House of Commons
Monday, April 25, 1921
The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.
Private Business
ST. HELENS CORPORATION BILL (By Order)
Order for Consideration, as amended, read.
I object to the Bill being taken.
I think there may be some misunderstanding. The Amendment which is on the Paper I have agreed to accept.
Then I withdraw my objection.
As amended, considered.
CLAUSE 36.—(Power to reserve cars for special purposes.)
(1) Notwithstanding anything contained in this or any other Act to the contrary the corporation may on any occasion run and reserve carriages on any of the corporation tramways and omnibuses on any route on which the corporation are for the time being authorised to run omnibuses for any special purpose which the corporation may consider necessary or desirable provided that during the running of such special carriages or omnibuses the corporation shall maintain a reasonably sufficient ordinary service of carriages or omnibuses, as the case may be, and the corporation may also run temporary and special services of omnibuses along any route outside the borough with the consent of the local authority of the district and the road authority of any road along the route.
Amendment made: In Sub-section (1) leave out the words "and the corporation may also run temporary and special services of omnibuses along any route outside the borough with the consent of the local authority of the district and the road authority of any road along the route."—[ Mr. Grant. ]
Bill to be read the Third time.
Liverpool Mineral and Metal Storage Company (Delivery Warrants) Bill [ Lords ],
Read the Third time, and passed, without Amendment.
South Metropolitan Gas Bill [ Lords ],
Read the Third time, and passed, with Amendments.
Harrogate Gas Bill,
As amended, considered; to be read the Third time.
Earby Urban District Council Bill [ Lords ],
Falmouth Docks Bill [ Lords ],
Nelson Corporation Bill [ Lords ],
North Eastern Railway Bill [ Lords ],
Read a Second time, and committed.
Oral Answers to Questions
Peace Treaties
German Reparation
asked the Prime Minister whether His Majesty's Government have received any further communication from the German Government on the subject of reparations; whether extra British troops will be required for Germany if further sanctions are carried out; whether the German Government has sought the good offices of the League of Nations in connection with the reparations dispute; and when he proposes to explain to this House the situation and the steps contemplated by His Majesty's Government?
asked the Prime Minister whether he has any information to give the House as a result of his meeting with M. Briand with reference to the enforcement of the Treaty of Versailles; and whether he is able to state that His Majesty's Government and that of France are in entire agreement as to the line of policy to be pursued?
I had a series of informal conversations with M. Briand at Lympne on Saturday and yesterday, in the course of which we interchanged views about the position in reference to the failure of Germany to comply with the conditions of the Treaty of Versailles. M. Briand has promised in the course of the next day or two to supply the British Government with further detailed information as to the French plans and proposals. When these details come to hand, the whole subject will be considered by the Cabinet, and instructions given to the delegates who represent the British Government at a Conference of the Allied Powers which has been summoned for Saturday next to decide what further action should be taken in order to enforce the provisions of the Treaty of Versailles.
The general position of the Government was stated by me in reply to questions last week; from that attitude the Government do not intend to depart.
We understand that further proposals are being prepared by the German Government for submission to the Allies. These proposals have not yet been received. If they are unsatisfactory, His Majesty's Government will support France at the forthcoming Conference in proposals for the occupation of the Westphalian coalfield. If further coercive measures are contemplated, we shall communicate them to the House before any action is taken.
While thanking the right hon. Gentleman for his reply, and without wishing in any way to embarrass him, may I ask if it will be possible, when M. Briand's further communication is received, to make an explanation to the House before any action is taken such as is indicated for the occupation of the Westphalian coalfield; and does he see the importance of keeping the House informed and carrying the opinion of the House with him?
Certainly. I think it is very important that the House and the country should be kept fully informed as to every step which the Government proposes to take, and if a question be put down for Thursday, I may have further information to give the House.
May I take it from the right hon. Gentleman that, without knowing what the German proposals are, we are pledged beforehand to support the French Government in the occupation of the Westphalian coalfield?
I do not think I can usefully add anything to the considered answer which I have given to the House.
asked the President of the Board of Trade whether, under Section 1 (1) of The German Reparation (Recovery) Act, 1921, goods ordered in February, 1921, and imported before the 15th April, 1921, are held to be not subject to the 50 per cent. irrespective of date of payment for the goods; and, if so, is a statutory declaration giving date of order, etc., with certified copy of order considered sufficient evidence to establish a bonâ fide case?
Goods imported before the 15th April, 1921, are not subject to the Act if it is proved to the satisfaction of the Commissioner of Customs and Excise that they are imported in pursuance of a contract entered into before the 8th March, 1921. The fact that an order has been given before that date is not in itself evidence of a contract; either the order must be shown to be the acceptance of an offer from the seller, or the acceptance of the order by the seller at a date prior to the 8th March must be proved. As regards the second part of the question, I cannot bind the Commissioners as to what evidence should be regarded as sufficient, but, speaking generally, full documentary evidence of the contract must be supplied. If original documents cannot conveniently be submitted, copies sworn as true copies before a Commissioner for Oaths may be lodged.
What is the estimated expenditure that the trader has to bear in connection with these formalities?
What is the practice in the way of a contract? Is not an order placed in conformity with the usual trading custom sufficient?
As to the first question I require notice. As to the second question, an order may not amount to a contract unless it is in itself the acceptance of an order, or unless it is supplemented by the acceptance of the order.
Surely the usual trade custom is the only custom that should prevail?
I think it is a question of a very clear legal point.
asked the Prime Minister the amount which has been paid by Germany, either in gold or kind, towards the amount due under the Treaty of Versailles on or before 1st May; whether the Reparations Commission has reported that Germany is capable of paying the balance due; and, if so, whether the Report represents a unanimous or majority decision of the Commission?
The Reparation Commission on the 15th ultimo unanimously decided to inform the German Government that the maximum amount which could be credited to her towards the payment of the equivalent of 20 milliard gold marks under Article 235 of the Treaty of Versailles did not exceed 8 milliard gold marks. The Commission required Germany to pay I milliard by the 23rd March, and asked her to make proposals for paying the remainder of the 20 milliards by the 1st May. The answer to the second part of the question is in the negative, and the third part does not arise.
Captured War Material
asked the Prime Minister whether under the Peace Treaties enemy countries were required to surrender any War material captured from this country during the War; and, if so, whether such conditions have yet been complied with?
The answer to the first part of the question is in the affirmative, and, with regard to the second part, the conditions have already been complied with by Germany and Austria.
Yap Island
asked the Undersecretary of State for Foreign Affairs whether her membership of the League of Nations will make it incumbent upon Great Britain to intervene between the United States and Japan in respect of the self-determination or ultimate destination of Yap, and between China and Japan in regard to the acute differences between those nations, and the action or inaction of the said League in respect of such differences?
I am not aware of any obligation of the character suggested.
Does not anything connected with the League of Nations mean what it says?
Hungary
asked the Under-Secretary of State for Foreign Affairs whether any and, if so, what steps are being taken to see that the white terror does not extend to the Baranga when that district is reoccupied by Magyar troops?
The Allied Governments decided in December last that the Sub-Commission at Pees of the Inter- Allied Military Mission at Budapest should remain to supervise the transfer of that area from the Jugo-Slav to the Hungarian authorities.
Does that mean that we shall only have military officers in that district when taken over; is it not possible that there could be some civilians sent there to see that the White Terror does not extend to Baranga?
That question is under consideration at the moment.
In any case will special instructions be given to our military representatives?
Coal Industry Dispute
Defence Force (Recruiting Pamphlet)
asked the President of the Board of Trade whether he is acquainted with the pamphlet issued by the Board of Trade entitled The New One Hundred Thousand, written by Ian Hay; whether he can state to whom the pamphlet was issued; what was the cost of it; and what useful purpose did its publication serve?
asked the President of the Board of Trade whether any publication has been issued with his authority or at public expense by Mr. Ian Hay describing the duties of the Defence Force?
asked the President of the Board of Trade what was the cost of the recent free issue to the daily Press of an article by Mr. Ian Hay entitled The New Hundred Thousand?
I have been asked to reply to these questions. The pamphlet in question was issued to assist recruiting for the Defence Force. Arrangements for distribution had been completed before the Government decided to stop recruiting. Details of cost are not yet available, but in any case it will be well under £100. The article and copyright were very kindly presented to the Government by Mr. Ian Hay, and no expense was incurred in issuing it to the Press beyond the cost of duplicating copies.
Can the right hon. Gentleman say whether the Government accepts responsibility for the statements in the pamphlet?
I must have notice of that question.
In view of the fact that we were told here that there was no difficulty in obtaining recruits, what was the object of this publication?
Does the right hon. Gentleman think that this pamphlet, written on the lines of the original, entitled "The First Hundred Thousand," was a suitable form of appeal for recruits for a civil force raised for civil disturbance, in view of the fact that the original had a great effect on recruiting against the Germans?
Does the Government accept responsibility for the statement in the pamphlet that starvation drove many of these men into the ranks?
I am sorry I am not sufficiently familiar with the contents of the pamphlet to express any views on the subject, either in reply to the hon. and gallant Member for Hull (Lieut.-Commander Kenworthy) or to the hon. Member for Wellingborough (Mr. W. R. Smith).
Does the right hon. Gentleman say that the Government has published at the public expense a pamphlet for the statements in which the Government does not accept responsibility?
No, I made no statement on the subject.
Is the Government prepared to accept responsibility on its publication?
I have already said that any question of that kind, which is asked with a desire for an answer, I must have notice of, and I will endeavour to reply.
Rates of Exchange
asked the President of the Board of Trade if the stoppage in the coal industry has yet had any effect upon our rates of exchange with other countries; and if so, what effect it has had, and with what result, upon the general cost of living?
The stoppage in the coal industry does not appear to have had as yet any effect on our rates of exchange with other countries; and the second part of the question, accordingly, does not arise.
Peaceful Picketing
asked the President of the Board of Trade whether he has received any report showing how peaceful picketing is being carried on in connection with the coal strike; and whether it will be possible for those miners wishing to work to do so if they have adequate protection?
The methods of picketing, where it is going on, are much the same as those usually adopted in trade disputes. Protection is being afforded, where necessary, to workers engaged in safety operations. I am not in a position to give a reply to the last part of the question.
Salaries
asked the Secretary for Mines whether the managerial, supervising, and clerical staffs employed in the coal-mining industry were given notice that their salaries would be reduced in the same proportion as it was proposed to reduce the miners' wages; and whether the directors of collieries that are at present being worked at a loss propose to reduce the amount of remuneration they are receiving as directors?
I regret that I have no information on this subject.
Mines (Flooding)
asked the Secretary for Mines if any further collieries have been flooded since the 40 previously reported; and, if so, how many men had been employed in these collieries?
The number of pits now wholly flooded is 44, and the number of persons ordinarily employed at them about 16,200.
Rationing (Breweries)
asked the Secretary for Mines what ration of coal has been allowed to breweries during the present shortage; and how it compares with the ration to industrial undertakings?
Breweries are included under the heading "Industries and Businesses" in Part III of the Coal (Emergency) Directions, of which I am sending my hon. Friend a copy. The consumption of coal in premises to which this part of the Directions applies is limited to 50 per cent. of the normal weekly average, but discretion is given to local authorities to grant permits for consumption in excess of this percentage where they deem it expedient in the public interest to do so. In this connection, the attention of local authorities has been drawn to the importance of maintaining in operation food producing concerns, breweries and certain other industries. The actual consumption allowed to individual breweries must necessarily vary according to the fuel situation in the different localities, but local authorities have full discretion in the matter.
Is the right hon. Gentleman aware that at a meeting held in St. Albans on Friday last to deal with coal rationing, it was stated that while industrial concerns were to be allowed 50 per cent., breweries were to be allowed 100 per cent. and that instructions had been given to that effect, and if that statement was made will he say it was made without authority?
I have already stated that the local authorities have discretion in this matter and I have not any report as to what has been done in St. Albans. They have discretion to increase the amount in certain cases.
Are cocoa manufacturers and manufacturers of mineral waters treated in the same way as brewers?
I think all food producing concerns are treated similarly.
Will the right hon. Gentleman say whether it is the considered view of the Government that, while industries are being starved, breweries are to be allowed to receive their full quantity?
The question of rationing coal is always under consideration. I am quite prepared to reconsider any point as to supplying coal to breweries or to any other concerns.
Public Lighting
asked the Secretary for Mines what action his Department has taken in order to restrict public street lighting, shop lighting, and also all lighting used for advertisement purposes so as to save coal now used in the supply of gas and electric lighting; whether any steps have been taken to restrict the use of electricity for power purposes; whether only ordinary circulars have been issued by his Department; and whether, in view of the serious position owing to coal shortage, he proposes to take any further action?
I would refer my hon. Friend to the reply I gave on the 21st instant to the Noble Lord the Member for South Battersea. Formal Directions have been made under the Emergency Powers Act, 1920, and issued to local authorities in Great Britain. These directions deal with all the points raised by the hon. Member and I would remind him that the responsibility for their observance rests with the local authorities, who have power to prosecute in cases of disobedience. Explanatory letters emphasising the necessity for conservation of fuel have also been issued to local authorities and others concerned. The question whether it is possible to take further steps to restrict consumption is constantly under review.
Is the right hon. Gentleman satisfied that sufficient steps have been taken to reduce the lighting in the precincts of the Palace of Westminster?
I am not satisfied. I have been making representations to those in authority asking that the lighting should be reduced.
Small Consumers
asked the Secretary for Mines what arrangements his Department has made for the supply of coal for small consumers in the county of London; whether his Department has control of any stock of coal which can be handed over to local authorities for distribution; whether it is proposed to allow local authorities to commandeer stocks of any large holders of coal in order to supply the urgent and present demands of small consumers?
A special committee, known as the Metropolitan Emergency Coal Committee, under the Chairmanship of the Lord Marshall, has been set up to deal with questions relating to the distribution of coal supplies in the Metropolitan fuel area during the present emergency. This Committee, which is in daily session at the offices of the Mines Department, has already issued full directions to each local authority as to the steps to be taken to secure priority for the pressing needs of domestic consumers, particularly in the poorer districts. Arrangements have been made through the London Coal Committee, 37, Coal Exchange, E.C., under which quantities of sea-borne coal are being allocated to those districts where the shortage is most acute. The question of commandeering is under consideration, and in the meantime arrangements have been made, and will continue to be made, to get coal handed over from industrial and other concerns not engaged in essential services to supply the demands of small domestic consumers. It is much to be hoped that people with stocks of coal will voluntarily take steps to hand over coal to local coal merchants or local authorities for distribution to others in a worse position than themselves.
What is the nature of the Committee to be set up under the chairmanship of Lord Marshall? Is it a Committee representative of local interests or is it appointed by the Government?
It is a Committee appointed by the Mines Department. I shall be glad to send my hon. Friend the names.
Would the Government consider the advisability of shutting down this gas-house?
Might not surplus stocks of coal at present accumulated in public offices be disposed of among those by whom coal is urgently required, and might not use of fires in public offices for the present be dispensed with?
I do not think I can add anything to the general statement contained in my answer. In regard to the public offices, the circumstances are not the same in every case. Some have central heating systems and some have not.
Have any cases been brought under the notice of the right hon. Gentleman such as that of a public office close to my own house where fires are burning while all the neighbours are going without coal?
If any such case is brought under my notice, I shall be very glad to look into it.
Miners' Allotments
asked the Secretary of Mines whether, in view of the number of miners now locked out and of the large amount of unemployment among miners likely to continue in certain parts of the country, his Department has made or will make any proposals to the Minister of Agriculture to facilitate the acquisition by miners of allotments and small holdings round the mining villages at reasonable rents as a temporary measure?
I shall be glad to consult my right hon. Friend the Minister of Agriculture on the proposal advanced by the hon. and gallant Gentleman.
Coal Importation
asked the Prime Minister if the Government will make arrangements for the importation of sufficient coal from abroad to preserve our national industries from extinction during such time as the present stoppage of work in the coalfields continues?
I have been asked to reply. This matter, in common with all other questions relating to the supply of fuel to the people of this country, is receiving the close attention of His Majesty's Government.
May I ask the right hon. Gentleman whether he realises that thousands of factories and hundreds of thousands of poor people who are not concerned in this strike on one side or the other are suffering more than those who are concerned, and will he take some steps in the interests of the consumers to keep trade alive and to prevent suffering?
I am quite aware of that, and the Government are considering the matter hour by hour, with a view to mitigating as much as possible the hardships borne by the people of this country.
I do not wish to press it in the event of a possible settlement of the strike. [HON. MEMBERS: "Lock-out!"] I do not wish to repeat the word, but if there is no settlement of the coal stoppage, may I ask, if I repeat the question on Thursday, that something definite may be arranged by the Government by then on behalf of the consumers and others who are not concerned in the dispute?
May I ask the Prime Minister, to whom this question was addressed, whether his attention has been called to the action of the Transport Workers' Federation in telegraphing to kindred organisations in Europe and America asking them to prevent the supply of coal to this country, and whether under the Emergency Powers Act we cannot take action against these men who are trying to stop coal coming here?
( by Private Notice ) asked the Minister of Transport whether a body called the Transport Workers' Federation is endeavouring to prevent the unloading and transit of coal; and, if so, will his Department give every facility to those who are organised to maintain services essential to the community to deal with the situation?
No report has been received that coal is suspended in transit for the reason suggested. I am sure that the hon. and gallant Member and the House will agree that it is not therefore desirable to deal with the question further on a hypothetical basis.
Coal Profits (Owners' Offer)
asked the Prime Minister whether the coalowners have made any offer to forego all profits of the industry for the present or only to forego temporarily surplus profits?
I have been asked to reply. A revised offer by the owners is now under discussion between their representatives and the representatives of the miners. I will read the relevant paragraph:
"That for each month of the temporary period ascertainments shall he made upon the basis of the durable scheme; but the owners in the aggregate in any area, ( a ) shall not have any share in the surplus revenue of the area if the taking of such share shall have the effect of reducing the rate of wages in the previous month, nor ( b ) shall they have their standard profits either in whole or in part if by the taking of either the whole or part the men in their area would, on the area results for the month, be suffering a reduction in wages of more than the maximum fixed under paragraph 1 for the month."
Railways (Loss of Revenue)
asked the Minister of Transport the amount of revenue lost to the railway companies in mineral and passenger traffic through the coal lock-out; and if the Government will have to make up the loss to the railway companies?
I am not yet in a position to state the amount of revenue lost to railway companies through the present coal stoppage, and no reliable estimate can be framed of the amount involved until the companies' claims for the month of April are received. The loss will, however, fall to be borne by the Government under the railway agreements with regard to the guarantee of net receipts. The coal strike in October last resulted in a loss of £8,000,000 in respect of railway working, and this sum was made good by the Government. It will be understood by the House that although the receipts fall abruptly, the Government is called upon to pay a great deal of expenditure such as maintenance at the high standard of 1913 irrespective of revenue.
I will repeat the question on next Monday.
Profiteering Acts
Administration Cost
asked the President of the Board of Trade what is the present staff, the salaries, and the total monthly cost to the nation of the Profiteering Act Department of the Board of Trade; how many prosecutions have taken place this year under the Profiteering Act; how many convictions have been obtained; and whether, and, if so, when, it is anticipated that this Department can be closed down?
The Profiteering Act Department of the Board of Trade (including the Central Committee) employ a staff which at present numbers 81, the salaries for the month of March amounting to £2,322. The total expenditure of the Board of Trade (excluding office rent, lighting, and stationery) in administering the Acts during this month was £3,323. This includes the expenses of the Central Committee and of appeal tribunals, but not those of local committees, which I am not able to give, as they are defrayed out of the local rates. Since 1st January, 15 prosecutions have been determined, of which 11 were successful. The Acts expire on the 19th May, and the Department will be wound up as soon as possible after that date.
Trusts and Combines
asked the President of the Board of Trade whether a Bill dealing with trusts and combines has been prepared; whether it is the intention of the Government to proceed with the Bill this Session; and, if the answer is in the negative, is he aware that the Profiteering Central Committee will be dissolved in May, and that trusts and combines will be entirely free from control until the promised legislation has been placed on the Statute Book?
I would refer my hon. and gallant Friend to the answers given on this subject on 14th April to the hon. and gallant Member for Leith and the hon. and gallant Member for East Newcastle.
asked the President of the Board of Trade whether, in the interest of the consumer, it would be possible on the dissolution of the Profiteering Central Committee to maintain in one shape or another the Standing Committee that has been appointed to inquire into the action of trusts and combines; and whether he is aware that the members of this Committee are unpaid and that the maintenance of a small staff to assist them could be limited to a cost of from £2,000 to £2,500?
The Standing Committee on Trusts of the Central Committee could not usefully be maintained without the renewal of Section 3 of the Profiteering Act, 1919, as to which I would refer my hon. and gallant Friend to the answer given by the Secretary in charge of the Department of Overseas Trade to a question by the hon. and gallant Member for East Newcastle (Major Barnes) on the 14th April, a copy of which I am sending him. In reply to the last part of the question, the members of the Committee are unpaid, and I fear I cannot express an opinion on the hypothetical estimate given by my hon. and gallant Friend. The cost of the Committee on Trusts, however, may be very roughly estimated at about £1,000 a month.
Will the right hon. Gentleman say what will happen in the event of certain inquiries which are proceeding at present not having been completed by the time that the Act expires? Will the inquiry be brought to an end without a report?
The hon. and gallant Member must first recognise that I have been engaged in other inquiries for the last week or two, and that I have not had time to look into the matter.
Supposing the cost of this small staff does not exceed £2,500, would the right hon. Gentleman recommend that the Committee be continued?
I would remind my hon. and gallant Friend that I have very recently arrived from the Treasury and I cannot say that without consideration.
Trade and Commerce
Imports from Germany
asked the President of the Board of Trade whether he is now able to furnish any information as to the amount of unemployment which is the direct cause of the importation of German goods; and when it is intended to proceed with the promised Bill to counteract the collapsed Continental exchanges?
asked the Prime Minister whether he is aware that much of the existing unemployment is due to the importation of goods from Germany and other countries with a collapsed rate of exchange; and if he is now in a position to make any statement as to the date when the promised legislation will be introduced?
As regards the first part of these questions, it is not practicable to single out any one factor, and attempt to estimate the amount of unemployment which is due to it. As to the second part, I would refer my hon. Friends to the answer given by the Leader of the House on the 20th April to the hon. Member for the Eye Division.
Is the right hon. Gentleman aware that under the Resolutions which he is proposing to the House a certificate is required saying that unemployment comes from the importation of goods? How is such a certificate to be provided if it is impossible to ascertain?
I think that would be a very interesting matter for debate on Second Reading.
Can the right hon. Gentleman state definitely when it is proposed to proceed with the Financial Resolutions?
My hon. Friend will recognise that in the circumstances it is very difficult to fix a date. Our programme has been very much upset by other events in different parts of the country.
Is it definitely the case that you are not going to proceed?
Is the right hon. Gentleman aware that this measure was promised very definitely as the first measure of the present Session? Does that promise still hold good?
I have a distinct recollection of that, but I think my right hon. Friend the Leader of the House explained the position before I had the honour of resuming my seat.
Key Industries Bill
asked the Prime Minister when the Financial Resolutions to the Safeguarding of Industries Bill will be taken?
But for circumstances connected with the great in- dustrial dispute, these Resolutions would have been taken directly after Easter. I cannot now fix a date for them, but we shall take them as early as possible.
League of Nations
Transit Conference, Barcelona
asked the President of the Board of Trade whether the British representative at the League of Nations Transit Conference at Barcelona had full power to sign any binding Convention if such were agreed upon; whether any such draft Conventions were agreed upon or whether the Conference only resulted in making sundry recommendations; and, if so, what were these?
The British representative signed two Conventions, subject to ratification. In answer to the second and third parts of the question, I will, with my hon. Friend's permission, circulate a statement in the OFFICIAL REPORT.
The following is the statement promised: —
Two Conventions relating respectively to Freedom of Transit by Rail and Waterway, and to the Régime of Navigable Waterways of International Concern, were agreed to at Barcelona and signed by the British delegate, subject, of course, to ratification. An additional protocol relating to navigation on national waterways was adopted for optional signature by such of the States as may desire to become parties thereto. The Conference also adopted a declaration recognising the flag of inland States. In addition, the Conference adopted a series of recommendations, to be submitted to the various States, respecting the international régime of railways and the régime to be applied to ports of international concern. None of the above instruments involve any legislation or any material change in the present practice in the United Kingdom. The text of the various documents will be published as soon as practicable.
I may add that the Barcelona Conference was convened by the League of Nations in pursuance of the provisions of the Convenant of the League with reference to freedom of communications and transit, and of various stipulations of the Treaties of Peace on the same subject.
Finance
asked the Prime Minister what percentage of the total cost of the League of Nations was borne last year and will be borne this year by Great Britain; whether all the members except Argentine, Paruguay and Salvador have paid the first contribution to the support of the League allocated to them, the percentage paid being 97·5 per cent.; and whether there is any prospect that these three states will make good their contributions?
Great Britain's share in the expenses of the League was, for the fiscal period ending 30th June, 1920, about 5½ per cent., for the second period, ending 31st December, 1920, approximately 5¼ per cent., and for the third period, that is to say, the current period, ending 31st December next, approximately 4½ per cent. It is correct that all the States members of the League, save the Argentine Republic, Paraguay, and Salvador, have paid the first contribution, and that the percentage paid amounts to 97·5 per cent. I am not in a position to reply to the last part of the question.
asked the Prime Minister if all the contracting Powers to the League of Nations have each contributed equal amounts to finance the working organisation of the same; and if schemes of international police and economic pressure have been inaugurated and accepted by all the contracting Powers?
As laid down in Article 6 of the Covenant, the expenses of the League are borne by the members of the League in accordance with the apportionment of the expenses of the International Postal Bureau. Under this arrangement the contributions of the members vary considerably. Powers of the first class are liable to 25 units, and Powers of the second class are liable only to one unit. A Commission are at present considering the question of revising the present basis of apportionment of the expenses of the League, which is very unsatisfactory. The answer to the second part of the question is in the negative.
Anglo-Japanese Treaty
asked the Prime Minister whether the British Government communicated the terms of the Anglo Japanese Treaty of Alliance to the Council of the League of Nations in October last, with a request for the opinion of the Council as to whether its terms required modification, in view of the obligations entered into by both States in the Covenant of the League of Nations; whether the Council of the League have yet considered this request; if so, has a reply been sent; and whether a statement of the views of the Council will be published before the time comes when the Treaty must be continued or denounced this year?
The only communication which has passed on the subject with the League of Nations is the joint communication addressed to the Council of the League in July, 1920, by the British and Japanese Governments, to the following effect:
"The Governments of Great Britain and Japan have come to the conclusion that the Anglo-Japanese Agreement of the 13th July, 1911, now existing between the two countries, though in harmony with the spirit of the Covenant of the League of Nations, is not entirely consistent with the letter of that Covenant, which both Governments earnestly desire to respect. They accordingly have the honour, jointly, to inform the League that they recognise the principle that if the said Agreement be continued after July, 1921, it must be in a form which is not inconsistent with that Covenant."
This communication was duly acknowledged at the time, and does not appear to call for any further reply.
On what date does the Anglo-Japanese Treaty have to be denounced this year if it has to be denounced this year?
Will my hon. Friend give me notice of that question?
Would the hon. Gentleman mind replying to the last part of the question?
I am not in a position to answer that.
Transport
Railway Grouping (Scotland)
asked the Minister of Transport what will be the position of railway workshops in Scotland under the railway grouping scheme; whether they will be merged into one or two centres; and, if so, will he state within what period such a development will take place?
I must ask the hon. and gallant Member to await the introduction of the Bill for the reorganisation of the railways.
Can the right hon. Gentleman say when shall we have this Bill or when does he expect to introduce it?
Very shortly, I hope.
Port of London Authority
asked the Minister of Transport if the appointment of a distinguished general to represent the Ministry of Transport on the Port of London Authority has now been made; if so, is this done with a view to his taking up a salaried position with that authority; and what is the salary it is intended to pay him?
The position as regards this appointment is still as stated in the reply to the question which the hon. Member asked on Monday last.
Can the right hon. Gentleman say if there is any dispute between the Ministry of Transport and the Port of London Authority as to the amount of the salary payable to the gentleman if the post is given to him; also if the Ministry of Transport is pressing for a salary of £5,000 per annum?
No, Sir, there is no dispute between the Ministry of Transport and the Port of London Authority and the Ministry is not pressing for any salary at all.
Is it a fact that the Ministry are suggesting the payment of £5,000 per year to this gentleman?
No Sir, it is not a fact?
I am glad to hear the right hon. Gentleman say that.
Railway Bill
asked the Minister of Transport whether he intends to introduce the Railway Bill before the Whitsuntide Recess: and, if so, can he name the day on which it will be introduced?
Yes, Sir, and it is hoped that it will be possible to introduce the Railway Bill in the week commencing 2nd May.
Official Motor Vehicles
66 & 67.
asked the Minister of Transport (1) the number of official and service motor vehicles in use on the 31st March, 1919, 1920, and 1921, respectively;
(2) who is responsible for the Regulations under which official and service motor vehicles are run; whether in all cases an accurate record is kept of the total mileage run, the consumption of petrol, lubricating oil, tyres, general stores, etc.; and what are the various grades of workers in official and service garages, together with their wages?
The only information which I have available is that relating to the Government pool of passenger motor-cars for civilian Departments in London, which, in order to secure economy, was placed under the control of the Ministry of Transport on 12th January, 1920. The number of cars in the pool on 31st March, 1920, was 27. By the operation of the pool this number was reduced to 12 in June, 1920, and to three in November, and to none on 13th January, 1921. As to cars in other Departments, I would refer by hon. and Noble Friend to a reply given on the 21st February to the hon. Member for Thanet.
Ireland
Crown Forces (Casualties)
asked the Prime Minister whether, since the institution of the auxiliary division of the Royal Irish Constabulary, the casualties inflicted upon soldiers and police have been reduced or increased; and whether, in view of the results obtained, he can state when he expects these crimes will be stopped?
There have been more casualties among soldiers and police in the nine months following July, 1920, than in the nine months preceding. In answer to the latter part of the question, I regret I cannot fix any date for the cessation of these murderous attacks on the gallant forces of the Crown.
Murder, Limerick
asked the Prime Minister the nature of the independent public inquiry which he is prepared to institute to investigate the murder of Lord Mayor O'Callaghan, of Cork?
I presume the hon. and gallant Member refers to the case of the late Alderman O'Callaghan, of Limerick. I explained fully on the 11th instant, in reply to the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy), the nature of the tribunal which the Government is prepared to set up, if it is clear that those who believe that they have further material evidence to bring will be prepared to submit it.
Will the Court of Inquiry include an English judge or somebody in such a position?
If the hon. and gallant Member will refer to the question which I have mentioned, he will find that all that ground was covered, and covered very fully.
Prime Minister's Letter
asked the Prime Minister whether, in further elucidation of the matters discussed in his reply to the Bishop of Chelmsford, he is now in a position to state whether between the months of June and October last, inclusive, any proposals for the initiation or continuance of the policy of reprisals in Ireland were laid before the Cabinet or any section of the Cabinet; whether such proposals were discussed; and whether any decision upon the subject was given or any form of sanction extended to such a policy?
It is not customary to publish Cabinet discussions.
Can my right hon. Friend say whether there is any truth in the report that Lord Derby has been in Ireland with regard to negotiations?
The Bishop of Chelmsford is the person mentioned in the question.
May I ask the Prime Minister whether he still refuses to deny the allegation that the actions which he now describes as deplorable excesses were originally authorised and sanctioned by the Government?
That does not arise out of this question.
Can you deny it?
Why should the Government always be afraid to speak the truth?
Why should the Noble Lord always be rude?
Reprisals
asked the Prime Minister whether he is aware that the "Times" newspaper on 20th April last charged His Majesty's Government with having deliberately instituted a policy of counter terrorism in Ireland, and having condoned general excesses on the part of the agents whom they employed to carry it out; that similar accusations are constantly being made in the Press and from platforms in this country, and in practically the entire foreign Press; and whether, in the event of the Government being in a position to refute these charges, he will institute proceedings with a view to freeing His Majesty's Government from the stigma which it must bear throughout the world until an effective refutation of these charges is adduced?
If proceedings were instituted to refute every charge brought by the "Times" newspaper against His Majesty's Government, the business of the Courts would be hopelessly blocked.
Is it not the fact that the Government is afraid to institute proceedings?
Dail Eireann (Communications)
asked the Prime Minister if his attention has been called to statements in the Press that certain hon. Members of this House, including the Noble Lord the Member for Horsham (Earl Winterton) and the hon. and gallant Member for Bury St. Edmunds (Lieut.-Colonel W. Guinness), have been in communication in Dublin with the Dail Eireann during the week ending 16th April; whether he is aware of such communications between the hon. Members and persons whose arrest is sought by His Majesty's Government; and whether the hon. Members consulted His Majesty's Government before entering into communication with the government of the insurgents in Ireland?
Before the right hon. Gentleman answers this question, may I be allowed to make a personal explanation at the usual time?
I can only say that I know nothing of such communications.
May I ask if this means that these communications have been going on altogether without the knowledge of His Majesty's Government, and would it not be much better if these communications were made direct, and proper negotiations were entered into?
Week-End Casualties
( by Private Notice ) asked the Chief Secretary for Ireland if he can now give an account of the mortality for the week-end just closed; and also may I ask if he has any further particulars with regard to the killing of two men in Belfast, apparently by the forces of the Crown?
The total number of casualties during the last few days have been four police killed and seven wounded, three soldiers wounded, and three civilians killed. Two cadets were killed in Belfast, and two civilians named Duffin. I am still awaiting particulars as to the latter occurrence.
Will the Government consider the advisability of increasing the auxiliary police in Ireland by at least three times the present number?
Questions
Secretary of State for Air
asked the Prime Minister if he is aware that in the Air Force (Constitution) Act of 1917 it is laid down that the President of the Air Council shall be one of His Majesty's principal Secretaries of State; and if he will explain why the Minister for Air is not a member of the Cabinet?
The Act of 1917 does not prescribe that the Air Minister should be a member of the Cabinet.
May I ask the right hon. Gentleman if he does not think it very desirable that he should be a member of the Cabinet, in view of the fact that this service has had to struggle for its very existence with the Army and Navy?
Central Control Board (Liquor Traffic)
asked the Prime Minister whether he is aware of the uneasiness caused by the continuance of the Regulations of the Liquor Control Board and the non-fulfilment of repeated promises; and will he state definitely when the Regulations will be withdrawn?
asked the Prime Minister if he will now fulfil his promise to remove the war-time restrictions on clubs; and if he is aware of the misgivings engendered in the minds of working men throughout the country by the non-fulfilment of the definite promise given when the restrictions were imposed that they should be removed at the conclusions of hostilities?
I can add nothing to the very full statement made in Friday's Debate by the Attorney-General.
May I ask the right hon. Gentleman whether it is true, as stated in the newspapers, that it is in contemplation to increase the hours of opening from 10 to 11 at night; is he aware that there is a very large body of public opinion opposed to any action of that kind; and will he give an opportunity for discussion in the House before it takes place?
Is the right hon. Gentleman aware that the "soft answer" of the Attorney-General did not altogether "turn away wrath"?
Soviet Propaganda, India
asked the Prime Minister whether his attention has been called to a report appearing in a responsible Indian journal to the effect that the frontier attacks on British convoys by tribesmen are financed by Soviet money distributed by a well-defined system across the western portion of Waziristan; and whether, in the event of this report being substantially accurate, he will inform the House what steps it is proposed to take in regard to the Trade Agreement recently concluded with the representatives of Soviet Russia?
My attention has been called to the report referred to. I am not in a position to make any statement as to its accuracy, but inquiries are being made. I would, however, refer my hon. and gallant Friend to the answer which I gave on Thursday last to a question by my hon. Friend the Member for Newcastle North (Mr. Doyle).
Federation of British Industries
asked the Prime Minister whether he has received a communication from the chairman to the Federation of British Industries asking him to receive a deputation from that organisation; whether the interview has been granted; if so, will he state the general nature of the matters which the deputation introduced; and, having regard to the public importance of the questions which the communication suggested should be raised, whether he will arrange for a Report of the proceedings being published on lines similar to the interviews which have taken place upon the coal dispute?
On the 15th of March, I received a communication from the President of the Federation of British Industries asking me to receive a deputation in regard to the present position of British industry. I replied on the 16th March, saying that I hoped to be able to do so after Easter. In view, however, of the present industrial situation, and the consequent pressure upon my time, it has not been possible for me to receive the deputation. The remainder of the question does not, therefore, arise.
Surplus Government Property (Anvils and Vices)
asked the Prime Minister whether he has received a letter from the secretary to the Anvil and Vice Traders' Association, pointing out that the present sale of anvils and vices by the Disposal Board is having a prejudicial effect upon the employment in that industry; and, if so, whether he proposes to take steps to suspend the sales until employment in the industry becomes normal?
I have been asked to answer this question. I am advised that a letter has been received by the Disposal and Liquidation Commission. The whole of this class of material, together with other factory consumable stores, were sold in March, 1920, under a comprehensive contract of sale. The purchasers offered the Anvil and Vice Traders' Association the opportunity of buying all anvils and vices, but the parties were unable to come to satisfactory terms. I regret that I am unable to take the steps suggested in the last part of the question.
Austria and Germany
asked the Prime Minister whether he is able to inform the House as to the extent of the campaign now being carried out in Austria, and particularly in the Tyrol, for the purpose of advocating union with Germany; and whether any protests have been made either in Berlin or in any of the capitals of the various German States upon this subject?
There is undoubtedly a considerable agitation in the Tyrol in favour of union with Germany, and this agitation has been countenanced by the principal Tyrolese authorities, who, against the wishes of the Federal Austrian Government, decreed a plebiscite on the question. I understand that the French Minister in Munich has addressed a protest to the Bavarian Government on the subject. His Majesty's Government have not seen fit to make any formal representations, mainly for the reason that, even though the plebiscite were to result in favour of union, that could not affect the position, which is that, under Article 88 of the Treaty of St. Germain, the independence of Austria is inalienable without the consent of the Council of the League of Nations.
May I take it from that answer that His Majesty's Govern- ment is carefully watching this movement both in Austria and South Germany?
indicated assent.
Members' Speeches (Publication)
asked the Prime Minister what precedents there are for issuing at the public expense the speeches of Members of Parliament?
I have been asked to reply. There has not been time to look up precedents, but in any case it is considered that the occasion warrants the creation of one.
Is it not a fact that the speeches of Members are published each day, and is it not also a fact that a member of the hon. and gallant Member's own party easily holds the record for the amount of space occupied in the OFFICIAL REPORT?
Trade Unions
asked the Prime Minister whether, in view of his announcement that the Government does not intend to propose the repeal of the Trades Disputes Act of 1906, he will yet consider the wisdom of introducing legislation which, whilst safeguarding the trade unions in the special privileges allowed to them for the purpose of collective bargaining, will prevent those privileges being abused to facilitate revolutionary action or to thwart the will of the people as expressed by Parliament; whether some action of this sort is necessary in the best interests of the trade unionists themselves, who otherwise may be misled into following a course of action the ultimate effect of which may be to put trade unionism in the position of being an organisation hostile to our democratic institutions?
I can add nothing to the reply which I gave on the 18th instant to questions by my hon. Friend the Member for Putney (Mr. S. Samuel) and my hon. and gallant Friend the Member for Dulwich (Sir F. Hall).
Is it not the duty of Parliament to protect the mass of the workers from the plans of the revolutionaries?
Civil Service (Women)
asked the Prime Minister whether he can now say when the time promised for discussing the Regulations admitting women to the Civil Service will be given?
I regret that it is not possible at present to name a definite date.
Home-Grown Wheat (Grants)
asked the Prime Minister if he is aware that a gratuity at the rate of 25s. a quarter is being given out of moneys taken from the trading account of the Wheat Commission to British millers for each quarter of British-grown corn milled by them; that these gratuities are intended to be given up to 31st August, 1921; and what it is estimated will be the total amount of the gratuities given?
As regards the first part of the question, I would refer the hon. and gallant Member to the statement made on 19th April by my right hon. Friend the Minister for Agriculture. In reply to the last part of the question, the terminal date is 13th August, and, since the total amount of the grants depends upon the course of world prices, it is impossible at present to name a figure.
asked the Prime Minister if the surplus, if any, on the trading account of the Wheat Commission arises out of the difference between the price paid by the Wheat Commission for the wheat purchased by them and the price charged by them on its resale; and, if so, by whose authority any part of such surplus is being distributed in gratuities to British millers?
The answer to the first part of the question is in the affirmative, and to the second part, that the grants referred to are not gratuities to millers, but payments in redemption of a pledge given in March, 1920, to growers of home-grown wheat. The charge accordingly would appear properly to fall upon the trading accounts of the Wheat Commission.
Electoral Register
asked the Lord Privy Seal whether he is aware of the reply given by his predecessor last Session on the 15th November, 1920, to a question as to doing with one register of electors a year for five years in the interests of economy and of the approval of the suggestion expressed by Members of the House of all parties; and whether he will introduce a Bill at an early date to give effect to this reform?
The answer to the first part of the question is in the affirmative. The relationship of the annual cost of registration to the economy which might be effected at the adoption of the proposed system involves far more complicated considerations than at first appeared; the whole matter is still under the close consideration of His Majesty's Government.
Will the right hon. Gentleman consider the application of a spring supplementary register consisting only of those who make and sustain claims, instead of having a separate register?
Yes, that is under consideration.
Is this the time for adding to the number of unemployed men in this country?
I should have thought not.
Then why consider it?
Passports and Visas
asked the Under-Secretary of State for Foreign Affairs whether he has received information from Washington substantiating recent statements that the United States Government has decided to dispense with the necessity of passports for American citizens leaving or returning to their country?
Under an opinion of the United States Attorney-General the Passport Control Act has been terminated by a joint resolution of Congress on 3rd March, in so far as it relates to United States citizens entering or leaving the United States, and to aliens leaving that country. It is still, however, in operation as regards aliens entering the United States.
Is the hon. Gentleman inclined to say to our own authorities: "Go ye and do likewise"?
asked the Under-Secretary of State for Foreign Affairs whether British visas are only issued to Finns desiring to visit this country provided their visit is not objected to by the agent of the Finnish Government in this country, Mr. Donner; whether this permission has ever been refused; and, if so, in how many cases within the last two years?
The answer to the first part of the question is in the negative, and the remainder of the question does not therefore arise.
Are we to be assured from that that the Finnish agent over here has no say at all as to whether visas should be issued to Finns desiring to come to this country?
Yes, Sir, that is what my answer means.
Mexico
asked the Under-Secretary of State for Foreign Affairs whether the Government has yet recognised the Government of the United States of Mexico; and, if not, whether he can assure the House that the policy of the Government is in no way influenced by the policy of the United States of America in the matter?
There has been no change in the situation since the date of the reply returned to the hon. and gallant Member on 1st March.
Will the right hon. Gentleman take into consideration the fact that this country of Mexico formerly was to us a great exporting outlet, and will he not take some action to induce the United States Government to put an end to this procrastination in the recognition by them and ourselves of the Mexican Government?
Is my hon. Friend not aware that the most serious prejudice has resulted, and is resulting, from this continued policy of the Foreign Office, and may I ask if he has not seen within the last few days a pledge or manifesto issued by the President of Mexico to foreign nations saying that their obligations will be met and that foreign claims will receive every kind of justice and fair treatment; that being the case, what are the mysterious influences at work in our Foreign Office preventing the recognition of the Mexican Government?
There is no mysterious influence at work, and I can assure hon. Members that this matter is engaging daily the earnest attention of the Foreign Office.
Will the hon. Gentleman say whether that mysterious official, the Chargé des Archives, is still living in the Legation at Mexico City?
I do not know why my hon. and gallant Friend refers to an admirable member of the Foreign Office Service in those terms. He is still engaged in the discharge of his duties in Mexico.
Is this official, this Chargé des Archives, the only official so employed by His Majesty's Government?
He is so employed by His Majesty's Government.
Is he the only Chargé des Archives in the Diplomatic Service?
No, I do not think that is so.
Apart from the question of a certain official, why cannot we again get on with our export trade with Mexico, by steps being at last taken to recognise the Mexican Government?
My hon. Friend must be aware of the great difficulties that have arisen in connection with our relations with Mexico. These difficulties have not yet altogether cleared away.
Communist and Bolshevist Propaganda
61, 62, and 63.
asked the Lord Privy Seal (1) if he has been able to ascertain whether any considerable number of people whose works have closed down, or whose means of livelihood have been taken away from them through bad trade, are receiving weekly grants from Communist organisations on condition that they join such organisations and actively advocate the Communist policy.
(2) if his attention has been drawn to the considerable sums of money now being spent in Bolshevist propaganda in the United Kingdom; if he can state how much this totals per month, as well as the number of paid Bolshevist agents, and how much they average in amount; where the money comes from; and how much is contributed by the Russian Government.
(3) if he has any knowledge of the existence of a flying column of revolutionaries in this country who are despatched to centres where industrial or other trouble is threatened in order to foment disaffection and stimulate the committal of outrages; and, if so, what steps he has taken to counteract such a policy?
I have made enquiries and I find that there is nothing which I can usefully add to the replies already given by my hon. Friend the Under-Secretary of State for Home Affairs, except to repeat the assurance implied in those answers that the Government will continue to take steps to deal with any illegal activities or breaches of the law.
Is the right hon. Gentleman satisfied that the present law is sufficient to deal with this great menace to the Constitution, and if it is, can he give the House an assurance that it will be rigorously applied; and if not, will he give the House an assurance that immediate legislation will be introduced to deal with this menace?
As my hon. Friend says, the matter is under the consideration of the Government; as to the law, I do not think it is sufficiently strong at present.
Does not the right hon. Gentleman think that putting questions down on the Order Paper day after day is giving to these gentlemen in question a free advertisement, and would it not be much better to let them go on digging their own graves? [HON. MEMBERS: "No!"]
Will the right hon. Gentleman give the House an assurance that legislation will be introduced as soon as possible?
Yes; if we consider it necessary, it will be introduced.
National Expenditure
asked the Lord Privy Seal whether he is now in a position to inform the House as to the decision of the Government in regard to the re-appointment of the Select Committee on National Expenditure or the appointment of an Estimates Committee?
The informal Committee to which the Prime Minister referred on Monday last in answer to a question by my hon. and gallant Friend the Member for Lewisham East has now completed its deliberations, and as soon as their recommendations have been considered by the Government my right hon. Friend the Leader of the House will make a statement to the House.
Cattle Feeding-Stuffs (Importation)
asked the Minister of Agriculture whether he is aware of the anxiety at present felt amongst many agriculturists in this country on account of the importation of cattle-feeding stuffs from Belgium, where rinderpest is reported to be prevalent; and whether, in view of the danger to British livestock, he can see his way to make regulations prohibiting such feeding-stuffs being admitted into the United Kingdom till the risk of infection from rinderpest no longer exists?
The Ministry is aware of the importance of prohibiting the importation of cattle feeding-stuffs when any risk of infection from rinderpest or other disease exists. When rinderpest broke out in Belgium in the autumn of last year, the Ministry published an Order prohibiting the importation of feeding-stuffs and animal products from Belgium. The disease having been completely eradicated from that country, the Order was withdrawn as from the 6th April, 1921. The risk of infection does not now exist, and there would seem to be no reason for re-imposing the Order.
Unfit Horses (Export)
asked the Minister of Agriculture whether the Board have considered the desirability of the imposition of an export tax on horses leaving the United Kingdom for the Continent, with a view to securing the slaughter in this country of the large number of worn-out horses now exported for slaughter abroad for food purposes?
The Ministry has no power to impose an export tax, and it is not regarded as consistent with public policy to prescribe licence fees far in excess of the cost of examination, such as is required the Exportation of Horses Act. The imposition of such fees would be, in effect, a tax. The Ministry also considers that any tax of the kind would operate to the prejudice of the export trade in horses for working purposes, and it is endeavouring to secure the object desired by the hon. Member by negotiations with the Governments concerned, so as to secure the slaughter in this country of horses for food.
Have arrangements been arrived at with every other European country except France for the slaughter in this country of horses exported for food?
No, Sir, not at present. An arrangement has been concluded with France, and we are in negotiation with Belgium and Holland.
Will my right hon. Friend promise to take up this matter and see if the importation of these lame horses can be stopped immediately, and, if legislation be necessary, will he introduce it at the earliest possible moment?
If my hon. and gallant Friend had heard the answer I gave last week, he will see that I have taken very vigorous steps already to prevent the exportation of horses unfit for travel.
Why not put a tax on horses over a certain age that will not interfere with legitimate trade?
That question is one of ascertaining the age!
Rat Skins
asked the Minister of Agriculture whether he has yet been able to find any commercial use for rat skins; and whether it has been possible to develop the industry of the manufacture of gloves for motor drivers out of these skins?
On a small scale rat skins have been utilised for the manufacture of gloves, slippers, etc. In the meanwhile, certain experiments are being undertaken by the rat officer of the Kent County Council, but up to the present it does not appear that they have been carried sufficiently far to enable any conclusion to be drawn as to the commercial value of rat skins.
Can the right hon. Gentleman hold out any hope that rat killing can be made a commercial success?
Is there any truth in a recent report to the effect that the files in his department which deal with the extermination of these nuisances have been largely eaten by rats?
With regard to the last part of the question, I think that is a myth entirely. As for the first part, we are taking every possible step to place the use of rat skins on a commercial basis.
Can you not use them for making coupons?
Fisheries Bill
asked the Minister of Agriculture if he can now give any information as to whether there is a prospect that the Bill to amend and codify the existing Salmon and Fresh water Fisheries Acts, and which the Chancellor of the Exchequer stated was being considered, will shortly be introduced?
asked the Minister of Agriculture whether the proposed Bill to amend and codify the Salmon and Freshwater Fisheries Acts will be introduced in the present Session; and whether, in view of the present position as regards the pollution of rivers and the destruction of fish, he will expedite its introduction?
The matter to which these questions refer is still under consideration, but I am unable, both for reasons of economy and pressure of time, to hold out much hope that this Bill or the Sea Fisheries Bill can be passed into law this Session. If it is decided that these Bills cannot be proceeded with this year, I shall endeavour to introduce a short Bill to enable Boards of Conservators to increase their licence duties, which is a matter of great urgency.
Unemployment (Pay Forms)
asked the Minister of Labour if he is aware of the discontent in the minds of thousands of men and women who are unemployed in consequence of the length of time that it takes before the various officials of trade unions receive the authority-to-pay forms; if he is aware that in many cases it has been at least four weeks before the forms have been received; and if he will take action in the matter?
My hon. Friend will realise that the pressure of work at the Exchanges is just now very great, but every possible effort is being made to eliminate avoidable delays in issuing authorities to pay. In certain cases delays are unavodable owing to the necessity for inquiries and verification of facts. Delay is not infrequently caused by the failure of the workmen concerned to make proper claims. In order that workmen wishing to make claims through their association may know exactly how to proceed, I propose to issue at an early date a leaflet containing hints for their guidance.
Is the hon. Gentleman aware that many of these men who are entitled to unemployment pay have had to wait sometimes for eight weeks before they get payment, and can he expedite the machinery in order to avoid this inconvenience?
I am aware that there has been delay in some cases. I should very much doubt whether the delay has been as much as eight weeks. Our attention has now been directed to it, and we shall do everything we can to avoid delay on our side if the workmen will give us their assistance.
Is the hon. Member satisfied that some of the officials of the Employment Exchanges are not deliberately preventing the trades unions from working the Act?
If that suggestion is seriously made it is somewhat serious. If my hon. and gallant Friend will give me any particular cases I will have them inquired into at once.
India
Provincial Council Elections
asked the Secretary of State for India whether he can now give the figures showing the number and proportion of electors who voted at the recent provincial council elections in India?
The papers are being formally presented to-day and will, I hope, be available at the end of the week.
Allahabad University
asked the Secretary of State for India if his attention has been called to the reports sent in by the examiners of the Allahabad University as to the poor quality of work done by candidates for the various examinations in almost every subject, and the ignorance and inability on their part to answer questions requiring intelligent thought; and whether steps will now be taken to limit aspirants for a university course to those students who show some disposition and ability to profit by the instruction afforded?
My right hon. Friend has seen an article in the Press to the effect stated, but not the actual reports of the examiners. He is unable therefore to say whether the unfavourable extracts quoted afford a fair sample of the examiners' opinions as to the general quality of the students' work. As regards the second part of the question, the hon. and gallant Member is no doubt aware that this problem was one of those that engaged the special attention of the distinguished Commission presided over by Sir Michael Sadler, whose Report was issued in 1919 and presented to Parliament, and has been receiving the careful consideration of all local governments in India, and it will be for Ministers, subject to Statutory Rules, to take whatever action upon it they may judge necessary.
Mr. Speaker's Retirement
announcing his intention of retiring from the Chair, all the Members being uncovered, said:
I hope the House will allow me, before we proceed with the business of the day, to intervene for a few moments for the purpose of announcing to the House what is already quite an open secret, namely, my desire to retire from the high and dignified position to which the House elected me some two years ago. The House may possibly remember that on that occasion, about two years ago, or rather more, when the House met I was anxious to retire from my Parliamentary duties, but, under considerable pressure, I accepted the invitation of the House to resume once more the position of the Speaker. I then said that I was prepared to continue in the service of the House for one, or possibly two, years. Those two years have now elapsed, and I feel that the time has come for me to retire from this important post.
It is now almost 38 years since I first entered this Chamber as Member for Rutland. There are now only remaining in the House, I believe, four Members who were colleagues of mine in August, 1883, when I entered this Chamber. In the year 1895, the House was pleased to appoint me Chairman of Ways and Means, and I held that office for ten years. In 1905, the House unanimously elected me as its Speaker. During the 16 years that have elapsed since then, on no fewer than five occasions has the House done me the very great honour of electing me unanimously to the Chair. I think that such an honour in recent times—although it has been equalled—has never been surpassed; and I can assure the House that I feel the honour most deeply, and am very grateful to it for the confidence it has so repeatedly reposed in me. But time is passing away somewhat too rapidly. We have been through very troubled and anxious times in this House and in the country, and the troubles and anxieties of the Chair have not diminished. They have, in fact increased. During the 16 years that I have held this position, there have been only three years in which there has not been an Autumn Session; and the policy which the House adopted of sending important Bills to Standing Committees upstairs has not relieved, but has rather increased, the labours and anxieties of the Chair.
I have now already passed the age at which we expect our civil servants to retire, considering presumably that the best work has been obtained from them, and that the time has come when their duties should devolve upon younger shoulders. I feel myself—although, thank God, in good health, and I trust also mind—that my senses are not so alert as they were, and that possibly what I am gaining in experience I am losing in alertness. But in addition to these personal reasons—these 66 personal reasons to which I have referred—there is another, and I think a stronger, reason which should commend to the House my resolution.
This House has now been in existence for some months over two years. It has nearly half run its course. In the ordinary circumstances, and if no accident happen, the House may expect to have another two years or thereabouts of life. It has been the practice of this House, certainly during the last century, to re-elect, at the commencement of the new Parliament, the Speaker of the former Parliament, provided he has shown aptitude for the high duties placed upon him. I believe that it will be in the interests of the House—not of this House only, but of the House of Commons generally—that my successor, whoever he may be, should have some experience of the duties and responsibilities of the Chair before he is called upon to undertake these important duties in the next Parliament; and certainly my last three, and I think four, predecessors have been elected, not at the commencement of a new Parliament, but during the course of a current Parliament. That presents many advantages, and I think, indeed, it would hardly be fair either to the new Speaker or to the new House that they should both commence their careers simultaneously. Therefore, whilst expressing great regret at my separation from the House—in which I have made a great many acquaintances, and, I also trust, a great many friends—I must crave once again what has been frequently given to me in the past, namely, the generosity and indulgence of the House, and ask the House to allow me most respectfully to submit to them my resignation from this Chair.
The House will have heard with unfeigned regret the announcement which you, Sir, have just made, and that regret will be none the less acute that previous warning has allowed us to accustom ourselves to the idea. I am sure the House would wish formally to give expression to the deep gratitude which men of all sections and all parties in this House feel to you, Sir, for your conduct in the Chair, and for that reason I will only now give notice that to-morrow I shall move the two following Resolutions:
The Motion of which the Prime Minister has just given notice will afford the House to-morrow a better and fuller opportunity of expressing its opinions and its feelings on the moving announcement that you have just felt it your duty to make from the Chair. I therefore, for the moment, content myself with expressing, as I know I do, the feelings of every man in every quarter of the House by saying that we have heard that announcement with the most profound regret—for what it means to the House of Commons as a whole, and, individually, as Members of this House, everyone of us—with a sense of impending personal loss.
Business of the House
Ordered,
"That the Proceedings of the Committee of Ways and Means and the Proceedings on Report of Treaty of Peace (Hungary) [Expenses], on the Treaty of Peace (Hungary) Bill, and on the Public Health (Tuberculosis) Bill be exempted at this day's Sitting from the provisions of the Standing Order (Sittings of the House)."—[ Mr. Chamberlain. ]
Private Bills (Group D)
The CHAIRMAN OF WAYS AND MEANS informed the House that the Committee on Group D of Private Bills not being appointed to meet until To-morrow, the parties promoting the Lochaber Water Power Bill, which was set down for consideration on the first day of meeting of the Committee, had appeared before him and proved that the evidence of Sir Robert Greig, of the Board of Agriculture for Scotland, was essential to their case, and that his attendance could not be procured without the intervention of the House.
Ordered, That Sir Robert Greig do attend the Committee on Group D of Private Bills To-morrow, at half-past Eleven of the Clock.
Message from the Lords
That they have passed a Bill, intituled, "An Act for altering the rates for the supply of water by the Eastbourne Waterworks Company; and for other purposes." [Eastbourne Waterworks Bill [ Lords. ]
EASTBOURNE WATERWORKS BILL [Lords]
Read the First time; and referred to the Examiners of Petitions for Private Bills.
Orders of the Day
Ways and Means
Considered in Committee.
[Mr. WHITLEY in the Chair.]
Financial Statement
For reasons with which the Committee is familiar, I rise to open, not my own Budget, but the Budget of my successor in the office of Chancellor of the Exchequer. There is, I confess, a certain fitness in the fact that I should have to deal with the results of the past year for which I was responsible, but I am anxious that the Committee should realise from the outset that the Budget which I am about to unfold is the Budget of my right hon. Friend (Sir R. Horne), and, though he may not be responsible for all that is disagreeable in it, for he is the heir of many onerous obligations, whatever credit attaches to the proposals is his and his alone. I have seen it stated in some quarters that it would be easy for me to make the statement, because, in fact, I had prepared the Budget. That is not true. At the time I left the office I had not had the Estimates of Revenue for the current year before me, and, though I was naturally aware of the main problems which would be presented in the current financial year, I had taken no decisions upon any of them, except that decision announced on behalf of the Government in the month of February not to renew the Excess Profits Duty. Members of the Committee have in their hands, I think, the published figures of the past year. It has been one of the most remarkable years in our financial history. At the time that I framed the Budget trade was extraordinarily prosperous, profits were large and growing, and the prospect was bright and rosy. Upon that sunny prospect there descended, with a suddenness and completeness, I suppose, never quite equalled in our financial history, and certainly never equalled in recent years, the deep depression of trade which took place in the autumn.
Revenue and Expenditure, 1920–21
Under these circumstances, it is more than usually interesting to compare the out-turn of the year with the anticipations which I had formed before its commencement. How has the Budget of last year stood the test? I estimated an expenditure of £1,184,102,000. The actual expenditure was £1,195,428,000, or an excess of £11,326,000. I estimated the revenue at £1,418,300,000, and the actual revenue received was £1,425,985,000, an excess above the Estimate of £7,685,000. I budgeted for a surplus of £234,198,000, and we realised a surplus of £230,500,000, a variation of only 1·5 per cent. upon the Estimate. When my right hon. Friend and successor is told that he is unduly optimistic and has criticism showered upon him, he may comfort himself, as I did under the adverse criticism of last year, with the knowledge that no Finance Minister in the world has wiser or more prudent advisers to help him to frame his Estimate than is possessed by the Chancellor of the Exchequer of this Kingdom.
Expenditure, 1920–21
I will invite the attention of the Committee to a few details of both revenue and expenditure of the past year. I take first the expenditure. The Consolidated Fund Services show an excess of £2,000,000, which is more than accounted for by the increased tender of Victory Loans for Death Duties. The Supply Services show an excess of £10,000,000 due to the Army, Navy, and Air Force. The Civil Services show a substantial decrease, as I indicated in the autumn, on the original Estimates. Pensions were over-estimated £13,000,000, Loans to Dominions and Allies £12,000,000, the Ministry of Health and its Scottish and Irish equivalents £11,000,000, and £5,000,000 was saved by the termination of the bread subsidy.
Revenue, 1920–21
On the Revenue side the trade depression, and I must add the October coal strike, found immediate reflection in the figures of Customs and Excise, which failed to reach the Estimate by the huge sum of £15,000,000, a huge sum, but less than five per cent. of the Estimate. Two million two hundred and fifty thousand pounds of this drop was directly attributable to the coal strike of the autumn. Spirits fell short of the Estimate by £15,500,000, due in part to a real shortage, and in part, I think, to the temptation of higher prices on the export trade. I believe that there is now a large demand for whiskey as medicine abroad. Tobacco fell short of the Estimate by £7,000,000, and wine by £3,000,000, but beer, our national drink, exceeded the Estimate by £11,000,000. Imported motor cars, a duty very popular with hon. Gentlemen opposite, exceeded the Estimate by £1,850,000, and the Entertainments Duty produced £700,000 more than I had expected.
The Inland Revenue exceeded the Estimate on every important head but one. Income Tax and Super-tax were up £9,000,000 notwithstanding the changes and reliefs embodied in last year's Budget. Death Duties produced £2,750,000 more than was expected, and it may interest the Committee to know that of the total of £48,000,000 paid in Death Duties £19,000,000 were tendered in securities. The Budget Estimate for the Excess Profits Duty was £220,000,000. In the course of the passage of the Bill I made concessions which were estimated to cost £5,000,000; yet it yielded £219,000,000. The increase of the rate from 40 to 60 per cent. in my last Budget was estimated to produce in a full twelve months £100,000,000. Owing to the depression in trade, that Estimate now must be revised, and we cannot put the figure higher than £80,000,000. The Corporations Profits Tax alone was disappointing, but only temporarily. It produced £650,000 instead of £3,000,000, but that was due to the initial difficulty of starting the new tax and to the immense amount of other work falling upon the Revenue authorities. I think it will justify itself in the present year. Stamp Duties yielded £1,400,000 more than the Estimate.
Of other items I need mention only the Special Miscellaneous Receipts. They were about £14,000,000 below the Estimate of £302,000,000, and again that decrease may be accounted for by the depression and the lower prices at which realisations could be effected. The Committee may perhaps like to know that they included £155,000,000 receipts from the Ministry of Munitions, mainly through the Disposal Board, £34,000,000 from the Ministry of Shipping, £35,000,000 from the Ministry of Food, of which £19,000,000 were for meat and £16,000,000 for bacon, and £16,000,000 from the Board of Trade, of which £10,000,000 were for timber and £4,000,000 the surplus from the War Risks Insurance. Thus, as a result, the Budget outcome is what I stated it would be in the Debate in this House in December last. There have been great variations of detail, but its final result closely approximates to that which I had anticipated, and for which the House had hoped. The surplus of the year is, as I have said, £230,500,000. Adding to this the sum included in expenditure for the reduction of debt and sums lying in Exchequer balances, the total applied to debt reduction within the year was £259,500,000.
Debt Reductions
I will trouble the Committee with further details of the Debt reduction. The dead-weight debt on the 31st March, 1920, was £7,829,000,000. On the 31st March last, it was estimated to be £7,573,000,000—a reduction of £256,000,000, or £3,000,000 less than the cash applied for reducing the debt. That, of course, is due to the influence of adverse exchanges upon the redemption of foreign debt. These figures, like those that have been given in previous years, are exclusive of the interest accrued but not yet payable on Savings Certificates. In stating them I have followed the system of previous years in including nothing in the debt figures for the additional premiums due on the maturity of National War Bonds, which would amount to £44,000,000 if all the bonds were held till maturity. Nor do the figures take account of the interest on our debt to the United States Government, payment of which, with some small exceptions, is temporarily in suspense. The amount so unpaid on the 31st March last was approximately £65,000,000 at par of exchange.
Internal Debt
Out of the total amount so applied to reduction of debt, internal debt was reduced by £139,000,000, or, allowing for the interest accrued but unpaid on National Savings Certificates, by £128,000,000. The Floating Debt, however, was only reduced by £37,000,000 instead of by the £70,000,000, which I hoped to achieve when I introduced the Budget. The reasons for this smaller reduction of the Floating Debt are, in the first place, the larger reduction of foreign debt; in the second place, the amount of maturing Exchequer Bonds which I had to meet, namely, £28,000,000; the large obligations under contract sinking funds and in respect of stocks and bonds tendered in payment of Death Duties and Excess Profits Duty; and, lastly, the failure of Savings Certificates to produce the amount of new money for which I had hoped—a failure increased by the concession which I made in the course of the year, in deference to strong representations as to the importance of the concession to their movement from the Committee of the National Savings Society, and in deference to the strong feeling of local authorities that one-half of the new money obtained in that way should be made available for local housing finance.
Foreign Debt
So much for the Internal Debt. The worst debt, however, is the Foreign Debt. Internal Debt—and this is an observation which is sufficiently obvious, though it sometimes escapes some of the critics of Government finance—does not lessen the pool of national wealth. It transfers wealth, whether in the form of interest or in the form of repayment from one pocket to another, but it does not diminish the total. Foreign Debt is a drain upon the national resources. It lowers the exchanges, it reduces our purchasing power, and it affects our world credit. Let us look, therefore, at what has been done in respect to our foreign or external debt. A year ago it stood at £1,278,714,000. On the 31st March last it stood at £1,161,560,000—a reduction of £117,000,000. I take the figures at par of exchange. We have paid off our half of the Anglo-French loan in New York, amounting to £51,370,000; and, with other repayments, we have reduced the total debt in the United States in the course of the last twelve months by nearly £75,000,000, and our debt in Canada by £20,000,000. We have paid off our debt in Japan, in Spain, in the Argentine, in Uruguay, and in Holland; and the result is that, except for comparatively small debts owing by us to the Allies—against which we can set the far larger sums in which they are indebted to us—and a generous loan of £8,000,000 made to us by the Straits Settlements and Mauritius, the only debt that we now have outside the United States and Canada is £826,000 in Sweden, which has not been paid off simply because it is not yet due. It will be paid off at its maturity this summer. In the two years since the 1st April, 1919, immediately succeeding this long and onerous War, we have reduced our external debt by £203,000,000—an immense achievement not merely not realised, but not attempted by any other belligerent country. Our huge debt, however, still dominates the situation. I shall have to refer to it more than once in the course of my observations, and I shall end with an announcement of some importance with regard to it.
Revenue and Expenditure, 1921–22
I have done with the past, and I turn to the current year. The voice is still the voice of Jacob, but the hands are the hands of Esau, and I am not unnaturally anxious when I find Esau sitting immediately behind me. The Committee will see that there are new hands at work, and that those new hands wield a vigorous broom. Critics have frequently taken exception to the form of our national accounts. In accordance with precedent and tradition they make no distinction between ordinary continuing revenue and exceptional temporary receipts; and, on the other side of the account, in the same way, they draw no distinction between ordinary continuing expenditure and exceptional and transient charges arising out of the great War. On the revenue side we have among the receipts the sale of assets acquired during the War, and the return of the capital locked up during the War in trading accounts. These assets were acquired, and the trading accounts were financed, by capital borrowed during the War On the expenditure side, we have arrears of payments arising from the liquidation of War commitments in respect of the railways, shipping, munitions, and the reconditioning of buildings occupied under War agreements. All these are as much part of our War expenditure as is our War debt itself, and would have been included in that debt if the liability in respect of which they arise had been capable of statement and adjustment when we closed that debt account. The nearer we get to the termination of these special and transient items of revenue and expenditure, the more important it is to distinguish the transient from the permanent. It is only in that way that we can obtain a true picture of our financial future, and see what it is wise to do, and what resources we can command with which to do it. My right hon. Friend desires that I should make this distinction in my statement to the Committee this year, and I propose accordingly to do so.
Ordinary Expenditure and Revenue, 1921–22
I deal first with what I call ordinary revenue and expenditure for 1921–22, and I take first the ordinary expenditure. The total Consolidated Fund services are estimated at £371,272,000, of which the Debt services account for £345,000,000—almost the whole. Supply services, omitting £65,000,000 of transitory War services which appear in the Estimates, and to which I shall refer later, amount to £602,751,000. The total ordinary expenditure, accordingly, reaches £974,023,000. What is the amount of ordinary revenue available against this charge? The Excess Profits Duty is to be discontinued, but, on the assumption that all other taxation is continued on the present basis, except for two small changes which I shall describe later, the ordinary revenue is estimated at £1,058,150,000. The non-tax revenue amounts to £94,150,000, towards which the Post Office contributes £60,000,000 and the Crown lands, sundry loans, and other miscellaneous revenue together, £34,150,000. The tax revenue amounts to £964,000,000, of which Customs and Excise contribute £323,000,000, Motor Vehicle Duty £9,000,000, and Inland Revenue £632,000,000. These figures take account, so far as we at present can, of the existing depression. Customs and Excise are placed £11,000,000 below last year's yield, which was itself, as the Committee may remember, £15,000,000 below the Estimate.
Direct Taxation
I come now to direct taxation. In accordance with the announcement already made, it is not our intention to ask the Committee to impose any additional Inland Revenue taxation for the coming year. The rates in force for Stamp Duties, Death Duties, Income Tax, Super Tax, and Corporation Profits Tax will remain undisturbed. The revenue that we expect in the current year from these sources is as follows: From Death Duties £48,000,000, Stamps £21,000,000, Land Tax and Inhabited House Duty £2,500,000, Income Tax and Super Tax £410,000,000, Corporation Profits Tax £30,000,000, and Mineral Rights Duty £500,000. Although the Excess Profits Duty will not be renewed, large sums remain to be collected in respect of past periods, and we think we are justified in expecting a receipt of £120,000,000 in the current financial year from this source. Adding the totals under the various heads we get a non-tax revenue of £94,150,000 and a tax revenue of £964,000,000, together £1,058,150,000. Bringing the two sides of the account together, we get ordinary revenue £1,058,150,000, ordinary expenditure £974,023,000, and balance of ordinary revenue over ordinary expenditure £84,127,000. I must, however, at once warn the Committee that against this balance there will be large claims which it is not at present possible to estimate. The stoppage in the production of coal affects the revenue directly, and it affects the expenditure both directly and indirectly, directly through the increased expense to which the Government is put, and indirectly, and very seriously, through the losses it involves to the railway companies, which the Government under the agreement is under liability to recoup. We cannot at present put any figure on those liabilities, but it is clear that a substantial portion of the balance of £84,000,000 of ordinary revenue over expenditure must be kept in hand to meet those liabilities.
Extraordinary Revenue and Expenditure, 1921–22
From ordinary revenue and expenditure I turn to the extraordinary or special revenue and expenditure. The special revenue to be derived from war assets, chiefly sales by the Disposals Board, is estimated at £158,500,000. Against this we set special expenditure on transitory war services estimated at £65,705,000, made up as follows:—Liquidation of war commitments by the Service Departments and of the Shipping and Munitions Departments, £27,300,000, payments under the Railway Agreements already provided in the Estimates, £30,200,000, re-vote of relief Loans and minor miscellaneous charges, £8,205,000. That makes a total of £65,705,000. We have thus under special revenue and expenditure account a balance of £92,795,000. But again there are further liabilities which have to be taken into consideration. We have still to settle outstanding liabilities with the railway companies under the war agreements, and while we cannot yet estimate the amount which will be required it will undoubtedly be very considerable. The Committee will observe that, as I have done in past years, the Chancellor of the Exchequer has taken no credit in the present Budget for the sums which we may receive on Reparations account. Such sums are overdue and I hope we are nearing payment of them, but I think that it is not wise that they should be included in the Budget until they are actually received, when they will go of course to the further redemption of debt.
Balance Sheet, 1921–22
The Committee will thus see that while, both on the ordinary and on the special accounts, as the figures at present stand, there are large balances on the right side, there are in each case considerable liabilities for which further allowance must be made. It is very difficult to know how to treat them, but let me make certain assumptions. I will assume that when these further claims have been met there may be an ultimate surplus available for debt redemption of about £80,000,000. I do not think it is likely to be much more than that figure. Included in the figure already given for ordinary expenditure, there are £23,500,000 for statutory Sinking Funds, consisting of about £2,000,000 for terminable annuities, £7,500,000 for the New Sinking Fund, and £14,000,000 for the Victory and Funding Loan Sinking Funds and Victory and Funding Loans stock and bonds surrendered for Death Duties. The total cash provision which might then be available for debt reduction on this basis would be, therefore, £103,500,000. That is, of course, very substantially below the contribution of £259,500,000 made in the year which has just closed, but circumstances have changed. Depression has succeeded to a boom in trade, and the very fact that we did so much last year, when things were going well, may be reasonably pleaded as a justification for moving more slowly in our present temporary difficulty. Can we then afford to use any part of this surplus in relief of taxation? Here I must return to the debt, for the answer to my question is supplied by the conditions of the debt.
National Debt
The total Debt is £7,573,000,000, of which Treasury Bills and Ways and Means Advances account for £1,275,000,000 and external debt, at par of exchange, £1,162,000,000. The first observation I would make is, that it is obviously desirable that we should redeem as much Debt as we can while prices, though lower than they were, still remain above the level which we expect them to reach in a comparatively short time and to maintain over future years.
The second observation I would make is that what we do is not entirely a question of free will. Whilst still Chancellor of the Exchequer I had already undertaken to repay at maturity, on 1st November, 1921, the 5½ per cent. five-year United Kingdom notes falling due on the New York market. These amounted on 31st March, 1920, to $129,000,000, but by 31st March last they had been reduced to $111,000,000, and a further substantial amount have already been bought by us in the market. I have also entered into an agreement with the Canadian bankers to repay in monthly instalments, ending on 1st April next, the remainder of our debt to them, originally $200,000,000, but now reduced to $125,000,000. These and other foreign obligations require us to provide some £80,000,000 in the current year if we are not to reborrow abroad; and if we have to reborrow, the last place I hope where the Committee will desire me to reborrow is outside the United Kingdom.
Then we have to meet our statutory obligations in respect of our internal loans. These are to provide £32,000,000 for the depreciation fund on the 4 per cent. and 5 per cent. War Loans, £14,000,000 for the sinking funds of the Victory and Funding Loans and stock and bonds of those loans tendered in payment of Death Duties and £2,000,000 for the sinking fund of Terminable Annuities. We must allow a further £65,000,000 for other War stocks and bonds tendered in payment of Death Duties and of Excess Profits Duty. Thus, in addition to the foreign obligations, amounting to about £80,000,000, there are in the current year domestic obligations, statutory and contractual, requiring the provision of £113,000,000.
I should add that the Chancellor of the Exchequer proposes to introduce provision into the Finance Bill to wind up the special Civil Contingencies Fund advances under the Civil Contingencies Act, 1919. From this and from other sources there should be an additional £15,000,000 available for the reduction of debt; but, even so, it will be clear to the Committee that the whole surplus will be required to meet these obligations, and even then will be insufficient without renewing a portion of the internal debt. The expenses and loss involved in the coal strike and the large terminal liabilities under the railway agreement make it impossible for us to do more, but common sense and prudence make it impossible that we should do less.
Forecast of 1922–23
I do not know whether I have convinced every member of the Committee, but if I have not I have another and a conclusive reason, and it is one which in any case I ought to lay before the Committee. I invite them to consider how this surplus is made up and what prospect there is of making ends meet next year if we reduce Revenue this year. I beg the Committee's careful attention to this subject, which is of great importance. Our Revenue this year is made up of Special Revenue to the extent of £158,500,000, and Ordinary Revenue, in which is included Excess Profits Duty, £1,058,150,000. The Special Revenue will be comparatively small next year. Ordinary revenue will be reduced by the much smaller arrears from the Excess Profits Duty which will then remain for collection. That much is clear, though I cannot, of course, make myself responsible for any close estimate of the Budget of 1922–23 either on the revenue or the expenditure side. I will assume that Excess Profits Duty outstanding on 31st March, 1922, will more than suffice to meet any Special expenditure in the year 1922–23, and I will treat as a windfall, properly applicable to the special reduction of debt, any surplus Excess Profits Duty over the Special Expenditure, and any Special Miscellaneous Revenue still receivable in 1922–23. Even after allowing for normal increase of revenue I cannot safely anticipate an Ordinary Revenue of more than £950,000,000 next year to meet the Ordinary Expenditure of that year.
We have to provide next year for one considerable item not included in this year's Estimates, namely, interest on our debt to the United States of America, which at par of exchange amounts to over £40,000,000 a year. It is possible that we may not require to provide more than half of the whole year's interest on our debt to the United States Government in 1922–23. Even so, the starting point on the expenditure side on the present basis is not likely to be less than £950,000,000. Clearly that is too high and it must be reduced. It is our business to reduce it, if we can, and the Chancellor of the Exchequer, with the authority of the Cabinet, is setting the Treasury machinery in motion forthwith to obtain from all the Departments preliminary Estimates of their expenditure for next year, and in co-operation with each Department to prepare the way for drastic reductions in next year's Estimates as compared with those of this year. [HON. MEMBERS: "Hear, hear!"] Let us assume that he succeds—I hope the cheers with which the announcement was received mean that he will have the help and co-operation of hon. Members—the amount available for Debt reduction out of Ordinary Revenue, even on the most sanguine hypothesis, will not reach £100,000,000 in 1922–23. I do not think anyone can say that that is too much. I doubt if it would be enough if there were no special sources to supplement it. If it is considered too much, the time for remitting taxation will be when the economies have been secured and when the consequent reduction in expenditure has already taken place. It does not do to count our chickens before they are hatched.
Sparkling Wines and Cigars
There can, therefore, be no further reduction of taxation in the current year, but there are one or two matters which require adjustment and legislation. Last year my Budget proposals included an ad valorem surtax of 50 per cent. on sparkling wines and cigars. In the Committee stage of the Finance Bill I reduced the surtax on sparkling wines to 33¼ per cent., and indicated, not obscurely, my willingness, if supported by the House, to do the same in the case of cigars, but the opposition offered to the reduction of the duty on sparkling wines caused me first to postpone and then to abandon the intention of reducing the ad valorem duty on cigars. I have now to admit that I was wrong, and it is all the easier for me to admit it because the House not merely shared my error but urged me and indeed compelled me to commit it. Those increases of duty wholly failed to answer my expectations, and as levied at their present rate they are unremunerative. Let me say that the failure has not been due to the additional duties alone. These duties are, of course, amongst the most sensitive of those affected by the sharp depression in trade and my attempt to raise them certainly fell at an unfortunate moment. There is nothing at first sight more reasonable and nothing more universally popular than luxury taxes, but the trouble is that when a thing is really a luxury, and not so deeply ingrained a habit that it has almost become a necessity, if you put heavy taxation upon the luxury, people cease to indulge in it and you lose revenue instead of gaining it. Let others learn by the mistake which I committed.
I estimated that the old duty of 3s. 9d. per gallon on sparkling wines would produce £240,000 and that the new duty of 7s. 6d. with a Surtax of 33⅓ per cent. would produce £1,250,000. The actual receipts have been £570,000, the clearances having been 50 per cent. less than was anticipated. With these results before me I could not have justified a continuation of the duty in that shape, and my right hon. Friend has had to consider what alteration is required to place it on a sound revenue basis. He has decided to propose a specific duty of 15s. a gallon in place of the existing fixed duty of 7s. 6d. a gallon and the ad valorem duty of 33⅓ per cent. We believe that the tax on sparkling wines will be more productive in this form than if continued on its present basis. Having regard to the depression in trade we cannot anticipate a large increase of consumption in the present year, but my right hon. Friend expects a yield from the new rates of £670,000, that is, £100,000 more than was obtained from my duties last year.
The result of the Surtax on cigars has been even less satisfactory. I estimated that the total receipts would be £1,360,000. The actual receipts have been only £325,000. It is clear that the Surtax has lowered the revenue instead of raising it, and has entirely failed to justify itself. The Chancellor of the Exchequer has carefully considered whether any modification in the Surtax could be made which would increase the consumption and with it the revenue, but he has come to the conclusion that the best course in the interests of the revenue itself is to remove the Surtax altogether. He proposes, therefore, that the tax on imported cigars shall be restricted to the existing specific duty of 15s. 7d. per lb., and anticipates that at this rate the tax will produce £570,000, or £245,000 more than the total receipts of 1920–21, and more than would have been obtained in the current year if no change had been made. The date at which he proposes that these two changes should take effect is the 10th May. With that I close this painful chapter.
Income Tax
5.0 P.M.
I now come to another matter requiring legislation. It is an Income Tax matter, but it is not legislation to raise the rate, or, indeed, I should be inclined to say, to impose any new taxation. It is declaratory of the law as the House thought it made it last year or in previous years. Traders are normally assessed on the three years' average. When profits are rising and the average tells in their favour, they make no complaint, but last year profits fell below the average of three years in a good number of cases, and I am afraid that in the current year it must be expected that that will happen in a still larger number of cases. Accordingly, the three years' average at the moment works adversely to the taxpayer, and under the circumstances it is not surprising that he and his advisers have scrutinised narrowly the language of the Statute to see if haply there were not some loophole of escape. In this way claims are being made under two heads, which, if not settled by this House, will lead to protracted litigation and to long and great uncertainty affecting a very large body of taxpayers. Last year a Debate took place in this House on the question of whether the War-time relief embodied in Section 43 of the Income Tax Act, 1918, should be continued for the year which has just ended. This relief was applicable in cases in which, owing to circumstances attributed directly or indirectly to the War, current profits fell short of the three years' average. The same question was also discussed in regard to another war-time relief of less importance embodied in Section 44 of the same Act. The House decided that neither of these reliefs should be continued, and many taxpayers are now claiming on a technical issue that last year's Act failed to carry out the intention of Parliament, and that the reliefs remained in force for last year. Other taxpayers rely on a different provision, a very old provision, which contemplates relief when the taxpayer goes out of business or becomes bankrupt, or from any specific cause is deprived of or loses profits in respect of which the Income Tax assessment is made. The claim now put forward is that under this old rule a taxpayer suffering from depression in trade may have his assessment adjusted to the amount of his current profits, despite the fact that he has continued to carry on his business throughout the year of assessment and that no element of cessation is involved. That is not the interpretation which has ever prevailed in the past. It has been generally assumed that the application of the Section was restricted to cases in which the taxpayer had ceased to carry on his business, and to cases ejusdem generis specially mentioned in the provision itself, namely, death and bankruptcy; but as doubts have been expressed, it is very desirable from every point of view to clear up the position. After all I have said the Committee will understand that we cannot accept the contention which these traders are putting forward. It conflicts certainly with the intention and we think with the letter of the law. If by any chance it was successful the cost to the Exchequer would derange the whole financial provision of the year and create confusion in a large number of assessments. My right hon. Friend therefore proposes to introduce legislation to declare the intention of the law both in this matter and that of the special war reliefs to which I have already referred.
Excess Profits Duty
Again, legislation is required for the winding up of the Excess Profits Duty. I announced in Birmingham in February that we should not renew that tax. I need not now spend time upon the reasons. The end of the tax is too much like the death of the old squire. The visitor returning to the village was informed that the old squire was dead. "What was the complaint?" he asked, and the rustic in answering him said, "There were no complaints, Sir. Everyone was perfectly satisfied." The circumstances in which the tax originated, the circumstances which justified its con- tinuance, have passed away. To renew it now would be unjustifiable on its merits and would be to deal a heavy blow at any sign of returning trade and prosperity. The termination of the Excess Profits Duty carries with it the termination of the corresponding duty on excess Mineral Rights. Even if it were continued, the revenue to be derived from it in present circumstances would be quite inappreciable. It falls to my right hon. Friend's lot to implement the promises which have been made by all his predecessors, from the first introducer of the duty down to the present time, and which were to be fulfilled whenever the duty was wound up.
The first promise was that all businesses should be liable to the tax for the same period. That is to secure that the period would be seven years from the beginning of the first accounting period in which a business fell within the scope of the tax. But there are two exceptions, which I announced at Birmingham. One is that in the case of new businesses, businesses which have sprung into existence since the beginning of the War, the duty is not to run beyond 31st December last. The second is the case where two or more businesses have amalgamated during the period of the War. In this case my right hon. Friend proposes that the liability to the tax should cease at the earliest date at which any of the businesses which have amalgamated would have terminated their liability. The result has been, or will be, that the liability of the majority of businesses terminated on or before 31st December last, and for most of the remainder the liability will be terminated by the 31st March. A limited number continue their liability later, the latest possible date for any business being 4th August next.
The next promise made was that the average of the rates charged would be the same in all cases. The rate at the termination of the duty under the existing Act is 60 per cent. Notwithstanding any changes made from time to time in the rate and to the fact that those changes have not always been made at corresponding dates in the year in which they were introduced, the average, as will be found by anybody curious enough to work it out, would be the same for all, except post-War businesses, namely, 613/7 per cent.
The next promise made was that no business should pay more Excess Profits Duty in the aggregate than it has earned excess profits in the aggregate. When a business in one of the accounting periods makes a deficiency of profit as compared with its standard it is entitled to receive repayment out of Excess Profits Duty for a proportion of that deficiency, the proportion being the same percentage as the rate of Excess Profits Duty in force in the accounting period. Where, therefore, a business has made excess profits in a period in which the rate of duty was high, and has suffered a deficiency of profit in a period in which the rate of duty was low, it may occur that the net amount of Excess Profits Duty paid by that business exceeds its aggregate excess profit, even after the receipt of the relief provided for in this Statute in respect of the deficiency. My right hon. Friend accordingly proposes that in any case in which the net Excess Profits Duty exceeds the aggregate net excess profits of the business that difference shall be remitted.
Lastly, I have to refer to the question of the valuation of stocks. That has been the subject of much discussion since the rate of duty was first rasied to 80 per cent. in 1917. It has generally been recognised that, if an Excess Profits Duty was exacted at very high rates when prices were very high and profits were accruing from rising prices, some account must be taken of the effect of falling prices on the termination of the duty. The Government have accepted in principle the general features of two reliefs which were discussed in 1917, one which is generally known as the White Paper relief, which has been laid before the House, and one which was recommended by the Financial Risks Committee. My right hon. Friend is giving further consideration to the problem which now presents itself and to the necessity for some modification and re-adjustment of these reliefs in the light of the conditions obtaining in the period during which the termination of the Excess Profits Duty falls, and I must ask the Committee to leave the explanation and discussion of these details until we reach the Committee stage of the Finance Bill, when the Committee will have them before them.
I ought to add a word as to the probable amount of Excess Profits Duty which the Exchequer may expect to receive from the arrears. There are nearly £300,000,000 Excess Profits Duty in assessment, and a very large further amount remains to be assessed in respect of accounting periods which have only very recently closed. On the other hand, large allowances must be made for adjustments, for appeals, for the reliefs and revisions connected with the termination of the duty, and for repayments on account of deficiencies in cases where businesses are suffering from the trade depression. The Chancellor of the Exchequer has felt justified, after taking into account all the various circumstances, in estimating for a revenue of £120,000,000 this year, and he expects a considerable sum next year, though, of course, much less than that. In subsequent years we cannot expect anything but a remanet of revenue from that source.
Maturing Debt
I have just one more subject with which to deal. Once again I have to refer to the position of the Debt, and this time in relation to funding, and I have to impart to the House an important proposal made by the Chancellor of the Exchequer. The Committee is already aware that in addition to the renewal of Floating Debt, to the total of £1,275,000,000, provision has to be made this year to meet domestic obligations amounting to £113,000,000. Foreign obligations amount to £80,000,000 as explained by me in an earlier portion of my statement. If to these sums you add the amount of the 5 per cent Exchequer Bonds maturing this year, and the further amount of 5¾ per cent. Exchequer Bonds on which the holders have exercised their option to demand payment this year, we arrive at a total of some £300,000,000 in all with which we have to deal in the current year. In order to do so, it will be necessary to reborrow as a minimum the difference between this £300,000,000 and the sums applicable out of receipts to debt reduction.
Can. the right hon. Gentleman give the figure for the Exchequer Bonds maturing?
£71,900,000 of 5 per cent. Exchequer Bonds maturing this year and £32,100,000 5¾ per cent. Exchequer Bonds in respect of which holders have exercised their option of repayment during the year.
What about the Foreign Debt?
The Foreign Debt is £80,000,000 and the Domestic Debt is £113,000,000. The total is £300,000,000 within a million or so.
That is not the whole of the story. During 1922–23, apart from the External and Floating Debt, Exchequer Bonds and National War Bonds fall due to the total of no less than £232,000,000, of which £35,000,000 mature on the first day of the financial year In 1923–24 £375,000,000 of National War Bonds mature. In 1924–25 Exchequer and National War Bonds maturing reach a total of £160,000,000. This figure will be reduced, and the figures for earlier years increased by the extent to which holders of the 5¾ Exchequer Bonds again exercise the option of earlier repayment. In 1925–26 the maturing debt falls to £51,000,000 There is nothing in 1926–27, but the two following years will be heavy years, the figures being £359,000,000 and £488,000,000 respectively. After that there are no heavy maturities until the 4 per cent. War Loan finally becomes due in 1942 and the 5 per cent. War Loan in 1947.
The existence of our present huge Floating Debt is a grave inconvenience. Further large additions to it will be a standing menace to our credit, our security and our prosperity. I had hoped we should be able to reduce the Floating Debt before these earlier maturities began to threaten, but, as I have explained, the Sinking Fund has been largely earmarked for other purposes and largely required for foreign debt. All the authorities whom my right hon. Friend has been able to consult, official and non-official, agree that the present time is not suitable for attempting to fund the Floating Debt. But as these short-dated maturities approach their date of maturity they tend to pass out of the hands of the investor into the hands of the money market. From being an investment held by a person desiring a long security they become available as short money for the money market. They become to all intents and purposes an addition to Treasury Bills; so that if we waited till the date of maturity before we offered the holders anything in return for their present securities, we would find that the holders at that moment required cash and not a new investment, and that the former holders have already re-invested the money they had previously lent to the State.
Conversion Loan
In these circumstances, my right hon. Friend has decided that, while it is not possible as yet to raise cash with which to reduce the Floating Debt, the time has come when a serious effort should be made to secure conversion into a longer-dated security of some of these National War Bonds maturing in the course of the next, year or two. Accordingly, a prospectus will be issued to-night, and copies will be available for Members in the Vote Office when I sit down, or in the course of the afternoon, offering to holders of the National War Bonds maturing on or before 1st September, 1925, a new 3½ per cent. Conversion Loan. The amount of Conversion Loan offered for each £100 nominal of National War Bonds necessarily varies slightly as between the different classes of bonds. The exact figures are as follow:
For each £100 nominal National War Bonds Amount offered. £ Due 1st October, 1922 … 163 Due 1st April, 1923 … 162 Due 1st September, 1923 … 162 Due 1st February, 1924 … 161 Due 1st October, 1922 … 161 Due 1st April, 1925 … 160 Due 1st September, 1925 … 160
The Committee will observe that the offer is confined to holders of the National War Bonds I have named. There is no appeal for cash subscriptions. Investors who have cash available for investment, and who desire to share in this loan, can, of course, contribute by buying up the relative bonds in the market from holders who would prefer cash to a further reinvestment. The total amount of bonds outstanding to which the offer applies is £632,000,000. If all of them were converted the resulting figure of Conversion Loan would be just over £1,000,000,000. It would be, of course, too much to hope that the whole will be converted, but we may expect a very large response. The terms are generous. Subscribers to the new issue will secure for themselves for at least 40 years a return on the amount of their original investment varying, according to the maturity of the War Bond converted, from about £5 14s. 0d. per cent. to £5 12s. 0d. per cent. They will have a stock with a ready market, which will be supported so long as it is below 90 by a regular sinking fund, and should thus show a regular tendency to appreciate in price.
If there be any criticism of the proposal I expect it will be that it is unduly generous. If so, I would urge two things. First, that, while the holder is assured of his £5 12s. or more per cent. for 40 years, the operation of the Sinking Fund on the stock below par will reduce the real cost to the State very materially. In the second place, I would urge that it is impossible to allow ourselves to drift in the hope of being able to get better terms before these heavy maturities come upon us. With such an immense Floating Debt and these large maturities coming, no provident Chancellor of the Exchequer could face the year 1922–23 without making a great effort to lighten the burden. If we waited for next year and if some unforeseen circumstance had interfered with our expectations of being able then to make the arrangements we had contemplated, I think we should be justly censured. It is, of course, unfortunate, particularly from the statistical point of view, that conversion will increase the nominal total of the debt. But that is not the point which most touches the taxpayer. He is concerned with the annual cost. It is true that the charge for interest will be slightly increased, but the plan proposed clears a way for dealing with the Floating Debt at the proper time, and it should materially cheapen the cost of doing so, besides enabling us to save interest on the Floating Debt still outstanding. As things are, the Conversion Loan is a necessary preliminary to funding. Though it seems expensive, we shall reap the benefit of it later on.
I have completed my task. I hope I have been able to make the proposals of my right hon. Friend clear to the Committee. It is unusual for an ex-Chancellor of the Exchequer to expound instead of to criticise the work of his successor. I cannot promise my right hon. Friend that on that ground he will escape criticism, but I can promise him the support of his colleagues, and I hope I may tender to him the sympathy and good will of the Committee. I should like also, if I may be permitted, to say a word or two of a personal character. I look back on the two years during which I have been primarily responsible for the national finances not without a certain measure of modest, I hope modest, satisfaction. They have been two years of unexampled difficulty, but in the course of them something has been accomplished. We have reorganised and re-equipped the Treasury, which was never since I first entered it adequately staffed or properly organised for the work it had to do, and infinitely less so for the immense burden that falls upon it in the present-day conditions. We have re-established Treasury control, abandoned, and necessarily abandoned, during the War. We have ceased to borrow. We have begun to repay debt. The deficit of the first year has been converted into a surplus, and the foundations have been laid for steady recovery when industrial disputes are laid to rest and trade can begin a new revival. Finally, we have wiped off a large portion of our foreign debt. We have restored our international credit, and we have made it clear to those who doubted our capacity or our will, that we can hold, and that we shall hold for this country and this city the very proud position as the premier financial centre of the world.
Customs and Excise
Continuation of Duties (Customs).
Motion made, and Question proposed,
"That the duties of Customs specified in the first column of the following table, which were imposed by Part I. of the Finance (No. 2) Act, 1915, and continued by Section one of the Finance Act, 1920, in the case of the new import duties until the first day of May, nineteen hundred and twenty-one, and in the case of other duties until the first day
Duty. Section of Finance (No. 2) Act, 1915. Date to which Duty continued. Increased duty on tea … … … … 1 1st August, 1922. Additional duties on dried fruit … … … … 8 1st August, 1922. New import duties … … … … 12 1st May, 1922.
And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."
If my memory serves me right, this is only the third occasion, in the course of something like eighty or a hundred years, that the Budget has been presented to this House by any Minister other than the Chancellor of the Exchequer. On the last occasion I myself performed that duty, and, less daring than my right hon. Friend, I did not presume to anticipate the work of my successor in the next financial year, a year of note in our history. My right hon Friend, I need not say, performed the duty with his accustomed lucidity and adroitness. He referred to a familiar historical parallel with regard to Jacob and Esau. I do not know exactly how he casts the two parts. I confess for myself, that as between the sons of Isaac, neither of whom was a perfect character, I have always had a sneaking sympathy for Esau. Time will show—the next financial year will show—how far my right hon. Friend's parallel is justified by present-day conditions. There is an old and rather fallacious saying, that the country is happy which has no history. It is certainly true of a Finance Minister, that he is happy when it is his fortune to present a Budget which contains no startling surprises. That has been my right hon. Friend's lot on the present occasion. I am not going to survey the whole field covered by him, nor to indulge in anything of the nature of critical or still less of controversial debate upon the present occasion. I am going rather to pursue what I think has been the almost unvarying tradition of the Committee on the night when the Budget is introduced, and confine myself, in the very few observations I am going to make,
of August, nineteen hundred and twenty-one, shall continue to be charged as from those respective dates until the dates specified as regards the said duties respectively in the third column of the said table:—
to interrogation, and so far as may be to elucidation of such points—and they were very few—as my right hon. Friend's; statement did not make abundantly clear. My right hon. Friend referred with not unnatural complacency to the fact that the Estimates, both of expenditure and revenue, had been, in point of totals, verified with unusal precision. I need not say I heartily concur with him in the well merited commendation which he has given to the skilful assistance which the Chancellor of the Exchequer always receives in this matter from his experts in the Treasury.
If we turn to the revenue side of the account, it will be found, as I have said, that the correspondence of the Estimate with the actual receipts is rather a correspondence in totals than details. In Customs there is a deficiency of no less, than £15,000,000 on the Estimate, in part to be attributed to depressed trade, and in part—a small part at any rate—to failure of the right hon. Gentleman's, anticipation of the yields of his new duties in respect of tobacco and wine. The Motor Vehicle Duty, on the other hand, shows a very decided increase on the Estimate—an Estimate of £4,500,000 has been turned into an actual receipt of over £7,000,000. What I may call the old duties, such as the Death Duties, Stamps, and Income Tax, have done surprisingly well. The Corporation Profits, Tax has proved so far very disappointing, as I think my right hon. Friend will agree. There is another figure in the non-tax revenue to which I ought to call attention, as perhaps the most disappointing feature, and it is that relating to the Post Office. The estimated revenue of the Post Office services for the year was £53,000,000, and the actual receipts have been only £49,500,000, showing a very large deficit of not less than £3,500,000. I have no doubt, in the course of the discussion on the Budget, the Government will be prepared to give us their explanation of what seems to be an almost unaccountable deficit under the conditions. On the whole, as I have said, the totals correspond in a remarkable degree with the prevision shown.
In the observations which I am now about to make I am going to deal almost entirely with the topic which occupied such a large part of my right hon. Friend's speech, and which I believe to be by far the most important topic, that of debt. I will say one word first about his estimates or his successor's estimates of the revenue and expenditure of next year. In the first place, let me say I am very glad that a distinction is now going to be made as between ordinary and extraordinary revenue expenditure. I think our minds have been very much confused during and since the War by treating both exceptional expenditure of a more or less military character, incidental to the carrying on and winding up of our military and naval obligations, and the receipts on the other hand from war sources and other special sources, as though they were to be regarded as normal items of the revenue and expenditure of the State. It is much better they should be kept separate, and I am glad this change is going to be made. The situation as so disclosed is not a satisfactory one, and here I want to be quite certain that I am accurate in my figures. Taking the ordinary expenditure for the coming year I gather from my right hon. Friend's statement that it is £974,000,000. What he calls ordinary revenue is £1,058,000,000. That amount includes a receipt from Excess Profits Duty of £120,000,000. That, according to my right hon. Friend's statement, would bring the surplus of ordinary revenue over ordinary expenditure for the current year to £84,000,000. On the other hand, the extraordinary side of the account shows a difference as between £158,000,000 of extraordinary receipts and £65,000,000 of extraordinary expenditure, which would represent an additional sum of £93,000,000. So, if you add the ordinary and the extraordinary balances together, the total of the estimated surplus would be roughly speaking about £177,000,000. It is admitted, and I think quite properly admitted, that that cannot be treated as nett. There are probably very heavy contingencies, the precise amount of which it is impossible at this moment to calculate, which should be kept in view when estimating what practical available balance you will have in hand at the end of the year for debt reduction. It is quite impossible to take £177,000,000. I would reduce it by something like one-half, but that is only a rough estimate.
At least that.
At least that, and it may well be more. That leaves us, at the outside, a surplus for debt reduction of something like £80,000,000, and that may be in excess of the actual amount.
My right hon. Friend must not forget the amount which is included in the ordinary expenditure.
I am not forgetting that at all, I am merely taking the actual surplus. Bearing these facts in mind and recalling our actual experience of the past, and the forecast of the coming year, let me ask the attention of the Committee for a few moments to the debt. Here again I am merely trying to summarise the points so that the Committee may see what is the magnitude and complexity of the problem. First, I will take the figures of the total debt. That has been reduced during the year from £7,829,000,000 to £7,573,000,000. That is a very satisfactory reduction, but at the same time it must be remembered that the total amount of the debt two years back—on 31st March, 1919—was only £7,435,000,000, so that, notwithstanding this large reduction in the course of the last 12 months, the total figure to-day stands higher than it did two years ago. That is a very important fact to be borne in mind. Next I come to what I agree with my right hon. Friend is a most serious factor. It is a very nice point whether the external debt or the floating debt is the more serious, but I think I agree on the whole that the external debt is the one most likely to cause disquietude. The figures show a reduction during the past year of from £1,278,000,000 to £1,161,000,000. I should like to know whether it is substantially the case that at the present moment the whole of that external debt with insigni- ficant exceptions is due either to the United States of America or Canada, and not to any other country.
Practically the whole of it is dollar debt, excepting the single item of less than £1,000,000 Swedish debt, which will be paid off this year.
Substantially, it is all owing these two countries. Before I come to the floating debt, let me deal with the figures of the maturing debt for the next 12 months. It is more serious than I anticipated, for what do we find? What with the foreign debt, the Exchequer Bonds, and the War Loan purchase arrangements and other items, the total is very little short of £300,000,000, maturing, of course, in the next 12 months. If this is to be taken in conjunction with the still more menacing and significant figures which my right hon. Friend very rightly brought before the attention of the Committee, as to the growing incidence of these maturities in the five or six or seven years which are to follow, it will be seen what the country is called on to face. It is all very well to talk about remission of taxation, but when we are indulging in all kinds of more or less costly schemes for the improvement of mankind in general—a very excellent thing in itself—these figures should always be kept before our minds. We are not in a position to indulge in adventures, either belligerent or philanthropic, without most carefully counting the cost, and without making perfectly certain so far as human foresight can do so that the adventure in which we are going to embark is one which will be remunerative in the strict sense of the term.
Having quoted those figures—and I do not apologise for having done so—let me now come to the question of the Floating Debt. I say nothing of the scheme which my right hon. Friend has just outlined to the Committee, because it would be obviously premature and foolish to pronounce any opinion on it until one has had much longer time to study its details. I am reluctantly disposed to agree with what appears to be the predominant opinion, both among Government experts and in what is called the City, that the time for what is strictly called a funding operation has not yet arrived. I confess I have been looking forward during the last two years with very sanguine expectations to something of the kind, and I very much regret that the conditions are not such as to allow of it, but let us see what this Floating Debt really is. It has been reduced, it is true. On the 31st March, 1919, it was £1,412,000,000; on the 31st March last year it was £1,312,000,000; and I gather from my right hon. Friend's statement that it is now £1,275,000,000. Therefore, it has been reduced during the course of the last 12 months by £37,000,000, as distinguished from the £70,000,000 which was the figure by which it was hoped by my right hon. Friend last year it would be brought down. That is a very disappointing result.
That floating debt, taken in conjunction with the figures which I have already cited in regard to the maturities which we have to face in the immediate future and to the still colossal figure of our external debt, constitutes, to my mind, one of the most formidable features of the financial position. What is to be done? If you survey the situation as a whole and its future possibilities, while one must wish the best possible success to this scheme which has been adumbrated this afternoon—though it will have the unfortunate effect, undoubtedly, of giving at any rate the appearance of a substantial addition to the dead weight debt of the country, a danger which is not to be ignored, because it is a real one—while one must wish the best possible success to that or to any other expedient, yet here again we come back to that which is the only possible way of success. You cannot talk, in my opinion, anxious as I am to see the crushing burdens of taxation, of Income Tax and other taxes, reduced to a much smaller figure than we have had any experience of during recent years—you cannot talk honestly and sanely of anything of the kind until you have reduced your expenditure to a point at which you have a substantial surplus every year. After all, we have incurred these burdens deliberately, spontaneously, to a large extent unselfishly, and, it must be admitted, to an extent which has been considerably and unnecessarily increased by improvidence, but there they are—they are the root facts of the situation.
There is one way, and one way only, to deal with them, and that is that this House, which after all has the ultimate power, should insist with an emphasis and with an effect which in the whole of my long parliamentary experience I have never known more necessary. I have sat a great part of that time on that bench, and a great part of that time on this bench, and the happiest time of all on the Back Benches, but during the whole of that experience, passed in almost every quarter of the House, allow me to record my testimony, which is that of every Chancellor of the Exchequer for generations past, that on the whole the influence of the House of Commons is exercised in favour of larger rather than reduced expenditure. I hear a faint murmur of applause, but that is my deliberate opinion, based upon experience, and when people talk of the House of Commons being the watchdog as against the Treasury, even as against the public spending Departments, I confess it is a watchdog which has been, during the whole of my time, so effectually self-muzzled that its bark has always been very much worse than its bite. This is a time when the House of Commons really ought to take this matter seriously to heart. I am told there is a proposal which is under the consideration of the Government for the establishment of an Estimates Committee. I wish very well to that proposal, but if the Estimates Committee is only a microcosm of what the House has hitherto been as a whole, we shall be no better off. I venture earnestly to appeal to Members in all sections of the House, knowing as I do, and as they do, the pressure to which we are exposed, not so much, perhaps, by our own constituents—my constituents never ask for any expenditure of public money—but by the pressure of outside influences for this and that new form of costly adventure, if we could only unite together and present something like a solid front against all expedients and temptations of that kind, and at the same time apply the same vigilance, the same daily vigilance, to watching the proposals of the Government themselves as we do to those which are pushed upon us by irresponsible people from outside, then, and then only, shall we be in a position, with a clean conscience and with strong hands, to deal with this, which I believe to be by far the most dangerous factor in the future situation of this country. That is the moral of this Budget, as it has been the moral of every Budget during and since the War, and it is a moral which ought to be driven home to the conscience of the people of this country.
May I say that I entirely agree with the concluding words of my right hon. Friend opposite (Mr. Asquith)? This House can do a very great deal, and I believe in what he said that instead of being economical as a rule, this House is the reverse. I should like to congratulate my right hon. Friend below me (Mr. Chamberlain) on the fact that it has been his duty to introduce what is really his own Budget. The revenue amounted to £7,684,000 more and the expenditure to £11,000,000 less, and the balance is almost the amount which the Chancellor last year estimated, namely, £230,000,000, as against £234,000,000. The great point which the right hon. Gentleman made last year was that the large increase of taxation which he imposed was for the special purpose of paying off debt. The amount of new taxation which he hoped to receive last year was £76,000,000, and in the full year, that is the year commencing now, he expected to receive £198,000,000, which was an increase of 20 per cent. over the year before that. The Chancellor of the Exchequer last year was anxious while the country was prospering to get as much money from the country by taxation, as he could so as to pay off debt quickly. Some of us had our doubts about that, because it was quite evident that the period of inflation could not last very long, but I do not think any of us expected it would close so quickly as it did, namely, about August of last year. He started, as he has told us, with a bright and rosy morning and the evening has been cloudy, but the result fortunately is a balance.
6.0 P.M.
I agree that the great feature about this Budget is the payment of debt. The total debt, funded and unfunded, on the 31st March amounted to £7,573,000,000 and the floating debt to £1,275,000,000, or together £8,848,000,000. I quite agree about the policy of funding the unfunded debt, and I think it is a good policy, but I have got another suggestion to make in regard to the debt. Last year the Chancellor of the Exchequer said the amount he was proposing to pay off, £230,000,000 of debt during the year, would pay off the whole debt in 20 years. I told him it was far too short a period, and I am of the same opinion now. He said one generation, but may I venture to say two generations at least? We have had the biggest war the world has ever seen, and certainly the largest expenditure of men and money. Can this country afford, without taxing the present generation too high, to pay off the whole of this debt in 20 or even 30 years? I venture to propose 50 years, or two generations. If hon. Members will take the annuity tables, they will see that an annuity of £1 on the 4 per cent. table, which is safer than 5 per cent., at compound interest will come to £152 in 50 years. To pay off the whole of this debt in 50 years, the annual payment would amount to £58,000,000 a year, and therefore when the right hon. Gentleman just now deprecated having only £103,000,000 at safe disposal, I do not think the Treasury ought to be too anxious because, if my proposal to spread the payment over two generations were taken, the payment would only amount to £58,000,000 a year. If that £58,000,000 could be kept up steadily we should have the whole of this funded and unfunded debt paid off in 50 years. It has been said that the taxation of the country is heavy. No doubt it is. We are the most heavily taxed country in the world at the present time, and for that reason our trade is handicapped in foreign competition. Is it good policy, with trade in the condition it is at the present moment, to overburden the country with taxation in order to pay off debt? Paying off debt is all right, but there are times when you would injure the country more by over-taxation than by paying off debt. My right hon. Friend the other day, in reply to a question about the amount per head of taxation in this country, compared it with what it was in 1913. The Committee will be surprised when I tell them that the taxation per head in the United Kingdom last year had multiplied 6·3 times over that of 1913. The taxation per head in France for the same period multiplied 4·4, Italy 3·9, and the United States of America, which had a very low taxation before the War, 7·9.
I will give the Committee other figures, which will bring out more prominently the large taxation we bear compared with that of our competitors. These figures of the total taxation are given in United States' dollars at the present exchange. They are reduced to one common denominator in American dollars, because it is very difficult indeed to compare taxation in different currencies. The figures for our own country stand far and away the highest. The total taxation, in American dollars, per head of our population is 87·9. The United States comes second with 56·5, and France comes next with 34·6. I will not trouble the Committee with the other countries, but I have eight here. The Committee will see that this means that an Englishman at the present moment is being taxed, within a small fraction, as much as one Frenchman and one American.
I am going to turn to the question of expenditure, because I agree with the right hon. Gentleman who has just spoken in his concluding remarks that really before we can reduce taxation we must reduce expenditure. Of course, the Finance Committee of the Cabinet—I think there are four Ministers in that Committee—are primarily responsible. The Treasury come next. And I was only too pleased to hear my right hon. Friend state that drastic reductions are going to be made under the Treasury reorganisation. Towards the end of 1919 there were certain new regulations passed in the Treasury. One head official and three subordinates have full control now, and I sincerely hope they will take full advantage of their powers. Let the Treasury control come back to what it was before the War. Of course it dropped entirely during the War, as there were no Estimates. But now they have a real chance of exerting proper influence on the spending Departments, especially the heads of the Departments. If I were in a position of authority in the Government, I would treat my Ministers in this way. I would put the best mark against the name of the man who economised the most, because that is really the important thing, and not put the good mark against the man who spends the most.
A good deal has been said about establishing a system of rationing in the Departments. I think myself that there is a very great deal to be said for it. I know there are difficulties, but I want to explain to the Committee a system which I know has worked well. In the city which I represent, where I was Lord Mayor twenty years ago, we established a finance consultative committee in the corporation. That committee was composed of the finance committee, with the heads of all the spending depart- ments. When the estimate was sent in, this committee met, and if the total amount was more than the city could stand, it was rationed. We said, "We cannot afford you more than that. You must make that do." And they had to make it do. It has worked up to the present moment. I must say if something exceptional comes along, a supplementary estimate can be produced, but I deplore supplementary estimates. Even in the House they are bad in principle. They upset the Budget for the year, and they lead to extravagance. I would strongly advise my hon. and gallant Friend, if he can, to see if the system of rationing in some form cannot be introduced. I have mentioned two bodies who can help in this matter—the Cabinet Finance Committee and the Treasury. I want to mention another. It is this House. This House, as the right hon. Gentleman said just now, is more eager to spend money than to save money. It ought to be the duty of all at the present time to make a resolve not to bring forward anything in this House which is going to increase expenditure. That is the only way in which the thing can be done, and I have great hopes, if these three bodies—the Finance Committee of the Cabinet, the Treasury, and this House—all work together with the very great object of reducing expenditure, we shall be able to reduce it.
I suppose this Budget will be summed up outside the House and inside the House as a humdrum Budget, but no one can view the figures, and have any knowledge of the burden felt by the country generally, without feeling apprehensive of the figures submitted to-day. While it is true that the general phrase, "We must economise" is accepted in all quarters of the House, it would be as well, after all, if we were to examine some of the figures to see where economies could be really effected I want to submit that when we realise that in the figures presented to-day in the Estimates for the current year over £200,000,000 is required for the Army, Navy and Air Force, we are entitled to say that that is not only a disproportionate amount, but we are entitled to say that the Government itself should take the necessary steps to effect drastic economy in that particular direction. We have just emerged from a war. In the Budget presented to-day we find interest and redemption for the War Debt amounting to £410,000,000. That is the contribution that we have made to make the world safe. That is the annual charge for the War we have just gone through. When concurrently with that figure we find £207,000,000 for the Army, Navy and Air Force, we are entitled to say that the Government, at least, should effect real and drastic economies in that particular connection. We on these Benches believe that you cannot separate that question from the foreign policy of the Government, and we believe that the Chancellor of the Exchequer and the Government should apply themselves rigorously to a reduction in this particular connection.
In the same way we find that the Budget presented this afternoon provides an increase of £1,500,000 for expenditure in Ireland. I think that is an underestimate, but here, again, we believe that you cannot separate this increased expenditure from the policy of the Government. We do submit that drastic economies could be effected in both these directions. I should like someone from the Treasury to explain exactly where the taxpayer is going to benefit, and what will be the effect of this new Conversion Loan. As I followed the Chancellor of the Exchequer this afternoon, he said, in substance, that the existing holders of the various War Bonds are to be given the option of a new Conversion Loan up to 1960, and that the average rate of interest for that loan will be between £5 12s. and £5 14s. That is the principle, I think I am right in saying, upon which it is governed. I suppose the first effect of that announcement will be a further depreciation of Consols. Such appears to me to be inevitable. I should like to ask my hon. and gallant Friend whether the Government have considered the alternative policy of letting the public know that they cannot go on paying this heavy interest? The first effect of an announcement of this kind is on business. No commercial concern can hope to raise money except by paying very much higher rates than that, and if there is any criticism I would submit as to the new proposal, it is that we believe that the Government are altogether too generous in these proposals.
The real point, however, I want to ascertain is in regard to the allotment for the railway agreements. As I followed the Chancellor of the Exchequer he intimated that the Government were allocating a certain sum—I did not quite gather the full sum mentioned. I want to know whether this is a provision for all the outstanding debts in regard to the railway companies. In other words, is there provision made for the amount owing under the Colwyn Committee's Report, or will there be some Supplementary Estimates in this, matter?
My right hon. Friend upon that said that in the estimated ordinary expenditure of next year a certain sum is included as estimated expenditure on the railway agreements. That is similar to such payments as have been made this last year. In the extraordinary expenditure there is also, I heard my hon. Friend remark, the possibility of a surplus of extraordinary revenue over extraordinary expenditure; as against that surplus there were contingent and as yet unascertained liabilities in respect to the termination of the railway agreements brought into account. These were the amounts referred to in the Colwyn Report.
Then provision is made for dealing with both?
I think we are at one in this matter. Provision is not made because we cannot ascertain the amount at the present time, but the amounts have been taken into account in the general calculation.
And there will be a balance?
And the balance left will be less!
I quite understand the difficulty of my right hon. Friend. I know he is separating, under two heads, the extraordinary and the ordinary expenditure, and under the extraordinary expenditure there are commitments that at this moment have not been ascertained.
Yes.
That is the exact situation! Having ascertained that, I want to say that, so far as I understand the position, that I hope this matter will be adjusted this year. I feel that if it is not adjusted there will be differences and difficulties that will be disastrous to both the Government, the railway companies, and all concerned. I wanted to be quite sure whether or not the Government were making the necessary provision in that direction. I heard with amazement the Chancellor of the Exchequer, when he was considering reduction of taxation, say the only consolation he could give us was in relation to wines and cigars. We from these Benches have protested year after year, as we protest to-day, on the heavy burden of indirect taxation. If any remission of taxation is to be made, we believe that tea would have provided a much more necessary and useful means, and certainly be of more benefit to the great mass of our people. We shall have the opportunity of debating the Budget later and on the various Resolutions; so I content myself now by saying that you cannot separate these huge figures we have heard to-day from the foreign policy of the Government in regard to the Army and Navy, and also in regard to Ireland. We believe that here lies the most effective means of bringing about the necessary economies for the benefit of the taxpayers of the country.
I am glad of the opportunity of congratulating the Government upon the present Budget. It embodies two principles which, in my opinion, are very necessary. One is the principle of economy. As I understand it, the Government Departments are to be told that in the coming year there is to be a drastic reduction of expenditure. On that point I agree with the right hon. Gentleman opposite (Mr. Asquith). He said that he had only had six happy years in the House, and those years were years on which he had sat on a Back Bench. Well, I have had 29 happy years, and all upon the Back Bench. I agree that the House of Commons as a whole during, at any rate the larger part, if not the whole of those years, has never shown any earnest desire for a reduction of expenditure. There have been occasionally two or three Members who have been sincere enthusiasts upon that point. The majority of the House, however, though they are in favour of reduction A, are always in favour of increased expenditure on all the other letters of the alphabet. The result is that very little is done unless the Government put on their own Whips and insist upon the reduction. The Government can do that if they choose. That is the first point on which I wish to congratulate my right hon. Friend.
According to the right hon. Gentleman the Member for Paisley (Mr. Asquith), we must not talk about a reduction in taxation until we have succeeded in reducing our expenditure, and also until we have reduced still further our debt. Here I differ from my hon. Friend below me (Sir S. Roberts), who would like the reduction of the debt postponed for 50 years. Let me point out to him one of the many things that might happen in that 50 years. We might have another war in 15 or 20 years, and if we have not reduced our debt to a very considerable extent where shall we be?
I remember that last year my right hon. Friend thought that 40 years would suffice.
Yes, but that is not fifty years. The proposal of my hon. Friend was fifty years, and I said I thought fifty years was too long. My hon. Friend says that I said forty years last year. Well, I think from what I have seen lately I would prefer thirty years. At any rate fifty years is much too long. I agree with my hon. Friend that the burden of taxation is so heavy that unless it is reduced soon the country will be, I was going to say bankrupt, very nearly ruined. We cannot go on with this enormous burden of taxation. What is to be done? The only way is to reduce expenditure. That is the only way. That will have to be done. I am sorry that there are only two Members of the Labour party at present in the House. I attribute to Members of the Labour party every desire to do the right thing. I am not criticising their attitude in the least, but I do not think they really understand the very serious questions which are involved. Something was said a little while ago by the right hon. Gentleman the Member for Derby (Mr. Thomas) about the Army and the Navy. We cannot reduce the Army and the Navy because they are like an insurance. We cannot, in the state of Europe, afford to reduce our defence forces lower than now. Therefore we must in other directions endeavour to seek economy.
The next point on which I should like to congratulate the right hon. Gentleman is that some attempt is at last being made to fund the floating debt. The right hon. Gentleman the Member for Paisley said it was not a funding operation. I venture to say it is. Bonds will be refunded or redeemed which are due on or before September, 1925. That is to say, the longest due is something like four years and four months. There are shorter terms which will be redeemed; but that surely is floating debt? One which has only three or four and a half years to run is part of the floating debt! Therefore I say that this is the commencement of funding operations. I understand the amount to be redeemed is some £600,000,000.
indicated assent.
That is a very considerable step in the right direction. The right hon. Gentleman opposite, Mr. Thomas, seemed to query the prudence of the operation, because, as I understood him, he thought the Government were paying too much interest. I was unfortunately out of the House for a few moments when the statement of particulars was given, but I have seen a copy of the prospectus, and I have made a rough calculation, and the return will be something about £5 12s. or £5 13s.
£5 14s.
Five pounds fourteen shillings then, I am only a shilling out. I do not think that the Government can hope to borrow under that. It is very difficult to prophesy. My hon. Friend said money is going to be cheap. I rather doubt it. It may be cheaper for a few months, but whether it will be cheaper during the next 8, 9 or 10 years I do not know. I rather doubt it. Our liabilities are enormous. There is very little progress being made in the matter of increased production. I would commend that fact to hon. Gentlemen opposite. The only second way—in fact, it is indeed the only way if it is joined with economy—by which we can return to our former prosperity is by increased production. I do not wish now to make any lengthy criticism, and I will conclude by offering the new Chancellor of the Exchequer, who I am sorry is not here for the moment, my best wishes for his success in his first operation, namely, the funding of Bonds due between now and 1925. I sincerely hope that he will also use his best endeavours to insist upon a reduction of the staffs in the different Departments of the Civil Service, and upon a reduction of their salaries—that must come—and also on a moratorium in legislation for at least another ten years.
There is one point I wish to have elucidated with regard to the payment of debt. As far as I can make out from the figures we have not paid off any debt. Last year it was said that we paid off £150,000,000, but we realised £287,000,000 from, war stores. This year we are told that we are paying off £80,000,000 debt, but we are going to realise £80,000,000 from war stores. The hon. Member for Sheffield suggested that the payment of this debt should be spread over a longer period in order not to burden the taxpayers, but if I am right in my contention the taxpayer has not paid a penny off the debt during the last two years. The accumulated war stores of 1916, 1917, and 1918 are really capital expenditure incurred in 1917 and 1918, and when we realise them surely that is not money which can properly be used for the services of the current year. Money realised in that way in any ordinary business would be treated as a capital payment and not as income. I want to know whether there has been a single penny paid off the debt out of taxation, and whether there is going to be a single penny paid off in this way this year. It seems to me that the whole payment of debt last year and this year is going to come out of the money received from the sale of war stores. The Lord Privy Seal explained that this was a source of income that would not occur in 1922 and 1923, and I wonder what provision we are going to make then. It seems to me that the right hon. Gentleman is going to provide this £80,000,000 from war stores not yet sold. When there are no more war stores how will the new Chancellor of the Exchequer provide a proper sum for paying off debt?
I wish to ask a question in regard to our debt to America. I have asked several questions in order to ascertain how it came about that we were borrowing from America and at the same time lending money to the Allies of America. So far as I could gather this was done very largely to enable our Allies to buy munitions of war from America. It has been freely said that we were guaranteeing the debts of our Allies in this way, and I suggest that the time has now come when we should have a very full statement from the Chancellor of the Exchequer as to the manner in which that debt occurred. Negotiations took place between ourselves and our European Allies and between ourselves and our American Allies, and having borrowed the money ourselves we lent it practically the same week to our European Allies. The result is that we are saddled with several hundreds of millions sterling debt due from our European Allies which may or may not be a good debt in the future, and we are also saddled with this large debt to America, and I am sure America will regard it as a very good debt. In the course of the last few years when dealing with our Budget we have left out about £50,000,000 a year which is due to America for interest on this outstanding debt.
I have mentioned it each year.
I accept my right hon. Friend's statement. I remember last year he mentioned it quite frankly, but I do not think it was mentioned the year before.
It has been mentioned every year.
I do not think the public generally realise this outstanding liability, and unless something can be done with America to get them to relieve us of our liability in this respect to our European Allies we shall have to pay this very large sum of over £40,000,000 a year to America. Reference has been made to the money we owe to Canada. It was said that America and Canada were the two countries to which we owed money. The Budget statement shows that Canada owes us something like £13,000,000 sterling. Why cannot one debt be set off against the other? Why should we have to deal with a debt of £10,000,000 to Canada when Canada owes us over £13,000,000?
Our debt to Canada is larger than Canada's debt to us. It is to a large extent a debt owing by Canada to us, and our debt to Canada has already been set off.
I thought it was slightly the other way. I understand the debt to Canada is not so great because of the set-off of £13,000,000. The next point I wish to emphasise is what the right hon. Gentleman the Member for Paisley (Mr Asquith) said about economy in Government offices. Here, again, I would like to draw attention to one curious fact. My right hon. Friend has budgetted for £80,000,000, which he hopes to pay off this year. Last year we had Supplementary Estimates amounting to £87,000,000. If the right hon. Gentleman is going to permit Government Departments to bring in Supplementary Estimates to the same amount as last year, then the whole of this surplus will go by the board. I think we must ask the new Chancellor of the Exchequer to be really firm and permit nothing like Supplementary Estimates this year to the extent of £87,000,000. I wonder what would have been said by Mr. Gladstone, or our other great financiers of the past, if a Department had come forward with Supplementary Estimates to the extent of even £8,000,000, much less £87,000,000. It is idle to say that the House of Commons can economise. I have heard the Lord Privy Seal make speeches here throwing the whole blame of the lack of economy on the House of Commons.
When Estimates are brought forward for Mesopotamia, Palestine, the Civil Service or housing it is impossible for us to go into the Lobby against the Government. We are supporters of the Government, and to go into the Lobby against them, even upon the question of economy, means that we are supporting a Vote of want of confidence in the Government. There is no one in this House who is so determined and obstinate as my right hon. Friend. When we have tried to get anything out of him in regard to taxation on cigars, we have found him obstinate up to the hilt. Let the right hon. Gentleman teach the new Chancellor of the Exchequer the virtue of being obstinate, and let him say that the Government must put their foot down upon this question of Supplementary Estimates. It is not fair to independent Members or private Members to put the onus and burden of being economical upon us. The Government who know the cost of their requirements must take their courage in both hands and the Chancellor of the Exchequer must cut down ruthlessly the Estimates put before the Government by his own colleagues.
There is another point in regard to the new funding proposals which have been put before us this afternoon. Taking the Floating Debt and the War Bonds to the year 1928 there will be about £2,500,000,000 outstanding of what may be called the floating or short-dated Bonds. If it is desirable to commence by a funding operation to fund the Bonds up to 1925, why is it not possible to fund them up to 1927 or 1928? I think he might get another £50,000,000 out of the money market in this way. Therefore I suggest that it would be better to fund up to 1927 and 1928 rather than to 1922 and 1923. The 1927 and 1928 Bonds are held more by private individuals while the 1922 and 1923 Bonds are held largely in the money market by bankers and insurance companies who were rather hit by the War Loan of my right hon. Friend's predecessor, and they have had to write-off a large amount by way of depreciation on the War Loan. Those large financial institutions have invested their money largely in these short-dated Bonds. Would it not be possible to go a step further and fund up to 1928 or 1929, including the privilege or possibility of getting in some of this floating money? The £2,500,000,000 has to be paid before 1929, and I think it would be a good thing to give the opportunity to refund these Bonds up to 1929. There may be reasons against it but I do suggest to my right hon. Friend, if his new Funding Loan is to be a great success, as I hope it will be, that he should follow it up, as soon as possible, by a further Funding Loan which will get out of the way Bonds becoming due up till 1929.
The sympathy which the right hon. Member for Paisley (Mr. Asquith) expressed for Esau, with which I cordially agree, I feel still more strongly for the income-taxpayer. Esau used to go out with his bow and arrow, or whatever corresponded with our shotgun in his day, to shoot for the pot, game which he brought back, which was skinned, roasted and eaten, but now it is the income-taxpayer who is skinned, roasted and eaten. One can hardly look for a reduction of taxation, but still I do hope that the claim of the income-taxpayer, which is more strong than that of other classes, will be kept unceasingly before the Chancellor of the Exchequer throughout this year, so that, if any windfall or chances should happen, his burden at any rate may be lightened. I have sometimes wondered whether or not it would be good finance to relieve the income taxpayer even at the expense of paying off debt, and I am not at all sure that the £104,000,000 odd, which is now to be devoted to the payment of debt, should not be divided with the income-taxpayer. At any rate I should be very glad if some relief could be afforded from that source for the already overburdened income-taxpayer.
There is one point which I propose to bring before the right hon. Gentleman at the earliest possible moment. It is the case of a person who has to pay interest on Estate Duty. He is only allowed, when assessed for Super-tax, to deduct the actual sum paid as interest for Estate Duty. It is a sum on which Income Tax has already been paid, and I suggest that the proper amount to be allowed should be the gross amount required to produce the sum paid. I will not now, though I often have raised the matter, comment on the injustice of charging Super-tax on the gross amount, but I want to bring before the Treasury this point, and also the fact that the Royal Commission on Income Tax, which made no recommendations in the direction of calculating Super-tax on the net rather than on the gross insurance, did make a recommendation that where interest on arrears of Estate Duty is paid by a person liable to Super-tax, the deduction should be allowed on the gross amount which, after the deduction of the tax at the standard rate, would give the net amount—the actual amount of interest which is paid. That recommendation was made by the Royal Commission on Income Tax, and if the Chancellor of the Exchequer will not, as I fear he will not—although I mean to urge him to do so—allow the calculation of the Super-tax on net, I hope he will accept, at any rate, this recommendation made in favour of the unhappy persons who are paying interest on Estate Duty by instalments, and will probably have to do so for many years. I hope in his interests, the recommendation made by the Royal Commission will be accepted, and that this flagrant injustice, as I consider it, will be righted. I bring this forward because it is a very important point. It does not affect a very large number of people, but it bears very heavily on those whom it does affect, and I hope that justice will be done them in this matter.
For the rest, while thinking that the Budget unfolded is a very fair, prudent and reasonable one, and while confessing that, although the Income Taxpayer deserves some relief, I do not think the Chancellor of Exchequer could have done other than he proposes to do, and confessing further that the proposals as regards the redemption of debt are prudent and necessary, I would say I am extremely glad that the spirit of the speech recognised the obvious fact that when the world is poorer and when this country is poorer, when all our money has been spent, and we are deeply in debt, it is abject nonsense to talk about making people better off than before, and to keep the star of social reform in the ascendant, when, as a matter of fact, there is no money for carrying out those reforms. I hope that that recognition which really ran through the right hon. Gentleman's speech will be taken to heart by hon. Members, and that we shall have to listen no more to that doctrine. When a victorious country has defeated the greatest military nation in the world, it is absurd nonsense to talk about proceeding with Tuberculosis Bills, and Model Dwelling Bills, and all the other paraphernalia of social reform for which there is no money, but which are demanded by doctors, who say we are a decadent, disease-ridden C3 community. That, however, is not in the least characteristic of a country which, at one bound, became one of the greatest military countries in the world, and defeated a country which had devoted all its energies, ever since the days of Frederick the Great, to make itself a great military nation. I hope that all the grandiose schemes by which we were going to make this a new and a better world will now be abandoned, that the measures of economy recommended by my right hon. Friend behind me (Sir P. Banbury) will at once be brought into operation, and that we shall not attempt, to educate other countries as well as our own, and proceed with expensive schemes; the country cannot afford.
I hope also that the serious expense which is likely to result, I fear, from a strict adherence to the Covenant of the League of Nations will never be incurred, and that our platonic affection for these ideals will never be translated into actual fact at the expense of an overburdened country at a time when the taxpayer is having every burden piled on his already overburdened shoulders in order to provide for the non-working man. I note that the Income Tax yielded last year nearly £10,000,000 above what was calculated. Everything, in fact, comes on to the Income Tax payer. The right hon. Gentleman the Member for Derby (Mr. Thomas) complained of the expense of armaments, but he knows as well as every other hon. Member that each individual soldier and sailor to-day costs more than double what he did in pre-War times, and that the Army and Navy, therefore, are not larger. I do not approve of these ingenious methods of dealing with this question, and I hope the right hon. Member will reconsider his position, and put his facts on a right footing. Nor can I support without indignation the suggestion that a capital levy should be imposed on those who already pay an annual capital levy in the shape of Super-tax.
I wish to make an appeal to the Chancellor of the Exchequer on behalf of those engaged in business in the City and all over the country, to make an early refund in the cases of those who primâ facie have claims for a refund of Excess Profits Duty. Everybody connected with business knows that at this moment there are innumerable firms, perfectly solvent firms of high reputation, with stock produced by labour paid at uneconomic wages which is now unsaleable, and these firms have no money for carrying on. I do suggest that in cases where such firms have a claim against the State for the return of Excess Profits Duty, they might at once be paid cash in respect of that portion of their claim which is in no way doubtful, leaving only those portions which are likely to require prolonged examination to be paid at a later date. In that way the Chancellor of the Exchequer could preserve from ruin many firms which are really solvent, and he could also contribute in no small degree to the commercial prosperity of the country.
I should like further not only to congratulate the Chancellor of the Exchequer on his businesslike and prudent statement, but also on the handsome way in which he admitted the error last year in the calculations made as regards cigars and wines. In my own constituency, within becoming limits, we enjoy life, and I am extremely glad myself to see that the tax is to be reduced upon these concomitants of a genial and joyous existence. I see no reason to abstain from making that confession. The Chancellor of the Exchequer has honestly admitted the real facts in this connection, and I thank him for it, and for the relief which he proposes to afford. There is one other matter to which I should like to refer, and that is the Entertainments Tax. I believe the right hon. Gentleman has received £700,000 more from that source than he expected, and in view of that fact, perhaps he may see his way to reducing the impost, because in these times of depression, when people are at the end of a day's work and do not quite know whether they can sell their produce or what their position will be the next day, a little entertainment in life is not only a pleasure but it is extremely useful in keeping up their spirits. If a man goes to an entertainment, and gets a good cigar and a glass of wine without paying too heavy a duty on it, he is in a better position to face the world the next day and deal with business disappointments than he otherwise would be. Perhaps the Chancellor of the Exchequer will consider the position of the trades which are really suffering from the Entertainments Tax. There is, for instance, the cinema trade, and I repeat, that inasmuch as the tax has yielded a sum over and above what was expected, I would like to commend that trade to the consideration of the Treasury. My last words will be to congratulate the Chancellor of the Exchequer on his prudent and reasonable Budget, and to appeal to him to take into account what I have said with regard to the income taxpayer and the Entertainment Duty. I sympathise deeply with the right hon. Gentleman in what he said about the House of Commons which, in the 15 years I have known it, has always rushed from all quarters to approve, encourage, and incite every possible expenditure in every direction, particularly if it can be brought within the comprehensive orbit of social reform.
7.0 P.M.
I want to raise only one point, and that is whether, in a time of acute commercial difficulty such as we are going through to-day, the Government estimate of the yield of taxes is not excessive. I wonder if they realise, what every business authority tells me, that this country has never passed through such a time of industrial anxiety as it is going through to-day. When I see these figures I do not think that they realise how acute the position is, and how deeply it is true that one industry after another sees nothing in front of it, and that almost every industry in the country to-day is fighting for its life. I have been in business all my life, and unfortunately I am getting an old man now, but I have never seen anything approaching the industrial situation in seriousness. Everybody I meet tells me the same story. That being the fact, I am simply astounded that the taxpayer should be expected to raise £1,058,000,000 when you realise what the industrial position is. That is a note of pessimism. I do not like being a pessimist, but I am bound to be one this afternoon. The right hon. Gentleman is not a pessimist, his whole Budget is optimistic. When you come down to the plain facts of the case, to think that, without an enormous strain, which perhaps the industry of the country cannot support, you are going to get £1,058,000,000 between now and next year fills me with astonishment I am very doubtful whether the Corporation Tax, which was estimated to raise £30,000,000, and which only raised £650,000 last year, ought to be imposed. Then, take Income Tax and Super-tax—£410,000,000. Fortunately, the right hon. Gentleman has had a three years' average, and he has only had five bad months out of 36. I wonder, if he had got rid of his three years' average, and had only had one year's basis to go on, how the Treasury and the Exchequer would have fared. Although it is in the interests of the people for whom I plead that the three years' average should be abolished, I doubt if in the nation's interest the time has come for a Revenue Bill, to put the collection of Income Tax on a one year's basis.
I have serious doubts as to whether industry and commerce will be able to pay this amount of £410,000,000 for Income Tax as well as the £120,000,000 due for Excess Profits Duty. I do not think the Committee realises—no doubt some hon. Members do—the intense strain which every industry is feeling at the present time. The money will be due to the Government, but ability to pay may be wanting, therefore to produce these large sums of money during the course of the next twelve months, unless things alter very much for the better, may strain to the breaking point. It follows that the Customs and Excise will suffer. I prognosticate that the total sum of wages paid within the year will seriously fall because the money is not there to pay with, and therefore the receipts from Customs and Excise are likely to disappoint the Government very much. Although I have struck this note of very serious pessimism, and I am right in doing it, I feel sure that the Government have been right in proceeding with the greatest caution, and in trying to arrange their Budget so that they shall have a shot in their locker in the future, which may turn out to be a good deal worse than was anticipated.
I should like to associate myself with every word that has fallen from the hon. Member for Lime-house (Sir W. Pearce). It is partly on that account that I feel strongly that the Chancellor of the Exchequer has been well advised in introducing a Budget which, by no stretch of language, can be described as in any sense approaching to the heroic. I am convinced, as the hon. Member said just now, that no Budget has ever been introduced into this House in circumstances of greater financial and industrial gravity. In those circumstances I do not think that anybody could have anticipated anything in the nature of what is generally called a great Budget. There is no room in our present circumstances for heroics in finance. Twelve months ago I ventured to criticise the Budget which my right hon. Friend then introduced on the ground that it was too heroic, and I think that criticism has been justified by events. No one will describe this as a heroic Budget. I think they will apply to it the epithet which, under the drab circumstances of to-day, is a great deal more appropriate. They will call it a sound Budget, sound, I should say, given the conditions with which the right hon. Gentleman is confronted.
But I want to suggest to the Committee this question. Is it really the business of the Head of the Treasury simply to accept conditions; ought not the Treasury to be in a position to some extent to control conditions? What is the bed-rock of our financial situation to-day? Surely it is, when we have stripped away all accretions, that we are spending a great deal more than we are justified in spending. To an individual confronted by a parallel situation there are, as everybody knows, only two alternative courses. He must either increase his income or diminish his expenses. The moment, however, that you apply the same relentless logic to a Government, you discover a fallacy in the suggestion of increasing income, for there is this very important distinction to be drawn between an individual and a State or a Government. An individual can only produce a satisfactory balance-sheet by spending less or making more. It is not the business of the State to make at all. The function of the State is to take a portion of what is made by other people. I am afraid there is a very widely prevalent impression that a Government can take more by the simple expedient of increasing taxation. That is, up to a point, true, but we have had painful experience in the last 12 months to prove that it cannot always increase its revenue by increasing taxation. For example, take the taxation of cigars and sparkling wines. Twelve months ago I ventured to predict that the imposition of additional taxation would result in a diminution of revenue. That has been the result. My right hon. Friend the Member for Derby (Mr. J. H. Thomas) objected to the reduction of the taxes on sparkling wines and on cigars. I listened to him with amazement, if he ever desires to take part in the ruling of this country. What was his argument? He said, "Why, instead of reducing taxes on champagne and cigars, do you not reduce the tax on tea?" Surely my right hon. Friend knows perfectly well that the reason why you tax tea is that tea produces a revenue, and the reason why you do not increase your taxation on champagne and cigars is that they do not produce a revenue. After all, the first business of a Chancellor of the Exchequer is to select for taxation those objects which will produce a revenue. Champagne and cigars have lamentably failed to produce it, and I congratulate him on recognising that fact.
I was speaking just now of the relation of the State to the individual in matters of taxation. In the long run, the Government can only take more if individuals make more, and I would ask the Committee to remember that the more a Government takes the less an individual is apt to make. That is to say, that taxation may very easily defeat its own object. I am painfully aware that I am enunciating a very tedious and tiresome commonplace, but a proposition does not become a commonplace unless it embodies a truth, and therefore it is sometimes permissible to labour a truism. Now I want to apply these rather general considerations to the Budget, to the unfolding of which we have listened this afternoon. My first point is this. I am very strongly of opinion that the Chancellor of the Exchequer is still asking us to find too much money. Many of us thought so and said so a year ago, but very little heed was paid to that opinion, and for obvious reasons. Twelve months ago, as the Chancellor of the Exchequer told us this afternoon, industry and trade seemed to be basking in the sun of prosperity. I thought, at the time, that the sun was only a stage make-believe, and that there was in it no beneficent heat. The prosperity which followed the War was almost wholly fictitious and illusory. I venture to submit that the illusion was partly due to unsound finance, and in particular to the adoption of what I have always regarded as a most perilous policy in regard to currency. We have been told over and over again that what is known as the inflation of currency is not a cause but a consequence—that it is a consequence of the inflation of credit. I confess that I am only partially impressed by that argument, but, whether it be inflation of credit or whether it be inflation of currency, the results are equally disastrous to trade.
I am afraid that the birds are coming home to roost rather fast. A couple of years ago the Prime Minister is reported to have said that the experience of the past four years had proved to him that there was nothing whatever in the accepted doctrines of political economy. I should be very curious to learn whether he would be prepared to repeat that dogma in 1921. I wonder what the experience of the last two years has proved to him in this respect? To my mind, never since the time when the laws of wealth production and wealth distribution were first formulated have they more effectively demonstrated their truth and more triumphantly vindicated themselves than in these last six years. What is the outstanding feature of this period in an economic sense? It is that, in the course of the four years of War, the belligerent nations poured fifty thousand millions of money into the sea—or rather, what is a great deal more important, they poured fifty thousand millions of wealth into the sea. In an economic sense the whole of that is sheer and absolute waste. I should not have minded if it had been mere money—especially paper money—but it was not money, it was wealth. You cannot destroy that amount of wealth, especially when much of it is in the form of fixed capital, when much of it represented, as it did, the actual instruments of production—you cannot destroy that great mass of wealth without paralysing industry and entirely upsetting exchange. This paralysis, the unemployment from which we are suffering to-day, is the absolutely inevitable result.
What is the remedy? The only possible remedy is that the Government or the community—the community rather than the Government—must get the wheels of industry and the machinery of exchange moving again. How is that to be done? Speaking on a Budget Resolution, I feel quite certain that there is only one way of doing it, namely, by taking less out of the pockets of the taxpayers and letting capital do its legitimate and proper work. To-day people are actually borrowing to pay taxes; they are diverting their savings to the Exchequer. No Chancellor of the Exchequer can view that phenomenon without very grave disquiet and alarm. Mr. McKenna, in a remarkable address which he delivered some five or six months ago, called attention to this almost unique phenomenon, and other prominent financiers have since returned to the same subject. I confess that I hanker after that provisional Estimate which the Chancellor of the Exchequer put forward a couple of years ago. Whether it can be realised or not, I shall still continue to hanker after it, and also after another thing, namely, what is called the rationing of the Departments. I do not believe for a moment that real economy will ever be secured in the House of Commons or in the Treasury until some such expedient is adopted.
The right hon. Gentleman the Member for Paisley (Mr. Asquith) made an impressive appeal to the House of Commons to insist upon economy. May I suggest that there are only two possible ways in which the House can do that? The first is the method which, I understand, is likely to be presently adopted, namely, the setting up of an Estimates Committee. The Home Secretary, speaking for the Lord Privy Seal this afternoon, stated that the small informal Committee appointed to consider the matter has reported, as I understand, in its favour, and that the Government are now considering the matter. I hope we shall have an announcement from them at an early date. The date has been postponed again and again. No doubt the reasons for that were reasons which could not be controlled, but I would remind the Lord Privy Seal that I called attention to this matter on almost the first day of this Session, when I begged to know whether the Committee on National Expenditure was to be set up again, because the work of that Committee had been frustrated in the last two Sessions by the postponement of its appointment until after Easter. We are nearing Whitsuntide now, and still the Committee is not re-appointed. However, I understand that we may expect an early intimation from the Government.
The other point which I venture to emphasise is that you will never get economy in the House of Commons as long as a Vote in Committee of Supply is a Vote of Confidence in the Government, Therefore there must be a reform in our financial procedure. It is perfectly ridiculous that Members of the House of Commons, who are constantly being exhorted to economy, should be told, on every little item which they challenge in the Estimates, that if they go into the Lobby against the Government their action may possibly involve the fall of the Government. As long as that ridiculous convention is permitted to remain among the accepted conventions of the financial procedure of the House of Commons, we shall never get that economy to which we are constantly exhorted. I would urge upon those who are responsible for the ordering of the procedure of the House that this matter should be taken into consideration at the earliest possible date. It is not merely my suggestion. More than two years ago—some time in the last Parliament—when the Committee on National Expenditure was sitting under the chairmanship of Sir Herbert Samuel, it produced a very careful Report on the financial procedure of the House, and the two points which were most strongly insisted upon in that Report were those which I have ventured to bring to the notice of the Committee this afternoon—firstly, the appointment of an Estimates Committee, and, secondly, the necessity for such a reform of our financial procedure as would restore to the House of Commons its freedom of criticism in matters of finance.
I hesitate a good deal in expressing the opinion, but I do not think that trade and industry will be able to raise the money for which the Chancellor of the Exchequer is budgeting. Like the hon. Member for Limehouse (Sir W. Pearce), I have been in business for a considerable length of time—32 years—and I never knew trade to be in such a deplorable state as it is at the present moment, and I very much doubt the possibility of its being able to raise the money for which the Chancellor hopes. I feel doubtful in saying that, however, because the civil servants who administer our affairs at the Treasury are usually so accurate that at the end of the year we are made to look foolish if we prognosticate anything different as to the future totals of the taxes. With that reservation, I fall to see how the country can raise the amount for which this Budget provides. I am sure that the amount raised in taxation is too high for the country, and I think that that is the real interpretation which we as business men should put upon the figures which have been given to us today; but we have embarked upon a policy of social reform, and, unless we are prepared to scrap it, we have to make provision for raising the money with which to meet the excessive expenditure involved. I was glad to hear the statement of the hon. Member for Oxford (Mr. Marriott), under whose chairmanship I had the honour of serving on the Select Committees on National Expenditure, that there is some idea of reconstituting those Committees; but I fail to see what good they can do unless they lave the right to pass strong criticisms, with the hope of their being put into operation, upon the policy of the Government. If their work is merely confined to such problems as whether a particular civil servant should travel first class or third class, or whether in a particular case there should be 15 inspectors or 30, no great saving of money will be effected. They should have power to criticise and then to stop a policy if they consider it likely to cost more than the country can afford. Perhaps that is putting it rather high, but still the question of policy is the one upon which the whole efficacy of these Committees will hinge when we talk about economy.
My hon. Friend made what I think is a good point. I do not really see what good it is to the country for the Chancellor of the Exchequer to take such large sums from us manufacturers in order to pay off debt which is costing us 6 per cent. for interest when he could leave the money with us and we could make it yield 10 per cent. and pay taxation upon it. I know that there is a certain amount of debt which must be paid by the Chancellor of the Exchequer. He has handed to him bonds or securities in payment of taxation, and money must be found for that; and then we have certain debts to pay to foreign lenders, and loans to take up, for which money must be found. But, except for the purpose of meeting pressing debt, repayment for which we have contracted, such as paying off sinking funds on the various loans, and refunding money which has been presented to the Treasury for Estate and other duties in the form of securities, I think it would benefit the country more, in these times, to leave the money with the manufacturers and let them make 10 per cent. or 15 per cent. on it, if they can, and pay to the Government taxes upon it, leaving the Government to pay the 5 per cent. or 6 per cent. which it has to pay out of such taxes for interest on Government loans which otherwise would be repaid. My hon. Friend (Mr. Marriott) wandered down the primrose lane of currency and touched upon what he called inflation of currency, though he mentioned the possibility of its having arisen out of inflation of credit. He attaches, however, to the inflation of our currency an importance which I myself certainly do not attach to it. For instance, we have £330,000,000 in paper Treasury notes at the present time. To show that the existence of those notes has not the importance which my hon. Friend attaches to it, I would ask him this: Supposing that he went to the Treasury and, as I have said before in this House, found a box in the Chancellor of the. Exchequer's cellar containing 330,000,000 sovereigns—if that were possible—and that he took those sovereigns and redeemed every one of those notes with them and burnt the notes, what good would he do the financial state of this country? My hon. Friend would think it would do good, but really it would do a great deal more harm than good to reinstate that paper in metal. It would cause such an inflation in credit and in the value of goods in this country that it would do a great deal more harm than the issue of 300,000,000 notes with no metal reserve behind them. In order to test these things one must always take them to their logical conclusion, and in order, therefore, to show further the fallacy of dealing in a sweeping statement with the inflation, so called, of the currency, to which my hon. Friend attributes so many of our troubles, I would ask him this other question: Suppose the Chancellor of the Exchequer were to go into the market and buy with Bradburys £300,000,000 worth of silver bullion tomorrow at 3s. an ounce and coin it into shillings and half-crowns at 66d. an ounce. He could unload them on to the public at double the price he paid and make nearly 100 per cent. profit on his purchase and tear up his notes. But what good would that do? We should have a redundance of currency, high prices, inflation of credit, and all other evils attendant thereon. I think my hon. Friend will find, if he studies it very carefully in those lights, that what he calls inflation of the currency has, as one of the causes of our present troubles, not so much in it as he thinks.
In listening to the Budget statement I looked to see if I could find a gap that I could get through easily and land on the other side. I could only find two gaps in the right hon. Gentleman's fence—two weak spots. One was that which has been drawn attention to by the hon. Baronet (Sir W. Joynson-Hicks). I do not know what we are going to do in two or three years' time when the widow's cruse of the Ministry of Munitions surplus store is exhausted. That surplus store undoubtedly provides us at present with the major portion of the money which we use for the redemption of debt, but the time must come when that store of assets will be exhausted. I very much doubt when the stores are exhausted whether the population increase or the increase of trade during the next two or three years will enable us, without further heavier taxation, to meet the necessary repayment of debt, or even to balance the Budget, without finding some other means or some asset which I think will not be found in the Surplus Stores Department. I should like the Chancellor of the Exchequer to tell us, if he can, what he proposes to do with regard to our total expenditure, unless that total is very greatly reduced, when the Disposal Board store is exhausted. Then I have not understood this: I have listened to the Leader of the House about the conversion of the National War Bonds, and I congratulate him on making a start on what is really a funding of the Floating Debt. Undoubtedly some of these Bonds which are nearly due have become floaters in the market, and this is the first step towards what the whole country has been asking about for some months past—the funding of the Floating Debt. Treasury Bills are not the only form of floating debt. I do not understand why he has brought this operation into work before a reduction in the bank rate. Mine is a manufacturing mind and not a financial mind, and as a manufacturer I do not quite understand why he has not taken advantage of the expectation that he should ask the Bank to reduce the bank rate. If it had been reduced British 5 per cent. War Loan, instead of standing at 89, would probably be at 91 or 92, the general level of British stocks would be a point or two higher, and it would considerably help the conversion of these short dated bonds into the new 3½ per cents. I should like the Chancellor of the Exchequer to give my manufacturing mind the financial reason for not taking that step which we have all expected.
There is an element in the conversion of these 5 per cent. bonds of £100 into sums of £163, £162, and £161 nominal which I am afraid will have a very bad effect upon the minds of the people. It is perfectly true that you do not add much to the amount of interest which will be paid out of the national funds by adding to nominal debt capital, but many people will fasten on that point and say you have added something like £400,000,000 to the nominal dead-weight debt of the country. I am aware that it does not add to our actual obligations a single sixpence, because this new loan can only be redeemed at the option of the Chancellor of the Exchequer for the time being. We cannot force him to give our money back in 1961. He only does it if he likes, and this loan will become for all practical purposes a perpetual annuity, and, of course, a first-class security. Now that people are not putting their money into the land as they did generations ago, I can conceive no finer form of security than one which people can buy to hold almost in perpetuity, unless money gets very cheap indeed and a further conversion becomes possible, a British Government security, secured upon the good faith of this House, yielding £5 16s. for their children and grandchildren, for charitable institutions or institutions such as colleges, and for ecclesiastical funds and other general funds of families which are to be held as capital without being distributed. Therefore I look upon the loan as an exceedingly good one, but the public mind will have to be soothed, or otherwise we shall have the right hon. Gentleman (Mr. Asquith) saying next year, "I see the debt to-day as compared with 1919 is £400,000,000 more." It will not convince us here, but in the country he will be able to say that we have added £400,000,000 to the debt this year. It ought to be made perfectly clear that it is a nominal addition and amounts to nothing to the country's detriment. One thing has occurred to me with regard to the funding of the debt. The actuaries of the Alliance Insurance Company, I think, made a very interesting experiment years ago. When the Great Indian Peninsular Railway was bought by the Government the holders of the stock were given two forms of annuity at the suggestion of those actuaries—one which was repayable in 1948, and one which yielded a higher revenue but was not repayable at all, but passed away with the effluxion of time. I think there must be a large number of people who have saved money—civil servants, men who have retired, small shopkeepers, some with children and some unmarried—and I should have thought a type of annuity like the G.I.P. "A" annuity would have appealed to investors, giving them 6, 7, or 7½ per cent., according to the market value, for 30, 40, or 50 years. Why not offer to the public a terminable annuity running for 30, 40, or 50 years, yielding a rather higher rate of interest than War Loans, but dying at the end of what might be termed one life or a life and a half? A large amount of stock of this type of "A" annuity was taken by British investors in return for Peninsular Railway stock in India 25 years ago.
I should like to say a word or two about what fell from the right hon. Gentleman the Member for Derby (Mr. Thomas). I do not like to allow to pass unchallenged, and I do not think the Government should allow to pass unchallenged, the suggestion that the interest on any British Government security should be reduced, in order to reduce the burden of taxation. In the early part of 1918, I, in common with most Members of the House, went through the districts where we were known and pledged our faith and the honour of the House and the Government that a certain interest should be paid, and persuaded people to take up Government loans. It is a most disastrous thing to allow anyone in the House to breathe the suggestion that we should vary the contract then made in order that we might raise money to carry on the War. After all, it is not only immoral but it is very foolish. Once people get the idea in their heads that there is the slightest doubt about the contract being carried out, you will make it difficult for our children and our grandchildren when we are assailed again, as undoubtedly we shall be, by a foreign enemy, to raise money by loan, because those who come after us will point to what happened in these days when a promise was broken.
People talk round about economy. One hon. Member said he would give good marks to Ministers who would reduce their expenditure. I wonder how you will get the Minister of Education to reduce the amount of money that is spent upon his Department? You will not get a sixpence. It may be for good or for bad. I am aware, that education is a first-class thing, but to talk about getting Departmental heads to reduce their expenditure you will get nothing out of it. There is, I think, a scandalous habit of Government Departments putting Supplementary Estimates upon the House running into tens of millions of pounds. One of the first methods of getting down the expenditure is for the House to give instuctions to the Government that we will not pass a single sixpence of Supplementary Estimates, year in year out, unless expressly authorised by this House. These Supplementary Estimates are one of the main causes of extravagance in expenditure. Government Departments think they can go ahead on Supplementary Estimates and we shall pass them. If we made up our minds for a year or two not to pass them, I believe the effect upon the Government Departments would be so great as to reduce taxation. I should like to say a word of gratitude about the Excess Profits Duty and decreased value of stocks. I took a very considerable part in the deliberations in the Association of British Chambers of Commerce on that point, and we sent a deputation to the right hon. Gentleman in regard to depreciation of stock, and he apparently has met us in a liberal spirit. We felt about that point that we were being persecuted. It was unjust that we should have to pay duty in respect of stock the value of which had fallen and we could get no redress. There was great bitterness about the position in which we found ourselves, and I am exceedingly glad the Chancellor of the Exchequer has agreed to do something on the lines he has indicated. He is about to remove a grinding injustice.
The other weak point in the Budget is the foreign debt. That foreign debt is one of the gravest troubles to us and, one of these days, if we should have international complications it might affect us very injuriously. It is not likely that we shall ever have any cause of quarrel with America, but we ought to make up our minds what we are going to do about that foreign debt. We may have to pocket our dignity and say, "You must take it over and help us out of it. You did not come into the War till late and therefore you ought not to charge us." But if we are not going to do that we ought as a proud people to say we will pay it and we ought to take some steps to pay it. There are one or two ways in which it might be done. It can be done, I think, by the Government taking over the bills or securities which will be sent to us in payment for the goods we send abroad as the increase of our foreign trade proceeds and giving us, almost in the way of a forced loan I am sorry to say, British Treasury Bills or other securities. The Government could send our foreign bills with other instruments which are payable abroad to the United States for them to collect from our debtors. The proceeds could then go to reduce British debts held in the United States. Of course, that is a very extreme way of paying the debt; but we have to make up our minds what we are going to do in regard to it. It will not do to let it hang over our heads very much longer, or as an alternative I hope something will be done in the way of transferring the debt to Germany. The manufacturers of this country have a good opportunity of reopening our trade with Mexico; I do not know for what reason, it may be because the United States have not made up their minds what they are going to do, but we have even not yet recognised the Mexican Government and reopened trade with Mexico. If we had credits set up in Mexico in gold dollars it might be of very great advantage to us in paying our debt to America. I should like to know why our Foreign Office or our Government have not made up their minds and without further procrastination to come to some arrangements with the United States in regard to the recognising of Mexico. That might be a very good help in securing funds for the paying of our American debt.
I have come to the conclusion that the other way that is justifiable for paving the debt is the one which was described a year or so ago by Mr. Keynes, that is, to have a general cancellation of War debts all round. I think it would not be wrong on moral grounds, and that it is sound on business grounds, for us to advocate the cross-cancellation of money which is due by us and money which is due to us by our Allies. I believe in the long run, though it seems a curious and almost paradoxical method of paying the debt, it would be a good thing if we were to say again to France, Italy, and our other Allies, "We are perfectly willing to forgive you your debt to us if America will forgive us our debt to her." We could then say to America, "We have made this firm proposition to our Allies. Will you, on your side, if we pocket our pride, forgive our debt to you?" That may be regarded as an act either of generosity or of sentiment, but I believe that it would be a sound policy in economics. I hope that an effort will be made to carry it out. On the whole, I think this is a fairly sound Budget, if we acquiesce in the principle of the amount to be raised by taxation. Beyond the two points to which I have drawn attention, I do not think there is much with which I can find fault; but I shall be surprised if the money which the Chancellor of the Exchequer thinks is going to be raised by taxation this year will be eventually raised. I am exceedingly glad to find that he has made a beginning to fund the Floating Debt.
The only reason that I rise is to endeavour to answer a question and to make an appeal. The question arises out of a certain confusion of mind on the part of right hon. and hon. Gentlemen who occupy seats above the gangway on this side of the House with regard to the most elementary and fundamental principles of finance. They constantly ask why we cannot assume the easy and flowery path of increased taxation or by a capital levy, instead of the thorny path of economy and increased production. That question can be answered in one minute. The reason is that increased taxation or a capital levy means the crippling of our industries and the handicapping of our products in the markets of the world, whereas real sound economy in this country and increased production means that we have increased sources from which wages are paid, that we can produce more economically, and, therefore, secure our position in the markets of the world. That is so elementary that it may perhaps appear childish to me to reply; but I would really appeal to hon. Members to clear their minds on this subject. There is only one way in which we can hold our own in industry and keep our position in the world, and that is by increased production and by true economy. I appeal to hon. Members very strongly to use their influence in the right direction, and instead of trying to increase industrial difficulties to try to smooth the difficulties from which we are suffering, and to use their influence with the miners, and with every other class of labour in this country to be reasonable and unselfish, and to help all of us who are trying to do our best to economise in every way, and to help us to pull through the grave financial difficulties with which we are faced. If they will really give us assistance in that direction, they will deserve and receive the sympathy and support of the people as a whole who will be truly grateful to them for coming for- ward to do their part in saving our country in a very difficult position.
I should like to ask the Leader of the House what arrangements are made for the continuing of the discussion. We have already gone beyond the hour of discussion according to custom. I have put down two Amendments raising the question of the Tea Duty and the Sugar Duty. Perhaps the right hon. Gentleman has something to say which would guide the Committee on the matter?
In regard to the statement with which the hon. Member concluded his question, I may say that I hope he will not think it necessary to move Amendments on the first night of the Budget discussion in Committee. That is very unusual. I hope he will have some consideration for the convenience of others, and that he will not take a course which is very inconvenient, and which is almost entirely, if not absolutely, without precedent. He will be able to raise all his points on the Report stage of the Resolutions or later in Committee and on Report of the Bill, and I hope he will be content with the manifold opportunities for discussing the same point over and over again which our financial procedure gives on occasions of this kind. Usually the general discussion closes at or before the hour at which we have now arrived, and we resume it, with the permission of the Chair, on a Resolution which is specially reserved for that purpose tomorrow. If we have the sanction of the Chair, I propose to reserve the Resolution for the general amendment of the law until to-morrow in order that Members who would like a little more time to consider the statement which it was my duty to make, of others who are unable to speak to-day, may have an opportunity of continuing the general discussion to-morrow. We shall take the other Resolutions to-night, and reserve that Resolution for the general discussion to-morrow.
It is the usual practice on the first night of the Budget discussion to hold over the Resolution to amend the law, and then the whole scope of matters relevant to the finance of the year will be open to discussion on the second day.
I am very reluctant to enter into the Debate this evening, but certain things have been said in the Chancellor of the Exchequer's statement which compel me to say a few words. Moreover, the hon. Member for Farnham (Mr. A. M. Samuel), in dealing with the statement made by the Chancellor of the Exchequer, asked what guarantee could be got from the Education Department so far as cutting down of expenditure is concerned I hope that we are not going to look for economy from the educational side, because it will be a penny wise and pound foolish policy. The hon. Member also made reference to a statement which apparently had been made by my right hon. Friend the Member for Derby (Mr. Thomas). He asked the Government not to accept the point of view expressed by the right hon. Member for Derby as to the possibility of considering the lowering of the interest on money invested in Government stock. He referred to it as being immoral, and certainly unwise to reduce the interest upon borrowed money. I hold that view. I believe that when pledges are given that the pledges should be honoured, and I want to make the same point in regard to the hon. Member's references to the Education Department. The Education Department through the instrumentality of this House, passed an Act in 1918 that is not being honoured, but which is being left in the background. If it is right to ask the Government to honour loyally the pledge given upon every public platform with regard to the interest on money lent to the Government, it is equally right to honour the position of the people who come within the realm of the Education Act of 1918. I am looking forward to the time when this House will say very definitely that Supplementary Estimates must go by the board. I believe that it should be possible to dispense with Supplementary Estimates, and that the only Supplementary Estimates that ought to be passed by this House are those that are absolutely necessary in connection with vital matters affecting the life of our nation.
8.0 P.M.
I want particularly to express my regret that the Chancellor of the Exchequer has again felt it necessary to go forward with the Corporation Profits Tax, and in doing so I have behind me a very good consensus of opinion from gentlemen who are well known in the business world. If my information is correct, even the greatest amalgamated business there is in the country that is federated to the British Federation of Industries protests against the Corporation Profits Tax. I am at a loss to understand why this tax is continued. It is proved by the figures that have been presented to us that the yield is unprolific. The Chancellor of the Exchequer estimated a yield of £3,000,000 this year, but the yield is only £650,000. If in the first 12 months of the application of the tax it can only yield £650,000 out of £3,000,000, how can the Chancellor of the Exchequer logically say that next year there is a likelihood of getting from it £30,000,000? Unless the Chancellor of the Exchequer has more information regarding this question, I feel it incumbent upon me to ask him to reconsider the advisability of going on with this tax. The method of taxing one section of people over the others in the application of this tax is unwise. Why should these corporations, no matter who they may be, be singled out for a special tax over and above all other forms of taxation to which they are subject? There never was in our history a time when industry needed to be rehabilitated more than at present. While the working classes in this country are struggling almost for the right to live, there are thousands of business men who cannot make ends meet. The fluctuation of prices, with world markets as they are, all have a vital effect on our industry. If this tax could be removed and the whole thing reconsidered, say, 12 months hence, it would, during the next 12 months, give business men a glorious opportunity of endeavouring to revive trade and industry.
It has been proved that trade cannot be revived as it ought to be when legislation is passed which impedes its progress. I hope that the Chancellor of the Exchequer will explain as the Debate on the Budget proceeds, how he can estimate the sum of £40,000,000 during the current year when he only received £650,000 out of the £3,000,000 estimated 12 months ago. It may be said that the £30,000,000 includes the arrears for this year, but these arrears are only £2,500,000, and deducting that from that £30,000,000 we have £27,500,000 to find, which is £24,000,000 more than was estimated for last year. The levying of a tax of this description upon particular sections is calculated to be particularly inconvenient and liable to prevent large trading concerns and organisations from moving towards that development which will give our country the premier place in the world which at the moment is so essential. I rise to offer my protest against the prolongation of this tax. As the Debate proceeds I will find it necessary to move various Amendments with reference to this tax. While certain taxes can be alleviated or relieved, a tax that affects industry and almost every organisation in the country is being continued for 12 months.
The hon. and gallant Member below the Gangway (Lieut.-Colonel Meysey-Thompson) appealed to Members on these Benches to use all the influence we command to endeavour to get the workers of the country to be reasonable in their demands. With that I heartily agree. He referred particularly to the miners' case. If the conditions that today are being enforced on them be taken fully into consideration it would be extremely unreasonable for these people to submit to them; but the Government have never yet been prepared to consider the advisability of the capital levy. There may be various points as to the principle of this capital levy that this House could not agree upon, but just as in the past it has been easy to arrange compromises on many important issues, it could easily arrange a compromise of that important question which would bring in a great yield to the country and assist to relieve its burdens at this crucial moment. I hope that between now and the Report stage the Chancellor of the Exchequer will be able to explain how we can get that £30,000,000, and upon what basis he is reckoning in order to secure it so that the House will be in possession of the full facts, and that at the opportune time the necessary Amendments may be moved to have this tax removed from the Statute Book.
When the Lord Privy Seal brought in the Budget last year one of the most important Royal Commissions, the Royal Commission on Income Tax, had just presented its Report. The Lord Privy Seal told us that he had not had time to go into its recommendations and therefore he was not going to introduce any of them into his Budget, but he did promise us that we were to have a Revenue Bill if not last year then this year. We have not got the Revenue Bill which was promised. We have got a Revenue Bill which hardly deals with the recommendations which were made by the Royal Commission. One of the most important matters which the Royal Commission dealt with was the liability of co-operative societies to make contributions to the State. If hon. Members will take the trouble to read the Report of the Royal Commission they will notice how many paragraphs are occupied with the report of the Royal Commission on that subject, and they will see that page after page of evidence was given by witnesses for and against, and that the Commission reported almost unanimously in favour of a tax on cooperative societies. On page 121 they report: purposes of education. Sometimes the reserve funds are used for other purposes beyond education.
For instance, the other day I noticed that one particular co-operative society, the Ripley Society, made an allocation of £13,000 to the Miners' Federation as strike-pay during the present coal strike. It was their own money and they could do that with it; but why should not that money bear its fair share of taxation? Suppose that some other big concern, say Harrods' Stores, had made a grant of £13,000 to a particular union of which I happen to be a member, they would have a perfect right to do that; but Harrods' Stores would have already paid 6s. in the pound on their reserve fund. This the co-operative societies have failed to do. It is useless for the co-operative movement to shelter itself behind mutual trading. It is useless to represent that it is an aggregate of poor men whom it would be unfair to tax. The aggregate of poor men who are being over-taxed at present are the small retail traders up and down the country. Hitherto the retail traders have been unorganised. Now they are organising themselves fast, and are managing to attract powerful support from other interests, and it is foolish to imagine that this great interest of the retail trader is going to sit down tamely any longer and to submit to paying the heavy burden of taxation and heavy rates when it's open and avowed competitor in business, who says that he is out to smash it, is let off this particular tax. May I remind the Committee of what the cooperative movement has said is its object: Income Tax, and the Royal Commission has recommended that they should do so. We intend to press the Chancellor of the Exchequer to make them pay.
It ought to be said in fairness, that the movement to which the hon. and gallant Member refers is in many cases paying 6s. in the £1 where other people are paying only 3s.
The fact remains, that if the co-operative societies put into the reserve fund £10,000 they do not pay Income Tax on it, but that if the Army and Navy Stores put £10,000 to reserve, they pay 6s. in the £, bringing the reserve fund down from £10,000 to £7,000. That is unfair. I hope the Government will recognise the injustice of what is being done. There are thousands of men and women who normally support the present Government, but from experience I can tell the Government this, that if the Government fail to deal with this matter at the next election and those votes are wanted by the Government, the Government will not get them. The issue is outside party lines, and the thousands of traders concerned have no animus against the co-operative movement. But they ask for fair treatment, and if the Chancellor of the Exchequer does not give them what they think is their fair due, hundreds of thousands of votes will be lost to the Government. Before the Finance Bill becomes an Act, I hope something will be done to remedy this injustice.
It is a great pity that my hon. and gallant Friend should have made the speech to which we have just listened. He spoke of a million or more of money being put to reserve and gave other figures. But he also pointed out that there were 4,000,000 members of the co-operative movement. If you divide his seemingly big figures by 4,000,000, it does not come to very much. The amount put to reserve is equal to about 6s. or 7s. per member. Surely that disposes of his allegation that the members are not poor men? The great mass of members is made up of poor artisans and labourers, or people very little above that level in worldly goods. The hon. and gallant Member spoke of the money put to reserve and asked why it should not be taxed the same as the reserve fund of the Army and Navy Stores. There is this great difference. Anybody can become a member of one of these working men's co-operative societies by paying 1s. or 1s. 3d., or even 6d. in some cases, and thereupon he becomes entitled to a proportion of the reserve. That is not so in the Army and Navy Stores. The reserves are not private property for the profit of individuals. They are funds put down for the benefit of the whole community, if the whole community likes to come in and take a share of them. Then the hon. and gallant member asked why should not the profits be taxed, and he deprecated the argument about mutuality. That argument is perfectly sound. If the millions in the co-operative movement combine to buy their goods in common and to manufacture for themselves they are not making a profit in the same sense as I should be if I started an ironworks, sold the iron to the public and took the difference in price for myself. It is a purely mutual transaction, and the surplus is not profit in the proper sense. If the Chancellor of the Exchequer did make the societies pay there would be millions of claims for repayment because every member whose income was below the Income Tax limit would have the right to claim a rebate.
These things were very carefully considered last year by the Chancellor of the Exchequer and his expert staff. The most important experts on the Income Tax Royal Commission realised at the time that they were fatal to the proposal that the surpluses of mutual trading should be taxed, and when the Chancellor of the Exchequer came to consider those arguments he very properly decided that it was impossible to consider these surpluses as profits in the same sense as surpluses of ordinary trade profits. As that question was so thoroughly considered only a year ago I cannot understand why the hon. and gallant Member should think it necessary to raise it again now.
Question put, and agreed to.
Continuation of Additional Medicine Duties (Excise)
Resolved,
"That the additional duties of Excise upon medicines imposed by Section eleven of the Finance (No. 2) Act, 1915, and continued by Section two of the Finance Act, 1920, until the first day of August, nineteen hundred and twenty-one, shall continue to be charged as from that date until the first day of August, nineteen hundred and twenty-two.
And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."
Wine (Customs)
Resolved,
"That in lieu of the additional Customs duty of five shillings per gallon and the further additional Customs duty equal to thirty-three and one-third per cent. of the value of the wine now chargeable on sparkling wine there shall on and after the tenth day of May, nineteen hundred and twenty-one, be charged on all sparkling wine imported into Great Britain or Ireland an additional duty of twelve shillings and sixpence per gallon.
And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."
Income Tax
Charge of Tax
Resolved,
"That—
Reliefs
Resolved,
"That— And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect tinder the provisions of the Provisional Collection of Taxes Act, 1913."
Excess Profits Duty
Resolved,
"That—
( a ) in the case of a trade or business which was commenced after the fourth day of August, nineteen hundred and fourteen, Excess Profits Duty shall be charged for the period (whether an accounting period or a part of such a period) ending on the thirty-first day or December, nineteen hundred and twenty, and that period shall be the last accounting period for the purposes of the said duty; and
( b ) in the case of a trade or business which was commenced on or before the fourth day of August, nineteen hundred and fourteen, Excess Profits Duty shall be charged for the period (whether an accounting period or a part of such a period) ending on the expiration of eighty-four months from the date of the commencement of the first accounting period of that trade or business, and that period shall be the last accounting period for the purposes of the said duty; and
( c ) in the case of a trade or business formed by the amalgamation after the fourth day of August, nineteen hundred and fourteen, of two or more trades or businesses, Excess Profits Duty shall be charged for the period (whether an accounting period or a part of such a period) ending on the earliest date on which the said duty would have ceased to be chargeable in respect of any one of the constituent trades or businesses if it had remained a separate trade or business, and that period shall be the last accounting period for the purposes of the said duty:
Provided that where a trade or business is after the termination of its last accounting period amalgamated with another trade or business it shall not for the purposes of the said duty he treated as part of the trade or business with which it has been amalgamated; and
( d ) assessments and additional assessments in, respect of Excess Profits Duty may be made at any time unless and until Parliament otherwise determines."
Amendment of Law
Motion made, and Question proposed,
"That it is expedient to amend the law relating to the National Debt, Customs and Inland Revenue (including Excise), and to make further provision in connection with Finance."
Motion made, and Question, "That the Chairman do report Progress, and ask leave to sit again," put, and agreed to.—[ Lieut.-Commander Hilton Young. ]
Resolutions to be reported To-morrow.
Committee report Progress; to sit again To-morrow.
Treaty of Peace (Hungary) [Expenses]
Resolution reported,
"That it is expedient to authorise the payment out of moneys provided by Parliament of expenses incurred under any Act of the present Session for carrying into effect the Treaty of Peace between His Majesty and Hungary."
Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
I thought the Under-Secretary of State for Foreign Affairs was going to make a short statement in reference to this Resolution, but perhaps it will serve the purpose if I ask him one or two questions. This Resolution was taken last Thursday by agreement late at night, and I have no desire to delay the proceedings at all, but I would like to have an assurance from the Under-Secretary of State for Foreign Affairs, with regard to the size and the membership of the various missions in Hungary who have the duty of carrying out the provisions of this Treaty and similar duties in that Kingdom or that Republic, as I believe it is now, and particularly I wish to ask whether steps have been taken to reduce the numbers of the officers and officials on these missions to the lowest possible figures? The House will be aware that in theory the expenses of these Missions are recoverable from the country in question—in this case Hungary—but in practice, I am afraid, owing to the financial state of that part of the world, it will be a very long time before these sums are recovered, if indeed they are ever recovered. I particularly have in mind the case of the naval mission which went to that part of the world to carry out the disarmament, or internment, or destruction, or handing over, or whatever it was, of the naval vessels. The force in question was very small, but I believe each of the Powers concerned sent an admiral. There were British, French, Italian and Japanese admirals, and I am not sure that there was not also an American naval officer. Every one of these persons had his secretary, his flag lieutenant, and his other staff officers, and they made a very imposing array of high naval dignatories; yet they had to deal only with five monitors and a couple of motor boats. It was, of course, a matter for jest whenever the facts became known, and one of the jokes in naval circles was that people for whom there was no other employment were sent to disarm the small and helpless force. Most of these naval people have been transferred to other duties, and I hope they are now home. This is an example of what goes on; but the attention of the Foreign Office having been drawn to the matter on a previous occasion, I believe the Foreign Office is doing its best to have the numbers of these missions reduced.
The other case is that of the military mission in Budapest. My colleague the hon. and gallant Member for North West Hull (Colonel Lambert Ward), during the Debate on the Austrian Peace Treaty, drew attention to the great size of the British military mission in Vienna and I think he included in his remarks the mission in Budapest. Last year that mission consisted of a great number, and as it seemed to me from what I heard, an extravagantly large number. In view of the serious financial statement which has been presented to the House to-day and which we have just finished debating, we are entitled to ask that these missions should be reduced to the lowest possible number. It is a real economy and it could be effected. Their work should be wound up at the earliest possible moment. I only want to ask one other question and that is in regard to Item B in the Explanatory Paper which has been issued dealing with the International Commission on the Danube. There was an International Commission before the War representing the Powers interested in the Danube, and on this Great Britain had a seat. It did extremely good work in adjudicating between the different riparian powers on the Danube, in arranging Custom Duties and in removing obstacles to trade. I want to know, is this the same body for which we are now asked to find the necessary money? Has the old Commission been revived or has it been replaced under the Treaty of Peace? It is not absolutely clear what has been done and I should like some enlightenment on the matter. The old International Commission did very fine service in facilitating the trade of all nations on the Danube and I hope its good services will be continued. Anything we can do to remove obstacles in the way of trade or transit, either up the rivers or over the railways leading into Hungary, will be of great benefit to the commercial community in this country.
When we took this Resolution in Committee, I was not furnished with exact details either in regard to the finance or the personnel of these different missions, but I have caused a statement to be prepared and I think a few details from that statement will satisfy my hon. and gallant Friend and also the House.
Is it the White Paper?
It is illustrating and amplifying the White Paper. Let me take these missions seriatim. It would be well, I think, if I made a general statement in regard to the missions apart from those to which my Friend has referred, because there will be other Members of the House interested in other missions. In regard to the mixed arbitral tribunal, the House will be glad to learn that the personnel is extremely limited, and His Majesty's Government will be chargeable to the extent of about £5,000 a year. The International Commission of the Danube was constituted under the Treaty of Versailles, and I therefore think that it cannot be regarded as a direct successor of the original Danube Commission. The total British share of the cost of the Commission is about £5,000 a year. In the case of the Boundary Commissions, of which there are four, the personnel consists in each case of five British persons—one Boundary Commissioner, one topographer, one clerk, and two motor drivers—and the expenditure, except in regard to the Army pay, is recoverable half from the Hungarian Government and half from the other State interested. It is not possible to give particulars of expenditure in regard to the Commissions of Control or the Reparations Commission, as these are not yet constituted, and will only be constituted when the Treaty of Peace has been ratified; but in any case the expenses of these two sets of Commissions are chargeable to the Hungarian Government. I think the House will be satisfied that the personnel is kept within as narrow limits as possible—and certainly anything I can do to influence that result will be done—and that the expenses charged to the Government are in no case excessive. My hon. and gallant Friend referred to the possibility of repayment as being rather remote—I mean that part of the expenditure which falls to be met by the interested States. I am sure he will be glad, and I shall be glad, if he turns out to be mistaken in that respect. I can confidently assure the House that the charges under this Resolution are extremely moderate.
Question put, and agreed to.
Treaty of Peace (Hungary) Bill
Considered in Committee.
[Sir E. CORNWALL in the Chair.]
CLAUSE 1.—(Power of His Majesty to give effect to Peace Treaties.)
1.—(1) His Majesty may make such appointments, establish such offices, make such Orders in Council, and do such things as appear to him to be necessary for carrying out the said Treaty, and for giving effect to any of the provisions of the said Treaty.
(2) Any Order in Council made under this Act may provide for the imposition, by summary process or otherwise, of penalties in respect of breaches of the provisions thereof, and shall be laid before Parliament as soon as may be after it is made, and shall have effect as if enacted in this Act, but may be varied or revoked by a subsequent Order in Council, and shall not be deemed to be a statutory rule within the meaning of Section one of the Rules Publication Act, 1893:
Provided that, if an Address is presented to His Majesty by either House of Parliament within the next twenty-one days on which that House has sat after any Order in Council made under this Act has been laid before it praying that the Order or any part thereof may be annulled, His Majesty in Council may annul the Order or such part thereof, and it shall thenceforth be void, but without prejudice to the validity of anything previously done thereunder.
(3) Any expenses incurred in carrying out the said Treaty shall be defrayed out of moneys provided by Parliament.
I beg to move, in Sub-section (1), after the word "appointments," to insert the words "excepting the appointment of representatives for the Assembly of the League of Nations."
In the Treaty of Peace with Hungary the Covenant of the League of Nations is embodied, and therefore, presumably, the appointments for the carrying out of the Covenant are covered by the Clause, and if the Amendment commends itself to the Committee, that will leave the Government full freedom of action to appoint any officers for the carrying out of the ordinary Clauses of the Treaty, but will reserve for this House its responsibility in the appointment of representatives to the Assembly of the League of Nations. I had the honour of raising this matter when we debated the Treaty of Peace with Bulgaria, and on that occasion the Government did not see their way to accept the Amendment, but this Amendment differs from that in the following respects. In the first place, my similar Amendment dealt with the Council and the Assembly. I am less ambitious here, and shall be content if we can have some say in the appointment of our national representatives or delegates to the Assembly. Secondly, since we debated the Committee stage of that Bill, the Assembly has actually met, and instead of fulfilling the prophecies of gloom which were freely made about it, I think the hon. Gentleman in charge of the Bill will agree with the rest of us, that the first Assembly of the League of Nations was a surprisingly successful venture. Many of the forebodings about it were falsified and the attention of the civilised world was riveted upon it. It received more public attention and, in fact, approbation in other countries than in our own, I am sorry to say, but especially in neutral countries it was a very great event, and was so looked upon by the public, and undoubtedly set the seal of success on that portion at any rate, of the great machinery of the League of Nations.
When President Wilson, who, although not the father of the great idea of the League of Nations, was one of its great prophets, and who lent his great weight and authority to the formation of the League, described it to his fellow citizens in the United States, he made it perfectly clear that the representatives on the Assembly should not only be the nominees of the Government of the day in each particular country. He went so far, in fact, as to say that the representatives of a country need not be members of the Government at all. It is a most remarkable fact that he made that very clear, and my recollection of his speech was confirmed by the right hon. Member for the Gorbals Division (Mr. G. Barnes), who well recollects the statement being made by the ex-President. In this country the Government have seen fit to give the House of Commons no say whatever in the nominating of representatives to this very important body, the Assembly of the League of Nations. It has nominated very distinguished representatives from this country, and as it happens I have no complaint to make of the actual members sent, but the principle that they should be representatives at any rate of this House of Parliament and not only of the Government was overlooked completely. I am glad to say that the House of Commons has begun to reassert its authority in more than one direction in the last few months. Members of this House have begun again to show a jealousy of their rights, and therefore I put forward this Amendment with the hope that I shall get the support of that awakening jealousy amongst hon. Members.
Might I draw attention to the state of affairs that might occur in a subsequent Parliament? We might have a very large majority sitting on the Government side of the House with strong Socialistic views. It might have very advanced views about the League of Nations. It might really want to make it a super-State, and through its machinery produce a real International, and it conceivably might be very desirable for the other parties in such a House to have the chance, at any rate, of nominating one of the representatives to sit on the Assembly. The picture I draw, I believe, is by no means impossible, and hon. Members of other parties might well consider that eventuality. Furthermore, it does seem that the three representatives this country is entitled to send to the Assembly should not be of one political colour. We have to-day a Coalition Government, and, as a matter of fact, the three representatives represent the Unionist, the Liberal, and the Labour wings of the present Government. But if you had either a completely Labour Government, or a completely Unionist Government, or a completely Liberal Government, your three representatives under the present system would, in all probability, consist of three persons holding one of those views, and, in face of the very idea of the League of Nations, I submit that is undesirable. The minorities ought to be represented on such an Assembly.
Personally speaking; I would like to see the representatives on the Assembly elected by a proportional system of voting, according to the proportionate strength of parties in the House of Commons. In any case, I think the minorities should have some say in the representation. I admit in practice the nomination of three Members by the Government, if they put the Whips on, should the matter be challenged in the House of Commons to a Division, would probably be carried. But circumstances might arise in which the House of Commons, in a mood of, I hope very valuable independence, would insist on some outstanding figure in the House of Commons, such, for example, in this matter, as the Noble Lord the Member for Hitchin (Lord R. Cecil) being included in the delegation. It might become more than a party matter. As it happens, I believe I am right in saying that the Noble Lord—I am glad he is not present—was one of the outstanding figures of the historic gathering at Geneva. He did not go as the nominee of this Government, but as the nominee of one of our great Dominions. That fact alone, I think, shows that the present system of Government nomination to the Assembly is altogether unsound.
There is one last principle I would lay before the Committee. Parliament, I think, in the present state of development of the League of Nations, should keep control over the machinery of the Assembly, if not of the Council. I am now examining the question of the appointment of delegates to the Assembly. Parliament should keep the greatest possible control it can if the findings of the Assembly are to be respected. At the present moment it is possible for the destructive critics of the League to say, "Why should we pay any attention to the resolutions come to, or the pious aspirations issuing from an Assembly nominated entirely by the Government?" But if it could be said that the House of Commons was consulted as to the person- ality of the representatives of the country, a lot of that criticism would be removed, or, at any rate, there would be the chance of it being removed. I commend this matter, the importance of which, I think, it is impossible to overrate, to the few Members here present—no common thing when important matters are being discussed, especially at this hour. But I do most earnestly commend it to hon. Members present. It is not a party question at all, and it is not brought forward on this occasion out of hostility to the Government or disrespect to the League of Nations. It is brought forward in the highest national interest, and in the interest of the House of Commons.
I beg to second the Amendment. I am sure it embodies a very important principle, and one to which, I hope, this House will give its most earnest consideration. It must be considerably more than a year ago that I raised this question in the House by asking the Prime Minister whether he would see that the representatives of this country to the Assembly of the League of Nations should be appointed by the House of Commons, and should be appointed in such a way as to secure that one of the representatives should represent the minority parties in this House. To that question I received the answer that the principle of one of the representatives representing the minorities in this House should be borne in mind, but that the responsibility for the appointments must remain with the Government. We know what happened. As a matter of fact, there was no representative of the minorities in this House that went to Geneva. The three representatives were all representatives of the Coalition. I do not complain of that altogether, because I was told at the time that the Government did offer to Viscount Grey of Falloden to be one of our representatives at Geneva. At the same time, if he had been, he would not have been elected by this House, for although he was a very old Member of the House of Commons, he was no longer a Member of the House of Commons.
I do suggest to the Committee, and I hope the Government will even now approve of the principle, that the House of Commons should choose these representatives to the Assembly, and that they should be chosen in such a way that one of them should represent the minorities here, and the other two should represent the majority. If we want the League of Nations to succeed, it must be a league of peoples and not merely a league of Governments. Nothing for that purpose can be so effectual as to make the Assembly a truly democratic body. If we in this great country, in which democracy developed earliest and most fully of all the great nations, set the example of having our representatives in the League of Nations elected democratically by the democratic assembly of the nation, then, I think, it will be an example to the whole world. I went to Geneva during the sittings of the last Assembly, and I never shall forget sitting in the gallery and watching the proceedings of the Assembly—the greatest democratic assembly that ever met in the whole world. Something like a real Parliament of civilised man. It would have been an infinitely greater body if it had known that every one of its representatives was directly elected by the House of Commons or the Chamber of Representatives of the country from which it came. Such a course, I venture to say, would have given very great strength to the proceedings of the Assembly, in addition to the strength which it already had. Nor do I see why the Government should be in the least afraid of this procedure. There is, I think, no reason to be afraid of really trusting domcratic organisations and democratic ways of proceeding.
The majority of this House would, I think, command two out of three of the seats, and the minority would only get the one seat. Then, again, the Assembly is not the whole governing authority of the League of Nations. Ater all, the Council has an even greater power than the Assembly in the affairs of the League. I, personally, shall not raise the slightest objection to the nomination for the representative of this country on the Council of the League to be made by the Government. My hon. and gallant Friend who moved this Amendment pointed out that whatever he did before he is not now asking that the representative on the Council shall be appointed by this House by any form of election; only that the representatives in what you may call the democratic house, the popular house of the League of Nations, should be elected by this House. I put it to the Government that if you have these two ways of procedure—the members of the Council appointed by the Government so that the Council is really the Council of the Governments, and the members of the Assembly appointed by the democratic and representative bodies of the nations, so that the Assembly is really an Assembly of the democracies of the civilised countries of the world—you will have in these two combined a far stronger body than you can have if you have the whole members of both Council and Assembly nominated only by the Governments. After all, we all believe that it is on the League of Nations that the future of the world and of civilisation depends; and we have—
We are getting too near to a discussion on the League of Nations. I have allowed this Amendment because it has some relation to the matter, but this is a Bill relating to Hungary, and we cannot have a general discussion on the League of Nations on it.
I will leave any other questions, Sir Edwin, in regard to the League of Nations, and will only say that to my mind to allow these appointments to the Assembly of the League of Nations to be made in the way suggested by this Amendment would give the Assembly of the League far greater power and possibilities in relation to the work which we are all anxious to see done by the League of Nations.
9.0. P.M.
Last year on the Austrian Peace Treaty Bill we had a similar discussion, and I was obliged to say then, on behalf of the Government, that I could not accept the Amendment. I am in that position to-night, even though my hon. and gallant Friend the Member for Central Hull (Lieut.-Commander Kenworthy) has introduced a somewhat less ambitious Amendment. I confess that at the first glance I was a good deal attracted by the suggestion that is embodied in this Amendment. It seemed to me that it would be an advantageous thing if the delegates, at all events, of the Assembly could go there as the immediate choice of the democratic assemblies, but the more I look into this question the more impracticable the proposal becomes. We have, first of all, the constitutional question. I am not disposed to attach any superstitious value to precedent, but the wisdom of our ancestors has drawn up a constitution in which you have a democratic assembly with an executive responsible to it. If the executive acts you must look to the executive Government, and if you do not approve of the executive acts of the executive Government, then you will have your constitutional machinery for ridding yourselves of the Government. It seems, on mature consideration, that the choice of delegates representing these peoples to the Assembly of the League can only be found in the executive Government of the day. I think that in order to have made good the proposal which he has introduced the hon. and gallant Gentleman ought to have made out a perfectly overwhelming case for it. How would this House select or elect the delegates to the Assembly of the League of Nations? What machinery have we for carrying out business of that kind? The machinery is the constitution. Suppose the names are submitted by the Government to the House for its sanction. They are, it may be, approved or disapproved by this House in a formal and purely perfunctory manner, and that is not the object that the hon. Gentlemen opposite have in view. What happens then? If disapproved, the House, I take it, suggests other names. Then you must proceed to a Division or Divisions.
That is the way committees are appointed.
Yes. But would that be any satisfactory solution of the difficulty that this highly important matter should be relegated to a Committee of Selection, a body for which we all have, of course, the highest respect? Surely the Executive Government of the day is a more important and a more representative body even than the Committee of Selection? You submit these names to the approval of the House. Other names are suggested, and this House is put to the extreme difficulty of voting on the suitability of various eminent gentlemen for these most important places. Three are elected. Some of them might be elected by very small majority. I affirm, and I think the Committee will agree, that our delegates who now go with the highest sanction of and are the representatives of the Government of the day in a way they would not be if they went as representing only the majority, perhaps in some cases a very bare majority, of the Members of this House.
And who would instruct them?
And, as the hon. and gallant Gentleman says, who would instruct them? Because, although the prerogatives of members of the Assembly are not strictly defined and their functions are not rigidly prescribed, it is quite obvious that they must have some relation and some responsibility to the Governments of their respective countries. Otherwise it is not difficult to imagine that extraordinary situations might arise, causing the greatest embarrassment to the Government and bringing the League itself into disrepute. I think our delegates go to the Assembly of the League nominated by the Executive and the Government with far greater prestige and higher sanction than if they went there nominated merely by a majority of the Members of this House. It must be remembered, too, that under our Constitution there is another body which might desire to take a hand in the proceedings if we chose to nominate certain members of the Assembly. The hon. and gallant Member (Lieut.-Commander Kenworthy) said he was satisfied with the nominations to the first Assembly, and I think that satisfaction is enjoyed by every Member of this House, and generally by the public outside. I think, therefore, we may rely in this matter upon whatever Government controls the affairs of this country, whether it be a Conservative Government, a Liberal Government, or a Labour Government, making wise and statesmanlike appointments, realising that our delegates at the League of Nations must not be party men or political hacks of any kind, and that they must represent the best interests of this country and the highest statesmanship we have at hand at any given time. I should be quite content to have complete confidence in any delegates this country should appoint to the League. For these reasons I regret that I am not in a position to accept the Amendment.
I very much regret the statement which has just been made. I followed the Under-Secretary in his suggestion that the Executive is the proper authority to nominate the Council, and I should not have supported the Amendment of my hon. and gallant Friend if it had been in the same terms as it was when he moved it on the last occasion when it included the Council and the Assembly. It seems to me that the Government, as the Executive of Parliament, is the proper body to appoint the members of the Council, but I draw a distinction between the Council and, the Assembly. The Assembly is more of a consultative body, and it ought to be more representative of the representative Chamber. I support this Amendment because of my intense desire to see the League of Nations a success. I am entirely convinced of the view expressed by my hon. and gallant Friend, that the League will never be the success we desire it to be until the people regard it as their League, in which they are directly interested in promoting the peace and progress of the world. If this is left purely as an official matter to the Executive of the day, the people will never regard it as their League. If the representatives of this country are elected to the Assembly, it will be a strong step in helping the people to realise that the League of Nations is the people's League.
I submit with all respect that the objections raised by my hon. Friend opposite are not conclusive in regard to the appointment. I see the difficulties he mentions, but there are difficulties in regard to every practical proposal which comes before this House. So far as the selection goes, surely the way it could be arranged is not by a Selection Committee, but by suggestions from representatives in the House. This is constantly done in reference to Select Committees. The object is not to deprive the Government of their authority, but as far as possible the members chosen should be representatives of the House of Commons. All we ask for here is that the representative chosen should be fairly representative of the House of Commons. That can be done without any party bias or practical difficulty, and therefore I desire very strongly to support my hon. Friend's proposals, and I wish to express my regret that the representative of the Government has not seen fit to accept this Amendment.
The Under-Secretary overlooks the fact that the very idea of the Assembly is that it shall be the Chamber where questions are debated and threshed out. It is supposed to be partly a debating society, or some assembly where a reflex can be obtained of the opinions of the day.
The hon. Member is going on to discuss the general question of the League of Nations, and he must confine himself to the Amendment.
When the hon. Gentleman says it is absolutely necessary for the Government to be able to instruct the delegates, I think on reflection he will see that the case is not on all fours with the Council, and in this case it would be very desirable that a minority of the House of Commons should have one representative out of the three. Of course, we realise that the delegates must receive their instructions
from the Government. The third member representing the Opposition would, of course, pay the closest attention to the wishes and desires of the Government, and would consult the Foreign Office when necessary. At any rate, you would have one representative either of the Conservative minority or of the Labour minority, and I am certain that would commend itself to the great mass of the people. After all, the Acts of the Government of the day in its own country could be passed if required by succeeding Parliaments. It may be a different matter on the League of Nations. For that reason I regret very much that the Government has not seen fit to accept this Amendment.
Question put, "That those words be there inserted."
The Committee divided: Ayes, 42; Noes, 146.
Division No. 84.] AYES. [9.15 p.m. Barker, G. (Monmouth, Abertillery) Henderson, Rt. Hon. A. (Widnes) Swan, J. E. Bowerman, Rt. Hon. Charles W. Hirst, G. H. Thomas, Brig.-Gen. Sir O. (Anglesey) Cairns, John Hodge, Rt. Hon. John Thorne, G. R. (Wolverhampton, E.) Cape, Thomas Hogge, James Myles Waterson, A. E. Davies, Evan (Ebbw Vale) Holmes, J. Stanley White, Charles F. (Derby, Western) Edwards, G. (Norfolk, South) John, William (Rhondda, West) Wignall, James Elliot, Capt. Walter E. (Lanark) Kennedy, Thomas Wilson, James (Dudley) Entwistle, Major C. F. Kenyon, Barnet Wilson, Rt. Hon. J. W. (Stourbridge) Finney, Samuel Lunn, William Wilson, W. Tyson (Westhoughton) Galbraith, Samuel Mills, John Edmund Wintringham, T. Gillis, William Raffan, Peter Wilson Wood, Major M. M. (Aberdeen, C.) Glanville, Harold James Rose, Frank H. Graham, D. M. (Lanark, Hamilton) Royce, William Stapleton TELLERS FOR THE AYES.— Griffiths, T. (Monmouth, Pontypool) Shaw, Thomas (Preston) Lieut.-Commander Kenworthy and Guest, J. (York, W. R., Hemsworth) Smith, W. R. (Wellingborough) Mr. A. Williams. Hartshorn, Vernon
NOES. Agg-Gardner, Sir James Tynte Clough, Robert Gregory, Holman Allen, Lieut.-Colonel William James Coats, Sir Stuart Greig, Colonel James William Atkey, A. R. Cobb, Sir Cyril Gritten, W. G. Howard Baird, Sir John Lawrence Colvin, Brig.-General Richard Beale Hannon, Patrick Joseph Henry Balfour, George (Hampstead) Conway, Sir W. Martin Harmsworth, C. B. (Bedford, Luton) Banbury, Rt. Hon. Sir Frederick G. Coote, Colin Reith (Isle of Ely) Henderson, Major V. L. (Tradeston) Barlow, Sir Montague Cory, Sir J. H. (Cardiff, South) Herbert, Dennis (Hertford, Watford) Barnett, Major R. W. Cowan, Sir H. (Aberdeen and Kinc.) Higham, Charles Frederick Barnston, Major Harry Craik, Rt. Hon. Sir Henry Hilder, Lieut.-Colonel Frank Barrand, A. R. Curzon, Captain Viscount Hills, Major John Waller Barrie, Charles Coupar Davidson, Major-General Sir J. H. Hinds, John Bell, Lieut.-Col. W. C. H. (Devizes) Davies, Sir William H. (Bristol, S.) Hopkins, John W. W. Bigland, Alfred Doyle, N. Grattan Hopkinson, A. (Lancaster, Mossley) Birchall, Major J. Dearman Edwards, Major J. (Aberavon) Horne, Sir R. S. (Glasgow, Hillhead) Blake, Sir Francis Douglas Evans, Ernest Hurd, Percy A. Berwick, Major G. O. Eyres-Monsell, Commander B. M. Hurst, Lieut.-Colonel Gerald B. Boscawen, Rt. Hon. Sir A. Griffith- Farquharson, Major A. C. James, Lieut.-Colonel Hon. Cuthbert Bowyer, Captain G. E. W. Fell, Sir Arthur Jameson, J. Gordon Brassey, Major H. L. C. Fisher, Rt. Hon. Herbert A. L. Jodrell, Neville Paul Bridgeman, Rt. Hon. William Clive Ford, Patrick Johnston Johnson, Sir Stanley Briggs, Harold Forestier-Walker, L Johnstone, Joseph Brittain, Sir Harry Forrest, Walter Jones, G. W. H. (Stoke Newington) Broad, Thomas Tucker Fremantle, Lieut.-Colonel Francis E. Jones, Henry Haydn (Merioneth) Bruton, Sir James Gange, E. Stanley Jones, J. T. (Carmarthen, Lianelly) Buckley, Lieut.-Colonel A. Gardiner, James Kidd, James Campbell, J. D. G. Gibbs, Colonel George Abraham King, Captain Henry Douglas Carter, R. A. D. (Man., Withington) Gilbert, James Daniel Knight, Major E. A. (Kidderminster) Casey, T. W. Gilmour, Lieut.-Colonel Sir John Lewis, Rt. Hon. J. H. (Univ., Wales) Chamberlain, Rt. Hn. J. A. (Birm. W.) Gray, Major Ernest (Accrington) Lewis, T. A. (Glam., Pontypridd) Chamberlain, N. (Birm., Ladywood) Green, Joseph F. (Leicester, W.) Lindsay, William Arthur Churchman, Sir Arthur Greene, Lt.-Col. Sir W. (Hack'y, N.) Locker-Lampson, Com. O. (H'tingd'n) M'Curdy, Rt. Hon. C. A. Pennefather, De Fonblanque Thomson, F. C. (Aberdeen, South) McLaren, Robert (Lanark, Northern) Perkins, Walter Frank Townley, Maximilian G. Macleod, J. Mackintosh Pickering, Lieut.-Colonel Emil W. Tryon, Major George Clement Macpherson, Rt. Hon. James I. Pollock, Sir Ernest M. Waddington, R. Mallalieu, F. W. Pownall, Lieut.-Colonel Assheton Wallace, J. Meysey-Thompson, Lieut.-Col. E. C. Prescott, Major W. H. Ward, Col. J. (Stoke-upon-Trent) Middlebrook, Sir William Richardson, Alexander (Gravesend) Waring, Major Walter Mitchell, William Lane Roberts, Rt. Hon. G. H. (Norwich) Warner, Sir T. Courtenay T. Molson, Major John Elsdale Robinson, S. (Brecon and Radnor) Williams, Lt.-Com. C. (Tavistock) Mond, Rt. Hon. Sir Alfred. M. Roundell, Colonel R. F. Williams, Lt.-Col. Sir R. (Banbury) Montagu, Rt. Hon. E. S. Rutherford, Sir W. W. (Edge Hill) Williams, Col. Sir R. (Dorset, W.) Moreing, Captain Algernon H. Samuel, A. M. (Surrey, Farnham) Wilson, Daniel M. (Down, West) Morris, Richard Seager, Sir William Wise, Frederick Neal, Arthur Seddon, J. A. Wood, Sir H. K. (Woolwich, West) Newman, Sir R. H. S. D. L. (Exeter) Smith, Sir Allan M. (Croydon, South) Young, Lieut.-Com. E. H. (Norwich) Nicholson, Reginald (Doncaster) Stanley, Major Hon. G. (Preston) Oman, Sir Charles William C. Stewart, Gershom TELLERS FOR THE NOES.— Parker, James Sturrock, J. Leng Colonel Leslie Wilson and Mr. Pease, Rt. Hon. Herbert Pike Taylor, J. Dudley Ward.
Question, "That the Clause stand part of the Bill," put, and agreed to.
CLAUSE 2 ( Short Title ) and Preamble ordered to stand part of the Bill.
Bill reported without Amendment; read the Third time, and passed.
Public Health (Tuberculosis) Bill
As amended ( in the Standing Committee ), considered.
NEW CLAUSE.—(Delegation of certain powers to Seamen's National Insurance Society.)
For the purposes of this Act the Seamen's National Insurance Society shall be deemed to have the same status, powers, and duties as any council of any county or county borough referred to in Section one of this Act.—[ Major Henderson. ]
Brought up, and read the First time.
I beg to move, "That the Clause be read a Second time."
The object of the Clause is to meet a difficulty which exists with regard to the treatment of seamen. Under this Bill seamen are in a different position to other insured people because very often they have no fixed domicile, or land at a port which is not near their home. We believe that, under existing circumstances, the result of that may be that in most cases the local authorities will be unwilling to take the responsibility of treating those men who may not be their own ratepayers, and not only that, but that there may be cases of men arriving at ports at which they are strangers and they will not know to whom to go in order to obtain treatment. When the 1911 Insurance Act was passed this House recognised that sea-men were in a peculiar position, and it was because of that that the Seamen's National Insurance Society was formed. The society has done very good work: during the period of its existence and we desire that some special authority which is acquainted with the needs of seamen, and has their interests at heart, should continue to supervise the work of giving these men tuberculosis treatment when required. I believe the Amendment as it stands does not commend itself to the Government, as there are certain technical difficulties with regard to its operation. I would like to move it in order that I may find out whether the Government are prepared to meet me in any way, especially as they gave some indication that they viewed this particular question favourably on the Committee stage of the Bill. I am sure the House will remember that there is no class of the community more deserving of consideration than the merchant seamen of this country and I hope, for that reason, that it will also view the Clause with sympathy.
I beg to second the Motion. I thoroughly agree with the mover in his statement that perhaps, as it stands, the Clause would not commend itself either to the House or the Minister in charge of the Bill. We were intending, in conference with the officials of the Ministry to work out a new Clause which might be more suitable. We had arrived at one which we thought had met the opinion of the Minister. It was only possible to do that this afternoon, and there was no time to get it on the Order Paper. Therefore we move this Clause, admittedly unsuitable, to get an opinion from the Minister whether or not he can give a pledge that in another place he will have a Clause of this character moved, discussed and, if possible, incorporated in the Bill.
As the Mover and Seconder of the new Clause have intimated, the point they have raised is one which has everybody's sympathy, and certainly my own. On discussion in Committee of the actual machinery which this new Clause is intended to introduce, it was found that there were serious technical objections to its being carried out. I gave an undertaking, however, to see whether some means could not be found by which the object of this Clause might be carried out in another shape. The hon. and gallant Member who seconded the Clause rightly stated that anothre Clause having the purpose of appointing an Advisory Committee and enabling the Seamen's National Insurance Society to continue to assist in its very excellent work, was agreed between the hon. Members who take an interest in this matter and my Ministry. Unfortunately, it was not possible to get it on the Order Paper early enough for this Report stage. I am quite ready, however, to undertake that this Clause should be inserted when the Bill reaches another place, in order to meet a very long felt want and a great difficulty in dealing with these sailors who, naturally, being away so much and not being attached to any locality when they come on shore, want special provision and supervision for which the ordinary machinery of National Health Insurance is not quite satisfactory.
In view of what the right hon. Member has said, I beg to ask leave to withdraw the Clause.
Motion and Clause, by leave, withdrawn.
NEW CLAUSE.—(Extension of Section 3 of the Public Health (Prevention and Treatment of Disease) Act, 1913
(1) The power of a sanitary authority under Section three of the Public Health (Prevention and Treatment of Disease) Act, 1913, to make such arrangements as may be sanctioned by the Minister of Health for the treatment of tuberculosis shall include a power to make such arrangements as may be sanctioned by that Minister for the after-care of persons who have suffered from tuberculosis, and arrangements under this Section may be made by a sanitary autho- rity, whether arrangements have been made by them under the cited Section or not.
(2) Any powers of a sanitary authority under the cited Section as extended by this Section may be exercised through any committee or joint committee of any sanitary authority or sanitary authorities, and the provisions of this Act relating to committees and joint committees shall apply, with the necessary adaptations.—[ Mr. Tyson Wilson. ]
Brought up, and read the First time.
I beg to move, "That the Clause be read a Second time."
It is quite possible that the right hon. Gentleman will say that the Amendment which he very generously accepted in Committee covers the point contained in my Clause. I am not quite sure whether it does so or not, and the reason I am moving this Clause is to bring the present Bill into line with that passed in 1913, namely, the Public Health (Prevention and Treatment of Disease) Act. Section 3 of that Act says: give some consideration to the Clause. If they cannot accept it as a whole, I hope, in another place, that they will give it consideration, and if necessary strengthen the Amendment to which they agreed in Committee.
I beg to second the Motion. I am sure the Clause will commend itself to every Member of the House. If there is one important function necessary, it is the after-care of these people who have been under treatment.
I very much regret that I cannot possibly accept this Clause. The hon. Member for Westhoughton (Mr. T. Wilson) will remember that on the Committee stage of the Bill I did accept the Clause which he moved dealing with aftercare treatment given by county councils and county borough councils. He must be aware of the fact that the whole of our tuberculosis treatment works now under county and county borough councils. What he proposes to do, apparently, is to take a very, very small part of that work, and suddenly put it under an authority which is not dealing with the main part of it. That would lead to administrative chaos. You cannot have county councils and county borough councils responsible for institutional treatment, for dispensary treatment, and in part for after-care-treatment, and then have other authorities, which have nothing to do with the main body of tuberculosis treatment, suddenly put to deal with what is only, after all, a very small part of the problem. I think, if the hon. Member will look at the matter in that way, he will see that it will not achieve the object which he has in view, and which he has already obtained by the Clause I accepted in Committee. Therefore I hope he will withdraw this Clause, as it will throw the whole machinery we are setting up out of gear.
If the right hon. Gentleman will assure the House that the after-care of these patients will still be safeguarded under the Bill as amended, in the same way as if this Clause were inserted, I certainly will ask leave to withdraw it.
Certainly.
Motion and Clause, by leave, withdrawn.
CLAUSE 1.—(Further provision with respect to arrangements for treatment.)
(1) Where the council of any county or county borough has before the passing of this Act, made arrangements for the treatment of persons suffering from tuberculosis (including persons insured under the National Health Insurance Acts, 1911 to 1920) at or in dispensaries, sanatoria, and other institutions in accordance with a scheme approved by the Local Government Board or the Minister of Health, or, in the case of Wales, under an agreement made with the King Edward the Seventh Welsh National Memorial Association and approved by the Welsh Insurance Commissioners or the Minister of Health, that council shall, for the purposes of this Act, be deemed to have made adequate arrangements for the treatment of tuberculosis so long as such scheme or agreement, with such modifications, if any, as the Minister may on the application of the council from time to time approve, continues in operation.
I beg to move, at the end of Sub-section (1), to insert the words
"For the purpose of the foregoing provision an application made by the King Edward the Seventh Welsh National Memorial Association with the approval of the council shall be deemed to be an application of the council."
This is merely a drafting Amendment, consequential on the Amendment adopted during the Committee stage regarding the King Edward the Seventh Welsh National Memorial with special relation to the Council of Wales.
Amendment agreed to.
CLAUSE 2.—(After-care by councils of counties and county boroughs.)
Without prejudice and in addition to any other power, whether under this or any other Act, every council of a county or county borough shall have power to make such arrangements as they may think desirable for the after-care of persons who have suffered from tuberculosis (including persons for the time being insured under the National Health Insurance Act, 1911, as amended or extended by any past or future enactment), and the foregoing provisions of this Act relating to committees and joint committees shall extend accordingly as though in those provisions the expression "treatment of tuberculosis" included such after-care.
I beg to move, to leave out the word "foregoing" ["and the foregoing provisions of this Act relating to Committees"].
This is purely a drafting Amendment, rendered necessary by some changes which have been made in the positions of the Clauses of the Bill.
Amendment agreed to.
Bill read the Third time, and passed.
The remaining Orders were read, and postponed.
Adjournment
Resolved, "That this House do now adjourn."—[ Colonel Leslie Wilson. ]
Adjourned accordingly at Twenty-two Minutes before Ten o'clock.