I beg to move, That the Bill be now read a Second time.

The main significance of the Bill lies in the fact that it brings to an end the last few of the Defence Regulations as such. It is only a few months short of 25 years since both Houses of Parliament, on 24th August, 1939, passed within the space of a few hours all stages of the Emergency Powers (Defence) Act. That was the Act under which the Defence Regulations were made and which gave the Government the widest possible powers over almost every aspect of the life of the country.

The other day, I looked at the volume of the Defence (General) Regulations—which is the largest and the principal series of Defence Regulations—as they stood in the middle of the war at March, 1943, and I noticed that they ran to well over 300 pages of print. The Defence Regulations themselves were, of course, only the beginning of that story. The Statutory Rules and Orders which were issued under Defence Regulations and other emergency powers were vastly more numerous. Those issued in 1943 alone made a printed volume of over 2,000 pages. This remarkable chapter in our legislative history is coming to an end.

Hon. Members may remember, in broad outline if not in detail, the course of events since the end of the war. After V.E. day, quite a large proportion of the Defence Regulations were revoked within a matter of months, but many of the widest and most important Regulations were continued in force by the Supplies and Services (Transitional Powers) Act, 1945, and by the Emergency Laws (Transitional Provisions) Act, 1946.

The purposes for which Defence Regulations might be used were extended by the Supplies and Services (Extended Purposes) Act, 1947, to cover the peacetime economic needs of the country as judged by the Government of the day. The statutes provided for the life of the Defence Regulations to extend to December, 1950. and thereafter for further periods of not more than one year at a time by Order in Council.

Within this statutory framework, there has been over the past 15 years a vast reduction in the number of controls and orders of all sorts, a process which, it is only fair to say, was begun by the party opposite and which we accelerated after 1951 as the economy gained strength.

It may be remembered that in 1958 we undertook a thorough review of the whole subject and we set out the results in detail in a White Paper, Cmnd. 563. We decided that the time had come to sweep away the emergency legislation—that is to say, the Emergency Powers (Defence) Act, 1939, and, with minor exceptions, the Acts of 1945 to 1947, to which I have referred. We undertook instead to provide fresh legislative authority far such powers as were still required and to put a strict limit on their use.

There were at that time 13 substantive Defence Regulations still in force. We decided that five of them could best be embodied in separate legislation, that three could lapse without replacement and that the other five, to whose contents I will come presently, should be retained for a further limited period. Our proposals for this purpose were presented to the House in November, 1958, in the Bill which became the Emergency Laws (Repeal) Act, 1959.

In addition to continuing those five Defence Regulations, the 1959 Act continued in force certain temporary powers which had been conferred upon the Ministry of Supply—powers, for example, to produce articles required for the defence of Commonwealth countries and power, which had later been transferred to the Board of Trade, to trade in jute and jute products. The Act also covered the powers under the Ships and Aircraft (Transfer Restriction Act), 1939, to control the transfer or mortgage of British ships in the interests of national defence.

The life of the 1959 Act was limited to five years. As a result, it is due to expire on 31st December next. We have accordingly been considering which, if any, of these various powers should be allowed to lapse and which need to be continued either permanently or for a further limited period. We have regarded the question throughout as a practical one and not one which could sensibly be approached in any doctrinaire spirit. We have examined each case on its merits and considered whether the retention of the powers in question could properly be regarded as necessary in present-day conditions.

We came to the conclusion that there was one power, potentially a very wide one, which it would be right to allow to lapse at the end of this year. That is the power under Defence Regulation 55 and 55AB under which the Government can control the price and supply of any article if a shortage has arisen, or is expected to arise as a result of an emergency overseas and if that shortage is such as to threaten either our national defence or the welfare of the community.

We are not proposing to give up these powers without putting anything in their place. In a country as dependent as ours upon imported fuel, food and raw materials, that might be rash. The House will remember that we are awaiting Royal Assent to a Bill, which we considered a few weeks ago, to amend the Emergency Powers Act, 1920. This will enable the Government of the day to control the supply and distribution of food, fuel, light and other necessities in the event of an emergency arising, whether at home or overseas, which is likely to deprive the community of the main essentials of life.

These powers are less widely drawn than in the existing Defence Regulation powers and Parliament is given greater control over their use, as is clearly right in peace-time conditions. We think, however, that these new powers go as far as is necessary in practice or as could be justified in permanent legislation.

The Emergency Powers Bill to which I have referred deals also with another of the Defence Regulations powers which has been continued for five years by the 1959 Act. This was the power under Defence (Armed Forces) Regulation 6 to employ troops on agricultural or other urgent work of national importance. It is now being made permanent.

There was one other set of powers continued under the 1959 Act which we thought could be dealt with most appropriately in separate legislation. This is the group of powers, which I mentioned earlier, originally conferred on the Minister of Supply, and now on the Minister of Aviation, and they relate to the supply of defence materials and experimental work. My right hon. Friend the Minister of Aviation is at present considering which of these powers he should ask Parliament to continue, and he will be putting his proposals to the House shortly.

For the rest, we thought that it would be most convenient to present our proposals relating to these various powers in a single Bill, despite the fact that several of my right hon. Friends are concerned. The alternative course of putting forward ten or so short, separate Bills would, I think, have been somewhat confusing, and it would have meant a good deal of duplication of effort since many of the ancillary provisions are common to most or all of the different powers. The House will have observed that we have spelled out the powers afresh and have not sought to retain them by reference to preceding Acts.

This brings me to the content of the Bill. There is a general point which I should explain: in no place have we added to or widened the existing statutory powers. In every case we have either retained them as they stand at present or have restricted them.

Clause 1 continues the Government's power to regulate the terms of hire-purchase and credit-sale agreements as one means of restricting the growth of excessive credit in the economy. As hon. Members know, the control operates in practice on the size of the down payment and on the period allowed for payment of the balance. Except for intervals in 1954 and 1958, the control has been imposed since 1952 with varying degrees of severity, dependent on the economic situation.

It is an essential requirement of the Government's economic policy that the rate at which total demand grows should be containable within fairly narrow limits. Demand must be allowed to grow fast enough to maintain a high level of employment but not so fast that the value of the currency at home or abroad is put in danger. The ability to forecast and diagnose current trends has been improving in recent years, but we cannot ignore the possibility that, to keep demand under adequate control, measures may sometimes have to be taken quickly, possibly on a substantial scale, between Budgets.

Moreover, even if the growth of demand could be counted on to remain within the range which is safe under normal conditions, it is always possible that unforeseen events at home or overseas may on, occasion require rapid action. Hire-purchase control, of course, is only one of the ways in which the Government can regulate demand. But monetary measures tend to be slow working, and fiscal measures are not always sufficiently flexible.

My right hon. Friend the Chancellor of the Exchequer fully recognises that hire-purchase controls have certain disadvantages. But they possess the important advantages that they can be used at any time and have a quick effect on demand. For these reasons, we regard the power to control hire-purchase terms as an important weapon in our economic armoury, and we propose that the statutory provisions should be made permanent.

Clause 2 continues certain exchange control powers which experience shows are needed to complete the powers available under the Exchange Control Act, 1947. The additional powers are needed to prevent what could become an unacceptable loss to the foreign currency and gold reserves of the United Kingdom.

The Exchange Control Act provides virtually no powers to control transactions within the sterling area, and the control which it gives over assets in the United Kingdom held by residents outside the sterling area does not cover gold or Treasury bills. The existing powers used for this purpose depend upon Defence (Finance) Regulation 2A, which makes no distinction between countries in the sterling area and others. Clause 2 makes these powers permanent.

The power to control Treasury bills and gold held by residents of countries outside the sterling area is not currently being used, but is needed in order to be able to block such assets quickly in emergencies. It is desirable that such power should continue to be available without having to call on special emergency legislation.

Powers to control transactions within the sterling area are at present used in two ways. First, the existence of a free currency market in Hong Kong makes it necessary to regulate the use in the United Kingdom of Hong Kong assets. A direction was made in 1950 for this purpose. These assets may be used for ordinary day-to-day trading, but the control prevents their use for irregular arbitrage transactions. Secondly, since 1957 the disposal in the United Kingdom of foreign currency securities by residents in other sterling area countries has been controlled. This effectively prevents a loss to the reserves from the acquisition of foreign currency securities through the free markets in certain sterling area countries.

Clause 3 has two main and closely related purposes. Subsection (1) gives the Board of Trade certain of the powers needed to prevent the supply to the U.S.S.R., China and other Communist countries of strategic goods and materials. Our international obligations require us, in our own interests and those of our allies, to prevent these goods from reaching such countries. The export of strategic goods from the United Kingdom is controlled by the Board of Trade using powers under the Import, Export and Customs Powers (Defence) Act, 1939.

But these powers are not in themselves sufficient to enable us to carry out our international obligations. Besides controlling the supply of strategic equipment to Communist countries from the United Kingdom, it is also necessary to prevent the sale to these countries of strategic goods located in third countries.

In addition, to complete the international control system the Board of Trade issue import certificates which enable other participating countries to permit the export of strategic goods to the United Kingdom with the assurance that the goods will not be transshipped or re-exported by the British buyer to a forbidden destination. The Clause will enable the Board of Trade to continue to exercise those powers which are at present exercised under Defence Regulation 55(1)(a)

Subsection (2) gives my right hon. Friend the Minister of Transport power to prevent the building for foreign owners of ships which are either embargoed under agreements made by the Government or which are of a type which in the interests of defence policy at the time should not pass into the possession of a particular foreign Power. The particular types of vessel to which the latter restriction will apply will vary with circumstances and cannot be defined in advance. The powers are exercised by means of a licensing system. Shipbuilders are given general licences to build all kinds of vessels for United Kingdom and Commonwealth owners. Only when they wish to build a ship of 100 gross tons or over for a foreign Power do they have to obtain an individual licence. It is a system which I understand, in practice, causes little trouble to shipbuilders.

One hesitates to assume that the powers given by this Clause will be wanted in perpetuity. On the other hand, we must keep—and show that we are keeping—the powers necessary to carry out our international obligations. For this reason, subsections (4) and (5) provide that these powers shall initially continue in force for five years and that subsequently they shall be renewable for further periods of up to five years by Order in Council, subject to affirmative Resolution of both Houses.

Clause 4 makes permanent the present powers under which my right hon. Friends the Minister of Health and Secretary of State for Scotland by means of Orders provide a welfare foods service for the benefit of mothers and young children in Great Britain. Originally introduced as an emergency service in war-time, the scheme continued after the end of the war and has become part of the normal welfare services for mothers and young children.

Under the scheme, as the House knows, expectant or nursing mothers and children up to 5 can get one pint of milk a day, liquid or dried, at a reduced price. In addition, they can buy concentrated orange juice, cod liver oil and vitamin tablets at roughly cost price. Mothers and children of families in need can get tokens entitling them to milk and other welfare foods free. I doubt whether there is any Member of the House who will not agree that it is right to regard this as a proper normal peace-time service, and that it is, therefore, right to put the necessary statutory powers on a permanent basis.

Clause 5 confers permanent powers on my right hon. Friends the Minister of Health and the Secretary of State for Scotland to control the maximum prices of medical supplies required for the purposes of the National Health Service Acts and to obtain information that they may require for this purpose from firms concerned with such supplies. These powers are necessary in those circumstances which arise in the National Health Service where the Health Departments are not the direct purchasers of medical supplies, but their cost is, nevertheless, borne from moneys voted by this House. The hon. Member for Sowerby (Mr. Houghton) has a great deal of experience looking into these matters.

For example, drugs are prescribed by family doctors and dispensed by chemists under the National Health Service who are then reimbursed by the Exchequer. The maximum prices charged to chemists by their suppliers are regulated by the Voluntary Price Regulation Scheme agreed with the Association of British Pharmaceutical Industry, but this voluntary scheme needs the backing of statutory powers to make it effective in the event of the refusal of a firm, possibly one which is not a member of the Association, to conform to its provisions or to provide the information upon which negotiations depend.

The powers now being made permanent are at present contained in Defence Regulation 55AB(1)(c) and Defence Regulation 55AA. They have never been used, and my right hon. Friends hope that it will not be necessary to use them. They do, however, believe that it is necessary to have them in reserve for the reasons I have given. They do not wish to retain the powers in Defence Regulation 55AA(1) itself to obtain information in respect of services required for the purposes of the National Health Service Acts. These powers are, therefore, being dropped.

The present powers extend to medical supplies generally, but as this is wider than is necessary they are now to be limited to medical supplies for the National Health Services in England, Wales, Scotland and Northern Ireland. The competent authorities for this Clause are, as I have said, the Minister of Health and the Secretary of State for Scotland. For Northern Ireland, the powers are exercisable by the Secretary of State, who may, under Clause 21, delegate them as he considers proper to an appropriate authority in the Northern Ireland Government.

Clause 6 continues the present powers of my right hon. Friends the Minister of Agriculture and the Secretary of State for Scotland to control the prices to be charged for liquid milk, but it specifically limits the powers to the prescription of maximum prices. The present powers, which derive from Defence Regulation 55AB, are used only for this purpose. We propose to take powers to control maximum prices only.

Hon. Members may remember that the need to continue the price control of milk—the only food still subject to this control—was reviewed by an independent committee—the Thorold Committee—which reported in 1962 on the remuneration of milk distributors. In view of the concentration of most of the milk distributive trade in a few hands, the Committee recommended that price control should be continued for a further period after which the question should be reconsidered, in the light of changes in the price structure which, they hoped, would make possible greater competitiveness in the trade.

The Government have accepted this recommendation, and my right hon. Friends are considering, with the milk industry, the implementation of various changes recommended by the Committee. But, as the Committee foresaw, some time must pass before decontrol of retail prices can be considered, and we are, therefore, continuing these powers, in the first instance for five years, to the end of 1969. The power may be further continued beyond that date, for periods of up to five years, by Order in Council, again subject to the affirmative Resolution of both Houses.

The next group of Clauses—that is, Clauses 7 to 15—together with the First Schedule, contain provisions supplemental to the substantive provisions which I have described in Clauses 1 to 6. I will not go through these Clauses in detail, because I do not think that any questions of policy or controversy arise on them. These are all provisions which we have thought it necessary to carry over from the disappearing emergency legislation and Defence Regulations. To take a single example, Clause 12, dealing with offences by corporations, follows the wording of Defence Regulation 91.

But I should make it clear that we have not just written the various Defence Regulation provisions into the Bill blindly. We have, in fact, looked very carefully at each provision to see whether it is really necessary to keep it or whether it could be either dropped altogether or narrowed in scope. In some cases we decided that the power could safely be allowed to lapse. For example, paragraph 1 of the Third Schedule to the 1959 Act provided that any Order made under any Defence Regulation should override any inconsistency with other Statutes or Instruments. So sweeping a provision seemed to us neithter necessary nor appropriate in peacetime legislation, and we propose that it should lapse. In other cases we have cut back the scope of the Defence Regulations provisions. For example, the powers of entry and search under warrant issued by a justice of the peace, which are proposed in the First Schedule to the Bill, are much more limited than the present Defence Regulation powers of entry and inspection of premises on a warrant issued by a departmental official.

So much for Part I of the Bill, which is wholly concerned with powers at present exercised under Defence Regulations. Part II of the Bill continues in force two further sets of powers.

Clause 16 continues after the end of 1964 the powers of the Minister of Transport to control the transfer and mortgage of second-hand British ships. These powers were originally granted by the Ships and Aircraft (Transfer Restriction) Act, 1939. They were very wide in scope—as befitted wartime powers—but the 1959 Act severely restricted their scope and limited their life to the end of 1964. These powers are complementary to those concerning new ship construction, and to the Board of Trade's powers of control over strategic goods outside the United Kingdom, both of which I described under Clause 3 of the Bill. We propose that they should be continued on exactly the same basis as the powers contained in Clause 3; that is, to the end of 1969, with provision for extension for further periods of up to five years by an Order in Council subject to affirmative Resolution of both Houses.

As they are at present administered, the exercise of the powers is not burdensome either to the Government or to the shipping industry; and it is our policy, as it is with other items on the strategic embargo, to keep the restrictions enforced by these powers to the minimum.

Finally, Clause 17 provides for the continuation of certain of the Board of Trade's powers in relation to jute goods. The power to trade in raw jute, which has not been exercised since 1954, is being given up, as is also the power to produce jute goods. This Clause provides for the retention, until the end of 1969, of the remaining powers to acquire and dispose of jute bags, jute cloth and jute yarn.

As the House knows, public trading in jute goods, through the Board of Trade Jute Control, is the means used to protect the jute industry in the interest of employment in Dundee and district, where the industry is concentrated. A good deal has been done, and is continuing to be done, to diversify Dundee's industrial life—and this is the right way to solve the problem—but there is still a need to provide some protection for the jute industry in the interest of local employment.

That is the last of the Clauses of substance in the Bill, and there is little more that I need say. As is explained in the Financial Memorandum on the front of the Bill, the Bill gives the Government no powers additional to those which they have already, and it will accordingly involve no additional expenditure. Indeed, the only item in the Bill which involves any substantial expenditure is the Welfare Foods Scheme.

I trust that the House will accept the Bill in the spirit in which it is presented—that is, as a realistic and practical way of dealing after the present year with these last survivors of the Defence Regulations and with certain other temporary powers.