asked the Secretary of State for the Colonies whether he can now state what decisions have been arrived at as to the recommendations made in the Report regarding the Solomon Islands, both as to inter-island wireless communications and other matters?

The investigations into the suggestion for a chain of wireless stations are not yet sufficiently advanced to enable a decision to be taken, but I hope shortly to communicate with the High Commissioner for the Western Pacific upon this and other matters dealt with in the Report.

asked the Secretary of State for the Colonies what action is being taken on the recommendations of the Report on the Colonial veterinary services and as to the formation of a unified Imperial service?

The recommendations of the Committee which was appointed to inquire into the question of the organisation and efficiency of the Colonial Veterinary Services have been considered, and the Report—Cmd. 3261—has been sent, with my observations thereon, to the various Colonies and Protectorates. In my opinion, the most urgent problem to be faced is the present lack of qualified candidates, and certain Colonial Governments have been asked whether they would be willing to make contributions towards the establishment of a Scholarship Scheme on lines similar to the existing Agricultural Scholarship Scheme. It is my wish to see this Scholarship Scheme brought into being as soon as possible, so that the first selection of scholars may be made during the summer of this year. The Colonial Advisory Council of Agriculture and Animal Health has been formed, and, in due course, the two Committees of Animal Health and of Agriculture are expected to develop. Various other recommendations have been approved in principle, but further examination of details is required.

asked the Secretary of State for the Colonies the amount of money which was expended for the 12 months ended to the last convenient date in obtaining the advice of technical experts not permanently engaged in the Colonial Service in consultation with regard to matters of transport in the Crown Colonies, Protectorates, and Mandated Territories?

I am not certain what is intended by the phrase "matters of transport," but the amount paid by the Crown Agents for the Colonies to consulting engineers during 1928 for advice relating to harbours, ships, railways and roads amounted to about £51,000.

Has this sum greatly increased during the 12 months?

I should like notice of that question.

asked the Secretary of State for the Colonies whether any decision has yet been taken in regard to the conditions governing the West African Colonial Service; and whether it is proposed to make any alteration in the 18 months' tour?

No, Sir. The question is still under survey.

When are we likely to have the decision, especially in regard to the 18 months tour?

The whole matter is being considered and discussed with all the authorities concerned. I hope, when Sir Samuel Wilson comes back, it may be possible to arrive at a decision, but I cannot give a definite undertaking that the decision will be at variance with the present system.

Meanwhile, do we understand that Sir Samuel Wilson is in West Africa now?

No, but he was in West Africa a little time ago and has naturally taken part in these consultations.

asked the Secretary of State for the Colonies why the island of Tobago has been omitted from the itinerary of the new steamship service of the Canadian National Railways, provided in accordance with the undertaking contained in the Canada-West Indies trade agreement of 6th July, 1925?

I am not aware of the local reasons which have led to the omission of Tobago. Such omission was, however, contemplated in the terms of the Agreement.

asked the Secretary of State for the Colonies the nationalities of Mr. Rutenberg and Mr. Novomeysky when they applied for the Palestinian concessions and their nationality when the grant of these concessions was approved in principle?

Mr. Novomeysky had been provisionally recognised as a Palestinian citizen for some years before he formally applied for the Dead Sea concession. He acquired that status fifteen months before the grant of the concession was approved in principle. The Rutenberg concessions were granted before the Palestinian Citizenship Order in Council was made, but Mr. Rutenberg had acquired that status by naturalisation before the final documents were signed.

What were the nationalities of these two gentlemen before they acquired Palestinian citizenship?

I think Russian in both cases.

asked the Secretary of State for the Colonies whether Sir Samuel Wilson has instructions to consult with, and will have an opportunity to consult with, Mr. Srinivasa Sastri, in Kenya; and whether Sir Samuel is instructed that the question of communal representation is fixed and immovable so long as the present Government remains in office in this country?

Sir Samuel Wilson has received no instructions other than those which I communicated to the House on 27th March. If the right hon. Member will read them, he will see that they cover the first part of his question. As regards the second part, it is obvious that any change in the basis of the franchise in Kenya could only come about by agreement, whatever Government were in power in this country.

Do I understand, in the first place, that Mr. Sastri will be in the Colony at the same time as Sir Samuel Wilson, and, accordingly, will have an opportunity of meeting him? In the second place, do I understand the right hon. Gentleman to bind all Governments of this country never to alter the franchise in Kenya except with the consent of the three elements in the population?

Mr. Sastri is going in order to lay the case of the Indian community before Sir Samuel Wilson and will certainly have occasion for meeting him and consulting him. In regard to the second question, I am not binding any Government, but I think the obvious facts of the case bind them all.

Are we to understand that the Government rule out of practical politics any question of modifying the franchise without the consent of the white settlers and the Indians and the natives, and, if so, does that apply to modifications desired by the natives or desired by the whites?

No. The main basis—I am not discussing details—was laid down in the White Paper issued in the time of the Duke of Devonshire. In view of all the circumstances of the case, no one could suggest that the basis should be altered except by consent.

The right hon. Gentleman's statement means, therefore, that no modification of the franchise in the direction desired by the natives or Indians will be brought about without the consent of the whites, but that modifications of the franchise in the interests of the whites might be brought about without the consent of the Indians or the natives?

No. The right hon. and gallant Gentleman must not read more into my answer than I gave. I may remind him that the recent Commission did not suggest any change in the basis of the franchise except by consent.

Is not the right hon. Gentleman aware that the existing communal franchise was introduced without the consent of all parties concerned and only under instructions from a microscopic minority of the inhabitants? Why did not he ask everyone's consent then?

asked the Secretary of State for Dominion Affairs whether all ex-British civil servants in the Irish Free State who have retired under Article X. of the Anglo-Irish Treaty have now received the compensation to which they have been held to be entitled by the judgment of the Privy Council in the Wigg and Cochrane case; what are the total numbers of such persons who have received compensation; what are the numbers, if any, of those who are still awaiting payment of compensation; and the reason for the delay in making payment?

Warrants for the payment of additional compensation, on the basis of the judgment in the Wigg-Cochrane case, have been issued in 1,036 cases. I understand that four cases are still outstanding for the following reasons: In one case the pensioner is insane and an order of the Court is awaited; in another the pensioner is dead and probate of the will is not complete; in the two remaining cases the officers' present addresses are not known.

asked the Secretary to the Overseas Trade Department if he can now make any statement as to the progress being made in connection with the promotion of the Travel Association of Great Britain and Ireland?

The Travel Association of Great Britain and Ireland was incorporated on 15th April as a company limited by guarantee. Membership application forms are now available and have been circulated widely throughout Great Britain and Ireland, and an appeal for a wide and representative membership was recently made by the President of the Association, my right hon. Friend, the Earl of Derby, in a letter to the leading newspapers. Membership is unlimited and if any Members of this House or any interests they represent have not received a form, I hope they will let me know.

asked the Minister of Agriculture whether he has received a report from his inspectors stationed at the various ports of the number of horses that were intended for immediate slaughter exported during the six months ended to the last convenient date?

During the six months ended 31st March, 1929, 4,959 horses were shipped to the Continent from ports in Great Britain, of which 2,607 went to Holland. Inquiries show that of the latter number approximately 90 per cent. were slaughtered on arrival. None of the horses exported to France or Belgium were intended for slaughter.

Can the right hon. Gentleman tell us the number exported to France and Belgium, and how long after they arrived there were they intended for slaughter?

Our information was that they were not intended for slaughter in France and Belgium. There has been a great change in the traffic, and there are now three times as many horse car-cases taken to France and Belgium as there were in 1920, and they are encouraged only to bring live horses in if they are wanted to work.

Can the right hon. Gentleman answer my question as to the number of horses intended for immediate slaughter?

I have answered it. I said inquiries show what percentage were slaughtered. We can only give the figures which we have been able to obtain.

asked the Minister of Agriculture if, under the proposals of the Budget, any financial assistance will be given to the harbour of Brixham; and if he has borne in mind the great burden put on the fishing industry of the town by the wrecks which occurred during the War?

I am well aware of the very exceptional circumstances affecting the harbour undertaking of Brixham and of the unfortunate position in which it has been placed by reason of what took place in the War and other causes, and I am prepared to give sympathetic consideration to any application which may be made for financial assistance from the sum referred to in the Budget speech for the purpose of reducing dues and charges upon the fishing industry at the port.

Is the right hon. Gentleman likely to be able to come to a definite charge in this respect, and would it be in the nature of an annual payment or a lump sum down?

We are examining the matter of allocating any resources that are available on the basis of an annual subvention, and I hope in a very short time we shall be able to make an announcement.

Should the authorities make direct application?

I do not think that is necessary. We are in touch with all the authorities and are aware of the financial position.

While the right hon. Gentleman is about it, will he also bear in mind fishing harbours that have lost their breakwaters owing to heavy weather but are not able to rebuild them out of their funds?

That would be a matter for the Development Commission. That need of assistance is also before the Department.

Will the right hon. Gentleman also remember the quay facilities on the East Coast, particularly in the Hartlepools?

East Coast harbours, generally speaking, are larger than the purely fishing harbours for which this special assistance was designed. All harbours of the same class will be considered.

asked the Secretary of State for Foreign Affairs whether his attention has been drawn to a case heard before the London County Council with reference to British artists who had accepted theatrical engagements abroad; and whether, when passports are granted to British women artists and girls for the purpose of accepting theatrical and carbaret engagements abroad, any investigations are made into the bonâ fides of same before the issue of the passports?

Yes, Sir. Before passports are granted to theatrical or variety artists who are taking up employment abroad it is the practice of the Passport Office to consult the Stage Guild or the Variety Artists' Federation, as the case may be.

With regard to chorus girls and dancers, is anything further done in addition to consulting the Stage Guild or the Variety Artists' Federation, which may not have any knowledge of the particular engagement?

I do not think the Passport Office can do anything more than they do. The Variety Artists' Federation particularly is supposed to represent all these interests, and the Passport Office made definite inquiries of the Federation before issuing passports.

As the Federation do not represent the chorus girls and dancers, can notifications be made abroad, in the places where these girls go, to see that they are not inveigled into the white slave traffic?

In regard to the particular case the hon. Member has mentioned, I will make inquiries.

Is the right hon. Gentleman aware that there have been several cases mentioned in this House which I have brought to the notice of both himself and his right hon. Friend the Foreign Secretary?

I will make inquiries about that matter.

asked the Secretary of State for Foreign Affairs whether he can give an account of the present position of the rival claimants to the Afghan throne?

According to such information as is available the general position at the moment appears to be that King Amanulla's advance towards Kabul has reached the neighbourhood of Ghazni, which is still held by a small force of the Amir Habibulla's troops.

Will the right hon. Gentleman explain why he refers to this gentleman as King Amanulla in view of the fact that he has abdicated and has not yet taken his place upon the throne?

The ex-King.

This is the Clause which reimposes the Income Tax for the year, and makes certain minor alterations. We do not object to the minor alterations, but we wish to take this opportunity of raising a general discussion upon the Income Tax and the policy that the Government have pursued in regard to it. When the Chancellor of the Exchequer was opening his Budget, he stated that if he had known what the future held for him he would not in his first year of office have reduced the Income Tax. I remember noticing that as soon as he came into office he was beset by deputations from the Federation of British Industries, associations of manufacturers and chambers of commerce, telling him that the Income Tax at the height which it had then reached was discouraging industry and drying up savings, and I was rather surprised at the ease with which he accepted all these arguments. The Financial Secretary to the Treasury, in his speech last Thursday, dealt with the same point and, more or less, took the same lines. He spoke of the height of direct taxation but rather to my surprise went on to tell us that in spite of the height at which direct taxation now stands, direct taxpayers, according to the figures of the Colwyn Committee, are nevertheless saving money and accumulating capital hand over hand. I could not quite follow the explanation he gave of this phenomenon. In fact, I do not know what explanation he had in his mind; and I wish to put to the Committee the explanation which was suggested by hon. Members on this side of the House.

Will the hon. Member tell me the exact words and place in which I said that direct taxpayers are accumulating capital?

The particular words do not matter. Perhaps the hon. Member will tell me what he means.

It is not for me to make the hon. Member's bad case by presenting my good case. The hon. Member must make his own bad case himself.

I do not remember the exact phrase, but it is not necessary for my argument. The hon. Member stated that the amount of capital accumulated year by year was many hundred of millions of pounds.

Direct taxation.

The Financial Secretary will not dispute the fact that the greater part of the actual capital savings in money year by year is made by direct taxpayers. I do not think that is disputed by any member of the Committee; and my point remains unshaken. I am suggesting an explanation why, although Income Tax and Super-tax stand high, the fact remains that direct taxpayers are saving and accumulating capital at the rate of hundreds of millions of pounds per year.

I do not want there to be any misunderstanding on this point. I do not agree that the hon. Member is putting my point of view or correctly quoting what I have said. I quoted on Thursday last what the right hon. Member for Central Edinburgh (Mr. W. Graham) said on 22nd April I will give the hon. Member the exact quotation. He will find it in the OFFICIAL REPORT, col. 1134, for the 25th April, 1929. This is the quotation I made:

"The other side is the side of industrial savings, that is, the amount which is available to-day for all kinds of industrial development calculated to increase employment"—

The hon. Member has just said that I said "direct taxpayers are accumulating capital." I did not use those words.

"That was estimated by the Committee on National Debt and Taxation as something between £350,000,000 and £400,000,000 before the War, and it was thought that if allowance were made for increase in population and the rise in prices, the figure to-day should be perhaps about £600,000,000 and that the actual amount that we were saving in Great Britain was probably £150,000,000 per annum short of that total."—[OFFICIAL REPORT, 22nd April. 1929; col. 657, Vol. 227.]

That quotation, taken from my speech on the 25th April, is merely a repetition, a quotation, of what the right, hon. Member for Central Edinburgh had said on the 22nd April, 1929. The definition of savings is laid down by the right hon. Member for Central Edinburgh and not by me. I adopted it. There is no word about "direct taxpayers."

The hon. Member is quoting figures which I do not dispute and which do not in any way shake my argument. My argument is this—and every Member of the Committee will agree with it—that the greater part of the industrial savings in money made year after year is made by direct taxpayers. That is not disputed, and the question I am now raising is: what is the explanation of the fact of these savings of some hundred millions of pounds are made each year in view of the high rate of taxation. The explanation which I suggest—I am not making this as a debating point but in order to enter into a serious explanation which would, I think, rather elucidate our financial position if the Committee would discuss it—is the explanation briefly suggested last week, that in order to understand this rather curious phenomenon you have to take into account the position in our national finances occupied by the National Debt. However great the rate of taxation may be, if a large part comes back to those who pay it, then it does not, in fact, diminish the amount of money they have for saving or spending.

What are the figures? The better off classes contribute in Income Tax, Super-tax and Death Duties about £450,000,000 a year in taxation, but the interest on the Sinking Fund on the National Debt, that part of it which is held in this country, amounts to a little over £300,000,000 a year. Broadly speaking, the greater part of the interest and Sinking Fund on the National Debt comes back to the more comfortably off classes of direct taxpayers, and, therefore, the suggestion I make is that the position is this. They pay their £450,000,000 direct or indirectly through banks and insurance companies and they receive back about £300,000,000 in interest and Sinking Fund on the National Debt and, therefore, they have the same margin as before for saving and spend- ing. It leaves £150,000,000 which they contribute to general expenditure outside the National Debt which does not come hack to them in the same direct way, and this figure of £150,000,000, if you take into account the rise in prices, is only slightly greater than the amount which they contributed before the War, with the result that they are left with about the same margin not for savings only but, as we see it, for comforts and luxury. That is the reason why, although the rate of taxation is apparently high, it is having so little visible effect upon expenditure or the accumulation of capital, and why it is not having those injurious results on industry and on savings which are depicted in many financial newspapers and in many Conservative journals and speeches.

This view is supported by the evidence given before the Colwyn Committee. I signed the Minority Report of that Committee, and therefore I will quote only from the evidence. Mr. W. H. Coates, who I think impressed all members of the Committee as perhaps one of the ablest ex-Inland Revenue officials to appear before them said this:

"The existing capital equipment of industry is sufficient to sustain a marked expansion of activity without additional capital requirements. If I now leave the realm of fact for opinion, I am not disposed to think that the existing rate of Income Tax has any harmful effect on the supply of permanent capital."

The view that I am expressing is also quite well borne out in the evidence that one sees. There is no lack of capital at the present day for any genuinely reliable new issue. In fact it is fairly evident that the supply of new savings is rather in excess of the real demand for them. Although I must not stray into that matter, this has a hearing upon the Government policy both on finance and on unemployment. It is clear now that there is not only wasted labour which this House is continually discussing, but wasted savings. That is why the Government is quite incorrect in stating that works of national development will take away savings and capital which would otherwise be used in useful private industry. Both the Chancellor of the Exchequer and the Financial Secretary to the Treasury discussed direct and indirect taxation, but it appeared to me that they dealt with the subject in a manner which is making these Debates meaningless. The Financial Secretary dealt with indirect taxation, and then he took out of the area of indirect taxation a number of taxes which he described as theoretically indirect, and by this means he reached figures that were satisfactory to him.

Both he and the Chancellor of the Exchequer, instead of speaking of indirect taxation, began by giving us figures for the taxation of comforts. But what are comforts? I suppose cocoa is a comfort? It is not clear whether tobacco is a comfort in these calculations. I gather that matches are a comfort, but not tobacco, tout I do not know whether that is so. In any case we can all of us define comforts as we think fit, and if we are going to argue about direct and indirect taxation on those lines I hold that this class of discussion is becoming useless. There is one test which goes behind all these discussions. That test is, what is the actual taxation paid by members of the public with the different levels of income? On that subject we have again figures which were given by the Colwyn Committee, and they are very striking. The Colwyn Committee Majority Report took the case of a man with a wife and three children. They worked out the total cost of the taxation that would be paid. They found that a man with £1,000 a year was paying 11 per cent. of his income in taxation; that the man with £3 a week was paying 11½ per cent., a larger proportion than the man with £1,000 a year; and that the man with £2 a week was paying nearly 12 per cent., a larger proportion than either of the other two. These figures have, of course, been slightly altered by the repeal of the Tea Duty and the modification last year of the Sugar Duty, but still, taking that alteration into account, you get the result that the man with £2 a week pays nearly 4s. a week in taxation. That is more than is paid by the man with £20 a week or £1,000 a year. The broad fact is that, if you take the whole of this class of income—I am not taking the biggest incomes—that is incomes of £1,000 a year or less, you find that the most heavily taxed section of all is made up of those with between £2 and £3 a week—and they pay this taxation with less grumbling and complaint than those with £1,000 a year.

So far as Income Tax is concerned, a married man with a wife and three children pays nothing on £250 a year—whether income is earned or from investment. I must ask the hon. Member to differentiate between the tax on income, which is an absolutely compulsory payment, and the taxation which is imposed, not only on necessities, but on the comforts of the people. Although every one is entitled to have comforts besides necessities, and the more people have of comforts the better we like it, the man who does not drink or smoke cannot use the argument that he is compelled to bear that heavy indirect taxation on certain items, because it rests entirely with him whether he pays the taxation or not on tobacco or alcoholic beverages. On the other hand, Income Tax payment is compulsory; but the married man with a wife and three children receiving £5 a week pays nothing for Income Tax. Indeed he is exempt up to over £7 a week.

That scarcely deals with any point of mine. The Financial Secretary is quite entitled to introduce a new argument, but it would come better in his own speech, when he replies on the discussion. The fact that I am trying to bring out at the moment is that, taking taxation as a whole, direct and indirect, the most heavily taxed class in this country is made up of those with between £2 and £3 a week. Therefore I conclude that, although their taxation has been lately slightly diminished, the fact remains that they are still suffering from an inequality in taxation, and that this inequality needs further action to be finally corrected. Now I come to another section of the discussions on the subject. The Chancellor of the Exchequer gave some reply to the kind of position that I am now putting to the Committee, by saying that we had to take into account not only his repeal of the Tea Duty, but the fact that there had been a fall in the cost of living, since be came into office, of about 18 points, and that that fall was equivalent to a reduction of about £160,000,000 a year in indirect taxation. That is so; that is how it works out. But he omitted to say that this fall in the cost of living has been accomplished throughout by a corresponding fall in wages.

If we go back to 1920 the fall in wages according to the figures of the Ministry of Labour has amounted to about £700,000,000 a year. In addition to that, whatever the final result of the fall in prices may be, its immediate effects undoubtedly are to discourage industry and to tend to increase unemployment. If, then, we add together the fall in wages, and the unemployment, which have accompanied the fall in prices, there is no reason to suppose that the workers of the country have secured by the fall in prices, for which the Chancellor claims credit, more than they have lost in other ways. The class which has obtained the full advantage of the fall in prices is the class that lives on debentures, preference shares and fixed interest bearing securities. The man who has Five Per Cent. War Loan will continue to draw the proceeds of his War Loan whatever the prices may be. The class of the community whom we call the rentier class, have, as a matter of fact, obtained the full advantage of the fall in prices without suffering a corresponding reduction of income such as the working class have had to accept.

That being an inevitable result of the policy of the Chancellor of the Exchequer in the area of currency, in our opinion he ought to have tried to correct that result by his policy in taxation. He ought to have tried to ease the position for the poorer section of the community, even at the expense of the rentier class. He claims that he has done so, and I shall examine his claim. He says that he has reduced the Tea Duty by £6,000,000 and that last year he made modifications in the Sugar Duty which amounted to £3,000,000 or £9,000,000 altogether. On the other hand, during his period of office he has reduced the Income Tax and the Super-tax, but he has increased the Death Duties. The result of these combined transactions, according to the Estimates, was expected to be a general relief of taxation of about £32,000,000 a year—that is to say, more than three times the amount of relief which has arisen from the repeal of the Tea Duty, and the modification of the Sugar Duty, and which has gone to the less fortunate section in the State. Who has actually received the bulk of the £32,000,000? The figures of the Inland Revenue show practically the same results every year. They reveal the fact that, of this reduction of Income Tax, about 70 per cent. goes to the receivers of unearned income, the class who live upon debentures, War Loan and fixed interest-bearing securities.

If we take the Tea Duty, the Sugar Duty, the Income Tax, the Super-tax and the Death Duties, the final result is that the Chancellor of the Exchequer is giving more than half of his reliefs of taxation to the rentier class who have in the last few years increased their share of the national wealth and increased the purchasing power of their income without lifting a finger to secure it for themselves, but simply as a result of the fall in prices in the last seven or eight years. That is a summary of the consequences of the taxation of the present Chancellor of the Exchequer, and it is on that broad and final result that the public judgment must eventually be formed.

I had no intention of addressing the Committee this afternoon, but the remarks which have just fallen from my hon. Friend the Member for Keighley (Mr. Lees-Smith)—whom we are all delighted to welcome back after his absence—impel me to make a reply. I regret very much that the right hon. Gentleman the Member for Colne Valley (Mr. Snowden) is not in his place because I should have liked to have put some of my questions to him. The hon. Member for Keighley has made a great point of the large savings which have been made by the direct taxpayer in the last few years. The right hon. Gentleman the Member for Colne Valley has not once, but over and over again, on the platform and in the Press—I do not know that I can quote any words of his to that effect in the House of Commons—insisted that we are not saving enough in this country. Speaking from memory, I think the right hon. Gentleman has quoted figures to the effect that we are at least £150,000,000 or £160,000,000 in deficiency in respect of our savings, as compared with the period before the War. I am again quoting from memory when I say that the Colwyn Committee put our pre-War savings at a figure of between £350,000,000 and £400,000,000 a year. In order to bring our savings up to the level of that figure, they should be at least £600,000,000 a year. I am utterly unable to reconcile, either the language of the right hon. Gentleman the Member for Colne Valley or the report of the Colwyn Committee, with the suggestions which have fallen this afternoon from my hon. Friend the Member for Keighley.

4.0 p.m.

There is another point which I should like to put to the right hon. Gentleman the Member for Colne Valley. The hon. Gentleman who has just addressed the Committee has insisted that all these savings, or by far the larger proportion of them, come from the direct taxpayer. When the right hon. Gentleman the Member for Colne Valley was Chancellor of the Exchequer, he confessed himself staggered by the amount of the savings of the non-Income Tax payer and he was good enough at that time—in 1924—to supply me with the details of the savings of those non-Income Tax payers. I have the figures clearly in mind, though I have not verified them, and for the year 1923, if I remember rightly, the annual savings of this class of taxpayers, amounted to no less than £216,000,000 a year. The Financial Secretary was good enough to supply me the other day with some further details arising out of a statement which was made by the Chancellor of the Exchequer. It will be in the recollection of the Committee that, in opening the Budget, the Chancellor of the Exchequer said that the increase in the savings of small investors had amounted in the last four years to £170,000,000 a year. My hon. Friend the Financial Secretary to the Treasury was good enough to supply me with some details of that £170,000,000, which I will venture to quote to the Committee. In the case of the Post Office Savings Bank, the savings in 1924 amounted to £269,000,000, and in 1928 to £280,000,000. Trustee Savings Banks had gone up from £138,000,000 to £159,000,000: National Savings Certificates—this is net, of course—from £459,000,000 to £483,000,000; Railways Savings Banks, from £14,000,000 to £16,000,000; Industrial and Provident Societies, from £87,000,000 to £101,000,000; Building Societies (shares, deposits, and so on), from £137,000,000 to £235,000,000. In view of those remarkable figures, and in view of the not less remarkable figures which staggered the late Chancellor of the Exchequer, by his own confession on the Floor of this House, I am totally unable to follow the contention of my hon. Friend opposite that the sayings are coming entirely from the direct taxpayers. The truth is that very large savings at the present time are being made, and it ought to rejoice the hearts of Members of all parties, and on all sides of the House, that very considerable savings are annually being made by classes who are not liable to Income Tax at all. Speaking, if I may—although I am afraid I must not pursue this point except in answer to the hon. Gentleman opposite—as a student of social affairs, I regard no symptoms of our national life at the present time as more healthy and more encouraging than the savings of the non-Income Tax payers, and I venture very respectfully to suggest to my hon. Friend opposite that the figures I have quoted do very seriously detract from the argument which he has addressed to the Committee.

It is a little difficult to understand why the hon. Member for York (Sir J. Marriott) has accentuated so much one side of the prosperity of the country. In the old days we used always to understand it was taken for granted that the country was prosperous when we had a Tory Government. It was not usually the effort of the Tory party to go about to explain that there was a certain amount of prosperity which people had not seen. The point upon which I wish to dwell is the interesting speech of the Financial Secretary in moving the Second Reading of this Bill. I have not quite understood why it is that at the beginning of the Committee to-day he seems to have repudiated some of the very optimistic thoughts that he presented to us the other day, and has seemed to question the conclusion which my hon. Friend on the Front Bench has drawn from his speech. As far as I could gather, he wished us to think that all he had done was to quote figures that my right hon. Friend—

The hon. Gentleman misunderstands me; I objected to the hon. Member opposite using the word "direct."

Then I am quite accurate in thinking that we may still enjoy the very hopeful picture which the hon. Member put before us when he told us—and I understand that this is part of his Election address, and that his hopes of return to this House are largely dependent upon this statement—

"I hope the country does realise that we have added in five years to the pool of wealth in this country £2,250,000,000."—OFFICIAL REPORT, 25th April, 1929; col. 1086, Vol. 227.]

I understand that the hon. Member does not object to that, and that his objection was only to some inference that was put upon it. The hon. Member went on afterwards to build up even a greater accession of wealth. It rose, as his eloquence increased, to thousands of millions far beyond the figure I have quoted, and held out the hope that in a very short time the National Debt would be wiped off. I very much hope that that may be the case. I do not wish to do away with any of the hopeful views, and I am sure that it is not distasteful to anyone sitting on this side of the Committee to hear that there are sums of money which can be collected from the wealth of this country as the hon. Member seemed to think. What I cannot understand is why, if there has been this great accession of prosperity, it is not manifested more in the Income Tax. In the last published statement dealing with Income Tax, if we look at the gross figure—I am now taking the income on which tax is liable; there may be exemptions afterwards, but I am taking the gross figures—if we take the year 1924–25, the figure was £2,970,000,000; in 1925–26 it was £2,944,000,000; in 1926–27, £2,916,000,000, and the estimated figure for 1927–28 was £2,904,000,000. If the prosperity of which the hon. Member has talked is a very substantial factor, and is really building up the wealth of the nation, and not just making up for what might be termed the wear and tear of national life, you would have thought the figure would have been represented by an increase rather than a decrease.

Has the hon. Gentleman forgotten the upset of 1926?

The hon. Member does not suppose that anyone who has attended the Debates in this House could have forgotten that, especially when it comes up as often as King Charles' head in the speeches of the Chancellor of the Exchequer. But, after all, that would not explain the whole thing, and even when we consider the industrial disputes of that time, we have to settle who was responsible for the final breakdown of the negotiations. That would, however, be probably far from the present subject. When we examine these figures a little more closely, we find that the item dealing with profits from business has fallen in that period from £1,323,000,000 to £1,300,000,000, and, what is still more unsatisfactory, that part of the Income Tax which concerns wage-earners fell from £371,000,000 to £260,000,000. Therefore, Income Tax as a test of the prosperity of the nation held out by the Chancellor of the Exchequer, and by the Financial Secretary last week, does not seem to be borne out by the figures dealing with Income Tax.

Before I touch on another matter in the hon. Gentleman's speech, I should like to ask him, if he is going to reply, whether he could explain to the Committee why it is that the allowances for repairs, lands and houses have increased from £42,000,000 in 1922–23 to £80,000,000 according to the Estimates, in 1927–28. Then in regard to wear and tear of machinery, the figure in 1922–23 was £57,000,000 and in 1927–28 the estimate was £73,000,000. On the other hand, when we look at the deductions, we find that there has been a fall from £500,000,000 to £335,000,000. It may be that there is an explanation, and that items which at one time appeared under other deductions have now, somehow, been divided up under these different headings. It would be interesting if the hon. Gentleman could explain this.

To come to another question raised by the hon. Member, here, it seems to me, we on this side could almost welcome a convert to certain principles of Labour finance, because in that part of his speech where he dealt with direct and indirect taxation, he took every effort to show that the figures under the Conservative Government are better than the figures under the Labour Government. Seeing that he has made such efforts to try to prove this, the presumption is that he thinks it better for the nation that, as we have been urging all the time, taxation should be adjusted more on the lines on which he claims—although I am afraid his claim is not a very strong one—that the Conservative Government have improved the position. The hon. Member stated that in 1913–14 indirect taxation was 42 per cent. and direct taxation 58 per cent., but that after the Labour Government's Budget, these figures were, indirect 33 per cent., and direct 67 per cent., and that under the present Budget the indirect would be 35½ per cent. and the direct 64½ per cent. But then the hon. Member, in order to try to prove that the Conservative policy is more successful than the Labour, made rather an extraordinary statement:

"In the current year 1929–30, if you include those taxes which are indirect taxes, but are practically no burden on the poor, such as oil, betting, silk, and the McKenna Duties—although, of course, I know they have every right to take advantage of purchasing the goods on which these taxes are placed, still these taxes are theoretically indirect—indirect taxation is 35.61 per cent."—OFFICIAL REPORT, 25th April, 1929; col. 1088, Vol. 227.]

Then he goes on to eliminate that form of taxation, and gets the indirect taxation down to 31.84, and raises the direct taxation. I think there is a mistake in his speech which, perhaps, he has not noticed, but the central point is that he claims that, having made that exemption, the indirect taxation becomes 31.84 and the direct 68.16, although another figure was given in his speech. The hon. Member claimed, first of all, that these taxes were no burden on the poor which is exceedingly doubtful, because they included the oil tax by which, I presume, he meant the Petrol Duty.

If the hon. Member will look at column 1088 of the OFFICIAL REPORT of 26th April, he will see that I said in my speech:

"If you take off these theoretically indirect taxes amounting to 3.77 per cent., you have to-day indirect taxation 31.84 per cent. as against direct taxation 64.39 per cent."

Surely the figure must be made up to 100?

If so, it makes my case stronger, because it makes direct taxation 3.77 higher than I claimed. I was content to let it rest at 64.39. If I follow the hon. Gentleman's wish, I shall add 3.77. I am willing to do so, though I do not claim the right to do so.

If it is taxation, and if you are going to divide it between direct and indirect, you cannot very well leave certain taxes floating about in be- tween the two things. Does he wish to withdraw it, and place it in direct taxation?

I did not claim that in my speech.

It seems to me that the hon. Gentleman's argument is very far fetched and that, although he objects to exempt oil, oil might easily affect omnibus fares, char-a-bancs, motor bicycles, films, watches, clocks, and other items of that kind used by the working classes; and it seems to me that, after all, the hon. Member is asking rather too much when he asks us to eliminate this little figure. The only thing we welcome in his speech is his desire to prove that he is getting towards an ideal which is our ideal, because, when we argued before that these Tea and Sugar Duties ought to be removed, many hon. Members opposite said it was not fair that they should be taken off, and that if you got a working man who was a tee-totaler and a non-smoker, he would be paying no taxation at all unless you got it through sugar and tea. Now the Chancellor of the Exchequer has himself removed the Tea Duty, which was one of the few things left of any large amount, excepting the new Petrol Duty, which, I think, hits the working man more than the Conservative Government make out. In the circumstances, I claim the. Financial Secretary as a convert to the policy of the Labour party, and I am glad to welcome so distinguished a convert to the views which we have been pressing for some years.

Further on in his speech, the hon. Gentleman makes another claim, and that is that the tax revenue on necessities has also been reduced, and he points to that with much satisfaction. He is doing once again what I have seen done in municipal affairs in my own constituency, where the Tory party adopted a popular programme in order to try and save themselves from defeat. The hon. Member is doing the same thing and trying to forestall defeat by adopting some of the planks in the Labour platform; but so long as we have made our points, whether we get the benefit through a Tory Government or otherwise, it is all to the good of the persons concerned.

There is one other point dealing with Income Tax to which I should like to draw attention, and it proves one of two things. Either it proves that we have resources, as has been argued from this side, that might be still further tapped, or it proves that some people with incomes of from £1,000 to £2,000 a year have been taxed too heavily in proportion to others. I should like to draw attention to the amount of tax that is paid by a man with an earned income of £1,000, who has a wife and three children. If he makes £1,000 purely as earned income, he pays at the present time £81 3s. in Income Tax, but if it is an investment income, he pays £114 10s.; if you take a man with £1,500, he pays £164 10s. on earned income or £214 10s. on investment income; and if you go up to £2,000, the figures are £264 10s. and £314 10s. respectively. If you take both Income Tax and Super-tax on even higher incomes, you will find that what happens all through is that there is a margin of £50, and only £50, however big the income is, even on £10,000 a year, in which case the tax on the earned income is £2,996 and on the investment income £3,046.

If you take, on the one hand, the case of a doctor, who has built up his practice, who is making from £1,000 to £2,000 a year, who has no income from any other source, and who has a wife and three children, the last named to educate, and then, on the other hand, if you take a man, with a wife and three children, who is not in business and is receiving £1,000 to £2,000 a year, I ask hon. Members whether they consider that a difference of £50 represents the difference between the actual monetary position of those two men. We know very well that the doctor's income might suddenly come to an end, through death or sickness, and, therefore, he is bound to be making provision for his wife and children, but, on the other hand, whatever happens to the man with the investment income, his wife and children, after what is taken in Death Duties, have the larger part of that income left to them.

Therefore, there are two things that have to be faced. Either this justifies the proposals of the Labour party under what was called, two or three years ago, the Surtax proposal, as set forth in the Minority Report of the Colwyn Committee, of which my hon. Friend the Member for Keighley (Mr. Lees-Smith) was one of the Members—either this is a justi- fication for the belief that there is a class of people there who can afford a much heavier form of taxation—or, if hon. Members opposite are not prepared to accept that point of view, it means that we are putting a very unfair taxation on the other man. It would be difficult to convince me that a difference of £50 between these two classes of people represents anything like equity and fairness. In all probability, the answer to the question is that there is, in the hands of that section of the public which is receiving an investment income of this amount, a large untapped source of revenue, which, as has already been suggested, might easily be used to meet many of the public needs of our time.

I do not wish to follow either of the two hon. Members who have spoken from the opposite benches very closely into the details of their figures as between direct and indirect taxation. I realise that it would be treading on very delicate ground, because the Chancellor of the Exchequer, in adjusting the balance between Income Tax and things of that kind, on the one side, and indirect taxation on the other, has, by the removal of the Tea Duty, deprived hon. Members opposite of the whole of their best electioneering perorations; and on such an occasion I feel that it is not quite right to put a finger into the wound and stir it, because they might feel that in so doing I should not be practising that spirit of kindness which is the controlling force behind the Conservative party.

Hon. Members opposite often ask us to look at the present conditions in regard to what they call the rentier class, by which they mean anyone getting a fixed income from Consols, Government loans, and various debentures. They say that they, and they alone for practical purposes, are benefiting by the fall in the cost of living, but suppose the hon. Member for Keighley (Mr. Lees-Smith) had had a friend—I will not suggest that he would do anything so monstrously inhuman as to save money himself—who had saved £100 and invested it in Consols in 1913. He would have got his 2½ per cent., he would have seen the value of that money go down to about 50 per cent. of its pre-War value, all through the War he would have had absolutely no means of pick- ing up what he was losing, and, in addition, he would have had to bear a very much heavier burden of taxation during that time. Supposing that another friend had been enabled to save another £100, and had invested it in, Government stock in 1918. He would have benefited as the hon. Member said, but the person who had saved earlier would have had the whole disadvantage of rising prices and taxation, and he would never yet have got back to anything like the position in which he found himself in pre-War days. I am quite sure it had only slipped the mind of the hon. Member opposite, but when he next mentions the subject on a public platform, I am sure he will not forget to mention as well that there are millions of money coming in to-day from men who are far worse off than they were and have never got anything like back to the position in which they were before the cost of living rose.

The hon. Member opposite also gave a rule of thumb sort of calculation, in which he stated that approximately £450,000,000 comes in from the Income Tax-paying section of the community, which gets something like £300,000,000 back in interest on War Loan. Taking that figure of £300,000,000, I wonder if any estimate has been made of the immense amount of interest on War Loan that goes into friendly societies and into the pockets of all the smaller interest-receiving people in this country, which, after all, must reduce that sum very considerably. There is also this fact, that even although you may make a balanced figure of that sort and say that a certain percentage is going back again by means of interest on War Loan, you cannot get away from the fact that those very people, whether they are big or small people, have actually loaned that money as one form of investment, and that it would have been just as possible for them to have invested it in any other form of enterprise, in which case this particular kind of attack would not have been made on them by the party opposite.

The real trouble now is that you have got, so far as the finance of this country is concerned, an immensely growing population, expanding every year, and that you have got a system of direct taxation which is preventing, even according to the late Chancellor of the Exchequer the savings of this country mounting in the same way as the needs for financial development would seem to require. In other words, you have a great pool of finance from which the wages of the nation in various ways must come. That great pool is being helped at present very largely, as has been pointed out on many occasions before, by the savings of the non-Income Tax-paying class. We all welcome those savings, and we all acknowledge their enormous help, but the fact remains that, as far as the higher scale of taxation is concerned, there is a tendency to a shrinkage in the actual amount which comes in. That tendency is becoming marked, and it is conceivable that, if there is a year without any great boom on the Stock Exchange, for example, that shrinkage may be very marked indeed. I say, quite frankly, that the heavier burdens which are advocated by the hon. Gentleman opposite, are not likely to be productive of increased facilities for the development of trade and industry. I am not in any sense grumbling at the burden of taxation; I am not standing up for extravagant expenditure, but the people who save and put back into industry, whoever they may be, are doing their part, and it is a dangerous doctrine to discourage these people by means of extraordinarily heavy taxation from playing their part in building up our great national industries.

The hon. and gallant Gentleman the Member for Torquay (Commander Williams) has put before us three objects of pity. The first object of pity is the party which sits on these Benches, because, as he tells us, the Chancellor of the Exchequer has stolen the thunder that we were preparing for the General Election. If I understand him aright, he is proposing that the Election shall be won by the Conservative party on the ground that they have taken 4d. off tea. We all remember that the leader of the Liberal party in a famous speech talked of 9d. for 4d., but the hon. and gallant Gentleman has very much improved on that, because he says, "A majority after the Election for 4d." The only thing that I can say to that is, "Wait and see." If he imagines that the large numbers of people who are utterly dissatisfied with the Conservative party will be fobbed off by the fourpenny reduction in tea, which was a kind of death-bed repentance of the Chancellor, I can assure him that, from our point of view, he is very much mistaken. In the next place, he asked us to pity tie property owners, the people who at the beginning of the War had a certain amount of property—

I did not ask you to pity them. At the end of my remarks I deliberately said that I was not complaining, and only asked that you should see both sides of the question when you deal with this.

If the hon. and gallant Gentleman does not want pity for them, I will not press the argument on that point. I understood that, though he changed his attitude later, it was the whole point of his remarks. In the third place, he wants us to pity the nation, because the people who ought to do all the saving are not having as much money left to them as he would like to see. I would like to set him against the hon. Member for York (Sir J. Marriott) who put up a very different story. The hon. Member for York assured us that in the last 4½ years £170,000,000 had been saved by the non-Income Tax paying section of the community, which I can well believe, and that in a single year at one time no less than £212,000,000 was being saved by this section. I have not the figures to prove or disprove that statement, but I set the hon. Member for York against the hon. and gallant Member for Torquay, and they can argue it out between them.

I said that I agreed that savings had been made; I welcomed it, and I wanted it to be encouraged.

The hon. and gallant Member agrees with the hon. Member for York. Let us assume that it is correct. If the non-Income Tax paying classes, the people who have less than the narrow Income Tax limit have really saved out of their tiny superfluities £212,000,000, that blows to pieces the case that you have to leave large sums in the pockets of wealthy people because that is the only way the savings of this country can be put together. Here you have something like 100,000 people having between them an income, according to the Income Tax figures, of £540,000,000—and I shall show shortly that that is really under the real figures—and yet they, and the large number of people who are not Super-tax payers, but who have considerable incomes, now save £200,000,000 or £250,000,000, while the poorer people, who have at most only just enough to go round, are able to save £212,000,000. Obviously, the best way of securing a greater saving for this country is to see that the superfluities of this wealthy class are reduced, and that they are not allowed to fritter money away in the manner that anybody who reads the picture papers can see, and that the hard working-classes may be given a chance to build up savings.

I referred a moment ago to the figure of £540,000,000 which is usually quoted and generally believed as the income of the Super-tax payers. I venture to point out that that figure is very much under the mark. Unfortunately, we have not the figures which will enable us to deal with this, since the 64th Report of the Commissioners of Inland Revenue seven years ago. In that Report, it is pointed out that, in addition to the income which is reaped by individuals, there is a very considerable sum which never reaches individuals in the form of cash payments. In that year, the total sum of that kind was put down at no less than £250,000,000. It is explained in that Report that about two-thirds of that sum, or somewhere in the neighbourhood of £166,000,000, takes the form of additional reserves made by companies. That means that the owners of the ordinary shares of companies are really receiving in income £166,000,000 more than is credited in the form of income. The share of the Super-tax payers is probably well over £100,000,000 of this amount, so that the real income of the Super-tax payers is not £540,000,000 as had been supposed, but is probably well over £640,000,000.

Let us see what has happened to these people since 1920. In that year, if you add together the current rate of Income Tax which was 6s. in the £, and the amount which was paid by Super-tax payers as a whole, which averaged 2s. 6d., the position of the Super-tax payers was that they were paying on an average 8s. 6d. in the £. To-day, the flat rate of Income Tax is 4s., and the average rate of Super-tax is 2s. So as against 8s. 6d. their taxation is now 6s.—a very considerable reduction. This has taken place during the immense fall in prices, which has added 50 per cent., 60 per cent. or even a larger percentage to the effective value of their incomes.

Here comes the point which is often neglected. It is argued that because the amount taken in taxation of an indirect kind has continued to bear about the same proportion to the amount taken in direct taxation, therefore the working people are no worse off than they were before. That is an entirely fallacious argument, for a simple reason. While the Super-tax and the higher Income Tax payers have been receiving the same money income all this period the working classes have had their incomes very considerably reduced. There was a fall in 1920 of between £600,000,000 and £700,000,000 a year in receipts that were earned by the working classes. If, therefore, it be true that the actual proportion of taxation which is taken by indirect means remains the same as it was, the real interpretation of that is that the working classes are paying a very much larger proportion of their slender resources than they did in former years.

Suppose you carried this still further. Suppose there were repeated reductions of the money wages of the working people you might theoretically—not practically—reduce and reduce them until finally they consisted only of the amount which went in indirect taxation. Then you would have the position that it could still be argued that it was no heavier a burden than it was before. As a matter of fact, it would then exhaust the greater part or the whole of their incomes. That could not actually happen, because it would mean that the taxes constituted the whole price of the article, but it illustrates the theoretical point that it is a fallacious argument to say that because the percentages are the same, the burden in proportion to the actual money income has not been very much increased on working people. The Chancellor of the Exchequer told us in his speech:

"If I could have foreseen the lamentable course of events, I should certainly not have remitted 6d. from the Income Tax in 1925."—[OFFICIAL REPORT, 15th April, 1929; col. 66, Vol. 227.]

We realise that the Chancellor was pursuing a very dangerous course in those days. He went at it with his accustomed vehemence, and justified it to the satisfaction of members of his own party, but, as so often happens in other ventures of the Chancellor, failure dogged his footsteps. To parody his own words, one might say that failure has been his constant companion, and the Tory majority his only solace. He attributes it, of course, to all the incidents of the coal stoppage. I venture to suggest that that is an entirely incorrect rendering of the facts of the case. The unfortunate events of 1926 are, in our opinion, the logical and necessary outcome of the Chancellor's policy. I have already dealt with the deflation policy, which had its bad effect upon industry and upon the coal trade in particular, and that played an active part in bringing about the disasters to which the Chancellor has referred. But, apart from all that, I do not think that the Chancellor ever appreciated the effect upon the psychology of the people of taking taxes off the broadest backs and putting them on to the narrowest backs. That has been the policy of the Chancellor of the Exchequer throughout, and that has produced the psychology of unrest in this country which is thoroughly justified in view of the circumstances.

Another argument which hon. Members opposite have used over and over again is that a reduction of the Income Tax is the one effective means of increasing the purchasing power of the community and enabling trade to prosper, and that we ought to go on reducing the Income Tax in order that there may be more money available to the community. I venture to say that argument is entirely without foundation. If the Income Tax were not reduced, that money could be used in other ways more beneficial to the life of the nation. If it were used to relieve the burdens on working people their purchasing power would be to that extent increased, and as the working people spend their money in the staple trades of the country their purchasing power is much more valuable in giving employment than the same purchasing power in the hands of the super-rich. The money might be spent on social services, where it would twice bless the country; It would bless it by giving employment and stimulating industry, and bless it again through adding to the health and well-being of the people. It might be spent by the Government in developing the capital resources of the country.

I would remind the hon. and gallant Member for Torquay that the State can develop the capital resources of the country just as well as private individuals can, and if the money is spent by the State in that way we know where it goes, whereas if it is left in the hands of the super-rich while some of it may go in capital development a great deal of it may be merely frittered away in quite useless and unnecessary expenditure. Of course, it may be spent by the State and by other people wastefully. I am the last person to defend wasteful extravagance by the State, which in many ways, I think, is most baneful to the body politic, but even then it is no more injurious to the well-being of the nation than money which is spent wastefully by private individuals.

That is really our case; but what is the good of putting forward our case amid the dying embers of an old Parliament? We all know that speeches made during these last few days will not change the policy of the Government. There is only one thing which is going to change the policy of the Government, and that is a change of the Government itself, and we appeal from this House, with its set and determined partisanship of the wealthy classes of the country, to the people of the country, who, we believe, will send a different Government with a different atmosphere and a different point of view to represent them in the Parliament that is to be.

Probably it will be convenient if I reply now to the points which have been put to me. I do not think I can alter the opinions of the hon. Member for West Leicester (Mr. Pethick-Lawrence) more especially after what he has said. Even if I were to attempt to reply to his points I should be trespassing on the patience of the House by going over matters which were dealt with on Thursday. I have listened carefully to the three or four questions which were put to me by the hon. Gentleman the Member for Central Finsbury (Mr. Gillett), and as he wishes me to deal with them I will endeavour to do so. I took down his words as best I could, and his first point concerned a reduction of the figure for other charges in the Inland Revenue Report. He said the figures showed a fall from £500,000,000 to £335,000,000. The column of figures shown in the report includes the reductions of assessments owing to over-charges. There is also an amount representing the claims by taxpayers for relief on account of losses. Further, we are now getting away from the period when there were in existence such taxes as the Excess Profits Tax and the Corporation Profits Tax. We are also getting away from the slump of 1921 and the period when Income Tax assessments came down owing to business losses. That is the reason for the reduction about which the hon. Member asked for an explanation.

His next point was as to a growth in the allowances for the repair of houses since 1922. The growth in those allowances is due to two causes. There was a revaluation of property in 1923–24. When the property was revalued a higher measure of allowance was given for repairs. For example the less expensive houses, those up to an annual value of £40, were then given an allowance of 25 per cent. for repairs, that is one-fourth in place of the old allowance of only one-sixth. That change operated to give a larger allowance on a higher annual valuation, and that accounts for the increase in the total allowance to which the hon. Gentleman drew my attention.

Another point on which he asked for information was as to the allowances for wear and tear of machinery. I think that is a broad interpretation of his question, if it is not restated by me quite accurately in detail. The explanation is this. The figures he quoted are in respect of the percentages annually allowed for wear and tear of plant and machinery. They are allowed off the assessment, and they relate to cost. Allowances have to be made to cover wear and tear of machinery and plant, and amounts are put aside for obsolescence and so on. The amount allowed varies each year, because sometimes new machinery may be installed, and then the basic figure upon which the allowance is made will necessarily be very different from what it is in the case of old machinery without additions of new. In some years this allowance is held in suspence and carried for- ward to years in which a trading profit is made. As we get further away from the slump of 1921 the allowances for wear and tear will rise by contrast with the years in which those allowances were carried forward. I think that, without going too deeply into detail, these explanations answer the points which the hon. Member has raised. We have had a very good tempered and instructive Debate upon this Clause, and I hope the Committee will now take a decision upon it.

Before the hon. Gentleman sits down, perhaps he will say a word or two on the points of hardship which were raised on the Second Reading Debate. I think this would be a very useful opportunity for him to do so.

I should have been delighted to do so, but it would have been quite out of order. We are in Committee now, and dealing with the first Clause of the Bill, and I should have been rebuked if I had dealt with points which are quite outside the scope of the Clause now under consideration.

I do not wish to discuss the general question of the Betting Duty, which has excited so much interest, but before we agree to this Clause I wish to ask you, Mr. Deputy-Chairman, whether if we agree to this Clause we are committing ourselves either actually, or by our silence, to agreeing to the new proposals which the Government are putting forward at some future time to compensate for the estimated loss which will arise from the repeal of this duty. The Chancellor of the Exchequer made a definite statement that if he is in office after the election he will make proposals for obtaining revenue from bookmakers. One which I want specially to criticise is the proposed extra charge for telephones.

I do not think the hon. Member will be bound, as regard the other proposals, by the attitude he takes on this Clause, but he will not be in order in discussing now what he thinks those new proposals will be.

If I thought the proposals are going to be worse than the betting tax which is being abolished should I be in order in arguing along those lines?

That would depend upon how far the hon. Member went into the future.