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National Finance

Volume 483: debated on Tuesday 6 February 1951

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National Insurance (Actuary's Report)

48.

asked the Chancellor of the Exchequer whether he has yet received the interim report of the Government Actuary under Section 39 (1) (b) of the National Insurance Act, 1946.

Yes, Sir. It was laid before the House on 2nd February. Copies will be available tomorrow.

That being so, would my right hon. Friend now, in view of the increase in the cost of living and the desirability of increasing the basic rate of pensions, give directions under the Act for an immediate review of the status of the National Insurance Fund instead of waiting until 1953?

I have no power under the Act to give directions. It would have been possible to have directed the Actuary to make a comprehensive review at an earlier date than 1954, but that has not been done and this is an interim report.

Is it the case that all the assets of this Fund have already been lent to the right hon. Gentleman, and has he not spent them all? Therefore, if he wants any money, he will have to borrow again.

Savings (Poster)

49.

asked the Chancellor of the Exchequer when the poster appealing for national savings to finance the East African groundnuts scheme was printed and published; and when it was withdrawn from exhibition; and why.

I assume that the hon. Member is referring to a poster dealing with the part national savings play in the development of colonial resources. The poster was printed in June, 1949, and had a limited distribution in September, 1949. In October, 1950, the National Savings Committee decided on a further distribution to schools but the Committee have since given instructions to withdraw the poster as part of the letterpress no longer accords with the facts.

Will the Chancellor agree that the poster stated that two million acres would be reclaimed and that it was published after the decision to abandon that scheme? Was it not, therefore, a grossly misleading prospectus?

If the hon. Member will study the answer I gave to his original Question. I think he will see that the dates indicate that it is not the case that the poster was printed after the decision was taken.

Was the Treasury responsible for the issue of this poster or was it the Ministry of Food?

Capital Profits (Taxation)

50.

asked the Chancellor of the Exchequer whether he will enlarge the terms of reference of the Royal Commission on Taxation of Incomes to include consideration of taxes on capital gains.

The Royal Commission have been informed, in reply to an inquiry received from them, that their present terms of reference entitle them to consider the question of charging to Income Tax or Profits Tax any profit ranking as a capital profit under the existing law which might reasonably be brought within the scope of those taxes.

British Officials And Forces Personnel, France (Allowances)

51.

asked the Chancellor of the Exchequer by what percentage the allowances of those serving under the Foreign Office in France have recently been increased; to what extent this was according to a scale based on the cost of living recently decided upon, and how many officials were involved; by what percentage have the allowances of those members of the Royal Navy, Army and the Royal Air Force serving at present in France been reduced during the same period and how many people were involved; and why one service should have an increase and others a decrease.

The allowances of Foreign Service officers employed in France were increased by rather less than 10 per cent. last April in the light of the local cost of living and the effect of the devaluation of the pound in September, 1949. This affected about 150 staff.

There are about 450 members of the British Armed Forces serving in France. They received an interim increase in their allowances in September, 1949, immediately after and in consequence of devaluation. On a review in January, 1950, new consolidated rates replaced these interim rates, being slightly higher in some cases and slightly lower in others. There has been no subsequent change except that in July, 1950, a special increase of about 35 per cent. was made in the ration allowance of those members of the Forces who were stationed in Paris.

The allowances of members of the British Armed Forces employed abroad are assessed on a different basis from those of the Foreign Service and are designed to cater for different circumstances and requirements. Changes in the allowances do not, therefore, necessarily take place at the same time or to the same extent, but I have no reason to believe that there has been any unfairness resulting from the recent changes I have described.

Surely members of the British Forces who are serving abroad, and who may be attached to embassies or consulates or are working very closely with them, ought to be looked after in the same way as are the Foreign Office officials in France when the cost of living is going up.

I have no reason to believe that the present arrangements are in any way unsatisfactory so far as the members of the Armed Forces are concerned.

Can my right hon. Friend say whether the increased cost of living referred to in this Question applies only to Socialist countries and not to capitalist countries?

Coal Imports (Dollars)

52.

asked the Chancellor of the Exchequer how much dollar currency has been made available to the National Coal Board for the purchase of coal from abroad.

On their current import programme, the National Coal Board had by 22nd January spent 3,345,440 dollars on purchases of coal from the United States of America.

Has any limit been imposed by the right hon. Gentleman on future expenditure under this heading, and if so, what is that limit?

They have been authorised to purchase up to 1.2 million tons of coal.

Was not the Chancellor rather disappointed to find the Coal Board buying coal at £7 a ton and selling it at £4 a ton?

Is the figure which the right hon. Gentleman has quoted based on an f.o.b. or a c.i.f. basis, and was the coal transported in British or American ships?

The figure is the cost including the freight figure and it includes such dollar freight as there was.

Is not the position that, because of the efficiency of the National Coal Board, coal produced in England is about half the price of coal produced in the rest of the world?

Does not the right hon. Gentleman's reply mean that before these transactions are completed, dollar expenditure by the National Coal Board will be at least twice as much as that which was indignantly refused by the Government for increasing the basic ration of petrol last year?

Austrian Loan (Czech Obligations)

53.

asked the Chancellor of the Exchequer what steps His Majesty's Government have taken to induce the Czechoslovak Government to fulfil their obligations in respect of their guarantee to pay their share of the 4½ per cent. Austrian Government Guaranteed Conversion Loan, 1934–1959, entered into in the Trade and Financial Agreement signed in London by the British and the Czechoslovaks on 28th September, 1949.

The Czechoslovak Government's obligations in respect of this loan arise not from Trade and Financial Agreement with His Majesty's Government, but from the guarantee which they gave through the Trustees to the bondholders when the loan was issued in 1934. In reply to repeated protests, the Czechoslovak Government have maintained the view expressed in 1949, to the effect that their guarantee was conditional on the continued operation of certain measures of international control over the Austrian Government's finances, which have lapsed. His Majesty's Government have rejected this contention entirely, but have taken all possible steps in the course of negotiations on the subject of Austria to secure a solution of the wider problem of Austria's foreign indebtedness.

In view of the coming trade negotiations, in or about May I believe, with Czechoslovakia, will the Government try to bear this particular point in mind and do all they can to see that Czechoslovakia this time pays what it has not hitherto paid?

We will certainly lose no opportunity of pressing this particular point upon the Czech Government.

Death Duties

54.

asked the Chancellor of the Exchequer whether, in view of the representations made to him, he has any statement to make regarding the effect of Death Duties on engineering and other firms whose capital is held in a few hands.

I have received the representations to which the hon. Member refers, but so far no concrete evidence in in support of them has been produced.

Is not the Chancellor aware that the incidence of Death Duties upon these small firms in private hands both discourages them from expansion and encourages them to distribute their profits, and surely he can get plenty of evidence of that from the Midlands, at any rate.

It is precisely the lack of evidence to which my original answer referred.

Post-War Credits

55.

asked the Chancellor of the Exchequer whether he will repay post-war credits to those applicants whose needs are certified by the Assistance Board, and so save the expenditure of public money.

I have nothing to add to the reply given on the 13th November last to the hon. Member for Winchester (Mr. Smithers).

Is my right hon. Friend aware that a number of applicants for assistance need small sums occasionally for the renewal of clothing and household goods, and would it not be better to give them their own money in the form of the repayment of their post-war credits rather than to pay them out of the Assistance Board funds?

I very much doubt whether the small numbers of persons who would be able to claim post-war credits in those circumstances would justify the expenditure of effort and administrative man-power in arranging the particular scheme which my hon. Friend suggests.

Is the Chancellor aware that there is widespread anxiety on this matter on both sides of the House, and will he bear in mind when framing his Budget the possibility of reform?

If the hon. and gallant Member will study this, he will see that it is really a very narrow point.

Will the right hon. Gentleman bear in mind that this question has the further advantage that it might encourage people to accept payments from National Assistance, which at the moment many of them, for perfectly honourable reasons, are reluctant to do?

Income Tax (Recalled Reservists)

56.

asked the Chancellor of the Exchequer whether it is the intention of His Majesty's Government to subject to tax the bounty to be paid to Reservists to be recalled for service this year.

Will that principle be applied also to bounties paid to members of the Terirtorial Army going to camp?

Wages And Dividends

57.

asked the Chancellor of the Exchequer if, in view of the danger of inflation and of the evils that would result from it, he will appeal to both employees and the trade unions to reimpose the wage and dividend freeze for the next two years.

I think that the attitude of His Majesty's Government in this matter has already been made quite clear in a number of recent pronouncements, namely, that great restraint continues to be necessary both in regard to wage claims and to dividend payments.

Is not the Chancellor aware that there are large wage increases due in the next few months, that dividend increases have been made recently, and that both these things tend to make inflation come nearer and will sabotage the National Savings Movement; and cannot the right hon. Gentleman do anything more about it?

I think that the hon. Member would probably agree that I have myself expressed the views of the Government on a number of occasions. This is not an easy or straightforward matter, and it is no good rushing into it expecting to get an easy solution, but we shall keep in touch with both sides of industry on this problem and try to do everything we can to prevent any inflationary influence.

Would my right hon. Friend intimate to local authorities that it has been very provocative, particularly in the Liverpool area, that salaries to town clerks, treasurers, directors of housing, etc., have been raised by between £20 and £25 a week, and that this is very provocative as far as the dockers are concerned in the Liverpool area?

Would it not have been better to tackle the inflation at the root rather than to reimpose these controls?

I am all in favour of using every possible method of dealing with inflation. In reply to my hon. Friend, this is really a matter for my right hon. Friend the Minister of Health, but there is a limit to what a Minister can do in the way of giving directions to local authorities.

On a point of order. Mr. Speaker. May I have your assistance? My right hon. Friend has said that this is a matter for the Minister of Health. We are informed that the Minister of Health has nothing to do with it. Can we have your assistance in this matter?

I beg your pardon, Mr. Speaker. I should have said, my right hon. Friend the Minister of Local Government and Planning.

Expenditure (Economies)

58.

asked the Chancellor of the Exchequer if, in view of the additional sums required for rearmament and the restricted scope for new taxes, if he will appoint a committee to investigate what economies can be made in public expenditure on similar lines to the May Committee of 1939.

Can the Chancellor say whether rearmament can be financed without cuts in civil expenditure?

In view of the very considerable approval which is given in Conservative circles to the opinions of the hon. Member for Louth (Mr. Osborne), will my right hon. Friend take note of the sort of economies which are being called for?

International Commodity Groups

59.

asked the Chancellor of the Exchequer whether the proposed international commodity groups will have consumer and producer as well as governmental representation.

No, Sir. Governments alone will be represented on the proposed international commodity groups.

Will my right hon. Friend at least keep in close touch with industrial consumers in this country who are getting rather impatient at the slow progress of these negotiations?

No, Sir, only the Governments which are the principal producers and consumers.

May I ask my right hon. Friend whether it is intended to be a contribution to easing the tensions of the world and a contribution to the maintenance of peace to deny large parts of the world access to raw materials?

Income Tax (Allowances)

60.

asked the Chancellor of the Exchequer if he will consider increasing the amount of the deduction for Income Tax purposes which may be made under Section 22 (1) of the Finance Act, 1920, by a claimant who maintains a relative either because that relative, or because the claimant himself, is incapacitated by old age or infirmity from maintaining himself.

The hon. Member will not expect me to anticipate my Budget statement.

Will the right hon. Gentleman remember this small point when framing his Budget statement, so as to give some relief to a very hard-pressed section of the community?

Review, "Bulletin For Industry"

61.

asked the Chancellor of the Exchequer what is the cost of the review entitled "Bulletin for Industry" issued by the Economic Information Unit of the Treasury.

The cost of each issue, including distribution, is approximately £62.

Is the right hon. Gentleman aware that the January issue of this bulletin contained information about copper which was promptly contradicted by the Minister of Supply? Would he therefore make an economy by cutting publication now?

I am not aware of that, but I will certainly look into the point mentioned by the hon. Member. This particular review is. I am informed, very popular in industry and we are being pressed for additional copies.

Anglo-Egyptian Negotiations

63.

asked the Chancellor of the Exchequer if he will now make a statement on the recent Anglo-Egyptian financial negotiations.

Will the right hon. Gentleman give an undertaking that before these negotiations are concluded and any further releases are made from the sterling balances, His Majesty's Government will get an assurance on British rights in and through the Suez Canal?

British Firms, The Argentine

64.

asked the Chancellor of the Exchequer what action he has taken to ensure that British firms in the Argentine enjoy facilities for making remittances to this country.

During the negotiations in Buenos Aires in 1949, we secured certain assurances about the clearance of arrears. Moreover, the Argentine Government undertook, subject to the availability of sterling, to permit current remittances without restriction. We have spared no effort to secure the fulfilment of these undertakings, but the Argentine Government have so far failed to implement them.

When the Chancellor talks about these negotiations, is he aware that British firms have not been able to send remittances since 1949? What further action is he taking to get this particular pledge of the Argentine Government fulfilled?

I do not know what more we can do. We have pressed them continuously and engaged in discussion and, so far, have not been able to get them to fulfil the undertaking.

Gold And Dollar Reserves

65.

asked the Chancellor of the Exchequer for what reason His Majesty's Government have been heavy converters of dollars into gold in the latter part of 1950.

It has always been the policy of His Majesty's Government to hold the bulk of the reserves in gold.

If that is his policy, may I ask the right hon. Gentleman two questions; first, why he has not used any surplus dollars to repay the International Monetary Fund the sum which may become payable by His Majesty's Government and, secondly, whether he really thinks it helps the Americans at present to transfer dollar securities and thus add to their economic problems?

There is no evidence that the American Government has any objection to our pursuing our normal economic policy.

Reservists (Pay)

67.

asked the Chancellor of the Exchequer whether, in any call-up of men to the Armed Forces, he will take steps to ensure that any decision taken by His Majesty's Government to make up the balance of civil pay to the Civil Service will also extend in a similar manner to the advantage of all other employees, in view of the fact that failure to do this caused much discontent during the last war.

I would refer my hon. Friend to the answer I gave to the hon. Member for Sudbury and Woodbridge (Mr. Hare), on 28th November, 1950, to which I have nothing at present to add.

Does my right hon. Friend appreciate that any decision that is ultimately made on this will, if the Government give the lead, also affect the staffs of local authorities and the nationalised boards? Would he agree that it is undesirable in any future emergency that the sort of situation we saw in the last emergency should take place and men in the Services should be rated and taxed to make up the civil pay of people often very much better off than themselves?

I think this is an extremely complicated and difficult question, but the Government are considering it and we will make known our decision in due course.

Motor Car Taxation

68.

asked the Chancellor of the Exchequer when he proposes to rectify the present hardship on owners of cars manufactured prior to 1946 by granting them the same registration fee as for cars manufactured since that date.

Is the right hon. Gentleman aware that, with the ever-decreasing number of new cars available to the home market, this piece of legislation is causing increasing hardship to people forced to use old cars for business and private purposes?

In considering this question, will my right hon. Friend bear in mind the answer which his predecessor gave me some time ago to the effect that the inequity could be easily removed by adding only a few shillings—I think it was a pound—to the £10 charged on new cars and making it in that way a slightly increased flat rate on all cars?

Circus (Import From Germany)

69.

asked the Chancellor of the Exchequer if he has given his approval to the financial arrangements under which the Williams Circus is to be imported from Germany and established in this country, bringing with it permanent equipment such as trailers, tents and seating.

Import licences are a matter for my right hon. Friend the President of the Board of Trade. When an import licence is granted any necessary foreign currency is made available auto matically. My latest information, however, is that the circus is not to be established here and that some of the equipment which had already arrived is to be returned.