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Orders Of The Day

Volume 467: debated on Tuesday 12 July 1949

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Finance Bill

Order for Third Reading read.—[ King's Consent signified.]

3.50 p.m.

I beg to move, "That the Bill be now read the Third time."

Our Debates on this Bill compared with some that have been held on previous Measures of the same kind have been smooth and peaceful. There will be varying opinions as to why this has been so, but if I might advance my own, I think that it has been due to two causes—the co-operative spirit of my hon. Friends on this side of the House, for which we on the Treasury Bench are grateful; and, secondly, the reasonableness of the proposals it contains which have given the Opposition so little ground for criticism. I have sat through practically all the discussions we have had, and at times have felt both sorrow and admiration for hon. Gentlemen opposite—sorrow that they should have been so hard put to it to find arguments with which to combat the proposals contained in this Measure, and admiration for the fact that, in spite of that, they managed to keep the Debates going through the fairly lengthy sittings we have had.

This is a Third Reading, and that being so, any sustained reference to the economic situation in which we find ourselves would be out of Order. In any event, the opportunity for considering the wider field will present itself within a few days. Nevertheless, in taking our leave of the Bill, which is designed to incorporate our financial policy for the current year, it may not be out of place for me to remind the House of the objectives at which it was aimed. The main basis upon which the proposals of this Bill rest was, in the words of my right hon. and learned Friend the Chancellor of the Exchequer, that the total calls made upon the national income by our different kinds of expenditure should balance against our income without creating any inflationary pressure. For that purpose he aimed at an overall balance with, in fact, a very modest surplus of £14 million, and a probable true Revenue surplus of £492 million, a figure which, while pretty substantial in itself, indicated a less urgent emphasis upon disinflation than the true Revenue surplus of £684 million realised last year.

It was one of the major objects of the Budget to provide the maximum incentive possible for production. This, as the House knows, took the form of an increase in the initial allowance for depreciation purposes. This further measure of relief and encouragement to industry is certainly no less important and urgent now than it was when it was first mentioned by my right hon. and learned Friend. Recent events, in fact, stress the paramount importance of our export trade, particularly in hard currency markets. Any steps, therefore, that we can take to assist and encourage manufacturers must be a contribution to this most difficult and stubborn problem and help to cheapen production.

Given this notable measure of relief for industry, it is not perhaps surprising that the Budget incorporated few other concessions, and that during our Debates on the Bill my right hon. and learned Friend has had to harden his heart against many of the pleas for remission of taxation which have been made. I am glad that we were able to accept the Amendment which will extend to buildings the improved allowances proposed for research expenditure on plant and machinery, together with the Amendment which will ensure that the increased initial allowance of 40 per cent. will apply to the whole purchase price of a ship delivered on or after 6th April, 1949, even though part of the price may have been paid before that date.

Apart from allowances to industry of one kind or another, our discussions have concentrated in the main round the proposed change in the Death Duties. There has been some unreality about those discussions, particularly those that we had on the Report stage last night. Two separate issues are involved in these changes, a fact which has not been fully realised by hon. Members opposite. The first issue is the proposal that the three duties should be amalgamated into one, and that the Legacy and Succession Duties should be dropped. There is no doubt that this simplification is desirable. My mind goes back to the Budget Statement of my right hon. and learned Friend, and my recollection of that occasion is that when he announced that he proposed to make this change it was received with universal approval in every quarter of the House. It will lighten the work of all those whose business it is either to draw up wills, that is, testators, solicitors and so forth; administer the assets, that is, the executors; or levy the duty, that is, the Inland Revenue. This is a desirable thing in itself, providing it does not cause injustice in any other directions.

The proof that the consolidation is desirable is that at the present time between 66 and 75 per cent. of testators disregard Legacy and Succession Duties by leaving their legacies free of duty, the duty coming out of the residue. These changes will assist all those in that category who in the past have undoubtedly desired to avoid these two particular duties, or rather one or other of them. Great play has been made during our discussions with the fact that under the new scale the incidence of Estate Duty will be the same for what are called strangers as for the family. It is obvious that if there is only one scale this must be so. In any event, the family does not lose by the change. It is the scales for strangers which have been brought down and not those of the family increased.

As my right hon. and learned Friend pointed out last night, testators will be quite free to take account of the fact that the Estate Duty rates will in future be the same for all bequests. They can adjust legacies which they leave. They may, for example, leave less to cats' homes—a case quoted last night—knowing they will have less to pay in duty than at the present time. It is inevitable that some estates will pay more, because the Succession Duty involved is an entirely separate one. As my right hon. and learned Friend budgeted for £20 million more in a full year from Death Duties, some estates, will, in fact, have to pay more. It has emerged quite clearly during our discussions that this will be the case in the middle and higher ranges. That is largely due not to consolidation, but to the fact that my right hon. and learned Friend has decided, with the approval of Parliament, to increase the total amount of Death Duties by £20 million in a full year. Even if consolidation had not taken place, these increases in the middle and higher ranges would have taken place because of the changes which my right hon. and learned Friend has made in the overall incidence.

It is unfortunate that the Opposition committed themselves to the assertion that the changes made place a greater burden on the small family estate than hitherto. The fact is that there is no addition at all to the scales for estates up to £17,500. Further, it was the present Government which in an earlier Finance Bill remitted Death Duties entirely on all estates up to £2,000.

Nor is it correct, as some Opposition speakers have said, that the changes placed a new and unfair burden upon agricultural property. Actually, in some instances the reverse is the case. The amount expected to accrue from Death Duties is £185 millions in a full year. Of this sum, agricultural property will find something like £3,300,000; that is to say, of the extra £20 million which my right hon. and learned Friend proposes to raise from this source, that type of estate will find only £300,000, a very modest sum, as all hon. Members will agree when they consider the matter dispassionately. It is impossible to believe that this small addition to what properties of this kind now have to pay will have the effect prophesied by the right hon. Member for Saffron Walden (Mr. R. A. Butler) and others. It certainly will not make all the difference between an estate being continued in its present form or being broken up.

In the field of Customs and Excise the Bill embodies the Budget proposal that the tax on football pools should be increased to 30 per cent., which has excited the pool promoters to indulge in a vast publicity campaign. I am sorry that it has led to an addition to the correspondence of Members of Parliament, but it has not led to the volume which the pool promoters expected. The campaign was short-lived and largely abortive, and I do not think any of us need he unduly alarmed over it. Such figures as we have so far relate only to the tail end of the last football season and to the relatively small turnover of the pools which, during the off-season, are run on Australian football and on jockeys. The House may be interested to know that the receipts from the duty up to the end of June have amounted to approximately £3¼ million, compared with £2 million for the same period last year. Those figures, as far as they go, provide no support for the fears that an increase in the duty would mean a catastrophic fall in turnover. On this point, therefore, as on others, we may with an easy mind let the Bill go forward.

The change in the Beer Duty seems to have come up to expectations. As my right hon. and learned Friend said in opening his Budget, there has been since the autumn a marked falling off in the consumption of beer. It was partly from a desire to arrest that downward tendency that my right hon. and learned Friend proposed a remission of duty which would enable the brewers to reduce the price of beer by 1d. per pint. Since the Budget, the consumption of beer has increased appreciably. The number of standard barrels used in April and May has been higher than for the corresponding months in 1948. So far, it seems that the reduction of 1d., which was criticised so much during our earlier proceedings, has achieved the objective of stopping the decline in consumption.

Is my right hon. Friend prepared to say that the fine summer weather has nothing to do with the increase in the volume of beer consumed.

I thought I had made it clear that I was referring to April and May. Although the present lovely weather has lasted for some weeks, my recollection is that we were not enjoying it in April and May.

Apart from the considerable assistance given to industry in the depreciation allowance and apart from a number of minor procedural reforms, this has been a standstill Budget. The Finance Bill reflects that fact. It has unfortunately not been possible for my right hon. and learned Friend to make concessions on Income Tax and Purchase Tax. The Bill contains nothing which is inconsis- tent with that flexibility which my right hon. and learned Friend described, in introducing his Budget proposals, as an essential aspect of our planning. I would add that if our finances have, in the coming months, to be adjusted to any new circumstances that may occur, we shall be ready to make that adjustment. In the meantime, I commend this very useful Bill to the House.

4.8 p.m.

The Financial Secretary to the Treasury prided himself on the co-operative spirit of his supporters. It is very easy to be co-operative when you have been gagged and bound. The Financial Secretary knows perfectly well that in order to keep his own supporters quiet the Chancellor deliberately precluded them, in an unprecedented manner, from being able to speak upon the one financial subject, namely, the Purchase Tax, on which they had set their hearts. No doubt, having been cowed, they did not dare to raise their heads again and take any part in the Debate. We pride ourselves that we are a free party and a free section of public opinion. Not being subject to the Draconian methods employed by the right hon. and learned Gentleman, we have attempted to represent the taxpayers in this House, and to apply our minds to the somewhat meagre arguments put forward with such grace and such marked lack of success by the right hon. Gentleman and his Friends.

We have not been able to welcome the Chancellor of the Exchequer very much to our Debates; nor is he here today. I have recently been accused of being ungracious to the Chancellor of the Exchequer, a quality which I cannot recognise in my character—but never mind that. The fact is that we have never mentioned the Chancellor's absence. I say today, quite openly, that we understand the very serious matters which are engaging his attention elsewhere. Nevertheless, it is unfortunate that the powerful interventions which he might have brought to bear upon our Debates have not been possible on these occasions. I do not think that it is right procedure for the Chancellor of the Exchequer to be absent from the Debates upon the Finance Bill. He has left us his fiddlers three, who have struck up a sort of discordant concordat among themselves, and with the aid of each other—one vituperative, another legalistic, and the third with his usual disarming grace—they have attempted to keep the Opposition quiet. They have not been successful and I would advise them now to send a message to their Chancellor and ask him to come over into Macedonia and help them on a future occasion.

We have taken as much opportunity as we could to stress the dangers of our financial position. We were limited by the scope of the Amendments which it has been possible to put down to the Finance Bill. They have been designed to draw attention to the very high level of taxation—the most stunning in the world—and to the increasing Government expenditure. I realise that I cannot on this occasion go into detail on these matters. I can, however, follow the right hon. Gentleman in his reference to the objective which the Chancellor had in mind in drawing up this Bill, which was to create an overall balance.

I would remind the Financial Secretary and through him the Treasury that, taking the first quarter's figures of the Revenue return, there is at present a net over-all deficit, taking above and below the line items, of something like £179 million for the first quarter's return, compared with an over-all surplus, taking above and below the line, of £21 million for the equivalent period last year. If I were in Order, I could support these very damaging figures with many others indicating that above the line the surplus, instead of being as was expected, is only some £3 million, which allows for the general over-all figure of debit which I have just mentioned.

These figures are a very serious background against which to consider the Third Reading of the Finance Bill. When we realise that the House has just been presented with extra Supplementary Estimates amounting to £21 million, when we are told that more Supplementary Estimates are in the offing, and when we remember the Chancellor of the Exchequer's own words, when he said:
"In particular, I have emphasised that only in special cases, such as, for example, major changes of policy, can any Supplementary Estimates in future be permitted."—[OFFICIAL REPORT, 6th April, 1949; Vol. 463, c. 2084.]
—we are astonished that once again the language of the Chancellor has proved to be false and that Supplementary Estimates, apparently with no change in policy, have been introduced and that more are promised.

It is against this sombre background that we come to examine the details of what we have been through in the Bill itself. First of all, the concessions have been quite infinitesimal. We are grateful for what we have received. We are now permitted to take out a dog licence attached to a man or woman owner at a different time of year, and we have been duly grateful for this benefit. The right hon. Gentleman has not been able to meet those of us who took a more imaginative view of the attachment of a dog to the person of a man or woman. We had hoped that by some actuarial calculation, taking into account what the Leader of the Opposition has described as the magic of averages, the Treasury might bring to bear on the dog-owning problem the same genius that other right hon. and hon. Gentleman brought to bear on the construction of our general system of insurance in this country. But we must be grateful for that small mercy.

A slight difference has also been made on cinema seats. There are also two matters to which the right hon. Gentleman referred, research buildings and the question of insurance. We are grateful that the retrospective portion of Clause 22 has been removed. I believe that in the case of these life policies it was wrong that the taxation should have a retrospective effect. We are grateful to the Government for taking up our points on these various matters.

In general, however, the Government have dismissed the arguments of the Opposition as involving either issues and sums which are too small or issues and sums which are too large. Therefore, the right hon. Gentleman, with his long experience of Finance Bills, has been able to balance himself precariously in his place and reject nearly everything which has been put forward. He has been aided by the Economic Secretary and in close alliance with the daily journal attached to the Labour movement, in trying to persuade the public that legitimate arguments put forward on our side are designed to raise the cost of living and increase the burdens on the people. I need only mention that the public fully realise that it is the Chancellor himself who has been obliged by the facts of the situation internally today to be the arch-imposer of cuts of a nature which no Chancellor for some time has been either obliged to or has dared to inflict.

It lies ill in the mouth of speakers on the other side of the House to accuse us of increasing the burdens on the public. If we go into detail in the Debate as to what has passed in the course of the proceedings on the Finance Bill, we note, for example, that while the Government have been trying to accuse us of imposing burdens on the people, they have themselves quite calmly put an extra £10 million in this Bill on the contributors to the occasional benefits, the unemployment, sickness and maternity benefits. The Chancellor of the Exchequer explained it in his Budget speech, and it has been put into force in the Bill.

Although every citizen will be glad to pay this extra sum of money by way of helping our national difficulties, we think it is a peculiar system of obtaining the money. What has happened? In future, relief is not to be allowed to contributors on that part of their contribution relating to these benefits. Why is that? A large number of people are going to pay an indirect tax of which they are not fully aware and about which it is the duty of the Opposition to warn them. The reason is that the Chancellor is unable to do what he ought to have done, and that is to tax the benefits themselves, because, as he said, they are occasional benefits and difficult matters on which to raise taxation.

I want to ask what would have been the sum originally expected from the taxation of the actual occasional benefits. I cannot believe that it would have amounted to £10 million. The fact is that by this devious method, the Government are imposing a burden of £10 million on a vast range of contributors, not only the working class but all classes who come into this range, and they are doing so at the same moment as they are accusing us of trying to impose burdens on the people.

The right hon. Gentleman says that in his view the Government may be able to devise some means of collecting tax on occasional benefits. As the Government have not been able to put forward any suggestions, perhaps the right hon. Gentleman can help them by saying in what way tax on these occasional benefits could be collected.

The question I wanted to put to the Government is what the difference in revenue was likely to have been between the idea as originally conceived and this imposition of £10 million on contributors in respect of the part of their contributions devoted to these benefits, which is a very serious burden on a large range of people just because the Government cannot collect the tax from the small number of people who obtain the benefits. That is unfair, and I do not think the Government ought to put a burden on so large a number of people just because they themselves are unable to devise a method for putting the tax on the benefits.

The other objection which the Government have made to the Opposition was that our suggestions were too large or too small. I thought I would try to put forward a small point which related to the remission from taxation of samples brought in for industrial research. That was an absolutely legitimate point to put forward, and it was put forward in all seriousness with a view to helping industrial research. What is the action of the Government? They inform us that they are unable to carry out this minor reform. Therefore, whether we have put forward large reforms or small reforms, we have been presented with a blank face by the Government.

What do the Government themselves do? In Clause 13, when it was a case of the Airways Corporation, they deliberately remitted the tax on materials coming in, for aircraft over a certain span, thereby giving an indirect subsidy to their nationalised industry. We regard this as a most unfair discrimination between legitimate private research as opposed to academic research, which already gets this benefit, and the case of a nationalised concern when it wants remission of taxation no doubt to help it pay its way. I believe that perhaps the most sinister and futile argument used by the Financial Secretary was that in the case of these samples coming in for industrial research the Government were obliged to hesitate because there was an element of the profit motive in private industry.

Is that the way to gain the confidence of industry at the present time when we want to win the battle of exports and encourage the production drive? Why should academic research be treated on a different moral basis from industrial research? Why should the Government remit taxation on materials coming in for Airways Corporation, which is nationalised, and not give this small benefit to industry when it is put forward in a sincere and serious manner?

I see I have stung the right hon. Gentleman to rise, so perhaps he will deal with this point.

The only query I would put to the right hon. Gentleman is why, if all this is true, did not the Conservative Government in 1936 do it?

When I brought the matter forward originally I mentioned—there is no secret on that point—that I was hoping, in view of the intense difficulties into which this Government have plunged the country, that the right hon. Gentleman would take some steps to alleviate some of the burdens imposed on industry at the present time.

This issue of business profits could detain me and divert the House for a long time, but I do not know whether it would be in Order on the Third Reading of the Bill, and we have had most of the figures before us. I simply want to say on this question that the Chancellor has partly met some of the anxieties of industry by increasing the depreciation allowance, or wear and tear allowance as it is called. He has also established an inquiry into possible alternative methods of helping industry with the problem of depreciation. It would indeed be churlish were we not again to express our gratitude for these steps. I would ask whoever is to reply to say at what date this inquiry will report and urge him to press those engaged in it to take the widest possible evidence—they will receive a diversity of suggestions on this difficult matter—and to endeavour to present a report as soon as possible which will help further to ease this problem.

It is to be remembered that this concession of the Chancellor is in no way a gift to industry because, in the end, unless the rate of direct taxation comes down, there will be no gift to industry but simply an advance. Of course in some cases the advance will be substantial for the time being and will be of help, but in the end it will all come home to roost, subject, of course, to the rate of tax not falling. If the rate of tax were to fall, then there would be a form of concealed gift to industry. We on this side have not wanted to press for gifts to industry. What we have wanted to do in the various Amendments we have moved unsuccessfully is to attempt to bring before the Government the problem with which industry is faced, namely, the need for the replacement of plant.

The present cost of plant is just under three times what it was in 1938. I have calculated it, and I have been confirmed by the many communications on this subject which I have received. Unless we can get some further help, my fear is that a further burden will fall upon the Exchequer. Take the case of the cotton industry, which on the spinning side at any rate has had to receive a substantial Exchequer grant in order to modernise its machinery. It is undoubtedly the case that a similar possibility may have to be held in mind for the weaving industry, and if industry cannot meet its liability for replacement of plant out of its reserves and undistributed profits, then the Exchequer will have to come to the rescue.

We have, therefore, put forward in the interests of the workers, in the interests of the taxpayer and in the interests of industry a variety of proposals designed to assist industry in this matter We are sorry that the Government have been unable to accept any of our proposals and that the matter stands in the Bill as it was originally, namely, that there is simply an advance for depreciation. I must remind the Financial Secretary that in "The Budget and Your Pocket" this matter of industrial reserves was put very fairly from our point of view. This blue book says on page 15:
"There are three main ways the nation saves money. Firms do it by not distributing all their profits to the shareholders; last year, leaving aside the cost of keeping up existing machinery and buildings, firms did over a third of the nation's saving."
It is because we believe that firms are doing such a large proportion of the nation's saving, which the policy of the Chancellor is making disastrous in the general field of savings, that we ask for serious consideration, if it is possible at this stage, of the needs of industry in respect of depreciation of machinery. While I am on this point of savings, I have given the background of the first three months of the revenue returns which present the serious figure of an overall deficit. I must remind the House that for the first 14 weeks of the savings period there is a deficit, and not a credit, of some £10 million. These surely are different results from the objectives which the right hon. Gentleman stated at the opening of his speech.

The right hon. Gentleman made one short reference to Excise, and I want to draw the attention of the House for a minute or two to the portion of the Bill dealing with Customs and Excise. The figures for Customs show that there is a drop of some £12 million in the anticipated revenue, taking the quarter as representing a quarter of a full year. In the case of Excise, in which a total annual fall of £70 million was envisaged in the Budget, there has been already in one quarter a fall of £27 million which, multiplied, would mean a much greater fall in the Excisce than was anticipated by the Chancellor. These two are serious figures, and I cannot believe that even the hot weather is coming to the rescue of the Chancellor in the matter of the beer returns.

We should like further explanation from the Economic Secretary on the subject of the drop in the returns from Customs and Excise as part of the general picture against which we are considering this Bill. In this connection the right hon. Gentleman mentioned the pools and I would only say that we regard the position as it is left, as most unsatisfactory. We await the report of the Commission on Betting and should be grateful if we could have an indication from the Economic Secretary of when it is likely to present its report.

The last major matter to which the right hon. Gentleman referred was the Death Duties. We debated this at some length yesterday and I shall not go over all the ground again. The right hon. Gentleman observed that the family will not lose by the change. We regard that as an inexact interpretation of the changes made by this Finance Bill. There is no doubt that what he indicated in his opening remarks, namely, that there was a lift in the duties as a whole, must of itself impose a considerable burden on the family. Following up this inaccurate remark of the right hon. Gentleman, the attitude of the Government towards this matter seems to us typical of their whole attitude in drawing up this Bill. They seem to want to be able to stand before the electorate and, with their full propaganda machinery behind them, say, "The poorer people are feeling no burden. We have put it on those who can afford to pay more."

With this in view, they have made a great deal in our Debates, through the Solicitor-General, of the fact that below £17,500 there is no great additional burden and, in fact, in some cases an improvement from the point of view of the family. What they have not made clear to the electorate is that they are perpetrating an injustice in comparison with the old system in regard to the family, at the levels which yield most of the Revenue. They are, therefore, taking the most short-sighted attitude which the Treasury could possibly adopt, and that is to be unjust at higher levels where they will get the money and to try to be popular and cheap in their appeal at the lower levels where they think they will get the votes of the electorate.

I do not believe that this is a wise policy to adopt, because one of the results of this Bill is that, as I said at the beginning, taxation remains at a stunning level, perhaps the highest of any country in the world. At the same time, in the case of Customs and Excise, Income Tax and Death Duty, we are getting to the stage where we are bound to have diminishing returns. Moreover, if Death Duty is maintained at this level and the other ranges of taxation continue, we shall in future have destroyed the reservoir from which the main Revenue returns are likely to come in to the Exchequer—at any rate, the main Revenue returns which can be sought without imposing a burden upon the electorate as a whole.

The result of the Bill, as was stated in an admirable speech yesterday by my hon. Friend the Member for Chippenham (Mr. Eccles), is, in fact, that the whole burden of our social reform and of the welfare State is being set firmly upon the shoulders of the taxpayer. If we can persuade the taxpayer that the objective of the country is one entirely of self-help, there might be some moral basis for the structure of our financial system and policy. But the truth is that right hon. and hon. Gentlemen opposite still use language in this House and in the country designed to prove that benefits can come to people allegedly free or, at any rate, at the expense of the rich. That will no longer be possible in our financial system.

I believe that when we get into the position in which the people really understand who has to pay for their benefits, who has to pay to maintain their standard of living, and that they have to pay for themselves, the public will themselves demand economies, followed by relief in the crushing burden of taxation, whether direct or indirect. The public will realise one day that we cannot take on more than our means will enable us to carry out; and then, if the Government do not work with this tide of public opinion, we are determined to do so, and to save the structure of the social services and of our standard of living, which men of goodwill, of all types and creeds, have already built up.

4.32 p.m.

The right hon. Gentleman the Member for Saffron Walden (Mr. R. A. Butler) concluded his speech with some rather ambiguous words. He said that the people, realising that as taxpayers they have to support the burden of the welfare State—of course, that is true—would rebel against it and demand economies. What economies? Will the right hon. Gentleman tell us that? Does he at this stage say that the benefits of the welfare State should or should not be cut? It is important that hon. Members opposite should make their position on this clear.

We have all been interested in the right hon. Gentleman's speech. We have all been a little intrigued at his selection on this occasion, for he is probably one of the few remaining members of the Conservative Party who still believe in the welfare State, who still believe in full employment. Hon. Members opposite have been ceasing even to pay lip service to full employment in their publications in recent months. They have been going for the 1931 idea; they have been demanding the axe; they have been demanding cuts of food subsidies and of social services, and they have been wishing to get back to a different level of living by the old traditional method of deflation. But that is not the view of the right hon. Gentleman, yet it is he who has spoken for the Conservative Party today.

I wish to deal not with these general things but to confine myself to a comparatively small delusion which is always coming into the arguments put forward from the other side of the House; that is, that a high taxation system puts up the cost of manufacture, and, therefore, puts up the cost of exports. In fact, given a particular standard of living, high taxation has precisely the opposite effect; it lowers the cost of production and the cost of our exports. If we have a given standard of living, then food subsidies mean that our wages are less. It means that because the taxpayers as a whole are paying for part of the workers' food, the manufacturer is getting his labour cheaper.

In exactly the same way National Insurance relieves the manufacturer of a charge he would otherwise have to bear. Efficient businesses are in the habit of running their own welfare departments. They know that they do not get the best results unless there is welfare in their workers' homes. That is a burden which is taken from the employer, which the employer would otherwise have to pay.

May I ask the hon. and learned Member a question on the very interesting line of thought he is now developing? Supposing the party opposite, convinced that he is right, developed more and more social services to the extent of an additional cost of, say, £1,000 million, does he really say that in that case the cost of production would decline correspondingly? That is the argument he is trying to put forward. I think it is absolute moonshine madness.

That is a complete non sequitur, as I am sure the hon. Member will realise from my argument. The argument I am putting is this: that if we have a given standard of living—a given standard of living means, roughly speaking, that people have so much to spend or have so much spent on their behalf—either it has to be paid for by the employer and comes in as a cost of manufacture, or it is paid for by the community as a whole, including the employer, and does not come in as a cost of manufacture; it does not enter into the manufacturer's costings. Whereas, if we had low taxation and the same standard of living, the whole cost of living would have to be borne by wages and we would, of course, have wages demands and wages would have to go up; and that would come into the costings of the manufacturer.

Let me deal with another example, workmen's compensation, which used to be a direct charge on the employer, who had to maintain the insurance. Now, that has been taken off the shoulders of the manufacturer, which means a lower cost of production. Then there is the Health Service. An employer gets better returns if his workmen are healthy I, as a farmer, certainly should not say that my costs or prices were being increased if, for instance, somebody volunteered to pay my veterinary bills. All these items are in fact a concealed subsidy to the manufacturer and exporter. They all mean that the exporters prices are lower than they would be if these social services were not in existence.

Does it follow from this line of argument that the contributions paid for National Insurance and industrial injuries by the employer in respect of each of the men employed by him do not also add to the cost of production?

Oh, certainly they do. But those contributions paid by the employer which come into his costings are only a part of the cost. If the standard of living is to be maintained the expenditure will still be there but it will be borne by the manufacturer who in the form of wages will have to provide the whole of the cost instead of only a part.

My sole argument, and I think it is really incontrovertible, is that a standard of living, a social service and high taxation system mean that manufacturing costs are a lot lower than they would otherwise be. There are exceptions, but taxes come in as to the overwhelming majority after the point of costing. The costings do not include taxation to any considerable extent. Only the replacement of equipment and machinery is normally paid for after taxation, but this Budget and Finance Bill give a great deal of relief in that direction. The proof of the pudding is that our prices in the world overall are competitive today—[HON. MEMBERS: "What?"]—they are competitive.

The hon. and learned Member should try selling at those prices.

I shall come to that point. The reasons for difficulties in selling are quite other than those of price. The reasons for difficulties in selling are primarily because people will not allow our goods in. It is not the prices but the small amount of imports which, owing to various restrictions, people will accept. When we come to the present position in regard to the dollar gap, it is not manufactured exports that are falling except to a very small degree. In far greater degree it is in raw materials that exports have fallen. Tin in Malaya and cocoa—

The hon. and learned Gentleman ought not to indulge in an economic Debate. I think he is in Order in trying to justify taxation set out in the Finance Bill, but he should not go further than that.

Perhaps I was going a little wide. I was trying to justify the high taxation system and I was saying that it was irrelevant to the raw materials which the Americans are not buying today; and, as far as manufactured goods are concerned, that is not where the marked falling off has occurred. In regard to Canada there has been a considerable increase in our sales of manufactured goods. If we take overall averages there is nothing wrong with the price.

Why we cannot get our goods in, is not because our prices are too high, but because there are no free markets in the world today in which our goods can compete. It is a complete illusion to imagine that there is a free economy in America. There is a high tariff subsidy system and the Americans have no intention of allowing our goods in, save, on terms that are not competitive. The moment any of our goods became competitive with American production they would be promptly excluded by their tariff system. That is what their tariff system is for. It is only where our production is not competitive with that of the Americans that they will allow it into their market.

Unfortunately, while our taxation system allows our exports to be cheap and competitive, the American system subsidises through Government purchase and maintains at an uneconomic level the prices of the raw materials we must have. This inflates her export prices. The farm subsidies—the mineral subsidies—the whole American subsidy system is the source of this problem. The U.S. Government pass their internal subsidies on to us. Cutting our prices is not going to solve our difficulties. We have either to stop importing from America, or the Americans have so to arrange prices of their surpluses—and, remember, export is less than 5 per cent. of total American production—that they are exchanging for the non-competitive goods which we alone can send them and which alone they will accept. This world problem has to be solved primarily by an adjustment of American prices, not British prices.

4.48 p.m.

I should be imposing on your patience, Mr. Deputy-Speaker, if I sought to deal with American prices in a Bill which primarily concerns this country, but, in reply to the opening observations of the hon. and learned Member for Northampton (Mr. Paget) I would say it is not a very adequate basis for an argument to take taxation as a whole. There are obviously some taxes which enter into the cost of production and others which do not. I also think it a fallacy to talk about there being a given standard of living in this country. As I said in the Debate on the Finance Bill last year, the standard of living which is being maintained in this country at present is one which is completely unreal and which can only be maintained, unless there is a great increase in production, as long as we are in receipt of eleemosynary help from America.

I wish to confine myself to what I believe to be the main underlying fallacy of this Finance Bill. It is intended to give effect to the Government's economic policy as set out in the Economic Survey, 1949, and is intended to provide the necessary finance in addition to what is provided from the savings of the country. When introducing the Bill, the Chancellor of the Exchequer indicated that he was expecting that the savings of the country would not be adversely affected by this finance Measure. I wish to repeat to this Chancellor of the Exchequer what I said in 1946 to his predecessor, that the programme of capital expenditure on the coal, steel, electricity and gas industries, on housing and education, all involve capital expenditure for which there were not likely to be savings, and that if the programme went beyond the savings of the country the result would be inflation.

How right I was. In the proposals this year the present Chancellor anticipates that it will be possible for there to be approximately the same gross national investment as there was last year—approximately £2,300 million. That can come, in the first place, from company savings; secondly, from personal savings, and thirdly, from governmental savings of which one of the most important items is the Budget surplus. With regard to company savings, the Financial Secretary today spoke with complacency about the assistance which he claims is provided in the Bill to industry for depreciation. But he can hardly deny what I think has come to be generally accepted that at present, owing to the tremendous difference in the cost of replacement of capital equipment since before the war, the depreciation allowance is quite inadequate to enable industry to replace its equipment when it is worn out. All that is provided in the Bill is not that in the long run there shall be actual depreciation allowances which will be enough to replace pre-war equipment with modern equipment at up-to-date prices, but merely that a larger allowance is given in the initial years.

I see the Financial Secretary is shaking his head. If I have fallen into error, no doubt he will correct me.

I may be wrong, but I gathered from what the hon. Gentleman was saying that he seems to have assumed that the whole of the capital re-equipment is to come out of the initial allowance. That is not so.

That is the point which I was endeavouring to make—that the total allowance for depreciation is not altered by the present Finance Bill, but that all that happens is that the depreciation allowance in the early years is greater, and that consequently the depreciation allowance under the present law in the later years will be less. The effect of this is, as was said in "The Economist":

"This system means the overstatement of profits, the understatement of production costs and a consequent erosion of the capital of business."
I believe that to be entirely true.

The Chancellor of the Exchequer has apparently been impressed by the representations made to him on this subject, and I welcome the fact that he has set up a committee to go into this matter, but that indicates that for the future what companies put to reserve in undistributed profits will not only be needed for modernisation and extensions, but that some of it will be required for the mere replacement of existing equipment as it is worn out. It is, therefore, disastrous that the rate of tax upon undistributed profits should be 9s. Income Tax plus 2s. Profits Tax. The Chancellor of the Exchequer made an appeal to industry to plough back as much as possible of their profits in order to be able to modernise and extend, and it is poor encouragement to them that what they plough back into the industry should be taxed at the rate of 11s. in the £.

I now come to what can be done by personal savings. This, at one time, was the main source of savings. I find on page 23 of the document entitled "The National Income and Expenditure of the United Kingdom" that whereas the net savings of persons in 1947 was £165 million, by 1948 it had dropped to £6 million. Indeed, that is not surprising as a result of the general financial policy which the Chancellor is following, and on which he prides himself and, indeed, which he elaborated again only last night. The rich who used to do most of the saving now cannot save, and under the new Death Duties they will be less able to do so than before. Unfortunately, those who, in the past, might have been described as the poor are in fact not doing so. I do not know why Lord Mackintosh complained about a letter which I wrote to "The Times" upon this subject, because last year the net total of small savings—that is, what was paid in less what was drawn out—amounted only to £30⅓ million. According to the return I looked up this morning—I notice a slight discrepancy between the figures of my right hon. Friend the Member for Saffron Walden (Mr. R. A. Butler) and my figures—from 1st April, 1949, to 25th June, 1949, there is actually a deficit of £5,500,000 in the case of small savings. Gross personal savings in 1948 were £221 million—just the same figure as in 1938—but the difference is that the percentage of the national income has gone down from 4.9 per cent. to 2.7 per cent.

I am sure the hon. Gentleman does not wish to present an unfair picture. I think that in referring to the percentage of personal savings compared with the national income, he ought, when dealing with company savings, to say that they have gone up by just enough to balance the decline in personal savings.

It is, of course, true that they have gone up. Since the hon. Gentleman raises that point, I will say how much I regret the appeal to prejudice which the Chancellor of the Exchequer made in his speech on the Bill, when he complained about the profits put to reserve by companies being £1,215 million. In answer to the Chancellor, I would say that that figure is completely meaningless, since he did not state and did not know upon what total capital various profits had been earned; nor did he even know upon what turnover of goods it was earned.

As to what has just been said by the hon. Member for Central Southwark (Mr. Jenkins), I would point out that in this semi-official document to which I have referred it said that the increase in company profits between 1947 and 1948 went either into reserves or into provision for taxation. The point which I am seeking to make is that this Bill imposes such burdens, first of all, upon companies and, secondly upon persons, so that at the end of this financial year the £2,300 million of savings will not have been made by the nation to finance the Government's investment programme without inflation. It might have been expected that wage earners would have been able to have increased their savings, because of the disposable income from property they now take 50 per cent. as compared with 40 per cent. before the war.

My last point relates to the governmental savings whose aggregate are shown in the table in this document as £716 million. But that, be it remembered, is the total saving, constituted by the Budget surplus, all surpluses of local authorities, all depreciation allowances and all transfers, such as war damage payments, compensation to doctors, and so on. This £716 million is the gross saving made in respect of that 40 per cent. of the total income of the country which is being taken by the Government. Therefore, I say that the effect of this very high level of expenditure, which the hon. and learned Member for Northampton thinks is not harmful to industry, is at present to take so large a proportion of the national income of the country that there will be very little left as savings.

I am not one of those who consider that the greater part of Death Duties is a direct drain on capital. I have in the past engaged in newspaper controversy to show that is not the case where ordinary shares, for example, are sold by the executors of a rich man and bought by someone else. That does not reduce the capital of that particular company. I pointed that out at a time when the savings of the country appeared to be reasonably adequate for the purposes for which they were required. The effect of these Death Duties at that time was to draw upon the savings of the country as a whole, because when some shares were sold there had to be a purchaser, and they were purchased out of the gross savings of the country.

Today, when the Government are rightly putting forward a great programme of industrial investment for this country, the effect of the Death Duties, and the increase in those duties, upon which both the Chancellor of the Exchequer and the Economic Secretary preen themselves, will be to make further drains upon the already inadequate savings of the country as a whole. I believe that the financial policy of this Bill will fail because the savings of the country will not be adequate to carry out the Government's economic programme.

5.4 p.m.

I have been very interested in what has been said by the hon. Member for The High Peak (Mr. Molson) about the disappointing results of personal savings. It may be that being a little closer perhaps to working-class folk, I know why there has been this disappointing result in the National Savings Campaign in recent months. I do not think it is because working folk have not the money. If that were so, how should we explain that nine million homes in Britain today appear to have money to invest—such is the term—in football pools in varying amounts from 2s. upwards per week? I constantly remind my friends that they can secure for themselves either increased savings or increased incomes any time they like to discontinue investing their money in football pools. I think that the mass of working folk today do not feel the incentive to save as they used to years ago.

What was the driving force behind this almost religious doctrine of thrift? It was fear of the workhouse and of the relieving officer; it was saving for a rainy day. One of my earliest recollections is having this necessity for thrift dinned into me; I was told that if I did not save up for my old age, I should finish up in the workhouse. Many people were all provided with money boxes almost before they knew what to put into them. Today, working-class folk are contributing to a comprehensive security scheme which is providing for sickness, industrial injuries, for widows and orphans, and for old age. It is only natural that the urge for personal thrift, which was such a feature of the days of social insecurity, has been adjusted to the new conditions of National Health Insurance and the Industrial Injuries Scheme.

I should like to refer to the description the Financial Secretary has given to the Budget whose proposals are embodied in this Bill—that of a "standstill" Budget. I would suggest a somewhat different and more appropriate term—a "standfast" Budget. These proposals represent the determination of the British people to stand firm on the course which they have set and which, they believe, will eventually lead to a solution of our difficulties. I regret, on several grounds, that the Bill does not contain more proposals for shifting the emphasis from indirect to direct taxation. Direct taxation is left, broadly, as it was, and it is perhaps a smaller pro- portion of the national revenue this year than ever before in our history.

On the other hand, there are one or two proposals in the Bill which everyone, I think, will generally welcome. Many people will be glad to see an end, at long last, to the inequitable and obsolete Land Tax. I am sure that the Chancellor of the Exchequer must have been strongly tempted to abolish the thing out of hand, without any fuss or palaver. But our passion for equity has led him to include in the Finance Bill some complicated and no doubt fair provisions for the extinction of Land Tax by compulsory redemptions.

I was a little worried, and I still am, about the manipulations, if I may use that term, of my right hon. and learned Friend in connection with the taxation of National Insurance benefits and the corresponding adjustment of Income Tax on contributions. He no doubt thought that when he could not collect the money on occasional benefits, it was better to drop the idea altogether, and logic probably drove him to make a corresponding adjustment in the Income Tax set-off on that part of the National Health contributions which relate to the benefits he is proposing to relieve from tax.

I have a better idea still, and I make a present of it to my right hon. and learned Friend, and that is to relieve all National Health Insurance benefits from Income Tax and, correspondingly, to make no Income Tax set-off for contributions. I think that that would be the best way of dealing with a difficult situation, for, after all, sickness benefit is not income within the acknowledged definition of income under the Income Tax Acts. It is not income from trade, vocation or employment; still less is unemployment benefit or maternity benefit. However, that is something which my right hon. and learned Friend may wish to consider on another occasion. It would certainly simplify considerably the whole administration of Income Tax.

Another matter in the Bill which troubled all of us in the House was the proposed increase in the tax on football pools. We had a very long Debate on that, but I think, in perspective, we see that the increased tax on football pools is not—as has been alleged by many who have written to us—a tax on the working man's pastime. His pastime is not costing him any more. It costs him no more to go in for football pools than before. His satisfaction, his excitement, his expectation, will not be diminished by the thought that if he wins a big prize it may be a thousand or two less than it would otherwise have been. The truth of the matter is that the tax on football pools is a tax on prizes. It is not even a tax on the promoters, because they will pass it on to the prize-winners. It is a tax on windfalls which has long been acknowledged by Chancellors of the Exchequer as a very desirable tax, and one which has no inflationary or deflationary consequences.

Listening to the speech of the right hon. Member for Saffron Walden (Mr. R. A. Butler) I thought that before he finished I was almost bound to hear what has now become the Tory slogan—"the crushing burden of taxation." If I may say so without undue offence, the Opposition should examine this repeated allegation and assertion about the crushing burden of taxation and the transfer of income to the State. In the words of the hon. Member for The High Peak 40 per cent. of the national income is being taken by the State. Those words need closer examination because they cannot be accepted on their face value.

Let us see whom this burden of taxation is crushing. A very good index to that is our scale of direct taxation. As hon. Members know, but may wish to be reminded, a single person earning £2 10s. a week pays no Income Tax at all. A married person getting £4 10s. a week pays no Income Tax at all. A married couple with one child can earn up to £6 a week before paying tax; with two children they can earn up to £7 a week, and with three children up to £8 a week before they are touched by the crushing burden of Income Tax. Even above that, with the operation of the band of reduced rate of tax at 3s., and with the reduced rate of tax at the 6s. rate, the effective rate of Income Tax on the whole of incomes is remarkably small. A single person earning £4 a week pays Income Tax at the effective rate of 9d. in the £. A married man with no children getting £6 a week pays Income Tax at the effective rate of 8½d. in the £ and a married man with three children getting £10 a week pays tax at the effective rate of 3d. in the £. Even a married man with three children, getting £12 a week, only pays tax at an effective rate of 11½d. in the £; £29 in tax altogether.

In a recent issue of the "Economist" there was a letter from an employer, who wrote:
"I have from time to time been exceedingly irritated by the excessive grumbling levelled against Income Tax. Owing to persistent publicity, I think that the average employee genuinely believes that he pays Income Tax at the rate of 9s. in the £ on his earnings. I frequently hear of cases of reluctance to work overtime because of, 'Income Tax taking nearly half the extra money.'"
He goes on, in that letter, to analyse the actual Pay-As-You-Earn deductions for a full financial year on his 168 workers. If the House will bear with me I will quote the experience of a full financial year of deductions on Pay-As-You-Earn from his engineering workers, to whom he said he pays somewhat more than the basic rate of wages: 18 per cent. paid no tax at all; 2 per cent. paid tax up to £1 a year, or 4.3/5d. a week; 4.1/6 per cent. paid tax of over £1 but under £2 a year, or 9¼d. a week; 2 per cent. paid between £2 and £3 a year; 2 per cent. paid between £3 and £4 a year and 1.1/5 per cent. paid over £4 but under £5, which, as he says, brings this result: that 30 per cent. of his workers were paying less than 2s. a week in tax—less than the pay for one hour's work.

All taxation is a diversion of private income to public expenditure. We hear much talk about taxation and the crushing burden of taxation and the 40 per cent. of all incomes which is taken by the State—as if this were a dead loss both to the people themselves and to the community at large; as if all State expenditure were necessarily a bad thing. We know, in fact, that much taxation is a redistribution of purchasing power.

I do not deny anything of that sort, but I say that if the State decides to take the income and redistribute it as it chooses, that is a discouragement to incentive for the person who earns it. If we are to take it from the working man and give it away to other people, because we think they deserve it, it means that that is a disincentive to the worker.

I will show that much of the money taken in taxation, and taken away from the working man, is, in fact, given back to the working man with something added to it. I will give examples of taxation which is redistribution of purchasing power, and the first I will mention is interest on internal debt. That takes £485 million a year. Surely that is one of the chief features of our taxation system which has the effect of redistributing income. Then we have cash payments, like old age pensions and insurance benefits and family allowances; but all these, as a charge on taxation, are costing us less than the interest on internal debt.

Other features of our taxation system surely mean that taxes are devoted to purposes which increase efficiency, prevent waste of man-power and increase the general well-being of the country. This is taxation devoted to purposes which are designed to brace the nation for the tasks which lie ahead, and render it fit and efficient for the tasks which rest upon us. Examples of that come to mind at once; in housing, education and in the Health Service. This taxation, also, is for internal and external security.

Here we come to one of the biggest single items in the whole of our financial system, that of defence. That is more than a charge upon our finances; it is a drain upon our man-power, our labour and materials. A reflection which I think we shall all do well to bear in mind is whether Britain can afford to carry this enormous expenditure, much of it waste from the point of view of economic recovery, much of it a drain upon national resources. We shall have to reflect on whether we can afford it and whether the security which we are buying with this money is, after all, real security. Then we also have taxation to keep down the cost of living, with food subsidies costing, in taxation, £465 million a year.

There we have 70 per cent. of the nation's total expenditure analysed in that way, partly in redistribution of purchasing power, partly in purposes which are designed to strengthen and improve the efficiency of the country, to secure internal and external defence and to keep the cost of essentials steady and so stem the pressure for wage increases. We all know that we cannot reduce taxation without reducing expenditure, and we are constantly asking, and I think we are entitled to an answer, where the cuts are to come and what will be the effect of making them.

I mention here one example of the sort of confusion of thought into which we can get on the question of reductions of taxation—the reduction of taxation by cutting out food subsidies. If we do we reduce taxation and actually increase the cost of living. Are we to reduce taxation by cutting out the Health Service? If so, we reduce taxation but increase the cost of sickness. Are we to reduce taxation by restoring secondary school fees and by withdrawing university grants? If so, we reduce taxation but we increase the cost of higher education. Are we to reduce taxation by cuts in the social services? If so, we reduce taxation at the expense of the aged, the sick, the crippled, the disabled, the blind, the widowed, and the unemployed. If it is in that direction that the eyes of right hon. and hon. Gentlemen opposite are turned in our immediate difficulties all I will say is that the Conservative Party are running true to type, and that their eyes are cast back right to 1931, when all those things were done as the basis of financial recovery.

I challenge hon. Gentlemen opposite by asking the question: are we to reduce taxation by cuts in defence? Another point is, if we are to reduce taxation, what shall we reduce? What would be the consequences on the level of prices and costs if we were to reduce taxation in certain directions? Take, for example, the tax on tobacco. If one of the prime purposes of the high tax on tobacco is—

The hon. Member is getting away from the contents of the Bill. He seems to be expounding economics and other matters which have no direct relation to taxation, which is, in the main, the subject matter of the Finance Bill.

The hon. Member has made various observations. I had understood that when the Financial Secretary had moved the Third Reading we were obliged to concentrate upon the contents of the Bill. I accordingly devoted my speech to a large extent to the somewhat arid surface of the contents of the Bill, only following the figures raised by the right hon. Gentleman. Are we at liberty to answer from this side of the House the allegations made by the hon. Member?

If I am in the Chair, I shall certainly give the same liberty of action which has been given to the hon. Member for Sowerby (Mr. Houghton). The hon. Gentleman is dealing with the question of taxation, but he also appears to be going into other matters which have no direct relation to it.

I beg your pardon, Sir. I can only plead that, being new to the House, I did, as part of my apprenticeship read through the whole of the speeches made on the Third Reading of the Finance Bill of last year.

The hon. Member appeared to me to be going into questions of expenditure, which is not, of course, appropriate at this stage, and also to be referring to alternative methods of taxation, which, again, do not arise.

I thought that questions of taxation, at all events, were very close indeed to the Finance Bill, but if I transgressed the Rules of Order, I apologise, and I hope that you Mr. Deputy-Speaker, will guide me if I stray again in the concluding remarks which I wish to make.

This seems to me to be so vitally important in connection with general statements which were certainly made, if I may say so with respect, by the right hon. Gentleman the Member for Saffron Walden when the "crushing burden of taxation" was referred to, that I thought I might be permitted to analyse the truth of that assertion, at all events in regard to some numerous sections of the community. If I may proceed—

That may be so in so far as relevant items are included in the Finance Bill, but not if they are outside the Bill.

If I might intervene, Mr. Deputy-Speaker, I would say that have listened carefully to what my hon. Friend has said, and that most of what he has referred to seems to be within the four corners of the Bill.

I was trying to examine some of the consequences of reducing taxation. I question very much whether reductions in taxation in certain directions would have the desirable consequences which hon. and right hon. Gentlemen opposite seem to suggest. For instance, are we sure that if we abolished some of our taxes the consequences would not be harmful? Reduced taxation is inflationary in that tax reductions are equivalent to wage and salary increases; they are equivalent to increases in personal incomes, and unless those increases in personal incomes are matched by corresponding increases in goods and services, I submit to the House that the result is inflation.

When we are speaking of incentives, as Members of the Opposition are constantly doing, I would remind the House that in last year's Finance Act concessions were made to 8,750,000 direct taxpayers, and that tax reductions ranging between £2 10s. and £86 5s. a year were made on all earned incomes up to £2,000 a year. I submit that my right hon. and learned Friend is absolutely right when he sets his face against releasing more loose money by reduced taxation at a time when the consequences are almost certain to be inflationary.

At one moment the hon. Member seemed to be commending the Chancellor for having made some tax concessions last year, and then he congratulated him on not having done so this year. Of which year does the hon. Member approve?

I am approving of this year in the light of the facts. I should have approved of last year's Finance Act had I been here to do so, but, in retrospect, I suggest that the tax reductions made last year have increased the cost of living because they have not been matched by corresponding increases in goods and services. To that extent the incentive which my right hon. and learned Friend hoped to give by the Finance Act last year has not proved to be as good as he thought it would be.

I am coming to the end of this analysis of the Conservative slogan of "the crushing burden of taxation," and such phrases as are used about the State taking 40 per cent. of all incomes. The very proposal made earlier for a reduc- tion in the standard rate of tax, which happily is not contained in the Bill now before us—

I should like to make it perfectly clear that the statement made by hon. Members on this side of the House is that 40 per cent. is the proportion of the national income and not the proportion of all incomes.

For all I know, it might be a higher percentage on personal income in some cases and a very much lower percentage in many others.

I wish to mention the question of incentives. We heard in an earlier discussion on this Bill, I think from the hon. Member for Hornsey (Mr. Gammans), about workers who will not work overtime because of the higher rate of tax. I submit that it is evident that workers who will not do extra time for extra money are not in need of extra money. If by reducing taxation we give them more money for no more work, what will be the consequence on the level of prices then? What is the significance of the nature of some of the expenditure on which many folks are embarking at present and which, surely, can have no bearing on incentives and does not confirm the suggestion that people are looking for more money income in order to enjoy a reasonable standard of life? Is there any sign in all that we see, of the crushing burden of taxation in industry? Is there any sign in their profits? Is there any sign in their dividends or in their bonus share issues which are becoming more numerous now that my right hon. and learned Friend has proposed to abolish the 10 per cent. tax on bonus issues?

I agree entirely that some revision of the basis of taxation on profits is probably overdue. The committee which the Chancellor has appointed to inquire into that subject will, no doubt, present a useful and interesting report in due course. The burden on industry is not taxation. The burden on industry is slackness, waste and outmoded habits of thought on the part of both management and men, together with the excessive cost of raw materials which come from overseas and for which we are being held to ransom by those who have them to sell.

In this Bill I think that, on the whole, we have sound principles of finance in the circumstances in which we find ourselves. What is now needed is the economic education and enlightenment of the people. I think that the country badly needs economic education. The only question is whether they will learn their economics from hon. Gentlemen opposite or from us. Some people say that there is no time for the people to learn their economics from the architects and founders of the welfare State. It is alleged by hon. Gentlemen opposite at times, that the Tory method of reduced taxation, in which the better-off will benefit and possibly the country will have the burden of 1,500,000 unemployed, is really the economic lesson to teach the British people. If that is the sort of lesson which is to flow from the political philosophy and the economic doctrines of hon. Gentlemen opposite, all I can say is that a return to that is terrifying, immoral and unthinkable.

5.35 p.m.

I was very much interested in the speech of the hon. Member for Sowerby (Mr. Houghton) not only because he is a comparatively rare visitor to the House, but for two other reasons. First, he attempted to deal with the Budget in a way in which I think it ought to be dealt with—not by making a piecemeal, meticulous examination of its propositions but by treating it as one in a series, marking a stage in our progression either upwards or downwards. Secondly, I thought I saw in his speech a preview of the sort of election speeches which the Labour Party will make when the General Election comes along.

I should like to warn him and his colleagues that they will undergo severe criticism if they do not cleanse themselves of at least two of the major errors of which the hon. Gentleman was guilty. He must certainly clear his mind of one idea. He seems to think that nobody, except those who pay direct taxes, bears the burden of taxation. He must recognise that in so far as taxation is a charge on production—and I should say that it is at least 95 per cent. that now—it is paid by every citizen. I must say that the hon. Gentleman is not alone in that illusion. He must also get out of the way of saying that high taxation is all right provided that the object on which the money is spent is desirable. The party opposite will have to rid themselves of that idea before they can make intelligent contributions to our economic thought.

I wish to follow the hon. Gentleman's example, because I do not think that the House should say goodbye to this Bill without yet another reminder of its implications for the future. I suggest that the implications are far graver than are generally realised. The gravity of the position lies in something about which we have heard a good deal today and a certain amount during the Budget Debates. I refer to this familiar figure of the 40 per cent. of the national income which is taken from production by the Government and spent on various objects. That is the highest figure in the recorded history of any country in the world. The nearest corresponding figure is that of the United States, which is 25 per cent. After that, Sweden and South Africa come next at 19 per cent.

I do not think that we have yet faced the fact that this unprecedented level of taxation is exerting continuous inflationary pressure upon our economy, and that it gravely threatens the cost of living. Not only does it gravely threaten the cost of living, but it has already affected it, and inevitably it is gravely affecting our costs of production. I do not offer that for the acceptance of the House merely because it is my conclusion. It is the conclusion held by the majority of economists in the country. When economists do agree to any large extent, I think they should be listened to. They have at last agreed on something. There is something far more serious even than that.

This inflationary pressure, far from becoming less or remaining stationary, is certain to increase unless we call a halt to our rake's progress. The danger of looking at the Budget in isolation is that people tend to ignore trends. The trend here is certainly that our commitments are inevitably becoming larger year by year. Another trend is that the yields from existing rates of taxation are becoming less and less. We have already heard from my right hon. Friend the Member for Saffron Walden (Mr. R. A. Butler) that the yields from the present rates of taxation in this Budget are below the estimates. I venture to predict that even this Budget will not balance at the end of the financial year. Unless we recast our fiscal ideas radically, our progress, from being a rake's progress will become Gadarene and we shall run down to the depths of disaster.

I do not propose to keep the House for long, but I want to put four ideas before hon. Members. Firstly, I ask the House to recognise that inflationary pressure exerted on the cost of living is the main cause of wage demands. I have very great sympathy with wage demands, and I cannot see how hon. Gentlemen opposite can support the Government in resisting demands for wage increases from classes of the community who are by no means overpaid, when they support a Bill like this which increases the taxation on certain necessities or quasi-necessities, like tobacco, which affect the high level of direct taxation.

May I interrupt the hon. Gentleman? In what part of the Bill is an increase of the duty on tobacco indicated?

I should have said maintain the high level of taxation on tobacco. I am grateful to the hon. Gentleman for correcting me. I should have thought that it was perfectly obvious that any form of indirect taxation of quasi-necessities must result in increased wage demands. I should have thought it was perfectly obvious that anything which tends to increase the cost of manufacture of articles and thereby raises the cost of living must mean increased wage demands. I say that there is something like hypocrisy, though perhaps unconscious hypocrisy—

May I ask the hon. Gentleman a question? Would not the removal or the diminution of the food subsidies have exactly that object?

Food subsidies are not in the Bill, nor is the tobacco duty.

I was going to say that I see something hypocritical, though perhaps quite unintentionally so, in the policy of wage restriction without any attempt to combat the steady rise in the cost of living which has already taken place and which will become more rapid unless steps are taken to arrest it.

On a point of Order. When you were not in the Chair, Mr. Deputy-Speaker, the Debate roamed very far and extended from the prices of American goods to I do not know what. When he was asked on a point of Order, your predecessor in the Chair implied that we could go very wide in this Debate, provided that we did not labour any one point too long if it was not directly in the Bill. Certainly, a discussion on the maintenance of the taxation on tobacco would have been allowed 20 minutes ago, and we should like your instructions on the point, because practically nobody has mentioned the Finance Bill.

That seems a pity, and I cannot comment on that at all. In a general way, the hon. Gentleman can refer to the cost of living, which he says is being affected by taxation in this Bill, but as tobacco is not mentioned I should not have thought that he would be right in referring to it.

I quite agree, Mr. Deputy-Speaker. The purport of my speech is to warn the House and the country that the maintenance of the present level of taxation which is enshrined in this Bill will be disastrous, and I will endeavour to keep to that general line.

I say that the level of taxation being maintained as it is now means that we are at the very best definitely committed, even if taxation goes no higher than the present rates, to reducing the real value of money incomes. I think that any increase in the level of taxation, so long as the present trends of Government expenditure are maintained, will inevitably lead to a reduction in the real income of every individual in the country. There is only one alternative, and that is a measure of inflation, and that in itself implies that it is to be nothing more than a temporary palliative unless Government expenditure and taxation should come down pro rata. The fact is that the Socialist terrestrial paradise is not only not here yet, but the prospects of it are actually receding.

The second point is the one which I have already touched upon in connection with the speech of the hon. Member for Sowerby. We must rid ourselves of the fallacy that the evils of high taxation do not matter provided that the product of that taxation is spent on wise or desirable objects. Economic laws do not work on humanitarian lines. The fact that we are spending the products of our high taxation on objects that are considered desirable does not at all affect the evil consequences of high taxation. If I were to borrow money from the bank to save the life of my wife, to educate my children or to do something else equally desirable, it has no effect on the fact that I have an overdraft at the bank. The political philosophy of hon. Members opposite seems to be that economic laws work in such a way that they can spend the products of an inflationary budget on worthy objects without harmful results. It is as if one said that if one puts ones money on a horse one will be in debt to the bank but not if one saves the life of one's wife with the money that has been borrowed. I beg of them not to attack expenditure from the angle of whether it is desirable or not, but from the angle of whether we have the money to spend, and whether, in fact, we are not spending money which is really not there.

The welfare State is not just a redistribution of wealth. By its very definition, it must mean incurring new items of expenditure, and in so far as these are incurred, they are a charge upon the production of the country. After all, even if it was just a redistribution of wealth, there would be certain losses due to the fact that money passes through the hands of the Government. Unless they incur expenditure for the good of the people which the people would in any case probably incur for themselves, it must be a new charge on the productive capacity of this country. That is the policy which is at the root of the welfare State, and that is the policy which will bring it down in ruins. We cannot incur new expenditure and pretend that the cost is not paid for by every citizen of the country.

The plain truth is that we are living beyond our means, and that the nation is actually spending money that is not there, with the inevitable consequence either that we land in inflation, or else impose a much lower standard of life on every single person in the country. At the moment, inflation has been largely resisted owing to the refusal to grant wage demands, with the result that the standard of living has become gradually depressed, and it will become much more depressed when it becomes evident that our commitments have increased, as they are bound to do, and that the yields have been less.

I am appalled that, on the Third Reading of this most important Bill, our Debate should be so sparsely attended, and that so little attention should be paid to it by the Government. This is the last chance in the great annual financial inquest of the nation before we go to our constituencies during the Recess. I wonder how many hon. Gentlemen opposite when they go to meet their constituents will point out that our salvation stands or falls by our internal economic health, which, in its turn, stands or falls upon whether we can remove the inflationary pressure that is bearing so heavily upon us. Do not let us forget one other thing. If we have a fall in our standard of life, which at the moment seems inevitable, that will bear in its train a steady encroachment on our civil liberties.

My third point is the familiar one of the disincentive effect. I do not see how it can be contended that high taxation, direct or indirect, does not hinder greater output and greater efficiency because that applies equally to wage earners or to directors of companies. How can anybody deny that when companies pay up to 70 per cent. of their profits to the Government? How can anybody deny at the present time that the high Excise Duties tend to make people demand wage increases? How can anybody deny that if a man is already paying a very high rate of Income Tax and Surtax, he is unwilling to take on more work and new commitments in the industrial ventures of this country? How can anybody deny that the salaried class with the present rate of tax is bound to demand higher rates of salaries?

My fourth point is that all of us, on whatever side of the House we sit, and everybody in the country, are guilty of focusing our attention too much on our external difficulties. We do that partly because we are under the impression that those difficulties are largely due to factors outside our control, and that therefore it is useless to worry overmuch about them. Our internal economic health is the prime factor in considering our external difficulties. Whatever solution, or partial solution, there may be of our external difficulties, and whatever help we may get from America or elsewhere, or through greater co-operation in Europe and throughout the Commonwealth, all that will be completely vitiated unless we can remove the effect of inflationary pressure at home.

We in this House cannot control many of the factors affecting our external position, but we can and must reduce taxation. I am afraid that all of us—and particularly hon. Members opposite—will get a rude awakening next year. I wonder how the speech of the hon. Member for Sowerby will read then, and if he will read it himself with satisfaction?

Cheer up! What is the good of whistling to keep up one's spirits when one sees the country being led gaily along the road to disaster by hon. Members opposite? They say that the very existence of high taxation tends to help industry. That is not only juvenile and pathetic; it is disastrous. I would exclude no single item of expenditure from our survey in order to see where economies can be made. I do not see, whether it is for defence purposes, social services, food subsidies, interest on the National Debt, or anything else, how one can honestly do otherwise.

There is no hope of survival for this country unless within the next year or two we can reduce our expenditure by many hundreds of millions of pounds. I cannot give the exact figure, of course, and if I tried to give a specific figure it would be only guesswork. I do not believe that any State that exists in the world today, or which has ever existed, could possibly survive if 40 per cent. of the productive earnings of the average man and woman has to be paid to the State by way of taxation. So much for the purely economic aspects of the question.

I wish to address my few remaining sentences to the Chancellor of the Exchequer. I am sorry he is not here, but I am the last person to charge him with discourtesy because, unlike some right hon. Members opposite, he is always prepared to listen to speeches made even by back benchers on this side of the House. I believe that a great responsibility rests on the right hon. and learned Gentleman's shoulders—a greater responsibility, indeed, than he realises. It is within his power to become a great national leader and to give a national lead to the country which will bring us back to the path of sanity. I can see the difficulty in which he is placed; he wishes to carry his party with him, and, therefore, he has to play up to the Left in party, and, at the same time, try to lead us on to a sound path.

The first thing I wish to ask him is not to delay too long in coming forward as a great national leader, because our life blood is slowly but surely ebbing away. Secondly, that he has established a great reputation for integrity. By integrity, I do not just mean honesty; I mean being consistent, being the same all the way through. It is most important, not only for the right hon. and learned Gentleman, but for the nation as a whole that he should maintain that reputation for integrity if he is to get all sections of the country behind him. He cannot maintain that reputation indefinitely if at one moment he makes great resounding idealistic national speeches and then the next moment plays the lowest sort of party game.

I am particularly anxious not to be offensive and not to appear to be offensive. I do not mean to be, but I would remind the right hon. and learned Gentleman of the great temptation which besets men in prominent positions to exploit their reputation whatever it may be, for integrity, courage, brains or skill, in the interest of personal ambition. I am not accusing him of doing that, but I do ask him to bear that danger in mind. I regard the situation as very grave. A lot of it is outside our own control, but our internal economic condition is within the control of this House. I think that we are all—myself included—committing a crime even in acquiescing in this Budget. Heaven send we do not commit the same crime next year.

5.57 p.m.

We are parting with a Finance Bill which puts our expenditure and taxation at a very high level. That is admitted, but what has surprised me this afternoon is the way in which certain hon. Members opposite have tried to suggest that this high taxation is almost a virtue. They cannot be genuine. The hon. and learned Member for Northampton (Mr. Paget) suggested that industry is really fortunate in having this high taxation. He implied that if they did not have it, many things would not be done, that they would have to do certain things themselves, and that the expense of doing those things would fall on them. The suggestion has been made that wage increases would be asked for. It is quite evident that hon. Members opposite who speak in that way have never had anything to do with wage negotiations.

I can assure them that if in such negotiations it were to be suggested that because of the services that were given by statute or that industry was obliged to give, plus any they gave voluntarily when they could afford to do so, the workers should drop all applications for wage increases—if that were suggested by hon. Members, I say they would get no change whatever. The workers say quite rightly, that they take all that and then want to be paid for the labour they render. To say that high taxation is an indirect service to industry is completely to misstate the position. To say that it has no relation to the high costs is also a misstatement, as is the suggestion made by the hon. and learned Member for Northampton that we are having trouble in the world today not because of high costs, but simply because people will not buy our goods.

There is a certain amount of truth in the statement which the hon. and learned Member made about the United States. They have a high tariff policy, and there are the pressure groups. If we got in, we should probably find them working to get us out again. There are, however, a large number of articles which we can supply to the United States and on which pressure groups are not working. We could sell a great many more motor cars in the United States if only our prices were comparable, size for price. It would not be in the quantity in which the Americans make cars, but the American manufacturers themselves have said that as long as it is only a small number, it would not pay them to tool up and they would not make that particular type of car. If we could send 100,000 motor cars to America, it would earn a great many dollars. The reason we cannot do it is that our costs are not right. I believe we could sell a great many more goods if our prices were right.

I have just returned from a visit to America and Canada and, whatever the hon. and learned Member may say about America not wanting our goods, that is not the case in Canada. The Canadians are most anxious to buy our goods and there is no suggestion that they will keep them out. They know that this country is the market to which they send their produce and that their produce has to be paid for. In the old days it was paid for by triangular multilateral trade. Today it is not being paid for and the Canadians are begging us to come and see what they want and to send our goods.

Everywhere I was told, "The trouble is that your prices are too high." It is not the case that tariffs are causing this difficulty, because the Canadians are buying from the United States who have the same tariffs to surmount. The Americans are getting the market and we are not, and the reason is that our costs are too high.

I think the hon. Member must relate the high cost of production to taxation, otherwise it is not relevant on Third Reading.

You did not hear the arguments put forward earlier. Mr. Deputy-Speaker. I was trying to show that our costs are too high, and in industry we maintain that one of the reasons they are high is the enormous burden of taxation which we carry. The hon. and learned Member for Northampton (Mr. Paget) suggested that this is a benefit to us instead of being a burden and I have tried to show, from personal experience, that he was quite wrong, that we must get our costs down and that one of the ways to do it would be by reducing the burden of taxation which industry has to carry.

On a point of Order. What is the connection between the cost of production of a motor car, as distinct from the profits on it, with anything in this Finance Bill?

I was just drawing the hon. Member's attention to the fact that he must keep slightly closer on Third Reading to the contents of the Bill.

I think it is true to say that the hon. and learned Member for Northampton (Mr. Paget), when unfortunately you were not in the Chair, Sir, was able to develop his argument at some length, and my hon. Friend the Member for Edgbaston (Sir P. Bennett), no doubt without fully realising the position, is simply following the argument adduced by the neighbour of the hon. and learned Member for Kettering (Mr. Mitchison).

Is there any reason why, a person having gone down the wrong road and having been warned that he is on it, should then continue on it?

I have made my point and to my own satisfaction I have completely demolished the arguments of the hon. and learned Member for Northampton. I am sorry that he is not here to admit it. No doubt he will read what I have said and if he does not agree he will tell me so.

Before the hon. Member leaves that point perhaps he will explain something to me. He is a great industrialist and we always listen to him with very great care on industrial matters. Would he tell us from his own experience, and in his own industry, how taxation enters into the cost of production?

That is not in the Bill and it would take me a long time to deal with that point. I shall certainly have very great pleasure in discussing that matter with the hon. Member at our leisure, but we could not do it in the time at my disposal today, nor is the subject in the Bill.

The point I want to make is one, I think, in which he will follow me, and it is on depreciation. We have heard a lot about the concession which has been made in the Budget by the increase in the initial allowance for depreciation. As we have tried to point out, and as my right hon. Friend the Member for Saffron Walden (Mr. R. A. Butler) certainly pointed out, we are not getting anything at all; we are only having our entitlement a little earlier than we should ordinarily have it. In the long run we shall get exactly the same amount allowed to us under this scheme as under the previous scheme or the old scheme we had before the war, when it was averaged over the whole period.

This concession is not really what industry has been asking for. It is grateful for this little interest-free loan, which is all it amounts to, but the problem remains. Before the war we were depreciating at 10 per cent. per annum. Of course, it was not exactly that, because, as everyone knows, it is on a diminishing figure, but for the sake of clarity I will say we depreciated at 10 per cent. per annum. At the end of 10 years we had sufficient to replace our plant. Now that plant is costing, hon. Members might say, twice as much; as my right hon. Friend the Member for Saffron Walden said, in some cases it may be three times as much. What happens when we come to accumulate the amount of depreciation? We have only half the amount necessary to replace our plant.

Therefore, it is said, we must make provision ourselves, and so we set out, if we can, to make provision. We say we will double the amount of our depreciation and, instead of depreciating at 10 per cent., we will depreciate at 20 per cent. But we are allowed only 10 per cent. in our negotiations with the Revenue, so that the second 10 per cent. has to pay tax, which means at least another 10 per cent.; and so, in order to replace a tool today, if it is to cost us twice as much, we have to depreciate at the rate of 30 per cent. If it is to cost three times as much for the same plant it means that we have to depreciate at 50 per cent. per annum in order to replace it.

When that is explained it will be realised how serious the position has become in industry. We are accused of not keeping our plant up to date and of not competing with the Americans, and we are told that we are not efficient. We shall never be efficient unless we are allowed to depreciate the value of the plant so that we can replace it when the time comes. I asked my accountants to work it out, and they told me that under the present rules and regulations our plant is supposed to last 26 years. If it takes me 26 years to replace my plant, what chance have I of complying with the exhortations from all quarters to be more efficient? It is quite impossible, and for that reason industry is asking the Government if it cannot be done in this Budget, to consider the question and go very carefully into it because industry is running short of money. New issues are coming out. They will come in a flood and the finance will not be there. One of the reasons why we are facing the future with so much concern is that we can see our plant running down, we cannot see the ways and means of replacing it, and we know that the whole nation will suffer as a consequence.

6.8 p.m.

I hope the hon. Member for Edgbaston (Sir P. Bennett), to whose views we always listen with the greatest respect, will forgive me if I do not comment on the points he has made. I shall not detain the House long, but I want to say a word on behalf of the Executive Committee of the National Trust—a word of thanks to my right hon. and learned Friend for what he has done for us under Clause 27. Hon. Members may remember that this Clause provides for the exemption from Death Duties of money bequeathed to the National Trust as an endowment in respect of properties which may be made over to us. We consider that that will be very valuable in view of the great difficulties that we are likely to have in maintaining our properties in future.

Arising out of that, I hope the public will understand first, the importance which the Government attach to the work we do and, secondly, the fact that the Trust depends upon public subscriptions and bequests. There are far too many people who seem to think that the National Trust is itself some kind of Government Department. Of course, it is nothing of the kind. It depends entirely on support from the public, and only if that support is forthcoming in sufficient measure will the Trust be able to carry out the great national work which it has done in the past and which it hopes to do in the future.

6.10 p.m.

If I go over a certain amount of ground that has been traversed before I hope I may have the forgiveness of the House, because it seems to me that the one major point I want to put before the House has been mentioned more than once already. I think every hon. Member wherever he may sit, has a profound respect for the hard, realistic Budget which the Chancellor presented for our consideration. We value its lucidity; we value its courage; and we value its foresight. Now, however, that that Budget has gone through the House almost without the change of a comma, certainly without the slightest material alteration in the scale of taxation and expenditure, I would ask the House to consider what it really means.

What is the plain, stark fact that we have to put before the country for its consideration now and when the election comes? Does it not narrow itself down to this one straight issue, that taxation is taking 40 per cent. of the national revenue, that expenditure is £3,700 million on our general account, and that there is an overall surplus of only £14 million? With some branches of taxation working out the law of diminishing returns, we have this overall surplus of £14 million; and with all respect to the Financial Secretary, in the one branch in which they have attempted to arrest the fall in returns, that is, in the penny on beer, the law of diminishing returns may operate yet as it has already done. April was a very hot month, and May a cold month, and now we are back in the hot weather again, and the possible slight increase the right hon. Gentleman welcomes will have been due to the hot weather in April.

The overall surplus is £14 million. The House should mark the figures which my right hon. Friend the Member for Saffron Walden (Mr. R. A. Butler) has put before it today. If those figures are borne out by the law of diminishing returns, there will be no surplus and there may be a heavy debt. How are the Government to face the deficit with the present scale of taxation, with the present yield of taxation, and with the possible further yield of taxation, looking to the effects of the beer duty; and what will be the effects if there is a reduction in industrial profits? What provision are the Government making? What margin have they left? I ask the Economic Secretary, who is to reply to the Debate for the Government, to give special consideration to the figures that my right hon. Friend put before us today, because I venture to think they are of profound significance, and they cause us a very great deal of anxiety.

I have listened to most of this Debate, and have heard admirable suggestions made from this side of the House for a reduction in Income Tax, for a reduction in Purchase Tax, and for abatements here and for abatements there, and I have listened to the arguments produced by the Government. With all respect to them, let me say to them that if they were to abandon those fine-drawn non possumus arguments, their task would be easier and this House would be better content. After all is said and done, any realistic and reasoned survey of the Budget statement and of the facts put before us by the Government leads to this point, that the Government dare not reduce taxation at the present time. They dare not reduce taxation because that would upset the whole of the balance of the Budget.

Although they may use those fine arguments, the plain fact is that I do not think any Minister, in my recollection as a Member of this House, was ever put in a more painful position than was the Postmaster-General when he was sent down to justify an increase in the telephone charges. What he had to say, in effect—although he was not allowed to say it—was that the Chancellor must draw in revenue from wherever he can get it, and so he proposed to use what should be a public service as a vehicle for increasing taxation. That is a thoroughly bad thing in any national service and most of all in the Post Office.

Last night we listened to a careful and legalistic argument by the Solicitor-General on the readjustment of the Estate Duty. The right hon. and learned Gentleman is one whom we all greatly respect, and to whom we are indebted for the courtesy with which he invariably treats Members of this House, but why did he not say quite frankly in that fine-drawn argument what really was the revision of the Estate Duty? Simplification of it is necessary, and everybody who administers estates will benefit by simplification and will welcome it, because the complexities of the business take time. But what did the right hon. and learned Gentleman say? It was not just a readjustment and simplification of the Death Duties but a further grabbing in of another £20 million of revenue, and the sweeping in of £20 million of capital into the general account, thereby destroying for the future that amount of taxable capacity.

Whereas we are taking this 40 per cent. of the national income, economists have warned us that 30 per cent. is as much as can be taken with safety without endangering the security of the body economic. The Economic Secretary is a trained and highly competent economist. Perhaps he may say we should never listen to economists. I have asked myself what an economist is. I have come to the conclusion that an economist is a man who takes a result from a set of figures and says that every other economist who produces a different result is wholly wrong. I take what is a considerable consensus of opinion amongst economists, which is that 30 per cent. of the national revenue is as much as can be safely taken for the purposes of taxation. Yet we are taking 40 per cent.

I wonder if the Economic Secretary will justify that in the light of our position? Like other Ministers, he extends to us a generous invitation to go over to that side of the House and do his job for him. That is an invitation I do not propose to accept now. Perhaps, a year hence I shall be called to act upon his advice, with others, and thereby take this work in hand. I must express the earnest hope that the country will understand the unvarying and inexorable facts that we are taxing up to the very limit of our resources, and that in some respects we are taxing up to the law of diminishing returns. We are absorbing the whole of the national taxable income. We may be absorbing more than that in the national expenditure.

How are the Government going to provide for any recession in our economic positon as long as our present scale of expenditure is maintained? There is no escaping the fact—absolutely none—that we are taxing to the maximum. It is of no use for the Government to come here and ask us, "Do you mean to cut defence? Do you mean to cut the social services? Do you mean to cut the food subsidies?" Only the Government are in possession of all the knowledge which is necessary for a decision. Only the Government have the power to apply that knowledge. On the Government rests the responsibility of so applying it that we may meet the future without a resort to inflation, which will be disastrous to all the community, and not least—indeed, most of all—to the wage-earning people in our community.

I do not want to indulge in pessimism. The last thing I would indulge in is "sob stuff" with regard to the social services, which are now so great a part of our national life, and for this very good reason: that my memory of our social and industrial conditions goes back to the late 'eighties and early 'nineties; I know what conditions were like in our great industrial cities in those days; I know what horror there was of unemployment, the Poor Law and the workhouse. Therefore, I for one feel a sense of immense and proud satisfaction at having taken a part, however small, in that great work which is bringing so much happiness, security and great improvement in the national health today.

Nevertheless, I cannot disguise from myself that in the present state of the world all those great social services, with all the immeasurable benefit they have brought, are today so delicately poised upon an unstable economy that unless we can bend ourselves to the restoration of a stable economy and buttress that stable economy, all that for which two and three generations have worked, the success of which now seems almost to be firmly in sight, may be in peril. That is my fear: not on the burden of taxation so much on myself and others, but the reflection of that taxation upon our social system and our social security.

I therefore ask the Government to make it quite clear, and to put the straight issue before the House and the country now and in the future, and above all when the testing time comes, so that we may feel that all that human nature and human power could do has been done to make the work of these years not only supremely beneficial but firmly based on a stable society and a firm and impregnable economy.

6.22 p.m.

I hope I may be able to do something to relieve the histrionic and fallacious gloom that appears prevalent on the benches opposite. There was first of all the hon. Mem- ber for Farnham (Mr. Nicholson). The statement in his speech that surprised me most was his assertion that all economists agreed with him. We can look into that in a minute. Having compared himself, I thought rather unkindly, to the Gadarene swine and complained of the scanty attendance in the House, he immediately absented himself and rushed away somewhere—no doubt downhill, to judge from the tone of his speech. Then there was the hon. Member for the Edgbaston Division of Birmingham (Sir P. Bennett), who told us that industry was going to the dogs. Having delivered this momentous verdict he, too, disappeared to some kennel or another, and we were left with the hon. Member for Aylesbury (Sir S. Reed). All I can say about him is that I am glad to recognise a certain similarity of ducks all over the world, and to know that in Aylesbury as on Ilkley Moor apparently they eat worms.

I am sorry for hon. Members opposite that they should feel like this. I think they might consider a little bit more what happens to the 40 per cent. of which they have so consistently complained. They talk about its being taken. We were told, for instance, by the hon. Member for Edgbaston that taxation had no conceivable effect on wage negotiations or, apparently, on the level of wages. I wonder whether hon. Gentlemen opposite would remember one or two things? If taxation were not levied there would not be a National Health Service. There would then be more illness in the country and more of the inevitable waste that comes from illness, so that expenditure which is now borne out of the funds levied by this Finance Bill would fall on individuals.

Now that money is not taken by some mysterious person who hides it away in a cupboard. It is taken for a use for the benefit of the community, and it is as truly an economic advantage if it is used on a public service as if it were used on a similar private service, with the added advantage that in the case I have given the public service has proved to be both more efficient and more equitable than the private one ever could have been.

As regards wage negotiations and the level of wages, does the hon. Member for Edgbaston really suppose that if the price of food in this country were to be given the sharp rise that must inevitably follow dealing with the food subsidies in the way he and his hon. Friends have from time to time suggested, that would not have an immediate effect on wage demands and would not add further in that respect to the costs of which he is already complaining? I think it shows an entire sense of unreality to divorce in this way what is done publicly from what is done privately.

Those are questions of means. But in view of the end in this case, whether it is the health of the population and therefore the avoidance of waste in that way, whether it is the ensurance of an adequate minimum living standard by food subsidies and the consequent avoidance of the waste that follows from starvation just as much as it does from ill-health, or whether it is the avoidance of the waste that arises from unemployment by the judicious expenditure of public money, in the one case and in the other, the use to which the revenue we are about to grant today is to be Put is highly relevant.

The question how far these desirable objects should be attained by a public service or by private enterprise is indeed one which divides the House acutely. But to say that the objects may be entirely neglected in the one case and only considered in the other is to import an element of unreality into our discussions which only reflects the complete unreality in the criticisms that are made by hon. and right hon. Gentlemen opposite on the policy of this Government. There were several instances in the course of the speeches to which we have listened.

I come back to what, after all, is perhaps the main burden of criticism. We are told that we cannot afford this expenditure; that it must in some way or another be reduced. I find myself entirely unable to attach any real meaning to that, unless the use to which the expenditure is put is also to be considered. When I am told that in some way or another there is some absolute truth known to all the economists and the hon. Member for Farnham, as well as to the hon. Member for Aylesbury, which makes it imperative that the expenditure should be reduced, then I assert that those who say that must at least face up to the consequences of that which they are so strenuously demanding; and without calling upon them to fulfil the rôle of my hon. and right hon. Friends on the Government Front Bench, I can at least say that it is wholly unreal to ask for something, unless the consequences of that which is asked for are also considered. In this particular case if they call for the reduction of taxation so strenuously, the inevitable result will be to leave the Exchequer with less money and somewhere or another a reduction must be made.

We have heard much about uneconomic expenditure. From one point of view, perhaps a narrow one, the obvious uneconomic expenditure in this country is on defence. It is the one expenditure which hon. Gentlemen opposite do not wish to reduce. So far as I can ascertain what their wishes are, they desire to reduce just those expenses, which, in fact, have a beneficial economic result such as education, the Health Services, National Insurance and National Assistance. They vary in their criticisms. No one would accuse the right hon. Gentleman the Member for Saffron Walden of wishing to reduce expenditure on education, but he particularly, as one who is charged with the higher policy of his party, whatever it may be, should be in a position to tell us which of the other services he would like to have reduced.

Had I been permitted by the Chair I might have given a lecture not only on Conservative policy, but on all the aspects to which the hon. and learned Gentleman is referring, and also various forms of aquatic sports and other matters not included in this Bill. Unfortunately, I had to keep within the rules of Order.

I appreciate the right hon. Gentleman's difficulty on this occasion, but I think he will remember that it is not the first time that he and his friends have been asked what it was they meant to save on.

The hon. and learned Member cannot deal with what is not in the Bill. He cannot discuss something which is outside the Bill.

I shall leave that subject entirely. I can do no more, and I hope that at some future opportunity we shall hear of it.

For a moment I want to turn to one other thing. As I see it, this is not a Finance Bill of major importance for what it does, but it is of major importance in that it shows courage and good judgment in refraining from what is an attractive invitation to a Chancellor of the Exchequer towards the end of a life of a Parliament—to give a concession here and there. With courage and judgment it has been shown that these concessions could not be made and, therefore, were not made, as indeed has been recognised on both sides of the House. It seems to me that at this juncture of our affairs it is exceedingly important that we should make it clear to the world at large that we are not going to be deterred by what we might call the cheapest of democratic considerations—into any unbalancing, on a long view, of the state of our finances. That tribute ought to be paid and the justice of it has been recognised on both sides of the House.

6.34 p.m.

The hon. and learned Gentleman the Member for Kettering (Mr. Michison) began his speech by asking the Tory Party to cheer up. There are various ways of cheering up people, but the lugubrious speech of the hon. and learned Gentleman, which was so full of dismal matters, was such that no one could possibly be cheered by it; it was the type of speech which would hardly go down in the driest Scottish circles. I know he will excuse me if I do not follow him in the line that he took, because while his skill is great, mine is very minute and I could not hope to follow him in that respect. I should like, first, to refer to one or two improvements which have been made in the Bill during its passage through the House. I thank the Government for the fact that we have been able to improve the position of amateur dramatic societies and matters of that kind. It was a benefit which was extracted from the Government after some argument.

There were various ideas to start with, but, at the end, most people realised that the suggestion came through the ingenuity of the hon. Member for Torquay, as so much in this House does from time to time. However, I would not like to refer any more to that. At any rate I have managed, in the first minute or two of my speech, to make the hon. and learned Member for Kettering laugh, and I have never seen him laugh before except at his own jokes, which nobody else laughs at in any case. I do not want to be drawn into any argument on this matter of the concession to amateur dramatic societies. I approve it wholeheartedly. I feel really better for it. On the other hand, I cannot see how taxation will be reduced, because, however much one approves of the Budget it is giving very little to industry.

Yesterday, the Chancellor of the Exchequer reproved the Conservative Party because we had made it a point up to the time of this Budget, that if a man left his money to his wife he would pay a lower rate of duty than if he had left it to a naughty lady. If I had said, four years ago, that one of the things the present Chancellor of the Exchequer would do would be to equalise the position of the legitimate wife and someone else as far as Death Duties are concerned, I would have been told that I had let my imagination run away with me. Yet, after hearing the Chancellor of the Exchequer's speech yesterday, we now realise that it can happen.

In dealing with that matter the right hon. and learned Gentleman, in one of his more sanctimonious speeches, began by saying:
"As I have to go in a few minutes…"—[OFFICIAL REPORT, 11th July, 1949; Vol. 467 c. 107.]
In other words, throughout the proceeding on this Bill, he was very often absent. There has never been a Chancellor of the Exchequer who has been in the House so little. I quite realise that he has other duties to perform, but it should be noted because it is not very hopeful for the future. He ended the speech which he made yesterday by pointing out that his object in dealing with inheritances as he did was to allow greater freedom to the testator. The right hon. and learned Gentleman says that the testator can do anything he likes, but if the testator does something foolish the Chancellor can go on to an election platform and ask why should he be allowed to inherit anything. That was a most ingenious plan and, if we had followed the Chancellor's speeches in the past, I have no doubt that we should find that he has made very full use of it.

We say that people should be encouraged, rather than discouraged, to leave their money to their families, and that we should make the rate of duty less in that case than where the money is left to persons outside the family. That may be interfering in a limited way with the freedom of the testator, but we must remember the enormous amount of interference when the Treasury take up to 80 per cent. of his estate. The plea made by the Chancellor was, therefore, very weak and worthy only of the lowest type of electioneering.

We are told that the Chancellor expects £185 million from Death Duties in a full year. Previous to the war, at a lower rate of duty, the Treasury got £80 million a year. We heard from the Government Front Bench yesterday a complicated argument in support of taking all that money, and of putting it into capital expenditure such as houses and buildings. If we compared £185 million today with £80 million before the war, when spent on capital equipment, we should find that we did not begin to get an equivalent result, although the Chancellor is raising double the amount of money. Therefore, the Death Duties are beginning to be a hopeless failure because the Government have depreciated the buying power of money. Although they are taking more nominal pounds, the effect is very small when they try to use it for replacement of capital.

We heard yesterday about the Government taking over a new farm in Wales. What will happen? They will have to put capital into the farm. Suppose they wish to spend £100 upon a drain. That will be new capital expenditure. I can tell them that they will get in direct labour, for their £100 about the same as could have been obtained for £40 before the war. The Government have continued to take from the capital of this country and use it in ways which are not productive, until the £ is incapable of developing industry as it should. I agree with my hon. Friend the Member for Edgbaston (Sir P. Bennett), who said that although the Bill will give a definite lead in a small but short-term way, in respect of depreciation, there is no relief from the enormous taxation which the Government take directly, such as Income Tax, and which should go into the re-building and increasing of our capital.

The Government are taking out of one industry and another something like £100 million a year, which should be conserved in industry. It is wrong for the Chancellor of the Exchequer to tell industry that it is not developing and, at the same time, to do all he can to prevent development. The lectures of the Chancellor are worthless. They are doing very little good in the country. As a lecturer the Chancellor is supreme, as a lawyer he is amazing; his language is wonderful, but his effect upon the electorate is not very great at present, and not such as I would like to see it.

I said just now that there had been amazement in my constituency and anywhere I spoke, when I told people that the Chancellor was endeavouring to reduce the position of a few married women, and was actually succeeding. The number may be only 10, but it is there. What an amazing thing it is that the Chancellor, who is always talking about abstinence and is always being held up to the country as such a good man, should be the person to reduce the price of beer by 1d. Just imagine what would have been said about the Tory Party on such an occasion as this, in our present financial position, if we had reduced the taxation on beer by 1d. I am glad the Chancellor has done it. It was a small act of courage. It would have been better if he had done more in other directions, such as taking 1s. off the Income Tax. Exactly the same thing would have happened. We were told yesterday that the reduction of Beer Duty was already beginning to have an effect. The Chancellor has taken our advice in reducing the tax on beer. I would like to see him introduce a short special Budget to amend some of the early Clauses of the Bill and certain others, but I fear that he will not be sensible enough to do that.

A point raised yesterday concerned a small principle in Clause 13. Although, under the safeguarding duties, the Board of Trade have power, in particular cases, to reduce the duties, it was to be done in the interests of trade as a whole and only if a sufficient amount of the article in question was being produced. Imports could then come in for a certain time. That was quite natural. It was introduced by a very sensible Government, and it was a reasonable proposition.

It is not reasonable but is grossly dishonest for the Board of Trade to use the power to give relief from duties not in the national interest but to give a hidden subsidy to one of the incompetently-managed Government airway corporations. That is done not in the general interest or for greater production but merely in respect of one type of aeroplane of 120 ft. wing span. That sort of thing will bear more heavily on English producers by taking away their protection, and it will be used as a means of giving an underhand subsidy to a Government industry. We shall have to consider the whole question of these duties. For a very long time it has been realised by some people that if the Socialist Party came into a tariff country they would use tariffs in a grossly unfair way to encourage Socialism and hurt and injure other forms of trade and industry.

I do not think I need say very much further about this Bill. [HON. MEMBERS: "Hear, hear."] I am glad to hear those cheers because I was about to say that the Bill does little to encourage industry and in case after case does more to discourage industry than almost any Budget of which I am aware, I deeply regret that the Chancellor did not use his position to come here today, not to scold or to tell people how bad they are, but to do something to rebuild trade and industry, which is so necessary at present.

6.52 p.m.

We have had a very eloquent speech from my hon. Friend the Member for Torquay (Mr. C. Williams). I was glad that the blinds were raised at the end of his speech so that the sun could shine upon him, as I believe it always does upon his constituents. The only point upon which I disagreed with him was when he praised the power of language of the Chancellor of the Exchequer, but that is a point to which I shall refer later.

When I had the honour to address the House on the Budget I said that it was a climacteric Budget. I should now say that the turning point has passed and that the policy in this Bill is coming to an end. The policy incorporated in the Bill is the policy of deflation, or, if the Chancellor of the Exchequer attaches importance to his figleaf of disinflation, the policy of deflation by high and increasing taxation. We have always warned hon. Gentlemen opposite that if they sought to balance our internal economy not by cutting expenditure but by increasing taxation, the results would be both dangerous and unpleasant.

The hon. Member for Sowerby (Mr. Houghton) said that this was a standfast Budget. Is the economic position of the country a standfast position? When we are losing gold at the rate of about £1 million a day, I should have thought that "standfast" was the very last word which one could have applied to what was going on in the country. Like all other Socialists, the hon. Member made no reference whatever to that aspect of our economy. The truth is that at the very first breath of the buyers' market, of which the Chancellor of the Exchequer has so often warned us, the whole house of cards built by hon. Gentlemen opposite looks like falling down.

Many of the things in this Bill account for the danger of our present position. There are both big things and small things, and I shall start with one or two of the smaller things. My right hon. Friend the Member for Saffron Walden (Mr. R. A. Butler) said a few things about Customs and Excise and pointed out that the revenue was falling. The revenue is falling on commodities consumed in this country on which high indirect taxes are paid. Although the right hon. Gentleman the Financial Secretary denied it, that is why the Beer Tax had to be reduced; the consumption was falling. That is why the tax on wine has had to be reduced. Money was going to purchase other commodities upon which the tax was not so high, thereby, on the whole, damaging our economy. The same thing is happening in regard to spirits, and the same thing is likely to happen in regard to commodities subject to Purchase Tax.

Therefore, as far as indirect taxes are concerned, we are reaching the stage of diminishing returns. This reinforces my statement that the policy is coming to an end. We see it on a bigger scale in regard to the doubling of the initial allowances. This doubling of the initial allowances is, first, an admission of continuing inflation, because initial allowances were originally granted in 1945 in consideration of the inflation which took place during the war, and they are now doubled in consideration of the inflation which has continued since the war. The second admission is of the inequity of taxation placed upon company reserves. If that taxation was not inequitable, this clumsy and wholly inadequate solution would not have been put forward.

Some very wise words were said upon this subject by that distinguished ex-member of the Board of Inland Revenue, Mr. Chambers. This is what he wrote recently:
"Whatever the true figures, what is quite certain is that the figures for 'net capital formation at home' in the Government White Papers give, no doubt unwittingly, a false picture, and one which in no way reflects the danger that the physical capital in industry, as distinct from its money value, may be declining. The accounts of many, if not most, industrial concerns, also give a false picture because they, too, make their provision for depreciation upon what the assets cost originally, and not what it will cost to replace them."
There he was pointing out not only that the prognosis in these White Papers is wrong but that the actual stated facts are misleading. These White Papers are distorting mirrors paid for by the public.

The truth is that for every £1 given in wear and tear allowances, earnings of at least £3 are required to counteract the rise in the price level alone. This taxation of profits which are due to inflation and which are not true economic profits at all is taking a toll of our existing capital assets. That is why high retained profits in industry are absolutely essential, because it is from retained profits in industry that our main savings come, as my right hon. Friend the Member for Saffron Walden pointed out. The Chancellor said that savings might be inadequate but we would save through a Budget surplus. Probably the Chancellor will not get a Budget surplus, but in any case, the high taxation required at the present level of expenditure will simply result in dis-saving by the public. We see that small savings have gone down £10 million already this savings year, and no doubt, if the figures were available, we should find that the big private savings have decreased by a very much larger figure.

This very high taxation of retained profits in industry should be contrasted with what goes on elsewhere. In the case of big corporations in the United States the tax on undistributed profits is equivalent to 7s. 6d. in the £—it is less in the case of small corporations— whereas here it is over 10s. in the £. This process means a loss of competitive power, inflexibility in our economy and social immobility leading to industrial inefficiency. That is why the Chancellor was so reprehensible on Second Reading when, in one of his "mad parson" moods, he talked about "frightfully high profits" without mentioning that the figure he gave was a gross figure and did not represent the true economic profits, and that much higher figures were essential if we were to maintain our place in the world.
"But with the morning cool repentance came."
He more or less unsaid what he had said at Blackpool, and so we will let him off with a warning.

The most important effect of this Bill is the sum total of all the taxes together and what effect they have upon our economy. The effect they have on our economy is rising prices and rising costs and rising wages. It is all very well for the hon. Member for Sowerby to say that it is really only a redistribution and, therefore, we should not worry about the burden of taxation and a man should not worry about the indirect taxes he has to pay on beer, tobacco and so on. The short answer is that it does not work out like that.

We have always pointed out that every time in history when taxation has approached this level there has been the same result—costs and prices go up. That has happened here. It is working out exactly according to the book and exactly at the pace laid down. It is the main thing that is causing the loss of gold and the precarious state into which our economy has now fallen. No good intellectual answer to this proposition has ever been given by a Socialist. The general theme is, "It cannot happen to us, we are the chosen people; for us economic history has stopped." That is what most of the speeches opposite really mean.

And when prices go on rising and gold goes on flowing out, what do we get? We first get exhortation, this flood of stuff from the Chancellor in his wretched, broken, commercial Johnsonese which he thinks will have some effect on us. Exhortation never has much effect on the people of this country; I am devoutly glad to think that they never react to that sort of tripe. When exhortation does not work, the Minister of Health insults people and says that they are enjoying prosperity beyond their moral stature. That does not work either and now, when all these things have failed, the last resort is tears. We have whimpers from the Minister of Fuel and Power and, from the Minister of Health, the shriller cries of arrested political puberty.

It will not do. The present state of our affairs is well summed up, without naming names, in the report of the Bank of International Settlements which came out a short time ago and which should be compulsory reading for the Chancellor once a night for the next 20 nights for a start. I shall quote a short extract from that report because it is extraordinarily apposite to this Bill:
"If a country is in disequilibrium because its budget expenditure is too high or its investments are too ample or costs are maintained at an uneconomic level or the exchange rates have got out of line with realities (or there is a combination of two or more of these factors) with the result that an untoward deficit has arisen in the balance of payments—if in such a state of affairs the country concerned obstinately refuses to make any alteration either in its budget or credit policy or in its control of prices or exchanges—there is no reason to suppose that lack of equilibrium will not continue and this will mean that the monetary reserves of such a country will be eaten into and the proceeds of foreign loans and grants wasted simply to perpetuate the rigidities which are at the bottom of its difficulties."
That is exactly what is happening here. The report ends with something which I wish hon. Gentlemen opposite would take to heart:
"The receipt of foreign resources is of such great value to a country that they should not be wastefully put to uses which simply postpone necessary adjustments."
The cap fits. We have wasted foreign resources which have been lent and given to us, and one of the main reasons why we have wasted them is the policy enshrined in this Bill. I believe that, when we are living on foreign loans and charity, it is profoundly immoral to behave like that. Hon. Gentlemen opposite try to get out of it by blaming everybody else, including the Americans. That is the old excuse of the wastrel—slow horses and fast women—which has never been taken as a valid one.

The right hon. and learned Gentleman the Chancellor of the Exchequer has often been favourably compared to his predecessor, but I doubt whether history will support that view. After all, the Chancellor of the Duchy of Lancaster never really expected to be taken seriously. When he said in mid-1947—
"the contrast is most remarkable between the great difficulty of the overseas position and the relative ease of the purely domestic position, in which things are very much better and easier than we would have had any reason to expect two years ago"—
how could anyone be expected to take seriously someone who made that remark? How could anyone be expected to be taken seriously who said that bonus shares were a distribution of money? I know that the hon. Member for Norwood (Mr. Chamberlain) believes it, but no serious person does.

On a point of Order, Mr. Speaker, may I ask for your guidance? I fail to see the relation between much of what is being uttered, entertaining though it may be—[HON. MEMBERS: "Taxation."]—and what is contained in the Bill which is before the House and to which I understand we must limit our references on Third Reading.

I gather that the Debate has been pretty wide all the way, and that this is on the background to the Bill.

The result of the financial policy of the right hon. Member for Bishop Auckland (Mr. Dalton) was that we were going the way to perdition but we were following the primrose path, and at any rate he could say that he wanted people to have a bit of fun on the way. The policy enshrined in this Bill means that we are going to perdition by only a slightly longer road—and where are the primroses? I doubt if the right hon. and learned Gentleman would recognise a primrose if he saw one. Indeed it may have been the right hon. and learned Gentleman whom the poet had in mind when he wrote:

"A primrose by the river's brim
A dicotyledon was to him
And it was nothing more."
Where his character compares unfavourably with that of his predecessor is that he is successful in deceiving people. He has made people believe that the destination was not perdition and that so dreary a guide must be leading them up the straight and narrow path. The truth about the position at the moment is that something extremely unpleasant will happen to us soon unless hon. Gentlemen opposite can get more money out of America. Socialists throw stones with one hand and hold out the hat with the other. Both are ignoble gestures.

The main part of the Chancellor's plan is to clamp down still more restrictions on the people of this country. The nearest parallel in history to the Chancellor of the Exchequer is Diocletian. He, at any rate, had the decency to retire to Salona to grow cabbages. The right hon. and learned Gentleman is a large consumer of cabbages; if he would now retire and produce them he would be doing some service to his country.

7.9 p.m.

We do not seem to have had a formidable attack on the Finance Bill this afternoon. The hon. Member for Flint (Mr. Birch) drew freely on his familiar repertoire of wisecracks, vituperation and personal sneers and, as he always does when he has nothing better to say, dragged in his rather squalid personal vendetta against the Chancellor of the Duchy of Lancaster. The right hon. Member for Saffron Walden (Mr. R. A. Butler), on the other hand, asked me certain specific questions. He first asked how it was that Customs and Excise revenue was apparently falling below the estimate in the first quarter, and whether that presaged the collapse of our Budget expectations. I can assure him that the fall is due merely to seasonal causes. Owing to the fall in Purchase Tax receipts immediately before the Budget, because of Budget expectations, we collected less Purchase Tax in the early months of the financial year. I am advised that the revenue from football pools also tends to fall away in the summer months.

Is it not a fact that in past years the second quarter was usually much more buoyant, as far as Excise receipts are concerned, than the first quarter?

No. The case now is that Customs and Excise receipts tend to fall off in the second quarter. As a matter of fact, they have been coming in very much according to our estimates. Therefore, the general deductions drawn by the hon. Member for Flint from this supposed deficit are quite unsound.

The right hon. Member for Saffron Walden also asked what revenue we should have raised by Income Tax on the new insurance benefits if we had not made the change which is embodied in the Bill. The answer is that theoretically, if we could have collected them, we should have raised £15 million. In fact, up to date, we have been able to raise only £3 million. We now lose in this respect, and gain a total of £13 million from the change by which contributions are not allowable for deduction purposes. Therefore, on balance, we are, as the right hon. Gentleman knows, £10 million to the good.

I noticed today that critics of this year's Budget seem to have changed their ground since it was introduced three months ago. In April there was quite a noisy attack on the Budget by those who said that our taxation proposals were altogether too severe in limited spending and consumption, and that we ought to have reduced taxes and abandoned our attempt to maintain an overall surplus and so let loose a higher rate of spending power. But in view of what has happened in the last few months, it is now obvious that the caution of my right hon. and learned Friend in the Budget was indisputably right and that those critics were hopelessly wrong.

This year's Budget and the taxation proposals in the Bill were founded mainly on the explicit conviction that what my right hon. and learned Friend himself described in his Budget speech as "the size and gravity of our dollar deficit" was the crucial national problem and that, therefore, any release of extra purchasing power by tax reductions must, by virtue of its inflationary effects on costs and prices, have made our central problem harder, and not easier, to solve. Indeed, the Government stated the central principle on which the Budget was founded in the Economic Survey in March, in which we said—in italics, in fact:
"The dollar deficit remains the crucial problem."

When the hon. Gentleman says that critics attacked the Government for not lowering taxation, is he referring to critics on his own side of the House or on this side?

I am referring to any critic who made the sort of criticisms I have described.

It was for the reasons I have stated that we resisted the plea to relax our disinflationary Budget policy, and I can hardly believe now that anyone thinks we were wrong. It was also for that reason that we decided, as the right hon. Member for Saffron Walden pointed out in his remarks about industrial re-equipment, that one of the main reliefs in this year's Budget, even though it does not entail any cost to the Exchequer this year, was the increased initial allowance for depreciation. We have debated this a great deal, and it should be of substantial help to industrial re-equipment and modernisation and, therefore, to our progress towards dollar solvency. The right hon. Gentleman said that this was no free gift from the Government to industry. That, of course, is perfectly true; but it was an interest-free loan on a very large scale which, I think the right hon. Gentleman agrees, will be a big contribution to this object.

The main issue in the Debate today has been whether the high level of taxation enshrined in the Bill and the high level of expenditure that goes with it are injurious to our economic life. The right hon. Member for Saffron Walden described it as a "stunning level of taxation," and several other hon. Members, including the hon. Member for Aylesbury (Sir S. Reed), whom we are always glad to hear in these financial as in other Debates, pointed out that the total revenues amount to something like 40 per cent. of the national income. I may perhaps remind them that that includes all the spending of local authorities as well as, of course, of the central Government. That, it has been argued today, is imposing a burden on our industry which impedes recovery.

In the first place, as we have constantly pointed out, a great deal has been done, is being done, and will be done, to economise on all sorts of items of expenditure, in face, however, of constant demands from hon. Members opposite that individual items should be raised. They are almost as loud in asking us to raise the individual items as in asking us to reduce the total. Secondly, of course, a great deal of our expenditure today, as in the case of insurance and health services, is a mere transfer to public account of what was previously carried out on private account, and makes no difference to the strain on our national resources.

I also think, judging by what the hon. Member for Torquay (Mr. C. Williams) said about Death Duties being an expenditure of capital, that hon. Members opposite have still not grasped that a considerable proportion of the sums raised in taxation, although they are current revenue according to our method of Budget accounting, are in fact being used for what is actually capital expenditure. That is true up to a point very much higher than if one considers the revenue from Death Duty alone.

I pointed out, quite deliberately, cases where some of that money was being used for the purposes I described; but my main argument, which was quite different, was that capital should not at present be taken out of industry, because industry today needs capital.

I gather that the hon. Member now agrees with me. In raising these sums from current revenue we are, in fact, following a more prudent and more austere financial policy than most private businesses would normally follow. We are building up physical and productive assets from which posterity will enjoy either real or financial revenue. That is true of housing, schools, factory building by the Government, re-equipment of nationalised industries, and so on. The total of the moneys expended on those objects adds up to very nearly £400 million, and if we include war damage payments as a capital item the total would reach £540 million. This ought always to be remembered when we are speaking of this proportion of 40 per cent. of the national income.

The right hon. Member for Saffron Walden, in arguing that our level of taxation is too high, quoted a remark from his hon. Friend the Member for Chippenham (Mr. Eccles) about the burden of the welfare State falling on the shoulders of the taxpayer. As has been pointed out from this side of the House today, however, the truth is that a large part of the taxation imposed by the Bill is designed to achieve a transfer of revenue which is raised by taxation on profits, on property and on very high incomes, and is paid out on social services, food subsidies, and so on. Hon. Members opposite, including the hon. Member for Farnham (Mr. Nicholson), who described these taxation levies as a charge on production, have argued today that this amounts to a great burden on industry, raises our export prices, and so impedes our recovery. This is not merely untrue but is, in fact, the precise reverse of the truth.

The food subsidies and other social services made possible by the taxation proposals in the Bill are, in reality, one of the most potent factors in keeping our costs down and, therefore, assisting our production and export trade. My hon. and learned Friend the Member for Northampton (Mr. Paget) stated this argument very lucidly today and it was called in question by the hon. Member for Edgbaston (Sir P. Bennett). In my opinion my hon. and learned Friend was perfectly correct in his main thesis. Surely, hon Members opposite can see that if, for instance, a motor car worker in Coventry is able to buy his food more cheaply than a motor car worker in some overseas country, the Coventry worker, to achieve the same real standard of living, does not have to throw so heavy a burden of wage costs on the motor industry. Similarly, if his children get family allowances, or free meals in school, or a free health service, it is not necessary for him, in order to secure the same real standard of living, to demand an increase in money wages, which would, of course, tend to force up prices abroad.

If that argument is valid, how does the hon. Gentleman account for the fact that the costs of prices and wages are going up here and going down elsewhere?

It must be obvious to the hon. Member that if it were not for the food subsidies they would have gone up very much further. Apart from my hon. and learned Friend the Member for Northampton, I have hardly ever heard this fundamental point mentioned in public controversy, except by one City editor a few months ago, who pointed out that, with the sellers' market at its height, food subsidies were keeping export prices down and thereby turning the terms of trade against us. There was some truth in that argument at that time, but the corollary is that now we are in a buyers' market the same subsidies and services enable us to quote lower export prices and so assist us directly and powerfully in our battle for exports.

Are we to understand that the Economic Secretary to the Treasury, a responsible spokesman for the Government, accepts fully and now re-states the extraordinary economic doctrine emanating from the hon. and learned Member for Northampton (Mr. Paget)?

The argument is only extraordinary to the noble Lord because he has not thought enough about it in the past. The simple reason for what I have said is the well-established economic principle, which has been confirmed both in theory and practice, that taxation of profits does not normally induce a manufacturer to raise his prices. I think it would be agreed that it would be a rare case where prices were raised because profits and Income Tax have to be paid before the shareholder got his dividend. It is surely clear enough that if the same amount were raised by adding to money wages the resulting rise in prices would be quite certain and much greater; and it is even more clear that the payment of Death Duties does not tend to raise industrial prices or export prices, which is one main reason why we have raised the level of Death Duties in this Bill this year in order to finance the social services.

All this is only one way of pointing out the obvious fact that if food subsidies, family allowances, or other social services, financed out of taxation on profits or property, were to be cut, money wages would have to go up. The hon. Member for Edgbaston said that wage earners would not agree to social services being quoted in wage negotiations, but I do not think he would deny that if all the food subsidies were swept away today that would be an argument for putting forward a claim for higher wages.

At the same time I would tell them that they would not pay 3s. 6d. for a sixpenny packet of cigarettes.

It is quite clear that if these services and corresponding taxation of profits were cut down we would not have a fall, but a rise in industrial costs. For that reason, the whole argument advanced today and elsewhere, suggesting that the tax methods necessary to finance food subsidies and other services are an impediment to our export trade is a complete fallacy, born largely of ignorance and prejudice. Precisely the reverse is true. It may be that hon. Members opposite are trying to argue that taxation on the one hand and social services on the other could be cut down without any corresponding increase in money wages. That means, of course, engineering a deliberate reduction in real wages to get out of our present difficulties. If that is what hon. Members opposite really mean, I wish they would have the courage to say so frankly. If that is not what they mean, I wish they would have the honesty to admit that the whole of their argument about taxation and subsidies raising our industrial costs is nothing more than an intellectual fraud.

Is not the hon. Gentleman guilty of a slight intellectual fraud in selecting items in the welfare State which act as a subsidy or indirect subsidy to production, while ignoring the fact that many of the items of expenditure in the welfare State are new articles, although, no doubt, desirable?

My argument is concerned with the general articles which affect the wage earner's household. Are we to solve our present difficulties by thrusting the sacrifices which may have to be made on those who are worse off? It may well be that sacrifices in consumption must be made before we overcome the present dollar shortage which, as I said, is our crucial problem.

The question before us and before the country is how those sacrifices can best be shared. If it is the doctrine and policy of hon. Members opposite that taxation of profits should be reduced at a time when the consumption of the whole community is to be temporarily cut, they are simply proposing that the rich should be given a larger share of a smaller cake. It is because we refuse to accept that solution that we support the Budget and the proposals in this Bill. If the Tory Party really want to proclaim that solution as their remedy for the present ills, before this House and before the country, we shall very confidently await the verdict.

Am I to have any reply at all on the question of savings, on which the industrial recovery of the country depends?

It is because we did not expect a large rise in private savings that we decided to continue our policy of a Budget surplus this year. There, again. I think events have borne us out.

Does the hon. Gentleman confirm his statement that we are shortly to have temporary cuts for rich and poor alike?

I said that it may be that before we have overcome our dollar difficulties there may have to be some cuts in consumption.

I do not know if the Debate can be continued, but, having heard the Economic Secretary, I am rather dissatisfied. Here is a country which has gone through two wars, now facing this Finance Bill. We do not appear to recognise that the strength that has enabled us to go through two wars was that we accumulated by savings a considerable and substantial reserve. That does not appear to have emerged from the Debate at all.

The Economic Secretary confirms the opinions which have been expressed elsewhere, that apparently saving is of no great value, nor of much necessity, in this community. My hon. Friend the Member for The High Peak (Mr. Molson) complains that no observations were made about this all-important subject, and it is abundantly clear to me that the foundation of the greatness and strength of our country was in our ability to save. During the 1914–18 war our strength was in our overseas investments and our internal savings. Our strength in the recent war was in those things, too. We have embarked during the last four years on a different principle. Saving is apparently to be done by the State, and the saving that the State has done up to now during the last four years of the initial experiment, has not been very considerable.

I am sorry that circumstances prevent me from developing this view, but I cannot resume my seat without expressing the profound conclusion that this four-year experiment on which we have embarked does not seem to offer us in these difficult and changing circumstances anything like the security which the country enjoyed during the years gone by, and I am gravely dissatisfied with the provisions of this Finance Bill.

Question, "That the Bill be now read the Third time," put, and agreed to.

Bill read the Third time, and passed.

House Of Commons (Indemnification Of Certain Members) Bill

Order for Second Reading read.

7.32 p.m.

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

There are perhaps some who would say that this is an unnecessary Bill, that it errs on the side of caution, that no challenge would have been made and no great harm might have been done if we had neglected to introduce it. But we have thought that in matters affecting the constitution of this House and the qualifications of Members who sit here, one must err, if at all, on the side of caution, and that we must be jealous of any infringements, whether in the spirit or merely in the letter, of those laws which are designed to protect the independence of Members of Parliament and to avoid the evils of placemen and so forth.

Unhappily, the precise limits of those laws—and, in the main, they are embodied in Sections 24 and 25 of the Succession to the Crown Act, 1707—are very obscure. There is no precise definition of what is meant by an office of profit. A case where a large salary is payable to the holder of an office is, of course, clear enough, but what of the office where something is paid which in name at least is a subsistence allowance? That is at times a case of great difficulty. On the whole, we have taken the view that where there is any payment or any expectation of payment going in amount beyond the sum which might be regarded, not as a mathematically accurate but as a fair reimbursement or pre-assessment of the expenses actually incurred through holding that particular office, the payment or expectation of that sum would constitute the office one of profit.

Then again there is the question, also difficult, in relation to new offices, whether they are held "under the Crown" within the meaning of Section 24 of the 1707 Act or whether, in relation to the old offices, they are held "from the Crown." There is room for argument as to whether there is any legal difference in the meaning of these two different phrases. There we have taken the view that to be held under the Crown an office does not necessarily have to be subject to any continuing control in its exercise by the Crown. The words in Section 24 of the 1707 Act, we think, refer comprehensively to any new office connected with the public service or the appointment to which is in the hands of some authority under the Crown. If—which is not certain—the meaning of the words "from the Crown" in Section 25 is a different one—apart from the fact that the Section refers to old offices—the difference may be that they imply an office which has been within the immediate grant of the Crown.

Those are the conclusions about the rather obscure laws in regard to these matters which we think are right. I would never assert with absolute certainty about a branch of the law of this kind, that those conclusions are inevitably right. These are matters which have been discussed a great deal in the past, and other views are held about them, but, giving the best consideration we can to the matter, we think that the view which I have just presented to the House is probably the correct one on the proper construction of the Act.

That being our view as to the construction of this old Statute of 1707, our attention was drawn to the position of certain hon. Members who had been nominated by His Majesty to become members of the General Medical Council. The General Medical Council was set up under a Statute of 1858 which has been amended, in details that I need not now recite, by various subsequent Acts of Parliament, but under its constitution His Majesty, on the advice of the Privy Council, nominates five of the members of the Council and those members hold office for a term not exceeding five years, although I think they are eligible for reemployment. Provision is also made under the constitution of the council for the payment of fees to the members of the council, and in practice, as I understand, they are in fact paid a sum of five guineas in respect of each attendance. They are paid not out of State funds, not out of moneys provided by Parliament, but out of moneys collected by the medical profession from registration fees, but we do not think that it is a criterion of whether or not an office is an office of profit under or from the Crown that the actual emoluments of it are derived from sources other than public funds.

That being the nature of the office, during the lifetime of the present Parliament two hon. Members of this House were nominated to the council by His Majesty on the advice of the Privy Council. They were, however, by no means the first hon. Members of the House who had been nominated to and sat as members of the General Medical Council. In times past many hon. Members belonging, as a rule, to the party opposite had been nominated to the General Medical Council, and had sat upon it and performed the duties of members of it without it occurring to anybody at all that there might be any possible infringement of the Statute of 1707. This Bill does not provide indemnification for those other Members who in the past have sat as members of the General Medical Council, for the simple reason that any claims to penalties against them should now be statute barred; there seemed, therefore, no reason to include them in the scope of this Bill, and I have no reason to mention them particularly by name.

In the case of the two hon. Members whose names are mentioned in the present Bill, they, being appointed in the lifetime of the present Parliament, are not of course protected by the lapse of time and might, on the view we take, be liable to the possibility that actions would be brought against them. We think there is no doubt that they were appointed to an Office of Profit under the Crown. On the other hand, I think it is right to say, and the House would no doubt wish me to say, and I hope will concur in my saying, that they were appointed and held their office in complete good faith on the basis of many precedents of times gone by. Indeed, the hon. Member for Attercliffe (Mr. J. Hynd) never acted in the office at all, because immediately after his appointment to the office, just recently in the course of this year and before he had ever taken any part in the proceedings of the General Medical Council, it occurred to him that there might possibly be some question of propriety in holding the office. It was in these circumstances that the matter came to notice and was the subject of consideration.

I hope that, as far as these two hon. Members are concerned, the House will be satisfied that whilst there was a technical infringement of the law relating to this matter, confused and obscure though unfortunately that branch of the law is, no one can really be blamed for having followed the longstanding and numerous precedents, and that whilst the two hon. Members must, of course, vacate these appointments and cannot continue to hold them, they ought not to be penalised for having held them in the past, and that this Bill, as it seeks to do by Clause 1, might properly indemnify them.

Before the Attorney-General leaves that point, will he say whether the Bill applies to any future appointments of Members of this House to the General Medical Council?

I thought I had made that clear in my remarks. I said that these two Members must vacate this office. We are not seeking to make this office not one of profit. It will remain a disqualification, and these two Members will vacate the office and will be indemnified. We are not proposing to legislate for the future and to say that this will no longer be an office of profit which Members may hold. It is the future policy that no Member shall be qualified to hold the office. We do not think it right to alter the law in a piecemeal way, by providing that this particular office should be excluded from what has hitherto been the law. This is merely a Bill of indemnification in respect of these two Members.

Clause 2 deals with a different case. Under a Statute, also an old one, the House of Commons (Disqualifications) Act, 1782, a Member is disqualified to hold any contract with the public ser- vice. Here, again, the Act and the law arising from it are obscure in many particulars. It does not, for instance, apply in the ordinary way to Members who are shareholders in or directors of a public company, unless, possibly, they are remunerated in an unusual way out of the actual profits of the particular contract. Moreover, it does not apply to casual or isolated transactions over the counter, so to speak, transactions which are small in amount. By the de minimis non curat lex maxim, a number of cases have not been brought within the strict provisions of the Act.

In the case of the hon. Member for West Islington (Mr. A. Evans), to whom the Bill refers, the transactions went a little further, and here, I think, I might say somewhat nearer the line hitherto drawn between those transactions that need not be bothered about and those which involve an infringement of the Statute. There were 11 transactions altogether extending over a period of 21 months, of a total value of just under £100. What happened was that the Home Office placed an order with a firm in which the hon. Member is a partner, a firm trading under the style of Evans Bros., for a small quantity of labels of some kind. The first order was placed with that firm before the hon. Member had been elected to this House, and it was for a sum of £2 7s. The other orders were in the main for small amounts, although there was one for a comparatively large sum, the whole amounting to £100. After the first order which had been placed with the firm, quite legally because there was then no question of disqualification arising at all, 10 further orders were given to the firm and were given in completely good faith, because of the various firms which had been approached for the supply of these particular labels this one offered the earliest deliveries at competitive prices.

If these transactions had been the subject of a written contract, the position in regard to them would at once have become clear, because written contracts with Government Departments in this connection have a clause in them dealing with this particular point. But, as it was, in these small occasional transactions it was not realised by the Home Office that a Member of this House was a partner, and the hon. Member himself did not realise that although the Statute does not apply at all to a one-man company it does apply to a many-man partnership, which was how this misapprehension arose. In this case also I would ask the House to say that this is a matter in which no one can or would for a moment wish to impune the good faith of the Department concerned or of the hon. Member, and that it would be proper to indemnify him from the possible consequences of the breach of the Statute.

I want to add only this: I did refer, and the hon. Baronet took me up on the point, to the obscurity and confusion of this branch of the law relating to offices of profit generally. We do not propose by this Bill to alter the law on this matter. The law is obscure and confused, but its amendment, restatement or codification is by no means an easy matter. It would, we think, probably have to be the subject of study by a commission, legal committee, or body of that kind. It would not be easy to find a better formula which would hit at really substantial cases, where Members ought to be disqualified from sitting in the House, while not affecting quite trivial infringements which ought not, in existing circumstances at this time, to affect a Member's right to sit here. We think that that would be a difficult formula to find. Previous Governments, which no doubt have considered this problem, have felt that it was perhaps better to leave matters as they were until an obviously better formula had been found to take the place of the existing law. We have hitherto taken the same view about this matter, but I can add that we are giving the whole subject attention and considering whether there is any more comprehensive way in which the matter can be dealt with. But that, of course, is not the purpose of the Bill, which is designed merely to indemnify the three Members named.

Will the Attorney-General clarify one point. I think he said, when referring to the case of the hon. Member for West Islington (Mr. A. Evans) that where an hon. Member is a shareholder or a director of a public company he does not come within the scope of the statute. The Attorney-General rather emphasised the word "public." Does it also apply to private companies?

I believe I did say "a public company" but I did not attach significance to that. Any incorporated body is deemed in law to have a quite separate existence from the persons composing it. That is the distinction between the company, private or public, and the partner.

7.51 p.m.

It should be made clear on behalf of the Opposition that we regard all these cases of the three hon. Members who are concerned as bona fide cases which it is right for the Government to cover with the least possible delay. That is to say, the hon. Member for Attercliffe (Mr. J. Hynd) and Berwick and Haddington (Mr. J. J. Robertson), as members of the General Medical Council, would seem to us to fall under the mischief of Section 24 of the Succession to the Crown Act, 1707. I have not the great legal knowledge of the Attorney-General, but it would seem to me that the series of precedents which we have discovered, to which the only contradiction is afforded by Pringle's case in 1924, supports the view that the receipt of remuneration by the holder of the office is immaterial provided that his office is one in respect of which remuneration is payable. That is so even when the remuneration is now fictional, as is the case with the Stewardship of the Chiltern Hundreds, for example. In view of the fact that under the rules of the General Medical Council such fees and reasonable travelling expenses can be made payable, there is no doubt that the cases of those two hon. Members ought to be covered by some such Bill as this.

In the case of the hon. Member for West Islington (Mr. A. Evans) there is a greater complication about which one or two of my hon. Friends might perhaps wish to ask some questions in regard to the type of company and the type of contract which is or is not covered by this matter. I do not wish to go into that myself. I am satisfied that the Attorney-General has gone into it thoroughly and that legislation is therefore necessary to cover the case of the hon. Member for West Islington. The sums concerned seem to us to be very small. I am quite certain that there was no intention on the part of the hon. Member to do anything which is illegal or wrong in any way because we have been informed by the Lord President that the hon. Member himself informed the Government, taking the initiative because something appeared to him to be going wrong.

From my point of view, and I think I can speak for my hon. Friends, there is nothing about which we need, so to speak, make a fuss in regard to the position of these three hon. Members, who, I am sure, will feel themselves adequately covered by this massive Bill, enshrined in which their names will have an immortality to which I hope never to aspire. I wish to refer for a few moments to the position generally. A Select Committee in 1941 made a report which proposed that a Bill to reform the present law in regard to Members receiving payment from the Crown should be amended in certain directions.

The Committee made three main proposals: That, with the exception of not more than 60 ministerial offices, any office from or under the Crown should disqualify any person from election to, or membership of, the Commons. It also stated that certain specified offices whose duties are such as would not substantially interfere with a Member's duty or increase the power of the executive in the Commons, for instance, Regius professors—of whom I am not aware that we have any examples, and which position my hon. Friend the senior Burgess for Cambridge University (Mr. Pickthorn) has not as yet attained—should be declared not to be disqualifying offices. The report also said that certain specified offices, including the Chiltern Hundreds and Manor of Northstead and some others about which doubts have arisen in the past, for example, Recorder of London should be expressly declared to be disqualifying.

The Committee went into the matter with some care, and when the Coatbridge and Springburn Elections (Validation) Act, came up in 1945 my right hon. and learned colleague, who was then Mr. J. S. C. Reid, raised this matter and received a reply from the Attorney-General who, in winding up the discussion said:
"We will certainly take into more than sympathetic consideration, as soon as we are able to do so, the report of the Select Committee of 1941, without of course considering ourselves restricted by the terms of that report."
This was four years ago.
"We will examine the whole problem. As I indicated in my previous remarks we realise that this is a problem of considerable complexity which may lead hon. Members inadvertently into great difficulty, and it is one in which the position should be clarified as soon as Parliamentary time permits."—[OFFICIAL REPORT, 12th October, 1945; Vol. 414, c. 575.]
Here is the shepherd who has allowed his sheep to go astray through four years of neglect. He was warned by the Coat-bridge and Springburn Elections (Validation) Act, 1945, how his tender sheep might stray from the farm. He promised us that he would take up this matter and give it consideration, using the phrase "as soon as Parliamenary time permits."

Ever since then the greater part of Parliamentary time has in our view been wasted by the proposals of the Government to stifle and hamper our industrial structure in this country. Meanwhile hon. Members have been allowed to stray from the path and have only been brought back, as in the case of the hon. Member for West Islington, by their own moral sense, by appealing to the shepherd themselves. I do not believe that the sheep generally in this excellent institution are so well endowed with knowledge of the law and necessarily with such high moral sense as the hon. Member for West Islington.

I must appeal to the Government once again to give this question of introducing legislation to clear up these complicated and antiquated Acts under which we work their immediate consideration. It really is an intolerable imposition upon hon. Members and upon Parliamentary time that we have to have small Bills of this character and to have hon. Members on any side of the House being in a position where they might at any time be unwittingly contravening the law and have to have a special Bill passed. I make a special appeal to the Government and ask them whether they will now not give the matter consideration and do so urgently, and if necessary postpone the date of the next General Election in order to give the necessary time to it.

7.58 p.m.

I think the House would make a mistake if it passed from this matter immediately without considering the need for the further legislation which the right hon. Gentleman has suggested, because it does not only concern Members on this side of the House. It might be very desirable if, before the General Election, we had some general Measure which would remove all types of doubt not only about the position of Members of this side of the House but of some Members even on the Front Bench opposite.

Before I come to the position of the right hon. Gentleman the Member for Woodford (Mr. Churchill)—there may be some need for further—

It is not permissible to discuss the position of any other hon. Member. This Bill is limited in scope to three named hon. Members, and the discussion must relate to those three Members alone.

Before deciding what I would say I examined the precedents set by the Coatbridge and Springburn Elections (Validation) Act, and there the principle, which I suggest might be accepted here, was permitted of discussing not only what was in the Bill but what general reforms were necessary. I only intended to illustrate the position by a general reference.

If I may now turn to the position of the three hon. Members concerned, they are the victims of a law which is not only obsolete but which has quite clearly become absurd. It is not only a waste of Parliamentary time to introduce these Measures but it exposes the Members concerned to misrepresentation that they have done something which is in some way improper, and makes them not only open to action here in the House but to action by common informers, and to a type of action in the courts which might set the courts at variance with the House. It might be used at a General Election, when the House is not in existence, to make an attack upon a number of leading candidates.

If I might just deal with the first point, I think the Attorney-General is quite clearly wrong if he suggests that, in order to have an office of profit, it must be some profit consequent on such a position.

I never said that and I never thought it, and I referred to a reasonable expectation. Those were my words.

If I might refer the Attorney-General to the evidence of Lord Simon in 1941 before the Select Committee, he will see that what Lord Simon called attention to was the case of the paid and unpaid Whips. In those days, an office of profit disqualified a Member, and it was decided that the office which disqualified him was that of the unpaid Whip, and that when a Member from being an unpaid Whip became a paid Whip, in accordance with the Statute, he was not occupying an office of profit. The matter is perhaps a little more complicated than possibly the Attorney-General thought at first sight. The amount of remuneration received by the hon. Member is not really in question. If they had been employed as Ambassadors in Washington, they would have been entitled to the salary of somewhere about £3,500 a year, with £20,000 expenses—that is the rate for the job—but in accordance with precedent, that would not have disqualified them even if they had been absent from the House the whole time. The whole position has now reached something approaching confusion.

Indeed, hon. Members may be disqualified by a number of statutes, and there are some 150 of these which are capable of being invoked to disqualify a Member. Secondly, Members are disqualified if they get any new office of profit under the Crown, that is to say, any offices of profit which have been constituted since 1707 and held under the Crown. What is the meaning of "new offices," and what is the meaning of "under the Crown"? It is so obscure that the House really ought to take steps to have the whole matter cleared up. If I might give an example, in 1932 it was suddenly discovered that, as a result of some valuable reforms which had been introduced concerning the President of the Board of Trade by the right hon. Gentleman the Member for Woodford when he held that office, since 1909 this had become a new office not "from the Crown," but "under the Crown," and it therefore was an impropriety for every President of the Board of Trade from 1909 to 1932 to sit in this House.

If we come to the case of contracts with the Crown, that is equally absurd and equally ridiculous. If one looks into Parliamentary history, one sees that legis- lation was originally introduced to prevent any mushroom firms with which hon. Members might be associated from securing contracts in the war which was then unhappily raging against our American Colonies. Very properly, old firms were exempt, but, as the date has never been altered, the law still provides that a firm was not a mushroom firm only if it consisted of ten persons on the 1st January, 1782, or since the 20th June, 1802, in regard to Ireland. This illustrates that the whole position is completely absurd.

If one reads the Report of the 1941 Select Committee one finds the Chairman's remarks on the unhappy case of a very respectable Member of the House who was horrified to find that Westminster Hall was being repaired with timber from his estate, and who came to the conclusion that he would be disqualified as a Member in consequence of that fact. On investigation, however, he found that his estate had been turned into a limited company, of which he was the sole director and therefore he was entirely exempt.

In those circumstances, the position is really absurd, and, indeed the whole contract position raises very difficult questions, because it was discovered that hon. Members were entering into a large number of contracts with the Postmaster-General for the provision of telephones. Because they were under contract with the Postmaster-General it was necessary in 1931 to pass an Act to relieve hon. Members of their liability to disqualification which had been incurred by the fact that they had got telephones from the Crown. So we now have the case of the unhappy hon. Member for West Islington (Mr. A. Evans) because he was dealing as an unincorporated company and is liable by these transactions. But let us suppose that as a lawyer he was interested in a packet of stationery concerning which there was a prosecution. It would be quite possible, without any impropriety in it at all, for the Home Office to employ an hon. Member of this House as counsel dealing with that matter. When we get to the intermediate position, the matter is much more difficult, and it is still undecided for example, if a scientist is employed to examine the packet of stationery to see if it is up to sample, whether he would be disqualified. That is still an unresolved question.

This matter really does require looking into, and I think my right hon. and learned Friend is wrong when he says that the only cases we should look at are those of offices of profit. There are other disqualifications equally undesirable which ought to be included in this Bill. Alternatively, the House should not allow this Bill to pass until we have had some indication that these other matters will be included in another Bill. If we allow this Bill to pass without dealing with these other matters, we shall be avoiding an opportunity to put right what might go wrong at an election.

There is one other aspect of the matter to which I should like to refer for a moment. When we are dealing with the disqualification of clergymen we find an extraordinary position.

The hon. Gentleman really cannot extend this matter beyond Members of Parliament. This Bill refers to three specific Members of Parliament, and the hon. Gentleman must really relate his remarks to the cases covered by the Bill.

In the case of the Coat-bridge and Springburn Validation Bill, the whole question was to validate the election of the hon. Member for Coat-bridge (Mrs. Mann) and the hon. Member for Springburn (Mr. Forman), and the whole Debate on that occasion ranged around—

That may be, but we are not debating the Coatbridge and Springburn matter. We are debating the question of indemnifying the three hon. Members whose names are set out in the Bill.

I am attempting, and I hope it is in Order on the Second Reading, to criticise what is not in this Measure. Surely on this Bill on its Second Reading, one is entitled to criticise what has not been put in it? Surely, one is entitled to say that there ought to be further Clauses in this Measure, and, quite clearly, it is within the scope of this Measure to deal with other features of disqualification?

The Ruling of Mr. Speaker is to the contrary—that the discussion of other matters beyond the three hon. Members named would not be in Order. In my view, the hon. Gentleman would be perfectly in Order in offering general observations, and that is as far as he can go.

I do not want to prolong the matter, but I would like to put this point. If we allow this opportunity for discussion of the matter to pass, we may find that at a General Election there are a number of candidates who would be disqualified, and this House will be dissolved and we shall not be in a position to deal with the matter. The argument I am trying to put is that, in those circumstances, either this Bill should include those other matters, or, if we agree to this Bill going through as it is, we should have some promise that some other Measure will be brought forward which deals with these very important points of disqualification.

The point I am trying to put here, for example, in regard to the position of the clergy, is that they are all disqualified and disqualified under different decrees, from being candidates. For instance, a clergyman of the Church of England may not sit, but may divest himself of his orders and may then be elected. A clergyman of the Church in Wales can be elected, but if he takes orders while sitting as a Member, he is immediately disqualified, though he may stand again for re-election. So far as the Church of Ireland is concerned, there is a complete and absolute disqualification, and as hon. Members opposite have a candidate who is a member of the Church of Ireland, I thought it would be desirable before the General Election that there should be some opportunity of presenting them with the position in which their candidate could go forward to the polls. That was the only point I was trying to make.

It really is a very complicated and difficult question, and there are so many anomalies that it is hard to give examples without straining the patience of the House too much. The law, however harsh it is to the Irish clergy, is particularly tender to the Irish bankrupt, because, while, under the existing law, a bankrupt in England and Scotland may not be a Member of this House, there is no disqualification whatever on an Irish bankrupt. It is fair to say that any Irish hon. Member who is foolish enough not to become a bankrupt before he enters this House, but becomes a bankrupt immediately afterwards is dealt with straight away by suspension, while in the English case the matter is held in abeyance for six months.

I am sorry that the noble Lord the hon. Member for Horsham (Earl Winterton) is not here because there is a serious disqualification of the Irish Peer, who is not permitted by statute to sit for any university in the United Kingdom. Whatever else we may think, and whatever may have been the original reason for it, there is obviously now no need for such discrimination, and, indeed, the noble Lord and the hon. Gentleman the Senior Burgess for Cambridge University (Mr. Pickthorn) would be easily interchangeable. If, therefore, it is to be one of the principles of the party opposite that they will restore the university representation, it is a little hard that this House should deprive them of the possibility of what might be their most attractive type of candidate. My right hon. and learned Friend mentioned other offices where we are up against exactly the same difficulty. I will not specify or deal with them; I will merely say that these anomalies exist throughout the whole sphere. If I were allowed to develop my case, I could show how exactly the same arguments put forward by my right hon. and learned Friend would apply to the Lord Warden of the Cinque Ports.

The hon. Member is referring to another right hon. Member of this House, and, in my view, is going far beyond the confines of this Bill. This Bill, both in its Title and content, refers to the indemnification of three specific hon. Members, and the hon. Member must confine his personal remarks to their cases. I have given him a good deal of latitude.

I gave the hon. Member some notice of this point because it is obviously of some importance owing to the common informer procedure under the Act of 1707. If, for example, an hon. Member has sat in this House, has voted, and is disqualified, he is liable to a penalty, as are the hon. Members whom we are now absolving, of £500 a day for every day he sits and votes. Imagine the position of an hon. Member who has sat for 200 days; he would be liable to a penalty, owing to the action of a common informer, of £100,000. It is desirable that we should relieve people of the possibility of actions of this sort.

I am not going any further than merely to say that this Bill does not go far enough. It seems to me that in the past these Measures have, perhaps, been rather too much of a party nature. Up to now, we have always introduced Measures dealing with Members on our side of the House, but hon. Members Opposite are in an equal difficulty. We might have difficulty in the General Election because there might be actions to restrain returning officers from returning the names of possible candidates as candidates. Therefore, it would be better, here and now, to try to clear up the whole set of anomalies because one never knows when some action will fall within the Statute and when it will not.

I should be willing to argue that none of these hon. Members have fallen within the statute at all, and in regard to the first two, I think the case is very strongly arguable. I will not take up the time of the House any longer because we are about to pass the Bill, but I should like to ask my right hon. and learned Friend the Solicitor-General, who I understand is going to reply, if he cannot give a definite undertaking to do something to clear up these anomalies which, though we know they exist, we have difficulty in debating or raising in this House.

Question put, and agreed to.

Bill read a Second time.

Motion made, and Question proposed, "That the Bill be committed to a Committee of the whole House for Today."—[ Mr. Collindridge.]

8.16 p.m.

On a point of Order. If we are to take the Committee stage now, Mr. Deputy-Speaker, will it be in Order to move manuscript Amendments if they are within the scope of the Bill so as to cover any points such as those which have been raised by my hon. Friend the Member for Hornchurch (Mr. Bing), because, if there is to be no interval in which to put them down on the Order Paper, it would seem only reasonable that some indulgence should be given to manuscript Amendments.

That is a matter for the Chairman of the Committee. No one, of course, can prevent hon. Members from putting forward manuscript Amendments, but as to whether they would be accepted or not, I cannot, of course, give any assurance.

May I then ask my right hon. and learned Friend before we take the vote whether he does not think it might be convenient not to proceed further in view of the very important points raised by my hon. Friend in order to give the House and the Government an opportunity of considering them. Obviously, if there is anything in them, it might be a very good plan to deal with all similar cases together in one Bill rather than be faced with the necessity at some time or other of introducing a separate Bill in each separate case as research and investigation bring it to light.

I can assure my hon. Friend and the hon. Member for Hornchurch (Mr. Bing) that we shall give grave consideration to the points he has raised and consider whether any further legislation is required in regard to individual Members who are at present Members of this House. I do not think it would be right to attempt to deal with them tonight in isolation, and it may be—I cannot anticipate it, of course—that the Chairman of the Committee would rule that the introduction of any Amendments dealing with other hon. Members was outside the scope of this Bill. But we shall certainly give serious consideration to the points raised by the hon. Member for Hornchurch and emphasised by my hon. Friend the Member for Nelson and Colne, and, indeed, to the general question of the whole of this branch of the law.

Question put, and agreed to.

Bill immediately considered in Committee.

Bill reported, without Amendment; read the Third time and passed.

Usa Veterans' Pensions (Administration) Bill Lords

Considered in Committee; reported without Amendment; read the Third time, and passed

Wireless Telegraphy Bill

Lords Amendments considered.

Clause 2—(Fees And Charges For Wireless Telegraphy Licences)

Lords Amendment: In page 3, leave out lines 21 and 22.

8.22 p.m.

I beg to move, "That this House doth agree with the Lords in the said Amendment."

As the Bill left the Commons for the other place the position was that the authority responsible for the issuing of licences for the blind was the Common Council for the City of London. The position now is that the National Assistance Board is responsible and they have instructed the London County Council for the issuing of the licences. This Amendment is to alter the Bill to cover that point.

I take it that the Common Council for the City of London have agreed?

Question put, and agreed to.

Clause 9—(Advisory Committee And Appeal Tribunal)

Lords Amendment: In page 8, line 28, at end, insert:

"and the Postmaster-General and the President of the Institution of Electrical Engineers shall each exercise his powers under this subsection in such manner as to secure that the committee or the panel, as the case may be, is in his opinion sufficiently representative of persons whose interests are likely to be affected as aforesaid."

I beg to move, "That this House doth agree with the Lords in the said Amendment."

The wording of the Bill as passed by this House was such as to leave it possible for the advisory committee and, indeed, the panel from which the committee should be drawn, to be composed entirely of persons who possessed expert knowledge. The question was raised at the time by right hon. and hon. Members opposite, who suggested that the committee ought to include persons whose interests were affected. This Amendment is designed to give expression to that.

Question put; and agreed to.

Lords Amendment: In page 9, line 18, leave out "Provided that if the parties to any particular case" and insert:

"(4) If, within such time, if any, as may be limited in that behalf by the rules regulating the procedure of the appeal tribunal, the parties to any particular case before the tribunal."

I beg to move, "That this House doth agree with the Lords in the said Amendment."

This Amendment concerns procedure. The rules which this Amendment will allow to be made will obviate the expense which might arise if, in the absence of such rules, one of the parties were unduly late in requesting the appointment of specially qualified assessors. This rule gives a time limit in which these parties can make the appeal.

Question put, and agreed to.

Lords Amendment: In line 32, at end insert:

"(5) If, in the case of any reference or application to the appeal tribunal under section eleven of this Act, any of the parties or the president of the tribunal, within such time, if any, as may be limited in that behalf by the rules regulating the procedure of the tribunal, request the Lord Chancellor, if the proceedings are in England and Wales, or the Secretary of State, if the proceedings are in Scotland or Northern Ireland, to appoint two additional members of the tribunal to act for that case, the Lord Chancellor or Secretary of State, as the case may be, shall select and appoint two persons, who need not possess any legal qualifications or expert knowledge, to act as additional members of the tribunal for that case, and the additional members so appointed shall act therefor accordingly in addition to the president and the assessors or assessor."

I beg to move, "That this House doth agree with the Lords in the said Amendment."

In regard to the tribunal, the position in the first instance was that it comprised one legal man and two assessors, and the decision was left solely to the person who was appointed by the Lord Chancellor, namely, the legal person. Criticism was levelled on the grounds that this was open to the charge of being a one-man show and, therefore, in order to obviate that, it is proposed now that these tribunals should consist of one legal person and four members, two of the members to act as jury.

Question put, and agreed to.

Lords Amendment: In page 10, line 32, at end insert—

"Provided that nothing in this section shall render a person liable to incur any expenditure for the purpose of complying with any requirement in excess of one florin in respect of each one apparatus in his possession which is made or adapted for use for ordinary domestic purposes and is used by him for those purposes in his household and is in reasonable repair and running order."

I beg to move, "That this House doth disagree with the Lords in the said Amendment."

The Clause of the Bill into which the Amendment was imported by the House of Lords is the Clause which empowers the Postmaster-General, after consultation with the advisory committee, to make regulations prescribing the requirements to be complied with for the purpose of avoiding undue interference. It is manifestly impossible that regulations of a highly technical character, laying down requirements with the object of avoiding undue interference, could be framed on the footing that they will secure that certain people using certain apparatus for household purposes only should not have to meet the cost of complying with the requirements if the cost exceeded one florin. This Clause deals with the making of regulations. It would be quite anomalous for the framers of the regulations, in addition to making regulations for the purpose of dealing with undue interference, to have to introduce a provision restricting the possible payment to one florin in certain cases. It is clearly absurd in this particular instance, and for that reason the Amendment is absolutely unworkable.

8.30 p.m.

If the Amendment had been framed in a better understanding of the Bill it would, no doubt, have figured in Clause 11. That is the enforcement Clause. Then the objective would have appeared to have been, to prevent the Postmaster-General from serving an effective enforcement notice even when interference of a really serious character was taking place, if the cost of removing interference would exceed one florin in respect of a piece of domestic apparatus. That would take outside the Bill the bulk of domestic apparatus in reasonable working order. It may be described as coming very close to a wrecking Amendment. This is based on no principle, but on an arbitrary cost figure. The Amendment seems to pay no attention whatever to the hardships of the listener subjected to constant interference, nor does it even concede the possibility—though in this case it is rather remote—that interference with the safety of life may be involved.

As hon. Members opposite know, the basis of all this business is voluntary co-operation. If an Amendment like this were to succeed it would take outside the Bill the bulk of domestic apparatus that might be causing interference, and would be likely to break the amount of co-operation which has been a rather good factor in the situation up to the present time, and it would help, if anybody, the people who were most difficult. There is a Lords Amendment we shall consider later which gives another safeguard to people, that if they go to the tribunal to appeal, and if the cost to them of removing interference would create hardship, the tribunal can take that into consideration at the same time as it is discussing the undue interference.

The Postmaster-General does not seem to like this Amendment, but, if I may disagree with him, a matter of some principle is involved here. The whole House showed some concern upon the point that underlies this Amendment when the Bill was going through this House originally. The position then was, and is now, with some modification, that anybody may purchase a piece of apparatus quite legally and properly and then find that, because it is causing interference, he may have to spend money upon it if he is to be allowed to continue to use it. I think the whole House was somewhat concerned about that, and during the discussions on the Bill the point was made—and accepted by the Postmaster-General—that something should be done at the manufacturing end. Moreover, Amendments were introduced.

The purpose of this Lords Amendment—I am not talking about the actual 2s.—is to put some ceiling upon what an ordinary housewife, for instance, using domestic apparatus may be called upon to pay to make her instrument free of interference. I think that, in principle, it is right that there should be some limit of that sort. Whether 2s. is the right limit is another matter, but without this Amendment there is no limit. There is some safeguard, as the Postmaster-General has said, on the hardship question. Nevertheless, here is an attempt to put a ceiling upon what an ordinary domestic user may be called upon to pay extra on an apparatus which he or she has already legally purchased before he or she can continue to us it. I also think that if this provision were in the Bill there would be more of an urge on the Postmaster-General to get the manufactures to do something to attack the problem at their end, which is what the House was anxious that he should do. Difficult as the matter was, the House insisted upon its being approached from that angle.

Altogether, I do not think that the Postmaster-General has come down very heavily against this Amendment. I do not know how far I am allowed to refer to what happened in another place, but an offer was there made that a limit of some such amount might be accepted if this particular amount was unreasonable. However, if the Postmaster-General does what the House wants, and attacks the problem from the manufacturing end, the thing will solve itself in the process of time. It is only a transitory provision, and one hopes that much of it will not have to be used. The problem, if tackled properly with the powers the right hon. Gentleman now has, will solve itself. For those reasons my hon. Friends and I feel very much inclined to press for the insertion of this provision, in order to give the housewife protection against any disproportionate charge consequent upon using a domestic utensil which she has bought legally, and which she is entitled to use.

The Postmaster-General says that 2s. is an arbitrary figure. No doubt it is; it may well be that the figure should be 3s. or 5s. to cover the majority of cases. But if my memory serves me aright, he himself, when questioned about this on Second Reading, told the House that it could be done for 1s. 6d. or 2s.; he said that a very modest charge would be imposed upon the ordinary user of domestic electrical apparatus. I do not think people appreciate fully what will be the result of this Measure. This Bill will threaten every domestic user with an extra charge of a few shillings on ordinary household electrical apparatus; it will impose an extra charge upon many thousands of housewives who have bought electrical apparatus for ironing, for heating water, or for drying clothes. A housewife will not know whether the apparatus interferes with her neighbour. At any time, subject to these regulations, investigation may be made, and she may be compelled, under pain of penalties, to buy an additional piece of apparatus and have it fitted to the instrument she uses in her home.

This is a serious interference with people's liberty. In addition, it imposes an extra charge on many people. A florin, although a small amount, may be as much as 10 per cent. of the value of the apparatus to which the appliance it buys has to be fitted. A threat to add 10 per cent., or even only 5 per cent., to the cost of a piece of ordinary household electrical apparatus is not lightly to be thought of. It seems to me that since the purpose of getting rid of the interference is to enable television viewers to see the picture more clearly, and since they are, therefore, those who will enjoy any benefit of this, it should be they who pay for this. They ought to pay an extra shilling or half-a-crown on their licences to provide a fund out of which to compensate the housewife for the extra charge that is being put upon her.

This Lords Amendment applies solely to domestic apparatus, so I presume that apparatus used by, for example, physiotherapists will be covered at a later stage, and I shall not now address myself to that question. I do think that, on its merits, some limitation of this kind ought to be in the Bill. I discerned in the Minister's objection a hint that if this Amendment had been proposed to a later Clause he might have accepted it.

I thought the right hon. Gentleman said that it would have been better if it had been included in a later Clause. If he would indicate what he has in mind it might affect our attitude to this Amendment. So far as this particular matter is concerned, we ought to protest strongly against the Postmaster-General's proposal to reject the Lords Amendment.

The Postmaster-General, in opposing the Lord Amendment, said that if it were carried it would, in effect, wreck the Bill, and that is undoubtedly the case, as anyone knows who understands this kind of problem from the practical point of view. In listening to the previous Debates, it seemed to me that the House generally was agreed that we could not allow domestic apparatus, which interfered severely with radio navigation, whether for ships or aircraft, to interfere with safety of life. If this Amendment were carried, it would interfere with the Postmaster-General's efforts to see that this interference did not occur. No limitation in money can be put on it, because no one can say what the cost of eliminating the interference in any given case would be. Therefore, I say that my right hon. Friend could not permit any financial limitation.

I should like to deal briefly with the point made by the Opposition, that manufacturers ought to bear the cost of making alterations of this description. It will be remembered that on the Second Reading of the Bill I went into this from the point of view of the manufacturers, and I should like to put it to the House again. The difference, as a rule, in the case of electrical apparatus, between manufacturing cost and the price paid by the public is somewhere in the region of three to one. Therefore, if it costs 2s. at the manufacturing stage to make this alteration, it would be somewhere in the region of 6s. extra to the public. A million irons might be made, but only 1 per cent. of them would cause any interference. Surely it is far better for the 1 per cent. to be ordered to meet this extra cost, even though it may be 7s., than to have an alteration made in every piece of apparatus sold to the public. This seems to be ordinary common sense from the manufacturers' and users' point of view. I would oppose the proposition that the manufacturers should pay.

In any case, it is not a logical suggestion, because, if the apparatus which creates interference is sold by the manufacturer, then the laws of private enterprise start to operate, and the public stop buying the apparatus which causes the interference. They would buy a competing apparatus, which has some kind of an eliminator fixed to it. This is one occasion on which the laws of private enterprise should operate; hon. Members opposite must be impressed by such an appeal as that.

It is very interesting to listen to the hon. Member for Elland (Mr. Cobb) asking for the free play of private enterprise in the sphere of industrial activity, with which he himself is connected. I have no doubt that the steel industry would be accorded entirely different treatment, but here the hon. Gentleman wants to see the full play of private enterprise. He says that if people buy instruments which cause interference they will have to pay a substantial sum to have it corrected and will cease to buy that piece of apparatus. That does not stop a person from buying the thing in the first place. It does not deal with the issue of millions of people who have purchased electrical appliances of various kinds, who have used them legally for many years and who are entitled to some consideration. At the time they purchased that apparatus it was quite legal for them to use it in the manner in which they were employing it. We are in a very strong position to resist what the Postmaster-General said this afternoon.

The hon. Member knows there are methods of dealing with it, and that it does not mean that we have to inflict this burden upon housewives. The hon. Gentleman very kindly cut all the ground away from under the Postmaster-General's feet when he said that no one could say what the cost would be. The Postmaster-General refused to put any ceiling on this cost, but now the hon. Gentleman has said that it might amount to anything. We are, therefore, asking housewives to bear a charge which cannot yet be determined, and which may be considerably beyond their means.

Can the hon. Gentleman say what other means are available to prevent domestic apparatus from interfering with radio safety aids?

It does not necessarily mean that because it is the desire of the House to see that safety appliances are not interfered with we should place an indefinite burden upon housewives. There are other means by which the object can be achieved. [HON. MEMBERS: "What are they?"] I would ask hon. Gentlemen not to be so impetuous; I will come to that point in good time. Let me remind the House that we have taken the Postmaster-General a long way on this Bill. When he first brought it in, he had a very big stick with which to beat housewives. We have made this stick smaller and smaller. We have forced manufacturers to do something; we have limited the severity of the penalties which can be inflicted on those who will not obey; we have made the position of the housewife much more tolerable. Tonight, we want to make it more tolerable still, and there is a way by which it can be done.

My hon. Friend the Member for Lonsdale (Sir Ian Fraser) very properly said that a considerable amount of money might be involved in the correcting of apparatus. As he said, that is being asked for to provide safety for navigational aids and, secondly, to prevent undue interference with television. People have bought apparatus when they were perfectly entitled to buy it and to use it. If something else has since come along to upset that position, it should be the duty of the State to pay any charge above a certain maximum of cost necessary for the correction of the apparatus. The Post Office ought to bear that charge, or it could charge a bit more to television users. At any rate, let us not inflict upon the housewives a burden which they are not capable of bearing and ought not to bear. I hope that we shall have no hesitation in deciding against the view expressed by the Postmaster-General. It is essential to get justice for housewives, even from a Socialist Government.

8.45 p.m.

It seems to be the general impression that interference from domestic apparatus affects only television sets. That is far from being the case. Where there is an escape of electro-magnetic energy there can be interference with wireless sets, which is the most common form of interference. I recollect that during the earlier stages of the Bill the hon. Member for Westbury (Mr. Grimston) said categorically, and without any equivocation whatsoever, that if safety of life at sea was concerned, he would agree to anything. The position is that if we agree to this Lords Amendment it means that interference from domestic apparatus can jeopardise safety equipment for the landing of aircraft or in connection with navigation.

Can the hon. Gentleman put his hand on his heart and affirm that the emission of electro-magnetic energy from an apparatus such as the thermostat in a domestic iron could interfere with powerful navigational aids? Even the Postmaster-General did not go so far, and he half swallowed the words when he said that it might do so a little.

If there was a lot of domestic apparatus in the region of a dock or harbour—Merseyside is a good example to take—and there was an emission of electro-magnetic energy from that apparatus, it might be at the same frequency at which the safety devices were working.

That may be the opinion of the hon. Member, but, with all due respect to him, I would prefer the advice of the experts on this matter.

If the hon. Gentleman will read his brief, he will see that that is so.

This is not in the nature of a tax. The Opposition have forgotten that in most cases the housewife herself is a listener. They have failed to realise that the majority of people—when it is brought to their notice that their apparatus is causing interference—do everything they can to eliminate the interference. Why, then, should we agree with this Amendment, which would penalise the good citizen?

That is as I see it. There is a further point, and I will give a specific case with regard to the amount of a florin. It is quite common to find faulty wiring in a house. Interference may be caused to someone's wireless set, and the Post Office engineers may find that it is due to faulty wiring. Do the Opposition say that the Post Office should pay the whole cost of rewiring that house in order to satisfy the housewife? Regulations are made with regard to interference, and they are laid before the House and may be prayed against. They are not brought forward unless they have been approved by a panel of eminent engineers. I do not see why we should be saddled with an Amendment whereby the cost of removing interference should be limited to the sum of 2s.

There is nothing in the Amendment to prevent the Postmaster-General acting in the case of safety. All that would be necessary would be that any cost above 2s. would have to be met by him.

In order to substantiate his argument, will the hon. Gentleman say what interference with navigational aids has been experienced at London Airport or even Northolt?

Can the hon. and gallant Gentleman the Member for Macclesfield (Air-Commodore Harvey) give the answer to that question?

Are we to wait until an accident occurs and it is found that the cause was domestic apparatus emitting electro-magnetic energy? Is that what the hon. and gallant Gentleman wants?

I think the reply of the Assistant Postmaster-General has been most unsatisfactory. He used the emotional argument of danger to aircraft and to navigation in confined waters as an excuse for introducing a wide measure of control and supervision over the householder. It is obvious that if there is any question of safety to aircraft or ships such powers would be granted to him willingly, but he is not asking for those powers for these specific cases, but to apply his restrictive activities generally.

I ask him if his engineering experts, whom he has been frequently calling in aid of his argument, have been able to quote him any example where interfer- ence from domestic apparatus could interfere with port radar of the type he has in mind at Liverpool? Would he, in that case, indicate the frequency of electromagnetic radiation which would cause such interference? If he knows, perhaps he will tell us? I suggest that he does not know. He has been glad to accept this advice from the people he is pleased to call his experts or, perhaps he is pleased to misread it whenever it suits his purpose.

I assure the hon. Member that if he would go to Dollis Hill he would find it amply demonstrated that if radiation occurs on the same wave length as that used by the radar installation at Liverpool, interference with life-saving apparatus must take place.

I would be quite prepared to go to Dollis Hill at any time, but at the moment it is the duty of the Minister to come to this House and to explain to us what we might otherwise see at Dollis Hill. It is no answer to say that if we want to see it we can go to Dollis Hill; it is the task of the Minister to bring the arguments about Dollis Hill to the Despatch Box, and he has so far failed to do so.

Now perhaps I may be allowed to continue with my next point. The Minister suggested that if Post Office engineers found radiation was caused by faulty wiring in a house we should not expect the

Division No. 208.]

AYES

[9.0 p.m.

Acland, Sir RichardBrown, T. J. (Ince)Ede, Rt. Hon. J. C.
Albu, A. H.Burke, W. A.Edwards, W. J. (Whitechapel)
Allen, A. C. (Bosworth)Butler, H. W. (Hackney, S.)Evans, S. N. (Wednesbury)
Allen, Scholefield (Crewe)Carmichael, JamesEwart, R.
Alpass, J. H.Champion, A. J.Fairhurst, F.
Austin, H. LewisChetwynd, G. R.Farthing, W. J.
Awbery, S. S.Cobb, F. A.Field, Capt. W. J.
Ayles, W. H.Cocks, F. S.Follick, M.
Bacon, Miss A.Coldrick, W.Foot, M. M.
Balfour, A.Collick, P.Forman, J. C.
Barstow, P. G.Collindridge, F.Fraser, T. (Hamilton)
Barton, C.Collins, V. J.Gaitskell, Rt. Hon H. T. N.
Battley, J. R.Colman, Miss G. M.Ganley, Mrs. C. S.
Bechervaise, A. E.Cook, T. F.Gibson, C. W.
Benson, G.Cooper, G.Gilzean, A.
Berry, H.Corbet, Mrs. F. K. (Camb'well, N. W.)Glanville, J. E. (Consett)
Bing, G. H. C.Crossman, R. H. S.Gooch, E. G.
Binns, J.Cullen, Mrs.Goodrich, H. E.
Blenkinsop, A.Daggar, G.Gordon-Walker, P. C.
Blyton, W. R.Davies, Edward (Burslem)Greenwood, A. W. J. (Heywood)
Boardman, H.Davies, Haydn (St. Pancras, S. W.)Grenfell, D. R.
Bowden, Fig. Offr. H. W.Davies, S. O. (Merthyr)Grey, C. F.
Braddock, Mrs. E. M. (L'pl. Exch'ge)Deer, G.Grierson, E.
Bramall, E. A.Delargy, H. J.Griffiths, D. (Rother Valley)
Brook, D. (Halifax)Diamond, J.Griffiths, Rt. Hon. J. (Llanelly)
Brooks, T. J. (Rothwell)Debbie, W.Griffiths, W. D. (Moss Side)
Broughton, Dr. A. D. D.Donovan, T.Guy, W. H.
Brown, George (Belper)Dumpleton, C. W.Haire, John E. (Wycombe)

Post Office to pay for the cost of rewiring. Of course we should not, but that is in quite a different category. If the wiring is faulty there is an obligation on the householder to put it right, and it is the duty of the supply authority to see that he does. There is no question at all of the Post Office or of anyone but the householder having to put that right. In the same way, if the police find a motor car in a faulty mechanical condition on the road, the onus is quite clearly on the owner of the motor car to make good the faults in it.

We are concerned with the householder who has a properly functioning piece of domestic apparatus and who may find that as a result of the Bill being passed without this Amendment he is called upon to go to considerable expense at the instigation of an inspecting engineer. We object very much to this being imposed upon the householder, particularly in view of the flimsy supporting evidence so far brought for the examination of this House.

is the hon. Member in favour of any house, holder with electrical domestic apparatus being allowed to be a nuisance to the radio sets of all his neighbours?

Question put, "That this House doth disagree with the Lords in the said Amendment."

The House divided: Ayes, 232; Noes, 78.

Hamilton, Lieut.-Col. R.Messer, F.Shurmer, P.
Hannan, W. (Maryhill)Middleton, Mrs. L.Silverman, J. (Erdington)
Hardy, E. A.Millington, Wing-Comdr. E. R.Simmons, C. J.
Harrison, J.Mitchison, G. R.Skeffington, A. M.
Hastings, Dr. SomervilleMoody, A. S.Skinnard, F. W.
Henderson, Joseph (Ardwick)Morley, R.Smith, C. (Colchester)
Herbison, Miss M.Morris, P. (Swansea, W.)Smith, Ellis (Stoke)
Hewitson, Capt. M.Morrison, Rt. Hon. H. (Lewisham, E.)Smith, S. H. (Hull, S. W.)
Hobson, C. R.Mort, D. L.Sorensen, R. W.
Holman, P.Moyle, A.Soskice, Rt. Hon. Sir Frank
Holmes, H. E. (Hemsworth)Nally, W.Sparks, J. A.
Horabin, T. L.Naylor, T. E.Steele, T.
Houghton, A. L. N. D.Neal, H. (Claycross)Stross, Dr. B.
Hoy, J.Nichol, Mrs. M. E. (Bradford, N.)Stubbs, A. E.
Hudson, J. H. (Ealing, W.)Nicholls, H. R. (Stratford)Sylvester, G. O.
Hughes, Hector (Aberdeen, N.)Noel-Buxton, LadySymonds, A. L.
Hynd, H. (Hackney, C.)Oldfield, W. H.Taylor, R. J. (Morpeth)
Isaacs, Rt. Hon. G. A.Paget, R. T.Thomas, D. E. (Aberdare)
Janner, B.Paling, Rt. Hon. Wilfred (Wentworth)Thomas, I. O. (Wrekin)
Jeger, G. (Winchester)Paling, Will T. (Dewsbury)Thorneycroft, Harry (Clayton)
Jenkins, R. H.Palmer, A. M. F.Thurtle, Ernest
John, W.Pargiter, G. A.Titterington, M. F.
Jones, D. T. (Hartlepool)Parkin, B. T.Tolley, L.
Jones, Elwyn (Plaistow)Paton, Mrs. F. (Rushcliffe)Vernon, Maj. W. F.
Jones, P. Asterley (Hitchin)Paton, J. (Norwich)Viant, S. P.
Keenan, W.Pearson, A.Walkden, E.
Kenyon, C.Peart, T. F.Warbey, W. N.
Kinley, J.Platts-Mills, J. F. F.Watson, W. M.
Lang, G.Porter, E. (Warrington)Webb, M. (Bradford, C.)
Lavers, S.Porter, G. (Leeds)Wells, W. T. (Walsall)
Lewis, T. (Southampton)Price, M. PhilipsWest, D. G.
Lindgren, G. S.Proctor, W. T.Wheatley, Rt. Hon. John (Edinb'gh, E.)
Logan, D. G.Pryde, D. J.Whiteley, Rt. Hon. W.
Longden, F.Pursey, Comdr. H.Wigg, George
Lyne, A. W.Randall, H. E.Wilkins, W. A.
McAdam, W.Rankin, J.Willey, O. G. (Cleveland)
McEntee,, V. La T.Reeves, J.Williams, D. J. (Neath)
McGhee, H. G.Reid, T. (Swindon)Williams, J. L. (Kelvingrove)
McKay, J. (Wallsend)Rhodes, H.Williams, Ronald (Wigan)
McKinlay, A. S.Ridealgh, Mrs. M.Williams, Rt. Hon. T. (Don Valley)
McLeavy, F.Robens, A.Williams, W. T. (Hammersmith, S.)
MacMillan, M. K. (Western Isles)Roberts, Goronwy (Caernarvonshire)Williams, W. R. (Heston)
MacPherson, Malcolm (Stirling)Robinson, Kenneth (St. Pancras, N.)Willis, E.
Mainwaring, W. H.Ross, William (Kilmarnock)Wise, Major F. J.
Mallalieu, J. P. W. (Huddersfield)Royle, C.Woodburn, Rt. Hon. A.
Mann, Mrs. J.Sargood, R.Woods, G. S.
Manning, C. (Camberwell, N.)Scollan, T.Yates, V. F.
Manning, Mrs. L. (Epping)Sharp, GranvilleZilliacus, K.
Marquand, Rt. Hon. H. A.Shawcross, C. N. (Widnes)
Mathers, Rt. Hon. GeorgeShawcross, Rt. Hn. Sir H. (St. Helens)

TELLERS FOR THE AYES:

Mr. Snow and Mr. George Wallace.

NOES

Amory, D. HeathcoatGrimston, R. V.Morrison, Maj. J. G. (Salisbury)
Baldwin, A. E.Harvey, Air-Comdre. A. V.Morrison, Rt. Hon. W. S. (Cirencester)
Barlow, Sir J.Headlam, Lieut.-Col. Rt. Hon. Sir C.Nicholson, G.
Bennett, Sir P.Henderson, John (Cathcart)Nield, B. (Chester)
Birch, NigelHogg, Hon. Q.Noble, Comdr. A. H. P.
Boles, Lt.-Col. D. C. (Wells)Hope, Lord J.Prior-Palmer, Brig. O.
Bower, N.Howard, Hon. A.Roberts, H. (Handsworth)
Boyd-Carpenter, J. A.Hudson, Rt. Hon. R. S. (Southport)Robertson, Sir D. (Streatham)
Bracken, Rt. Hon. BrendanHurd, A.Sanderson, Sir F.
Buchan-Hepburn, P. G. T.Hutchison, Lt.-Cm. Clark (E'b'rgh W.)Scott, Lord W.
Carson, E.Jeffreys, General Sir G.Shepherd, W. S. (Bucklow)
Challen, C.Joynson-Hicks, Hon. L. W.Snadden, W. M.
Channon, H.Kerr, Sir J. GrahamStewart, J. Henderson (Fife, E.)
Clarke, Col. R. S.Lancaster, Col. C. G.Stoddart-Scott, Col. M.
Clifton-Brown, Lt.-Col. G.Law, Rt. Hon. R. K.Studholme, H. G.
Crosthwaite-Eyre, Col. O. E.Lloyd, Selwyn (Wirral)Turton, R. H.
Cuthbert, W. N.Lucas-Tooth, Sir H.Vane, W. M. F.
Darling, Sir W. Y.McCallum, Maj. D.Walker-Smith, D.
Digby, Simon WingfieldMcCorquodale, Rt. Hon. M. S.Wheatley, Colonel M. J. (Dorset, E.)
Dodds-Parker, A. D.McFarlane, C. S.White, Sir D. (Fareham)
Drewe, C.Mackeson, Brig. H. R.Williams, C. (Torquay)
Erroll, F. J.Maclay, Hon. J. S.Willoughby de Eresby, Lord
Fraser, Sir I. (Lonsdale)Macmillan, Rt. Hn. Harold (Bromley)York, C.
Fyfe, Rt. Hon. Sir D. P. M.Maitland, Comdr. J. W.Young, Sir A. S. L. (Partick)
Galbraith, Cmdr. T. D. (Pollok)Marples, A. E.
Galbraith, T. G. D. (Hillhead)Marshall, D. (Bodmin)

TELLERS FOR THE NOES:

Gomme-Duncan, Col. A.Mellor, Sir J.Commander Agnew and
Major Conant.

Clause 11—(Enforcement Of Regula- Tions As To Use Of Apparatus)

Lords Amendment: In page 11, line 18, at end insert:

"in a case where he considers that all reasonable steps to minimise interference have been taken in relation to the station or apparatus receiving the telegraphy."

I beg to move, "That this House doth agree with the Lords in the said Amendment."

This Amendment makes statutory provision for what has always been my right hon. Friend's intention, namely that an enforcement notice making the use of electrical apparatus contrary to the regulations an offence should not be served on the user of the electrical apparatus where the interference can reasonably be eliminated at the receiving end. That is the case where there may be a defective wireless set, or where the alteration of an aerial can make the set not cause interference.

Question put, and agreed to.

Lords Amendment: In page 12, line 17, at end, insert:

"This subsection applies in relation to a notice under subsection (1) of this section which has been varied by a subsequent notice as it applies in relation to a notice which has not been so varied."

I beg to move, "That this House doth agree with the Lords in the said Amendment."

Where under Clause 11 (1) the Postmaster-General serves an enforcement notice, subsection (3) gives a right of appeal to the tribunal. By subsection (2) the Postmaster-General has power to vary the notice by serving another notice. We are anxious to assure, by putting these words in the Bill, that where the Postmaster-General varies a notice, and there is a second notice, the right of appeal shall also apply to the second notice. When the Bill was before the House it was stated that there was some doubt whether a right of appeal would apply in such circumstances. This Amendment makes it certain.

I am not quite happy about this Amendment because the words are rather confusing. May we have a fuller explanation, as I am sure it would be welcome. The Amendment contains considerable amount of reference. I want to know how far these variations would go and why this Amendment could not have been made on the Committee stage of the Bill? On the whole, the other place has been wise in putting forward this Amendment, as they almost always are, but I wish that the Postmaster-General would give a rather wider explanation. This does not seem to be an Amendment which is without substance I see that the Assistant Post-master-General agrees. Therefore, we should have a little more explanation.

Question put, and agreed to.

Lords Amendment: In page 12, line 21, after "heard," insert:

"and has, in accordance with the rules regulating the procedure of the tribunal, procured himself to be made a party to the reference."

I beg to move, "That this House doth agree with the Lords in the said Amendment."

Where a case goes before a tribunal there may be a desire to be represented and intervene and it is only right that there should be power for such persons to be paid their costs or to pay the costs awarded against them. It is to the end that we propose to agree with the Lords Amendment.

Question put, and agreed to.

Lords Amendment: In page 12, line 30, at end, insert:

"(c) if they are satisfied that compliance with the said requirements or those requirements as directed to be varied, would impose unreasonable cost (not being less than one hundred pounds) upon the person having possession of or any interest in the apparatus they may if they think fit direct the Postmaster-General to allocate the cost in such proportion among such persons or class of persons and in such manner as may be specified in the direction."

I beg to move, "That this House doth disagree with the Lords in the said Amendment."

This Amendment gives power to the appeal tribunal to be set up under the Bill, if they are satisfied that compliance with the requirements of the regulations would impose unreasonable cost on the person possessing or having an interest in apparatus, to direct the Postmaster-General
"to allocate the cost in such proportion among such persons or class of persons and in such manner as may be specified in the direction,"
if the cost would amount to more than £100.

The Amendment is singularly vague both as to its practical application and the machinery for its enforcement. If the tribunal should direct the Postmaster-General to allocate the cost, no indication is given of the action which would fall to be taken by the Postmaster-General. It would be the function of the Tribunal itself to specify in what proportion among all the persons and in what manner the allocation should be made. If the intention is that the Postmaster-General should notify tine persons concerned of the sums allocated to them and should recover those sums from them, there are three comments to be made. The first is that the Amendment does not say this. The second is that the Amendment does not provide the Postmaster-General with power to recover the sums allocated or say when those sums should be payable or how the Postmaster-General shall deal with the sums when recovered. The third is that functions such as these would be strangely inappropriate to the Postmaster-General, who will be concerned not as a functionary of the tribunal but as a party to the proceedings in his capacity as guardian of the ether.

9.15 p.m.

Again, the Amendment does not give to the persons among whom the cost is allocated the elementary right to be heard by the Tribunal on the justice of the allocation, and if there is one thing which hon. Members have insisted upon it is the right of appeal in all these disputed matters—but this would not be the case in this particular instance. In theory and in equity, the allocation should be made between all the persons who would benefit from the suppression of the interference in proportion to the degrees of benefit. How these persons would be identified I do not know, and I do not think anybody else could know. It may be that it can be done with classes of persons. It may be that the interference would affect a class of person, say, six, 10, 20, 50 or perhaps 100, and the Postmaster-General or somebody else has to find out the individual, and, when he finds him out, he has no power to do anything about it. Presumably, it would still go on as usual.

I have some sympathy with the outlook of those who proposed the Amendment, but I think we have gone a long way to meet their point of view in providing protection against undue burdens being unreasonably imposed. First of all, there are the regulations prescribing the requirements to be complied with in respect of the apparatus to be used. Hon. Members know that the people who will make the regulations are to be very carefully selected, firstly, from among people whose technical knowledge of the industry is of the greatest, and also from people, especially on the Advisory Committee, whose interests are also affected, and the Postmaster-General is compelled to select the Committee from persons of that kind. That in itself is a reasonable safeguard.

Then there is the Amendment to be moved later, to which I have referred, providing that, at the tribunal itself, the question of undue interference will not be merely a matter of how much interference is caused by the emission of the interfering frequencies, but also that the tribunal must take into account the question of how much hardship would be caused if the person responsible had to pay what appeared to be rather a large sum. That is a second protection.

The next step is that nothing can happen to anyone until the Postmaster-General has served an enforcement notice under the Act. Regulations will be recommended by the Committee and will be made, but, although it may be that perhaps next year thousands of pieces of apparatus will not be in accordance with the regulations, that fact does not mean anything to these people. Nothing can be done until these pieces of apparatus cause undue interference, and when, because of that, and when all these things have been gone through, the Postmaster-General serves a notice. I hope that no hon. Member feels that either myself as Postmaster-General or any other Postmaster-General will go in for serving an orgy of these notices. That is about the most unlikely thing that can possibly happen.

Then there is the question, which is also important, and even with this Bill it will still remain important, of voluntary co-operation, and, in any of these bigger cases, where a considerable sum was likely to be concerned, it would be a matter of talking it over and considering it point by point in every particular be- tween our people and the people concerned, and trying to arrive at a decision. As a matter of fact, that is what is happening now, and is likely to happen in the future. It would not be until everything else had failed that this other procedure would take place.

Last but not least, there is the question of the Appeal Tribunal. If all these things fail, then the person or persons concerned will go to the Appeal Tribunal and the decision will be made there, together will the fact that under the Amendment which has just been added the question of hardship would be brought to bear in any decision which the Appeal Tribunal came to. I say, therefore, that the Measure is needed, but it could be reviewed if time and experience showed a real need for that. When regard is had to the safeguards incorporated in the Measure, I think it will be found to give adequate safeguards. As a matter of fact, it was said that we were overloading the Bill with safeguards.

I am not prepared to write into the Bill financial provisions on the lines of the Amendment, but if in practice difficulties of a financial character should arise which cannot be surmounted in the ordinary course of negotiations conducted in a reasonable spirit of give and take, the Government would be prepared to give their sympathetic consideration to the position, and if convinced that something, should be done, would do their best to meet the situation, and, if necessary make proposals to Parliament.

The Postmaster-General has entirely missed the point at which this Amendment is directed. I do not want to be long at this late hour, but I really must put the point before the House because it is one of some substance. I think I can do it best by illustration. We will presume, for the sake of this illustration, that the Admiralty wishes to put up a wireless station somewhere, or it may be the Postmaster-General, and it is found that one of the grid systems, either the Electricity Board or the Hydro-Electric Board, with which my hon. Friend will deal later, has a series of overhead lines which emit interference, and perhaps prejudice the operation of the station. What happens is that the Admiralty and the Electricity Board or the Hydro-Electric Board can get together and come to some arrangement, because it may well be that in order to stop this interference the Electricity Board may have to incur very high costs in laying, perhaps, a great deal of underground cable, which, in turn, will impinge on the cost of electricity to industry at a time when the Chancellor and everybody is saying that we must keep costs down.

It may be that the Admiralty, or whatever Department it is, and the Board will come to some arrangement to share the cost, but I think that anybody who has had experience of Government Departments will know that very often they need having their heads knocked together, and I suppose there are no worse instances of "passing the buck" than those which exist in Government Departments. Suppose the Admiralty refuse to pay anything, the Postmaster-General may come along, and, under order, compel the Electricity Board to install this apparatus at great loss in order to prevent interference. The next thing that happens is that the Electricity Board can go to the tribunal which can either uphold the Postmaster-General or can give the case against him. What it cannot do is to allocate costs.

The Tribunal may very well say that there is undue hardship to the person—in this case the Electricity Board—and that they will not uphold the Postmaster-General. In that case, the Admiralty station will not work. Surely, this provision which will give an independent tribunal power to allocate costs and to compromise in a dispute between Government Departments in a case of that sort ought to be put into the Bill. I can see no earthly reason why it should not. There is nothing to stop the two Departments from coming to an agreement if they wish. For the life of me, I cannot understand why the Postmaster-General refuses to put this very reasonable provision into the Bill.

My hon. Friend the Member for Westbury (Mr. Grimston) has dealt with the general principles underlying this excellent and, we think, most necessary Amendment. I entirely agree with him that the Postmaster-General, albeit with great charm, as usual, has missed the point and has not given us any satisfaction whatsoever. I think it is perfectly clear what this Amendment asks for, although he says it is not clear. We have to remember that the Postmaster-General himself, when he is brought into this matter, is very much—or will be very much—a prejudiced party in any dispute there may be. He asks, "How am I to dispose of the money which is to be collected from these different people if the cost is allocated as between the electricity apparatus user and the wireless user?" He can dispose of that money just as well as he can dispose of the money from the people from whom he will get it anyway—the users of the apparatus. There is no difficulty whatsoever about how to dispose of money, as the head of any Government Department ought to know by now.

We were very hopeful at one time that the Government would see reason in another place about this Amendment. There, the Government said that they would consider the matter urgently with a view to doing what they could to ease the burden of any large public authority concerned with the supply of electricity. I propose to confine my remarks to a large supplier of electricity—the North of Scotland Hydro-Electric Board. It is of the greatest importance that as much electricity as possible at the cheapest possible rate should be supplied to the people of the scattered, sparsely populated districts of Scotland. That is, we consider, a fundamental necessity.

If this Amendment is not accepted there will be grave risk that the cost of electricity to those very people will be very substantially raised. My hon. Friend has pointed out that it may be necessary for a supplying authority such as this to put cables underground instead of overhead. It may be of interest to hon. Members to know, if, perhaps, they do not know already, that to do that in the Highlands of Scotland might cost a minimum of £22,000 per mile, which is a very considerable sum to add to the cost of electricity to the people for whom we are hoping to provide it cheaply. That is one of the illustrations which, I think, show very clearly what a serious effect it will have on this electricity authority if this Amendment is not accepted.

We must be perfectly clear on one or two points. The first is that what the Lord Privy Seal, in another place, described as safeguards are not safeguards at all in this particular respect, although the Postmaster-General has repeated that he thinks there is every possible safeguard. The Lord Privy Seal said that the first thing it was necessary to secure as a safeguard for this particular purpose was that any difference between Government Departments should be settled by sensible discussion and compromise. My hon. Friend has pointed out that of all bodies in this world Government Departments seem to be, in fact and in practice, the least suitable for coming to a friendly compromise on matters on which they disagree. We have all had experience of that.

It is important for the Postmaster-General to realise that the North of Scotland Hydro-Electric Board is not a Government Department, and that it is subject to all the penalities imposed by the Bill, whereas the opposing authority, which is a Department of State, is not subject to anything of the kind. The North of Scotland Hydro-Electric Board will come into the argument with its hands tied, to all intents and purposes, and I cannot see that what the Minister suggests—the sweet reasonableness always found between two Government Departments—will be discovered when one Government Department is dealing with an authority which is not a Government Department. I hope we shall hear something from the Minister on this subject because it is a fact, whatever he said, that it is not just a matter of sweet reasonableness between two Government Departments.

9.30 p.m.

The Lord Privy Seal added that there were three safeguards which were adequate. The first of these was the advisory committee. Those of us who have had experience of advisory committees have a very poor idea of their value in safeguarding the consumer. In any case, this advisory committee cannot save the authority the expense which will be laid upon it if it is found that there is interference as a result of their working. He then said that the use of the apparatus must be likely to cause undue interference. Of course, that is no safeguard as far as cost is concerned; it merely prevents unnecessary cost being thrown on the Hydro-Electric Board, as is desirable, but the necessary cost which is not covered may be very substantial indeed, as I have endeavoured to point out, for instance, in putting cables underground.

He then spoke of the third safeguard, which is that of the tribunal. Again, tribunals have their use, as we know, but, personally, I do not think the Hydro-Electric Board will be in any way safeguarded by the Tribunal in the matter of the payment of charges. It may be possible, under the Tribunal's ruling, to get away without paying anything at all, but in that case it is perfectly clear that the reason for putting that charge on the Hydro-Electric Board will be done away with or, rather, the reason will remain and the faults and the dangers will still be apparent to the user. Nothing will be done at all, although the original charge was due to the fact that the Minister thought something should be done. It merely washes out the charge to be made, and has no effect upon what is to be done in the way of paying and allocating payment as between the different parties concerned.

I could go on with a great deal of detail, but I shall not do so because the hour is late and there is much more Business to come before the House. What I want the House, and particularly the Postmaster-General, to realise is that the North of Scotland Hydro-Electric Board have a very difficult and highly responsible job to do; and that, as experts in their particular line of business, they are very disturbed at the fact that if this Amendment is not retained in the Bill they will have to pay very large costs which, frankly, they do not feel their financial position enables them to pay except by means which are most distasteful and are against the wishes of this House—raising the cost to the consumer in the Highlands of Scotland.

This authority is not a Government Department; it is not like the British Electricity Authority in England in that respect, but is an independent body. Raising the cost is the only possible way in which they can carry out the orders of the Minister, if he says that they are to pay the costs of interference, which in this case might be on a colossal scale; they must be. The Hydro-Electric Board in the North of Scotland carry a grid over what is perhaps some of the most difficult country in the world and they are doing it very well in circumstances of the greatest difficulty. One thing the Board must do is to keep expenses down as low as possible.

It is impossible for this authority to carry out its pledge and indeed to carry out the instructions which this House of Commons has given to it if the Minister does not accept the Amendment inserted in the Bill in the other place. In conclusion, I would say that the British Electricity Authority in England heartily supports this plea by the North of Scotland Hydro-Electric Board, as does the similar authority in Northern Ireland. I cannot believe that this House will go against such experts as that and I feel certain that we shall have a reasonable answer so that, even if the Minister cannot accept the detailed wording of this Amendment, he will accept the great principle of it and retain it in the Bill.

I thought the Postmaster-General was singularly unconvincing when he invited the House to disagree with the Lords in this Amendment, because it is quite plain that, whereas in the discussion of an earlier Amendment he invoked the aid of experts, on this occasion he has not sought the advice of the experts so admirably outlined by my hon. and gallant Friend the Member for Perth and Kinross (Colonel Gomme-Duncan). It is obvious that as soon as the Postmaster-General saw his own name in the Amendment he said "I must avoid this job of work at all costs." He crouched low over the Despatch Box in case the job of work landed there and then on his shoulders, without even pausing to consider whether the tasks this Amendment would impose upon him were serious or onerous.

The Postmaster-General suggested that if this Amendment were accepted it would place him in an impossible position; that he would have to decide how the costs were to be allocated; and that he would have the impossible task of collecting the moneys, without perhaps knowing to whom they should be paid. If he looks at the Amendment again he will find that all these matters are very clearly dealt with. In the first place, it is obvious that the bills for carrying out the work of suppression will be sent to the owner of the apparatus, who will have to pay them. All that happens is that the person who has to pay the bills will be able to recover contributions from the various persons nominated by the Postmaster-General.

Now the Postmaster-General does not have a free hand; he is not placed in the quandary of having to decide to whom he should allocate the various proportions of the cost, because that is all decided for him by the Tribunal. The Tribunal, if they think fit, may
"direct the Postmaster-General to allocate the cost in such proportion…and in such manner as may be specified in the direction."
The Postmaster-General is merely the agent of the Tribunal. The Tribunal decides the proportions of the cost and the individuals from whom various proportions should be collected. It is merely for the Postmaster-General to allocate the actual figure in pounds, shillings and pence to each participant. Surely that is a task which is not beyond the wit of the Postmaster-General. If those were his only grounds for disagreeing with this Amendment, then in face of the impressive evidence marshalled by my hon. and gallant Friend I hope that the House will see its way to agreeing with this Amendment and writing it into the Bill.

I very much hope that the Assistant Postmaster-General will be able to say something in reply to the very cogent arguments advanced in favour of this House agreeing with the Lords in this Amendment. I agree with every word said by my hon. and gallant Friend the Member for Perth and Kinross (Colonel Gomme-Duncan) about the inadequate manner in which the Postmaster-General attempted to deal with this matter. I represent a constituency in the Lowlands of Scotland where the first Hydro-Electric Board came into being, and I have every sympathy with what my hon. and gallant Friend said about the possible danger to the consuming public of increased costs if this Amendment is not accepted.

It is quite true that in one of the counties I have had the honour to represent in this House costs to the consumer have not been raised. But in the other, which did not have the advantage of the supply of electricity from the first Hydro-Electric Board in Scotland, there have been, over a long period of years, many complaints about the cost of supplying electricity to the ordinary consumer. Since electrical undertakings in general were nationalised there has been nothing to allay those fears, and I am of opinion that if this Amendment is not accepted, not merely will their fears go unallayed but the costs to the consumer will be very materially increased. I should have thought that a Socialist Government in all events would have been at great pains to ensure that the consuming public, particularly the small consumers, were not penalised in such a way as this.

It is not for me to proffer advice to the Government with an election in the offing, but I should have thought that if they did not agree to this Amendment they would agree to something which would be in their own interests in view of the impending election. [Laughter.] The hilarious way my remarks have been received by hon. Members opposite leads me to believe that my chances of reelection are much greater than those of some Scottish hon. Members opposite. It is not for me to proffer any advice on that score, because I hope to benefit from all the mistakes that the Government make. But this is not a question of party. It is a question of doing our best to protect the interests of the small consumer. I cannot understand why the Postmaster-General should have turned a deaf ear to this proposal, and I hope the Assistant Postmaster-General will be in a position to agree to this Amendment, having regard to the small people who will benefit from it.

The Postmaster-General told us that if anything went wrong we could rely on the Government to look on it as a matter of sympathy. I know he would like to do that, but I have completely and utterly failed to understand how it can be done. I have searched through a long list of cases in which really good people wanted sympathy, and a long Parliamentary experience has taught me—[HON. MEMBERS: "Too long."] I agree, very much too long for the Socialists, but not long enough for sensible people, as my constituents have found out. I must not go into that matter, but I would say that wherever a promise of this sort is made we should not allow the Government to escape from that promise when a real crisis arises.

I listened to the Postmaster-General with very great care as I always do, and I appreciate that he had a brief. At first I could not make out what had happened. What he said did not appear to bear any relationship to the Amendment we were discussing, until my hon. Friend the Member for Westbury (Mr. Grimston) and my hon. Friend the Member for Altrincham and Sale (Mr. Erroll), explained the position. Then I became aware of what had happened. The Postmaster-General, by some curious twist, read the wrong brief. There is no other explanation of what he said, and if he reads it tomorrow in HANSARD he will see that what I say is right, that it bears no relation whatever to this Amendment. His statement was completely irrelevant.

9.45 p.m.

Under this Amendment it is quite clear what will happen. Certain duties are laid on the body proposed by the Amendment and the Postmaster-General will be able to avoid what I want to see avoided, namely hardship to the individual. My hon. and gallant Friend the Member for Perth (Colonel Gomme-Duncan) put the case for the Highlands. I represent a part of the South country, and I feel that I could put a similar case in regard to innumerable instances in rural districts in the South, in Wales, in the Midlands and elsewhere. It is our duty as a House of Commons not to look after the interests of the Government in placing burdens upon individuals, but to look after the individuals and to save them from the unnecessary and often wicked burdens which are put on them by the Government of the day. I hope that hon. Members will vote in favour of this sensible Amendment, because it is obviously in the interests of the ordinary persons of this country.

On a point of Order. Are we not entitled to some reply from the Assistant Postmaster-General?

I was just going to get up. [HON. MEMBERS: "No."] Perhaps I might briefly reply to the points that have been raised. I shall not attempt to follow the arguments of the hon. Mem- ber for Galloway (Mr. McKie) with regard to what should be the correct tariff for the Scottish Hydro-Electric Board to charge for their electrical energy. The hon. Member for Torquay (Mr. C. Williams) seemed to be under the impression that the regulations will be entirely arbitrary. In point of fact, the tribunal will have the power to relax the regulations in favour of appellants. I fail to see how it can be said that my right hon. Friend is acting in an arbitrary manner.

The speech of the hon. and gallant Member for Perth (Colonel Gomme-Duncan) appeared to be special pleading for the Scottish Hydro-Electric authority. There is no intention, by regulation or by order of my right hon. Friend to compel the Scottish Hydro-Electric authority or the British Electrical authority to lay all their cables underground because they might cause interference. If there were any question about the siting of pylons, there would be complete consultation among all the departments concerned. Suppose, as a result of a leaky insulator on a high tension pylon, there were interference; does the hon. and gallant Gentleman suggest that the Post Office should pay for the costs of keeping in full and proper maintenance the whole of the network, simply because of that neglect of maintenance?

Would not the hon. Gentleman agree that there might well be interference from other causes than faulty maintenance?

I agree, but I am dealing with the Amendment as it left the other place, and with the reasons why my right hon. Friend cannot agree with the Amendment. There is the other point that this suggestion does not deal only with electrical authorities, who are not the only people or the only commercial concerns likely to cause interference. Electrical apparatus in industrial establishments can cause considerable interference. Do the Opposition suggest that we should pay for the whole cost of protecting that apparatus and preventing it from causing interference? That would be something entirely new. Nobody suggests that because the Ministry of Labour says that under the Factory Acts machinery should be protected that the whole of the cost should fall upon the Ministry of Labour. That seems a fair analogy.

Where interference is being caused, it is entirely wrong that the Post Office should have to meet the cost, if it needed more than the sum of £100 to remove the interference. The later Amendment mentioned by my right hon. Friend gives the ordinary individual a chance, and it prevents an arbitrary Government official placing a burden on his shoulders.

Before the hon. Gentleman sits down, in view of the really astonishing misrepresentation of what I have said—I am sure it is quite unintentional but it is misrepresentation

Division No. 209.]

AYES

[9.53 p.m.

Acland, Sir RichardEvans, S. N. (Wednesbury)Lavers, S.
Adams, Richard (Balham)Ewart, R.Lewis, T. (Southampton)
Albu, A. H.Fairhurst, F.Lindgren, G. S.
Allen, A C. (Bosworth)Farthing, W. J.Lipson, D. L.
Allen, Scholefield (Crewe)Field, Capt. W. J.Logan, D. G.
Alpass, J. H.Foot, M. M.Longden, F.
Austin, H. LewisForman, J. C.Lyne, A. W.
Awbery, S. S.Fraser, T. (Hamilton)McAdam, W.
Ayles, W. H.Gaitskell, Rt. Hon. H. T. N.McEntee, V. La T.
Bacon, Miss A.Ganley, Mrs. C. S.McGhee, H. G.
Balfour, A.Gibbins, J.McKay, J. (Wallsend)
Barstow, P. G.Gibson, C. W.McKinlay, A. S.
Barton, C.Gilzean, A.Maclean, N. (Govan)
Battley, J. R.Glanville, J. E. (Consett)McLeavy, F.
Bechervaise, A. E.Gooch, E. G.MacMillan, M. K. (Western Isles)
Benson, G.Goodrich, H. E.MacPherson, Malcolm (Stirling)
Berry, H.Gordon-Walker, P. C.Mainwaring, W. H.
Bing, G. H. C.Greenwood, A. W. J. (Heywood)Mallalieu, J. P. W. (Huddersfield)
Binns, J.Grenfell, D. R.Mann, Mrs. J.
Blenkinsop, A.Grey, C. F.Manning, C. (Camberwell, N.)
Blyton, W. R.Grierson, E.Manning, Mrs. L. (Epping)
Boardman, H.Griffiths, D. (Rother Valley)Marquand, Rt. Hon. H. A.
Bowden, Flg. Offr. H. W.Griffiths, Rt. Hon. J. (Llanelly)Mathers, Rt. Hon. George
Braddock, Mrs. E. M. (L'pl. Exch'ge)Griffiths, W. D. (Moss Side)Messer, F.
Bramall, E. A.Guy, W. H.Middleton, Mrs. L.
Brook, D. (Halifax)Haire, John E. (Wycombe)Millington, Wing-Comdr. E. R.
Brooks, T. J. (Rothwell)Hamilton, Lieut.-Col. R.Mitchison, G. R.
Broughton, Dr. A. D. D.Hannan, W. (Maryhill)Moody, A. S.
Brown, George (Belper)Hardy, E. A.Morley, R.
Brown, T. J. (Ince)Harrison, J.Morris, P. (Swansea, W.)
Burke, W. A.Hastings, Dr. SomervilleMort, D. L.
Butler, H. W. (Hackney, S.)Henderson, Joseph (Ardwick)Moyle, A.
Carmichael, JamesHerbison, Miss M.Nally, W.
Champion, A. J.Hewitson, Capt. M.Naylor, T. E.
Chetwynd, G. R.Hobson, C. R.Neal, H. (Claycross)
Cobb, F. A.Holman, P.Nichol, Mrs. M. E. (Bradford, N.)
Cocks, F. S.Holmes, H. E. (Hemsworth)Nicholls, H. R. (Stratford)
Coldrick, W.Horabin, T. L.Noel-Buxton, Lady
Collick, P.Houghton, A. L. N. D.Oldfield, W. H.
Collindridge, F.Hoy, J.Paget, R. T.
Collins, V. J.Hudson, J. H. (Ealing, W.)Paling, Rt. Hon. Wilfred (Wentworth)
Colman, Miss G. M.Hughes, Hector (Aberdeen, N.)Paling, Will T. (Dewsbury)
Cooper, G.Hynd, H. (Hackney, C.)Palmer, A. M. F.
Corbet, Mrs. F. K. (Camb'well, N. W.)Isaacs, Rt. Hon. G. A.Pargiter, G. A.
Crossman, R. H. S.Janner, B.Parkin, B. T.
Cullen, Mrs.Jeger, G. (Winchester)Paton, Mrs. F. (Rushcliffe)
Daggar, G.Jeger, Dr. S. W. (St. Pancras, S. E.)Paton, J. (Norwich)
Davies, Edward (Burslem)Jenkins, R. H.Pearson, A.
Davies, S. O. (Merthyr)John, W.Peart, T. F.
Deer, G.Jones, D. T. (Hartlepaol)Popplewell, E.
Delargy, H. J.Jones, Elwyn (Plaistow)Porter, F. (Warrington)
Diamond, J.Jones, P. Asterley (Hitchin)Porter, G. (Leeds)
Dobbie, W.Keenan, W.Price, M. Philips
Donovan, T.Kenyon, C.Proctor, W. T.
Dumpleton, C. W.Kinghorn, Sqn.-Ldr. E.Pryde, D. J.
Ede, Rt. Hon. J. C.Kinley, J.Pursey, Comdr. H.
Edwards, W. J. (Whitechapel)Lang, G.Randall, H. E.

as clear as daylight—may I say that I never suggested that we were only dealing with an electrical authority—

With great respect, Mr. Speaker, I have been grossly misrepresented, and I was trying to put it right.

Question put, "That this House doth disagree with the Lords in the said Amendment."

The House divided: Ayes, 232; Noes, 97.

Rankin, J.Smith, S. H. (Hull, S. W.)Wheatley, Rt. Hon. John (Edinb'gh, E.)
Reeves, J.Sorensen, R. W.Whiteley, Rt. Hon. W.
Reid, T. (Swindon)Soskice, Rt. Hon. Sir FrankWigg, George
Rhodes, H.Sparks, J. A.Wilkins, W. A.
Ridealgh, Mrs. M.Steele, T.Willey, O. G. (Cleveland)
Robens, A.Stross, Dr. B.Williams, D. J. (Neath)
Roberts, Goronwy (Caernarvonshire)Stubbs, A. E.Williams, J. L. (Kelvingrove)
Robinson, Kenneth (St. Pancras, N.)Sylvester, G. O.Williams, Ronald (Wigan)
Ross, William (Kilmarnock)Taylor, R. J. (Morpeth)Williams, Rt. Hon. T. (Don Valley)
Royle, C.Thomas, D. E. (Aberdare)Williams, W. T. (Hammersmith, S.)
Sargood, R.Thomas, I. O. (Wrekin)Williams, W. R. (Heston)
Scollan, T.Thorneycroft, Harry (Clayton)Willis, E.
Sharp, GranvilleThurtle, ErnestWise, Major F. J.
Shawcross, C. N. (Widnes)Titterington, M. F.Woodburn, Rt. Hon. A.
Shawcross, Rt. Hn. Sir H. (St. Helens)Tolley, L.Woods, G. S.
Shurmer, P.Viant, S. P.Yates, V. F.
Silverman, J. (Erdington)Wallace, H. W. (Walthamstow, E.)Zilliacus, K.
Simmons, C. J.Warbey, W. N.
Skeffington, A. M.Watson, W. M.

TELLERS FOR THE AYES:

Skinnard, F. W.Webb, M. (Bradford, C.)Mr. Snow and
Smith, C. (Colchester)Wells, W. T. (Walsall)Mr. George Wallace.
Smith, Ellis (Stoke)West, D. G.

NOES

Agnew, Cmdr. P. G.Gomme-Duncan, Col. A.Peto, Brig. C. H. M.
Amory, D. HeathcoatGrimston, R. V.Pickthorn, K.
Astor, Hon. M.Harvey, Air-Comdre. A. V.Price-White, Lt.-Col. D.
Baldwin, A. E.Headlam, Lieut.-Col. Rt. Hon. Sir C.Prior-Palmer, Brig, O.
Barlow, Sir J.Henderson, John (Cathcart)Ramsay, Maj. S.
Bennett, Sir P.Hogg, Hon. Q.Rayner, Brig. R.
Birch, NigelHope, Lord J.Roberts, H. (Handsworth)
Boles, Lt.-Col. D. C. (Wells)Howard, Hon. A.Roberts, P. G. (Ecclesall)
Bowen, R.Hudson, Rt Hon. R. S. (Southport)Roberts, W. (Cumberland, N.)
Bower, N.Hurd, A.Robertson, Sir D. (Streatham)
Boyd-Carpenter, J. A.Hutchison, Lt.-Cm. Clark (E'b'rgh W.)Sanderson, Sir F.
Bracken, Rt. Hon. BrendanJeffreys, General Sir G.Scott, Lord W.
Buchan-Hepburn, P. G. T.Joynson-Hicks, Hon. L. W.Shepherd, W. S. (Bucklow)
Carson, E.Kerr, Sir J. GrahamSnadden, W. M.
Challen, C.Lancaster, Col. C. G.Spearman, A. C. M.
Channon, H.Law, Rt. Hon. R. K.Stoddart-Scott, Col. M.
Clarke, Col. R. S.Lloyd, Selwyn (Wirral)Strauss, Henry (English Universities)
Conant, Maj. R. J. E.Low, A. R. W.Studholme, H. G.
Corbett, Lieut.-Col. U. (Ludlow)Lucas-Tooth, Sir H.Teeling, William
Crookshank, Capt. Rt. Hon. H. F. C.MacAndrew, Col. Sir C.Turton, R. H.
Crosthwaite-Eyre, Col. O. E.McCallum, Maj. D.Vane, W. M. F.
Crowder, Capt. John E.McCorquodale, Rt. Hon. M. S.Walker-Smith, D.
Cuthbert, W. N.McFarlane, C. S.Ward, Hon. G. R.
Digby, Simon WingfieldMcKie, J. H. (Galloway)White, Sir D. (Fareham)
Dodds-Parker, A. D.Maclay, Hon. J. S.Williams, C. (Torquay)
Dower, Col. A. V. G. (Penrith)Maitland, Comdr. J. W.Williams, Gerald (Tonbridge)
Drewe, C.Manningham-Buller, R. E.Willoughby de Eresby, Lord
Erroll, F. J.Marshall, D. (Bodmin)York, C.
Foster, J. G. (Northwich)Mellor, Sir J.Young, Sir A. S. L. (Partick)
Fraser, H. C. P. (Stone)Morrison, Maj. J. G. (Salisbury)
Fraser, Sir I. (Lonsdale)Morrison, Rt. Hon. W. S. (Cirencester)

TELLERS FOR THE NOES:

Galbraith, Cmdr T. D. (Pollok)Nicholson, G.Brigadier Mackeson and
Galbraith, T. G. D. (Hillhead)Nield, B. (Chester)Colonel Wheatley.
George, Maj. Rt. Hn. G. Lloyd (P'ke)Noble, Comdr. A. H. P.

Lords Amendment: In page 12, line 31, after "notice" insert "or allocate the cost," disagreed to.

Clause 12—(Enforcement Of Regula- Tions As To Sales, Etc, By Manu- Facturers And Others)

Lords Amendment: In page 13, line 36, after "heard," insert:

"and has, in accordance with the rules regulating the procedure of the tribunal, procured himself to be made a party to the reference."

10.0 p.m.

I beg to move, "That this House doth agree with the Lords in the said Amendment."

This Amendment corresponds to the similar Amendment in Clause 11, page 12, line 21. The same conditions of costs are applicable to intervenors under the present Clause as in Clause 11.

Question put, and agreed to.

Clause 16—(Regulations And Orders)

Lords Amendment: In page 18, line 30, leave out from beginning to "shall," in line 33 and insert:

"(2) The power to make orders conferred on the Postmaster-General by section eight of this Act and any power conferred on him by any of the provisions of this Act to make regulations shall be exercisable by statutory instrument, and any statutory instrument made in the exercise of any of the said powers."

I beg to move, "That this House doth agree with the Lords in the said Amendment."

It is not in accordance with Parliamentary practice to require Orders in Council extending the provisions of Acts of Parliament to the Isle of Man or to the Channel Islands to be laid before Parliament. The Amendment modifies the Bill accordingly.

Question put, and agreed to.

Clause 19—(Interpretation)

Lords Amendment: In page 20, line 12, after "means" insert "the prejudicing by."