House Of Commons
Tuesday, 24th May, 1932.
The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.
Private Business
Private Bills [ Lords] (Standing Orders not previously inquired into complied with),
Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That in the case of the following Bills, originating in the Lords, and referred on the First Reading thereof, the Standing Orders not previously inquired into, which are applicable thereto, have been complied with, namely:—
North Metropolitan Electric Power Supply Bill [ Lords].
Warrington Extension Bill [ Lords],
Metropolitan Water Board Bill [ Lords].
Bills to be read a Second time.
Provisional Order Bills (Standing Orders applicable thereto complied with).
Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That in the case of the following Bills, referred on the First Reading thereof, the Standing Orders, which are applicable thereto, have been complied with, namely:—
Ministry of Health Provisional Order (Leyton) Bill.
Ministry of Health Provisional Orders (Abergavenny and Newcastle-upon-Tyne) Bill.
Ministry of Health Provisional Orders (Bridlington and Wells) Bill.
South Lancashire Transport Company (Trolley Vehicles) Provisional Order Bill.
Bills to be read a Second time Tomorrow.
Provisional Order Bills (no Standing Orders applicable).
Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That in the case of the following Bills, referred on the First Reading thereof, no Standing Orders are applicable, namely:
Ministry of Health Provisional Order (River Dee) Bill.
Ministry of Health Provisional Order (Paignton) Bill.
Ministry of Health Provisional Order (Oxford) Bill.
Ministry of Health Provisional Order (Watford) Bill.
Bills to be read a Second time Tomorrow.
Hove Pier Bill [ Lords.] (by Order).
Second Reading deferred till Friday.
London County Council (Money) Bill (by Order).
Second Reading deferred till Thursday.
St. Andrews Links Order Confirmation Bill.
Read the Third time, and passed.
Oral Answers To Questions
Coal Industry
Statistics
5.
asked the Secretary for Mines the number of persons employed at the coal mines of Lancashire on 31st March and 30th April, 1932, respectively?
The number of wage earners employed at coal mines in Lancashire and Cheshire on 31st March, 1932, was 68,569, and on 30th April, 68,968.
6.
asked the Secretary for Mines the number of persons employed at the coal mines in Yorkshire on 30th April, 1931, and 30th April, 1932?
On 30th April, 1932, 155,400 wage earners were employed at coal mines in Yorkshire as compared with 163,200 at the corresponding date in 1931.
Export Trade (Canada)
8.
asked the Secretary of State for Dominion Affairs the total amount of British coal imported into Canada during 1931, and the total amount imported into that Dominion from the United States of America?
As the particulars for which the hon. Member asks are somewhat de-
| Imports of Coal into Canada from the United Kingdom and the United States of America during the year 1931. | ||||
| Coal. | United Kingdom. | United States of America. | ||
| Quantity in tons. | Value in $ | Quantity in tons. | Value in $ | |
| Coal dust | — | — | 2 605 | 5,575 |
| Anthracite (Grate, egg, stove, nut and pea) | 871,668 | 4,702,979 | 1,966,266 | 15,361,743 |
| Anthracite (Buckwheat, rice and barley) | 4,696 | 18,620 | 251,728 | 697,958 |
| Bituminous and coal not otherwise provided for. | 111,078 | 326,670 | 9,566,789 | 14,973,404 |
| Lignite | — | — | 6,410 | 29,603 |
| Coal for ships stores | — | — | 274,413 | 432,636 |
| Total Coal | 987,442 | 5,048,269 | 12,068,211 | 31,500,919 |
9.
asked the Secretary of State for Dominion Affairs whether there is any duty on British coal entering Canada; and, if so, will he state the amount per ton?
United Kingdom coal pays an import duty of 35 cents a ton (of 2,000 lbs.) and a special excise duty of 3 per cent. United Kingdom anthracite enters free of import duty, but pays the excise duty of 3 per cent.
Germany And Belgium (Impost Restrictions)
13.
asked the President of the Board of Trade if he can state whether the negotiations with the Governments of Belgium and Germany with regard to the restrictions imposed by those countries on the importation of British coal have now reached a successful conclusion; and, if not, whether he will consider the advisability of setting a time limit after which retaliatory action shall be taken by imposing special duties against German and Belgian goods under the powers provided by the Import Duties Act?
tailed, I will with permission circulate them in the OFFICIAL REPORT.
Will this matter be discussed at Ottawa, in view of the increasing number of miners unemployed in this country?
Every effort will be made by the British delegation at Ottawa to get reciprocal treatment, and I know of no better field than coal.
Following are the particulars:
The answer to the first part of the question is in the negative. The hon. and gallant Member may rest assured that His Majesty's Government will take all possible steps to secure the successful conclusion of these negotiations.
Will the right hon. Gentleman answer the last part of the question? Is the discussion never to be brought to a conclusion? Is it going on indefinitely?
No, Sir; it cannot go on indefinitely, but we do not think it necessary at this stage to take the steps suggested.
In the discussions that have taken place have the countries named referred to our import duties in relation to their restriction of coal imports?
They have made no reference whatever to our import duties.
Is the right hon. Gentleman in a position to state exactly why they are restricting coal imports to the extent that they are?
Hours And Wages
19.
asked the President of the Board of Trade what steps the Government propose to take in regard to the hours and wages in the coal industry?
I hope to be in a position to make a statement within the next few days.
If a question is put down on Monday next, will the Minister be able to make a statement then?
If the hon. Member puts down a question for Thursday, I hope to be able to give a reply then.
Can the right hon. Gentleman give any indication of when the Bill will be brought in?
No, I am afraid I cannot anticipate the statement which will be made on Thursday.
Irish Free State
7.
asked the Secretary of State for Dominion Affairs if he has any further statement to make with regard to the relations between this country and the Irish Free State?
I have nothing to add to the statements which I have already made.
11.
asked the Secretary of State for Dominion Affairs whether any consultation has now taken place with the other members of the British Commonwealth of Nations with regard to the controversy with the Irish Free State as affected by the Ottawa Conference?
As I have already made clear, the issues at the moment are between this country and the Irish Free State, inasmuch as they relate to the interpretation of the Treaty of 1921 and other Agreements forming part of the Settlement then reached between the two countries. His Majesty's Government in the United Kingdom have naturally taken steps to keep the other Dominion Governments informed of the position.
Would it not be better, in view of the grave interests raised by this matter, that questions of this kind should not be put on the Paper?
Imperial Economic Conference
10.
asked the Secretary of State for Dominion Affairs if Empire migration will be one of the subjects to be considered at the Ottawa Conference?
I can assure the right hon. and gallant Member that the question of migration, as an essential element in economic co-operation within the Empire, will not be lost sight of by the United Kingdom delegation at the Ottawa Conference.
May I take it that my right hon. Friend will take care that this question is brought before, the Conference?
It is bound to be linked up with all trade discussions. If my right hon. and gallant Friend means that the British Government are proposing to ask any of the Dominions to alter their migration policy so far as entrance at this moment is concerned, I do not think that would be practicable. As I have frequently stated, if we get an improvement in the Dominions that is the best thing for migration.
Would it not be advisable anyhow to put this item on the agenda paper so that the matter may be debated?
My hon. Friend should know—I think he forgets—that the agenda is prepared by the Dominion which is our host. This morning, only a few hours ago, I received the agenda, and I can assure the House that no opportunity will be lost to discuss this question.
Could the House see the agenda in due course?
I do not know about that, but I can give no answer now, seeing that I received the agenda only two hours ago.
Does the right hon. Gentleman really mean that the Government have no influence in the preparation of the agenda?
I am sorry if any such impression was created.
Have we no right to put anything on the agenda ourselves?
Certainly we have the right, just as every Dominion has the right.
Would it not be very improper for us to see the agenda before the body that has to discuss it has seen it?
14.
asked the President of the Board of Trade whether he is aware that a higher percentage of Empire manufacture is required before goods can be imported at preferential rates into the Dominions than is required for preferential importation into Great Britain; and whether he will bring this matter up for discussion at the Ottawa Conference, with a view to securing consistency of practice throughout the Empire?
In pursuance of a recommendation of the Imperial Conference, 1930, the Imperial Economic Committee are now investigating this question. When His Majesty's Governments in the Empire receive the Committee's Report they will no doubt consider what steps should be taken in the matter. Meanwhile the situation will be watched so that, if necessary, advantage may be taken of the Ottawa Conference for consultation with representatives of the Governments concerned.
30.
asked the Prime Minister the names of the full British delegation that will proceed to Ottawa; and who will head the delegation?
The Prime Minister made a full statement on this subject in a reply to my right hon. Friend the Member for Sparkbrook (Mr. Amery) on the 17th March, to which there is nothing to add at present except that, as regards the representative of the Ministry of Agriculture, it is proposed that my right hon. Friend the Minister of Agriculture and Fisheries should himself be a delegate. The question who will lead the delegation depends on the circumstances explained in the reply given on the 17th March.
Can the right hon. Gentleman say when we are likely to have a full list of the names of the delegation?
The hon. Member has had a full list, if he remembers the reply of the 17th March to which I have referred. It is contingent on the length of the Conference at Lausanne and is also contingent on the length of this present Session. Until those questions have been settled, it is impossible to say definitely whether each of the Ministers whose names have been given will be able to go.
Trade And Commerce
Commercial Treaties (France And Germany)
15.
asked the President of the Board of Trade if he will take steps to terminate the commercial treaties with France and Germany, in view of the fact that the introduction of quotas in regard to certain British products entering these countries has minimised any advantages to this country under the most-favoured-nation clause in the existing treaties?
There is no present intention of terminating the treaties in question but the existence of import quotas in other countries will have to be taken into account in determining the future treaty policy of this country.
Motor-Car Bodies (Exports)
18.
asked the President of the Board of Trade the number of motor-car bodies holding up to six persons, and of those holding over six, exported in 1930 and 1931, respectively; and how many of these were exported to the Irish Free State?.
I regret that I am unable to furnish particulars of the exports of motor-car bodies as these are not separately recorded in the trade returns of the United Kingdom.
Cotton Industry
17.
( for Mr. CHORLTON)
asked the President of the Board of Trade the reason for the delay in the publication by the Board of the report on the industrial outlook in the cotton trade in Lancashire by the committee of the University of Manchester; and if he will see that it is issued without more delay?
There has been no avoidable delay in connection with the publication of the report to which my hon. Friend refers. It was the last to be received of a series of five reports on industrial surveys which are now being printed for publication. Proofs of the report are at the present time with the University of Manchester for purposes of final revision and, when this has been completed, publication will take place at the earliest practicable date.
Mercantile Marine
Crew Accommodation
16.
asked the President of the Board of Trade if his attention has been drawn to the fact that more than 30 per cent. of British ships entering the port of Manchester were found to be insanitary; that the death rate of British seamen is over 70 per cent. in excess of the normal mortality rate; and what action is being taken to improve the quarters of the crew and the sanitation on British ships?
I am aware that the medical officer of health to the Port Sanitary Authority of Manchester has stated in his report for 1930 that of 1,324 British vessels entering the port in that year, 395 have been found on inspection to be insanitary. This number covers defective as well as insanitary vessels and in many cases the ships had small defects, due to voyage damage or wear and tear, which were remedied before the ships sailed again. The action taken to improve the crew accommodation in British ships is indicated in the statement the President of the Board of Trade circulated in the OFFICIAL REPORT of 7th July last. As regards mortality due to disease arising from the character of the occupation, the special investigation of which this House was informed on the 24th December, 1929, has been completed and the report will be published as soon as possible. It will show that the shipping industry does not compare unfavourably with other industries in this respect.
Has the right hon. Gentleman seen a Press report in a very authoritative quarter to the effect that the accommodation on these British ships is not as good as the accommodation on foreign ships? Does the right hon. Gentleman agree?
I have not seen the statement, but if I had seen it, I should have disagreed, as I do now.
Is the right hon. Gentleman not aware that it is the general complaint of the whole mercantile marine service of the country?
No, none of the organisations of the British mercantile marine has made any complaint whatever on the subject.
The men have.
St Mary's Shipping Company, Cardiff
12.
( for Mr. GROVES)
asked the President of the Board of Trade whether he is aware that the report by his Department upon the affairs of the St. Mary's Shipping Company, Cardiff, is still denied to shareholders; whether, in view of the provisions of the Companies Act for the protection of shareholders, he will state what action is taken by his Department when an inspector of the Board of Trade reports upon any particular company; and whether in future any such report will be made available to Members of the House of Commons and to shareholders of the company concerned?
A complaint in the sense of the first part of the question has been made to me. A copy of the report of an inspector appointed by the Board of Trade to investigate the affairs of a company in the circumstances to which the hon. Member refers is sent to the company concerned and to the applicants at whose request the investigation is ordered. A copy is also sent to the Director of Public Prosecutions where it is considered necessary under Section 136 of the Companies Act. As the hon. Member was informed yesterday, this has been done in regard to the report made on the affairs of the St. Mary's Shipping Company, Cardiff, and I have no authority to direct that the report shall be made available to other persons.
Unemployment
Work Schemes (Roads And Bridges)
21.
asked the Minister of Transport whether his Department intends to restart the work on roads, bridges, and tunnels in order to provide work for unemployed men?
I would refer the hon. Member to the statement of policy I made on 6th May in presenting the Estimates of my Department.
Statistics
23 and 24.
( for Mr. GROVES)
asked the Minister of Labour (1) the latest figures of unemployment for April and May, 1932, and the increase or decrease over the previous month;
(2) the number of persons unemployed registered in the Stratford and Canning Town Employment Exchanges, giving the figures for such Exchanges separately for the month of October, 1931; and whether he will give similar figures for the month ended 30th April, 1932?As the reply includes a table of figures, I will, if I may, circulate a statement in the OFFICIAL REPORT.
Following is the statement:
At 25th April, the latest date for which figures are available, the total number of unemployed persons on the registers of Employment Exchanges in Great Britain was 2,652,181, an increase of 84,849 over the figure for 21st March.
The numbers of unemployed persons on the registers of the Stratford and Canning Town Employment Exchanges were as follow:—
| |||
| Employment Exchange. | 26th Oct., 1931. | 25th April, 1932. | |
| Stratford | … | 9,113 | 9,041 |
| Canning Town | … | 13,396 | 11,584 |
Figures are not yet available for any date later than 25th April, 1932.
Agricultural Wages (Regulation) Act
22.
asked the Minister of Agriculture whether, in view of the increasing number of evasions in connection with the Agricultural Wages (Regulation) Act, 1924, he proposes to increase the number of inspectors?
I have no reason to suppose that the number of evasions of the provisions of the Agricultural Wages (Regulation) Act is increasing. The second part of the question consequently does not arise.
Are we to understand that the number of complaints to the Department is not increasing at the moment?
The examinations of test inspections, during the six months ended March, 1932, show that, of the workers' wages investigated, the percentage of cases of workers being underpaid was the same as that in the year ended September, 1931.
Is it not the case that fewer inspections are taking place and that the complaints that have been sent to the Department invariably show that the workers are underpaid?
No, Sir. I have no reason to suppose that there is any increase over last year.
League Of Nations
Chinese Flood Relief
25.
asked the Secretary of State for Foreign Affairs whether, in view of the continued need expressed by Sir John Hope Simpson, the chairman of the Chinese Flood Relief Commission, for financial aid to the extent of £220,000, he will urge at the coming meeting of the League of Nations Council the granting by each State represented on the League of Nations of a grant in proportion to their resources towards this sum?
The position as regards a grant by His Majesty's Government for the purposes of flood relief in China has not changed since the reply given to the hon. Member on the 25th of April last. My right hon. Friend cannot, therefore, undertake to urge other Governments to make a grant.
Contributions
26.
asked the Secretary of State for Foreign Affairs if he will, in the interests of economy, make representations to the League of Nations to the effect that, while we are prepared to pay our proportion of the expenses of the League on the assumption that all other members of the League pay theirs, we are not prepared to pay an additional sum to make good defaults in payment of other members of the League?
No, Sir. The non-payment of contributions to the League by certain of its members is not made good by additional contributions from this country, but out of surplus funds of the League. I would remind my hon. Friend that, as has previously been explained, it has been the practice of the League in some years to reduce contributions of States Members of the League by the deduction, in proportionate shares, of the surplus from the previous year. To this extent the contributions of the States who have paid their allotted shares punctually have possibly not been reduced to the extent they might have been if all contributions had been paid promptly.
Will the hon. Gentleman put forward the suggestion that representatives of those countries that have not paid their contributions should not take part in the deliberations and decisions of the League in the meantime?
Poor Law Relief (Walthamstow And Leyton)
27.
asked the Minister of Health if he will give the number of men and women, separately, in receipt of public assistance in the Walthamstow and Leyton area at the end of September, 1931, and similar figures at the latest date for which such figures are available; and if he will give the number per 10,000 of the population on the same respective dates?
The returns made to my Department relate to counties and county boroughs as a whole. My right hon. Friend regrets, therefore, that the figures sought are not available.
Rent Restrictions Act
28.
asked the Prime Minister whether he can now make a statement as to the future policy of the Government with reference to the Rent Restrictions Act?
31.
asked the Prime Minister on what date the Rent Bill will be introduced?
I hope very shortly to make a general statement about the business for the rest of the Session.
Capital Issues (Control)
29.
asked the Prime Minister whether, in view of the prevalence of fraudulent practices in business, as proved by oases recently before the courts, he will consider setting up a Royal Commission to inquire into the extent of these practices and the part played by banks in such transactions, and with a view to suggesting measures for providing for a more complete disclosure of transactions by public companies and for a greater control over new capital issues in order to protect the investor against fraudulent flotations?
I am not aware of any circumstances connected with recent cases before the courts which call for the appointment of a Royal Commission. In my view the existing law is sufficient to deal with fraudulent practices such as the hon. Member has in mind.
Is the right hon. Gentleman aware that in a very large number of cases comparatively poor people have lost all their savings by putting money into these fraudulent flotations?
If any Royal Commission is appointed, will the right hon. Gentleman include co-operative societies within the scope of its reference?
Is the right hon. Gentleman aware of the reply given by the Attorney-General recently in which the right hon. and learned Gentleman agreed that someone ought to be dealt with in connection with the Kreuger business, but that he had no power; and does he not think that in such cases the Government ought to take power?
I was not aware of that reply, but it would hardly justify the setting up of a Royal Commission.
Is the right hon. Gentleman not aware that as a result of appeals to take such shares made to investors all over the country large sums of money have been lost and that the Government have no power to deal with those persons who push shares.
Government Departments
Salaries And Bonus
32.
asked the Chancellor of the Exchequer if he can now make any definite statement as to the intentions of the Government with regard to the consolidation of bonus and salaries in the Civil Service?
My right hon. Friend is not yet in a position to make a statement.
Import Duties Advisory Committee
41.
asked the Financial Secretary to the Treasury what is the present staff employed by the Tariff Advisory Committee; whether this staff will need to be increased in the near future; and to what extent it has been found possible to reduce the staff of the Board of Trade in view of the amount of work previously performed by that Department which have now been transferred to the Tariff Advisory Committee?
A statement of the staff at present employed by the Import Duties Advisory Committee was circulated in yesterday's OFFICIAL REPORT. Proposals for a small increase of staff are at present under consideration. The question of reducing the staff of the Board of Trade by reason of the constitution of the Committee does not arise, as the Committee's work is new work arising from the Import Duties Act, 1932.
From what sources will this new staff be drawn?
Probably from other Government Departments, and some are being recruited.
Horticultural Products (Import Duties)
33.
asked the Chancellor of the Exchequer if he will state in detail the revenue received from the various duties imposed by the Horticultural Products (Emergency Customs Duties) Act to the latest convenient date?
I am sending the hon. Member a statement giving the information he desires.
Will the statement appear in the OFFICIAL REPORT?
It covers a considerable space, and as will be remembered, it has been considered desirable for the sake of economy not to extend the OFFICIAL REPORT unnecessarily by the inclusion of long statistical tables.
Surely, if one Member of the House is entitled to this information, all Members are entitled to it?
I can certainly send it to any hon. Member who desires it, but, unless there was a general desire in all parts of the House to have it, I should deprecate the inclusion of such a statistical table in the OFFICIAL REPORT.
This is a new sort of ruling altogether—that information elicited by a question in the House, is to be circulated or not circulated, at the discretion of the Minister. Many very long statements are published in the OFFICIAL REPORT on much less important questions. I beg the right hon. and gallant Gentleman to reconsider the matter.
I am entirely in the hands of the House in this matter. I can put the statement in the Library, and, if the hon. Member still thinks it desirable to have it printed in the OFFICIAL REPORT and puts down the question again, I will see what can be done. It is solely with the object of meeting the desires of Members of the House, with a due regard for economy, that I have taken the step, in certain cases, of sending the information direct to the Member who has put a question.
Is the right hon. and gallant Gentleman aware that I received a reply from the Secretary to the Overseas Trade Department seven days after the question was put, and already I have received six letters from different parts of the country asking me to provide copies of that reply? Had that answer appeared in the OFFICIAL REPORT it would have saved me some writing.
Ex-Enemy Property (Liquidation)
34.
asked the Chancellor of the Exchequer what is the amount of the outstanding balance of liquidated German property agreed under the Hague agreement to be retained in this country; and to what use such surplus has been applied?
The outstanding balance of liquidated property credited to Germany is approximately £18,500,000. This figure does not include a certain amount of liquidated property not yet allocated, part of which will eventually be credited to Germany. As regards the second part of the question, I would refer the hon. Member to the full statement made by the then Chancellor of the Exchequer on the 21st November, 1929.
Can the right hon. and gallant Gentleman say whether the figure which he has stated includes the sum of £3,500,000, which appears as "Clearing Office, Enemy Debts" in the Board of Trade figures of the Exchequer balances for 1930–31, because, if so, that would appear to be a separate item?
I should be obliged to the hon. Member if he would put down that question.
Enemy Action Claims
35.
asked the Chancellor of the Exchequer what sum would be required to complete payment in full, on the basis of the Sumner Commission's assessments and recommendations, to the claimants admitted by that commission who have received only a portion of their assessments, taking into account the extent to which such claimants have received compensation from other sources?
The sum required to carry out the course of action referred to in the question would be approximately £8,000,000.
Has it been made clear to those claimants who had their claims originally passed that there is money available for them still?
I think that the money available must be subject to the general claims of the Reparations Account. It would not be fair that one set of claimants should have the money paid in full, and that another set should not.
36.
asked the Chancellor of the Exchequer what is the net amount, after taking credit for repayment of sums advanced on loan, which has been paid out ex gratia on claims admitted in accordance with recommendations of the Royal Commission on Compensation for Suffering and Damage by Enemy Action; whether payments are still being made in respect of such claims; and what is the total sum paid out in respect of the claims known as the belated claims, which were outside the recommendations of the Royal Commission?
The net amount paid to date on awards recommended by the Royal Commission on Compensation for Suffering and Damage by Enemy Action, after deduction of amounts received by way of repayment of advances to claimants, is £4,004,287. The total amount paid to date on the claims known as the belated claims is,£288,895. Payments are still being made in a few exceptional cases.
Can my right hon. and gallant Friend say whether the difference between the amount that he has given and the original sum of £5,000,000 voted by the House is available as a balance?
A small sum is available from which payments are still being made, but I could not say without notice how much it comes to.
Will my right hon. and gallant Friend consider the desirability of making the position in regard to this matter clear to the House, as there are many people who feel very aggrieved? Whatever the facts may be, I suggest that it would be an advantage to have the position of these claimants made perfectly clear.
I shall note my hon. Friend's request.
Monetary Policy
37.
asked the Chancellor of the Exchequer if it is any part of the Government's monetary policy to maintain a stable rate of exchange between the pound sterling and the dollar of the United States of America?
I would refer my hon. Friend to the statement made by my right hon. Friend the Chancellor of the Exchequer on the Second Reading of the Finance Bill.
Nickel Coinage
38.
asked the Chancellor of the Exchequer whether, seeing that a considerable saving would be effected by the use of nickel instead of silver, and that nickel is a better looking and safer metal and lends itself less to imitation than silver, he will consider substituting nickel for silver in the case of the smaller silver coins up to and including the shilling?
My hon. Friend's suggestion has been fully examined on a number of occasions in the past, particularly in 1927, and rejected for reasons of policy. Those reasons still hold good; moreover, the price of nickel has since risen substantially and that of silver has fallen so that the possibility of savings is to-day comparatively small. I am satisfied that no useful purpose would be served by reopening the question now.
Beer Duty
39.
asked the Chancellor of the Exchequer what was the highest standard of gravity of beer sold in the year ending 31st March, 1932, and what was the lowest; and what was the average gravity of all beer sold and the actual duty on 36 gallons, based on the average gravity?
I regret that the information asked for in the first part of the question is not available. As regards the second part, the average gravity of all beer retained for home consumption in the year ended 31st March, 1932, was approximately 1041.6 degrees, which represents a duty of £3 9s. per 36 bulk gallons.
Scotland
Silks Trial
1.
( for Mr. McGOVERN)
asked the Secretary of State for Scotland the cost to the Crown of the recent Silks trial up to the period of conviction?
I understand that the accounts of expenses in connection with this case have not yet been completed, and I am, therefore, not in a position to give the information desired by the hon. Member.
Can the hon. Gentleman give me any idea when they will be completed?
No, I am afraid I cannot, but I shall be glad to give the information as soon as I can.
Mearnskirk Sanatorium
2.
( for Mr. McGOVERN)
asked the Secretary of State for Scotland the weekly cost per patient in Mearnskirk sanatorium?
The weekly cost per patient in Mearnskirk Sanatorium during the year ended the 31st May, 1931 (the only full year for which figures are at present available) was £3 14s. 8d.
Income Tax
40.
( for Lord FERMOY)
asked the Chancellor of the Exchequer whether he proposes to notify farmers, and, if so, how, of the conditions under which they can secure Income Tax abatement in respect of wear and tear to agricultural machinery?
The steps to be taken to claim this allowance are clearly indicated in the appropriate Income Tax forms, and the matter is fully explained in a Leaflet (A718/L.H.) "Farmers and the Income Tax," issued by the Ministry of Agriculture and Fisheries in January, 1931. I would add that the provisions of Rule 6 of Cases I and II of Schedule D of the Income Tax Act, 1918, allowing a deduction in respect of the wear and tear of machinery and plant, extend of course to farmers charged with Income Tax by reference to their actual profits and not by reference to the annual value of the lands occupied.
Business Of The House
Motion made, and Question put,
"That the Proceedings in Committee on Finance [Advance to Road Fund] be
Division No. 193.]
| AYES.
| [3.17 p.m.
|
| Acland-Troyte, Lieut.-Colonel | Erskine, Lord (Weston-super-Mare) | Macpherson, Rt. Hon. James I. |
| Adams, Samuel Vyvyan T. (Leeds, W.) | Essenhigh, Reginald Clare | Macqulsten, Frederick Alexander |
| Albery, Irving James | Falle, Sir Bertram G. | Maitland, Adam |
| Allen, Lt.-Col. J. Sandeman (B'k'nh'd.) | Ferguson, Sir John | Mallalieu, Edward Lancelot |
| Allen, Lt.-Col. Sir William (Armagh) | Foot, Dingle (Dundee) | Marnier, Geoffrey le M. |
| Anstruther-Gray, W. J. | Foot, Isaac (Cornwall, Bodmin) | Margesson, Capt. Henry David H. |
| Applin, Lieut.-Col. Reginald V. K. | Fox, Sir Gifford | Marsden, Commander Arthur |
| Astbury, Lieut.-Com. Frederick Wolfe | Fuller, Captain A. G. | Martin, Thomas B. |
| Baillie, Sir Adrian W. M. | Ganzonl, Sir John | Mason, David M. (Edinburgh, E.) |
| Baldwin, Rt. Hon. Stanley | Glossop, C. W. H. | Mayhew, Lieut.-Colonel John |
| Balfour, Capt. Harold (I. of Thanet) | Gluckstein, Louis Halle | Merriman, Sir F. Boyd |
| Barclay-Harvey, C. M. | Glyn, Major Ralph G. C. | Mills, Sir Frederick (Leyton, E.) |
| Barton, Capt. Basil Kelsey | Goff, Sir Park | Mills, Major J. D. (New Forest) |
| Beaumont, Hon. R. E. B. (Portsm'th, C.) | Goldie, Noel B. | Milne, Charles |
| Benn, Sir Arthur Shirley | Goodman, Colonel Albert W. | Milne, John Sydney Wardlaw- |
| Bennett, Capt. Sir Ernest Nathaniel | Grattan-Doyle, Sir Nicholas | Mitchell, Harold P. (Br'tf'd & Chitw'k) |
| Bevan, Stuart James (Holborn) | Gretton, Colonel Rt. Hon. John | Mitchell, Sir W. Lane (Streatham) |
| Bird, Ernest Roy (Yorks., Skipton) | Griffith, F. Kingsley (Middlesbro', W). | Monsell, Rt. Hon. Sir B. Eyres |
| Boothby, Robert John Graham | Grimston, R. V. | Morris, John Patrick (Sallord, N.) |
| Borodale, Viscount | Gunston, Captain D. W. | Morris. Owen Temple (Cardiff, E.) |
| Bossom, A. C. | Guy, J. C. Morrison | Morris-Jones, Dr. J. H. (Denbigh) |
| Boulton, W. W. | Hales, Harold K. | Most, Captain H. J. |
| Bower, Lieut.-Com. Robert Tatton | Hamilton, Sir R. W. (Orkney & Zetl'nd) | Muirhead, Major A. J. |
| Boyd-Carpenter, Sir Archibald | Hanley, Dennis A. | Munro, Patrick |
| Braithwaite, J. G. (Hillsborough) | Hannon, Patrick Joseph Henry | Nathan, Major H. L. |
| Briscoe, Capt. Richard George | Harbord, Arthur | Nation, Brigadier-General J. J. H |
| Brockiebank, C. E. R. | Harris, Sir Percy | Nicholson, Godfrey (Morpeth) |
| Brown, Col. D. C. (N'th'l'd., Hsxham) | Hartland, George A. | Nicholson, Rt. Hn. W. G. (Petersf'ld) |
| Brown, Ernest (Leith) | Harvey, George (Lambeth, Ktnningt'n) | North, Captain Edward T. |
| Brown, Brig.-Gen. H. C. (Berks., Newb'y) | Harvey, Major S. E. (Devon, Totnes) | Nunn, William |
| Browne, Captain A. C. | Headlam, Lieut.-Col. Cuthbert M. | O'Neill, Rt. Hon. Sir Hugh |
| Burnett, John George | Hellgers, Captain F. F. A. | Palmer, Francis Noel |
| Cadogan, Hon. Edward | Henderson, Sir Vivian L. (Chelmsford) | Patrick, Colin M. |
| Campbell, Edward Taswell (Bromlay) | Heneage, Lieut.-Colonel Arthur P. | Pearson, William G. |
| Campbell, Rear-Adml. G. (Burnley) | Holdsworth, Herbert | Peat, Charles U. |
| Caporn, Arthur Cecil | Hore-Belisha, Leslie | Percy, Lord Eustace |
| Castle Stewart, Earl | Hornby, Frank | Peto, Sir Basil E. (Devon, Barnstaple) |
| Cautley, Sir Henry S. | Horobin, Ian M. | Peto, Geoffrey K. (W'verh'pt'n, Bilst'n) |
| Cayzer, Maj. Sir H. H. (Prtsmth., S.) | Horsbrugh, Florence | Pickering, Ernest H. |
| Cayzgr, Sir Charles (Chester, City) | Howard, Tom Forrest | Pickford, Hon. Mary Ada |
| Cazalet, Thelma (Islington, E.) | Hudson, Capt. A. U. M. (Hackney, N.) | Powell, Lieut.-Col. Evelyn G, H. |
| Chotzner, Alfred James | Hudson, Robert Spear (Southport) | Procter, Major Henry Adam |
| Christie, James Archibald | Hume, Sir George Hopwood | Ralkes, Henry V. A. M. |
| Clarry, Reginald George | Hunter, Capt. M. J. (Brigg) | Ramsay, Alexander (W. Bromwich) |
| Clayton, Dr. George C. | Hurst, Sir Gerald B. | Rea, Walter Russell |
| Cobb, Sir Cyril | Hutchison, Maj.-Gen. Sir R. (Montr'se) | Reed, Arthur C. (Exeter) |
| Cochrane, Commander Hon. A. D. | Hutchison, W. D. (Essex. Romf'd) | Reid, William Allan (Derby) |
| Colville, John | Jackson, Sir Henry (Wandsworth, C.) | Remer, John R. |
| Conant, R. J. E. | James, Wing-Com. A. W. H. | Reynolds, Col. Sir James Philip |
| Cook, Thomas A. | Jamieson. Douglas | Roberts. Aled (Wrexham) |
| Cooke, Douglas | Jesson, Major Thomas E. | Robinson, John Roland |
| Cowan. D. M. | Johnston, J. W. (Clackmannan) | Rosbotham, S. T. |
| Craddock, Sir Reginald Henry | Jones, Henry Haydn (Merioneth) | Ross, Ronald D. |
| Cranborne, Viscount | Ker, J. Campbell | Ross Taylor, Walter (Woodbridge) |
| Craven-Ellis, William | Kerr, Hamilton W. | Runclman, Rt. Hon. Walter |
| Crookshank, Col. C. de Windt (Bootle) | Knatchbull, Captain Hon. M. H. R. | Runge, Norah Cecil |
| Crookshank, Capt. H. C. (Gainsb'ro) | Lamb, Sir Joseph Quinton | Russell, Albert (Kirkcaldy) |
| Cruddas, Lieut.-Colonel Bernard | Lambert, Rt. Hon. George | Russell, Alexander West (Tynemouth) |
| Culverwell, Cyril Tom | Leckie, J. A. | Salmon, Major Isidore |
| Davies, Maj. Geo. F. (Somerset, Yeovil) | Lees-Jones, John | Salt, Edward W. |
| Davison, Sir William Henry | Leighton, Major B. E. P. | Samuel, Sir Arthur Michael (F'nham) |
| Denman, Hon. R. D. | Levy, Thomas | Samuel, Rt. Hon. Sir H. (Darwen) |
| Denville, Alfred | Lewis, Oswald | Sandeman, Sir A. N. Stewart |
| Despencer-Robertson, Major J. A. F. | Liddall, Walter S. | Savery, Samuel Servington |
| Dickie, John P. | Lindsay, Noel Ker | Scone, Lord |
| Dower, Captain A. V. G. | Llewellyn-Jones, Frederick | Shakespeare, Geoffrey H. |
| Drewe, Cedric | Lovat-Fraser, James Alexander | Shaw, Helen B. (Lanark, Bothwell) |
| Dugdale, Captain Thomas Lionel | Lumley, Captain Lawrence R. | Shepperson, Sir Ernest W. |
| Duncan, James A. L. (Kensington, N.) | Lyons, Abraham Montagu | Sinclair, Maj. Rt. Hn. Sir A. (C'thness) |
| Dunglass, Lord | Mabane, William | Skeiton, Archibald Noel |
| Eady, George H. | MacAndrew, Lieut.-Col. C. G. (Partick) | Smiles, Lieut.-Col. Sir Walter D. |
| Eden, Robert Anthony | Macdonald, Capt. P. D. (I. of W.) | Somerville, Annesley A (Windsor) |
| Edmondson, Major A. J. | Maclay, Hon. Joseph Paton | Soper, Richard |
| Elliot, Major Rt. Hon. Walter E. | McLean, Major Aian | Sotheron-Estcourt, Captain T. E. |
| Emmott, Charles E. G. C. | McLean, Dr. W. H. (Tradeston) | Southby, Commander Archibald R. J. |
exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House)."—-[ Mr. Baldwin.]
The House divided: Ayes, 257; Noes, 30.
| Spender-Clay, Rt. Hon. Herbert H. | Thomas, James P. L. (Hereford) | Whiteside, Borras Noel H. |
| Stanley, Hon. O. F. G. (Westmorland) | Titchfield, Major the Marquess of | Williams, Herbert G. (Croydon, S.) |
| Stevenson, James | Todd, Capt. A. J. K. (B'wick-on-T.) | Wills, Wilfrid D. |
| Stewart, William J. | Vaughan-Morgan, Sir Kenyon | Wilton, G. H. A. (Cambridge U.) |
| Stones, James | Wallace, Captain O. E. (Hornsey) | Windsor-Clive, Lieut.-Colonel George |
| Stourton, Hon. John J. | Ward, Lt.-Col. Sir A. L. (Hull) | Womersley, Walter James |
| Strauss, Edward A. | Ward, Irene Mary Bewick (Wallsend) | Worthington, Dr. John V. |
| Strickland, Captain W. F. | Ward, Sarah Adelaide (Cannock) | |
| Sueter, Bear-Admiral Murray F. | Warrender, Sir Victor A. G. | TELLERS FOR THE AYES.— |
| Sutcliffe, Harold | Watt, Captain George Steven H. | Sir Frederick Thomson and Sir |
| Templeton, William P. | Weymouth, Viscount | George Penny. |
| Thomas, Rt. Hon. J. H. (Derby) | White, Henry Graham |
NOES.
| ||
| Adams, D. M. (Poplar, South) | Hall, George H. (Marthyr Tydvil) | Thome, William James |
| Batey, Joseph | Hirst, George Henry | Tinker, John Joseph |
| Bevan, Aneurin (Ebbw Vale) | Jenkins, Sir William | Wedgwood, Rt. Hon. Josiah |
| Buchanan, George | Jones, Morgan (Caerphilly) | Williams, David (Swansea, East) |
| Cape, Thomas | Lansbury, Rt. Hon. George | Williams, Edward John (Ogmore) |
| Daggar, George | Logan, David Gilbert | Williams, Dr. John H. (Lianelly) |
| Davies, Rhys John (Westhoughton) | Lunn, William | Williams, Thomas (York, Don Valley) |
| Edwards, Charles | McEntee, Valentine L. | |
| Greenwood, Rt. Hon. Arthur | Maclean, Neil (Glasgow, Govan) | TELLERS FOR THE NOES.— |
| Grenfell, David Reel (Glamorgan) | Parkinton, John Allen | Mr. Gordon Macdonald and Mr. Groves. |
| Grundy, Thomas W. | Price, Gabriel | |
| Hall, F. (York, W. R., Normanton) | Salter, Dr. Alfred | |
Orders Of The Day
Finance Bill
Further considered in Committee. [ Progress, 23rd May.]
[Sir DENNIS HERBERT in the Chair.]
Clause 6—(Power To Remove Goods From Schedule I Of 22 Geo 5, C 8)
Question again proposed, "That the Clause stand part of the Bill."
Before we part with this Clause hon. Members ought to have a clearer understanding of the grave possibilities involved and the constitutional departure that we are making. Last evening this question was discussed at some length, but a large number of hon. Members who are here now had not the privilege of listening to the Debate. We wish, therefore, to emphasize again our opposition to the policy enunciated in this Clause. We regard it as most extraordinary and as a constitutional departure for which a National Government ought not to be responsible. There are grave possibilities in the House of Commons delegating its power to other persons. Whether it be a question of imported meat or wheat being taxed or one of the items now in the Free List being taxed, the House of Commons ought in. the last resort to be the power that determines whether import duties should be imposed.
3.30 p.m. May I remind hon. Members of what happened in the last day or two during the Committee and Report stages of the Import Duties Act? Every hon. Member will recall that although the hon. and gallant Member for Bournemouth (Sir H. Croft) had for years demanded Protection as a be-all and end-all, as the solution for all our industrial troubles, he sought to exclude soya beans from the import duty because he realised that to impose a duty upon a cattle food would be placing a further burden upon farmers. In the same way the right hon. Member for West Birmingham (Sir A. Chamberlain) saw the danger of imposing a duty upon precious and semi-precious stones, and appealed to the Chancellor to exclude them, because they were used by some traders in Birmingham for the production of articles either to beautify ladies or for utility purposes. If it be true, as the hon. and gallant Member for Bournemouth said, that to impose a, duty on soya beans would increase the price of them to the farmers, then a duty would have the same effect in increasing the price of any other commodity. The Noble Lord the Member for Horsham (Earl Winterton) told us on the last day of the Report stage—I am sure the hon. Member for South Croydon (Mr. H. Williams) will recollect this, because he sat beside the Noble Lord at the time—that he had information to show that unless lead and zinc were included in the Free List—I was not sitting beside the Noble Lord. I was having dinner at the time.
I am awfully sorry the hon. Member was not present, because I think it would have been an education for him as to the dangers of Protection. However, the Noble Lord did indicate that even the threat of a duty on zinc and lead had brought about an increase of 7 per cent. in the price, and so that as both those metals are a raw material of important industries in this country such an increase of price would be deadly to those industries. The right hon. Member for Tamworth (Sir A. Steel-Maitland), who has always been a loyal devotee of what he calls Protection, who followed the Noble Lord, also saw the danger of imposing a duty upon lead and zinc. All these things lead to the conclusion that while certain industries may be assisted by duties there are other industries which find a duty upon their raw materials having a deadly effect.
The Parliamentary Secretary to the Board of Trade, in one of his extraordinarily agile speeches, tried last night to place the Opposition on the horns of a dilemma. He said: "The Opposition have to make up their mind whether they are going to support a system whereby we shall have cheap meat, which will result in the agricultural labourers in this country having a very small wage, or whether they will agree to a duty upon imported meat, increasing the price of it, so that the agricultural labourer can obtain a decent wage." That really is not the case. First of all, we regard Clause 6 as a departure from constitutional practice. If it is true that the moment has arisen when, in the national interest, and in the interest of agriculture and of agricultural labourers, it becomes necessary to impose a duty upon imported meat, then let the House of Commons impose the duty, and not delegate their power to three persons who may, conceivably, inflict untold harm upon millions of people, at a time when the House is not in session. We are not accepting the dilemma suggested by the hon. Gentleman. During the Whitsuntide holiday I had the experience of passing through a good deal of agricultural country, and no one can deny that depression has descended upon agriculture in many places, but I am also reminded, every time I arrive at my home, that there are tens of thousands of mine workers who never know where the next meal is coming from. Fewer miners are at work, and those who are employed are working a fewer number of days, and their wages have almost reached vanishing point. In some parts of South Yorkshire men, women and children are turned out of their houses because they are unable to pay present-day rents, and I shall need a lot of persuading before I can agree to three persons, no matter how intelligent or how capable they may be, having the power to impose further burdens upon those wretched creatures, who scarcely know where the next meal is to come from. I agree that the National Government have the power to do just as they will. We are willing to concede to a National Government the power to do what they think is right at the moment, but we are equally unwilling to allow a committee of three, with no responsibility to the House of Commons, no responsibility to the electorate, and no responsibility to observe our constitutional procedure, to determine what is to be the standard of life for vast numbers of people who would work regularly if they had the opportunity, but who, owing to causes over which they have no control, are at this moment living under terrifying conditions. We are hostile to duties being placed upon wheat or meat at all, and we are hostile to duties being placed upon raw materials which are vital to our in- dustries without the House of Commons having the opportunity of dealing with the question; and therefore we protest against this Clause being included in the Bill; and we are hopeful that all the Members of the Liberal party, whether they are attached to the Liberal National party or to the free Liberal party, and whether they form part of the Cabinet or not, will join with us in the Lobby in a protest against what we regard as a very undesirable and unconstitutional departure.I have listened with considerable interest to the speech of the hon. Member for Don Valley (Mr. T. Williams), and in particular to his account of what happened during the Committee stage of the Import Duties Act. I hope he will take the trouble to re-read those Debates, and then I think he will come to the conclusion that his memory has been a little at fault. He made a reference to soya beans. Soya beans were not put on the Free List primarily because of agricultural interests in this country. He implied that some of us supported soya beans being transferred to the Free List because we were afraid the cost of cattle cake would be raised. But that was not the reason. It happens that the soya bean produces a lot of oil and a lot of cake, and there is a very large re-export trade in that cake, and it might well be that we could not persuade foreign consumers to go on buying that cake. It also happens that monkey nuts or ground nuts—they have many titles; we know them as monkey nuts when were are school boys and when we grow up we call them ground nuts— furnish an oil very similar to that of the soya bean and a cake that is equally good for cattle feeding, and therefore they could just as well feed their cattle on ground nut cake as on soya bean cake. There was, therefore, a risk of some interruption in a very important export trade in soya bean oil and soya bean cake, which in favourable years rises to a total of £1,000,000. For that reason some of us thought that soya beans should be on the Free List.
I have risen to say this because I did not wish our motives to be misunderstood. If at the time we were discussing the Import Duties Act there had been a Clause allowing drawbacks which would have made it possible for those in the soya bean industry to obtain a drawback in respect of re-exports of soya bean oil or soya bean cake, the attitude some of us would have taken with regard to soya beans would have been different. That happened because the Import Duties Act did not contain that very important Amendment which is contained in Clause 8 of this Bill. The hon. Member for Don Valley said that we should not delegate power to a Committee that might inflict injuries on the country while the House is not sitting. May I point out to the hon. Member that under the terms of the Import Duties Act which we are amending the Advisory Committee can do nothing of that kind, and under this Clause they have to take into account not only the interests of the producers but of the consumers as well. They have to investigate all the circumstances, and, even assuming that they do indulge in the indiscretions which the hon. Member for Don Valley fears, it is only a very limited period before the House meets again, and the indiscretions of the Advisory Committee can then be brought to an end. I support this Clause because it will enable the Advisory Committee to consider the transfer to the Dutiable List of articles which are now on the Free List and which may be there for all time. They may be commodities not produced in any great quantity in the United Kingdom or the British Empire. There are other commodities produced in more adequate quantities in the United Kingdom and the Empire, and therefore it is a matter of business whether they should or should not remain on the Free List. An instance of that is furnished in the case of news print. A specific pledge was given by the Chancellor of the Exchequer that a Clause would be introduced into the Finance Bill in order that news print manufacturers might have an opportunity of submitting their case to an exhaustive examination. This Clause is carrying out that specific pledge. I am anxious that the Advisory Committee shall, with perfect freedom, have the opportunity of transferring temporarily any articles which are at present dutiable to the Free List on the ground that the existing circumstances are such that it is not desirable that those articles shall be made dutiable for the time being, recognising that later on it may be desirable to make them dutiable. The Treasury have power, under the Import Duties Act, to transfer articles to the Free List, and then they are deemed to be in the Schedule of the Import Duties Act and cannot be transferred back. Obviously, it will make the whole thing more flexible if an article can be transferred from the Free List after examination. If the Advisory Committee has that power, it gives them the opportunity of transferring articles to the Free List. The Advisory Committee might hesitate about saying that a thing ought to be on the Free List because it might be of the opinion, in regard to a certain article that, after a period has elapsed, the production of that articie will have so much increased that the manufacturers might be able to supply the whole of the home market at a reasonable price, and in those circumstances the Advisory Committee might decide to indulge in the risk of maintaining a duty which otherwise might not be justified.We do not object to the National Government doing what the hon. Member has just stated, but we object to this particular power being delegated to a committee of three persons. If the House of Commons wishes to add or withdraw from the Free List any articles, the House should have that power, and it ought not to be delegated to a committee.
The hon. Member for Don Valley may object to the Advisory Committee on constitutional grounds or on practical grounds, but I am very much more concerned with the practical consideration of employment for our own people rather than the abstract consideration which the hon. Member has put forward. I was discussing a purely practical consideration. I know many commodities which are dutiable, and I have received communications, in common with other hon. Members, urging that it is not desirable that certain commodities should be dutiable. Some manufacturers have applied to the Advisory Committee, and they have probably said: "Here is an article which is not made in adequate quantities in this country, but we have reason to believe that it will made in adequate quantities in three or four years' time." Are we to take away from that industry the advantage of a tariff because of a temporary situation like that? In that case, you put the Committee in a position in which in order to do a temporary good they do a permanent evil. This Clause gives the Advisory Committee perfect flexibility, and I am amazed that Free Traders, who have criticised tariffs on the ground that they may lead to lobbying, should oppose it.
We want all these cases examined on merit alone. This House, rightly or wrongly, has taken up the position that this country is to be a Protectionist country, and we have to make our decisions on principle. The function of committees is to examine technical points, and therefore it is right to refer these questions to a committee in order to find out where the balance of advantage lies. If we do not insert in the Import Duties Act the Clause which we are now discussing what will happen? Members of this House will be lobbied on, the ground that there are certain things not dutiable which ought to be made dutiable. If hon. Members desire to remove from politics the one unsatisfactory effect of tariffs it can only be done by giving the Advisory Committee power to examine the circumstances of every commodity. I believe that the situation will require very careful consideration in the future. The other night the Chancellor of the Exchequer moved a Financial Resolution dealing with silk which will appear as a new Clause in this Bill, and the right hon. Gentleman has asked the Advisory Committee, as an act of grace, though they are under no statutory obligation, to examine the position with regard to the Silk Duties. I agree that the Chancellor of the Exchequer cannot do that at the moment owing to revenue considerations, but I hope the time will come when the Advisory Committee will examine the circumstances of every commodity. I do not blame the Government for having kept from the Advisory Committee certain commodities which have an important revenue aspect, but, if we want protection which will not corrupt our public life, then we ought to give the Advisory Committee full power to examine every commodity, and every power to determine whether an article ought to be on the Free List or whether it ought to be taken off. I am amazed that Free Traders are objecting to this Clause which will do so much to enable the Advisory Committee to deal fairly with tariffs.I have not been able to follow quite clearly some of the arguments of the hon. Member for South Croydon (Mr. H. Williams), but the fundamental issue that we are combating on this Clause is the placing of this matter in the hands of three persons. Last night we discussed several proposed Amendments to the Clause, but, owing to the lateness of the hour, there was not so good an attendance in the Chamber as there might have been on an important matter like this. I am glad that we are now able to discuss the Clause at an early hour, because the issue is so tremendous that I want Members of the House to be alive to what they are doing. Hon. Members opposite, who belong to a big party, may from time to time not pay very close attention to the business of the House, but may be inclined to leave much of the work to those who do pay close attention to it, knowing all the time that they cannot get into difficulties because of the strength of the party's voting power. I would ask hon. Members to read the marginal note to Clause 6.
That gives power to three commissioners to remove goods from the Free List if they think proper—[HON. MEMBERS: "No!"]. Of course it is a recommendation to the Government, and, if the Government believe in it, they will carry it into effect; but it will be the Government of the day, and not the House of Commons. The work of the House of Commons, however, can only be effective when the full light of Debate is thrown upon whatever the Government want to do. In a few years' time, hon. Members may regret what they are trying to do this afternoon, and for that reason I want the House of Commons to direct their attention to what they are doing. Last night the hon. Member for Barnstaple (Sir B. Peto), who was quite candid in regard to his agreement with this proposal, said:"Power to remove goods from Schedule I of 22 Geo. 5, c. 8."
It follows, from the arguments which have already been advanced, that, if the Advisory Committee recommended, and the Government of the day agreed, then, without any Debate here, those articles can be taken out of the Free List, When we are passing from Free Trade to tariffs, and when hon. Members in most of their speeches said they were not in agreement with the taxation of the food of the people, are they going to allow, under the cover of a Government Order, these articles to be taken out of the Free List without debate in the House of Commons? If so, I claim that the fact ought to be brought to the notice of the constituents who sent them here. We who defended our position in the country want to be able to point out to the House where they are going wrong if they attempt to take these articles out of the Free List, and that is why we are arguing against this fundamental constitutional change. It may be said that we are not strict constitutionalists, but, speaking for myself, I am a great believer in Parliamentary government, and it will be a sad time for the country if we neglect the opportunity of making out as strong a case as we can. That is why I do not want to see any attempt to belittle the powers of the House. Let us assume—and it is within the bounds of possibility—that in four or five years' time we may get a Labour Government. Suppose that in that event we say we will set up an Advisory Committee, consisting of three members of the Miners' Federation, to decide whether the mines should be nationalised or not—[Interruption.] The Government will decide. Suppose that, while we are on holiday during a Recess, or away at an Ottawa Conference, or something like that, the Government bring in auch a proposal and the mines are nationalised without any voice being raised in the House of Commons. I remember its being said some time ago, when we were discussing these matters here, that our case could be torn up by force of argument. What better place is there in which to show our weakness than the Floor of the House of Commons? What is now going to be done will lead up to what we may do when we come into power. Assume that the hon. Member for Bridgeton (Mr. Maxton) does not get in at the next election—I know that he will, but let us assume for the moment that he does not—and that we get into power and say that we will nationalise the Bank of England, and will put Maxton and certain of his people—[HON. MEMBERS: "Order!"] No; he is not a Member then; he is free from party taint, and unbiased. Assume that we put him there to decide whether the Bank of England shall be nationalised or not. Hon. Members say that there can be no prejudice in the minds of big people— that they are far above prejudice; but let me tell them that, however honest a man may be in his opinion, he is bound to have a prejudiced outlook. His environment and upbringing give him a certain amount of prejudice. I claim to be as fair a man as anyone, but, when I examine myself from time to time, I can see a line of prejudice running through my decisions, because of my environment and bringing up. We are told that these powers will be put into the hands of an unbiased Committee who will weigh up everything properly and listen to all the arguments, but I would point out that when we come into office we shall have the right to do the same. I do not want that power to be vested in anyone; I want free and full discussion, on the Floor of the House of Commons, of everything that may happen. I believe in the good will of Parliamentary government, and for that reason, and because of the great fundamental issue which underlies this Clause, I take the strongest possible exception to the House of Commons passing it."Wheat and meat are in a Schedule of free imports into this country. This Clause of the Finance Bill proposes to make it possible for the Advisory Committee to take those two articles out of that Free List." —[OFFICIAL REPORT, 23rd May, 1932; col. 161, Vol. 266.]
4.0 p.m.
When the Chancellor of the Exchequer introduced the Treasury Order under the Import Duties Act, he stated to the House that that Order was the natural, logical, and expected sequence of the Import Duties Act. I scarcely think that even the right hon. Gentleman would contend that Clause 6 of the present Finance Bill was either the natural or the logical or the expected sequence of the Import Duties Act. It might well be said that the House might have expected to see such a Clause in the Bill, having regard to the speeches made in the House by tine Chancellor of the Exchequer himself in which he indicated his intention when the time came to introduce such a Clause. But the mere ipse dixit of the Chancellor of the Exchequer as to what his future intentions may be in no way binds the House in exercising its judgment as to what provisions at shall or shall not insert in an Act of Parliament, and there never was a more deliberate act of the Legislature than that by which the First Schedule of the Import Duties Act was constituted. I would recall to the minds of hon. Members what actually took place. In introducing the Financial Resolution upon which the Import Duties Bill was based, the Chancellor of the Exchequer stated that the Free List would be a short and small list, but a little later, when, after the passing of the Financial Resolution, the Bill was actually presented to the House, the list had been considerably extended, and extended on the initiative of, and presumably after due consideration by, His Majesty's Government. Later still, in the course of the Debate in Committee of this House, not only did the Chancellor of the Exchequer himself suggest additions to the Free List which appear in the Act, but he accepted a number of Amendments moved by hon. Members sitting on the back benches. It was the deliberate act of the Government by which this Free List was constituted. It was the deliberate act of this Parliament whereby this Free List became an effective part of the Act. What is suggested? Here is an Act of Parliament passed as recently as 29th February of the present year, and now, only a few weeks later, it is proposed to alter it in some of its most vital provisions. For what can be more vital than to give to the Government the power which this Act, as it stands, denies to the Government, namely, the power, upon the recommendation of a committee, it is true, but the power to impose taxes upon wheat in grain, upon raw cotton, upon hides and skins, upon rubber and upon all the other variety of goods set out in the Schedule? From our experience of the Government in issuing the recent Treasury Order upon the recommendation of the Advisory Committee, he would be a bold man who would say that the Government would do other than show themselves the obedient, docile and obsequious servant of the Advisory Committee. Although it may be the hand of the Government whereby the Order is made, it is the voice and the discretion of the Advisory Committee which, in fact and in truth, determine whether or not it shall be made. It is, of course, true that the ultimate and executive responsibility rests upon His Majesty's Government.
If this Committee had accepted yesterday the Amendment proposed by my hon. and learned Friend the Member for East Bristol (Sir S. Cripps) that no Order under this Clause should be effective until it had first been approved by the Commons House of Parliament, then, I think, some of the objections, at least, to the Clause as at appears in the Bill would have been removed. But the Government have refused all Amendments. They have shown that it is their intention to meet the House of Commons with an accomplished fact when any recommendation comes to be discussed dealing with the Free List. It will be within the recollection of the Committee that, as regards certain items on the Free List, the Government have already taken action alternative to including these articles on the Dutiable List. As regards wheat, for instance, the Government have introduced their Wheat Quota Bill which is already in statutory form. As regards meat, the Chancellor of the Exchequer himself challenged a Division of supporters of the Government who were desirous that meat should be put upon the Dutiable List, and the right hon. Gentleman put on his Whips and took his followers into the Lobby for the very purpose of resisting a tax on meat, though it is true the Chancellor indicated in the Debate that he was prepared at a later date to make it possible to remove meat from the Free List. There, again, I say the act of the House speaks louder than any words of the Chancellor of the Exchequer. There are certain items, like tea, which are to be dealt with on an entirely different basis by procedure outside the Import Duties Act altogether, and, indeed, we have seen that by the inclusion of duties upon tea in the Finance Bill now before the Committee. It has already been stressed, and I shall not stress it again; I merely mention that wheat and meat were the subjects of a decisive pledge made in the country, and repeated more than once in this House by a leading Member of the Government, the President of the Board of Trade, when he said that he would be no supporter of a tax upon meat or wheat. He is now showing that he is willing to consider such a tax, But a. difficulty arises out of the proposal now before the Committee to which, I think, far too little attention has yet been paid. Indeed, I need go no further than quote, what I have often heard quoted with approval by the Lord President of the Council, the phrase of the late Lord Mel-chett, that uncertainty made business impossible. He used rather different words at the time, and they have often been differently quoted, but that was the purport of the words quoted with approval by the Lord President of the Council, now the acting Prime Minister. Yet this Clause imports yet another element of uncertainty into British commercial enterprise. How can boot manufacturers order their hides; how can motor tyre manufacturers consider the giving of orders for rubber; how can manufacturers in Lancashire consider how they shall deal with cotton if, at any moment, without warning, an Order is published without notice and becomes operative the moment of its passing? How can they base their orders or conduct their business with any kind of confidence, certainty or security if they know that they may be put to the greatest difficulty and hardship, and, as has happened more than once, of ruin as a result of duties suddenly imposed? There is nothing more harassing in the conduct of business to the individual merchant or individual producer, or to merchants and producers collectively, than the element of uncertainty—uncertainty which, by this Clause, will be imported into the everyday conduct of business by the action of the Government themselves. For all those reasons, I propose to vote against this Clause.I would like to offer a word or two of opposition to this Clause, but I would hardly have risen had it not been for the speech of the hon. Member for South Croydon (Mr. H. Williams). But before I deal with the observations he made, may I say that I was very interested in the volcanic oration delivered by the hon. Gentleman the Parliamentary Secretary to the Board of Trade last evening. I thought he went out of his way a little to criticise unduly my hon. Friend behind me, because he had really delivered a very forceful and intelligent speech, and I did not think the answer of the hon. Gentleman was good enough in reply to that speech. It was not up to standard even for a Liberal Minister who has turned Tory.
This is a very important Clause, and I want to ask the right hon. Gentleman, if he is going to reply—he does it without any vitriol, if I may say so—will he be good enough to inform the Committee what is actually the relationship between the Government Department and the Advisory Committee? Does the Advisory Committee come to the Treasury and ask the Treasury, "What would you like to have included in the Free List and what would you like to have removed from that list"? Does it do that? If it does not. do that, does the Treasury go to the committee and say, "Look here, this is not to be taken as official; but, unofficially, we want an argument when we go to Ottawa, and we would like you—this is strictly unofficial—to bear in mind that we shall argue there about meat and wheat, and consequently we should like a recommendation from you on those items. We do not suggest what the recommendation should be, but we would like a recommendation." I have sat on advisory committees and on consultative committees belonging to Government Departments, too. I have an idea, therefore, how they operate. While this House hardly ever gets an official declaration of what the Government want, all its advisory committees must have a shrewd idea of what the Government Department expects them to do. I should imagine that this Advisory Committee will not be unlike any other advisory committee. I should imagine that it will never issue a recommendation to the Government unless it is satisfied that its recommendation will be accepted. The three gentlemen on the Advisory Committee would take it as an insult right away if their recommendations were not accepted by the Government and Parliament. Consequently, the proposition is reduced to this point, that the Advisory Committee, in fact, is part and parcel of the Government and merely recommends the policy which the Government desire it to suggest. Let me pass to another aspect. We are afraid of these advisory committees because of the experience of the past. I have been in this House for some years, and I have seen many advisory committees and bodies established with extra-Parliamentary powers. I am glad to see the Postmaster-General here. I was here when we gave the British Broadcasting Corporation all the authority it possesses, and I venture to challenge any Member of this House who was here then —and this advisory committee falls nearly into the same category—that no Member of any party in this House, as far as I remember, ever dreamt then that we were parting for good with the whole of our authority over the British Broadcasting Corporation. If anyone wants to raise an issue of any kind in regard to that corporation to-day we are ruled out of order. I do not say that the work of this Advisory Committee falls exactly into the same category, but if the present Government get their way they will hand to the Advisory Committee all the power which Parliament now possesses over these tariff issues. May I mention another point? I remember, too, the Electricity Control Board being set up. We have had difficulties on the Floor of this House in even criticising the work of that board, because Parliament has washed its hands completely, so we are told, of the work performed by that board. Then there is the case of the Betting Control Board. There are Members who with myself were on the Committee upstairs when we dealt with the Betting Control Board and which we were then informed would be subject to the will of Parliament. True, the Advisory Committee mentioned in this Clause will be subject now to the will of Parliament, but as time goes on I am very much afraid that it will follow the lines of the Betting Control Board. We protest against the work of Parliament being dealt with through outside bodies. The Betting Control Board has on its central authority members nominated by Government Departments. It issues an annual report by way of a Blue Book, but when we want to raise an issue on the operations of that board, we are told that we are out of order. This Government, above all, has developed that tendency. It has done so in relation to the Wheat Commission. We protest against these actions of the Government. Let me say a word with regard to transferring articles from the Free List to the other list, and vice versa. It is said that the Government are very anxious to pass this Clause because it will mean more employment. The work of the Advisory Committee has to take account of the fact that there is unemployment in a given industry and to increase employment right away by arranging these lists. That is the argument of the hon. Member for South Croydon. I have been trying to find out how much its operations have already increased employment. I have tried, for instance, to get from the Parliamentary Secretary the places where the foreign factories are, and I have not yet got them.The hon. Gentleman can only say that if he did not listen or did not read the very complete list that I gave of the geographical situation of these factories.
I have heard that story before. Will the hon. Gentleman stand up here and tell me in which towns and villages these new factories are built and operating in Lancashire?
First of all, I should be immediately ruled out of order, because it has nothing whatever to do with the subject which we are discussing, but I ask the hon. Gentleman to believe that I have already supplied these full particulars to the House of Commons, and immediately upon the conclusion of this Debate I will send him a copy. I will also undertake to give the House of Commons at the earliest opportunity a further list.
It is not sufficient for my purpose to say that there are five new factories in Lancashire, because Lancashire is a very big county. I live in Lancashire and I should like to know the names of the towns and villages and the streets where these factories are situated. If they were actually there, we should have had that detailed information long ago. I have searched in vain for these 50 phantom foreign factories. I have heard of one Belgian chocolate firm which has come to this country. It is employing young girls in the main, and I hope the Minister of Labour will in due course inquire into the conditions of work in that factory. The hon. Gentleman is trying to give a hint to the Chair that I am out of order, but I am dealing with the work of the Advisory Committee in Clause 6, and I am replying to the argument employed by the hon. Gentleman the Member for South Croydon (Mr. H. Williams). I do not like this Clause at all, because in my view it is a back door trick. If the Government wanted to do this, they should have done it long ago in a straightforward manner. They want to go to the electorate and say: "We did not include wheat and meat for tariff purposes. All we did was to leave the issue to the Advisory Committee." That argument may wash in some parts of the country but not in others, and probably it will not go down in Devonport. Let me come to the Free List itself. The bon. Gentleman was very volcanic last evening. I almost thought he was of Celtic origin. He said:
What we are doing apparently by passing this Clause is to give power to the Advisory Committee to recommend to the Government that wheat and meat should be taxed. Will the hon. Gentleman stand up at that Box and say why wheat and meat should be taxed, because they will be taxed, otherwise why give the Advisory Committee power to recommend it? Were it not for the desire of the Government to tax these two commodities, they would not give such power to the Advisory Committee. The hon. Gentleman may be better educated than we are, but it does not follow that we understand less the tricks of the Government. He was very critical last evening of my hon. Friend behind me about some book that he had written. All the books that I have written are in Welsh, so he cannot criticise me. But he cannot throw it at me that I have ever argued in favour of tariffs under any condition whatever. I am a Free Trader because I am an inter- nationalist. I cannot understand for the life of me how men can reconcile the building of tariff walls with support of the League of Nations."My hon. Friend said that there may be a case for the taxation of meat and wheat, but we have not heard it. That case has been presented by my hon. Friend. But when the Government desire to present a case, if the occasion should arise for the taxation of wheat and meat, they will come hero to this Box and advance their arguments."— [OFFICIAL REPORT, 23rd May, 1932; cols. 155–6, Vol. 266.]
rose—
I will come back from Geneva, and I will return to this list, because it is very interesting. Why does not the hon. Gentleman inform us that the Advisory Committee can recommend transferring from the Free List every one of the items in it? Let me see what the Free List is. Is the committee to recommend anything with regard to gold and silver bullion? France and America have most of that, I should imagine, and I suppose, whatever recommendation the Advisory Committee may make, the gold and silver will not come here, anyhow. Are live quadruped animals to be removed from the Free List? We have recently had some discussion about a German circus coming here. Is the Advisory Committee to take note of live quadruped animals in relation to the German circus? That is a proper question to ask in the Mother of Parliaments. Then there is raw cotton. I take it the Advisory Committee would never recommend that raw cotton should not always be free to be imported from America and Egypt, but they may remove even that from the Free List. These gentlemen who are picked for this special job are nearly all Londoners. Lancashire is to them almost a foreign country.
Does not the hon. Gentleman realise, that Sir Sydney-Chapman was a professor of economics at the Manchester University?
I thought the right hon. and gallant Gentleman knew better than that. To say that a man who has been for a few years a professor of economics at Manchester is a Lancashire man passes my comprehension. I have lived in Manchester for 25 years, but that does not make me an Englishman. The right hon. Gentleman has lived in England for years, but that does not make him an Englishman, no matter how he tries. Let me come back to the Free List once again. The Parliamentary Secretary last evening said further:
What picture did he himself paint to the electors? He did not tell the electorate at the last election that the food of the people would be taxed, and hon. Members opposite will find out in due course that the people cannot be diddled like that. They cannot be told at the election that their food will not be taxed and then in a few months the very man who made statements of that kind pass legislation to tax food in this manner. I must protest vehemently against the transfer of this Parliamentary power to a committee of any kind. Hon. Members will have noticed in the last 10 or 15 years the general tendency of Governments to transfer large powers to outside bodies. I believe in political democracy and everything that comes with it. Because I want Parliament to retain the power to arrive at decisions of its own free will, I shall oppose the Clause and we on this side will vole against it in the Lobby to-night."That is not the case that is being advanced from this side to-night, and it is not fair, it is not an illustration of political probity, to paint for the electorate the picture that has been painted to-night."— [OFFICIAL REPORT, 23rd May, 1932; col. 156, Vol. 266.]
4.30 p.m.
I hope it will be possible for the Committee to come to an early decision on this Clause as we have had the issues very thoroughly thrashed out for two days. The point is not one of very great importance. It is only a point of procedure. The Clause does not tax any article whatever. The Import Duties Act specifically states that any Order made by the Treasury after a recommendation by the Committee must be confirmed by this House. If ever the Stuart Kings had said, "Any of our actions must be confirmed by an affirmative poll of the House of Commons or it will become null and void in 28 days," the great Parliamentary hero of the civil war would have said, "Nunc dimittis." It is exaggerating the position entirely to complain that this procedure is derogating from the power of the House of Commons. The authority of the House of Commons remains unchanged by this. The only question is: Should the House of Commons control every detail of the new policy upon which it is embarking? We contend that it is neither necessary nor desirable for the House of Commons to retain control of every detail. First of all, because owing to the accumulation of small administrative acts which the House would have to carry through, the Debate upon each of those acts would be a graver inroad upon the powers of the House of Commons than anything proposed under this Bill, and, secondly, because we hold that it is desirable that inquiries should take place into the advisability or otherwise of a duty which we think can best be carried out under the aegis of a body such as the Advisory Committee. The hon. Member for South West Bethnal Green (Sir P. Harris) suggested that there was something secret about the procedure. Tea was on the Free List, yet a tax is to be imposed on tea with the assent, and by the vote, of the hon. Member for South West Bethnal Green. This article has been removed from the Free List. How was it removed from the Free List? It was removed without any preliminary inquiry such as he suggests, and without notice such as he suggests. No notice at all was given, and the Resolution was brought into the House and became effective there and then. It had to be so, because when we are dealing with Customs tariffs, as my hon. Friend the Parliamentary Secretary to the Board of Trade explained, it is impossible to allow the lapse of many days during the whole of which forestalling will take place. Customs procedure must go along the road which other countries have adopted for Customs procedure, and it is that procedure which we desire to secure in this case. The procedure of inquiry which is laid down here is the necessary procedure before any recommendation can be made.
That is what leads me to the second point. Why not proceed by means of the Finance Bill? That was the argument brought forward by hon. Members opposite. Surely, especially when you are in the initial stages of setting up a new experiment, which no one can deny the country and the House of Commons have sanctioned by very large majorities, it is desirable to allow flexibility, and this is procedure which will allow much more flexibility than would be possible in the long and complex procedure of the Finance Bill. The taxation of wheat and meat does not arise on this Clause. As the Parliamentary Secretary to the Board of Trade said, if and when the Government desire to make a case for such action they will have to come here and stand at this Box and make out their ease, and have it either confirmed or rejected by Resolution of the House. That will be the time when it will be reasonable for discussion to take place, and for arguments for and against to be thrashed out and decided upon by the House.Does not the right hon. Gentleman admit that before the House may have an opportunity of discussing an Order such an Order may already be in operation?
Surely an Order of a grave and far-reaching character would not be embarked upon by any Government unless they thought that they had the support of the House of Commons behind them. The same sort of thing takes place when Budget Resolutions are introduced. They are operative from the moment they are introduced, but, of course, it is quite possible that they may subsequently be reversed by the House of Commons. In such a case, the reversal of a, decision would be taken as the gravest possible censure upon the Government, and the Government would almost be compelled to resign. If the procedure of the House of Commons can allow for the imposition of a tax which often runs for weeks, and indeed for months, before it is finally sanctioned by the vote of the House of Commons, surely it is not unreasonable in this case that we should take a power which is not likely to be unreasonably or rashly exercised to put such recommendations provisionally into effect.
Is the right hon. and gallant Gentleman suggesting that anybody other than the House of Commons has power to pass a Budget Resolution?
No, indeed not. Nobody other than the House of Commons has the power to pass a Resolution, nor has the Advisory Committee power to pass a Resolution.
The right hon. Gentleman knows that the Treasury has the power to make an Order without any reference to the House of Commons whatever, and that it can remain in force for 28 days before the House sees it.
Surely the hon. and learned Gentleman is hunting a mare's nest. The Treasury, which is the Chancellor of the Exchequer, has power to make such an Order, and has power to introduce such a Resolution. It has not power to pass such a Resolution in either case.
I am sure that the right hon. and gallant Gentleman does not wish to confuse the Committee. An Order made by the Chancellor of the Exchequer has immediate force. Customs duties can immediately be collected upon it. This House need not know of it. It need not come before the House until the expiration of 28 Parliamentary days. No Financial Resolution for the purposes of the Budget can have any force until it has passed through this House.
The hon. and learned Member is, I think, a little inaccurate in his suggestion. A Financial Resolution can and does have its effect immediately.—[Interruption.] It has to have its Committee stage and its Report stage. As everybody knows, the Budget Resolutions have effect the moment they are introduced, and they do not have their second stage finally validating them, the Report stage, until days afterwards.
The House can immediately negative a Financial Resolution, if it does not wish to accept it, directly it is laid on the Table and before it comes into force. It may allow it to go through and then debate it on the subsequent stages, but it has power to negative it at once.
The House has the power to negative it at once under what I was explaining to the Committee, namely, the procedure of the Finance Bill. I was pointing out to the Committee that the procedure of the Finance Bill is appropriate to the annual finances of the year. It is not, I was contending, appropriate to all the initial stages of bringing in experiments such as we are trying, but in both of those cases there is the authority of the House, in the one ease of that day, and in the other case of not more than 28 Parliamentary days. [Interruption.] The hon. and learned Member really is straining a point, a ridiculous point, in suggesting that the Government would bring in some far-reaching change—because it is a far-reaching change of which he has complained—which could only last for 28 days whereupon it would be overthrown by the House of Commons.
He means Parliamentary days.
The hon. Member for South-West Bethnal Green does not do himself full justice. We know that he can advance and continue Parliamentary debate with dignity, but to suggest that it would satisfy the Government to bring in some far-reaching change to be valid only for 28 Parliamentary days—
The right hon. and gallant Gentleman knows quite well that the order can come into operation when the House is in recess.
Really the hon. Baronet does himself greater and greater injustice every time. I am making a broad, general contention. [Interruption.] Let us take it even at the worst— from July to November. Does he suggest that any Government would bring in some great change—
We hope not.
Let me reassure the hon. Member. I am sure that he will be reassured that no Government would desire to bring in between July and November a change which might be reversed. No Government would think of doing such a thing.
This Government might.
I do not wish to follow that argument further. I have made a broad, general contention by which I stand. The first effort of the Government would be to make reasonably sure that they would have obtained Parliamentary sanction for the affirmative Resolution which by statute they would need to lay on the Table of the House and get passed within 28 days of Parlia- ment meeting again. In those circumstances, I do not think that the powers of the House of Commons are being interfered with. A further point brought up by the hon. and learned Member for East Bristol (Sir S. Cripps) last night was that such an order of removal from the Free List might be smuggled in with a great number of other orders. Let me assure him that the Government have no such intention. I hope he will take the assurance from me that if we desired to bring in any order removing anything from the Free List we should do it by means of Resolution which would be considered by the House of Commons.
Is the right hon. and gallant Gentleman prepared to put that into the Bill?
I see no necessity whatever for putting it into the Bill, but I ask the hon. and learned Member for East Bristol whether I am likely to give a pledge which I am likely to shirk.
I accept, of course, everything the right hon. and gallant Gentleman says, and always will, but he may have a successor.
I can go no further than myself. I am speaking for myself and also for the Government in this matter. Although the Government might pass, and I might have a successor, the House would have other things to think about than whether in fact some small point of Parliamentary procedure was being literally fulfilled or not. Have we been unjust to the House of Commons in spirit? I think that it is clear that we have not been unjust to the House of Commons. That accusation was made oddly enough last night by the hon. Member for Ebbw Vale (Mr. A. Bevan). I went to some trouble to secure a copy of that most excellent book on the subject. It is an exposition of the emergency policy put forward by Sir Oswald Mosley and 16 other Labour Members of Parliament. It was drafted by Aneurin Bevan, M.P., and three others. It runs in very close parallel to some of the proposals which we have brought forward. [Interruption.] Surely, the hon. Member likes to claim paternity for that policy.
indicated dissent.
The hon. Member is hard to satisfy. He drafts it, he prints it and circulates it at considerable expense, he puts his name on the outside of it, and when I suggest that we are willing to give him some credit for this great revolutionary thought that has taken place in recent months he hurries to disclaim it. Why is he so afraid of his association with his hon. Friend the ex-Member for Smethwick? It seems to me unfair to desert the hon. Baronet in his adversity. The hon. Member associated himself so willingly with him in the days of his prosperity. The paragraphs of the "Machine of Government" are applicable not merely in the situation in which we then were, but they are applicable in other conditions as well. The hon. Member claimed last night that we were making inroads upon democratic control and the practice of democracy. Let me quote his own statement from the "Machine of Government." On page 46 of his own programme are the following words:
Therefore, it seems to me that it does not lie in the mouth of the hon. Member to reproach us for our steps on this occasion. Let me make an appeal to the Committee. We have still far to go. We have many issues of great importance to debate, and I hope that, after the very full discussion we have had to-day and last night, it will be possible for the Committee now to come to a decision."This is in fact the only way in which the reality of democracy can be saved."?
The right hon. and gallant Gentleman has done me some slight disservice. He suggests that it is not quite fair on my part to desert my Noble Friend in his present adversity. [HON. MEMBERS: "Not noble!"] I beg pardon, my hon. Friend who was once a Member of this House. I have been accused of deserting my hon. Friend in circumstances of adversity. I would remind the right hon. and gallant Gentleman that my hon. Friend's adversity started when he deserted me. He was quite prosperous until then, but afterwards his adversity came. The central feature of this Debate is that the Front Bench cannot agree upon its defence. Last night the Parliamentary Secretary to the Board of Trade justified the procedure that is being taken on the ground that it was necessitated by national emergency. This afternoon the Financial Secretary has been attempting for half-an-hour to prove that no important changes of Parliamentary procedure have been brought about. Precisely which case are they putting forward? Are they justifying their present policy on the ground that national necessities require that exceptional measures should be taken, or are they stating that those measures are not exceptional? We have had the two points of view put with great ability last night and this afternoon.
The contention that we advance is that we are not only discussing machinery but actually discussing food taxes. The right hon. Gentleman was not fair to himself. He obscured the real character of the Debate when he argued that we are only discussing machinery. Is it not clear that, if the Government are given power to recommend to the Advisory Committee that articles be taken off the Free List and if the Advisory Committee recommends certain taxation, the Government will immediately proceed to tax those articles? Is that not so? It has already been made clear in the Debate that the Government would never ask for these powers unless they wanted food taxes. Consequently, we are, in fact, discussing the taxation of food, but we are asked to discuss it in circumstances in which the subject cannot be adequately considered. I was, by the way, astounded by the speech of the hon. Member for South Croydon (Mr. H. Williams). The Advisory Committee has been appointed because it is not subject to Parliamentary nepotism, because it will not be subject to the log-rolling of the House of Commons. In other words, democracy is not to be protected from my class but from the class of the right hon. Gentleman. It is to be protected from the persons who use the House of Commons for the purpose of getting advantages for their own peculiar interests. The Advisory Committee has been appointed in order that Parliament may be exempted from the horrible spectacle of hon. Members getting up, as was the case in the first two months of this Parliament, and saying: "Please give me higher prices for my manufactured articles." The committee has been set up to exempt us from that odious spectacle. It is a case not of rolling a log but of rolling a forest. It is not a case of asking that extra taxation should be imposed upon one article here or another article there, but that taxation should be imposed in a lump. In that case it will not be nepotism, it will not be corruption. If we ask for the taxation of everything in a block it will not be corruption, but if we ask Parliament to tax each article in turn, it is corruption. The whole purpose of the machinery is to try-to get taxation upon imports into this country in a manner which causes the least political embarrassment to the Government. Whatever the Advisory Committee recommends the Government will adopt. We are now being asked to tax food, because if the Advisory Committee recommends the taxation of food the Government must adopt the recommendation. It cannot reject it. [HON. MEM-BEES:" Option!"] Option! The Advisory Committee was appointed because it is an impartial, impersonal, dispassionate body. It has power to recommend taxation upon foodstuffs. That matter has been referred to it because of its constitution, in order to get rid of political complications. If the Government refuse to carry out the recommendations of this judicious body it will be bringing the matter back into the sphere of log rolling and corruption; into the very sphere from which the Government have attempted to remove these matters. It will mean that the judge is free to give the verdict you ask him to give, but you are not to accept the judge's verdict. To-day, we are not merely being asked to discuss the machinery of taxation but fiscal policy itself; the taxation of foodstuff. I suggest that the right hon. Gentleman should take up one position or the other. Is he defending the position because it is democratic? His speech to-day was a remarkable piece of duplicity. He knows that there is all the difference in the world between legislation by Order in Council and legislation in the ordinary manner. What would happen if taxation was going to be imposed in the ordinary way and in the normal Finance Bill? Each separate proposal to tax each separate article would have to be brought in in the form of a separate Resolution. Each Resolution would be subject to amend- ment in the House of Commons, and when the Resolutions had been carried they would be embodied in the Finance Bill, which would have to go through the same procedure. For three or four months the public would be educated in the actual nature of the doings of Parliament. It is of the essence of democracy that that should be so. Is there any person in this House who is a student of history and who has regard for the events that are happening in the world to-day who will say that democracy is the only way and the permanent way in which things are going to be changed in this country. The issue before us in this nation is whether the changes in our social structure that must take place are going to be accomplished by peaceful Parliamentary measures or in any other way. I agree with the Parliamentary Secretary to the Board of Trade on this point. I am not ultimately philosophically tied to Parliamentary methods. I want to give them a fair chance, but Parliamentary methods will not be able to survive this sort of chicanery. The right hon. Gentleman argued that this House has received a mandate from the country to do the things that the Government are doing to-day. He knows that on the one occasion when the country was asked whether it was prepared to send a Parliamentary majority here to tax food it turned that party out. At the last election it was asked no such thing, and it is improper, it is flying in the face of political reality for the right hon. Gentleman to say that he and his friends have a mandate to carry out what they are proposing to carry out.The hon. Member knows perfectly well that the National Government got a free hand. A free hand, if it means anything, means that they can take all the measures that are appropriate.
The hon. Member says that the Government have a. free hand to carry out whatever proposals they deem to be in the interests of the country. Yes, with certain important modifications and reservations. The Lord Privy Seal said over the wireless that the Prime Minister's message to the nation and the appeal of the National Government could not in any circumstances be construed as giving a mandate for Protection. Did he not say that? Is that not true? The whole implication of the election was that in no circumstances would the policy of the National Government reduce the purchasing power of the pound. That was the whole case for the election. It was to save the value of the pound. That was the whole purpose of it. The purpose of Protection is to reduce the purchasing power of the working-class pound. [HON. MEMBEES: "No!"] Of course it is. It is true that the Parliamentary Secretary said that there has been no rise in the cost of living. He made that point last night, but no one knows better than he that it is the failure of the price level to rise quick enough that is causing him and his friends such intense embarrassment. Unless the price level does rise before long he knows that his Government will come to a speedy end. He claimed credit for the Government for the very thing that the Government is trying to avoid.
The hon. Member must not go on with this argument unless he can relate it to the Clause we are now discussing.
5.0 p.m.
I should have thought that an argument addressed to the question of the Clause standing part was appropriate. I am dealing with the speech delivered by the Parliamentary Secretary to the Board of Trade on an Amendment to the Clause to exclude wheat and meat, which are left to the Advisory Committee. Surely I am entitled to argue that it is the intention of the Government to secure an increase in the price of wheat and meat. The Parliamentary Secretary really must not treat the House of Commons in the way he did. He must act more upon the assumption that we know what is in the mind of the Government sometimes. The Chancellor of the Exchequer has deplored the fact that the price level continues to fall; but if the price level does go up then it is only the wholesale price level which will go up. How the wholesale price level is to go up with advantage unless the retail price level follows no one has yet attempted to explain. If the wholesale price level goes up and the retail price level does not follow then the increase in the wholesale price level will be at the expense of the distributive trades, and that means that at the moment they are making excessive profits. The Government has the machinery to deal with that.
If this fiscal revolution is to be brought about we want the widest possible opportunities for Parliamentary discussion. We do not want it to be done in a clandestine manner. I suggest that the purpose of this machinery is not to try and get import duties on food without log-rolling and corruption but that its real purpose is to prevent debate in this House. If we had three or four months debate in this House on amendments which could be put down to one duty after another the embarrassment of the Government would be acute. We might have a repetition of the scene which was witnessed the other night between the President of the Board of Trade and the Home Secretary. We might indeed elicit a few observations from the silent sage in the other place. All these things would cause the Government intense political embarrassment. The purpose of this machinery is not to ask Parliament to set aside its cumbrous method of doing things because they must be done quickly but to save the Government embarrassment. The suggestion we make is that if society is going to be saved, if economic life is to be reconstructed, it can be reconstructed effectively only if Parliament willingly and after proper consultation of the people surrenders temporarily some of its methods of legislation. It is not in the service of a policy of that kind that this machinery is suggested but in order to save the Government political embarrassment, to fill up the chinks in the National Government front and prevent the country realising the real character of the Government it has selected. I was reading a newspaper this morning, a Conservative newspaper—[An HON. MEMBER: The "Sunday Express!"]. The "Sunday Express" is the John the Baptist of the Conservative party. What the "Sunday Express" says to-day the Conservative party has to say the following dayThe hon. Member must please come back to the subject under discussion.
The point I was making is that certain Conservative newspapers have been chiding hon. Members on this side because we do not fasten public attention upon the very matter which we are now discussing. They say that the National Government are asking the House of Commons to do an unprecedented thing; that they are asking that the power for initiating taxation upon foodstuffs shall be taken from the House of Commons and given to an outside body. They say that this is an unprecedented departure in the history of the British House of Commons and are surprised that the House of Commons has not considered all the implications of this departure. We are now attempting to point out some of the implications. One of them is this. There is arising in this country, as in other countries, a deep feeling that democratic and Parliamentary institutions are not good vehicles for the expression of progressive views. That feeling is growing in the country. Nothing will contribute more to an extension of that feeling than the sort of procedure we are passing to-day.
At no stage of these discussions, and this is the vital point, will the House of Commons be able to discuss food taxes. The actual content is obscured behind the form; the actual nature of the taxation is concealed behind the machinery. The Financial Secretary has told us that we are not discussing food taxes but machinery. The Advisory Committee meets, the House of Commons goes into recess. The Advisory Committee imposes taxes on foodstuffs. The House of Commons meets and the Order is placed before us for our confirmation. We cannot discuss food taxes nor can we move Amendments to the Order. We have to reject it or accept it, holus bolus. Will the Government defend the food taxes? What they will say will be that this is the machinery which Parliament has devised for this purpose and that to turn down the recommendations of the Advisory Committee would be to impute the honesty, the integrity and the intelligence of the Committee which has recommended the taxes. That will be the defence of the Front Bench. Therefore, at no single point and at no stage will the House of Commons have an opportunity of adequately discussing food taxation. This is an exploitation of machinery by the Government to carry out a policy which is deeply disliked and repugnant to the mass of the people of the country. It is the fate of machinery that whenever it gets out of touch with realities it is destroyed. The Government believe that by this device, by this clandestine method, they will be able to sneak a fiscal revolution and escape the consequences. They will never do so, because ultimately the people will find them out. We want to open the eyes of the people to the situation and we ask the House of Commons to reject the Clause.Some hon. Members seem to regard this Clause as a somewhat trivial matter, but I cannot look upon it in that light. It seems to me that the Clause gives those who care for democracy cause for much apprehension. It may be the swan song of democracy. The hon. Member for South Croydon (Mr. H. Williams) said that these powers should be given to the Advisory Committee because it would prevent all sorts of lobbying and corruption. I agree that we do not want lobbying and corruption, but it seems to me it is much the same thing as a man who has a watch dog to keep away thieves. He finds that the watch dog is rather troublesome, he barks at the slightest sound, he cannot stand it, it makes his life rather miserable. So he decides that the only thing to do is to get rid of the watch dog; then the thieves will be able to break in. Our present Parliamentary system is no doubt very troublesome when you come to consider tariffs, therefore do away with Parliament—that is what it comes to—and Parliamentary control. This is the one country which at the present time can be regarded as a democratic country. In every other part of the world democracy has been despised. Many people would like to see something of the kind happen in this country. "We do not want Parliament," they say. "It is a mere talking shop. We want things done." That was said in Italy and is being said in Germany, and in Japan too.
This Clause restricts to a very great extent the right of free discussion in Parliament and the right of the people over taxation. The people should know exactly what is being attempted. It seems to me that the Clause is vital. Strangely enough, it is associated with the necessities of the people's life, with their meat and wheat, their food. The Advisory Committee is to have power over the people's food. What we have to ask ourselves is: Shall that power be exercised by a democratic assembly, that is by this House, or by a Mussolini, a tribunal, this triumvirate? In a matter so vital we ought to remember that by surrendering this power we are possibly involving this country in far more serious trouble than has ever been imagined. I still utterly oppose the policy of Protection. I do not see how we can prevent bribery and corruption under Protection, but I prefer even bribery and corruption to tyranny.This Clause is of fundamental importance, and the policy embodied in it is in direct opposition to the views of many Liberals inside and outside the Government. In addition, it is opposed to the views of many Members of this House, of all three parties, who, at the last election, gave a most binding pledge that they would not support anything in the nature of taxation of food. It is true that no food taxes are to be imposed by the Measure that we are discussing, but the Bill does make it very much easier for food taxes to be imposed. The position of the Advisory Committee is a very important one indeed. We are told that Members of Parliament must not go near it. One quite appreciates the reason for that. Members of Parliament are to be kept away. Presumably Members of the Government are kept away, although I understand that the Chancellor of the Exchequer has gone so far as to meet the three Members of the Advisory Committee, and no doubt an exchange of views took place as to how they regarded the question of putting on tariffs in different ways.
My complaint is that there has been no guidance given to this Committee of Three. They have not been told on what lines they are to proceed, whether by high Protection or low Protection or moderate Protection. There has been no rule laid down for them to follow. The Government ought to have stated quite clearly to the Advisory Committee what are the views of the majority in this House. It is not my view, but the majority in this House have a certain view, and the Advisory Committee ought to have been told that they were to carry out their duties along these lines. There is nothing to prevent the Advisory Committee to-morrow morning making up their minds, in the light of what they think is right and wise, or making up their minds when this Bill becomes law, that it is desirable forthwith to put heavy duties on meat and wheat. There is no reason at all why they should not do it on their own account. It is true that before the proposal can become law the Treasury would have to agree. But what a weapon we are putting into the hands of those Members of this House, I believe only a minority in this House, who desire to see these duties put on, if they are able to say that although the Government are against it the Advisory Committee have recommended it! It will be very difficult indeed for the Government of the day to resist a proposal which comes forward in that way. I hold that the House of Commons is entitled, during these Debates, to have a statement from the Government as to the exact object of moving this Clause. Is it because they want to have their hands free for Ottawa? It may be that they are right and wise in desiring that. If that is their policy, we ought to be told clearly, but no information of any kind has so far been given to us. Is it the policy of the Government that they want to be free at Ottawa to bargain for duties on meat find wheat in exchange for access to the markets of the Dominions of our manufactured article? That probably is so. But the Government ought to tell us frankly. Personally I do not think that they are going to get much out of Ottawa on those lines; I do not believe that the Dominions are going to allow us any reasonable amount of access, underneath their tariff barriers, for competing in industrial affairs. I do not think that Ottawa is going to lead to any great success along those lines as a result of anything that we are doing to-day. There is a more serious aspect of this matter. It seems to me, first of all, that if a policy of the kind I have just alluded to were carried out, and if you had an agreement at Ottawa on the lines of building up the British Empire as an independent economic unit against the rest of the world, it would be a very bad day's work for the peace and the industry of the world.I would remind the hon. Member that we are now discussing Clause 6.
I appreciate the fact that I was stretching the rule rather far, but I was alluding to what seemed to me to be the inevitable outcome of the passing of this Clause. I will pass on. The real importance of what we are discussing is this: As a result of passing this Clause and making possible the development that will be possible, you may get a break-up of the present Government, and in addition a dissolution of Parliament. It has to be remembered that the prerogative of advising a Dissolution is not that of the Cabinet, but of the Prime Minister. I would ask hon. Members to appreciate that they are not necessarily here for four years, but that as a result of the powers that they are putting into the hands of the Government and the Advisory Committee under this Clause they might get a break-up of the Government and a premature dissolution of Parliament. I do not suppose there are many people in this House or in the country who desire to see a development of that kind. [interruption.] I am sure hon. Members opposite do not desire it.
The connection between the advisability or otherwise of a General Election, and this Clause, is too remote.
Then I will leave that point. Let me come to what is raised in Sub-section (2) of this Clause. I would ask the right hon. Gentleman in charge of the Bill if he can give any information regarding the words:
What is the precise object of introducing the words "on the recommendation of the said Committee"? Is there not a danger that that might prevent us, supposing that the Government were successful, as I hope they will be, in carrying through a bi-lateral or multilateral treaty with other countries for a reduction of tariffs, which is the declared policy of the Government$—"The Treasury may, on the recommendation of the said Committee, and after consultation with the appropriate Department."
On a point of Order. Surely no discussion of Imperial Preference is permissible here? The Advisory Committee can only take into account production in the United Kingdom, and not in the Empire, in making Orders.
I must ask the hon. Member to keep to the Clause that is under discussion.
I was making no reference whatever to Imperial Preference. I was asking whether there was not a danger in the words quoted that we might have some difficulty in carrying out successful bargaining for a multi-lateral reduction of tariffs with other countries. It might be necessary to go to the Advisory Committee and to ask for their permission, or to get a recommendation from them before a reduction of tariffs in such circumstances could take place. I ask the Minister to be good enough to consider that point and to give the Committee some assurance that these words will not interfere in any way with an event of that kind. Would the right hon. Gentleman also tell us what addition to the staff of the Customs and Excise Department is likely as a result of the passing of this Clause? The Government have already appointed nearly 1,300 people to the Customs and Excise Department. Will this Clause mean the appointment of many more? I would like to hear him say, though I do not expect it, that the Government have decided not to proceed with the Clause, that they have decided to bang, bolt and bar the door—to use the historic words of the right hon. Gentleman the Member for Epping (Mr. Churchill) in 1906—on the taxation of the food of the people of this country, and that the Dominions are to be told at Ottawa that upon those lines there is nothing doing.
I oppose as strenuously as I can the passing of this Clause. I would draw the attention of hon. Members opposite to the discussions which took place last November on the Import Duties Act. We were told by the Prime Minister, when we were proclaiming that that was the thin end of the wedge of food taxation, that no such purpose was intended by the Bill, and that the Government had no intention of taxing food. If that is the true position why give the Commissioners an opportunity of putting a tax on meat and wheat? Nothing has been said from the Government Benches to give the slightest proof that during the General Election any Members opposite advocated the taxation of foodstuffs. We fear that in giving this authority to the Advisory Committee taxes may be put both on meat and wheat before this House has an opportunity of considering the matter. Moreover, there is a very important general principle involved regarding Parliamentary procedure. Surely this House has the right to an opportunity for discussing matters of such importance before the Advisory Committee has the power or the privilege of taxing the people's food.
There has been no time in the history of Britain when distress, low wages, and unemployment were greater. We cannot accept the view that the country's financial position at the moment is such that there is any need to raise revenue by the taxation of the people's staple food. In the last Bill that we passed we dealt with luxuries. The Government claimed that they had no intention of going any further. I do not know what the Prime Minister thinks. It has been stated that he may call for the dissolution of Parliament, owing to the possibility of food taxation being adopted in his absence. I imagine that he will feel some surprise, after the statement that he made not only during the General Election but in this House during the passing of the Abnormal Importations Act. We were then led to believe that that would be the last inch that the Government would take in the direction of taxing food. 5.30 p.m. We have been told that the members of the Advisory Committee are impartial. Who are they? One of them is deeply interested in financial and industrial affairs, and many of the statements that he has made, both political and industrial, have given no indication that he is any more impartial than Members of this House. I am not so certain that log-rolling is not already taking place in many instances. The danger of it is there, just as if this House had to deal with the matter. Constituencies have sent their Members here to express themselves on vital matters of this description, but those Members are to be robbed of that privilege. There is the possibility of food taxation, to an even greater extent than at present, being imposed on the poorest people without the House of Commons having a say in the matter. One hon. Member opposite said that he and his colleagues were sent here with a free hand. That may be true but they were not sent here with free feet to kick the people—and that is what it means if this power is to be put into the hands of the Advisory Committee. We have no confidence that the Advisory Committee will carry out the wishes of the democracy of this country and we strenuously oppose this Clause, first on the ground that it takes away from Parliament a privilege and a right which Parliament has long enjoyed, and, secondly, because we are totally against the taxation of food.I should like to make some comments on certain of the observations which have been made by hon. Members opposite in the course of this discussion. The hon. Member for Ebbw Vale (Mr. A. Bevan) suggested that this Clause represented an effort on the part of the Government to set up rather abstruse machinery and, in that way, to prevent the people seeing the real issue and realising that food taxes were being introduced. He said that that course would stifle discussion on the introduction of food taxes. Personally I wish it would but it dons not seem to have done so this afternoon and I see no reason why it should do so on future occasions. No question seems to come up for discussion without the subject of food taxes being introduced.
The hon. Member suggested that we were sneaking this proposal through because we had not a mandate from the people for it. The Opposition cannot have it both ways. During the election the Liberal rag in my constituency, which is an industrial constituency, told us that the election was being fought on the issue of the breakfast-table of the people. The "Daily Herald" published that statement every day of the election and the "Manchester Guardian" represented by a distinguished gentleman opposite did the same. How can the Opposition come forward now, having been beaten and disgraced at the election and say that the issue of the election was nothing of the sort? [An HON. MEMBER: "What did you say about it?"] I said exactly the same as I am saying to-day. I told the people that I "off my own bat" was not going to say either that I would vote for food taxes or vote against them; that I was going to leave a free hand to the Government, which I believe to be wiser than myself on this matter and if I may say so without discourtesy, wiser than the hon. Mem- ber who interrupts me. I said I was going to leave a free hand to the Government to deal with the matter.Was that the impression which was left on the minds of the electors.
I left no impression on their minds that I was not in any circumstances going to vote for food taxes and there was no such impression on the mind of the hon. Member or else his newspaper was telling lies. However, I beg the pardon of the Committee for this digression. I am becoming almost as irrelevant as the Members of the Opposition. We hear from hon. Members opposite that this proposal is an effort to ruin and stifle democracy. The argument of the Opposition is that by this Clause, we are taking away from Parliament the power to discuss in detail—and probably with considerable irrelevance on the part of certain Members—every one of the hundred and one little points which must crop up in connection with the introduction of a new fiscal policy. But are we doing so? Is not the one thing which ruined democracy in Italy—since Italy has been mentioned—the fact that people there realised that democracy was being rendered nugatory by the endless discussions which took place in public assemblies? Since the Opposition cannot stifle the Government's policy by fair means, their object apparently is to stifle it by perpetual and irrelevant discussion so that at the end of four years they may be in a position to say to the Government, "You have done nothing because we talked so long that you could not do anything."
On a point of Order. Is the hon. Member in order in making those statements?
I think the hon. Member is straying rather far from the subject of discussion.
I am sorry, Sir Dennis. I will try to keep in order. The argument which I was trying to drive home, perhaps irrelevantly, was that this Clause is necessary for the sake of democracy in order that we may have some expedition in carrying on the business of the country. We cannot afford in present circumstances to discuss here every single point in a policy which has been, in advance, agreed to by the House of Commons and any such step as this, in regard to the enforcement of that policy in detail, cannot be regarded as a derogation of the rights of Parliament. Is it any derogation, for instance, of the powers of the directors of a business, if they do not discuss at special board meetings every detail of an agreed policy unless such matters are specially raised? Is not that exactly the position in regard to this Measure?
The Government policy is clear. Innumerable points of detail must arise. The Government view is, "We are certain what the opinion of Members will be on these details. They will support us, and if they do not, it is open to the Opposition to raise these matters for discussion in Parliament in any way they think fit." We have had all this dispute about the 28 Parliamentary days but what is to prevent the Opposition from tabling a Motion of Censure or raising a matter on the Motion for Adjournment at a date earlier than the expiration of the 28 days? This Clause is a real effort on the part of the Government to introduce a policy which will expedite the method of dealing with matters of great urgency and we ought to give them every encouragement in carrying out that policy. If speed is necessary in these times of crisis we ought not to rest content with slow methods of procedure because our whole policy may be ruined while we are discussing minor details.Had it not been for the intervention of the hon. Member for Gorton (Mr. Bailey) I should not have addressed the Committee on this Clause but the hon. Member seems to have failed entirely to appreciate the issue before the Committee. He has described this as a minor matter of detail in connection with some policy upon which the House of Commons has already agreed. I should like to ask him when the House of Commons agreed to the taxation of raw cotton for Lancashire or raw wool for the Bradford industries?
I may have unintentionally expressed myself in such a way as to be misunderstood, but I did not say that the House was discussing a minor matter of policy. What I said was that it was discussing the setting up of machinery by which minor matters of detail could be dealt with.
I fail to appreciate the hon. Member's answer to the question which I have put to him. When did the House of Commons decide that it was advisable to put a tax upon raw cotton or raw wool for the Lancashire and Bradford trades? Apparently the hon. Member is unable to answer. That is one of the many problems which the Committee is now discussing and the hon. Member does not seem yet to have appreciated that that is the point of this discussion. This is probably the most important Clause which the Committee will have to discuss on this Bill and I want to deal with some remarks of the Financial Secretary whose address to the Committee I am afraid I unduly interrupted, although I was not able by those interruptions to make my point quite clear. The right hon. and gallant Gentleman told the Committee that he saw no difference between the procedure here proposed and the ordinary Financial Resolutions introduced in connection with a Budget, But the two procedures are as far apart as the poles.
This Clause introduces an entirely new and revolutionary procedure. It may be that it is an excellent thing, but it is idle to try to get away with the idea that in this Clause we are doing nothing move than Parliament has done in connection with previous Budgets. If the Government had a clear mandate to do these things there might be a great deal to be said for this method. Let me take an analogous case. Suppose that a Labour Government were returned with a clear mandate to nationalise industries. It would be Very convenient in order to decide which industries were to be nationalised and how they were to be nationalised, to turn the whole matter over to a committee of three and remove it from inopportune discussion in the House of Commons which would waste time no doubt, owing to the vast number of vested interests which would be trying to oppose nationalisation. That would be a sound proposition if there was a definite and clear mandate; but it is entirely different when there is no clear mandate and when the issue, as in the case of food taxation, has never been clearly and definitely decided. In the case of a subject of such importance and magnitude, this is a most unfortunate method of procedure. I do not think that the Financial Secretary yet realises which of two positions he wants to take up. This Advisory Committee is either a judicial body or it is not. The right hon. and gallant Gentleman has never told us which view he takes. We have always understood that the Advisory Committee is suggested as a judicial body, that it is proposed to remove this tariff plan, this great scientific experiment out of the ruck of politics, that it is not to be vitiated by logrolling in the House of Commons. If that be so, then the members of the Advisory Committee are acting as judges. Their decision is final. You ask for their decision and if they give it you must carry it out. Otherwise, you will be altering, for some political reason, a judgment given in a judicial manner. If, on the other hand, you say that this is a matter of politics and is not a matter to be considered judicially, then I ask are the Government going to give political instructions to the Advisory Committee? Otherwise, that Committee is going to ruin the Government's political policy. The hon. Member for Barnstaple (Sir B. Peto) last night said this proposal would be an excellent thing for the Ottawa Conference; that the Advisory Committee could remove these articles from the Free List and that it would give an excellent opportunity for bargaining. Why suppose that the Advisory Committee are going to remove these articles from the Free List unless they are told to do so? Supposing they do not. Supposing they say that these things are to remain on the free list, where is the opportunity for bargaining? There is none. You cannot bargain as to wheat and meat because the Advisory Committee have decided that there is not to be a tax on those articles in any event, so that unless some political pressure is to be brought to bear on the Advisory Committee for the purpose of getting them to decide to take these articles off the Free List before the Ottawa Conference, the Government are tying their hands as far as that Conference is concerned by putting this Clause into the Finance Bill. I do not believe that the Government yet realise the position in which they are putting themselves. We, just like everybody else, having a system of tariffs and having the Ottawa Conference, wish it to succeed, but it seems stupid and idle for the Government to bind their hands unless they are going to give instructions to the Advisory Committee. If that is going to be the case, then indeed we are becoming alarmed as to the judicial nature of this body which the Government have set up. We believe that the revolution which is being brought about in this vital matter, which has never yet been decided by the House and never will be decided by the House now, is one which those who are now sitting opposite may live one day to regret.I rise to oppose this Clause, and I would not have done so but for the fact that, although we have had a number of speeches which have endeavoured to explain the reasons for the inclusion of the Clause, I am still at a loss to understand how any Member can consistently hold that this matter can be accepted by the Committee after the specious promises which were given in every direction at the time of the General Election with regard to food taxes. I am bound to say that when I heard the Parliamentary Secretary to the Board of Trade saying that it was not reasonable to suggest that the Government would promulgate an order if it did not represent the will of the House of Commons, I felt myself at a loss to understand why he was afraid to bring any proposal relating to this Free List before the House of Commons if the House would be so ready to accept the exclusion of that item from the Free List. If it is true that the Government are prepared to consider the desires of the House and of the country, it is clear that if they brought each item before the House itself, and the House was satisfied, they would be doing that which was proper in the circumstances.
Then he went on to say, "I think we have here the most watertight and scientific system that the brain and the good will of man can devise." All that I can say is that if we have reduced ourselves to such a state that the brain and good will of the whole of the electors of this country have to be "cabin'd, cribb'd and confin'd" within the narrow space of three heads, no matter how deep their knowledge or how complete their information may be, I am not satisfied that that is the most scientific method of arriving at the solution for which we are looking. How is it possible to conceive that, after the deep scientific investigation which took place on the items which have been included in the Free List, after all the brains have been so exercised in order to arrive at a conclusion, the Government themselves, having accepted these provisions, can now turn round and say that, in spite of their scientific inquiry as to what ought and what ought not to be taxed, they are prepared to forgo the conclusions at which they themselves had arrived and leave in the hands of three gentlemen the decision as to whether the Government were right or not? I can imagine the three members of that Advisory Committee sitting down, burning the midnight oil, with their Bunsen burners and with all the other scientific appliances at their disposal, arriving at some scientific conclusion whereby they can satisfy the Government that their conclusions are correct scientifically. But were we sent here in order to allow three other people to conduct a scientific inquiry? Was it not for the Members of the House themselves to investigate the various proposals with regard to the imposition of tariffs, to satisfy themselves that a scientific inquiry had taken place, and, after having so satisfied themselves, to say to their consciences and to their electors, "We are now prepared to agree to the imposition of such and such a tariff"? How can it be said that we can delegate this right of inquiry from ourselves to any committee at all? There is an entire difference between the suggestion that the Advisory Committee should impose certain tariffs and that it should be entitled to remove articles from the Free List, because that list has been arranged after scientific inquiry, we assume, on the part of the Board of Trade, who have therefore satisfied themselves that the Free List should not be interfered with. I know that this Clause will be passed. It is unfortunate; but it is necessary that before it is passed we should at least let the Committee understand that there is a goodly portion of this House which is not prepared to accept the Clause without lodging its protest in as strong a form as possible. The Financial Secretary to the Treasury said that if the House reversed a recommendation of a Budget Resolution, grievous results would ensue. I agree, and that is the danger of this Clause, because if the House reverses what has been accepted by the Treasury, on the recommendation of the Advisory Committee, it will mean a most serious implication upon the Government, and Members who form the major portion of the Government will think very carefully, even though their ideas may be entirely different from those held by the Cabinet, on the question of removals from the Free List, before they venture to upset what the Treasury have sanctioned. It is because of that, it is because of the fact that it places all the Members of the House in a most invidious position, that I protest emphatically against the delegation of this particular right to a committee. It is not the right to impose a tariff in the ordinary way; it is the right to remove from the Free List something which has been considered as of vital importance to be included and is indeed of vital interest to every Member of this House, for what Member of this House is not concerned in his own constituency with the question of food? It is no good saying that it is not a question of putting a tax on food. You may as well say that if you give a person the right to remove any article from the Free List, it is not putting a tax on that article. It is utter nonsense to say that it is not imposing a tax. Of course it is. It means that if the Advisory Committee decide that certain goods must be taken out of the Free List, a tax will be put upon them, and among those items—[Interruption.] An hon. Member says that that is not necessary. Then why remove the article from the Free List? If there is going to be a recommendation to remove it, it means that it will no longer be free from taxation, and when it is taken from the Free List, it will obviously have a tax placed upon it. In these circumstances, I ask hon. Members to remember what they said at the General Election and to consider very deeply, before they allow this Clause to go through, whether they are content to let the power of taxation pass out of their hands. I do not say that the Advisory Committee will act in any way which is, in their own opinion, injudicious, or that the Government themselves would act in a manner which is unreliable in their own judgment, but this is a matter in which the taxation of the food of the people is seriously at issue, and it is not a matter for the Government alone to decide. It is a matter which we, as scientific inquirers or as a jury, are entitled to have placed before us in a proper manner. We should listen to the arguments pro and con, carefully weigh them up, investigate them in the light of scientific research, as we understand it, and come to our own conclusions.Does the hon. Member suggest that the Advisory Committee are not competent to decide whether or not any article of food should be taxed, whereas they are competent to decide whether or not a manufactured article should be taxed?
My answer is that in the first place unfortunately we have not the power any longer to stop them in the other direction. It would be out of order for me to say now why I disagree with the Advisory Committee deciding on the issue of manufactured articles. I know of scientists and economists, the chief economists in this world, who are Free Traders out and out, and I am pre pared to say the same of them as my bon. Friend would say of his three members who constitute the Advisory Committee. I have the names of a dozen professors in my mind who, in my opinion, are scientific experts on the question of tariffs and Free Trade, and I am prepared to accept their opinion as against that of any other three people in the world on that proposition. But when it comes to a question of the House of Commons, which has the right to investigate these matters, I repeat that we must act in the capacity of a body of persons before whom arguments pro and con can be placed, so that we ourselves can make that inquiry after having heard the experts on all sides.
My hon. Friend knows very well that if he brings a book into a court of law and quotes from it what a scientist or any other person has said, the first question that is asked of him is, "Is that person in court, and shall we have the power to cross-examine him?" We are exactly in the same position. Where are our experts going to be? Who will have the right to cross-examine them? We are not entitled to accept their written opinion in a judicial inquiry according to the law of this country, until they are dead, and I am not prepared to wait until they are dead in order to satisfy myself as to whether their opinion is right or wrong. I would prefer to have these experts in a judicial manner before us and to have the opportunity of examining them; and, having examined them, if I were satisfied that they are right, I should be prepared to say, openly and honestly, that I believed their view to be correct and to agree to their proposals. But until that is done, I say that we are not doing our duty to the electors or to ourselves, and we certainly ought not to allow this Clause to be accepted as part of the Finance Bill. It has been said that this is not an important matter. I wish to reiterate what has already been stated in this Committee that it is one of the most important matters with which we have had to deal. It is a matter touching the vital interests of the people, and in these circumstances I would beg of those who are concerned with the promotion of the Bill that they should reconsider their decision. They have enough already. They themselves have said that this Free List is vital. How do they come then to pit the advice of three individuals against their own ingenuity, against their own scientific inquiry, against the wonderful results at which they have arrived after years and years of earnest consideration? I say that in these circumstances they are letting themselves down and that they should accept the suggestion which we have put forward.6.0 p.m.
The Committee will gather that this is a matter in which we of the Liberal party hold very strong views. My hon. Friend the Member for Gorton (Mr. Bailey) dealt with the position of food taxes from the point of view of the Conservative party, and said that in his constituency he did not give any impression as to whether he would vote for or against food taxes if he were returned to Parliament.
I did not say quite that. What I said was that I should vote for food taxes if the Government decided that food taxes were necessary, and that I should not vote for them if the Government decided otherwise. That was not giving no impression of how I would vote; It was not saying that I would not vote for food taxes. It was saying that under definite and specific circumstances I would vote for food taxes and that those definite circumstances might arise. There is therefore nothing lacking in clarity in my position. Only my hon. Friend and those like him confuse the issue.
I cannot help feeling that the issue on this matter must have been very confused in the hon. Gentleman's own constituency at the last election. I am in a much more fortunate position than my hon. Friend, because in my constituency there can have been no possible doubt as to how I was going to vote on the question of food taxes, especially on the question of the taxation of wheat and meat. I take a slightly different view on this matter from that advanced from the Opposition benches. We have heard a number of attacks on the Advisory Committee as such. I agree that if we are to have this unfortunate tariff policy, we must have some sort of advisory committee as a safeguard. We must have some committee to prevent the country, in the words of the Lord President of the Council, becoming a paradise for profiteers. Some safeguard is always necessary in a Protectionist system against log-rolling and political pressure for financial ends, and it would be a lamentable thing in this country if the free hand were merely an excuse for the itching palm. There is, however, a big difference between a mere advisory committee and the giving of powers such as these to any committee. It is one thing to set up a tariff for a certain range of articles and to say that the question of that tariff shall be determined by a body of impartial and judicially-minded experts. It is quite another thing to leave in the hands of that committee the major and vital decisions on a matter of first-class policy. That is what is being done by this Clause.
We are asked by an hon. Member whether we think that the Advisory Committee is incompetent. We do not accuse the committee of incompetence in the least, but we say that it makes all the difference if we allow the committee to deal not only with the question of the tariffs but with the range of the tariff policy. This Clause means that the committee will be the arbiters of policy as well as the advisers on the incidence of the tariff. That is a very big step; it is as big a step as we have seen in recent years in the way of delegated powers. In fiscal matters the Advisory Committee will be a sort of mayor of the palace, while this House will be reduced to the position of the Merovingian kings; it is the mayor of the palace who makes all the vital decisions. For that reason, we of the Liberal party, the traditional defenders of the rights of this House, the party which has always stood out against food
Division No. 194.]
| AYES.
| [6.6 p.m.
|
| Acland-Troyte, Lieut.-Colonel | Cattle Stewart, Earl | Fielden, Edward Brocklehurst |
| Adams, Samuel Vyvyan T. (Leeds, W.) | Cautley, Sir Henry S. | Flint, Abraham John |
| Agnew, Lieut.-Com. P. G. | Cayzer, Sir Charles (Chester, City) | Ford, Sir Patrick J. |
| Ainsworth, Lieut.-Colonel Charles | Cazalet, Thelma (Islington, E.) | Fox, Sir Gifford |
| Albery, Irving James | Cazalet, Capt. V. A. (Chippenham) | Fraser, Captain Ian |
| Allen, Lt.-Col. J. Sandeman (B'k'nh'd.) | Chalmers, John Rutherford | Fuller, Captain A. G. |
| Allen, Lt.-Col. Sir William (Armagh) | Chamberlain, Rt. Hon. Sir J. A. (Birm., W) | Galbraith, James Francis Wallace |
| Anstruther-Gray, W. J. | Chapman, Sir Samuel (Edinburgh, S.) | Ganzoni, Sir John |
| Applin, Lieut.-Col. Reginald V. K. | Chotzner, Alfred James | Gault, Lieut.-Col. A. Hamilton |
| Apsley, Lord | Christie, James Archibald | Gibson, diaries Granville |
| Astbury, Lieut.Com. Frederick Wolfe | Clarke, Frank | Gillett, Sir George Masterman |
| Astor, Maj. Hn. John J. (Kent, Dover) | Clarry, Reginald George | Glirnour, Lt.-Col. Rt. Hon. Sir John |
| Atkinson, Cyril | Clayton, Dr. George C. | Glossop, C. W. H. |
| Bailey, Eric Alfred George | Clydesdale, Marquess of | Gluckstein, Louis Halle |
| Baillie, Sir Adrian W. M. | Cobb, Sir Cyril | Glyn, Major Ralph G. C. |
| Baldwin, Rt. Hon. Stanley | Cochrane, Commander Hon. A. D. | Goldie, Noel B. |
| Baldwin-Webb, Colonel J. | Colfox, Major William Philip | Goodman, Colonel Albert W. |
| Balfour, George (Hampstead) | Colville, John | Gower, Sir Robert |
| Balfour, Capt. Harold (I. of Thanet) | Conant, R. J. E. | Graham, Fergus (Cumberland, N.) |
| Balniel, Lord | Cook, Thomas A. | Granville, Edgar |
| Banks, Sir Rsginald Mitchell | Cooke, Douglas | Grattan-Doyle, Sir Nicholas |
| Barclay-Harvey, C. M. | Courtauld, Major John Sewell | Greaves-Lord, Sir Walter |
| Barton, Capt. Basil Kelsey | Courthope, Colonel Sir George L. | Gretton, Colonel Rt. Hon. John |
| Beauchamp, Sir Brograve Campbell | Craddock, Sir Reginald Henry | Grimston, R. V. |
| Beaumont, Hon. R. E. B. (Portsm'th, C.) | Cranborne, Viscount | Guinness, Thomas L. E. B. |
| Belt, Sir Alfred L. | Croft, Brigadier-General Sir H. | Gunston, Captain D. W. |
| Bennett, Capt. Sir Ernest Nathaniel | Crookshank, Col. C. de Windt (Bootle) | Guy, J. C. Morrison |
| Betterton, Rt. Hon. Sir Henry B. | Crookshank, Capt. H. C. (Gainsb'ro) | Hacking, Rt. Hon. Douglas H. |
| Bevan, Stuart James (Holborn) | Cruddas, Lieut.-Colonel Bernard | Hales, Harold K. |
| Birchall, Major Sir John Dearman | Culverwell, Cyril Tom | Hall, Capt. W. D'Arcy (Brecon) |
| Bird, Ernest Roy (Yorks., Skipton) | Davies, Maj. Geo. F. (Somerset, Yeovil) | Hamilton, Sir George (Ilford) |
| Blaker, Sir Reginald | Davison, Sir William Henry | Hammersley, Samuel S. |
| Boothby, Robert John Graham | Denman, Hon. R. D. | Hanley, Dennis A. |
| Borodale, Viscount | Denville, Alfred | Hannon, Patrick Joseph Henry |
| Bossom, A, C. | Despencer-Robertson, Major J. A. F. | Hartland, George A. |
| Boulton, W. W. | Dickle, John P. | Harvey, Major S. E. (Devon, Totnes) |
| Bowater, Cot. Sir T. Vansittart | Doran, Edward | Haslam, Sir John (Bolton) |
| Bower, Lieut.-Com. Robert Tatton | Drewe, Cedric | Headlam, Lieut.-Col. Cuthbert M. |
| Bowyer, Capt. Sir George E. W. | Duckworth, George A. V. | Hellgers, Captain F. F. A. |
| Braithwalte, J. G. (Hillsborough) | Dugdale, Captain Thomas Lionel | Heneage, Lieut.-Colonel Arthur P. |
| Briscoe, Capt. Richard George | Duggan, Hubert John | Hepworth, Joseph |
| Brockiebank, C. E. R. | Duncan, James A. L. (Kensington, M.) | Hills, Major Rt. Hon. John Waller |
| Brown, Col. D. C. (N'th'l'd, Hexham) | Dunglass, Lord | Hoare, Lt.-Col. Rt. Hon. Sir S. J. G. |
| Brown, Ernest (Leith) | Eady, George H. | Hope, Capt. Arthur O. J. (Aston) |
| Brown, Brig.-Gen. H. C. (Berks., Newb'y) | Elliot, Major Rt. Hon. Walter E. | Hore-Beilsha, Leslie |
| Browne, Captain A. C. | Elliston, Captain George Sampson | Hornby, Frank |
| Buchan, John | Emmott, Charles E. G. C. | Horsbrugh, Florence |
| Burghley, Lord | Emrys-Evans, P. V. | Howard, Tom Forrest |
| Burnett, John George | Entwistle, Cyril Fullard | Hudson, Capt. A. U. M. (Hackney, N.) |
| Burton, Colonel Henry Walter | Essenhigh, Reginald Clare | Hudson, Robert Spear (Southport) |
| Butt, Sir Alfred | Evans, Capt. Arthur (Cardiff, S.) | Hume, Sir George Hopwood |
| Cadogan, Hon. Edward | Everard, W. Lindsay | Hunter, Capt. M. J. (Brigg) |
| Campbell, Edward Taswell (Bromley) | Falle Sir Bertram G. | Hurst, Sir Gerald B. |
| Caporn, Arthur Cecil | Fermoy, Lord | Hutchison, Maj.-Gen. Sir R. (Montr'se) |
taxes, make our protest. We know all about the confirmation by this House of the Orders made by the Treasury, but the effective decisions will be taken, not by this House, but by three men in some back room. This controversy has been going on for a quarter of a century; it is the controversy in which all our greatest political leaders were engaged, and we say that the final pronouncement on the taxation of wheat and meat should not be made merely by three men, however competent, skilled or impartial, but only by the high court of Parliament.
Question put, "That the Clause stand part of the Bill."
The Committee divided: Ayes, 341; Noes, 61.
| Hutchison, W. D. (Essex, Romf'd) | Morrison, William Shepherd | Simmonds, Oliver Edwin |
| Inskip, Rt. Hon. Sir Thomas W. H. | Moss, Captain H. J. | Skelton, Archibald Noel |
| Jackson, Sir Henry (Wandsworth, C.) | Muirhead, Major A. J. | Smiles, Lieut.-Col. Sir Walter D. |
| James, Wing-Corn. A. W. H. | Munro, Patrick | Smith, Louis W. (Sheffield, Hallam) |
| Jamieson, Douglas | Nail-Cain, Arthur Ronald N. | Smith, R.W. (Aberd'n & Kinc'dine, C.) |
| Jennings, Roland | Nation, Brigadier-General J. J. H. | Smithers, Waldron |
| Jesson, Major Thomas E. | Newton Sir Douglas George C. | Somerville, Annesley A. (Windsor) |
| Johnston, J. W. (Clackmannan) | Nicholson, Godfrey (Morpeth) | Soper, Richard |
| Ker, J. Campbell | Nicholson, Rt. Hn. W. G. (Petersf'ld) | Sotheron-Estcourt, Captain T. E. |
| Kerr, Hamilton W. | North, Captain Edward T. | Southby, Commander Archibald R. J. |
| Kirkpatrick, William M. | Nunn, William | Spencer, Captain Richard A. |
| Knatchbull, Captain Hon. M. H. R. | O'Connor, Terence James | Spender-Clay, Rt. Hon. Herbert H. |
| Knight, Holford | O'Neill, Rt. Hon. Sir Hugh | Stanley, Lord (Lancaster, Fylde) |
| Knox, Sir Alfred | Ormiston, Thomas | Stanley, Hon. O. F. G. (Westmorland) |
| Lamb, Sir Joseph Quinton | Ormsby-Gore, Rt. Hon. William G. A. | Stevenson, James |
| Lambert, Rt. Hon. George | Palmer, Francis Noel | Stones, James |
| Latham, Sir Herbert Paul | Patrick, Colin M. | Stourton, Hon. John J. |
| Law, Sir Alfred | Pearson, William G. | Strauss, Edward A. |
| Law, Richard K. (Hull, S.W.) | Peat, Charles U. | Strickland, Captain W. F. |
| Leckie J. A. | Penny, Sir George | Stuart, Hon. J. (Moray and Nairn) |
| Lees-Jones John | Perkins, Walter R. D. | Sugden, Sir Wilfrid Hart |
| Leighton, Major B. E. P. | Petherick, M. | Summersby, Charles H. |
| Lewis Oswald | Peto, Sir Basil E. (Devon, Barnstaple) | Sutcliffe, Harold |
| Liddall, Walter S. | Peto, Geoffrey K. (Wverh'pt'n, Bliston) | Tate, Mavis Constance |
| Lindsay Noel Ker | Potter, John | Taylor, Vice-Admiral E. A. (P'dd'gt'n, S.) |
| Lister, Rt. Hon. Sir Philip Cunliffe- | Powell, Lieut.-Col. Evelyn G. H. | Templeton, William P. |
| Liewellin, Major John J. | Procter, Major Henry Adam | Thomas, Rt. Hon. J. H. (Derby) |
| Locker-Lampson, Rt. Hn. G. (Wd, Gr'n) | Pybus, Percy John | Thomas, James P. L. (Hereford) |
| Lockwood, John C. (Hackney, C.) | Raikes, Henry V. A. M. | Thomas, Major L. B. (King's Norton) |
| Lovat-Fraser, James Alexander | Ramsay, Alexander (W. Bromwich) | Thompson, Luke |
| Lumley, Captain Lawrence R. | Ramsay, Capt. A. H. M. (Midlothian) | Thomson, Sir Frederick Charles |
| Lyons, Abraham Montagu | Ramsbotham, Herwald | Titchfield, Major the Marquess of |
| MacAndrow, Lieut.-Col. C. G. (Partick) | Ray, Sir William | Todd, Capt. A. J. K. (B'wick-on-T.) |
| MacAndrew, Capt. J. O. (Ayr) | Read, Arthur C. (Exeter) | Todd, A. L. S. (Kingswinford) |
| McCorquodale, M. S. | Reid, Capt. A Cunningham- | Touche, Gordon Cosmo |
| Macdonald, Capt. P. D. (I. of W.) | Reld, William Allan (Derby) | Tryon, Rt. Hon. George Clement |
| McEwen, Captain J. H. F. | Remer, John R. | Vaughan-Morgan, Sir Ksnyon |
| McKie. John Hamilton | Rentoul Sir Gervals S. | Wallace, Captain D. E. (Hornsey) |
| McLean, Major Alan | Renwick, Major Gustav A. | Ward, Lt.-Col. Sir A. L. (Hull) |
| McLean, Dr. W. H. (Tradeston) | Reynolds, Col. Sir James Philip | Ward, Irene Mary Bewick (Wallsend) |
| Macquisten, Frederick Alexander | Rhys, Hon, Charles Arthur U. | Ward, Sarah Adelaide (Cannock) |
| Magnay, Thomas | Roberts, Sir Samuel (Ecclesall) | Warrender, Sir Victor A. G. |
| Maitland, Adam | Robinson, John Roland | Watt, Captain George Steven H. |
| Margesson, Capt. Henry David R. | Ropner, Colonel L. | Wayland, Sir William A. |
| Marsden, Commander Arthur | Rosbotham, S. T. | Wells, Sydney Richard |
| Martin, Thomas B. | Ross, Ronald D. | Weymouth, Viscount |
| Mason, Col. Glyn K. (Croydon, N.) | Ross Taylor, Walter (Woodbridge) | Whiteside, Borras Noel H. |
| Mayhew, Lieut.-Colonel John | Runge, Norah Cecil | Williams, Herbert G. (Croydon S.) |
| Meller, Richard James | Russell, Albert (Kirkcaldy) | Wills, Wilfrid D. |
| Merriman, Sir F. Boyd | Russell, Alexander West (Tynemouth) | Wilson, Clyde T. (West Toxteth) |
| Mills, Sir Frederick (Leyton, E.) | Russell, Hamer Field (Sheffield,B'tside) | Wilson, G. H. A. (Cambridge U.) |
| Mills, Major J. D. (New Forest) | Salmon, Major Isidore | Windsor-Clive, Lieut.-Colonel George |
| Milne, Charles | Salt, Edward W. | Withers, Sir John James |
| Mitchell, Sir W. Lane (Streatham) | Samuel, Sir Arthur Michael (F'nham) | Wood, Rt. Hon. Sir H. Kingsley |
| Mitcheson, G. G. | Sandeman, Sir A. N. Stewart | Worthington, Dr. John V. |
| Monsell, Rt. Hon. Sir B. Eyres | Savery, Samuel Servington | Wragg, Herbert |
| Moreing, Adrian C. | Scone, Lord | Young, Rt. Hon. Sir Hilton (S'v'noaks) |
| Morgan, Robert H. | Shakespeare, Geoffrey H. | |
| Morris, John Patrick (Salford, N.) | Shaw, Helen B. (Lanark, Bothwell) | TELLERS FOR THE AYES.— |
| Morris, Owen Temple (Cardiff, E.) | Shaw, Captain William T. (Forfar) | Mr. Womersley and Lord Erskine. |
| Morris-Jones, Dr. J. H. (Denbigh) | Shepperson, Sir Ernest W. |
NOES.
| ||
| Adams, D. M. (Poplar, South) | Hamilton, Sir R. W. (Orkney & Zetl'nd) | Maxton, James |
| Batey, Joseph | Harris, Sir Percy | Nathan, Major H. L. |
| Bevan, Aneurin (Ebbw Vale) | Hirst, George Henry | Parkinson, John Allen |
| Brown, C. W. E. (Notts., Mansfield) | Holdsworth, Herbert | Pickering, Ernest H. |
| Buchanan, George | Hopkinson, Austin | Price, Gabriel |
| Cape, Thomas | Janner, Barnett | Rathbone, Eleanor |
| Cove, William G. | Jenkins, Sir William | Rea, Walter Russell |
| Cripps, Sir Stafford | Johnstone, Harcourt (S. Shields) | Roberts, Aled (Wrexham) |
| Daggar, George | Jones, Henry Haydn (Merioneth) | Salter, Dr. Alfred |
| Davies, Rhys John (Westhoughton) | Jones, Morgan (Caerphilly) | Samuel, Rt. Hon. Sir H. (Darwen) |
| Duncan, Charles (Derby, Claycross) | Lansbury, Rt. Hon. George | Thorne, William James |
| Edwards, Charles | Lawson, John James | Tinker, John Joseph |
| Evans, R. T. (Carmarthen) | Leonard, William | Williams, David (Swansea, East) |
| Foot, Dingle (Dundee) | Logan, David Gilbert | Williams, Edward John (Ogmore) |
| Foot, Isaac (Cornwall, Bodmin) | Lunn, William | Williams, Dr. John H. (Lianelly) |
| Greenwood, Rt. Hon. Arthur | McEntee, Valentine L, | Williams, Thomas (York, Don Valley) |
| Grenfell, David Rees (Glamorgan) | McKeag, William | Young, Ernest J. (Middlesbrough, E.) |
| Griffith, F. Kingsley (Middlesbro', W). | Maclay, Hon. Joseph Paton | |
| Griffiths, T. (Monmouth, Pontypool) | Maclean, Rt. Hon. Sir D. (Corn'll N.) | TELLERS FOR THE NOES.— |
| Grundy, Thomas W. | Maclean, Neil (Glasgow, Govan) | Mr. Gordon Macdonald and Mr. Groves. |
| Hall, F. (York, W.R., Normanton) | Mallalieu, Edward Lancelot | |
| Hall, George H. (Merthyr Tydvil) | Mander, Geoffrey le M. | |
Clause 7 (Power To Revoke Orders In Council Made Under S 5 Of 22 Geo 5 C 8) Ordered To Stand Part Of The Bill
Clause 8—(Further Provision For Drawback Of Duties Under Part I Of 22 Geo 5 C 8)
I beg to move, in page 5, to leave out lines 1 to 7, and to insert instead thereof the words:
This Clause is designed to provide a means whereby drawbacks become allowable, the Treasury being authorised to make an Order on a scheme submitted by the Advisory Committee; but by the terms of the proviso to the Clause the discretion given alike to the Treasury and the Advisory Committee is qualified. A direction is given that the committee shall not submit, and the Treasury shall not approve, a scheme unless the committee and the Treasury are satisfied that in all the circumstances, including—and I specially direct attention to these words—"In deciding what scheme, if any, to submit for the purposes of this section the committee shall have regard to the necessity in the national interest of expanding exports from the United Kingdom."
At first reading that might appear to be an entirely innocuous proviso, but the sting of it is to be found in the words to which I directed attention, that the Advisory Committee and the Treasury are to have particular regard to the interests of any producers of materials of the kind to which the drawback relates, What in truth we have been witnessing in this country for some months past, and are likely to continue to witness, is what is at the moment a veiled conflict, but will soon become an open conflict, between the limited class of producers in this country on the one hand and the whole trading community and the community of the consumers on the other hand. The chief object of a drawback is to facilitate export, to enable the British merchant to fulfil the behest of the Prince of Wales in the speech made by him last Friday that we should "sell British"; but if the Advisory Committee and the Treasury are to have special regard to the interests of a limited class of producers then, instead of expanding our national trade, we shall simply restrict it. It is to be noticed that the Government, in the matter of drawbacks in connection with tariffs, seem to have been in some confusion of mind as to what exactly they desire to achieve. I understand that the Parliamentary Secretary to the Board of Trade is to reply, and I would direct his attention and that of the Committee to a point which seems to have been overlooked in the drafting of this Clause of the Finance Bill. In the second paragraph of the Second Schedule of the Import Duties Act provision is made for drawbacks. A scheme is to be settled by the Advisory Committee, just as in the present Bill, and approved by the Treasury, but there is this difference. The scheme under the Import Duties Act relates not to manufactured goods but to goods exported in the state in which they were imported, and the Advisory Committee and the Treasury are directed to have regard to the general interests of the industries concerned, including the export trade. Drawbacks granted under the Second Schedule of the Import Duties Act are to be directed to improving the export trade, whereas, forsooth, drawbacks under the Finance Bill are to be considered in relation to the interests of the producers in the United Kingdom of the materials specified in the scheme. Is there to be a different criterion for goods which are exported in the state in which they are imported from that which is to be applied in the case of goods manufactured in this country? I cannot for a moment believe that it is so. I cannot believe that it is the intention of the Government to stifle or make more difficult the export trade, but to expand it and to make it simpler. Expression to that view was given in the Import Duties Act, but this Finance Bill shows an absolute change of face in the matter, and I shall be glad to have an explanation as to how that comes about. In order to make the position clear beyond peradventure I am proposing in my Amendment that in the case of the Finance Bill, as in the case of the Import Duties Act, it shall be a direction to the Advisory Committee that in deciding on a scheme they shall have regard to the necessity, in the national interest, of expanding exports from the United Kingdom. Those words are the counterpart of the words found in Clause 3, Subsection (2), of the Import Duties Act, where the Advisory Committee, when considering their recommendations as to the imposition of duties, are directed to have regard to the advisability in the national interest of restricting imports into the United Kingdom. If in imposing duties you are to have regard to the importance of restricting imports, then it is only logical, proper and businesslike, when considering drawbacks, to have regard to the importance of expanding the export trade. It is to achieve the all-important result, compared with which the limitation of imports is nothing, of improving our export trade that I move this Amendment."the interests of any producers in the United Kingdom of material of the kind specified in the scheme it is in the national interest that drawback should be allowed."
6.30 p.m.
My hon. and gallant Friend the Member for North-East Bethnal Green (Major Nathan) has argued his case, as always, with great weight, and I think I can give him complete satisfaction upon it. When the Import Duties Act was introduced as a Bill it did contain a limited provision for drawbacks, and my hon. and gallant Friend has quoted that provision. What the provision came to was this: Where goods were imported and subsequently re-exported, a drawback might be given provided the goods had not changed their form or shape. My hon. and gallant Friend will see that the British manufacturer did not come into the picture at all, and that is why the words which he now proposes to introduce here were not introduced into that Schedule; they would have been completely inapposite and meaningless. In the course of the discussions on that Bill a number of hon. Members, including my hon. and gallant Friend, pressed for an extension of the drawback. The Government have met their desire, and what we have done, and what I should have thought would have caused unanimous approval, is this: We have said that where British manufacturers engaged in the export trade are compelled for various reasons to use foreign materials —I will deal with the reasons in a moment—they shall be able to claim a refund of the duty on those materials providing that the circumstances are appropriate. That is what we have done. What are the words which we use? We say that the Advisory Committee shall be able to recommend this refund of duty having regard to the interests of producers, that is to say, if there be in this country producers who can supply the thing at a reasonable price, in a reasonable quantity, and of a reasonable quality, then we say that the position of those producers should be respected. Where there is a conflict of interests between the producers and the exporters, then we say that the national interest shall prevail. In order that every factor shall be taken into account, price, quality and quantity, we use the phrase that the Advisory Committee shall have "regard to all the circumstances." What could be fairer than that? My hon. and gallant Friend the Member for North-East Bethnal Green wants to sweep away all those words and keep out of the Clause any reference to the producers; he wants to leave out any reference to all the relative circumstances such as price, quantity and quality, and substitute for those eminently equitable conditions the interests of the exporting industry. The very object of a drawback is to give advantage to the exporting industries. You might as well say that when the railway companies reduce their fares they must always add that they do so for the convenience of the passengers, and to encourage traffic. It is quite obvious that we have in view the interests of the exporting industry by proposing a drawback.
In taking out the reference to the consumers and the national interest, and the reference to all the circumstances, the implication would be that we wish to put a premium on the use of foreign materials in British manufactures. But we wish to do no such thing. We wish that manufacturers, wherever possible, shall be encouraged to use British-produced material, and when this be not available either in quantity or at a suitable price, then the committee will be empowered to recommend a drawback. I am sure that my hon. and gallant Friend the Member for North-West Bethnal Green will not disagree with us in desiring to give every benefit, where possible, to the producers of material in this country. I have shown the reason why these words were used, and why it would have been impossible to use the same words in the Schedule of the Import Duties Act concerning drawbacks, and, as the hon. and gallant Mem- ber cannot have any object at heart different from our own—at least, I should be reluctant to believe that he had—I would ask him to withdraw his Amendment.I hope my hon. and gallant Friend the Member for North-East Bethnal Green (Major Nathan) will not withdraw his Amendment. The Parliamentary Secretary to the Board of Trade is very quick in taking hold of ideas, and adjusting himself to new conditions and circumstances. No doubt when my hon. Friend has had more experience of world trade, he will realise that our great world trade is a very sensitive machine, and if interfered with by a prentice hand, an enormous amount of damage may be done. I am glad to see the Lord President of the Council present because, quite recently, he made a notable appeal to the people of the country to keep their eyes on export and world trade. The right hon. Gentleman has had great experience, and he does not take a narrow outlook; he realises that we cannot exist except by world trade. I am not ashamed to speak on this subject as a London Member. We have aggregated round the Thames in London some 8,000,000 people and an immense number of industries of various kinds. The large towns and municipalities in every part of Europe have studied and admired London and its great history, and we have some 55,000 manufacturers of various articles in London.
Now I am going to say something that I know is not acceptable to many Members of the House, and that is that the success of London and its great development have been brought about largely by a system of free imports. In London every variety of article of commerce is manufactured. When we talk of the north, and of Newcastle or Birmingham, and other great cities, we visualise great industries and great engineering trades, quite unconscious of the fact that London is a great engineering centre, and that has been rendered possible because London has been able to draw its raw material from all quarters of the globe. In London our manufacturers can look, not to the home market alone, but to the world market, to the Dominions, and to America, where they know that no Customs officer can put his clumsy hands on the raw material. The Parliamentary Secretary to the Board of Trade is going to tell those 55,000 manufacturers how to produce their goods; he is saying to them, "You must not buy your semi-raw materials or textiles anywhere in the open market; you must first find out whether the material you require can be produced in this country; and after that you must find out whether the price of that material, in the opinion of the three gentlemen who form the Advisory Committee, is a reasonable figure." What is a, reasonable figure in these days is very difficult to say, but the manufacturer is not to be allowed to buy in the open market and his market is to be limited. Then comes forward the greatly despised merchant from Australia or Canada, and he finds that he can no longer buy his goods in London because we are to have a limited market for our products, and therefore the prices are no longer competitive. I would like to hear the experience of the hon. Member for South Croydon (Mr. H. Williams), who is a competent business man, and one who takes a very wide outlook on these matters. I would like to ask if, under this Bill, the Government are providing a complete and full system of drawbacks. I agree that if the Government give a full unlimited system of drawbacks like that which is in existence in most continental countries, then the home trade will be counterbalanced. Apparently the Government have not a method of doing things in a full and thorough way, and we are now dealing with only a halfhearted concession. All these transactions are still to be restricted, and drawbacks are not to be given to manufacturers who produce from foreign material. If tariffs are not to interfere with exports, it is absolutely essential that there should be a full, unqualified, unlimited system of drawbacks-, with no qualifications or restrictions as to production in this country. Without this safeguard, Great Britain is up against the most severe competition we have ever had to face. What is now proposed will increase competition in the world market. Germany will not be able to send her goods here, and will have to look to America and the New World for fresh markets. German and French competition will increase, and if this country is to be successful in the export trade of the world markets, it is essential that we should be put in the same position as our competitors Germany and France, where they have a thorough system of drawbacks. This limited concession is not full enough, and it is not satisfactory. I submit that if the words which have been proposed by my hon. and gallant Friend the Member for North-East Bethnal Green cannot be accepted now, at any rate we ought to have some assurance that on the Report stage the drawbacks will be made complete, and all these disqualifications removed.I would like to thank the hon. Baronet the Member for South-West Bethnal Green (Sir P. Harris) for his kindly reference to myself. I cannot, however, allow my feelings of gratitude to him to stop me from indulging in a few minor criticisms of his arguments. When this matter was under discussion during the Committee stage of the Import Duties Bill, the Government agreed that the drawback should not apply to the additional duties, and the Free Traders rejoiced and said that the system was adequate. I do not want to blow my own trumpet, but I think I was the only person who pointed out that that was not an adequate system of drawbacks, and I think we have now a scheme which is the best system of drawbacks of any country in the world. Anything further would be wrong.
We do not want drawbacks except for exceptional cases. The only justification for them is when a rise in prices has occurred as the result of an Import Duty on a partly manufactured article, and as a consequence the goods are raised in price. Up to now it is a very remarkable thing that there has not been a single genuine case which has arisen where a drawback was really necessary. Under the general system of duties now in operation, no increase has occurred in relative prices. There has not been a single case where a drawback was necessary except in the case of a few commodities which ought to be on the Free List in any event. Let us suppose that we gave a drawback in every case. In those circumstances we should be inflicting immense injury on certain producing industries in this country, and we do not want to subsidise the use of foreign material in our manufactured goods. Take a case where a rise has taken place in the price of the article, and yet a certain amount of that article is coming in from abroad because the foreigner has been willing to cut his price in order to jump the tariff. In that case, although the British manufacturer is not prejudiced in any way, the hon. Baronet the Member for South-West Bethnal Green would grant a drawback in respect of any article made from the imported material. Imagine that the price is £5 and the duty £1 a ton. The price when the drawback is granted would be £4 a ton, and as the use of foreign material is increased, the manufacturer gets a subsidy on the export trade; if it goes on sufficiently-long you may completely destroy the industry in this country which is manufacturing the semi-manufactured article. Nobody wishes to use a tariff to destroy existing industries, but if the hon. Baronet the Member for South-West Bethnal Green had his way you would, in many cases, deter people from using semi-manufactured material, and you would induce them to take imported foreign material, because when they came to export they would get what, in effect, is a subsidy. On the other hand, I recognise that if in certain individual cases, as the result of the tariff, the price of a partly manufactured article is raised to the manufacturer here, and he is in consequence prejudiced, a sufficient drawback ought to be granted to restore him to the position in which he was before the tariff was introduced. In some cases a drawback of the full amount of the duty would be necessary, but in many eases only half the amount would be necessary. In a case, for instance, in which an article was selling freely in this country at £5 a ton, and a duty of £1 a ton was put on, but the effect was only to raise the price to £5 10s., what justification would there be for granting a drawback of £1?The hon. Member forgets that the home manufacturer's competitor in another country has the advantage of that same material which he is importing, and also has the advantage, on the hon. Member's own showing, of lower wages.
My case is that, if a man abroad is selling normally at £5 a ton in this market and at £5 a ton in his home market, and if we put on a tariff of £1 a ton, the foreigner, in order not to lose his trade, may decide to sell at £4 10s. in this market. [Interruption.] That happens very frequently; indeed, it is almost invariable; and in that case, with the duty added, the price is £5 10s. In order to restore the manufacturer in this country to the position in which he was before, as compared with his foreign competitor, he wants a drawback, not of £1, but of 10s.; but, if the hon. Baronet had his way, we should throw away, quite unnecessarily, another 10s. The system laid down in this Bill provides that, where a manufacturer's export trade has been prejudiced, he can go to the Advisory Committee, who will examine all the circumstances, including those mentioned by the Parliamentary Secretary and also those which I have mentioned, which are the same, though stated in different words. But nothing is gained by destroying an existing manufacture in this country.
The hon. and gallant Member for North-East Bethnal Green (Major Nathan) spoke as though export trade was more important than internal trade, but it is a matter of indifference to a manufacturer whether he sells, say, a motor car in this country or abroad. There is no particular merit in export trade. Why should anyone trouble about export trade if he can sell all his goods at home? The purpose of export trade is to enable us to import from abroad things that we cannot produce here, and, if it is carried on to any further extent, its value is discounted. Indeed, from some points of view, the less you export the better off you are, because in that case you have more to consume yourself. Everything that you hand to someone else to consume is lost. It seems that Free Traders cannot understand their own doctrine. I am afraid, however, that if I pursued that argument I should be ruled out of order. I hope that the Committee will reject this Amendment, which would be destructive of the most scientific provision in regard to drawback that has ever been framed in any country.I have been amazed by the speeches from the Liberal benches, and particularly by the two speeches of the hon. Members for Bethnal Green. The hon. Baronet the Member for South-West Bethnal Green (Sir P. Harris) chided the Parliamentary Secretary for using his 'prentice hand to tell manufacturers in this country "how to do it." The hon. Baronet thought that that was monstrous. Manufacturers, if his speech meant anything at all, ought to be left entirely alone to run their own businesses with as little interference as possible by way of tariffs or in any other way. Not so long ago, however, the hon. and gallant Member for North-East Bethnal Green (Major Nathan), who moved this Amendment, was moving Amendments designed to secure that the Advisory Committee should take into account the efficiency or otherwise of every single industry in this country before a tariff was granted to it, and I am bound to say that I had a certain general sympathy with his Amendments. I would point out to the Liberals, however, that they cannot have it every way. They cannot on one occasion move Amendments to secure efficiency in industry at the hands of the Government, and on another occasion, in order to score a point against the Government, chide the Parliamentary Secretary to the Board of Trade for using his 'prentice hand in order to tell our manufacturers "how to do it."
I would point out that, when the hon. Member for South-West Bethnal Green spoke about the tremendous and miraculous development of London, he was on the fringe of a very important and difficult subject. I am not myself convinced that this imposing and, I agree, miraculous industrial development around London and in the South of England, which has taken place particularly since the War, is in itself a very good thing. Indeed, I believe that before this century is out some form of national industrial planning will have to be undertaken in this country, for I believe that this mushroom growth of industries in the South of England and around London, while in the North more and more stagnant pools are being left without industries of any sort—I am afraid that the hon. Member is getting rather far from the subject of the Amendment.
I was going to say that I thought that my hon. Friend the Member for South Croydon (Mr. H. Williams) had made an absolutely convincing case to the effect that the method of drawback as laid down in the Bill, and as propounded by the Parliamentary Secretary, was designed for the very purpose of resuscitating and reviving those industries in the North of England which are being at the present moment, and have been for some years past, allowed to languish and die out, and for that reason I am glad to support him. I think it is relevant to the Amendment to say that I agree whole-heartedly with my hon. Friend the Member for South Croydon when he says that we in the House of Commons will be compelled by the march of economic events to concentrate more and more in the future upon the value of the home market, and not to get it into our heads that the salvation and industrial future of this country depend principally, or even primarily, upon our export trade. In the past we have minimised to an immense extent the value of the home market in this country. This home market is of enormous extent, and can be made into a tremendous asset for our producers in the North. Therefore I hope that, while in obvious cases, such as my hon. Friend the Member for South Croydon has instanced, the drawback will be granted, it will be granted only in those cases, and that every facility will be accorded by the Advisory Committee to our own producers, particularly in the North, to produce goods in our own country for our own home market.
Amendment negatived.
I beg to move, in page 6, line 24, to leave out the word "regulations," and to insert instead thereof the word "rules."
This is only a drafting Amendment, to correct a mistake in the use of terms. Sub-section (5) provides that the Commissioners of Customs and Excise may make rules, and it is necessary, therefore, that the word "rules" should be used here also.Amendment agreed to.
Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."
Before we part with this Clause, I should like to ask the Parliamentary Secretary for some in- formation with regard to Sub-section (8). My hon. Friend will remember that, in the discussions on the Import Duties Bill, when we reached Clause 11 a difficulty was found in including marine engine works in the definition of a shipbuilding yard, and, while the Government looked at my Amendment sympathetically, it was found to be impossible to include marine engineering works in that definition. The result is that at present a marine engine works outside a shipbuilding yard in a particular area may be put at a great disadvantage as compared with marine engine works which are included in shipbuilding yards.
It seems to me that Sub-section (8) is very important. Alter the statement of the Parliamentary Secretary on the question of drawback, it looks as though any foreign manufactured goods that might be included in the construction of a marine engine might receive a drawback as such. Sub-section (8) provides that, where goods are brought into any such registered shipbuilding yard as is mentioned in Section 11 of the Import Duties Act from any other part of the United Kingdom, the Commissioners of Customs and Excise may, subject to such conditions as are mentioned in Sub-section (1) of Section 11, treat the goods, for the purpose of the provisions of Clause 8 of this Bill, as if they had been exported from the United Kingdom. Do I understand from the Parliamentary Secretary that such is the case? If so, it will remove a great deal of the difficulty, and will, I think, overcome the position that we tried to overcome at the time when the Import Duties Act was passed.7.0 p.m.
When the Import Duties Bill was under discussion in the House, I tried to get to know from the Parliamentary Secretary, when he was replying late at night before the Guillotine fell, whether ship-plates were in-eluded under the provisions of Clause 11 of that Bill, and I see now that Clause 8 of this Bill makes provisions with regard to shipbuilding yards. I wanted to find out whether ship-plates would, under the Import Duties Act, be free of tax, or whether they would be subject to a duty of 33⅓ per cent., like steel bars, blooms, billets, angles, wire rods, and so on. I want the Parliamentary Secretary to understand that in the steel trade, especially from the Midland counties up to Scotland, our people are paid on a sliding scale, and that sliding scale is based on the price of ship-plates. In imposing a 33⅓ per cent. duty on, say, blooms or billets, the intention is to increase the price, but, if these ship-plates are allowed to come into this country free of duty, our people who are paid on a sliding scale will not get any advantage whatever from any increase in the prices of other commodities produced in the industry. Take the North-East Coast, to which I think the Parliamentary Secretary paid a visit. You may have there a very large combine—Dorman Long, or some other large combine. This combine produces all the commodities I have mentioned— blooms, billets, angles, and ship-plates. Let us assume that ship-plates have been sold at £6 a ton and the other commodities at the same price. Under the 33⅓ per cent. duty the blooms and billets, we will assume, are to be increased in price by £2 a ton to £8 a ton. Nevertheless, our members will be paid under the sliding-scale based on the £6 a ton for ship-plates and will get no advantage whatever out of the profits made by the steel-makers. This sliding-scale has been in operation for over 40 years, and the steel and iron trade is the only trade which has never had a general strike or industrial trouble. That is due to our negotiating machinery. If our people who make these commodities are to get no advantage whatever from the increase in prices, I warn the National Government that they will have trouble in Middlesbrough, in Scotland, and in every district working under that scale.
I warn the Government that they ought to discuss this matter with the Advisory Committee. If they are going to adopt a policy of tariffs, they ought not to play up to the President of the Board of Trade simply because he is interested in shipyards. If they are going to tax billets, blooms and wire-rods and the other commodities included in the Schedule, they ought to tax ship-plates as well, so that the wages will not be affected. If they are going to allow this rebate or to allow ship-plates to come in free, it will affect the wages of our people under the sliding-scale, and there is bound to be trouble. I am giving this warning, and I hope that the Advisory Committee will look into the matter thoroughly and put ship-plates in the same position as the other commodities.I shall see that the important observations made by the hon. Member for Pontypool (Mr. Griffiths) are brought to the notice of the Advisory Committee. Although I can hardly believe that anything said by such an authority as he is on the subject would escape their attention, I shall personally see that his speech is read. With regard to the position generally—I especially reply here to the hon. Member for Sunderland (Mr. Thompson)—the position is that, under Section 11 (1) of the Import Duties Act, where goods imported into the United Kingdom are consigned direct to a registered shipyard, the goods may, under the conditions prescribed, be imported free of duty. In Sub-section (2) the provision of drawback is applicable to those goods, that is to say, the provision of drawback referred to in the Import Duties Act If goods enter a shipbuilding yard in an unchanged form, then the drawback can be claimed, but, if the goods are manufactured in this country out of foreign material, no drawback can be claimed. The purpose of this Clause is to allow the British manufacturer a chance of making the goods in this country, where necessary out of foreign material, and to put him in a position to claim the drawback. That is as far as the Import Duties Act went, and is as far as this Finance Bill goes. I am sure that my hon. Friend would like the Act to go further than it does, but, as no opportunity was given to him during the discussion of the original provision for extending its application, it would not be possible to extend its application under the Finance Bill. All we do is to preserve the symmetry of the original Act in relation to our new proposals.
I am very much obliged to the hon. Member for his explanation. Let me give him a concrete case. Assuming that in the manufacture of a marine engine a foreign crank-shaft is imported from abroad and incorporated in the construction of the engine, I understand that under this Clause a drawback may be claimed on behalf of the foreign crank-shaft. Is that so?
That is so. If a foreign crank-shaft is used and is of that class of crank-shaft which the Advisory Committee recommend for the drawback, then the drawback could be claimed.
The hon. Member for South-West Bethnal Green (Sir P. Harris) said with justifiable pride that there are 55,000 manufacturers in the London area. That is not the whole story, because in the whole country there are 127,000 different factories and, if we exclude the very small concerns, there are over 10,000 factories employing 100 persons or more. Every Member of the Committee will know of instances of one or more of these small factories carrying on a successful export trade. Indeed, in this country it has always been the small producer who has been the virile factor in our productive industry. I only ask my hon. Friend that great care may be taken, in drawing up the schemes provided for under this Clause, to see that the small producer is in no way prejudiced when it comes to applying for the drawback if he is entitled to it and is carrying on an export trade.
Question, "That the Clause, as amended, stand part of the Bill," put, and agreed to.
Clause 9—(Exemption Of Certain Machinery From Duties Under 22 Geo 5 C 8)
The following Amendment stood upon the Order Paper: In page 7, line 2, to leave out the word "machinery" and to insert instead thereof the word "goods". —[ Mr. G. Hall.]
This Amendment is out of order, as it is outside the scope of the Resolution.
Motion made, and Question, "That the Clause stand part of the Bill," put, and agreed to.
Clause 10—(Penalty On Describing Fortified Wines As Spirits)
I beg to move, in page 8, line 2, after the word "name," to insert the words:
This Clause seems to be somewhat involved and, as I am sure it never was the intention of the Government to in- clude well-known wines such as port and sherry in this Clause, I have put down this Amendment, which I hope the Government will see their way to accept."(not being the name 'port' or 'sherry,' or the name of any other description of genuine wine)."
Amendment agreed to.
Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."
I wish to draw the attention of the Government to one point in connection with this Clause, which I understand has been drafted in order to deal with certain practices which have grown up in the trade. Owing to the wording of the Clause, it may also have the effect of penalising cocktails sold in bottles. I do not think that is the object of the Government. I hope that the Government will undertake to look into the matter before the Report stage, in order that a penalty should not be placed upon this legitimate section of the trade, and I shall be glad if they will give me an assurance to that effect. It would not be fair to ask for any definite statement at this stage, but I hope that, if between now and Report it is found that this Clause will hit a section of the trade which it was not intended to affect, it will be amended.
I willingly give my hon. Friend the assurance which he asks, and I undertake that the matter will be looked into between now and the Report stage.
Question put, and agreed to.
Clause 11—(Amendment In Respect Of Duties For Licences On Motor Bicycles)
I beg to move, in page 8, to leave out lines 35 and 36, and to insert instead thereof the words:
| £ | s. | d. | |
| "(c) Exceeds 250 cubic centimetres but does not exceed 360 cubic centimetres | 2 | 0 | 0 |
| (d) Exceeds 350 cubic centimetres | 3 | 0 | 0" |
The object of the Amendment is to increase the number of classes into which motor bicycles are divided for the purpose of taxation from three to four. The hon. Member suggested that this might increase the taxation returns by £6,000 a year. I am advised that it would cost the Treasury at least £100,000 a year and, while we are quite ready at all times to consult with manufacturers of motor bicycles, and have continuously done so, and we are now proposing to change the method of assessing taxation from weight to engine cubic capacity. I am afraid, in view of the heavy loss involved, we cannot accept the Amendment.
Amendment negatived.
The following Amendments stood upon the Order Paper: In page 9, line 17, at the end, to add the words:
"and by the substitution in paragraph 6 thereof of the words—
'in the case of any vehicle the engine of which was constructed not less than five years before the date of the issue of the licence duty shall be seventy-five per cent. of the duty otherwise chargeable under the paragraph.'
for the words—
'if any person proves to the satisfaction of the authority charged with levying the duty that he has paid in respect of any vehicle the duty chargeable under this paragraph, and that the engine of the vehicle was constructed before the first day of January, nineteen hundred and thirteen, he shall be entitled to repayment of twenty-five per cent. of the duty paid.'"—[Mr. Guy.]
In page 9, line 17, at the end to add the words:
"and by the substitution in paragraph 6 of the said Second Schedule, of the words—
'Exceeding 6-horse-power and not ex-ceding 12-horse-power:
£1 for each unit or part of a unit of horse-power in excess of 6-horse-power.
Exceeding 12-horse-power and not exceeding 20-horse-power:
£12 and 10s. for each unit or part of a unit of horse-power in excess of 12-horse-power.
Exceeding 20-horse-power:
£16 and 5s. for each unit or part of a unit of horse-power in excess of 20-borse-power.'
for the words—
'Exceeding 6-horse-power:
£1 for each unit or part of a unit of horse-power.'"—[Major Thomas.]
The Amendments next upon the Order Paper standing in the names of the hon. Member for Edinburgh Central (Mr. Guy) and of the hon. and gallant Member for Kings Norton (Major Thomas) should be moved as new Clauses.
Motion made, and Question, "That the Clause stand part of the Bill," put, and agreed to.
Clauses 12 (Effect For Purpose Of S 14 Of 12 And 13 Geo V C 17 Of Change Of User, Etc, Of Mechanically Propelled Vehicles), 13 (Income Tax For 1932–33) And 14 (Higher Rates Of Income Tax For 1931–32) Ordered To Stand Part Of The Bill
Clause 15—(Tax In Respect Of Voluntary Pensions)
Motion made, and Question proposed, "That the Clause stand part of the Bill."
This Clause is aimed at getting rid of a decision of the courts in a particular instance in which a schoolmaster was held not to be liable to pay Income Tax because a pension which he enjoyed was one that could be discontinued at any moment, and, accordingly, there was no contract under which he was entitled to the particular income. That being so, the money that he received was a voluntary payment, and, in accordance with a well-known principle of law, the money was deemed already to have borne tax in the hands of the person who paid the so-called pension. The situation that arises if this Clause goes through is that the money paid in the hands of the payee will bear taxation, but the question arises what will happen to the payment made by the organisation that makes the payment because, if it is one that bears tax, they will be obliged to deduct the tax in making the payment, in accordance with the regular rule of deducting tax at the source. The effect would be that the money would pay tax twice over, and I am sure no one desires that that should happen. I can well see that, in the case of some pensioners, this Clause would have a beneficial effect from the point of view of the Revenue, because it might be that the pension would be taken into account by the person receiving it, and, as a result of that, the individual might become liable to pay Super-tax, or even a higher amount of Super-tax, but it is very important that we should observe whether the amount is to be de-ductable by the person who pays it, because, if it is, the effect of the Clause would be that we should be transferring the burden of taxation from the person who paid to the person who received, and the Revenue would not be benefiting at all.
There is another matter that is, perhaps, worth more than a passing thought. This, I believe, is the first occasion upon which this House in its Income Tax legislation has proposed to tax payments which are other than payments made under contracts. One of the learned lords who gave judgment in the case to which I have referred called attention in another place to that well-known principle. That being so, we ought to be quite sure what we are doing, and we should realise that we are introducing for the first time into the Income Tax Acts the principle that in some instances voluntary payments are to be taxed. This instance may be a perfectly good one. I am not constrained to question that. But I do not think we ought to let this slip through without the attention of the Committee being pointedly called to the exceptional principle which I think we should be establishing if the Clause went through in its present form.I wish to support everything that has fallen from the lips of my hon. and learned Friend. I certainly think we must have it from the Financial Secretary that, if this tax is taken off an income which is given voluntarily, suitable relief should be given to the person who pays the pension; otherwise, as I see it, the Revenue would get the tax twice. But I think I understand what is behind the Clause. In certain oases Government employés receive their pensions voluntarily, and the State now seeks to safeguard itself so that it can take, as hitherto, the tax off their pensions. But I take grave exception to the words in Sub-section (2):
That is a thoroughly uncandid and dishonest statement, and I hope the Financial Secretary will take those words out on Report. What doubts can there be? I watched the Beloe case through the "Times," but I know nothing about it except as a reader of the "Times." Here was a taxpayer who appealed to the Commissioners. They had no doubt about their decision. The State appealed to the High Court, and the judge had no doubt. He gave his decision in the same way. The State appealed again and the Court of Appeal had no doubt. They gave their decision just as it had been given in the two previous instances. The State then dragged this man to the House of Lords, which for the fourth time gave a decision the same way. Where is there a doubt? In a Statute like this, it ought not to be possible to put in words that are uncandid and dishonest. We shall pass the Clause, but in the interests of candid and straightforward statement, especially in an Act of Parliament, the Financial Secretary must take out these words. There is no doubt to be removed. The fault lies entirely with the Revenue authorities, which have been under a misapprehension for years as to their powers. I do not like to find fault with the Treasury draftsmen but the reason is the unlucid way in which Acts of Parliament are drafted. In Clause 17 there are 200 words without a full stop. In the first Sub-section of this Clause there must be 150 words without a full stop. Macaulay, who was a Member of this House, would turn in his grave if he could see a sentence like this. There is no reason why the Treasury draftsmen should not break up a Clause into two or three paragraphs. We should not then have all the trouble we have in understanding Acts of Parliament, and it would not be necessary to put a taxpayer to the expense of having these cases carried through to the House of Lords. It is a shameful thing that a man should be taken to court four times to have a ease decided when there is not the slightest doubt."for the purpose of removing doubts."
I should like to put a question to the Attorney-General as to the words
7.30 p.m. In certain big institutions, where there are some thousands of members, they arrange among themselves to have a benevolent fund for any member who, through ill-health or old age, comes upon bad times, and they subscribe to the fund. When a member or ex-member of the Association applies for relief and obtains an annuity or a pension, is it taxable under this Clause? Can it be said that the trustees of the fund are in any way the employers of the man who applies for relief? I shall be grateful if the Attorney-General can give me a definite lead in the matter, because it as of very great importance to people who have very little of this world's goods left, and whose only claim upon those funds is need and a good record. I hope that the Attorney-General will tell us whether those poor people are to be made to pay Income Tax or not."by the person under whom he held the office or by whom he was employed."
It seems rather incredible that the relief granted from these funds could raise the income of a person to £120 a year. If that were so, they could hardly be described as ordinary benevolent funds. I think that in most cases the grants would not be sufficient to raise the income of the persons concerned to the taxable limit.
I was asking the learned Attorney-General to reply, and not the hon. Member opposite.
I am not attempting to reply on behalf of the Attorney-General, but as a Member of this House I am entitled to make a reply. It seems to me that the hon. Gentleman has put an absurd proposition. He is actually saying that here is a benevolent fund to which people make a contribution, and asking whether the money received by way of annuity, or relief or assistance should be exempted from taxation. Every hon. and right hon. Member knows very well that if there are funds of that description, they are not able to afford such relief, assistance and annuities as would raise the income of thy recipient to the level of taxable income. The whole point appears to be absurd.
I wish to associate myself with what has been said by my hon. Friends with regard to the Clause, which seems to violate the great principle which underlies the collection of Income Tax in this country. Our Income Tax law, with the enormous taxation it raises, is the envy of every other civilised country of the world, and anything which will in any way alter the basis upon which Income Tax in this country is levied is a matter which the House of Commons should very jealously guard against. The basic and cardinal principle of taxation under the Income Tax Acts is that income only should be taxed, whereas under the present Clause it is provided that something which the courts have definitely held is not income is to be deemed to be income. That is a step which we should hesitate to take. There is first the question, to which my hon. Friend alluded, of the danger of double taxation. If the income out of which those voluntary pensions are paid is to be relieved from taxation, it may very well be that the revenue may suffer. For example, if a pension is paid by a company, the company will be able to charge in its expenses which are relieved from Income Tax the amount of those pensions. The tax on the pension itself may be upon a lower scale than 5s. in the pound or whatever the Statute rate of the day may be, and there may well be a substantial loss to the State by reason of this proposal if companies who pay voluntary pensions are entitled to include them in their expenses so as to avoid double taxation. We then come to the question of the ordinary private individual who pays his secretary, gardener, butler, or any servant a voluntary pension. If the voluntary pension in question is now to be subject to Income Tax, surely it is not fair that the private individual should not be allowed to make a deduction from his return in respect of the amount he pays as pension. Otherwise the State would clearly be getting double taxation. I should also like either the Financial Secretary to the Treasury or the Attorney-General to state the position with regard to lump sum gratuities. The position is by no means clear under the Clause. The Committee is entitled to have the point cleared up. I should further like to know the position with regard to a pension or annual payment, such as a grant from a pension fund which is not a superannuation fund. Many people, without receiving contributions from their employés, themselves contribute towards a fund out of which they can pay their servants when the time arrives for them to retire. What will be the position of a superannuation fund of that kind? All those points are points of substance, and before the Committee alter the basis upon which the wonderful success of our Income Tax has rested for so many years, and allow something which the courts have held is not income to be deemed to be income, we ought to be fully satisfied as to the advantages of the Clause.
I wish to associate myself with the expressions of opinion of my hon. Friends near me. It is really unworthy of the House and of the Government to introduce such a Clause. I wish to ask the Financial Secretary if any estimate has been made as to the amount of tax which is likely to accrue to the country if the Clause is allowed to remain in the Bill. I cordially agree with the opinions expressed concerning voluntary payments. The cases sought to be met are extremely rare, and it is not worth while the Government pursuing the matter. Supposing an institution, realising that in future the pension or annual payment was to be taxed in this manner, said, "Very well, we will not make a pension or annual payment, but we will vote a gratuity each year." Take the case of Bradfield College. Supposing they had said that each year, "We will devote so many hundred pounds to the persons concerned." It would cease to be an annual payment, and would become a gratuity from time to time. Would those circumstances be covered by the Clause? I hope that the Government will see their way to withdraw the Clause.
There has been a good deal of misapprehension about this Clause, and my hon. Friend the Member for Farnham (Sir A. M. Samuel) in particular seemed to engender a great deal of heat about the provisions of Sub-section (2) of the Clause, which he would not have felt justified in doing if he had been more perfectly informed as to the scope of that Sub-section. I do not propose to follow him in his discussion of the way in which Acts of Parliament are drafted. We have all passed our criticisms upon the way Acts of Parliament are drafted. We have all found ourselves more or less powerless to suggest any improved methods, although we make many sweeping and general statements about the matter. But this is certainly not an occasion to enter upon the entertaining topic as to improvement in the drafting of Acts of Parliament. As to Clause 17, I have, therefore, nothing to say.
To come back to Clause 15, let us try to understand the scope and intention of the Clause. First of all, let me say a word as to the case which was taken to the House of Lords—the case of Brad- field College and the gentleman who had been headmaster of the college and had retired, I think, owing to ill-health. Let me correct the statement, or the inference from the statement, made by my hon. Friend the Member for Farnharn. He suggested that the Inland Revenue authorities dragged this poor gentleman up to the House of Lords, I think he said through four courts, as though they made him the victim of some rapacity on their part. When the question as to whether a voluntary pension was subject to tax was raised by Mr. Beloe or his advisers, it was a novel point, because such voluntary pensions or allowances had been taxed in exactly the same way as contractual pensions or annual payments were taxed until the point was taken by Mr. Beloe. But the point having been raised and an interesting legal question having been mooted, the Inland Revenue authorities agreed to pay the costs of the litigant as between solicitor and client right up to the House of Lords so that this poor gentleman, who in the words of my hon. Friend was dragged up to the House of Lords, was certainly not a victim as far as any costs were concerned. The result of the decision in the House of Lords was really to cause a new departure. Voluntary pensions or annual payments, once you got to the point of their being pensions or annual payments, had been treated in precisely the same way as contractual pensions or annual payments. I do not think that any hon. Member in the Committee would have it otherwise. Let me take, for example, the cases of two men. One man is employed by a company which has a contributory pension scheme, that is to say, a scheme under which contractual rights to a pension are to be enjoyed by the employé upon retirement. He is taxed. The Bradfield College case has not affected his liability to taxation in the least degree. His friend, however, is employed by a company which has not a contributory scheme. He retires at a certain age, and his employer, not being under any contractual obligation, agrees to pay him a pension or an annual payment, which cannot be enforced as against the employer, but which the retiring servant enjoys for the rest of his life, and enjoys it under the good will of his late employer. He, according to the decision in the Bradfield College case, is not to be subjected to tax, and I defy anybody in the Committee to suggest any principle, any distinction or any equity which requires one who is employed by a company which has a contributory scheme to be taxed, and the other who is employed by a company which has not a contributory scheme to be let off. Before taxation of what is called a voluntary payment can be imposed it is necessary to arrive at a decision as to whether it is a pension or an annual payment. If it is a pension or an annual payment and not merely a gratuity, given once as an act of charity or kindness, it has always been regarded as liable to tax. It has never been thought to make any difference whether there was or was not a binding contract to pay the pension or annual payment, or whether there was any obligation that could be enforced in a court of law. The Bradfield College case proved that there was a defect in the letter of the law that would have led to inequality, and the first part of Clause 15 deals with that case. It is for the Committee to decide whether or not in the circumstances that I have mentioned it is the proper course to make the law what it has always been supposed to be, both in practice and in the intention of those who have administered the law. It would produce a condition of inequality between different taxpayers if a voluntary pension or annual payment was to be free from tax, when a contractual pension or annual payment was to be subject to tax. Let the Committee once more realise that in what I have suggested for their consideration I am assuming that it is a pension or annual payment. Of course that will always be a question which the commissioners will have to decide upon the particular facts of the case. When we come to Sub-scetion (2), we are dealing with a different subject matter. We are not dealing with a pension or annual payment that may be paid by a company or some individual but to a class of pension payable to retired civil servants, either in the Home or the Colonial Civil Service. I very much doubt whether pensions or annual payments of that sort are affected at all by the decision in the case of Bradfield College. The advice which I think has been re- ceived is that the case does not touch these pensions. I would ask the Committee what justification was there for the language which my hon. Friend the Member for Farnham used when he charged the Government with being un-candid and dishonest because they preface Sub-section (2) with the words:It has been suggested by some ingenious person that now this question has been mooted even the pensions which retired civil servants receive—which, as everybody knows, are not contractual and cannot be enforced in a court of law—would escape tax. I do not believe that they would escape tax, but it has been suggested that they might. Nobody believes or contends that they ought to escape tax. It is only in theory that they are voluntary payments that cannot be enforced in a court of law, because everyone knows that the pensions that are paid to retired civil servants are just as good for the lifetime of the retired civil servant as if they were contractual pensions and capable of being enforced in a court of law; but to prevent litigation, which might lead to some unfortunate taxpayer being dragged up to the House of Lords, through four courts, for the benefit of the lawyers, and in order to remove doubts, it has been thought right to say in Sub-section (2):"For the purpose of removing doubts."
As everyone knows, the pension of a civil servant may be discontinued in certain cases, which are very exceptional in character and which I do not need to specify. The hon. Member for Farnham, having charged me and the Government with being dishonest, has been particularly careful not to wait for the reply. I hope the Committee will not agree with the hon. Member when he charges the Government with dishonesty. I can give the assurance that Sub-section (2) has nothing in the world to do with the case of Beloe. It is merely a case where opportunity has been taken to set at rest the hopes of, perhaps, some ambitious lawyer, shall I say, who scented a nice piece of litigation. Sub-section (3) provides that earned income shall be deemed to include any annuity, pension or annual payment to which this Section applies. Sub-section (3) is wholly in favour of the taxpayer. It provides that the appropriate Section of the Income Tax Act shall be interpreted so as to enlarge the ambit of the expression "earned income.""For the purpose of removing doubts, it is hereby declared that the expressions 'annuity' and 'pension' in the charging provision of Schedule E and in Sub-section (1) of Section seventeen of the Finance Act, 1923, include respectively an annuity and a pension which is paid voluntarily or is capable of being discontinued."
I understood that Sub-section (3) was put in as a consequence of a request made from this side of the House when the Financial Resolution was in Committee. We are very grateful to the right hon. Gentleman for giving that definition in the Bill, but we should like to know whether the expression "earned income" also covers covenanted pensions. It is not made clear whether covenanted pensions are included in the definition of "earned income."
Covenanted pensions are already dealt with in the definition of "earned income." The only thing that is necessary has been to provide that uncovenanted or voluntary pensions shall also be included. The hon. Member is right in saying that the point has been raised from the benches opposite. I can give him an explicit assurance on the point that he has raised. The hon. Member for Chislehurst (Mr. Smithers) asked whether the persons to whom an industrial benevolent society applied its benevolence would be subject to tax. I agree with one hon. Member opposite that it is a little difficult in one's conception of poverty and benevolence to see how anyone who enjoys such benevolence as that to which the hon. Member referred could come within the reach of Income Tax provisions, but assuming they do, I can assure my hon. Friend that a benevolent fund of that sort would not be the person under whom the pensioner held office or by whom he was employed. He need have no anxiety on that point. The hon. Member for South Kensington (Sir W. Davison) asked whether a lump sum gratuity would be touched by this provision. It is a question partly of law and partly of fact whether it is a pension or an annual payment, or a lump sum gratuity. If it is an annual payment, on the facts of the case, it will come under the provision. If it is merely a lump sum gratuity such as you give to a servant who leaves you once and for all, it is not, and it is difficult to see how it could be, an annual payment.
The case I had in mind was that sometimes when an office is terminated a man may get £2,000 or £3,000. Presumably, he will invest that and will pay Income Tax on it. Is that the sort of case that is contemplated?
If it is a lump sum gratuity of £2,000 or £3,000, quite clearly it cannot be a pension or annual payment. He invests the sum and receives income on it, on which he pays Income Tax.
Exactly.
So far as the £2,000 or £3,000 is concerned it is a gratuity and not an annual payment, on the facts mentioned. Now I come to the position of the non-contractual pensions. I have tried to explain that we are putting the non-contractual pensioner on the same basis as a pensioner under a contractual scheme, and I do not think that any hon. Member will see anything wrong in principle in putting them on the same basis. The question of double taxation arises. In the case of Bradfield College there was no question of double taxation. Bradfield College is an educational institution, a, charity, and does not pay Income Tax. Therefore there was no case of double taxation in that case, but there might be double taxation in the case of a company that makes one of these payments to a former employé. When a company is carrying on business such pensions or annual payments have always been treated as proper deductions from profits and they will still be treated as proper deductions by a trading company.
Suppose, however, that an individual wanted to deduct from his profit, from his income, the pension which he pays to a butler, or a gamekeeper, or some other personal servant. That could not be deducted any more than any of us could deduct the money which we are at present paying to our servants, or the money which we pay to our tailor for the clothes that enable one to come to the city decently clad. We all of us experience double taxation in one sense. Taxation is never ending. People who employ us pay taxation upon their income. People whom we pay out of those sums which we receive pay taxation upon their incomes, and so it goes on, ad infinitum. The answer is that if it is a trading concern that is making these payments there will be allowance but if it is a private individual the deduction cannot be made. I hope that I have answered the questions put to me by hon. Members and by the hon. Member for Farnham.I did not hear a word of the reply.
The hon. Member who is now in his place, says that he did not hear a word of what I have said. I propose to spare the Committee a repetition of what I have said for his benefit. He will have to read it to-morrow in the OFFICIAL REPORT.
8.0 p.m.
I am afraid that the Attorney-General has left me completely unconvinced. Perhaps he will not be surprised at that. I suppose the sort of argument that he has advanced will be advanced on Friday in support of another Bill. His argument is that voluntary pensions have always been regarded as liable to tax, that no one ever thought that it made any difference whether they were contractual or not, and because it has been found according to law that they ought not to be taxed the law is to be altered to bring them in. Very much the same argument I suppose will be made on Friday. The right hon. Gentleman is stretching the point much too far. He did not tell us whether there is any definition of what is a pension. In the Clause it says:
We know how the Income Tax people can stretch these matters, and that may be stretched to mean a very small amount of employment, possibly a gift, or a sum which most people would consider as an allowance. The Clause is opening a door which a grasping Chancellor of the Exchequer in coming years will push open. It is wrong this year to make such an alteration in our Income Tax law when the whole question of Income Tax legislation is being considered by the Committee set up by the right hon. Member for Epping (Mr. Churchill). Surely we should hold our hands for the moment. The Attorney-General did not indicate that there was any money in this. He did not give us any idea as to how much was involved."Any pension or annual payment. … paid to him …by the person under whom he held the office or by whom he was employed."
There is certainly money in it, but of course it depends on the extent to which people take advantage of the decision in the Bradfield College case. Let me give an illustration of the way in which advantage might be taken of that decision. A director of a company holding the majority of the shares, the controlling interest, might resign his position as a director, taking care that he was voted an annual payment, a substantial sum, by way of pension, which he would call a gratuity. He might escape Income Tax on the whole of that sum, and having control of the company he would be able to vote himself that sum year after year. If many people did that a large sum of money might be involved. There is certainly money in it. This Clause is put in to protect the revenue.
If the learned Attorney-General gives a case by which the existing law can be evaded and does not take steps to see that it is put right, naturally some clever people will think of it. But has anybody thought of it before?
Oh, yes.
I am not yet convinced that there is much money in it. It is one of those legal tricks which ought not at the moment to trouble the Committee. The Attorney-General has not made out a case on financial grounds. He has made out a case on the ground that people who have contractual pensions pay Income Tax and that those who get pensions on a non-contractual basis get off. If we are going to start legislating on those grounds I shall be prepared to give the Attorney-General in numerable other cases on which he will be glad to legislate. I protest against this Clause. I think it is wrong to take advantage of the decision in the courts to try and reverse something which has been the practice for a long time.
As I understand it, a voluntary payment which is not a legal pension cannot be deducted by a company from their expenses on which Income Tax is not paid, but if you now make this a legal payment, on which the voluntary pensioner has to pay tax, it will be open to a company in the future to add such pensions to their expenses on which they do not pay Income Tax. A company always pays Income Tax at the standard rate 5s. in the £, but probably the pensioner will have allowances for family and may only pay 2s., 3s. or 4s. in the £. In that way I think it may result in a loss instead of a gain to the Revenue.
Question, "That the Clause stand part of the Bill," put, and agreed to.
Clause 16—(Additional Deductions In Case Of Machinery And Plant)
Motion made, and Question proposed, "That the Clause stand part of the Bill."
I should like to ask the Financial Secretary one or two questions on this Clause in order that the Committee may understand what they are being asked to do. This Clause deals with the question of deductions in the case of machinery and plant, and last April Lord Snowden in his Budget speech said that he thought that in proper cases deductions might be made before arriving at the amount of the taxable income of the company. This Clause lays down the standard upon which these allowances are to be made. There is to be an additional deduction equal to one-tenth of the amount of the deductions already allowed under existing rules. As I understand it, that sum is allowed in order that the trader may keep his plant and machinery in a better state, more up to date and more efficient. Is there any guarantee that the money so allowed will be expended upon the purpose for which it is allowed? Is there anything to stop the money so allowed, tax free, being paid out immediately in dividends, or in dividends after a series of years when it has been accumulated? It does not seem fair that any particular Income Tax payer should get this special benefit unless there is a corresponding onus upon him to put the money so received to a certain specified use.
The argument is put forward that there should be a greater allowance in the case of machinery, but it is highly undesirable that this type of allowance should be made unless there is some control to ensure that the money is expended in accordance with the purpose for which the allowance is made. We have a strong objection to this type of allowance being made unless there is some provision to enforce the proper use of the money allowed. We put down an Amendment to this effect to this Clause, and I hope that the Financial Secretary before Report stage will provide some sort of a check in order to assure the Committee that this money will be used for the purpose for which it is obviously and clearly intended to be used, and will not be used to build up larger profits over a period of time and then being taken out of the business in the way of dividends. I hope the Financial Secretary will not tell us that we can rely on the manufacturers to see that the money is so expended. The question of reserves is a very thorny one, and there has been a great deal of criticism in the past because people have distributed money which ought to have been used for reserves. If we are going to make them this gift, I suggest that there should be some provision by which it can be ascertained whether those who get the benefit of this money are giving the services for which we are entitled to ask.Here again in this Clause it is just as well for us to know without doubt what we are going to do. In the case of Schedule D we have the word "obsolete," applicable for arriving at a deduction, and we ought to know whether it is going to have a limited meaning or not. I think it is necessary in order to avoid litigation that we should have a much closer definition of the word "obsolete" as it affects replacement. There is a great deal of confusion between the word "obsolete" and the word "obsolescence." In the ordinary arrangements of business there is a growing practice of substituting motors for horse vehicles. A horse vehicle may not be worn out, it may not be obsolete, but only obsolescent and it is to be replaced by a motor vehicle. We should also know exactly how this matter will stand when we are dealing with machinery and plant. There is considerable indefiniteness about the words "machinery and plant." Do they apply to a retail shop, like a shoe dealer's shop and the fittings of his windows, or does the Clause apply to the expensive fittings of a jeweller's shop window? I am not condemning or criticising the Clause but I think these points should now be made clear in order to avoid litigation.
The questions which were raised by the hon. and learned Member for East Bristol (Sir S. Cripps) would have arisen if the Amendment of the Opposition had been in order. As he knows, the wear and tear provisions in the Income Tax laws have always been claimed to be insufficient to the wastages which were actually taking place. The object of these Clauses was to do something to remove that grievance which had been pressed on Lord Snowden. When Lord Snowden introduced his Budget in April of last year he was strongly pressed by Amendments, moved I think by the present Home Secretary, but he was not able to make any concession then, though he realised that there was a great deal of substance in the case then put forward. He considered the question again in his emergency Budget later in the year, and it was in that Budget that he made the promise which Clause 16 implements.
The hon. and learned Member asks, how are we to ensure that the money set free by this remission will actually be expended for the purpose to which it is ostensibly devoted. First of all we can be sure that in the past sums more than equal to the amounts which are covered by these allowances have in fact been actually expended. The principle underlying this allowance is the principle that it is an allowance in respect of the annual using up of the existing plant, and it, relates to expenditure on plant which has already been incurred, and not to future expenditure in replacing plant. As regards repairs of machinery or plant of course the cost of this is allowed as expenses quite apart from wear and tear allowance.Surely the object of making this extra allowance is that the owner of machinery may build up a fund which will replace that machinery at the time when it becomes necessary so to do. Take the common case of a locomotive on the railway. It has a 30 years life. There is a 3 per cent. sinking fund put aside every year and invested in reserves. Up to the post-War period there was no obsolescence fund to accompany that, though there should have been. That however is another point. But that 3 per cent. put aside each year, is for the purpose of acquiring a new locomotive or keeping the existing locomotive in a new state of repair annually. The fund may well be accumulated and may not be used for that purpose. It may be distributed as dividends instead of being used for that purpose, and the machinery would be allowed to get out of date. I understand the object of the Clause is to stop that. It cannot be stopped unless there is some provision that the 3 per cent. is put to the proper purpose.
It seems to me that the Clause actually defeats the declared object of Lord Snowden.
This double questioning on a technical subject causes some difficulty. I hope that the Clause does not defeat Lord Snowden's intention and promise. In a matter so technical I must be guided by my advisers and I am assured by them that the Clause fully carries out the intention of Lord Snowden, which was in a non-technical sense that a relief roughly equivalent to the extra 6d. of Income Tax should be granted to productive industry. As to whether the actual technical language of the Clause assures that or not I feel I must rely on my technical advisers. The further point was raised that the sums allowed for this may in fact not be put aside but distributed by a company, and the company thereby may be allowed to go to pieces. The allowance is an allowance for the wear and tear of existing plant, regardless of whether it is replaced or not. If the allowance were not made the profit would not be a true profit. The true profit excludes of course the element of capital wastage involved in the using up of machinery.
It is impossible by legislation so to draft a Clause as to defeat not merely human crime but human folly. I do not think it is possible to devise a formula which would do that. I do say that the Amendment drawn up by the hon. and learned Member for East Bristol (Sir S. Cripps) would not in fact have prevented what he seeks to prevent. However, I should not be in order in discussing that now. I have been asked two specific questions by my hon. Friend the Member for Farnham (Sir A. M. Samuel). He asked does the Clause apply to cases where the element of obsolescence enters, such as the case of a company which is replacing its horse traction by motor traction. They would in that case get the obsolescence allowance as a business expense on discarding the horse traction units. My hon. Friend asks further what about the depreciation of the plant, and whether the Clause covers plant in a jeweller's window, show cases and so on. As I am advised it would not cover that plant because it is not plant used in productive industry. It could not be said that plant in a jeweller's window was plant used in productive industry. But I am prepared to go into the matter further between now and the Report stage.There are many shoe manufacturers who have retail shops associated with their factory, branches which are not part and parcel of the factory. The fittings of the shoe shops selling the products of the factory, I submit, would be plant which ought to come under this Clause. The distributors and the producers are one and the same firm.
My hon. Friend, I think, is right, and I was wrong. I have consulted my advisers further, and I am advised that the Clause would cover even the point that my hon. Friend has in mind. I hope that that statement meets his case.
I am not rising to increase the embarrassments of the Financial Secretary, because we all feel that he is dealing with these matters in a courteous and most efficient way. But I want to put one point. It may be that the Amendment put on the Paper by my hon. and learned Friend the Member for East Bristol (Sir S. Cripps) would not meet the point that he desires to meet, but I suggest that it must be within the competence of the Commissioners of Inland Revenue to see that the rebate which is allowed is used for the purpose for which it is intended. Those who were Members of the last Parliament will recall that some of the Liberal party including, I believe, the hon. Member for South West Bethnal Green (Sir P. Harris) put down an Amendment to the previous Finance Bill to secure this point and that there was a considerable scene in the House in regard to it. The parties then were so evenly divided that one did not know what was going to happen in the Division Lobby and a promise was made by the then Chancellor of the Exchequer that he would give a rebate in the next Finance Bill. If Parliament was prepared to go to the length to which it did go, in order to secure this object, surely it is reasonable to ask that the Commissioners of Inland Revenue should take the next step and see that this additional 6d. is used for the purpose which Parliament intended. It should not be beyond the wit of the Commissioners to achieve that end.
Several Royal Commissioners have reported on finance and industry in this country to the effect that it is a regret-able development that companies nowadays are not so scrupulous in laying aside reserves as they were before the War and that in many cases companies find themselves compelled to go on to the open market for money—a course to which they would not have to resort if they had been sufficiently parsimonious in putting money to reserve and not distributing it in dividends. It has frequently been stated that the distribution of reserves in the form of dividends is a method which has been used to "bear" the shares of certain concerns so that those who held them might get out in profitable circumstances, leaving the future shareholders with a concern which had inadequate reserves.All traders are not limited liability companies. There are 500,000 shopkeepers, traders and producers who are not limited companies. The hon. Member talks as if there were no producers in the world except limited companies.
Because the limitations of human language will not permit me to include everybody in one sentence, the hon. Gentleman must not assume that those whom I do not mention I have not in mind. At the moment I was dealing with limited liability companies and not with private proprietary concerns. If the hon. Member wishes to deal with private proprietary concerns, the opportunity is available for him to do so. The point which I was attempting to make was that, if this tendency which I have described has developed in British industry, and if the present powers for laying aside reserves are not adequately used, and if Parliament is going to make a gift or is going to allow an additional 6d. in the pound for an obsolescence fund, surely it is reasonable, to ask that steps should be taken to see that that allowance is used for the purposes for which it is intended. We are not going to press this matter to a Division if we can get something like a satisfactory reply. We hope that the right hon. and gallant Gentleman will be able to state that he has sufficient administrative powers to enable him to see that this is done, or that appropriate words for that purpose will be inserted during the Report stage to meet our wishes.
8.30 p.m. Our wishes are very modest. We desire simply to ensure that the money which we are voting shall foe used as Parliament intends it to be used. I agree that in respect of this 6d. we are asking for something which could as appropriately be asked for in respect of the whole rebate. Probably, without giving this additional assistance at all, it could be argued that the rebate allowed under previous Finance Bills ought to be safeguarded in the same way and that consequently we are asking for something which need not necessarily attach itself to this 6d. in the pound. We are prepared to concede that point but we want to seize this opportunity to try to correct what many of us regard as the regrettable tendency of modern industry to distribute funds which ought properly to be conserved for replenishing the technical resources of the country.I have had practical experience in regard to machinery nearly all my life. This percentage is an allowance on capital charge in respect of machinery and it has been proved beyond doubt on many occasions that the 7½ per cent. was not sufficient to cover the wear and tear in each year—that is the money actually spent during the year on replacing certain parts of the machinery with a view to ultimate complete replacement. The amount was gratuitously increased, but as a practical man I can say that, even now, it is quite little enough to answer the purpose for which it is intended. As for putting it aside for any specific object or setting apart an amount and saying that it is to be used for a particular class of machinery, I regard that as an utter impossibility. This is a distinct allowance made for repairs and renewals. It answers its purpose very well and I am sure that the country will be very sorry if the Committee make an attempt to allocate it to any specific purpose.
If I may deal further with the questions so courteously put by my hon. Friend the Member for Ebbw Vale (Mr. A. Bevan), I think in the first place he himself made the point that the conditions which he desires to attach to this extra 6d. might as legitimately be attached to the whole of the Income Tax allowance. May I suggest further that it might more legitimately be attached to it, because this 6d. is not a gift as he suggested but an extra allowance on the sums which one may allow a proprietor or operator to deduct before he puts in a return that he has earned so much profit. Naturally, any manufacturer desires to deduct on the whole a larger amount than the Income Tax authorities are willing to allow and it has always been a bone of contention between manufacturers, particularly up-to-date manufacturers and the Income Tax authorities, that the allowance given by the latter in this respect was ridiculously small, and in fact meant a life of machinery far greater than any up-to-date manufacturer allows. I have been much struck by the representations made to me by mine-owners of a progressive kind who say that the replacement of underground machinery ought to be far more rapid than the replacement allowed for in the deductions given by the Inland Revenue. This proposal makes a step towards meeting that case. As I said at the beginning, some may doubt whether this step is sufficient but it is all that we can do in these hard times. Lord Snowden, when he made his statement in the House of Commons on 10th September, 1931, addressed himself to this matter as a general problem. He said:
He then indicated that although he found the immediate problem of dealing with this whole question insuperable, he agreed that it would be actually injurious to employment to stiffen the Income Tax impost and accentuate the drain made by the Income Tax on the capital of the country by demanding that sums which every manufacturer reserves from profit should be treated the same as distributed profit for the purposes of the tax. I do not think I can fully meet the point made by my hon. Friend the Member for Ebbw Vale as to whether, by administrative action or by inserting words on Report, we can secure the ends which he desires, but I am confident that those ends are secured and more than secured by the fact that our experience and that also of Lord Snowden has been that by manufacturers these sums are already regarded as barely adequate to cover a reasonable depreciation and that in the case of modern and up-to-date firms they depreciate their machinery and replace it at a greater rate than that which is allowed even after the increase which we have in view. I think that at the present the average of firms are quite sufficiently convinced of the necessity of writing down their plant and renewing their plant. I think the pace at which renewals has to take place is increasing constantly and far faster than at present we see our way to compensate for by an increase in these wear and tear deductions. With that I am afraid I must ask my hon. Friend to be content. I think the force of circumstances is driving these replacements forward, and I think that in no case will your progressive firm do what he fears, namely, keep this money and distribute it as profit instead of using it for replacement of plant and the odd case of the firm which in the face of sound actuarial estimation and sound economy does not make allowance for the depreciation of its plant and gives this money away I do not think can be met by legislative formulae drawn up by this Committee. The proof of that is, I think, that if the Amendment had been called which has been carefully drawn up by my hon. Friend it did not meet the case which he had in view."The problem of giving some relief on sums placed to reserve as the Committee know quite well has often been discussed in the House of Commons and I have on many occasions expressed sympathy but up to now we have always found the practical difficulties to be insuperable."—[OFFICIAL REPORT, 10th September, 1931; col. 304, Vol. 256.]
Question, "That the Clause stand part of the Bill," put, and agreed to.
Clause 17—(Extension Of Period For Carrying Forward Losses In Certain Cases)
I beg to move, in page 12, line 7, at the end, to add the words:
The purpose of the Amendment is to remove an ambiguity which may arise as to the benefits conferred on a trader by the terms of Clause 17, and also to ensure that the trader shall have the maximum benefit intended to be conferred upon him by this Clause. To understand the situation, one has to remember that as the law stands at present, if a trader should incur a loss in one particular year, he is entitled to deduct that loss from any profits which may be made during the following six years. These profits, of course, are arrived at after making provision for depreciation. Clause 17, as I understand it, gives an additional benefit to the trader in the respect that it entitles him to a deduction or set-off of the additional amount which he would have been entitled to set off had no provision been made for depreciation before arriving at the profits. That additional deduction may be set off against profits during any subsequent year and is not confined to the six years following the date when the loss was made. Therefore, we have it that there are two separate rights which arise to the trader, and the object of the Amendment is that when a year arrives in which the profits are not sufficient to enable him to set off the losses made in the previous year, he is to be entitled to choose which of the losses he may set off against the profits and therefore, if he sees fit, carry forward the others to a subsequent year."(2) Any relief given under Section thirty-three of the Finance Act, 1926, from an assessment shall be given in respect of a loss sustained in any year within the six years immediately preceding the years of assessment before it is given in respect of a loss sustained in any year not within those six years."
As I understand it, two losses for different years might compete with wear and tear allowances against profits in the same year—a loss made more than six years ago, which, being a loss displaced by wear and tear, could be carried forward indefinitely, and a loss made six years ago which might lapse unless it could be allowed in the seventh year. It seems to me that the point is brought out in the Clause, but certainly I am willing to accept the Amendment. It does not change in any way the sense of the Clause, and I should be willing to accept it if my hon. Friend thinks it removes an ambiguity. I should be very glad to do anything to remove ambiguity from this Clause, which, I admit, is extremely stiff reading. We did in fact originally contemplate putting in some provision of this kind, but afterwards we decided that it would be unnecessary. If, however, my hon. Friend thinks it would remove ambiguity, and I understand it is supported by important bodies, I am willing to accept the Amendment.
Amendment agreed to.
Motion made, and Question, "That the Clause, as amended, stand part of the Bill," put, and agreed to.
Clause 18—(Provision As To Permanent Annual Charge For National Debt For 1932–33)
I beg to move, in page 12, line 13, to leave out the word "three," and to insert instead thereof the word "two."
We move this Amendment in order to raise the question of the payments on the National Debt, and we do so because this Budget is defended and explained by its supporters from the one point of view that the resources of the nation must be husbanded and that economy must be exercised in every department of the public service. I am aware, as the Committee is aware, that there are proposals for voluntary conversions of some portion of the National Debt, but while we are waiting for these—and we have been promised them for a very considerable period—the payments continue. No one will deny that the money that was lent both during the War and immediately after the close of the War buys a larger amount of commodities now than it would have done when it was lent. The right hon. Member for South Molton (Mr. Lambert) is never tired of telling us that three sacks of wheat have to be paid now where one sack of wheat used to be paid a few years ago. That puts the case in a nutshell. More commodities have to be given for the same amount of money than were given previously. If any proof of that is needed, you get the further fact, which everyone understands, that in this very Finance Bill, which makes provision for the payments in the Budget, the amount of money that has to be raised is reduced because the State has taken into account the fact that the cost of living has fallen and that, therefore, salaries, wages, and emoluments are brought down. Economists like Sir Josiah Stamp have put on record that money payments made now for money lent for war purposes are, if considered in relation to prices when the money was lent, very much in excess of what they would have been had prices remained as stable. Figures that have been supplied to me show that the highest figure for the National Debt was in March, 1020, when the annual charge was £347,000,000. The index cost of living figure was then 130 above 1914. This year we are paying £308,000,000, and I understand that the index figure is only 46 to 48 above 1914. If you take present prices, the £347,000,000 paid in 1920 is equivalent to £220,000,000 to-day. Therefore, the National Debt interest receivers will get this year a sum which, at the prices ruling to-day, is £88,000,000 more than it would have been if interest rates had been reduced in the same manner that wages were reduced. That is to say, if interest had fluctuated with the cost of living, the money that we are paying this year is £88,000,000 more than is necessary. Suppose that we call it wages or salaries instead of interest, it is £88,000,000 more than it need be. I am aware that the figure by which we are moving to reduce the amount in the Clause is a little more than the sum which I have mentioned, but we merely put it at that arbitary figure in the same way that a token figure is moved when the Government wishes to get a Resolution for a certain purpose. We move this arbitary figure in order to raise a discussion on the question of the rates of interest. I know that it will be said that we have contracted to pay this interest and that the honour of the State is concerned. It is quite true that a contract was made under the conditions that prevailed at the time to pay in some cases very heavy rates of interest. It is also true that contracts were made with a large num- ber of workpeople, and these have had to be broken. At the time of the formation of the National Government last autumn, we were told that the exigencies of the situation necessitated the cuts that it was then said must be made. Although many trade unions, co-operative societies and beneficent bodies have money invested in War Loan, we are prepared to face that situation, and if we were in power we should see that neither individuals nor societies really suffered by the cut that we made—I called this Amendment partly because I did not quite understand what it meant, and I wanted to give the right hon. Gentleman and his friends a chance of explaining it. Now the right hon. Gentleman has explained it, I think that the point that he wishes to raise cannot be raised on this Amendment, or indeed on this Clause at all. If this Clause were not here, it would make no difference whatever to the payment of the National Debt or the meeting of the obligations into which the country has entered. This Clause merely deals with a certain part of the financial machinery, and the result, I am afraid, is that I cannot allow a discussion on the point which the right hon. Gentleman wishes to raise on this Amendment, or indeed on this Clause at all.
The Clause opens by saying:
and so on. Surely this Clause sets out the amount that shall be paid for interest on the National Debt. If it does not, I do not understand the meaning of words."The permanent annual charge for the National Debt for the financial year,"
I admit that the matter is not easy except for people who have been accustomed to dealing with national accounts. As I understand it, this is merely a piece of financial machinery in regard to the keeping of accounts, and, as I explained just now, if this Clause were not passed at all, there would still be the national liability for interest and for any loans which mature, and these would have to be paid whether this charge were here or not. This Clause is part of the financial arrangement made some years ago by the right hon. Gentleman the Member for Epping (Mr. Churchill) when he was Chancellor of the Exchequer, whereby a certain sum should be earmarked for certain liabilities, and the amount here is the amount to be set aside in the national accounts for the purpose of meeting obligations which are partly interest and partly sinking fund.
I would ask the Committee seriously to consider this Ruling. This sum was put in the Finance Bill, and it was put here, I thought, for us to discuss. I have sat through many Debates on this subject. I would call your attention to the fact that in the margin to the Clause the words are:
Then it goes on,"Provision as to permanent annual charge for National Debt for 1932–33."
and so on."Charge of 4 per cent. Consols."
That is the next Clause.
Yes, but I want to ask you whether the words
are merely machinery. Surely the question whether we shall vote £308,500,000 instead of £322,000,000 is one for discussion. There is a difference in the sum."Provision as to permanent annual charge for National Debt"
I am quite satisfied from what the right hon. Gentleman has said that my Ruling is correct. Of course, the marginal note is not part of the Bill. If the right hon. Gentleman reads the note with care, I think he will see that it explains exactly my point. It is not the case that Parliament is being asked in this Clause to vote any money at all. It is merely a question of provision in the accounts for a permanent annual charge, charge which has to be met whether provision is made for it in this way or not.
That is my very point.
—and I am afraid I must, in the absence of any proof to the contrary, maintain my Ruling, because I feel confident that I am right. No doubt the Financial Secretary to the Treasury will be able to tell me that this Clause is not in any way a Clause voting money, but is merely a piece of machinery for the keeping of the national accounts, and that without this Clause at all the interest on War Loans and other Government loans and the debts which mature would have to be paid. In these circumstances the question whether these payments should be made or scaled down is one which obviously does not arise.
This is an exceptionally important matter, and I hope you will allow us to argue it a little. This part of the Bill is headed, "National Debt," just as other parts deal with taxes and the provision of certain money for certain purposes. Here we are making provision for a sum of £308,500,000, and surely the House of Commons is entitled to say whether it shall be that amount or a lesser amount.
The right hon. Gentleman will forgive me for one moment. Of course, he is quite right there, and therefore I am quite prepared to agree that his Amendment is in order, and I called it, though I could not understand the reason for it. I am not complaining that his Amendment is not in order. What I am ruling, and I rule it quite clearly, is that on his Amendment or on this Clause the question of scaling down or reducing the interest on any National Debt cannot be raised.
If I am entitled to move my Amendment, which is for the purpose of reducing the sum of £308,500,000 to £208,000,000, surely that is scaling it down in very heavy fashion?
No. I have explained to the right hon. Gentleman that, even if his Amendment were carried, or if this Clause were not here at all, there would still be the same liability on the Exchequer to pay the interest. I am quite clear about that, unless I can have authority to the contrary, and I maintain that Ruling.
May I put one further question? Do I understand your Ruling to imply that this House has no power whatsoever to effect in any way whatsoever, at any time whatsoever—
No.
I have not quite finished my sentence—this House has no power to alter in any way whatsoever the rate of interest which past Governments have been committed to pay on the National Debt. Is that the point?
Most certainly and decidedly not. The hon. Member ought to know by this time—
I am trying to find out—
—that it is one of the absolute theories of the constitution that Parliament is supreme. That it can be done is clear. Whether a thing can be done is quite a different thing from whether it is advisable or not, but that is not the point at all, and I am not for one moment questioning the right of this House on a proper occasion to discuss the question which was raised by the right hon. Gentleman. All I am ruling is that it cannot be raised upon this particular Clause, and about that I have no doubt whatever.
9.0 p.m.
This Clause proposes to alter the sum allocated for the purpose of paying interest on the National Debt. Instead of leaving it as £322,000,000 it seeks to make it £308,500,000. I understand that this Clause gives the Treasury the power to alter the sum. If the right hon. Gentleman's Amendment to make it £208,500,000 instead of £308,500,000 were carried Parliament would then be given authority under this Act to raise only the sum of £208,500,000. Assume that we allowed this Clause to go unopposed, then every one would, in effect, be agreeing to the larger sum being raised, because Parliament has to sanction it being raised. It may be that the right hon. Gentleman is wrong in arguing that the interest should be reduced, but if he could carry his Amendment in favour of the lesser sum then he would throw on the Government the responsibility of taking some means to reduce the sum to that amount. I submit that he is perfectly entitled to move to reduce it. Otherwise, I cannot understand the Clause coming into the Bill.
Further to that point of Order. This matter is a highly technical one, and very difficult to understand, and perhaps my right hon. Friend the Leader of the Opposition will follow me as I understand it. I am not giving any guarantee that I am absolutely accurate in this sequence, any more than he is, because we are both laymen in these matters, and both liable to make mistakes. As I understand it, the position is this. As a matter of accountancy the fixed debt charge was set up by the Finance Act of 1923, which established a permanent annual debt charge of £355,000,000; but that was a mere drawing together for accounting purposes of liabilities which had existed before it was set up and would exist afterwards. The position is that this Clause does not authorise the payment of any sum. If the Leader of the Opposition will read the Clause through he will see that it does not authorise the payment of a single penny.
It says, "The permanent annual charge."
That is so, "The permanent annual charge," but there is no word, "issue" in this Clause—there is no authority under this Clause for anybody to issue a single penny.
A mere declaration.
It is a very complicated matter, and to laymen like the Leader of the Opposition and myself it appeared at first sight that this would be an appropriate place to raise the whole question of the payment of the interest on War Loan; but I have looked into it myself, because it seemed to me, as it seemed to him, in the first place, that here was an appropriate moment to raise that point. I am now satisfied, however, that not merely is this not the appropriate moment, but that the object the right hon. Gentleman desires could not, in fact, be effected in this Finance Bill. Parliament, of course, could repeal the National Debt, as the Chairman of Ways and Means has said; it is obviously true that Parliament can do anything; but how could Parliament do it? It could do it by the introduction of a special Bill, but it could not do it by altering this Clause, and could not do it by any Clause in this Finance Bill. It is perfectly in order to argue when the general financial provisions for the finance of the year come up for discussion on Second Reading or on Third Reading that too great a burden is being placed on the nation to find these annual sums of interest which the holders of War Loan are entitled to under present enactments.
The right hon. and gallant Gentleman has told us that some time ago the sum of £355,000,000 was fixed for this annual charge, and now we are fixing the sum at £308,000,000. Will he tell us where is the authority of Parliament for the alteration of those sums? If the Government can bring in a Clause to alter the sum from £355,000,000 to £308,000,000, surely the Leader of the Opposition can argue in favour of a lesser sum?
I think I can answer the hon. Member on that point. I have my authority in a letter from the President of the United States of America, showing that there is a liability of £13,500,000 less to the United States, and, as a matter of accountancy, I bring in a Clause showing that that accounting change has been made.
The right hon. and gallant Gentleman says that he has received a letter from the President of the United States. Would it not be open to any holder of War Loan to suggest that the interest should be reduced?
I am not the Chairman of Ways and Means, and I should not think of entrenching upon his privileges, which are to rule what is in order and what is not in order in this House. The hon. Member for Gorbals asked if a permanent charge of £355,000,000 was established by the Finance Act, 1928, as a burden upon the taxpayer. That is not so. What was done was merely as a means of accountancy to bring the various war loans and interest charges into a fixed Debt charge. The various sums are included which fall due to the United States. They gave us a moratorium for a year. Therefore there is a less sum falling into the fixed Debt charge. That is the only thing that alters this charge and that is the only thing which we can discuss upon this Clause. I do not wish to limit the power of the Committee to discuss any financial matter, and I am anxious to meet when occasion offers the argument which has been brought forward by the Leader of the Opposition. I most strongly support the Chairman of Ways and Means that the Amendment which the Leader of the Opposition has moved would not change the effect of the Clause. The actual re- duction of the sums paid in interest on War Loan would require a special Act of Parliament. The reduction of the amount is not outside the power of Parliament and it could be done by an Act of Parliament if the Government desired to do it, but it could not be done by leaving out this Clause or by putting any new Clause into the Finance Bill. It seems paradoxical, but after this explanation I hope I have convinced the Committee of the justice of our contention.
I beg to move, "That the Chairman do report Progress, and ask leave to sit again."
We have had such an extraordinary Ruling, and the statement which has just been made by the Financial Secretary is so extraordinary, that I think we ought to have a little more time to consider the point. It may well be that what we have been told is accurate, and that you, Sir Dennis, have given a proper Ruling, but, as I see it, there is no sense in having a Clause in the Finance Bill if we are not permitted to discuss it, and even to reject it. Parliament has been asked to consider a Clause of this kind and to debate it, and now we are told that we cannot reject it. That, to me, seems to be reducing the whole of the proceedings of the Committee to a farce.I have not said that the right hon. Gentleman cannot move his Amendment, or that he cannot adduce arguments in support of it. What I have said is that he cannot, on this Amendment, discuss the question of reducing the amount of interest on Government loans, because the right hon. Gentleman's Amendment would make no difference to the amount of the National Debt. The right hon. Gentleman has asked me to report Progress in order to discuss my Ruling. I have considered that point very carefully, and I have come to the conclusion that I must refuse to accept such a Motion because my Ruling has already been sufficiently discussed, and the discussion has confirmed in my mind the Ruling which I have given. I should like to make it clear what that Ruling is. It is not a ruling that this Amendment cannot be moved, or that it is beyond the 'Competence of this Committee to alter this Clause or reject it. My Ruling is to the effect that whether this Amendment is passed or not, or whether this Clause be passed or not, would make no difference to the liability of the national Exchequer in regard to the payment of the interest on war loans and other debts and that cannot therefore be discussed now. The liability for those debts arose at the time when the charges were incurred. They are now a charge on the Consolidated Fund which is not altered by the Finance Bill in any way.
I cannot accept your Ruling, Sir Dennis.
The right hon. Gentleman must accept my Ruling.
You have given a Ruling, Sir Dennis, which in effect says that the House of Commons once having decided upon a certain thing has not the power to alter it.
I have tried ray very best to put the limits of my Ruling as clearly as I could, but the right hon. Gentleman is now putting into my mouth something totally different from what I said. I have been most careful to say already, in reply to another hon. Member, that I am placing no limit whatever to the power of Parliament, and that the matter which the right hon. Gentleman wishes to discuss is one which, of course, can quite properly be discussed at the proper time; but I am quite clear that it cannot be discussed on this Amendment. I have allowed a long discussion on this point, because it is a difficult and important point, and I was anxious, for my own satisfaction as well as for the satisfaction of the Committee, that the Financial Secretary to the Treasury should be able to give the Committee and myself any assistance that he could. I think that the matter has now been sufficiently discussed. I am quite confirmed in my view as to the correctness of my Ruling. The matter is not one that can be discussed on a Motion to report Progress; it can only be discussed in the ordinary and proper recognised way by the method of putting down a Motion on the Order Paper. I must adhere to my Ruling and ask the right hon. Gentleman and the Committee to accept it.
May I ask a question? You have said that the Amendment itself would not be out of order, but that the reasons adduced may be out of order—that it would be out of order to argue the question of the rate of interest. It seems to me that, unless we adopt your method of putting down a special Motion, the question of interest cannot be called attention to, because it is a charge on the Consolidated Fund; but I should like to ask whether a Member could not move this lesser sum now, knowing that he could not alter the rate of interest, but as a method of expressing to the Government the fact that certain Members of this Committee have come to the conclusion that it is desirable to reduce the sum?
No; that is just the point. I have ruled quite definitely that although this is, of course, a fitting subject for discussion at the proper time, it cannot be discussed on this Clause. I must adhere to that Ruling and ask the Committee to follow it.
I beg to give notice that we shall raise the question of this Ruling at an appropriate moment. You have refused to accept a Motion to report Progress, as it is your right to do; but we do not accept your Ruling as correct, and we shall take whatever is the proper method for raising that question. I want to give you notice of that. I wish now to try, within the limits of your Ruling— which, I say quite frankly, I do not even now understand—to discuss this Amendment, which you say it is in order to discuss. It proposes a reduction of the sum that is mentioned here, from £308,000,000 to £208,000,000, and I want to give reasons why it should be so reduced. If I move the Amendment, I must be able to adduce reasons for moving it. I wish that this sum shall not be raised for the specific purpose of meeting interest on the National Debt.
I was going to ask the right hon. Gentleman whether he wished to go on with this Amendment, as, of course, he is perfectly entitled to do; but may I, for his guidance, if it is of any help to him in his argument, explain again that by this Clause Parliament does not raise this money at all, and that therefore, if he deals with the question of voting this money, he will be out of order. I quite appreciate the very great difficulty of arguing in favour of this Amendment, or, for that matter, against it, within the terms of the Ruling that I have given. It is a very intricate matter. I can only adhere to my Ruling, and, if the right hon. Gentleman can adduce in favour of the Amendment any arguments which come within the terms of my Ruling, I shall, of course, admit them.
I am not a master of language, and I am not a lawyer, and it is very possible that I shall not be able to argue this point. It is this very point that we intend as early as possible to argue under conditions which will be more free than they are this evening. I should like, however, to read, with your permission, what the Clause says. It reads as follows:
I want that sum reduced by £100,000,000 to £208,000,000, because I consider that the nation cannot afford to vote, or to give authority, as I understand this Clause does, for raising, that sum of money. My reason for thinking that the nation cannot afford it is—"The permanent annual charge for the National Debt for the financial year ending on the thirty-first day of March, nineteen hundred and thirty-three, shall be the sum of three hundred and eight million, five hundred thousand pounds, instead of the sum of three hundred and twenty-two million pounds."
I am very sorry, but the right hon. Gentleman is definitely transgressing my Ruling. After this long discussion, I must adhere to it rigidly. I must repeat once more that this Clause does not raise or provide the money.
May I ask you, very respectfully, to tell me what the Clause does do? [Interruption.] I ask you again, and I ask you quite respectfully, for what object are these words printed in a Clause which the House is asked to discuss? I understand the Financial Secretary to say that it is only here because the payments for the American Debt are not included this year. That is perfectly true, but are we not entitled, if we want to do so, to say, "We would like to carry this a little further. We would like to make it still less, and to tell the Government that we do not want to pay all this money for the National Debt, but want a less sum fixed"? Are we not entitled to say that? I was in the House when the right hon. Gentleman the Member for Epping (Mr. Churchill) drew all these things together, and when the sum was fixed. Do I understand that, in discussing the Finance Bill, which I think you will find is where the right hon. Gentleman gathered them together on the previous occasion, we are not in a position to alter that figure?
I repeat again that the Committee has a perfect right to alter this figure, but that it will make not the slightest difference, even if this figure is struck: out altogether, or if it is reduced to £100, to the interest which is paid upon War Loan. I am very sorry to suppress the right hon. Gentleman; he has been very good and patient; but I really must ask him not to discuss this question of my Ruling any further, but to take it as a definite Ruling, right or wrong. The right hon. Gentleman can deal with it later in the ordinary way, but now he and other Members of the Committee must keep within the terms of the Ruling.
Look at the position in which you have put us. [Interruption.] I am quite serious about this. I have been on the Government side once in my life, and I know how fine it is to see your opponent just squashed down like this; but this is really a very serious matter. You say to me, "You are perfectly entitled to discuss this; you are perfectly entitled to move a reduction; but you are not allowed to give reasons for doing so, or you must give reasons of a certain sort."
I am afraid I must tell the right hon. Gentleman now that he is misrepresenting what I have said. I have said that the right hon. Gentleman can give reasons as long as they are reasons which are pertinent; but the reasons which he is trying to give, and which he wishes to give, are not pertinent.
I am anxious to elucidate this matter as far as possible. The Leader of the Opposition put a question, as I understood, to me through you, as to what the purpose of this provision is, and how these words come into the Bill at all; and if they are in the Bill, what is the reason? First of all, the reason is that we are varying the fixed Debt charge. This Clause has to appear in the Finance Bill if the fixed Debt charge has to be varied, but not on any other account.
I think we must put this matter in order. It is quite clear to me that many hon. Members will wish to discuss this Clause in order to discover what it means. The right hon. Gentleman was moving an Amendment—I understand that he still wishes to move it— and if I may treat it as moved by him, I will put the Question to the Committee, and then the Financial Secretary can go on with his explanation of the matter. The matter will then be discussed in a perfectly orderly way, whereas I venture to think it is now being discussed in a rather disorderly way. If the right hon. Gentleman will allow me to put the Amendment to the Committee—
I want to say another word on it.
The right hon. Gentleman will then complete what he has to say in moving the Amendment, and I will then put it.
But I shall not be able to complete what I wanted to say, because you, Sir Dennis, have effectively stopped me. We thought we had taken good legal advice—I am sorry the hon. and learned Gentleman is not here, but even a lawyer has to feed—and we thought we were in order in moving the Amendment and in giving the reasons which were in our minds for supporting it. I understand that to-night, at any rate, we have got to put these on one side, and we shall take our vote when the right hon. and gallant Gentleman has given us his version. But I want quite seriously to say that we feel we shall be obliged to raise the whole question, in whatever form is most convenient, later on. I will not attempt to contravene the Ruling of the Chair again by attempting to make my speech. I will save it up.
9.30 p.m.
I fully realise the difficulty of this technical subject but, as I understand it, the fixed Debt charge was established for accountancy purposes. If the fixed Debt charge is varied, the authority to vary it must appear in the Finance Bill of the year, and for that reason it so appears in this Finance Bill. The reason for varying the charge is that a lesser sum is being demanded of this country, and certain portions of our liability having failed to materialise, we can make a correspondingly lesser provision. If we had not this Clause in the Bill the only effect would be that we should require to find £14,000,000 more for the Sinking Fund, a thing which I am sure the right hon. Gentleman does not desire. Then the further question arises, could the right hon. Gentleman, by this reduction he is moving, bring about the object which he desires, namely, a reduction in War Loan interests? No. Why not?
I am afraid the right hon. and gallant Gentleman is getting into an argument which is out of order, or into a discussion of my Ruling.
I take it the Ruling lays it down that we are not permitted in this House to discuss the reduction of the rate of interest?
I do not know whether the hon. Gentleman was in the House and heard my Ruling, but if he did he must have heard me say at least three times that the House is quite entitled to discuss that matter, but not on this occasion.
Without falling out of order again, may I simply say that the Clause is in the Bill because we are varying the fixed Debt charge? We are varying it because our liabilities are not as great as we expected them to be. [HON. MEMBERS: "How do you know?"] Because we have a letter from the President of the United States of America to that effect. That being so, we are not making the provision which would otherwise be necessary because, if we did, that would mean an extra provision for the Sinking Fund, which is not desired. The only other question is what effect this has on the question of the Hoover moratorium as a whole. My right hon. Friend the Chancellor of the Exchequer made that clear in his Second Reading speech where he pointed out that he was not making provision for payment to the United States, or taking credit for the sums which were due to this country from other sources. These two items formed, as it were, a self-balancing budget, and he was taking the two things out of the finances of the year since they were all to be discussed, more particularly the sums we were to get in, at the Lausanne Conference. Therefore, we are not, in this Clause, prejudicing or prejudging one way or the other the question of the payments to the United States under the Hoover moratorium. We are, however, not making provision for an unnecessary payment to the Sinking Fund this year which would, incidentally, have had the effect of causing us to raise another £14,000,000 of taxation, which is not desired in any part of the House. That, I think, does afford very good reasons for this Clause being in the Bill, and for the proposals which we are bringing forward.
I do not want to go against the ruling of the Chair, which was very clearly given to us, but I do think the right hon. and gallant Gentleman has contradicted himself. I could follow the Ruling of the Chair, and I thought I should follow much better what the right hon. and gallant Gentleman said since he comes from the same city, but I could not. He said, in effect, that if we do not pass the Clause, the fixed Debt charge would be the same, and that it is all under the Consolidated Fund. Then he says that if we did not pass the Clause, the payments would not be the same, because you would have to find £322,000,000 instead of £308,000,000. The one thing in the Ruling of the Chair which I clearly grasped was that, no matter what we decided here to-night— whether we rejected this Clause or amended it—the payments would continue to be the same, but now the right hon. and gallant Gentleman says that if we do not pass the Clause, the payments would not be the same, but so many millions more.
I said payments to holders of War Loan would not be altered. Payments to the Sinking Fund would be altered, but these are not payments to any individual and, therefore, the seeming discrepancy in my argument is resolved.
The Sinking Fund is altered, but you cannot alter the interest. That is the reply that I got. Therefore, we should be entitled to argue that this sum should be reduced by £100,000,000 to wipe out the Sinking Fund.
The Sinking Funds are statutory, and cannot be altered.
You say unless you get this Clause, the Sinking Fund will not be altered.
The sums will still have to be raised, but they will not go to individual holders of War Loan, but to the Sinking Fund.
It does not make it any clearer. Let us take it point by point. You say this interest charge is a charge on the Consolidated Fund and it cannot be altered under the Finance Bill. That is the definite ruling which the Chairman has given and which I accept for the time being. But along comes a new proposition and the Financial Secretary says there is a letter from America, the effect of which is to reduce the charge on the Sinking Fund and, if we had not had that letter from America, the Sinking Fund would have been a higher amount. But he says, having got that letter, he now proposes to ask Parliament to alter the sum allocated. You can alter the Sinking Fund, therefore, because you now propose to do it. You have said that, if we did not alter this now, a larger sum would have to be provided for. Without going into the merits of War debt interest, I think this is a cogent point. In effect, we are asked to allow this provision to go by default. It is to some extent a declaration. It may be argued that we have not sanctioned the payment, but the mere fact that we allowed it to go through unchallenegd would seem to imply that the Committee sanctioned this large sum being paid for interest and other charges. The Opposition are perfectly right in safeguarding their interests by challenging this. While it may be a charge on the Consolidated Fund, the language conveys to the great mass of people outside that we are providing the money for interest charges and capital. While we must obey the rules of the House, we are entitled to safeguard the relations between us and our constituents, and for this to be allowed to go unchallenged would convey to the man in the street that the Opposition agreed to this large sum being provided for. We take the view that the country cannot afford it, and, while we cannot discuss it, we think the time has now come to reduce it and we take our stand in the Lobby as the only effective way of saying that we cannot allow even this declaration Clause to pass unchallenged. I admit that, if the Amendment were carried, the charge would still go against the Consolidated Fund, but it would mean in effect an instruction to the Government that they should go on with the work of reducing War debt charges at the earliest possible moment.
I did not understand all the difficulties about the Amendment. As I read it it seems perfectly in order. It would have a certain definite effect. Obviously it will not affect the payment of interest to bondholders or the payment of funds into the contractual Sinking Fund. It means that these sums will be paid not out of the Consolidated Fund but out of Ways and Means advances. This is a question of so many millions into the Consolidated Fund. If it is not paid into the Consolidated Fund, those charges will still have to be met. When I prepared my case for the Amendment I said, Here is an admirable opportunity of recommending to the Committee the advisability of raising money on Ways and Means advances instead of the Consolidated Fund. We shall run into debt. If the Amendment is carried, it means that the Budget will no longer balance and we shall have to borrow on Ways and Means to meet the charges for these debts and this Sinking Fund. For those of us who want to see an increase in credit and a reasonable fall in sterling, I do not know any better way than for the State, in effect, to purchase War Loan and pay for it either by currency or by Ways and Means advances. There you have the two alternatives. We can go on in the old way, meeting every expenditure of the year out of the revenue of the year, or we can run into debt by borrowing short in order to pay long.
Honesty or dishonesty.
I am merely pointing out that this is a perfectly practical Amendment. I want to show the Committee, and even the ex-Secretary to the Treasury, what it means. I know he is now a pillar of faith in restoring the Gold Standard.
Honesty.
If you call it honesty, I call it tomfoolery. How we are to go on paying £125 for every £100 that we borrow I do not know. Perhaps the hon. Baronet learned it at the Treasury.
I learned at my mother's knees, and not at the Treasury, to be an honest man.
That is why the hon. Baronet voted for the restoration of the Gold Standard in 1925. That is the sort of honesty that appeals to him. It did not appeal to me and I opposed it. He was for forcing people to pay back £125 for every £100 that they borrowed. That is honesty according to him. I think it is dishonesty. I am merely trying to restore honesty to ourselves. This Amendment is not one on which we need differ with any great violence. It is a difference of fact whether we ought to pay these charges out of the Consolidated Fund or run into debt to meet them. The Financial Secretary to the Treasury rather staggered me when he said that we were perfectly right in assuming that we should never have to pay our debt to America any more. Perhaps he did not quite say that, but I mean in this financial year. We have only got, as I understand it, so to speak, a passport for dishonesty until the beginning of December, after which we have to pay it. Is what we have to pay included in the Consolidated Fund or not? But there are other proposals. We have seen the big drive in all the Conservative Press lately in favour of a conversion scheme. Conversion schemes have been, and in fact are generally, accompanied by a big appeal to patriotic sentiment. The patriotic urge has been sufficient in the past to cause holders of War Loan to scrap their bonds and help the country.
The right hon. and gallant Gentleman is now getting away from the Amendment.
I think I have kept in order quite long, and I am very grateful to you for pulling me up directly I got over the edge. I think that there is a parallel between patriotic holders of War Bonds in this country who are, or who may be, willing to cancel their War Bonds and the American Government who have allowed us the six months' moratorium on their debt. I think that a definite expression of opinion by this country that the whole amount which we can allow from the Consolidated Fund to pay off the charges is £100,000,000 short of what is required might be an additional urge to the patriotism of the citizens of this country and to the common sense of citizens of other countries who hold our paper to accept less, and to consent more willingly to a conversion scheme even though they do not cancel their bonds. That is a point of view of which, I think, we shall
Division No. 195.]
| AYES.
| [9.49 p.m.
|
| Acland-Troyte, Lieut.-Colonel | Clarry, Reginald George | Gunston, Captain D. W. |
| Adams, Samuel Vyvyan T. (Leeds, W.) | Clayton, Dr. George C. | Guy, J. C. Morrison |
| Agnew, Lieut.-Com, P. G. | Clydesdale, Marquess of | Hacking, Rt. Hon. Douglas H. |
| Ainsworth, Lieut.-Colonel Charles | Cobb, Sir Cyril | Hamilton, Sir R. W. (Orkney & Zetl'nd) |
| Alexander, Sir William | Cochrane, Commander Hon. A. D. | Hammersley, Samuel S. |
| Allen, Lt.-Col. J. Sandeman (B'k'nh'd.) | Colfox, Major William Philip | Hanley, Dennis A. |
| Allen, Lt.-Col. Sir William (Armagh) | Colville, John | Hannon, Patrick Joseph Henry |
| Amery, Rt. Hon. Leopold C. M. S. | Conant, R. J. E. | Harris, Sir Percy |
| Apsley, Lord | Cook, Thomas A. | Hartland, George A. |
| Aske, Sir Robert William | Cooke, Douglas | Harvey, George (Lambeth, Kenningt'n) |
| Astbury, Lieut.-Com. Frederick Wolfe | Cooper, A. Duff | Harvey, Major S. E. (Devon, Totnes) |
| Atkinson, Cyril | Cowan, D. M. | Haslam, Sir John (Bolton) |
| Balley, Eric Alfred George | Cranhorne, Viscount | Headlam, Lieut.-Col. Cuthbert M. |
| Balfour, Capt. Harold (I. of Thanet) | Crookshank, Col. C. de Windt (Bootle) | Hellgers, Captain F. F. A. |
| Balniel, Lord | Crookshank, Capt. H. C. (Gainsb'ro) | Henderson, Sir Vivian L. (Cheimsford) |
| Banks, Sir Reginald Mitchell | Croom-Johnson, R. P. | Heneage, Lieut.-Colonel Arthur P. |
| Barclay-Harvey, C. M. | Cruddas, Lieut.-Colonel Bernard | Hepworth, Joseph |
| Barton, Capt. Basil Kelsey | Culverwell, Cyril Tom | Holdsworth, Herbert |
| Beaumont, M. W. (Bucks., Aylesbury) | Davies, Maj. Geo. F. (Somerset, Yeovil) | Hope, Sydney (Chester, Stalybridge) |
| Beaumont, Hon. R. E. B. (Portsm'th, C.) | Dawson, Sir Philip | Hopkinson, Austin |
| Belt, Sir Alfred L. | Denville, Alfred | Hore-Belisha, Leslie |
| Benn, Sir Arthur Shirley | Dickie, John P. | Hornby, Frank |
| Bevan, Stuart James (Hoiborn) | Dixey, Arthur C. N. | Horne, Rt. Hon. Sir Robert S. |
| Birchall, Major Sir John Dearman | Donner, P. W. | Howard, Tom Forrest |
| Bird, Ernest Roy (Yorks., Skipton) | Drewe, Cedric | Hudson, Capt. A. U. M. (Hackney, N.) |
| Bird, Sir Robert B. (Wolverh'pton W.) | Duckworth, George A. V. | Hudson, Robert Spear (Southport) |
| Blaker, Sir Reginald | Duggan, Hubert John | Hume, Sir George Hopwood |
| Blindell, James | Dunglass, Lord | Hutchison, Maj.-Gen. Sir R. (Montr'se) |
| Borodale, Viscount. | Eady, George H. | Inskip, Rt. Hon. Sir Thomas W. H. |
| Bossom, A. C. | Edmondson, Major A. J. | Jackson, Sir Henry (Wandsworih, C.) |
| Boulton, W. W. | Elliot, Major Rt. Hon. Walter E. | Jackson, J. C. (Heywood & Radcliffe) |
| Bowyer, Capt. Sir George E. W. | Ellis, Robert Geoffrey | James, Wing-Com. A. W. H. |
| Boyce, H. Leslie | Emrys-Evans, P. V. | Jamieson, Douglas |
| Bracken, Brendan | Entwistle, Cyril Fullard | Janner, Barnett |
| Braithwaite, J, G. (Hillsborough) | Essenhigh, Reginald Clare | Jesson, Major Thomas E. |
| Briant, Frank | Evans, Capt. Arthur (Cardiff, S.) | Johnston, J. W. (Clackmannan) |
| Briscoe, Capt. Richard George | Evans, R. T. (Carmarthen) | Johnstone, Harcourt (S. Shields) |
| Brockiebank, C. E. R. | Everard, W. Lindsay | Jones, Sir G. W. H. (Stoke New'gton) |
| Brown, Col. D. C. (N'th'l'd., Hexham) | Fielden, Edward Brocklehurst | Jones, Henry Haydn (Merioneth) |
| Brown, Ernest (Leith) | Foot, Dingle (Dundee) | Jones, Lewis (Swansea, West) |
| Brown, Brig.-Gen. H. C. (Berks., Newb'y) | Foot, Isaac (Cornwall, Bodmin) | Ker, J. Campbell |
| Browne, Captain A. C. | Ford, Sir Patrick J. | Kerr, Hamilton W. |
| Burghley, Lord | Fox, Sir Gifford | Kirkpatrick, William M. |
| Burgin, Dr. Edward Leslie | Fuller, Captain A. G. | Knatchbull, Captain Hon. M. H. R. |
| Burnett, John George | Ganzoni, Sir John | Knebworth, Viscount |
| Butt, Sir Alfred | Gibson, Charles Granville | Knight, Holford |
| Campbell, Rear-Adml. G. (Burnley) | Gillett, Sir George Masterman | Knox, Sir Alfred |
| Caporn, Arthur Cecil | Goff, Sir Park | Lamb, Sir Joseph Quinton |
| Cassels, James Dale | Goldie, Noel B. | Law, Sir Alfred |
| Castle Stewart, Earl | Goodman, Colonel Albert W. | Law, Richard K. (Hull, S. W.) |
| Cautley, Sir Henry S. | Gower, Sir Robert | Leckie, J. A. |
| Cayzer, Sir Charles (Chester, City) | Graham, Fergus (Cumberland, N.) | Lees-Jones, John |
| Cayzer, Maj. Sir H. R. (Prtsmth., S.) | Grattan-Doyle, Sir Nicholas | Leigh, Sir John |
| Cazalet, Thelma (Islington, E.) | Greene, William P. C. | Leighton, Major B. E. P. |
| Chapman, Sir Samuel (Edinburgh, S.) | Griffith, F. Kingsley (Middlesbro', W). | Lewis, Oswald |
| Choriton, Alan Ernest Leofric | Grimston, R. V. | Liddall, Walter S. |
| Christie, James Archibald | Gritten, W. G. Howard | Lindsay, Noel Ker |
| Clarke, Frank | Guinness, Thomas L. E. B. | Llewellin, Major John J. |
hear something in the future. If there is a conversion scheme it will not be necessary to take all this money. The statutory demand of the bondholders and the statutory demand of the Sinking Fund will obviously be less directly the conversion scheme goes through.
The right hon. and gallant Gentleman, I am afraid, is now getting too far away from the Amendment.
Question put, "That the word 'three' stand part of the Clause."
The Committee divided: Ayes, 314; Noes, 36.
| Llewellyn-Jones, Frederick | Penny, Sir George | Somerville, Annesley A. (Windsor) |
| Lovat-Fraser, James Alexander | Percy, Lord Eustace | Somerville, D. G. (Willesden, East) |
| Lumley, Captain Lawrence R. | Peters, Dr. Sidney John | Soper, Richard |
| Lyons, Abraham Montagu | Peto, Geoffrey K. (W'verh'pt'n, Bilston) | Sotheron-Estcourt, Captain T. E. |
| Mabane, William | Pickering, Ernest H. | Spencer, Captain Richard A. |
| MacAndrew, Lieut.-Col. C. G. (Partick) | Potter, John | Spender-Clay, Rt. Hon. Herbert H. |
| McEwen, Captain J. H. F. | Procter, Major Henry Adam | Stanley, Lord (Lancaster, Fylde) |
| McKie, John Hamilton | Pybus, Percy John | Stanley, Hon. O. F. G. (Westmorland) |
| McLean, Major Alan | Ralkes, Henry V. A. M. | Stevenson, James |
| McLean, Dr. W. H. (Tradeston) | Ramsay, Alexander (W. Bromwich) | Stones, James |
| Magnay, Thomas | Ramsbotham, Herwald | Stourton, Hon. John J. |
| Maitland, Adam | Rathbone, Eleanor | Strauss, Edward A. |
| Mallalieu, Edward Lancelot | Ray, Sir William | Strickland, Captain W. F. |
| Mander, Geoffrey le M. | Rea, Walter Russell | Stuart, Hon. J. (Moray and Nairn) |
| Margesson, Capt. Henry David R. | Reed, Arthur C. (Exeter) | Sueter, Rear-Admiral Murray F. |
| Marsden, Commander Arthur | Reid, Capt. A. Cunningham- | Sutcliffe, Harold |
| Martin, Thomas B. | Remer, John R. | Taylor, Vice-Admiral E. A. (P'dd'gt'n, S.) |
| Mason, David M. (Edinburgh, E.) | Rentoul, Sir Gervals S. | Templeton, William P. |
| Meller, Richard James | Rhys, Hon. Charles Arthur U. | Thomas, James P. L. (Hereford) |
| Merriman, Sir F. Boyd | Roberts, Aled (Wrexham) | Thompson, Luke |
| Millar, Sir James Duncan | Roberts, Sir Samuel (Ecclesall) | Thomson, Sir Frederick Charles |
| Mills, Sir Frederick (Leyton, E.) | Rosbotham, S. T. | Thorp, Linton Theodore |
| Mills, Major J. D. (New Forest) | Ross, Ronald D. | Titchfield, Major the Marquess of |
| Milne, Charles | Ross Taylor, Walter (Woodbridge) | Todd, Capt. A. J. K. (B'wick-on-T.) |
| Milne, John Sydney Wardlaw- | Runge, Norah Cecil | Todd, A. L. S. (Kingswinford) |
| Mitchell, Sir W. Lane (Streatham) | Russell, Albert (Kirkcaldy) | Touche, Gordon Cosmo |
| Monsell, Rt. Hon. Sir B. Eyres | Russell, Alexander West (Tynemouth) | Wallace, Captain D. E. (Hornsey) |
| Morgan, Robert H. | Russell, Hamer Field (Sheffield, B'tside) | Wallace, John (Dunfermline) |
| Morris, John Patrick (Salford, N.) | Salmon, Major Isidore | Ward, Irene Mary Bawick (Wallsend) |
| Morris, Owen Temple (Cardiff, E.) | Salt, Edward W. | Ward, Sarah Adelaide (Cannock) |
| Moss, Captain H. J. | Samuel, Sir Arthur Michael (F'nham) | Warrender, Sir Victor A. G. |
| Muirhead, Major A. J. | Samuel, Samuel (W'dsworth, Putney) | Wells, Sydney Richard |
| Munro, Patrick | Sandeman, Sir A. N. Stewart | Weymouth, Viscount |
| Nali, Sir Joseph | Sanderson, Sir Frank Barnard | Williams, Charles (Devon, Torquay) |
| Nail-Cain, Arthur Ronald N. | Savery, Samuel Servington | Williams, Herbert G. (Croydon, S.) |
| Nation, Brigadier-General J. J. H. | Scone, Lord | Wills, Wilfrid D. |
| Nicholson, Godfrey (Morpeth) | Selley, Harry R. | Wilson, Clyde T. (West Toxteth) |
| Nicholson, O. W. (Westminster) | Shakespeare, Geoffrey H. | Wilson, G. H. A. (Cambridge U.) |
| North, Captain Edward T. | Shaw, Helen B. (Lanark, Bothwell) | Windsor-Clive, Lieut.-Colonel George |
| Nunn, William | Shaw, Captain William T. (Forfar) | Womersley, Walter James |
| O'Connor, Terence James | Shepperson, Sir Ernest W. | Wood, Sir Murdoch McKenzie (Banff) |
| O'Donovan, Dr. William James | Sinclair, Col. T. (Queen's Unv., Belfast) | Worthington, Dr. John V. |
| O'Neill, Rt. Hon. Sir Hugh | Slater, John | Wragg, Herbert |
| Ormiston, Thomas | Smiles, Lieut.-Col. Sir Walter D. | Young, Rt. Hon. Sir Hilton (S'v'noaks) |
| Ormsby-Gore, Rt. Hon. William G. A. | Smith, Louis W. (Sheffield, Hallam) | |
| Palmer, Francis Noel | Smith, R. W. (Aberd'n & Kinc'dine, C.) | TELLERS FOR THE AYES.— |
| Pearson, William G. | Smith-Carington, Neville W. | Lieut.-Colonel Sir A. Lambert Ward |
| Peat, Charles U. | Smithers, Waldron | and Commander Southby. |
NOES.
| ||
| Adams, D. M. (Poplar, South) | Griffiths, T. (Monmouth, Pontypool) | Maxton, James |
| Batey, Joseph | Grundy, Thomas W. | Parkinson, John Allen |
| Bevan, Aneurin (Ebbw Vale) | Hall, F. (York, W. R., Normanton) | Price, Gabriel |
| Brown, C. W. E. (Notts., Mansfield) | Hall, George H. (Merthyr Tydvil) | Salter, Dr. Alfred |
| Buchanan, George | Hirst, George Henry | Tinker, John Joseph |
| Cape, Thomas | Jenkins, Sir William | Wedgwood, Rt. Hon. Josiah |
| Cove, William G. | Jones, Morgan (Caerphilly) | Williams, David (Swansea, East) |
| Cripps, Sir Stafford | Lansbury, Rt. Hon. George | Williams, Edward John (Ogmore) |
| Daggar, George | Lawson, John James | Williams, Dr. John H. (Lianelly) |
| Davies, Rhys John (Westhoughton) | Leonard, William | Williams, Thomas (York., Don Valley) |
| Duncan, Charles (Derby, Claycross) | Logan, David Gilbert | |
| Edwards, Charles | Macdonald, Gordon (Ince) | TELLERS FOR THE NOES.— |
| Grenfell, David Rees (Glamorgan) | Maclean, Neil (Glasgow, Govan) | Mr. Groves and Mr. Duncan Graham. |
Motion made, and Question proposed, "That the Clause stand part of the Bill."
This Clause seems to raise some rather difficult points as regards procedure on the question of national finance. As I understand it, the object of the Clause is to make due provision from the annual Budget for the purpose of paying sums into the Consolidated Fund, that there they may be used to meet the annual charge for the National Debt, but the Clause proposes to make a reduction in the sum which would ordinarily become payable by virtue of the fact that under the Hoover moratorium certain payments are no longer due to America. That raises a number of interesting questions as regards the national finances. In the first place, we understand from the Financial Secretary that that action is taken on the assumption that that money will not be payable at all in the current financial year, that it is not a question of merely not paying in the first half or the first portion of the year, but a question of eliminating the whole of the payment for the current year up to the 31st March next.
These questions are of great importance and raise great national issues about which none of us wish to have any misunderstanding. I go no further than the position stated most clearly by the Chancellor of the Exchequer on the opening of the Budget, namely, that he was not making provision for payment to America, and he was not taking credit for receipts from Europe. He regarded those two things as balancing each other. The question whether we shall or shall not have to make any payment to the United States in the current financial year does not arise. It is setting two sums against each other and making a self-balancing account. I do not want to be led into discussion as to the payment of sums to America, or under what conditions we shall have to pay those sums. It would be most injudicious and undesirable that we should enter into any detailed discussion on that point.
I am much obliged to the right hon. and gallant Gentleman and I am sure the Committee will be obliged to him for the statement that he has made. I agree that it is very desirable that this matter should be made quite clear. I put the point in the way I did in order that I might elicit a statement as to the exact position. So far as the figures are concerned, a little confusion may have arisen in the minds of the people overseas and in the minds of the people of this country. I understand that the figures are worked out on the basis that they do not take into account any payment from European or Colonial countries as regards War Debts, and that they do not include any payments which we might make ordinarily out of our annual Budget supplies to America. I appreciate what the right hon. Gentleman has said that this does not tie him or the Government either one way or the other and that the matter is left open and will be one entirely for negotiation. In dealing with this Clause, however, one has to deal with it on the basis that there is no provision made for the payment of the American Debt.
The whole object and necessity for the passing of the Clause in this form is in order to make it clear that that provision is at the present moment unnecessary in respect of the American debt. That raises a question as regards the rest of the provision which is here made. This not only provides for paying the American Debt in the ordinary way, but also for the payment of all other debts of this country. It is a provision as to the permanent annual charge for the National Debt and the Committee are concerned to examine this the largest debit item in the Budget to see whether it is really necessary, for the purposes of national finance, that there should be so large a debit item. There are only two ways of reducing this debit item. The first is to pass the Amendment which we have suggested, and upon which the Committee has just voted. The second way is that the Consolidated Fund should be £100,000,000 short of the necessary money for paying the interest on the internal National Debt. If that position eventuated some other provision would have to be made for putting that £100,000,000 into the Consolidated Fund.This does not provide for a penny going into the Consolidated Fund, which is already full now so far as the Committee stage is concerned with the taxes which the House has voted.
This is a very difficult matter for the ordinary person to understand and it shows how necessary it is to continue the discussion as to the meaning of the Clause. I am sure that many hon. Members do not appreciate its purpose. In the Clause it says that the permanent annual charge for the National Debt shall be so many million pounds. If that is not dealing with money going into the Consolidated Fund is it dealing with money coming out of the Consolidated Fund? It is dealing with some money because it is dealing with over £300,000,000. Perhaps the Financial Secretary will explain what the Clause actually does. It must be an authorisation by this Committee for some transaction. What is that transaction? If the Clause is not necessary that is a good reason for not passing it. But the Financial Secretary is urging the Committee to pass it. What is it going to do when it is passed? Am I right in thinking that the object of the Clause is to provide moneys which will pay the interest on the National Debt? That would appear to be so because in the marginal note it says:
I presume that it is intended to provide a sum which shall meet the national indebtedness for interest on the loans which the nation has raised. If that is the case then it is a question as to whether this sum is one which the Committee ought to vote or whether it is a sum which the Committee ought not to vote. Apparently a sum of £308,500,000 is to meet the interest on the internal National Debt. The question arises as to whether the Government can in any way economise on that sum. We have heard a great deal about the urgent necessity for economy. May I ask whether this is not a point where the Government might make an economy? Is there any means by which we can reduce this charge which is going to fall on some fund or another? We believe that the time is opportune to see whether useful economies can be made, and this large sum seems to be one to which the Committee might well turn its attention. The Financial Secretary will tell us no doubt what the effect would be if the Committee decided as they might wish, to make some economy here."Provision as to permanent annual charge for National Debt for 1932–33."
We have had a long discussion and a full explanation on this point, but the hon. and learned Member was away for some time no doubt refreshing the inner man. But these difficult matters were thoroughly gone into a short time ago and the matters discussed were the subject of several Rulings by the Chairman of Committee. I am not quite sure to what extent we are in order in considering these questions. I can only say that no alteration in this Clause would make the slightest difference to the payment of interest on War Loan to the recipients of that interest. That could not be done by any alteration in this Clause. Nor would it be done by omitting the Clause altogether, or by a new Clause in the Finance Bill. It can only be done by a new Finance Bill. Parliament, of course, is competent to do that, but it is not possible in this Clause to vary the interest on War Loan to the recipients.
I am obliged to the Financial Secretary. I am sorry that I was absent during some part of the discussions but I tried to get as much information as I could from my hon. Friends and I gathered that they have not a clear view as to the exact purpose of this Clause, and with the greatest respect to the hon. and gallant Member I have not yet got any idea as to what he thinks the Clause does. He says that it does not control the amount paid in interest to the holders of War Loan. I did not think it did, but I did think that it made a provision for a lump sum which would be used for that purpose. Suppose the Government were to find itself with a smaller lump sum I imagine that they would have to bestir themselves in some way to make up the deficit.
No.
I understand that it does not matter what figure we put in it will have no effect whatever.
We have gone into this matter before. The fixed Debt charge is diminished by a certain sum because we are not making certain payments to the United States. When the fixed Debt charge is varied then the fixed Debt charge has to be varied by a Clause in the Finance Bill of the year. It is varied because the sums payable to the United States are varied. That is why the Clause is in the Bill.
Now I understand that the Clause is in the Bill because the Government want to make an alteration in the amount which is available for the fixed Debt charge. I am suggesting to the Committee that, apart from this matter of America, they may, for some other reason, want to make an alteration in the fixed debt charge. If the Committee thought it was a good thing to do, and made an alteration in the fixed debt charge, I presume that the Government would be put into the difficulty of having somehow or other to find money with which to pay the fixed debt charge. The right hon. Gentleman will tell me that that money is already budgeted for in the annual Budget and that it would not be necessary to do anything further. But the money which was not by this Clause allocated for the purpose of the fixed debt charge might be used out of the Budget for some other purpose; it might be used for useful social services or something of that sort, or in the manner in- dicated by one speaker, for the purpose of raising prices. That is to say, it could be used for inflationary purposes by having an unbalanced Budget and borrowing upon Ways and Means.
Attention ought to be drawn to the fact that this vast sum is being provided in the year 1932–33 for the purpose stated in the Clause. We realise that we are under this very great burden, which has been reduced, as the Clause tells us, by a certain sum in respect of the American debt. How are we to justify reducing that sum, whether it be by way of moratorium or gift from America, unless we ourselves take steps to reduce our own internal indebtedness?The question of our internal debt does not arise on this Clause. The Clause is an Amendment of Section 23 of the Act of 1928, which lays down certain sums for the interest and sinking fund of any given year. We cannot discuss the question of our internal debt on this Clause.
I am obliged, but with great respect you have pointed out exactly what I wanted to state. I am not discussing our internal indebtedness in the air, but am discussing it compared with our American indebtedness. It is the alteration in our American indebtedness which is made here and which is so significant, and I am suggesting that if it stands alone it may well open a great deal of criticism both in America and in this country. If one has a letter from someone who owes one money and one finds that he proposes to cut down what he owes because he says he is too hard up, but at the same time manages to live in exactly the same style as ever and to give big allowances to his own family, one becomes a bit suspicious. I suggest that the very large sum which appears here, which we are to continue for our internal indebtedness, when compared with the comparatively small sum which we are not going to pay America, does bring very forcibly before the country the question whether, if we are going to take advantage of the Americans and their goodness of heart in letting us off this debt of £11,000,000, we should not consider the putting of our own house in order.
If I heard the right hon. and gallant Gentleman correctly he stated that the reduction in this Clause was for the purpose of meeting the debt due to America. I understand that the amount due to America in an ordinary year is something like £30,000,000, and at the present rate of exchange is something like £49,000,000. Therefore, the hon. and learned Member for East Bristol (Sir S. Cripps) is right. How can the Financial Secretary reconcile this reduction which, I think, comes to £13,500,000, with a proposal to offset the amount owing to America? It seems to me absurd. Perhaps the right hon. and gallant Gentleman can explain how he reconciles the reduction proposed in the Clause with the amount due to America. It is absurd to try to delude the Opposition and the rest of the Committee by suggesting that this reduction has been brought about by making provision for the American debt.
I think this is a very grave question and I agree with the hon. and learned Member for East Bristol that if America proposes or contemplates making any reduction we should be the last people to assume it. The proposal surely should come from the United States. To put a provision into our Budget assuming that, because there may have been some indications that the United States would be prepared to make a reduction, the United States will make such a reduction, is, to my mind, calculated to bring about a contrary result. We are not likely to ingratiate ourselves with the United States by assuming that they are bound to make a reduction, and I think it is most unwise to do so. The assumption that this is a provision for a possible reduction in the debt cannot be reconciled with the facts, and I respectfully submit to the Committee that it is a most unwise procedure.In the past Chancellors of the Exchequer have made their names often on the amounts which they have provided for the Sinking Fund. The statutory Sinking Fund is a provision which has generally been made upon a promise, badly kept even by the Chancellor of the Exchequer who made it, but that provision has been in the past the test of the honesty of a Budget. The reason why this Clause is in the Finance Bill is not really on account of the American debt, but simply because the Chancellor of the Exchequer of to-day, not being able to carry out the provisions statutorily made by the right hon. Gentleman the Member for Epping (Mr. Churchill)—made by his honest predecessors—has put in another sum, and the Financial Secretary has, naturally, been attempting all the evening to conceal his principal's delinquencies, and has nearly "got away with it." The provision which this country has made in the past for paying off debt year by year in excess of the sinking funds of the specific loans has been one of the main weapons used by successive Governments, by the Treasury, and by the Bank of England, to deflate currency. It is well known that directly a Chancellor of the Exchequer came along and made an exceptionally large provision, so that far more of the taxpayers' money went to paying off debt, that had a deflationary effect. It was the result of that over a course of years that enabled some happy but unfortunate Chancellor of the Exchequer in the past to restore our pound to dollar parity on the Gold Standard. Now we are getting away from that.
Far be it from me to vote against this Clause which is making a smaller provision for the repayment of debt, and therefore to that extent that is more inflationary than similar Clauses or provisions in the past. But why on earth it should be out of order to move that that sum should be still further reduced, I cannot understand. The sum voted here has no direct connection with the amount paid in interest to the bondholders and the statutory provision for sinking funds in connection with each loan. It is a round figure embracing that, and going further still, and therefore it would have been perfectly simple, at any rate, to move that it should have been reduced to a sum just necessary to meet the statutory charges, instead of excessive. I want, in conclusion, to say that if this had been a case of reducing our provision for meeting debt by cutting off just that one item which we owe to America, I think we should have been very wrong indeed to do it. [An HON. MEMBER: "Why?"] Because I would sooner cease paying debts to my enemies than debts to my friends. There are debts that are debts of honour.Is the American debt a debt of honour?
I think so, certainly, more than money which we did not use, when we did not need it so much. At any rate, I should be sorry to give our American friends, friends in time of need, the impression—
Would the right hon. and gallant Member desire to impose an additional taxation of 9d. in the pound in order to fulfil any obligations which we have towards America?
10.30 p.m.
I should prefer 1s. in the pound on land values. But we might say, "We have not got gold, but we can pay you in goods." If we put our people to work producing goods for America, it might have its sunny side for a good many people in this country. I think the Committee ought to understand that the Financial Secretary to the Treasury has had no assistance all day long from above, from aloft. This is an exceedingly difficult question to discuss. I do not believe that he has 10.30 p.m. taken even the relaxation that our financial adviser has taken, and I think we need not expect him to be able to explain this very abstruse subject at such a late hour. I hope that the Government, therefore, will not carry on this Debate indefinitely. If we can only have from the Government a clear statement, not from the Financial Secretary to the Treasury but from the Parliamentary Secretary to the Treasury, on how far he intends to go to-night, we really should be able to get through these questions without pestering the overworked Financial Secretary. Let us leave it to the Parliamentary Secretary to settle all our difficulties and to solve our problems, international as well as financial, and at the same time to bring peace between the two sides of the Committee by giving us a time limit, or at any rate a space limit, on this Bill. We ought to be given an opportunity of starting on Clause 21 to-morrow. The questions which that raises hang together, and if we begin on Clause 21 to-day the whole interest of the Debate will be destroyed.
We have already arranged with the Leader of the Opposition that we shall close down at Clause 20.
The question of the American debt has been raised, and in his reply to the Leader of the Opposition and to myself, the Financial Secretary said that the reason for this amount was the terms of President Hoover's letter to this country. We have not been told the amount that was the outcome of that letter. What is the sum that was involved that lessens the Sinking Fund? Is the sum which is now being asked for only the sum that was asked for by President Hoover? Is the period covered 12 months or only a portion of the year? In this Clause is only the American Debt Sinking Fund allowed for? Suppose that citizens of this country out of public spiritedness decided to relinquish certain Debt holdings and to say that they have no desire to press for Sinking Fund payments, would those amounts be covered in this Clause? I want to ask him if the only sum here covered is the American debt, and if not what proportion of the sum has been allocated as coming from British citizens?
Before the right hon. Gentleman replies may I ask him to give the Committee one assurance which, I think, is rather necessary as a result of this somewhat rambling Debate? The consideration of the American debt has been ruled to be in order in connection with this Clause, and I think it would be very desirable, in view of the fact that this is undoubtedly one of the most critical issues which will come before this House and, indeed, the world in the course of the next few months, that the right hon. Gentleman should make it perfectly clear that whichever way we vote to-night upon this Clause neither the Government nor the House will be committing itself in any way to a final decision upon the matter. I am sure the right hon. Gentleman will agree that this is not a suitable occasion on which to debate so very grave a, matter of public policy, but I think the Committee will be relieved to know that no action it takes will commit itself either to an approval of the continuance of payments next year to the United States or to any other course of policy.
One or two specific questions have been raised which I am anxious to answer. In the first place, it is clear that the Committee to-night is not deciding for or against payments to the United States, as, indeed, was made clear by my right hon. Friend the Chancellor of the Exchequer. Then I was asked by the hon. Member for Gorbals (Mr. Buchanan) what sums are involved in the Hoover moratorium. The Finance Act (No. 2) of 1931 reduced the fixed Debt charge to £322,000,000 for both 1931 and 1932, and that reduction included the December, 1931, payment of interest to the United States, and also the June, 1932, payment for the financial year 1932. Now we are excluding the second half yearly payment which was due in December, 1932. That is the sum which is involved here, and that is the answer to what I thought were the somewhat discourteous or after-dinner remarks of my hon. Friend the resplendent Member for East Edinburgh (Mr. D. M. Mason), who accused me of having tried to mislead the Committee, a charge which I do not think he was entitled to make. This concerns a half-yearly payment, and for him to mix up payments for a half year and a whole year is not what one would expect from the founder and chairman of the Sound Currency Association.
rose—
No, I cannot give way to the hon. Member. I was also asked by the hon. Member for Gorbals whether any other sinking funds are covered by this fixed Debt charge. Yes, the statutory sinking funds of the War Loans are covered. He then asked whether letters had been received from citizens who are forgoing part of the interest on their War Loans, as in the case of the United States. Yes, Sir, thousands, indeed, millions of such letters, are received. They are received in answer to letters from the Treasury stating, "The Income Tax due from you is so much," and thereby they are reducing the sum to that extent.
We have had interesting speeches to-night from the hon. Member for East Edinburgh (Mr. D. Mason) and the right hon. Member for Newcastle-under-Lyme (Colonel Wedgwood), both of whom have constituted themselves the defenders of the United States. I do not know what title the hon. Member for East Edinburgh has to speak for the American nation, except that he appears to-night attired like the American Ambassador on some ceremonial occasion. [HON. MEMBERS: "Order!"] There is nothing out of order in that remark. As the Financial Secretary told us that we are not in any way committing ourselves tonight upon the question of the payment of debt to the United States of America, I would like to ask him whether there will be any opportunity for us to discuss this question again until after the Lausanne Conference. It is very important to know what the position of the Government will be when the next payment to America becomes due. I think the Financial Secretary to the Treasury should tell the Committee whether the Government have any policy whatever with regard to the American debt.
I would like to know in regard to that point whether we are likely to be placed in a position that while we are receiving no payments from Europe on account of Reparations and War Debts we shall continue to pay our War Debt to America? I think we ought to have a definite statement from the Government on that point. Months go by, and nobody knows what is the policy of the Government with regard to reparations and War debts, and all the time Europe and the world is drifting into the greatest financial disaster which it has ever experienced. We are having conference after conference, all perfectly futile—The hon. Member is now making a Second Reading speech.
I thought I was following on the lines adopted by the Financial Secretary to the Treasury. We are making no provision whatever for the American debt in this particular Clause, and it may be that we shall continue in that course. We are drifting into the worst financial crisis in the history of Europe simply because the Government have not the courage to face up to the situation.
On the question of the American debt, Reparations, and War Debts generally, we propose—I suppose hon. Members opposite will support us—to devote two of our Supply Days one to discuss the Lausanne Conference, and the other the Ottawa Conference. We are giving the Government full notice so that the appropriate Ministers will be here in order to give us a clear indication of the Government policy in reference to the American and other debts, and with regard to the Ottawa Conference.
Question, "That the Clause stand part of the Bill," put, and agreed to.
Clause 19—(Charge Of 4 Per Cent Consols Sinking Fund On Consolidated Fund)
Motion made, and Question proposed, "That the Clause stand part of the Bill."
Perhaps I shall be allowed to say a few words on the question of conversion. We on this side feel that it is very late in the day to be even thinking about this proposition, not to mention putting it into an Act of Parliament. We think that long ago both the Treasury and the House of Commons ought to have taken in hand this question of reduction of the rate of interest that is being paid. This proposal, so far as it goes, may be a good one, but I am afraid we shall have to weary the Financial Secretary still further. We all sympathise with him, and congratulate him on the manner in which he is carrying through a very difficult task; and, although we are obliged to press him in this way, I am sure he will understand that that does not mean that we do not appreciate the very difficult job that he has in hand, and the manner in which he is carrying it through. We should like to know, if he can tell us, something about the terms and conditions that are going into this prospectus—at what sort of figure the future rate of interest is going to be fixed, and whether it would be possible to put into the prospectus the condition, which is now so applicable to wages, that, if the value of money goes up, the rate shall go down, just as in the case of wages. Earlier in the evening I pointed out that this year what my right hon. Friend calls the rentier class, who hold the stock of the National Debt, are going to get £80,000,000 more of value than we think they are entitled to—
I am sorry to interrupt the right hon. Gentleman, but I understand that the prospectus in this case is not one that is to be issued, but one that has been issued some time ago, and that the question of conversion cannot arise on this Clause at all. I may be wrong in that; perhaps the Financial Secretary can tell me.
I fully agree that it is desirable to discuss questions involving conversion and so on—
Is this conversion?
No. The Clause provides that
The prospectus in question was issued on the 29th December, 1926, and contained these words:"There shall be charged on and issued out of the Consolidated Fund or the growing produce thereof any moneys required for the purpose of any undertaking contained in any prospectus to purchase and cancel 4 per cent. Consolidated Loan."
The Clause refers to the terms of that prospectus, and not of one to be issued in the immediate future."His Majesty's Government undertake for a period of 10 years, so long as the price of the Loan is at or below par, to apply moneys at the rate of £2,500,000 during each quarter year for the purchase of the Loan in the market for cancellation."
The words are:
Surely the Clause ought to state what prospectus is referred to. What has led us astray has been the fact that we understand that the Government are proposing at some time to try to convert a very large batch of War Loan—[HON. MEMBERS: "Five per cent."]—whatever the percentage is. The words are:"contained in any prospectus."
"in any prospectus."
The prospectus of any Conversion Loan would not be a prospectus for the purchase and cancellation of loan that would be coming on the market when the terms of the new loan and the new prospectus would be issued. It is not in any way. governed, nor could it be governed, by this Clause.
It seems to me that we ought to have insisted upon the right hon. and gallant Gentleman making a speech and telling us what the Clause really meant, because you may purchase and cancel Four per cent. War Loan and issue it as something else at a lower rate. That might have been the intention under this Clause, and there is nothing here to show that that was not in the mind of of the Government. But I still stick to the point that the words
mean contained in a particular prospectus. It may mean one that you are going to issue or one that you have already issued. Therefore, I think the word "any" should be taken out and you should put in what you are really referring to."contained in any prospectus"
Surely the right hon. and gallant Gentleman is wrong in his interpretation of the Clause? The Clause is dealing with a charge which may be made upon the Consolidated Fund for moneys required for the purpose of any undertaking—then there are four words in brackets, "contained in any prospectus "—for the purchase and cancellation of 4 per cent. Consolidated Loan. It is an undertaking to purchase and cancel the Loan. It is not a prospectus to purchase and cancel, but an undertaking to purchase which may be contained in any prospectus before or after or in future. A prospectus may be issued next month containing a proposal to purchase and cancel 4 per cent. Consolidated Loan. That might well be a prospectus for the purpose of converting the 4 per cent. Consolidated Loan into a 3 per cent. Consolidated Loan with a provision to purchase that amount of 4 per cent. Consolidated Loan which was not voluntarily converted.
I think the hon. and learned Gentleman is making a mistake. I did not say the Government could not issue a prospectus to purchase and cancel and give an undertaking, but in order to issue new stock in its place the authority of this House will be required.
I was under the impression that authority would be sought in this House in a separate Measure. This is making provision for some future prospectus. Certainly the words cover it, and, if they ought not to do so, they should be altered. An undertaking may be given to purchase and cancel 4 per cent. Consolidated Loan. Whether that is replaced either by another loan or the money raised by Treasury Bills or out of Ways and Means or in other ways, we are not concerned with, nor does the Clause deal with that. In my submission, clearly the Clause could be applied to a subsequent issue of any kind of loan or security which was designed to take the place of Consolidated Loan, and by this Clause it would be possible to deal with that portion of the Consolidated Loan which the Government thought fit to purchase and cancel provided, for instance, the holders did not wish to convert it. If the right hon. and gallant Gentleman says it is only intended that this should apply to the one prospectus which has already been issued on the 29th December, I suggest that the proper thing to do is to say so in this Clause and not to leave it in doubt, but to put into the Clause on the Report stage the words "contained in the prospectus issued on" such and such a date. But that means he will make it quite clear to everybody what is being dealt with and that this Clause cannot be used for any subsequent deal.
I can understand the difficulty of the Front Opposition Bench. They are so used to badly drafted Bills in the last two years that they cannot understand a Bill which is drafted properly. All that can be done under the particular Clause is that the Government, having regard to a particular loan, can cancel it rather more quickly than before or rather more slowly. Those are the only things that we are concerned with under this Clause. The Opposition finds such grave difficulty in getting it into their minds. It seems a very simple thing if they would only read it carefully. I really think it is a very simple Clause which they cannot properly object to. It is merely a matter of drafting, and I do most strongly object to sitting up late at night at any time because the Opposition want to see a certain amount of time taken up.
The Committee will be very indebted to the hon. Member for Torquay (Mr. C. Williams) for the enlightenment he has thrown on the problem. We all welcome his intervention in Debate on all occasions because he makes everything so clear to us. Nearly everyone who has spoken has offered advice to the Government. I am going to take the humble course of asking questions. I know very little about these problems and do not want to display my ignorance. When we were on Clause 10 we were told we were dealing with external debt. On Clause 19 we are dealing with internal debt. I believe, when any of these funds are converted, the Government always obtains an advantage in this way. They issue notices to all bondholders—
rose—
I hardly thought I should be out of order so soon. I wondered whether it was possible on this Clause to get to know whether the Treasury in fact benefit by removals and deaths and by the fact that people are not to be traced.
This is merely giving power to the Treasury to cancel certain debts. I am afraid the general question of the internal debt cannot arise upon this.
I was asked a specific question by the hon. and learned Gentleman the Member for East Bristol (Sir S. Cripps.) He said, "Why say any prospectus?" You should say, "the prospectus of 28th December, 1926." There was only one issue of a prospectus but there were millions of copies. The undertaking was contained in each of these prospectuses that we desire to honour, therefore, it is necessary to have "any prospectus." This is in fact a common form which we are carrying out. The right hon. and learned Gentleman warned me to beware lest in any future prospectus I might be bringing myself within the terms of this Clause. We shall note the warning and take care that we do not run any risk of doing something inadvertently now that he has drawn our attention to the danger.
Question, "That the Clause stand part of the Bill," put, and agreed to.
Clause 20—(Extension Of 5 And 6 Geo 5 C 93 S 5 To Isle Of Man)
Motion made, and Question proposed, "That the Clause stand part of the Bill."
I should like to ask what is the meaning of this Clause. If I appreciate it rightly, it is this. The Treasury is to be given power to issue regulations in respect to the Isle of Man. But it is the last four or five words that puzzle me, because that right of the Treasury is deemed to have extended to all time. Does that mean that the Treasury have been acting illegally in making these regulations ever since 1915? If that is so, the House ought to be told.
May I raise another question. Is this some device by which the right hon. Gentleman, through the medium of the Post Office, is going to lay his hands upon the savings of the people and, if so, will he give an undertaking now that that money will not be used for improper purposes, such as investment in the Unemployment Insurance Fund and matters of that kind? I feel, in view of what he and his party said at the last election, that, unless the people in the Isle of Man are given some very definite assurance that this is not a means of nationalising their savings and of abstracting a few loose pennies from the poor widows, they will expect him to do something upon this Clause and to explain whether in his view savings can safely be made through the Post Office or whether he has made any alteration in the way those savings are to be dealt with.
I can sympathise with and fully appreciate the zeal of the hon. and learned Gentleman the Member for East Bristol (Sir S. Cripps) that nothing derogatory to Post Office savings might be carried out. We know that his party have great feelings about it, but there is no danger of that kind in the present proposals. In answer to my hon. and learned Friend the Member for Central Nottingham (Mr. O'Connor), the reason of the Clause is to restore a provision which was repealed in error by the Statute Law Revision Act, 1927. He asks if we have been acting illegally since that time? We have not been acting illegally since no one has taken advantage of those provisions, but in order to observe the most stringent financial purity we are taking steps to repair the error unless at any time one of those little ones should be offended. We are putting in regulations to extend to the Isle of Man. By inadvertence the application of the whole of the War Loan Supplemental Provisions were repealed in the Statute Law Revision Act, 1927. Although we put it right as far as the Post Office was concerned by the Savings Bank Act, 1929, we need the present Clause to repair the mistake with regard to regulations. It is for the convenience of the inhabitants of the island that they should be able to make use of those regulations. It is possible that a difficulty might arise in the future, and the Clause is in order to put the matter right.
Question, "That the Clause stand part of the Bill," put, and agreed to.
Motion made, and Question, "That the Chairman do report Progress, and ask leave to sit again," put, and agreed to.— [ Captain Margesson.]
Committee report Progress; to sit again To-morrow.
Finance Advance To Road Fund
Considered in Committee under Standing Order No. 71A.
[Sir DENNIS HERBERT in the Chair.]
Resolved,
"That for the purpose of any Act of the present Session relating to finance it is expedient—(a) to provide that there may, subject to the approval of the Treasury, at any time within the current financial year, be advanced to the Road Fund put of moneys provided by Parliament (in addition to any sums advanced under Section twenty-seven of the Finance Act, 1928) such sums, not exceeding in the aggregate two million seven hundred and fifty thousand pounds, as may be required for the purpose of making any payments falling to be made out of the Road Fund on account of expenditure incurred in respect of the construction or improvement of road's within the meaning of the Development and Road Improvement Funds Act, 1909, which cannot be met out of the income of the Road Fund; (b) to make provision for the charging on the Road Fund, and for the repayment of any sums so advanced, together with interest thereon."—(King's Recommendation signified.)—[Mr. Pybus.]
Resolution to be reported To-morrow.
Gas Undertakings Acts, 1920 And 1929
Resolved,
"That the draft of a Special Order proposed to be made by the Board of Trade under the Gas Undertakings Acts, 1920 and 1929, on the application of the Shanklin Gas Company, which was presented on the 25th day of April and published, be approved.''—[Mr. Hore-Belisha.]
Public Health (Cleansing Of Shell-Fish) Bill
Not amended (in the Standing Committee), considered; read the Third time, and passed.
The remaining Orders were read, and postponed.
Adjournment
Resolved, "That this House do now adjourn."—[ Captain Margesson.]
Adjourned accordingly at Eight Minutes after Eleven o'Clock.