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Clause 13—(Disclaimer Of Agreements And Leases)

Volume 464: debated on Thursday 28 April 1949

The text on this page has been created from Hansard archive content, it may contain typographical errors.

I beg to move in page 10, line 25, to leave out "on or."

I suggest that it would be convenient if this Amendment and that to the same line which follows were considered together.

The effect of these two Amendments on the wording of the Clause would be that it would read:

"Where any company which comes into public ownership under this Part of this Act has made or varied an agreement or lease after the date of the passing of the Act and before the date of transfer …"
Clause 13 is one of the Clauses which some hon. Members would look upon as a lawyer's Clause, rather like Clause 7, for which we had such a ridiculously short time for discussion. In fact, it is a Clause very wide in its effect because it covers every contract or agreement—I ask hon. Members not to be frightened by the use of the word "lease" in the Clause—of any sort or kind whether it is relating to the renting or leasing of property or the purchase of material, or whether it is a service agreement, provided they have not expired at the date of the passing of the Act. Therefore, my first contention that this Clause is of very wide effect is borne out.

It is impossible for the House to consider the Amendments properly without some idea of the general purpose of the Clause as a whole. Obviously, it is ridiculous to discuss the dates between which the provisions of the Clause are to be effective unless it is known what the Clause is about. As I have already indicated, the Clause relates to every kind of agreement into which any company which comes into public ownership has entered provided that the agreement was made or varied on or after a particular date, and if—I would ask the House to note these phrases—
"the Corporation are of the opinion"
that the making or variation of the agreement or lease
"was not reasonably necessary for the purposes of the activities of the company,"
or that it was made or varied
"with an unreasonable lack of prudence on the part of the company, regard being had in either case to the circumstances at the time,"
the company shall if so required by the Corporation, give notice of disclaimer to the other parties to the agreement or lease. That is the first point in explanation of the Amendments which I am putting to the House. The House will note that subsection (1) also deals with the possibility of arbitration, if there is some disagreement between the parties in regard to the matters to which I have referred.

Subsection (2) deals with what the arbitration tribunal may do. Again there is reference to the phrase
"not reasonably necessary,"
and to the phrase that the agreement
"was made or varied with an unreasonable lack of prudence."
There is a further new proviso to the effect that if the arbitration tribunal is satisfied of the matters aforesaid but is also satisfied
"that the making or variation of the agreement or lease was a proper transaction made in the ordinary course of business, regard being had to the circumstances at the time,"
and was in no way connected with any part of the provisions of the Act, the tribunal can revoke the notice. I mention that fact in fairness to the Government because it is an important addition to the powers of the tribunal. Subsection (3) deals with the consequences of such a notice, given as required by the Corporation and if necessary supported by the tribunal. It says that when such a notice has been given, the agreement shall be
"deemed to be frustrated or, as the case may be, the lease shall be deemed to be surrendered, on the date on which the notice of disclaimer becomes final,"
and the parties thereto for that reason are to be discharged from further performance of their obligations. I shall mention again—and I must say that it is a somewhat technical matter from the legal point of view—the consequences of that word "frustration."

The only other effect of the Clause which is relevant to the question of the date is in subsection (5) where it says that where there has been a reference to arbitration, the tribunal
" shall have exclusive jurisdiction to determine claims arising under the agreement or lease,"
and that the tribunal
" may, in the case of a lease, on the application of either party thereto, make such modifications (if any) of the provisions of the lease, relating to repairing obligations or any other provisions."
as they think are just. It is obvious that if the Clause goes through it will be of very wide effect indeed.

9.15 p.m.

The next matter to which I wish to draw the attention of the House is the question of the dates. The Government seek to put this very extensive power of antedated frustration back to 21st October, 1947. The first thing we have to consider is the reason for the choice of that date. We heard the Minister of Supply speak about it during the Committee stage. I know that the reason which the Government put forward for that date is that the Prime Minister on 21st October, 1947, made an extremely vague and guarded statement about the nationalisation of the iron and steel industry. He made some statement which did not disclose in the least the extent to which this Measure would go. One must ask where this principle of selecting a date will stop. If any pronouncement by any Minister is some two years afterwards to be fixed as an operative date, it seems to me that very great dangers are involved from the constitutional and political points of view.

The beginning of the period is 21st October, 1947, according to the Government's intention. The end of the period may be 18 months after 1st May, 1950. We may therefore have all contracts and agreements entered into between 21st October. 1947, and November, 1951. affected. That is a four-year period, less than one-half of which has already passed and more than one-half of which is still to come. We suggest that instead of it being 21st October, 1947, it should he the date of the passing of the Act. If I may anticipate a comment which may be made, it will be that it would have been much better to state the date as that of the introduction of the Act or at least of the Second Reading of the Bill. In certain circumstances that would be a reasonable contention, but we have seen how this Bill has been completely altered from stage to stage. The Government have introduced such radical alterations in the provisions of the Bill as compared with those that were in it when it went up to the Standing Committee that it is very much more prudent and reasonable to take the date we suggest, the date of the passing of the Bill. Only then will people have a real idea of its terms. If hon. Members look at the alterations which have been made in the Bill since it went to the Committee, they will see the force of my suggestion that it would be wiser to take the date of the passing of the Act.

What will be the effect of this portion of the Clause if it is not altered? The first consequence is that it is bound to put into a state of complete uncertainty those who are seeking contracts with publicly-owned companies which come within the meaning of the Clause. In answer to that point during the Committee stage, the right hon. Gentleman said that he had given a perfectly clear indication that the Government or the Corporation would support any reasonable contracts entered into by any of these bodies. That may be the intention of the right hon. Gentleman, but the Clause will mean the examination of almost an infinity of individual bargains; and with regard to these matters it is extremely easy to be wise after the event and to say, looking back on it, that a thing was not reasonably necessary. What does "necessary" mean? I suppose it means "essential," a word of which we have heard something in other parts of the Bill. It is very easy to say afterwards that a thing was not really reasonably essential for the carrying on of the business. It is also easy to criticise when one is in possession of the subsequent facts—and this applies to a great many criticisms on general matters which hon. Members opposite often make—and it is easy after the event to accuse a person of "unreasonable lack of prudence."

I say, therefore, that many of these companies which may become publicly-owned and those who contract with them will be in a considerable state of uncer- tainty as to whether or not their contracts will be repudiated. If it is not amended, this Clause will involve an attack upon the sanctity of contract. It is like a great many other attacks which the Government have made in the course of their history. I believe that they have made a series of attacks in the sphere of finance upon thrift, and in this field they are making a series of attacks upon the rule of law. These attacks are all the worse because a good many hon. Members opposite are quite sincerely unconscious of the fact that they are making such attacks.

This business of making people suspicious and uncertain whether bargains entered into will be carried out, of giving a public body the right, possibly years after the contract has been entered into, of coming along and disclaiming it, is I say, an attack upon the sanctity of contract and is an extremely serious matter. The effect of a disclaimer in accordance with the provisions of this Clause is that the contract becomes frustrated, which means that the party to it, which may have suffered damage by reason of the contract being frustrated, has no right of any sort against the Corporation or against the publicly-owned company with which it contracted. That is the consequence of the use of the word "frustration" to which I referred earlier.

The defence of the Clause generally, as put forward by the right hon. Gentleman, is, I think, first of all, that it is in accordance with precedent. Of course, there has been a precedent for every sort of crime for a very long time. There are plenty of precedents for robbery and treachery and for every sort of squalid, discreditable conduct, and the mere fact that there are precedents for this sort of thing is no serious argument at all. The much more substantial argument which, no doubt, the right hon. Gentleman will put forward is that the object of the Clause is to prevent people from deliberately attempting to evade the purpose of the Bill. So far as I am concerned on that issue, I think we in this House accept such an intention—and I am glad to see the right hon. Gentleman, the Financial Secretary to the Treasury, making one of his rare visits to our proceedings—and we certainly accept in the realm of tax evasion that we retrospectively endeavour to make attempts at evasion nugatory. I agree that in a contract entered into deliberately in order to evade the provisions of this Bill, it is quite right that the Corporation should have power to deal with such an agreement or such a contract, but it does not follow from that that in all agreements and all contracts these criteria, these wide terms—reasonably necessary, or unreasonable lack of prudence—should be introduced. These are quite different criteria from that of a deliberate attempt to evade the provisions of the Bill.

I have listened with great interest to the speech of the hon. and learned Member for Wirral (Mr. Selwyn Lloyd). He is one of the few lawyers I know who can make a legal argument intelligible to a simple layman like myself. May I put a point to him? He said it is always difficult to determine after the event whether the thing was reasonably prudent or something of that sort. But difficult as that is, at least it is making a judgment upon matters of fact. What he is now saying is that it would be right if we said we would frustrate only contracts which were deliberate evasions. Surely, in order to decide whether a certain contract was entered into deliberately as an evasion, one would have to judge upon the motives of the person carrying out the action? Surely, he would agree it is always much more difficult after the event to judge about people's motives than to judge about their actions.

While thanking the hon. Gentleman for the compliment he has paid me, and echoing the well-known classical words of warning about certain people bringing gifts, I would say that the answer to his point is this. Of course, it is more difficult to prove the state of a man's mind than to prove a certain concrete fact; but the courts are constantly having to try to do that. Every offence involving fraud also carries with it the intent to defraud, which is an essential ingredient in the offence and has to be proved. In this realm it is a matter which the courts are having to do all the time. I concede that it is difficult, but on the whole this is a field in which, if there is a guilty intent, it should be proved according to the ordinary canons on the criminal law. That is the answer to the hon. Member for Reading (Mr. Mikardo).

I was dealing with the second objection to our Amendment which the right hon. Gentleman might be expected to put forward. I concede that, as far as deliberate evasion is concerned, it is right that there should be such a Clause, but this Clause goes too far. Thirdly, it will be said that this is really no new thing, because the principle of disclaimer is already well-known in view of the provisions of the Companies Acts and of the Bankruptcy Acts. It is already well-known in cases where a company is wound up or goes into liquidation, or where an individual becomes bankrupt, that contracts can be disclaimed. That is a very obvious result. If someone goes out of business the natural effect is that any contracts he has entered into cannot be carried on, and it is obvious that the liquidator, or the trustee in bankruptcy or whoever it may be, should have the right to disclaim such contracts.

There are, however, certain important safeguards to that right. First, there are clear-cut provisions regarding applications to the court as to the conditions under which that disclaimer can take place. Second—this is a point to which I attach particular importance—the person injured by the operation of the disclaimer has the right to become a creditor of the company to the extent of the injury he has suffered by that disclaimer. It is that right which does not exist under the provisions of the Clause. To my mind it is something which most certainly should exist in the interests of all those who are entering into these various types of contract with these public companies. This is a point of real importance and I ask the right hon. Gentleman to think about the whole matter again.

9.30 p.m.

I beg to second the Amendment, which was so ably moved by my hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd).

I should like to bring two or three points to the notice of the House and to attempt to convince the Government, if I can, that there are provisions in the Clause which are foolish, even from, their own point of view. Even assuming that they will carry out the main features of this Measure, in spite of all the arguments against it, need they do something that is so injurious to the general commercial interests of this country as throwing genuine doubts on the sanctity of contracts? I wonder what hon. Members would think if some foreign Government were acting in this way and thereby injuring British interests.

I criticise this Clause and support the Amendment on three main grounds. I agree with my hon. and learned Friend that no doubt the Government require some provision to prevent acts committed after the passage, or possibly the introduction, of their Measure which would tend to frustrate their objects. But what have they done? From what day do they date the contracts with which they seek to interfere? They provide a date the only reason for the choice of which was that the Prime Minister then announced that the Government proposed in this Parliament
" to nationalise the relevant portions of the iron and steel industry."—[OFFICIAL REPORT, 21st October, 1947; Vol. 443, c. 33.]
He announced that without indicating what the relevant portions were, or what was under consideration. If that vague announcement is to be sufficient for the choice of a date after which all contracts can be called into question, let me take the analogy of a foreign statesman making a vague announcement of some impending legislation and thereupon, years later, introducing a Measure under which all contracts legitimately made thereafter can be called in question. I say that that date is obviously and clearly wrong.

Let me proceed to the ground on which these contracts can be called in question. The ground is not that the agreement was bad, or malevolent, or that there was anything blameworthy of any kind—indeed it may be extremely praiseworthy—but it is sufficient to call it in question if it were "not reasonably necessary." It might be wholly desirable and completely in the national interest, but it can still be interfered with if it was "not reasonably necessary." The words referring to "lack of prudence" are not connected with "and" but with "or." Surely the Government do not wish to take power to interfere with agreements and contracts which are desirable in the national interest and entirely free from blame, merely on the grounds that they were not essential.

My hon. and learned Friend rightly drew attention to the words of the proviso to subsection (2) which provide a possible escape even if those words apply. But that involves a transference of onus and a general throwing into doubt of the sanctity of contract and the continued validity of agreements which is bound to be against the interests of a great commercial country. Why are the Government taking this step? It is extremely unlikely that many contracts will be affected. For the sake of one or two with which they may possibly wish to interfere, and which they might define much more narrowly, they are casting doubts on an enormous number of agreements made over a long series of years.

The only safeguarding provision, which is no doubt designed to make the thing a little more tolerable, is subsection (7), which I mention in fairness to the Government to show that it is possible to avoid some of these consequences by consulting the Minister in advance as to whether various agreements or variations are right or wrong. That is no sufficient safeguard and is no defence whatever for the Clause as it stands. For those reasons, I ask the Government to reconsider this Clause.

I hope that the House will not accept the Amendment. I think it is agreed in all quarters of the House that Parliament must take steps to prevent its intentions from being frustrated. It is probably also generally agreed that it is within the power of a board of directors of a company which is to come under public ownership to undertake certain actions—dissipate the assets, make leases and agreements of various sorts—which would, if carried out, frustrate the intentions of Parliament.

We are really only discussing one question in connection with these Amendments. We say that any agreement or any lease entered into as from 21st October, 1947, can be challenged by the Corporation if it appears to them that such lease or agreement was made—I am paraphrasing the words—unnecessarily in view of the circumstances of the times, and the intention of which—I know that the word "intention" does not appear in the Clause—was to evade the intentions of Parliament. I know that those are not the words that appear in the Clause. What Parliament must do, and what we are doing here, is to prevent a company from entering into an agreement such as one to give a pension of £20,000 a year to a managing director or something of that sort, which may be perfectly legal but which would in fact be with the obvious intention—though intention cannot, of course, be proved—of anticipating this Bill if it were passed by Parliament.

The only difference between the Opposition and ourselves on this Amendment is that we say that any such, what I will for brevity call, "funny" agreement or lease, can be challenged if it is made on or after 21st October, 1947. Those who move the Amendment for the Opposition say "Yes, but such an agreement or lease should only be challenged if it is made after the date of the passage of the Bill." That is the only difference between us. I say that, accepting the principle that we must protect ourselves in this matter, and that we cannot allow things to happen which will weaken the powers and resources of the Corporation, it is wholly unreasonable to make the operative date that of the passage of the Bill instead of the date on which the whole industry was told definitely and clearly that a nationalisation Measure was to be brought before Parliament by the Government. In all the previous nationalisation Measures we have had a similar Clause to prevent the intentions of Parliament from being frustrated. Such a Clause has always dated back to the date when the industry concerned has had a clear indication from the Government, either through the Prime Minister or the Deputy Prime Minister, that that industry was to be nationalised. In this case a very precise statement—not the vague statement as has been suggested by the hon. and learned Members for Wirral (Mr. Selwyn Lloyd) and the Combined English Universities (Mr. H. Strauss)—was made by the Prime Minister on 21st October, 1947.
" I believe there is an overwhelming case in the national interest, and I would like to say, in order to avoid any doubt there might be, that it is the intention of His Majesty's Government in the present Parliament to nationalise the relevant portions of the iron and steel industry."—[OFFICIAL REPORT, 21st October, 1947; Vol. 443, c. 33.]

I do not think there was any need to define at that stage what were the exact proportions. That statement told the whole iron and steel industry that it was the intention of the Government to nationalise large portions of it, and if after that date any peculiar lease was entered into, or any agreement was made, it is open, I suggest rightly, to the challenge of the Corporation. If the person who made it thinks it was a perfectly proper and prudent one, and that under the circumstances of the time it should have been made, he can, of course, appeal, and the matter will be settled by arbitration.

But unless there is a provision of this sort in the Bill, it would be quite possible for all sorts of wrong contracts to be entered into unnecessarily, or, maybe, for the passing of money in the possession of firms to private individuals or for the making of agreements which would be wholly harmful to the activities of the Corporation without any right of challenge whatsoever. I suggest, therefore—and I think the House will agree—that if any such peculiar contract was entered into after the industry as a whole had received notice that nationalisation would take place, it is right that those contracts should be able to be examined so that the people responsible should not get away with it, and so that the intentions of Parliament should not be wholly frustrated. That can only be done by a Clause such as this.

The right hon. Gentleman spoke about "peculiar contracts" being entered into. I am sure he does not wish to mislead the House by a paraphrase which is not a fair one, but if he will look at the words in the Bill he will see that the agreements that can be interfered with are any agreements which were not reasonably necessary. They may have been desirable and in the national interest, but they can still be interfered with. How can he justify that?

I was describing the type of agreement that was likely to be challenged. The industry knows perfectly well—it has been fully stated —that no contract nor lease entered into in the normal course of business will he challenged. If any company has any doubt about any such contracts into which it proposes to enter, it can ask my opinion, and if I say, "That is obviously O.K.," there is no likelihood of a challenge taking place later, and it has nothng to worry about.

In point of fact, there is no indication whatever from the industry that boards of directors are in the slightest bit disturbed by this Clause. They know perfectly well that no ordinary business agreement is likely to be challenged by the Corporation. The number of applications submitted to me for my opinion regarding any unusual type of contract has been extraordinarily small. That does not surprise me because I do not anticipate that there will be any widespread attempt, or, indeed, any attempt at all, on the part of boards of directors to take advantage of the situation and to get away with some agreement or some clause which might be to their personal interest and to the detriment of the Corporation. But we are taking over a very large number of companies, and it is only right that we should take full precautions in case there are some black sheep somewhere who might try to frustrate the intentions of Parliament.

9.45 p.m.

We are arguing, as I say, solely on the question of date. Is it right that we should look back to any such contract or agreement as from the date of the announcement by the Prime Minister of nationalisation, or should we only look back from the date of the passage of the Act? If we are to take these powers at all—and apparently there is complete agreement that we should, although some hon. Members disagree with the exact wording of the Clause which I think is exceedingly wise, I suggest it is almost self-evident that those powers must date back to the time when the nationalisation of the industry was precisely and definitely announced by the Government.

Therefore, I ask the House to reject his Amendment. I ask hon. Members to bear in mind that if anybody is aggrieved they have power to appeal to arbitration. I ask them to bear in mind that there is no danger whatsoever to any normal business contract which takes place and that there is no worry or anxiety in the industry about this Clause as far as we can tell. It is a wise, precautionary measure, and we would not be doing our duty to Parliament if we allowed any individual company to get away with agreements or contracts the purpose and result of which was to frustrate what Parliament had in mind and intended.

Before the right hon. Gentleman sits down, could he say from his recollection, as Parliamentary Secretary to the Ministry of Transport at the time, whether the Transport Act contained a similar provision, and if so, whether there was any attempt to make make a retrospective date as there is on this occasion?

The Transpor Act, the Electricty Act and the Gas Act had similar provisions, and in all those Acts the relevant date was 19th November, 1945—a long time before those Measures were introduced into the House.

There have been two remarkable aspects of the speech of the right hon. Gentleman. The first was his total inability or lack of desire to deal with the points that were marshalled so formidably by my hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd). The second was the extreme difficulty—most unusual in the case of the right hon. Gentleman—in finding appropriate language to describe his own Bill. For the moment I was a trifle puzzled when the right hon. Gentleman referred to "funny contracts." In most of our nurseries a distinction is drawn between "funny ha-ha" and "funny peculiar." And I was relieved that in a short time the right hon. Gentleman condescended to inform us that "funny peculiar" was the sense in which he was referring to the contract. I think we on this side of the House are entitled to say that "funny ha-ha" will be the inevitable verdict of posterity on the wording of this Clause.

Now let me take the points because, after all, this is a serious matter, and even the right hon. Gentleman cannot contemplate another invasion of the sanctity of contracts without at any rate a prima facie justification for it. First I will take the question of time. I should be the last—and if I were not the last, I should be the first to be reminded of it—to deny that all governments bring in retroactive legislation at some time, and every Law Officer has had to do it with regard to the Finance Acts dealing with tax evasion. However, I put this principle forward as quite unchallengeable; that the justification for retroactive legislation is that a reasonable and definite warning has been given to people likely to practice the matter to be struck at, and they have been given the opportunity to avoid that course.

May I ask the right hon. and learned Gentleman if that warning was given in 1931?

The glorious vagueness of the right hon. Gentleman's connotation makes his question difficult to answer in the limited time.

If the right hon. and learned Gentleman does not take the allusion, may I remind him that the judges had their salaries reduced, and all the men in the Navy, too, and that they were sacred contracts in each case?

If the right hon. Gentleman wishes to bring to our memory the disastrous situation to which the conduct of his friends brought the country, and the extremely stringent and unpalatable course that had to be taken, the right hon. Gentleman can sup on his own memories, but he will not, with all his friendly, tangential charm, make me wander from my own discussion.

I want to come back to the lack of answer of the Minister. And first I come back to the question of the warning and the time. The right hon. Gentleman has quoted the words of the Prime Minister, when he expressed in October, 1947, the intention to nationalise the relevant portions of the industry. The right hon. Gentleman has conveniently forgotten that in May of 1946 his predecessor spent some hours in this House, to the mystification of the Members of every party, trying to clarify his own mind as to what portions might be relevant. My right hon. Friend the Member for the City of London (Sir A. Duncan) concluded, after that demonstration of relevance, that 5 per cent. of the industry might, if it were very clever, know if it was in danger of nationalisation or not. After that exhibition, for the right hon. Gentleman tonight to come forward and say that vague words about relevant operations are a warning to wantons about the possibility of retroactive legislation, is something beyond even his imaginative discourses which have so delighted us all.

Let us just pursue that for a moment. He has left entirely unanswered and unargued the point which my hon. and learned Friend made, that there would be four years of contracts. Then he goes sliding from that undefended position to one which he seeks to defend. "Well, anyway," he says, "the House is agreed, all parts of the House are agreed, that if there are deliberate attempts to evade they should be guarded against." Of course, my hon. and learned Friend said that he was prepared to accept that. If the right hon. Gentleman will agree in another place to alter this Clause to the wording which my hon. and learned Friend suggested, we shall be quite agreeable. The interesting thing is that the right hon. Gentleman, when he comes to peruse his words in HANSARD, will find that the vague and incorrect paraphrase which he gave of the words of the Clause were indeed an approximation to the words suggested by my hon. and learned Friend.

Will he tell us, or will he consider before the Bill reaches another stage, what has he really in mind? If he has in mind, as his paraphrase tonight suggested, that he is really out to catch intended deliberate evasion, then let him put that in the Bill, and we shall help him, and with the greatest eagerness. But if that was a mere façon de parler, based on incomplete understanding of his own Clause, let me remind him of what his own Clause says. It does not say anything, as he admitted, about intention. What it says is this. It must either be:
" not reasonably necessary for the purposes of the activities of the company—"
—or the alternative. There is no question of intention there. That is the objective test. It will afterwards be ex cathedra in the atmosphere of events years after the events under which the contract is made.

Let us take the alternative:
" unreasonable lack of prudence on the part of the company…"
The right hon. Gentleman really must not attempt to get away with the affectation of being a simpleton to the House which knows him so well. No one knows better than the right hon. Gentleman that there is all the difference in the world between negligence and intention. It is one of the clearest differences in conception that can exist, and these words say:
"unreasonable lack of prudence…
The right hon. Gentleman says, with a wonderful fly-away air, "I am not giving you the exact words but it is really the equivalent of intention." Of course it is not the equivalent of intention. If the learned Solicitor-General has advised him that it is, then I am even more staggered than by any other proceedings under this Bill.

The hon. Member for Reading (Mr. Mikardo), in a very helpful and temperate interruption of my hon. and learned Friend, said that there are difficulties about the question of intention and proof. I am sorry that the hon. Gentleman is not here because I wanted to answer his point, and because he expressed a complimentary view towards lawyers who made their points clear. Lord Bowen, some years ago, made his point clear by saying that the state of a man's mind, which is intention, is just as much a matter of fact as the state of his digestion, and I do not think that the hon. Member for Reading would find much difficulty in trusting the state of his own or anybody else's digestion now or at any other time.

The same applies to the question of intention to evade. Of all the injustices that are done to lawyers, the greatest is the layman's assumption that there is difficulty in deciding a question of fact. Anyone who has any experience in the law and, I quite respectfully suggest, in life, would know that it is a matter not of difficulty but of common sense to decide it someone has decided to deliberately evade, or whether he has simply misjudged the matter. The Minister has obviously not considered this matter or he would not have used the two phrases as being synonymous, as he did in his speech. Therefore, let me, in the last moments at my disposal, put this to him: If that is the position in which he was when he made his speech, well, he knows the difference now.

I do not think that the right hon. and learned Gentleman has read lines 5 to 12 on page 11. All this is set out there.

I do not think that that one will do. The right hon. Gentleman gave us his paraphrase of the Clause which we are dealing with. I am sure that the right hon. Gentleman is the last person to give any paraphrase to the House which he did not honestly believe was the meaning of the Bill. If he honestly believed that was the meaning of the Bill, he honestly believed something entirely incorrect, and it is time for him to consider it.

The other point which I put to him is: Why does he need to maintain the disjunctive "or" between these two tests. On everything that he has said it would be sufficient, even with his misunderstanding, and even with his desire to have a more harsh content of the Bill,

Division No. 114.]


[10.0 p.m.

Acland, Sir Richardde Freitas, GeoffreyHoy, J.
Adams, Richard (Balham)Dobbie, WHubbard, T.
Albu, A. H.Dodds, N. NHudson, J. H. (Ealing, W.)
Allen, A. G. (Bosworth)Donovan, T.Hughes, Emrys (S. Ayr)
Allen, Scholefield (Crewe)Driberg, T. E. N.Hughes, H. D. (W'lverh'pton, W.)
Alpass, J. H.Dugdale, J. (W. Bromwich)Hynd, H. (Hackney, C.)
Anderson, A. (Motherwell)Dumpleton, C. W.Hynd, J. B. (Attercliffe)
Attewell, H. C.Dye, S.Irving, W. J. (Tottenham, N.)
Austin, H. LewisEdelman, M.Isaacs, Rt. Hon. G. A.
Awbery, S. S.Edwards, John (Blackburn)Janner, B.
Aytes, W. H.Edwards, Rt. Hon. N. (Caerphilly)Jay, D. P. T.
Ayrton Gould, Mrs. B.Edwards, W. J. (Whitechapel)Jeger, G. (Winchester)
Bacon, Miss A.Evans, Albert (Islington, W.)Jeger, Or. S. W. (St. Pancras, S.E.)
Baird, J.Evans, E. (Lowestoft)Jenkins, R. H.
Balfour, A.Evans, John (Ogmore)Jones, 0. T. (Hartlepool)
Barnes, Rt. Hon. A. JEvans, S. N. (Wednesbury)Jones, Elwyn (Plaistow)
Barstow, P. G.Ewart, R.Jones, Jack (Bolton)
Barton, G.Fairhurst, F.Jones, P. Asterley (Hitchin)
Battley, J. R.Farthing, W. J.Keenan, W.
Bechervaise, A. EFernyhough, E.Kenyon, C.
Benson, G.Field, Capt. W. J.Key, Rt. Hon. C. W.
Beswick, F.Fletcher, E. G. M. (Islington, E.)King, E M.
Bing, G. H. CFollick, M.Kinghorn, Sqn.-Ldr. E.
Binns, J.Forman, J. C.Kinley, J.
Blackburn, A. RFraser, T. (Hamilton)Kirkwood, Rt. Hon. D.
Blenkinsop, A.Freeman, J. (Watford)Lang, G.
Blyton, W. R.Ganley, Mrs. C. S.Lavers, S.
Boardman, H.Gibbins, J.Lee, Miss J. (Cannock)
Bowden, Flg. Offr. H. W.Gibson, C. W.Leonard, W.
Braddock, Wks. E. M. (L'pl. Exch'ge)Gilzean, A.Leslie, J. R.
Braddock, T. (Mitcham)Glanville, J. E. (Consett)Levy, B. W.
Bramall, E. A.Gooch, E. G.Lewis, A. W. J. (Upton)
Brook, D. (Halifax)Goodrich, H. E.Lewis, J. (Bolton)
Brooks, T. J. (Bothwell)Gordon-Walker, P. C.Lewis, T. (Southampton)
Broughton, Dr. A. D. D.Greenwood, Rt. Hon. A. (Wakefield)Lindgren, G. S.
Brown, George (Belper)Greenwood, A. W. J. (Heywood)Lipton, Lt.-Col. M.
Brown, T. J. (Ince)Grey, C. F.Logan, D. G.
Burden, T. W.Grierson, E.Longden, F.
Burke, W. A.Griffiths, D. (Rother Valley)Lyne, A. W.
Callaghan, JamesGriffiths, Rt. Hon. J. (Llanelly)McAdam, W.
Castle, Mrs. B. A.Griffiths, W. D. (Moss Side)McAllister, G.
Chamberlain, R. A.Guest, Dr. L. HadenMcEntee, V. La T
Chetwynd, G. R.Gunter, R. JMcGhee, H. G.
Cobb, F. A.Guy, W. H.McGovern, J.
Cocks, F. S.Haire, John E. (Wycombe)Mack, J. D.
Collick, P.Hale, LeslieMcKay, J. (Wallsend)
Collindridge, FHall, Rt. Hon. GlenvilMackay, R W. G. (Hull, N.W.)
Collins. V J.Hamilton, Lieut.-Col. R.McLeavy, F.
Colman, Miss G. M.Hannan, W. (Maryhill)MacPherson, Malcolm (Stirling)
Cooper, G.Hardman, D. R.Macpherson, T. (Romford)
Corbel, Mrs. F. K. (Camb'werl, N.W.)Hardy, E. A.Mainwaring, W. H
Cove, W. G.Harrison, J.Mallalieu, E. L. (Brigg)
Crawley, A.Hastings, Dr. SomervilleMallalieu, J. P. W. (Huddersfield)
Crossman, R. H. S.Haworth, J.Mann, Mrs. J.
Cullen, Mrs.Henderson, Rt. Hon. A. (Kingswinford)Manning, C. (Camberwell, N.)
Daggar, G.Henderson, Joseph (Ardwick)Manning, Mrs. L. (Epping)
Daines, P.Herbison, Miss M.Marquand, Rt. Hon. H. A
Dalton, Re Hon. H.Hicks, G.Mathers, Rt. Hon. George
Davies, Edward (Burslem)Hobson, C. R.Mayhew, C. P.
Davies, Harold (Leek)Holman, P.Messer, F.
Davies, Haydn (St. Pancras, S.W.)Holmes, H. E. (Hemsworth)Middleton, Mrs. L.
Davies, S. O. (Merthyr)Horabin, T. L.Mikardo, Ian
Deer, G.Houghton, A. L. N. D.Millington, Wing-Comdr. E. R.

to maintain the second or to put the two things conjunctively so that the second becomes a condition. I do ask the House to consider—

It being Ten o'Clock, Mr. SPEAKER proceeded, pursuant to Order, to put forthwith the Question already proposed from the Chair.

Question put, "That the words 'on or' stand part of the Bill."

The House divided: Ayes, 322; Noes, 155.

Mitchison, G. R.Roberts, Goronwy (Caernarvonshire)Tolley, L.
Monslow, W.Robinson, K. (St. Pancras)Tomlinson, Rt. Hon. G
Morgan, Dr. H. BRogers, G. H. R.Turner-Samuels, M.
Morley, R.Ross, William (Kilmarnock)Ungoed-Thomas, L.
Morris, Lt.-Col. H. (Sheffield, C.)Royle, C.Vernon, Maj. W F
Morris, P. (Swansea, W.)Sargood, R.Viant, S. P.
Morrison, Rt. Hn. H. (Lewisham E.)Scollan, TWalkden, E.
Mort, D. L.Scott-Elliot, WWalker, G. H.
Moyle, A.Segal, Dr. S.Wallace, H. W. (Walthamstow, E.)
Murray, J. D.Shackleton, E. A. AWarbey, W. N.
Nally, W.Sharp, GranvilleWatkins, T. E.
Naylor, T. E.Shawcross, C. N. (Widnes)Webb, M. (Bradford, C.)
Neal, H. (Claycross)Shinwell, Rt. Hon. E.Weitzman, D.
Nichol., Mrs. M. E. (Bradford, N.)Silkin, Rt. Hon. L.Wells, P. L. (Faversham)
Nicholls, H. R. (Stratford)Silverman, J. (Erdington)Wells, W. T. (Walsall)
Noel-Baker, Capt. F. E. (Brentford)Silverman, S. S. (Nelson)West, D. G.
O'Brien, T.Simmons, C. J.Wheatley, -Rt. Hn. J. T. (Edinb'gh, E.)
Oldfield, W. HSkeffington, A. M.White, H. (Derbyshire, N.E.)
Oliver, G. HSkeffington-Lodge, T. CWhiteley, Rt. Hon. W
Orbach, M.Skinnard, F. W.Wigg, George
Paget, R. T.Smith, C. (Colchester)Wilcock, Group-Capt. C. A. B.
Paling, Rt. Hon. Wilfred (Wentworth)Smith, Ellis (Stoke)Wilkes, L.
Paling, Will T. (Dewsbury)Smith, H. N. (Nottingham, S)Wilkins, W. A
Pargiter, G. A.Smith, S. H. (Hull, S.W.)Willey, F. T. (Sunderland)
Parker, J.Solley, L. J.Willey, O. G. (Cleveland)
Parkin, B. T.Sorensen, R. WWilliams, D. J. (Neath)
Paton, Mrs. F. (Rushcliffe)Soskice, Rt. Hon Sir FrankWilliams, J. L. (Kelvingrove)
Paton, J. (Norwich)Sparks, J. AWilliams, Ronald (Wigan)
Pearson, A.Steele, T.Williams, Rt. Hon. T. (Don Valley)
Peart, T. F.Stewart, Michael (Fulham, E.)Williams, W. T. (Hammersmith, S.)
Perrins, W.Strachey, Rt. Hon. J.Williams, W. R. (Heston)
Popplewell, E.Strauss, Rt. Hon. G. R (Lamoeth)Willis, E
Porter, E. (Warrington)Summerskill, Rt. Hon. EdithWills, Mrs. E. A.
Porter, G. (Leeds)Swingler, S.Wilson, Rt. Hon. J. H
Pritt, D. N.Sylvester, G. O.Wise, Major F. J.
Proctor, W. T.Symonds, A. L.Woods, G. S
Pryde, D. J.Taylor, H. B. (Mansfield)Wyatt, W.
Pursey, Comdr. HTaylor, R. J. (Morpeth)Yates, V. F.
Randall. H. E.Taylor, Dr. S. (Barnet)Young, Sir R. (Newton)
Ranger, J.Thomas, D. E. (.Aberdare)Younger., Hon. Kenneth
Rankin, J.Thomas, George (Cardiff)Zilliacus, K.
Reeves, J.Thomas, I. O. (Wrekin)
Raid, T. (Swindon)Thomas, John R. (Dover)TELLERS FOR THE AYES:
Rhodes, H.Thurtle, ErnestMr. Snow and
Ridealgh, Mrs. MTimmons, J.Mr. George Wallace.
Robens, A.Titterington, M F.


Agnew, Cmdr. P. G.Fleming, Sqn.-Ldr. E LJoynson-Hicks, Hon. L. W
Amory, D. HeathcoatFletcher, W. (Bury)Kerr, Sir J. Graham
Assheton, Rt. Hon. RFoster, J G. (Northwich)Kingsmill, Lt.-Col. W. H
Astor, Hon. M.Fox, Sir G.Lambert, Hon. G.
Baldwin, A. E.Fraser, H. C. P (Stone)Lancaster, Col. C. G
Beamish, Maj. T. V HFraser, Sir I. (Lonsdale)Langford-Holt, J.
Bennett, Sir P.Fyfe, Rt. Hon. Sir D P MLaw, Rt. Hon. R. K
Birch, NigelGage, C.Legge-Bourke, Maj. E. A. H
Bossom, A. C.Galbraith, Cmdr T. D. (Pollok)Lindsay, M. (Solihull)
Bower, N.Galbraith, T. G. D (Hillhead)Linstead, H. N.
Boyd-Carpenter, J. A.Gates, Maj. E. E.Lipson, D. L.
Braithwaite, Lt.-Comdr. J. GGeorge, Maj. Rt. Hn. G. Lloyd (P'ke)Lloyd, Selwyn (Wirral)
Bromley-Davenport, Lt.-Col. W.Glyn, Sir R.Low, A. R. W.
Buchan-Hepburn, P. G. T.Gomme-Duncan, Col. ALucas, Major Sir J.
Butcher, H. W.Grimston, R. V.Lucas-Tooth, S. H.
Butler, Rt. Hn. R. A (S'ffr'n W'Id'n)Hannon Sir P. (Moseley)Lyttelton, Rt. Hon. O.
Challen, C.Harden, J. R. E.MacAndrew, Col. Sir C.
Clarke, Col. R. S.Hare, Hon. J. H. (Woodbridge)McCorquodale, Rt. Hon. M. S.
Clifton-Brown, Lt.-Col. GHarvey, Air-Comdre A VMcFarlane, C. S.
Cole, T L.Houghton, S. GMackeson, Brig. H. R
Corbett, Lieut.-Col. U. (Ludlow)Head, Brige, A. H.McKie, J. H. (Galloway)
Crookshank, Capt. Rt. Hon H. F CHeadlam, Lieut.-Col. Rt Hon. Sir CMaclay, Hon. J. S.
Cuthbert, W. N.Henderson, John (Cathcart)Macmillan, Rt. Hon. Harold (Bromley)
Davidson, ViscountessHinchingbrooke, ViscountMacpherson, N. (Dumfries)
De la Bere, R.Hogg, Hon. Q.Maitland, Comdr. J W
Digby, Simon WingfieldHollis, M. C.Marlowe, A. A. H.
Dodds-Parker, A. D.Holmes, Sir J Stanley (Harwich)Harples, A. E.
Dower, Col. A. V. G. (Penrith)Hope, Lord J.Marshall, D. (Bodmin)
Drayson, G. BHoward, Hon. AMaude, J. C.
Drewe, C.Hudson, Rt. Hon. R S. (Southport)Medlicott, Brigadier F
Dugdale, Mai. Sir T. (Richmond)Hulbert, Wing-Cdr N. J.Mellor, Sir J.
Eccles, D. M.Hutchison, Lt.-Cm. Clark (E'b'rgh W.)Molson, A. H. E.
Eden, Rt. Hon. A,Hutchison, Col. J. R. (Glasgow, C.)Moore, Lt.-Col. Sir T.
Elliot, Lieut.-Col. Rt. Hon WalterJeffreys, General Sir GMorrison, Maj. J. G. (Salisbury)
Erroll. F. J.Jennings, RMott-Radclyffe, C. E.

Neven-Spence, Sir BShepherd, W. S. (Bucklow)Vane, W. M. F
Nicholson, G.Smith, E. P. (Ashford)Wadsworth, G
Nield, B. (Chester)Smithers, Sir WWalker-Smith, D
Noble, Comdr. A. H. PSnadden, W. MWard, Hon G. R
Odey, G. W.Spearman, A. C. M.Webbe, Sir H. (Abbey)
O'Neill, Rt. Hon. Sir HStoddart-Scott, Col. M.Wheatley, Colonel M. J. (Dorset. E)
Orr-Ewing, I. L.Strauss, Henry (English Universities)White, Sir D (Fareham)
Peake, Rt. Hon. O.Sutcliffe, H.White, J. B. (Canterbury)
Peto, Brig. C. H. MTaylor, Vice-Adm. E. A. (P'dd'en. S.)Williams, C. (Torquay)
Pickthorn, K.Teeling, WilliamWilliams, Gerald (Tonbridge)
Ponsonby, Col. C. E.Thomas, Ivor (Keighley)Willoughby de Eresby, Lord
Prior-Palmer, Brig. OThomas, J. P. L. (Hereford)Winterton, Rt. Hon. Earl
Ramsay, Maj. S.Thorneycroft, G. E. P. (Monmouth)York, C.
Renton, D.Thornton-Kemsley, C. N.Young, Sir A. S. L. (Partick)
Robertson, Sir D. (Streatham)Thorp, Brigadier R. A. F
Robinson, Roland (Blackpool. S.)Touche, G. C.TELLERS FOR THE NOES:
Ropner, Col. L.Turton, R. H.Mr. Studholme and
Shephard, S. (Newark)Tweedsmuir, LadyMajor Conant.

Mr. SPEAKER then proceeded to put forthwith the Question on the Amendment moved by the Government of which notice had been given to that part of the Bill to be concluded at Ten o'Clock at this day's sitting.