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New Clause—(Amendment Of Finance Act, 1947, S 33)

Volume 466: debated on Tuesday 28 June 1949

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Section thirty-three of the Finance Act, 1947, shall have effect as if there were substituted for the words "two thousand pounds," the words "three thousand pounds," and for the words "twelve thousand pounds," the words "eighteen thousand pounds," wherever they appear.—[ Mr. Selwyn Lloyd.]

Brought up, and read the First time.

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

This new Clause proposes an Amendment to the Finance Act, 1947, and the relevant provision of that Act which I want to raise is Section 33. It deals with the abatement in respect of Profits Tax, which is given to small businesses. The effect of that Section is that any business or any limited company which earns £12,000 or less receives an abatement in respect of Profits Tax, and the way in which that abatement is calculated is for the amount of the profits actually made to be deducted from £12,000 and the resulting sum to be divided by five. If, for example, a company made a profit of £2,000, that sum deducted from £12,000 would leave £10,000, which, divided by five, produces £2,000, which is the amount of the abatement.

I notice that the Solicitor-General seems to be doubtful about my method of working it out, but I am advised that it is calculated that way. To take another example, that of a company which earns £8,000, in that case that figure is deducted from £12,000, bringing it to £4,000, one-fifth of which is £800, which is the amount of the abatement, and the company therefore pays Profits Tax on £7,200. I am greatly reinforced to find that both right hon. Gentlemen, the Financial Secretary and the Solicitor-General, are now nodding vigorously to that proposition. This new Clause increases the limit up to £18,000, so that a company which earns £3,000 will pay no Profits Tax, and, beween £3,000 and £18,000, there will be an abatement calculated in the way I have described. This new Clause is meant to be a direct encouragement to the smaller type of limited company.

At the present time we receive a great many exhortations to enterprise. Individuals are invited to become merchant adventurers, to go forth and sell British goods in all parts of the world, to develop new processes, to make new inventions, and to display that great spirit of enterprise which our forefathers certainly had. Those are the exhortations. Let us give these people, whom we expect to undertake such tasks, some encouragement. It is extremely unlikely these days that they will embark on such projects unless protected by the Companies Act, unless they are in the form of limited liability companies.

This new Clause deals only with limited liability companies and it will provide a direct incentive to the smaller type of company, because I suggest that hon. Gentlemen opposite and the Government are completely blind to the facts of life in this respect. [HON. MEMBERS: "In every respect."] I am not dealing with every respect, although it may be in every respect. In this respect they continue to expect people to risk their money on the basis that if they make profits the Government will take 50 per cent. of the profits and if they make losses the Government will not contribute one penny towards those losses. That is a statement of fact; in fact, the Economic Secretary to the Treasury had the effrontery the other day to say that that made the Government a partner in industry.

Of course, it is perfectly true that the whole of the social services and the other structures of Government in this country depend on the sums of money which are extracted by the Government from private enterprise, and I hope that hon. Members will believe me when I say—and I say it as one whose constituency is closely concerned with a great trading and commercial area—that the smaller type of enterprise is just not being begun at the present time. People are not prepared to risk their money, if they have any, on those terms. It is really essential, if these exhortations are to have any practical effect, for the Government to do something concrete about them.

This proposal, for which I ask support in all parts of the Committee, is a pretty modest one, as I think even the Government will admit. It gives no relief at all to a company earning over £18,000; it simply increases the range of this abatement. I submit to the Committee that it is a small but definite step whereby the Government can change this Finance Bill, which is a disincentive Bill, in one small respect at least, into an incentive Bill. It is a Clause which will help British industry in its present tasks.

I rise to support the new Clause moved by my hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd). We are constantly talking in this country about helping the smaller manufacturer and the smaller trader and from time to time His Majesty's Government have indicated their support of that proposal. Here is an opportunity to give evidence of the desire to help the smaller manufacturer by making a modest concession through this new Clause.

At the present time, the small manufacturer in this country is making a most substantial contribution to our export trade, particularly to the United States. If the Chancellor of the Exchequer were here, I should ask him to witness the extent to which the small manufacturer is responding to the appeal which is constantly made to intensify our efforts to improve our competitive power in markets abroad. The small manufacturers are suffering from a heavy burden in very many of the costs of production. The load of taxation on their shoulders is beyond expression, and it bears heavily upon them in dealing with their everyday life in productive enterprise in this country. Unless the Committee are prepared to give some consideration to the difficulties which beset smaller manufacturers from day to day, they will feel themselves helpless in dealing with the constant exhortations and appeals made to them by the Administration for enterprise, for extending production, and so on.

I know that the Financial Secretary has made speeches all over the country saying what a magnificent thing it would be if the smaller productive enterprises competed more effectively abroad. Now he has an opportunity to say to smaller manufacturers, "We are going to do something to help you over the difficulties you experience in every-day life in industry." It is no good right hon. Gentlemen on the Front Bench opposite making pleasant speeches about sympathy to industry in this country in fighting our battles in foreign markets. Let the Government do something practical and helpful. An opportunity is submitted to them by my hon. and learned Friend. I ask the Government to show evidence of their real sympathy with the smaller manufacturers of this country by helping them to get out of the difficulties in which they find themselves.

I do not think it is realised how great a part in the industrial life of this country is played by the small businesses employing anything from 10 to 200 or 300 people. It is vital for the country at the present time, as Government spokesmen have said, to increase our productivity and to develop our export trade. Here is one way—it is only a small way, but it is one way—to help the small businesses to develop. Much of the present prosperity of this country was developed and built up by small businesses which became large businesses at the end of the last century and the beginning of this. With the burden of taxation we now have, it will be quite impossible in future for any small businesses to develop. Here is one effective way in which some relief of the burden and some inducement to enterprise can be given to the small manufacturer—inducement to put his back into his business and to go ahead. I do hope that the Financial Secretary, for the reasons which I have given and which other hon. Members on this side have given, will sympathetically consider accepting this proposal.

I am sorry to say the Government cannot see their way to make the further concession which is asked for by this new Clause. The Profits Tax was designed in part to reimburse the Exchequer for the fact that the Excess Profits Tax came to an end in 1946. The exemption in respect of companies earning less than £2,000, and the further provision for abatement were, in fact, intended, as hon. Gentlemen opposite have reminded the Committee, to assist small businesses. That was their object. I am afraid that in present day circumstances it would be impossible, having regard to the general calls on the Exchequer, to extend that exemption further than it exists at the moment. The cost of the concession would be £6,500,000, or, having regard to the fact that Profits Tax counts as a deduction for the purposes of Income Tax, the net sum of £3,500,000. I therefore regret to say that, having regard to the cost that would be entailed, the Government do not see their way to extend further the provision which they have made in the existing framework of the Profits Tax legislation to assist small companies.

Has the Treasury advised the right hon. and learned Gentleman, or has any calculation been made, of the extent that the export trade, as a result of this concession, would gain as against the £3,500,000 lost by the Treasury? Saving money for the Exchequer in many respects means crippling business and our competitive power abroad.

It is extremely difficult to make a calculation of the gains that would come to the Exchequer from increased export trade owing to this concession. There would be no certain basis upon which any such calculation could be made.

9.45 p.m.

I think the Solicitor-General has done himself less than justice. This measure is one which he might consider because it may well be that it is an insurance against the problems and difficulties which we are facing. He may be aware that during the great American slump small businesses with little capital collapsed like ninepins, and large businesses employing tens of thousands of people were so overcapitalised that they collapsed by the score. The businesses which strengthened the economy of the United States during that great slump were the large number of small family or privately-owned businesses.

This proposal is offered to the Treasury as a buttress against the impending slump which may well come upon us. This reinforcement of £3,500,000 seems petty when we consider the additional estimate for health services of £50 million. I cannot think that £3,500,000 could be better spent. These individually-owned businesses are not run by bloated capitalists; they are not people who are going to enrich themselves at the expense of the community. These people are at the grindstone and are grappling with the day-to-day and the hour-to-hour problems of business. There is a case for this new Clause if only because of the fear that is in the minds of all of us, and not least in the minds of those who occupy the Treasury Bench. Are we going to offer a lift to these people, to encourage them in the ordeal through which they are going to carry the country?

Do His Majesty's Government recognise that this is a nation of shopkeepers, small industrialists and small business men, and that while the great schemes to which we have set our minds may well be realised, it is this solid group—some 60 per cent. of our manufacturing and industrial population—who are carrying the burden of this country's taxation? I ask the Treasury to accept this Clause. They will not regret it, and it will give encouragement to a class who have had, goodness knows, little encouragement from His Majesty's Government.

I think that the statement made by the Solicitor-General is a most shortsighted statement of policy. The position is vastly different from what it was a year or two ago from the point of view of small traders. My hon. Friend the Member for South Edinburgh (Sir W. Darling) said that 60 per cent. of our manufacturing population are carrying the burden of the taxation in this country. I think not 60 per cent. but the better part of 70 per cent. of these small traders are experiencing great difficulties today. The situation with regard to outstanding accounts in respect of debtors, and the stocks that they are having to carry and which are moving so very slowly, is getting them into a difficult financial situation.

If the Government want any proof of this fact, they have only to refer to many of the banks to see how the accounts turn over from the blue to the red. If the Government really want private enterprise to go ahead, how can a paltry £3,500,000 affect such a major decision as this? A year or two ago their decision may have been right, but the position has now materially changed. The small traders are the backbone of our country and have built it up to what it is today. They are the people who must have assistance under the present circumstances.

Taking the long-sighted point of view, the Government might well get back much more than they give. As far as the machinery is concerned, and as far as their internal resources are concerned, the small private traders need further assistance to strengthen their position. They are breaking down in many respects against the competition they are having to meet, but they are trying to play their part in the export market by linking themselves together to make themselves sounder to meet that competition. But behind them the machinery is not supporting their efforts. We are making it impossible for them to play their full part. The concession I am most anxious to see is a relaxation of the Profits Tax. Surely the Government can take a bold step to help the small traders. I hope that my hon. Friends will press this to a Division, if the Government will not give way.

The reply which has been given by the Solicitor-General is a very disturbing reply from the point of view of its revelation of the mentality of the Government. He dealt with the new Clause purely from the budgetary point of view. He said that this would cost £3½ million which we cannot afford, and that therefore it must be rejected. He never addressed any arguments to the far more important consideration, the stimulus which would be given to the small companies concerned. That quite rightly, was the essence of the case that has been put forward; that in the situation which confronts the country today it is essential to provide some additional encouragement and incentive to those who are running these small businesses. The Solicitor-General did not reply to that at all, nor did he say a single word on that part of the case.

It is surely significant and disquieting that the Government, in supplying the right hon. and learned Gentleman with his brief, did not think that that was an aspect of the matter at all. It indicates that the Government have no appreciation of the situation into which we are proceeding very rapidly at this moment. They are dealing with it only in the old fashioned budgetary way. When they are faced with a situation of ever-increasing difficulties in regard to British exports, and ever-increasing difficulties for British industry and enterprise, one would have thought that the Government would decide to help British industry and enterprise, and that therefore they would think that to be a consideration worth mentioning. What is terribly disquieting is that these things are considered by the Government to be unimportant and irrelevant, and if that is the mentality with which they are conducting our affairs against the gathering background of a world economic crisis, then heaven help this country.

I hope that by now it is apparent to Members opposite how restrictive this Budget of the Chancellor of the Exchequer has been. For four days now we have pleaded for concessions to be made to different classes of the community, and many of these classes are classes with which Members opposite have the greatest sympathy. They now see that the Chancellor of the Exchequer who has deserted the Debate—[HON. MEMBERS: "Oh."]—has left to go to Paris where he may or may not do this country any good—[HON. MEMBERS: "Shame."]—has left this Debate and gone to Paris—[HON. MEMBERS: "Withdraw."]—leaving the Treasury with the instructions—

Since the noble Lord does not seem likely to withdraw—[HON. MEMBERS: "He has nothing to withdraw."] I am not suggesting that he has anything to withdraw—the Debate will now continue in quietness.

The Chancellor has left those who represent him on the Treasury Bench with explicit instructions that no concession costing any money at all is to be made in these Debates. That is a situation which, in my short Parliamentary experience, is without parallel. Last year the Chancellor and his predecessor allowed latitude to Members of the House to develop the merits of their cases and to secure concessions of a relatively simple order. But on this occasion we have not been allowed to get away with any concession costing any money. The only things which have been conceded are two minor points affecting cinemas and dogs, which did not cost the Treasury a penny. The diktat is that nothing is to be done to restore the fortunes of small businesses, or families, or local groups, or whatever it may be. Not one item of Government expenditure is to be remitted. I wonder why my right hon. and hon. Friends have bothered to continue the Debate, because it is obvious that right hon. and hon. Members opposite have come here without any intention of entering into the merits of any of our discussions.

This is the most deplorable exhibition I have ever seen. It shows the mentality of the Treasury and the Chancellor under the new dispensation and the contumely with which the right hon. and learned Gentleman treats the House of Commons. I know that many Members opposite would like to see concessions made to their own constituents; indeed, they pleaded for them not only in the Debate on the Budget but also in a private committee upstairs, as was revealed to us in the newspapers. How they are able to sit still and accept a blank refusal to grant them any kind of concession, I simply do not know.

Here we have a typical case of small businesses which, as has been pointed out, are serving the country magnificently today. Perhaps a small company, two years ago, made £2,000 profit and paid no Excess Profits Tax. Within the last two years it expanded until now it is penalised by entering into the range in which it has to pay Profits Tax. Instead of being rewarded for the extra profit it has made in carrying out the wishes of the country in increasing productivity and exports, it is denied any remission of tax. The spectacle now before us is deplorable; the Committee is being treated as a rubber stamp by the Treasury and the iron Chancellor, and the sooner we get rid of him and his ideas the better it will be for the country.

I often find myself in agreement with my hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), but I did so more particularly tonight when he expressed his anxiety at the state of mind of the Government as exposed by the Solicitor-General. The right hon. and learned Gentleman told us, as he has told us on previous occasions, that this concession must be refused because it would cost £3½ million, but he made no difference whatever between the cost of £3½ million going out to undistributed profits and the cost of a concession amounting to £3½ million if it were to reduce Purchase Tax or some other tax which would increase the spending power of the country.

10.0 p.m.

I think the Solicitor-General must have been forgetting his present master, and must have thought that he was still in the days of the Chancellor of the Duchy, who was renowned for being entirely old-fashioned and out of date in his economic views. I would not say the same of the present Chancellor to the same extent. Surely under the modern conception of finance it is clearly understood that in a time of full employment, such as we are experiencing now, the whole point of the Budget is to sterilise that amount of purchasing power in order to get a balance between the total resources of the country and the total demand. There is no point in having an enormous Budget for the sake of it, in order to get that balance.

A concession on undistributed profits makes no difference to the amount of purchasing power, so that that is a concession of an altogether different order of merit from a concession on Purchase Tax or any other concession which would increase the purchasing power of the country. On any concession of that sort I should very much hesitate to vote against the Government; but a concession of this sort is an entirely different matter. I ask the Solicitor-General whether he really appreciates the fundamental difference between those two, because I can assure him that there is a considerable number of thinking people in the country who are not particularly opposed to the Socialist Party but who are extremely disturbed at the complete inability of the Socialist Party Front Bench at the present time to understand the modern conception of finance, and who realise that in many ways they are completely out of date. Indeed, I can very well understand why, if the Government anticipate such old-fashioned, out-of-date, obtuse statements such as we have had from the Solicitor-General tonight, they prefer all-night Sittings in the hope that those statements will not be widely reported in the Press.

I would make an appeal to the leaders on the Treasury Bench to give an answer to the arguments put forward from this side of the Committee. The Solicitor-General has obviously come to the Committee with a brief marked "This is a most unimportant Clause," because he has not given us any arguments or reasons in response to those put forward by my hon. Friends. It must be quite clear to all sides of the Committee that we on this side attach great importance to this new Clause. It may seem very small upon the Order Paper, but it is very important. We cannot make a success of the British economy and of our drive for production unless some incentive and encouragement is given to the small businesses of this country.

During the Debate I heard a remark passed from the Government Benches "What about the workers?" [HON. MEMBERS: "Hear, hear."] I now hear it repeated. Let hon. Members opposite address themselves to this argument. We on this side at least have tried to attach importance to the value of the British workers and of the work they can do for us at the present time; it is quite clear that they form a most vital element of our population. Let us take that for granted. I assure hon. Members that we are quite sincere on that point. Yet these small businesses have particularly close and personal relations with their workers, and I feel quite convinced that we shall have the support of the majority of workers attached to businesses like these when they realise the negative stand the Government have taken on this matter tonight. One advantage of the small business, especially a family business, is that there is this close personal relationship between what is known as "the boss" and the workers; they know that they are all in the same boat together, and they must know the difficulties their businesses are suffering from at the present time.

I feel convinced that there is a fundamental difference of principle between the Opposition and the Government tonight. We believe that it would restore the productivity of this country and assure the standard of life of the workers if business and industry were given incentives. But if the Government take up a wholly negative attitude we cannot be sure where that will lead. It is because we have been disappointed at the Government's attitude that we are determined to take this matter to a Division. I implore the Government to give us some reasons against the considered arguments we have put forward.

I am disturbed about the impending disaster which we are told is awaiting the small traders. The Opposition have suggested that 60, or may be 70 per cent. of the businesses carried on in this country are small businesses, and that taking this £3½ million will almost ruin them. [HON. MEMBERS: "No."] Well, at least they say that there is no incentive. The profits earned last year were somewhere in the region of £2,000 million.

It includes all that kind of business. What effect would £3½ million have on those profits?

Let me quote the words which the Chancellor of the Exchequer, whose absence we all regret tonight and the reasons for which we understand, used at Workington on the subject of profits on 9th January, when he said:

"A large part of the so-called profit is not a bare surplus, but must be put to reserve to pay for replacements and repairs of plant and machinery and for industrial expansion to meet our new production needs."
It is in the exact sense of those words of the Chancellor of the Exchequer that we are moving this Amendment tonight, and I am using the Chancellor's words to answer the hon. Gentleman and the Government.

As I understood it, the argument of the Solicitor-General for maintaining this £3½ million is because of the abolition of part of the Excess Profits Tax in 1946. He said it was necessary to have some compensation for the loss of revenues from Excess Profits Tax. I find it very hard to understand that argument, because the existence of this £3½ million and the loss of of revenue by the abolition of the Excess Profits Tax cannot be related in importance or in any other way. How can it be compensation for the loss of Excess Profits Tax? The sum of £3½ million is in no sense compensation, but it would be of great advantage to the small businessmen of this country. As I see it, the one argument put forward by the Solicitor-General appears to be quite irrelevant in this connection.

I am sorry the right hon. Gentleman opposite has not thought fit to reply to the moderate suggestions put forward by my right hon. Friend the Member for Saffron Walden (Mr. R. A. Butler). I should like to recall to the Committee that at the end of April, the President of the Board of Trade saw fit to summon rather peremptorily, a gathering of businessmen representing groups of small businesses in this country and to exhort them to further efforts in order to overcome the difficulties which he and the Government quite rightly saw were facing this country. I should like to ask the right hon. Gentleman what concrete help are the Government giving to those persons to help them to become merchant adventurers, a phrase used on that occasion, and to fulfil the task that was set them by the right hon. Gentleman.

At that meeting the attitude was that it was all very well to offer words of that kind to industry, but actions were necessary. The attitude of the Government Front Bench tonight, in refusing to reply to my right hon. Friend, is deplorable, and I am bound to say that the attitude of hon. Gentlemen opposite shows exactly how much the Socialist Party are prepared to support the sort of plea put forward in April by the President of the Board of Trade. It seems to me an extraordinary thing that the Members of the Government can call a conference of the kind I have mentioned, and then two or three months later, when pleas are made to them, similar to the pleas which they made on that occasion to those small businesses, they should flatly refuse to give even moderate support to those industries to carry out the tasks which they have to undertake.

Neither my right hon. and learned Friend nor I, speaking for the Government, desires to appear in the slightest bit discourteous to the arguments which have been advanced by hon. Gentlemen opposite. What my right hon. and learned Friend said, in brief, was that we had in existence an Excess Profits Tax. In 1946, for reasons which appeared good, it was brought to an end, and the question arose whether anything should take its place. In the circumstances of the time, in view of the appeals made to the workers generally, it was felt—at that time the House generally agreed—that some other tax on profits should take its place, and the Profits Tax as such came into existence. Even then my right hon. and learned Friend took into account that there were small businesses of the kind which have been spoken about with such lucidity this evening by hon. Gentlemen opposite, and I think that the concession then made was not a bad one.

What the hon. and learned Member for Wirral (Mr. Selwyn Lloyd) now wants to do is to increase the £2,000 to £3,000 at the lower end and the £12,000 to £18,000 at the higher. As

Division No. 188.]


[10.15 p.m.

Acland, Sir R.Broughton, Dr. A. D. D.Davies, R. J. (Westhoughton)
Adams, Richard (Balham)Brown, George (Belper)Davies, S. O. (Merthyr)
Albu, A. H.Brown, T. J. (Ince)Deer, G.
Allen, A. C. (Bosworth)Bruce, Maj. D. W. T.Delargy, H. J.
Alpass, J. H.Burden, T. W.Diamond, J.
Attewell, H. C.Burke, W. A.Dobbie, W.
Austin, H. LewisButler, H. W. (Hackney, S.)Dodds, N. N.
Awbery, S. S.Callaghan, JamesDriberg, T. E. N.
Ayles, W. H.Carmichael, JamesDugdale, J. (W. Bromwich)
Ayrton Gould, Mrs. B.Champion, A. J.Dye, S.
Bacon, Miss A.Chetwynd, G. R.Ede, Rt. Hon. J. C.
Baird, J.Cobb, F. A.Edwards, W. J. (Whitechapel)
Balfour, A.Cocks, F. S.Evans, Albert (Islington, W.)
Barnes, Rt. Hon. A. J.Coldrick, W.Evans, E. (Lowestoft)
Barstow, P. G.Collick, P.Evans, John (Ogmore)
Barton, C.Collindridge, F.Evans, S. N. (Wednesbury)
Bechervaise, A. E.Collins, V. J.Ewart, R.
Benson, G.Colman, Miss G. M.Fairhurst, F.
Berry, H.Cook, T. F.Farthing, W. J.
Beswick, F.Cooper, G.Fernyhough, E.
Bing, G. H. C.Corbet, Mrs. F. K. (Camb'well, N. W.)Follick, M.
Binns, J.Corlett, Dr. J.Forman, J. C.
Blackburn, A. R.Cove, W. G.Fraser, T. (Hamilton)
Blenkinsop, A.Crawley, A.Gaitskell, Rt. Hon. H. T. N.
Blyton, W. R.Cullen, Mrs.Gallacher, W.
Bowden, Fig. Offr. H. W.Daggar, G.Ganley, Mrs. C. S.
Braddock, Mrs. E. M. (L'pl, Exch'ge)Daines, P.Gibbins, J.
Braddock, T. (Mitcham)Davies, Edward (Burslem)Gibson, C. W.
Bramall, E. A.Davies, Ernest (Enfield)Gilzean, A.
Brook, D. (Halifax)Davies, Harold (Leek)Glanville, J. E. (Consett)
Brooks, T. J. (Rothwell)Davies, Haydn (St. Pancras, S. W.)Gordon-Walker, P. C.

my right hon. and learned Friend said, apart altogether from the arguments for and against, it would cost him too much. However, something is being done for small businesses. As somebody remarked, if a firm previously making less than £2,000 profits went to £3,000, they ought not be penalised for so doing. However, that would apply to all of us. We are all bearing our fair share of the very heavy taxation, and it would be unfair at this juncture to pick out one class, however deserving that class might be, and say, "We are going to put you into a special category by yourself." It would not look well.

The case has not been made out. In any case, whether a case is made out or not, the cost to the Chancellor of the Exchequer at this juncture would be more than my right hon. and learned Friend can contemplate. It is £6,500,000 gross and £3,500,000 net. I am sorry, but my right hon. and learned Friend cannot agree to forgo that amount.

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

The Committee divided: Ayes, 285; Noes, 137.

Grey, C. F.McGhee, H. G.Stott-Elliot, W.
Grierson, E.McGovern, J.Segal, Dr. S.
Griffiths, D. (Rother Valley)Mack, J. D.Shackleton, E. A. A.
Griffiths, Rt. Hon. J. (Llanelly)McKay, J. (Wallsend)Sharp, Granville
Griffiths, W. D. (Moss Side)Mackay, R. W. G. (Hull, N. W.)Shurmer, P.
Guest, Dr. L. HadenMcKinlay, A. S.Silkin, Rt. Hon. L.
Gunter, R. J.McLeavy, F.Silverman, J. (Erdington)
Guy, W. H.Macpherson, T. (Romford)Silverman, S. S. (Nelson)
Haire, John E. (Wycombe)Mainwaring, W. H.Simmons, C. J.
Hale, LeslieMallalieu, J. P. W. (Huddersfield)Skeffington-Lodge, T. C.
Hall, Rt. Hon. GlenvilMann, Mrs. J.Skinnard, F. W.
Hamilton, Lieut.-Col. R.Manning, C. (Camberwell, N.)Smith, C. (Colchester)
Hannan, W. (Maryhill)Marquand, Rt Hon. H. A.Smith, S. H. (Hull, S. W.)
Hardy, E. A.Mathers, Rt Hon GeorgeSorensen, R. W.
Hastings, Dr. Somerville.Mellish, R. J.Soskice, Rt. Hon Sir Frank
Haworth, J.Messer, F.Sparks, J. A.
Henderson, Rt. Hn. A. (Kingswinford)Middleton, Mrs. L.Stross, Dr. B.
Henderson, Joseph (Ardwick)Millington, Wing-Comdr E. R.Stubbs, A. E.
Herbison, Miss M.Monslow, W.Sylvester, G. O.
Hewitson, Capt. M.Morley, R.Symonds, A. L.
Hobson, C. R.Morris, Lt.-Col. H. (Sheffield, C.)Taylor, R. J. (Morpeth)
Holman, P.Morris, P. (Swansea, W.)Thomas, D. E. (Aberdare)
Holmes, H. E. (Hemsworth)Mort, D. L.Thomas, George (Cardiff)
Horabin, T. L.Moyle, A.Thomas, I. O. (Wrekin)
Houghton, A. L. N. D. (Sowerby)Murray, J. D.Thomas, John R. (Dover)
Hoy, J.Nally, W.Thorneycroft, Harry (Clayton)
Hubbard, T.Neal, H. (Claycross)Thurtle, Ernest
Hudson, J. H. (Ealing, W.)Nichol, Mrs. M. E. (Bradford, N.)Timmons, J.
Hughes, Emrys (S. Ayr)Nicholls, H. R. (Stratford)Titterington, M. F.
Hughes, Hector (Aberdeen, N.)Noel-Baker, Rt. Hon. P. J. (Derby)Tolley, L.
Hughes, H. D. (W'lverh'pton, W.)Oldfield, W. H.Tomlinson, Rt. Hon. G.
Hynd, J. B. (Attercliffe)Oliver, G. H.Turner-Samuels, M.
Irvine, A. J. (Liverpool)Orbach, M.Ungoed-Thomas, L.
Irving, W. J. (Tottenham, N)Paget, R. T.Usborne, Henry
Isaacs, Rt. Hon. G. A.Paling, Will T. (Dewsbury)Vernon, Maj. W. F.
Jay, D. P. T.Palmer, A. M. F.Walker, G. H.
Jeger, G. (Winchester)Pargiter, G. A.Wallace, G. D. (Chislehurst)
Jeger, Dr. S. W. (St. Pancras, S. E.)Parker, J.Wallace, H. W. (Walthamstow, E.)
Jenkins, R. H.Parkin, B. T.Warbey, W. N.
John, W.Paton, Mrs. F. (Rushcliffe)Watkins, T. E.
Jones, Rt. Hon. A. C. (Shipley)Paton, J. (Norwich)Webb, M. (Bradford, C.)
Jones, D. T. (Hartlepool)Pearson, A.Weitzman, D.
Jones, Elwyn (Plaistow)Peart, T. F.Wells, P. L. (Faversham)
Jones, J. H. (Bolton)Poole, Cecil (Llehfield)West, D. G.
Keenan, W.Porter, E. (Warrington)Wheatley, Rt. Hon. John (Edin'gh, E.)
Key, Rt. Hon. C. W.Porter, G. (Leeds)White, H. (Derbyshire, N. E.)
Kinghorn, Sqn.-Ldr. E.Proctor, W. T.Whiteley, Rt. Hon W.
Kinley, J.Pryde, D. J.Wigg, George
Kirby, B. V.Pursey, Comdr. H.Wilcock, Group-Capt. C. A. B.
Lang, G.Randall, H. E.Wilkes, L.
Lavers, S.Ranger, J.Wilkins, W. A.
Lee, F. (Hulme)Rankin, J.Willey, F. T. (Sunderland)
Lee, Miss J. (Cannock)Rees-Williams, D. R.Williams, D. J. (Neath)
Leonard, W.Reid, T. (Swindon)Williams, J. L. (Kelvingrove)
Leslie, J. R.Rhodes, H.Williams, Ronald (Wigan)
Levy, B. W.Richards, R.Williams, W. T. (Hammersmith, S.)
Lewis, J. (Bolton)Ridealgh, Mrs. M.Williams, W. R. (Heston)
Lewis, T. (Southampton)Robens, A.Willis, E.
Lindgren, G. S.Roberts, Goronwy (Caernarvonshire)Wills, Mrs. E. A.
Logan, D. G.Robinson, Kenneth (St Pancras, N.)Woodburn, Rt. Hon. A.
Longden, F.Rogers, G. H. R.Wyatt, W.
Lyne, A. W.Ross, William (Kilmarnock)Yates, V. F.
McAdam, W.Royle, C.
McAllister, G.Sargood, R.TELLERS FOR THE AYES:
McEntee, V. La. T.Scollan, T.Mr. Popplewell and Mr. Snow.


Amory, D. HeathcoatClarke, Col. R. S.Eden, Rt. Hon. A.
Assheton, Rt. Hon. R.Clifton-Brown, Lt.-Col G.Erroll, F. J.
Astor, Hon. M.Conant, Maj. R. J. E.Fletcher, W. (Bury)
Baldwin, A. E.Cooper-Key, E. M.Foster, J. G. (Northwich)
Beamish, Maj. T. V. H.Corbett, Lieut.-Col. U. (Ludlow)Fox, Sir G.
Birch, NigelCrookshank, Capt. Rt. Hon. H. F. C.Fraser, Sir I. (Lonsdale)
Boles, Lt.-Col. D. C. (Wells)Crosthwaite-Eyre, Col. O. E.Fyfe, Rt. Hon. Sir D. P. M.
Bowen, R.Crowder, Capt, John E.Gage, C.
Bower, N.Cuthbert, W. N.Galbraith, Cmdr. T. D. (Pollok)
Boyd-Carpenter, J. A.Darling, Sir W. Y.Galbraith, T. G. D. (Hillhead)
Braithwaite, Lt.-Comdr. J. G.Digby, Simon WingfieldGammans, L. D.
Buchan-Hepburn, P. G. T.Dodds-Parker, A. D.Gates, Maj. E. E.
Butler, Rt. Hn. R. A. (S'ffr'n W'ld'n)Dower, Col. A. V. G. (Penrith)George, Lady M. Lloyd (Anglesey)
Carsen, E.Drewe, C.Glyn, Sir R.
Challen, C.Dugdale, Maj. Sir T. (Richmond)Gomme-Duncan, Col. A.
Channon, H.Duthie, W. S.Grimston, R. V.

Hannon, Sir P. (Moseley)Mackeson, Brig. H. R.Scott, Lord W.
Harden, J. R. E.McKie, J. H. (Galloway)Shephard, S. (Newark)
Hare, Hon. J. H. (Woodbridge)Maclean, F. H. R. (Lancaster)Smiles, Lt.-Col. Sir W.
Harris, F. W. (Croydon, N.)Maitland, Comdr. J. W.Snadden, W. M.
Harris, H. Wilson (Cambridge Univ.)Marlowe, A. A. H.Spearman, A. C. M.
Harvey, Air-Comdre. A. V.Marples, A. E.Stanley, Rt. Hon O.
Headlam, Lieut-Col. Rt. Hon. Sir C.Maude, J. C.Strauss, Henry (English Universities)
Henderson, John (Cathcart)Mellor, Sir J.Stuart, Rt. Hon. J. (Moray)
Hinchingbrooke, ViscountMorris, Hopkin (Carmarthen)Studholme, H. G.
Hogg, Hon Q.Morrison, Rt. Hon. W. S. (Cirencester)Sutcliffe, H.
Hollis, M. C.Mott-Radclyffe, C. E.Taylor, C. S. (Eastbourne)
Howard, Hon. A.Neven-Spence, Sir B.Teeling, William
Hudson, Rt. Hon. R. S. (Southport)Noble, Comdr. A. H. P.Thomas, Ivor (Keighley)
Hurd, A.Nutting, AnthonyThomas, J. P. L. (Hereford)
Hutchison, Lt-Cdr. Clark (Edin'gh, W.)Odey, G. W.Thorneycroft, G. E. P. (Monmouth)
Hutchison, Col. J. R. (Glasgow, C.)O'Neill, Rt. Hon. Sir H.Thornton-Kemsley, C. N.
Jeffreys, General Sir G.Osborne, C.Thorp, Brigadier R. A. F.
Joynson-Hicks, Hon. L. W.Peake, Rt. Hon. O.Touche, G. C.
Keeling, E. H.Peto, Brig C. H. M.Turton, R. H.
Kendall, W. D.Pickthorn, K.Wakefield, Sir W. W.
Langford-Holt, J.Poole, O. B. S. (Oswestry)Walker-Smith, D.
Law, Rt. Hon. R. K.Prior-Palmer, Brig. O.Ward, Hon. G. R.
Lennox-Boyd, A. T.Raikes, H. V.White, J. B. (Canterbury)
Linstead, H. N.Rayner, Brig. R.Williams, C. (Torquay)
Lipson, D. L.Renton, D.Williams, Gerald (Tonbridge)
Lloyd, Selwyn (Wirral)Roberts, Emrys (Merioneth)Winterton, Rt. Hon. Earl
Low, A. R. W.Roberts, H. (Handsworth)York, C.
Lucas-Tooth, Sir H.Robinson, Roland (Blackpool, S.)
McCorquodale, Rt. Hon. M. S.Ropner, Col. L.TELLERS FOR THE NOES:
Macdonald, Sir P. (I. of Wight)Ross, Sir R. D. (Londonderry)Commander Agnew and
McFarlane, C. S.Sanderson, Sir F.Colonel Wheatley.

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

Division No. 189.]


[10.25 p.m.

Agnew, Cmdr. P. G.Grimston, R. V.O'Neill, Rt. Hon. Sir H.
Amory, D. HeathcoatHannon, Sir P. (Moseley)Osborne, C.
Assheton, Rt. Hon. R.Harden, J. R. E.Peake, Rt. Hon. O.
Astor, Hon. M.Hare, Hon. J. H. (Woodbridge)Peto, Brig. C. H. M.
Baldwin, A. E.Harris, F. W. (Croydon, N.)Pickthorn, K.
Beamish Maj. T. V. H.Harris, H. Wilson (Cambridge Univ.)Poole, O. B. S. (Oswestry)
Birch, NigelHarvey, Air-Comdre. A. V.Prior-Palmer, Brig, O.
Boles, Lt.-Col. D. C. (Wells)Headlam, Lieut.-Col. Rt. Hon. Sir C.Raikes, H. V.
Bowen, R.Henderson, John (Cathcart)Rayner, Brig. R.
Bower, N.Hinchingbrooke, ViscountRenton, D.
Boyd-Carpenter, J. A.Hogg, Hon. Q.Roberts, Emrys (Merioneth)
Braithwaite, Lt.-Comdr J. G.Hollis, M. C.Roberts, H. (Handsworth)
Buchan-Hepburn, P. G. T.Howard, Hon. A.Robinson, Roland (Blackpool, S.)
Butler, Rt. Hn. R. A. (S'ffr'n W'ld'n)Hudson, Rt Hon. R. S. (Southport)Ropner, Col. L.
Carson, E.Hurd, A.Ross, Sir R. D. (Londonderry)
Challen, C.Hutchison, Lt-Cdr. Clark (Edin'gh, W.)Sanderson, Sir F.
Channon, H.Hutchison, Col. J. R. (Glasgow, C)Scott, Lord W.
Clarke, Col. R. S.Jeffreys, General Sir G.Shephard, S. (Newark)
Clifton-Brown, Lt.-Col. G.Keeling, E. H.Smiles, Lt.-Col. Sir W.
Cooper-Key, E. M.Kendall, W. D.Snadden, W. M.
Corbett, Lieut.-Col. U. (Ludlow)Langford-Holt, J.Spearman, A. C. M.
Crookshank, Capt. Rt. Hon. H. F. C.Law, Rt. Hon. R. K.Stanley, Rt. Hon. O.
Crosthwaite-Eyre, Col. O. E.Lennox-Boyd, A. T.Strauss, Henry (English Universities)
Crowder, Capt, John E.Linstead, H. N.Stuart, Rt. Hon. J. (Moray)
Cuthbert, W. N.Lipson, D. L.Studholme, H. G.
Darling, Sir W. Y.Lloyd, Selwyn (Wirral)Sutcliffe, H.
Digby, Simon WingfieldLow, A. R. W.Taylor, C. S. (Eastbourne)
Dodds-Parker, A. D.Lucas, Major Sir J.Teeling, William
Drewe, C.Lucas-Tooth, Sir H.Thomas, J. P. L. (Hereford)
Dugdale, Maj. Sir T. (Richmond)McCorquodale, Rt. Hon. M. S.Thorneycroft, G. E. P. (Monmouth)
Duthie, W. S.Macdonald, Sir P. (I. of Wight)Thornton-Kemsley, C. N.
Eden, Rt. Hon. A.McFarlane, C. S.Thorp, Brigadier R. A. F.
Erroll, F. J.Mackeson, Brig. H. R.Touche, G. C.
Fletcher, W. (Bury)McKie, J. H. (Galloway)Turton, R. H.
Foster, J. G. (Northwich)Maclean, F. M. R. (Lancaster)Vane, W. M. F.
Fox, Sir G.Maitland Comdr. J. W.Wakefield, Sir W. W.
Fraser, Sir I. (Lonsdale)Marlowe, A. A. H.Walker-Smith, D.
Fyfe, Rt. Hon. Sir D. P. M.Marples, A. E.Ward, Hon. G. R.
Gage, C.Maude, J. C.White, J. B. (Canterbury)
Galbraith, Cmdr. T. D. (Pollok)Mellor, Sir J.Williams, C. (Torquay)
Galbraith, T. G. D. (Hillhead)Morris, Hopkin (Carmarthen)Williams, Gerald (Tonbridge)
Gammans, L. D.Morrison, Rt. Hon. W. S. (Cirencester)Winterton, Rt. Hon. Earl
Gates, Maj. E. E.Mott-Radclyffe, C. E.York, C.
George, Lady M. Lloyd (Anglesey)Neven-Spence, Sir B.
Glyn, Sir R.Noble, Comdr. A. H. P.TELLERS FOR THE AYES:
Gomme-Duncan, Col. A.Nutting, AnthonyCommander Agnew and
Colonel Wheatley.

The Committee divided: Ayes, 135; Noes, 288.


Acland, Sir RichardFollick, M.McLeavy, F.
Adams, Richard (Balham)Forman, J. C.Macpherson, T. (Romford)
Albu, A. H.Fraser, T. (Hamilton)Mainwaring, W. H.
Allen, A. C. (Bosworth)Gaitskell, Rt. Hon. H. T. N.Mallalieu, J. P. W. (Huddersfield)
Alpass, J. H.Gallacher, W.Mann, Mrs. J.
Attewell, H. C.Ganley, Mrs. C. S.Manning, C. (Camberwell, N.)
Austin, H. LewisGibbins, J.Marquand, Rt. Hon. H. A.
Awbery, S. S.Gibson, C. W.Mathers, Rt. Hon George
Ayles, W. H.Gilzean, A.Mellish, R. J.
Ayrton Gould, Mrs. B.Glanville, J. E. (Consett)Messer, F.
Bacon, Miss A.Gordon-Walker, P. C.Middleton, Mrs L.
Baird, J.Grey, C. F.Millington, Wing-Comdr. E. R.
Balfour, A.Grierson, E.Monslow W.
Barnes, Rt. Hon. A. J.Griffiths, D. (Rother Valley)Moody, A. S.
Barstow, P. G.Griffiths, Rt. Hon. J. (Llanelly)Morley, R.
Barton, C.Griffiths, W. D. (Moss Side)Morris, Lt.-Col H. (Sheffield, C.)
Bechervaise, A. E.Guest, Dr. L. HadenMorris, P. (Swansea, W.)
Benson, G.Gunter, R. J.Morrison, Rt. Hon. H. (Lewisham, E.)
Berry, H.Guy, W. H.Mort, D. L.
Beswick, F.Haire, John E. (Wycombe)Moyle, A.
Bing, G. H. C.Hale, LeslieMurray, J. D.
Binns, J.Hall, Rt. Hon. GlenvilNally, W.
Blackburn, A. R.Hamilton, Lieut.-Col. R.Neal, H. (Claycross)
Blenkinsop, A.Hannan, W. (Maryhill)Nichol, Mrs. M. E. (Bradford, N.)
Blyton, W. R.Hardy, E. A.Nicholls, H. R. (Stratford)
Bowdon, Fig. Offr. H. W.Hastings, Dr. Somerville.Noel-Baker, Rt. Hon P. J. (Derby)
Braddock, Mrs. E. M. (L'pl, Exch'ge)Haworth, J.Oldfield, W. H.
Braddock, T. (Mitcham)Henderson, Rt. Hn. A. (Kingswinford)Oliver, G. H.
Bramall, E. A.Henderson, Joseph (Ardwick)Orbach, M.
Brook, D. (Halifax)Herbison, Miss M.Paget, R. T.
Brooks, T. J. (Rothwell)Hewitson, Capt. M.Paling, Will T. (Dewsbury)
Broughton, Dr. A. D. D.Hobson, C. R.Palmer, A. M. F.
Brown, George (Belper)Holman, P.Pargiter, G. A.
Brown, T. J. (Ince)Holmes, H. E. (Hemsworth)Parker, J.
Bruce, Maj. D. W. T.Horabin, T. L.Parkin, B. T.
Burden, T. W.Houghton, A. L. N. D. (Sowerby)Paton, Mrs. F. (Rushcliffe)
Burke, W. A.Hoy, J.Paton, J. (Norwich)
Butler, H. W. (Hackney, S.)Hubbard, T.Pearson, A.
Callaghan, JamesHudson, J. H. (Ealing, W.)Peart, T. F.
Carmichael, JamesHughes, Emrys (S. Ayr)Poole, Cecil (Lichfield)
Chamberlain, R. A.Hughes, Hector (Aberdeen, N.)Porter, E. (Warrington)
Champion, A. J.Hughes, H. D. (W'lverh'pton, W.)Porter, G. (Leeds)
Chetwynd, G. R.Hynd, H. (Hackney, C.)Proctor, W. T.
Cobb, F. A.Hynd, J. B. (Attercliffe)Pryde, D. J.
Cocks, F. S.Irvine, A. J. (Liverpool)Pursey, Comdr. H.
Coldrick, W.Irving, W. J. (Tottenham, N.)Randall, H. E.
Collick, P.Isaacs, Rt. Hon G. A.Ranger, J.
Collindridge, F.Jay, D. P. T.Rankin, J.
Collins, V. J.Jeger, G. (Winchester)Rees-Williams, D. R.
Colman, Miss G. M.Jeger, Dr. S. W. (St. Pancras, S. E.)Reid, T. (Swindon)
Cook, T. F.Jenkins, R. H.Richards, R.
Cooper, G.John, W.Ridealgh, Mrs. M.
Corbet, Mrs. F. K. (Camb'well, N. W.)Jones, Rt. Hon. A. C. (Shipley)Robens, A.
Corlett, Dr. J.Jones, D. T. (Hartlepool)Roberts, Goronwy (Caernarvonshire)
Cove, W. G.Jones, Elwyn (Plaistow)Robinson, Kenneth (St. Pancras, N.)
Crawley, A.Jones, J. H. (Bolton)Rogers, G. H. R.
Cullen, Mrs.Keenan, W.Ross, William (Kilmarnock)
Daggar, G.Key, Rt. Hon C. W.Royle, C.
Daines, P.Kinghorn, Sqn.-Ldr. E.Sargood, R.
Dalton, Rt. Hon. H.Kinley, J.Scollan, T.
Davies, Edward (Burslem)Kirby, B. V.Scott-Elliot, W.
Davies, Ernest (Enfield)Lang, G.Segal, Dr. S.
Davies, Harold (Leek)Lavers, S.Shackleton, E. A. A.
Davies, Haydn (St. Pancras, S. W.)Lee, F. (Hulme)Sharp, Granville
Davies, S. O. (Merthyr)Lee, Miss J. (Cannock)Shurmer, P.
Deer, G.Leonard, W.Silkin, Rt. Hon. L.
Delargy, H. J.Leslie, J. R.Silverman, J. (Erdington)
Diamond, J.Levy, B. W.Silverman, S. S. (Nelson)
Dobbie, W.Lewis, J. (Bolton)Simmons, C. J.
Dodds, N. N.Lewis, T. (Southampton)Skeffington-Lodge, T. C.
Driberg, T. E. N.Lindgren, G. S.Skinnard, F. W.
Dugdale, J. (W. Bromwich)Logan, D. G.Smith, C. (Colchester)
Dye, S.Longden, F.Smith, S. H. (Hull, S. W.)
Ede, Rt. Hon. J. C.Lyne, A. W.Snow, J. W.
Edwards, W. J. (Whitechapel)McAdam, W.Sorensen, R. W.
Evans, Albert (Islington, W.)McAllister, G.Soskice, Rt. Hon Sir Frank
Evans, E. (Lowestoft)McEntee, V. La T.Sparks, J. A.
Evans, John (Ogmore)McGhee, H. G.Stross, Dr. B.
Evans, S. N. (Wednesbury)McGovern, J.Stubbs, A. E.
Ewart, R.Mack, J. D.Sylvester, G. O.
Fairhurst, F.McKay, J. (Wallsend)Symonds, A. L.
Farthing, W. J.Mackay, R. W. G. (Hull, N. W.)Taylor, R. J. (Morpeth)
Fernyhough, E.McKinlay, A. S.Thomas, D. F. (Aberdare)

Thomas, George (Cardiff)Wallace, H. W. (Walthamstow, E.)Willey, O. G. (Cleveland)
Thomas, I. O. (Wrekin)Warbey, W. N.Williams, D. J. (Neath)
Thomas, John R. (Dover)Watkins, T. E.Williams, J. L. (Kelvingrove)
Thorneycroft, Harry (Clayton)Webb, M. (Bradford, C.)Williams, Ronald (Wigan)
Thurtle, ErnestWeitzman, D.Williams, W. T. (Hammersmith, S.)
Timmons, J.Wells, P. L. (Faversham)Williams, W. R. (Heston)
Titterington, M. F.West, D. G.Willis, E.
Tolley, L.Wheatley, Rt. Hon. John (Edin'gh, E.)Wills, Mrs. E. A.
Tomlinson, Rt. Hon. G.White, H. (Derbyshire, N. E.)Woodburn, Rt. Hon. A.
Turner-Samuels, M.Whiteley, Rt. Hon. W.Wyatt, W.
Ungoed-Thomas, L.Wigg, GeorgeYates, V. F.
Vernon, Maj. W. F.Wilcock, Group-Capt. C. A. B.
Walker, G. H.Wilkes, L.TELLERS FOR THE NOES:
Wallace, G. D. (Chislehurst)Willey, F. T. (Sunderland)Mr. Popplewell and Mr. Wilkins.