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Commons Chamber

Volume 440: debated on Wednesday 16 July 1947

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House Of Commons

Wednesday, 16th July, 1947

The House met at Half past Two o'clock


[Mr. SPEAKER in the Chair]

Oral Answers To Questions

Royal Air Force

Levies, Aden (Duties)


asked the Secretary of State for Air what is the present strength of the levies in Aden; what duties they perform; and whether he is satisfied that they fulfil their purpose.

The Aden levies assist in the local defence of the Protectorate, and in guarding the stations of the R.A.F. I am glad to assure my hon. Friend that they carry out these duties to the general satisfaction of all concerned. It would not be in accordance with present practice to disclose their strength.

Is my right hon. Friend aware that in a recent disturbance in Aden these levies were not used, and that it seems likely that Arab levies are not to be used against Arabs? Is he further aware that there is a rumour that the number of levies is to be further increased?

I have not had any of the information of which my hon. Friend speaks, but if he will send it to me I will have it considered. My information is that up to the present these levies have done a good job.

Aircraftman's Death (Departmental Error)


asked the Secretary of State for Air if he has now considered the details which have been sent to him concerning the treatment meted out to L.A.C. Streatfield, deceased; and if he will make a statement.

Yes, Sir. I am grateful to the hon. Member for bringing the sad case of L.A.C. Streatfield to my attention, and I should like to express my deep sympathy with his parents in the loss which they have sustained. The facts are as follow: L.A.C. Streatfield arrived from India on 7th of May. On 8th of May he was sent on a month's disembarkation leave. Ten days later he fell ill and his father called in a local doctor. On 21st of May, he was admitted to one of the civil hospitals of the Ministry of Health's Emergency Medical Service, where he died that night. The cause of death was malaria, from which L.A.C. Streatfield had previously suffered. Letters of sympathy were sent to the parents by Streatfield's commanding officer, and by the Air Council but, owing to a mistake in the Record Office, other units concerned were not notified of his death. In consequence, Mr. and Mrs. Streatfield subsequently received a notice of extension of leave, and a posting notice, and the civil police called to inquire why he had not rejoined his unit. Disciplinary action will be taken if individual responsibility for the error can be traced, and I will do everything I can to ensure that no such thing shall happen again.

While thanking the right hon. Gentleman for his full answer, may I ask him whether, in view of the inhuman treatment of the family, it is possible for him to write a personal apology to the parents?

I will certainly do as the hon. Member has suggested. These accidents in a big administration must happen, but this is the first of its kind there has been in the Air Force.

Married Quarters, Syerston


asked the Secretary of State for Air why none of the 60 married quarters being built at the R.A.F. station, Syerston, are to be allotted to officers.

All the married quarters now being built at Syerston are of the type designed for airmen, and they are all required for airmen and their wives and families. Several proposals have been and are being considered for the provision of officers' married quarters, but I regret that so far the difficulties have not been overcome.

Is the right hon. Gentleman aware that this aerodrome is in a very sparsely populated rural area, and that married officers have the greatest difficulty in finding accommodation for their wives? Is it the policy of the Air Ministry that married quarters should be built only for other ranks?

Not at all. In many places we have managed to arrange for married quarters for officers. There are great difficulties. But I am well aware of the hardship at Syerston, and I hope that some arrangement can be made.

Free Travel Warrants


asked the Secretary of State for Air why the number of free travel vouchers has been reduced from four a year to three.

During the war, men and women in the Services were given four free warrants a year when they went on leave. When the pay of the Services was improved, it was felt that the heavy cost of this wartime concession could no longer be justified, and in 1946 the number of free warrants was reduced from four to three. Pending a final decision, instructions have been given that during the present year only two free warrants should be issued.

Does not my right hon. Friend agree that if the Government insist on retaining Forces far larger than we can afford they should at least treat them decently, and not make petty inroads into this wartime concession? Will he take steps to see that the policy is reversed?

I would remind my hon. Friend that conditions now are not the same as they were when this wartime concession was introduced, and that the cost is very heavy. One extra warrant given to the Royal Air Force costs the nation£500,000.

Would my right hon. Friend bear in mind that this cut is most inequitable as between man and man, since the amount spent on going home depends on where the man's home happens to be?

Yes, Sir, but it also depends on the posting. Broadly, I think it evens itself out although, of course, there must be some inequalities.

In view of the answer which the right hon. Gentleman has given, can he say whether reduced fare passes are still being issued?

Civil Aviation

Boac Atlantic Services (Base)


asked the Parliamentary Secretary to the Ministry of Civil Aviation, in view of the operational facilities available in this country for U.S. aircraft, which are equal to, if not greater than, those in European countries already operating such aircraft successfully, if he will now consider issuing a direction to B.O.A.C., in accordance with his statutory powers and in the national interest and to save dollars, to transfer its operational base for the Atlantic services from Montreal to England.

No, Sir. The desirability of transferring this base to the United Kingdom at the earliest possible date is, however, fully appreciated, and I can assure the hon. Member that this question is receiving very close attention, in consultation with the corporation.

Does the Parliamentary Secretary realise that R.A.F. "C" type hangars are perfectly capable of accommodating Constellation aircraft? Can there not be co-operation between the Parliamentary Secretary and the Secretary of State for Air, to ensure that a suitable aerodrome is made available immediately? Further, is the Parliamentary Secretary aware that the real cause of the present disinclination of B.O.A.C. to move the base to England is that senior staff whose opinions are asked do not wish to give up their luxurious living in Montreal at the present time?

Perhaps I might deal with the second part of the supplementary question first. It contains an unfair imputation upon the staff concerned, and so far as I have been able to ascertain there is no evidence to support it. So far as the first part of the supplementary question is concerned, there is a very close co-operation between the Secretary of State for Air and my noble Friend. The hon. Member was good enough to suggest one aerodrome where these operations might take place. Consultations took place and the Air Force were prepared to make arrangements. It is equally true that if a large number of workmen are concerned they must have housing accommodation. In the case of the Kemble aerodrome, there was no housing accommodation for the workmen.

Scottish Advisory Council


asked the Parliamentary Secretary to the Ministry of Civil Aviation who is the representative of the Scottish Members of Parliament on the Scottish Advisory Council on Civil Aviation.

Scottish Members of Parliament, as such, are not represented on this council.

Viking And Dakota Aircraft (Operatingcosts)


asked the Parliamentary Secretary to the Ministry of Civil Aviation the operating cost of the Viking aircraft and that of the Dakota, shown so as to draw a proper comparison, having regard to their different carrying capacities.

The cost of operating either type of aircraft depends upon the routes concerned and the operating conditions. The Viking has only been in regular operation for a comparatively short period, but experience already shows that the Viking carrying 24 passengers does not cost more per aircraft mile to operate than a Dakota carrying 18 passengers over a similar range.

Are we to assume from that answer that the Viking is not a very expensive aircraft to operate, and that the allegation made by an American representative a short time ago is without foundation?

I am not quite certain to which American statement the hon. Member refers. It is true, and it is no good hiding the fact, that the Viking is an adaptation of a wartime machine which was not altogether suitable for transport purposes. It is more costly to operate than one would desire. It is an interim type of aircraft.

Argentina (Passports, Retention)


asked the Secretary of State for Foreign Affairs whether he is aware that the Argentine immigration authorities take British passports away from British subjects entering employment in the Argentine Republic and retain these passports for 12 months; and what representations he proposes to make to the Argentine Government to prevent the continuance of this irregularity.

I am informed that the Argentine authorities retain the passports of all persons who enter Argentina with tourist visas and do not return them until the tourists leave the country again. Persons who enter as tourists, but who decide to remain, can only regain their passports if they can produce a permanent residence permit, which, I understand, they can only acquire after spending twelve months in Argentina. His Majesty's Government regard as open to grave objection the practice of retaining the passports of British subjects, and representations have been made to the Argentine Government.

Can the hon. Gentleman say when those representations were made? Is he aware that the practice has gone on for some considerable time and that British subjects are being deprived of their passports for the whole 12 months?

Without notice, I cannot give the date of the representation. We are not satisfied with the position and we shall continue doing what we can.

If British subjects have been deprived of their passports, are they receiving any assistance during that time from the Embassy?


Agrarian Reform (Draft Ordinance)


asked the Secretary of State for Foreign Affairs how many farmers will be partially expropriated according to the draft ordinance for agrarian reform circulated as an appendix to C.C.G. letter ZAC/ D(47)37 of 4th June, 1947; which German authorities or interests have been consulted; and whether any objections have been lodged against the adverse effect on food and timber production which it will cause.

It is estimated that between 2,000 and 3,000 farmers in the British zone would be expropriated on the basis of the provision of the draft ordinance referred to in the question. The Zonal Advisory Council in the British zone has been consulted. The reply to the last part of the Question is that an adverse effect is not anticipated and no objections have been received.

Does the hon. Gentleman really expect the House to believe that smallholdings on this poor land will produce the same result as on bigger farms? Also, has he considered how to maintain timber production and supplies if the forestry areas are cut down in this drastic manner?

Yes, Sir, certainly these things have been very carefully considered, but there are other factors, such as more intensive cultivation. Taking the thing as a whole, we do not expect a fall in production.

What agriculturists have been consulted apart from the Zonal Advisory Council?

When the matter was first referred to the Zonal Advisory Council, the Council contained representatives of farmers, trade unionists and so on. The present Zonal Advisory Council consists of representatives of the political parties but they are free, and are indeed urged, to consult such outside interests.


asked the Secretary of State for Foreign Affairs whether he will make available to Members copies of the Draft Ordinance of Agrarian Reform for the British zone of Germany.

Are we to be told on which date the Draft became available and whether the making of it available to Members of Parliament was already decided, or was it not until the Question was put on the Paper?

Russian Child (Application)


asked the Secretary of State for Foreign Affairs what reply he has made to the request from the Soviet Foreign Ministry for the release of seven-year-old Victor Mukhamedov whose address is c/o Welfare Office Kindergarten, Klingenberg, Germany, and his return to his mother Mme. Maria Mukhamedova; and what steps are being taken to fulfil this request.

This matter is already being investigated, and a reply will be sent as soon as a report is received from the British authorities in Germany.

While thanking the Minister for that answer, may I ask whether he would consider investigating further charges that a number of other Soviet children are concerned in this matter? Would he investigate this matter at the same time?

I will certainly investigate it, if the hon. Member will send me information. In the case we are investigating now, may I say that the matter was not drawn to my attention by the Soviet authorities. We acted on our own initiative, as the result of Press reports in Germany.

Poland (Arrests)


asked the Secretary of State for Foreign Affairs why he recently sent a letter of protest to the Polish Government regarding certain arrests; and if he will make a statement.

My right hon. Friend has not sent any recent note to the Polish Government protesting against arrests.

Possibly my hon. Friend has misread reports in the Press to the effect that we have asked our Embassy in Warsaw for information on this question. That is not the same thing as a protest to the Government.

Has the hon. Gentleman any information with regard to Mr. Puzak, Secretary-General of the Polish Socialist Party, and one of the most respected political leaders in Poland, and to five other Socialists whose names I shall give him?

With regard to the last supplementary question about the Polish Socialists, can my hon. Friend say why he has not already dealt with the matter?

We asked for information. I am well aware that these reports have caused anxiety among my hon. Friends. My right hon. Friend has made it clear on other occasions that he deplores political arrests.

Would the Foreign Office consider exercising discretion and sending a similar letter to Greece in regard to the recent arrests?

Jewish Refugees' Camp, Aden


asked the Secretary of State for the Colonies what is the cost of the camp established for Jewish refugees in Aden and by whom it is borne; how many people live in the camp; and what steps have been taken to persuade them to return to the Yemen.

The cost of£1,700 a month is borne by the Jewish Organisation which maintains and administers the camp. Certain services, such as water, are provided free by the Government of Aden. There are about 1,700 people in the camp. The King of the Yemen has undertaken to restore to Yemeni Jews returning from Aden, their pre-existing status and rights, and arrangements were made to provide free transport and subsistence money on the journey for those willing to return. One thousand, one hundred have returned to the Yemen under this scheme since its inception in the latter part of 1946, and the movement continues.

Jamaica (Unemployment)


asked the Secretary of State for the Colonies what is the present number of unemployed persons in Jamaica; and what steps are being taken to relieve unemployment in this Colony.

With regard to the first part of this Question, I would refer the hon. Member to the reply I gave to my hon. Friend the Member for South-East St. Pancras (Dr. Jeger), on 5th March this year. No fresh information has since been received from Jamaica, but I am again consulting the Governor, and will let him know. With regard to the second part of the Question. I would refer to my reply to a similar Question by my hon. Friend the Member for East Harrow (Mr. Skinnard) on 18th June.

Has nothing been done since 5th March to relieve unemployment, and to attract men to the cement industry in Jamaica in view of the large number of young men who are discontented and unemployed?

That is a completely unwarranted assumption from my reply. If the hon. Member will turn to the reply I gave on 18th June to the hon. Member for East Harrow he will see that the Government of Jamaica are fully alive to the gravity of the problem in Jamaica.

In this connection will my right hon. Friend look at the scheme for the suggested re-settlement of Jamaican ex-Service men drawn up by a Jamaican Royal Air Force officer, which has been sent to him?

Yes, and there is a scheme already in operation for ex-Service men. In the reply to which I referred I gave information in regard to that matter.

Palestine (Bubonic Plague)


asked the Secretary of State for the Colonies, if he will give the latest information about the outbreak of bubonic plague in Palestine.

From the start of this outbreak on 26th June, up to 15th July, 15 cases were treated, only one of which was fatal. Heavy and widespread infection amongst the rat population is reported, but energetic measures have been taken, and no new cases have been notified since 8th July.


Land Settlement


asked the Secretary of State for the Colonies, how much land suitable for cultivation in Tobago is at present uncultivated; and what plans have been made by the Government of Trinidad and Tobago to assist the settlement of landless peasants on smallholdings in Tobago.

The information asked for in the first part of the Question cannot be furnished until the results of the census of 1946 have been compiled. I will write to my hon. Friend as soon as the figures are available. As regards the second part of the Question, I would refer to my reply to the Question on this subject asked today by my hon. Friend, the Member for Heston and Isleworth (Mr. W. R. Williams).


asked the Secretary of State for the Colonies, how many estates have been put up for sale in Tobago within the last five years; whether the local government has taken over any land for distribution to landless peasants with assisted purchase; and whether there are any plans for such action in the future.

I regret that the answer to the first part of this Question could not be ascertained without research into a large number of deeds. The Colonial Government have recently acquired an estate of 600 acres in Tobago with the object of establishing an agricultural experiment and demonstration centre of some 80 acres, and creating a land settlement for peasantry. There are no further plans at present for the acquisition of land for settlement.

Will my right hon. Friend satisfy himself that the rentals proposed in these cases are such as to make the development of the smallholdings a practicable proposition for peasants with small means?

I know that to be the desire of the Trinidad Government, but I will so inform them.

Steamship Service


asked the Secretary of State for the Colonies whether he is satisfied that the Government steamship service serving the island of Tobago is efficient and that its fares are as low as possible.

yes, Sir. I am aware that the two steamers in use are small in relation to the volume of traffic, but it has not yet been found possible to replace them by a larger ship, owing to the high level of shipbuilding costs.

Medical Service


asked the Secretary of State for the Colonies whether he is satisfied that there are sufficient doctors in Tobago to attend to the needs of the population; what public health service is provided by the Government; and whether he is aware that the cost of medical attention is almost prohibitive for the poor.

As the answer is rather long, I will, with my hon. Friend's permission, circulate it in the OFFICIAL REPORT.

Following is the reply:

There are four Government medical officers, three of whom are full time officers. The Russell Committee recommended in 1944 that in addition to the three medical officers then employed, there should be a full-time qualified county medical officer of health and a house surgeon for the principal hospital. Since then an additional part-time medical officer has been appointed, and I am making inquiries whether further steps have been taken. The nursing staff numbers nine, and includes a matron and three health visitors; there are five sanitary inspectors. The Colonial Government provide one 60-bedded hospital, which can be expanded to 70 beds, and 12 health offices and dispensaries. An intensive campaign against yaws, hookworm and malaria is being carried out at the present time.

As regards the last part of my hon. Friend's Question, paupers and old age pensioners receive free medical treatment. Persons in possession of a poverty certificate from the local administration, or from the public assistance authorities, pay 15. the receipt for which entitles them to medical treatment for a fortnight.

Public Works Department (Employees)


asked the Secretary of State for the Colonies what pension provision is made for manual workers employed by the public works department in Tobago; whether these workers obtain regular all-the-year-round employment; and how wages paid by the public works department compare with those for similar work paid by private employers.

Manual workers employed by the public works department in Tobago, whose posts are scheduled under the Provident Fund Ordinance, are entitled on retirement to provident fund benefits. The remainder are eligible for gratuities under the regulations applicable to all daily paid employees of Government who do not contribute to the provident fund. A number of these workers are regularly employed, the remainder are employed on a casual basis as and when work is available. There are no private employers of labour in Tobago engaged on large scale building and roadmaking projects, such as are undertaken by the public works department, and a comparison with private employment is, therefore, not possible.

Will my right hon. Friend take further steps to satisfy him-self that the guaranteed week is granted in this case as far as possible in order that subsequent claims for gratuity and old age pensions shall not be invalidated because of this non-constant work?

I will look into that point, but this island, and other islands in that part of the world, suffer from under-employment and the solution is very difficult.

Will the right hon. Gentleman say what it is that brings Tobago into the news so extensively and so suddenly.

African Colonies

Strike, Nigeria (Disorder)


asked the Secretary of State for the Colonies whether he will make a statement on the shooting of strikers by the police at Buruta, Nigeria; what was the cause of the strike and the reason for police opening fire; and what casualties there were among the strikers.


asked the Secretary of State for the Colonies if he has any statement to make on the strike of United Africa Company's workers at Buruta, Nigeria, and on the disorders which resulted in many strikers being wounded in a clash with the police.

A strike of labourers employed by the United Africa Company at Burutu started on 14th June following a wages dispute. On 21st June a large crowd formed and adopted a menacing attitude. Four employees of the company were set upon, and severely beaten. After the crowd had refused to disperse, in spite of repeated warnings, an unsucessful attempt was made to break it up without the use of firearms, and the order to fire was only given after the police had been attacked with large stones and other missiles. Only two rounds were fired, as a result of which two men were wounded in the leg. The wages dispute is being inquired into by a representative of the Nigerian Labour Department.

Will the Minister take steps to put a stop to any such brutal treatment of the workers? Is the Minister aware that the hon. Member for Dumbarton Burghs (Mr. Kirkwood) and I were once accused of stone throwing when it was a deliberate lie? I appeal to the Minister to make certain that never again will firearms be used on workers who are striking for decent conditions. I think it is shameful.

If my hon. Friend would acquaint himself with the facts, I think he would be satisfied that this is not an instance of brutal attacks on workers. Rather it was the response, after long provocation by workers, of the forces of police on the spot. Immediately the facts were brought to my notice I caused an inquiry to be made, and had the fullest reports from Nigeria. I must exonerate completely those responsible for ordering it. It was provocation on the workers' side that led to it.

Will the right hon. Gentleman state whether in making this impartial inquiry he did not know full well that the answer he has given about strikers provoking the trouble has been a familiar story in this country for the last half-century?

I am familiar with large numbers of industrial disputes in the Colonies, and naturally because of my own suspicion, I should inquire most carefully as to the causes of trouble of this kind. I made the fullest inquiries possible, and I am satisfied that it was provocation on the workers side which caused this trouble.

Will the Minister appoint from this House a special inquiry into this question? Is he aware that I had my head bashed in two or three places by a policeman's baton, and then got three months for assaulting the police?

How many statements did my right hon. Friend obtain from the strikers, and how much of the information came from the other side in his inquiry?

I have the completest confidence in the Governor, and I have taken my reports from the Government of Nigeria, and from various sources which were open to me. I am completely satisfied with regard to the facts.

Perhaps the right hon. Gentleman did not understand the question I put, because conversation was going on around him. I asked how many statements were received from the strikers?

Uganda (Taxation)


asked the Secretary of State for the Colonies what are the existing rates of taxation on Europeans in Uganda.

As the answer includes a number of figures, I will, with my hon. Friend's permission, circulate it in the OFFICIAL REPORT.

Following is the answer:

There are two forms of direct taxation on Europeans in Uganda; (1) A nonnative poll tax, which is levied at the rate of£3 per annum on incomes which do not exceed£200 per annum, and at the rate of£5 per annum on incomes exceeding£200 per annum. Women with incomes of under£150 per annum are

exempt from payment of the tax, as are persons under the age of 18 years. (2) An income tax, additional to the nonnative poll tax, which is levied at the following rates:

Where the chargeable income does not exceed£250–2s. for every pound.
Where the chargeable income exceeds£250–2s. with the addition of one-eighth of a cent. for every pound of the chargeable income in excess of£250 up to a maximum rate of 5s. for every pound thereof.
Where the income exceeds£3,000—An additional tax (Surtax) at the rate of 4s. with the addition of one-twentieth of a cent. for every pound of the total income in excess of£3,000 up to a maximum rate of shs. 7/50 for every pound in excess of£3,000 of the total income.

In calculating the chargeable income the following personal deductions are allowed:— £350 for a man,£150 for wife,£75 for first child and£60 in respect of each subsequent child. There are also the usual deductions for dependants (other than children) life insurance and superannuation.


asked the Secretary of State for the Colonies what is the estimated income of a peasant in Uganda farming one standard plot of land; and what is the amount of taxation to which he is subjected.

I regret that the information sought in the first part of the Question is not available in the Colonial Office. I am asking the Governor of Uganda to supply it and will write to my hon. Friend when it is received. In regard to the second part of the Question, the taxes for which the African peasant in Uganda is liable (including local taxation) vary according to District, area and tribe from 12s. to 47s. per annum.

Is my right hon. Friend aware that the information I am getting is that the poll tax, both of the Uganda main Government and the Kabaka's Government, amounts to 25s. per head, and that other levies amount to 18s. per head, making£2 3s., and that the average income of a peasant from a plot of land is£4 a year?

It is difficult for figures to be used in that way. If my hon. Friend will supply me with the information, I will check it against the figures in my possession.

Will my right hon. Friend bear in mind that I have asked him to have an interview with the Assistant Chancellor of the Kabaka's Government, who was dismissed for making recommendations for improvements and that I am still waiting for that interview.

In view of the interest of the House in this matter, will the right hon. Gentleman see that this information is published in HANSARD, so that we may all know what it is?

Royal Navy (Free Travel Warrants)


asked the Parliamentary Secretary to the Admiralty if he is aware that the reduction of free railway warrants for members of the Royal Navy to two per year is causing great hardship to them, especially to the junior ratings who live a long way from their homes; and if he will take steps to improve the position by granting more warrants.

The Fleet was warned last month that it might be necessary to reduce the number of free railway warrants for leave from three to two during the current year and that pending a decision only two were to be issued. The question of free leave travel is still under consideration, however, and no final decision has yet been made.

Does my hon. Friend realise that these seasonal leaves are given for ten days each, and that it is a great hardship, particularly to lower ratings, not to have these railway tickets, because they cannot, in many instances, get home at all without them?

I quite realise that. I have been the possessor of free warrants in the past. As I have said, consideration is still being given to the matter. I would point out to the House that there were no free railway warrants given between the two wars, and that this is an advantage over what applied then. In addition to free railway warrants, members of the three Services can travel at half fare when going on leave.

Is my hon. Friend aware that the new pay code was approved by this House on the understanding that facilities such as this would be fully main- tained, and that this looks like giving with one hand and taking away with the other?

It cannot be said that the new pay code was conditional upon four free railway warrants being given each year. It was given on the understanding that it would make the rates of pay and conditions in the Services more comparable with those in industry.

When the Civil Lord speaks of the number of free warrants going down to two in the current year, is he referring to the calendar year or the present financial year?

Is my hon. Friend aware that unlike those of the Army and Air Force, all the manning bases of the Navy are in the South of England, and that this falls with particular hardship on Scottish ratings and ratings from the North of England? Would he consider that as an additional argument when considering the question of a manning base in Scotland?

I hope that the question of a manning base in Scotland will not be judged in acordance with the number of free railway warrants we issue. The point my hon. Friend has raised is certainly borne in mind by the Admiralty when these matters are being discussed.

Post Office (Collections And Deliveries)


asked the Postmaster-General when he expects that new plates showing the revised timing of postal collections will be affixed to pillar boxes in Berkshire.

I am sorry that because of the sudden abnormal demand resulting from the recent changes in postal services, it has not yet been possible to provide new plates for pillar boxes in Berkshire, but I am assured that the revised timings of the postal collections should now be shown by means of temporary plates in all cases. New permanent plates will be provided as soon as possible.


asked the Postmaster General whether he has made any further arrangements for the collection and delivery of letters posted at the House of Commons late at night.

A collection is now being made at 7.45–8.o p.m. for first delivery on the following weekday throughout England and Wales. A supplementary collection is made after the rising of the House. On those occasions when the House is still sitting at 1.0 a.m. an additional supplementary collection is made at that hour. Letters for addresses in London, and posted in time for supplementary collections made up to 1.0 a.m. are due to be delivered by first post.

Will the Postmaster-General say whether there is any objection to members of the public with urgent letters to post, which will not be collected from the letter boxes outside after 6.30 p.m. bringing them into the Outer Lobby and posting them there?

What is the latest time at which letters should be posted at the House for Scotland for arrival in Scotland by the first mail in the morning?

Armed Forces

Requisitioned Land (Lapsing Date)


asked the Minister of Defence what are the lapsing dates of the requisition of land held by the Services Departments under Defence Regulations 51 and 52, respectively; whether land so held will then be returned to the owner; or what methods of retention he proposes.

I have been asked to reply. For this particular purpose, the effective lapsing dates are 24th February, 1948, for Defence Regulation 51, and 31st December, 1947, for Defence Regulation 52. It is proposed, however, to introduce legislation to extend the towers for a further period.

Bombing Ranges


asked the Minister of Defence why it is necessary for the Ministry of Supply to have separate bombing ranges, in addition to those held by the R.A.F. and Fleet Air Arm; and why Service requirements cannot be further coordinated in this respect with consequent economies.

Bombing ranges are shared whenever possible. In some cases, however, no facilities are available on a Service Department range which is conveniently located and otherwise suited for the research and development work for which the Ministry of Supply is responsible.

In view of the fact that the R.A.F. still hold 265 of this large number of bombing ranges, surely it is possible for those ranges to be used by Ministry of Supply aircraft?

The real point about it is, as I have tried to explain in the last sentence of my answer, that we are doing our best to combine bombing ranges as between the Royal Air Force and the Fleet Air Arm, but as the Ministry of Supply is very largely concerned with research and experimental work, it is not so easy to combine the three sets of ranges on the same sites.

Will the right hon. Gentleman look into this a little further. It is very hard to believe that with the number of bombing ranges there at present available to the Royal Air Force, the Ministry of Supply cannot make use of them, in view of the great demand for land for other purposes?

Certain ranges are, in fact, so used by the Ministry of Supply, but that cannot be made a principle.

Releases (Revised Programme)


asked the Minister of Defence whether he is now in a position to issue a revised programme of the age and service group numbers due for release between now and 31st March, 1948; and whether it is still the intention of the Government to have 1,085,000 men in the Armed Forces on 31st March, 1948.

I have been asked to reply. It is hoped very shortly to issue a detailed programme of release from the Armed Forces, by age and service groups, up to 31st December next. As to the second part of the numbers of men it will be necessary to have in the Forces for the remainder of the present financial year, having regard to the continuing defence commitments of this country. My right hon. Friend is not yet able to say whether any variation of the figure of 1,087,000, given in the Defence White Paper issued last February, may he possible.

Does my right hon. Friend mean to say that the Government have not yet considered the implications of the reduction of the length of the conscription period from 18 to 12 months, and the consequent reduction that will mean in the strength of our Armed Forces by 31st March, 1948?

My right hon. Friend the Minister of Defence has this matter under most urgent consideration now, and it is hoped to make an early statement as to the figures for March, 1948.

In the framing of the programme to which the right hon. Gentleman has referred, in reply to the first part of the Question, will special consideration be given to the case of young men who want to start their university careers quickly, without losing a further year?

Will the consideration to which my right hon. Friend has referred take into account the fact that the foreign currency expenditure on Armed Forces of this size is very much greater than the saving proposed by the reduction of visible imports?

Is my right hon. Friend aware that we should save something like a few hundred million dollars if we were to bring men back and reduce these mysterious foreign commitments; and also that for this country to carry on these very large commitments at this moment is committing economic suicide, and that this suggestion for reducing them is the easiest way of getting rid of our adverse balance?

Food Supplies

Milk Production


asked the Minister of Food the gallonage of milk produced in May and June this year, compared with the same period last year; and the proportions used for manufacturing purposes.

Sales of milk off farms in the United Kingdom in May and June, 1947. are estimated to have been 305 million gallons, compared with 308 million gallons during the corresponding period in 1946. About 20 per cent. of the milk was used for manufacture in 1947 and 22 per cent. in 1946.

In view of that information, why was it necessary to impose such an early cut in the ordinary consumers' ration of fresh milk?

Because it was quite impossible for us to anticipate the weather conditions in the winter, and the hon. Gentleman knows that we attribute the drop to the cold weather.

Will the Minister tell the House whether any of this milk has been sent to chocolate manufacturers either for export purposes or for home consumption, and whether any of the milk has been used in a different way, including drying and processing, also to be sent abroad?

Certainly, some of the milk has been used for milk powder, for butter, cheese and condensed milk.

The hon. Gentleman should know that it is milk powder that goes into chocolate.

Is the Minister aware of the very great indignation on the part of many housewives in the West of Scotland who suffer cuts in milk while at the same time they see Italian ice-cream shops well supplied with milk for the making of ice-cream?

I can assure the hon. Member I have never failed yet. [HON. MEMBERS: "Oh."] We believe the ex-trader should be given allocations in order to carry on the trade he had before the war.

51 and 52.

asked the Minister of Food (1) if he will give an assurance that wheat imports from the dollar areas will be maintained at the maximum available irrespective of the quantities obtained from soft currency areas, in order that bread rationing may be removed at the earliest possible date;

(2) if he is yet in a position to state the likely effect of this year's harvest in the northern hemisphere on food rationing in this country.

Our aim will be to get as much wheat as possible from any source. It is too early as yet to reach any conclusions about the harvests in the northern hemisphere or about the possibility of removing bread rationing.

Does my hon. Friend still regard the removal of bread rationing as the highest food priority in her Department?

The hon. Member must realise that there are carbo-hydrates, proteins and fats to consider, and I think perhaps if I were asked as a doctor what the highest priority was, I should say fats.

Whale Meat


asked the Minister of Food what supplies of whale meat have been made available off the ration in this country; and what has been the public response.

Whale meat is being imported and distributed by private traders. Supplies on a limited scale have been imported recently, but I have no information as to the precise quantity, and it is too early to form an opinion as to the public response.

Can my hon. Friend take any steps to increase the supply and distribution of this excellent food?

Yes, certainly. We are taking steps. We have given the traders import licences amounting to 6,000 tons.

Would the Minister say, as a doctor, that whale meat is good for us?

Is the Ministry of Food giving any assistance to the public about how to cook it?

Yes. We are having experiments in our kitchens now. [Interruption.] Certainly, we always have experiments before we try anything on hon. Members opposite.

Price Controls (Bbc Announcements)


asked the Postmaster-General whether he will arrange for the B.B.C. to grant facilities for announcements with regard to the change of price controls made from time to time by the Ministry of Food.

My understanding is that under present arrangements all such changes are normally reported in the B.B.C.'s news bulletins.

If the Minister would look into the matter further, I think he would find that this is not always the case. Would he take steps to work in co-operation with the Ministry of Food in this matter to ensure that special announcements are made after news items, so that the public are aware of the price decreases and increases, as the case may be?

I was assured that that was the case. I am told that these changes have been reported in the news bulletins at least on 17 days in the last four and a half months.

Requisitioned Premises, Aberdeen


asked the Minister of Works when his Department will be getting out of the club premises at 5–7, West Craibstone Street, Aberdeen, as the premises are urgently required for occupation by the owners.

I regret that in the absence of any suitable alternative accommodation I can see no prospect of these premises being released in the near future.

is the Minister aware that the present accommodation in this club is most unsatisfactory; that they have tried everything possible to suggest alternative accommodation to the Minister; and, as they cater for 700 industrial workers, will he do everything possible to secure alternative accommodation quickly?

Certainly. I would only add to that assurance the statement that the club offered four alternative accommodations, no one of which was suitable and no one of which was large enough for the Ministry of Food office.

Agricultural Marketing Schemes (Report)


asked the Minister of Agriculture whether the committee dealing with the question of revising various marketing schemes has yet reported; and whether it is intended to make its report and the evidence available before any legislation is introduced.

No, Sir. The Committee, which, under the chairmanship of Lord Lucas, is inquiring into the Agricultural Marketing Acts, has not yet reported. It is intended to publish the Committee's report. My hon. Friend may be assured that there will be adequate time to study the report before the introduction of any legislation which in the light of the Committee's recommendations the Government may decide is needed to facilitate the marketing of agricultural and horticultural produce.

Can my hon. Friend give any indication when the Report will be available?

I anticipate that the Report should be available some time in the autumn.

As we never appear to have had a statement about the range of inquiries of this particular Committee, can we be told beforehand whether they will cover every angle of distribution, including retail, wholesale and marketing generally?

The terms of reference of this Committee were published, and I am astonished that the hon. Member appears not 'to have knowledge of them.

Commercial Docks, Grimsby


asked the Minister of Transport if he is aware that representations have been made to his Department and the Ministries of Food, Supply, Labour, and Board of Trade for the greater use of the Grimsby Commercial Docks whose trade today is approximately 40 per cent. of prewar; and, in view of the excellent facilities at these docks and the surplus labour now available, if he will set up an inter-departmental committee to investigate the possibility of their greater use.

My right hon. Friend is aware of these representations. The loss of exports of coal and of imports by the short sea routes has resulted in a reduction in the trade of Grimsby as compared with the years before the war, although there has been an improvement in the first six months of this year as compared with the corresponding period of 1946. My right hon. Friend does not think that an inter-departmental committee to consider the position of the port is required.

Will the Minister say when his Department will do something about this, because the men round this port did a very good job during the war and there is a lot of unemployment today? Surely his Ministry ought to do something for these people who are likely to be thrown out of work. Can anything he done?

Various Ministries are doing what they can to see that this port gets an increased amount of trade, but I would like to tell the hon. Gentleman than in the first six months of this year the trade of this port was about 64 per cent. of the 1938 level as against 40 per cent. during last year.

Orders Of The Day

Finance Bill

As amended (in Committee and on recommittal), further considered.

New Clause—(Industrial And Provident Societies)

(1) Where the person carrying on a trade or business is a registered society, the profits tax payable by the society shall be computed as if no net relevant distributions to proprietors had been made in the case of that trade or business for any chargeable accounting period.

(2) For the purposes of this section, the expression "registered society" means a society registered under the Industrial and Provident Societies Acts, 1893 to 1928, or under the enactments in force in Northern Ireland, known as the Industrial and Provident Societies Acts (Northern Ireland), 1893 to 1929. —[ Mr. Glenvil Hall.]

Brought up, and read the First time.

3.20 p.m.

I beg to move, "That the Clause be read a Second time."

This new Clause deals with industrial and provident societies. It provides that these societies should be charged the Profits Tax at the rate of 5 per cent., that is the lower rate, instead of the higher rate, namely 12½ per cent. The treatment of these societies was raised during the Committee stage of this Bill in the Debate on Clause 35, which deals with building societies, and a request was then made by certain hon. Members that industrial and provident societies should receive equal treatment with building societies.

The House will have noticed that building societies previously paid 1½ per cent., and that now, under the terms of this Bill, they will pay 3 per cent.; but that 3 per cent. has to be paid on profits before and not after deducting interest on loans or deposits. The 5 per cent. for industrial and provident societies, which it is proposed to incorporate in the Bill, will be computed on the ordinary basis, that is, after deducting loan but1not share interest. It may be asked by hon. Members opposite why the Co-operative societies, who are the chief organisations to benefit by this change, should be permitted to pay at the lower rate rather than the higher, and the answer is that the share capital of these societies is not analogous to the ordinary share capital of commercial trading concerns. The lower rate will benefit largely small holdings of shares, and these shares are a sign of membership in the particular Co-operative society concerned.

I think that only about 20 per cent. of the share capital invested in this way is actually used to finance trading activities. The great bulk of it—I am told it amounts to something like 80 per cent. —is passed on to the Wholesale Society and invested by them, mostly in Government securities. Therefore it can be said that investments of this kind, that is, shares in Co-operative societies of this nature, are more investments accepted to encourage thrift than for use in the society's business. Investments of this kind take their place with those in many other corporations like those in a savings bank, and there is a limit, namely £200, placed on the amount which any individual can invest. Many of the members leave the interest which accrues to them to accumulate and be added to their holding, and do not normally withdraw it as and when it becomes due.

If the House assents that these features are there and that they do mark off industrial and provident societies from ordinary trading concerns, it does, I think, put them in a special category of their own, so that the dividends on their share capital is more akin to fixed interest on loan capital than to dividends on share capital in an ordinary company. Interest on loan capital is allowable as a deduction in computing profits for Profits Tax purposes, and does not rank as a distribution attracting the 12½ per cent. tax. A similar problem arose in 1937, and those hon. Members who were in the House then will recall the discussions that took place. The problem arose over building societies, and it was pointed out that there was little distinction between the share and loan capital of these societies, and, in that instance, by general agreement in all parts of the House, the situation was met by a special provision which limited the Profits Tax for such societies. As I have reminded the House, the Profits Tax has been 1½ per cent, up to now for building societies, and it is now proposed that it should be raised to 3 per cent.

When we had the discussion on the Committee stage, the Chancellor the Exchequer, after listening to the Debate, agreed that there was a case which should be considered. He has, in the interval, looked at it again, and has come to the conclusion that it will be fair and just to place these provident and industrial societies in this category of their own and to allow them to pay at the rate of 5 per cent. rather than the full.rate of 12½ per cent. The House will see that this is a compromise. My right hon. Friend has not accepted the suggestion that they should be placed exactly on all fours with the building societies and pay 3 per cent., but he has fixed a rate of 5 per cent. which he thinks is reasonable in the circumstances. I would add that, at the moment, they pay 5 per cent., and, therefore, so far as that is concerned, the position will really he unchanged, although I have to say that, in spite of the fact that the rates will remain the same, industrial and provident societies will, in fact, pay more under the legislation now going through the House.

If it is asked why Co-operative societies are placed in a different category from building societies, I think the short answer is that it is quite obvious from the facts and figures that they do not use this share capital to the full for trading activities, and that the greater proportion is invested mainly in Government stocks. Nevertheless, unlike building societies, some of it is used in trading activities, and, therefore, it is right, in the view of my right hon. Friend, to fix the rate at 5 per cent. This does indicate the difference between a Co-operative and a building society and also makes clear the difference between a Co-operative society and an ordinary trading concern. The financial effect, if the new Clause is accepted, will be that the cost will be about £250,000 per year, taking into account the fact that Profits Tax will be allowed as a deduction for Income Tax. The position of Co-operative societies as a whole will be that, whereas they formerly paid 5 per cent. on trading profits only, they will now pay 5 per cent. on trading profits plus investment income. The additional charge, I am informed, will be about £325,000 a year. I hope that, with that brief explanation, the House will agree with what my right hon. Friend desires to do and will accept the incorporation of the new Clause in the Bill.

This is one of the most barefaced proposals which I have ever heard made by a Government to benefit their own political friends. I listened with great interest to what the Financial Secretary said, and there was not a word in it which could justify this proposal. He started by drawing an analogy with building societies, which, as all hon. Members know, are in a wholly different position with regard to taxation, and always have been. The arrangements for taxation of building societies are on a wholly different basis, and their circumstances are totally different. The Financial Secretary, in fact, admitted that just now. He differentiated between the Co-operative societies and the building societies, saying that the position of their share and loan capital was different. He sought to justify it by saying that we are not going to give the Co-operative societies quite as good terms as we are giving to the building societies. I do not know whether hon. Members fully understand what this proposal means. It is not a proposal related to the dividend, which is the discount allowed to those who trade with the Cooperative societies; this is related to the interest received on the share capital of those who invest in Co-operative societies, and is, therefore, wholly analogous to the money invested in a company, or any other concern belonging to a private trader.

3.30 p.m.

I find it difficult to understand how the Financial Secretary has the effrontery to bring this proposal before the House. Of course, I have no doubt that he is very much encouraged by the fact that he has a very large majority. If a proposal of this sort, which is so obviously unjust, is pushed through the House. I cannot help feeling that there will be pretty serious reactions against a Government who are ready to indulge in this sort of financial trickery. I do not know whether the right hon. Gentleman thinks that because share capital in some concerns is limited to £200, they should be treated differently from concerns in which more can be invested. That is an argument which does not seem to have much justice or sense about it. I hope that the Chancellor of the Exchequer will withdraw this monstrous Clause.

I am sorry to note the unfriendly way in which this Clause is received by hon. Members opposite. The right hon. Gentleman was careful to say that there was a separate case to be made out for building societies. Perhaps, had he told the House what that separate case was, he would have given away his opposition to another separate case to be made for the Co-operative movement. The Cooperative movement consists of people who are persuaded, as a matter of policy, to lay aside for capital purposes, in the price they pay for their commodities—in the form of an automatic sale—money that shall ultimately be used for general capital or social purposes. Preferably, it would be well to use it within the Co-operative movement, and those of us who are co-operators have advocated that it should be used in that way. Instead, in large measure, it is used, as the Financial Secretary explained, in the form of investments in Government stocks. It is a very good thing for the country, as well as for the individual co-operator, that there is this method of persuading literally millions of people—nine million people are members of the Co-operative movement—that this process of raising capital should be adopted.

That is the special case for the Co-operative movement, and it is as good a case—and can, in my judgment, be better defended—as any that could be made for the building societies. I am very glad that my right hon. Friend the Chancellor has made this concession, although I am not altogether sure whether he ought not to have made the full concession for which we asked. However, he has at least made this concession. I am perfectly certain that if the Conservatives wish to make this a debating point for electoral or general political purposes, they will have the greatest difficulty in explaining why this concession, which is readily allowed in other respects with reference to the building societies, should not be allowed to this highly beneficent social process that exists in the Co-operative movement, of persuading people to buy their goods at a price that will enable, at the end of a quarterly or yearly period, a sum to be put aside, to be used as personal savings, and, ultimately, as social capital. I am certainly in favour of this proposal.

The Financial Secretary, in commending this new Clause to us, was at some pains to anticipate that some argument might devolve upon the Cooperative societies from, I think he said, this side of the House. I think his wisdom is revealed to us in anticipating the thunder from the hon. Member for West Ealing (Mr. J. Hudson), who has put before us what, of course, are the real reasons behind this proposal. First of all, nine million potential electors now demand their pound of flesh before the sands finally run out for the Socialist Government. Then there was some reference to beneficent social consequences. The hon. Gentleman did not make it clear to me, at least, just what those social consequences were going to be, unless it was that the Co-operative societies propose to lose a considerable amount of their depositors' money by investing it in the gilt-edged market in its present state of decline. I do not know whether that is what the hon. Gentleman who was thundering from the Left a minute or two ago had in mind.

There are one or two curious features about this proposal. If it is to be advanced on the ground which the Financial Secretary gave, one cannot really understand why it was not contained in the original Budget proposals. There has been a lapse of time since the introduction of the Budget which has made possible the perfect crime which is now placed before us. First of all, it allows time for the hon. Gentleman and his nine million friends to bring forward this ultimatum, because, quite obviously, that is what it is. The cheers from hon. Members opposite made it clear that the Government: had been told to stand and deliver on this matter; that there was to be no nonsense about it. Of course, the second thing that makes the crime perfect and only possible this week—and that is why it has been postponed until now—is the Government's attack on the reporting of Parliamentary Debates by the cutting down of newsprint, and it is now hoped that this matter will escape notice and will be able to be slipped through.

I submit that those are two obvious reasons for the delay in bringing this matter forward. The Financial Secretary made an endeavour to probe into the past. He told us about some discussions which took place in 1937, when, as it happens, both he and I were temporarily absent from this assembly owing to the displeasure of certain electors, but, at least, he knows that there was no Profits Tax in 1937. I think we all know that. Why did he delve into the past and bring up a Debate in 1937, unless, of course, there was something connected with the National Defence Contribution which figured in the Finance Bill of that year? At any rate, the reference seemed a little obscure.

As regards building societies, I am not going to repeat some remarks which I made during the Committee stage, when I put forward—and I was one of those who stressed it particularly—the need for building societies to have some preferential treatment in this matter. The reason l gave was the one I repeat now, that there we have an instrument which is playing a useful part, and which can play a more useful part, and will do so when there is a change of Government on the rising of the people. The Co-operative societies have made no contribution whatever to the well-being of the people.

Is the hon. and gallant Gentleman not aware that the Co-operative societies have built very many comfortable and commodious houses at a nominal rent for members of the working classes?

I hope the hon. Member, whose frequent championship of the Methil Co-operative Society in connection with the naval base at Rosyth, we know, is comfortably housed under their auspices. Nothing is more likely to soothe his temper in this House than if he can be comfortably accommodated somewhere else.

Is the hon. and gallant Gentleman not aware that after the last war, the Royal Arsenal Cooperative Society bought a whole housing estate which would have become derelict but for their support and financial aid in helping to house homeless people? Is he also not aware that within 12 miles of this House there are scores of houses which have been constructed by the Cooperative movement, and there are also hundreds of houses more which have been built because the Co-operativemovement lent money to help working people to get their own homesteads?

I have no objection to the hon. Member for Doncaster (Mr. Walkden) attempting to put himself on side, after his rough treatment by the Parliamentary Secretary to the Ministry of Food. Of course, a limited number of houses of inferior quality have been put up under those auspices, and a certain number of working class people have been enabled by the Co-operative Society to buy their own houses Where the societies do that, of course, they are performing the function of building societies, which I am now advocating, in helping people to buy their own homes. But I repeat that, by and large, the Cooperative societies have made no contribution of any real value to the social wellbeing of the people in this country. They are and have been for a great many years a convenient method of evading taxation of one kind and another. I repeat here and now that the case for the building societies rests upon a social contribution of that kind. However, as I said earlier, the moment has arrived for the perfect crime. The Press are in course of being muzzled. The nine million co-operators have now presented the pistol at the Government's head. The hon. Member for West Ealing, having refreshed himself on non-alcoholic lines has come down here in an extremely ferocious frame of mind, and it will only remain for the Opposition to stand as the champions of social improvement by resisting this discriminatory tax.

I trust hon. Members will view this matter quite impartially, I quite appreciate the incapacity of the hon. and gallant Member for Holderness (Lieut.-Commander Braithwaite) to draw a distinction between the Co-operative movement and a private company, but I wish to make that distinction clear. Before I do so, in order to disabuse the minds of hon. Members of the idea that the Co-operative movement is treated differently from any private company, I shall refer to the words of the right hon. Member for the Scottish Universities (Sir J. Anderson), who speaking in this House on 17th October, 1944, pointed out clearly:

"Since 1933 the Co-operative Societies have been taxed on the whole of their profits in the same way as limited companies. The "divi" paid by such societies, which is the sum paid as discount, rebate, dividend or bonus referred to in Subsection (3) of Section 31 of the Finance Act, 1933, is allowed as a deduction in arriving at the assessable profits in the same way as a discount or rebate allowed by a company would be deducted, and I am not prepared to propose legislation to alter this position, which is in accordance with the recommendations both of the Royal Commission on the Income Tax and the later Raeburn Comniittee."—[OFFICIAL REPORT, 17th October, 1944: Vol. 403, C. 2210.]

3.45 p.m.

Will the hon. Gentleman agree that it will not be possible for any Chancellor of the Exchequer in future to say that, if this Clause becomes law?

Not at all. I want to indicate how the Co-operative movement functions, and to give some idea of the social benefits to which the hon. and gallant Member for Holderness referred. I understand from proclamations made by the Opposition that they believe in a property-owning democracy. They may believe in it as a theory, but I suggest that in the Co-operative movement we have that idea in practice. We have 91½ million members, with a capital of approximately £310 million. That means, approximately, that 9½ million people have an average shareholding of about £40 each. If that is not approximating towards the ideal suggested by hon. Members opposite, I should like to know what is.

We should realise that right from the beginning, the Co-operative movement, apart from being a trading organisation, has been an organisation with a social mission, and consequently it has inculcated the virtues of thrift and temperance—although that may not be acceptable by a large number of Members in this House—and self-reliance. It was for that reason that, as hon. Members opposite will learn if they care to look up their own history, many of their illustrious forbears condescended to go on platforms of the Co-operative movement and lavish praise upon the social improvements which that movement was effecting. In consequence of that, the great majority of the people in this country treat the local retail society not merely as a trading organisation, but as their banking institution, with the result that we find that in 1945, millions of people have not only placed deposits in the society but they have allowed their dividends and interest to accumulate within the society to such an extent that it became literally impossible for the retail societies to employ the capital placed at their disposal in trade. That is why the Financial Secretary has indicated that out of a total capital of £310 million, approximately 86 per cent. has to take on the form of investment, and slightly less than 14 per cent. is involved in the trade.

That is where we differ from the private limited liability company. The whole of the capital is involved in the trade, and the profit is assessed on the basis of their capital, but the Co-operative movement, of course, employs only about 14 per cent. in trade. The rest of it is passed on, for the most part, by the local retail society to the Co-operative wholesaler, but by law we are denied the opportunity of acquiring more than a certain number of shares in the Co-operative Wholesale Society. As a matter of fact, our shareholding in the Wholesale Society is limited by the C.W.S. itself. For every two members of the retail society, we are allowed to take up one £5 share, so that the whole of the capital in a retail society cannot be invested in the trade so far as the wholesaler is concerned. That now means that we must, therefore, invest it in the banking accounts of the Co-operative Wholesale Society. But just as a retail society cannot engage the whole of its capital for trade, neither can the C.W.S. There are enough complaints on the part of the Opposition about the gigantic development of the Co-operative movement at the present moment, but if we should engage the whole of these capital resources in trade, I think they would begin to complain more bitterly.

The hon. Member talks with such authority, and uses the word "we." Would he tell the House whether he has any interest in this Clause, and whether he has any shares in the Co-operative Society?

My shares are so infinitesimal that they would not influence any judgment or decision of mine on a matter of this kind. The investment of a member is limited to £200, and the hon. Member can imagine what interest I should receive on £200 at 2½ per cent. I think he will see it is not likely to colour my judgment in any way whatsoever. The C.W.S., or great Co-operative Wholesale Society, is unable to employ the whole of the capital placed at its disposal in trade, and the result is that, of course, it is obliged to find investments and it places great sums at the disposal of the Government—even a Tory Government, not merely a Labour Government. It likewise takes up loan stock in local corporations, and so on. Vast sums of money that we placed in investments because we could not engage it in trade, earn interest, which we pay out in interest upon the share capital; but as a local society, we make no profits on the transactions at all, because, as the local member hands it in to the retail society, so the retail society lends it to the Wholesale Society, and passes it on. Is any hon. Member opposite going to argue that because money is placed in a branch of some great banking institution that branch should be taxed? Of course, it should not. The retail society is merely being placed in the position of the branch of a bank.

Without making a long speech I want to indicate that the Bill has two intentions. The first is to prevent inflation, and the second to plough back capital into business. As we know, at the present moment, if the Bill stands as it is, without the introduction of the new Clause, instead of being anti-inflationary, it would be inflationary; because what we should be constrained to do is to prevent members of the community, those millions of people, putting money into the Co-operative societies. We should be obliged to convert the share capital into loan capital. Therefore, we should he handing out the money to the members, which, once in their hands, would become purchasing power. That would have tended toward an inflationary situation which we are endeavouring to avoid. Secondly, for the information of hon. Members who do not seem to know, I would indicate that the great majority of members of Co-operative societies permit their interest and their dividends to accumulate within the retail societies to the extent of about 65 per cent. of the amount to which they are entitled. The whole of that is used by the Co-operative movement for purposes such as I have indicated. But if this Measure were adopted without this Clause, I am afraid we should have to restrict all those prac- tices, and consequently prevent people from saving as they are at the present moment.

There are many other things I should like to say in connection with this, but conclude by reminding the House that the Co-operative movement from its inception has endeavoured to keep prices within the means of the great majority of people, and has expended and is expending substantial sums of money on education, housing, and the institution of social services to relieve the distress of its members. When private companies are ready to act on that principle, I shall be prepared to back them if they wish to receive precisely the same terms.

The very interesting picture of the activities of the Co-operative movement given by the hon. Member for North Bristol (Mr. Coldrick) is not quite complete in certain directions. I saw the very great merits of the Cooperative movement when it was being run entirely for the purposes and aims for which is was originally created. I happen to have, in the area I represent, a Co-operative with a Conservative majority, and so I speak with certain backing. But the picture that the hon. Member has painted is far from complete. Near where I live in the country, one of the local Co-operatives has recently purchased a very large and handsome estate, and I have during the shooting seasons seen the managers and directors having a pleasant afternoon's shooting. That, in its way, is an admirable thing; but whether the people who have put money into that "Co-op" know it is rather different.

There seems to be a point here. A public company has to have articles and a memorandum showing the shareholders exactly for what purposes their money is to be used. I believe that one of the dangers of the "Co-op" movement—as one of its backers I put this forward seriously—is that it is has departed widely from its original aims. It has been buying cinemas, and going into every form of industry. That is probably, in its way, a good thing. But let us be quite clear about it. H it is going in for this form of competition, it should not be unduly favoured by comparison with other organisations—in undertaking things which were not its primary functions I think there is a very considerable danger that the Co-operative movement, which has, in my view, performed great and useful functions for this country, is going to lose a great deal by going on as it is, partly for the reasons I have given, and partly for the political use to which it may put its funds.

If an organisation asks people to invest in it, so that they will be able through it, to purchase their goods or any services which may be provided in the best way, and because thus they will get the best deal, then surely it should limit the uses of the enormous funds accumulated as described by the hon. Member for North Bristol. But if it is going forward into the political arena, and using that money for that purpose, it should be made known in the same way as the activities of private enterprises are known through the articles and memoranda of association.

Is not the hon. Member aware that all Co-operative members read a quarterly—sometimes, a monthly—statement made by the board of directors in great detail, and issued to the whole of the membership so that there cannot possibly be any doubt or ignorance amongst the members as to what is being done with their funds?

We are discussing a new Clause, and we are not discussing the whole history of the Co-operative movement. I think the Debate is going rather wide.

I was only replying to things which the hon. Member for North Bristol has said. I do believe that the "Co-op." is being harmed in a way by the undue favour that is being shown to it as against private enterprise.

I am a little puzzled by this. I did not have the advantage of hearing my hon. Friend move the new Clause. I have heard the last two or three speeches, which seem to be about Co-operative societies. But when I look at the marginal note of the new Clause I cannot find that there is anything about Co-operative societies in it. The marginal note is about industrial and provident societies. I should like to know from whoever is to reply to this discussion whether the bene- fits, if there are benefits, of this new Clause, are limited to Co-operative societies, or in what way the Co-operative societies become a proper object of Debate under it. I can quite see that the benefit of the Clause would go to the Co-operative societies as well. There are a lot of Cooperative societies which gives me joy. I understand that hon. Members opposite do not share my joy. But I suppose that many other organisations will benefit by this Clause that are not Co-operative societies. I understand that there are a great many organisations and associations which will be covered by such benefits as the Clause gives—associations of allotment holders, for instance, and any kind of agricultural association, and a great many clubs. I understand that hon. Members opposite are interested in clubs, and that the interest in clubs on the other side of the House is as great as the interest in Co-operative societies is on this side. It is rather a pity that something which would confer a benefit on a particular type of society is criticised and cavilled at by hon. Members opposite, because other associations they happen not to like, and whose political affiliations are obnoxious to them, may happen to benefit as well.

4.0 p.m.

I think that the hon. Member for Nelson and Colne (Mr. S. Silverman) would not have made that speech had he had the privilege, as we had, of hearing the Financial Secretary introducing the new Clause, because he would have realised that the Financial Secretary devoted the whole of his arguments, so far as I could follow them, to the justification of the position of the Co-operative societies. The right hon. Gentleman made it quite plain that it was the Co-operative societies who were the main object of this Clause and who, as I think he said, were the main beneficiaries. Very often, in these financial Debates, I have a great deal of sympathy with the Financial Secretary of the Treasury, because I am pretty certain when I see him put up to move an Amendment or a new Clause that there is not very much to be said in favour of it. I was not this time wrong.

The hon. Member for North Bristol (Mr. Coldrick) spoke from a great deal of knowledge, because he is intimately connected with the Co-operative societies of whose internal working he spoke with such authority. I have a considerable amount of sympathy with what he said. The trouble is that, as he must realise, what we are dealing with here is a tax which applies to all forms of companies. It happens to be an extremely bad tax. The trouble of which he complained when this tax is applied to the particular organisations in which he is interested, comes from the inherent badness of the tax itself. Equally hard results can be shown by those interested in other forms of industrial organisations who suffer unfairly from the incidence of a tax which 10 years ago, when the Chancellor of the Exchequer was both younger and wiser, he was himself the first to condemn.

No one on this side of the House, I am sure, would display—certainly I would not—hostility either to the object or the methods of the Co-operative societies as such. Whether they always spend their surplus money which they acquire with the utmost wisdom is not for me to say. Whether the visible results of their successful trading which we see in this House are on the same level as the admirable goods which we see displayed in their shop windows is not for me to judge; but so long as they compete with private enterprise on equal terms and without discrimination in favour of the Co-operative societies, no one on this side of the

Division No. 310.]


[4.6 p.m.

Adams, Richard (Balham)Chater, D.Fernyhough, E
Adams, W. T. (Hammersmith. South)Chetwynd, G. RFletcher, E G M (Islington, E.)
Allen, A. C. (Bosworth)Cluse, W SFollick, M.
Allen, Scholefield (Crewe)Cocks, F. SForman, J C
Anderson, A. (Motherwell)Coldrick, WFoster, W (Wigan)
Attewell, H. C.Collick, PFraser, T. (Hamilton)
Austin, H. LewisCollins, V. JGallacher, W.
Awbery, S. SColman, Miss G MGanley, Mrs C S
Ayles, W. H.Comyns, Dr. LGibbins, J
Ayrton Gould, Mrs BCove, W. GGlanville, J E. (Consett)
Balfour A.Crossman, R. H SGreenwood, Rt Hon A (Wakefield)
Barstow, P GDaggar, G.Greenwood, A W J (Heywood)
Barton, C.Dalton, Rt. Hon. H.Grenfell, D R
Battley, J. R.Davies, Edward (Burslem)Grey, C. F.
Bechervaise, A. EDavies, Ernest (Enfield)Grierson, E
Belcher, J. WDavies, Harold (Leek)Griffiths, D (Rother Valley)
Benson, G.Davies, Hadyn (St. Pancras, S W)Griffiths, Rt Hon J. (Llanelly)
Bing, G. H CDavies, R J (Westhoughton)Griffiths, W D (Moss Side)
Binns, JDeer, G.Guest, Dr. L Haden
Blackburn, A. RDelargy, H. JGunter, R. J
Blyton, W. R.Diamond, J.Guy. W. H.
Bowles, F. G. (Nuneaton)Dobbie, WHaire, John E (Wycombe)
Braddock, Mrs. E. M. ( Exch'ge)Dodds, N NHale, Leslie
Brook, D. (Halifax)Driberg, T E. N.Hall, W. G.
Brooks, T. J. (Rothwell)Dumpleton, C. WHamilton, Lieut.-Col. R
Brown, George (Belper)Edelman, M.Hannan, W (Maryhill)
Brown, T. J. (Ince)Edwards, A. (Middlesbrough, E.)Hardy, E. A.
Bruce, Maj. D. W. TEdwards, Rt. Hon. Sir C (Bedwellty)Harrison, J.
Buchanan, G.Evans, E. (Lowestoft)Hastings, Dr. Somerville
Callaghan, JamesEvans, S. N (Wednesbury)Henderson, Joseph (Ardwlck)
Carmichael, JamesEwart, R.Herbison, Miss M
Castle, Mrs. B. AFairhurst, FHicks, G.
Champion, A. J.Farthing, W JHolman, P

House is, I am sure, entitled to protest. What we see here is a remarkable example of discrimination in favour of the Cooperative societies. What the hon. Member for North Bristol has to remember—because in his speech he certainly omitted altogether to mention it—is that the whole of this tax when applied to ordinary industry is based not on how the capital is acquired or used, but entirely on the distribution that is made to the shareholders.

Once we say that the Co-operative societies or any other trading concern have not to pay the same tax on distribution to their shareholders that a grocery store next door has to pay, then we are discriminating unfairly between the two. It is because of that, that we should like to see this relief applied to all industrial concerns; in other words, we should like to have seen a bad tax never put on. We shall vote against this Clause, not because it removes from the Co-operative some of the disadvantages of a bad tax, but because it discriminates in favour of the Co-operative society by leaving the whole of the rest of private industry still to bear the results of the Chancellor's very bad second thoughts.

Question put, "That the Clause be read a Second time."

The House divided: Ayes, 232: Noes, 109.

Helmes, H. E (Hemsworth)Neal, H. (Claycross)Strauss, G. R (Lambeth, N.)
House, GNichol, Mrs M E (Bradford, N.)Stross, Dr. B
Hoy, J.Nicholls, H R (Stratford)Stubbs, A. E.
Hudson, J H. (Ealing, W.)Noel-Baker, Capt. F E (Brentford)Summerskill, Dr. Edith
Hughes, H D (Wolverhampton, W.)Oldfield, W H.Swingler, S
Janner, BOrbach, M.Sylvester, G. 0
Jay, D. P T.Palmer, A. M. F.Symonds, A. L.
Jeger, Dr S. W. (St. Pancras, S. E)Pargiter, G. A.Taylor, H. B. (Mansfield)
John, W.Parker, J.Taylor, R. J. (Morpeth)
Jones, D. T. (Hartlepools)Parkin, B. T.Taylor, Dr. S. (Barnet)
Keenan, W.Paton, J. (Norwich)Thomas, D. E. (Aberdare)
Kirby, B. V.Peart, T. F.Thorneycroft, Harry (Clayton)
Kirkwood, DPoole, Major Cecil (Lichfield)Thurtle, Ernest
Lavers, S.Popplewell, E.Tiffany, S.
Lawson, Rt Hon. J. J.Porter E. (Warrington)Timmons, J.
Lee, F (Hulme)Porter, G. (Leeds)Tilterington, M. F.
Leslie, J. R.Pryde, D. J.Tolley, L.
Lipson, D L.Randall, H. E.Turner-Samuels, M.
Lipton, Lt.-Col MRanger, J.Ungoed-Thomas, L.
Logan, D GRankin, JVernon, Maj. W F.
Longden, F.Reeves, J.Viant, S. P
Lyne, A. W.Richards, R.Walkden, E.
McAdam, W.Ridealgh, Mrs. M.Walker, G. H.
McAllister G.Robertson, J. J. (Berwick)Wallace, G. D. (Chislehurst)
McEntee, V. Lt.Rogers, G. H. R.Watkins, T. E.
McGhee, H. G.Ross, William (Kilmarnock)Watson, W. M.
Mack, J. O.Royle, C.Webb, M. (Bradford, C.)
McKay, J. (Wallsend)Scollan, T.Wells, P. L. (Faversham)
McKinlay, A SScott-Elliot, WWest, D. G.
Maclean, N (Govan)Segal, Dr. S.Whiteley, Rt. Hon. W.
McLeavy, FSharp, GranvilleWilkes, L
Mainwaring, W H.Shurmer, P.Wilkins, W. A.
Mann, Mrs. J.Silverman, J. (Erdington)Willey, O G. (Cleveland)
Manning, C. (Camberwell, N.)Silverman, S S. (Nelson)Williams,?. J. (Neath)
Manning, Mrs. L. (Epping)Simmons, C. J.Williams, J. L. (Kelvingrove)
Medland, H M.Skeffington, A. M Williams,. Rt. Hon. T. (Don Valley)
Middleton, Mrs LSkinnard, F. W.Williams, W. R. (Heston)
Mikardo, IanSmith, H. N (Nottingham, S.)Willis, E.
Mitchison, G. R.Smith, S. H. (Hull, S.W.)Wills, Mrs. E A
Monslow, W.Snow, Capt. J W.Woods, G. S.
Morris, P (Swansea, W.)Sorensen, R. W.Wyatt, W.
Mort, D. L.Soskice, Maj. Sir FYates, V. F.
Moyle, A.Sparks, J. A.Zilliacus, K.
Nally, W.Stamford, W.
Naylor, T. E.Stewart, Michael (Fulham, E.)TELLERS FOR THE AYES.
Mr. Pearson, and Mr. Dalnes:


Amory, D. HeathcoatHannon, Sir P (Moseley)Osborne, C.
Anderson, Rt. Hon. Sir J. (Scot Univ)Headlam, Lieut-Col. Rt. Hon. Sir CPeake. Rt Hon. O
Assheton, Rt. Hon. R.Hollis, M. C.Peto, Brig C. H. M
Astor, Hon. MHolmes, Sir J. Stanley (Harwich)Pickthorn, K.
Baldwin, A. EHope, Lord JPonsonby, Col. C. E.
Beamish, Maj T V. HHudson, Rt Hon R. S. (Southport)Prescott, Stanley
Birch, NigelHulbert, Wing-Cdr N. J.Price-White, Lt.-Col. D.
Boothby, RHutchison, Col. J. R (Glasgow, C)Reed, Sir S. (Aylesbury)
Bossom, A. C.Jarvis, Sir J.Reid, Rt. Hon. J. S. C. (Hillhead)
Braithwaite, Lt.-Comdr J GKeeling, E H.Roberts, Emrys (Merioneth)
Bromley-Davenport, Lt.-Col. WKerr, Sir J GrahamRoberts, H. (Handsworth)
Buchan-Hepburn, P G. T.Lambert, Hon. G.Roberts, Maj. P. G (Ecclesall)
Byers, FrankLancaster, Col. C. G.Roberts, W (Cumberland, N.)
Channon, H.Law, Rt. Hon. R. K.Robinson, Wing-Comdr. Roland
Clarke, Col R SLinstead, H NRopner, Col L
Clifton-Browne, Lt.-Col GLloyd, Selwyn (Wirral)Sanderson, Sir F
Conant, Maj. R. J. ELucas, Major Sir JSavory, Prof. D L
Cooper-Key, E. M.Lucas-Tooth, Sir HShepherd, W S. (Bucklow)
Crookshank, Capt. Rt. Hon. H. F. C.Lyttelton, Rt. Hon. OSmithers, Sir W.
Crosthwaite-Eyre, Col. O. E.Macdonald, Sir P. (I of Wight)Spearman, A. C. M
Crowder, Capt. John EMcKie, J. H (Galloway)Stanley, Rt. Hon. O
Cuthbert, W. N.Maclay, Hon. J. SStoddart-Scott, Col. M
Davidson, ViscountessMacLeod, JStrauss, H. G. (English Universities)
Davies, Clement (Montgomery)Macmillan, Rt. Hon. Harold (Bromley)Studholme, H G
Dodds-Parker, A. DMacpherson, N (Dumfries)Thorneycroft, G. E. P. (Monmouth)
Donner, Sqn.-Ldr P WMaitland, Comdr. J. W.Touche, G. C.
Dower, Lt -Col A V G. (Penrith)Manningham-Buller, R ETurton, R. H.
Drayson, G BMarples, A. EVane, W. M F.
Drewe, C.Marsden, Capt. AWadsworth, G.
Dugdale, Maj. Sir T. (Richmond)Marshall. D (Bodmin)Walker-Smith, D
Eden, Rt. Hon AMollor, Sir J.Wheatley, Colonel M. J.
Fleming, Sqn.-Ldr. E. L.Morris, Hopkin (Carmarthen)Williams, Gerald (Tonbridge)
Fletcher, W (Bury)Morrison, Rt. Hon. W. S. (Cirencester)Willoughby de Eresby, Lord
Gammans, L. D.Mott-Radclyffe, Maj. C. E.
Glyn, Sir RNeven-Spence, Sir BTELLERS FOR THE NOES:
Grant, LadyNicholson, GMajor Ramsay and
Gridley, Sir ANoble, Comdr. A, H. PLieut -Colonel Thorp.
Grimston, R VOrr-Ewing, I. L

Clause read a Second time, and added to the Bill.

New Clause—(Amendment Of Limit On Amount Allowable As Deduction In Respect Of Directors' Remuneration)

In paragraph 11 of the Fourth Schedule to the Finance Act, 1937 (which limits the amount of the deduction to he allowed in respect of the remuneration of certain directors in computing for the purposes of profits tax the profits arising from a trade or business carried on by a company in which the directors have a controlling interest), for the words "fifteen hundred pounds" wherever those words occur there shall be substituted the words "two thousand five hundred pounds." —[ The Solicitor-General.]

Brought up, and read the First time.

4.15 p.m.

I beg to move, "That the Clause be read a Second time."

Hon. Members will know that the Profits Tax is really assessed on the principles of the National Defence Contribution, to which it is a successor. The 1937 Act, which governs the basis of National Defence Contribution, lays it down, in paragraph 11 of the Fourth Schedule, that the amount which may be deducted, in computing profits as remuneration of directors other than whole-time service directors not earning more than 5 per cent. of the ordinary share capital, in the case of director-controlled companies, is not to exceed £1,500 or 15 per cent. of the profits, subject to an overall limit of £15,000. The £1,500 will, of course, apply only to small companies whose profits are not more than £10,000. It was represented during the Committee stage that in present circumstances the limit ought to be raised, and this Clause seeks to raise it to £2,500. The circumstances which give rise to the necessity for a change are the alteration in the cost of living, and that kind of circumstance. This Clause gives effect to a suggestion which originated from hon. Members opposite.

I do not know whether it is your intention, Mr. Speaker, to call the Amendment to the proposed Clause stand ing in the name of my hon. Friend the Member for Chippenham (Mr. Eccles).

Yes, but I cannot do so until the Clause has been read a Second time. When it has been read a Second time, I shall call the Amendment.

I am much obliged, because that being so, I will postpone the remarks I wished to make, except to thank the right hon. Gentleman for having met us halfway in what we asked. We shall have an opportunity to discuss the other half on the Amendment.

As I understand it, the figures in the Finance Act, 1937, are £1,500 or 15 per cent, of the net profits, whichever is the greater, subject to the overriding maximum of £15,000, and that this allowance does not apply to full-time working directors. Therefore, the whole of this sum is available to part-time directors, but not to full-time directors. In view of that, I should have thought this Clause needed a little more explanation. In any case, it will affect only very small companies.

The intention is that it shall affect only small companies. We have two upper limits, the 15 per cent. or the £1,500, and the limit of £1,500 will apply only where the 15 per cent. is less. Director-controlled companies which are very small, are very similar to partnerships, and this Clause is designed to affect these sort of small companies. After all, this has been part of our taxation legislation since 1937, and all we are doing is to alter the limit. We feel that we have hit on the right limit in the case of the small company, and that we have gone a proper distance towards meeting the suggestions which have been made.

Question put, and agreed to.

Clause read a Second time.

I beg to move, as an Amendment to the proposed Clause. in line 7, at the end, to add:

"and for the words 'fifteen thousand pounds,' there shall be substituted the words 'twenty-five thousand pounds.'"
As I understood the Solicitor-General when we were discussing this Clause, his intention is merely to alter the situation for small companies. If he will cast his mind back, he will remember that we tried at an earlier stage to make a case for all companies. That case was based on the very simple premise, that the value of money has completely changed. Whether we buy services or goods, we have to pay much more—very often double—than we paid before the war. We feel that in the case of director controlled companies, if the Government are going to make a concession, they must make a concession to cover all. No reason has been advanced from the Government Front Bench as to why only small companies should be covered. We want all companies, big or small, to get the same concession in view of the change in the value of money So far as I know, it will not cost the Government very much, and it seems only elementary justice that where circumstances have changed, and the Government admit that, they should make their concessions cover every section of industry, and not only one section

We have carefully considered the suggestion made in this Amendment. The new Clause was the result of our reflection on all the arguments which were adduced and which, as the hon. and gallant Member for New Forest and Christchurch (Colonel Crosthwaite-Eyre) has just said, were directed both to the lower and upper limit. The suggestion was that both should be altered, and what we have proposed is a compromise which affects the lower limit. The £15,000 will affect only the very large director-controlled companies whose profits exceed £100,000. It is a question of degree; the line has to be drawn somewhere, and the question is whether, in the case of the £15,000 limit, it can be said that circumstances require that that should be revised. In the case of the very small concern it is felt that that, being rather like a partnership, and having regard to the changed value of money, is not adequate. But we do not think that the same considerations can be urged with regard to what we consider a generous allowance. It will apply only to companies which are director-controlled, and whose profits exceed £100,000. I am very sorry to say that we feel that no case has been made out with regard to the upper limit, and I must therefore ask the House not to accept the Amendment

The explanation of the hon. and learned Gentleman is not very satisfactory. If we base the change in the figure in this Clause on the change in the value of money, then the value 9f money has changed equally in both cases. If there is a logical case for doing it in one instance, there is equally a logical case for doing it in the other. On the other hand, this goes some way towards what we believe to be fair, and it would be unwise and foolish to expect this Government to see sense all at one go. We are content to accept half sense this time, in the sure and certain belief that when the Chancellor has had a year to think it over, he will realise the full strength of our argument, and will give us the other half next year.

Amendment to the proposed Clause negatived.

Clause added to the Bill.

New Clause—(Relief From Estate Duty On Bearer Securities Compulsorily Registered)

Where, in consequence of the restrictions imposed by the Defence (Finance) Regulations, 1939, or the Exchange Control Act, 1947, on the issue of coupons representing dividends or interest, bearer securities situate outside the United Kingdom have been or are converted into or exchanged for registered securities situate in Great Britain, then for the purposes of any claim for estate duty in respect of the passing of the registered securities on a death occurring after the thirty-first day of March, nineteen hundred and forty-seven, they shall be treated as situate outside Great Britain:

Provided that this Section shall apply only if, between the conversion or exchange and the death (or, in a case where the securities pass by reason of a gift inter vivos or of the disposition or determination of an interest limited to cease on the death, between the conversion or exchange and the gift, disposition or determination), the securities neither have been disposed of nor have passed on the death of a person competent to dispose thereof.—[ Mr Glenvil Hall.]

Brought up, and read the First time

4.25 p.m.

I beg to move, "That the Clause be read a Second time."

This Clause deals with liability for Estate Duty consequent on enforced conversion, as an exchange control measure, of bearer securities held abroad. As a wartime measure, it became an obligation, under the Defence Regulations, for bearer securities to be registered in this country, and that being so, it affected very materially the liability for Estate Duty if the owner of the securities happened to be a person who was domiciled abroad. Normally, under the law, the obligation and liability to pay Estate Duty follows on the situation of the securities concerned, and if the securities were situate here they would normally have been liable to pay Estate Duty, although they were owned by someone whose domicile was overseas.

In order to be just to those concerned it was decided that if it could be shown that the person who owned the securities at the time of his death was the same person as owned them at the time they were registered, and transferred from abroad, Estate Duty would not be payable in respect of those registered securities. It was accepted by most people that when the Defence Regulations came to an end—the Regulation in this case is Regulation 3B—that would be dropped, and people would be entitled to have their securities retransferred into bearer. Under the Exchange Control Act, the holding of bearer securities will not be allowed, and what the Chancellor does here is to continue the wartime concession so that under the new Act, which will take the place of Regulation 3B, people in the position I have described will still have the advantage of the wartime concession, which, by general agreement in all parts of the House, was granted at that time.

I found it necessary, a little earlier, to speak in somewhat critical language of the Financial Secretary's speech when commending to us a Clause dealing with Co-operative societies. It is, therefore, with all the greater pleasure that I commend him now for the admirable manner in which he has introduced a Clause which, I think, will be generally acceptable to the House. This is a matter of great complexity, and one over which many people could wonder for hours. The difficulty of the mechanics of collecting Estate Duty on various securities has troubled many professional men for many years, and the Government are to be congratulated on putting this matter right in this new Clause. I cannot employ the language of the hon. Member for West Ealing (Mr. J. Hudson), and say that this should be supported on the grounds of the social uplift which it will bring us. This is a more mundane matter; here, we are keeping our feet on the ground, and this technical matter is now being adjusted. The confident manner in which the right hon. Gentleman has just moved this new Clause shows how different he is, when pleading a just case, from the less comfortable attitude in which he found himself when moving the earlier Clause.

Can my right hon. Friend explain the proviso to the new Clause? I am not clear whether this restricts holders of scrip who are still holders on the date of their death.

I thought I had covered that point—I agree briefly, because I did not want to waste the time of the House. The answer to the question, if I understand it aright, is that if the executors of a person who dies can show that he owned those securities in bearer form, and was the owner at the time when they were compulsorily transferred into registered securities, he would have the benefit of this particular concession, provided, of course, that he fulfilled the other obligation which falls upon that estate, that the domicile would be abroad, and so on.

Question put, and agreed to.

Clause read a Second time, and added to the Bill.

New Clause—(Repeal Or Reduction Of Duties On Legal Professions)

(1) The following headings in the First Schedule to the Stamp Act, 1891, shall cease to have effect, namely—

  • (a) Admission in England of any person to the degree of barrister-at-law;
  • (b) Admission in Scotland of any person as an advocate;
  • (c) Admission of any person to be a member of either of the four Inns of Court in England;
  • (d) Admission of any person as a solicitor of the Supreme Court in England;
  • (e) Admission in Scotland of any person as a law agent (both paragraphs);
  • (f) Faculty, Licence, Commission or Dispensation for admitting or authorising any person to act as a notary public;
  • and no stamp duty shall be payable on the admission of any person as a solicitor under Section thirty-five of the Solicitors Act, 1932, or, in Scotland, Section one of the Colonial Solicitors Act, 1900.

    (2) The duty chargeable under either of the headings "Articles of Clerkship" in the said First Schedule shall in all cases be two shillings and sixpence and accordingly for those headings there shall be substituted the following heading:—



    "Articles of Clerkship whereby any person becomes bound to serve as a clerk in order to his admission as a solicitor of the Supreme Court in England or as a solicitor in Scotland26

    (3) The duty chargeable under the heading "Certificate to be taken out yearly" in the said First Schedule shall be one twentieth of the amount chargeable immediately before the coming into force of this Subsection.—[ The Solicitor-General.]

    Brought up, and read the First time.

    4.30 p.m.

    I beg to move, "That the Clause be read a Second time."

    This new Clause abolishes a number of duties on admission to the various learned professions. First, it abolishes the tax upon admission to the degree of barrister in England or advocate in Scotland—that is, £50. Then it abolishes the duty on admission to either of the four Inns of Court in England. That is a phrase taken from the Stamp Act, 1891. I do not know what "either of the four Inns of Court" meant then, but that is the phrase used in that Act. It abolishes the duty on admission of any person as a solicitor of the Supreme Court in England, and as a law agent in Scotland. It also abolishes the duty for authorising a person to act as a notary public. Subsection (2) reduces to a nominal amount the duty payable on articles of clerkship for the purpose of becoming a solicitor in England or in Scotland. Subsection (3) reduces to one-twentieth the duty payable on a practising certificate taken out yearly by a solicitor.

    This particular matter has been a bone of contention for a great many years. Indeed, in 1850 and 1853, Bills were introduced in the House with the object of reducing these various duties. They are, in effect, simply a tax upon admission to the learned professions, which in no sense can be said to serve any useful social purpose. The suggestion that they should be removed originated from a number of my hon. Friends, and received support from both sides of the House during the Committee stage. This new Clause is designed to give effect to those proposals.

    We ought not to allow this occasion to pass without first congratulating the Chancellor on succeeding in doing what Mr. Gladstone set out to do in 1870, but was never able to achieve, because the tax which we are repealing at the moment originates, in its present form—although in part from the Stamp Act, 1891r—from the Stamp Act, 1870. As my hon. and learned Friend has said, there was considerable difficulty in getting it through the House, and it was only got through because Mr. Gladstone assured everyone that the only purpose of collecting these duties together was to discover what they were and how they could be repealed. The Chancellor of that day said this:

    "He looked on this Bill not as a settlement but only as a beginning—as laying the foundation for future labours in the field."
    There have been other labourers in the field, and I think we ought to pay the very greatest tribute to the party opposite. In 1937 they began the repeal, and indeed did remove the very heavy duty which weighed on the backs of the aristocracy; the very heavy charges which were payable by Stamp Duty when one was raised from one rank to another in the nobility were removed by the party opposite. But I cannot help feeling that were Mr. Gladstone alive today he would have put the encouragement on learning, and the opening of the learned professions to all classes, before the relief of indigent peers.

    However, be that as it may, it is perhaps worth while looking for a moment at the history of the tax, because it is probably one of the oldest taxes at present in force. It was introduced by King William III. His Government copied the tax from Holland, where it had obtained for some time before. I am indeed sorry that none of the hon. Members who represent Northern Ireland are with us today, because I am sure they would impress upon the House the very grave danger of departing from any principles laid down by that Government of that particular monarch. All I can say in their favour is the general view they have expressed, that it is never necessary to go beyond 1690; and as the Stamp Act of King William dates from 1694, perhaps under those circumstances repeal would be permissible. It was made permanent by Mr. Robert Harley, later the Earl of Oxford, who is very rightly regarded as the founder of the Tory Party as we now know it. He introduced as a permanent Measure, the Stamp Taxes of which these Stamp Duties we are discussing form part, to pay interest on the founding of the National Debt which would secure the stock of the South Sea Company. In passing, we ought to pay that tribute to this prototype of Conservative finance. It was, of course, subsequently applied by the party opposite, in the well-known Stamp Act of 1765, to our American Colonies. If I may say so, it does seem to the that we ought again to pay tribute for this outstanding contribution to Anglo-American relations.

    In 1785, when the matter was discussed—the last occasion on which the House gave serious consideration to these Stamp Duties, Sir E. Astley observed that:

    "He rose because his tax upon dogs had been alluded to. He owned he should be indeed well pleased to see both dogs and attorneys subject to duty. He coupled them thus together because he thought them both articles of luxury."
    Now let me come to the Stamp Act, 1815, because it is there that the taxes obtained their permanent form. There was some discussion on this subject, and since the hon. and gallant Member for Holdnerness (Lieut.-Commander Braithwaite) saw fit to make a reference to the newspapers during the Debate on the new Clause on industrial and provident societies, perhaps you would not think me out of Order—

    I would think the hon. Member was out of Order. He has already gone extremely wide in his historical references. I ask him now to keep strictly to the proposed new Clause.

    Surely, Mr. Deputy-Speaker, on an occasion when the House is getting rid of a number of taxes of very long standing, might it not be possible for a little indulgence to be shown, in order to pay tribute to past Members?

    The hon. Member for Hornchurch (Mr. Bing) will appreciate that I am not altogether out of sympathy with him, but in accordance with my strict duty I must rule that he certainly went too wide, and that he must now confine himself to the particular new Clause before the House.