asked the Secretary of State for Foreign Affairs if he can make a statement regarding the release of the British officers of the steamer "Nanchang?"

According to the latest reports, negotiations with the bandits for the release of the captives, which had previously broken down, were resumed on the 11th of this month. These negotiations are now proceeding. His Majesty's Representatives concerned have been untiring in their efforts and are maintaining constant touch with the local authorities.

asked the Postmaster-General whether his attention has been called to the frequency of interference with wireless broadcast reception owing to electric tramway and trolley omnibus services; and what steps he proposes to take to safeguard the interests of listeners-in?

It is common knowledge that electric tramways and trolley omnibus services can cause serious interference with the reception of wireless programmes and that the difficulty can only be cured economically at the source. The Post Office is always ready to assist in devising and demonstrating suitable remedies; and, in general, it finds that the owners of the traction services are willing, in the interests of their customers in the locality, to make such comparatively small modifications of their plant as may be necessary to meet requirements. It has, however, at present no statutory power of insisting on the application of remedial measures; and it may be necessary to seek such powers in future wireless legislation.

While thanking my right hon. Friend for his sympathetic reply, may I ask him whether it is not the case that some municipal authorities recognise the duty of correcting this interference caused by their electricity services; and, in view of the evasive propensities of some other local authorities, will he take whatever steps he can immediately to remedy these defects, or ask this House to give him further authority as speedily as possible?

In a very large number of cases the corporations concerned do help in this matter, but I regret to say that in one or two instances—in one of which, I think, my hon. and learned Friend is interested—the corporations concerned have not yet seen their way to help, though I am hopeful that they will recognise their public duty in this connection.

Would it not assist the case in Nottingham if the right hon. Gentleman supplied the corporation with half-a-dozen prevention devices instead of the one which he has offered?

I am not quite aware of what my hon. and learned Friend has referred to, but in Nottingham it would entail only a very small expenditure by the corporation to meet the difficulty.

Will the right hon. Gentleman ascertain whether it is not the case that some time ago the town clerk of Nottingham offered to use half-a-dozen of these devices to test the matter if they were supplied?

I will make inquiries.

Is it a fact that the interference is caused solely where there has been a transfer from the ordinary electric tramways to trolley trams?

I should not like to assent to that statement.

asked the Minister of Health what progress is being made in the better housing campaign in rural areas, especially as regards the fuller use of the reconditioning Act of 1926 and the Slum Clearance Act of 1930?

I have recently issued Circulars on the subject to all rural district councils in England and Wales, copies of which I am sending to my hon. Friend. It is, however, too early yet for any recently increased activity to have taken shape in the form of concrete proposals submitted to me.

Has the right hon. Gentleman in prospect anything like a conference with these local authorities or their London representatives with a view to speeding up the better housing campaign?

I think the purpose which might be served by a conference has been better served by the circular to which I have referred.

Do we understand that housing activities in rural areas had completely ceased prior to the dispatch of this circular?

By no means.

asked the Secretary of State for Scotland if he can make a statement with regard to the dispute in the herring-fishing industry; and whether he has considered the advisability of his intervening to try to bring it to an end?

I understand that meetings of the two associations interested are being held in Aberdeen to-day, and I hope that as a result of these meetings the difficulties which have arisen will be surmounted. As regards the second part of the question, I may say that the Fishery Board wrote on the 10th of June to both associations urging the setting-up of a joint committee for the discussion of the questions at issue between them, and on Friday last they telegraphed emphasising the necessity of the immediate appointment of a small negotiating body. The chairman of the Fishery Board is in Aberdeen to-day and is prepared to render any assistance possible. I would only add that I am always ready to give such help as I can in the interests of the industry.

Will the right hon. Gentleman consider suggesting to the parties that they should pay the sum in dispute into a suspense account, leaving its ultimate destination to be decided later, and meantime allowing the fleet to proceed to sea?

The proposal mentioned by the hon. Gentleman is being considered to-day, and, in view of that fact, I think that any expression of opinion on my part might not be tactful.

asked the Secretary of State for the Home Department whether, in drawing up any legislation in connection with the report of the Royal Commission on Lotteries and Betting, he will take into account the desirability of ensuring that the Racecourse Betting Control Board shall be able to operate under conditions which will ensure a surplus and the allocation from that surplus of funds for the benefit of horse breeding and horse racing?

The consideration to which my hon. Friend refers is one of the considerations which His Majesty's Government will no doubt take into account when studying the recommendations of the Royal Commission.

Can my right hon. Friend give an assurance that he will bear this in mind when examining the recommendations, particularly regarding the position of tote investors?

Can the right hon. Gentleman state when the Government intend to bring before Parliament any legislation based upon some or the whole of the recommendations of this Royal Commission?

The answer to the last supplementary question is, No, Sir, certainly not. As to the other supplementary question, all these matters will be taken carefully into consideration.

asked the Home Secretary if he is now in a position to make a statement with regard to the Committee on Imprisonment for Debt?

I would refer to the reply given by my right hon. Friend the Parliamentary Under-Secretary to the hon. Member on Thursday last, to which I am not yet in a position to add anything.

asked the Chancellor of the Exchequer whether the Treasury embargo against the purchase in London of foreign-owned securities extends only to certain classes of such securities and only to large blocks of such securities, or whether it extends to all foreign-owned securities of whatever kind or amount?

The terms of my right hon. Friend's request, published on the 17th May, related to the purchase of large blocks of foreign-owned securities of all kinds—whether of British concerns or otherwise—with a view to sale in this country. He did not attempt to define precisely what was meant by a large block of securities, and he requested that, in any cases of doubt, inquiries should be made of the Treasury. Since then he has had occasion to address to the Chairman of the Stock Exchange a letter intended to clear up certain misunderstandings, and I am causing a copy of that letter, which has already appeared in the Press, to be circulated in the OFFICIAL REPORT.

Does the letter to which the hon. Gentleman referred apply the embargo to purchasers of all amounts, or only to large blocks of securities?

I would prefer to refer my right hon. and gallant Friend to the terms of the letter itself.

I have seen the letter already.

Would it not be advantageous to strengthen the embargo, in order to protect the British public against losses such as they have recently suffered because of the default on contractual obligations by foreign borrowers?

(for Mr. THORNE) asked the First Commissioner of Works whether he will reconsider the decision to stop the privilege of funeral leave granted to the industrial staff of his Department, in view of the fact that this concession has been granted for many years, and that, covering the 2,500 men affected, the saving will not amount to more than 30 days' pay a year on the average?

The decision was taken, in consultation with the Treasury, only after full consideration had been given to the representations of the Departmental Joint Industrial Council. The saving admittedly will be small, but the determining factors were that the concession did not operate either in any other Government industrial establishments or in outside industry generally. There are, in my opinion, no adequate grounds for according exceptional treatment to the staff of one Department, and I regret that I am unable to find myself justified in modifying the decision.

Surely this is an innovation, and ought not, on grounds of economy, to be effected?

The decision was taken in order to bring one anomalous Department into line with all other Government Departments.

Is it not the fact that many large employers outside concede to their employes a right to attend a funeral without a reduction of wages; and does the right hon. Gentleman not think that the anomaly could have been removed by conceding to other Government Departments this small privilege?

I have no power to do anything with regard to other Government Departments. In the Civil Service, all Departments must, obviously, be upon a fair and equal basis.

Is it not possible for the Minister to stiffen his back in regard to this matter?

I have gone personally into the matter and I do not think, having regard to the general practice, that I should be justified in seeking to press the Treasury to apply to all other Government Departments the concession which has been granted in my Department.

(for Mr. COCKS) asked the Secretary of State for Foreign Affairs whether he can make any statement respecting the position in Austria and the relations between the Governments of Austria and Germany?

His Majesty's Government are watching with interest and sympathy the efforts which the Austrian Chancellor is making not only to establish the finances of Austria on a sound basis but also to maintain the authority and independence of that State. Hon. Members will have read in the Press of the recent incidents which have, I regret to say, led to a deterioration in the relations between Germany and Austria. His Majesty's Government are observing the situation closely and trust that a speedy means may be found to remove the causes which have led to friction between the two countries.

(for Mr. THORNE) asked the hon. Member for Central Leeds, as representing the Ecclesiastical Commissioners, the income drawn by the Commissioners from lands in Paddington for each of the last three years and the corresponding average annual income for the five years 1900 to 1905?

The income derived by the Ecclesiastical Commissioners from what is called the Clarendon Street Area, Paddington, leased to the Grand Junction Canal Company, is less than £200 per annum and has not varied for more than 100 years.

The income derived by the Commissioners from other property in the Borough of Paddington, most of which is of a high-class residential character, has been, during the last three years: 1930, £62,700; 1931, £69,500; 1932, £70,000. The average income for the five years 1900 to 1905, was £25,550.

(for Mr. THORNE) asked the Home Secretary whether he is aware that the delay in issuing the necessary regulations for the administration of the Metropolitan Police (Staff Superannuation and Police Fund) Act, 1931, is causing hardship to certain retired officers; and whether he will issue the regulations forthwith, or, alternatively, sanction part payment in anticipation thereof?

These regulations were made on 9th March last. If the hon. Member has any particular case in mind, I will have inquiries made, if he will give me particulars.

(for Sir PERCY HARRIS) asked the Chancellor of the Exchequer whether, in view of the condition appearing in the prospectus of the German External Loan of 1924, issued by the Bank of England, to the effect that for the purpose of providing the necessary foreign currencies for the service of the loan the German Government, the Reparation Commission, the Transfer Committee, and the Agent-General for Reparation Payments agreed that funds required to be sent abroad for that purpose should have an absolute right of remittance, which right should have priority over the remittance of funds required to be remitted in discharge of reparation payments or other liabilities, he will protect the rights of the German External Loan 1924 bondholders and prevent the utilisation of any funds remitted from Germany for meeting subsequent liabilities, whether short-term loans or debts under the standstill agreement?

I would refer the hon. Member to the official report in the Press of the meeting held on 16th June between the President of the Reichsbank and representatives of long-term creditors of Germany, which includes the following statement:

"It was strongly advocated, and no objection was raised, that the service of the Dawes Loan should have absolute priority over other transfers."

I beg to move, "That the Clause be read a Second time.

This Clause represents the fulfilment of the undertaking given by the Chancellor of the Exchequer during the Committee stage with regard to relief from the payment of Heavy Oil Duty on the fuel oil used by coastwise shipping, pilot cutters and ships on trials. My right hon. Friend, during the Committee stage, further promised to consider whether he could include estuarial and harbour craft within the terms of the concession, that is to say, whether tugs and lighters in, for example, the Port of London might also enjoy the exemption given to coastwise shipping. He has decided the matter in the affirmative, and, accordingly, these craft are also included, because, after all, they are really ancillary to shipping.

The reasons given by my right hon. Friend for making this concession were, first, that the tax, if it were allowed to remain upon coastwise shipping and the other categories of shipping which I have mentioned, would affect that shipping detrimentally as compared with its foreign competitors; secondly, that shipping does not enjoy the protection which other in- dustries enjoy; and, thirdly, that the cost of fuel is a heavier item in the case of shipping than, perhaps, in the case of any other industry. The Clause applies to all heavy oils used as fuel for the machinery—whether the propelling or the auxiliary machinery—of a vessel while engaged in a voyage in home waters. A voyage in home waters is defined in Subsection (4) of the Clause as a voyage on which the vessel is at all times either at sea or within the limits of a Customs port. Vessels clearing for foreign ports are, of course, already exempt. The term "Customs port" implies more than the ordinary use of the phrase "port." The whole coastline of the United Kingdom is included within the limits of one Customs port or another; where one ends another begins. Landwards a Customs port extends up rivers to the limits of navigation unless otherwise specifically defined. Therefore, the net result of the use of the term "Customs port" is that the exception will apply to any vessel other than a pleasure yacht proceeding from one port to another in the United Kingdom, going from and returning to the same port, and working within the limits of a port, but it would not include vessels employed on inland navigations.

Would it not apply to canals as a means of going from one port to another?

I have given the definition. It does not apply to inland navigations. For instance, it does not apply to the Thames above Teddington Lock, and it does not apply to inland canals. It does, however, apply to the Manchester Ship Canal, the Caledonian Canal, and the Clyde and Forth Canal, because the traffic on those canals mainly consists of sea-going vessels.

:Might I ask the hon. Gentleman, for the sake of greater clarity, whether it would include vessels like tenders, which are ancillary to both coastal and foreign-going shipping? Although they may never leave the harbour, they are absolutely essential to both coastal shipping and foreign shipping.

Certainly; it will include any shipping within the customs port, and I have defined what a customs port is. It does not matter whether they are ordinary coasting vessels or ancillary vessels.

Would not my hon. Friend include the Crinan Canal, which is a short canal between one sea and another, being itself really a part of the sea?

I cannot do that. It is a concession for coastwise shipping and all that can be brought within the ambit of that phrase. Every J kind of craft using a customs port, excluding only those on inland waterways, will receive the benefit of this concession.

As to the machinery for exemption, the Clause provides two alternative methods of relief. By Sub-section (1), if the oil be supplied from duty-paid sources and if no drawback is payable, as it would be if the oil were being exported as merchandise or as ship's stores, the owner of the vessel will be entitled to claim repayment of the duty provided that the oil has been used as fuel in the manner described. No claim for less than £5 will be entertained. That means that, if there be a claim for less than £5, the owner will have to accumulate his claims until they exceed that figure. £5 is made the limit in order to avoid a multiplicity of small claims. The second method of relief is that the oil may be shipped from a duty-free bonded warehouse or installation, and this is the normal method.

The cost to the Treasury of this concession is £100,000, as closely as it can be estimated. The relief covers the whole period since the 25th April, when the duty came into force on the passing of the Resolution. Arrangements are already in force under which oil fuel may be shipped free of duty on an undertaking to pay if the Clause should fail to pass. Where duty has been paid, repayment claims will be made when this Clause becomes law. The reason why the 12th June is mentioned in the Clause is that the arrangements for duty-free issue did not come into operation until after that date, but, nevertheless, the concession will begin retrospectively as from the 25th April. I trust that I have made the purport and details of the Clause plain to the House, and I have every reason to believe that it will be regarded as satisfactory.

I think the House is indebted to the Financial Secretary for the clear way in which he has put the case for the Clause. He skipped over, however, one point in it, and I am beginning to wonder whether the Government are not going to lose some friends, because I notice that the relief is not to be given to the owners of pleasure yachts. I think that the hon. Gentleman ought to explain that point a little further. I rose, however, to ask the hon. Gentleman a very simple question. He said that this relief would not apply to ships and boats plying on canals within this country. While it is obviously true that the vast majority of shipping going from the ports of Liverpool and the Manchester Ship Canal will be shipping that goes far away overseas, there are ships which will ply merely between Liverpool and Manchester, and which, consequently, will not go overseas at all. May I take it that these small ships plying between one port and another on a canal will secure relief in the same way as ships plying in home waters? [A ship coming from Aberdeen to London, for instance, would secure relief, and it would be unfair if that ship secured relief and a ship plying between Manchester and Liverpool, simply because it was plying on a canal, did not get the same kind of relief.] If the hon. Gentleman will be good enough to put that matter a little more clearly, I shall be very much obliged.

The answer is "Yes."

I beg to move, "That the Clause be read a Second time."

This is not the first time that this matter has been debated during the past eight or 10 years. In order to understand the proposal contained in the Clause, one has to bear in mind that Section 16 of the Finance Act, 1919, clearly laid it down that pensions for wounds, disablement, or disability granted on account of military service, etc., and allowances in respect of children granted by the Minister of Pensions to widows of members of the naval, military or air forces are exempt and should be omitted from the returns for Income Tax purposes. But a pension paid to the widow of a man who was killed or died as the result of wounds received in the War has to be taken into account. There has not been a great deal of controversy with regard to this matter for the last year or two, but the fact of the personal allowance being reduced to £100 has brought many war widows into the position of paying Income Tax for the first time. I have here a letter from a war widow drawing a pension of £132 a year who has for the first time to pay Income Tax amounting to about 12s. 6d. She has brought up a son, who is now out of work, and whose application for transitional payment has been turned down because of the mother's pension. She is, therefore, more or less suffering under a double burden. It may be argued that widows of ex-service men ought not to be treated differently from other persons. I should be the first to admit that the difficulty would be removed if the Chancellor of the Exchequer had seen his way clear to raise the personal allowance above £100, but he has resisted any alteration of that amount. I submit that there is a difference between war widows and other people receiving similar incomes. Parliament has recognised for a number of years that an ex-service man himself is entitled to this extra consideration, but the moment he dies this has to be taken into account for the purposes of his widow's pension.

I beg to second the Motion.

I should like, first, to ask the Financial Secretary what approximately would he the cost of this concession. If he will tell the House that and the Lord President of the Council will allow a free vote, there is not a doubt as to the result of the vote if the hon. Gentleman should be stubborn, but I do not think from the smile on his face that he intends to be stubborn. While an injured husband still lives, his disability pension is not taxable, but the moment he dies the pension paid to the widow becomes taxable. If that is not an anomaly, I should like to know what an anomaly is. I hope that, in replying, the Financial Secretary will bear in mind the implications of the next new Clause on the Paper. Imagine a war widow in receipt of a pension of £135, with a son falling out of employment. He exceeds the period of normal benefit and applies to the public assistance committee for transitional payment, but is disallowed because the mother is in receipt of a widow's pension. The sum allocated out of the pension for the maintenance of the unemployed son is taken into consideration for Income Tax purposes and no allowance is made. A married man with one child is made a £40 allowance in respect of the child, but no allowance at all is made to a widow with an unemployed son. Clearly the Treasury are getting it both ways. It would be much more honest to reduce the widow's pension than to give it with one hand and take it back with the other. In all the circumstances, this seems to me a fair and legitimate proposal, and, in view of the fact that these widows are and must continue to be a diminishing quantity—obviously, there are fewer war widows than there were a few years since—it is a concession that the hon. Gentleman could make without upsetting the balance of the Budget. It is merely granting a measure of fair play to women who, though perhaps not suffering physical disability, are certainly suffering from a disability in so far as they have lost their husbands.

The Mover and Seconder seem to have made out a good case, but the Clause contains the phrase "including Super-tax," which rather detracts from it.

We put in "Super-tax" deliberately. We did not want a charge to be levelled against us that we merely wished to get concessions for those in the lowest ranks. If there should be a widow in receipt of a pension for the loss of her husband paying Super-tax we have no objection to her having the advantages of the same concession.

The hon. Gentleman who moved the Clause so persuasively said that he had no doubt that if the matter were left to a free vote of the House the concession would be carried. That may or may not be the case. It is always possible to elicit sympathy on behalf of hardship. The House will observe that the hon. Gentleman, and the hon. Member for Don Valley (Mr. T. Williams) spoke in general terms. There are very few widows indeed dependent upon a pension who could possibly be affected by the Income Tax law? The poor widow living upon her pension has to have means in excess of £125 a year before she becomes assessable for tax. Only a small minority of the pensions granted to widows are in excess of that sum. The House will appreciate then that we are dealing with a very limited number of cases, and, as we are dealing only with a limited number of cases, I can answer the question of the hon. Gentleman as to the cost without shocking the feelings of the taxpayers, perhaps by telling him that the cost would be £80,000 a year.

I have said that only a very small class of persons would benefit if the Clause were carried. I see no ground of principle why the Clause should be carried. The hon. Gentleman reminded the House that year after year the Clause has been put down, and that successive Chancellors of the Exchequer of whatever political complexion have rejected it. An exemption from Income Tax is given to pensioners drawing a pension in respect of war wounds, which is to compensate them for their actual physical suffering. This, however, is a pension, pure and simple, and must be treated the same as any other pension. What would be the grievance of an ordinary widow, not a war widow, who had lost her husband in distressing circumstances and who would be deprived of the advantages which the hon. Gentleman wishes to concede to war widows? The fact is that, whether a woman has lost her husband in war or as the result of an accident, she is indeed suffering hardship if she is poor, and I do not think that it would be just for the Legislature to differentiate between two widows in exactly the same unfortunate circumstances. Once concessions such as this are made no limit can be put to them. There are a multiplicity of grievances in the community. There are heavy burdens to be borne, and what the Exchequer must do is to observe, as far as possible, sound principles and canons of taxation. Once we allowed privileges such as that which the hon. Gentleman suggests we should be deprived of any armour we might have to resist further concessions. Now that I have reminded the hon. Gentleman that successive Chancellors of the Exchequer of previous Governments have rejected the Clause, I trust he will not press it to a Division.

The House will have noticed at once the difference in the attitude of the hon. Gentleman towards the proposed new Clause and his collapse under the pressure of his own party in connection with the previous Clause which he carried through the House a moment or two ago. If the pressure from his own party is strong enough at any time, the Treasury can make all manner of arrangements to carry through their Budget and balance it. The hon. Gentleman has given away the whole of his case. First of all, he said that we are asking for concessions that would cost £80,000 per annum. If it would only cost £80,000 per annum, how comes it that he resists the Clause when the Government gave £14,000,000 to the beer drinkers without any ado at all He talks about the canons of taxation and of the need of balancing the Budget, but if he resists a Clause involving a concession of £80,000 per annum when the Government have given away £14,000,000 so very easily, we cannot have very much regard for his suggestion about principles.

He made one observation with which I must deal. He discussed the difference between the poor widow who had lost her husband outside war service, and the widow whose husband fell in the War. Surely, there is an acknowledged difference there to start with, and the State has always recognised it. If the State had regarded all widows alike, then the allowance paid by way of Workman's Compensation to the widow of the collier who went to his death in the pit ought to be the same as the pension payable to the widow of the man who fell in the War. He said that this must be regarded as an ordinary pension. There is a widow. She has not suffered injury herself, but she has suffered the loss of her husband. I do not want to criticise the hon. Gentleman unduly on that score, but this fact has to be considered in that connection. Not only has she lost her husband, upon whom there was an economic value, but she has suffered something deeper than merely the loss of the earning power of her husband. What about the State granting her something by way of solace for pain suffered?

The hon. Gentleman has not done himself justice in resisting this new Clause. He asked what other widows would say? The difference in the treatment by the State of widows is already sufficient to warrant another anomaly if that be necessary in order to carry the proposed new Clause. I do not think that any widow would in the least complain if the Clause were carried in order to help the widows of men who fell in the War. I know of no one. Consequently, when we have the hon. Gentleman and the Chancellor of the Exchequer so freely giving £14,000,000 per annum to the beer drinkers, and resisting a concession of £80,000 per annum, we are entitled to press the Clause very much further than we have done already. There is another fact to bear in mind. When the hon. Gentleman talks of anomalies, let me call attention to the 7s. 6d. disablement benefit under the National Health Insurance Scheme. When the means test was applied by local authorities and public assistance committees, they disregarded the 7s. 6d. entirely, because they came to the conclusion that there ought to be consideration not only for the fact that the poor recipient had been disabled, but also for the fact that he was suffering pain and distress consequent upon having been placed outside industry for good. There is therefore no point of principle at all in the hon. Gentleman declining to accept the Clause, which is a very reasonable one. The hon. Gentleman said that Chancellors of the Exchequer of every political colour in the past had declined a Clause of this kind, but I do not remember any Chancellor of the Exchequer at one and the same time giving £14,000,000 to the beer drinkers and resisting such a Clause. Consequently, we are entitled to press the Government to accept our proposal. The total revenue of the country is £750,000,000 per annum, and we are told by the hon. Gentleman that a paltry sum of £80,000 per annum would upset the equilibrium of the Budget. I cannot believe it for a single moment.

I hope that the Financial Secretary to the Treasury will re- consider his decision. I was somewhat amazed at the arguments he put forward' He told us that because certain widows of men who had lost their lives in other ways than in war do not obtain exemption from Income Tax, no War widow should have the exemption. May I remind him that two wrongs do not make one right. If he makes this one concession it will give some of us who believe that the other concession ought to be made an argument for gaining that other concession from the Chancellor of the Exchequer at another time or from some future Chancellor of the Exchequer.

The fact that the hon. Member regards this hardship as one of a multitude of hardships proves that he considers that it is a hardship. He says that to redress this hardship it would cost £80,000. That is a very small sum compared with the amounts that the Government have given away. It is estimated by the Chancellor of the Exchequer that the concession just made in respect of heavy oils will cost £100,000, but the estimate of those who have had experience in the operation of this tax puts the figure at a much higher sum. The Financial Secretary also says that if he grants this concession he will be deprived of his armour in resisting efforts to redress other injustices. It is rather a poor argument that if one hardship can be redressed he will be deprived of his armour in resisting other hardships when an application is made that the burden of those other hardships should be eased.

I hope he will take this matter back and consider whether some concession could not be made to the widows affected. May I remind him that the point he made with regard to two women losing their husbands, one being a war widow and the

The hon. Member has suggested that Cabinet Ministers receive high pensions. Will he say how many ex-Cabinet Ministers are receiving pensions at this moment?

I do not know any, but I know that they are entitled to receive pensions and I believe that many of them do. If I had the opportunity of making inquiries I might obtain definite information, but I believe there are now ex-Cabinet Ministers drawing pensions.

There is not a single ex-Cabinet Minister or Minister of any sort who is now drawing a pension. No such pension has been granted for many years.

Would it not have paid the country to have pensioned off all the Cabinet Ministers in the last Government?

I beg to move, "That the Clause be read a Second time."

A similar Clause brought forward last year was not successful, but I hope that it is going to have a better fate this year. The Financial Secretary to the Treasury, in dealing with the last Clause which we discussed, said that it was easy to mention hard cases. We are not basing this Clause merely on hard cases, but upon fairness and justice. We believe that the present practice is monstrously unfair. Under the means test the whole of the income of a household is taken into consideration, and we find, in many cases, after that has been done, some member of the household is called upon to pay Income Tax. We say that if the income of the household has been taken into account in order to reduce or refuse transitional payment, then to that extent a member of the household ought not to be called upon to pay Income Tax. After the Budget Debate last year, I had a case sent to me by a nephew. He had been receiving 23s. 2d. a week for himself and wife as transitional benefit. He had a son whose earnings were taken into consideration, with the result that his transitional benefit was reduced from 23s. 2d. to 5s. per week. Afterwards the son was served with an Income Tax notice. That nephew could not understand how, on the one hand, his transitional payment should be reduced by such a large amount, and then, because of the son's earnings, the son should be called upon to pay Income Tax.

I submit to the Financial Secretary that the Treasury cannot have it both ways. They ought not to reduce transitional payment and then call upon some member of the household to pay Income Tax. I know that the hon. Gentleman may say that we are asking too much when we ask for an exemption of £50, but I would like to hear the hon. Gentleman argue that point. There is no question, however, that when transitional benefit has been reduced because of the earnings of a member of the household, some allowance ought to be made to that member when called upon to pay Income Tax. The chief argument of the hon. Gentleman on the last Clause was that successive Chancellors have rejected it, but he cannot argue in that way in regard to this proposed new Clause, because the only Chancellor of the Ex- chequer since the means test has been the present Chancellor, who is responsible. Not merely on the ground of hardship, although we could argue on that ground, but on the grounds of fairness and justice, the Chancellor of the Exchequer ought to accept this Clause, and relieve from the payment of Income Tax a certain amount of income which has been taken into account to reduce transitional payments.

I beg to second the Motion.

When this proposal was brought forward last time, I think it was argued that the new Unemployment Bill would soon be out, and naturally we hope that in that new Unemployment Bill the means test will have disappeared. But that is not so yet, and we are faced with this difficulty. My hon. Friend did not speak solely on the ground of hardship, but I am afraid that my contention will be on the sole ground of hardship. Many of our people are suffering unduly because they are suffering under two heads. They have to bear Income Tax and, if they have a dependent relative out of work, they have to contribute out of their earnings. Under the Income Tax law a sum up to £25 is allowed for the relief of a dependent relative, and the member of the family in a case such as this has the right to expect the same kind of treatment. I am expecting an answer from the Financial Secretary to the effect that it will be very difficult to assess this sort of case, as a man might not be out of work 12 months, and therefore the assessment of dependency could not be arrived at.

I agree that there is something in that contention, but could we get from the hon. Gentleman a promise that if the relative is out of work, say, more than a half of the year—seven, eight or nine months—he will consider putting him under the category of dependent relative. If we can get some concession at all, some regard from the Treasury as to hardship in this case, we will be satisfied, but we do think that the Financial Secretary ought not to be able to ride off, as on other occasions, upon the difficulty with which he has to contend if he allows any loophole with regard to this matter. My hon. Friend also used the argument, which needs emphasising, that no other Chancellor had any need to deal with this question, as the means test question belongs entirely to the present Government, and, in view of the position which they have created, something ought to be done for these people.

I will mention some cases of hardship, because I know the House likes definite cases when a matter like this is brought forward. I know, from my own experience, many families where sons or daughters have cost a good deal of money to educate, and they have got teachers' salaries. They have to pay Income Tax out of those salaries, and also keep a dependent father who is out of work. I know some such cases in my own locality. I could mention three different cases where the father has been able to send a child to college, and did all he could in that direction. Then the son or daughter has got a teaching position, and the father, unfortunately, has got out of work and, because of the earnings of that son or daughter, has been knocked off transitional payment. There are many other such cases which should be treated as leniently as possible by the Treasury. I hope, therefore, we shall meet with some satisfaction from the Financial Secretary when he replies.

I wish to support the Clause, and, in doing so, I have very clearly in my mind the words spoken by the Financial Secretary when the matter was raised last year. The Financial Secretary was then quite sympathetic with the object which the Clause seeks to secure; in. fact, it would be impossible for anyone who understands the Clause to be unsympathetic towards what it seeks to achieve. But the Financial Secretary pointed out, as indeed he was bound to do, that in making these allowances for Income Tax the Commissioners were dealing with periods of 12 months. In this particular case the liability brought about by the means test may be for a fluctuating period. It may run for months, and in many cases for years. But the Financial Secretary last year said that they were watching this matter, and that, so far as the machinery of the Income Tax law would permit, they would do everything they could to meet the situation, and, if I remember rightly, he said that in the case of a family supported by an employed member of that family, where there were younger children in the family, they might be regarded as adopted children, and allowance be made for them. I should like to hear what it has been possible to do, administratively, to deal with that matter.

This is not merely a financial matter. Many important social problems arise from the administration of the means test as it exists to-day. Take the case of a printer who receives a weekly remuneration of between £4 and £5 per week. He has to maintain, under the operation of transitional payments, his father and mother, one older brother and two younger children; and he has been doing so for months. That is a very hard task. He cannot have any idea of marriage as long as he remains at home, his income is all absorbed in the maintenance of the family. To his consternation and dismay he receives a letter from the Income Tax people calling for the payment of an amount which is equivalent to about two weeks' remuneration. That is a situation which hon. Members will agree was not intended. In addition it is not good business from the point of view of the State. It is, of course, possible for him to contract out of the liability. He can leave home and, unfortunately, some of these people are being actually driven from home because the strain is too much. They can also contract out of it in another way. They can take their weekly wage and pay it over, and then present themselves to the public assistance authority and ask for relief.

This is clearly a case in which the administrative arrangements of the State are at cross purposes. It is not a question of sympathy; it is a matter which should be put right, and it is for the Treasury to find some way out of the difficulty. It is a great hardship and is having an important social effect, as it is putting a great strain on family relations. I hope the Financial Secretary will indicate that something will be done in this matter. I do not know whether this particular Clause is the best way in which it can be effected but I have no doubt that hon. Members are willing to accept another and better form of words. Hon. Members on these benches have a proposal on the Paper which we think is rather better than this, but it is really a matter to which the Treasury should give careful and sympathetic consideration.

I desire to support the Clause which embodies a principle that has been well recognised in finance by successive Governments; the principle of making allowances for dependents. A person who has a dependent relative is allowed £25, and allowances are also made for children who are dependent. But in respect of those who are thrown on the income of one member of the family it is hard that the particular member who happens to be in employment and above the Income Tax limit should have a double burden imposed upon him. It is a burden which is not fair, because it is a special burden imposed upon a special section of the community. This burden can only fall upon certain individuals in the community, that is, those who have a comparatively small wage and who are called upon, because of the operation of the means test, to contribute towards the support of other members of the family. Persons who are in that position who are being compelled to support other members of the family under the means test should, at any rate, be given some recognition by the State; some little encouragement should be given to keep the family together and the home intact. Sons and daughters are anxious to help their parents, to keep them under the same roof, but if taxation is made too heavy, if the burden is too hard, they have an easy way out, they can leave home and allow the old people to become a burden upon the community as a whole.

This is a new situation which has developed during the last two years; and no particular precedent would therefore be established. These people should not be subjected to too much hardship, and I appeal to the Financial Secretary to find some way of giving them assistance. He knows as well as I do that the people who are most concerned, that is, the old people, the parents, who are unemployed, are likely to be unemployed year after year. It is not like the old problem of a man being unemployed for a few months and then getting another job. It must also be borne in mind that many of these unfortunate people now on transitional payment have been good citizens, decent members of the community, and have made sacrifices in order to give their children a decent education and a better chance in life than they had themselves. But things have turned out badly, and they are no longer wanted in the particular industry in which in days gone by they earned considerable salaries. Their children want to do something for their parents in return for the sacrifices they have made; and are willing to do so. Therefore, I think they have a special claim for consideration. I suggest that some rebate should be made in those cases where people have had to contribute towards the maintenance of a relative for 12 months. That would meet some of the hardest cases and be a great boon to many people.

On the grounds of the charge which would fall on many of the poorer public assistance committees the Government should sympathetically consider this new Clause. At the present time, through sheer poverty, many young men, who are now the breadwinners, are being driven from home, and if any further burdens are imposed upon these breadwinners I am afraid it will mean that many more homes will be disbanded. We should endeavour to keep family life intact in this country. In industrial areas to-day many of the families are in extremis: it is deplorable to think that the breadwinner is being driven from home, bringing further demoralisation into our home life. He is bearing a burden which the State should at least attempt to alleviate. The Government should certainly make some concession. There have been numerous cases of men leaving home simply because they are not able to stand the strain. The concession would only be for a short time until things are better, I am an optimist; but until things do improve I think the concession asked for by the new Clause should be given. Is there anyone in this House who is not anxious to keep family life intact? This concession should be made from the point of view of equity, and from the point of view of keeping people from asking for assistance from the public assistance committee. Taking everything into consideration, I am convinced that it would prove beneficial, and, in addition, be an act of justice to the people concerned.

It is always difficult to resist arguments addressed to pity, and everyone will have the greatest sympathy with all that has been said by hon. Members who are supporting the Clause. But most of those who have spoken in its favour have realised that in its present form, it cannot possibly be accepted. It would let in many cases which are undeserving and exclude many of genuine hardship. Furthermore, it would create a whole series of anomalies. The ordinary allowance in respect of an incapacitated relative is £25, while the allowance proposed here is £50. If a man were keeping his aged father, he would only get £25 allowance, whereas, if he were keeping a young son he would, under the new Clause, get £50. It is impossible to justify an anomaly of that kind. There are other anomalies which would be created, but I will not deal with them, because it is clear that the Clause cannot be accepted in its present form; and no one really suggests it.

This is really a matter concerning the administration of transitional payments by public assistance committees. The hon. Member for Leigh (Mr. Tinker) recognised that in his speech. It is not an Income Tax matter, although hon. Members in pursuance of their right on the Finance Bill have drawn attention once again to a grievance which they consider exists in relation to the administration of transitional payments by public assistance committees. The most I can do, so far as the Income Tax aspect of the matter is concerned, is to give the assurance for which I was asked by the hon. Member for East Birkenhead (Mr. White). He recalled that my predecessor in this office last year had referred to the possible leniency with which the Income Tax Acts might be operated in these cases. I can assure him that the Income Tax Acts are interpreted with the greatest possible generosity; I shall not use the word "elasticity," but I can say that they are interpreted with the greatest possible generosity. Where the parent is elderly and it can be shown that existing conditions in his trade effectively destroy his chance of employment on that account, it is possible to hold that he is incapacitated by old age within the meaning of the existing dependent relative provisions. Where the taxpayer's own brothers and sisters are being kept the Income Tax authorities treat them wherever possible as adopted children.

I think the House will agree that, although this is not directly an Income Tax matter, those charged with the administration of the tax have stretched the law to the utmost extent, and wherever they could grant the kind of concessions to which I have referred, within the ambit of the law, they do grant them. There is hardship in some of these cases and that hardship particularly arises in respect of unemployed persons. It arises not only in respect of those who are refused transitional benefit, but also in respect of persons who never qualify for transitional benefit. The benefit of this proposed new Clause would not be given at all in such cases nor in the case of other persons who have been above the Unemployment Insurance Act limit altogether and have been earning £5 per week. Such persons never qualify for transitional benefit.

Will the Financial Secretary deal further with the point of the elderly parent? The hon. Gentleman said that in some cases the elderly parent might be recognised, but his statement was rather indefinite. Could we not have something more concrete? Could these people apply for that concession? Would they have to be out of work for a long period or not?

The words I used were these: "Where the parent is elderly and it can be shown that existing conditions in his trade effectively destroy his chance of employment on that account, it is possible to hold that he is incapacitated by old age within the meaning of the existing dependent relative provisions."

Have cases been dealt with on that basis?

Certainly. I drafted this form of words BO as to be as exact as possible. As I said, many persons do not come under the Unemployment Insurance Act at all because their earnings have been above the limit. Therefore the new Clause would not really fulfil the purpose that its Mover has in view. That illustrates how difficult it is to draw Clauses which will include every case you want to include and exclude every case that you want to exclude. I must apologise to hon. Gentlemen that I have not been able to go further than the statement which I have made.

We have listened to a number of remarkable statements from the Financial Secretary. The one that he has just made is the most amazing of all. He has practically told us that the Income Tax collector is evading the law in order to get over this difficulty. We must either have legislation to tell the gentlemen at the Treasury clearly what they have to do, or we shall land ourselves into very serious difficulties in connection with Income Tax. What the Financial Secretary has said really is that the means test is now applied by the tax collector when he is assessing the Income Tax that is to be paid in the case of a member of the family. If the hon. Gentleman will read his words to-morrow he will find that this is Income Tax plus a means test for the family. What he said was that the Income Tax collector was now taking into account the liability of the family in assessing the amount of Income Tax payable by a member of the family.

It is indeed a very strange situation in which we have landed ourselves. If what he now tells us has been going on for the last 12 months, which I can well believe, it was the duty of the Treasury to take note of this new orientation in our social life and to bring forward an Amendment to this Finance Bill that would meet these new cases. The Treasury cannot get away with the argument that this is not an Income Tax matter. Every item is an Income Tax matter if the person assessed for Income Tax finds that his income is dissipated for purposes other than those to which it used to be applied. We have a new Income Tax situation since the imposition of the means test. Every hon. Member knows of cases very much like that mentioned by the hon. Member for East Birkenhead (Mr. G. White). I know of the case of a man in my division who is earning about £3 a week. He has three or four persons in the family dependent on him. Lo and behold we are told to-day that if this gentleman can make out a case before the tax collector he need not pay Income Tax on an income above the limit imposed under the law. Surely we have reached an extraordinary stage when we have to listen to arguments of that kind.

But the most extraordinary argument of all was that the new Clause as worded will not work. When the brewers come to the Government with any demand they can draft a Clause to suit them; the brewers can get a Clause drafted to suit themselves at any time when they can bring sufficient pressure to bear on the Government. Those who want to be relieved of the oil tax in connection with ships in home waters can also get an Amendment drafted that fits the case under the law. If the Treasury wanted to meet the case that we have put forward they could easily get over the difficulty and frame the appropriate words. They know better than we do what actual words are required.

Apart from party politics altogether, the case is made out without a shadow of doubt for some relief for these people who have had a new burden placed upon them by the administration of the means test. I do not think any Member of any party will quarrel with that proposition. The Government ought to have done something beforehand to meet a case of this kind. I do not know whether it is too late for them to act now. They can always do things for their own friends here or in another place. If our words are not good enough the principle of the new Clause is good enough. In view of the fact that the Government are fully aware of what is happening in the home life of our people, I appeal to the Financial Secretary to consider the matter further. I am certain that disaster can come to family life in many cases because of the way in which the Income Tax law is now administered. We shall, therefore, have no hesitation in taking this matter to a division.

Before going to a vote, I would put to the Financial Secretary a couple of specific questions relating to specific cases. The hon. Gentleman said that the new Clause will not have the effect desired by the Mover and the Seconder. Secondly, he said that he himself is fully convinced that a case has been made out, and he bubbled over almost with sympathy for the wretched victim of the means test. His legal experts could give effect to what is desired. He told us that the Income Tax collectors, understanding the difficulties of the means test and presumably understanding the difficulties of the legal fraternity of the Treasury, adopt a most sympathetic attitude towards the victims of the means test, and to that extent confer certain benefits on individual Income Tax payers whose income is dissipated by the maintenance of dependent relatives. I ask him to reply regarding two cases in such a way that his reply will be an instruction to Income Tax supervisors as to what they must do.

Take the case of a single man still resident at home and earning £180 per annum. The father is unemployed and the mother is alive. The father is not an aged person, beyond work, say 79 years of age. He may be only 53; physically fit and mentally alert, and capable of rendering good service if the opportunity presented itself. Because the son resides at home and the father is unemployed the father can receive no transitional payment because of the income of his son. The son, therefore, is responsible for the maintenance of father and mother. Under the existing law that person is chargeable as to £80 of the £180 income, less parent allowances and insurance and other odds and ends which may amount to £15 or £20. The remaining £60 is chargeable to Income Tax. Does the Financial Secretary mean that where the parent has been unemployed during any period and the son has been compelled to maintain the parents, the Income Tax surveyor must relieve that single son of Income Tax liability? Unless that question is replied to specifically it really means that the Income Tax surveyor may or may not make the concession. If he makes a concession he does an illegal thing. It may be that that is typically and characteristically British. I ask the Financial Secretary to give us a straightforward reply.

Take another case of a married man still working. The father may be employed and receiving £200 per annum. He is subject to Income Tax for 50 per cent., apart from any earned allowance, insurance and odds and ends. He may have one or two sons at home, well beyond the allowance age, who have passed out of ordinary benefit and are entitled to transitional payment, assuming that the income of the home justifies that payment. Do we understand that when it can be shown that the father for a period was obliged to maintain the two unemployed sons, for whom no Income Tax allowance is made, the Income Tax surveyor can refrain from levying Income Tax on the amount involved. If the hon. Gentleman tells us that there is to be an instruction on this point to surveyors of Income Tax we can accept his statement. Otherwise, I am afraid, a "hit or miss" situation will exist. The surveyor in Birmingham, for instance, may be a very humane person who will make concessions while the surveyor in Sheffield may be much more hardhearted, much closer to the Tory conception of individual and collective obligations than his Birmingham colleague, and may make no concessions.

The hon. Gentleman considers that, if this Clause or a similar Clause were accepted, certain anomalies would crop up, but we submit that its effect would be to remove anomalies. Under this Clause, instead of the £25 allowance for an aged person fully dependent on the wage-earner, £50 would be allowed. If a father is called upon to maintain one or two sons and that maintenance costs in excess of £50, then his allowance ought to be in excess of £50. If a son is called upon to maintain his father for whom the nation refuses to provide work and wages, then the son ought to have the full benefit of any allowance that can be made. I think the House is entitled to know from the Financial Secretary whether the anomalous position which I have indicated is to remain. Are person afflicted by the means test to be dependent in this matter on whether an Income Tax surveyor happens to wake up in a pleasant mood after a good night, or whether he has a disturbed morning following a bad night? Surely that position is even more anomalous than the suggestion made previously by the Financial Secretary. I ask him therefore to give a definite reply on the two cases I have submitted. Where a parent maintains a son, or a son maintains a parent, over a certain period, will it be an instruction to Income Tax surveyors that the cost of that maintenance is to be allowed for in respect of Income Tax —if not in the present financial year, at any rate as a rebate to be made on subsequent application? If the Financial Secretary cannot accept the proposed new Clause, will he at least give us the consolation of knowing that Income Tax surveyors are instructed to make this concession as and when it is proved to their satisfaction that the parties concerned are entitled to it?

Would it not be possible to add to the table of exemptions accompanying the forms sent out by the Income Tax authorities? The Financial Secretary admits that there is an injustice here, although he claims that this is not really an Income Tax matter. He says that in certain cases, where there is an aged person, not yet old enough to come within the ordinary Income Tax exemption, but not likely to obtain work in his own occupation because of age, and the conditions prevailing in the industry, the Income Tax surveyor may stretch a point to enable that man to be brought within the exemptions. Why not extend the table of exemptions to cover any person who can prove that he is called upon by a public assistance committee to maintain a relative over a reasonably long period of time? Such a person should be entitled to claim exemption from Income Tax in respect of that imposition.

If as the hon. Gentleman suggests this is not really an Income Tax matter at all, can he then give us a guarantee that he will consult the head of the Department which is to some extent responsible—although its responsibility in that respect appears to be very limited—for the work of the public assistance committees with a view to getting those bodies to take into consideration Income Tax paid by a person whom they require to maintain a relative? The Government cannot reasonably have it both ways. They cannot claim that no exemption should be allowed to a man in respect of Income Tax by the public assistance authority, and on the other hand that no allowance is to be made by the Income Tax commissioners in his case. The public assistance committee ought to make some allowance in respect of Income Tax when assessing the income of a person who is being made responsible for the maintenance of relatives or the Income Tax authorities ought to make a concession. I appeal to the Financial Secretary to give us some assurance on this matter. He admits that there is an injustice and if this is not, as he claims, an Income Tax matter, will he promise at least to consult with the Department responsible for

It ought to be plain to the more intelligent Members of the House that public assistance committees are already bound to take into account the question of Income Tax in a case, say, where a man is earning £200 a year. [HON. MEMBERS: "No!"] It is the general opinion that they do take it into account.

Definitely, they do not.

I am told that they do. There is one serious flaw in this new Clause. It only applies to the cases of those affected by transitional payments but there are much worse cases of grievance. It is easy in these matters to make appeals for leniency and to point out this, that and the other hardship, of which we know already. But there are other people very much worse off than the people contemplated by the new Clause. For instance there is the agricultural labourer. Why not bring in a proper proposal dealing with the matter in a proper way? It is utterly impossible to deal with it in this way, taking up one grievance after another.

Can the hon. Member give us any idea of how many agricultural labourers are paying Income Tax?

I never said they were. Evidently I did not make my meaning plain to the hon. Gentleman, but what I did suggest was and what I think will be appreciated by the more intelligent section of the Socialist party was that an agricultural labourer might be a dependant in some of these cases. From that point of view only, I would say that the position of the Government on this question is strong and that it is not in the best interests of the finances of the country that we should deal with this matter in a piecemeal fashion.