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Commons Chamber

Volume 141: debated on Monday 2 May 1921

House of Commons

Monday, May 2, 1921

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

Private Business

Burnley Corporation Bill,

Croydon Corporation Water Bill,

As amended, considered; to be read the Third time.

Wandsworth, Wimbledon, and Epsom District Gas Bill [ Lords ],

Read a Second time, and committed.

Perth Corporation Provisional Order Bill,

Considered; to be read the Third time To-morrow.

PILOTAGE PROVISIONAL ORDERS (No. 3) BILL,

"to confirm certain Pilotage Orders made by the Board of Trade under the Pilotage Act, 1913, relating to pilotage in the Pilotage Districts of Arbroath, Elgin, and Lossiemouth, Eyemouth, Irvine, Thurso, and Wick," presented by Sir WILLIAM MITCHELL-THOMSON; read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 89.]

North British Railway Order Confirmation Bill,

"to confirm a Provisional Order under the Private Legislation Procedure (Scotland) Act, 1899, relating to the North British Railway," presented by Mr. MUNRO; and ordered (under Section 7 of the Act) to be considered To-morrow.

Oral Answers to Questions

Questions

Profiteering Acts (Inquiries)

asked the President of the Board of Trade what steps, if any, are proposed to be taken in respect of inquiries being made by the Profiteering Central Committee which are not completed at the date of the expiry of the Profiteering Act to secure completion?

I am advised that the Central Committee will cease to exist on the expiration of the Profiteering Acts, and that it will not be possible for them to continue any investigations which are not completed by that date.

Does that reply mean that the investigations which had been going on, costing a good deal of money and time, will be cut short and not completed, and that the country will derive no benefit from those investigations?

I hope that by the time the Act expires very few inquiries will be outstanding, because they have been specially warned two months ago that the date of the expiry of the Act was approaching, and I have no doubt that they are making their arrangements accordingly.

Trade and Commerce

Japanese Silk Goods

asked the President of the Board of Trade whether there have been any cases of dumping of Japanese silk goods in this country; and whether we are free to prevent this in view of Article 8 of the Anglo-Japanese Treaty of Commerce of 3rd April, 1911, requiring six months of negotiation and six months' further notice before it can be nullified without Japan's consent?

I have received no evidence that Japanese silk goods have been sold in this country at prices below their cost of production in Japan. Under Article 8 of the Treaty we are precluded from imposing an import duty on certain limited classes of silk goods, but these are Japanese specialities which appear not to compete with British manufactures.

Trade With Germany

asked the President of the Board of Trade if he can state the value of exports from this country to Germany during April, 1920, and the amount for the same month of 1921?

asked the Parliamentary Secretary to the Overseas Trade Department whether he has any figures showing the total exports from Germany from the 1st April, 1921?

Figures of our trade with any particular countries are not compiled month by month.

I really do not know whether it would be worth the expense. It has not been done before in that way. The figures are presented quarterly, and these are much more useful for comparison. Monthly figures would cost a good deal more, and cause a great deal more work, and I doubt whether they would be of any advantage for comparative purposes.

Key Industries Bill

asked the Lord Privy Seal the reason for the delay in the introduction of the Safeguarding of Industries Bill; and whether any representations on the subject have been made by supporters of the Government to one of the Patronage Secretaries of the Treasury?

The sole reasons for the delay have been the interruption of Government business caused by the Ministerial changes consequent on the resignation of the late Leader of the House, and the industrial dispute in the coal trade. My right hon. Friend must respectfully decline now and always to answer questions as to communications actual or imaginary alleged to have passed between the Government and their supporters.

Will the right hon. Gentleman say whether the communications in question were actual or imaginary?

Can the right hon. Gentleman state now when the Financial Resolutions will be taken?

Questions

Royal Commission on Inventions

asked the President of the Board of Trade whether he is aware that Lieut.-Colonel G. Liddell, Royal Engineers, applied two and a half years ago to the Ministry of Munitions, and later to the Royal Commission on Awards to Inventors, for an award in respect of his invention in connection with a patent portable hut, which was largely used by the War Office in France and elsewhere; whether his application has never yet come on for hearing, and that he is informed that it is impossible to say when any hearing may be expected; whether it is a fact that the Commission only sit on one day per week; how many claims are still out-standing; and when it is expected that the same will be disposed of?

Colonel Liddell applied to the Royal Commission in April, 1920, for an award in respect of the invention in question. The formal claim was delivered in August, 1920, and the counter statement of the War Office in January, 1921. The case has not yet been heard, and is number 36 on the list for hearing. It is impossible to say when it will be reached, as no estimate can be given as to the length of time which will be occupied in dealing with prior claims. The Royal Commission normally sits on one day a week, but it has from time to time sat on consecutive days in order to dispose of heavy cases. There are 188 claims at present outstanding, which will be heard before the Commission, and other claims are still being presented. For the reasons above stated, it is impossible to state when these cases will be disposed of.

Is the hon. Gentleman aware of the great hardship caused by this delay, which has now lasted for nearly two years, more especially as many of the claimants are resident in the Colonies and overseas; and will the hon. Gentleman consider the advisability of speeding up this Commission, and arrange for it to sit during the Long Vacation?

There are many other cases of hardship, and I shall be glad to give the matter my attention. With regard to this particular case, the claim was not filed until January, 1921, In such cases great elaborations are necessary, and they require a long time for preparation.

Peace Treaties

German Reparation

asked the President of the Board of Trade whether France, Italy, or Belgium are enforcing the German Reparation Acts on similar lines to those now being enforced in this country; and, if not, can he say when ft is expected that these countries will be enforcing measures similar to ours?

The necessary legislation has been passed in France and Belgium, but I am unable to state when it will be put into operation, or when Italy will have similar legislation.

Is it not possible for the President to do something to expedite the putting of these Acts into force in foreign countries?

In view of the fact that, although the legislation has been passed it is not operating in other countries, will the right hon. Gentleman cause the Acts to cease to be operative here, so that they may operate simultaneously in other countries?

asked the President of the Board of Trade if he is aware of the congestion at the parcels post depot in South-East London due to the Regulations now insisted upon under the German Reparation (Recovery) Act; and if he is prepared to consider what formalities can be dispensed with to enable the many thousands of parcels now detained to be released, especially those of a seasonable or perishable nature and those coming from France, Belgium, and Italy?

As I stated in reply to the hon. and gallant Member for Central Hull on the 25th ultimo, special arrangements have now been made to cope with the work at this depot, and the initial difficulties are being rapidly overcome. I may add that, with the exception of a few parcels from Italy, the depot referred to deals only with mails from Germany. All parcels from France and Belgium and the regular mails from Italy are dealt with at another depot.

Is the right hon. Gentleman aware that there was great congestion last Friday, and can he say whether the new Regulations are now in force?

There are still some arrears to overcome, and I hope by this time that they have been remedied, or will be very shortly.

asked the Prime Minister whether he can state, approximately, what has been received by the British Treasury in respect of the levy upon goods imported from Germany under the terms of the recent Act

As goods contracted to be delivered and in respect of which payment has been made are excluded from the operation of the Act, goods imported from Germany up to the present have not been subject to a collection of the levy. The actual figure has already been published.

In view of the fact that the actual collections, up to the present, amount to £2,000 or £3,000, does not the hon. Gentleman agree that, whatever the other merits of the Act, as a revenue-producing instrument, it doss not promise to be a very great success?

asked the Prime Minister whether His Majesty's Government has yet received the new offer of the German Government with reference to reparations; and whether it is considered a basis for discussion before proceeding to the occupation of further German territory?

27 and 28.

asked the Prime Minister (1) at what rate will the miners in the Ruhr area be paid during the French occupation; will their wages be deducted from the profits of the sale of the coal before it is paid into the reparations account; or is there any truth in the statement that their wages are to be paid out of taxation imposed on the occupied zone;

(2) how the French propose to administer the operation of the mines in the Ruhr area; and will the present owners and directors of the mines be responsible for the output, or will French officials take over the management?

asked the Prime Minister whether he is able to give the House any further information as a result of the recent meetings with reference to the enforcement of the Treaty of Versailles?

asked the Prime Minister whether he can state to the House the French plans and proposals for the occupation of the Ruhr?

57 & 58.

asked the Prime Minister (1) whether he can state the conditions under which the French propose to work the coal of the Ruhr for the purpose of obtaining reparations; the estimated cost of the coal at the pithead and the price at which it will be sold; the estimated amount which will be realised for reparation;

(2) whether the Government is committed to taking joint action with the French Government in the armed occupation of the Ruhr; if so, what is the number of the forces to be used; whether further coercive measures are proposed; and, if so, what is their nature?

asked the Prime Minister whether any inquiry has been made into the probable effects of the occupation of the Ruhr upon British trade; and, if so, can he state the result of the investigation?

asked the Prime Minister whether he can state the probable effect of the occupation of the Ruhr upon the coal export trade of this country?

63 and 64.

asked the Prime Minister (1) whether the Reports of the Reparation Commission to the Allied Governments will be published;

(2) whether the reparation collected in the Ruhr will be handed over to the Reparation Commission to be apportioned among the Allies, or will it be retained by the French Government towards the French share of the reparations?

asked the Prime Minister whether he can state how much of the liability of Germany under the Treaty of Versailles is attributable to Category (5) of Annex I to Part VIII of the Treaty?

67, 68, and 69.

asked the Prime Minister (1) whether the occupation of the Ruhr is being carried out under paragraph 18 of Annex II to the Reparations Chapter; if so, whether the procedure set out in paragraph 17 has been carried out;

(2) whether, under paragraph 18 of Annex II to Part VII of the Treaty of Versailles, any one of the Allied Governments is entitled to take action without the concurrence of the other Allied and Associated Governments;

(3) whether the Reparation Commission has made any recommendations as to the action to be taken in view of Germany's default under the Treaty?

Is the right hon. Gentleman entitled to select a number of questions of that kind, such as he has read out, which do not deal with the question at all? For instance, he read out 57, which deals with coal and the price of coal, and proposes to answer that with the general question of Germany. Are we, as private Members, not entitled to answers to our own questions?

A Minister is entitled to group questions on one subject together, and it is for the convenience of the House that he should do so.

Is it entirely in the Minister's discretion to do so, or are we not entitled as private Members to get answers to our own questions, and to object to any Minister exercising a discretion over our questions?

It is entirely in the Minister's discretion. If there be any points in the group of questions omitted hon. Members can repeat the omitted part later on.

The subjects to which all these questions relate are still under discussion between the Allies, and the Government is not yet in a position to make a statement.

I do not know to what offer the hon. and gallant Gentleman refers as the "new offer." There has been an offer received, which, of course, has been under discussion.

Is the right hon. Gentleman not aware that on Thursday the Prime Minister said he could tell us about this on Monday, as at that time the German offer had not been received at all? Is he not aware that the nature of this offer will determine the whole subject?

I do not know about the offer determining the whole subject. The offer will be considered, of course.

Could the right hon. Gentleman somehow or another arrange that the information on this very important subject should come to this House at least as early as it goes to the newspapers?

Has the right hon. Gentleman seen reports in the newspapers that a new ultimatum has been delivered to Germany this afternoon?

Will it not be possible for the Government to make a statement on the Adjournment, if there be further information?

Washington Conventions

asked the, Lord Privy Seal if he can now name a date for a discussion on the attitude of the Government in regard to Conventions adopted by the Washington Conference under the terms of the Paris Peace Treaty?

I would refer my right hon. Friend to the answer given by the Prime Minister to a question by the right hon. Member for Platting, on the 7th April last, to which I can add nothing.

Is the right hon. Gentleman aware that I was promised by the Leader of the House in February last that a discussion should take place?

I will send my right hon. Friend a copy of the replies, and I will convey his communication to my right hon. Friend.

Russia

Trade Agreement

asked the President of the Board of Trade whether there is any record as yet of any trade having been actually arranged or carried out under the agreement with the Soviet Government?

asked the President of the Board of Trade if any estimate can yet be given of the amount of trade which has so far resulted from the signing of the trade agreement with Russia?

I have no knowledge of the completion of any transactions with Russia since the trade agreement was signed. I may point out that the stages are not yet complete with regard to the appointment of official agents under Article V of the agreement and the nomination under Article IV of persons permitted to trade. Moreover the title to Russian gold has still to be settled by a test case in the Courts which will, it is understood, shortly be heard.

Is it not a fact that the Disposal Board have sold large quantities of goods to the Russian Government, and is it not a fact that the Government have sold them 3,000 barrels of pickled herrings?

British Official Agents

asked the Prime Minister when it is intended to send commercial and economic representatives of this country to Russia; whether these persons have been selected, and what are their names; what will be the emoluments of the principal officials appointed; and on which Vote, or Votes, will their salaries be borne?

I have been asked to reply. It is intended to send official agents to Russia shortly. I am afraid I cannot give the names of the official agents until they have been communicated to the Russian Government. Their emoluments are still under discussion, and will be borne partly on the Foreign Office Vote and partly on the Vote for the Department of Overseas Trade.

May we be sure that all these people who are sent will both have a knowledge of Russia and of the Russian language?

Are we to understand from the hon. Gentleman's answer that the appointment of these representatives is subject to the approval of the Soviet Government or not?

Is it not really quite impossible to deal with this matter without a knowledge of the Russian language?

Is the hon. Gentleman aware that before the War, in the whole of the Embassy staff, there was only one person who had any knowledge of colloquial Russian?

Is it not a waste of money and time sending representatives to Russia for trade which is most unlikely?

Refugees

asked the Undersecretary of State for Foreign Affairs whether he is aware that France has intimated to her Russian refugees that it is impossible for her to go on feeding them in camps wherein they lead a life of idleness, as she has reached the limit of her capacity for feeding them; and, if so, when the British taxpayer will reach such limit in respect of Russian, Armenian and other refugees?

The French Government is undoubtedly anxious to terminate as soon as possible the expenditure which it is at present incurring upon these refugees, and His Majesty's Government are no less eager to remove a similar charge from British revenues. It is hoped that an early result of the signature of the trade agreement will be the return to Russia, under guarantees of amnesty, of a number of these Russian refugees for whom His Majesty's Government have assumed responsibility. Every effort is being made to bring to an end our liability towards the Armenian and other refugees.

Am I right in supposing that the French Government has already given this intimation; and, if so, what ground is there for believing that the more highly-taxed British subject can afford all this entertainment?

Is it not a fact that only a very small sum has been spent on this object?

The sum is considerable, but it is nothing like the sum which the French Government has incurred, and of which they are anxious to rid themselves.

Whether it was an official intimation or not I cannot say on the spur of the moment.

Is it not a fact that the Armenian refugees would have been in a position to support themselves long ago if the promises made to them by the British Government had been carried out?

Questions

Cost of Living

asked the President of the Board of Trade if he will publish a table giving the amount of each thing on which the cost of living is based, which appears in the "Labour Gazette" each month?

I have been asked to reply. I am sending the hon. Member a reprint of a statement which was published in the "Labour Gazette" for February last, giving a full account of the various items included in the statistics, and of the methods of which the index number is computed.

Products Corporation, Limited

17 and 18.

asked the President of the Board of Trade (1) what actual cash payment has been made in respect of the 50,000 £1 shares, constituting the nominal capital of the Products Corporation, Limited; what is the annual turnover of this firm and of the businesses which it has acquired; if he can state from what sources this company, with its small capital, derives the financial backing necessary to the successful carrying on of the business transactions in which it is involved;

(2) whether the business of the Products Corporation, Limited, has been established at the instigation of the German financier, Herr Stinnes, to continue the sale in this country of German chemicals and other products, formerly carried on by firms which have been voluntarily dissolved because of their known German connections; and whether, having regard to the importance of making this country independent of Germany in regard to the supply of chemicals and other key products of which this Corporation acts as agent for the Stinnes industrial group, he will institute an inquiry into the manner in which the firm came into being and the steps which it may be desirable to take to prevent German financiers obtaining a control of British markets in this secret manner?

Inquiries are being made into the position and connection of this company, but I am not yet able to make a statement on the subject.

Is the right hon. Gentleman aware that it is common knowledge in the City that a concern which has been purchased by the Products Corporation cannot carry on their business with the amount of capital they have; that it will involve millions of money, and does he know it is supposed that German financiers are at the back of it, and will he take steps to ascertain the actual facts?

Transport

Official Motor Vehicles

asked the Minister of Transport how many official motor vehicles have been exempted from the payment of taxation, differentiating between light and heavy vehicles, and stating, if possible, what extra sum would accrue if all exemption from taxation were withdrawn; and whether any estimate can be given of the approximate annual mileage covered by these vehicles?

As the answer involves statistical information, I will, with my Noble Friend's concurrence, circulate it in the OFFICIAL REPORT.

The following is the answer:

Returns furnished to me by the several local authorities in Great Britain show the following numbers of vehicles owned by Government Departments exempted from motor taxation since 1st January, 1921:

Government Department vehicles, including Service Departments:

Motor cycles and combinations

1,739

Passenger vehicles

828

Goods vehicles

2,913

Miscellaneous vehicles

161

5,641

Tidal Power

asked the Minister of Transport whether the French Commission which has been investigating the use of tidal power for the past two years has reported; whether the result of its investigations has been communicated to the British Government; and whether he has considered the idea of following the example of the French Government in offering a prize for the best turbine machinery to work in sea water?

I have been asked to reply. I understand that the French Commission have not yet reported, but I am sending my hon. and gallant Friend a statement recently made by the French Minister of Public Works on the matter. I am also sending him a Report on Tidal Power in this country. I do not think that at the present stage there would be any advantage in promoting a competition here, as suggested in the last part of the question.

Shell-Fish (Railway Rates)

asked the Minister of Transport whether he has received com plaints of the excessive railway rates for the carriage of shell-fish from Lincolnshire and Norfolk to London and other markets; whether he is aware that the shell-fish industry is being destroyed by reason of high rail charges; that goods trains are so unreliable that shippers cannot use them for the transit of shellfish; that the fish rate from Sheringham to London was, pre-War, 1s. 2½d. per cwt., and is now 4s. 6d.; that shell-fish from Holland can be delivered in the London market at half the cost for transit as compared with English charges; that, as a consequence of high transport charges, fishermen cannot obtain a livelihood and are swelling the ranks of the unemployed; and whether he will make representations to the Railway Rates Advisory Committee and other authorities to reduce these excessive charges?

A complaint has been received, and inquiries have been made of the companies concerned. I cannot agree that the shell-fishing industry is being destroyed by reason of high railway charges. The percentage increases in the rates are in accordance with the recommendation of the Rates Advisory Committee, who went very carefully into the whole question of railway rates and charges, which apply throughout Great Britain. The charges for conveyance of fish between Sheringham and London quoted by the hon. Member are not altogether accurate. For small quantities the rate was Is. 9d., and is now 4s. 5d. per cwt., but for quantities over 3 cwts. the rate was 1s. 3d. per cwt., and is now 2s. 9d. per cwt. Shell-fish from Holland would no doubt be brought to London by water, and I have no information as to the freight charged. I am informed that only one complaint has been received in regard to goods train working, and even in that case the traffic which left Sheringham at 5 p.m. was delivered in London by 8 a.m. next morning.

Is the hon. Gentleman aware that the shell-fish industry has been practically ruined by the high railway rates; that men are being driven out of employment, that boats are being laid up, as a result of the high prices?

Is the hon. Gentleman aware that this traffic can be carried quicker and cheaper by road than at the present railway rates?

Is it not the fact that the shell-fish trade is absolutely at a standstill?

I have no information to that effect. I cannot think that the railway charges alone have had that effect. Any increase of cost has a detrimental effect on any business of course, and I understand that the railway rates have been fixed as low as we are advised is conformable with making the railway industry itself self-supporting.

Will the hon. Gentleman institute an inquiry into this subject? If he will do that, I am sure he will satisfy himself that there is some substance in the complaint.

I shall be glad to consider anything that hon. Members may bring to my notice, but any inquiry on the subject would appear to me to be appropriate to be made by the Board of Agriculture and Fisheries.

asked the Minister of Agriculture whether he is aware that the cost of sending 1 cwt. of shell fish from Boston to London is 2s. 6d.; that the cost from Holland to the same market is only 1s. 3d. per bag; and that the high railway rates are ruining the East Coast shell-fishing industry and driving the fishermen into the ranks of the unemployed; and whether he can take steps to amend these conditions and save the industry?

I am informed that the cost of sending 1 cwt. of shell fish from Boston to London by passenger service is 2s. 2d., and not 2s. 6d. as stated. Shell fish from Holland to London are water-borne and the rates, therefore, are not comparable. I am in communication with my right hon. Friend the Minister of Transport on the subject of railway rates.

Will the right hon. Gentleman make special inquiry into this particular industry, which is being absolutely ruined by high railway rates?

I cannot do more than refer the matter to the Ministry of Transport, and that I have done.

Fruit-Pickers

asked the Minister of Transport if, in view of the importance to the fruit-growing industry of cheap fares and special trains for pickers, and the anomalous state of affairs last year, when some railway companies granted these facilities and some did not, he can state what is the policy of his Department on the subject?

The question of cheap fare facilities has been considered by the Rates Advisory Committee, and acting upon their recommendation (Command 1148) my right hon. Friend the Minister has already issued instructions to the railway companies empowering them to grant reduced fares to clubs, associations, and other persons if, in their responsible opinion, additional net revenue will be obtained. Unless fruit-pickers travelling to the districts requiring their labour satisfy the railway companies concerned that they come within these instructions, they will not be eligible for any privilege.

Any body of persons who satisfy the railway company that additional revenue can be obtained by encouraging traffic at cheap rates will be able to get the concessions which have been indicated.

Coal Industry Dispute

Railway Traffic (Losses)

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 unable to add anything to the reply given to a similar question by the hon. Member on 25th April, when he was informed that no reliable estimate can be framed of the amount of revenue lost to railway companies through the present coal stoppage until the companies' claims for the month of April are received. These claims will not be received until about the end of this' month, when the hon. Member will perhaps repeat his question.

Defence Force

asked the Prime Minister whether the Government accept responsibility for the document issued at the public expense by Mr. Ian Hay describing the duties with the Defence Force?

I have been asked to reply. The article in question, which is a descriptive article giving the writer's personal impression of the assembling of the Defence Force, does not purport to be a statement of policy, or to represent any views of the Government with regard to any question connected with the present industrial dispute. It was written with the object of interesting and encouraging recruits for the Defence Force. The general approval of the Government of the article as suitable for that purpose may be inferred from the fact that it was re-issued by them in pamphlet form.

Does the Government, inasmuch as it pays for them, accept the personal opinions of this gentleman?

I have already, in reply to a previous question, stated that this article was written without payment from the Government. I think my hon. Friend will find that that answer really answers his supplementary question.

Will the right hon. Gentleman say plainly whether the Government accept these opinions for the circulation of which they pay?

Will the Government make the greatest possible effort to get this document circulated all over the United Kingdom?

Is the right hon. Gentleman aware that the leaflet contains this phrase

"Military preparedness may be a demoralising and degrading business"?

asked the Prime Minister whether he can state the number of the men in the Defence Force who have been employed in active duty in maintaining order or protecting property?

My right hon. Friend has asked me to reply. Three thousand five hundred all ranks of the Defence Force are at present employed on protection duties.

Lighting and Fuel Restrictions

asked the Prime Minister whether, in the event of the prolongation of the stoppage in the coal mines, he will impose all the War-lighting, restrictions and regulations for the early closing of all places of relaxation and entertainment forthwith; whether he will insist on the most drastic reduction of light and fuel in all Government Departments and in the Palace of Westminster; whether he will insist on the equitable sharing out of all stocks of coal, whether Government or private, whenever and wherever necessary, and, if necessary, taking compulsory powers for the purpose forthwith; whether he will assure the country that such coal as the Government may consider necessary for the life of the community, whether from home or foreign sources, will be obtained, and that complete protection will be given to volunteers who undertake to discharge or distribute it?

I have been asked to reply. As regards War lighting restrictions, I would refer the Noble Lord to the reply that I gave to him on the 21st April. The questions whether regulations should be issued directing early closing of all places of relaxation and entertainment is now being considered in relation to the amount of available stocks and the saving which could be effected. Urgent instructions were issued to Government Departments by the Office of Warks on the 6th April directing immediate economies in lighting and heating, and I understand that drastic reductions in the consumption of light and fuel have already been effected in the Palace of Westminster. With regard to the other points raised by the Noble Lord, I am satisfied that the Government possesses ample powers, and can assure him that all necessary steps towards effecting the purposes indicated have been and are being taken.

Is the right hon. Gentleman aware that, so far from the Order of the 6th April having been carried into effect, it is noticeable that in the Palace of Westminster the Order has had very little effect? Is he also aware that the amount of street lighting might be considerably reduced, and does he know that the public parks are still lit up at night and very little reduction has been made?

All these things are not quite so simple as they seem. As far as the House of Commons is concerned, I quite admit that possibly a further reduction might be made, and I shall be glad to receive any suggestions. I certainly think there has been a very great improvement since the 6th April. As to street lighting, it is a question for the police, and it is also one of public safety. All these matters have to be taken into consideration.

Civil Sebvice Confederation

asked the Prime Minister whether he is aware of the issue of a manifesto, dated the 12th April, and signed on behalf of the general purposes committee of the Civil Service Confederation, purporting to direct civil servants to be neutral and vigilant in any conflict between the State and the revolutionary elements in the labour movement; whether the two signatories of such manifesto, Chase and Shayler, are in fact civil servants; and whether any disciplinary action has been or will be taken in respect of this act?

I have been asked to reply. My right hon. Friend is aware that the Civil Service Confederation has issued a statement, dated the 12th April, indicating the manner in which that body would like its members to act in certain assumed contingenies during the coal stoppage. Mr. Chase, but not Mr. Shayler, is a civil servant. The right hon. Gentleman does not propose to take any action upon the document, but he regrets its publication, which appears to him very injudicious, and unlikely to advance the interests of civil servants themselves. Civil servants are the servants of the nation, and, whilst retaining their rights as individuals, it is very undesirable that they should take part as a body in the discussion of matters of political controversy.

In view of the gross disloyalty of this manifesto, should not the hon. and gallant Gentleman consider the expediency of withdrawing the War bonus from the civil servants concerned in its issue?

Will Mr. Chase be eligible for his pension, or, when he is eligible, will he get it?

Transport

asked the Minister of Transport whether he has entered into an agreement or understanding with those who claim to represent those employed in the railway or transport industry as to the purposes for which coal may or may not be allowed to the public for private consumption or the carrying on of industry; and, if so, will he inform the House of its nature?

Foreign Coal

asked the Minister of Transport whether foreign coal is available for immediate landing in this country; and, if so, has he informed leaders of organised labour that any embargo sought to be imposed on the importation or handling of foreign coal, in order that certain political objects may be obtained, will not be allowed to stand in the way of the comfort and welfare of the community, and that volunteer labour will be called on to deal with the situation if necessary?

I have been asked to reply. The answer to the first part of the question is in the affirmative. As regards the latter part, I would refer my hon. and gallant Friend to the reply given on Tuesday last by my right hon. Friend the Minister of Transport to a Private Notice question put by the hon. and gallant Member for Lewisham.

Is the right hon. Gentleman aware that on Friday a Belgian steamship was unable to unload at Ipswich her cargo of coal owing to the refusal of the dockers to handle it, and had the work to be eventually carried out by volunteer labour?

Questions

Consumption (Spahlinger Treatment)

asked the Prime Minister whether he will consider the advisability of appointing a Commission to investigate at once the merits of the Spahlinger treatment for consumption, particularly in view of the fact that 18 persons were treated in England with this serum in 1913–14 when they were in the third degree of consumption, and to-day these persons are well and able to carry on their former occupations; and whether, in view of this fact and also that 40,000 people die of consumption annually in this country, he will consider it desirable to exhaust every means in his power to secure the Spahlinger treatment for this country so that it may he available to all people suffering from consumption in any of its stages?

I have been asked to reply to this question. I may remind my hon. Friend that the question of the merits of the Spahlinger treatment for consumption has been under consideration by the responsible medical authorities in this country since 1914; and during the last few months the Ministry of Health, following their usual practice of investigating the efficacy of all new methods of treatment for tuberculosis which are brought forward, have given further special attention to the matter at the particular request of M. Spahlinger. The difficulty in the case is, however, that the serum itself and reliable details of the clinical evidence in support of its use are not forthcoming. An undertaking has, however, been given that, when supplies of this serum become available for independent and scientific investigation in this country, the Ministry of Health will facilitate an exhaustive examination of its efficacy. The appointment of a Commission, as suggested by my hon. Friend, would not, therefore, appear to be of any advantage at the present time. I think it desirable to emphasise that, in the opinion of my medical advisers, there is not yet available a sufficient body of evidence to justify the claims made for this treatment.

Industrial Disputes

asked the Prime Minister whether, in view of the success which attended the recent conference between Members of this House and the representatives of the mineowners and miners, respectively, he will consider the desirableness of affording facilities for similar conferences with the parties aggrieved in cases of industrial disputes?

I fully recognise the importance of obtaining every assistance which may tend to hasten a solution in cases of industrial disputes, but I would respectfully urge that this desirable object will not be achieved if 700 Members of this House take a part in conducting the negotiations in all industrial disputes.

Is it not the fact that much fewer than 700 Members, in one hour upstairs, achieved more than the Government did in a fortnight?

Have any number approximating to 700 Members ever taken part in the proceedings of this House?

Central Control Board (Liquor Traffic)

asked the Prime Minister whether, in view of the dissatisfaction existing amongst the large majority of the people of this country at the continuance of the Central Control Board (Liquor Traffic), he will give this House an opportunity of discussing the matter before the Whitsuntide Recess?

If there be a general desire for such a discussion, an opportunity will occur on the Motion for the Whitsuntide Adjournment.

Is the right hon. Gentleman aware that it has been indicated in this House time and time again that there is a desire for a discussion of this matter, and, furthermore, that the people of this country are absolutely sick and tired of these Regulations being in force?

In view of the answer to the question, may I ask what is the date of the Whitsuntide Recess?

What will happen if the Government are sufficiently satisfied that there is a desire for a discussion?

asked the Prime Minister whether, in view of the fact that the emergency which necessitated the establishment of the Central Control Board (Liquor Traffic) has passed and that the control is nevertheless to continue for a certain period, he will advise the Board to make the conditions as to the sale of liquor, as far as possible, similar in the scheduled areas to those in force in the unscheduled areas?

I would refer the hon. and gallant Member to my answer of last Thursday, to the effect that the conditions as to the sale of liquor in unscheduled areas cannot be assimilated to those in scheduled areas without legislation.

Will the right hon. Gentleman explain the justice of keeping two-thirds of the country under a different arrangement from the remaining third now that the emergency has passed? Is it not possible to introduce very short legislation to remedy this manifest injustice?

I am sure the hon. and gallant Gentleman will appreciate that no measure could be introduced on this subject which was not controversial.

asked the Prime Minister the total amount of the salaries and bonuses paid to those members of the staff of the Central Control Board (Liquor Traffic) who have been or are loaned from other Government Departments since the inception of the Board's operations?

I am informed that the figure asked for, which covers a period of not quite six years, is £35,885, and is made up of £5,055 paid by the Central Control Board and £30,830 charged to the Votes of the lending Departments.

Termination of the War (Date)

asked the Prime Minister whether he is aware that large numbers of citizens have entered into agreements of various kinds which are to terminate at the end of the War or six months after the termination of the War, and that, under these circumstances, great inconvenience and hardship is being occasioned by reason of the delay on the part of the Government in fixing the date for the termination of the War; and whether he can inform the House whether the Government are now in a position to fix the date?

asked the Prime Minister whether he is yet in a position to make any forecast as to the date of the termination of the War under the Termination of the War Act, 1918; and, if not, whether he will be able to do so before the General Election?

I am aware that in certain cases inconvenience is no doubt experienced for the reasons stated, but I would refer to the replies given by the Prime Minister on 4th April in answer to questions on this subject, and which I am not in a position to amplify.

Is not the right hon. Gentleman aware that numerous contracts have been entered into for making either increased or decreased payments until the end of the War or six months after? Surely the time has now arrived when some definite date should be fixed?

Canadian Cattle (Royal Commission)

asked the Prime Minister if he can now announce the personnel and terms of reference to the Royal Commission on the Cattle Embargo?

asked the Prime Minister if he will now state the names of the members of the Commission that will deal with the embargo on Canadian cattle?

I am glad to say that the Commission is now complete, and the following are the members:

"To inquire into the admission into the United Kingdom of livestock for purposes other than immediate slaughter at the ports, whether such action would increase and cheapen the meat supply of the country, and, if so, to what extent, and whether it is advisable, having regard to the necessity of protecting livestock bred in the country from the introduction of disease, and of restoring their numbers after the losses to which they were subjected during the War."

Is there to be no Irish representative on this Commission? It is an important matter to Ireland.

If there is to be no Irishman on the Commission, will there be someone who is conversant with Irish conditions?

I will convey that suggestion, but that is the composition of the Commission as already appointed.

Is the right hon. Gentleman aware that, in the answer to a previous question put by my hon. Friend (Sir M. Dockrell), an assurance was given that the inclusion of an Irish representative would be considered?

Is not the whole object that the Commission should not represent interests in that way, but should represent the whole country?

Is the right hon. Gentleman aware that there are 5,000,000 cattle in Ireland, out of 11,000,000 in the three kingdoms? Surely that five-elevenths is a serious consideration?

Licensing (Proposed Conference)

asked the Prime Minister whether the Government will inaugurate a conference on the licensing question under authoritative chairmanship, so that the various parties to this controversy may ascertain how far they can go in unison, and in a spirit of common fairness and common-sense, with a view to an agreed measure?

Yes, Sir, the Government intend to pursue this course, and the necessary arrangements are now under consideration.

Is it proposed to convene merely Members of this House for purposes of conference, or will representatives of various interests outside the House be convened as well?

I have said that the arrangements are under consideration. I cannot say anything further.

Housing

Finance

asked the Prime Minister if the review of the finance of the Government housing scheme is now completed; whether the time has come for a reconsideration of the whole policy, bearing in mind that the people whom the scheme was designed to benefit cannot now afford to pay rents of 30s. and over per week, as are now demanded by many local authorities; and whether, seeing that after these rents have been charged a further loss of 30s. per week per house has to be borne by the already overburdened tax and ratepayers, he will consider calling a halt until some more economical scheme has been devised?

I have been asked to reply to this question. I am not yet in a position to make a final statement of future policy on this subject, but I have no doubt that it is possible to effect material economies in the building of working-class houses, and I do not intend to approve of local authorities entering into further commitments unless a substantial reduction in capital expenditure can be secured.

In view of the fact that we have not had a Housing Debate since the right hon. Gentleman has been in charge of his Department, and of the supreme urgency of this question, will he arrange with the Leader of the House that the Estimate of his Department shall be put down at an early date?

I shall be only too pleased, when my Estimates are put down, to have an opportunity of discussing the subject. They have been put down once or twice, but have been postponed. I have no doubt that if they are asked for they will be put down fairly early.

Will the local authorities get the benefit of the fall in prices in connection with existing contracts?

I did not quite catch, that question. Perhaps the hon. and gallant Member would repeat it?

Government Policy

asked the Prime Minister whether his attention has been called to the statement of the Minister without Portfolio in relation to housing policy, as reported in the London Press on the 26th April; and if he will take appropriate steps to reassure the local authorities concerned that the contractual obligations they have entered into in respect of housing schemes will not be injuriously affected by any contemplated change of policy on the part of the Government?

Definite assurances have frequently been given on behalf of the Government, and have been repeated by my right hon. Friend the Minister of Health, that local authorities will not be prejudiced as regards financial assistance in respect of any contractual obligations entered into by them with the approval of the Ministry

Ireland

Chief Secretary's Office

asked the Prime Minister whether, now that the Government of Ireland Act has come into operation, it is intended to continue the office of Chief Secretary; and, if not, which Minister will be responsible for answering Irish questions in the House of Commons?

The date for the transfer of the several services under the Act has not yet been determined. Until that transfer has been effected, the office of Chief Secretary remains. The Chief Secretary will continue to be responsible for answering Irish questions in this House.

When this transfer does take place, will the office of Chief Secretary then become abolished?

May I ask whether in future the occupant of the position of Chief Secretary will be in his place to answer questions in this House, and how often has he been here since the last Recess?

Nobody knows better than my hon. and gallant Friend how important it is that the Chief Secretary should be in Ireland.

Lord Derby's Visit

asked the Prime Minister whether Lord Derby has been instructed to offer to the representatives of Sinn Fein fiscal independence and relief from the Irish share of the National Debt as terms of peace?

asked the Prime Minister whether, under his instructions, Lord Derby has negotiated with colleagues of Michael Collins in the Irish republican cabinet; and, if so, whether he regards them as free from any complicity in the policy of murder and outrage?

Lord Derby's visit to Ireland was undertaken purely on his own responsibility, and on his own initiative. The other parts of the questions do not, therefore, arise.

Has the Noble Lord been entrusted with any further mission with a view to any future visit to Ireland in connection with it?

I do not know what the hon. and gallant Gentleman means by the words "entrusted with"—not by the Government.

Compensation Claims

asked the Prime Minister whether persons in Ireland whose property has been destroyed by Forces of the Crown, not acting under the direction of military authorities, are still entitled to claim compensation from the civil courts?

I would refer the hon. Member to the reply which the, Prime Minister gave to a question on this subject on the 28th ultimo, and to which I have nothing to add.

Is the right hon. Gentleman aware that no reply was given to the question whether, in the event of acts of indiscipline by Forces of the Crown and the destruction of property resulting therefrom, the victims would have any opportunity of suing in the civil courts?

If the hon. Member will consult the reply on the date mentioned, he will find a full answer.

Is the right hon. Gentleman aware that the question has never been answered whether the victim of unofficial reprisals has a right to sue in the Courts?

Yes, Sir. If he will consult the answer to which I referred, he will find that my right hon. Friend the Prime Minister limited the prohibition to persons in the case of official reprisals.

Press Censorship

( by Private Notice ) asked the Attorney-General for Ireland whether it is true that the military authorities have prevented the correspondents of various journals of the world from sending in an account of the scenes accompanying the execution of four young men in Cork on Thursday, 28th April; and whether it is true that the despatch written by the correspondent of one American journal describing these incidents was impounded by the military authority?

I will answer this and another Private Notice question, by the hon. and gallant Member for Leith (Captain W. Benn), together. I am informed by the General Officer Commanding-in-Chief that the answer to the first part of the question, so far as it relates to the martial law area, is in the affirmative, and that the answer to the second part of the question is in the negative. The General Officer Commanding-in-Chief fully supports the action taken by the Military Governor of the martial law area.

Is not the censoring of these reports an indication that the Government recognise that the shooting of prisoners of war is an act revolting and shocking to the moral sense of the community?

No. It is caused by the fact that the area in which the censorship occurs is one where an insurrection is taking place at present.

What is the object of wishing to prevent people in other places knowing what is going on in Ireland?

The public know the truth very well. The object obviously is to prevent comment in certain newspapers which is not designed in the interests of peace.

Will the right hon. Gentleman suggest that the account of incidents connected with the execution of four young men in Cork can by any such methods be kept from reaching America and other parts of the world, and if he does suggest that that is the object, does he think that these things should be kept and can be kept from the knowledge and the indignation of the world?

That is a matter for which the experienced military officers who are wholly in charge are responsible.

Will the right hon. Gentleman explain how the publication in America, of incidents attending the execution of these four men can lead to disturbances in Cork?

If the Noble Lord would refer to the last part of my answer, he would see that I said that the answer to the second part of the question was in the negative.

Questions

Members of Parliament (Facilities)

asked the Prime Minister whether, in any suggested extension of facilities for Members of Parliament, consideration has been given for purposes of guidance and comparison to the facilities granted to Members of Parliament in the legislative Chambers of our self-governing sister nations within the British Empire?

Yes, Sir. In examining this question the Select Committee had before them all the information necessary to enable them to prepare their Report.

Without advocating any particular reform, would it not be advantageous to let the public know that Members of this House receive fewer facilities than do the members of any legislative Chamber in the English-speaking world?

Does not the right hon. Gentleman think, after all, when we are insisting on proper wages being paid in the ordinary Departments of the State, this Department at least should not be paid blackleg wages?

Iron and Steel Industry, France

asked the Prime Minister whether he has any information that Herr Hugo Stinnes has entered into a financial arrangement or combination with those who control the French iron and steel industry?

Egypt

asked the Prime Minister if he is aware that coercive measures are being taken by the authorities in Egypt to compel the people to affix their signatures to declarations of confidence in the present Cabinet and against Zaghloul Pasha; that the situation is in consequence becoming critical; and whether he will take steps to reassure the people of Egypt of the good faith of His Majesty's Government without further delay?

I have no information which would justify in the smallest degree the suggestion contained in the first part of this question. For the rest, no reasonable person in Egypt entertains any doubt as to the good faith of His Majesty's Government.

Has the hon. Gentleman any information as to when it will be possible—

Passports and Visas

asked the Undersecretary of State for Foreign Affairs whether upon any occasion any offer has been received from France to the effect that if His Majesty's Government reduced the price for visas on passports the French Government would at once reciprocate; and, if so, what was the amount of the lowest sum suggested?

The answer to the first part of the question is in the negative; the second does not therefore arise.

Is it not a fact that the French Government has suggested that, if we are prepared to grant visas gratis to French people, they will equally reciprocate?

Anglo-Japanese Alliance

asked the Under-Secretary of State for Foreign Affairs whether the Government are now in a position to publish the representations they have received from China in regard to the renewal of the Anglo-Japanese Alliance?

No written representation has been received from the Chinese Government on the subject since the answer returned to the hon. and gallant Member for Leith by the Prime Minister on 10th June last. His Majesty's Government are alive to the interest taken in this matter by the Government and people of China, but they do not consider that publication would serve any useful purpose.

When the hon. Gentleman states that he has not received any communication from the Pekin Government, does he also mean that our Ambassador in Pekin has not received any representation? If so, I should like to show him some reports oil the subject.

I should be glad if my hon. Friend would do so. My information is that no official representation has been received from the Chinese Government since the answer was given to my hon. Friend the Member for Leith in June last.

Is it a fact that the answer was never published in this country, and would it not be desirable, before we renew the Anglo-Japanese Treaty, to know what are the official views of the Chinese Government?

That is always a subject for consideration. I understand it was desired by the Chinese Government that the document should not be published.

Apple Culture

asked the Minister of Agriculture whether he will now suggest to the railway companies the advantage of utilising spare ground along their lines for the planting of apple trees with a view to the promotion of the growth of apples in this country?

I am advised that the soil of which railway embankments are composed is rarely suitable for the growth of fruit trees. If apple trees were planted on them and they did not receive continued attention in the way of cultivation, pruning, spraying, etc., they would produce little but inferior fruit, and that only in years of generally abundant crop. The Ministry, therefore, is not prepared to advise railway companies to embark upon the business of fruit growing upon railway embankments.

Is the right hon. Gentleman aware that I expressly barred railway embankments, and that my question does not consider them at all? What I refer to is spare level ground along the line.

Flour (Prices)

asked the Minister of Agriculture whether, within seven days of the decontrol of flour, the price was advanced 6d. per 280 lbs. by the millers in Manchester and Liverpool; whether the state of the wheat market justified this advance in any way; and, if not, whether the Ministry of Agriculture possesses any powers to check profiteering of this kind in the food of the people?

I have been asked to reply. During the period of control the Government followed the practice of fixing the price of flour on an ex-mill basis. On the removal of control the milling industry reverted to their pre-control practice of charging a price computed on a "delivered in" basis. The advance of 6d. per 280 lbs., to which the hon. Member refers, was not in fact an advance in price but an adjustment of this nature, and as the average cost of delivery probably exceeds 6d. per sack, there is no ground for the suggestion that there has been profiteering in the food of the people.

Cultivation Certificates

asked the Minister of Agriculture whether he proposes to issue instructions to county agricultural committees to guide them in their consideration of applications for certificates under Section 10 (2) of the Agriculture Act; whether their attention will be drawn to the need of giving agricultural occupiers adequate time in which to return to the standard of cultivation obtaining before they became subject to the orders of war agricultural executive committees; and will he also remind these committees that applications for certificates must be preceded by due notice from the landlord to the tenant specifying the matters complained of?

The powers to which the hon. Member refers are conferred by Parliament upon county agricultural committees direct, and the Ministry is not in a position to exercise any supervision or control over their action. The Ministry has, however, supplied committees with a pamphlet calling attention to the powers in question, and I am sending the hon. Member a copy.

Will the right hon. Gentleman say whether this pamphlet covers these specific points?

It calls the attention of committees to the powers they possess. They must exercise their powers according to their own discretion. We cannot do more than that. They are statutory powers. The attention of the committees should be called to these points by hon. Members if they so desire.

Does not the right hon. Gentleman think it desirable, seeing that these specific difficulties have arisen, that any information sent out by his Department should deal with these specific difficulties?

We cannot do more than call the attention of the committees to the powers which they possess.

Ministry of Health (Medical Staff)

asked the Ministry of Health when the staff of doctors maintained by his Ministry will be reduced to ordinary and financially-possible dimensions?

I would refer my hon. Friend to the reply which I gave on the 28th April to the hon. and gallant Member for Harborough.

Were not 30 doctors appointed just before the House rose, and is not this expense affecting the health of the taxpayer?

His health is not affected, though the amount of money in his pockets may be.

Is not it the case that if a man's pocket is affected too much, it very prejudicially affects his health?

Rent Restrictions Act (1920)

asked the Minister of Health whether his attention has been called to an official memorandum on the Rent Restrictions Act, 1920, issued by the Ministry of Health last year, in which it is stated that it is specially provided in the Act that the landlord can pass on to the tenant liability for rates so long as a corresponding reduction is made in the rent; whether he is aware that in the recent case of Griffiths v. West, tried at Wood Green County Court, Judge Crawford decided that the landlord has no such power under the Act; and what steps he proposes to take in order to bring the law into conformity with the official memorandum?

The statement in the memorandum is not inconsistent with the decision mentioned by my hon. and learned Friend, which, I understand, was to the effect that a transfer of the liability for rates and consequent reduction of rent could only be made by agreement with the tenant. I would, however, remind my hon. and learned Friend that the memorandum does not, and could not in any event purport to be an authoritative exposition of the precise rights of landlords and tenants under the Act.

Will the right hon. Gentleman bring in legislation in order to carry out the intention of Parliament, which presumably was stated correctly in the memorandum to the Act?

I have looked into the matter, and am advised that there is no inconsistency between what is stated in the memorandum and what was laid down by the judge.

Is the right hon. Gentleman aware that the memorandum states that the landlord may pass on the liability for rates to the tenant, and that the judgment states he cannot?

London (Local Government)

asked the Minister of Health whether the. recent refusal of His Majesty's Privy Council to grant a charter of incorporation to the Walthamstow Urban District Council indicates the intention of the Government to introduce a Bill for the better government of the Metropolis and Greater London with a view to easing the financial burdens of local necessitous areas; and if he can say when such a Bill is likely to be introduced?

The Government are considering the question of instituting an inquiry into the local government of London and Greater London, but there is no intention of introducing a Bill on this subject at the present time.

East African Operations (Colonel Aitken)

asked the Secretary of State for India whether, in view of the vindication of Colonel Aitken with regard to the East African operations in 1914, he can now state if steps have been taken to settle what recognition and compensation will be granted to this officer?

My right hon. Friend has referred the question to the Government of India for their consideration, and is awaiting their reply, which he has requested them to telegraph.

Indian Army Officers (Pay)

asked the Secretary of State for India whether a decision has yet been arrived at with the War Office regarding the adjustment of the pay of those officers of the Indian Army who were retained in the Army on account of the War beyond the date on which they became due to be placed on the retired list; and, if so, with what result?

This subject is still under consideration, but it is hoped that a decision may be made shortly.

Oversea Settlement (Indian Officers)

asked the Secretary of State for India whether his attention has been called to the fact that officers and men of the Royal Navy, Royal Air Force, and the British Army are eligible for grants of passages overseas under the overseas settlement scheme, but that officers and men who have served in the Indian Army during the War are ineligible; whether he can explain the reason for such discrimination against officers and men of the Indian Army who have equally served the country with those of the other forces above named; and whether the Government will take steps to remove this injustice with a view to giving free passages within reasonable limits, both outwards and homewards, for resumption of resident settlement after War service?

I have been asked to answer this question. The oversea settlement scheme is intended to provide free passages from the United Kingdom to other parts of the British Empire for approved ex-members of those forces of the Crown for which payment was made exclusively out of monies provided by the Parliament of the United Kingdom. The scheme does not, therefore, apply to the forces paid for from the revenues of the various Dominions and Colonies and of India.

In view of the obvious injustice to these officers who have served in the Indian Army and are less favourably treated than officers who have served elsewhere, will the Government reconsider the question with a view to legislation?

It is not a question of where the officers and men have served, but of the part of the Empire to which the forces in which they served belonged, and this question is for the Government of India to decide.

I am sure that my hon. and gallant Friend is capable of representing that for himself.

Mr. Speaker's Retirement

His Majesty's Answer to Address

The Prime Minister has asked me to acquaint the House of the fact that their Address of Tuesday, 26th April, to His Majesty—

Praying His Majesty that He will be most graciously pleased to confer some signal mark of His Royal Favour upon the Right Honourable James William Lowther, Speaker of this House, for his eminent services during the important period in which he has with such distinguished ability and dignity presided in the Chair of this House; and assuring His Majesty that whatever expense His Majesty may think proper to incur on that account this House will make good the same,

—has been presented to His Majesty, and His Majesty has been pleased to receive the same very graciously, and has commanded the Prime Minister to acquaint this House that His Majesty is desirous, in compliance with the request of His faithful Commons, to confer upon the Right Hon. James William Lowther some signal mark of His Royal Favour; but as the same cannot be effectually granted and secured without the concurrence of Parliament, His Majesty recommends to the House of Commons the adoption of such measures as may be necessary for the accomplishment of such purpose.

Committee to consider His Majesty's most gracious Answer, To-morrow.—[ Mr. Shortt. ]

Emergency Powers Act, 1920

( at the Bar of the House ): Message from the King, signed by his own hand.

Mr. SPEAKER read the Royal Message ( all the Members of the House being uncovered ) as followeth:

GEORGE R.I.

The continued cessation of work in coal mines on the 30 th day of April, 1921, having constituted, in the opinion of His Majesty, a state of emergency within the meaning of the Emergency Powers Act, 1920, His Majesty has deemed it proper, by Proclamation made in pursuance of the said Act, and dated the 30 th day of April, 1921, to declare that a state of emergency exists.

Ordered, "That His Majesty's Most Gracious Message be taken into consideration upon Wednesday."—[ Mr. Shortt. ]

Business of the House

The first business will be the Report of the Resolution in connection with the retirement of the Right Honourable James William Lowther, and the second business to move a Resolution providing for the continuance of the Emergency Powers Act Regulations, and then the Second Reading of the National Insurance (Forces of the Crown) Bill.

Can the right hon. Gentleman say whether Orders numbers 3, 4, and 5 on the Order paper are all Report stages of Supply, and, if so, do the Government propose to take them all?

In any case on Thursday are we to have the Foreign Office Vote, and a full opportunity of discussing the Peace Treaty?

Bills Reported

Sutton District Waterworks Bill,

East Surrey Water Bill,

Reported, with Amendments; Reports to lie upon the Table, and to be printed.

Orders of the Day

Ways and Means [25th April]

Budget Resolutions reported,

Customs and Excise

Continuation of Duties (Customs).

1. "That the duties of Customs, specified in the first column of the following table

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."

Continuation of Additional Medicine Duties (Excise).

2."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."

Wines (Customs).

3. "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 six pence 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.

4. "That—

( a ) Income Tax shall be charged for the year beginning the sixth day of April, nineteen hundred and twenty-one, at the rate of six shillings in the pound, and the same Super-tax shall be charged for that year as was charged for the year beginning the sixth day of April, nineteen hundred and twenty: and

which were imposed by Part I of The Finance (No.2) Act, 1915, and continued by 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 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:—

( b ) the like provisions shall have effect with respect to the Income Tax and Super-tax so charged and the annual value of property as had effect with respect thereto for the year beginning the sixth day of April, nineteen hundred and twenty.

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."

Reliefs

5. "That—

( a ) Sections forty-three and forty-four of The Income Tax Act, 1918, shall be deemed not to have been continued in force as respects the year 1920–21; and

( b ) paragraph (1) of Rule 3 of the Miscellaneous Rules applicable to Schedule D shall not apply, and shall be deemed never to have applied, in any case where the person charged has continued to carry on throughout the year of assessment the trade, profession, employment, or vocation in respect of which the assessment was made.

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."

Excess Profits Duty

6. "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 of 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 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 be 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."

First Resolution read a Second time.

I beg to move, in the Table, to leave out the words "Increased duty on tea…1…1st August, 1922."

The effect of the Amendment would be to leave out of the Resolution power to impose a continuance of the increased duty on tea. The object is to lighten to some extent the very heavy load of indirect taxation which is resting upon the people. It is inevitable that after a great war, taxation must be heavy, but it is desirable that the taxation should be made to fall as lightly and equitably as possible. With regard to tea, I will tell the House what is the difference between the position to-day and the position in 1914. The tea duty in 1914 was 5d. in the £ to-day it is 1s. in the £. According to the latest figures I have been able to obtain, the yield of this duty at the end of the year 1919–20 was £17,747,060 6s., so that if this Amend- ment was accepted the House would be taking off taxes to the amount of something like £17,000,000 from the general workers of the country. I realise that in normal times a proposition of that sort would not be practicable, but I hope to convince the House that it is within the range of practical politics to-day. What is the real burden of indirect taxation at the present time? We are raising in Customs and Excise no less than £323,000,000, as estimated in the balance sheet for this year's Budget. Roughly speaking, that is four times as much as was raised in pre-War time. If one makes a rough calculation and attempts to gauge what that burden of indirect taxation is on the weekly wage of the workers of this country, I think it is fair to assume that it amounts to something like 12s. 6d. a week for a family of five persons. That is a very large proportion of a working class income, particularly at a time when great wage reductions are being made.

4.0 P.M.

We know that already in the coal industry it is proposed to reduce wages to an extent varying from 5s. 6d. a week to 57s. 6d a week. Those figures I have obtained from the statistics of the Mining Association. While very serious wage reductions are being made or are projected, we have this very heavy burden of indirect taxation resting on the people whose wages are to be revised. Anything the House can do to lighten that burden and to make it easier for those concerned to accept what in many cases appears to be an inevitable reduction, this House should do. There is another consideration. In making reductions in taxation it has been the object of this House in times past to try to keep a balance between direct and indirect taxation. If indirect taxation was being lifted, direct taxation was lifted too, in order to keep a proportion and a balance. The general tendency has been to decrease the proportion of indirect taxation levied and to increase the proportion of direct taxation. What are we doing in the present Budget? It has too easily gone forth to the country that we are practically making no change at all, and that the balance between direct and indirect taxation will be the same in the coming year as it has been in the past. That is an entirely erroneous view. A very substantial reduction has taken place in direct taxation, and, if we are to maintain a fair balance and proportion, we are bound to give those who contribute by indirect means to the revenue of the State some measure of relief. I refer to the fact that Excess Profits Duty is not to be levied during the coming year. That, in effect, is a substantial reduction of direct taxation. I see there is a proposal on the Order Paper to reduce the Income Tax. The Income Tax is reduced by the present Budget, as can be seen from the fact that, although we are passing through a time of serious depression which is likely to continue during the whole year, the Chancellor has estimated that this year he is going to get a greater return from Income Tax and Super-tax than last year. Upon what does he base that Estimate? Upon the fact that excess profits are now coming into income and will contribute to Income Tax. It is a commonplace argument that in doing away with the Excess Profits Duty we shall not lose the whole amount, because a proportion will be paid in Income Tax. I therefore submit that we are making a very considerable reduction in direct taxation through the Income Tax, and that we ought to counterbalance it, I do not say by making an equivalent reduction, but, at all events, some appreciable reduction in indirect taxation.

Last year the Excess Profits Duty realised something like £219,000,000, and this year it is expected to collect something like £120,000,000. On the one hand, therefore, we have the fact that a tax which has raised enormous sums is no more to be levied, and, on the other hand, a proposal to remit a tax which brings in something like £17,000,000 a year, or, roughly, not one-twentieth of the amount raised by the Excess Profits Duty. I do not for a moment say that you should give relief in the matter of indirect taxation to the full amount of the Excess Profits Duty, because, if that duty were continued, it would not bring in the same amount, and we are all agreed that it should not be continued, but, as we are giving a very substantial reduction to those who contribute most largely in direct taxation, we ought to give what relief we can to those who pay indirect, taxation. I do not put this proposal forward from any ethical or moral point of view, but, if one has to pick out an indirect tax which bears upon everybody and the remission of which will give everybody some benefit, it is the Tea Duty, and, if we are to give relief in indirect taxation, the avenue most open to us and along which we can go furthest is the Tea Duty.

The amount involved in the remission of this tax would be very considerable in normal times, but, taking into account the whole of the revenue and the great sums that have been foregone through the remission of the Excess Profits Duty, it is comparatively small. Still it would have to be made up. Where is the Chancellor to look for the money which he would lose? I suggest that the balance-sheet shows a very considerable surplus of £242,000,000, and my proposition is to take £17,000,000 from that sum. It is a comparatively small proportion, particularly in the hands of the present Government, who are accustomed to deal with millions in a very lavish way, and to engage in all kinds of expenditure involving vast sums. What is going to be done with this surplus of £242,000,000? It is to be applied to the reduction of debt. The Chancellor of the Exchequer tells us that the repayment of debt is simply the transference of money from the pockets of one set of people to the pockets of another set of people. Therefore, if the whole of this amount be applied to the repayment of debt, that section of the community which pays most in the way of direct taxation will benefit-most by receiving these capital payments. No one with any sense of responsibility would minimise the importance of the repayment of debt as quickly as possible, but in these times we should have some sense of proportion. The workers of the country are passing through a very distressing period. We have an enormous amount of unemployment, and conditions of the most severe kind are being experienced. We ought to do what we can to relieve that distress, and it is not asking too much that the whole of the estimated surplus should not be applied to debt reduction, but that some of it should be spared to make this remission. To-morrow we shall have the Minister of Transport coming down to tell us that the estimated surplus of £240,000,000 will be very seriously affected by the dislocation of the railway service. It will be a very unfortunate thing if the Government, having given such enormous relief to the direct taxpayer and to the producer, find it impossible out of this great surplus to do anything at all for the relief of the general body of taxpayers. I therefore press this Amendment upon the notice of the Government and ask them to take it into their most serious consideration.

I beg to second the Amendment.

We have of late imposed increases of duty upon food and other commodities, and the result has been increased wages. It would not be possible to discuss sugar, but it might interest the Committee to know that the duty on sugar was increased by over 1,000 per cent. during the War. There have been other large increases on other commodities, and they have justified the workpeople insisting upon increases of wages. Those increased wages have been based on the increased cost of commodities. We have had that in wages and also in the Civil Service, with the result that increased taxation has had to be paid by other people. Many hon. Members have had to pay increased taxes on commodities and then increased taxation to enable the Civil Service to receive their bonus. That bonus has been based on the increased cost of commodities, and that increased cost of commodities has been dependent upon increased taxation placed upon different goods. The tax alone only forms a part of the burden, because, of course, there are additional profits made out of the increased taxation. Thus the circle goes round.

Every year for a good many years I have heard the speech which has been made by the hon. Mid gallant Gentleman opposite (Major Barnes), and every year I am reminded of the description of the bridge which some gentleman built of his great bounty at the expense of his county. Every year some member of the Opposition suggests that the Tea Duty should be abolished, and, as sure as he conies into office, he and his friends charge the Tea Duty, just like every Government does, and will until somebody gets up, and, unlike the hon. and gallant Gentleman, suggests how the large amount of revenue which he proposes to relinquish can be made up. His very simple prescription is to throw it on to the direct taxpayer, who is already ground down to the dust with Income Tax and the annual capital levy, facetiously called Supertax, and the indirect taxation which he pays to a larger extent than the person who only pays indirect taxation. The hon. and gallant Member may make a speech full of sympathy with the poor—it has been made every year since I have been a Member—suggesting that others who are hard-hearted grind down the face of the poor by charging the Tea Duty, but, if there be anyone who would be glad to see the Tea Duty abolished, it is the tea producer, and those interested in tea production, of whom I am one. It is not serious business to come here and pop up every year and say, "Let us relinquish the Tea Duty and throw it on to the direct taxpayer." There is no serious protest, and I believe this has long since ceased to be regarded by the poorer classes as anything but a party manœuvre. It also places in a rather invidious position those who really are very anxious to see the Tea Duty reduced. Who would be more anxious than the tea producers, but it is quite impossible for them, being serious men of business, to get up and make speeches such as that we have just heard from the hon. and gallant Gentleman. I confess I rather resent it, because, as I say, those who are interested in the production of tea are most anxious that their product should reach the consumer at as cheap a price as possible, not only because they are just as humane as the hon. and gallant Gentleman, but also because their interests lie that way. But serious Members of this House find it quite impossible to take seriously the suggestion that indirect taxation should be thrown away so much, and an additional burden piled on the back of the direct taxpayer, who, I repeat, is already ground down to the dust. I feel I am laying myself open to the charge which I preferred against the hon. and gallant Gentleman of quoting in substance what I have said before, and if so I have to apologise, but to hear this old, old song repeated only provokes from this side of the House the stock reply, and, I may add, the inevitable reply.

The hon. Member who has just spoken tells the House that as a large tea merchant he wants to get the tea to the consumer as cheaply as possible. I may say that the average tea merchant is a very humane person. I do not suppose the House has quite realised that on 31st December, 1913, the price of Indian tea, according to figures from "The Times" newspaper, was apparently 9⅛d. per pound, and on 31st March of the present year the price of Indian tea in Mincing Lane was only 10d. per pound. That is to say, in spite of the great rise in prices, the Indian tea merchant is getting an increase of less than one penny. That is a very remarkable thing, and all the more remarkable because the hon. and gallant Member for East Newcastle (Major Barnes) has told us that whereas in 1914 the tax on tea was 5d. it has since gone up to Is., and the yield from that tax is now £17,000,000. Those are remarkable figures and will, I think, surprise the House. The hon. and gallant Member for East Newcastle made a plea to the House, which has been made before, and will be made again, that the best way to relieve the very poor and the working classes was to take off this tax on tea. I have heard that plea a great deal oftener than he has, but I would again draw his attention to the fact that whereas since 1914 the tax has risen from 5d. to 1s., the price is less than 1d. per pound before the War. Since 1913 we have had published periodically by the Ministry of Labour in the "Labour Gazette" the index figures of the cost of living. Does the House realise that in calculating the rise in the cost of living this taxation is allowed for? In other words, this particular rise in taxation does not affect organised labour or the great mass of civil servants, because as the cost of living goes up their wages and salaries mount accordingly. The rise in the cost of living is estimated for last month at 131 per cent., and of that a 6 per cent. rise is calculated for extra taxation.

On tea, of course. That should be taken off if you are going to ask organised labour and civil servants to pay a proper share of indirect taxation. You should subtract from the 131 per cent. rise in the cost of living the amount allowed in respect of this taxation. As it is, organised labour and civil servants are protected, yet I find the hon. and gallant Member for East Newcastle asking us to take another £17,000,000 from indirect taxation and throw that on to direct taxation. In 1921, the last financial year, all the Customs yielded was £134,000,000, whereas the whole revenue from taxation that year amounted to the enormous sum of £1,425,000,000. That was a very small sum in respect of Customs compared with the total taxation. Those who paid far the greatest amount were only a miserable minority—the Income Tax payers and the Super-tax payers. There are at the present moment only 2,400,000 effective Income Tax payers, and you have to add 57,000 Super-tax payers, or people who have effective incomes of over £2,000, and on this comparatively small proportion of our community—on this miserable minority—the hon. and gallant Gentleman and his Friends are going to put another £17,000,000, and I dare say there will be other Amendments, putting further amounts upon them. The thing is perfectly preposterous. There was a time when it was supposed that direct and indirect taxation should balance, 50 per cent. each. I wonder what the proportion is now. Yet, on top of all, we are asked to assent to this proposal. I do hope and pray the Government will stand firm and not give way to this Amendment.

The two hon. Members who last addressed the House have apparently taken the view that the object of the hon. and gallant Member for East Newcastle (Major Barnes) and those Labour Members who support him is to relieve the people of indirect taxation and to pile the burden on to the Income Tax and Super Tax payers of this country. I need hardly say that is no part of our intention. Many of us believe it would be better to do without indirect taxation if we possibly could, but we are compelled to face the facts and to admit that in present circumstances a large amount of indirect taxation is necessary. That, however, does not relieve us of the duty, especially in a crisis of this kind, of trying to make our system of taxation such as would be easiest for the great body of the people, and there is no reason in the world why in this particular Budget we should not introduce some exceptional device to meet the conditions through which the country is passing. Take the argument put forward by the hon. and gallant Member for Finchley (Colonel Newman). Surely he goes wide of the mark in his reference to the Income Tax and Super-tax payers. I would remind him of the recommenda- tions adopted by the Royal Commission on Income Tax. According to those recommendations a family consisting of husband, wife and three children, eligible for the usual exemptions and abatements at the present time may enjoy nearly £400 per annum before becoming liable for Income Tax at all. That would appear to be rather against the argument which I am leading to, but I mention it merely to show that a great deal has already been done in the sphere of direct taxation to relieve that section of the community.

May I remind the hon. Member that in my remarks I was dealing with effective taxpayers?

The point which I was leading to is this. The hon. and gallant Member has argued that we propose to keep anything we can save on the reduction of the tea duty, and put it on to the Income Tax payer and the Super-tax payer. I venture to make the suggestion, in reply to that, and it is supported by the official and quite impartial inquiry which was conducted, that if the Government care to adopt the proposals of the Royal Commission on Income Tax in evasion of Income Tax and Super-tax they can recover practically all that would be lost by a large remission of this duty, and there would be no injustice whatever in calling upon people to pay what they are legally bound to pay if we could only apply the law strictly in this matter. It is not a question of heaping additional burdens on them, but merely calling upon them to pay what they should pay, and it is, on the other hand, a concession affecting large numbers of wage-earners and many people with fixed incomes. As to the argument advanced by the hon. Member that the cost of living is falling, it is quite true that the statistics published month by month by the Ministry of Labour indicate a fall in the cost of living, but every housewife in the country knows that there is a great difference between these figures and the facts which she actually experiences in running the average home from week to week. The broad average reduction which is mentioned has not been experienced in a large number of the homes of this country. Even if that were not true, the situation is desperately hard at the present time in regard to indirect taxation, because of the great fall in working-class incomes which has been brought partly by industrial stoppage and partly by the general depression of the times. If the cost of living is falling, the wages of millions of the people are falling even more rapidly, and we therefore ask that something should be done in the way of giving relief in indirect taxation, and making the position somewhat easier. It is notorious that indirect taxation violates a fundamental principle, the principle of the ability to pay.

In 1919–20 it is estimated that under the four heads of food, tobacco, drink and entertainment, which I will call the four heads for the time being of indirect taxation, a family of five persons paid on the average 11s 5d. per week, and a year later that had risen to 14s. 2¼d. I do not know what the actual position is at the moment, but there is no doubt whatever that in indirect taxation in a time of depression a very serious burden is falling on millions of British people. We could easily find this money from other sources. We could find all that we are asking now by calling on Income Tax and Super-tax payers to do their duty within the limits of the law as it stands, and that is a very moderate estimate indeed of the amount of present-day evasion. It is idle for hon. Members to suggest that this money cannot be found, and I am going to plead with my hon. and gallant Friend opposite to find it now and to give this relief, in order to make the industrial crisis through which we are passing a little easier for millions of the wage-earning and fixed-income population.

One or two hon. Members have given the impression that the direct taxpayer is paying more taxation in proportion to his income today than before the War, that the burden on the direct taxpayer is higher to-day than formerly, in comparison with the burden on the indirect taxpayer. That view is probably due to the very heavy burdens which undoubtedly are falling on the direct taxpayer, but if one analyses the actual revenue which is being raised this year by the State, one finds that the percentage paid by the direct taxpayer towards the revenue is the same as in pre-War times. A study of the financial statement prepared by the Chancellor of the Exchequer reveals this fact, that the direct taxpayers this year, excluding Excess Profits Duty, are paying £512,000,000 towards the revenue of the State, while the indirect taxpayers are being asked to contribute £323,000,000; in other words, the direct taxpayers are paying 61 per cent. and the indirect taxpayers 39 per cent.

No; I am speaking of the taxes levied by the House. The House has always been accustomed, in analysing this position, to say to itself, How much revenue is levied by direct taxation and how much by indirect taxation? and the Debate this afternoon has revealed that there is an impression that the War has placed much heavier burdens on the direct taxpayer in comparison with the indirect taxpayer. In pre-War days, acording to Sir B. Mallet's figures, the direct taxpayer was paying about 60 per cent. I was astonished to find yesterday in his book that the proportion borne by the direct taxpayer to the total revenue raised by the State is the same to-day as in pre-War times.

From what page of the Financial Statement has the hon. Member got his figures?

On page 7 of the Financial Statement the hon. and gallant Member will notice that the total receipts from taxes this year are £964,000,000. If one deducts £120,000,000, the arrears of the Excess Profits Duty, the total sum taken from the taxpayer is £844,000,000, and a simple calculation will show that the direct taxpayer is paying £512,000,000 and the indirect taxpayer £323,000,000. I have risen because of the speeches which have been delivered, realising as I do that the burden is indeed heavy on the direct taxpayer, but the direct taxpayer is being asked to contribute the same percentage at present as in pre-War days. The fact of the matter is that all classes are being taxed too heavily, whether direct or indirect, and as I have opposed the Budget of the Government, whether I agree with reduction of the Tea duty or any other duty, I will oppose every duty, as I consider the Government is taking too much money out of the pockets of both the direct and the indirect taxpayer.

I desire to say a word or two in support of the Amendment, and I wish to refer to an observation of the hon. Member for East Nottingham (Sir J. D. Rees) to the effect that we have heard the same speeches every year for a considerable period. I can only hope that he will continue to hear those speeches for a considerable length of time, or until some concession is made in the direction indicated by the Amendment. Those of us who sit on these Benches are consistently opposed to indirect taxation of any kind, and we believe that the sound principle of taxation is that every individual ought to know exactly how much he is taxed, while it would also be of advantage if he could know what he is being taxed for. In connection with this particular commodity, there is no equity in the arrangement, and it violates the principle of taxation according to ability to pay. A family of five people taken from the working-class population will consume in a year's time a considerably greater quantity of tea than any family in a higher station of life will consume, and so many poor people being forced upon a tea diet, consequently the contribution which they make through their tea bill every year is out of all proportion to that made by other sections of the community, who consume less of that article. Further, it is inequitable from the point of view that every pound of tea is taxed alike; whether it is of poor quality or of the highest quality, the contribution per pound of tea is the same, and that of itself gives weight to the suggestion that it does not operate equitably in all classes of society, but that the poor are penalised all along the line. I was interested in the observation that was made by the hon. Member for East Nottingham when he said that the producers of tea were anxious that the commodity should get upon the market at the lowest possible price. The whole of the operations of the tea companies suggest that the exact opposite would be the facts of the case.

Is the hon. Member aware that tea has been sold for a long time past at from 30 to 40 per cent. below the cost of production?

I am aware of the fact that some time ago the various tea companies in the country performed an operation with the direct intention of keeping up the price of the commodity on the market. I read in one of the ordinary business papers, a very reliable journal, that towards the end of last year the tea companies of the country found themselves with a stock of tea on hand amounting to 200,000,000 lb. weight, and, making comparisons with previous years, they found that under normal conditions they should only have had 95,000,000 lb. weight—I think those were the figures—so they took counsel together and decided that steps should be taken, not to permit the ordinary law of supply and demand to operate, and that tea should come on to the market at a reduced figure, but they endeavoured to counteract that effect as far as possible by agreeing to restrict the production of tea during the ensuing 12 months.

In respect of the £17,000,000 that this Tea Tax raises and the complaints that we hear as to where this £17,000,000 has got to be found and the fear lest it should move in the direction of those people who are paying direct taxation through Income Tax and Super-tax at the present time, that money could be collected in various other directions. Economies in expenditure, for instance, could be made which would more than counterbalance the loss of the tea duty, and I think a reduction in expenditure could be made in avenues where the country would benefit which would more than counterbalance the £17,000,000 wanted from the tea duty. We could turn to various phases of military activity where money at the present time is being worse than wasted to ensure the necessary economy which would more than cover this £17,000,000. In the Budget statement last week we were informed that the taxes which had been put on sparkling wines and costly cigars were going to be reduced, and in fact are being reduced, and in one instance abolished, while this tax on tea is continued, which imposes 1s. per lb. weight on the poorest of the poor. The old-age pensioners are getting an extra half-crown a week, but the money is got back again by this tax on tea, and it also falls very unfairly on the discharged soldier, when it could easily be secured elsewhere. I hope these speeches will continue to be heard year after year until some recognition and concession is made on this particular matter.

I entirely agree with the hon. Member who has just spoken that this £17,000,000, and a good deal more, might be saved by restriction in expenditure, but I am afraid that that is the extent of my agreement with him. What is his argument? He says in effect, "What is the use of imposing this large duty on tea and at the same time reducing the taxes on luxuries like sparkling wines and cigars?" In reference to the speech which fell from the right hon. Member for Derby (Mr. Thomas) last week, I ventured to point out that there was a very simple and a very good reason for diminishing the taxes on sparkling wines and on imported cigars, and the reason was that those taxes did not produce a revenue. After all, the object of taxation is revenue, and when you discover that a particular tax is not attaining its object, the best thing you can do is to get rid of it, and to see if you cannot get a revenue in another way. The reason, as everyone knows, why you tax the necessaries of life rather than the luxuries of the few is, to use an old theatrical simile, "It is the pit that pays." That is one point. In regard to the other point made by the hon. Gentleman opposite, if there is to be a reduction of taxation—and I should very cordially welcome it—I venture to suggest that it is not in the direction of indirect taxes that you ought to look for it.

My hon. Friend the Member for Greenock (Sir G. Collins), I think, perhaps a little startled the House by the figures which he produced with regard to the proportions of to-day between direct and indirect taxation. He told us—and I do not dispute the basis of his computation—that in the current year direct taxes were to produce £512,000,000 and indirect taxes £323,000,000, a comparison, as he rightly said, of 61 per cent. as compared with 39 per cent. The only point I have to make in relation to that is that I think my hon. Friend did not carry his researches quite sufficiently far back. He was taking the figures only immediately before and since the War. I hold in my hand a very interesting Return, which was obtained by the present Secretary of State for the Colonies some years ago, from the Treasury, I think, on the history of the proportions of direct and indirect taxation. If you go back to the time of Sir Robert Peel, you will discover that at that time direct taxation only paid 27 per cent.—I am speaking of the year 1841—and indirect taxation 73 per cent. of our total revenue. Ten years later the proportions were: Direct taxation, 33 per cent.; indirect taxation, 67 per cent. Ten years later again, in 1861, the proportions were 38 and 62. Ten years afterwards, in 1871, they were 39 and 61, that is to say, a precise reversal of the figures which have just been given to us by my hon. Friend.

And so it goes on. It is a continuous series down to the close of the last century. That was the time when a very old friend of mine, who was then Sir Michael Hicks-Beach was responsible for the finances of this country, and I very well remember Sir Michael Hicks-Beach saying that the thing to be aimed at was equilibrium as near as possible between direct and indirect taxation. That equilibrium we did actually attain, as nearly as possible, in the year 1904–5. In that year the amount raised by direct taxation was 49·5 per cent., and by indirect taxation 50·5 per cent. In that year we reached equilibrium. Since that time we have been moving more and more rapidly in the other direction, until, in the year 1915–16, indirect taxes were producing only 35·4 per cent. of our revenue, and in the following year, 1916–17, were producing only 28 per cent. I admit that since that time there has been some small rectification of the balance, but I submit that this is a moment when it is neither in the interests of the revenue, with which, after all, we are primarily concerned as Members of this House, nor is it equitable to the taxpayer to add to the burdens on direct as opposed to indirect taxation.

I do not suppose the hon. and gallant Member who moved this reduction or those who supported it will be at all surprised to hear that the Government are unable to accept it. Indeed, I think that not only will a feeling of surprise be absent from their minds, but I can hardly contemplate how the possible loss of so old and well-tried an annual topic from this Debate might be regarded. Of course, it is a question which raises the whole structure of the Budget. But let me deal, in the first place, with what I would venture to think is the only new argument which has been advanced in favour of the reduction or repeal of the Tea Duty on this occasion. It is the argument ad- vanced that a great diminution of the proportion of taxation imposed by the direct method is being made this year in the abolition of the Excess Profits Duty, and that something ought to be done to retain the balance. I would urge that that argument is, indeed, wholly misconceived. The Excess Profits Duty was never intended, and has never been looked upon by anybody, as part of the regular and normal structure of the revenue system of the country. The disturbance that it introduces into the relative percentage of direct and indirect taxation must be universally recognised to be a temporary disturbance, and the restitution of the percentage of direct and indirect more near to the old standard was to be looked upon as merely a return to the more normal state of affairs. Various quotations of figures have been given in the course of this short discussion as to the actual percentage of charge now by direct and indirect methods and as to its changes. The figures given have not been wholly accurate; in some cases, they have been distinctly misleading. Let me, therefore, give to the House what the actual figures are of the present percentage of taxation proposed by the direct and the indirect method, and its change in two years. For the current year, excluding Excess Profits Duty, the percentage of direct taxation is 62·3, and the percentage of indirect 37·7. The statement made in the course of the Debate that that is a fall in the percentage of direct taxation since last year, excluding Excess Profits Duty, is not correct. Last year the percentage of direct taxation, excluding Excess Profits duty, was 59·6, or rather less than 3 per cent. less than this year.

I discussed that matter before the hon. and gallant Gentleman entered the House. The point emerging from that, regarding the permanent and regular taxation system of the country, is that the effect of the proposals for the current year is to increase, and not decrease, the proportion of taxation that is cast upon the direct taxpayer. The proposition that has been advanced that there has been a fall in the proportion borne by the direct taxpayer since before the War, or that it remains stationary, is also not, as a matter of fact, correct according to the exact figures. There has been a substantial rise in the proportion of direct taxation since before the War. In the year 1913–14 the proportion borne by the direct taxpayer was only 57·5, in comparison with the figure which I have given, 62·3, for the current year. If you regard the actual figures themselves, and not those rather vague and more misleading impressions which one derives from what one might call the atmosphere of finance, there is no case, on the figures, to argue that there has been any diminution of the burden upon the direct taxpayer, and there is no case to argue, at any rate, that there is any just claim for a proportionate reduction of the burdens borne by indirect taxation. Of course, what has to be practically regarded in dealing with a proposition of this sort, which would cost the Exchequer no less than £16,000,000, is, Where else would the money come from, supposing it were not to come from this? I have heard only one proposal, and that was the proposal of the hon. and gallant Member that we should take this money out of the surplus. Here let me hasten to correct an impression, which would be misleading, that the surplus for the current year is the figure which was quoted by the hon. and gallant Member of £242,000,000. That is not, of course, a correct figure. The surplus, as it was given by my right hon. Friend in opening the Budget, is a little less than £177,000,000, and I do not know from where the higher figure of £242,000,000 has been derived.

The balance-sheet does show a surplus of £84,000,000 on Ordinary Receipts and Expenditure, and of £92,000,000 on Special Receipts and Expenditure. My addition was wrong.

5.0 P.M.

I think it is necessary to correct the figure. We ought to be perfectly clear what the figure is. I think it is needless for me to repeat what was said by my right hon. Friend in his opening speech, as regards the claims upon this surplus. There are claims in regard to all those outstanding, un-assessable liabilities in respect of the strike, and there has to be considered the present condition of affairs, especially in the industrial world. There are losses of revenue, extra expenses of government, and, above all, extra liabilities in respect of the railways. Those are in respect of the ordinary expenditure of the year, and, again, the House will remember what was advanced by my right hon. Friend as regards contingent claims in respect of extraordinary expenditure. The principal item is the very large and unascertained liability in respect of the final settlement with the railways. It is, of course, never contended by anybody that in any ideal scheme of taxation any indirect taxation is ideal. I refrain from entering the exceedingly attractive region of the economic discussion opened up by the hon. Member for Central Edinburgh. I would only venture from that theoretical region to indicate in the shortest possible phrases what is the very practical ground for supporting these indirect taxes at the present time. You can make a case against any tax by cutting it out of the revenue body of which it is part and considering it by itself. To get a true view of the equity and practical desirability of such a tax as this, you must look upon it as a member of a body, as a part of a revenue organization which consists of two branches. The first branch is direct taxation, which, in the very broadest and widest sense of the words—and words which are only very approximately true—may be said to be that part of the machine which exacts a contribution from the better-to-do person, and which, in the second part consists of the branch of in direct taxation which—again in the broadest and widest sense of the words, with many reservations—may be said to take a contribution, whatever it may be, from the classes that are less well-to-do. You cannot disturb one part of that system without disturbing the whole. Put it in the form of a pictorial illustration: if you take the weight off one side of the balance the other side will fall, and you upset the whole thing.

Before the War, during a long period of years, we had reached a settled state as regards the balance between direct and indirect taxation. Our aim should be to seek to recover that practical balance which we had then obtained. If the House has followed the figures presented by me they will see that our path in respect to this balance between direct and indirect taxation which existed before the War certainly does not lie in the direction of taking further burdens off indirect and putting them on to direct taxation. There is just one other point I would venture to throw out for the serious consideration of any hon. Member on those Benches who desire to argue this matter in the future. Before raising this question of indirect taxation for the purposes which they seek to raise it, and which they are pursuing, will they consider the great change that has taken place since before the War in the closeness of the link between three things—taxation, cost of living, and wages? That is too wide a subject for me to argue now. I would only make the suggestion that if that link is so much closer now than it used to be it does require very careful consideration by the advocates of those classes whose interests certain hon. Members are advocating before they seek to carry out such a measure as proposed in this Amendment.

Finally, on this question—this old and time-honoured question of the Tea Duty—whatever theoretical arguments there may be, it is universally recognised, I believe, by everybody, in consideration of taxation from the practical point of view, that a new tax is a bad tax and an old tax is a good tax. Whatever may be the theoretical incidence of the tax, one which has existed over a long period of time has generally settled down in its burden on different classes. Gradually it gets shifted in its incidence into an equitable adjustment between the various parts of the community, and thus has become a fair and safe adjustment as between all parties. Take it off, and you lose the benefit of that long settlement. Start with a new tax, and, though it may theoretically be more ideal, you may work very much more injustice at the time than with the old tax, with all its theoretical imperfections. I would only repeat what was said by my right hon. Friend in opening the Budget as to looking ahead to next year, and to say that all the revenue that we have this year must needs be required in order to arrive at a safe situation in the coming year, 1922–23. There must, too, be a drastic reduction in expenditure. The time for the sacrifice of revenue will be when these reductions have been made, and not at present before they have been made.

The hon. Gentleman opposite has just invited us to a discussion on economics, suggested by one or two phrases and in some arguments which, I suppose, if he had followed up, would have demolished our case! He adjured us to be very careful as to what he called the closeness of the link between taxation, the cost of living, and wages, before we embarked upon a proposal such as we are supporting this afternoon to reduce the duty on tea. It is, however, just because we recognise the closeness of that link and because we recognise that taxation, and particularly indirect taxation, is so large a proportion of the cost of living, and that both of these must come out of wages, that we are concerned that the wages, particularly the falling wages, of the working-classes should not be overburdened by an unfair share of the indirect taxation of this country. I should only have been too glad, if the hon. Gentleman had cared to develop that argument, to have followed him in debate and to have pointed out however close the link may be in his mind, the chain is a very weak one. My hon. Friend, in replying to the discussion which has taken place on this Vote and on this Motion for a reduction, blandly asserted that there had been only one new argument that required an answer. It had, he said, been alleged that there had been a great reduction in the amount of direct taxation as compared with indirect taxation. From that he went on to point out, particularly in regard to the Excess Profits Duty, that that was an abnormal tax, one imposed for the purposes of the War, and therefore that it was really beside the mark for those who supported a reduction to argue from the example of the Excess Profits Duty.

I would, however, remind my hon. Friend when he puts 7d. extra in the £ on the tea duty it is also an abnormal war tax. Throughout the operation of the War; from Budget to Budget, the Government tried, presumably their best, to equalise as far as possible the burden of the War. They imposed, amongst other things, from 1914 until now, an additional 7d. in the £ on tea as well as imposing the Excess Profits Duty. But there is some considerable difference in the habits of people who drink tea and those who pay Excess Profits Duty. My hon. Friend will himself be the first to admit that the most skilful body of men in this country at evading the taxes were those who were called upon to pay Excess Profits Duty; that the Government never collected the whole of that money; and indeed that they allowed those who ought to have paid that money to use it for other purposes; and that many firms who ought to have contributed to war taxation in Excess Profits Duty to relieve the ordinary taxpayer, not only did not do so, but used the money to improve their own profits and assets all the time the Excess Profits Duty was in operation; whereas the people who drank tea at the increased cost of 7d. per lb. were unable to effect any such evasion of the tax, and, therefore, the former people throughout the period of the War years bore less share of the burden of the War than was borne by way of the imposition of that 7d. extra duty.

Oh, no! There are a great many people who never touch it. What I say is, so far as the habit of tea drinking is concerned, the hon. Gentleman who has interrupted knows perfectly well that the higher you rise in the social grades of the people of this country the less tea per head is consumed. The greatest amount of tea is consumed in the lower strata of the people of this country, the people who live under the worst conditions, and who earn the lowest wages. These people ought to have better food to keep them in a better physical condition, and they more and more drink tea as the only stimulant they can afford. I think that if my hon. Friend who interrupted gives that a moment's reflection he will appreciate the argument that I have been using—that the people who had to pay 7d. extra in taxes on their tea during the War at any rate bore their share of the burden equally with the rest.

The question of the percentage of direct and indirect taxation was dealt with by the hon. Gentleman the Financial Secretary. I am not sure that the figures he gave were any more illuminating than the figures that had been given previously in the discussion. Figures were given by one hon. Member to the effect that direct taxation was 61 per cent. and indirect 39 per cent. My hon. Friend opposite changed this and made the figures 62 per cent. and 37 per cent. odd. So far as we are concerned in this Committee, the figures are obviously 60 per cent. direct and 40 per cent. indirect. That is a rough division of direct and indirect taxation. It may be quite true that at the moment the proportion between direct and indirect taxation is as stated, but as a matter of fact that does not represent the whole case. The class of person who pays direct taxation—and that is an argument which must be considered in connection with this particular Budget—the people who contribute to the 60 per cent. of direct taxation draw £300,000,000 out of the taxpayers of this country in interest on the War Loan which they hold. I am not throwing this at anybody. Nobody is so well off that he can afford to throw even a bone to a dog. My point is that the taxpayer of this country, who has to find this £300,000,000, also finds a great part of the proportion of the 40 per cent. The people who pay 60 per cent. direct taxation receive from the other section of taxpayers this £300,000,000 that they draw in interest on the War Loan. Another argument to be borne in mind is that the Government have given away the Excess Profits Duty. If you look at the figures submitted to the House you will find that as a result the produce of Income Tax this year is more than it was last year, as we might easily expect. That means that although we are getting some of that increase because of the relief from Excess Profits Duty we are losing what was left of Excess Profits Duty, which is being taken off the richest class in the community, the class ablest to bear the burden of the debt.

We are surprised that the Government make no response to the appeal which has been made to them, and what I am more surprised at is that hon. Gentlemen like the Financial Secretary to the Treasury fall back on the old defences, the threadbare, threadworn defences made in this House so often in connection with the question of Direct versus Indirect Taxation. We have had the old essays about the difference between good and bad taxes, and about the connection between taxation, cost of living and wages. Let me put a concrete suggestion to my hon. Friend. Will he agree to take the 7d. abnormal War Duty off tea just as he has taken off the Excess Profits Duty? Both were put on for abnormal purposes during the War. If he will undertake to drop the 7d. duty on tea, we will agree not to go to a Division. I suppose it does not matter whether we go to a Division or not. If we do we shall be beaten, but then we are accustomed to be beaten. Hon. Members who sit in other parts of the House have had their share of being beaten in discussions here, but by the assistance of Providence we may before long be in a position to sit on the other side listening to those hon. Members submitting from this side of the House the same kind of arguments as those I am putting forward at the moment. That is one of the vicissitudes of the fortunes of public life in this country. Still the fight we are putting up will ultimately win. It is bound to win. You cannot have indirect taxation which has been imposed abnormally during the War continued after the War. When the abnormal burdens imposed during the War on the richer classes of the community are taken off, it is not possible to take them off one class first without raising a protest from other classes. Had my hon. Friend taken the same course with regard to both classes at the same time, there might have been some reason in his action, but there is no reason under the circumstances why this abnormal tax on tea should be retained.

It is unsound to continue it at the present moment, when there is such a large number of unemployed in this country. There are, I believe, some 2,000,000 of people now out of work. I cannot remember what is the amount of unemployed pay granted through the Labour Exchanges, but I believe it ranges from £1,000,000 to £2,000,000 per week. At any rate it is well over £1,000,000 per week at the present moment, and that represents more than £52,000,000 per year. The product of a penny tax on tea is something like £1,500,000. These figures, I believe, are approximately correct, and if they are, what the Government is doing at the present moment is spending on unemployed pay at the rate of £52,000,000 a year and securing from the same classes contributions to the revenue of £17,000,000 derived from taxation on tea. That is not economically sound. I would remind my hon. Friend of the closeness of the link between taxation, cost of living and wages. We have been accused on this side of not putting forward constructive proposals. I am prepared to offer advice in this direction free of charge. The Government have set up a scheme and, indeed, in connection with it they have passed an Act of Parliament by which they are going to obtain £20,000,000 in reparations from Germany. That is £3,000,000 more than the Tea Duty produces. We are told we are sure of getting that money; indeed so certain are they that the Government insisted when they brought in a Bill to enable them to get it on taking all the different stages of the measure at one time so as to secure its quick passing into law. To-day at question time we were told that we could not wait on Belgium, but must get the money at once. In any case we are going to get this £20,000,000 from Germany. Why not give that money to the poorer people of this country? You have already taken it from them in the shape of your 7d. extra duty on tea during the War. I do not think the arguments which have been advanced on behalf of the Government are sound. It is of course much easier to keep taxes on people who make the least fuss and to take the taxes off those who sit behind them and who have benefited so excessively by excess profits during the War.

My hon. Friend, the Member for East Edinburgh (Mr. Hogge) has dealt so thoroughly with the statement of the Financial Secretary to the Treasury that, there is not much left for me to say. I was impressed by the interest shown in this matter by the hon. Member for East Nottingham (Sir J. D. Rees); it is explained by his interest as a tea merchant.

I did not say I was a tea merchant; I said I was interested in the production of tea.

If one class would benefit more than another by the reduction of this duty it is the middle class. No doubt it is somewhat difficult to define who are the middle classes, but undoubtedly people in this category must be looked at from an economic point of view, it all depends on the amount of riches they possess. The whole world has got topsy turvy in the last few years. The middle classes are very differently constituted to-day, and now on the top we find the War profiteers. It is those with fixed incomes who would most gladly welcome this relief, and there is no class in the country which would benefit more from the reduction of the duty on tea than the middle classes, and in referring to those classes I am alluding, not so much to the civil servants, as to a great many other people whose incomes are restricted. It has been suggested by one hon. Member that the only object of taxation is to produce revenue. We occasionally have in this House references to the fiscal policy of the late Mr. Gladstone, but I would like to point out that Mr. Gladstone never put forward the idea that the only object that a Chancellor of the Exchequer should have in view in his Budget is the raising of revenue. He should also have an eye on its effect on the comfort of the people of the country and on their social conditions. I submit that these are objects which we should always keep in view when imposing or retaining a tax. This is a time when this House should do everything it possibly can to relieve the family budget and to lighten the

burdens of the people. As has been suggested by my hon. Friend the Member for East Edinburgh, the balance as between direct and indirect taxation has already been disturbed. The Financial Secretary warned the House that his Budget was of such a delicate character that if you disturbed one part the whole thing would be upset. It has already been upset by the withdrawal of the Excess Profits Duty. If you withdraw that duty, which was put on for War purposes, then the extra tax on tea, which was also put on for the same purpose, ought to be withdrawn in order to maintain the equilibrium. For these reasons I shall support this Amendment.

Question put, "That the words proposed to be left out stand part of the said Resolution."

The House divided: Ayes, 188; Noes, 32.

Division No. 88.]

AYES.

[5.35 p.m.

Adair, Rear-Admiral Thomas B. S.

Edgar, Clifford B.

Lowe, Sir Francis William

Agg-Gardner, Sir James Tynte

Falle, Major Sir Bertram G.

Lowther, Major C. (Cumberland, N.)

Ainsworth, Captain Charles

Farquharson, Major A. C.

Lyle, C. E. Leonard

Allen, Lieut.-Colonel William James

Fell, Sir Arthur

M'Donald, Dr. Bouverie F. P.

Baird, Sir John Lawrence

Flannery, Sir James Fortescue

Macdonald, Rt. Hon. John Murray

Baldwin, Rt. Hon. Stanley

Foxcroft, Captain Charles Talbot

Mackinder, Sir H. J. (Camlachie)

Balfour, George (Hampstead)

Fremantle, Lieut.-Colonel Francis E.

M'Lean, Lieut.-Col. Charles W. W.

Banner, Sir John S. Harmood-

Ganzonl, Captain Sir F. J. C.

McMicking, Major Gilbert

Barnett, Major R. W.

Gibbs, Colonel George Abraham

Magnus, Sir Philip

Barnston, Major Harry

Gilmour, Lieut.-Colonel Sir John

Malone, Major P. B. (Tottenham, S.)

Beauchamp, Sir Edward

Grant, James A.

Manville, Edward

Beckett, Hon. Gervase

Green, Joseph F. (Leicester, W.)

Marriott, John Arthur Ransome

Bell, Lieut.-Col. W. C. H. (Devizes)

Greig, Colonel James William

Mitchell, William Lane

Betterton, Henry B.

Guinness, Lieut.-Col. Hon. W. E.

Molson, Major John Elsdale

Birchall, Major J. Dearman

Hall, Rr-Adml Sir W. (LIv'p'I, W. D'by)

Moreing, Captain Algernon H.

Bird, Sir A. (Wolverhampton, West)

Hambro, Captain Angus Valdemar

Morison, Rt. Hon. Thomas Brash

Bird, Sir William B. M. (Chichester)

Hamilton, Major C. G. C.

Munro, Rt. Hon. Robert

Blair, Sir Reginald

Hannon, Patrick Joseph Henry

Murray, Lieut.-Colonel A. (Aberdeen)

Blake, Sir Francis Douglas

Hanson, Sir Charles Augustin

Murray, John (Leeds, West)

Boscawen. Rt. Hon. Sir A. Griffith-

Harmsworth, C. B. (Bedford, Luton)

Neal, Arthur

Bowles, Colonel H. F.

Harmsworth, Hon. E. C. (Kent)

Newman, Colonel J. R. P. (Finchley)

Bowyer, Captain G. E. W.

Henry, Denis S. (Londonderry, S.)

Nicholson, William G. (Petersfield)

Breese, Major Charles E.

Hewart, Rt. Hon. Sir Gordon

Nield, Sir Herbert

Brittain, Sir Harry

Hilder, Lieut.-Colonel Frank

Palmer, Major Godfrey Mark

Buckley, Lieut.-Colonel A.

Hills, Major John Waller

Palmer, Brigadier-General G. L.

Burn, Col. C. R. (Devon, Torquay)

Hinds, John

Parry, Lieut.-Colonel Thomas Henry

Butcher, Sir John George

Hoare, Lieut.-Colonel Sir S. J. G.

Pearce, Sir William

Campbell, J. D. G.

Hohler, Gerald Fitzroy

Pease, Rt. Hon. Herbert Pike

Carson, Rt. Hon. Sir Edward H.

Holbrook, Sir Arthur Richard

Pilditch, Sir Philip

Casey, T. W.

Hood, Joseph

Pinkham, Lieut.-Colonel Charles

Cautley, Henry S.

Hope, Sir H.(Stirling & Cl'ckm'nn'n,W.)

Pownall, Lieut.-Colonel Assheton

Cecil, Rt. Hon. Evelyn (Birm., Aston)

Hope, J. D. (Berwick & Haddington)

Pratt, John William

Chamberlain, N. (Birm., Ladywood)

Hopkins, John W. W.

Prescott, Major W. H.

Cheyne, Sir William Watson

Hopkinson, A. (Lancaster, Mossley)

Purchase, H. G.

Coats, Sir Stuart

Home, Edgar (Surrey, Guildford)

Randies, Sir John S.

Cockerill, Brigadier-General G. K.

Home, Sir R. S. (Glasgow, Hillhead)

Raper, A. Baldwin

Colvin, Brig.-General Richard Beale

Hunter, General Sir A. (Lancaster)

Raw, Lieutenant-Colonel N.

Coote, Colin Reith (Isle of Ely)

Hurst, Lieut.-Colonel Gerald B.

Rees, Sir J. D. (Nottingham, East)

Craig, Captain C. C. (Antrim, South)

Inskip, Thomas Walker H.

Rees, Capt. J. Tudor-(Barnstaple)

Croft, Lieut.-Colonel Henry Page

Jackson, Lieut.-Colonel Hon F. S.

Remnant, Sir James

Curzon, Captain Viscount

James, Lieut.-Colonel Hon. Cuthbert

Richardson, Alexander (Gravesend)

Dalziel, Sir D. (Lambeth, Brixton)

Jameson, J. Gordon

Roberts, Samuel (Hereford, Hereford)

Davidson, J. C. C. (Hemel Hempstead)

Jesson, C.

Roundell, Colonel R. F.

Davidson, Major-General Sir J. H.

Jodrell, Neville Paul

Rutherford, Sir W. W. (Edge Hill)

Davison, Sir W. H. (Kensington, S.)

Jones, Sir Evan (Pembroke)

Samuel, A. M. (Surrey, Farnham)

Denison-Pender, John C.

Jones, J. T. (Carmarthen, Llanelly)

Samuel, Rt. Hon. Sir H. (Norwood)

Denniss, Edmund R. B. (Oldham)

King, Captain Henry Douglas

Sanders, Colonel Sir Robert A.

Dockrell, Sir Maurice

Lewis, Rt. Hon. J. H. (Univ., Wales)

Scott, A. M. (Glasgow, Bridgeton)

Doyle, N. G rattan

Lonsdale, James Rolston

Seddon, J. A.

Du Pre, Colonel William Baring

Loseby, Captain C. E.

Shaw, William T. (Forfar)

Shortt, Rt. Hon. E. (N'castle-on-T.)

Terrell, George (Wilts, Chippenham)

Wilson, Capt. A. S. (Holderness)

Simm, M. T.

Thomson, F. C. (Aberdeen, South)

Wilson, Daniel M. (Down, West)

Smith, Sir Allan M. (Croydon, South)

Thorpe, Captain John Henry

Wilson-Fox, Henry

Smithers, Sir Alfred W.

Townley, Maximilian G.

Wise, Frederick

Sprot, Colonel Sir Alexander

Wallace, J.

Wood, Sir H. K. (Woolwich, West)

Stanier, Captain Sir Beville

Walters, Rt. Hon. Sir John Tudor

Woolcock, William James U.

Stanley, Major Hon. G. (Preston)

Ward, Col. J. (Stoke-upon-Trent)

Yate, Colonel Sir Charles Edward

Stephenson, Lieut.-Colonel H. K.

Warren, Lieut.-Col. Sir Alfred H.

Young, Lieut.-Com. E. H. (Norwich)

Stewart, Gershom

White, Lieut.-Col. G. D. (Southport)

Young, W. (Perth & Kinross, Perth)

Strauss, Edward Anthony

Whitla, Sir William

Younger, Sir George

Sugden, W. H.

Williams, Lt.-Com. C. (Tavistock)

Surtees, Brigadier-General H. C.

Williams, Lt.-Col. Sir R. (Banbury)

TELLERS FOR THE AYES.—

Sutherland, Sir William

Williamson, Rt. Hon. Sir Archibald

Colonel Leslie Wilson and Mr. Parker.

Taylor, J.

Wills, Lieut.-Colonel Sir Gilbert

NOES.

Barnes, Rt. Hon. G. (Glas., Gorbals)

Herbert, Hon. A. (Somerset, Yeovil)

Redmond, Captain William Archer

Cairns, John

Hogge, James Myles

Rose, Frank H.

Edwards, G. (Norfolk, South)

Holmes, J. Stanley

Royce, William Stapleton

Edwards, Major J. (Aberavon)

Irving, Dan

Thorne, G. R. (Wolverhampton, E.)

Galbraith, Samuel

Johnstone, Joseph

Thorne, W. (West Ham, Plaistow)

Glanville, Harold James

Kennedy, Thomas

Waterson, A. E.

Goff, Sir R. Park

Kenworthy, Lieut.-Commander J. M.

White, Charles F. (Derby, Western)

Graham, W. (Edinburgh, Central)

Kenyon, Barnet

Wood, Major M. M. (Aberdeen, C.)

Gritten, W. G. Howard

Kiley, James D.

Grundy, T. W.

Myers, Thomas

TELLERS FOR THE NOES.—

Hayward, Major Evan

Newbould, Alfred Ernest

Major Barnes and Dr. Murray.

Henderson, Rt. Hon. A. (Widnes)

Raffan, Peter Wilson

I beg to move, in the Table, to leave out the words "New Import Duties—12–1st May, 1922."

These are the new Import Duties, which are better known as the McKenna duties, which were levied for the first time in 1915 for War purposes. If there is one thing certain, I think it is that the House is determined to get rid at any cost of what is known as War legislation. These duties were imposed for War purposes in order to prevent the importation of articles which were regarded at that time as luxuries, and they include motor cars, watches, clocks, musical instruments and cinema films. These are the articles upon which are now levied a 33 per cent. ad valorem duty, and I will proceed to describe the effect of those duties. I have been looking up an account of the watches and clocks imported during last year, and I find the total importation amounts to £1,000,000 of watches and clocks, nearly all of which are of a cheap character. They consist mostly of the cheap metal watches mostly worn by boys, to which we were accustomed in pre-War days, and the cheap alarm clocks which are necessary in every workman s home.

We have just been discussing some of the effects of indirect taxation upon the wages of working people, and the result that has accrued from that indirect taxation on the additional amount of wages which would be forthcoming under other circumstances. The indirect and increased taxation have not alone been limited to articles of food, but they have been extended to many other articles, as, for instance, alarm clocks, which are a sheer necessity in a workman's family, because they must rise at a very early hour. That has had the effect of adding very considerably to the cost of those commodities. What makes it worse is that this tax has not been confined to the manufactured articles, but has also been extended to the component parts. Last year the taxation of the importation of watch and clock parts amounted to something like £800,000. Those who have had to pay higher prices for repairs to those articles will now know that to the extent of 50 per cent. they are paying an increased duty.

There are also other aspects of the case. Formerly there was a large trade in re-exports in these articles, and London was recognised as the market for these goods to America, Japan, India, South Africa, and the British Dominions, and that trade has been very seriously interrupted. I can assure the House that it has gone down to nearly two-thirds of the pre-War figure. It has had this effect, that the son who wanted to buy a cheap watch has had to pay a tax upon it, and his father who desired to buy a gold watch has not had to pay a tax. The duties are only levied on the cheaper articles. Gold watches are mostly made in this country, but cheap metal ones are imported, and therefore the cheap article has to bear the tax, whereas a person who can afford to buy a gold watch escapes altogether. Apart from the point of view of the consumer, the hindrance to the manufacturer must be considered. In the case of articles like clocks and watches, 50 per cent. of the total imports represent component parts, and therefore it must be a serious hindrance to our manufacturers that, when they want these parts, they have to pay a substantial duty. That causes an interference with our re-export trade. For these various reasons, these taxes, which were imposed for war purposes, should be removed, so that our industries may again get on to a self-supporting, independent basis.

It is also interesting to study the effect of this tax upon musical instruments. The value of last year's imports of completed musical instruments was something like £700,000. The total value of the imports of component parts was practically the same figure, and that is a very serious drawback to our manufacturers who want these parts for manufacturing purposes. I may mention that, in the case of most of the gramophones manufactured in this country, the clockwork, or motor, as it is called, has to be imported. We manufacture the cases and other accessories, such as needles and discs, but the clockwork part, to the extent of 70 per cent. or 80 per cent. of the total used, is imported, and the manufacturer of these articles to-day finds himself compelled to pay, not only this 33⅓ per cent., but all the other expenses contingent upon that. I will give an instance which shows the necessity of dealing promptly with the removal of obstacles to the development of business of this kind. In 1913 we were able to export from this country 1,380 pianos and organs of foreign manufacture which had been brought into this country. During the year 1920—in consequence, I suggest, of these taxes, and the difficulty of importing—that trade had dropped from 1,380 to 108. It is small wonder, therefore, that we have so many ships lying up, and that there are thousands of dockers in my constituency who are out of work. That is one of the factors in connection with the depression in trade from which we are now suffering.

Then, again, during the year 1920 our imports of motor cars were very large—far in excess of those of any previous year—and they were mostly sold at a low price. In 1919 and the early part of 1920 it was practically impossible to get a low-priced motor car in this country. That led to an immense importation of cheap American cars, on which a large duty has been paid, so that the figures for last year were much in excess of those for any other period. There, again, a very substantial part of the total value represents component parts, and these include an immense variety of commodities. For instance, if an importer of glass imports any glass with a reflecting substance at the back, he has to fill up a declaration stating how much of it is intended for use in motor lamps. Indeed, the House will probably be surprised to know the ramifications of these taxes. If a furniture dealer imports castors, he must also fill up a declaration showing how many, if any, of those articles are to be used by piano manufacturers in this country; and I could give many other instances. The House, probably, will assume naturally that a motor part is some part of a motor, little dreaming that it extends to the wares of the glass dealer or the furniture dealer. Those are ramifications which are all hindering and hampering the trade of this country. During the War we expected to find hindrances, but, now that the War is finished, it is essential that our industries should get re-established at the earliest possible date. I ask the House to remove one of the many obstacles in the way of this, namely, these duties. Apart from manufacturing difficulties, the importer has great difficulties in getting these goods admitted. An invoice was shown to me the other day from a receiving agent. It was a bill for clearing cases, and the first item was Is it to be wondered at that commodities are costing more than they did in pre-War days? It is really desirable that these War-time measures and restrictions and duties should be removed. I know I shall be met by the Financial Secretary with the statement that, whatever the difficulties are to the consumer, the trader, or the manufacturer, at all events we are getting some revenue. That is true, and last year, perhaps, owing to the increased cost of these articles, the Treasury got a larger amount than they did before, but the effect that it has had in interfering with trade far outweighs, in my judgment, any advantages that can be derived from it. If the Financial Secretary still maintains, as his predecessors have done, that these are articles of luxury, and, therefore, can afford to pay a duty, I would suggest that he might go a little further afield. Why not drop these taxes, which must be injurious to many people, and turn his attention, say, to diamonds and pearls, from which he could get as much duty as from all these other articles put together? As a free-trader, I believe in free trade absolutely, and, therefore, I am not an advocate of a tax even on diamonds and pearls; but hon. Members on this side have been reproached for not giving suggestions, and, therefore, I offer the hon. Gentleman this one. I am sure that, if it is only revenue about) which he is concerned, this is a method by which he can get it without interfering, as far as I am aware, with any manufacturing or trading interest, while, as far as the consumer is concerned, I suggest that, if revenue is to be obtained, it should be obtained, not from cheap commodities such as those to which I have referred, but from more expensive articles, the users of which can better afford to pay.

I beg to second the Amendment. I will say no more, acting on the wise maxim, "Silence, when no speech need be made, is eloquent discussion."

I trust that I shall be able to follow the maxim which has just been laid down by the hon. Member (Mr. Galbraith). Without going into the wider field traversed by the mover of this Amendment, I would address myself very briefly to the question of antique musical instru- ments. The Financial Secretary may be able to make out, from his standpoint, a strong general case for the retention of these duties, but in regard to the specific instance of antique musical instruments I cannot conceive that there is any case at all. The first criterion by which a duty of this kind may be judged is whether or not it adds materially to the revenue, and I do not think that the hon. Gentleman will be in a position to say that the duty upon these antique musical instruments has brought anything whatsoever to the revenue. If, however, the duty be judged from the standpoint of protecting British manufactures, that is obviously absurd in the case of antiques.

I can assure my hon. and gallant Friend that these particular antiques of which I am speaking are genuine. I have a constituent who was a large importer of antique violins, mostly in the re-export trade. There are very few of these old violins purchased in this country and the trade entirely lies in re-export. This is what he says in a letter I have just received:

"Week after week we are confronted with difficulties which, with all the good will in the world, cause both us and the Customs officials trouble, vexation and loss of time without bringing any compensation to either party, still less to the Exchequer. In addition to this we have lost good business which would otherwise have been transacted in London. To cite one instance I may mention that within the last few weeks a valuable instrument offered for sale (ex Vienna) was sent to Amsterdam instead of to us on account of the duty which would otherwise have been imposed, the value of the instrument being assessed at £1,500, which means a loss of commission of 10 per cent. to us, in other words £150. Furthermore, I have to go to Paris within the next week or so, which means expense and loss of a good deal of valuable time, in order to transact business I am now unable to negotiate in this country in consequence of this duty."

The position into which these people are being driven is really that if the re-export trade in violins is to survive at all, they must establish a business on the Continent, and the benefit which would normally accrue to the Exchequer in this country in general taxation to the flow of trade through this country is entirely killed. Not a penny has accrued to the Exchequer during the last year on account of this duty. There is no con- ceivable object in protecting the trade. What is the object of this duty? Can the hon. and gallant Gentleman justify a duty which protects no one and is certainly not the subject of any additional revenue to the Crown? He has just, wisely, dropped a tax which was so oppressive in its incidence that it defeated its object—the taxation, on wine and cigars. This case is really analogous. The taxation is so heavy on this trade that it has killed it altogether and driven it outside this country. Under these circumstances, I trust the hon. and gallant Gentleman will be in a position to meet this trade, which under normal conditions would be a source of great wealth to the country and consequently in general taxation would benefit the Exchequer, and will see his way to omit the duty as far as instruments over 100 years in age are concerned. That is a course that has been followed by highly Protectionist countries such as America, and surely in this country, without a general system of protective tariffs, it would be possible to do away with a duty which neither benefits the Exchequer nor protects anyone.

The speech we have just heard recalls to mind an incident that occurred not so long ago with reference to dispute benefit in a trade union committee, and it was that that made me smile when the hon. Member suggested that a tax on antiques coming into this country could not possibly interfere with British manufactures. I remember once having to decide a question of a claim for dispute pay by antique furniture and musical instrument makers, and to my very great astonishment I found there was a considerable number of people employed in that industry, faking and making copies of antiques and, I suppose, palming them off on those who did not have sufficient technical knowledge to know new antiques from real ones.

It is quite clear that it interferes with the genuine article, because they must be rare if they are genuine, and it would seem absurd that those who trade in these special things, which may only present themselves one or two in a year, should have to go to foreign countries to make their arrangements because of the duty imposed upon them in this country. I think that is a case which might be considered. On the other hand to remove the duty entirely from antiques, or alleged antiques, might be an injury to a certain doubtful class of manufacturers.

This is the third time in this Parliament that we have been called upon to discuss, this question. But the Debate to-night has been conducted under somewhat different circumstances from those which have gone before in that the Vote is in charge of a Minister who, I understand, was elected to this House as a Free Trader and has been one of the protagonists of Free Trade during the years he has been in this House. Therefore I think we are entitled to ask him for an explanation as to how he is going to reconcile his own previous position with the advocacy of this duty. I understand these duties were first imposed for two specific reasons. First of all it was said a great number of luxury articles were being imported and it was advisable that people who expended their money on luxuries of that kind should be called upon to make a special contribution towards the carrying on of the War. In my opinion that was a good argument at the time. There was another which raised the whole question of freights and of ships, which was a very important question during the War. It was very difficult to get tonnage to carry the goods that had to be carried from overseas, and it was desirable, as far as we could, that we should put some restriction upon the imports of articles of all kinds, and particularly luxury articles from abroad. These were the two arguments that were put forward when the duty was introduced, and when it was desired to continue the duty after the election of the present Parliament. Of course, reasons of that kind put forward by the hon. and gallant Gentleman's predecessor were bound to make one think that he at any rate did not believe these were the only reasons, because we knew from past experience that he was a Protectionist, and I have no doubt, apart altogether from these two reasons that were given as the real reasons for imposing the duty, he believed they were right and proper. But the hon. and gallant Gentleman, I am sure, does not believe it is proper that these duties can be defended on the ground of their being Protectionist because he believes that they are bad. I should like him to explain whether he still considers that the two reasons that were given originally for the imposition of these taxes are good reasons for their continuance, and if he thinks these are the only reasons which can be put forward now for continuing them.

These duties, though it may not have been the intention, are really a discrimination between rich and poor, because they are all on manufactured articles of the cheaper kind which are bought and dealt with by the poorer section of the population. This does not to any extent interfere with the man who is going to buy an expensive gold watch. Rich people buy expensive watches, and they are not touched by this duty; but if the man who is going to buy a watch is poor, and therefore wants a cheap watch, he is affected very materially. It is the same with all the other classes of articles which are mentioned in this duty. It is the cheap things which come from overseas that this duty hits, and therefore it is the poorer section of the community that is affected by it. There is another reason why I think we might now let this duty slip. It seems to me that, whatever may be said by the hon. and gallant Gentleman, it was really continued by the present Parliament as a blow against Germany. At present it seems to me that this is quite unnecessary, because we passed a Reparations Act the other day, which has had the effect that we on this side predicted it would have of stopping all trade between Germany and this country, and, as far as Germany is concerned, at any rate, there is absolutely no need for any import duty of this kind. If Germany is out of the picture, a great number of hon. Members opposite, who set so much store by this duty, might be prepared to allow it to drop, because I do not think their hostility is directed to other countries besides Germany. I hope, however, we shall have a full explanation from the hon. and gallant Gentleman as to his particular position and the position of the supporters of the Government who view economic questions in the same light as he does as to how he is now going to continue to defend a duty which is undoubtedly Protectionist in its character, and, in my opinion, a breach of all the pledges he gave to his constituents when he was elected to this House.

My hon. Friend (Mr. Kiley) has a very intimate and detailed knowledge, as he showed us, of the injurious effects of these duties, and indeed if their history is considered it is not surprising that their effects should be harmful. These duties were imposed in 1916, not for the purpose of raising revenue in any sense whatever. They were imposd primarily for the purpose of saving tonnage and also in order to curtail expenditure in this country on certain articles of luxury. As it was subsequently found that the policy of imposing the duties did not succeed in keeping out these articles altogether, another policy was resorted to, namely, the prohibition of the imported article. That was done, and until after the Armistice the importation of these articles was entirely prohibited. Therefore it is quite clear that the question of revenue in the first instance had nothing whatever to do with the imposition of these duties. They were not framed for that purpose; the question was not considered with that in view, and now, subsequently, their existence is made use of and they are continued for revenue purposes. It may be a perfectly reasonable and proper thing to impose these duties in order to keep the goods out of the country, but it may be a very foolish thing to retain them for a different purpose altogether, namely, for revenue purposes. The question has never been examined from that point of view, and I trust in these circumstances the time has now come when the Government will see its way to retain them no longer. If the question has to be considered, let it be considered on its merits as a revenue machine. Let us not use the existence of these duties to get in the thin end of the wedge of a policy of protection in this country.

Contrary to the expectation of the last speaker, it must be simply and solely from the point of view of revenue, and as a revenue producer, that I have to consider this particular form of duty. A challenge has frequently been repeated to what may be styled a full-dress fiscal controversy in respect of these duties. By anybody who is interested in a decision of that controversy in a right manner, in one way or another, I believe that that challenge has always been declined, because it is not really involved in these duties. The challenge was put to me personally by the hon. and gallant Member for Aberdeen (Major M. Wood) as to the extent to which the principles of Free Trade are involved in these duties. I invite him to address himself to the eminent Free Trader who introduced these duties (Mr. McKenna), and to the right hon. Member for Paisley (Mr. Asquith) who supported him on that occasion.

During the War, precisely. What is the position in regard to these duties? I have to look at them on this occasion entirely from the point of view of revenue. They stand there, doing well from the revenue point of view. It was estimated for the year 1920–21 that they would produce £3,750,000. They actually produced £5,500,000, so that there is every sign in that of a duty that is, what may be called, favourable, wholesome, and healthy from the point of view of the revenue producer. This year, from these duties, in view of the general trade conditions, we cannot expect as big a yield. We can only expect, as we estimate for the current year, £2,100,000. That is a very conservative yield, and I think that in this matter there has been no form of over-estimate. Let me take one or two minor points that have been raised. As to the effect of these duties on trade, I think the argument is clearly answered by the figures I have given. If a duty is killing a trade you will find the yield of the duty declining. The figures I have quoted show that it is not declining, but increasing in excess of the estimate. Taking it all round, it is impossible to argue that these particular duties are having an exceptionally adverse effect on the articles to which they actually apply. It has been argued that in some manner or in some direction the duties must adversely affect the emporium trade in these articles. That is, goods that are deposited here on their way through. I fail to understand any reason why that should be so. The ordinary system of drawbacks applies.

If there is any aspect of the machinery of drawbacks, any series of formalities in which the ordinary system of drawbacks fails, or produces an effect which it is not intended to produce as regards a particular form of trade, I shall be glad if the hon. Member will bring it to my notice.

The Board of Customs say they can devise a scheme to permit the importer obtaining his goods and getting a drawback on exportation.

I cannot possibly accept that account of the Board of Customs attitude. If there is any case where the machinery is not working as smoothly as it was intended to work, I should be glad of particulars, for that is the sort of thing that has to be taken into consideration. The question has been raised as to the importation of antiques. I certainly hesitate, without further consideration, to say anything to commit the officers of Customs—high experts as they are in all matters which come under their jurisdiction—to the obligation of distinguishing what are genuine antiques to be included in the exemptions. It seems to me that that is a duty which would surpass even the skill and dexterity of our efficient officers of Customs. This is a point which can be considered in Committee on the Finance Bill. The and gallant Member has explained his case, and it will give my right hon. Friend an opportunity to consider it when the matter comes on in Committee on the Finance Bill.

In general, I submit that in a discussion, and in a discussion of the Budget introduced in the speech made by my right hon. Friend the Leader of the House, there really can be no two questions about the retention of these duties. They stand for the purpose of obtaining revenue. They have always been put forward on every occasion on which they have been introduced as special taxes not part of the permanent revenue system of the country. It is in that way that they are put forward again on this occasion. The House remembers that their special position in the revenue system of the country has been exceptionally marked out in the legal provisions of the year by special and unusual date, the 1st of May, on which they are imposed. They stand in the revenue system of the country as something outside the ordinary machine. They produce revenue, and this year, as has been pointed out again and again, in view of the needs of the year, and more particularly in view of the needs of next year, it would be folly to resign any revenue producing duty. I do not hesitate to readopt the argument by which these duties were supported when introduced. They were recommended on three grounds. In the first place by checking imports they would have an immediate effect in freeing tonnage. That is of less importance now. They would also have the effect of stabilising the exchange. They would also have the effect of benefitting directly and indirectly the general economic state of the country, by checking expenditure upon articles some of which are luxuries, and none of which is a necessity. To the same extent, and even to a greater extent that those conditions applied when the tax was originally introduced do they apply at the present time. Does any hon. Member argue that at the present time the exchanges between this country and the United States are in any less need of stabilisation than before? Does any hon. Member argue that at the present time absence from expenditure of that which is unnecessary is just as essential for every good citizen of this country as it was at any previous time? This tax is a revenue producer. One special circumstance on which I specially recommend it to the House is that it was introduced by an eminent Freetrader, and that as it was introduced, it now stands.

Does the hon. and gallant Member recommend it as a matter for saving shipping space?

The hon. and gallant Member cannot expect me to repeat twice everything I have said. Apart from the three circumstances which expressly recommended this tax, another, which specially differentiates it from the proposed alternative duty upon diamonds and pearls suggested by the hon. Member for Whitechapel, is that it is easy to collect, and is upon goods of comparatively bulky source. For these reasons I am unable to accept the Amendment.

In the course of a very ingenious speech, the Financial Secretary stated that he keeps this tax upon the Statute Book in order to raise revenue. If that be so, and if it is not a protective tax, why is there no countervailing excise duty placed upon similar articles manufactured here? I asked my hon. Friend to consider this. I quite agree with him that it is essential that there should be a cessation of expenditure upon luxury articles; but today there is not much need to preach that sermon, because the bare facts of the situation have come home to the country, and there is not much money for luxury articles. The fact that these duties were imposed upon luxury articles and imposed, I think, very unwisely, by a very eminent Freetrader, only shows what happens when eminent Freetraders allow themselves to slide from the real economic position of Free Trade. I thought when they were introduced, and I think I voted that way, that instead of having these taxes there should be absolute prohibition upon the imports. There can be no doubt that to-day these duties do act in a protective sense. There is no way out of it. There is a 33 1–3 per cent duty upon motor cars, musical instruments, etc. Why should the Government, when they have no mandate from the country, continue protective duties without imposing countervailing Excise Duties, and make it a real Free Trade Budget. You could get your revenue. My hon. Friend says he wants revenue. I agree with him that he does, because I am certain that the Leader of the House has far over-estimated the revenue that he will get next year.

I say, quite frankly, that it does strain the loyalty of men who have been Free Traders all their lives, and who see no reason to change from Free Trade, that you should maintain these distinctive protective duties. Take motor cars. One hon. Member said that the duty was imposed mainly against Germany. I have not much sympathy with Germany. For the most part the motor cars come from America. Not only is there this 33⅓ per cent. protective duty on motor cars coming from America, but there is the exchange of about 6s. in the £. Surely this is one of the industries in which our manufacturers should be able to compete. If they cannot compete, if they are so inefficient that they are not able to produce so efficiently as the American, I am very sorry for the future of the country. It only shows the ramifications which occur directly you get away from Free Trade, that a man may not import a £1,500 antique violin without going to France or some other country. If the Government propose to continue these duties let there be counterveiling Excise duties. If they do not, it shows that these duties are being kept on, not for revenue, but as a protective tariff. A cheap motor car in country districts is to-day a necessity. Men have to use them. In Devonshire we have not many railways, and we are rather remote from some of the amenities of civilisation. Why should the farmer in Devonshire have to pay 33⅓ per cent. on a motor car when he is not protected in the produce which he sells? If you want to be fair you should put a 33⅓ per cent. duty on wheat and meat, but no one dares to suggest that. Therefore these duties in their present incidence are protective, and I shall vote against them; but if my hon. Friend couples with them a counterveiling Excise, I shall be glad to vote in the same Lobby with him.

I felt at the time of the appointment of the hon. and gallant Gentleman to his high position that if there were many more such appointments every Member of this House would think that Ministerial appointments were being made on the grounds of merit, and the exceedingly brilliant speech he made to-day as a Free Trader in defence of the system, indefensible to a Free Trader, has fully justified the highest expectations concerning him. But when he finished up by saying that he justified the continuance of these duties on the grounds on which they were originally introduced I was much disappointed. The hon. and gallant Gentleman suggests that there is need to-day to maintain these duties in order to free tonnage. Tonnage, alas! is too free in every part of the world. With some 10,000,000 of the 20,000,000 tons of world shipping tied up, surely the hon. and gallant Gentleman is not serious in suggesting that we need maintain these duties in order to free tonnage. If there is one thing in the world which we should condemn in any proposal at this moment it would be that it does not give support to business and to our shipping industry. Our shipping industry to-day lies in ruins. Shipyards are closed. Every shipbuilder in the country nearly is confronted with bankruptcy, and yet the hon. and gallant Gentleman says that he is continuing these duties in order to free tonnage.

Then in regard to the rate of exchange, The hon. and gallant Gentleman is such an expert in these matters that I hesitate, with my much more limited knowledge, to disagree with him, but he knows well that the only way of stabilising the exchange, taking a long view, is the increase of trade throughout the world until bit by bit and year by year finally we may overcome the present appalling difficulties of exchange and automatically get back on to a sound basis. But the Government are now pursuing a policy which hampers and restricts trade, which is lessening the trading capacity of every country in Europe and particularly affecting our trading capacity with America, and the result may be that the present condition of the exchange will continue for years, far longer than any of us can foresee, and with it the present evils. Then we are told that these duties are in order to discourage luxurious purchasing. Surely the proper way of doing this is to prohibit all things which the Government of this country think ought not to be purchased. But there is no need to do that now. With Government expenditure what it is and Income Tax as high as it is very shortly there will be no need for the Government to guide the citizens of this country as to what form their expenditure will take. They will be so utterly without spending capacity of any sort that that will be the last ground for urging a continuance of these duties

Will the hon. and gallant Gentleman take personal responsibility for the statement that his object in continuing these duties is for the purpose of securing revenue? If so, why is not bread taxed? The total revenue produced here is £5,000,000, which is almost negligible from the point of view of the Exchequer while from bread alone and raw materials, if this fiscal system is to be continued, we might have this revenue ten times over. I put it to the House that these revenues have long outstayed any service to the commercial community in their overseas trading. They have long ceased to be a profitable source of revenue to the State and they make it impossible for us, who know how far the conditions of international well-being in our trading are based upon Free Trade, to continue to support them. For these reasons I hope that the House will say that the time has come when these duties should be abolished.

It is an extraordinary thing that the Government cannot get anybody in this House to say a single word in defence of the duties except the Free Trader who is in charge of them. I do not know whether that circumstance will induce him, if not to reconsider his views, to ask the Government to reconsider their attitude towards these taxes. No doubt to a very large section of the people of this country these taxes are one of the most obnoxious. They are at present being levied on people who are singled out for exceptional treatment. The remaining duties covered by this Resolution are continued to the 1st of August, 1922. This duty is only continued to the 1st of May, and it will be within the recollection of the House that the change was made after the very strong expression of opinion in this House generally on the part of Free Traders, and my right hon. Friend (Mr. Lambert) was simply revoicing to-day the opinions which led the Government to give way originally on this point. It is too late in the day to ask us to look at these duties from any other point of view except this, that they are protective duties.

A very fair challenge has been thrown down by the right hon. Gentleman (Mr. Lambert). If they are not protective duties, if what you want is revenue, then treat them as you would treat other things—impose a countervailing duty and get your revenue. We are asked to believe that they are retained simply on account of their revenue-producing qualities, and we are asked to believe this at a time when the Government have thrown overboard the Excess Profits Duty, which, whatever might have been its deficiency, would certainly have yielded this year 50 times as much as the taxes in question. That duty was thrown over because it was obnoxious to a very large body of feeling in this House, and we on this side contend that some concession should be made to Free Trade feeling, particularly when that concession can be made at so small a price. The Minister said that these taxes have about them all the characteristics of vital growing taxes. The fact is that they produced in the year 1919–20 a little over £3,350,000, and we have been told that last year they produced £5,500,000, and those figures taken by themselves might serve to support an argument that they were grow- ing, but the Minister tells us that in the coming year they are not estimated to produce more than the trifling sum of £2,000,000 out of £1,050,000,000 and yet we are asked to believe that these taxes are being kept on purely for revenue purposes. They are not taxes at all; they are simply arguments, arguments for Protection, to extend the protective system generally in the Budgets of our country. They are simply here because upon them can be based a general tariff of which they are the beginning. We on these Benches are no longer to be deceived by them. We regard these taxes as purely for protective purposes. They bear all the marks of protective duties. When examined they can be seen to be as futile as any protective tariff can be. Take motor-car duties, for example. I have taken the figures from the Finance Account for 1920–21. The duties on motor cars and motor cycles produced something short of £2,000,000, which means that motor cars and motor cycles were imported to the extent of £6,000,000. They come into this country obviously because they are cheaper than cars of the same type and quality produced at home. The effect of keeping these cars out of the country is one which was not calculated when the tax was introduced. A great deal of stress has been laid on the arguments with which they were introduced. Since then very highly increased duties have been put upon motor cars for the sake of raising revenue to improve the roads of this country. So that every car you keep out of the country means a reduction of the revenue for the purpose of improving the roads. No doubt the effect of these taxes is to check the import of cars, but that means that the roads suffer; it also means that transport suffers and agriculture suffers. I am surprised that no protests have been made from the opposite Benches on that ground.

The person who avails himself of the cheap car is the man who lives in the country, the agriculturist, and that is shown to some extent by the differentiation made in the taxes upon tractors used for agricultural purposes. You have this extraordinary coincidence, that on the one hand the Government reduce the tax on tractors and that on the other hand they levy a duty to keep out those very tractors. The Financial Secretary said that this was the very time to prevent importation and expenditure. I submit that the object of the tax is, not to check imports as a general principle, but to check certain kinds of imports. At the time the tax was first imposed we were importing vast quantities of food and raw material. Now that necessity has passed, and what is more necessary than ever to-day is the power to get into this country things which are cheap. The things you are keeping out here are comparatively cheap things bought by people of low income. It is not the high-priced clock or motor car or musical instrument that the tax will keep out. The place that you denude of luxuries is not the mansion or the villa but the cottage. If the Government had any desire to meet the special circumstances arising out of the fall in prices they would not discourage the importation of cheap goods, and thereby increase the cost of living, but they would open our ports and make it possible for us to get the largest possible quantity of cheap goods.

I do not want to continue the argument on the substance of this tax, but I invite hon. Members who represent Free Trade in this House to consider very carefully where they are being led. When this tax was first continued after the War it was explained by the Chancellor of the Exchequer that we still lived under war conditions. There was a good deal of force in that argument, for it was then only one year after the Armistice. The hon. Member for Middleton (Sir R. Adkins) moved an Amendment with the object of fixing the temporary nature of the tax. The next year the hon. Gentleman, who had specially emphasised the temporary nature of the tax, was absent, and, without any protest on his part or that of those with whom he was associated, the tax passed into a permanent part of the fiscal machinery of the country. Three Members of the party to which I have referred voted against the tax on that second occasion, and those three subsequently assumed office in the Government. On another occasion the same ground was traversed, and amongst those who were so convinced that the tax was bad that they went into the Lobby against it was the present Financial Secretary to the Treasury. If hon. Members opposite vote against the tax to-day, no one knows what fortune may have in store for them.

I find it very difficult to follow the argument adduced by the Financial Secretary, especially after what has been said by the last speaker. If it is necessary to stabilise exchange in respect of one article or two articles, why not endeavour to do so all round? And if it is necessary to stabilise it in respect of one country why not in respect of others? If it is necessary to check the consumption of luxuries in respect of one article, why is it not necessary in respect of 100 articles? Those who carry their minds back to the date when these duties were first imposed, will recollect that they were imposed to free tonnage. These duties, if continued as an ordinary part of our fiscal machinery, as apparently the Government propose, will place a very heavy burden on the farmers of this country. In the part of Scotland which I have the honour to represent the farmers more and more find it necessary, in order properly to conduct their businesses, to provide themselves with cheap cars. In most instances these cars come from the United States of America, In the ordinary way the cars ought to be at the disposal of the farmers at the cheapest possible price, but by these duties it is proposed to add at least 33⅓ per cent. to their cost. I take the strongest possible exception to the tax.

I have been a critic of these duties from the first. I accepted the idea that they were first imposed to save tonnage and to lessen the expenditure of the people of this country on luxuries, but I have always felt, and I am more justified in that feeling to-day, that the main purpose of these duties was to serve the interests of Protection. I shall vote against the duties to-day, as I have voted before. The plea that the duties are maintained for revenue purposes will not hold water, in view of the very small amount that the duties bring in. I think hon. Gentlemen on the opposite side have been quite justified in the interests of Free Trade—I am still a Free Trader—in protesting against a continuance of duties which ought to come to an end, in view of the fact that what we require is a free importation of these articles in order to lessen the cost of living. I heartily support the protest that has been made.

We are very glad to see the Chancellor of the Exchequer now in the House. I dare say he has been absent for some very substantial reason. I am the last Member to complain of the absence of a Minister of the importance of a Chancellor of the Exchequer on any business which requires his attention, but at the same time I would like to put this point to him. We have been discussing in his absence a point of substance which has been defended by the Financial Secretary, although we have very little faith in that defence for a reason which has been given to the House, namely, that the Financial Secretary last year voted with others against these duties. Therefore, presumably, the speech delivered by the Financial Secretary was not his speech at all, but what the Chancellor of the Exchequer had told him to say.

I am glad that is not the case, because I presume that we shall now have the substantial support of one who is not a convert to the views of the Chancellor of the Exchequer.

Joking apart, I want to put a question direct to the Chancellor of the Exchequer. He knows and we know how and why these taxes were imposed. The original ground for the imposition of the taxes was a War precaution. The taxes were imposed because there was not room enough in ships coming to this country to carry all the raw materials that we required. I ask the Chancellor of the Exchequer whether he seriously asks the House to believe that these duties are being kept on in order to find space on ships which are bringing imports to this country? If that is not the reason, will he say why the taxes are being maintained? There is this significant fact to be borne in mind: From the beginning of the discussion till now not a single supporter of the Government has risen to defend the taxes—not a single Coalition Liberal supporter of the Government, with the exception of one hon. Member (Mr. John-stone). Not a single Coalition Liberal who boasts of his Free Trade principles has risen to defend these taxes. More significant than that, not a single Conservative or Tariff Reformer has risen to defend them.

May I take it from that interruption that the Coalition Liberals and the Unionist Members of this House have imposed upon the Government Tariff Reform as a fiscal policy?

That being the case, probably the great high priest of Protection, the Chancellor of the Exchequer, will be able to tell the House whether it is the view of the Government to take advantage of war taxes in order to impose upon us a change in our fiscal position?

The question before us is a simple one, namely, whether in the third Budget after the Armistice taxes which were very properly levied during the War should be continued? It may be said, and with truth, that for the first year or two after the Armistice the motor car trade especially had to transform its works from a war to a peace footing. When any class of individuals or business had been dislocated by the War this House has extended its support to that trade or class during the first two years after the War. I do not think any hon. Member will say that these trades, which were very rightly solely consecrated to war purposes, had not had sufficient time to divert their trade to ordinary peace conditions. The point which I am anxious to put to the Chancellor of the Exchequer is this. Will he give an assurance to the House of Commons that these duties will automatically disappear at the end of this year? We are entitled to ask that question, because to single out one class of capital for protection from the State at a time of acute industrial depression is not fair to any other class of manufacturer.

7.0 P.M.

There are on the Order Paper certain. Financial Resolutions. Every hon. Mem- ber is receiving pressure to support those Resolutions. The best argument that Free Trade can use is that under the present fiscal proposals of the Government certain trades receive the protection of the 33⅓ per cent. duty. They point out that certain trades have that protection, and they very rightly ask, "Why deny to us what you have given and continue to give to them?" I hope the right hon. Gentleman will give the House some definite assurance on that point. This country is suffering from one thing, and one thing only, namely, high prices. Britain can only live if she is able to export her goods to every part of the world. A system which has stood 50 years of peace and six years of war—I mean the system of Free Trade—is one which should continue in the future. The Government, by their actions in tabling the Financial Resolution against dumping, have given the impression to the country that they stand for high prices and that in their opinion high prices are the best for this country. Those of us who think that Britain can only maintain her population here by opening her ports to receive goods from every part of the world say that so long as these duties remain on the Statute Book they are a direct encouragement to every trade to use every possible pressure to get the same advantage from the State which these Resolutions give to these particular trades.

I rise in the hope that the few remarks I have to make may bring this part of the discussion to a close. A variety of complaint is made as to the failure to answer from the Government side of the House in connection with these duties. I should have thought that this question had been debated sufficiently often to make every hon. Member fully aware of the arguments on each side. There have been various high principles laid down, from which I do not for a moment dissent. I agree, for example, with my hon. Friend who has just sat down that an export trade is a most vital necessity to this country. I agree, also, that it is of the greatest possible advantage to reduce the price to the lowest possible limit of the things that we consume, but we really are not entering into this question on the high ground of economic theory at all this afternoon. The whole question with which this House is at the moment confronted is, firstly, whether this is a good method of obtaining a revenue which we very badly need, and in the second place whether, in obtaining that revenue, we are doing any injury to any interest in this country which is going to suffer by the action which we are taking. We raise a good, solid, appreciable revenue from these duties. I cannot find anybody who can assert that any interest in which he is concerned is suffering.

These duties which are imposed were imposed by the most impeccable of free trade economists. [HON. MEMBERS: "During the War!"] Certainly, during the War, but for what purpose? In order, in the first place, that revenue should be obtained. [HON. MEMBERS: "No!" and "Hear, hear!"] I am talking of what I remember. I remember the speeches very well, and I am in the presence of hon. Members who took part in the business in those days. [HON. MEMBERS: "You were not a Member."] I came into the House too late; far later than any self-respecting Scotsman should. At the game time, I came in as soon as I was allowed to. It was not that I had not made efforts on previous occasions to come here, but in the privileged assembly to which I am now come my presence was denied. The arguments roughly put forward for these duties were, first, that they raised revenue. Secondly that they saved shipping space. On that my hon. Friend elaborated this afternoon, knowing full well that that is the only ground on which he can now ask for their withdrawal. They were imposed in the third place, on the ground that they prevented expenditure on luxuries. It is prefectly true that the ground of occupying shipping space has disappeared. There still remain very prominently before us at the present time the necessity of raising revenue, above all things, and in the next place of checking expenditure upon luxuries.

Take the case of motor cars. There is no duty on commercial motor cars; it is placed entirely on private cars, which sufficiently discloses the real ground of the duty on motor cars. It is a tax upon luxuries. If you take the further matters concerned by these duties, there are things such as cinema films—you put a tax on people who go to see the cinemas at the present time, why should there not be a duty on cinema films?—and you have a duty on clocks and watches. Who is damnified by this tax? [HON. MEMBERS: "The poor."] I am very happy to think that the poor of the country at the present time can afford to ride in motor cars, if that is what is suggested. I venture to submit that these duties require no further defence from anybody. As Chancellor of the Exchequer, it is the money I want, and the

more money I get out of these luxury duties the less shall I have to impose in taxation upon other people, and upon matters which are of far more vital necessity to the country. Accordingly, I venture, with all respect, to ask the House now to finish this discussion.

Question put, "That the words proposed to be left out stand part of the said Resolution."

The House divided: Ayes, 186; Noes, 42.

Division No. 89.]

AYES.

[7.10 p.m.

Adair, Rear-Admiral Thomas B. S.

Greig, Colonel James William

Pearce, Sir William

Agg-Gardner, Sir James Tynte

Gretton, Colonel John

Pease, Rt. Hon. Herbert Pike

Allen, Lieut.-Colonel William James

Gritten, W. G. Howard

Perkins, Walter Frank

Archer-Shee, Lieut.-Colonel Martin

Guest, Capt. Rt. Hon. Frederick E.

Philipps, Sir Owen C. (Chester, City)

Baldwin, Rt. Hon. Stanley

Guinness, Lieut.-Col. Hon. W. E.

Pinkham, Lieut.-Colonel Charles

Balfour, George (Hampstead)

Hacking, Captain Douglas H.

Poison, Sir Thomas

Banbury, Rt. Hon. Sir Frederick G.

Hall, Lieut.-Col. Sir F. (Dulwich)

Pownall, Lieut.-Colonel Assheton

Banner, Sir John S. Harmood-

Hambro, Captain Angus Valdemar

Pratt, John William

Barlow, Sir Montague

Hamilton, Major C. G C.

Prescott, Major W. H.

Barnett, Major R. W.

Hannon, Patrick Joseph Henry

Purchase, H. G.

Barnston, Major Harry

Hanson, Sir Charles Augustin

Randles, Sir John S.

Beckett, Hon. Gervase

Harmsworth, C. B. (Bedford, Luton)

Raw, Lieutenant-Colonel N.

Bell, Lieut.-Col. W. C. H (Devizes)

Harmsworth, Hon. E. C. (Kent)

Rawlinson, John Frederick Peel

Betterton, Henry B.

Hennessy, Major J. R. G.

Reid, D. D.

Bird, Sir A. (Wolverhampton, West)

Henry, Denis S. (Londonderry, S.)

Richardson, Alexander (Gravesend)

Bird, Sir William B. M. (Chichester)

Hewart, Rt. Hon. Sir Gordon

Roberts, Samuel (Hereford, Hereford)

Blair, Sir Reginald

Hickman, Brig. General Thomas E.

Roundell, Colonel R. F.

Boscawen, Rt. Hon. Sir A. Griffith

Hilder Lieut.-Colonel Frank

Royds, Lieut.-Colonel Edmund

Bowles, Colonel H. F.

Hoare, Lieut.-Colonel Sir S. J. G.

Rutherford, Sir W. W. (Edge Hill)

Bowyer, Captain G. E. W.

Hood, Joseph

Samuel, A. M. (Surrey, Farnham)

Brassey, Major H. L. C.

Hope, Sir H. (Stirling & cl'ckm'nn,w.)

Samuel, Samuel (W'dsworth, Putney)

Breese, Major Charles E.

Hopkins, John W. W.

Sanders, Colonel Sir Robert A.

Buckley, Lieut.-Colonel A.

Home, Sir R. S. (Glasgow, Hillhead)

Scott, A. M. (Glasgow, Bridgeton)

Burn, Col. C. R. (Devon, Torquay)

Hume-Williams, Sir W. Ellis

Scott, Leslie (Liverpool Exchange)

Campbell, J. D. G.

Hunter, General Sir A. (Lancaster)

Scott, Sir Samuel (St. Marylebone)

Casey, T. W.

Hurst, Lieut.-Colonel Gerald B.

Shaw, William T. (Forfar)

Cautley, Henry S.

Inskip, Thomas Walker H.

Shortt, Rt. Hon. E. (N'castle-on-T.)

Cayzer, Major Herbert Robin

Jackson, Lieut.-Colonel Hon. F. S.

Simm, M. T.

Cecil, Rt. Hon. Evelyn (Birm., Aston)

James, Lieut.-Colonel Hon. Cuthbert

Smith, Sir Allan M. (Croydon, South)

Chadwick, Sir Robert

Jameson, J. Gordon

Smith, Sir Harold (Warrington)

Chamberlain, N. (Birm., Ladywood)

Jodrell, Neville Paul

Stanier, Captain Sir Seville

Cheyne, Sir William Watson

Johnson, Sir Stanley

Stanley, Major Hon. G. (Preston)

Chilcot, Lieut.-Com. Harry W.

Jones, Sir Evan (Pembroke)

Stewart, Gershom

Churchman, Sir Arthur

Jones, J. T. (Carmarthen, Lianelly)

Strauss, Edward Anthony

Clay, Lieut.-Colonel H. H. Spender

King, Captain Henry Douglas

Sturrock, J. Leng

Coates, Major Sir Edward F.

Lewis, Rt. Hon. J. H. (Univ., Wales)

Surtees, Brigadier-General H. C.

Coats, Sir Stuart

Lonsdale, James Rolston

Sutherland, Sir William

Cobb, Sir Cyril

Lort-Williams, J.

Taylor, J.

Cockerill, Brigadier-General G. K.

Loseby, Captain C. E.

Terrell, George (Wilts, Chippenham)

Colvin, Brig.-General Richard Beale

Lowe, Sir Francis William

Thomson, F. C. (Aberdeen, South)

Craig, Captain C. C. (Antrim, South)

Lyle, C. E. Leonard

Thomson, Sir W. Mitchell- (Maryhill)

Craik, Rt. Hon. Sir Henry

M'Donald, Dr. Bouverle F. P.

Turton, E. R.

Croft, Lieut.-Colonel Henry Page

Mackinder, Sir H. J. (Camlachie)

Ward, Col. J. (Stoke-upon-Trent)

Dalziel, Sir D. (Lambeth, Brixton)

McLaren, Hon. H. D. (Leicester)

Ward, William Dudley (Southampton)

Davidson, Major-General Sir J. H.

M'Lean, Lieut.-Col. Charles W. W.

Waring, Major Walter

Denison-Pender, John C.

Magnus, Sir Philip

White, Lieut.-Col. G. D. (Southport)

Denniss, Edmund R. B. (Oldharn)

Manville, Edward

Whitla, Sir William

Dockrell, Sir Maurice

Marriott, John Arthur Ransome

Willey, Lieut.-Colonel F. V.

Doyle, N. Grattan

Martin, Captain A. E.

Williams, Lt.-Com. C. (Tavistock)

Du Pre, Colonel William Baring

Mitchell, William Lane

Williams, Lt.-Col. Sir R. (Bansury)

Edgar, Clifford B.

Molson, Major John Elsdale

Wills, Lieut.-Colonel Sir Gilbert

Falle, Major Sir Bertram G.

Moore, Major-General Sir Newton J.

Wilson, Daniel M. (Down, West)

Farquharson, Major A. C.

Moore-Brabazon, Lieut.-Col. J. T. C.

Winterton, Earl

Fell, Sir Arthur

Morden, Lieut.-Col. W. Grant

Wise, Frederick

FitzRoy, Captain Hon. E. A.

Moreing, Captain Algernon H.

Woolcock, William James U.

Flannery, Sir James Fortescue

Morison, Rt. Hon. Thomas Brash

Worsfold, Dr. T. Cato

Fremantle, Lieut.-Colonel Francis E.

Neal, Arthur

Yeo, Sir Alfred William

Ganzoni, Captain Sir F. J. G.

Newman, Colonel J. R. P. (Finchley)

Young, Lieut.-Com. E. H. (Norwich)

Gibbs, Colonel George Abraham

Newman, Sir R. H. S. D. L. (Exeter)

Younger, Sir George

Gilmour, Lieut.-Colonel Sir John

Nicholson, William G. (Petersfield)

Goff, Sir R. Park

Nield, Sir Herbert

TELLERS FOR THE AYES.—

Green, Joseph F. (Leicester, W.)

Palmer, Brigadier-General G. L.

Colonel Leslie Wilson and Mr. McCurdy.

Greene, Lt.-Col. Sir W. (Hack'y, N.)

Parker, James

Gregory, Holman

NOES.

Barnes, Major H. (Newcastle, E.)

Irving, Dan

Rattan, Peter Wilson

Benn, Captain Wedgwood (Leith)

Johnstone, Joseph

Royce, William Stapleton

Blake, Sir Francis Douglas

Jones, Henry Haydn (Merioneth)

Sexton, James

Bowerman, Rt. Hon. Charles W.

Kennedy, Thomas

Thomas, Brig.-Gen. Sir O. (Anglesey)

Cairns, John

Kenworthy, Lieut.-Commander J. M.

Thorne, G. R. (Wolverhampton, E.)

Collins, Sir G. P. (Greenock)

Kenyon, Barnet

Thorne, W. (West Ham, Plaistow)

Edwards, G. (Norfolk, South)

Lambert, Rt. Hon. George

Wallace, J.

Galbraith, Samuel

Lyle-Samuel, Alexander

Walsh, Stephen (Lancaster, Ince)

Glanville, Harold James

Mallalieu, F. W.

Waterson, A. E.

Graham, W. (Edinburgh, Central)

Morgan, Major D. Watts

White, Charles F. (Derby, Western)

Grundy, T. W.

Murray, Lieut.-Colonel A. (Aberdeen)

Williams, Aneurin (Durham, Consett).

Henderson, Rt. Hon. A. (Widnes)

Murray, Dr. D. (Inverness & Ross)

Wilson, Rt. Hon. J. W. (Stourbridge)

Hogge, James Myles

Murray, John (Leeds, West)

Wood, Major M. M. (Aberdeen, C.>

Holmes, J. Stanley

Myers, Thomas

Hopkinson, A. (Lancaster, Mossley)

Nicholson, Reginald (Doncaster)

TELLERS FOR THE NOES.—

Mr. Kiley and Major Hayward.

Resolution agreed to.

Second Resolution agreed to.

Third Resolution read a Second time.

Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."

I desire to offer a few remarks on this Resolution, but I am not going to propose an Amendment, because I know that it would be of no use. [HON. MEMBERS: "Why?"] Because it would not be carried. Last year when the ad valorem duty was brought forward, I told the Chancellor of the Exchequer that it would defeat its own object. It has done so, and the ex-Chancellor has admitted that he made a blunder in regard to it. The only good point about this proposal is that the present Chancellor proposes a flat rate instead of an ad valorem duty. That is an improvement, but I am going to ask him to take the duty off altogether for the following reasons. First, he will not get any revenue out of it, because people are not going to drink champagne simply because half-a-crown a bottle has been taken off. There will be just the same slump in champagne this year as was the case last year. Secondly, I want the Chancellor to take into consideration the consequential effect of this duty upon the unfortunate people in France whose business it is to produce this wine. I am referring particularly to champagne, though other sparkling wines are included in the duty. The Champagne district was, I understand, the most devastated part of the whole country, and in addition to that they have had a very bad year, and we should, in my opinion, help them to recover. There is a good practical reason for doing so, because France owes us money, and this would help her to pay off her debt to us. Those are my two reasons for suggesting that the Chancellor should abandon altogether this duty of 12s. 6d.—that it is without advantage to the revenue and without advantage to the people of France. If he will not consider those reasons, I will suggest to him that he is missing a golden harvest in another form of luxury taxation. He might very well surrender this tax, and obtain a great deal more revenue by taxing luxurious meals. I do not mean only meals in the Carlton, the Ritz, or highly expensive places, but in the thousands of smaller restaurants, and in hotels, railway stations, and so on throughout the kingdom, both in London and in big cities such as Birmingham, Manchester and Leeds Tens of thousands of people, every night, are spending money in these restaurants, and if they can afford to spend the money, they can afford to pay a tax. I suggest this as an alternative to this unfortunate tax on champagne, but I should like to make it clear that in doing so I am not considering the wine drinker, but only the revenue and the interests of the people who produce the wine.

I should like to ask some questions in reference to this duty. So far as I can make out, we are going to charge a duty of 12s. 6d. a gallon on all sparkling wines. I may be displaying ignorance, but I wish to know if it is intended to charge 12s. 6d. a gallon on the champagne imported from, the Rheims country, and also 12s. 6d. on the cheaper sparkling wine imported from Italy, and the same duty also to apply to the sparkling wines imported in small quantities from Australia and, as I think, also from the Cape? Is the duty to apply to all sparkling wines from whatever country? Then, again, I would like to ask how is the duty to be measured on a gallon? I am trying to visualise a gallon of champagne; I know a pint, and I know twice a pint, but I do not know a gallon. Do you assess it as so many bottles, because, after all, the champagne is bottled in France where it is grown? Do you take these dozens of bottle and estimate that so many would go to a gallon if they were poured out into a tub? I should merely like some information upon these two points in regard to the application of the flat rate.

The wine trade as a whole is deeply indebted to the Chancellor for having considered this matter in a reasonable way. The ad valorem duty made it possible for people sending wine from foreign countries to invoice the wines at something less than the price at which it was really sold. I am sure the Chancellor and the Government as a whole would not lay themselves open to having wine imported and valued at these fictitious prices thereby, and I use the word with reserve, defrauding the Government out of a certain amount that ought to be paid. I have been in discussion with a great many wine merchants on this point, and they state that if the Chancellor could see his way to put a round duty of, say, 30s. per dozen on sparkling wines it would not have the effect of keeping out of this country the cheaper wines to which the hon. and gallant Member who spoke last has referred. It has been said in the past that this ad valorem duty has the effect of reducing revenue, and I congratulate the Chancellor on the step he has taken, and if the reports we have had from the wine trade are correct, he may assume he will get a reasonable revenue. With regard to the queries put by my hon. and gallant Friend (Colonel Newman) I am sorry his arithmetic is so bad, but he may have taken champagne only in such small quantities that he has not realised what a gallon is. I think it is generally recognised that a gallon of wine is calculated at 6 bottles. Therefore if my Friend will be careful in his calculation, he will find that there are two gallons to a dozen, and that on a basis of 30s. a dozen is 2s. 6d. per bottle.

I have very little information to give on the one or two points which have been raised, in addition to that already given by the hon. Member who has just spoken. As he truly says, the difficulty of reckoning the duty on a gallon is overcome by a simple calculation, and that a duty of 15s. per gallon would be equivalent to 30s per dozen or per case. As regards the nature of the wines on which this duty is to be charged, I am not sure I quite follow the hon. and gallant Member (Colonel Newman). It is a flat rate on sparkling wines, from champagne on the one hand, to the cheaper wines on the other, and no designation is given. I fear the question raised by the hon. and gallant Member (Admiral Adair) who opened this discussion, and who went so far as to suggest the total abolition of the duty, would involve a sacrifice of revenue. Taken on the new basis, this has been justly said to be a very great benefit to the sellers, but the duty must be looked upon as a substantial revenue-producing instrument which it would be impossible to abandon in the course of the present year.

Question put, and agreed to.

Fourth Resolution read a Second time.

I beg to move, in paragraph ( a ), after the word "the" ["for the year beginning"], to insert the words "first six months of the".

The result of this Amendment, with a consequential Amendment which is on the Paper, if carried, would be to allow the 6s. Income Tax, the normal rate, to run for the first six months of the present financial year, but to reduce it by 6d. in the second part of the year, making it then 5s. 6d. instead of 6s. I have no doubt the Government will say that such a course is unprecedented, but I do not feel that that is a very substantial argument if they use it, because I suppose the present Government have established more precedents than any other Government in modern times, and, after all, if it turns out to be a good precedent, it can be followed in the future, and if it turns out to be a bad precedent, the example need not be followed in any future year. Another argument the Government may possibly use is that it destroys the sweet simplicity of a uniform tax. I suggest that the Inland Revenue can quite easily get over any little difficulties of that sort, and I am sure the taxpayer would certainly much rather have the saving of 6d. on the Income Tax than all the sweet simplicity of the present system. I have put down this Amendment because I believe that we do not really want the extra money that the sixpenny tax is going to bring in, and, therefore, if we do not really want this money, we ought to do our utmost to save it. The present Income Tax is extremely heavy. Just before the War it was only 1s. 2d., and it is now 6s., and everybody will agree that it is a crushing tax on industry. I would like to remind my hon. Friends in the Labour party that if it is a crushing burden on industry, it must mean in the long run very severe unemployment.

The President of the London Chamber of Commerce made a speech the other day in which, dealing with the question of taxation, he said we could not afford to wait, and that unless the position was tackled enterprise would cease. I believe that when the six months are over, from the 6th October next we shall find that the sixpenny tax is not really wanted by the Treasury at all, and I should like to give the reasons why I believe that to be the case. The Government do not seem to me to have taken any account, in the Estimates of Revenue which they have put forward, of the trade revival which is absolutely certain to take place directly this question of the coalfields has been dealt with and settled. The Financial Secretary has based his Estimate on the most cautious principles, and, indeed, he said they were calculated on a very conservative basis, and he rubbed it in, saying it over and over again. I believe the Estimates of Revenue are at present far below what will actually come in, and I am strengthened in that opinion by the fact that it is not the first time that the Treasury has under-estimated the Revenue. Last year the Estimates were a long way below what would have come in but for the unexpected slump in trade in the autumn, which was wholly unforeseen. In fact, the Leader of the House told us in his Budget speech that when he framed the Budget a year ago trade was extraordinarily prosperous, and yet, in spite of the depression which came, his Estimates were realised in the most extraordinary way. In other words, if that slump had not occurred, his Estimates would have been enormously exceeded. In spite of the slump, his Estimates were exceeded by over £7,000,000. There was a deficit of £15,000,000 in Customs and Excise and of £14,000,000 in Special Miscellaneous Receipts, making £29,000,000 deficit. Therefore, but for the unexpected slump, the Budget Estimate for that year would have been exceeded on those two heads alone by £29,000,000; but in spite of that the Treasury is going even further this year, because the Leader of the House stated in his Budget statement: down further, and that simply means that we shall knock millions off the heavy sum now being paid in bonus. Yet the Treasury do not appear, so far as I can see, to have taken any account of that factor in the Estimates they have put forward.

Take, again, the services arising out of the War. I have added them all up, and I find that they come to a total of practically £22,000,000, excluding pensions and Army services. Hon. Members will remember that in the Budget statement the other day the right hon. Gentleman practically promised drastic reductions in expenditure next year, but, so far as I can see, he has taken no account of the effect which that reduction will have on the expenditure of the Civil Service this year. If you are going to have a drastic cut in expenditure next year, it must be begun to a certain extent this year. If the Civil Service are aware that there is going to be a drastic cut in expenditure next year and that certain schemes are going to be scrapped, it is quite certain they will not think it worth while to go on with schemes which they know are going to be scrapped in a few months' time. But apparently the Budget has taken no account of that aspect of the question. In the third place, we have got the Irish question. At the present moment, without going into details, we are spending on the military forces in Ireland, the Dublin Metropolitan Police, the Royal Irish Constabulary, and the Auxiliary Force over £22,000,000 a year—nearly £2,000,000 a month. Does anybody believe for a moment that this will go on? I do not believe it can possibly go on. Some settlement has got to be made of this Irish question, and very soon, but directly a settlement has been arrived at and law and order have been restored in Ireland, this expenditure will come down with a run. Has the Treasury taken account of that? It seems to me they ought to take account of it, as it would mean a matter of many millions sterling.

Let me now come to the sources of increased revenue, which, I believe, the Treasury has ignored up to the present moment. First of all, take the German Separation question. I know there is great difference of opinion in this House as to whether the Germans have been asked to pay too much or too little. Therefore, I do not propose to go into that question, but up till now, certainly, Germany has been very slow in paying her debts. There is every reason to suppose, however, that under the tremendous pressure being brought to bear by this country and the Allies, Germany will, in the very near future, pay a very substantial sum in settlement of these claims. But the Budget absolutely ignores the possibility of it. The Leader of the House, in his statement the other day, said he was taking no credit in the present Budget for the sums which we may receive on Reparation account. Surely, in view of the pressure which is being brought to bear to-day on Germany, something, if only a small sum, ought to have been put to the credit side, so far as that is concerned, in the Budget Estimate.

There is another, and a larger source of revenue. Two years ago, the Royal Commission on Income Tax recommended various changes, and said that not only would those changes lead to a great reduction in the cost of collecting the Income Tax, but that it would bring enormously more revenue into the Treasury. In three separate sections it dealt with the reduced cost, and in one very important section it dealt with the increased revenue. The chief Treasury witness, who came before that Commission, said that if their recommendations were adopted the increased revenue would be about £10,000,000, and one witness said that, by the prevention of evasion, the revenue would be increased by a much larger sum that that. I take it the Revenue Bill will be passed in a few weeks. [HON. MEMBERS: "No!"] It may or may not be passed, but, no doubt, the Government think it will be passed, and have brought it in for that purpose. Has the Treasury taken the smallest account of the saving and the increased revenue which will accrue when the Revenue Bill has been passed? I do not believe they have taken it into account. In fact, not only have they not taken any account of it, but they produced an Estimate in this House the other day for an increase of £500,000 for Revenue buildings, which will not be wanted at all if the Revenue Bill is passed, because it will mean a centralised system with far fewer offices in the localities.

I have given only a very few instances of where, I believe, the Treasury have very much misjudged the situation, both from the point of view of revenue and from the point of view of expenditure, but these cases I have given amount to infinitely more than £15,000,000, which is the loss of revenue that my Amendment would entail. Therefore, I believe it is absolutely safe to cut off this 6d., and make the Income Tax for the second six months of the year 5s. 6d. instead of 6s. It is perfectly true that 6d. is not very much off the Income Tax, but, to my mind, every penny you put on means more unemployment, and every penny you take off means more alleviation of the present labour conditions, because it means giving more opportunity to the working man to find work, and more opportunity to the employer to find a market for the produce of that workman's labour. This being so, I have tried to put my case—I am afraid very lamely—as shortly as possible, so as not to weary the House.

I beg to second the Amendment.

Probably, we all agree that, in proposing any remission of taxation, it is incumbent upon us to show, first of all, that the whole of the reduction is most deserving, and, secondly, that the Chancellor of the Exchequer is in a position to make such a reduction. In the first place, this Amendment does not deal with the man who pays Super-tax at all, but only deals with the Income Tax payer. The first consideration that appeals to me is this. Shortly before the War, we had an Income Tax of 1s. We are now saddled with what, apparently, looks like being a permanent tax of 6s. in the £; in other words, that one tax has been raised sixfold. That is an enormous increase, and there is no other taxpayer in the country, whether indirect or direct, who has had the same proportion of increase of taxation. Therefore, if there is any remission of taxation, primâ facie it ought to be made in favour of the Income Tax payer. I am in the habit rather of approaching various questions from the interests of the occupier of land—not the point of view of the owner, but of the occupier of land—and I propose to ask the House for a few minutes to consider one or two classes of Income Tax payers, to whom, I think, the tax is perfectly unbearable. The occupier of land prior to the War paid Income Tax on an assessment of one-third of his rent. Then his assessment was increased to one year's rent, and afterwards to two years' rent. In other words, you raised the assessment of every occupier of land, the man who makes his living out of the land, six times more than it was before. In addition to that, you increased the tax from 1s. to 6s., and now the occupier of land pays 36 times the Income Tax he did before. I do not wish the House to be misled in any way. That only refers to the larger occupier of land, because the small occupier does get the ordinary abatements which other Income Tax payers get. The burden is intolerable, and, in addition to that, there is the enormous increase of local rates put upon the occupier of land, those rates having increased from three to four times what they were, and now amount to 14s. or 15s. in the £, on the average, in all our country districts. If any class of person in the community does deserve remission of tax, if such remission is possible, I do submit the occupier of land is such a person.

Then take the person with a fixed income. Generally the people who have been living in that way are widows who have to maintain families, or the man who is retired from business, whose life-work is done. I do venture to say that it is an intolerable hardship to those people to have their Income Tax raised from 1s. to 6s. in the £. These people are deprived of the ordinary luxuries or amenities of life to a very great degree. Take another very large class—the ordinary person who pays on his earned income. To take 6s. out of every £ a man earns is having a mental effect on his energy. It is sapping his vital energy. He says, "I cannot go on working to the same extent I did before, if the State is going to take 6s. out of every £ I earn." During the War the Income Tax payer recognised that money must be raised, and he paid it cheerfully, and went on as best he could. Now we are settled down in times of peace, I venture to say it is desirable, in the interests of the State, that some inducement should be offered to the men who really drive the wheels of industry, who by their energy and by their skill are the directors and movers of our commercial machinery, and I think it would pay the Chancellor of the Exchequer, and would encourage them to put more life into their industry, if they knew there was a chance of getting some abatement of Income Tax, realising it now, and taking that as a precursor of what is to come.

8.0 P.M.

Lastly, so far as the encouragement of trade is concerned, there is another point. The Income Tax may be looked at now, having got to this enormous size, as a tax that is capable of being passed on to the consumer. It is an undoubted fact, with Income Tax standing at this huge figure, that the higher class man in business takes it into account in fixing salaries. Salaries have to be increased very largely, not only on account of the cost of living, but also on account of the increased Income Tax. He may be able to hand it on in the price of goods, and, if he does, the general consumer suffers. I think it is a view that is not sufficiently realised, that one of the items of cost in the price of a retail article is so much of the Income Tax paid by the manufacturer and the retailer, and it seems to me that if this tax could be reduced, as suggested by the Proposer of the Amendment, it would ultimately tend to a reduction in the price of goods to the consumers. On the other point, as to whether the Chancellor of the Exchequer is in a position to meet this, the Proposer has dealt extremely fully with that, and I do not propose to enter into it in any detail; but it does appear from the balance sheet that the Chancellor of the Exchequer has already budgeted for, and expects to have, a surplus of £84,000,000 on his ordinary Budget, and £93,000,000 on his extraordinary Budget. It is quite true, and I think the Financial Secretary to the Treasury pointed it out today, that he has this year to meet a Variety of heavy calls upon this surplus. After these calls have been made he expects to have in hand a surplus of some £80,000,000 or thereabouts. I do not quite follow what he said, that a 1d. in the Income Tax amounts to £5,000,000. I think he must be wrong there, because the total amount of Income Tax that is to be raised this year at 6s. in the £, including Super-tax, only amounts to £410,000,000. But I leave it at that. It does seem to me that the balance of the surplus he has budgeted for is enough to meet this reduction of taxation for the year.

I desire to support the Amendment, but from a rather different point of view to that of the Proposer. I am not in entire agreement with his suggestions, that is to say, with his rosy optimism as regards the revenue of the coming year. I do not think that the Chancellor of the Exchequer has been too conservative in his Estimates, especially seeing the strike is not settled; I am afraid really that we must think that the Estimates, if anything, are not conservative enough. My reason for supporting the Amendment is that I believe the essential thing for the nation at the present time is to save money. Sixpence off the Income Tax is not much. I should prefer it to be a great deal more. But I believe that that saving to the individual will mean more than if the money is given to the Government. I believe the individual has a better chance of saving the money, and is more likely to do so, than the Government if they collect the amount in taxation.

I also hold that so long as the Government are able to take money in the way they have been doing, so long as they are allowed to collect it they will not reduce expenditure in the way we hope they will do. It all comes back to the point of expenditure. The Government must reduce expenditure before they can reduce the Income Tax, even by 6d. That is the only possible way of reducing the Income Tax—to reduce expenditure first. I should like to take one point referred to, that of the Civil Service bonus. I have spoken a good deal on that question, and pointed out the terrible hardship to the taxpayer in view of the various Estimates that we have had before us. But the Civil Service bonus is calculated on a six months' basis, and although the cost of living may be going down at the present time it will be many months before a new calculation is made, and before there is any chance of relief in this matter to the taxpayer. The calculation will then be made on the past six months, and again the taxpayer will have to pay. I do not think we can look forward with any hope from these various points of view to a reduction of the Income Tax of 6d. I rise this evening simply to point out, as I have many times, that the only possible chance of reduction in the Income Tax, or indeed in any tax, or any form of taxation, is a reduction of expenditure. Until the House insists on the reduction of expenditure, we cannot hope for any reduction of taxation.

Opinions of hon. Members have been put forward with moderation and some of the views expressed on the Amendment must to a certain extent be taken by the Government. With so much that has been said, anybody with any comprehension at all of the present state of affairs, and in view of the War burdens of the taxpayer, could not possibly be other than in full and complete agreement. The enormous and crushing burden of the Income Tax, and the quite opposite burden in another direction of indirect duties—in these two points—the most pressing questions of all questions of the day—over-expenditure by the nation and of constant over-taxation are making themselves felt. The constant duty of any responsible administration must be the reduction of expenditure and the consequent reduction of taxation.

Let me come to the proposal put before the House by the hon. Member for Wood Green (Mr. Locker-Lampson). Here, again, with many of his propositions I should hope I could agree, though I should hope that no prudent man would act upon his optimistic view at the present time. He told us that the Government had under-estimated the revenue likely to be derived this year. [HON. MEMBERS: "No, no!"] It was so, though there would seem to be an acute difference of opinion amongst Members of the House. The constant tenor of the Debate during the first two days of our discussion was to force upon our attention that an over-estimate of revenue had been made. Now it would appear it is under-estimated! I think it is unlikely that an error has been made in one direction or the other. The hon. Member for Wood Green desired to encourage us to think that we should get more money than we at present expect, by a trade revival, the prospect of which he held out. I join in the most sincere and earnest hope that it may be so. At the moment, however, the outlook to most people, it seems to be recognised, is certainly not in that direction. The outlook shared by most people is that the trade revival, which we all so ardently desire to see, may be delayed. Let us hope it may not be so, but I do think, in view of the difficulty of foreseeing what may happen exactly, that there is only one prudent course to follow, and that is to estimate on the three bad months, which these Estimates are based upon so far as the calen- dar year is concerned, and the like of which may continue throughout the year. Anything which you get in addition to that is to the good, and this must refer to very many of those considerations advanced by the hon. Gentleman.

Let me refer next to the possible series of reductions of expenditure, and in particular to the reduction of war bonus. This matter stands on exactly the same ground as the others, on the ground of trade and employment. If things go well, if prices fall, and the cost of living falls, the bonus will go down, although it has to be remembered that the actual bonus lags behind the cost of living. So even an improvement will not make for its immediate fall or its immediate effect upon current expenditure. The possibility of a fall of the bonus depending upon a general improvement is one which one may desire, but it would be most unwise to discount it in advance. The other and more political considerations to which the hon. Gentleman referred were the possibility of the saving of expenditure upon Ireland and even more the possibility of further receipts being received from German reparations.

The House will remember that this year, as in previous years, in making the Budget forecast the Chancellor of the Exchequer did not take into revenue and pecuniary account the amount of reparations. I venture to repeat, and to submit to the House, that in a matter where we know there have been such great delays as that, and attended by so many thronging political difficulties, the prudent course is, while hoping for the best, not to make any arithmetical allowance. Let us suppose that the best expectations put forward by the Mover of the Amendment are realised. What then? Suppose we get more in receipt and spend less? If no reduction be made in taxation what would happen? What would happen would be this, that there would be a bigger surplus standing for the reduction of debt and for the other contingent claims which have already been so frequently described in the course of these Debates. Whatever sums are gained will stand for surplus. Every one of them will accrue indirectly to the taxpayer in drawing up the Budget next year. That, I think, is the real answer and the practical answer to such proposals as this. Do not let us, as my right hon. Friend said in his opening speech—do not let us count our chickens before they are thatched. Let us hope that all these improvements may be made, but do not let us discount them in advance. Let us make provision for what we believe to be the reasonable outlook and expenditure, and not take a rash view.

If any additional income falls in this way, the monetary benefit of the gain and saving is always shown upon the surplus, and it goes indeed to the good of the taxpayer in the coming Budget. If it has been so great as to make a reduction within the limits of possibility, then the reduction is made in the following year. I do feel it is essential, when considering such a proposal, to bring the minds of hon. Members to what was said in the Budget speech about the prospects for next year. The prospects are such as cannot be confronted unless every possible means of fortifying the revenue and reducing expenditure be undertaken in the course of the coming year to enable us to meet the most severe pinch of expenditure which may be expected to come. In view then of the circumstance that it is proposed in the course of this year that no more provision for revenue is to be made than is needed, and that it is both necessary and essential to meet our ascertained requirements and provide against contingencies; and in view of the circumstance that fortifications must be maintained for next year, it would be unwise to pledge ourselves to a reduction of taxation which even this year we might discover left us with an unduly small margin for the reduction of debt, and which next year we might find to have been a too early anticipation, would then have to be met by increased taxation.

I feel that the reply which has been made by the Secretary to the Treasury was what most of us expected, that is in the light of national finance at the moment. I have been so very often in recent times in agreement with my hon. Friend that I regret to be in opposition to the form in which he has made this proposal. I cannot help thinking that he would have had a slightly better chance of success if he had pressed for some rearrangement in the structure or in the incidence of the Income Tax up to incomes of £2,000 per annum. After all, the rate is effective at 6s. in the pound on only what we should call the higher range of income. Up to at least £2,000 per annum a lower rate, and in most cases a substantially lower rate, is in operation, so that it is a little misleading to talk broadly and generally of an Income Tax at 6s. in the pound. From the point of view of accumulation and the adverse effects of high taxation, most hon. Members will see that in this country a very great deal of accumulation is done by people of comparatively small income, and it then becomes our duty to ascertain whether we could not better meet this situation by some change in the scale of the tax up to £2,000, rather than by a general reduction from 6s. to 5s. 6d. On that point I still hope that my hon. and gallant Friend opposite will consider some of the arguments we have advanced.

Income may be divided for this purpose into three classes: (1) incomes up to £400 per annum; (2) incomes between £400 and £2,000 per annum; and (3) incomes over £2,000 per annum. It is strictly true, or very nearly true, to say at the present time that in the case of a married couple with three or four children enjoying the usual abatements and allowances as much as £400 per annum may be earned without any liability to Income Tax at all. If we take the range of incomes up to £400 per annum, what we require far more urgently is an improvement in the rates of allowances for widowers where they require to engage housekeepers and others, and there should be an allowance for certain classes of dependants. These are necessary in cases of incomes up to £400 per annum.

If we take incomes between £400 and £2,000, and take the position with what we should call a typical family at £2,000 per annum, we find that, broadly speaking, we do not make a sufficient allowance for the extra burdens which have to be carried by those who are bringing up children. If I remember the figures accurately, on an earned income of £2,000 in the case of a married couple and three children eligible for abatements and allowances, the tax is round about £435. For a married couple with no children on the same earned income of £2,000 the tax is approximately £411. No hon. Member will suggest that the difference on that range of income in those circumstances is sufficiently great to make proper allowance for the extra burden of those who have three children to rear and educate. That appears to me to be far more important than the reduction which my hon. Friend has proposed. It is in the hope that the hon. and gallant Gentleman opposite, who, after all, was so very recently a private Member, and may not be deaf to the appeals of private Members, will consider this rearrangement in certain classes up to £400 in the first place and up to £2,000 in the second place, that I press this argument on this occasion. I think we have more chance of being considered under that head than in any plea for a reduction from 6s. to 5s. 6d. in the pound.

I should like to say a very few words with regard to the particular Amendment before the House. I should very much desire if the finances of the country were in such a position as to permit it to be able to reduce our Income Tax. That would be a very satisfactory condition of affairs; but with the present position of our expenditure it appears to me to be quite impossible to reduce the Income Tax. The reason for this is that the state of the trade of the country is not able to bear the strain of raising such a heavy revenue as is proposed. Sometimes I have wondered how those who are responsible for the collection of taxes are able to gauge the possibilities of trade to pay all these taxes. What I said in the House a few days ago I repeat now with regard to the possibility of trade and the country generally giving to the Chancellor of the Exchequer in the coming year £410,500,000. I said then I believed that the Income Tax Commissioners were perfectly right in their calculation that so far as the figures they had before them went. But the figures were based on a three years' average in times of prosperity. It was therefore simply a matter of calculation. But I also pointed out to the House that we were now in a year of very serious depreciation of stocks of all kind, and confronting the traders of this country this year there is undoubtedly very serious loss. In spite of that, the traders are called upon, and the whole community is called upon to pay to the Government £410,500,000 Income Tax which has been computed on a three years' return. If the Government think of any particular trade, say the trade giving us a great deal of trouble at the present moment, the coal industry, or the wool trade, the leather trade, the cotton trade, or the linen trade, or in fact any or all of the staple trades of this country, they must know perfectly well that for the past six months nothing but depreciation has been taking place, and that for some time to come depreciation must take place until articles reach a price which will make them saleable all over the world.

Our trouble is that everything is too dear. We are confronted with falling prices and depreciation, and what traders considered to be their capital is now becoming a vanishing property. That capital consists of their machinery, their buildings, and a large amount of stock, but all is rapidly depreciating, and this will tend at the end of their accounting period to show a very substantial loss; yet in this year of substantial losses, they will be called upon to pay to the Government £410,500,000, a charge based on a three years' average in a period of great prosperity. I think the Government ought to have considered this question much more carefully than they appear to have done. The Budget estimate under this head last year was £385,000,000. In this year of depreciation and loss it is £410,500,000. If those responsible for the finances of the country had looked more carefully into that point of view it would have been much better for all of us. Where is the country going to get this money from? What is capital now? Some people talk about capital as if it consisted of so many Treasury notes locked up in a safe, or so much gold. But capital now is machinery, buildings, depreciated stocks, and all with overdrafts at the bank. We all know what is the state of trade in this country at the moment. It is quite possible that £300,000,000 out of the £410,500,000 will have to be borrowed by traders in this year of loss from their bankers. Is not this a serious outlook for this country? Is it not extraordinary that in a year of depreciated stocks and capital, traders should be called upon to pay all this money? I know the money must be had, but surely the Government might have looked much more carefully into the condition of trade before they asked for this large amount. It is the duty of every Member of this House to point out to the Government, indeed it is as much our duty as it is the duty of the Government to insist upon reduction of expenditure, for the only thing that can save this country and put its finances on a prosperous footing is economy.

I do not agree with the hon. Member who said that the Treasury had under-estimated the national income for the coming year. I think quite the reverse is the case, and surely I may claim as a supporter of that view the Secretary of State for India, for nobody knows better than he the condition and prospects of our export trade to India, which is one of the best customers of the country. That trade to-day is in a state of stagnation; even if business men in this country receive orders from India they are very dubious about executing them, because they are doubtful if they will obtain payment. The same description applies to trade in other parts of the British Empire, There is stagnation almost everywhere, while as to Central Europe the conditions are even worse. Therefore, when the suggestion is made that the Treasury have under-estimated the possibilities of trade and revenue, I can only say in my opinion quite the reverse is the case. Personally, I think they are rather over sanguine as to the results of commercial trading as far as this country is concerned, and I do not know of any way of bringing pressure to bear on the Government to economise otherwise than by refusing to give them the amount which they are demanding. No other course will achieve our object. The pressure upon the Government from every Government Department is so great and every Department can show so much justification for its large staff and its heavy expenditure that the Ministry find themselves in a great difficulty. Every business man knows the demands made upon him by his own department. He knows how difficult it is to resist them, but at any rate he can decide for himself. He can say, "So much will I spend, and no more." But so long as the Minister at the head of a Department is able to go to the Exchequer, and to fall back upon that, he says, quite rightly, "I will do my best to get this money if I can persuade the Treasury to agree." Therefore he goes to the Treasury and puts what pressure he can upon it. While that system obtains it is evident that some check or pressure must be brought to bear on the Treasury, and I know of none greater than for the Treasury to say, "So much shall you spend, and no more." The Treasury can say it is willing to consider the views of the various Departments and to give whatever money is available to those who show the greatest necessity. Anything short of that is a sheer waste of time, because, while the Treasury know that the House of Commons will give them what they want, they respond to the pressure of the different Ministers. Nothing, therefore, will be effective except some action such as that which my hon. Friend proposes, namely, the setting of a limit. The limit which he suggests is lenient enough, and if he would go further I would go with him. It is absolutely imperative that the heavy taxation in this country should be brought down. Only a few days ago an important export house transferred their headquarters from London to Switzerland. They were doing a large business, and brought all their trade here, but this heavy taxation all related to matters outside this country, and they decided that it was no longer possible or convenient for them to pay these large amounts. They have, therefore, transferred en bloc from London to Berne, where they can avoid this very heavy taxation. I have reason to believe that there are very many such cases, and they will increase in the future. That kind of thing, in my judgment, will not be lessened unless it be by the action of this House, and the House can best accomplish that object by limiting the amount which it is prepared to grant. Therefore, if my hon. Friend carries this to a Division, I shall support him. It is no use our preaching economy from these Benches unless we are prepared to go to a Division and let the Government know that we are serious.

The Mover and Seconder of this Amendment, in my judgment, rather misled the House. When the hon. Member (Mr. Locker-Lampson) was moving the Amendment, I was under the impression that all Income Tax payers were affected, but when I listened further I found that the reduction would not in any way affect the small, poor man, but only those who were better able to pay.

I beg the hon. Member's pardon. I did say specially that it would only mean a reduction of 3d. to the person who was paying only 3s. in the £.

I thank the hon. Member for his explanation, but at the same time it does not alter my objection to the Amendment. I am absolutely against indirect taxation, and in favour of direct taxation. We are faced with the fact that the Government have to find the money, and I think that direct taxation is the fairest method. I remember that, earlier in the Debate, when an Amendment was moved which would have given some relief, those who are supporting this reduction of the Income Tax, which will not affect the poor at all, went into the Lobby against us. My objection to the Amendment was increased when an hon. Member opposite supported it on the ground that it affected the land and those who farm the

land. If there is any class in this country who have shifted the burden of taxation from their own shoulders, it is the farmers of this country, until the last Budget, which made them pay on their rent and did not give them such a loophole to take burdens off their own shoulders and put them on to other folks. Much as I dislike voting with the Government, I shall be obliged to do so on this occasion, and I hope they will stick to their guns. In my judgment, this Amendment is a retrograde one, putting the burden on to those shoulders which are least able to bear it, and reducing it to those who have plenty in their coffers.

Question put, "That the words 'first six months of the' be there inserted in the said Resolution."

The House divided: Ayes, 25; Noes, 154

Division No. 90.]

AYES.

[8.45 p.m.

Bowerman, Rt. Hon. Charles W.

Hickman, Brig.-General Thomas E.

Surtees, Brigadier-General H. C.

Bramsdon, Sir Thomas

Hodge, Rt. Hon. John

Thomas, Brig.-Gen. Sir O. (Anglesey)

Campbell, J. D. G.

Hogge, James Myles

Waterson, A. E.

Cecil, Rt. Hon. Lord R. (Hitchin)

Holmes, J. Stanley

White, Lieut.-Col. G. D. (Southport)

Entwistle, Major C. F.

Johnstone, Joseph

Wood, Major M. M. (Aberdeen, C.)

Galbraith, Samuel

Kenworthy, Lieut.-Commander J. M.

Gritten, W. G. Howard

Kenyon, Barnet

TELLERS FOR THE AYES.—

Hall, Lieut.-Col. Sir F. (Dulwich)

Murray, Dr. D. (Inverness & Ross)

Mr. G. Locker-Lampson and Mr. Kiley

Harmsworth, Hon. E. C. (Kent)

Pinkham, Lieut.-Colonel Charles

Henderson, Rt. Hon. A. (Widnes)

Poison, Sir Thomas

NOES.

Agg-Gardner, Sir James Tynte

Doyle, N. Grattan

James, Lieut.-Colonel Hon. Cuthbert

Allen, Lieut.-Colonel William James

Edgar, Clifford B.

Jameson, J. Gordon

Amery, Lieut.-Col. Leopold C. M. S.

Edwards, G. (Norfolk, South)

Jesson, C.

Armitage, Robert

Elliot, Capt. Walter E. (Lanark)

Jodrell, Neville Paul

Astbury, Lieut.-Commander F. W.

Eyres-Monsell, Commander B. M.

Johnson, Sir Stanley

Balfour, George (Hampstead)

Evans, Ernest

Jones, G. W. H. (Stoke Newington)

Barlow, Sir Montague

Fell, Sir Arthur

Jones, Henry Haydn (Merioneth)

Barnes, Rt. Hon. G. (Glas., Gorbals)

Fraser, Major Sir Keith

Jones, J. T. (Carmarthen, Lianelly)

Barnett, Major R. W.

Fremantle, Lieut.-Colonel Francis E.

Kennedy, Thomas

Barnston, Major Harry

Ganzoni, Captain Sir F. J. C.

King, Captain Henry Douglas

Barrand, A. R.

Gibbs, Colonel George Abraham

Lewis, Rt. Hon. J. H. (Univ., Wales)

Bell, Lieut.-Col. W. C. H. (Devizes)

Gilmour, Lieut.-Colonel Sir John

Lewis, T. A. (Glam., Pontypridd)

Benn, Capt. Sir I. H., Bart.(Gr'nw'h)

Glanville, Harold James

Lort-Williams, J.

Bethell, Sir John Henry

Graham, R. (Nelson and Colne)

Lyle, C. E. Leonard

Betterton, Henry B.

Green, Joseph F. (Leicester, W.)

Lyle-Samuel, Alexander

Birchall, Major J. Dearman

Gregory, Holman

M'Curdy, Rt. Hon. C. A.

Bird, Sir William B. M. (Chichester)

Greig, Colonel James William

M'Donald, Dr. Bouverie F. P.

Blades, Capt. Sir George Rowland

Grundy, T. W.

Mackinder, Sir H. J. (Camlachie)

Blair, Sir Reginald

Hacking, Captain Douglas H.

Mallalieu, F. W.

Bowles, Colonel H. F.

Hamilton, Major C. G. C.

Malone, Major P. B. (Tottenham, S.)

Bowyer, Captain G. E. W.

Hannon, Patrick Joseph Henry

Manville, Edward

Breese, Major Charles E.

Harmsworth, C. B. (Bedford, Luton)

Martin, Captain A. E.

Bridgeman, Rt. Hon. William Clive

Hayward, Major Evan

Middlebrook, Sir William

Broad, Thomas Tucker

Hennessy, Major J. R. G.

Mitchell, William Lane

Buckley, Lieut.-Colonel A.

Henry, Denis S. (Londonderry, S.)

Moles, Thomas

Cairns, John

Herbert, Dennis (Hertford, Watford)

Montagu, Rt. Hon. E. S.

Casey, T. W.

Hewart, Rt. Hon. Sir Gordon

Moore, Major-General Sir Newton I.

Chamberlain, N. (Birm., Ladywood)

Hilder, Lieut.-Colonel Frank

Morden, Lieut.-Col. W. Grant

Cobb, Sir Cyril

Hills, Major John Waller

Moreing, Captain Algernon H.

Cockerill, Brigadier-General G. k.

Hood, Joseph

Morgan, Major D. Watts

Conway, Sir W. Martin

Hopkins, John W. W.

Morison, Rt. Hon. Thomas Brash

Coote, Colin Reith (Isle of Ely)

Hopkinson, A. (Lancaster, Mossley)

Morrison-Bell, Major A. C.

Davies, Sir Joseph (Chester, Crewe)

Hume-Williams, Sir W. Ellis

Munro, Rt. Hon. Robert

Davies, Sir William H. (Bristol, S.)

Hunter, General Sir A. (Lancaster)

Murray, John (Leeds, West)

Denniss, Edmund R. B. (Oldham)

Hurst, Lieut.-Colonel Gerald B.

Myers, Thomas

Dockrell, Sir Maurice

Irving, Dan

Neal, Arthur

Newman, Sir R. H. S. D. L. (Exeter)

Sexton, James

Waring, Major Walter

Nicholson, Reginald (Doncaster)

Shaw, William T. (Fortar)

Whitla, Sir William

Parker, James

Smith, Sir Allan M. (Croydon, South)

Williams, Aneurin (Durham, Consett)

Parry, Lieut.-Colonel Thomas Henry

Smith, Sir Harold (Warrington)

Williams, Lt.-Com. C. (Tavistock)

Pease, Rt. Hon. Herbert Pike

Stanier, Captain Sir Seville

Williams, Col. P. (Middlesbrough, E.)

Pennefather, De Fonblanque

Stanley, Major Hon. G. (Preston)

Williamson, Rt. Hon. Sir Archibald

Perkins, Walter Frank

Stewart, Gershom

Wills, Lieut.-Colonel Sir Gilbert

Pownall, Lieut.-Colonel Assheton

Strauss, Edward Anthony

Wilson, Daniel M. (Down, West)

Pratt, John William

Sturrock, J. Leng

Wilson, James (Dudley)

Prescott, Major W. H.

Sutherland, Sir William

Wise, Frederick

Purchase, H. G.

Taylor, J.

Worsfold, Dr. T. Cato

Randies, Sir John S.

Thomson, F. C. (Aberdeen, South)

Yeo, Sir Alfred William

Richardson, Alexander (Gravesend)

Thomson, Sir W. Mitchell- (Maryhill)

Young, Lieut.-Com. E. H. (Norwich)

Rose, Frank H.

Thorne, W. (West Ham, Plaistow)

Roundell, Colonel R. F.

Turton, E. R.

TELLERS FOR THE NOES.—

Samuel, Samuel (W'dsworth, Putney)

Wallace, J.

Colonel Leslie Wilson and Mr. Dudley Ward.

Scott, A. M. (Glasgow, Bridgeton)

Ward, Col. J. (Stoke upon Trent)

Question, "That this House doth agree with the Committee in the said Resolution," put, and agreed to.

Fifth Resolution read a Second time.

Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."

It would be more convenient if this matter is discussed when we reach the Finance Bill, but I feel, having regard to the attitude which some of us took last year, in which we were supported by a large section of the House, that these Clauses should not be passed without protest. Section 43 of the Income Tax Act, which is to be discontinued according to this Resolution, enabled a taxpayer to be assessed upon the three years' average ending in the year of assessment instead of on the three years' average ending in the year before the assessment. It was a very important concession if a man's income had fallen. Section 44 was still more important: It enabled a man, if his actual income was 10 per cent. below his income on the three years' average, to substitute his actual income instead of the three years' average as his assessment. Then the second paragraph, which repeals paragraph 1 of Rule 3 of the Miscellaneous Rules, is what in commercial circles is known as the Specific Cause Rule. A large number of commercial firms are now considering that under the Income Tax Act they have a right to plead the exceptional slump in trade as a specific cause which shall enable them to pay Income Tax on their actual income instead of upon the three years' average. These Clauses are very important privileges, which I hope the House will consider very carefully when the Finance Bill comes on, and it will probably be more convenient to discuss them on the Finance Bill itself, because then we shall know whether the Government intend to drop the Revenue Bill altogether, and if they do the retention of these Clauses is more important than ever. But, having regard to the fact that the throwing over of the Revenue Bill is only rumour at the moment—unless, of course, the Financial Secretary can tell us to-night whether it is true or not—it would be unwise and waste of time to base arguments upon its being thrown over. I want to ask the House to register its protest by voting against these provisions.

The finest resource of the Chancellor of the Exchequer is the Income Tax payer, and those who pay Income Tax are, at least, certain of this fact, that the Government take the maximum that they can take out of the man who is earning income over the Income Tax limits.

My hon. and gallant Friend has been unfortunate. In any event, it is true that to a large extent that class of the community constitute the backbone of the resources of the Chancellor of the Exchequer. That class of the community is hit very much harder than many other classes who cry out very much louder. They have certain responsibilities to maintain which it is very difficult for them to shake off, and if, therefore, they are pressed in the matter of these averages it is a question as to how far they can stand it. My hon. Friend has asked a question in regard to which we are entitled to an answer before we go to a Division. Does the Government intend to proceed with the Revenue Bill? Because under the Revenue Bill certain provisions are made which make a difference to the Finance Act in the matter of the three years' average. On that we are entitled to information before we go to a Division, and I hope the Financial Secretary to the Treasury will be able to give the House that information.

I entirely agree with the hon. Member for North-west Derby (Mr. Holmes) that this is a matter which had better be left to discussion on the Finance Bill. To a certain degree it is technical, and it may be more usefully discussed when we have the actual Clause before us, which will put in precise words what at present is only a rather summary Resolution. The House has apprehended that this matter relates to old war reliefs, which were granted to those who were suffering from exceptional disadvantage due to war conditions. This I should put rather differently from the hon. Member for North-west Derby. I should put it that the House was under the impression that last year we got rid of these war reliefs, Sections 43 and 44, but doubts have arisen as to whether the House succeeded in doing so or not. I should like to point out that it will be found, in investigating the nature of these reliefs, that Section 43 is, I should have thought, the more important of the two from the point of view of revenue, but perhaps Section 44 may be more important from

9.0 P.M.

the point of view of the taxpayer. It depends upon the point of view. As to the second provision, of which we are now passing the preliminary Resolution—I should map out the position somewhat differently from that in which it was. mapped out technically by my hon. Friend—I should say that the Clause which will finally be introduced in consequence of this Resolution is a Clause to make it clear that the law is as everybody has always supposed it was ever since the year 1842. There, again, if there is any issue between various shades of opinion in the House, we can most usefully arrive at it in discussion on the Finance Bill. As regards the question raised by the hon. Member for East Edinburgh (Mr. Hogge), I know that he will not expect me, in the absence of the Chancellor of the Exchequer, to make any announcement as to the intention of the Government.

We do. The Chancellor of the Exchequer ought to be here.

Question put, "That this House doth agree with the Committee in the said Resolution."

The House divided: Ayes, 141; Noes, 35.

Division No. 91.]

AYES.

[9.0 p.m.

Agg-Gardner, Sir James Tynte

Elliot, Capt. Walter E. (Lanark)

Jones, Henry Haydn (Merioneth)

Allen, Lieut.-Colonel William James

Eyres-Monsell, Commander B. M.

Jones, J. T. (Carmarthen, Lianelly)

Amery, Lieut.-Col. Leopold C. M. S.

Evans, Ernest

King, Captain Henry Douglas

Armitage, Robert

Falcon, Captain Michael

Lewis, Rt. Hon. J. H. (Univ., Wales)

Astbury, Lieut.-Commander F. W.

Fell, Sir Arthur

Lewis, T. A. (Glam., Pontypridd)

Atkey, A. R.

Fraser, Major Sir Keith

Lort-Willlams, J.

Balfour, George (Hampstead)

Fremantle, Lieut.-Colonel Francis E.

Lyle, C. E. Leonard

Barlow, Sir Montague

Ganzoni, Captain Sir F. J. C.

M'Curdy, Rt. Hon. C. A.

Barnes, Rt. Hon. G. (Glas., Gorbals)

Gibbs, Colonel George Abraham

Mackinder, Sir H. J. (Camlachie)

Barnett, Major R. W.

Gilmour, Lieut.-Colonel Sir John

Manville, Edward

Barnston, Major Harry

Green, Joseph F. (Leicester, W.)

Martin, Captain A. E.

Barrand, A. R.

Gregory, Holman

Middlebrook, Sir William

Bell, Lieut.-Col. W. C. H. (Devizes)

Greig, Colonel James William

Mitchell, William Lane

Benn, Capt. Sir I. H., Bart. (Gr'nw'h)

Guest, Capt. Rt. Hon. Frederick E.

Molson, Major John Elsdale

Bethell, Sir John Henry

Hacking, Captain Douglas H.

Montagu, Rt. Hon. E. S.

Betterton, Henry B.

Hall, Lieut.-Col. Sir F. (Dulwich)

Moore, Major-General Sir Newton J.

Birchall, Major J. Dearman

Hamilton, Major C. G. C.

Morden, Lieut.-Col. W. Grant

Bird, Sir William B. M. (Chichester)

Hannon, Patrick Joseph Henry

Moreing, Captain Algernon H.

Blades, Capt. Sir George Rowland

Harmsworth, C. B. (Bedford, Luton)

Morison, Rt. Hon. Thomas Brash

Bowerman, Rt. Hon. Charles W.

Hennessy, Major J. R. G.

Munro, Rt. Hon. Robert

Bowles, Colonel H. F.

Henry, Denis S. (Londonderry, S.)

Murray, John (Leeds, West)

Bowyer, Captain G. E. W.

Herbert, Dennis (Hertford, Watford)

Neal, Arthur

Breese, Major Charles E.

Hewart, Rt. Hon. Sir Gordon

Newman, Sir R. H. S. D. L. (Exeter):

Bridgeman, Rt. Hon. William Clive

Hickman, Brig.-General Thomas E.

Nicholson, Reginald (Doncaster)

Broad, Thomas Tucker

Hilder, Lieut.-Colonel Frank

Parker, James

Buckley, Lieut.-Colonel A.

Hills, Major John Waller

Parry, Lieut.-Colonel Thomas Henry

Campbell, J. D. G.

Hood, Joseph

Pease, Rt. Hon. Herbert Pike

Casey, T. W.

Hopkins, John W. W.

Pennefather, De Fonblanque

Cautley, Henry S.

Hopkinson, A. (Lancaster, Mossley)

Perkins, Walter Frank

Chamberlain, N. (Birm., Ladywood)

Hume-Williams, Sir W. Ellis

Pinkham, Lieut.-Colonel Charles

Cobb, Sir Cyril

Hunter, General Sir A. (Lancaster)

Pownall, Lieut.-Colonel Assheton

Conway, Sir W. Martin

Hurst, Lieut.-Colonel Gerald B.

Pratt, John William

Coote, Colin Reith (Isle of Ely)

James, Lieut.-Colonel Hon. Cuthbert

Prescott, Major W. H.

Davies, Sir Joseph (Chester, Crewe)

Jameson, J. Gordon

Randies, Sir John S.

Denniss, Edmund R. B. (Oldham)

Jesson, C.

Richardson, Alexander (Gravesend)

Doyle, N. Grattan

Jodrell, Neville Paul

Roberts, Samuel (Hereford, Hereford)

Edgar, Clifford B.

Johnson, Sir Stanley

Rose, Frank H.

Roundell, Colonel R. F.

Sutherland, Sir William

Whitla, Sir William

Samuel, Samuel (W'dsworth, Putney)

Taylor, J.

Williams, Lt.-Com. C. (Tavistock)

Scott, A. M. (Glasgow, Bridgeton)

Thomas, Lieut.-Col. Sir O. (Anglesey)

Wills, Lieut.-Colonel Sir Gilbert

Shaw, William T. (Forfar)

Thomas-Stanford, Charles

Wilson, Daniel M. (Down, West)

Smith, Sir Harold (Warrington)

Thomson, F. C. (Aberdeen, South)

Wise, Frederick

Stanier, Captain Sir Seville

Thomson, Sir W. Mitchell- (Maryhill)

Worsfold, Dr. T. Cato

Stanley, Major Hon. G. (Preston)

Turton, E. R.

Yeo, Sir Alfred William

Stewart, Gershom

Wallace, J.

Young, Lieut.-Com. E. H. (Norwich)

Strauss, Edward Anthony

Ward, Col. J. (Stoke upon Trent)

Sturrock, J. Leng

Waring, Major Walter

TELLERS FOR THE AYES.—

Surtees, Brigadier-General H. C.

White, Lieut.-Col. G. D. (Southport)

Colonel Leslie Wilson and Mr. Dudley Ward.

NOES.

Benn, Captain Wedgwood (Leith)

Henderson, Rt. Hon. A. (Widnes)

Murray, Dr. D. (Inverness & Ross)

Blair, Sir Reginald

Hodge, Rt. Hon. John

Myers, Thomas

Bramsdon, Sir Thomas

Hogge, James Myles

Sexton, James

Cairns, John

Irving, Dan

Thorne, G. R. (Wolverhampton, E.)

Cecil, Rt. Hon. Lord R. (Hitchin)

Johnstone, Joseph

Thorne, W. (West Ham, Plaistow)

Edwards, G. (Norfolk, South)

Jones, G. W. H. (Stoke Newington)

Waterson, A. E.

Galbraith. Samuel

Kennedy, Thomas

Williams, Aneurin (Durham, Consett)

Glanville, Harold James

Kenworthy, Lieut.-Commander J. M.

Wilson, James (Dudley)

Graham, R. (Nelson and Colne)

Kenyon, Barnet

wood, Major M. M. (Aberdeen, C.)

Gritten, W. G. Howard

Kiley, James D.

Grundy, T. W.

Locker-Lampson, G. (Wood Green)

TELLERS FOR THE NOES.—

Harmsworth, Hon. E. C. (Kent)

Maclean, Nell (Glasgow, Govan)

Mr. Holmes and Major Entwistle.

Hayward, Major Evan

Morgan, Major D. Watts

Sixth Resolution read a Second time.

Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."

I would like to ask the Financial Secretary with reference to what appears to me to be rather unfair incidence of taxation, which I fancy has been brought to the notice of the Treasury, with regard to the accounting period of 84 months, or seven years from one day to another. Take the case of two traders engaged in the same business. One's accounting period might end on the 1st November, 1920, and the other's on the 1st April, 1921. From November to April it is possible, as indeed it is happening at present, that the depreciation of the stock of the second trader has been very considerable. That depreciation continues during the last five months of his accounting period. The result is that he has the advantage of a considerable recoupment of Excess Profits Duty which he has overpaid because of the depreciation of the stock, owing simply to the fact that his accounting period ends so much later than that of the other trader. If the hon. Gentleman cannot give an answer now, I am satisfied to wait until the Finance Bill comes before the House, so that the information may be fully prepared, as I am sure the Treasury sees that the difference in the incidence of taxation in such cases is very serious as between two traders engaged in the same business.

The point raised by the hon. and gallant Gentleman is one of great importance, but I am under the impression that he endeavours to propose to meet it by some special provision with regard to the depreciation of stock after the end of the last accounting period, and I think that the Lord Privy Seal intimated in his Budget speech that those provisions with regard to stock based on the White Paper will soon be disclosed to us. If so it would be more convenient probably to discuss this on the Finance Bill. All I would ask of the Financial Secretary is that he should let us have these provisions as soon as possible, so that we may have plenty of opportunity of discussing them with the traders of the country before we have to deal with them.

My hon. and gallant Friend and my hon. Friend will remember that this matter was referred to by the Lord Privy Seal in introducing the Budget and, after referring to the "White Paper, he explained that these matters have been and still are under careful consideration, with the object of discovering the best means of arranging a final solution. I am not yet able on behalf of my right hon. Friend to make a final statement, but the matter will come up when the statement will be made on the Finance Bill. With reference to the request of the hon. Member for North East Derby, there is a certain complexity in these matters, and the longest possible notice will be given, so that those who are interested may have an opportunity of considering it.

Question put, and agreed to.

Resolution [26th April] reported,

Amendment of Law

"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."

Resolution agreed to.

Bill ordered to be brought in upon the said Resolutions by the Chairman of Ways and Means, the Chancellor of the Exchequer, and Mr. Hilton Young.

Finance Bill,

"to grant certain duties of Customs and Inland Revenue (including Excise), to alter other duties, and to amend the Law relating to Customs and Inland Revenue (including Excise), and the National Debt, and to make further provision in connection with Finance," presented accordingly, and read the First time; to be read a Second time To-morrow, and to be printed. [Bill 90.]

Supply [18th April]

Order read for Consideration of Second and Third Resolutions.

Resolutions reported,

Air Supplementary Estimate, 1921–22

2. "That an additional number of Air Forces, not exceeding 10,000, all ranks, be maintained for the Service of the United Kingdom of Great Britain and Ireland at Home and Abroad, exclusive of those serving in India, during the year ending on the 31st day of March, 1922."

Navy Supplementary Estimate, 1921–22

3. "That an additional number of Officers and Men, not exceeding 25,000, be employed for the Sea and Coast Guard Services borne on the books of His Majesty's Ships and at the Royal Marine Divisions for the year ending on the 31st day of March, 1922."

Second Resolution read a Second time.

Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."

I think there might have been some case made out for calling up the Army Reserves, and we require a little more elucidation from the Secretary of State for Air as to the reason for calling up the Air Force Reserves. Previous discussion of this matter was taken up with consideration of the question of the Army Reserves and their use, and through no fault of the Secretary of State for Air he was unable to give the House his full reason for calling up the Air Force Reserves. Most of these men are highly technical and highly skilled persons. The majority are officers. In no force is the proportion of officers to other ranks as great as in the Air Force. Most of them on the conclusion of the War had gone back to their ordinary callings and businesses and professions, and those businesses will suffer severely while these men are embodied. The reasons given are that these Air Force officers and other ranks are required principally to guard the Air Ministry's property. I take it that that property is ordinarily well guarded. Valuable stores are no doubt properly looked after without calling up the reserves. Of course the men may be required for communication purposes in case of the railways being stopped. Whereas probably the Army Reserves will have to be embodied a little longer, these Air Force Reserves should be disbanded at the earliest possible moment. They are a class apart. I have had one particular case brought to my notice, and that is the case of the camp at Eastchurch, in the island of Sheppey. There is there a camp of several hundreds of these reserves, the great majority of whom are officers. They are mostly men who in private life are engaged in important businesses or in industry. They are kept in camp under most uncomfortable conditions. They do not grumble about that, but they have nothing whatever to do. They do an hour's parade in the morning and the rest of the day they are kicking their heels about in one of the most uninteresting parts of the British Isles. I know the place very well for I was stationed there. For the most part they go away for a long week-end and then they come back. They have no definite duties. Apparently they are not intended to be used for any purpose in connection with the industrial crisis.

Accordingly, when the railway strike was cancelled, a deputation of officers went very respectfully to see the camp commandant and pointed out that, as far as they could gather, their services were not required, and they asked that they should be demobilised. The reply was that the real reason they were there—this was on the authority of the camp commandant, and I do not suggest that he had official justification for saying it—was that they were a demonstration because of the present discussions going on with the German Government. According to witnesses who were present that is what the camp commandant said. When that statement was made they naturally could not press their request. As many as possible of these men should be released. The Secretary of State for Air may find good use for the remainder of the other ranks, but he has far too many officers. He cannot possibly use them as guards on his dumps of stores and supplies all about the country. Very few of them are flying officers; most of them are ground officers. They are mostly educated men holding responsible positions in private life. Owing to their high pay they are costing the country very much more than the ordinary Army Reserves; but as they normally occupy responsible positions in industry and the professions they are a dead loss to the country's earning capacity every day that they are embodied. If the Ministry thought it would lose any dignity by not calling up its Reserves when the Army and Navy Reserves were called up, it was mistaken. To mark my protest against this policy I intend to vote against this Resolution, and I hope hon. Members with a sense of the proprieties and a little sense of humour will support me.

The first thing I should do in defending this Supplementary Estimate is to state shortly how the money has been spent. That is the most important consideration. The additional expenditure on this calling up of the Reserves is £10,000. As regards numbers, it includes 250 officers and 5,800 other ranks. I regret that the current weekly expenditure is as much as £24,500. I give those figures now, as I had not the opportunity of giving them on a recent evening when the Debate came to a rather abrupt end. On the general point raised by the hon. Member who has just spoken, it must be appreciated that the Air Force had no choice but to fall into line with the Government policy in calling up the Reserves of the three Services. Secondly, our contribution is a very small one. Further, the Air Force is the only force capable of performing two very necessary duties. The first duty, always imagining, of course, a time of serious difficulty to the nation in regard to its communications, is the carrying of mails to the important centres when the railways are not running. I think the House will see that that can only be done by air. The only thing capable of carrying mails, should a state of affairs exist in which the railways are not running or the road service is not working, is the aeroplane. The carrying of mails in an aeroplane is as simple as carrying passengers. It will be remembered that we have very few units at home. Out of the total number of squadrons, very nearly three-quarters are serving abroad. Therefore, it became necessary, if we were to carry out a useful service of this kind, to draw upon our reserve machines, and that involved the use of reservists. The second explanation why this particular force was called up was that it is more suitable perhaps than any other to perform wireless communication. The number of stations that we have in connection with our civilian aviation, and secondly, in connection with our ordinary service aerodromes, is very considerable, and if anything were to go wrong with the telegraphic operations of the country we should have these services to fall back upon. It will be seen, therefore, that these men, though small in number, would be very vital to any big scheme for the national well-being in such a time of difficulty as that to which we have been referring.

The third point, the guarding of Government stores, is really more important than the hon. and gallant Gentleman (Lieut.-Commander Kenworthy) appreciates. The quantity of valuable material which we have, the size of the aerodromes which we have to try and protect, the inflammability of the stores, and generally the risk of the storming of an aerodrome and the infliction of on immense amount of damage would be so simple that nothing can be left to chance. A good many of these officers and men therefore are specifically undertaking that duty. Nobody will be more pleased than the Ministry when the time comes that they can be sent back to their homes. Very generous leave has been granted to the reservists, and very great efforts have been made, and I think successfully made, to keep their jobs open for these highly technical and skilled men.

I have not got the exact weekly pay of the reservists, but they are drawing it according to the schedule laid down for this purpose. Of course, in some cases, they are having their jobs kept open for them, and may or may not have made private arrangements with their employers. That is a fairly wide explanation of this Vote, and I hope the House will grant it.

There is one point which has never been cleared up in the explanations offered by any of the three Ministers or Under-Secretaries in charge of these three Votes. We have disposed of the Army, and we are disposing to-night of the Air Service and the Navy. This Defence Force was created for ad hoc purposes, the purpose of dealing with the emergency which was expected to arise out of the coal crisis. The point which has never been satisfactorily explained to the House is this. Why for the first time in the history of this country should a Defence Force require to be raised on the skeleton of the existing Army? We have an Army raised, a Navy raised, and an Air Force raised in this connection. In days gone by, the protection that was offered to property and to life in these circumstances was left, first of all, in the hands of the police, secondly, in the hands of the military should the local police fail to maintain order. Here, for the first time in the history of industrialism in this country, you have a Defence Force modelled on the skeleton of the existing Army, Navy and Air Force. I quite agree that some of the grounds which the Secretary of State for Air has advanced hold a considerable amount of reason. Presumably, if all the railways stopped and all the motor traffic stopped, the only method of communication which would be difficult to interfere with in regard to the carrying of mails would be the Air Service. Presumably, also, the same argument would affect the question of wireless telegraphy. When it comes, however, to a question of protecting air stores in the country, it seems to me to be an extravagant and wrong method to call up the Reservists for an Air Force when you have the whole force of the police of the country to deal with it.

The proof of all these things is in the facts as we know them. If we consider even one of the most desperate industrial crises we have ever had—I think my right hon. and gallant Friend will agree with me that at the present moment there has been no evidence of widespread riot. I believe there have been one or two cases. There was one in Scotland, in the Fifeshire area, which was to some extent serious, and in which, as hon. Members who represent Scotland in this House will probably agree, the driving force was not industrial but political. There has been a similar occurrence in the South Wales coalfield. I want to put this point again, and it is worth our while considering from the point of view of industrial peace in this country. If you want industrial peace it is not wise to provoke industrial revolt. If, on the skeleton outline of the existing armed forces in this country, which are required primarily to resist invasion, and if necessary to go abroad, you create a force then you give these people the idea that sooner or later the Government is going to use it as an argument in an industrial dispute. I do not think that is wise. The wisest course is to pursue the old traditional British practice. These matters before have invariably been dealt with by the police, and the police, who are not armed, have invariably more, influence with riotous crowds than soldiers who are armed. Whenever soldiers have intervened in industrial trouble in this country we have had loss of life. I could mention some cases which are familiar to hon. Members, but I forbear. I am going to Vote against this Resolution for that reason. I have no objection, and I do not think any citizen ought to have any objection to the Government fortifying itself to deal with riot. The Government, however, had the opportunity of calling out the special police. The Special Constabulary dealt with any number of new situations throughout the War, and dealt with them successfully. I do not think anyone will deny that. Quite honestly, what I do not like is that in these great industrial troubles the Government should resort firstly, to the creation of a special force of this kind, and secondly, that they should base it on the skeleton of the existing armed forces in this country. It is a very unwise situation in which to find ourselves, that, if you have on the one side, the citizens of this country organised—whatever view we may take of the rights or wrongs of the dispute—against the Government for the time being in an industrial dispute, they should immediately be up against the armed forces of the Crown. I shall have something to say on the next Vote as to the raising of 25,000 men for the Navy, in the same way as I am dealing with these 10,000 men for the Air Force. I said when the Army Vote was going through, that I could see some reason why the Army should be increased for this particular purpose. I do not see why the Government should have resorted to increasing the Air Force or increasing the Navy. To my view, it is a very unwise step. It is psychologically wrong. It is not likely to conduce to peace, and it is costing the country a great deal of money—£24,000 a week the right hon. Gentleman has said. I believe that as a matter of fact, some of the men who are actually in the Defence Force and receiving the pay of the Government are also employed at their work and drawing their own pay. I do not know whether the right hon. Gentleman will confirm that or not, or whether that is what he means by "generous treatment." I have had communications sent to me on the subject, with which I will not trouble the House, hut which state that members of the Defence Force are at the moment drawing pay from the two sources. That shows the efficiency of these reserves, but could the Government not arrange to recall these men for any special purpose only if the crisis becomes worse? There should be no difficulty in maintaining a sufficiently good service either with mails or anything else when the need arises, but we should at once disband men called to the Defence Force in the Air Service.

I think my hon. Friend is attributing to this Vote some forces which are quite out of it. The Reservists called up have no connection with the Defence Force.

This does affect the Defence Force also. My Friend is quite right with regard to the calling up of the Reserves. No one can make any complaint about that; that is the right of the Government; but this amount of money and this number of men deals with the Defence Force as well as with the Reservists. This is a Vote for 10,000 men, and can my right hon. Friend answer this simple question: Are all the men called up men who are Reservists, or are there any ad hoc men called up for these purposes?

There are practically none at all or just a few other than Reservists. There are between 500 and 600 who would have gone on discharge but for the crisis.

The point made by the hon. Member who spoke last has not been answered by the Secretary of State for Air. The contention was that we were calling up a highly technical class of men to perform duties for which other people at a lower rate of pay are equally well suited. I would have liked to hear from the Minister what air squadrons there are or what aerodromes there are for the purposes he has mentioned. Whatever we may think about the advisability of this way of meeting the industrial crisis, it is a waste of public money to call up men highly trained as mechanics or pilots or wireless operators and pay them at a high rate to guard dumps which might be guarded by Defence Force men. The right hon. Gentleman says the transport of mails must be carried out in certain circumstances by the Flying Corps. If that is so, he should show us that there are in fact aerodromes for the machines. I do not know whether such exist effectively. The point raised by the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy) that we are spending more money than we need spend, by having a higher class of men than is required, is one on which the House would like to have further light.

The hon. Member who has just spoken will admit it is quite conceivable in times of trouble that we may find it necessary to patrol the railways. I submit that if that necessity arose it would be far cheaper to have one aeroplane patrolling hundreds of miles of railway than to keep large numbers of posts a few miles apart. I think the Government are perfectly right to employ the Air Force.

I am surprised by the charge made from this side of the House, and practically admitted by the right hon. Gentleman, that this force embodied for defensive purposes has really no work to do. I gather from the right hon. Gentleman that some of the work they may possibly be put to, is in the carrying of mails. I can suggest a method of providing work for these idle forces which would cost no additional money, and would give these men the satisfaction of knowing they were doing something useful. I think some hon. Members will have already devined the nature of the work I am about to suggest. There are parts of the country which, owing to the War, have been denuded of mail services. These forces have not yet learned how to carry mails, and it would be right to give them some practice. Could they not in the next eight or nine weeks they are to be embodied operate in those parts of the country where the mail services are defective. I am not going to mention any particular parts of the country, but the right hon. Gentleman knows places where they are defective. I think the Minister would be performing a useful service, and would at the same time be giving an excellent training to these men, if he put them on to work of this character in places where they can get experience of all sorts of winds and all sorts of weather. I nave tried almost every Minister on that Bench in regard to this matter, and I now appeal to my right hon. Friend, and if he promises to

carry out my suggestion I shall certainly not vote against this, and I shall try to induce my friends to refrain from voting against it also.

What is the exact meaning of the special leave to which the right hon. Gentleman has referred? Does it mean leave for an indefinite period, and that the man is not to be called up until the situation is more serious? There are many cases of hardship where men are in danger of losing employment and where men are indispensable at the work at which they have been engaged. Will a man be permitted to go back to his employment and not be called up for further service with the Reserves unless the situation becomes much more serious than it is at present?

The terms on which these men are allowed on leave provide for their recall, if the situation renders it necessary.

Must application be made to you, as Minister, or to the officer commanding the corps with which the man is serving?

To the officer commanding the corps.

Question put, "That this House doth agree with the Committee in the said Resolution."

The House divided: Ayes, 173; Noes, 26.

Division No. 92.].

AYES.

[9.45 p.m.

Agg-Gardner, Sir James Tynte

Casey, T. w.

Green, Joseph F. (Leicester, W.)

Allen, Lieut.-Colonel William James

Cautley, Henry S.

Gregory, Holman

Amery, Lieut.-Col. Leopold C. M. S.

Cayzer, Major Herbert Robin

Greig, Colonel James William

Armitage, Robert

Clay, Lieut.-Colonel H. H. Spender

Gritten, W. G. Howard

Astbury, Lieut.-Commander F. W.

Coats, Sir Stuart

Guest, Capt. Rt. Hon. Frederick E,

Atkey, A. R.

Cobb, Sir Cyril

Hacking, Captain Douglas H.

Baird, Sir John Lawrence

Cockerill, Brigadier-General G. K.

Hall, Lieut.-Col. Sir F. (Dulwich)

Balfour, George (Hampstead)

Conway, Sir W. Martin

Hamilton, Major C. G. C.

Banbury, Rt. Hon. Sir Frederick G.

Coote, Colin Reith (Isle of Ely)

Hannon, Patrick Joseph Henry

Barlow, Sir Montague

Davies, Sir Joseph (Chester, Crewe)

Harmsworth, C. B. (Bedford, Luton)

Barnes, Rt. Hon. G. (Glas., Gorbals)

Davies, Sir William H. (Bristol, S.)

Harmsworth, Hon. E. C. (Kent)

Barnett, Major R. W.

Denniss, Edmund R. B. (Oldham)

Hennessy, Major J. R. G.

Barnston, Major Harry

Dockrell, Sir Maurice

Henry, Denis S, (Londonderry, S.)

Bell, Lieut.-Col. W. C. H. (Devizes)

Doyle, N. Grattan

Herbert, Dennis (Hertford, Watford)

Bethell, Sir John Henry

Edgar, Clifford B.

Hewart, Rt. Hon. Sir Gordon

Betterton, Henry B.

Elliot, Capt. Walter E. (Lanark)

Hickman, Brig.-General Thomas E.

Birchall, Major J. Dearman

Entwistle, Major C. F.

Hilder, Lieut.-Colonel Frank

Bird, Sir William B. M. (Chichester)

Eyres-Monsell, Commander B. M.

Hills, Major John Waller

Blades, Capt. Sir George Rowland

Evans, Ernest

Hoare, Lieut.-Colonel Sir S. J. G.

Bowles, Colonel H. F.

Falcon, Captain Michael

Hohler, Gerald Fitzroy

Bowyer, Captain G. E. W.

Fell, Sir Arthur

Hood, Joseph

Brassey, Major H. L. C.

Fraser, Major Sir Keith

Hope, J. D. (Berwick & Haddington)

Breese, Major Charles E.

Fremantle, Lieut.-Colonel Francis E.

Hopkins, John W. W.

Bridgeman, Rt. Hon. William Clive

Ganzoni, Captain Sir F. J. C.

Hopkinson, A. (Lancaster, Mossley)

Broad, Thomas Tucker

Gibbs, Colonel George Abraham

Hume-Williams, Sir W. Ellis

Buckley, Lieut.-Colonel A.

Gilbert, James Daniel

Hunter, General Sir A. (Lancaster)

Burn, Col. C. R. (Devon, Torquay)

Gilmour, Lieut.-Colonel Sir John

Hurst, Lieut.-Colonel Gerald B.

James, Lieut.-Colonel Hon. Cuthbert

Murray, John (Leeds, West)

Stewart, Gershom

Jameson, J. Gordon

Neal, Arthur

Strauss, Edward Anthony

Jodrell, Neville Paul

Newman, Sir R. H. S. O. L. (Exeter)

Sturrock, J. Leng

Johnson, Sir Stanley

Nicholson, Reginald (Doncaster)

Sugden, w. H.

Johnstone, Joseph

Norris, Colonel Sir Henry G.

Surtees, Brigadier-General H. C.

Jones, G. W. H. (Stoke Newington)

Parker, James

Sutherland. Sir William

Jones, Henry Haydn (Merioneth)

Parry, Lieut.-Colonel Thomas Henry

Taylor, J.

Jones, J. T. (Carmarthen, Llanelly)

Pease, Rt. Hon. Herbert Pike

Thomas-Stanford, Charles

King, Captain Henry Douglas

Pennefather, De Fonblanque

Thomson, F. C. (Aberdeen, South)

Lewis, Rt. Hon. J. H. (Univ., Wales)

Perkins, Walter Frank

Thomson, Sir W. Mitchell- (Maryhill)

Locker-Lampson, G. (Wood Green)

Pinkham, Lieut.-Colonel Charles

Townley, Maximilian G.

Lort-Williams, J.

Poison, Sir Thomas

Turton, E. R.

Lyle, C. E. Leonard

Pratt, John William

Wallace, J.

Lyle-Samuel, Alexander

Prescott, Major W. H.

Walters, Rt. Hon. Sir John Tudor

M'Curdy, Rt. Hon. C. A.

Purchase, H. G.

Ward, Col. J. (Stoke upon Trent)

Mackinder, Sir H. J. (Camlachie)

Randies, Sir John S.

Waring, Major Walter

M'Lean, Lieut.-Col. Charles W. W.

Reid, O. D.

Warner, Sir T. Courtenay T.

Macquisten, F. A.

Renwick, George

White, Lieut.-Col. G. D. (Southport)

Mallalieu, F. W.

Richardson, Alexander (Gravesend)

Whitla, Sir William

Manville, Edward

Roberts, Samuel (Hereford, Hereford)

Willey, Lieut.-Colonel F. V.

Marriott, John Arthur Ransome

Roberts, Sir S. (Sheffield, Ecclesall)

Williams, Lt.-Com. C. (Tavistock)

Middlebrook, Sir William

Robinson, Sir T. (Lanes., Stretford)

Wills, Lieut.-Colonel Sir Gilbert

Mitchell, William Lane

Roundell, Colonel R. F.

Wilson, Daniel M. (Down, West)

Molson, Major John Elsdale

Samuel, Samuel (W'dsworth, Putney)

Wise, Frederick

Montagu, Rt. Hon. E. S.

Sanders, Colonel Sir Robert A.

Wood, Sir H. K. (Woolwich, West)

Moore, Major-General Sir Newton J.

Scott, A. M. (Glasgow, Bridgeton)

Worsfold, Dr. T. Cato

Moore-Brabazon, Lieut.-Col. J. T. C.

Shaw, William T. (Forfar)

Young, Lieut.-Com. E. H. (Norwich)

Morden, Lieut.-Col. W. Grant

Smith, Sir Allan M. (Croydon, South)

Younger, Sir George

Moreing, Captain Algernon H.

Smith, Sir Harold (Warrington)

Morison, Rt. Hon. Thomas Brash

Sprot, Colonel Sir Alexander

TELLERS FOR THE AYES.—

Morris, Richard

Stanier, Captain Sir Seville

Colonel Leslie Wilson and Mr. Dudley Ward.

Munro, Rt. Hon. Robert

Stanley, Major Hon. G. (Preston)

NOES.

Barnes, Major H. (Newcastle, E.)

Henderson, Rt. Hon. A. (Widnes)

Sexton, James

Benn, Captain Wedgwood (Leith)

Hodge, Rt. Hon. John

Thomson, T. (Middlesbrough, West)

Bowerman, Rt. Hon. Charles W.

Hogge, James Myles

Thorne, G. R. (Wolverhampton, E.)

Bramsdon, Sir Thomas

Holmes, J. Stanley

Thorne, W. (West Ham, Plaistow)

Edwards, G. (Norfolk, South)

Kennedy, Thomas

Waterson, A. E.

Galbraith, Samuel

Kenyon, Barnet

Wilson, James (Dudley)

Glanville, Harold James

Maclean, Neil (Glasgow, Govan)

Graham, R. (Nelson and Colne)

Morgan, Major D. Watts

TELLERS FOR THE NOES.—

Grundy, T. W.

Myers, Thomas

Lieut.-Commander Kenworthy and Mr. Cairns.

Hayward, Major Evan

Rose, Frank H.

Third Resolution read a Second time.

Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."

The same point arises here as on the last Resolution, why, in the present crisis, it was necessary to call up 25,000 men for the Navy. I remember asking the Lord Privy Seal a question with regard to that when we were discussing this Vote in Committee, and the answer that we got then was that these 25,000 men were called up because it was necessary for the British Navy to carry yeast about the country. That was the reason given by the Lord Privy Seal, and it was the only reason given by my right hon. Friend for the employment of those 25,000 men. During the week in which matters in the industrial crisis were more or less coming to a head, there were marched through the streets of Glasgow a large number of naval men—I do not know whether marines or not, but probably they were—accompanied by two tanks. Was that demonstration in Glasgow in order to protect the yeast that was in the two tanks? Really, if the Government do want us to take this seriously, we ought to have serious reasons given for calling up those 25,000 men. Presumably in the Navy at the present moment there must be a tremendous, number of ratings of one kind or another on the Reserve. So far as I am able to understand the situation, the British Navy has been laid up, crews have been depleted, and the men who served have been allowed to return to their normal occupations. Were the 25,000 men, for whom we are asked to grant pay and separation allowance, entirely reservists? My hon. Friend (Mr. Amery) shakes his head. Why is that not made plain?

10.0 P. M.

We have always said in debate here that we never have—and I do not see how we could have—any objection to the Reservists being called up, because that is part of the duties of the men when they join the voluntary force. But my hon. Friend will remember that what we were asked to do in the House of Commons was to vote authority for the payment of 100,000 men for the Army, 10,000 for the Air Force, and 25,000 for the Navy, and the impression created was that these men were called up for defence alone. With regard to the Army, a great number were not reservists, because 75,000 or 78,000 Defence men were called up, and something like 58,000 Reserve force men. But there is all the difference in the world between calling up reservists who know naval work, men who have been accustomed to the Navy all their life, and could be immediately put to sea for the purpose for which the Navy is used, and the calling up of 25,000 men for what is called the Defence Force, who would be required to be trained in naval work. That is the point we want made quite clear. I say the police should have done this, assisted by the Special Constabulary. That is my fundamental position. The Government ought to have been content with the calling up of the Reservists, and not until the police, the Special Constabulary and the Reservists have exhausted their power to deal with industrial riot, which might arise out of a crisis, should we resort to the creation of a special force. Unless I am satisfied on that point, I am afraid I must again vote against this Resolution.

I first of all wish to make a suggestion to the Parliamentary Secretary to the Admiralty with reference to these Reservists. They are paid a retaining fee, and are called up for a week's training every year. Their training, to a very great extent, is in gun-drill, and so on. If these men are going to be called up for anything like 90 days, I suggest it would be. a great waste of money, and of their time—because they are men earning their living in some business or occupation—if they were called up for a week's training in addition, and while things are quiet now, and while, admittedly, these reservists are only required to stand-by in case of some future crisis, that now is an opportunity for them to be put through their paces and do their ordinary drill. That is a detail, but I want to take this opportunity of protesting as strongly as I can against the use of the Navy for this sort of work at all. [HON. MEMBERS: "Oh!"] I hope I have aroused the attention of some hon. Members, because I mean to speak very plainly on this question. They signed on for five or seven years in the Reserve for the definite purpose of responding in the event of the call of the nation against a foreign enemy, and I do not believe that one in a thousand of these men ever dreamt that he would be called up in connection with an industrial dispute. The use of the Army in industrial disputes has been frequent in this country, and it has been more frequent abroad. It has always been criticised when it has taken place in this country, and I believe I am right when I say that, with the very limited exception of the Yorkshire miners' dispute last year, when, for the first time, the very grave step was taken of employing naval technical ratings to man the pumps, it is altogether without precedent to use the Navy in this sort of dispute.

Last year these pumpmen were used to keep the mines clear of water. What has the Navy been used for this year? For marching through streets with full equipment, apparently for patrol purposes, mounting sentry on valuable stores, for the very purposes for which the Army is ordinarily used. When a man enters the Army he is sworn in, and knows perfectly well that the civil power is justified in calling him to the assistance of the police if the police are unable to deal with some civil commotion. No one complains about that at all. It is the duty of the Government, if the police are not strong enough, to call in the Army in certain eventualities, but of the men entering the Navy I warrant not one of them ever expected to be used for this purpose. The function of the Navy is entirely different. Peacetime functions of this sort in the past have been confined to the work of putting down the slave trade, and suppressing piracy. Now they are to be used in industrial disputes on shore. As one who has the welfare of the Navy very much at heart, who never grudges money spent on it usefully, but who thinks that to-day far too much is being spent on the Army, and too little on the Navy, and who realises the great importance of the Navy to this Empire, I wish to protest against the use of the Navy for purposes which may alienate the mass of the people from the Navy. You will get the Navy unpopular if you use it for this purpose. [HON. MEMBERS: "No!"] Yes, I stick to my opinion, as I am entitled to do in this House. I say you are bound to detract from the popu- larity of the Navy among the industrial workers of the country if you use the Navy for this sort of purpose. It has always been looked upon as a very special service. I know that in the West country, where there is a militant nonconformity—and the right hon. Gentleman the Minister for Air will bear me out in this—there are many families who would be horrified at putting their sons into the Army, but whose boys go into the Navy generation after generation. I am not, of course, detracting from the Army at all. I have the greatest admiration for it, but there is a different feeling altogether in the nation towards the Army and towards the Navy. I say that the Navy has never been accused of domination, and of being used for improper purposes, and this is the beginning of using it for the purpose of Jackboot Prussianism, and I wish to protest with the greatest possible strength I can.

I have spoken to a great many naval officers, and, although they are not of my political views, they have all agreed with me on this point. The naval officer shakes his head and hopes that this using of the Royal Navy for police purposes in connection with industrial disputes will not become general. Ever since the Armistice, and every time there has been industrial trouble in this country, the railway strike, the miners' strike, or some stoppage actual or threatened, the first thing the Navy knows about it is that everyone's leave is immediately stopped. It is not fair. If I can get a teller to act with me I intend to vote against this Vote as a protest, and I do it in the most serious way, and not from a party point of view at all. [HON. MBMBEES: "Oh, oh!"] Oh, no, not at all. My hope is that the hon. Gentleman who speaks for the Admiralty in this House, and who will best serve the Navy, now that the step has been taken and the question raised about the future use of the Navy in these matters, will, when the matter comes before the Cabinet on some future occasion, put his foot down firmly and say, "No, I will not have the Navy used for this purpose." The Navy has its own particular functions, which are on the sea, not on the land, and if the right hon. Gentleman wishes to serve the Navy well I beg of him to pay some attention to this great evil.

I do not quite follow the statements of the hon. and gallant Gentleman, and the Member for East Edinburgh. I understood the latter to object to this Supplementary Estimate on the ground that the men were going to be used for the Defence Force. On the face of it the Estimate in my hand shows nothing to the effect that such is the object for which these men will be used. The Estimate asks for 25,000 men which is the number representing the probable excess beyond the numbers already voted for the years 1921–22 on the original Estimate of 123,700 men. The revised Estimate is thus 148,700 men. I should be disposed to think that the original Estimate has been revised and that the two Estimates will be for the remainder of the year. If that is so, if the 148,700 men are required, as I have always been in favour of a strong Navy, I shall support the granting of this additional 25,000 men. If, on the other hand, I am wrong and this additional 25,000 men are to be used for the purposes which the hon. and gallant Gentleman has just with so much vigour denounced, well, then, I shall still support my hon. Friend because I do not think there can be a better object on which these men could be used. Consider for a moment what the hon. and gallant Gentleman says. He says the Navy will be made unpopular if it is used for pumping water out of the pits.

I am coming to that shortly. I think the hon. and gallant Gentleman referred to the Yorkshire strike of last year, when the men were pumping the water out of the pits, and said he hoped they would not be so used again, as it made them unpopular.

I did not altogether object to them being used for pumping the water out of the mines. I only used it as the first instance in which they were engaged for that sort of work. My objection is that they are now being used for police purposes.

My hon. and gallant Friend does not object altogether, but I want to know on what better object could the men of the Navy be employed than in saving one of the great assets of this country? Is it unpopular to save a great asset of the country?

I cannot now go into the advantage or disadvantage of the nationalisation of the coal industry, or, indeed, of any industry. But it does seem to me that it is not advisable to destroy an asset because it does not happen for the moment to belong to the nation. If the nation is desirous of achieving the object mentioned by the hon. Member who interrupted me, it would far more likely achieve it if there were something to be gained by nationalisation. If the object is first of all destroyed it will be quite impossible to nationalise it. It is put forward as an argument by the hon. Member that he desires that the property should be destroyed because it does not belong to him, but to somebody else. It only shows the absurdity of the arguments advanced by hon. Members opposite on that point. The hon. and gallant Gentleman said that the Navy had never been employed on land. I do not think that is quite true.

I have not had the experience he has had on board ship, but I have read the "Life of Nelson," and if I remember rightly, on very many occasions the Navy has been employed on land, and very effectively employed. In fact, I think it was on an occasion when the Navy was employed on land that the gallant Nelson lost his arm. The hon. and gallant Gentleman says, "Oh, but they must not be employed on police work," and the hon. Member for one of the Divisions of Edinburgh pictured the Marines marching through the city of Glasgow in order to be employed on certain work. Again I say, "What on earth harm can there be in the Navy being employed to protect property? It is not interfering with the miners, unless the miners do something which they have no business to do. A miner may say, "I will not work," and he has the right to say so; but having said that, if he continues, "Not only will I not work myself, but I will break the head of anybody who does work, or destroy the property of a man against whom I have a grudge," then I say that all the forces of the Crown ought to be used in putting that down. Unless it is put down it will ultimately destroy not only the prosperity of the country, but the country itself. Therefore, under these circumstances, I sincerely trust that the House will pass this Supplementary Estimate by a very large majority.

I hope my right hon. Friend will forgive me if I do not follow him any further into the hypothetical nationalisation of the non-existent which he has raised and I will confine myself to the Vote more immediately before us. The hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy) made an impassioned protest against the use of the Navy for the preservation of law and order in this country. The hon. and gallant Member claims to be a constitutionalist. I should have thought that he would have remembered that it is the duty of every loyal subject of the Crown to assist in supporting the constituted authorities in maintaining the law against any body of men who wish to break the law. There is no question here of intervention in a strike. It is only to have special support at the back of the authorities to enable the law to be observed in a dangerous and anxious time.

In the circumstances it is our duty to call upon those citizens who by discipline and training are likely to be the most effective to support the law, not only from the terror they may inspire in evil-doers, but because they have more restraint than a less disciplined body. The hon. and gallant Member speaks from the point of view of the Navy, but his statement that naval men are never employed for such purposes is somewhat surprising. From the point of view of the office with which I have the honour to have been associated for the last two years I know that the Navy has again and again been used whenever there has been trouble or riot or in industrial disputes.

They have been used in Malta, Jamaica, Trinidad and wherever they were the force most easily available for supporting the law. In the grave circumstances which confronted the Government a few weeks ago, the Government realised that they had to have the support of all the effectively trained and disciplined men who could be quickly got together, and the Reservists of the different arms were those who could be got together most speedily for the purpose in view, namely, to allow peaceful citizens to go about their business without interference. The hon. Member for East Edinburgh (Mr. Hogge) asked whether any special men were being enlisted outside the Reservists. The men called up are Class B of the Royal Fleet Reserve, and, as we show in the Navy Estimates, they number just under 25,000 men. As a matter of fact, we have actually called up only about 22,000 men. The Estimate mentioned in Committee of £100,000 a week and the sum of £200,000 for non-recurrent expenditure, both on clothing and travelling expenses, would consequently be reduced by about 10 per cent.

In answer to the suggestion put forward by the hon. and gallant Member for Hull, namely, that these reservists should be allowed to count their present summons for a week's training, that point has been considered, and it has been decided that all those called up should count their service now as including and covering their week's training for the rest of the year. As regards anyone who comes up after having already done his training this year we shall allow their reserve service this year to count for next year's service, and then they will all be on the same footing. I may also add, that the 10 per cent. leave conditions which are being applied to Army reservists are also applied to Navy reservists, and special cases of hardship are met in that way. The hon. Member for East Edinburgh raised the question of the use of the Navy in these cases, and based his contention on a statement by the Leader of the House. But my right hon. Friend, it must be remembered, was dealing with the matter just before eleven o'clock, and had only a minute in which to reply. He was consequently only able to illustrate one way in which naval men were used, and he cited the carrying of yeast for use by bakers. But clearly they had also to be used to preserve law and order in different parts of the country. I hope the House will now give this Vote without further discussion.

I think my hon. and gallant Friend has admitted the real crux of the position: that this is the first time in the industrial history of the country that the Reserves have been called out in connection with a strike. On other occasions when we had industrial strife we have had the military taking part, and we have had military units sent into various districts. We have also had, on occasions, a few of the Navy drafted into districts. But there has not existed yet in this country a condition of affairs that warranted the calling out of the Reserves either of the Army or the Navy to take part in an industrial dispute. There are sufficient men in the standard forces of the country for use if the Government require assistance. There is an ample number of men who could be called upon for that purpose if desired without summoning the Reserves back to the colours. That is the principal objection that is taken to this and other Votes. The argument used by my hon. and gallant Friend was that naval unts have been utilised on previous occasions in Trinidad and other places, the names of which for the moment I cannot recall—presumably to deal with coloured labour. [An HON. MEMBER: "Malta and Jamaica."] Yes, Malta, but I do not know whether it is suggested that the Maltese population is a coloured population; it is called British.

No more than I suggest that the hon. Gentleman himself is coloured. We know the people of Malta. But the places where troops have been used, in the main, have been places where there was black labour—to put down riots that have occurred there. If that goes out from this House as an argument in favour of employing the Navy in this country, you are going to get the backs of the industrial population up against you, because you are practically putting them in the same category as these people. [HON. MEMBERS: "No!"] You may not have meant it, but that is the interpretation that will be placed upon your words, namely, that the troops have been used in this country for the same purpose and in the same manner as in foreign parts in putting down riots in those places. The right hon. and learned Member for the City of London—

I was crediting the right hon. Gentleman with being learned because he tried to pose as a naval authority on the strength of having read the life of Nelson. He suggests that in this country it is necessary to use these troops to protect the mines—to protect the property of the mineowners. Is he prepared to ask the mineowners to foot the bill for bringing these men back to the Colours? [HON. MEMBERS: "Against Bolshevists!"] I wish my hon. Friends would wake up and become a little more sensible. Some people in this House seem always to go to bed shivering because of the thought of Bolshevism. [An HON. MEMBER: "We do not shiver at all!"] The right hon. Gentleman the Member for the City of London wants the coalmining properties to be preserved at the expense of the taxpayers of the country.

I am sorry to interrupt the hon. Gentleman, but supposing that a burglar were to-night to break into his house, would he object to the police—who are paid by the taxpayer—arresting that burglar?

The analogy is not entirely perfect. That is the duty of the police. It is the duty of the police to guard or protect the mines of this country from any burglar or any individual who goes there with the object of thieving or damaging the property. That is the duty of the police. It is not the duty of the military or the Navy. [HON. MEMBERS: "Yes!"] I again insist that it is not the duty of the military or the Navy. [HON. MEMBERS: "You are wrong!"] They are not enlisted for that purpose. That is something which comes in in exceptional circumstances in the country, when the authorities in any district, or the authorities of the nation, believe that a state of emergency exists and has arrived at such a pitch that the ordinary police precautions and protection are not sufficient. To suggest that anyone should object to the police capturing a burglar, and that we object to that while we are objecting to this, is to bring into the Debate something which is really absurd. We suggest that, if the mines have to be protected at the expense of the country—if the taxpayers of the country are to pay for the maintenance of the Reserves who are being called up, or of the soldiers or of the Navy men who may be drafted into these districts—we suggest that that, instead of being an argument against the nation owning these things, is an argument in its favour because if the individuals who are the servants of the nation have to be used to save that which is a national asset, and those who hold them as private property to-day are not to be asked to bear their share, apart altogether from what they will bear as taxpayers, it is an argument in favour of the nation owning that which is a national asset and that which has to be protected by the protective forces of the country. The position as it arises to-day is not so grave as it was when these troops were first called up. When the state of emergency was first declared it was anticipated that certain things were going to arise. Those things have not arisen. The emergency has not come into existence. The police in all parts of the country where the strike has taken place are sufficient to cope with that which is going on. [ Interruption. ] I did not quite catch what the hon. Member said.

I accept the hon. Member's correction, but I am not referring to the strike of the coalminers. I am referring to the strike of the mine-owners. They have gone on strike. It is they who are refusing to supply the country with coal.

The hon. Member is being led by his interrupters into bypaths which have nothing to do with the Vote.

I was only going to say I should be prepared to take the hon. and gallant Gentleman into some by-path leading to a colliery where he might use the argument he is using here. But I will not pursue that. The state of emergency that was calculated to arise at the outset has not arisen. Apart from one or two districts—some little disturbance with which the police have been perfectly able to cope—there has been absolutely nothing to call for the introduction of other forces than the police. The police have been quite capable of coping with any disturbance, and to ask that we should increase the Navy by calling up 25,000 Reserve forces is, to my mind, simply asking the working classes to believe that which is being preached to them and which many of them believe, that this is really a Government of the employers, that it is really governing in the interest of the employers and has little or no concern for the welfare of the working people themselves. I know what I am saying. Give me, at any rate, credit for moving about amongst the working people and being able to interpret their thoughts and their expressions. I can say without fear of contradiction that that is in their minds to-day, that the Government is behind the mineowners, that the Government is not holding an even balance between the miners and the mineowners, that if you come forward with, this demand for a further 25,000 Reserve men of the Navy it will simply justify the feelings they have that you are more concerned with the property of the mineowners than with the well-being and livelihood of the working people. Even now, as no state of emergency exists that calls for the increase of the Navy by this number, I suggest that the Government should withdraw the Vote, let matters go on as they are going on, and I am certain that within a very short time there will be peace in the industrial field, and miners will be back at their work.

I rise to ask a question which has not been brought out in debate. Information has reached me from one of the naval reservists that upon rejoining his depot according to orders, he was immediately made a soldier, was equipped as a soldier, was not dressed as a naval reservist, but in the ordinary military khaki, and has been sent forward to do military duty in a particular part of the country. I should like to ask the Minister in charge how many of the men who have been called up have been forced to take up military duty, for which they have never been trained and merely to satisfy the orders given by the authority concerned. From the letters which have reached me, I learned that this matter has caused great concern amongst the men of the Naval Reserve. These men have not endeavoured to get behind their work in the way of not fulfilling their obligations, and they strongly complain, and I think they are justified, that whilst being naval reservists and called up to do naval work they are suddenly cast into the military machine and ordered to per- form duties for which they are totally unfitted and untrained. I should like to know how many of these men have been called upon to do duty of that character, and whether the Minister in charge can see his way clear to put these men back into the Naval Reserve from the military occupation in which they are now engaged.

The Navy and the Army are not separate in their undertakings. I have seen naval patrols in times of riot in English towns. I think they have always been used in that way, though I cannot put my finger on the information at the present time. If the hon. Member would look up history he would find that they have been used frequently in times of riot. The protection of property is the duty first of the police, but when the police are not sufficiently strong, or the Government think that they may not be strong enough, the Government is entitled to call up the reserves, the military and the sailors, whose training is the same, so far as it goes. I hope there may be an answer given to the last speaker, to assure him that these men are not put under military officers. The naval men are probably under marine officers, who have exactly the same training as the military officers. Sailors in the Navy are trained to drill and to do military work in exactly the same way as a soldier in the Army.

By permission of the House I may say that I am not aware of any naval reservists who have been transferred to military units, or of any of them having been put into other than naval uniform.

May I be permitted to make an explanation? I have asked a question in this House relative to this point, and the reply that was forthcoming from the Government was one that confirmed my statement this evening.

I have had several complaints from the wives of naval reservists to say that their husbands have been called up and no provision has been made for separation allowances. In view of the fact that these men are retained on a nominal 6d. a day as reservists, the least that the Government can do is to see that when they are called up their wives shall receive separation allowances without delay.

I have come from my constituency this morning. Talk about riots amongst miners! The miners are constitutionalists. They are as much constitutionalists as any Member of this House. It is a waste of money in the county to which I belong to have all these military men and marines. The right hon. Member for the City of London was quite right when he said that we all need the police when a burglar come in, but when the police cannot put down disorder it is time enough to send for the military, but to have them there now is a waste of money. Send those men back to their homes or where they were before hand, but do not send them among the miners. The very last thing I said last night at a big meeting was, "Whatever you do, do not give the military any reason to fire on you. Behave yourselves. Observe the law." We in Northumberland were congratulated by the constabulary in 1910 and 1912 for our good behaviour. It is up to us to keep the mines dry and in order. Every pit in Northumberland is being kept in order, because we know we have to go back to them to get our daily bread. We live there. I hope, however, that the military will be withdrawn, so that we may save this money.

The right hon. Gentleman the Member for the City of London (Sir P. Banbury) is a consistent champion of economy, but I do not think he will say that I do him an injustice when I say that he is equally discriminating in his championship. He is always ready to use the pruning knife upon the Civil. Ser-

vice Estimates, but when it comes to the Army and Navy Estimates he is never so willing to perform the surgical operation. I am not disposed to contest the principle laid down by the right hon. Gentleman as to the exercise of duties of the executive in cases of civil disorder but I do not think that he would suggest that more force than is necessary should ever be expended or that a greater amount of money than is necessary should be spent by the Executive in preparations for facing contingencies of this kind. We have dealt with to-night 10,000 men for the Air Force. We are now asked to deal with 25,000 men for the Navy, and 75,000 men, I believe, are already in the Defence Force. With the situation as it is now, to keep these men under arms, as they are at present, is a wanton and wicked expenditure of public money. It is worse than that, because anyone who knows the mining districts of the country—and I have the honour to represent an almost purely mining district myself—knows that the ordinary miner when left to himself is an orderly person, and that if you want trouble with him you will put the military where he is. I agree with the last speaker. If the industrial situation is to continue as it is now, I hope the Government will reconsider this question and send the men back to their homes, with, if necessary, power to recall them should emergency arise. To keep them mobilised, I am sure, is to do more harm than good.

Question put, "That this House doth agree with the Committee in the said Resolution."

The House divided: Ayes, 176; Noes, 22.

Division No. 93.]

AYES.

[10.45 p.m.

Agg-Gardner, Sir James Tynte

Bramsdon, Sir Thomas

Coote, Colin Reith (Isle of Ely)

Ainsworth, Captain Charles

Brassey, Major H. L. C.

Davidson, Major-General Sir J. H.

Allen, Lieut.-Colonel William James

Breese, Major Charles E.

Davies, Sir Joseph (Chester, Crewe)

Amery, Lieut.-Col. Leopold C. M. S.

Bridgeman, Rt. Hon. William Clive

Davies, Sir William H. (Bristol, S.)

Armitage, Robert

Brittain, Sir Harry

Elliot, Capt. Walter E. (Lanark)

Astbury, Lieut.-Commander F. W.

Broad, Thomas Tucker

Eyres-Monsell, Commander B. M.

Atkey, A. R.

Buckley, Lieut.-Colonel A.

Evans, Ernest

Baird, Sir John Lawrence

Burn, Col. C. R. (Devon, Torquay)

Falcon, Captain Michael

Balfour, George (Hampstead)

Casey, T. W.

Foxcroft, Captain Charles Talbot

Banbury, Rt. Hon. Sir Frederick G

Cautley, Henry S.

Fraser, Major Sir Keith

Barlow, Sir Montague

Cayzer, Major Herbert Robin

Fremantle, Lieut.-Colonel Francis E.

Barnes, Rt. Hon. G. (Glas., Gorbals)

Chamberlain, Rt. Hn. J. A. (Birm. W.)

Ganzoni, Captain Sir F. J. C.

Barnett, Major R. W.

Chamberlain, N. (Birm., Ladywood)

Gibbs, Colonel George Abraham

Barnston, Major Harry

Chilcot, Lieut.-Com. Harry W.

Gilbert, James Daniel

Bell, Lieut.-Col. W. C. H. (Devizes)

Churchman, Sir Arthur

Gilmour, Lieut.-Colonel Sir John

Bethell, Sir John Henry

Clay, Lieut.-Colonel H. H. Spender

Goff, Sir R. Park

Betterton, Henry B.

Coats, Sir Stuart

Gould, James C.

Birchall, Major J. Dearman

Cobb, Sir Cyril

Gray, Major Ernest (Accrington)

Blades, Capt. Sir George Rowland

Cockerill, Brigadier-General G. K.

Green, Joseph F. (Leicester, W.)

Blair, Sir Reginald

Colvin, Brig.-General Richard Beale

Gregory, Holman

Bowyer, Captain G. E. W.

Conway, Sir W. Martin

Greig, Colonel James William

Gritten, W. G. Howard

M'Lean, Lieut.-Col. Charles W. W.

Shaw, William T. (Forfar)

Guest, Capt. Rt. Hon. Frederick E.

Macquisten, F. A.

Shortt, Rt. Hon. E. (N'castle-on-T.)

Hacking, Captain Douglas H.

Manville, Edward

Smith, Sir Harold (Warrington)

Hall, Lieut.-Col. Sir F. (Dulwich)

Marriott, John Arthur Ransome

Sprot, Colonel Sir Alexander

Hamilton, Major C. G. C.

Middlebrook, Sir William

Stanier, Captain Sir Seville

Hannon, Patrick Joseph Henry

Mitchell, William Lane

Stanley, Major Hon. G. (Preston)

Harmsworth, C. B. (Bedford, Luton)

Molson, Major John Elsdale

Stephenson, Lieut.-Colonel H. K.

Harmsworth, Hon. E. C. (Kent)

Moore, Major-General Sir Newton J.

Stewart, Gershom

Hennessy, Major J. R. G.

Moore-Brabazon, Lieut.-Col. J. T. C.

Strauss, Edward Anthony

Henry, Denis S. (Londonderry, S.)

Morden, Lieut.-Col. W. Grant

Sturrock, J. Leng

Hewart, Rt. Hon. Sir Gordon

Moreing, Captain Algernon H.

Sugden, W. H.

Hickman, Brig.-General Thomas E.

Morison, Rt. Hon. Thomas Brash

Surtees, Brigadier-General H. C.

Hilder, Lieut.-Colonel Frank

Munro, Rt. Hon. Robert

Sutherland, Sir William

Hills, Major John Waller

Murray, John (Leeds, West)

Taylor, J.

Hoare, Lieut.-Colonel Sir S. J. G.

Neal, Arthur

Terrell, Captain R. (Oxford, Henley)

Hohler, Gerald Fitzroy

Newman, Sir R. H. S. D. L. (Exeter)

Thomas-Stanford, Charles

Holbrook, Sir Arthur Richard

Nicholson, Reginald (Doncaster)

Thomson, Sir W. Mitchell- (Maryhill)

Hood, Joseph

Norris, Colonel Sir Henry G.

Townley, Maximilian G.

Hope, J. D. (Berwick & Haddington)

Parker, James

Turton, Edmund Russborough

Hopkins, John W. W.

Parry, Lieut.-Colonel Thomas Henry

Wallace, J.

Hopkinson, A. (Lancaster, Mossley)

Pease, Rt. Hon. Herbert Pike

Walters, Rt. Hon. Sir John Tudor

Hunter, General Sir A. (Lancaster)

Pennefather, De Fonblanque

Ward, William Dudley (Southampton)

Hurst, Lieut.-Colonel Gerald B.

Perkins, Walter Frank

Waring, Major Walter

James, Lieut.-Colonel Hon. Cuthbert

Pinkham, Lieut.-Colonel Charles

Warner, Sir T. Courtenay T.

Jameson, J. Gordon

Prescott, Major W. H.

White, Lieut.-Col. G. D. (Southport)

Jodrell, Neville Paul

Purchase, H. G.

Whitla, Sir William

Johnson, Sir Stanley

Randles, Sir John S.

Willey, Lieut.-Colonel F. V.

Johnstone, Joseph

Raw, Lieutenant-Colonel N.

Williams, Lt.-Com. C. (Tavistock)

Jones, G. W. H. (Stoke Newington)

Reid, D. D.

Williams, Col. Sir R. (Dorset, W.)

Jones, Henry Haydn (Merioneth)

Renwick, George

Wills, Lieut.-Colonel Sir Gilbert

Jones, J. T. (Carmarthen, Llanelly)

Richardson, Alexander (Gravesend)

Wilson, Daniel M. (Down, West)

King, Captain Henry Douglas

Roberts, Rt. Hon. G. H. (Norwich)

Wise, Frederick

Lewis, T. A. (Glam., Pontypridd)

Roberts, Samuel (Hereford, Hereford)

Wood, Sir H. K. (Woolwich, West)

Locker-Lampson, G. (Wood Green)

Roberts, Sir S. (Sheffield, Ecclesall)

Worsfold, Dr. T. Cato

Locker-Lampson, Com. O. (H'tlngd'n)

Robinson, Sir T. (Lanes., Stretford)

Young, Lieut.-Com. E. H. (Norwich)

Lort-Willlams, J.

Roundell, Colonel R. F.

Younger, Sir George

Lyle, C. E. Leonard

Samuel, Samuel (W'dsworth, Putney)

Lyle-Samuel, Alexander

Sanders, Colonel Sir Robert A.

TELLERS FOR THE AYES.—

McLaren, Hon. H. D. (Leicester)

Scott, A. M. (Glasgow, Bridgeton)

Colonel Leslie Wilson and Mr. McCurdy.

NOES.

Barnes, Major H. (Newcastle, E.)

Henderson, Rt. Hon. A. (Widnes)

Sexton, James

Bowerman, Rt. Hon. Charles W.

Hodge, Rt. Hon. John

Short, Alfred (Wednesbury)

Cairns, John

Holmes, J. Stanley

Sitch, Charles H.

Edwards, G. (Norfolk, South)

Kenworthy, Lieut.-Commander J. M.

Thorne, G. R. (Wolverhampton, E.)

Galbraith, Samuel

Kenyon, Barnet

White, Charles F. (Derby, Western)

Glanville, Harold James

Maclean, Neil (Glasgow, Govan)

Wilson, James (Dudley)

Graham, R. (Nelson and Colne)

Morgan, Major D. Watts

Grundy, T. W.

Rose, Frank H.

TELLERS FOR THE NOES.—

Major Hayward and Mr. Waterson.

Supply [21st April]

Resolutions reported:

Air Estimates and Supplementary Estimate, 1921–22

1. "That a sum, not exceeding £915,467 (including a Supplementary sum of £467), be granted to His Majesty, to defray the Expense of the Air Ministry, which will come in course of payment during the year ending on the 31st day of March, 1922."

2. "That a sum, not exceeding £3,018,000, be granted to His Majesty, to defray the Expense of the Works, Buildings, Repairs, and Lands of the Air Force, including Civilian Staff and other Charges connected therewith, which will come in course of payment during the year ending on the 31st day of March, 1922."

3. "That a sum, not exceeding £880,000, be granted to His Majesty, to defray the Expense of Civil Aviation, which will come in course of payment during the year ending on the 31st day of March, 1922."

4. "That a sum, not exceeding £1,706,000, be granted to His Majesty, to defray the Expense of Experimental and Research Services, which will come in course of payment during the year ending on the 31st day of March, 1922."

5. "That a sum, not exceeding £3,105,000, be granted to His Majesty, to defray the Expense of Quartering, Stores (except Technical), Supplies, and Transport of the Air Force, which will come in course of payment during the year ending on the 31st day of March, 1922."

6. "That a sum, not exceeding £3,758,000, be granted to His Majesty, to defray the Expense of Technical and Warlike Stores of the Air Force, which will come in course of payment during the year ending on the 31st day of March, 1922."

7. "That a sum, not exceeding £129,000, be granted to His Majesty, to defray the Expense of the Miscellaneous Effective Ser vices of the Air Force, which will come in course of payment during the year ending on the 31st day of March, 1922."

8. "That a sum, not exceeding £106,000, be granted to His Majesty, to defray the Expense of Rewards, Half-Pay, Retired Pay, Widows' Pensions, and other Non-Effective Services of the Air Force, which will come in course of payment during the year ending on the 31st day of March, 1922."

Civil Services Estimates

Class I

9. "That a sum, not exceeding £167,550, be granted to His Majesty, to complete the sum necessary to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1922, for Expenditure in respect of the Royal Parks and Pleasure Gardens."

10. "That a sum, not exceeding £120,000, be granted to His Majesty, to complete the sum necessary to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1922, for Expenditure in respect of Diplomatic and Consular Buildings, and for the maintenance of certain Cemeteries Abroad."

11. "That a sum, not exceeding £1,441,450, be granted to His Majesty, to complete the sum necessary to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1922, for Expenditure in respect of Customs and Excise, Inland Revenue, Post Office and Telegraph Buildings in Great Britain, and certain Post Offices Abroad."

12. "That a sum, not exceeding £942,350, be granted to His Majesty, to complete the sum necessary to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1922, for Expenditure in respect of Employment Exchange and Insurance Buildings, Great Britain (including Ministries of Labour and Health)."

I understand that Vote 5 will be kept back. It is only for a small sum of the remaining £16,000,000 or £17,000,000 to carry on these very essential services. I think it is usual to keep back one Vote, otherwise we should have no opportunity of discussing the Air Forces if any need arises to raise a Debate. I think it would be for the general convenience if this could be done.

As long as the opponents of this Vote will not make it a complicated issue, from the point of view of the Air Ministry, I am quite ready to agree.

First and Second Resolutions agreed to.

Third Resolution read a Second time.

Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."

I beg to suggest that the consideration of this Resolution be adjourned. I hope the Government will accept this suggestion. This is the Vote for Civil Aviation, and it would be a very good Vote to keep back, in case we wish to raise any point.

Motion made, and Question, "That the Debate be now adjourned," put, and agreed to.—[ Colonel Leslie Wilson. ]

Debate to be resumed To-morrow.

Fourth to Eighth Resolutions agreed to.

Ordered, "That the consideration of the subsequent Resolutions be now adjourned."—[ Colonel Leslie Wilson. ]

Ninth and subsequent Resolutions to be considered To-morrow.

Jurors' Expenses Bill

Order for Second Reading read.

Motion made, and Question proposed, "That the Bill be now read a Second time."—[ Captain Tudor-Rees. ]

There are only two or three minutes remaining during which I wish to point out the object of this Bill. It is to provide for the payment to jurors of expenses incurred by them in the discharge of their duties, and it states: "From and after the passing of this Act any juror who attends any court in obedience to a summons to serve on a jury shall be paid such travelling and other expenses, as shall be certified by the proper officer of the court, as believed to have been properly incurred by him or her in going to, attending, or returning from such court." I have always contended that, especially in civil matters, we must be very careful not to increase the amount of money which the nation is incurring. I do not quite know who is going to pay for this—

It being Eleven of the Clock, the Debate stood adjourned.

Debate to be resumed upon Monday next.

The remaining Orders were read and postponed.

Allied Conference (German Reparation)

Motion made, and Question proposed, "That this House do now adjourn."—[ Colonel Leslie Wilson. ]

At Question Time I asked the Home Secretary, and I will now ask the Leader of the House, if he can give us any information as to any decisions that are being reached by the Council to-day between the Allies on the question of German reparation?

The sittings of the Council and Committees have been continued to-day. I am glad to say that substantial progress has been made, and, I think, substantial agreement arrived at. The Council will resume its sittings to-morrow—the work is not concluded—and I am not in a position to say more than that we have every reason to be satisfied with the progress which has been made.

Question put, and agreed to.

Adjourned accordingly at Two Minutes after Eleven o'clock.