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Commons Chamber

Volume 165: debated on Wednesday 13 June 1923

House of Commons

Wednesday, June 13, 1923

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

Death of Her Royal Highness Princess Christian

Answer to Address

The VICE-CHAMBERLAIN OF THE HOUSEHOLD (Captain Douglas Hacking) reported His Majesty's Answer to the Address, as followeth:

I return you My most sincere thanks for your loyal and dutiful Address expressing sympathy with Me in the bereavement which I have sustained by the death of My beloved Aunt, The Princess Christian. The assurance of your affectionate and dutiful participation in all that concerns My feelings and interests is a source of comfort to Me in My great loss.

Tramways and Light Railways (Street and Road) and Trackless Trolley Undertakings

Return ordered "of Street and Road Tramways and Light Railways authorised by Act or Order, showing the amount of capital authorised, paid up, and expended; the length of line authorised and the length open for public traffic down to the 31st day of December, 1922, in respect of companies, and the 31st day of March, 1923, in respect of local authorities; the gross receipts, working expenditure, net receipts, and appropriations; the number of passengers conveyed; the number of miles run by cars; the quantity of electrical energy used; the estimated population served; the number of cars in stock and in use; the average speed per hour; and the average distances for which passengers are conveyed for each fare, for the year ending on the fore- going dates, respectively (in continuation of Return to an Order of the House, dated the 4th July, 1922); also similar particulars relating to Trackless Trolley Undertakings."—[ Colonel Ashley. ]

Oral Answers to Questions

Questions

Trawler "Quercia" (Sentence, Norway)

asked the Under Secretary of State for Foreign Affairs whether his attention has been drawn to the action of the Norwegian Government in fining the skipper of the Grimsby trawler "Quercia" 3,000 kroner and confiscating the vessel with her catch, valued at £12,000 to £15,000, for the alleged offence of trawling within territorial waters; and whether His Majesty's Government is taking any steps to obtain some mitigation of this severe sentence?

The answer to the first part of the question is in the affirmative. His Majesty's Government cannot see that any useful purpose would be served by intervention in a case under appeal; nor, in view of the fact that the charge of fishing in territorial waters has not apparently been seriously contested, and the maximum penalty of 5,000 kroner not inflicted, do they feel that such intervention would be justifiable.

Is the hon. Gentleman aware that this alleged offence was committed at night on a very badly-lighted coast and that the matter is in dispute? Even if the man is guilty, are they justified, in addition to imposing this very serious fine, in confiscating the ship and thereby ruining the owner?

Are the Government watching this case? If they can, are they prepared to intervene?

Does the hon. Gentleman say that the maximum fine is 5,000 kroner? Is that in addition to confiscating the trawler?

I cannot answer that question without notice. But the maximum fine is 5,000 kroner.

Russia

Reply to British Note

asked the Under-Secretary of State for Foreign Affairs whether a reply has been received from the Russian Government to the Note from His Majesty's Government of 29th May; if so, what is the nature of the reply; and when both the Note and the reply will be laid before Parliament?

The answer to the first part of the question is in the affirmative. The Russian Note, together with the reply of His Majesty's Government, will be laid before Parliament in the course of this afternoon.

Have we got any further forward in settling outstanding questions with Russia, such as the question of British debts and so on? Are we to have the promised conference to settle these matters?

Is it a fact, as stated in the "Daily Herald," that the Foreign Secretary advised the rejection of the Russian Note?

I have seen the statement referred to by my hon. Friend. It is an entire invention. The course taken by the Government was taken on the advice of my Noble Friend the Secretary of State for Foreign Affairs, and the suggestion by the newspaper that there was any difference of opinion between the Foreign Secretary and the Prime Minister, or any other member of the Government, is without a shadow of foundation.

How is it that the Russian reply was published in the newspapers before it was laid before Parliament?

I am sorry to say I cannot explain that. It has happened before. It has not been done on our part. I believe M. Krassin repudiates having himself sanctioned the publication. I cannot say more than that.

asked the Under-Secretary of State for Foreign Affairs whether the status of M. Krassin, the head of the Russian Trade Delegation in this country, is such as to give him legal immunity in the case of proceedings in a British Court?

I would refer my hon. Friend to the judgment of the Court of Appeal on 16th December, 1921, in the case of Fenton Textile Association, Limited, versus Leonid Krassin, the Russian Socialistic Federative Soviet Republic, and the All-Russian Co-operative Society, Limited.

I have not all the facts of that case in mind, but does not that relate to the case itself and not to the individual? Cannot the hon. Gentleman say whether M. Krassin himself would be subject to an action for libel if he circulated a libel on a British subject?

If my hon. Friend will refer to the case I have quoted, it will not be beyond the resources of his powers to find an answer to that question.

On reference to the case I have quoted, my hon. and gallant Friend will find the answer.

Smyrna-Aidin Railway Company

3 and 4.

asked the Under-Secretary of State for Foreign Affairs (1) what is the present position of the Smyrna-Aidin Railway Company in regard to that company's claims for compensation for damages, seizure of revenue, etc., during the period that their line and properties were occupied by the Turks; whether due provision has been made for the just settlement of these claims in the Treaty of Lausanne; whether he can assure the stockholders in this company, numbering several thousands, many of whom are of limited means and have received no dividend since 1914, that there has been no change of attitude on the part of His Majesty's Government:

(2) whether, in view of the letter which on 27th March last was addressed by the Foreign Office to the various concessionary companies, including the Smyrna-Aidin Company, intimating that the Turkish Government were prepared to negotiate privately the separate claims of the various companies, and stating that His Majesty's Government considered this procedure desirable, he will state whether Clauses safeguarding the rights of the concessionary companies to compensation would be reinserted in the Peace Treaty in the event of their not receiving satisfactory treatment in their private negotiations with the Turkish Government?

A representative of the Smyrna-Aidin Railway Company has left for Angora to institute negotiations with the Turkish Government with a view to arrive at an agreement regarding the company's concession rights and claims for compensation. Discussion is also proceeding at Lausanne on the general question of safeguarding in the Treaty the rights of concession holders in Turkey, including those of the Smyrna-Aidin Railway Company, in the event of the failure of the private negotiations at Angora. There has been no change of attitude on the part of His Majesty's Government.

asked the Under-Secretary of State for Foreign Affaire whether His Majesty's representative at Lausanne have countenanced a proposal that, in return for the complete waiving of Turkish reparation claims against Greece (for the post-Armistice period), the claims of the concessionary companies (for the pre-Armistice period) should cease to receive the support of His Majesty's Government; and whether he will give an assurance that the claims of the Smyrna-Aidin Company, which have been audited and certified by a leading firm of London accountants, will not be included in any such bargain?

His Majesty's Government have given and will continue to give support to any just claims of the concessionary companies, including the Smyrna-Aidin Railway Company; it must, however, be borne in mind that a great number of inter-related questions are under discussion, on the settlement of which the conclusion of peace depends, and it is therefore not possible at the present stage of negotiations to give any pledge as to the manner in which it may be decided to deal with any one of these questions.

China

Outrages Against Europeans

asked the Under-Secretary of State for Foreign Affairs whether his attention has been called to the disturbed condition of affairs in China, which is imperilling both trade and missionary work in that country; whether the Government is making any representations to China on the subject; and whether the desirability of making any offer of good offices towards remedying the evils complained of will be considered?

I can add nothing at present to the answer given on the 11th instant on this subject. I may add that I have heard this morning that all the foreigners captured by the brigands have been released.

Boxer Indemnity

asked the Under-Secretary of State for Foreign Affairs whether a Committee has now been constituted to investigate the utilisation of the Boxer Indemnity Funds; and whether, in that case, he will state its composition?

Legislation will be necessary in order to give effect to the intention of His Majesty's Government to devote the British share of the Boxer Indemnity to purposes of mutual benefit to British and Chinese interests. It is not proposed to proceed with the actual appointment of the Committee until it is known when the necessary Bill, which is now being drafted, can be introduced. Its introduction will take place at the earliest opportunity.

Bokhara

asked the Under-Secretary of State for Foreign Affairs if an agreement has been negotiated with representatives of the ex-Emir of Bokhara in accordance with which part of Bokharan territory would, under certain circumstances, be temporarily handed over to Great Britain?

No agreement of any sort has been negotiated by any person acting on behalf of His Majesty's Government with any representative of the ex-Amir of Bokhara.

British Minister, Athens

asked the Under-Secretary of State for Foreign Affairs when His Majesty's Minister at Athens will receive instructions to return to his post?

United States Consulate, Newcastle-On-Tyne

asked the Under-Secretary of State for Foreign Affairs whether he is aware of the continued anxiety of those interested in the trade of Newcastle-on-Tyne to have the United States Consulate reopened; whether he is aware that a unanimous resolution to that effect has been passed by the city council; and whether he can re-open negotiations with the United States Government so as to arrive at a satisfactory solution?

The Secretary of State has received the resolution referred to and is not only aware of, but sympathises with, the sentiments which have inspired it. His Majesty's Government are fully prepared to re-open negotiations on this subject as soon as the United States Government show any sign of desiring to resume them. But at present I can add nothing to the reply which I gave to the hon. Member on 12th March.

In view of the answer which has just been given and because of the injury which is continued to be done to the town of Newcastle-on-Tyne through the absence of this Consulate, I will, on the first convenient opportunity, raise this matter on the Adjournment.

Bulgaria (Revolution)

asked the Under-Secretary of State for Foreign Affairs if his attention has been called to the reported overthrow of the Bulgarian Government by a military revolutionary party; and has he any information whether orders have been given to the Bulgarian Army to mobilise?

The answer to the first part of this question is in the affirmative. In regard to the second part of the question, I am awaiting a report from His Majesty's Minister at Sofia which is on its way.

Has the hon. Gentleman had his attention drawn to the statement in the Press that the Bulgarian army is already mobilised? Is that not causing a good deal of unrest?

I have seen the statement, but there has been no official information received on the subject.

Will the hon. Gentleman call for a report from His Majesty's Minister at Sofia?

Royal Navy

Dockyard Apprentices (Discharges)

asked the First Lord of the Admiralty whether it is to be understood that the apprentices completing their time during August next, or any portion of them (mainly shipwrights), will be discharged from the various yards, more particularly Devonport, where large discharges of ex-apprentices have already taken place in the constructive department?

No decision has been taken regarding any discharges of apprentices in August next, and at the present moment it is not possible to say whether the circumstances at that time will or will not necessitate the discharge of some workmen on completion of their apprenticeship.

Gunnery Ratings (Alternative Employment)

asked the First Lord of the Admiralty whether he can say what arrangements, if any, are made for the alternative employment of rangetakers and higher gunnery ratings of the Royal Navy who, by reason of damage to their eyes through constant use of high-power telescopes, are not up to the standard required for those higher non-substantive ratings, but possess normal vision suitable for normal conditions of service?

Rangetakers and gunlayers who fail to maintain the standard of eyesight necessary for the non-substantive rating which they hold are eligible for the non-substantive rating of gunners' mate, if suitable and recommended; otherwise they are employed in the non-substantive rate of seaman gunner for which they are already qualified.

Compulsory Retirement

asked the First Lord of the Admiralty, with reference to the statement contained in paragraph 42 of Fleet Order 1358 (1922), relative to reduction of age for compulsory retirement of warrant officers of branches not mentioned in paragraph 37, whether he can state if a decision has been arrived at with regard to warrant instructors in cookery?

The question of reducing the age for compulsory retirement in the various warrant officer branches which were not affected by the scheme for the reduction of the lists (Admiralty Fleet Order 1358/22), including warrant instructors in cookery, is now under consideration.

Is the hon. and gallant Gentleman aware that, unless the age limit for such retirements be reduced, there will be no promotions to warrant rank in these cases for a very long time?

asked the First Lord of the Admiralty whether he will give an assurance that the system of compulsory discharges of naval ratings will not again be adopted, and that the form of engagement signed by ratings and their commanding officers will be regarded as binding on the Admiralty as well as the men, subject to existing regulations which provide for discharge for misconduct, unsuitability, etc.?

I am afraid I cannot give the absolute assurance which my hon. Friend suggests, but, as stated by the First Lord on the 12th March in the Debate on Navy Estimates, it is hoped that we have now reached the limit of possible reduction, and that another such period as that through which the Navy has just passed will not recur.

Does not the hon. and gallant Gentleman recognise that this is a breach of contract on the part of the Admiralty, and, if that is the case, will he not reconsider his answer to my question?

I would reconsider it if it were a breach of contract, but it is not.

Mental Cases

asked the First Lord of the Admiralty the numbers of cases of men who served throughout the War with a previous naval record who, since the Armistice, have developed insanity not attributable to, or aggravated by, the War; whether, in these cases, any service pension due to each man concerned is appropriated for his upkeep in the asylum; and whether he will inform the House what allocation in each of these cases from any State source whatever the widow usually receives?

As the reply is somewhat long, I will, with my hon. Friend's permission, circulate it in the OFFICIAL REPORT.

Following is the reply:

Men invalided for insanity not attributable to or aggravated by the Service are entitled to pensions, only provided they have 10 years' service in the case of continuous service seamen, or 14 years in the case of marines and other ratings.

Since the 30th September, 1921, the number of pensions so granted is 18, approximately, out of about 42 cases of men invalided for non - attributable insanity.

Naval ratings so discharged for insanity and granted pensions are admitted to the Royal Naval Hospital, Great Yarmouth, and under the Regulations the pension is appropriated towards the cost of their maintenance. The wife (or children) may, however, receive money allowances from the funds of Greenwich Hospital ranging from 3s. to 5s. a week, or, where the pension exceeds 2s. a day, a sum equal to the difference between the rate of pension and 2s. a day, subject to a minimum allowance of 5s. a week.

I understand from the Ministry of Pensions that during the period between the Armistice and 30th September, 1921, they have only had two naval cases of non-attributable insanity in which there were dependants. In one case the board of guardians claimed the whole of the pension, and the wife received no grant from the State. In the other the guardians claimed 12s. a week, and the balance of the pension (8s. 2d.) was paid to the man's mother.

Anderson Committee

asked the First Lord of the Admiralty whether the Committee presided over by Sir Alan Garrett Anderson will take evidence in relation to their inquiry from officers and men of the Royal Navy; and, if so, whether the officers and ratings selected to give evidence will be appointed by the same procedure as was adopted for appointing witnesses to appear before the 1922 Welfare Committee?

I would refer the hon. Member to the reply given by the late Financial Secretary to the Treasury on the 16th May, and also to my reply of the 30th May to my hon. and gallant Friend the Member for North Portsmouth (Sir B. Falle).

Ex-Service Men

Government Departments

asked the Minister of Labour whether the letter from Sir William H. Purchase (Chairman, National Appointments Committee) that appeared in the "Times" of 4th June was issued with his approval; and whether, since there are 7,000 ex-officers and men of similar standing unemployed, whose misfortunes are entirely due to their War service, he will make representations to the Treasury that the appointments of officers in receipt of service pensions of £500 a year and upwards in the Ministry of Pensions and other branches of the Civil Service should be terminated, and the vacancies allotted to ex-service men who are not in receipt of service pensions?

The letter from Sir William Purchase, in the "Times" of the 4th June, appealing to employers to give assistance in the placing of the ex-officers still on the register of the Appointments Branch, was issued after Sir William had consulted with me. I am glad to say offers of vacant posts have resulted from the letter. The statement that there are approximately 7,000 ex-officers and men of similar standing unemployed is, I am sorry to say, correct. With regard to the second part of the question, I would refer to the answer given by my right hon. Friend the Financial Secretary to the Treasury on the 4th instant to the hon. Member for Bow and Bromley (Mr. Lansbury).

Trainees (Electrical Industry)

asked the Minister of Labour, in view of the fact that 50 per cent. of the ex-trainees in the electrical industry are at present unemployed, owing to the inability of employers to find improver vacancies, whether the Ministry is prepared to allow the trainees at present unplaced to complete their three years' training in Government instructional factories?

At least 72 per cent. of the men trained in the electrical industry are known to be employed at the trade. A period of experience in an employer's workshop is necessary to complete the course of training, and I fear the suggestion contained in the question would not be a satisfactory alternative. Every effort is being made to obtain improvership vacancies by a canvassing staff specially appointed for the purpose and by other means.

Is the right hon. Gentleman aware that a very large percentage of these men who are but of work have been waiting for improverships for twelve months, and that under these conditions they are rapidly forgetting what they learned?

I am quite alive to the difficulty, but we really must, as I have said on more than one occasion in this House, look to improved trade conditions for the real solution. At the same time, as a temporary measure, I have instituted at the Ministry, in connection with the Government instructional factories, refresher courses for men who have been for some considerable time unable to obtain improvership vacancies, and these refresher courses, on the whole, are working satisfactorily.

May I take it that men who have been endeavouring to obtain improverships for over 12 months will now have employment obtained for them?

I cannot give any definite undertaking of that kind. I am doing my best, by means of the machinery of refresher courses and in other ways, to deal with this difficulty, but I cannot give a definite pledge quite on the lines suggested.

Unemployment

Benefit

asked the Minister of Labour if he is aware that three workmen, Messrs. Morris Friel, John Garvie, and Hugh McLaughlin, employed by Messrs. John Brown and Company, Limited, were suspended by their employers and had their insurance books withheld for two days, and although unemployed for six days were refused unemployment benefit; that if they had demanded their books they would have been disqualified from benefit on the ground that they had voluntarily left their employment; and will he inquire into this case?

The Unemployment Insurance Act, 1923, passed last April, enables me for the future to antedate claims in circumstances such as those described, but these claims arose before that Act came into operation, and I have no power to antedate them. The men would not, in fact, have been disqualified for benefit on account of demanding their unemployment books after suspension by the employer. Alternatively, they would have been allowed to make a claim without lodging their books, subject to being able to give a good explanation for not being in possession of their books.

Is the right hon. Gentleman aware that in many cases the Exchanges have refused to register people unless they can produce their books?

asked the Minister of Labour if his attention has been called to the case of Mr. Robert Welsh, of 3, Plant Street, Dennistoun, Glasgow, who was unemployed and in receipt of 33s. in all per week from the Employment Exchange and Glasgow Parish Council, and who, in consequence of the fact that he took a job for the evenings in a picture house for which he received 15s. a week, was deprived of unemployment benefit and parish relief with the result that his income was reduced from 33s. a week to 15s. a week; and will he take steps to prevent this man being put in a worse position financially on account of his taking such work in the evening?

My attention had not been called to this case, but on the facts stated the disallowance of unemployment benefit would appear to be in accordance with the requirements of the Unemployment Insurance Acts, which I have no power to alter. The question of parish relief is not one for my Department.

In view of the absurd position in which men are placed by this provision, will the Minister introduce legislation in order to correct this defect in the Unemployment Act?

I am not prepared to say that off-hand. The burdens of the Ministry of Labour are fairly heavy already without taking on the responsibility for the administration of the Poor Law.

North-East Coast

asked the Minister of Labour the total amount of unemployment in the North-East Coast area for each of the last three fortnights for which the figures are available?

The number of persons on the live registers of Employment Exchanges in the North-East Coast area on 4th June, 1923, was 104,866. The figures on 21st May and 7th May were 101,838 and 101,683, respectively.

In view of these serious figures, showing an increase in unemployment in this district, will the right hon. Gentleman represent to the Prime Minister the desirability of appointing a special committee, as he has done in Nottingham, where the percentage of unemployment is not so great.

I think that that question is one which would probably be better addressed to the Prime Minister.

Is the right hon. Gentleman aware that the increase in unemployment in this area is due to the fact that there is a lock-out in the shipbuilding industry, and will he use his good offices to bring that to a speedy termination?

I do not quite accept the statement of facts put forward by the hon. Member.

SEAMEN (S.s. "MARVALE")

asked the Minister of Labour whether he is aware that the crew of the "Marvale," the wrecked Canadian Pacific liner, only received wages up to the day when the vessel went on the rocks; and that they were 15 days on the voyage home on the "Melita," for which they received no pay; and whether he proposes to allow these men to claim unemployment benefit from the date of shipwreck until such time as they are able to obtain other employment?

Under Section 8 (3) of the Unemployment Insurance Act, 1920, an insured contributor is disqualified for unemployment benefit, subject to the provisions of the Act, while he is resident whether temporarily or permanently outside the United Kingdom. It seems possible that I may have power under Section 39 of the Act to make a Special Order for the purpose of dealing with cases such as those mentioned in the question. I am considering the matter, but at present I have no authority to allow any period spent outside the United Kingdom to count for benefit.

Having regard to the serious hardship to which these men have been exposed, will the right hon. Gentleman treat this matter sympathetically?

I certainly appreciate the difficulty and endeavour to treat all cases of this kind with sympathy. I am pressing the consideration of the matter on, but it is a legal question, and I have to take legal advice. There shall, however, be no undue delay in the matter.

Reafforestation, Barrow-In-Furness

asked the Minister of Labour whether, in view of the distress at Barrow-in-Furness and the facilities which exist for carrying out in the immediate vicinity of the town a considerable scheme of reafforestation, he will consider whether such work comes within the scope of the Committee contributing unemployment grants; and whether, in that case, this body will consider a formal application on the subject if submitted to it?

I have been asked to reply to this question. I beg to refer the hon. Member to the answer which I gave to his question on the 16th ultimo, and to the answer which the Financial Secretary to the Treasury gave to his question on the 4th instant. The position as far as the Forestry Commissioners are concerned remains unchanged.

Every avenue to bring work to Barrow having been explored, and this being a method of creating employment, can the hon. Gentleman not give it his sympathetic attention and do something in the matter?

It is all a question of funds. If the expenditure is authorised, the Commissioners will be very glad to explore any scheme that may be offered.

Can the hon. Gentleman inform me what method could be adopted to raise funds?

I can only suggest that the hon. Member should communicate with the Chancellor of the Exchequer.

Statistics

asked the Minister of Labour which of the following countries, Great Britain, France, Germany, Italy, Holland, and Belgium, has the most unemployment at the present time?

No statistics are available giving the total number of persons unemployed in the countries referred to. In Great Britain and Northern Ireland 10·7 per cent. of the workpeople insured under the Unemployment Insurance Acts were out of employment on 21st May. Figures for certain other countries are given monthly in the "Ministry of Labour Gazette," a copy of which I am sending to the hon. Member. Owing to the different nature of the returns on which these figures are based, no comparison can properly be made between the percentages for the various countries.

I know of no country which is shouldering such a big burden in respect of unemployment as this country.

Is it not a fact that France is importing labour from this country because there is no unemployment in France?

Is it not a fact that there is no other country than this that requires so much provision for unemployment?

I am sorry to say the burden of unemployment is undoubtedly very great, but my previous answer remains good, that I know no country where such large efforts are being made to deal with it. With regard to unemployment in France, the supplementary question is substantially correct, that is to say, labour is being imported into France and, as I have already informed the House, I have been able to make arrangements for some 30 or 40 skilled artisans from this country to go to France under conditions which were arranged beforehand.

Cement Contract, Middlesbrough

asked the Minister of Health whether the Middlesbrough Corporation, which has obtained the sanction of the Unemployed Grant Committee for considerable road and other public works, will be disqualified from receiving these grants because they have accepted a tender for a satisfactory foreign cement at 46s. per ton, instead of placing their orders with the British Cement Trust at 57s. per ton; and are they at liberty to continue to make similar purchases in the future without jeopardising the receipt of payment from the Unemployed Grants Committee?

Discretionary power has been given to the Unemployment Grants Committee to award grant in cases where they are satisfied that there are special grounds for obtaining supplies from abroad. The particular case mentioned by the hon. Member is being considered by the Committee.

Does the right hon. Gentleman realise that fresh supplies have to be got by the corporation this month, and that it is necessary to know whether they are at liberty to buy abroad on the same terms and conditions as before?

Fleckney and Kibworth

asked the Minister of Labour whether he is aware that unemployed men living at Fleckney have to tramp nine miles in order to register at the Employment Exchange at Leicester, and that those living at Kibworth have to tramp six miles in order to register at Market Harborough; that on 15th December, 1920, the Minister of Labour admitted that great hardship was involved and promised to take immediate action, and that the hardship still remains; and whether he will take immediate action to remedy such a state of affairs?

A temporary employment office was set up in December, 1920, at Fleckney, but was closed in January, 1922, when the number of persons attending had fallen to 18. Subsequently applicants for benefit from Fleckney had to attend once a week at Leicester, but on 14th May last arrangements were made to deal with them by post. The distance from The Bank, Kibworth, to the Market Square, Market Harborough, being just under six miles, Kibworth applicants are required to attend once weekly in accordance with the procedure applying to residents between four and six miles from the nearest office. I am constantly receiving requests for increased employment office facilities in various districts, many of which have stronger claims than Kibworth, and I am afraid the expenditure would not be warranted under existing circumstances.

Co-Operative Wholesale Society (Trade Dispute)

asked the Minister of Labour whether he has taken action with regard to the strike between the Co-operative Wholesale Society and its employés who are members of the Distributive Workers' Union, in view of the fact that 60,000 employés in co-operative retail shops have been instructed to refuse to handle the products of the co-operative wholesale factories; and will he ascertain the reason for the failure to avoid this strike?

The negotiations which have been proceeding between representatives of the Trade Union Congress General Council and the directors of the Co-operative Wholesale Society are to be resumed on Friday next. In the circumstances, I do not think it desirable to make any further statement on the matter.

Will the right hon. Gentleman endeavour to ascertain how this industrial dispute has cropped up in an institution which is not run for personal profit?

National Health Insurance

Certificates (Advertisements)

asked the Minister of Health whether he is aware that the backs of medical certificates issued in connection with National Health Insurance are used to advertise articles of diet sold by a certain company; and, in view of the undesirability that medical men should be compelled to distribute certificates bearing what may easily be misconstrued by patients as being their doctor's recommendation of particular foods or drinks, will he exclude advertisements of this type?

asked the Minister of Health if he is aware that an advertisement in large type, recommending a certain firm's butter and tea, has been printed on the back of medical certificates to be used by doctors under the National Health Insurance Act; and, in view of the fact that the medical practitioners concerned object strongly to acting as advertisement distributing agents, will he take steps to prevent any further issue of these certificate forms?

asked the Minister of Health whether he has received objections from the Medical Practitioners' Union against the printing of advertisements on the reverse side of medical certificates issued for national health insurance purposes; and if he is prepared to withdraw the same owing to the objections of patients and the medical profession?

asked the Minister of Health if he has sanctioned the printing of trade advertisements on the back of medical certificates required to be issued by doctors under the National Insurance Acts; whether he is aware that in certain areas certificates, urging the recipients to buy Maypole tea and butter, have already been supplied to practitioners; that great indignation exists in the medical profession on the matter, and that many doctors have declared their intention to refuse to use such certificates; and whether he will immediately cancel the order for printing any further supplies of these documents?

asked the Minister of Health if he is willing to substitute for the advertisements now appearing on the back of National Health Insurance medical certificates recommending certain butter and other foods purveyed by private firms a statement on the Government's behalf of the advantages of health insurance?

The considerations which led the Government to sanction the printing of advertisements on the back of this form were explained by my hon. Friend the Paymaster-General in reply to the right hon. Member for Derby on the 16th May. Representations have been received that the advertisement of foods is open to objections, and I will consult the Stationery Office as to the possibility of securing other advertisements without loss of revenue when the present contract terminates, if there should then still be room for advertisements on the form.

Will the profits of the advertisement go to the insured person, who has to pay the money, or to the State?

Has the right hon. Gentleman himself seen the certificate with the advertisement thereon and does he appreciate the fact that a medical certificate issued by a doctor to a patient is a document of a very personal and intimate character, as indeed is shown by the fact that his own Department prints the word "Confidential" across it, and in these circumstances does not he realise that any kind of advertisement on a document of that sort in the hands of a patient of the less educated sort is taken as a personal recommendation from the doctor, and does he not appreciate that that places the doctor in a very undignified and unfair position?

Is it the case that the sum obtained at the Stationery Office for this advertisement on millions of forms is £135 a year, and does the right hon. Gentleman think that sum is adequate compensation for the disagreeable incident of the advertisement?

Will the right hon. Gentleman arrange for samples to be sent out with these certificates?

The sum named by my right hon. Friend is correct. It is only £135. I have said I recognise that objections are taken, and I will try to have it altered as soon as the contract is ended.

May I ask the Prime Minister whether it is proposed to adopt a scheme of State Socialism?

asked the Minister of Health what revenue is expected to be derived in a year by utilising the back of the medical certificates, granted in connection with the National Health Insurance, for advertising purposes; particularly what revenue is derived from the advertising on the back of the special intermediate certificates form med. 40b (revised); and whether he has had any expressions of disapproval of this practice from the medical profession?

The revenue from advertisements on the various medical certificates is estimated at £405 per annum (including £270 per annum from form med. 40b) and this sum is one of a large number of items of receipts from advertisements on Government publications (other than the Telephone Directory) which it is hoped will amount to about £30,000 for the current financial year. The answer to the last part of the question is in the affirmative.

We have just been told £135 was the amount from this advertisement. Which is the correct figure?

I think the question is a different one. Form 40b, which the hon. and gallant Gentleman asked about, brings in £270 per annum.

The hon. and gallant Gentleman must ask me another question. I cannot carry particulars of patent foods in my head.

In view of the fact that nothing has been paid for the advertisement on the Census paper, does the right hon. Gentleman guarantee that this small amount will be paid to the Government?

Doctors (Appointments)

asked the Minister of Health whether his attention has been called to the complaint of English medical men in that Wales, Scotland, and Ireland insist upon having only men of their own nationality in their regions whereas in England many of the more lucrative appointments are held by other than Englishmen; and whether he will see that all doctors appointed by the Ministry of Health for England shall be English?

No general complaint of the nature referred to in the hon. Member's question has reached the Ministry of Health.

Is it not a fact that the most lucrative posts all over the world are held by Scotsmen?

Insurance Act (Prolongation)

asked the Minister of Health whether he intends to renew the National Health Insurance (Prolongation of Insurance) Act for the year 1924?

Housing

Empty Houses

asked the Minister of Health whether he is aware that there are thousands of large empty houses in London, more especially in the Mayfair district; and whether, in view of the so-called housing shortage, he can find some means of turning to account these unoccupied premises, either by facilitating their conversion into flats or otherwise?

I am aware that there are many houses in London the conversion of which into flats would be of material assistance towards meeting the housing shortage, and I have included a provision in Clause 5 of the Housing Bill which I hope will assist in this direction.

Has the right hon. Gentleman received representations from the London County Council that some of these empty houses should be subject to rates and should not be held off the market?

Colliery Companies' Houses (Repairs)

asked the Minister of Health if he proposes to institute an inquiry into the incidence of the cost of repairs in the case of the tenants of colliery companies' houses, as suggested by the Onslow Committee, before the Committee stage of the Rent and Mortgage Interest Restrictions Bill is proceeded with?

I have been asked to reply. I have inquired very carefully into the manner in which the Miners' Wages Agreement of 1921 applies in the case of colliery-owned houses, and am satisfied that the principles upon which these items are dealt with in the wages ascertainment accounts are not unfavourable to the tenants. When houses are let at their full rack rent, both the rents and the expenses of repairs, etc., are entirely excluded from the wages ascertainment accounts, and so no question arises. Where houses are provided free or at less than their rack rent, the difference between the Schedule A gross assessment and the rent received is included in the accounts as a charge against the industry, but the cost of repairs is not admissible as a further charge. Any increase in rent, therefore, which is charged to the tenants, reduces pro tanto the amount charged against the industry.

Sanitary Inspector, Ledbury

asked the Minister of Health whether he can state the result of his communications with the Ledbury rural district council regarding the proposed appointment of a sanitary inspector at a salary of £150 per annum; and whether the advertisement for this post was approved by him before it was published?

The council have received applications from a large number of qualified and experienced candidates, and will have no difficulty in suitably filling the post. In the circumstances, I propose to approve the appointment, in the hope that the salary may prove adequate to retain the services of a satisfactory official.

Assisted Milk Supply

asked the Minister of Health whether the form of application for assisted milk supply used by the Hertfordshire County Council is in use by other authorities with the consent of the Ministry of Health?

also asked the Minister of Health whether he is aware that, in the form of application for assisted milk supply used by the Hertfordshire County Council, applicants are required to supply birth certificates in respect of children under three years of age for whom assistance is asked; that the application must also be accompanied by a medical certificate stating that the applicant is by reason of ill-health in need of extra milk; that the form includes such inquisitorial questions as the name and address of the husband's employer, together with his ticket number and the name of the foreman under whom he works; that the amount of milk supplied to mothers and babies in the Letchworth area has fallen from 6,660 pints for mothers and 5,901 pints for children in 1920 to 112 pints for mothers and 280 pints for children in 1922; and that this has been accompanied by an increase in infant mortality from 43 per 1,000 in 1920 to 63 per 1,000 in 1922; and whether, in view of these facts, he will take steps to remove the restrictions referred to?

I am aware of the procedure of the Hertfordshire County Council in the matter of the assisted milk supply, which is generally in accordance with the conditions necessarily laid down by my Department to avoid lax administation. I have no recent information as to the amount of milk supplied in the Letchworth area, but I have instructed one of my medical officers to investigate the matters referred to in the question.

Arising out of the obvious results which accrue from this inquisitorial form used by the Ministry and local authorities, will the right hon. Gentleman take steps to remove those grievances which are alleged in the question and which amount to a scandal?

The question connects the rise in the rate of infant mortality with the decrease in the amount of milk supplied. Before I can take any action in the matter, I must first of all make an enquiry to see whether the one is really the result of the other.

What has the name of the father's employer and the ticket number, or the name of the foreman, to do with the milk supply of the child?

It is obvious that I cannot allow milk to be supplied ad lib to anyone who comes to ask for it. It is supplied free. I must have inquiries made to see that it is not abused.

Will the right hon. Gentleman make enquiries as to what has happened at Letchworth and also as to what is happening in these districts where the poor women and children who are in need of milk get it and the consequent diminution in the death rate amongst the children?

Why is a medical certificate needed for children under three years of age and not over three?

Small-Pox, Derbyshire

asked the Minister of Health whether his attention has been drawn to an expression of opinion by the medical officer of health for Chesterfield that the outbreak of disease in Clown, Bolsover, Ilkeston and other places in Derbyshire, of recent date, which has been notified as one of small-pox, is not due to that complaint, seeing that its effects have none of the usual characteristics of face disfigurement and that no death has occurred in consequence; and will he institute further inquiry with a view to a correct and definite diagnosis being reached?

I assume that the hon. Member is referring to certain statements which appear in the annual report of the medical officer of health of Chesterfield for the year 1922. If so, I may point out that in that report the medical officer acknowledges that his view is shared by only a very small minority. As regards the second part of the question, I may say that when similar statements were made last year an expert Committee was appointed by my predecessor to examine certain patients in Chesterfield and elsewhere who had been notified as suffering from small-pox. This Committee arrived at the conclusion that the disease was in fact small-pox of a mild type, a conclusion which is supported by subsequent investigations undertaken by medical officers of my Department.

Skimmed Dried Milk

asked the Minister of Health whether he is aware that skimmed dried milk is now being sold in this country with no sufficient indication that it is unfit for children as is required in the case of condensed milk; and whether he will enlarge the Regulations under the Milk and Dairies Act of 1922 to cover this development?

The answer to the first part of the question is in the affirmative. As I informed my hon. Friend, the Member for the Stone Division, on the 31st May, I am considering Regulations to provide for the proper labelling of dried milks.

Can the right hon. Gentleman say when the Regulations are likely to be in operation?

The Regulations are in draft, and I expect to be able to consider them very soon.

War Charges (Validity) Bill

asked the Prime Minister whether it is intended to proceed with the War Charges (Validity) Bill.

Yes, Sir, the Government certainly intend that this Bill shall be passed in the present Session.

Pre-War Pensions

asked the Prime Minister when an announcement as to the revision of pensions of pre-War pensioners may be expected; and whether such increase will apply to pensioners of the late Royal Irish Constabulary?

The Government hope to be able to make an early announcement on the general question and on the position with regard to Royal Irish Constabulary pensioners.

Egypt (Bomb Outrages)

asked the Prime Minister whether any of the actual perpetrators of the bomb outrages in Egypt have been arrested; how many members of the Egyptian Nationalist party are now in prison on suspicion of being concerned with those outrages; how many of them are now in prison without any explanation having been given for their arrest; and if, in view of the long period for which some of these persons have already been detained, His Majesty's Government will recommend to the High Commissioner the advisability of expediting the trials of these persons and ensure their being brought before the Egyptian Courts?

I cannot with propriety comment on the guilt or innocence of any of the 14 prisoners now on trial, nor can I indicate the political allegiance of the other 53 persons under detention on the 2nd June on suspicion of complicity in the murder conspiracy. I know of no prisoners for whose arrest explanation has not been given. As regards the last part of the question, I would refer the hon. Member to my reply to him on the 16th May and to my reply to the hon. Member for Ilkeston on the 7th June.

Will not the Government consider whether the continued detention in prison uncharged and untried of a number of notable Egyptians under suspicion is not contrary to our highest traditions, repugnant to national justice, and calculated to stimulate hostility, not only in Egypt but throughout the East?

War Bond Policies

asked the Prime Minister whether, in view of the fact that last week in the Hull County Court Mr. G. W. Dewland, an ex-service man, one of the 310,000 holders of lapsed 5 per cent. War Bond policies, secured judgment against the Prudential Assurance Company for the refund of all premiums paid on account of fraudulent misrepresentation, the Government will now reconsider their refusal to give the holders of lapsed War Bond policies the benefit of the protection of the Industrial Assurance Bill or, failing that, grant an inquiry into the circumstances attending the issue of these 5 per cent. War Bond policies?

As the answer is a long one, I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.

Following is the answer:

I have seen a report of the case. "The Director of Public Prosecutions informs me that his attention also has been called to a report of the case." The inclusion of lapsed policies in Section 3 of the Industrial Assurance Act would not enable the Commissioner to deal with cases of alleged misrepresentation, as his powers under that Section are limited to revising the conditions as to lapse and surrender contained in the policy. The Prudential Assurance Company is issuing a public notice of its willingness to continue to deal with cases of hardship arising from the lapse of War Bond policies before they have been in force two years, and the case which has been referred to shows that if there has been misrepresentation the person aggrieved can apply successfully to the ordinary courts for redress. In the circumstances the Government is still of opinion that no good purpose would be served by the suggested inquiry.

Cheese

asked the Minister of Health if his attention has been called to a recent prosecution at Bow Street at the instance of the Holborn Borough Council affecting the sale of cream cheese, and the declaration of the magistrate that in the interests of the consumer standards of quality should be fixed for cheeses of all kinds; and whether he will take steps in this direction, as recommended by the Linlithgow Committee on Agricultural Produce?

The answer to the first part of the question is in the affirmative. I will confer with my right hon. Friend, the Minister of Agriculture, who is, I understand, considering the suggestion that a minimum standard of fat-content should be prescribed for cheese with other recommendations of the Linlithgow Committee.

Gipsy Encampments, Wimborne and Cranborne

asked the Minister of Health whether his attention has been called to the inconvenience and injury to the value of property caused by the large number of gipsy encampments in the neighbourhoods of Wimborne and Cranborne, in the county of Dorset; and whether he will introduce legislation conferring upon local authorities the power to deal effectually with the matter?

I have received a representation from the District Council on this subject, but I cannot at present give any undertaking that the Government will introduce legislation dealing with the matter.

House Property (Income Tax Assessments)

asked the Minister of Health in how many cases the recent increases in assessments will have the effect of placing dwelling-houses beyond the limit within which they enjoy the immunities provided by The Increase of Rent and Mortgage Interest (Restrictions) Act, 1920?

The hon. Member is under a misapprehension. An increase in assessment does not affect the position of a house as regards the Rents Act. A house is either within or without the scope of that Act according to the amount of its standard rent or standard rateable value, and these figures are the rent or rateable value in 1914 or when the house was first let.

Tuberculosis (Spahlinger Treatment)

asked the Minister of Health what steps are being taken by the Ministry of Health to introduce into this country the Spahlinger treatment of tuberculosis?

I would refer my hon. and gallant Friend to the reply on this subject which I gave on the 21st March to my hon. Friend the Member for the Withington Division. I regret that owing to supplies of the complete serum and vaccine not being available the opportunity for a further trial of this method of treatment in this country has not yet arisen.

Water Supply (Crawley and Ifield)

asked the Minister of Health whether, when the promised investigation into the Crawley and Ifield water supply is being held, facilities will be granted to any members of the public who desire to make representations on the matter; and whether the investigation will include an examination of the sanitary conditions of any public conveniences during the hours when the water supply is cut off?

If the objections which have been made to the company's application are not withdrawn, a public local inquiry will be held, at which objecting parties can attend and state their views. Any investigations which are necessary will be made into the sanitary conditions.

Ecclesiastical Commissioners (Administration)

asked the hon. Member for North-East Leeds, as representing the Ecclesiastical Commissioners, the total amount of money administered by the Ecclesiastical Commissioners; and what is the establishment retained to administer it and the total annual cost thereof?

With the hon. Member's permission, I will circulate the answer in the OFFICIAL REPORT.

Following are the statistics supplied:

The revenue carried to the Common Fund of the Ecclesiastical Commissioners in the last financial year (to 31st October, 1922) was £2,296,000, being as to £1,364,000 from rental of estates and as to £932,000 from dividends and interest. In addition, the Commissioners administer on behalf of Benefices and for other Ecclesiastical purposes revenues from Trust Funds under General and Special Acts of Parliament and Orders in Council amounting to about £770,000 per annum. The Commissioners' authorised official establishment for all their functions (which include much more than the administration of these estates and revenues) consists of a Secretary, officers and clerks numbering 124. The official establishment expenses (including incidental expenses as well as salaries, pensions, etc.) amounted last year to £78,700. The Commissioners also employ land agents, solicitors and architects.

Imperial Conference (Education)

asked the President of the Boarl of Education why no woman was appointed among the representatives of the Board of Education as the forthcoming Imperial Conference on education?

The delegates appointed by the Board of Education are the Board's principal administrative officers and their librarian and information officer. Some of the Board's principal women officers will, I hope, attend during the discussions of the Conference.

Is there any reason why on a subject like education women should not be fully qualified?

There is no reason at all, but the Board is represented by its principal officers, and those principal officers are men.

Government Departments

Board of Education

asked the President of the Board of Education whether he will take steps to reduce the staff employed at the Board, seeing that the number of employés has risen from 970 in 1913–14 to about 1,347 in the present year, and the cost from £200,000 odd to over £430,000?

The staff of the Board of Education is kept under constant review, and reductions are made from time to time as opportunity offers. The figures quoted by my hon. Friend are those shown under Sub-head A (1) (Administration) of the Board's Vote for the financial years 1913–14 and 1923–24, respectively. For the purpose of obtaining a true comparison between the two years there should be added to the number 970 for 1913–14 165 persons, for whom provision was made but whose numbers were not shown in the Estimates for that year, making a total of 1,135. The numbers for 1923–24 show, therefore, an increase over those for 1913–14 of 212, of which 174 is attributable to the additional work involved by administration of the School Teachers (Superannuation) Acts, and the remainder, namely, 38, to general increase of the work during the last 10 years.

Will the right hon. Gentleman consider the necessity of reducing the staff, seeing that a great part of the work has been transferred to the local authorities, with a consequent enormous increase in the cost of local administration?

I can assure my right hon. Friend that I am always considering that. The staff has been reduced during the last 12 months.

Is it not a fact that there are fewer pupils in the schools at the present time?

Is it not a fact that the work of the Board has very largely increased of recent years, owing to the fact that new Departments of work have been undertaken by the Board, that the staff of the Board is now at its minimum and worked as hard and even harder than it ought to be—[HON. MEMBERS: "Speech!"]—and that the total cost does not, as far as I recollect, amount to more than 1 per cent. of the total expenditure of the Board?

Women (Resignation on Marriage)

asked the Financial Secretary to the Treasury how many women during 1921, 1922 and the present year employed in Government Departments were discharged or compelled to resign owing to their marriage after entering the Service?

Can the right hon. Gentleman say what is the Government's policy in this matter?

The whole question of resignation on marriage is a rather difficult one. The hon. Gentleman asked for figures. If he wants full details of the terms and will put a question on the Paper I shall be glad to give him the information.

American Cotton

asked the President of the Board of Trade the amount of American cotton used by Great Britain, Europe, the United States of America, Japan, and Mexico since 1st August, 1922; and the percentage these amounts show to the quantity used in 1913–14 by the same countries?

As the answer involves a table of figures, perhaps my hon. Friend will allow me to circulate it in the OFFICIAL REPORT.

Is the noble Lord aware that from 1st August the United States are prohibited from selling American cotton under the Liverpool standard?

Following is the answer:

The following statement gives, from the United States Trade Accounts, the exports from that country to various countries up to February last, but these quantities do not necessarily agree with the quantities used in the respective

STATEMENT showing the (1) Exports of American Cotton to the undermentioned destinations, and (2) The Consumption of Cotton in the Cotton Industry of the United States, during the periods shown.

——

1st August, 1913, to 28th February, 1914.

1st August, 1922, to 28th February, 1923.

Percentage in 1922–23 compared with 1913–14.

Exports of American Cotton to—

Bales.

Bales.

United Kingdom

2,737,427

1,155,367

42·2

Other European Countries

4,069,650

2,024,502

49·8

Mexico

29,335

5,074

17·3

Japan

289,098

398,302

137·8

Cotton Industry of the United: States * ——

Consumption by Mills

3,272,000

3,839,000

117·3

* Including Foreign as well as American Cotton.Including Foreign as well as American Cotton.

Explosives, Liverpool Docks

asked the Under-Secretary of State for War whether, in view of the fact that an explosion of a large quantity of picric acid in the Liverpool docks has recently only been prevented by the action of some men, at great personal risk, he will immediately give instructions that explosives so dangerous to life and property should not be sent by his Department through this populous and important area; and will he say in what way the Government propose to mark their appreciation of the gallant conduct of the men who averted a terrible catastrophe?

asked the Secretary of State for the Home Department whether his attention has been called to the accident which occurred in Liverpool on the 30th May last when a crane fell across some wagons containing a huge consignment of picric acid lying in the North Dock and sent there by the War Office for shipment to Portsmouth, the fire under the boiler of the crane falling under the wagons; whether he is aware that a terriffic explosion, threatening the whole countryside, would certainly have happened had it not been for the bravery of four men, who extinguished the fire at great danger to themselves; whether he will give urgent instructions that no more shipments of this dangerous explosive be landed in the

countries, having regard both to changes of ownership of cotton en route from the United States, and also to re-exports from the countries to which cotton is exported:

Liverpool docks; and whether the Government will consider supplementing the small rewards given to these men for their heroic work in saving the city from terrible disaster to life and property?

I have been asked to answer these questions. As my hon. Friend indicated on Monday, investigations are being made with a view to seeing whether any additional precautions can be taken in regard to further necessary moves of explosives, and instructions have been given that, pending these investigations, no further moves of this magnitude are to take place. I fully recognise the services rendered by the men who put out the fire, and when a further report on the circumstances, which is at present awaited, has been received, I will consider sympathetically the question of supplementing the rewards which I understand have been paid to them by the harbour board.

I beg to give notice that I will raise this question on the Adjournment at the earliest possible moment.

Army Pensioners (Temporary Commissions)

asked the Under-Secretary of State for War whether he will consider the necessity of altering the anomaly whereby Army pensioners who were commissioned during the late War are only pensioned at warrant or non-commissioned officers' rate, of approximately, £75 per annum, with no status as officers, and on death widows and children receive no pension, as compared to the Marines warrant or non-commissioned officers who were commissioned and pensioned at officer rates, i.e., £250 per annum, plus £6 for each year of commissioned service, and on death widows receive approximately £80 per annum, and each child approximately £30, and both rank and service held count for pension; and whether, as the number of officers concerned is only about 1,000 and as the pension list automatically diminishes each year, he will consider granting the same scale of pensions to the Army pensioners referred to?

This question has already been very fully considered. The pensioners in question were given temporary commissions and like temporary officers in general were not given officers' service pensions on demobilisation. But they drew their Army pensions in addition to full officers' pay while serving, they received the temporary officers' gratuity which was much in excess of that given to the regular officer, and their pre-War pensions have been re-assessed on the new scale. The number of Marine officers concerned was very small, but while the number of Army pensioners affected is not exactly known, it is estimated to be in the neighbourhood of 3,000 and the total cost of pensions on the Marine scale would be some four millions. I am afraid that I cannot, with due regard to the interests of the taxpayer, recognise the claim, at such large cost, of these individuals to a minimum life pension of £250, with the other benefits mentioned in the question, in return for perhaps one or two years' total service as an officer.

How did the Admiralty get so much better terms than the Army? Is it possible to put this matter right by the issue of pay warrants?

The hon. and gallant Gentleman had better put that question to the Admiralty. They may tell how they were able to induce the Treasury to give these more generous terms, and it will also be for them to consider the question of taking back what they have already given, which, I think, would be impossible.

If the hon. and gallant Gentleman will study the answer he will see that they got their gratuity and their pre-war pensions on the 1919 scale, and also their pensions all the time they were serving.

Miner's Cramp

asked the Secretary for Mines whether his attention has been called to Professor Moss's proposed salt remedy for miners' cramp; and whether the Government is investigating its utility?

Yes, Sir; Professor Moss is working in close collaboration with the Committee on the control of atmospheric conditions in deep and hot mines, which is one of the research Committees now attached to the Safety in Mines Research Board of my Department.

Transport

Overhead Electric Lines (Sussex)

asked the Parliamentary Secretary to the Ministry of Transport whether he is aware that the Haywards Heath and District Electricity Company are threatening and commencing to erect overhead electric lines in the residential districts of Haywards Heath and Cuckfield, and the picturesque village of Lindfield, in the County of Sussex; that the large majority of the residents are strongly opposed to such action; and whether he will see that his consent is not given to the erection of overhead lines until the residents have had an opportunity of having their case heard by the Ministry?

The local authorities concerned were given an opportunity of expressing their views as far back as last August, and in consequence of objections raised by them, the company have since been endeavouring to find an alternative scheme. I understand that a satisfactory alternative has now been found and that the local authorities concerned have passed a resolution withdrawing their previous objection. I may add that in such cases I am anxious to give every consideration to objections raised on the score of injury to the beauty of the landscape, but have, of course, to consider what burden may be laid on the undertaking by any steps I may take.

When such powers are asked for, are any advertisements posted to persons in the district concerned, as apparently the inhabitants did not even know that these powers were sought?

I understand that before sanction is given in nine cases out of 10 a public inquiry is held. Where there is objection a public inquiry is always held.

Reckless Driving

asked the Parliamentary Secretary to the Ministry of Transport if his attention has been called to the reckless driving and the lack of concern shown to injured persons, particularly in a recent inquest at Nottingham; and will he consider recommending an increase in penalties, with the view of preventing a repetition of such cases?

My attention has not been drawn to the particular case referred to by my hon. Friend, but I am making inquiries into the matter. On the general question I may say that recommendations aiming at an increase in the severity of the penalties for driving to the danger of the public and for other similar offences are contained in paragraphs 115–119 and 212–214 of the last Report of the Departmental Committee on the Taxation and Regulation of Road Vehicles. These—with other points—will be considered when an opportunity arises to introduce general legislation on the Report of the Committee.

Is the hon. and gallant Gentleman aware that since the question was put down Mr. Richard Threlfall, of Blackpool, was knocked down by one car and run over by another, and that up to the present neither car has been identified?

Naval and Military Pensions and Grants

Mother's Pension (Mrs. Mellan)

asked the Minister of Pensions if he is aware that the widowed mother of the late Corporal Stanley Mellan, No. 265,827, King's Own North Lancashire Regiment, is only in receipt of a pension of 5s. per week, and that this woman is largely dependent upon charity; and will he have inquiry made with the view of increasing this pension by an amount somewhat commensurate with the financial loss she has sustained by the death of her son?

This case was fully considered a year ago when the mother made application for an increased pension, but no grounds could be found for making a higher award. If, however, Mrs. Mellan's circumstances have since changed for the worse, she should make renewed application through the local office.

NORTHUMBERLAND FUSILIERS (M. McCLUSKEY)

asked the Minister of Pensions if he is aware that Michael McCluskey, No. 341,106, Northumberland Fusiliers, was an inmate of the tuberculosis colony at Englethwaite, near Carlisle; if he has been discharged from that colony; why the usual custom of paying the 100 per cent. pension for a stipulated period has been departed from in this case and only 50 per cent. is being paid; and will he have inquiry made with the view of securing for this man the ordinary treatment in regard to pension, and have it dated back from the date of his discharge from Englethwaite?

In the short time available, my right hon. Friend has not been able to complete his inquiries into the case of this pensioner, but he will communicate with the hon. Member as soon as possible.

Machine Gun Corps (H. Watson)

asked the Minister of Pensions if he will cause to be, re-opened the case of H. Watson, of 18, Wingfield Street, Bradford, who enlisted in July, 1915, in the 3rd/5th West Yorks, No. 3,421, being afterwards transferred to the Machine Gun Corps, No. 37,960, classed A1, and sent to France, July, 1916, where he was wounded in the leg, and also contracted trench fever and septic poisoning, and was sent to hospital at Edmonton, July, 1917; after a long illness was sent back to France, April, 1918, was once more taken ill, and sent back to hospital; demobilised B2 at Grantham, since continually under doctor with tuberculous cervical glands; has had severe operations, and is now ordered to Grassington sanatorium, a physical wreck, despite all which the Boar Lane, Leeds, office of the Ministry has declined pension (29th May, 1923, 4/MW/10,730) on the ground that the original diagnosis was adenitis, and that the new diagnosis, tuberculous cervical glands, is not applicable?

Owing to the shortness of notice, my right hon. Friend has not had time to complete his inquiries in this case, but will communicate with the hon. Member as soon as possible.

Postal Service, Thornhill

asked the Postmaster-General if he is aware that the recently built township of Thornhill, near Egremont, Cumberland, consisting at present of 132 houses, is wholly without postal, telegraphic or telephonic facilities; and, having regard to the fact that the nearest post office in any direction is considerably over a mile distant, will he arrange, at as early a date as possible, for the opening at Thornhill of a sub-office in order to provide the facilities named for this growing community?

My right hon. Friend is having inquiry made, and will write to the hon. Member.

May I remind the hon. and gallant Gentleman that this township has been four years without any of the facilities named in the question?

Foreign Newspaper Correspondents

asked the Home Secretary if he has received any complaints from correspondents and editors of various foreign newspapers and press agencies respecting the grave obstacles placed in the way of correspondents of such newspapers who desire to enter this country; is he aware that the British secret service police are charged with treating many foreign pressmen as Communist agents; will he lay upon the Table of the House a copy of the instructions which are issued to the secret service police on duty at the various ports which define the attitude they must adopt towards suspected persons; and will he state whether it is in accordance with these instructions to consider all persons suspected of Communist and Socialist principles as undesirable aliens, and either refuse them permission to enter this country or place them in prison without trial pending deportation?

My right hon. Friend has no case in mind at present of the nature suggested in the first paragraph of the question, but if the hon. Member has any which he desires to lay before him he will consider it. The answers to the following three paragraphs are in the negative.

Is the hon. Gentleman aware that police officers in the Metropolitan Police Courts, when asked the character of prisoners charged, give evidence against them to the effect that they are members of the Communist organisation in this country, and when officers give that evidence, is it on the instructions of the Home Office that they should consider a member of the Communist party a mere criminal?

As I said before, if there is any case of complaint which the hon. Gentleman can bring before the Home Office, I will consider it.

Are obstacles always placed in the way of Communists coming into this country and of Communists going out of this country?

Jury Service (Poor Persons)

asked the Home Secretary if, in the case of poor people called to serve on jury duty at the Old Bailey, steps can be taken whereby expenses shall be granted?

My right hon. Friend does not see his way at present to propose any legislation for this purpose.

Venereal Disease

asked the Home Secretary whether his attention has been called to the Report of the Committee of Inquiry on Venereal Disease; and whether he intends to introduce legislation during the present Session to give effect to their recommendation to permit properly qualified chemists to sell appropriate disinfectants?

The Report of this Committee is under consideration and I am not yet in a position to announce what action will be taken upon their recommendations. I may add, as regards the second part of the question, that I am advised that there is nothing in the existing law to prevent chemists selling disinfectants for purposes of prevention of any venereal disease so long as they are not sold accompanied by any written or printed recommendations.

Old Age Pensions

asked the Financial Secretary to the Treasury what steps his Department is taking to meet the case of persons residing in England who desire to claim old age pensions but whose birth certificates cannot be found because the registers were in Ireland and have been destroyed?

I am not aware that any registers of births in Ireland have been destroyed. Certain census and baptismal records were lost in the destruction of the Four Courts, Dublin, but they were not of great value in proving age for old age pension purposes. If the hon. Member has in mind any case or cases in which difficulty has arisen and will send me particulars, I will have inquiry made.

Northern Rhodesia

asked the Under-Secretary of State for the Colonies whether, in view of the fact that large areas of Northern Rhodesia are under properly constituted rulers and native councils competent to make treaties and agreements with His Majesty's Government, he will say whether these rulers have at any time, and, if so, by what instruments, divested themselves of their right to settle disputes which may arise with regard to the ownership or occupancy of their lands?

The most important native authority now existing in Northern Rhodesia is the Paramount Chief and Council of Barotseland. The British South Africa Company obtained concessions from Lewanika, the late Paramount Chief, the effect of which was to grant the company the right to dispose of the land within his territory, except what is known as the Barotse Reserve. No land within the reserve can be alienated and the jurisdiction of the Paramount Chief is recognised in the Barotse administrative district subject to certain limitations In other parts of Northern Rhodesia the chiefs are appointed by the Administrator and only exercise such powers as are conferred on them by law. Under the provisions of the Northern Rhodesia Order in Council of 1911, all questions relating to the settlement of natives on the lands are dealt with by the Administrator subject to the High Commissioner's power of review.

asked the Under-Secretary of State for the Colonies whether, in the attempt to come to an arrangement with the British South Africa Company with regard to the commercial ownership of lands in Northern Rhodesia, two parties only are in consultation, namely, His Majesty's Government and the Chartered Company, or whether the native interests are being watched by anyone competent and authorised to represent the natives?

The present discussions are between His Majesty's Government and the company only, but I hope that if any arrangement is arrived at it will be of such a nature as to satisfy the hon. Member that it adequately protects native interests, which are engaging my constant attention.

asked the Under-Secretary of State for the Colonies whether, in view of the decision of His Majesty's Government to attempt to secure an agreement with the British South Africa Company upon a question of the company's claim to the commercial ownership of the lands of Northern Rhodesia, he will lay upon the Table of the House a full statement of that company's claim, showing both its extent and character and in what respects it affects the existing rights of the native inhabitants?

The company's claim comprises the mineral rights throughout Northern Rhodesia with the exception of the Barotse Reserve and the ownership of ( a ) the unalienated land outside the, Barotse Reserve, in the territory of North Western Rhodesia, as it existed immediately before the Order in Council of 1911, which amalgamated the territory with North Eastern Rhodesia; ( b ) three areas in the northern part of North Eastern Rhodesia. I do not think it would be desirable to lay separate Papers dealing with this special part of the problem at the present moment.

British Property, Northern France

asked the Under-Secretary of State for Foreign Affairs whether his attention has been called to the position of British subjects owning property in Northern France which was seriously damaged or destroyed during the War; whether he is aware that no compensation has been paid in these cases by either the British or French Governments, although French and Belgian nationals in similar circumstances have received large grants enabling them to rebuild their factories and reinstate the damage done to their property; and whether, having regard to the injustice which is thus being inflicted on British citizens and also to the impediment which is thereby being placed on British trade with France, steps will at once be taken to secure that British nationals with property in the devastated area are placed in the same position as regards grants for reinstatement as French and Belgian nationals in the same area?

The answer to the first part of the question is in the affirmative. As regards the remainder I would refer my hon. Friend to the answers which I gave on the 7th of this month, of which I am sending him copies.

Does not the right hon. Gentleman recognise that it is the first duty, especially of a Conservative Government, to see that British citizens are not placed in a position which is worse than that of the nationals of other countries?

On general principles I accept my hon. Friend's statement. This question is an extraordinarily difficult one. It concerns the Governments of France, Belgium, Germany and this country. All I can say is that I have been making inquiries into it with every desire to help.

Does the right hon. Gentleman not recognise that Belgian and French citizens have practically got their factories rebuilt out of grants from the French Government, and that British citizens are; there with their factories in ruins?

That is perfectly true, but I think my hon. Friend will agree that citizens in this country who have been injured, as many of them were, during the raids, have a prior claim, having paid taxes in this country, over citizens who have paid taxes in France and Belgium. But that does not exclude those who were injured, and I am doing my best to see what can be done.

Boilermakers' Trade Dispute

( by Private Notice ) asked the Minister of Labour whether he was aware that the Executive Council of the Boilermakers' Society specifically state that the shipbuilding employers refuse to meet representatives of the society except on the basis of the acceptance of the agreement, and whether, in view of the evident conflict of opinion on this point, he would take action to bring the parties together in order to remove any misunderstanding?

I am anxious there should be no misunderstanding in this matter. I have had an opportunity of looking at the published text of the telegrams which have passed between the Shipbuilding Employers' Federation and the Boilermakers' Society. The employers intimated that they could not accept two suggestions put forward by the society. They were then asked whether they had any suggestion to make, and they replied that as a basis of conference the only suggestion they could make was acceptance of the agreement. As I stated yesterday, in my reply to the hon. Member for Wednesbury, who also communicated with me again last night, the employers did not say that acceptance of the agreement was a precondition of the conference. There were thus three suggestions. If I may add a fourth, it is that the two sides should now meet and discuss the situation.

May I ask whether my right hon. Friend will take action, in accordance with the closing sentences of that statement?

I have made the statement, and I propose, for the moment, to leave it at that.

Renewal of Leases

I beg to move,

A case has come to my notice of a man who took premises a number of years ago at £180 a year. His lease was for a period of seven years. At the end of that time the landlord demanded an increase from £180 to £220 which was paid. At the end of the second seven-year period the tenant was faced with a demand for a further increase to which he was compelled to assent. After an occupancy of the premises for 21 years, the landlord came along and demanded that the tenant should purchase at a price of £6,500 for premises which 12 months previously had been valued at £2,600. The tenant was quite unable to meet this demand, but he made a reasonable offer of £4,500 which was refused. The landlord then advertised the premises for sale with immediate vacant possession. As the man's credit depended on the continuance of his business, the consequence was that his creditors descended upon him like the Assyrians described in the poem and a forced sale was enacted, with the result that this man after 20 years of work in these premises is now back in a worse position than when he started and is absolutely broken and ruined. As I have said, instances of that description indicate the existence of a grave scandal. This Bill is for the purpose of giving the tenant of a building the right to require the landlord to renew his lease on the same conditions as those applying to the original lease or contract. That is to say, if the period is 21 years or less the landlord must renew the lease, failing agreement with the tenant. The tenant has the power to apply to the County Court and the County Court has the right to grant a 10 per cent. increase in rent as a maximum, in addition to any charges which may accrue through the renewal of the lease.

The maximum term for the renewal is 21 years, and the County Court is to take into consideration repairs and expenses necessitated by the renewal, but is not to take into consideration values due to increased demand for such premises. The maximum which the Court can allow is 10 per cent. on the original rent. These provisions shall not apply to houses or properties now controlled under the Rent and Mortgage Interest (Restrictions) Act, 1920, until such Act expires. The Bill shall not apply in cases where tenants have created a nuisance at the premises or have acted in an objectionable manner, and these powers cannot be exercised where the premises have been used for illegal or immoral purposes, and the tenant cannot gain exemption if the landlord himself can prove bona fide that he requires the premises for his own use or occupation. It is simply sought to give some assistance to the leasehold tenant and to protect him by giving him the power to apply to the Court against excessive charges and to prevent the risk, which many men have to undergo, of being absolutely ruined by the exactions, not of all landlords I admit, but of exacting landlords who stretch things to the utmost extreme and, in their cupidity, threaten men with loss of livelihood. I think the Bill will meet with the approval of a large number of Members of this House. It does not solve all the problems involved; it is not intended to do so, but it deals with an immediate question, and it gives an opportunity of showing sympathy with tenants, which will doubtless be availed of by many of my hon. Friends on the opposite side, those modern Kosciuskos who are so fond of freedom and of fighting against oppression.

Modem Kosciuskos—modern liberators. It is an opportunity for them to do a little towards preventing the oppression which exists in the case of many leasehold tenants.

Question put, and agreed to.

Bill ordered to be brought in by Mr. Wallhead, Mr. Mardy Jones, Mr. Parker, Mr. Muir, Mr. Morgan Jones, Mr. Rhys Davies, Mr. John, Mr. Robert Jones, and Mr. Wheatley.

Renewal of Leases Bill,

"to make provision with respect to the renewal of leases and other contracts of tenancy; and for purposes connected therewith," presented accordingly, and read the First time; to be read a Second time upon "Wednesday, 27th June, and to be printed. [Bill 162.]

Message from the Lords

That they have agreed to,

Bank of England Bill, without Amendment.

That they have passed a Bill, intituled, "An Act to confer further powers upon the Mayor, Aldermen, and Burgesses of the borough of Macclesfield with regard to the construction of waterworks: to make further provision with regard to the health, improvement and good government of the borough and the consolidation of rates; and for other purposes."

[Macclesfield Corporation Bill [ Lords. ]

And also, a Bill, intituled, "An Act to provide for the transfer of the undertaking of the Swanage Electricity Supply Company, Ltd, to the Swanage Gas Company; to confer further powers on the Swanage Gas Company; and for other purposes."

[Swanage Gas and Electricity Bill [ Lords. ]

Macclesfield Corporation Bill [ Lords ],

Swanage Gas and Electricity Bill [ Lords ],

Read the First time; and referred to the Examiners of Petitions for Private Bills.

Estimates

First Report from the Select Committee, with Minutes of Evidence and Appendices, brought up, and read.

Report to lie upon the Table, and to be printed.

Selection (Standing Committees)

Standing Committee A

Sir SAMUEL ROBERTS reported from the Committee of Selection; That they had discharged the following Member from Standing Committee A: Major Molloy.

Standing Committee D

Sir SAMUEL ROBERTS further reported from the Committee; That they had discharged the following Member from Standing Committee D (added during the consideration of the Rent and Mortgage Interest Restrictions Bill): Mr. Singleton; and had appointed in substitution: Mr. George Hutchison.

Standing Committee C

Sir SAMUEL ROBERTS further reported from the Committee; That they had discharged the following Member from Standing Committee C: Major Despencer-Robertson.

Reports to lie upon the Table.

Orders of the Day

Finance Bill

Further considered in Committee.

[ Progress, 12th June. ]

[Mr. JAMES HOPE in the Chair.]

CLAUSE 8.—(Income Tax and Super-tax for 1923–24.)

(1) Income Tax for the year 1923–24 shall be charged at the rate of four shillings and sixpence, and the rates of Super-tax for that year shall, for the purposes of Section four of the Income Tax Act, 1918, as amended by the Finance Act, 1920, be the same as those for the year 1922–23.

(2) All such enactments relating to Income Tax and Super-tax respectively as were in force with respect to the duties of Income Tax and Super-tax granted for the year 1922–23 shall, subject to any adaptations or modifications contained in any Order in Council made in connection with the establishment of the Irish Free State, have full force and effect with respect to the duties of Income Tax and Super-tax respectively granted by this Act.

I beg to move, in Sub-section (1), to leave out the words "and sixpence."

This Amendment is in the same terms as one which was discussed briefly, and very late at night, during the Debates on the Finance Resolution, and it seeks to omit the words "and sixpence" from the provision that the amount of Income Tax for the current year is to be four shillings and sixpence. When this matter was discussed on an earlier occasion, it was pointed out by the Prime Minister that there would be an opportunity in Committee on the Finance Bill to discuss the matter fully, and whatever varied opinions may be held about it, in different parts of the House, there can be no dispute that the question of the amount at which the Income Tax stands is of the utmost financial importance, and the proposals for its reduction and the contentions of the Government for its maintenance, strike as deeply into the financial provisions for the year as do the discussions on any other part of this varied and complicated enactment. The reason why some of us attach great importance to having the Income Tax further reduced is because of its direct effect upon industrial enterprise and in assisting the recovery, not only of financial resources, but of that resilience in financial matters, which are so desirable in the interests of the whole country after the long period of deep depression which has followed the Great War, similar to those periods of depression which followed other wars in the past.

4.0 P.M.

There can be no two opinions as to the intimate connection between the amount of Income Tax and the elasticity of industrial recovery. Everybody knows that in all occupations—in some no doubt more than in others—taxation has a great deal to do, not only with those who employ, but with the possibilities of employment for those who are employed. This is one of those elements bearing upon the recovery of trade prosperity which it is within the power of the Government and of the House of Commons largely to modify and to adapt in a way which will strike the true balance between the propriety and necessity of paying off Debt and the impolicy and unwisdom of keeping taxation at such a height as to hinder those very recoveries of enterprise to which we have to look to provide, not only the taxes of this year and of future years, but to provide the resources out of which the Debt of the country will be gradually and steadily reduced. We have been watching, all Members of this House, the slight signs of a recovery of trade prosperity, and there can be no doubt that, while there have been such signs, they are not multiplying with the frequency nor are they so marked as was generally hoped would be the case. It is difficult, it is indeed almost impossible, in the course of a sentence or two to analyse or to expound the precise position in which the country finds itself. It is sufficient for my argument to suggest, and indeed to maintain, that the recovery of trade prosperity has not been so rapid as was expected, that it is not of a kind which can be depended on to continue without further relief from the burden of taxation, and that the present moment is one when further relief from taxation of a kind which will operate directly on industry should appeal with special point and when the responsible Government of the country should give it most sympathetic consideration.

What are the facts? There is that important and leading fact that in the revenue for last year there was a realised surplus of over £100,000,000. Those who are critics of the Government and those who are concerned to see that the finances of the country are so arranged as to give the greatest stimulus to trade recovery are often told, when they refer to this realised surplus, that they wish to raid realised surpluses and to weaken the repayment of the Debt, and they are also reminded, which, of course, is the fact, that under the existing law that realised surplus has gone past recall to the reduction of Debt. That may be so, but the fact that the calculations of last year were of such a kind as to bring about a realised surplus of over £100,000,000 will make Members in all parts of the House look with a good deal of care and with an absence of childlike credulity upon statements that no similar or appreciable surplus is likely to follow the Estimates of the current year. The fact remains that the realising of so large a surplus does bear upon the question which I am now bringing before the Committee in moving this reduction. There can be hardly any difference of opinion that it would be a desirable thing for the whole of the country and for all types of business if the Income Tax were lower than at the present time. Not only is that generally realised, but I think one can go a step further and say that it is a matter which is and ought to be of grave concern to the Government on what ground they can or ought to resist a demand made to them in Parliament to reduce it, as I am now asking them to reduce it, by yet another 6d. We should all like to get rid of it altogether. Nobody knows better than my hon. Friends opposite that to ask at what particular stage you should fix it is the most infantile dialectical method of debate to adopt if you do not happen to agree with the suggestion made. The reason for asking the Government to reduce it below 4s. 6d., at which they proposed to leave it, is the present state of the trade and the need and requirement for a further stimulus. The reason why those who propose this reduction do not propose more is that we are just as conscious as members of the Government that you have to balance between paying off Debt and the reduction of taxation. It is with a full consciousness that both these aspects have to be balanced that one presses for this reduction now.

Of course, the one question with which any proposal of this sort will be met is, "How do you propose to find the money for it?" There was a very interesting speech by the Prime Minister in the discussion a few weeks ago, and some two months before that there was a very interesting speech by the same right hon. Gentleman in the discussion in this House with regard to making old age pensions universal. That, like this proposal for reducing the Income Tax, met with a great deal of sympathy and with a courteous but firm negative from the Chancellor of the Exchequer. The Chancellor of the Exchequer then used certain words, which I will ask the permission of the Committee to recall. He said:

Then there are other things which make this suggestion the more pressing from our point of view. We have had various interesting half-hours in this House in the last few weeks with regard to the absorbing question of re-assessment. We have had indications from all quarters of the House that all kinds of people are going to pay Income Tax on a higher assessment than they thought or than anybody else knew when the February speech was made, and, in so far as that is going to be the fact, that in itself will tend to increase the amount of revenue raised and will tend to increase the margin by which there could be a further reduction of taxation. In the next place, nobody knew or dreamt when that speech was made in February by my right hon. Friend that there was going to be this realised surplus of £100,000,000. How can we, with that fact staring us in the face, sit down under the belief that there will be no considerable surplus this year if you leave taxation at the height at which you are leaving it? Therefore, the argument which I respectfully present to the Committee and to the Government is this: First, that the Income Tax is still too high to be wholesome or just or beneficial to the State; secondly, that the present position of trade and industry is peculiarly one which would be helped by a reduction of that impost at this time; thirdly, that the experience of the Government last year, if it is to be any guide as to the prospect of the Government this year, indicates again a realised surplus, which means taking from the pockets of the taxpayers more than the Government have the right to call upon them to give; and, lastly, there are the various matters to which one has referred—the increase of assessment and the fact that the more you reduce taxation on industry the more you increase prosperity from which revenue again is derived. On these grounds, as well as on others, in the interests of true economy, and especially in the interests of that national prosperity out of which alone national financial stability can come, I move this reduction.

I am sure that we all on this side of the Committee agree with the opinion of the hon. and learned Member for Middleton (Sir R. Adkins) with regard to taxation being too high. The gravity of this Income Tax is indeed almost greater even than he explained. But we have to consider very carefully where his money will come from if this extra 6d. be taken off, and we have to see, if it be possible to receive a rebate of 6d. as he suggests, that it comes from some source which is not already tapped. The hon. and learned Member referred to the recovery of industry. We all agree with him that it is absolutely essential that we, as a great trading country, should get back to that prosperity to which he refers, but I think he does not quite realise what might happen supposing on 31st March next the amount of tax which this 6d. represents—about £19,000,000—were not realised. Supposing we had a deficit in our Budget? I do not know whether the hon. and learned Member has thought of that possibility. If we had a deficit in our Budget, it would be absolutely against our trade and against the whole of our merchants or anybody who carries on the commerce of the country. Owing to our not working on a conservative basis with regard to taxation, our costs would go up. We should not only find our costs up, but our commodities, upon which we depend from abroad, also rising in price. The hon. Member referred to the £100,000,000 surplus of last year. Commerce is getting a benefit through that £100,000,000 having been put to the Sinking Fund, for we are saving £5,000,000 a year by interest, and it is only by gradually reducing our charges in that way that we can get commerce back to its proper and normal status. If we did not balance our accounts, we should indeed foe in a grave position. We must have a margin, and although there may be a surplus this year, I believe it would be better for trade and commerce, if that surplus be realised, as I gather the hon. and learned Member thinks it will be, that we should gradually put it to the Sinking Fund instead of reducing the Income Tax by a further 6d. in the £ at the present time.

While the Committee have enjoyed the speech of the hon. and learned Member for Middleton (Sir Ryland Adkins), who moved the Amendment, I think there must have been a feeling of regret that the right hon. Baronet the Member for West Swansea (Sir A. Mond) was not here to perform that task, and to entertain the Committee once more by an illustration of his remarkable agility in changing his political position. The hon. and learned Member for Middleton based his argument mainly upon the burden which the present rate of Income Tax places upon the industry of the country, and he claimed that the reduction which he now proposes would have some effect in improving the condition of trade. This is not the first occasion upon which that argument has been presented during the present Session of Parliament. The controversy on the Budget Debate ranged around the conflicting contentions of the benefit to be derived from Debt reduction, or from Income Tax reduction, and I venture to say that the arguments of those of us who gave preference to Debt reduction were never met by those who argued the opposite contention. I specially welcome the speech which has just been delivered by the hon. Member for Ilford (Mr. Wise), for I can remember that, in the earlier stages of the discussion of the Budget proposals, he was on the side of those who deprecated paying any considerable sums towards Debt reduction. Indeed, I remember him saying we might with advantage postpone the payment of Debt for two or three years, at any rate.

I am specially interested in his contribution to the discussion this afternoon from another point of view. He has argued, in the course of the present Session, more than once the urgency of a reduction of direct taxation. Indeed, he has pointed out that the less the proportion of national revenue which is raised by direct taxation, the greater is the prosperity of trade and the less the volume of unemployment.

My point was dependent on there being a surplus, but the hon. and learned Member for Middleton (Sir Ryland Adkins) has not proved that there will be a sufficient surplus to reduce the Income Tax by a further 6d.

At the moment I am dealing with the hon. Member's contention in an earlier Debate that it was important that there should be a reduction of direct taxation in the interests of trade prosperity, and now we find the hon. Member opposing a suggestion that there should be a reduction.

I am going to leave the Financial Secretary to the Treasury to deal with the point which was made by the hon. and learned Member for Middleton as to the soundness of the Budget Estimate. One of the hon. and learned Member's arguments was that the Chancellor of the Exchequer had underestimated the amount of revenue which was likely to accrue during the present year. That is a matter upon which there may legitimately be differences of opinion at the present time. We shall not know until next April whether the Chancellor of the Exchequer has accurately or inaccurately represented the yield during the coming financial year. There is one further point made by the hon. and learned Member who moved the Amendment. He naturally had to deal with the question of how the Chancellor of the Exchequer would find compensating revenue for the loss of revenue due to a reduction in the rate of Income Tax, and he, like other Members of his party during the present Session, argued that that deficiency might be met by a reduction of expenditure. I would remind the hon. and learned Member and those who are associated with him that there is upon the Order Paper of the House at the present moment a Motion, standing in the name of Members of that party, calling for an enormous increase of national expenditure for great schemes of social reform.

We do not give one inch to hon. Members in any part of the House in our desire to see retrenchment where retrenchment is possible without reducing the efficiency of our national services, but I doubt if it be possible, for some time to come at any rate, to make any large reduction of national expenditure except under two headings of that expenditure, namely, the amount which is required for interest upon National Debt, and expenditure upon armaments, and I believe that it would be possible to effect a very considerable reduction of expenditure on both these items, one in a way with which I am not permitted to deal this afternoon, and the other by a wiser foreign policy. Of course, that matter is not entirely in the hands of the Chancellor of the Exchequer. Therefore, we are this afternoon content to look at the situation as it is at the moment. The party with which I am associated are not opposed to a reduction of taxation, provided it can be done without impairing the efficiency of our national services, and without postponing very much-needed social reforms, but I have very little hope that that can be done except in the two directions that I have already indicated. What would be the effect of this Amendment if it were carried? The hon. and learned Member for Middleton estimated a loss of revenue of £19,000,000 during the current financial year, but in a full year the loss would be £26,000,000. Last year, the Chancellor of the Exchequer relieved the Income Tax payers to the extent of £52,000,000; by the reduction proposed in this Finance Bill he is making a further reduction of Income Tax of £26,000,000; and if we added to that, taking a full year, another £26,000,000, that would mean that in a little over 12 months' time the Income Tax payers of the country would have been relieved of taxation to the extent of £104,000,000 a year, which is more than double the total amount of Income Tax they contributed in the years before the War.

Now I come to the hon. and learned Member's main point, as to what would be the effect of a further reduction of the Income Tax in stimulating the trade of the country. May I remind him that the year in which we experienced the greatest trade prosperity was the year in which taxation was at its highest point? I hope some hon. Member who is associated with the hon. and learned Member for Middleton will deal with that point in the course of this discussion. It may be argued that the reduction of 1s. in the Income Tax last year did something to stimulate trade, because undoubtedly there appears to have been during the last 12 months a slight turn of the tide for the better, but it is not sufficient simply to make that statement. We have got to prove that there is some direct relation between the relief of taxation given a year ago and the slight improvement in trade, and as a matter of fact I do not believe that it has had the least effect. Shall I bring in support of that statement the authority of the right hon. Member for West Swansea? He stated in the first speech on the Budget that nothing was proposed by the Budget, including this 6d. reduc- tion in the Income Tax, that was going to do the slightest good. It was not the reduction of 1s. in the Income Tax last year which gave us the slight increase of trade. What caused that slight improvement in trade was this, that traders had begun to work off their stocks bought at inflated prices, and they are now working off stocks purchased at a much lower rate. So far as there has been an improvement in trade, that, I believe, is the factor which is most responsible for it.

Again, as to the argument that the proposed reduction of 6d. in the Income Tax would stimulate trade, where is that reduction going? Is it going to be spent in a way which would stimulate the staple trades of the country? I know there is a conflict of opinion on that point, even amongst the members of the party with which the hon. and learned Member is associated. At one time they appeared to argue that a reduction of the Income Tax was desirable because it would increase spending power, and at another time that it would increase investments; but let us see whether, even if it be spent, it is going to be spent in such a form as to help the staple trades of the country, because, after all, it is the staple trades of the country, and not the luxury trades, not the parasitic trades, upon which the prosperity of the country depends. Supposing this reduction of 6d. in the £ in the Income Tax be carried, who is going to get it? We have every sympathy with the smaller Income Tax payer, and we have Amendments on the Paper, which I hope will be considered later, which would give some relief to the Income Tax payers in the lower categories, but who is going to get this? A sum of £52,000,000 was given to the Income Tax payers last year, and of that sum £16,000,000 went to 27,000 people; that is to say, that one-third of it was taken by 27,000 people.

I wonder if hon. Members noticed a reply to a question that was given by the Chancellor of the Exchequer in this House about a fortnight ago. The right hon. Gentleman was asked how many Super-tax payers there were with incomes of over £5,000 a year, and also the corresponding numbers in 1913. The figures were astounding. In 1913 there were 14,008 persons assessed for Super-tax with incomes of over £5,000 a year. In 1920–21, the last year for which the Chancellor said he had information, there were 27,499— practically double. Hon. Members know from other replies given that the figures of last year are not a material alteration on the last—that is, on the 27,000 with incomes of over £5,000. These people, if the hon. and learned Member's Amendment is carried, are going to get £8,000,000 out of a total relief of £26,000,000. Last year the same handful of people got £16,000,000, and by the 6d. reduction they will get £8,000,000. Therefore, if the Amendment be carried, these 27,000 people are going to get, in two years, a relief of Income Tax to the extent of £32,000,000. What will happen to that money? Will it go lower and benefit the working people? No. Is it going to be saved? It is not. People are waiting for this relief to raise their standard of living. That operation can be helped by a reduction of Income Tax, but in this case the reduction is going mainly to very rich people, and will be spent in extravagance, in keeping up more servants, in additional motor cars, and, as a matter of fact, employing more parasites on the productive enterprises of industry.

It was estimated by the Department of the right hon. Gentleman a few weeks ago in a paper that was issued, how relief in a reduction of Income Tax would affect various grades of people. Take a person with £10,000 a year. Here I refer to the reply to which I referred a few moments ago, in which the Chancellor of the Exchequer gave us the information that 1,513 people were in the category of those having incomes between £20,000 and £100,000. Take the case of a man with £10,000 a year. Last year he paid Income Tax to the extent of £3,825; by the 6d. reduction he gets a relief this year of £250. The man with £100,000 a year gets a relief of £2,500. That relief in Income Tax is not going to benefit to any extent, or in any appreciable form, the men who are in most need of it. Take the case of a married man with three children earning an income of £500. That family has a hard struggle to live and to keep the family respectable. What is that man going to get on that basis? A paltry £1 14s. Relief in the taxation in this way is not going to help unemployment because of the manner in which the money saved is going to be expended.

It has often been said in Debate that, after all, the working people pay all the taxation, and that, therefore, a reduction in taxation that benefits people higher up will correspondingly benefit the working people. I do not believe there is any soundness in that contention. I admit that in a general way the workers pay all the taxation. They pay all taxation only, however, in this sense that taxation is paid out of the national pool. It cannot come from elsewhere, and it is the productive workers of the country who make that national pool. In that sense, therefore, it is the productive workers of the country who pay all the taxation. But it is not true to say that a reduction of Income Tax will result in a corresponding benefit to the working classes. Last year the Income Tax was reduced by 1s in the £. Did it benefit the working people? Were their wages raised by a corresponding amount? As a matter of fact, their wages went down by £200,000,000.

I have already gone into that point and given a reason for it. It has no connection whatever with the reduction of wages, and it proves conclusively that a reduction of Income Tax does not reflect itself in increased wages. As a matter of fact, of all taxes Income Tax is the most direct in its incidence, and the most difficult to shift on to others. Therefore we shall oppose this Amendment, but we shall not oppose it because we are not in favour of it under suitable conditions! We shall never consider a reduction of Income Tax a good thing where it helps the postponement of social reform. It is going to benefit those who do not need it. It will simply put into their hands a larger spending power to be injuriously expended and against the national interests. We shall oppose it, too, because it will give little, practically no relief to the Income Tax payers who most need it. We look to other means to stimulate trade than a proposal like this which we believe will have the opposite effect to that which we believe desirable.

When the hon. Member for Colne Valley (Mr. Snowden) began to speak, I felt a great hope that I should hardly need to speak at all, for I quite thought he was going to give a very conclusive answer to the hon. and learned Gentleman who moved the Amendment. But the hon. Member for Colne Valley will forgive me if I say that his speech was a little unequal. He began with a very admirable answer to the hon. and learned Gentleman from the point of view of applied finance. He ended up by going into details with a certain bitterness, I thought, as between the different classes of people. [HON. MEMBERS: "Oh!"]

I do not want to say anything controversial, but I consider the hon. Gentleman went out of his way to include the question of the effects of this proposal on relative portions of the community.

And I had rather hoped he would have dealt with the question raised by the Mover of the Amendment on higher grounds when he could have given a very complete answer to the point put forward. After all, the question which the hon. and learned Gentleman has to prove is, if he is going to reduce the Income Tax—and this applies to any other tax where the proposal is to reduce it—in this case by something like £26,000,000 a year—the real question he has got to answer is, where is the money to come from? He has given us no answer on that point. Would he put it on other taxes, on food or what? I do not know whether he would suggest that we ought to save the money by giving up our concession on beer. He might propose further taxes of some marvellous nature of which the Treasury do not know, or he might do, as I think he had in his mind, raid one or other of the Sinking Funds. It is quite true that the hon. and learned Gentleman spoke very strongly in favour of economy. I am with him in every word he said as to the necessity of economy to the utmost possible extent; but he omitted to tell the Committee that the Estimates for this year have disclosed savings of £94,000,000, thus showing that a very real effort has been made by the present Government to economise. Perhaps it is no secret if I tell the hon. Gentlemen that in my Department we are still making every possible effort to effect economies in order that the Estimates for next year may be not higher, and if possible lower, than now. Really, however, the question of economy rests with the House of Commons more than the Government. I see opposite to me my hon. Friend who not a long while ago occupied the position which I now occupy on this Bench. He knows some of the difficulties in regard to this question of economy, and his present smile——

The Treasury may insist upon economy. We may talk about it here. The Treasury may insist upon new Estimates, and Members of the House come down week after week wanting more expenditure in different directions! It may be military, or naval, on social reform, or whatever it may be, but in this matter of high finance we must do our duty as far as we can, and if we want to restore our financial position to what it was before the War, cut out what is not absolutely necessary.

The question of spending is one of the character of the expenditure, whether profitable or not.

That was not the question I was arguing. I was arguing the general question of expenditure. Expenditure, perhaps, on social reform would be from the point of view of the hon. Gentleman who has just interrupted productive expenditure. But there are other points of view. Some hon. Members think the maintenance of a strong Navy is also productive expenditure from the point of view of Empire. Singapore may be defended on the ground of productive expenditure and by way of increasing the prosperity of the whole Empire. But I want hon. Members to realise that all expenditure beyond what is absolutely necessary, whether it is called productive or not, is in the same category from the point of view of the Estimates. That is what I want the Committee to realise this afternoon. If the hon. and learned Member who has moved this Amendment had his own way, I suppose it would be suggested that we should raid the Sinking Fund. My hon. Friend the Member for Ilford, who speaks on these financial questions with great knowledge and ability, pointed out that the very best thing that has happened is that the surplus of £100,000,000 has gone to the National Debt because it has saved us £5,000,000 a year in taxation, and it has gone a very great way towards strengthening our financial position in the world. If instead of devoting that sum to paying off the Floating Debt, we had spent that £100,000,000 in social, naval or military expenditure, we should not have reduced our Debt, and we should not have saved £5,000,000 in interest on the Debt and our position would have been quite different from what it is to-day.

We have been challenged in regard to the Estimates we have made for the current year. On this point it is impossible for me to express any more reliable opinion than that which was expressed by the Chancellor of the Exchequer himself in regard to the possibilities of a surplus this year. My right hon. Friend has already told the House that he has made his Estimates after consultation with the experts at the Treasury. He has made them very closely, and there is no human possibility of a surplus of anything like that which has been referred to during the current year; in fact if there be a surplus at all, the position of the Chancellor of the Exchequer and the humble Financial Secretary will be very much easier this time next year than I fear will be actually the case.

I wish hon. Members would realise that we have already taken one 6d. off the Income Tax. If you took another 6d. off, I think we should have quite justifiable recriminations from that part of the community which does not pay any Income Tax. We have to hold the balance fairly between the two. Most people would like to see a reduction in the Income Tax. From a selfish point of view, they would like to see a considerable reduction in that tax. From our own pocket point of view, we would sooner see the Income Tax reduced than any other tax, but that is not a position which it would be right for the Government to take up. The Government have to survey the whole field of taxation and consider the needs of the entire community, not merely the Income Tax payer but the man who pays no Income Tax at all. The Chancellor of the Exchequer, after a careful review of the whole situation has come to the conclusion—it is a conclusion in which the House has supported him—that the proper reduction is 6d. in the £ on the Income Tax, and no more.

The Mover of this Amendment has referred to the question of the improvement of trade which would follow upon his own proposal, but really what his suggestion amounts to is inflation. The object of the Government has been to see that the trade of the country goes forward steadily—slowly if you like. I think it would be quite easy to pursue the policy which has been followed in some of our neighbouring countries. A policy of inflation would undoubtedly produce temporary prosperity and temporary employment and a temporary bound forward and boom in trade, but the ultimate result would be, in the very near future, exactly what we see has happened on the other side of the Channel. I am delighted to think that to-day the price of the English £ sterling is much higher and in a better position than the currency of other countries. The inflation of the currency is a policy with which the Government will have no connection. We want to regain our position as the great money market of the world. Of all the countries of the world, we are the only people who have paid our way during the last four years. We have submitted to heavy taxation which nobody likes, but I am convinced that by that taxation and by our determination to pay our own way and pay our debts to our great sister country across the Atlantic, we have placed ourselves in a position which for many years will inure to the benefit of this country.

I will say a word or two about the question of the new assessments, which are worrying the country so greatly, and incidentally are making the life of the Financial Secretary a burden. It has been suggested that there was room to raise additional taxation by these assessments, and more or less this was estimated to pay for the reductions which have been made in taxation. I am sure hon. Members will realise that, before placing the Budget before the House, the Chancellor of the Exchequer took into consideration, in framing his estimates, the probability of increased revenue from this source. Therefore this has all been accounted for in the Budget. I want to ask the Committee to consider what would be the position if we were to take off another 6d., and at the end of the year the Chancellor of the Exchequer had to come here and reimpose the 6d. on the Income Tax. What would be the position then of the trade and the credit of the country if the Government, instead of having a surplus, were faced with a deficit?

The proposals of the Chancellor of the Exchequer have been carefully thought out and they are founded upon the principles on which our financial policy has gone for many years, and particularly since the conclusion of the War when we ceased borrowing and began to pay off our debts. We have now started on the upward grade in our financial position and we have placed ourselves financially by that sound economic policy in the forefront of the nations of the world. We are very near regaining our position, and I hope before the end of the year we shall have regained it as the financial centre of the whole world, and I ask the Committee not to agree to any proposal for a further reduction of the Income Tax.

The proposal which has been made to the Committee is one which invites us to consider how these transactions stand, and, as such, I think the hon. and learned Member for Middleton (Sir R. Adkins) was abundantly justified in moving this Amendment. I feel sure my hon. and learned Friend would be the first to admit that if we were able to reduce the burden of the Income Tax at this time, very careful adjustments would have to be made to secure that the relief really went in proper proportion to those who are most entitled to claim it. I certainly do not subscribe to the doctrine that when you are reducing the Income Tax you should not, amongst other things, reduce the very high rate of taxation which falls upon other classes of the community. It is a very different proposition to say that you can reduce the rate of the Income Tax by raising the standard rate from 4s. 6d. to 4s. and leave it at that notwithstanding the wide variety of circumstances existing amongst different sections of the community. I think hon. Members will be willing to recognise that details of that kind have to be carefully considered. For example, there is a very hard pressed class of the community which, if Income Tax comes to be applied to them, have the standard applied at half the standard rate. There is a great deal to be said for that class, because they are people with very small incomes. I certainly do not think that the view which would be taken on reflection by those with whom I sympathise would be that if you are able to reduce the tax from 4s. 6d. to 4s. for the standard rate you would have to give them further relief.

I am glad that this subject has been raised, more especially because it has produced a very interesting speech from the hon. Member for Colne Valley (Mr. Snowden) and the Financial Secretary to the Treasury. I hope we shall find that this particular topic is not going to be treated in the way which has been suggested. The Financial Secretary has allowed himself considerable latitude in dealing with this question and he laid down one proposition which I should like at once to controvert. For my part, and I believe this applies to all branches and sections of the Opposition, I entirely dispute the proposition made by the Financial Secretary by which he seeks to suggest that you can count expenditure such as that at Singapore Docks, or on the Navy and Army Votes, as though it was productive expenditure in the same sense as any other expenditure. For my part I should have thought that there was the widest possible distinction between £25,000,000 spent as part of the cost of old age pensions or £25,000,000 spent as part of the cost of education——

The right hon. and learned Gentleman is scarcely in order on this Vote, and he has demonstrated to me that I ought to have stopped the Financial Secretary to the Treasury.

I think the Secretary to the Treasury, on a more suitable occasion, will have to do a great deal more than he has done to-day to justify his suggestion that really there is no difference between expenditure on social reform and education and expenditure which may be necessary but which has not the same productive consequences. I do not think that observation ought to pass without an indication that, on a proper occasion, it is one which we shall be glad to discuss at greater length.

5.0 P.M.

There are one or two observations which it occurs to me ought to be made upon the course of the Debate. The Financial Secretary to the Treasury has argued that the Mover of a reduction of this kind should give some indication to the Committee as to the source from which the money is to be obtained to enable a reduction of this tax to be made. I agree that no such Amendment should be put down unless the Mover has some intelligent idea as to where the funds should come from. In the course of a recent Debate we pointed out from these benches the amount which could properly be obtained by a reduction of the Sinking Fund. I am not going to weary the Committee by repeating these arguments on this occasion. £10,000,000 or £15,000,000 can be obtained from the Sinking Fund at the same time as we are discharging every statutory and legal obligation in the way of the redemption of Debt. That goes a very substantial way towards meeting the £19,000,000 that would be required this year and the £26,000,000 that would be required in a full year for the further reduction of 6d. in the Income Tax. As to the provision of the rest of the money, let me range myself fully behind my hon. and learned Friend who opened this discussion in his argument that there is an ample reason for a Chancellor of the Exchequer of not more than reasonable optimism to expect that he may get the rest of the funds required this year out of the margin concealed in his Budget. I think all of us who value our reputation as prophets will refrain from making prophecies as to the outcome of the revenue at this time of the year. In other days, when my other ear was turned towards this Debate, I had heard so many rash prophecies made as to the outcome of revenue that I have learned a good deal in that respect. Nevertheless, it is surely not improper to pay attention to what sum may be available and to the manner in which the collection for the year is going. We have had already some months' experience of the revenue collection for this year and the light which that casts on the Budget estimate.

The Committee will remember that the Chancellor estimated for a reduction of £61,000,000 upon the revenue collection for the current year in comparison with last year. His estimates as to tax reduction and surpluses, and so on, are all based on that estimate. If that esti- mated reduction is to be revised, we ought of course to be seeing a very substantial falling off in the revenue, as it is being collected in the present year. Returns of that revenue collection are available, and what do we find? The latest return is for the period from 1st April till 10th June. In that period the amount of revenue collected has been £145,000,000 in comparison with £147,000,000 last year. The Committee will notice that there is a slight visible decline in the revenue. That may seem at first sight to be some confirmation of the Chancellor's pessimistic estimate. But I will ask the Committee to look into the figures a little deeper. All, and a great deal more than all, of the falling off in the collection of revenue this year is accounted for by such items as estate duties and miscellaneous revenue ordinary receipts. The Committee is well aware that these are very incidental revenues which come in very large one month and small in another month. They come in accidentally in lumps one month and nothing comes in for several months. It is not a regular flow of revenue. They are accidents as it were in the history of the year's revenue. The real indications of the manner in which your revenue is coming in are such test figures as Customs and Excise and Income Tax. I observe in the two months' period that has elapsed that, so far from there being any decrease, as estimated by the Chancellor, these test revenues of Customs and Excise and Income Tax have all shown substantial increases in comparison with the preceding year.

Expenditure is certainly not up in comparison with the Budget Estimates, and certainly it ought not to be. The hon. Member for Ilford will no doubt realise that expenditure is much less regular than revenue. You may have big items one month, but, on the other hand, the test of the revenue the Customs and Excise and Income Tax, from month to month and from year to year are fairly regular and fairly safe guides. I only produce these figures to show, as I think they do show, that, as far as we have gone, there is evidence that the Chancellor's estimate of the revenue was over-pessimistic. I think this Committee ought to make a protest, whenever it occurs, against the undue pessimism of the Chancellor of the Exchequer when he is estimating expenditure. This is the first year since the beginning of the post-War economies in which the national estimate of expenditure has not shown a great decrease on the actual expenditure of the preceding year. I think the Chancellor does not do himself justice. His intention to economise and the machinery for economy which he has at his disposal will enable him to effect substantial economies in the course of the year in addition to those he mentioned in his Budget Estimate. There is ample room to obtain the further margin necessary to make a reduction in the Income Tax. But even if it were so, let me, in answer to a very relevant observation of the hon. Member for Ilford, say that, even if it were so and if enough savings and increased revenue were not to be gained to fill up the whole of the rest of the amount required, there is no question of a deficit. I would never stand on the Floor of this House and advocate any scheme which rendered it even remotely possible to have a deficit in the national Budget. Far from it. The expenditure for the year is amply covered by the revenue estimates, and if they were not sufficient to meet these, even with further economy, the only result would not be a deficit but that a little less would go to the redemption of Debt.

I must refer very briefly to the principal argument against the reduction of Income Tax which has been advanced from the benches above the Gangway. This argument takes two forms which are mutually contradictory. It has been said that if you remit Income Tax you do not do any good to the population at large, because the remission goes in the form of large sums into the pockets of the wealthy. It is also said at the same time that if you remit Income Tax you do not do any good to industry, because it goes in small sums into the pockets of the men who have small means and that they do not save it, but spend it. These two economic arguments met in triumphant self-contradiction in the speech of the hon. Member for Colne Valley (Mr. Snowden). Surely the true answer to this is that both of the analyses are perfectly true, but that the deduction drawn is untrue. The remission of Income Tax that goes into the pockets of the well-to-do in large sums benefits industry because it becomes available as savings for fresh capital, and let me enter a protest against the case given to the argument by the hon. Member for Colne Valley. I do not think it is fair to suggest of any section of our fellow countrymen that a remission of taxation going into their pockets is to be expended by them in luxury. It is not the case. Income Tax is collected in an enormous proportion from the saving classes who are responsible for the renewal of the capital in industry. Remission of Income Tax goes back to the pockets of that class and it is falsifying economic values to suggest otherwise. In the same way, undoubtedly a large amount of the remitted Income Tax goes into the pockets of people of small incomes in the form of small increases to their incomes, which are too small to have much effect on the capital amount. Is it true to say that that has no effect on trade? That is a very short view. Those increments to the income of the small Income Tax payer are a benefit to trade. They re-invigorate demand, they create fresh demand, they tend to encourage industry by the reinvigoration of demand from the population of the country.

Finally, I would like to refer to another matter. I find it very difficult to agree and, indeed, necessary to express marked disagreement with the argument advanced, or the suggestion made, by the hon. Member for Colne Valley. If I understand his argument against this proposal, it is that when you are remitting a tax you ought, in this case, at any rate, if not in all cases as, I think, he suggested, to reconsider the incidence of the tax and apportion the remission in a manner different from that in which the burden of the tax fell during the period of its collection. It appears to me that that is a very unsound doctrine. Surely, it is common sense and common justice, when you are remitting a tax, to remit it in the same proportion in which it is collected. Why should not those who have borne the heat and burden of the day receive relief in the same way as they have borne the burden? It would be a dangerous principle to admit into our fiscal system that there should be, on every proposal for reduction of taxation, a reconsideration of where the advantages of that remission will go. Our Income Tax is graduated, and the burden falls, in proportion to the capacity to pay. In the same way, relief should go in the proportion in which the burden is borne. That, surely, is a fair principle. I have felt some discouragement in advancing these arguments at various times in the course of the Budget Debates, because it is always hard to feel that one is merely dashing oneself against the impenetrable phalanx of a Treasury Bench which is determined to grant no concession at all. But we have now a mediator, an intercessor who we hope will advance the case we maintain, not from the outside but from the inside. When I remember the capable and extremely powerful speeches made by the Postmaster-General in the Budget Debates, I am refreshed by the thought that there may be forces working at a more persuasive angle which will finally induce the Chancellor to see the force of this argument.

My right hon. Friend who has just spoken has dealt so completely and so concisely with the fallacies of the hon. Member for Colne Valley (Mr. Snowden), who spoke on behalf of the Labour party, and with the dangerous propositions which he put forward, that I need say no more on that subject, except that I would beg the Committee, when dealing with it, to remember that within the last year, as a result of a Commission which was singularly successful in dealing with a thorny and difficult subject and which surveyed the whole field both of Income Tax and Sugar Duty, the House was enabled to place that taxation upon a scientific footing and to eliminate those unfortunate gaps and jumps which prevailed under the previous system and by which, at certain stages of the scale, individuals, whose incomes differed only by a few pounds, paid very considerably different rates of tax. I beg the Committee, when considering this question of relief, not lightly to undo a work which was not easy of accomplishment but on which the fairness of the tax and the smoothness of its collection are largely dependent.

I associate myself entirely with all that my right hon. Friend has said as to the injustice of the proposition so lightly thrown out by the right hon. and learned Gentleman the Member for Spen Valley (Sir J. Simon). He said when you are remitting taxation which everyone admits to be almost unbearable at the time, you should start as if you had a clean state to frame a new system on equity without any regard to the place where you put your burden. Surely in this matter, the downward steps should follow the upward steps, and, until we have something like a tolerable level in taxation—I do not want it thought that our taxation is unreasonable in present circumstances—until we have got back to a tolerable level we ought, when taking off taxation, to follow the path we pursued when putting it on.

I, like my right hon. Friend, have at times been connected with the Treasury. Mine is a Conservative nature and a slow-moving mind, and I cannot so rapidly divest myself of the feelings that were strong in me when I had responsibility in this matter. My right hon. Friend was unwilling to prophesy, and, indeed, I am not surprised, after the experience of the right hon. Member for Paisley (Mr. Asquith) last year, when he said that the Budget of the then Chancellor of the Exchequer was a reckless gamble. Yet we know that that Budget actually produced a surplus of over 100 millions. With that example before us we may well be cautious how we criticise the Estimates which, whether they be right or wrong, are framed by the most competent people that we have, upon evidence and information that is not available to anyone except public servants and Ministers in office. Time will show whether the Prime Minister was not optimistic enough, or whether he has, with the help of his advisers, fairly measured the circumstances.

My right hon. Friend speaks as a man who has studied this question, and the weight of his name and his experience give importance to his suggestions which he puts forward. But when he says that even if you do not cover the additional remission which is now suggested to the Committee, it does not much matter, because the only result would be that we should pay off rather less debt, I would ask the Committee to consider where that argument leads. After all, as my right hon. Friend the Financial Secretary said, this country is the great financial centre and clearing house of the world. What that means for our national strength, for our national and Imperial trade, I think it would be difficult to state in figures or even to explain in words. To lose that position would vitally change our whole position in the world. My right hon. Friend says we are recovering. I think we have recovered, but why have we recovered? Because the world has seen our determination, and has viewed, first with amazement, then with astonishment, and then with respect, the gigantic burdens which this House has had the courage to impose, and which our people have had the patience and wisdom to bear in order that we may re-establish our national finance.

We have recovered our position, but we have recovered it on credit. It is not yet paid for completely. The competent observers in other countries, those whose estimate of our position is best worth having, are assured from what they have seen that this country will do all that is necessary, and will continue to do it for as long as is necessary, in order to keep and render secure our primary position in the world of international finance. That being so we can afford no slack finance, no careless moments. I do not say that there may not be times of great stress when the Sinking Fund may be suspended with propriety, but I do say that except under urgent necessity, for any purpose like an additional 6d. off the Income Tax, to depart from the path which the Prime Minister has marked out in his Budget would deal a great blow to the credit we have sacrificed so much to re-establish, and it might prolong indefinitely the struggle which is still before us.

I was engaged in some very pleasent public ceremonies yesterday, but I have read with great interest the assurances given by my right hon. Friend the Financial Secretary that the entry into the Government of a new Chancellor of the Exchequer portends no change in Unionist finance. There was one subject which could not be raised yesterday upon which, I confess, the declarations of the new Chancellor of the Exchequer have caused me some anxiety, but I take note of the very definite assurance of my right hon. Friend that the Government will be no party to any kind of inflation, but will steadily continue the policy pursued by themselves and their predecessors.

The right hon. Gentleman the Member for West Birming- ham (Mr. A. Chamberlain) began his speech by making certain observations with regard to the remarks of the Member for Colne Valley (Mr. Snowden) and by laying down certain propositions relative to the relief of taxation with which we most profoundly disagree. I imagine he was not in his place when my hon. Friend below me was actually making his speech.

The point my hon. Friend made was this, that we have no objection to a certain amount of money being spent in relief of Income Tax payments, but what we say is. that this method of doing it is not the wisest possible method, and that had the small amount of money been spent in another way one could do more good for the Income Tax payers who are most urgently in need of assistance. The right hon. Gentleman laid down the proposition that as there had been a Royal Commission on the Income Tax which had investigated the subject a short time ago—in 1919—there was therefore no further need for spending money to investigate the situation in the relative positions of different classes of Income Tax payers. That may be the right hon. Gentleman's opinion, but if he will look on the Order Paper he will find that it is certainly not the opinion of hon. Gentlemen who are sitting around him at this moment. The Order Paper is full of Amendments to the Income Tax Acts proposing relief to those very persons on whose behalf we plead that this money might be better spent, and those Amendments are in the names of hon. Members sitting near the right hon. Gentleman.

What is it that this Amendment proposes? I may say that so far as the Financial Secretary to the Treasury is concerned our agreement with him is not very complete. We object to this reduction of Income Tax for just the same reason that we objected to the reduction of Income Tax put forward by the Government. We think the reduction is unsound and unwise in only a slightly less degree. What is the position here We have £26,000,000 to be spent amongst 2,500,000 Income Tax payers. As the Committee knows, Income Tax payers are divided into two classes—one-fourth of them pay at the higher rate and three-fourths, who are the poorer taxpayers, pay at a lower rate. What does this reduction of 6d. mean? It means as a matter of fact that so far as three-fourths of the Income Tax payers are concerned it is only a reduction of 3d. What is the consequence? Here you have £26,000,000 being spent, and of that £26,000,000 only £3,000,000 is going to three-fourths of the Income Tax payers, who are most in need of assistance, while the remaining £23,000,000 are going to the one-fourth who are already in the most fortunate economic circumstances. That is why we have argued that, if money is to be spent on Income Tax payers, a fraction of this sum could have been used so as to give relief to those men with family responsibilities, in whose case relief is most urgently required.

I should like to deal with the speech of the right hon. Gentleman the Member for Norwich (Mr. H. Young), and to answer certain remarks which he made. I listened to his speech with great interest, because I thought he would give an answer to the case against these proposals which was made two days ago. I should have liked him to indicate how he would answer the argument against these proposals. The sum of £26,000,000 has to be found from somewhere, and the right hon. Gentleman indicates where it is to be found, namely, by reducing the Sinking Fund and, perhaps, by further reductions in the amount provided for reduction of Debt. Our statement is that, if it is to be a choice between spending money on the reduction of Income Tax and spending money on the reduction of Debt, money spent in reduction of Debt does far more to increase the amount of capital invested in industry than money spent in the reduction of Income Tax. To that argument the right hon. Gentleman has given no reply.

If you spend money in the reduction of Debt, you pay off the holders of War stock. They have had capital investments, they still want capital investments, and they, therefore, invest that money in other directions. As the Prime Minister stated not long ago, the official Treasury view is that, if money is spent in the reduction of Debt, practically every penny goes back into capital investments of some kind or another. The right hon. Gentleman the Member for Norwich has lately been answering that contention by saying that, although the money may be spent in capital investments, investors of this class will put their money into gilt-edged securities, and not into the kind of securities upon which industry depends. I venture to say that you cannot draw this clear-cut distinction between the value of gilt-edged securities to industry and the value of other securities. After all, good commercial debentures, for instance, are gilt-edged securities, good preferences are gilt-edged securities, and money invested in them goes directly for the purposes of increasing the amount of capital in industry. On the other hand, the right hon. Gentleman claimed that the richer classes would invest the reduction in Income Tax in industry. We do not say that they would not invest a part of it, but we say that Debt reduction goes entirely to investment in industry, while, in the case of a reduction of Income Tax, at any rate a part of it, as everyone knows, is spent in increasing the comforts and the conveniences and the luxuries of life.

I wish to deal, finally, with one argument which, I think, forms common ground both for right hon. Gentlemen opposite and for Members below the Gangway, and it was an argument by which the Government supported their reduction. We, however, disagree with it. It is that, if you diminish the Income Tax, you give a stimulus to enterprise and industry and help industrial recovery. What does it mean? It means that at present the fairly well-off man, after he has paid his taxation, is left, say. with 15s. for himself, and the argument is that, if the Income Tax be reduced by 6d., he will be left with 15s. 6d., with the consequence that he will work harder, take greater risks, and indulge in larger enterprises which would help industrial recovery. I think that that is a fair statement of the argument, which, I suppose, is used half-a-dozen times in every Debate here upon these subjects. Our contention is, not that the argument is absolutely untrue, but that it is most grossly exaggerated. Take the actual position. A reduction of Income Tax will, I think, act as a stimulus to those classes of business men who are working for themselves, and who are in a position in which an increase in the prosperity of the business goes directly into their own pockets. It acts as a stimulus to professional men working for them- selves, to small tradesmen, and in other cases where the personal reward goes to the directors of the enterprise. It does not, however, act as a stimulus to those who are drawing their income from War Loan, or ground rents, or mortgages, or who are shareholders in great limited companies, or even, except to a minor extent, to officials who are living on fixed salaries.

It is on this account that Sir Josiah Stamp put forward the Estimate which has already been quoted, and to which no reply has been given. I presume it will be acknowledged that Sir Josiah Stamp is one of the most noted Inland Revenue officials of this generation, and he has pointed out that, if you reduce the Income Tax, the area of income to which it applies any stimulant is only about one-sixth of the total amount of the reduction; that is to say, for every 6d. by which you reduce the Income Tax, you give a stimulus of about 1d., and the other 5d. has no effect in this direction at all. That is why we say that the whole of this argument is grossly exaggerated, and will not bear the burden that has been placed upon it. For that reason we believe that this proposal is unfair to the poorer Income Tax payers, and that it would do nothing to stimulate the industry of the country.

I wonder whether it would be convenient to the Committee that we should come to a conclusion on this matter? It does not, of course, in the least affect the Government, because, as the Committee know, an arrangement has been come to that we shall dispose of all the Amendments tonight at 12 o'clock. I think, however, that it would be only fair to those hon. Members who have Amendments still on the Paper, if the Committee could see their way to come to a conclusion upon this.

Amendment negatived.

The next two Amendments, standing in the name of the hon. Member for Govan (Mr. N. Maclean), relating to repayment of Income Tax on mineral rights and repayment of Super-tax, are out of order, as they would increase the charge. The Amendment in the name of the hon. Member for Barnstaple (Mr. Peto), relat- ing to assessment of Super-tax, should come as a new Clause.

Clause ordered to stand part of the Bill.

CLAUSE 9 ( Amendments as to Income Tax on assurance companies ) ordered to stand part of the Bill.

CLAUSE 10.—( Income Tax on leave pay, etc., to be chargeable under Schedule E. )

(1) Where any emoluments, pension or annuity are or is payable by or through any public Department in Great Britain or Northern Ireland, but otherwise than out of the public revenue of Great Britain and Northern Ireland or the public revenue of Northern Ireland, to a person who is or has been employed in the service of the Crown outside Great Britain and Northern Ireland in respect of that service, or any pension or annuity is so payable to the widow, child, relative or dependant of any such person as aforesaid, and the person in receipt of the emoluments, pension or annuity is chargeable to Income Tax as a person resident in Great Britain or Northern Ireland, the emoluments, pension or annuity shall be chargeable to Income Tax under Schedule E, and the provisions of the Income Tax Acts relating to the deduction, assessment, and collection of tax in respect of official pay payable at a public office shall apply accordingly with any necessary modifications.

(2) Any deduction on account of Income Tax made at any time before the passing of this Act which would have been properly made if this Section had been in force at the date of the making of the deduction and had referred to the United Kingdom instead of to Great Britain and Northern Ireland or Great Britain or Northern Ireland, shall be deemed to have been properly made under Schedule E.

I beg to move, in Subsection (1), to leave out the words "is or" ["who is or has been employed in the service of the Crown."]

I move this Amendment on behalf of my hon. Friend the Member for Orkney and Shetland (Sir R. Hamilton). The point is very simple, and can be very shortly put. There is a practice that, when Colonial officials are in England for a period of leave, and a payment from the Colonial Office or other Government office falls due during their stay in England, a deduction is made for Income Tax. It is conceded that it is quite right that, if a Colonial officer, after his service, is resident in England, Income Tax should be deducted, but where a man is still serving, and is only in England on leave, it is simply a matter of machinery if Income Tax is deducted at the source here, and it is calculated to cause the visitor here temporary embarrassment and a good deal of inconvenience. There is absolutely no risk to the revenue if the deduction is made and the amount is collected in the Colony in which he is resident, and I hope that the right hon. Gentleman in charge of the Bill will see his way to accept this very simple Amendment.

I think the hon. Member does not quite appreciate the present position. This Clause does not in the slightest degree alter the liability of anyone to Income Tax. When a Colonial official is over here, he is, at the present moment, bound to pay Income Tax upon such portion of his income as is paid to him when he is here, and the only point is that, up to the present moment, the Income Tax has been deducted by the paying Department. The India Office, for instance, in paying the salaries of Indian civil servants while they are here on leave, has always deducted the appropriate amount of Income Tax. There is now, however, in consequence of a legal decision, very grave doubt as to whether that action is legal, and whether it is not the proper course that the Income Taxpayer should make his ordinary declaration and be assessed and pay in the ordinary way. That, of course, is a very long process, and is of no possible benefit to the civil servant himself, but only gives him more trouble, and the object of this Clause is simply to validate the existing practice, whereby the Income Tax would be deducted by the paying Department. It does not inflict any further liability on the civil servant. I hope that, after this explanation, the hon. Member will not press the Amendment.

I should like to ask the right hon. Gentleman to direct his mind to this fact, that we are not suggesting that any novelty is introduced, but are objecting to the existing arrangement, which is being perpetuated by this Clause. In the case of men who are temporarily resident in this country, the usual practice in regard to collecting Income Tax from colonial officers is departed from, simply because they are on leave in this country. I do not wish unduly to press the point, but I should like to know that the point I desire to make has been appreciated by the right hon. Gentleman.

The point is quite appreciated, but I do not think that the omission of these words would effect the object which the hon. Member desires. It would only leave the civil servant in question in the position of having to make a return of his income and be assessed, and that, as I have said, would give him more trouble than he would have under the provisions of this Clause.

Amendment negatived.

Clause ordered to stand part of the Bill.

CLAUSE 11.—(Exemption from Income Tax of salaries of High Commissioners, Agents-General, and their staffs.)

(1) Subject to the provisions of this Section, income arising from any office or employment to which this Section applies shall be exempt from Income Tax (including Super-tax), and no account shall be taken of any such income in estimating the amount of income for any of the purposes of the Income Tax Acts for the year 1923–24 or any succeeding year of assessment.

(2) The offices and employments to which this Section applies are the following, that is to say:

The office of High Commissioner and the office of Agent-General:

The employment in Great Britain or Northern Ireland as a member of the personal staff of any High Commissioner or Agent-General, or as an official agent for British India or any self-governing Dominion, for any State or Province of a self-governing Dominion, or for any self-governing Colony of a person certified by the High Commissioner or Agent-General, as the case may be, to be ordinarily resident outside Great Britain and Northern Ireland and to be resident in Great Britain or Northern Ireland solely for the purpose of the performance of his duties as such member or official agent.

(3) Nothing in this Section shall operate to grant relief from Income Tax (including Super-tax) in respect of income arising from the employment of any person in any trade, business, or other undertaking carried on for the purposes of profit.

(4) In this Section—

The expression "High Commissioner" means the High Commissioner for British India or for any of the self-governing Dominions:

The expression "Agent-General" means the Agent-General for any State or Province of a self-governing Dominion:

The expression "self-governing Dominion" means the Dominion of Canada, the Commonwealth of Australia, the Dominion of New Zealand, the Union of South Africa, the Irish Free State or Newfoundland:

The expression "self - governing Colony" means any Colony certified by a Secretary of State to be a self-governing Colony.

I beg to move, in Sub-section (4), after the word "dominion" ["for any State or province of a self-governing dominion"], to insert the words "or for any self-governing colony."

The object of this Clause is to carry out what has been done voluntarily, and, as I think the Committee will agree, very properly, for many years past, and to make it clear that Agents-General and representatives of our great self-governing Dominions should not be charged Income Tax here on the salaries paid to them by the Dominions. For many years past they have not been so charged, but, apparently, that omission to charge was not quite legal. This Clause makes it legal. With regard to the Amendment, the position is that it may quite possibly happen, as the years roll on, that some Crown Colony may become a self-governing Colony, and we do not want to have to make a further Amendment. We desire, therefore, to insert the words that I have proposed, in order to provide for this possibility.

This question raises an issue of some importance which was considered by a Committee in 1921. The object of the Clause is to continue exemption, as regards the Income Tax of this country, to the representatives of our Dominions and self-governing Colonies. I have no objection to offer to that proposal at all, but I want to ask what I believe to be an important question regarding the practice in these matters. The Committee in 1921 was appointed for the purpose of considering the taxation of the representatives of foreign Governments and in the inquiry fell under two heads, first of all the taxation on trading which was done by foreign Governments, and secondly, the taxation of their diplomatic representatives in this country. It would be irrelevant at present to argue the case of trading, because it will fall to be considered later, and I hope very soon, in some Finance Bill. But as regards the exemption of diplomatic representatives, the point I want to put is that in the course of that inquiry it was stated that we do not obtain full reciprocity in this matter. I entirely agree that as regards the Colonies, and perhaps other parts of the world, full reciprocity and exemption from Income Tax will only come after some decision of the Imperial or Colonial Conference, or whatever it may be. What I want to find out is whether we are going to make this concession under our Income Tax system without insisting upon the maximum of reciprocity from the Colonies and other parts of the world which we have every reason to expect. I hope the right hon. Baronet will be able to give us some information as to the steps which are being taken to obtain that reciprocity which I think is the only just basis on which this exemption should proceed.

I will bear in mind the point which the hon. Member has raised, but it really does not affect this Clause. An Economic Conference with our Dominions is to be held in October.

Amendment agreed to.

Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."

I want to know whether the officials who are dealt with in this Clause are taxed on income which is remitted to them from outside the United Kingdom. It seems to me they should be relieved from taxation on income of that sort, just as they are on their salaries. One can understand that they are properly taxed in the ordinary way on investments in this country or any other money they may earn in this country. Of course, as we want to get the best men from the Colonies, they ought to be treated in the same way as, I believe, Ambassadors are, and no doubt that was the intention of the Clause, and that they should not be subject to Income Tax at all in conse- quence or their compulsory residence in this country by reason of the office they hold.

I think my hon. Friend is really more Imperial than Cæsar. I do not think there has been any demand from the Dominions for the concession for which he asks. The Clause, I understand, only carries out the existing practice. If my hon. Friend has any commission or authority on behalf of the Dominions to ask for this I will carefully consider it between now and Report, but at present I have received no definite request.

It has been mentioned to me by the ex-holder of an office on behalf of several present holders of the office. I believe it is the custom administratively not to tax them on that income, but I am in somewhat serious doubt as to whether that is not an administrative detail which is not strictly in accordance with the law. So if my right hon. Friend will consider it I shall be obliged.

Question put, and agreed to.

CLAUSE 12.—(Relief from Super-tax in respect of establishment of Irish Free State.)

(1) Notwithstanding anything in Section five of the Income Tax Act, 1918, the Special Commissioners may, on an application made in that behalf by any person chargeable with Super-tax for the year 1923–24, make such an adjustment, by repayment of tax or otherwise, as will reduce the amount of Super-tax payable by that person for that year to the amount which would have been payable by him if the Irish Free State had been established on the sixth day of April, nineteen hundred and twenty-two, and if in relation to Income Tax for the year 1922–23 the Income Tax Acts had had effect subject to the adaptations and modifications thereof for which provision is made by the Orders in Council made under the Irish Free State (Consequential Provisions) Act, 1922 (Session 2), in connection with the establishment of the Irish Free State.

(2) The provisions of the Income Tax Acts and of any Regulations made there-under with respect to appeals against assessments to Super-tax (including the provisions relating to the statement of a case for the opinion of the High Court on a point of law) shall apply in the case of decisions given by the Special Commissioners on applications made under this Section as they apply in the case of assessments to Super-tax.

I beg to move, in Sub-section (1), to leave out the word "may" ["the special Commissioners may"], and to insert instead thereof the word "shall."

This is a very important Clause. I do not suppose a single Member of the Committee understands what it is about. I do not understand it myself. I have a hazy idea that as I am a citizen of the Irish Free State, resident in this country, it applies to me in some shape or other. I took steps the other day to recover what tax was possible in connection with my property in the Irish Free State, and I was told it was hoped that during the passage of the Finance Bill the position would be made clear. I, too, hope it will.

It may save time if I say I shall be glad to accept the Amendment.

I thank the right hon. Gentleman, but I should like to have an explanation of the Clause.

Surely it is desirable that the Committee should not be asked to pass without explanation from the Government a Clause which my hon. and gallant Friend says he cannot understand, and challenges anyone in the Committee to understand.

Any explanation that is necessary can be given on the Question "That the Clause stand part of the Bill."

Amendment agreed to.

Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."

This is a very involved Clause. It hinges on the fact that we are apparently going to adopt the date when the Irish Free State was established. I really do not know when the Irish Free State was established. That date makes one difficulty in the Clause. Again it hinges on the Orders in Council made under the Irish Free State (Consequential Provisions) Act, 1922, Session 2, in connection with the establishment of the Irish Free State. That was a very long and complicated Act. It was hotly debated and was only passed at the fag end of the Session to bring some sort of peace to a troubled country. I invite my right hon. Friend to explain exactly what the Clause does.

It is a very involved Clause, but it really only relates to the payment of Super-tax for the year 1923–4 by anyone who is in the position of my hon. and gallant Friend of owning property both in Great Britain and in the Irish Free State. Broadly speaking, the return for Super-tax is based on the income from all sources for the preceding year, so that British Super-tax for 1923–4 is chargeable on the income liable to United Kingdom Income Tax for 1922–3. In 1922–3 there was one unit of taxation for Great Britain and Ireland. In 1923–4 the unit of taxation becomes Great Britain and Northern Ireland, and the Irish Free State will have a separate and distinct Income Tax and Super-tax of its own. The reason of the Clause is to prevent my hon. and gallant Friend having to make a Super-tax return in Great Britain for this year of his whole income, including certain income in the Irish Free State, upon which he would not have had to make a Super-tax return if the unit of taxation had been the same last year as this. It only relates to this particular year, and is put in for the very purpose of saving him getting into difficulties with his Super-tax.

May I ask, for the information of people who are in the unfortunate position of holding property in Southern Ireland, as well as in Great Britain, are they liable to Super-tax in both countries? For instance, if a man received £100 a year from Southern Ireland and £3,000 a year coming from Great Britain, can he be charged Supertax in Southern Ireland because of his property in Great Britain?

No. The Irish Free State becomes a separate taxing entity altogether, and to be charged Super-tax both in Great Britain and in the Irish Free State the subject must have a sufficient income in each of those countries.

Question put, and agreed to.

CLAUSE 13.—(Exemption for charities in Irish Free State in respect of tax for 1923–24.)

Subject as hereinafter provided, paragraph (

Provided that this Section shall not apply except where the interest, annuities, dividends, shares of annuities, yearly interest or other annual payment arise from investments which were held by the body of persons or trust, or were subject to Rules or Regulations as aforesaid, on the fifth day of April, nineteen hundred and twenty-three.

I beg to move to leave out the words "paragraph ( b ) of Sub-section (1) of."

Charities have always been exempt from Income Tax. One of the consequences of the establishment of the Irish Free State is that charities situated in this country with property in the Irish Free State, and charities situated in the Irish Free State with property in this country, would find themselves no longer entitled to exemption unless some measure was taken, both by this House and by the Free State Parliament, to relieve them. The Government have accordingly put in this Clause to continue the relief for the present year, and the Irish Free State has introduced a corresponding Clause in its Finance Bill. This Clause does not embrace the whole of the subject matter, because it only includes some charities which have been hitherto entitled to exemption, and unless my Amendment is adopted, a number of public elementary schools where education is given free would find themselves now subjected to Income Tax. I understand the Government are prepared to accept the Amendment.

This is one of a series of Amendments designed to remedy a defect in a Clause which would otherwise cause very great hardship to some schools in the Irish Free State. In the circumstances, the Government feel it quite right to accept them.

As far as I gather, my right hon. Friend accepts this Amendment on behalf of the British Exchequer. Is the Irish Finance Bill going to make similar Amendments, otherwise the effect will be that these schools, though exempt from English Income Tax, will still be liable to Irish Income Tax.

6.0 P.M.

We do what we think to be right here, and I should imagine that the Irish Free State would do what is obviously right. It would be equally wrong if I attempted in any way to dictate to the Irish Free State. The Irish Free State would, rightly, resent any attempt at dictation.

Apparently, Clause 13 has been agreed upon with the Irish Free State. Now the right hon. Gentleman is accepting Amendments. I do not know whether my hon. Friend who moved the Amendment is speaking on behalf of the Free State Government.

Will the right hon. Gentleman communicate with the Irish Free State respecting the Amendments he has accepted, and suggest that they make similar Amendments?

I will communicate at once with the Free State Government that this Committee have accepted these Amendments, which they think are right, and I will leave it there for the Free State Government to decide for themselves.

I understand that there has been a distinct agreement respecting Clause 13.

Then why not suggest that these obviously fair Amendments should also be carried out by the Irish Free State?

I will communicate with the Free State Government, and let them know what this Committee has done.

Will not the right hon. Gentleman, when he is communicating with the Free State Government, tell them that if their charities are to get the benefit of exemption from British Income Tax, they must on their part give a similar exemption from Irish Income Tax to charities in this country? Otherwise it would be a lop-sided agreement in the interests of Irish charities, while our charities would not benefit. I hope that before the Report stage we shall get a definite assurance from the Irish Free State Government that they will give the same reciprocal advantage to charities in this country that we are giving to the charities in Ireland. If they do not give that undertaking, I should be strongly disposed to vote against this Clause regarding Southern Ireland on the Report stage. Why should we grant benefits to Southern Ireland which they refuse to-give to us? Therefore, I hope my right hon. Friend will get a definite assurance before the Report stage from the Irish Free State that they will give exactly the same reciprocal advantages to the charities of this country that we are giving to their charities.

This is not a Clause that is giving benefit to charities carrying on their operations in the Free State so much as to charities whose domicile is in the Free State, but whose property is either in this country or in Northern Ireland and whose operations are in this country and Northern Ireland. We should only be cutting off our own noses if we did not pass this Clause, which is for the benefit of charities operating either in Great Britain or in Northern Ireland. The charities which, in fact, have property in the Free State and are domiciled here, must be very few, and the amount of property they have in the Free State must be very small.

I hope my hon. and learned Friend the Member for York (Sir J. Butcher) will not press this matter now. This is an act of justice to charities. I will communicate with the Irish Free State the decision of this Committee, and, if necessary, my hon. and learned Friend can raise the matter again on the Report stage.

Amendment agreed to.

Further Amendments made:

After the word "shall" ["charities, shall, in the"], insert the words

"in the case of rents and profits of any lands, tenements, hereditaments, or heritages belonging to any hospital, public school, or almshouse in the Irish Free State, or vested in trustees in the Irish Free State for charitable purposes, and."

"or which, in the names of trustees in the Irish Free State, is applicable solely towards the repairs of any cathedral, college, church or chapel, or any building used solely for the purpose of divine worship."

After the word "where" ["where the interest"], insert the words

"the lands, tenements, hereditaments, or heritages belonged to the hospital, public school, or almshouse, or were vested in the trustees, on the fifth day of April, nineteen hundred and twenty-three, or."

Leave out the words "or trust" ["or trust, or were"], and insert instead thereof the words "trust, or trustees."—[ Sir M. Macnaghten. ]

Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."—[ Sir W. Joynson-Hicks. ]

As this is the end of the Irish Clause, I should like to ask the Financial Secretary whether he has any idea how long it will be necessary to keep a separate Revenue Office of the Board of Inland Revenue in the Irish Free State. I put this question to the Attorney-General when the Ratification Bill was under discussion last December, and he replied that he could not say. Can the Financial Secretary tell me now?

That question does not arise on this Clause. Perhaps my hon. Friend will put down a question, and I will let him know.

Question put, and agreed to.

CLAUSE 14.—(Amendments as to fines and penalties.)

(1) Proceedings for the recovery of any fine or penalty incurred under the Income Tax Acts in connection with or in relation to the Income Tax (including Super-tax) charged for the year 1920–21 or any subsequent year of assessment may be commenced at any time within six years next after the date on which it was incurred.

(2) The amount of the penalty which may be recovered in proceedings in any Court under Section one hundred and seven of the Income Tax Act, 1918 (which imposes penalties for neglect to deliver lists, declarations, and statements), shall be a sum of twenty pounds and treble the amount of the tax with which the offender ought to be charged under that Act instead of a sum of fifty pounds.

(3) The amount of the penalty recoverable under Sub-section (2) of Section one hundred and thirty-two of the Income Tax Act, 1918 (which imposes a penalty on a person who aids, abets, assists, incites, or induces another person to make or deliver a false or fraudulent account, statement, or declaration), or under Sub-section (2) of Section thirty of that Act (which imposes a penalty on a person who aids or abets any person in committing an offence under that Section), shall be increased to five hundred pounds.

I beg to move, in Sub-section (1), after the word "may" ["assessment may be commenced"], to insert the words "in any case of fraud."

This Clause is for a purpose with which every decent man will agree, namely, to tighten up the law against people who are guilty of fraud in evading Income Tax and Super-tax. Does the Government wish to tease and worry innocent people? It does seem to me that this Clause will tease and worry innocent people for at least six years, and that period of six years may mean ten years, because already we can go back three years, and as some of the three years contain the germs of an average of three different sets of years, it means that at present you can go over accounts for a period going back ten years. I ask that the Government should either make it plain, or should allow us to do so by inserting the words "in any case of fraud," that this can only be done in case of fraud, and not in the case of innocent people. Those with whom I have the privilege to be associated—I am authorised to ask for this concession by the London Chamber of Commerce and the Association of British Chambers of Commerce, bodies of men who are not likely to countenance anything that is unworthy—are willing to do everything possible to assist the Government if there is any shadow of accusation of fraud, but when there is no fraud alleged, the Government ought not to allow harassing and worrying Regulations to come into force, which would mean that accounts would have to be kept open for as long a period as six years. The Government will have certain rights in regard to going back for six years and to open accounts for that period if this Clause is passed, whereas if the taxpayer makes a mistake in accepting an assessment, and does not give notice within 21 days, he cannot get back the money he has paid. The Solicitor-General looks at me with a certain amount of doubt, but I have before me a case which I can prove. The Government is playing "Heads we win, tails you lose" in regard to this matter, and unless we get this Amendment accepted, and the six years' period reduced to four, it will seem that the Government has in its mind a desire to harass trade and to bring a great deal of trouble upon men who are entirely innocent of fraud, but who may have been guilty of an error.

My hon. Friend began his observations by asking a question which I should like to answer. He asked whether the Government intend to harass innocent persons. The answer to that question is in the negative. This Clause is not designed for that purpose. The Clause is designed simply to carry out the recommendations of the Royal Commission on Income Tax, that the existing provision under which proceedings may be taken for the recovery of any fine or penalty may be extended from three years to six years. There is nothing in the Clause to alter the circumstances under which any proceedings may be taken for the recovery of fines or penalties. The sole purpose and effect of the Clause is to increase the three years to six years, in accordance with the recommendations of the Royal Commission.

The Solicitor-General says that the Government do not mean to harass us. Does he not think that they will harass us if they go back six years instead of three years?

I have given my answer, that the Government does not intend to harass innocent persons, and I am pointing out that this Clause does not alter the circumstances under which fines and penalties may be recovered, but simply extends the period from three years to six years. My hon. Friend proposes to insert words which would make it necessary, if proceedings were to be taken for the recovery of any fine or penalty, that we should have to prove, as a sort of preliminary, that it was a case of fraud. That would be inconvenient. But there is a very much better reason than that for not accepting my hon. Friend's proposal, because by Section 140 of the Income Tax Act, 1918, the principal Act, all sorts of provisions are made by which, in the case of innocent persons, proceedings in Court may be stayed. Sub-section (3, b ) provides that

"If proceedings have been commenced in any Court, the general Commissioners may certify that in their judgment no fraud or evasion was intended, and the Court may, on summary application, stay proceedings,…"

The general Commissioners are particularly careful of the interests of the taxpayers. They hold a middle position between the Board of Inland Revenue and the subject who is taxed, and they have power simply to certify that no fraud or evasion is intended and on that certificate the proceedings would be stayed. I hope my hon. Friend will be satisfied there is no case for his apprehensions, and that it is not necessary to insert the words he proposes.

Amendment negatived.

Yes. I beg to move, in Sub-section (1), to leave out the word "six" ["within six years"], and to-insert instead thereof the word "four."

Amendment negatived.

I beg to move to leave out Sub-section (2) and to insert instead thereof new Sub-sections—

It was also pointed out that, as a result of a short revision of certain assessments, in two years, I think 1917 and 1918, something like £1,250,000 had been recovered in each year, and at any rate I think that the final estimate, for the purpose of the Clause which we are now discussing, indicated that, at the very lowest point, the net loss due to Income Tax evasion in Great Britain was probably between £5,000,000 and £10,000,000 per annum. It is true that that figure was based upon a time when the tax had reached its highest point, 6s. in the £, but everybody will agree that that estimate is very low, and those who have studied this problem think that if we had the additional powers and penalties, some of which are suggested by this Clause, we should be able to get at least from £7,000,000 to £10,000,000 additional revenue under the existing Income Tax schemes, and this not by any new device in law, but only by calling on the existing taxpayers to do their duty under the law as it stands. I suggest that that is a reasonable request from every point of view and only fair to the great majority of taxpayers in this country who are honestly making a return and trying to do their duty by the State.

Let me recall the history of the Royal Commission of 1919 more particularly from the point of view of Income Tax evasion. The Commission sat in 1919, and in response to a request from the right hon. Member for West Birmingham (Mr. A. Chamberlain), who was then Chancellor of the Exchequer, we endeavoured to finish our Report in the early part of 1920, in order that he might be able to adopt in his Budget statement many of the recommendations which we made in the matter of the abatements and allowances and the limits of Income Tax imposition. Those recommendations were adopted, but unfortunately practically all the other parts of the Report were left in abeyance, and we are making a plea to-night for the definite adoption of the unanimous part—I think the only unanimous part—of the Royal Commission's recommendations which refer to Income Tax evasion. We made a series of proposals under two heads. The first included the series of penalties, which we believed should be imposed on people who evaded or sought to evade the Income Tax law. The second series of proposals included recommendations for giving the Inland Revenue authorities additional powers of access to books, and other steps of that kind, without which we believed unanimously on this Commission, which included many eminent business men, that they could not adequately discharge their duties either to the Government or to the taxpayers.

A little later in this discussion we refer to a new Clause in the recommendations, by way of additional powers, which the Royal Commission put on record. At the moment we are only concerned with the penalties for evasion. The Government suggests some three changes in the present law. There should be first an extension from three to six years of the time within which proceedings may be taken to recover money due on the assessment. Second, it proposes that penalties for failure to make returns should be increased, I am afraid not by any means to an adequate extent. Third, it proposes an increase of penalties on people who aid and abet others in making a false return or an evasive return for Income Tax purposes. I agree that these are improvements to some extent on the existing position, but, in view of the fact that this Report of the Royal Commission was unanimous, we should do our best to include under the head of penalties the whole of the recommendations on this point.

The other two proposals which the Royal Commission recommended were first, a proposal in reference to companies. A considerable amount of evasion takes place in certain cases in company management in this country. Within recent years there have been cases in the Court which I think every honest business man will regard as a grave reflection not only on the people who made the evasion but also on the people associated with them. That must be stopped at the earliest possible moment. The sums involved are very large, and they represent a substantial injustice to British taxpayers as a whole. That is one part of my recommendation in the long Amendment on the Paper to-night. The other recommendation, at the conclusion of my long Amendment, which embodies what the Commission recommended, simply is that the later presentation of a statement is not to be held as wiping out an earlier fraudulent or evasive statement which has been lodged, with, of course, the proviso that where the party has been innocent in the matter, there should be power to stay the prosecution.

I have simply included in the long Clause the unanimous recommendations of the Royal Commission, and I ask support for them with perfect confidence, because I think that the proposals of the Government with regard to penalties are inadequate. The Royal Commission viewed this problem as a whole. In the course of our discussion it was made clear that the penalties and the extra powers must be taken together. It was part of the scheme to try to deal with Income Tax evasion in this country. I would rather have the penalties proposed than nothing at all, but many hon. Members will agree that if we are to have the penalties, we should have the whole of the penalties and not merely a part of them, which the Royal Commission recommended. Otherwise, we believe that the Inland Revenue authorities will be in a very difficult position, making it not by any means certain that we shall get the revenue which these penalties should bring and which the taxpayers have every right to expect. I suggest that I have presented a very reasonable case, and I trust earnestly that in the interests of the taxpayers as a whole the Government will see its way to adopt this Amendment.

I do not know what the hon. Member for Farnham (Mr. A. M. Samuel) will think of the proposal which has been made from the opposite side. The hon. Member for Central Edinburgh (Mr. W. Graham) rendered very eminent services on the Royal Commission on Income Tax, and gave a great deal of thought and attention to this matter, and he has made certain proposals here which really give me more powers than I think it necessary for me to have at the present time. I realise all that the hon. Gentleman says about the wicked people who evade Income Tax. The man who deliberately evades Income Tax, the scoundrel who compels the hon. Member and myself to pay more than our share, is deliberately taking money out of the pockets of those members of the community who do pay, and it is very desirable that every means should be taken to prevent that kind of man from escaping, and to insure that when he is in Court adequate penalties shall be imposed on him. But if the hon. Member will look at Clause 14 he will see that the Government is carrying out three recommendations of the Royal Commission.

The first extends the time for recovering penalties from three to six years. The second Sub-section of Clause 14 provides that the penalties which can be recovered in the High Court shall correspond with those imposed by the Commissioners. That is very desirable. The position is that if there is fraud and the fraudulent income taxpayer is prosecuted in the High Court he can at present be fined only £50, but if he is dealt with by the Commissioners they can fine him £20 and treble the amount of duty in dispute. It is under that provision that the very large penalties which we see from time to time in the Press are inflicted. A penalty of £50 is ridiculous in the case of a man who has defrauded the Government, perhaps, of many thousands of pounds. It is sometimes desirable and more convenient to proceed by the High Court, which rightly exposes the proceeding of the fraudulent income taxpayer and holds him up to public obloquy. Therefore I ask the House to approve of Sub-section (2), which increases the penalties inflictable.

The third Sub-section is one which inflicts penalties on anyone who aids or abets a fraudulent Income Tax payer, and imposes higher penalties upon him—up to an amount of £500. I do not think that the House will consider that £500 is too much for a man who aids another in evasion and generally takes part with him in breaking the law. But the hon. Member for Central Edinburgh goes very much further. He asks us to remodel our Income Tax penalties, it is true in accordance with the suggestions of the Royal Commission. He wants to secure penalties for false returns by limited companies to be recoverable from the company or its directors, and for penalties on a firm to be recoverable from its active partners. I have gone into this matter very fully indeed with the Departments concerned, and my information is that, with the exception of the Amendment which we are proposing, it is not necessary for us to have any further Amendment such as that now before us. At present we have no difficulty in dealing with these cases.

That being so, while, of course, it is rather like refusing a bonne bouche when it is offered from the Opposition, I do not think the Amendment is necessary. Year by year we are dealing with this matter. Last year the then Chancellor of the Exchequer (Sir R. Home) put into the Finance Bill one or two very important provisions dealing with evasion. That Clause dealt with evasion of Income Tax by the creation, I will not say of fraudulent trusts, but trusts which evaded the tax. My right hon. Friend also made a beginning last year with proposals for dealing with one of the methods by which a great deal of Super-tax has been evaded. Let me see how those Clauses work. My information is that they are working well. While I acknowledge and thank the hon. Gentleman opposite for the care which he has given to this question, and, in fact, for the Amendment which he has just moved, let me say that if next year I still occupy the position that I now hold, and if it is thought necessary by my advisers, I shall come to the House and ask for such penalties as are then thought to be necessary. It is hardly desirable to put into an Income Tax Act greater penalties-than those which the Government of the day and the Income Tax Department think to be necessary.

The right hon. Gentleman seems to treat this Amendment as though it trenched on the province of His Majesty's Treasury. Let me put the other point of view. The right hon. Gentleman admits that there have been in the past, and are still, enormous frauds on the Treasury. He admits that there are swindlers and swindling. It is obvious that that is the Government's view; otherwise they would not have appointed the Royal Commission. The Royal Commission took evidence and drew up a Report. According to that evidence and Report, there are defalcations amounting to over £5,000,000 a year. The Royal Commission reported five years ago, and now the Treasury representatives complains that the Opposition, having waited five years, should ask the Government to take definite steps to end swindling. It is all very well for the right hon. Gentleman to say that he has no need of these provisions I presume that the previous Chancellor of the Exchequer had no need of the provisions now being inserted in the Finance Bill, in order to stop waste, loss and swindling. I presume that if we last year had put forward the Clauses that the right hon. Gentleman now puts into the Finance Bill in order to stop swindling, we should have-had exactly the same answer as has been given to us to-day. We should have been told, "Really, you are offering me more than is necessary. I am the State; I know from the Treasury what we want. I can assure the Opposition that they need not bother with our secret system for getting at the facts, for extracting from the taxpayer all that the taxpayer ought to pay." We have waited all these years. We have seen in last year's Finance Bill an effort made, against terrific opposition, to stop the swindle of one-man companies. We remember how the effort made by the then Chancellor of the Exchequer failed, largely on account of the desperate opposition of Members on his own side of the House. Now, when we bring forward another unanimous recommendation of the Royal Commission, we are told that it is not wanted. Judging from the past, all these recommendations of the Royal Commission will be wanted. Indeed, it is little short of marvellous that we have had Income Tax in this country for nearly 80 years, and that it is only now that we are endeavouring to make the tax water-tight and to secure for the community what the community intended should be paid when Income Tax was imposed. For myself and my party, I say that we regard all the safeguards put forward in the unanimous Report of the Royal Commission as essential to the honest collection of Income Tax. We shall certainly vote for the Amendment, and in doing so we believe that we are acting within the limits of the recommendations of the Royal Commission, and acting in the interests of honesty in the administration of the country.

The argument advanced by the last speaker appears, on the face of it, to have a great deal in its favour. I agree that it is the business of this House to see as far as possible that there is no evasion by taxpayers—evasion which results in increased taxes having to be paid by others. But the hon. and gallant Member seems to have failed to realise what is the true position which this House should take. This House has not merely to take the position, so to speak, of savaging the taxpayer; it has to protect the honest taxpayer against being put to excessive trouble or being put under a cloud of suspicion and perhaps improperly convicted. My objection to the Amendment is largely on the ground of the form in which it is drawn. I refer particularly to the last lines of the Amendment and to the words—

"Provided that the Court may, on proof that a bona fide mistake had been made and that no fraud or evasion was intended, stay such proceedings."

The Amendment deals with a man who makes an incorrect return, who makes it without any bona fide mistake, and makes it with some fraud or intention of evasion. It puts upon the taxpayer the burden of proving his innocence, which is, of course, contrary to all our ideas of justice. I suggest that in those cases, if the Government are satisfied that what they ask for will give all the powers wanted, it is certainly not the business of this House to say that it should be incumbent upon every taxpayer who has made a mistake absolutely to prove his innocence, and that he should be assumed to have been dishonest unless he proves the contrary. It would not be right for us to give the Government powers which I would describe as somewhat savage.

From time to time Amendments are moved from this side of the House to alter the Income Tax laws. It is the invariable custom for the Government spokesman, when refusing the Amendments, to refer to the Royal Commission, and to point out that the Royal Commission examined the subject exhaustively, and that the Amendments are opposed to the Commission's Report. In this particular Amendment we fall back on the Report of the Royal Commission, and, if the former practice of the Committee in judging these Amendments is right, the balance of argument suggests that this Amendment is a correct Amendment. The Mover of the Amendment, as has been said, has studied the subject very closely. A little earlier in the afternoon the right hon. Member for West Birmingham (Mr. A. Chamberlain) pleaded for the maintenance of the standard rate of Income Tax, and urged the Committee not to make any changes this year, because the Royal Commission had reported in a contrary sense. I hope, therefore, that the Government's spokesman may keep an open mind on the subject, because I am sure that Members in every section of the House are anxious that the Income Tax should be paid by consent.

Great Britain leads the way in the matter of direct taxation, and our Income Tax law is the admiration of the world. Recently the French Government tried to impose an Income Tax but, for one cause or another, the inhabitants of that country did not show any confidence in the proposal, or, rather, they showed less desire to pay for the upkeep of their country than do the people of this country. Considering the very high rate of Income Tax, it should be levied fairly and squarely on all who are liable. It has recently been noticed that Income Tax is pressing so severely that arrears are now mounting up to a sum of from £80,000,000 to £90,000,000. While that state of affairs continues, any individual who is liable to pay Income Tax, and who takes steps to evade the payment, should be severely fined. The Financial Secretary said he had accepted two or three of the recommendations of the Royal Commission, but, glancing through that Report, one finds that there are many recommendations, and to choose one or two and then to say to this Committee that the main recommendations have been accepted by the Government, is not treating the Report of the Royal Commission in the manner in which it deserves to be treated. This tax, heavy as it is, should be levied with the consent of all classes of the community who are paying. Those who are paying have an uneasy feeling that large numbers of people are evading the tax, and we have an Inland Revenue official giving evidence and stating in public that £5,000,000 or £7,000,000 of Income Tax is being evaded, and, while that state of things exists, we hope the Financial Secretary will give a more sympathetic hearing to proposals such as are contained in this and the further Amendments which will be moved on this subject.

I rise not so much for the purpose of dealing with the general question of increasing the powers of the Commissioners of Inland Revenue against persons who are in default, but rather for the purpose of drawing attention to the openings for evasion which it is here proposed to stop. I would remind the Committee that not merely are the recommendations embodied in this Amendment the unanimous recommendations of the Royal Commission, but they are actually the proposals which were made to that Commission by the representatives of the Inland Revenue, as being absolutely necessary, in their opinion, for the prevention of fraud and the protection of the honest taxpayer. The first proposed new Sub-section, which is numbered (2), proposes that where the Government have the option of proceeding for the recovery of any fine or penalty either in the High Court or before the general commissioners and where the amount of the penalty recoverable in the High Courts is less than that recoverable before the commissioners, the maximum penalty recoverable by the High Court should be increased to the same amount as that which is already allowed before the general commissioners. That is not a side issue; it is merely rectifying an unconsidered defect of the law which allows a man to get off more lightly if proceedings are taken to the High Court.

I do not know whether the hon. Member was in the Committee at the time, but I have already endeavoured to make it clear that the Bill does give the powers suggested in this proposed new Sub-section (2), which is, in effect, the proposal in the Bill, with a slight alteration in the wording.

I apologise to the Committee. I have only just come down from a Standing Committee from which I could not get away, and this is merely one illustration of the inconvenience of Standing Committees having their sittings at the same time as the House is sitting in Committee or otherwise. I pass from that point, but the other proposed Sub-section in the Amendment are of the same nature. They are specific proposals made by the expert officials of the Inland Revenue to the Royal Commission and supported by the representatives of the Inland Revenue who were members of the Royal Commission and adopted unanimously by the Royal Commission including the representatives of trade interests and of the public. They are specific proposals for stopping gaps which have been found to exist. The Government have been pressed to take these steps on high authority—not merely on the authority of irresponsible members of the Labour party, but on the authority of officials with practical experience—in order to check evasion as to which these officials gave evidence. It was only possible to estimate the amount payment of which is evaded, but some estimated it at £7,000,000 a year and some as high as £15,000,000 a year. That is not a sum which we should allow to go in this way.

With regard to the objection which has been raised by the hon. Member for Watford (Mr. D. Herbert), that the Amendment proposes to transfer the onus of proof from a persecuting Government to an innocent taxpayer, I suggest that is not the case. It is merely the last few words of the proposed Sub-section (4) which gives colour to the hon. Member's statement. The Sub-section states that where a person has delivered any return or declaration which is incorrect, even though he has subsequently delivered a corrected statement, he shall be liable to proceedings for the recovery of any penalty incurred by reason of the original declaration being incorrect. I may explain that, at present, after proceedings have been commenced against the taxpayer for giving an incorrect statement, it is repeatedly the case that the person proceeded against puts in a corrected statement, and gets off in that way. The object of this proposal is to make clear that such a person shall not get off after putting in this tardy corrected statement, but in order that it should not press too heavily upon a man who had in all innocence made a mistake, the Court is given power to stay the proceedings if they are satisfied that a written return was bona fide made in error.

The hon. Member has explained exactly what I attempted to explain. The man who makes a mistake in a. perfectly bona fide manner, has, as a result of making that mistake, thrown upon him the burden of proving his innocence, which is grossly unfair.

It all depends upon the date of the defendant's confession and repentance. There is such a thing known as an Old Bailey confession, but it has never been allowed to get the criminal off when he is in the dock. Of course, a criminal will make a confession and profess repentance then, but the law has always held, that while that may be some evidence of an improvement in his state of mind, it is not an answer to the criminal charge on which he is indicted. This proposal relates to cases of Old Bailey repentance in that sense.

Confession or correction. The proposal refers to an Old Bailey correction—a correction made after proceedings have been commenced, and it is desired that the Old Bailey correction should not operate as a stop to the proceedings. If a bona fide mistake has been made in ignorance it is not proposed under the Amendment that a person should be penalised in such a case. As I say, these are practical suggestions made by practical officials of experience for the purpose of stopping up openings for evasion, and they are recommendations which have been endorsed with the whole weight of the Royal Commission. No alternative steps have been taken to prevent evasion. It is not as though the Government said that there was a better way. They have not discovered a better way, and therefore the remedy suggested by the Inland Revenue officials, and endorsed by the Royal Commission, still holds the field.

I should not have intervened in this Debate—[An HON. MEMBER: "Hear, hear!"]—were it not for the fact that, as a practising solicitor before the Commissioners of Income Tax, I probably speak with more experience of the matter than the hon and gallant Member for Bournemouth (Lieut.-Colonel Croft), who said "Hear, hear."

I did not say "Hear, hear." I have never said "Hear, hear" to the hon. Member.

I think probably one would better appreciate a more offensive observation if it came from the hon. and gallant Member. Regarding this proposal, I wish to point out that if you impose penalties you not only impose those penalties against the person in default, but you impose them in order to deter others from following the example of the defaulter. I have no doubt there is very considerable evasion of Income Tax and Super-tax, and that if the penalties suggested by the Amendment were carried, the result would be—even without any prosecutions or convictions—a very large addition to the coffers of the Inland Revenue. The part of the Amendment in which I am particularly interested is the proposed Sub-section (3), which deals with the case of a director of a company. In placing a penalty upon an official or director of a company, and not on the company, no departure is being made from the general practice of the law in this country. It is true that in many civil transactions companies do shelter directors, and in a great number of cases they exist for no other purpose; but in all cases of crime—and this is a suggested case of fraud—it is already legal for proceedings to be taken, not against a company, but against directors guilty of fraud or crime. I am anxious to support that particular Sub-section.

I join issue with the hon. Member for Watford (Mr. D. Herbert), who, like myself, has the honour and privilege of being a lawyer, on the question of the onus of proof. He suggests that the proposed Sub-section (4) throws upon the defendant the onus of proof by its concluding words. I do not think that is quite so. If by this proposed Sub-section we were going to change the revered practice of the law, which throws the onus of proof on those who allege the crime, I should be with the hon. Member. In this particular case the onus still rests upon the Inland Revenue to prove fraud in a return or statement, but where the onus is transferred to the defendant is where, the defendant is attempting, as I understand, to save himself from the consequences of a return which has already been proved to be fraudulent.

Then it rests on him to show to the Court that a bona fide mistake has been made, but I take it that before that has been done they have to prove that the first return was a fraudulent one.

7.0 P.M.

Might I suggest that the hon. Member for Central Edinburgh (Mr. W. Graham) should not press this Amendment. It is very rarely that the Government is offered more power and higher penalties as against the subject than it really asks for. The Government is responsible for considering very carefully the opinions and conclusions of the Royal Commission. It is responsible for seeing that there is no evasion of tax, and that the penalties are sufficiently high. I really wonder what speech the hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) would have made if I had asked the Committee for more penalties than he had been prepared to give me. Then there would have been denunciations of the Government for asking too much, but it is very rarely that we are denounced for asking too little. I should like to call the attention of the Committee to the speech made by the Prime Minister, when Chancellor of the Exchequer, in introducing his Budget. Perhaps the hon. Member for Central Edinburgh will be satisfied with that. The Chancellor of the Exchequer said:

"I shall not ask Parliament to deal with all the recommendations of the Royal Commission, but I select for this Finance Bill a few of the more important proposals. In doing so, however, I sincerely trust I shall give no ground for any expectation that the remaining recommendations can be regarded as unlikely to find a place on the Statute Book at a future date as opportunity arises."—[OFFICIAL REPORT, 16th April, 1923,; col. 1733, Vol. 162.]

I repeat that. The hon. Member knows that I have not been long at the head of the Inland Revenue Department, and that this is a very complicated question indeed. The Royal Commission's Report is a very lengthy one, and we have selected three things, with which I am sure he agrees, in regard to which we are increasing the penalties. That is a decision which, I think, will do a great deal. The Prime Minister has given that statement, which I repeat, that it is not at all unlikely that, in due course, as we see how our larger penalties work, we shall come to Parliament and ask for the still further powers recommended by the Royal Commission.

The Committee will expect a word from me in reply to the appeal made by the Financial Secretary to the Treasury. I remember quite clearly the statement of the Prime Minister in his Budget speech, but I regret that we cannot withdraw the Amendment, and I will give two very sufficient reasons. In the first place, the Royal Commission made these recommendations in 1920, three years ago. They were unanimous, and they were the recommendations, also, of the Inland Revenue officials. We are dealing only with the part of the Bill referring to penalties, and the right hon. Gentleman does not adopt the whole of the penalties. In the second place, on the lowest possible estimate, we have lost £7,000,000 a year——

No, but for lack of those penalties among other remedies. At a very low estimate, we have lost £20,000,000 in that time, and we might have got a substantial part of that £20,000,000 if the penalties had been inflicted. On the financial ground alone, I think that we are entitled to press this

Amendment to a Division, and I intend to do so.

Question put, "That the words proposed to be left out to the word 'and' ["shall be a sum of twenty pounds and"], stand part of the Clause."

The Committee divided: Ayes, 258; Noes, 174.

Division No. 211.]

AYES.

[7.7 p.m.

Agg-Gardner, Sir James Tynte

Ednam, Viscount

Kennedy, Captain M. S. Nigel

Alexander, E. E. (Leyton, East)

Elliot, Captain Walter E. (Lanark)

King, Captain Henry Douglas

Allen, Lieut.-Col. Sir William James

Ellis, R. G.

Kinloch-Cooke, Sir Clement

Amery, Rt. Hon. Leopold C. M. S.

Erskine, James Malcolm Monteith

Lamb, J. Q.

Archer-Shee, Lieut.-Colonel Martin

Erskine, Lord (Weston-super-Mare)

Leigh, Sir John (Clapham)

Ashley, Lt.-Col. Wilfrid W.

Erskine-Bolst, Captain C.

Lloyd-Greame, Rt. Hon. Sir Philip

Astbury, Lieut.-Com. Frederick W.

Eyres-Monsell, Com. Bolton M.

Locker-Lampson, G. (Wood Green)

Astor, Viscountess

Falcon, Captain Michael

Locker-Lampson, Com. O. (Handsw'th)

Baldwin, Rt. Hon. Stanley

Falle, Major Sir Bertram Godfray

Lorden, John William

Balfour, George (Hampstead)

Fawkes, Major F. H.

Lorimer, H. D.

Banbury, Rt. Hon. Sir Frederick G.

Fermor-Hesketh, Major T.

Lougher, L.

Banks, Mitchell

Flanagan, W. H.

Loyd, Arthur Thomas (Abingdon)

Banner, Sir John S. Harmood-

Ford, Patrick Johnston

Lyle-Samuel, Alexander

Barlow, Rt. Hon. Sir Montague

Forestier-Walker, L.

Lynn, R. J.

Barnett, Major Richard W.

Foxcroft, Captain Charles Talbot

Macnaghten, Hon. Sir Malcolm

Barnston, Major Harry

Fraser, Major Sir Keith

McNeill, Ronald (Kent, Canterbury)

Becker, Harry

Furness, G. J.

Maitland, Sir Arthur D. Steel-

Bellairs, Commander Carlyon W.

Galbraith, J. F. W.

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

Benn, Sir A. S. (Plymouth, Drake)

Ganzoni, sir John

Margesson, H. D. R.

Bennett, Sir T. J. (Sevenoaks)

Gardiner, James

Martin, A. E. (Essex, Romford)

Bentinck, Lord Henry Cavendish-

Garland, C. S.

Mercer, Colonel H.

Bird, Sir W. B. M. (Chichester)

Gates, Percy

Milne, J. S. Wardlaw

Blades, Sir George Rowland

Gilmour, Lt.-Col. Rt. Hon. Sir John

Mitchell, W. F. (Saffron Walden)

Blundell, F. N.

Goff, Sir R. Park

Mitchell, Sir W. Lane (Streatham)

Bowyer, Captain G. E. W.

Gould, James C.

Moore, Major-General Sir Newton J.

Brass, Captain W.

Gray, Harold (Cambridge)

Morden, Col. W. Grant

Brassey, Sir Leonard

Greaves-Lord, Walter

Morrison, Hugh (Wilts, Salisbury)

Bridgeman, Rt. Hon. William Clive

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

Morrison-Bell, Major A. C. (Honiton)

Brittain, Sir Harry

Greenwood, William (Stockport)

Murchison, C. K.

Brown, Major D. C. (Hexham)

Grenfell, Edward C. (City of London)

Nall, Major Joseph

Brown, J. W. (Middlesbrough, E.)

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

Nesbitt, Robert C.

Bruford, R.

Gwynne, Rupert S.

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

Buckingham, Sir H.

Hacking, Captain Douglas H.

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

Buckley, Lieut.-Colonel A.

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

Newson, Sir Percy Wilson

Bull, Rt. Hon. Sir William James

Hall, Rr-Adml Sir W. (Liv'p'l, W. D'by)

Newton, Sir D. G. C. (Cambridge)

Burn, Colonel Sir Charles Rosdew

Halstead, Major D.

Nicholson, Brig-Gen. J. (Westminster)

Butcher, Sir John George

Hannon, Patrick Joseph Henry

Nicholson, William G. (Petersfield)

Butler, H. M. (Leeds, North)

Harrison, F. C.

Nield, Sir Herbert

Butt, Sir Alfred

Harvey, Major S. E

Norman, Major Rt. Hon. Sir Henry

Button, H. S.

Hawke, John Anthony

Norton-Griffiths, Lieut-Col. Sir John

Cadogan, Major Edward

Hay, Major T. W. (Norfolk, South)

Ormsby-Gore, Hon. William

Campion, Lieut.-Colonel W. R.

Henn, Sir Sydney H.

Paget, T. G.

Cautley, Henry Strother

Hennessy, Major J. R. G.

Parker, Owen (Kettering)

Cayzer, Sir C. (Chester, City)

Herbert, Dennis (Hertford, Watford)

Pease, William Edwin

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

Hewett, Sir J. P.

Pennefather, De Fonblanque

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

Hilder, Lieut.-Colonel Frank

Penny, Frederick George

Chamberlain, Rt. Hon. N. (Ladywood)

Hiley, Sir Ernest

Percy, Lord Eustace (Hastings)

Chapman, Sir S.

Hoare, Lt.-Col. Rt. Hon. Sir O. J. C.

Perkins, Colonel E. K.

Churchman, Sir Arthur

Hogg, Rt. Hon. Sir D. (St. Marylebone)

Perring, William George

Clayton, G. C.

Holbrook, Sir Arthur Richard

Peto, Basil E.

Cobb, Sir Cyril

Hood, Sir Joseph

Philipson, Mabel

Cohen, Major J. Brunel

Hopkins, John W. W.

Pilditch, Sir Philip

Colfox, Major Wm. Phillips

Hopkinson, A. (Lancaster, Mossley)

Pollock, Rt. Hon. Sir Ernest Murray

Cope, Major William

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

Pownall, Lieut.-Colonel Assheton

Courthope, Lieut.-Col. George L.

Houfton, John Plowright

Pretyman, Rt. Hon. Ernest G.

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

Howard, Capt. D. (Cumberland, N.)

Privett, F. J.

Craik, Rt. Hon. Sir Henry

Hudson, Capt. A.

Rae, Sir Henry N.

Croft, Lieut.-Colonel Henry Page

Hughes, Collingwood

Raeburn, Sir William H.

Crook, C. W. (East Ham, North)

Hume, G. H.

Ralne, W.

Crooke, J. Smedley (Deritend)

Hurd, Percy A.

Rankin, Captain James Stuart

Curzon, Captain Viscount

Hurst, Lt.-Col. Gerald Berkeley

Rawlinson, Rt. Hon. John Fredk. Peel

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

Hutchison, G. A. C. (Midlothian, N.)

Reid, Capt. A. S. C. (Warrington)

Davidson, Major-General Sir J. H.

Inskip, Sir Thomas Walker H.

Reid, D. D. (County Down)

Davies, Alfred Thomas (Lincoln)

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

Remnant, Sir James

Davies, Thomas (Cirencester)

James, Lieut.-Colonel Hon. Cuthbert

Reynolds, W. G. W.

Dawson, Sir Philip

Jephcott, A. R.

Rhodes, Lieut.-Col. J. P.

Doyle, N. Grattan

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

Richardson, Sir Alex. (Gravesend)

Du Pre, Colonel William Baring

Jones, Henry Haydn (Merioneth)

Richardson, Lt.-Col. Sir P. (Chertsey)

Edmondson, Major A. J.

Joynson-Hicks, Sir William

Roberts, Samuel (Hereford, Hereford)

Robertson-Despencer, Major (Isl'gt'n W)

Spears, Brig.-Gen. E. L.

Ward, Col. L. (Kingston-upon-Hull)

Rothschild, Lionel de

Spender-Clay, Lieut.-Colonel H. H.

Watson, Capt. J. (Stockton-on-Tees)

Roundell, Colonel R. F.

Steel, Major S. Strang

Watts, Dr. T. (Man., Withington)

Ruggles-Brise, Major E.

Stewart, Gershom (Wirral)

Wells, S. R.

Russell, Alexander West- (Tynemouth)

Stockton, Sir Edwin Forsyth

Weston, Colonel John Wakefield

Russell, William (Bolton)

Stott, Lt.-Col. W. H.

Wheler, Col. Granville C. H.

Russell-Wells, Sir Sydney

Stuart, Lord C. Crichton-

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

Samuel, A. M. (Surrey, Farnham)

Sueter, Rear-Admiral Murray Fraser

Wise, Frederick

Sanders, Rt. Hon. Sir Robert A.

Sugden, Sir Wilfred H.

Wolmer, Viscount

Sanderson, Sir Frank B.

Sutherland, Rt. Hon. Sir William

Wood, Rt. Hn. Edward F. L. (Ripon)

Sandon, Lord

Sykes, Major-Gen. Sir Frederick H.

Wood, Major Sir S. Hill- (High Peak)

Sassoon, Sir Philip Albert Gustave D.

Terrell, Captain R. (Oxford, Henley)

Woodcock, Colonel H. C.

Scott, Sir Leslie (Liverp'l, Exchange)

Thompson, Luke (Sunderland)

Worthington-Evans, Rt. Hon. Sir L.

Shepperson, E. W.

Thomson, F. C. (Aberdeen, South)

Yate, Colonel Sir Charles Edward

Simpson-Hinchcliffe, W. A.

Thorpe, Captain John Henry

Yerburgh, R. D. T.

Skelton, A. N.

Titchfield, Marquess of

Somerville, A. A. (Windsor)

Tubbs, S. W.

TELLERS FOR THE AYES. —Colonel Leslie Wilson and Colonel Gibbs.—Colonel Leslie Wilson and Colonel Gibbs.

Somerville, Daniel (Barrow-in-Furn'ss)

Turton, Edmund Russborough

NOES.

Adams, D.

Hall, F. (York, W. R., Normanton)

Murray, R. (Renfrew, Western)

Adamson, Rt. Hon. William

Hall, G. H. (Merthyr Tydvil)

Nichol, Robert

Adkins, Sir William Ryland Dent

Hamilton, Sir R. (Orkney & Shetland)

Oliver, George Harold

Alexander, A. V. (Sheffield, Hillsbro')

Harbord, Arthur

Paling, W.

Ammon, Charles George

Hardie, George D.

Parker, H. (Hanley)

Attlee, C. R.

Harris, Percy A.

Parkinson, John Allen (Wigan)

Barker, G. (Monmouth, Abertillery)

Hay, Captain J. P. (Cathcart)

Parry, Lieut.-Colonel Thomas Henry

Barrie, Sir Charles Coupar (Banff)

Hayday, Arthur

Pattinson, S. (Horncastle)

Batey, Joseph

Hayes, John Henry (Edge Hill)

Phillipps, Vivian

Benn, Captain Wedgwood (Leith)

Hemmerde, E. G.

Ponsonby, Arthur

Bonwick, A.

Henderson, Rt. Hon. A. (N'castle, E.)

Potts, John S.

Bowerman, Rt. Hon. Charles W.

Henderson, T. (Glasgow)

Pringle, W. M. R.

Briant, Frank

Herriotts, J.

Rees, Sir Beddoe

Bromfield, William

Hillary, A. E.

Richards, R.

Brotherton, J.

Hirst, G. H.

Ritson, J.

Brown, James (Ayr and Bute)

Hodge, Rt. Hon. John

Robinson, W. C. (York, Elland)

Buchanan, G.

Hodge, Lieut.-Col. J. P. (Preston)

Royce, William Stapleton

Buckle, J.

Hogge, James Myles

Saklatvala, S.

Burgess, S.

Hutchison, Sir R. (Kirkcaldy)

Salter, Dr. A.

Burnie, Major J. (Bootle)

Irving, Dan

Scrymgeour, E.

Buxton, Charles (Accrington)

Jarrett, G. W. S.

Sexton, James

Buxton, Noel (Norfolk, North)

Jenkins, W. (Glamorgan, Neath)

Shaw, Thomas (Preston)

Chapple, W. A.

John, William (Rhondda, West)

Shinwell, Emanuel

Charleton, H. C.

Johnston, Thomas (Stirling)

Simon, Rt. Hon. Sir John

Clarke, Sir E. C.

Johnstone, Harcourt (Willesden, East)

Sinclair, Sir A.

Clynes, Rt. Hon. John R.

Jones, J. J. (West Ham, Silvertown)

Smith, T. (Pontefract)

Collins, Sir Godfrey (Greenock)

Jones, Morgan (Caerphilly)

Snell, Harry

Cowan, D. M. (Scottish Universities)

Jones, R. T. (Carnarvon)

Snowden, Philip

Darbishire, C. W.

Jones, T. I. Mardy (Pontypridd)

Spencer, George A. (Broxtowe)

Davies, Evan (Ebbw Vale)

Jowett, F. W. (Bradford, East)

Stewart, J. (St. Rollox)

Davies, Rhys John (Westhoughton)

Jowitt, W. A. (The Hartlepools)

Strauss, Edward Anthony

Dudgeon, Major C. R.

Kenworthy, Lieut.-Commander J. M.

Sturrock, J. Leng

Duffy, T. Gavan

Kenyon, Barnet

Sullivan, J.

Duncan, C.

Kirkwood, D.

Thomas, Sir Robert John (Anglesey)

Dunnico, H.

Lambert, Rt. Hon. George

Thomson, T. (Middlesbrough, West)

Ede, James Chuter

Lansbury, George

Thorne, W. (West Ham, Plaistow)

Edge, Captain Sir William

Lawson, John James

Thornton, M.

Edmonds, G.

Leach, W.

Tout, W. J.

Edwards, C. (Monmouth, Bedwellty)

Lee, F.

Trevelyan, C. P.

Emlyn-Jones, J. E. (Dorset, N.)

Lees-Smith, H. B. (Keighley)

Turner, Ben

Entwistle, Major C. F.

Linfield, F. C.

Wallhead, Richard C.

Evans, Ernest (Cardigan)

MacDonald, J. R. (Aberavon)

Watson, W. M. (Dunfermline)

Fairbairn, R. R.

M'Entee, V. L.

Watts-Morgan, Lt.-Col. D. (Rhondda)

Falconer, J.

McLaren, Andrew

Webb, Sidney

Fildes, Henry

Maclean, Neil (Glasgow, Govan)

Wedgwood, Colonel Josiah C.

Foot, Isaac

Macnamara, Rt. Hon. Dr. T. J.

Weir, L. M.

George, Major G. L. (Pembroke)

Macpherson, Rt. Hon. James I.

Welsh, J. C.

Gilbert, James Daniel

March, S.

Wheatley, J.

Gosling, Harry

Marks, Sir George Croydon

White, Charles F. (Derby, Western)

Graham, D. M. (Lanark, Hamilton)

Marshall, Sir Arthur H.

Whiteley, W.

Graham, W. (Edinburgh, Central)

Martin, F. (Aberd'n & Kinc'dine, E.)

Williams, Dr. J. H. (Llanelly)

Gray, Frank (Oxford)

Maxton, James

Williams, T. (York, Don Valley)

Greenall, T.

Middleton, G.

Wilson, R. J. (Jarrow)

Greenwood, A. (Nelson and Colne)

Millar, J. D.

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

Grenfell, D. R. (Glamorgan)

Morel, E. D.

Wright, W.

Griffiths, T. (Monmouth, Pontypool)

Morrison, R. C. (Tottenham, N.)

Young, Robert (Lancaster, Newton)

Groves, T.

Muir, John W.

Grundy, T. W.

Murnin, H.

TELLERS FOR THE NOES. —Mr. Lunn and Mr. J. Robertson.—Mr. Lunn and Mr. J. Robertson.

Guthrie, Thomas Maule

Murray, John (Leeds, West)

I beg to move, in Sub-section (2), to leave out the word "treble," and to insert instead thereof the word "double."

I wish to draw attention to the effect of this word "treble" and to ask the Solicitor-General a question as to interpretation. I read the Clause to mean that the penalty is to be treble the tax which a person ought to be charged, and not merely treble the tax on the under-statement. Then I would like to ask another question in regard to the penalties in this Clause. If a firm has an income of £30,000 a year, and if by error, I will not say fraud, the firm returns its income at £25,000, the penalty is £20 and treble the tax on £30,000, let us say, at 11s. in the £. Therefore, the penalty amounts altogether to £49,000 or more, on an erroneous under-statement of income amounting to £5,000. I think that is a great deal too high. What does the Committee think? I am not of course supporting any evasion of taxation, but if a firm, by some error of judgment or some wrongful opinion, understates its income by £5,000, this Clause makes provision for a fine of £49,000 or of £56,020 if it is treble the tax and not merely treble the tax on the under-statement. What would be the result of such a fine? What firm is likely to be able to withstand such a fine and to carry on business afterwards? You not only punish the firm or the man by a monetary fine, but you may put him into gaol and break his firm up and throw a business into chaos. If the Government do not mean to do that, I maintain that this penalty is too heavy and ought to be reduced. I therefore suggest the word "double" instead of "treble."

The Clause is intended to remove an existing discrepancy between penalties recoverable when proceedings are taken in court, as contrasted with the penalties recoverable if they are taken before the General Commissioners. Section 107 of the existing Act provides that in proceedings before the General Commissioners the penalty shall be a sum not exceeding £20 and treble the tax, but if proceedings are taken in court the subject shall only forfeit £50. The Royal Commission on Income Tax recommended that the penalties should be assimilated, and this proposal in Sub-section (2) is to assimilate the penalties whether proceedings are taken before the General Commissioners or in court. There is another reason for making the penalty £20 and treble the amount of the tax, namely, that by another Section of the Income Tax Act the penalty for making a false claim for any reduction or allowance is £20 and treble the amount of the tax. The effect, therefore, of this Sub-section will be to bring all cases into line, and I think my hon. Friend the Member for Farnham (Mr. A. M. Samuel) will probably agree that that is desirable. He asked me whether the Section means what it says. The Section says that the penalty shall be a sum of £20 and treble the amount of the tax with which the offender ought to be charged, and I think those words are reasonably clear.

Does it give any credit for the amount of tax already paid? It seems unfair that if a man paid tax on £25,000 and he ought to have paid on £30,000, he should get no credit for the tax paid on £25,000 at all.

The penalty is £20 and treble the amount of the tax with which he ought to be charged.

I would point out that after all the Clause is only permissive in character, because it says, "The amount of the penalty which may be recovered," and so on. I should think it quite reasonable that discretion should be exercised, and if the hon. Member opposite would review the prosecutions in recent years, he would agree that they have obviously continued a very long time before being caught.

I think what the Solicitor-General has said has gone some way towards satisfying me, and I ask leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

I now beg to move, at the end of the Clause, to add a new Sub-section——

"(4) Any tribunal before which any proceedings of whatsoever nature shall be brought for the recovery of any fine, penalty, or forfeiture under the Income Tax Acts, in connection with or in relation to Income Tax (including Super-tax), shall have full power to impose, assess, or give judgment for such part only of the fine, penalty, or forfeiture as it shall think proper."

This is merely to give discretion to the tribunal to fix the penalty up to the maximum. I do not object to the maximum being inflicted where necessary, but, as I read the law now, it appears that in all cases the tribunal must inflict the maximum penalty. It is true it can be mitigated by the Board of Inland Revenue under the Act of 1918, but I think that power should be left in the hands of the tribunal. That power is contained in Section 222 of the Income Tax Act, 1918.

With all respect to the hon. Member for Farnham (Mr. A. M. Samuel), I think this Amendment is unnecessary. Section 222 of the Income Tax Act gives ample powers to the Commissioners to mitigate any fine or penalty, and I am sure it is the experience of anybody who knows the way in which the Commissioners deal with these cases that, in any case where there is the least doubt whether there has been any intentional fraud, nothing like the full penalty is exacted. I hope the hon. Member will not press his Amendment.

Amendment, by leave, withdrawn.

Clause ordered to stand part of the Bill.

CLAUSE 15.—(Time within which assessments may be amended, additional assessments made, etc.)

"(1) An assessment, an additional first assessment or a surcharge in respect of Income Tax chargeable for the year 1920–21 or any subsequent year of assessment may be amended or made, as the case may be, at any time not later than six years after the end of the year to which the assessment relates or the year for which the person liable to Income Tax ought to have been charged.

(2) The time during which an assessment to Super-tax may be amended, or an assessment or additional assessment to Super-tax made, shall, in the case of assessments in repect of Super-tax chargeable for the year 1920–21 or any subsequent year of assessment, be extended so as to include any time within six years after the end of the year of assessment.

I beg to move, at the end of the Clause, to add the words

"Provided that nothing in this Section shall extend the time for making any assessment or surcharge or bringing any proceeding or claim on or against any executor or administrator of a deceased person or to make the estate of the deceased liable of or for any Income Tax or Super-tax in respect of any profits or gains of the deceased person which arose or accrued during the life of the deceased."

It will add a fresh terror to the sorrows at the death of a friend if, after a man dies, his executors must keep his accounts open for a period of six years for tax claims, and I do ask the Solicitor-General to allow us some amelioration in this matter, so far as executors, trustees, and even liquidators of companies are concerned, so that we can get our duties cleared up without it being necessary to hang them up for six years.

The principle of this Amendment is, I think, reasonable, and I am prepared, if the hon. Member will not press it in its present form, to see that some similar Amendment is put down on the Report stage embodying this proposal.

I am much obliged to the hon. and learned Gentleman, and I will ask leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Clause ordered to stand part of the Bill.

CLAUSE 16.—(Time within which claims for repayment may be made.)

(1) Section forty-one of the Income Tax Act, 1918, and Rule 5 of No. V of Schedule A (which fix the period within which certain claims for repayment of Income Tax may be made) shall, so far as relates to claims for repayment in respect of Income Tax charged for the year 1920–21 or for any subsequent year of assessment, have effect as though a period of six years after the expiration of the year of assessment were substituted for a period of three years after the expiration of the year of assessment.

(2) Section twenty-five of the Income Tax Act, 1918 (which grants relief from tax in respect of income accumulated under trusts), shall, in the case of such a contingency as is referred to in that Section happening in the year 1920–21 or in any subsequent year of assessment, have effect as though a period of six years after the end of the year of assessment in which the contingency happens were substituted for a period of three years after the end of the year of assessment in which the contingency happens.

(3) Any provision of the Income Tax Acts which authorises a claim for repayment of Income Tax to be made at the end of any year of assessment or within a specified period of less than one year after the end of any year of assessment shall be amended so as to authorise the making of the claim within a period of one year after the end of the year of assessment.

I beg to move, at the end of the Clause, to add the words

"Provided that in cases where Income Tax has been paid upon the amount of income assessed and it has subsequently been ascertained that the amount paid was excessive power is hereby given to the General and Special Commissioners of Income Tax to review such cases if appeal is lodged within three years following the year of assessment."

The object of this Amendment is not to gain any benefit at all of a financial character from the Exchequer, and if the Financial Secretary to the Treasury had been in his place I think I should have had the pleasure of seeing the smile of relief which would come over his face, that we are not asking for money. All I am asking for is what I think all hon. Members will agree is a matter of justice to the Income Tax payer, because the Amendment is moved for the purpose of allowing the Income Tax payers, if a bona fide mistake is made in a return of Income Tax or in an assessment made upon them, to appeal to the Commissioners who may be given power to re-open the assessment within three years following the year of assessment. At present the law is that a taxpayer must make his appeal against any assessment within 21 days, and it frequently happens that after that period of time mistakes are discovered. I do not suggest for a moment that many of the mistakes are not put right by negotiation with the surveyors of taxes, but I have evidence to show that in a large number of cases inspectors of taxes take advantage of the present condition of the law and refuse to re-open the assessment made upon the taxpayer, with the result that very many thousands of pounds are paid in excess of what the taxpayer ought to pay. That, I think the Committee will agree, is thoroughly wrong, and therefore I ask them to support my Amendment. I have here a letter which is typical of many letters received by the Income Tax Payers Society, with which I am associated, and I should like to read a few lines of it. It is dated 25th May of this year, and reads:

"For the three years ending 5th April, 1922, I paid Income Tax in excess of the amount due from me. I was unaware at the time that I was entitled to be assessed on a three years' average. In this way I have paid nearly £50 over and above what is really due from me. I first found out the correct procedure prior to 6th April last year, and immediately employed a solicitor to reclaim the excess I had paid. The local inspector of taxes, and also the Board of Inland Revenue, refused to make any repayment to me."

I quote that letter as an example of a great deal more evidence that I could bring to the notice of the Committee to the same effect. I do not wish to make any attack on the inspectors of taxes. I have had a great many dealings with a large number of them, and I have found them honourable and humane-dealing men, but there are cases where advantage is taken of the strict letter of the law, and where the inspectors, and even Somerset House itself, as this letter shows, refuse to re-open these questions. I am asking for only three years' extension of time, not an extension of time for appealing at all, but simply an extension of time during which a mistake may be found out and put right. Although the Crown is taking six years' extension for correcting any wrong assessment in favour of the Crown, I am asking only for three years' extension. I do not think that that is an excessive demand, and yet I feel that anything less than three years would not be satisfactory. I will content myself by saying, in conclusion, that when I put down this Amendment on the Paper I had no idea that the matter had been brought before the notice of the Royal Commission to which reference has been made, but I see that when this matter was brought before the Royal Commission they reported:

"There may, however, be cases where the omission to give notice of appeal has arisen from a sufficient cause, and we recommend that although the present time should be retained the Appeal Commissioners should have the power to hear an appeal in exceptional cases where they are satisfied that the reason given for the omission of lodging notice in due time is a valid one."

In other words, the Royal Commission has reported in almost the identical terms of my Amendment.

I have another Amendment on the Paper somewhat rather wider in scope than that of the hon. Member for Guildford (Sir H. Buckingham). Therefore I should like to say a word on the matter, though I do not at the moment propose to elaborate the argument, which has been put much better by him than I could put it. I have, however, a letter in my hand from a well-known accountant in the City of London which states the case as well as I think it could be stated. The letter says:

"One of our clients made a return of Income Tax in connection with a business, which is a limited liability company, and of which he was managing director. He inserted in the return the full amount of last year's profits instead of the average for the three years. An assessment on that amount was made and the error was not discovered till some time afterwards when the books were being audited. The accountants thereupon drew the attention of the Inland Revenue authorities to the circumstances and they stated that in default of an appeal at the proper time the Board had no power to interfere in the matter or to make repayment of any portion of the duty charged. The accountants protested against the Inland Revenue taking advantage of a mistake of this nature, and the reply of the Inland Revenue authorities was that the Income Tax Acts expressly provided that failing an appeal against an assessment at the proper time no appeal could afterwards be entertained."

It appears to me, and I should think it will to the Committee, that taxpayers in that position ought to have reasonable fair play, and the Financial Secretary, I am sure, does not regard such a case as I have quoted as fair play. If the Government can take the six years for which they have asked and that is considered justice on their side, then there must be given justice to the taxpayer. The Government are not giving justice in cases of this kind by shutting out an appeal because it was not lodged within 21 days. I do not ask for any alteration of the fiscal law, but I ask for consideration for the public on much broader and better grounds, I think, than those already given. I quoted one case. I could quote another case that has come to me from the ancient City of Norwich. If the Government does not meet us in this grievance, I shall feel very much disappointed, not as a politician, not even as a taxpayer, but as one who feels that a grave act of injustice is countenanced by the Treasury in administering the taxation laws.

I hope the Financial Secretary will listen to the most reasonable Members who have made the most reasonable speeches from the other side, and it must be remembered they are supporters of the Government. The Income Tax has never been a popular tax. On the other hand it is the fairest way of raising revenue, because of its direct incidence, and it is levied according to ability to pay. Nothing could be more fatal to the collection of revenue than the idea that there was not fairness given, or that there are many cases of injustice of the sort referred to. Hence I would venture to suggest that this particular Amendment is worthy of acceptance, and when I do so I do it not so much from the standpoint of the higher and more wealthy payers of Income Tax; the large payers can employ accountants and get expert knowledge to help them in their difficulties, but there are many small payers of Income Tax who do not understand all the intricacies and complications of the papers that are sent out to be filled up. Hon. Members of this House have had to go through that long yellow paper asking for full details and particulars, and exemptions and Regulations, and all the rest of it, and know the trouble it is. But what must it be to a small trader—as has happened on many occasions—an honest man desirous to follow out the law, and in doing so has overstated his income, and, therefore, subjected himself to a larger tax than he was liable to. I suggest that this reform should be put into force at once. The Financial Secretary has a duty to the taxpayer. He is asking for a longer period for to deal with a man who has understated his income; why, then, where he has overstated his income should he not have this three years period so that the mistake when discovered can be rectified? Sometimes in their over-zeal, in order to pay their just share, citizens suffer by putting in a larger amount than they should.

In supporting the Amendment I have in mind that perhaps the power of the Inland Revenue authorities is not quite sufficient, and that while an extension of time might be made with advantage it seems desirable that the Inland Revenue authorities should have a little wider power in order to deal with hard cases. A taxpayer ought to have the right to recovery in respect of actual overpayment. Under the circumstances it does look as if a wider power might be allowed to the Inland Revenue authorities and I very much hope the Solicitor-General will see his way to accept the Amendment.

I would also put in a word in support of this Amendment, and certainly ask that it might be very carefully considered by the Government. I am not quite sure that the exact wording is precisely what I should myself have suggested, but it is a difficult point. The trouble is a trouble which has existed in the past, and the only remedy of the taxpayer has been his legal remedy—that is the right to appeal against the assessment within 21 days. The Government have had three years within which they can make a new assessment, or an additional assessment, and in which they can re-open the case. In spite of what has been said as to the number of cases in which the inspectors of the Inland Revenue Department have stated that they have no power to do otherwise than to carry out the law as it stands, it must be well known to many hon. Members of the House that they have dealt administratively with cases over and over again. The present is an unsatisfactory state of affairs. It becomes more unsatisfactory when the Government is taking six years, instead of three, in which they can re-open these cases. In view of the Government taking this extra time there is the extra reason that the taxpayer should be given this right to re-open a case—that is, a proper case. I would ask the Financial Secretary to consider this, and if he is not satisfied with the Amendment to see if he cannot, before the Report stage, provide some Clause which will give the taxpayer a remedy, so long as the Government has the right to keep the matter open for six years.

in my own experience, what we are complaining about has occurred over and over again. A man, say, carries on a profession or a business, perhaps as a partner in a firm of merchants. He is asked to make a return of profits for the Income Tax authorities. He does so from the office of the company, but he is a, director of two or three other concerns. The separate concerns are in different districts, with different inspectors of taxes in all these different places in which the offices of the company are of which he happens to be a director. Over and over again there have been cases where he is taxed on his directors' fees in one district and the tax is collected by the inspector, and the tax on his director's fees in another district collected by another collector. Then two or three years afterwards, when calculating his income, he puts them into his main return, momentarily forgetful of the fact of the outside offices, with the result that he pays taxes on his director's fees twice over. That has happened over some years, and I ask when that mistake is discovered that it should not merely be able to be dealt with administratively but that it should be the law, and that a taxpayer, having made that overpayment, should be entitled to have the matter re-opened, and his assessment for tax under those circumstances reduced.

It is quite obvious that this question is one which should engage the sympathies of every taxpayer. From time to time we are all familiar with cases where taxpayers, if not ourselves, at any rate in our circle of friends or relatives, make payments, perhaps, more than the law ought to have exacted; this in consequence of some slip of memory or some failure to appreciate the reading of the very difficult forms which we have to fill up. The hon. Members who have spoken on this matter have only given cases similar to those from my own experience, and are merely saying, I suppose, what every hon. Member of this House can say from his own experience. There is a great deal in what the hon. Member for Watford (Mr. D. Herbert) has said as to the language of this particular Amendment. I am not quite sure really whether the words come in at all fitly in this particular place. For the proviso deals with a class of cases which are familiar probably to a great many Members. It is a proviso, as it stands in the Bill, which carries out the recommendation of the Royal Commission on Income Tax, that in the interests of simplicity and uniformity the time limit in those particular cases where it is less than one year should be extended to make it a uniform year. Those are cases as, for instance, where relief is given to the farmers whose profits in the year actually fall short of what they were assessed to be in anticipation.

Another case provided for is where relief is given to new concerns whose profits fall short in the actual year of the assessment. The third is where relief is given in the case of the cessation of a business or death or bankruptcy. All those are cases where a new fact comes to life subsequent to the assessment. Sub-section (3) deals with those cases, and they are cases in which the period within which a claim may be made is less than one year. The proposal in the Bill is to extend the time so as to give the taxpayer in all such cases one full year within which to make his claim for repayment. Probably this is sufficient because the facts upon which he becomes entitled to repayment are facts which come to his knowledge within the year when the death occurs or the cessation of the business takes place. In all such cases the new fact which was not in existence at the time of the assessment comes to the knowledge of the taxpayer within the year, and he is given a full year in which to make his claim for repayment. Upon that proposal the Mover of this Amendment proposes to make it possible that in all cases where Income Tax has been paid, and it is ascertained that the amount paid is excessive, power is to be given to re-open the case within three years. There are two classes of cases which the very wide terms of this Amendment cover. There is the case where an excessive amount has been paid in consequence of a misunderstanding of the law. In such cases it is possible that the taxpayer has, in fact, paid no more than he really ought to have paid on the amount of income which be has received, but by some flaw in the law of which he was not aware until a decision was given in the Court he finds that he need not have paid it.

I am only pointing out to the Committee a class of case. They may be cases which are absolutely devoid of merit. There was such a case which went to the Court of Appeal during the War in 1917, where a decision was given upon a particular case which involved not only a re-assessment involving a sum of £7,000,000 in the assessments which were still open, but if the proposal of the hon. Member to-day had been the law then it would have involved the re-opening of assessments upon which payment had actually been made to the extent of £4,000,000. In all these cases none of the taxpayers had really paid more than they ought to have paid because they had paid Income Tax on the incomes they had received, but they would have been entitled to a return of their tax to the extent of £4,000,000 in spite of the fact that the Court pointed out that the technicality upon which the case had succeeded was entirely devoid of merit.

I think hon. Members will appreciate how seriously that might act upon the Budget and how difficult it would be to frame the Budget if inroads upon the Revenue are capable of being made for so long a time and to such a great extent. Hon. Members may ask what about the cases where persons have paid because they have failed to appreciate their genuine rights, or have paid more than the law required them to pay, and paid more tax than they ought to have paid, having regard to what their income really was. Those are cases which I am sure we all desire to meet, and I think that is the class of case which hon. Members who have supported this Amendment have in mind.

Let me try to deal with such a case. It is quite an old question which has arisen ever since the Income Tax has operated, and especially from the happy days when it used to be a few pence to the days when it amounts to a few shillings, it has engaged the attention of the Board of Inland Revenue and the Treasury. My non. Friend's Amendment is drawn in very wide terms. It probably would not effect the purpose intended or it might even do more than it intended. The existing practice is—it is a very old one and has no warrant in any Statutory Provision—that in any genuine case where any taxpayer has paid Income Tax upon more income than he has in fact received, then in such cases the Board of Inland Revenue return the sum paid. In the case quoted by my hon. Friend the Member for Farnham (Mr. A. M. Samuel) the Board of Inland Revenue, in accordance with their longstanding practice, would return the overplus in excess of the amount due, and if my hon. Friend will furnish the Financial Secretary with the facts of the case, I can give an undertaking that he will consider the matter and, assuming the facts are as stated, the amount in such a case would be repaid.

The case was put before me by a recent President of the London Chamber of Commerce.

Will the Solicitor-General give the same undertaking in regard to a number of cases which I can furnish.

Although I have invited the hon. Member for Farnham to supply the facts to the Financial Secretary, I cannot extend the same invitation to everybody. [HON. MEMBERS: "Why?"] If I do, we may be snowed under. The application should be made in the first place to the Board of Inland Revenue in the ordinary way, and if the case is not met in accordance with the practice which I have described, then it will be quite time to trouble my right hon. Friend with the fact. It does not come within my right hon. Friend's duties as Secretary to the Treasury to do work which really belongs to the Inland Revenue.

Will the Financial Secretary undertake to deal with the one particular case which I have dealt with in which my correspondent says that the local inspector of taxes and also the Board of Inland Revenue refuse to make any repayment. May I send him that letter?

The hon. Member may send any letter he pleases. The Financial Secretary says that if he will send that particular case, having regard to the statement which he makes that the Board of Inland Revenue has refused repayment, he will look into it and see if the case is one which ought to be met in accordance with the practice I have described. Hon. Members may say that it is not satisfactory that the Board of Inland Revenue should be left to decide these cases. But what is the alternative. One is that you should transfer this duty of the Inland Revenue Board to the Commissioners throughout the country. There are some 700 of those bodies. Surely hon. Members do not think it is desirable that a discretion of this sort should be given to this very large number of persons, which would probably be exercised on different principles in different districts, and would lead to a tremendous number of complaints, because Commissioner A had not acted on the same principle as Commissioner B.

That is my opinion, and I think it will be the opinion of hon. Members that it is not advisable to transfer this duty from the Board of Inland Revenue to the Commissioners. It has been argued that there ought to be in this proviso some more precise rule as to the principle upon which the discretion should be exercised. [HON. MEMBERS: "Hear, hear!"] My hon. Friends who applaud that proposal, if they had to sit down and try to draft such a proposal, would find the alternative either in Scylla or Charybdis. I am afraid the Amendment would not meet the case of a great number of persons whom the Board of Inland Revenue are not able to satisfy. The rule will be so elastic that it comes back to the existing practice that the Board of Inland Revenue have already authority to make repayments in genuine cases where people have paid tax upon a larger income than they have in fact received. I hope when hon. Members appreciate what I have stated as to the practice of the Board of Inland Revenue—it is possible cases may arise where a full appreciation of some claim to repayment has not perhaps reached the Board—it will be seen that this Amendment is applicable to such cases and it is unnecessary in those particular cases.

I agree that the proposed proviso goes too far, and I think the better course would be to have an amendment of the Clause under consideration which does give a further period beyond the original period laid down in the existing law. I think that is the point where some amendment should be made. I will give one reason why I hope the Financial Secretary will undertake to look into this matter again before the Report stage, and possibly give something like satisfaction to those who fully appreciate the difficulties in which the Inland Revenue Board are placed. None of us want to embarrass the Inland Revenue. We all know their difficulties, and we are not going to trouble to find it either in Scylla or Charybdis. We have to remember that the complications of the tax are tremendous. A great number of people do make mistakes. I will give the right hon. Gentleman a case. Nowadays we pay Super-tax upon the income of the past year, and for the purpose of returning income, or professional earnings, the income stated in the previous year's return is taken as the basis of the Super-tax to be paid in the existing year of the assessment.

8.0. P.M.

In a case within my own knowledge it was not until the question of Super-tax came up that the question of a mistake that took place previously in a return of Income Tax was realised. My right hon. Friend the Financial Secretary to the Treasury may say that the present alteration of the Clause which gives a year from the time of assessment is sufficient time. I am not sure that it is, and for my own part while I do not wish in the least to embarrass the right hon. Gentleman, I should be very glad before we pass from this Amendment if he would give, not a specific undertaking nor even a Parliamentary undertaking, but would indicate his sympathy with an Amendment which might be put down to give effect to what is desired. I think the proposed Amendment is not apt, but I also think some amendment is necessary. The late Financial Secretary to the Treasury, speaking with all his experience and knowledge, indicated to the Committee that in his view something of a greater indulgence was necessary. I do know, and I can confirm it, if it were necessary, that repayments are made as the Solicitor-General has said. I am not quite certain that this is sufficient to allay the feelings which exist, and which has been confirmed by a number of cases my hon. Friends have brought forward. What would do a great deal to make Income Tax more cheerfully paid would be if people could have a solid appreciation and knowledge that they had a right, not merely a claim to some indulgence but a right, and it is for that reason I think some amendment should be made in this Clause. I hope the Financial Secretary will extend the large sympathy he possesses and give a benevolent reconsideration to this matter on Report.

In my view this is a very essential Amendment. The Inland Revenue should have a limit placed on its powers. If we in Committee are going to give the servants of the Board of Inland Revenue power to reopen these things within a period of six years it ought not to be a matter of good will or of mere whim on the part of these people whether taxpayers are to have a corresponding right in case they have made a mistake and overpaid the Government. I know a case where a cashier made considerable defalcations which resulted in a return being sent to the Inland Revenue giving an indication of a greatly inflated income, and in his case this claim was turned down because the period for appeal had gone by. I think the Government would strengthen their position enormously if they took the attitude that, if they demand the right to reopen in the case of people who have underpaid after six years, in common fairness they should give at least three years in the case of people who have overpaid. The Solicitor-General gave, in my opinion, no reason at all why this thing should not be stated definitely, and placed outside the caprice of officials. It should be the law of the land, laid down by this House, that this thing shall be done, and unless the Financial Secretary can see his way to promise that this matter will be dealt with I hope the Amendment will be pressed.

I would like to raise my voice to appeal to the right hon. Gentleman the Financial Secretary to the Treasury to put a Clause into the Finance Bill to give effect to this Amendment. If there was a Clause inserted that people could refer to, they will be able to know their position absolutely when they go before the inspectors of taxes. A great many of them are rather afraid of the inspector of taxes. In many cases the inspectors say that the applicants have been too late because the 21 days have passed, and they can do nothing for them. In some cases these people never get as far as the inspectors. They do not get beyond the outer office. There is one point in regard to the Solicitor-General's speech which I hope will be reconsidered, that is the reference he made to changes owing to decisions in the law courts. There was a case which must be within the knowledge of the Solicitor-General that was taken to the House of Lords with regard to Super-tax on bonus shares. That case was decided against the Inland Revenue, but before that case became known there were many people who received these bonus shares and made a return in their Super-tax. They paid under a mistake of law which was afterwards found to be a mistake of law, and it would be very unjust if they, through ignorance or lack of fighting capacity who paid quietly at the beginning are not entitled to get it back again, while other people who fought the Inland Revenue do not have to pay. I hope a mistake of law will not be allowed to rule out these people's claims, and I hope something will be put into the Bill to deal with this question.

The Solicitor-General has warned us of the perils of Scylla and Charybdis, but I would like to remind him, as one old navigator speaking to another navigator, that you can never get through a strait unless you try to get through it. If you are awed by the rocks on either side you will never get through at all. I think this proposal has been misunderstood on the Treasury Bench. The right hon. Gentleman who spoke from the Treasury Bench led the Committee to suppose that, if an Amendment like this were accepted, immediately pressure would be put on the Inland Revenue by some lucky people owing to some flaw in the law, or something of that kind. This Amendment, however, I would point out, only gives a right of appeal. It says that provided It is not altogther just to say that, because people may attempt to get back money by sharp practice, you should rule out from this concession a great body of people who do not want to take advantage of any flaws in the law. I do not think it is quite fair to refuse to legislate because there are certain people who are unscrupulous, when by so doing you create a feeling of injustice amongst large bodies of taxpayers. We have heard from the right hon. Gentleman about the retrospective effects of this Amendment, but we are legislating for the future. We want to prevent any feeling of injustice in the future, and we want to give this right of appeal. When the right hon. Gentleman tells us that, as this Amendment is drawn, we should have a right of appeal to the Commissioners, and that the practice of the Commissioners may vary in different areas of the country, I would remind him that exactly the same thing applies to something of an analogous matter—namely, appeals to Pensions Appeal Boards. They vary in different parts of the country and this is a sort of thing we cannot help as long as human nature is uncertain and irregular. At any rate, this appeal to a body of such officials would be of very great value.

Further, is it realised that under the present law the great corporations and wealthy men at the head of affairs, and so on, employ skilled accountants and skilled lawyers and other legal aid, and that probably they do not suffer as women, widows, and so on, and the small business men do who cannot afford to employ lawyers and accountants? These people deserve the fullest protection of the law, and when the right hon. Gentleman suggests that hon. Members of this House should send to him these particular hard cases he opens up vistas of all sorts of aggrieved taxpayers writing to Members of Parliament just as we have aggrieved pensioners writing to us. The present and the last Government, I am bound to say, always paid great attention to these cases, but it is not right that because a Member is jealous of the rights of his constituents, and the Government naturally wishes to pay attention to a Member of this House, that this should have to be done. It would be much better, as proposed in this Amendment, that the right of appeal should be made statutory for three years. I do hope we will insist on getting something more definite than we have at the present time. The right hon. Gentlemen on the Front Bench are sympathetic, but I think they want a little help on the part of the Committee. If this Amendment is not regarded as suitable, I hope that other words will be found that will be suitable.

It is rather difficult for me not to accede to the appeal which has come from all quarters of the House that I should reconsider this Amendment. I think the House will agree that the Amendment in its present form would not answer. It refers to all questions of Income Tax where the amount paid was believed to be excessive and that means that every taxpayer under Schedule A, within two years and nine months after he had made what he held to be an overpayment, would be allowed to appeal. I am quite sure that that is not the object of the hon. Member who moved and of those who supported this Amendment. The bureaucracy, as it has been termed, has to work a very difficult and complicated series of Acts. In a civilized State like this the difficulties of taxation must be very great. Although I am perhaps a poacher turned gamekeeper, for before I came to the Ministry my attitude towards taxation was rather in favour of appeals, speaking with a knowledge of my past career and the experience that I gained in that career, I am prepared to say that I have been met time after time with the utmost courtesy and fairness by the Inland Revenue Authorities, and I am sure that in any genuine case of grievance they do do their very best to see that no hardship or unfairness or, above all, injustice is done to the taxpayer. I am, however impressed by the appeals which have been made to me and I should like to take the suggestion made by the late Attorney-General that I should consider this Clause between now and the Report stage. I will do that. I have explained that the words as they stand at present would not do. 1 do not want to open the floodgates of unnecessary appeals, and if I can frame, or if the right hon. Gentleman will himself assist by making suggestions or drafting a Clause which he considers would be fair as between the taxpayer and the Crown, I will give it my best consideration.

I am very much obliged to the right hon. Gentleman for what he has said, and, in view of this undertaking to try and have something drafted which will satisfy the universal demand from all quarters of the House, I have no alternative but to ask the Committee to allow me to withdraw the Amendment. But I want to make it quite clear that, failing such an undertaking, I should not have felt justified in withdrawing the Amendment in view of the universal approbation with which it was received in all quarters of the House. There was not a single speech delivered against it, and yet the Solicitor-General practically told us that nothing could be done. He told us, in effect, that the Commissioners of Taxes, who are accustomed to deal with appeals are unable to deal with these particular appeals for some reason which I cannot appreciate. His whole speech was redolent of Somerset House. It was redolent of the bureaucracy, it was redolent of the one desire of Somerset House to get the whole administration into their own hands. Therefore, if I ask leave to withdraw the Amendment it is not because of the speech of the Solicitor-General but because of that of the Secretary to the Treasury, and I accept with gratitude the offer the right hon. Gentleman has made. I ask the leave of the House to withdraw the Amendment.

I do not want to embarrass the Government if they offer us a concession, but I do not see any difficulty in getting something done to ameliorate the position. The Government has no right to take money to which it is not entitled and then to shelter itself behind all sorts of rules and alleged difficulties. I take this position. I shall agree to the withdrawal of the Amendment on the assurance given by the right hon. Gentleman the Financial Secretary to the Treasury. But I shall expect him to indicate the feeling of the House to the Treasury in the meantime, whether he gives us on Report a Clause or not such as has been suggested. As he has quoted the difficulties of the passage through Scylla and Charybdis, may I remind him that to-day "What song the syrens sang" has not been beyond conjecture! The song has been unmistakable in its note from every syren in the House. It appears to me the Revenue has taken upon itself a very dishonest line in these claims, and I therefore think the Financial Secretary should indicate to the authorities that when in future these claims come up for consideration, it is the wish of the House of Commons that the cases shall be regarded from the point of view that if a genuine mistake has been made the Board of Inland Revenue should not refuse to put the matter right by repayment and without making difficulties against the taxpayer who has paid in error.

Some of the Members on this side of the House are inclined to concur with the views of the Solicitor-General, while we do not wish to prevent the withdrawal of the Amendment that some of us will watch very closely how the Financial Secretary proposes to deal with this matter when it comes to the Report stage. It is true there may be genuine cases of overpayment, and it should be made perfectly clear that in such cases repayment should be made. The case cited by the hon. Member for Stockport made it very clear that many hon. Members supporting the Amendment would be quite prepared to have much wider powers given to the Board of Inland Revenue to consider claims for repayment made on quite different grounds, and from that point of view we shall have to watch very closely indeed the proposals of the Financial Secretary.

Question put, "That those words be there inserted."

Are you putting the question? I asked the leave of the House to withdraw the Amendment.

I do not think I was here when the hon. Member asked leave to withdraw. Was the leave refused? [HON. MEMBERS: "NO!"] AS a matter of fact, the hon. Member for the Hillsborough Division of Sheffield (Mr. A. V. Alexander) continued the Debate, and leave to withdraw was thereby refused.

I think you are, Sir, under a misapprehension. I heard the hon. Member ask leave to withdraw, but I think your attention was at the moment attracted to something else. The hon. Member certainly asked leave to withdraw.

Leave must be given at once. If an hon. Member continue to speak, that means the leave has been refused.

Amendment negatived.

Clause ordered to stand part of the Bill.

CLAUSE 17.—(Determination of annual values for purposes of Income Tax under Schedule B for 1923–24.)

(1) In ascertaining in accordance with the Rules of Schedule B the annual values of lands, tenements, hereditaments and heritages for the purpose of assessments to Income Tax under Schedule B for the year 1923–24, those values shall be estimated and determined as for the year 1922–23, and assessments to tax shall be made accordingly:

Provided that if any person who has been assessed to Income Tax under Schedule B for the year 1923–24 in respect of the occupation of any land, tenement, hereditament or heritage proves to the satisfaction of the General Commissioners that the annual value of that land, tenement, hereditament or heritage for the year 1923–24 is less than the annual value on which the assessment was based, he shall be entitled to have the assessment reduced to an amount based on the annual value for the year 1923–24 as estimated in accordance with the rules applicable to Schedule B.

(2) This Section shall not apply as respects Scotland or Northern Ireland, or as respects lands, tenements, hereditaments and heritages in the administrative County of London with respect to which the valuation list under the Valuation (Metropolis) Act, 1869, is by that Act made conclusive for the purposes of Income Tax.

I beg to move, in Sub-section (1), after "B" ["in accordance with the rules applicable to Schedule B"], to insert the words

"and provided the definition of the expression 'assessable value' in Schedule B of the Income Tax Act, 1918, shall have effect as though for the words 'an amount equal to twice the annual value' there were substituted the words 'an amount equal to half the annual value,' and as though for the words 'an amount equal to the annual value 'there were substituted the words' an amount equal to one-sixth of the annual value.'"

This Amendment does not require a great deal of explanation. Everyone knows that farmers, mainly owing to their inability as a rule to keep practical accounts which would bring them under Schedule D, are allowed to be assessed to Income Tax under Schedule B in respect of the occupation of their land. Before the War, such assessment was reckoned at an amount equal to its annual value in the case of land cultivated for profit, and at one third of the annual value in the case of amenity land, most of which cannot be cultivated for profit. During the War, when farmers were doing well, the Government of that day raised their assessments; I believe that they doubled them. In the case of land cultivated for profit, the assessment was raised to twice the annual value, and, in the case of amenity lands, to an amount equal to the annual value. Hon. Members who were in the House last year will recollect that Clause 16 of the Finance Bill of 1922, in dealing with assessable values under Scedule B of the Income Tax Act, 1918, reduced these assessments again and placed them on the pre-War scale. I am moving this Amendment because those reductions on the assessments are, in my humble opinion, not enough. The industry of agriculture to-day is losing money, and, although this Government have already rendered very great assistance and relief, I maintain that, if their desire to assist the industry is genuine, this Amendment ought to be treated with great sympathy. In 1922. when the House was discussing a hostile urban Amendment to Clause 16 of the Bill, the then Solicitor-General, speaking for the Government, said:

"The position at the present day is that, so far from farmers being very successful, they are having an extremely hard time. … I do not believe, taking the average of fanners in this country, that they have reached a level of annual value under Schedule B during the last year, and that is the basis of this Clause."—[OFFICIAL REPORT, 20th June, 1922; col. 1252, Vol. 155.]

That was the opinion of the Government in 1922, when agriculture was most certainly in a better position than it is to-day, when prices were higher, when the agricultural labourers were receiving a more generous wage than that paid to-day. Even then, the opinion of the Government was that farmers were over-assessed when their land was assessed at its annual value. It is, therefore, in my humble opinion, even more true now, when, with one or two rare exceptions, prices have fallen to an appalling extent, when few crops pay, when stock is sold at ridiculous figures, and when decent wages of the agricultural labourers cannot be paid. It seems to me that their income from land cultivated for profit cannot possibly be taken at anything like the annual value, and, therefore, I appeal to the Government to reconsider this matter in the light of to-day. After all, if they will reduce the assessment, it will, to a great extent, enable the farmers to put their industry on a paying basis, to make both ends meet, and will ultimately enable them to pay their labourers a decent wage. It is on these grounds that I beg to move the Amendment.

The hon. and gallant Member, in moving this Amendment, said that it was not necessary that he should say very much in support of it, and I think I might say that I do not think the Amendment is one which deserves very long consideration at the hands of this Committee. I certainly congratulate the hon. Member upon his courage, if not his audacity, in asking the House of Commons to make this further concession to the agricultural interest of the country. For a, great many years, before the Amendments that were carried out during the War, farmers were paying Income Tax under Schedule B on only half their assessable annual value; that is to say, a farmer paying a rent of £500 a year paid Income Tax only on £250 a year; and it was perfectly absurd to suppose that a man who could afford to pay a rent of £500 a year was only earning on that farm a sum of £250. As I read this Amendment, it proposes to reduce the amount upon which, under Schedule B, the farmer will be assessed to Income Tax, from twice the annual value to one-half the annual value; that is to say, if a farmer is assessed at present at £800 a year, that is to be reduced to £200 a year; and this proposition is being put forward at the same time that a Measure is before the House to reduce the rates for local purposes upon agricultural land by one-half. If the farmers feel aggrieved by the present method of assesment under Schedule B, they have always the alternative of being assessed under Schedule D, and, surely, even the hon. and gallant Member does not ask that a farmer should not be assessed upon the actual profits that he is making. The hon. and gallant Member has put for- ward, as an excuse for the assessment under Schedule B, that farmers are not in a position to keep proper accounts; but the village blacksmith, the village carpenter, the village tailor, is expected to keep accounts. Does the hon. And gallant Member maintain that the far mers of this country are so ignorant that they are not able to keep proper accounts? If that be so——

No, I do not. I do not maintain that they are so ignorant, but it has been the custom in the industry in this country for many centuries that they have not kept accounts, and the majority do not understand accounts. It is not a case of ignorance; they have never had to do it.

If, as the hon. and gallant Member says, they do not understand how to keep accounts, it is high time that they were taught, and that the revenue should not continue to suffer to the extent that it has done owing to the ignorance of farmers in dealing with accounts. That, I think, is about all that I need say, except to add that in this matter of Income Tax farmers have always been a privileged class. They were exempted from the Excess Profits Duty which was imposed upon all the other industries of the country, and they were exempted from that duty at a time when the profits in the agricultural industry were simply fabulous—probably higher than in any other industry in the country. I conclude by repeating that I think this is a perfectly audacious claim to make, and I hope the Committee will treat it with the contempt it deserves.

I want to emphasise one point which has been made by my hon. Friend. As we have heard a great deal to-night about the Royal Commission on Income Tax, I should like to recall that this question was considered by the Royal Commission, on which there were one or two eminent representatives of the agricultural community. In common with the other members of the Commission they brushed aside the argument about farmers not keeping books. We all know perfectly well that if we owe a farmer anything he keeps books. They unanimously recommended that farmers should be placed on the same basis as other people and should be exposed to Income Tax under Schedule D on the profits they earn, and I want to ask the Government when they are going to adopt that recommendation and so, for the first time in the history of this country for many a day, ascertain the exact position of the farming community before they give them further grants at the public expense.

As this Amendment deals with profits from husbandry it would perhaps be appropriate to congratulate my hon. Friend on his approaching marriage.

In any case that is the only thing I can congratulate him upon in respect of this Amendment. It has been very happily answered by the hon. Member opposite, though he made one mistake which I ought perhaps to correct. The assessment to-day is reduced by the Act of last year to one time the annual Value, whereas my hon. Friend's proposal is that it should be reduced to a half. Really nothing more need be said about it. The farming industry has been well treated by the Government. They have done their best. I know they are going through a bad time, but the remedy is perfectly obvious. It is for them to keep accounts. I have the unhappy privilege of being a farmer myself and I am keeping accounts—it is perhaps fortunate for my Income Tax returns that I do—and I suggest that my hon. Friend should get his farmer friends who are really troubled on the question of their Income Tax assessment to keep accounts. It will be much more desirable. I know the Royal Commission suggested that farmers should be compelled to keep accounts. I am not prepared to go to that extent and to insist upon it, certainly at present, but the tendency of modern thought and feeling is that everyone should keep accounts and pay Income Tax upon the actual amount earned, whether it is large or small, and I hope my hon. Friend will tell his farmer friends that the Inland Revenue authorities are willing to do all they possibly can to help farmers. The form of accountancy required is very simple, and if any farmer really feels he has not made a profit of one year's rent from his farm the simplest course is to send in a return and he will get ample justice done him.

I should like to thank my right hon. Friend for his congratulations and also the hon. Member opposite who spoke of the courage and audacity that I possess. In view of the fact that I do not seem to have many Friends, as far as my Amendment is concerned, I should like to ask leave to withdraw it.

No!

Amendment negatived.

Clause ordered to stand part of the Bill.

CLAUSE 18.—(New Sinking Fund and annual charges for National Debt.)

(1) The provisions contained in the Sinking Fund Act, 1875, and the provisions contained in any subsequent Acts amending that Act, with respect to the permanent annual charge for the National Debt and the new Sinking Fund shall cease to have effect, and in lieu thereof the following pro visions of this Section shall have effect.

(2) There shall be issued out of the Consolidated Fund or the growing produce thereof at such times and in such manner as the Treasury may, from time to time, direct, so however that the whole amount of the sum to be issued in respect of any financial year shall be issued in that financial year, the sums following, that is to say:—

In the financial year ending on the thirty-first day of March, nineteen hundred and twenty-four, the sum of forty million pounds:

In the financial year ending on the thirty-first day of March, nineteen hundred and twenty-five, the sum of forty-five million pounds:

In the financial year ending on the thirty-first day of March, nineteen hundred and twenty-six, and in every subsequent financial year, unless and until Parliament otherwise determines, the sum of fifty million pounds.

(3) The sum to be issued as aforesaid in each financial year (which shall be called "the new Sinking Fund") shall be applied within nine months after the date of the issue thereof in the purchasing, redeeming, or paying off any description of debt charged on the Consolidated Fund (including such part as represents capital of the terminable annuities which would, if this Act had not passed, have been payable out of the said permanent annual charge), other than advances made by the Bank of England or the Bank of Ireland under Section twelve of the Exchequer and Audit Act, 1866, or loans raised under any Act to meet ways and means.

(4) Such sums as are required for meeting the annual charges in respect of or in connection with the National Debt (including such part of the said terminable annuities as represents interest) which would, if this Act had not passed, have been payable out of the said permanent annual charge, shall be issued out of the Consolidated Fund or the growing produce thereof at such times and in such manner as the Treasury may from time to time direct.

(5) Any sums paid in pursuance of Section three of the War Loan Act, 1919, to the National Debt Commissioners for the purpose of the purchase by those Commissioners of four pounds per cent. Victory Bonds or four pounds per cent. Funding Loan, 1960–90, shall, for the purposes of this Section, be deemed to be sums applied in purchasing, redeeming or paying off debt.

I beg to move, in Sub-section (3), after the word "fund" ["which shall be called the new Sinking Fund "], to insert "(1923)."

I have some expectation that this will be accepted. The Prime Minister is abolishing the Stafford Northcote Sinking Fund and is substituting a Sinking Fund of his own based upon an entirely different principle and of an entirely different amount. The Stafford Northcote Sinking Fund was. made the new Sinking Fund, and a regular etream of public documents every year have been published, of which hon. Members received two within the last month on the new Sinking Fund. The right hon. Gentleman now proposes to describe his own Sinking Fund as the new Sinking Fund, and that is the point to which the Amendment is addressed. This will give rise to the most unnecessary difficulty and confusion. There will no doubt be a stream of documents issued from this year onwards on the new Sinking Fund, and when we wish to look back and compare the development of the National Debt from year to year, and refer to the various documents, it will be almost impossible to distinguish, in writing or in discussion, between one and the other. I therefore suggest as the right hon. Gentleman is setting up a different fund, he should signify it by come different title, and in order to do that in the simplest way I propose that it shall be called the new Sinking Fund (1923).

I do not attach as much importance to this as the hon. Member does, because I think very few people know the difference between the Old and the New Sinking Fund, and those who do know it can quite well take care of themselves. But I always like to meet the Opposition when I can, and I accept the Amendment.

Amendment agreed to.

I beg to move, at the end of Sub-section (3), to insert a new Sub-section——

"(4) The new Sinking Fund, except such part thereof as, in the opinion of the Treasury, is from time to time required for meeting charges in connection with the redemption of loans repayable outside the United Kingdom, shall be issued to the National Debt Commissioners for the purpose of being applied by them in manner provided by the foregoing provisions of this Section, and the provisions of Section seven of the Sinking Fund Act, 1875 (which relates to accounts of the new and old Sinking Funds), shall apply in relation to the new Sinking Fund established by this Section as they apply in relation to the new Sinking Fund established by that Act, and all securities purchased or redeemed in pursuance of this Section, except four pounds per cent. Victory Bonds and four pounds per cent. Funding Loan, 1960–90, purchased by the National Debt Commissioners, shall be cancelled forthwith in such manner as the Treasury may from time to time direct."

This is merely a technical provision enabling the issues to be made, as they ought to be by Statute, to the National Debt Commissioners, leaving out only such sums as are required for payment of the American Debt. The reason that is omitted is because the American Debt is an external debt. It is the internal debt which has always been dealt with by the National Debt Commissioners, The purchase of foreign currency for the repayment of external debt is made through the Treasury and is entirely independent of the National Debt Commissioners. Unless this Sub-section is added directing, as is the case in regard to all other internal debts, that these sums shall be remitted to the National Debt Commissioners to be applied by them, it would be left entirely to the discretion of the Treasury, which is undesirable and against public policy.

On this Amendment, I should like your ruling, Mr. Hope, as to whether any question can be addressed to the Prime Minister regarding the American debt. I was not suggesting that we should have a full Debate, because I think we ought to have a special day for this subject before we rise. Possibly the matter might be raised on the Question, "That the Clause stand part of the Bill."

I am not clear as to the point upon which I am asked to guide the Committee.

I should like to ask the Prime Minister to give us some information on the question of the American debt, and also how it is proposed that it should be met. I also want to open the question of the payment of large sums of money between nations, and to use the payment of the American debt as an illustration. I do not want to make a very wide interpolation, but I want to know whether I should be in order in doing it.

I gathered from the speech of the Prime Minister in moving the Amendment that these provisions refer to the internal debt and not to the American debt. In that case, it would not be in order for the hon. and gallant Member to raise the question of the American debt.

I may point out that the Prime Minister referred to the American debt. Perhaps the hon. and gallant Member for New-castle-under-Lyme (Colonel Wedgwood) is right, and that the best opportunity for debating the question would be on Clause 21.

I think it is quite clear that this Amendment does not raise the question of the American debt, except in so far as it excludes it——

"The new Sinking Fund, except such part thereof as, in the opinion of the Treasury, is from time to time required for meeting charges in connection with the redemption of loans repayable outside the United Kingdom."

That is to say, it refers only to internal loans. Therefore, it would not be in order to raise the question of the American debt.

Then am I to understand that on Clause 21 there will be no discussion?

Then on the Question "That Clause 18 stand part of the Bill," can we address any questions to the Prime Minister on this matter?

No question as to the repayment of the American Debt is comprised in Clause 18. It deals purely with the internal debt.

Amendment agreed to.

Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."

The Prime Minister, when he was moving the Financial Resolution, said he was not making an extended speech, as there would be further opportunity of discussing the whole question on the provision for the National Debt when we came to this Clause in Committee. The Prime Minister is aware that we on these benches regard his provision of £40,000,000 to £50,000,000 a year for dealing with a Debt of over £7,000,000,000 as totally inadequate. By that provision it will take 150 years to pay off the National Debt. That very fact indicates to us that the Government has practically abandoned the problem of the National Debt. I wish to take this opportunity of dealing with one or two arguments against the position we have adopted, which came from benches occupied by other parties. The right hon. Member for Norwich (Mr. Hilton Young) who, to my surprise and regret, was supported by the hon. Member for Penistone (Mr. Pringle) and the right hon. Member for Paisley (Mr. Asquith), argued that although the provision for Debt was small this year it would be increased in succeeding years, that this was a year of special difficulty, and that in two, three or five years the Chancellor of the Exchequer would find himself in an easier position and could then set aside more provision for the purposes of the National Debt.

I would point out to the Committee that that is not the statement of the Prime Minister. The Prime Minister's statement on this subject was contradicted by the Financial Secretary to the Treasury, who said that this was regarded by the Government as merely a minimum provision which might be increased in future years. The Prime Minister will recollect that when he introduced his Budget he stated that the sum of £50,000,000 was to be a maximum provision for an indefinite period, and in speeches outside this House, before he introduced his Budget, he said that he anticipated that it would be 100 or 200 years before we had rid ourselves of this problem of the National Debt. That confirms our position that the Government have abandoned the problem in despair and have left us as the only party who have a policy for dealing with the subject.

I wish to deal with the argument that in two, five, or ten years hence it will be possible for the Government to put aside larger sums for this Debt than in this year of special difficulty. What reason is there to suppose that the Chancellor of the Exchequer will be in any easier position in framing his Budget two, five, or ten years hence than he is in to-day? It will be agreed that the determining factor on which the Budget in future will mainly depend is the course of prices, and that most financial opinion now expects that prices are likely on the whole to go down. If prices go down the revenue of a Chancellor of the Exchequer in framing his Budget will diminish. His expenditure will diminish to some extent, but the fact is that half the expenditure consists of fixed charges for interest on the National Debt, which will remain exactly the same whatever the course of prices may be. The Gentleman who is going to assist the right hon. Gentleman as Chancellor of the Exchequer (Mr. McKenna) stated only a few months ago that if prices went down to pre-War level we should need an Income Tax of 8s. in the £ to deal with the charges on the National Debt alone. Obviously, therefore, we have no reason to anticipate that the Chancellor of the Exchequer in the future will be able to make any larger provision by means of Sinking Fund for the National Debt than he is able to make to-day. That justifies our position that by the method of Sinking Funds there is no solution of the difficulty in which we find ourselves.

In a speech in this Committee which created great interest, and which was delivered two days ago, the hon. Member for Farnham (Mr. A. M. Samuel) put forward an alternative method for dealing with the National Debt. He argued that by converting it to a lower rate of interest the problem would be largely solved. He gave calculations designed to show that if we converted the Debt to a lower rate of interest it would save about £130,000,000 a year, and he went on to argue that that would save more in annual charges than a capital levy of £3,500,000,000, and that therefore this proposal of conversion was one which made unnecessary the plan which is suggested from this side of the Committee. I wish to discuss whether it is possible to deal effectively with the National Debt by the process of converting it to a lower rate of interest, and to examine with a little analysis how the facts will leave the figure of £130,000,000 a year which the hon. Member worked out. The Prime Minister, when he was introducing the Budget, made certain references to these proposals for the conversion of the National Debt, and spoke of the possibility of reducing the rate of interest by 1 per cent. The hon. Member for Farnham spoke of reducing it by 2 per cent., which he will agree is a fantastic figure.

The hon. Member spoke of our issuing a conversion loan of 3½ per cent. at 90—that is 4 per cent. The present rate of interest broadly is 5 per cent. [HON. MEMBERS: "Under 4 per cent. now."] I prefer to take the figure which the Prime Minister gave of 1 per cent. and which many financiers regard as exceedingly optimistic. You have a National Debt of £7,500,000,000, and 1 per cent. on that would give you a saving of £75,000,000, but the Prime Minister did not explain that of this Debt of £7,500,000,000 about £1,000,000,000 is Debt due to the United States, which, by the arrangement, you cannot convert, and on which we are only paying 3½ per cent. as it is. Another £1,000,000,000 consists of Conversion Loan, Funding Loans, and Victory Loans, which as the Committee is aware cannot be redeemed until beyond 1960. More than another £1,000,000,000 consists of these Treasury Bills on which we are paying only 2 per cent. interest as it is, and which you certainly do not want to convert into a higher rate. The result is that, if you examine the manner in which the National Debt is made up, you will find that about £3,500,000,000 is made up of categories of National Debt to which this process of conversion cannot in practice be applied, and you are left with a sum of £4,000,000,000, and if you convert that to a rate of interest lower by 1 per cent. you will save £40,000,000 a year. But there is another fact to which the hon. Member for Farnham paid no attention, and which he will admit is an unanswerable criticism. He took no account of the fact that if, by this means, you saved interest on the National Debt you would at the same time lose Income Tax and Super-tax on that amount.

The hon. Member cannot get off this point. If he is going to use it against the Capital Levy it applies also against his argument now. I am answering him. We will answer for the Capital Levy about four weeks hence. I say that, according to the argument he is now urging against a Capital Levy, he made a mistake of 25 per cent. on that aspect of his case alone. Of that £40,000,000, if you took the Income Tax and Super-tax into account, you would lose at least £10,000,000.

I am more or less in agreement with what the hon. Member says, but when he talks about Super-tax he must remember that it does not follow that everybody who invests money in public funds pays Super-tax or even the full rate of Income Tax.

I am not assuming that. My figure is only 25 per cent. I am taking a low average to represent the fact that the holders of War stock are partly Super-tax payers, partly ordinary Income Tax payers, and partly people with small means who pay half the standard rate of Income Tax. But I come back to the fact that, taking a low average, on this £40,000,000 which would be saved by conversion of the National Debt at a lower rate, of interest, you would loose about £10,000,000 a year by the loss of Income Tax and Super-tax. It comes then to this: That this agreed alteration or conversion, which was put forward in my constituency as an alternative to the Capital Levy and which the hon. Member for Farnham has supported by saying that it represents £130,000,000 a year, on analysis is reduced by £30,000,000 a year, to deal with a National Debt the charges on which are between £300,000,000 and £400,000,000. Examination shows that it is not a substantial contribution to the subject, and we get back to the position that there are three possible methods of dealing with the Debt. There is the Sinking Fund, which, according to the Prime Minister's statement, will not pay it off for one or two centuries. There is conversion which, analysis shows, is largely a failure. You are, therefore, left with a Capital Levy as the only practicable proposal before the country to-day.

I wish to express the views of the common-sense practical man, for I do not profess to be a financier. If we look around us here, we find that everything we have, the clothes we wear and everything else, come out of the ground, just as a virgin forest. They come out of it by invention, initiation, capital, organisation and labour. In this country we have a certain amount of wealth upon which to live. The where-withal we wrest from nature each day. The human frame is wasting and has to be fed and clothed and housed. Therefore, the only wealth or surplus we have is the surplus over and above that which is necessary to keep us alive. How can this surplus be altered in any way by a manipulation of prices? Surely it must depend upon——

The hon. and gallant Member may be coming to the Sinking Fund, but he is doing so by a rather tortuous method.

I was coming to it and I was trying to get it on to a basis position first. It is only by the surplus so produced that we can pay off debt. It does not appear to me that we can alter that surplus by a manipulation either of prices or currency or anything else of that kind. The last speaker said that we could not pay off our debt for one or two centuries.

Therefore that burden would be a very great burden upon the country for that length of time. If it is true that this surplus, which we have over and above that by which we live, is the scientific production of our industries, surely invention—we have seen enormous changes due to invention in the last 100 years—surely the development of invention, of production by new scientific inventions, is the means by which we shall pay off that debt? Therefore, I do not agree that we are likely to have this great burden hanging over us, because I believe that we shall get new inventions, new developments and new methods of using the energy of nature, which will easily and completely pay off that debt and increase the wealth of this country. I rose to put that view forward, as it seems to me that the discussion tends to confuse the issue before us by calling wealth by different names and confusing it with prices.

I would like to make one or two observations on the very able speech of my hon. Friend the Member for Keighley (Mr. Lees-Smith). I think that he destroyed completely the very ably and lucidly expressed case of the hon. Member for Farnham (Mr. A. M. Samuel). But I do not agree with him in his limitations of the solution of this grave problem. Like the last speaker, I do not profess to be a financier, but, in my opinion, this is the pivot of all political considerations in this House. All our Housing Bills, our Education Bills and everything else, depend upon the way in which we can deal with this great question of our National Debt. We are brought face to face with a charge of some £350,000,000 per annum that we did not require to provide in 1914. It is an additional sum which has to come out of our annual production, and somehow or other it has to be raised. It must be paid either by the rich or by the poor. It cannot be paid by everyone alike, because, if one man has £1,000,000 and another is an old age pensioner, the pensioner cannot pay even in the same ratio as the millionaire. Upon how we decide that it shall be paid must depend our whole social policy. The hon. Member for Farnham tacitly accepted the idea that there must be reconsideration of interest charges upon the existing Debt. I want to put this consideration before the Committee.

The working class in this country gets its wages fixed nowadays very largely upon what we call the "fodder basis." As the cost of living falls, wages fall. I should like to hear a reasoned statement from any quarter of the Committee as to why capital should be treated differently. If it is right and proper and just that agreements with agricultural labourers, with colliers, and with every section of the working class should be broken by this House, and that wages should be reduced by so many shillings according to the fall in the cost of living, why should capital be treated differently? As a matter of fact, that very fall in wages, that very lowering of the standard of living of the people of these islands, automatically increases the value of the Debt. I think it was the late Prime Minister who, in the last Parliament, stated that unless this question was squarely faced we should be called upon to pay not £8,000,000,000 as the Debt was then, but we should in reality be called upon to pay £16,000,000,000 for, as the price of commodities falls, obviously the value of the Debt rises, because of the altered purchasing power of the money.

I may point out to the hon. Member that this Amendment deals with the annual charges for the National Debt and the provision of a Sinking Fund. The question before the Committee is how much the Sinking Fund should be and whether the old fund should be continued or not. I do not quite see the relevance of the hon. Member's remarks to that point.

I may have misapprehended the points made by previous speakers, and if so, I am exceedingly sorry, but I was endeavouring to put a point of view with reference to statements already made in this Debate. It is a somewhat unorthodox point of view, but, nevertheless, one which I think should be stated here. The hon. Member for Keighley (Mr. Lees-Smith) had some disputation with hon. Members opposite as to what was the current rate of interest on money. Here, again, the question of what is the rate of interest depends upon what class in society one lives in. The working-class rate of interest is only 2½ per cent. It is 2½ per cent. in the Post Office Savings Bank and it never was altered.

I am not so agile as to be able to discuss two or three things at the same time, and I do not wish to be led into a. discussion on War Savings Certificates, but I should just like to say that National Savings Certificates are very largely held, and are being bought in large blocks, by a class in the community which is certainly not the working class. [An HON. MEMBER: "There is a limit of £500."] Yes. there is a limit, but there may be 10 members of a family who buy £500 worth each. The point I was trying to make was that the rate of interest offered by the present Government and the last Government, and every Government, remains fixed so far as the working class is concerned at 2½ per cent.

I am not talking about the Post Office Savings Bank alone, but about every Trustee Savings Bank in the country. The rate, of interest is really 2¼ per cent., allowing ¼ per cent. for working expenses. Incidentally, when the working class through the town councils go to the Government to borrow money for housing, they get their own money lent back to them at 6 per cent. The Government makes something there. If the working-class rate of interest is 2½ per cent., why should the financier class expect to continue to receive 5 per cent. for 200 years—that is the period which has been mentioned? I think the hon. Member for Keighley was perfectly right when he said that a large scale conversion of that portion of the loan which is held in this country would not enable the Government to reduce the National Debt very materially. When the present Prime Minister was in America he very successfully funded the American debt upon a basis of 3½ per cent. Why should he or anybody else seek to justify the continuance of the payment of 5 per cent. to our home investors, to our patriotic native investors, if the outside debt can be arranged on a 3½ per cent. basis. My view is that the Government ought to make a very detailed inquiry as to the best method by which holders of War Loan can be treated in the same way as the working class, in so far as interest on their holdings is concerned. If it is right, proper and just that working-class remuneration should be lowered with every fall in the cost of living, it is equally right, proper and just that the financier class, who hold the bulk of our War Loan, should be similarly treated. I believe that is the central point of our economics and politics, and that it is mere trifling with time to talk about the duties on soda water and dried fruits when this great problem faces us.

I always endeavour to be right. When we have the £350,000,000 to meet, which we did not require to meet in 1914, the business of this House should be to reduce these annual charges by every possible means.

The hon. Gentleman who has just sat down made a very interesting speech from the point of view of those who have some knowledge of the question, because all his conclusions are absolutely fallacious. The last point he made was that the working class only receive 2½ per cent. for their money, whereas other classes receive 5 per cent. I presume that he means that the Post Office gives 2½ per cent. on deposits, repayable on demand. The Post Office does not select working men, but gives that to everybody in the Kingdom, and the reason it only gives 2½ per cent. is because the money is repayable on demand—that is to say, if I go to the Post Office and ask them to pay me a certain sum of money which I have deposited, I am entitled to obtain that money. [HON. MEMBERS: "Seven days!"] Seven days' notice practically means on demand. I understand if you pay 1s. you can get it at once, but "on demand" is considered in the City to be a few days' notice. On the other hand, if you invest your money, and want to get it out again, you have to sell your security in the market. Apparently the hon. Member is not aware that a very large number of people bought Consols in 1896, at £114, which have only paid them somewhere about 2¾ per cent. If they wanted to get their money now, instead of getting £114, they would only receive £59, so that they would have lost more than half their capital, and would only have received a small sum of money in the form of interest.

This is a very important point, and I hope hon. Members opposite will pay attention to it. The rate on money on deposit given by bankers is 1 per cent. which is considerably less than half the amount given by the Post Office Savings Bank. The rate for three months' bills is somewhere about 2¼ per cent. I have money to lend at the present time, and all I can get, with some little knowledge of how to manage these things, is 2¼ per cent. The hon. Member may say, "Why do you not go to the Post Office?" The answer is that the Post Office will only take a very small sum, and the particular amount I want to lend is larger than the Post Office will take. When the hon. Member talks about the rich getting 5 per cent., I would point out that there is nothing whatever to prevent a working man if he has, say, £50, going either to his banker or to his stockbroker, and investing that at 5 per cent. in Consols, just the same as anybody else.

I was not aware of that. At any rate, the working classes have the same opportunity that I have. If they can save £20 or £40, and invest it in Consols, they can get 5 per cent., exactly the same as anyone else. There is no distinction whatever between any class of investor, there are the same facilities. On small amounts, if you take Government securities, there are the same facilities for any class of person in this country. I think, so far as that is concerned, I have dealt with the statement of the hon. Member with regard to the supposed difficulty of the working man investing his money, or of his being in a worse position than anyone else to invest his money.

The hon. Member spoke about agreements. He asked why if an agreement made with a workman for wages could be broken, you should not also break an agreement with somebody from whom you had borrowed money. If his facts were correct, I should agree with him, but in order that they should be correct the hon. Member must begin by stating, when a certain person has made an agreement with a workman, that either for all time or until a particular date he will receive a particular rate of wages.

The agricultural labourer is engaged, in most places, so far as I know, at a week's notice. [HON. MEMBERS: "No!"]

The Corn Production Act did not fix a particular sum in wages. What it did was to say that we would give the farmer a certain price for his produce, and that while that was in force the Agricultural Wages Board should fix wages. The Government—whether rightly or wrongly I do not know—repealed those clauses. I am not at all sure hon. Members opposite were not strongly averse to the towns paying a subsidy to the farmers.

I would point out to the right hon. Baronet that the only relevance of the argument of the last speaker was that I understood he contended that the rates of interest on Government loans, for which it was necessary to provide a Sinking Fund under this Clause, should be reduced.

I am quite aware of that, and I apologise for having been led astray by hon. Members opposite. I could answer their arguments, and completely pulverise them; and I was afraid that if I did not answer them they might say I had no answer. I wish to point out that if you enter into an agreement you must abide by it. An agreement was made with certain people that if they would lend their money to the Government, for a fixed period, in many cases—not in every case—they would receive, until that period expired, a certain rate of interest, and that, at the expiration of that period, they would receive £100 for every £100 advanced. You cannot break that. If you were to break that, it would be a repudiation, and would destroy the whole credit of this country——

—and the working-classes would be the first to suffer. In other cases the Government do not agree to repay at a certain time, but reserve to themselves the right, by giving a year's notice, to pay off any £100 by giving £100. They can do that, and do it to-morrow, provided they can borrow cheaply. The only way they can borrow cheaply is by improving the credit of this country, by increasing the capital of this country, and by inducing hon. Members opposite to give some security to the investor, and to let him think, with all their talk about a Capital Levy, an increase in the Income Tax, and in the Death Duties, that nothing of that sort would ever be attempted.

I come to the speech of the hon. Member for Keighley (Mr. Lees-Smith), with a great deal of which I agreed. It is very difficult to say offhand—at any rate, it is very difficult with my poor brains—whether the exact calculations he has made are correct. I think that more or less they are correct, but I do not agree with his conclusions. As I understand it, he says that provided you could reduce the interest on the National Debt by 1 per cent.—by which I presume he means having given notice to pay off to the holders each £100, according to the terms of the bond, you would be then able to re-borrow on a 1 per cent. basis—the result of that would be a saving of £30,000,000, but he does not attach very much importance to that. I dare say he would be right that the saving would not be much more than £30,000,000, but that is a very great deal. It is not, to use a colloquial expression, to be sneezed at. It is a saving which would be arrived at by hurting no one, by putting on no tax, and by penalising no one, and, as an hon. Friend says, without breaking any bargain.

I did not say that the saving of £30,000,000 was something to be despised, but I was answering the calculations of the hon. Member for Farnham (Mr. A. M. Samuel), who elaborately explained that it would save £130,000,000. and I gather that in my reply to that hon. Member the right hon. Baronet agrees with me.

I was unfortunate enough to be absent when my hon. Friend the Member for Farnham (Mr. A. M. Samuel) was speaking, but if he said that by reducing the rate of interest by 1 per cent. you could save £130,000,000, I think he was a little too optimistic. As I have already said, I listened to the speech of the hon. Member for Keighley, and I believe that, subject to correction of details, he was correct. If I am wrong in thinking that he regarded £30,000,000 as a contemptible amount, I have nothing further to say, but I would much rather save £30,000,000 in that way than, as I understand the hon. Member would, by a capital levy. I understood the hon. Member was endeavouring to draw a comparison between the suggestion of my hon. Friend the Member for Farnham and the suggestion of the party to which he now belongs, that a capital levy is the solution of this difficulty, and if I am right in that, I would like to point out that, in my opinion, this is not a party question, but a very important question upon which a great deal of the future prosperity of the country depends. In my opinion, and in the opinion of a large number of people who are better able to express an authoritative opinion on that matter than I am, and to express it without any party feeling or bias, a capital levy would be the ruin of the country.

If the right hon. Baronet continues on that line, I am afraid we shall not finish the Clauses of this Bill this evening, in accordance with the arrangement arrived at last night.

I am afraid I must again plead that I was led away by the hon. Members opposite. It is rather difficult to listen to their speeches, which are sometimes a little bit irrelevant, and not to answer them, but I think I have made my point, and after apologising to you, Mr. Chairman, for having on two occasions, I am afraid, been slightly irrelevant, I have nothing further to say.

This has been an extraordinarily interesting and informing Debate, although sometimes it has strayed out of order. The real question before us is, What is the best way of reducing the Debt, whether by the Sinking Fund proposed by the right hon. Gentleman or by other methods proposed by other hon. Members? I think the speeches to-night have been separated by very little in point of actual direction. The hon. Member for Farnham (Mr. A. M. Samuel) desires to save what he says is £130,000,000, but what is obviously really only about £30,000,000, by converting the Debt to a lower rate of interest.

There are two thousand or more millions on 5 per cent. loan, and what is the good of saying we can save only £30,000,000? On that loan alone, if you reduce the interest from 5 per cent. to 3 per cent., you would save £40,000,000 at once.

Well, it may be £130,000,000. It does not affect my argument, but whether it be £130,000,000 or £30,000,000, it depends, in the first place, on paying off Debt. Any rise in the value of the conversion stock depends on the Government paying off Debt. The right hon. Baronet the Member for the City of London (Sir F. Banbury) says it depends on the credit of this country. That credit depends upon paying off Debt, and the only point that we wish to emphasise is, that we believe in paying off Debt, and hon. Members opposite merely give it lip service. The present Prime Minister, I admit, has done better than any previous Prime Ministers or Chancellors of the Exchequer in that direction, and we have got £40,000,000 this year with which to pay off Debt and £50,000,000 in future. So far, so good, but hon. Members, who all agree as to the supreme merits, not only in the interests of the trade of the country at the present time but in the interests of our financial stability, of paying off Debt, when it comes to the actual paying off of Debt, and the only proposal which can assist us to pay off Debt, immediately throw up their hands in horror and say, "Not that way." It is the only way, and if we advocate a capital levy——

If hon. Members opposite have any other method to suggest of paying off the Debt, which is the essential preliminary to conversion, let them bring it forward, but they have not done so, and so far the only practical method of securing the conversion which hon. Members opposite want is by a capital levy, in order to secure the money with which to pay off Debt, and thereby——

The even-handed justice which applies to the City of London applies also to Staffordshire.

It is difficult to carry out the argument, but I think I can remain within the bounds of order. I will not mention the words "capital levy," and I will say that the question before the Committee is, What is the best way of reducing the Debt? We, on these Benches, are convinced that the best way is by concentrating on the repayment of Debt rather than on the reduction of taxation. That is the first point. The Clause before us scraps all the old Sinking Funds, tears to pieces all the old pledges of the right hon. Member for West Birmingham (Mr. A. Chamberlain), and has as its sponsor the present Prime Minister. I think, on the whole, we shall be justified, on this side, in voting against this Clause on the ground that it does not provide sufficient funds for the repayment of Debt in view of the vital importance of the repayment of Debt. I do not know whether the Prime Minister will join in this Debate, but, if so, I would like to have from him his views on the question of conversion and the rate of repayment of Debt, and I would like to have his views on the very important question as to whether the trade of the country will not be most benefited by those sound financial lines of repayment of Debt and of sacrificing everything else to that repayment.

I rose, however, to make another point. It is obvious that as a whole we have not yet acclimatised ourselves to the fact that we have changed the basis of our currency. We are no longer dependent upon gold as the standard of currency. The credit of this country depends now not to the slightest extent upon the gold in the vaults of the Bank of England. The possibility of exchanging Bradburys or £5 notes into gold has vanished, and therefore the credit of the country at the present time, and the credit of the currency, and the rate of interest at which the Government can borrow money depend not in the slightest on the amount of gold in the Bank of England.

Exactly the same might be said of the credit of foreign countries. Neither in Germany nor in France does the credit of the country any longer depend upon the gold reserves. Had we better not realise that the credit of this country depends upon—[An HON. MEMBER: "The Conservative party!"]—following out, in spite of the opposition of his followers, the sound financial policy of the right hon. Gentleman of the repayment of Debt? Have not we got to realise that the credit of this country depends upon the taxpayers having shouldered the burden during the War, and being prepared to shoulder the burden after the War also; and that, so far as we are concerned, the gold in the Bank of England is no longer of any sort of use to this country? Is it impossible to use these gold reserves, which must amount to £70,000,000, which are no longer wanted; to use that money for the repayment of Debt, particularly for the repayment of foreign debt? Would it be possible, when the Prime Minister comes to reply, for him to let us know whether it is practicable to set up a Commission to go into this question in detail, and see how far, if any, ill effects would happen to the trade, commerce, and credit of this country if we disposed of our gold reserves, seeing that gold no longer to any extent, or any degree, is the basis of our financial stability?

We would not sneeze at £30,000,000 a year. We should welcome that saving if we got our conversion. Neither would we sneeze at getting rid of the gold reserve, while it is still of some value for the repayment of Debt, when this would mean a saving of £70,000,000, it might be more, it might be £100,000,000. This is the direction in which we should go. The great and principal way in which Debt can be paid the principal way in which the conversion of our convertible Debt, our War Debts, at a lower rate of interest can be made, is by not dealing with the Debt in batches of £50,000,000, and taking large slices out of the taxpayers of this country, but making use of a heavier, of a single sacrifice, in order to get rid of some of the dead-weight burden, and so to convert the remainder at a lower rate of interest.

I do not propose to follow the hon. and gallant Member for New— castle-under-Lyme (Colonel Wedgwood) in regard to the gold of which he has been speaking, but I should like to inform him with regard to conversion that conversion is almost always going on, is going on weekly; and only two months ago the Chancellor of the Exchequer issued £15,000,000 of Four per cents. at 95; that was to pay off a 5½ per cent. Loan. I agree with the hon. and gallant Member that the more we can convert the better, but the great Loan to convert is the £2,000,000,000 of Five per cent. War Loan. If you could convert that at 1 per cent. reduction in interest it would be satisfactory.

Yes, 1 per cent. interest below what it is now. Our great loan is the Three and a Half Per Cent. Conversion, issued at a great sacrifice. I think the Three and a Half Per Cent. Conversion was issued too soon. It was issued at a ridiculously low price, a price that yielded to the investor at that time about £4 15s. per cent. If you want to put that on a 4 per cent. basis you would have to make your conversion at 87½, which would give you 4 per cent. In pre-War days there was practically only one Government loan. I am not discussing Treasury Bills. There was one Government loan—that was Consols. Consols were not redeemable except at the option of the Government. In those days you had your sinking Fund of 1 per cent., which went as a Sinking Fund for paying off Consols, but it was not absolutely necessary for the Government to pay off Consols. At the present time you have loans which have to be paid off according to agreements which have to be carried out by prospectus. Take the Three and a Half Per Cent. Loan, which now amounts to about £700,000,000. I think, if memory serves me aright, the actual amount of the Sinking Fund is 1 per cent. for the half year, that is 2 per cent. per annum when the price is below 90; that comes to about £14,000,000 a year. That is a large Sinking Fund. But supposing you are in a position to convert your Five Per Cent. War Loan of £2,000,000,000 into a Three and a Half Per Cent., which is below 90, your Sinking Fund might easily run up to £34,000,000 a year, almost the amount it is proposed to pay to the Sinking Fund for this first year under the proposal of the Prime Minister.

I do press upon the Prime Minister in making the arrangement for the three years in advance, although it may be possible to alter that arrangement, to consider that our Three and a Half Per Cent. Loan is a big loan, and may take the place of Consols—that he will consider this 1 per cent. per half year Sinking Fund which, if the conversion were carried out, might amount to a very large, indeed a bigger sum than perhaps we anticipate at the present time.

I should like to add a few words to what has been said about the inadequacy of the Sinking Fund. It has been said that it will take about 200 years to pay off the present debt that weighs down the country. I can hardly imagine that this country is not going through many changes before those two centuries have passed, and that the agreements of which the right hon. Baronet spoke will not be looked askance at by the grandchildren and great grandchildren of the people who were living during the War period. I suggest that in dealing with the question of the sinking funds that prior to any question of paying off the debt there should first of all be an inquiry as to the exact nature of very much of the debt that exists. I should imagine that a very strict inquiry into the first two War Loans issued before the great inflation of prices took place would indicate that a very large proportion of those first two loans consisted very largely of bank credits, and that there were no real money loans made, and that the very same process which publicists and financiers of this country have laughed about as taking place in the central empires went on to a very considerable extent here—that many of these loans were fictitious.

Even, however, apart from that, I am merely asking that there should be some inquiry in the later stages into the question of incurring the large War Debt. In the later stages of the War the money that was raised was very largely money that was created by the artificial expansion of the currency of this country. The money itself, the "Bradbury," which had 20s. marked on the face of it, was worth about 7s. 6d. at one stage, and most of the subscriptions to the later War loans was of that nature, but the money itself was at a very low value. The policy of the last Government in the deflation that took place in March, 1920 and 1921, has doubled the value of the money that was put into the loan. I suggest, that apart from that money which was raised by the selling of securities abroad, the great bulk of the War loan can be accounted for under two heads. In the first place there is the manipulation of bank credits, and, in the second place, the inflation. In both these cases the burden was doubled by the deflation policy of the late Government. I suggest that before the question of a Sinking Fund is carried very much further, there ought to be a strict and searching inquiry into the question of the Debt and its incurrence during the whole of the War period.

I want to put a few questions in the hope that some of these difficulties will be cleared up. We are discussing the method of redeeming or paying off the War Debt, and the Sinking Fund provides about £40,000,000 during the year. The Labour party at the last Election held that we should have a capital levy, and thereby save the paying of interest for 200 years. We were told that the financiers would be able to make this point so clear that we should, forget all about it. I have listened to-night to the speeches of two financiers, the hon. Member for Farnham (Mr. A. M. Samuel) is one of them, and I think he has disposed of his argument. The House generally admits, and the hon. Member seems to agree with them, that all the figures he juggled with were scarcely worth using.

The hon. Member has challenged my argument. The time will come when we shall look the dollar straight in the face and when we shall bring back the whole of that £1,000,000,000 to this country. That will alter the whole position.

10.0 P.M.

I am afraid I was carried away by the arguments of the hon. Member for Farnham. I know the reputation the hon. Member has for finance, and anything he says in dealing with money may be taken for granted. I think the figures we have been supplied with are fallacious, and the method which has been adopted stands condemned. I always like to hear the right hon. Baronet the Member for the City of London (Sir F. Banbury) taking part in our Debates, because there is something about him which makes us feel that, whilst we do not agree with him, we like to hear him. The right hon. Baronet has put forward no solution, but he has criticised the solution which has been proposed. The proposal of the Labour party is to have a capital levy. We have been told that, having made an agreement to pay a certain amount of money in return for the loan with America, we are bound to go on making those payments. I do not quarrel with that argument, but I believe the Americans have been cajoled into accepting something less. We have been told that if we reduce the rate of interest we shall be breaking our agreement. We have heard a good deal in this House about some of the contracts and pledges which were not kept by the late Government. There was one pledge which was not kept in regard to the men who came back from the War——

The Government have broken every agreement and every promise which they made to the people of this country.

That may be true or it may not be true, but it has nothing to do with the sums paid annually under the Sinking Fund.

I suggest that the Committee might consider reducing the interest. The sum of £300,000,000 has to be found each year in addition to the ordinary cost of carrying on the business of the country, and I suggest that it is utterly impossible that this country can recover, or that the people can get a proper opportunity for education and social well-being so long as we have to meet that charge. Hon. Members opposite have put forward no solution of this question. I have listened to three speeches to-night and they all take a different line; the only thing they were agreed upon was that generation after generation will have to pay 5 per cent. interest on the War Loan. [HON. MEMBERS: "Till 1927."] It will be far longer than 1927. I do not know how many hundreds of years afterwards, but it will not trouble you or I at that time. We are suggesting that some inquiry should be made into the best way to get rid of this burden. So far no solution has been put before us and our solution holds the field.

I had not intended to take part in this Debate, but I think it is my duty and that I am justified in dealing once more with what I have tried to deal with on three previous occasions, that is, the suggestions which are incorporated in the 18th Clause of the Finance Bill. These suggestions are now fairly well known to the Committee. I am trying to meet a problem which faces and which must face any Chancellor of the Exchequer who has to provide for meeting the expenditure of the current year. I have to try to maintain, in a very difficult time, the credit of this country. I am perfectly well aware that that credit cannot be maintained unless two things are done; unless the annual Budget of the country is balanced, and unless some provision—and here, of course, opinions vary—is made for the redemption of Debt. I have put into the Budget an amount which, though considerable in the circumstances, I believe the country can and ought to afford, and I have put in an amount sufficient, in my view, to make it plain to the whole world that we are determined to preserve the principles of the most prudent and sound finance in this country, and that, by that means and with that knowledge, the credit we enjoy to-day both at home and abroad may be maintained for the next few years. As is usual, I proceeded, according to my custom, on what I believed to be safe and steady lines.

I have been challenged from some of the benches opposite because I am exceeding the speed limit, and I have been challenged by other Members opposite because I have not gone fast enough. Perhaps the Committee will have patience with me if I remind them of the immediate problem of the short-time loan maturing this year and next year, and on each of a few succeeding years, amounting to no less than £1,300,000,000, and the large loan first maturing or due for conversion in 1929, to which allusion has been made on both sides of the Committee. I am convinced that the policy which is laid down in this Clause commands the assent of the majority of the House and that it will have the effect, so far as anything can have the effect, of preserving our credit and thereby giving us the advantage of as cheap a market for money as there is in the world, if not the cheapest.

There is no greater necessity for this country, both for its trade and for its finance, than cheap money. There is no other country which depends like ours so entirely upon its trade and so largely upon its foreign trade. The reasons why I am so anxious to see these terms embodied in this Statute are two-fold. I want to make it plain to the world that we are constant in the policy which we are recommending in this year's Budget; and I want to make it as difficult as I can for anyone who in future years may want to proceed on other principles than those we are laying down this year. It is possible that a time may come when these conditions may have to be interfered with. On that, no one can prophesy. But we do assure, by incorporating these terms in the Statute, that an alteration cannot be made by a mere stroke of the pen, that whoever wishes to make it must take the only honest and consistent course. He must come to this House and give his reasons, and if the necessity be so great and the reasons are so good, this House will doubtless give him what is necessary. But it is essential, in my view, that there should be no tampering with the Sinking Fund during these critical years unless the necessity for it is proved beyond a doubt to the majority of this House. I hope very much the Committee may now see fit to proceed to a Division on this Clause, so that we may take the few remaining Clauses of the Bill.

I do not want to intervene more than a moment, but I do want to make one observation. First of all, I am entirely in agreement with the Government in regard to this Clause. If I have one criticism to make, it is that they have not gone far enough in regard to Debt reduction. I hope that in future years we may be able to devote a larger sum to Debt reduction, but there is one thing I would like to say, and that is that, beyond the fact of advertising to the world that our credit is first-class, I hope the Prime Minister and the Government will advertise to the world that we expect our debts to be paid to us. I think we have entirely forgotten the fact that other people owe us money. If I may venture to criticise a great financier like the Prime Minister, I would suggest that he has exceeded the speed limit in trying to rush into an arrangement which has committed us for many years to come for very large sums. I venture to suggest that in future years those sums now owing to us by very prosperous nations may be a means of reducing this Debt.

On a point of Order. Is this relevant to the Question before the Committee?

I hope the hon. and gallant Member will confine himself to the Clause we are discussing.

I think it will be within the recollection of the Committee that other Members, including the right hon. Baronet the Member for the City of London (Sir P. Banbury), did not keep to the exact terms of the Amendment.

What I wish is that we should not only advertise to the world our credit, but also that we should advertise to our friends abroad that we expect to receive the debts due to us.

Question put, "That the Clause, as amended, stand part of the Bill."

The Committee divided: Ayes, 276; Noes, 116.

Division No. 212.]

AYES.

[10.16 p.m.

Alexander, E. E. (Leyton, East)

Clarke, Sir E. C.

Garland, C. S.

Alexander, Col. M. (Southwark)

Clayton, G. C.

Gates, Percy

Allen, Lieut.-Col. Sir William James

Colfox, Major Wm. Phillips

George, Major G. L. (Pembroke)

Amery, Rt. Hon. Leopold C. M. S.

Collins, Pat (Walsall)

Gilmour, Lt.-Col. Rt. Hon. Sir John

Archer-Shee, Lieut.-Colonel Martin

Conway, Sir W. Martin

Gould, James C.

Ashley, Lt.-Col. Wilfrid W.

Cope, Major William

Gray, Frank (Oxford)

Astbury, Lieut.-Com. Frederick W.

Cory, Sir J. H. (Cardiff, South)

Gray, Harold (Cambridge)

Baird, Rt. Hon. Sir John Lawrence

Cotts, Sir William Dingwall Mitchell

Greaves-Lord, Walter

Baldwin, Rt. Hon. Stanley

Cowan, D. M. (Scottish Universities)

Greenwood, William (Stockport)

Balfour, George (Hampstead)

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

Grenfell, Edward C. (City of London)

Banbury, Rt. Hon. Sir Frederick G.

Craik, Rt. Hon. Sir Henry

Grigg, Sir Edward

Banks, Mitchell

Croft, Lieut.-Colonel Henry Page

Gwynne, Rupert S.

Barnett, Major Richard W.

Crook, C. W. (East Ham, North)

Hall, Rr-Adml Sir W.(Liv'p'l, W. D'by)

Becker, Harry

Crooke, J. Smedley (Deritend)

Halstead, Major D.

Bellairs, Commander Carlyon W.

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

Hamilton, Sir R. (Orkney & Shetland)

Benn, Sir A. S. (Plymouth, Drake)

Davidson, Major-General Sir J. H.

Hannon, Patrick Joseph Henry

Bennett, Sir T. J. (Sevenoaks)

Davies, Alfred Thomas (Lincoln)

Harbord, Arthur

Bentinck, Lord Henry Cavendish-

Davies, Thomas (Cirencester)

Harrison, F. C.

Berkeley, Captain Reginald

Dawson, Sir Philip

Harvey, Major S. E.

Birchall, Major J. Dearman

Dixon, C. H. (Rutland)

Hawke, John Anthony

Bird, Sir W. B. M. (Chichester)

Doyle, N. Grattan

Hay, Major T. W. (Norfolk, South)

Blades, Sir George Rowland

Dudgeon, Major C. R.

Henn, Sir Sydney H.

Blundell, F. N.

Du Pre, Colonel William Baring

Hennessy, Major J. R. G.

Bonwick, A.

Edge, Captain Sir William

Herbert, Dennis (Hertford, Watford)

Bowyer, Captain G. E. W.

Edmonds, G.

Herbert, S. (Scarborough)

Bridgeman, Rt. Hon. William Clive

Edmondson. Major A. J.

Hewett, Sir J. P.

Brittain, Sir Harry

Ednam, Viscount

Hilder, Lieut.-Colonel Frank

Brown, Major D. C. (Hexham)

Elliot, Captain Walter E. (Lanark)

Hiley, Sir Ernest

Brown, Brig.-Gen. Clifton (Newbury)

Ellis, R. G.

Hinds, John

Brown, J. W. (Middlesbrough, E.)

England, Lieut.-Colonel A.

Hoare, Lt.-Col. Rt. Hon. Sir S. J. C.

Bruford, R.

Erskine, James Malcolm Monteith

Hodge, Lieut.-Col. J. P. (Preston)

Bruton, Sir James

Erskine, Lord (Weston-super-Mare)

Hogg, Rt. Hon. Sir D. (St. Marylebone)

Buckingham, Sir H.

Erskine-Bolst, Captain C.

Holbrook, Sir Arthur Richard

Buckley, Lieut.-Colonel A.

Evans, Capt. H. Arthur (Leicester, E.)

Hood, Sir Joseph

Burney, Com. (Middx., Uxbridge)

Evans, Ernest (Cardigan)

Hopkins, John W. W.

Burnie, Major J. (Bootle)

Eyres-Monsell, Com. Bolton M.

Hopkinson, A. (Lancaster, Mossley)

Butler, H. M. (Leeds, North)

Falcon, Captain Michael

Houfton, John Plowright

Butler, J. R. M. (Cambridge Univ.)

Falle, Major Sir Bertram Godfray

Howard, Capt. D. (Cumberland, N.)

Butt, Sir Alfred

Fawkes, Major F. H.

Hudson, Capt. A.

Button, H. S.

Fermor-Hesketh, Major T.

Hughes, Collingwood

Cadogan, Major Edward

Fildes, Henry

Hume, G. H.

Campion, Lieut.-Colonel W. R.

Flanagan, W. H.

Hume-Williams, Sir W. Ellis

Cayzer, Sir C. (Chester, City)

Ford, Patrick Johnston

Hunter-Weston, Lt.-Gen. Sir Aylmer

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

Foxcroft, Captain Charles Talbot

Hurd, Percy A.

Chadwick, Sir Robert Burton

Fraser, Major Sir Keith

Hutchison, G. A. C. (Midlothian, N.)

Chamberlain, Rt. Hon. N. (Ladywood)

Furness, G. J.

Hutchison, Sir R. (Kirkcaldy)

Chapman, Sir S.

Galbraith, J. F. W.

Hutchison, W. (Kelvingrove)

Chapple, W. A.

Ganzoni, Sir John

Inskip, Sir Thomas Walker H.

Jarrett, G. W. S.

Pattinson, S. (Horncastle)

Smith, Sir Allan M. (Croydon, South)

Jephcott, A. R.

Pease, William Edwin

Smith, Sir Harold (Wavertree)

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

Pennefather, De Fonblanque

Somerville, A. A. (Windsor)

Jones, Henry Haydn (Merioneth)

Penny, Frederick George

Somerville, Daniel (Barrow-in-Furn'ss)

Joynson-Hicks, Sir William

Percy, Lord Eustace (Hastings)

Spears, Brig.-Gen. E. L.

Kelley, Major Fred (Rotherham)

Perkins, Colonel E. K.

Spender-Clay, Lieut.-Colonel H. H.

Kennedy, Captain M. S. Nigel

Perring, William George

Stanley, Lord

Kenyon, Barnet

Philipson, Mabel

Steel, Major S. Strang

Kinloch-Cooke, Sir Clement

Pilditch, Sir Philip

Stewart, Gershom (Wirral)

Lamb, J. Q

Pollock, Rt. Hon. Sir Ernest Murray

Stockton, Sir Edwin Forsyth

Lane-Fox, Lieut.-Colonel G. R.

Pownall, Lieut.-Colonel Assheton

Stott, Lt.-Col. W. H.

Linfield, F. C.

Preston, Sir W. R.

Strauss, Edward Anthony

Lloyd-Greame, Rt. Hon. Sir Philip

Pretyman, Rt. Hon, Ernest G.

Sturrock, J. Leng

Lorden, John William

Price, E. G.

Sueter, Rear-Admiral Murray Fraser

Lougher, L.

Privett, F. J.

Sugden, Sir Wilfred H.

Loyd, Arthur Thomas (Abingdon)

Rae, Sir Henry N.

Sutherland, Rt. Hon. Sir William

Lynn, R. J.

Raeburn, Sir William H.

Sykes, Major-Gen. Sir Frederick H.

Macdonald, Sir Murdoch (Inverness)

Raine, W.

Terrell, Captain R. (Oxford, Henley)

Macnaghten, Hon. Sir Malcolm

Rankin, Captain James Stuart

Thomas, Sir Robert John (Anglesey)

McNeill, Ronald (Kent, Canterbury)

Rawlinson, Rt. Hon. John Fredk. Peel

Thomson, F. C. (Aberdeen, South)

Maitland, Sir Arthur D. Steel-

Rees, Sir Beddoe

Thornton, M.

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

Reid, Capt. A. S. C. (Warrington)

Thorpe, Captain John Henry

Manville, Edward

Remnant, Sir James

Titchfield, Marquess of

Martin, F. (Aberd'n & Kinc'dine, E.)

Reynolds, W. G. W.

Tryon, Rt. Hon. George Clement

Mason, Lieut.-Colonel C. K.

Rhodes, Lieut.-Col. J. P.

Tubbs, S. W.

Milne, J. S. Wardlaw

Richardson, Lt.-Col. Sir P. (Chrtsy)

Turton, Edmund Russborough

Mitchell, W. F. (Saffron Walden)

Roberts, C. H. (Derby)

Wallace, Captain E.

Mitchell, Sir W. Lane (Streatham)

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

Ward, Col. L. (Kingston-upon-Hull)

Moore, Major-General Sir Newton J.

Roberts, Samuel (Hereford, Hereford)

Waring, Major Walter

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

Roberts, Rt. Hon. Sir S. (Ecclesall)

Warner, Sir T. Courtenay T.

Morden, Col. W. Grant

Robertson-Despencer, Major (Isl'gt'n W)

Watson, Capt. J. (Stockton-on-Tees)

Morris, Harold

Robinson, Sir T. (Lanes., Stretford)

Watts, Dr. T. (Man., Withington)

Morrison, Hugh (Wilts, Salisbury)

Rothschild, Lionel de

Wheler, Col. Granville C. H.

Morrison-Bell, Major A. C. (Honiton)

Roundell, Colonel R. F.

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

Murchison, C. K.

Ruggles-Brise, Major E.

Wise, Frederick

Murray, John (Leeds, West)

Russell, Alexander West- (Tynemouth)

Wolmer, Viscount

Nail, Major Joseph

Russell, William (Bolton)

Wood, Rt. Hon. Edward F. L. (Ripon)

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

Samuel, A. M. (Surrey, Farnham)

Wood, Major Sir S. Hill- (High Peak)

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

Samuel, Samuel (W'dsworth, Putney)

Woodcock, Colonel H. C.

Newson, Sir Percy Wilson

Sanders, Rt. Hon. Sir Robert A.

Worthington-Evans, Rt. Hon. Sir L.

Nicholson, Brig.-Gen. J. (Westminster)

Sanderson, Sir Frank B.

Yerburgh, R. D. T.

Nicholson, William G. (Petersfield)

Sandon, Lord

Oman, Sir Charles William C.

Sheffield, Sir Berkeley

TELLERS FOR THE AYES. —Colonel Leslie Wilson and Captain Douglas King.—Colonel Leslie Wilson and Captain Douglas King.

Paget, T. G.

Shepperson, E. W.

Parkor, Owen (Kettering)

Skelton, A. N.

Parry, Lieut.-Colonel Thomas Henry

NOES.

Adams, D.

Hastings, Patrick

Nichol, Robert

Adamson, Rt. Hon. William

Hay, Captain J. P. (Cathcart)

Oliver, George Harold

Adamson, W. M. (Staff., Cannock)

Hayday, Arthur

Paling, W.

Alexander, A. V. (Sheffield, Hillsbro')

Hayes, John Henry (Edge Hill)

Parker, H. (Hanley)

Ammon, Charles George

Henderson, Rt. Hon. A. (N'castle, E.)

Parkinson, John Allen (Wigan)

Attlee, C. R.

Herriotts, J.

Ponsonby, Arthur

Batey, Joseph

Hirst, G. H.

Potts, John S.

Bowerman, Rt. Hon. Charles W.

Jenkins, W. (Glamorgan, Neath)

Richards, R

Bromfield, William

John, William (Rhondda, West)

Richardson, R. (Houghton-le-Spring)

Brotherton, J.

Johnston, Thomas (Stirling)

Riley, Ben

Brown, James (Ayr and Bute)

Johnstone, Harcourt (Willesden, East)

Ritson, J.

Buchanan, G.

Jones, J. J. (West Ham, Silvertown)

Robertson, J. (Lanark, Bothwell)

Buckle, J.

Jones, R. T. (Carnarvon)

Robinson, W. C. (York, Elland)

Burgess, S.

Jones, T. I. Mardy (Pontypridd)

Rose, Frank H.

Buxton, Charles (Accrington)

Jowett, F. W. (Bradford, East)

Royce, William Stapleton

Buxton, Noel (Norfolk, North)

Kenworthy, Lieut.-Commander J. M.

Saklatvala, S.

Charleton, H. C.

Kirkwood, D.

Salter, Dr. A.

Clynes, Rt. Hon. John R.

Lansbury, George

Scrymgeour, E.

Davies, Rhys John (Westhoughton)

Lawson, John James

Sexton, James

Duffy, T. Gavan

Leach, W.

Shakespeare, G. H.

Duncan, C.

Lee, F.

Shaw, Thomas (Preston)

Dunnico, H.

Lees-Smith, H. B. (Keighley)

Shinwell, Emanuel

Ede, James Chuter

Lowth, T.

Smith, T. (Pontefract)

Edwards, C. (Monmouth, Bedwellty)

Lunn, William

Snell, Harry

Entwistle, Major C. F.

MacDonald, J. R. (Aberavon)

Snowden, Philip

Foot, Isaac

M'Entee, V. L.

Spencer, George A. (Broxtowe)

Gosling, Harry

Maclean, Neil (Glasgow, Govan)

Stephen, Campbell

Graham, D. M. (Lanark, Hamilton)

March, S.

Stewart, J. (St. Rollox)

Greenall, T.

Maxton, James

Sullivan, J.

Grenfell, D. R. (Glamorgan)

Middleton, G.

Thomson, T. (Middlesbrough, West)

Groves, T.

Morel, E. D.

Trevelyan, C. P.

Grundy, T. W.

Morrison, R. C. (Tottenham, N.)

Turner, Ben

Hall, F. (York, W. R., Normanton)

Muir, John W.

Wallhead, Richard C.

Hall, G. H. (Merthyr Tydvil)

Murnin, H.

Watson, W. M. (Dunfermline)

Hardie, George D.

Murray, R. (Renfrew, Western)

Watts-Morgan, Lt.-Col. D. (Rhondda)

Wedgwood, Colonel Josiah C.

Williams, Dr. J. H. (Lianelly)

Young, Robert (Lancaster, Newton)

Weir, L. M.

Williams, T. (York, Don Valley)

Welsh, J. C.

Wilson, C. H. (Sheffield, Attercliffe)

TELLERS FOR THE NOES. —Mr. T. Griffiths and Mr. Morgan Jones.—Mr. T. Griffiths and Mr. Morgan Jones.

Wheatley, J.

Wilson, R. J. (Jarrow)

Whiteley, W.

Wright, W.

Clauses 19 ( Amendment as to sums raised by National Savings Certificates ), 20 ( Amendment of s. 16 of 1 & 2 Geo. 5, c. 48), and 22 ( Continuance during current financial year of s. 58 of 10 & 11 Geo. 5, c. 18) ordered to stand part of the Bill.

CLAUSE 23.—(Reduction of Corporation Profits Tax.)

(1) Part V of the Finance Act, 1920 (which imposes Corporation Profits Tax), shall have effect as if two-and-a-half per cent. of the taxable profits were substituted as the rate of duty for five per cent. of those profits for any accounting period between on or after the first day of July, nineteen hundred and twenty-three, and, in the case of an accounting period which began before but ends on or after that date, as if two-and-a-half per cent. were substituted for five per cent. as respects so much of the profits as may under this Section be apportioned to the part of the period beginning on the date aforesaid.

(2) Proviso ( b ) to Sub-section (1) of Section fifty-two of the Finance Act, 1920, shall have effect in relation to profits arising in an accounting period beginning on or after the first day of July, nineteen hundred and twenty-three, as though a reference to five per cent. of the balance of the profits of the accounting period were substituted for the reference of ten per cent. of the balance of the profits of the accounting period, and in the case of an accounting period of which part is before and part after the beginning of the first day of July, nineteen hundred and twenty-three, as though a reference of five per cent. were substituted for the reference to ten per cent. as respects so much of the balance of the profits as may, under the provisions of this Section, be apportioned to the later part of the period.

(3) Where part of an accounting period is before and part after the beginning of the first day of July, nineteen hundred and twentythree, the profits arising in that period, or the balance of those profits, as the case may require, shall be apportioned between the time up to and the time after the beginning of that day in proportion to the number of months or fractions of months before and after the beginning of that day respectively.

(4) An assessment (including an additional assessment) to Corporation Profits Tax in respect of the profits of any accounting period ending on any date after the commencement of this Act, or on any date not more than three years before the commencement of this Act, may be made at any time within six years after the end of the accounting period.

I beg to move to leave out the words

"have effect as if two-and-a-half per cent. of the taxable profits were substituted as the rate of duty for five per cent. of those profits for any accounting period beginning on or after the first day of July, nineteen hundred and twenty-three, and, in the case of an accounting period which began before but ends on or after that date, as if two-and-a-half per cent. were substituted for five per cent. as respects so much of the profits as may under this Section be apportioned to the part of the period beginning on the date aforesaid.

(2) Proviso ( b ) to Sub-section (1) of Section fifty-two of the Finance Act, 1920, shall have effect in relation to profits arising in an accounting period beginning on or after the first day of July, nineteen hundred and twenty-three, as though a reference to five per cent. of the balance of the profits of the accounting period were substituted for the reference to ten per cent. of the balance of the profits of the accounting period, and in the case of an accounting period of which part is before and part after the beginning of the first day of July, nineteen hundred and twenty-three, as though a reference to five per cent. were substituted for the reference to ten per cent. as respects so much of the balance of the profits as may, under the provisions of this Section, be apportioned to the later part of the period.

(3) Where part of an accounting period is before and part after the beginning of the first day of July, nineteen hundred and twenty-three, the profits arising in that period, or the balance of those profits, as the case may require, shall be apportioned between the time up to and the time after the beginning of that day in proportion to the number of months or fractions of months before and after the beginning of that day respectively."

and to insert instead thereof the words

"cease to have effect as from the thirty-first day of December, nineteen hundred and twenty-three."

This is an Amendment of an unusual nature because it would have the effect of giving the Chancellor more money than he has asked for. I am not going into the many arguments against the Corporation Profits Tax because I know the Secretary to the Treasury appreciates the evil nature of it as much as I do, but the relief which is purported to be given in the Bill by reducing it to 6d. is very largely fallacious or is to a considerable degree modified by the difficulty to which the taxpayers will be put by the different apportionments they will have to make under this Clause. Those who are liable to Corporation Profits Tax realise that they have no hope of any concessions which would materially affect the estimated receipts under the Budget for the present year, but they submit that they have proved a good case for getting rid of the tax as early as it may be possible to do so. The effect of my Amendment is that it should not be reduced as from 30th June but should be kept at 1s. and should be altogether abolished at the end of the year. It has been so wholeheartedly condemned by everyone who is any authority on taxation of this kind that the Government would not be doing anything that could be considered to be unfair if they now decided that the tax should not be levied beyond the end of the year. I hope the Government will meet us on this matter, and that, at any rate, they will sympathise with our view that the tax should be got rid of at the earliest possible moment.

I am afraid that I cannot accept this Amendment. I do not know whether my hon. Friend realises what the effect would be. In the current year the Corporation Profits Tax would be chargeable at the full rate of 1s. on the business community if the Amendment were adopted. If my hon. Friend went down to the City to-morrow morning after having made that suggestion he would find himself rather coldly received by his friends. When the Chancellor of the Exchequer made his Budget statement this was one of the concessions he made, in reducing the tax to 6d. in the £. Business men have made their arrangements on that assumption. Now the hon. Member comes forward and suggests that he should revoke his concession, and make the tax 1s. in the £, and finally get rid of the tax at the end of the year. The suggestion that the tax should be 1s. and not 6d. would be received with more than anger in the City of London.

My information is that it would be most unpopular. With regard to the second suggestion, that the tax should be got rid of at the end of the year, I would remind the hon. Member that it brings in a good deal of money. I am not going to defend the tax as the best form of tax. The last Chancellor of the Exchequer frankly admitted that he did not like it, and the present Prime Minister and Chancellor of the Exchequer does not like it. It was put on when we wanted money very badly. In the first year we got £650,000; in 1921–22, £17,500,000; last year, nearly £19,000,000, and the estimated revenue from it this year is £20,000,000. Towards the end of the Debate on the Finance Bill, late at night, it is impossible for the Financial Secretary to the Treasury to be asked to do away with a tax which produces so much money. I respectfully and humbly agree with the Chancellor of the Exchequer and the previous Chancellor of the Exchequer that it is not an ideal tax, but at the moment it is quite impossible to accept the Amendment.

Amendment negatived.

I beg to move, to leave out Sub-section (4), and to insert instead thereof a new Sub-section——

"(4) No Corporation Profits Tax shall be charged in respect of any profits of any company arising after the thirty-first day of December, nineteen hundred and twenty-three, and no period after the thirty-first day of December, nineteen hundred and twenty-three, shall be or be included in any accounting period, and the final accounting period of a company for the purpose of Corporation Profits Tax shall be the period which commences at the end of the accounting period last preceding the thirty-first day of December, nineteen hundred and twenty-three, and ends on the thirty-first day of December, nineteen hundred and twenty-three.

Where part of a period which but for this provision would have been an accounting period is after and part before the beginning of the first day of January, nineteen hundred and twenty-four, the total profits of that period shall be apportioned between the period up to and the period beginning on that date in proportion to the respective lengths of those periods and Corporation Profits Tax shall be charged only on so much of the profits as are apportioned to the period up to that date."

I think this is a much better Amendment. It seeks to leave the tax at the reduced rate of 6d., but to terminate the tax altogether at the end of this year. I do not agree with my right hon. Friend that the Government will lose anything by accepting this Amendment. No profits made beyond the 31st December, 1923, will affect the right hon. Gentleman's Budget for this reason. These profits would not come into the account for four or five months after the 31st of December. Therefore they cannot be dealt with by the Government in the Budget ending on the 31st March next year. As I am certain that the Government must do away with the Corporation Profits Tax in its next Budget, though I am not asking them to anticipate the Budget now, I think that they should now take the bull by the horn, close the thing down and let us get on with our business.

My hon. Friend, who is a great authority on finance, has made many speeches in the course of this Budget Debate dealing with great ability with hundreds of thousands and millions of pounds. He has got into the habit of thinking in these figures, and he talks of £10,000,000 as if it were nothing. He now asks us to abolish altogether, at the end of this year, this tax, which, whatever the position of the Budget may be next year, at sixpence in the £ will bring in from £10,000,000 to £12,000,000.

The hon. Member has no right to say that, or to anticipate that he will be a better prophet than the Chancellor of the Exchequer, and to tell the Committee the condition of the finance of the country in April, 1924. We may be able to give it up then, but we cannot give it up now without knowing what the financial position of the country will be in 1924.

I hope that the hon. Member for Farnham (Mr. A. M. Samuel) will have the courage of his convictions and go to a division, and if so I shall support him. The arguments against the Corporations Profits Tax were supported in the last Parliament, I think, by the Financial Secretary, and he went into the same Lobby with me. The Corporation Profits Tax has been condemned on all sides. It is a bad tax, as is shown by the fact that the Government are dropping half of it. As for the argument about losing £11,000,000 or £12,000,000, I wish that the Government would think about that occasionally when we draw attention to their extra- vagance on the Estimates. I could point out dozens of savings of £11,000,000 or £12,000,000 which could be made and are not made. This tax is injurious to the trade of the country, especially at a time when we should make all efforts to restore it, and I hope that we shall have a division.

As there is no chance of inducing the Government to accept the Amendment, I desire to withdraw it.

No.

Amendment negatived.

Clause ordered to stand part of the Bill.

Clauses 24 ( Provision as to inclusion of property outside Great Britain in property passing on the death of a deceased person, 57 and 58 Vict., c. 30) and 25 ( Construction, short title, application, and repeal, 39 and 40 Vict., c. 36) ordered to stand part of the Bill.

Motion made, and Question, "That the Chairman do report Progress, and ask leave to sit again," put, and agreed to.—[ Colonel Leslie Wilson. ]

Committee report Progress; to sit again upon Monday next.

Passenger Vessels (Liquor) Bill

Order for Second Reading read.

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

In the few minutes remaining before Eleven o'clock, I hope that this Bill, which is the quite sensible and logical sequel to action taken by another country, will meet with the approval of the House. The Bill would require steamships using the ports of this country to provide supplies of liquor for the passengers carried by those ships, and the crews working on those ships. In order that some hon. Member may second the Motion, and in the hope that we may get a Division before Eleven o'clock, I will not detain the House longer.

I beg to second the Motion.

I have provided myself with a copy of the Bill and I find there is, accord- ing to it, one mistake in what my hon. and gallant Friend the Mover said as to its purpose, but it is a matter which can easily be remedied in the Committee stage. The Bill, as at present drafted, does not provide for the supply of liquor to the crew of a vessel, but only for the passengers. The principal Clause provides that any passenger steamer using British ports shall provide and cause to be carried on board a sufficient quantity of wines, spirits, beer, cider and other drinks to supply the requirements of passengers. The general proposal contained in the Bill seems to be a very reasonable one and I think, if other countries take the step of saying that vessels using their ports shall not carry these commodities on board, we are entitled to provide that any vessel coming into our ports shall have these commodities. I think it is an extremely good Bill and I sincerely trust it will receive a Second Reading. The average Englishman, I am sure, would not wish, because of the action of a foreign power, that people should have to be treated differently in this respect when they are on board ship to the way in which they are treated at home.

I hope the House will not give a Second Reading to a Bill with which we are not fully conversant, and which, as has already been admitted by the right hon. Baronet, requires amendment in some respect. A Bill of this kind may involve, us in trouble and controversy with a great friendly Power, and it is not right at this late hour to try to force it through the House. I hope the House will not allow the Second Reading in such circumstances as these. Probably it was brought forward in the hope that hon. Members, being wearied by the discussions on the Finance Bill in Committee might be taken unawares. At bottom, it is really a kind of insult to the American people. Because they have had the courage to order their own licensing laws in the way they wish, they find themselves to a large extent up against the vested interest of the liquor trade in this country. Some of us imagine that a great deal more could have been done to bind the American people to us in ties of friendship had we sup- ported them in their desire for what they regard as a necessary social reform—even more than was done by the Prime Minister in connection with the loan. Any attempt on the part of this country to interfere with the laws and the desires of another country is bound to land us in considerable difficulty. Had Russia attempted anything like that in regard to this nation there would have been an outcry. We are constantly objecting to things which Russia is doing, but we have not the courage to protest in the case of America, and now an attempt is being made to stir up trouble in this way. I hope this Bill will not go through until we have had a full opportunity of considering it in all its bearings and making Amendments and until those responsible for it are able to present it in a proper way. They themselves have not made clear the intention of the Bill beyond the fact that it is a hit at the Prohibition party.

I did not intend to speak on this Bill until I heard the speech of the hon. Member who has just sat down. My original intention was more to appeal to the right hon. Baronet the Member for the City of London (Sir F. Banbury) to withdraw his support of this Bill on this ground, that he is perfectly well aware, as are all hon. Members here, that this Bill is only a Measure of retaliation—[HON. MEMBERS: "Hear, hear!"]—and that if this country is to bind itself by this precedent in future to indulge, on whatever occasion it may think necessary, in retaliatory legislation, there will be no end to the imbroglios in which we shall find our country involved. If upon every occasion on which a foreign country passes legislation to which we take exception we, in our turn, are to pass legislation which is purely retaliatory, which has no foundation, either in fact, economics, or in any other direction—legislation which, in fact, benefits no single citizen of this country, but is purely a matter of retaliation, and, may I say, with offence, in a rather childish manner—I think the right hon. Baronet is taking a line which I should be the last to approve.

May I point out to the hon. Member that I am not in the habit of taking things lying down. [HON. MEMBERS: "Hear, hear!"] If other countries attempt to impose restrictions on vessels belonging to my country, I am not inclined to fear whether or not something is going to happen, but I am going to do what Englishmen always have done——

I must ask hon. Members to allow the hon. Member for Willesden to proceed.

I should be the very last to suggest that the right hon. Baronet has ever been in the habit of taking things lying down. Every one will agree that there is no Member of the House who is less in the habit of taking any measure, whether of a foreign Power or of his political opponents in this country, lying down; but I would point out to him, I think with some force, that retaliatory legislation is not only possibly a little undignified, but that it never pays. [An HON. MEMBER: "What about France and the Ruhr?"] That might be an argument upon Franco-German relations, but a great many authorities in France admit now that retaliation does not pay. That, however, is not the point. If the right hon. Baronet is going to lend the great weight of his authority to a Measure of retaliating legislation, I consider—and my friends consider, also—that he will be setting an exceedingly bad example for the future.

As I have said, I should never have risen at all had it not been for the speech of the hon. Member for North Camberwell (Mr. Ammon). I think he attacked this Bill from rather a wrong angle. He said, at the beginning, for example, that the Bill was a deliberate insult to America. May I say, with due deference to him, that I do not know what his knowledge of America or her people is. Mine, owing to one circumstance and another is very considerable. Oddly enough this Bill, although it has received a certain amount of publicity in America, has, much less than other measures which this country has taken, been received with either derision or annoyance. It has, as a matter of fact, received very little comment, and I think if the hon. Member will look even at the evening papers to-night he will see that for once—and I think it is a rare occasion —the United States has received a measure of a distinctly retaliatory nature from this country with extreme forbearance. Quite contrary to the usual practice of the United States Government when dealing with this country, they are willing to enter into negotiations, and for that reason, and other reasons into which I will not enter now, I suggest that the hon. Member should not take that line in opposing this Bill, because, if he suggests to the American Government that they have been insulted, they may more likely take up the view that they have been insulted, because there is no Government in the world who are quicker to take offence than the American Government, as hon. Members are aware. I suggest to the hon. and gallant Member who moved the Second Reading, and to the right hon. Baronet, that they should withdraw the Bill. I yield to no one in my dislike of Measures which are aimed by a foreign Power against this country, but at the same time nothing on earth will ever convince me, and I feel that nothing will ever convince my hon. Friends here, that retaliatory measures can ever be effective or can in the long run pay this country in any way whatever, and if we are going to be led by the hon. and gallant Gentleman and the right hon. Baronet into this measure of retaliation, there is no limit to the precedents which are going to be set. In future, on every occasion when a tariff is set up, we must set up a similar tariff here, and we are going to be landed in a whole scheme of international pinpricks which will lead eventually to far more serious things. It is these small points of international differences and dislikes that lead eventually to real differences and to war, and I beg the right hon. Baronet and his Friends to withdraw this Measure.

I heard the very eloquent explanation by the Mover of the Second Reading, and he was kind enough to tell us nothing at all about it. Then I heard the right hon. Baronet the Member for the City of London (Sir F. Banbury), who told us in his first sentence that the Bill was a mistaken Bill in one direction, but that it can easily be altered.

All I said was that my hon. and gallant Friend who moved the Second Reading had made a mistake in saying that the Bill dealt with crews, as the Bill dealt only with passengers.

I think it is within the memory of hon. Members that the right hon. Baronet distinctly said that things could be altered at a later stage, and he was not speaking of the remarks of the hon. and gallant Member who moved the Second Reading, which obviously could not be altered. He was speaking of the Bill, so I venture again to state that the right hon. Baronet did admit that the Bill in parts was like the curate's egg. After all, a little Bill of this description, introduced at this hour, treated with too much levity, may provoke bad feeling. America has enough difficulties, and I think any student of international politics will admit that the American prohibition law is involving difficulties that probably the American Government never foresaw. Is it——

It being Eleven of the Clock the Debate stood adjourned.

Debate to be resumed To-morrow.

On a point of Order. Is an hon. Member whose name is not on the back of a Bill entitled to move it, and to give directions for its future handling? Neither the name of the hon. Gentleman who moved, nor the right hon. Baronet who seconded, are on the back of the Bill, although there are 12 or 14 names there.

The hon. and gallant Member should have raised that point before the hon. Member moved.

Is the hon. Gentleman whose name is not on the back of the Bill entitled to give directions as to the date on which the Bill should be put down for subsequent reading?

Nurses' Registration Act, 1919

Evidence of Training

9. The following evidence of adequate knowledge and experience shall be required from every person who makes application as an existing nurse, namely:

(1) In the case of an application for admission to the General part of the Register, either

( a ) A certificate that the applicant has had not less than three years' training before the 1st November, 1919, in a general hospital approved by the council for training having one or more resident medical officers, or in a Poor Law infirmary approved by the council for training which is recognised by the Minister of Health for the training of superintendent nurses;

Provided that a nurse who has been trained for not less than three years in such a general hospital not having any resident medical officer, or in such a Poor Law infirmary not recognised by the Minister of Health for the purposes aforesaid, may be admitted to the general part of the Register if she satisfies the council that she has adequate knowledge and experience of the nursing of the sick; or

( b ) Evidence that the applicant has had not less than one year's training in a hospital or infirmary approved by the council as aforesaid, together with evidence that she has subsequently been bona fide engaged in practice as a nurse in attendance on the sick for not less than two years before 1st November, 1919; or

( c ) A certificate that the applicant has had not less than two years' training in a general hospital for children approved by the council, together with evidence of one year's subsequent training in a general hospital or Poor Law infirmary approved by the council as aforesaid prior to the 1st November, 1919; or

( d ) A certificate that the applicant has had not less than two years' training in a hospital for infectious diseases approved by the council, together with evidence of one year's subsequent training in a general hospital or Poor Law infirmary approved by the council as aforesaid prior to the 1st November, 1919; or

( e ) A certificate that the applicant has had not less than two years' training in a hospital for women approved by the council, together with evidence of one year's subsequent training in a general hospital or Poor Law infirmary approved by the council as aforesaid prior to the 1st November, 1919; or

( f ) Evidence that the applicant is a superintendent or head nurse appointed by the Ministry of Health prior to the 1st November, 1919; and

( g ) Shall in any case be a female.

The following Notice of Motion stood on the Order Paper in the name of DR. CHAPPLE:—

That an humble Address be presented to His Majesty praying that the Amendment laid on the 28th day of May, 1923, of Rule 9 of Rules under The Nurses' Registration Act, 1919, be modified as follows:—

In Rule 9 (1) ( f ), at end, by inserting "or."

In Rule 9 (1), by inserting, at the end of paragraph ( g ), the following new paragraph,—

Or ( h ),—

Provided that the council may require the applicant, as a condition precedent to registration, to present herself for special inquiry before a medical officer, or officers, appointed by the council.

The Motion for an Address, as it appears on the Paper, is not in order, but the hon. Member for Dumfries (Dr. Chapple) has presented me with an alternative form, and I call upon him to move the Address in that form.

I beg to move

"That an humble Address be presented to His Majesty praying that the Amendment laid on the 28th day of May, 1923, of Rule 9 of Rules under The Nurses' Registration Act, 1919, be modified as follows:—

In line 2, by leaving out '1919,' and inserting '1916'; and by leaving out from 'who,' to the end of the Rule, and inserting 'produces the following evidences of knowledge and experience:—

Provided that the council may require the applicant, as a condition precedent to registration, to present herself for special inquiry before a medical officer, or officers, appointed by the council'."

This Address raises a very important and very grave problem, with which I will endeavor to deal as briefly as is consistent with clearness. The Nurses' Registration Act was passed in 1919, and made provision for existing nurses.

On a point of Order. I understood you, Sir, to say that this Motion is being moved in a different form. We are in a difficulty, that we do not know the form.

I will take care to read it out after the hon. Gentleman has moved it, but there is no substantial difference.

Is it in order to move a Motion of which the House is not in possession?

Of course, strictly, that is so; but it would be in order to move an Amendment. I think it would hardly be possible to rule this out of order on a matter of drafting.

We are in some difficulty on this side. Hon. Members, I think, are entitled to know what the hon. Gentleman is moving. Would he be good enough to read it out? It seems to me quite out of order. Is it possible for the hon. Member to give notice tonight and to have the redrafted Motion on the Paper to-morrow, so that Members may be fully acquainted with it?

The Hon. Gentleman was not called upon. If it be the wish of the House, it can be decided, after the hon. Member moves his Motion, "That the Debate be now adjourned." But I think we must first have the Question put.

I shall deal with the matter as briefly as possible. The matter is very simple, and the drafting change does not alter the substance of my Amendment.

The nurses Registration Act made provision first for the future training and future registration of nurses. Had it done what all Registration Acts have hitherto done——

May I ask, Mr. Deputy-Speaker, what is the position? I have moved that the Debate be adjourned?

When the Question is put, the hon. and gallant Gentleman will be in order in moving "That the Debate be adjourned," on the ground that the House is under a disability in not having the terms of the Motion on the Order Paper. At present the hon. Member for Dumfries is in possession of the House.

This Act makes provision for the future training and future registration of nurses. Many other Acts have made a similar provision for other callings. The Medical Act made provision for the training and registration of doctors, and the same thing was done in the case of the Act dealing with veterinary surgeons. Every Act of this kind which has been passed has made provision for those practising bona fide at the time the Act was passed. Every Act of this kind confers a status upon a certain class when it says that they shall be registered. By virtue of that it says that certain people are not registered and therefore they are not competent. It does something for those that are competent and excludes those that are not competent. It is not correct to say that you are simply conferring a privilege on one class. You are also' conferring a disability on the class that is excluded. Every Registration Act has laid it down that those who are bona fide qualified under the old regime and practising their calling shall not to be asked to suffer this disability and be disqualified from carrying on their calling.

May I ask the hon. Member, before entering into a discussion, to state what are the alterations in the proposal on the Paper which he wishes to make?

It is quite in order to put that question if the hon. Member for Dumfries gives way, but, at the same time, the hon. Member is also entitled to state it at his own time.

I am only anxious to make the thing clear. I take the existing Rule that has been laid on behalf of the General Nursing Council and leave out the date "1919" and I put in the date "1916." The second part of the Rule states that the "knowledge and experience" which an applicant has must be satisfactory to the Council. I simply state what that knowledge and experience should be instead of leaving it to the Council. I say that an applicant should present three certificates. The first, a certificate of good character; the second, one signed by a matron of a general hospital or infirmary and two medical men, stating that the applicant has had three years' in bona fide practice nursing the sick before the 1st November, 1919. The third certificate must be signed by a registered nurse and two medical men, one of whom shall be upon the staff of a general hospital, and show that the applicant is competent to nurse the sick both in surgery and medicine. I add the proviso that the Nursing Council can, if they are not satisfied with these certificates, call upon the applicant to present herself and have her certificate and character and qualifications inquired into by a medical officer or medical officers appointed by the Council, so that I take more precautions to prevent any applicant who is not qualified in every respect than were ever taken in any Registration Act before. No Act passed in this House or in any other House that I know of has ever demanded more or as much as I demand in this Amendment. This is to prevent any one who is not a qualified, as opposed to a trained, nurse and who has not been in practice for three years before November, 1919, and who cannot present all these certificates being on the register.

I want to emphasise that the Act has made provision already for this class of applicant. It sets out that there must be certificates of training and qualifications for future nurses, but that for existing nurses there need be no training. The Nursing Council has stipulated that there must be a year's training in hospital, and that excludes a large number of nurses. The Act requires that the General Council should make provision enabling persons who have not been trained to provide evidence of at least three years' practice of their profession before the 1st November, 1919, and to satisfy the Council as to their knowledge and experience. A large number of nurses are practising their profession who have not been trained in a general hospital, but they are satisfactory to the members of the medical profession, or to some of them, and to a large clientele of patients. Many of these have been brought before my notice and before the notice of the Medical Committee. I have in mind the case of a nurse who has been in practice for nine years and who holds a certificate from a medical man under whom she nursed. She was rejected and is not allowed on the register. This medical man says of her: "She has during the last two years nursed a number of difficult and important cases for me, and I cannot speak too highly of her surgical work. She is a nurse of the first rank. She takes a keen interest in her patients and looks after them well. I have much pleasure in recommending her." Another says of her. "It gives me great pleasure to give this testimonial in favour of this nurse. She is at present a special nurse in the sanatorium and she has been here for 18 months. I have formed a high opinion of her character and work. I know her to be thoroughly reliable and trustworthy. She is an excellent nurse, and pleasant to work with. She has shown much tact and kindliness in dealing with sanatorium patients of both sexes, and is a splendid disciplinarian. She has frequently proved a capable and conscientious substitute during my absence. I have no hesitation in recommending her."

She has been practising her profession bona fide, yet she cannot get on to the register, and she is for the future to be branded as incompetent. She is not allowed to wear a nurses' uniform or a nurse's badge. [An HON. MEMBER: "Shame."] Yes, it is a shame that the hon. Member opposite, having had his dinner, should treat this subject with such levity. There are nurses in this country who are going to be wronged, and hon. Members ought not to treat this subject with levity as they are now doing. The women of this country are entitled to better treatment.

To which hon. Member is the hon. Member referring? He is shaking his fist in this direction.

If it were your daughter who was concerned in what he is talking about, you would not treat the subject with such levity.

The hon. Member certainly should realise that it is a subject which should commend itself to the attention of the House. The Nursing College Council has expressed itself as in entire sympathy with the complaints of the nurses who are being denied the privilege of coming under the Act, and they respectfully urge that the door of admission to the first register should not be closed to any existing nurses who can show that they have bona fide acted as nurses of the sick for three years. In passing, I may point out that after the 14th of next July no nurses can be put on the first State register unless they have gone through a course of training in a general hospital.

The nurses for whom I am pleading have qualified under the old regime. Yet it is proposed to deprive them of the right to continue their work as before. As I have said, the Council of the Nursing College has entire sympathy with their complaints and

"begs respectfully to urge that the door of admission to the first State register should not be closed to nurses who can show that they have bona fide acted as nurses of the sick for three years before November, 1919, and that they possess adequate knowledge and experience of nursing the sick, however such knowledge and experience may have been acquired."

The Act claims that the knowledge and experience shall be acquired by training in a hospital, but my proposed Amendment lays it down that it does not matter how it was acquired. I only ask that we should be fair to these women. One objection that has been made is that it would open the door to the V.A.D., but it would do nothing of the kind. Any V.A.D. would have to provide certificates in medical as well as surgical nursing, and must have been in practice for three years before the 1st November, 1919, or she would have no chance of getting on to the register. I desire to emphasise the im- portance of that. This is for the existing nurses only and any weakening through it will soon pass away. I admit that these nurses are not so highly qualified as will be the case in the future, but provision has to be made, as has always been done in the past, for the bone fide workers who are in practice when the legislation is passed.

I beg to second the Motion.

The object of this Address is to remedy certain anomalies and injustices which have arisen owing to the sanctioning by the Minister of this Rule 9. As my hon. Friend has explained, in order that a nurse may get on the existing register she has to comply with certain specified conditions, and those who support this Address agree that the most stringent conditions possible should be imposed so far as the future is concerned. We do not desire in the least to lower the standard of nursing education; we desire to raise it. We do not mind how narrow the portal of entry is made so far as the future is concerned, but we do plead for justice and fairness for women who are extremely highly qualified in many respects, but who do not fulfil all the technical requirements of this Rule. One illustration that I will give will bring home to the House something of the character of the injustice and anomaly that is now being perpetrated. If any hon. Member were taken suddenly ill with, say, appendicitis, and were removed to almost any one of the well-known nursing homes in London, he would be attended almost certainly—at least, the chances of it would be 10 to 1—by a person who is not on the register and is not eligible under this Rule to go on the register. There you have a most extraordinary position. Again, if any hon. Member were to meet with an accident while motoring in the country, and were to be taken with a broken leg to the nearest cottage hospital, in all probability the matron of that hospital would be a person who is not on the register and is not eligible to be on it.

I suggest that, in these circumstances, it is monstrous to make a Rule of this sort. The fact stands out that in practically all the leading nursing homes in this city, and for that matter in most provincial cities, almost all the members of the nursing staffs there employed are women who do not and cannot fulfil the requirements of this Rule. May I give one illustration only, of the case of a nursing home, known to practically everyone in this House who has any connection with such affairs? It is a nursing home of the highest possible standing, to which leading medical men, surgeons and physicians, send their patients. The senior nurse in that institution is a person who had two years' training at the Poplar Women's Hospital, to commence with, some years ago, but, because that hospital is a special and not a general hospital, she does not fulfil the requirements of the Rule. She had five years' subsequent experience in that nursing home, she takes complete charge of the nursing home in the absence of the matron, is in complete charge of the operating theatre, assists the first surgeons of the land in the most delicate and difficult operations on the human body, and has under her charge and direction—and this is the extraordinary thing—registered nurses, although she herself is not eligible for the register. The position is really too ludicrous as it stands, and I do submit that some change ought to be sanctioned. The Address now before the House makes proposals whereby efficiency, character, and training of the necessary kind would be provided and safeguarded. This body of worthy noble women, doing a very fine service to humanity, should not be practically deprived of their livelihood, because that is really what it comes to. It is true that technically, and by the Rules, they are not prevented hereafter from practising their profession for gain, but that is only true in a very limited sense.

The Medical Committee of the House has already had brought to its notice the case of women who because they cannot get on the Register are not even eligible to apply for various nursing appointments. That condition of affairs is going to be increased. In five or six years' time in all probability a nurse who is not on the Register will find it practically impossible to gain a livelihood. Never before in the history of legislation has Parliament deliberately prevented persons in bona fide practice, with good experience and training, from earning a livelihood by creating a Registration Act. It has always allowed those persons, with proper safeguards, to go upon the Register, though it has guarded the entry of other persons by stringent safeguards, such as certificates of training and so on. I earnestly appeal to the House not to continue to inflict this injustice on a very worthy body of women.

I feel the House must be in some confusion as to what it is exactly that we are debating, more especially because of the Amendment of the Resolution which has been forced upon the hon. Member in order to put himself in order The modifications do not really alter the substance of the Motion, but merely put it into order by making it in the form of an Amendment of the Rule instead of the addition of a new Rule. The Rule I have approved, the new Rule which has been made by the General Nursing Council, is identical with the Motion in the name of the hon. and gallant Member for St. Albans (Lieut.-Colonel Fremantle), with the exception that in the third line of ( g )the date is 1st January, 1900, instead of 1910. This is a highly controversial matter. These controversies almost invariably arise when you try to stabilise a profession which hitherto has had no general standard, but there is this difference between the case of the nurses we are now considering and the cases which have previously been dealt with, such as the midwives or the dentists, in that under those provisions people could not practise the profession at all unless they came on the Register. That is not so under the Act which we are considering. There is nothing in the Act to prevent a nurse from practising her profession, even if she be not on the Register. There is a very definite distincion between these two cases. I am not prepared to deny that the fact that there are some nurses on the Register who are entitled to call themselves registered nurses, and others who are ineligible for the Register, does inflict some hardship upon certain nurses; but the hon. Member's Motion appears to me to go a great deal too far. He proposes in paragraph ( c ) that nurses who can obtain a certificate signed by a registered nurse and two medical men should have the right of entry upon the Register. That takes away from the General Nursing Council the discretion which is given to them under the Rule which I have approved or under the Motion in the name of the hon. Member for St. Albans.

I am not sure whether this Motion is not inconsistent with the Statute, but as the Chair has not raised that point, I do not want to press anything in the nature of a technicality. I prefer to argue the case upon its merits. It must be remembered that about 27,000 nurses have already applied for entry upon the Register. These nurses have applied for entry on the understanding that the conditions were those that have been laid down by the General Nursing Council. If it had been suggested to them at the time they made their application that it was possible to bring in a large number of other nurses under such a proposal as this—nurses who had had no hospital training, and as to whose qualifications they would probably have a good deal to say—I am not at all sure that they would have applied for registration. Certainly, if at the last moment, by a regulation of this kind, I am to interfere with the powers of the General Nursing Council, there would be, on the part of those who have already obtained entry upon the Register, an accusation that there had been a breach of faith and that the value of the Register to them, had been most seriously diminished by the importation of all these other nurses who were not up to their standard.

The Act actually makes provision for existing nurses. There can be no breach * of faith towards the nurses who are now upon the Register by doing justice to the other nurses for whom the Act makes special provision. The Act says that Rules shall be made

"enabling persons who, within a period of two years after the date on which the Rules to be made under the provisions of this paragraph first come into operation, make an application in that behalf (in this Act referred to as 'an existing nurse's application') to be admitted to the Register."

Yes, but those nurses have to be nurses who are covered by paragraph ( c ) of the hon. Member's Motion. He would say: "What can you have better than a certificate signed by two medical men?" I do not pronounce any opinion upon the value of a certificate of this kind given by two medical men.

But I am bound to take notice of the fact that many of these nurses do not consider that the certificate of a medical man is the best certificate of the competence of a nurse. They think that a medical man, particularly a surgeon, considers that the best nurse is the nurse who hands him the right thing at the right moment. But that is not the sole or even the most important qualification of a nurse, and, while I do not express any opinion on the point, I do say that a certificate by two medical men is not sufficiently satisfactory to a large body of these nurses. The result of a Motion of this kind would be to impose on the nurses already on the register and on the General Nursing Council a large number whom they do not consider as being of the right stamp. What effect that would have I do not profess to know, but I anticipate that it would give rise to grave discontent, and it might have an effect on the carrying out of the Act passed in 1919. I think that this goes altogether too far, but the House will realise from what I said a little while ago that I do realise that this is a genuine grievance on the part of many women who have been engaged in nursing but who have not had the training to enable them to comply with the regulations that have been laid down under the Act. Therefore I shall not be sorry to see some relaxation, and it seems to me that the proposal made by my hon. and gallant Friend the Member for St. Albans in the next Amendment would be a fair compromise which would cover most of the hard cases which were referred to by the hon. Member for Bermondsey.

Not one of the cases I referred to would be covered by that Amendment. Every nurse in the nursing home to which I referred has been engaged for less than 13 years. One has been engaged 12 years, another 11, and another 10, but everyone of them would be excluded by the Amendment of the hon. and gallant Member for St. Albans.

I am sorry to hear that. I have no doubt that there would still be a certain number of hard cases, but we have got to face the facts of the situation. We have got a strong feeling on the part of a large body of nurses already on the register, and I have come to the conclusion that the Amendment of the hon. and gallant Member for St. Albans is about as far as we could go with any hope of getting any practical result. Therefore, I am going to ask the House to reject this Motion and to accept the next one on the Paper.

The question is whether the Regulations, even with the Amendment which the right hon. Gentleman proposes to accept, comply with the provisions of the Statute. It seems to me that under the Regulations, even as amended, a qualification which was not contemplated by the Legislature when it passed the Statute is imported. Let me read Sub-section (2) of Clause 3 of the Nurses Registration Act. It says:

"Rules under this Section shall contain provisions—

( c ) enabling persons who within a period of two years after the date on which the rules to be made under the provisions of this paragraph first come into operation, make an application in that behalf (in this Act referred to as 'the existing nurses' application') to be admitted to the Register on producing evidence to the satisfaction of the Council——

The nature of the evidence is laid down in very specific terms.

——"that they are of good character, are of the prescribed age, are persons who were, for at least three years before the first day of November, 1919"——

exactly the terms which my hon. Friend lays down—

——" bona fide engaged in practice as nurses in attendance on the sick under conditions which appear to the Council to be satisfactory for the purposes of this provision, and have adequate knowledge and experience of the nursing of the sick."

There you have the conditions laid down, and, as I understand, a condition has been laid down by the Council, in regard to this provision, in which it is stated that a year's training in hospital is required. I contend that the paragraph which I have read to the House neither contains nor contemplates any such qualification. The qualification might, therefore, be held to be ultra vires. As this House has the right to deal with these Regulations it is the duty of the House to see that any Regulations made under this paragraph comply strictly with the provisions of the paragraph. My submission is that, in spite of what the Minister has said, the proposal contained in the prayer is strictly in accordance with the paragraph, that even with the Amendment of the hon. and gallant Member for St. Albans (Lieut.-Colonel Fremantle) which is next on the Paper the Rule is not brought into harmony with the paragraph, and that in the circumstances the House should accept the prayer which my hon. Friend has moved.

I wish to oppose the Motion. The hon. Member who moved the Prayer had not the advantage of being in the last Parliament, which passed this legislation, and I am afraid that he has not appreciated, the fact that the Act and the Rules made under it can be read. Rule 9 says:

"The following evidence of adequate knowledge and experience shall be required from every person who makes application as an existing nurse."

What is the first thing that the hon. Member puts down as evidence of adequate knowledge and experience? The first thing is a certificate of good character. There is a whole rule, Rule 8, which does nothing but provide for the good character of people who want to go on the Register. I think that the hon. Member has not read Rule 8. You may have a character good enough for an Archbishop or for a member of the Independent Liberal party and yet not be a person fit to look after the sick. His second point is that the certificate of a registered nurse and two medical men shall be sufficient evidence as to the capability of the nurse. The hon. Gentleman puts forward an extraordinary proposition. He says the Act lays down that there shall be no training for existing nurses. As one who was concerned in the initiation of this legislation, I should like to see the part of the Act where that is laid down.

Paragraph ( e ), which I read to the House, does not require training for existing nurses.

The hon. Member for Dumfries did not put it in that way. He said the Act laid down that there should be no training. What the Act says is that they should have adequate knowledge and experience of nursing the sick, and that it is for the General Nursing Council to decide what is adequate experience.

What I really said was, that the provision for the training of future nurses is already set out in the Act, but when it comes to the existing nurses, it deliberately leaves out the question of training. The reference of the Nursing Council to hospital training is imported against the meaning of the Subsection.

With great respect, what the hon. Member said was, that the Act laid down that there should be no training. The crux of the matter is the question of what is adequate knowledge of the nursing of the sick and who is to be the authority to decide. The hon. Member wants to set up an authority, and he sets up that authority in an Ollendorfian manner. It is to consist of two medical men and a registered nurse. It reminds one of the lessons in the old Ollendorf books. "Do you know German?" "No, but I have an uncle who plays the German flute." In this case the question is, "Have you adequate knowledge and experience?" And the answer, "No, but I know two medical men and a registered nurse who think I have." My submission is that the Prayer which stands in the name of the hon. Member for Dumfries does more credit to his heart than to his head. We know there are hard cases, but no matter how you make your laws there will be hard cases and hard cases make bad law. After a campaign which lasted over 30 years, this House raised nursing to the status of a profession and gave the name of "registered nurse" to a nurse who had certain qualifications. It is possible that there may be cases of hardship, but wherever you draw the line you will always have cases of hardship, and is it not a far greater hardship, in the case of the body of women who have put their names on the register, who now number 25,000 and who claim the proud title of registered nurse, to see the whole of their qualifications whittled away at the last moment by putting people on the register who are not fully competent? This Prayer is an amiable attempt to please everybody, but sentimental legislation must be paid for, and this is, at the expense of the public and of those who have secured the status of registered nurse.

I intervene for a few minutes only to meet if I can the point raised by the hon. and gallant Member who has just spoken. He appeals to us to sympathise with those who have already put their names on the register, and whose registration might be depreciated by the others coming on. There may be some case there, but will he not appreciate the needs of a large number of capable women who, a year or two ago, were nurses doing their work to the satisfaction of all concerned, and doing their work, many of them, during the War, and earning the highest possible testimony, but who did not happen to have a year's training in a general hospital. They may have had training in other institutions, just as good, in themselves, but not complying with that rule. Now, an Act of Parliament, that is intended to benefit the nursing profession, is brought in which will have this effect, that large numbers of these women, who deserve consideration, are going to be penalised, and we are now going to have a Nurses' Register, and a large number of nurses who are not recognised at all, but who are looked down upon as being inferior in their profession. I only ask the hon. Member to appreciate what a hardship is being done to these women.

I am sorry that the subject was received in the first instance with levity. It is a matter of great concern, and whilst these women's livelihood is not actually taken from them, there is no woman who will not smart under this suggestion that she is unequal to her work because she is denied her certificate. When the House found it necessary to bring in this Measure to register nurses, they had no right, in bringing about that necessary reform, to inflict hardship on a number of women whose qualifications were very high and who had done nothing to deserve this slur.

I think it incumbent on me to give one or two reasons why I differ from my professional colleagues who are supporting the Motion now before the House. I can do so very shortly, inasmuch as the Minister of Health has already stated the main reasons. If I had had a share in framing the Act of 1919, I should probably have taken the same view as the supporters of the Motion. None of them, nor I, had any share in drawing up and passing that Act. I quite agree that the best thing to do would have been to have introduced everybody up to the time of the passing of the Act, and to have let them go on as bona fide members of the profession. That would have had this extra advantage, as was the case in the Midwives Act, with which I have had a. great deal to do, that you would thereby have brought a whole lot of these persons, who are outside the profession, within the ambit and discipline of the profession. Unfortunately I have been unable to agree to that position in face of the present Act, because that ground is cut away from our feet by the decision of Parliament. Wrong as I think it was, that was the decision. The position is, to my mind, very clearly laid down in the particular Rule which has been so much quoted, although only partially quoted. It is perfectly true that Parliament laid down that Rules should be made for the introduction of the bona fide nurse, but it says that the conditions she has to fulfil are to be such as appear to the Nursing Council to be satisfactory. The position is surely this, and I do not think it has been mentioned so far. Parliament, under the Act, provided a democratic constitution for the new profession. A Provisional Council was first of all formed and nominated in various ways. It had to arrange for a democratic election of a Representative Council. That election has recently been held, and a newly-appointed democratic Representative Council is now in being. It is not to the point to say that that does not really represent the bona fide nurses. That is the democratic constitution, laid down by the will of Parliament. That constitution has resulted in the general Nursing Council being formed, who have got to approve the Rule and lay down the conditions. Therefore it entirely prevents the Motion now before the House being parried, because that general Nursing Council have definitely stated that they do not consider they can frame any Rule of this sort that would be satisfactory to them.

Therefore, we come back to asking if it be possible to frame any. Rule for bona fide nurses that is satisfactory to the present Nursing Council, representing mainly fully-trained nurses. Logically, I believe it would be impossible, but the Nursing Council have already been illogical, because they have passed a Rule saying that they will be satisfied with certain conditions for bona fide nurses as long as they practised before 1900. Now we come to a compromise. We have the fact that they have definitely laid it down that they can accept as satisfactory certain conditions for nurses who were bona fide in practice before 1900, and we believe that that can be extended to nurses who were bona fide in practice up to 1910, which is the substance of the Amendment standing in my name. Some 13 years have elapsed since 1910, and they have had a much wider experience.

I should like to throw this extra light upon the question as shown before the Medical Committee by the deputation from the Nursing Council. They clearly represented the point of view that they put the line at 1900 because before then they thought it was not sufficiently recognised that if a nurse was going in for a general nursing practice she must have a general nursing training. We asked: "Do you consider that after 1900 they had this general recognition?" and they said, "Yes," but in cross-examination I persuaded myself that they had not proved that it was the case in regard to nurses in the provinces, and especially in the smaller towns. I maintain that the training facilities were not sufficient in the early years of the present century, and that it was not generally recognised that nurses would one day have to show that they had had a general nursing training. I think, therefore, 1910 is a fair line to take up. If Parliament has decided on a democratic constitution for the nursing profession, and that constitution is represented by the present General Nursing Council, who have clearly declared that it is impossible for them to recognise as satisfactory such bona fide nurses as would come in after the year 1910, we cannot possibly pass this proposal that is before the House now.

Did the Minister of Health give us to understand that the Government Whips would not be put on?

I have listened to this Debate with a perfectly open mind, because I have no previous acquaintance with the subject, but I have found it impossible, as the discussion has gone forward, to support the position taken up by the Minister of Health. The case, as it has been stated, amounts to this, that there are a number of nurses who are qualified to nurse the sick from the point of view of the sick, and who are not incompetent for that duty. They are to be refused registration because of the professional feeling of the Nursing Council, and we all know what professional feeling is.

Not professional feeling, but professional judgment, as laid down by the Act.

12 M.

That is the same thing, and we all know what that sort of sentiment is. It is always rather narrow, and I confess I think it is only natural that it should be respected in regard to future nurses, but in respect of those whose livelihood now depends on being registered nurses, I think it is inflicting on them a most unreasonable hardship. It may be from the point of view of the sick she is sufficiently qualified, and should not be excluded merely because other nurses have a professional feeling on the subject, such as we know easily arises. We should not be guilty of injustice to persons entitled to look to us for justice, and, therefore, I shall myself vote in favour of the Motion.

Like others, I feel responsible to this House. I also think that what the Noble Lord has just said has considerable force. No doubt injustice will follow if the Amendment be not made. But I am very much impressed by the argument of the Minister of Health against that part of the proposal regarding the certificates granted by medical men and other registered nurses. That. I think, is thoroughly unsound, and therefore, for that reason alone, I oppose the first Motion on the Paper. It does seem to me that the House ought not to take action on this matter to-night in the present state of uncertainty, and I want to appeal to the Minister as to whether we should not have further inquiry made into this matter with a view to accepting an Amendment on the lines of that proposed by the hon. and gallant Gentleman the Member for St. Albans (Lieut.-Colonel Fremantle), where the alteration is in the date. If my hon. Friend's Motion is made effective at a much later date, and, say, 1914 inserted, that would take away a good deal of what the hon. Member opposite complains about; therefore, if postponement till to-morrow would enable the Minister to do this, or if he would make further inquiries, either through a Departmental Committee or a Select Committee of this House, it would be well, for I believe this question is worth further consideration. Whatever decision is taken to-night, if one is taken, considerable feeling will be aroused, and the matter will not be allowed to remain in whatever position we may put it.

Question put,

"That an humble Address be presented to His Majesty praying that the Amendment

laid on the 28th day of May, 1923, of Rule 9 of Rules under the Nurses' Registration Act, 1919, be modified as follows:

In line 2, by leaving out '1919,' and inserting '1916'; and by leaving out from 'who,' to the end of the Rule, and inserting 'produces the following evidences of knowledge and experience:

Provided that the council may require the applicant, as a condition precedent to registration, to present herself for special inquiry before a medical officer, or officers, appointed by the council.'"

The House divided: Ayes, 111; Noes, 81.

Division No. 213.]

AYES.

[12.7 a.m.

Adams, D.

Harbord, Arthur

Oliver, George Harold

Adamson, Rt. Hon. William

Hardie, George D.

Paling, W.

Adamson, W. M. (Staff., Cannock)

Hay, Captain J. P. (Cathcart)

Parker, H. (Hanley)

Ammon, Charles George

Hayday, Arthur

Parkinson, John Allen (Wigan)

Berkeley, Captain Reginald

Hayes, John Henry (Edge Hill)

Phillipps, Vivian

Bonwick, A.

Herriotts, J.

Potts, John S.

Bowerman, Rt. Hon. Charles W.

Hinds, John

Pringle, W. M. R.

Broad, F. A.

Hirst, G. H.

Rees, Sir Beddoe

Bromfield, William

Hodge, Lieut.-Col. J P. (Preston)

Richardson, Lt.-Col. Sir P. (Chertsey)

Brown, James (Ayr and Bute)

Hurd, Percy A.

Richardson, R. (Houghton-le-Spring)

Buchanan, G.

Jenkins, W. (Glamorgan, Neath)

Riley, Ben

Buckle, J.

John, William (Rhondda, West)

Ritson, J.

Burnie, Major J. (Bootle)

Johnston, Thomas (Stirling)

Robinson, W. C. (York, Elland)

Buxton, Charles (Accrington)

Johnstone, Harcourt (Willesden, East)

Saklatvala, S.

Buxton, Noel (Norfolk, North)

Jones, Henry Haydn (Merioneth)

Salter, Dr. A.

Cecil, Rt. Hon. Lord H. (Ox. Univ.)

Jones, J. J. (West Ham, Silvertown)

Sexton, James

Charleton, H. C.

Jones, Morgan (Caerphilly)

Smith, T. (Pontefract)

Clayton, G. C.

Jones, R. T. (Carnarvon)

Snell, Harry

Collins, Pat (Walsall)

Jones, T. I. Mardy (Pontypridd)

Stephen, Campbell

Cotts, Sir William Dingwall Mitchell

Jowett, F. W. (Bradford, East)

Sturrock, J. Leng

Cowan, D. M. (Scottish Universities)

Kirkwood, D.

Sullivan, J.

Davies, Rhys John (Westhoughton)

Lansbury, George

Thomson, T. (Middlesbrough, West)

Dudgeon, Major C. R.

Lawson, John James

Turner, Ben

Dunnico, H.

Leach, W.

Watson, W. M. (Dunfermline)

Ede, James Chuter

Lunn, William

Watts-Morgan, Lt.-Col. D. (Rhondda)

Edwards, C. (Monmouth, Bedwellty)

Macdonald, Sir Murdoch (Inverness)

Welsh, J. C.

Entwistle, Major C. F.

Maclean, Neil (Glasgow, Govan)

Wheatley, J.

Fairbairn, R. R.

March, S.

Whiteley, W.

Furness, G. J.

Marshall, Sir Arthur H.

Williams, Dr. J. H. (Lianelly)

Gosling, Harry

Martin, F. (Aberd'n & Kinc'dine, E.)

Williams, T. (York, Don Valley)

Graham, D. M. (Lanark, Hamilton)

Millar, J. D.

Wilson, C. H. (Sheffield, Attercliffe)

Gray, Frank (Oxford)

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

Wilson, R. J. (Jarrow)

Greenall, T.

Morel, E. D.

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

Grenfell, D. R. (Glamorgan)

Mosley, Oswald

Wright, W.

Grundy, T. W.

Murnin, H.

Young, Robert (Lancaster, Newton)

Hall, F. (York, W. R., Normanton)

Murray, John (Leeds, West)

Hall, G. H. (Merthyr Tydvil)

Murray, R. (Renfrew, Western)

TELLERS FOR THE AYES. —Dr. Chapple and Dr. Watts.—Dr. Chapple and Dr. Watts.

Hamilton, Sir R. (Orkney & Shetland)

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

NOES.

Agg-Gardner, Sir James Tynts

Dawson, Sir Philip

Morden, Col. W. Grant

Archer-Shee, Lieut.-Colonel Martin

Elliot, Captain Walter E. (Lanark)

Murchison, C. K.

Ashley, Lt.-Col. Wilfrid W.

Falle, Major Sir Bertram Godfray

Nail, Major Joseph

Astbury, Lieut.-Com. Frederick W.

Fawkes, Major F. H.

Nicholson, Brig.-Gen. J.(Westminster)

Baird, Rt. Hon. Sir John Lawrence

Ford, Patrick Johnston

Paget, T. G.

Balfour, George (Hampstead)

Foxcroft, Captain Charles Talbot

Parker, Owen (Kettering)

Bellairs, Commander Carlyon W.

Fraser, Major sir Keith

Pennefather, De Fonblanque

Bird, Sir William B. M. (Chichester)

Garland, C. S.

Penny, Frederick George

Blades, Sir George Rowland

Gilmour, Lt.-Col. Rt. Hon. Sir John

Percy, Lord Eustace (Hastings)

Bowyer, Captain G. E. W.

Grenfell, Edward C. (City of London)

Perkins, Colonel E. K.

Brass, Captain W.

Halstead, Major D.

Raeburn, Sir William H.

Bridgeman, Rt. Hon. William Clive

Hannon, Patrick Joseph Henry

Raine, W.

Brown, Brig.-Gen. Clifton (Newbury)

Hawke, John Anthony

Remnant, Sir James

Brown, Major D. C. (Hexham)

Hay, Major T. W. (Norfolk, South)

Samuel, Samuel (W'dsworth, Putney)

Brown, J. W. (Middlesbrough, E.)

Hennessy, Major J. R. G.

Sanders, Rt. Hon. Sir Robert A.

Bruton, Sir James

Herbert, Dennis (Hertford, Watford)

Sanderson, Sir Frank B.

Buckley, Lieut.-Colonel A.

Hogg, Rt. Hon. Sir D. (St. Marylebone)

Shepperson, E. W.

Cadogan, Major Edward

Holbrook, Sir Arthur Richard

Stott, Lt.-Col. W. H.

Cayzer, Sir C. (Chester, City)

Hopkins, John W. W.

Stuart, Lord C. Crichton-

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

Houfton, John Plowright

Tryon, Rt. Hon. George Clement

Chadwick, Sir Robert Burton

Inskip, Sir Thomas Walker H.

Wilson, Lt.-Col. Leslie O. (P'tsm'th, S.)

Chamberlain, Rt. Hon. N. (Ladywood)

Kinloch-Cooke, Sir Clement

Wise, Frederick

Colfox, Major Wm. Phillips

Lamb, J. Q.

Wolmer, Viscount

Cope, Major William

Lane-Fox, Lieut.-Colonel G. R.

Wood, Rt. Hon. Edward F. L. (Ripon)

Courthope, Lieut.-Col. George L.

Lloyd-Greame, Rt. Hon. Sir Philip

Yerburgh, R. D. T.

Craik, Rt. Hon. Sir Henry

Loyd, Arthur Thomas (Abingdon)

Crooke, J. Smedley (Deritend)

Manville, Edward

TELLERS FOR THE NOES. —Major Barnett and Lieut.-Colonel Fremantle.—Major Barnett and Lieut.-Colonel Fremantle.

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

Margesson, H. D. R.

Address to be presented by Privy Councillors or Members of His Majesty's Household.

The following Motion stood on the Order Paper in the name of Lieut.-Colonel FREMANTLE:

"That an humble Address be presented to His Majesty, in accordance with Section 3 (4) of the Nurses' Registration Act, 1919, praying that the proposed Amendment of Rule 9 by the General Nursing Council under Section 3 (2) ( c ) of that Act, which was laid upon the Table of this House by the Minister of Health on the 28th day of May, be modified by the substitution of the year 1910 for the year 1900, so as to read:

—After Rule 9 (1) (

( g ) In the case of a nurse who was at 1st November, 1919, engaged in actual practice, and who was also bona fide engaged in nursing prior to 1st January, 1910, and who does not comply with the above requirements, such special evidence of knowledge and experience as may be accepted by the Council in each individual case."

The following Motion stood on the Order Paper in the name of Major BARNETT:

"That a humble Address be presented to His Majesty praying that the proposed Amendment of Rule 9 of the Rules made under Section 3 of the Act by the addition of new paragraph (1) ( g ) may be annulled."

The decision of the House disposes of the other two Motions on the Order Paper.

The remaining Orders were read, and postponed.

It being after half-past Eleven of the Clock upon Wednesday evening, Mr. SPEAKER adjourned the House, without Question put, pursuant to the Standing Order.

Adjourned at Fourteen Minutes after Twelve o'Clock.