information that I have received during the past two or three weeks since I was asked to speak on this Bill leads me to believe that the two sides in the industry are now closer together than they have been for many years. That is indeed gratifying.
With regard to the Bill, a very large sum of money is being written off, and I think the Government are right. There is no purpose in having this sort of deficit around the neck of the Board. It is not only depressing but it also puts any future figures out of perspective, and if one is starting again after that strike I think it is right that one should start, as I believe the Minister in another place put it, "with a clean slate". If one has a clean slate, then the new figures, whether they are surpluses or deficits, will have a much greater sense of reality.
On this side of the House we particularly applaud Clause 9, which deals with regional grants. Those of us who have had any experience at all of the mining areas will know that a great deal needs to be done there, and if one can in any way slow down where retraction is necessary in order that new industry and new services may be brought in, so much the better. I suspect that at the end of the day the total sum that may be expended will not only be well worth while but in fact will be a great deal cheaper to the State than if it were left and had to be dealt with many years later. We applaud Clause 3 dealing with redundancy payments, the loss of superannuation and employment prospects; and also, in particular, Clause 5 which provides for mineworkers' pensions. All these provisions are not only right and just towards those who work in this contracting industry but I believe that they will help to create the right kind of atmosphere that is necessary for real co-operation between Board and management.

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Naturally we on this side of the House fully support the Bill and we shall certainly help towards getting put on the Statute Book within a matter of weeks, because I see that some of the clauses require to be implemented from April 1, which is not so long away. The last thing I would say is this. I should like to congratulate the industry and the Board in particular on the extent to which this very dangerous form of employment is being dealt with. The way in which the number of accidents involving injury have been regularly and consistently reduced, particularly the significant fall in the last two years, is quite dramatic. Unfortunately, some 50 or 60 miners a year still lose their lives. Efforts are being made, I know, to reduce this number, and when one looks at the total figure of accidents and casualties there is reason to hope that the Board and the National Union of Mineworkers can, in the end, make this industry a great deal safer than it now is.
With those few words, and with a special commendation to the noble Earl and the Government for having introduced this Bill and for having changed their policy, we on this side of the House shall support this Bill and will see what we can do to get it on the Statute Book by the right date.
3.22 p.m.
LORD BLYTON: My Lords, during the miners' strike last year, I moved a Motion in relation to that strike and I dealt somewhat exhaustively with the financial position of the coal industry. I said then that sooner or later the Government would have to make a financial reconstruction as the industry could not carry the burdens they were then carrying. Everyone knew that it was impossible to make a viable industry under the financial restrictions from which they were suffering. The last capital reconstruction was in 1965, since when 230 pits have been closed and we have reached the stage where the National Coal Board can have an operating surplus of £100 million without the industry's accounts showing a profit.
All those pits have closed and the N.C.B. have been burdened with the payment of assets which have gone. Everyone knew that the debt was too
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high in the light of the assets and the decline of the industry. Payment of those assets—that is, the pits that have been closed and are gone for ever—has meant that we have been paying for and servicing debts on machinery which was no longer in use at pits which closed. Those with a knowledge of the industry know that the charge per ton in interest is higher to-day than it was in 1965 when the Labour Government knocked off £415 million. The burden on the industry since then has been the weight of debt, and it is higher to-day than ever before.
The coal industry has had no reorganisation of its capital debt since 1965, despite a contraction of about one-quarter of our market for coal and all the closures that have taken place. They lost £157 million last year and expect to lose £100 million this year. The accounts of the coal industry over past years have been severely affected by the artificial continuation of massive debt burdens, and we have seen large operating surpluses of the industry in the past concealed by the massive interest and depreciation provisions. Those who understand the industry knew that this could not go on. I remember that last year, when dealing with this problem, we were told that if the strike went on the men would be doing away with their employment; that it would all go. But all those cries of woe that I heard last year have been proven wrong: not one pit has been closed as a result of that strike and since the men went back to work their productivity has increased far more than private industry. We are producing over 45 cwt. per man shift, which is something like a 5 per cent. increase in production. The Board and the men are working hand in hand. They jointly put their case to the Government for capital reconstruction, and the Bill today is a result of the amicable negotiations between all parties concerned.
My Lords, I not only welcome this Bill but I welcome the change of policy that is embodied in it. It is clear that the Government have rejected the policy of the last 12 years of letting the coal industry find its own level without aid being provided. The Minister said in another place on December 21, 1972:
"… we rejected that course"—

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that is, that the industry find its own level—
"as one which would have led to intolerable consequences both on social grounds and because it would have imposed an unacceptable danger to the security of the country's supplies of energy"—[OFFICIAL REPORT, Commons, 21/12/72, col. 1601.]
If I understand that aright, it means that coal is to play a more vital part in our future energy requirements.
For years in another place, when I spoke as a Front Bench Member in Opposition, the Miners' Union and the miners' M.P.s all put forward this point of view but we were always told that in competition with other fuels the industry had to find its own level. And what have we witnessed? In 1955, we had 705,000 men in the mining industry: today, we have 208,000. Over 400 pits have been closed during this period, and even in the period of my own Government 230 pits were closed. There was a write-off in 1965, as I have said, but as everyone knows, it became apparent early in 1969 that there was a necessity for the further write-off that is embodied in the Bill. After all these pits were closed, the capital debt hung around the industry's neck like an albatross, especially as the industry was so much smaller.
I want to speak now about what is to arise from this turn of events. Are we to get an energy policy in which coal will have a larger share? What should this policy be? What are its short term aims to the mid-seventies and the longer term aims after the mid-seventies? Much is written to-day about the uncertainty of the future availability and price of energy throughout the world. The Government themselves will have to make a judgment of the risks and the costs of alternative courses. All the estimates in the past have been wrong; each one that was produced "bashed" the coal industry, until our share of the market is now about 42 per cent., compared with 90 per cent. in 1950, of the total energy demand. Successive Governments, Labour and Tory alike, encouraged other fuels, like oil and nuclear power, imported liquid methane for gas purposes; that brought our industry down from 230 million tons of coal in 1950 to 141 million tons in 1971.
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As we were running the coal industry down in this country, America and Russia five years ago saw the long term danger of this course; they encouraged the use of coal, and increased output to safe proportions within their own economy. In making a judgment of the risks and the costs of alternative courses the Minister said in December last year:
"In making that judgment, the Government must have in mind the virtually irreversible nature of pit closures, and the cost of sinking new pits. It must also weigh the effect on our balance of payments of the use of different fuels. At present we believe that it would be foolish to allow an over-rapid contraction of the coal industry."—[OFFICIAL REPORT, Commons, 21/12/72, col, 1601.]
I am delighted, after all the years we have argued in another place and our representations have fallen on deaf ears, that there is this change of policy, though years belated, that I now rejoice so much about. The stage has been reached when contraction ought to end. I am not speaking of pits where reserves are exhausted; they naturally go out. I am certain that contraction would leave the country with an energy gap in the short term; but also we would be subjected to energy shortage in the long term if contraction were carried to any degree.
The miners for their part have shown how much they can contribute. Productivity has reached an all-time record, and the industry is now operating at the highest level of efficiency. That is there to be seen. We can compare this achievement with any of the coal industries of Europe, who are more State-aided than, or as much as, the Coal Board will be on the passing of this Bill. Only recently there were Press reports of the plight of the German coal industry, our largest competitor in Europe. It is known that the power stations of North Germany were able to buy British coal much more cheaply than coal from the Ruhr, even though German coal is at present much more heavily subsidised. Even before the overtime ban in 1971 and the strike in 1972 coal was being produced at a profit in our country, while in the Ruhr it was being produced at a deficit.
On December 11, 1972, the Minister in his Statement said that
"… fuels which appear to be expensive at present may prove to be rather cheaper in years to come.—[OFFICIAL REPORT, Commons, 11/12/72, col. 35.]

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This has been fortified by the statement made by the Chairman of the Coal Board, who said:
"While part of Europe's coal production is uncompetitive with oil and other fuels to-day, it seems likely that it will be much more competitive by the 1980s."
Speaking about future trends developing in world-wide energy demands which make it vital for us to conserve our basic resources, the Minister said:
"Some major European countries and the United States are aware of the impending problems".
There are immense problems. Nuclear power, which 10 to 15 years ago was to replace coal, is coming along very slowly. I still take the view that the coal-fired generating station in its proper place will outstrip any nuclear power station. Comparing like with like, nuclear power has not yet been competitive with coal. Millions of pounds have been poured into the nuclear energy programme, and we have not yet had any return from urging it on. Let me be quite clear. It is not that I do not want a nuclear programme. Before the Public Accounts Committee Sir John Hill said:
"So far we have not been able to generate more cheaply by nuclear means than by conventional means."
This is confirmed by the fact that the C.E.G.B. Dungeness power station is now four years behind schedule, and its cost will be more than double the original estimate of about £80 million. It will be many years before nuclear energy has parity with coal.
The chairman of the C.E.G.B. has said that if the price is right the Board would take 75 million tons of coal or more a year. I ask that Drax B be put on coal, and that there should be an increase in coal-fired stations in the future. With the aid provided for the N.C.B. in this Bill I think the price can be right for them. Supplies of natural gas, a clean and useful fuel, are of limited duration. We should conserve this fuel as much as we can. Mr. John License, chief economist of the Gas Council, has warned that it would cost more and that it would be a great mistake to use this domestic fuel for raising steam in power stations. While I do not wish to appear in any way to criticise the C.E.G.B., I hope that in their annual report the Government will reject this idea that they should have more gas. We have to know much more
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about the amount of natural gas in the North Sea. I am sure the Government are not enthusiastic about letting them have it, and neither is the Gas Corporation. Until more is known, it is right that it should be restricted, especially when coal is still admirable for steam raising.
Now to oil, my Lords, which may be plentiful to-day from the Middle East, but it is going up in price all the way and this trend will continue. These oil producing countries are now determined to extract as much as they can get for their oil. The oil sheikhs are doing this through their organisation which is called OPEC and I only hope the Government will follow the example of the oil sheikhs in their approach to the royalties that are in the North Sea. However, the price of Middle East oil is steadily rising and is certain to go higher in the future to satisfy the needs of America, which we learn is to become a net importer on a huge scale. The dimensions of the United States energy crisis, which will have great impact on the rest of the world, can be judged by the estimate that the United States adverse balance of payments for oil alone can rise from 2 billion dollars to 30 billion dollars in 10 years or less. That is why America is aiming to double its output of coal in the 1980s and to recruit and train another 50,000 additional miners by 1975. Why, even the Committee of the European Coal and Steel Community have been urging Britain and her new partners to promote their own coal-mining industry in order to avoid over-dependence on non-member countries for energy requirements. Everyone knows my views on the European set-up, but at least it is something to see them change their attitude from the position they have taken up against coal in the past 10 years to my knowledge.
Do not let us pretend to ourselves that all our energy requirements will be solved by North Sea gas or North Sea oil. This welcome addition to our energy resources is not likely to be with us until 1974, especially oil, and then very slowly; and so far as we know it is of limited duration. It is hard and expensive to get, as expensive as Middle East oil, and it is known that Britain will never be self-sufficient in oil. Even the Chairman of Shell last year urged the Government to encourage the mining of all coal

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which can be got out of the ground economically.
I do not want to go over the clauses of the Bill. The Minister covered them excellently. I want only to say a word about Clauses 4 and 6. Clause 4 relates to redundancy payments. The time has come when these ought to be stepped up. A man at the pit with 45 years' service gets about £800, yet if he had been a docker with this length of service he would have got three or four times that amount. I hope the Government will be generous in this matter. Clause 6 refers to the sale of coal to the generating boards. I hope the Government will promote the burning of coal. If the electricity market for coal contracts it will make this Bill impracticable. Coal-fired stations in the right places should be built, to give this coal industry a chance in the future, at the same time preventing this country from being held to ransom on energy supplies. That is my case, my Lords. I wish the Bill well and hope it will soon be on the Statute Book.
3.45 p.m.
LORD TAYLOR OF MANSFIELD: My Lords, may I say first of all how very grateful we are to the noble Earl for a cogent exposition of some of the clauses of this Bill, which, when we read them, appeared to be somewhat complicated. Speaking for myself, after the explanation the noble Earl has given, they are much clearer than they were. May I ask a question to which I think the noble Earl can get the answer if he does not aready have it in his mind? Prior to 1970 there used to be a little pamphlet produced by the Department giving a mine of information, a lot of useful statistics about global output, output per man shift, absenteeism, and every matter connected with the industry. How many of us used to receive that I do not know, but I have not had one since 1970. This pamphlet presented a picture of the coal industry which was easily assimilated. Could the Minister say whether that has gone out of production? If it has not, speaking for myself, I should be very pleased to have one in the future.
The most significant pronouncement made by the noble Earl was that this coal industry has an important part to play in the future. Some of us have believed that for many long years. May I also say that the industry has been confronted
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with deficits and financial liabilities. Before the beginning of the strike of 1972, with one exception, the mining industry every year has produced an operating profit, but it has been crippled by financial liabilities. The amount of interest that has been paid out since the industry came into public ownership is really fantastic, and if a new approach, first in 1965 and now through the medium of this Bill, had not been made, so far as this industry is concerned those financial liabilities would have continued like an albatross around the neck of the mining industry. Like the speakers who have preceded me. I give a hearty welcome to this Bill because I believe that it holds out a better prospect for this industry and charts a new course, and it seems to me that this Bill is an important milestone, landmark—whatever one likes to call it—for the coal industry of Great Britain.
May I with all sincerity say this to the Government. The financial proposals in the Bill are by no means ungenerous, but what is of outstanding importance is that it recognises the necessity for a forward look and for facing the realities of the not-too-distant future regarding fuel supplies and energy requirements. To me, that is one of the most important indications of the Bill. No nation, particularly a highly industrialised one with modern techniques and sophisticated machine power, can afford to ignore the fact that energy is basic to the maintenance and improvement of the standard of living of the people.
Take our own country as an example. I know that this is elementary—there can be no contest, no quibble at all about it—but every section of our industrial and manufacturing processes requires fuel of some kind. Further, every household, every office, every building and shop, needs heat and light, and modern technology is such that energy produced by natural fuels of some kind, solid or liquid, is a "must". I submit that there is no escaping that fact. I suggest that on that point there is complete unanimity. There may be a difference of opinion as to which fuel, indigenous or imported, should be preferred, but one factor stands out very clearly, and that is where the preference of every post-war Government has been: oil, most of it imported, has continued, as my noble friend Lord Blyton has said, to increase its share of

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Britain's energy requirements. In fact, in the last decade oil has increased its share of Britain's energy requirements from 24 per cent. to 46 per cent., and mainly at the expense of coal.
I have held the view for some years now that every post-war Government has been mistaken in placing too many eggs in the oil basket. Why has that been my view? I give two or three reasons. No. 1 is the political instability of the areas from which the oil comes. I think we have been lucky in this respect; there has only been the Suez crisis and the cutting of the pipeline across the Syrian Desert jeopardising our oil supplies from the Middle East. Point No. 2 is that this colossal importation of oil has affected our balance of payments. Point No. 3 is that it has meant the contraction of the industry, with the social effects which my noble friend Lord Blyton described. Those three factors have led me to the view that we have put too many eggs in the oil basket.
May I at this point make a brief reference to the National Union of Mineworkers respecting the consistency of its advocacy of an integrated fuel policy based on the maximum use of indigenous fuels. For more than twenty years this has been the line of the N.U.M.—and since long before the discovery of gas and oil in the North Sea. This welcome additional indigenous asset does not detract in any way, in my view, from the validity of the fuel policy which the union have put forward for so long. In October last year—and note that this is since the discovery of oil and natural gas in the North Sea—the National Union of Mineworkers issued a statement, and I quote merely the first paragraph:
"If current trends in the fuel and energy spheres continue, then Britain and the rest of the industrialised nations could be facing an energy shortage which would destroy the fabric of society as we at present know it."
They went on to say that there is no desire to exaggerate the situation, but simply to make out a case for increased coal production.
To learn what the trends were in this field of fuel and energy, I began a little research, and I sought knowledgeable and what I should regard as expert opinion on consumption and the reserves of fuel that would be needed to meet the energy requirements not only of the moment but
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of the future. My discovery was that energy consumption in the 50 years from 1900 trebled, but in less than half that time—that is, in 20 years—it trebled again. Present world energy requirements are increasing at the rate of 300 million tons of coal equivalent every year. This latter figure is the present combined output of coal in the whole of Western Europe.
The main increases in world energy use have been in oil and natural gas. However, world coal output has risen, except in Western Europe. It has been said by one authority that the decline of coal production in Western Europe must be regarded as misconceived. On the evidence that I have seen, energy requirements will go on increasing for the foreseeable future. May I give a figure that has been produced by the United States Department of the Interior and the United States National Petroleum Council as recently as 1971? They say that energy requirements in the world will double in the ten years between 1970 and 1980.
Now may I say just a word or two about fuel reserves, for the reason that projected energy requirements and fuel reserves are inseparable. I have found that few fuel economists could venture to say that our indigenous supplies of oil and natural gas will last much beyond the next 30 years at the present rate of consumption. Further, the United Nations Economic Unit has forecast that by the year 2,000 87 per cent. of all proven, probable and possible reserves of oil, and 76 per cent. of natural gas, would have been consumed, but only 2 per cent. of the reserves of coal here and in the remaining part of the world. If these forecasts proved to be correct so far as natural gas and oil are concerned, great emphasis, as my noble friend indicated, would have to be placed on nuclear energy or on the expansion of the coal industry, or both. Nuclear energy's contribution 10 years ago was negligible. In fact, until 1955 it was not even thought of as a possibility. Even to-day it is contributing only 3 per cent. towards our energy requirements. There may be problems—there have been problems—financial, certainly technical, and environmental, which no doubt have impeded the progress of nuclear energy.
Along with other noble Lords who have spoken, I very much welcome this Bill.

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It indicates to me, at any rate, that in Whitehall there has been a rethinking about the coal industry and the part it must play in energy requirements. To use the language of the Minister in introducing the Bill in another place on December 21, 1972, at column 1603 of the OFFICIAL REPORT:
"Our proposals will avoid contraction on a scale which would have been unacceptable on social grounds"—
and I think this is perhaps the most important factor—
"and would have left us dangerously under-insured against a world shortage of energy."
This Bill further spotlights and focuses attention on the important part which coal still has to play in energy requirements for a long time in the future. Since the end of 1956, almost twenty years ago now, the coal industry has had a very rough time in the sphere of contraction of output; redundancies, removals from one coal field to another, and the social consequences and dereliction arising out of the unprecedented contraction of the industry in some areas of the British coalfields has been alarming. It is no extravagant language to say that for almost twenty years the coal industry has had a severe battering, and in the process morale has been eroded. I do not propose, because it is so well known, to relate in statistical form the numerical decline in manpower and global output. The position was well put by the Vice-President of the National Union of Mineworkers at last year's Trades Union Congress. I quote his opening paragraph:
"In our opinion, the policies pursued by Governments who have allowed the catastrophic contraction of the mining industry to take place over the past years … will turn out to be penny wise and pound foolish and our nation will suffer as a consequence."
This statement was made before it was known what was in the mind of the Government and before the publication of this Bill. In December last year, prior to the publication of the Bill, there was no evidence, so far as my recollection goes, that there was likely to be any change in policy respecting the coal industry. In fact, quite the contrary, if the pundits of Fleet Street are to be taken seriously. A columnist in the Daily Telegraph had quite a lot to say after the miners' strike about the mining industry. I will only quote from the
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Sunday Times of February 20, 1972, a headline which said: "Farewell King Coal: the King is dead."
My Lords, after reading this Bill and noting the speeches of the noble Earl and the Ministers in another place, my conclusion is that there has been rethinking about the part which our indigenous solid fuel will play in the meeting of our energy requirements for the future. I believe this Bill expresses the justified apprehension respecting the danger of relying too much upon imported fossil fuels to meet the energy requirements of the future. One could say quite a lot more about that, but I want to ask the Minister one or two questions about Clause 1. What will be the saving to the Board in interest payments? I understand that the slate is being wiped clean, but there will still be an outstanding financial liability in the form of a loan of £375 million. Perhaps the Minister could give some enlightenment on that particular point. Then I would ask, what is meant by payments to the Board for promoting the Electricity Generating Board in England and in Southern Scotland? The position at the moment is that the Electricity Generating Boards were reimbursed themselves for the amount of coal burnt.
My Lords, this Bill, so far as I have been able to ascertain, is welcomed by all in the industry. I think all in the industry have made a contribution to it, the Board and the unions. It will be of assistance in arresting further decline of the industry, which in my view would be detrimental in view of the possibility of growth in our energy requirements and the possibility of relying too much on imported fuels. My Lords, I welcome this Bill this afternoon.
4.8 p.m.
LORD WYNNE-JONES: My Lords, I must apologise, especially to the noble Earl, Lord Ferrers, for not having been able to be present when he introduced this Bill. Unfortunately I had to be present at another meeting. There are one or two reasons why I feel that the Bill should be particularly welcomed. I think the Government are to be congratulated upon the Bill. In the first place, as has been pointed out, it helps to put the coal industry upon a good financial basis, not

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only in the sense of cutting off its liabilities for the past but also in giving it a good probable future. As other noble Lords have said, particularly the noble Lord, Lord Blyton, and the noble Lord, Lord Taylor of Mansfield, the coal industry is going to play an increasingly important part in supplying the energy of this country.
In the first place there is no doubt, as has already been said, that coal ought to play an extremely important part in the production of electricity. It is eminently suitable for the production of electricity. It is not suitable for driving steam engines—the efficiency is far too low; it is not suitable for the ordinary domestic fire—again the efficiency is low and a lot of dirt is produced. But it is eminently suitable for producing electricity. It may be that one ought to look a little further into this point. At the present time probably the cheapest way of producing electricity is to have the electricity station at the pithead. But if we do this we then have to face the high cost of distributing electricity.
It is interesting to observe that if it costs, let us say, £1 for distributing a certain number of units of oil by pipeline, it costs £3 for distributing the same amount of gas in thermal equivalents by pipeline and it costs £10 for distributing electricity by means of a grid. In other words, the distribution of electricity is much more expensive than the distribution of oil; which is one of the main reasons why oil has been so popular as a fuel. If, however, one were to use a pipeline for distributing a coal slurry, I believe all the evidence is that it would be comparable in cost with the distribution of oil. So it may be that it would be more economical not to try to site one's electricity generating stations near pitheads, but to site them closer to the consumer and to distribute the coal by means of a pipeline to the electricity stations. It seems to me that it is in exploring this type of scheme that we could probably make a distinct advance in cutting our energy costs. All this means a good deal of expenditure in investigation, and this Bill should help the Coal Board in carrying out further investigations into the most economical ways of utilising coal.
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I believe that it is also extremely important that the level and volume of research into coal and its uses should be maintained. It is well known that when an industry, especially an industry such as the coal industry, is faced with financial difficulties the first thing it will do is to cut its expenditure on research. It is therefore extremely valuable that in this Bill we have machinery for enabling the Coal Board to have resources which will help it to maintain research on coal, both in its own establishments and throughout the country, because it is only in that way that we shall get a proper utilisation of coal.
The final point to which I wish to make reference is raised in Clause 8 of the Bill, which interests me particularly: I refer to the question of coking coal. Here we have the link between the coal industry and the iron and steel industry. The importance of coking coal for the iron and steel industry is absolutely paramount. It is quite essential that we have good, hard coke produced for blast furnaces. In the old days, one had to go to those parts of the country where there was good coking coal. That is one of the factors that built up the reputation of the county of Durham from the coal industry's point of view. It had the best coking coal, certainly in this country and possibly in the world. It was superb coking coal. But as that coking coal has become exhausted we have found it absolutely essential to use other methods and by continued investigation it has proved possible to get just as good coking coal by blending other coals, which in themselves are unsuitable for coking. This has saved the situation in this country and elsewhere for the iron and steel industry. Therefore, I am particularly glad that in Clause 8 there is special reference made to
"… measures for securing supplies of coke for use in blast furnaces by the iron and steel industry in the United Kingdom",
and that there is to be made available a sum not exceeding £75 million for helping in the supply of coke for the iron and steel industry. I think that these are very important steps, and that it is excellent that we should have this Bill, which I strongly recommend to the House.
4.15 p.m.
EARL FERRERS: My Lords, I am very grateful to noble Lords who have

1017
taken part in the debate on the Bill, and for the welcome which they have given to it. Indeed, every noble Lord who has spoken has been grateful for the Bill and I should like to thank them for their remarks. The noble Lord, Lord Shepherd and the noble Lord, Lord Blyton, could not help twitting the Government about their change of heart. The noble Lord, Lord Blyton, said that he rejoiced in the Bill and I am glad that it has given him an opportunity for rejoicing. I think that the message to be taken from the Bill is not so much the fact that there has been a change of heart, but that the Government have done what they always intended to do, which was to ensure that the right thing was done for the coal industry in all the circumstances which obtain.
The coal industry has many peculiarities. It is a labour-intensive industry, it has faced mechanisation on a considerable scale, it has faced a contraction of demand through no fault of its own, and it employs many men in small localities which have few alternative methods of employment. The coal industry also produces a type of energy which is vital, and because one does not know what future requirements will be it is essential that the industry is put on a viable footing and kept there. As regards the contraction of the industry, it might be helpful to look at the figures for the years 1955 to 1971, because they are interesting. In 1955, industry used about 45 million tons and it now uses 13 million tons. In 1955, the railways used 12 million tons of coal and they now use 0·1 million tons. In 1955, gas-works used 28 million tons, and they now use 1·1 million tons. In 1955, the total production of coal was 229 million tons and it is now 128 million tons.
I give those figures simply because they are the result of a change of circumstances. Everyone knows what has happened on the railways, but the fact that they now do not buy coal does not mean that the coal industry is a dying one. That situation has come about because of a change of circumstances, and that is the type of problem which the coal industry has had to face. I agreed with the noble Lord, Lord Wynne-Jones, when he rightly said that coal is an excellent fuel for producing electricity, and that is one of the reasons why 70 per cent. of the electricity generated is produced from coal. To
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quote those same two years again, in 1955 the electricity industry used 43·5 million tons of coal and in 1971 it used 67·7 million tons, and that increase underlines the point which the noble Lord made. I think it was the noble Lord, Lord Blyton, who quoted the chairman of the Central Electricity Generating Board who said, "If the price is right". If the price is right, there can be opportunity for greater uptakes of coal, and that is one of the reasons why we have made provision in the Bill for the extra burn.
My Lords, the noble Lord, Lord Blyton, said that coal is better than atomic energy for the making of electricity. I should not wish to go into the arguments between the two different types of fuel—indeed, the three or four different types—used for making electricity, but I would confirm that coal is a vital component for the making of electricity. The noble Lord said, not unsurprisingly, that he hoped that Drax B would be a coal-fired station. This station is in the programme of the Central Electricity Generating Board, but they have made no proposals for the construction of a coal-fired station at Drax B, nor have they any firm plans for major station orders at present; but the support for extra coal burn, which is proposed in this Bill, is the best way, I would suggest, of supporting coal demand at the present time. The noble Lord also asked whether the redundant mineworkers' pensions scheme could be looked at, and looked at more generously. As I said in my opening remarks, a new scheme is being discussed at the moment with the boards and the unions, and proposals will be put before Parliament when those discussions have been concluded and at the appropriate time.
The noble Lord, Lord Taylor of Mansfield, whose knowledge of the coal industry, like that of the noble Lord, Lord Blyton, is deep and, if I may say so, much respected by us, asked what had happened to the coal statistics. I will see that the noble Lord receives a copy of the most recent statistics in order that he may be able to digest them, if that is the correct expression. He also said that the financial provisions in this Bill were not ungenerous. My Lords, the noble Lord, Lord Taylor of Mansfield, is not usually one for an understatement, but I think that on this occasion

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he was possibly guilty of that slight error, because if one takes the first two clauses and considers the amount that has been written off the coal industry's accumulated debts and the amount involved in writing down of their assets, they total to about £450 million. The total provisions allowed for in this Bill, coupled with those which they may be allowed if the provisions are taken to their extremity by order up to 1978, is of the order of £695 million. So this Bill, at its maximum, could account for a sum of £1,145 million. I think that the noble Lord, Lord Taylor of Mansfield, will agree that that is not an ungenerous sum of money.
LORD SHINWELL: My Lords, I am sorry to interrupt the noble Earl, and I did not want to take part in this debate—my noble friends know more about it than I do—but the noble Earl has referred to the argument by Lord Taylor of Mansfield that the financial provisions of the Bill are not ungenerous on the part of the Government and is now saying that he thinks they were excessively generous. Let me tell him at once that if, since nationalisation, the coal industry had received from the iron and steel industry a price which was reasonable, instead of the coal industry selling its product to the iron and steel industry below cost, then it would just have balanced the provision that the Government have made by offsetting the debt of the National Coal Board, as they propose to do in this Bill.
EARL FERRERS: My Lords, I should not wish to follow the noble Lord, Lord Shinwell, in his nuances as to what would have happened if people had paid more. I should think that if he had used that same argument on the domestic sector or any other sector he might have come to the same conclusions; but I cannot really see the noble Lord using those arguments at the time when he is suggesting that they should have been used. No, my Lords: I did not say that this Bill was excessively generous. I was agreeing with the noble Lord, Lord Taylor of Mansfield; and I said that I thought
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that his expression of "not ungenerous" was possibly an under-statement. But I accept the point.
The noble Lord, Lord Taylor, asked what would be the saving in interest charges. The answer is, about £25 million a year; and there will also be a saving in depreciation of some £17 million a year. He also asked about the sums of money that have been spent previously in coal burn. As the noble Lord knows—and, indeed, I think he said as much in his speech—the payments for extra burn were made to the Central Electricity Generating Board, and the 1967 Act authorised £45 million for this sum. In the event, only about £20 million was spent, and that was between 1967 and 1969. As the noble Lord appreciates, any money now spent on extra burn will in fact be paid to the Coal Board and not to the Central Electricity Generating Board.
I was particularly grateful that your Lordships should have given this Bill the welcome that it has received. We wish to do the right thing for the men in the coal-mining industry. We wish to do the right thing for the assisted areas. We wish to do the right thing for the industry as a whole, to put it on its feet and to make it as viable as possible. Equally, we want to do the right thing for the taxpayer and the consumer, and also to make provision for whatever energy requirements may be forthcoming in the unknown future. It is in order to try to accommodate all these different points of view that the Government have brought this Bill forward. My Lords, we wish the Coal Board well in its new task. We wish the miners well in their new task. We wish well, too, the relationship, to which I think the noble Lord, Lord Blyton, referred as "this amicable relationship" among the Coal Board, the unions and the Government. This Bill, I hope, is tangible evidence of our support for the industry and of our hope that the industry will be able henceforward to go on with sure conviction.
On Question, Bill read 2a, and committed to a Committee of the whole House.

PROTECTION OF AIRCRAFT BILL [H.L.]
4.28 p.m.
LORD DRUMALBYN: My Lords, I beg to move that this Report be now received.
Moved, That the Report be now received.—(Lord Drumalbyn.)
On Question, Motion agreed to.
Clause 7 [Purposes to which Part II applies]:
LORD TREFGARNE LORD TREFGARNE moved Amendment No. 1:
Page 7, line 12, at end insert—
("(c) of installations the purpose of which is to assist civil aircraft on the ground or in the air.")
The noble Lord said: My Lords, in rising to move the first of my Amendments, may I briefly step a little out of order and apologise to my noble friend Lord Drumalbyn for putting down my Amendments so late? As he knows, I was a little rushed in getting all the papers together and into the hands of the Clerks in time, and I am sorry, therefore, that my noble friend has not had very long to look at them. I hope that his answers or his reactions to my Amendments will none the less be favourable.
My Lords, Amendment No. 1, which I now beg to move, is to add to the installations and aircraft which, under Clause 7, can be affected by this Bill; and in so doing I have in mind installations which are not necessarily on airfields, which are not necessarily part of aircraft, but which are none the less vital to air navigation. I have in mind, for example, installations of radio aids, which are frequently located between airfields or at turning points on airways, which are not covered by paragraphs (a) and (b) of subsection (1). The nature of these facilities is such that they are often in remote locations and would, I submit, be quite vulnerable to attack. I think that the inclusion of this Amendment for their protection would improve the Bill.
THE EARL OF SELKIRK: My Lords, this seems to me a very sensible addition to the Bill and in line with the principles expounded to us. These installations are extremely exposed and absolutely vital,
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and I hope that the Government will accept the Amendment.
LORD HARVEY OF PRESTBURY: My Lords, I support the Amendment. It may well be that there are fuel installations a mile from an airfield and on rented land, or there might be lighting systems and so on. I think my noble friend has made a valid point.
LORD THOMAS: My Lords, I wish to support this Amendment. There are all kinds of things, such as radar beacons, which may be sited in remote places.
LORD BESWICK: My Lords, especially as I think I shall find it more difficult to support later Amendments in the name of the noble Lord, Lord Trefgarne, I hasten to say that I think he has something here which ought to be added to the Bill, and his Amendment has my support.
LORD DRUMALBYN: My Lords, in view of the unanimous expression of opinion I feel that I must say right away that we accept this Amendment in principle. We considered the matter previously and whether we should include air navigation facilities outside aerodromes. We decided not to because it would include the Civil Aviation Authority. But there is a strong case for taking this course, which we accept in principle. I would ask my noble friend to withdraw his Amendment because we have had only just enough time to look at it. As he knows, one has to make certain that an Amendment is in due form and we shall put down an Amendment at the next stage.
LORD TREFGARNE: My Lords, I cannot ask for more than that. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 8 [Power for Secretary of State to require information]:
4.32 p.m.
LORD TREFGARNE LORD TREFGARNE moved Amendment No. 2:
Page 7, line 34, at end insert—
("Provided that nothing in this Act shall require any person to whom this Clause is applied to provide information likely to prejudice his legitimate commercial interests.")
The noble Lord said: My Lords, this is the first of several Amendments which I have put down, and it seeks broadly to

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achieve the same end; that is, to preserve what I regard as the legitimate commercial interests of airlines and particularly of smaller airlines. The big Corporations, like B.O.A.C., B.E.A., or even British Caledonian, have enough strength, one feels, to be able to expose their commercial activities, and the names of their customers for example, without fear of jeopardising their commercial interests. With smaller airlines there are often cases where the names of their customers are confidential and if they lost even one customer their commercial position might be seriously threatened. I am concerned particularly about charter operators, where the major part of the capacity of an aircraft might be sold to one customer, and if the name were divulged the business might be lost to another airline. I shall be interested to hear the reaction of the noble Lord to this line of thinking, if not specifically to this Amendment, because it will affect what I shall have to say about my other Amendments which hinge on the same point.
LORD HARVEY OF PRESTBURY: My Lords, I wish again to support my noble friend's Amendment, although this one is rather more complicated than the previous one. I must declare an interest as I am a director of an independent air freight company. Competition among air freight companies throughout the world is very intense. They operate rather like cargo ships used to operate many years ago. The captain of the aircraft looks for business and takes on big responsibilities. It would be damaging to any British independent company, or indeed to a corporation, if the names of customers, or details of loads being uplifted, were divulged. I hope, therefore, that this matter will be given serious consideration.
LORD BESWICK: My Lords, may I make certain that the noble Lord, Lord Drumalbyn, will deal with the point about the confidential character of the information given? I find it difficult to understand how information given to the Secretary of State would be detrimental to the legitimate commercial interests of a company. I should have thought that if the Secretary of State were going to make any decisions about the matters affected
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he would need to have full information and, provided that it is confidential, I cannot see what harm that can do.
LORD THOMAS: My Lords, I suggest that this Amendment would not be acceptable to most of the commercial operators. In my view, physical safety is more important than commercial security. Like the noble Lord, Lord Beswick, I do not think that information given to the Secretary of State would be liable to leak back into commercial circles.
LORD DRUMALBYN: My Lords, I cannot be so forthcoming over this Amendment as the previous one for the reasons which have been indicated by the noble Lords, Lord Beswick and Lord Thomas. I hope that my noble friend Lord Trefgarne will not think me frivolous if I say that the whole purpose of these clauses is to make sure that people do not lose their customers. This must be the main point throughout the consideration of the Bill, and it will, I am afraid, be a recurring one in respect of the various Amendments. Protection against acts of violence is the whole purpose of Part II of the Bill. It is very much in the interests of air operators that this protection should be given, and it cannot be given completely if any information is held back.
The noble Lord, Lord Beswick, is right in thinking that the information sought will be treated in confidence. This information will be related to the purposes of the Bill, protection against acts of violence. The idea of seeking it is to make sure that the Secretary of State is informed of the security measures that are being followed wherever there may be a threat. He cannot tell in advance where the threat may arise. This information is being provided voluntarily at the moment; there is no difficulty about it. I do not understand my noble friend's misgivings in this regard. Surely he would agree that where commercial information is necessary for a proper appreciation of the security position it should, and indeed must, be provided. I hope therefore that the noble Lord will not press his Amendment.
LORD TREFGARNE: The noble Lord, Lord Drumalbyn, has been able to allay my misgivings over whether the

1025
Secretary of State would secure the information in such a way as to enable it to remain confidential. I am now convinced about that, and I ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD TREFGARNE LORD TREFGARNE had given notice of his intention to move Amendment No. 3:
Page 7, line 40, leave out subsections (3) and (4).
The noble Lord said: My Lords, this Amendment to the same clause is an endeavour to achieve the same purpose as the previous Amendment. For that reason I do not propose to move it.
Clause 9 [Power to impose restrictions in relation to aircraft]:
4.40 p.m.
LORD TREFGARNE LORD TREFGARNE moved Amendment No. 4:
Page 8, line 42, at end insert—
("(1A) Any operator to whom this subsection is applied may decline to accept any searcher who is specified by the Secretary of State but who is not a constable where he believes his legitimate commercial interest is likely to be prejudiced.")
The noble Lord said: My Lords, although this Amendment is an attempt to meet the point we have been discussing I think it avoids some of the pitfalls which beset my earlier Amendment. I think also that its acceptance would achieve desirable ends. For example, the Secretary of State might wish to instruct police at London Airport, who might be employed by a major airline, to carry out searches in an aircraft belonging to the smaller independent airlines. Under the Amendment the operator will be able to insist that a constable, either of the airport authority police or of the local constabulary, should carry out the search. Otherwise, as I have said on the previous Amendment, information of a confidential nature (which I am not endeavouring to keep from the Secretary of State but only from other airlines) might be "leaked" to them. I beg to move.
LORD DRUMALBYN: My Lords, what is proposed by the Government is simply that it should be made possible to give directions to enable searches to be carried out. It is not a direction for the search to be carried out, but a
1026
direction not to permit persons to be allowed on the aircraft unless they have been searched. The Bill makes it clear that the direction could provide for a constable to carry this out or for other persons to be specified who might carry it out. It is not the intention for such directions to specify particular persons. In cases where it is not appropriate to specify constables it will allow the use either of the airline's own security personnel or those of other security organisations. When we are entrusting powers of this kind it is necessary to have people who are trained for the job.
The purpose of specifying other people is to ensure that if a direction is received to carry out searches, the people doing the searching will be people trained for the job. It will not be right for operators of airlines or of aircraft to go out and find anybody to do the job. I do not think that the situation envisaged by the noble Lord can arise. At present the airline operators decide who they will use on searches of their passengers and the Government pay. We would expect this process to continue; but if it did not the specification of the persons to be used in searching would be in general terms and would follow appropriate consultation. I do not expect that difficulty will arise in the way my noble friend suggests. Where necessary, searches are already being carried out using recognised methods. This will continue to be the practice in the future.
LORD HARVEY OF PRESTBURY: My Lords, I agree with what my noble friend has said, but there is one aspect which is giving rise to concern. It is the simple things that go wrong. At present Customs personnel have an absolute right to search an aircraft. There may be a danger in future from people impersonating them. Some form of identification is required. If a man wishes to cause trouble, to do damage or harm, he can dress in an appropriate uniform and copy the badges. I should like to see some more definite arrangements made to obviate impersonation as far as possible. Perhaps the noble Lord could look at that.
LORD BESWICK: My Lords, I follow the point that the noble Lord, Lord Harvey, has made on the security aspect. I should not have thought the point was

1027
covered by Lord Trefgarne's Amendment. I do not share the apprehensions of the noble Lord, Lord Trefgarne, in this matter and I would support what the noble Lord, Lord Drumalbyn, has said. At the same time, one has some sympathy with the general point which Lord Trefgarne has made about the need to maintain the confidential character of the information which might be obtained in one way or another by the Secretary of State. I wonder whether it may not be appropriate to put into the Bill (perhaps in Clause 8 or Clause 9) something which would give assurance to noble Lords that special steps will be taken, or every effort will be made, to ensure that such information as comes to the Secretary of State as a result of these emergency powers will be treated in a manner ensuring its confidential character. Would the noble Lord agree to have a look at that?
LORD THOMAS: My Lords, not only should a person be specified but he should also be identified so that the airline's own security people know what is going on. I would resist this Amendment.
LORD CAMOYS: My Lords, I have made a further experiment. In plain clothes with a rather fancy hat on, and making myself quite conspicuous, I entered London Airport. I was not stopped from going up to the roof and leaning over the V.I.P. entrance, from where I could have dropped a grenade. I feel that this aspect of security, about which we have spoken before, is very important and we must give more attention to it.
LORD DRUMALBYN: My Lords, I note what my noble friend has said. The severity of security measures will depend very much on the degree of "alert" at any given moment. We are now discussing searching before boarding aircraft rather than searching as a security measure in aerodromes. I can reassure the noble Lord that identification is one of the major security measures taken at airports at the present time. Identity cards are issued to all persons concerned. I think the main point we have to bear in mind here is that the directions in question will be given to the operators of the aircraft. It is for them to make their own arrangements for the searching for it will be up to them to do it. The other matter is that
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the directions are intended to ensure that whoever does the search is qualified for the purpose. We shall be coming to Clause 12, subsection (1) of which says:
"A direction under subsection (1) of section 9 or under section 10 of this Act may specify the … qualifications which persons carrying out any such search are to have …".
Subsection (7) reads:
"In this section 'qualifications' includes training and experience."
I do not think that my noble friend has anything to fear from the point of view of commercial confidentiality because this will be in the hands of the operators themselves.
LORD BESWICK: My Lords, I am not speaking again—this is Report stage—but asking a question. Will the noble Lord answer my question about some phrase or clause in the Bill which would give some assurance to Lord Trefgarne about retaining the confidential character of information gained here or elsewhere?
LORD DRUMALBYN: My Lords, I thought that by implication I had answered that question. I said that this was in the hands of the operators themselves. In cases like this, they are the people who are going to organise the searching of people before they go aboard an aircraft. If the noble Lord is considering the more general point of confidentiality under the whole Bill, I will willingly look at it to see just how that is covered.
LORD TREFGARNE: My Lords, I am not sure whether I should ask the noble Lord to respond to my point before he sits down, but I am still a little concerned, because although I accept what he says, that at this moment the operators make their own arrangements and produce suitably qualified people to conduct the searches, this clause empowers the Secretary of State to make a direction as to who shall carry out the search. As an operator, I am concerned that the Secretary of State may direct somebody to make that search, not only of passengers but also of cargo—and personally I am particularly concerned with cargo—who will of course pass on any relevant information to the Secretary of State, but might also pass it on to my competitors.
LORD DRUMALBYN: My Lords, perhaps I may intervene for a moment. I

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wonder whether my noble friend has understood the words in line 37. It says there:
"… in the direction have been carried out by constables or by other persons of a description specified in the direction …".
There is no question of directing particular persons to carry out the search.
LORD TREFGARNE: My Lords, I must say that that allays some of my fears. I was reading this at about 3 o'clock on Sunday morning, and I might have got it wrong. I will have to think about it a little further. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
4.52 p.m.
LORD TREFGARNE LORD TREFGARNE moved Amendment No. 5:
Page 9, line 8, at end insert—
("Provided that no operator shall be required to comply with a notice served under this subsection before the expiry of a period of 90 days beginning on the day that the notice was served.")
The noble Lord said: My Lords, this Amendment was considered by me at five past three on Sunday morning. However, I think I have got it a little nearer the mark than I had the last one. Subsection (2) of Clause 9 empowers the Secretary of State to direct airlines to carry out such modifications or alterations in their aircraft or to fit such apparatus or equipment as he may specify. I think that is an admirable provision. For example, he might specify certain firearms to be installed for use by the crew. I do not suggest that that would be a good idea, but it might be something that he would specify. I should like to submit, however, that operators ought to have some time in which to do this, and in my Amendment I have suggested a period of 90 days, because that is usually the period for which large transport aircraft are maintained: in other words, the aircraft normally go into the hangar for regular maintenance for periods of 90 days. It varies from aircraft to aircraft, but that is a typical period. I suggest it is right and reasonable that operators should have this time in which to make preparations for doing this work, and also should not be put to the inconvenience and great financial cost of having to do these installations at short notice, particularly, for example, at the hight of the summer, when charter operators, such as
1030
those the noble Lord, Lord Thomas, heads, might find themselves severely embarrassed by having to withdraw an aircraft for a few days to do some maintenance on it. I beg to move.
LORD DRUMALBYN: My Lords, first I should like to take the opportunity of saying to my noble friend and to your Lordships as a whole that it is not intended that directions should be given, except of course in an emergency, without consultation with those to whom they are given. The obvious reason for this is that one wants to make certain that whatever directions are given are practicable and can be carried out. I say that because it might turn out from such consultations that any particular level of time laid down in the Bill might not be appropriate. I entirely take my noble friend's point, that a reasonable time for compliance has to be given, but I am not sure that 90 days would be the appropriate norm, if I can put it that way, or that there should not be some flexibility. If my noble friend will withdraw his Amendment on the assurance that we accept the idea, we will try to put down an Amendment which I hope will commend itself to the House.
LORD HARVEY OF PRESTBURY: My Lords, I should like to agree with my noble friend who moved the Amendment, but I am unable to do so. The last thing that I want to see is aircraft grounded and kept out of the air when they could be earning revenue. It may be that a modification has to be carried out to the avionics or some part of equipment in the interests of the safety of the crew or passengers, and to put a hard and fast time of 90 days would be wrong. I would rather, as my noble friend, says, see this brought about by consultation and arrangement.
LORD THOMAS: My Lords, I think this Amendment is unnecessary, because one can only assume that the provision of any piece of apparatus that is required would be done in consultation with the A.R.B., or someone like that. The idea of flying an aircraft without an essential piece of equipment for 90 days is quite horrifying. I am against this Amendment.
LORD DRUMALBYN: My Lords, if I may intervene again, I do not think

1031
it is so much a question of flying the aircraft without an essential piece of equipment, but more the provision of some device which might be useful either to get rid of something you did not want on the plane or to prevent your getting rid of something that you wanted to keep—for example, allowing somebody to parachute out in flight. These are the kind of ideas that we had in our minds regarding modifications. As to the time, I entirely agree with my noble friend Lord Harvey of Prestbury that nobody wants to have his aircraft grounded, and for that reason it may be unwise to put in a definite time, except that once a time has been agreed upon it is desirable that within that time the thing should be done: in other words, there should be compliance with what has been agreed to. That is the sort of way in which we intend to try to devise our Amendment.
LORD TREFGARNE: My Lords, I am obliged to my noble friend for the friendly reception of the spirit of my Amendment, if not the words, and I beg leave to withdraw it.
Amendment, by leave, withdrawn.
LORD TREFGARNE LORD TREFGARNE moved Amendment No. 6:
Page 9, line 9, leave out subsection (3) and insert—
("(3) Before giving any direction under subsection (2) of this section the Secretary of State shall be required to obtain the consent in writing of the Civil Aviation Authority.")
The noble Lord said: My Lords, in rising to move this Amendment I am seeking to establish that any modifications to aircraft or additional equipment fitted to aircraft should either comply with British civil airworthiness requirements or in some other way be approved by the Civil Aviation Authority. The Bill as at present drafted, and as I read it, merely requires the Secretary of State to consult the Civil Aviation Authority and to take account of any advice. In my Amendment I seek simply to ensure that the Civil Aviation Authority approve the modification or the additional equipment. For that purpose I beg to move.
LORD BESWICK: My Lords, I think someone ought to congratulate the noble Lord, Lord Trefgarne, on the simple way in which his mind works, and what I might call without offence the cool cheek
1032
of this wording. I should love to think that Secretaries of State could not get on with their jobs unless they had the consent in writing of some people they had appointed. At the same time, I agree—and I expressed agreement at the earlier stage—that it would be inconceivable that any modification to an aircraft would be permitted if it was contrary to C. of A. requirements. If the modification made the aircraft unairworthy, surely it would not get a C. of A. In effect, the Civil Aviation Authority would have the final word; but to put down in a Bill that the Secretary of State must have consent in writing from some organisation like this is, I should have thought, going just a little far.
LORD DRUMALBYN: My Lords, I do not think I need to add to what the noble Lord, Lord Beswick, has said. I really think my noble friend can rely on good sense in this matter. The final decision has to rest with the Secretary of State, but of course in a matter of this kind he would not disregard the advice of the very body which is responsible for issuing the certificate of airworthiness.
LORD TREFGARNE: Yes, my Lords; but we have appointed the Civil Aviation Authority as experts. The Secretary of State, in all his wisdom, is not necessarily an expert in these matters. The noble Lord, Lord Beswick, and I served on the Committee which set up the Civil Aviation Authority. We did not all agree that the Air Registration Board should become part of it; but it did. Now we give the Secretary of State power to overrule or neglect that advice completely, if need be.
The Bill contains some degree of safeguard. The Secretary of State is required to consult the Civil Aviation Authority and to take account of any advice given to him by the Authority. But as I read the Bill, that does not mean he has to obtain their consent to any instructions that he may give in relation to this clause. I cannot say that I am very happy about either the remarks of my noble friend Lord Drumalbyn or those of the noble Lord, Lord Beswick, for whose experience and wisdom in this matter I have a high regard. Nevertheless, I shall not seek to press the matter and would ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 11 [General power to direct measures to be taken for purposes to which Part II applies]:
5.1 p.m.
LORD STOW HILL LORD STOW HILL moved Amendment No. 8:
Page 10, line 27, leave out from beginning of line to ("the") in line 28.
The noble Lord said: My Lords, I beg to move this Amendment, and should like, if I may, to couple with it the following Amendments which really all go to precisely the same point: Nos. 9, 10, 11, 12, 13, 17 and 19. The object of the Amendment which I now move is to direct your Lordships' attention to the structure of Clause 11 and to submit to the Government that really it ought to be remodelled in order to import into it a much greater degree of precision as to the powers it confers.
I believe that your Lordships are all agreed, as appeared in the Committee stage of our discussions on the Bill, that one really is dealing with two separate categories of measure. There are emergency measures, and I think your Lordships all felt, and I certainly feel myself, that in so far as the Government are asking for powers to take emergency measures in order to achieve the purpose set out in Clause 7 of the Bill—that is, to protect aircraft and passengers from acts of violence—we as a Legislature ought to go very far indeed in trusting the Executive with wide powers for that purpose. They are measures which have to be taken at once, and they are measures which it may be urgently necessary to put into operation immediately in order to protect unfortunate people, perfectly innocent, who may be miles high in the air and wholly at the mercy of some half-crazy villain who seeks to execute his will on those persons. We go a long way in that direction. I believe your Lordships felt that in so far as the Bill purported to confer power for measures which were long term in their nature we should be much more careful both to define those measures and to give time for reflection and appeal against them by those affected.
Having said that, may I go back to the actual wording of Clause 11(1), which enables the Secretary of State to give
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directions to certain persons who are described—
"requiring him to take … such measures for purposes to which this Part of this Act applies as are specified in the direction."
Those words are absolutely general in scope. There is in them no limitation whatsoever. If one looks at the next subsection, one finds that a direction may include the imposition on the operator or the manager of an aerodrome to undertake guard duties and to provide the necessary personnel to carry out those duties. With that I have absolutely no quarrel at all. Those powers seem to me to be absolutely necessary: what I criticise is the extremely general scope of the words I first read out.
If one looks further on in the Bill one finds, as it were by a side wind, looking at subsection (4) of Clause 13 or at Clause 20, that those measures which can be included in the direction are intended to comprise the destruction of a building, the construction of a building, the alteration of a building or the removal of a building either on the area of an aerodrome or outside it. One finds that in so far as that building work may be included in a direction, it is subjected to some, though rather uncertain, limitations by subsection (6) of Clause 13. I said "uncertain"—for the moment, I do not discuss the detail of it—because subsection (6) seems to me, at any rate, to be very substantially qualified by subsection (2) of Clause 14, and whereas subsection (6) of Clause 13 seems to limit what the Minister can order to be done, when one looks at subsection (2) of Clause 14, that limit seems very substantially abated.
What I am therefore asking the Minister to do is to take this clause back and say what measures he means to be comprised within the general words which I have cited from subsection (1). I do not for a moment mean to say that those measures should not include the construction or destruction of any buildings: I concede that that may be urgently necessary. I have not the necessary technical knowledge and many noble Lords who have spoken in this debate know infinitely more about these matters than I do, so that I speak with the greatest respect to their experience which they bring to bear.
I accept that drastic powers of that kind may be necessary, but what I am criticising is the way in which the clause is

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drafted. It contains those very general words which we find, as it were by a side wind, looking further on to the clauses to which I have referred, include building work. There is no appeal given. The direction has just got to be carried out. My Lords, how far does it go? Do those very general words, for example, include a power to direct that somebody is to be deprived of his liberty, whereas the law apart from that would not allow him to be deprived of his liberty? If that is so, it seems to me that we are embarking upon a new and dangerous form of legislative enactment.
I am simply appealing to the Government to say what it is they think should be included in those words. If they wish the words to relate to the construction or destruction of buildings, let them say so. I accept at once that one cannot be too rigid in the development of our law. We are, as the years go by, confronted with new and different situations. We are now confronted with the situation of hijacking by utterly unscrupulous villains who will endanger the lives of other people for their own purposes, which may sometimes be idealistic but which are not infrequently simply for the purpose of gain. I quite accept that we must furnish those who are responsible for our affairs with far more drastic powers than would have been thought appropriate in the past. I do not quarrel with that, but I am appealing for precision in the formulation of our Statutes. There is no reason why we should not in our Statutes say precisely what powers they are to have, but in departing from the requirement of precision as a legislative body in entrusting powers to the Executive we are, I submit, embarking upon a dangerous course. I submit that that is precisely what we are doing by the wording which we have embodied in Clause 11(1).
Obviously the Minister cannot give a promise straight away to recast the whole of this clause. Speaking for myself, I shall be perfectly content if he will say that he recognises that there is some force in that argument, and that it ought to be given further consideration, consideration which will be directed towards a more precise formulation of the general—and I accept probably quite necessary—powers which it is sought by those
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words to confer upon executive Ministers and others. I beg to move.
5.10 p.m.
LORD HARVEY OF PRESTBURY: My Lords, we have listened to words of wisdom from the noble and learned Lord, Lord Stow Hill. If he is frightened, imagine how the rest of us feel about the wording of this clause! I know that my noble friend wants to do all he can to safeguard aircraft crews and passengers, but in my view this really is going far too far. Anybody reading Clause 13 would never go into business. If he were contemplating doing so, he would be advised not to go into the aviation business. What could happen to people investing their money, effort or time here is far-reaching, and I would ask my noble friend to try and condense this clause into something which makes sense to the average person.
LORD THOMAS: My Lords, I have followed with considerable care the closely reasoned argument of the noble and learned Lord, Lord Stow Hill. It both clarifies and fortifies the Bill, and I hope that the suggestions made by the noble and learned Lord will be followed by the Minister.
LORD DRUMALBYN: My Lords, I confess that I find myself somewhat at a disadvantage in arguing on drafting with the noble and learned Lord, Lord Stow Hill. I am also a little puzzled about his moving Amendment No. 8 and linking a whole series of Amendments, except by way of illustration. The Amendment we are dealing with, as I understand it, is to leave out the words:
"Without prejudice to the generality of the preceding subsection".
LORD STOW HILL: My Lords, I hope I am not conflicting with your Lordships' practice in intervening again, but may I answer this question? I apologise for not saying that the effect of all the Amendments I have put down is to cut out the general empowering words, and to limit the scope of Clause 11 to the providing of guard duties and the providing of personnel carrying out those duties. That was the drafting device I used. It is designed to support the argument that a further clause should be formulated and inserted in the Bill saying precisely what further powers the Minister feels ought to be

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incorporated into the Bill, and saying precisely what they are.
LORD DRUMALBYN: My Lords, I take that general point; but I should have been happier if the noble and learned Lord had amended subsection (1) rather than the opening words of subsection (2). He complained of the words in subsection (1), but he does not propose to amend those. I cannot see that the other Amendments he has proposed would have the wide effect he seems to intend.
The noble and learned Lord is going a little too far in quoting the words:
"… the Secretary of State may give a direction to any person who is … requiring him to take … such measures … as are specified in the direction."
Of course, he missed out the vital words:
"such measures for purposes to which this Part of this Act applies …".
We come back again, as we are bound to, to the purposes of the Bill, which are:
"the protection against acts of violence … of aircraft, and of persons or property on board aircraft, and of aerodromes, and of such persons or property … in any part of an aerodrome."
These are the purposes, and they are very limiting purposes. The noble and learned Lord spoke about the destruction of buildings. He linked the Amendment with this. He referred to Clause 13(4) and it is just as well to say that this is another very limiting factor. I will quote the relevant words:
"A direction … shall not be construed as requiring or authorising the operator of any aircraft, or the manager of any aerodrome, or any person acting as the servant or agent of such an operator or manager, to do anything which, apart from the direction, would constitute an act of violence".
From that are excepted the words to which he referred:
"except in so far as it requires any building or other works to be constructed, executed, altered, demolished or removed."
The reason for those words being there is simply that technically the removal or destruction of works would come under the Criminal Damage Act 1971. Technically it would be an act of violence under that Act.
The noble and learned Lord has asked in effect that Clause 11 should list all the various things that could be done in addition to the powers given in Clauses 9 and 10. But we are bound to come back to the fact that this clause deals
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with emergencies. I recognise that the noble Lord has distinguished between the emergency situation and what one might call the advance preparation for an emergency situation, but in an emergency it may be necessary to give directions of almost any character for the purposes of the Act to avoid these acts of violence. They will have to be carried out at very short notice; they will have to be comprehensive. On the other side of it—and we are talking about preparations for an emergency—I can only say again (and it is important to emphasise this) that in every case, as there is now without these powers when something has to be done, there will be consultation. On the other hand, the powers have to be there.
The noble Lord does not interpret the provisions regarding dealing with works in the same way as I am advised. It is important to note here that a direction may be given to a manager of an aerodrome in respect of works, whether they are to be constructed, executed, altered, demolished or removed, but he then has to use his best endeavours to see that those directions are carried out. He has no power to direct the landlord of a property outside the aerodrome, for example, to do anything at all. The landlord in giving consent will know that he will be entitled to compensation. It would not be practicable to list in Clause 11 all the things that the Secretary of State might give directions about. One cannot foresee everything he may have to give directions about in an emergency. As for the rest, it would be difficult to provide in one clause for the various powers and limitations of powers that are provided in the various clauses which follow. So I think the noble and learned Lord, who is a perfectionist, is asking for a very great deal of perfection if he thinks this could all be done in Clause 11. I really do not think it could be.
It is a little difficult to deal in advance with all the points that might be queried under one set of Amendments. Amendments Nos. 8, 9, 10 and 11 obviously hang together but we have not really discussed the others at the present time. I hope that what I have said will be sufficient to show your Lordships that we accept entirely the distinction between the emergency situation and the preparation for the emergency situation.

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In the emergency situation there will probably be no prior consultation because it will not be possible; in the preparation for the emergency situation there will be the very fullest consultation so that everybody knows what is likely to have to be done in an emergency situation, and nothing will be done that does not have to be done. The important thing here is that people are instructed to take such action as is practicable and necessary.
I hope that with this explanation the noble and learned Lord will feel able to withdraw Amendment No. 8, to leave out the words
"Without prejudice to the generality of the preceding subsection",
which are saving words which are so often included in Acts of Parliament.
LORD HARVEY OF PRESTBURY: My Lords, before my noble friend sits down, will he say exactly what is in his mind? Why might the manager of an airfield want a new building put up? Has my noble friend taken into account that the airfield may be on the British Airport Authority's ground and the operator would have no legal right to put up a building? And if he had the right, he probably could not afford to do so. This whole clause seems hamhanded, if I may say so, and I hope my noble friend will give an illustration of what is in his mind.
LORD BESWICK: My Lords, I think one of the most modest of the noble Lords in this House is my noble and learned friend Lord Stow Hill, and I suspect he knows a good deal more about the technical aspects of air transport than he lets on. But it does not require any false modesty for us to say that we are far below him in the appreciation of the use of words. Frankly, I listened to him and I am prepared to take from him a lot that I do not properly understand. In this case, I think the principle that the noble and learned Lord, Lord Stow Hill, and I are seeking to establish is agreed to by most noble Lords on both sides of the House. The powers are very wide, they are ill-defined and, so far as I can make out at the present time (although we shall come to Clause 20 later and there are some Amendments tabled to that clause), there is no question of appeal. There
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ought to be some appeal. Probably we could accept some of the radical powers with a little less doubt if we received some assurances that later in the Bill there was going to be some provision for appeal. Having said that, I recognise that these Amendments are complicated; they do hang together and it might have been easier for us to understand if we had rewritten the clause so that we could see exactly what was left when we had taken certain words out and put some other words in. I wonder whether the noble Lord, Lord Drumalbyn, would agree, if we were to withdraw these Amendments, not only to look at the clause again but to discuss with my noble and learned friend Lord Stow Hill what is involved and to see whether we cannot in some way meet the point.
THE EARL OF SELKIRK: My Lords, I hope the noble Lord will look again at what the noble and learned Lord, Lord Stow Hill, has said. This is more than just drafting. The noble Lord has said constantly, "There is consultation; there is emergency". I accept the Civil Aeronautics Authority, but I do not think the word "consultation" appears in this Bill at all. The word "emergency" does not appear in the Bill at all, or indeed anything like it. It is not a very limited power. This affects every single aerodrome in the country, which, so far as I know, could be brought to a complete standstill at any time, by a telephone message. We must consider whether this is entirely what we want. I am a little worried about the situation, and if the noble Lord will undertake to look at it I shall be very happy.
LORD TREFGARNE: My Lords, there are two points that I should like the noble Lord to clarify for me. First, when one is constructing a building under the direction of the Minister in a potential emergency situation, or an emergency situation, surely that situation will be long since past by the time the building is finished—or is that point again too simple? The other point on which I seek clarification is the definition of an "aerodrome". It may be in the Bill somewhere. Must it be a licensed aerodrome or can it simply be something that the Minister suddenly decides is an aerodrome for the purposes of this Bill? There may be a definition somewhere which I have missed. Perhaps the noble Lord would help me.
LORD DRUMALBYN: My Lords, I can certainly help my noble friend Lord Trefgarne on his last point, because in Clause 23 of the Bill there is a definition of what is meant by an "aerodrome".
LORD TREFGARNE: My Lords, the noble Lord is quite right. I apologise.
LORD DRUMALBYN: My Lords, I fully understand the feelings of noble Lords and of course I shall be perfectly willing to look at this matter again, and particularly to look at it in conjunction with the noble and learned Lord, Lord Stow Hill, and to discuss what could be done to alleviate the anxieties that have been expressed. But I hope noble Lords will not allow their fancies to run away with them. I really think my noble friend Lord Selkirk was going a little far in imagining that a single telephone call could bring to a complete standstill the whole of an aerodrome—unless, of course, there was a serious emergency there, and then it could, and probably should, be brought to a complete standstill. As for the rest, such as the preparations for an emergency in circumstances like that, it has to be remembered that security measures are pretty far advanced at the present time; that this has been done entirely by consultation; that this is the proceeding that we expect to continue and that we intend to use the direction powers only where there is a real need for them—and that is something that one cannot put in a Bill. This is a matter of trusting the Government to deal with emergencies, just as you trust the police to deal with emergencies. It is the same kind of operation.
I will, of course, look at this matter again. I confess that I am not absolutely clear what the noble and learned Lord, Lord Stow Hill, has in his mind, but if we can, between us, help to make the Bill clearer and to allay the misgivings on this subject we shall be very glad to do so. We do not want to stir up anxiety. I see that my noble friend Lord Harvey of Prestbury has now disappeared, but we do not want to have a situation in which people will be afraid to conduct civil aviation matters in any way at all. I do not believe for an instant that in this Bill we are doing anything to make them more reluctant to go in: quite the contrary. What we are seeking to do is to protect civil avia-
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tion operators of aircraft, those who fly in them and property that is carried in them, and the people who resort to aerodromes. This is the whole purpose, and if we can in any way get this point over and alleviate the anxieties, I shall be glad to do so if the noble and learned Lord will withdraw his Amendment.
LORD STOW HILL: My Lords, in view of what the Minister has said, if I may have the leave of the Committee to withdraw this Amendment I seek to withdraw it.
Amendment, by leave, withdrawn.
5.30 p.m.
LORD TREFGARNE LORD TREFGARNE moved Amendment No. 14:
Page 11, line 28, at end insert—
("(8) No direction given under this section or under Section 10 of this Act shall come into force before the expiry of a period of 30 days beginning with the day on which the notice was served. Such direction may however come into force at once where the Secretary of State specifies in his direction that matters of urgent national security are involved.")
The noble Lord said: My Lords, this Amendment adds a sympathetic purpose to the Amendments which the noble Lord, Lord Beswick, and the noble Lord, Lord Stow Hill, have just discussed but not moved. I seek to impose some restriction on the very wide power that the Secretary of State is granted under this Bill. At the same time I believe it is reasonable that he should have some power to achieve the purposes of the Bill when the situation warrants it. I do not pretend for a moment that my Amendment is perfect, but I believe that if we can provide for some delay between the serving of the direction under the Act and its coming into force, that at least gives the person upon whom the direction has been served time to appeal to an appropriate court to have the direction laid aside, if that is the appropriate thing to do, and if the direction is not, for example, for the purposes for which the Act has been passed. I believe that the spirit of my Amendment, if not the detail of it, has some support in your Lordships' House. I beg to move.
LORD DRUMALBYN: My Lords, this is an Amendment which has been put down at fairly short notice, and my noble friend will not be surprised to hear that I am not in a position to say that I can

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accept it, even in principle. I suggest one reason for that, namely, that it is very difficult to say, as he did, that there should be an appeal to a court on what is essentially a matter of tactical security. The courts are not really equipped to deal with that kind of problem. Of course, if the Secretary of State were to exceed the powers that are given to him in the Bill, then the matter could obviously be taken to the courts on an appropriate "prerogative writ"—which I believe is the right phrase.
I sympathise considerably with my noble friend in his desire to get some greater assurance on the way in which directions are to be given relating to longer periods—the period of preparation for emergency, as I said, rather than emergencies themselves—but at the moment I can only say to my noble friend that our view is that it would be a mistake for Parliament to try to tie the hands of the Government in this way. If we are to deal satisfactorily with emergencies and with the avoidance of violence, it is necessary to have the same kind of free hand as, for example, the police have elsewhere; and possibly in view of the nature of the threat, to have a special degree of powers to deal with it.
One recurring difficulty again is that my noble friend refers to a period of 30 days. Once again, if one had any kind of time limit that might be very awkward. There are different kinds of emergency. For example, there is the immediate emergency; then there is a "tip-off" that an emergency might arise in a week or so; and there is all this gradation of alert. It is a very difficult problem. We have thought about the problem and we have not been able to find a solution to it. We were hoping that Parliament would agree to give us the powers for which we are asking. am perfectly prepared to look at this point again. Perhaps my noble friend will withdraw the Amendment so that it can be given a little more consideration than it has yet received.
LORD TREFGARNE: My Lords, before the noble Lord sits down, and while I am willing to withdraw my Amendment, can he tell me what redress is open to somebody who gets a direction under the Act, if we do not amend the Bill as I suggest, and if it is
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passed as at present drafted? Can he go to the courts and, if he thinks fit, seek some form of injunction?
LORD DRUMALBYN: If he has reasonable excuse he can in some circumstances, but not all: not in the case of Clause 9 or in Clause 10 where he has to "use his best endeavours". He can in those cases avoid liability for having failed to comply with a written notice or direction. But for the rest, the other safeguard, which I have already indicated, is, so far as property outside the aerodrome is concerned, that a landowner cannot be compelled to reach an agreement for works to be carried out. On the question of works being carried out, we do not envisage, particularly outside aerodromes, directions being used to any considerable extent. One can conceive of the possibility that they might be if there a vulnerable point at the extremity of the airport where one wanted to clear land outside the airport and, for example, erect some kind of light there. All that is covered by "works". One might want to have an are light or something of that kind, so that a dangerous area could be lit up. That is the kind of thing that might be done outside. Within the aerodrome itself, again one must not let one's imagination run away with one. The type of things that may need to be done by way of preparation for an emergency will be the subject of very careful consultation within the existing airport security committees. Nothing is likely to be done without the most careful consideration. If, at the end of the day, a direction had to be given, there would be full compensation.
LORD TREFGARNE: My Lords, I think that the noble Lord gave an assurance when he spoke previously, that this matter of the question of what redress is available to somebody who feels aggrieved by the direction served on him, would be looked at again, perhaps more widely than the question to which my particular Amendment relates. On the basis of that assurance I shall certainly withdraw my Amendment. In the meantime, may I apologise to the noble Lord, Lord Thomas, for inadvertently calling him something different a little while ago. A man with so long and distinguished a career in civil aviation as him will inevitably be called wrongly occasionally, but

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I do apologise to him. I beg leave to withdraw my Amendment.
LORD STOW HILL: My Lords, before the noble Lord withdraws his Amendment, may I with great respect follow on what the Minister said. He said that a person affected by the Amendment first has the right to escape the consequences in a criminal court if he can show that he had reasonable excuse for so doing. Would the Minister kindly look at Clause 18(2) where he will see that:
"Any person who refuses or fails to comply with a direction given to him under section 9 or section 10 of this Act shall be guilty of an offence."
He has absolutely no opportunity of saying that he had a reasonable excuse. It is an absolute liability. The provision as to reasonable excuse does not apply to directions under Clauses 9 or 10.
LORD DRUMALBYN: My Lords, before the noble Lord leaves that point, may I say—and perhaps the noble Lord missed it—that I went out of my way to say "except in the case of Clauses 9 and 10".
LORD STOW HILL: My Lords, I missed that, and I apologise. But it is a very large exception, if one looks at Clause 9 or Clause 10.
Then the Minister said that in any event there would be the right of compensation. There is the right of compensation given by the Schedule on an application to the Lands Tribunal in the event of a direction which requires the removal or construction of buildings. But, so far as I know, there is no provision anywhere for any right of compensation in respect of any other direction. As I read it, the Bill has no such provision; I may have missed it, but I do not think so. I should have thought the noble Lord might wish to consider that before he asks leave to withdraw his Amendment. There should be such a right of compensation of some sort. Not only is there no right of compensation, but, as I read subsection (2) of Clause 14, it is precisely excluded. That relates to acts done in the United Kingdom, and the latter part of the subsection says:
"… and accordingly no proceedings (whether civil or criminal) shall lie against any person in any United Kingdom court by reason of anything done or not done by him or on his behalf in compliance with such a direction."
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The only exception is that contained in the Schedule, which requires the construction or demolition of buildings, if I read it rightly.
LORD DRUMALBYN: My Lords, when I referred to compensation I was talking about the construction of works. If the noble Lord will look at Clauses 20 and 21 he will see that there is provision there.
LORD TREFGARNE: My Lords, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 12 [Matters which may be included in directions under sections 9 to 11]:
5.42 p.m.
LORD TREFGARNE LORD TREFGARNE moved Amendment No. 15:
Page 11, line 41, leave out subsection (3) and insert—
("(3) Before specifying any qualifications in accordance with subsection (2) of this section the Secretary of State shall obtain from the Civil Aviation Authority their approval in writing of the qualifications proposed to be specified.")
The noble Lord said: My Lords, this refers to an earlier point which I raised concerning the position of the Civil Aviation Authority, particularly in respect of any direction which the Secretary of State may give concerning the modification of aircraft or the installation of further equipment. I seek to secure by this Amendment that the qualifications of persons directed by the Secretary of State to carry out such work are approved by the Civil Aviation Authority. As before, the Secretary of State is required to consult the Civil Aviation Authority and to take account of their advice, but not necessarily, as I read it, to abide by their advice. It is for that reason that I have put down this Amendment. I beg to move.
LORD DRUMALBYN: My Lords, in a case like this the people who would know what the qualifications should be would be the Civil Aviation Authority, and therefore no doubt the Secretary of State would ask the Civil Aviation Authority what the qualifications should be and would accept their advice on this. The legal form of a clause does not always completely convey what the certain practice is likely to be. I really do

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not think my noble friend need have any concern about this.
LORD TREFGARNE: My Lords, I have only sought to simplify the words and make them more abundantly clear to those who would have to deal with these matters come the day. However, the noble Lord seems quite happy, and I have a feeling that he really seeks the same ends that I do, and for that reason I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD TREFGARNE LORD TREFGARNE moved Amendment No. 16:
Page 12, line 8 at end insert—
("(4A) No apparatus equipment or other aids may be specified under section 11 of this Act for use on or near aircraft unless the approval in writing of the Civil Aviation Authority has first been obtained.")
The noble Lord said: My Lords, this is a slightly different point, but one which will, I hope, commend itself to your Lordships. I am particularly concerned with search apparatus—those arches which we have all walked through at London Airport, which do, I believe, work on the basis of the magnetic effect of metallic objects about one's person. Magnetic apparatus is death to aircraft; it can upset all manner of equipment, compasses, radio equipment and so on. I seek to ensure that the Secretary of State will not inadvertently direct that such equipment is located too close to an aircraft or even on board, in the archway in the entrance of the aircraft, and thus upset the aircraft equipment. I hope this is a technical point which the noble Lord will be able to accept, at least in principle. I beg to move.
LORD DRUMALBYN: My Lords, I am obliged to the noble Lord for bringing up this matter, and I think what he has said is entirely proper. I do not think it necessarily would be the case that the Civil Aviation Authority would always be in the best position to advise on such equipment, although they would no doubt be consulted in every case. It might be, for example, that the manufacturers of the aircraft or the parts were themselves the best people to be consulted. I can assure my noble friend that consultation will take place before any equipment is
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brought on to or near an aircraft. Obviously this is the sort of thing which must be planned in advance, and before any new devices of any sort are introduced—whether they are in connection with search or otherwise—there would certainly be the fullest consultation. I doubt whether this is anything which one could really write into a Bill, and for the reasons I have given, I doubt whether it would be worth while putting in the provision that my noble friend suggests.
LORD TREFGARNE: My Lords, I am not entirely happy at that. Although I can accept that in regard to major airports, where there are any number of experts either working the search equipment or looking after the aircraft, nevertheless one can conceive of a situation where, at a much smaller local airport, the only person who is immediately available with the necessary knowledge is the man working the search equipment and he might well be unaware of the effects the equipment concerned is going to have on the aircraft equipment. That was the thought that really brought me to put down this Amendment. However, the fact that we have discussed this matter in your Lordships' House will, I have no doubt, come to the ears of the appropriate authorities, and for that reason I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 13 [Limitations on scope of directions under ss. 9 to 11]:
LORD BESWICK LORD BESWICK moved Amendment No. 17:
Page 12, line 33, leave out from ("direction") to ("shall") in line 35.
The noble Lord said: My Lords, when we considered this Bill in Committee we had great difficulty in getting the Minister to accept any additional words at all. We were told that it was quite unnecessary to add anything to the powers of the Secretary of State. Then the noble Lord had second thoughts, or his Government had second thoughts, and now we are almost overwhelmed by the additional words put down. In so far as it is possible to economise on words, I would be in favour of any Amendment which appeared to leave out something unnecessary. Frankly, I cannot

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see what these words which the Amendment proposes to leave out add to the Bill. The subsection reads:
"A direction (except in so far as it requires any building or other works to be constructed, executed, altered, demolished or removed) shall not be construed as requiring or authorising … anything which … would constitute an act of violence …".
Why do we not say that a direction shall not constitute an act of violence and leave it at that? The subsection goes on to say:
"… but nothing in this subsection shall restrict the use of force …"
So we are neither adding anything nor taking anything away by the words within the brackets, and if we could get the verbiage down I think it would make it easier to understand. I beg to move.
LORD DRUMALBYN: My Lords, with respect, these words are necessary, and the reason is a very technical one. The act of violence under Part II of the Bill is defined in wide terms and includes offences under the Criminal Damage Act 1971. For example, this means that any demolition of buildings or damage which may be caused in constructing a building would constitute an act of violence. We believe that it is important to have subsection (4) as a general limitation on the scope of directions which may be given, and also that the definition of an act of violence should be widely drawn. But this presents difficulties in relation to the construction and demolition of buildings and works, and that is why it has been necessary to insert the exception which the Amendment now seeks to remove. If the Amendment were accepted, it would be virtually impossible, as I understand it, to carry out any works at all that involve any kind of demolition, execution or even, possibly, construction.
LORD BESWICK: My Lords, what is the meaning of the words after the semicolon
"but nothing in this subsection shall restrict the use of force … or its use by any other person in the exercise of a power conferred by the following provisions …".
Can those include that of destroying, removing and demolishing?
LORD DRUMALBYN: My Lords, "the following provisions" referred to I think
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are the provisions relating to the powers of a constable to search—what was the old Clause 6 that has been transferred to a place that I cannot find at the moment.
LORD STOW HILL: My Lords, it is the same subsection.
LORD DRUMALBYN: My Lords, it was the old Clause 6, which has been transferred to Part III in the Supplementary Provisions. It is now Clause 17.
LORD BESWICK: My Lords, I still do not follow the noble Lord, but if he is satisfied I do not think we can add or take anything away. I remain convinced in the view that the words are unnecessary, but on the basis of what he said I withdraw the Amendment.
Amendment, by leave, withdrawn.
5.54 p.m.
THE EARL OF SELKIRK THE EARL OF SELKIRK moved Amendment No. 18:
Page 12, line 38, leave out ("apart from the direction").
The noble Earl said: My Lords, I beg to move Amendment No. 18. My arguments are the same as those of the noble Lord, Lord Beswick. I am moving to take out the words "apart from the direction". I do not know what they mean and it seems to me the clause would have exactly the same meaning if they were not there. As I understand it, the meaning is that no act of violence will take place except with regard to construction. How one performs an act of violence in construction, I do not know. Perhaps the noble Lord would look at the point, and also at the last sentence of the clause, because clearly it needs amending.
What is meant by "apart from the direction"? To me, it means that no act of violence will take place apart from those under the direction—in other words, if an act of violence is included in the direction, therefore it is permissible. There is an opposite explanation, which is difficult to follow, that "apart from the direction" cannot be an act of violence, or rather an act of violence cannot be an act of violence because no civil or criminal action may proceed under it. We might conceivably have two quite different meanings. I do not think it is important, but if we were to delete the words which I suggest, we should make

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the Amendment on page 12, to leave out "apart from the direction".
LORD DRUMALBYN: My Lords, I am told that this is essentially a drafting point, but that the words are put in to ensure that the direction cannot provide authority for a violent act within the definition of an act of violence in Clause 7 (2). May I give an example? If a direction required an airline operator to arrest anyone coming within 50 yards of his aircraft, the operator, if in fact he did so arrest someone, would have to establish that the arrest would be lawful even if there had been no direction; in other words, the direction does not create its own authority. The fact that there is something in a direction which might be interpreted as requiring an act of violence to be done does not authorise the doing of it.
THE EARL OF SELKIRK: My Lords, this is about as clear as mud. That means that if you instruct a man to arrest someone so that he does not get on the aircraft, then you must arrest him without the direction directing you to arrest him. I think we ought to look at this again. I see the point the noble Lord is making, but the words are extremely mystifying to me. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 14 [Operation of directions under Part II in relation to rights and duties under other laws]:
5.58 p.m.
LORD STOW HILL LORD STOW HILL moved Amendment No. 20:
Page 13, line 38, leave out subsection (2).
The noble Lord said: This Amendment really is rather in the nature of a probing Amendment and relates to Clause 14(2). If I may summarise that subsection, your Lordships will see that the effect of it is this. A direction has to prevail over any contract; it has to prevail in any principle or rule of law. Anybody who does anything pursuant to a direction is not to have an action brought against him in any court—no proceedings, neither civil nor criminal.
How far does that go? If one looks back at Clause 13 one sees nothing to prevent or restrict the use of force by
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a constable or by some other person in the exercise of a power conferred by the Act. Supposing quite unnecessary force is used. Is no action to lie against the constable or that other person? Supposing under the very general provisions of Clause 11(1) which the House has already discussed, someone is deprived of his liberty in circumstances, apart from this Bill, for which there can be no conceivable legal justification. He is so deprived of his liberty because a direction has been issued requiring that he is to be taken into custody, prevented from joining an aircraft, or something of the sort. Is the result to be that that person is to have no redress in any court of the land? He is not to be allowed to say, "The force you used was quite unnecessary; it has done me injury. You could have carried out the direction without the use of that unnecessary force, but you carried it out with a force which is quite unjustifiable."
Has a person who has been confined in some place by a constable or some other person for a quite unnecessary period of time as a result of a direction issued under Clause 11(1), to lie down under it? Is he to have no remedy at all in the courts of our land? If that is the effect of the subsection, it seems to me that it really is going a great deal too far. It infringes the extraordinarily important principles underlying our concept of personal independence and liberty.
My Lords, this clause is very widely drawn, and it seems to me that before a decision is reached upon it, the Minister should be able to give the House some explanation as to the limits of the complete indemnity which is conferred by the subsection on those Ministers who are to execute this direction. Because I submit that the clause is much too wide in scope, I beg to move this Amendment.
6.0 p.m.
LORD DRUMALBYN: My Lords, the noble Lord is perhaps of the opinion that the powers of direction go a good deal further than they in fact do. He talks of a direction requiring a person to be deprived of his liberty. I see nothing in the Bill which would give the Secretary of State any power to issue any such direction. If a person were found, on search, to be in possession of, for

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example, a weapon, then he would be committing an offence under the Act, and he could properly be detained. If a constable suspected, or had reason to suspect, under Clause 17 that a person had brought, or been responsible for bringing, a weapon or something of that kind into the aerodrome in his baggage, or to be carried on to the aircraft in some way or another, then again he would be guilty of an offence, and the constable would be entitled to arrest him. But there is no power on the part of the Secretary of State to direct that somebody should be arrested. The Bill itself contains the offences on which anybody could be prosecuted.
LORD STOW HILL: My Lords, may I interrupt to ask the Minister a question? The noble Lord says that there is no power to direct that a person is to be arrested. Will he say why the general words in Clause 11(1), of which I have already complained, do not confer that power?
LORD DRUMALBYN: My Lords, the noble Lord is referring to the words:
"requiring him to take … such measures for purposes to which this Part of this Act applies as are specified in the direction."
As the noble Lord has pointed out, this is qualified under Clause 13(4) as to acts of violence, including, presumably, arrest on a direction. This is something that a direction cannot do. It cannot require an act of violence of that kind.
For those reasons, I do not understand what the noble Lord has in mind here, or why he should want to leave out subsection (2). This subsection deals with the manner in which a direction is to take effect inside the United Kingdom. Its purpose is to ensure that in the United Kingdom, and within the limitations contained elsewhere in the Bill, the security measures required to combat any threat of violence against civil aviation, a threat which could affect millions of innocent people, passengers and air crews, are not frustrated or delayed, in these exceptional circumstances, by the normal and proper restrictions imposed by the law.
I admit that this is a strong measure, but the limitations make this subsection far less draconian than might appear when it is read in isolation. There are limitations contained in Clause 9(5) which require that only steps that are practicable
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and necessary should be taken. Clause 11(5), for example, prevents the giving of directions to search passengers or to modify aircraft. You do not give directions to search passengers; you give directions that passengers are not to be admitted on to an aircraft unless a search has been carried out, which is not the same thing. Again, there are the provisions in Clause 13(4) to which I have just referred.
In practice, I am advised that the only directions that are likely to be made which might override other Acts of Parliament are directions under Clause 11 to carry out works at aerodromes. Again, we hope that it will never be necessary to use these powers to override rules of law and contract, but circumstances could arise in which immediate action would be required. I know that, despite the limitations we have written in and the explanation I have given, this will be a difficult concept for the House to accept, but I hope all the same that noble Lords will agree that the very desperate nature of the cases with which we are seeking to deal requires very special measures when the delays of the law might be quite fatal.
LORD BESWICK: My Lords, I must say that the noble Lord is a wonderful advocate. I know few people opposite who can argue propositions quite so effectively as the noble Lord, Lord Drumalbyn. On the one hand, he is saying that here we may well be faced with a desperate situation, and that we must have the most complete powers. He described a little earlier on that we are here thinking in terms of an emergency, and that when an emergency arises it is absolutely essential to be able to do anything that we want. This is virtually the argument that the noble Lord has put hitherto. We are not disposed to argue against this. We say that if there is a genuine emergency the powers have to be at the disposal of the Secretary of State to deal with such an emergency. But suppose that there is an error of judgment; suppose that something is done which ought not to have been done, and suppose that we have a Minister who is not so reasonable as the present Minister, or indeed that there is a change of Government with new Ministers who are not nearly so nice and reliable as the present lot. Are there then to be no safeguards at all?

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It really is no use the Minister arguing that we are dealing with a person who may have something in his bag, or a person carrying a revolver when he ought not to be carrying a revolver. The powers contained here cover a much wider area than search for revolvers, or even the possibility of impeding someone going on an aircraft. They are very wide powers. When the noble Lord says that Clause 13(4) has a limitation on the use of violence, I must say that I do not follow this. The latter part of Clause 13(4) specifically says:
"nothing in this subsection shall restrict the use of force …"
Even though that may be some qualification in some cases, if it comes to a point where these wide powers have been wrongly used, it ought to be possible to go to a court of law for redress. If my noble friend agrees, I would think that this is an Amendment that we ought not to take back but one that we ought to press.
THE EARL OF SELKIRK: My Lords, if the Secretary of State cannot order an arrest, who can? Suppose he knows that somebody has a bomb, or that someone is determined to do damage at Heathrow: who is responsible? I have asked this question before and I want to know the answer, because these things happen. Only last weekend we had a case of a very desperate character. Who is in a position in the Government to take really stern action? It is no good passing this task on to a constable and saying that constables always do their duty; I am sure they do, but sometimes they want support in what may be a very desperate situation. The Minister has taken powers under this Bill, but I do not know whether he is covered or not. Apparently no proceedings will lie, whether criminal or civil. Perhaps action could be taken if desired. The other point which I shall bring up later, and which I should like the House to note, is this: this Bill may override any contract at all, and there is no provision whatever for any compensation for loss of contract. This action can take place at any aerodrome and affect anyone with freight, passengers, or anything else, and there is no provision whatever for compensation.
LORD DRUMALBYN: My Lords, with the leave of the House again, may I speak on this point of contract? Perhaps I am anticipating a little the Amendment that the noble Earl is going to move later. The point is really this. The chief kind of contract will be a contract for the carriage of passengers. In the normal way the contracts for the carriage of passengers issued by airlines provide an exclusion clause from the consequences of delay due to faults in the aircraft and so on, and also reserve the right not to admit anybody on to the aircraft despite the contract. It really does not carry the matter very much further to say that a direction may be given for the search of passengers as a condition of going on to the aircraft and for the delay or non-carriage of a passenger as a consequence. The airline itself, or the tourist agency can easily itself include conditions that are normally included, and these would be the conditions that would apply. That is the sort of contract that is involved. If there were no such exclusion clause or safeguard included in the contract the contract would be overridden by this provision, and surely rightly overridden, because what is being done is for the protection of the passengers themselves. There is no reason why they should be put in any better position for the delay of the aircraft or for not travelling than they would be if it were not possible for them to travel or they were delayed for any of the reasons for which provision is already made. Of course this kind of contract has to be expressed in broad terms in the Bill but it is limited all the time for the purposes of the Bill.
LORD BESWICK: My Lords, I am much obliged to the noble Lord for allowing me to interrupt him with a question. I take his point exactly up to there. If there was an emergency which you had to deal with, then contracts might well have to be overridden. But supposing there had been an error of judgment, as later events disclosed, would it not be right then to be able to start proceedings? In this subsection (2) it is specifically said that no proceedings would lie.
LORD DRUMALBYN: My Lords, may I come to that via the next point which my noble friend was raising?
THE EARL OF SELKIRK: My Lords, before the noble Lord resumes, may I just leave one thought in his mind? The noble Lord is talking about travel agencies and passengers. What if the noble Lord breaks open a warehouse, looking for something, and does not close it properly and a stealing takes place? Now this may be covered by insurance, but, quite frankly, this theft follows from the carelessness of the officers who are managing the aerodrome in not sealing it up properly. Those are the sort of things which can arise and someone's contract may go wildly astray. We can develop this point later, but I leave the thought in the noble Lord's mind.
LORD DRUMALBYN: My Lords, I should have thought that the normal provisions that apply to somebody who comes to read the meter would apply to a person at the airport. There is an obligation to leave the premises safe if one has broken into them and I think that would certainly apply.
I come to the next point. The noble Lord asked who is responsible. The Minister is responsible for giving the directions where directions need to be given—and I put that qualification in quickly. The people who are responsible after that are those who are appointed
to carry out the various functions. The Bill itself defines what the offences are and in the normal way in this country where somebody is guilty of an offence or is suspected of being guilty he can be dealt with. As I said, Clause 17 carries that a little further by enabling a constable to arrest on suspicion, and that sort of thing. I think both the noble Lord, Lord Stow Hill, and my noble friend Lord Selkirk are mistaken in thinking that the Secretary of State is going to say, in effect, "Get that man" and that that means that he is going to issue a direction that there is an emergency, bring into operation emergency proceedings and give any particular directions that may be necessary. The people who will be operating in the emergency will be people with powers to deal with the situation. As to the point which the noble Lord, Lord Beswick, raised, the position is the same as it is in any case where a constable or any person acting in the course of duty or acting on suspicion exceeds his legal powers or responsibilities.
6.17 p.m.
On Question, Whether the said Amendment (No. 20) shall be agreed to?
Their Lordships divided: Contents, 41; Not-Contents, 75.

CONTENTS

Bacon, B.

Hoy, L.

Shinwell, L.

Balfour of Inchrye, L.

Hughes, L.

Slater, L.

Beswick, L.

Jacques, L.

Stamp, L.

Blyton, L.

Janner, L.

Stocks, B.

Brockway, L.

Killearn, L.

Stow Hill, L.

Brown, L.

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

Taylor of Mansfield, L.

Champion, L.

Trefgarne, L.

Crook, L.

Maelor, L.

Watkins, L.

Davies of Leek, L.

Phillips, B.

White, B.

Douglass of Cleveland, L.

Popplewell, L.

Willis, L.

Foot, L.

St. Davids, V.

Wootton of Abinger, B.

Gaitskell, B.

Selkirk, E.

Wright of Ashton under Lyne, L.

Garnsworthy, L. [Teller.]

Shackleton, L.

Hale, L.

Shepherd, L.

Wynne-Jones, L.

Henderson, L.

NOT-CONTENTS

Aberdare, L.

Camoys, L.

Dudley, E.

Ailwyn, L.

Carrington, L.

Eccles, V.

Albemarle, E.

Cole, L.

Emmet of Amberley, B.

Alport, L.

Colville of Culross, V.

Essex, E.

Atholl, D.

Conesford, L.

Falkland, V.

Baldwin of Bewdley, E.

Cottesloe, L.

Ferrers, E.

Belhaven and Stenton, L.

Cowley, E.

Fortescue, E.

Berkeley, B.

Craigavon, V.

Gainford, L.

Brentford, V.

Daventry, V.

Gisborough, L.

Brooke of Cumnor, L.

Davidson, V.

Glasgow, E.

Brooke of Ystradfellte, B.

Denham, L. [Teller.]

Gowrie, E.

Brougham and Vaux, L.

Drumalbyn, L.

Greenway, L.

Grenfell, L.

Lyell, L.

St. Aldwyn, E. [Teller.]

Gridley, L.

Macleod of Borve, B.

Saint Oswald, L.

Hailes, L.

Mansfield, E.

Sandford, L.

Hailsham of Saint Marylebone, L. (L. Chancellor.)

Margadale, L.

Sandys, L.

Massereene and Ferrard, V.

Sempill, Ly.

Hawke, L.

Milverton, L.

Strathclyde, L.

Kemsley, V.

Mottistone, L.

Strathcona and Mount Royal, L.

Kindersley, L.

Mowbray and Stourton, L.

Lansdowne, M.

Napier and Ettrick, L.

Stuart of Findhorn, V.

Lauderdale, E.

Northchurch, B.

Thorneycroft, L.

Leicester, E.

Oakshott, L.

Vivian, L.

Limerick, E.

Onslow, E.

Waldegrave, E.

Lothian, M.

Rankeillour, L.

Young, B.

Lucas of Chilworth, L.

Ruthven of Freeland, Ly.

On Question, Amendment agreed to.

ROYAL ASSENT
6.25 p.m.
THE LORD CHANCELLOR (LORD HAILSHAM OF SAINT MARYLEBONE): My Lords, I have to notify the House, in accordance with the Royal Assent Act 1967, that Her Majesty has signified Her Royal Assent to the following Acts:

Atomic Energy Authority (Weapons Group) Act,

Housing (Amendment) Act,

Glamorgan County Council Act.

PROTECTION OF AIRCRAFT BILL [H.L.]
Report stage resumed.
LORD STOW HILL LORD STOW HILL moved Amendment No. 21:
Page 15, line 16, after ("person") insert ("acting in that behalf with his authority").
The noble and learned Lord said: My Lords, I can move this Amendment very shortly. It would not achieve much of a change in the Bill, but would make it much more tidy and more in conformity with our ideas as to the criminal law. Clause 15 provides that if somebody gets into an aircraft and it is found that in his luggage there is one of the prohibited instruments—say, a toy pistol, or a make-believe firearm—the onus is on the part of the owner of the luggage to show that he did not put it in his luggage, even although somebody else did. What I am saying is not wholly academic, because some time ago there was a case rather like that when two men planted something of the sort in the baggage of two perfectly innocent women. If somebody's luggage is found to contain a
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firearm, it should surely be upon the prosecuting authority which accuses a traveller of having imported that firearm into his baggage to prove it. I dare say it would be quite easy to establish a prima facie case by saying that it could not be in the baggage unless you put it there yourself, but that might not be true, as in the case of these two perfectly innocent women. So the onus should be upon the prosecution to show that the pistol, or whatever it was, was put there with the authority of, or by, the passenger.
When that is shown the passenger, under the opening words of the first three lines of Clause 15, is provided with a defence. He commits no offence against the criminal law if he can show—the onus of proof being upon him—that he had some lawful authority or reasonable excuse. Clearly, if somebody else could put a pistol in his baggage he would be able to show that without any difficulty. But in conformity with our general principles of criminal law, and with the onus of proof, the prosecution should surely, in the first place, have to show affirmatively that the person against whom a charge is brought under Clause 15 put luggage on the plane, and put in that luggage, or authorised somebody else to put in that luggage, the pistol or whatever it may be which is the subject of the charge. When that has been shown by the prosecution, it should then be for the accused passenger to say, "Well, that may be so, and it may be a fact that there was a pistol in my luggage, but I did not put it there and that is my reasonable excuse within the meaning of Clause 15." In my submission to the House, that is how the onus of proof should be divided. My Lords, I beg to move.
LORD DRUMALBYN: My Lords, the noble Lord is of course quite right, that this provision alters the burden of proof.

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The courts have held that a person does not have an article with him if he does not know it is there, whereas the purpose of this subsection is to treat a person as having with him anything covered by Clause 15 which is in his baggage, or which he causes to be brought into an aircraft or on to an aerodrome, whether or not he knows it is there. As the noble Lord says, it is open to him to say that he had reasonable excuse for its being there in that he did not know that it was there. But in circumstances of this kind, where it is a question of protecting the lives of people going in aircraft, I put it to the House: if there is a weapon of some kind in the baggage of a person or in property that is being carried at his instance on the aircraft, is it unreasonable for him to have to show that there was a reasonable excuse for him to have it there? I should have thought that, in circumstances of that kind—and they are very special circumstances—it is reasonable enough that the onus of proof should be on him to show that he did not know the thing was there. Otherwise, in every case, of course he will say that he did not know it was there, and it is a very difficult thing indeed to discharge the duty of proving that he did. In these special circumstances, I commend the provision in the Bill to the House. I think it is the right course to adopt.
On Question, Amendment negatived.
THE EARL OF SELKIRK THE EARL OF SELKIRK moved Amendment No. 22A:
Leave out Clause 15.
The noble Earl said: My Lords, I move this Amendment only because I could not otherwise speak on Report stage. I sought at first to try to find if there was a lawful authority which could be adequately explained, and I came to the conclusion that there was not. I take it, for instance, that a gun licence is not adequate as a lawful authority by itself; and I came to the conclusion that probably the only lawful authority would be if the police or members of the Armed Forces were carrying weapons. At least, that is my interpretation. But I wonder whether it would not be reasonable to have some suggestion that, if anyone wished to carry a toy pistol, or possibly a form of weapon, for some reason, he should show it at once and leave it in the hands of either the stewardess or
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some other person, or possibly have a lock-fast place within the aircraft itself where it could be kept. Because people do want to carry weapons sometimes, and it seems to be that, for the smooth working of this provision, it would be better to have some easy way in which a perfectly innocent person could carry a weapon.
The other point I should like to make is this. It says in subsection (1)(b):
"in any other aircraft at a time when it is in, or in flight over, the United Kingdom, …".
Why do we confine this to the United Kingdom? Have we not still responsibility in this sphere for a number of other places, such as Gibraltar, the Seychelles, Hong Kong, Brunei and, so far as I know, the Associated Territories of the Caribbean? Is any provision made for these at all, or do they not come into the general purview of a Bill of this character? I beg to move.
LORD DRUMALBYN: My Lords, I should like to have an opportunity to look into the suggestion that my noble friend has made, that there should be some method of surrendering one's weapons, or what look like weapons. In point of fact, I think this is often done. I believe that hostesses collect toy pistols and things like that and deliver them back at the end of the journey. But I should like to look into the possibility of some provision being made for that here. I should also like to consider my noble friend's second point. I am not myself quite clear what the situation is. I rather suspect that this provision may be included in some other Act of Parliament under the definition of "air space", but if that is not so I shall certainly wish to look into it very seriously.
THE EARL OF SELKIRK: All these cases come up subject to, I think, aviation law, so there may be other provisions in this Bill which should be considered.
LORD BESWICK: My Lords, may I ask the noble Lord to answer the question which I put to him at Committee stage and which he did not answer? Suppose somebody was coming to shoot at Bisley and brought a rifle with him, quite properly. How does he secure lawful authority if in a proper case he wants to be allowed to take some sort of weapon on to an aircraft with him?
LORD DRUMALBYN: My Lords, I cannot answer the noble Lord as to what authority he can show, but presumably he has some authority of some kind for being in possession of the weapon. This was certainly so at school, I know. I ought to write to the noble Lord on this point. In further answer to my noble friend, I now have a message from the Box to say that the Bill can be extended to the Colonies under Clause 24(2).
LORD TREFGARNE: My Lords, before my noble friend sits down, may I ask him whether he will consider the case, allied to the point made by the noble Lord, Lord Beswick, of when, for example, a Member of your Lordships' House wants to go shooting in Scotland and takes his shotgun on the flight up to Edinburgh? My noble friend may not be able to answer that question now, but perhaps he will think about it and let us know later.
LORD BALFOUR OF INCHRYE: My Lords, I raised this particular point at Committee stage, and I am disappointed—bitterly disappointed—that the Minister has not come here with the information at his fingertips. I pointed out to him then that if someone has a shotgun and he is asked What is your authority?", he has the authority of his shotgun licence, which enables him legally to have it. If you have your shotgun in a case, are you or are you not allowed to take it? Who does, or who does not, give you authority to put it in the luggage compartment of the aircraft? Please could we have a reply to that question?
LORD DRUMALBYN: My Lords, I cannot see any reason why the licence itself should not be lawful authority to take it. Of course, if there were an alert, or something of that sort, one can be quite certain that special attention would be paid to these things. But I do not think that the difficulty that my noble friend envisages can arise here. If a man has authority to be in possession of a gun, obviously he will want to take it with him in certain circumstances, and I cannot see for the life of me why he should not be allowed to do so.
LORD BALFOUR OF INCHRYE: My Lords, may I ask one further question? At Committee stage I asked whether a B.E.A. traffic officer would be able to
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give lawful authority. Can my noble friend tell me whether he would or would not? If he would not, who would?
LORD DRUMALBYN: I am sorry, my Lords; I did not quite hear what my noble friend said.
LORD BALFOUR OF INCHRYE: If I arrive at London airport with my gun, I have legal authority to have the gun, and it can be carried on the aircraft only with appropriate authority. Under this Bill, has the traffic officer got the necessary powers to give that authority or not?
LORD DRUMALBYN: My Lords, I would certainly think so. I should have thought that guns were carried under special arangements at the present time. You do not take your gun and put it underneath your seat. There are arrangements for carrying gulls, surely.
LORD BESWICK: My Lords, if there are arrangements for carrying guns, would the noble Lord, Lord Drumalbyn, be good enough to tell us what they are? Because that will probably be the answer to the question that I put. We are not here talking about having a lawful authority to have a gun. Any crook who was going to do damage on an aircraft would presumably be sufficiently far-sighted to provide himself with some forged authority for carrying a gun. This is not what we are talking about. What we are talking about is having authority to take a gun on to an aircraft. If there is some sort of procedure by which the noble Lord, Lord Balfour of Inchrye, can be assured that before he sets out for Scotland, he will have something in his hands which will be accepted as a proper authority for him carrying his gun with him, then we ought to know what that procedure is.
VISCOUNT MASSEREENE AND FERRARD: My Lords, I have taken rifles and guns on aircraft, and my experience has always been that they take the rifle or gun from you and place it in the hold of the aircraft. There has never been any difficulty, so far as I know.
LORD DRUMALBYN: My Lords, with the agreement of the House, may I say that I cannot see any difficulty here. There are two separate things. One is

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lawful authority and the other is reasonable excuse. If you have a licence, that is lawful authority; if you are going shooting, that is reasonable excuse.
THE EARL OF SELKIRK: My Lords, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 16 [Inspection of aircraft and aerodromes]:
LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 23:
Page 16, line 28, after ("any") insert ("aircraft").
The noble Lord said: My Lords, this Amendment deals with a point raised by my noble friend Lord Balfour of Inchrye in Committee on Recommittal. I am grateful to him for drawing attention to what was an inadvertent omission. The word "aircraft" should be inserted after the word "any" so that it will read:
"The powers conferred by subsection (3) of this section shall not include power for an authorised person to use force for the purpose of entering any aircraft building or works or entering upon any land."
My Lords, I beg to move.
6.42 p.m.
THE EARL OF SELKIRK THE EARL OF SELKIRK moved Amendment No. 24:
After Clause 16, insert the following new clause:
Parliamentary safeguards
".—(1) On or as soon as may be after the 1st of January, the 1st of April, the 1st of July and the 1st of October in each year the Secretary of State shall lay before each House of Parliament a report of any action he has taken under section 8, 9, 10 or 11 of this Act, indicating in particular whether any, and if so which, of the directions he has so given is still in force.
(2) If any direction given by the Secretary of State under section 9, 10 or 11 of this Act is in force as aforesaid, and he wishes it to continue in force beyond the last day of the current month of January, April, July or October, he shall lay before each House of Parliament, together with the report mentioned in the preceding subsection, an Order extending the operation of such direction for a further period of not more than three months after the end of the said month of January, April, July or October as the case may be: and any such Order shall be made by Statutory Instrument which shall be annullable by a resolution of either House of Parliament.
(3) Any direction made under section 9, 10 or 11 of this Act which is not extended by such an Order as aforesaid shall expire at the end
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of the said month of January, April, July or October as the case may be."
The noble Earl said: My Lords, we have now been discussing this very remarkable Bill for about two hours. The outstanding feature of the Bill, which is asking for unprecedented powers, is that it has no association with Parliament whatsoever. There is no provision of any kind that any Minister acting under the Bill should at any point whatever report to Parliament, let alone ask authority from Parliament for what he is doing. My Amendment really does two things. First, it says that the Minister will regularly report to Parliament on what action he has taken—particularly under Clauses 9, 10 and 11, by the provisions of which he can break any Act of Parliament he likes for the purpose of the Bill. Noble Lords may smile, but the purpose of the Bill includes any action taken at any aerodrome—or any potential action—so that anyone who merely looks like a ruffian comes within the general purview of the Bill.
The noble Lord was good enough to tell me this. He said that the Minister by a telephone message could bring any aerodrome to a standstill in an emergency. My Lords, what of this emergency? It is possibly a figment of his imagination; though it may be a reality—but it is purely in the Minister's mind. Not one word about it appears in any part of this Bill. The Minister can in fact create what I might call martial law at any time and not have to tell Parliament a word about it or have any obligation to get authority for it. And he can continue this martial law, according to the Bill, indefinitely, over any length of time he likes.
I ask this question. Do we really want to give any Minister permanent power to do this on a statutory basis? If I may say so I think it is an excessive power and I think it is quite unnecessary. My Amendment makes no alteration to the emergency powers: the Minister can still do anything he likes; but he must report from time to time what he has done under the operative Act. If he wants a direction to continue he must put forward a Statutory Instrument which would incorporate what is required so that it will become in a sense a permanent way of handling these things.
We do not know what a direction is. What we know is that it need not be written. That is quite clear from the actual terms of the Bill. I have used the words "telephone message". The Minister has not contradicted me. He says that any direction, a direction which can cut through an Act of Parliament, can break a contract, can avoid any rule of law, can be done just like that. I think that we are going a very long way. It is true that he cannot authorise an act of force but he can (the Bill says so) encourage a constable to arrest anybody or to use firearms—admittedly on his own responsibility—and he can be sued for doing so. But the Minister can give encouragement and something that comes very close to instruction.
When the Minister, the noble Lord, Lord Drumalbyn, opened the debate on Part II of the Bill he said that it was unprecedented. I think we would all agree that it is unprecedented. Nobody has any doubts about that. He went on to say that it will be used in an emergency and it will be used sparingly. There are no words to that effect included in any part of the Bill. We have tried to insert such provisos; the Minister will have no part of our efforts. I now ask that he should go one step further. Will he undertake to make some arrangement to report these actions to Parliament so that Parliament shall have some idea of what use has been made of this extraneous power? My Lords, if any lesson recurs in political history, it is that democracy surrenders powers when it is frightened. We are frightened. We surrender powers, powers that will be used for all sorts of purposes not envisaged in our debate to-day. This is history happening all over again. I ask that some provision be made for a proper report to Parliament. In that sense I beg to move.
LORD DRUMALBYN: My Lords, I must confess that my noble friend astonishes me. He says that he fears that history shows that these powers will be used for all sorts of purposes. If they were used for all sorts of purposes they would be going against the provisions that we are now trying to put through Parliament; because the purposes are closely limited to protection against actions of violence. There is no question of using these powers for all sorts of purposes. My
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noble friend has been a very distinguished First Lord of the Admiralty. I wonder what he would have thought had he been told to report on the security arrangements of the Admiralty to the Houses of Parliament every three months.
I do not understand my noble friend's anxiety on this score. It may be that there should be the usual method of reporting to Parliament. No doubt that is what will happen if public attention is directed towards any use of these powers. No doubt reports will be given to Parliament. There will be questions about the security measures taken. If there is anything like a threat of violence one would hope that those questions would be put and that Parliament would keep us up to the mark on it. But the idea that we should have to disclose our security arrangements every three months is a fantastic one.
I put it to my noble friend that he is going too far. How could you give any indication of the sort of direction which is given without revealing your security arrangements? How could you do that? There are lots of security arrangements now operating; they are good, they are voluntary. Why, because we have to take powers, should we then have to reveal the whole of these security arrangements? Let us take another aspect of the matter. Let us suppose you wanted to find out what the security arrangements were. All that you would have to do would be to organise a hoax and get knowledge of the direction. You then know what the security arrangements are and can go ahead with whatever you wanted to do. I think that my noble friend is being (shall I say?) too squeamish in this matter.
There are real, serious threats in the world now and we ought to take measures to deal with them. I am not out of sympathy with the idea that Parliament should be informed, broadly, of what is going on, but the idea that every direction should be reported and that we should say whether it is necessary to keep it on for another month, and bring it to an end at the end of four months, as I think it works out, would be rather absurd. I hope that my noble friend will not proceed with this Amendment because I think it would be unworkable. We are not here dealing with counter-inflation or something of that kind, but

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with a threat which may arise from time to time and totally unpredictable, against which we must have constantly secret provisions in order to deal with it.
LORD BESWICK: I congratulate the noble Lord, Lord Drumalbyn. He really has made a good case—and I mean that this time. On the other hand, I think he swept aside the argument of the noble Earl, Lord Selkirk, a little too readily. The noble Lord's honourable friend the Minister is arming himself with considerable and wide powers. Although it may well be that some of those powers will have to be exercised secretly, it is also the fact that the powers can affect millions of people. The number of people passing through aerodromes to-day is very great and to speak of millions is not an exaggeration. Moreover, there are hundreds of thousands of people who work within the confines of aerodromes over which the noble Lord's honourable friend is proposing to give himself power. In the circumstances, it is not unreasonable to expect that some report should be made to Parliament. If the noble Lord, Lord Drumalbyn, says that every three months is too regular, what about every year? Would he agree to that? Ought he not to have been a little more forthcoming in his reply? If it is not feasible to give every detail of everything which is done, could not something be reported?
Could we not have some report in more general terms and the sort of details that the noble Lord was talking about? In other words, I hoped that in reply to the case put forward by the noble Earl, Lord Selkirk, it would have been possible to say that maybe in this Amendment too much was being asked, but that it was recognised that Parliament was concerned with this matter and something would be done to give some sort of satisfaction in respect of the very proper fears which the noble Earl has expressed.
LORD DRUMALBYN: My Lords, if I may speak again, I said that I understood my noble friend's anxiety, but I also said that I did not see any chance of our accepting the Amendment in anything like its present form. It would be extremely churlish of me not to say that I would look at this matter again and take it up with the Minister for Aerospace who is responsible. I should like to do that, but I must say that I do it
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without commitment. I should not like to raise the hopes of my noble friend, or of the noble Lord, Lord Beswick, too high. There is always doubt about the best way of expressing accountability to Parliament. It is worth looking at from that point of view, I agree. These are wide powers, but I should not like to commit my honourable friend to any specific provisions or to say that anything would necessarily be written into the Bill. With the recognition that I am not out of sympathy with the need to keep Parliament informed about this subject, I hope that my noble friend will be willing to withdraw the Amendment.
THE EARL OF SELKIRK: My Lords, it is clear that the Minister is completely out of sympathy with the idea of keeping Parliament informed. There is no provision for that in the Bill, and clearly there ought to be. The example that the noble Lord gave about the Admiralty could hardly have been worse. If there had been more questions about security at the Admiralty when I was First Lord a lot of things might have happened that did not happen. The Government are taking immense powers which they wish to hold in secret. I think it completely wrong and I do not propose to withdraw the Amendment.
On Question, Amendment negatived.
Clause 18 [Penalties in connection with exercise of powers under Part II or under s. 17]:
THE EARL OF SELKIRK THE EARL OF SELKIRK moved Amendment No. 25:
Page 17, line 40, after ("or") insert ("without reasonable excuse")
The noble Earl said: My Lords, there is a curious distinction between Clauses 9, 10 and 11 which we have discussed. One enables the accused to make an explanation about why he has refused a reasonable excuse and the other does not permit that to be a reasonable excuse. I should be grateful if the noble Lord would explain the distinction between these clauses. There may be a good reason but I do not see it. There are slightly wider powers in Clause 11 than in Clauses 9 and 10, but basically they are the same.
LORD DRUMALBYN: My Lords, I will endeavour to give my noble friend

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the explanation he seeks. It is true that a defence of reasonable excuse is provided in subsections (1) and (3) of this clause and in respect of refusal or failure to comply with the requirement under Clause 8 or Clause 16(2)(b) or with the direction under Clause 16. This is because it is conceivable that the person concerned may be unable to provide the information requested under Clauses 8 and 16(2)(b) or to fulfil a direction under Clause 11. In such circumstances we believe that he should be able to offer reasonable excuse as a defence. Because of the nature of the directions which could be given under Clauses 9 and 10 we consider the defence of reasonable excuse would not be appropriate.
Clause 9 can require an aircraft operator to take all such steps as are practicable and necessary not to cause or permit persons or property to come into his aircraft or to modify his aircraft. There cannot be a reasonable excuse for not taking all such steps as are practicable and necessary. If, in the case of searching, he does all that can be done to prevent entry, he will not have failed to comply with the direction. With regard to modifying aircraft, in addition again to taking such steps as are practicable and necessary Clause 9(3) requires the Secretary of State to inform the Civil Aviation Authority of any proposal for modification and to take account of the Authority's advice. It is implicit in this that consultation will take place which must inevitably involve the operator. In the case of Clause 10 the aerodrome manager is required only to "use his best endeavours" to ensure that searches are carried out. It seems to me that there can be no reasonable excuse for an aerodrome manager not to use his best endeavours. My Lords, I hope that I have made clear to my noble friend the distinction that the Government see between the two sets of cases and that he will agree to withdraw his Amendment.
THE EARL OF SELKIRK: My Lords, I thank the noble Lord for that explanation, and I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 20 [Compensation in respect of certain measures taken by aerodrome managers]:
7.0 p.m.
LORD STOW HILL LORD STOW HILL moved Amendment No. 26:
Page 18, line 34, at end insert—
("A direction under section 11 of this Act requires any measures to be taken consisting of the direction, execution, alteration or removal of a building or other works on land either within or outside an aerodrome, or where").
The noble and learned Lord said: My Lords, the object of this Amendment is to give a right of appeal against certain directions. It is part of a pattern of Amendments, the others being Nos. 27 and 28. I will seek to deploy the argument in support of all three Amendments. It is now common ground that a direction under Clause 11 can require measures to be taken for the construction and execution, demolition or removal of the building.
Clause 20, read with the Schedule, gives a right to compensation to any person affected if the result of carrying out the direction causes a diminution of the value of land in which he has an interest. The Amendments I bring to the notice of the House seek to extend that slightly by conferring a right of appeal against the direction itself. I will not go into the technicalities of the changes of wording proposed by Amendments Nos. 26 and 27, but if your Lordships would be so kind as to look at Amendment No. 28, your Lordships will see that the persons affected, or likely to be affected, by a direction which relates to the construction, execution, alteration, demolition or removal of a building or other works is to have a right of appeal to the Lands Tribunal. The Lands Tribunal, if satisfied that the direction is unnecessary or unreasonable, or otherwise unjustifiable or oppressive, can cancel the direction or amend it, or make it subject to conditions, and make such other order as seems just in the circumstances.
This Amendment seeks to invest the Lands Tribunal with the power to deal with appeals of this kind. Maybe other tribunals would be more suitable, but the Lands Tribunal is chosen because it is to the Lands Tribunal that, under the

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provisions of the schedule that goes together with Clause 20, the owner of land the value of which is affected by carrying out the direction has to go. It was thought convenient that if the Lands Tribunal deals with questions of compensation, it should be that same tribunal which is to be empowered to allow an appeal against the direction itself.
My Lords, I would venture respectfully to submit that the grounds which are set out in Amendment No. 28 are suitable grounds. The appellant would have to satisfy the Lands Tribunal that the direction in the circumstances was unnecessary or unreasonable or otherwise unjustifiable or oppressive. It would seem, so I would submit to the House, quite unreasonable that a person affected by such a direction who could satisfy the court that it is, in the terms in which I have described it, an unfair direction should have no remedy by way of appeal enabling him to get the direction cancelled or altered. It is to give him just that appeal that these Amendments are put on the Marshalled List. It is submitted that without the right of appeal the provision as to compensation may be a quite inadequate form of relief. I do not wish to repeat what I said earlier, but I would again make the distinction between an emergency measure and an emergency which is not of an emergency character. Clearly a measure which requires a building to be destroyed or constructed cannot be a measure which comes within the category of emergency measures. It takes time and it takes thought as to whether a direction requiring a change of this sort is really necessary or justifiable. It cannot be the case that it could be so urgent to demolish or construct a building that there cannot be reasonable time for an appeal with regard to direction to be heard. I respectfully submit to the House that this is a necessary addition to the Bill in order to make it fair in its operation as between the Executive and the subject. I beg to move.
LORD DRUMALBYN: My Lords, I must confess that I do not quite understand the purport of Amendments Nos. 26 and 27. I tried to work these out, but failed to understand how they fitted in. However, I understand the general intention to be that they pave the way for Amendment No. 28 and provide for an appeals procedure. I am not in the
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slightest ashamed of having to repeat the assurances that we wish to maintain a voluntary system of security, and that we are determined to use the powers sparingly and with care and responsibility. There is only one reason for this part of the Bill, and that is the protection of our citizens, whether they be airline passengers or air crew, and foreign visitors against violence. We hope that we shall never have to use the powers, but we must be prepared.
I take the noble and learned Lord's point that he wants to distinguish between the emergency and the preparation for the emergency, but I am not at all clear how this would be done by the Amendment. If I am right about that, it would mean that the Amendment strikes at the heart of this Part of the Bill. Even although in the Schedule it is referred to on the question of compensation, it seems a curious procedure to place before a body which is primarily concerned with valuation the responsibility for adjudicating on the Secretary of State's decisions and, to all intents and purposes, to supervise his policy in regard to security. This is what it would mean. It would be the Lands Tribunal that would have to decide whether it was necessary and reasonable, or unnecessary or unreasonable, to carry out a particular direction. Whatever form of appeal might be necessary, I should have thought that the Lands Tribunal was hardly the body to do that. I should have thought that it would have taken the view that where the matter is one of security, and possibly of tactical security, if I may put it that way, the Lands Tribunal would say, "We have nothing to say about that", and they would almost be bound to take the view of the Secretary of State as to the necessity for doing it. The mere fact of going to appeal in this way would simply involve delay, and might have even worse effects.
I am not saying that it may not be possible to arrange some way of questioning a decision of the Secretary of State. But I must point out again that the way in which that will be done is through consultation. No doubt in the form of preparing for an emergency, the plan to be adopted will be, as is now the case, a matter for the security committee on the airport itself, subject to the general directions that come down from the

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National Aviation Security Committee, of which there is a Department of Trade and Industry chairman. It is only in the last resort, where voluntary agreement cannot be reached, that a direction would be given at all. The position would surely be that there was an agreement in the Security Committee that something needed to be done in the way of construction and the person immediately affected objected because of his own personal interest.
I think we must accept that where the public interest is at variance with private interest in matters of considerable importance every attempt would be made first of all to reach agreement. It is only in cases where everybody was absolutely convinced that this was necessary that the direction would be given. Where it was given, I should have thought that in such a case the public interest should override the private interest. I do not know of any further appeal which would be useful in such circumstances, but I am quite certain that the Lands Tribunal would not be an appropriate body.
LORD BESWICK: My Lords, it seems to me we have a good deal in common with the noble Lord, Lord Drumalbyn. He cannot understand the words we put down, and we cannot understand words that he puts down, so we get along quite well. There is a principle here. It may well be that the drafting is not perfect—I can quite understand that this may be so—but the principle is one of some substance and I should have thought that the House as a whole, having listened to the arguments which my noble friend put, would agree with him. It is said by the noble Lord that the powers will be used sparingly and responsibly. We are not concerned in this House with whether powers are used sparingly or not; we are concerned with the powers themselves. In the future they may be used in one way or the other, and it does not matter at all how many assurances are given that the powers are to be used sparingly if in future under a different Government the powers are abused. We in these Houses of Parliament are supposed so to arrange the wording that we can ensure it is not possible to abuse the powers.
Again, my noble friend made absolutely clear that we are not here concerned
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with a Part I emergency—in other words, something which requires immediate action. We are concerned here with something which inevitably will take some time. The erection or the demolition of a building will not be carried out overnight or even necessarily in a week, so we are not asking for anything that is going to delay the implementation of security measures unreasonably. In those circumstances I should have thought that the possibility of appeal would do much to ensure that powers would be used sparingly and responsibly. If the noble Lord is able to assure us that the principle of appeal can be put into the Bill in some other form, all right; we will listen to him; but if he is not going to give that kind of assurance I think we should again divide the House.
LORD DRUMALBYN: My Lords, with the leave of the House, it would be foolish of me to say that we would not be prepared to look at this. I do not think the noble Lord would really expect me to say at this stage that I accept the principle and will introduce an Amendment. I hope he will be content with my assurance that we will look at this matter very seriously indeed to see whether there is some way in which we can meet the point he has made.
LORD BESWICK: My Lords, I seek leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 21 [Reimbursement of expenses incurred for purposes to which Part II applies]:
7.15 p.m.
LORD TREFGARNE LORD TREFGARNE moved Amendment No. 29:
Page 19, line 17, leave out ("may") and insert ("shall").
The noble Lord said: My Lords, this Amendment is an attempt to further my own Parliamentary education and to seek a little educidation. To my simple mind, the clause as written imposes no obligation on the Secretary of State to reimburse the moneys described in the clause. It seemed to me better that we should write it in, as my Amendment suggests, and say:
"The Secretary of State with the approval of the Treasury shall, out of monies provided by Parliament, reimburse to any person …".

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I will not go on. This is a simple matter. There may be a good explanation as to why my Amendment should not stand, in which case I shall be glad to hear it.
LORD DRUMALBYN: My Lords, the first point is that "may" is the usual word that is put into a provision for a Government to make payments. I think in any case that where we are providing for the Government to reimburse the cost of aviation security it is more appropriate to give some latitude in this matter. But I hope my noble friend will take comfort from the fact that the Government are already making a large contribution to this by meeting the cost of British and overseas airlines in searching passengers and baggage at airports. Having made this notable contribution to the problem, I think perhaps it would not really be quite proper at this time, and particularly in this place, to seek to tie the Government in the way the Amendment proposes on a matter which is essentially one for another place. I may say that the Amendment as drawn would not commit the Government very much because it would still have to be enabled to pay only part of the expenses—and that might be a very small commitment indeed. That answer of course is a rather technical one, but the intention is in fact to provide for these payments to be made at the present time, and that is what is happening at the moment.
LORD TREFGARNE: My Lords, I fear that my Parliamentary education has got not one step further. However, I do not want to establish a precedent and, as my noble friend says, it is really a matter for the other place. Having ventilated this question, I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
THE EARL OF SELKIRK THE EARL OF SELKIRK moved Amendment No. 30:
Page 19, line 33, at end insert—
("(3) The Secretary of State with the approval of the Treasury may also, out of monies provided by Parliament, reimburse to any person any loss or expense incurred by that person and arising directly out of any direction given by the Secretary of State under sections 8, 9, 10 or 11 of this Act.")
The noble Earl said: My Lords, I beg to move this Amendment. Its purpose is to give the Government the opportunity in certain circumstances of recompensing
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people, who are neither operators of aircraft nor managers of aerodromes, who may suffer loss through directions given by the Secretary of State. This argument came up earlier in the discussion and I will not pursue it further now, except to say this. Supposing a direction demands that some building be searched, some boxes be opened or some damage done, and supposing the manager of the aerodrome refuses to rectify the damage he has caused as a result of the direction he has received from the Secretary of State. Clause 14(2) reads:
"… accordingly no proceedings (whether civil or criminal) shall lie against any person in any United Kingdom court by reason of anything done or not done by him or on his behalf in compliance with such a direction."
That means the man whose warehouse or property has been damaged as a result of the direction given by the Secretary of State has no remedy whatever. It may not happen often, but I am suggesting that Parliament should take powers to offer remedies in specific cases.
LORD TREFGARNE: My Lords, I rise to support my noble friend in his Amendment. There are undoubtedly a number of situations that spring to my mind which could cause a substantial loss to third parties, and which ought to be the subject of some compensation. Only recently I was asked to carry liquid nitrogen in specially constructed containers in an aircraft. Had the Secretary of State directed that those containers should be opened for inspection, all the liquid nitrogen, worth thousands of pounds, would have been lost, and the whole purpose of the exercise nullified. I suppose that the carrier in that case would have been liable for the loss of the nitrogen. He also would have had no redress under the terms of this Bill as it is presently drafted. I hope that the noble Lord will be able to give us some assurance in cases like that.
LORD DRUMALBYN: My Lords, I am afraid I cannot give an assurance, but what I can do is to look at the case made by my noble friends. The case that is being made is a consequential loss rather than a direct loss owing to compliance with a direction. I should like to look at that point to see what can be done. It has gone rather farther than I personally had contemplated.
LORD BESWICK: My Lords, the noble Lord. Lord Drumalbyn, is not in the habit of giving very firm assurances. I hope that he will do his utmost to go so far as he possibly dare towards an assurance in this particular case. This example of liquid nitrogen had not occurred to me, but I can think of all kinds of possibilities of damage to quite innocent third parties. It ought to be possible to see that they are provided with some compensation, if they can prove their case. I hope that the noble Lord will be able—if not to assure his noble friends—to give a feeling that he really is serious on this occasion and something will be done at a later stage.
LORD DRUMALBYN: My Lords, as the noble Lord will understand, I am not in a position to give an absolute assurance on this matter, but I will undertake to look at it seriously.
On Question, Amendment negatived.
Clause 23 [Interpretation]:
7.22 p.m.
TILE EARL OF SELKIRK TILE EARL OF SELKIRK moved Amendment No. 31:
Page 20 line 22, leave out from ("aircraft") to end of line 26 and insert ("which lands or takes off from an aerodrome in the United Kingdom for hire or reward.")
The noble Earl said: My Lords, this Bill deals with two types of aircraft: those registered in this country, and those operating in this country. In Clause 23 one finds a definition which includes words that I do not understand. One is the word "allocated", and the other is the phrase "in exceptional circumstances I suggest that it would be better to have in this Bill words which are comprehensible. I have modestly suggested words which I believe are generally understood, and I should be grateful if the noble Lord would consider it wise to have in the interpretation clause an interpretation which is generally understandable.
LORD DRUMALBYN: My Lords, a definition not only has to be capable of being understood but also has to be effective in what it seeks to achieve. This is not easy. The reference to
"… being allocated for use on flights …"
is required to ensure that an overseas airline operator who is operating air ser-
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vices to and from the United Kingdom can be served with a notice under Clause 8 seeking information about security procedures, despite the fact that he has no aircraft actually in the United Kingdom at the time. Under the Amendment a notice requiring information could not be given unless there was an aircraft within the United Kingdom. The reference to
"… otherwise than in exceptional circumstances …"
is intended to exclude aircraft which land and subsequently take off in the United Kingdom, but which apart from exceptional circumstances would not have Come to the United Kingdom. For example, over-flying aircraft which might land because of mechanical trouble, or aircraft diverted here from the Continent because of bad weather. We did not think that any directions need or should apply to aircraft in such circumstances. It is for these reasons that the definition is phrased in the way that appears in the Bill.
THE EARL OF SELKIRK: My Lords, the noble Lord has to operate this Bill, not me. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 25 [Short title and commencement]:
7.27 p.m.
LORD BALFOUR OF INCHRYE LORD BALFOUR OF INCHRYE moved Amendment No. 32:
Page 22, line 41, at end insert—
("(3) This Act shall continue in force for the period of three years beginning with the date of the commencement of this Act and shall then expire unless Parliament from time to time determines, by affirmative resolution of each House, that it shall continue in force for a period of one year beyond the date on which it would otherwise expire.").
The noble Lord said: My Lords, the purpose of my Amendment is simple and direct: the noble Lord, Lord Drumalbyn, has fought tenaciously for the retention of the powers contained in this Bill. The purpose of this Amendment is to prevent the Executive having as a permanent part of our law the extreme powers proposed, which we fully admit are necessary for an emergency. There is no need for me to recapitulate the unprecedented powers. The noble Lord, Lord Drumalbyn, has admitted that this is a

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strong measure with powers to override contracts, rules of law, Acts of Parliament, planning, to demolish or remove buildings, erect buildings, or for the various purposes set forth in the Bill.
No one questions this need in an emergency, but there is a difference between the exercise of powers for an emergency and having these powers as a permanent feature on our Statute Book. The noble Lord, Lord Drumalbyn, said that these are only background powers, and that the voluntary processes for security will be carried out and continued as hitherto. But this Bill gives statutory authority to these exceptional powers for emergencies. As the noble and learned Lord, Lord Stow Hill, said the other day, Ministers can act oddly. In column 423 on February 26 he gave an example of what might happen. As a good Parliamentarian—I hope that I may make that claim, and I hope that the same description may be applied to Members on all sides of this House—I resist the Executive having these powers, and wish to ensure that Parliament can have a chance of reviewing these powers, and not allow for the Bill to be permanently on the Statute Book.
My proposal does not limit the exercise of the powers in an emergency; it does not limit the extent of the powers. It seeks to impose a time limit on them so that Parliament can look at them again to see how they have worked, whether any improvements are necessary, and to look at the powers again in the light of conditions which may be existing three years from now. We all hope that the emergency which we are facing at the present time will have passed. If it has not, Parliament can continue the powers; if it has, these unprecedented powers should not continue in the hands of the Executive. My Amendment is a reasonable proposal which I hope will commend itself to the House on all sides, and I hope that it will be accepted by Her Majesty's Government as something which is in accord with the spirit of Parliament. I beg to move.
LORD DRUMALBYN: My Lords, I would not for a moment contest that my noble friend's Amendment is a reasonable one on certain assumptions, but it is the assumptions that we have to look at. The assumption must be that it would be right for the duration of this Bill, when it
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becomes an Act, to be fixed for three years, and thereafter for it to be extended from year to year by Affirmative Resolution of each House. That course would be justified by the threat of hijacking and other acts of violence against civil aviation. It is not possible to say that the threat is likely to end in three years' time or that there will be no need to retain these powers thereafter. Nor would it be appropriate, with a Bill like this, to continue it for ever by an annual Affirmative Resolution of the House. The tendency generally is in the opposite direction: that there are annual renewals and eventually they pass into permanent legislation.
But there is also a technical reason why this would not be an appropriate proposition. The main and original purpose of the Bill was to enable us to become signatories to the Montreal Convention for the Suppression of Unlawful Acts Against the Safety of Civil Aviation. In order to withdraw from that, we should have to give six months' notice. One might get into a peculiar situation if one had to give six months' notice of withdrawal and then we were going to continue by Affirmative Resolution from time to time. The two simply do not match. If you are going to have an Act giving authority to what is laid down in an international Convention, then clearly you must have an Act which will remain on the Statute Book until the time when you feel you can no longer adhere to that Convention (if that ever should arise), and then you can repeal the Act.
To continue in this curious, nebulous, half-way manner would clearly not be a practical proposition. I entirely understand the view expressed by my noble friend on this subject but I do not think it is the best way to proceed. It is conceivable, of course, that the present emergency will not last as long as three years; on the other hand one cannot say that it will last only for three years or that it will be appropriate in the circumstances, when the three years come to an end, to renew it year by year. It is much better to proceed in the ordinary way and simply pass the Bill as it is and, when the Act is no longer needed, to repeal it.
LORD TREFGARNE: My Lords, before the noble Lord, Lord Balfour,

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comes to withdraw or to press his Amendment as he decides, I should like to give him some support. I feel that there are many problems in connection with this Bill which we ought not to pass into a permanent feature of our legislation. The noble Lord, Lord Drumalbyn, has said on many occasions during this stage and the preceding stage that we are faced with an extraordinary security situation and we have to take extraordinary measures and that is the reason for Part II of this Bill. The misgivings which the noble Lord, Lord Balfour of Inchrye, and others have about the Bill and which no doubt have led him to table this Amendment relate to Part II of the Bill and not to Part I. Part I discharges our obligations under the Montreal Convention; Part II does not seem to have anything to do with the Montreal Convention. Indeed, it was only presented to us after we had considered the first Part of this Bill. I am reluctant to see the Bill become a permanent part of our legislation without some means of Parliamentary scrutiny at the expiry of what we now believe to be a state of emergency. I do not know whether the noble Lord, Lord Balfour of Inchrye, will press this Amendment, but he will have my support if he does.
LORD BESWICK: My Lords, I still have my doubts about allowing this Bill to go forward without any further control on the part of Parliament, apart of course from the possibility of repealing the Act. Very wide powers are being taken here and moreover their importance will lie in the way they are used. That is the aspect of the matter which troubles us. Not once but ten or a dozen times the noble Lord has assured us that they are going to be used sparingly and with responsibility. It may well be that this is how it will work out and everybody will be quite happy, in which case no doubt at the end of three years Parliament would approve the Affirmative Order and the power would be retained. When the noble Lord, Lord Drumalbyn, speaks about the ratification of the Montreal Convention he has a point, and in so far as we need these powers to enable Great Britain to ratify the Convention I think it would he unreasonable to expect an Affirmative Order each year to maintain those powers. So a doubt still remains in my mind.
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I do not know what the noble Lord, Lord Balfour, is going to do, but I believe that in one way or the other we must have some assurances that so far the noble Lord, Lord Drumalbyn, has failed to put over.
LORD BALFOUR OF INCHRYE: My Lords, the noble Lord, Lord Drumalbyn, certainly has a point which had not occurred to me on the Montreal Convention issue; nevertheless I still dislike, and I think the majority of your Lordships dislike, the Executive's having these powers as a permanent part of our Statute law. If I withdraw my Amendment it will be with the knowledge, which I hope has been conveyed to the Minister from every side, that we very much dislike what the Government have been forced to do; that we very much dislike any Government's having the powers to override Parliament and to do what is contained in this Bill. If we are forced to digest this very unpleasant political meal, let the Minister know that we ache very much internally as a result of his forcing it down our throats. I hope that in the period between now and the time the Bill passes into law there may be some new thought as to whether Parliament could not have some limitation of time on the functioning of this Bill when it becomes an Act. The drafting was impeccable. It may not be appropriate, but it was impeccable, because it was taken from the 1965 Rhodesia Act. An annual review may not be appropriate, but it might nevertheless improve upon the 1965 Rhodesia Act and bring in something new before the House finally parts with this Bill. With those words I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD TREFGARNE LORD TREFGARNE had given notice of his intention to move Amendment No. 33:
Page 22, line 41, at end insert—
("(3) This Act shall cease to be in force three years after the date of commencement.")
The noble Lord said: My Lords, clearly most of what could be said on this point has already been said and I do not propose to take the matter further. I am most anxious that the Government should think about the matter further. Clearly this Amendment has the same defect as that moved by the noble Lord,

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Lord Balfour of Inchrye, in that it does not allow for the problems created by the Montreal Convention. I shall wish to raise this matter again at Third Reading.

INSURANCE COMPANIES BILL [H.L.]
7.40 p.m.
THE PARLIAMENTARY UNDERSECRETARY OF STATE, DEPARTMENT OF TRADE AND INDUSTRY (THE EARL OF LIMERICK): My Lords, I beg to move that the House do again resolve itself into Committee on this Bill.
Moved, That the House do again resolve itself into Committee.—(The Earl of Limerick.)
House in Committee accordingly.
[The EARL OF LISTOWEL in the Chair.]
Clause 11 [Grounds on which powers are exercisable]:
On Question, Whether Clause 11, as amended, shall stand part of the Bill?
THE LORD CHANCELLOR: Before my noble friend speaks may I intervene, partly to apologise for not having been present on the previous debate—but I assure the Committee that I have studied what took place with as much care as I am capable of—and because I could not help noticing that at the close of the proceedings last time the noble Lord, Lord Diamond, who then spoke for the Opposition, gave this advice to the Committee. He said:
"The debate has been very valuable and it seems to me that it would now he appropriate for us all to reconsider the various well-informed and well argued views that have been put forward, and return to this matter at a later stage. On that basis, I do not think it would be in the best interests of the Committee that we should debate at length the very important principle raised by this clause."—[OFFICIAL REPORT, 22/2/73, c. 351.]
I and my noble friends have been giving considerable thought to this matter and the conclusion we have arrived at tentatively (I do not know whether it will meet with the Committee's approval, and of course I am entirely in their hands) is that the advice given by the noble Lord Lord Diamond, is right and wise advice.
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There is a whole complex of inter-related if separate matters and my noble friend Lord Limerick has promised to bring the matters back for discussion to my right honourable friend Sir Geoffrey Howe. It would be a slightly academic question to examine again the principles of Clause 11 in the absence of the proposals, which I hope will be made and ready by Report, although I am not giving an undertaking to that effect, and I would rather hope, therefore, that the advice tendered by the noble Lord, Lord Diamond, on that previous occasion could now be accepted by the Committee.
THE EARL OF SELKIRK: May I ask one question? I do not want to violate what the noble and learned Lord the Lord Chancellor has said in any way, but there is one point, not a point of major principle, on which perhaps he could say something. I am told that many countries overseas have read that we are having an insurance Bill in this country. They have seen that certain powers about reinsurance exist there—they probably have not read them very closely, but they have asked this question, "Does the Government want to interfere in any way with a very delicate and important historical function in London of developing reinsurance on an international basis, all over the world?" This business is enormously valuable to us, both as a foreign trade invisible export and also, quite rightly, in the principles of insurance, spreads risks of a big disaster over an immensely wide area, from Tokyo to Chicago and elsewhere. If the noble and learned Lord the Lord Chancellor can give an assurance that it is not the intention of the Government to interfere with international reinsurance, and that possibly his intention is to develop and help it, then I believe that would be greeted overseas with much satisfaction.
THE LORD CHANCELLOR: I believe that I can give my noble friend the kind of assurance for which he is seeking. Reinsurance is, of course, a very valuable part of our invisible exports and of the functions of the City of London in relation to insurance, and the last thing which is in our minds is to reduce that source or that prestige value of the City of London. Our overseas earnings on insurance generally are of course, as is

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very well known, quite substantial, and reinsurance makes an important, although not the only, contribution to those earnings. Our view is that these earnings will not be affected by the Bill, although reinsurance companies will be dealt with in exactly the same way as other insurance companies. We believe, on the contrary, that this Bill will strengthen the position rather than weaken it. If we bear in mind what the Bill is for, I think we can see that that is so. We have sought to prevent failures of companies such as those which we have seen fail in recent years, and we think that if they were to continue without the reinforcement of this Bill that could in fact lead to some loss of confidence overseas to the detriment of both insurers and reinsurers; and it is precisely because we want to strengthen confidence in both classes that we have introduced this Bill, with whatever merits or defects it might have.
LORD BROWN: I did not quite understand whether the noble and learned Lord's opening remarks were directed to Clause 14, which we are now discussing. He did make mention of Clause 11.
THE LORD CHANCELLOR: I believe that the question which the noble Lord in the Chair proposed was, Whether Clause 11, as amended, shall stand part of the Bill? I was not seeking in any way to curtail discussion but possibly to make a suggestion as to the line the discussion would take.
LORD STOW HILL: I do not know whether from these Benches I might intervene shortly, speaking purely for myself, but in effect to answer what was put in the form of a question by the noble and learned Lord the Lord Chancellor. I should have thought, if I may respectfully say so, that the course which he has proposed is an extremely sensible one. Clause 11 raised, among the other issues at large in this debate, that which arises on subsection (1)(e). That paragraph introduces the whole complex of Amendments which deal with the question of natural justice and which have been compendiously referred to in the course of our debates as the "fit and proper person" clauses. When we were discussing those clauses earlier in the Committee stage of this Bill the
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Minister in charge, the noble Earl, Lord Limerick, stated that he would give very careful consideration to the arguments that were used; and the noble and learned Lord the Lord Chancellor has said that his right honourable friend Sir Geoffrey Howe is also concerned in that aspect of the Bill.
That being so, and speaking for myself—and I can only speak for myself—I very warmly accept the proposal made by the noble and learned Lord that we should put Clause 11 in cold storage, as it were, so that we can see what emerges as a result of the thinking of Ministers in view of the arguments that have already been pressed to the Committee on that clause. That is all I wish to say; but, speaking for myself, I entirely agree with the proposal made.
LORD ALDINGTON: I, too, welcome the line taken by the noble and learned Lord the Lord Chancellor. I believe that he will know that the point which the noble Lord, Lord Stow Hill, has made, is not the only point that arises on Clause 11. He will know that I was planning to rehearse my views on some of the other points. But I believe that he will know also that I have used the interval to see that his right honourable friend, and the noble Lord sitting next to him, were aware of what those points are. So, I hope that if I am now silent on those points it will not be taken to mean that I have not got quite a number of points.
The only other point I should like to make is that on the succeeding clauses, namely, Clauses 12 to 20, there are some points that one would want very shortly to raise, as Clause 11 now stands. If I may promise him this, he will be pleased: I will make the points very shortly, but I still think it right to put a marker down on those clauses so that it cannot be said when we come back to them on Report stage, whatever the new drafting of Clause 11 may be, that I have, as it were, acquiesced in some of the results that follow from some of the clauses. Subject to that (and I think that by nodding the noble and learned Lord indicates that he understands the point), I welcome what has been said.
LORD BROWN: It is always commendable for a Government to be prepared to reconsider, but I hope they

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are not going to reconsider to the extent of drastically weakening this Clause 11. I find myself possibly diminishing into a minority of one. I had the support of the noble Earl the Minister in the previous debate—or perhaps it was the other way round and I was supporting him. It is unfortunate to be arguing with one's own friends on these Benches. This call for natural justice is all very well. It is always a good cry to put up in this House at any time. But, without wishing to rehearse all the arguments, which I tried to deal with and the Minister himself dealt with at the earlier stage of the Committee, I would say this. The search for natural justice for the individual director of an insurance company has in the past often led to a great lack of justice for thousands of people who have paid premiums and who can ill afford to lose the money which they have paid out, because the insurance company has gone broke. It is not a matter of prophesying what might happen; it is a question of looking back to see what has in fact happened.
Although some very rigorous powers are available in the 1967 Companies Act, with which I am extremely familiar because I took that Bill through this House—and, I may say, with very little dissent from this House—it appears they have not proved sufficient. If there is much retreat from the underlying principle with regard to dealing with persons who are not appropriate to run insurance companies, we shall expose ourselves to another danger. There may be an element of injustice that can arise under the provisions of the Bill as it stands—I am not denying that for one moment—but if one has to choose between giving real natural justice in every case in order to avoid any injustice to insurance company managers or directors, and the other side of the penny is to risk thousands of people who can ill afford to lose their premiums, I prefer to protect the policy holder every time. I hope the Government are not going to weaken on this.
THE LORD CHANCELLOR: I am very grateful for what has been said by the noble and learned Lord, Lord Stow Hill, and my noble friend Lord Aldington and by the noble Lord, Lord Brown. I noted what the noble Lord, Lord Brown, had said on the previous occasion. I am not saying by any means that what will
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emerge will be exactly what has been proposed by my noble friend or by the Front Bench opposite. What I am seeking to do, or rather what my right honourable friend is seeking to do, or the Government are seeking to do, is to try to achieve a proper balance between two objectives, which I agree have some divergent possibilities; otherwise, I suppose we would not have had the debate last time. Quite clearly, this Bill has been brought in, and indeed the previous Bill, the part of the 1967 Companies Act which was brought in by the noble Lord, Lord Brown, was brought in because there had been scandals, and because not only are the rights of policy holders affected adversely but also it does in fact operate adversely to the prestige of this country as an insurance centre that scandals should happen.
I would not go quite so far as the noble Lord, Lord Brown, and say the powers were insufficient; what we have found is that the powers are insufficiently flexible. If you have power to stop a company altogether, which is what the Companies Act 1967 allows you to do, you can hardly say your powers are insufficient. But what in fact has been discovered, and what was brought out very clearly I think by the V. & G. Report, is that if your powers are too draconian (if I may use that phrase), you hesitate to use them before the damage is done. The Bill is designed to provide a greater range of powers, most of which are less draconian than those already possessed. I fully take the point which my noble friend Lord Aldington has taken. It was precisely because my right honourable friend was very much concerned, and has been made fully aware of the strength of feeling expressed from these Benches and the Front Bench opposite, that I made the proposal I did, and I am very grateful for what noble Lords have said.
LORD JACQUES: I would say two things very briefly. First of all, we should like to support entirely the statement made by the noble and learned Lord, the Lord Chancellor. The purpose of this Bill is to protect the policy holder. That should foster our interest in insurance and our insurance business rather than retard it. Secondly, the Opposition has moved three Amendments to Clause II, on subsection (1)(f), subsection (3) and subsection (4). We have not lost interest in

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these Amendments, but we have had assurances from the Minister that our view will be considered and something may come forward at the next stage of the Bill. We have accepted those assurances, and prefer to leave it there until the next stage.
Clause 11, as amended, agreed to.
Clause 12 agreed to.
Clause 13 [Requirements about investments]:
On Question, Whether Clause 13 shall stand part of the Bill?
7.55 p.m.
LORD ALDINGTON: I have one point only to raise.
Does my noble and learned friend not think these powers go a little wide? It seems to me, reading the Bill as it is now drafted, that the Secretary of State really has powers to intervene in the investment policy of any insurance company and to give it certain directions. I should have thought that that was wider than it need go, at any rate for part of the investments of insurance companies. It may be that there is a requirement, in order to protect policy holders, that investments representing liabilities and the solvency margin ought to be subject to surveillance and direction. But I would question whether investments representing surplus funds beyond that are properly within the power of surveillance of the Secretary of State. I would ask my noble and learned friend to think about that before Report stage.
THE LORD CHANCELLOR: Of course, what my noble friend has said will be conveyed to my right honourable friend, and I am sure he will give it full weight. I think what we have to remember in relation to Clause 13 is that the powers given to the Secretary of State under Clause 13 can be operated only on the grounds set out in Clause 11, and this effectively restricts them. If that is thought of at length, I should rather doubt whether they are as wide as my noble friend Lord Aldington thinks. For instance, the first ground under Clause 11 is that the company may be unable to meet its obligations. To make it realise part of its investments, or to restrict it from investing in a speculative fashion, I
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should have thought was the mildest possible sanction. Obviously these powers are strong. They are intended up to a point to be strong, but Clause 11 does restrict them. However, I do not want to say anything which would detract from what I said to begin with. My noble friend's point is noted, and I will see that it is conveyed to my right honourable friend.
LORD ALDINGTON: If I may make my point quite clear, of course I agree with what the noble and learned Lord the Lord Chancellor has just said. It all depends on the final wording of Clause 11, but at the moment Clause 11 gives the Secretary of State the right to use this power if
"it appears to him that there has been a change in the persons who are controllers of the company".
As the Bill is at present drafted—I hope that this will be altered—this means any change in the directorship of the company, and since that takes place every year, in theory the power is available. That is the main reason why I have taken this point on Clause 13.
THE LORD CHANCELLOR: I note that point and am grateful to my noble friend for making it.
LORD JACQUES: Our view is that the Clauses 12 to 20 are needed. What is required is a suitable Clause 11. We regard Clause 11 as not being satisfactory at the moment, but have no complaint with Clauses 12 to 20.
Clause 13 agreed to.
Clauses 14 to 17 agreed to.
Clause 18 [Acceleration of information required by accounting provisions]:
On Question, Whether Clause 18 shall stand part of the Bill?
8.0 p.m.
LORD CACCIA: On Clause 18 I would raise not a question of principle, but one of practicality. Accelerated information is required and in the general context of Clause 11 that is difficult to argue, because Clause 11 is going to be redrafted; but the requirements are for information to be provided within certain specified time limits. I think it is a fact that certain companies with worldwide interests may find it impossible,

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even with the best will, to fulfil the requirement here set out, if pressed to do so in any literal fashion. Therefore, I ask this question: does the Minister accept that there might be this theoretical difficulty for a world-wide company and, if so, is it reasonable to put in a Bill a requirement which in fact may not be practical for such companies to carry out?
Tim LORD CHANCELLOR: I am grateful to the noble Lord on the Cross-Benches for having raised this matter. I quite agree that if the power were used unreasonably, as in all the other powers, it could operate unreasonably. The experience of the V. and G. report, which the noble Lord is familiar with, was not so much that we do not possess adequate power to act, but that we do not operate it in time. If information is asked for, it is only too easy for a company trying to keep going when it ought not to do so, to give apparently plausible reasons for not giving information and so playing the Department along. I will see that my right honourable friend bears this point in mind, because many companies are of world-wide importance and would find a genuine difficulty here. But one has to remember that there is such a thing as original sin and it is the only doctrine of the Church that can really be established by experience.
BARONESS LLEWELYN-DAVIES OF HASTOE: Some of us dispute that.
THE LORD CHANCELLOR: We must be on our guard against it.
Clause 18 agreed to.
Clause 19 [Power to obtain information and require production of documents]:
On Question, Whether Clause 19 shall stand part of the Bill?
LORD ALDINGTON: We had a debate on some of the main points about this clause when we discussed Clause 11(3) on the last occasion. If we might look at this clause in the context only of the powers in Clause 11(1) for the moment, may I ask the Government one question; that is, is it necessary to have subsection (1)?
That subsection would seem to provide for periodic inspection and handing over of information. Subsection (2)
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would seem to give all the powers that are required. That is the point that I would take on this clause in the context of Clause 11, subsection (1).
If in the redrafting of the Bill Clause 11(3) remains as it is, I very much hope that the wide powers in Clause 19 will not apply in those cases. The noble Earl, Lord Limerick, in the Second Reading debate and in the early part of this Committee stage, made the point that it was valuable to have a power of what I might call random inspection of any company in order to cover up or camouflage inspections made of companies whose affairs were in doubt. I have some reservations on that. But even if one accepts that, does it follow from that that the Bill must give the Secretary of State power to have a wide-ranging inspection of all the affairs of insurance companies—and there are something like 700 of them, I think—who are not at the moment subject to any of the circumstances set out in Clause 11(1)? Would it not be better to limit the power of inspection to certain important matters, one of which might be the unclaimed loss reserves? There are technical points which can be considered by the Government between now and Report, so what I am suggesting is that if in the redraft of Clause 11, subsection (3) remains somewhat as it is, the Government should in this case specify the purposes of the inspection.
LORD JACQUES: We believe there are situations in which Clause 19 as it stands may be required, but we also believe that there are situations where it is not required. Can I refer the Committee to Clause 11(3)? That gives the Minister power to use Clause 19 against any company, a company of long standing and repute. It is our view that the powers of the Minister in Clause 19, subsections (2) to (6) are adequate for the purposes of this particular clause, and that there is no need to use the powers of Clause 19(1) in relation to Clause 11(3).
THE LORD CHANCELLOR: I know from what my noble friends have just been saying to me that these points are being very carefully considered by my right honourable friend, and should either my noble friend or the noble Lord, Lord' Jacques, wish to make any additional representation to him, apart from what

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they have said, which will be carefully noted, my right honourable friend will take it into account. I follow what is said about Clause 19(1). On the other hand, I was not absolutely sure that I had the point about Clause 11(1) quite right. I should not have thought that Clause 11(1) was the most likely ground on which one would seek information, because if one thinks that a company is insolvent, one is much more likely to move straightaway on to one of the more draconian powers. But if one looks at some of the other grounds—misleading or inaccurate information, or failure to satisfy a particular obligation, or failure adequately to reinsure risks—I think it will be seen that Clause 19 is relevant. I should have thought it was altogether too mild rather than too extensive for Clause 11; but again, I do not want to pre-empt what my right honourable friend may put about it. I know he is considering this matter both with my noble friend and with other insurance interests. Perhaps with that, my noble friend would for the moment be content.
LORD ALDINGTON: I should be absolutely content if I could avoid my noble and learned friend, misunderstanding me. Clause 11(1) includes paragraph (a), which is the reason for a draconian power, and paragraphs (b), (c), (d), (e) and (f), and when I was referring to Clause 11(1) I was referring as much to paragraphs (b), (c), (d), (e) and (f). I hope my meaning is now clear.
THE LORD CHANCELLOR: The mistake was mine.
LORD STOW HILL: May I raise one point, which I should describe as a civil liberties point and which the Committee may feel we should look at before passing it. Clause 19 provides that in certain circumstances answers must be given and information furnished. It is compulsive, and the person involved has no option. If one looks at subsection (5) one finds:
"A statement made by a person in compliance with a requirement imposed by virtue of this section may be used in evidence against him."
I presume that means not only in civil proceedings but in criminal proceedings as well. I agree that without such a provision Clause 19 would be far less effective than it is intended to be and, may I
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add, ought to be. What I would ask the noble and learned Lord is, are there precedents for answers which have to be given, as to which the person concerned has no option, being made available as evidence against him in criminal cases? There may well be—I am not saying for a moment that there are not—but perhaps that is an aspect of civil liberties legislation which we should look at. I should be grateful if the noble and learned Lord would indicate the Government's thinking on that point.
THE LORD CHANCELLOR: There are precedents. The obvious precedent that springs to my mind is the Bankruptcy Act 1914. I am sure there are equally precedents under the Companies Act, of which this is virtually an amendment. I cannot see that there is any objection to using information provided by a person on that hypothesis and saying, "Now we are going to assume that this is true. This is something you said. If it was not true, you ought not to have said it." I cannot see why a man should run away on the grounds of civil liberty from the prosecution's saying in a subsequent case, "What you have said is true. If you are to deny it now, it is an issue for the jury." That is really all that subsection (5) says, even in criminal cases.
Clause 19 agreed to.
Clause 20 [Residual power to impose requirements for protection of policy holders]:
THE EARL or LIMERICK THE EARL or LIMERICK moved Amendment No. 18:
Page 14, line 28, leave out ("and potential policy holders of the company from") and insert ("or potential policy holders of the company against").
The noble Earl said: Apart from a minor drafting change to bring the wording of the clause into line with that used in Clause 11(1)(a), the Amendment has a similar purpose to that proposed in Clause 11(1)(a) (Amendment No. 11); that is, to permit action appropriate for the purpose of protecting either present or potential policyholders but not necessarily both. Action to protect future policyholders may in fact be different from that required to protect present ones, even where both require protection, and the Amendment will permit this. I beg to move.
On Question, Whether Clause 20, as amended, shall stand part of the Bill?
8.15 p.m.
LORD CACCIA: This clause again refers back to the provisions of Clause 11, and as that is to be amended it is difficult to argue a special case. The clause is of an omnibus character and almost says, "Well, if we have not thought of anything that we might have thought of by which to catch people who will be a danger to the reasonable expectations of policyholders or potential policyholders"—that would be under Clauses 16, 17, 19 and so on—"let us have an omnibus clause to make quite certain that we shall be able to get them somehow or another". This form of general legislation is in itself not commendable if it can be avoided. I was wondering whether the Minister would be ready to look at it again, to see whether it would be possible to define a little more precisely what these residual powers would be used for.
LORD BROWN: I hope that the Minister will not look too seriously at it again. We have over 700 insurance companies, and each employs a large number of sometimes very clever people, and of a very large number of clever people there will be a proportion—let us hope a small proportion—who will spend their time busily thinking out ways and means of evading some of these restrictions, or indeed of cheating policy holders. If you do not have an omnibus clause in a Bill like this, then you simply wait until somebody finds a nice way of evading the law, and then you have to legislate all over again. This is a tiresome business with which you never keep up, as is the case with, taxation. You must have an omnibus clause to deal with extraordinary situations such as we meet when we come to a matter like this, or the matter that was debated this afternoon in this house on aircraft hijacking. Very similar sentiments were expressed all through that debate this afternoon. Because these are exceptional issues: one endangers life, and the other endangers the payments of sometimes poor people. I hope that the Minister will not take too much notice and that he will maintain the existence of this general clause.
THE LORD CHANCELLOR: I wonder whether the noble Lord, Lord
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Caccia, has reflected upon the context of this clause, which is really a safeguard, properly viewed, rather than an added danger to the incautious insurer. What we are trying to do is to avoid using the powers of Clause 12, which really are to put the company out of business. The purpose of these additional powers is to avoid using the draconian power of Clause 12, which is death to the company. If my noble friend will glance at Clause 11(5), he will see that we have provided that the general power, the residual power, contained in Clause 20:
"shall not be exercisable except in a case in which he considers that the purpose mentioned in that section cannot be sufficiently achieved by the exercise of the powers conferred by sections 12 to 19 below or by the exercise of those powers alone."
Really the first safeguard is that you have to be satisfied that one of the grounds in Clause 11 exists, and then the grounds in Clause 11 are further restricted by the provision of subsection (5), which says that you can only use it if it is the last resort.
I would agree that if it were not for the framework of Clause 12, which is the power that already exists and that we are re-enacting, one could put forward a case of the kind which the noble Lord has been putting forward. Clause 12 is much more savage and more specific than this, and the restriction is so severe that I should have thought that, viewing the matter from the point of view from which we are viewing it now, the "stitch in time mentality" is better than the "put the company out of business" mentality. Probably it was to the advantage of a company that might be in only temporary difficulty for the Minister to have a power which, if he did not use it, might lead him to move straight to Clause 12 and either stop the whole of the business or some part of it.
LORD ALDINGTON: May I say to my noble and learned friend that some of this is not appreciated. It was with the idea of the power in Clause 12 being too draconian, too drastic, that Clause 20 was there to try and find something short of death to the company. I just wonder if that is the case, if that is the main purpose of Clause 20 which I take from my noble and learned friend, whether the present words in Clause 11(5)

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are not misleading. I had supposed that when the words were
"… the purpose mentioned in that section cannot be sufficiently achieved by the exercise of the powers conferred by sections 12 to 19".
the power of Clause 20 was more drastic than anything in Clauses 12 to 19. Now I find that the object of Clause 20 is to produce something less drastic. If that is so, may I suggest to the Government that they might have another look at the words in Clause 11(5), and that I think would calm the fears which I have. Many of us were wondering what powers worse than death to the company could be used by the Government.
THE LORD CHANCELLOR: I take the very good debating point made by my noble friend. I cannot imagine anything worse than death to a company. There are fates worse than death which some of us might suffer in our bodies, but that incorporeal entity, the company, can hardly suffer a fate worse than death. I will bring my right honourable friend's attention to the point made by my noble friend, but as I read this Bill (I am afraid I had to do my homework in rather a hurry) I believe my explanation still stands in spite of this rather jolly point.
LORD HAWKE: I have been listening to this debate with great interest. This Bill contains draconian powers. If you admit that they are draconian powers in parts of it, why not have draconian powers in other parts, too? I think this is a very necessary hit of clause. The Secretary of State might require a company to put its premium up, which would be a great deal better than closing it down, but I do not think the argument that such-and-such a power is too draconian is really valid, in view of the tremendous draconian powers that exist all over the Bill.
Clause 20, as amended, agreed to.
Clause 21 [Notice of proposed exercise of power under section 12]:
LORD STOW HILL LORD STOW HILL had given notice of his intention to move Amendment No. 19.
Page 14, line 34, leave out ("power") and insert ("powers").
The noble and learned Lord said: Your Lordships will see that this Amendment stands in the names of the noble Earl, Lord Selkirk, and my noble friend Lord Diamond and in my name. I think I am the only one of the three present so perhaps I could indicate to your Lordships what would be my proposal with regard to this Amendment. I would ask leave in a moment or so to withdraw it, saying this about it. It is the first of a series of Amendments—there are a considerable number of them—which deal with a point which has already been mentioned to-day; namely the fit and proper person" point, or the "natural justice" point.
This Amendment is a paving Amendment to a number which follow. They are designed, as your Lordships may remember, to provide that the Secretary of State, if he wishes to declare somebody not a fit and proper person, must give reasons for his view, and also are designed to bring it about that the supposedly unfit person is to have a right of appeal. I would propose, if it would meet with the convenience of the Committee, that I would in a moment ask leave to withdraw the Amendment in view of the circumstance that the Government have undertaken to consider the matter; and I would at this stage also indicate what are the other Amendments which go with it in order that the Chair may have the knowledge when we get to those others that those Amendments, if called, would not be moved. If that would meet with the convenience of the Committee, may I give the numbers of the other Amendments involved? They are Nos. 20, 21, 22, 23, 24, 25, 26, 27, 29, 30 31, 33, 34, 35 and 47. They all go to the same points and would, if they are called in due course, either not move them or ask leave to withdraw them. Having said that, I ask leave to withdraw Amendment No. 19.
Clause 21 agreed to.
Clause 22 [Notice if proposed exercise of powers on ground of manager's unfitness]:
THE EARL OF LIMERICK: This Amendment recognises a printing error.
Amendment moved—
Page 16, line 9, leave out ("12") and insert ("20").—(The Earl of Limerick.)
Clause 22, as amended, agreed to.
Clauses 23 to 30 agreed to.
Clause 31 [Powers to make valuation regulations]:
8.29 p.m.
LORD JACQUES LORD JACQUES moved Amendment No. 32:
Page 24, line 31, leave out ("may") and insert ("shall").
The noble Lord said: This clause gives power to the Secretary of State to make regulations with reference to valuation of assets and liabilities. We feel that the Government have been somewhat reluctant to use their powers. This we think was shown in the V. and G. case, and we think they should now show they intend to use their powers. Regulations for the valuation of assets and liabilities are in our view absolutely essential if we are going to avoid deception of policy holders and potential policy holders. We therefore think that there should be regulations and seek to substitute the word "shall" for the word "may". I shall probably be told that the Government could be in default the same day as the Bill was passed. If that was thought so by the lawyers, I 'think we could find suitable words to ensure that there would be regulations without the Government's being in default.
LORD HAWKE: I would support the Amendment, provided that there are full consultations beween the Department and the British Insurance Association when the time comes for drafting the said regulations.
LORD BROWN: I, too, would support the Amendment. If a similar provision could have been made in the Companies Act with regard to the valuation of stocks, how wonderful it would have been for everybody! Unfortunately, it is not possible with different sorts of goods. But I assume that when one comes to value the assets of insurance companies, one is referring mainly to investments of one kind or another which have a public value; and there does not seem to be any reason why regulations should not be drawn up under this clause so that the valuation in the balance sheets of the insurance companies has a consistent relationship to the valuation placed on the companies by the
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public. This would seem to be introducing a measure of highly desirable uniformity.
THE EARL OF ONSLOW: I should like to support this Amendment. After all, the Committee of Lloyd's makes fairly stringent regulations as to what you may or may not have in your premium trust funds, and it would seem to me quite sensible that this sort of power should be used by the Government in regard to insurance companies because, as my noble friend Lord Hawke said, they are taking quite draconian powers over the whole insurance industry, anyway.
THE LORD CHANCELLOR: In spite of the pleas from almost every direction, I hope the noble Lord will not think it right to press this Amendment. I have seen acres of print expended by lawyers on the difference between "may" and "shall". "May" very often imposes a duty and "shall" does not always do so, and the consequences of not doing a "shall" are almost infinite in their permutations and combinations. Shall we have the admirable Mr. Raymond Blackburn bringing a mandamus before the Divisional Court, and going before Lord Denning if the Secretary of State is in default? This is not the way in which the regulatory powers can be used. A Secretary of State is not in the same position as Lloyd's, nor has an Act of Parliament quite the same standing as the immutable laws which Lloyd's makes for its underwriters and its brokers.
The clause would not be put into the Statute if we did not intend to use its powers, and I can assure the noble Lord who moved the Amendment that we do intend to use the powers. But it is not usual to expose a Secretary of State, or any Minister, to unnamed penalties if he does not use powers, which he has every intention of using, as soon as some people would like, and "may" is therefore essential. Moreover, if you did substitute "shall" for "may", where would you get to? I suppose that people could argue that, although he had used his powers, he had not used them up to the hilt; that is to say, there were certain powers which his critics thought were intra vires and which he thought were ultra vires, which he had therefore deliberately refrained from using within the terms of the clause. I suppose a

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great deal of litigation could take place about that.
I am bound to say that I have not studied this point at any great length, but I do not think I have ever seen a regulatory power of a Minister imposed with the word "shall" and not with the word "may". Although I have great sympathy with the noble Lord, and indeed with my noble friends and others who supported the sentiments which he uttered, I would think that simply as a piece of constitutional propriety we might stick to the terms of the clause. I do not think this is the moment to break utterly new constitutional ground, but I think we should be doing so if we acceded to the noble Lord's persuasion.
LORD JACQUES: Am I right in saying that the Government regard these regulations as necessary, and that as soon as is practicable there will be regulations?
THE LORD CHANCELLOR: Yes, I think that is a fair statement of the case. We shall of course have to consult with quite a number of people as soon as the Bill is passed, and the resultant regulations will be made as soon as practicable thereafter. I hope that that will satisfy the noble Lord.
LORD HAWKE: The noble and learned Lord will no doubt have a few hints and tips from the Commercial Union on the valuation of liabilities.
Amendment, by leave, withdrawn.
Clause 31 agreed to.
Clause 32 [Approval of person proposing to become controller of insurance company]:
On Question, Whether Clause 32 shall stand part of the Bill?
8.35 p.m.
LORD ALDINGTON: What I have to say really revolves around the interpretation of the word "controller". If the word "controller" in this clause is to be interpreted in the same way as the word "controller" in Clause 2, then my humble submission to your Lordships is that this clause makes nonsense of life. In effect, it requires that every year all the directors standing for re-election in a company have to submit their names
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for the approval of the Secretary of State and may have to wait for three months. I cannot believe that that is meant to happen, and I can only believe that the intention of this clause is to catch the real controller in the sense of somebody who has the full controlling power over the insurance company—perhaps a person as defined in Clause 2(2)(c). If that is the case, then I have no objections to the clause, but I should like to know whether that is so.
THE EARL OF LIMERICK: My noble friend is on to a good point. It is one which we have discussed and I think I have to concede—although I am not convinced—that his interpretation of "retiring directors" is right. But this is a matter into which we are looking and we have certainly taken on board what he has said. He is certainly correct in assuming that we are not attempting to catch the sort of case he mentioned.
LORD BROWN: Does not this difficulty draw attention to an omission which is much wider than this Bill; that is, the failure of industry and commerce to move to an exact definition of the terms which they consistently use? If one had the term of "chief executive", then what this Bill is aiming at is the chief executive if he is the man whom the board holds accountable for running a company within the terms of reference set by the hoard. This failure to define our terms results in its being almost impossible to draft clauses which are appropriate. I hope that the fact that there has been this difficulty will draw attention to the necessity for defining our terms in future—not that I suggest doing it in this Bill.
LORD ALDINGTON: With respect to the noble Lord, I very much hope that the Government will not take any notice at all of that suggestion. I do not think it is the fault of industry; I think it is the fault of the drafter of the Bill in using a word which is specially defined in this Bill to catch much too wide a net of people. That is all that has gone wrong. I do not think this clause is at all aimed at what is called the chief executive: I think it is aimed at somebody who has even greater power than the chief executive. Chief executives, as I understand the Companies Act, are responsible

1105
to their boards of directors, and their boards of directors have responsibility under this Bill and under the Companies Act to all kinds of people. I think the controller" here is meant to be the person mentioned in Clause 2(2)(c). If I am right about that, then I have no objection to the clause.
Clause 32 agreed to.
Clause 33 agreed to.
Clause 34 [Documents deposited with Secretary of State]:
THE EARL OF LIMERICK THE EARL OF LIMERICK moved Amendment No. 36:
Page 26 line 21, leave out from ("under") to end of line 22 and insert ("section 8 of the Act of 1958, including any document obtained under subsection (2) of that section;").
The noble Earl said: This Amendment makes no change to the substance of the Bill. It merely clarifies the drafting for the purpose of facilitating consolidation which, it is hoped, can be arranged soon after the Bill is enacted. I beg to move.
On Question, Whether Clause 34, as amended, shall stand part of the Bill?
LORD ALDINGTON: There is a very short point here which has been taken earlier. It relates to the desirability of publicity in all circumstances. My noble friends have stressed the importance of the Government having power to do things in such a way that they do not provoke immediate disaster for the policy holder and the insurance company. Immediate publication of certain documents in certain events might provoke exactly that disaster which my noble friends on the Government Front Bench have told us on many occasions they wish to avoid, so I wonder whether they might look again at the drafting of subsection (2), or indeed at the drafting of the whole of this clause, to ensure that publicity is not mandatory in those sort of circumstances.
THE EARL OF LIMERICK: Certainly we will look at the point which my noble friend has raised. I would just point out that the Secretary of State is not bound to make public the information which he gets under Clauses 6(5) and 7(2), but he has a discretion to do so. The extent and the form of the publicity will be among
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the matters for consideration with the industry when the contents of the regulations to be made under those two clauses are discussed with them, and of course we shall have regard to our watchword "Freedom with publicity", which involves a certain amount of publicity to justify the freedom.
Clause 34, as amended, agreed to.
Clause 35 [Treatment of certain business as or as not being ordinary long-term insurance business]:
THE EARL OF LIMERICK THE EARL OF LIMERICK moved Amendment No. 37:
Page 27, line 19, after ("27") insert ("(4) to (6)").
The noble Earl said: This is a purely drafting Amendment to remedy the inappropriate inclusion of irrelevant subsections!that is, subsections (1) to (3) of Clause 27—in Clause 35 (4), which, as amended, will still refer to the other subsections of Clause 27; that is, subsections (4) to (6). I beg to move.
On Question, Whether Clause 35, as amended, shall stand part of the Bill?
THE LORD CHANCELLOR: Perhaps I may take this opportunity to say that I made a passing reference to Lloyd's in reply to an argument put from behind me, and I ought perhaps, before doing so, to have disclosed that I am a name at Lloyd's. The Bill does not affect, it, but it does occur to me that, having referred to the matter, I should perhaps have disclosed it.
THE EARL OF ONSLOW: Perhaps I should also have disclosed that I am a name at Lloyd's as well.
LORD HAWKE: Is it advertising for the Lord Chancellor to say that he is a name at Lloyd's?
Clause 35, as amended, agreed to.
Clause 36 [Power to modify Acts in relation to particular companies]:
8.45 p.m.
THE EARL OF LIMERICK THE EARL OF LIMERICK moved Amendment No. 38:
Page 27, line 37, after ("27") insert ("(4) to (6)").
The noble Earl said: This, again, is purely a drafting Amendment, similar

1107
to the last, to remedy the inappropriate inclusion of irrelevant subsections—that is, subsections (1) to (3) of Clause 27—in Clause 36(4), which, as amended, will still enable modifications to be permitted for individual companies in relation to the remaining subsections of Clause 27; that is, subsections (4) to (6). I beg to move.
Clause 36, as amended, agreed to.
Clause 37 [Application of Acts in relation to industrial assurance business]:
THE EARL OF LIMERICK THE EARL OF LIMERICK moved Amendment No. 39:
Page 27, line 43, leave out ("and sections 5 and 7") and insert (",section 5 of that Act so far as it relates to the form of abstracts and statements and section 7").
The noble Earl said: This is a somewhat recondite point, but I think I can explain it briefly. Under Section 5 of the Insurance Companies Act 1958 the triennial valuation of industrial assurance companies has to be made by an actuary with prescribed qualifications, and in that context "prescribed" means prescribed by regulations made by the Industrial Assurance Commissioner. But the business of industrial assurance companies need not be confined to industrial assurance business, and in practice all or nearly all such companies also carry on ordinary long-term business. There therefore seems little merit in excepting industrial assurance companies from the general rule that, as insurance companies, they should have actuaries with qualifications prescribed by the Secretary of State. The Amendment has the effect of conferring on the Commissioner the power to prescribe under Section 5 the form of valuation abstracts and statements, but leaves with the Secretary of State the power to prescribe the qualifications of actuaries. I beg to move.
Clause 37, as amended, agreed to.
Clause 38 agreed to.
Clause 39 [Insurance brokers]:
LORD JACQUES LORD JACQUES moved Amendment No. 40:
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Page 29, line 19, leave out ("may") and insert ("shall").
The noble Lord said: Clause 39 is concerned with regulations controlling insurance brokers, and again we have the question whether it should be "may" or "shall". Can I assume that the Government regard these regulations as necessary, and will make such regulations as soon as practicable? If so, I shall beg leave to withdraw the Amendment. I beg to move.
THE EARL OF LIMERICK: I am able to give that assurance to the noble Lord, comparable to the one given on the previous Amendment, Amendment No. 32.
Amendment, by leave, withdrawn.
THE EARL OF LIMERICK THE EARL OF LIMERICK moved Amendment No. 41:
Page 29, line 21, leave out from first ("to") to ("and") in line 23 and insert ("make an offer or proposal or to take any other step with a view to entering into a contract of insurance with an insurance company;").
The noble Earl said: The present wording of Clause 39(1)(a) is inadequate, in that it does not take account of the many forms of preliminary action which may lead to the conclusion of an insurance contract. For example, in some cases the form or proposal completed by a potential policy holder, or perhaps by a broker on his behalf, may constitute an invitation to the insurance company to treat, rather than itself constituting an offer to the insurance company. The amended wording is so framed as to cover any conceivable arrangement involving an intermediary leading up to the possible conclusion of an insurance contract. I beg to move.
LORD JACQUES LORD JACQUES moved Amendment No. 42:
Page 29, line 27, after ("connection") insert ("and to other matters").
The noble Lord said: We on this side of the Committee are concerned not so much with the agent who is a full-time member of the staff of the insurance company, but with the insurance broker who acts for several companies and with the part-time agents such as the garage proprietor who is in a strong position to get business and whose main concern is not insurance. It is here that some control is necessary. There are many cases where a youngster goes to a garage

1109
and eventually buys a car. The garage proprietor says to him, "Now you will want insurance. You cannot go on the road without insurance. We can fix that up for you right away". Then they produce their proposal form and encourage the youngster to fill in the form. Then lie gets stuck halfway down and says, "What shall I say about this?". "Oh", they say, "Say Yes! If you say 'No' there will be a delay". Later he may have an accident and as a result of the advice given to him by the part-time agent he has given false information. In consequence he has no claim. We cannot see the great importance of disclosing connection; because everybody knows that the chap at the garage or the insurance broker has a connection with the insurance company and is getting a commission and that otherwise he would not be bothering about insuring the client.
THE EARL OF ONSLOW: May I interrupt? I think it should be made quite clear that insurance brokers are agents of the insured and not of the insurer. If the noble Lord, Lord Jacques, goes to an insurance broker, that broker is acting as his servant and not as the servant of the insurance company. I am sure the noble Lord understands that, but what he said could have been misconstrued.
LORD JACQUES: In the context of what I am saying, this is a purely technical point of law which makes no difference to the ultimate consequences. It is the ultimate consequences that count. Therefore, so far as connection is concerned we do not see a great deal of importance in that. We have no objection to its being disclosed; but everybody knows that the chap encouraging the insurance to be entered into is acting for the company and is going to get paid for so doing. What is far more important is that he should disclose to the potential policy holder the consequences of false information on the proposal form, what are the consequences of non-disclosure and what are the terms of the offer which is now to be made to the insurance company. These are the things that should be disclosed. Consequently we have suggested that in addition to "connection" there should be added "and to other matters", thus giving the Secretary of State power to deal with other matters in
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these regulations and to ensure that there is this kind of disclosure by the insurance broker. I beg to move.
THE EARL OF LIMERICK: The noble Lord, Lord Jacques, has raised an interesting point and has given some examples about which I should like to think. Basically, the question, not an easy one to resolve, is this: how much of this information should be given other than in the policy itself, which is the document of contract? I should like to consider whether it would be helpful for policy holders to prescribe this other information separately from the policy. I have another reason for asking the noble Lord not to press the Amendment at this moment. We hope shortly to receive recommendations from the Committee under the chairmanship of Sir Hilary Scott which is examining equity linked life insurance. It may be that some of these recommendations will be dealt with by Amendments to Clause 39. Bearing in mind what I have said and that I am willing to talk about the matter. I hope that I may ask the noble Lord not to press his Amendment at this moment.
LORD JACQUES: We still hope that the Secretary of State will take this power. That is all that this Amendment would do; it would add words to give the Secretary of State additional power to ensure that the prescribed disclosure is not only about "connection" but about "other matters" at the discretion of the Minister. With the assurances that have been given, I beg leave to withdraw the Amendment.
Amendment, by leave withdrawn.
LORD JACQUES LORD JACQUES moved Amendment No. 43:
Page 29, line 27, at end insert—
("() Regulations under this section may require the keeping by an insurance company of a register of persons so connected and may prescribe the information to be entered on it.")
The noble Lord said: Here we suggest that there should be regulations requiring an insurance company to keep a register of the persons so connected and the Secretary of State may prescribe the information to be entered in it. We believe that this would be one way of weeding out those people who act between the insurer and the insured and who are not the kind of people who ought to be doing that. If there is a register it would help

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a great deal. The burden of keeping the register should not fall upon the Government Department but upon the insurance company who use the agent or broker. I beg to move.
LORD HAWKE: This may be a very worthy Amendment. I am sure that most insurance companies must have a list of their agents; but the Amendment does not appear to me to say what is going to happen to the record when it has been prepared. It will not be of much use unless the general public are to have access to it.
THE EARL OF LIMERICK: Again I find myself in sympathy with the point put, although my noble friend Lord Hawke has voiced one of the doubts which I have about it. I think that this proposal could usefully reinforce our disclosure requirements. I am grateful for the noble Lord's welcome concern not to overload Government Departments. Following my noble friend Lord Hawke, I wonder whether the register kept in the company office would be of sufficient help to the public. What I should like to consider is whether the information to be recorded on that register should be deposited with the Department, perhaps on an annual and not on a "blow-by-blow" basis, so that a copy could be put on the company's file for general information. That would call for the Amendment to be redrafted, which I think it needs in any case. I would therefore ask the noble Lord not to press it at this stage.
LORD JACQUES: I gather that the Minister is not only in sympathy with the Amendment but wants to carry it a little further. In that case I have pleasure in asking leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 39, as amended, agreed to.
Clause 40 agreed to.
Clause 41 [Validation of certain group life policies]:
THE EARL OF LIMERICK THE EARL OF LIMERICK moved Amendment No. 44:
Page 30, line 2, after ("lives") insert ("or other event or events").
The noble Earl said: This is a minor drafting Amendment, associated with the
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Amendment to the Long Title of the Bill (Amendment No. 58), to make clear that Section 2 of the Life Assurance Act 1774 extends to certain group non-life policies as well as to certain group life policies. The Amendment in no way affects the substance of Clause 41(1) which, as it stands, already applies to non-life policies. I beg to move.
Clause 41, as amended, agreed to.
8.58 p.m.
LORD STOW HILL LORD STOW HILL moved Amendment No. 45:
After Clause 41 insert the following new clause:
Repudiation of liability
".Notwithstanding any rule of law to the contrary, an insurance company shall not be entitled to repudiate liability on a policy of insurance on the ground that the policy holder or any other person who effected the policy failed to disclose a fact or facts material to the assessment of the risk covered by such policy, if the policy holder or such other person, as the case may be, reasonably regarded such fact or facts as not being material to the assessment of such risk."
The noble and learned Lord said: The object of this Amendment is to give effect to what I think I can rightly describe as the principal proposal of the Fifth Report of the Law Reform Committee which was published as a White Paper in 1957. I think I should describe it as a tentative proposal because, if I may quote from paragraph 12 of the Report, those who sign it say this:
"It does not, however, seem to us that the mere fact that a branch of the law is theoretically open to criticism, or even that it is susceptible of abuse, in itself justifies a positive recommendation that it should be amended."
In the light of that, they do not actually recommend the change proposed in the Amendment which I put forward, but to use their language they say:
"We think that any or all of the following provisions could be introduced into the law and that no legal difficulties would arise in their application—".
They then go on to make the first of the recommendations with which I am concerned in this Amendment and which I will in a moment read to the Committee.
I am emboldened to make this proposal because the Committee which prepared the Report was composed of extremely distinguished members: lawyers who occupied the highest position on the

1113
judicial bench, and lawyers of very great distinction in the academic field. Many were Members of your Lordships' House, those whose names I will now read out. The late Lord Jenkins; the late Lord Parker, the Lord Chief Justice; the noble and learned Lord, Lord Devlin; the noble and learned Lord, Lord Diplock, and my noble and learned friend Lord Gardiner. They were all members of that Committee with other distinguished persons highly thought of in the academic field.
The Amendment deals with what is known as the doctrine of non-disclosure of material facts. To the extent that the law requires to be changed I must plead guilty to having raised the defence on innumerable occasions on behalf of insurance companies; and certainly on occasions I earned a rather severe look down his nose from the late Lord Goddard, who had rather strong views on this defence and who did not altogether approve of the advice that he thought I must have given to my clients—generally he was right. If I may seek to state the doctrine it is as follows. It is always said that the law of insurance is the law which requires the maximum good faith on the part of both the proposing insurer and the insurance company or the underwriter. As a branch of that law, it has been clearly formulated in the authorities that the following is the position: if the proposing insurer knows of a fact and the insurance company is ignorant of that fact, the proposing insurer is bound to reveal it, without being asked, to the insurance company, if it is a fact which would influence an ordinary prudent underwriter in assessing the risk which is proposed. The Committee may think of dozens of cases in which that sort of situation might arise.
In a large field of insurance law it does not arise in a practical form because the proposing insurer is required to fill in a proposal form in which he gives answers to the insurance company on matters they ask about in the form. Sometimes it is held that if he fills in the form the insurance company waives its right to be informed of other material facts which the proposing insurer knows of. But that is not of universal application and, broadly speaking, I think it is accurate to say that whether or not there is a proposal form the proposing insurer
1114
remains under that duty. If he knows of a fact which is material in assessing the risk he must, without being asked, disclose it to the insurance company whether or not he thinks, reasonably or otherwise, that it is material. He may think that it has absolutely nothing to do with the risk; nevertheless, if a prudent underwriter would say to himself, "This affects the character of the risk I am being asked to underwrite", and if the proposing insurer does not disclose that fact, the underwriter can, when he gets knowledge of the fact!perhaps after a loss has occurred—repudiate liability on the policy.
One must try to take a fair view of this matter. On the one side there is the proposing insurer who has knowledge of a fact which he does not know is material, and reasonably does not think that it could be. On the other hand one has the underwriter or the insurance company who, if told of the fact, would certainly think it material in that it would influence the premium or his judgment as to whether he would accept the risk at all. He might refuse it. Standing apart from that position one has to be fair to both sides. The loss has to fall on someone. Should it fall on the proposing insurer or on the insurance company? Suppose a loss does occur in respect of a risk which the insurance company would not have accepted at all had it known of the fact, but it was a fact which the proposing insurer did not think could possibly affect the risk. Who is to bear the misfortune? Is it to be the proposing insurer or the insurance company?
As the law stands at the moment, it is the proposing insurer who has to bear the loss. The underwriter or insurance company, when he or it acquires knowledge of the fact, can repudiate the policy. That may frequently happen—indeed it nearly always does happen—after a loss has occurred. In consequence, the proposing insurer has to bear the loss. He may be turned out of his house and home; it may be a heavy loss and a terrible misfortune to him. What does Justice really say in a matter of that sort? I hope I have got it right; I think I have. If I may quote from the Report it seems to confirm me:
"The effect of non-disclosure may be considered first, since it is a consequence of the

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general law relating to insurance contracts and does not involve any express term or condition. We take it to be well settled law—(a) that the duty of disclosure of material facts … applies to all classes of insurance and, (b) that the question in every case is whether the fact not disclosed was material to the risk, and not whether the insured, whether reasonably or otherwise, believed or understood it to be so."
The Report goes on later to say:
"The practical effect of the law on this point is that insurers are entitled to repudiate liability wherever they can show that a fact within the knowledge of the insured was not disclosed which, according to current insurance practice, would have affected their judgment of the risk. Whether the insuring public at large is aware of this it is difficult to say; but it seems to us to follow from the accepted definition of materiality that a fact may be material to insurers, in the light of the great volume of experience of claims available to them which would not necessarily appear to a proposer for insurance, however honest and careful, to be one which he ought to disclose."
I should add that they considered a number of other things such as arbitration clauses, proposal forms and so on. They then summarised their conclusions in this way in paragraph 11 of their Report:
"It appeared to us that such a state of the law, combined with the prevalence of such terms and conditions in insurance policies as we have described in the preceding paragraphs, is capable of leading to abuse, in the sense that a variety of circumstances may entitle insurers, after a loss has occurred, to repudiate liability as against an honest and at least reasonably careful insured. Material was available to us, in the form both of reported cases and of instances within the experience of those who supplied us with information, which showed that such abuses had in fact sometimes occurred. It was forcefully represented to us by those representatives of insurance interests who submitted memoranda or gave oral evidence that no reputable insurer would rely on a purely technical defence to defeat an honest claim. This may well be true, and we think that in general it is true, but it does not alter the fact that the ease with which a technical defence may be found means that in many cases an insurer is in a position to substitute his own judgment of the claimant's bona fides for that of the court."
If I may quote from my own experience, perhaps I may say that over many years of this class of litigation I always found that insurance companies were extremely jealous of their reputation. If the question whether a defence of nondisclosure (as we used to call it shortly) should be raised or not, got to (shall I say?) the policy-making section of the
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insurance company, they were extremely careful not to raise it if it could possibly be said that to raise it would in the circumstances be unconscionable. That I always found to be the case.
On the other side, I sometimes found that you might get a claims manager a long way from London, a long way from the board and a long way from senior executives, faced with a fairly small claim. He might perhaps have more regard to the individual case and less to the reputation of a large insurance company, and it never reached great heights and nobody knew about it; whereas if persons higher in the ranks of the insurance company had known about it they would have strongly repudiated the idea that any such defence should be raised.
Quite apart from that, with the best will in the world there are always cases as to which it is extremely difficult to say: Would it be conscientious in this case to raise the defence, or would it not? Often insurance companies came to counsel (for which I was extremely grateful to them), and often they got bad advice, I am sure—and I speak from experience; occasionally I received a reproof from the late Lord Goddard, who looked severely at me on occasions. Both sides, certainly counsel, did their best to see that a defence was raised only in a case where it could be properly raised. Unfortunately, opinions differ. In a given case, an honest insured might think it would be monstrous to raise it; and in the same case, equally honest insurers, including their counsel, might think it right and sensible that it should be raised. I sometimes felt that the insurance company did sustain harm. Their reputation was not served well on occasions when that sort of defence was raised, and perhaps it would have been better, on reflection, not to have raised it. But it is difficult to accuse those concerned. These questions are difficult matters of discretion and judgment, and both parties are trying to deal with the matter honourably, one with regard to the other. I certainly plead guilty in the matter; I am not trying to exculpate myself in the least.
What the Committee in those circumstances say in the form of their tentative proposal is
"We think that any or all of the following provisions could be introduced into the law

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and that no legal difficulties would arise in their application—
(1) that for the purposes of any contract of insurance no fact should be deemed material unless it would have been considered material by a reasonable insured."
In formulating this Amendment (my drafting is very imperfect) I have tried to give precise effect to that proposal. Your Lordships will see that I say that, notwithstanding any principle of law, an insurance company is not to be allowed to repudiate liability on a policy of insurance on the ground of non-disclosure—and these are the material words:
"if the policy holder … reasonably regarded such fact or facts as not being material to the assessment of such risk".
That, I think, would follow what the Committee recommended; and I would submit that it is fair.
One is really asking the question: where should the loss fall? Take the case, for example, where an insured person did not disclose some fact within his knowledge but reasonably said to himself—and I emphasise the word "reasonably"—"This obviously has nothing to do with it; it cannot possibly influence the nature of the risk." Where that is the situation, if a loss occurs and the insurance company gets knowledge of the fact that is not disclosed, in those circumstances they shall not be entitled to repudiate the policy. I hope that is a fair approach, and I am the more emboldened to put it before your Lordships because it emanates from this distinguished Committee. It is not simply my own idea, though I am bound to say that it accords with my own experience of these matters.
That is the proposal I have to make to your Lordships. I thought it right to propose it in the form of an Amendment to this Bill, which is designed generally to amend the law relating to insurance. Therefore it seemed not inappropriate to look at the recommendations which were formulated by this Committee some years ago and seek to embody by way of an Amendment what I think is the most important of their proposals. Certainly it is the least complex. The others, dealing with arbitration clauses and so on, are more complex and would not perhaps fit well within the context of this Bill. But this is a separate and distinct branch of the law which it has been thought—and I use those words
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deliberately in the light of the Report—is susceptible to change, and could be changed with advantage. Those are my reasons for proposing this Amendment, and I beg to move.
THE EARL OF ONSLOW: I very much hesitate to disagree with the noble Lord, Lord Stow Hill—he is far too clever for me to try that on—but one could say that there are rogues in the insuring public as well as a few rogues in insurance companies, and I should have thought that this Amendment would have given some people quite large opportunities for a little bit of fiddling. Secondly, as the noble and learned Lord, Lord Stow Hill, says, the vast majority of insurance companies do not use the excuse of non-disclosure unless there is a very sound reason behind it, and there is almost always a suspicion of something else as well. Thirdly, perhaps going a little way towards agreement with the noble Lord, where a contract of insurance is entered into the forms of proposal could have on them some more detailed clause or question, pointing out the advantages and disadvantages of the doctrine of utmost good faith and of the disclosure of facts.
LORD HAWKE: I think this Amendment is of the most glorious metaphysical character, and we could argue it until midnight, if we all had a go at it, but it seems to me that a great deal turns on the interpretation of the word "reasonably". It is perfectly possible to have grave doubts whether it is reasonable for a person to have made a disclosure or not to have made one. A very typical instance would be that of a person who has insured his house and subsequently has installed oil-fired central heating. He might not think it made the slighest difference to the risk, but the underwriter might say to him, "My experience of houses with oil-fired central heating is that they burn more easily than those that have not got it"—something like that. On whom is the burden of proof as regards what is reasonable? Has the insurance company to prove that it was unreasonable of the insured man to withhold these facts, or must the man prove that it was very reasonable of him to withhold them? I do not know whether the Department has had any discussions with the interests concerned outside this House on this particular matter,

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but I would humbly suggest that the noble Lord might withdraw his Amendment and my noble friend might take some counsel with the people who run the industry, to see whether it is practicable to do something of this nature.
LORD ALDINGTON: I almost hesitate to disagree with, and certainly to contradict, anything the noble Lord, Lord Stow Hill, may say to your Lordships on a matter of law, arising from his considerable experience in practising it. I think he would agree, however, that if he is going to alter the law he ought to alter it not only for insurance companies but for all insurers. Perhaps this Bill might not he the right place to do that. On the main point, one must be affected in one's judgment by the fact that a formidable body of lawyers—some of them no longer with us—of well-earned reputations known to your Lordships should reach this conclusion in 1957. One must weigh that up carefully in the balance. One must also weigh up the fact that though they reported in 1957, the pressure to implement that Report has not been very great, and that successive Governments over this considerable period of years—nearly 16 years—have not thought it right to proceed, and one can see why from the remarks made by both my noble friends who have just spoken.
One must realise and accept from the noble and learned Lord that sometimes this defence—because I think this is the evidence he gave to us—has been used in a way in which he and the friend of many of us, Lord Goddard, did not like. If that is so, anybody who was responsible for the company in those circumstances would regret it. From the experience I have of hearing about these things, my own feeling is that great care was taken before this defence was pleaded, and that it was pleaded only in cases where something material was not disclosed which would have affected the assessment of the risk. If that is pleaded in front of the court as such, I should have thought that gave the insured person a good safeguard. What the noble and learned Lord is proposing is to go a little further than that and turn it round from what might be reasonable for the assessment of the risk, to what an insured person, or a proposer for insurance, might at that time think is reasonably material
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for the assessment of the risk. That is the change. It is a small change apparently, but it might have the most devastating, effect—and this I have not had time to think out or seek advice upon—on the assessment of risks in the future. It is reasonable that we should all think about it further. It is also reasonable—and this I put to your Lordships—that a change of the law of this importance, affecting all insurers, not just insurance companies, might be better made in some other Bill than a Bill which is specifically confined to insurance companies.
9.24 p.m.
VISCOUNT COLVILLE OF CULROSS: My Lords, if there is one thing that I agree about it is, as the noble and learned Lord, Lord Stow Hill, put it, that this is something upon which we should take counsel and, for all I know, counsel's advice. And as my noble friend, Lord Aldington, put it, it is something we should think about. The situation is this. The Department does not have the same richness of evidence and experience that the noble and learned Lord, Lord Stow Hill, enjoys. If one looks at the whole of the Report which came out in 1957 and to which he referred, one sees in paragraph 10 that this very distinguished body said that the legal interpretation of this particular point had been obscured and, indeed, occluded by the inclusion of these arbitration clauses which had prevented most of these cases coming to court in recent years. The Report then made the points in paragraph 11, the whole of which he read out but which, as I understand the Report, do not necessarily relate to the particular matter to which this Amendment goes, because there were three points in their recommendations. I do not know what material was available to them and I do not know how much of it went to this particular one of their three points. They then went on to say, in paragraph 13, that there was a new régime which had then come into existence whereby the arbitration clause was to be outlawed and they hoped, therefore, that these matters would get back to the courts, where I think on a point of this sort the argument really belongs, rather than in the arbitration tribunal.
About the same time there was an equivalent inquiry in Scotland which published a Report as Command Paper 330, and that one said—and I think the law

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on this point is probably the same in Scotland as it is South of the Border—that they did not find there was anything particularly wrong on this point. If one looks at paragraph 35 of that Report one can see that. What I do not know, and what I do not think anybody knows, is what has happened since this new arrangement between the British Insurance Association and Lloyd's to get rid of the arbitration clauses, and we do not know what the effect of it has been. With great deference to the noble and learned Lord, Lord Stow Hill, I believe that the time when he was doing the sort of cases to which lie referred us was a little while ago, and probably not since a new arrangement about arbitration clauses was entered into. Certainly the Department has not had many complaints about it since that time.
I know the two conflicting points of view and I think they must be very carefully balanced. On the one hand, you have the branch manager who takes this bad point when he ought not to, as the noble Lord described it. I think there is also the point raised by my noble friend Lord Onslow that this defence may be the last resort of an insurance company which is otherwise liable to be "taken for a ride" by someone even though they cannot in any other way prove it. These are two extreme points of view. Somewhere in the middle we have to get a balance between the interests of the insured not to have the liability suddenly repudiated for reasons which he thinks are unjust, and the insurance company or the insurer in general—because I take the point made by my noble friend Lord Aldington—who ought to be informed of the things they have discovered from long experience are relevant to the assessment of risk, even if the person who is proposing himself for insurance has no idea whatever that these things have been discovered and are relevant.
In the circumstances, it therefore seems to me that I must take this point of view and suggest this to the Committee. For a long period of time this doctrine of maximum disclosure or complete faith—and we must avoid the dreadful Latin phrases—has been built up by the courts (judge-made law) and the Report describes what the latest stage of it is. I have enormous faith in the courts and judges of this
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country to continue to develop the law in such directions as will bring general justice, and unless there is some indication that the law has got stuck in such a way that it is causing injustice I would hesitate to introduce legislation—and I have at the moment no information to suggest that the law has got stuck. I am quite prepared to receive such information and the Department will be delighted to be told of any circumstances where this has gone wrong. We should very much like to know of cases which have been settled; and we could no doubt be told in confidence about these because people might not wish to disclose the whole thing. But I think the burden of proof for putting this in the Bill must be on those who wish to do so. In fact, on the noble and learned Lord, Lord Stow Hill, who, with all the experience that he had when he was a distinguished practitioner at the Bar, could with advantage give us some more up-to-date information, if he is able to do so. Because that was what deterred the Law Reform Committee in 1957 from being more positive. They did not know what the effect of the new arrangement would be. They did not say that this ought to be done; they merely said in the end that it would be a possible and feasible change but not one that they actively recommended.
This is an early stage of the Bill and I am sure that it is right to consider this point. I do not know whether the context is altogether correct, but I do not wish to discourage discussion for that reason. What would be most helpful to the Department would be to have the up-to-date experience and advice of those who work in this field, and if we could have some of that we could see the extent to which there is a mischief here and whether it is a mischief which is so severe that it ought to be cured by legislation. Would the noble and learned Lord accept that invitation and see if he can provide us with some more up-to-date material? He will forgive me if I say that his material was from about the time of this report. Could my noble friend Lord Aldington think about it, and also my noble friend Lord Onslow, to see whether they have instances of this going wrong, and then could we come back to it with this fresh information and discuss it, if your Lordships wish, at the next stage of the Bill?
LORD STOW HILL: As the mover of the Amendment, I believe that I do not infringe your Lordships' rules if I address your Lordships again. I am most grateful for what the noble Viscount, Lord Colville of Culross, has said. I wish I could disagree with him when he said that it is a long time ago that I had anything to do with it. Unfortunately it is years and years ago, and I wish that were not true. The relevance of that remark is that, while I shall do everything I can possibly do to help, I do not think that I have sources from which I can cull more up-to-date information. I rely very much on the Report. It is a most difficult branch of the law. I do not put this proposal forward in any sense dogmatically, I hope. It is very difficult to try and devise a just system for answering the question, "On whom should the loss fall?" I ventured to declare a personal interest when I last addressed your Lordships on this matter, as a person extremely well disposed to insurance companies and having had a great deal to be grateful to them for. I add to that that possibly I am being of some slight assistance to them, because I think on occasions—and I emphasise "on occasions"—that sometimes harm was done to them when defences of this sort were raised which, on reflection, might better not have been raised. I do not seek to exonerate myself. I was in with them and I constantly raised such defences as seemed open to them. But the difficulty is that one gets a kind of ground on which it is difficult to say where the right lies? Should one raise or not raise a defence of non-disclosure? Insurance companies have been regarded by too many people for years as "fair game" and they are rather like the French adage:
"Cette bête est méchante—quand on l'attaque elle se defend."
One can sympathise with them, and I do sympathise with them. I put the proposal for consideration. I absolutely agree with the noble Viscount that this is a matter which one should not rush into. I would not have ventured to put it before your Lordships had it not been considered in the Report, written by such very distinguished members. I hope that I have achieved some useful object if I have given some ground for people to reflect on this matter and to see whether there
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is some useful approach and whether the time has come (in spite of what the noble Viscount said about the lesser use of the arbitration clause) for some change to be made. I do not assert or deny. I do no more than put the proposal for consideration before your Lordships as this is a Bill to amend the law of insurance and as one has had that very distinguished Report lying on the table now for many years past it seemed that it should be resurrected and considered. In saying that I am in a difficulty about furnishing up-to-date information, that of course is true, but anything I can possibly do to help in resolving this problem I shall be only too delighted to do. Having said that, may I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
9.36 p.m.
LORD JACQUES LORD JACQUES moved Amendment No. 46:
After Clause 41, insert the following new clause:
Forms of policy
".—(1) Regulations may be made prescribing forms of policy which shall be applicable in the case of such class or classes of insurance business as may be prescribed in the regulations, and it shall he the duty of insurance companies carrying on insurance business of that class or those classes (except in the case of such insurance companies as may be excepted by such regulations from the application of this section) to issue policies in that form to all persons proposing for such insurance at such rates of premium as are reasonable in relation to the risk covered by such policies:
Provided that no insurance company shall be under a duty to issue such a policy to any person or persons proposals from whom for policies of insurance in a form normally issued by such insurance company in relation to such class or classes of insurance business apart from this section would not have been acceptable by such insurance company at rates of premium applicable normally in accordance with the rates of premium ordinarily charged by that insurance company in relation to a policy of insurance issued by that insurance company in that form, and
Provided also that no insurance company shall by virtue of this section be under a duty to insure risks under policies in a form so prescribed which in the aggregate exceed the reasonable scope and capacity of the insurance business carried on by that insurance company, no account for this purpose being taken of policies of insurance issued by that insurance company in a form normally issued by that insurance company apart from this section in relation to the class or classes of insurance business in relation to which a form or forms of policy are prescribed by such regulations.
(2) If an insurance company wilfully makes default in carrying out the duty imposed on such insurance company by virtue of this section, the Secretary of State shall have power to withdraw the authorisation issued in relation to that insurance company under the provisions of section 61 of the Act of 1967."
The noble Lord said: May I point out in the first place that this Amendment is a purely enabling clause. In fact, we do not use the word "shall"; we use the word "may". It is an attempt to give the Secretary of State powers to consult with the industry and, having consulted with them, to frame regulations which would provide for some standard forms of policy which would be offered by the companies in addition to any other policies they wish to offer on the given risks. We have in mind standard forms which would give a well defined cover against familiar risks. For example, we would suggest experiment in the first place with the standard household policy, which would be comparatively simple. It would avoid policy holders finding they are not covered because they had not read the small print, or, as often happens, they had in fact read the small print but had not understood what it meant. The policy holder would know what he was going to get, and each company could charge its own rate of premium for the particular policy. That would make it very clear how far there was competition. If the companies were all charging the same rate of premium for the standard policy, then it would be clear that there was little difference between them.
This is not introducing a new element into consumer protection. Over the years it has been necessary for Parliament to lay down, for example, that many goods shall only be sold in certain units of weight, sometimes in units of, say, eight ounces, so that the manufacturer could not put up a package which had only seven ounces in it and deceive the public by pretending that it was an eight-ounce package that was being bought. The distinction between different policies covering the same risk is far harder to detect than the difference between a seven ounce package and an eight ounce package. In many cases you would in fact require a lawyer to tell you the precise difference between a policy offered by one company and a policy offered by another company. Consequently, we feel that if ever there was a field where this kind of simplification was needed, to en
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able the customer to make reasonable comparisons, and having made comparisons to make the choice, it is the insurance field.
We would admit that there are some difficulties in drafting legislation for this purpose. The noble and learned Lord, Lord Stow Hill, has been kind enough to draft the Amendment before the Committee, and it may be that he will wish to add to what I have said. We hope that the Government will see an opportunity here for experimenting with consumer protection in this field of insurance. We believe it could well be done in the case of some risks, particularly the household risks, and we hope, therefore, that this will receive sympathetic consideration. I beg to move.
VISCOUNT COLVILLE OF CULROSS: The noble Lord, Lord Jacques, cannot help but receive sympathetic consideration after that speech. I recognise the very substantial point of consumer protection in what he has put forward. My trouble is that I shall have to have a tutorial from the noble Lord, Lord Stow Hill, on some of the arcana of the drafting because there are bits of this that frankly none of us has altogether fathomed at the moment. I am sure there is nothing wrong with it, but we have been rather "thick" on this side of the House, and I will come to it in a moment.
The idea of an experiment in this seems to me to be a very sensible one, but whether it should be done by means of regulations and the whole machinery of government or not seems to me to be another question. It is comparatively simple, is it not, to take the case that the noble Lord, Lord Jacques, took about a house, the ordinary house, and the householder who wants insurance from the house burning down, who wants insurance from people breaking in and stealing things inside, from the roof blowing off in the wind and from something being dropped by an aeroplane and going down the chimney. There are one or two other things I have not for the moment thought of, but they are a familiar type of risk. When one gets to that stage, one thinks "Fine, it must be possible to invent a perfectly simple set of conditions with no appreciable small print at all."
My mind goes back to the autumn of 1969, when in the village just across the

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county border in Norfolk from where I live, there were a number of what I would consider to be very ordinary, pleasant, simple houses, some of which were built on the rising land and some of which in fact had been built on what used to be the estuary of the River Waveney. But this river had been embanked in the sixteenth century and there were sea walls. Normally speaking, this was a perfectly good field, and the water level was well below anything to do with the houses. Bnt, unfortunately, as your Lordships may remember, it rained rather a lot and there was a most mammoth flood and the water got out of the river. There are many other examples of this sort—I simply take one from personal experience.
How does one deal with the exceptions, the particular points that, in the case of an individual property, have to be covered, or the things the individual householder does not want to have cover for some reason? How does one deal with these in the standard policy? What I am afraid of is that although you put down the ordinary risks and the ordinary coverage in a perfectly simple form, in order to be universally applicable, and deal with any situation, with any sort of house in any particular place, the owner of which might want to take advantage of the standard policy, you would have so many exceptions and qualifications that you would get more small print, not less. I think there is something in this if the noble Lord will just consider the possible variations that one could get.
We have also this, have we not? The householder himself—I think the noble Lord suggested that this should be an alternative to the ordinary form of policy, the non-standard form—will want to have this alternative to the ordinary policy to which he can make such adaptations as he thinks fit. He may say that he does not want necessarily to cover the house so that if it burnt down the whole cost can be paid to him; the premium may be far too high. He may be prepared to settle for something else and build a smaller house. There may be occasions of all sorts. I know cases of this kind myself.
Therefore, we are going to have, are we not, the standard form which, even in the house world, I think I have demon
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strated to the Committee, could become quite complicated. We will have side by side with that the non-standard form which is obviously adaptable to meet the individual case either of the property or particular circumstances of the assured. We shall have to have special rates in some cases because of certain features of one sort or another. Most of that is dealt with in the first proviso. Could the noble Lord, Lord Jacques—and I do not ask him to give me a great explanation to-night—at some time be so kind as to explain the second proviso? It seems to me that we may have got it the wrong way round here. As I read it, the insurance company is not to be under a duty to take on risks which go, in aggregate, beyond its financial viability; but when you consider its financial viability you are not to take account of certain other policies. This way of drafting seems to me to be almost a requirement that the insurance company shall take on business beyond what it viably can handle in terms of money. I do not think that this is meant, but that is why I say that I do not understand the second proviso, and that I should need an explanation of it.
Finally, is it really necessary or sensible to provide in subsection (2) that in the case of a default the Secretary of State withdraws the authorisation? I do not think that this fits in with what has been said at this Committee stage. So far we seem to have been rather careful about occasions when various forms of control should be imposed on an insurance company, and if anything is draconian, this seems to me to be the case in point. Having said that, I am sorry that my noble friend Lord Aldington has gone for a moment, but I should have thought that we should be able to do on a voluntary basis the sort of experiment that the noble Lord, Lord Jacques, wants. I see no reason why one should not encourage simplicity. I believe it has already started in a number of fields. I am entirely in agreement with him that the sort of rubbish that lawyers like myself write in the small print is wholly lamentable and does nothing but harm, and the clearer and simpler way is better, because usually the simpler one makes it the more effective it is, and certainly it is much more easily understandable. I am entirely at one with him in this part of the campaign, but, on reflection, would

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he not agree that, instead of having rather a complicated piece of machinery (even if it is enabling), with one or two rather difficult technical points to which I have just drawn passing attention, we might explore this on an experimental basis with the insurance companies with the encouragement and assistance of the Department, and see whether we can make progress that way? If the noble Lord will consider that, rather than pressing ahead with this Amendment to-night, I am sure it is something we could happily talk to him about.
9.48 p.m.
LORD STOW HILL: My ego would swell to an inordinate size if I found myself giving tutorials to so distinguished a person as the noble Viscount who has just spoken, but of course I would do what I possibly could. I am sorry to keep disagreeing with him, but he said that the drafting was no doubt excellent and that it was his fault that he could not understand it. The position is precisely the reverse. I entirely agree with him that more of a consent basis would be preferable to the sanction proposals contained in subsection (2). This is simply a sketch and an attempt to work out a plan, and one works out a plan always, when one is in Opopsition, with the disadvantage of doing one's best without skilled assistance.
VISCOUNT COLVILLE OF CULROSS: May I just say that I remember the position only too well, and will the noble Lord please not consider that my criticisms of drafting were directed at him in any way. They were simply an attempt to show that there are difficulties in this which one has to take a certain amount of trouble to avoid.
LORD STOW HILL: I entirely accept that. I was speaking perhaps in a slightly lighter vein of humour. May I explain the object of the second proviso? Clearly you cannot expect an insurance company to undertake business which is in excess of its capacity, but, on the other hand, one has in mind possibly that an insurance company which is already fully stretched by the issue of policies in its normal form, at its normal rate of premium, to cover the particular risks which are in the classes concerned, might say" It is not the slightest good your giving a direction to us to issue
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these new standard policies under the regulations you made. We are already fully committed." Therefore one has to try to devise some method to bring it about that the insurance company must make an endeavour to comply with the regulation or directive by issuing the policies in standard form, and it should not be a complete answer on the part of an insurance company to say, "We are already fully stretched by the issue of our normal policies; we cannot comply with what you want us to do, so we are outside the scope of your proposal". That is the sole objective and the endeavour, perhaps rather clumsy, has been incorporated in the second proviso to exclude from the account the company's normal policies when you are asking the question, "Can it undertake any of the new standard policies?" That is the objective. I quite accept that probably it would not work and would need a considerable amount of amendment.
9.51 p.m.
LORD JACQUES: I think two issues have been raised: first of all, whether this should be done in the way in which the Amendment seeks or whether it should be done voluntarily. I should like us to look for a half-way house between the two. I should like to see a very simple clause in the Bill giving the Secretary of State power to pursue this matter and in due course to make regulations so that all companies fell into line with the standard policy when there had been proper consultation, but without the complication there is in the Amendment as it is now. A simple enabling clause assuming that any hedging or provisos could if need be go into the regulations and need not be in the Bill itself. I should prefer something in the Bill, but something quite simple.
The second issue that has been raised is what is to be done with the special cases. I think this whole problem should be approached in much the same way as the multiples have approached the sale of goods to the consumer, especially the way in which they have approached the sale of fashion goods to the consumer. They do not provide all sizes; they provide only the size which is in demand and which can be mass-produced economically. I should like to see it done in that way so that there was

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a standard policy that would fit most cases, but not necessarily all cases. The insurer would always have a way out: "Yes, you can have the standard policy, but in your particular circumstances the premium will be more"; because your Lordships will remember that I have stated ail the time that the insurer should be completely free to fix the premium.
So there are two ways in which to be flexible. The insurer can say, "The terms of this policy do not cover your circumstances, but I can offer you another policy", or he can say, "In order to get the policy in your circumstances the premium would be £x plus". I think there is plenty of scope for flexibility. Would the Minister give consideration to the possibility of a brief and simple clause in the Bill authorising the Secretary of State to consult with the industry with a view to there being common policies in addition to the policies issued individually by the companies?
VISCOUNT COLVILLE OF CULROSS: May I say that to do that one needs no legislative authority at all. There is no problem about the Department consulting with the industry to do the sort of thing which the noble Lord has been talking about. I do not think it needs regulations either. We could get an agreement. It would need to be an experimental one in the first place. I do not think we need anything in the Bill at all, but certainly I should like to consider this point with the noble Lord and with some of the ideas which I know he can introduce from his wide experience in meeting the demands of consumers of all sorts. But I do not think we necessarily need anything in the Bill, and from what the noble Lord has just said he would need to convince me that we should actually need legislative powers at all.
THE EARL OF ONSLOW: There is one other very important point to raise on this matter. The British insurance industry aims always to tailor-make its policies and I think, on the whole, that it does. Again, I have to declare my interest in that I work for an insurance broker. Lloyd's tend to say that they will insure anything, although there are exceptions to that, and that meets the point of the noble Lord, Lord Jacques, about all sizes in the fashion world. The industry
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tries to produce all sizes. Secondly, one of the main contentions which the British insurance industry is making when it goes into the European Economic Community is that it wants to be able to offer this "all sizes" form of policy—
LORD JACQUES: There is a misunderstanding here. I am not suggesting that the insurance industry should offer all sizes, because it is already doing that. What I am suggesting is that, in addition to offering all sizes, there should be a standard policy which is common to all companies, and because it is standard there could be comparisons of premium as between one company and another. In that way the consumer would be able to see how far there was in fact competition.
THE EARL OF ONSLOW: I take the noble Lord's point. Most insurance company policies vary slightly, but there is very little difference in the premium charged for them. But if we start trying to regulate the wording of insurance company policies by law or by directive, we get into the trouble which the British insurance industry is accusing some of the Continental insurance industries of getting into in the E.E.C., and stultifying competition. Having listened to most of what the noble Lord has said I am sure that that is not what he wants to happen.
LORD HAWKE: I agree with what my noble friend has said. There is intense competition and a great many of the policies are really, to all intents and purposes, exactly the same. Companies know that if they cut the rate then, sooner or later, they will go broke. The business is as fine cut as that and we have seen, as I said on Second Reading, that when you insure you pay for what you get. If you try to get cut-price insurance you will get cut-price treatment; and if the price is cut too much you will find when you make a claim that the gentleman is not there to pay you out. It is as simple as that. It is the most intensively competitive business in the world. I have been involved in it overseas, where the competition was such that the agents automatically gave away all their commission except for 1 or 2 per cent. When you have a low standard of living and so on, you can manage to live on that; but in this country it is not quite so easy. But the competition is

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quite intense and I really do not think there is the slightest need for this standard policy business. The policies will certainly not have any less small print than the present ones, and I cannot see that they will do any good whatsoever.
LORD JACQUES: If there is very little difference between the policies issued by the various companies at present, I should have thought the idea would be very easy to put into operation. As I understand it, the Minister would like to think about this matter between now and the next stage of the Bill, and we, too, should like to think about it. In the meantime, and on the understanding that we have not dropped the matter but are going to think about it, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clauses 42 and 43 agreed to.
Clause 44 [Minor and consequential amendments and repeals]:
10.0 p.m.
THE EARL OF LIMERICK THE EARL OF LIMERICK moved Amendment No. 48:
Page 33, line 6 at end insert—
("() Any regulations made by the Industrial Assurance Commissioner by virtue of paragraph 6(2) of Schedule 2 to the Act of 1958 which are in force immediately before the passing of this Act shall, so far as they could have been made under subsection (1) of section 37 above, have effect as if made under that subsection.")
The noble Earl said: The effect of this Amendment is simply to preserve in force regulations made by the Commissioner under the powers conferred upon him by the Insurance Companies Act 1958 in so far as they would be within the powers conferred upon him by Clause 37(1) of the Bill. I beg to move.
Clause 44, as amended, agreed to.
Clause 45 [Interpretation]:
THE EARL OF LIMERICK: This Amendment, Amendment No. 49, rectifies a printing error. I beg to move.
Amendment moved—
Page 33, line 37, leave out ("(2)") and insert (1)").—(The Earl of Limerick.)
Clause 45, as amended, agreed to.
Remaining clauses agreed to.
Schedule 1 [Minor and Consequential Amendments]:
THE EARL OF LIMERICK: This Amendment, No. 50, again rectifies a printing error. I beg to move.
Amendment moved—
Page 36, line 35, leave out ("20") and insert ("19").—(The Earl of Limerick.)
Schedule 1, as amended, agreed to.
Schedule 2 [Repeals]:
THE EARL OF LIMERICK: With Amendment No. 51 I can conveniently take Amendments Nos. 53 and 54. These three repeals are all consequential upon the Amendment to Clause 37. I beg to move the three Amendments, Nos. 51, 53 and 54.
Amendments moved—
Page 37, line 13, at end insert—

("13 & 14 Geo. 5. c.8.

The Industrial Assurance Act 1923.

Section 18(1)(a)."

Page 37, line 45, column 3, at end insert ("Section 36(1).").
Page 37, line 49, column 3, at end insert ("In Schedule 5 the entry relating to section 18 of the Industrial Assurance Act 1923.").—(The Earl of Limerick.)
THE EARL OF LIMERICK THE EARL OF LIMERICK moved Amendment No. 52:
Page 37, column 3, leave out lines 29 to 31 and insert—
("Sections 25 and 26. Section 28.")
The noble Earl said: The effect of this Amendment, No. 52, is to repeal Section 26(1) of the 1958 Act, which is now spent, and Sections 26(3) and 28 of that Act, which are consequently also spent. I beg to move.
Schedule 2, as amended, agreed to.
Schedule 3, [Application to Northern Ireland]:
THE EARL OF LIMERICK: Amendment No. 55, rectifies a printing error. I beg to move.
Amendment moved—
Page 39, line 21, leave out ("(13)") and insert ("(3)").—(The Earl of Limerick.)
THE EARL OF LIMERICK: This, again, is to rectify a printing error. I beg to move.
Amendment moved—
Page 39, line 27, leave out ("(a)") and insert ("(b)").—(The Earl of Limerick.)
THE EARL OF LIMERICK: This Amendment is consequential upon the Amendment to Clause 34—that is, Amendment No. 36. I beg to move.
Amendment moved—
Page 42, line 2, leave out from ("for") to ("in") in line 3 and insert (""8" there shall be substituted "19"; and").—(The Earl of Limerick.)
Schedule 3, as amended, agreed to.
Remaining Schedules agreed to.
In the Title:
THE EARL OF LIMERICK THE EARL OF LIMERICK moved Amendment No. 58:
line 3, leave out ("life").
The noble Earl said: This Amendment rectifies an error in the Long Title of the
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Bill in its description of the effect of Clause 41. That clause amends Section 2 of the Life Assurance Act 1774 by validating certain group policies, both life and non-life, and the reference to "life" in the Long Title needs to be deleted. I beg to move.
House resumed: Bill reported, with Amendments.

SLOUGH ESTATES (UTILITY SERVICES) LIMITED BILL [H.L.]
Examiners Certificate that the further Standing Order applicable has been complied with, received: Ordered to lie on the Table, and Bill committed to a Select Committee.
HUMBER BRIDGE BILL
Brought from the Commons; read 1ª, and referred to the Examiners.
GLAMORGAN COUNTY COUNCIL BILL [H.L.]
Returned from the Commons agreed to, with Amendments: the said Amendments considered and agreed to.
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