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Commons Chamber

Volume 205: debated on Monday 11 April 1927

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House Of Commons

Monday, 11th April, 1927.

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

Private Business

Chelsea Borough Council (Superannuation and Pensions) Bill,

  • Read the Third time, and passed.
  • Tyne Improvement Bill [Lords],
  • Read the Third time, and passed, without Amendment.
  • Yeadon Waterworks Bill [Lords],
  • Read the Third time, and passed, with Amendments.
  • Great Indian Peninsula Railway Annuities Bill [Lords],
  • Not amended, considered; to be read the Third time.
  • Leeds Corporation Bill,
  • Westgate and Birchington Water Bill,
  • As amended, considered; to be read the Third time.
  • Bury Corporation Bill [Lords],
  • Read a Second time, and committed.
  • London and Home Counties Joint Elevtricity Authority (No. 2) Bill.

To be read a Second time upon Wednesday.

Oral Answers To Questions

India

Rangoon (Fire)

1.

asked the Under-Secretary of State for India if he has received a Report of the fire which broke out in the Ahlone quarter of Rangoon, in Burma; if so, whether he can state the number of houses that were entirely destroyed and the number of people that were rendered homeless; whether any deaths or serious injuries have been reported from this fire; how many European bungalows were destroyed; and what is the estimate of damage caused?

No official report of this fire has been received, in amplification of the accounts given in the public Press. It has been stated in those accounts that no lives were lost.

Liquor And Drug Licences, Sind

3.

asked the Under-Secretary of State for India whether His Majesty's Government is aware that in February last licences of shops for the sale of intoxicants, opium and other drugs were sold by auction in Sind; whether this is the general policy of the Government of India; and whether these auction sales are annual or for what period?

My Noble Friend has no report covering last February. Provincial governors acting with their Ministers are responsible for policy in this matter. Arrangements vary in different Provinces, but, according to the latest information received, the system of annual auction obtains in several of them, including Sind.

Civil Aviation

6.

asked the Under-Secretary of State for India whether he is now able to inform the House as to the manner in which the Rs.3,96,000 provided for civil aviation in the Indian Budget for 1927–28 is to be used.

As the reply contains a number of figures, I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.

Following is the reply:

The principal items are:

Rs.
Pay of officers and establishments52,000
Establishment of civil air route across India1,50,000
Survey of primary air routes25,000
Provision of hangar at Karachi for Egypt-India aeroplane service37,000
Contribution towards Imperial airship scheme1,00,000
3,64,000

The remaining Rs.32,000 are provided for other small miscellaneous items.

Malabar Tenancy Bill

8.

asked the Under-Secretary of State for India if he is aware that on 2nd September, 1926, the Madras Legislative Assembly passed the Malabar Tenancy Bill, for the protection of tenants against eviction, etc.; that despite the fact that it was supported by nominated as well as elected members, and the representatives of various political parties and communities, the Bill was vetoed on 1st November by His Excellency the Governor of Madras; and whether the exercise of the veto on a purely domestic issue took place after previous consultation with His Majesty's Government?

The answer to the first part of the question is in the affirmative. The Governor, in the discharge of his responsibility under the Government of India Act, withheld his assent for reasons explained in a Press communiqué, a copy of which I will send to the hon. Member. His Excellency did not previously consult His Majesty's Government.

Roads

9.

asked the Under-Secretary of State for India if any proposal has been received at the India Office for the provision of expert advice and assistance to the Indian Government in connection with the improvement and development of the Indian road system?

No such proposal has been received. A resolution, a copy of which I can send to the hon. Member, was adopted by the Indian Council of State on 9th February last, recommending the appointment of a Committee to examine the desirability of developing the road system of India. The resolution was accepted on behalf of the Government of India.

Agriculture Commission (Report)

10.

asked the Under-Secretary of State for India whether he has any information as to the probable date at which the Report of the Royal Commission on Indian Agriculture may be expected, and as to the possible issue of an ad interim Report by that Commission?

Disturbance, Kalakati, Bengal

11.

asked the Under-Secretary of State for India whether he has yet received from the Government of India the Report of the District Commissioner into the incident at Kalakati, Bengal, when 37 rounds of ammunition was fired into in unarmed crowd by a contingent of the Eastern Frontier Rifles, acting under orders from the district magistrate and the local superintendent of the police; and whether it has been decided to hold an independent public inquiry into the whole affair?

The Divisional Commissioner's Report is on its way by mail, together with the local Government's conclusions, and my Noble Friend has so far received only a brief telegraphic summary of it. Until he receives the full text of the Report, and the Bengal Government's views upon it, my Noble Friend does not propose to make any further statement about it. So far as I am aware, it is not intended to hold an independent public inquiry. I observe that the hon. Member repeats in this question his description of the crowd as unarmed, although the reports which I published in answer to his question on the 24th March made it quite clear that the description was incorrect.

My Noble Friend would require to see the report before he can make any statement on that subject.

China

Indian Troops

7.

asked the Under-Secretary of State for India whether any agreement has yet been arrived at between His Majesty's Government and the Government of India with regard to whether the cost of sending Indian troops to China will eventually fall on Imperial funds or on the revenues of the Government of India?

It has been decided that no part of the cost of the Shanghai Defence Force shall be borne by Indian revenues.

Police Search, Peking

60.

asked the Secretary of State for Foreign Affairs if he can give the House any information about the recent entry of Chinese troops into the Legation Quarter of Peking?

65.

asked the Secretary of State for Foreign Affairs whether admission into the Legation Quarters in Peking of the troops of Marshal Chang Tso-lin, which raided the Russian Embassy, was authorised by the British diplomatic representative in that city in common with the representatives of the other Powers?

66.

asked the Secretary of State for Foreign Affairs whether His Majesty's Minister at Peking has associated himself with the diplomatic representatives of the other Powers in Peking in signing the authorisation to enter the Legation Quarter for the troops of Marshal Chang Tso-lin which raided buildings there adjoining the Russian Embassy and belonging to the Russian Government and arrested the occupants; and if he will state what the circumstances were?

I will answer these questions together. The following preliminary report of the circumstances has been received from His Majesty's Minister, who states that the Chinese authorities have promised to communicate full particulars of the results to the Senior Minister, who is the representative of the Netherlands (M. Oudendijk). He will circulate them to all the Protocol Powers as soon as possible.

The chief of the Metropolitan Police called on the Senior Minister on 6th April, with a letter in duplicate calling attention to the subversive activities of Russians in the Legation Quarter, and requesting authority to search certain specified Russian property, namely the Dalbank, the Chinese Eastern Railway building not actually inside the Russian Legation itself, and the building belonging to the Russian Indemnity Commission. The original of this letter was duly countersigned by the Senior Minister, authorising ingress for the Metropolitan Police, and handed back to the authorities. The Senior Minister had previously consulted the representatives of the other Protocol Powers, who decided that the hospitality of the Quarter must not be used against the local Government, and agreed that provided the local authorities came furnished with the proper warrant, the Legation Quarter Police should be instructed under a specific order from the Senior Minister to allow them to search any suspected Russian private property specifically named in the warrant.

The search began at 11 a.m. and continued throughout the day. It was effected by the Metropolitan Police, some gendarmes and many plain clothes detectives. An attempt was made by the Russians to burn some documents, but this was frustrated. The senior Minister has informed His Majesty's Minister that among the captures was a list of names of 4,000 agents in Peking ready to that among the captures was a list of stir up trouble and commit acts of violence at a given moment. Other seizures comprised one machine-gun, 30 rifles and a quantity of ammunition, together with a number of flags with inflammatory slogans which were to be used for demonstrations.

Official seals were captured of the "Anti-British Committee," whose special function appears to be agitation against Great Britain. The seals of similar committees for agitation against Japan and France were also seized. 22 Russians were arrested, and between 40 and 50 Chinese, for whom the authorities had long been searching, including the recognised leader of the Communist party of North China, who had taken refuge with the Russians.

The Russian Embassy itself, which is shut off by a high wall, was strictly respected, though the raiding party exceeded their authority by overflowing into the barracks of the Imperial Russian Legation Guard, which are separated from the Embassy proper and lie west of the wall. Though it can be argued that the barracks have no claim to diplomatic immunity, seeing that Russia has no longer any right to the guard, the Protocol Powers, through the senior Minister, thought it well to address a protest to the Government against the action of the police in thus exceeding the specific authority given by the senior Minister.

The following communiqué was issued on the night of 6th April by the Chinese Government:
"The Chinese Government, having been informed of the presence in the Dalbank and the office of the Chinese Eastern Railway of arms and ammunition, and knowing that these places have been centres of Communist agitators, decided to conduct a search. The search has been made on the basis that these places are not covered by diplomatic immunities and that the Soviet Government has renounced the privileges provided for in the Protocol of 1901, as well as the rights of extra-territoriality. Therefore the Embassy itself, only has the privilege of inviolability.
"The search was effected at 11.0 this morning by Chinese police after the Chinese authorities, on the presentation of a regular warrant from the judicial authorities, had received from the competent authorities of the Legation Quarter the necessary authorisation for the execution of the warrant."
I have since received information that, after taking cognisance of the letter from the Metropolitan Police, at a meeting of the Protocol Powers on the 9th instant, it was agreed that the Senior Minister should at once reply in a letter which, after acknowledging the receipt, proceeds as follows:
"I am desired by my colleagues to inform you that they expect all persons who were arrested by the Chinese police in the course of that search will receive a fair trial before the competent judicial authority. I shall be happy to receive an assurance from you to that effect."

What guarantee has the right hon. Gentleman that the Chinese arrested in this Legation property will be properly treated and tried?

It is easy to ask for guarantees in the present position of China, but it is less easy to state what those guarantees should be.

Can the right hon. Gentleman say why guarantees were not asked before permission was given for the raid to be made?

May I ask if the right hon. Gentleman is not quite satisfied in all the circumstances that the ingress of the Chinese police was abundantly justified?

Is there any truth in the report that some of the Chinese arrested have already been executed?

As far as I know, there is no truth in that report. With regard to the question put by the hon. Member for Stroud (Sir F. Nelson), I have given the House all the information I have in my possession at the present time. It appears to me quite clear that the Protocol Powers were right in saying that the protection of the Legation quarter should not be given to conspirators against the local Government.

Would the right hon. Gentleman consider the practicability of the Protocol Powers consenting that each should give similar authority to each other to make similar searches in Soviet institutions in their respective countries where they may expect to find the same proceedings going on as in the Soviet Embassy in Peking?

Nanking Outrages

61.

asked the Secretary of State for Foreign Affairs whether the text of the Note sent to the Nationalist Government of China with regard to the recent events at Nanking and elsewhere can now be comrminicated to Parliament; and whether he has any further information to give the House on this subject?

64.

asked the Secretary of State for Foreign Affairs what steps have been taken in consequence of the recent events at Nanking?

I will answer these questions together. The United States, Japanese, French, Italian and British Governments have agreed the terms of a communication which was to be made to Mr. Chen and to General Chiang Kai-shek to-day. It would not be proper for me to disclose its terms before I learn of its actual presentation, but I will publish it as soon as possible. I think it may be possible to publish it tomorrow.

Legation Guards, Peking

62.

asked the Secretary of State for Foreign Affairs whether the Foreign Legations at Peking maintain guards for their defence; whether these guards are armed; whether the British Legation maintains such armed guards; whether munitions are kept at our Legation in Peking for its defence; and whether Chinese troops and armed police are permitted to enter the Legation quarter at Peking?

Legation guards are maintained in Peking by Great Britain, France, Italy, Japan, and the United States of America. The answers to the second, third and fourth parts of the question are in the affirmative. As regards the fifth part of the question, Chinese troops and police are not permitted to enter the Legation quarter unless the authorisation of the Ministers representing the Powers party to the Protocol of 1901 has first been obtained.

Does that mean that if a raid took place at the British Legation, munitions would be found?

Tientsin Concession

63.

asked the Secretary of State for Foreign Affairs whether he has any information as to the extent to which the British Concession at Tientsin is being used as a base for conspiracies against the established Government in that part of China; and whether he will take steps to prevent Chinese criminals sheltering under the British flag?

I have no information of any such use of the British Concession since the action taken on 23rd November last as described to this House in an answer given by ray hon. Friend the Under-Secretary on 13th December, but I can assure my hon. and gallant Friend that any persons abusing the hospitality of the British Concession to conspire against the Chinese authorities will be arrested and handed over to the local authorities on production of a warrant duly issued and countersigned.

Russian Troops, Manchuria

67.

asked the Secretary of State for Foreign Affairs if he has received any reports as to the mobilisation of Russian troops on the border of Manchuria?

I have been asked to reply. I have seen reports to this effect in the Press, but I have no authentic information.

May I ask whether the right hon. Gentleman is aware that extensive preparations are being made by Russia in China?

Russian Consulate, Shanghai

68.

asked the Secretary of State for Foreign Affairs whether His Majesty's Consul-General at Shanghai and the General Officer commanding British troops were consulted before the Russian Consulate at Shanghai was surrounded by volunteers and police and all persons entering and leaving subjected to search; and, if they agreed to this action, what were the reasons for this violation of diplomatic immunity?

His Majesty's Consul-General and the General Officer commanding British troops at Shanghai were not consulted with regard to the action described. I am informed that the Soviet Consul-General has been informed by the Senior Consul that responsibility for maintenance of law and order rests not with the Consular body but with the municipal council. The latter body has issued the following account of the police measures taken at the Soviet Consulate:

"On the evening of Wednesday, 6th April, the Commissioner of Police, hearing of the raid by Chang Tso-lin's troops on the Soviet Embassy, Peking, and being in possession of considerable information as to the intensity of hostile feeling against the Soviet Consulate and its activities in Shanghai, immediately took steps to plate these premises under surveillance. To this end he detailed police guards about the building, which were continuously on duty during that night and the forenoon of the following day."
Shortly after noon on Thursday, 7th April, the Chairman of the Council received a communication from the Senior Consul, who had recently been visited by the Soviet Consul in Shanghai. From what the Soviet Consul had said to the Senior Consul it was evident that the former was extremely apprehensive of a raid being made on his Consulate. The Chairman of the Council accordingly instructed the Commissioner of Police to increase the guards round the Consulate, and to search all persons entering and leaving for weapons.

Why was it necessary to put White Russian refugees as police around this Consulate?

Has any protest been lodged by His Majesty's Government against this violation?

Does that imply that the troops around this Consulate at Shanghai have been put there to prevent a raid similar to the raid that took place at Peking?

I do not desire to imply anything, but merely to give the House the information I have as to the statement made to the Municipal Council by the police.

Is it true that troops of the type around t he Consulate now in Shanghai were executed by a Chinese general of the North?

Singapore (Disturbances)

12.

asked the Secretary of State for the Colonies whether he is now in a position to give the House any further information relative to the recent disturbances and loss of life which took place at Singapore; and whether it is his intention to institute an inquiry into the whole of the incidents connected with the disturbances?

It has been reported in the Press that the inquest terminated on Saturday, and I am expecting to receive particulars of the findings from the Governor in due course.

Colonial Office Conference

13.

asked the Secretary of State for the Colonies whether he will suggest to Colonies which are not able to send representatives to the coming Colonial Conference their deputing some ex-official, now resident in this country, to take part in the Conference on their behalf?

The possibility of nominating ex-officials to represent Colonies and other Dependencies which would otherwise be unrepresented at the Colonial Office Conference in May has not been overlooked, but it was not considered desirable to adopt such a course. As my Noble Friend will have observed from the list of delegates recently published, almost all the more important Dependencies will be represented at the Conference.

Palestine

Roads And Railways

14.

asked the Secretary of State for the Colonies whether it is the settled policy of His Majesty's Government in Palestine not to build roads paralleling railways; does this policy apply to a road down the Emek from Haifa to Beisan, where the railway paralleled does not belong to the Government; and does it apply to a road between Jaffa and Haifa where the railway does belong to the Government?

The answer to the first part of the question is in the negative. Every proposal for road construction in Palestine is considered on its merits by the Palestine Government, which is advised by a Road Board. It may, of course, be undesirable, on economic grounds, to construct a road which would' merely compete with the traffic on an existing line of railway.

Will the right hon. Gentleman bear in mind the difference between the railway which does not belong to the Government and the railway which does belong to the Government?

Infant Mortality

15.

asked the Secretary of State for the Colonies what are the latest figures for infant mortality in Palestine, distinguishing if possible between Arab and Jew; and what steps are being taken to improve these figures?

1924184·83
1925188·64
1926163·15

Similar figures in respect of the various sections of the population of Palestine are not available. As regards the latter part of the question, 29 non-Government infant welfare centres have been established in Palestine, to many of which the Government has given considerable financial assistance. In addition, two Government centres have been established, where special training by experienced British nursing sisters is given to women who wish to take tin infant welfare work. A training centre for midwives has been established, at which 43 women have already qualified and a scheme is on foot for establishing nursing clinics in a number of villages.

Passports (British Subjects)

16.

asked the Secretary of State for the Colonies why British subjects require a visa for Palestine; how much it costs; and to whom is this money paid?

A British subject does not require a visa for Palestine, but only an endorsement making his passport valid for travel to that country. There is no charge for an endorsement given at the same time as the issue of a passport, but in other cases a fee of 2s. is charged. Such fees are credited to the Appropriation-in-Aid Subhead of the Diplomatic and Consular Services Vote.

Citizenship Certificates

17.

asked the Secretary of State for the Colonies why certificates of Palestinian citizenship have been refused to Mr. Ariel Karp and Mr. Moshe Seeker?

I have no information on the subject, but will make inquiries from the High Commissioner.

Will the right hon Gentleman let me have the information when it is available?

Labour Clubs (Registration)

18.

asked the Secretary of State for the Colonies whether he is aware that the Palestinian Government have refused registration to the Club of Labourers, Ichud (Unity), in Jerusalem; and whether he will take steps to ensure that labour clubs are not in future denied ordinary legal facilities?

Colonial Agricultural Departments

19.

asked the Secretary of State for the Colonies whether he can say what action, if any, is contemplated in recruiting officers for the agricultural departments of the non-self-governing dependencies; whether any scholarships for training purposes are to be granted, and, if so, how many; what will be the value of any scholarships that may be granted; and whether any research organisation will be created to link up the various colonial departments of agriculture with the agricultural institutions in this country?

The arrangements for training agricultural officers for service in the Colonies with the aid of scholarships are explained in the answer given to the hon. Member for North Bradford (Mr. Ramsden) on 23rd February. The value of each scholarship is atmpresent £250 per annum for two years, with travelling and other allowances up to £150. In regard to the last part of the question, the recommendations of Lord Lovat's Committee which concern the proposal to establish a chain of Central Research stations overseas, and also a Colonial Agricultural Research Council in this country, are now under consideration.

Kenya

Discussions With Sir E Grigg

20.

asked the Secretary of State for the Colonies whether he has had any discussion with Sir Edward Grigg relating to Kenya Colony or East Africa; whether any conclusions have been arrived at with a view to the forthcoming Colonial governors' conference; and, if so, what is the nature of such conclusions?

I have had some discussions with Sir Edward Grigg regarding matters within his jurisdiction, but not specially with a view to the Colonial Office Conference.

Native Reserves

21.

also asked the Secretary of State for the Colonies whether in view of the fact that the future expansion of the native population has not been taken into account in delimiting the native reserves in Kenya Colony, and is admitted to be a subject requiring scientific study, he is taking steps to prevent the alienation of an undue amount of the 4,000,000 acres which are still in the hands of the Land Office?

I am not aware on what authority the hon. Member bases the assertion in the first part of the question. The Governor has recently stated publicly that in his opinion, and in the opinion of others who have visited the reserves, ample land is secured to the natives, not only for immediate use, but also for future development on a large scale. I see no reason for taking any special action at the present time.

Rubber Output (Restriction)

22.

asked the Secretary of State for the Colonies how long it is proposed to continue the Stevenson scheme for rubber restriction and if he can state its effect on the rubber industry in the British Empire?

As regards the first part of the question, I would refer to the reply given on 22nd February to my hon. Friend the Member for Kingston-on-Thames (Mr. Penny). The effect of the scheme upon producers has been the substitution of a remunerative price for one which in many cases fell below the cost of production, while users of rubber are benefited by a tendency towards stabilisation of prices, which is greatly to their interest.

Opium Consumers (Registration)

24.

asked the Secretary of State for the Colonies whether the registration of opium consumers is now generally applied in the Straits Settlements and Federated Malay States and, if not, how soon it will be applied?

Opium consumers are not registered in the Straits Settlements or Federated Malay States, though the Governments of those territories have put into operation certain measures which are designed to lead up to registration of consumers if and when circumstances permit.

25.

asked the Secretary of State for the Colonies whether any system of registration of opium consumers has yet been introduced in North Borneo; and, if not, whether representations will be made to the British North Borneo Company urging the desirability of taking this step, as a first measure towards the suppression of opium smoking contemplated in The Hague and Geneva Opium Conventions?

The Government of the State of North Borneo has recently introduced an experimental and tentative system of registration of consumers of opium.

Empire Settlement

27.

asked the Secretary of State for Dominion Affairs how many undertakings have actually been commenced in Australia as a direct outcome of the 1925 Agreement under the Empire Settlement Act, 1922?

Fifteen schemes have been approved as "agreed undertakings" under the Loan and Migration Agreement with the Commonwealth Government, as follow:

  • Victoria.—Three land settlement schemes.
  • Western Australia.—Ten schemes, comprising water supply, drainage, railway and farm schemes.
  • South Australia.—Two schemes of water conservation.
I understand that work has already commenced on most of these schemes.

Can my right hon. Friend say what is the amount of the expenditure on these schemes?

I am afraid I should have to have notice of that question, but I think it is over £3,000,000.

28.

also asked the Secretary of State for Dominion Affairs the number of requisitions issued per month for selected migrants to Australia, and covering a period over the last three months?

The number of requisitions for selected migrants to Australia for the last three months is as follows:

  • Farm workers: January, 300:
  • February, 250; March, 250.
  • Boys: 135 per month.
  • Domestic servants: 270 per month.

29.

asked if the group settlement scheme in West Australia has any further vacancies for suitable families; and, if not, whether an extension of the scheme is contemplated?

Recruiting under the group settlement scheme in Western Australia has not yet been fully resumed. Families are, however, accepted from time to time on requisitions by the State Government, who are, I understand, contemplating an extension of the scheme.

In view of the fact that it costs something like £2,000 to establish each settler on a Group Settlement, does it not follow that the numbers must necessarily be small, seeing that there is a limit to what a small State can afford to expend in this direction.

I am not quite sure that that figure represents the cost to-day, but there is no doubt that settlement is an expensive matter.

Is not the right hon. Gentleman giving active consideration to the question of increasing the grant for Group Settlement in the case of Western Australia?

The provisions under the 1925 agreement with the Commonwealth are more generous than the original provisions of the arrangement we made with Western Australia, and therefore we hope it may be possible for Western Australia to resume the group settlement scheme on the new basis.

30.

asked the Secre-Secretary of State for Dominion Affairs how many assisted selected migrants to Australia have left this country for each of the three months of this year?

The number of assisted selected migrants who sailed for Australia during the past three months is as follows:

January467
February683
March704
1,854

31.

asked the Secretary of State for Dominion Affairs if he will consider the desirability of arranging for a small number of migrants to the Dominions who have made good to pay a short visit to this country and lecture on their experiences?

I find that an arrangement of this kind was tried by the Canadian Government before the War, but was not found sufficiently effective to warrant the administrative difficulties and cost involved. The object which my hon. Friend has in view would appear to be met by the existing publicity arrangements, which include lectures and addresses by oversea visitors, some of whom are successful migrants with practical knowledge of settlement conditions.

Foreign Affairs (Co-Operation With Dominions)

32.

asked the Secretary of State for Dominion Affairs whether he has yet formulated any proposals for the establishment of machinery to ensure efficient co-operation with the Dominions in foreign affairs?

I would invite reference to the replies which I gave to questions by the hon. Member for Shrewsbury on 14th February.

What machinery is now in operation in cooperation with the Dominions?

I think it will take some time, but we have the machinery and we are gradually giving more information to the representatives of the Dominions.

Is not the Conservative Government's idea of progress the rake's progress?

Royal Parks (Bulb Displays)

40.

asked the Under-Secretary of State for the Home Department, as representing the First Commissioner of Works, whether the First Commissioner will next year bear in mind the complaints recently made at the Falmouth flower show, and elsewhere in Cornwall and the Scilly Islands, on the ground of the privileged position enjoyed by foreign bulb-growers in the London parks; and will he give the bulb-growers of Cornwall and the Scilly Islands an opportunity of demonstrating the quality of their blooms to the London public?

I must point out to the hon. Member that foreign bulb-growers have no privileged position in the Royal Parks. As has already been stated in this House, the First Commissioner will gladly give equal facilities for the display of home-grown bulbs, and announce that they are home-grown.

Trade And Commerce

British Industries Fairs

34.

asked the Parliamentary Secretary to the Overseas Trade Department what has been the loss to date on the series of British industries fairs, inclusive and exclusive, respectively, of the grants from public funds for publicity expenditure?

The loss on the series of British industries fairs from 1915 to 1927 is £9,500. Grants have also been provided from public funds in the last two years for publicity expenditure totalling £46,000.

Having regard to the need for public economy, will the hon. Gentleman consider transferring the matter to a competent outside organiser?

It might interest the hon. Member to know that the home buyers attending the exhibition in 1922 were 49,000, whereas in 1926 they were 73,000.

Is the hon. Gentleman aware that many persons, including myself, can attract that number of buyers to an exhibition?

35.

also asked whether the charge on the British Industries Fair of £3,000 in respect of overhead expenses was arrived at after a careful analysis of such expenses?

Cotton Industry, Lancashire (Recapitalisation)

46.

asked the Prime Minister whether he can now say if he proposes to appoint a Committee to investigate and report upon the recapitalisation of the Lancashire cotton trade during the years 1919 and 1920, and the manner in which reflotation took place, involving heavy financial losses, including the life savings of many working men and women in Lancashire?

I have been asked to reply. I would refer the hon. Member to the answer given on the 5th May last to the hon. Member for the Gorton Division to which I have nothing to add. I am sending him a copy.

Has the hon. Member full information as to the tremendous losses of the working classes in Lancashire when this gambling went on?

I think all the particulars are known, and we are expecting to have the official receiver's report shortly.

Is the hon. Member aware of the losses sustained by the working classes in Lancashire by the present situation in China, and will he convey that information to hon. Members opposite?

Is the hon. Member aware that the working classes of Lancashire have already protested against any further waste of public money in China?

British Steel (Indian Imports)

52.

asked the President of the Board of Trade if the preferential rates of duty on British steel entering India are now in operation, and the average ad valorem advantage to British steel?

The Act providing for different rates of duty on iron and steel of certain descriptions according as it is or is not of British manufacture came into operation on 1st April. The advantage in favour of these descriptions of British iron and steel ranges from 11 to 26 rupees per ton according to class, but I am not in a position to say what is the average ad valorem equivalent of this advantage. Full details of the new rates are set out on pages 203–4 of the Board of Trade Journal for 17th February.

Woollen Textile Goods (Imports)

53.

asked the President of the Board of Trade what was the amount of woollen textile goods imported into this country for the period of three months ended 31st March, 1927?

I would refer my hon. Friend to the figures on page 62 of the Monthly Trade Accounts for March, which will be published to-morrow?

Is it not a fact that these goods imported during the three months represent employment that could have been given to the unemployed in the textile industry in Lancashire? Will the hon. Member convey that to the Chancellor of the Exchequer before he makes his speech?

Japan (British Trade Marks)

33.

asked the Parliamentary Secretary to the Overseas Trade Department what action his Department is taking regarding British trade marks previously recognised in Japan, particulars of which were lost in the earthquake in that country; and whether the Japanese Government have raised any difficulty regarding the re-registration of British trade marks?

Application for the re-registration of trade mark rights in Japan registered in that country at the date of the earthquake of 1923, must be made by the owners of such trade marks. I am not aware that any special difficulty exists in connection with the re-registration of such marks.

Is the hon. Gentleman aware that the Japanese Government have refused to re-register a great many of these trade marks?

If the hon. Member will let me know any cases which have come to his knoweldge, I shall be glad to look into them.

Agriculture

Small Holdings (East Riding County Council)

36.

asked the Minister of Agriculture if he will give particulars of the proposals submitted to him by the East Riding County Council under the Small Holdings and Allotments Act, 1926; what modifications he made when approving such proposals; and the reasons for such modifications?

The council proposed to purchase 26frac34; acres of land (mostly arable), situated four miles from Selby; to expend £125 on the repair of existing farm buildings, and £725 on the provision of a new house; and to let the property in one holding to a resident tenant at a rent of £80 per annum. As the land in question is suitable and well-situated for intensive cultivation, the Ministry's technical advisers suggested to the county council that it should be sub-divided into four small holdings and let to suitable tenants living in the neighbourhood. This suggestion was accepted by the county council. The estimated loss on the scheme was thereby reduced from £59 per annum to £24 per annum.

Butter

37.

asked the Minister of Agriculture the total consumption of butter in this country during 1926 and the proportions thereof drawn from home, Empire, and foreign sources, respectively?

Estimates of the quantity of butter made on farms in England and Wales in 1925 will be found in "The Agricultural Output of England and Wales" (Cmd. 2815) recently published by my Department. As similar estimates for Scotland and Northern Ireland and figures of the industrial production of butter in the United Kingdom are not yet available, I regret that I am unable to furnish the desired information.

Allotments

38.

asked the Minister of Agriculture the inclusive rents per acre fixed by local authorities and payable by allotment holders in respect of land purchased for allotments in 1925 by local authorities?

I regret that I have not the information desired by the hon. Member. To collect the required particulars it would be necessary to circularise all local authorities who purchased land for allotments during the year 1925.

Slaughter Of Animals

39.

asked the Minister of Agriculture whether he will consider the advisability of promoting legislation making it compulsory for all slaughterers to effectually stun any animal, before proceeding to slaughter, with a mechanically-operated instrument suitable and sufficient for the purpose?

I have been asked to reply. My right hon. Friend sees no prospect of the Government considering the introduction of legislation on this subject.

British Legion (Cenotaph Service)

41.

asked the Postmaster-General why he has refused the request of the British Legion to broadcast their annual Cenotaph service on Whitsunday, in view of the value of this service to thousands of ex-Service men and widows and dependants of ex-Service men who are unable to be in London on this date?

No such request has been made to me. The matter falls within the province of the First Commissioner of Works.

I put my question down to the First. Commissioner of Works but it was altered at the Table to the Postmaster-General.

I am sorry that should have occurred. The matter has nothing to do with the Post Office at all. Perhaps my hon. and gallant Friend will put it down again to the Office of Works.

Telephone Directory (Printing)

42.

asked the Postmaster-General whether the printing of the telephone directory has ever been submitted for public competition; and, if so, what was the last date that this was done?

My information is to the effect that in 1888 the contract to print the directory issued by the National Telephone Company was awarded as the result of public competition. On the transfer of that company's property to the State in 1912, the printing of the telephone directories was continued in the hands of the previous contractor until 1920, when the work was assigned to the State printing factory.

In view of the increased charges since the date the right hon. Gentleman last mentioned, will he in future ask for public tenders?

Cream Substitutes

44.

asked the Minister of Health whether he is aware that, in view of the Order that no preservatives can be used in cream after January, 1928, some traders are preparing to make cream from a cheap type of imported butter and milk powder; and whether he will make inquiries into this matter and issue Regulations to stop any such procedure?

My right bon. Friend has no power to make Regulations to stop the manufacture of such a substitute for cream as is described in the question, but the existing provisions of the Sale of Food and Drugs Acts would appear to be sufficient to prevent it being sold as cream. I may perhaps add that the prohibition of preservatives will apply to the substitute as well as to cream, and I am advised that the keeping properties of the substitute might be expected to be less than those of genuine cream.

Is it not possible for the Minister of Health to make an Order prohibiting the sale of this synthetic product as cream, and make it compulsory to sell it under some trade name?

I have already stated that the existing provisions of the Sale of Food and Drugs Act would appear to be sufficient to prevent it being sold as cream.

Thames Bridges

45.

asked the Prime Minister whether he has received a copy of the improvements committee's recommendations from the London County Council on cross-river traffic; and, if so, whether he can make a statement as to the Government's attitude?

The answer to the first part of the question is in the affirmative. I hope to send a reply very shortly to the recommendations made therein.

In view of the altered circumstances, will the right hon. Gentleman receive a further deputation on the subject?

Air Warfare

49.

asked the Prime Minister whether, in view of the fact that the Geneva Conference is attempting to deal only with the reduction and limitation of armaments and not with methods of warfare and of the menace to urban populations in Europe of indiscriminate attack from the air, he will initiate proposals for the stricter regulation of methods of aerial warfare?

Whilst His Majesty's Government are fully alive to the potential horrors of air warfare and to the desirability of its stricter regulation, I think it would he inadvisable to complicate further the difficult issues already before the Geneva Conference by initiating at this juncture discussion of the very intricate problems involved, and that such action would he likely to retard rather than assist progress in disarmament. I may add that the regulation of methods of air warfare was considered by an International Commission of Jurists and a code of rules drawn up at The Hague in 1923.

Government Departments

Board Of Health, Wales

50.

asked the Minister of Health whether the Government propose to apply to the Welsh Board of Health the changed system of organisation which is now proposed for similar bodies in Scotland?

Section 5 of the Ministry of Health Act is framed in such a way as to avoid the necessity of referring all the business of the Board of Health in Wales to the Board as a whole. The Board therefore presents no close analogy to the bodies operating under similar titles in Scotland, and, as at present advised, my right hon. Friend sees no occasion for proposing to modify its methods of dealing with its business.

Tax Offices (Accommodation)

84.

asked the Chancellor of the Exchequer if he has received a complaint made by the Association of Officers of Taxes with regard to the overcrowding, excessive overtime, and understaffed and inadequate and unhealthy office accommodation in which these officers are expected to fulfil their duties; and can he state whether he is considering any improvements and, if so, what form are these improvements taking with reference to the complaint of these officers?

The answer to the first part of the question is in the negative. Complaints by the staff are always carefully considered, and if they are found to be justified, every endeavour is made to remove the ground for them.

Salaries

85.

asked the Financial Secretary to the Treasury what is the percentage by which salaries of civil servants who in 1914 were in receipt of a remuneration of £750 a year and over have been increased; and whether, in addition to this increase, such civil servants are receiving a bonus based on the increased cost of living?

There has been no general increase of pre-War or basic salaries of the nature suggested. The salaries of individual posts or classes are reviewed from time to time when consideration is given to changes in the responsibilities and duties of the posts in question, and the hon. Member will find in the Report of the Anderson Conanittee on Pay, etc., of State Servants, an analysis of the cost per head (including bonus) of the main groups of Civil Service staffs as compared with 1914. With the hon. Member's permission I will circulate in the OFFICIAL REPORT particulars as to the amount of cost-of-living bonus payable on basic salaries of £750 per annum and upwards.

The following are the particulars:

Pre-war or Basic Salary.Bonus to nearest £ on basis of average cost-of-living figure of 80.Bonus as per cent. of Salary.
££
75022630
1,00023423
1,50021314
2,000 (and upwards)Nil.

Stationery Office Printing Works

89.

asked the Financial Secretary to the Treasury whether he has arrived at any decision as to the closing of the Government printing works in Hare Street?

In view of the recent report and recommendations of the State Printing Committee can the right hon. Gentleman say when a decision is going to be arrived at?

I do not know that I entirely accept the view of my hon. and gallant Friend as regards the Committee.

Is the right hon. Gentleman aware that the closing down of this establishment would deprive the Chancellor of the Exchequer of a revenue of £9,000 a year?

90.

asked the Financial Secretary to the Treasury the number employed on the staff of the Stationery Office for the past three years?

The employeés of the Stationery Office on the 1st April, 1925, 1926 and 1927, numbered respectively 3,254, 3,144 and 3,119.

Lunacy Laws (Royal Commis- Sion's Recommendations)

51.

asked the Minister of Health whether he proposes to introduce legislation embodying the recommendations of the Royal Commission on the Lunacy Laws?

I would refer the hon. Member to the reply which my right hon. Friend gave to the hon. Member for St. Helens on the 10th March last.

Royal Navy

Aircraft Carriers (Cost And Size)

54.

asked the First Lord of the Admiralty if he can give the cost of construction and tonnage of the largest British aircraft carrier in service or under construction, and the annual cost of maintenance and repair, and the same figures for a representative modern aircraft carrier of 6,000 tons?

The answer to the first part of the question is

  • Cost, £4,617,636.
  • Tonnage, 22,600.
  • Annual Maintenance Charge, £408,000 (including about £130,000 for maintenance of Royal Air Force personnel and aircraft).
As regards the second part of the question, a ship of 6,000 tons could not be a representative modern aircraft carrier.

Battleships "Rodney" And "Nelson" (Cost And Construction)

55.

also asked the First Lord of the Admiralty the total estimated cost of construction and the tonnage of each of the battleships "Rodney" and "Nelson"; the estimated life of these ships and the estimated cost of maintenance and repair of each of these ships during each year of its life; and if he can give the same figures for a representative modern battleship of 10,000 tons?

The displacement of the "Nelson" and "Rodney" is 35,000 tons. With regard to the cost I would refer the hon. Member to my reply of 3rd March to my hon. and gallant Friend the Member for Aylesbury. The assumed life of a modern battleship is 20 years as stated in the introductory note to the Return of Fleets (Command 2809). The annual cost of maintenance of each of the battleships "Rodney" and "Nelson" in full commission in home waters at current prices is approximately £374,900. This figure includes pay, victualling, fuel, stores, repairs, etc.; as well as £46,800 for non-effective liability in respect of retired pay and pensions. A forecast of the cost of maintenance during each year of the lives of these ships cannot well be given, as the cost must vary according to whether the, ship is maintained in full commission or reserve, etc., whether it is stationed at home or abroad, as well as according to fluctuations in prices of materials, etc. With regard to th,3 last part of the question, a representative modern battleship could not be built on a displacement of 10,000 tons.

Dockyards (Discharges)

56.

asked the first Lord of the Admiralty whether he intends to conduct an inquiry to ascertain to what extent other Government Departments can purchase stores from His Majesty's dockyards in order to retain some of the employeés who would otherwise be discharged from these establishments?

I would refer the. hon. Member to the reply given him on the 29th July, 1925 (OFFICIAL REPORT, columns 411–912). It is not considered that any useful purpose would be served by an inquiry.

Can the hon. and gallant Member say why it is not possible to persuade the other Government Departments to acquire their stores from national establishments?

It is perfectly possible for Government Departments to avail themselves of the admirable stores supplied by the Admiralty. There is no need for an inquiry about that.

Will the hon. and gallant Member undertake to do something in order to relieve unemployment?

We are always doing our best, but perhaps we are not as good advertisers as we ought to be.

Will the hon. and gallant Member tell me how much loss was incurred when locomotives were bought from Woolwich Arsenal?

57.

asked the First Lord of the Admiralty whether he is aware that among the 600 men who have recently received notice of discharge at Devonport Dockyard there are many old and efficient servants of the State, to whom the loss of employment will prove disastrous; and whether, in these circumstances, he will consider the possibility of retaining the services of those who have given evidence of prolonged loyalty and efficiency?

The discharges are unavoidable, but naturally preference for retention is given to the most deserving and efficient men.

Is the hon. and gallant Member aware that some men have been discharged who have given practically a lifetime of efficient service in the Admiralty, and they have no chance of getting employment?

The Admiralty is only too well aware that many good men have to be sacrificed.

Portsmouth Dockyard (Disability Pension)

58.

asked the Parliamentary Secretary to the Admiralty if he is aware that in the case of a joiner in His Majesty's Dockyard who has lost his right eye, as the result of an accident in the yard, his earning capacity is now assessed as slightly impaired only and the pension granted is 8s. 5d. per week; if he can say who finally determines and assesses the questioned earning capacity; and if he will have the matter reconsidered?

Presumably my hon. and gallant Friend is referring to the case of a hired joiner who sustained detachment of the retina of his right eye as a result of an accident during his employment in His Majesty's Dockyard on the 27th November, 1925, and who, after return to full duty in December, was finally discharged from the Service on 29th January, 1926, at the age of 62 on account of reduction of staff.

The question of determining the impairment of earning capacity as a result of the injury in this case is one for the Treasury under the Government scheme of compensation framed under the Workmen's Compensation Acts.

The award has already been reviewed on the man's appeal, but any satisfactory fresh evidence which he may be able to adduce to show that his earning capacity is, in fact, more than "slightly impaired" in the open labour market solely as a result of the accident would receive due consideration.

Does the hon. and gallant Member seriously suggest that t he loss of one eye, and that the right eye, does not seriously damage his capacity for work to a much greater degree than 8s. 5d. a week?

My hon. Friend must know that it is not for us, but the medical officers acting for the Treasury, to decide that matter.

Have the Admiralty considered whether they would allow these men to appeal to the Law Courts, in view of the unsatisfactory decisions of the Treasury in regard to compensation?

Finland (Forest Land Legislation)

59.

asked the Secretary of State for Foreign Affairs of his attention has been drawn to the action of the Finnish Government in introducing legislation affecting title deeds of certain forest property which prejudices the interests of British subjects who have invested in that property; and what action he has taken, or proposes to take, in this matter?

Yes, Sir. My information is that the Bill is not likely to reach a crucial stage for some time. His Majesty's Minister at Helsingfors has already been in communication with the Finnish Government on the subject, and I shall, of course, press for fair treatment for the British interests involved should they appear to be endangered.

Naval And Military Pensions And Grants

Appeals Tribunals

70.

asked the Minister of Pensions if, in view of complaints regarding the attitude of the pensions appeal tribunals to the cases laid before them, he will take steps to draw the attention of such tribunals to the desirability of their giving the greatest possible amount of sympathetic consideration to such cases?

The functions of the pensions appeal tribunals are purely judicial, and in exercising them they are bound by the relevant statutes and Royal Warrants. The tribunals are directed, by the rules made under the Act, to assist any appellant who, through ignorance or otherwise, is unable to make the best of his case, and I have no doubt that they fulfil this obligation and that they give to any appellant before them the benefit of any reasonable doubt.

Disabled Ex-Officers

71

asked the Minister of Pensions what is the object the Department has in mind in sending to disabled wounded officers, some of whom have lost limbs during the War and who are at present receiving pensions or allowances, the Circular M.P.O. (a) 644b inquiring as to their present financial position, employment, etc.; is it proposed in certain cases and under certain conditions to reduce pensions and allowances; and will he inform the House in how many instances ex-officers disabled in the War, and to whom disability pensions or allowances have been granted, have been called upon to accept a reduction in these pensions or allowances because it has been discovered that they are able to earn an income in one way or another?

Disability retired pay or pension on the ordinary scale rates is in no way affected by the financial position or employment of the pensioner. The inquiry referred to affects only a small class of retired pay at a specially high rate, which is conditional on the Ministry being satisfied that the officer's capacity for earning a living in civil life is or is not seriously affected. Investigation for this purpose is necessary from time to time as part of the normal work of my Department, and I have no record of the number of cases which have been affected.

Education Authorities (Medical Officers' Clerks)

72.

asked the President of the Board of Education how many local education authorities provide their medical officers with secretaries, who accompany these medical officers on their visits to schools for the examination of children; and what duties are performed by these secretaries?

As I have already informed my hon. Friend, the arrangement made by the Lancashire Authority appears to be exceptional. The duties of these clerks are, I understand

  • (i) To prepare the cards for routine and special medical inspection.
  • (ii) To prepare the summaries for the school medical officer's monthly and annual reports.
  • (iii) To send notices to parents and arrange times of interview with the assistant school medical officer.
  • (iv) To arrange appointments for dental treatment of cases referred by the assistant school medical officer.
  • (v) To arrange appointments for ophthalmic treatment.
  • (vi) To arrange appointments for the orthopædic surgeon, to take down his reports in shorthand and to transcribe them.
  • (vii) To take down in shorthand the assistant school medical officer's reports on school sanitation and to transcribe them.
  • These duties, except the first, are practically one and all such as are undertaken by the clerical staff of any large local education authority, and are usually completed at the offices of the local education authority. In certain areas this is also true of the first, where an inspection card is made out at the office when the child is placed on a school register.

    Parkhurst Convict Prison

    74.

    asked the Secretary of State for the Home Department how many cases of punishment there were in Parkhurst Convict Prison between 1st July, 1926, and 31st March, 1927, both dates inclusive; and if he will give particulars of the punishments inflicted and the offences for which they were imposed?

    During the period in question there were 30 cases of punishment for offences of idleness, 64 for offences of violence, 109 for offences of insubordination, and 121 for other offences. The total number of punishments was therefore 324, but the total number of individual prisoners punished was 190, several individuals having offended more than once during the period. I cannot give details now of the punishments imposed, but if the hon. Member would like further particulars and will let me know, I will arrange for a tabular statement to be prepared and sent to him.

    In view of the situation which has been disclosed, does the hon. and gallant Gentleman not think that an inquiry into the administration would be desirable?

    I do not gather that from the statement I will send particulars to the hon. Member.

    Poisons And Pharmacy Acts

    75.

    asked the Home Secretary what traders, if any, interested in the sale of poisons by licence, or otherwise, are represented on the Committee now sitting to investigate the working of the Poisons and Pharmacy Acts; and when the Report of the Committee may be expected?

    I have been asked by the Lord President of the Council, who appointed the Committee, to say that traders engaged in the sale of poisons, both by wholesale and retail, are represented on the Committee. I am unable to say when the Report of the Committee may be expected.

    Can my hon. and gallant Friend tell me if the Reports of proceedings that are being issued in certain trade journals are authorised, and if they are not authorised what action can be taken to prevent their being published?

    Is whisky considered a poison in this connection, considering how many people die of the effects of it?

    Poor Persons (Legal Aid)

    77.

    asked the Home Secretary whether he proposes to take steps to put into operation the recommendations of the Committee on Legal Aid for the Poor?

    Steps are being taken to give effect to certain recommendations. Other recommendations would require legislation and my right hon. Friend thinks it better to await the final Report of the Committee so that all the points requiring legislation can be considered as a whole.

    British Empire Exhibition (Aliens)

    78.

    asked the Home Secretary for how long the seven alien waiters, who were admitted for the express purpose of taking employment at the British Empire Exhibition, and who are still in this country, are likely to remain, and where they are employed?

    As my right hon. Friend informed the hon. Member on the 4th instant, the aliens who were admitted for employment at the British Empire Exhibition all left the United Kingdom after the close of the Exhibition. Seven of them returned during last month in possession of Ministry of Labour permits valid for 12 months and were given leave to land for a corresponding period. None of them is a waiter.

    Arising out of the reply of my hon. and gallant Friend, in view of the fact that the Liberal party is now united on this question of alien waiters, will he also consider the products which the alien waiters hand to those who have to consume them in this country?

    I think my hon. and gallant Friend has not grasped the last part of my answer. None of them is a waiter.

    Legitimacy Act, 1925

    79.

    asked the Home Secretary whether he has now made inquiries into the administration of the Legitimacy Act, 1925; and whether he has found it possible to ameliorate the present conditions and arrange that a certificate on re-registration shall not be distinguishable from any ordinary birth certificate?

    I have been asked to reply. My right hon. Friend still has this question under consideration.

    Communist Papers

    80.

    asked the Home Secretary whether, with regard to the letter published on page 54 of the Communist Papers (Command Paper No. 2,682, of 1926), which was found at 38, Great Ormond Street, he will state the date on which it was found; by whom it was found; and under what circumstances?

    The document in question was found by the police on the 14th October, 1925, during the search consequent upon the arrest of Mr. Harry Pollitt.

    Vivisection

    81.

    asked the Home Secretary the total number of inspectors appointed under the Act 39 and 40 Vic., c. 77; their names; and how many of them are full-time officers?

    82.

    asked the Home Secretary the number of places at present registered under the Act 39 and 40 Vic., c. 77, for the performance of painful experiments upon animals?

    Income Tax

    83.

    asked the Chancellor of the Exchequer if he will state for the latest year for which the figures are available how much of the total net income assessed to Income Tax was earned income and investment income, respectively; and how much of the latter consisted of undistributed profits of limited companies?

    The total amount of actual income assessed to Income Tax for the year 1925–26 is estimated at £2,375 million, of which about £1,300 million is earned income and about £1,075 million investment income. No information is available as to the undistributed profits of limited companies included in the latter figure. For the year 1923–24, however, a special inquiry was made into the amount of these undistributed profits and they were estimated for that year at £217frac12; million. My hon. Friend will find this figure in the Report of the Colwyn Committee on National, Debt and Taxation.

    Has the Financial Secretary any figures of the income derived from investments abroad and the Colonies?

    National Savings Certificates

    86.

    asked the Financial Secretary to the Treasury what was the total amount of savings certificates outstanding on 31st March, 1927?

    Surplus War Stores (Sale)

    87.

    asked the Financial Secretary to the Treasury what was the amount of money received from the sale of war stores during the years ending 31st March, 1926 and 31st March, 1927, respectively?

    The amount received by the Exchequer from the sale of war stores in the year to 31st March, 1926. was £7,193,753, and in the year to 31st March, 1927, £3,108,500.

    Proposed Train Ferry, Flushing

    91.

    asked the Minister of Transport whether the proposal of a train ferry between Flushing and this country has been brought to his notice; and whether, having regard to the great convenience which such a ferry would give to travellers to the Continent, he will cause inquiries to be made as to the possibilities in this direction?

    The answer to the first part of the question is in the negative. I do not think that it is for me to investigate the commercial possibilities of such a service as that indicated by my hon. Friend.

    Does the right hon. and gallant Gentdeman not read the newspapers; and if he does, will he consider the suggestion which has been made in this respect; and does he not think that a ferry on these lines would be an immense advantage?

    If it will satisfy my hon. Friend, I will communicate with the railway company, and ask them to consider it.

    Why is this question addressed to the Minister of Transport? Has the right hon. and gallant Gentleman jurisdiction over the sea as well as the land?

    Botany (Empire Study Scheme)

    26.

    asked the Secretary of State for the Colonies whether any efforts are being made by expert botanists in the direction of the study of plants of economic importance throughout the Empire; and whether any assistance is this direction is being given by the Empire Marketing Board?

    The answer to both parts of the question is in the affirmative. A grant of £4,000 for five years from the Empire Marketing Fund has been promised to the Royal Botanic Gardens, Kew, through the Ministry of Agriculture and Fisheries. The grant will be devoted partly to the employment of an

    Division No. 82.]

    AYES.

    [4.45 p.m.

    Acland-Troyte, Lieut.-ColonelApsley, LordBaldwin, Rt. Hon. Stanley
    Agg-Gardner, Rt. Hon. Sir James T.Ashley, Lt. -Col. Rt. Hon. Wilfrid W.Balfour, George (Hampstead)
    Ainsworth, Major CharlesAstbury, Lieut. -Commander F. W.Barclay-Harvey, C. M.
    Albery, Irving JamesAstor, Maj. Hn. John J. (Kent, Dover)Barnett, Major Sir Richard
    Alexander, Sir Wm. (Glasgow, Cent'l)Astor, viscountessBarnston, Major Sir Harry
    Amery, Rt. Hon. Leopold C. M. S.Atholl, Duchess of.Beamish, Rear-Admiral T. P. H.
    Applin, Colonel R. V. K.Atkinson, C.Bellairs, Commander Carlyon W.

    economic botanist to be attached to the Royal Botanic Gardens, who will be available either to visit the Dominions and Colonies from time to time or to set free a superior officer of the Kew staff to undertake overseas missions, and partly to sending botanical collectors to various parts of the world to study and bring home plants of economic importance for cultivation at Kew and distribution to the Dominions and Colonies.

    How many is it proposed to send to different parts of the Empire from Kew?

    Anglo-Russian Relations

    47.

    asked the Prime Minister whether, in view of the urgency of the matter, he will consider giving a day after Easter to discuss British and Russian relations?

    I am not prepared at present to promise another day for the discussion of Anglo-Russian relations. His Majesty's Government are watching the situation closely. If and when they feel it necessary to take fresh action the House will be informed and an opportunity of discussing their action will be afforded if desired.

    Has the right hon. Gentleman seen the statement by Sir Auckland Geddes about the machinations of America against this country; and is he going to take any action?

    Business Of The House

    Motion made, and question put,

    "That the Proceedings on Government Business be exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House."—[The Prime Minister.]

    The House divided: Ayes, 303; Noes, 120.

    Benn, Sir A. S. (Plymouth, Drake)Grace, JohnMerriman, F. B.
    Berry, Sir GeorgeGraham, Fergus (Cumberland, N.)Meyer, Sir Frank
    Betterton, Henry B.Grattan-Doyle, Sir N.Milne, J. S. Wardlaw-
    Birchall, Major J. DearmanGrenfell, Edward C. (City of London)Mitchell, S. (Lanark, Lanark)
    Bird, E R. (Yorks, W. R., Skipton)Gretton, Colonel Rt. Hon. JohnMitchell, Sir W. Lane (Streatham)
    Blundell, F. N.Grotrian, H. BrentMond, Rt. Hon. Sir Alfred
    Boothby, R. J. G.Guinness, Rt. Hon. Walter E.Moore, Lieut. -Colonel T. C. R. (Ayr)
    Bourne, Captain Robert CroftGunston, Captain D. W.Moore, Sir Newton J.
    Bowater, Col. Sir T. VansittartHall, Admiral Sir R. (Eastbourne)Moreing, Captain A. H.
    Bowyer, Capt. G. E. W.Hall, Capt. W. D'A. (Brecon & Rad.)Morrison, H. (Wilts, Sallsbury)
    Braithwaite, Major A. N.Hammersley, S. S.Morrison-Bell, Sir Arthur Clive
    Brassey, Sir LeonardHannon, Patrick Joseph HenryMurchison, Sir Kenneth
    Bridgeman, Rt. Hon. William CliveHarland, A.Nall, Colonel Sir Joseph
    Briggs, J. HaroldHarmsworth, Hon. E. C. (Kent)Nelson, Sir Frank
    Brittain, Sir HarryHarrison, G. J. C.Newman, Sir R. H. S. D. L. (Exeter)
    Brooke, Brigadier-General C. R. I.Hartington, Marquess ofNewton, Sir D. G. C. (Cambridge)
    Broun-Lindsay, Major H.Harvey, G. (Lambeth, Kennington)Nicholson, O. (Westminster)
    Brown, Brig. -Gen. H. C. (Berks. Newb'y)Haslam, Henry C.Nicholson, Col. Rt. Hn. W. G. (Ptrsf'd.)
    Buckingham, Sir H.Hawke, John AnthonyNield, Rt. Hon. Sir Herbert
    Bull, Rt. Hon. Sir William JamesHeadlam, Lieut. -Colonel C. M.Nuttall, Ellis
    Bullock, Captain M.Henderson, Capt. R. R. (Oxf'd, Henley)Oakley, T.
    Burman, J. B.Henderson Lieut. -Col. V. L. (Bootle)O'Connor, T. J. (Bedford, Luton)
    Burney, Lieut. -Com. Charles D.Heneage, Lieut.-Colonel Arthur P.O'Neill, Major Rt. Hon. Hugh
    Burton, Colonel H. W.Hennessy, Major Sir G. R. J.Ormsby-Gore, Rt. Hon. William
    Butler, Sir GeoffreyHerbert, Dennis (Hertford, Watford)Penny, Frederick George
    Butt, Sir AlfredHerbert, S. (York, N. R., Scar. & Wh'by)Percy, Lord Eustace (Hastings)
    Cadogan, Major Hon. EdwardHills, Major John WallerPerkins, Colonel E. K.
    Carver, Major W. H.Hilton, CecilPerring, Sir William George
    Cayzer, Maj. Sir Herbt. R. (Prtsmth. S.)Hoare, Lt. -Col. Rt. Hon. Sir S. J. G.Peto, Sir Basil E. (Devon, Barnstaple)
    Cazalet, Captain Victor A.Holbrook, Sir Arthur RichardPllcher, G.
    Cecil, Rt. Hon. Sir Evelyn (Aston)Holland, Sir ArthurPliditch, Sir Philip
    Chadwick, Sir Robert BurtonHolt, Captain H. p.Power, Sir John Cecil
    Chamberlain, Rt. Hn. Sir J. A. (Birm., W.)Homan, C. W. JPownall, Sir Assheton
    Chamberlain, Rt. Hon. N. (Ladywood)Hope, Capt. A. O. J. (Warw'k. Nun.)Preston, William
    Chapman, Sir S.Hope, Sir Harry (Forfar)Price, Major C. W. M.
    Charteris, Brigadier-General J.Hopkins, J. W. W.Radford, E. A.
    Chllcott, Sir WardenHopkinson, Sir A. (Eng. Universities)Raine, W.
    Churchill, Rt. Hon. Winston SpencerHopkinson, A. (Lancaster, Mossley)Rawson, Sir Cooper
    Churchman, Sir Arthur C.Horlick, Lieut.-Colonel J. NRees, Sir Beddoe
    Clarry, Reginald GeorgeHorne, Rt. Hon. Sir Robert S.Reid, Capt. Cunningham (Warrington)
    Clayton, G. C.Howard-Bury, Lieut. -Colonel C. K.Remer, J. R.
    Cobb, Sir CyrilHudson, Capt. A. U. M. (Hackney, N.)Remnant, Sir James
    Cochrane, Commander Hon. A. D.Hudson, R. S. (Cumberl'nd, Whiteh'n)Rentoul, G. S.
    Cockerill, Brig. -General Sir G. K.Huntingfield, LordRhys, Hon. C. A. U.
    Cohen, Major J. BrunelHurd, Percy A.Rice, Sir Frederick
    Colfox, Major Wm. PhillipsHurst, Gerald B.Richardson, Sir P. W. (Sur'y, Ch'ts'y)
    Cooper, A. DuffIllffe, Sir Edward M.Roberts, E. H. G. (Flint)
    Couper, J. BJackson, Sir H. (Wandsworth, Cent)Roberts, Sir Samuel (Hereford)
    Courtauld, Major J. S.Jacob, A. E.Ropner, Major L.
    Cowan, Sir Wm. Henry (Islington, N.)James, Lieut. -Colonel Hon CuthbertRuggles-Brise, Major E. A.
    Craig, Ernest (Chester, Crewe)Jephcott, A. R.Russell, Alexander West (Tynemouth)
    Croft, Brigadier-General Sir H.Kennedy, A. R. (Preston).Rye, F. G.
    Crooke, J. Smedley (Derltend)Kindersley, Major G. M.Salmon, Major I.
    Crookshank, Col. C. de W. (Berwick)King, Captain Henry DouglasSamuel, Samuel (W'dsworth, Putney)
    Crookshank, Col. H. (Lindsey, Gainsbro)Kinloch-Cooke, Sir ClementSandeman, N. Stewart
    Curzon, Captain ViscountKnox, Sir AlfredSanders, Sir Robert A.
    Dalkeith, Earl ofLamb, J. Q.Sanderson, Sir Frank
    Davidson, Major-General Sir John H.Leigh, Sir John (Clapham)Sandon, Lord
    Davies, Maj. Geo. F. (Somerset, Yeovil)Lister, Cunliffe-, Rt. Hon. Sir PhilipSassoon, Sir Philip Albert Gustave D.
    Davies, Dr. VernonLittle, Dr. E. GrahamSavery, S. S.
    Dawson, Sir PhilipLloyd, Cyril E. (Dudley)Smith, R. W. (Aberd'n & Kinc'dine. 'C.)
    Dean, Arthur WellesleyLocker-Lampson. G. (Wood Green)Smithers, Waldron
    Dixey, A. C.Loder, J. de V.Somerville, A. A. (Windsor)
    Edmondson, Major A. J.Looker, Herbert WilliamSprot, Sir Alexander
    Edwards, J. Hugh (Accrington)Lougher, LewisStanley, Col. Hon. G. F. (Will'sden, E.)
    Ellis, R. G.Luce, Major-Gen, Sir Richard HarmanStanley, Lord (Fylde)
    Erskine, Lord (Somerset, Weston-s.-M.)Lumley, L. R.Stanley, Hon. O. F. G. (Westm'eland)
    Erskine, James Malcolm MontelthLynn, Sir R. J.Storry-Deans, R.
    Fairfax, Captain J. G.Macdonald, Capt. P. D. (I. of W.)Stott, Lieut. -Colonel W. H.
    Falle, Sir Bertram G.Macdonald. R. (Glasgow, Cathcart)Streatfeild, Captain S. R.
    Fanshawe, Commander G. D.Macintyre, I.Stuart, Crichton-, Lord C.
    Fermoy, LordMcLean, Major A.Stuart, Hon. J. (Moray and Nairn)
    Flelden, E. B.Macnaghten, Hon. Sir MalcolmStyles, Captain H. Walter
    Finburgh, S.McNeill, Rt. Hon. Ronald JohnSueter, Rear-Admiral Murray Fraser
    Forrest, W.Macquisten, F. A.Sugden, Sir Wilfrid
    Foster, Sir Harry S.MacRobert, Alexander M.Sykes, Major. Gen. Sir Frederick H
    Frece, Sir Walter deMaltland, Sir Arthur D. steel-Templeton, W. P.
    Fremantle, Lt. -Col. Francis E.Makins, Brigadier-General F.Thom, Lt. -Col. J. G. (Dumbarton)
    Ganzonl, Sir JohnMalone, Major P. B.Thompson, Luke (Sunderland)
    Gates, PercyManningham-Buller, Sir MervynThomson, F. C. (Aberdeen, South)
    Gault, Lieut. -Col. Andrew HamiltonMargesson, Captain D.Thomson, Rt. Hon. Sir W. Mitchell-
    Gilmour, Lt. -Col. Rt. Hon. Sir JohnMarriott, Sir J. A. R.Tinne, J. A.
    Glyn, Major R. G. C.Mason, Lieut. -Col. Glyn K.Titchfield, Major the Marquess of
    Gower, Sir RobertMeller, R. J.Tryon, Rt. Hon. George Clement

    Turton, Sir Edmund RussboroughWhite, Lieut. -Col. Sir G. Dalrymple-Womersley, W J.
    Vaughan-Morgan, Col. K. P.Williams, A. M. (Cornwall, Northern)Wood, B. C. (Somerset. Bridgwater)
    Waddington, R.Williams, Com. C. (Devon, Torquay)Wood, E. (Chest'r, Stalyb'ge & Hyde)
    Wallace, Captain D. E.Williams, C. P. (Denbigh, Wrexham)Wood, Sir S. Hill-(High Peak)
    Ward, Lt. -Col. A. L. (Kingston-on-Hull)Williams, Herbert G. (Reading)Woodcock, Colonel H. C.
    Warner, Brigadier-General W. W.Wilson, M. J. (York, N. R., Richm'd)Worthington-Evans, Bt. Hon. Sir L.
    Warrender, Sir VictorWilson, R. R. (Stafford, Lichfield)Wragg, Herbert
    Waterhouse, Captain CharlesWinby, Colonel L. P.Young, Rt. Hon. Hilton (Norwich)
    Watson, Sir F. (Pudsey and Otley)Windsor-Clive, Lieut. -Colonel George
    Watson, Rt. Hon. W. (Carlisle)Wise, Sir Fredric

    TELLERS FOR THE AYES.—

    Wells, S. R.Wolmer, ViscountCommander B. Eyres Monsell and
    Colonel Cibbs

    NOES.

    Adamson, W. M. (Staff., Cannock)Hamilton, Sir R. (Orkney & Shetland)Salter, Dr. Alfred
    Alexander, A. V. (Sheffield, Hillsbro')Hardie, George D.Sexton, James
    Ammon, Charles GeorgeHarney, E. A.Shaw, Rt. Hon. Thomas (Preston)
    Attlee, Clement RichardHarris, Percy A.Shepherd, Arthur Lewis
    Baker, J. (Wolverhampton, Bilston)Hartshorn, Rt. Hon. VernonShiels, Dr. Drummond
    Barker, G. (Monmouth, Abertillary)Henderson, T. (Glasgow)Short, Alfred (Wednesbury)
    Barnes, A.Hirst, G. H.Sinclair, Major Sir A. (Caithness)
    Barr, J.Hore-Belisha, LeslieSitch, Charles H.
    Batey, JosephHudson, J. H. (Huddersfield)Smith, Ben (Bermondsey, Rotherhithe)
    Bondfield, MargaretJenkins, W. (Glamorgan, Neath)Smith, H. B. Lees (Keighley)
    Broad, F. A.Johnston, Thomas (Dundee)Smith, Rennie (Penistone)
    Bromfield, WilliamJones, Henry Haydn (Merioneth)Snell, Harry
    Brown, Ernest (Leith)Jones, J. J. (West Ham, Silvertown)Snowden, Rt. Hon. Philip
    Buxton, Rt. Hon. NoelJones, Morgan (Caerphilly)Spoor, Rt. Hon. Benjamin Charles
    Cape, ThomasJones, T. I. Mardy (Pontypridd)Stamford, T. W.
    Charleton, H. C.Kelly, W. T.Stephen, Campbell
    Clowes, S.Kennedy, T.Stewart, J. (St. Rollox)
    Cluse, W. S.Kenworthy, Lt. -Com. Hon. Joseph M.Strauss, E. A.
    Clynes, Rt. Hon John R.Lansbury, GeorgeSullivan, J.
    Collins, Sir Godfrey (Greenock)Lawrence, SusanThomas, Rt. Hon. James H. (Derby)
    Compton, JosephLawson, John JamesThomas, Sir Robert John (Anglesey)
    Cove, W. G.Livingstone, A. M.Thorne, G. R. (Wolverhampton, E.)
    Cowan, D. M. (Scottish Universities)Lowth, T.Thurtle, Ernest
    Crawfurd, H. E.Lunn, WilliamTinker, John Joseph
    Dalton, HughMacklnder, W.Townend, A. E.
    Davies, Rhys John (Westhoughton)Maxton, JamesTrevelyan, Rt. Hon. C. P.
    Day, Colonel HarryMitchell, E. Rosslyn (Paisley)Viant, S. P.
    Dennison, R.Montague, FrederickWallhead, Richard C.
    Duncan, C.Morris, R. H.Watts-Morgan, Lt. -Col. D. (Rhondda)
    Dunnico, H.Morrison, R. C. (Tottenham, N.)Wellock, Wilfred
    Evans, Capt. Ernest (Welsh Univer.)Mosley, OswaldWhiteley, W.
    Fenby, T. D.Murnin, H.Wiggins, William Martin
    Garro-Jones, Captain G. M.Naylor, T. E.Wilkinson, Ellen C.
    Gillett, George M.Oliver, George HaroldWilliams, Dr. J. H. (Llanelly)
    Graham, Rt. Hon. Wm. (Edin., Cent.)Owen, Major G.Williams, T. (York, Don Valley)
    Greenall, T.Palln, John HenryWilson, C. H. (Sheffield, Attercliffe)
    Greenwood, A. (Nelson and Colne)Pethick-Lawrence, F. W.Wright, W.
    Griffiths, T. (Monmouth, Pontypool)Ponsonby, ArthurYoung, Robert (Lancaster, Newton)
    Groves, T.Potts, John S.
    Grundy, T. W.Ritson, J.

    TELLERS FOR THE NOES.—

    Hall, G. H. (Merthye Tydvil)Robinson, W. C. (Yorks, W. R., Elland)Mr. Hayes and Mr. Charles Edwards.

    Financial Statement (1927–28)

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

    Copy presented accordingly; to lie upon the Table, and to be printed. [No. 54.]

    Orders Of The Day

    Ways And Means

    Considered in Committee.

    [Mr. JAMES HOPE in the Chair.]

    Financial Statement

    Sir, I must without delay remind the Committee of the statement which I made in opening the Budget last year. This is the statement:

    "I have in my calculations assumed throughout a peaceful issue from the industrial difficulties in which we are all involved. All my Estimates are based on a peace footing. That is the only basis on which any Estimate can be framed. If, contrary to the national wish and hope, a prolonged paralysis of industry should overwhelm us, I shall be forced to propose supplementary taxation in order to meet the loss which will fall upon the revenue, and I think it right to state that such supplementary taxation will comprise substantial increases both in direct and indirect taxation—REPORT, 26th April, 1926; cols. 1719–20, Vol. 194.]
    That was in April last, and I subsequently decided not to introduce a second Finance Bill in the autumn, as I at one time contemplated. I did so chiefly for the reason that at that time it was quite impossible to measure the injury which had been done to our trade and our finance. We now know with accuracy the injury which has been done, at any rate, to our finance. We meet this afternoon under the shadow of the disasters of last year. It is not the time to bewail the past; it is the time to pay the bill. It is not for me to apportion the blame; my task is only to apportion the burden. I cannot present myself before the Committee in the guise of an impartial judge; I am only the public executioner.

    Effects Of General Strike And Coal Trade Dispute

    4.0 p.m.

    :The General Strike and the seven months' stoppage in the British coalfields produced the following effects upon the finance of 1920–27: Customs and Excise revenue fell short of the Estimate by £9,250,000, and of that about £8,000,000, principally on Beer and Spirits, is attributable to the strike or stoppage. The Post Office lost about £500,000 from the same cause. The receipts from Stamp. Duties were diminished by £1,500,000 on account of the stoppage, although a windfall of a special kind reduced this loss to £250,000. The effects of the stoppage on Income Tax and on Super-tax have influenced not only 1920 but 1927, and, to a lesser extent, will influence 1928 and 1929. In 1926 we lost for ever £3,250,000 through having to remit or repay tax on account of trading losses. The melancholy results of the trade of 1926, without any mitigating average of three years, forms the foundation of the Estimates of 1927, and inflicts upon our reasonable expectations of a year ago a loss which in the current year will amount to £18,000,000. There are further irrecoverable losses of £7,000,000 in 1928 and £1,750,000 in 1929. The injury done to our trade has been deep, deeper than many of us were willing to persuade ourselves was the fact. An examination of the trading results of 1926 shows that the profits of the year were £150,000,000 below the original expectation. The resultant loss in Income Tax and Super-tax spread over this and future years amounts certainly to not less than £30,000,000. That is one part of the irrecoverable loss due to the coal dispute, but that is not all. Last year, the grievous injuries inflicted on so many industries made it impossible for the Exchequer to collect from embarrassed taxpayers the expected revenue. A loss of £4,250,000 in Income Tax alone is attributable to the in-evitable retardation of collection, though we hope to recover this loss in 1927; if we succeed, this £4,250,000 will merely he deferred from last year to this year.

    The decision taken last year to base the Income Tax upon a single, year, instead of an average of three years or in some cases more, would, if 1926 had taken a normal course, have given a revenue advantage to the Exchequer of perhaps £2,000,000 in the Budget of the present year. As things have turned out, I am. instead, confronted with a loss from this cause which may well amount to £6,000,00 or £7,000,000. It is a loss to the revenue, but. it is a relief to the taxpayer; and it is a relief to those very taxpayers who need it most, those businesses and industries, especially among the heavy industries, which were brought to a standstill for many months, and which have no profits to declare and no income to tax. If we had designed last year to give a special and timely relief to the employers in the basic trades to enable them to restart again as quickly as possible, and to offer employment in districts where unemployment is most rife, if that had been our intention last year, we could have found no better method of achieving that object. It is a merciful relief; it is a timely relief; it may be a fruitful relief, but, although I do not regret it, so far as I am concerned it is an exceedingly inconvenient relief. So much for the loss of revenue caused by the Strike.

    I now come to the additional expenditure. First of all, we have had to raise more Treasury Bills to meet the shortage of revenue and the extra expenditure. The disturbed conditions throughout the country prevented the fall in money rates which we anticipated at the beginning of the year. These factors forced us to pay nearly £6.000,000 extra in interest on more and dearer Treasury Bills. The pressure of civil strife on the savings of the people led to exceptional encashments of Savings Certificates, and, as these certificates when cashed are repayable with accumulated interest, the public charge on that account has been raised by £5,000,000, of which £3,000,000 is directly attributable to the industrial dispute. The direct expenditure upon the Supply Services in consequence of the dispute amounted to over £5,000,000, of which relief on unemployment and distress amounted to £4,325,000, and the emergency Vote amounted to £400,000, including £10,000 for the expenses of the "British Gazette." Those expenses might easily have been greater, but the deft and thrifty manner in which the President of the Board of Trade and his advisors conducted the complicated purchases of imported coal saved us from loss on that head.

    In summing up the effects of the General Strike and the Coal Stoppage upon last year's Budget, it may be said that in 1926 there was a decrease of revenue of about £17,500,000, and an increase of expenditure of about £14,500,000, or a total loss to the Exchequer of approximately £32,000,000. This is the overwhelming cause which has involved us in a deficit of £36,500,000 upon the finances of 1926, and which confronts us with a severe additional loss in 1927. That loss, as I have said, is subject to some recoupments, but it cannot be estimated at less than £18,000,000. It further involves us in losses in 1928 and 1929 amounting to nearly £9,000,000. These are the direct effects, and the direct effects alone. As to the indirect, they cannot be computed, but certainly they have played their part and will long play their part in delaying the reduction of the contributions to the Unemployment Insurance Fund, in aggravating the difficulties of our conversion operations, and in withholding from the public a portion of these reliefs which they might reasonably have expected to receive.

    But these figures, so serious and decisive when related to the annual Budget and to Exchequer finance, acquire an altogether different value and proportion when they are compared with the strength and resources of the nation. When we reflect on what happened last year—the prolonged paralysis of all our basic trades, the very large part of the population, about 3,500.000 wage-earners and their families, living in one way or another, I purposely choose a non-controversial phrase, living in one way or another without discharging any productive function—when we reflect on the highly artificial and delicate character of our commerce and on our dependence beyond that of any other State, ancient or modern, on world-wide credit and on foreign imports and foreign markets, the marvel is, not that we have suffered so much, but that we have not suffered more from last year's shocking breakdown in our island civilisation.

    The revenue, though mauled and wounded, has the main survived. The immense number of miscellaneous and secondary manufactures and businesses, so many of which have established themselves in the southern half of England, the fecund processes of banking, brokerage and insurance, the vast sums brought into the country annually as the result of British investments abroad—these have enabled us almost to keep the even tenour of our way. The basic industries, those which were most smitten by the stoppage, were those in which the employers and the employed alike were hardest pressed before. Consequently, they were those on which the Exchequer counted least. The non-basic industries and businesses have been able to sustain the self-stricken areas, and to supply the main revenue for the State during the stoppage. One part of Britain, capable, as I pointed out last winter, in some degree of geographical definition, has been tearing itself to pieces, and the other part, although injured, has been strong enough to bear the extra strain.

    If the revenue has in the main survived, the exchange has stood like a rock. Two years ago, when we returned to the Gold Standard, there were many predictions and counter-predictions, just as to-day I have no doubt there will be many assertions and counter-assertions on that subject. But few, I think, would have believed that the Gold Standard could have been maintained through all these convulsions with a Bank Rate never higher than 5 per cent., with a reserve of gold larger now than it was this time last year, and without the slightest need to touch those large precautionary American credits which were brought into existence to safeguard the operation of the return to Gold Standard. I may mention here that we never at any time during their existence thought of using these credits, and I have given notice that on the expiry of the original term next month, we do not propose to renew them.

    I come to the consuming power. Certainly a study of the consuming power during 1926 is one of the most significant and important features which could be presented to the attention of any assembly. Under our humane laws, without parallel in any community, ancient or modern, the consuming power of the masses, as far as can be judged from the Treasury standpoint, has been little affected by the troubles through which we have passed. Even during the long-drawn coal stoppage, tea showed only a trifling decrease, while the consumption of sugar and even tobacco actually increased. Bread and meat. I am informed—although they do not affect the Revenue—have shown no decrease in consumption on the year; beer and spirits alone among the main items of indirect taxation have reflected to the Exchequer the results of the social and industrial struggles in which so many millions have been engaged.

    Most remarkable of all, the trade of the country has flowed on in a manner scarcely conceivable. Apart from coal exports, which naturally ceased altogether, our trade has rivalled closely through many months during the Coal Stoppage the corresponding months of the preceding year. Undoubtedly, it has suffered. The balance of exports and imports has turned still further against us. We are clearly not advancing among the people of the world at the pre-War rate; we are not advancing as rapidly as some other people of the world are advancing to-day. But we are still advancing, and, even in this wretched year, we have still saved. We have still augmented our capital and still retained our position, whether War debts are included or excluded, as the greatest- creditor nation, and still maintained our position as the financial centre of the world. Our economic vitality and financial strength are not yet impaired; they have been cruelly and needlessly strained, but they are still intact. Our fortune is still in our own hands to make or mar.

    Viewing the scene as a whole, it must be said that our loss, though grievous, is incomparably less, and that the resiliency and resources of Britain, though stricken, are incomparably greater than anyone a year ago would have dared to predict.

    Revenue 1926–27

    :Apart from the Coal Trouble, let us see what has happened to the Revenue of 1926. The main feature is the failure of the Income Tax. After deducting all the losses due to the Strike, the Income Tax yielded about £12,000,000 less than the Estimate. Those are serious and unsatisfactory figures, and I am sure no words are needed to emphasise them to the Committee. On the other hand, Estate Duty and Super-tax show increases between them of £2,750,000, and Sundry Loans and Miscellaneous Revenue exceeded their Estimate by £8,500,000. These variations almost balance each other. In the result, the Revenue, apart from the Strike, is rather more than £1,250,000 below the Estimate; but with the Stoppage—I do not want to quarrel over the particular word—it is £19,000,000 below the Estimate.

    Expenditure, 1926–27

    :I now come to last year's expenditure. The national expenditure of 1926 exceeded the Budget Estimate by £22,000,000, of which £15,400,000 is upon Consolidated Fund Services—almost entirely Debt interest£and £6,400,000 falls upon what is called Supply. Of the £22,000,000 of excess expenditure £14,500,000 is, as I have stated, due to the Coal Stoppage. Consolidated Fund Services, apart from the Strike, exceeded the Estimate by about £6,000,000. On the other hand, the Budget Estimates for Supply—the expenses of all the Departments—not only last year, but the year before, proved almost exactly correct, that is leaving out of account the Coal Subsidy in 1925 and the effects of the Coal Stoppage in 1926. The Revenue and Expenditure of 1926, taken together on the basis of a £60,000,000 Sinking Fund, which we provided for last year, show that, instead of a surplus of over £4,000,000, there is the deficit which has been published of £36,500,000. This £36,500,000 represents roughly the cumulative short-fall during the whole Parliament from the statutory £50.000,000 Sinking Fund. I see it stated by many well-informed writers that there is a short-fall of £50,000,000, but it is actually nearer £36,000,000, because £4,000,000 was provided from the surplus of the right hon. Gentleman opposite, and I carried forward £10,000,000, in order to justify an increase of the Sinking Fund to £60,000,000 last year. £36,500,000 deficit! So much for the past.

    Expenditure, 1927–28

    :Now I turn to the future, but, I am bound to confess, not with any special sensation of relief. The Estimates for the Supply Services of 1927 have already been laid before the House at a total of £420,490,000. I estimate the Consolidated Fund Services as follows: Debt interest, £305,000,000; Sinking Fund (for the moment), £50,000,000—[Laughter]—for the moment; Road Fund, 19·5 millions; Local Taxation Account, 14·3 millions; Northern Ireland Residuary Share, 5·4 millions; Other Consolidated Fund Services, 3·7 milions. That brings the total of the Consolidated Fund Services to £397,900,000, and, on the above basis, therefore, the total estimated expenditure for 1927, becomes £818,390,000. I have framed these Estimates upon a conservative basis—[Laughter]—conservative basis with a small "c"—and I believe that, apart from unexpected developments in China, they will be solidly maintained.

    General Review Of Expenditure

    :But I think this is the moment to take a rather more general view of national expenditure, and the Committee will, I am sure, permit me to make a digression for that purpose. This is the third Budget for which I have been responsible, and three years have passed since the Budget of the Labour Government. Public attention is concentrated upon the total figure of the Estimates. Let us compare this total figure on the basis of a £50,000,000 Sinking Fund with the Estimates of the right hon. Member for Colne Valley (Mr. Snowden) in 1924. Our Estimates for the coming year are £818,000,000; his were £790,000,000. So that our Estimates have increased by £28,000,000 in the three years that have passed. How are we to explain that? It is not difficult. I have had the tables which I prepared for the Economy Bill of last year brought up-to-date, and they will be found in the Blue Paper, on page 7. Broadly speaking, I have had to face during my tenure a little over £40,000,000 of increased expenditure, which arises from the automatic working out of the decisions of previous Parliaments and Governments, and from the effects of economic forces. The Sinking Fund has been raised from £45,000,000 to £50,000,000 since the time of the right hon. Gentleman. Non-contributory old age pensions and ether pensions, apart from anything which this Government have done, have automatically increased by £8,250,000. The growth of grants, mainly on a percentage basis, to local authorities for health, police and the development of the housing schemes—all fixed by law—accounts for another £4,000,000. The growth of the self-supporting, revenue-producing services—the Post Office and the Road Fund—amounts to nearly £14,500,000. Another £5,000,000 of increased expenditure arises from the working out of the laws of Unemployment and Health Insurance, and from the incremental scales operating in the Civil Service.

    Here are no more heads than I can count on the fingers of my hand, and yet it accounts for £37,000,000 of increased expenditure, none of which could have been avoided except by repudiating the obligations of the State, or throwing increased burdens on the local rates, or drastically remodelling the laws governing Unemployment and Health Insurance, or refusing to accept the beneficial expansion of the Post Office and the Road Fund. £37,000,000 out of £40,000,000! The other £3,000,000 is made up of smaller items equally arising out of decisions not taken in the present Parliament. Against this £40,000,000 of automatic or remunerative increase, for which we are not responsible, there is £12,000,000 of automatic decrease also arising from the laws and decisions taken in other Parliaments, and for which, of course, we are entitled to no credit. Of these the decline in the total of War pensions is the largest, and this, with the reduced cost of the Irish Services, amounts to over £8,000,000 of the £12,000,000. Subtracting the £12,000,000 decrease from the £40,000,000 increase leaves a net adverse balance of £28,000,000.

    So much for the consequences of the laws and decisions made by other Governments. But that is not all the picture. We ourselves have added £17,000,000 of new expenditure for which we are directly responsible. Of these, the main items, as the House well knows, are the Widows' Pensions and improved Old Age Pensions, which account for £7,250,000. The next important item is the beet sugar subsidy, to which the Labour Government had already committed themselves, and which this year reaches its menacing peak of £4,500,000. Against this increased expenditure of £17,000,000 we have made economies of £13,250,000, and we have reduced by £4,000,000 the payments into the Road Fund, thus, by these methods, balancing almost exactly the increased charge.

    Therefore, broadly speaking, but at the same time accurately and truly speaking, it may be said, first, that though we have so far failed to reduce expenditure, we have virtually met out of savings all the new and very important services and policies for which we have been responsible, and that the reason for the increase of £28,000,000 in the total expenditure, so far as it does not depend upon self-supporting and remunerative services, lies wholly in the decisions, wise or foolish, necessary or improvident, taken in the past by our predecessors, Labour, Conservative, Coalition, and, not least, Liberal. I have involved all these administrations of the past, but I think I am bound to make the confession, Quorum pars parva fui.

    The situation which I have just evolved can be epitomised in another way. The right hon. Member for Colne Valley estimated his expenditure at £790,000,000, but, without any unexpected emergency like coal or China, he actually spent £799,000,000 in respect of the year. Therefore, his expenditure and that of the Labour Government of 1924 was not £790,000,000, as usually stated, but £799,000,000. We are estimating for £818,000,000, and we have therefore to account for £19,000,000 of increase. But £14,000,000 of that £19,000,000 is accounted for by the growth of the Road Fund and the Post Office, and it is common ground between all parties that this expenditure ought not to be included in the ordinary accounts. The right hon. Gentleman himself last year, and Lord Oxford in another place last week, both declared that it would be wrong and even silly to include them; but that has never prevented the right hon. Gentleman from including it, if it suited him to do so. Of that £14,000,000, I ought to take into account only £10,000,000 because £4,000,000 has been already credited to revenue, and I cannot count it over again. Ten million pounds from £19,000,000 leaves 29,000,000, and of that £9,000,000 £5,000,000 are accounted for by the increase of the Sinking Fund from £45,000,000 to £50,000,000. I am sure we shall not hear the right hon. Gentleman argue that an increase in the Sinking Fund is an extravagance, or that it ought to be accounted against the Government for extravagance; it is, in fact, the highest form of economy. Four million pounds is left, and that £4,000,000 is almost exactly balanced by the cost of the concessions in Old Age Pensions, made, not by any previous Government, but by the right hon. Gentleman himself during his tenure of office. I am not making excuses, nor at the moment am I trying to moralise; I am only stating facts.

    I am frequently reproached with having, in my first Budget, expressed a hope of effecting a net reduction of £10,000,000 a year progressively. I am even represented as having promised that that should be done. But the words I used were "aim at." One may aim at a reduction, as one may aim at a target, but one does not promise to hit it. What would you have had me to say as Chancellor of the Exchequer? Ought I to have said, "I will not aim at any reduction such as £10,000,000 a year; it is a vain delusion, and every year expenditure will steadily increase." Would that have been the right attitude.? No, it is much better to set up an objective, even if it be beyond your reach, than it is to give up the struggle at the outset. Therefore, I in no way regret the hope which I expressed, nor shall I allow imperfect achievement in the past to prevent perseverance in the future.

    I often read statements to the effect that we should immediately cut down the expenditure of the country by £40,000,000 or £50,000,000 or even by larger sums. I must observe that, if you gave the Chancellor of the Exchequer official powers to veto expenditure, or to ration Departments against their will, it would be a departure from the whole system of constitutional Cabinet Government. It would amount, as I think Mr. Gladstone once said, to a financial dictatorship. I do not envy the task of a financial dictator charged with such a duty as cutting down £40,000,000 or £50,000,000 of national expenditure. We have no longer to deal with the position which prevailed at the time of the Geddes Committee. We have no longer to deal with the conditions even of a year ago at the time of the Economy Bill. The field has been gleaned and re-gleaned.

    Let the Committee examine the figures in section (d) of Table VI of the Blue Paper, the National Administrative Services. In 1914 that section of the Estimates amounted to £96,500,000, and in 1927 it is £156,250,000. But, making the necessary allowances for the inflation of money values, which is in the ratio of 100 to 175 approximately, the fact emerges that, comparing like with like, the expenditure in the whole of these classes and the Services which comprise the whole controllable expenditure of the central Government, Imperial Defence, Civil Services, etc.—all this expenditure of the central Government of the State, making allowance for the alteration in the value of money, is actually lower by nearly 10 per cent, than it was in 1914. This is in spite of the growth of population, in spite of the far more complicated forms and higher standards in all directions which are demanded and to a very large extent supplied. If these facts are true—and I shall be very much surprised if they are challenged, and still more surprised if they are challenged successfully-they ought, I think, to be meditated over by those who so intemperately demand reductions of £40,000,000 or £50,000,000 on the controllable section of our expenditure. To cut down expenditure on the Fighting Services by £15,000,000 or £20,000,000 would probably create panic and reaction resulting later in heavier increases. To cut down drastically the Exchequer contributions to education, health, local government, to arrest the constructive development of agriculture, and housing, to withdraw completely the State contributions to unemployment and health insurance, to make wholesale reductions in salaries and wages, to fill the country with discharged public servants, soldiers, sailors, school-teachers, arsenal men, dockyard workers, post-office employes, and many thousands of other functionaries—all these measures would be inevitable, every one of them, if anything in the nature of a —40,000,000 cut were to be achieved, and all these measures would cause a, convulsion in which, I dare say, one financial dictator might easily find himself replaced by another. And it is a position into which no constitutional Government or Parliamentary majority could be expected to plunge.

    I have used the word "perseverance." Let me now mention some favourable tendencies. The automatic increase of expenditure, apart from the self-supporting and remunerative expenditure, which of course is going on at the rate of £5,000,000 per year—apart from that, the automatic increase of expenditure has come to an end. Next year, 1928, the automatic decrease in expenditure, if no new commitments are entered into, for the first time overtake or almost overtake the increase. Any savings which can be made by the efforts of the Government will, therefore, emerge next year as a net reduction.

    I see that Sir Herbert Samuel said the other day that the taxes would not fall until the Government falls. Without attempting to pose as a prophet, there is one thing which I will not hesitate to predict, and that is that the taxes will not fall after the Government has fallen. Nothing is so expensive as general elections and new Governments. Every new administration, not excluding ourselves, arrives in power with bright and benevolent ideas of using public money to do good. The more frequent the changes of Government, the more numerous are the bright ideas; and the more frequent the elections, the more benevolent they become. When three elections have taken place in three years, in which, as I compute it, about 4,000 candidates in the aggregate have been conducting 4,000 spirited campaigns, bidding against one another for the public favour, and when parties as well as individuals have been giving all sorts of pledges, under highly-organised pressure and with a great desire to win, the results, however worthy and however desirable, are bound to be expensive. By the end of this year, we shall, in fact, have ploughed our way through the consequences of three changes of Government, and three general elections in 1922, 1923, and 1924, and, with stable administration and continuity of policy prolonged over the full constitutional life of Parliament, and with, may I say, a certain degree of salutary disillusionment, the momentum of expenditure will gradually subside. That is what is happening now. Therefore, it is certainly not a moment for us to be discouraged by previous ill-success; on the contrary this is the moment when we should make new efforts.

    Post-War Government Departments

    Suggestions have been made, notably by Lord Oxford in another place, that the new Departments created since the War should now be abolished. This question has been considered by His Majesty's Government every year. The post-War Departments are the Ministry of Labour, the Ministry of Pensions, the Ministry of Transport, the Department of Mines, and the Overseas Trade Department. We felt that it would be out of harmony with the spirit and requirements of these days to abolish the Ministry of Labour, and that it would be premature to liquidate the Ministry of Pensions, the efficiency of whose proceedings is increasing, and whose staff and overhead charges are diminishing with every year that passes. On the other hand, the Prime Minister has authorised me to announce a decision with respect to the other three post-War Departments. During the present financial year, arrangements will be made to abolish the Ministry of Transport as a separate Department, while retaining the Road Department in full activity. The Prime Minister has also decided that arrangements shall be made during the present financial year to distribute the functions of the Mines Department and to terminate the separate existence of the Overseas Trade Department. These changes will require legislation, and their consequences must be carefully adjusted. Parliament will have a full opportunity of considering them. I should like to add, although I am sure it is hardly necessary, that the selection of these three Departments for absorption in no way reflects upon the Ministers at their head. I doubt whether there are any other three Ministers who, in the discharge of their duty, have won a greater measure of approval and good will from their fellow Members of the House of Commons.

    The growth of the staffs of Government offices since pre-War time is also an object of criticism. It must be remembered in bare justice that Sir Alan Anderson's Committee in 1923 reported as follows:
    "After examining the changes in the number of staff employed by each department the increase in the staffs since 1914 is fully accounted for by the extra work that has been thrown upon the Civil Service since 1914 and the average individual output is certainly not less than in 1914."
    His Majesty's Government endorse this verdict. We do not think it practicable, moreover, to make a rigid rule restricting or arresting for the time being further entrants into the Civil Service. If new legislation be passed by Parliament, if complicated taxes are imposed, if the improved collection of the revenue is to be effected, increases of staff must follow. The extension of Old Age Pensions to men and women at 65, which comes into operation in January next under this reactionary administration, alone requires a substantial increase at the Ministry of Health. Therefore it is impossible to deny a reasonable latitude, or to prescribe a mathematical quota. Nevertheless we intend to effect a marked contraction in the numbers of new entrants into the Civil Service for the remaining years of this Parliament. But the Committee and the public must not delude themselves into supposing that either of these particular changes, the absorption of Departments or the restriction of new entrants, will in themselves lead to any large or sudden diminution of expenditure during the next few years. They will strengthen the hand of the Government in coping with expenditure in every field, and they must be taken as an earnest and an example of a renewed effort to curb expenditure—an effort which, in spite of every difficulty and disappointment, it must be our ceaseless endeavour to make.

    I should like to go further. It is essential to the finances of next year that there should be definite reductions, apart from the increases in the Post Office and the Road Fund, in the total expenditure, and also that there should be savings this year. We have a programme of economies upon which we are working. If that programme produces £8,500,000 of effective economies in 1928, it would reduce our expenditure of that year to the lowest level of any year since the war—that is, leaving out of account the Post Office and the Road Fund. But, after the use which has been made in certain quarters of my modest expression of the hopes and desires in 1925, I am sure that the Committee would not advise me to offer any assurance to the House, to give any pledges, or enter into any undertakings, explicit or implied, and I can only say that we will do our best.

    Revenue, 1927

    Now I turn to the Revenue of 1927. The task of framing the Estimates of Customs and Excise in the present year has been exceedingly difficult. The Revenue for the past year is of very little value as a guide. The year 1927 should be better than 1926, assuming there are no further upheavals, but will 1927 prove better than 1926 would have done had there been peace in industry? After many inquiries, we have formed the opinion that, apart from Spirits, we may reasonably look forward to 1927 as a year a little better than 1926 would have been had there been no dispute. It is on this assumption that I put Customs and Excise Revenue at £247,000,000.

    Two subjects of taxation call for special notice, both merry in nature but doleful in mood—Betting and Whisky. As to Betting, I know of no reason to alter the Estimate of £6,000,000 given last year for a full year's yield of the Betting Tax. It was made as a speculative estimate, and a speculative estimate it remains. I am sure that the House of Commons, which carried this tax by overwhelming majorities, will show itself determined that the tax shall have a fair trial, and that we shall be able to measure the results after it has been in operation during the flat racing season. As to Spirits, year by year I am confronted with the necessity of furnishing a Spirit estimate substantially less than the one before. In spite of the fact that in last year's estimate I allowed for a drop of over 1·7 millions, the out-turn of the year failed to reach the estimate by £4,750,000. The shortage is due partly to the troubles of last year, and partly to the postponement of clearances in the vain hope that a reduction of duty was in contemplation.

    I have great regard and respect for the Noble Lady, but I do not think we are likely to learn much from the liquor legislation of the United States. After conceding some gain to 1927 from the postponements of 1926, I am still forced to allow for a decline of 1·2 millions below last year's estimate. It is quite clear that the present rate of 72s. 6d. per proof gallon, imposed at the time when the consuming power of the country was at its height, has resulted in a steady decline in consumption, and there are no signs that the bottom has yet been reached. The, moral effect may be cheering, but possibly deceptive. I have been told that various queer concoctions, baffling in some cases the terrors of our most detestable denaturants, have replaced in part the consumption of the national product, famous and welcome all over the world. I shall continue to examine whether any means can be found of mitigating the continuous fall in revenue, while at the same time taking no action injurious to the community. I am bound to state, however, that I am not hopeful of a solution.

    Coming to the estimates of direct taxation for 1927, the conditions of the moment and the transfer to the basis of the preceding year make a trustworthy estimate of the yield of the Income Tax exceedingly difficult. Last year I estimated Income Tax at £254,750,000. Having regard both to the over-estimate which I then made, and to the loss from the Coal Dispute, I cannot put the Income Tax of 1927 at more than £232,000,000. I see that the right hon. Gentleman the Member for Colne Valley, in a forecast which he gave, placed it at £230,000,000, and I think it is very remarkable that, without any official information, his own private calculations should carry him so near the mark. A falling off of this amount is a very grievous fact, and one which no previous Chancellor of the Exchequer of whom I know has been called upon to face. On this basis I have to estimate for a decline of nearly £23,000,000 upon the estimate of last year, and that in spite of the £4,250,000 carried over. I estimate the total of Inland Revenue duties for 1927 at £393·7 millions, made up of £232,000,000 Income Tax, £67,500,000 Death Duties, £25·7 millions Stamps, and £62,000,000 Super-tax. The remaining £6,500,000 is provided by the dying gasps of the Excess Profits Duty and the Corporation Profits Tax, and by the Land Tax and the Mineral Rights Duty.

    In the field of Tax Revenue there is only one bright spot. The receipts from the Motor Licence Duties are advancing, in Mr. Gladstone's phrase, "by leaps and bounds". In 1925 they were £18,000,000, in 1926 they were nearly £21,500,000, and in 1927 I estimate them at no less than £24·1 millions. This brings the total Tax Revenue to £664,800,000. The total non-Tax Revenue is estimated at £132,050,000, made up as follows: Post Office, £62,000,000; Crown Lands, £1,050,000; Sundry Loans, £23,500,000; Miscellaneous Ordinary Receipts, £18,500,000; Special Receipts, £27,000,000. The total revenue on the existing basis therefore amounts to £796,850,000.

    5.0 p.m.

    Let us take one sweeping glance backwards over the finance of the past two years. Since the right hon. Gentleman the Member for Colne Valley was responsible for our finances, I have added to the current revenue £16,000,000 by Luxury, McKenna and Safeguarding Duties. We have derived from the Road Fund and the Post Office an additional £18,000,000 of revenue. The receipts from Reparations and Debt settlements have increased by £13,000,000. The improvement in Super-tax, apart from remissions, has amounted to £11,000,000, and other sources of revenue have shown increases amounting to about £15,000,000. Thus there has been in three years a total increase in revenue of £73,000,000. Against this we have had to face £26,000,000 of loss of revenue through the lag of tax remissions granted by the right hon. Gentleman the Member for Colne Valley and his predecessors. Our resources have been depleted to the extent of about £9,000,000 by the continual diminution of the special receipts from the sale of War stores, etc., and I myself have remitted, on balance, £35,000,000 of taxation. But for the Coal Trouble, these remissions would have been fully justified, and the revenue would have expanded to meet all needs. As things have turned out, the loss from the old revenue has been replaced by new, and the total revenue has not materially changed; it is, in fact, little more than £2,500,000 above the estimate of 1924. The present Government have met their own new expenditure by their own economies. The automatic expenditure has increased by £28,000,000, and I am left with the prospective deficit of £21,540,000.

    Debt Position

    I must now turn aside to examine the debt position. On 31st March this year the nominal dead weight debt was £7,554,750,000, as compared with £7,558,500,000 12 months ago, omitting in each case the Death Duty bonds held by the National Debt Commissioners. The Blue Paper, in Table 4, gives particulars to show that the external debt has been reduced by about £9,000,000 to a total of £1,101,500,000. This reduction is partly due to capital repayments of over £5,000,000 to the United States Government and partly to the repayment in February of £5,000,000 dollars of 6 per cent. Notes raised in America in 1917 through the Central Argentine Railway Company. Our principal, almost our only, foreign debt is the debt of 4,500,000,000 dollars to the United States Government. On this we have paid since 1923 about £33,000,000 a year, of which £5,000,000 represents the repayment of capital and £28,900,000 represents the interest at 3 per cent. on the outstanding capital. During the past five years we have paid to the United States Government in respect of this debt altogether about £162,000,000.

    As an off-set to this debt, we have our claims against Germany for reparations and against the Allied Powers for war loans made by us to them. These claims are nominally for a much larger amount than our debt to the United States Government, but in 1922 His Majesty's Government declared, in the Balfour Note, that they would not ask for more from their debtors than was necessary to pay their creditors. The outlook at that time was not hopeful. At that date, and until the Dawes plan began to operate in 1924, the receipts from reparations were few and precarious, and the Allies were making no payments at all. The position has certainly improved since then. During the last two years we have been able to make a series of debt agreements with Rumania, with Italy, with France and with Portugal, to which list, I am glad to add, Greece, with whose distinguished representatives we were able last week to sign an agreement. There remain outstanding only Jugo-Slavia and Russia. Since September, 1924, Germany has been fulfilling regularly her obligations under the Dawes plan, and we may assume that she will continue to do so.

    Current reparation receipts from Germany during the past two financial years have been: 1925, £6,500,000; 1926, £9,500,000; and in the present financial year they should amount to £14,500,000. On the other hand, the receipts from Allied War debts, in round figures, were: In 1925, £2,000,000; in 1926, £8,000,000; and in the current financial year they should amount to about £10,500,000. Thus against our annual American debt payment of £33,000,000, we have received from Germany and the Allies together during 1925, £8,500,000; 1926, £17,500,000: and during the next financial year we should receive in all £25,000,000.

    It will be seen that, although the gap between payments and receipts which, under the Balfour Note, we were forced to call upon our Allies to fill, is being diminished, there has up to date been a deficiency of over £110,000,000, which has had to be borne by the British taxpayer. Further, even if and when we obtain sufficient from Germany and the Allied War debts to cover our payments, past as well as future, to the United States Government, this country will still have to bear not only, of course, the whole of its own War expenses, but the full charge of the War loans advanced by us to our Allies, which amounted in 1919 to nearly £1,500,000,000, and in no circumstances can we expect to receive any contribution to this burden.

    This policy has been adopted by His Majesty's Government, and has been accepted by public opinion in this country, in the interests of the reconstruction and stabilisation of Europe. The sacrifice and effort involved are without parallel or precedent; and, in view of the misconceptions which appear to prevail in some high quarters, I have thought it my duty to re-state the facts in their simplicity.

    Within the internal debt, the total floating debt on 3lst March stood at £715,750,000, of which just under £600,000,000 was represented by Treasury Bills. This figure of £715,750,000 compares with the figure of £704,250,000 at the corresponding date in 1926. That increase of £11,500,000 is part of the price of last year's troubles.

    Although the nominal total of the debt has fallen from £7,829,000,000 in 1920 to £7,555,000,000 now, the complaint is sometimes made that that reduction is by no means equal to the aggregate of the annual provision by the taxpayer. Some conversions, particularly those of earlier years, have actually augmented the nominal total. The Colwyn Committee has been led to comment on the issue of new conversion stock at a discount. Less competent critics declare that the burden of debt is being rolled forward, and, in spite of all our efforts, has scarcely diminished in volume, but passes on year after year to new and more distant generations.

    Let us see how the matter stands. So far I have been speaking of the nominal figure of debt, but I would like to point out to the Committee that too much attention ought not to be paid to that nominal figure. It represents the aggregation on equal terms of every £100 face value of securities, irrespective of whether such securities carry interest at 2½ per cent. or 5 per cent. or whatever it may be. Perhaps the essential fact has been more clearly presented by the statement of the Colwyn Committee that, as compared with seven years ago, when the debt stood at its peak, the effective reduction of the annual debt interest has amounted to £47,000,000 a year. If we allow for the fact that seven years ago we were liable to pay the United States Government not 3 per cent., but 5 per cent., and also allow for the altered rate of exchange, the figure of £47,000,000 becomes no less than £75,000,000 a year. We have, therefore, relieved ourselves by exertions to which all parties have contributed of nearly one-fifth of the annual interest burden, and the question arises, Have we done this, in part at least, by additions to the burden on posterity?

    There are two ways in which a gigantic debt may be spread over new decades and future generations. There is the right and healthy way; and there is the wrong and morbid way. The wrong way is to fail to make the utmost provision for amortisation which prudence allows, to aggravate the burden of the debts by fresh borrowings, to live from hand to mouth and from year to year, and to exclaim with Louis XV, "After me, the deluge!" In that way posterity receives an ever-increasing load, and is year by year confronted with a more desperate choice between exhaustion and repudiation. Not only does the load increase, but the power of bearing the load diminishes as national credit deteriorates, and at every stage those who follow are confronted with a more grievous choice between intolerable sacrifices or failure to meet the obligations of the State. The right way, on the other hand, is, by strict and severe provision of Sinking Funds, and by doing the best amid the many difficulties of life to maintain sound finance, to reduce not only the annual interest charge but the rate of interest at which the State can re-borrow and convert, and thus to strengthen the financial power of future Governments and generations to bear the burden which we transmit to them. If this be done, as short-term debts are converted into long, and as old maturities are replaced by new securities, although the burden may descend to new lives and to other times, yet with the burden we also transmit an ever-growing power to bear and discharge it.

    Let us assume, for instance, that were able to repeat over the next 20 years the same diminution of interest charges which has been accomplished since the War. Let us assume that peace abroad, that co-operation at home and that thrift, public and private, bring down the rent of money to 3½ per cent. in the next 20 years. The Chancellor of the Exchequer would have at his disposal, without imposing any burden that we do not bear to-day, over £80,000,000 a year in addition to the present Sinking Fund, that is to say, £130,000,000 a year at his disposal with which to reduce, if it were so decided, the capital of the debt. Extend the view another 20 years, let the same policy be maintained, and the debt would be within measurable distance of being redeemed without any pressure or burden on the people of that time greater than we are ourselves enduring to-day. One cannot, of course, expect that posterity will be so scrupulous. Easier methods may come with easier times. The civilisation of these islands, with all its worries and all its glories, may have resolved itself into some much more rudimentary organism. But that will not be our fault, and if we continue to do our duty faithfully, and to use our best endeavours, we may in imagination present ourselves before the remote tribunal of posterity as judges rather than as culprits, and we shall have rendered them no injury by the financial policy which all parties have pursued.

    Sinking Fund Policy

    There is nothing in the workings of our financial policy since the War which should discourage us from persevering steadfastly in debt redemption. I have been advised from various quarters, some of them both responsible and instructed, to meet the deficit in 1927 by the partial suspension of the £50,000,000 Sinking Fund established four years ago by my right hon. Friend the Prime Minister when he held this office. I have never dreamed of doing such a thing. To shirk the unpopularity involved in putting on a moderate amount of new taxes at the expense of our settled policy of debt repayment would be cowardly and wrong. It would also be deeply injurious to the national interest. Britain cannot afford to fly the signal of distress, and there is neither the need nor the excuse to-day for flying it. We have seen in a neighbouring country the immense and immediate effects produced upon public credit by confidence and financial prestige. There never has been any community in the world to whom financial reputation and proofs of strength were more vital than to Great Britain; and there never has been any time in our history when, with great and continuous conversion operations and possibilities marching upon us, financial prestige was more vital to Great Britain than it is now. For what is the dominant fact in our finance? It is the great possibilities of conversion which are forced upon us, or are open to us, in the next two or three years. In October of this year, £112,000,000 of 4 per cent. and 5 per cent. War Bonds fall due. Next Spring, £66,000,000 of 3½ per cent. War Loan and 4½ per cent. Treasury Bonds fall due. In 1928, over £443,000,000 of 4 per cent. and 5 per cent. National War Bonds fall due. In 1929, £46,000,000 of Treasury and Exchequer Bonds; and above all there looms the option which is open, in 1929 and later years, to deal with over £2,000,000,000 of the 5 per cent. War Loan. This is the great position that is open, and this is the opportunity which is to be seized or marred in the next few years. The repayment of debt is only one of the factors necessary to produce favourable conditions. I am well aware of that; but it is a very important factor, and it is a factor which is within our control, and which we must labour to provide. I have cast about and searched in all directions for means of avoiding the imposition of crippling taxes upon industry. I am deeply anxious to do nothing that would check the revival of trade and employment, of which at last from many quarters there are flickering promises; but I have not even considered at any moment, in the circumstances in which we stand, the possibility of a raid upon the £50,000,000 Sinking Fund.

    That, however, is not the end of the story. This Parliament set before itself from the beginning the aim of maintaining a Sinking Fund of £50,000,000 a year. Accordingly, last year, being through the Coal Subsidy about £10,000,000 short, I abstained from giving any remission of taxation, and raised the new Sinking Fund for 1926 to £60,000,000. On that £60,000,000, we now have a deficit of £36,500,000. We have not only paid our way, but, even in this last year of misfortune, we have paid off £23,500,000 of debt. In no other country would such a situation be viewed with disquiet, but the fact remains that we are at this moment more than £36,000,000 behind-hand in our programme of debt repayment, and we have failed to that extent in carrying out the policy deliberately adopted with the assent of all parties. I do not pledge myself to any rigid programme of repayment of arrears, but I cannot remain indifferent to that shortfall. We cannot leave the dead to bury their dead, and go on our way rejoicing. I conceive myself bound to pay off in the present year, 1927, at least a substantial part of the inroad upon the £50,000,000 Sinking Fund made by the coal troubles of 1925 and 1926. Therefore, it is my duty to warn the Committee, at this stage in the argument, that it is not merely with a £21,500,000 deficit that we are confronted, but with something—I win state the precise figure in its proper place—between £35,000,000 and £40,000,000, that is to say, the prospective deficit and a substantial part of the old deficit.

    Simplification Of Income Tax

    I have now apprised the Committee of the task which lies before us this afternoon, and of the very large amount of new revenue which has to be found for the services of the year. It towers up against us; but before I proceed to indicate the steps by which we shall presently attempt to scale together that formidable precipice, and, while the Committee is gathering its strength and courage and breath for the attempt, I will turn aside to deal with a few interesting topics not directly related to our main problem. A year ago I made the following statement:

    "Everyone seeks for the simplification of the Income Tax. I have an expert Committee sitting continuously, and have had for many months under my personal direction, and I trust some day to be able to frame extensive proposals. All I can say at present is that the difficulties do not diminish with careful study."—[OFFICIAL REPORT, 26th April, 1926; col. 1704, Vol. 194.]
    The foundation of the British Income Tax is deduction at a standard rate at the source from every form of income capable of being so treated. From this foundation it would be rash to depart. It follows, therefore, that those whose incomes are wholly taxed at the source must claim repayment from the Inland Revenue. Those whose incomes reach the Super-tax level must make further payments, and those who have sources of income some of which are not taxable at the source must submit their cases to adjustment. Thus a very large amount of correspondence and many complications are inevitable. The limits to simplification are fixed by our adherence to our well tried system of deduction at the source, with adjustment up or down. Last year we took an important step towards simplification. We reduced the four bases of assessment under Schedule D to the single basis of the preceding year. Now I am in a position to take several further steps.

    The first is the transfer of Schedule E, which deals with salaries, to the basis of the preceding year. The second step is more important. What we now call the Super-tax for 1926 is charged at this moment on the same basis as the Income Tax for 1925. Viewed in this light, the Super-tax is nothing more than an additional Income Tax for the previous year. I propose that in the future Super-tax shall be assigned to the year to which it rightly belongs, that is to say, the one prior to that in which it is paid. This assignment of Super-tax to a different year does not affect either the basis on which it is assessed, the rate at which it is charged, or the date at which it falls due for payment. But, although the change is one of form rather than of fact, it makes it possible to express the Income Tax and the Super-tax in the form of a single graduated tax on income—a tax which will rise in a smooth progression and by a harmonious curve from the lowest rates to a maximum of 10s. in the £, a tax which will be charged on a uniform basis on every income, whether large or small. This change merges the burden of Income Tax and Super-tax in one graduated scale far more intelligible alike to those who pay this tax and to those who have not yet attained that distinction. It removes any ground there may have been for the grievance that Super-tax was charged on income which has already been absorbed by Income Tax, and it reveals the Super-tax in the form which it has always been intended to take, and on the basis on which it has always been in principle levied, namely, that of an additional graduation in the higher ranges of income.

    My third proposal for simplification is in itself simple; I believe it will also be welcome. It is that a single annual return should be made to serve as nearly as possible all purposes, and that that return should be given by the taxpayer on the simplest of all bases, namely, his total income for the preceding year. These reforms involve no alteration in the duties and functions of the various local bodies of Commissioners of Income Tax, no alteration in the duties of any of their officers save as regards the ingathering of returns, and no alteration in the dates at which the duties are payable by individual taxpayers. The details of the scheme will be set forth in the Clauses of the Finance Bill in language which I may say with safety very few people will understand. I shall also set forth in the Finance Bill, not this year, but next year—for the scheme cannot be brought into force till next year—the rates for the combined Income Tax and Supertax, and they will be in a form which will carry immediate conviction to all concerned.

    Our progress in these matters must be gradual; I am advancing step by step; and my object will not be attained until arrangements are made to enable Income Tax-payers liable to several direct assessments in respect of sources of income arising in different parts of the country to receive a single demand, and to make payment at a single place. This will be dealt with next year. I have unfolded the scheme of simplification on which we are engaged, and by the normal end of this Parliament I trust we shall have attained one scale and one return for Income Tax and Super-tax together, and one demand and one payment for direct Income Tax assessments throughout the whole country.

    Yes, Sir.

    I have one more step in simplification to propose, and it is one of which we shall not see the fruition for several years. It is long overdue. The Income Tax law has been built up stage by stage for the last 85 years. Although it was consolidated in 1918, it has not been codified. Much of the old language still remains, and invests the whole system in obscurity and baffles the layman. It is high time that an attempt was made to re-write the Acts governing the Income Tax in a clearer and more intelligible form. I propose to ask a body of experts of the highest qualifications to take the task in hand. Their labours will be long, but I hope when they fructify the fruits will be found to be both rare and refreshing.

    Tax Avoidance

    During the financial Debates of last year reference was made to the various loopholes in the law which enabled taxpayers to avoid part of the burden of Inland Revenue duties. The hon. Member for South Salford (Mr. Radford) referred in vigorous terms to the loss of Super-tax which was capable of arising from this cause. I undertook to investigate the question as a whole, and I have done so. No system of direct taxation in the world is more scientifically planned or effectively administered than ours, and no body of taxpayers meet their obligations with greater readiness than the British taxpayer. There is also the well-known dictum of Lord Sumner on the subject of legal avoidance. He says:

    "The highest authorities have always recognised that the subject is entitled so to arrange his affairs as not to attract taxes enforced by the Crown so far as he can legitimately do so within the law."
    Without challenging this axiom, it is clearly the business of the Government to watch for loopholes, and to propose remedial measures from time to time. The investigation which I have just concluded, and in which I have been assisted by a Cabinet Committee and by my right hon. Friend the Atorney-General, shows that means exist by which taxation, especially Super-tax and Death Duties, can be legally avoided in whole or in part, and His Majesty's Government feel that the time has come to make proposals to Parliament on a few prominent aspects of the subject. The loss is not yet grave. The yield of the Super-tax and the Death Duties, even in this year of difficulty, is evidence of that; but it is our duty to close these loopholes as far as possible before they are so widely resorted to as to injure the revenue.

    My hon. Friend must have had a premonition of what I was going to say. I have first of all to make this announcement. The Government have invited the Governments of the Channel Islands to co-operate with them in preventing the loss of duty in the case of residents in this country who migrate to Jersey or to Guernsey. I shall not ask the Committee to consider the matter in detail until the negotiations, which are being actively pressed forward, have been completed.

    I shall propose provisions to strengthen Section 21 of the Finance Act, 1922, which deals with the avoidance of Supertax through the medium of the "one-man company." I shall also suggest legislation to prevent the avoidance of Super-tax by the sale of securities cum dividend and their immediate repurchase, and I shall take at the same time the opportunity to remove a long standing grievance of the Super—tax payer, to wit, the excessive charge which arises when two years' dividends happen to be declared in one single Income Tax year. I shall propose a small amendment, without retrospective consequences, to prevent avoidance of tax in connection with subscriptions to charities, and I shall at the same time propose a relief to charities which was strongly pressed upon me last year, to wit, the exemption from Income Tax of the profits of public schools and other similar trading profits of charities. I have also been giving and shall continue to give attention and consideration to the legal avoidance of Estate Duty. It may well be that the proposals upon this subject should be introduced next year. At the same time I propose to examine the basis of the liability of agricultural land to Estate Duty with a view to rectifying any injustice or anomaly in its charge. No time will be lost through the postponement of this aspect of the subject till next year. The provisions relating to Super-tax avoidance cannot in any case come into operation until 1928, and any Estate Duty provisions on which we may decide will be made operative at the same time, so that the whole process of dealing with tax avoidance will come into operation simultaneously. I cannot estimate the gain to the revenue. Provisionally I have taken the view that there may be a benefit of £500,000 in a full year, but the point is not so much the positive gain as the prevention of a loss which, over a long period of years, might very seriously affect the whole basis of our taxation.

    In the meanwhile there is one Estate Duty question with which I am able to deal at once. When a little while before the War my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George) altered the basis of the charge on settled property, his eagle eye overlooked one detail. This detail is now discovered to be costing the Exchequer a sum which approaches £1,000,000 a year. It is not a subject which lends itself to an explanation at once lucid and brief. It belongs to the more mysterious technique of the duty. The general rule at present is that to determine the rate of duty on an estate, all the property passing on death, whether free or settled, is added together. On the other hand, property which was settled by a person who died before the introduction of the Estate Duty in 1894, and which was settled in such circumstances that it would have been subject to Estate Duty had the settlor died after the introduction of the duty—the property in such circumstances is not aggregated, when passing on the death of the life tenant, with the other property passing on that death, This is an anomalous exception to the general rule. It was, I conceive, entirely by mistake that this provision was left unaltered in 1914, when the general basis of the charge upon settled property was under review. Rectification of the oversight will yield to the Exchequer £300,000 this year, and £800,000 in a full year—an addition to my resources which I cannot at the present time ignore.

    Minor Proposals

    There are a number of minor points affecting the Inland Revenue duties which will form the subject of proposals in the Finance Bill. I will only mention the most important. The burden of the Companies' Capital Duty and the Transfer Duty—each duty is charged at 21 per cent.—constitutes in the opinion of His Majesty's Government an undue obstacle to the healthy amalgamation and reconstruction of companies. I propose to introduce a relief from these duties on the lines recently recommended by the Committee which surveyed necessary Amendments in the Companies Acts. This relief will take effect from the date of the passing of the Finance Act of 1927 into law.

    No. I shall propose to improve the machinery of the law to enable the Income Tax to be effectively recovered in respect of the copyright payments made to non-resident playwrights, authors and the like. I shall also put forward proposals to amend last year's legislation concerning the preceding year basis for Income Tax, Schedule D. These proposals will be designed, in part, to correct small techincal inaccuracies which have been discovered, and in part to meet representations which were made during last year's financial discussions in regard to hardships in certain respects which the proposals then enacted entailed. I shall propose also to amend the machinery for the collection of Income Tax on certain payments of interest made under deduction of tax, with consequential effects on the Crown rights in winding up and bankruptcy proceedings.

    Finally, in this interlude I must mention a change in regard to the taxation of motor vehicles used solely for agricultural purposes, which also calls for a Resolution of the Committee. Owing to a difference of interpretation by the Courts in England and Scotland, motor lorries used solely in agriculture are taxed in Scotland as commercial vehicles and in England as locomotives. It is proposed to assimilate the practice of the two countries, making the reduced rates apply in both in the case of vehicles owned by farmers and used by them solely in connection with the cultivation of their land. I trust this will be accepted as a satisfactory solution by the farming community.

    Translucent Pottery (Customs Duty)

    Now the breathing space is over. The precipice still confronts us. We must address ourselves to the climb. The task before us is that of finding, let us say, £35,000,000 or £40,000,000 of new revenue. And, in addressing myself to this, I will take the smallest items first. The Safeguarding of Industries procedure in the present year has evolved a duty of 28s. per cwt. for five years on table ware of translucent and vitrified pottery. I make this proposal in accordance with the recommendation of the Majority Report of a Committee duly appointed. The duty will become chargeable on 19th April, and it is estimated to bring in revenue to the extent of £150,000 this year, rising to £200,000 in a full year. This yield, though modest, ought not to be disdained, having regard to the financial situation. And incidentally the tax may win the gratitude of my hon. and right hon. Friends in the Liberal party by supplying them not only with a ground for moral indignation, but with an additional reason, if such were needed, for their continued political existence.

    Imported Motor Tyres (Customs Duty)

    Now I pass to that familiar branch of our fiscal policy known to history, despite the wishes of its parent, as the "McKenna Duties." These are duties on imported foreign luxuries. Under them all parts and accessories of a motor car except one were, upon the authority of Mr. McKenna, and the other leaders of the Liberal party past and present, protected, for revenue and other purposes only, by a 33⅓ per cent. ad valorem duty. Tyres alone were left outside. Originally, as these duties were conceived by Mr. McKenna, by Lord Oxford, and by the right hon. Member for Carnarvon Boroughs and the right hon. Member for West Swansea (Mr. Runciman), they included a tax upon imported tyres. Tyres were an integral part of the original McKenna Duties, but at the last moment they were excluded, for the sake of a friendly arrangement with the tyre producers of the United States, to facilitate our blockade arrangements against Germany by passing all American tyres through our hands before they reached the Continent of Europe. I propose, alike in the interests of symmetry and revenue, to rectify this anomaly, and to perfect the work of Mr. McKenna and his colleagues by bringing imported motor tyres of all kinds within the ambit of the McKenna Duties as from to-morrow. Empire tyres will receive a rebate of one-third.

    I have made some inquiries of the principal authorities in the trade as to the effect such a Duty is likely to have on prices. Their reports are encouraging; but I will not go further than to say at the present time that it will be very interesting to see to what extent, if any, this Duty is subsequently reflected in prices. An important foreign firm, that of Michelin, has already, in intelligent anticipation of such a development as has now taken place, begun to build a considerable factory in this country, and an American firm I am told, is likely to do the same. Therefore, there appears to be no danger of any lack of healthy competition between producers. The extension of the McKenna Duties to cover tyres is estimated to yield £700,000 this year, and £750,000 in a full year.

    Imported Sensitised Celluloid Film

    Before proceeding to the next new tax, I ought here to mention a minor matter relating to the McKenna Duties with which I propose to deal. The Court of Appeal recently decided that sensitised celluloid film for cinematograph purposes when imported in widths of more than standard size was not liable, as had been assumed, to the Customs Duty on imported blank film. Such a decision, if it were to stand, would ruin the revenue from this source. In the circumstances, I am making a proposal to include as from to-morrow this kind of film within the operation of the Duty on imported films. This creates no additional revenue, but merely preserves the existing Duty.

    Matches (Revised Duties)

    Proceeding upon our ascent, step by step and crag by crag, I now come to matches. It will probably be a surprise to many well-informed Members that we have been for many years raising revenue by a strictly orthodox Customs and Excise duty upon matches, the proceeds of which last year amounted to no less than £3,500,000. The British match industry has submitted to me a plan which combines an increase in the Match Duty with an alteration of its basis, which they assure me will be more satisfactory to them in relation to foreign competition than is the existing scheme. I propose accordingly to raise both the Customs and Excise Duties on matches by approximately 20 per cent., and at the same time to replace the existing scale of rates per standard gross of 10,000 matches by a scale graduated according to the contents of the box. Thus the Customs Duty upon matches imported in boxes containing more than 20 but not more than 50 matches will be 4s. 4d. per gross of boxes and the countervailing Excise Duty will be 4s. 2d. The full particulars will be found in the White Paper. The proposal will come into force to-morrow, and is estimated to yield £600,000 this year, and £700,000 in a full year. [HON. MEMBERS: "Additional?"] Yes.

    Wines (Customs Duties)

    Now I come to the intricate subject of the Wine Duties. These Duties were doubled in 1920. Despite those increases the consumption of wine to-day is about 50 per cent. above the consumption before the War and in 1921. But the various classes of wines have not all shared equally in the advance. Port has gained the most, perhaps at the expense of whisky. Moreover, under the substantial preference which we accorded in 1925, Empire sweet wines found a market in this country for the first time, and have achieved a very remarkable success. Light beverage wines, on the other hand, although showing an increase over 1921, have not as a whole maintained their pre-War position, and the consumption of sparkling wines has fallen below the pre-War level. Whilst therefore imported wines, taken generally, appear to be able to support an additional burden, it seems right that any increase that has to be imposed should not be distributed equally over the whole trade.

    The Committee are no doubt aware of the main rates of Duty on foreign wines. Six shillings per gallon is charged on wines containing more than 30 degrees of proof spirit, and 2s. 6d. a gallon on wines containing less. The first question therefore to be considered is whether the dividing line should be maintained at 30 degrees, or whether it should be altered to some lower point in the scale. The object of the dividing line should be to render wines to which extraneous spirit is added liable to a higher rate of Duty than wines which when entering the country contain no spirit beyond that produced by the natural process of fermentation. No dividing line can wholly achieve this purpose, but it is common ground between all parties whom we have consulted that the present dividing line bears no relation to the facts. Wines fortified by spirit enter the country in large quantities below the 30 degrees limit as well as above it. In these circumstances, I have come to the conclusion that it will be right to take advantage of the present need of revenue to lower the dividing line for foreign wine to 25 degrees. This figure, after exhaustive inquiries, in which we have been greatly assisted by the trade, appears to be in every way the most appropriate. As Empire dry wines appear to develop naturally a higher alcoholic content than foreign wines, I propose to fix the dividing line for Empire wine at a slightly higher point in the scale, namely, 27 degrees.

    These alterations for this year would not produce sufficient revenue for our needs. I propose, therefore, that non-Empire wines containing more than 25 degrees of proof spirit shall pay in future 8s. per gallon, and those which contain less shall pay 3s. per gallon. The corresponding rates for Empire wine above and below 27 degrees will be 4s. and 2s. per gallon respectively. These changes in the Wine Duties are estimated to yield £1,500,000 in a full year and £1,250,000 this year. We arranged some time ago to terminate on 23rd April the Anglo-Spanish Commercial Treaty of 1922, and the new rates upon imported wines will come into force on Monday, the 25th April. Before I pass from the subject of imported wines, I should like to express my regret that it has been necessary to cause inconvenience to the trade by imposing restrictions on clearances so far in advance of the Budget statement as the 1st February. But the rate of clearance at that date had become so abnormal that, unless immediate action had been taken, the revenue for this year would have suffered. The restrictions will cease to apply on the 25th April.

    British Wines (Excise Duty)

    While the tax collector has hitherto levied his toll on the imported products of every vineyard, a new industry has sprung up in this Island where there are no vineyards. That industry is called "British Wines." Science and enterprise have enabled the juice of the grape to be imported in an unfermented condition, and thus to avoid Customs Duty. The consumption of British wines has shown a striking increase in the last few years, and in 1926 their production for retail sale amounted to very nearly 1,800,000 gallons. We may both admire and respect the ingenuity of the process, and yet feel that it is not fair that this product should continue to be immune from the taxes placed upon other intoxicants. It is, I am assured, able to bear a moderate charge. I think from some point of view it is a recognition of their quality. I propose, therefore, that an Excise Duty of 1s. per gallon shall be placed on British wines, to take effect on the 25th April. This proposal should yield a small revenue of £90,000 in a full year and £80,000 in the year 1927, with which we are immediately concerned.

    Tobacco (Increased Duties)

    Now I come to an even more serious subject than wines. Notwithstanding the heavy increases in Duty which took place during the War, the consumption of tobacco is approximately one-third greater than in 1913. It is a remarkable fact, which I have already mentioned, that the consumption in the last financial year, despite the trouble, was about the same as the year before. The great accession to the ranks of the users of tobacco from the other sex has supplied a continual reinforcement to the tobacco revenue. In the present unhappy circumstances, tobacco must be called upon to bear an increased Duty. I propose therefore as from to-morrow that the Duty on imported unmanufactured tobacco shall be raised from 8s. 2d. to 8s. 10d. per pound, an increase of 8d. The rates on the other kinds of tobacco will move proportionately. This increased tax will, I estimate, produce £3,400,000 in a full year, and £3,100,000 in 1927. I may add that I have no reason to believe that the whole increase of this tax will be passed on to the consumer. [HON. MEMBERS: "Rubbish!"] We shall see. [HON. MEMBERS: "We shall see."] The restrictions on the clearances of tobacco which have been enforced during the past month will be removed as from tomorrow.

    6.0 p.m.

    Such are my proposals in respect of ordinary indirect taxation. Nothing but a national emergency of the gravest character would induce me to augment the Duties on sugar and tea. Luxuries, indulgences, conveniences of all kinds, especially when imported from abroad, may well be called upon to bear a heavier load in these difficult times, but the basic comforts of the mass of the people and the poorest of the poor should only be further loaded if the public safety were in danger and every other resource had been exhausted. To sum up, these various increases of ordinary indirect taxation yield a total increased revenue in the present year of £5,880,000 and in a full year achieve a revenue of over £6,500,000. That leaves only about £30,000,000 for us to find.

    I now quit for the time being the zones of permanent revenue and I enter the area of windfalls, or once-for-all receipts, which, while they afford no foundation for the permanent finance of the country, are suitable for bridging the gap in our fortunes caused by the present emergency. I shall propose to the Committee certain expedients. Objections could be urged against each, but I wish to make it perfectly clear that the choice lies between accepting them, on the one hand, or, on the other hand, of either failing to carry out our policy of maintaining the Sinking Fund, or imposing heavy and injurious taxation. Let the Committee weigh these alternatives carefully before they make up their minds on these proposals.

    Road Fund Reserve

    I come first to the reserve of the Road Fund. It amounts to £12,000,000. The income of the Road Fund is increasing by about £3,000,000 a year. Large as have been the liabilities contracted, resolute as have been the efforts to spend the money in useful ways, the coffers of the Road Fund are continually overflowing, and the intake has, in spite of the assistance which I rendered last year, outstripped the programme. There is no doubt whatever that the annual revenue from Motor Licence Duties will be sufficient in each of the coining years, not only of this Parliament but of the next, to carry out every great undertaking entered into, including the London bridges, the programme of main roads and the increased grants to rural authorities made in two successive years, and yet to provide an ever-expanding total for general purposes. The £12,000,000 reserve stands outside all this, and is not required for any of these purposes. For what then is it required? It is the working balance on the Road Fund. Owing to the fact that two-thirds of its revenue is collected in the last quarter of the financial year, while expenditure flows out evenly throughout the whole year, it has hitherto been the practice to carry over a substantial balance to finance the Department until the full flood of its revenue comes in January.

    By every rule of sound finance national balances should, as far as possible, be pooled, and the Exchequer, with its immense resources, should act, as it does for every other Department of State, as the universal hanker. This £12,000,000 will play a far more useful part in national economy if it be handed over to the National Debt Commissioners than if it is maintained as a separate reserve behind a particular Department whose revenues are quite sufficient to meet all proximate obligations. The £12,000,000 is, therefore, transferred to the general funds of the State, and the Exchequer will in return assume the responsibility of financing the expenditure of the Road Department in the regular manner throughout the year.

    Brewers' Credit

    We have now accomplished about half of our laborious climb, and perhaps it will be with a sense of refreshment that the Committee will receive my next proposal—Beer! The Committee will remember that last year I reduced the period of credit allowed to brewers for the payment of duty from three months to two. This has provided £5,200,000 for the Exchequer. It was suggested to me last year that the second month's credit could equally have been withdrawn. I thought, however, that it was better to take one step at a time—to take two bites to a cherry—to see what the results were, and to leave the second month's credit available for an hour of greater need. Only too soon has that hour come. I propose to reduce the brewers' credit from two months to one. I wish to acknowledge the assistance I have received from the brewers and the admirable attitude which the representatives of the trade have maintained in the face of the heavy, though not perhaps entirely unexpected, burden laid upon them in two successive years. I have arranged that the extra month's duty this year may be paid in six monthly instalments, the first of which will not become due until October next. In this way I am led to believe that the burden will be imposed, at any rate, in its least onerous form, and I estimate that this reduction of the brewers' credit will produce exactly £5,000,000.

    Income Tax: Schedule A

    We are getting on. We are still some distance from the summit, but we shall now get there very quickly—in fact, shall only need to trouble the Committee for a very few minutes more. Last, but not least, I come to Income Tax. Sixpence on the Income Tax would give me all that I require for this year, but it would give us much more than we require for next year. Income Tax is bending under the strain of recent years. The emergency with which we are confronted is one which will be greatly diminished next year, and next year the advantage of having an Income Tax based on a single year will come to hand just as the disadvantage of it being based on a year of misfortune oppresses me at the present time. I have thought it my duty to find some means whereby the revenues of this year could be sustained without unduly burdening the future, and without throwing a tax on the country which would injure industry and trade. So I have come to Schedule A of the Income Tax, the "Landlord's Property Tax," as it is called. Five-sixths of Schedule A deals with urban property, and one-sixth with agricultural property.

    Income Tax Schedule A, as everybody knows, is ordinarily paid by the tenant into the Exchequer, and deducted by him from the next payment of the rent which he pays quarter by quarter to the landlord. Before the War, when Income Tax stood at little more than a shilling in the pound, the tax for the whole year was paid in a single instalment due on the 1st January. But when Income Tax, under pressure of the War, was raised above 5s. in the pound, one quarter s rent was no longer sufficient to defray it. When the tenant had paid the whole of the quarter's rent into the Exchequer, there might still remain a further sum for which he could not recoup himself until the next quarter's rent fell due. In consequence, in 1918 a concession was made, and the tax was allowed to be paid in two instalments, one on the 1st of January and the other on the 1st July. As soon as the Income Tax fell below 5s. the reason for this concession disappeared, and it would, in the ordinary course, have been withdrawn. It has, however, up to the present escaped the notice of nay predecessors, and is in consequence happily available in our present need. I propose therefore to revert to the pre-1918 practice of collecting the Income Tax Schedude A in one instalment payable on the 1st January.

    Now let us see what is the actual weight of the new burden which the withdrawal of this concession will impose on this class of taxpayer. He will lose six months' interest on half the amount of his tax. For instance, suppose a man has an income of £1,000 a year from rents—I leave out for the sake of simplicity the question of his personal allowances—the tax on this at 4s. in the £ would be £200. Under the existing system he would pay £100 in January and £100 in July. I propose that he shall pay £200 in January and nothing in July. That is to say, he will lose the interest on £100 for six months. At 5 per cent. this interest is £2 10s. On an income of £10,000 from rents the additional burden will be £25; and over the entire field of the tax, which covers nearly £40,000,000 of revenue, the actual additional burden amounts to about £500,000 a year. This represents the permanent financial burden which I am now imposing upon this class of taxpayer. I do not underrate the inconvenience, and in some cases the hardship, that will be caused by the earlier collection of the tax; but there are inconveniences and hardships confronting me in whatever direction I turn. After the year of change, the tax will have adjusted itself to the new basis, and the Schedule A taxpayer will pay only 12 months' taxes every year. I should mention that the present instalment system will not be disturbed where the Schedule A tax is levied on income forming part of a man's emoluments, such as a clegyman's tithe.

    The financial burden of the taxpayer is, as I have said, limited to £500,000 a year, but the results of the change are very important to the revenue. Another instalment of Schedule A is brought into the finance of the present year, and this is done without depleting or forestalling the revenue of future years. The operation indeed is one which in several respects resembles the shortening of the brewers' credit. Like that, it is a wartime concession which is now withdrawn. The whole series of payments is pulled forward to an earlier financial year, and while it is continued on that basis in perpetuity all that will happen is that at the end of the world, if that date should fall between December and July, the Chancellor of the Exchequer—whoever he may be—will be found with one additional instalment of Schedule A in his possession. As to the taxpayer, if the end of the world come to him between these dates, December and July, he dies having already paid one instalment which, under the existing system, would remain to be paid by his executors. His personal position is not therefore, through the change I am making, further damnified either in this world or in the next. The result of making this change is to bring into the Exchequer in the present year no less than £14,800,000.

    Final Balance Sheet

    We have now reached the summit which we set ourselves to scale. Adding together the £5,900,000 of new Indirect Taxation, the £12,000,000 from the Road Fund Reserve, the £5,000,000 from the brewers' credit, the £14,800,000 from Schedule A, and £300,000 from rectifying the Estate Duty anomaly, we obtain a total increased revenue for 1927 of nearly £38,000,000. The prospective deficit of £21,500,000 is thus converted into a prospective surplus of £16,400,000. This enables me to raise the new Sinking Fund to the unprecedented level of £65,000,000, and so to pay off nearly half of the arrears into which we have fallen through the disasters of 1926. I am now able to balance the Budget for 1927 with a revenue of £834,800,000 and an expenditure, including £65,000,000 Sinking Fund, of £833,400,000, and my final prospective surplus becomes £1,400,000, which is certainly none too large, and requires to be fortified by current savings from the Estimates of the present year.

    I shall permit myself very few concluding comments. The indirect taxes which have been chosen, even on the assumption that the whole burden be passed on to the consumer, and not to some extent paid out of profits, spread their weight over all classes. I have proposed no permanent taxes for the sake of a Sinking Fund higher than £50,000,000. If I am using nearly £17,000,000 of once-for-all, or windfall, revenue, to meet current needs, that is because a large part of our difficulty is temporary, and the revenue next year will recover at least to that extent. The remainder of the windfall money goes, as it should go, towards wiping out the arrears into which the Sinking Fund had fallen, and is correctly devoted to the amortisation of debt.

    I must however warn the Committee and those in the House who demand expenditure—and they sit in every part of it—that it will be quite impossible to repeat in another year or in other directions the processes which have been adopted this year. Every conceivable expedient has been considered, and I am at the end of my adventitious resources. Unless expenditure can be reduced as revenue grows, there is no chance of any reduction of taxation. If expenditure, apart from self-supporting expenditure, grows, there is no means of meeting it except by the further taxation of tea, sugar or beer, or by the raising of the Income Tax, Super-tax or Estate Duties. And rather than see the Sinking Fund reduced in time of peace below the statutory level of £50,000,000, I shall without hesitation, should I be responsible, recur to any or all of those expedients. Meanwhile, in this period of exceptional difficulty, I have tried my best to guide the country round a difficult corner; I have tried my best to find a way of balancing the Budget without checking the long-looked-for or, at any rate, long-hoped-for trade revival, and without impairing that national credit upon which not only the finance, but the commerce of Britain is vitally dependent.

    Customs And Excise

    Continuation Of Duty On Tea (Customs)

    Motion made, and Question proposed,

    "That the customs duty chargeable on tea until the first day of August, nineteen hundred and twenty-seven, shall continue to be charged on and after that date until the first day of August, nineteen hundred and twenty-eight, that is to say:
    Tea, the lb. … … fourpence.
    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."

    The Member who follows the Chancellor of the Exchequer on Budget Day is in the position of a man who moves a vote of thanks to the hero of an occasion. He is expected to say pleasant things, and to be bright, brief and brotherly. I can fulfil two of these expectations. I shall be brief and brotherly. I am afraid I can hardly promise to be bright. I have not the right hon. Gentleman's gift of seeing a swan in every goose and a silver lining to the blackest cloud. The right hon. Gentleman was faced by difficulties which would have been the despair of most men. The right hon. Gentleman is not like most men. Those who expected that he would come here this afternoon in a proper mood of penitence and humility, and appropriately dressed in sackcloth, did not know the right hon. Gentleman. He is not that sort. Excuses he may make, but apologies never. He lives in a realm of imagination. He glories in big figures. If he cannot have a big surplus, then he must have a big deficit. He is like Charles VII of France, of whom it was said, "No man ever lost a kingdom with more gaiety."

    I am sure that the Committee will not withhold admiration from the right hon. Gentleman for the courage and audacity with which he has faced the situation. I shall not, at this stage of our proceedings, attempt to follow the right hon. Gentleman; I shall reserve that for a later date. But I am sure that I shall be expressing the feelings of every Member of the Committee When I say that we have admired the charm of the right hon. Gentleman's deliverance and the clearness with which he has put these very difficult matters before the Committee. The fact that the right hon. Gentleman has had a very difficult duty to discharge has not in the least moderated his eloquence or lessened his charm. He has spoken as eloquently this afternoon in facing a big deficit as he did two years ago when he so lavishly distributed surpluses which had been left by his predecessor. I shall detain the Committee now for only a moment or two just to indicate in a few words the line that the Opposition will probably take in regard to some of the proposals which have been submitted this afternoon.

    First of all I would say that we shall contest the excuse of the right hon. Gentleman that his financial embarrassments are wholly to be attributed to the industrial dislocations of last year. He began his statement by reminding the Committee that he had said that if additional revenue were needed, both direct and indirect taxation would have to make their contribution. He has levied or proposes to levy a number of permanent indirect taxes, but he proposes no addition to the permanent direct taxes. If the right hon. Gentleman succeeds in getting more out of tobacco without an increase of price—which I very much doubt—if he can extract for revenue purposes some of the exorbitant profits of the tobacco monopolists, then perhaps on this side of the House there will be no great complaint about the proposal that he makes. I shall reserve a fuller consideration of these proposals and of the general financial position set forth by the right hon. Gentleman, and I shall conclude now by saying, I think in the name of every Member of the Committee, that we tender to the right hon. Gentleman our hearty congratulations not merely on the great physical effort of speaking for so great a length of time, but on the brilliancy with which he has laid his proposals before the House.

    My right hon. Friend who has just spoken said that an ex-Chancellor of the Exchequer was always in the position, on the first day of the Budget, of one who was moving a vote of thanks, reserving criticisms and disagreeable things for the next day. I am in the position of another ex-Chancellor of the Exchequer seconding the vote of thanks which has been moved, and I do it with a feeling of gratitude for over two and a half hours of extraordinarily brilliant entertainment. I think that we ought, each and all, to contribute to the revenue by paying Entertainments Duty. The entertainment has been well worth a very high duty. The right hon. Gentleman is, I think, the merriest tax collector since the days of Robin Hood. He made us feel, all those who have been subject to these taxes and inconveniences, that it was really rather delight than otherwise to contribute to them. I do not propose to say anything with regard to the general character of the Budget. It is extraordinarily ingenious and extraordinarily audacious, but those qualities we always expect from the present Chancellor of the Exchequer. To what extent the proposals are sound—that is something we expect less from him than the other qualities. As far as I can see he has followed a very old device of those who are hard up—that is to anticipate next year's revenue. He has done that to a very considerable extent with regard to both beer and Schedule A. I am not going to say anything with regard to the desirability of those two expedients, but there was one thing which was not very clear. It looked at one moment as if the Chancellor of the Exchequer were going to resort to an expedient which Chancellors of the Exchequer many times have been recommended to adopt and that is to treat the revenues of corporations and companies as a whole, and charge them with Super-tax. My right hon. and learned Friend the Member of Spen Valley (Sir J. Simon) asked whether that would cover commercial corporations and I understood the Chancellor of the Exchequer to say that it would, but gathered from the way in which he summed up his revenue he did not intend to resort to that expedient. It is one which has been recommended by business men in the past—I am not going to say a word now with regard to it—that you should treat revenue of a company as if it were the revenue of an individual. I am not going to argue it; I only want to elicit information.

    I rather gathered that the right hon. Gentleman was leading up to that expedient, but I could see from the way in which he summed up his receipts that it was not intended at all. That is all right, but I wanted to make it quite clear. There are one or two other questions which I should prefer to put to the right hon. Gentleman to-morrow. There are one of two things which we shall have to examine carefully with regard to indirect taxes, and with regard to the effect on the cast more particularly of matches and tobacco. Then I should say at once that I shall resist the annexation of the Road Fund, because the right hon. Gentleman assumes that all the purposes for which the Road Fund was instituted have been exhausted by the very limited programme which the Government have introduced. As a matter of fact, they have restricted the purposes for which that Fund was intended deliberately for the last two or three years with a view to annexing the Fund. The work which had already been undertaken by their predecessors—the Government of which I was a member, and the Labour Government,—has been slowed down deliberately with a view to creating reserves. We now know what the object was. However, I only want to give a general indication that this is a matter which will be resisted with the whole of my power and strength. I shall postpone my general criticisms with regard to the Budget and the Statement of National Finance until to-morrow, and conclude as my right hon. Friend the Member for Colne Valley (Mr. Snowden) did by another word of appreciation of the very fine speech delivered by the Chancellor of the Exchequer.

    In the very brilliant speech to which we have listened this afternoon, the Chancellor of the Exchequer found it necessary to explain that the country was confronted with an almost unparalleled deficit, and he proceeded to lay the entire blame for that deficit upon the coal lock-out of last year. As this statement has been made, and as this challenge has been thrown down, I think it well, even at this early stage of the Debate, to take it up and carry this inquiry one stage further. If that inquiry be carried one stage further, and if we inquire what was the origin of the coal lock-out, we can prove, I believe conclusively, that the origin of that struggle was due to the financial policy of the right hon. Gentleman, and to that alone. In the year 1924, under a Labour Government, the mines were paying the then wage agreement and substantial profits to the owners in addition, despite all the defects of the existing system. In the year 1926, however, the mines were showing a very heavy loss, and the owners in many cases were revealing their books to show that loss, and the men were being confronted with a demand for wage reduction. What had happened in the interval? In the interval there had been no appreciable change in the world market for coal. There certainly had been no strike or is disturbance of any kind in the coalfield. There was no dispute of any kind until the men were confronted with a heavy wage reduction, owing to the ruin of the mining trade, and the only explanation ever given—the only explanation possible—for that extraordinary change, is the policy of the right hon. Gentleman.

    In the interval, with the aid of credits—which he held in reserve, but did not use—in America, the right hon. Gentleman had restored the gold standard, for which performance he so warmly congratulated himself this afternoon. In the process our exchange was raised by artificial means to the extent of 10 per cent., and that, according to the estimate of competent authorities, meant a loss of some 1s. 9d. a ton on every ton of coal which we sold abroad. That was the estimate of Mr. Keynes, whose predictions in these matters were so uniformly correct. Even the Secretary of the Mine Owners' Association himself admitted a loss of 1s. a ton due to this cause. The argument is very simple. The rise in the exchange meant that we had to accept less per ton of coal, in terms of sterling, than we did before. We had either to accept a lesser sum for the coal we sold abroad in our own currency, or raise our price in terms of foreign currency, and that meant we could no longer compete. Consequently, to compete abroad, the coalowners found it necessary to reduce the cost of production in terms of our own currency, and, being coalowners, their only suggestion for doing that was to reduce the wages of the men.

    At the time—I think it was in the first quarter of 1925—when the right hon. Gentleman was beginning his operation the average profit per ton of coal sold abroad was about 6d. By the loss of 1s. 9d. incurred through the policy of the right hon. Gentleman, that profit was turned to an average loss of 1s. 3d. per ton, and that policy, and that policy alone—which has never been defended in this House by the right hon. Gentleman—confronted us with the coal crisis, faced us with the ruin of the mining trade, and precipitated the industrial struggle, the dire effects of which the right hon. Gentleman has had to consider this afternoon. We are this afternoon paying the bill for the financial policy which the right hon. Gentleman initiated some two years ago. Yet he claims credit for the wonders and glories of the return to the gold standard. Why was that policy pursued? It seemed madness on the part of the Government to ruin, not only the coal trade, but every great export trade in the country and particularly such businesses as iron and steel. But the reason is not far to seek. Every producer by hand or brain was penalised, not only the workers, but also the productive capitalists, in order to benefit one economically useless section of the community, commonly known as the rentier class. They, and they alone, had their purchasing power increased through the policy which ruined the mines and confronts us with this deficit to-day.

    The rentier class, it was estimated by Mr. Keynes, benefited to the extent of some £1,000,000,000, and I may say, incidentally, the burden of our National Debt, of which we have heard so much this afternoon, was raised by some £750,000,000 as a result of the same policy; and that rise in our exchange, that forcing-down of our internal price level and raising of the burden of our National Debt by some £750,000,000, at one stroke of the Chancellor's pen wiped out almost exactly the laborious efforts we made to redeem debt since the War. It is clear that this rentier class and this class alone, did not have its monetary emoluments reduced as a result of the Chancellor's policy. The profits of industry were reduced, the wages and salaries of workers were reduced, but the man who owned War Bonds had not his interest reduced. The man who owned house property continued to receive the same rent. Every fixed interest-bearing security gave exactly the same yield as it did before. And yet these people, being paid the same amount of money as they were before, as a charge on the productive community, commanded far more in goods and in services as a result of the policy of the right hon. Gentleman, because, when the internal price level was forced down, as a result of the right hon. Gentleman's policy of deflation, these people, receiving the same number of pounds as they did before, benefited when the right hon. Gentleman had made those pounds buy more. The rentier, and the rentier alone, benefited from that policy and he benefited at the expense of the wage-earner and the producer.

    It is sometimes said from the benches opposite, "It is quite true that under a policy of deflation of this character wages are forced down, but shortly afterwards prices fall, so if only the workers are sensible and accept wage reductions, prices will soon follow, and then they will be in just the same situation as they were in before, with just as much read purchasing power, but the competitive position of industry as a whole will have been improved and the prosperity of the country will be assisted." That argument is fundamentally fallacious, and it is one of the most dangerous fallacies with which the working class is deluded. It would be true if the rentier class had their returns reduced to the same extent as the wage earner. It would be true if, in proportion to the reduction in wages, the interest on the War Debt and the other fixed interest-bearing securities were reduced; but it cannot be true when the yield of such securities is not reduced. I will take, if I may, a very simple illustration which I think should make this point quite clear to anyone with an elementary knowledge of the quantitative theory of money which is now almost universally accepted.

    Supposing we envisage an economic community with a total currency of £100 and the number of 100 articles, let us say available for purchase. On the quantitative theory, velocity and other factors into which I need not enter, being equal, the price of those articles to the community would be £1 each. Supposing that currency to be in the hands of two classes (a) the rentier class holding £50 and (b) the producer holding another £50. Supposing by a process of deflation we halve the amount in the hands of class (b), while leaving intact the amount in the hands of class (a), the total currency is £75 and the price of the 100 commodities becomes 15s. each. Your rentier class, holding the same amount of money as before, benefits considerably because prices have cheapened, but the producer class has lost considerably. To make his wages buy the same that his previous higher wages bought, the price of commodities would have had to fall beyond 15s.; it would have had to fall to 10s. Prices would have had to be halved as well as wages, but the prices cannot be halved, because the emolument of the rentier remains precisely the same as it was before, and his actual purchasing power has been increased. The nominal purchasing power does not suffer an all-round reduction, and as a result the real purchasing power at the end of the transaction has suffered a fundamental alteration in its relations. Any policy of deflation such as that carried out by the right hon. Gentleman means an enormous transfer of purchasing power from the producer to the idle and the useless portions of the community.

    Economically idle and useless. Surely, the hon. Gentleman sees no precise economic function for those who merely draw a rent or interest. My argument, which was developed before he came in, was this, that the useful man, whether by hand or brain, I will throw in the productive capitalist to please the hon. Gentleman, is penalised in order to benefit the one person, the one type, the one class which contributes no useful function of any kind.

    Does the hon. Gentleman really suggest that the rentier contributes no useful function?

    Then I can only say that the hon. Gentleman is absolutely alone in his opinion.

    I am afraid that outside the salubrious confines of Oxford there is an ever-growing body of opinion which supports this mistaken view, and which, I believe, at the next General Election, may take a rather drastic and unpleasant action in its support. The policy which I have just described has not been confined to the period in office of the right hon. Gentleman. That policy was initiated after the War by the present Foreign Secretary, and as a result of it the burden of our National Debt has been exactly doubled, and the holding of this idle rentier class has also been exactly doubled. When the right hon. Gentleman began his operations the pound was worth some 6s. in pre-War values. It is now worth some 12s. The real burden of our National Debt has been doubled by this policy. Then what a farce it is for the right hon. Gentleman the present Chancellor of the Exchequer to get up at that Box and to posture and make heroic gestures about maintaining the Sinking Fund at some £50,000,000 a year, when he and his party, in order to benefit one class, have doubled the burden of the National Debt by an esoteric banking policy, hidden and concealed from the view of the masses of this country. Now they obey the canons of sound finance by handing back each year £50,000,000 to these people who lent this money when money was worth exactly half what it is now. That is the great achievement of the right hon. Gentleman and his friends for which he claims so very much credit this afternoon.

    I hold, and I believe it can be supported by facts, that this policy of deflation, this final return to the gold standard in particular, precipitated the greatest industrial crisis which this country has ever known and confronted us directly with the situation that the Chancellor of the Exchequer has had to describe this afternoon. If this argument be correct, and if these facts can be supported, is it not, if we may indulge for a moment in retrospection, an impudence to tell the miners that they should study and regard economic facts? The mining crisis was not some ineluctable cataclysm of nature. It was the direct and deliberate result of the policy pursued by the Government of the day. One class benefited to the tune of £1,000,000,000 from that policy. The miners, when they were confronted with a demand for wage reductions, asked for a further subsidy of £20,000,000 to enable them to tide over the crisis while the mines were reorganised. That £20,000,000 would have been paid by the rich tax-payers of this country. All that the miners asked was that those who benefited to the tune of £1,000,000,000 should hand back a tiny part of that colossal booty in order to ease the shock of that policy to the first victims whom it affected. Even that modest demand the Government refused, and they preferred to plunge us into a struggle which meant a loss of hundreds of millions to this land and has left behind a legacy of bitterness and of hatred in this land, I am sorry to say, more incalculable and more terrible in its consequences than any immediate monetary loss.

    I hold that policy, and that policy alone, to be responsible for the budgetary situation which confronts the House this afternoon, and if I may, in a few words, I would like to examine the alternatives which rest upon the Chancellor of the Exchequer in the light of this difficulty which he has brought upon himself. The first alternative presenting itself to the right hon. Gentleman was to increase direct taxation. He would not do that. The groan which went up from the benches opposite when he even mentioned the Income Tax gave good evidence that no Tory Chancellor of the Exchequer can do the sound thing and the proper thing and, in a situation like this, impose a good, sharp and salutary dose of direct taxation. He might have raided the Sinking Fund. I would much rather that he imposed direct taxation than raided the Sinking Fund, but I would rather that he even raided the Sinking Fund than imposed indirect taxation, which in one way and another will come out of the pockets of the poor. What do these three courses mean in economic facts? Direct taxation means taking money from the rich classes of this country. It means taking from them what they are paying on luxury expenditure; if left to fructify in their pockets, very little of that money would be reinvested. If it is taken in direct taxation, and applied to the Sinking Fund, it means that we are taking money from luxury expenditure and applying it to purposes where it will find re-investment in productive industry. But at the moment is a great deal of re-investment in productive industry actually required? That re-investment means the production of more machinery, and at the present time, as is well known, the machinery which we now possess is not fully employed. It is not fully employed, because it cannot find a market far the goods which it produces, and it cannot find a market for the goods which it produces for the reason that the bulk of the population of this country are too poor to buy.

    At such a juncture as that the Chancellor of the Exchequer claims credit for keeping up the Sinking Fund, which means the provision of more machinery; he refuses to impose direct taxation, which means the curtailment of luxury expenditure; and he looks principally for his new revenue to indirect taxation, which will fall on the poor and will in one way and another curtail the purchasing power of the working classes of this country. That seems to me the very last method which the right hon. Gentleman in such circumstances should have adopted. I would like to see him reserve the Sinking Fund at about its present level, but I would like to see him escape from his present difficulties by the application of direct taxation, and also provide further and greater direct relief to the working classes of this country by the taxation of the rich for the amelioration of the conditions of the poor. I am well aware that the mere redistribution of the national income by taxation is not a solution of all our difficulties. It means that, instead of money being spent on luxuries by the rich, it is spent on necessities by the poor, and that consequently people are employed in making necessities and employment is given in the great staple trades of this country, instead of people being employed in the fitful, changing and useless production of luxuries. But unless you can increase the total demand for the production of goods, you have not solved the unemployment problem, and it is one of the most foolish fallacies of our opponents to believe that the Socialist case begins and ends with mere redistribution. Redistribution is merely an elementary measure of social justice, pending the day when by wise measures we can increase the total production and distribute it for social uses.

    With that point in view, I would ask the Government to consider a most remarkable speech made by a gentleman who is not usually considered an adherent of the Socialist faith—Mr. McKenna. Mr. McKenna pointed out a few weeks ago that in the obsolete banking practice of this country we find every normal expansion of industry checked, strangled at its birth, by the rule of thumb methods which the Bank of England, and consequently the other great banks, are now compelled to employ. I know that this Measure would be more appropriately discussed when the amalgamation of the Note issues comes up before this House, and I hope that it will then be very thoroughly explored. But really, at a moment when the right hon. Gentleman is looking in all directions for an escape from his difficulties, it seems to me time that weighty financial authority, emerging as it has done on this occasion on the side of progressive thought, should receive some consideration, and that the right hon. Gentleman should begin to realise that the real escape of the nation from its difficulties is the provision of a market at home which will absorb the product of present industry, and, in absorbing that product, will give prosperity to industry, which in its turn will benefit the revenue and afford him a sound and a proper escape from his present difficulties.

    I have but very little hope in commending a policy such as this to the attention of the benches opposite. The Chancellor of the Exchequer, if left to his own devices, might possibly consider it, but the dead weight of prejudice on the benches behind him will infallibly prevent that. Those benches have in the past two years demanded a narrow class policy, which has ruined the export trade of this country and has brought industry to the verge of disaster, and I have no hope that in the comparatively brief time that lies in front of him any wiser or saner measures will be adopted from that side for dealing with the difficulties which now confront the nation. Therefore, to other hands, in my view, must before very long be consigned the task of reversing the class legislation of the past few years and of undertaking a long overdue and fundamental revision of our financial system in accordance with the dictates of modern thought and the elementary postulates of social justice.

    7.0. p.m.

    I have listened with all possible attention to the Debates on the Estimates for the spending Departments, and to-day for the third time I have heard the Chancellor of the Exchequer make his speech in introducing the Budget. In the circumstances, I think he is to be very greatly complimented on the magnificent way in which he has got us out of the trouble which unfortunately confronted this country. Figures prove anything; they can do anything. The question, to my mind, is whether the method is one of sound, commercial finance. I ask the indulgence of the Committee while I speak on the all-important, but sadly neglected, subject of economy, adding certain criticisms, not of men, but of methods. Every Government since the War ended, whether Coalition, Labour or Conservative, has led us and the country to expect a great deal, not only in the way of peace and reform, but emphatically of retrenchment. Each party has in turn made extravagant promises, and each in turn has failed signally to redeem its promises. The results achieved have been most meagre. Ministers responsible for individual Departments, and Chancellors responsible for the whole, have not only let themselves down, but they have let down Members who, full of the hope which triumphs over experience, have sought election on the ground of economies, not only possible, but to be achieved. Promises have not matured, and, what is the most serious thing of all, there has been an almost complete failure to assist our great national industries to get back to their one-time prosperity. This is largely due to the overwhelming burden of taxation under which these industries are staggering in times which, quite apart from this, are more than usually difficult.

    During the latter years of the War, I held two administrative positions successively as Controller of Aircraft Supplies and as Director-General of Supply and Purchases, both directly concerned with supply, which gave me a unique opportunity of observing and studying at first hand the Government's system and procedure in the spending Departments. It may, therefore, be taken that I am going to speak with some little knowledge, and I have to say that I was appalled at the way in which commercial problems were attacked. The methods I found to be antiquated in conception, cumbersome in working, and almost making a virtue of redundancies and overlappings. Coming to the work from the world of active commerce, I felt so strongly that I expressed my views in the frankest way in an article I wrote on Demobilisation and Reconstruction on the 31st October, 1918, a copy of which I sent to the present Chancellor of the Exchequer when he was my chief as Minister of Munitions. I also expressed my fears and warnings as to the future if a more efficient system of administration were not introduced. I have patiently and silently watched the course of events since that date. The things I feared have come to pass, and the continued call for more and more taxation has justified my worst misgivings. May I quote to the Committee one or two sentences from the article referred to?
    "The success or failure of the Empire as a world producer amongst energetic competitors win therefore depend upon two essential factors:
  • (1) The speed at which Liquidation and Reconstruction takes place.
  • (2) The balance which is held between capital and labour to ensure comfortable and fair economic conditions to the latter during the transition period; it will repay the Empire to make sacrifices towards this end free from any cheese-paring policy.
  • Drastic reorganisation and simplification of Ministry procedure and methods will require to be introduced if these vast, intricate and delicate problems are to be solved with despatch and efficiency.
    Nothing could be further removed from the principles of sound commercial practice than the ill-conceived, top-heavy and watertight compartment system existing to-day for dealing with questions of Supply and "Production."
    That was in October, 1918. We have heard in this House much criticism of responsible Ministers and Chancellors. We have heard innumerable suggestions for reducing expenditure. The most popular theory recently has been the introduction of a rationing policy. As far as I have observed, no suggestion has really gone to the root of the matter. Merely scratching the surface is a waste both of energy and time. Good cultivation requires deep digging, and before you can diagnose the situation with a view to a cure you must get down to the source of the vast expenditure and extravagance from which this country is suffering to-day. It is the system which produces the result which is fundamentally at fault. To curtail expenditure by rationing is only to prolong the life of an inefficient system and lead it to still greater inefficiency. If any evidence were required against Government control or Nationalisation, a survey of methods and procedure as they exist today in Government Departments would provide it in abundance.

    Let us consider for a few minutes the working of the Government spending Departments. These departments are not worse than others, where the procedure in vogue is generations behind the times. Take the Navy, the Army or the Air Force. In each you have a Supply Department responsible for receiving the requisitions, issuing the specifications and providing the requirements of stores, etc. You have a Contract Department responsible for placing the contracts requisitioned by the Supply Department. You have an Accounts Department responsible for the bookkeeping and payment of accounts, and you have an Inspection Department responsible for accepting or rejecting the materials offered. Every one of these Departments is a little world of its own, self-contained, absolutely watertight, the offices of which dare not encroach, be it ever so little, on the preserves of the other three. A high sense of duty grafted on to human nature invariably leads one Department to look out for points open to criticism in the others, the nature of the system rendering impossible that pulling together which should be the chief characteristic of a commercial team. Nothing is more surprising and maddening for the newcomer than the way in which correspondence is carried on. This is invariably done by the passing to and fro of minutes, not only between Departments or sections of the same Department, but even between persons working in neighbouring rooms. Not hours, but days and weeks, are wasted owing to the interminable procession backwards and forwards through the establishment clearing-house. The instinct of self-preservation leads to the most elaborate system of protective mimicry, resulting in a riot of paper-work. Unrelenting system triumphs over efficiency, despatch and economy. Would any Member of this House engaged in industry believe that not until well on in the War was the system of bookkeeping altered from single to double-entry, and I understand even to-day the system could not do considered efficient. Cumbersome, if not obsolete, methods may be observed in other quarters. Let us suppose, as is the case, that the Army, Navy and Air Force all require supplies of one particular chemical. Without consultation, each Department will send out its own requisitions to its own specification, and subject to its own departmental inspection. Three requisitions, three specifications, three inspections for one material, and the supply which may be accepted by one Department may find itself rejected by the other two.

    Speaking on the Navy Estimates in March, 1924, the Leader of the Opposition said that one of the finest services that could be done in this country was the co-ordination of its Defence Forces. My view is that one of the best services that could be done would be the reorganisation and co-ordination of the purchasing and supply Departments. Is it any wonder, then, that these and similar methods, slaves of system, create a position in which our burden of taxation is £15 per head against £6 in the United States and £5 in Germany? We are not even sure that the moneys voted for particular ends achieve their purpose. Notwithstanding the general curtailment of production and supply during the recent coal strike, the spending Departments do not seem to have any surplus on last year's credits. Why? I do not wonder so much over no surplus, as I wonder how on earth they managed to spend the credits. It is useless to trounce Ministers, who, as individuals, to whatever party they belong, are, I believe, entirely sincere in their efforts to achieve reductions. If they are powerless, it is due to want of commercial experience, to shortness of tenure of office, also to insufficiency of time, consistent with the discharge of Parliamentary duties, to do more than generally supervise their Departments and give opinions on major questions of policy. We have of late, as a result of taxation, extravagance and inefficiency, seen many samples of shipwreck amongst some of the large industrial concerns in this country.

    I, myself, before joining this House, had the responsibility and experience of salving one of these industrial wrecks, the British Dyestuffs Corporation. If something has been saved from the wreck, it has been due to drastic reorganisation and the introduction in the highest places of a new and efficient personnel concentrating on the job every working day and hour. A similar policy will require to be adopted in Government Departments before tangible results can be achieved. The running of a Government spending Department, in my opinion, is not different in kind or in essential from the running of a very large commercial concern. A system which would bring ruin owing to its extravagance, to an industrial concern with a limited capital reserve, should not, and must not, be tolerated in Government Departments merely because the last financial resources of the taxpayer can be called upon. Economy is not even practised in this House, and many who shout the loudest are the worst offenders. Take, for example, the large number of daily Questions amounting to over 100. The bulk of these are obstructive and destructive and asked, perhaps, to show constituents that Members are doing something for the £400 which they receive, and yet they are costing the Government, if the taxpayers knew it, another £400 to provide the answers. I had in the two Departments, to which I referred, sheafs of these questions to answer daily, and it took large numbers of my staff from their regular work to sift out the information, 90 per cent. of which cut noice whatever in the constructive development or running of a Government.

    I have spoken freely in criticism, but it would be useless to stop there. I propose to put before the House proposals of a constructive nature, and I shall do so very briefly. Follow the example of the largest and most efficient and prosperous commercial concerns for method, procedure, and routine. Place the administration and full control of Government spending Departments in the hands of a governing directorate of two, or not more than three, all-time men of undoubted ability, from past training and experience, one of whom should be an accountant of outstanding commercial merit. Pay salaries to these all-time men sufficient to attract the best. Similar directorates with full powers to reorganise and place on an efficient basis should be placed in charge of each spending Department, but if the whole or a number of these Departments could be co-ordinated under one Ministry of Supply, reorganisation and system would be common to all, and the savings correspondingly increased. If there be any individuals who feel contempt for these proposals, I can only say that the contempt is not of the kind bred by familiarity with commercial undertakings of magnitude. Under such reconstruction waste would be eliminated, personnel reduced to economic levels, jealousy and friction from water-tight compartments existing in the same organisation would disappear, procedure would be smooth, business would be transacted quickly, and millions would be saved annually to the country.

    The occasion of the introduction of a Budget is not one for going into detail, and the remarks I propose to make will be brief and deal only with the larger issues. May I congratulate the hon. Member, who has just sat down, on having made a speech of great interest and produced proposals which are really substantially constructive. The Chancellor of the Exchequer made one of the most brilliant speeches in a difficult situation which has been delivered in this House for many years. He frankly stated that this Budget cannot be repeated. It is a Budget of expedients, and the larger sums are obtained from sources which will not occur again. The expedient of raising upwards of £14,000,000 by adjustment of Schedule A of the Income Tax means, of course, that the Income Tax payers will in this financial year, by one means or another, be called upon to pay 1½ years' tax. The Chancellor of the Exchequer has in the same way anticipated the collection of the duty on beer, and, although many Members think it is no burden to the brewing industry in this country it is in fact, a very substantial burden, which Will be felt everywhere, and which will be felt very hardly by those brewers who are in a less prosperous position. The other expedients for collecting and extracting revenues are those upon which the Chancellor of the Exchequer principally depends. There is the £12,000,000 from the Road Fund reserve which clearly will not occur again. All the revenue, which he is raising in this present year to meet the deficiency for which he has to budget, consists to the extent of some £22,800,000 of resources of that character. The revenue which he is raising from other sources amounts only to about £5,800,000 and of that a large part, £1,250,000, is an adjustment of the duty on wines and £3,100,000 is a tax upon tobacco. The other duties are the Safeguarding Duty on pottery, a very small matter, and the McKenna Duty on tyres, which will not raise any very large amount of revenue. The tax upon matches is the only indirect tax which appears to reach, in any appreciable form, the pockets of the poorer section of the nation.

    This Budget is a Budget of expedients, an extraordinarily ingenious Budget, and on that ground the Chancellor of the Exchequer deserves the highest possible congratulation, but as a permanent contribution to finance, to the reform of financial methods in this country, and to putting our finance on a better and sounder basis this Budget takes us nowhere at all. It is not an industrial Budget; it is a bankers' and a financiers' Budget. That is clearly the view on which it has been founded. This Budget does little to encourage production in this country, to foster industry and trade, and so to cultivate those sources of income from which the expansion of the national revenue must ultimately be raised. After all, we are still a great industrial country. We see our greatest industries wavering and declining. They have not yet recovered from the serious blow of the industrial troubles of last year. There is nothing in the proposals made before the House which will tend to help them again to reach a stage of prosperity and full employment.

    We had one little solace in a direction to which a great deal of attention has been rightly directed at the present time. The Chancellor announced that the Government had decided to take some steps towards economy and that they are throwing to the economists and sacrificing at the altar of economy three of the minor Ministries. This is not enough. The winding-up of the Ministry of Mines, the Ministry of Transport, and the Department of Overseas Trade will conduce little to direct economy in the present year. It is a step in the right direction. The multiplication of Departments and of officials undoubtedly leads to expenditure. Of course, the larger the staff, the larger the expenditure. That is a very sound and well-established axiom in industry. Far more is needed. The nation outside this House is determined that Parliament and the Government shall cut down this form of expenditure. Steps of a far more drastic nature than any that have been indicated in this House will have to be taken, or not only will disaster overtake the Government and this Parliament but it will overtake the nation at large. We cannot continue this colossal expenditure of over £800,000,000 indefinitely. Economy in the direction of expenditure must be brought about. I content myself with saying that this Budget, admirable as it is as a temporary expedient and device for getting over a difficult year, is no contribution to the permanent financial stability of this country. It is a financiers' and not an industrial Budget. Steps of drastic and courageous and rigid economy will have to be taken before our finances can be put on a sound and permanent basis.

    I would like to pay my humble congratulations to the Chancellor of the Exchequer on his very able speech. I quite agree with my right hon. Friend the Member for Burton (Colonel Gretton) that this is not a moment for a financial survey. I shall have very little to say or to quarrel about on the revenue side of the account. If money has to be raised, the Chancellor of the Exchequer has raised it in by far the best way that can be suggested. At the same time the fact that that revenue has to be raised and that extra taxation has to be put upon the country at the present time—although it is not entirely the fault of the Chancellor of the Exchequer, because hon. Members opposite have to take a large share of the blame for that fact—seems to me to show clearly that the Chancellor of the Exchequer should have made a greater effort to make those economies, which so many Members of this House look forward to, than he has been able to show us to-day. At the same time, we ought to congratulate him upon announcing that three of the minor Ministries are to be done away with. That is a request that has been made by hon. Members of this House year after year since the War ended, and the fact that at last it has been given to us, I hope will not mean that just the Minister in charge of the Ministry will leave his post and the officials will be added to an already greater Ministry, but I hope it will mean that we shall see some diminution of the expenditure on some of the larger Departments. The point that will principally be taken up in criticisms of the Budget is the fact that, although we have had announced to us these economies in advance, at the same time, when we take a very quick glance at the figures for the estimated expenditure, we find that the estimated expenditure for the coming year is £2,000,000 more than the estimated expenditure for the past year. Therefore, excluding the strike, which was not accounted for in the original Budget of last year, we are expecting to expend £2,000,000 more in the coming year on ordinary normal expenditure of the country. If that is so, instead of economising to the extent of reducing expenditure gradually as the years pass, we are adding every year. We are adding £2,000,000—it may be more by the end of the year. We are adding something every year to the estimated expenditure. The Chancellor of the Exchequer has told us that the money that is being raised this year in excess of the ordinary amount will be applied to the reduction of debt, and I think it is extremely wise to raise that extra amount if the right hon. Gentleman cannot look forward to any considerable economies this year, because he has put aside no sum of money for emergencies, although that is the usual course of events. I think, in the minds of most hon. Members while the right hon. Gentleman was speaking, there were several emergencies that presented themselves where we might have to spend anything up to a very considerable sum of money during the coming financial year.

    But the one sentence in the speech of the right hon. Gentleman with which I and I think a great number of hon. Members found fault, was when he was talking about the reduction of the officials in Government Departments. He said that if he were to cut these Government Departments and to expel the officials, they in their turn would be put—I presume he meant—to a great extent on the dole. They would be thrown out of work and, therefore, they in their turn would have to be found work and that would only lead to a general convulsion in the country. I thought that sentence was the weakest spot in the speech, and it was one of the weakest things that has been said on this question. If that policy were followed and if no Government Department of any kind had to be cut down because of the people who would be thrown out of work thereby, you would never get any economy at all. You will have to follow a policy that the Government Departments should be as large as they possibly could be in order to employ more people. You would ultimately follow the economic doctrine which is advanced from the opposite benches that so long as people are employed it does not matter whether they are employed by private enterprise or by the Government. Suppose that policy had been pursued in Italy. The Chancellor of the Exchequer bas told us that it would be a very different matter if he were tackling this problem from the point of view of a dictator and not as a Chancellor of the Exchequer. I suggest to him that if he studied the question in Italy before the revolution which led to a dictatorship, be would know that the number of officials that were in the Government Departments, the number of extra officials that were on the railways and in the different public services in the country, were rendering the country impossible to administer, and were clogging the whole wheels of the commerce of the nation. When those people were expelled from the Government Departments and from the Government-run industries, there was no convulsion in that country. There was no more unemployment in Italy. Those men were absorbed in the private enterprises and in the industries of Italy, and instead of there being a convulsion in that country the very opposite happened and the country was in a far better financial state than it had been for years before.

    I realise the difficulties of attempting to economise unless it is done on a big scale. The right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) said that the Chancellor of the Exchequer always did things on a large scale. I suggest to him that if he is going to attempt economies he should attempt those economies on a big scale. I hope that in the coming year he will not only abolish three Ministries, but that he will attempt to put the whole of the financial administration of the country on a proper economical footing. Then the industries of the country, instead of looking forward as they are to-day and will increasingly look forward, if we are to judge from the Chancellor of the Exchequer's speech, to at least the present level of taxation being maintained—because there was no hope in any part of his speech that we were ever likely to see a reduction in the present taxation, but that we were rather to look to the contrary as the years passed—may look forward ultimately to a time when the level of taxation will be really reduced. And if they are to hope for that trade revival which was always so very much talked about but which never seems to materialise, I think the Chancellor of the Exchequer will have to come to that Box and will have to make a speech to this House in which he is going to formulate real policies of economies whereby he is not going to cut two or three Ministries out of the Government but he is going to put forward a policy whereby he can cut £50,000,000 £60,000,000 or £70,000,000 out of the yearly expenditure of the nation.

    I have listened with interest to the speech of the Chancellor of the Exchequer, and I desire to express an opinion as to how the Budget proposals will be worked, and how the interests of the country will be affected by doing away with several of the Government Departments. I take objection to one of the proposals of the right hon. Gentleman, and that is the proposal for the abolition of the Mines Department. We in the mining world have looked forward to that Department becoming even more important than it is now. We think the mining industry is one of the chief industries of the country and that it ought to have a separate Department, and especially so just now when there is so much talk about new methods in that industry being put into operation. But if the proposals of the Chancellor of the Exchequer are carried out it will mean that the position of the mining industry will be worse than it is at present. It is bad enough now, in all conscience. Hon. Members on this side of the House will protest vigorously against the abolition of the Mines Department. I, for one, shall make a strong point of that and do what I can to urge my party to put up a fight on that point.

    With regard to economy, I find in looking through the total amount of expenditure that about 43 per cent. cannot be touched. I am speaking now of the interest on the National Debt and the Sinking Fund. I do not see how we can do anything in that respect. We are, therefore, left with about 57 per cent. only in regard to which we can try to economise. I want to suggest to the Chancellor of the Exchequer that, for the purpose of finding out if economy can be practised, a Select Committee might be set up to go through the various Departments to see how cutting down can be obtained. It is useless for him to say to the head of a Department, "How much can you do without?" because every head of a Department tries to get his Department as busy as possible, and, of course, he wants to get as much as he can. I can give the right hon. Gentleman an example of a town council. Every time they put down the rates the heads of the departments are asked, "Now, how much can you spare?" When the replies come back from the chairmen of the different committees, they all tell the same tale—"We cannot, afford to have any of the allowances cut down." The same thing applies to the Government Departments, and unless we can get a Select Committee to go into the matter of whether there can be any question of saving in that direction, I do not think that the saving that will be effected will be very much. The Chancellor of the Exchequer may cut out some of the redundant parts, but that will not make very big figures.

    We have, therefore, got to think how taxation can best be levied. I listened to the first speech of the Chancellor of Exchequer, when he came in with a flourish of trumpets, and when he was working largely on the balance left by the Labour Chancellor of the Exchequer. He did then one of the most foolish things that ever a Chancellor of the Exchequer could do. He brought down the limit of Super-tax and £10,000,000 was freed on that account. If anybody could afford to pay a tax it is the Super-tax payer. To my mind there are only two sources by which the Chancellor of the Exchequer can get the additional money he requires in the fairest possible way. One is by increasing the Death Duties and the second is by increasing the Super-tax. The £10,000,000 that he gave to those people in the first Budget of the Chancellor of the Exchequer ought now to be taken back and another £10,000,000, put on their shoulders. If the Chancellor of the Exchequer would do that, then I think that even those who sit on the opposite benches would say to the Chancellor of the Exchequer, "Well, at least we shall have to give you the credit for doing some good work while you were Chancellor of the Exchequer." But the right hon. Gentleman has not done that. He has taken £12,000,000 from the Road Fund, and he has adopted various other methods. He has put the burden largely on the shoulders of those least able to bear it. That is not the way to deal with a Budget of this kind, and I am making my protest. I say that the Chancellor of the Exchequer has been wrong in two of his methods; first, by the abolition of the Ministry of Mines and, secondly, by putting taxation on in the way he has done. We can promise him from this side that all the opposition possible will be given to him in the succeeding days in the discussion of the Budget proposals, because we believe that he has not tackled the Budget in the manner in which it should have been tackled and, therefore, it is impossible that we can support him.

    I do not propose to keep the Committee for many moments. I should, however, like to add my meed of praise to that of previous speakers to the Chancellor of the Exchequer for the very brilliant speech with which he introduced his Budget this afternoon. But, brilliant as his speech was, he was not able to provide any great deal of illumination of what, after all, proved to be rather a gloomy tale. So far as I can understand the policy lying behind this Budget, it was introduced in the belief that last year was a year of very exceptional lack of prosperity and that this year is to be a similar year, but that in the future we shall have increased prosperity. The right hon. Gentleman endeavoured to lay most of the blame for the two years of which I am speaking on the unfortunate dispute which took place in the coal trade. Although undoubtedly that dispute has had a great deal to do with it, I cannot follow the policy which seems to suggest that once we get over that dispute we are going to have good trade for the new few years. In 1920 we had a favourable trade balance of £250,000,000 and that has come down in 1924 to £34,000,000. In 1925 the balance was all square, and last year even if we had had no dispute in the coal trade it is extremely likely that we should have been doing nothing better than living on our capital. Last year we were not making both ends meet, and on the top of that there was deficit in the expectations from the Income Tax of something like £20,000,000. Last year the returns could not have been affected by the dispute in the coal trade because they were based on the average of the three previous years. Therefore I cannot follow the principle which suggests that once we get over this year we may look for the future to normal years.

    The Chancellor of the Exchequer has introduced several expedients. He has provided £12,000,000 from the Road Fund, £5,000,000 from the brewers' credits, and £14,000,000 from Schedule A. Undoubtedly this will lead to us getting over the immediate difficulties of this year, but what about next year? Can we look to next year with any expectation of having normal trade? We cannot do that unless real economies are introduced. Next year the Income Tax will be based on the actual income of last year, and as the Chancellor of the Exchequer has pointed out, the earnings will be very much less, and the revenue will be less. Our prospects of trade are not bright. In the staple industries which provide most of our employment the textile and the metal trades; although recovering from the depth of depression at which they were at the end of last year, are not showing great buoyancy, and unless we can have some measure of economy next year the Chancellor of the Exchequer will not find himself back to a normal year of trade. Therefore I would like to suggest that it is essential for the Chancellor of the Exchequer and for the Government to realise that we are a trading community, and that we are now living on our capital. We did this last year and we shall do it again this year, but we cannot continue in that condition, and unless real economies are introduced and unless we cut our coat according to our cloth we shall not be able to return to our constituencies feeling that we are carrying out those pledges of economy which are so essential to the prosperity of the country.

    I think everybody both inside and outside this House will agree that in his speech to-day the Chancellor of the Exchequer has tempered the wind to the shorn lamb. Some hon. Members have complained of the lack of economies, but my complaint is the lack of taxation. I confess that great disappointment will be occasioned to a great many people because the right hon. Gentleman has not introduced a petrol tax similar to the tax on tyres. At the present time we have an over-abundance of oil coming from foreign sources. I quite agree with the view that the consumer should be our chief interest, but on the other hand when you have a great technical industry threatened with distruction from what may simply be a momentary overabundance of oil coming from abroad then one is bound to consider whether some action should not be taken to meet that possibility. A petrol tax should have been imposed on petrol from foreign sources and not on the native product. If you bring to a standstill technical machinery engaged in the manufacture of oil you interfere with the working of the mine, the water rises, and your works are very soon destroyed.

    8.0 p.m.

    The Scottish shale area is the only oil district in the country at the present time which is being worked, but throughout England there are large stretches of shale areas which are only awaiting development for the recovery of the oil from the shale. The same remark applies to the Dominions. Therefore the Chancellor of the Exchequer is pursuing a shortsighted policy in regard to this matter so far as our national or imperial interests are concerned. The previous speaker referred to future years. I also wish to refer to future years, and I think that the Chancellor of the Exchequer would do much to stimulate employment in the shale areas of Scotland if he indicated now that not this year but possibly next year the policy he proposes to pursue this year in regard to tyres will be pursued next year in regard to petrol. It has been said that this is too much of a bankers' Budget and that it contains nothing in the way of taxation which will lead to more employment or increased production. That difficulty could have been largely removed if a petrol tax had been introduced. I only raise this point now so that the Chancellor of the Exchequer when he comes to reply may be able to give us some indication that while he is not able to do what I ask for this year that next year he will be able to introduce some such tax as I have suggested, the result of which would be to intensify the development of the shale fields, and the creation of a larger volume of employment which is so badly wanted at the present time.

    Question put, and agreed to.

    Additional Medicine Duty (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 two of the Finance Act, 1926, until the first day of August, nineteen hundred and twenty-seven, shall continue to be charged on and after that date until Parliament otherwise determines.
    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."

    Motor Tyres

    Resolved,

    "That the exemption in respect of tyres which is given by section three of the Finance Act, 1925, from the customs duty thereby charged on the accessories and component parts of motor cars, motor bicycles and motor tricycles shall cease to have effect on and after the twelfth day of April, nineteen hundred and twenty-seven.
    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."

    Cinematograph Film In Sheets Or Strips (Customs)

    Resolved,

    "That blank cinematograph film, for the purposes of the customs duty charged thereon by section three of the Finance Act, 1925, shall, on and after the twelfth day of April, nineteen hundred and twenty-seven, include all photographic sensitized sheets or strips of celluloid or other similar material which are of a, length of not less than twelve feet, whatever the width of the sheets or strips may be, and that duty shall be charged on any such sheets or strips in proportion to their width.
    And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

    Wines (Customs)

    Resolved,

    "That in lieu of the customs duties now chargeable on wines imported into Great Britain or Northern Ireland there shall, on and after the twenty-fifth day of April, nineteen hundred and twenty-seven, be charged in the case of wines not being Empire products duties at the rates specified in Part 1 of the following table, and in the case of wines being Empire products duties at the rates specified in Part II of the said table:

    Description of Wine.Rate of Duty per Gallon.
    PART 1.s.d.
    Not exceeding 25 degrees proof spirit30
    Exceeding 25 degrees and not exceeding 42 degrees80
    Every degree or fraction of a degree above 42 degrees, an additional duty08
    Sparkling, an additional duty126
    Still, in bottle, an additional duty20

    PART II.
    Not exceeding 27 degrees proof spirit20
    Exceeding 27 degrees and not exceeding 42 degrees40
    Every degree or fraction of a degree above 42 degrees, an additional duty04
    Sparkling, an additional duty63
    Still, in bottle, an additional duty10

    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."

    British Wines (Excise)

    Resolved,

    "That there shall be charged on sweets sent out on or after the twenty-fifth day of April, nineteen hundred and twenty-seven, from the premises of a maker of sweets for sale a duty of Excise at the rate of one shilling for every gallon."

    Tobacco (Customs)

    Resolved,

    "That in lieu of the Customs duties now chargeable on tobacco imported into Great

    Britain or Northern Ireland there shall on and after the twelfth day of April, nineteen hundred and twenty-seven, be charged the following duties, that is to say:—

    s.d.
    Upon tobacco unmanufactured, namely:—
    Containing 10 lbs. or more of moisture in every 100 lbs. weight thereof—
    Unstripped the pound810
    Stripped the pound810½
    Containing less than 10 lbs. of moisture in every 100 lbs. weight thereof—
    Unstripped the pound9
    Stripped the pound910
    Upon tobacco manufactured, namely:—
    Cigars the pound1610
    Cigarettes the pound137
    Cavendish or Negrohead pound1210
    Cavendish or Negrohead manufactured in bond the pound11
    Other manufactured tobacco the pound11
    Snuff containing more than 13 lbs. of moisture in every 100 lbs. weight thereof the pound107
    Snuff not containing more than 13 lbs. of moisture in every 100 lbs. weight thereof the pound1210

    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."

    Tobacco (Excise)

    Resolved,

    "That in lieu of the Excise duties now chargeable on tobacco grown in great Britian or Northern Ireland there shall on and after the twelfth day April, nineteen hundred and twenty-seven, be charged the following duties, that is to say:—

    s.d.
    Upon tobacco unmanufactured, namely:—
    Tobacco containing 10 lbs. or more of moisture in every 100 lbs. weight thereof the pound6
    Tobacco containing less than 10 lbs. of moisture in every 100 lbs. weight thereof the pound74⅜
    Upon tobacco manufactured, namely:—
    Cavendish or Negrohead, manufactured in bond the pound87⅜

    and so in proportion for any less quantity.

    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."

    Matches (Customs)

    Resolved,

    "That in lieu of the Customs duty now chargeable upon matches imported into Great Britain or Northern Ireland there shall on and after the twelfth day of April,

    nineteen hundred and twenty-seven, be charged the following duties, that is to say:—

    s.d.
    Containers in which there are not more than 10 matches—
    For every 1,000 such containers62
    Containers in which there are more than 20 matches, but not more than 50 matches—
    For every 1,000 such containers124
    Containers in which there are more than 20 matches, but not more than 50 matches—
    For every 144 such containers44
    In respect of every additional 25 matches, or part of 25 matches, over 50 in a container—
    For every 144 such containers, an additional duty of22

    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."

    Matches (Excise)

    Resolved,

    "That in lieu of the Excise duty now chargeable upon matches made in Great Britain or Northern Ireland there shall on and after the twelfth day of April, nineteen hundred and twenty-seven, be charged the following duties, that is to say:

    s.d.
    Containers in which there are not more than 10 matches—
    For every 1,000 such containers60
    Containers in which there are more than 10 matches, but not more than 20 matches—
    For every 1,000 such containers120
    Containers in which there are more than 20 matches, but not more than 50 matches—
    For every 144 such containers42
    In respect of every additional 25 matches, or part of 25 matches, over 50 in a container—
    For every 144 such containers, an additional duty of21

    and so in proportion for any less number of containers.

    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."

    Pottery

    Resolved,

    "That during a period of fire years beginning on the nineteenth day of April, nineteen hundred and twenty-seven, there shall be charged on the importation into Great Britain or Northern Ireland of articles of translucent pottery or of vitrified pottery, being either articles suitable for use in connection with the serving of food or drink or component parts of such articles, a duty of customs at the rate of one pound and eight shillings for every hundredweight thereof."

    Mechanically-Propelled Vehicles

    Resolved,

    "That—

    (1) in the case of vehicles registered under the Roads Act, 1920, in the name of a person engaged in agriculture and used solely by that person for the purpose of the conveyance of the produce of, and of articles required for the purposes of, the agricultural land which he occupies, and for no other purpose, there shall on and after the first day of January, nineteen hundred and twenty-eight, be charged in lieu of the excise duties now chargeable in respect of such vehicles under the Second Schedule to the Finance Act, 1920, as amended by the Finance Act, 1926, the following duties of excise:

    If the vehicle—
    Does not exceed 12 cwt. in£
    weight unladen10
    Exceeds 12 cwt. but does not exceed 1 ton in weight unladen16
    Exceeds 1 ton but does not exceed 2 tons in weight unladen21
    Exceeds 2 tons in weight unladen25;

    (2) the said Second Schedule as amended shall have effect as if—

  • (a) for the words 'used for haulage solely in connection with agriculture' in sub-paragraph (2) of paragraph (4) there were substituted the words 'being vehicles registered under the Roads Act, 1920, in the name of a person engaged in agriculture, and used solely by that person for the haulage of the produce of, or of articles required for the purposes of, the agricultural land which he occupies, and for no other purpose'; and
  • (b) sub-paragraph (3) of paragraph (4) were omitted therefrom; and
  • (c) in sub-paragraph (4) of paragraph (4) for the words 'used at any time otherwise than in connection with agriculture' there were substituted the words 'other than any such vehicles in respect of which duty is chargeable under sub-paragraph (1) or sub-paragraph (2) of this paragraph.'
  • (3) References in any other enactment to the full amount of the duties chargeable in respect of mechanically-propelled vehicles shall be construed as references to the duties chargeable under this Resolution."

    Income Tax

    Charge Of Tax

    Resolved,

    "That—
  • (a) income tax shall be charged for the year beginning the sixth day of April, nineteen hundred and twenty- seven, at the rate of four shillings in the pound, and the same super-tax shall be charged for that year as was charged for the year beginning the sixth day of April, nineteen hundred and twenty-six; and
  • (b) all such enactments as had effect with respect to the income tax and super-tax charged for the year beginning the sixth day of April, nineteen hundred and twenty-six, shall have effect with respect to the tax charged for the year beginning the sixth day of April, nineteen hundred and twenty-seven. subject to the provisions of Part IV. of the Finance Act, 1926; and
  • (c) the annual value of any property which has been adopted for the purpose of income tax under Schedules A and B for the year beginning the sixth day of April, nineteen hundred and twenty-six, shall be taken as the annual value of that property for the same purpose for the year beginning the sixth day of April, nineteen hundred and twenty-seven:
  • Provided that the foregoing provision relating to annual value shall not apply to lands, tenements and hereditaments in the Administrative County of London with respect to which the valuation list under the Valuation (Metropolis) Act, 1869, is by that Act made conclusive for the purposes of income tax.

    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."

    Payment Of Income Tax By Instalments

    Resolved,

    "That subsection (2) of section one hundred and fifty-seven of the income Tax Act, 1918, shall cease to have effect so far as it provides for the payment in two instalments of income tax charged under Schedule A."

    Income Under Certain Dispositions To Be Treated For Purposes Of Income Tax As Income Of Disponor

    Resolved,

    "That any income which by virtue or in consequence of any disposition made, directly or indirectly, by any person after the eleventh day of April, nineteen hundred and twenty-seven (other than a disposition made for valuable and sufficient consideration) is payable to or applicable for the benefit of any other person, but exclusive of any income which—
  • (i) is payable to an individual for his own use for some period which exceeds six years or is applicable for the benefit of a named individual for such a period; or
  • (ii) arises from capital of which the disponor has by the disposition absolutely divested himself in favour or for the benefit of that other person; shall for the purposes of the enactments relating to income tax (including super-tax) be deemed to be the income of the disponor and not to be for those purposes the income of any other person, and where by virtue of this provision any additional income tax or super-tax becomes chargeable on and is paid by the disponor, he shall be entitled to recover the amount of the tax so paid from any trustee or other person to whom the income is payable by virtue or in consequence of the disposition.
  • 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 On Certain Copyright

    Royalties To Be Payable By Deduction

    Resolved,

    "That where any royalty or other sum is paid on or after the first day of July, nineteen hundred and twenty-seven, in respect of a copyright (not including a copyright in any dramatic work being a cinematograph production, or in any artistic work being a photograph intended to be used for the purpose of the exhibition of pictures or other optical effects by means of a cinematograph or other similar apparatus), or where any payment on account of any such royalty or other sum is made at any time between the eleventh day of April, nineteen hundred and twenty-seven, and the said first day of July in respect of any matter arising on or after the said first day of July, and the owner of the copyright is a person whose usual place of abode is not within Great Britain or Northern Ireland, Rule 21 of the General Rules shall apply to the payment of or on account of the royalty or other sum as it applies to an annual payment not payable out of profits or gains brought into charge, and the person by or through whom the payment is made shall accordingly deduct and account for a sum representing the amount of the tax.
    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 As To Relief From Income

    Tax In Respect Of Losses

    Resolved,

    "That in the case of any person who under the provisions of subsection (3) of section twenty-nine of the Finance Act, 1926, has elected to be charged to tax for the years 1927–28 and 1928–29 on the amount on which he would have been charged if that section had not passed, the provisions of section thirty-three of the said Act shall not apply to any loss sustained in any year earlier than the year 1928–29 or earlier than the year which under the provisions of section thirty-four of the said Act would be taken to be the year preceding the year 1929–30.
    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 Collecton of Taxes Act, 1913."

    Basis Of Assessment Of Income Tax In Certain Cases

    Resolved,

    "That where a trade, profession or vocation has been set up and commenced, or income first became chargeable under Case V of Schedule D, within the period of two years immediately preceding the year next before the year of assessment, Income Tax under Schedule D shall be computed on the full amount of the profits or gains or income of the year preceding the year of assessment.
    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."

    Estate Duty

    Resolved,

    "That the relief in respect of Estate Duty given in certain cases in connection with settled property by section sixteen of the Finance Act, 1907, shall cease."

    Transfer Of Sum From Road Fund To Exchequer

    Resolved,

    "That there shall be transferred to the Exchequer from the Road Fund a sum equal to the cash balance and investments which were on the thirty-first day of March, nineteen hundred and twenty-seven, standing to the credit of that Fund."—[Mr. Churchill.]

    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. R. McNeill.]

    Resolutions to be reported To-morrow;

    Committee report Progress; to sit again To-morrow.

    Pacific Cable Bill

    Considered in Committee [ Progress 5th April].

    [Mr. JAMES HOPE in the Chair.]

    Schedule 2

    Amendment proposed [ 5th April]; in page 7, line 28, to leave out the words

    "one thousand," and insert the words "five hundred."—[ Mr. Kirkwood.]

    Question, "That the words proposed to be left out stand part of the Schedule," put, and agreed to.

    Schedule agreed to.

    Schedule 3

    (Constitution, Officers and Proceedings of the Pacific Cable Board) and Preamble agreed to.

    Bill reported, with Amendments; as amended, considered.

    Motion made, and Question proposed, "That the Bill be now read the Third time."

    Do I understand that it is the proposal of the Government to complete the whole of the proceedings on the Pacific Cable Bill now, at this sitting?

    That certainly was our hope. I had no reason to suppose that any hon. Member objected to that course. I did not understand that there was any real opposition to this Bill. I am sure the hon. Gentleman understands that this is a matter which has been very much desired by the Imperial Governments for carrying out a very necessary work in connection with the cable; and, with the exception of a point that was taken by the hon. Member for Dumbarton (Mr. Kirkwood) on the Schedule, which I understood he did not desire to press, and which he did not in fact press, I did not understand that there was really any opposition to this Bill. Of course, if the hon. Member objects to our getting the Bill now, I shall be glad to hear what he has to say, but I hope very much, having regard to the nature and importance of the Bill, and its entire unconcern with any of our personal and party controversies, that he will not persist in refusing to let us have it.

    The point I am making is that, as far as I know from the Order Paper and from my knowledge of the arrangements about business, it was agreed that the Committee stage should go through to-night without discussion, but that there would be no suggestion of taking the Report and Third Reading all in one swoop. That seems to me to be a very big demand on the part of the Patronage Secretary. I do not want to be obstructive in any way, but I certainly hoped that we should have a further debate on the Third Reading. If, however, this is the understanding that has been come to through the usual channels, I am not disposed to carry the opposition any further.

    Question put, and agreed to.

    Bill read the Third time, and passed.

    The remaining Orders were read, and postponed.

    Scaristaveg Farm (Prosecutions)

    Motion made, and question proposed, "That this House do now adjourn."—[ Commander Eyres Monsell.]

    I rise, on the Motion for the Adjournment of the House, to raise the question of the treatment of certain land raiders. There are five crofters from Scaristaveg who have been thrown into gaol because they refused to starve. Instead of starving, they went to work the land. The only crime that they committed was to go and work the land—to cultivate the soil. This is a very serious question as far as Scotland is concerned—in fact, as far as the whole of Britain is concerned—because it appears to us that this is part and parcel of a cut-and-dried scheme of this despicable Government. Here we have five as good men as this country ever produced, in every sense of the term—good-living, Christian, well-meaning men, undaunted and true; men who are the very embodiment of what are supposed to be the characteristics of our Scottish race—hardy, intelligent and independent. And what happens to them? They are thrown into gaol—by this Government—by the policy of this Government that is trying to do away with its promise made to these men—not a general promise, but a definite promise that those men would get land after the War, that they would get their own land, their native land, the land in defence of which their fathers' blood bedewed the heather.

    I am astonished to think that, when we are dealing with such a terrible question as far as the Highlands of Scotland are concerned,. there is only one Liberal present. So much for the Liberal land campaign—a land policy in theory, but, in practice, where are they? "Ower the Border and awa'." We are sent down here from Scotland for the express purpose of defending our people. That is what we are sent here for—not to make friends with the other side; and those who make friends with the other side are the enemies of the working class, no matter who or where they are, because the Tory Government, the Tories in general, are the enemies of the working class. To think that they would play such a game on such a type of man! No wonder it makes our Scottish blood boil! This is not just begun; our Highlands of Scotland are depleted—the Highland glens and straths of my native land, that for centuries maintained a hardy intelligent population, that produced the race whom the Romans could not subdue, who have played a conspicuous part in the building up of this mighty British Empire; and here are five men who took part in the late War, but are now in the real war, the only war that matters—the working-class war against the ruling class of every country, never mind this country.

    How can this Government expect that the Chinese can have any respect for your Foreign Minister, who is the representative of this Government? When they treat our own folk at home in this fashion, how would they not treat Chinese who are 10,000 miles away from these shores? They throw our own kith and kin into gaol, not because they have stolen anything, not because they have broken the law, but because they are not like me—they have a veneration for the law. I would break the law to-morrow if it were going to suit my class. I should have no compunction about it. I have broken it before and I would do it again, but these men still have regard for your law. They had an interdict issued against them because they had taken this land. They had gone back to Lochmaddy, which meant a journey of from two to four days for these men who are landless and penniless, for years unemployed, with no Employment Exchange and no parish council. Where is the hon. and learned Member for Argyllshire (Mr. Macquisten) to-day, who stood over there only a month or two ago witting us from the West of Scotland because the people in the Highlands were independent and would not accept parish relief like our own people in the Valley of the Clyde. Where is he now to stand by the Highland men? Highland men do not want parish relief. They do not want relief front anyone. They want their native land and they are prepared to fight for it. There were no means to convey them across the wild and angry sea. That is the reason they did not appear at Court. It was not contempt of Court for them, but certainly it was contempt of landlordism. This has gone on for years—quite a century of oppression, robbery and murder of the Highlanders by the ruling class of this country. Right away back to the Jacobite rebellion in 1745 what do we find? The same part being played by the Government as is being played by the present Government. There you have the power behind the Throne in those days bringing over the Prince of Orange, introducing the House of Hanover into this country. They crushed the Jacobite rebellion and crushed Prince Charlie, and the ruling class of this country brought in the foreigner, William, Prince of Orange. What happened? The same as happened to these men, because they have not the facilities to reach Inverness, which is the capital of the Highlands. The Clan Macdonald, with the other clans, had to sign the Oath of Allegiance to the Prince of Orange or they would be massacred. The Macdonald's were delayed. They were six days late. When they got in they had to sign before the Earl of Breadalbane and Stair.

    The Lord Advocate and the Secretary for Scotland are hardly responsible for that.

    No, but I submit that I am quite within my rights in using as an illustration these facts which have taken place leading up to the present moment. These things happened in the days gone by and we are going to do whatever we possibly can, lawful or otherwise, to stop them. You can put that in your pipe and smoke it if you like. The Macdonalds were six days late in arriving. They signed nevertheless, and the Earls of Breadalbane and Stair took it in good faith. But they kept that back from the authorities, so that William, Prince of Orange, sent the Duke of Argyll's forces into Glencoe, the land of the Macdonalds, where they fraternised with them and murdered them to a man.

    I am aware of that unhappy event but is it suggested that they bear any analogy to the proceedings of the Lord Advocate?

    I am trying to show that it is only a matter of degree. This happened away back in what are called the killing times. No doubt the present Government is as ready for butchery as their forefathers were. I do not expect anything else. I have no doubt about it in my own case and I am ready for it. I do not say that the Labour party are prepared for it, but my colleagues from the Clyde and I are doing all we can to make my class understand what they are really up against. These men deny that their action has been a contempt of the authority of the Court, for whose orders they have every respect, but the circumstances in which they were placed and the fact that they had been in occupation of the farm at Scaristaveg long before the interdict was granted by the Court rendered it impossible for them to comply. That is the statement bearing out what I have already explained to the House. These men have all the honours of war. They fought for their native land. They risked their lives for the duration of the War. Practically the entire male population in this part of the country volunteered for the War. They were not like some who were in favour of the War but left others to go and stayed at home themselves. This Island of Lewis—because Harris is the Southern part of the Island of Lewis—alone lost 1,200 men. They gave their all for the ruling class of this country and this is the thanks they are getting. They were promised all manner of things. They were going to get land. When they came back their fishing smacks were battered to smithereens, and their tackle was all destroyed. That has been proved beyond a shadow of a doubt time and time again on the Floor of the House. They could not follow their usual occupation. We have appealed time and time again on their behalf. This is where the Liberal party came in and did not play the game by those men. Lord Leverhulme, when he bought the Island of Lewis and was going to make Stornoway a great centre for canning fish, made an agreement with the Liberal Government—with Lloyd George.

    The hon. Member must give the right hon. Gentleman his usual Parliamentary title.

    The Government of the right hon. Gentleman the Member for Carnarvon Boroughs.

    He was never my boss, and never will be. They made an arrangement with the Government. We have it in black and white—we dare not make statements like that unless we are able to prove them—that if these men would not press for land, if they would not hold them to their promise, Lord Leverhulme would guarantee them work for 10 years. He would not guarantee them a comfortable life. No fear. That is what the ruling class demand, but all that my class have had up to now is the right to work. That was even denied them. The covenant was broken. It was another scrap of paper, but you never heard anything about it. It was like a great many more scraps of paper that were signed by the now leader of the Liberals which he never kept and never could, for it is not in his composition. Owing to the trawlers trawling all the fish from the seas around the Outer Hebrides, and Lord Leverhulme failing in his great project, these men were left absolutely stranded. I am appealing for these men and women and their little children whom we have visited. I am not appealing for the rag-tag and bobtail. I am appealing on behalf of men for whom any intelligent Government would be delighted to do all they could because they are the best asset that this country has had in the time of need. There can be no doubt that the Island of Lewis and the Islands and Highlands of Scotland in general do produce beautiful, comely women, and do produce strong, vigorous, mental and physical giants of men. That is the type of manhood and womanhood for whom I am appealing to the Scottish Office.

    What did we find when we went up to Lewis? My comrades the hon. Member for Bridgeton (Mr. Maxton) and the hon. Member for Camlachie (Mr. Stephen) and myself had pointed out to us by the schoolmaster children who were dying before his eyes. Not in China, not in Russia, not in the Ruhr but in my native land, dying of starvation. Their father served during the Great War. They subsist on nothing but potatoes, three times a day, and not very good at that. Do you think that that is going to continue? Do you think that our voices will not reach to the uttermost parts of the earth to let the peoples of the world know what we think of the ruling class in this country, where we cannot get justice for our own people? This House is practically empty. No interest is being taken in the subject of the treatment of these men, whose only crime was going to work their native land.

    One of the men implicated, has 12 of a family, living in what is designated a black house. You would have to see it to believe that Britons in Britain still have to live under such hellish conditions. Shanghai! Shanghai is not in it. We are going to blow the whole world to smithereens as far as this Government is concerned because of Shanghai, because it is said that there are 16,000 Englishmen in peril—

    I would ask the hon. Member to connect the argument with something within the discretion of the Lord Advocate, or something that the Scottish Office can do.

    There are thousands of our own kith and kin in greater peril than any Englishmen in Shanghai. What are the housing conditions?

    Perhaps I ought to make it clear at once that the hon. Member only gave me notice at seven o'clock that he was going to raise this question. It was then too late for me to inform my right hon. Friend the Secretary of State for Scotland, who is responsible for the topic to which the hon. Member is now referring, or to enable me to get any assistance or any information from the Scottish Office on the point. All I can do is to decline to discuss to-night, because I am not in a position to do so, anything for which the Secretary of State for Scotland is responsible. I am always ready to do that when I have had an opportunity of familiarising myself with the subject. I am prepared to-night to deal with any Court procedure for which I am responsible, as far as I have the information to a very limited extent. I am sorry, because of the late hour at which I was given notice that this point was to be raised by the hon. Member, that I cannot deal with any points for which I am not responsible.

    While it is true that, as a matter of courtesy, the Lord Advocate was informed that this matter was to be raised, and I am sure my hon. Friend the Member for Dumbarton Burghs (Mr. Kirkwood) will not expect more from the Lord Advocate than to answer the point that comes within his province, I would ask if it is not quite in order for an hon. Member on the Adjournment of the House to raise any matter which he feels inclined to raise?

    Yes, but it must be some matter for which some Member of the Government is responsible or in connection with which the Government or some Member of the Government can take some action within their powers. It may be that the hon. Member is leading up to something which the Secretary of State could do within his powers, in the course of administration. So fax, he would be in order.

    On a point of Order, May I remind the Lord Advocate that within the past three or four days we raised this question in the House. The Lord Advocate was then requested to make himself familiar with the details of the case. The complaint which he made then, that he had not had sufficient notice, is not strong enough to-day. The House is entitled to expect that he has learned from the Scottish Office all that was to be known of the case and, therefore, he should be prepared to give us a reply to-night.

    Whether the Secretary of State for Scotland is here or not make no difference to the point of Order. Any hon. Member on the Adjournment is entitled to raise any subject or to put forward any grievance with which it is within the power of seine Member of the Government to deal. The absence of a Minister raises a question of Parliamentary custom and courtesy, but it is not a point of Order.

    On that point of Order. May I submit that this is primarily a legal case? These men are in prison now for an alleged breach of the law. The allegation is that they have broken the interdict which was granted by the Court, and I submit that it is primarily a legal question, and that the Lord Advocate is responsible and not the Secretary of State for Scotland.

    It makes no difference to the point of Order whether it is the Secretary of State for Scotland or the Lord Advocate. There must be a Member of the Government against whom a prima facie case is to be made; that he may have prevented this or that. It must be connected with some officer of the Government who has to administer the law.

    I understand quite well why the Lord Advocate rose. He is trying to put on an air of injured innocence; that I have not given him notice. But I am not going to let him off again. I let him get away four days ago. He cannot always play that game. I was speaking about the housing conditions of these people, and if we had present to-night those great defenders on paper of the British Empire, the generals and the admirals, they would have to bear me out when I say that there is no finer type of man in the British Army or in the British Navy than the men who come from the district of which I am speaking. Listen to the housing conditions under which they have to live! You talk about China and about Japan and about the East End of London and of Glasgow! One of these defenders of the Empire has a family of 12, and his dwelling is a rude hut, six feet high, built of dry stones and earth, the floor is of clay, there are no drains and the rain comes through the roof in wet weather. It is impossible to have any comfort in such a dwelling. This hut is divided into two compartments. I am talking about one of the defenders of the Empire. This is what he gets for fighting for his country, his kin and his King. Both these compartments are 14 feet by 10, and there is no lum—no chimney. Seven people sleep in one compartment and six in the other. These defenders of the Empire—I like the word "defenders"—were told during the War that they had to fight in order to keep the Germans out of this country. Their only enemies are not the Germans, but the ruling classes of this country. The Germans are coining here now; the rich and the aristocratic Germans. They are being welcomed here while my fellow countrymen, who fought and bled and died to defend their country, are treated in this fashion. They are living in hovels.

    It was the intention of these defenders of the Empire to build houses for themselves and their families, but everything has been done by the Government to frustrate this intention.

    9.0 p.m.

    These are statements that have been sworn to by five good men and true, who believe that they had a country to fight for, who believed that they had a King who would stand by them in their hour of peril. Where are they all now? Oh! where, tell me where? They are lying to-night in prison. Only a few of the hardy and intelligent race are left. Others have been driven from house and home by the servants of the Crown, by the bringing out of beagles. Do you know what beagles are, Mr. Deputy-Speaker? They are hounds, certainly hounds of hell. The ruling, classes of this country are hounds of hell to treat my fellow-countrymen in that fashion. I have had experience. I know what it is for them to have you by the neck chained to your cell. That is what is going on. Five men and their families, who have no greater desire than to spend their lives amid nature's wildest grandeur, are suffering. There are no better defenders of their country than they are. Had they been like me and some of my colleagues, I could have forgiven the present Government. We have done everything we could to upset the present social system, and we shall continue to do so. But these men are not as we. They do not see, they do not understand, they do not believe that the ruling classes of this country will suck the blood of the workers. We do; we do believe that they live on the flesh and blood of the working class, not only of our own country but of every other country that they can get into subjection. There these men are lying in gaol. When I raised the question the last time the Lord Advocate said he had not had time to ascertain the facts, and I let him go. He had not got the goods to deliver. I took him for an houourable man, and I believe he is an honourable man. But he should have the goods now. He should be able to bless my efforts, to-night. I did not want to hold him like Jacob of old at the brook Jabbok and to say, "I will not let you go." Now I say, "I will not let him go if he should break my thighbone," until he has finished and called me Israel, a prince amongst men.

    I am afraid it would be outside the right hon. Gentleman's authority to make any such assault.

    Yes, but you hear one Scotsman speaking to another who understands a certain Book which is foreign to the average Englishman. The Lord Advocate's complaint against me about a week ago was that he had not had time to go into the matter. I appealed to him then on behalf of the women and children of these men, because they will not get parish relief and there is nothing coming in. He knows as well as I do that this is a poverty stricken island, and that in cases such as these it is only the poor who help the poor. I appeal to him from a humanitarian point of view—never mind as one Scotsman to another—on behalf of these helpless women and children. The ruling classes of this country promised these men that they would; get land, and this land. As I have said Lord Leverhulme came to an arrangement with the then Government, headed by the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George), the great authority on land policy at the moment—his land policy is back to the land, lying with his back on the land. That arrangement was never carried out. He came to an arrangement with Lord Leverhulme and that arrangement was never carried out. The present Government are doing what they can to discourage people going on to the land. What do we find in proof of my statement? Between six and seven months ago a great ball was given in Inverness and all the nobility of the Highlands were there. [Interruption.] My hon. Friend the junior Member for Dundee (Mr. T. Johnston) calls them "the robility" and I wish hon. Members would only read the junior Member for Dundee on "Noble Families" and they would know the robbers and murderers that the ruling class in our country have been. At this ball there was an Indian Rajah who made a speech and said he was delighted with the magnificent scenery of the Highlands.

    The Lord Advocate is not responsible for the sayings of the Rajah. Really the hon. Member must deal with something which the Lord Advocate or the Secretary of State for Scotland can do. I do not think they can control Rajahs in any way.

    I agree, but I want to call attention to what this Rajah said and to point out that he did not get the gaol. The Lord Advocae did not step in, in the Rajah's case; but if the Lord Advocate had been the Advocate for the people of Scotland he would have arrested the Rajah. What did he say? He said the only thing that was now required to make the Highlands of Scotland the complete pleasure ground for the rich was the introduction of a few Bengal tigers so that they would run the natives out of the Highlands of Scotland. [Laughter.] You Tories may laugh; you may smile and smile and smile and play the villain all the while, but the working class of Scotland took note of that, as they will take note of the complacent smile with which it is received here. This was an Indian Rajah but these people of the ruling class if Old Nick were a rich man would accommodate themselves to him. That applies to the ruling class of this country and every other country. Those who boast of the British Empire as the greatest Empire on which the sun ever shone, should think that the men who are being treated in this way, are the same as the men who made that great Empire possible; men who left the shores of Scotland and went to the uttermost parts of the earth. Here are the men who stood on the field of Waterloo. [Laughter.] Read your history. They are the descendants of the men who stood on the field of Waterloo as the historian said "like rocks that encircle their Highland home."

    The hon. Member must come to something which he wishes the Lord Advocate or the Secretary of State for Scotland to do. He has not arrived at that yet.

    I have arrived at that. I want, in the first place, the Lord Advocate to see that the women and children of these men are attended to, as soon as humanly possible. I am perfectly satisfied that if the Lord Advocate's own wife and family were in these dire straits he would see to them. It is as much his duty in this case because he is here representing the people of Scotland and not himself and he should be all-powerful in this matter. No matter how bad or vile you may make out these men to be, you have no right to starve the women and children. That is what you are doing, and I want the Lord Advocate to stop it at once. I am not asking an impossibility, nor am I asking for a favour. We are not here to sue for peace, but to fight for the liberty of these men. I want the Lord Advocate, therefore, to liberate these men, and at the next opportunity on the Adjournment I am going to move a vote of censure on the Sheriff of Inverness who sent these five men to gaol.

    I wish to add a few comments upon this case. These five men, namely, Neil MacDonald, Ewen MacLennan, Kanneth MacLennan, Roderick MacLeod and Charles MacLennan who are now in gaol for two months. What is their offence? There is no dispute about the facts. They were promised land; promised an opportunity of raising food for the sustenance of their families, and that was all they asked. For years they waited while the Government of the day came to a privy arrangement with the late Lord Leverhulme whereby the small holdings legislation passed by this House was not to be operated for 10 years. Before the 10 years expired Lord Leverhulme died. His schemes had to be given up, his work stopped and there was no employment for these men. They could turn their hand to nothing except raising food. They had been promised land by the Scottish Board of Agriculture. The land adjacent was not being cultivated. They cultivated it and grew crops. They offered rent. They are offering rent now and the Lord Advocate's Department or the Department of the Secretary of State for Scotland—which of the two I do not know—incited the proprietor of these lands to apply for an interdict against the men who were tilling the soil. The Board of Agriculture had been in negotiation with this gentleman to take over his land for small holdings. This gentleman was allowing these people to till the soil and the Board of Agriculture said to him, "There is no deal unless you get an interdict against these raiders. We will give no land to raiders. We will countenance them in no way whatsoever." This man, this Mr. Roderick Macleay, this farmer of Scaristaveg, who got this farm from Lord Leverhulme, thereupon sued for breach of interdict. There is one fact which the hon. Member for Dumbarton Burghs (Mr. Kirkwood) did not disclose, and this brings the Lord Advocate definitely into it. Here is the allegation that is made, that the first order to these men, who are Gælic speakers, who do not know English, who are far away from a law court—[An HON. MEMBER: "Do they know Russian?"] We are dealing with the lives and liberties of men who fought to defend better men than the hon. Member who interrupts me.

    Not in that state anyway. I do not mind interruptions from men who are compos mentis. Five ex-service men are lying in gaol, and what for? They are in gaol because they sought the right to go to work to preserve their lives and those of their families. There is no insurance benefit for them when they come out. There is nothing for them but blank starvation. The Lord Advocate's Department incites this farmer to apply for breach of interdict. The first notice to these men to appear in the Court was on the 10th March. The order, I am told, was vague, and it was impossible to say whether personal appearance or notice of appearance was intended. At any rate, the men wrote to the sheriff clerk that they intended to defend. They were going to raise the money to appear in Court. A few days afterwards, the sheriff clerk having got this notice, they sent the sheriff clerk a written defence signed by all of these men, and he replied that he had no authority to receive written defences. I believe that is legally accurate. When the men did not appear personally on the 10th March, the Court pronounced another order, dated 10th March, requiring these five men to appear personally on Thursday, 31st March. The defenders were arrested, however, and brought to the Court before the expiry of that notice.

    They were arrested by minions of the Government, and the Lord Advocate is surely responsible for that. They were given two months' imprisonment for alleged contempt of Court. The men could not plead. The hon. and learned Member for Argyll (Mr. Macquisten), whom I see in his place, will be able to assure the House that there are hundreds of these cases of men who are mystified in a law court and who cannot put up a reasonable defence at all. These particular men were simply sent away for two months' imprisonment, and here is the point, that while they are in prison their families are starving. When they come out of prison at the end of two months, there is nothing else for them to look forward to but to go back on these lands again. Before God and man, they can do nothing but go back and raid these lands again, and His Majesty's Government have no policy whatever but simply one of persecution, persecution, persecution of men to whom they gave a definite promise of an opportunity to earn their bread by the sweat of their brow. I have here the comment of His Majesty's Judges in the Land Court of 1916, after the War began. They said:
    "There is every reason to fear that, unless the Acts intended to preserve and extend small holdings are effectively reformed, at least to the extent of urgent necessary amendment, and as soon as practicable, and unless the system of law and policy which places the preservation of deer and other game above the production of food, and which permits or encourages the depopulation of the country for the pleasure of the rich of this and foreign nations, is completely reversed, the decline of population will rapidly accelerate, and the younger men will in increasing numbers emigrate to the Colonies, which offer land on just and generous conditions, rather than continue to bear the evils and abs which the beneficent intentions of the Legislature have mitigated but as yet have failed to suppress, or they will, as happened before the Crofters' Act passed, refuse to obey land and game laws which they feel to be unjust, and often cruel, and which are clearly inconsistent with the spirit of modern legislation."
    The point we put to the Lord Advocate and to the Government to-night is this: They have made criminals of five honest men, whose sole crime is an attempt to produce food for themselves, to keep their families from starvation. They do not want the land for nothing; they were paying rent, they were building houses for themselves, with their own labour, and the proprietor was not interfering with them, but His Majesty's Government step in and incite this proprietor to have these men thrown into gaol, for that is what it amounts to. When they come out of gaol at the end of two months, will the Lord Advocate or any hon. Member opposite tell me what these men are to do? Are they to go back to Scaristaveg? There is no land for them. There are policemen, gaolers, emissaries of the Lord Advocate and of the Secretary of State for Scotland ready to run them back to gaol again, ready to incarcerate them again, if they seek to raise potatoes or food for their wives or their families. That is the indictment we lay against His Majesty's Government. There is land suitable and available, and the men are willing to work the land and maintain themselves as decent citizens. They are willing to obey the Scriptural injunction to earn their bread by the sweat of their brow, and His Majesty's Government, instead of being defenders of law and order, are defenders of neither law nor order, but mere defenders of vested interests, hanging on to an obsolete, rotten, corrupt and anti-national land system. They say to these poor men, who are my nationals, men with my blood, bone and sinew: "Off to gaol with you, if you dare to cultivate the land of Scotland for the sustenance of your families!"

    That is the indictment we bring against this Government, and so far as I and my friends here are concerned, there will be no peace in this House as long as that policy is continued. I agree with my hon. Friend the Member for Dumbarton Burghs. We can get up debates here about China, about Timbuctoo, about any place in the far-flung world, but you are depopulating our own native land, you are spending money to hunt our people away to Canada, to South Africa, and to Australia to grow food, and you deny them the privilege of growing food in their native land. You have made our land a happy hunting ground for sportsmen—deer forests for the rich. We are going to demand—and we are going to see we get it—that the land of our people shall be used, not as a sporting ground for the idle rich, but as a treasure house in which people of our kith and kin may labour and bring up their families in decency and comfort, and if His Majesty's present Government or any other Government stand in the way of that being done, then, sooner or later, there will be turmoil and there will be trouble. I am glad that these five men from Scaristaveg have had the courage to go to gaol as a flaming protest against this accursed system for which His Majesty's present Government stands.

    As I indicated when I ventured to intervene at an earlier stage of the Debate—and it has become more obvious as the Debate has gone on—it is not only unfair to my right hon. Friend and myself, but very unfair to the House, that at such short notice a question of this type should be raised. As I mentioned, it was not until seven o'clock that I was told anything at all about it, and it was then too late to get even the few papers that I have over from the office, and I have been unable to get hold of my right hon. Friend. Therefore, I am afraid I must take up the position that I can only answer for anything with which my Department is concerned. Hon. Members know well that I am always ready to assist my right hon. Friend especially when the information is available and ready at my hand, but I cannot, and it would not be fair to my right hon. Friend, undertake to answer anything in regard to the history of these holdings and the surrounding holdings, of which I know precious little at the present moment. I do not propose, and I am not in a position, to discuss that at all or the smallholdings' policy of the Government, for it is not part of my Departmental work. Furthermore, the question of the liberation of these men is entirely beyond my control. If it is a question of dealing with their liberation, that is a matter for the Secretary of State and not for me. Therefore I cannot deal with either question.

    My right hon. Friend the Member for Shettleston (Mr. Wheatley) is a little short or incorrect in his memory, because what I said when the Private Notice question was asked by the hon. Member for Dumbarton Burghs (Mr. Kirkwood), was that I would at once communicate through my Department with that of the Secretary of State. I did so, but the shortness of this notice was the very thing which prevented me from finding out what was known about it and so I cannot deal with that part of the question now. As far as the question of proceedings is concerned, the hon. Member for Bridgeton (Mr. Maxton) interjected a supplementary on that occasion and I can answer the point he put then, although I have not even got the newspaper account in front of me at the present time. The Lord Advocate had nothing to do with this prosecution at all. On the occasion referred to, the hon. Member for Bridgeton suggested that the Lord Advocate ought to know whether he had anything to do with it. I had nothing to do with it at all. As hon. Members may be aware, where, as in this case, a breach of interdict is raised at the instance of the proprietor in the Sheriff Court, the concurrence which is given there is the concurrence of the Procurator-Fiscal, without reference to the Lord Advocate, and that concurrence is in a sense merely a formal concurrence, that is to say all that the Lord Advocate in the Court of Session or the Procurator-Fiscal in the Sheriff Court has to see is if a prima facie case exists for an interdict. Everyone is agreed, as far as I understand the facts, that undoubtedly there was a breach of interdict and what hon. Members are concerned with now, as I understand from the hon. Member's question, is the interdict itself and not the question of the breach. If the newspaper accounts are correct—

    I had no responsibility for that and know nothing about it. It is not part of my Departmental work.

    That just shows the advisability of giving a little more reasonable notice so that we might have been in a position to give information in the usual way. My right hon. Friend and I are quite willing to give the House such information as we can, but we have separate Departments and separate responsibilities. This really is all that I can say with regard to the point put, except one other point which the hon. Member for Dundee (Mr. Johnston) referred to. Certainly—and I assume that my right hon. Friend would give the same answer as regards his Department—but certainly as regards my Department, it never incited any action for interdict at all.

    The Lord Advocate has made a mistake. Is it or is it not the case that these men were peacefully cultivating the land on this farm at Scaristaveg until the Board of Agriculture informed the proprietors that they could not deal with them and could not take over the land for small holdings unless they first of all got rid of these raiders who were squatting.

    That is the very point I cannot go into as far as my Department is concerned. I do not know what answer the Secretary of State would give to that accusation, but as far as I was concerned the Lord Advocate's Department never incited the interdict. It might be that the facts to which the hon. Member for Dundee refers might lead to a different answer from my right hon. Friend, but that just shows the force of what I have said about notice. I am not blaming the hon. Member for Dumbarton Burghs, but am rather explaining the reasons I am not in a position to answer him as fully as I should desire. If the hon. Member had given further notice and had waited until to-morrow we might have been in a position to have the papers here. As it is I really have nothing to add to what I have said already.

    May I put one question regarding the legal point? I understand from the report of the proceedings that these men were charged not with going on the land at all, but with contempt of Court, that is, that they refused to obey the first summons to appear at Court and refused to obey the interdict. That I understand was the charge.

    No, I think I am right in saying that, as is usual in such cases, an interdict was granted against their remaining on the land. They went on remaining on the land and for that they were cited for a breach of interdict.

    In answer to the Lord Advocate I want to say that he rather stressed the discourtesy of hon. Members on this side in raising this matter with such very short notice.

    It will be quite obvious to the Lord Advocate that an opportunity such as this only arises very rarely, and it was not, until seven o'clock that it, became obvious that the opportunity would be available at eight o'clock.

    I am not blaming anybody; far from it. All I wanted to explain was why unfortunately I am not in a position to deal with this more fully as I would have been very ready to do if I had the information at my disposal.

    I find it difficult to accept the view that this matter was regarded as merely a piece of routine work to be put through by the local Procurator Fiscal. This matter had been one of very great public controversy through the whole of the Highlands, not merely for a week or a month, but for years. It was known all about these men, and I am not satisfied that the prosecution of these men was not more than a mere matter of the action of the local proprietor or the local Procurator Fiscal or the local Sheriff, but is a matter of high policy on the part of the Scottish Office. I do not believe the Secretary of State ordered these steps without first consulting the Lord Advocate and the Solicitor-General, and I am making the suggestion quite definitely here that every single Scottish officer of the Crown knew about the whole business and that this would arouse trouble throughout the whole of the Highlands.

    Then that is a most shocking admission, and if it never came definitely before the Lord Advocate's personal notice, I am perfectly satisfied that his responsible permanent officials in Edinburgh knew absolutely everything about it, even if they did not think It worth while to bring it to his notice, because this is a matter of very great importance to the whole of the land population in the Highlands. Every man who is working on the land from one end of the Highlands to the other has watched the progress of this land-raiding by these men, has watched anxiously to see one Government or another coming forward with some definite scheme to provide land legally for the number of people in the Highlands who are anxious to get land to work. Instead of meeting the wishes of these men by providing land for them and for hundreds of others waiting for a similar opportunity to cultivate the land, instead of making some attempt to satisfy the land hunger in the Highlands—and, after all, the Procurator Fiscal, whether he acts outside the knowledge of the Lord Advocate or not is responsible to the Lord Advocate, and the Lord Advocate is responsible for his actions whether he knows about them or not—these people, instead of satisfying the land hunger, throw those men into prison.

    I want to support most strongly the two points put by my hon. Friend the Member for Dumbarton Burghs (Mr Kirkwood), first of all, that the dependants of these people shall be relieved of their present necessities at once. As an administrative act, that does not require any delay whatever. It would be done if there were distress among British citizens somewhere at the far end of the Globe. Relief would be wirelessed, and every step would be taken if those people were thousands of miles away from their homes. I put it to the Lord Advocate that if it can be done for people thousands of miles away, it can be done for citizens in our own land. Secondly, I want the Lord Advocate and the Secretary of State for Scotland to consider whether justice is not best served by the immediate release of these men. The mere upholding of an interdict is a trivial matter compared with the recognition of the right of a Scotsman to live in Scotland by the exercise of his labours on Scottish soil. That is the principle of justice which is at stake, and I appeal to the Lord Advocate to use all the influence of his own Department, and to use his own personal influence with the Scottish Secretary to see that the men are released at once.

    It is a very shocking thing that these men should be in prison. I am sorry I was not present to hear the speech of the hon. Member for Dumbarton Burghs (Mr. Kirkwood), but I gathered from the speech of the hon. Member for Dundee (Mr. Johnston) that what happened was that these men had taken possession of some land, and the proprietor turned them off. [HON. MEMBERS: "With pressure from the Department!"] I do not know whether that is so or not, but I expect that the Department's point of view is that they were considering taking over the land. No doubt there was a great number of applicants for land in the Highlands.

    They have all been promised. The problem of the settlement of the people on the land has not been adequately dealt with, which shows how the best intentions of Government Departments never seem to operate very successfully. As a Highlander, and representing the Highlands, I think all the cries made for assistance for development in the Highlands over a long series of years has only resulted in a large army of officials. These men had taken possession of this land, and it is probable that the Board of Agriculture take the view that there are a lot of applicants, and those men might not have been selected. I think it is a most unfortunate proceeding that decent crofters, although they have undoubtedly broken an interdict, should be landed in this unfortunate position, and their families left to struggle in want in their absence. Some attempt

    Division No. 83.]

    AYES.

    [9.47 p.m.

    Acland-Troyte, Lieut.-ColonelBourne, Captain Robert CroftCharterls, Brigadier-General J.
    Agg-Gardner, Rt. Hon. Sir James T.Bowater, Colonel Sir T. VansittartChurchill, Rt. Hon. Winston Spencer
    Alexander, E. E. (Leyton)Bridgeman, Rt. Hon. William CliveClarry, Reginald George
    Atholl, Duchess ofBrittain, Sir HarryCochrane, Commander Hon A. D.
    Balfour, George (Hampstead)Brooke, Brigadier-General C. R. I.Cockerill, Brig,-General Sir G. K.
    Benn, Sir A. S, (Plymouth, Drake)Buckingham, Sir H.Couper, J. B.
    Bethel, A.Bull, Rt. Hon. Sir William JamesCurzon, Captain viscount
    Blades, Sir George RowlandCassels, J. D.Davidson, J.(Hertf'd, Hemel Hempst'd)
    Blundell, F. N.Chamberlain, Rt. Hon. N. (Ladywood)Ellis, R. G.
    Boothby, R. J. G.Chapman, Sir S.England, Colonel A.

    should be made to get this question settled, not only in this district, but in many districts of the Highlands, and to get men, who are willing to settle down in these remote parts in one of the best occupations open to mankind, settled as soon as possible, and not to allow any technicalities to stand in the way. The British Empire owes the Highlands a very deep debt of gratitude, and although it is going to cost the Southern parts of this land large sums of money in the way of providing roads for transport and other requirements to enable them to dispose of their produce, they could not make a better investment than do something of this kind, and help to increase the numbers on the land. If they do so, they will obtain for the British Empire, perhaps, the staunchest, the most patriotic and bravest type of citizen it is possible to have. I do beseech the Lord Advocate and the Secretary of State for Scotland to apply their minds so that this grave scandal of the imprisonment of these men may be put an end to at the earliest possible moment.

    I do not want to prolong discussion if there is any other way of expressing my dissatisfaction with the statement we have had from the Lord Advocate. I am not very clear what the procedure is on these occasions, but I would like to ask whether my friends and I have the option of dividing the House to express our protest against the manner in which this question has been handled?

    The Question has been put from the Chair, "That this House do now adjourn." The right hon. Member could, of course, vote against that, and, in the event of the Motion being defeated, the Debate could be resumed.

    Question put, "That this House do now adjourn."

    The House divided: Ayes, 96; Noes, 47.

    Ford, Sir P. J.Loder, J. de V.Shaw, R. G. (Yorks, W.R., Sowerby)
    Forestier-Walker, Sir L.Lougher, LewisShepperson, E. W.
    Gower, Sir RobertLynn, Sir R. J.Slaney, Major P. Kenyon
    Graham, Fergus (Cumberland, N.)McNeill, Rt. Hon. Ronald JohnStott, Lieut.-Colonel W. H.
    Greene, W. P. CrawfordMacquisten, F. A.Styles, Captain H. Walter
    Grenfell, Edward C (City of London)MacRobert, Alexander M.Sueter, Rear-Admiral Murray Fraser
    Hall, Lieut.-Col. Sir F. (Dulwich)Maitland, Sir Arthur D. Steel-Sykes, Major-Gen. Sir Frederick H.
    Hannon, Patrick Joseph HenryMitchell, S. (Lanark, Lanark)Thom, Lt.-Col. J. G. (Dumbarton)
    Harvey, G. (Lambeth, Kennington)Mond, Rt. Hon. Sir AlfredThomson, Rt. Hon. Sir W. Mitchell-
    Henderson, Capt. R. R. (Oxf'd. Henley)Monsell, Eyres, Com. Rt. Hon. B. M.Tinne, J. A.
    Hennessy, Major Sir G. R. J.Moore, Lieut.-Col. T. C. R. (Ayr)Turton, Sir Edmund Russborough
    Hills, Major John WallerNail, Colonel Sir JosephWatson, Rt. Hon. W. (Carlisle)
    Hilton, CecilNewman, Sir R. H. S D. L. (Exeter)Watts, Dr. T.
    Holbrook, Sir Arthur RichardO'Neill, Major Rt. Hon. HughWilliams, C. P. (Denbigh. Wrexham)
    Horne, Rt. Hon. Sir Robert S.Penny, Frederick GeorgeWinterton, Rt. Hon. Earl
    Hudson, R. S. (Cumberl'nd, Whiteh'n)Radford, E. A.Wood, E. (Chest'r, Stalyb'dge & Hyde)
    Huntingfield, LordRaine, W.Wood, Sir H. K. (Woolwich, West)
    Jackson, Sir H. (Wandsworth, Cen'l)Reid, D. D. (County Down)Woodcock, Colonel H. C.
    Jacob, A. E.Remer, J. R.Wragg, Herbert
    Jephcott, A. R.Robinson, Sir T, (Lancs., Stretford)Young, Rt. Hon. Hilton (Norwich)
    Kidd, J. (Linlithgow)Russell, Alexander West (Tynemouth)
    King, Captain Henry DouglasSamuel, Samuel (W'dsworth, Putney)

    TELLERS FOR THE AYES.—

    Lister, Cunliffe, Rt. Hon. Sir PhilipSanderson, Sir FrankMr. F. C. Thomson and Captain
    Bowyer.

    NOES.

    Barr, J.Hall, G. H. (Merthyr Tydvll)Stewart, J. (St. Rollox)
    Batey, JosephHamilton, Sir R. (Orkney & Shetland)Sullivan, Joseph
    Bromfield, WilliamHudson, J. H. (Huddersfield)Sutton, J. E.
    Brown, Ernest (Leith)Jenkins, W. (Glamorgan, Neath)Thomas, Sir Robert John (Anglesey)
    Brown, James (Ayr and Bute)John, William (Rhondda, West)Tinker, John Joseph
    Buchanan, G.Jones, Henry Haydn (Merioneth)Townend, A. E.
    Clowes, S.Lee, F.Viant, S. P.
    Compton, JosephMarch, S.Watson, W. M. (Dunfermline)
    Cowan, D. M. (Scottish Universities)Maxton, JamesWatts-Morgan, Lt.-Col. D. (Rhondda)
    Crawfurd, H. E.Mitchell, E. Rosslyn (Paisley)Wellock, Wilfred
    Dalton, HughMosley, OswaldWheatley, Rt. Hon. J.
    Day, Colonel HarryNaylor, T. E.Wiggins, William Martin
    Dunnico, H.Potts, John S.Windsor, Walter
    Edwards, C. (Monmouth, Bedwellty)Robinson, W. C. (Yorks. W. R., Elland)
    Fenby, T. D.Short, Alfred (Wednesbury)

    TELLERS FOR THE NOES.—

    Garro-Jones, Captain G. M.Smillie, RobertMr. T. Johnston and Mr. Kirkwood.
    Gibbins, JosephStephen, Campbell

    Adjourned accordingly at Eight Minutes before Ten o'clock.