My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

My Lords. I shall reply as briefly as pos- sible, but there are seven separate questions here. The offences for which Prescott was convicted in February, 1968, were: unauthorised possession of a dangerous drug; breaking and entering and stealing; unauthorised possession of a firearm and ammunition, and using a firearm with intent to prevent lawful detention. He served two years, seven months, in prison before being released on licence following acceptance of a recommendation by the Parole Board. Prescott was subject to supervision by the probation and after-care service throughout the period he was at liberty and had reported to the supervising officer. He was understood to be living in private lodgings at known addresses, and the probation service had been in touch with the landlords. If, as subsequently stated, Prescott was living elsewhere, the supervising officer was deceived. His arrest on January 20, 1971, was the result of being stopped in the street and found in possession of a small quantity of cannabis and cheque books which were thought to have been stolen. It is not known when Prescott became associated with the Angry Brigade. Both my right honourable friend the Home Secretary and the Parole Board, in submitting recommendations to him, attach the greatest importance to the protection of the public in considering the release of any prisoner on licence.

My Lords, does not this reply by the Government call in question the efficiency of the whole of the administration of the parole system? If a man serving a five and a half year sentence for the illegal possession of fire-arms and other offences is released on parole his supervision is insufficient if he has managed during that time to commit a number of other offences. He is then released on bail and subsequently arrested on a suspicion of an entirely new offence. It is only because of that arrest that it is found that he is associated with the Angry Brigade. Does this not indicate that dangerous criminals are released on parole and are not subjected to proper supervision?

My Lords, it is dangerous to generalise on the working of the parole scheme on the basis of a single case, serious though that case is. In the three and a half years since the parole system was introduced, following the passing of the Criminal Justice Act 1967, about 8.000 people have been paroled. My right honourable friend the Home Secretary and the members of the Parole Board accept that this is a case which must be looked at very carefully in all its aspects so that we may see what lessons can be learned.

:My Lords, is the Minister able to carry those figures a little further and tell us what percentage of persons released on parole since the system was instituted have been convicted of crimes of violence while on parole?

My Lords, less than 1 per cent. of those serving a term of imprisonment for an offence of violence have committed a further offence of violence during the period of their licence.

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

My Lords, there is nothing to be gained by trying to be more precise at this time. If we can make the airport operational before 1980 we shall certainly do so.

My Lords, when my noble friend the Lord Privy Seal made his announcement (is my noble friend not in agreement with this?) he was probably guessing. He guessed at a date some nine years ahead. Is my noble friend aware that of those nine years, nine months have now passed? That is one-twelfth of the total time. Is it not now possible to be slightly more precise?

My Lords, I made clear in my previous answer to my noble friend that there are at least six major separate considerations which are under way at the moment, all of which have to be resolved before one can be any more precise.

My Lords, may I ask the noble Lord whether he is yet able to say what will be the total cost of this project, if it ever conies to fruition, including the cost of the additional road and other access routes?

Not yet, my Lords, and not without notice.

My Lords, can the noble Lord tell the House whether there is reasonable prospect for the country to take hope that the Government will not proceed with this scheme?

No, my Lords. I think I made it quite clear from my Answer that we are determined to make the airport operational by 1980, and before 1980 if possible.

My Lords, are the Government still absolutely convinced, in the light of new technical developments that allow greater usage of existing airports, and future technical developments regarding short-range take-off, that this airport will still be necessary?

Yes, my Lords, we still remain convinced.

My Lords, is the noble Lord aware that, even when the first runway at Foulness is made operational, no airline will make use of it until such time as there are full facilities for passengers, cargo, maintenance and road and rail access?

Yes, my Lords—and also, of course, transport links between the airport and the capital city.

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

My Lords, wine from grapes grown in this country is not affected by the agreement in Brussels about the naming of certain products. Wine of this kind falls within the scope of the Community's wine regulations and producers can rest assured that they can continue to call their product "wine". The agreement on names relates to products for which the Community has accepted the British proposition that they should be regarded as falling outside the wine regulations. From this acceptance has followed the agreement to the effect that the word "wine" will not be used in the descriptions of certain products where this conflicts with Community rules. A transitional period of reasonable length is to apply to the United Kingdom market to allow time for the change to be made.

My Lords, while thanking the Minister for his reply, which will give great satisfaction to the producers of wine in this country, may I ask him this question? In view of the fact that we have to pay duty of 25p a bottle in this country, while in France only a penny is paid and in Germany, except for sparkling wines, no duty is paid at all, will not Her Majesty's Government give some concession to this struggling and very promising industry?

My Lords, with regard to what Her Majesty's Government will do, of course I cannot say anything in advance of what my right honourable friend may say this year, next year or some other year, in another place. But with regard to the Community as a whole there are, I believe, long-term ideas that there might be harmonisation of duty; but no timetable is known and nothing has been decided as to the levels.

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

No, my Lords. The Geneva Agreement (the principle of which, as co-Chairman of the Geneva Conference we uphold) postulates a single Vietnam, which is temporarily divided. Recognition of North Vietnam would imply that we accept the permanent division of the country, which would be contrary to the spirit of the Geneva Agreement.

My Lords, while thanking the Minister may I ask whether it is not a fact, though, that in effect we have recognised the Government of Saigon? Do we not have an Embassy in Saigon? Do not the Saigon Government have an Embassy in London? And. in view of the stability and obvious support of the people, does not North Vietnam now fulfil the criteria for recognition?

My Lords, we recognise the Government in Saigon as being successor to the Government of the Emperor Bao Dai in 1950, and we believe that this is the correct method of recognition. As the noble Lord knows full well, the Geneva Agreement postulated a single Vietnam, and it would therefore be unhelpful if we were to recognise Governments in both Vietnams.

My Lords, is the noble Earl aware that that Answer has been given pretty well "off the cuff" without any thought? Is the Foreign Office aware that Mr. Nixon is now visiting China, and, secondly, that the noble Earl, Lord Avon, on page 118 of his book, Full Circle, gave an account of the difficulty he had with Mr. Foster Dulles? Is the noble Earl further aware that the Geneva Convention of 1954 has been broken by every nation in Indo-China? Would it not have been a much more understanding Answer to say, "While the Government are not able to recognise it at the moment, we hope that in the near future we shall be in a position of giving full recognition to this gallant nation, North Vietnam"?

My Lords, I can assure the noble Lord that the Answer was not given "off the cuff" and if the noble Lord would be good enough to do his homework he would find that it is almost the identical reply which the noble Lord, Lord Brockway, has received on two previous occasions when he has put down the same Question.

My Lords, further to that, if the noble Lord has been given exactly—I underline "exactly"—the same Answer now as he was given months ago, then God help us because of the myopic outlook of the Foreign Office!

My Lords, would not the recognition of the Government of North Vietnam become more acceptable if the Administration, whatever it may be, in that country recognised one of the principles of the Geneva Convention and released American prisoners of war who have been in their hands for several years? Would not the subject then become more approachable? But for so long as the Government of North Vietnam act as they do and adopt behaviour which is deplorable, can it be expected that we should recognise them?

My Lords, we wish to see, as most countries do, a unified Vietnam, but this can be achieved only by the people of Vietnam themselves.

My Lords, further to that answer, is the noble Earl aware that from the days of Grotius, the great Dutch international lawyer, it is an understood course that prisoners of war are not released until the war is finished? With the bombing of North Vietnam, how can we say that the war there is finished?

My Lords, I certainly did not say that the war was finished, but I think the noble Lord will agree that the subject of prisoners of war is rather outside the original Question.

My Lords, may I get back, without debate, to the Answer which the Minister gave to my original Question? Is he aware that those of us who are aware of the Geneva Agreement will be astonished by his Answer? Is it not the fact that the Saigon Government were not a party to the Geneva Agreement? Also, in view of our recognition of the Government of Saigon, in order to exert influence for peace in Vietnam would it not be desirable to build a bridge of recognition of both, so that we might bring an end to this war, of which even America is now ashamed?

My Lords, I think the noble Lord is mistaken on one point. The South Vietnamese did not oppose the 1954 Agreement—they accepted it; but they expressed their reservations on the feasibility of conducting genuinely free elections in the whole country.

My Lords, will the noble Earl say why the Government of Saigon, which are recognised and which, to say the least, are no more democratic, but probably less democratic than the North, should be recognised and the other Government are not recognised?

Because, my Lords, as co-chairman of the Geneva Agreement we accept the Agreement which postulated a single Vietnam: to recognise two Governments in Vietnam would not agree with this particular premise.

My Lords, will not the Minister recognise that that is the essential point? The Saigon Government declined to hold the elections in Vietnam which would have brought about a single Government. Why should we recognise them as the single Government for the whole of Vietnam?

My Lords, President Thieu has offered to discuss with Hanoi the holding of genuinely free elections and they have not found it possible to agree to this.

My Lords, I am slightly puzzled by the Minister's original Answer. Perhaps he will clarify it. I understood him to say that the view of the British Government is that there ought to be a single unified Government in Vietnam. Will he explain why that justifies recognising a Government which in fact is a Government of part of Vietnam?

My Lords, it was the desire of, and indeed agreed by, the Geneva Conference that a single Vietnam should be the objective, although at the time it was agreed that this would not be possible. It is still our aim that a single Vietnam should materialise.

My Lords, with the leave of the House my noble friend the Leader of the House will be making a Statement on India and Pakistan at a convenient moment after 3.30 p.m.

My Lords, my right honourable friend the Secretary of State for Foreign and Commonwealth Affairs yesterday made a Statement in another place on Malta. It has been agreed through the usual channels that it would be for the convenience of the House if the Statement were not repeated here to-day but were circulated in the OFFICIAL REPORT, which, with the leave of the House. I will arrange to do. This is the procedure recommended by the Procedure Committee in their Seventh Report of last Session.

The Statement was as follows:

" With your permission, Mr. Speaker, and that of the House, I wish to make a statement on recent developments concerning our defence arrangements with Malta.

" The position when the House rose for the Recess was that the Malta Government had been offered £9½ million per annum in return for a satisfactory new defence arrangement. At the Chequers meeting in Septem-

ber, it had been agreed that the Malta Government would receive a six-month interim payment on the basis of that offer. Accordingly, the British Government had made a payment of £4¾ million on 30th September for the period up to the end of March.

" Over Christmas, Mr. Mintoff demanded immediate payment of another £4¼ million, for the next three months, as the only basis on which he could permit the continued presence of British forces in Malta after 31st December. The British Government, of course, could not accept this demand, and they announced on 29th December that they were setting in hand preparations for the withdrawal of British forces in Malta, though they remained ready to continue to talk. The decision to withdraw was one which the Government took with the greatest regret. But throughout their negotiations with Mr. Mintoff they had made clear that they would not seek to maintain British forces in Malta against the wishes of the Malta Government.

" Mr. Mintoff subsequently extended his deadline for the withdrawal of our forces until 15th January. Since there were suggestions that the Malta Government might contemplate taking measures against our remaining forces after that date, my right honourable Friend the Prime Minister sent messages to Mr. Mintoff concerning the withdrawal. He made clear that we wished the withdrawal to be as orderly, amicable and expeditious as possible. though it would be physically impracticable to complete it by 15th January. He assured Mr. Mintoff of our sincere wish that any harm done to our relations by the failure to reach agreement on a defence arrangement and our consequent withdrawal should be as little and as shortlived as possible.

" In the circumstances, the Government decided that every effort should be made to withdraw at least the families of our forces before 15th January. A special airlift was mounted for this purpose, and the House will wish to congratulate those responsible for the efficiency of the arrangements that were made, not least for the reception of the families in this country. The other stages of the withdrawal are proceeding according to plan. The reconnaissance aircraft that were based in Malta have already been redeployed elsewhere; and the forces which remain will be fully engaged from now on in the massive task of removing the large quantity of equipment and stores which we have there, as well as ensuring an orderly and phased handover of installations to the Maltese authorities.

" Throughout the course of our exchanges with the Malta Government we have kept in the closest touch with our NATO allies in view of their interest in the continued denial of Malta's strategic facilities to a potential enemy and in the use of these facilities to support NATO'S southern flank. As the House knows, the retention of British forces in Malta is nowadays in the interests of the Alliance as a whole rather than of this country alone. The financial offer therefore, which has been available to the Malta Government since September, was made by the British Government on behalf of NATO. This offer, of a basic annual figure at a level closely approaching £10 million, was fair and, indeed, generous. Moreover, the Maltese economy would have continued to benefit from the local expenditure of the British forces—recently running at about £13 million per annum—and some of Britain's NATO allies subsequently offered to contribute a substantial additional amount of bilateral economic support totalling £7 million spread over a period. The British Government have for some time made clear that for their part they do not contemplate increasing their own contribution to this offer, in view of all the other costs of maintaining a British military presence in Malta which fall on the British Government anyway. On the other hand, we have, of course, no objection to any of our allies offering further contributions to Malta in return for a satisfactory new defence agreement, if they judge this to be necessary in the interests of the Alliance.

" The latest development is that, by mutual arrangement and through the good offices of the Italian Government, meetings were held in Rome last Saturday attended by the Prime Minister of Malta, the Italian Foreign Minister, the Secretary-General of N.A.T.O. and my right hon. and noble Friend the Defence Secretary. Some progress was made, and after the meetings Mr. Mintoff announced the removal of the deadline of 15th January. A further Ministerial meeting is expected to take place in Rome later this week, and official-level talks in Valletta are also being resumed immediately.

" Since the talks are continuing, I would not wish to go into detail about them. The British Government for their part will continue, in close consultation with their allies, to do all they can to ensure that a satisfactory agreement, beneficial to both sides, is reached. But the gap which remains is still wide, and the process of orderly withdrawal will continue unless and until it becomes clear that such an agreement can be reached."

My Lords, I beg to introduce a Bill to make provision for extending the power of the Secretary of State under Section 7 of the Harbours, Piers and Ferries (Scotland) Act 1937 to authorise the undertaking by certain local and harbour authorities of operations in connection with marine works. I beg to move that this Bill he now read a first time.

My Lords, I beg to move the Motion standing in my name on the Order Paper.

My Lords, I rise to move that this Bill be now read a second time. I am happy to say that this is a pure Consolidation Bill. It consolidates provisions relating to five Excise duties—the general betting duty, the pool betting duty, the bingo duty and duties on gaming licences and gaming machine licences.

The principal enactments now consolidated are the Betting Duties Act 1963 and the relevant provisions in the Finance Acts 1964 and 1966 to 1971, and the Gaming Act 1968. The Bill will have to go before the Joint Committee, who will examine it with their usual thoroughness. I therefore beg to move that this Bill be now read a second time.

My Lords, I beg to move that, pursuant to Standing Order No. 43(2), the House do discharge the Order of Recommitment. I ought to inform the House that this again is a pure Consolidation Bill. In their Report, the Joint Committee state that there is no point to which the attention of Parliament should be drawn. I understand that no Amendments have been put down to this Bill and that no noble Lord has indicated a wish to move a manuscript Amendment or to speak in Committee on Recommitment. Unless, therefore, any noble Lord objects, I beg to move that the Order of Recommitment be discharged.

My Lords, I again rise to propose that, pur- suant to Standing Order No. 43(2), the House do discharge the Order of Recommitment. This, too, is a pure Consolidation Bill. Again the Joint Committee say that there is no point to which the attention of Parliament should be drawn, and the other conditions which I stated apply to the previous Bill apply also to this Bill. Therefore, unless any noble Lord objects, I beg to move that the Order of Recommitment be discharged.

My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

moved Amendment No. 1:

Page 1, line 14, leave out (" subsections (1) and (2)") and insert (" subsection (1)").

moved Amendment No. 2:

Page 2, line 25, leave out (" provisions of the Act of 1932 ") and insert (" enactments ").

When this Bill received a Second Reading without dissent, I said that there were some minor defects that needed tidying up, but that this could easily be done in Committee. This Amendment, which has been clearly and concisely moved by the noble Lord, Lord Strabolgi, seems to us to be a desirable improvement. It may save the time of the Committee if I say now that in the view of the Government all the remaining Amendments which the noble Lord, Lord Strabolgi, will be moving this afternoon are useful changes which should help to clarify the Bill and to remove any ambiguities; and therefore, within the limits of the attitude of benevolent neutrality which I expressed on Second Reading, particularly as regards Government time in another place, I can say that we see no objection to any of the Amendments on the Marshalled List.

I am grateful to the noble Lord, Lord Windlesham, the Minister, for his help and for his kind remarks, and I am glad to know that this and the other Amendments meet with his agreement.

I beg to move Amendment No. 3.

I beg to move Amendment No. 4.

I beg to move Amendment No. 5.

moved Amendment No. 6:

I beg to move Amendment No. 7. The Bill as at present drafted makes April 1 the operative date for the Act to come into force. This date was chosen because, coming as it does at the end of the financial year, it would have been the most convenient date for winding up the Cinematograph Fund. It seems unlikely, however, that the Bill could pass through this House and the other place by this date; so I suggest that it is advisable to move the operative date to July 1. 1972. which is the next Quarter Day. I beg to move.

moved Amendment No. 8:

My Lords, on behalf of my noble friend, Lord Windlesham, and provided no noble Lord objects, I beg to move that the Order of Commitment be discharged. I understand that no Amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript Amendment or to speak in Committee. Therefore, pursuant to Standing Order No. 43(2), I beg to move that the Order of Commitment be discharged.

rose to move, That this House do direct that, in accordance with the Church of England Assembly (Powers) Act 1919, the Admission to Holy Communion Measure be presented to Her Majesty for the Royal Assent. The right reverend Prelate said: My Lords, the desirability of this short but very important Measure arises from the fact that the Book of Common Prayer is annexed to the Act of Uniformity 1662. Its rubrics therefore have the force of law, and any departure from them represents, at any rate technically, a legal offence.

My Lords, I have it in command from Her Majesty the Queen and His Royal Highness the Prince of Wales that they, having been informed of the purport of the Repair of Benefice Buildings Measure, have consented to place their interests, so far as they are concerned on behalf of the Crown and the Duchy of Cornwall, at the disposal of Parliament for the purposes of the Measure.

rose to move, That this House do direct that, in accordance with the Church of England Assembly (Powers) Act 1919, the Repair of Benefice Buildings Measure be presented to Her Majesty for the Royal Assent. The right reverend Prelate said: My Lords, this Measure effects a considerable change in the law affecting the responsibility for the upkeep of parsonage houses, and it will lead not only to the simplification of what is at present an unnecessarily complex system, but also to the better provision for the repair of the houses in which incumbents live.

rose to move, That the Draft Sugar Beet (Research and Education) (Increase of Contributions) Order 1972 laid before the House on December 9 be approved. The noble Lord said: My Lords, the purpose of this Order is to increase the maximum contribution which growers of beet and the British Sugar Corporation may be required by Order to pay to finance the programme of research and education which the industry wants to see carried out. The Order is simple enough in its effect, but the financing arrangements are not quite as simple as they might appear and a word or two of explanation might be helpful to noble Lords. Section 18(1) of the Sugar Act 1956 lays a duty on the Minister of Agriculture and the Secretary of State for Scotland to make an Order each year approving a programme of expenditure on research and education for home-grown sugar beet. Ministers are required to consult the industry, and this they do through the Sugar Beet (Research and Education) Committee, which anyone concerned with sugar beet knows to be a most effective body for this purpose. The Committee, which represents both sides of industry, draws up the annual programmes of research and education for the approval of Ministers and advises on the necessary rate of contribution. So your Lordships can see that this is very much a case of the industry itself saying what it wants done and finding the money to pay for it.

My Lords, I am sure that this is an extremely sound Order involving, as it does, a compulsory levy on an industry, thereby spreading the load for certain operations equally over the industry, instead of letting the willing horses carry the load and the laggards escape. The reason why I am on my feet is to ask a very simple question. Am I to understand from what the noble Lord has said that this gives rise to a general principle on the part of the Government that, as a matter of principle, where a majority of an industry is in favour of the continuation of compulsory levies of this kind, they approve such continuation?

My Lords, there are only two questions that I wish to ask on this Order. Despite what my noble friend has said, this means a very considerable increase and I am very grateful to the noble Lord for giving the figure in totality rather than saying that it is about l½p. I have always supported research and education in this field, so I shall not go back over what I have said previously. But the noble Lord said that in 1970 the levy represented something like £210,000 from the industry and £241,000 from the Corporation. I should like him to clear up the effect of this change on the contributions from the industry itself and from the Corporation. In the old days, when I introduced Orders in this respect and had to suggest that the Government wanted some provision which would allow them some leeway in the event of certain circumstances arising, I can assure your Lordships that I always met with the greatest protest from the Opposition of the day. They always said: "If in fact you need 25 per cent. say so, but what you are not entitled to do is to come to this House and ask for an increase of 140 per cent.", which is what the Government are doing to-day. The Government are saying: "We do not find the present assessment sufficient for our purpose, and we propose to increase it by 140 per cent." The Minister said," I give an assurance that we do not propose to increase it by 140 per cent. at the present time; we propose merely to have this in hand, and we will in fact make an increase as and when we feel fit".

I could not understand the other figures the Minister gave, because he said that 3 new pence meant something like £390,000 from the industry and £240,000 from Government sources. I cannot understand why there is this difference under the present arrangement. It may be that I took the figures down wrongly. The Minister mentioned two figures, and if both parties are supposed to pay the same amount I cannot understand why there should be this difference.

My Lords, I wonder whether I may put the noble Lord right (if he will forgive my saying so) on that point? I said that the 3 new pence, if raised in full—and we shall debate how much will in fact be asked when this Order comes before us—would raise, with an average crop, £390,000. The figure of £240,000 was the figure for this year, with which the possible figure for next year must be compared.

My Lords, all I am pointing out to the Minister is that if the old figure was £240.000 and the new figure is going to be £390,000, then that of course does not reflect the figure he is asking for in this Order unless it is because he is saying to your Lordships' House, "Although we propose to put this up by 140 per cent., we propose to add only a certain, smaller percentage to get the figure of £390,000". Is that what the Minister is saying? I do not ask him to answer now, but I am sure that he will want to do so when he replies to the debate.

There are two other things included in this Order which I am sure will interest all Scottish Members of your Lordships' House. In paragraph 1(2) it says:

" This order extends to the whole of Great Britain ".

Then, in paragraph 2(1) it says:

"… extending to the whole of Great Britain, for carrying out research and education in matters affecting the growing of home-grown beet …".

So this is in fact very specific, but your Lordships will know that the Government propose to close down the Cupar sugar beet factory, which is the only factory for sugar beet in Scotland. It must seem very peculiar to several noble Lords, where-ever they may sit in this House, that at the very moment when the Government are saying, "We propose to do this with research which will apply"—as the Government specify— "to the whole of Great Britain", they are also taking action to close down the whole of the Cupar sugar beet factory, which is the only one we have in Scotland.

I know that this presents a little difficulty for the Government of the day because the position of this factory economically is very difficult, and in our day we had to face up to the same problem. But every single Conservative Member of Parliament, be he in another place or in this House, said, "If you vote in a Conservative Government the Cupar beet factory will of course continue to function." Now, of course, it has been proved that that statement was a complete nonsense: the factory is going to be closed down. What we object to—or, at least, what we want to find out; we do not object at the moment because we have to find out the facts—is this. The factory having been closed down, why should we in Scotland then be paying for research which will have no effect in Scotland? Indeed, my Lords, I would say to the noble Lord that it takes a great deal of courage to come and ask the Scots to pay for something from which Scotland will not get any benefit. So I would say to the noble Lord that if he wants to get this Order through this place to-day he must justify the action that the Government have taken.

There are two questions that the noble Lord has to answer: first, why do we require to increase this levy by 140 per cent.; and, secondly, why should Scotland have to pay for this research from which we shall see no benefit because the Government of the day are closing down the only sugar beet factory in Scotland? If the noble Lord said: "Despite the fact that the factory is closing down we propose to carry out a considerable amount of research in Scotland," and if the noble Lord can tell us how much of this money is going to be paid to Scotland we shall he prepared to accept that argument. Research, as we appreciate, is not confined to any section of the country; nor even, perhaps, to any section of the world. All we are saying is that the noble Lord must justify the proposals that he has made to the House this afternoon, and unless he can answer these two questions satisfactorily then I am afraid he will not be able to have the Order quite as easily as he expects.

My Lords, I think I can satisfy noble Lords opposite on the points they have raised. The noble Lord, Lord Brown, asked whether, where there is a majority in an industry in favour of a programme such as this being carried on, Her Majesty's Government will always concur with them. I do not think the noble Lord will be surprised when I say that every case must be taken on its merits. Of course, what both sides of the particular industry say on the point is and will be taken very seriously into consideration by Her Majesty's Government, but the noble Lord cannot expect me to lay down a general rule on this.

The noble Lord, Lord Hoy, asked me a number of questions. I think he was worried, in the first place, about the figure of £390,000—and this is only an estimate; there is a great deal on which it depends—and that the Sugar Corporation and the producers would pay different amounts. This is not so. If the levy were to produce £390,000, this would be split down the middle and one-half, £195,000, would be paid by the producers and a similar amount by the British Sugar Corporation. There is no Government contribution at all as to this.

The noble Lord also asked why there was to be an increase of 140 per cent. in the levy. The increase, not in the levy but, let us say, in the maximum levy (because I think those are the figures which the noble Lord was talking about) is from 1·66 pence to 3 pence, which is in fact about 80 per cent.—not quite as bad a figure as the noble Lord suggested. Then he asked, if in fact it is an increase from 1·66 to 3 pence, how that produced an increase from £240,000 to £390,000. My Lords, there is not only the rate of the levy to be taken into consideration, of course, but also the acreage grown and the yield per acre—and those two things are variable. The amount of £390,000 that I quoted is purely for guidance, purely an estimate, and cannot be taken as a firm figure.

The noble Lord, Lord Hoy, mentioned the sugar beet factory at Cupar. I think it will probably be for the benefit of your Lordships if I reminded the House of a little of the history of this. In July, 1969, the then Government announced that the British Sugar Corporation would close their factory at Cupar after processing the 1971 crop. At the General Election in 1970, the Conservative Party promised to investigate the reasons for this closure if they were returned to power. After an exhaustive examination, which included meetings with all the parties involved, the Secretary of State announced on December 14, 1970, that there were insufficient grounds on which to ask the British Sugar Corporation to reconsider their decision.

Local opposition to the closure continued and in June, 1971, an independently-commissioned feasibility study was submitted to Ministers, one of its conclusions being that an independently-operated factory at Cupar would be viable. This would require amending legislation and a willingness on the part of the British Sugar Corporation to dispose of their assets at Cupar at a price consistent with the feasibility study conclusions. The British Sugar Corporation is a publicly-quoted company in which the Government hold approximately one-third of the shares. It is not possible to direct them to dispose of their assets. The Corporation agreed to participate in discussions with a consortium which was established under the chairmanship of Sir George Dunnett to follow up the feasibility study. The Government announced that while they were ready to do what they could to facilitate negotiations between the parties concerned, they could not intervene in what was essentially a matter for commercial negotiations between two private companies. The consortium then asked as a condition of their proceeding that they should obtain more favourable conditions in relation to sugar output than the other refiners. Ministers have publicly declared that they were not prepared to contemplate distorting competition in this way. The consortium, in view of the present and foreseeable circumstances of the sugar market, decided to abandon their project.

The noble Lord, Lord Hoy, also asked why the Order should refer to Scotland. The reason for this is that there is a small amount of residual expenditure needed to cover the winding up of the Scottish experiments. It is for this reason that my right honourable friend the Secretary of State for Scotland also has an interest in this order.

My Lords, does the noble Lord contemplate that when these residual amounts have been paid off, the contribution from Scotland will cease?

My Lords, I was coming to that matter. The contribution from Scotland is contributed by the Scottish growers of sugar beet. If there are to be no Scottish growers of sugar beet, If there will be no contribution. That is the point that the noble Lord, Lord Hoy, made when he asked why the Scots were to pay. In fact, they will not pay. We have consulted the National Farmers' Union of Scotland about the proposed increase and they say that they would have no views on the level of the contribution if Cupar closes and would almost certainly agree to the proposed increase (as have the English Union) if Cupar remains open and sugar beet production continues in Scotland.

I hope that I have satisfied the noble Lord, Lord Hoy, and the noble Lord, Lord Brown, on the questions they raised and I would ask your Lordships to accept this Order.

My Lords, in the event of some industries having had, through the operation of a compulsory levy, a long history of very successful and useful use of that levy, would the noble Lord then, under these rather more conditional situations, not agree that in principle, if the majority of the industry is in favour of a continuation of the levy, the Government should on general principles back the continuation of that general levy?

My Lords, I believe that that would be taken into account; but that there might be other factors in whatever the noble Lord has in mind—if he has any particular thing in mind; and from the expression on his face I think he has—which, as well as other circumstances, would also be taken into account.

My Lords, may I ask the noble Lord one or two more questions. The noble Lord said in reply to a question I put to him that the contribution at the present moment was 1·66 per cent.—

My Lords, is the noble Lord coming in "before I sit down"?

My Lords. I did not know whether the noble Lord had made up his mind to sit down. I was safeguarding my own position. The noble Lord said that the present contribution was 1·66 per cent. This I find very difficult to understand. I do not know how it could be 1.66 per cent. when is fact—

1·66 pence.

I do not know how it could be 1·66 pence when the Order says that we are increasing this sum from 1·25 pence. If this is true, I want to know where the rest of the money came from and where did the Government get the power to impose a levy of 1·66 pence when the Order specifically declares that it has to be only 1·25 pence.

My Lords, I think I should intervene at this stage. I think that this would be in accordance with our normal Rules of Order. It is only in order for the noble Lord to put a brief question to my noble friend "before he sits down".

I have only put one question.

The noble Lord indicated that he was going to put a stream of questions to my noble friend. I think the noble Lord is beginning to strain our Rules of Order.

My Lords, may I have an answer to that question? I am sorry that the noble Earl the Leader of the House should feel as he does. He was not here when we began discussing this matter. Here we have an Order which says that we are going to increase the levy from 1·25 pence to rather more than 3 pence. The noble Lord replies to my question about this by saying that it is not all that different because at present we are imposing a levy of 1·66 pence. Indeed, the Act of Parliament lays down 1·25 pence. I am entitled to ask who gave the power to increase it by that amount. Surely, only Parliament has the right to do it.

I should like to ask one more question. If Scotland is to go on producing sugar beet and is not to have a share in this research and development, I want to know why we are being asked to pay this amount. We are not going to get any benefit from it.

My Lords, I think I can put the noble Lord straight on this point. I think he is a little confused. I am sure that the fault is mine for not having explained the matter properly. The parent Act, although it expressed the sum in old pence, allowed the equivalent of a maximum of 1·25 pence; but this could be increased for a period by an Order such as the one we are discussing this afternoon. This was increased to 4 old pence which is the equivalent of 1·66 new pence. It is that sum that we are increasing to 3 new pence. If this Order were not to be passed by your Lordships the amount would not revert to the 1·66 new pence current at the moment; it would revert to the 1·25 old pence of the parent Act. I think that this is what is confusing the noble Lord.

So far as the noble Lord's second question is concerned, I thought that I had already answered it. Scottish farmers will not be contributing if they do not grow sugar beet. If they do grow sugar beet, they will contribute; but if the Cupar factory is to close I cannot conceive that they will be growing sugar beet. If they were growing sugar beet they would have an interest in the research. If they do not have an interest in the research they do not pay for the research. Surely that is fair by any standards.

My Lords, may I clarify one thing? Noble Lords have spoken of "1·25 and 1·66 per cent." It is of course "per ton".

My Lords, it was the noble Lord, Lord Hoy, who said "per cent." It is 1·25 and 1·66 new pence per ton.

My Lords, with the permission of your Lordships' House I should now like to repeat a Statement on Bangladesh that is now being made in another place by my right honourable friend the Secretary of State for Foreign and Commonwealth Affairs. This is the text of my right honourable friend's Statement.

" With your permission, Mr. Speaker, and that of the House, I wish to make a Statement.

" Since the House rose, the hostilities between India and Pakistan have ended. On December 21 the United Nations Security Council adopted a resolution demanding the strict observance of this cease-fire and the withdrawal of armed forces as soon as practicable. We played a full part in the negotiations leading up to this resolution, and we voted for it.

" A new pattern of relationships is now emerging. In Pakistan, President Bhutto has taken over the Government. In congratulating him on this appointment my right honourable friend the Prime Minister has made clear our wish for close and friendly relations. One of President Bhutto's first deeds was to release Sheikh Mujibur Rahman without conditions. This was a most statesmanlike act. In the East, normal life is returning and the refugees are beginning to go back to their homes. There are reports that well over 1 million have already done so. Since Sheikh Mujib's return a new Government has been set up composed of those who were elected in the general elections of December, 1970.

" On his way home, Sheikh Mujib passed through London and we were glad to welcome him. He paid a private courtesy call on my right honourable friend the Prime Minister and expressed his desire for close co-operation and friendship between his people and this country. As he was anxious to return to Dacca as quickly as possible, a Royal Air Force aircraft was put at his disposal.

" Sheikh Mujib also expressed his wish to remain on good terms with Pakistan, but made it clear that there could be no question of a formal link. President Bhutto, for his part, has proposed further discussions between the East and the West. The new Government in Dacca appears to be firmly established. The Indian Army is still in the East but Sheikh Mujib has made it clear that this is by his will and that the soldiers will be withdrawn when he deems it necessary. I am keeping the question of recognition under close consideration and am in touch with a number of Commonwealth and other Governments. I hope to be able to make another Statement on the question in the near future.

" British lives and property have been affected by the war. As I informed the House on December 13, seven United Kingdom citizens were killed in a British ship in Karachi. Since the end of hostilities we have come to know that three United Kingdom citizens were killed in an attack on a Pakistan vessel in which they were serving. British property suffered some damage, including the tea estates in the East. But the British firms affected in both the East and the West are anxious to resume operations and to assist in the task of rehabilitation.

" Many problems remain. In the East the authorities are faced with an immense task of reconstruction. We shall want to play a full part in helping with these problems. We are trying through the United Nations and other agencies to establish the needs and priorities, and we discussed the question with Sheikh Mujib when he was in London. There still remains unspent about £1 million of our contribution to the United Nations for emergency relief. And I am happy to announce that we have now decided to provide a further £1 million for relief in the area. In the West we have also told President Bhutto of our willingness to do what we can to help. The possibility of new aid is one of the questions which we shall be discussing with the President of the World Bank when he is in London this week.

" I am sure that all Members will agree that, whatever the rights and wrongs of the events which led up to this tragic conflict, the need now is to help the parties concerned to work together to solve the many problems of the sub-continent."

My Lords, that is the conclusion of my right honourable friend's Statement.

My Lords, the House will be grateful to the noble Earl the Leader of the House for repeating this Statement. We on this side of the House share with Her Majesty's Government the desire for friendly relations both with President Bhutto and also with the Prime Minister, Sheikh Mujib. We also hope that relations between these two peoples may be closer and warmer in the months to come. Certainly one way in which this could be helped would be if we could in some way lift the appalling burdens that must fall on both the leaders as a consequence of the fighting and the presence of the refugees. I hope, therefore, that the Government, who have already taken a lead, will continue to give that lead and, by their own example, provide fairly large sums of money and also help to organise other countries to give aid to both sides in this dispute.

We on this side of the House also wish to congratulate President Bhutto upon his great act of statesmanship in releasing Sheikh Mujib without conditions. I feel that I must congratulate the Government and the Prime Minister, in particular, for receiving Sheikh Mujib as he did and for the provision of an aircraft so that Sheikh Mujib could return to Dacca as expeditiously as possible.

On the question of recognition I recognise that there are considerable difficulties. I suspect that a decision will have to be taken very shortly. I wonder whether the noble Earl could answer just two questions on this matter. First, can he comment on the reports, which he will have seen, that Australia may be taking an initiative in recognising the Government of Dacca? Secondly. can he confirm that the Deputy High Commissioner of the unitary State of Pakistan is still in Dacca, and tell us what is his relationship with Prime Minister Sheikh Mujib? My Lords, I hope that the Government will keep the House informed, particularly on the aid programme. I am certain that Parliament will be only too willing to vote the necessary money to bring relief to the peoples of the sub-continent.

My Lords, I am grateful—and this is more than a form of words—for the general welcome which the noble Lord, Lord Shepherd, has given to my right honourable friend's Statement. I accept what he has said about the problems of aid: they are daunting. I mentioned, when repeating the Statement, what I would call the "pump-priming", the further contribution of £1 million which Her Majesty's Government have decided to extend. All I would say on this is that, clearly, this should be a concerted effort. I think that this, and I hope offers of aid from other countries, will help to bridge the gap while the situation is re-assessed and re-evaluated. On the question of recognition I am afraid that I need notice of the question about the Pakistan Deputy High Commissioner—

My Lords, I was referring to the British High Commissioner.

I am sorry. He is in Dacca at the present time. I noted what the noble Lord said on the question of recognition. He referred to a possible Australian initiative in this respect. All I would say is that we are in close contact in this matter not only with our Commonwealth associates, including Australia, but also, of course, with our American fiends and with our European friends. This is a matter which we are keeping under very close scrutiny indeed.

My Lords, my noble friends and I share the sentiments expressed both by the Government and also by the Opposition about this matter. There is one small aspect of the question on which I should like to add a word to what the noble Lord, Lord Shepherd, said. I recognise that there are difficulties, and indeed certain formalities, to be gone through with regard to recognition; but in so far as that Government appears to be firmly established I am not quite sure why our Government cannot recognise Bangladesh right away. It may be that there are certain obstacles. Can the Government assure me that there are no further obstacles of a kind which possibly your Lordships' House should know about, or is it possible that the Government would like to recognise Bangladesh, together with the other countries of the European Community, in the next few days?

My Lords, again I welcome the general stance of the noble Lord, Lord Henley, in response to my right honourable friend's Statement. On this rather delicate ground of recognition, I would wish to tread delicately, but in response to what the noble Lord has said I can confirm that there are no insuperable obstacles here. There is the normal question of the establishment of the normal criteria prior to recognition, but this is essentially a matter for consultation and a matter of timing.

My Lords, in welcoming very sincerely the Statement that has been made by the Minister, and particularly the attitude of the Government during the conflict, may I ask this question? Have Sheikh Mujib and the Government of Bangladesh indicated that they would desire Bangladesh to be a member of the Commonwealth? If so, can the Minister indicate when, in the consultations with the Commonwealth, the Commonwealth Governments were asked to give their views about the recognition of Bangladesh, when he expects their replies and when we may hope for a Government decision about recognition, which most of us desire?

My Lords, on the last point which the noble Lord, Lord Brockway, has put to me—and we recognise his very deep and continuing interest in this matter—I think I can only rest on what my right honourable friend's Statement said: that he hopes to make a further Statement on this matter of recognition in the near future and that we are in touch at this very moment with the Commonwealth and other Governments concerned.

On the question of the Commonwealth, I can confirm that Sheikh Mujib has stated that he hopes his country will be accepted into the Commonwealth. This is a matter on which we should naturally wish to ascertain whether there is a consensus within the Commonwealth, and again this is a matter which is under close study and consideration. May I add that it is also the desire of Her Majesty's Government that West Pakistan, too, will remain in the Commonwealth. This is a matter of which we should not lose sight.

My Lords, in joining with other noble Lords in paying tribute to the prudence and wisdom that have guided the Government on this matter, may I ask whether the Government have fully in mind the problems which will arise in the twilight period between non-recognition and recognition, particularly those which arise both for British trade and industry and for the British voluntary organisations, which are already doing work there? Clearly, of course, everything would be much easier if an official relationship could be established.

Yes, my Lords, I agree with what the noble Lord, Lord Gore-Booth, has said. All that I would add is that our representatives in Dacca on the commercial side are keeping a close watch for on-developments affecting British commercial interests and they have been authorised to keep in touch with the authorities in Dacca and give whatever assistance is required by British business men there in this admittedly rather difficult "twilight period", as the noble Lord has termed it.

rose to ask Her Majesty's Government whether they are aware that the rating valuation of any property (representing the estimate by an official of the Board of Inland Revenue of the rent at which the property might reasonably be expected to let) and the fair rent (as assessed by the rent officer on different principles) can, and often do, differ widely; and whether they contemplate any steps to rectify this anomaly. The noble Lord said: My Lords, I wish to avail myself of the flexible machinery of your Lordships' House in order to raise a matter of, I think, considerable longterm importance which it would not be easy to raise when any particular Bill was under discussion. The tenant of a house normally pays rent and he also pays rates. Under present legislation the annual value of his house for the purposes of rent is fixed in one way and for the payment of rates it is fixed in another way. I wish to invite the attention of the Government to this anomaly, which I think should not be allowed indefinitely to continue.

My Lords, with characteristic care the noble Lord, Lord Molson, has drawn our attention to what I think must clearly appear to the public to be a very anomalous situation. This is a particularly appropriate moment to discuss it, because the Government's Green Paper on Local Government Finance is before us and is now being discussed with the local authority associations and also because the Housing Subsidies Bill is at present under consideration in another place. There is no doubt that we shall have opportunities for rather wider debates on this subject in the future, and therefore I should like to confine my remarks this afternoon to the situation as it is at the moment.

In my humble submission, the noble Lord is really trying to compare two essentially different things. I have treated the noble Lord's Unstarred Question as an opportunity to try to clear my own mind on what do appear to be anomalies, and I am grateful to the noble Lord for having prodded me into this form of mental exercise. I should like to check my own assessment of the situation with that of the Under-Secretary of State. If we first of all look at the question of rating, we see that it is governed by the General Rate Act 1967, under which the Minister issues the circulars, to one of which the noble Lord, Lord Molson, referred. The relevant section of that Act is Section 19. I am sure that it is in the minds of every one of your Lordships, but perhaps I can refresh at least my own memory. The section says:

"'gross value'… means the rent at which the hereditament might reasonably be expected to let from year to year if the tenant undertook to pay the usual tenant's rates and taxes and the landlord undertook to bear the cost of the repairs and insurance and the other expenses, if any, necessary to maintain the hereditament in a state to command that rent."

From that gross value there can be certain deductions, which are specified from time to time by the Minister, and when those deductions are made it produces the net rateable value. As I understand it, when the Inland Revenue are making their assessments, they are making assessments, admittedly very broad assessments, which are altered infrequently. Although they use the hypothetical rent as a guide, they cannot take all the circumstances of the letting into account. To give one example, there may not be a letting at all. The degree of hypotheticality (if that is the right word) is obviously very acute.

I think that there are two further considerations. The first is that the gross value applies not only to lettings of domestic premises but to all classes of hereditaments and it is really intended, if my understanding is right, to establish a basis which will ensure a degree of uniformity among the assessments so that the ratepayers bear a relatively or proportionately equal burden. But it does remain a very rough and ready assessment of a man's wealth for purposes of local taxation. Obviously the rating system is not satisfactory, but it is the best we have, and I have not yet seen any very positive alternative put before us for our consideration. The noble Lord, Lord Molson, I noted accepted that on the whole the rating system works reasonably well.

The second consideration I should like to put forward on rating is that the existing assessments are based on lists which were deposited in 1963, and there will not be any new lists until 1973, the last Government having decided in 1968 to give the existing lists a further five years. Therefore, because of this time lag, there is I think bound to be a difference between the valuation for rating and the fixing of a fair rent worked out under the terms of the Rent Act. I think it is worth adding that when local authorities themselves use gross value as the basis for fixing council house rents it is always done, I suspect, on a multiple of more than one.

May I now turn to rents? Under the original Rent Act 1965, to which the noble Lord referred, and more specifically under Section 46 of the 1968 Act, which was amended by the Housing Act 1969, a fair rent is the likely market rent that a dwelling would command if supply and demand for rented accommodation were broadly in balance in the area concerned. In fact, as the noble Lord has reminded us, the scarcity value is excluded. We have had a most valuable and informative Report from the Francis Committee and also we have had the important Minority Report of Alderman Lyndal Evans; from these I think we do get a fairly good idea of the way in which the Rent Acts have worked. It appears that, overall, registered rents have been about, or slightly above, 20 per cent. lower than the market rents in the same area, and where there are areas of special housing stress the difference has been much wider. That, of course, is the kind of factor which valuation for rating cannot take into account.

The real point—and I say this slightly hesitantly—is that the assessment for rent is a tailor-made assessment for a particular property or group of properties and the rent officer or the rent panel can take into account special factors which do not apply in the case of rating. They can ask, for example, who is responsible for repairs to the premises: in the case of rating it is assumed that the owner carries that responsibility. They can also ask what the state of repair is. They can ask how far the tenant himself has improved the landlord's property, and can take that into account in fixing the rent to be registered. Because of these two completely different approaches in the case of rating and in the fixing of fair rents, I think there are bound to be discrepancies. However, I have the feeling that with the extension of rent regulation, and perhaps with some measure of reform in the field of local government finance, discrepancies will become fewer. I also have the rather unhappy feeling that quite often these discrepancies will become fewer to the disadvantage of tenants and ratepayers. But these are things that we can discuss when the appropriate legislation is before us.

Finally, my Lords, I should like simply to say that I hope that in what we say to-day we shall not give the impression of criticising the officials of the Board of Inland Revenue, the rent officers or the rent panels. I should like personally to pay tribute both to the rent officers and to the rent panels, and to congratulate them on the care with which Sir John Edwards and his colleagues, on the one hand, and Colonel Phillips and his colleagues, on the other, have dealt with this matter, which means so much to so many people in areas of great housing stress.

My Lords, my noble friend Lord Greenwood of Rossendale was perfectly correct in pointing out that there are differences of definition in the assessment of fair rents and of rateable values, which of course in some cases can result in a considerable apparent discrepancy between the two figures. However, there is another factor in this, and that is that although, broadly speaking, assessments for purposes of local rating are assumed or supposed to be in accordance with the market value, in practice they very seldom are. That is not a new phenomenon: it was, I think, pointed out as long ago as 1899 by the Royal Commission on Local Taxation and it certainly continued long after that time. The late Mr. Aneurin Bevan, when he changed the machinery of valuation from being a local matter to a valuation carried out nationally by officials of the Inland Revenue, took a long step towards securing at any rate a degree of uniformity between one locality and another. Previously there were certainly the greatest disparities, because so much depended upon the opinions of people in the particular area where the valuation was made.

No doubt as a result of a valuation by the Inland Revenue officials, some step has been taken towards bringing rateable values closer to market values, although naturally in the circumstances in which we are at present, when inflation is con- tinually taking place, the rateable values were bound very quickly to fall behind market values, even if they were close to them to begin with. But I doubt very much whether, even at the time when the rateable valuations were made, they approximated very closely to the market value. There is still a very great deal of reluctance to bring them up to the proper figure because it is very well known that this will produce a violent reaction on the part of the public, who naturally anticipate that the amount they will pay in local rates will be increased correspondingly; and so it generally proves to be. So one can well understand that officials, in all good faith, do not desire to make too drastic changes. And this difficulty is increased when, as has now happened, the interval between one valuation and another becomes 10 years instead of the normal five years which it ought to be. There is no doubt a case for trying to approximate the values for one purpose to the values for another, but the circumstances are different. The primary object of a valuation for rating is to ensure uniformity and equality as between one ratepayer and another. But the purpose of the assessment of fair rents is to ensure that there shall be a reasonable economic return to the owner of a property which is let, and that he should not be exploited by the accidents which previously prevailed in the method of fixing controlled rents.

My Lords, may I first apologise for intervening in the debate, since I have not put my name down on the list of speakers? For most of my life I have been intimately concerned with the valuation of property for rating purposes, and in the past decade or so I have served on a rating valuation panel which deals with appeals. It is my experience that the present system of valuation for rating purposes is unsatisfactory, does not give us equity as between one ratepayer and another, and is in need of overhaul.

In practice, the valuers value properties at a rate per square foot, and for that purpose they value only the building. In that way they try to get some standard upon which they can work; but the system has for sonic reason developed in such a way that it is grossly unfa the occupiers of smaller properties. Such things as quantity discounts are given, and there appears to be a practice of almost completely ignoring the environmental value of the site which is part of the property. Both its location and size appear to be ignored. Only yesterday I served on a panel. There was a large house immediately opposite council houses. The large house was surrounded by a private garden belonging to the house. For rating purposes only, the house was valued, and it was valued at ls. 4d. per square foot. The council houses immediately opposite, in the same road, were valued at 2s. ld. per square foot—they were much smaller, of course. That is rather general; it is not something that is outstanding. I find that in the City of Portsmouth, where I live, houses which are in the best sites in the town, on top of Portsdown Hill, have a valuation per square foot which is only marginally different from the houses in the slums of the town. For some reason the system is not giving us equity; the smaller properties are being over-rated as compared with the larger properties. Insufficient attention is given to environment, especially the environment provided by the private garden.

I can see only one way out of this situation. I was pleased to see in the Green Paper that the possibility of valuation on the basis of capital values was not entirely ruled out. It appeared that the Government were keenly interested in using the capital value method. I believe that that would be the best way of tackling the problem. Give us a clean start and make the valuation for rating purposes a percentage of the capital value. That will ensure that both the size and location of the site are taken into account, as well as the building itself; and that is something which is not done at the present time.

My Lords, as the merest amateur in these matters, I should like to take a little further the points which have been made by noble Lords who have spoken, particularly the noble Lord, Lord Douglas of Barloch. One has to admit that in any superficial and verbal sense it is an anomaly that a rent fixed in accordance with one set of words in accordance with another set of words should so greatly from a rent fixed which, on the whole, is intended to mean the same thing. It is one's experience of life that when one comes across a good anomaly, on the whole it is better to preserve it than to destroy it just because it is an anomaly. I see some grave danger if this brief debate were to create the impression that it is desirable that these two sets of rents should be brought into concordance with each other, because they serve wholly different purposes, as has been illustrated by noble Lords.

The purpose of valuation for rating is to establish equality between different properties in the same place and between different localities in the country. It would not matter in the least if every rating valuation came out at exactly half of what it ought to be, provided they were all exactly half of what they ought to be—or a quarter, or double—because equality would be preserved. On the other hand, it is essential that a fair rent should be absolutely right, for the reason that the noble Lord, Lord Douglas, gave—that the investor, the proprietor, the builder of a new house should get a fair return—and for reasons that I will not attempt to develop this afternoon; but on the Second Reading of the Housing Finance Bill, when it comes before your Lordships, I should hope to have an opportunity of developing reasons which are pertinent to the whole economics of the housing position in the country.

Let me say, in passing, speaking again as an amateur, that it would seem a great improvement in the system of rating valution if it were to go over to being based on capital value, for this reason: in different types of property in many parts of the country there are no rentals, and the attempt to assess one is a pure exercise in hypothesis; whereas it would be—one must not say "always easy"— considerably easier in almost every case to establish what the capital value of a property is. If it were to be established as sound doctrine that rating valuation and fair rental should be the same the danger that I apprehend—I fear I am only repeating what was said by the noble Lord, Lord Douglas—is that as a matter of ordinary practical politics it is unlikely that the rating valuations would be increased by the very substantial proportion that would be necessary to bring them, broadly speaking, into line with what had been established as fair rents. Even if that were done uniformly all over the country, one would have achieved nothing; whereas if a doctrine of equality came to be established it is much more likely that fair rents would be dragged down and we should get back, by indirection, into exactly the same muddle and mess that under Governments of both Parties we have been trying for some years to get out of—that rents are fixed far below their real value. Instead of moving, as would be so valuable in my opinion, to the system of subsidising not buildings but people, we should find ourselves gradually slipping back into the old system of subsidising buildings. I hope that the anomaly to which the noble Lord, Lord Molson, has pointed will be recognised as such and, as all good anomalies should be, will be preserved.

My Lords, I am grateful to the noble Lord, Lord Molson, for having drawn our attention to this question and to the noble Lords who have taken part in the debate, because this is a topic which is germane to the legislation on housing finance which we shall be considering later. I hope that the noble Lord, Lord Jacques, will excuse me if I do not follow him on the question he raised, which, although it is undoubtedly one of the greatest importance, is not the issue to which my noble friend's Question was chiefly directed; namely, the relationship between fair rent, on the one hand, and gross values, on the other, and not so much to the way in which each one respectively was assessed.

The short answer to the first part of my noble friend's Question is, Yes; Her Majesty's Government are aware that the rating valuation of any property and the fair rent of that property can indeed differ. To the second part of my noble friend's Question the answer is, No; the Government do not contemplate any direct or immediate steps to alter this, because, for reasons I believe I shall be able to make clear (and which I think the noble Lord. Lord Greenwood of Rossendale, and the noble Lord, Lord Douglas of Barloch, have already made clear) this is not so much the anomaly that it appears to be, but rather a necessary distinction arising from the different purposes for which, and the different methods by which, fair rents and gross values are respectively assessed.

Rating assessments of dwellinghouses are made on "gross value". This is, broadly speaking, the rent which it may be reasonably expected (the noble Lord, Lord Greenwood, dealt with it in rather more detail) a willing tenant would pay for the property to a willing landlord, on the assumption that the landlord does all the repairs and the tenant pays the rates. It is arrived at, as the noble Lord said, by an interpretation of actual rents paid in the open market (whether or not influenced by scarcity) at the time of a general revaluation. Until the next revaluation comes along the level of assessment is tied to the level of values determined for the latest revaluation. The assessments of gross values in the current valuation lists which came into operation in 1963 therefore represent valuation officers' estimates of rental values in 1962 based on rent returns made a year or so earlier. That is a point which the noble Lord rightly stressed.

On the other hand, the law—and the noble Lord, Lord Greenwood, reminded us of the legislation—provides that in determining a fair rent regard must be had to all the circumstances of the dwelling, and in particular to the age, character, and locality of the dwelling and its state of repair. The personal circumstances of landlord and tenant and any value attributable to scarcity of comparable accommodation in the area must be ignored. Thus we can already see that there are basic differences between fair rents and gross values. The first obvious point of difference arises from the time of determination. A fair rent determined in 1971 may well be very different from a gross value determined in 1962 because of the changes—

My Lords, may I interrupt my noble friend? The figures that I gave are for the assessment that will come into operation next year, and the fair rents that I mentioned are those that were stated during the last 18 months, so those figures are comparable.

My Lords, I am coining to that in a moment. I have only just begun to speak on the differences which separate gross values and fair rents. Because even if both assessments were determined at the same time—and those are the figures which my noble friend has been giving us—there could be, and often are, four further differences following four further reasons.

First of all there is the state of repair. In assessing gross value the valuation officer is required to ignore normal disrepair due to the failure of the owner to carry out normal maintenance, although an exceptional state of disrepair involving structural defects might well be taken into account. A fair rent should take into account the actual state of repair of the property at the time it is determined, except disrepair due to the tenant's non-compliance with the terms of his tenancy. The second of the four reasons is scarcity. A fair rent must ignore the fact that higher rents might be paid where there is an excess of demand over supply, but there is no such restriction in determining gross value.

Thirdly, tenant's improvements are ignored in determining a fair rent but are taken into account for gross value which must represent the value of the house as it is in fact with all its advantages and disadvantages, regardless of whether any feature has been provided by landlord or tenant. Fourthly and lastly, tenancy terms are relevant. A fair rent will reflect the various convenants of the two parties to the tenancy. Thus, to sum up, there is I believe a double justification for differences between gross value and fair rent. First, there is the difference in the purposes. Gross value is used for the purposes of equitably distributing the burden of local taxation among occupiers of property on a broadly uniform basis—this, I think, was the main tenor of the remarks of the noble Lord, Lord Douglas, to us. For that purpose it is necessary to make a universal assumption about the landlord's responsibility for repairs and in general to ignore the actual state of repair. On the other hand, when it comes to assessing fair rent in individual cases there is every reason why the landlord who keeps his property in good order should be able, under the fair rent provisions, to receive more rent than one who neglects to maintain his property.

Secondly, there is the difference, which the noble Lord, Lord Greenwood, enlarged upon, in the period for which the two assessments have to last. Rating revaluation should take place under Statute every five years; in fact this has not yet happened since the war and the last revaluation, as he reminded us, due in 1968, had to be postponed for a further five years. The rate assessment of a dwellinghouse can be altered during the quinquennium if. for example, the property is structurally altered, but the assessments for all new and altered properties have to be related to the level appropriate to the period just before the general revaluation. One would hope that revaluations would not be postponed beyond the quinquennium in the future, but it would be very unlikely that they would be made at any shorter interval. It would be inconvenient, and it is arguable that it would be quite contrary to the idea of a "fair rent", if the rent assessment was tied to a date anywhere near as long as five years ago. Under the Rent Act 1968 fair rents can be reviewed every three years, and more often when there is a change in the state of dwellings or in any other relevant circumstances; and this short interval seems proper for the purpose. My Lords, I hope I have been able to explain why gross value and fair rent differ and why, more often than not, as the noble Lord, Lord Crowther, said, they will, at least in this imperfect world, continue to do so.

My Lords, before the noble Lord sits down I wonder whether I might put one point to him. The noble Lord, Lord Molson, referred to the figures for 1973. My advice is that the Chief Valuer's Office of the Inland Revenue has agreed to make this information available in advance, but it must be regarded as purely provisional; and I understood, too, that it was being provided on a confidential basis and not for publication because if there were to be widespread divulging of the figures which are going to be the 1973 figures one can see many difficulties developing.

Yes, my Lords: I confirm that what the noble Lord says is so.