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Commons Chamber

Volume 172: debated on Tuesday 29 April 1924

House of Commons

Tuesday, April 29, 1924

The House—after the Adjournment on 16th April for the Easter Recess—met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

Private Business

PRIVATE BILLS [Lords] (Standing Orders not previously inquired into complied with),

MR. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That, in the case of the following Bills, originating in the Lords, and referred on the First Reading thereof, the Standing Orders not previously inquired into, which are applicable thereto, have been complied with, namely:—

Hackney and New College Bill [ Lords ]

Wakefield Corporation Bill [ Lords ]

Leeds Corporation Bill [ Lords ]

Bills to be read a Second time.

PROVISIONAL ORDER BILLS (Standing Orders applicable thereto complied with),

Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That, in the case of the following Bill, referred on the First Reading thereof, the Standing Orders which are applicable thereto have been complied with, namely:

Ministry of Health Provisional Orders (No. 4) Bill.

Bill to be read a Second time To-morrow.

PRIVATE BILL PETITIONS (Standing Orders not complied with),

Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That, in the case of the Petition for the following Bill, the Standing Orders have not been complied with, namely:

Newcastle-upon-Tyne and Gateshead Corporations (Bridge) Bill

Report referred to the Select Committee on Standing Orders.

Harrogate Corporation Bill,

London, Midland, and Scottish Railway Bill,

Read the Third time, and passed.

Great Western Railway (Additional Powers) Bill,

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

Morecambe Corporation Bill,

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

King's Lynn Docks and Railway Bill [ Lords ],

Read a Second time, and committed.

Oral Answers to Questions

Scotland

Uncompleted Housing Schemes

asked the Secretary for Scotland whether, in view of the fact that the period provided for carrying into effect the housing schemes in Scotland approved under the Housing, Town Planning, Etc. (Scotland), Act, 1919, which was extended to five instead of three years by the Assisted Housing Schemes Amendment Regulations (Scotland), 1921, made by the Scottish Board of Health with the approval of the Treasury, lapses on 19th August, 1924, and that there are stil1 about 3,500 of the houses allocated under schemes approved under the Act which are either not yet completed or commenced, the Scottish Board of Health will issue further Regulations and obtain Treasury sanction to extend further the period within which these houses may be completed?

In view of the Scottish Board of Health's power of extension of the time-limit under Article III of the Local Authorities (Assisted Housing Schemes) Regulations (Scotland), 1919, the issue of further Regulations is not considered necessary. Any application under that provision by a local authority who can show good cause why their scheme has not been completed by 19th August next will receive the favourable consideration of the Scottish Board of Health.

Is it not the case that the Regulations already issued had relation to the previous period, and is it not necessary to have a general Regulation passed to deal with the extension of the period?

Secondary Education, Arran

asked the Secretary for Scotland the result of his inquiries with regard to the failure of the local education authority to provide secondary education in the island of Arran?

I hope to be able to reply to the hon. Member's question shortly after the next meeting of the Education Authority for the County of Bute on 7th May next.

Fishermen (Provision of Gear)

asked the Secretary for Scotland whether he is now in a position to announce the policy of the Government in regard to the provision of gear for Scottish fishermen?

I regret that I am not yet able to announce a decision, but I hope to do so at an early date.

Can the right hon. Gentleman say now whether he will be able to make a definite statement before the opening of the summer herring fishing?

Is the right hon. Gentleman not aware that he promised before the House adjourned that he would give this urgent question his immediate consideration?

It is perfectly true that I said that I would give this matter my immediate consideration, and I have given my reply.

Is the right hon. Gentleman aware that the fishing season will start at the very end of next month, and, in fact, on the West Coast of Scotland, in the middle of next month, and can he not give a reply before then?

I am as well aware of the difficulties as my hon. and gallant Friend, and I will give a reply at as early a date as possible.

Rents Tribunal

asked the Undersecretary to the Scottish Board of Health if there are any working-class representatives on the Rent Tribunals which fixes the rentals for houses built under the Addison housing schemes?

The Rents Tribunal referred to consists of two members nominated by the Scottish Board of Health, one member nominated by the Convention of Royal Burghs, and one member nominated by the Association of County Councils in Scotland, and the Association of District Committees in Scotland jointly, and of a chairman appointed by the four members so nominated. The tribunal functions only in cases of difference of opinion between the Board and the local authority, by whom the rents fall to be fixed in the first instance, having regard to the rents of working-class houses in the locality. The members are appointed for their special knowledge of the matters referred to them for decision, and no attempt is made to secure the representation on the tribunal of any particular class.

In view of the fact that these are exclusively working-class houses, would it not be advisable that at least one person who has to dwell in such, or any similar, houses, should be a member of this tribunal?

I will consider, along with other Departments concerned, the question of amending the Local Authorities Assisted Housing Schemes Amending Regulations, Scotland, 1921, which prescribe the composition of the tribunal

Public Schools (Size of Classes)

asked the Secretary for Scotland the number of classes in public schools in Scotland containing between 50 and 60 pupils and over 60 pupils on the roll?

I have already provided the hon. Member with the full particulars he desires, but am arranging for the statement to be circulated in the OFFICIAL REPORT.

Following is the Statement:

( a ) According to the number on the Roll.) According to the number on the Roll.

( b ) According to the number of pupils habitually under the charge of one teacher.) According to the number of pupils habitually under the charge of one teacher.

Education Authority.

50 to 60 pupils.

More than 60 pupils.

50 to 60 pupils.

More than 60 pupils.

Aberdeen (Burgh)

144

nil

107

nil

Dundee (Burgh)

92

8

28

nil

Edinburgh (Burgh)

300

nil

270

nil

Glasgow (Burgh)

1,488

606

1,215

56

Aberdeenshire

36

nil

24

nil

Argyll

7

nil

7

nil

Ayr

190

5

162

2

Banff

30

3 *

24

3 *

Berwick

nil

nil

nil

nil

Bute

1

nil

nil

nil

Caithness

6

nil

5

nil

Clackmannan

14

nil

3

nil

Dumbarton

206

13

80

6

Dumfries

11

1

3

nil

East Lothian

18

nil

5

nil

Fife

119

1

41

nil

Forfar

9

1

6

nil

Inverness

4

nil

4

nil

Kincardine

nil

nil

nil

nil

Kinross

1

nil

nil

nil

Kirkcudbright

10

nil

7

nil

Lanark

495

164

273

23

Linlithgow

87

5

34

1

Midlothian

50

1

17

nil

Moray

10

nil

6

nil

Nairn

nil

nil

4

nil

Orkney

nil

nil

nil

nil

Peebles

1

nil

1

nil

Perth

5

nil

5

nil

Renfrewshire

334

49

284

25

Ross and Cromarty

nil

nil

nil

nil

Roxburgh

nil

nil

nil

nil

Selkirk

nil

nil

nil

nil

Shetland

nil

nil

nil

nil

Stirling

91

7

73

4

Sutherland

nil

nil

nil

nil

Wigtown

3

nil

3

nil

Total

3,762

864

2,691

120

* In Charlestown of Aberlour Episcopal School.In Charlestown of Aberlour Episcopal School.

Housing Subsidy

asked the Under-Secretary to the Scottish Board of Health if he is aware that the housing subsidy is being refused to individuals whose houses have been built a few superficial feet over the maximum fixed by his Department; that the entire subsidy is refused to a man whose house is five superficial feet over the maximum; and if, in view of the hardship a recent decision of his Department has caused and that his Department is penalising some men for increasing by a few feet the housing standard, he will have the whole matter reconsidered?

The maximum superficial area for houses eligible for subsidy under the Housing, etc., Act, 1923, is fixed by Statute. The matter is not, therefore, one in which I have any discretionary power.

May I ask whether the right hon. Gentleman has no power to make a pro rata reduction in the case where a man's house is five feet better than the houses laid down in this Regulation?

As I have already explained, I have no discretionary power in this matter. It is fixed by Statute.

Did not the Minister of Health state the other day in the House that no private enterprise houses had been built in Scotland under the 1923 Act?

Trade and Commerce

Dyestuffs

asked the President of the Board of Trade the names of the persons comprising the Advisory Committee which settles the conditions and the prices of sale to the British Dyestuffs Corporation of the reparation dyes received from Germany; whether any representatives of the British Dyestuffs Corporation are included in such Advisory Committee; and whether the Committee settles the prices at which the German reparation dyes are sold by the British Dyestuffs Corporation to the British traders?

The hon. Member appears to be under a misapprehension. No reparation dyestuffs, with the exception of samples for experimental purposes, are sold to the British Dyestuffs Corporation. The prices at which reparation dyestuffs are sold to merchants and consumers are fixed by the Board of Trade, with the help of an informal committee consisting of two representatives of the British Dyestuffs Corporation, as selling agents, and two representatives of the Colour Users Association.

asked the President of the Board of Trade the number of applications for licences to import dyestuffs received by the Advisory Licensing Committee for the three months ending 31st March, 1924; and the number of applications refused and outstanding in the same period?

The total number of applications for licences received during the three months ended on the 31st March was 1,420, to which must be added 17 outstanding at the beginning of the period. Of the total of 1,437, 1,152 were granted, in 56 cases applicants were referred to reparation supplies, 207 were refused, and 22 were outstanding at the end of the quarter.

Insurance (Irish Free State)

asked the President of the Board of Trade whether he is aware that policy holders in Irish insurance companies now residing in England view with grave concern the effect of the Industrial Assurance Act of 1923, which renders illegal all insurance done by Irish companies or societies in England, Scotland and Northern Ireland; that a large volume of insurance business is transacted in all parts of Ireland by English insurance companies; and whether he will consent to some reciprocal arrangements by which the British companies would be allowed to carry on their business as usual in the Free State, and that Free State companies or societies should be allowed to carry on their business as usual in England, Scotland and Northern Ireland?

I have been asked to reply. The Industrial Assurance Act, 1923, makes it illegal for a society or company not registered in England or Scotland to transact industrial assurance business in England or Scotland, and companies and societies situated in the Irish Free State are thereby debarred from transacting this class of business only in this country, though they are not excluded from operating in Northern Ireland. I am exploring the possibility of arriving at a reciprocal arrangement with the Irish Free State Government which would enable companies and societies in the Irish Free State to carry on industrial assurance business in this country.

Germany

Leather and Paper (Exports to Great Britain)

asked the President of the Board of Trade what were the average declared values, during the month of March, of German box and willow calf leather and German glazed and machine-glazed packing and wrapping paper imported into this country?

The average declared value of imported box and willow calf leather registered during March, 1924, as consigned from Germany was £30 12s. 5d. per cwt., and the average declared value of imported glazed and machine-glazed packing and wrapping paper registered as consigned from Germany during the same period was £l 2s. 2d. per cwt.

In view of that answer, I beg to give notice that I will refer to this matter on the Motion for the Adjournment this evening.

Bradford Goods (Payment)

asked the President of the Board of Trade what is the result of his inquiries into the alleged refusal of the German Government to allow Germans to buy sterling to pay for goods ordered and manufactured in Bradford?

His Majesty's Embassy at Berlin are being requested to furnish, a report on the matter, and I will communicate with the hon. Member as soon as this report is received.

Territorial Waters (Oil Pollution)

asked the President of the Board of Trade whether his attention has been drawn to the increasing nuisance arising from the fact that oil discharged from vessels outside the three-mile limit is not dispersed and eventually reaches the shore; and if he will reconsider existing Regulations on this subject with a view to abating the nuisance?

Complaints still reach the Board of Trade from time to time about the nuisance caused by oil discharged from vessels, but I cannot confirm the statement that the nuisance is an increasing one, and should be glad to receive any specific information which the hon. Member can supply. If the nuisance originates outside the three-mile limit it can only be dealt with effectively by international action, and as other nations are studying the question, it is hoped that in course of time it may be possible to arrive at an international agreement. In the meantime progress is being made in the invention and use of apparatus for separating the oil from the oily water in ships' tanks, and the more apparatus of this kind is used, the less occasion will there be for pumping out tanks outside territorial limits.

Is the right hon. Gentleman aware that in the last few months more gulls have been found killed off Dungeness from oil than ever before, and will he, therefore, make representations to the watchers to see that precautions are taken to prevent this serious damage to bird life?

Has the right hon. Gentleman ever tried bathing at fashionable East Coast resorts, to see how very severe is the oil nuisance?

British Army

Officers' Pay

asked the Secretary of State for War whether the reduction on the pay of officers of 5½ per cent, from 1st July next is, on the whole, pay or pension of officers or only on the increase granted since the War?

I would refer the hon. and gallant Member to the reply which I gave on the 14th instant to the hon. Member for Deritend (Mr. Smedley Crooke).

Troops in Egypt and Sudan

asked the Secretary of State for War what British troops are at present stationed in Egypt and the Sudan, respectively: whether he anticipates reducing the British troops in Egypt; what is the cost of the British troops in Egypt; and on whom this cost falls?

The approximate number of British troops borne on Army Estimates, at present stationed in Egypt and the Sudan is 10,000 and 950, respectively, and no reduction in the number of troops stationed in Egypt is at present con- templated. The estimated cost of the troops in Egypt, excluding the Sudan, for the year 1924–25 is, approximately, £2,500,000, towards which a payment of £150,000 is made by the Government of Egypt, the remaining cost falling on Army funds.

Are we to gain no advantage at all from the grant of self-government to Egypt, by being able to reduce the garrison there?

As a matter of fact, I think my hon. and gallant Friend will remember that a certain, I will not say substantial, but appreciable, reduction has been made, and I made the statement, in introducing the Army Estimate that for the moment no further reduction is contemplated.

Coal (Retail Prices)

asked the Secretary for Mines whether, in view of the unsatisfactory replies made by the London coal merchants to his representations about the discrepancy between pit-head and retail prices of household coal, he is now prepared to take further steps to prevent profiteering in the retail coal trade?

Since publishing the papers on this subject, I have been informed by the Coal Merchants' Federation that they propose to supplement their answers to my questions by furnishing me with certain figures. I shall await these figures before taking any further action.

Post Office

Imperial Wireless Committee

asked the Postmaster-General what decision has been come to with regard to the Donald Committee Report on the wireless question?

The report is still under consideration, but it is hoped that a decision will be reached shortly.

May I ask whether every Dominion has been heard from on this matter?

Accommodation, Rugby

asked the Postmaster-General whether he has received any further representations as to the inadequacy of the accommodation at the post office buildings at Rugby; and whether he is prepared to receive a deputation at an early date?

The answer to the first part of the question is in the negative, and, in the circumstances stated in my reply to the hon. Member's previous question on the 14th instant, I do not think that it would serve any useful purpose to receive a deputation on the subject.

Would it serve any useful purpose if the right hon. Gentleman would form part of the usual queue outside Rugby Post Office at an early date?

Inland Sample Post

asked the Postmaster-General whether his attention has been called to the statement, on page 17 of the Post Office Guide, that samples cannot be sent by inland post at any rates other than the letter and parcel rates; and whether, having regard to the great facilities offered by the pre-War sample post, he will consider the desirability of reintroducing such a service?

I regret that I cannot see my way to re-establish the inland sample post, which was abolished in 1897, and again, after a brief revival, in 1918. Its reintroduction at the present time would lead to a sacrifice of revenue which could not be justified; and, financial considerations apart, experience has shown that it is impossible to prevent the use of an inland sample post for articles of merchandise which are not samples at all, and for small parcels sent from one individual to another, except by imposing restrictive regulations which are both harassing to the public and very troublesome to the Post Office.

Broadcasting

asked the Postmaster-General whether it is proposed to remove the transmitting apparatus of 2 LO from Marconi House to the roof of a leading West End store; whether the removal had been designed to advertise the firm owning the store in question; what is the value placed upon the advertising value of the presence of the transmitting station; and whether the sum so paid will be wholly transferred to the revenue of the Broadcasting Company?

The use for broadcasting purposes of an existing wireless station at Marconi House was agreed to in 1922 as a temporary measure, in order to obviate delay in the introduction of the service; but its continued use for these purposes is open to serious objections, among which may be mentioned interference with the neighbouring Air Ministry Station in Kingsway. The broadcasting company propose to construct the permanent London station on the roof of a West End store, which was chosen not for the purpose of advertising the store in question, but as being, for technical reasons, the most suitable spot available within the limited area within which the station must be placed. The transmitting station will be private and customers of the stores will not normally be allowed to visit it. I understand that no payment in respect of any supposed advertising advantages is being made to the broadcasting company by the proprietors of the stores. At the request of the British Broadcasting Company, I am consulting the Broadcasting Board in the matter.

Sunday Facilities, Dulwich

asked the Postmaster-General whether he is aware that the reasonable needs of Dulwich are not served on Sundays by the present postal arrangements, owing to the fact that no post office whatever is open on Sundays; and whether, considering the inconvenience caused to a large number of people living in the densely populated district of Dulwich, he will at once take steps to remedy the complaint by giving instructions for one office to be opened in Dulwich on Sundays?

As I stated on the 27th March, in reply to a similar question from the hon. Member, I am aware that there is no post office open in Dulwich on Sunday. Telegraph facilities are, however, available at several railway stations during train times and several licensed stamp vendors' premises are open for the greater part of the day. These facilities compare not unfavourably with those afforded in similar districts of London, and are regarded as adequate to the reasonable needs of the locality.

Is the right hon. Gentleman aware that the people living in the Division are not of his opinion, that they are desirous of having other facilities, and will the right hon. Gentleman take into consideration that the stations to which he has referred are entirely outside Dulwich, and will he not consider the need of some improvement?

I may say that I am considering the whole situation; but I do not think, so far as Dulwich is concerned, it has any claim at present.

Far-Eastern Mails

asked the Postmaster-General the names of the steamship companies carrying His Majesty's mails from this country to Shanghai and intermediate ports and the amount of subsidy paid by the Government for carrying His Majesty's mails to these foreign ports?

The only contract mail service from this country to Shanghai and intermediate ports is by the steamships of the Peninsular and Oriental Steam Navigation Company; and the payment is included in the cost of the mail service to India, Ceylon, the Far East and Australasia which is shown under Sub-head E 4 in the Post Office Estimates, 1924–25.

asked the Post master-General if he will arrange for His Majesty's mails to be sent by the Siberian route to the Far East so that traders can get the advantage of a much quicker despatch?

I beg to refer the hon. Member to the reply which I gave to a similar question from him on the 15th of this month.

Mr. Speaker, I would like an answer to the question I put. Is the right hon. Gentleman aware that what he has said is not an answer to my present question, which is a question that has never been asked?

And I have replied by referring the hon. Gentleman to a previous reply.

Mr. F. C. Cates

asked the Postmaster-General whether his attention has been called to the case of Mr. F. C. Cates, an employé in the Post Office, who, after five hearings at the police court on a charge brought against him by the Post Office, was found not guilty, the Recorder of London expressing the opinion that the charge ought never to have been brought; and whether, seeing that he has reinstated Mr. Cates, he will give directions that he be compensated and refunded his legal expenses, amounting to £250?

I can only refer the hon. Member to the answer which I gave in reply to his question on the same subject on the 11th instant.

Is the right hon. Gentleman aware that his reply was that this unfortunate man had no legal claim against the Government Department, whereas obviously he had a claim against a private individual: seeing that he has undergone five trials, and seeing it was a, mistake on the right hon. Gentleman's Department, cannot he see his way to give him compensation?

I have gone very carefully into this matter, and, having regard to the facts, I should not feel justified in recommending any compensation in this case.

Will the right hon. Gentleman, having gone into the facts, say that the man has any equitable claim?

Before the right hon. Gentleman answers that, is he aware that he has admitted that the man was wrongly charged by reinstating him: does he not, therefore, think that he is under a moral obligation to pay the expenses of the trials and some compensation?

I consider that the Post Office was perfectly justified in taking the action they did against this man, and I am quite satisfied that if the facts were laid before the House hon. Members would approve of the action taken.

Is the right hon. Gentleman basing his decision upon considerations of law or equity?

I have based my decision upon a consideration of the facts of the case.

Does the right hon. Gentleman propose to retry a. case that has been tried before?

No; it is not a question of retrying the case. I am asked if I am prepared, having regard to the decision given, to pay this man's legal costs and to give him compensation. I say, having gone carefully into the facts of the case, that I should not be justified in doing so.

Transport

Motor Vehicles (Taxation)

asked the Minister of Transport whether, by reference from the Chancellor of the Exchequer, he has received from 11 national motor organisations, representing all classes of motor-vehicle owners and every branch of the motor-vehicle industry in Great Britain, a request that, in view of the forthcoming Finance Bill, a deputation may wait upon him for the purpose of discussing the question of a reversion to motor-spirit taxation from the present method and the equitable readjustment of the existing scale pending such reversion, respectively; and why he has refused to receive a deputation, in view of the fact that the long-delayed Report of the Departmental Committee will not be ready until June?

I have received the request referred to on the part of these motoring organisations whose alternative scheme of taxation is now being investigated by the Departmental Committee. These organisations are adequately represented on the Committee, and, in my view, no useful purpose would be served by receiving a deputation before I have had an opportunity of considering the Committee's Report.

Is the hon. Gentleman aware that the last Minister of Transport received a deputation on a similar subject; otherwise the recommendations of this Committee cannot come into force until January, 1926? This is to get them to come into force in January, 1925. Cannot the hon. Gentleman reeive a deputation?

If the hon. Gentleman cannot receive this deputation, will he take steps to accelerate the Report of this Committee, which has been outstanding about three years?

I am accelerating the Report of the Committee, but I should like to see the Report before I receive a deputation.

asked the Minister of Transport whether, having regard to the delay in the Report of the Departmental Committee on the taxation of motor vehicles, and the dissatisfaction of the motoring community with the manner in which the question of motor taxation has been dealt with by this Committee, he will consider the desirability of appointing a small Committee of Members of this House immediately to investigate the subject from the point of view of the unreasonably heavy taxation of the owners of light motor cars and motor cycles, the substantial excess of gross revenue over the amount which it was estimated should be produced from this source, and the inclusion of remedial legislation in the forthcoming Finance Bill?

The matters referred to in the hon. Member's question are far too complex for any Committee to investigate adequately, and to report upon, in time for their conclusions to be given effect to in this year's Finance Bill. The Departmental Committee's Report is in course of preparation, and will be available in June. In my view, it would be useless at this stage to set up another Committee to cover the same ground.

Cannot the hon. Gentleman do something to bring these Regulations into force on the 1st January, 1925?

Is it not a fact that difficulties arose in this matter owing to the differences of opinion between motor manufacturers and motor users, and will the hon. Gentleman take steps to ensure that the motor manufacturers do not prejudice the interests of the users?

Roads and Bridges (Maintenance)

asked the Minister of Transport the estimated total expenditure on the maintenance, improvement and cleansing of roads and bridges (including loan charges, but excluding expenditure out of loans) for England, Wales, and Scotland for the year 1921–22 and for the year 1922–23; what proportion of the total expenditure in each year ranked for assistance from the Road Fund; and what was the total sum contributed each year from the Road Fund towards such proportion?

The latest returns available, as supplied to the Ministry of Health and to the Scottish Office, are for the financial year 1920–21. The total expenditure for that year was £38,138,506 for England and Wales, and £3,418,531 for Scotland. It is not possible to state what proportion of this expenditure ranked for grants from the Road Fund. The total grants made from the Road Fund have been as follow:

Locomotives on Highways

asked the Minister of Transport whether he is aware of the inconvenience and unnecessary expense occasioned to the agricultural community by the continuance in operation of. Section 5 (1) ( b ) of the Locomotives Act, by which three men have to be in attendance on locomotives driven on the highways; and whether, since the Departmental Committee on the Taxation and Regulation of Road Vehicles recommended the repeal of that Section, he will introduce legislation for the purpose of carrying that recommendation into effect?

The recommendations of the Departmental Committee on this point, in common with many others contained in their Second Interim Report, are under consideration, with a view to the introduction of the necessary legislation as soon as an opportunity occurs.

Naval and Military Pensions and Grants

Appeals

asked the Minister of Pensions whether, in view of the large number of ex-service men and dependants of ex-service men who are not aware that the last date for appeal to the assessment appeal tribunal against their final awards was the 6th Februry, 1924, he will reconsider his decision and extend the date until the 30th June next?

The time limit referred to operates only in the case of one class of award to disabled men and does not affect dependants. I fear that as my right hon. Friend indicated in his reply of the 20th March on the same subject, the period of appeal is fixed by Statute, and legislation would be necessary to give effect to the suggestion. It is in the last resort for the tribunal to determine, subject to the statutory provisions, whether it is empowered to entertain an appeal. Cases in which it is claimed that the man was prejudiced in making his appeal within the statutory time limit by such unavoidable cause as, for example, illness, will be put to the tribunals. Otherwise, such cases can, so far as they are cases in which the last award proves to have been erroneous, be dealt with by way of amendment of the award on the lines indicated in the reply given by my right hon. Friend the hon. and gallant Member for East Rhondda.

Final Awards

asked the Minister of Pensions whether, in his recent proposals for revision of the pension Regulations, he proposes to consider the cases of ex-service men to whom final awards have been granted, but whose maladies in respect of such pensions have now become seriously worse; and whether he is aware that there are a very large number of such cases in which the ex-service men concerned are receiving no assistance whatever from the State?

Cases of the kind referred to are eligible for, and in fact receive, medical treatment from the Ministry, together (if necessary) with allowances. If, as the result of treatment, it should be ascertained that the award previously made was erroneously declared final, the case is dealt with by way of amendment of the award in the manner indicated in my reply of the 27th March to the hon. and gallant Member for East Rhondda (Lieut.-Colonel Watts-Morgan) of which I am sending the hon. Member a copy.

Is the hon. Gentleman aware that men who volunteered for service abroad received a definite promise that if they returned from the War they would not be penalised for having volunteered, and though the award has been made and said to be final men are penalised? Surely the country is going to see that the men are not penalised?

Agriculture

Unemployment Insurance

asked the Minister of Agriculture whether he has now considered the appointment of a Committee to inquire into the desirability or otherwise of bringing agricultural workers within the provisions of the Unemployment Insurance Act; and whether, in view of the smaller earnings and less average unemployment in the agricultural industry, he could arrange to provide for payment of smaller contributions by agricultural labourers than those paid at present by other workers under this Act?

The question of making some provision for the insurance of agricultural workers against unemployment is receiving consideration, but it is not proposed to bring them within the terms of the existing Unemployment Insurance Act.

Credits (Interest)

asked the Chancellor of the Exchequer if he can see his way to reduce the rate of interest on long-term loans under the Agricultural Credits Act, 1923, to 4 per cent., the rate charged on short-term loans?

I can add nothing to the answer I gave on the 27th March last to a similar question put to me by the right hon. Gentleman the Member for the Ross and Cromarty Division (Mr. Macpherson).

India (Sikh Gurdwaras and Shrines)

asked the Under-Secretary of State for India whether he can give the terms of reference of the Committee, over which Sir William Birdwood has been appointed as Chairman, which is to inquire into the religious grievances of the Sikhs?

The summary of the terms of reference is as follows:

"To ascertain the wishes of those competent to advise, and to report on the principles on which measures might now be framed for dealing with the administration and management of Sikh Gurdwaras and Shrines; also to report as to the best mode of dealing with the question of kirpans. "

Will the Committee go into this question of religious grievances?

Royal Air Force

Flying Accidents

asked the Under-Secretary of State for Air if he will state, in regard to Royal Air Force flying accidents during the period 1st January, 1920, to 31st March, 1924, the numbers attributed to engine failure, error of judgment on the part of the pilot, a combination of engine failure and pilot's error of judgment, defect in aircraft construction, defect in aircraft design, and other causes, respectively?

As the reply involves a list of figures, I will, with the hon. and gallant Member's permission, circulate it in the OFFICIAL REPORT.

Following is the reply:

The official records do not enable a classification of the causes of accidents exactly corresponding with that requested by the hon. and gallant Member to be made, but I think the following table will give him approximately the figures which he desires.

Causes.

Number of Accidents.

(1)

Engine or installation failure

90

(2)

Error of judgment

254

(3)

Combination of engine failure and error of judgment

40

(4)

Defect in aircraft construction

4

(5)

Defect in aircraft design

12

(6)

All other causes

73

Aircraft Engines (Maintenance)

asked the Undersecretary of State for Air whether, having regard to the comparative efficiency of aircraft engines maintained under the systems employed by established civil air transport undertakings, the Air Council have considered the advisability of arranging suitable courses in aero-engine maintenance to be undertaken by Royal Air Force personnel under the direction of such civil organizations?

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

Following is the reply :

I am unable to accept the hon. and gallant Member's premises that the Royal Air Force compares unfavourably with civil firms as regards efficiency of engine maintenance. The problem of such firms in maintaining with a handful of mechanics a very few aeroplanes carrying out routine flights from two or three aerodromes bears no relation to that of the Royal Air Force in maintaining many hundreds of aeroplanes at stations all over the world. The system of maintenance and inspection employed in the Royal Air Force is, as a matter of fact, very similar to that employed by civil firms, with which the officers of the Service side of the Air Ministry are fully acquainted. The problem of the Air Ministry, however, is to train mechanics in the large numbers required for the Royal Air Force, and very complete arrangements exist for doing this. Civil instructors are largely used, and, in the case of new types, valuable supplementary instruction is given to selected airmen by engine designing firms at their works. I am unable to regard the suggestion that air transport firms should be asked to co-operate in the training of airmen as either practicable or advantageous.

Welfare Superintendent, Farnborough

asked the Undersecretary of State for Air whether he has received representations from the staff of the Royal Aircraft establishment at Farnborough protesting against the substitution of Mr. Lawson Mackay, who is responsible for the welfare work; and what action he proposes to take in the matter?

Yes, Sir; the Secretary of State has received a strongly worded representation from the local branch of the Association of Ex-Service Civil Servants, protesting against the substitution of Mr. Mackay. After reviewing the case in all its aspects, the Secretary of State, in exercise of the discretion vested in him, has decided that no further step to replace this gentleman should be taken.

Aeronautical Research

asked the Undersecretary of State for Air whether any appointment has yet been made to the post of Director of Aeronautical Research contemplated under the proposal to reorganise the Department of Supply and Research; and, if not, what official is now directly responsible to the Air Member for Supply and Research in respect of aeronautical research questions?

The answer to the first part of the question is that no appointment has as yet been made to the post of Director of Scientific Research; to the second, that an established senior assist ant is at present temporarily responsible to the Air Member for Supply and Research for aeronautical research questions.

Ex-Service Men (Post Office)

The following question stood on the Order Paper in the name of Lieut.-Colonel Sir FREDERICK HALL:

30. To ask the Postmaster-General whether, in the event of the South-borough Committee's Report containing recommendations for the benefit and welfare of the ex-service civil servant which are adopted by the Civil Service as a whole, his Department will also take similar action and give to its employés the same benefits as are received by ex-service civil servants in other State Departments?

On a point of Order. Before this question is answered, may I submit that it is a hypothetical question and, therefore, out of order?

Cyprus

Financial Statement

asked the Secretary of State for the Colonies whether there is any surplus on the Budget of the Island of Cyprus; and whether any sums are found by the British Treasury towards the administration and expenses of the island, or whether any sums accrue to the British Treasury from the revenues of the island?

The current Estimates for the Island of Cyprus disclose a deficit of £43,000, which will be met from accumulated balances. The revenue includes the annual grant-in-aid of £50,000 voted by Parliament, and the expenditure of the sum of £92,800 to be paid to the Treasury under the heading of "Share of Cyprus of the Turkish Debt Charge."

Political Status

asked the Prime Minister whether the inhabitants of Cyprus have been consulted or will be consulted as to the future political status of the island?

I would refer the hon. and gallant Member to the answer given by the Prime Minister in reply to his question of the 14th April. I may add that no change would be made without due consideration of the wishes of the inhabitants.

Is my right hon. Friend aware that this is the part of my question which the Prime Minister did not answer, and I have put it down again as I did not wish to press him with a Supplementary Question at that time? Can the right hon. Gentleman inform me whether the inhabitants have been in any way consulted up to date?

When a question is on the Paper, especially for the second time, I would like to ask you, Mr. Speaker, whether a, Minister of the Crown requires still further notice before giving an answer?

Unemployment

Government Proposals

asked the Prime Minister whether the Government intend to bring forward proposals for dealing with unemployment, to supplement the remedial measures already taken, such as the increase of unemployment pay, the grant of uncovenanted benefits to aliens, and the removal of the restrictions under Part II of the Safeguarding of Industries Act; and if he will say when such proposals will be submitted to the House for consideration?

As has already been stated, the Government are attacking this problem from many sides and aspects and have already made some substantial contributions to its treatment. More will follow.

What are the "substantial contributions" to which the right hon. Gentleman has referred, and amongst the chief of them does he include uncovenanted benefit for aliens?

called upon Lieut.-Commander Kenworthy to put the next question on the paper.

On a point of Order, Mr. Speaker. May I remind you that my next question on the Paper will only be my third, because my first question was ruled out of Order.

Necessitous Areas

asked the Prime Minister whether, in view of the declaration of the Government that the charge for unemployment shall be met from national and not from local funds, he will state to what extent the steps taken by the Government to meet the claims of necessitous local authorities fulfil this obligation; and what are the respective proportions of the burden borne by local rates and by the national Exchequer?

Particulars as to the incidence of the burden of unemployment borne by the Exchequer and local authorities from the Armistice to March last are set out in Command Paper 2082. The burden of necessitous areas has been and is being diminished by the provision made in the Vote for the Relief of Unemployment, and the Measures either already passed into law or now before Parliament amending the Unemployment Insurance Scheme will further relieve the charges that would otherwise fall on the rates.

Is the right hon. Gentleman aware that none of the things referred to affect in any way the inequality of the incidence of this burden on different areas, and will the Government do something to equalise the burden of unemployment in these different areas?

Is the right hon. Gentleman aware that the so-called relief given under the Unemployment Insurance (No. 2) Bill cannot amount to more than about 4 per cent. of the expenditure of boards of guardians in necessitous areas?

Does the Unemployment Insurance (No. 2) Bill represent the full and complete policy of the Government in connection with necessitous areas?

The answer to my right hon. Friend's supplementary question is in the negative. So far as the claim put forward by the Noble Lord the Member for Hastings (Lord E. Percy) is concerned, we are giving it consideration. With reference to the supplementary question put by the hon. Member for West Middlesbrough (Mr. T. Thomson), I hold quite the contrary view.

Is the right ton. Gentleman aware that after due allowance has been made and will be made in this connection under the Unemployment Insurance (No. 2) Bill, so far as my division is concerned, we shall be left with a burden of £840,000?

Anglo-Russian Conference

asked the Prime Minister if he can make a statement to the House upon the progress of the negotiations between the Government and the representatives of Soviet Russia?

asked the Prime Minister whether he is now in a position to make any statement with regard to the recent conferences between himself and the Russian delegation?

I would refer the hon. Members to the reply which I gave to the hon. and gallant Member for Central Hull (Commander Kenworthy) on the 10th April. The official information which has been supplied to the Press in connection with the conference accurately represents the general progress of the negotiations.

Burney Airship Scheme

asked the Prime Minister whether he can now give the House any information with regard to the Burney airship scheme?

In view of the great importance of this matter to the country, may I ask whether, if this question be put down for this day week, I shall be likely to receive an answer?

Ministers' Newspaper Articles

asked the Prime Minister whether his attention has been called to a recorded decision of Mr. Bonar Law's Cabinet that Ministers of the Crown, while holding office, should refrain from writing articles for publica- tion in the Press; and whether he will adopt this practice in the case of the present Government?

The answer to the first part of the question is in the affirmative; as regards the remainder, it is impossible to distinguish between the application of the written and the spoken word, but Ministers will exercise their discretion in making public statements in any form.

Will newspaper articles written by Ministers in future be regarded as binding the Government as a whole?

May I ask whether the right hon. Gentleman realises the importance of the statement which he has just made? Do the Government abandon or maintain the doctrine of Cabinet responsibility?

Then I understand that if a Cabinet Minister write it will bind a Government just as much as if he speaks?

I am sorry, but the matter is of such consequence that I ask leave to press it further. Do not the Government apply to themselves the rule which has been applied by all previous Governments, that no Minister has the right to dissociate himself from the Government of which he is a Member, or to preach doctrines contrary to those of the Government of which he is a Member?

These supplementary questions are really broaching a new subject on which I am propounding no new doctrine. The question put to me related to signed newspaper articles, and I have answered it.

I wish to know whether the doctrine of Cabinet respon- sibility applies to newspaper articles as it does to speeches and every form of utterance, or whether for the first time the doctrine of Cabinet responsibility has been abandoned?

Before the right hon. Gentleman answers that question, may I ask if he recollects having heard of the "unauthorised programme" of 1884?

I would suggest that, if this subject is to be pursued further, it would be best done by putting a further considered question on the Paper.

Reparation Commission (Experts' Report)

asked the Prime Minister if he can state the attitude of the Allies as a whole towards the recommendations contained in the Experts' Report on the economic position of Germany as applied to the payment of reparations?

The attitude of His Majesty's Government and of the French, Belgian and Italian Governments is defined in the replies which the respective Governments have sent to the Reparation Commission's letter of the 17th April. I do not think I can usefully summarise or amplify such important documents, the wording of which has evidently been carefully chosen in every case. I would, therefore, refer the hon. Member to the full texts, which were issued for publication by the Reparation Commission on the 26th April. The replies of the Japanese and Jugo-Slav Governments are still awaited.

Inter-Allied Debts

asked the Chancellor of the Exchequer whether he will make a statement as to the payment of interest on Allied debts prior to the passing of the Budget, so that the British taxpayer may receive relief?

Perhaps the hon. Member will await my right hon. Friend's speech later to-day.

Is the hon. Gentleman aware of the grave anxiety in the minds of many English people as to the present state of non-payment?

I think my hon. Friend will find that that will be referred to in the Chancellor of the Exchequer's speech to-day. He has it constantly in view.

also asked the Chancellor of the Exchequer whether he will make any statement as to those portions of the War debts owing to Great Britain which are payable in dollar currency?

In general, War debts due to Great Britain by the Allies are due in sterling. But, under certain agreements of 1917, this country financed French purchases in neutral countries, and France agreed to repay these advances in dollars. The sum not so repaid amounts, including interest, to $42,811,742, the sterling equivalent of which, at par of exchange, is included in the published statements of French debt to this country.

For many reasons I cannot give the hon. Member a reply now, and I would ask him, if he thinks fit, to put that question down later, but the difficulties of reply are, I think, obvious.

Budget

Land Tax

asked the Chancellor of the Exchequer the total cost for the last three years, respectively, of the collection of the Land Tax?

The administration of the Land Tax is inseparably bound up with that of other Inland Revenue duties, especially the Income Tax, and it is not possible to apportion the total cost of assessment and collection between the various duties. The amount of fiscal machinery maintained for the special purpose of the Land Tax and involving expenditure is, however, very small.

Mckenna Duties

asked the Chancellor of the Exchequer if he can give the total amounts brought in by the McKenna Duties during the past two years?

The net amount collected in Great Britain and Northern Ireland under these duties, in the year ended 31st March, 1923, was £2,427,000. As regards the receipts for the year ended 31st March 1924, I must ask the hon. and gallant Member to defer his question until after the Budget statement.

Is the hon. Gentleman aware of the very great advantages that these duties have brought to this country?

On that I can promise a statement to-day, and, I should think, a good deal of discussion subsequently.

Can the hon. Gentleman say what proportion of this revenue was derived from the duty on pianos?

I cannot say that, but the information is readily available under a separate head.

Can the hon. Gentleman give any idea of the number of British working men whose employment will be affected?

Entertainments Duty

asked the Chancellor of the Exchequer whether he is aware that a certain picture palace has raised the price of the 9d. seats, plus tax, to 1s., plus tax, in anticipation of the Budget statement; and whether he will make it a condition of any reduction in the Entertainments Duty that the whole benefit shall accrue to the public?

The answer to the first part of the question is in the negative. As regards the latter part, I would ask my hon. Friend to await the Budget statement which my right hon. Friend will be making later to-day.

Income Tax

asked the Chancellor of the Exchequer the amount of Income Tax paid for each of the last three years by the farming industry?

The answer to this question is rather long and involves some figures, and, with the hon. and gallant Member's permission, I will circulate it in the OFFICIAL REPORT.

Following is the answer:

I regret that this information is not available as, under the present system of graduation and differentiation of the Income Tax, with personal allowances, deductions and reliefs appurtenant not to the various1 sources of income charged under each Schedule but to the total income of the taxpayer, the total yield cannot be divided between the respective Schedules.

The amount of actual income assessed under Schedule B during the last three years is as follows:

United Kingdom.

£

1920–21

66,423,671

1921–22

55,977,917

1922–23 (Estimate)

28,000,000

asked the Chancellor of the Exchequer if he will state, for the information of the House, and in view of the proposed retrospective legislation, the estimated amount of money involved by the general application of what is known as the McDonald-Shand judgment?

I am not very clear as to the hon. Member's meaning, but I take it that his inquiry is based upon the assumption that the judgment, to which he refers, would apply to an increase of or an addition to salary by way of War bonus. If, following that assumption—which I am quite unable to accept—it is sought to ascertain the resulting financial effect, if in every case War bonus charged under Schedule E on the single-year basis had up to 1921–22 (after which year the law was altered) been charged on the three years' average, I am not in a position to give a close estimate, but I can state that the tax upon the amount of income from War bonus which would thus have altogether escaped assessment would have amounted to several millions of pounds. It is not possible to state the amount that would be involved by claims which it might actually be competent now to make upon the foregoing assumption. As the hon. Member is no doubt aware, it would not be competent, under the law, to re-open Income Tax charges which became final and conclusive before the date of the judgment in question.

Bulgaria (Reparation Payments)

asked the Chancellor of the Exchequer if Bulgaria has paid any reparation payments; and, if so, to whom they have been paid?

The payments of 2,500,000 gold francs (approximately £100,000), each payable on 1st October, 1923, and 1st April, 1924, under the Protocol of 21st March, 1923, have been duly remitted by Bulgaria to the Reparation Commission through the Inter-Allied Commission at Sofia.

Is it the case that it has cost to collect this money more than the total amount to be Collected?

Obviously, I could not reply to a question of that kind without notice, but this is bound up with a great many other reparation payments, and I think it would be very difficult to disentangle it from the others.

Enemy Action Claims

asked the Chancellor of the Exchequer if he will consider the desirability of leaving to the free judgment of the House the increase of the proposed allocation of £300,000 for the benefit of the 25,000 belated claims put forward to the Reparation Claims Department; and whether be will state the aggregate value of the claims submitted by these men?

The answer to the first part of the question is in the negative. As regards the second part, the assessment of the claims cannot be completed until after 1st June, up to which date applications can still be received.

Will the Government consider increasing the amount of £300,000 if they do not leave it to the free vote of the House?

I have already told the hon. Member that £5,000,000 has been set aside, and this additional sum of £300,000 is purely an ex gratia payment, which we were under no legal obligation to make. I could not at this stage hold out any hope of any further allowance.

When will the inquiries be completed? They have been going on now for a very long time.

My right hon. Friend the President of the Board of Trade has made it clear that we are doing everything in our power to hasten a settlement, but, of course, these claims require a good deal of inquiry, and I am afraid some delay is inevitable.

Old Age Pensions (Income Tax)

asked the Financial Secretary to the Treasury whether he is aware that Ellen Buckland, of Wilton, near Ross, Herefordshire, aged 79 or 80, totally blind and an old age pensioner, was required to fill up a form for Income Tax; that a local magistrate wrote to the inspector of taxes in Hereford informing him that Miss Buckland was an old age pensioner, and that if the inspector referred to the pensions officer he would find that this statement was correct and that the old lady could not possibly be liable for Income Tax; and that the inspector of taxes on the 10th April replied to the effect that unless the return was forthcoming Income Tax would be deducted from her pension; and whether this is the usual practice of the Department?

The income, the exemption of which from Income Tax was under review, was not Miss Buckland's old age pension, but an annuity received by her, from which, under the general Income Tax law, Income Tax was legally deductible by the company paying it. It is not usual, however, to require a full statement of income in such a case as this, and I understand that the completion of the form, which was first issued to Miss Buckland in the absence of any knowledge of her circumstances, has been waived by the inspector of taxes.

Has the hon. Gentleman made inquiries, and after the facts were put by the local magistrate to the inspector did he write saying that tax would be deducted unless the forms were filled up, and does the hon. Gentleman think the inspector acted in this case in a reasonable manner?

I could not reply offhand without additional inquiry, but in any case I can assure the hon. Member that the matter is now all in order, and I do not think anything like this will occur again.

Slades Green Explosion

asked the Financial Secretary to the Treasury whether he has observed that in the Report on the Slades Green explosion no explanation has been given of the fact that the Disposal Board did not insist on the observance of the Explosives Act, and no recommendations are made as to the avoidance of such accidents in the future; and whether he will state what action he proposes to take in this matter?

I have been asked to reply. As regards the first part of the question, I would refer my hon. Friend to pages 11 and 12 of the Report, where the conditions under which the work at Slades Green was undertaken and the nature and adequacy of the safety regulations prescribed are fully discussed. As regards the remainder of the question, I would point out that, as my right hon. Friend stated in reply to the Noble Lord the Member for South Nottingham on 25th March, it has already been settled that any further work of the kind that may be entrusted to a private firm will be carried out under conditions which will bring it within the operation of the Explosives Acts. In the circumstances, my hon. Friend will probably agree that no further action by my Department now appears to be required.

I beg to give notice that I will raise this matter on the Adjournment of the House.

Government Surplus War Stores (Disposal)

asked the Financial Secretary to the Treasury what compensation, if any, the Disposal Board received from E. J. Smith and Company to release them from their contract to take over all brass at, approximately, £68 per ton; and what commission or compensation, if any, this firm received or claimed for the sale by the Disposal Board of this brass to the British Metal Corporation at about £24 per ton?

The contract prices stated in the hon. Member's question are not accurate. The compensation received by the Disposal Board was, approximately, £130,000. The compensation paid, or to be paid, to the firm is, approximately, £90,000. The matter is a complicated one and was gone into very fully by the Public Accounts Committee of this House last year, to Questions 3790–3846 of whose Report, ordered to be printed by the House on the 31st July last, I would refer the hon. Member.

Is the hon. Gentleman aware that this firm had never dealt in non-ferrous metals before this contract and that as soon as it was seen that they were not making enough out of it they defaulted, and then the Government not only forgave them this default, but gave them an additional, further and more remunerative contract?

I am not familiar with the details of these contracts. The difficulty here is that this was investigated by the Public Accounts Committee, whose Report was submitted to the House.

Will the hon. Gentleman have an open inquiry, not only into this, but other contracts which have been mentioned in the House?

asked the Financial Secretary to the Treasury at what price Audruicq and three other French depots were sold in 1920 and to whom; what compromise was ultimately made with the purchasers; what was the loss involved: and what was the nature of the financial guarantees to provide against such loss?

The original sale was made in December, 1920, the contract price being £1,650,000 and the purchasers Messrs. Aldridge and Hughes. As explained by the right hon. Member for Twickenham in his reply to the hon. Member on the 19th June last, difficulties arose in carrying out the contract, owing largely to the fall in the prices of metals and the depreciation of the French exchange. The modified arrangements made are fully explained in the reply of the 19th June last referred to above. The payments under the contract have not yet been completed, but a guarantee is held from two responsible business men for the due payment of the moneys yet to be received under the contract.

Has the hon. Gentleman looked into the question, or has he merely taken the answer given him by the officials? Is he aware that the Government of that day stated that they had taken over the disposal of these depots, and is he aware that some of the defaulting contractors are still dealing with goods in those depots?

Will the hon. Gentleman opposite tell us why he has not raised this question before?

Irish Boundary Conference

( by Private Notice ) asked the Secretary of State for the Colonies whether he has any information to give the House on the subject of the Irish Boundary Conference?

My right hon. Friend will recall that my predecessor received a request from the Government of the Irish Free State, dated the 19th of July last, for the constitution of the Boundary Commission under Article 12 of the Treaty. His Majesty's Government considered that the matter at issue ought, if possible, to be settled by agreement between the Government of the Irish Free State and of Northern Ireland, and, with that object in view, invited both Governments to a conference. The invitations were accepted, but the meeting of the conference was unavoidably delayed, first on account of the Imperial Conference, and then by the General Election.

When His Majesty's present advisers entered office on the 23rd January they found themselves in this matter in accord with the views taken by their predecessors. The invitation was renewed next day, and the conference met on the 1st February. On the following day it adjourned to meet again within 28 days, but owing to the serious illness of Sir James Craig no meeting took place till the 24th April. The discussions were conducted with the utmost goodwill on both sides, but on that date reached a decision that no settlement of the question by agreement between the two Governments was possible. In these circumstances, the boundaries between Northern Ireland and the rest of Ireland must be determined in accordance with Article 12 of the Treaty.

Is it not a fact that the boundaries between Northern and Southern Ireland were definitely fixed by the Act of 1920, and how, except by agreement, can a Statutory provision of that kind be set aside by any agreement entered into by other parties of which Northern Ireland was not a party?

The Leader of the Opposition was asked a similar question to that which I was asked to-day, and his answer on that occasion, namely, August last, was that the Irish Free State Act was passed into law by the Imperial Government and His Majesty's Government were bound thereby.

Is not this House bound by the Act which they passed in 1920, which definitely fixed the boundary and the area of Northern Ireland, as well as the definite assurances which were given by the then Prime Minister to the then Prime Minister of Northern Ireland.

The conference was conducted with the best of feeling on both sides, and both agreed that it would be undesirable to communicate to the public anything in the nature of the terms under discussion. I thought it was a, wise decision, and I do not propose to make any departure from it.

Statements have been made that legislation will be required to set up this Commission. Is that a fact?

All manner of foolish statements have been made, and I do not propose taking any notice of statements. I content myself with saying the Government will take the necessary steps to give effect to the letter and spirit of the Treaty.

Notices of Motion

Export Trade

To-morrow three weeks, to call attention to the present condition of our export trade, and to move a Resolution.—[ Sir A. Shirley Benn. ]

Health Services

To-morrow three weeks, to call attention to the necessity of co-ordinating health services of this country, and to move a Resolution.—[ Mr. Briant. ]

Liberal Party

To-morrow three weeks, to call attention to the hopeless condition of the Liberal party, and that on the 3rd August last the Leader of the Opposition said that the other party needed brains.—[ Mr. Toole, on behalf of Mr. Wallhead. ]

Business of the House

Ordered,

"That the Proceedings of the Committee of Ways and Means be exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House)."—[ The Prime Minister. ]

Financial Statement (1923–24)

Copy ordered, "of Statement of Revenue and Expenditure as laid before the House by Mr. Chancellor of the Exchequer when opening the Budget."—[ Mr. William Graham. ]

Copy presented accordingly; to lie upon the Table, and to be printed. [No. 60.]

Tenants Bill

Order for Second Reading upon Friday read, and discharged; Bill withdrawn.

Protection of Birds Bill,

"to provide for the further protection of birds," presented by Sir HARRY BRITTAIN; supported by Sir Douglas Newton, Sir Philip Sassoon, Lieut.-Commander Kenworthy, Mr. Foot, Mr. Mills and Mr. Wignall; to be read a Second time upon Monday next, and to be printed. [Bill 121.]

Orders of the Day

Ways and Means

Considered in Committee.

[Mr. ROBERT YOUNG in the Chair.]

Financial Statement

When the right hon. Gentleman the Member for Paisley (Mr. Asquith) opened his first Budget, which was the first Budget statement I had the privilege of hearing, he claimed the sympathy and indulgence of the Committee on the ground that he had only lately assumed office. If an old Parliamentarian and experienced Minister like the right hon. Gentleman, in those blissful days of a shilling Income Tax and a national expenditure only one-fifth of the amount for which I have to make provision to-day, felt it necessary to make such an appeal, surely I am entitled to the sympathy of the Committee in a far more abundant measure. I am the first Chancellor of the Exchequer, in this generation at least, who has taken on the responsibility of that office without previous Ministerial experience, and at the end of the financial year I had been in office only a very few weeks.

In another respect my position is very embarrassing. I have ex-Chancellors to the right of me and ex-Chancellors in front of me, and I would fain hope that, when in our later Debates, these big guns begin to volley and thunder, they will, out of the goodness of their hearts, have some compassion on my youth and inexperience. Shortly after I fixed this day for the opening of the Budget, I made a discovery which, at the moment, filled me with superstitious dread. It was on the 29th April, 15 years ago, that the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) introduced his famous Budget, and it was on the 29th April, 12 months later, after a constitutional struggle decided by an appeal to the country, that that Budget was passed into law. I would fain hope that these strange coincidences are not a sinister omen of the troubles that will fall upon my head.

4.0 P.M.

I am afraid it will be necessary for me, following the precedent of all my predecessors, to trouble the Committee with, I hope a not too long but I am afraid a rather wearisome recital of the figures of income and expenditure of last year and the present financial position of the country. The Committee is aware that there was a realised surplus on last year's account of £48,329,000. It is sometimes alleged that the large surpluses of recent years have been deliberately designed. I do not think that is the case. The right hon. Gentleman opposite a year ago referred to the difficulties of estimating income and expenditure owing to the dislocation of economic and social conditions caused by the War. I believe that these difficulties are gradually disappearing, and I hope that in the future we shall be able to estimate both income and expenditure with a greater approach to accuracy.

Revenue, 1923–24

Hon. Members are, I believe, in possession of the Blue Paper, from which they will be able to follow the figures that I propose to put forward. I have already referred to the realised surplus of last year. Under the existing law, that has gone to the repayment of Debt. Of this total surplus, £18,500,000 was due to excess revenue; nearly £28,000,000, or, to be exact, £27,750,000, was due to reduced expenditure; the balance was the surplus estimated on last year's Budget. In commenting upon these figures, I will take Customs and Excise first. This revenue, as a whole, produced a surplus of £7,178,000: £3,058,000 under Customs, and £4,120,000 under Excise. I think my predecessor is to be congratulated upon the remarkable accuracy of his Estimates where there were so many uncertain factors entering into the calculations. The results under nearly every head approximated closely to those of the Estimates, the surplus being mainly due to two items: spirits and tobacco. Spirits have exceeded the estimate by £6,000,000, and tobacco by nearly £2,000,000. The estimate for spirits last year assumed that the large postponement of clearances which took place before the last Budget would be repeated upon this occasion. I regret to say that the trade, apparently, had no very great faith in my good intentions in regard to the reduction of the duty upon spirits, and the expected postponement of clearances did not take place, with the result that £1,500,000 of revenue went to last year, and I am deprived of that sum in this year's income. Apart from this, however, the consumption was larger than anticipated. It did not continue to decline as in previous years, and, indeed, appears to have increased slightly since last autumn. That, no doubt, has been due to the long and cold winter and the prevalence of influenza, because I understand that whisky has obtained a considerable reputation as a specific for that complaint. As to tobacco, at the time of last year's Budget the consumption of tobacco appeared to be falling, but there has been a recovery during the year, and the estimate, as I have already said, has been exceeded by about £2,000,000. There was an increase of about £1,500,000 upon Motor Vehicle Duties, which is a testimony to the growing popularity of the motor.

I now turn to the Inland Revenue duties. With the exception of the Excess Profits Duty all the Inland Revenue duties have yielded very satisfactory results. Death Duties exceeded the estimate by £5,800,000, Stamp Duties by £1,570,000, Income Tax by £8,331,000, Super-tax by £2,640,000, and Corporation Profits Tax by £3,340,000. On the Excess Profits Duty there was a deficit of the full Budget Estimate of £12,000,000. The actual net result of the Inland Revenue duties was a surplus over the Budget estimate of £9,441,000.

Death Duties have again proved very productive, yielding £57,800,000 as compared with £56,871,000 in the previous year. The surplus on the Income Tax is attributable mainly to the arrears from the previous year having proved more productive than was expected; that on the Corporation Profits Tax is due to a higher level of corporate profits and partly to an improved rate of collection. The gross receipts from the Excess Profits Duty amounted to £23,500,000, or £6,500,000 less than was expected, and repayments amounted to £25,400,000, or £7,400,000 more than was expected.

The non-tax revenue approximated very closely to the Estimate. The main items of Special Receipts were:

£

Disposals

22,250,000

Shipping Liquidation

4,500,000

Food Liquidation

2,250,000

Repayment of advances to Southern Rhodesia

2,300,000

Gold salved from the wreck of the "Laurentic"

2,000,000

Expenditure, 1923–24

I now turn to the expenditure. The Consolidated Fund Services were estimated to cost £380,500,000, to which must be added £3,250,000 for relief of agricultural rates under the legislation of last Session. The total cost of these Services was, in fact, £383,000,000. The National Debt Services amounted to £347,250,000, of which £40,000,000 was sinking fund under last year's Act, against the £350,000.000 in the Estimate. The reduction was due to variations in the Treasury Bill interest rates. Nearly £1,000,000 more fell to be paid in respect of the Northern Ireland Residency Share owing to a reduction in the contribution of Northern Ireland towards Imperial Services. The payment to the Road Fund was nearly £1,500,000 more than was estimated, namely, £14,000,000 instead of £12,650,000.

The Supply Services required £405,800,000, against a total estimate, including Supplementary Estimates, of £449,289,000, and a Budget Estimate of £436,146,000. The Army required £43,500,000, against an estimate of £52,000,000; the Navy required £52,500,000, against an estimate of £58,000,000, and the Air Force required £9,500,000, against an estimate of £12,000,000. The Committee may be interested if I say a word as to how these savings are in the main accounted for. They are due to many causes: fall in prices, delay in commencing works services and war re-instatements, slow recruiting, changes in the programme with regard to the naval base at Singapore and to the Middle East, and many smaller items, unimportant in themselves, but aggregating a fairly considerable sum. Civil Services, excluding the Revenue Departments, required £239,250,000, against an original estimate of £251,500,000 and Supplementary Estimates of £13,000,000. The civil savings amounted to £12,250,000, spread over numerous Votes, and cannot be ascribed to any one cause.

National Debt

I now turn to the position of the National Debt. The amount issued last year for the redemption of Debt was just over £88,000,000, made up of the statutory Sinking Fund of £40,000,000, and of the realised surplus. Out of the £40,000,000 New Sinking Fund were provided the amounts for the statutory sinking fund on Conversion Loan, Victory Bonds and Funding Loan, for the principal of Terminable and Life annuities, and for the sinking fund for the repayment of the United States Government debt, together with the cash required for Victory and other Bonds surrendered for duties. Conversion Loan takes £13,500,000 a year; Funding Loan and Victory Bonds together another £4,500,000; £11,400,000 were required for the principal of the American debt and the penultimate repayment of the Pittman silver; and £7,250,000 for bonds surrendered for duties. After meeting all these, there remains a balance of £1,250,000, which was applied by the National Debt Commissioners in repaying 5 per cent. National War Bonds falling due in February last. The realised surplus of £48,000,000 was applied thus: £20,000,000 odd went to the redemption of 5 per cent. National War Bonds in February; £15,750,000 went to the reduction of outstanding Treasury Bills and £9,250,000 to two special transactions which I will explain in a moment. The remaining £3,250,000 went to the repayment of Ways and Means advances.

The Committee will recollect that, apart from the ordinary debt payments due to the United States Government, we owed certain sums for silver bought during the War under what is called the Pittman Act. These sums were to be repaid by instalments ending in the present year of between £6,000,000 and £7,000,000 a year. We were able- last year to anticipate the final payment, which was £6,712,148. That was due, as I said, during the present year, and so we have entirely wiped out our liability in respect of that. The other transaction was with Canada. At the end of last year we owed Canada about 70,000,000 dollars. We have repaid this sum mainly by surrendering Bonds for debts due by Canada to us, but also by a cash payment of £2,543,681.

The total dead weight Debt on the 31st March last was £7,680,484,000, as compared with £7,772,397,000 on the corresponding date of the preceding year. Hon. Members will find an analysis of this in Table IV of the Blue Paper which distinguishes between internal and external debt. The Floating Debt was reduced during the year by £35,500,000. A year ago this Floating Debt was, in round figures, £810,000,000, of which £616,000,000 represented Treasury Bills. On 31st March, 1924, the Floating Debt was £774,500,000, of which £588,250,000 was in Treasury Bills. I have explained that £15,750,000 of Treasury Bills were redeemed out of last year's surplus. The balance of £12,000,000 was replaced by Savings Certificates. The sale of Savings Certificates during the year produced £45,000,000, and the capital repaid (in addition to £7,000,000 accrued interest) was £33,000,000. The other main transaction of the year can be briefly described. Towards maturities of 5 per cent. War Bonds we, raised £32,658,000 by 4 per cent. Treasury Bonds and, as the Committee know, we have made a beginning with the large problem of dealing with 5 per cent. War Loan—over £2,000,000,000—which under the terms of the prospectus we have the option to pay off in 1929. The precise figures of the result are not yet available, but the Committee will be glad to learn that the amount converted is not less than £150,000,000.

In the current year, apart from renewing Floating Debt, including £588,000,000 Three Months Treasury Bills and from liabilities for Savings Certificates, we have to meet nearly £150,000,000 of maturing Bonds, £15,000,000 5 per cent. War Bonds due in October, and nearly £135,000,000 5¾ per cent. Exchequer Bonds due in February, 1925.

The Committee will realise that the burden of the Debt is a very heavy one, and I am afraid it must be for some years to come. I am glad to think therefore that a very authoritative Committee under the chairmanship of Lord Colwyn has been set up to advise us upon this matter. Meanwhile, it is clear that we must take every opportunity and devote as much of our resources as possible to the redemption of Debt. Some people seem to think that Debt reduction is something which confers no public advantage. I know a reduction of Is. in Income Tax is much more spectacular than paying off £50,000,000 of Debt. In the first case the relief is obvious, in the second it is indirect, but none the less real, and in fact is more widespread and penetrating in its benefits. Improvement in national credit in its turn regulates the rates at which money can be borrowed for industrial purposes. Moreover, in view of the great conversion schemes which we shall have to carry out in a not far distant future, the maintenance and improvement of British trade is a matter of the most vital importance.

I think we may derive encouragement from what as already been achieved. At the highest point in December, 1919, we had a dead weight Debt of approximately £8,000,000,000, of which £1,300,000,000 was external and £6,700,000,000 was internal debt, involving an annual interest charge of £345,000,000, after allowing £19,000,009 which at that date was in arrear for interest on the American Debt. We have now a nominal deadweight Debt at £7,680,000,000 involving an interest charge of £305,000,000 a year.

Our one real external debt now is that to the United States of £940,500,000 at par and certain market loans in America amounting to about £45,500,000 at par. We no longer owe any of our war debts contracted in Holland, Spain, Sweden, Norway, Switzerland, Argentine, Uruguay, Japan and Canada. We have reduced our internal debt by nearly £150,000,000, if we merely compare face value now with face value in December, 1919, but, as a matter of fact, by a very much greater sum when allowance is made for the increase in nominal value owing to the conversion, mainly in 1921–22, into new forms of debt carrying reduced interest. Allowing for all this I estimate the reduction of internal debt since December, 1919, at nearly £400,000,000. The most dangerous part of it, the Floating Debt, has been reduced by £575,000,000. On the same basis (that is, allowing for nominal additions) the total debt reduction, both external and internal, since December, 1919, has been over £650,000,000, practically the amount of the National Debt at the outbreak of the War. I think the Committee will agree that is a wonderful and highly creditable national achievement. In the figures throughout I have taken the foreign debt at par, and exclude premiums on War Bonds and interest accrued on Savings Certificates not presented for payment. As a net result we have reduced our annual interest charge by £40,000,000 a year and laid the foundations of an improvement in credit which I hope will still further reduce our burden in the future.

Moreover, we have large debts due to us. These loans were advanced by our own people to lend to our Allies, and we have had to pay interest upon them. The payment of this interest involves a very heavy burden indeed on the taxpayers of this country. When we receive interest on some part of these debts we may hope to be in a position to reduce our own indebtedness or taxation, much more rapidly than it would be possible for us to do out of our own resources.

Expenditure, 1924–25

Now I hope I may turn to a more interesting part of my statement—the accounts for this year. Hon. Members have already before them the estimates of the amounts required by the Supply Services. The total is £405,186,000, a reduction of £31,000,000 on last year's Budget Estimate and of £44,000,000 on last year's final Supply estimates. Those estimates were, of course, inherited by us from our predecessors, although we have our responsibility for them. It will be observed that the estimates for the total fighting services, namely £115,300,000, show a reduction of nearly £7,000,000 on last year's estimates, in spite of the expansion of the Air Force. The Consolidated Fund charges I put at £384,840,000. Of this £305,000,000 is debt interest, and £45,000,000, in accordance with the provision of last year's Finance Act, is for new sinking fund. The net increase in the Consolidated Fund charges, as compared with last year's Budget figure, is due to increased local taxation grants owing to the Agricultural Rates Act, contribution and to increased payments to the Road Fund. The total expenditure I estimate at £790,026,000.

Revenue, 1924–25

In estimating the Revenue I have felt justified in being rather optimistic as to the future. Unemployment, though still very bad, is decreasing; there are hopes of a new settlement in Europe. Our trade is now showing flickering, but hopeful, signs of recovery.

The Customs and Excise Revenue in particular expands or contracts in accordance with the general state of trade. There is, as I have said, an improvement in industrial conditions. Wages are showing a tendency to rise, and unemployment to fall. This should lead to a higher consumption of dutiable articles. I am, accordingly, estimating, on the present basis of taxation, for a Customs Revenue of £127,500,000 and an Excise Revenue of £140,000,000, making £267,500,000 in all. That is £428,000 less than the receipts of last year; but, after making all necessary corrections in order to compare like with like, the estimate for this year is about £6,000,000 higher than the receipts for last year. This represents a rise of 2¼ per cent. Motor Vehicle Duties I expect to produce about £15,600,000.

Now take Inland Revenue. I estimate the total receipts at £436,000,000, which compares with last year's estimate of £426,000,000 and a realised receipt of £435,441,000. I am feeling this year the full effect of the reduction of 6d. in the £ in the Income Tax made last year, and the fall in the average profits to be assessed will cause an additional loss, as this year I am losing the high profit of four years ago, but I anticipate a continuance of the recent improvement in the rate of collection, which I hope will go far to counterbalance these adverse factors. The lower rate of Corporation Profits Tax will affect the majority of the assessments to be made this year, but there are considerable arrears to be collected at the old rates. The winding up of the Excess Profits Duty is proceeding very slowly, and there are still considerable arrears out of which it is hoped to recover a net yield, though this is one of the most uncertain items in the Revenue Accounts.

The details of Inland Revenue Estimates on the existing basis of taxation are as follow:

£

Estate Duties

56,000,000

Stamps

21,000,000

Land Tax, Inhabited House Duty and Mineral Rights Duty

3,000,000

£

Income Tax

265,000,000

Super-tax

61,000,000

Excess Profits Duty

8,000,000

Corporation Profits Tax

22,000,000

That makes a total for Inland Revenue Duties of £436,000,000. The total Tax Revenue therefore would be £719,100,000, which would be £19,000,000 more than last year's estimate, and £1,000,000 more than last year's receipts. In estimating the Inland Revenue there is one small item of fairly regular income of which I have taken no account. Hon. Members will see in the newspapers sometimes a small paragraph announcing the receipt by the Chancellor of the Exchequer from A, B, C or X, Y, Z of conscience money. These announcements are usually accompanied by nothing more than an intimation that the remittances are to be placed to the revenue, but sometimes there are very interesting letters. We recently had one from a poor widow enclosing 1s. 9d., and she explained that during the War, when milk was very difficult to get, she stole a tin of condensed milk from an Army canteen. The matter had lain upon her conscience ever since. She had struggled hard to save the money, and at last she succeeded. I think that we might say of that, in the words of a great English writer, the recording angel which registered that woman's crime, when he heard of her action, would drop a tear upon the record and blot it out for ever. Very different indeed is the letter from a man who wrote:

"I once defrauded you of £5. Remorse gnaws my conscience. I am sending you 5s. When remorse gnaws again I will send you some more."

Non-tax Revenue I estimate as follows:

£

Post Office

54,000,000

Crown Lands

900,000

Interest on Sundry Loans

12,250,000

Miscellaneous Ordinary Receipts

11,850,000

From special receipts I hope to get £30,000,000, the bulk of which will come from the receipts from Disposals and from the balance in hand of Reparation Moneys. This would be the last year in which anything substantial can be looked for from War Disposals. I have made no allowance for the receipt of additional Reparations payments. I hope that they will be received during the year. If so, they must be regarded as something in the nature of a windfall, and I can assure the Committee that I shall find many admirable and useful purposes to which to apply them.

The total non-tax Revenue is thus £109,000,000. The total Revenue, therefore, on the existing basis of taxation, will amount to £828,100,000. This leaves me with a surplus of £38,074,000.

Imperial Preference

I am going to ask the Committee to be patient for a few moments, before I tell them how I propose to deal with that surplus, while I refer to another important matter, namely, the proposals of the late Government relating to the extension of the present system of Tariff Preference. It will be within the recollection of the Committee that, at the recent Imperial Economic Conference, the late Government submitted certain proposals on this matter, and, as a result of the discussion which took place at that Conference, these proposals were subsequently added to. A pledge was given to the Dominions and Colonies to submit these proposals to this Parliament, a pledge which, in the words of the Prime Minister,

"we intend to fulfil to the last letter and to the fullest extent."

Subsequently there was an appeal to the country on grounds chosen, not by us, but by the late Government, and during the General Election these proposals for increasing, and adding to, the existing preferences, were brought prominently before the electorate. The result of that appeal is well known, and, obviously, it cannot be ignored. But apart from that, we, on this side of the House, though not for a single moment admitting that we are one whit behind hon. Gentlemen opposite in our desire to promote the best interests of the Empire, have never believed that the interests of the Empire would be best served in the long run by a system of tariff preference, and we have expressed those views in this House by our votes on many occasions.

In these circumstances the Government are unable to endorse the proposals of their predecessors. We greatly regret any disappointment that may be caused to the Dominions and Colonies, but for that disappointment not this but the late Government must bear the responsibility. There is one of these proposals to which. I want to make specific reference. The late Government stated that they were ready to guarantee that if the sugar duty were reduced, the preference should, for a period of 10 years, not fall with it, but should be maintained at the present rate of nearly ½d. per lb., that is, so long as the duty on foreign sugar did not fall below that level. This proposal followed a declaration made by Mr. Churchill, when he was Secretary of State for the Colonies in 1922, that for a period of 10 years preference would be continued on the articles then entitled to it. No Government, in our opinion, should attempt to bind Parliament or future Governments for a period of years upon such a controversial issue as tariff preference. The only result could be to raise hopes which are bound sooner or later to be frustrated.

I think it is important, therefore, to make our position quite clear. We do not propose to endorse or to offer any kind of guarantee in this connection over a period of years. All that we can say is that, so long as we remain in office, we do not propose, in all the circumstances, to ask Parliament to abolish the preferences now accorded, which, we suggest, should remain on their existing statutory basis. But we wish it to be clearly understood that we reserve full liberty to propose to Parliament, whenever we deem it expedient in the general or financial interest, the reduction or the abolition of the duties on all the commodities to which preference now applies. It will be clear from what I have just said that we cannot take the responsibility of putting down Ways and Means Resolutions covering those proposals of the late Government which involve the imposition of new or increased duties. But, if the matter were left there, it would follow that, so far as the Budget Debates were concerned, the discussions of necessity would be confined to those proposals which involve a reduction of taxation on Empire products. That would be unsatisfactory.

The Government intend, therefore, to allot a day, before the Committee stage of the Finance Bill, for a discussion of the preference proposals of the late Government at the Imperial Economic Conference. We shall place on the Paper a Resolution or Resolutions, declaratory in character, dealing with those proposals, in order to give to the House an opportunity of full discussion, apart altogether from the Budget proposals, and an opportunity for a free and unfettered decision. If the House should decide to adopt any of these proposals, we will, of course, make provision in the Finance Bill.

There are two matters arising out of the conclusions of the Imperial Economic Conference which raise a question of Inland Revenue legislation. First, there is the Resolution relating to the immunity from taxation of State enterprises.

I do not understand whether the right hon. Gentleman included the increased preferences which could be given by reduction of taxation instead of by the imposition of duty?

I mean that the whole of the proposals of the Economic Conference, dealing with Preference, should be submitted to the House, and that the House should have an opportunity of expressing its views upon them.

First, there is the proposal relating to the immunity from taxation of State enterprises. It was suggested that the Government of any part of the Empire, when carrying on trade operations in any other part of the Empire, should be liable to the taxation which was in operation in that part of the Empire in which it traded. The establishment of this principle was to be the preliminary to negotiations between the Empire and Foreign States for an international arrangement of the same kind. That Resolution raises a very interesting, as well as a very important, international question, and, though I see no reason to dissent from the course proposed, I would like more time to consider it. The Resolution of the Conference was without prejudice to the right of State and Provincial Governments in Federal Dominions, and, although I have no reason to expect that they would take any exception to it, still, I think the postponement would give us an opportunity of ascertaining the views of the various Dominions upon this aspect of the question. Therefore, I propose to postpone that question until next year. The second is a smaller matter. It deals with the reciprocal arrangements which were made last year with foreign nations for the avoidance of double taxation on shipping. I hope to include in the Finance Bill proposals which will give effect to a similar arrangement for the Dominions. It is understood, of course, that this legislation will be of a permissive character.

Motor Vehicle Duties

The Committee has been very patient in awaiting the allocation of the surplus. I am afraid that I must still mention one or two minor matters. I propose to make certain small modifications with regard to Motor Vehicle licences. The Committee upon the Taxation of Mechanically-Propelled Vehicles has not yet presented its final Report, but it has made two interim recommendations, and these I propose to adopt. The first is that the owner of a licence should be entitled to surrender it at any time and to obtain a refund for each complete calendar month unexpired, on the payment of a small surrender fee. The other recommendation is that the surcharge on quarterly licences, which is now 20 per cent., should be reduced to 10 per cent. I propose to take power in the Finance Bill to give effect to both these recommendations from 1st January next, or earlier if it is found administratively possible. It is estimated that in a full year these two concessions will involve a net reduction of Road Fund receipts of approximately £500,000. In the present year the cost will be very small.

I intend no alteration in the main outlines of the scheme of Income Tax allowances. I have, however, repeatedly received representations as to the oppressiveness of the limitation of the allowance granted to a widower or widow for a housekeeper to those cases where there are young children to be looked after. I propose to remove this limitation. I shall also submit proposals granting a right of appeal to taxpayers claiming exemption from Income Tax on the ground that they are not ordinarily resident in this country.

Inland Revenue Legislation

There are two or three matters which will appear in the Finance Bill dealing with Inland Revenue legislation, strengthening or correcting the law. Legislation has already been announced in the House dealing with the liability to Income Tax of war bonus and like emoluments received by servants of the Crown and public authorities and other classes of employés. Legislation will also be brought forward on a subject which was brought into prominence by the recent High Court case of Ritson v. Phillips, namely, the proper rate of Income Tax allowance for personal reliefs in a year in which the rate of Income Tax has been changed—legislation enabling small sums of Income Tax to be recovered by proceedings under the Summary Jurisdiction Acts as an alternative to the costly and cumbersome method of proceeding in the High Court. I propose to extend for one year the exemption that was given last year to Irish Free State charities from British Income Tax, and I understand that the Irish Free State Government is undertaking reciprocal legislation.

Post Office

I am not in a position to make any considerable changes in the postal rates. It is true that the Post Office is making a profit on all its services taken together. There are, however, certain charges which are now subject to litigation, and, for this reason, it is impossible to say definitely what those profits are likely to be at the end of the year. There is one thing clear, at any rate, and that is that it is not yet possible to re-establish a penny post as an economic proposition. [HON. MEMBERS: "Why not?"] It is not possible as an economic proposition. I am quite sure that neither this House nor the country would think that the Post Office should be subsidised by the general taxpayer. The Committee will agree, too, that in view of the rise in prices generally it is not surprising that the cost per letter is 50 per cent. over the pre-War cost. The Committee will bear in mind that the rates for printed papers have already been reduced to pre-War level, notwithstanding the rise in prices, and that this in itself is a heavy burden upon the postal service. I have, however, agreed with my right hon. Friend the Postmaster-General that he should make in the near future certain concessions, which will cost £500,000 this year and £1,000,000 in a full year. My right hon. Friend will deal with these in detail on another occasion.

Sugar Duty

5.0 P.m.

Now I come to the point for which the Committee has waited with such tremendous patience. The Committee will not be surprised to hear that I propose to make some reduction in the Sugar Duty. This duty, imposed on a prime necessary of life, increased more heavily than that on any other taxed article during the War, is still 14 times the pre-War rate. In these circumstances, it is my intention to make a substantial reduction in the Sugar Duty. I propose to reduce it from 25s. 8d. per cwt. to 11s. 8d. per cwt. That is from 2¾d. per 1b. to l¼d. per lb., a reduction of l½d. per lb. The reduction will come into operation to-morrow, except in the case of imported goods manufactured or prepared with sugar, and the date for such articles will be 1st July. This, I estimate, will cost £17,700,000 in the current year and £18,400,000 in a full year.

Tea, Cocoa and Coffee Duties

I next come to the Tea Duty, the standard rate of which is 8d. per lb. I propose to reduce this1 by half. As the Committee is no doubt aware, the bulk of the tea which comes into this country is from India and Ceylon, and gets a preference of one-sixth. Therefore, under the reduced rate the great proportion of the tea imported into and used in this country will pay 3⅓d. per lb. as compared with 6⅔d. at present. The reduction will operate from 5th May. The estimated cost is £5,000,000 this year and £5,400,000 in a full year. This reduction will bring the Tea Duty below the pre-War rate. The reduction in the Tea Duty carries with it similar reductions in the correlated duties on cocoa, coffee and chicory. These will also be reduced by one-half. The cost is £800,000 this year and £843,000 in a full year. The reduction in the Cocoa Duty will date from to-morrow and in the Coffee and Chicory Duties from 5th May. The reduction in the case of imported cocoa preparations will date from 1st July.

Dried Fruits

Now I pass to another dutiable food, namely, dried fruits. It will be within the recollection of the Committee that in the second Budget of 1915, the duty on dried fruit (figs, plums and raisins) was increased by 50 per cent. This additional duty has required to be renewed every year. I am not proposing to renew it, and accordingly it will lapse on 1st August. The cost is estimated at £200,000 this year and a quarter of a million in a full year. It will be seen I have now made proposals reducing every one of the duties on food. The estimated total cost is £23,700,000 this year and £24,893,000 in a full year. It is my confident anticipation that these reductions will reach the consumer. The Leader of the Opposition, it will be remembered, a year ago, expressed the view that a reduction of the Sugar Duty might not benefit the consumer permanently in the then state of the world market. We disagreed with that view then, but however that may be, the reasons which the right hon. Gentleman adduced have less weight to-day because there is every prospect, judging by the latest forecasts, that the world production will allow for an appreciable expansion of world consumption.

Sweetened Table Waters

Now I proceed to a proposal which I am quite sure will be received with enthusiasm by the right hon. Gentleman who was our genial Financial Secretary a year ago. I propose to take the duty off his favourite beverage—that is I propose to abolish the duties upon sweetened table waters. [ Laughter. ] I notice there are other parts of the House, besides that part of the Front Opposition Bench, where this proposal is received with very great enthusiasm. These duties were imposed in 1916 at the rate of 4d. per gallon; they were halved last year, and I propose now to sweep them away altogether. Sweetened table waters are largely consumed by children and the poorer classes, and yield only a small revenue. This proposal carries with it a repeal of the duty on herb beer. The abolition of these duties is estimated to cost £200,000 this year, and £300,000 in a full year. Of course, it will be understood that after the duties are repealed imported table waters of this kind will still be taxed on their sugar contents. I have received an assurance from the trade that this remission will be passed on.

New Import Duties

I come now to a matter which I anticipate will be more controversial

"to distinguish those duties from the others and mark the fact that they are provisional."

It was made perfectly clear when these duties were first introduced that they were intended purely as a temporary War tax. The main argument which has been put forward for their retention from these benches since has been the need for revenue. I think the time has now come for these duties to disappear. On the other hand, I wish to avoid hardship to traders which might occur if the duties lapsed in two days without further notice. I propose accordingly that the duties shall be renewed until 1st August next, the ordinary date of renewal of annual duties, but that they must expire finally on that date. I am giving this extension of time to enable the trade to clear off their duty-paid stocks, and I think Free Traders in the Committee will agree that this extension is reasonable. The cost of the abolition of the duties will be £2,500,000 this year and £2,750,000 in a full year. I do not intend to argue the case for the abolition of these duties now as there will be full opportunity of doing so later. I may say here, however, that as this question of the imposition of duties upon imported manufactured articles was made an issue by the late Government at the last General Election and the country gave a most decisive verdict against them—[HON. MEMBERS: "No!"]—we are bound to give effect to that popular decision.

Entertainments Duty

Now I come to a less controversial topic, namely, the Entertainments Duty. I believe I was the only Member in this House to oppose this duty when it was first introduced. I have never liked it. Unfortunately I am not in a position to propose its repeal. I have, therefore, to be content with its modification. I propose to give relief on the cheapest seats, which are used by the less well-to-do members of the community, by abolishing the duty on payments for admission up to and including 6d., and by reducing the duty on payments over that amount up to and including 1s. 3d. May I say that I have experienced more difficulty in dealing with this question of the Entertainments Duty than any other matter I have had under consideration in connection with the Budget, owing to the fact that a great part of the duty is derived from the cheaper seats, and, therefore, it involves the sacrifice of a very large amount of duty to relieve even these seats. As a matter of fact, as the Committee will see, I am sacrificing by the proposal I have made nearly half the revenue in a full year. These changes will operate from 2nd June, and are estimated to cost £3,400,000 this year and £4,000,000 in a full year.

They will be in the White Paper, which will be available, I understand, in the Vote Office when I sit down.

Methylated Spirits

There is another matter which I should like to mention before leaving the Customs and Excise Duties. I refer to steps which will be taken to assist in the suppression of the evil of methylated spirit drinking, which, we are told, is prevalent in certain areas. It has already been possible to make arrangements under the existing law by which, on and after let May next, methylated spirits sold to the general public for domestic purposes shall contain an additional denaturant, which, I am advised, will make the spirits so nauseous and so difficult to swallow, and, if that stage be overcome, will make the victim so ill—but not mortally so—that he is not likely to attempt to defraud the revenue by continuing to drink them.

Inland Revenue Duties

Now I turn to the Inland Revenue Duties. I propose no alteration in the rates of Income Tax or Super-tax. Within the past two years the rate of the Income Tax has been reduced by 25 per cent., with a total relief to the Income Tax payer in the region of £85,000,000 a year. The main part of this immense remission has gone into the pockets of the wealthier portions of the community, and in my view, and in the view of those associated with me, these taxpayers have had their just share of previous reductions, and should expect no more relief this year. I must not be understood to imply that I anticipate the permanent maintenance of a 4s. 6d. Income Tax. What I mean is that, so far as concerns the relief I can afford to give this year, there are other taxpayers whose claims I must prefer.

Inhabited House Duty

Now, side by side with the Income Tax, we have had a little imitation Income Tax, which has long been tolerated with commendable forbearance, because, I suppose, it has been so completely overshadowed by its giant neighbour. The Inhabited House Duty has been with us, with an intermission of 16 years, for nearly a century and a half. It is the historic successor of the old Chimney or Hearth Tax. The Inhabited House Duty, I hope, is not so unpopular as that tax was, and it is collected, I hope, with greater humanity. It can at least claim that it exempts the poorest householders, but as a device for estimating a person's capacity to pay by obvious signs of wealth, the Inhabited House Duty is little better than a sham. Further, to large sections of the working and professional people of very moderate means it is an unnecessary and irritating addition to more necessary and more reasonable burdens. Some remission was made last year. I propose to repeal the Duty altogether. I may say that this remission will probably be a greater relief to the married man, with an income of £500 a year, than a reduction of 6d. in the Income Tax. It will cost £1,750,000 this year, and £2,000,000 in a full year.

Corporations Profits Tax

Now there is another Inland Revenue Duty, the Corporation Profits Tax. It was unloved by its parents, it was reviled by its subsequent guardians, it was condemned by every party, not least by the Labour party, it was sadly crippled by the right ton. Gentleman a year ago, and it has quite obviously only been awaiting its final doom. I do not think its originators ever claimed more for it than this: At a time when trade was very good and taxation was heavy, when more revenue was needed, this tax seemed to be less objectionable than some other taxes which might have been suggested. Circumstances are quite different now. Trade is bad, and the captains of industry, the great leaders of industry, unite in saying that the Corporations Profits Tax is one of the factors hindering the development of trade. I think, therefore, the time has come for the Corporation Profits Tax to announce positively its last appearance. I propose to repeal the Duty as from the 30th June next; that is to say, profits arising after that date will be free from the Duty altogether. As a considerable interval, of course, elapses between the time when the profits are made and the Duty is assessed, the loss this year will not be very heavy. I expect that it will cost £2,000,000 this year. Next year, the loss will be about £5,000,000, and in a full year £12,500,000.

Budget Surplus

The total cost of the reductions in taxation which I have outlined I estimate at £34,050,000 this year, and £40,443,000 in a full year. I am left, therefore, with an estimated surplus of £4,024,000, and this I feel bound to keep, more particularly as I have made no other provision for supplementary expenditure. It may be the case that this surplus will not be sufficient to meet all the expenditure outside the original Estimates which Parliament may sanction during the year. The Government are committed, for instance—and the whole House is committed—to the removal of the thrift disqualification for old age pensions, and I am only waiting for the opportunity of Parliamentary time to introduce such a proposal. I expect there will be calls, too, for housing and unemployment. I mentioned in the earlier part of my speech that we had not the time between coming into office and having to present the Estimates to Parliament thoroughly to overhaul them. I am convinced that it is still possible to effect a fairly considerable economy, and if we do that, then the saying will be available for this new expenditure, and I want to assure the House that during this year I shall watch the expenditure with the utmost vigilance, and wherever economy can be effected without impairing the efficiency of the national services, that economy shall be made.

Land Valuation and Taxation

I have come to the end of the financial statement, but before I sit down I want to refer to a subject in which hon. Members on this side are keenly interested. I mean land valuation and land taxation. Speaking on this subject a year ago, on behalf of the Labour party, I said that when we sat on these benches we should deal with this question. We intend to do so. I am quite sure that my hon. Friends will not expect, after the short time we have been in office, that I can be prepared in this Budget with a full and detailed scheme; we want our proposals, when they are submitted to Parliament, to be thorough, well thought out, and at the same time as simple as possible. We have already begun the necessary preliminary work, and this will be carried on without delay. In the meantime, there are several things which can be done and must be done. The work of the Land Valuation Office since the repeal of the land duties has fallen into three parts: first, valuations for Estate Duty purposes; second, valuation in the case of sales or buying of Government property for other Departments; and third, similar work on behalf of the local authorities where Exchequer funds are involved. In the performance of these varied duties the Valuation Department had until last year the assistance of the information which was given on the occasion of sales of land or long lettings of land. These particulars not merely provided information as to the changing ownership and boundaries of land, but were invaluable as a source of information about the changing value of land. The circumstances in which the requirement of those particulars were repealed last year, against the advice of the preceding Government, are quite familiar to the Committee. In the view of this Government the Land Valuation Office should be a strong one, and the Government valuer should not be deprived of any sources of information which may be of value. These considerations would be weighty at any time; they have added weight to-day, when the value of land is constantly changing. The necessary legislation to restore the powers lost last year, I regret to say, will not appear in the Finance Bill. I am advised that the proposal would be out of order for inclusion in the Finance Bill of the year, but the Cabinet hope to introduce a short separate Bill to deal with the matter.

There is a further matter to which I should allude. Owing to the repeal of the Land Values Duties, there has been no recruitment in the Land Valuation Office for some time, and I am having inquiries made as to the strength of the staff, its adequacy for the work that has to be done, and especially its adequacy for the work it is proposed, and it is hoped, will be imposed upon it by a new valuation. In this connection I have had to review an intention of the late Government which appears to have been that there should be created a Central Valuation Department, absorbing the Land Valuation Department and a number of small Valuation staffs scattered about in various Government Departments. I have been unable to accept such a proposal. I think it is most important that the Land Valuation Department should be under the control of the Board of Inland Revenue. I want my hon. Friends on this side of the Committee to take my assurance that the Government attach the greatest importance to this question. We regard it as important from the point of view of unemployment, housing, and other reforms, and I ask them to take my further assurance that there will be no unavoidable delay in bringing this question to a direct issue.

Now I have done, and I thank the Committee for the patience and interest with which they have listened to my speech. But I want very briefly to summarise the proposals contained in the Budget. The Budget imposes no new taxes. It makes no additions to existing taxes. It proposes to abolish the Corporation Profits Tax; to abolish the Inhabited House Duty, to give concessions to the owners of motor vehicle licences, to extend the allowance for a housekeeper, to make certain Post Office concessions, to abolish the duties on imported manufactured articles, to reduce the Entertainments Duty by nearly one-half, to abolish the duty on sweetened table waters, to abolish the 50 per cent. additional duty on dried fruits, to reduce the Tea Duty by 4d. per pound, to reduce the duties on cocoa, coffee and chicory by one-half, to reduce the Sugar Duty by l½d. per pound, and to leave over the funds necessary to improve Old Age Pensions.

This is the first Budget of the first Labour Government. This is the best I have been able to do in the short time we have been in office. I think we can confidently appeal for the support of the majority of Members of this House. These proposals are the greatest step ever made towards the realisation of the cherished Radical ideal of a free breakfast table. [HON. MEMBERS: "Hear, hear!"] They will, I am sure—those cheers show—be heartily welcomed by hon. Members below the Gangway, as well as by those of my own party. They give some benefit to every man, woman and child in the country. The Budget is vindictive against no class, and against no interest. Though I have always held and declared that the State has the right to call upon the whole of the available resources of its citizens in case of national need, I have equally held and declared that the State has no right to tax anyone, unless it can show that the taxation is likely to be used more beneficially and more economically. I have distributed the relief that I have been able to afford in such a way as to confer the greatest benefit upon the greatest number. I have done it in a way which, I believe, by increasing the purchasing power of the people, will stimulate trade and industry; and I have kept in mind always the vital necessity of maintaining unimpaired the national credit on which the very existence of the country depends. I am glad to have been able to propose this substantial relief of the burden of taxation which, for the last ten years, has been borne with such commendable fortitude by every class of the community.

Customs and Excise

Tea

Motion made, and Question proposed,

"That, in lieu of the existing customs duty on tea, there shall, on and after the fifth day of May, nineteen hundred and twenty-four, until the first day of August, nineteen hundred and twenty-five, be charged the following reduced duty, that is to say—

Tea … the pound … four pence.

And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

I am quite certain that every member of the Committee will desire, along with me, to congratulate the Chancellor of the Exchequer upon the statement he has just made. If I might venture my own personal word of commendation, I do not think, certainly during the time I have been in the House, we have ever heard a more clear or perspicuous statement with regard to our national finance. What we want in the House in these days, I should imagine, is a statement of the kind which we can all readily understand and appreciate, and I am sure we shall all agree that the right hon. Gentleman has provided us with such an account to-day. For that, I am sure we are all grateful. I propose to follow the recent precedent on Budget Day of not attempting to review in detail the Budget Statement which has been made. I think, according to our present practice, we now rather postpone that detailed discussion until the second day of the Budget Debate. In fact, to-day, if I may convert an old saying, we are here rather to praise Caesar than to bury him. The second part of the process will, no doubt, take place on some later occasion. I thought the right hon. Gentleman himself was using a somewhat ill-omened analogy when he talked about the state of one who was faced with volleying and thundering guns, because the people who were to endure that tribulation were there, as one understands, to do and to die. It may, accordingly, be that the demise of the Government may take place at some earlier period than that which the Prime Minister prognosticated in a somewhat optimistic speech the other day.

But I must allow myself, with the concurrence of the Committee, a few general observations upon the Budget Statement which has just been made. The first observation is this, that the Budget Statement to-day, with some slight modifications, might very well have been the Budget of either of the old parties which have hitherto held office in this country. But where are all the grandiose schemes which the Socialist Government were immediately going to put in force with regard to finance as soon as they reached office? The Chancellor of the Exchequer said that the duties upon food were now being brought down to a lower level than ever in the history of our country. I entirely deny that. Take the Sugar Duty. It is going to remain at a level still immensely higher than it was before the War. [An HON. MEMBER: "What about 1868?"] So far as the Tea Duty is concerned, while it was 5d. immediately before the War, it was at a lower figure some years prior to that; accordingly, there is no foundation at all for the assertion that through the action of this Socialist Government we are going to enjoy an immunity from food taxes such as this country has never had before. We are all in favour of a reduction in the duties on food, as soon as the money is available for the purpose. The money which the right hon. Gentleman is using to-day for the purpose of these reductions is that which has been provided by his predecessors in office.

With regard to the Entertainments Duty, I should like to say this passing word. The difficulty about the position when I was Chancellor of the Exchequer was to see how the reduction of the duty was going to reach the consumer.

The right hon. Gentleman says that he has got a guarantee. I do not know how it will work out. My difficulty was the suggestion that unless pockets were replenished by taking off the duty, the cinema industry would come to an end. I do not see how the Chancellor is going to satisfy the gentlemen concerned, and at the same time make the seats cheaper for the people. [An HON. MEMBER: "More people will go!"] I do not know that my right hon. Friend is in a position to say that. If he considers the position of the cinema houses to-day, and the crowds which attend them, I think he will find very great difficulty in making that assumption.

I listened with the greatest possible delight to the account of the right hon. Gentleman as to the way in which the credit of our country had been steadily increased of recent years. He has explained how we have been steadily paying off Debt. I think, indeed, it is a marvellous thing in the depressed conditions through which this country has been passing during the last year that every source of income, with the exception of the ill-fated Excess Profits Duty, has really yielded a greater credit than the experts of the Treasury estimated it could during the year. That is a great tribute to the stability of our country, and to the soundness of its financial system. We have paid off in Debt during the last four years £426,000,000. I quite agree with the right hon. Gentleman that that has enormously increased the credit of the country, with a consequent reduction in our actual expenditure. The increase in the credit of the country has put our currency on a much more substantial basis, and has made all our purchases much cheaper in the countries beyond the seas; incidentally, it has greatly reduced the amount that falls to be paid by way of interest upon the American debt. All these things have contributed to the soundness of our present position. But I must say that I did not hear anything from the right hon. Gentleman as to the part which his predecessors have taken in this operation.

The whole of this admirably laudable result, upon which the right hon. Gentleman takes pride to-day, from the point of view of the Treasury, has been produced by the activities of those who occupied office before them. Accordingly, the three big guns which he expected would volley and thunder in front of him from this side of the Committee are, at least, entitled to some little credit—[HON. MEMBERS: "Agreed!"]—in the result he has given to-day. Again, I think we welcome the repeal of the Corporation Profits Tax in the interests of business. That is a wise provision on the part of the present Chancellor of the Exchequer.

The are, however, some matters upon which we, on this side of the House, disagree from the right hon. Gentleman fundamentally. He has indicated an attitude toward Imperial Preference with which we can never agree. It would appear, from the action which he takes, that the only people with whom this country is not to make a trading agreement, lest it brings about a condition of hostility, is our own Dominions. A trading agreement with Russia—yes! But a trading agreement with Australia, or Canada, or New Zealand is something which the right hon. Gentleman refuses to contemplate. That is not the way to bind the Empire together, which the right hon Gentleman professes to be so anxious to do. There is another matter upon which we entirely disagree, and that is the matter of the McKenna Duties. It is almost impossible to imagine a Government which, at this time of day, with the depression which exists industrially in this country, with the necessity for employment, would interfere with the great industry which has been built up during recent years and is now employing far more men than it has over done in the past. It is the callous indifference to the question of employment which has been exhibited ever since this Government came into power. On the negative side, they have produced nothing whatsoever up to now to cure the great evil of unemployment—not a scheme, not an idea! Now we have got a positive incentive to the creation of unemployment. Whatever be the merits of the Budget—and one will have more to say on that matter to-morrow—I should like, on behalf of the party for whom I am speaking, to enter my emphatic protest against those two suggestions which appeared, so unnecessarily at the present time, in the speech of the right hon. Gentleman. One defers detailed criticism. Before sitting down, I should just like again to congratulate the right hon. Gentleman upon the clearness of the statement which he has made to the House, and to compliment him upon the ability with which he has made it before the Committee. I have no doubt arrangements will be made as usual for the continuance of the discussion?

It is a tradition of the House on the night when the Budget is introduced to confine the discussion within, so far as possible, a non-controversial limit, because, happily, our forms provide us with abundant opportunity of going into all its details at a later stage. At the same time it has been usual, and I think it is right, at the earliest possible moment, for those who can claim any share in the representation of the different parties in the House to give the general impression upon which the statement of the Chancellor of the Exchequer has made. I desire, if I may, to express on behalf of myself and my colleagues our extreme satisfaction, not only at the admirable lucidity and cogency—which I have rarely heard surpassed during a great many Budgets—of the introduction of this most complicated and difficult of all tasks, but also on the fact—so far as I can form a judgment—that the Budget proceeds upon thoroughly sound financial lines. I think my right hon. Friend the Member for Hillhead (Sir R. Horne) said it was a Budget which might have been produced by either of the other political parties. He had not proceeded very far before we saw that in certain vital particulars that was not the case. We must reserve liberty of criticism in matters of detail, but there is nothing in the Budget, so far as I know, in which principle is concerned, to which a single one of us sitting on these benches will not heartily subscribe.

Let me give one or two reasons for that opinion. In the first place, the right hon. Gentleman has made, and I am glad that he has made, substantial provision, following the line of his predecessors, for the continued reduction of our National Debt. Not only has he not abated, he has continued unimpaired, and, I think, with the additions which my right hon. Friend proposed last year, the provision for the Sinking Fund. I do not think—and here I heartily agree with my right hon. Friend the Member for Hillhead—there is any more remarkable feat in the history of national finance than the provision which this country has made since the War, at enormous cost, at immense sacrifice, and at a certain amount of very serious inconvenience to the reviving prosperity of the country, and the necessary discouragement of the investment of capital. I think there has never been so surprising and so creditable a feat as that which this country has made in this matter. We may say so without undue complacency, and because all parties have taken their share in it. The right hon. Gentleman has given an account of the clearing off of our own national liabilities, for the reduction—you cannot say it is on the point of disappearance, because we still owe a large sum to the United States—of our external debts; and as regards our internal debt a substantial and ever-increasing provision for its diminution and ultimate extinction. The figures which the Chancellor has given us, both as to the reduction, even during the current year, which has just passed, in the gross burdens, the dead weight burdens, and not the least important—I always attach the greatest importance to it myself—to the reduction of the floating debt. The reduction in both those figures in the course of one year is the most gratifying tribute to the soundness of our finance and the self-sacrifice of our people.

As regards income and expenditure we are, of course, dependent, and necessarily dependent, on the Estimates which have been produced by the responsible authorities under the Government. I think I am light in saying that assuming there had been no changes in taxation, the income, the revenue for the present financial year derived from taxation would have been substantially the same as the amount received during the last financial year.

On the other part of our receipts, the non-taxable, there is, I think, a reduction of something like £10,000,000, which of course is due, to some extent, to the fluctuating, precarious, and gradually disappearing items which we call Special Receipts. Here I should like to emphasise, if I may, a perfectly friendly warning in regard to this item of special receipts which is due to the financial liquidation of the country's assets. I forget the exact figure, but I think it is £30,000,000, and when you are budgeting as you ought to do—I have often said this during the last 20 years—not only for the current year and the year after but even for the future, that is a very serious item to take into account. My right hon. Friend has referred to the commitments which the Government have made, and which they recognise it to be their duty to realise both in administration and legislation, with regard to matters like the thrift allowance for old age pensions, unemployment, and housing, and all those are things which will have to be provided for much in the current year and more largely in the years that are to come. I confess that I look with some misgiving upon what looks to me to be the rather slender provision which the Chancellor of the Exchequer has made for those not contingent but certain liabilities in the future. I hope it will turn out that he has not been over sanguine in his estimates, but this is a question which we shall probably be able to discuss in more detail in the future.

Where I wish to express my hearty agreement with the Chancellor of the Exchequer is in the main features of his financial scheme. This is a Free Trade Budget. There is no doubt about that after the speech we have just heard from the right hon. Gentleman the Member for Hillhead (Sir R. Horne). It is a Free Trade Budget both in the manner in which it deals with Colonial preferences, and still more important because it is more significant at the moment, in the manner in which it has dealt with the McKenna Duties. Those duties were not imposed for a protective purpose, and those who know the history of them know quite well that to look upon them as having been imposed for a protective purpose is a complete perversion and misrepresentation. They were imposed for quite another purpose, and definitely with the most express assurances and pledges that they were not to form a permanent part of our fiscal system. When we are told by our own manufacturers and enterprising capitalists from abroad that they were justified in proceeding on the assumption that they could consider these duties as though they were to be a permanent shelter and protection of particular industries, that is flying in the face of the most definite assurances given by the then Chancellor of the Exchequer and the Government, and therefore they have themselves only to blame for the result.

I think it can be abundantly proved that the McKenna Duties have very little to do with the prosperity of the country and the development of the industries to which they refer. [HON. MEMBERS: "Oh, oh!"] At any rate, the Chancellor of the Exchequer is only acting in accordance with the assurances given at the time, and abundantly repeated, both by the party now sitting on the Treasury Bench and the Liberal party year after year, that at the first available opportunity those duties would be abolished. I do not quarrel with the suggestion that they should be retained for a time in order to give a breathing space during which the persons affected can look round and liquidate the situation as best they can, for it would have been arbitrary and harsh if these duties were made to disappear within a few days of the Budget. I do not think the strongest Free Trader in the House will quarrel with what the right hon. Gentleman has done in this respect.

I should like to say a word or two in regard to taxation. The right hon. Gentleman is in the happy position of not having to impose any new duty or to increase any existing tax. We are coming back to the halcyon days which existed when I was Chancellor of the Exchequer—now an almost prehistoric period—when it was the happy duty of the Chancellor of the Exchequer to consider how much of the surplus revenue could be devoted on the one hand to the remission of taxation, and on the other hand to the reduction of debt. This is the first time since the War that the Chancellor of the Exchequer has found himself in that happy position, or, at any rate, it is the first time that he has taken advantage of it. For a long time all the progressive forces of this country have advocated the policy of reducing food duties. Mr. Bright was sanguine enough to believe in and look forward to the time when there would be such a thing as a free breakfast table, but that still has a slightly millennial colour. We have got back however, as regards tea, to pre-War conditions, and as regards sugar, if not to that state, at any rate there is going to be a very substantial reduction.

As I said last year when criticising the Budget, the Sugar Duty, in my opinion, has easily the first claim upon any Chancellor of the Exchequer, because it is not only one of the necessities of life, but it is the raw material in some of our most important industries. I am glad that the Chancellor of the Exchequer has been able to assure us that the apprehensions expressed last year that a reduction of this duty would be likely to enhance the profits of the speculators and not benefit the consumer have now no foundation in fact. I welcome very heartily those two very important remissions, and I trust that in all the respects to which I have referred the Budget will emerge from the ordeal to which it will be subjected substantially the same in principle as it is now and unchanged. I have now only to offer once more to the Chancellor of the Exchequer my most hearty congratulations upon the manner in which he has presented the case to the Committee, and I only wish to say that I am in agreement with the main principles and the general substance of his financial proposals.

I should like to couple my name with the last speaker and with those who have complimented the Chancellor of the Exchequer upon the explicit way in which he has explained his Budget proposals. I should also like to congratulate him upon having organised two other financial transactions; one is the setting up of a Committee of Inquiry into the National Debt, and the Committee to go into the whole of the details of the National Debt, which is so important at the present time; and whose terms of reference include the reference to the effects of trade, industry, employment, and national credit. I conclude that this reference really will include the consideration of the Capital Levy. I was indeed sorry when the Capital Levy was discussed that the Chancellor of the Exchequer and the Financial Secretary to the Treasury did not vote on that occasion. I know that they may have been paired, but I feel that they were rather lacking in courage not to vote for a principle which, anyhow, the Chancellor has advocated for so many years.

The other matter upon which I should like to congratulate the Chancellor of the Exchequer is in regard to the Conversion Loan. I consider the fact that not less than 75 per cent, is being taken up is a great asset to this country, and it will probably save the taxpayer between £600,000 and £700,000 a year. That is a great improvement on the last Conversion Loan of 3½ per cent. when only about 21 or 22 per cent. was taken up. It is surprising what an enormous amount of holders there are of the 5 per cent. War Loan. I understand that about 3,200,000 people are holders of the 5 per cent. War Loan, of which 2,345,000 hold amounts of £200 or under. There is another point I should like to raise, and that is with regard to the surplus. I think we have the finest Civil Service in the world, and when you consider this surplus of £48,000,000 is only 5 per cent. of the total expenditure it is a very small amount considering the enormous Estimates that have to be made in dealing with the Budget. The surplus in 1912–13 was only £180,000, but to-day it is the conservative finance of the Civil Service and the Chancellor of the Exchequer in obtaining surpluses these difficult times that makes me congratulate them on the figures.

With regard to the National Debt, that is probably the most important question which this country has to consider. The Chancellor of the Exchequer has told us that the peak of £7,988,000,000 was reached in December, 1919. The point to be realised, and which I hope the Committee which has been set up will realise, is how much debt a country can stand. I contend that a country can only stand an amount of debt in proportion to its productive capacity. Let me take the perspective value. Roughly, you may say that the income of this country is estimated at £4,000,000,000, and that is practically what is called two years' purchase, if you consider the debt as being £8,000,000,000. Strange to say, those figures are very similar in proportion to what they were 100 years ago, when the country had an estimated income of £400,000,000 and a debt of £800,000,000. Consequently, your perspective is more or less the same to-day as it was 100 years ago after the Napoleonic Wars.

Our National Debt is divided into two parts, the internal and the external debt. The internal debt is easy to manage because it is with ourselves, but there is more difficulty in dealing with the external debt and that is our great danger. When the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) made a speech the other day criticising the ex-Prime Minister for having made arrangements with the United States of America, I cannot conceive that he really realises what an immense amount of good the settlement of that debt has done to this country in national credit. The right hon. Gentleman the Member for Carnarvon Boroughs talked about the "appalling settlement." I think that, So far as trade is concerned, so far as our credit is concerned, so far as cheapness is concerned, the settlement of that debt has done more than anything else to revive trade. I was reading the other day a statement by President Coolidge, who, referring to this external debt and the settlement with the United States of America, said:

These external debts are difficult to pay. If I owe any money, say £50 to the Financial Secretary to the Treasury, it is very easy for me to sell goods, and I can hand him £50. That is a domestic obligation. But when it comes to an international obligation, when it comes to one nation having to pay another nation, it is not the increase of revenue over expenditure that will help in a very large way. It will help slightly, because you have your surplus, but in this question it will not help you to buy dollars if the debt is with the United States. If the Financial Secretary has made an agreement with me that my payment to him had to be made in dollars, I should have to buy dollars, and someone would have to sell dollars to me, in order that I might make that payment. It is just the same with a nation which has to pay another nation. Really, the difference between internal debt and external debt is that in the case of the one you produce and do not consume, while in the case of the internal debt you produce and consume. That is a big difference, and it will be a great strain upon us. How can this be paid? Taking investments out of the way—that is, investments made by Americans into securities in this country—it can only be paid in goods and in gold. Let me deal with goods. I am glad to see that, comparing the 1922 figures with those of 1923, Britain exported more goods to America in 1923 than in 1922, and also that Britain bought less goods from America during that period, the total extent being £23,000,000. That was in spite of the Fordney Tariff. I think that anyone who understood the Fordney Tariff must have expected in 1922 that it would have stopped the import of goods into America, but actually the goods have gone into America, and the exports from America to this country have gone down, to the extent of £23,000,000.

I will now deal with the matter of gold. Gold is a commodity. In pre-War days it had stability in regard to exchange and currency. To-day it is only a banking reserve. A country that has a great deal of gold need not necessarily inflate unless it uses that gold for credit. The British Empire is the greatest producer of gold in the world. In 1923 the total world production of gold was £72,000,000, and of that the British Empire produced £52,000,000, or 72 per cent. of the total. We imported into this country £43,000,000 last year, and we exported £57,000,000. Where did that go to? It went, in large bulk, to two countries, which do not use it as currency. India took £19,000,000, and the United States of America took £33,000,000. That helped us to pay our debt. In 1922 the United States took £26,000,000, and in 1921 £55,000,000. The United States now have £800,000,000 of gold in their vaults, without inflation being increased in that country, owing to the fact that, as I have said, gold is not being used as assisting currency or as credit. In pre-War days the United States exported gold. Think what a great difference an item of that sort makes to the trade of this country—the fact that gold is being imported into the United States at the present time, whereas in pre-War days the United States exported gold.

With regard to the reduction of Debt, I, indeed, congratulate the Chancellor of the Exchequer on keeping the Sinking Fund at £45,000,000 for the ensuing year. I remember that the present Prime Minister last year said that he was anxious to reduce the Debt, not only by revenue, but also by a Capital Levy. The only right and proper way to keep our credit is to reduce the National Debt by revenue. There are two ways in which it can be reduced. One is by the very important Act of 1866, which takes all the surplus. That Act has been followed by many other countries, including the United States. The other way is by the Sinking Fund of last year. As the Chancellor of the Exchequer stated, we have paid off £426,000,000 in the last four years. There is a possibility of our being able to pay off a certain amount of it by Reparations. This is not the place to discuss Reparations, but one never knows quite what may happen, and the Chancellor of the Exchequer is quite right in not taking anything in his Budget figures for any amount that may be received from Germany or the other ex-enemy countries. He also referred to the Inter-Allied Debts. The Inter-Allied Debts run up to £2,000,000,000, and a great deal of discussion will be required in regard to them. What I, however, as a humble back-bencher, object to, is seeing it stated, perhaps in the newspapers, or perhaps in reply to a question in the House of Commons, that France is lending money to certain countries in Europe; or seeing, on another day, that Italy has lent Poland £4,000,000. I feel it right that we should press for the payment of that debt, or, anyhow, the interest upon it. I think that some settlement should be made with regard, anyhow, to the interest.

With reference to taxation, the principle of taxation is that it must be just. It must be paid by industry and commerce. I know men who have retired from business since the war, and who now, instead of putting their money back into industry, buy, perhaps, 5 per cent. War Loan. They have lost their enterprise; they have lost their individuality; and why? Because taxation is so heavy. When we realise that in the last five years Income Tax and Super-tax have brought in an amount of £1,800,000,000, and when we add the Excess Profits Duty and the Death Duties to the Income Tax and the Super-tax, there has been paid £2,696,000,000 in the last five years, one wonders that there is any inclination among Income Tax or Super-tax payers in this country to put any of their savings back into industry. I think that possibly the Chancellor of the Exchequer may know my views with regard to indirect and direct taxation. I expressed them last year. I quite agree that the reductions he has made in taxation will help the poor as well as helping ourselves to a certain extent, but is it rational that indirect taxation should be reduced to such a large extent as compared with direct taxation? I have not had time to work out the details, but last year indirect taxation was 36 per cent. and direct taxation 64 per cent. In pre-War days it was almost equal. In Holland recently there has been a deficit in the Budget, and I notice that in the new Dutch Budget there is this remark: Gibbon's "Decline and Fall of the Roman Empire," he will find that one of the reasons for the downfall of Rome was that direct taxation was so easy to collect that Constantine and his followers taxed by direct taxation and did away with indirect taxation. I humbly submit those few remarks to the Financial Secretary. I hope he may have time to look at his Gibbon, and, if he does, he will find that direct taxation had a great deal to do with the downfall of Rome. The Chancellor of the Exchequer also referred to double taxation, and he mentioned double taxation with regard to shipping. I quite appreciate that the League of Nations is making a report on double taxation, but I think they were making a report a year ago. It is one of the important things we have to look to. I should like to see the Financial Secretary to the Treasury on another Royal Commission. We appreciate the work he did on that Royal Commission, but double taxation is important to this country, especially as a country like India has formed a committee to carefully consider whether the rates of Income Tax should be the same in India as in this country. I know there is a small rebate at present on double taxation, but it would mean that anyone who earned his income in India and lived in this country, or only went out now and again to India, that taxation would take four-fifths of his income wealth, which is too excessive for anyone.

Another point I should like to raise is in regard to savings. I appreciate when the Chancellor of the Exchequer sent that message to the voluntary committees in regard to National Savings Committees. He sent a very nice message, and as these committees are run in a voluntary capacity, I am sure they all appreciate it. It is the most important relic of the War. It wants to be encouraged. I was very pleased to hear the Chancellor say, as far as I could gather, that they had increased by £11,000,000 net in the year. The total amount collected net, I understand, is about £360,000,000. I appreciate that there is no Income Tax on them. I appreciate what the Financial Secretary said last year, that the Government were losing, I think, £9,000,000 or £10,000,000 through there being no Income Tax on National Savings Certificates. I think it is worth it. It is a sound influence on the national habits, and character of our people. May I refer to another savings, that is the Glasgow Savings Bank? I quite appreciate the thriftiness of Scotsmen, but it is wonderful to think that the Glasgow Savings Bank should have such a splendid year in 1923. The annual report says:—

Question put, and agreed to.

Cocoa

Resolved,

"That, in lieu of the existing customs duties on cocoa, there shall, on and after the thirtieth day of April, nineteen hundred and twenty-four, be charged the following reduced duties, that is to say:

Provided that as respects any duty charged on manufactured or prepared goods under Section seven of the Finance Act, 1901, the aforesaid reduction of duty shall not take effect until the first day of July, nineteen hundred and twenty-four.

And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

Coffee, Chicory and Coffee Substitutes

Resolved,

"That there shall, on and after the fifth day of May, nineteen hundred and twenty-four:—

( a )In lieu of the existing Customs duties on coffee and chicory, be charged the following reduced duties, that is to say—

s.

d.

Coffee (not kiln-dried, roasted or ground) the cwt.

14

0

Coffee (kiln-dried, roasted or ground the lb.

0

2

Chicory (raw or kiln-dried) the cwt.

13

3

Chicory (roasted or ground) the lb.

0

2

( b ) In lieu of the existing Excise Duty on chicory, be charged the following reduced duty, that is to say—

s.

d.

Chicory (raw or kiln-dried) the cwt.

10

0

(c) In lieu of the existing Excise Duty on coffee substitutes, be charged the following reduced duty, that is to say—

s.

d.

For every quarter of a pound of a coffee substitute

0

( d ) Be substituted for the rates of draw-back on coffee and chicory and mixtures of coffee and chicory authorized by Section three of the Finance Act, 1922, the following reduced rates, that is to say—

s.

d.

Coffee, for every 100 lbs.

14

0

Chicory, for every 100 lbs.

11

0

Mixtures of coffee and chicory, for every 100 lbs.

11

0

Provided that:

( i ) in the case of the drawback on chicory and on mixtures of coffee and chicory, the rate thereof shall, if

(ii) the aforesaid reduction in the rates of drawback shall not have effect in relation to any goods as respects, which it is shown to the satisfaction of the Commissioners of Customs and Excise that duty was paid at the rates in force before the fifth day of May, nineteen hundred and twenty-four.

And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

Sugar

Resolved,

"That—

( a ) In lieu of the existing customs duties on sugar, there shall, on and after the thirtieth day of April, nineteen hundred and twenty-four, be charged the following reduced duties:

s.

d.

Sugar of a polarisation exceeding ninety-eight degrees the cwt.

11

8

Sugar of a polarisation not exceeding seventy-six degrees the cwt.

5

7

and intermediate duties varying between 11s. 8d. and 5s. 7d. on sugar of a polarisation not exceeding ninety-eight degrees and exceeding seventy-six degrees.

Molasses (including all sugar and extracts from sugar which cannot be tested by the polariscope):

If containing 70 per cent. or more of sweetening matter the cwt.

7

5

If containing less than 70 per cent. but more than 50 per cent. of sweetening matter the cwt.

5

4

If containing not more than 50 per cent. of sweetening matter the cwt.

2

7

Glucose:

Solid the cwt.

7

5

Liquid the cwt.

5

4

Saccharine (including substances of a like nature or use) the oz.

3

9

Provided that as respects any duty charged on manufactured or prepared goods under Section seven of the Finance Act, 1901, the aforesaid reduction of duty shall not take effect until the first day of July, nineteen hundred and twenty-four.

( b ) In lieu of the existing excise duties on sugar made in Great Britain or Northern Ireland, there shall, on and after the thirtieth day of April, nineteen hundred and twenty-four, be charged the following reduced duties:

Sugar Molasses

A duty equal to five-sixths of the full customs duty charged on imported sugar or molasses of the same class

s.

d.

Glucose:

Solid

the cwt.

6

2

Liquid

the cwt.

4

5

Saccharin (including substances of a like nature or use)

the ounce

3

1

( c ) The following drawbacks and allowances shall be allowed and made at the reduced rates hereinafter provided, that is to say:

s.

d.

The customs drawback to be allowed to a refiner on molasses produced in Great Britain or Northern Ireland from imported sugar and delivered by him to a licensed distiller for use in the manufacture of spirits the cwt.

2

7

The excise drawback to be allowed on molasses produced in Great Britain or Northern Ireland from sugar on which the Excise Duty

s.

d.

has been paid and delivered to a licensed distiller for use in the manufacture of spirits the cwt.

2

15/6

The allowances to refiners on molasses used solely for the purpose of food for stock—

s.

d.

In the case of molasses produced in Great Britain or Northern Ireland from sugar on which duty has been paid on importation the cwt.

2

7

In the case of molasses produced from sugar made in Great Britain or Northern Ireland on which the Excise Duty has been paid the cwt.

2

15/6

Provided that the reduction of the rates of the aforesaid drawbacks and allowances shall not have effect in relation to any goods as respects which it is shown to the satisfaction of the Commissioners of Customs and Excise that duty was paid at the rates in force before the thirtieth day of April, nineteen hundred and twenty-four.

And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

Entertainments Duty

Resolved,

"That—

( a ) As from the second day of June, nineteen hundred and twenty-four, Entertain- ments Duty shall cease to be charged on payments for admission to an entertainment where the amount of the payment for admission does not exceed sixpence, and where the amount of the payment for admission, excluding the amount of the duty, exceeds sixpence and does not exceed one shilling and threepence the duty shall be charged at the following reduced rates, that is to say:—

Where the payment—

Exceeds 6d. and does not exceed 7d.

one penny.

Exceeds 7d. and does not exceed 8d.

three half-pence.

Exceeds 8d. and does not exceed Is. ld

twopence.

Exceeds 1s. 1d. and does not exceed 1s. 3d.

threepence

( b ) Where a person who has made a payment for admission to an entertainment subsequently on being admitted to another part of the place of entertainment makes a further payment for admission in respect of the same entertainment, there shall for the purposes of Entertainments Duty be deemed to have been one payment of an amount equal to the aggregate amount of the several payments.

And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

Continuation of Additional Medicine Duties (Excise)

Resolved,

"That the additional duties of excise on medicines imposed by Section eleven of the Finance (No. 2) Act, 1915, and continued by Section seven of the Finance Act, 1923, until the first day of August, nineteen hundred and twenty-four, shall continue to be charged as from that date until the first day of August, nineteen hundred and twenty-five.

And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

Continuation of New Import Duties

Resolved,

"That the new import duties which were imposed by Part I of the Finance (No. 2) Act, 1915, and continued by Section six of the Finance Act, 1923, until the first day of May, nineteen hundred and twenty-four, shall continue to be charged as from that date until the first day of August, nineteen hundred and twenty-four.

And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act. 1913."

Income Tax

Charge of Income Tax

Resolved,

"That—

Income Tax on War Bonus, Etc

Resolved,

"That for the purposes of any assessment to Income Tax for any year which is made on or after, or has not become final and conclusive before, the thirtieth day of April, nineteen hundred and twenty-four, or of any deduction on account of Income Tax for any year, any increase of or addition to any salary, remuneration, pension, annuity or stipend by way of war bonus, and any other like temporary increase or addition granted in order to meet the rise in the cost of living, shall be, and shall be deemed always to have been, chargeable to tax as salary, remuneration, pension, annuity, or stipend, as the case may be, and not as perquisites.

And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

Rate of Income Tax to Be Repaid in Respect of Deduction or Allowance Under Part Ii of Finance Act, 1920

Resolved,

"Any repayment of Income Tax for any year of assessment, whether ending before or after the thirtieth day of April, nineteen hundred and twenty-four, to which any person may be entitled in respect of any deduction allowed for the purpose of ascertaining the amount of his taxable income or in respect of the reduction of the rate of tax on the first two hundred and twenty-five pounds of his taxable income, shall be made at the standard rate of tax for that year, or at half that rate, as the case may be, but subject to such adjustments as may be proper in cases where relief is given in respect of Dominion Income Tax:

Provided that in the case of any person who proves that by reason of the deductions to which he is entitled he has no taxable income for any year, any repayment to be made shall be a repayment of the whole amount of the tax paid by him, whether by deduction or otherwise, in respect of his income for that year.

And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

Amendment of Law

Motion made, and Question proposed,

"That it is expedient to amend the law relating to the National Debt, Customs and Inland Revenue (including Excise), and to make further provision in connection with Finance."

Motion made, and Question, "That the Chairman do report Progress, and ask leave to sit again," put, and agreed to.—[ Mr. W. Graham. ]

Resolutions to be reported To-morrow.

Committee report Progress; to sit again To-morrow.

Slades Gkeen Explosion

Motion made, and Question proposed, "That this House do now adjourn."—[ Mr. Clynes. ]

I desire to draw attention to the circumstances surrounding the very dangerous explosion at Slades Green, which took place a little while ago. I put a question to the Home Secretary in regard to the matter and he referred me to a certain page of the printed Inquiry. The Home Office, however, is not concerned with the points which I desire to raise. The points in question are for the Chancellor of the Exchequer and the Disposal Board. In order to show that the printed Inquiry does not answer my questions, I desire to give the history of the connection of the firm which was given the contract to break down the explosives, with the Disposal Board. The Disposal Board gave the contract for the breaking down of explosives and cartridges to the firm by private tender in June, 1921. I do not in the least complain of the contract having been given by private tender if it had been to the advantage of the public. It is true that in some contracts which are heavy contracts, and very responsible contracts, municipalities and Government Departments quite properly depart from the practice of public tenders.

If the Disposal Board had said that, owing to the exceedingly dangerous character of the work, they were confining themselves to a selected list of experienced contractors, I should not complain, but the Disposal Board did not choose a firm of any experience, or a firm which had any experience, as far as I can gather, in regard to explosives. This firm was founded on the 30th May, 1921, with £100 of paid up capital. They issued later on £30,000 worth of debentures, and according to the particulars given on the Stock Exchange list I find that in the prospectus on which they invited subscriptions for the debentures—which were not all taken up—the firm quoted, concerning its assets, an agreement with the Government, dated 9th June, 1921, and a further agreement in 1923 by which the Government gave them the contract in regard to the Slades Green factory. This firm had only been in existence for not quite a month, and had only £100 of paid up capital when the contract was given, and, as far as I can gather, it had no experience of explosives! Later on a firm named Gilbert Percivals and Company was formed with two directors, one of which was Mr. Gilbert himself. That firm, which was a little thing, was founded in August, after the contract had been given, and had only £500 of capital. The last entry in the Stock Exchange Register shows that it had then done no business whatever. Therefore, their experience in dealing with explosives cannot be said to be a substantial experience. I do not gather that the directors themselves had any previous experience of explosives. The occupation of the chief directors of Villa Gilbert is given as "directors of Gilbert's Technical Equipment." I have looked up the particulars of that firm, which is a small firm with a capital of £500, founded in June, 1922. It issued £10,000 of debentures and has many of the directors of Villa Gilbert on the board of management. None of these appear; from the occupation given, to be in touch with explosives.

Therefore, this firm, which had preference in regard to tenders, was a very young firm. I lay emphasis upon that, because anyone who has any knowledge of explosives knows that they do not put their women workers upon the responsible work of breaking down explosives until they have shown that they have been thoroughly broken in to the atmosphere of a powder factory. These girls were taken on from the Labour Exchange and were, some of them, quite raw girls. We want some explanation as to why this particular little firm was picked out and why the contract was not thrown open to public tender. I can conceive that it is a proper thing to say that you will only give this very dangerous work to firms of great experience, and I can understand and fully appreciate the Government having a selected list of contractors. But the Disposal Board may take the other view that it is their duty simply to get the best price in the open market. Then, I say, it should be a matter of public tender. Later on, the Disposal Board gave the firm some kind of power to use the Government premises at Slades Green. They then exempted this firm from the provisions of the Explosives Act. The Explosives Act Regulations consist of two parts, the first governing the conduct of the workers and general workshop management, and the second the licences from the buildings. The Disposal Board applied to the firm, with regard to the conduct of the works, Regulations substantially identical with those issued 'by the Home Office, and they expected to see them carried out. But they did not apply the building rules. Ever since there was an Explosives Act, ever since the 60's, the experts have said that there is no such thing as making explosives safe. Whatever Regulations you have, whatever precautions you take, sooner or later some slip happens, and there is an explosion. Therefore, the second part of the Explosives Act Regulations is designed to minimise the scope and extent of an accident. This business of breaking down explosives is one of the most extremely dangerous operations known to the Home Office. Under the Home Office Regulations only two persons would have been allowed to take part in breaking down Verey cartridges; but in this case 20 were employed in one shed, and when the accident took place, 13 were killed, 12 in the building, and one, who was pulled out by the manager, died of her burns a few hours later. One of the girls killed had only been taken on that day from the Employment Exchange.

7.0 P.M.

The union informs me that the Unemployment Exchange had refused benefit to girls who declined to take up this work. I appeal to the Ministry of Labour that they should see to it that in future the force of the law is not used to drive girls into dangerous occupations. If you put a frightened girl into a powder factory, she is a clumsy girl and dangerous not only to herself but every- body else. It is really quite a shocking thing that on the one hand we should use the whole power of the law to press people to undertake certain duties, and on the other hand we should not be giving them the protection which should be afforded in such circumstances. I do think we ought to know something about the history of this business, as to why the contract was given to the firm, and why they were exempt from the provision of the Explosives Acts.

We ought to know something more, too, about what is being done with the rest of the stuff. I have a special motive for saying that. I have conceived the suspicion, not on any evidence, but mostly arising out of casual talks with firework manufacturers, and by considering the onerous nature of the obligations involved, that it would not pay anybody to break down this stuff under proper conditions. The packets are so small, the labour is so great, the precautions are so expensive, that I do not believe a Government could sell these goods at a profit if the work were to be done really safely. I have got that suspicion from conversations, and from using my own intelligence on the Regulations; but if it be a correct one we ought to know it, and we ought not to take money for this stuff. It should be destroyed by water, and dumped into the river or the sea. Deplorable as the accident was, it is only by the mercy of Providence that it was not much greater. This shed, if it had come under the Explosives Act, would have been 25 yards away from any other explosive, or else properly screened. There was an annexe containing loose gunpowder adjoining, and another containing cartridges, and in the enclosure there was a vast quantity of stores of the same kind. People have told me that during the fire the blazing Verey stars fell on the roof of the gunpowder shed. Fortunately they fell off, but if they had stuck, as they might have done, the flame was so fierce that it would have gone through the corrugated iron like a piece of paper. If the powder shed had gone up, certainly the fire brigade men would have gone up; and the fire might very possibly have reached to the main dump and detonated that mass of explosives. It is, therefore, a very serious matter, and we ought to have an inquiry into the full history of it.

I do not know who is responsible. Technically, the accident took place under the present Chancellor of the Exchequer. The arrangements were going on under the periods of office of three Chancellors of the Exchequer. I do not say, or hint, for a moment that any one of those right hon. Gentlemen was morally responsible. The real mischief goes very much deeper. I believe that when the Disposal Board was set up, it was put in a position of greater liberty than is consistent with proper administration. It functioned uncontrolled and uncriticised by other Government Departments, and the control of the Treasury was, to a great extent, only nominal. I believe, too, that successive Chancellors of the Exchequer, faced with this temporary anomaly in their Department, rather devoted their energies to winding up the thing and getting rid of it than reforming it. It is perfectly reasonable that a Minister should so regard a bad arrangement, but since such a contract was given to such a new and inexperienced firm, I think the House ought to know something about the whole matter. They sought, also, to know whether it is proper or not to get rid of the stuff instead of selling it.

I ask the present Financial Secretary to the Treasury to consider whether the subject is of enough importance to justify an inquiry? It ought to be an inquiry by a Select Committee of the House. There are great difficulties in having a Departmental inquiry, and asking civil servants to report on the methods of the members of another Department. That is the reason why the Report we have had is so very meagre and unsatisfactory. We should have an inquiry into the whole matter, preferably by a Select Committee, but I would be satisfied with any full inquiry or statement that might be considered advisable The matter, however, ought not to be allowed to rest where it is. The Report of His Majesty's Inspector of Explosives does not go to the root of the thing, or give us the reason for the state of things which led to the disaster.

The House is indebted to the hon. Member for East Ham North (Miss Lawrence) for raising this matter. I happen to be a member of the particular Division where this tragedy occurred. It has been found necessary to press for this public inquiry because of the attitude taken up by those who are in the position of defaulters and who now in the hour of tragedy are actually crawling away from their liability. The funeral expenses, to say nothing of the mourning, of the incidental expenses, lost work, the anxiety, the worry incidental to a tragedy like this, have been met with an attempted settlement on the part of the insurance company acting for this firm, by miserable sums. In the lowest case the sum was £15. As the hon. Member for East Ham North has said, it is because the firm is apparently of mushroom growth, with no previous experience whatever of the work. It had only a paid-up capital of £100, with a debenture certainly not exceeding £30,000, so that any injured third party has no chance of obtaining adequate compensation. The solicitors representing these 12 victims have to appear at the Dartford County Court on Thursday, to challenge and to fight the miserable offer which these people are making.

It is because of those things that I want very briefly to outline one or two points which stress the need for an enquiry. I am very happy to say that the Financial Secretary to the Treasury has been very anxious to see justice done in this matter, and has met some of the representatives to see what can be done. I want to urge on him that, so far as the question of the report is concerned, he ought to weigh it up very carefully, having regard to what happened at the inquest. To those who were at the inquest this Home Office report is a piece of worthless waste paper. At the inquest there was irrefutable evidence that the persons in authority were not carrying out their functions with knowledge. One of the subordinate officials actually could not say whether the black powder was gunpowder or not The girl who started on the morning the disaster occurred, was put on the work of breaking down ammunition after only three minutes' instruction. The managing director admitted at the inquest that he had no previous knowledge of explosives, and was a sea captain by profession. I am perfectly certain that if we could get a verbatim report of the evidence of the so-called safety officers, and could see their admissions that they knew nothing whatever of the constituent parts of the Verey lights, the House would take up this demand that, in the interest of Government cleanliness itself, we should have a public inquiry into this matter.

Such an inquiry would elicit this one outstanding fact that Verey lights had been broken down by firms of proved excellence and that the percentage of accidents with those firms was very low indeed. Somehow or other these firms were precluded from any participation in this particular contract. On all previous occasions gunpowder and Verey lights were regarded as waste, and a minimum of danger was attained by having the material damped. In this particular case, the safety officers themselves had to admit, and the evidence of the girls tended to prove it, that the air was simply full of dry gunpowder. The girls went home each day complaining of the effect on their noses and eyes of the floating gunpowder. It was put dry into receptacles in order to be commercialised, so that it could be sold. That had never happened before m connection with the breaking down operations of Verey lights. It is not even mentioned in Command Paper 2099. The Financial Secretary is responsible for seeing that not only shall such a thing not occur again, but that if there has been negligence, there shall be no question of these people being employed again, or that those whose technical qualifications are doubtful should be again allowed the opportunity of endangering the lives of workers.

Enemy Action Claims

I should also like to raise a question on the Adjournment. It is one that is becoming very familiar to my hon. Friend the Financial Secretary to the Treasury. It is also a tragedy. It concerns those who for four years have been waiting for compensation for enemy action. Before Easter, I took a deputation to the President of the Board of Trade, and we had a long discussion together about this matter. I was therefore surprised to see the Financial Secretary's reply to-day when a question was asked as to whether he would leave the question of the £300,000 for belated claims to the free vote of the House. I asked a supplementary question as to whether he would increase that amount, and the hon. Member said that he could not allow those outside who might benefit by this to be optimistic that the money would be forthcoming. I hope that reply did not definitely turn these people down, because it is a matter of justice, and, at the very least, these belated claims should be paid in the same ratio as the others who were paid out of the £5,000,000. Whatever money the Treasury may be able to put aside, it certainly should put aside sufficient money to enable these people to be treated with the same degree of justice as those who received sums out of that £5,000,000. Even then they will not be treated with very much justice, but at any rate they will have had equal treatment.

Those of us who are interested in this question feel that some sort of inquiry, or, if the hon. Member preferred, another Royal Commission—though I should think an inquiry would be quite sufficient—should be set up to ascertain whether the £5,000,000 was sufficient to meet the claims in full. He will recollect that when this Royal Commission was originally set up, it was to decide how the £5,000,000, which had aready been put aside by the Government, should be spent. They were not allowed to decide as to whether one person should be assessed at so much or another at some- thing less. They were simply told that only £5,000,000 was available, and that they were to spend it to the best advantage. The consequence was that many people who should have received double, treble, and even ten times the amount they did, only got very small cheques, because the Royal Commission had assessed them at a sum of money in view of the fact that only £5,000,000 was to be distributed. Possibly the finances of the country are not such as would justify all these case being paid in full, but it is obvious that £5,000,000 is not sufficient, and the hon. Gentleman the Secretary to the Treasury might surely be able to put aside an amount which would enable a percentage of some kind to be paid on these claims. If he cannot do that, will he agree to an inquiry into the whole question? We are not frightened of inquiry. We believe in the justice of our case. We are convinced that these people ought to be paid, and that any inquiry set up by any Government would come to the same conclusion as we have come to. Let the hon. Gentleman agree to set up an inquiry to go into the whole question and to report how much would be sufficient to meet the cases and how much should be set aside for the purpose. The Government could, of course, take its decision on that report and we would then be satisfied. I hope the hon. Gentleman will meet us in that spirit and not take the view of the Treasury and say "No." If he does take the Treasury view, we shall have to try and force the Government to give us this money. I have never taken up any attitude differentiating between.Governments. They have all treated these cases with very scant courtesy. But I want the hon. Gentleman to consider the case apart from the party point of view and with a view to doing the best we can for these people. I hope he will agree to set up something in the nature of an inquiry into the whole matter so that we can have a discussion without coming to blows in Debate and without moving reductions of salaries. All we want is an unprejudiced settlement which will benefit these poor people.

I have had many of these claims through my hands as representative of a seaport. It seems to me that the Financial Secretary has no cause to differentiate between belated claims and the original claims. A claim is either just or unjust and in point of fact by differentiation against a belated claim the hon. Gentleman may differentiate against a most deserving case. The man who puts in a belated claim is the man who has been at sea and who has probably been ignorant of his right to put in his claim. He is the poor, helpless man who has lost his chance. The hon. Gentleman says that these are ex gratia payments. Of course, they are, but so were the payments already made, and as between the two separate cases there is really nothing to choose. Is the hon. Gentleman quite sure, that he has not received funds to which these people are entitled? There are funds paid by the Germans on account of reparations. Of course, I admit that on these funds the Army of Occupation have the first claim, but after that I contend these people have a claim—those people who suffered in person and in property from enemy action. Under the German Reparation Recovery Act last year the sum of £7,000,000 was received. Of this, £2,000,000 went to the Army of Occupation, and therefore the Treasury has been in receipt of many millions upon which I suggest these people have a claim. I hope some further assistance may be forthcoming for them.

I have had to deal also with many of these cases, especially with claims from fishermen, and I happen to have had a letter from the Reparation Claims Department, dated the 7th April this year, in which, in reply to a case I put forward, they said that the Royal Commission were clothed with unfettered discretion in the matter of distribution of the £5,000,000, that they had made their Report upon the distributon, that it had been accepted and that nothing further could be done. I think it is altogether wrong for any position of that kind to toe taken up. At any rate this House has the right to say the final word with regard to the distribution of that money. I think we have a perfect case in this matter. There has been very great injustice done to many men, and these people have received totally inadequate compensation. The Financial Secretary to the Treasury knows the facts in many of these coastal cases, both in Scotland and in England, and I am sure he sympathises with these people. Many of them did not know they had a right to put in a claim, and as a result now their claims have been sent in late they have been ignored altogether. I am convinced that many cases have had no consideration whatsoever. I do hope the Government will take the view that these cages ought to be met, and I am sure that if they were it would not involve this country in any very considerable burden. Having heard what the Chancellor of the Exchequer is prepared to do in reducing the Entertainments Tax, I really think we may look for some relief for these people who suffered at the hands of the enemy during the War. If we do not get some degree of satisfaction, I shall have to bring the matter before the House on another occasion.

Hon. Members in different parts of the House have raised questions upon which, as briefly as possible, I must give this House such information as I possess. In the first place, my hon. Friend the Member for West Ham North (Miss Lawrence) raised the question of the explosion at Slades Green Factory, and the steps taken to compensate those unfortunate people or their dependants who suffered by it. I think it is common ground in all quarters of the House that the circumstances called for inquiry, but my difficulty to-night is that this explosion has already been the subject of an investigation, and the report of the inspector has been presented in a Command Paper to Parliament. I quite realise that on that report there will be considerable differences of opinion, and it may be that many Members will take the view that it does not deal adequately with the circumstances which gave rise to this trouble. The report is being very carefully considered at the present time both by the Home Office and by the Treasury, and, as my hon. Friend the Member for Dartford (Mr. Mills) has indicated, I have undertaken to-morrow to see the representatives of the families affected, so that we may consider together the question of compensation and whether there is anything the Government can usefully do in this connection. We have still to ascertain many of the relevant facts. As I understand it, the object of my hon. Friend in making the statement to-night was in order that it might appear in the OFFICIAL REPORT and we should have the benefit at our meeting to-morrow of the facts which have been submitted. In view of that I do not think the House will expect me to make a full statement, especially as the case is sub judice.

Then there is the question raised by the hon. Member for Thanet (Mr. Harmsworth), the hon. and gallant Member for Leith (Captain Benn) and the hon. Member for Montrose Burghs (Mr. Sturrock). The case is familiar enough in this House, and although I have spoken upon it on former occasions I make no complaint that it has been brought up again to-night. The case, as the hon. Member for Thanet says, undoubtedly represents a tragedy arising out of the War. As the House is aware, the people living on the coast were advised and very nearly implored to insure themselves against losses by enemy action. In fact, a very large number of the people did so insure, but there were others who did not take the precaution, and it is these who, having suffered by enemy acts during the War, are now putting forward a claim on the Government. I never heard it argued or even seriously contended that there was any legal liability of any kind on the part of the Government. I must point out again that it can hardly be alleged that the Government have turned a deaf ear to these appeals, because they set aside voluntarily a very considerable fund and actually entrusted a Royal Commission with the duty of investigating the claims. The duty of investigating all those claims and apportioning that sum of £5,000,000 upon a certain scale, which would be payments to be made in full, having regard to the loss sustained, occupied a certain amount of time, and naturally there has been a good deal of delay, but it was necessary that the investigation of the claims should be very thorough, and that there should be very great care exercised in making the recommendations. This sum of £5,000,000 was eventually apportioned, but there remained another class of applicants who bad not seen the numerous advertisements and did not prepare any claims. Very soon after this Government commenced its very difficult career we made a further provision of £300,000, which on the whole seemed a fairly generous sum at the time, in respect of the belated claims, and the process of the assessment of these belated claims will, I hope, be concluded at a comparatively early date.

It is beyond my power at this stage to give the House precise information with reference as to what exactly will happen as to the allocation of allowances for belated claims, because everything depends on the assessment and other considerations. But in the aggregate, by way of voluntary allowance, ex gratia, without any real liability, £5,300,000 has been provided. My hon. and gallant Friend, with that skill which is characteristic of the city to which he now belongs, says, "Have we a claim against the reparations payments in so far as reparation payments have been made?" On the broad issue, reparation payments are claimed by one country as against another and are not a claim by individuals, and, without going into the reparations issue as a whole, I should say that there would be considerable difficulty in making out a case for a section of the community. But I agree entirely that these people did suffer, and it would still remain for any Government to see whether anything more should be done, if the Government felt that it had not already done enough, having regard to all the circumstances of the case. On the reparations issue my hon. and gallant Friend would be the last person to seek to commit me to a precise statement to-night.

Is it a fact that in the Treaty of Versailles these people were definitely recognised as having a claim, and that this £5,000,000 was really granted by the British Government on account, because the Germans were so slow in paying reparations?

I do not know what the reparations arrangements will be in future, and consequently it would be a little dishonest on my part to hold out any hope on this point, because I have no information upon which any such hope could be built. The hon. Member for Thanet asks me to agree to some further inquiry on this matter, to have a perfectly full and open inquiry into all the facts. I am afraid that the reply to that must be that, after all, though there was this limit on the Royal Commission, there was, nevertheless, a very full inquiry into the claims. I am not sure that any further investigation could give us any more information. I cannot make any promise, but I will consider the matter, and I will tell hon. Members within a day or two what I think. In reference to all that has been done for undoubted sufferers by the form of enemy action to which reference has been made, we must keep in view the provision which people made by insurance. If they took that precaution they had their loss so far safeguarded. Not only that, but the people who are applicants for part of the original grant, or it may be of the £300,000, are people who have got allowances in a good many cases from other sources, and though there is a considerable amount of hardship hon. Members must not put that hardship too high. Of course I cannot bind the Chancellor of the Exchequer or the Treasury. It would be wrong for me not to emphasise the facts which I have brought before the House, but there is no lack of sympathy on our part. We appreciate the difficulty and I am willing to explore any other avenue, and to tell hon. Members again, in the course of a few days, whether I have been able to find any such as would meet the difficulty which they have raised on the Adjournment to-night.

In reference to the Slades Green matter, as I understand the deputation to-morrow is concerned with compensation and so on, but the reason we want an inquiry is because the Home Office inquiry would not take into account the sort of statements that were made by the hon. Member for East Ham, North (Miss Lawrence), to-night and by the hon. Member for Dartford (Mr. Mills) in connection with the formation of the company to whom these contracts were given, and the exclusion of another company which, people maintain, was better able to carry out the work. It seems to me that no amount of compensation, no amount of meeting the point in regard to financial claims, ought to blind us to the fact that this House ought to know why this particular firm was given this particular contract, and it is for that reason we want the investigation.

My hon. Friend will find after to-morrow that we have covered a great deal of ground. I am not forgetting the point which he has raised. It is essentially a Home Office point.

It is not a Home Office point. Future protection is a Home Office point, but what happened in 1921 is a Disposal Board point.

Is it not the fact that the Disposal Board has now finished its work and therefore it is within the province of the House of Commons or any Member to raise questions concerning that Board?

Question, "That this House do now adjourn," put, and agreed to.

Adjourned accordingly at Twenty Minutes before Eight o'Clock.