Skip to main content

Commons Chamber

Volume 216: debated on Thursday 26 April 1928

The text on this page has been created from Hansard archive content, it may contain typographical errors.

House Of Commons

Thursday, 26th April, 1928.

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

Private Business

Shropshire, Worcestershire, and Staffordshire Electric Power Bill,

Read the Third time, and passed.

Oral Answers To Questions

Naval And Military Pensions And Grants

Annual Report

1.

asked the Minister of Pensions whether the Annual Report for the year ended 31st March, 1928, will be presented before the end of April; and, if not, when it is anticipated that it will be available?

Much of the material required in the Annual Report of my Department is not available until some time after the end of the Financial Year. I could not therefore undertake to issue the Report by the date suggested. I took steps last year to expedite the issue of the Report for 1926–27, and the Report for the Financial Year just concluded will be issued with the least avoidable delay.

Disability Pensions

3.

asked the Minister of Pensions if he will consider the advisability of amending the War Pensions Regulations to provide that a claimant may qualify for pension if the evidence available indicates the probability that his disability was due to, or aggravated by, war service, although such evidence may fall short of definite proof?

Positive evidence in a legal sense has never been, as is suggested, a condition of the admission of a claim under the Royal Warrants. Every case is considered on merits in the light of all the evidence available in regard to it and it is the practice of my Department to give every claimant under the Royal Warrant all possible assistance in procuring the necessary evidence.

Prisoners (Escapes)

4.

asked the Secretary of State for the Home Department whether he can give the exact number of convicts who have escaped from any of the prisons under his control for the 12 months ended to the last convenient date; and whether he will also state what changes have been approved by him to strengthen the precautions to prevent the escape of prisoners?

I gave the hon. Member, in reply to his question of 23rd February last, figures as regards prisoners generally. If his present question refers to convicts as distinct from local prisoners, the answer is eight. It is the practice, whenever an escape occurs, to hold a careful inquiry into the circumstances, and as a result of such inquiry detailed measures of various kinds are taken.

Have the precautions which the right hon. Gentleman said he was approving in order to strengthen the measures to prevent these escapes been put into operation?

Different precautions are being put into effect in prisons; since the hon. Member addressed his previous question to me, there have been no escapes, and I hope that the precautions have been sufficient.

Arrested Irishmen (Russian Money)

6.

asked the Home Secretary whether he can give the House any further information as to the transmission of money to Communist agents by a Russian bank in this country?

No, Sir. My inquiries are being conducted with all possible expedition, but they cannot be completed for some days yet.

Education

Instruction By Cinema

11.

asked the President of the Board of Education in how many schools the cinema is more or less regularly used in imparting instruction; and how many of these schools are in Wales, giving the numbers for each county?

I am afraid that I cannot give the particulars asked for by the hon. Member. The cinema is, of course, used occasionally in a number of schools as a means of supplementing and reinforcing the ordinary class-room instruction.

Elementary School Curriculum (Economics)

12.

asked the President of the Board of Education whether he will consider the advisability of including in the elementary school curriculum, Standards 6 and 7, a primary course of economics?

14.

asked the President of the Board of Education whether he has considered the advisability of including a primary course of economics in the elementary schools curriculum; and if he can make any statement as to the practicability of doing so?

The Board do not prescribe the subjects to be included in the curricula of schools. Economics is, however, taught in many secondary schools, particularly those which provide commercial courses, and also in a considerable number of technical and continuation schools; but its teaching as a distinct subject is not really suitable for children of elementary school age, and simple lessons on the elementary principles of economics are more generally and, I think, more effectively given in connection with lessons in history and geography.

Workers' Educational Association (Grants)

13.

asked the President of the Board of Education what is the nature of the Board's grants to the Workers' Educational Association; and if he is satisfied with the manner in which these grants are expended by this association?

The Board do not pay grants to the Workers' Educational Association as such, but to the district organisations of that Association in respect of the salaries of tutors conducting one-year and terminal classes approved by the Board under their regulations. These grants are limited to a maximum of 75 per cent. of the salary of the tutor, exclusive of his expenses. Where the classes are conducted under the direction of the local education authority the authority's approved expenditure in aiding them is recognised by the Board for grant. In addition to compliance with the Board's regulations, classes assisted from public funds are required to satisfy certain general conditions which were laid down in 1920 by the Associations of Local Education Authorities and accepted by the Workers' Educational Association. I will circulate a copy of these conditions in the OFFICIAL REPORT. The classes are visited and inspected by the Board's inspectors, and I believe these conditions are generally observed by the tutors and by all those directly concerned with the organisation of the classes. Members of the Association not directly concerned with the organisation of classes in the district will, I am sure, realise, on their side, the desirability of abstaining, in the pages of the "Highway" or otherwise, from expressions of opinion on matters of current political controversy which may give the public a wrong impression of the character of the Association's strictly educational work.

Has the Noble Lord at any time received reports from his inspectors making complaints about the work done by this Association?

I have received criticisms from my inspectors in the same way as I have received criticisms of all classes of education, but, as regards any serious complaint of political bias in teaching, I have received no such complaints.

Is the right hon. Gentleman not aware that the Workers' Educational Association was at one time intimately connected pith the National Council of Labour Colleges, which is avowedly an extremist organisation; that comment has been aroused by the fact that in one class a Communist, teacher is employed; and that considerable doubt exists in the minds of Members on this side of the House as to whether the educational classes are conducted in the way in which he has said they were.

As regards the last of these supplementary questions, I hope that, if there be any doubt in the minds of the people, it will be allayed by the answer which I have just given; these classes are carefully inspected. As regards the second supplementary question, if my hon. Friend has any instance where he thinks a class is not properly conducted, and he will give it to me, I shall be glad to go into it. In reply to the first supplementary question, I really think that my hon. Friend is misinformed. So far from being closely connected with the National Council of Labour Colleges, an organisation which is not concerned with education, but with pure political propaganda, the Workers' Educational Association has always, in its published aims and in its activities, tried in every way to dissociate itself from the ideals of the National Council of Labour Colleges.

Following is the copy of the Conditions:

"The following conditions should be satisfied before financial assistance is given to W.E.A. classes by local education authorities:—

  • (a) Courses of study assisted out of public funds must aim at freedom from party bias and from any flavour of political propaganda.
  • (b) Such courses must be conducted by teachers who have a thorough knowledge of the subject and have the experience and training, as well as personality and understanding of the students' needs, necessary to impart that knowledge. It is by these tests alone that the qualifications of teachers should he judged.
  • (c)Such courses must he open to all students who desire to take them and are able to profit by them.
  • (d) In order to ensure the proper observance of the foregoing conditions, it is essential that each class aided by a local education authority should be open to inspection by the authority and that the syllabus and tutor should be approved by the authority or by such other body as the authority may consider qualified to exercise those functions."
  • Public Health

    Midwives

    15.

    asked the Minister of Health what steps he has taken to set up a committee to inquire into the general question of the training and supply of midwives; and have any members of this committee yet been appointed?

    I have invited certain ladies and gentlemen to serve on this committee.

    Can the right hon. Gentleman say when the names of the committee will be announced.

    I have not yet received replies from those I have invited, but as soon as I have, I shall be in a position to announce the names.

    Maternal Mortality

    20.

    asked the Minister of Health whether his Department has any statistics of the number of deaths of women in pregnancy from septic peritonitis; and whether he proposes to take any steps to safeguard them against the onset of this condition at maternity welfare centres?

    The last year for which a detailed classification of the deaths due to pregnancy and childbearing is at present available is 1925, and in that year there were 84 deaths from septic peritonitis, perimetritis, and pelvic peritonitis. As regards the second part of the question it is one of the duties of the doctors at ante-natal clinics to detect and remedy any focus of infection which might later be a cause of septic infection.

    Can the right hon. Gentleman have the returns of his Department kept a little more up to date—those are for 1925—and, further, may I ask whether he is not aware that septic peritonitis almost always supervenes upon attempted abortion, and is not that brought about by the policy of his Department in denying information on birth control at maternity and welfare centres?

    In what way is it possible to get rid of septic peritonitis by anything that is done at an ante-natal centre?

    Will the right hon. Gentleman deny the suggestion that his policy, approved by this House, of refusing Government information on birth control is in any way responsible for this state of affairs?

    Is it not the fact that the lack of information as to restriction of families does cause these cases?

    Question time is not the time at which to pursue these controversial questions.

    Tuberculosis

    24.

    asked the Minister of Health the estimated number of persons in England and Wales suffering from tuberculosis on 1st January, 1928, or on the latest convenient date?

    According to the returns furnished to my Department, the total number of notified cases of tuberculosis which remained on the registers of Local Authorities on the 31st December last was 363,187.

    25.

    asked the Minister of Health the total number of sanatoria for the treatment of tuberculosis in England and Wales, distinguishing between those maintained wholly or partially from public funds and those supported by fees paid by the patients?

    The number of institutions approved by my Department for the residential treatment of tuberculosis under the schemes of local authorities in England and Wales (excluding general hospitals) is 349, of which 215 have been provided by local authorities and 134 by voluntary bodies. These are all maintained wholly or partially out of public funds. I have no complete information regarding those institutions not so maintained.

    26.

    asked the Minister of Health the number of persons in England and Wales who underwent treatment for tuberculosis in sanatoria during the year 1927, and the average duration of such treatment?

    Complete particulars for the year 1927 are not yet available. During 1926 the number of persons who received residential treatment for tuberculosis under the schemes of local authorities was 63,680, and the average duration of treatment was approximately 150 days.

    Deaf And Dumb Persons

    31.

    asked the Minister of Health whether it is his intention to appoint a Departmental Committee to investigate and report upon the social and industrial position of the deaf and dumb?

    I would refer my hon. Friend to the reply given to a question put on the 4th instant by my hon. and gallant Friend, the Member for Basingstoke (Sir A. Holbrook) of which I am sending him a copy.

    Poor Law

    Hollesley Bay Colony And Belmont Institution

    16.

    asked the Minister of Health the last occasion on which the in specters of his Department visited the Hollesley Bay colony and the Belmont institution when the last reports were made by his inspectors on the administration of these establishments; and whether the improvements recommended by his inspectors have been carried out in accordance with their recommendations?

    As regards the Hollesley Bay colony I would refer the hon. Member to the answer given to the hon. Member for Bow and Bromley (Mr. Lansbury) on the 21st March last. The Belmont institution has been inspected from time to time, the last occasion being on the 28th February last, and suggestions made for improvements in points of detail have been adopted. I am not, however, satisfied that the best use is being made of the institution, and conferences between my officers and the committee of management have taken place with a view to reorganising the arrangements.

    Have the improvements recommended by the inspectors of the Institutions been adopted by the right hon. Gentleman's Department?

    Can the right hon. Gentleman say whether the rest will be, because what is the use of sending inspectors dam there to make suggestions if they are not carried out?

    I am not in a position to say that every single detail has been carried out, but the majority of the recommendations have been.

    Casual Wards (Small-Pox)

    17.

    asked the Minister of Health whether arising out of the necessity to continue the arrangements for the detection of small-pox amongst casuals and the issue of Circular 830 pointing out that casual wards should not be closed except in the most exceptional circumstances, he can give any indication as to the extent the advice contained in the circular is being carried out by boards of guardians who have closed, or were contemplating the closing of, casual wards?

    The circular in question deals with the detection of smallpox among casuals and advises boards of guardians that in the event of a case of small-pox being found in a casual ward the temporary closing of the ward should not be necessary if certain precautions are taken; the circular does not in any way deal with the question of the permanent closing of redundant casual wards.

    To what extent have the Minister's views been accepted by these hoards of guardians?

    Vagrancy

    27.

    asked the Minister of Health whether his attention has been drawn to the proposals made by the Yeovil Board of Guardians for the solution of the vagrancy problem; and whether he will consider the advisability of appointing a Departmental Committee to study these and similar proposals and report on the problem?

    Yes, Sir. The proposals of the guardians are not essentially new, the question of establishing labour colonies and of detaining casuals for prolonged periods having been con- sidered on several previous occasions. I doubt whether there would be any advantage in the appointment of such a Departmental Committee as is proposed at the present time.

    Contributory Pensions Act

    18.

    asked the Minister of Health whether he is aware that the Highways Committee of the Aldershot local authority are recommending that the wages of all employees over 65 years of age should be reduced by the amount of the pension under the Widows', Orphans', and Old Age Contributory Pensions Act: and whether he will make representations to the local authority in question as to the undesirability of such a policy?

    I am not aware of this case and I have no authority to intervene in the matter. I would refer the hon. Member to my remarks during the discussion on the 22nd February last on this Act.

    In view of the advantage which has been taken by the Aldershot Council of this Act of Parliament, will the right hon. Gentleman make some representation to this particular council?

    19.

    asked the Minister of Health if steps will be taken to expedite the dealing with claims made by widows for pensions under the Widows', Orphans' and Old Age Contributory Pensions Act; and whether it is possible to make such staff arrangements as will permit of the pension being issued within 14 days of the application instead of the average five weeks, which it now takes, before the pension is issued?

    Every effort is being made to dispose of claims for pensions without avoidable delay, and it is hoped as the pressure is relieved to make some reduction in the time at present taken. I do not, however, think it possible, in view of the investigation which every claim entails as regards the insurance history of the deceased husband and the verification of marriage and of the dates of birth of children, to make such arrangements as will ensure that the award is made within 14 days after the application.

    Can we be assured that there will not be cases of four or five months' delay?

    The hon. Member will appreciate that the extraordinary number of claims that have come in has put a very heavy strain upon the resources of the Department, and they are working almost night and day, but the work is now beginning to clear, and I do not think that there is likely to he any repetition of long periods of delay.

    Would it not be a good thing to defer the dismissal of many hundreds of officials from Acton, and put them on this work?

    Housing (Rural Workers) Act

    20.

    asked the Minister of Health whether, in cases where the operation of the Housing (Rural Workers) Act are held up by delays caused by county councils, he will give authority to rural district councils to work the Act?

    If such cases as those to which my hon. and gallant Friend refers should arise, I will certainly consider whether different administrative arrangements should be made in those areas. I have, however, issued a Circular making various suggestions to county councils with regard to the administration of the Act, and I hope that more rapid progress will be secured.

    Is the right hon. Gentleman aware that there are no delays whatever on the part of county councils in England and Wales?

    Agriculture

    Farmers' Produce (Tolls, Exeter)

    30.

    asked the Minister of Health whether he is aware that, under Acts of Parliament of 1834 and 1841, farmers delivering goods at shops in Exeter have to pay tolls whereas goods arriving by train escape these tolls; and whether he will consider the introduction of legislation to repeal these Acts?

    I presume that the provisions which my hon. and gallant Friend has in mind are those under which persons selling from door to door certain articles of agricultural produce, etc., are liable to pay the same toll as if the goods had been taken into the market. The Acts in question are private Acts relating to Exeter, and any proposal for the alteration of these particular Acts would have to be by Private Bill, or by Provisional Order.

    Is not the right hon. Gentleman aware that these tolls act as a. direct tax upon home grown produce and that they are escaped by foreign produce? Cannot the Government take any action to do away with this injustice?

    I think this is rather an ancient survival from other times. I suppose the toll in question was intended to protect local markets. As I have pointed out, the remedy is in the hands of the local authority.

    Will the Minister be good enough to make representations to the Minister of Transport advising him to get rid of these tolls?

    Is the right hon. Gentleman aware that these Acts were passed at a time when there was no foreign competition and when the produce was sold in the streets?

    Quarantine Station, East London

    34.

    asked the Minister of Agriculture which countries are now prepared to receive animals from the new quarantine station; and whether negotiations are in progress to endeavour to extend this arrangement to all countries?

    I understand that the Union Government of South Africa (with the Mandated Territory of South-West Africa), Northern and Southern Rhodesia, Kenya Colony and the Govern- ment of Palestine are prepared to receive animals from the quarantine station. Other Dominions and Colonies have been informed of the provision of the new station but have not yet indicated their readiness to accept animals which have passed through the station.

    35.

    asked the Minister of Agriculture how many animals can be accommodated at the new quarantine station at the East London Docks; to whom the applications for accommodation should be sent; and what is the cost per animal whilst they remain there?

    The Station contains 28 boxes and 18 pens, and the maximum accommodation, which depends on the size of the animals, would be about 50 cattle and 36 sheep and pigs. Applications for admission should be sent to the Secretary, Royal Agricultural Society of England, 16, Bedford Square, London. The charges for care and maintenance are £3 per head for cattle and £1 for sheep and pigs for the quarantine period of 14 days. For each separate consignment of animals from the same premises there is a fee of 10s. to cover the Ministry's out-of-pocket expenses.

    Small Holdings, Scotland

    44.

    asked the Secretary of State for Scotland how many applicants for small holdings are on the waiting list in Scotland?

    The total number of applications for small holdings outstanding at this date is 4,996 and for enlargements of existing holdings 3,299.

    What is the intention of the Department in regard to giving a greater outlet for those who are standing idle?

    My right hon. Friend has made his policy and the policy of the Department very clear on more than one occasion.

    Provincial Art Galleries And Museums

    33.

    asked the Finnacial Secretary to the Treasury whether any steps can be taken to inform provincial art galleries and museums as to what art treasures the National Gallery, the Tate Gallery, and the British Museum have to lend to them if proper application he made in the interests of education?

    So far as the Tate Gallery is concerned, I would refer the hon. Member to the answer given to the hon. Member for the Devonport Division (Mr. Hore-Belisha) on 28th February last. The statements there made apply also to the National Gallery. Communications between those Galleries and provincial Galleries are constant, and the latter can always obtain a list of pictures available for loan. The British Museum sent a circular a few days ago to all provincial museums about loan facilities, and are now taking special steps to draw their attention to the matter again.

    I thank the hon. and gallant Member for his answer, and would ask him if it is not the fact that up till now, at any rate, the facilities offered by South Kensington have been known and appreciated throughout the country, and have been of immense benefit to provincial museums and art galleries, but that the facilities offered by the British Museum, the Tate Gallery and the National Gallery have been entirely unknown?

    Transport

    Motor Car Registration Numbers (Tansfe Fee)

    36.

    asked the Minister of Transport if attention has been called to the fact that the fee for transfer of motor car registration numbers is a flat rate of £5; if he is aware that this is a prohibitive sum for many owners of small cars who may wish to transfer their old numbers: and whether he will consider allowing a sliding scale of charges for the transference of motor numbers in the same ratio as the annual taxation of cars?

    The registration numbers are required as identification marks, and it is not desirable that transfers should be numerous. While the fee of £5 is sufficient to act as a deterrent against unnecessary transfers; I do not think that it can be regarded as prohibitive in cases where, for sentimental or special business reasons, it is desired to transfer a registration number from an old car to a new one, and I do not propose to disturb the existing arrangement.

    Is the right hon. Gentleman aware that I put down this question before the Chancellor of the Exchequer's Budget statement, and now that motorists, and especially small motorists, are to be called upon to contribute so much money to the revenue, could not this concession be made to them, even in sentimental eases?

    I confess that my personal sympathies are rather with the hon. and gallant Gentleman in this matter; particularly as I was obliged to pay £5, but on going into the matter I saw the justice of the claim and reluctantly agreed with it.

    The latter part of the question specifically asks that the concession may be made in the case of lighter cars. The Minister has agreed that the charge more than meets the cost of the transfer. Is it not neither more nor less than a system of profiteering at the expense of motorists?

    No, I cannot agree with the hon. Member. The registration system is a very useful help to the police in identifying cars, and, if it were changed, it would make their task very much more difficult.

    Motor Car Licences

    37.

    asked the Minister of Transport whether he is aware that a merchant who is compelled by the exigencies of his business to keep a spare motor for use in the event of a breakdown in his regular car transport, is forced to take out a full quarter's licence for his spare ear should it be called into use, although only for one day; and whether, in view of the hardship thus caused, he will make provision for the sale of temporary licences of short duration, either by the police or the post offices?

    By taking advantage of the provisions for the surrender of a licence made under Section 18 of the Finance Act, 1924, the owner of a motor vehicle can, in effect, limit his payment of duty to the cost of a licence for any one licensing month in the year. I am not prepared to make provision for the issue of licences for any shorter period.

    Does not the right hon. Gentleman consider that it is a gross injustice in a case where a man's car is not in use, although he has already paid the licence fee for it, that he should be compelled to pay even a month's licence fee for a substitute car for, possibly, only two days' work?

    is not this a very sensible question, and would it not be a sound business proposition to issue a weekly licence at a price which would pay his Department and be of advantage to the user?

    Electricity Charges, Wandsworth

    38.

    asked the Minister of Transport what action he proposes to take with regard to the application which has been made by the Wandsworth Borough Council for the revision of the maximum prices which may be charged for electricity in that borough?

    I have directed an Inquiry to be held into the application of the Wandsworth Borough Council and certain consumers for a revision of the maximum prices which may be charged for electricity in that borough.

    Can the right hon. Gentleman state whether this council is governed by what is known as the "Reds" or the "Blues"?

    Royal Air Force

    Accidents

    39.

    asked the Secretary of State for Air how many Royal Air Force pilots have been killed while flying since 1st January, 1928, both in this country and overseas; and will he give a detailed statement of the various causes which led to their deaths?

    As regards the first part of the question, the number of Air Force pilots killed while flying since 1st January is 15, of whom one was shot down in action. In addition, the following fatalities to personnel of the three Services were involved in these accidents: Royal Air Force, six; Army, two; Navy, two. As regards the second part of the question, I would deprecate, for the reasons given by my right hon. Friend the Prime Minister in his statement regarding Air Force accidents on 10th March, 1927, the giving of detailed particulars of the causes of the various accidents.

    Is the Under-Secretary aware that frequently the Air Ministry reports in cases of individual accidents the cause of the accident such as "an error of judgment," and why can be not classify these accidents so that hon. Members may be in a position to decide what is the main cause of accidents as a whole?

    Display, Hendon

    41.

    asked the Secretary of State for Air if he can supply particulars of the forthcoming air display at Hendon?

    The final details of the programme have not yet been decided, and I cannot add anything at present to the reply which I gave the hon. Member on 27th February.

    Is it intended to follow the example of last year and have a bombing expedition?

    Flying Accident, Cheshire

    40.

    asked the Secretary of State for Air whether his attention has been called to an aeroplane fatality which occurred at Dukinfield, Cheshire, on 25th March; whether any inquiry has been held by the Ministry into the causes of this accident; and, if so, with what result; whether there are any Regulations in force governing the landing of aeroplanes on private property in similar circumstances; and, if so, what steps are taken to enforce these Regulations?

    The circumstances connected with the accident referred to have been fully investigated by the inspector of accidents, but a complete report has not yet been made. It may be stated, however, that the primary cause of the accident appears to have been the attempt to land in a field which was unsuitable for that, purpose. The conditions under which flying can lawfully be practised in this country are laid down in the Air Navigation Act, 1920, and the Air Navigation Order, 1923, as amended by various subsequent Orders. The enforcement of these Regulations is a matter for the police, who are acquainted with their terms.

    Is it known that in this accident the pilot in the aeroplane had to come down in this field and what justification is there for saying that the machine came down in a field that was not suitable? Surely the pilot would not have come clown unless it had been compulsory for her to do so.

    We have not yet received the report, and consequently I am not able to add anything to my answer.

    Is the Air Minister taking any steps whatever to avoid a repetition of accidents of that kind?

    The Air Ministry is not responsible for a private aeroplane coming down in an unlicensed field.

    Is the Minister taking any action to prevent accidents like this which occur as the result of stunts? Is he not aware that on this occasion an attempt was made to carry a film to a local picture theatre, and had not that stunt been tried the accident would never have happened?

    Is it not a fact that in this case the landing in an unsuitable field was only the approximate cause of the accident, whereas the real cause was something else; and will he not sub-divide the explanations in which they are all classified as "errors of judgment" when some other cause precedes the error of judgment?

    Government Departments

    Mines Department

    42.

    asked the Secretary for Mines how many qualified mining engineers with underground experience are now employed by his Department as mine surveyors apart from the inspection staff?

    Is that one engaged in the Mines Department, or is he in the country at the present time?

    Ministry Of Health

    21.

    asked the Minister of Health the terms of employment of the temporary women staffs engaged for work in connection with the Central Index Committee and the number of occasions on which their period of employment has been extended?

    I would refer the hon. Member to the answer given to the hon. Member for Leith (Mr. E. Brown) on the 5th instant.

    22.

    asked the Minister of Health how many members of his staff are now engaged on overtime duties?

    78 members of the staff of my Department are at present employed upon overtime, of whom 29 are typists or messengers, 24 are employed in regional and provincial offices, and 25 at headquarters.

    23.

    asked the Minister of Health whether he has received the accredited representatives of the ex-Service temporary clerks employed in his Department who are liable to a week's notice terminating their employment; and, if not, whether he is willing to receive a deputation in order that he may hear the men's side as well as the official side?

    I would refer the hon. Member to the answer given to the hon. Member for Leith (Mr. E. Brown) on the 5th instant.

    Coal Industry

    Midland Marketing Scheme

    43.

    asked the Secretary for Mines if his attention has been called to the operations of the so-called five counties coal-marketing scheme, which came into operation on the 2nd of April last; if he is aware that this combine is restricting output, with consequent loss to the coal-export ports of the Humber; that during April the collieries affected were only allowed to raise 65 per cent. of their basis tonnage of output; and that, in consequence, since the 10th of April last it has not been possible for coal-exporting firms at Hull to obtain best South Yorkshire hards and washed smalls either for cargo or bunkering purposes and buyers have not been able to purchase either what is known as subsidised or non-subsidised coal, and ships of regular lines trading to Hull have been refused supplies and their custom driven elsewhere; whether he was consulted before this scheme was put into operation; and what action he proposes to prevent this artificial creation of unemployment and loss of trade and shipping to British seaports?

    I was not consulted before the Midland Marketing Scheme was put into operation, but I am aware that a quota of 65 per cent. of basic tonnage has operated for April under that scheme. I am informed that there has been a shortage of South Yorkshire bards and washed smalls for shipment from the Humber during the current month. This shortage is probably due partly to the closing of the pits for the Easter holidays and partly to the initial difficulties connected with the launching of the scheme. Further experience of the working of the scheme is, therefore, necessary before its effects can be judged. As the hon. and gallant Member may be aware, one of the principal objects of the scheme is to stimulate the export trade from the Humber.

    Is the hon. Gentleman aware that during the last 50 years we have never had a shortage of this kind; that the present scheme is driving British ships for bunkers to Rotterdam; that, since I gave notice of my question, small parcels of the best Yorkshire bards and washed smalls have been available at an advance in price of 3s. 6d. a ton for the hards and 2s. 3d. a ton for the smalls, and that, unless he does something, this is going to ruin a very important export trade?

    Is not that an argument against nationalisation and amalgamation?

    I have nothing to do with that matter. I was not consulted about the scheme, and I have no responsibility whatever for its effects. I am watching the scheme, and the answer I have given correctly describes the position. The Hull exporters are in close communication with the coalowners under this scheme.

    Is the Under-Secretary aware that the shipments are exported to a specification, and the holding up of any particular parcel for the mixing of that coal automatically has the effect not only of filling an empty road with full trucks of coal but of putting men out of work for the day?

    Is the Under-Secretary aware that at a conference of these people yesterday it was stated that in fifteen days there has been 30,000 tons short of the quota in Hull alone, and that the price had been advanced by 3s. 6d. a ton. Is he also aware that at the same conference it was stated that in con- sequence of that thirteen pits in South Yorkshire would not work again this month?

    Having regard to the serious effect upon the trade of this country, and particularly upon the shipping trade, is it not desirable that the Department should keep in constant touch with the coalowners on this matter, and will he see that the coalowners are consulted in connection with schemes of this sort before they are put into operation?

    Is the Secretary for Mines going to do anything to increase employment in those pits and endeavour to keep prices down?

    One of the objects of the scheme is to increase prices for export coal.

    I give notice that I shall raise this question on the Adjournment.

    House Of Lords

    45.

    asked the Prime Minister whether he is now in a position to make a statement as to the intention of the Government to implement the pledges given in respect of the amendment of the Parliament Act and the reform of the House of Lords?

    I would refer my hon. Friend to the answer which I gave on the 3rd April last in reply to a question by the hon. Member for Northampton (Mr. Malone).

    May we take it that, although the Prime Minister is not at the present time able to specify the time and manner in which this is going to he carried out, his Government is still firm in its intention to keep its pledge in this matter?

    Does the right hon. Gentleman's answer mean that in his opinion the House of Lords is beyond reform?

    Transjordania

    46.

    asked the Prime Minister whether this House will be invited to approve of or ratify the agreement between the United Kingdom and Transjordania (Cmd. 3069).

    As has been explained before, the ratification of treaties and agreements is the function, not of Parliament, but of the Crown.

    Does not the right hon. Gentleman think it necessary that we should have a Debate in this House, in view of the fact that we are subsidising a country to which we have given a free Constitution?

    I am always in favour of a Debate, and it will be possible to raise the subject at any time on the Colonial Office Estimates.

    Would it not be possible to get out of this habit of giving free Constitutions to peoples before their Budgets balance; and what opportunity now have we of recovering from Transjordania the money which the taxpayers of this country are spending on it year by year?

    When the Prime Minister says that the ratification of treaties is the prerogative of the Crown, does he mean that the prerogative can be exercised without the advice of His Majesty's Ministers?

    In that case, how is it that we are not to be allowed to raise the matter in Parliament, and ask Ministers as to their responsibility?

    Unemployment

    Minims, Scotland (Training)

    50.

    asked the Minister of Labour if he will cause centres to be established in Scotland without delay to train miners who are out, of work, both for home and oversea employment?

    This matter is at present under consideration.

    Can the hon. Gentleman give us any idea when the centres will be established?

    Is it not the business of the hon. Gentleman to ascertain when this important Committee, which is undertaking such an important function, will report to his Department on this matter?

    No, Sir; that is not a matter for me, but is a matter for the Committee themselves to decide.

    Can the hon. Gentleman give us a pledge that there will be a statement before the House rises at Whitsuntide?

    Oh, yes; I understand that the Ministry of Labour Estimates are to be discussed on Monday, when, no doubt, a statement will be made.

    Training Centres

    51.

    asked the Minister of Labour what is the nature and length of training given on the Ministry's farms at Claydon and Brandon; how long these farms have been in being; how many men are at present in training there; where and in what industries these trainees were previously employed; whether they receive any payment whilst training; what employment is subsequently offered to them; and what is the cost to the Government of these farms?

    I am sending the hon. Member copies of leaflets with details of the courses of farm training given at the Claydon and Brandon centres, which were established in November, 1925, and February, 1926, respectively. There are at present 483 men in training for farm work overseas-240 at Claydon and 243 at Brandon. These men are drawn from every part of Great Britain and from many types of occupations. Some have never had regular employment. On arrival overseas they are placed on farms by the Dominion authority concerned. The estimated current expenditure averages about 45s. per man per week.

    Is it compulsory on a man to accept training under penalty of losing his unemployment benefit?

    52.

    asked the Minister of Labour what is the nature and length of training given at the Ministry's handicraft training centres at Bristol, Birmingham and Dudley; how long they have been established; how many men are at present in training there; where and in what industries these trainees were previously employed; whether they receive any payment while in training; what employment is subsequently offered to them; and what is the cost to the Government of these training centres?

    I am sending the hon. Member a leaflet with details of the training. The Birmingham centre was opened in October, 1925; that at Dudley in January last, and the Bristol centre on the 12th of this month. There are at present 964 men in training at these three centres. The bulk of the men at Dudley and Bristol are drawn from the South Wales mining areas; those at Birmingham are local men representing many types of unskilled labour. The employment obtained by men after training covers more than 100 different occupations. The estimated current expenditure averages rather less than 30s. per man per week, apart from the benefit drawn by the men.

    Trade And Commerce

    Tariffs

    53.

    asked the President of the Board of Trade whether any foreign countries have lowered their tariffs since the resolution of the Economic Conference at Geneva last summer in favour of lower tariffs; and what countries have since raised their tariffs?

    Reductions of Customs duties of varying magnitude have been effected since the Economic Conference, mainly as the result of the conclusion of Tariff Treaties, in Czechoslovakia. Germany, Greece, Hungary, the Serb-Croat-Slovene Kingdom, Switzerland and Turkey. On the other hand, tariff increases covering a wide range of goods have been brought into operation in France, Chile, Salvador and Poland. Tariff increases of a less extensive character have taken place in Italy and Portugal. In Austria, Cuba and Belgium there have been changes in both directions. In most other countries there have been no changes of duty of importance.

    May I ask how it is that the hon. Gentleman does not mention the tariffs that have since been put on in England?

    I am sure the hon. Member knows that our import duties are countervailed by Excise duties, and are, therefore, purely for revenue purposes.

    Has my hon. Friend's attention been called to the desire of numerous Members on the Opposition side for prohibition, and may we take it that that is a suggested solution?

    Is not the hon. Gentleman aware that the majority of the duties imposed by the present Government carry no countervailing excise, and can he say whether the Government propose to reduce the duties and follow the good example of these countries?

    Those duties which are protective in character only apply to some two or three per cent. of our total imports.

    Patents (Extension)

    54.

    asked the President of the Board of Trade if he is aware that, at the time of the War period, all patents were automatically extended by two years, but that a further extension can only be obtained pursuant to an originating summons in the High Court, involving the expense of retaining counsel, solicitors, and patent agents; and whether, as a means to assist industry and stimulate employment, he will consider an amendment of the Law to provide facilities for such further extension of patents to be obtainable in appropriate cases without involving the expenditure of time and money necessitated by the present procedure?

    I am aware that by the Patents and Designs Act, 1919, the normal term of all existing patents was extended from 1.4 to 16 years, and that, with a view to cheapening the cost of obtaining an extension of this term when the patentee had suffered loss or damage through the War, the same Act provides that such application for extension may be made to the Court by way of originating summons instead of by petition. I regret that I do not consider it practicable to introduce legislation to alter the decisions made, after the most careful consideration, in 1919.

    Royal Parks

    55.

    asked the Under-Secretary of State for the Home Department, as representing the First Commissioner of Works, whether all the Crown parks have free lavatory accommodation for boys and girls, respectively; which of the drinking-fountains in those parks do not supply water; whether any of the lavatories for children are open only for a part of the year; whether water is supplied to the drinking-fountains for a part of the year only; and whether it is proposed that the lavatory accommodation and drinking-water supply shall be made continuous throughout the year in the grounds adjoining the Houses of Parliament and the Crown parks.

    The UNDER-SECRETARY of STATE for the HOME DEPARTMENT
    (Lieut.-Colonel Sir Vivian Henderson)

    Lavatory accommodation is provided in all parks, and a proportion is free to both sexes. In addition, conveniences limited to use by children are open all the year round, except in St. James's Park and the Victoria Tower Gardens, where the accommodation is of a temporary character to meet the demands during school holidays. Water is available at all fountains except during the winter months, when there is no appreciable demand and there is also danger from frost. The present arrangements appear to be satisfactory, as no complaints have been received. To provide permanent accommodation for children in St. James's Park—they can, of course, use the free accommodation already provided—would cost a considerable sum, on account of difficulty of connection to the sewer. In the Victoria Tower Gardens permanent children's conveniences will, it is hoped, be provided in the scheme for rebuilding Lambeth Bridge, which is now under consideration.

    Is it not a matter of public interest that all these places should be open all the year round, and would not various dangers be obviated thereby?

    I think that the arrangements, when they have been amended as I suggest, will be quite satisfactory.

    British Army (Officers' Training Corps)

    53.

    asked the Secretary of State for War the total number of boys who are now in the officers' training corps and the junior cadet corps?

    As stated on page 63 of the current Army Estimates, and page five of the Memorandum, the numbers of cadets in the Junior Division of the Officers' Training Corps and the Cadet Corps, according to the latest information available, were 33,363 and 47,391 respectively.

    India (State-Owned Coal Mines)

    57.

    asked the Under-Secretary of State for India whether he can place in the Library of this House any balance sheet or statement giving details of the financial results of the working of the State-owned mines in Bokharo, Ramgarh, Kurhurbaree, Kargali, Mohpani, and Sawang, other than are given in the Report of the Railway Board on Indian Railways for 1926–27?

    I have no information other than that contained in the Report referred to.

    In view of the widespread public interest in the results of all experiments with regard to the most efficient working of coal pits in this country, could not the Noble Lord see that we are supplied with the fullest possible information in regard to this experiment in India?

    I do not think the Government of India ought to be asked to supply information for the purposes of domestic controversy in this country. It would not be possible to give actual balance-sheets in these cases, because a great many of these mines supply coal to the railways which is not charged for. I can hold out no hope that it will be possible to give statistics of the kind for which the hon. Member asks.

    Is not the Noble Lord aware that, in the Report on the railways of India, no financial results are given whatever?

    If the hon. Member would be good enough to read the statement, of which I shall be pleased to send him a copy, made by the Member in charge when he introduced the Railway Budget in the Assembly, he will see that a very careful account was given of the railways of India including the financial results of the railways as a whole, which are what the public of India are interested in; but the public of India are not interested in the domestic controversies of this country.

    May I point out that my question is directed to securing information, not about the general results of railway nationalisation in India, of which we can get full particulars in the Library, but about the great experiment in the public ownership of coal mines?

    The Report in question does give a great deal of information about these particular coal mines, but it is difficult to give a balance-sheet or statement of detailed financial results, because, as I understand, the railways themselves use a great deal of coal from these mines which is not charged for in the balance-sheet.

    Is not the Noble Lord aware that this is not merely a question of national or domestic controversy in this country, but is a question of national and Imperial development, and that it is for that purpose that we require this information?

    No doubt the information, if it is available, and is asked for in the Assembly, will be given there.

    58.

    asked the Under-Secretary of State for India whether he is aware that the average cost per ton of coal at the State coalfield in Bokharo, Ramgarh, for the year 1926–27 was about 4s. 2d.; and how this price compares with the price at private enterprise mines in Bihar and Orissa, and what proportion of it went to the labourers employed in and about the mine?

    In 1926–27 the average cost of a ton of coal raised in the company and State collieries at Bokharo, Ramgarh, was Rs.2.71 (nearly 4s. 1d.). It is only since the Government took over the East Indian Railway from the company at the end of 1924 that the State has had any direct interest in these collieries. The information asked for in the last two parts of the question is not available. The Indian Coal Committee in 1925 estimated the average raising cost per ton in the Jharia coalfield at Its.5. The hon. Member will, of course, understand that the cost of production must depend largely on the nature of the seam encountered in particular mines.

    If it is available I will get it, but I cannot undertake to make arrangements which would involve unnecessary cost to the Government of India to obtain information unless it is required in India itself. I will supply the hon. Member with any information that is available, but I do not think there is information available as to the number of private enterprise mines in Bihar and Orissa.

    Is it not the case that the mines in question are, from the point of view of results, merely in the same position as any private enterprise mines inasmuch as they were only recently taken over?

    Charities (Registration)

    7.

    asked the Home Secretary whether he has considered the avisability of introducing legislation for the registration of all charities, as is now done for war charities and charities for the blind, in order to prevent collections for unsatisfactory charities, cases of which were shown by the evidence given before the Departmental Committee of 1925?

    The Departmental Committee considered this matter in all its aspects, and after thorough examination came to the conclusion that it could not recommend a system of registration for all charities. I am not prepared therefore to introduce legislation for the purpose.

    Is my hon. Friend aware of the large number of prosecutions which have taken place since this Committee reported in connection with frauds in unsatisfactory charities, and does he not think registration would assist to prevent these frauds?

    I am not aware that the number of prosecutions justifies any change by my right hon. Friend's decision.

    Factories And Workshops (Overcrowding And Inspection)

    8.

    asked the Home Secretary whether he proposes to proceed with legislation for extending to workshops the procedure relating to overcrowding in factories?

    This is a matter to be dealt with in the forthcoming Factories Bill.

    Can the hon. and gallant Gentleman give us any approximate date when the Factories Bill is coming before the House, and can we have an assurance that workshops will be dealt with in the same Measure?

    I said the matter is one that will be dealt with. How it will be dealt with obviously I cannot say. I cannot forecast the legislation for next Session.

    9.

    asked the Home Secretary whether, seeing that factory inspectors are responsible for enforcing Section 116 of the Factory and Workshop Act, 1901, relating to particulars of work and wages, while trade board inspectors are responsible for enforcing compliance with awards of trade boards, and that inter-departmental action results from this dual administration, he will consider the question of amalgamating these duties so as to avoid overlapping and duplication of inspection?

    No, Sir, I am not prepared to accept this suggestion. The duties of the Factory and Trade Board Inspectors are quite distinct and do not really overlap, and the industries covered do not coincide except to a limited extent. The bulk of the work under the Section occurs in industries such as cotton and wool, for which no trade boards have been established, and conversely there are a number of industries for which trade boards have been set up to which the Section does not apply.

    Is the hon. and gallant Gentleman aware that in fact interdepartmental action is taken, and will he see that this redundancy is done away with?

    Textile Factories (Two-Shift System)

    10.

    asked the Home Secretary if he can give a list of the textile factories, with names and addresses, where the double shift of work is in operation under amending legislation passed during the late War?

    I would refer the hon. Member to the answer to the question asked on this subject by the hon. Member for Rochdale (Mr. Kelly) on Monday last. Two Shift. Orders are made under Section 2 of the Employment of Women, Young Persons and Children Act. of 1920, and since that Section came into force, Orders have been made in respect of about 160 textile works. I could not, however, say without special inquiries which of these works are in fact operating the system at the present time.

    Can we have any indication as to the districts, if not the names of the firms, where this two-shift system has been given permission to operate?

    Corporation Profits Tax

    32.

    asked the Chancellor of the Exchequer the amount of Corporation Profits Tax collected during the year ended eth April, 1928; and what amount had been refunded?

    The gross receipt of Corporation Profits Tax in the year ended 31st March, 1928, amounted to £1,968,000, and the repayments to £177,000, leaving a net receipt of £1,791,000.

    Can the right hon. Gentleman say what is the amount of recoverable arrears?

    What does my right hon. Friend estimate will be the further loss next year in connection with the refundment of this tax?

    I have not been specially concerning myself with that preoccupation recently.

    Royal Navy (Fuel)

    59.

    asked the First Lord of the Admiralty whether, seeing that the present dependence of the Navy and a large proportion of the mercantile marine upon imported oil fuel is national danger, he will, through the Fuel Research Board, undertake an exhaustive investigation into the whole question of devising or adapting new methods of utilising coal for steam-raising at sea?

    The importance of utilising coal to the greatest extent possible is fully appreciated, but the prospect of its effective use as fuel in naval vessels is so problematical that the Admiralty would not be justified in undertaking the expense involved by an exhaustive investigation as a charge on Navy Votes.

    Will the hon. and gallant Gentleman apply himself to the question, when he is making investigations, in what respect it applies to the mercantile marine?

    We are closely following all investigations that are being made, but we are not conducting investigations of our own. We think that the development of processes such as this, which offer much hope of commercial gain, are best left to industry.

    Does the hon. and gallant Gentleman not think it sufficiently important to initiate some inquiry into this very important matter?

    Is the hon. and gallant Gentleman aware that the Fuel Research Board was instituted at the request of the Admiralty in the later stages of the War, and is it not desirable that the Department should continue to stimulate its activities in every direction and furnish it with the necessary funds?

    Rubber (Pivotal Price)

    (by Private Notice) asked the Secretary of State for the Colonies whether his attention has been directed to a statement made by the Under-Secretary of State of his Department at Kuala Lampura to the effect that Lord Stevenson and the Advisory Committee were to blame for the raising of the pivotal price of rubber from 1s. 3d. to 1s. 9d.; and whether the Advisory Committee had been consulted before this decision was arrived at; and, if so, whether there is any record of the advice that they gave and what was the nature of the advice?

    I have been asked to reply My right hon. Friend has seen the report in question and has since ascertained by telegraph that the Under-Secretary of State's remarks were incorrectly transmitted; the latter has since issued a statement to the local Press, in the course of which he made it clear that the matter was one in which the Government acted on its own responsibility. I understand that the fixing of the new pivotal price in April. 1926, was done without formal consultation of the Advisory Committee.

    Hebridean Steamer Services (Contract)

    I beg to ask you, Mr. Speaker, whether you are aware that the contract signed between the Secretary of State for Scotland and the MacBrayne Steamship Company stated on the Votes and Proceedings of the 20th April to be printed and laid upon the Table has not yet been circulated and is not yet in the Library of this House?

    I have made inquiries into the matter, and I am informed by the Stationery Office that the papers are in the printers' hands and will be delivered in the Vote Office at Eleven o'clock on Monday morning next.

    Business Of The House

    May I ask the Prime Minister what business he proposes to take next week?

    Monday: Supply, Committee (5th Allotted Day) —Ministry of Labour Vote.

    Tuesday, Wednesday and Thursday until Half-past Seven, Report stage of the Budget Resolutions.

    Thursday's business after Half-past Seven will be announced later; and on any day, if time permit, other Orders will be taken.

    Does that mean that the right hon. Gentleman proposes to get his Report stage on the Budget Resolutions finished by Half-past Seven o'clock on Thursday?

    hope so. We are allotting a whole sitting more than the right hon. Gentleman gave us in 1924, and we are allotting rather more time than we have given at any time during the last six years, except two years.

    Is it not the case that last year, when there was much less controversy, the time that was allotted was 2½ days, and that on those days we ran up to 8.15 instead of 7.30?

    May I ask the right hon. Gentleman whether he does not consider that this is an abnormal Budget and that therefore it is entitled to abnormal time for discussion?

    I gather that the right lion. Gentleman's party is going to treat it as such, and I am perfectly prepared to consider the question. I have given what I considered a reasonable allowance, but I do not steel my heart against more if it is found necessary.

    Ordered,

    "That the Committee of Ways and Means have precedence this day of the Business of Supply." — [The Prime Minister.]

    Reorganisation Of Offices (Scotland) Bill

    Reported, with Amendments, from the Standing Committee on Scottish Bills.

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

    Minutes of the Proceedings of the Standing Committee to be printed.

    Bill, as amended ( in the Standing Committee), to be taken into consideration upon Monday next, and to be printed. [Bill 107.]

    Shops (Hours Of Closing) Bill

    Reported, with Amendments, from Standing Committee A.

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

    Minutes of the Proceedings of the Standing Committee to be printed.

    Bill, as amended ( in the Standing Committee), to be taken into consideration upon Friday, 29th June, and to be printed. [Bill 106.]

    Representation Of The People (University Of Reading) Bill

    "to make provision with respect to the representation of the University of Reading in Parliament," presented by Mr. Somerville; supported by Sir Martin Conway, Sir Alfred Hopkinson, Mr. Morgan Jones, Mr. Ernest Evans, Sir Charles Oman, Mr. Withers, Mr. Cadogan, Brigader-General Clifton Brown; and Major Glyn; to be read a Second time upon Monday next, and to be printed. [Bill 108.]

    Land Values Rating Bill

    "to give to local rating authorities powers to levy Rates on Land Values," presented by Colonel Wedgwood; supported by Mr. Alexander, Mr. Dalton, Mr. Henderson, Mr. Arthur Greenwood, Mr. Kelly, Mr. Lees-Smith, Mr. MacLaren, Mr. Riley, Mr. Snowden, Mr. Trevelyan, and Mr. Whiteley; to be read a Second time upon Thursday, 17th May, and to be printed. [Bill 109.]

    Standing Orders

    Resolution reported from the Select Committee;

    "That, in the case of the Dagenham Urban District Council Bill [Lords], Petition for Bill, the Standing Orders ought to be dispensed with: That the parties be permitted to proceed with their Bill."

    Resolution agreed to.

    Caerphilly Urban District Council Bill

    Reported, with Amendments, from the Local Legislation Committee (Section B); Report to lie upon the Table, and to be printed.

    Selection (Standing Committees)

    Standing Committee A

    Mr. William Nicholson reported from the Committee of Selection; That they had discharged the following Members from Standing Committee A: Major Elliot, Captain Gunston, Sir George Hume, and Mrs. Philipson; and had appointed in substitution: Captain Fairfax, Sir Alfred Hopkinson, Sir Douglas Newton, and Sir Alexander Sprot.

    Mr. William Nicholson further reported from the Committee; That they had added the following Twenty Members to Standing Committee A (in respect of the Racecourse Betting Bill): Mr. Ammon, Captain Bourne, Sir Leonard Brassey, Mr. Brocklebank, Sir Warden Chilcott, Mr. Compton, Mr. Crawfurd, Major Glyn, Mr. Hayday, Lieut.-Colonel Sir Vivian Henderson, Major Hills, Mr. James Hud son, Sir Ellis Hume-Williams, Major MacAndrew, Mr. March, Sir Basil Peto, Mr. R.entoul, Sir Berkeley Sheffield, Mr. Somerville, and Lord Stanley.

    Scottish Standing Committee

    Mr. William Nicholson further reported from the Committee; That they had added the following Ten Members to the Standing Committee on Scottish Bills (in respect of the Betting (Juvenile Messengers) (Scotland) Bill and the Education (Scotland) Bill): the Lord Advocate, Lord Balniel, Sir Henry Cowan, Mr. Evan Davies, Captain Garro-Jones, Mr. Mac-kinder, Mr. West Russell, Major Steel, Mr. Viant, and Mr. Charles Williams.

    Reports to lie upon the Table.

    Message From The Lords

    That they have agreed to,

    Army and Air Force (Annual) Bill, without Amendment.

    That they have passed a. Bill, intituled, "An Act to approve an Agreement concluded between His Majesty and the Sultan of the State and Territory of Johore." [Straits Settlements and Johore Territorial Waters (Agreement) Bill [Lords.]

    Dover Gas Bill [Lords],—That they have appointed a Committee consisting of five Lords to join with a Committee of the Commons to consider the Dover Gas Bill [Lords], and request the Commons to appoint an equal number of their Members to la; joined with the said Lords and they propose that the Joint Committee de meet in Committee Room No. 4 on Tuesday., the 15th of May next, at Twelve o'clock.

    Orders Of The Day

    Ways And Means

    Considered in Committee. [ Progress, 25th April.]

    [Captain FITZROY in the Chair.]

    Amendment Of Law

    Question again 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."

    I do not think I am exaggerating when I say that the present Budget marks the turning point in our post-War fortunes. For a considerable period, we have been struggling in a morass of misfortune, now and again striking better patches of country, but never really observing ahead of us a solid, hopeful path along which our essential industries could move towards a state of prosperity. In my belief, the Chancellor of the Exchequer has this year disclosed to us the beginning of the road out. I, for my part, would desire to congratulate him upon putting a new heart into many depressed industries and opening up much better prospects for them for the future. There are few indeed who could conceive a scheme of such great vision and pure skill, or who would have adopted a plan which has required so much courage to carry out. I believe myself with complete sincerity and a profound conviction that he has imparted a new spirit of encouragement to the country, and its results in the future will prove the value of his foresight and the wisdom of his judgment.

    I do not think that my right hon. Friend will be unduly depressed by the speeches which were made in the Committee yesterday afternoon. I had not the privilege of listening to them, but I have had since the enjoyment of reading them, and the colour and the vehemence of the language which was used by my right hon. Friend the Member for Colne Valley (Mr. Snowden), as I judge, indicated the fear he has of the effect of this Budget upon the prospects of his party. As to my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George), it was indeed a reviving ex- perience to find again the good old catchword that any relief in agricultural rates would go into the pockets of the landlord. It recalled to me memories of the times of rare and refreshing fruits, and indeed bridged over the gap of years which have intervened during which the right hon. Gentleman not only discovered, but disclosed to an astonished world that the landlords of Great Britain were a very severely burdened class and that upon the whole they had not acted selfishly by the country.

    What, in fact, is this Budget going to do? I should have said: What is its intention? Its intention is to carry out plans of tackling a problem, which, I should think, has been more often raised in this House by the right hon. Gentleman the Member for Carnarvon Boroughs and myself than by any other Members who sit on these benches. I think that, of all Members of Parliament, we have most often directed attention to the appalling burden of local rates and taxes upon industry. We did not meet with sympathy, and until now we have never met with success, but, for my part, I do not propose to reproach my right hon. Friend on that matter now, because I realise that he has produced a scheme which I could never have imagined, and which, I think, is conceived on broader and more comprehensive lines than any yet envisaged.

    The right hon. Member for Carnarvon Boroughs is in an entirely different position. He cannot express the admiration which I am sure he must feel at the way in which the Chancellor of the Exchequer is dealing with this problem. He has been responsible for issuing a perfect rainbow of documents to his followers, brown, green, blue and yellow, instructing them upon the politics of the day. I do not know the colour of the document which deals with the rating question, but at any rate he was evidently oppressed yesterday when he was speaking by the fact that already that book has become a, back number and can now be sold only on secondhand bookstalls as a damaged volume. Before I deal with the main subject of this Budget I should like to say a word or two upon some of the smaller issues which are raised. In the first place, let me express my approval, for what it is worth, of the reduction in the Sugar Duty, which will not only benefit a large section of the population but also do something to retrieve the position of an industry which was fast going over the precipice. Of the additional reliefs which are given to Income Tax payers who have a number of children, I confess that I can only take a, detached view. I suppose it will involve me, with other bachelors like me, in paying a little more for other people's children, but I accept that fate not only with resignation but with a certain degree of sympathy and appreciation.

    On the matter of the restatement of the nation's accounts, I think we owe a debt of gratitude to the Chancellor of the Exchequer. The insertion, for example, of the Past Office figures in the ordinary balance sheet of the year's working has tended towards confusion and has never really exhibited a true picture of Me revenue and expenditure of the country. We shall greatly gain in the future if we have the amount that is expended on the Post Office given separately from the rest of our expenditure, and also the amount of revenue from the Post Office.

    I entirely agree with the course taken on the matter of the consolidation of the Note Issue, and I have none of the apprehensions which the right hon. Member for Carnarvon Boroughs expressed yesterday. It is greatly to the advantage of this country that this Note Issue should be consolidated and I see no reason at all why in the regulations which are made in regard to them there should not be adequate provisions for creating elasticity sufficient to servo all the needs of industry and commerce. The right hon. Member for Carnarvon Boroughs complained that the Government were giving away a weapon which they ought to hold for use as against the power of the banks, but I rejoice that they have done so. I cannot imagine any circumstances in which it would be an advantage to the Government to have that weapon ill their hands, and I can conceive many circumstances in which the interests of the country might easily be put in jeopardy by ill-judged action on the part of the Government against the financial institutions of the country. There is this last point, the question of the formation of a Debt Charge. I feel certain doubts on this question as to whether the Chancellor of the Exchequer has provided sufficient money to meet all the obligations he has undertaken. It may be that he has not, but I hope that his "luck will be in" in the years immediately to follow. At any rate, it is an excellent thing that the nation should know what are the obligations of these Debts and have before their eyes the happy prospect of their being paid off in the course of a period of time not too remote.

    I turn now to what is after all the pièce de résistance of the Budget. The distinctions which were pointed out yesterday and the difficulties which were foreseen with regard to the definition of productive industries do indeed raise very troublesome questions. I do not propose to examine these questions to-day, as we shall have further opportunities to examine them on appropriate occasions, but I do not think they present any greater difficulties than were presented to the Government at the time of the 1909 Budget, and I have not the slightest doubt that similar ingenuity will drive away all these difficulties of definition. Let us look at the position of productive industries. People have often pointed to the prosperity of the distributing trades as an indication of the successful conduct of business. It seems to me that there is some slight confusion in the public mind as to why this is the case. The fact is that during these times of depression, when so many trades have been suffering severely, the distributing trades have not suffered nearly so acutely, and for this reason, that the State and local authorities have been spending something over £100,000,000 in the country each year which has gone into the tills of the shopkeepers of the country. The truth is that there has been much more money in the pockets of the people out of work during the last period since the War than at any time before the War and, accordingly, there has been much more expenditure in the shops of the country. The distributing trades are exhibiting a prosperity unknown amongst the other commercial industries of the country. The truth is that you are dealing with this position; that you have not to provide for the distributing trades in the same sense that you have to provide for the productive trades. The distributing trades have been indirectly subsidised by the Government and local authorities of the country.

    They buy all the ordinary things they would purchase whether they are in employment or not. No doubt their purchasing power is restricted, but not so much as in former days during periods of great depression. There has been much more money flowing through the country in the present time of depression than at any time before.

    This is rather an interesting point. The point of the right hon. Gentleman is that the prosperity is in the retail and distributing trades. If that does not reflect the prosperity of productive industries, what is the money spent on?

    There are all sorts of things purchased in the shops which are not at all the product of the great industries of the country. The hon. Member must realise that. There is sugar, and flour, and many other articles which are not at all the actual product of the industries of this country, and the money spent on them does not go in the payment of wages in this country at all. If the hon. Member reflects for a moment he will realise that what I am pointing out is fundamentally true; and there has been a bigger circulation in favour of the distributing trades during the years since the War than ever before during previous times of depression. I will leave the matter there for his contemplation.

    4.0 p.m.

    I pass now to the main problem of the Budget. Undoubtedly its great feature is that an attempt is being made for the first time to save the heavy industries of this country from a position amounting almost to disaster. The main way in which this is being done is by the relief of local rates, but I would beg the Committee not to think that these are the only or even the chief burdens on industry. There are many others which, I think, are being left out of account at the present time. There are, for example, all the payments which are made in respect of social services. When I talk of social services, I do not mean merely what is paid in Poor Law, but in national health insurance, unemployment insurance, workmen's compensation and the widows' and orphans' pensions. All these things are a vast burden upon industry, and, of course, do not come at all within the purview of this Bill. But reflect for a moment what that burden amounts to. Since the year 1914, that burden has increased by over £125,000,000 a year, and the great bulk of the money has to be found directly by industry. None of that is really being touched by the Bill, so that the case for the relief of industry is something very much greater than the presentation of this Bill involves.

    Let me put it in another way. I find, from the Report of the Government Committee upon Industry and Trade, that the burden of social services upon industry in this country amounts to between 2 and 3 per cent. of the value of the output. Anyone who knows how very small is the margin for profits or new equipment for business in an ordinary industry will realise what the burden of that becomes. To put it in a still stronger light, let me remind the Committee that the burden we bear in this country in respect of those services is two and a-half times that which is borne by Germany, five times that borne by France and 20 times that borne by Belgium or Italy. The Committee will realise that those are our rivals in trade and during all this period of depression our industry has been meeting their competition in foreign markets burdened with these enormous imposts, which there was no way of avoiding, and which have had to be paid for by industry.

    I turn now to the immediate problem of local rates. I do not propose to dwell long on this matter. The figures which were given by the President of the Board of Trade yesterday, I think, illuminated the whole topic as clearly as it could be possibly done, and while I have in my mind many other comparable figures, it would, obviously, be quite improper to delay the Committee with them. There is only one point in his speech to which I venture to draw special notice. He referred to the fact that the local rates in this country amounted on the average to a charge of 4s. a ton on steel. Although I suppose he has better means than I have of arriving at correct figures, I should have thought that that figure was low. At any rate, the Government Committee who sat upon this subject came to the conclusion that it was 6s. per ton which, I think, would probably be nearer the mark, But even if that be the true figure, it does not really exhibit the problem in its true light. It is the abnormal places that most require the help that is to be given by the Chancellor of the Exchequer. There are many places, for example, with mixed trade, where a particular industry has a certain amount of unemployment, and that is borne with comparative ease by the rest of the community. But in great centres, where everybody is engaged in the same trade, which is in a state of depression—and there are many in this country at the present time—then you realise that any unemployment means a large amount of unemployment, because they are all in the same trade, and, in the end, the burden grows and accumulates, and is borne more and more by comparatively few, whose costs are put up to a far higher degree than what the President of the Board of Trade described yesterday.

    Take, for instance, Sheffield, where, as everyone knows, unemployment reached very severe figures, there the cost per ton of steel for local rates has been, not merely a figure of 4s. or 6s. a ton, but as high as 17s. 6d. to £1. Consider what happens. As unemployment increased, fewer people bore the burden. Others went down, and added to the figure, and still fewer industries were left to bear what is a cumulative burden. In fact, what we have been doing is that, finding a man drowning in the water, instead of throwing him a lifebelt, we have thrown him a sinker, with the result that many trades have gone out of business which, in other times, in better circumstances and with better organisation, would still be serving the country. I value the proposal under this scheme more on this ground than upon any other, because it is obvious that where the costs have gone up so enormously as I have described, if you give a relief of three-fourths of the rates, you will not only immediately help the people who have been worst hit, but, at the same time, you make it possible for other industries to come back, and you have a wider spread of the whole cost of local rates, with the result of not merely reducing the rate by three-fourths, but, in the end, by very much more.

    The subvention to railway rates is also, I think, a proposal of very great merit. One of the greatest handicaps from which trade and industry have suffered in the last few years has undoubtedly been the very high railway rates, and the relief in respect of the carriage of raw materials in the heavy industries of this country will be of the greatest possible service to those industries. I pass from that to say that it is a mistake to suppose that the postponement of these reliefs until October next year, is going to have no immediately good effect upon industry. I am not now referring merely to the psychological effect of the encouragement given to people to keep going on longer than they might otherwise endeavour to do, but I am taking it from the sordid and practical aspect. Supposing persons in some difficulties want further advances from their bank. It will greatly affect the minds of bankers to know that by the end of next year, from figures which can he shown in a schedule, their business will greatly appreciate, and that the borrower will be able to carry on then in very much better shape than now. Or, again, take the case of people who want to raise capital, or get debentures on their business taken up. It is obviously what one would call in the market "a bull point" for the borrower that he is able to show that by the end of next year his business will he earning substantial profits. Accordingly it is an entire error to suppose that the postponement until October next year is going entirely to frustrate the supposed object of this Budget.

    The fact that the taxation to provide the funds for this great scheme can only be obtained by a tax on petrol is in itself a misfortune. I do not think we can conceal from ourselves that it is a great pity we have to have recourse to a commodity which is more and more being used by very large numbers of people in this country for the purposes of their innocent enjoyment. I think, in other circumstances, if petrol were at the price it was at one time, it might be something of a tragedy to some of these people to meet this new impost, but I am sure that if they could have got rid of the power tax upon their cars, which, as the Committee must have gathered from a petition to this House, they very seriously grudge, and if it had been put in some other shape, I believe they would have been much more reconciled to the new burden which they have got to bear. The reason I say that is this: It is perfectly plain that the power tax upon motor ears is an inequitable tax. I am not now dealing with another matter, which is a larger one, and to which I shall come in a moment, but it is an inequitable tax, because if you take the man who is only able to use his motor car—as multitudes are only able to use their cars—really over the week-end, he is taxed much higher in proportion than the man who is constantly using the road. If that tax really is what it is meant to be, a method by which the revenue to keep the roads in order should be raised from those who most use the roads, it is perfectly clear that the tax is not operating at all according to the original scheme, and I remember a speech of my right hon. Friend the Chancellor of the Exchequer in which, I think, he admitted that very fact.

    On the other hand, a petrol tax puts the burden exactly where it ought to be, because the petrol used is a correct measure of the use that is made of the roads. It applies both in the case of weight and speed, and also to the occasions of use, and, accordingly, it is the fairest way you can select for taxing the people who use the roads for the maintenance of the roads. But there have been objections stated to this change. One of the objections stated was that you could not administer a petrol tax without doing great injury to certain interests. How futile that objection was has been shown by what the Chancellor of the Exchequer has done, because he has just swept that all away, and he has proceeded to make a tax which he regards as fair, and he has done exactly, as I understand his proposal, what the preliminary Report of the Departmental Committee which sat in 1920 suggested, namely, that the tax upon petrol should be a flat rate. Again, objection is taken to the change from a motor-power tax on the ground that this tax afforded protection to the British-made car, without which the British-made car could not live as against the American importation.

    That, I understand, was the view put before the Committee yesterday by my hon. and gallant Friend the Member for Chatham (Lieut.-Colonel Moore-Brabazon). Upon a matter of this kind, I should hesitate to offer any contradictory view to that which he holds, because he is a well-known expert on these matters, and has had considerable experience at the Ministry of Transport.

    But I have authority for my opinions even more formidable, I think. I have the authority of Mr. Morris and Sir Herbert Austin—who, between them, I should think, make two-thirds of all the light cars in this country—to say in this House, that not only are they not against taking off the power tax upon cars, but that they would welcome it, and they would ask Parliament for it. Only a few days ago, Sir Herbert Austin wrote an article for the "Auto-Car," in which he made it perfectly plain that he regarded the present taxation of power as being a great handicap to the motorcar industry. These gentlemen do not believe they have anything to fear from taking off the power tax as against the competition of American cars in this country, and they see in it an absolute essential if they are to make any expansion in our Dominion markets.

    I should like to explain why it is that the power tax prevents the British motor trade from making any advance, not only in places like Australia and NOW Zealand, but in all the new countries of the world. It is simply this: Since our tax is on power, the British car makers have devoted their efforts to making a car which would attract as little taxation as possible, and accordingly they have made a car which is suitable for British roads, for the easy conditions on British roads, but, which is very inadequate upon the rough roads of new countries. They have made a car which has a small bore and a long stroke, but all the cars which are operating in America and these other countries are cars with a large bore and a short stroke, which, they tell me, at once gives an easier running car, which may not be very important, but which, on the other hand, enables them to provide a car with much more power. Somebody says, Why does not the British ear-maker make a separate car for the Australian market? It must be obvious that, if he does so, he loses all the benefits of mass production and his entrepot charges are greatly increased, and competition, which is difficult enough already with the American car, enjoying an enormous home market, would become impossible in these circumstances. Accordingly, I believe, from my experience in the Dominions, that if we are to have any success in the motor car business outside our own country, we have to make an alteration in this form of tax.

    It is surely an impotent thing to say to-day that we are going to be kept out of the markets of the world because of the particular way in which the Government put a tax on vehicles. We cannot be sure that we cannot find some other method of taxation which will enable us to enjoy as fair a chance in the markets overseas as our American rivals. Let me tell the Committee exactly what it means. Are these markets worth while? All I have to say is this, that in Australia last year they bought 104,000 motor cars, of which only 18,000 were British, in spite of the fact that we have a 20 per cent. preference in the Australian market. Go to New Zealand, and the story is the same. They bought last year over 13,000 cars, of which only 27 per cent. were British, although we have a preference in the New Zealand market of 25 per cent. And if you ask why this is, you will get the universal answer—you will also get some smaller things mentioned, that are easy to deal with—that the British cars are not equipped with sufficient power. I am sure that that has been the experience of all who have visited the Dominions, and the situation is one which it is imperative that we should remedy.

    These American cars passing through the streets every day are the very best advertisements for American business. Not all the money we can spend in advertising British goods in Colonial markets is nearly equal to this advertisement of American ears constantly presented through the streets, living in the eyes of the whole population all the time. Everybody asks you—I am not exaggerating when I tell the Committee that everybody in these countries asks—Why is it that British makers cannot manufacture a car which will compete with the American ear? A British visitor to these countries feels it a positive affront that every day and all day this ostentatious demonstration of American superiority and efficiency should be going on before his eyes, but, believe me, the Australians and the New Zealanders, who are 97 per per cent. British, feel the affront even more than we do, and they much more poignantly ask that some remedy should be found for this quite abnormal situation. It has many repercussions. If you take our trade with these countries, you will find that they are our best markets in the world. I am not meaning per capita; I am meaning in the bulk. If you take Australia to-day, it is buying £65,000,000 worth of our goods in a year, and New Zealand is buying over £20,000,000 worth.

    I see in certain brochures from the Liberal party that it is thought that the Colonial and Dominion markets may be neglected because they have not very large populations.—[AN HON. MEMBER: "No."]—Yes. It is pointed out that the populations are small, and we are directed to look to the great populations on the Continent, But let me point out that Australia and New Zealand, with only 7,500,000 people, buy from us in a year, in bulk, more than the 150,000,000 people to be found in Germany, France, and Italy all put together. Why should we pay attention to these markets in preference to those of our Dominions? This demonstration by America in the shape of motor cars is having a detrimental effect—I say it without question—upon our trading prestige, our commercial prestige, in these countries. I have given you the figures of what our trade was last year with Australia and New Zealand, but it is worth while looking at the trend of the trade, and you will find that during the last five years, while our share of Australian imports has gone down from 51 per cent. to 43 per cent., the share of the United States of America has gone up from 18 per cent. to 24 per cent. Exactly the same thing applies to New Zealand. While our share of New Zealand's imports has gone down during five years from 01 per cent. to 48 per cent., the share of America has gone up from 9 per cent. to l9 per cent. That trend, I am assured in my own mind, will steadily go on and grow unless we are able to demonstrate to our people overseas that we are as fit, and as capable, and as efficient as are our cousins in the United States of America.

    What are we to do about this? hoped, before I heard the Chancellor's statement, that we would be able this year to get the tax transferred from motor power to petrol, but I should certainly realise, now that 4d. has been put on petrol for another purpose, that it is quite futile to ask that something more should be added in order to save this trade with our Dominions, at least just now, but I am glad the Chancellor of the Exchequer has not closed the door. Sir Herbert Austin, writing to the newspapers yesterday, suggested another method of taxation, which, he said, would help our cars in Dominion markets, to wit, that the taxation should lit upon the capacity of the engine instead of upon the power. He suggested indeed that instead of 21 per horsepower, the taxation should be £1 per 10 cubic inches capacity of the engine. I do not know whether or not this is a good method of taxation, I do not know whether it would be better than the present method, but at least it is put forward by an expert on motors and one whose whole interests in commercial life are invested in this motor car business.

    But I say this, that it is the duty of the Government, in view of the circumstances which I have presented to them, to discover whether there are other ways of levying this taxation, in order to avoid the vast loss from which we are suffering at the present time. It is not merely a present loss, because if any of us were asked what is the most promising trade for the immediate future, should we not all say the motor car trade? It has much more infinite possibilities than any other trade of which we know, and if you think of all these young countries which are growing up, which require motor transport, and which indeed are requiring it as rapidly as they can get it, you will see what a tremendous market there is awaiting us if we only take advantage of our opportunities. If we do not do something to alleviate the position, then we shall undoubtedly arrive at the disastrous condition which we shall deserve. Of one thing I am certain, and that is that just as the strength of this country ultimately rests upon the united power of the British Empire, so, in the long run, the trade of this country is going to depend upon the reciprocal relations which we establish with our Dominions.

    The right hon. Gentleman the Member for Hillhead (Sir R. Horne) has dealt at some length, and quite properly, with the effect of the new imposition upon the motor trade in this country, both internal and external. I do not propose to follow him into a discussion of that subject, but let me assure him in disposing of two purely party points which were quite gratuitous in his speech—one an inaccurate statement in regard to the Liberal party's attitude to trade in general, and the other with regard to a publication that came from a Committee of Liberals, out of which, by the way, the Government have not found it improper to make some very valuable extracts—that we heartily agree with him, and I think with all those who have spoken in this Debate, as to the great importance of relieving the rating burdens on our producing industries. He and the right hon. Member for Carmarthen (Sir A. Mond) are not the only persons who have brought this question up again and again in the House of Commons. I would remind the Committee that our colleague the late Mr. Trevelyan Thomson used to repeat it once a week. He used the illustration of Middlesbrough over and over again, and there was no more striking illustration to be found in the country. I myself have drawn attention to the effect on some of the producing industries on the North-East Coast, and I do not wish to repeat to the House some of the illustrations I gave, but on more than one occasion I pointed out that the increase of rates since the War has represented in the building of tonnage on the Tyne, on the Wear, and on the Tees, no less than 7s. per dead weight ton—very often enough to put our shipbuilders out of competition with those who build in Rotterdam, Stettin, or Scandinavia.

    There is no doubt that the great burden on the producing industries, in its increase, synchronising as it has with the great slump which came during the period of deflation, has had more to do than any other external cause with the depression in the great manufacturing areas of this country. That depression is local, not general. The right hon. Gentleman pointed out, quite truly, that in the distributing trades there has been a remarkable degree of prosperity, but I doubt very much whether he has given a full explanation of that prosperity. It is not only prosperity in the multiple shop companies and among the small shopkeepers and the merchants who distribute to the wage-earning classes, but there have been amazingly large profits made in establishments that never see a working man or woman. I need only refer to the re-building of Regent Street and to what has happened with all the companies up there to draw attention to the fact that the profits of the distributing trades have not depended on the distribution of the dole or upon any of those ancillary assistances to the wage-earners or those who are not able to earn wages.

    The full explanation of the profits in those industries has yet to be disclosed, but I think there is one explanation to which we certainly need not shut our minds, and that is that in the distributing trades there has been a process of amalgamation going on with great success all over the country. There is, first of all, the gigantic amalgamation in the cooperative organisations. Then there are the multiple shops with their outposts in every town of any importance. They have, by superb organisation, by skilful buying, and by being free to purchase what they require in any of the markets of the world, without import duties, been able to stock their shops cheaply and to make their goods attractive to their millions of customers. The effect of this Budget upon those distributing trades will not be small. I think it will be extensive, and I propose to point out the directions in which it will fall most heavily.

    Let me, in the first place, say that, while we are all agreed that the rate burden is too heavy for the productive industries of this country, we are not all agreed as to the best method of relieving those industries. What is in controversy over this aspect of the Budget is how you are to do it. The Government have chosen one way, which we believe to be wrong. We think that by picking out, as they have done, certain specified industries they will undoubtedly do injustice to other industries and other interests. It is impossible for them to think of relieving these picked industries without thinking where the money is to be raised. Where is the three-quarters relief in rates to come from? It must come from those industries which are not within the productive class. It must come very largely from the householders, the shopkeepers and the general taxpayers of the country. I am quite sure that none of the right hon. Gentlemen opposite would for a moment use the loose language in regard to the Exchequer paying, which one hears so frequently on the platform. When the Exchequer pays, it means that the taxpayers pay. It does not mean that the Chancellor of the Exchequer provides the money out of some mysterious fund. It means that he has to impose taxation. The very tax to which the right hon. and learned Member for Hillhead has referred is an example of the way in which somebody is having to pay for the relief which is to be given in these productive occupations.

    Who are the people who will have to pay? A great deal will be obtained at the cost of the motorists. The right hon. Gentleman referred to the motor industry as though it were one which depended purely upon those who enjoy motoring at the week-end to get fresh air and refreshment, who go to and fro between their own homes and more attractive places, who visit golf courses and the like, and who find an entirely new amenity added to their lives because they have at their disposal motor cars of the light type. That is where the main increase is coming from, but it is not the only source. This impost falls upon the owners of 274,000 commercial vehicles. It means really that this duty, this oil tax, or whatever it is to be called, falls upon some very important sections of commerce. These 274,000 commercial vehicles are not owned merely by companies who trade, say, between Manchester and London and advertise themselves like liners or cater for the carriage of goods and pick up where they can like tramps. They belong to very large numbers of companies, organisations and concerns which are just as much entitled to the benevolence of the Chancellor of the Exchequer as any of the great productive industries. This is going to be a tax upon their raw material of motive power. The Chancellor of the Exchequer knows perfectly well that there is no impost which does more harm than an impost upon raw material. He would not for a single instant think of putting an impose upon raw cotton, raw wool or iron ore. Motor carriage has now become just as essential to a very large number of concerns as the raw materials which I have mentioned are to their respective trades.

    The money has to he found somewhere. Where is it to be found? The right hon. Gentleman is going to get most of this money by way of a tax upon oil, and he is also going to add to his funds for the purpose by diminishing his Sinking Fund; by taking some other sources of national income which are not annual revenue, in order to swell the amount which he can distribute. I should like to discuss the means by which he attempts to do this. He does it not with the idea of giving direct benefit at the present time to these particular industries but of giving a postponed benefit. For 18 months at least there will be this taxation in operation without any immediate benefit being given to the productive industries. It is true that the prospect of that relief being given in October, 1929, will undoubtedly weigh heavily in the minds of those who have been financing many concerns which are in a precarious condition at the present time. I wonder whether the right hon. Gentleman has seen the statement which has been published this morning from the Monmouthshire and South Wales Coalowners' Association. They are pleading for some immediate assistance or for some immediate consideration of the plight into which their trade has fallen. They say:
    "The loss on the working of the South Wales mining industry is at present at the rate of over £3,000,000 per annum. There are 70,000 men already unemployed, and the number is daily increasing. During the past 15 months nearly 60 collieries have closed down, several concerns have none into liquidation and nearly all are in the hands of the bankers. Whatever relief is to he granted should be immediate, and the urgency of such relief to the export trade brooks no delay."
    It is the immediate necessity of giving relief to these districts which the Government is postponing until some later season. Is it possible that in South Wales, on the north-east coast and in some portions of the West of Scotland these concerns will be able to survive for 18 months, without assistance? Surely, some consideration must be given to the immediate necessities which we know, in these great coal areas in particular, are so urgent. Unless assistance is to be given now, not only will these industries drop quite certainly into the hands of the mortagees, but even the great banks themselves, which are the most necessary agents in national enterprise are bound to be very cautious in their financing during the next 18 months, when reorganisation and reequipment are most necessary, and as a result real damage will be done to these industries.

    I have pointed out that other trades and other commercial interests are going to suffer by the distribution of this new charge. I would not like to leave that aspect of the problem without pointing out that the way proposed by the Chancellor of the Exchequer is not the only way in which the local authorities can reduce their expenditure. These local authorities are great self-governing Parliaments. In many of our great towns they assume almost the dimensions of our own Parliament, and they have control of a considerable part of their own local expenditure. It is because the spirit of extravagance during the period of inflation somehow or other infected them, just as it attacked this House and private individuals outside, that a great many local authorities are having to go through the painful process of cutting down, economising, scraping and scrapping in their local organisations. If we are to deal with this problem we must not think of it only by way of giving block grants to these local authorities, because if that is done injudiciously it will tend to extravagance rather than economy. I would beg of the Minister of Health to devise some means by which to put a premium upon economy and not a premium upon extravagance. If the scheme of the Chancellor of the Exchequer does not meet with general approval, may I ask whether the Government have considered other means of relieving the burden upon the local authorities?

    The burden upon the local authorities?

    Yes. Have the Government considered making the charge for the able-bodied poor a purely national charge? Have they contemplated making a larger contribution to road expenditure? On the contrary, they have taken some of the available road funds for the purpose of providing this pool. Have they devised any scheme for rate abatement in those areas where industries, in order to keep going, in order to keep together their own workmen and their own organisation for external trade, are working short time? Cannot they devise the means whereby there can be an abate- merit in those short-time working industries? One, in particular, which comes to my mind is the cotton trade. If the cotton trade, by working short time in order to keep their men and women employed, are to be rated just as though they were working full time, it stands to reason that they cannot survive the period of depression without going deeper and deeper into the mire. I would ask the Minister of Health to see whether he cannot make the rates have some direct relation to this short-time employment, which is one of the best ways of keeping our workpeople together in times of bad trade.

    I should like to offer some remarks on the Chancellor of the Exchequer's sympathetic reference to the railways. He, quite naturally, takes a lively interest in the preservation of that vast industry, in which about £1,000,000,000 of British capital is invested. All classes of the community hold railway shares and debentures, and there are a very large number of men who are directly dependent upon that industry for their employment. But if the railways cannot keep themselves alive on their merits, if they cannot by cheap carriage retain traffic, then the right hon. Gentleman will find it a very costly procedure to make up the difference by doles or artificial arrangements. I do not believe that he can do it, and lie ought not to try to do it. It. is a remarkable fact that when the right hon. Member for Hillhead was referring to the industries of this country and railway rates, he overlooked one rather startling feature. The most depressed areas, with the exception, possibly, of that immediately surrounding Sheffield, are quite near to the seaboard. Some of them are actually at the ports. It is not expensive carriage which has hit them hard. It is not railway rates which have depressed them. They are not dependent upon railway rates. They can get cheap sea rates, which are far too low. Let me give a few contrasts to show the difference in rates between seaborne and rail-borne traffic.

    I want to point out the difference between the cost of car- riage on the railways and by sea. I looked up only this week the cost of the carriage of sugar to the United Kingdom from Mauritius, 6,700 miles, and I find that it is carried 24 miles for every penny of freight. A railway company at the cut rate between Bristol and London only carries it three-quarters of a mile for one penny. What chance have those who manufacture in Bristol in competing in the London market with those who carry on a certain degree of refining in Mauritius when there is that vast difference in the cost of carriage? The right hon. Gentleman cannot get over that. It is one of the facts of nature, and it is no use struggling against it. Powerful as he is, he cannot alter it. Take flour. Flow-which is milled in Lincolnshire can be brought by rail 107 or 110 miles at a cost of 11 lbs. for one penny, while flour milled in the United States of America comes by ship at the rate of 10 lbs. for one penny. Take coal, and you will find almost exactly the same contrast between sea-borne and rail-borne charges. From some of our best coal areas the cost of carrying coal by sea is about one-tenth the cost of carrying coal a short distance by rail. Take iron ore, the raw material of the very industries which the right hon. Gentleman aims at helping. Iron ore can be brought from Algiers to West Hartlepool, 1,900 miles, at a cost. of 6s. 6d. a ton, while iron ore carried from West Hartlepool to Darlington, only 15 miles, by rail costs exactly one-half of that, and if it has to be taken on to Leeds it costs 6s. 2d. These contrasts explain to a large extent why it is well nigh impossible in the inland areas to keep alive the industries which depend upon the cheap carriage of raw material.

    There is one direction in which the right hon. Gentleman will help the seaboard areas if this scheme goes through. There will be a reduction of their dock dues. That will be of some assistance. I do not know how much it will be, but it will have to be a very considerable drop if it is to enable a port like London to compete with a port like Antwerp. May I be allowed to commend to the Chancellor's consideration the enormous advantage which comes from a big turnover even in a port? The port which has a very large transhipment trade can obviously do business far mere cheaply than the port with a small transhipment trade. I beg the right hon. Gentleman, when the occasion arises, to prevent some of his colleagues from destroying our transhipment trade in the Port of London.

    I would like to say, with regard to industry, that these artificial arrangements made by Parliament, whether by way of altering our tariff system or making a change in the incidence of local rates, or by the imposition of taxes, of themselves are of comparatively little moment—I do not say that they are to be despised; far from it, for they are of great importance—compared with one or two things which can be done within these very industries themselves. Let us be quite frank in dealing with some of them. Take the iron and steel trade. With the exception of cotton there is probably no industry in this country which was so inflated during the boom period. The very painful process of squeezing out the watered capital has to be gone through, and unfortunately a great many people will suffer severely in the process. But until we get on to a rock bottom capital basis, we shall not be able to return to prosperity.

    Then a large number of our big staple industries require new plant. They will not be able to get new plant unless they can get cheap money. They must be able to borrow on an economical basis. They want more capital, both in the sense of money and in the sense of machinery. They must be able to buy the best and the latest, wherever they can get it, whether at home or abroad. Above everything they must have the best management that the brains of the country can supply. The time when the old proprietors can fit in their sons because they are their sons and not because they have the capacity to run great concerns, has long since passed. A more drastic clearing out of incompetent men at the head of great concerns will be of boundless benefit to the trade of this country. There is no room for incompetence in any walk of life.

    Finally, anything that can be done to add not only to the skill of workmen, but to their contentment and the feeling that they have an equal share and an equal degree of knowledge in the industries in which they are engaged, will have a boundless effect for good in nearly all our great staple industries. One of the things essential for the expansion of our industries and the improvement of their condition is that they should be able to obtain cheap money; the rate of interest imposed on them should not be too high. Some of them will require assistance during the next 18 months or two years. What have the Government done in that respect? There is nothing that they have done with regard to rates which will be of such wide-reaching benefit to the whole of the industry and commerce of the country as a lowering of money rates. The Chancellor of the Exchequer had it within his power to do it. I hope that he will not resent my now criticising somewhat freely his dealing with our redemption of debt.

    I hope my right hon. Friend is going to tell me how. That is what I am anxious about.

    I shall not shirk that task for a moment. I shall point out the directions in which, by his policy during the last four years, he has failed to lower our money rates. Unfortunately for him and for us, he had a deficit at the end of his first year. He had a deficit at the end of his second year and at the end of his third year. In every one of those cases that diminished the Sinking Fund which was available for redemption of debt. The effect of that was very marked. I do not hold the right hon. Gentleman responsible entirely for the first year, as he was a residuary legatee, but the others he was directly responsible for. What happened? In those first two years—

    There have been only two deficits. In the first year there was a surplus which my right hon. Friend the Member for Colne Valley (Mr. Snowden) has been boasting about. In the second year there was a deficit owing to the coal subsidy, and in the third year a deficit owing to the coal strike. This year there is a surplus.

    I do not agree that there was a surplus in the first year, for the right hon. Gentleman took into his revenue account a good many capital sums which had come into his pocket but ought to have been used for redemption of debt and were originally paid for out of capital. In the second and third year the figure was very much larger than was admitted. This year, I venture to say, the right hon. Gentleman has not a surplus, and for the very same reason. He has not a surplus out of current revenue, but only because he counts as current revenue some of the capital realisations which he has been able to indulge in in the last 12 months. They ought to have been used for redemption of debt. Now he has a record of a series of deficits. He wants to know how he could have altered it. I shall give two instances. One was the coal subsidy. Who was responsible for that? His Majesty's Government; the Opposition were not and His Majesty's Government were. They could have said "No," and if they had said "No" there would have been no more evil consequences in that autumn than there were in the year following.

    If the right hon. Gentleman regards a strike as inevitable, I have nothing more to say on that point.

    Really the right hon. Gentleman does not dispose of the thing by merely saying that it would come a year earlier. Suppose that it had, we should have been £23,000,000 in pocket, and that is not a stun which we can afford to despise. The right hon. Gentleman had as much responsibility as any Minister of the Government for the fact that the strike came when it did. I do not say that it was entirely unavoidable at that moment, but if it had come a year earlier and without the expenditure of the subsidy we should have been £23,000,000 richer to-day, even if the strike had lasted as long. Whatever the causes are, let us go through the figures. The right hon. Gentleman must not smart under this examination, because I do it with the coolness of an auditor. This is what actually happened. In the first two years he had £110,000,000 of nominal Sinking Fund—that is adding the two years together. There were two deficits to be deducted from that—I think there ought to have been three—of £50,000,000. That left him with, roughly, £59,300,000 in Sinking Fund. While that made an apparent net debt reduction, he had not allowed, as he admits now, for the interest on Savings Certificates, which were not provided for out of revenue in the course of the year. That ought to have been provided for and it is going to be provided for. He admits the error and is going to make up for it.

    Then there was the sale of assets in those two years. [Interruption.] I am not saying who was responsible for it. I am giving an analysis and the reason for it. No one need be uncomfortable about that. There was in those two years a sale of assets, £40,000,000, leaving in all a deduction to be made from the net apparent debt redemption in the two years of £71,000,000. In other words, we work out at £11,000,000 on the wrong side in the matter of redemption. Actually we were £11,700,000 more in debt at the end of the year. I am taking the real debt, not the nominal debt, the artificial debt which my right hon. Friend the Member for Colne Valley (Mr. Snowden) referred to. We were over £11,000,000 worse. That is not the only thing. Owing to the way in which the accounts are drawn, the capital portion of the United States debt redemption, which is naturally not available in the London market for us here, came to £10,000,000 and is included. There were Trade Facilities guarantees of £20,000,000 issued during that period. There was Local Loans Stock issued of over £40,000,000 during that period. So that the total, when you allow for additional guaranteed loans for Ireland, provided you with a sum absorbed by the Government in these various ways and for these various purposes, drawn largely from the gilt-edged investor, of no less than £93,000,000 more than the sum which we had anticipated he would be able to repay.

    Take the next year, the year just closed. I take exactly the same figures in the same classification, and what, we find is this: Deducting the deficit of these two years and not interfering with the controversial deficit that I think I see in this year's figures, but only the admitted deficits, there remains £65,000,000 net apparent debt redemption in three years. But then we have to provide once more for the Savings Certificates interest not provided for, £40,000,000; sale of assets, about £15,000,000, as far as we know. We have not had the exact figures yet. Perhaps the right hon. Gentleman will give them to us. Then there are some other items represented, which come to no less than £35,000,000. In other words, during the last year, instead of there being a reduction of £65,000,000 in the National Debt, or the redemption of debt by that amount, the total amount is only £1,000,000. What has been the effect of that when you take these other things into account? It has had a direct effect on national credit.

    Do not let the right hon. Gentleman imagine that it is easy to dismiss these matters lightly. You can measure them by the actual quotations on the. Stock Exchanges here in London and in New York. I am sure the Committee knows that if there is a larger amount of money available for investment in gilt-edged securities than the amount of securities on sale, they naturally bring a larger price. In other words the rate of interest paid by the Government is lower. The higher Government stocks are, the better it is not only for the rate of interest in which they are involved, but for all the industries which are dependent on new money for the extension or re-equipment of their enterprises. In fact, nothing could be of greater benefit to the industries of this country than a lowering of the interest rates for the money which they require. The right hon. Gentleman leads the way on that. These real markets are not political. After all, the Stock Exchange and banks of London are not political, and the Stock Exchange in New York is not political; it values these things as it finds them; it goes to the root, and says, "What are they worth?" and pays accordingly. Sellers have been fairly free lately. What is the result?

    We are able to see what has happened in the last four years. During the last four years the credit of nearly every country in the world has improved. There are exceptions. China is one, Chile is another and New South Wales is a third. They can all be accounted for in their own several ways. But with these exceptions there has been an improvment in the credit of all these various countries. The country enjoying the finest credit in the world now, according to the quotations on the Stock Exchange, is the United States of America, and very naturally, for that country is overflowing with wealth; there is a great demand for gilt-edged securities and a limited supply, and a very active and potent Sinking Fund.

    5.0 p.m.

    It is only recently that Americans have begun to invest outside their country. They have recently invested in the Funding Loan. They have done so to the extent of about £5,000,000, with the result that the Funding Loan has gone up three points. What would have been the result if the right hon. Gentleman had gone on the market to buy £50,000,000 of Government stock? The right hon. Gentleman must be well aware that there are many illustrations of that kind and they ought not to be lost on the high authorities who are in control of our national finance. I have said that you have the United States of America at the head of the list. They have been able to reduce the yield on loans which they have floated by 95 per cent.—a very considerable improvement. Then take the case of Holland and its internal loans—Canada, Switzerland, Sweden. All these have improved their credit. They have reduced the rate of interest on their Government stock. They have been able to make their flotations on better terms than ours and they have been able to do it at a better rate than the United Kingdom.

    The right hon. Gentleman shakes his head. I am bound, therefore, to read the figures to him. I take first Canada. The reduction of the yield in the case of Canada is 55 per cent.—a very considerable sum. The improvement in the credit of Switzerland may he measured in the yield of their stocks—1.45 per cent. Sweden is 8 per cent. and United Kingdom 45 per cent. If the right hon. Gentleman thinks these figures are not accurate, let him employ the Financial Secretary to the Treasury to check them before the Debate closes and let us see if they are correct. He knows perfectly well that they are reliable. They cannot be disputed. They are taken from the quotations of the leading stocks of these various countries and there is not one which does not show that United Kingdom credit has not improved as rapidly as the credit of the other countries which I have quoted.

    Does the right hon. Gentleman take into account in arriving at this credit basis, the net yield on securities? Does he take into account the fact that the United States have been able to reduce taxation and, therefore, the net yield on their securities is higher than in this country? He must not compare gross yields with net.

    Certainly, we are bound to compare like with like. That is the only way to do it, but if the hon. Member goes into the figures he will find that what I have said is correct. There is no controversy about the facts. The one thing which is clear is that the credit of this country has not improved as rapidly as the credit of the other countries I have quoted. That is the really important fact. I go further and say that you can if you like run down the whole list—Denmark, New Zealand, India, Spain, Argentina, Siam, Norway—large and small, take them all alike and you will find that the same thing is true. With the exception of China, Chile and New South Wales, the improvement of our credit has been slower than the improvement in the credit of any other country. It is no satisfaction to me to point out that the credit of our country is not as good as it might be but we are bound to draw lessons from that and we are bound to draw attention to the fact that unless the Sinking Fund is made operative and effective, unless these neutralising influences are brought to an end, the credit of the country will continue to wane. One of the best things which the right hon. Gentleman could have done, would have been to have lowered expenditure. The means of doing so were perfectly open to him. By spending less, by entering into commitments in a much smaller degree, by getting rid of such absurd subsidies as the sugar beet subsidy—running away with nearly £5,000,000 a year—and a good many other things which have been pointed out to him from time to time, the right hon. Gentleman could have made his revenue exceed his expenditure. That is the only way in which the Sinking Fund can do any good.

    It is only right that the Chancellor, in reforming the accounts of this country, should take the trouble not only to take out two or three controversial figures like the Road Fund and the Post Office, but that he should, if he is reforming the accounts, show in the accounts what is capital expenditure, and what is annual expenditure and what is capital income, or return of capital, and what is annual income. I beg of him to consider this matter and I have no doubt that before the next Budget he will be able to let us see clearly what is to he done, and that his revenue is not swollen realisation of assets but is, without exception, revenue raised in the normal way through the taxing authorities. If the debt is not reduced, the cumulative effect of that Sinking Fund which the right hon. Gentleman announced on Tuesday will be reduced. He is actually reducing its effectiveness below the Baldwin Sinking Fund level. If he has to pay more for his Treasury Bills, that will reduce it still more. He is making a gamble on rates of money in the next few years. If he is going to make that £355,000,000 fund entirely effective, he will have to succeed, by hook or by crook, in making his revenue exceed his expenditure. All other measures which he may suggest as Chancellor of the Exchequer for the alleviation of our depressed trade, are mere palliatives. The savings which are made by him will constitute an addition to the credit of this country, and the way in which he can best increase the savings of our people, on which alone we can depend for the extension of our industry and commerce, is by the reduction of the National Debt.

    I rise to address the Committee for the first time, and, in the circumstances, I trust that I may receive the indulgence which is usual on such occasions. The Division which I have the honour to represent is 60 per cent industrial and 40 per cent agricultural, and I take the opportunity of congratulating the Chancellor of the Exchequer upon the relief which he has been able to give to agriculture. Speaking as I do on behalf of the farmers and cultivators in my Division, I am convinced that this measure of real and practical aid will receive the approbation of all agriculturists and the gratitude of all farmers. At the same time, may I, with due humility, ask that this relief should be extended to the great industry of agriculture with the least possible delay? Further, may I ask that a proportion of that one-fifth which will eventually be allocated for the use of agriculture should go towards meeting the demands of the English farmers for their share of the meat contracts and other contracts in connection with the Services in this country? I have had the opportunity of meeting many farmers, and I am convinced that if, in addition to this proportion being granted to them, there were closer co-operation between the Government buyers and the farmers, the question of price would be more readily and easily met.

    With regard to the Petrol Duty, I do not believe that any hon. Member on either side of the Committee can quibble about 4d. a gallon on petrol, but, speaking for the wage earners in my Division, I desire, again with due diffidence, to point out what I believe will be a great hardship to the working masses. That is the difference in the price which they will have to pay for kerosene oil. In my Division great quantities of this oil are used for fuel and light. It is used mainly by agriculturists, but I believe, to a certain extent, is used as well by industrialists. The proportion of this extra 4d. per gallon which will probably be paid by the petrol users is far lighter than that which would be paid by the wage earners of this country in the way I have just mentioned. If it be not too late, I suggest to the Chancellor of the Exchequer that some rebate might be given to those who use kerosene oil for household purposes.

    The question of safeguarding has been debated here many times. I am one of those who regret that, apart from the button-making industry, no industry has been safeguarded on this occasion by the right hon. Gentleman. I desire to bring to the notice of the Committee two definite cases of safeguarding in connection with my own division—the cases of gloves and of tyres. I would first recall to the memory of hon. Members the fact that my Division has been for the past 30 or 40 years mainly Liberal, and that the leaders of industry in it are largely of the Free Trade school of thought. Prior to the last General Election the position there in regard to the glove industry was very serious. The industry was practically at a standstill and unemployment was growing day by day, week by week, and month by month. I am sure that hon. Members of the Socialist party who represent great mining areas, and who live among such despair and despondency as that which is created by unemployment, will agree with me that on all sides our one desire is to see this great problem relieved.

    I have lived among my people all my life and it was with the one desire of relieving unemployment in my Division that I advocated a policy of safeguarding, a policy from which I have never swerved. From the moment that the glove industry was safeguarded the position became one of hope for every man and woman employed in it. The figures for the first year showed that unemployment had decreased to an extent which passed even the most sanguine expectations. The commodity itself has not risen in price and in this connection I should like to point out that hon. Members of the Liberal party, at a by-election, took the opportunity of going from shop to shop in an endeavour to prove that there had been an unfavourable variation in the price of leather gloves, but in not one single instance was such a variation found. On the contrary, in every instance it was found that the price of leather gloves in my Division had decreased, and, since my election, the price of gloves is being further decreased. Within the last two months a new glove factory has been started in the Division, which shows that those Who are going into the industry are not alarmed for the future, but see hopes of prosperity for the industry and of employment for the unemployed.

    If I may turn to the question of the tyre industry, I would point out that, previously, this industry was not in such a bad way, but was at a stage in which a certain amount of work could not be guaranteed week by week. The employers in the industry were not satisfied nor was the lot of the employés a good one. From the moment the industry was safeguarded, however, they have been working to full capacity, and an old factory which had been derelict for many years has been purchased and re-equipped with new machinery, and will, within the next three months, be producing tyres. I should like to say a few words with regard to the question of exports. I have, I think, proved to the House that safeguarding of industries has indeed relieved the unemployment question. It has not increased the price of the commodity, but decreased it.

    I have said little about the exports. During the past three or four months, the exports from my Division have risen by leaps and bounds. The glove industry has a great connecting link with agriculture, for, in the past, it was the custom for the wives of agricultural labourers to come in week by week, and to take away so many pairs of leather gloves which, at their leisure, and when it suited them, they were able to make into hand-sewn gloves. To-day, that link has been re-formed, and they are earning as much as 30s. a week. This is indeed an augmentation of the labourers' wages every week, and is a fact to be taken into consideration. A hundred years ago, farmers and their wives had their own little industries, whether it was the ladies with their spindles, or the men with their brew-houses. To-day, these small industries have gone, because of mass production and other reasons, but here is an example of how the safeguarding of gloves has actually helped the industry of agriculture. The greatest country at the present moment in regard to the export of leather gloves is that hard-headed country, Germany. They are taking our gloves in greater volume week by week. I maintain that this trade is a definite link between agriculture and the industry itself, for these gloves are made by the wives of agricultural labourers.

    Hon. Members of the Socialist party claim that they alone have the right to represent the views of the working-classes. Their policy of opposing safeguarding and the giving of employment shows only too clearly how hollow are their pretensions. I submit, as a very junior Member of the House of Commons, that this great scheme, which the Chancellor of the Exchequer has brought before Parliament, probably the greatest scheme of modern days for the relief of rates, is for the year 1929, and not for the year 1928. It is for that reason that I submit to His Majesty's Government, that this policy of safeguarding can be summed up in a few words, "It is never thus; it is never now"; and that, if it were right in the days of Cobden and Bright to adopt the policy of Free Trade to alleviate the conditions of that day, surely it would have been far more expedient on the part of the Government to have adopted the policy of safeguarding more industries, and to have done that in conjunction with this great Budget. Therefore, if it be necessary, as I believe it is, to re-submit the White Paper in which the pledges of the Prime Minister and the Government were made, the sooner that White Paper is re-submitted to this House, the better it will be for the unemployed in this country. In conclusion, may I say that the few brief remarks that I have made, it may surprise the House to know, have given me grave consideration, for had my father been alive and sitting in that Gallery, my sole idea would have been to have made my maiden speech worthy of one bearing his name.

    I am sure the Committee will desire me to offer congratulations to the hon. and gallant Member, who has just sat down, upon his remarkable maiden effort. I am far from agreeing with him, but we on this side are always charitably disposed towards an hon. Member making his maiden speech, and, whatever we have to say to him in respect of the controversial issues which he has raised with us, can be said on some other occasion. It is an amazing admission of incompetence on the part of those who have been associated with British industry for so long that they should require to come to the British Government and ask for a measure of relief for British industry. That is the issue now before the Committee. In that respect, both the right hon. Gentlemen who have contributed to the Debate on this Budget are in perfect agreement. The right hon. Gentleman the Member for Hillhead (Sir R. Horne) said pretty much the same thing as the right hon. Gentleman the Member for West Swansea (Mr. Runciman). One, it is true, spoke for a variety of interests—banking, steel, iron, coal, and, as I gather from his observations, motors. The other spoke, as he usually does, with great lucidity for the ship-owning interest. One might have imagined, when both right hon. Gentlemen were deliberating one with the other that we were present at a directors' meeting; and I wondered, as they spoke, what is the contribution that is to be made by the proposals embodied in this Budget to the hulk of the working-class population. That is the sole test of a good Budget.

    As I understand the orthodox conception of national finance common to right hon. and hon. Gentlemen on the other side and on the Benches below the Gangway on this side, they believe that the purpose of national finance is to reduce taxation, or, if it cannot be reduced, to manipulate it. We on this side hold an entirely contrary view; we believe that the primary purpose of national finance is to improve the standard of life of the working-class population. There is nothing in this Budget, not a word, not a clause, not a line, that in any sense can be regarded as contributing to the well-being of the workers of this country, unless it be, as I assume from the speech of the right hon. Gentleman, that the workers are likely to become enthusiastic about the relief in the form of a farthing off the pound of sugar. The normal consumption of sugar in a working-class household is about 4 lbs. a week, so that this may be regarded from the working-class standpoint as "the penny-a-week Budget." The penny may not be forthcoming; it is highly speculative. What is quite definite is that the shares of prominent sugar-refining companies in this country are rapidly rising. The shares of Tate and Lyle have gone up by 1s. 6d. to-day. Something is passing into the pockets of speculators, and, obviously, there must be something in the offing for the sugar-refiners, but for the workers there is a promise of a farthing in the pound off sugar—perhaps, and perhaps not.

    Much might be said on that head. For example, reference might be made to the relief accorded to the agricultural industry. I am far from desiring to withhold any relief from an industry which has become depressed in more recent years, because of the neglect and incompetence of Tory and Liberal Governments; but whatever measure of relief can be afforded should be granted quickly. We desire to know whether any portion of that relief is to pass into the pockets of the agricultural labourers. Under that head, no assurance is forthcoming from the other side. Moreover, if agriculture is to be assisted. something must be done in respect of the character of food pro- duction, and some assurance provided that the landlords will not ride off with the bulk of the relief. Upon that point, hon. Members on the other side are strangely silent. These are matters which we can discuss at greater detail at a later stage.

    In respect of the promise of relief to the depressed industries, there is a matter of common agreement in this House. We on these benches have always desired the Government to come to the assistance of depressed British industry. The Government are now converted, but it is a belated conversion. What have they said in the quite recent past? It is not so long since the Prime Minister himself declared that it was not the business of a British Government to interfere in industry. He was fortified in that view by the right hon. Gentleman the Minister of Labour, whose absence we all deplore, and who, we hope, will soon again be with us. He said, quite definitely, that the Government had no intention of interfering in British industrial affairs or operations. That is the orthodox view. We have always taken the view that it was the function of the Government, as it is now the function of this Government, to interfere in industry where the national well-being is concerned. However, the Government have now responded to that appeal; they are coming to the assistance of British industry, but in what fashion!

    I listened with concentrated attention to the speech of the right hon. Member for Hillhead. As I understood him, he said, "I thank the Government, speaking, of course, on behalf of the business interests of this country with whom I am associated"—and his devotion to business is well known—"for their promise of relief to British industry, but I do ask the Government not to impose taxation for such a purpose; at any rate, if taxation is to be imposed, it must not be imposed on those who are to receive this measure of relief." In other words, the right hon. Gentleman wants it both ways, which is quite characteristic. Business interests have always wanted it both ways. They will take what they can get from the Chancellor, reluctant though he may be to satisfy them, but they will steadily, constantly and persistently evade, by means well within their power, any attempt to fasten further taxation upon them. I ask the Chancellor, now that he is in his place, to note the challenging declaration made by the right hon. Member for Hillhead. He said to the Chancellor, who, I hope, took note of his words, "The Government must not antagonise the financial interests of this country. The Government must be careful. Financial interests are all powerful." I should have thought the right hon. Gentleman had no occasion to mention that to the Chancellor, for the whole purpose of the Budget is to avoid a clash with the financial interests of this country.

    At all events there is this measure of common agreement. We are all agreed now—the benches opposite, the benches below the Gangway, and we here—that the Government must come to the assistance of British industry. In what manner is that assistance to be afforded? By a subsidy—plainly and bluntly put, by a subsidy. Right hon. Gentlemen opposite have persistently declaimed against subsidies. They had their experience of a subsidy in 1925—to which reference has already been made—unscientifically provided, with no regulations whatever. We on this side regard subsidies as economically unsound; in the main we should prefer to avoid them; but in the existing circumstances of British industry it is necessary to resort occasionally to artificial respiration. We do not oppose some measure of relief, but we do ask, just as we asked when the previous subsidy was provided, that it should be scientifically regulated and not distributed over a wide field to the good and the bad, the white and the black spots, the flourishing industries and the depressed, because that is not a scientific method of providing relief. In any event, whether the relief will be provided is hypothetical.

    I listened yesterday with great respect to the right hon. Member for Carmarthen (Sir A. Mond), who dilated at some length upon the relief which is likely to be afforded to the coal industry. There is common agreement on this head, that if there is one industry requiring relief it is the mining industry. The right hon. Gentleman said the rates now levied upon coal amounted to something in the region of 6d. per ton. Personally I think that is too high an estimate, but for the purposes of my illus- tration I will concede that 6d. is right. I will turn to the loss per ton on coal in South Wales, and I hope the Chancellor will for a moment give me his attention. In January of this year the loss per ton on coal in South Wales was rather more than 1s. 7d.; we need not trouble ourselves about fractions. I hope the Financial Secretary to the Treasury, when he replies, will tell the Committee how taking away three-quarters of the rates now levied upon every ton of coal can assist this impoverished industry, now sustaining such severe losses? It cannot be done in that way. Moreover, as has already been pointed out, this relief is not to be afforded until October, 1929.

    As to that, I do not pretend to have any more knowledge than the Chancellor himself, but the point at issue is whether such a small measure of relief can be of the slightest assistance to this impoverished and depressed industry. In my belief it will be of no assistance. I should like to have said more on this head, but my time is limited, and I wish to say something upon a matter which is, from my point of view, much more substantial, namely, the oil industry and the petrol duty. I hope I may have the ear of the Committee for a few moments longer. I yield to no one in my desire to secure a measure of relief for the shale oil industry, but while I agree that relief will be afforded by the imposition of a duty on petrol with exemption for shale oil, I feel there are other means, less dubious, which might have been employed to secure that relief. But to enable me to come to my point I require further enlightenment as to the intentions of the Chancellor. I gather from the Parliamentary report of the Chancellor's speech that he proposes not only to exempt imported crude oil, but to exempt the derivative of crude oil from the duty. If that is the position, then, clearly, shale oil will not benefit to the extent indicated by the Chancellor, for it will be in constant competition with refined oil. If, on the other hand, he proposes to impose a duty of 4d. on refined oil, then in all likelihood the existing oil concerns, other than the Anglo-Persian Oil Company, which already has established refineries and undertakes refining operations here, will tome to this country and establish such agencies, and to that extent the Chancellor will suffer a loss of revenue. He cannot have it both ways. On that point I think the Committee are entitled; to further information, because in discussions with hon. Members I gather that the point is obscure.

    I said a moment ago there is a less dubious expedient which might be employed to relieve this depressed industry. I indicated that remedy the other day in a question I put to the First Lord of the Admiralty. If he could guarantee that the shale oil produced in Scotland were purchased by the Admiralty in larger quantities, it would be unnecessary to provide this exemption. The total annual production of shale oil at the present time is in the region of 60,000,000 gallons, and the amount of relief from taxation afforded by its exemption will be something like £100,000. I think it would be quite possible for the Admiralty to purchase larger quantities of shale oil. It would, of course, be more expensive, but the additional cost would not be more than the relief from taxation provided by the Chancellor's proposal. In any event this is another form of subsidy. I am far from objecting to it in this particular instance because, quite frankly, I recognise that the Scottish shale industry, which is interlocked with the Anglo-Persian Oil Company's undertaking, which is largely dependent upon the prosperity of the Anglo-Persian Oil Company and, to some extent upon its charity, would go under if a subsidy of some kind were not provided, and that expeditiously. So while I offer my objection to the method of taxation imposed by the Chancellor, I recognise that in the absence of reorganisation in the shale oil industry and having regard to world prices, it is essential to provide some measure of relief.

    There is one further question I wish to put to the Chancellor. I am sorry to weary the Committee with these details, but I must ask it for the purposes of enlightenment. I gather he proposes to exempt the oil supplies of fishing fleets. I offer no objection whatever to that. The fishing service has suffered considerably in recent years; I shall not enter into the reasons for that, because this is not the proper occasion; but the fishing fleets, particularly in Scotland, have purchased their oil supplies from the Scottish Oils Company until in recent months, perhaps in the past year, they have ceased to purchase Scottish shale oil because of the reduced prices obtaining elsewhere. If the fishing fleets are still to be exempted and are to he permitted to purchase imported oil at lower prices, it will obviously confer no advantage upon the shale oil industry, and I ask the Chancellor to consider that aspect of the matter. I am not asking that the oil used by fishing fleets should be made chargeable in respect of this duty, far from it, but I do ask the Chancellor to direct the attention of the Government to the desirability of purchasing larger supplies of Scottish shale oil for naval purposes.

    I must come now to my conclusion, but, before doing so. I invite attention to this point. The Chancellor has introduced four Budgets. In every one of those Budgets new taxes have been imposed. I have a list of them beside me, but I shall not trouble the Committee with them. The Chancellor of the Exchequer is the most prolific tax imposer the Treasury has ever known. I do not care to suggest that the Chancellor of the Exchequer himself is perhaps the worst tax that has been imposed upon us. That suggestion has been made elsewhere, but I do not share it entirely. This Budget is about as good as the previous Budgets which were introduced by the. Chancellor of the Exchequer and as bad. So far as the bulk of the working-clam population is concerned, it affords no measure of relief; in fact, they are exempted from relief. The business community is to benefit and the right hon. Gentleman the Member for Hillhead advises us that the banking interest will benefit. Those people with incomes of over £400 per annum are also to benefit, but the working classes of this country will receive no benefit whatever. Applying that test, we on these benches regard the Budget proposals of the Chancellor of the Exchequer as of no value whatever to those who in existing circumstances require whatever relief can be afforded by this House.

    I think I ought to congratulate the last speaker upon the skill in which he has attempted to extricate himself from the position in which he finds himself in relation to his constituents. I never heard a more ungracious way of showing his gratitude in my life; and the one thing for which he ought to be thankful is the date at which the by-election for Linlithgow took place. All those who have listened to this Debate must have been struck by one peculiar fact. Here we have the introduction of a Budget which, whether we agree with it or not, or whether the proposals made in it will have the sympathy or opposition of a majority of the Members of this House, is admitted to be one of the most important, and I would say the most comprehensive and the most daring and the most progressive series of proposals that have ever been put forward by a Conservative Government in office. No other Budget can rank equal to it in regard to its importance and effect upon the system of government and upon the whole industrial system of the country.

    The right hon. Gentleman the Member for Collie Valley (Mr. Snowden) surprised the House by making practically no reference to the main proposals which characterised this Budget. It is true that the right hon. Gentleman made a series of criticisms in his usual somewhat pedantic style and his favourite role of financial purist. We all appreciate the powers of criticism and the great knowledge possessed by the right hon. Gentleman the Member for Collie Valley, who is a kind of mixture between a sort of Grand Inquisitor of political economy—a kind of economic Torquemada—on the one hand and a political Mrs. Gummidge on the other. The right hon. Gentleman is always "thinking of the old' un"—of the year 1924; practically the whole of his political life has been and will be devoted to proving that the administration of public finance in that year was better and more effective than it has ever been under any Chancellor of the Exchequer. When it came to the question of the reconstruction of local government and our rating system and the important issues involved, the right hon. Gentleman had only a few sneers and a few prophecies to make of equal unimportance.

    The late Chancellor of the Exchequer is fond of making prophecies, and last year he made two. One of them was that there would undoubtedly be a deficit, and in that he was wrong. He also said that there would undoubtedly be a great international strike owing to the introduction of the Trade Disputes Bill, and there again he was wrong. His prophecy on this occasion is that the proposals in the Budget will not meet with the approval of the country at the next election, and I think time will show that once more he will be wrong. The method in which the right hon. Gentleman the Member for Colne Valley treated this subject was not worthy of himself or the importance of the proposals which have been put before us. I can only attribute that to the fact that the party opposite have not made up their minds what they are going to say about the proposals of the Budget.

    We have had very little criticism from hon. Members opposite of the Budget proposals, and I should like to make a reply to what seems to me to be the important criticisms which came from certain speakers on the Liberal benches. The right hon. Gentleman the Member for West Swansea (Mr. Runciman) who spoke. this afternoon made a rather more sympathetic criticism of the Budget proposals than were made by the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George). But unlike the late Chancellor of the Exchequer the right hon. Gentleman the Member for Carnarvon Boroughs at least took the initiative. He did not wait until there was a party meeting before making a definite series of criticisms and counter-propositions; and I will therefore venture to examine one or two of them. The great plan put forward by the Chancellor of the Exchequer deals with the whole rating situation under two heads. First of all there is the finance required for it and then there is the method chosen of carrying it out. Hon. Members may criticise the finance and the method of providing the money which will be necessary. On that point the right hon. Gentleman the Member for Carnarvon Boroughs practically reverted to the old policy of the taxation of land values.

    We have had an interesting controversy between the leader of the Liberal party and the right hon. Gentleman the Member for Carmarthen (Sir A. Mond) as to the exact way in which that policy was dropped, hut I do not suppose that we shall ever discover the truth of that episode until we have a further instalment of Lord Beaverbrook's memoirs. At any rate if there is one right hon. Gentleman who has no right to talk about the taxation of land values it is the right hon. Gentleman the Member for Carnarvon Boroughs because it was he who abandoned this great engine of finance, this formidable fiscal weapon. What is more, the right hon. Gentleman abandoned it not during the period of the War but after the War. Therefore if there is one person who is precluded from advancing that argument it is the right hon. Gentleman the Member for Carnarvon Boroughs.

    The Leader of the Liberal party agreed that it was very important that there should be some relief given to the local rates and referring to -the scheme of the Chancellor of the Exchequer he really stated a single tax policy. He said there would he no relief to rates and that the system proposed by the Government must necessarily prove in the long run merely an addition to rental values. As regards the right hon. Gentleman's own policy of lowering rates by the nationalisation of certain services surely the same must be true and it will prove according to his theory to be a mere sop to the landlords. The result is that the right hon. Gentleman is a single taxer when he is dealing with our policy and he adopts an orthodox economic attitude when presenting his own policy. The only way in which the right, hon. Gentleman differed from our policy was that we had not chosen the right method for the relief of the pressure of the rates, and that the sector of the front upon which we had chosen to make our attack was not most useful for the purpose. We had also a series of detailed comments made upon the Budget proposals, some of them not altogether happy in their illustration. We heard that the tithe is paid by the tenant and that the coal mines arc rated upon a rental value basis. That illustration was singularly inappropriate to the argument which was presented to us as neither of those statements is accurate; in fact, the right hon. Gentleman then made a series of important criticisms of the effect upon local government of our proposals.

    What they really came to was this. The right hon. Gentleman said that by the change which is now proposed in local government we are not going to confer any real benefit and we are going to inflict a hardship. He also tried to show that by increasing the area we were going to increase the rates. He told us that by throwing non-county boroughs in with counties we should be sure to get an increase of rates. I think the right hon. Gentleman completely missed the main part of the statement made by the Chancellor of the Exchequer. The scheme for the enlargement of local areas and the reimbursements to local taxation in order to compensate the people is not to be an absolutely equal reimbursement. There has to be a reconsideration of the whole position of the area, and, I quote the speech,
    "a gradual and continuous adjustment of the resources of individual local authorities to the needs and character of the population for which they are responsible."
    Under that very important proposal we have got for the first time in our system of the relation between local and national taxation a very powerful and flexible instrument to achieve the removal of burdens upon those areas where they are now pressing so hardly. The main argument that has been advanced, especially by the Liberal party, was in fact an argument consisting of an appeal to the selfish interests of those who were not directly beneficiaries in this matter. We have been asked what is a trader and the workmen going to get out of these proposals? What does the workman want? He wants wages and employment.

    Oh, yes, he will! What does the shopkeeper want? If a town is prosperous and the men are earning good wages the trade of the shop keeper is all right. What the right hon. Gentleman the Member for Carnarvon Boroughs said was merely an attempt to revive the Liberal party upon the basis of the selfish interests of the middlemen and the rentier class. We have had presented to us a great and important scheme, and I think all hon. Members on this side of the House will be ready to congratulate the Government for their courage in presenting a Budget of this character for our consideration. No doubt there will be immense difficulties found in making the necessary adjustments, and carrying out the great task of reconstruction to which we have put our hands.

    The criticisms which have already been directed against these proposals do not seem to me to have shaken them to their foundation. I do not think the appeal which has been made to selfish interests will transcend the desire to see that the basic industries on which our happiness depend are given a chance of doing their best for those who are engaged in them, and which we all want them to do. Wages, employment, the whole chance of getting our fellow-countrymen upon a more prosperous and better basis, and raising the whole social life and character of our people—surely that is going to be a better appeal to the men with the motor car who has to pay a few pence more for his petrol, or to those who may not be direct and immediate beneficiaries. I am sure that all those who really are prepared to support these proposals with fervour and faith will be able to rally the finer instincts of the people in support of the main underlying principles which have gone to make up this important and progressive scheme, which constitutes, to my mind, a landmark in the history of Conservatism.

    6.0 p.m.

    The Budget statement may be conveniently divided into two parts, the first of which concerns the ordinary run of our public finance, and the second of which is devoted to the important scheme of rating reform and its consequences, whatever they may be, which the Chancellor of the Exchequer outlined in his introductory statement; and I make no apology fur devoting the whole of what I trust will be a comparatively brief speech to the rating plans which the Government have suggested. I entirely agree that it is extraordinarily difficult to make a great party controversy of rating reform. The subject is very often left to the experts—wrongly named—or it is regarded, historically and otherwise, as so complex as to be altogether inappropriate for the purposes of discussion on a public platform, or even on the Floor of the House of Commons. There is, however, a very great deal in the scheme of the Government which, even in a kind of Second Reading Debate, lends itself to fundamental criticism, although I trust that it will be possible for us, here and there at all events, to suggest alternative schemes.

    We on these benches have repeatedly, in recent years, drawn attention to the enormous increase in the burden of local rates. For some time now that aggregate burden has settled down at a figure between £160,000,000 and £180,000,000 per annum, or, roughly, double the pre-War total. A certain school of thought suggests that that is a very much smaller increase than the great increase which has taken place in the burden of national taxation, and that, on paper at all events, ratepayers appear to have gained at the expense of taxpayers in the obligations which have settled upon us following the War. There is no real validity in an argument of that kind, because great blocks of the expenditure fall inevitably to the State—the burden of our National Debt and other contributions—and in any event the effective reply would be that our national taxation does approximate more nearly to the principle of ability to pay, especially in the case of direct taxes, than anything resembling a local rate can ever achieve. Broadly and generally, therefore, this has been a very heavy burden for the great masses of our people, and we have constantly urged that either certain services should be overtaken wholly, or at all events more largely, from national funds, or that, at the very least, no additional obligations or burdens should be heaped upon the local authorities.

    By way of preliminary discussion, therefore, there is a certain difficulty in taking a purely party line, because I imagine that the Government would suggest that the object of their scheme is, in assisting these productive industries, also to assist the local authorities, although many of us are satisfied that that result is by no means what will be achieved. The Committee must observe, in the next place, that all this plan is, so far, of the nature of a subsidy; it is an attempt, from resources provided mainly in this case by motor car users, to give assistance to certain productive industries in necessitous and other areas, whose condition the whole House of Commons frankly recognises and admits. I will not waste any time in debating the desirability of a subsidy, or the ordinary economic merits of any such plan, because, whatever view we take, there is a large element of subsidy in the whole scheme of taxation in this country, and all kinds of concessions have been made in the past to specific interests, for reasons and objects which were defended in the House of Commons and elsewhere at the time. We on this side, however, suggest very strongly that, before any kind of further contribution is given, Parliament should be satisfied that it is strictly required, and that it is going to work out in the direction of maximum contribution to our industrial recovery and the employment of our people.

    A preliminary to that end is to be perfectly sure that we have got the facts of the situation. Let us take the illustration of the removal of what remains of local rates payable by the agricultural or farming classes in Great Britain. We do not dispute that agriculture has passed through a very difficult time. I have no claim to speak in any sense as an authority on that problem, but, having heard agriculturists and others, I have always understood that a very large part of their difficulties lay in price stabilisation and a claim for Protection which the Government could not concede; and many of them have said that, while local rates are important., they are not by any means, in many districts, a vital part of the problem through which they are passing. If, however, the Government propose, at the end of next year, to sweep away all that remains of local rates on agriculture in Great Britain, surely their first duty would be to apply some of the recommendations of the Royal Corn-mission on Income Tax in 1919, and find out exactly the position in which the farming class stands. That can only be found out when the agricultural community is on the ordinary basis for Income Tax contribution.

    At the present time, as the House is well aware, the basis for Income Tax purposes is one time the annual valuation or rent, and the Royal Commission, which included people who were very sympathetic to British agriculture, unanimously recommended that that should be replaced, after appropriate notice, by the ordinary profit basis, and that agriculturists should be asked to make that return and to proceed on a method which is capable of complete defence, in that, if profits are not earned, tax will not fall to be paid. It is perfectly true that the option exists under present conditions, but I have always been impressed by the markedly limited extent to which the option of transfer to the Schedule D basis has been exercised, even in times of agricultural depression, and it seems fair to suggest that at least some part of the agricultural community is doing well enough to continue to make payment on the basis of one time the annual valuation.

    Here is a contribution which sweeps away all that remains, as at the end of next year, of agricultural rates, and I do press upon the Government very strongly this consideration, that, before that step is taken, justice should be done to the taxpayers, and, in fact, to other ratepayers, by applying that unanimous recommendation of the Royal Commission —a recommendation with which no farmer could quarrel, since he is merely placed on the same basis as all other industrial classes in the land. That is the first line of suggestion in this controversy; but another preliminary point of great importance arises. Part of the Government scheme is to give assistance to these productive industries by certain reliefs in railway charges. The railway amalgamations will benefit when these proposals are introduced, and they are to pass on that benefit to selected industries in the form of a reduction of the charges which they make to them. But the Chancellor of the Exchequer went rather beyond an argument of that description, and seemed to suggest that it was the duty of the Government to hold the balance between railway transport in Great Britain and the growing competitive power of the motor transport system, or road transport in general.

    Broadly, of course, that is true so far as the House of Commons is concerned, but the Chancellor of the Exchequer and the Government cannot overlook the practical revolution which has taken place in the whole railway structure in Great Britain under the Act of 1921, because, even if we make the largest allowance for the argument as to what the traffic will bear, it remains true that a specific direction has been given to the Railway Rates Tribunal so to fix rates and charges as to yield, with efficient working, the standard revenue, that is to say, the net revenue of 1913, the last pre-War year. In other words, this industry has been made a regulated industry, and, moreover, under the Rates Tribunal, certain allowances have been given on the capital expenditure of these amalgamations. It has been argued, even by friends of the railway companies, that they have been placed in that regulated or, if you like, sheltered or so far preferential position. The road transport of this country, however, is not on that basis at all. All kinds of comparisons may be made in regard to the respective burdens of the two great forces, but Parliament has just passed by an overwhelming majority the Second Reading of Bills designed to give to the railway companies road powers. I entirely agree that that is an economic development which this country could not possibly avoid, but we must be very careful that the Government, in the scheme which they are now proposing to apply, do not, so far from holding the balance, push matters very far in favour of four great amalgamations which, after all, have certain preferences as compared with ordinary road transport in this country.

    The view that we on these benches take, until our economic principles are applied, is that at all events the two services should be regarded as complementary, that is to say, they must work to one another's hands, and I am by no means satisfied that that is going to he the effect of the Government's proposals. Even if we remember that the railway companies are a channel for this contribution, they must gain to some extent in overhead and other charges by the increased volume of traffic which, presumably, they will be able to carry, and so, in the second place, I ask the Government whether they have taken that legislation into account, and whether all these factors have been kept in view in the differential treatment of railway charges. These are preliminaries, and I am afraid that, for reasons connected with an interruption which will come almost immediately, I must summarise rather more briefly other parts of this speech. We come now to the actual plan of the Government for the relief of the productive industries. The Government propose to pay three-fourths of the local rates on what they describe as productive industries, as distinct from the distributive trades. That involves them in a preliminary ascertainment, to extend over the next year, as to what parts of the undertakings are productive in character, and therefore entitled to this relief.

    This method is going to involve the Government in very great technical and even administrative difficulty, and I cannot for the life of me believe there are not ready and convenient alternatives to hand even if the Government proposal is adopted. First of all, of course, the attempt to draw a distinction between a productive and a distributive trade is notoriously hard, and the problem will increase when you come to individual factories and establishments, and seek to say which part exactly belongs to its productive side. Over and above that, you have a whole year of this valuation ascertainment, with, presumably, a good deal of effort by the central authority and other bodies which could have been avoided. I cannot help thinking there is an alternative already in the differential rates that are, in fact, now imposed on certain classes of public utility and other business undertakings. For example, in the Scottish Rating Act, 1926—I have no hesitation in pleading my native land, which leads in all technical and financial matters—there is a Schedule under which certain undertakings are rated for the purposes of local assessment on a proportion of the annual valuation, for reasons which were defended at great length by the very Government that is now proposing this remarkably complicated scheme. Is it possible for the Government to proceed on that basis and not to embark on this valuation ascertainment, but to work out some scheme of relief in terms of a Schedule of that description, which, after all, operates with apparent success in the kind of public utility and other undertakings to which I have referred?

    I observe, going beyond that, that the Government do not propose to draw any distinction at all in relief between industries of a productive character which are quite successful and those which are admittedly not. The Government reply might be that it would be practically impossible to establish any such distinction, and that they had far better run the risk of spreading the contribution over a wide field where it may not be particularly required, than endeavour to separate particular undertakings or concerns. There are the difficulties, as the Chancellor of the Exchequer remarks, of picking and choosing, but from the very start this is a very, complicated and highly technical matter. The difficulties along that line are very likely greater than the difficulties of certain other proposals in which some kind of differentiation might be introduced. After all, if the contribution is put at £15,000,000, £20,000,000 or £25,000,000 per annum, I do not dispute that that is important, but it is only a part of a great rating field covering between £160,000,000 and £180,000,000, and the declared object of the Government is to give the assistance particularly to those exporting concerns which most urgently require it. If that is the state of affairs, what is the position of many of these exporting businesses to-day? When we make an analysis, from purely official returns, we find that they are confronted with exchange difficulties in their export trade; they are confronted also with the depressed labour and employment conditions in other countries with which they compete; and they are exposed to a whole mass of external problems upon which a contribution of this kind, spread over a wide field, including those who do not require it, will make probably in many cases only a faint impression. I am not disputing that a large percentage of the people employed are covered by these industries; but if the object of the Government is to assist the export trade, let them make a bee line for those people in the export trades who undeniably require the help, and not distribute relief to those who do not require it at all. After all, if we must have subsidies in our national taxation and rating system, it should be on that basis. I suggest to the House of Commons, and even to business men, that that argument would be supported by an analysis of a great deal of the material supplied by the Department of Overseas Trade and by other authorities.

    May I pass to the position of the local authorities under the financial and administrative proposals that are in the mind of the Government. This scheme makes no direct appeal to the necessitous areas. Their position has been discussed at great length within recent years. All kinds of formulae for the express assistance of such districts have been considered, but they have been systematically rejected. The Government will con- tend that indirectly the scheme is designed to assist such localities, but, for all we know, they are to trade on for at least another year and a half or nearly two years in their plight, subject perhaps to some trade modification of the position in which they find themselves to-day. The last analysis of the Public Accounts Committee for the complete year of the Appropriation Accounts shows debts to the Ministry of Health by these local authorities of approximately £7,000,000, and that, of course, is only a fraction of the burden resting upon them in existing conditions. Directly, therefore, under this plan they get no contribution. They are left precisely where they were, in spite of all the Debates we have had on this subject. Then as regards the local authorities, the Government indicate that they propose to introduce some system of block grants, by which we understand as a rule a fixed contribution, and that within this block grant presumably the existing percentage system will operate. The question that immediately arises is whether in the stabilisation of a block grant for five years covering all local authorities, you may not take away with one hand such assistance as you propose to give with the other.

    Some most awful rubbish, I am bound to say, is. spoken on this question of the percentage grant system in much of our public Debate. If the Committee will forgive a personal word, some of us spent two years in the Meston Committee on a detailed analysis of this great controversy in the relations between national and local finance. The right hon. Gentleman the Member for West Swansea (Mr. Runciman) argued to-day that these local authorities have been misled by inflationist conditions following the War into a great deal of expenditure, hardly visualising the burden that would rest upon them in a time of depression. That is a very misleading statement of the case. By far the greater part of the task of these local authorities was forced upon them by legislation initiated in the House of Commons, and more particularly certain services were, if I may use the word, nationalised, such as police and teachers' remuneration and the rest, in this sense, that representative Committees laid down the terms which these local authorities were to observe. They were, therefore, deprived of any kind of local initiative or control. I am not disputing the principle. I believe it was essential. But let the House of Commons be perfectly just in this problem in analysing the percentage grant system. Of course the local authorities were influenced by the enormous rise in prices, a state of affairs which continues now, and with which many of them are fighting to the very best of their ability. But we gain nothing at all in the proposals of the Government if by any chance they involve the institution of a block grant system. such as will, in fact, place a larger burden upon local rates, although, as I gather from the Chancellor, that is not the intention which he, at all events, has in mind.

    Let us look into this question at rather closer quarters. If by any chance a block or fixed grant is to be introduced, I am going to argue that it should be introduced under very definite conditions. The House of Commons has had the advantage since 1896 of the proceedings of at least three representative bodies, the Royal Commission on Local Taxation, the Committee that reported in 1911, many of whose proposals were embodied in preparatory legislation but abandoned because of the War, and at least the experience of the members of the Meston Committee, although their document has not been formally presented to the House of Commons. What is the kind of case that emerges from the three investigations? First of all, there is the very powerful argument against increasing the burden of the local authorities, and, in the next place, we must do everything in our power, not to encourage them to waste money—none of us would suggest that—but to develop social services. There are vast problems in social progress still to be overtaken, and it is no economic gain to the country for the moment to undermine a contribution of that kind. But, beyond that, I am going to suggest that there are steps that can be taken. The State admittedly should know the limit of its liability, and I believe in a, quite ready and convenient way it can know the limit of its liability.

    In the next place, some definite effort must be made to deal with the whole ques- tion of administrative areas, and, above all, with what I may describe as units of cost. Many of these administrative areas are far too small in existing conditions, and they lead to a great deal of overlapping and waste and unnecessary competition, even in the financial field. They operate against the best interests of the ratepayers in these localities. So prima facie there is a very strong case for larger areas, although I am not sure the Government intend to cover the whole field, because, as I understand the speech of the Chancellor of the Exchequer, at this stage, at all events, he has specified only two services. It must apply to all services. The very best effort must be made to apply to these areas the kind of principles which are every day being applied in the industrial community. Whatever we think of the industrial future of the country, amalgamation, rationalisation, larger scale production, all these are perfectly inevitable forces, and I have found it difficult to understand why our local administration should not march in step, especially in view of the loss that the existing system entails. But if you are going to apply a new method of this kind, you must insure that you are getting the best value for your money. If these larger areas are enforced, you get a kind of basis of comparison, and your basis must become effective.

    Whereupon, the GENTLEMAN USHER OF THE BLACK ROD being come with a message, the Chairman left the Chair.

    Mr. SPEAKER resumed the Chair.

    Royal Assent

    Message to attend the Lords Commissioners.

    The House went; and, haring retwrned,

    Mr. SPEAKER announced the Royal Assent to—

  • 1. Army and Air Force (Annual) Act, 1928.
  • 2. Bromborough Dock Act, 1928.
  • 3. Mersey Tunnel Act, 1928.
  • 4. Barnet District Gas and Water Act, 1923.
  • Ways And Means

    Again considered in Committee.

    [Mr. JAMES HOPE in the Chair.]

    Question again 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."

    Very little time will suffice to cover the remaining ground which I had in mind. The Committee will recall that we were arguing the position of the suggested block grants scheme to which the Chancellor of the Exchequer made reference in the Budget statement. I was pleading from these benches that any plan which, in fact, limited the contribution of the State to the local authorities, especially in the social services, would go far to undermine the very contribution that the Government intended to make to the locality. I was just at the point of trying to lay down conditions which should he observed if by any chance the Government persist in that proposal. We admit that the liability of the State should be known, and it may be that within limits in existing conditions there is a difficulty from year to year in ascertaining exactly the call upon the National Exchequer.

    But we have also to recognise that the whole of that expenditure proceeds, or practically all of it, under Act of Parliament and that, in any case, it is subject to a great deal of centralised control. I believe that emerging from the Reports of the three bodies—of the Reports of two of them, and what might have been the Report of the third—certain quite business-like proposals might be suggested. First of all, the Government must aim at some kind of standard of efficiency in these services. In the second place, they must pursue, as I think, the system of larger areas, and, in the third place, on the basis of those larger areas, it is entirely in the public interest at the present time to work out units of cost. I quite recognise that these Commissions have not been particularly attracted to a unitary basis, but may I just explain simply and as clearly as possible what is involved. There are certain services at the present time in which the unit of cost may be per bed in hospitals or per head, where a system is worked out on a comparable basis covering certain local authorities or areas. That obtains to only a comparatively limited extent in the wide field of this social expenditure covered by the Exchequer contribution to the local authorities.

    I have never been able to agree that you cannot develop the system beyond the limited point which has just been reached and I make that suggestion for these reasons, broadly, because we want to get the very best return for the money which is contributed; in the next place, because these wider areas will give you a basis of comparison, and, in the third place, that if you are going to fix by any chance the State contribution, the increased efficiency of a unit of cost method will so far relieve the load and the difficulty of the local authorities. We do not know until the Minister of Health has spoken whether a plan of that kind is in view. But, summarising the position, I say this, that we on this side of the House oppose any policy failing to deal with necessitous areas and any alteration in the system of the State contribution which penalises local authorities with this burden already round their necks, but that, subject to these two conditions, we, for our part, will support any scheme making for the efficiency of the contribution.

    May I say one general word with regard to the Budget as a whole? It is plain from the facts before us, and including for the moment the self-supporting services, that our expenditure is still rather more than £800,000,000 per year. I am taking the old basis for the purpose of a comparison with preceding years, although I agree that the amended form which the Chancellor of the Exchequer has introduced is in every way a much more accurate presentation of the case. Many people believe that this is a very heavy burden for this country to carry, but, in all the circumstances of the case, I think we are equal to the task, and we gain nothing by undue exaggeration. Experts have stated that the total income of the British people to-day is about £4,000,000,000 per annum, and, everything considered, the prospects for our industries and commerce are perhaps rather better now than they have been for some years.

    There is one consideration that I would press. Each year our Department of Overseas Trade is presenting us with a mass of material of the most practical kind, analysing our position in the markets of the world. It has directed attention to the stronger appeal which we can make to specific markets, notwithstanding all the tariff restrictions. If this is the plan of the Government, applied to the productive industries, it must be related to that material which that Department is constantly supplying. My chief regret, in existing conditions, is that there is not in the House of Commons, or in public debate in this country, a consistent effort to relate these contributions for the public good. If by any chance we improve that in the future, I am by no means pessimistic regarding the result; and this is all the more urgent to-day because of the very static character, to which the Chancellor of the Exchequer referred, of the problem of 1,000,000 people who are denied regular and remunerative employment, in our midst.

    I desire, first of all, to express to the right hon. Gentleman the Member for Central Edinburgh (Mr. W. Graham) my appreciation of his courtesy in somewhat compressing his remarks in order to enable me to reply, and I am sure hon. Members who heard him will share my regret that in any way his very interesting and thoughtful contribution to this Debate has been curtailed by circumstances over which we have had no control. I hope he may be given some further opportunity in our subsequent Debates to elaborate his suggestion. Listening as I have to the greater part of this Debate, I have conic to the conclusion that my right hon. Friend the Chancellor of the Exchequer has every reason to be gratified at the reception which has been given to his far-reaching and far-sighted proposals. Not only has the great majority of the speakers found something at least to approve in the Budget, but from many quarters have come the most wholehearted appreciation of the statesmanlike vision and courage which has been displayed in the whole conception. Although, of course, there have been criticisms from one quarter or another, what has struck me as singular in this Debate has been that almost every critic has directed his criticism to a different point, so that one who has to reply to the discussion finds it difficult, if not impossible, to select any feature of the Budget which has concentrated upon itself that volume of disapproval which generally emphasises a weakness in any Budget statement.

    In the wonderful speech of the Chancellor of the Exchequer in which he painted so vividly a picture of the conditions with which we are faced and the proposals of the Government for dealing with them, even he could hardly be expected to convey to those who were beforehand unfamiliar with the scheme, all the details and all the possible implications and bearings of the proposal. Therefore, I am not surprised to find that there has been, even after three days' discussion, a certain amount of misunderstanding and misapprehension as to the whole scope and field of the proposals we are presenting to Parliament. Take, for example, the speech of the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George). He began by saying that this was a serious question which ought to be treated in a purely non-party spirit. Then he went on to say that having applied this judicial and impartial examination to the scheme, he discovered it to be a thoroughly vicious method, and proceeded to deal with it in what, I think, I must describe as a thoroughly vicious speech. So much so that I was rather left wondering what further he could have found to say if he had applied the ordinary methods of party controversy, instead of the strictly non-party spirit in which he approached it.

    I make no complaint against the right hon. Gentleman. Indeed, I am grateful to him for his speech. After all, the Liberal party are entitled to be heard with some respect on this subject. They have instituted considerable investigations into the matter; they have even gone so far as to formulate a policy, and though their policy, to our ideas, may be
    "sickled o'er with the pale yellow cast of thought;"
    yet their investigations have fortified them with a fairly intimate appreciation of what are the intricacies and difficulties of the problem we have to face. They cannot expect us, however, to adopt their policy. The Chancellor of the Exchequer invited for this great national scheme the general cooperation of the Committee, of all parties in the House, but I do not think he extended his generosity so far as to commit him at once to throw his own scheme into the fire and take on someone else's, especially when, as appears to us, the scheme advocated by the Liberal party is open itself to some of the criticisms which have been levelled against ours, is one which, in many respects, will be difficult if not impossible to carry into operation and, lastly, and most important of all, would be quite ineffective to achieve the purpose we ourselves have in mind.

    I shall recur to that scheme again in the course of my observations, but let me, first of all, remind the Committee of the manner in which the right hon. Member for Carnarvon Boroughs described the problem. He said it was three-fold. First, that of the depressed industries, secondly, the distressed areas, and, thirdly, the wear and tear on the roads occasioned by excessive motor traffic. That description of the problem is altogether inadequate to do any sort of justice to the great conception embodied in the scheme of the Chancellor of the Exchequer. The problem is very much larger than that outlined by the right hon. Member for Carnarvon Boroughs. What we have to consider is the condition of the country in all the years that have elapsed since the War. It is in a condition of protracted and constantly disappointed expectation. Again and again we have tried to make ourselves believe that at last the long anticipated boom was coming. Again and again we have had to admit that the signs which we believed we had seen had flickered away, and once more we were back again in the trough. No one has more often called attention to this fact than the right hon. Gentleman himself, and no one has taken a more gloomy view of the situation.

    It is true that we have made some progress. All industries are not under a cloud, many of them are comparatively prosperous, but, taking the situation of the country as a whole, we have to confess that the recovery has been disappointingly small, that the progress has only been by fits and starts, and that we have constantly had to contemplate the stagnant pools of industry and areas which appear to be rapidly becoming totally derelict. The right hon. Member for 'Central Edinburgh has told us that at the present time the indications seem to be more favourable than perhaps they have been for some time. I think that is a correct appreciation of the present situation, and that seems to us to be just the moment when by some large gesture we should do something which will once more restore confidence and hope and vigour and courage to industry, something that may give just the stimulus which is necessary to give it a fresh start and bring back the fertilising stream of capital; something which will give the depressed industries a chance of obtaining something like stability and those which are a little more prosperous a chance of still further extending their operations. What we have in mind is not merely the nursing of sick industries, still lees of placing on prosperous industries the burden of maintaining those industries which are depressed. It is something bigger than that. It is to help all productive industries in the country, whether manufacturing or agricultural, by some rearrangement of the national burdens, which the right. hon. Member for Central Edinburgh might call a subsidy but which is really a rearrangement of the burdens so that they may be borne more easily and give relief just where these burdens press most heavily.

    7.0 p.m.

    The right hon. Member for Shettleston (Mr. Wheatley) yesterday made a speech which was of considerable interest, not merely because he stated again, as he or some of his particular associates have stated before, that he was no Free Trader and that he fully appreciated the desirability of keeping British trade for British workers, but for the further proposition which he advanced that all these schemes of ours for assisting industry would have but a transitory effect because, as he said, the greatest problem before us was to increase the purchasing power of the people. Surely, the purchasing power of the people is not to he measured by any amount of cash which is at the disposal of the people. In order to ascertain what the purchasing power of the people is, you must consider also what that cash will buy and if, by a system of increasing' its production and of reducing the costs upon industry, we can help industry to compete in the markets of the world, and we enable industry to lower its costs and to produce articles at cheaper prices, then surely we are thereby increasing the purchasing power of the people.

    When he pointed, as he did, to the example of the United States and to the phenomenon which has been witnessed there of considerable numbers of people being thrown out of work on account of the more rapid increase in the means of production than in the purchasing power of the people, I might remind him, or any of those who are moved by that argument, that we are still a great way from the condition of prosperity in the United States which has brought about such a phenomenon as that. It is not much consolation to the man who is underfed to say, "We will give you nothing more to eat because somebody across the street has over-eaten himself." The working people in this country will be willing to run the risks of over-production in the distant future, if, in the meantime, they can see a movement which is going to bring steadier employment and higher wages to themselves.

    The problem of the depressed industries, the heavy industries, is only part of a wider problem with which we are faced. It is true that they derive particular importance from the fact that they are our basic industries, that they in normal times give rise to larger numbers of employed persons than the younger industries which to-day seem to be supplanting them. That is, undoubtedly, a reason for giving special attention to their particular needs. What are the complaints of industry to-day and particularly of these depressed industries? They say they are weighed down by the burden of two things in particular. One is the burden of local rates, and the other is the burden of railway freights. We are dealing with both those points and, so far as the reduction in railway freights is concerned, I do not think there has been a single word of disapproval or objection to it in any speech that has been made, if I except, possibly, the last speech to which we listened and that of the right hon. Member for West Swansea (Mr. Runciman), who was unable to see how any advantage could accrue to these industries by reducing land freights, although he thought there was something to be said for a reduction in dock and harbour duties provided that the transshipment industry was not injured by a safeguarding duty on buttons.

    The assistance to industry to which so much attention has naturally been given during the discussion is only half our plan. In addition to this, we have got in this scheme another great conception —the idea that we are going to make a radical alteration in the system which now regulates the relations between local and national expenditure. The Committee will understand that any such rearrangement must carry with it some rearrangement of the functions of local authorities, but those rearrangements will be in the direction contemplated by the right hon. Member for Central Edinburgh, and they will mean a wider spreading of charges over larger areas, and by that means we believe we shall be able to bring about a great leap in the efficiency of some of the most important of our social services.

    I am not going to-night, in the comparatively short time at my disposal, to enter into any detailed description of the system, or want of system, under which the Exchequer contributions are made to local expenditure. They are a collection of survivals from the past, without order and without logic. The right hon. Member for Central Edinburgh has protested against any wholesale charge of extravagance against local authorities in connection with the great increase of local expenditure which has taken place since the War. I admit that it is easy to exaggerate the charges of that kind, and that much of that enormously increased expenditure is due to the improvement of conditions cast upon local authorities which have been largely imposed upon them from outside and, without any discussion of the merits of those proposals, it is quite true that it must not be laid entirely to their charge. But the system under which grants are given to local authorities upon a percentage basis carries with it certain obvious disadvantages. Whatever may be said to the contrary, I do not think it can be denied that, to a local authority, the fact that any expenditure upon which it embarks will be met by a contribution of 50 per cent. automatically derived from the Exchequer is an encouragement to that local authority to embark upon that expenditure, without perhaps that regard to its own resources which it would necessarily exercise if it had to find the full amount itself.

    Further, any such percentage contribution by the Exchequer must mean necessarily a detailed and meticulous examination of the items of expenditure by the officials of the central authority and must, to that extent, mean a continuous interference with local autonomy. Lastly, and this is perhaps the most important of the three points 1 want to make, the expenditure of the local authority is the measure of relief which it gets from the central authority, and therefore those local authorities, which are the wealthiest and which can afford to spend money upon their local services, are the ones that get the most from the central authority, whereas the poorer authorities, which cannot afford to develop their services even perhaps to the minimum point of efficiency, get less, and not more, from the national resources. Those are very grave defects, and those are the defects which it is the purpose of our great scheme entirely to remove.

    We are taking advantage of this scheme, under which, by reason of the fact that we arc going, to a large extent, to de-rate productive industry, the contribution of the Exchequer to the locality must be largely increased, to alter the method of allocation. We shall have, under our plan, to allot from the central Exchequer to each authority a sum which will take the form of a block grant payable at the same rate for a fixed number of years, the period suggested being five years. Part of that sum will be in lieu of the rates of which local authorities have been deprived; part of it will be in lieu of the percentage grants for health services which have been hitherto paid; part of it will take the place of the agricultural rates grant and part of it will supersede the old assigned revenues. Taking all those items together, we get a mass which we shall have to replace by a grant from the national Exchequer. What we are aiming at is that the distribution of that money shall not be in proportion to the expenditure of the local authority, but that it shall be in proportion to its needs. It shall be in proportion, first of all, to the population—for it is the population, in the first instance, that makes the need —and, secondly, it shall have some refer- once to the ability of the locality to pay, so that the poorer locality, by reason of its poverty, shall have something more than the richer locality which can better afford to provide for its own needs. That is the ultimate aim to which we are directing our energies.

    The Committee will see that it is quite impossible at one step to jump from the present arrangement into a system of that kind. If you are going to take away from the local authority what may be in some instances a very considerable proportion of their revenue, and allot to them a compensatory grant from the Exchequer on these new principles, you might, if you applied it in toto at once, bring about a total disorganisation of the local authority's finance. Therefore, to begin with, in discussing with local authorities the basis upon which the first quinquennial grant is to be given, the first thing we have to take into consideration is the rateable value of this authority which has been lost, and how much of the existing rate the local authority will be deprived of by reason of the fact that industry is only to pay one quarter of what it paid before. Therefore, that must be the basis of the negotiations in the first instance, so far as the loss of rateable value is concerned. The local authority must be assured that it is not going to be the worse off by reason of any-loss of rating value brought. about by this scheme.

    We are not contemplating merely a period of five years. We are contemplating the introduction of a permanent new system. We have to look, not merely at to-day, or even at five years hence; we have to look at, 10 years, 15 years, 50 years hence, and to consider, therefore, how this new principle can be adapted to the future as well as to the present. The further we get away from the starting point, the further we get away from the time when it is possible-to calculate what will be the difference between the old system of rating and the new, the more academic all those considerations will become, and it will be possible gradually to shift one proportion after another of the total grant from the first basis on which it is allocated, which has special reference to the amount of rateable value and rate loss, to the general overriding principle which, I have named, under which the needs of the locality will be the first consideration.

    If I have made that clear, I think hon. Members will sec, what some of them perhaps have not seen before—and I include in that both the right hon. Member for Carnarvon Boroughs and the right hon. Member for Central Edinburgh—that any statement that in this scheme we have had no regard to the needs of the so-called necessitous areas, that there is no direct appeal to the necessitous areas, that necessitous areas are going to get no more than any other areas, is absolutely unfounded, because that is the essence of our scheme, that not only is industry going to get this direct relief of three-fourths of its rates, but that by the new arrangement of allocation of the Exchequer grant the money from the Exchequer is going to be directed to those very necessitous areas which have pleaded with us so long, and for which it has been found difficult before to find a remedy.

    This is a solution of the necessitous areas problem which I myself have constantly advocated in this House. The right hon. Gentleman referred to the time when I came to him on a deputation. I did not know then, but I knew the moment I got into office, what the practical difficulties of finding a method of distributing this money were, and those difficulties were present to the mind of the hon. Member who was Parliamentary Secretary to the Ministry of Labour in the Labour Government. The hon. Member could not find a formula for the distribution, and why not? Because there was no uniformity of valuation throughout the country, and that much-abused Rating and Valuation Act of 1925, as I have stated to this House over and over again, was the first essential preliminary step to the possibility of finding a formula which would enable us to carry out a scheme which at last we are able to undertake to-day.

    I want to address myself to one or two criticisms which were made by the Tight hon. Gentleman the Member for Carnarvon Boroughs. He spoke of the unfairness, as he said, to the other members of the community of a system under which you might get new factories springing up, throwing new burdens upon the community, but only contributing a quarter of what other people were contributing, and he said that three-quarters are going to be thrown on the rest of the community. Is it a fact that new factories always bring with them a troop of workpeople into the area into which they come? Is he not aware that you can find many cases where a factory is in one local authority's area and a population which works in that factory is in another local authority's area? How is this scheme going to remedy that? tinder a scheme which at every quinquennial valuation takes into account the population of the area, that area which has to carry the burden of that population, which has to supply its needs, will get the increased grant from the Exchequer under the formula, and the fact that it will provide at least a quarter of the rates in its own area may be taken, I think, to constitute at any rate a reasonable contribution to the direct services which are necessitated by the presence of the factory there.

    I am sorry to interrupt, but this is very important. Does this mean that the Exchequer will contribute in respect to the new factory the three-fourths which is lost to that particular area?

    No, but the right hon. Gentleman is picturing a sort of migration of the Children of Israel with every new factory that starts, whereas the fact is that, assuming even that it does employ the population in the area, it probably begins by employing only some people who are already there. It may no doubt in time attract a larger population, and in time that population will have children, who will require new schools to be built for them, but in the meantime the quinquennial period has elapsed, and there is a revaluation of the situation, under which all these inequalities will be redressed; and the right hon. Gentleman must not assume that the local authorities are going to begin their five years period with the very minimum amount which they can derive from their rates at the beginning of the period.

    My right hon. Friend the Chancellor of the Exchequer mentioned that, included in the finance of the scheme, was a sum, which he had put at £3,000,000, which was to ease the way in the transition. The right hon. Gentleman said that that was grossly inadequate, but how does he know it is grossly inadequate? He apparently based that opinion upon some extraordinary misapprehension which led him to suppose that, because railway assessments had been reduced to an extent which would reduce the rates obtainable from railways by a sum of £2,000,000, that £2,000,000 out of the £3,000,000 would be absorbed for that purpose. But surely the right hon. Gentleman must see that he is confusing two entirely different things there. The question of the lowering or raising of the assessment at a recurring valuation has nothing to do with this scheme. If the assessments of railways had been lowered, as they no doubt will be lowered, on a. new valuation, the local authorities would have to bear the burden of that themselves in any case. It is not affected by our scheme, and as matter of fact the net result of a revaluation will not be a lowering, but a raising on the balance of assessments throughout the country.

    This £3,000,000 which my right hon. Friend is setting aside is for a different purpose entirely. It is for the purpose, which I will come to in a moment, of enabling larger areas to be constituted, and it is for the purpose of assuring the local authorities that in the block grant which they are to receive there is a margin for the development of their services during the five years. I entirely agree with the right hon. Gentleman opposite that we must take care, while we discourage extravagance, at the same time not to curb the opportunity of local authorities at least to bring their services up to a minimum standard of efficiency. We have provided for that. As to whether the £3,000,000 is inadequate, I say that at this stage nobody can say whether it is adequate or inadequate. I could not say myself, although I have naturally, I think, better sources of information than has the right hon. Gentleman. I do not know whether it is enough or too much. All that. I know is that my right hon. Friend has told me he has put that sum aside, and that he hopes I shall not want the whole of it!

    I must hurry through the rest of what I have to say, but I will add a word about the valuation ascertainment. I cannot help thinking that the right hon. Gentleman, in putting conundrums to us about the butcher, baker and candlestick-maker, was really descending to rather small trivialities. There are difficulties. I am not denying that for a moment. There is the question of the definition of a productive industry, which is one of very great difficulty, but surely he is not going to suggest that a huge, comprehensive, beneficial scheme of this kind is going to be held up by difficulties of that sort. We had exactly the same sort of difficulties put up to us over the question of the rating of machinery, where there was to be a distinction made between one kind of machinery and plant and another, but we got over them, and we can get over these, and, although I do not doubt that it will be o., question which will have to be carefully discussed and on which we shall be glad to have suggestions, on the other hand, I am quite convinced that it is not a problem which it is beyond the wit of man to solve.

    The right hon. Gentleman made a more serious suggestion, which, though I am not easily surprised by anything which he says, I must say did a little shock me. He suggested that the fact that the Exchequer was going to pay three-quarters of the rates of productive industry would lead the assessment committees and quarter sessions to raise the assessments of the industrial concerns in order that they might draw to their districts a larger contribution from the Exchequer. I almost think the right hon. Gentleman must be basing that singular view on some local experience with which I am not familiar, but I cannot think that considerations of that kind would really influence such responsible bodies as assessment committees and still less quarter sessions. But I would say this to him further, that, of course, in a matter of this kind the Treasury must be protected. I am not suggesting that they must be protected against a wilful abuse of power, but there might easily be a mistake, which, if it were made, would cost the Exchequer money, and, therefore, of course, the revenue officer will have to have a part in these proceedings, and he will have to have a say and be entitled to protest, if he thinks the assessment of a factory is being put too high.

    What are to be the results of these block grants in the larger areas? It will mean that there will be a greater incentive upon local authorities, a greater opportunity to develop their services, and I believe it will provide that check upon extravagance to which the right hon. Gentleman the Member for West Swansea encouraged me to devote my attention. Under this system the local authority will know that a fixed contribution is coming to it every year for a period of years. I hope that will result in their making their balance-sheets, not for one year, but for five years, and that they will draw up regular programmes of expenditure, and I am quite certain of this, that as any rise in expenditure will have to come out of the pockets of the local householders and shopkeepers, who will be responsible, that will be an even greater inducement to economising, to seeing that they get the best value for every penny that they spend, than any other system that could be devised.

    I wish I had more time, but I should like to say this upon some concluding phrases in the speech of the right hon. Gentleman. He drew attention to the amount of the burden of rates upon the working people, and his own illustration was drawn from the case of men who are working short time. He pointed out that in their case the rates might mean a considerable proportion of their income. Does he not see that a system like his, which fritters away the resources at our disposal by spreading them out all over the community, which does not supply sufficient stimulus to industry and which gives merely trifling relief to the working man, cannot be half as good as a plan that is going to give more employment? That will make all the difference. I commend this scheme to the Committee, imperfectly outlined as it may have been, as one that is going to bring fresh life and hope into our industry, percolating through all our community and through every section of industry, and at the same time bringing about the long-needed and much desired reform of our local government, which will strengthen instead of weakening it, which will give it fresh initiative, and which will go down in history as one of the great landmarks in our legislation.

    Question put, and agreed to.

    British Income Tax And Irish Free State Income Tax

    Motion made, and Question proposed,

    "That an agreement making such alterations in the agreement made the fourteenth day of April, nineteen hundred and twenty-six, between the British Government and the Government of the Irish Free- State in respect of double Income Tax as may be necessary in consequence of the alterations in the British Income Tax Acts effected by the British Finance Act, 1927, and of the alterations contemplated in the Irish Free State Income Tax Acts be confirmed."—[Mr. A. M. Samuel.]

    Two years ago, a very elaborate agreement was arrived at between the Free State authorities and the British Government, and I should like to ask the Chancellor of the Exchequer what are the alterations contemplated in the Irish Free State Income Tax that will be brought into force under this Resolution? As the right hon. Gentleman knows, people living in the Irish Free State and also in this country are subject to double Income Tax, with certain rebates, and I would like to ask him whether the present conditions are to be continued in exactly their existing form, and what are the principles of the new Resolution which he is proposing to-day? Can he tell me exactly what they are, as the present system is very complicated? Is he going to make them more simple, or can he say whether there is likely to he additional difficulties in getting the rebates?

    Broadly speaking, the effect of the relief provisions of the new Agreement is to make the double resident liable, in all, to Super-tax, Income Tax and Surtax for 1925 to the same extent as if that taxpayer had been resident only in the country with the higher rates of tax. The Resolution makes practically no alteration in the position under the Agreement of April, 1926. As I anticipated that my hon. and gallant Friend would ask a question of this kind as to the Agreement which the Chancellor of the Exchequer signed yesterday, and as it is complicated, I have taken the precaution of writing a précis, which gives an explanation of the position, and, with the permission of the Committee, I will read it:

    "The new Agreement gives double Income Tax relief to double residents for the year 1928 on a different basis from that on which relief would have been given if the Agreement of the 14th April, 1926, had remained in force unaltered. Under the 1926 Agreement, relief would have been given for 1928 by reference to double Income Tax and Super-tax payable for that year. Under the new Agreement, which has been rendered necessary by the introduction of Surtax, relief for 1928 will be given as follows:
  • (a) relief from double Super-tax payable for that year, and
  • (b) relief by reference to double Income Tax and Surtax payable for that year.
  • Relief under paragraph (b) will be given in two instalments—against the Income Tax payable on the 1st January, 1929, and the Surtax payable on the 1st January, 1930, respectively."
    No change of principle has been made. In order that my hon. and gallant Friend may be in full possession of the explanation, I will send him a copy of the précis.

    Question put, and agreed to.

    Resolutions to be reported upon Monday next

    Committee to sit upon Monday next.

    Rubber Export Restriction Scheme

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

    In the previous Debate the right hon. Gentleman the Minister of Health said that the Budget statement had been the subject of attacks at so many points that it was impossible for him to reply to them all. By some curious process of thought on the part of the right hon. Gentleman, that was considered to be a commendation. That being so, I will take the consideration of Government action out of that field and bring it into contact with the criticisms which have been showered at the Government during the last two or three days in connection with another matter. I would call attention to the extraordinary transaction for which the Government are responsible, affecting a very important industry in this country and in certain of our Colonies. I refer to what the Government have done in removing the restrictions of the Stevenson scheme from the rubber industry, the result of which, according to the experts in the trade, has been to depreciate the value of stocks in hand by something between £25,000,000 and £30,000,000, and reducing the market value of shares by something like onehalf—a sum equivalent to £100,000,000. It may be that those figures are a little bit doleful and that the position in which the industry finds itself to-day may be, at any rate, partly temporary; but no spokesmen of the Government can deny the fact that awing to a statement made by the Prime Minister outside this House, on the 8th February, the rubber trade was thrown into a most tragic panic on the 9th. Not content with that, on the 4th April, by a statement which the right hon. Gentleman made in this House, he renewed the panic. A suspension took place in the business in rubber shares and the stock-in-hand had to be sold at prices of a most sacrificing kind on account of the panic state of the market. We must add to the survey of our own losses the losses borne by the growers in Ceylon and Malaya, because we were responsible for them.

    What was the occasion of this disastrous action, handled so extraordinarily badly by the Government? There had been an agreement imposed by legislation, which we prompted and for which we are responsible, that exports of rubber from Ceylon and Malaya should be determined in a special way. The rubber industry had been subject to far more speculation than was good for it, and it also suffered far too many feverish episodes in the interests of its own good health. Uncontrolled, two clear things happened. First of all, the agricultural side of the rubber industry had been neglected, trees were badly planted and the economic resources of the industry were being wasted. The second thing that had undoubtedly occurred was that the industry had never been allowed to settle down to normal conditions. Such was the effect of private enterprise and unlimited competition in this industry. Everybody engaged in it saw, before 1922, that prices had to be stabilised somehow or other, that agricultural economy had to be encouraged, arid that as far as this House was concerned British industry must be protected in a way that it had not been protected before. Therefore, the Stevenson scheme was adopted.

    I will not go into the details of the Stevenson scheme, but it meant that exports were controlled and that protection was given by an official declaration that certain percentages of rubber might be exported, but a penalty in export duties was imposed which made further exportation prohibitive. That scheme was accepted and was worked. There were, of course, certain interests in the rubber industry who did not accept the Stevenson scheme. We always find that. Our economic text books are always telling us that if we were only wise, farseeing, deep-seeing and high-seeing we should find that all our economic interests would be saved; but in a society which was created in rather a destructive way that is not quite so apparent, and it does not always square with experience, especially if the experience is a narrow-visioned one. In this rubber industry the producer had his interest, the financier had his interest, and the user had his interest. Nevertheless, it was perfectly certain, and I do not think anyone would deny it, that the general effect of the Stevenson scheme was to stabilise the industry and to protect British interests in that industry. Answering a question on the 10th May, 1927, the Secretary of State for the Colonies said:
    "I see no reason to suppose that in the long run the effects"—
    that is, the effects of the Stevenson scheme—
    "will be disadvantageous to British interests."
    An hon. Member who sits on the Government side of the House asked the question:
    "Is it not a fact that the Stevenson restriction scheme has saved British rubber plantations from ruin and bankruptcy?"
    The answer of the Colonial Secretary was:
    "That is undoubtedly the case."—[OFFICIAL REPORT, 10th May, 1927; cols. 199 and 200; Vol. 206.]
    That was as recently as 10th May, 1927. That was the Colonial Office view at that time, after all these rival interests in the industry had said everything they had to say. The Colonial Office had weighed them all up, had listened to them, was in possession of all the statistics regarding exports, both British and Dutch, and had come to the conclusion that this particular scheme had undoubtedly saved British rubber plantations from ruin and bankruptcy. It is perfectly true that the scheme was in that way one created by what we might call artificial economic and industrial conditions. It also was true that nearly everyone assumed that the scheme was a temporary one. It was created for a specific purpose, and as soon as that purpose was effected the rubber industry by its own internal organisation, control and discipline, and by the wisdom it had gathered during those years, could run without anyone interfering.

    First of all, let this House remember that for this scheme the Government alone were responsible. The Government got the necessary legislation passed in Ceylon, and it got the necessary Orders issued in Malaya. If there were any artificial conditions imparted to this industry, the Government were responsible for those conditions, and when those conditions had to be removed it was the Government's duty to see that the conditions were removed in such a way that the rubber industry would not suffer grievously by the change. The trade had reacted to them; it had accommodated itself to them. Shares had been sold on these conditions. The price of material had been regulated and determined by them, and the distributive methods and the competition of the various sections of the trade had been determined by them. That is the thing that we have first of all to remember. For what happened the Government alone are responsible. Whether this scheme was a good scheme or a bad scheme, a workable scheme or an unworkable scheme, it was the Government's scheme, and the Government have to take the responsibility for taking it off in the same way as they took the responsibility for putting it on.

    How has the scheme worked? Again, I am not going into all the details. I am going to mention only two features which are essential to an assignment of the heavy responsibility that now rests on the Government's shoulders. First of all, in every quarter surveys were made as to prices. Reassessments of the exportable quota were made. Then at stated intervals the Secretary of State for the Colonies announced what was going to happen to the industry under the scheme during the succeeding three months. Another feature was that the Secretary of State had an Advisory Committee to guide him in the working of the scheme. I assume that he selected the members of the Advisory Committee because he had confidence in them. Every member of the Committee was an expert of some kind or other in the operations of the trade. Then what happened? What was the, course of events that the Government should have made up its mind that its work had come to an end, had reached the apex of its beneficence and had to be taken off?

    The trade, I think very reasonably, expected that when the proper announcements were made—I might almost call them statutory announcements—if the Government contemplated any change, the announcements would be communicated to the country. The trade also was surely justified in the most reasonable way in assuming that if any change was to take place, certainly any big change like the removal of the whole scheme, the Secretary of State for the Colonies would have consulted the Advisory Committee that was supplied to him for the purpose of guiding 'him on matters like that. On the day to which I have referred, 10th May, 1927, when this question was brought to the notice of the Colonial Secretary by the questions of hon. Members belonging to' his own party, he used this expression:
    "I have the advantage of advice from a strong committee representing the various interests concerned, and I am continually taking the advantages or disadvantages of a scheme into consideration."—[OFFICIAL REPORT, 10th May, 1927; col. 199, Vol. 206.]
    What is that statement meant to imply? That whatever action he agreed to he would take the advice of his Advisory Committee first of all. It does not mean, of course, that he would act on the advice of his advisers. No Minister who has held office would say that. I do not accuse him of not doing that, but I do accuse him of not taking the advice of the Advisory Committee at all. The fact of the matter is that the Advisory Committee was ignored altogether. The right hon. Gentleman himself told us the other day, very unwillingly—I sat and not only listened but saw him—that he did not take the advice of his Advisory Committee but that the members of that Committee were communicated with privately. Is the right hon. Gentleman going to get up this evening and say that that carried out the pledge implied in the answer by him which I have just read. He has an Advisory Committee and what he tells them he tells them individually and separately, never asking them to come and see him. He writes a letter to them and he admits that he did it privately. At any rate he has removed privacy from any communication he made to them. He writes them individually a letter saying that he proposes certain things, "But you are not going to be consulted, and I am: only giving you the information so that you may know."

    That is not the function of an Advisory Committee. The Colonial Office were ignored. It was not only that the right hon. Gentleman ignored his Advisory Committee, but he himself was ignored, for apparently when the Government made up its mind to take some action in this matter, the prompting did not come from the Colonial Office; it did not come from the Advisory Committee. The prompting came from some interests outside, and those interests have not yet been disclosed. Therefore, when it came into the hands of the Government, as opposed to the Colonial Office, a new Committee was brought into operation, and that new Committee, brought into operation without any knowledge of what had gone before, without any expert knowledge to guide them in weighing the value of evidence presented to them, began its work. That Committee was the Civil Research Committee. Regarding that Committee, there is a good deal of mystery, The names of its members have not been disclosed. Its report is not to be published, and its advice, either in specific terms or in general, is not to be communicated to this House. There have been speeches made in public regarding the Committee and the House is entitled to take some notice of them. There was a speech made by Mr. James Fairbairn at the Annual General Meeting of the Barrier and General Finance Company. That company is interested in rubber. I quote from the public press and so I am not giving any thing away. Mr. James Fairbairn said about the Committee:
    "Those who gave evidence before this Committee were asked that, should they recognise any of 'the members of the Committee, they should not divulge their names."
    What a childish thing! What an absurd and childish thing! It shows the spirit and the capacity for the handling of great financial interests like this. The quotation goes on:
    "As to Sir Herbert Hambling, who is the Chairman, had the Prime Minister made the smallest inquiry as to his personal leanings, he would have found out quite readily that Sir Herbert Hambling, from pronouncements made as Vice-Chairman of Barclays Bank, had clearly indicated that he was opposed to any form of restriction such as the Stevenson scheme."
    That is published. The Government ought to tell us whether that is true or not. Did the Government deliberately appoint as Chairman of this special Committee, after having set aside the Advisory Committee, after having put the Colonial Office on one side—did they knowingly and deliberately appoint as Chairman of this Committee a gentleman who had already in public and in private expressed his views that the Stevenson scheme ought to be terminated? Whoever speaks for the Government to-night must give a categorical reply to that question. This gentleman goes on to say:
    "I am credibly informed by a member of one of the groups who gave evidence that he found Sir Herbert Hambling a distinctly hostile chairman."
    8.0 p.m.

    Is that true? So much for the committee. The evidence given to the committee was private. It has never been published, and those of us who are outside know nothing about it. Questions have been put to the Prime Minister, again and again, to which he quite frankly gave the reply that committees of that character are not public committees, that their evidence ought not to be communicated to the House, and that the Government took upon themselves the responsibility of acting upon their recommendations or not doing so. From the Constitutional point of view, if I may use the term, I range myself alongside the Prime Minister in that respect. But unfortunately the evidence in this case has got out, and if Ministers, especially Prime Ministers, in relation to these national economic matters, are going to make this claim to a purely personal advisory committee—which anyone who has occupied even for a day, the position of Prime Minister knows is of enormous value, and no Prime Minister I hope will ever go into that place without having such a committee to advise and assist him—they must be exceedingly careful as to how they use that committee. They cannot possibly use that committee in the rough and ready way in which a public committee is used, and that is what the right hon. Gentleman has done.

    Surely if the right hon. Gentleman had sat down for five minutes by the fireside and thought over what he was doing and the consequences and had said to himself, "If I appoint this Committee to take evidence and this gentleman of known opinions is going to be chairman, can I regard that Committee as one whose evidence will not only be considered by me as private, but whose evidence, as a matter of fact, will be kept private?" I am perfectly certain that if the right hon. Gentleman had given five minutes' consideration to that simple practical problem, he would have come to the conclusion that it was absolutely impossible. As a matter of fact, those in the trade know who gave evidence. Everybody knows now who gave evidence and they do not only know that, but they know what the evidence was. Just as in the case of a committee or a commission which is taking evidence, let us say on the question of lunacy, I do not require to waste my time in reading through all the evidence of certain witnesses in order to know what the effect of their evidence will be, so, in this case, if Mr. Smith is a witness the trade know precisely what his point of view will be and the same thing applies to Mr. Brown and Mr. Robinson. Therefore, the trade know precisely what was the evidence submitted to the Committee. They also know now that either the Committee reported against the evidence, or that the Prime Minister refused to take the advice of the Committee which was set up to advise him. Either one or the other is bound to be true. The evidence was unanimous in its main features, so they say. So I have read again and again and so I am told by those interested in it. There were certain variations, there were slightly different angles of viewing matters, there were variations in method, but what I may call the trunk, the main fundamental body of evidence was unanimous, and it was opposed to the decision to which the Prime Minister came.

    Then we have to consider how the Government handled the situation. We have brought it to this point. With all the operations of the Committee, and the queer judgment used in the appointment of the Committee, and the equally strange judgment used in the kind of Committee appointed, we have got to this point—that the Government had made up their mind, either in accordance with or contrary to the advice of that special Committee, that the Stevenson scheme must go. And how is it to be done? Let me remind the House that as late as 21st October last year the Colonial Secretary issued the following notification through the Colonial Office:
    "It is officially announced that it is not proposed that any change shall be made on 1st November next in the Regulations which operate at present governing the export of rubber from Ceylon and Malaya. The Governments of the territories concerned will be asked to overhaul the machinery of the scheme with a view to increasing the efficiency of its working."
    So far from their being any indication there that the Government were changing their mind against the scheme, not a single person could read that statement without coming to the conclusion that the Government's determination to support the scheme had been strengthened rather than weakened and that it was, as a matter of fact, communicating with the Governments concerned in order that the scheme might be so amended that its continuance would be made certain:
    "The Governments are being consulted on the question of whether any, and, if so, what alterations are required in the Regulations now in force."
    Then comes another sentence of even greater importance:
    "If it is considered that any changes are necessary, full right is reserved to make them as from 1st February, 1928, as long notice being given as may be practicable in the circumstances."
    That is an intimation to the trade that, if, in spite of these inquiries which the Government are making, in spite of these attempts which the Government are making to enable the Stevenson scheme to continue, the Government in the meantime should change their mind, then that change will be announced on 1st February, 1928. On 1st February, 1928, when what I have taken the liberty of calling the "statutory" announcement was made, that announcement was that the scheme was to be continued and that the proportions had been settled as so-and-so, but no indication was given that any change had taken place in the Government's attitude. The Colonial Office knew perfectly well when it made the announcement on 1st February that the industry expected that if there was to be any change it would be announced then. The industry concerned expected that if the Government contemplated any change it would be announced then. No announcement being made, the industry assumed, quite rightly, that there was to be no change during that quarter and that the Government contemplated no change. Then on 9th February came the Prime Minister's announcement. It was made on a special day. He did not wait for the statutory date of announcement, but within eight days after 1st February he announces that an inquiry is going to be made. Of course, a panic took place. Of course, all the fears and suspicions that enter the heart of the City were aroused, and the City is open to more fears and suspicions than any other quarter of the world. The City is the easiest upset body in the whole world and any rumour immediately becomes revolutionary in the City provided it deals with finance.

    On 9th February, the Prime Minister went out of his way to make an announcement which was bound to create suspicion. He did not even take the trouble to study the psychological effect of that announcement or seek to diminish the evil results by choosing a normal day. He did it as a special matter, of special importance, on a special date. He was questioned on the 13th March as to what he meant to do, how the machinery was to be operated, how the Committee was constituted and so on. These were very proper and legitimate questions and if he had been able to give definite and specific answers to several of them, he would have allayed a good deal of the panic that was raging. What was his attitude? On 13th February he answered a series of questions, and every answer he gave was a suspicion in itself. He was either unwilling to answer or did not know the answers to the questions, but the sum total of the effect of his answers on 13th February—and he can refresh his memory by looking up the OFFICIAL REPORT as I have done—was to make the industry more and more suspicious of what he had in mind and what the result of his inquiry was going to be.

    On 15th February he was again questioned, and he gave a pledge that every consideration of the industry would be taken into account. He gave another curious pledge, namely, that the Treasury interests would be watched. On 20th February, he renewed his pledge that in the time and the manner of the earlier proposal all British interests would be considered. On 5th March he gave precisely the same assurance and on 4th April he made his announcement of a scheme with which nobody agreed and which brought a second panic upon the market. Could any handling of a situation be more maladroit than that? It was a delicate question. It was like a surgeon touching the inflamed nerve of a patient. He must have known that he could not play fast and loose with an industry like this which had been rather notorious for its feverishness. He must have known, as a man who can look at things fairly and objectively, that when 1st February had passed without an announcement and when he chose 9th February, an odd date, an unexpected date, on which to make this announcement, what effect it would have. He must have known that the way in which he answered these questions was adding to the difficulties of the industry. Then on 4th March, as I say, he made an announcement with which nobody agreed. He announced that the Stevenson scheme would be terminated. A good many people agreed with that. A good many of the rubber interests never believed in the Stevenson scheme, though the Colonial Office said the Stevenson scheme had saved British rubber interests from bankruptcy. But that was not the importance of the Prime Minister's announcement. The importance of the announcement was how the Stevenson scheme was to be stopped. Sir Eric Geddes, who is not in favour of the Stevenson scheme, and who is very glad that it is going to be stopped, made this statement after the Prime Minister's announcement. I quote from a paraphrase of his speech in the "Economist." It says:
    "Sir Eric Geddes revealed the interesting fact that the Rubber Growers' Association, the India Rubber Manufacturers' Association, and the Society of Motor Manufacturers and Traders had unanimously suggested to the Committee"—
    that is the Committee which the Prime Minister set up—
    "which decided the fate of the scheme, that if restriction was to be abrogated, its demise should be delayed sufficiently to enable the industry to liquidate its stocks. To this end, an interim period of three years was suggested. While Sir Eric regretted that the joint advice of the growers, the manufacturers, and the principal consumers of rubber' in this country had not been followed,"
    he nevertheless made no objection. While making no objection to the Prime Minister's scheme, he did regret the method by which the scheme was to be terminated. This is not a question whether the Stevenson scheme should be terminated or not. It is much more than that. It is an accusation made against the Government for mishandling the situation. It is an accusation that the Government, by their own action, have depreciated stocks and diminished share values by a sum, which is estimated between £120,000,000 and £150,000,000. It is perfectly clear from this recital that, first of all, the Prime Minister ought not to have made his announcement when he did; that if he wanted advice about the rubber industry, and wished to be put into possession of the facts, he ought to have done it in the ordinary quiet way. To announce an inquiry at that time was, at any rate from the financial point of view, tantamount to a criminal act. The second point is that the Advisory Committee of the Colonial Office ought not to have been overlooked, and no scheme of decontrol ought to have been launched without the advice of that Committee and without its consent. The third point is that the time when the change took place was so badly chosen, that anybody who had any knowledge of industrial sensitiveness, would never have chosen it at all.

    It is clear that when this scheme was to come off, the Government's action. preparatory to taking it off, ought to have been to try and get the 100 per cent. exportable quota approached; they should also have chosen the time when stocks in hand were low. As a matter of fact, they chose a time when the exportable quota was not especially high, and when stocks in hand were especially high. They chose a time when balance-sheets were being made out, when the stocks had been valued in the balance-sheet at something like 1s. 6d. a lb.; and before the winding-up of last year's business had been given effect to. They depreciated the value of those stocks from 1s. 6d. to something like 8d. or 9d., thus taking off 10d. for every lb. of rubber value in the stocks which had been entered in the balance-sheets that had just been made out, and were on the way from Ceylon and Malaya to London. They did things that may have been necessary in time, but they did them with the maximum of clumsiness and the maximum of loss.

    If this party had been sitting there, and if we had been in office, and had done it in this way, a howl of execration would have gone up from one end of the country to the other. We would have been told that we were the enemies of everybody who is investing money, that we were absolutely indifferent to the loss of anybody who has invested money in anything; we would have been told, especially by the Home Secretary, that we were prompted by Moscow influences and suggestions, and he would have wanted even to raid our private houses, for somebody would have told him, probably the hon. Member for Hitchin (Major Kindersley), that we had documents in our private possession to prove that what we had done with the rubber industry was done because we had been asked to do it from Moscow. What is more, every Tory Member of this House would have gone into the Division Lobby against us. There is not a single member of the Government party, if they had been in the House with us sitting on that bench, and having done what their own Government has done for them in this industry, but would have gone into the Lobby against us, and would have gone in honestly because they would have fully believed it. They would have been perfectly justified in taking the maximum political activity to show us up both in the House and in the country. There would have been quotations for the next generation published by the Conservative headquarters about how we mishandled the rubber industry and lost the hard-working thrift investors a sum of from £120,000,000 to £130,000,000, and they would have finished up with a great peroration: "Labour again has proved itself absolutely unfit to govern." I confess that if that accusation could have been made successfully against us for once in my life I would have agreed with what was published by the Conservative headquarters.

    The House will perhaps allow me at the outset a brief personal explanation. I have in my commercial career been a director of only one rubber company, and I resigned that four years ago, when I retired from the East. Incidentally, it was a British company in Java, and we voluntarily restricted ourselves in 1922. Ever since I have had any money to invest I have invested it in rubber, but my present disapproval of my own party's action is in no way prompted by the small losses which I have experienced, in common with all other investors, as, fortunately, my investments are most moderate. I believe I am one of the few Members in the House who have any first-hand knowledge of the Straits Settlements, Ceylon, and the Federated Malay States, with especial reference to the rubber industry. It was my good fortune in 1904, when I first went out there, to make the acquaintance of the pioneers of this great industry. Many of them have passed on, but some of them are working in London to-day, and it is through my acquaintanceship with them that I retain my interest in the industry, and such knowledge as I possess of the parlous conditions into which this great industry has been thrown since 9th February.

    My case can be stated in a sentence or two. I have no word of disapproval to say about the removal of the rubber export restrictions. I have always been an anti-restrictionist, and I always shall be. I hate Government control, because I have seen a great deal too much of it in other directions. It always results in trouble to the industry which is destined to be benefited by it, but all my case is summed up in one small question. Could this removal of the rubber export restriction scheme have been done in such a way and at such a time as would not have inflicted these appalling losses on a very valuable industry, and not have thrown tens of thousands—if you like, hundreds of thousands—of perfectly inoffensive investors in this industry into anxiety, and in many cases into something worse, as I shall show later if I retain the patience of the House? I will only say this regarding restriction. There is no doubt that in 1922 it was adopted as a desperate remedy, as a desperate alternative, to prevent bankruptcy. I was in the East at that time, and a director of the only rubber company of which I have been a director, and I saw the repercussions out there. There was a miasma of utter gloom and despondency over the whole rubber world, and waiting on the outskirts of that miasmic zone, if I. may use that term, were three or four syndicates with unlimited money behind them, of which I had personal knowledge, and I will ask the house to accept my word for it. They were waiting to buy up such plantations as had no alternative except bankruptcy in front of them. [Interruption.] The right hon. Gentleman the Member for Derby (Mr. J. H. Thomas) says what I had hesitated to say quite openly, but it was American money. I know that. It was a question of days, a question almost of hours—until the restriction scheme was approved.

    What has that scheme done? If I may be permitted to give the only figures with which I propose to weary the Committee, in 1922 there were 460 British rubber-producing companies, and 21 per cent. of them only were paying any dividends at all. In 1927 there were 512 British rubber producing companies, and 95 per cent. of them were paying dividends. That is what restriction has done for the rubber-producing industry. There is one more fact which I think is lost sight of by a great number of people who have taken part in discussions in and out of the House, and that is that the rubber-producing industry is owned for the most part by tens of thousands, or hundreds of thousands, of small investors. That is a fact which is beyond dispute. You may call them what you like, call them greedy, say they are speculators, but the fact remains that for the most part the industry is owned by hundreds of thousands of small investors. It has been my lot to read countless letters and a number of articles in the Press, and to hear statements made by people in conversation who, with great respect, should know better, using as they do ponderous platitudes—this is the only term to apply to them, though I hope I shall be acquitted of any desire to be offensive—where they say that restriction must go at some time—it is perfectly true; that restriction is uneconomic—perfectly true; that re- striction enables the Dutch to reap where the British have sown—perfectly true; where it is said that in a year or two the British industry will be on its feet again and be sturdier and healthier—perfectly true; and when they finish by saying that for the next two or three years there will be no dividends, that it will be a very difficult time and that uneconomically-managed estates will go bankrupt, again I agree. Those are all platitudes which have appeared, with great respect, in the Press. Those statements, however true, lose sight of one salient fact, and that is that it is no earthly good saying to hundreds of thousands of small investors who, rightly or wrongly, own this very valuable British industry, that in two or three years everything will be all right again, that though in the interim they will have no dividends, and some of their concerns will go bankrupt, that in the long run it will be all right.

    I am quite sure that in the long run it will he all right. I am perfectly and absolutely certain that nothing except the production of synthetic rubber can possibly hurt this valuable British industry. But here we have this great industry, which has been of incalculable benefit to this nation in helping us to pay the American debt, treated in this way, without—subject to what we shall hear from my right hon. Friend— any reasons being given for that action. I should like to say at once that these objections which I am putting forward and the profound disapproval I am expressing, must all be regarded as subject to any explanations we may have from the Secretary of State for the Colonies. The right hon. Gentleman the Leader of the Opposition has made it perfectly plain that we who thought we knew something about the industry were very disgruntled by the sequence of events from November, 1927, to February of this year. The shareholders who own this great industry are, after all, very reasonable people. If they had been given some reason or reasons for this very drastic action, I am convinced that there would have been no outcry. I am convinced, classing myself as a rubber shareholder—I have already made a clean breast of my small holding—that we should have taken the ordinary course that every ordinary citizen does take. We should have said "This is done in the public interest." But we have been given no reasons at all other than those which the Under-Secretary of State for the Colonies gave in Kuala Lampura some weeks ago, in which he said that certain facts and figures had been. placed before the Cabinet in the early part of this year.

    Again, subject to what my right hon. Friend may say, may I also give certain facts and figures? A great deal has been said about the on-coming of the Dutch producers. It has been said that the Dutch are reaping where we have sown. I admit that that is so, to a certain extent. In 1922, the year in which the restrictions came on, the world produced 400,000 tons of rubber. The British share of that was 75 per cent., and the Dutch and other rubber, that is Brazilian, Indian, and so forth, was 25 per cent. In 1927 the world's production was, roughly, 605,000 tons, and the British share of that was 63 per cent, and the Dutch and other rubber, 37 per cent. I agree that those figures are ominous, very ominous indeed, and I think they ought to cause us to think whether it was not time that this restriction scheme should be raised; but I do not agree, with very great deference, that they call for the precipitous raising of the rubber restriction scheme. It may not be known to the House, though I feel confident it is known by my right hon. Friend, that at the time when the Government, in their wisdom, chose to come into the rubber situation in February, that the Council of the Rubber Growers' Association had evolved and practically completed. with the exception of one or two negligible details, a scheme which would have raised restriction over a period of about two and a-half years, or a maximum of three years, without, so far as it is humanly possible to say, any disturbance in the rubber market at all.

    I come to the question of reclaimed rubber. There has been an enormous amount of uninformed criticism on the subject of reclaimed rubber. Anybody who knows anything of this industry knows perfectly well that the chief uses of reclaimed rubber are such that crude rubber would not be used for them even if it were 4d. or 3d. or 2d. per lb. The degree to which reclaimed rubber is in competition with crude rubber is about 15 per cent. [Interruption.] Well, I give it as 15 per cent., and if my right hon. Friend would like my reference for that it is in the "India-Rubber Journal" of 15th April. It is given by the trade, and I can see no possible reason why the trade should under-estimate or over-estimate such an important figure. The figures which appear in the very admirable Blue Book issued by the Government show that in the year 1927 the ratio for reclaimed rubber was about 50 per cent. That bears out my statement that there has been a good deal of misinformed criticism upon this subject. The degree to which reclaimed rubber is a competitor with raw rubber is 15 per cent. Reclaimed rubber is a manufactured compound of rubber and several minerals, and is not directly in competition with crude but is complementary.

    I would like to say a word as to the inadequacy of the chosen method of investigation of the industry. I feel that here again the Government must have been up against a very great difficulty. By means of a private notice question to the Prime Minister which I put the day after the appointment of this Committee, I endeavoured to show that the uncertainty while this Committee was sitting would be such as to throw the whole industry into confusion, and that is what happened. On the other hand, I pointed out that if the Committee carried out their duties as quickly as they have done —I admit that frankly, and I have the greatest admiration for the way in which they handled a most difficult task—they could not possibly give an adequate Report. You cannot give a decision on a matter in which £200,000,000 of capital is involved in six weeks by the investigations in London of a committee of Men who have not been on the spot, and who have not had an opportunity of cross-examining those who have borne the heat and burden of the day. Most of the evidence considered by the Committee has reached them by cable from the East, and it would be almost impossible to do justice to a question of such magnitude in this way. If the Committee had taken adequate time, it would have taken them six months, because they would have had to go out to the East. Under those circumstances, during that time the whole of the industry would have been in confusion and even worse than what has happened. I really do not know what would have happened during that time.

    I have two more observations to make on this question. May I put two definite questions to the Secretary of State to the Colonies? Some people who have not been out to the Far East are a little confused in their geography. Singapore is quite distinct from the Federated Malay States. It is within the recollection of the House that the rulers of the Federated Malay States gave a battleship to this country, "The Malaya," and a short time ago they gave £2,000,000 to the Singapore base. May I ask the Secretary of State for the Colonies whether, before the Committee was appointed, and before they decided to remove the restrictions, the rulers of the Malay States were consulted? May I tell my right hon. Friend—I know he would not contradict the source of my information if I disclosed it, but I am not at liberty to do so—that it is estimated that the revenues of the Federated Malay States will be depreciated 40 per cent. this year as a result of the action of the Government in this matter. Perhaps my right hon. Friend will tell the House whether they were consulted or not.

    On evidence which I believe is correct, I am told that the issued capital of the rubber companies registered in the United Kingdom is £92,000,000—that figure is quite distinct from the dollar companies and the rupee companies registered in India or the Straits. The dividends declared in 1927 amounted to £17,000,000. I hope that the Chancellor of the Exchequer, who is the Minister originally responsible for putting in force the Stevenson Scheme—I am certain the Minister had no alternative at that time having regard to the fact that he sat as a Member of the Coalition Government—will be able to show us that it was a matter of extreme urgency which thus necessitates him using millions of valuable revenue. I am wondering what effect this is going to have on our revenues, and whether the right hon. Gentleman was specially consulted in regard to this very desperate step which has been taken. There is a great responsibility resting upon the Secretary of State for the Colonies, and 'I sincerely trust that the right hon. Gentleman will be able to give us some explanation which will enable me to recant everything I have said to-night. There is nothing I want more than to be placed in the position, at the end of the right hon. Gentleman's speech, to say that I have been misinformed and that I am wrong in my conclusions. If that turns out to be the case, I shall be prepared to support my party in the Division Lobby on this question. If, on the other hand, I am not satisfied in this respect, I shall go into the Lobby against my party.

    I do not want at this stage to repeat what has been already said on this subject. I would remind the House that the deplorable disaster which overtook the rubber industry came immediately after the announcement made from 10, Downing Street, that the conditions of the Stevenson scheme were to be referred to the Committee of Civil Research. I think, if the Prime Minister had to handle this question again, he would do it in an entirely different manner. We have been told by the Leader of the Opposition and by my hon. Friend the Member for Stroud (Sir F. Nelson) that various faults were committed by the Government in this matter. I would like to point out that the rubber industry in 1922 put itself voluntarily into the hands of the Colonial Office. We had the Stevenson scheme and the rubber industry consented voluntarily to accept the regulations issued by the Colonial Office. The Colonial Office was used because of its power to enforce. regulations on the various Colonial Governments abroad.

    The rubber industry was perfectly satisfied to continue with the Colonial Office. They had an advisory committee, who were advising the Minister of that Department in all the intricacies of the trade, but here you have, entirely outside the Colonial Office, entirely outside the people to whom the industry had voluntarily given powers, another body coming along and upsetting the apple-cart by issuing further restrictions and further orders. I doubt whether that is really legal. After all, the industry went voluntarily into this scheme, accepting the various Regulations in a very loyal and gallant way, and I must say, knowing the industry as I do, that the Colonial Office have every reason to be thankful to the various companies for the loyal way in which they carried out the orders which were given. Now you get another body outside the voluntary committee, a body whose chairman's views were well known in the City of London to he opposed to the scheme. It was really a loaded body before it sat, and I, for one, think that the Government as a whole are very much to blame for the present situation in which the rubber industry finds itself.

    There is another point in regard to the question of legality, as to which I should like to ask the Colonial Secretary. How far is the Colonial Office in a position to give orders to the various Legislative Councils abroad? I understand that the official majority has now disappeared from those councils, and that resolutions are now carried by the unofficial members. How far are the councils in the Malay States and Ceylon going to carry out the wishes of the Colonial Secretary in regard to giving up the restriction scheme? They have been given full powers in regard to legislation, and I should like to know to-night how far the Colonial Secretary can impress his will on them. Another point in regard to this intricate question is as to how far the revenues are going to be affected by this sudden reversal of policy. Are the rubber companies going to continue to pay the two cents per pound export duty, or are they going back to the old system of an ad valorem duty? It is all very well to charge two cents per pound with rubber at is. 6d. or is. 3d., but, when it comes to producing rubber at less than cost, it becomes almost vital to a great many companies if they have to pay an export duty of two cents per pound.

    How far is the Colonial Office going to keep on the advisory committee? Is the advisory committee still in existence, and is it going to continue to advise the Government on matters connected with rubber? I understand that the criticism which was largely made in the rubber industry of the fault of raising the pivotal price from 1s. 3d. to 1s. 9d. was directed at the advisory committee. It is all very well to blame the advisory committee for one decision, but what about the other decision, on which they were never consulted? Are we going to keep the advisory committee still in commission? Are they going to advise the Government, and are the Government going to take their advice? It is a very serious matter when a large industry dike this is in the hands of people who do not take the advice of their advisers. What other industry would be handled in this way by the Government without consulting the leaders or the various trade associations of the industry?

    I understand that the trade associations of the rubber industry tendered a definite form of advice, which, however, was not taken. I wonder whether the Government really know what they are doing in this industry—whether the experts who have been advising them really know what they are talking about? We hear that the real reason given for the change is the large increase in the use of reclaimed rubber; but reclaimed rubber is used for entirely different purposes from raw rubber. If you take £100 invested in the ordinary rubber-producing industry on a good estate, 350 lbs. of rubber are produced for the £100 invested, representing something like 1½ per cent. on the amount invested for every penny above the cost of production. But the same amount of money, namely, £100, invested in reclaimed rubber machinery, is an entirely different proposition. The more reclaimed rubber is used, the more cheaply can the product be produced, and the rubber producing industry can never compete with reclaimed rubber, simply because the reclaimed rubber is used for entirely different purposes—for flooring and other purposes where the elasticity of raw rubber is not required. The American tried to do that about a year-and-a-half ago, and they failed miserably. They put reclaimed rubber into tyres and tubes, and the whole of the tyres produced from that material were returned on their hands; and now, as everyone knows, buyers of cars in the American market insist on a clause specifying that all tyres must be made from fresh material. I, for one, think that the whole of the evidence given as to the competition of reclaimed rubber with raw rubber has been misleading from the beginning, and my friends in the rubber trade tell me the same thing.

    There is another point that I should like to raise, and that is as to what the companies which at present are producing rubber as a loss are going to do in regard to their finances for next year. The large companies, with large reserves, seem to think that, if there is a flood of cheap rubber on the market, they will be able to knock out the native production of rubber and the use of reclaimed rubber, and get rid of the weak companies; but, in doing that, even though they may be successful for a time, they will be using up their reserves, and their position at the end of that period will be far worse than it is to-day. The Government are postponing the taking off of the restriction scheme for another eight months, but, if they had made up their minds to take it off, why did they not take if off now and be done with it? Instead of that, they have done a second bad thing by keeping it on till the 1st November. The result of that, as every rubber producer knows, has been that telegrams have gone out to the East telling them to produce to the full. Every one of the companies in the East is now producing to the full, and all the surplus rubber over and above the exportable allowance is being collected out there in Malaya and Ceylon. The result will be that on the 1st November, when the release comes, there will be this flood of rubber further depressing our already hopeless market.

    Surely, anyone who knew anything about the market—and I am sure the Colonial Secretary does, though evidently he will be superseded in his supervision of the industry—must know that such a state of affairs will exist on the 1st November. I wonder if the Government can tell the trade how much rubber is at present lying in the Colonies over and above what they can export, and how much will have been accumulated by the 1st November next. We shall then know in what kind of position the industry is going to be. As far as I can see it is going to be in a very parlous condition for the next year. What about the unfortunate people who have invested their small savings in rubber companies? I reckon on a very conservative estimate the loss caused by the announcement of 8th February last is something like £75,000,000 or £80,000,000. I am certain it will be a long time before those who have interests in rubber companies will put their faith in the business capacity of the present Government. The question of Income Tax is a very serious one. This year companies will be assessed either on the profits of the previous year or, in the case of new companies, on the average of the past three years' profits. Many of these companies will have no profits at all, and where are they going to get the money wherewith to satisfy the demand of the Chancellor of the Exchequer? Are we going to get a grant from the Treasury to help them as producing industries? The more one looks into the position of the industry, and its future position, as the result of Government action, the worse it becomes. I should be glad if the Colonial Secretary can clear up some of the points which have been raised, and especially the last one about Income Tax.

    I am very glad to be able to intervene, because I believe the public as a whole, and a great number of my friends in the City, have been grossly misled by exaggerated statements, and statements which in many cases are without foundation. I should like to take one or two criticisms which came to my notice immediately after the announcement that restriction was to he taken off. The first was that owing to leakage of information, for which the Government are held responsible—Governments are held responsible, even sometimes by their own supporters, for all sorts of things—America had made lots of money at our expense. The figure was given as £50,000,000. I have it oh the very highest authority that there is no truth whatever in that statement. It may have been a few millions, but £50,000,000 is an absurd figure.

    I am speaking from personal information which I have from someone who is not in the House but is an expert, and one of the best experts in the country.

    9.0 p.m.

    There is no extract at all. I am simply saying it has been stated, even I believe between these four walls, that there has been a loss very nearly totalling to that amount. Number two is that the announcement should have been made on 1st February together with the Colonial Office routine announcement. I have never denied that I think that was a very great misfortune indeed. I wish to be quite fair. I am giving my opinion as one who has for many years had some interest in rubber. I have been a big shareholder and have taken an interest in it in various ways. I have been to a certain extent in rubber in the Dutch East Indies and have lived there 21 years, and have probably seen a great deal more of rubber than anyone who sits in the House. I agree it was an unfortunate thing that those in charge of this Committee did not keep in closer touch with the Colonial Office so that the announcement could have been made on the same day. The third one was that none of those who sat on the Civil Research Committee were rubber experts. That is a very proper thing. It would have been perfectly absurd to have had one rubber expert, we will say, who came from one particular group of planters or estate managers and sat on the Committee and gave it as his opinion. I know a great number of rubber people, managers and company directors and others, and, however much I may appreciate their advice from time to time—and naturally if one is trying to find out everything possible about rubber one listens to all one can hear—I have failed to find a great number of them who have the same opinion. The hon. and gallant Gentleman who has just spoken is rather inclined to think it was a. wrong thing that restriction was taken off. His predecessor who spoke said he had always been in favour of taking it off. I may be exaggerating to a certain extent, but my point is that the opinions expressed by those two gentlemen are not identical. If you go to Mincing Lane and see these men individually you will find that their opinions are not identical. Of course, one reads in the papers the opinions they put before the Committee, which I thought they gave under secrecy. I believe they were not published by the Civil Research Committee or by Members who sat on the Committee. How they were published I leave it to the House to guess. Last year I asked the Colonial Secretary:

    "Does the right hon. Gentleman not think the time has Dome when it would he advisable to form a small independent committee to go into the whole question and advise him as to the advantage or otherwise of retaining the Stevenson scheme?"
    To which I got the reply:
    "I have the advantage of advice from a strong committee representing the various interests concerned, and I am continually taking the advantages or disadvantages of the scheme into consideration."—[OFFICIAL REPORT, 10th May, 1927; col. 199, Vol. 206.]
    At that time evidently he did not think it was right to set up the independent Committee I suggested. The only possible Committee to set up was an absolutely independent Committee. [Interruption.] I am not here to speak on the question of the Committee. None of the gentlemen is an acquaintance of mine. The hon. and gallant Gentleman has referred to the delay in the removal of the restriction scheme. After all, that was their own fault, and it was the hon. and gallant Gentleman who himself asked the Prime Minister that restriction should not be removed. He asked:
    "Whether, in view of the long time which must elapse before the Committee of Civil Research can report on the rubber restriction scheme, he will issue a considered statement on the whole situation and, if possible, include in it a declaration that no change in the present scheme can take place before 1st November of this year."
    On the same day my hon. Friend the Member for Streatham (Sir W. Lane Mitchell) asked something very similar:
    "Whether the Prime Minister has received any communication from the Rubber Trade Association with regard to allowing the present restriction scheme to remain in force until 31st October, and whether he is now able to give the assurance asked for?" —OFFICIAL REPORT, 20th February, 1928; col. 1192, Vol. 213.]
    I understand that those questions, although they were asked in that form, were intended otherwise.

    I understand now, from discussions which I have had with friends of mine in the City, that what they meant to ask was that if there was to be a modification of the existing Stevenson Scheme it should not come into force until the 31st October. But that is not what they said. What they actually asked was, that, if anything was done, for goodness sake do not do it until the 31st October. I remember at the time that the whole House—and I was, perhaps, as capable as other Members of reading the questions—took it for granted that the rubber growers were anxious that whatever was done nothing should not be done until 31st October. I stated in a letter which I wrote on the very eve that restriction was taken off that I believed it must have been in the minds of the Committee. I did not know, and I never heard a word about the Committee, and I took no interest in it. It was my opinion that if they were going to take off restriction, they ought to have taken it off there and then. The hon. and gallant Gentleman said: "Why did they delay it until 31st October?" The right hon. Gentleman the Member for Derby (Mr. J. H. Thomas) keeps on laughing the whole time. He may laugh, but I am stating facts.

    I am sorry. I thought you were unduly flattering the hon. and gallant Member for Montrose (Sir It. Hutchison).

    May I ask the hon. Gentleman to read the question? Owing to the long time which must elapse before the Committee on Civil Research could report, I asked for a considered statement from the Prime Minister. I asked why no alteration could be made in the Stevenson Scheme before the 1st November, and I asked for a statement from the Prime Minister at that time in order to do away with the uncertainty in the industry. The Prime Minister was not in a position to make a statement.

    If the hon. Gentleman is not satisfied with that, we will take the question of the Member for Streatham (Sir W. Lane Mitchell). He asked practically the selfsame question. In any case, in my opinion, the restriction should have been taken off at once. I believe that there is a great measure of agreement in the City that even now it would he advisable to take it off, say, on 1st May. Naturally, one can understand that my right hon. Friend the Colonial Secretary will he averse to doing anything at present, because, whatever is done, probably there will be a great number of people who will say once again that the Government are wrong. — [AN HON MEMBER: "The Colonial Secretary was never consulted"]—I do not blame the speculators for getting cold feet as soon as they heard that an inquiry was to be set up, especially when one realises that rubber is, probably, one of the most speculative articles with which anybody can deal.

    Nobody can deny that the market was full of people who knew nothing whatever about the article of rubber. They had been led on, as many of us have been led on, to speculate by putting in money which they never had.—[HON. MEMBERS: "Oh!"] You may say "Oh!" I have done it myself very often. "This is a thing which is going to make you money. Put it in my dear fellow. It does not matter. Put in your last bean, and I promise you, you will make money out of it." They were led on to do it, and they have suffered these terrible losses. I do not for a moment minimise the fact that many speculators have lost a great deal of money. The fact is, that when an inquiry was set up the whole thing went panicky; everybody went panicky. I only regret that during that panic some of those who were in a position to do so did not try to stem that panic and that in the maelstrom many genuine investors were brought down and they lost their money. That is the shame of the thing. Not only that, but many dealers and reputable firms who have year in and year out done good, solid business, and many plantations and many manufacturers have been sacrificed. Why should the Government be blamed for this?

    Were they originally asked to keep their hands off when the Stevenson scheme came in? I have heard, and all of us have heard, during the last year or two, and read in the papers, of the various criticisms of the Stevenson scheme. "The Stevenson scheme was not elastic enough." "The pivotal price was wrong." "There was laxity with regard to smuggling." "The unused coupons ought to have been cancelled." "It is no use unless the Dutch come in." And so on and so forth. From those interested in the industry and all around, we have heard these criticisms. Surely, it was time that the Colonial Office, who were then responsible, should say to themselves: "Well, after all this confusion among those who are experts in the trade, surely it is time that we looked into the matter."

    The great majority of people were saying that the time had come when the question of restriction, whether it was good or whether it was bad, should be investigated. I presume, though I have no right to speak on the subject, that the Colonial Office decided that they would set up this independent Committee.

    I presume that they thought of it long before the 1st February; otherwise, it would not have been appointed. I was in Java when the question of restriction was first mooted. I attended a meeting as the representative of mid-Java when the question was discussed. This was before the Stevenson scheme was formulated. A meeting was called of all Dutchmen except two. The chairman asked our opinions. He asked three Dutchmen first, and he asked me also in Dutch, and I gave as my opinion that unless they could compel people to restrict it would be useless. We were told that there were no means of compelling them. The following gentleman who was asked said he did not speak Dutch, but that he agreed with the Dutchman who had just spoken, which was myself. We all came to the conclusion that unless there was compulsion it was useless. I was at that time entirely against restriction, because I do not believe in Government interference with business. I have never believed in it, and I never shall. I have made up my mind since that the restriction scheme did save the rubber industry in the Straits Settlements. It came at an opportune moment; but it has outlived its usefulness. The only advantage to be gained from a restriction scheme will be gained by the Dutch East Indies and, to some extent, by America.

    Figures have already been given as to production, from which it will be seen that the Dutch East Indies was fast increasing its output. In 1926 they had 1,100,000 acres of rubber land, of which only 800,000 acres were in production; therefore they had still 300,000 acres of rubber land to be brought into production. We have also the production of the Javanese. In 1922 the natives of the Dutch East Indies produced some 20,000 tons of rubber, but in 1926 it had grown to 80,000 tons. It is possible, indeed it has been predicted, that they will produce up to 200,000 tons, but personally I do not think they will because of the difficulty of labour and expense, and I do not think the Dutch will allow native grown rubber to come under restriction. Having once helped the natives to build up this industry they are very unlikely, and I know the Dutch Government very well, to curtail the output of the natives. I had hoped that the Dutch would be tempted to see that it was to their own advantage to come in under the restriction scheme, but I learn that the negotiations will not lead to this result and we shall have to fight our own battle. I believe we shall be able to do so, excellently, I regret that for a long time, for a year or more, the rubber industry will have a very difficult time, but the less this House interferes, the less talk there is amongst the rubber people themselves, the less panic there is, the better. Those engaged in the industry must go on calmly and reorganise it; must consider the best way in which they can meet competition, and then they will within a reasonable time come through all their difficulties. All that we can do here is to support all kinds of research and methods of using rubber. To the trade I say "keep calm"; to the shareholders, "sit tight, do not throw your shares away. Better times must come, if not this year at any rate we hope next year." In any ease it is absolutely useless for people to throw their shares away imagining that the rubber market can never return. An expert told me only two days ago that the low prices ruling for rubber are the only thing which will lead to an improvement. I support the action of the Government. I believe the reports are exaggerated. I commiserate with the rubber trade. They have been through a very difficult time indeed, but I consider that the Prime Minister, having once made up his mind that the rubber restrictions should go, did a brave and manly thing in saying that they should go all at once.

    I am rising at this early period in the Debate in order to afford time for the right hon. Member for Derby (Mr. J. H. Thomas) to speak; also the question which has been raised is one of such complexity that I could not possibly do it justice unless I dealt with it at some length. I must apologise to the House on account of this, but the Government have been attacked very bitterly on this question not only from those who are their normal opponents but by some of their friends, and it is essential that I should endeavour to remove the misapprehensions of both sections. If I might turn from the very helpful speech which has just been delivered by the hon. Member for North Camberwell (Mr. Campbell) to the opening speech of the Leader of the Opposition, I should like to refer to what the right hon. Member said as to the origin of the whole matter. His conception of the origin of the restriction scheme was that the effects of private enterprise upon this industry were so bad that it was necessary for the State to intervene. I am afraid it was the necessary State intervention during the War which prevented rubber from Malay reaching its market and piled up stocks, followed in 1920 by the depression in the United States, which created a situation of the utmost gravity in Malay.

    It is perfectly true, as my hon. Friend the Member for Stroud (Sir F. Nelson) has said, that the great majority of producing companies in Malay at that moment were in a position of such extreme difficulty that outside syndicates might quite easily, for a mere song, have got possession of a very great part of that important industry. It was in that very difficult crisis that the Colonial Office appealed to the late Lord Stevenson, whose ability and resource were ever readily at our disposal, to see whether some way could be devised of helping the rubber growers to do what they had failed voluntarily to achieve—namely, ration, or restrict, the industry over a period of exceptional difficulty. The Committee under Lord Stevenson met and came to the conclusion that the position of the industry at that moment was this: that the production amounted to some 400,000 tons a year as against a consumption of about 300,000 tons; that there were surplus stocks in hand, over and above the normal stocks likely to be absorbed, of 110,000 tons. That was, indeed, a position of extreme gravity, but, even confronted with that position, the first conclusion to which the Committee came in the spring of 1922 was that unless the Dutch joined in a restriction scheme could not succeed. The leak in the vessel would be too large to enable it to hold water.

    The situation continued even more serious, and towards the end of the year, having meanwhile ascertained that the Dutch Government absolutely refased to come into any scheme, but that a considerable number of British planters in the Dutch East Indies, representing something not far off one-third of the actual estates as apart from the native rubber producers, were prepared to cooperate voluntarily, Lord Stevenson recommended that undoubtedly it was a risky business but that prices were such that the attempt should be made. At that moment the British exports from Malaya represented over 70 per cent. of the total exports, and voluntary assistance from British companies represented fully 5 per cent. more. In other words, we were restricting with a 75 per cent. control and with 25 per cent. leakage. However, even with that open sore, the effect of which was bound to be felt ultimately, at the time the Stevenson scheme did undoubtedly help the industry.

    During the year following the application of the scheme, the price of rubber was kept up, on an average, to just below the pivotal price of 1s. 3d. which was aimed at. In the. following year the scheme was not quite so successful, and prices for a considerable part of the year were substantially below it. Then came those unforeseen developments which will always affect the State when it endeavours to try to control all the complexities of industry. They have beaten the most ingenious manipulators on the market again and again, and they will always beat the State. There was an enormous increase in the demand of the United States, the demand cleared off the stocks and entirely ran away from production. At once prices began to rise, not to a normal, sensible figure, but to a figure fantastically beyond the normal cost of production and normal profits. By the end of 1925 the price of rubber had run up to 4s. 6d. per lb.

    I am sorry to intervene, but this is rather important. The right hon. Gentleman has just quoted the OFFICIAL REPORT regarding the answer which was referred to by the Leader of the Opposition. I want him to say whether the answer was the answer given, not in 1924 or 1925, with which he is now dealing, but in May of last year, 5½ years after the scheme?

    I gave that answer in May, 1927, and I repeated it in April, 1928. The scheme did save the industry at that critical moment. I am not saying that in May, 1927, it was still saving it, because the situation had by then altered, and it has altered still more since then, but undoubtedly the scheme was of value at the commencement. Now we come to 1925, when it was discovered that the scheme was quite unable to secure stability of price, and that prices ran right away from the scheme. At that stage there were those who recommended the abolition of the restriction, and those who, like Sir Eric Geddes, strongly urged it, or, at least, urged an entirely fresh and independent inquiry.

    I will come to that. No, it was not. Production was not adjusting itself to the demand, because the scheme was too inelastic. It could only be modified by 5 per cent. steps, but, as an emergency measure, I myself broke the scheme and brought up the release to 100 in order to give time to look about and consider with the Advisory Committee what we were to do. The conclusion we came to then, rightly or wrongly, was not to abolish the scheme, but to endeavour to make the scheme more elastic. We approved of a modified scheme giving wider steps, and enabling the control to adjust itself more rapidly to the rise and fall of prices. At that stage we also altered the pivotal price.

    I will deal with that. From first to last I was in close touch with Lord Stevenson as Chairman of the Advisory Committee and, as I understood, he was either formally meeting or informally keeping in the closest and continuous touch with the members. I also, personally, attended more than one meeting of that Committee. I will say this. The general view of all those I had to deal with, and as reported to me by Lord Stevenson, as well as of the great American consuming interests, was that the essential thing was stability, and that to declare, when the price for over a year had been well above 3s., that 1s. 3d. was our pivotal figure would have no relationship to reality at all. At that time large forward contracts were being made for long periods, and more than that, being refused, at over 2s. At that time it seemed entirely proper and reasonable if you wished to secure stability to secure it on a figure somewhat nearer than 1s. 3d. to that which the industry thought would be the price for years to come. I say that, if there be any blame for fixing the figure of 1s. 9d. I will take it myself. I will also say it was only after weeks of discussion with Lord Stevenson that I persuaded him to come down from the figure which he wished and to make the pivotal figure is. 9d.

    Scarcely had we fixed it when once again the incalculable element entered. How far the development of reclaimed rubber entered into it—the increased figures for the period were phenomenal—I am not prepared to say. Certainly the development of native rubber in the Netherlands East Indies, and the general unforeseen elasticity of the whole supply from the Netherlands East Indies, defeated all calculations. We had scarcely settled the pivotal price at 1s 9d. when in the next quarter prices, which had been over 2s. 4d. in the last quarter and 3s. in the past year, dropped away again, and it was with the greatest difficulty, and only by considerable special manœuvring, as may be seen from the closeness of the figures, that the price was just kept to is. 9d. in the quarter July to October, 1926. Already by then the scheme, as modified in the Summer of 1926, was showing grave signs of weakness, and I was beset by hosts of counsellors suggesting new and independent inquiries and modifications. But I thought it highly desirable in the interest of stability that the modified and more elastic, scheme with the 1s 9d. pivotal figure should be given a full run, and at that date, 1st November, 1926, I announced that the scheme would run at least for 12 months, though I made it perfectly clear in my answer that it was a temporary scheme and might be modified at the end of that 12 months.

    During those 12 months naturally, and afterwards, every answer I gave in the House was with a view to giving confidence and not prematurely upsetting any section of the community. At the same time, I can assure the House that the Colonial Office was getting increasingly anxious as to the actual effect of the restriction scheme in 1926 and still more in the course of 1427. For one thing, it was becoming increasingly clear that the scheme no longer had the same effect in actually influencing or stabilising the price. It had that effect in the first two years. We endeavoured to remedy, in 1926, the failure to secure stability in 1925, but we found that it was not able to keep up the price which we had fixed. The reason was the inevitable reason, inherent in the scheme from the beginning, that restriction in the British area inevitably encouraged increased output in the Dutch area, where they got all the benefit, both of the increased price and of economic production. At the beginning of the scheme the British control of production was 75 per cent., but now, with restriction, it is only about half. When you have 75 per cent. of the industry under your control, you can achieve a 20 per cent. total reduction by restricting yourselves to the extent of 30 per cent. When you have only 50 per cent. under your control and the other 50 per cent. outside, you have to restrict yourself to the tune of 40 per cent. to effect even a 20 per cent. reduction in the total output. We were discovering that our power to fix the price was growing, less and less day by day.

    We were discovering it increasingly during 1926 and 1927. But the price, after all, is not the main or the only factor with which we were concerned. As the Colonial Office, we were concerned with the prosperity of British territories under our control and with the development of a great Empire industry. We were concerned, above all, to see that the industry in Malaya should grow and flourish. During the period 1922–1927 the output of rubber in the Dutch East Indies increased by 145 per cent., and in Malaya and the Straits Settlements it increased by 13 per cent. The Netherlands East Indies' share in the world export went up from 23 to 38 per cent. The Dutch native production, the really incalculable factor in the whole business, went up from 17,000 tons in 1922 to 100,000 tons in 1927, and all the evidence placed before the Hambling Committee, led them to the conclusion that that figure might before long easily reach from 150,000 to 200,000 tons a year. British industry stationary, the industry of our main competitors growing by leaps and bounds.

    More than that, we are concerned in this great industry with the question of competitive efficiency. The restriction of production inevitably means a loss of productive efficiency. The overhead charges on the plantations remain the same, but they work out very much more per pound of rubber when production is reduced; and the other day, on the occasion of the meeting of the Dunlop Company, Sir Eric Geddes, who after all has not shown too friendly an attitude to us in this matter, pointed out that with the restriction at a nominal 60 per cent. but really, owing to various causes, nearer 50 per cent., what would be an overhead charge of 3d. a pound on full production is to-day an overhead charge of 6d. a pound. That constitutes a very serious handicap to the British producer, not only in reducing his profits to-day, but still more in reducing his chances in the future. More than that, while the Dutch producer, with a free field in which to produce, not only saves on those overhead charges, but has every inducement to study every conceivable new developmerit—seed selection; bud grafting, anything which would increase the output—the British producer under restriction has no such incentive to efficiency.

    Could not the Minister of Mines have these arguments put before him?

    May I put another point, which concerns not so much the Colonial Office as the Treasury? The hon. and gallant Member for Montrose (Sir R. Hutchison) asked what the Treasury was doing. The Treasury is undoubtedly concerned with the fact that this great export industry in British hands, of which the product is largely consumed in the United States, plays a most important part in our balance of trade and in the maintenance of the gold standard. But it is not in virtue of the profits on the individual pound of rubber sold, not in virtue even of the profits made by companies, but in virtue of the total amount of money spent in British territory or paid to British producers on their product of British rubber; and any position which steadily undermined the British producer and transferred the rubber industry to Dutch hands was certainly not helping Great Britain in the task of holding her own in the world's exchanges. All these and other considerations, such as the very great difficulty of dealing with smuggling, the corruption of native staffs, and, in one part of the Colonial Empire at any rate —Ceylon—the growing opposition of the Legislature, made it very difficult to know how long we should be able to carry on. The hon. and gallant Member for Montrose asked by what method I was going to control those Colonial Legislatures which had an unofficial majority. The question of control does not arise now, because they are opposed to restriction, but it might have arisen in a very definite form if I had been resolved to continue to impose it indefinitely.

    All these considerations weighed in our minds, and finally, as from the Colonial Office, we approached the Cabinet towards the close of last year and asked the Cabinet for an independent, impartial inquiry. The right hon. Gentleman the Leader of the Opposition suggested that the prompting in this case did not come from the Colonial Office. I am sorry to say that he made, I think, a very unfair suggestion that there were influences outside, not disclosed, which affected the position of the Government in this matter.

    May I ask why it was that the statement that is now being made was not made when questions were put in this House as to who prompted the action that has been taken?

    The prompting in this matter came from the Colonial Office, and from nowhere else.

    The right hon. Gentleman has the answer now, and I give it him in the most explicit form. To suggest that a matter of this sort should originate from any Department other than the Department concerned or that the Prime Minister and the Cabinet should take action over-riding the views of the Department concerned, is absurd.

    Why did the right hon. Gentleman give out one advice on the 1st February and another on the 8th February?

    I will deal with that point in a moment: I will only say now that it is not true. The Colonial Office owes a great debt to Lord Stevenson and Sir Matthew Nathan and the advisory committee. They gave their services ever readily and with great ability, but we have to remember the fact that these gentlemen were concerned throughout the initiation and working of the scheme of restriction itself. Moreover, they were persons directly financially interested in the rubber business. It was obvious and reasonable that in this matter we should endeavour to get the opinion of the ablest impartial inquirers that we could obtain.

    This is a very serious statement which the right hon. Gentleman is making. Will he deny that the right hon. Member for Stafford (Mr. Ormesby-Gore), in explaining the Government's attitude in Malaya, distinctly stated that the previous alteration was the responsibility of this committee alone, and not of the Cabinet? If the committee can be blamed in one connection, surely the responsibility must be transferred in the other.

    If the right hon. Gentleman had been in the House this afternoon and had listened to an answer which was given to a Private Notice question, he would have heard that my right hon. Friend the Under-Secretary of State for the Colonies never made that statement. He made it quite clear that the change was made on the responsibility of the Government and not on the advice of the Committee. We did not take the view which the right hon. Gentleman the Leader of the Opposition takes that we could not appoint an impartial committee without the consent of the advisory committee. Moreover, practically every member of the advisory committee had the opportunity of appearing before the Rambling Committee and had every opportunity of putting his experience and views most fully forward.

    There is one further point which the Leader of the Opposition made. He suggested that we were appointing a loaded committee, a committee as to whose views we were already informed; that we deliberately appointed it with a view to putting an end to the restrictions. That is not true. I believe that I can say for my right hon. Friend the Prime Minister that he had no information as to any previous views of any members of that committee. They were appointed purely on their personal ability, and they entered upon the investigation absolutely free and with open minds. The result of that investigation was to convince the Government that the restrictions as they are operating now, owing to the rapid growth of supplies outside the spheres of restriction and partly owing to the immense development of the reclaimed rubber industry, are becoming increasingly ineffective as a means either of stabilising prices or even of keeping them up in the interests of the British producer. On the contrary, the effect of them is adverse to our interests to-day and will be increasingly so. Hitherto, what we have had to deal with has been the extension of Dutch production on estates already planted, but now every year we are going to be confronted with an ever-increasing output from new plantation in these territories since 1922. To-day, the continuance of that scheme is most disadvantageous to our growers and appears to threaten the dominant position which the British Empire occupies in the producton of the raw material of one of the world's great key industries. These restrictions to-day discourage progress in management, raise the cost of production and severely handicap our producers, compared with the foreign competitor.

    To-day, those who are benefiting most are the Dutch and those who feel all the disadvantages are the British producers, and the time has come to remove a scheme which, admittedly, served its immediate purpose at the time, but which to-day is a severe handicap to the British producer. We then had to consider how the scheme should come to an end. We received, and the committee received, advice from many quarters, in favour of a long-ranged tapering scheme taking two or three years to wind up. It was obvious that once we had settled upon such a scheme we were bound to carry it through and adhere to it. During the whole of that period the increasing disadvantage of our position would have gone on and our producers would have been in no position to deal with it, except in one respect which was indicated by the hon. and gallant Member for Montrose. He asked: "What is the good of your six months notice? Every firm is telegraphing out to its people to produce more, and before the 1st of November there will be a great mass of rubber sent over." As a matter of fact, they cannot produce much more, immediately. It will take them several months to get their labour supply, to build new coolie lines, and to send their recruiters to Southern India. Therefore, for the first few months they could not produce more. If, however, we had adopted a scheme extending over two or three years, we should have had the very process which was so indignantly denounced by the hon. and gallant Member for Montrose in operation, not for a few months but for nearly two or three years, with still more disastrous results.

    Does the right hon. Gentleman know that at the present time companies have robber in store which they cannot export?

    if so, that situation would have been still further aggravated over a two or three years period. A more practical alternative was that of immediate withdrawal suggested by the hon. Member for Camberwell, but we were up against the difficulty of personnel and recruiting which I have already mentioned. The immediate cessation of restriction could not for some months give our producers the benefit of full scale production. It could not give the Governments time to make their various arrangements. On the other hand, I was besieged throughout February and March by hon. Members on all sides and by many people outside saying: "Cannot you give an undertaking that, at any rate, the scheme will continue up to the end of the restriction year—the let November." That was the date urged on me from every quarter. That was the date which, after the fullest and most careful consideration, the Hambling Committee recommended to the Government and which the Government, with full responsibility, have accepted.

    I have dealt with the really serious issue, the main issue. Now I come to what has been magnified into a great charge, the real gravamen against the Government, and that is that we made certain announcements, that the Government announced that we were going to have a Committee of Inquiry. I have been a good many years in this House, and I have never known an an-announcement of a Committee of Inquiry seriously to perturb the equanimity of the House as a whole. Such an announcement is usually met by the taunt, "Oh, another Committee, another postponement, another failure on the part of the Government to recognise its responsibility to deal with the matter!" Why should an announcement of the appointment of an independent and impartial inquiry to look into the whole matter, to consider whether restriction should be maintained or modified or abolished, create such a sensation? Why Because the whole position was already beginning to topple. The whole situation in the rubber market, in the share market, was entirely artificial, and all those values about whose loss such talk has been made, were not real values, but were fictitious values which were bound to come down and disappear in the very working of the scheme if it had been allowed to go on. The hon. and gallant Member for Montrose asked whether the losses would have occurred if we had not made that announcement, whether it would have been possible to make an announcement that would not have created these losses. I say "No "No announcement at any time would have failed to be followed by those losses, unless we had postponed the announcement until after the losses themselves had occurred.

    In that case, why did you let the New York "bears" get the advantage of the announcement?

    I will deal with those animals very shortly. Meanwhile, I will give to the hon. and gallant Member an experience of mine, not taken from "bears," but in another field of sport. It has often been my fortune and my anxiety to thread my way through a great and broken glacier with towers and pillars of ice 50 or 100 feet high in danger of toppling over at any moment. There comes a time when the guide says to you, "Do not speak; do not even whisper, because the concussion of the air may have some effect on these ice blocks. Pass quickly and silently. "You do, but then, if the ice has not come down from your whisper, the effect of the sun will bring it down in the next few hours. If we had made no announcement whatever these losses were bound to come sooner or later as the inevitable result of the thoroughly unhealthy position in which the whole industry was.

    Why did the Colonial Office say that they were going to continue the scheme on 1st February and then alter their mind on 8th February?

    The hon. and gallant Member displays a great measure of impatience. I am dealing with this question stage by stage. First of all, I will deal with what the right hon. Member opposite, in his eloquence, described as tantamount to a criminal act—the announcement of the fact that we were going to have a committee of inquiry. This announcement, I say again, would have produced no effect whatever unless the whole industry had been in a precarious and unsound position, and unless those who knew most about the industry were convinced that the outcome of any impartial inquiry would be the termination of the present scheme. Now I come to the even more criminal charge that the announcement, was made on 8th February and not made in the ordinary routine way by the Colonial Office on 1st February, with the announcement of the figure at which restriction would stand in the following quarter. The Colonial Office announcement was a perfectly routine announcement, based on the calculated average prices through the quarter. Anyone who took the trouble to study these prices could have made that same announcement on the same day. It proceeded from the Office purely as a matter of routine.

    10.0 p.m.

    On the other hand, the appointment of the special committee of inquiry, made at the instance of the Colonial Office and accepted by the Cabinet, which takes the full responsibility for that as for everything else that is done by any Depart- ment of the Government—that committee naturally took some time to set up. It was essential to find the right men as members and to suit their time and convenience as to the beginning of the committee. To meet them and in order to fix as early as possible a date to get the committee started, the announcement was made the very first moment after we got all the names together and ascertained that the members of the committee were really ready to begin. That date was a week after the ordinary routine announcement by the Colonial Office. it was obvious from the routine announcement that no change would be made in the course of the quarter, and from that point of view, the point of view of giving the largest possible notice it was obviously desirable that a notice about the inquiry should come as soon as possible after that date. There was no essential reason why it should appear on the same day, and no inconvenience was caused except in a market already in a state of unreasoning nerves and panic.

    The right hon. Gentleman opposite made a very elaborate argument—for which there is no foundation whatever—drawn from the fact that, in answer to a question some months before, I said that no change would be introduced before the beginning of February, and that, if it were, ample notice would be given beforehand. He drew from that the inference that when the routine notice came out on 1st February, the public would at once know that no inquiry would be held in the matter. It was obvious that, if a change had been determined upon as from 1st February, I should have given notice long before that, and equally obvious that when it was known that the quarter figure for February to April was 60, there would be no change in that, quarter, and even more obvious to anyone who knows the amount of investigation required in this matter that the announcement of 8th February of the appointment of the committee could not possibly mean any change in the whole situation before at least July. As a matter of fact, no change is going to take place before November.

    I am reminded by the Prime Minister of certain wild animals to which the hon. and gallant Member opposite referred. Talking of wild animals, I find that the charge that we caused ruinous losses to the investor and the trader owing to the leakage of news to the United States was given, as one would expect, in its most vigorous, most picturesque and, I might add, loosest, form by the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George). This is what he said:
    "The Government have dealt with this matter in such a way as to inflict the maximum of injury upon British investors and British traders, and the minimum of injury upon foreign investors and foreign traders. They first of ail fumbled about the date. Then they suddenly made up their minds to do something and they issued a statement to the Press about six o'clock. They said that is two hours after our Stock Exchange has closed.' They forgot that it was two hours before the New York Stock Exchange closed. Mr. Baldwin forgot that, even under a stable Tory Government, this old world was still engaged in revolution once every 24 hours. Having made that astronomical discovery, which has been known to every child in a first form for many generations, he then felt pained that there should be men so sordid in the United States of America as to take advantage of the marvels of the universe. But his pain was not comparable to that felt by the poor investor who found his money swept away by this blunder."
    I need not quote any more. [HON. MEMBERS: "Go on!"] I will quote another less picturesque passage from that well-informed organ, the "Daily Mail," which declared on 10th February:
    "British traders and 230,000 British shareholders of all parties suffered a serious financial reverse yesterday as a result of New York knowing in advance of London of the Government's intention to institute an inquiry into the existing scheme of restriction on rubber exports. The losses are estimated at about £1,170,000."
    It will be noted that the figures have grown a great deal since then. Let me deal with those statements. The announcement made by the Government was one for publication in the Press on the morning of 9th February. It was given, as such announcements usually are, at six o'clock in the evening to the representatives of the Press, and I think the right hon. Gentleman opposite will agree with me, as would the right hon. Gentleman the Member for Carnarvon Boroughs if he were in his place, that the confidence of the Government in the Press on these occasions has always been justified. That at any rate has been my experience —that if you take the Press into your confidence you can do so with safety.

    Did that arrangement include the foreign Press? Was the statement issued at the same time to the representatives of the foreign Press?

    As I was saying, these confidences are almost invariably honoured by the Press.

    This is very important, and we do not want to indict our own Press. We may as well face what is common gossip. Is it not true that the Government, quite honestly—I make no charge against them for it—invited representatives of the American Press with the other Press representatives?

    The foreign Press were not invited. Reuter and the four Press agencies were. These were all that were invited.

    I think I can explain the whole position very clearly in a moment if the hon. and gallant Member will restrain his impatience. The Press were given that communication at six o'clock in the evening. Whether there was any misunderstanding, or whether, in one of the Press offices, there was a leakage, I cannot tell, but apparently someone did, by telephone, communicate this information to New York before the New York rubber exchange had closed. Now let us consider how anyone in New York, receiving that information, was going to proceed with the lucrative and pleasant enterprise of spoiling the British. How would the right hon. Gentleman the Member for Carnarvon Boroughs or the hon. and gallant Gentleman the Member for Montrose have proceeded if they had been in that position in New York? I can conceive anyone receiving that exclusive information, if he thought it was going to depress the market, spoiling some of his fellow Americans. He could deal with them. They were with him on the Exchange or he might have telephoned to Chicago and other Exchanges and possibly have fleeced some of his fellow-citizens. But how was he going to fleece anyone in this country? He could not, by any telegraphic sale, deal with them until the following morning, when their information would be as good as his.

    There is one exception only. There is one set of circumstances in which a British trader in rubber could conceivably have been worsted by an American speculator. That is if a British firm, at the close of the market in London, had telegraphed to its agents in New York to say "Buy for us, while the market is still open, at such and such a price. Telegraph to us in the morning when we will confirm. "But that is not a position which was occurring to any great extent. Taking into account the immense disproportion between American rubber requirements and British rubber requirements, the volume of dealing was not by British users buying rubber from the United State, but by Americans buying here for their own already very considerable stocks. However, all this is a rather hypothetical consideration. What happened as a matter of fact? The right hon. Gentleman the Member for Carnarvon Boroughs and the hon. and gallant Member for Montrose might, conceivably, have rushed in with their information, to see what use they could make of it. They are bold and sanguine and possibly credulous persons. But your Yankee is a shrewd speculator and a careful man. I am told that those who got the information in the United States were very doubtful as to how far it was all right, and how far it was an attempt to get them to alter their prices. Those to whom they communicated the information were still more doubtful and, as a matter of fact neither American citizens nor British investors were fleeced at all. Practically no business took place on that information in New York, and to all intents and purposes the position of the investor or trader in the United States was where geography and astronomy have always put him—some six hours behind the opening of the market in London.

    May it not be the case that the very fact that a limited amount of business did take place, shows the losses which were caused, as considerable offers may have been made by cable to American interests to purchase at a certain price which they refused when they heard this news, tending to show that the price would fall still further.

    That is a very hypothetical question, based on a hypothetical fact which did not occur. No business did in fact take place. The fall in prices—real or fictitious prices—took place upon the announcement, here and in America, for the very same reason in both countries, namely, that the whole position in the rubber share market was top heavy and unsound and was bound to come down heavily the moment anyone knew the facts of the situation. I hope that I have now dealt with both the mare's nest and the more serious issue. With regard to the mare's nest, I would only repeat that there was nothing in the manner or the hour of the Government notification of the initiation of the inquiry by a Committee, which could have any effect whatever if the market had been in a sound position, and if the whole position had not been, as I have already described it, top-heavy and unsound. As regards the real merits of the case, and the whole difficult and complex problem with which the Government have had to deal during these years, I hope I have made it sufficiently clear that the Government which initiated the scheme, the Government of the right hon. Gentleman the Member for Carnarvon Boroughs, the Government of the right hon. Gentleman opposite, and ourselves throughout have been concerned with one issue only, and that is the prosperity of the British rubber industry, and the prosperity of the British colonies which depend upon it. They have been concerned throughout with that position.

    From that point of view, they regarded the initiation of the scheme as a necessarily temporary expedient. They are still satisfied that, in its initial stages, that scheme served its purpose. As the scheme proceeded and failed to serve its purpose, we became increasingly conscious of the difficulties and disabilities which that scheme has been imposing, with growing momentum every year and every month, upon this great British key industry and we were finally reluctantly forced to the conclusion that the matter had to be inquired into. When all the information, had been obtained and submitted to us, we were still more definitely forced to the conclusion that, however beneficial in its initial stages, that scheme had become a stranglehold, fettering development and initiative, fettering progress, and endangering the future prosperity of a great British industry. The hon. and gallant Member opposite asked two questions

    That question would have to be considered by the Governments of both Ceylon and Malaya in connection with the whole revenue position. It is the permanent interests of our Colonies that have weighed most with our Colonial Office, and, from that point of view, nothing could be more distressing to those Colonies, either the Straits Settlements and territories immediately under British control, or to the territories ruled over by sovereign native potentates, than to see the great industry, to which they owe so much, being steadily transferred to foreign hands. The hon. and gallant Member asks whether we communicated directly with those rulers whose interests are affected, and who have shown themselves throughout the period of the British connection with them, the finest friends that Britain has had anywhere in the world. The answer is that we communicate in all these matters with the High Commissioner, whose normal and ordinary duties on any of these issues is to get into touch with the native rulers, and to keep them informed of all that affects them. I have no doubt that they were kept fully informed all along, and they, like the British territories directly administered, will, I believe, inspite of immediate difficulties, benefit greatly in the long run.

    We know quite well that there is no decision we could have taken which would not have affected the market, not involved loss to many people who in good faith, but often with wonderful innocence, invested their money in all kinds of rubber companies about the working of which they know nothing whatever. If that illustrates anything, it only illustrates the converse of the point made by the right hon. Gentleman at the beginning, showing how dangerous and difficult a thing it is for a Government to try to interfere and control an industry direct, and how much better it is that such a question should be left to the industry to settle for itself. I believe this great industry, which owes so much to British science, to British ability and to British energy, is going to win its way through in spite of the difficulties of the next year or the next few years. At any rate, we are giving it a fair field.

    In the last year or two we have not been giving it a fair field, but we have been giving all the favours to its opponents and competitors.

    I think it is only fair, before the division is taken on this question, that the House should clearly understand the object of the Motion. We have heard a good deal about the merits and demerits of restriction, but my right hon. Friend throughout the whole of his speech carefully avoided discussing that issue, and I therefore want to say quite frankly that we are not concerned at the moment with whether restriction is a good or a bad thing; but it is only fair to say, when the Liberal Benches are quiet—I presume the hon. Member is answering the questions which apparently my right hon. Friend did not answer—that I do not think there can be any dispute about this: Not only did restriction save the rubber industry at the time, but it was of immense benefit to the British revenue. I presume that Lord Stevenson gave the same advice to the right hon. Gentleman that he gave to me, and I think everyone connected with the rubber industry will admit the tremendous loss suffered by the death of the great public servant, who rendered immense services to all Governments. I think it only fair to say that not only was everything that the right hon. Gentleman has said to-night in the mind of Lord Stevenson, but that there is nothing which has happened since which the Committee, even when they determined this question, had not clearly in mind. It is fair to say that in their first Report they said in substance—I am summarising it—"We favour restriction, but we are afraid of its effect unless we get Dutch co-operation. "They made an effort to obtain Dutch co-operation and to bring the Dutch in. They failed, and, having failed, they then examined the situation in the light of that fact.

    With all the facts before them, with the certain knowledge that the Dutch did not intend to come in and would ultimately benefit, they made that recommendation, and the Government of the day accepted it. Therefore it is idle for the right hon. Gentleman to stand here to-night and say the Government cannot interfere, and that what has happened only shows how dangerous it is for the Government to interfere. The fact remains that the Government did interfere, that the Government of the day were responsible, and therefore the Government must bear the responsibility for the action taken. I have no hesitation in saying that, on the advice of Lord Stevenson and the Committee, I took the view that it was a good thing. I still believe it was a good thing, but, unlike the Colonial Secretary, who merely says to the House "Do the Dutch benefit?" I say that the best experts in rubber must have told him, as they told me, that the heavy tapping of rubber by the Dutch might have given them a greater output, but the ultimate benefit of the industry is on our side.

    All I can say is that people who have as much expert knowledge as the hon. Member for North-West Camberwell (Mr. Campbell) as growers take that view. They are people engaged in the growing of rubber, and they definitely take the view that restriction on the whole has benefited the agricultural side of the industry. At all events, we are not concerned to-night whether restriction is a good or a bad thing, but what we are concerned about is whether the Government, accepting the restriction scheme, handled it in the Tight way, and in the best interests of the country. The Colonial Secretary's speech can be summarised in a few sentences. The right hon. Gentleman said that from 1924 gradual pressure was being put upon him, and he himself became so apprehensive that every year and every month convinced him that the restriction ought ultimately to be removed. Is that a fair summary of the speech of the right hon. Gentleman?

    From 1925 onwards, I realised that there were difficulties, and I endeavoured to meet them by modification. We came gradually to the conclusion, in the course of 1927, that, whatever the difficulties were, the situation had become so difficult that a fresh inquiry was necessary, and that definite conclusion was put before the Cabinet at the end of 1927.

    On the 10th flay, 1927, the Colonial Secretary was asked:

    "If he has any information tending to show that the policy of restriction of output imposed upon British rubber plantations is enabling other rubber producers, particularly the Dutch, to expand at the expense of British producers?"
    That is not May, 1925 or 1926, but it is May, 1927, when he had all the information and all the accumulation of evidence that we have heard about in his possession. At that time, the specific question was put to him having regard to the Dutch position0: Do they benefit? What was his answer with all the knowledge in his possession? He said:
    "The hon. Member is no doubt aware that a large proportion of rubber producers in the Dutch East Indies are voluntarily adherents of the restriction scheme. The stabilisation of prices at a not unremunerative level in consequence of that scheme must obviously benefit all producers who are not subject to restriction, but I see no reason to suppose that in the long run the effects will be disadvantageous to British interests."
    What is the meaning of "in the long run" In 1924, says the right hon. Gentleman, he was becoming disturbed; in 1925, he was alarmed; in 1926, the evidence was pouring in on him—that is his own statement to-night; and in May, 1927, he said: "Yes, but notwithstanding all the evidence, in the long run I am sure restriction is good." That is his answer. He shakes his head. On the same afternoon, a supplementary question was asked by the hon. Member for North-West Camberwell, and that is the gentleman who has been giving his blessing to-night, so we will assume that he was on the right lines then. He asked:
    "Does the right hon. Gentleman not think that the time has come when it would be advisable to form a small independent committee to go into the whole question and advise him as to the advantage or otherwise of retaining the Stevenson scheme?"
    That was two and a-half years after the right hon. Gentleman, according to his statement to-night, became disturbed; that was two and a-half years after the accumulated evidence that there was something wrong. The hon. Gentleman gave him a chance to get out of it. Let us see what he says:
    "I have the advantage of advice from a strong committee, representing the various interests concerned, and I am continually taking the advantages or disadvantages of a scheme into consideration.
    Then the hon. Member for Withington (Dr. Watts) intervened, and asked:
    "Is it not a fact that the Stevenson restriction scheme has saved British rubber plantations from ruin and bankruptcy?"
    And the right hon. Gentleman replied:
    "That is undoubtedly the case."—[OFFICIAL REPORT, 10th May, 1927; cols. 199-200, Vol. 206.]
    I would ask any hon. Member who heard the right hon. Gentleman's speech this evening whether I am putting it too high when I say that the substance of the speech, and, indeed, its intention was to convey to the House the impression that from 1924 onwards he was apprehensive, and ultimately came to the conclusion that the only way to deal with the matter was the way in which he did deal with it? Therefore, I would ask, how can he reconcile that position with the conclusive statement that he made last year?

    "But," the right hon. Gentleman says, "I have the advantage of a strong advisory committee whom I consult from time to time." Let us see how he treated this strong advisory committee. In December of last year, according to the Prime Minister's statement, they were privately informed that the matter was to receive consideration. That was while the right hon. Gentleman was away. They replied to that communication saying that, in their judgment, it was disastrous to do anything at that stage. The reply of this strong advisory committee was that it was not only wrong, but dangerous, and for this very good reason, that the accumulation of stocks in London at that moment was in the vicinity of 60,000 to 70,000 tons. They took the view, rightly, that between then and the middle of this year those stocks would gradually have been worked out. This strong advisory committee gave that information when they received the first intimation of the appointment of the committee. The next they knew was that on 1st February the ordinary announcement was made by the Colonial Office. I ask the House what interpretation could be put upon that situation? What did they have a right to expect? There was the advisory committee. They were informed that the matter was under consideration. They protested. To put it another way, they gave their views as practical men and as an advisory committee, because if we are to be told, as we were told incidentally, that they were interested parties, the answer to that is that they ought never to have been put in the position. They were either there to advise or they ought not to have been there at all.

    They gave their advice, and they were told nothing could be done. The, 1st of February arrived. There is the announcement of the ordinary continuation which led everyone to believe there was no change contemplated, and then on 8th February came the bombshell. I ask the House whether we are not entitled to say that is not a fair handling of the situation and that people were deceived. "Ah" says the right hon. Gentleman, "What do the investors in rubber know about the working of the business?" A more absurd and ridiculous statement was never made. What do the investors in railway companies know of the working of the railways? What do the investors in mines know about the working of the mines?

    That argument might be applied to every industry in the country with the same result. The fact remains that the Government, by their handling of the situation, not only did incalculable harm to British investors, but certainly helped American investors. The right hon. Gentleman was waiting for someone to give him an opportunity for that quotation. I could see him waiting for someone to say something to give him the chance of the quotation he made about those people who took advantage of the announcement. I do not think he put it quite high enough. I agree entirely that some of the statements made were not only grossly exaggerated, but, on the face of it, could not possibly happen, because at the worst the American situation was such that if they wanted to deal they had to deal with us and not with themselves. Therefore the time could not possibly have given them the benefit it did.

    There is another thing the right hon. Gentleman did not mention. Here I do not blame the Prime Minister, because, if representatives of the Press are called in and told something confidentially, the Minister has a right to expect that they will honour his confidence. If they do not, he is not to blame, and the responsibility must rest with them. In any case, the right hon. Gentleman failed to observe that the way British people were hammered and badly hit was not alone the way he indicated but in the orders that failed to materialise here, because the orders that came to the London market the next morning would naturally have been cancelled, and that was a big contributory factor to the break in the market in London the next morning. The Government were not to blame for that, if their confidence was broken, but equally it is fair to say that the British people suffered in consequence.

    I want to put this question to the right hon. Gentleman. He has said all through that the Colonial Office must bear the responsibility. I believe that the Colonial Office are not entirely responsible for this matter. I go as far as to say that the Treasury were not only parties to it, but that at the initiation of the scheme they were, and they have been since, jointly concerned with the Colonial Office. No one has benefited out of it, as I have already said, more than the British Treasury. The right hon. Gentleman was aware of it. What I ask, and what many people are in doubt about at this moment, is: How does it come about that the Colonial Office, who had issued the clear and specific notice on the 1st February, merely sent this question to the Treasury without advice of any sort or kind, and that on the 8th February the Prime Minister announced the decision, which is under the direction of the Colonial Office?

    I think I can answer that question. I thought I had really answered it before. I thought that I had made it clear that the request for an inquiry was made by the Colonial Office. In view of the effect on the Exchequer, the Colonial Office has always been in close contact with the Treasury. In any case, the Cabinet, of which the Chancellor of the Exchequer is a member, accepted the Colonial Office proposal and decided to have this inquiry. The decision was held up for a short time for the reason the hon. Member has mentioned, namely, to allow stocks to work off to some extent. When the Colonial Office made its announcement on the 1st February, it was perfectly well aware that the inquiry was not only settled, but that; the personnel had been settled and that the announcement about the inquiry would be made in the course of a few days. It issued, and always does on the first of every quarter, the ordinary routine announcement, and was equally well aware that the announcement of the committee of inquiry would be made very shortly.

    Now we have this position, that the Colonial Office was aware of this and was a party to it, and that when it issued the notice on let February it had knowledge of what was going to take place. That is the statement of the right hon. Gentleman. Let the House observe this. There was an Advisory Committee set up for this purpose, and for this purpose alone. In December this Committee were told that there was to be an inquiry. They objected.

    The Committee as a Committee never made any objection, but the point was informally put and consideration was given to it. The Advisory Committee, as such, never made any objection to the institution of an inquiry. It knew that an inquiry was going to take place.

    Observe what the right hon. Gentleman has just said: that the Committee, as such, never made a recommendation. I ask: Was the Committee, as such, ever consulted? The Committee, I repeat, were never consulted as a Committee; they were told individually, privately and separately, and for the right hon. Gentleman to say that as a Committee they never object leads the House to believe that they here formally consulted, which is absolutely contrary to the facts. The facts are these. The Committee were told privately and individually, and as individuals they replied pointing out the difficulties and dangers. Then they were told that the matter was dropped. The next thing that happened was the Colonial communication of the 1st February, followed by the communication of the 8th February. All these facts clearly demonstrate that the Government did not have the interests of the industry in mind. They could not have had. They must have known the utter and absolute confusion which would be created by their attitude, and it is because we think that they have badly blundered by not availing themselves of the best advice which was at their disposal and have totally disregarded the interests of the British public in this matter that we are going into the Division Lobby to-night.

    It is not very easy to speak against your own Government and party, but the right hon. Member for Derby (Mr. Thomas) has put the case in the way I know it. Let me remind the House of the real position. British investors, whose shares before the 9th of February were worth £200,000,000 find that to-day they are worth £100,000,000. The stocks in this country are 60,000 tons, and the price has dropped over £100 per ton; which means a loss of £6,000,000. The Advisory Committee consider that if the scheme had been allowed to work on for the next two or three years that the consumption of rubber would overtake the supply and we should have got to the 100 per cent. stage, when it would have been able to drop the restriction scheme altogether. Instead of those in the industry being allowed to control it, those who know the conditions, amateurs come in who know nothing about it. The industry has not received anything from the British Government. They did attempt to get a voluntary scheme to regulate shipments in some way in 1920; but the voluntary scheme did not work because the Malay States did not come in. In 1921 we were still in the same position. In 1922 the present Chancellor of the Exchequer was Colonial Secretary, and he had as his commercial adviser Sir James Stevenson. He said to Sir James Stevenson that if he could get a scheme which would be likely to work, the Government were prepared to back it. That is all the Government. did. If any hon. Member on this side goes down to his constituency, in which I have no doubt there will be many who have made investments in rubber, he will find that they have lost very much money in rubber, and the moment you make excuses they will only say that it is because the Prime Minister and the Colonial Secretary have put them into this trouble and that there is no explanation at all. The hon. Member for North-West Camberwell (Mr. Campbell) gave certain advice, saying that people should not sell their shares. I have here a letter which has been addressed by one of these banks in London in connection with a poor shareholder who had an advance on his shares. This is what it says:

    "Referring to our conversation yesterday, I have received a letter from my head office this morning which contains definite instructions that, unless further securities are produced, we shall at once proceed to sell the shares."
    That is the kind of thing which is going on all over the place. The hon. Gentleman spoke of £50,000,000 being lost in two hours. Nobody suggested anything of the kind. What was suggested was a loss of £50,000,000 on the industry. It is difficult to handle this matter. You have had an illustration of the way in which the Government have blundered over the whole business. You cannot get any information. We come here to discuss it to-night, and we have the only statement which has been made, by the Colonial Secretary. What is it that has been done. Here you appoint a Committee of Civil Research. You cannot get any information about it. It is under the Board of Education, and you cannot put any questions about it or get any information at all, and you do not know what the names are. You cannot see the evidence. Sir Eric Geddes has said that he did not believe that weight had been given to the evidence put before the Committee, because of the unanimous opinion of every section of the trade. With regard to this evidence, you have it defended, because there is nobody in the trade who is against it. It is said the Rubber Growers' Association are unanimous. You get certain elements in every trade and certain individual men who come and give evidence. These have been taken by a Committee in the same way. Sir Eric Geddes was perfectly straight in saying that judgment had been given against the weight of evidence. Practically every section of the trade was in favour of it to tide over this period, and it passes the wit of anybody to realise how the Government ever took the step they did in the way they did. You cannot see the Report of the Committee of Civil Research or the evidence put before it.

    I hope that hon. Members when they go back to their constituencies will realise that the Government have sold the trade, though they may say they are doing it in the best interests. The one advantage from all this is that the trade is clear of them and will not have the Colonial Secretary again, and, if the trade can get through, it will not be because of the Colonial Secretary or the Government. I bitterly regret the way in which this matter has been handled. From start to finish the answers to questions on this subject have been given with a curtness and a callousness that everybody realises, and when it came to the finish the same brutality was shown all through. I feel it bitterly, because I happen to be in the trade, but I do not hold a pennyworth of rubber or of rubber shares, so that this is nothing to me except as a broker with a good deal more business passing through, but one does regret that a Conservative Government, that is supposed to have some respect for the interests of investors, should put it in this particular way. If the Labour party had brought this forward, they would have been hounded out of the country. I was speaking to a Scottish friend of mine the other day on this subject, and he said that if we did not get any Report from the Committee and if we did not get any evidence, the Government ought to be hounded out of the country. One does not like to say these things, but they are said all over the place, and it is just as well that they should be said by a Member of the Conservative party, who does not feel any pride in the position he is now in, and who regrets that those who ought to lead the party should be leading it in such a miserable way.

    What would have been the position if this had been done by the Labour party or the Liberal party? I venture to say that, great as has been the criticism of the Colonial Secretary to-night, he has got off very lightly compared with the treatment which would have been accorded to one of the other parties if they had made this mistake. The Colonial Secretary did not know whether the foreign Press had been invited to receive this information or not, and he appeared to cast some aspersion—

    I did answer that Reuters and the other Press agencies had, but not the foreign Press.

    The right hon. Gentleman appeared to cast some aspersion on the British Press, who might have given this information abroad.

    In any case, the right hon. Gentleman ought to have known that the foreign Press is represented in this country also by members of the British Press, and that they have not only private correspondents, but that information of any specific character of this kind is always given to the foreign Press. They work in the closest liaison with the British Press, and the British Press has completely fulfilled its obligation of secrecy if it sees that this information is not published in British papers until the following morning. That is the only obligation they have to maintain, and they carried it out to the full, and

    Division No. 91.]

    AYES.

    [11.0 p.m.

    Acland-Troyte, Lieut.-ColonelFremantle, Lieut.-Colonel Francis E.Moore-Brabazon, Lieut.-Col. J. T. C.
    Agg-Gardner, Rt. Hon. Sir James T.Ganzoni, Sir JohnMorrison, H. (Wilts, Salisbury)
    Albery, Irving JamesGates, PercyMorrison-Bell, Sir Arthur Clive
    Alexander, E. E. (Leyton)Gilmour, Lt.-Col. Rt. Han. Sir JohnMurchison, Sir Kenneth
    Allan, J. Sandeman (L'pool, W. Derby)Gower, Sir RobertNicholson, Col. Rt. Hn. W. G. (Ptrst'ld.)
    Amery, Rt. Hon. Leopold C. M. S.Graham, Fergus (Cumberland, N.)Nuttall, Ellis
    Apsley, LordGrant, Sir J. A.O'Connor, T. J. (Bedford, Luton)
    Ashley, Lt.-Col. Rt. Hon. Wilfrid W.Grattan, Doyle, Sir N.Oman, Sir Charles William C.
    Astbury, Lieut.-Commander F. W.Greene, W. p. CrawfordPercy, Lord Eustace (Hastings)
    Atholl, Duchess ofGrenfell, Edward C. (City of London)Perkins, Colonel E. K
    Atkinson, C.Gretton, Colonel Rt. Hon. JohnPerring, Sir William George
    Baldwin, Rt. Hon. StanleyGrotrian, H. BrentPownall, Sir Assheton
    Barclay-Harvey, C. M.Guinness, Rt. Hon. Walter E.Raine, Sir Walter
    Barnett, Major Sir RichardHacking, Douglas H.Remer, J. R.
    Bellairs, Commander CarlyonHall, Lieut.-Col. Sir F. (Dulwich)Rhys, Hon. C. A. U.
    Benn, Sir A. S. (Plymouth, Drake)Hall, Admiral Sir R. (Eastbourne)Ropner, Major L.
    Bentinck, Lord Henry Cavendish.Hall, Capt. W. D'A. (Brecon & Rad.)Ruggles-Brise, Lieut.-Colonel E. A.
    Betterton, Henry B.Hammersley, S. S.Salmon, Major I.
    Birchall, Major J. DearmanHanbury, C.Samuel, A. M. (Surrey, Farnham)
    Blundell, F. N.Harrison, G. J. C.Sandeman, N. Stewart
    Bourne, Captain Robert CroftHartington, Marquess ofSanders, Sir Robert A.
    Bowyer, Captain G. E. wHarvey, G. (Lambeth, Kennington)Sanderson, Sir Frank
    Brasa, Captain W.Harvey, Major S. E. (Devon, Totnes)Sandon, Lord
    Bridgeman, Rt. Hon. William CliveHeadlam, Lieut.-Colonel C. M.Sassoon, Sir Philip Albert Gustave D.
    Briscoe, Richard GeorgeHenderson, Capt. R. R. (Oxf'd, Henley)Shepperson, E. W.
    Brocklebank, C. E. R.Henderson, Lieut.-Col. Sir VivianSimms, Dr. John M. (Co. Down)
    Broun-Lindsay, Major H.Heneage, Lieut.-Colonel Arthur P.Skelton, A. N.
    Brown, Col. D. C. (N'th'l'd., Hexham)Henn, Sir Sydney H.Slaney, Major P. Kenyon
    Brown, Brig.-Gen. H. C.(Berke, Newb'y)Henneesy, Major Sir G. R. J.Smith-Carington, Neville W.
    Buchan, JohnHills, Major John WallerSmithers, Waldron
    Buckingham, Sir H.Hilton, CecilSpender-Clay, Colonel H.
    Burgoyne, Lieut.-Colonel Sir AlanHoare, Lt.-Col. Rt. Hon. Sir S. J. G.Sprot, Sir Alexander
    Cadogan, Major Hon. EdwardHohler, Sir Gerald FitzroyStanley, Lieut.-Colonel Rt. Hon. G. F.
    Campbell, E. T.Hopkins, J. W. W.Stanley, Lord (Fylde)
    Carver, Major W. H.Hudson, Capt. A. U. M.(Hackney, M.)Stanley, Hon. O. F. G. (Weatm'eland)
    Cassels, J. D.Hunter-Weston, Lt.-Gen. Sir AylmerStuart, Hon. J. (Moray and Nairn)
    Cayzer, Sir C. (Chester, City)Huntingfield, LordSugden, Sir Wilfrid
    Cecil, Rt. Hon. Sir Evelyn (Aaton)Iliffe, Sir Edward M.Tasker, R. Inigo.
    Cecil, Rt. Hon. Lord H. (Ox. Univ.)Inskip, Sir Thomas Walker H.Templeton, W. P.
    Chapman, Sir S.Jackson, Sir H. (Wandsworth, Cen'l)Thomson, F. C. (Aberdeen, South)
    Charteris, Brigadier-General J.King, Commodore Henry DouglasThomson, Rt. Hon. Sir W. Mitchell
    Churchman, Sir Arthur C.Kinloch-Cooke, Sir ClementTinne, J. A.
    Clarry, Reginald GeorgeKnox. Sir AlfredTitchfield, Major the Marquess of
    Cochrane, Commander Hon. A. O.Lane Fox, Col. Rt. Hon. George R.Tryon, Rt. Hon. George Clement
    Colfox, Major Wm. PhillipsLister, Cunliffe-, Rt. Hon. Sir PhilipTurton, Sir Edmund Russborough
    Colman, N. C. D.Little, Dr. E. GrahamVaughan-Morgan, Col. K. P.
    Cope, Major WilliamLocker-Lampson, G. (Wood Green)Waddington, R.
    Courthope, Colonel Sir G. L.Lougher, LewisWallace, Captain D. E.
    Croft, Brigadier-General Sir H.Lucas-Tooth, Sir Hugh VereWard, Lt.-Col. A.L.(Kingston-on-Hull)
    Crookshank, Col. C. de W. (Berwick)Luce, Major-Gen. Sir Richard HarmanWarner, Brigadier-General w. W.
    Culverwell, C. T. (Bristol, West)Lumley, L. R.Warrender, sir Victor
    Cunliffe, Sir HerbertMacAndrew, Major Charles GlenWatson, Rt. Hon. W. (Carlisle)
    Dalkeith, Earl ofMacdonald, R. (Glasgow, Cathcart)Wayland, Sir William A.
    Davies, Maj. Geo. F. (Somerset, Yeovil)Macintyre, IanWhite, Lieut.-Col. Sir G. Dairymple.
    Davies, Dr. VernonMcLean, Major A.Williams, Herbert G. (Reading)
    Dixey, A. C.Macmillan, Captain H.Wilson, R. R. (Stafford, Lichfield)
    Drewe, C.Macnaghten, Hon. Sir MalcolmWinby, Colonel L. P.
    Eden, Captain AnthonyMacRobert, Alexander M.Windsor-Clive, Lieut.-Colonel George
    Edmondson, Major A. J.Manningham-Buller, Sir MervynWinterton, Rt. Hon. Earl
    Elliot, Major Walter E.Margesson, Captain D.Withers, John James
    Ellis, R. G.Mason, Colonel Glyn K.Womersley, W. J.
    Everard, W. LindsayMailer, R. J.Wood, E. (Chester, Stalyb'ge & Hyde)
    Fairfax, Captain J. G.Merriman, Sir F. Boyd
    Fielden, E. B.Milne, J. S. Wardlaw

    TELLERS FOR THE AYES.

    Ford, Sir P. J.Mitchell, W. Foot (Saffron Walden)Captain Viscount Curzon and Mr. Penny.
    Forestier-walker, Sir L.Monsell, Eyres Com. Rt. Hon. B. M.

    the Government., by not realising that, made a gross blunder, for which the Colonial Secretary has offered no satisfactory defence to-night.

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

    The House divided: Ayes, 194; Noes, 94.

    NOES.

    Alexander, A. V. (Sheffield, Hillsbro')Grundy, T. W.Riley, Ben
    Ammon, Charles GeorgeHamilton, Sir R. (Orkney A Shetland)Roberts, Rt. Hon. F. O. (W. Bromwich)
    Attlee, Clement RichardHardie, George D.Robinson, W. C. (Yorks, W.R., Elland)
    Baker, J. (Wolverhampton, Bliston)Harris, Percy A.Saklatvala, Shapurji
    Baker, WalterHartshorn, Rt. Hon. VernonSalter, Dr. Alfred
    Barr, J.Hayday, ArthurScrymgeour, E.
    Bondfield, MargaretHenderson, T. (Glasgow)Scurr, John
    Bowerman, Rt. Hon. Charles W,Hirst, W. (Bradford, South)Sexton, James
    Broad, F. A.Hudson, J. H. (Huddersfield)Shepherd, Arthur Lewis
    Bromley, J.Hutchison, Sir Robert (Montrose)Shiels, Dr. Drummond
    Brown, Ernest (Leith)John, William (Rhondda, West)Shinwell, E.
    Buchanan, G.Johnston, Thomas (Dundee)Short, Alfred (Wednesbury)
    Charleton, H. C.Jones, Morgan (Caerphilly)Sitch, Charles H.
    Compton, JosephKelly, W. T.Snowden, Rt. Hon. Philip
    Connolly, M.Kennedy, T.Stamford, T. W.
    Cove, W. G.Kenworthy, Lt.-Com. Hon. Joseph M.Stephen, Campbell
    Crawfurd, H. E.Kirkwood, D.Stewart, J. (St. Rollox)
    Davies, Rhys John (Westhoughton)Lawrence, SusanThomas, Rt. Hon. James H. (Derby)
    Day, HarryLee, F.Tinker, John Joseph
    Dennison, B.Lindley, F. W.Tomlinson, R. P.
    Duckworth, JohnLunn, WilliamWallhead, Richard C.
    Duncan, C.MacDonald, Rt. Hon. J. R.(Aberavon)Watson, W. M. (Dunfermline)
    Dunnico, H.Maxton, JamesWellock, Wilfred
    Edge, Sir WilliamMitchell, Sir w. Lane (Streatham)Welsh, J. C.
    Garro-Jones, Captain G. M.Morris, R. H.Westwood, J.
    Gibbins, JosephMorrison, R. C. (Tottenham, N.)Wilson, R. J. (Jarrow)
    Gillett, George M.Naylor, T. E.Windsor, Walter
    Gosling, HarryOwen, Major G.Young, Robert (Lancaster, Newton)
    Graham, D. M. (Lanark, Hamilton)Palin, John Henry
    Greenwood, A. (Nelson and Colne)Paling, W.

    TELLERS FOR THE NOES.

    Grenfell, D. R. (Glamorgan)Pethick-Lawrence, F. W.Mr. Charles Edwards and Mr. Whiteley.
    Griffith, F. KingsleyPotts, John S.
    Groves, T.Richardson, R. (Houghton-le-Spring)

    Adjourned accordingly at Seven Minutes after Eleven o'clock.