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New Clause—(Amendment Of Section 3 Of Finance Act, 1920)

Volume 466: debated on Tuesday 28 June 1949

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Subsection (2) of section three of the Finance Act, 1920, shall have effect as if for the words "nineteen hundred and twenty," "nineteen hundred and forty-nine" were substituted, and as if for the words "ten pounds, ten shillings and tenpence," "seven pounds, seventeen shillings and sixpence" were substituted.—[ Mr. James Stuart.]

Brought up, and read the First time.

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

On a point of Order. Before we go any further, Major Milner, could you tell the Committee whether the subject matter of this Clause deals merely with whisky, or whether gin and other spirits come within its scope?

I cannot actually claim the indulgence of the Committee in speaking today, but may I preface my remarks by saying that, unaccustomed as I am to speaking in this Chamber, I hope the Committee will bear with me for a short time? It may be of some interest to note that I copied this Clause, except in so far as the amounts are concerned, from a similar Clause moved on 7th July, 1927, by my old friend the late Mr. Fred Macquisten, former Member for Argyll. I wish he were here to perform this task today. He represented, and I represent, a constituency which has perhaps more interest in the whisky trade, along with Banffshire, than any other part of Britain. Both he and I always felt strongly on this matter.

Although I am not a total abstainer the interest of my hon. Friends and I does not lie in the fact that we wish merely to obtain cheaper alcoholic drinks; it is far more than that. Tens of thousands of pounds have been poured into the building of great distilleries; there is the question of local employment—a matter of great importance to our constituents—and also the agricultural side of the problem, distilleries being the best market for the best malting barley that our farmers can produce. In 1927, Mr. Macquisten argued that the rate of duty on whisky in those days, which was £3 12s. 6d. on a proof gallon, amounted to £300 to £350 tax on an acre of malting barley. If that be the case, then the present rate of duty, which is £10 10s. 10d., on a proof gallon, works out at about £900 on an acre of good barley. That is a terrible tax.

Quite apart from that, there is the question of the revenue itself, in which I know the Financial Secretary will be interested because I was present with a deputation which waited upon him at the Treasury a few weeks ago. We had a friendly reception, and I hope the right hon. Gentleman will be equally friendly today. At a deputation in the Treasury the Minister cannot, of course, take any action; he can only listen and reply, all of which the Financial Secretary did with the greatest courtesy. But here, in this Committee, he is in a position to go a step further, and I hope he will not fail to assist us on this occasion.

I am very sorry that the Chancellor himself is not here today, because I am sure he would be kindly disposed towards us. I do not suggest that he is very keen on the absorption of alcoholic liquor, but during the war I had the privilege of working with him for some months when he was Leader of the House and I was then occupying the position occupied today by the Parliamentary Secretary to the Treasury—it is with the greatest difficulty that I can refrain from calling him my right hon. Friend. Although the Chancellor and I did not always agree on everything we were next to being a couple of cooing doves, and I cannot help thinking that if he were here today he would view this proposal favourably. I can only hope that he has left instructions with the Financial Secretary to do what he would have done had he been here himself.

I shall not go into details because my hon. Friends behind me will do that and elaborate this case. I referred to the fact that the duty in 1927 was £3 12s. 6d. per proof gallon, and that I was associated with the former Member for Argyll who, in those days, moved to reduce the duty to 30s. The duty has now risen to over 10 guineas, and, as I think is clear to anyone, the domestic consumption of whisky in particular has dropped steadily throughout the last half century. It is most extraordinary that the Government should adopt their present attitude to our own industry, that is to say, penalise it by excessive taxation while, at the same time—and I am not criticising their action—helping the French wine trade by reducing the duty on wines so as to allow us to have cheaper French wines.

4.45 p.m.

The French, as we know, have always done everything to assist and foster the wine trade in France because it is one of their primary industries. Well, here we have a product of Scotland which I believe cannot be imitated in any other part of the world, yet we do everything in our power, not to foster it but to murder it. In Scotland, when we lay golden eggs we very much dislike having our necks wrung; and I may say that these eggs, as the Financial Secretary knows very well, have been of the purest gold—or they may be paper now—throughout many years.

I shall not go into a lot of detail, but I hope that this new Clause will be viewed with sympathy. It affects local employment; it affects agriculture very materially, and it affects the revenue. If the present duty is maintained it cannot fail to kill this industry, which I am sure we should all view with regret. I know that America produces her own Bourbon and other whiskies; they put a very considerable duty on Scottish whisky, and naturally keep their own Bourbon sufficiently cheap to encourage people to drink it. That is quite natural. I do not know whether the Chancellor can rely upon maintaining this export trade. I believe it to be a maxim that an export trade cannot be maintained unless there is a healthy home industry to back it up. Well, the way things are going today, we shall soon not have any home industry, and I therefore hope that this new Clause will be viewed favourably.

I wish to support this new Clause as strongly as possible. I, with other hon. and right hon. Members who sponsor this Clause, represent an area in which whisky distilling is an extremely important industry. Indeed, in the whisky distilling areas of Scotland this industry is just as important as coal is to the Welsh valleys. As my right hon. Friend has said, whisky production is a basic factor in the economy of our Highland glens, where we are circumscribed by the nature of the country to the growing of two cereal crops, and two only: barley and oats. The outlook for oats is far from encouraging, and we now view with very grave apprehension indeed the outlook for our barley, because the outlet for our barley is in the distillery which is hard by. The barley, in conjunction with the local water and the local climate, is responsible for the production of Scottish malt whisky, which is the finest thing of its kind in the world, and is so estimated.

We hear and have heard a great deal in this Committee about the Highlander and what the Government aim to do to help the Highlander. The Highlander looks upon this duty with a great deal of shrewd suspicion and misgiving, because he sees his one great national industry being murdered by this prohibitive taxation. In pleading for the reduction of the whisky duty, I should imagine that we on this side, in supporting this new Clause, were following on the efforts of the Secretary of State for Scotland, the Minister of Agriculture, and the President of the Board of Trade, for they should be leading the fight for a reduction of this duty. Whisky is all-important to Scottish farming and to our export drive, because it is the greatest single dollar earner, and without a substantial and healthy home trade, whisky exports cannot be maintained.

This is not a question of temperance reform. I am not myself a whisky drinker, but that is entirely by the way. This is a question of the survival of what to us in Scotland is a key industry. Nothing that this Committee can do in the field of taxation can alter the desire for alcoholic stimulants on the part of the people. Taxation, however, can to a very large extent determine what people shall drink. The price of whisky has become quite prohibitive, and its place is being taken by all sorts of concoctions, some of them straight drinks, but others what I might term to be veritable hell brews which are definitely more deleterious to the human body, the human frame and the human mind than whisky.

What is happening in the liquor trade? Let us look at comparative spirits which bear relatively the same duty as whisky. In 1948 we imported 30 per cent. more brandy than in 1938. In 1948 we imported three times more rum than in 1938; in addition, vast quantities of rum were being imported for manufacture into gin. In 1938 brandy imports were 523,000 gallons; in 1948, 702,000 gallons. In 1938 rum imports were 1,737,000 gallons; in 1948 the amount of rum imported for beverage purposes was six million gallons—and that does not include about three million gallons imported for commercial purposes and for distillation into gin. In 1948 the total consumption of whisky in the home market was 2¼ million gallons; it was more than twice that in 1938.

I submit that it is unfair that these imported liquors, which function in more or less the same field as whisky, should bear a duty comparable with that on whisky. Whisky deserves some preference, if for nothing else than that it is a native product from beginning to end. I further maintain that it is grossly unfair that six million gallons of rum should be available for retail sale in this country, while our own native product is restricted to 2¼ million gallons. This Finance Bill gives concessions to French wines, yet this perfectly just case for our own one national beverage is ignored. I think I ought to give these figures for the benefit of the Committee. In 1910 the duty on whisky was 11s. per proof gallon. Today the duty per proof gallon is 210s. 10d.—20 times greater than it was in 1910. Today the full retail price of a bottle of whisky is 33s. 4d.; that is, if it can be got at the price the distillers hope it can be bought for. The, wholesale price is 29s. 2½d., which includes tax of 24s. 7d. The net wholesale price after tax is deducted is 4s. 7½d. At the wholesale level whisky is bearing what is tantamount to a Purchase Tax of 530 per cent.—400 per cent. greater than any other British product has to stand in the home market. That is a matter which the Committee ought to take very seriously to heart.

What of the effect the restrictions at home may have upon our present export drive and our future exports of whisky? Whisky drinking is dying out.

The hon. Lady may say "hear, hear," but let us look at this from the purely economic point of view. It is a tragedy. The appreciation of quality is being lost; and any manufacturer knows that in order to maintain the standard of his goods in the export market he must have critical examination and estimation of his quality at home, otherwise it becomes only a name, and the value of that name goes down. There has in recent years been a tendency, following the lead of successive Governments, to increase the duties on imported whisky. There is still a considerable gap between the excessive Excise duties we impose in this country and those imposed abroad; they are still, on the average, twice as great here as abroad. But there is no reason in the world why those countries should not close the gap, and close it instantly. If they did, if they imposed on whisky an import duty comparable with the Excise duty we impose at home, our whisky export business would be killed overnight.

When we ask for a decrease in duty we are asking for something like £2 13s. 4d. a gallon. That will not have such an enormous effect upon revenue returns. After all is said and done, the present amount of whisky which we are selling in the home market is 2¼ million gallons, and if only a small increase were permitted for the home market with a reduced duty the Treasury would not be the loser; but the industry would gain that fillip, that infusion of new lifeblood in home sales which is so vitally necessary for the future.

Many hon. Members may be asking themselves the age-old question: what is the relative value of barley as a feedingstuff compared with barley used for whisky manufacture. I will tell them. One ton of barley yields 105 gallons of proof whisky, which are available in the export field at £2 a gallon and produce £210. That amount of sterling or dollars can purchase 10 tons of wheat at present values.

Much has been said by the President of the Board of Trade and others on the Government Front Bench regarding the favourable treatment that was to be accorded to those industries which were showing the greatest success and endeavour in the export field. I claim that no industry has transcended the efforts and the success of Scottish distilleries in achieving results in the export market. In order to concentrate their available stocks on hard currency countries they have gladly and willingly at the request of the Chancellor, yielded up markets in soft currency countries which they enjoyed for generations. I submit that in common fairness, in return for their loss of those markets in soft currency countries, the Chancellor should use his power to give a quid pro quo by reducing the duty at home and giving an increased liberation of their stocks.

I sincerely hope, for the reasons my right hon. Friend and I have given, that the Chancellor will accept this new Clause. If he cannot go all the way, I appeal to him to let us have at least a token reduction. There has been a succession of increased imposts on this industry for 55 years without a halt. This is a golden opportunity to put the tax machine in reverse, because already this industry has been burdened with the straw which breaks the camel's back. We cannot go further; we must go back if we are to save this industry. In giving us a concession, however small, the Chancellor would be halting that savage and, from our point of view, entirely suicidal onslaught on this industry, which is such an important national asset—a savage onslaught which I regret to say has been participated in by Chancellors of all parties.

5.0 p.m.

I understand, Major Milner, that you have ruled that while this new Clause deals specifically with whisky, it would be in Order to mention gin as well. Perhaps I might make reference to another new Clause on the Order Paper, which deals with the Spirit Duty as a whole.

For the information of the hon. and gallant Member, the Clause to which he has referred will be out of Order.

I was not aware of that, but I gather it is in Order to make some reference to gin on the new Clause which we are now discussing. Before I come to that, may I as a colleague, who sat in previous Parliaments with him, say how pleased I was to hear my right hon. Friend the Member for Moray and Nairn (Mr. J. Stuart), who for many years has confined his oratory to the refreshing suggestion, "That this House do now adjourn" or possibly under very extreme provocation to the Motion, "That the Question be now put."

I desire to support this new Clause not for the same reason as I supported the last, which was on humanitarian grounds, but purely on the grounds of the financial interests of this country. This, of course, is a hardy annual, which has been argued over and over again as the duty has steadily risen year by year, but the main arguments hold good still. There is, however, an additional one which is coming more and more into the picture as the present Government raises the duty. It is that of all people the Socialist Government are imposing a harsh policy of price rationing on what are known as the members of the lower income groups by placing the consumption of whisky out of their reach. I remember when I was a great deal younger than I am now, watching the dockers in Glasgow going to work, and invariably they had a dram early in the morning. Those days have gone. Successive Governments have placed it out of their reach. It is a great pity that the very healthy beverage known as whisky has been priced right out of the reach of those whom we describe, for want of a better term, as the working classes.

At this particular moment in our affairs I am bound to say that while that argument is potent, infinitely more so is the argument advanced by my hon. Friend the Member for Banff (Mr. Duthie) as to the vital importance of whisky in our dollar earnings. The very grave matters which the Chancellor is endeavouring to grapple with at the present time are intimately bound up with this, and surely it is true to say that in proportion to the amount of labour involved in its production, whisky stands high, if not the highest of all, in our list of export industries.

The Financial Secretary may say, "Yes, all these things are true, but we are not raising the duty to consumers in foreign countries. This is merely a domestic proposal." May I submit to the right hon. Gentleman, whom I strongly suspect has hardened his heart in this matter or has had it hardened by his right hon. and learned Friend the Chancellor of the Exchequer, that wherever there has been a rise in the whisky duty here in the country of production it has almost invariably been followed by a similar increase abroad, in countries to which we have exported; so by this proposal of the Government's we are indirectly making it more difficult for our whisky to be consumed in foreign lands.

There is an argument which follows from that, and which I impress upon the right hon. Gentleman. We all know that in the United States, in particular, there has been an increase in the distillation of their own products, and one can say without any offensiveness whatsoever that those home-produced products of the United States are vastly inferior in quality to our Scotch whisky. The higher our prices are, the better is the opportunity for the inferior whisky, and there is the danger of consumption in those foreign countries becoming more and more concentrated on the home and inferior product, so that one day a generation will rise that does not know and has not experienced the supreme quality of our Scotch whisky.

Would the hon. Gentleman say how much Scotch whisky is available to America at the moment? He is talking about the high price, but we have constantly been told here that it is too low.

Does the hon. Gentleman want to know what is the price which is being charged?

The argument, as I understand the hon. and gallant Gentleman, is that if the price of our British product is too high, it will stimulate the production of American whisky, which he says is inferior. For the information of the House, will he kindly tell us what is the price paid for Scotch whisky in America now?

I speak subject to correction, but I understand that it is in the neighbourhood of eight dollars a bottle, which is very much lower than it is here at home.

I understand that it is in the vicinity of a dollar a bottle. I do not think that that affects the main argument which I was trying to make, and which I hope the Committee will not think is unfair. My argument was that if we attempt to raise the duty here at home, it has an effect in increasing the price abroad, and there is a danger of the home distilled whisky in those countries ousting the product which we are endeavouring to sell them at this particular moment.

I think my hon. and gallant Friend should make it clear that when he mentions that prices will be raised abroad, it is because of an increase in import duty that those prices have to be increased.

I did say at the outset of my remarks that an increase here was almost invariably followed by a balancing rise in those countries.

I regret that this form of price rationing has placed this product out of the reach of the lower income groups at home, but it is a greater pity that we are in the very greatest danger of striking a blow, in order to raise revenue at home, against our prime dollar earner, having regard to the labour employed, and one of the greatest weapons to our hands to enable us to get out of our present difficulties. Whatever instructions have been given to the Financial Secretary, I trust that, having listened to the arguments, he will meet us in the realisation that this is an important issue at the present time.

I should like to associate myself with the remarks of the hon. and gallant Member for Holderness (Lieut.-Commander Braithwaite) in his reference to the speech of the right hon. Gentleman the Member for Moray and Nairn (Mr. J. Stuart). His speech was so charming and disarming and made with such lucidity that I had the utmost difficulty in restraining myself from jumping to my feet and offering everything he wanted. However, I fortunately restrained myself, and I have now to put before the Committee certain arguments which are conclusive as to why we on this side of the Committee cannot accept this new Clause.

What was said by the hon. Member for Banff (Mr. Duthie) is also true. A very high-powered deputation from the other side of the Committee waited upon us at the Treasury, and we had a very interesting exchange of views. I was sorry that I was not able to meet them in some small way. It is undoubtedly true that the duty on spirits is exceedingly high. It is £10 10s. 10d. per proof gallon, and if this Clause is accepted it would reduce it to £7 17s. 6d. The present duty on a bottle that is sold is £1 4s. 7d., and it is sold at £1 13s. 4d. If this new Clause were accepted, it would mean a reduction of the price by about 6s. 2½d. Even though that may seem a reasonable suggestion to make, the figures which I will give to the Committee in a few moments will show that the total is more than my right hon. and learned Friend can afford. The points made by hon. Members include the one that the demand for Scotch whisky in the home market has declined during the past year. Reference has also been made to the fact that over a long period it was declining. The hon. and gallant Member for Holderness referred to this himself when he said that when he was young, and I gather living in Glasgow—

When he was visiting Glasgow he noticed that the ordinary working classes started the day with a tot or a dram. That is true, but the duty on whisky was somewhere in the neighbourhood of 2s. 6d. and 3s. 6d. a bottle, and it was available as a drink for the people known as the working classes. Whisky has now been put out of the range of the great mass of people, because of the duty and the price. It is also outside the range of people who normally one might suppose could afford it.

I do not think there is any ground for the suggestion that the reduced amount that now comes on the home market has been a handicap on the export trade. Whisky is one of our best exports, and that is one of the difficulties about it at the present time. The Ministry of Food have to see to it that in the releases for the home market there is enough left for the export market in order to earn dollars, which this country needs so badly now. It is one of the penalties which we have to pay in order to earn dollars, and whether we keep it at home or send it abroad it all goes.

5.15 p.m.

The whisky which comes into the home market is easily sold, as is the whisky which goes overseas. It is more important at the moment that it should go overseas, and we have to take that into account. The Ministry of Food have liberated more barley this year than previously in order to assist the catering for both the home and foreign markets. If the suggestion of the right hon. Gentleman the Member for Moray and Nairn were accepted and the reduction in the duty were limited purely to home-produced whisky, the cost would be about £6 million. The effect of the Clause would also be to reduce the duty on home-made gin as well, even if rum and brandy could be excluded, and if we took that fact into account, the cost of the Clause would be in the neighbourhood of £15 million. If we went further and accepted the suggestion of the hon. and gallant Member for Holderness the cost would be in the neighbourhood of £20 million.

To sum up, the reply I would make to the Committee is that we see no signs at the moment that the fact that the home market has had to be restricted is having any effect on overseas sales or on the limited production—I admit that it is limited—in which the whisky distillers are able at the moment to engage. Even if my right hon. and learned Friend accepted the more modest suggestion of the right hon. Gentleman the Member for Moray and Nairn, it would cost £6 million. If we extended it as proposed, we would have to consider the distillers of gin, who are interested. If we made this concession for all home-produced spirits, it would cost £15 million. I think I have only to mention that figure to show that it is quite beyond our power to accept such a suggestion.

Before the right hon. Gentleman sits down, may I put it to him that the effect on the export drive of a limited home sale is a long-term one? I admit what the right hon. Gentleman says about there being no immediate effect. However, a discriminating taste for whisky is being lost through the inability of the connoisseurs in the North to buy it, and we are thus losing the essential critical taste which gave our whisky its prestige abroad.

I feel rather diffident about addressing the Committee on this subject as I am personally interested financially, being a gin distiller. I propose to approach the subject not from the point of view of any hardship from which the gin distiller may suffer, but simply from the point of view of revenue and leave it to the judgment of the Committee as to what conclusion they reach. I do not think it necessary to consider here whether the drinking of spirits is desirable or undesirable; we are here today to consider the tax purely from the point of view of yield.

I feel bound to warn the Treasury that my opinion is that they are tending to kill the goose that lays the golden egg. The right hon. Gentleman said that acceptance of the new Clause would entail a loss in revenue of so many million pounds and therefore he could not even contemplate it. I tell him this, that the duty on spirits has risen to such a high level that he is in grave danger of not being able to maintain the existing revenue. The duty on spirits has been put up and up, and in time of boom and prosperity it has been possible to carry it, but with the decline in the purchasing power in the hands of the public, the duty tends to defeat its own ends and the yield will tend to dwindle.

To make a reductio ad absurdum, if the duty on spirits were £100 a bottle, nobody would buy spirits; if the duty were 1d. a bottle, there would be a heavy loss to the revenue, and many headaches. Somewhere between the two must lie a figure which will produce the optimum result from the point of view of the revenue, and that figure is not the same in time of boom and expansion as it is in time of depression or recession. I repeat that I am looking at this question merely from the point of view of the yield of revenue, as a taxpayer and as a Member of this Committee, and I repeat that the tax is too high from the point of view of the Treasury. How much it should be reduced I do not venture to say. I think it should come down at least 25 per cent. If we reduced the price of spirits by 1s. a bottle, we would not get much increased consumption but probably an actual loss in revenue. The duty should come down something in the nature of 25 per cent. I believe that we should then make up the loss of duty through increased consumption. We should then be better off than when we started.

I want to say a word in defence of my own trade. It may interest hon. Members to know that the duty on gin is 212s. 4d. per proof gallon and it is sold for 14s. per gallon. Therefore, the villain of the piece is not the distiller. I hope that the Treasury will consider my remarks, and that hon. Members will not think that I am pursuing my own private ends.

I intervene not for the purpose of curtailing in any way this interesting Debate, but because I want to express my own particular difficulties and to point to the sort of arguments which I want to hear. All of us feel that this is a matter which must be put not on the convenience, the comfort or the pleasure of individuals but on the economic basis. If we were merely considering the gratification of the whisky drinker or the gin drinker, we should have to weigh that against the gratification of the smoker or the man who goes in for football pools or other varieties of taxpayer.

There is an economic fact behind the Clause and the arguments of my hon. Friends. I can see that there might be excellent economic arguments for a reduction in the spirit duties, and I wonder if subsequent speakers will produce tax and figures to justify that conclusion. Clearly there would be an economic justification for a reduction of the duties if they were on the same basis as the Beer Duty which we have already considered; that is to say, that the duties were now so high that they were defeating their own ends and that a reduction in duty was the only way of arresting the decline in the revenue and, possibly, of increasing revenue. My hon. Friend the Member for Farnham (Mr. Nicholson), who speaks with great authority on this matter, referred to the effect of what he called the "Spirit Duty" on consumption. I wondered whether he was referring only to the effect the duty was having on the consumption of gin.

This is a very important question. With reference to the restricted allocation of whisky in the home market, I was not attempting to make out any case for whisky, but we are all hoping that one day whisky will be in increased supply on the home market. Then, I believe, precisely the same law of cause and effect will apply in the case of the consumption of whisky as in the case of gin. I do not think that we can separate gin and whisky; I call them both spirits. It is the high duty on spirits which will lead to such a fall in the consumption that the revenue will suffer.

I thought my hon. Friend meant that and that he was devoting his argument not to whisky with which he started, but to the gin to which he was specifically referring. As I see it there is a difference at the moment between the two. We have not yet heard any facts or figures—perhaps we shall later on—to show that the consumption of whisky is falling off as the result of this duty, but I believe that there are facts and figures which show quite clearly that the consumption of gin is falling off. Therefore, at any rate, it may well be that gin is coming in the same category as beer in the case of which a reduction of the duty is necessary if the revenue is to be maintained.

With regard to whisky, I should like to hear from hon. Members who can take advantage of the Debate some facts and figures on what appears to me to be the most important question of whether there is any evidence that the consumption of whisky is falling off as the result of this high duty so that we might say as an economic fact that a reduction of the duty would aid rather than hamper the revenue. So much for the economic effects inside the country.

Now for the question of the export trade. Apart from the rather long-distance matter to which one of my hon. Friends referred, I cannot see at the moment how the high internal duty is affecting the export trade. There again, it may be that hon. Members dealing with that aspect can show that in some way the price of whisky abroad is affected by the high duties which are being put on the sales at home. I agree that the point is an important one but it is a long-distance one. It may very well be that if we reduced the consumption of whisky in this country more and more, when export tends to fall off we may find that we have so small a home market that it will be unable to support an industry which will perhaps still be capable of a considerable export. That is important for the future but it is not an immediate matter at this crisis. I do not think that it has yet been argued that the reduction in duty would lead to some immediate increase in exports which, if it were so, would justify to me a reduction in the duty.

I have expressed to my hon. Friends my diffidence in this matter and mentioned some of the points I should like to have cleared up. As far as I can see, unless it can be shown that a reduction in the duty on spirits would prevent a fall in consumption and therefore a fall in revenue, or it can be shown that a reduction would lead to an increase in our all important exports, I should not feel justified in putting the claims of those consumers above the claims of other consumers between whom we ought to judge if the money was available. Whatever hon. Members who hold strong views on this matter may feel, in those circumstances unless those two points are met, I could not support the Clause or advise my hon. Friends to do so.

I am sorry that attendance at a Committee upstairs prevented me from having the opportunity and pleasure of listening to the speech of the right hon. Gentleman the Member for Moray and Nairn (Mr. J. Stuart). I have no doubt that he very quickly showed the Committee of what it had been deprived by his long occupancy of the Whips' Office. We are all happy to think that we are deprived of it no longer. I want to mention a question raised by my right hon. Friend the Member for West Bristol (Mr. Stanley) concerning the consumption in this country and the effect of the duty upon it. It is impossible to give a definite opinion on that for this reason. The arrangement which was come to two years ago between the Board of Trade, the Ministry of Food and the distillers was that the distillers undertook, in exchange for getting the barley that they required to start the industry up again after the war, to export 75 per cent. of the total production to the dollar area, leaving only 25 per cent. of the total production of whisky—and that included stocks—for the home market.

5.30 p.m.

The result has been that the home market has been deprived of good whisky to a fantastic extent during the last two years. Therefore, in my submission, there is not enough whisky available here to test the home market. The trouble about whisky today is not only that it is far too expensive, but that it is almost unobtainable unless one pays a fantastic price. All I know is that the home consumption of whisky is small, and in the long run that will be bad for the industry because it is only a question of time before the people of this country will lose their taste for it. In fact, it is true to say that the young generation are losing their taste for whisky, if they have not lost it already, and that is a pity because it is a good drink and not an unhealthy drink. The position is different with regard to gin because there has never been a quantitative limitation on that spirit. The consumption of gin is falling, and one can get plenty of gin in any grocer's shop today at the fixed price. Therefore it is a fair test to take the fall in gin but not in whisky.

That brings me to another point made by the hon. Member for Farnham (Mr. Nicholson). It is true that under the new doctrine of taxation inculcated by the late Lord Keynes, tax should be high in times of boom, especially on luxuries, and that it should be reduced with the approach of a depression and lowered pretty sharply when the depression arrives. By "depression" I mean a recession, because I am not talking of a major slump. However, there is no question that we are leaving the sellers' market and entering the buyers' market, and accordingly there is less money about. That in itself is an argument for a remission of this Duty.

The Financial Secretary admitted that the taxation on whisky at present is penal. The right hon. Gentleman said that not only does it put whisky out of the range of the working classes but out of the range of the well-to-do classes as well. That cannot go on indefinitely because, if it does, we shall lose the home market. The right hon. Gentleman said that whisky is a popular drink. I think it has been, but I am certain that it will not remain a popular drink if it is unobtainable either through lack of its existence in this country or through this penal taxation which raises the price to a point at which ordinary people will not be prepared to buy it.

Whisky remains our greatest single dollar earner per unit of labour, and dollars are, as we are repeatedly reminded by the Treasury, absolutely vital to this country at present. I say that if we want to keep it as a good dollar earner, as surely we do, we must take some steps to revive a home market. An export trade can never be conducted without a home market because it is subject to violent fluctuations and, with no home market to fall back upon, there is not sufficient stability for the export trade. Nor, as the hon. Member for Banff (Mr. Duthie) rightly said, have we the connoisseurs who can tell the difference between good whisky and bad. I am absolutely convinced that the definite continuation of this scale of duty will kill the whisky industry, and that would be a disaster for Scotland and a disaster for our dollar trade.

I shall revert to a few remarks made by my right hon. Friend the Member for West Bristol (Mr. Stanley) who drew a distinction between whisky and gin. There I think my right hon. Friend was right, because the question of whisky is complicated by that of dollar exports. His main point was that what we have to look at in this Committee is the effect upon the revenue of anything we may do about these duties. He also called for figures from those concerned in this matter. The trouble about the figures which are published in the "Statistical Digest" is that they relate to the consumption of spirits and do not give whisky and gin separately. However, such figures as have been published are extremely significant.

The monthly consumption of proof gallons in 1938 was 860,000. For the first three months of 1948 the consumption averaged rather over 800,000 gallons, and in March, 1948, it was 870,000 gallons. Therefore, by the first quarter of last year there had not been a heavy reduction in the consumption of spirits in this country. The figures for the first quarter of this year are quite different. In January the consumption was 700,000 gallons, not a large fall. In February it was 490,000 gallons, and in March it was 380,000 gallons. Therefore, by March this year the consumption of spirits was appreciably less than half of what it was last year.

As I understand it, the consumption of gin in this country last year is higher than the consumption of whisky and as there has not been any great decrease in the consumption of whisky here because of shortage of supply, then presumably the decrease in the consumption of gin must have been much more than 50 per cent. In fact the figures indicate that the consumption of gin is running something like one-third of what it was last year. When the wine duty was reduced, we were told specifically that the object was to preserve the Revenue. When the beer duty was reduced, we were told specifically that the object was to reduce the cost of living, but I do not think we were meant to take that seriously, and I take it that in that case too the object was to preserve the Revenue.

The right hon. Gentleman said that if the duty on home spirits were reduced it would cost the Revenue £15 million. I think we are entitled to know on what assumptions of consumption that figure was based. If I am right in supposing that the consumption of spirits will go on declining as it has done in the first quarter of this year, there will be an enormous reduction in the revenue raised from spirits in this country. If that happens, a serious situation will face the Government because this is one of our major revenue earners. We might be entitled to ask right hon. and hon. Gentlemen opposite a question which they always ask us—if they do not raise the revenue from spirits, where will they find it? Looking at these figures, I do not believe that they will raise in the current year from spirits anything like the amount raised last year. If the remedy in the case of wine and beer was to reduce the duty, that must be the remedy also in the case of spirits.

If we are not to press this new Clause, we should have from the Government a statement showing on what the £15 million is based, and what are their assumptions about consumption for the rest of this year. It looks to me as if they are simply assuming that consumption will be the same and that on that basis the cost would be £15 million. My guess is that the cost to the Revenue of going on as we are now will be much greater than that, and if some reduction were made in the duty, the cost would probably be a great deal less.

By a curious coincidence I was entertained at Lords today by a firm of distillers, and I asked them various questions on this topic. I must tell the Committee that they had no idea I was a Member of Parliament. I was introduced quite casually and I asked whether or not sales had gone down in their public houses throughout the country during the past six months. The gentleman speaking to me said that not only had sales gone down but that the Chancellor will be sharply surprised when he finds he will get at least 30 per cent. less than he expects to get from this duty.

Whisky. He added, "It really makes me laugh when I see all the fuss that is made throughout the country about Purchase Tax at the rate of 33⅓ per cent., or whatever it may be, for here are we taxed at the rate of 530 per cent."

Will the hon. and gallant Gentleman say how many bottles of whisky were going spare on the shelves of those public houses?

No, I could not tell the hon. Gentleman that. What that gentleman felt keenly, and what I feel keenly, is that the tax on this commodity is prohibitive at 530 per cent. above its cost. I heartily support my right hon. Friend the Member for Moray and Nairn (Mr. J. Stuart) who moved this new Clause for some readjustment of the tax in the future to allow the home market to benefit by knowing what good whisky tastes like. At the present moment it is completely denied the opportunity of distinguishing between good or bad whisky because there is none available.

The hon. Gentleman can make his speech in a few minutes? I have already called on Mr. Fraser.

I should like to add a few figures to try to convince my right hon. Friend the Member for West Bristol (Mr. Stanley) who seems not absolutely convinced. I do not want to have a border foray with the house of Stanley, but Scottish Members feel strongly about this and I think they feel rightly so because their intuition, their touch of Celtic inspiration, is borne out by the figures produced by my hon. Friend the Member for Flint (Mr. Birch). I would draw the attention of the Financial Secretary to some of these overall figures of whisky consumption. In 1900, when I must say that the Republic of Ireland was included, whisky consumption was 38 million proof gallons in this country. In 1948 the consumption was just over five million proof gallons. There is no doubt that in 1900 whisky came into the cost-of-living index. It is undoubtedly one of the tragedies which Scotsmen on both sides of the Committee mourn, that no longer is whisky the drink of the British people as it was in the past.

5.45 p.m.

I would point out that in 1900 duty was 11s. per proof gallon. We went through various epochs and in 1940, when the duty was at 97s. per proof gallon, the consumption was about 9 million gallons. Since then, of course, as the hon. Member for East Aberdeen (Mr. Boothby) pointed out, there have been difficulties about the quantity of barley available. In 1947 and 1948—as far as the distillation carried out in 1940 and 1941 is concerned—approximately the same amount of barley was available, although, as hon. Members will know, there obviously was not the same amount of barley for several years before. The amount of whisky available to the market in 1947 and 1948 was approximately the same, but the actual consumption in 1947, when the tax was 190s. per proof gallon, was just under 7 million gallons; in 1948, when the tax was 210s. per proof gallon, the consumption—this is of whisky alone—was just over 5 million gallons, a drop of approximately 2 million gallons, which has put the Treasury out of pocket by several hundred thousands of pounds.

I want to ask somebody a question; perhaps I may ask my hon. Friend. I find myself in great sympathy with the various whisky Members who are putting the case for Scotland, but I should like to ask this question. We are constantly being told that the consumption of whisky in this country is dropping, and it is a very harrowing and disturbing story. Why is it so difficult to get whisky? I have an order with my local provider for a bottle a week. I cannot get a bottle a week. Every now and then I get half a bottle, and sometimes none. Will some of the Scottish Members explain this mystery?

No doubt that mystery will be explained to the hon. Gentleman later on. I want to pursue my argument into the question of returns to the Revenue. There is absolutely no question that at present the tax gatherers are losing money on this form of taxation. Beyond that, there is absolutely no question that if the weight of taxation on this product remains at the present height, and when, as has been pointed out on this side, there is £900 tax on every acre of barley which is distilled, it will undoubtedly lead—if we start going a bit more groggy economically than at present, which we look like doing—to a growing up, as I hope it will, of a series of stills in the Highlands. It is inevitable, if this penal taxation continues, that if people want the stuff they will get it. What my hon. Friend has rightly said, is that the thing which is being destroyed is the taste of whisky. We are having all sorts of bogus brews—dews of this and mists of that—being put on the market, and I can only suggest that if the Government do not accept the Clause a new one should be christened, called "The mist of Glenvil Hall."

My right hon. Friend the Member for Moray and Nairn (Mr. J. Stuart), who raised this matter, made an admirable speech. We on this side can be gratified at its reception, but we can hardly be satisfied with the response from the Financial Secretary, for he seemed to give no concessions and to hold out not even a promise that he would consider this matter or give any cogent reasons for his refusal. All the arguments in the Debate have, quite rightly, turned not on the hardship to the producer or the consumer, but entirely on the question of the revenue. The Financial Secretary would agree that it is possible to raise taxation so high that it produces diminishing returns. In fact, the Chancellor admitted that when making his reduction in the tax on wines in his Budget.

I should like the Financial Secretary to tell us, first, whether the Government, in their decision to maintain this very high rate of taxation, are guided entirely by the belief that that will produce more revenue. If so, how can the right hon. Gentleman answer the arguments put forward by, amongst others, my hon. Friend the Member for Flint (Mr. Birch), who explained so clearly how revenue was falling on spirits generally, and the arguments of my hon. Friend the Member for East Aberdeen (Mr. Boothby), who suggested that this very valuable revenue producer would be endangered in the future through a lessening of the taste for whisky? The second point I want to ask the Financial Secretary is whether this is entirely a question of revenue, or whether he and his colleagues are governed by the fact that they think they know better than the public the things upon which the public ought to spend their money. If so, what does he think are their qualifications for being the judges in that matter?

Perhaps I might reply briefly to the main points made in this discussion. I have admitted, and the hon. Member for East Aberdeen (Mr. Boothby) has underlined it since, that the duty on whisky is very high. No doubt there are some people who do not drink it, even if they could get it, because the duty is so high. The fear has been expressed that people will lose their taste for whisky. That may be so, but it applies equally to tobacco. The manufacturers of tobacco are equally fearful—[HON. MEMBERS: "We do not export tobacco"]—that the rising generation will not smoke because of the cost of cigarettes and that, therefore, presently that industry will decline and with it, of course, the revenue which the Government now obtain from the sale of tobacco.

Surely, the right hon. Gentleman would agree that that hardly applies in the same way to the manufacture of whisky inside this country and the re-export of a certain amount of tobacco from this country.

All I was about to say was that those factors may or may not be true. The point is, should any Chancellor of the Exchequer, to whatever party he might belong, at this juncture take those facts into account, and do they override the other factors which I endeavoured briefly to put before the Committee when I spoke earlier? To begin with, he must remember that barley, one of the ingredients in the manufacture of whisky, can also be sold, and is needed, elsewhere. Therefore, the amount of barley available is not unlimited. The second point is that we have to consider exports. The hon. Member for East Aberdeen reminded us that whisky is one of our best exports. When we take the number of men employed in this industry and the amount earned by the exports, the export value of a bottle of whisky is tremendous, both in North and in South America and elsewhere, where we want, if we can, to earn hard currency. Thirdly, we must take into account the Revenue.

The Chancellor has to take all those things into account and to balance them. My right hon. and learned Friend has done that and he feels that, as the taxation on whisky does not affect exports; that, as it is essential that the great bulk of what is made now should go abroad, therefore the fact that the duty is as high as it is does not really affect the position at this juncture. It may well be that as the years go by, when things become normal, the Chancellor of the Exchequer of the day may want to pay much more attention to the home market, if he is seeking revenue, than the present Chancellor can afford to do, because he is after exports and must also think of the barley that is consumed.

In reply to the question by the hon. Member for Flint (Mr. Birch), I think he must have got his figures from the Statistical Digest.

What, I think, he overlooked—I am not complaining about this—is that a Budget was to be opened in April; and that although normally the figures for clearances from bond are a very good guide to consumption, they cannot be considered a good guide just then, particularly for the first three months of the year, because, quite obviously, those who had whisky in bond were not clearing it because they had no notion of what changes might be made in the Budget.

That is not a very valid argument, because the figures show that for 1948 the consumption in January was 800,000 proof gallons, and went up in March to 870,000; whereas, in this year, it went down from 700,000 in January to 380,000 proof gallons in March. The same considerations, surely, applied in both years; in each of them a Budget was to be presented.

For this year, for some reason into which I will not go now, there were great hopes by the public—people were misinformed; hopes were expressed in newspapers and elsewhere—that as last year ended with a substantial surplus, relief of taxation could be hoped for on, perhaps, both drink and tobacco. Although I make the point for no more than it is worth, I can tell the hon. Gentleman that, for the reasons I have given, the figures for the first quarter of this year are not entirely to be relied upon.

The chief proof—the point has already been made and I do not want to labour it—is that whisky is almost unobtainable; every bottle that is produced is sold. I think it was the hon. and gallant Member for Barnstaple (Brigadier Peto) who said that whisky distillers had indicated to him that the consumption in this country was going down. From our Revenue returns, however, we have no figures to show that that is so. On the contrary, our figures show that the Revenue in this matter is—I hesitate to use the word—buoyant; that all the whisky that can be put on the home market is snapped up. [HON. MEMBERS: "Of course it is."] There is a conflict, therefore, between what the hon. and

Division No. 183.]

AYES

[6.0 p.m.

Acland, Sir RichardChampion, A. J.Field, Capt. W. J.
Adams, Richard (Balham)Chetwynd, G. R.Follick, M.
Albu, A. H.Cluse, W. S.Foot, M. M.
Allen, A. C. (Bosworth)Cobb, F. A.Forman, J. C.
Anderson, A. (Motherwell)Cocks, F. S.Fraser, T. (Hamilton)
Attewell, H. C.Collick, P.Freeman, Peter (Newport)
Austin, H. LewisCollindridge, F.Gallacher, W.
Awbery, S. S.Collins, V. J.Ganley, Mrs. C. S.
Ayles, W. H.Colman, Miss G. M.Gibbins, J.
Ayrton Gould, Mrs. B.Cook, T. F.Gilzean, A.
Bacon, Miss A.Cooper, G.Glanville, J. E. (Consett)
Balfour, A.Corlett, Dr. J.Grenfell, D. R.
Barstow, P. G.Crawley, A.Grey, C. F.
Barton, C.Crossman, R. H. S.Grierson, E.
Battley, J. R.Daggar, G.Griffiths, D. (Rother Valley)
Bechervaise, A. E.Daines, P.Griffiths, W. D. (Moss Side)
Benson, G.Davies, Edward (Burslem)Gruffydd, Prof. W. J.
Beswick, F.Davies, Ernest (Enfield)Guest, Dr. L. Haden
Bevan, Rt. Hon. A. (Ebbw Vale)Davies, Harold (Leek)Gunter, R. J.
Binns, J.Davies, R. J. (Westhoughton)Haire, John E. (Wycombe)
Blackburn, A. R.Davies, S. O. (Merthyr)Hale, Leslie
Blenkinsop, A.Deer, G.Hall, Rt. Hon. Glenvil
Blyton, W. R.Delargy, H. J.Hamilton, Lieut.-Col. R.
Bowden, Fig. Offr. H. W.Diamond, J.Hardy, E. A.
Braddock, Mrs. E. M. (L'pl, Exch'ge)Dobbie, W.Haworth, J.
Braddock, T. (Mitcham)Dodds, N. N.Herbison, Miss M.
Brook, D. (Halifax)Driberg, T. E. N.Hewitson, Capt. W.
Brooks, T. J. (Rothwell)Dye, S.Hobson, C. R.
Broughton, Dr. A. D. D.Ede, Rt. Hon. J. C.Holman, P.
Brown, T. J. (Ince)Edelman, M.Holmes, H. E. (Hemsworth)
Brown, W. J. (Rugby)Evans, Albert (Islington, W.)Horabin, T. L.
Bruce, Maj. D. W. T.Evans, E. (Lowestoft)Houghton, A. L. N. D. (Sowerby)
Burden, T. W.Evans, John (Ogmore)Hoy, J.
Burke, W. A.Evans, S. N. (Wednesbury)Hubbard, T.
Butler, H. W. (Hackney, S.)Ewart, R.Hudson, J. H. (Ealing, W.)
Callaghan, JamesFairhurst, F.Hughes, Emrys (S. Ayr)
Carmichael, JamesFarthing, W. J.Hughes, Hector (Aberdeen, N.)
Castle, Mrs. B. A.Fernyhough, E.Hughes, H. D. (W'lverh'ton, W.)

gallant Gentleman has told us and my information; but I can tell him that we are relying on actual figures and also the evidence of our own senses.

Can the right hon. Gentleman give us any comparative figures for the period since the Budget? We have already been given the figures for beer consumption in April and, possibly, in May. After people found out that the duties on spirits were not being reduced—after all, the Budget was as long ago as 6th April—did they all drink the Chancellor's health and did consumption go up on last year, or did the downward tendency still continue? This information is very material.

The right hon. Gentleman, surely, will now answer that important question and—

rose in his place and claimed to move,"That the Question be now put."

Question put, "That the Question be now put."

The Committee divided: Ayes, 263; Noes, 135.

Hutchinson, H. L. (Rusholme)Mort, D. L.Sparks, J. A.
Hynd, H. (Hackney, C.)Moyle, A.Stewart, Michael (Fulham, E.)
Hynd, J. B. (Attercliffe)Murray, J. D.Stross, Dr. B.
Irvine, A. J. (Liverpool)Nally, W.Stubbs, A. E.
Irving, W. J. (Tottenham, N.)Naylor, T. E.Summerskill, Rt. Hon. Edith
Jay, D. P. T.Neal, H. (Claycross)Swingler, S.
Jeger, G. (Winchester)Nichol, Mrs. M. E. (Bradford, N.)Sylvester, G. O.
Jenkins, R. H.Noel-Baker, Capt. F. E. (Brentford)Symonds, A. L.
John, W.Noel-Buxton, LadyTaylor, R. J. (Morpeth)
Jones, D. T. (Hartlepool)Oldfield, W. H.Taylor, Dr. S. (Barnet)
Jones, J. H. (Bolton)Oliver, G. H.Thomas, D. E. (Aberdare)
Keenan, W.Orbach, M.Thomas, George (Cardiff)
Key, Rt. Hon. C. W.Paling, Will T. (Dewsbury)Thomas, Ivor (Keighley)
Kinghorn, Sqn.-Ldr. E.Palmer, A. M. F.Thomas, John R. (Dover)
Kinley, J.Parker, J.Thorneycroft, Harry (Clayton)
Kirby, B. V.Paton, Mrs. F. (Rushcliffe)Thurtle, Ernest
Lang, G.Paton, J. (Norwich)Titterington, M. F.
Lavers, S.Pearson, A.Tolley, L.
Lawson, Rt. Hon. J. J.Peart, T. F.Tomlinson, Rt. Hon. G.
Lee, F. (Hulme)Piratin, P.Turner-Samuels, M.
Lee, Miss J. (Cannock)Poole, Cecil (Lichfield)Ungoed-Thomas, L.
Leonard, W.Popplewell, E.Usborne, Henry
Levy, B. W.Porter, E. (Warrington)Viant, S. P.
Lewis, T. (Southampton)Porter, G. (Leeds)Walker, G. H.
Lipton, Lt.-Col. M.Price, M. PhilipsWallace, G. D. (Chislehurst)
Logan, D. G.Pryde, D. J.Warbey, W. N.
Longden, F.Pursey, Comdr. H.Watkins, T. E.
Lyne, A. W.Randall, H. E.Webb, M. (Bradford, C.)
McAdam, W.Ranger, J.Wells, P. L. (Faversham)
McAllister, G.Rankin, J.West, D. G.
McEntee, V. La. T.Reid, T. (Swindon)Wheatley, Rt. Hon. John (Edinb'gh, E.)
McGhee, H. G.Ridealgh, Mrs. M.White, H. (Derbyshire, N. E.)
McGovern, J.Roberts, Goronwy (Caernarvonshire)Whiteley, Rt. Hon. W.
Mack, J. D.Robertson, J. J. (Berwick)Wilkes, L.
McKay, J. (Wallsend)Robinson, Kenneth (St. Pancras, N.)Wilkins, W. A.
Mackay, R. W. G. (Hull, N. W.)Rogers, G. H. R.Williams, D. J. (Neath)
McKinlay, A. S.Ross, William (Kilmarnock)Williams, J. L. (Kelvingrove)
McLeavy, F.Royle, C.Williams, Ronald (Wigan)
MacPherson, Malcolm (Stirling)Scollan, T.Williams, Rt. Hon. T. (Don Valley)
Mainwaring, W. H.Scott-Elliot, W.Williams, W. T. (Hammersmith, S.)
Mallalieu, J. P. W. (Huddersfield)Segal, Dr. S.Williams, W. R. (Heston)
Mann, Mrs. J.Shackleton, E. A. A.Willis, E.
Mathers, Rt. Hon. GeorgeSharp, GranvilleWills, Mrs. E. A.
Mellish, R. J.Shinwell, Rt. Hon. E.Woodburn, Rt. Hon. A.
Messer, F.Shurmer, P.Wyatt, W.
Middleton, Mrs. L.Silverman, J. (Erdington)Yates, V. F.
Mikardo, Ian.Silverman, S. S. (Nelson)Younger, Hon. Kenneth
Millington, Wing-Comdr. E. R.Simmons, G. J.
Monslow, W.Skeffington-Lodge, T. C.TELLERS FOR THE AYES:
Morley, R.Skinnard, F. W.Mr. Joseph Henderson and
Morris, Lt.-Col. H. (Sheffield, C.)Smith, S. H. (Hull, S. W.)Mr. Hannan.
Morris, P. (Swansea, W.)Soskice, Rt. Hon. Sir Frank

NOES

Agnew, Cmdr. P. G.Elliot, Lieut.-Col. Rt. Hon. WalterJoynson-Hicks, Hon. L. W.
Amory, D. HeathcoatFletcher, W. (Bury)Kendall, W. D.
Assheton, Rt. Hon. R.Fox, Sir G.Kerr, Sir J. Graham
Astor, Hon. M.Fraser, H. C. P. (Stone)Lancaster, Col. C. G.
Baldwin, A. E.Fraser, Sir I. (Lonsdale)Langford-Holt, J.
Baxter, A. B.Galbraith, Cmdr. T. D. (Pollok)Legge-Bourke, Maj. E. A. H.
Beamish, Maj. T. V. H.Galbraith, T. G. D. (Hillhead)Lennox-Boyd, A. T.
Birch, NigelGammans, L. D.Lindsay, M. (Solihull)
Boles, Lt.-Col. D. C. (Wells)Gates, Maj. E. E.Linstead, H. N.
Boothby, R.George, Lady M. Lloyd (Anglesey)Lloyd, Maj Guy (Renfrew, E.)
Bower, N.Gomme-Duncan, Col. A.Lloyd, Selwyn (Wirral)
Boyd-Carpenter, J. A.Grimston, R. V.Low, A. R. W.
Bracken, Rt. Hon. BrendanHannon, Sir P. (Moseley)Lucas-Tooth, Sir H.
Braithwaite, Lt.-Comdr. J. G.Harden, J. R. E.MacAndrew, Col. Sir C.
Buchan-Hepburn, P. G. T.Hare, Hon. J. H. (Woodbridge)McCorquodale, Rt. Hon. M. S.
Butler, Rt. Hon. R. A. (S'ffr'n W'ld'n)Harris, F. W. (Croydon, N.)Macdonald, Sir P. (I. of Wight)
Challen, C.Harris, H. Wilson (Cambridge Univ.)McFarlane, C. S.
Channon, H.Harvey, Air-Comdre. A. V.Mackeson, Brig. H. R.
Clifton-Brown, Lt.-Col. G.Haughton, S. G.McKie, J. H. (Galloway)
Crookshank, Capt. Rt. Hon. H. F. C.Headlam, Lieut.-Col. Rt. Hon. Sir C.Maclean, F. H. R. (Lancaster)
Crosthwaite-Eyre, Col. O. E.Hinchingbrooke, ViscountMacLeod, J.
Cuthbert, W. N.Hogg, Hon. Q.Macmillan, Rt. Hn. Harold (Bromley)
Darling, Sir W. Y.Hollis, M. C.Macpherson, N. (Dumfries)
De la Bère, R.Hope, Lord J.Maitland, Comdr. J. W.
Dodds-Parker, A. D.Howard, Hon. A.Manningham-Buller, R. E.
Drewe, C.Hurd, A.Marlowe, A A. H.
Dugdale, Maj. Sir T. (Richmond)Hutchison, Lt.-Cm. Clark (E'b'rgh W.)Mellor, Sir J.
Duthie, W. S.Hutchison, Col. J. R. (Glasgow, C.)Morris, Hopkin (Carmarthen)
Eccles, D. M.Jeffreys, General Sir G.Morris-Jones, Sir H.

Morrison, Rt. Hon. W. S. (Cirencester)Roberts, Emrys (Merioneth)Thorneycroft, G. E. P. (Monmouth)
Neven-Spence, Sir B.Robertson, Sir D. (Streatham)Thornton-Kemsley, C. N.
Nicholson, G.Robinson, Roland (Blackpool, S.)Thorp, Brigadier R. A. F.
Odey, G. W.Savory, Prof. D. L.Touche, G. C.
O'Neill, Rt. Hon. Sir H.Scott, Lord W.Turton, R. H.
Osborne, C.Shephard, S. (Newark)Tweedsmuir, Lady
Peake, Rt. Hon. O.Snadden, W. M.Wadsworth, G.
Peto, Brig. C. H. M.Spearman, A. C. M.Wakefield, Sir W. W.
Pickthorn, K.Stanley, Rt Hon. O.Walker-Smith, D.
Ponsonby, Col. C. E.Stewart, J. Henderson (Fife, E.)Ward, Hon. G. R.
Poole, O. B. S. (Oswestry)Strauss, Henry (English Universities)Wheatley, Colonel M. J. (Dorset, E.)
Prior-Palmer, Brig. O.Stuart, Rt. Hon. J. (Moray)Williams, C. (Torquay)
Raikes, H. V.Studholme, H. G.Williams, Gerald (Tonbridge)
Ramsay, Maj. S.Sutcliffe, H.York, C.
Rayner, Brig. R.Taylor, C. S. (Eastbourne)
Reed, Sir S. (Aylesbury)Taylor, Vice-Adm. E. A. (P'dd't'n, S.)TELLERS FOR THE NOES:
Renton, D.Teeling, WilliamMajor Conant and
Mr. Wingfield Digby.

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

Division No. 184.]

AYES

[6.10 p.m.

Assheton, Rt. Hon. R.Headlam Lieut.-Col. Rt. Hon. Sir C.O'Neill, Rt. Hon. Sir H.
Astor, Hon. M.Hollis, M. C.Peto, Brig. C. H. M.
Baldwin, A. E.Howard, Hon. A.Poole, O. B. S. (Oswestry)
Beamish, Maj. T. V. H.Hudson, Rt. Hon. R. S. (Southport)Price-White, Lt-Col. D.
Boles, Lt.-Col. D. C. (Wells)Hurd, A.Prior-Palmer, Brig. O.
Boothby, R.Hutchison, Lt.-Cm. Clark (E'b'rgh W.)Ramsay, Maj. S.
Bower, N.Hutchison, Col. J. R. (Glasgow, C.)Rayner, Brig. R.
Boyd-Carpenter, J. A.Jeffreys, General Sir G.Reed, Sir S. (Aylesbury)
Brown, W. J. (Rugby)Joynson-Hicks, Hon. L. W.Robertson, Sir D. (Streatham)
Channon, H.Kerr, Sir J. GrahamRobinson, Roland (Blackpool, S.)
Clarke, Col. R. S.Langford-Holt, J.Scott, Lord W.
Clifton-Brown, Lt.-Col. G.Legge-Bourke, Maj. E. A. H.Snadden, W. M.
Conant, Maj. R. J. E.Lindsay, M. (Solihull)Stewart, J. Henderson (Fife, E.)
Cooper-Key, E. M.Linstead, H. N.Strauss, Henry (English Universities)
Corbett, Lieut.-Col. U. (Ludlow)Lloyd, Maj Guy (Renfrew, E.)Stuart, Rt. Hon. J. (Moray)
Cuthbert, W. N.Lloyd, Selwyn (Wirral)Studholme, H. G.
Darling, Sir W. Y.Low, A. R. W.Sutcliffe, H.
De la Bère, R.Lucas-Tooth, Sir H.Taylor, C. S. (Eastbourne)
Digby, Simon WingfieldMacAndrew, Col. Sir C.Taylor, Vice-Adm, E. A. (P'dd't'n, S.)
Drewe, C.McCorquodale, Rt. Hon. M. S.Teeling, William
Dugdale, Maj. Sir T. (Richmond)McFarlane, C. S.Thorneycroft, G. E. P. (Monmouth)
Elliot, Lieut-Col. Rt. Hon. WalterMackeson, Brig. H. R.Thornton-Kemsley, C. N.
Foster, J. G. (Northwich)McKie, J. H. (Galloway)Thorp, Brigadier R. A. F.
Fox, Sir G.Maclean, F. H. R. (Lancaster)Touche, G. C.
Fraser, H. C. P. (Stone)MacLeod, J.Tweedsmuir, Lady
Fraser, Sir I. (Lonsdale)Macmillan, Rt. Hn. Harold (Bromley)Wakefield, Sir W. W.
Galbraith, Cmdr. T. D. (Pollok)Macpherson, N. (Dumfries)Walker-Smith, D.
Galbraith, T. G. D. (Hillhead)Marlowe, A. A. H.Ward, Hon. G. R.
Gates, Maj. E. E.Marples, A. E.Wheatley, Colonel M. J. (Dorset, E.)
Gomme-Duncan, Col. A.Maude, J. C.Williams, C. (Torquay)
Grimston, R. V.Mellor, Sir J.Williams, Gerald (Tonbridge)
Harden, J. R. E.Morrison, Rt. Hon. W. S. (Cirencester)York, C.
Hare, Hon. J. H. (Woodbridge)Mott-Radclyffe, C. E.
Harris, F. W. (Croydon, N.)Neven-Spence, Sir B.TELLERS FOR THE AYES:
Harvey, Air-Comdre. A. V.Odey, G. W.Lieut-Commander Braithwaite and
Mr. Duthie.

NOES

Acland, Sir RichardBinns, J.Chetwynd, G. R.
Adams, Richard (Balham)Blackburn, A. R.Cluse, W. S.
Albu, A. H.Blenkinsop, A.Cobb, F. A.
Allen, A. C. (Bosworth)Blyton, W. R.Cocks, F. S.
Alpass, J. H.Bowden, Fig. Offr. H. W.Collick, P.
Anderson, A. (Motherwell)Braddock, Mrs. E. M. (L'pl. Exch'ge)Collindridge, F.
Attewell, H. C.Braddock, T. (Mitcham)Collins, V. J.
Austin, H. LewisBramall, E. A.Colman, Miss G. M.
Awbery, S. S.Brook, D. (Halifax)Cook, T. F.
Ayles, W. H.Brooks, T. J. (Rothwell)Cooper, G.
Ayrton Gould, Mrs. B.Broughton, Dr. A. D. D.Corlett, Dr. J.
Bacon, Miss A.Brown, T. J. (Ince)Crawley, A.
Balfour, A.Bruce, Maj. D. W. T.Crossman, R. H. S.
Barstow, P. G.Burden, T. W.Daggar, G.
Barton, C.Burke, W. A.Daines, P.
Battley, J. R.Butler, H. W. (Hackney, S.)Davies, Edward (Burslem)
Bechervaise, A. E.Callaghan, JamesDavies, Ernest (Enfield)
Benson, G.Carmichael, JamesDavies, Harold (Leek)
Beswick, F.Castle, Mrs. B. A.Davies, R. J. (Westhoughton)
Bevan, Rt. Hon. A. (Ebbw Vale)Champion, A. J.Davies, S. O. (Merthyr)

The Committee divided: Ayes, 102; Noes, 275.

Deer, G.Lang, G.Ridealgh, Mrs. M.
Delargy, H. J.Lavers, S.Roberts, Emrys (Merioneth)
Diamond, J.Lawson, Rt. Hon. J. J.Roberts, Goronwy (Caernarvonshire)
Dobbie, W.Lee, F. (Hulme)Roberts, W. (Cumberland, N.)
Dodds, N. N.Lee, Miss J. (Cannock)Robertson, J. J. (Berwick)
Driberg, T. E. N.Leonard, W.Robinson, Kenneth (St. Pancras, N.)
Dye, S.Leslie, J. R.Rogers, G. H. R.
Ede, Rt. Hon. J. C.Levy, B. W.Ross, William (Kilmarnock)
Edelman, M.Lewis, T. (Southampton)Royle, C.
Evans, Albert (Islington, W.)Lindgren, G. S.Scollan, T.
Evans, E. (Lowestoft)Lipson, D. L.Scott-Elliot, W.
Evans, John (Ogmore)Lipton, Lt.-Col M.Segal, Dr. S.
Evans, S. N. (Wednesbury)Logan, D. G.Shackleton, E. A. A.
Ewart, R.Longden, F.Sharp, Granville
Fairhurst, F.Lyne, A. W.Shinwell, Rt. Hon. E.
Farthing, W. J.McAdam, W.Shurmer, P.
Fernyhough, E.McAllister, G.Silverman, J. (Erdington)
Field, Capt. W. J.McEntee, V. La T.Silverman, S. S. (Nelson)
Follick, M.McGhee, H. G.Simmons, C. J.
Foot, M. M.McGovern, J.Skeffington-Lodge, T. C.
Forman, J. C.Mack, J. D.Skinnard, F. W.
Fraser, T. (Hamilton)McKay, J. (Wallsend)Smith, S. H. (Hull, S. W.)
Freeman, Peter (Newport)Mackay, R. W. G. (Hull, N. W.)Soskice, Rt. Hon. Sir Frank
Ganley, Mrs. C. S.McKinlay, A. S.Sparks, J. A.
George, Lady M. Lloyd (Anglesey)McLeavy, F.Stewart, Michael (Fulham, E.)
Gibbins, J.MacPherson, Malcolm (Stirling)Stross, Dr. B.
Gilzean, A.Mainwaring, W. H.Stubbs, A. E.
Glanville, J. E. (Consett)Mallalieu, J. P. W. (Huddersfield)Summerskill, Rt. Hon. Edith
Grenfell, D. R.Mann, Mrs. J.Swingler, S.
Grey, C. F.Mathers, Rt. Hon GeorgeSylvester, G. O.
Grierson, E.Mellish, R. J.Symonds, A. L.
Griffiths, D. (Rother Valley)Messer, F.Taylor, R. J. (Morpeth)
Griffiths, W. D. (Moss Side)Middleton, Mrs. L.Taylor, Dr. S. (Barnet)
Gruffydd, Prof. W. J.Mikardo, IanThomas, D. E. (Aberdare)
Guest, Dr. L. HadenMillington, Wing-Comdr E. R.Thomas, George (Cardiff)
Gunter, R. J.Monslow, W.Thorneycroft, Harry (Clayton)
Haire, John E. (Wycombe)Moody, A. S.Thurtle, Ernest
Hale, LeslieMorley, R.Titterington, M. F.
Hall, Rt. Hon. GlenvilMorris, Lt.-Col. H. (Sheffield, C.)Tolley, L.
Hamilton, Lieut.-Col. R.Morris, P. (Swansea, W.)Tomlinson, Rt. Hon. G.
Hardy, E. A.Morris, Hopkin (Carmarthen)Turner-Samuels, M.
Harris, H. Wilson (Cambridge Univ.)Mort, D. L.Ungoed-Thomas, L.
Haworth, J.Moyle, A.Vernon, Maj. W. F.
Herbison, Miss M.Murray, J. D.Viant, S. P.
Hewitson, Capt M.Nally, W.Wadsworth, G.
Hobson, C. R.Naylor, T. E.Walker, G. H.
Holman, P.Neal, H. (Claycross)Wallace, G. D. (Chislehurst)
Holmes, H. E. (Hemsworth)Nichol, Mrs. M. E. (Bradford, N.)Warbey, W. N.
Horabin, T. L.Noel-Baker, Capt. F. E. (Brentford)Watkins, T. E.
Houghton, A. L. N. D. (Sowerby)Noel-Buxton, LadyWebb, M. (Bradford, C.)
Hoy, J.Oldfield, W. H.Wells, P. L. (Faversham)
Hubbard, T.Oliver, G. H.West, D. G.
Hudson, J. H. (Ealing, W.)Orbach, M.Wheatley, Rt. Hon. John (Edinb'gh, E.)
Hughes, Emrys (S. Ayr)Paling, Will T. (Dewsbury)White, H. (Derbyshire, N. E.)
Hughes, Hector (Aberdeen, N.)Palmer, A. M. F.Whiteley, Rt. Hon. W.
Hughes, H. D. (W'lverh'ton, W.)Parker, J.Wilkes, L.
Hutchinson, H. L. (Rusholme)Paton, Mrs. F. (Rushcliffe)Wilkins, W. A.
Hynd, H. (Hackney, C.)Paton, J. (Norwich)Williams, D. J. (Neath)
Hynd, J. B. (Attercliffe)Pearson, A.Williams, J. L. (Kelvingrove)
Irvine, A. J. (Liverpool)Peart, T. F.Williams, Ronald (Wigan)
Irving, W. J. (Tottenham, N.)Piratin, P.Williams, Rt. Hon. T. (Don Valley)
Jay, D. P. T.Poole, Cecil (Lichfield)Williams, W. T. (Hammersmith, S.)
Jeger, G. (Winchester)Popplewell, E.Williams, W. R. (Heston)
Jenkins, R. H.Porter, E. (Warrington)Willis, E.
John, W.Porter, G. (Leeds)Wills, Mrs. E. A.
Jones, D. T. (Hartlepool)Price, M. PhilipsWoodburn, Rt. Hon. A.
Jones, J. H. (Bolton)Proctor, W. T.Wyatt, W.
Keenan, W.Pryde, D. J.Yates, V. F.
Kendall, W. D.Pursey, Comdr. H.Younger, Hon. Kenneth
Key, Rt. Hon. C. W.Randall, H. E.
Kinghorn, Sqn.-Ldr. E.Ranger, J.TELLERS FOR THE NOES:
Kinley, J.Rankin, J.Mr. Joseph Henderson and
Kirby, B. V.Reid, T. (Swindon)Mr. Hannan.