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Lords Chamber

Volume 375: debated on Wednesday 20 October 1976

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House Of Lords

Wednesday, 20th October, 1976.

The House met at half-past two of the clock: The LORD CHANCELLOR On the Woolsack.

Prayers—Read by the Lord Bishop of Wakefield.

Memorandum Of Understanding

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

The Question was as follows:

To ask Her Majesty's Government what progress has been made in promulgating the Memorandum of Understanding signed on 25th September 1975 by the USA and the United Kingdom, covering the mutual interchange of armament sales.

My Lords, British industry has been made fully aware of the provisions of the Memorandum of Understanding, and arrangements exist for advising United Kingdom companies of how they may take advantage of it in seeking to secure orders in the United States of America. For its part, the United States Government has taken steps both to ensure that the provisions of the Memorandum of Understanding are known throughout the Department of Defense and to bring them to the notice of major United States defence contractors.

My Lords, is the noble Lord aware that in the five-year period up to 1970 we purchased £1,000 million worth of arms from the United States, and in the last five years, £500 million, and the reverse purchases have been marginal, although the sale of the Harrier has improved them more recently? Is it not true to say that whereas at the top level there is a sincere desire to buy armaments from this country, this may not have worked down to the working level where the decisions are actually made? Is the Minister aware that after a year we very much hope that the working level there will know fully and will honour the terms of this agreement?

My Lords, I am aware, as is my right honourable friend, of the imbalance. The United States Department of Defense and a number of major United States defence contractors have been encouragingly helpful in assisting us in our attempts to ensure that United Kingdom companies are able to compete. A particularly welcome initiative from the United States is a visit by a team of high level United States procurement officials at the end of this month, during which they will have detailed discussions as to how the Memorandum of Understanding can be most effectively implemented from now on.

My Lords, in view of the existence of this Memorandum of Understanding, will the Minister consider publishing at intervals particulars of the sales which have taken place in both directions?

My Lords, this is difficult because many such sales are confidential. The Memorandum of Understanding can be seen in the House of Commons Library, and I am certain a copy could be obtained for your Lordships' House. I should imagine that the annual debate on the Defence Estimates might be of advantage for asking questions on the subject. Collaboration is very close to the heart of Her Majesty's Government.

My Lords, I realise that the exact particulars cannot necessarily be published, but could a broad indication be given of the value of the orders in both directions?

My Lords, I will pass that comment on to my right honourable friend, and, as I would say that this is a very important part of British defence policy, I will see whether it can be reported upon annually in broad terms.

My Lords, in view of the report in The Times newspaper this morning, and the news that has been current elsewhere, that our Centurion tanks have now been outmoded by the production of a new device by the American Pentagon, shall we be compelled now to buy even more from the United States?

My Lords, I am not aware of the point made by my noble friend. I will let him know, if he will put down a Question later.

My Lords, may I ask my noble friend whether, when considering the question of the sale of armaments, he could link with it the sales of ordinary commercial goods which have hitherto been barred from the United States on the pretext that they may in some way be concerned with the Armed Services? An enormous number of perfectly ordinary conventional goods have been refused admission to the States for this totally specious reason, which has been used to great effect to protect American industry by a process which we have so far been unable to overcome. Even such things as ordinary diesel engines, for example, have been refused admission. Can this also be taken into account when we consider this question of the sale of armaments, to which it is inextricably linked?

My Lords, I am grateful to my noble friend for his helpful comment. I will bring it to the notice of my right honourable friend.

My Lords, is not the essential difficulty in implementing this agreement the fact that the Americans produce much better arms at a much more competitive price?

My Lords, when the visiting team arrives—and perhaps even before they arrive—would the noble Lord stress that it is important that the instructions from the top in the Pentagon should filter down, and should be issued down, to the working level? Up till now, even though over a year has elapsed, this has not come about. We very much hope that these instructions will be issued before the team arrive here, so that we can get on and progress this effort.

The Malton By-Pass

2.43 p.m.

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

The Question was as follows:

To ask Her Majesty's Government when it is proposed to construct the Malton by-pass on the A64.

My Lords, as soon as resource constraints on road expenditure permit.

My Lords, has the noble Baroness taken into account the fact that the three projected by-passes on the A64 are really one scheme? To go ahead with the York and Tadcaster by-passes and postpone the Malton one is going to make traffic congestion in Malton quite unmanageable and frustrate the Government's own policy of encouraging industrial development in the Scarborough, Whitby, Malton area.

My Lords, I accept what the noble Lord says, that the Malton by-pass is in effect part of one continuous scheme and that there will be problems and congestion; but because of the limited funds available other schemes in the national network have an even greater priority.

My Lords, would my noble friend be able to give an assurance that when finance is again available this Malton by-pass will go ahead before expenditure on further motorways is embarked upon? Is my noble friend aware that this is a scheme that has been pressed for very many years? The traffic from the West Riding and the industrial traffic going to Whitby and Scarborough via this old market town, with its narrow streets, its crossroads in the centre where there are traffic lights, and then over the railway and river bridge, creates very difficult congestion, and there is a case for a first priority to be given as soon as finance is available.

My Lords, I thought I had made it clear in my original Answer that as soon as the resource constraints on road expenditure permit, this will be one of the schemes that will be carried out.

My Lords, has the Minister considered that one of the things that the country is being asked to do is to economise in fuel? If the Minister could see the build-up of traffic coming from the Leeds, Bradford, York area into Malton, especially during the summer months, she would see that the expenditure on the road might well be offset by the economy in fuel.

My Lords, my Department has looked at all the schemes. This scheme will cost about £6½ million. It was formerly due to start this month, and tenders had been invited when the July cuts came. Since the announcement of the deferment we have had made very plain to us by the local action groups, and all other people, the difficulties that will prevail if this part of the scheme is not able to be carried out. In the announcement of the deferment of the schemes my right honourable friend in another place said that this one was included, which meant that it was set back by one to two years, with an approximate starting date of 1978. But that, we hope, is a pessimistic date, and as the resources become available we hope to be able to speed up the start.

My Lords, may I say that if I ask any of your Lordships next year to come up and stay for a weekend, if you come by road you will not arrive until Monday morning?

My Lords, could the Minister say whether the Government considered applying to the Regional Fund of the EEC for help on this by-pass?

My Lords, I have no information on that score. If the noble Lady would like to put down a Question I will get the information and let her know.

My Lords, could the noble Baroness say in what year this Malton by-pass was first conceived?

My Lords, it went into the trunk road preparation pool in February 1967. Presumably a lot of protest has been made from all sides since then, but it did go in the trunk road preparation pool in February 1967. We appreciate that there is a bottleneck, we appreciate all the problems to the commercial and holiday people, and we will do our best; but we must have the money first.

My Lords, is the Minister aware that the Conservative Party are always shouting for cuts in expenditure by the Government, yet they are now pleading for extra money to be spent. This is while they are shouting outside that the Labour Party are not making sufficient cuts in capital expenditure.

My Lords, I am grateful to my noble friend for his support. We have had to look at our priorities. Malton, regrettably, is not one of the highest priorities. We will do the job as soon as possible.

My Lords, is the noble Baroness aware that my head is positively stuffed with good ideas, all of which would greatly improve the country but many of which would cost a great deal of money? Is she also aware that I shall inflict none of them on her or any of her friends while the country is in its present state?

My Lords, will the noble Baroness realise that this scheme started 47 years ago, when it was costed at £100,000? Forty years ago it was accepted by the local highway authority at a cost of £200,000. It is really false economy to put off what must be done in a very short period of time.

My Lords, I cannot be held responsible for something which Governments before the one of which I am a member had an opportunity of doing.

My Lords, will the Minister take note of the fact and assure me that the Government are aware that a world shattering event has happened today? When the noble Lord, Lord Popplewell, has to ask the Government to do something like this about roads around Malton, matters must be very bad indeed.

Soviet Freight Charges

2.50 p.m.

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

The Question was as follows:

To ask Her Majesty's Government whether they can report on the representations made unanimously by interested European countries, including Great Britain, to the Soviet Union on their unrealistic freight charges for shipping.

My Lords, the United Kingdom has taken this matter up with the Soviet Union in the Anglo-Soviet Joint Maritime Commission and I understand that a number of other European countries have done likewise in bilateral discussion. My Ministerial colleagues have discussed the issue with a number of Ministers abroad, and official multilateral consideration of the question is continuing in Western international shipping fora. At the same time there have been contacts at commercial level.

My Lords, while thanking the noble Lord for at any rate quite a lot of information, may I ask him when he thinks it likely that we will really hear that something has happened?

My Lords, this is a long-term question of negotiation. The noble Baroness will recall, because she asked a Question about it, that in July there was a conference in Leningrad, at the commercial level. At that conference the Soviet shipowners expressed their desire in principle to work within shipping conferences. We believe this to be a helpful approach and we have noticed some recent evidence of apparent Soviet willingness to reach a commercial settlement in some areas; an example is the negotiation last month by the Russian Baltatlantic Line of membership of the shipping conferences on the North Atlantic.

My Lords, again I thank the Minister for that information. May I ask him to say when he thinks it would be suitable for me to table another Question, bearing in mind that unless one keeps on putting down Questions things fail to proceed?

My Lords, I assure the noble Baroness that her Questions are welcome. I suggest that, as two important meetings in this connection are to be held in November—I think on the 2nd—some point after that date might be an appropriate time for her to ask another Question.

Oil Exploration: Licence Applications

2.52 p.m.

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

The Question was as follows:

To ask Her Majesty's Government how many of the 53 applications for offshore exploration licences under the fifth round were received by 15th September, and how many of those received by 5th October are from groups depending mainly on foreign finance; and when the allocations will be made public.

My Lords, no applications were received by 15th September. It is customary in the industry for companies to withhold their applications until just before the deadline. The response has been encouraging and shows that the United Kingdom Continental Shelf continues to be an attractive oil province. The applications are now the subject of commercially confidential discussions, and I am therefore not able to comment on the applicants or their financial resources. A further statement about the round will be made when the applications have been examined and decisions taken on the award of licences.

My Lords, in thanking the noble Lord for that Answer, may I also, through him, thank the Secretary of State for a letter which he was good enough to write to me on the matter when my Question went down? Would not the noble Lord agree that the round threatened to be a complete flop until BNOC made it known that, in exercising its 51 per cent. share, it would also undertake a 51 per cent. share of exploration costs from the beginning? Was not that the hump which had to be got over and which resulted in a goodly flow of applications afterwards?

My Lords, I cannot of course answer for the companies, but I think it more than likely, in view of the preparatory work required prior to applications, that decisions to apply were taken more than three weeks before the deadline. The Government have throughout been confident of a satisfactory response to the round.

My Lords, are the Government still pushing all applicants retrospectively to accept BNOC's 51 per cent. share in previous licences as a condition for favourable treatment on this occasion? Is Esso holding out against this condition and, if so, will this not cause delay in making the final allocations?

My Lords, I am afraid that I cannot answer for Esso at the moment, or indeed comment on any individual company's application during this confidential period. Her Majesty's Government will assess applications by taking into account all the published criteria.

My Lords, would the Minister admit that the confidential discussions that have already taken place have included pressure amounting virtually to threats on applicant companies to accept retrospective participation, including in at least one case a suggestion that senior executives of the companies might have their residents permits withdrawn?

My Lords, would the noble Lord agree that, if pressure is being put on these applicants in this manner, it is totally out of accord with every assurance that was given at the time of the debate on the nationalisation of North Sea oil? Will the noble Lord look into this as a matter of urgency and with great seriousness?—because, if it is true, it needs to be known, and if it is not true, it needs to be announced that it is untrue.

My Lords, we treat this matter with particular seriousness. If the noble Lord would like to put down a Question, I will of course answer it.

My Lords, since my noble friend said that on this issue it would be wrong for the Government to give details of confidential decisions, is it not right that the Government are unable to break that confidentiality at this stage?

My noble friend is absolutely right, my Lords, as he often is. These matters are now the subject of commercially confidential discussions with individual applicants, as I said. There are competing applications for many blocks and it would not be appropriate to comment at this stage.

My Lords, would the noble Lord agree that, while respecting commercial confidentiality, to use confidentiality as an excuse for the kind of pressure to which my noble friend referred would he totally improper?

My Lords, may I ask the noble Lord to confirm or deny that on about 12th October—namely, a week after the deadline closed—a letter was sent to certain applicants asking what was their attitude to retrospective acceptance of BNOC's share in existing licences?

My Lords, following the invitation to apply, the Government reviewed the optional arrangements for BNOC making its contributions and concluded that, as expenditure on development under fifth round licences was unlikely to arise until the early 'eighties, BNOC should by then be favourably placed to finance its share as expenses were incurred.

My Lords, may I ask my noble friend for an assurance that we will not shift from the 51 per cent. control of all licences for North Sea oil? Is he aware that I want to see the British people controlling North Sea oil and not private enterprise making a haul out of the whole job?

Yes, my Lords I am sure that there is a great deal in what my noble friend says. The Government, through BNOC, will get all the profits from its 51 per cent. share. If the companies pay on average 70 per cent. of their profits on their share, as we estimate they will under existing licences, then, with participation, the Government's total take would be perhaps about 85 per cent. from profits over the life of the field.

My Lords, may I ask the noble Lord to be so kind as to answer the question which I just put to him about the letter which, according to my information, was sent on about 12th October to a number of applicants asking what was their attitude to accepting BNOC's 51 per cent. share in licences already existing under previous rounds? If he does not know the answer now, will be find out and give it to the House?

On the question of the commercial confidentiality of these negotiations, is it not apparent from the questions that have been put to the Minister that some information is being given by the commercial companies to noble Lords? As the companies have no objection to the information being released, may I ask the noble Lord at least to undertake to consult them and make a statement later to the House about any conditions that may have been put to the companies as part of the negotiations?

My Lords, I will certainly bring what the noble Lord has said to the attention of my right honourable friend.

Select Committee On Commodity Prices

3 p.m.

rose to move That the Select Committee on Commodity Prices have power to adjourn from place to place. The noble Lord said: My Lords, the House will remember that the Select Committee on Commodity Prices was set up in January this year. At that time it was thought unlikely that it would find it necessary to meet elsewhere than in London. It was, however, always understood that it should have the power to adjourn from place to place should the need arise. The Committee is now well advanced in its inquiries and hopes to conclude them in the next two or three months. It now finds it necessary to ask for this power for one specific purpose: this is to enable a quorum of the Committee to travel to Europe for a meeting with the Secretary General of UNCTAD, Mr. Gamani Corea. The bearing of UNCTAD's work on the Committee's remit is self-evident and I am satisfied that the Committee should be allowed the power of travel for this purpose. I hope that the House will agree. I beg to move.

Moved, That the Select Committee on Commodity Prices have power to adjourn from place to place.—( Lord Peart.)

My Lords, when the announcement regarding the appointment of the Committee was first made, it was strongly urged that there would be difficulty in the Committee achieving anything very much unless some firm and constant unit of measurement could be determined and used. The fluctuations in the commodity prices which the Committee was appointed to investigate would have much less, if not little, meaning unless there could be some stable unit against which the fluctuations could be measured. Has any progress been made on that? Also, may I ask the noble Lord whether it is intended that some interim report should be published and, if so, how soon is that report on progress likely to be made?

My Lords, I understand that the Committee is anxious to proceed as quickly as possible and also to have proper discussions, and I believe that what I have suggested is reasonable. The noble Lord, Lord Roberthall, is in his place today and no doubt he can answer detailed questions.

My Lords, can we have information as to the number of members on this Committee? When the matter was originally raised, I believe I asked a question about this journeying from place to place, for commodity prices have more than national ramifications—indeed, they have worldwide ramifications. How far have the members of the Committee to travel and how much will it cost, and is it worth while?

My Lords, I agree that one must be careful about this. There are nine members of the Committee, which is chaired by the noble Lord, Lord Roberthall, who is here today. I think that, in the circumstances, it is important that they should go to UNCTAD Headquarters in Geneva. It is not usual for the Secretary General of an international organisation to be summoned to places outside the area where his organisation is sitting. Therefore, I feel that this is reasonable.

My Lords, I think it very unlikely that the Committee will want to use this power except for the purpose already stated by the noble Lord the Leader of the House. We have had great difficulty in getting hold of proper representatives of underdeveloped countries and therefore we attach great importance to being able to see Mr. Corea, who is in a unique position to speak on their behalf. As regards the questions raised by the noble Lord, Lord Barnby, which are not strictly relevant to the Motion proposed by the noble Lord the Leader of the House, we are hoping to make a report in the early months of next year. It is an extremely complicated subject and I do not feel that an interim report would be worth reading.

On Question, Motion agreed to.

Rent (Agriculture) Bill

3.8 p.m.

My Lords, I beg to move that the House do now resolve itself into Committee on this Bill. In doing so, may I take this opportunity to say that, following representations which I have received, I shall not be moving Amendments Nos. 86 and 97 to 99. They will be withdrawn from the next issue of the Marshalled List. I beg to move.

Moved, that the House do now resolve itself into Committee.—( Lord Peart.)

My Lords, we are very grateful to the noble Lord, Lord Peart, for having indicated that he does not intend to move these Amendments. We made representations that we thought it wholly inappropriate that these Amendments should form part of the Bill, and we are very grateful to the noble Lord for having listened to those representations and deciding not to move the Amendments. However, I feel that the Amendments should not have appeared on the Marshalled List in the first place. Amendment No. 97, for instance, takes up eight pages and refers to matters such as the Housing Act 1957, the Rent Act 1965, the Housing Acts 1969 and 1974, the Counter-Inflation Act 1973 and so on and, in order to achieve the Amendments, the Government had to put down one to alter the Long Title of the Bill.

We accept and are grateful to the noble Lord for having decided not to move the Amendments, but I believe—and I say this with the greatest possible respect to the noble Lord—that these Amendments which appear on the Marshalled List in his name, should not have been put down when the Government are in trouble with their business and we, as the Opposition, are doing our best to accommodate the Government. To have something like this suddenly appear on the Marshalled List, even if it is removed at the last minute, puts a very considerable strain on everyone trying to decide what is on the Marshalled List and whether it should or should not be so. It really jams up business in a quite disagreeable manner. However, having said that, we are grateful to the noble Lord for removing the Amendments.

My Lords, I naturally discussed this matter through the usual channels and I believe that it was right to take the action I did. I may add, though, that my noble friend Lady Birk wrote about this matter to one of the colleagues of the noble Earl, the noble Baroness, Lady Young. The letter was dated 7th October. No discourtesy was intended, I can assure the noble Earl. There are great arguments here about consolidation. I am not a legal expert and do not pretend to be, but I think it right in the circumstances to take the action I have. I shall of course have this examined.

On Question, Motion agreed to.

House in Committee accordingly.

[The BARONESS TWEEDSMUIR OF BELHELVIE in the Chair.]

Clause 1 [ Interpretation and commencement]:

3.9 p.m.

The noble Earl said: This Amendment appears in the name of the noble Lord, Lord Swaythling, and myself and with it goes Amendment No. 2. I think it may be helpful if I explain at the outset the attitude which my noble friends and I have tried to adopt in our consideration of the Bill and the Amendments so that your Lordships can be perfectly clear where we stand.

We had a full Second Reading debate when it was made clear that our concern was not over what might be called the "humanity" aspect of the Bill but over the sheer practicality of making it work, and its effect on the efficiency of agriculture as an industry. I explained on Second Reading and I reiterate that I have very much sympathy with the underlying feelings that motivated this Bill, and that goes also for my noble friends. Eviction is unpleasant whatever the reasons and wherever it is found. That does not mean to say that there are no conditions where it ought to exist or where provision for it ought to be made.

In the same way I should not wish to minimise for one minute the emotional or traumatic stresses which the processes of court orders for possession can cause. They are real and they are frightening, and this is to be recognised by everyone. Furthermore the dignity of people becomes involved. I should not like it to be thought that in discussing any of these Amendments, or indeed even in putting them down, we on this side might be considered to be unseized of these feelings or unsympathetic towards them; we are not. They are fully recognised and fully accepted. I think it right that we should also make it clear at the beginning that on that part of the Bill which deals with what—for want of a better expression—I might call the humanity side there is no disagreement whatsoever. Where there is disagreement, it is over how the Bill is to work and how it will affect interests other than those of the immediate tenants for whose benefit it is introduced, and what is the correct balance to obtain for all those inevitably conflicting interests which get impinged upon by the Bill.

In some ways we are also handicapped because many of my noble friends and myself are farmers and landowners, and so as regards the Bill we might be considered to be landlords, and by those less charitable than some we might be accused of having a biased approach to the Bill. All I would say to that is that in the Amendments in my name and in the names of my noble friends, we have sought to be unbiased and to put down the Amendments solely in the interests of agriculture as a whole, and to enable the Bill, if and when it becomes law, to work as smoothly and effectively as possible. I thought it might be helpful to make that absolutely clear from the beginning so that we know where we stand and we know what are the reasons for our putting down some of the Amendments.

The first Amendment, in the names of the noble Lord, Lord Swaythling, myself, and the noble Lord, Lord Sandys, seeks to exclude dairy farming and livestock keeping and breeding from the provisions of the Bill. I realise that at first impression that may seem to be a fairly sweeping Amendment, and I will try to explain why we have put it down. The Bill gives security of tenure to farm workers. At Second Reading the noble Baroness, Lady Birk, explained quite clearly that the object of the Bill was to put the onus of housing farm workers on to the local authorities. We will consider at a later stage whether in fact the Bill as it is will achieve that. But the fact is that after one has gone through all the gamut of the Bill and all its provisions, it gives security of tenure; that is what the Bill is about.

If there is security of tenure in houses which are erected for and kept for stockmen, then there will be situations, in my view, where stock may well not be looked after. Of course in the old days dairy herds consisted of 10 or 15 cows. Sometimes there were a few pigs on the farm and periodically some poultry as well. But as economics have changed, so the very nature of farming has changed, and now there are dairy herds not of 10 or 15 animals but sometimes consisting of 30 animals, sometimes 120 and sometimes even 250, all in one place. Intensive pig units can now consist of not just hundreds of pigs but even thousands. Now an intensive poultry unit with 50,000 birds on a site is considered to be a small site, and such units can go up to 250,000 birds, all on one site.

It stands to reason that two results emerge from this situation. The first is that the capital involved in these enterprises is vast, and the second is that these stock, being animals, have to be looked after, sometimes 24 hours a day, and certainly seven days a week. This is not always done by the same person, but the management has to be there to achieve it. Anyone who knows anything about agriculture—and I reckon that a considerable number of people do—will recognise that the secret of success of any form of stock farming is stockmanship. If there is a good stockman the thing works; if there is a bad stockman it does not.

Inevitably with these units and with the vast sums of money tied up with them, it is essential frequently that houses should go with the units. Sometimes houses are erected specially, sometimes houses are earmarked specifically for a stockman. This enables the farmer to put into a house a person who will be able to look after the animals to the best of his ability. Frequently this means that a stockman returning home at night will take the opportunity of going around and seeing his animals before he retires to bed. That may be against normal industrial practices, but it is one of the facts of stockmanship, and a good stockman will do that.

If a stockman leaves, or has to be changed because his management is not good, then under the Bill he is permitted, indeed entitled, to stay on. I ask your Lordships to consider for a moment what the effects of this would be. Let us take, for example, a dairy unit of possibly 120 to 200 cows, all of which have to be tended and looked after. Under the Bill a stockman may leave his job yet remain in the house. What would the farmer then be able to do? Of course he can go through all the processes of notifying the local authority. He can inform the agricultural dwelling housing advisory committees—which have been called ADHACs for short—of the problem. But once all this has been done, it may be six months before the problem is resolved, and even then it can be resolved only by the local authority finding another house. Meanwhile the animals have to be looked after.

A farmer may well do this himself, or perhaps he will try to get somebody else to do it. But picture the situation. If he knows that his stockman has gone or is going, he will advertise for a new stockman. If he advertises and—as I said on Second Reading—states in the advertisement that there is no house available, the fact is that he will not get any replies. If, on the other hand, the farmer does not place such an advertisement in the paper but then invites a prospective new stockman over, he will then have to say, "This is the house which will go with the job, but you cannot go into it yet because my previous stockman is remaining on. He may be there for three months, six months, 12 months, or even for two years. So you cannot have that house until it is empty. But I will provide you with a caravan." The practicalities of the situation are that a stockman will not come to such a post. Imagine the situation if a stockman is asked to bring his wife and children to live in a caravan. This point will be discussed under later Amendments, but the fact is that stockmen are highly paid, highly skilled people, and it is unlikely that they will be prepared to move from one job where they already are into a new job where they have to live in a caravan in the hopes that one day a house may be available. That is a real practical difficulty.

I now move to the next point. Any farmer engaged in a business is able to take immediate action. Anyone can deal with a problem of short duration; of course he can. What is impossible is for him to deal with a problem which is of long duration. It may well be that some of these houses, some of these units, are right away from towns—they usually are—and quite reasonably isolated. I venture to suggest that those farmers who are beset with the problem of finding a new person and not being able to have possession of the house which has been specially designed and erected for a stockman may well in the end say, "It's just not worth it. It's not worth the palaver of a seven-day week. It's not worth the responsibility. It's not worth the capital investment. It's not worth trying to make a go", when not only have you got all the worries connected with livestock farming but, on top of that, you have got the problem of finding a stockman and putting him into a house, which you cannot get hold of. If that were to happen on any large scale at all, the effect would be that farmers would give up their livestock holdings.

One of the great fears about this Bill as it stands at the moment is, as I said on Second Reading, that with all the paraphernalia contained in this Bill one thing that the average farm worker—and indeed the average farmer, but particularly the farm worker—will gather from it, is the four words, "Now I can stay". Therefore, if you get a problem such as I have described in one place, the danger is that the effect of this Bill could be such as to increase the feeling among people, "All right, if I have to leave my job I can still stay on. It's my right to stay on".

The noble Lord, Lord Peart, who was after all a very distinguished Minister of Agriculture and who knows more about agricultural facts, I suppose, certainly from a ministerial point of view, than anyone else in this Chamber, knows perfectly well that there has been considerable difficulty over ensuring that there are sufficient dairy cattle. The statistics have been going down in the past. If the result of this Bill is that this trend of giving up cattle and a reduction in dairying were to take place, the effects on British agriculture would be very substantial, because this means that in the end it would not be doing the job it is supposed to be doing, which is providing food for the nation. That applies whether it is dairying or beef, intensive poultry units or intensive pig units.

If that were to result from this Bill—and I put this not as a short-term problem but as a long-term problem—I think it would be a sad thing. I do not believe the noble Lord, Lord Peart, would want for one minute to think that this Bill might in fact result in a depletion in the number of stock kept by farmers and a lowering of the ability of British agriculture to do the job that it ought to do. I put forward this Amendment with great feeling for this reason: I believe that the stockman's situation is totally different from that of the other people involved with agriculture. It is perfectly possible to say that a tractor driver could live in a village or live away from the farm. It is perfectly possible to argue that a tractor driver could live in a local council building, but it simply is not practicable to say that stockmen can live in council houses away from their jobs.

This is the real nub of it. If stock are to be properly looked after and adequately catered for, then the stockman looking after them as to live on his job, and the effect of this Bill as it stands now is precisely not to enable that to happen. It is for those reasons that I hope that the noble Lord, Lord Peart, who has the interests of agriculture very much at heart and who must know in his own heart of hearts that this could have a restricting effect on agriculture, will give this Amendment very serious consideration and realise that, whatever the merits of the Bill in many other respects, it really is impracticable to let it refer to stockmen. I beg to move.

3.25 p.m.

I must first say that the remarks I have to make on this Amendment are my own remarks and that I do not speak in any way on behalf of my noble friends on these Benches. I could not agree more with what the noble Earl, Lord Ferrers, has just said. If I may say so, he has said it very much better than I could put it to your Lordships. I should like to say that this Bill is full of discriminations. Its main discrimination is, as we said on Second Reading, that it is dealing with tied cottages, as they are colloquially called, better known as service houses. It deals with these in 10 per cent. of the cases. As we said on Second Reading, there are many others: miners', railwaymen's, police, the Armed Forces', nurses' and other hospital workers' service houses, and so on. It is therefore discriminatory in that way. On this Amendment, can we not arrange to discriminate again; to discriminate in favour of those stockmen to whom the noble Earl referred, those who are so essential for their duties? The herdsman has to be there when his cattle calve, the shepherd when his ewes lamb, the pigman when his sows farrow, but those are not the only times. As the noble Earl said, it is really a seven-days-a-week job and any good stockman is so devoted to his job and so anxious for the health of his animals that he recognises this completely. I feel that, as the noble Earl said, it would be impossible for farmers to carry on if this Bill contained the words of the paragraph that it is proposed should be left out. So I give my most sincere support to the noble Earl in what he has said and I trust that the noble Lord the Leader of the House will accept this Amendment.

May I say a short word, which I very seldom do these days, in support of this Amendment. I have been for nearly 50 years a farmer and a landowner. My wife was the first woman ever to qualify as a land agent and she shares my views. As the noble Lords have pointed out, this is a very peculiar set of circumstances, when you come to dairy-farming and sheep. Cows calve at night, as the noble Lord has told us, and there have to be people there at the time. We have something like 170 cows at home and they are in more than one building. This means that it is necessary to have people there every night, for that reason and others. Another reason is that the herdsman looks round the cows late in the evening to see whether any of them need bulling. That is something which also has to be done. If you have a lot of sheep, the sheep have lambs, and the lambs come at any time of night or day and have to be looked after. It is essential to have men who live on the farm, if it is a dairy farm or a sheep farm. I know that the noble Lord, Lord Peart, is well aware of all that I have said and I hope that he will take every step he can to meet these difficulties, which are, indeed, genuine ones.

I want to say, first, that, concerned as I am with this Bill, I do not intend to jump to my feet on every Amendment. One appreciates that there is a considerable shortage of time and that this House and its Committees must get through a great deal of work. Therefore I intend to contain myself. But I must say one or two things on certain of the Amendments. I appreciated what the noble Earl said about humanitarian matters when he started his speech. I believe that he feels that these considerations must be taken into account, but I would point out to him that the Amendment itself absolutely contradicts that sentiment. After all, the Amendment would eliminate dairy and stock farming, which represents a large proportion of the farming industry and is one in which very many men and women are employed. These men and women are just as entitled to protection as the farm workers who are doing other kinds of work in the industry.

The Bill itself concerns agricultural workers; therefore Clause 1 of the Bill is very necessary because if you are discussing agricultural workers you must define "agriculture". This clause defines "agriculture" so that we and every one will know what people we are talking about in the remainder of the Bill. I should like to see the Bill go through and I hope that it will go through unamended. I would point out to your Lordships that this draft was arrived at only after full consultation with all sides of the industry and others. It is therefore the result of considerable discussion and consultation, and the Government decision on it was not taken off-hand but only after all the people concerned had been consulted and their views taken into account. I ask the Committee to bear in mind that agriculture is a wide and extensive industry. It is important to this country; and, as I said on Second Reading, this is the one element in relations between farmers and farm workers which creates bitterness. I do not want to go into that again. I am convinced after many years of experience—and I hope that your Lordships will believe me—that if we can clear up this matter, then the one remaining point of friction and bad feeling in the industry will be cleared up.

The noble Earl, Lord Ferrers, painted a grim picture of the consequences of this Bill and, in particular, the consequences to dairy farming and stock farming. The Committee will forgive me if I say that I do not believe one word of it. I think it is a wild exaggeration. Already we have countless farm workers—and women workers, too—who are stockmen who are required to look after the needs if stock and who are living in tied cottages. Occasions arise when these same workers leave their employment or are dismissed from their employment or become ill or incapacitated. The problem arises only occasionally; it is not a common occurrence; it happens in a minority of cases. The local authorites have already acted to help resolve the situation. I have not seen, nor do I expect to see, any breakdown in the industry in stock-keeping and dairy farming, or in any other aspect where workpeople are required to look after stock. That I do not accept, and I suggest that this is an exaggeration.

I know the industry and I can claim, perhaps, to know the problems which arise on both sides of the industry. This, in fact, will not constitute one of them. The cases will be few and far between and most of them will be resolved satisfactorily. I would therefore ask your Lordships to discount these scare stories about what might happen. I assure you that it will not. I say this sincerely and from knowledge. I would not seek to mislead your Lordships on this point.

I do not wish to cross ploughshares with the noble Lord, Lord Collison, but I feel in relation to the beginning of this Bill (one of the objects of which is to provide security of tenure, particularly to stock-men) that if you do not have a tied cottage or a service house for a stockman you are making the security of tenure less. If you have a first-class stockman anywhere in England, Ireland, Scotland or Wales, he would know that if for family reasons he wants to change his environment he will be able to find another job with a good house to go to. The farmer who employs him will know he can get a stockman of the same quality and efficiency. In a sense, security of tenure is greater this way.

The noble Lord, Lord Collison, rightly said that this was a very minor problem compared with the number of people actually involved. He went on to say that we on this side of the Committee were indulging in scare stories. I do not think we are indulging in scare stories, but there is a slightly worrying thing that if you do, this particular aspect could produce the wrong impression: it would produce the impression that all stockmen stay for ever and consequently the legal machinery will have to be gone through more frequently than at the moment. Secondly, I do not think that we have to lecture the noble Lord, Lord Peart, on agriculture; I think that a lot of us could be lectured by him to good advantage; but I have a feeling that we do have to lecture the noble Baroness, Lady Birk, on this subject. In her Second Reading speech she prattled on about "rotten roots". As the noble Lord, Lord Peart, said, she spoke eloquently. The use of the words "rotten roots" was not perhaps showing her normal standard of high judgment—I will put it like that.

Next, I want to underline the stockmanship and calving aspect. One has been told that one must not speak from personal experience. It is very difficult to know whether personal experience underlines a situation as one sees it or whether one can be accused, possibly with justification, of being the most monumental bore about what happens on one's own farm. I will risk that accusation and will just say this on this particular point. I have been out to dinner late at night and have come back and have found that the stockman has also been out on Saturday evening, and I have been in my dinner jacket, with sleeves rolled up, trying to pull out a calf, helping him. If he is not very near to where this particular operation is going to happen, it is going to make stock-keeping more difficult.

This leads me on to my next point, which is that 80 per cent. of English-consumed beef is produced in this country, 100 per cent. of our drinkable milk, 90 per cent., I think, of our pork and 100 per cent. of our eatable chickens. This is a very capital intensive business and if we make it more difficult for the farmer we shall have a situation where two further people are going to suffer. First, the consumer: if we do not produce as much as we do already prices will go up and pressure on the Green Pound will become even more severe. Secondly, the farm worker will suffer and, above all, the balance of payments will suffer. There are complaints from consumers already about the perpetually rising prices; the balance of payments is under the most appalling stress and one does not want to make points about the general state of the economy.

We all know that we are in a position in which the Beggars' Opera might have to become our national anthem. We must be very careful that we do not make it more difficult to feed more of our people as cheaply as possible. I know that the noble Lord, Lord Peart, understands this. I know that the Labour Party, for all its good aspects, is basically an urbanly based Party, and since the Corn Laws the industrial working class has exploited the agricultural working class in the benefits of cheap food.

I sometimes hesitate to intervene in matters with which many in this House are more intimately connected than I. I have listened for years to the kind of arguments put up in regard to the Rent Acts, and I am bound to say that the desperate fears presented to Parliament by enthisiasts who know their subject and who have tried to prevent the protection which I believe on humane grounds ought to be afforded to every individual, have proved to be wrong.

I do not think the noble Lord is quite right, because the 1974 Rent Act, which was one of the pieces of legislation which the Labour Party introduced comparatively recently, has amply born out all the criticisms made from this side of the House.

I have had a lot to do with the Rent Acts, and I have not yet found that the basic principles on which they were introduced have been proved to be wrong. This is a fact. Let me now give my side of the experience. Having listened to what happens when applications are made in various courts, and having represented people making these applications, I have come to the conclusion that from a humanitarian point of view the Rent Acts have proved of value.

I hesitate to interrupt the noble Lord once again. Why is it that at the present moment over 750,000 houses are empty in excess to requirements? Many of these houses could and would be let, and the same applies to rooms and other accommodation.

I am sorry to say that the people who keep them empty should be dealt with in a different way from the way in which they are being dealt with at present. Empty houses should be carefully considered and there should be ways and means of dealing with those who own them. It may be that the noble Lord does not think the same as I do—I am not surprised and I do not blame him; I merely say what I think. I speak from many years experience in that direction.

I have listened carefully to both sides. I am impressed by the fact that my noble friend who spoke this afternoon, who represents those who work in the industry, has categorically stated that he supports the Bill as it is. To my mind that is a very important point. In my opinion—and I believe this opinion to be generally held—the agricultural worker is a man who is devoted to his work and is not going to leave for fear that his leaving the employer will prevent the employer from getting another person. In fact, from what we have been told here, I am of the opinion that the average agricultural worker sticks to his employer for a very long time and it is only the exceptions who might be affected by an act of this description. In the judgment of a person who has a direct approach to the workers there appears to be an undoubted consensus of opinion among the workers in the industry. That means that the worker himself is not fearing anything in this Bill and the specific workers to whom this Amendment applies come within that category. Further, if you start breaking down the Bill and making exceptions there is going to be considerable misunderstanding and agitation by those who feel that they are being discriminated against.

Would the noble Lord give way? He is talking first of all about the Bill as designed solely for the workers. For obvious reasons I have enormous interest in my own workers and in agricultural workers. Surely we should be talking in the interests of agriculture as a whole, for the benefit of the whole community. Secondly, the noble Lord stated that this Bill should not discriminate. But it does discriminate. It discriminates against coalminers, against the Prime Minister, against all the other 95 per cent. of people who live in tied accommodation who will not be protected by the Bill.

With the greatest respect—and we do not frequently agree with each other—on this occasion I agree with the noble Earl. The fact that there is a difficulty and that the principle of the Bill is not being applied to other people, does not necessarily mean that it ought not to be applied to them and will not be applied to them. I am sure that the question of tied cottages in other directions will come under consideration in due course. But at present we are dealing with one aspect, and the argument that because you do not deal with other sides of it at the same time and so give an opportunity to those who oppose the Government to filibuster and to try to prevent them from getting legislation through, is not a very effective argument. If we were to take the whole gamut at the present moment, I am sure there would not be just one all-night sitting, there would be very many all-night sittings between now and the time the House rises.

Is the noble Lord suggesting that our consideration of this Bill is filibustering?

It will be filibustering if noble Lords continue to use the argument that because we are dealing with this matter, all other tied cottages should be considered before this one is put through. That is what I am saying and I believe the noble Lord is a fair man who will appreciate the point that I am making. The argument about the other industries that are concerned is something which has to be considered later on, and I am quite sure we shall have opportunities of discussing it.

With regard to this question, I say again that the spirit which we have been told prevails between the employer and the employed in this particular industry is of such a nature that I do not think for one moment the agricultural employers have anything to fear, except in a possible case where the employer has not treated the employee properly, or where at least the employee feels aggrieved, and there will be very few cases in that respect. I hope that the employers in the industry and those who have spoken already will weigh the facts and come to the conclusion that their Amendment ought not to be accepted, in view of what we have heard today.

May I make a brief intervention to draw attention to a case where the employee has not treated the cows properly? I came upon our second cowman kicking a cow. It was not possible to retain him; he was very rough with the cows. We did not know that when we took him on. We gave him time to find another house and finally he left of his own free will. He said, "I realise I am not appreciated here; I am criticised all the time". It is essential that cows should be treated gently, not only for the sake of the cow but for the sake of the farmer and for the sake of agriculture. In such a case surely it must be possible to recover the house in the proximity of the cowshed.

I have been trying to talk about the Amendment, but may I start by digressing a little and say that many times in the long reaches of the night, wakeful and thinking about life in general, I have reflected that it is a great thing to be born a Scot and to farm in Scotland; that the lesser breeds who live further South are nice people but I have been assured of my own superiority and good luck. That has been entirely reinforced by this Bill which does not apply to Scotland. The reason it does not apply to Scotland is that the Scottish farm workers' union does not want it and the Scottish farm workers, in my experience, are independent, upright and highly sensible people. I have an enormous respect for Lord Collison's experience, but in this case I believe that the Labour Party are infected by a sort of folk memory. They feel they must get rid of this evil, but they have not heard the good news that the Battle of Waterloo was won some time ago.

In talking about this Amendment, I should like to put the point of view of the farming ladder of the stockman who is on his way up. It is a very important one and it is important to the English because they appear to need a large number of Scotsmen to come down to be the best herdsmen in England. Your Lordships may laugh, but no one will contradict me. It has been a tremendous source of increased production in England. You will not get those men to come down any more because there will not be a house for them. It is a recognised pattern nowadays that a young stockman will start as an assistant in a big herd and, as the noble Earl says, the herds go up to 500 or 600 cows, competently managed. Once he has learned his trade he goes off to a job looking after 100 cows. That is not a big herd. A great many young men tackle them on their own, helped by their wives, and they make a great deal of money. They deserve it, and they learn a great deal more about the business from doing that. They then go on to become the managers of the big units which are becoming more and more important in the production of food in this country. It does not apply only to cows but also to pigs and to every other form of livestock. These people will now be totally held back. They will be kept to one farm or to farms near where they live. I assure noble Lords that in my part of Scotland stockmen move about more than other people simply as they ascend this ladder and because they want, in the main, to make more money than the other workers on the farm.

The problem of the tied house in the County of Angus, at any rate, has been largely solved because the county council has built a large number of houses for retired farm workers. That is the real problem of the tied house. It is not a matter of the wicked employer; it is the problem of a man retiring. I think the whole Bill is so silly that this Amendment—which is a fairly big one, I must say—stands out for that reason as a monument to good sense.

I should like to support this Amendment. My own experience began when I was a student. I well remember getting up at 5.30 in the morning, walking through the ice and snow on many occasions to do the mucking out, wash the udders, report on mastitis and all the other things that one had to do and was trained to do. Often in the morning one would find that cows had calved during the night. One was out of touch with that because one was living about a mile away in a small house and coming up two or three times a day when required for milking. Of course, all the calving, the bulling, and so on, was done by the herdsman who lived in the house next to the cowbyres, and he was up at any hour of the night, or when necessary, as calvings and so on took place.

This Amendment accepts the reality of the situation where you must have the herdsman on the spot all the time. It was mentioned by a noble Lord behind me that, with an urban-orientated view, there is still an idea that a farm is something like a factory; but in truth it is far from it. It is particularly necessary to cover the farms where no land is attached because there is less likely to be any other houses on that same holding. The noble Earl has mentioned the large numbers of stock which are on many of the units now, and these are ever increasing. There is an enormous capital outlay on the cattle, pigs or sheep which constitute these large herds. With chickens particularly one has phenomenal numbers, and things can go wrong extremely quickly. There can be a temperature fault; a heating thermostat can go wrong and, in a short time, there is trouble. The feed can go wrong; you may have an outbreak of disease. This has to be dealt with immediately. You may have escaped stock, break-ins, fire, and so on, and it is necessary in many of these outfits to have somebody living very close.

Many stockmen are naturalists in their own way and take great interest in the surroundings as well as in the farm. I remember a shepherd who took a great hand in killing foxes et cetera, and without his help the lambs would have not survived. There is perhaps a suspicion that many farm workers are always coming and going and causing trouble. This is totally wrong. There is very little problem in my experience. Ninety per cent. of the workers are extremely hard working and efficient, and the last thing one wants to do is to get them to leave. On the other hand, you undoubtedly get the bloody-minded chap. This is where the problem lies. That type of person comes in and is no good at work, or he comes to the farm merely for the house and causes trouble. He does not deserve a great amount of sympathy.

It has been mentioned that with no house it is extremely difficult to get new workers, particularly good workers. I am glad that we heard the point from the Scotsman about the efficient Scotsmen who leave houses and come down to take the jobs. I know of many people in my part of the world who have given up stock, given up dairy cows because of lack of labour and houses. We have had this problem in the past. The noble Lord, Lord Janner, mentioned that restrictions should be drawn ever tighter round those farms or the people who have houses which are kept empty because of the tightness of the laws. He felt that there should be still tighter legislation. The tighter you draw legislation, the more effort people put into avoiding it.

I should like to finish with the story of the sun and wind. The wind challenged the sun to take the overcoat off a person in a field. The wind tried first: he blew and blew. The harder he blew, the more the man clutched his overcoat. When the wind failed the sun said that he would try. The wind said he wanted to try one more puff. He still could not do it. So the sun came out and the man took off his overcoat.

4.5 p.m.

It may be useful if I intervene, not to shut out anybody, but I am certain that because of the importance of this clause it is right that we should have a wide-ranging debate. I think it will follow the pattern of a similar debate in another place. No doubt noble Lords have read carefully what another place did and said on the matter we are debating today. I should like to thank the noble Lord for the way he moved his Amendment. I agree with many things he said. I believe that noble Lords opposite wish to see this Bill work if it is passed. I hope it will be passed. Inevitably, there will be a major job to do. I accept this. There will be responsibilities not only on farmers but on the new committees and in the housing authorities.

I accept the spirit in which the noble Lord made criticisms and also moved his Amendment. I believe that he is anxious to do his best for all sections of the farming community. He said that there is no disagreement on the "humanity side", to use his phrase. I accept that. Many of the happenings we used to see in the countryside in another period are not frequent now although there are still isolated cases which can be avoided. Generally speaking, there are good relations between farmer and farm worker. That is my experience. I have travelled around addressing farmers' meetings in different parts of the country. I have visited various sections, and I have always had good relations with the Country Landowners' Association. There is a general desire to have a proper system which works effectively for all. This is what we are trying to do. I do not believe that this is a Bill which will weaken that relationship, despite some of the fears.

I know that they have been mentioned by the noble Earl, Earl Ferrers. He believes in the importance of having a good farmer and a good farm landlord relationship. That is why he feels that we should think in terms of the interests of a vital part of the agricultural industry. Here I do not dissent. I noted what he said about how important it is that we should have stockmen on the farm or near the farm. I do not think this Bill will hinder that when it becomes an Act. He talked about the importance of the industry and about small herds, the farm with a herd of 10 or 15 cattle, the 30 herd, 120 herd and 250 herd farm. He went on to describe the trends in the pig industry. I agree that we now have large pig units and it is the same in the poultry industry which is highly efficient. It was never in the Price Review and I never had to negotiate prices in that section. I did not get into trouble—as occasionally happened with others—when they thought they were not treated rightly.

We have seen a growth of a great agribusiness in this field. It has been stressed by the noble Lord, Lord Gisborough, and the noble Earl, Lord Onslow, who know their industry and who are farmers and landlords, that we are dealing with large enterprises where a considerable amount of capital is involved. No one wants these to be damaged in any way by the alteration of any manpower arrangements. It is true that you have to have people to be on the farm and be available 24 hours a day. I accept that you need good stockmen. I will deal with the stockmen from Scotland a little later.

I do not believe that this Bill will destroy confidence in any way. We have one of the best dairy industries in Europe. It was my privilege to negotiate in Europe in the last Price Review and I dealt specifically with an award for the dairy industry. I know the difficulties that they have had with the weather and other things. There was a period of retrenchment. I know the difficulties of the high costs and the effects on seed prices. Nevertheless, we have a most efficient industry which also produces a large supply of our beef, and some people forget that. Therefore we as a Government do not want to harm that.

There is a danger that noble Lords can think in terms of the past and have the old arguments raised. We have to look differently. The arrangements in the Bill are modest. To the noble Lord, Lord Swaythling, I must say that in another place—I must not quote—a distinguished farmer, a member of the Liberal Party, declared his desire to support this Bill. He thought that we were not abolishing the tied system as it exists in this country but rather we were going to improve the landlord farmer and farm worker relationships. I believe that this will be done. I believe that it will be a boost to the morale of workers and farmers. I could quote—but I would be making a Second Reading speech, and must not be tempted to do that—from other responsible sources. I could quote from the Farmer and Stockbreeder which talked about this Bill providing something which can work, if we will it. So I hope that noble Lords will not be too pessimistic.

Of course, they must speak from their own experience of the farming industry and they are right to do so. I make no complaint of the fact that on the Benches opposite we usually find more farmers or landlords than on my side. But that does not mean to say that they have an argu- ment, because it is rather strange that my Party generally has some very good records in agriculture. I think of my noble friend Lord Addison with his Marketing Acts, and of a great Minister to whom I was Parliamentary Private Secretary who brought in the 1947 Act. I see many noble Lords in this House who served with distinction on many of the committees, and who sought to improve the 1947 Act.

Most of the legislation which affected our agriculture is still there, and it is a tribute to the all-Party approach in that section. So I do not believe that the fabric of this industry which we have created, and which will have to challenge because of our entry into Europe, will be harmed by the arrangements which we have put forward in this Bill. As I have said, many people in all Parties believe that this is reasonable, and I think my noble friend Lord Collison was right to say that we should not exaggerate. Let us remove friction and bad feeling, but let us not exaggerate. He knows the industry, too, and he said that there will be no breakdown.

The noble Earl, Lord Kimberley, argued that we need first-class stockmen, which was again raised by the noble Earl, Lord Onslow. I do not regard him as a bore, if he wants to say that he feels self-conscious about what people think he is. From talking to him when he came to see me when I was a Minister, I know that he was anxious to consider policies in the interests not just of his own holdings but of agriculture generally, and I think he was right to stress his worries. He talked about the Labour Party being an urban Party, and so we may be. But many farm workers are in my Party, although some may be Liberals or Tories. However, that is not the issue. The issue is whether this Bill will work or frustrate. Can we work out something practical? Will these new committees—I do not like the names, because we generally use initials—work? Will they serve the interests of the rural community? Will the farmer and the farm worker feel at different times that they are getting a square deal? Will their interests be protected? I think that they will and given good will, based on what we have seen in other sections of the industry—for example, the agricultural workers' committees—I believe that common sense will be applied here and no section should suffer.

I shall not get involved in arguments about the Green Pound. Such matters will have to be settled, but not today when we arc dealing with this important Bill. I would say only this to the noble Lord, Lord Moyne. Of course, we do not want cows to be treated badly—no one does—but this Bill will not stop good husbandry. Farm workers who are employed in these great enterprises will not harm them, and I believe that, when a worker is required on the spot, the committees which we set up will recommend in the interests of agriculture that a farm must have these personnel. So I do not think that we should be too pessimistic.

The noble Lord, Lord Mackie, who quite rightly, spoke so lovingly about his Scotland, knows that many good Scottish farm workers were driven away, not only to England, because of certain acts which I shall not go into. But they drove them to Australia, New Zealand and all over the world and that was very good for world farming. If one goes to the Argentine, as I have done, and sees the great shows, one meets Scottish stockmen and I pay tribute to them. But this Bill will not apply in Scotland. The noble Lord may argue that that is because of the good sense of the Scottish farmworkers' union. It may be, but I do not know. I was responsible as Minister of Agriculture, but I am still in the Government and I should like to think that I try to protect the interests of the farming community and do all I can. So I say to him, as a friend of Scotland and a Border Englishman, that I do not think he should worry too much. He is all right, as he said, but let me argue the English argument and the Welsh argument. After all, the spokesman for the Liberal Party was a Welshman, and a famous Welsh farmer. The Welsh were driven out, and there are some good Welsh farmers in England as well. So I would rather take his view than that of the noble Lord who sits in this House.

If the noble Lord will permit me, I would take him up slightly on the argument which he appeared to use that Scotsmen were driven to England, the Argentine and all over the world by the tied house system and repressive measures—

Perhaps the noble Lord left that impression. He knows that it was the terrible depression in agriculture, and the miserable wages which were all that could be paid, not only in Scotland but in England as well, which drove people off the land in such large numbers.

The noble Lord knows his history, I hope, and I did not mean that at all. Anyhow, I must not go into too much detail. What we are doing here is considering this clause and the Amendments and very quickly I come to them. There is a definition of "agriculture" in the Bill, which is intended to cover the whole agriculture industry as it is generally recognised, and I do not think it would be right to mutilate this clause. I am well aware that some argue that to provide security of tenure to workers in sectors of agriculture involving livestock and, in particular, to dairy stockmen would have a damaging effect on the industry, but I cannot accept that. However, I recognise that there are occasions when it is necessary to house workers on or close to a farm. That is why there are provisions in the Bill for farmers to make application for the rehousing of outgoing workers, in a way which enables housing authorities to take full account of the agricultural need and the urgency of the case.

As my honourable friend the Parliamentary Secretary said in another place, when a similar Amendment was being debated:
"We are presently discussing with both sides of the industry how best we can guide housing authorities and the advisory committees on the weight to be attached to the various elements of agricultural need."
There have been a lot of consultations on this matter, both before the Bill was published and now, between the major organisations representing the industry. Then, as my noble friend the Parliamentary Under-Secretary of State said on Second Reading:
"I would expect that those sectors where the welfare of animals is directly involved would merit high priority ratings on grounds of agricultural need and of urgency in the advice which local authorities will be receiving from agricultural dwelling-house advisory committees."

The noble Lord is admitting that what I hope will happen is a pious hope. We have evidence that certain sections of the trade union movement in Scotland think that this clause is a bad one. Has the noble Lord any evidence from the employer/farmer side, irrespective of Party, to show that they think differently?

4.19 p.m.

I mentioned the evidence of a distinguished farmer who represents a quite important body of feeling. I could also quote the Farmer and Stockbreeder, and papers of that kind, which have stated that they now feel that this is probably the first step to try to resolve something which is there, and which should have been resolved a long time ago. I know that some farmers take a different view and I am not denying that there may be some farm workers who take a different view, and there are also landlords who take a different view; but if good common sense prevails there should, if we carefully examine the Bill, be no worries. If the Scottish Farmers' Union do not want it, that is their business. All I know is that the National Union of Agricultural Workers have campaigned for years for it. I am not saying that that is a reason for bringing it in; on the other hand it is an attempt to try to do something which is sensible.

Another Amendment which has been moved, which seeks to exclude the use of land for grazing, meadow, or pasture land, would exclude both land which is used for the grazing and free running of livestock and land producing grass for subsequent drying or riling. The Amendment is not acceptable for the same reasons and considerations as apply to the proposed exclusion of dairy-farming and livestock keeping and breeding.

Noble Lords must know that these two Amendments would drive a coach and horses through the Bill. A very high proportion of stockmen are housed by their employers and their cottages account for about one-quarter of the total cottage stock occupied by whole-time workers. Obviously the rehousing needs of such an important group of people were very much in our minds when the Bill was being prepared.

In his Second Reading speech the noble Lord, Lord Swaythling, said something that was very important. He referred to disease risks from cattle breeding and I thought that he was going to raise the matter again today. I mention it because I think the noble Lord had a point about risks at Al units in circumstances where a worker leaves his job at the centre and takes up employment in, say, a slaughter-house. I accept that were such a situation to occur, the particular risk might well be higher than in the case of a normal livestock enterprise.

In addition to what I have already said about cases of this kind indicating a high priority in terms of agricultural need and urgency, may I point out that under Schedule 4, paragraph 9, to the Bill it should be possible for the statutory tenancy which could be drawn up on the termination of employment to contain clauses restricting access routes in such a way as to minimise any disease risks. I should like to remind the Committee that under the present system it can take up to six months to regain possession of a cottage. Therefore the problem already exists; it is not created by this Bill. As I have said, I hope that the Bill might lead to a generally more satisfactory solution where livestock are concerned.

In no way do the Government wish to turn back the clock regarding agricultural policy. Our main document Food from Our Own Resources describes the strategy, and we believe that our strategy is right. We do not wish in any way to harm the industry through bad arrangements between tenant and landlord farmer. If noble Lords look carefully at the matter they will appreciate that this is something which can work and that therefore it would be very wrong to mutilate Clause 1 by accepting the two Amendments which have been moved.

May I ask one non-emotive question which arises out of what the noble Lord has just said. I understood the noble Lord to say that the local authorities will provide what is necessary: they will provide the houses for the workers connected with stock breeding and so forth. Can the noble Lord say whether the Government will give any more money to local authorities to provide these houses? I mention this because my branch of the district councils association have said:

"It is feared that housing authorities will be left in the intolerable position of having accepted the validity of an application for re-housing in respect of the tenant of tied agricultural accommodation but will be unable to provide alternative accommodation because of the central Government's restrictions on expenditure".

In these two Amendments I am not dealing with that question; it will arise later in the Bill and I shall be delighted to reply to the point then. I think that I have said enough about the two Amendments.

May I declare a complete non-interest. I am not a farmer. It is true that I am the son of a farmer, but my father loathed animals and concentrated his attention on vegetables and fruit. Therefore I speak with not even a hereditary bias. However, I must confess to the noble Lord and to those of his Back-Bench colleagues who have supported him that I find it extremely difficult to share his optimism that no conceivable harm may result from the clause as it stands. I am not an expert in these matters, but I think that the burden of proof that the granting of security of tenure to people engaged in jobs which necessitate dwelling in the neighbourhood of those jobs lies with those who argue that no embarrassment may be caused. I am not a farmer but for most of my life I have been connected with education and certainly I can think of many educational employments where it is highly desirable that the person employed should be in close proximity by day, and sometimes by night, with the human stock for which he is responsible.

Would the noble Lord really argue that a blanket security of tenure in such cases would cause no embarrassment in education, or would he argue that machinery, which might be analogous to the machinery foreshadowed in the Bill, would remove all possible apprehensions? It is that insouciance with regard to the possibilities which surprises me. I remember that about two years ago we had a debate when the noble Baroness, Lady Young, and I, among others, warned the House that security of tenure being given in other housing connections, which I need not specify at this moment, would increase the shortage of accommodation among university students. With all due regard, I cannot help contrasting the attitude of the noble Lord the Leader of the House regarding this clause with the attitude of the noble Lord, Lord Shepherd, who in those days performed his functions, when he said that he thought that the restrictions we were considering then would slightly aggravate the shortage but that the moral arguments on the other side outweighed the inconvenience. The shortage has increased. I leave it to noble Lords to decide whether in that case or this the gain outweighs the disadvantages.

4.30 p.m.

Having listened to the noble Lord, Lord Robbins, I feel he has greatly strengthened the case for the Amendment moved on this side of the Committee. I must say that what divides our two sides of your Lordships' Committee is one basic issue which is quite fundamental, namely, over-legislation in a field which is very sensitive. I dilated at some length at Second Reading on the question of the necessity to legislate; I questioned this most strongly, and I laid part of my argument at that time on the evidence which the Government brought forward in favour of the Bill. I will not rehearse it once again, but I must say to the noble Lord, Lord Collison, and the noble Lord, Lord Janner, that of the agricultural workers in England and Wales who were questioned by the Arthur Rank Centre, who did a very full study, only 5·7 per cent. were in favour of the Bill. This is a very, very small percentage. I think there is an overwhelming need to recognise the desire among this group of workers for no change in this particular field. Therefore, I am resisting most strongly the blandishments of the noble Leader and of noble Lords opposite who have suggested to us that there is nothing to fear. I think there is an enormous amount to fear in this field, for agriculture as a whole and for the production of the industry.

I was particularly glad when the noble Lord, Lord Swaythling, referred to animal disease. I noticed in the noble Leader's reply that he was sympathetic to this point, and I should like to say a little more about it. There is a very real issue that we should look at in the field of the dairy industry, which we have not examined sufficiently. Once again I do not wish to repeat all I said on Second Reading, but I referred to the dangers in regard to this Bill when related to foot and mouth disease. I suggested to Her Majesty's Government that it might be suitable to blow the dust from the cover of the Northumberland Report and think again rather carefully.

I have in the interval since Second Reading thought about the subject again, especially where it relates to the situation where a farm is infected. Only nine years ago we all too frequently, when passing a farm gate, saw an enormous notice in red letters saying "Infected place", and listing a great many columns of points concerning what should and should not he done. In this respect one of the especially sensitive problems was access to and from the farm. When a farm is infected, or, to put it the other way round, in order to protect an uninfected farm—and it does not matter whether I am referring to foot and mouth disease; I could equally well, in the poultry field, be referring to Newcastle disease—it is most strongly in the interest of the farmer concerned to have his stock-keepers housed, if possible, within the radius of the farm or within a very short distance, so that those infected do not come in touch with other people.

My second point is this. Over and over again, after an infection has taken place—and, once again, I do not specifically restrict my argument to foot and mouth disease—there is a report published by the chief veterinary officer of the Ministry of Agriculture. After the infection in 1967/68 the chief veterinary officer, having identified where this particular outbreak took place, made a number of recommendations. I think it is up to the Government to think very seriously indeed on this particular field, because our stock in this country is so subject to the possibility of infection from outside. We must support the work of the agricultural research centres throughout the United Kingdom who are working day and night to ensure that livestock is protected from disease.

One of the problems which divides and involves every one of us in the United Kingdom is consumption. It divides us in this respect, that only 3 per cent. of the population are concerned with production and 100 per cent. are concerned with consumption. It is perfectly true to say that outside the United Kingdom the issue of tied cottages is not a very great one, for that reason. I suggest to your Lordships that that might be true. A far higher percentage of the population in many countries is involved in agriculture, understands agriculture, recognises the important part it plays in the life of the country. In a highly industrialised society it is easy—and I make no complaint about this whatsoever—for those who live in urban areas to think that the agricultural produce will come anyway.

I was very glad that my noble friend Lord Ferrers referred to the disincentive effect so far as this Bill is concerned. He stressed that there is a risk that farmers, who are in any case working under very considerable pressure to overcome the bureaucratic problems imposed upon them by this Government, would find themselves in a position of thinking, "Well, shall we pack it in? Shall we sell the herd? Are the returns such that in all conscience we should concentrate on something else?" Should this opinion, and it is an opinion which could very easily be held by a large number of farmers, become generally acceptable, there will be taking place the exact opposite to what the Government intend.

The Minister referred to Cmd Paper No. 6020, Food from Our Own Resources, and I was particularly glad he did so. My noble friend Lord Onslow gave us figures, which I think he must have drawn from Annexes 3 and 5 of that Paper, in regard to production. I think it would be true to say that in regard to self-sufficiency in milk products—drawing again on these two Annexes, between 57 and 60 per cent.—the White Paper stressed the opportunities there were for expansion of grassland and of cattle and sheep and stock herds. If the Government expect their wishes to be fulfilled, they must consider the situation again in regard to the stockmen.

Wild exaggerations have been suggested by noble Lords opposite. Lord Collison said that he felt that there was no breakdown likely. I would never suggest that the noble Lord was attempting to mislead your Lordships, but I beg to disagree with him on this. He said from his knowledge, and, no doubt, in full sincerity, that he felt that it would not damage the industry, and here we are in head-on collision on this issue. Only two noble Lords opposite have supported the Government's case, and I would say that there are grounds for reconsideration. I have said quite enough in regard to the situation generally. I do commend the Amendments to your Lordships.

Before the noble Lord sits down, may I just seek to correct one point that was made. Where this 5·7 per cent. figure comes from, I do not know—I have not seen the Report myself—but I can assure noble Lords that the vast majority of farm workers in the National Union of Agricultural and Allied Workers wish to see the tied cottage dealt with—not abolished in the sense that you knock them all down, and I am referring back to the fears which have been expressed. It is accepted that 50 per cent. of agricultural workers are members of the Agricultural Workers' Union, and at every conference or branch meeting you find a unanimous dislike of the tied cottage system. Despite what has been said about my views regarding the damage to the industry, I must in all honesty reaffirm what I said before: I do not believe, and I am sure that events will prove me right, that the grim pictures of what may happen are going to become fact. Already we have this problem of the tied cottage, of work people going to court or being taken to court, of six months elapsing; and there has been no breakdown. I would remind noble Lords that this procedure can very well speed up the settlement of difficulties of that kind.

I really got to my feet to correct this idea about the number of farm workers who dislike the tied cottage. I assure noble Lords that the union is right. Through its contact with workers at branch level, county level and national level, it has found that the tied cottage is entirely disliked by people who know what it is, who understand it or who have seen what happens when an eviction takes place. I know I am not doubted in terms of what I believe, but I must reiterate again, in all honesty, in all conscience, that I am quite satisfied that this Bill will improve the situation and will not damage the industry in any way. On the contrary, it will do much to improve relations between the farmers and the farm workers.

4.41 p.m.

Before the noble Earl either withdraws or presses his Amendment, there is a question I should like to ask the noble Lord, Lord Peart, arising out of his remarks. He said that now in certain circumstances it could take six months—and I am absolutely certain that he is right in this matter—to get vacant possession of a house. He also said, and I am absolutely sure that he is right but perhaps he was just being optimistic, that he hoped that the ADHACs and the county councils would react sympathetically. I am speaking perhaps for myself, but I am pretty certain that if we could get written into this Bill an absolute liability on county councils to rehouse people after three months, so that there would be no question of going to court or anything, this could be a great improvement. I noticed my noble friend Lady Young looking horrified at that aspect. I am sure that she sees the point, as we all do, that it is going to cost a lot of money and so it is difficult. But I am speaking solely in the interest of agriculture.

I apologise for intervening, as I have just come from a funeral and am just going to a yeomanry regiment, but may I follow up that last point? Many of us, however small our acreage, would be prepared to give up, I believe, half, one-and-a-half or two acres to house our retired farm workers. The essential thing is that our stockmen must live near their herds or flocks, or pigs. But the land we would give. I would give it to Mr. Bottini of the National Union of Agricultural Workers if I could be guaranteed that my stockman's cottage would remain a stockman's cottage. Would that help?

May I just confirm to the noble Lord, Lord Collison, who asked me where the figure 5·7 per cent. came from, that that is the figure of those agricultural workers said to be in favour of the Bill. I told your Lordships on Second Reading, and repeated it today, that it was a figure produced by the Arthur Rank Centre who qualified a professional report on the subject, and this figure was the one which has been published. When speaking on Second Reading I asked the noble Baroness whether she would like to offer your Lordships another figure, but as no figure was produced I assume that this is an accepted one.

We have certainly had an interesting debate on this subject and I am grateful to those who have taken part, and in that I would include the noble Lord, Lord Collison, whose views are always respected because he has been so involved with the National Union of Agricultural Workers and has been a distinguished General Secretary of it. We are grateful to him for saying what he has said. I am bound to say that we find this a considerable difficulty. The noble Lord, Lord Collison, said that he was quite convinced that this provision will improve the industry and eliminate bitterness. While accepting that those are his views, I beg leave to doubt it. My fear is that it might do just the reverse. It could well be that it will increase the bitterness where farm workers find themselves becoming statutory tenants in houses built for purposes for which they no longer intend to use them.

While the noble Lord, Lord Collison, quite reasonably says that the agricultural workers' union is, and has been, very keen on this Bill, and at every conference they have had this call for the abolition of the tied cottage, a fact which I absolutely accept, I am not sure that he will also accept that, as I think everyone knows, not necessarily every member of the National Union of Agricultural Workers agrees with that. Indeed, a great many people who are not members of that union but who are also farm workers do not share that view. While I accept that that is the official view of the union, I know that he will not expect me therefore to say that ipso facto that represents the view of 50 per cent. of those involved in agricultural work.

The noble Lord, Lord Janner, said that he thought that the fears that we have expressed are unfounded. The reason which he gave for expressing that view was that the Rent Acts had a number of expressions of fear mentioned about them, and those fears have been unfounded. I would how to Lord Janner's experience in this regard because I know he has been greatly involved with the legal aspects of those Acts. I would only ask him whether he really believes that, as a result of those Acts, rooms and houses to let are more numerous and are more easy to get, or does he think that rooms and houses to let have, as a result of those Acts, become more difficult to acquire?

What I believe is that tenants have been protected, and this involves not only hundreds of thousands but probably over one million people in the country. I think that the Acts themselves have proved to be an effective protection for tenants who otherwise would have been turned out. I should like to say one thing about the question raised by the noble Lord, Lord Sandys, for whose opinion I have a high respect, not in this particular direction but generally. The fact of the matter is that people who are keeping their houses empty are causing a considerable amount of damage to the housing situation for personal advancement, not only so far as dwelling-houses are concerned but, as he knows very well, so far as business premises and other premises are concerned. It is a serious matter that these people do not consider that. After all, today there is a Rent Act which provides a reasonable rent for a house. Those who are not prepared to charge a reasonable rent are doing a great disservice to the community.

4.49 p.m.

The noble Lord has been fair. He has said that in his view the Rent Acts have given considerable protection to millions of people. He is absolutely right. That of course is one of the reasons why buildings, houses and flats to rent are less easy to come by. It is why, for instance, it is so difficult to get rooms to rent in any university town, because once having got a room to rent if a student stays on a second term he is automatically given security of tenure. Therefore, landladies quite reasonably prefer to let them to Greeks and Japanese because at least they go home and there will be rooms available. While I accept that that has given security of tenure it has also frustrated the renting of accommodation, and that is what we fear will happen under the Bill. Certainly there will be security of tenure for tenants, but equally in the same way it will frustrate the ability to have houses or cottages to let for the purpose of agriculture.

Lord Peart agrees that we need good relations between farmers and farm-workers, and that is absolutely right. He agrees that the success of agriculture as a business is important; he agrees that we do not want to damage it and that we should not destroy confidence, but my fear is that we shall be doing just that. The noble Lord is an experienced Parliamentarian and he speaks with great charm and knowledge, but he did not answer any of the points I put to him. He did not say how a farmer would get over the problem of running his farming enterprise on finding that a house which he had made available to a stockman was being occupied by a stockman who, for one reason or another, had left his employment. He said that such a farmer would draw up a statutory tenancy. That is the whole point: he will do that and, by that statutory tenancy, that person will have a right to stay on in the house.

The noble Lord did not say how a farmer in that position was supposed to cope. I suppose we must assume that he will cope either by doing the work himself, which he will no doubt do for a limited period, or provide such other form of existence such as a caravan. What an extraordinary way to improve the condition of housing in rural areas! Are we to see a proliferation of caravans on farms as a result of this measure? The other possibility is that the farmer will eventually throw his hand in and say it is not worth a candle. The noble Lord did not address himself to that thought, but I hope he will do so. Nor did he address himself to the thought that not only will this cause difficulties for farmers running their businesses but that farmers and those involved in agriculture might well give up running livestock enterprises while others will be deterred from coming into them.

The noble Lord, Lord Peart, did not address his remarks—I do not blame him because I did not specifically push it today, although I mentioned it on Second Reading—to the fact that a great many farmers and landowners have provided and are providing accommodation for people who work for them. This is particularly the case in livestock businesses, where if one is to have a valuable unit producing a lot of milk, eggs or pigs one must provide housing accommodation. That is being done now, but I fear that it will stop because no individual will spend £12,000 on building a house only to find somebody else living in it and he can not or may not have recourse to it. Not only is this a deterrent from the point of view of encouraging people to provide houses for agriculture, it is also a restriction on the national housing problem in rural areas. Nevertheless, as a result of this measure we are bound to find a slowing down in the number of people prepared to make this sort of investment.

Is the noble Lord aware that in the area where I live nobody is allowed to build any more houses because it is a white area and is scheduled for agriculture? One is not allowed to build, and how we will provide the houses that are required is not apparent.

The noble Lord has problems in his area which are considerably greater than the problems which may apply in other areas, and I am glad that he has drawn attention to that point. The noble Lord, Lord Peart, referred, and rightly, to the fact that the Government stood by their White Paper Food From Our Own Resources in which they specifically state that they wish to encourage an increase and improvement in industrial production. I return to the point I made earlier, which is that the Government must give agriculture some encouragement. They have subjected the industry to one restriction after another; we have had the problems of the capital transfer tax, capital gains tax, development land tax and the Community Land Act, all of which in their own ways have imposed restrictions. We now have the Agriculture (Miscellaneous Provisions) Bill which also imposes restrictions, and here we have a Bill which will restrict agriculture yet further.

If the noble Lord wants agricultural production to increase, as I know he does—I know that his heart is in the right place—he must give it some encouragement. To do that is in the interest of the whole nation at the time when, goodness knows! food prices are rising to tremendous levels and when the pound is becoming more devalued and imports more expensive. Everybody recognises that increased agricultural output is required. Why, then, this further restriction? I accept that those who live in stockmen's cottages should be just as much the subject of protection as anybody else. That is a perfectly reasonable argument. However, in my modest judgment I feel that the balance is wrong because if we give that protection to those people we will cause such a restriction on the movement of agricultural workers and on the output of agriculture that, from the point of view of the national interest and the industry, it will work to the detriment of both.

I had hoped that the Government might have accepted the Amendment. In my view they should do so, but I realise they are up against difficulties which might make it awkward for them to accept it. I do not for a moment believe that Lord Peart wishes to see it said of his Government's Administration that they curtailed

CONTENTS

Aberdeen and Temair, M.Ferrier, L.Norfolk, D.
Alport, L.Fraser of Kilmorack, L.Northchurch, B.
Amherst, E.Gage, V.Northesk, E.
Amherst of Hackney, L.Gisborough, L.O'Hagan, L.
Amory, V.Gladwyn, L.Onslow, E.
Amulree, L.Glasgow, E.Orr-Ewing, L.
Armstrong, L.Glenkinglas, L.Porritt, L.
Ashbourne, L.Goschen, V.Radnor, E.
Atholl, D.Gray, L.Rathcreedan, L.
Auckland, L.Grey of Naunton, L.Redesdale, L.
Balerno, L.Grimston of Westbury, L.Reigate, L.
Banks, L.Hailsham of Saint Marylebone, L.Robbins, L.
Belstead, L.Robson of Kiddington, B.
Berkeley, B.Hankey, L.Rochdale, V.
Birdwood, L.Harcourt, V.Romney, E.
Blakenham, V.Harmar-Nicholls, L.Ruthven of Freeland, Ly.
Bourne, L.Hatherton, L.Sackville, L.
Bridgeman, V.Hives, L.St. Aldwyn, E.
Broughshane, L.Hornsby-Smith, B.St. Davids, V.
Burton, L.Howe, E.Salisbury, M.
Caccia, L.Hylton-Foster, B.Sandys, L.
Campbell of Croy, L.Ilchester, E.Savile, L.
Carr of Hadley, L.Jessel, L.Selkirk, E.
Carrington, L.Killearn, L.Sempill, Ly.
Chelwood, L.Kimberley, E.Sharples, B.
Clancarty, E.Kinloss, Ly.Shuttleworth, L.
Clifford of Chudleigh, L.Kinnaird, L.Somers, L.
Clitheroe, L.Lauderdale, E.Spens, L.
Clwyd, L.Lindsey and Abingdon, E.Stamp, L.
Congleton, L.Long, V.Strang, L.
Cornwallis, L.Lonsdale, E.Strathclyde, L.
Cottesloe, L.Mackie of Benshie, L.Strathcona and Mount Royal, L.
Craigton, L.Macleod of Borve, B.Strathspey, L.
Cullen of Ashbourne, L.McNair, L.Swansea, L.
Daventry, V.Macpherson of Drumochter, L.Swaythling, L.
Denham, L. [Teller.]Mancroft, L.Terrington, L.
Deramore, L.Marlborough, D.Teviot, L.
Derwent, L.Marley, L.Thorneycroft, L.
Drumalbyn, L.Mersey, V.Tranmire, L.
Dundonald, E.Middleton, L.Trefgarne, L.
Ebbisham, L.Monck, V.Tweedsmuir, L.
Eccles, V.Monckton of Brenchley, V.Vernon, L.
Effingham, E.Morris, L.Vickers, B.
Elles, B.Mottistone, L.Wakefield of Kendal, L.
Elliot of Harwood, B.Mowbray and Stourton, L. [Teller.]Ward of North Tyneside, B.
Emmet of Amberley, B.Ward of Witley, V.
Erskine of Rerrick, L.Moyne, L.Westbury, L.
Faithfull, B.Netherthorpe, L.Young, B.
Ferrers, E.Newall, L.

the output of agriculture, restricted the amount of livestock production and the amount of dairying. I do not say that that will result, but it is possible that it will and, if that were to happen, it would be bad for the Government—because their record would show that they produced such measures against agriculture that output was restricted—and it would be bad for the national interest. I hope that the Government will think again about this but, if they will not, then I am bound to ask the Committee to divide on the issue.

5 p.m.

On Question, Whether the said Amendment (No. 1) shall be agreed to?

Their Lordships divided: Contents, 144; Not-Contents, 64.

NOT-CONTENTS

Aylestone, L.Hughes, L.Ritchie-Calder, L.
Birk, B.Janner, L.Segal, L.
Blyton, L.Kirkhill, L.Shinwell, L.
Brimelow, L.Leatherland, L.Slater, L.
Brockway, L.Lee of Newton, L.Snow, L.
Burton of Coventry, B.Longford, E.Soper, L.
Castle, L.Lovell-Davis, L.Southwark, Bp.
Champion, L.Lyons of Brighton, L.Stedman, B.
Chorley, L.McCluskey, L.Stewart of Alvechurch, B.
Collison, L.Maelor, L.Stone, L.
Cooper of Stockton Heath, L.Melchett, L.Strabolgi, L.
Cudlipp, L.Morris of Borth-y-Gest, L.Taylor of Mansfield, L.
Darling of Hillsborough, L.Murray of Gravesend, L.Wall, L.
Davies of Leek, L.Oram, L. [Teller.]Wallace of Coslany, L.
Davies of Penrhys, L.Paget of Northampton, L.Wells-Pestell, L. [Teller.]
Delacourt-Smith of Alteryn, B.Pannell, L.White, B.
Douglass of Clevelend, L.Pargiter, L.Wigg, L.
Elwyn-Jones, L. (L. Chancellor.)Peart, L. (L. Privy Seal.)Wilson of High Wray, L.
Garner, L.Peddie, L.Winterbottom, L.
Gordon-Walker, L.Phillips, B.Wise, L.
Henderson, L.Pitt of Hampstead, L.
Houghton of Sowerby, L.Popplewell, L.

Resolved in the affirmative, and Amendment agreed to accordingly.

5.8 p.m.

moved Amendment No. 2:

Page 1, line 17, leave out ("grazing, meadow or pasture land or").

On Question, Amendment agreed to.

The noble Earl said: This Amendment goes with Amendments Nos. 4, 5, 7 and 11 and I think also with Amendments put down by my noble friend Lord Caithness. The Amendments in question are Nos. 75, 76, 77, 83 and 96. Whether he wishes to address his remarks specifically to those Amendments when they come up I do not know. Therefore, I shall move only the Amendments that are in my name, even though the others relate to the same point, which is the position of forestry. Forestry is included in the Bill, but I venture to suggest that there are peculiarities about it. The problem of forestry is somewhat different from that of agriculture. The first and obvious difference is that, on the whole, forestry takes place a long way from urban centres and operates in under-populated areas on the hills in Scotland and particularly in the North of England—areas which not only have many fewer opportunities of employment but also have fewer opportunities for housing.

The Government's Consultative Document said clearly that the problems of housing forestry workers had never been particularly onerous. Paragraph 19 of the Consultative Document, which referred to the application of forestry under the provisions of the tied cottage, said:

"Provision of tied accommodation for forestry workers has seldom given rise to the kind of problems or controversy found in agriculture."

The Government have included forestry in the Bill, but they have done three things. First, they have excluded forestry that takes place in Scotland; that is because the whole of Scotland is excluded from the Bill. They have also said that tied housing accommodation where it applies in forestry should not, for some mysterious reason, apply to those people who are engaged in forestry working for the Forestry Commission. So having restricted the number of people, reducing it to a very small number, the Government then say that they do not intend that the provisions of the Bill should apply to forestry anyhow at the beginning.

Clause 1(4)( b) says that Part II, which refers to forestry:

"postpones the operation of this Act in relation to certain persons employed in forestry …"

The conclusion is that the Government obviously have some reasons for excluding forestry. My guess, and I may be wrong, is that they have not enough statistical information as to what happens in forestry, as to what happens about those who are housed in tied cottages which relate to forestry. All the arguments they

have produced in the Consultative Document and elsewhere concede the fact that the problem in forestry is very much less than the problem in agriculture.

I wish to make this point to the noble Lord, Lord Peart. Forestry is, as indeed agriculture is, a very important industry. It takes place in relatively unpopulated areas. If the provisions of the Bill operate in forestry, what happens, for instance, in cases of foresters who live, say, on the top of the Yorkshire Moors or on the top of some isolated hills in the North of England? How will those involved in forestry be able to replace those forestry workers? There is no point in saying that the local authority will provide housing for them if that housing is to be 10 miles from where they work. I believe that this will produce very difficult problems for those engaged in forestry.

I should be the first to accept that the argument of fair and equal treatment for all people, as was put forward in the previous Amendment, is a perfectly reasonable argument. I do not propose at this juncture to say that if it is to be fair and reasonable treatment, that that should apply to every other form of tied cottage other than those in agriculture. The point I would make is that it is right that there should be fair and reasonable treatment, provided that all the other circumstances are the same. I believe that to make the provisions of the Bill operate in the most outlandish parts of the United Kingdom, right away from other alternative accommodation, will put a strain on the existing rural housing system which it will not be possible to accept.

As the Government have specifically excluded those people who work in forestry in Scotland and have specifically excluded those who work in the Forestry Commission, and as the Government have specifically said that they do not want this to come into operation yet, anyway—presumably because they are not quite certain that they think it is right—I hope that they will accept our little Amendment and the series of Amendments which will exclude the provisions of the Bill from forestry. I beg to move.

I have a very great respect for the views of the noble Earl who has just spoken and for the courteous manner in which he always puts his case. I am a little puzzled here. If his argument is that this forest occupation is one which is very far from places which afford employment of another kind, what is he worrying about—

With the greatest respect, I should say that a person who is offered other employment would not want to remain far from the employment to which he is going. The only circumstances of which I can conceive of people wanting to remain in a remote place might be if the then tenant died and his successor—a widow or whoever it may be—could not find any other place to go. I should not imagine that even they would want to remain in a place which was so remote from general life or that they would want to insist upon retaining accommodation in those premises.

I think the point which the noble Earl is making, the point to which he referred, is that if one starts making exceptions difficulties can arise and must needs arise, because the situation can be utilised to create further exceptions. Frankly, I do not see how a person occupied in the forestry industry, or the industry itself, will suffer in the slightest. I cannot quite see how very many people would want to remain in a place in which they were no longer working.

5.17 p.m.

The noble Lord, Lord Janner, says that if one starts making exceptions difficulties arise. The whole point about this Amendment is that the exception has been made by the Government, and quite rightly, because the forestry tied cottage is an entirely different species from the agricultural tied cottage, just as the Government no doubt maintain that there is a difference between the agricultural tied cottage, the clerical tied cottage, and the mining tied cottage. We were talking in the last Amendment—

I must ask the noble Lord to wait a minute. He has had a good deal of the debate this afternoon and I will give him time, but he must not interrupt in the middle of a sentence, which is never a very good thing in either House. We were talking in the last Amendment about the need for tied cottages for a worker; that is, to have a worker nearby to be available for the humane treatment of animals. The reason for the tied cottage in forestry is to have someone on the spot to prevent fires breaking out.

Most of the Forestry Commission area in North Yorkshire has this summer been in peril from fire and the Commission has lost 60 to 80 acres of woodland because there were not people on the spot to put out the fires. If there is a delay of three months between one worker going and another coming in, and that delay occurs in the summer months, then, as the Government have rightly seen, that would be very difficult to apply in forestry. Therefore, I commend the Government for having excepted forestry in the Bill, but I suggest that the right way would be for them to take it right out now and, if necessary, bring in a separate Bill later to deal with the problem of forestry tied cottages. It is the worst way of legislating that one tries to bring in the forestry worker and then say, "We will not bring it in until the Minister makes up his mind about it, and then he will do it through a Statutory Instrument".

I would beg the Government to think again on this and to accept these Amendments, and then later, if they will, to bring it in by separate legislation. As I see it, this Bill really is the "week-ender" Bill. I know that in the general area of the North of England in the last 50 years the reduction in the number of cottages for agriculture has been worrying to everybody. What has happened is that cottages that were agricultural workers' cottages, tied or untied, are being sold to become cottages of week-enders from the towns and are being lost to agriculture. That is the danger of the Bill, particularly in the forestry areas. Directly a threat arises to the forestry tied cottage, then the owner of that cottage, whether it is the Forestry Commission or the private owner, will be inclined to put it up for sale as a weed-end cottage—and he can get something like twice the agricultural value of the cottage from a week-ender. I am afraid that this Bill is the week-end cottagers' charter.

Before the noble Lord sits down, I merely intervene in order to tell him that he had not listened, possibly, to the arguments that were put forward with regard to the other tied cottages. No one has suggested for one moment that the other tied cottages have not to he dealt with at some time or other. The only reason why one cannot deal with them all, as I tried to explain before, is because there is a lack of time and we have to deal with these matters in whatever manner is available in order to get on with some kind of legislation.

5.22 p.m.

I must declare an interest as an owner of forests and of agricultural service occupancies. There is at least a logical basis for legislating for farmworkers as distinct from forestry workers. There have been bad farm employers who have sacked a man at short notice and turned him out of his house. The cases have been few, but they are fully recorded. I can easily understand the motivation behind the long, persistent and historic campaign by the National Union of Agricultural Workers on behalf of farmworkers. However, as regards forestry workers, as my noble friend Lord Ferrers has said, the Government are quite in the dark about their problems, if there are any. Indeed, they have set up an inquiry, a study, to get more information about this subject.

So far, the only reasons given during the passage of the Bill for including forestry as it is in the definition of "agriculture" in Clause I have been the following. First, that the definition of "agriculture" in existing tied-cottage legislation derives from the Agricultural Wages Act of 1948, where the use of land as woodland is mentioned and the production of consumable produce. But the Consultative Document, to which the noble Earl referred several times this afternoon, is very wary about this definition, which it says guardedly "might be taken to embrace much of forestry". In other legislation, for instance the Agricultural Holdings Act of 1948 and the Town and Country Planning Act of 1947, "agriculture" does not take in forestry. So if it is a matter of definition I think this is a shaky argument.

Secondly, another argument that was heard in another place—I think it was the Parliamentary Secretary of State who said it in Committee—was that forestry is akin to agriculture. Well, I do not think this is a very convincing reason. One might just as well say that forestry is akin to coal mining, because the one deals with fresh timber and the other with fossilised timber. I do not think this is at all convincing.

Thirdly, it was suggested that the pay and conditions of many forestry workers are subject to the Agricultural Wages Act. I think I am right in saying that it is extremely difficult to get figures—in fact it is impossible—but the majority of forestry workers are employed by the Forestry Commission and, as your Lordships know, their wages and conditions are assessed quite differently and are not subject to the Agricultural Wages Board. It is therefore not surprising that the Government have decided that the provisions of this Bill, while embracing forestry workers, will not be implemented so far as woodmen are concerned, until a future date.

I fully agree with my noble friend Lord Ferrers that forestry should be struck out altogether, not merely because there have not been produced any convincing arguments so far for its inclusion, but because the fewer the categories of displaced persons who have to he rehoused by local authorities in a situation of acute housing shortage, the more chance there is that the local authorities can perform their existing duties, to which are to be added the duties under this Bill in respect of farm workers.

I rise to support my noble friend Lord Ferrers on this very important Amendment. In doing so, I talk to all the Amendments with regard to forestry, as I believe it would be beneficial to the forestry industry. I do not believe it is right to legislate against an industry without its support or until a proper inquiry and resulting discussion have proved its need. There is no support for this measure in private forestry, and the Government have failed to produce any arguments to show that forestry employees have been harshly treated by the tied cottage system. There has been no report on this matter, and I understand that one is not due to be published until early next year.

Was it not only last night that the noble Lord, Lord Jacques, arguing against an Amendment, said that there should be no change in the established machinery within a business until there was a good reason for that change? No good reason has been proved in this case. If the Government have the grace to admit that no action will be taken to include fish farming until a report is considered, why has forestry been included? If the need for legislation is proved it can easily be included by an Affirmative Resolution.

Another reason for supporting this Amendment is that private forestry, as my noble friends have said, has in general to compete with the Forestry Commission with regard to wages, houses and conditions. There is no comparable situation in agriculture, and I believe it is right, therefore, that both private forestry and the Forestry Commission with its 1,500 tied cottages should be treated in the same way. The need for housing in the key positions is particularly important, so that the forester can supervise the woods and the estate sawmill and yards in much the same way as the shepherd or cattleman manages his livestock. There are areas of woodland which are isolated and this, allied to the cost of travelling, makes housing in the right situation so important. This at the moment can best be achieved by tied cottages.

More recently, the question of easy management of woods has become more important with the continued opening up of the countryside to the public. Woods can easily conceal people and any damage in the way of pollution to streams, theft and, as has been mentioned, fire, committed wittingly or unknowingly, must be discovered at the earliest possible moment. From my experience I am convinced that tied housing played an important role in reducing the risks of damage such as occurred in the recent drought. Your Lordships will recall a debate on forestry held recently in this Chamber, when we heard of the depressing situation that existed (and it still exists) in the industry. So that the problems may not be increased, I support this Amendment, which I believe to be for the benefit of that industry.

5.29 p.m.

I, too, must declare an interest, in that I am a forest owner and also an owner of so-called tied cottages. I will keep your Lordships but one short moment. It occurs to me that, talking of fire and the importance of having forest workers, so to speak, on the place, we have left out one of the most vital reasons why they must be there. I say "vital" because, though it may not happen that often, it encompasses injury and sometimes even death. When we talk of forest workers and forestry we are rather apt to think of the great big woods, and so on and so forth; but of course timber grows in our hedgerows.

We are a country which is absolutely interlaced by roads and rights of way of at least three sorts. Gales, as some of your Lordships will be aware, occur and trees, however carefully you look after them, sometimes rot underground and then fall across roads. If you are an unlucky passer-by they can fall on top of you. That is unfortunate and seldom happens; but there are a lot of accidents and the matter should not be treated too lightly. Where trees are left for too long somebody may come along in their car or moped on a dark and stormy night and be seriously injured or sometimes worse. I can assure your Lordships that I do not know whose responsibility it is. I suppose the councils could be asked to take the trees away, but it is more likely to he the owner's responsibility. Speed is of the essence. The sooner that tree is cleared away, the less is there a likelihood of injury, or even death. Although this does not happen often I think your Lordships should be aware that it does happen. It is one reason for keeping at least some tied cottages for foresters, so that they can be out and about on these dark and stormy nights and in those situations.

The Consultative Document said that the provision of tied accommodation for forestry workers has seldom given rise to the kind of problems found in agriculture. Before leaving that point, I should like to say that the NUAW in a public statement said that there were no fewer than 20 evictions every year out of 70,000 tied cottages; which means that for every three and a half thousand people, one will be evicted on present trends. The danger is that one cannot see the necessity in forestry, apart from the danger of fire—and I know this, for I had a forest burnt down in, this last drought—for having a man on the spot night and day. Obviously, apart from risks of fire and trespass, there is not the same need as with cattle. While there is a need to guard against fire and damage of that nature, it might appear to the courts that the need was not there and therefore did not justify that a house should be made empty for a new forestry worker. They may well, therefore, in many areas feel that it was adequate for workers to drive into work on forestry. But the need is there and particularly in the country areas where there is large forestry and few houses of other sorts are available for other labour.

The same argument goes as for agriculture, that you are not going to get good forestry labour without houses. Good labour of any sort is always difficult to find. One sees trees and thinks that they are not doing much, just growing, and that if one leaves them long enough they will get big enough to sell. That is far from the truth. It takes a long time for damage to become apparent. A great deal of work has to be done on trees and forests all the time. Pruning, fire precautions, thinning and all sorts of processes take place. It is essential that there should be good staff available if the trees are to be of any value at the end of the time—and one is talking in terms of 60 to 100 years. An interesting point is that near my own home the Forestry Commission have a large acreage and they have not got an adequate number of houses. The result is that they cannot get the work done and they have this large forest which is going bad on them and will be virtually useless as a result. The damage to the country will take a long time to make itself apparent. My own experience of these forest workers is that few of them want this protection under this Bill. I support the Amendment that forestry should he removed from it.

Although I support the Amendment, I had not intended to speak, but having heard the noble Lord, Lord Janner, on this Amendment, as on the first one, I feel that there is some misunderstanding on the Benches opposite of the true position. He said that he could not follow why a man should want to stay in a remote area. The position is that a good man who is a hard worker has no difficulty under the present set-up in finding a good situation with a good house. But such men are scarce. It is difficult to get good men, as my noble friend, Lord Gisborough, has just said. It is therefore important that you should have houses for them. The bad man may well sit on in the house, even if it is in a remote area. The problem which may arise, although I do not think it arises extensively over tied houses, almost invariably arises where there are bad employees and where a man has to be got rid of.

The good man has no problem. He can easily find a job and, anyway, one does not want to get rid of him. The bad man can sit on, and if he has a large family he will be able to draw a great deal more as an unemployed person, sitting in a house for which he is paying no rent and causing a problem. You may have some sympathy with this individual but he could be causing a backlog. I have had a case where no fewer than three other good employees were held up and could not get into the house because a bad man sat on and would not get out. The noble Earl, Lord Radnor, knows this only too well, for one of them was to come from him. As it was, he could not get his new man in, and so it went on and three people were held up.

I think I should respond now to noble Lords' speeches on these Amendments. May I say, first, that in the Consultative Document we noted that existing tied cottage legislation will apply to many forestry workers and that pay and conditions for many forestry workers are subject to the Agricultural Wages Act. It was clear when we came to frame our proposals that the links between forestry and the remainder of agriculture were such that forestry should be included in the Bill; although there was a need to improve the information available on the situation in forestry. A survey is presently being conducted by the Tavistock Institute on behalf of the Forestry Commission to provide this information. When this is to hand we shall be able to determine the appropriate appointed day for forestry. I referred to this in my Second Reading speech (at column 1093 of Hansard (Vol. 374)). I then explained why. When the results are available, we shall be able better to decide on an appropriate implementation date for forestry workers. I should add that when the legislation for forestry is brought into effect we shall expect the Forestry Commission who, as noble Lords are aware, are the largest woodland owners in the country, to treat their tied cottage occupants exactly as private forestry landlords will be required to treat them. Although the Forestry Commission is exempted from any statutory obligation under the Bill, there will be no question of discrimination in practice between one and the other.

I have noted carefully what noble Lords have said and may I say again to the noble Earl, Lord Ferrers, who said that the problem may be less than in agriculture but that forestry is an important industry, that I accept that point. I was a Forestry Minister. I have a house in Lakeland surrounded by forests owned by the Forestry Commission and I have always taken a great interest in this. I think it is a great industry. On several occasions I have had to deal with this industry and I have tried to avoid any rivalry between forestry and agriculture. There used to be great controversies over whether we should have sheep or trees in the hills. I think it is right to consider always proper development and a combination of both. I have argued this in the Council of Ministers in Brussels. I recognise, we on this side recognise and the Government recognise the importance of forestry. There is no question about it.

I have the impression sometimes that people always think of the forestry worker as living in isolated conditions apart from his fellow man. It is not entirely true in the area I used to represent in the House of Commons, the Lakeland area of Cumberland. Along the shores of many of our lakes we have wonderful forests and many of the forestry workers are housed there. There are occasions when we have this remoteness argument. The noble Lords, Lord Gisborough, Lord Tranmire and others mentioned this. This was also emphasised particularly by the noble Earl, Lord Caithness, who has his name down to some of the Amendments.

There are problems of care and maintenance. The noble Lord, Lord Gisborough, was quite right when he mentioned our experience in the drought when he was in the Forest of Dean and saw the terrible fires that broke out. There is always a risk, particularly in an area like the Lakeland where there is a great tourist industry and people can be careless. You need good forestry workers. Apart from the general looking after of silviculture you need vigilant people always around. It is not quite the same as a dairy farm which we were talking about on a previous Amendment. I am sure noble Lords will recognise that we are right to ask them not to press their Amendments and I hope they will accept that we mean to protect the industry in the best sense. After we have heard the advice given to us in the survey we shall know better what the position is. I think we are right to do this so I hope noble Lords will withdraw their Amendment.

May I ask a question about dates? We welcomed the Consultative Document which came out last year. The massive public expenditure cuts announced by the Chancellor of the Exchequer in May are going to put a greater strain on housing, and by cutting out forestry workers that strain could be reduced. Surely noble Lords would agree that events subsequent to the decision made to include forestry workers would perhaps make necessary a change of mind on this.

I referred to the Forestry Commission survey which is now under way, and when the results have been analysed, I would hazard a guess in the Spring of next year, it will be possible to determine an appropriate appointed day for forestry. I cannot go beyond that.

Could the Minister inform the House what will happen if the Tavistock Report shows that legislation in this field is not needed?

I would rather wait to see what happens. Obviously if the facts went against my argument I would not be such a fool as to say that I would defy facts. We must look at the survey and apply the same arguments to noble Lords opposite.

Would it be better to delete forestry, as we have not included fish farming, until the report is before us?

No, I do not think so. That is why I am asking noble Lords to withdraw the Amendment.

5.45 p.m.

I should like to ask the noble Lord, Lord Peart, to reconsider his reply. I support my noble friend Lord Ferrers. It goes without saying on a Bill like this that I have no interest to declare as I have no connections with agriculture and I have never owned a tied cottage, although I lived in one for a short time. That is my only interest in this connection. I speak now as the vice-president of the Association of District Councils who are clearly very much affected by the Bill. Having heard the reply of the noble Lord, Lord Peart, to my noble friend about facing the facts of the situation, I hope that that will be done on both sides of the Committee and that we are not conducting this debate in an era of wishful thinking.

As I understand it, the effect will be to remove from the farmers responsibility for housing farm employees and placing it on the local authorities. It is a Bill to add expenditure and responsiblity to local government because, at the end of the day, they will have to house every agricultural worker. This is the logical conclusion of this piece of legislation.

Would the noble Baroness give way? Do I gather from this that all tied houses will suddenly go out of existence when this Bill becomes applicable?

Of course the houses will still be there, but gradually these houses will go out of existence for agricultural workers, just as the continual Rent Act legislation has removed property from the supply of furnished and unfurnished accommodation privately rented each year. The noble Lord, Lord Janner, with whom I have argued housing many times before and with whom I am delighted to argue once again, I remember saying to us only two years ago that of course the 1974 Rent Act would make no difference to the supply of furnished accommodation, that all the safeguards would apply. A moment ago he laughed at the assertion of my noble friend Lord Ferrers that people let only to foreigners. Let me tell the noble Lord from my own experience of canvassing during the district elections this year in Oxford, that I visited two flats both inmates of which said to me, "It is an extraordinary thing, but I got this flat because I had a Japanese passport"; and the other one said, "I got this flat because I had an American passport". This is the end of Rent Act legislation.

As you bring in more restrictions so you will find that there will be less accommodation to let. Be that as it may, the responsibility is going to fall on district councils, and I should have thought that there was a great deal to be said for taking forestry out of this Bill. As the noble Lord, Lord Peart, has said, and as the Bill itself, as I understand it, indicates in Part II of Schedule 2, under the Bill there will be an appointed date for bringing in forestry. As the facts of the situation as to whether this is a desirable end or not are not yet available, we do not know how it is going to work out. It seems to me that as housing is going to be much more difficult for local authorities, there is much to be said for saying at this stage that we will not put further responsibilities on them.

I would refer noble Lords opposite not to my words but to the words of their honourable friend Mr. Freeson in a Written Answer on 5th August, 1976, after this Bill had been through another place. He had had a meeting with local authority associations and was explaining the cuts in expenditure for council housing in the country as a whole. The argument of the Government was,
"… it would be our main aim, on housebuilding, to ensure that first priority was given to the needs of stress authorities."—[Official Report, Commons, 5/8/76; col. 984.]
If one looks at the list of stress authorities they are, of course, the city centres and the urban areas, and the list is a long one.

The second aim, further down, is designed to deal with more localised stress in areas of other authorities. It stands to reason that agricultural or forestry workers will not be in city centres; they will be in country areas, and largely the responsibility of the 333 non-metropolitan district councils. Money is going to be taken away. I cannot see how the Government can square a Bill to put further responsibilities on local authorities and at the same time take money away.

I think I ought to reply to the noble Baroness. She said she agreed with the noble Lord, but I did not hear much about forestry in her speech. I understand she is arguing about the responsibilities of local authorities in rehousing people and that this could impose burdens on local councils. In the Second Reading debate on 5th October I referred to the fact that my right honourable friend the Minister for Housing and Construction has already assured the President of the National Farmers' Union that, in administering the control of individual local authorities' housebuilding programme and other housing expenditure, his Department will take into account the rehousing duty imposed by the Bill. As an illustration of this we have said that this might be £5 million extra expenditure in the first five years or so. We recognise that we may have to do something. I hope that the noble Baroness will be pleased with that reply. It is very relevant to what we are doing.

I am glad that my noble friend Lady Young said what she did say in her usual attractive and spirited manner. Practically every Bill that comes before us nowadays lays some new commitment on local authorities with very little indeed being said as to where they are going to find the resources to carry out those commitments. I want to warn your Lordships that the time is coming when local authorities will have to say, when new commitments are laid on them in this manner without anything being said about where the resources will come from, that they will have to reject and neglect those commitments because they cannot carry them out. I hope that local authorities will not say that in this particular case if this Bill passes, because their efforts will be relied on. However, we must keep this in front of us all the time. It is not good enough. It goes on and on, and the time will come when the worm—that is not perhaps a very respectful way of referring to my colleagues in local government—will turn and say to Parliament and to the Government, "We cannot accept any more of these commitments and if they are laid on us we propose to ignore them".

May I ask the noble Lord, Lord Peart, to expand on that figure of £5 million. If one estimates £12,000 for a house—which is not unreasonable—that means 416 houses over 600 local authorities, which means that each authority will be able to build two-thirds of one house.

The £5 million has been mentioned as the extra expenditure which might be involved for the first five years or so. That assumes—and I go further and quote:

"… that local authorities will have to deal with some 500 extra cases each year by new house-building."
As I have said, the Minister has replied to the President of the National Farmers' Union and one should take note of that.

Arising out of what the noble Lord has said in reply to my noble friend Lord Gisborough, may I ask if he is saying they will deal with 500 extra houses each year for five years?

They presumably mean that each is a house, so that is 2,500 houses extra. If the noble Lord can sell me 2,500 houses for £5 million I think that even I should get an overdraft on that particular idea, because each house cannot possibly cost £12,000. I cannot divide £5 million by 2,500 off hand, but it is certainly a good deal less than £12,000 per house.

I promised not to intervene frequently and I will honour that promise, but I am concerned at the way the debate is going, both on the first Amendment and on this one. We started off very well by accepting the humanities and proclaiming our belief that they must be honoured. Having done that, arguments are put up why those humanitarian obligations cannot be met—the difficulties are too great, and so on. I appreciate that in debates there is an anvil and you thrash out your pros and cons on that anvil, but the pros and cons put on it must be objectively put, and what I am protesting about—and it is a sincere protest—is the wild (and I again use the word "wild") exaggeration that is going on when noble Lords opposite talk about the consequences of what this Bill proposes, both in terms of agriculture and in terms of forestry.

For example, we were told just now by the noble Baroness that local authorities would have to house all the forestry workers. That is not only a manifestly wild exaggeration but also an unbelievable exaggeration. It just cannot be like that. We are told that the farm workers are going to sit in their houses and are not going to be moved out until there are no houses left to house new workers who want to come in. That, again, is a great exaggeration. I return to my point, which is that we accept, and the noble Earl opposite accepted, the humanitarian approach to this matter. Having done that, it is quite improper and unreal to put against the acceptance of those humanitarian demands arguments which are so exaggerated. I can only think that they are put because people are biased in this particular matter.

I do not want to talk too often or too much, but I believe in objectivity, and while I am prepared to look at arguments which are put and which may clear the difficulties—and in some cases there will be difficulties—do not forget all the procedures that have to be gone through: other alternative accommodation has to be proved not to he there; and there is the committee to give advice to the local authority. All the machinery is there to protect the farmer and, in the case of the forestry worker, I suppose the Forestry Commission. It is all there. The problems, and there will be some problems which will arise—I do not deny that—will not be any greater than the problems which exist now under the present system, where people go to the courts and back to the courts, time and time again, with all the delay.

If we are to have a debate about these things, let us have it objectively, and please do not try to overturn a proper, reasoned and I believe heartfelt—so far as many of our people are concerned it is heartfelt—attempt to resolve what is thought by them to be, and thought by me to be, quite honestly, a social evil. Do not let us throw up arguments against it which are so exaggerated that they make nonsense of some of the statements that have been made.

5.57 p.m.

I had no intention of intervening on the Amendment on forestry, but it seems to me that in this discussion at the Committee stage of this Bill we appear to be having, as my noble friend behind has just said, the same general argument on every Amendment. If that is to happen we shall not make any progress on either side. It is no good noble Lords opposite saying that they are in favour of the ideas behind the Bill and yet moving right away from the specific amendment.

The Amendment we are discussing at the moment is one to do with forestry, but there have been so many wild statements made that it is important to put the record right. The noble Baroness, Lady Young, referred to the Rent Acts. It is natural that she should do so, but it is not natural or necessary to bring that into every Amendment we have. As the Bill progresses we shall have a great many opportunities to discuss the housing provisions which are in this Bill. The noble Baroness knows as well as I do that the number of private rented houses has been declining every year since the War and there is no evidence so far that even the 1974 Rent Act has accelerated that decline. This is a decline, a graph that has been going down and we are all absolutely aware of that.

My noble friend the Leader of the House quoted what our right honourable friend the Minister of Housing said, but in addition, on the 10th of September in Birmingham, my right honourable friend the Secretary of State for the Environment made it quite clear when he said:
"By no means all the housing investment funds will be used up on new housebuilding in the stress areas. There will be funds available for new housebuilding in the non-stress areas."
It is perfectly true that any burden one puts on local authorities is difficult and will not be welcomed by them, but, as I understand it, the district councils themselves have made it quite clear that they would do whatever they could in their power.

My noble friend Lord Pargiter is absolutely correct when he says that the assumption of noble Lords opposite appears to be that all the houses which are now tied cottages will be vacated immediately or will remain empty. They will still be part of the farm housing stock. The noble Earl, Lord Onslow, referred to figures. The figures were that £5 million annually for the first five years assumes 500 houses a year at £10,000 a house. This was an extremely rough and ready figure when the Bill was first introduced. This is a tentative forecast. We cannot say what extra burden there will be. It could be very small.

Perhaps the noble Earl will allow me to prattle on a little further. We do not know what that burden will be. It may be very much less. It may well be that in many areas things will straighten out. We are also aware—and noble Lords brought this up during the Second Reading—that there are areas where there are empty cottages on farms which will be used. We are also forgetting that whether it applies to herd farming or forestry—and I will remind noble Lords that that is the Amendment we are discussing at the moment—the plans we have in other parts of the Bill deal with housing provisions and enable local authorities to plan ahead and make things very much easier. Having made this intervention now, and having got this off our chests—and I realise there is no guarantee that this will not go on through every Amendment—perhaps we could now return to the purpose of the Amendment which is to deal with forestry.

I understood the noble Lord to say £5 million over five years for 500 cases a year. That makes the figures very different, so it is £25 million as opposed to £5 million. I totally withdraw what I said. It is very different from £5 million over five years which was what I understood him to say originally.

If the noble Baroness feels that we have been prolonging this debate by using the same arguments again and again, I only say with the greatest respect that her intervention does not help. She complained that we made the same arguments. That is not so. She explained on Second Reading that she did not know anything about agriculture and even suggested that it was based on rotten roots.

May I just nail that down? I did not say it was on rotten roots. This was in a part of a speech when I was winding up. I said that we should get away from the present rotten root which I referred to as the tied cottage. I did not say all agriculture was based on it. I considered the tied cottage system was a rotten root in what I felt to be a lively and vital agricultural industry. The reason why I intervened in this debate was because this particular topic, the very specialised subject of forestry, was being discussed and we moved away from this. If we had continued along those lines, I would not have done so. But we went straight into a general debate on housing and I thought it was proper for me to intervene.

I can remember what the noble Baroness said and—a funny thing!—I have a copy of Hansard in my hand, and at column 1171 on 5th October the noble Baroness said:

"A healthy agriculture should not depend on rotten roots".
I would merely comment upon that that the inference is either that agriculture is not healthy or, if it is, it is based on rotten roots. I think that was an extremely offensive remark to make about one of Britain's best industries. The noble Baroness has next to her the noble Lord who was a Minister of Agriculture, and she will probably think that she might have been better advised not to have used those words. I will not pursue that any more, and I think we had better address ourselves to the Amendment which I moved. I hope that the interventions of the noble Baroness will be somewhat less abrasive in the future.

The noble Lord, Lord Peart, said that this Bill contains provision for application to forestry. He has said that there is a need for more information to be available. I commend him for trying to get the information. If this is needed, I should have thought that it was better to bring the appropriate measure for forestry into action when the information is available and not to pre-empt the report by including forestry in the Bill. The noble Lord did not address himself to the position of the Forestry Commission. I do not know how many people are engaged in forestry and, of those, how many are engaged in forestry carried out by the Forestry Commission. What the noble Lord said was that he would expect the Forestry Commission to treat their employees in exactly the same way as those employed in private forestries.

Frankly, I do not think that is a good enough argument. If legislation is being introduced to cover a whole sector of people involved in certain parts of agriculture or housing, it is inadequate to say: "We will not let this measure prevail upon certain people simply because we hope that those bodies are responsible enough to carry it out under their own auspices." In Clause 6 there is a list of people, all of whom are going to be excluded from the provisions of the Bill. The noble Lord, Lord Janner, said that we must not make exceptions. If he addresses himself to page 7 of the Bill he will see the bodies which are exempted from the provisions of the Bill regarding tied cottages such as county councils, the Greater London Council, the Commission for New Towns and the Housing Corporation. All these people, who have houses occupied under this character, are to be exempted from the provisions of the Bill.

The noble Lord, Lord Collison, referred to the humanity argument. I told him that I was absolutely with him over it. The humanity argument applies to all people who are affected by any processes of eviction. This is the real trouble that you get into when you start to single out one small facet as has been done over agriculture. I do not believe that it is right that forestry should be put in the Bill. I do not believe that we have had enough information about it. I do not believe any substantial argument has been made in favour of it. As it is, forestry workers in Scotland are excluded and forestry workers in the Forestry Commission are excluded. The Government do not intend to bring it in yet because they do not have enough information. I suggest that the Government say, "Not until we have the information, will we draw up legislation referring to this".

6.8 p.m.

On Question, Whether the said Amendment (No. 3) shall be agreed to?

Their Lordships divided: Contents, 138; Not-Contents, 49.

CONTENTS

Alport, L.Ferrers, E.Northesk, E.
Amherst of Hackney, L.Ferrier, L.Norwich, V.
Amory, V.Gainford, L.O'Hagan, L.
Ampthill, L.George-Brown, L.Onslow, E.
Amulree, L.Gisborough, L.Orr-Ewing, L.
Armstrong, L.Glasgow, E.Platt, L.
Atholl, D.Glenkinglas, L.Porritt, L.
Auckland, L.Goschen, V.Radnor, E.
Avebury, L.Gowrie, E.Rathcreedan, L.
Barrington, V.Gray, L.Redesdale, L.
Beaumont of Whitley, L.Grey, E.Reigate, L.
Belstead, L.Grimston of Westbury, L.Robbins, L.
Berkeley, B.Hailsham of Saint Marylebone, L.Robson of Kiddington, B.
Blakenham, V.Rochdale, V.
Boothby, L.Halsbury, E.Romney, E.
Bradford, E.Hanworth, V.Ruthven of Freeland, Ly.
Brougham and Vaux, L.Harcourt, V.St. Aldwyn, E.
Burnham, L.Hatherton, L.St. Davids, V.
Burton, L.Henley, L.Salisbury, M.
Caccia, L.Hives, L.Sandys, L.
Caithness, E.Hornsby-Smith, B.Savile, L.
Campbell of Croy, L.Hylton-Foster, B.Selkirk, E.
Carr of Hadley, L.Ilchester, E.Sharples, B.
Carrington, L.Kimberley, E.Shuttleworth, L.
Chelwood, L.Kinnoull, E.Somers, L.
Clifford of Chudleigh, L.Lauderdale, E.Spens, L.
Clitheroe, L.Long, V.Stamp, L.
Colville of Culross, V.Lonsdale, E.Stanley of Alderley, L.
Congleton, L.Lyell, L.Strang, L.
Cork and Orrery, E.Mackie of Benshie, L.Strathclyde, L.
Craigavon, V.Macleod of Borve, B.Strathcona and Mount Royal, L.
Craigton, L.Marlborough, D.Strathspey, L.
Cullen of Ashbourne, L.Marley, L.Swansea, L.
Daventry, V.Masham of Ilton, B.Swaythling, L.
Denham, L. [Teller.]Massereene and Ferrard, V.Terrington, L.
Deramore, L.Merrivale, L.Thorneycroft, L.
Derwent, L.Mersey, V.Tranmire, L.
Drumalbyn, L.Meston, L.Trefgarne, L.
Dundonald, E.Middleton, L.Tweedsmuir, M.
Ebbisham, L.Monck, V.Vickers, B.
Elibank, L.Monckton of Brenchley, V.Wakefield of Kendal, L.
Ellenboroigh, L.Morris, L.Ward of North Tyneside, B.
Elles, B.Mottistone, L.Westbury, L.
Elliot of Harwood, B.Mowbray and Stourton, L. [Teller.]Wigoder, L.
Elton, L.Winstanley, L.
Emmet of Amberley, B.Newall, L.Young, B.
Faithfull, B.Northchurch, B.

NOT-CONTENTS

Beswick, L.Janner, L.Popplewell, L.
Birk, B.Kagan, L.Ritchie-Calder, L.
Blyton, L.Kirkhill, L.Shinwell, L.
Brimelow, L.Leatherland, L.Slater, L.
Brockway, L.Lee of Newton, L.Stedman, B.
Castle, L.Longforo, E.Stewart of Alvechurch, B.
Champion, L.Lovell-Davis, L.Stone, L.
Collison, L.Lyons of Brighton, L.Stow Hill, L.
Cooper of Stockton Heath, L.McCluskey, L.Strabolgi, L. [Teller.]
Cudlipp, L.Maelor, L.Taylor of Mansfield, L.
Davies of Leek, L.Melchett, L.Wallace of Coslany, L.
Davies of Penryhys, L.Milner of Leeds, L.Wells-Pestell, L. [Teller.]
Douglass of Cleveland, L.Murray of Gravesend, L.White, B.
Elwyn-Jones, L. (L. Chancellor.)Oram, L.Winterbottom, L.
Gordon-Walker, L.Pargiter, L.Wynne-Jones, L.
Henderson, L.Peart, L. (L. Privy Seal)
Houghton of Sowerby, L.Ponsonby of Shulbrede, L.

Resolved in the affirmative, and Amendment agreed to accordingly.

This may be a convenient time to call a halt on this Bill, and I beg to move that the House do now resume.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.

Aircraft And Shipbuilding Industries Bill

6.17 p.m.

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

Moved, that the House do again resolve itself into Committee.—( Lord Melchett.)

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD AMHERST OF HACKNEY in the Chair.]

Clause 24 [ Permitted dividends and interest]:

Page 29, line 38, at end insert—

("(2A) If, with respect to any period of control of a company payments of dividend are made on securities forming part of the share capital of the company (other than cumulative preference shares) which, when aggregated, do not exceed two-thirds of the certified net revenue of the company for that period, subsection (1)(c) above shall not apply in respect of those payments and they shall be within the maximum permitted for that period for the purposes of section 23 above.").

The noble Earl said: I wonder whether we could now address our minds to some of the more financial aspects of the Bill which we were discussing the other day, and in moving this Amendment I should like to make one or two points. At the moment, companies are limited to paying out the lesser sum of money between the previous year's dividend in which there was a final dividend paid, and the net revenue of the company. In other words, if a company has done well it may not pay out more than the previous year's dividend, and if it has done badly it may not pay out more than the net revenue of the company. It is perfectly understandable that there should be some restriction on dividends which are paid out, because otherwise parent companies could get their subsidiary companies to pay out dividends representing almost 100 per cent. of their assets; and if it was the intention of the Government to nationalise these industries and to compensate them in a certain way it would entirely frustrate the objectives if the subsidiary companies were to pay vast dividends back to their parent companies.

But the Bill effectively prevents dividends from being paid out in the years 1974, 1975 and 1976, when some firms had good years' trading which was nothing to do with the prospect of impending nationalisation. For example, the naval shipbuilders did relatively badly prior to 1974, and therefore the dividends which they paid out were correspondingly small. But since 1974 the terms of trade have turned in their favour in some cases, and certain firms have had extremely good years' trading.

I suggest that it is only fair and reasonable that where they have had a good year's trading, irrespective of the threat of impending nationalisation, they should be able to pay out dividends representing that year's trading. In the Amendment we have suggested that they should be allowed to pay out as dividends up to two-thirds of the net revenue of the company for any one year. I suggest that this is a reasonable figure to choose because the Treasury insist that when they make profits subsidiary companies overseas should remit two-thirds of their revenue to the parent company in the United Kingdom. That is the reason why this figure was taken.

One of the side effects of the legislation as drafted is that the dividend restriction which it imposes results in some naval shipbuilders being in the position where they have built up such a fund of cash, because it cannot be distributed, that the compensation which they will receive will be less than the cash in the bank. This is because the compensation is based on 1974 values, when they were not doing well; they are not allowed to take into account the cash which they have received but which they have been unable to pay out in the better years since 1974. Indeed, in one case the compensation payable will not even equal more than one year's profits. It seems to me that it is unreasonable for any Government to do this. I do not believe that it is intentionally unreasonable and our Amendment merely seeks to make the provision slightly more fair than the Bill as drafted. I beg to move.

6.22 p.m.

We are now starting a series of Amendments concerned with compensation. One of the advantages of having discussed tied cottages for the last 3½ hours is that I have had a chance to look at the Amendments in rather more detail than is normally the case. First, I make the point that none of these matters was debated in another place. Therefore we are doing our duty as a revising Chamber. I think that the Government will agree that many of the Amendments concern technical points such as where a word has been left out, and all of them seem to me to be eminently reasonable. In most cases they are not contentious—certainly they are not politically contentious—and I think that they are constructive. I hope very much that we are now entering a period in which the Government will concede that we are doing our job by trying to improve the Bill, and in particular by trying to make sure that the words of Government Ministers and others—that is, that the compensation would be fair—come about as a result of the Amendments.

The previous Prime Minister, Sir Harold Wilson, wrote to the President of the Confederation of British Industry in 1975 and assured him that the compensation terms would be fair. In January 1975 Mr. Wedgwood Benn gave exactly the same assurance in another place, that the compensation terms would be fair. Also, Mr. Varley wrote in similar terms: the compensation terms would be fair to both taxpayers (I am interested in that phrase) and shareholders. Therefore we have had assurances and reassurances that the compensation terms would be fair.

I am a little puzzled by one matter which arose in your Lordships' House during Question Time on 1st October. The noble Lord, Lord Melchett, was not present, because he was in Northern Ireland at the time, and the noble Lord, Lord Kirkhill, answered in his stead. We were asking about the compensation terms and in particular about the issue of compensation stock. The Minister was asked, I believe by the noble Lord, Lord Trefgarne, whether he could give an indication of the coupon rate at which they might be issued. Perhaps we could clear up this matter right away because there is no need to debate it further. In his reply the noble Lord, Lord Kirkhill, said at col. 757 on 1st October:
"My Lords, it would not be possible for me at this time to say what rate of interest will be paid on the stock. That will be assessed much nearer the time of the date of issue which, depending on the process of the Bill,"—
and this is the significant word—
"would be probably in about one year from now".
Was that a slip of the tongue? If we are thinking of issuing the compensation stock one year from now and if there is to be a period of negotiation and arbitration which will take some time, it may be imperative after that period for companies to ask for stock to be held for a certain period. Sometimes it is held for a year in order to avoid capital gains tax and other taxation.

Perhaps the noble Lord could put us straight on this point before I continue with my speech. According to the Bill, surely the compensation stock would be issued shortly after vesting day. We were assured in another place and in formal discussion that the Government understood that these companies, a proportion of whose assets had been hived off, were desperately anxious to get some of the money in order to restructure the company, recreate the headquarters which may have been taken over, and the like, and therefore to create jobs and equip themselves with modern equipment so that they would be economically viable and able to give employment as they had in the past. We were told that a large section of the compensation would be paid. Unofficially it was suggested that something like 50 per cent. would be paid straight away. Therefore the suggestion that the stock will not be issued for another year is very disturbing. Is the noble Lord able to give an assurance on that point, or to say that he will look at it?

I am ready to answer questions relating to Amendment No. 131 with which the Committee is dealing. If the noble Lord cares to raise a general point on the Question that the clause stand part, I will happily deal with it then.

I am delighted that the noble Lord has been so courteous and that I have had the opportunity to put the matter to him now instead of bowling it fairly fast at him just before he stands up. In this instance, of all the compensation clauses, may I endorse what my noble friend has said and support this modest Amendment which is seeking, as are many others, merely to be fair. I will leave it at that until we have heard the noble Lord's reply.

The point which was made by my noble friend Lord Ferrers in his opening remarks was that certain companies which are to be taken over will be taken over possibly at less than the value of their cash reserves, or at less than the value of one year's profits. If this is true it seems to me to produce a quite frightening result. First, it is palpably and grossly unfair. To put that right, one year's profits must be multiplied at least by 10. Consequently, this will increase Government expenditure even more. We are back to the old merry-go-round of spending money which we have not got at a time when we are beggars and are having to go to the IMF at a time of increasing Government expenditure. I know that this question has been raised before not only by myself but by other noble Lords. However, it seems to me that the noble Lords opposite, who are happily chattering away, have not grasped the simple fact that we cannot go on spending money which we have not got. Even the Chancellor is beginning to realise that. This runaway "rakism" is terrifying.

6.30 p.m.

The purpose of Clause 24 is to set the permitted level of dividends for the purposes of Clauses 23 and 25. It is right that dividends should be paid for the period up to vesting. In this interim period the shareholders retain their control of the companies, and this control is stringent in the case of wholly-owned subsidiaries. It is right that in this period they should receive fair remuneration for their capital.

Up to that point there is absolutely no difference between noble Lords opposite and myself. But, equally, it is important that the companies should not use the device of dividend payments to deplete the value of the business; and again I think I am in agreement with the noble Earl on that point, which is one that he very fairly made himself. The Government are paying compensation for the securities of the businesses on the assumption that in the period up to vesting the companies will continue to operate, subject to normal commercial variations, in the same way as they had previously. If companies were suddenly to make substantially increased dividend payments, it would negate this basic assumption. But to set as the base level of permitted dividends those paid in the recent past establishes the continuation of the business in the same form.

The proposed Amendment would in many cases permit sudden and, I would suggest to your Lordships, unjustified, increases in dividend payments. Irrespective of the performance of the companies between the base financial year and the subsequent period, they would automatically be permitted in many cases to increase their dividend payments. In such circumstances it would be surprising if companies did not take full advantage of such a provision. I am sure that no noble Lord would consider it right positively to encourage increased dividend payments even if profits might have deteriorated substantially.

But this is not to say that companies may not pay higher dividends. There is a provision in Clause 23 for my right honourable friend the Secretary of State to approve higher dividends if the performance of the company justifies such an increase, and it was this provision in Clause 23 which I do not think noble Lords who spoke to the Amendment touched on, certainly not at any great length. My right honourable friend the Secretary of State has made it clear, and I can reiterate now, that he will consider any applications put to him. It is perhaps significant that only nine of the 43 scheduled companies have as yet sought his approval since these provisions were announced nearly a year ago. I think it would be hard to argue on this evidence that the existing provisions are unduly restrictive. Of those nine companies all but two of them received approval for an increase above the permitted level because of special circumstances applying to the companies, and I understand that of the other two cases one is still under consideration.

The present provisions of Clause 24 allow for shareholders to continue to have their investment remunerated at the same level as in the recent past, with discretion for the Secretary of State to agree to a higher level if circumstances warrant. The permitted level may well, in the case of some companies whose prospects have deteriorated since the base period, lead the companies to pay more dividend than they would prudently have paid had nationalisation not been pending. The proposed Amendment would amount to an open invitation to the companies to dissipate their financial assets in the interim period, and for that reason I regret to say it would not be acceptable to the Government.

I am grateful to the noble Lord, Lord Melchett, for that answer. I do not think there is very much between us over this. He is quite right when he says that it would be wrong for companies to dissipate their capital because of impending nationalisation. Certainly my Amendment would not seek to do that, and if the effect of it is that, that is not its intention. The noble Lord's argument was really based on, "Do not worry, because the Secretary of State can give approval in certain circumstances". I understand that, but I think it is another example of really huge powers being given to the Secretary of State. If a company has done better and made more substantial profits, according to the noble Lord, Lord Melchett, it can apply to the Secretary of State, and as he said nine have done so; but it is then up to the Secretary of State to say, "Yes, you can pay it" or, "No, you cannot pay it". That is, I suggest, a very powerful lever in the hands of the Secretary of State.

The noble Lord did not wholly address himself to the point I made earlier, and I think it is a valid case, that some shipbuilders did very badly because of the terms of trade and economic circumstances up to 1974. Of course, 1974 is the date upon which their assets, such as they are, arc to be valued, and if they did badly, of course their assets will be valued poorly. But then, when despite the prospect of nationalisation things suddenly have got better and they have made large profits, the Bill says, "You must not distribute those. You can, if you like, apply to the Secretary of State and he will decide whether or not your application is reasonable". I should have thought we should have something slightly firmer than that.

After all, this is a case of the Government taking over the assets of various companies, and the Government have said, and the noble Lord, Lord Kirkhill, said on Second Reading, "We want it to be fair". Yet as it stands at the moment I do not think it is fair, and the only person who is to adjudge whether it is fair is the Secretary of State, who is a very interested party. I wonder whether the noble Lord, Lord Melchett, would care to comment upon this: whether in fact it is right for companies who have done well since 1974 not to be able to distribute some of those profits. After all, if they have done very well, irrespective of the prospect of nationalisation, those were the terms of trade they encountered at the time. It is not unreasonable to say that they could distribute, not all of their profits, but two thirds of their profits. If the noble Lord could help me on that point I should be very grateful.

As the noble Earl says, I do not think there is a great deal in principle between us, though we may well be disagreeing about how to achieve something which we both wish to see achieved. As I said in my original reply, I would suggest, first, that the fact that only nine companies out of the large number in the Bill have applied to the Secretary of State would suggest that there is not a great deal of ground for complaint about this; but I would only use that as an indication and certainly not pretend that it is a conclusive argument. Secondly, I would suggest that the fact that seven out of those nine companies have been permitted to increase the dividend paid is an indication that my right honourable friend the Secretary of State is certainly not being oppressive in the use of his discretion. Of course I could not accept from the noble Earl for a moment any suggestion that my right honourable friend would seek to use, or fail to use, his discretion in an onerous or unfair way to prevent any increased dividends which were justified and permissible. I can assure the noble Earl that if circumstances do warrant an increase the Secretary of State will allow one.

In some cases where there is no permitted level—for example, if no dividend was paid in the base period or if only interim dividends and no final dividends, in the terms of the Bill, were paid—the Secretary of State must determine the permitted amount. Again there, I can assure the noble Earl—though I know this will not be entirely convincing to him—the Secretary of State will act fairly, and I hope that in the cases which have so far come to the Secretary of State, that has been the experience of the companies when they have gone to him under the provisions of the Bill.

May I ask the noble Lord two questions on that point in order to help us make up our minds on what is a difficult question? Can he say whether in the cases which he mentioned—I think seven out of nine—where additional dividends have been agreed to by the Secretary of State, they were agreed to up to the extent the companies were asking for; in other words, were the companies quite satisfied with that decision? Secondly, assuming that they are not satisfied, assuming that in some cases the Secretary of State has not agreed, then, as the noble Earl has pointed out, the company is left with cash in the coffers. Will that be taken into account in any arbitration there may be on the amount that ought to be paid for the shares in the last resort when the settlement is made?

May I say straight away that I do not know the answer to the noble Viscount's second point off the cuff. No doubt it will come up again when we deal with compensation, and I will take an opportunity to give the answer at some convenient moment. On the first point, it would of course be for the companies to say whether they were satisfied, and not for me as a member of the Government. As I say, in seven cases there has been a permitted increase; on one of the other cases, as I understand it, discussions are still continuing. I think it would be for the companies rather than for me to say whether they were entirely satisfied with what has taken place.

If they were not satisfied I imagine they may have told the Secretary of State, and the information might have come to the noble Lord.

The difficulty in this matter is that who the companies are and what has taken place is commercially confidential information with the Department of Industry, and must remain so.

6.41 p.m.

I must apologise to the noble Lord for not having arrived earlier, and therefore 1 feel it would be totally wrong for me to intervene on this particular Amendment. I am sure that everything that needs to be said to make the point has been said. It is, however, much more appropriate that it should be discussed in some ways in general terms under the whole question of compensation, to which the noble Lord referred just now. I hope he will forgive me if I raise certain issues on the general theme relating to this Amendment later under Clause 35, because it is not something that we can look at in isolation. The reason why it has been included is to try to put right one element of fairness, and later we shall talk about the whole concept of fairness. You cannot put fairness right by just altering one element of it. So if you will forgive me, I will raise one or two points later in support of the whole concept on which this Amendment is based.

I think we rather object to the reference date because it is rather old. It could be trading results for 1973/74, and therefore a company which has been doing exceptionally well in 1975/76 is rather harshly treated. I was interested to hear the figures given, because my information is that the companies which had applied had had rather "unsatisfactory" —I think that was the word—results from the Secretary of State. I wonder whether I can persuade the Secretary of State to use the same flexibility as the Treasury do.

I have had cause in the past even to ring up the Treasury and say, "Would I be in a position to pay an increased dividend as a recovery stock?" They say, "We will ring you back tomorrow". You get extraordinarily quickly highly confidential decisions, and they set standards for a recovery position, in which some of these companies arc. They were going through a very bad time in 1973. I think we should be happier if we could be given the assurance that the Secretary of State would set the same sort of standards that the Treasury do within the general provision now that they cannot be higher than 10 per cent. We are only saying in this Amendment two-thirds of the net revenue, and this is the same proposition which, under the Exchange Control Regulations, British investors controlling overseas companies must repatriate; and this is the rule of the Government, of the Treasury. We are not asking for anything unreasonable but for something that we have to do if we have overseas companies. We have to bring back and repatriate two-thirds, so it is not an unreasonable amount that we are asking.

No, I do not think on either side that we have claimed that the other side's position has been unreasonable. I am delighted at the spirit of compromise and good will with which the debate on this Amendment has been carried on. I would say to the noble Lord, as I have been given some information in a sense in reply to the noble Viscount's first point, that my understanding is, without disclosing which companies are involved and in how many particular cases that has happened, that in most cases we have in fact been able to agree to the request put to us by the companies.

May I say, directly relevant to that point, and again without disclosing any names or identities, which would not be proper, that I have been given rather opposite information. I have been told that some, at least, of the companies that have applied and have been granted some permission have not been satisfied, because they have had the feeling that the judgment has been made very much in relation to an historical level of dividend. In an ordinary public quoted company the historical level of dividend is not always, but may usually be, regarded as a fair base from which to work. In the case of subsidiaries of holding companies that of course is not the case, where dividend policies may fluctuate considerably not only in accordance with the performance, the profitability in any given year, of the subsidiary, but perhaps even more sometimes in accordance with the financial needs of the parent.

Therefore, if the base year was a year in which the parent did not call on any particularly large dividend from the subsidiary and that year's small dividend is used as the base amount, and then the application is made to the Secretary of State, he uplifts by a percentage but really in his mind is working on the historical value, this could be very unfair. It was because of representations of that kind from firms who have applied and felt that, for reasons they understood, with the Bill drafted as it is the Secretary of State might work on a one-year base period and extrapolate from there, that we were persuaded that it was right to move this particular Amendment. I am afraid that our evidence is rather contrary to the noble Lord's; namely, to the effect that those companies who have had some increase permitted have not been satisfied because they have felt that the wrong criteria have been used by the Secretary of State—I am not saying anything critical of the Secretary of State personally, but merely because of a lack of proper yardsticks provided in the Bill.

When I heard Lord Melchett's first reply to my noble friend I was inclined to agree with my noble friend that it appeared that we were not all that far apart. The noble Lord, Lord Melchett, referred back to Clause 23 and said that these matters could be referred to the Secretary of State; that they had in certain instances been referred to the Secretary of State and that there had been certain replies. What worries me more is that here is another instance when the Secretary of State has to be brought into the discussions. But who is the Secretary of State? He is not an individual. He is, in fact, nominally the head of the Department, and obviously he will make his decision on what his officials recommend, and they equally and rightly must work to play safe.

It seems to me that all this must make for delay. If we pass this Amendment which is now before us, here will be something that could be decided by the companies themselves without reference to the Secretary of State, and so they would not be held up. It would be much smoother and easier for them to go ahead and not always be worried by the question, "Are we right in this. We have to refer it back". I am making a point to which I referred to some extent when I spoke on Second Reading: the problem of the activities of the Department as opposed to the individual Secretary of State. Personally, despite the discussion, I am still of the opinion that it would be right if this Amendment were agreed to.

6.49 p.m.

Perhaps we could solve the argument between my noble friend Lord Carr and the noble Lord, Lord Melchett. Presumably these companies went to the Secretary of State and said, "Please, may we put up our dividends by a certain amount?" Surely the noble Lord can answer us, without any breach of commercial secrecy, how many of the companies were allowed to increase their dividends by the amount they asked so to do, or how much it was reduced by. That would settle the argument one way or the other, and would not necessarily breach any commercial secrecy.

I do not have the precise information with me. I know that it is most, which must mean more than half, which must mean at least four out of seven. Perhaps that helps the noble Earl.

Many companies have been waiting for this debate because it did not take place in the House of Commons; they have been waiting to see the Amendment probed and to be given assurances. The noble Lord can rest assured that he will be getting a good many more than the nine applications that have come in. He must not think that they are all satisfied or are not in a position to ask for increased dividends, and certainly some more will he coming in.

I assure the noble Lord and, through this Chamber, those companies that apply that their applications will be treated by the Secretary of State as fairly and as expeditously as possible. Although this Amendment was not debated on Report in the House of Commons, it was discussed in Committee there.

I am grateful to the noble Lord for what he said and for the explanation he gave. Clearly, there is some unease on our part and I hope that he will not feel that this has been in any way a frivolous discussion. This is an important point and, as my noble friend Lord Orr-Ewing, said, it was not discussed in another place, certainly not on Report, and it has been right for us to discuss it here. We still feel unhappy about it. It gives tremendous power to the Secretary of State and we want to try to make it as fair as possible. I will not take the matter any further now, although we may wish to return to it at a later stage. I hope the noble Lord will, if he has any spare time, look into the point to see whether there is not some substance in the argument we have adduced. I think there is, and we should appreciate the noble Lord's looking into it. In the meantime, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 24 agreed to.

Clause 25 [ Final payments of dividend and interest]:

6.52 p.m.

moved Amendment No.133:

Page 31, line 19, leave out from beginning to ("not") in line 21 and insert ("payments on all securities forming part of the loan capital of the company of interest which has accrued up to the date of transfer and has").

The noble Earl said: This Amendment goes with Amendment No. 135 and I am hugely hopeful that the noble Lord, Lord Winterbottom, will say that the Government accepted it because, like all our Amendments, it is helpful. Indeed, it is particularly helpful because it is only a drafting, Amendment. It is also slightly grammatical, which should appeal to the noble Lord. The two references in Clause 25 relate to the payment of interest on loan capital in the final financial period. The present wording refers to "interest payments which have accrued", but of course technically it is the interest which accrues and not the payment, particularly if no payment has been made. We suggest, therefore, that the Amendment would relate it to the actual interest which has accrued and not the payments.

I am grateful to the noble Earl, Lord Ferrers, for that explanation of the Amendment, which is identical to Amendments Nos. 282 and 283 which were put down in the Commons but which fell by the guillotine on Report. I am glad to say that the Government can accept it.

Now we are making progress. I am delighted to hear that the Government can accept it, particularly as it is one of those which fell by the guillotine in another place. May I ask the noble Lord to say that the others which fell by the guillotine will also be accepted? Perhaps that is asking a little too much.

On Question, Amendment agreed to.

6.55 p.m.

moved Amendment No 134:

Page 31, line 30, at end insert ("and for the purposes of this paragraph there shall be taken into account the largest amounts, if any, approved in the case of those securities under section 24(1)(c)(ii) above, and, in the case of each of those amounts and the amounts approved under section 23(1) above, where the number of days comprised in the final financial period exceeds, or is less than, the number of days comprised in the period of control in respect of which that amount was approved, that amount shall be treated as increased or, as the case may be, reduced by multiplying that amount by the fraction, of which the numerator is the number of days comprised in the final financial period and the denominator is the number of days comprised in that period of control.").

The noble Lord said: This Amendment is not only long, but complex. I am glad to see that I have sitting behind me some merchant bankers and stockbrokers who I hope understand more about this subject than I do. However, I will do my best to explain the Amendment. Clause 25(1) provides for mandatory payments by an acquired company after the date of transfer of interest and dividends

up to the date of transfer. In the case of dividends that are for the final financial period as defined in Clause 25(4) and (5), they are basically to be of the maximum amounts which would be permitted if that period were a period under control as defined in Clause 23(7). However, under subsection (1)( b) if larger amounts have to be approved under Clause 23(1), the dividend payments are to be of " the largest amounts so approved " but unfortunately subsection (1)( d) omits to make similar provision in relation to any amounts previously approved by the Secretary of State under Clause 24(1)( c)(ii) in a case where a company has no basis financial year, and without such a provision the maximum amounts either cannot be ascertained or will be nil.

The contention, therefore, is that what should be taken into account is the largest amounts previously approved under Clause 24(1)( c)(ii) as well as under Clause 23(1), which brings me to the point that although Clause 24(4) makes provision for an increase or a reduction of amounts according to whether a period of control is longer or shorter than the basis financial year, this does not apply to either of the amounts which may be approved by the Secretary of State under Clause 23(1) or Clause 24(1)( c)(ii). As either of these amounts may govern the payment of dividends for the final financial period as determined under Clause 25 (l)( b), the same principle should, we contend, clearly be applied for this purpose, and the Amendment is directed towards rectifying both of these omissions.

Like the noble Lord, Lord Strathcona and Mount Royal, I am in somewhat of a fog on this issue but I hope that I may be able to convince him that the Amendment is unnecessary. As drafted, Clause 25 already contains provision which will protect the interests of shareholders of the vesting companies. As drafted, Clause 25(1)(b) provides that payments of dividends for the final financial period must be paid at the maximum level which would be permitted if that period were a period of control or, if larger amounts have been approved by the Secretary of State under Clause 23, at that approved level. In other words, the final financial period is required to be treated as though it were itself a period of control.

Clause 24(4) already provides that the amount of dividend payable in respect of a period of control must be pro rated in accordance with the length of the period. Presumably that means that it must be proportional to the length of the period, if I translate my brief into English correctly. This also, by implication, brings in the provision in Clause 24(1) (c)(ii) since the Bill already provides for the final financial period to be treated as a period of control. I therefore ask the noble Lord to withdraw the Amendment because we believe it is unnecessary and because the interests of shareholders are adequately protected.

We have not succeeded in flushing out any of the experts who would, no doubt, be willing to give their additional advice to us this evening. It seems abundantly plain, since neither the noble Lord nor I would claim to be in that happy position, that the best thing we can do under the circumstances is to read what the noble Lord has read out so beautifully in his excellent English and see whether it meets the points which are being raised by those who are briefing us. I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

moved Amendment No. 135:

Page 31, line 37, leave out from ("securities") to ("not") in line 38 and insert ("payments of interest which has accrued on those loans up to the date of transfer and has").

The noble Earl said: This Amendment is the same as Amendment No. 133. I am not moving it formally because I long to hear the noble Lord, Lord Winterbottom, say that he accepts this Amendment too. It really makes a bit of history. I beg to move.

On Question, Amendment agreed to.

7.3 p.m.

moved Amendment No. 136:

Page 31, line 43, leave out from ("statutory") to first ("of") in line 45 and insert ("provisions and rules of law applying to the company shall be deemed to permit such payments").

The noble Earl said: The purpose of the clause is to deal with the situation in which, even though a dividend is required by the Act to be paid for the final financial period, there might be some legal provision in the Companies Act or in the articles of association of the company which could prohibit, or put conditions upon, any such payment. We are concerned that the reference in Clause 25(3) to,

"statutory or other provisions relating to the company",

should overcome any inhibition on the company, whether statutory, common law, contractual, financial or any other. The Amendment attempts to produce a clearer and more all-embracing wording to avoid any potential pitfalls. That is the explanation of the Amendment and 1 look forward with heady anticipation to its acceptance to the noble Lord, Lord Winterbottom. I beg to move.

I am afraid that the noble Earl's lucky streak is running out, but I think that we shall he able to agree at least on this Amendment. Like Amendments Nos. 133 and 135, this is a drafting Amendment. We believe it to be unnecessary since it could, in certain circumstances, be positively disadvantageous to shareholders or creditors. Subsection (3) is designed to ensure that the payments prescribed by Clause 25 can be made irrespective of any other restrictions that might apply to the company. Such other restrictions may, under the present drafting, be statutory or other provisions, but the Amendment would confine this to statutory restrictions or the rules of law.

While this might make little difference, it is potentially more restrictive. For example, the Amendment would not release from provisions of company memoranda or articles of association related dividend payments or, for example, any conditions attached to a Ministry of Defence loan. If the Amendment could result in creditors or shareholders being in a worse position than under the present drafting, I believe noble Lords would agree that that would be wrong. For that reason I ask the noble Lord not to press the Amendment.

Is the noble Lord saying that the Amendment is unnecessary because the points that it is trying to make are already made and that the Government will support the principle behind the Amendment? If so, we are not disagreeing and I shall not waste your Lordships' time, but hope that I may assist in the passage of the Bill.

That was a very deflationary end to my noble friend's speech. I thought he was going to say that, as there was nothing between us as regards the merits of the Amendment, the noble Lord, Lord Winterbottom, might consider an Amendment at Report stage that would cover the point that we are concerned about. As I understand it—and it is, of course, always possible and, indeed, almost certain that 1 shall be wrong, though the noble Lord, Lord Melchett, should not nod his head with such glee—companies could be made to pay out a dividend even though some of their legal, contractual or articles of association obligations might prevent them from doing so. If, for some reason, a company is so constructed that it is not allowed to carry out these payments, is it right that the Bill should force it to go against its articles of association, or any other kind of legal restriction it may be under? I am not quite certain whether the noble Lord, Lord Winterbottom, has answered that point.

I think I did. There is a problem here. 1 believe that the Committee would wish, where there is an area of doubt, that the Government should be generous to shareholders and others who are due to receive interest or some other payment, so that if there were some grey area it could be removed and the individual and the company concerned could receive the maximum possible under the present provisions of the Bill. If there are restrictive clauses in a memorandum or in articles of association, it is right that the interpretation should be generous rather than stingy.

When I was insisting that I would support the passage of the Bill, I meant up to the stage where we come to deal with compensation proper, rather than with all the little bits that come too soon. May I ask the noble Lord whether he is saying that the Government will not require people to do things that they are not permitted to do, or that they will not permit people to do things that they are not required to do? I am not sure which way round it goes. There is an anomaly here that needs to be corrected because it is not absolutely clear. I hope that the noble Lord is giving an undertaking that, in some way or another, this will be made straight, clear and legal so that there can be no doubt. Otherwise, we shall have arbitration going on and on, for ever.

What my noble friend said—and it might repay study in Hansard because this is a complicated point—is that what we are contending is that the Bill, as drafted, achieves the result that noble Lords opposite wish to see achieved and that their Amendment, while it achieves part of the result that they wish for, would be restrictive because it does not mention all the possibilities. My noble friend gave the examples of the memoranda or articles of a company and a Ministry of Defence contract. So, unintentionally, the Amendment would be restrictive. We are quite satisfied on our legal advice from the draftsmen that the Bill as drafted achieves what the Amendment seeks to achieve.

I am grateful to the noble Lord. We shall certainly study with care his words and those of his noble friend. I must say that we have got into an amusing situation in which noble Lords opposite are trying not to accept our Amendments because they are too restrictive and are encouraging companies to pay out more than we might have thought appropriate. It is a fascinating exercise. I am grateful to the noble Lords for their explanation and I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 25, as amended, agreed to.

Clause 26 agreed to.

Clause 27 [ Removal of company from companies to be acquired]:

7.9 p.m.

moved Amendment No. 141:

Page 34, line 34, leave out ("with respect") and insert ("in relation").

The noble Earl said: This, too, is a drafting Amendment. It suggests that we should leave out the words "with respect to" and substitute "in relation to". Unless the meaning is intended to be different, there seems no reason for the use of the words "with respect to" in line 34 when the phrase "in relation to" is used in line 32 in a similar context. I cannot see that it is, and it therefore seems sensible to have the same words in both places. I beg to move.

The noble Earl is returning to a point raised in another place, and I am glad to say that this is another case where the Government are willing to accept the Amendment.

Words fail me for the moment! I am more than delighted, and I think that we will have to celebrate on some occasion. I am most grateful.

On Question, Amendment agreed to.

7. 10 p.m.