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Commons Chamber

Volume 379: debated on Wednesday 13 May 1942

House of Commons

Wednesday, May 13, 1942

[Mr. SPEAKER in the Chair.]

Death of a Member

Mr. SPEAKER made the following communication to the House:

I regret to have to inform the House of the death of Colonel Sir Edward Archibald Ruggles-Brise, Bt., M.C., Member for the County of Essex (Maldon Division), and I desire, on behalf of the House, to express our sense of the loss we have sustained and our sympathy with the relatives of the hon. Member.

Private Business

NEWCASTLE AND GATESHEAD WATERWORKS BILL [Lords]

Read the Third time, and passed, without Amendment.

Land Drainage Provisional Order Bill

Read the Third time, and passed.

Aberdeen Corporation (Fish Market Rates) Order Confirmation Bill

Considered; to be read the Third time upon the next Sitting Day.

Oral Answers to Questions

Questions

Shanghai Municipal Council (Staff Pensioners)

1 and 2.

asked the Secretary of State for Foreign Affairs (1) how many pensioners of the Shanghai Municipal Council's Civil Service have been deprived of their pensions since the fall of Shanghai; and the total sum involved per annum;

(2) why, as Malayan and Hong Kong Civil Service pensioners continue to receive their pensions, similar treatment is not being accorded to Civil Service pensioners of the Shanghai Municipal Council?

I understand that there are in all 127 pensioners of the Shanghai Municipal Council, of whom 111 are resident in the United Kingdom and Northern Ireland, and that the pensions payable annually in respect of the latter amount to £27,253 10s. 4d. As I stated in answer to my hon. Friend the Member for Moseley (Sir P. Hannon) on 6th May last, no payments have, I am informed, been made since the 30th September last. As the International Settlement at Shanghai is not British territory, these persons were not in the employment of His Majesty's Government, and cannot be regarded as being on the same footing as the pensioners of the Malayan and Hong Kong Governments.

Royal Air Force

By-Election (Flight-Lieutenant's Application)

asked the Secretary of State for Air in what circumstances it took two months for his Department to sanction the application of Flight- Lieutenant Kidd for leave of absence to contest a by-election?

Flight-Lieutenant Kidd's application for permission to contest the Chichester by-election was dated 26th April, and Air Council approval was signalled to his Group on 4th May. He had, however, applied on 16th February for permission to resign his commission in order to resume a political campaign which he had abandoned before the outbreak of war. No by-election was then pending in the constituency, and a decision on this entirely different matter had not been reached when his later application was received.

Air Training Corps

asked the Secretary of State for Air whether he will give particulars of the scheme for the preliminary training of men registered for the Royal Air Force and placed on deferred service; and as to what grants and other provision is being made for Air Training Corps units to which these men are attached?

Aircrew candidates on deferred service are put in touch with their local unit of the Air Training Corps. Each unit makes its own arrangements for training them according to local circumstances. The A.T.C. syllabus is used, and it is possible for the men to qualify for the Proficiency Certificates granted in the Air Training Corps and to receive the preferential treatment on entry to the Royal Air Force which these certificates carry. Approval has recently been given to the payment, with effect from 1st February, 1942, of a grant to A.T.C. units of 7s. 6d. in respect of each airman who, during his attachment for training, qualifies for the Proficiency Certificate, Part I. The officer establishment of each unit to which 25 men are attached for training is increased by one and provision is also made for the issue of additional equipment.

While I appreciate the recognition which the Minister has now given to these deferred service units does he appreciate that the grant of 7s. 6d. is very inadequate, having regard to the fact that the Ministry of Pensions pays £1 to A.T.C. units? Why, therefore, may not deferred service units or the A.T.C, to which they are attached, have the same grant?

It is considered that 7s. 6d. is the appropriate sum, but if my hon. and gallant Friend considers it is inadequate and will let me know of any case, I will certainly look into it.

Is the Minister aware that in some cases the people on deferred service are kept hanging about for weeks and months without civil employment?

It is to overcome those difficulties that this scheme has been introduced.

Aircraft Production

Fitters (Employment)

asked the Minister of Aircraft Production whether he is aware that more than 100 fitters, released by the Royal Air Force to help in aircraft production, are employed on unskilled work at a factory not connected with aeroengines on which these men have been trained; and what steps he proposes to take to have these men more profitably employed?

Forty-eight men released from the Royal Air Force are en-ployed at the factory in question. They have not all been trained on aero-engine work. The Ministry of Labour allocated them to the vacancies considered most suitable in the light of their training in the Royal Air Force, their pre-enlistment industrial experience and the relative urgency of the various demands. They are all employed on work of vital importance.

How can the Minister reconcile that statement with the fact that these men had 12 months' training on Rolls-Royce engines and were released because they expected to help in the war effort by producing more engines?

I am told they were not all trained on engine work. We have plenty of people in engine factories at the moment. Where labour is most wanted is on work such as that on which these men were employed, where most vital work is being done.

How it is, then, that since I raised this question some men have been released for work on Rolls-Royce engines? The statement the Minister made was positively untrue. It is not good enough that he should make such statements to the House.

Factory Security Officers

asked the Minister of Aircraft Production in how many aircraft factories there are security officers; whether he can state the nature of their duties; whether these officers are responsible to, and make reports direct to, the Minister or to the firm; and whether the power of dismissal of the security officers rests with the Minister or the firm?

All important aircraft factories are "protected places" under the Defence Regulations. In each protected place a person, normally the General Manager, is made responsible for security measures within the factory. It is usual for the firm concerned to appoint a special security officer to assist in the discharge of this responsibility; he reports to the firm by whom he is appointed and by whom he may be dismissed.

Ministry of Information

Broadcast Talk to Troops

asked the Minister of Information whether it was with his permission that a talk was given recently by the British Broadcasting Corporation on the education of our troops in hatred of the enemy; and is he satisfied that this type of talk serves a useful purpose?

No, Sir. The Governors of the B.B.C. do not consult with me about the great number of talks in their daily programmes nor have I any desire that they should do so. The B.B.C. is not an appendage of the Ministry of Information. They provide fare for audiences of many millions and so some of their talks can hardly be expected to please everyone.

Will the Minister represent to the B.B.C. that it is unnecessary to foment hatred in a world so full of hatred? Is it not possible that those who are taught to hate will, in turn, hate those who taught them?

I will send the Governors of the B.B.C. a copy of to-day's OFFICIAL REPORT.

Is the Minister aware that the policy indicated in the Question is entirely contrary to the Christian teaching?

Will the Minister inform the B.B.C. that it is better to instruct soldiers in what they are fighting for than what they are fighting against?

Broadcast Round-Table Conference on India

asked the Minister of Information whether he is aware of criticisms of the British Broadcasting Corporation's broadcast round-table conference on India; whether any other broadcasts on India are likely to be given after the present series; and whether he will communicate with the Indian National Congress with a view to their appointment of one of their leaders to expound their own point of view, or to record for broadcasting a statement of their case, or engage in public discussion with other recognised British and Indian leaders?

My information is that the criticism of this series of broadcasts has been greatly outweighed by appreciative comment. The B.B.C. have no definite plans in view for further broadcasts on the Indian situation, but even if they had, I should certainly not be prepared to dictate to them what speakers they should choose.

Is not my right hon. Friend aware that even quite moderate societies, such as the Northbrook Society, have questioned the value of these round-table conferences, and does he not think that the views of an official spokesman from India, recorded or otherwise, who would put the Indian National Congress point of view would be very much appreciated in this country?

I really cannot be expected to interfere in these matters. Although the hon. Gentleman says that this society is a moderate society, it issued an extremely immoderate circular giving its opinions.

If there is another conference, will my right hon. Friend inquire why no representative of the Princes and no representative of the Scheduled Classes has taken part?

I must point out to my hon. and gallant Friend that the B.B.C. Directors-General and Governors have an opportunity of reading the Questions asked in the House, and no doubt they will take this point of view into account.

German Atrocities (Molotov Note)

asked the Minister of Information whether he will consider distributing the second Molotov Memorandum, or extracts from it, to men and women working in factories where there is appreciable absenteeism and in districts where strikes have taken place; and whether he will co-operate with the other Departments concerned in such distribution?

I expect a very wide circulation for the Memorandum by M. Molotov. But I can see no point in arranging a special distribution in districts where strikes have taken place. Strikes are the most insignificant feature in our ever-growing war effort and I cannot ask officers of the Ministry of Information or any other Department to spend the tax- payers' money in chasing after a tiny, unrepresentative and evanescent section of the public.

Does not my right hon. Friend agree that anybody who has read the Molotov pamphlet is very unlikely to cause any stoppage in the war effort, whether he be employer or employee?

I hope everyone will have an opportunity of reading the Molotov Memorandum. It will be on sale everywhere. It has had a very wide distribution and has been extremely well advertised by my hon. Friend's Questions in the past.

But does not my right hon. Friend think that it is rather a long document and that a leaflet giving extracts would be much more widely read?

Military Service

B.B.C. Staff

asked the Minister of Information the number of official Press officers and journalistic employees of the British Broadcasting Corporation whose calling-up papers have been deferred?

The B.B.C. have applied for the deferment of 48 members of their staff who are engaged in the preparation of news bulletins or in editing their journals. So far no decision has been communicated to them. No application for deferment has been made in respect of any Press officers.

Is it the policy of the Government to differentiate between journalists employed by the B.B.C. and other Government Departments and other journalists doing work of equal national importance who are on the staffs of London and provincial newspapers?

On the contrary. The Government have no intention of showing any favouritism in these matters. The case for the deferment of these men is before the Kennet Committee, which is a semi-judicial body, and when their report comes to hand the B.B.C. will take action accordingly.

If there was less comment dispersed among news, would not fewer journalists be wanted?

That is a very interesting suggestion, but sometimes we need elucidation of rather confused official bulletins.

Ministry of Works and Buildings Staff

asked the Parliamentary Secretary to the Ministry of Works and Buildings whether any attempt is being made to replace those within the call-up age groups in his Department by men over military age?

The Joint Parliamentary Secretary to the Ministry of Works and Buildings
(Mr. Hicks)

Every effort is made to replace men liable for military service by suitable substitutes who are over age: But I would remind my hon. Friend that the whole situation has been inquired into by the Kennet Committee and action in all cases has been taken in accordance with the directions of that body.

Is my hon. Friend aware that much of this work is being done by technical people, and that it could be done by men over the age of 40 as well as by men below that age, and will he not try to have the younger men replaced by older men?

As I informed the hon. Member, this Committee was set up by the Chancellor of the Exchequer and the Minister of Labour, and all these cases have been referred to the Committee. The Committee started its sittings last May and is sitting every week; these cases go before the Committee, and we act on its decisions.

Questions

Prisoners of War

asked the Postmaster-General whether his attention has been drawn to the failure of personal parcels to reach prisoners of war; and whether any steps can be taken to rectify this?

I am aware that next-of-kin parcels addressed to individual prisoners of war in Germany and Italy have been delayed. They are forwarded from this country to Lisbon together with Red Cross standard food and other parcels, and are conveyed from Lisbon to Marseilles as mails, on ships chartered by the British Red Cross Society. For reasons which have already been explained to the House by my hon. Friend the Financial Secretary to the War Office, it was impossible to prevent an accumulation of parcels at Lisbon. Very large numbers of parcels were, however, sent forward from Lisbon during March and April, and I have no doubt that many of the parcels which my hon. and gallant Friend has in mind have already reached the camps or will do so very shortly. The accumulation at Lisbon is still considerable, and for some time to come next-of-kin parcels are not likely to reach the prisoners as quickly as they were doing up to December, 1941.

Why is the delay greater in the case of personal parcels than in the case of food parcels?

I do not know that it is. To separate the personal parcels from the food parcels would, I am told, involve a very lengthy operation and be very difficult to do.

Is my right hon. Friend aware that at the present time ships which are carrying these parcels are held up, and are the Foreign Office taking appropriate action to see that their passage is assisted?

There have been hold-ups with the ships. I can assure my hon. Friend that every effort is made by the Foreign Office, the Ministry of War Transport, the Post Office, and the Red Cross Society to secure additional tonnage.

Railings Removal

asked the Parliamentary Secretary to the Ministry of Works and Buildings whether his attention has been drawn to the danger arising from the broken points left sticking out from the stone-work where iron railings have been taken; and will he arrange with the borough councils to have all the broken points sheared off level with the stonework?

Hitherto there has been difficulty in removing railings without either leaving broken stumps or causing damage to the stonework. I am pleased to say that a machine is now being produced that will extract the stumps causing the minimum of damage. It is hoped to have these machines in use shortly.

When this machine is produced, will it be used to take off the broken points that have been left, as they are both unsightly and dangerous?

asked the Parliamentary Secretary to the Ministry of Works and Buildings whether he is aware that in the City of Leeds alone, over 100 complaints have been received by the City department concerned with the removal of railings as to damage to stone-work, but that so far no satisfaction has been obtained for complaints made to the appropriate officials; and what steps he is taking to expedite repairs?

asked the Parliamentary Secretary to the Ministry of Works and Buildings whether he is aware that much unnecessary damage is being caused to boundary walls in Brentford and Chiswick by the removal of railings; and whether he will impress on the contractors engaged on this work the necessity of using all care?

I would refer to the answer given on nth March to the hon. Member for Ealing (Sir F. Sanderson) which deals fully with the general question of repair of damage caused in the course of removal of railings.

Is not my hon. Friend aware that the damage is still going on and that the operation is a very uneconomic one, as valuable stonework is destroyed or seriously damaged in order to get a comparatively small amount of iron?

With whom does the responsibility lie—the Ministry, the local authorities, or the contractors?

I have difficulty in finding language to vary the many previous answers I have given on this matter. I will read to the House the instructions that are given to the contractors:

"The contractor must instruct workmen to exercise not only the utmost care in taking down railings, but to show the utmost consideration and courtesy to the occupier, as many of these do not fully understand the urgent necessity for the removal of these railings. The contractor shall at his own expense make good all damage caused by the removal of the railings in a negligent or otherwise improper manner to the satisfaction of the Emergency Works Officers"—

Those officers are under my Ministry.

asked the Parliamentary Secretary to the Ministry of Works and Buildings whether he has considered the report sent to him by the hon. Member for East Swansea indicating the damage caused to property by the acquisition of railings in the borough of Swansea; and what action he proposes to take?

Yes, Sir; steps have already been taken to expedite the repair of damage much of which is unavoidable owing to the condition of the old walls in which the railings are set.

Does not my hon. Friend think it would have been better to engage a local firm to do this work, rather than to bring in a firm from 40 miles away?

Generally local firms are employed, but I think in this case a competent firm was selected. In any case, they were not taken from outside the country.

Building Development (Great Britain and United States)

asked the Parliamentary Secretary to the Ministry of Works and Buildings whether a definite list has yet been prepared of the various phases of the building industry wherein United States practices and procedures differ from those of Great Britain and are considered worthy of investigation with the object of possible adoption; and whether any estimate has been made as to the time it will take to introduce into Great Britain those which are considered desirable?

No such list as my hon. Friend has in mind has yet been prepared. As I informed the hon. and gallant Member for East Leicester (Major Lyons) on 29th April, however, the Minister of Works has under consideration the question of sending a representative delegation to the United States to study building development and practice with a view to determining in what directions and to what extent new and improved methods can be adopted in the building industry of this country. In my Noble Friend's opinion the time is not yet ripe for action on these lines, and an essential preliminary would be the drawing up of a programme of subjects for systematic investigation by a team of experts specially selected for the purpose. At a later date I should hope to have the benefit of my hon. Friend's advice and assistance in the preparation of such a programme. Pending such an inquiry, it would be premature to attempt to answer the last part of my hon. Friend's Question.

Seeing that the Ministry have now been in existence for about 18 months, does it not seem to my hon. Friend that some steps ought to have been taken by this time?

Obviously, it is a matter of opinion, but I understand that my hon. Friend has not been in favour even of making these preliminary investigations.

Is my hon. Friend aware that if he had heard what I said yesterday, he would know that I am in favour of doing it at once?

Royal Navy

German Warships' Escape

asked the First Lord of the Admiralty to what extent the competent naval and air staff anticipated that the "Scharnhorst," "Gneisenau" and "Prince Eugen" would escape by way of the English Channel; whether they recommended dispositions accordingly; whether these dispositions were made; and, if not, who overruled them?

As regards the appreciation of the possible movements of the German battleships, I would refer the hon. Member to the statement on the war situation, which was made in the House by my right hon. Friend the Prime Minister on 17th February, 1942. In accordance with this appreciation the Naval and Air Staffs recommended dispositions which were made and not overruled.

Is my hon. Friend aware that I asked the First Lord of the Admiralty on 25th March whether it was un- true that the competent Naval Staff recommended that the ships would probably go up the Channel and that they were overruled by the higher authority, namely, the Minister of Defence? I have never had an answer to that question. Is it true or untrue?

The reply given to the hon. Member was that the dispositions were made in accordance with the competent Naval advice, which had to take into account every commitment to be covered.

Is the hon. Member aware that that is wrong? The answer given by the First Lord of the Admiralty was that he did not know where I got the information from.

Decontamination Exercise, Liverpool

asked the First Lord of the Admiralty what disciplinary action has been taken regarding a practice de contamination exercise in Derby House, Exchange Buildings, Liverpool, on or about 6th March; and whether such steps have been taken as will prevent a recurrence and also to advise the victims that action has been taken?

Suitable disciplinary action has been taken against the officers responsible for this exercise, and instructions have been issued which will prevent any recurrence of the methods employed.

Has it been made perfectly plain to the people who were the victims of this exercise that action has been taken locally so that there will be no recurrence?

I think that the effect of this Question will be to inform the people who took part in this exercise of what has happened.

Convoy Commodores (Casualties)

asked the First Lord of the Admiralty what is the number of commodores in charge of convoys who have lost their lives at sea in this war?

The number of commodores of convoys who have lost their lives at sea in this war is 13, including nine retired flag officers.

Will my hon. Friend say what percentage of that total number have been re-employed?

Questions

Colonies (Quinine Production)

asked the Under-Secretary of State for the Colonies whether any steps are being taken to develop the production of quinine in the West Indies in order to compensate for the absence of supplies from the Dutch dependencies?

Steps are being taken to increase the production of quinine in the Colonies; for technical reasons, these do not at present include development in the West Indies.

Is the Under-Secretary not aware that extensive cultivation of Cinchona existed in Trinidad for a great many years? Is he aware that if this cultivation could be revived it would be a very useful source of supply?

I should like to look further into that. I should not, however, like to go into details of supplies here, and perhaps the hon. Member will confer later with me on the matter.

Can the Under-Secretary inform the House what steps are being taken to secure supplies of Atebrin or other effective substitutes for quinine?

Trinidad

Food Supplies

asked the Under-Secretary of State for the Colonies why the free supply of milk to necessitous schoolchildren has been suspended in Trinidad; and whether, in view of the food shortage, the Government will control the supply of the island's milk and other essential foodstuffs?

My Noble Friend has no information regarding the suspension of the supply of free milk to schoolchildren in Trinidad, but he is making inquiries in the matter. As regards the second part of the Question, I would refer my hon. Friend to the answer which I gave to the hon. Member for Dewsbury (Mr. Riley) on 6th May.

Imported Labourers

asked the Under- Secretary of State for the Colonies how many labourers have been recruited by the United States contractors for work in Trinidad; under what conditions they have been brought to Trinidad; and whether labour inspectors have been appointed to supervise the conditions of employment?

I assume that my hon. Friend refers to imported labour. The only imported labour of which my Noble Friend has knowledge are 2,000 labourers who are being recruited from Barbados. With regard to the last two parts of the Question, inquiries are being made.

Water Supply

asked the Under- Secretary of State for the Colonies whether any action is being taken to meet the re current water shortage in Trinidad; whether the committee set up to inquire into the problem has reported; and whether the expert to be sent out from Britain has arrived and started work?

Yes, Sir. The water situation in Trinidad has, of course, been accentuated by the development of the United States bases and other war needs. The necessary information is being collected with a view to remedial action, and this will be taken as rapidly as possible.

Is the Under-Secretary aware that this has been an acute problem for many years?

I understand that this problem occurs in cycles, but, of course, the new demands have accentuated the difficulties.

Industrial Adviser's Department

asked the Under-Secretary of State for the Colonies how many persons are employed on the staff of the Labour Adviser's Department in Trinidad; what is the sum voted for this Department for the current year; and whether a statistical section has been set up in accordance with the recommendation contained in Major Orde Browne's report in 1939?

The Department of the Industrial Adviser in Trinidad consists of the Industrial Adviser himself, a labour officer and a clerical establishment of eight. The total sum voted for the Department for 1942 is $18,214. With regard to the last part of the Question, the duties of the Industrial Adviser and his Department include the collection of labour statistics in accordance with Major Orde Browne's recommendations.

Factory Conditions

asked the Under-Secretary of State for the Colonies whether he is aware of the unsatisfactory health and sanitary conditions in factories in Trinidad and the inadequate precautions taken to prevent accidents; whether he has received any report from the inspector of factories sent out from this country to examine conditions on the spot; and, if so, what action is being taken?

The answer to the first part of the Question is in the affirmative. With regard to the second, although the officer was appointed several months ago, it has unfortunately not yet been possible to arrange for him to leave this country owing to difficulties in arranging a passage which my hon. Friend will appreciate. The urgent importance of securing a passage for him is being strongly pressed, and it is hoped that he will sail very shortly. The third part of the Question therefore does not arise.

Questions

Malaya Defence Forces (Separation Allowances)

asked the Under-Secretary of State for the Colonies, on what grounds the wives of Europeans in Malaya, who were mobilised for the Civil Defence services, are denied separation allowances, whilst the wives of men who were mobilised for the local defence forces are granted such allowances?

The local Defence Forces formed part of the garrison of Malaya and are entitled to the scheme of separation allowances applicable to the case of soldiers who are missing or taken prisoner.

Is the Under-Secretary aware that when the Japanese invaded Malaya the whole of the European population was mobilised, some men being put in the Defence Forces and some in the civilian Defence Forces, and that all these men are still in Singapore? What is the justification for treating the wives of the one class different from the wives of the other?

That raises the very broad question of the differences in allowances which are normally paid to mobilised forces and civilians. There were, of course, other civilians not mobilised in the Civil Defence Forces who stayed in their work because they were more useful there. The question raises the very much broader issue of the general payment of allowances to different classes of people.

In view of the fact that all able-bodied men in Singapore and Malaya were at the disposal of the Government, ought not the wives and dependants to have the same treatment?

I was pointing out that the same principle applies in Great Britain as elsewhere. Scales of allowances have been worked out for the different classes, which include Civil Defence, and civilians who also come under the general scheme. This broad question cannot be dealt with only on a local basis.

How is it that the Under-Secretary says the same principle and conditions apply in this country, in view of the fact that Singapore was invaded and all these unfortunate people have been deprived of their breadwinners? Will he make some general statement on the matter?

I said that the payments of allowances to different classes of people according to whether they are soldiers, mobilised civilians in Civil Defence or civilians are laid down and are of general application throughout all parts of the Empire.

In view of the unsatisfactory nature of the reply, I beg to give notice that I shall raise the matter on the Adjournment.

Japan (British Subjects)

asked the Attorney-General whether he is aware that, under the provisions of the Trading with the Enemy Act, 1939, a British subject at present interned by the enemy in Japan is regarded by British authorities as an enemy of Britain; that, where such a person is a partner in a London business firm, and at the time of the internment was looking after his firm's interests in Japan, such partnership must, under the Act, be dissolved; and whether he will take steps to remedy this anomalous position?

The point raised in my hon. Friend's Question is one that was brought to the attention of the Government a short time ago. British subjects in enemy territory have, of course, for many purposes to be regarded as enemies and the partnerships cannot continue unaffected by the position as stated. The question whether any alteration of the law is desirable and practicable is being considered by the Board of Trade.

Can this consideration be speeded up? The Attorney-General will see by this Question the grievous harm which is being done to British subjects who are taken prisoner by the enemy.

I understand that the Board of Trade are getting in touch—I daresay they are now in touch —with those affected. They will, of course, consider what suggestions they make as to the best way of dealing with the problem.

Justices of the Peace (Selection)

asked the Attorney-General whether he is aware of the small numerical representation of labour upon the magisterial benches of those portions of Miskin Lower and Cowbridge petty sessional divisions, respectively, which serve within the Pontypridd Parliamentary division; and will he take steps to increase such Labour representation at the earliest appropriate date?

asked the Attorney-General whether he is aware that both the Caerphilly, Higher, and the Caerphilly, Lower, petty sessional divisions, are predominantly industrial areas; that the composition of the magistrates' list does not reflect this characteristic, causing considerable dissatisfaction in these areas; if he will take steps to remedy this, and thereby remove all suspicion that political bias affects these appointments?

My Noble Friend is not aware that any dissatisfaction exists regarding the composition of the benches of magistrates in the areas referred to. He desires me to make clear that justices of the peace are not appointed as representatives of any political party. In making such appointments my Noble Friend is advised by a local committee which includes members of the main political parties, who are chosen so as to secure recommendations derived from different views and currents of public opinion. The advisory committees help to secure that those recommended for appointment are persons of high character in order to ensure that benches of justices command the respect of the public. My Noble Friend has no reason to believe that these principles are not fully observed by the committee which advises him in the county of Glamorgan, but he is prepared to communicate with the Lord Lieutenant to inquire in greater detail regarding the composition of the benches referred to in the Questions.

While I recognise the delicate task of the advisory committee, is the right hon. and learned Gentleman aware that in the Cowbridge petty sessional division there is only one labour representative out of 18 magistrates?

I have said that magistrates are not appointed as representatives of political parties. I have also said that my Noble Friend is going to communicate with the Lord Lieutenant to inquire in greater detail regarding the composition of the benches.

Is the right hon. and learned Gentleman aware that the country will no longer be deceived by his original answer?

British Army

Officers (Termination of Employment)

asked the Secretary of State for War whether he will extend to three months the period for which pay shall be made to officers who have been released from service under the recent review and who have not obtained alternative employment?

An officer released from service normally gets 28 days' leave on full pay. However, in order to give those released under this review additional opportunities of finding other work this period has been specially extended to 42 days. I am afraid I can hold out no hope of any further extension.

Is the hon. Gentleman aware that the circumstances under which these officers are reverting to unemployment make it difficult for them to get employment, and will he reconsider his decision from that point of view?

It was to meet those difficulties that the period of leave was extended from four weeks to six weeks.

Re-Enlisted Pensioners (Release)

asked the Secretary of State for War whether pensioners re- enlisted before mobilisation under War Office Letter No. 30/Misc. 2879/AGI (c), dated 22nd May, 1939, will be released, when their contracts for three years' service have expired, or retained; and upon what conditions?

This matter is at present being considered, and I will communicate with my hon. Friend as soon as a decision is reached.

Corporal's Sentence

asked the Secretary of State for War whether he will reconsider his decision not to intervene in the case of a Streatham corporal, of good character, who was reduced to the ranks and is now serving a sentence of three months in detention barracks for appropriating, and using in his motor cycle, two gallons of Army petrol, value 3s. 7d.?

For the reasons which have already been explained to the hon. Member, my right hon. Friend is not disposed to intervene in this case.

Having regard to the fact that the soldier receives so little in cash and so much in goods, and to the old-established tradition of winning things in the Army, does not the hon. Gentleman consider that this sentence is much too severe which compels a man of excellent character to be subjected to imprisonment with deserters and other serious offenders?

This was a case of pilfering military petrol by a non-commissioned officer after the issue of repeated warnings. Seamen are now losing their lives bringing petrol to this country, and I think my hon. Friend will agree that the Army owes it to the Merchant Navy to deal seriously with cases like this.

Does not my hon. Friend think that this interference with a commanding officer running a unit makes conduct of the Army almost impossible?

Detention Barracks

asked the Secretary of State for War whether he will investigate the conditions under which soldiers have to serve sentences in detention barracks commonly known as glasshouses; and whether he is satisfied that such soldiers have the opportunity to lodge complaints without prejudicing their positions?

A Departmental investigation has recently been made into conditions at detention barracks and showed that generally speaking these were good. Soldiers under detention can make complaints to the Commandant or a visiting officer, without in any way prejudicing their position. The expression "glasshouse" refers only to the Aldershot detention barracks, which happens to have a glass roof.

Is the hon. Gentleman aware that in some of these detention barracks the conditions are very insanitary, and the men complain that they are treated considerably worse than if they were in a civil prison?

So far as I know the conditions are pretty good. Those barracks that I have seen myself were fully up to the necessary standard.

Is it not the case that some little time ago the hon. Gentleman promised to consider publication of the report to which he referred, and can he now say whether that report will be published or otherwise made available to hon. Members?

This was a Departmental report and I am not prepared to have it published. I offered the hon. Member and certain other hon. Members the opportunity of visiting these detention barracks if they feel inclined to do so, and that offer is still open.

Is the hon. Gentleman not aware that before availing ourselves of that offer, we indicated that we felt that it would be convenient if we knew what was in the report which he found so satisfactory, and is there any reason why he should not let us know what is in it?

As I said, this was a Departmental report, and such reports are not compiled for publication. If they were always to be published their compilation would involve longer and more laborious work. I do not feel that in this particular case we should be justified in publishing the report.

Production

Citrine Committee's Report

asked the Minister of Production whether he will publish-the Report of the committee that met under the chairmanship of Sir Walter Citrine for the purpose of considering regional organisation; and can he make a full statement on the steps that are to be taken as a result of the investigation and Report of the committee?

I have received the Report of Sir Walter Citrine's Committee. The Committee's recommendations are now being considered as a matter of urgency, and I expect to be able to publish the Report and make a statement of the Government's policy in the matter before the Whitsun Adjournment.

Industrial Panel

asked the Minister of Production the names and qualifications of the Panel that is to work under his direction; how it is intended they shall operate; and will they be given executive power to act in the national interests?

With the hon. Member's permission I will circulate in the OFFICIAL REPORT a list of those members who have accepted my invitation to serve on the Industrial Panel. As regards the manner in which the members of this Panel will operate, I would refer the hon. Member to the statement which I made in the House on 22nd April.

Will the right hon. Gentleman bear in mind that the output of the workers is higher than in any other country in the world, and will he take steps to see that the Panel functions as quickly and as efficiently as possible?

Will the right hon. Gentleman consider the appointment of a properly qualified woman to assist him in this important matter?

I have considered the matter, and I think the duties which could properly be performed by a lady on the Panel had better be left to the Ministry of Labour.

I suggest that the hon. Member should wait for the list of names and then the question will answer itself.

Following is the list:

Mr. G. E. Bailey, C.B.E., M.I.M.E., M.I.P.E.

Mr. E. W. Bussey.

Mr. A. Dalgliesh.

Mr. W. Gunn.

Sir Ernest Lemon, O.B.E., M.I.M.E.

Mr. G. S. Maginness.

Mr. G. Martin.

Mr. A. McKinstry, M.I.E.E., M.I.M.E.

Mr. F. Parkinson.

Mr. W. Puckey.

Mr. T. G. Spencer.

Mr. J. Tanner.

The Hon. J. K. Weir.

Paper from Nettles

asked the Minister of Production whether he will give the House any information about the possibility of making paper from nettles?

The bast fibre from nettle stems is useful for papermaking. I am finding out Whether it is practicable to collect nettles on a large enough scale to be of use.

Would not this be an enormously important industry once it was set going?

Has there been any substantial demand for paper made by this process?

I understand that the Opposition Press is very anxious to have its publications printed on paper made from stinging nettles.

Business Arrangements

asked the Minister of Production whether he has satisfied himself that no restrictive arrangements pertaining to essential products, processes or commodities, exist between manufacturers or other businesses in this country and other countries similar to those recently disclosed in the United States of America?

I have made careful investigations into the subject raised by my hon. Friend and have found no cases of such restriction. I may point out that the Trading with the Enemy Act makes any such arrangements an offence.

Is the right hon. Gentleman aware that there have been very definite arrangements in the past for the exchange of processes, patents, etc., such as those which Imperial Chemical Industries had with German companies. Is he quite satisfied that those arrangements have been cancelled?

Ministry of Supply

Controllers

asked the Minister of Supply the names and salaries of each of eight Controllers in his Department and the firms to which they belong; and the source of income of each of the other 16 Controllers and the firms they represent?

I will, with the hon. Member's permission, circulate the particulars in the OFFICIAL REPORT, except that I am not aware of the sources of income of the Controllers otherwise than from public funds.

As their salaries have to be borne on the cost of goods purchased by the Government, what is the objection to paying their salaries direct by the Ministry so that everyone knows what they get?

Following are the the particlars:

RAW MATERIALS CONTROLS.

(A) Controllers in receipt of Salaries from the Ministry.

Control.

Controller.

Salary.

Business Connection.

Abrasives

Mr. C. J. Brockbank

£ 1,000

Messrs. Brockbank & Powell, Ltd., Consulting Engineers.

Cork

Mr. W. Skinner

£1,000

Director and Assistant Manager, Bush House, Ltd.

Cotton

Mr. F. Platt

£1,500

Director, British Overseas Cotton, Ltd.

Diamond Die and Tool

Mr. R. L. Prain

£1,200

Managing Director of Anglo Metal Co., Ltd.

Fertilisers

Mr. H. U. Cunningham

£1,200

Managing Director, Scottish Agricultural Industries, Ltd.

Leather

Dr. E. C. Snow, C.B.E.

£1,500

Manager, United Tanners Federation.

Silk and Rayon

Mr. H. O. Hambleton

£1,000

Managing Director, T. H. Hambleton, Ltd.

Sulphuric Acid

Mr. N. Garrod Thomas

£1,200

General Manager, National Sulphuric Acid Association, Ltd.

(B) Controllers not in receipt of Salaries from the Ministry.

Control.

Controller.

Business Connection.

Chrome Ore, Magnesite, Wolfram and Foundry Bonding.

Mr. W. T. V. Harmer

Technical Assistant to the Managing Director of United Steel Companies, Ltd.

Diamond

Sir Cecil Rodwell, G.C.M.G.

Director, Consolidated Gold Fields of South Africa, the New Consolidated Gold Fields, Ltd., The Gold Fields American Development Co., Roan Antelope Copper Mines and other Companies.

Flax and Ramie

Mr. J. S. Ferrier

Director, W. F. Malcolm & Co., Ltd.

Hemp, Kapok and Coir

Mr. A. M. Landauer

Senior Partner, Landauer & Co.

Industrial Ammonia

Mr. F. C. O. Speyer

Delegate Director, I.C.I. (Fertiliser and Synthetic Products), Ltd., and General Manager, British Sulphate of Ammonia Federation.

Iron and Steel

Col. Sir Charles Wright, Bart., K.B.E., C.B.

Chairman, Baldwins Ltd., and Guest, Keen, Baldwins Iron and Steel Co., Ltd.

Jute

Mr. H. S. Sharp

Chairman, J. Sharp & Sons, Ltd.

Miscellaneous Chemicals.

Mr. D. J. Bird

Director, Fison, Packard & Prentice, Ltd.

Molasses and Industrial Alcohol.

Mr. T. F. A. Board

General Works Manager, Distillers' Co., Ltd.

Non-Ferrous Metals

Mr. W. Mure

Managing Director, British Metal Corporation, Ltd.

Mr. A. M. Baer

Director, British Metal Corporation, Ltd.

Non-Ferrous Mineral Development.

Sir William Larke, K.B.E.

Director, British Iron and Steel Federation.

Paper

Mr. A. Ralph Reed

Chairman, A. E. Reed & Co., Ltd.

Plastics

Mr. L. P. B. Merriam

Director, British Xylonite Co., Ltd.

Rubber

Mr. F. D. Ascoli

Director, Dunlop Malayan Estates, Ltd.

Timber

Major. A. I. Harris

Partner in L. Bamberger & Sons.

Wool

Sir H. Shackleton

Chairman, Wool Textile Delegation; President, Woollens and Worsted Trades Federation; Director of Taylor, Shackleton & Co., Ltd.

Slaughter of Animals (Cartridges)

asked the Minister of Supply whether, as there is a shortage of .310 cartridges throughout Great Britain and Northern Ireland, which are necessary for the killing of horses and large cattle for which the captive bolt killer has proved unsatisfactory, he will give instructions that adequate supplies of these cartridges be maintained?

I regret that further manufacture of .310 cartridges cannot at present be arranged.

Is the right hon. Gentleman aware that the shortage of these cartridges will result in the inhuman form of slaughter prevailing before the Act of 1932?

I am having that particular representation investigated at present. There appears to be considerable doubt as to whether it is a fact.

Scrap Merchants (Commission)

asked the Minister of Supply, in view of the duties and scope of the Director of Scrap Supplies, why there is still paid to each of four firms of scrap merchants an over-riding commission of 1s. per ton of scrap; what services are performed for this payment; and on what basis were the four particlar firms selected for this benefit?

The arrangement to which my hon. and gallant Friend refers was one entered into between the steel industry and four scrap merchanting firms. Neither the Ministry nor the Iron and Steel Control is a party to this arrangement. I have asked the steel industry to look into the agreement again in the light of the circumstances of to-day and to report to me fully upon it.

If I put a Question down in a fortnight's time, will the right hon. Gentleman be able to make a statement?

Perhaps my hon. and gallant Friend will consult me as to the date on which a Question may be put down.

Newsprint

asked the Minister of Supply whether he is aware of the need to direct towards the news paper industry essential supplies of news print; and are steps taken to limit the waste of paper on unessential publications by various organisations of a public or semi-public character?

Supplies of newsprint are at present available to meet the consumption of newspapers at the existing reduced rate. Other periodical publications are subject to the same restrictions in paper consumption as newspapers, and the amount of paper available for casual publications is being further reduced.

Does not my right hon. Friend think that we have a special duty to inquire into the use of paper by the Empire Parliamentary Association?

Iron Railings (Sale)

asked the Minister of Supply whether he is aware of a circular letter, issued by his Ministry to marine store dealers, offering to sell iron railings at 62s. 6d. per ton; and will he take steps to stop such sales at this price, in view of the fact that his Ministry either receive the railings as free gifts or, if purchased, only pay 25s. a ton?

The circular referred to appears to be one dated 21st August, 1941, issued to scrap merchants. The sale price to merchants has since then been reduced and now varies between 42s. 6d. and 57s. 6d. per ton delivered, according to geographical area. In addition to any compensation to the owners, there are heavy costs of removal, making good, weighing, transportation, etc.

This does not refer to middlemen in any ordinary sense. These merchants to whom scrap is sent are persons who do processing on it to make it suitable for blast-furnaces and steel works —a very technical job.

Will the right hon. Gentleman see that all these middlemen in every Department are cleared out all together?

Questions

First-Class Railway Compartments

asked the Parliamentary Secretary to the Ministry of War Transport whether he is aware that many of the first-class coaches coming from the North to London are arranged to carry four passengers only in each compartment, and that by the removal of the centre arm they could accommodate another two passengers; and will he have inquiries made to see what can be done?

The Joint Parliamentary Secretary to the Ministry of War Transport
(Mr. Noel-Baker)

The first-class coaches normally used on these services provide seating accommodation for six persons in each compartment. Occasionally coaches seating four persons only have to be used, but they are taken out of service as quickly as possible. It is doubtful, therefore, whether it would be justifiable to use the labour and material required for their conversion. I will, however, give further consideration to the proposal made by my hon. Friend.

I thank the Minister for his reply; it is very hard on people standing in the corridors when they see only four persons sitting in a first-class coach. It will do much to relieve the feeling that everyone is not being treated on the same basis if this action is taken.

I quite agree with my hon. Friend. It is really a question of cost in labour and material.

Food Supplies

Ration Books

asked the Parliamentary Secretary to the Ministry of Food how many additional workers he estimates will have to be employed to carry out the new procedure of issuing ration cards only on production of identity cards; and whether, before deciding to initiate this procedure, he consulted the Ministry of Labour?

The new procedure referred to of issuing ration documents consists of two parts. The first part, lasting about two weeks, involves personal application by the public, and serves to check identity cards and food ration book particulars and to issue the personal food ration book and clothing ration documents. No reliable estimate can be given of the number of staff required to achieve this fourfold object. The second part involves preparing and writing-up the main ration book. In view of the first part, this operation will be much simpler than in previous years. It will require about 10,000 clerks, many of them part-time, but only for some three weeks instead of the six to seven weeks needed on previous occasions, when ration books have been distributed to all consumers. The Ministry of Labour are kept fully aware of my Department's requirements in relation to the staffing of local food offices.

Does the Parliamentary Secretary consider that there will be any substantial check-up of identity cards which could not be achieved by ordinary police methods? Will not the system which is to be devised absorb a fairly substantial number of people?

I think that it is a very good way of having a proper check, because the ration book is a useful adjunct to the check. In this particular case we have the food registration card and the clothing requirements checked at the same time, which is a good example of what is known as combined operations.

Does the Minister appreciate that if personal application is to be made for these cards, it will involve in many cases a long wait before the check has been instituted and completed, and may in fact disorganise a great deal of our production work? Are we to understand that every worker engaged in the munitions industry must apply for the ration cards personally? Is there no other way of dealing with it?

I do not think my hon. Friend need fear that there will be a great disturbance. This plan has been carefully inquired into, and I think he will find that it is all right.

Does not the Minister agree that if there is only to be a glance at the number on the national registration card, there will be no substantial check and no advantage in this plan?

Rural Areas

asked the Parliamentary Secretary to the Ministry of Food whether he is aware that food rationing operates with particular severity on persons living alone and on families of two living in rural areas without any British Restaurant; and whether it is possible to improve their conditions?

I realise that small units of consumers are at a disadvantage as compared with larger units in the utilisation of rationed foods. As regards residents in rural areas, I realise that they are not in as favourable a position as residents in town areas for obtaining meals in catering establishments, but I think that in many areas they enjoy advantages as regards food supplies which are not open to the majority of town dwellers. To meet the needs of workers in rural areas arrangements have recently been made for responsible voluntary organisations such as the W.V.S. and Women's Institutes, individuals certified by war agricultural committees and local traders, in addition to local authorities, to be given authority to operate schemes for the supply of meat pies, sandwiches and other prepared foods, especially in those areas where it would not be practicable to establish British Restaurants.

Is my right hon. and gallant Friend aware of the great disadvantage from which the rural population suffers in consequence of their inability to buy offals and fish and to make use of British Restaurants or any other kind of restaurant?

I appreciate that there must be disadvantage in certain rural areas with regard to British Restaurants, but I am sure my hon. and gallant Friend will agree that there are also certain advantages in the country which work out very well.

Fresh-Water Fish

asked the Parliamentary Secretary to the Ministry of Food whether, as his Department is now to be the sole purchaser of salmon imported from Eire, he will consider making similar arrangements in regard to all fish caught in British fresh-water rivers and lakes in order to increase the supplies of home-produced edible fish?

Northern Ireland and Eire (Smuggling)

asked the Parliamentary Secretary to the Ministry of Food whether, in order to combat the smuggling of articles of food from Northern Ireland into Eire, which has become a source of gain to those engaged, he will have such a check put upon all foodstuffs coming into Northern Ireland, and such a watch on their distribution within its bounds, as to bring smuggling to an end?

The supply of all rationed foods, including points rationed foods, to Northern Ireland and their distribution within Northern Ireland are controlled by requiring retailers to present permits or points vouchers to their suppliers and by the collection or cancellation of coupons from their customers. So far as other foodstuffs are concerned, all practicable steps are being taken in the direction suggested by my hon. Friend.

Is my right hon. and gallant Friend aware that smuggling is so extensive to-day that Northern Ireland is threatened with a shortage of food?

I can assure my hon. Friend that Northern Ireland will not suffer from a shortage of food. While I appreciate that smuggling is going on to some extent, my Department is taking every step to stop it, including the withdrawal of licences from offenders. Fifteen have already been withdrawn, and I can assure my hon. Friend that we are alive to the situation and are doing everything we can to deal with it.

In spite of all that has been done, I would like my right hon. and gallant Friend to understand that smuggling was never so extensive as it is to-day.

Would it not be better fully to extend the border, thus getting rid of the difficulty?

Will the right hon. and gallant Gentleman consult the Home Secretary and take further steps to prevent smuggling, which has become a perfect curse so far as the export of food from Northern Ireland is concerned?

I appreciate that, and I am already in consultation with my right hon. Friend, but my hon. Friend will realise that it is a 200-mile border and takes some looking after.

Cereals for Brewing (Eire)

asked the Parliamentary Secretary to the Ministry of Food whether, in view of the importance of conserving foodstuffs, he will state the quantity of cereals assigned to brewers in Eire; and whether it is his intention to continue the supply of these foodstuffs?

I have no information as to the quantity of cereals assigned to brewers in Eire, but no cereals have been exported from the United Kingdom to Eire since January, 1941.

Is it true, as reported in Northern Ireland, that 40,000 tons of cereals from Britain are being sent to Guinness's to make stout?

I know nothing about that. I know that no cereals have been exported from this country to Eire for brewing.

Hotels and Restaurants (Order)

asked the Parliamentary Secretary to the Ministry of Food the terms and effective date of the new Order dealing with amounts and prices of foodstuffs supplied at hotels and the like?

The Order to which my hon. and gallant Friend refers was made yesterday. It deals with the serving of courses of food in restaurants, the restriction of hours during which food can be served, and prices. The provisions with regard to food will come into operation on 1st June. The provisions with regard to the restriction of hours and price control will come into operation on 15th June.

May I ask whether the conferences which have begun and the harmony which has been reached, as stated by his predecessor on 12th June, 1940, have resulted in the 16s. dinner now being approved by the Minister of Food?

My hon. and gallant Friend had better concentrate his attention on the future rather than on the past, and he had better wait and read the Order.

asked the Parliamentary Secretary to the Ministry of Food whether he can give some idea of the number of persons who will be employed on the proposed scheme for imposing limits on the cost of meals in hotels and restaurants; and what will be the approximate cost of administering this scheme?

It is not anticipated that the work to which my hon. Friend refers will be heavy. The appointment of additional staff for the purpose is not contemplated.

Is it not a fact that this regulation is really unnecesary and totally uneconomic, and is it not another exhibition of the Government's capitulation by mistaking the noise of the few for the voice of the many?

Condensed Milk

asked the Parliamentary Secretary to the Ministry of Food what arrangements now exist for making available full-cream sweetened condensed milk for the feeding of infants who are unable to assimilate other foods, having regard to the fact that one tin of such milk represents eight points or one- third of the monthly ration?

A permit granting additional points for the purchase of condensed milk will be issued by a local food office, on presentation of a medical certificate, in the case of a premature infant not exceeding the age of six months. In consultation with my Department's medical advisers my Noble Friend is considering the possibility of making arrangements for the supply of condensed milk, without the surrender of points, in cases where this type of processed milk is essential on medical grounds. Any such concession will be limited to infants under one year old.

Empty Milk Bottles (Collection)

asked the Parliamentary Secretary to the Ministry of Food whether any steps have now been taken to prevent the destruction and wastage of milk bottles; and whether milk deliverers are now instructed to collect empty milk bottles other than their own when not collected by the firms to which they belong?

As I indicated in my reply on nth March last to my hon. Friend the Member for Deptford (Mr. W. H. Green) (OFFICIAL REPORT, column 1063) it has not been found possible to make an Order requiring the return of empty milk bottles. My Department has offered to collaborate with the retail milk trade in arranging further publicity measures.

Is the Minister not aware that a large number of bottles are being destroyed and that this is a severe waste? Should not something be done in order that these bottles are collected by any deliverer of milk?

I agree that there is a very great wastage of milk bottles. The difficulty is to make an Order which will cover it, because among other things there is the difficulty of who is the legal possessor. With regard to the hon. Member's suggestion that any trader might take any bottle he finds, one of the complaints made is that less reputable traders are already doing that to some extent.

Sweets (Rationing)

asked the Parliamentary Secretary to the Ministry of Food the approximate number of clerical staff who will be employed in administering the sweets rationing scheme, the amount of paper required for the issue of the necessary books, and the cost of putting the scheme into operation, respectively?

The personal ration book,- which will initially be used for the rationing of chocolate and sweets, has been prepared to meet circumstances which may arise in the future. It has involved 300 tons of paper at a cost, including printing and distribution, of £27,500. It will be issued with clothing books at the same time as application for the main ration book, and examination of identity cards is being effected involving no increase in staff. The administration of the scheme will fall within the normal duties of local food offices.

Does my right hon. and gallant Friend consider that there was such inequality in the distribution of sweets and chocolates as to make this action worth while, or was the decision really influenced by the insatiable appetite of bureaucrats to control every movement of our lives?

I do not think that is at all a good picture of the situation as it is to-day. My Ministry exercises control only in order to get food equitably distributed. As far as sweets are concerned, I think most hon. Members will agree that the children of this country are just as much entitled to have a square deal as anybody else.

Catsmeat

asked the Parliamentary Secretary to the Ministry of Food whether he is aware that one effect of the present controlled prices for horseflesh is to make 1t increasingly difficult for the small retailers of catsmeat in London to obtain supplies, causing resentment not only to them but to their regular customers; and will he take action to prevent this trade from being diverted, as is happening at present, away from the established small retailers into the hands of people who never previously sold cats-meat by retail?

I am aware that some retailers of catsmeat are not obtaining sufficient horseflesh to meet all demands by their customers. This is to some extent the result of an increased demand for this commodity in consequence of the rationing of meat and of the sale of larger quantities of horsemeat for human consumption at higher prices. As regards the second part of the Question, retailers of meat for feeding animals are required to hold licences from the local food control committees. These licences are generally confined to retailers who were previously engaged in this trade, additional licences being granted only where the committee are satisfied that they are required in the public interest.

So as not to take up the time of the House with catsmeat, will my right hon. and gallant Friend allow me to put before him afterwards some further considerations about the sad plight of pussy's butcher?

London Wholesale Meat Supply Association

asked the Parliamentary Secretary to the Ministry of Food whether he will reconsider his decision to reject the application for membership of the London Wholesale Meat Supply Association, which was not made timeously, of 16 south of Scotland mutton exporters, 14 of whom exclusively supplied Smithfield Market with about 700,000 carcases per annum, having regard to the financial hardship imposed on them, and to the inadequate advertisement of the date on which applications closed?

As my hon. Friend is aware, the application for membership of the London Wholesale Meat Supply Association by the firms in question has been very carefully considered and the decision to reject the application was reached only after exhaustive inquiry. I myself have personally investigated the facts and am satisfied that the decision reached was justified and that the failure to make timeous application cannot be ascribed to inadequate advertisement of the date on which applications closed. In these circumstances, I am not prepared to reconsider the decision.

Is it not the case that these men are entitled to membership of the London association, and is it not also a fact that the only newspaper in which the closing date was advertised was the "Daily Telegraph," and that does not circulate in Scotland?

Yes, but the original notice which warned wholesale butchers that these Meat Supply Associations would be set up appeared widely in July, I939, again in September, 1939, and, I believe, in January, 1940. The closing date for London was February, 1941, so they had well over a year, nearly 18 months, during which they should have been aware that application was necessary. The fact that the closing date for the London Association was only in the "Daily Telegraph" does not affect the case, because two members of the Scottish Meat Exporters' Association applied to a Scottish Association and were admitted.

While thanking my right hon. and gallant Friend for his reply, it is so unsatisfactory that I regret that I shall be compelled to raise the matter on the Adjournment.

Bread ("Rope")

asked the Parliamentary Secretary to the Ministry of Food whether, in view of the possibility of an outbreak of "rope" in bread during the hot weather he will see that bakers are given full instructions on how to prevent "rope," and that supplies of remedial correctives are available in sufficient quantity?

Instructions on the lines suggested by my hon. Friend have been prepared by an expert committee set up by my Department, and will shortly be sent to all licensed bread bakers. I hope that by particular attention to cleanliness in bakehouses and by following the instructions given to them bakers will themselves be able to prevent outbreaks of "rope." A reserve of suitable chemical correctives is, however, being established for distribution to bakers should the need arise.

Can the right hon. and gallant Gentleman tell the House what "rope" is?

It is something not exactly pleasant, I understand, which is sometimes found in bread, but I hope it will not be found there in the future.

Farm Workers

asked the Parliamentary Secretary to the Ministry of Food what steps he proposes to take to provide extra food like meat pies for farm workers during working hours?

I would refer my hon. Friend to the reply I gave on this subject to my hon. Friend the Member for Devizes (Sir P. Hurd) on 6th May.

Questions

Opened Postal Packets (Inquiry)

( by Private Notice ) asked the Postmaster-General whether he is aware that certain letters addressed to writers to the weekly journal named "The Tribune" have been opened before delivery; whether this was done with his knowledge or by his instructions, and what explanation he can give for this behaviour?

The answer to the first two parts of the Question is in the negative. If the hon. Member will be so good as to arrange to let me have the covers of the letters referred to, I shall be happy to have full inquiry made in the matter.

May I ask what is the purpose of providing the right hon. Gentleman with the envelope? The envelope would have been opened in any case, and how can he tell by looking at opened envelopes whether they were opened by the recipients or before their delivery? Further, will the right hon. Gentleman see witnesses who will be able to say that these envelopes had been opened before delivery? I shall be glad to bring the witnesses to him or to anybody whom he may suggest?

The purpose of asking for the envelopes is this: the hon. Member's Question as it stands does not give me the names or addresses of the persons concerned nor does it state the date on which the letters were supposed to have been sent. It is clear that without that information I can make no useful inquiry into the matter. If I have the covers, they will provide, besides the particulars. I have mentioned, information as to the offices through which the letters have passed and will in that way narrow the scope of the inquiries.

I am perfectly prepared to provide all the evidence which the right hon. Gentleman wishes, and had he asked for it earlier I would have supplied it.

Can the House be assured that there can be no tampering with the mails without the knowledge and authority of the Postmaster-General?

It is a criminal offence for any officer of the Post Office to tamper with or open any postal packet in course of transmission, except in certain cases; for example where the address is indecipherable the letter may be opened to ascertain the address of the sender. All these matters are provided for in Section 56 of the Post Office Act, 1908, and it is in accordance with that Statute that the Post Office acts.

Would the right hon. Gentleman be advised if some official of same other Ministry had received instructions from the War Cabinet or other people to inspect certain letters?

I think I should. If the hon. Member will look at the Act, he will see the circumstances in which letters can be opened. The whole matter was discussed in Parliament at that time and there has since been no change in the position. If hon. Members interested will consult the Statute they will find the position fully described.

May we have a definite assurance that in no circumstances are letters addressed to those who contribute to British newspapers and periodicals tampered with?

No distinction is made in the Post Office between people who con- tribute to journals and any other section of the public. As I say, the Post Office acts in accordance with the Statute I have mentioned.

Has the Postmaster-General received instructions that, not his officials but other officials, are to tamper with some correspondence? That is the point.

To this extent: There is a censorship in existence in certain areas. My duty is to hand letters over to the censor and, when I get them back, to deliver them to members of the public.

Though the Post Office Act stipulates that there must be no tampering with internal communications, yet, at the same time, if, in the opinion of a Post Office official, a letter calls for examination—a letter addressed, say, to somebody who contributes to the British Press—he may turn it over to the censor for opening and investigation. Are we to understand that that is done? If so, under whose direction?

No, Sir, that is not done. Officers of the Post Office have no discretion whatever to deal with letters in the manner suggested. They can only hand over letters to the censor in certain areas when those areas have been specified. There is no power in any officer of the Post Office to exercise any discretion as between letters of that character.

There are certain prohibited areas where censorship is imposed, like the North of Scotland and around certain naval centres, and the Post Office knows that letters from or directed towards such areas must be handed over.

My allegation is not that the letters are opened by the censor at all. Usually they are marked, if they are so opened. I take it I have to establish my case to the right hon. Gentleman, and when I have done so the matter may be raised again?

Yes, Sir. If letters have been opened by an officer of the Post Office in excess of his duty, an offence has been committed, and I shall be very glad to look into it.

Business of the House

Coal Industry (Government Proposals)

May I ask the Leader of the House whether he will make any statement in regard to fuel rationing, and, secondly, whether he will state the Business which it is proposed to take on the next Sitting Day?

The Government have considered the question of fuel rationing in the light of the views expressed in the recent Debate, and they have decided to submit to the House after Whitsun their coal proposals as a whole, covering both production and consumption and the organisation of the industry. No White Paper will, therefore, be issued before the Whitsun Recess, and no Debate will take place before that date.

With regard to Business on the next Sitting Day, we hope to conclude the Committee stage of the Finance Bill and, as already announced, to take the Second Reading of the Pensions (Mercantile Marine) Bill. If there is time, we shall also take the Second Reading of the Anglo-Venezuelan Treaty (Island of Patos) Bill [ Lords ] and the Motion to approve the Coal (Valuation Procedure) Rules, 1942.

On the first point, can the Leader of the House say whether the House may take it that, when the new proposals are formulated, they will be issued in White Paper form?

Before the proposals are presented to the House, will the Miners' Federation of Great Britain be consulted as regards the reorganisation proposals, and will their views have the same weight as those of the 1922 Committee? Does the right hon. Gentleman realise that the Debate to which he referred will need to be a very long one?

As regards the latter point, I suggest we had better wait until we read the White Paper. As regards the former, various people who are interested are being consulted at the present time-some have already been consulted—on the question of reorganisation. I do not think it is intended that the Committee sitting on this subject should consult the 1922 Committee.

Will it not be for the convenience of the House if the White Paper is issued in time to give Members ample opportunity to study it?

The object of issuing the White Paper is that there should be that opportunity.

Does the right hon. and learned Gentleman's announcement mean that the statement he made during the last Debate on fuel rationing, which was to the effect that the scheme must come into operation on 1st June, is now thrown overboard and that he is now going the same way as all the other Cabinet Ministers?

In regard to the latter part of the question, I am incapable of giving a judgment. In regard to the former, it means that, in the light of the discussion, the Government have considered that it is better to deal with the proposals as a whole rather than to deal with them piecemeal and that therefore they are delaying consideration of the fuel rationing scheme until after Whitsuntide.

Was it not obvious many months ago that the only way of tackling this problem was to do so in a comprehensive way?

Did not the right hon. and learned Gentleman answer the question himself by saying that the scheme was to come into operation by 1st June, despite the need for reorganisation, and has he not now repudiated his own speech? I would ask him not to treat us in this fashion of making a speech and saying that something must be done and then, because certain forces outside press him—running away.

As I have said, as the result of the discussion which took place the Government have come to this decision.

On the subject of Business, will the right hon. and learned Gentleman follow the practice which is commonly, but not invariably, followed of announcing on the next Sitting Day what the Business will be after the Whitsuntide Recess?

Will the Government use the intervening days to make a real appeal to the country to save fuel?

The Government have already appealed to the country to save fuel. [HON. MEMBERS: "No."] The Government have already appealed to the country, and they hope that the country will take every available step to save fuel. They do not propose to issue any new series of appeals until their policy has been decided and debated.

Will not the right hon. and learned Gentleman himself make one short, lucid broadcast appeal on this question?

Will the right hon. and learned Gentleman, for the guidance of Members, let them have some of the details from the Mines Department showing the exact number of people employed, the tonnage which has been raised and other relevant factors which are now almost secret but which hon. Members must have if they are to form a judgment?

I think any relevant figures of that kind can be given in the course of the Debate, providing that security does not prevent it".

Surely that is too late. The House has to give a judgment on this matter, and unless hon. Members have the facts which are now denied to them, it is impossible for them to come to a proper decision. I hope that some method will be found of informing Members of the proper position.

I can appreciate the reasons why these figures should not be published. [HON. MEMBERS: "Why?"] I said I appreciated the reasons. I would ask the Leader of the House whether, if a Member desires to have this information in his possession in order to be able to make up his mind, and makes application to the appropriate Department, such Member will be provided with those figures?

I will certainly ask my right hon. Friend to consider the possibility of doing that, but I am not clear what figures are required. If an applica- tion is made by any Member who desires to have these figures for the purpose of examining the question, I will ask my right hon. Friend to see what he can do about it.

Will the Leader of the House urge his right hon. Friend to make an appeal for economy in coal before the Debate opens, and put some heat as well as light into the appeal?

Will my right hon. and learned Friend refer to the OFFICIAL REPORT of 7th May, in column 1383, where he will see an example of material figures of production being given to the House?

When the appeal is made, as we all hope it will be, for increased economy, will an appeal be made at the same time to owners and miners to increase production?

In the interval, while the House is making up its mind, will the right hon. and learned Gentleman take steps to see that my constituents get more coal?

I am sure that if my hon. Friend draws the attention of the appropriate Minister to that matter, the Minister will take the appropriate steps.

When the Government come to consider in more detail the proposals which are to be made, will they compare the time it takes to deal with gas and electricity and coal, with the one day we spent on the question of man and woman-power right throughout industry?

Is the right hon. and learned Gentleman not aware that if the Government would lift the ban on the "Daily Worker," they would get all the coal that they require, and more than they would get by fuel rationing?

Anglo-Venezuelan Treaty (Island of Patos) Bill [Lords]

Read the First time; to be read a Second time upon the next Sitting Day.

Public Accounts

Ordered,

"That a Message be sent to the Lords to request that their Lordships will be pleased to give leave to the Lord Ashfield to attend to be examined as a witness before the Committee of Public Accounts."—[ Lieut.-Colonel Elliot .]

Orders of the Day

Finance Bill

Considered in Committee.

[Sir DENNIS HERBERT in the Chair.]

Clauses 1 to 9 ordered to stand part of the Bill.

CLAUSE 10 —(Relief from duty on liquor licences and provisions as to justices' licences, where business discontinued owing to war circumstance.)

I beg to move, in page 5, line 22, to leave out from "but" to "and", in line 26, and to insert:

"as respects disqualification of the premises, subject to the provisions of the next succeeding subsection."

This Amendment and the Amendment which follows it on the Order Paper, both in the name of my right hon. Friend the Chancellor of the Exchequer, refer to Sub-sections of Clause 10 which my right hon. Friend described in his Second Reading speech as falling within the purview of the Home Secretary. The Clause deals with the question of justices' licences where the licensed premises have been damaged by enemy action or business has been discontinued owing to war circumstances such as evacuation or requisitioning of premises. We are doing in relation to these justices' licences what was done by the Finance Act, 1917, during the last war, that is to say, providing for the licences being suspended temporarily, put into cold storage as it were, so as to preserve the rights of the parties during the emergency period. This and the follow- ing Amendment are of a drafting character, and they are designed to make it clear beyond all doubt that the suspension procedure which I have described may be applied in respect of premises damaged by enemy action whether the damage took place before or after the passing of this Bill. They provide that such licences are not to be deemed to have been rendered void by reason of disqualification of premises from the moment that the bomb damage or other damage occurred to the premises in question.

Amendment agreed to.

Further Amendment made:

In page 10, line 35, at the end, insert:

"(5) Where a certificate is given under subsection (2) of this section as respects a business carried on in any premises, and it is certified that the war circumstances included the destruction of the premises or serious damage thereto, the provisions of the Licensing (Consolidation) Act, 1910, as to avoidance of justices' licences by reason of disqualification of premises shall not have effect, and shall be deemed not to have had effect, in relation to a justices' licence granted in respect of the premises—

Clause, as amended, ordered to stand part of the Bill.

With the permission of the Committee, I propose to follow the practice which has often been adopted before and to put the remaining Clauses of this group en bloc . I would ask hon. Members who desire to raise any question, to rise and catch my eye when the number of the appropriate Clause is called.

On that point, may I say that I do not think we have had any explanation, apart from what the Under-Secretary of State for the Home Department has just given, of any of these Clauses? Perhaps it would save time if the Chancellor of the Exchequer or someone on his behalf gave a brief explanation of the effect and object of Clauses 11 to 16.

I think that had better be done on the Question, "That Clause 11 stand part of the Bill."

CLAUSE 11.—(Annual value for duty purposes where business restricted by war circumstances to part of premises.)

Motion made, and Question proposed," That the Clause stand part of the Bill."

These Clauses, 11 to 16, are occasioned, as my right hon. Friend will appreciate, chiefly by war circumstances, and Clause 11 deals with the restriction of a business to a part only of the premises. There may be a case, for instance, in which the bedroom and living-room parts of a hotel are requisitioned but the bars are left free for trade, or there may be a case of a public-house which has reopened with limited accommodation after a temporary reconstruction. As hon. Members will appreciate, the licence duty is charged on the annual value of the restricted premises and Sub-sections (3) and (4) of this Clause enable additional licence duty to be collected during the licensing year, if more of the premises are made available for any increased trade which can be done.

As to Clause 12, under Section 45 of the Finance Act, 1910, hotels and restaurants are entitled to pay a reduced licence duty if their liquor takings in the preceding year did not exceed a specified proportion of their total takings for that year. As my hon. Friends will appreciate, war circumstances may cause their liquor takings to exceed the specified proportions, although their general character as hotels and restaurants remains unaltered. It would, of course, be a hardship if they became liable for the substantial increase in licence duty which treatment as public-houses would involve, and the Clause authorises the Commissioners of Customs and Excise to take any year, for example, the last pre-war year, as a criterion.

Clause 13 provides for a redaction of 5 per cent. in the licence duty payable by publicans in view of the general and severe shortage of supplies of wines and spirits. The Committee may remember that I dealt with this in the course of my speech on the Finance Bill. I regret that I have not been able to accede to the requests made to me, but have only been able to go part of the way. This is the utmost I can do in the circumstances which face me to-day.

Clause 14 provides for a reduction in the licence duties payable on liquor licences other than publicans'. All the licences covered by this Sub-section are held as separate licences, though frequently one trader holds two or more, whereas the publican's is a single licence covering all kinds of liquors. If the trade by quantity in the liquor covered by any licence has fallen by not less than 25 per cent. as compared with a pre-war datum period, the reduction is to be a proportion of the licence duty corresponding to two-thirds of the percentage fall in trade. Subsection (2) extends the effect of the decision I have just described to the publican's licence, which makes the beer trade in the premises the criterion, and applies the authorised reduction to the duty on the single inclusive licence. Subsection (3) safeguards the revenue by providing that if the Schedule A assessment on the premises has been reduced since the outbreak of war, the lessee will not benefit cumulatively by receiving the full amount in question. These are briefly the explanations of the provisions. They are, of course, occasioned by war-time circumstances; I think they are reasonable and fair. I regret that I have not been able to meet all the demands made upon me, but this, I think, is a reasonable attitude to take

I hope it will not be out of Order to express the hope, if I may do so without seeming impertinent to you, Sir Dennis, that the procedure we have just followed will be invariably followed in these cases. As an old Member of the House, I have viewed with some alarm the possible difficulties which might arise when Clauses are moved en bloc without an explanation from the Minister. I think the practice followed by the right hon. Gentleman to-day is a very excellent one; he has made very clear what the Clauses are about, and I venture to suggest with the deepest respect that it is a procedure which should be followed whenever Clauses are taken en bloc . I hope that we have created a precedent to-day.

I have considered this very carefully, and, generally speaking, I am quite in sympathy with the Noble Lord's suggestion, but I was listening to the Chancellor very carefully, because if, for instance, he had been interrupted or if there had been the slightest indication of any possibility or likelihood of there being a discussion on a particular Clause, I think I should have had to stop him at that point with a view to taking the block of Clauses only up to that particular point, where debate would arise.

I should like to ask the Chancellor a question which I think is relevant to these Clauses. Has he, or have his officials, any power or supervision over the prices charged for liquors? Take beer, for instance. The Chancellor of the Exchequer has put on certain additional rates of tax. Has he any responsibility for seeing that publicans do not charge more than the proper increase? Again, has he any powers with regard to wines and spirits, or is that an entirely separate matter?

I am not sure whether the power resides with me as Chancellor of the Exchequer, but I have no doubt, if the case merited it, that power could in fact be used. On this question of whether prices should in fact be fixed, I understand that the trade themselves are taking appropriate action. As far as the Government are concerned, we shall have to consider the matter in the light of the circumstances that may follow any arrangement made by the trade itself. If necessary, there would no doubt be power in the hands of the Government to impose prices.

I would like to be quite clear about it, because it has been represented to me that in certain parts of the country an excessive amount is being added to the prices charged for the supply of beer. I am not raising that matter now, because I would like to verify it, but I wanted to know whether, if it should prove correct, the Chancellor or his Department has any power to ensure that excessive prices shall not be charged.

If my right hon. Friend will let me have any particulars, I will look into the matter. I understand that at the moment there is a general understanding with regard to prices, but if my right hon. Friend knows anything to the contrary, I shall be glad to look into it.

I think the Ministry of Food are already dealing with the prices of liquor in restaurants.

Question, "That the Clause stand part of the Bill," put, and agreed to.

Clauses 12 to 16 ordered to stand part of the Bill.

CLAUSE 17.—(Higher rate of Purchase Tax on certain goods.)

Motion made, and Question proposed, "That the Clause stand part of the Bill."

The Chancellor will remember that at earlier stages I raised certain points regarding Clause 17 and the Schedule which is attached to it. Perhaps you would tell me, Sir Dennis, whether you would prefer me to raise the question of individual items in the Schedule now, or whether you would prefer me to postpone the question until you actually put the Schedule to the Committee?

I think that if it is a case of individual items, I would prefer the right hon. Gentleman to leave it until we come to the Schedule. I assume that he has not got any Amendment on the Order Paper, and that he is not proposing to move any Amendment to those items in the Schedule, but I want to call his attention to the fact that it may well be that if he wanted to do anything of that sort, he would be debarred by our having passed this Clause.

Perhaps, then, you would allow me to ask the Chancellor of the Exchequer a question. In the course of an earlier stage I drew the Chancellor's attention to two items in the Schedule and pointed out that while Members on this side of the House, and possibly in other places, were prepared not to oppose this Clause as a whole, they were doubtful abouts its application to two items. Perhaps the Chancellor might be permitted at this stage to reply to that question.

I have sent my right hon. Friend a full, detailed explanation of the two points, which are very technical. Perhaps under those circumstances he will allow the matter to be dealt with on the Schedule.

Perhaps on this occasion it would be better, if the right hon. Gentleman wished to refer to certain items he should wait till we come to the Schedule. I say this as I gather the right hon. Gentleman will not wish to move Amendments to the Schedule.

Question, "That the Clause stand part of the Bill," put, and agreed to.

CLAUSE 18.—(Charge of Purchase Tax on account books and plain books.)

Motion made, and question proposed, "That the Clause stand part of the Bill."

I should like to ask the Chancellor of the Exchequer whether he has anything further to say on Clause 18. Has he any further statement of policy with regard to those matters about which several speeches were made during the earlier stages of the Bill? I do not think he has given a considered reply so far as to whether in the light of what has been said he has any views with regard to the Purchase Tax and its continuance in its present form with regard to various commodities.

I do not think I can add anything to the previous statements I have made with regard to this matter. So far as the Purchase Tax is concerned, its chief value to me, at any rate in one very important respect, is the considerable revenue I am receiving from it, but I have seen my way, for what I think is a good and valid reason, to exempt from purchase tax two very considerable items, one, utility clothing and the other, utility boots and shoes, the effect of which, no doubt, will be of some value and help to the sections of the community of which my right hon. Friend often speaks.

So far as this particular Clause is concerned, it is really to deal with the difficulty that has arisen with regard to the definition of account books. In the administration of the Purchase Tax in this particular connection the question arose, What is a book? There has been a great deal of difference of opinion and difficulty of administration on this particular matter. On the one hand, the meaning of what is a book in this particular respect may be limited to a bound volume from which the pages cannot be removed without mutilation. On the other hand, it may be held to include what are known as loose-leaf books from which pages can be readily removed. Early in the administration of this tax it was represented to the Treasury that in modern business unbound records and forms had largely replaced bound books and that it would be reactionary to exempt the old fashioned ledger and tax its loose-leaf rival. It was ultimately agreed—and this was really the beginning of the difficulty— to regard as free of tax, loose-leaf refill sheets for plain books and account books, accounting forms in books, in pads and other forms, sheets and cards designed for use in a machine accounting system.

Then the difficulty began, and questions arose. Various people took different views and took different action, as, for instance, whether packing lists, laundry lists, share certificates, insurance forms, football coupons, were to be classed as accounting forms or not. Similarly, whether loose-leaf sheets or pads for refilling note books, drawing books, etc., were to be so regarded. There were different interpretations, and certainly the most conscientious traders found it impossible to decide in many cases what was the right line to adopt. Unfortunately, some of those not quite so conscientious began to realise that by punching a few holes or printing a few lines, they could sell, tax-free, paper to be used as ordinary stationery, to the detriment of their more conscientious competitors. I have had to resolve the matter, and in the conclusion I have come to I have proposed this Clause, so that these difficulties will be at an end and the tax will be imposed in all cases. That is really a brief explanation of this particular Clause. It is one of the few exceptions and difficulties that have arisen with regard to the administration of this tax. I think that everyone will be glad to see it cleared up. I will not say that everyone will be glad that it is being done in this particular form, but administration was getting so involved that some action had to be taken. It is owing to that fact that I have put this Clause to the Committee to-day.

This Clause is a narrow one, and I cannot go beyond its limits, but I think it is rather unfortunate that at a time when the utility of the Purchase Tax is rather being called in question the Chancellor is finding it necessary to increase its application rather than to diminish it. I will only say that I hope he will consider the possibility in this case, as in others, of reducing the application of the Purchase Tax for the purpose of simplification and preventing it increasing costs, and thereby acting in a measure as a stimulus to possible inflationary tendencies.

May I draw attention to the fact that this kind of thing is in direct conflict with the avowed stabilisation policy of the Government? Could the Chancellor give us a few words of explanation? The whole of the money paid to the Chancellor will be charged as a cost in production. It is difficult to see that he can, as a net result, get very much revenue from this, but it does have the effect of increasing prices.

The hon. Member is now discussing the principle of the tax, which does not arise on this Clause at all.

My point is that this is a bad tax, and what I wish to put to the Chancellor is whether this would not be an opportunity for him to give us some explanation of his policy, which does seem to be in conflict with the avowed policy of the Government.

That does not arise. It is only a question of these particular items with which the Clause is concerned.

But am I not in Order in drawing the attention of the Chancellor to the fact that he is increasing an existing evil?

Yes; the hon. Member has done that. He certainly must not continue to discuss the desirability or otherwise of the Purchase Tax generally.

I am obliged to you, Sir Dennis. Could the Chancellor say another word on this matter?

No, Sir. I do not think I can say any more than I have about the tax and the reason for it. I do not want to provoke unnecessary controversy, because I am anxious for the Bill to get on the Statute Book. This Clause deals with a minor matter. I would be happy to have private conversations with my hon. Friend on the subject.

The Chancellor said that the vital matter to him was the amount of the tax. Could he not give some indication of what proportion will actually come to him? The point I am making is that the proportion will be very small; but it has had the effect of increasing prices.

I hope not. I know my hon. Friend's view on that matter, but I still ret some £80,000,000 or £90,000,000.

I think that this is a transgression of my Ruling as to what may be done on this Clause.

The concession on utility clothing and boots is very warmly appreciated in the circles in which I move. Has the Chancellor taken other items into consideration? The Purchase Tax appears to fall most heavily on the industrial workers.

I do not think utility clothing is the same thing as account books—or that it is likely to be made of the same material.

Question, "That the Clause stand part of the Bill," put, and agreed to.

Clause 19 ordered to stand part of the Bill.

CLAUSE 20.—(Income Tax for 1942–43.)

There is an Amendment down in the name of the hon. Lady the Member for Frome (Mrs. Tate), which, after very careful consideration of what is likely to be the intention behind it, I have decided to select; but it is as well that I should warn the Committee of the limits which will be permitted. I am anxious, of course, that there shall be no misunderstanding or misapprehension, which might cause me to have to interrupt hon. Members in the course of their speeches.

I beg to move, in page 11, line 20, after "pound," to insert: attack, in the interests of the citizens. It is, therefore, necessary that we should be assured, when we impose this tremendously heavy taxation, that its incidence falls justly in proportion to the benefits derived by the citizens from the taxation. That is, unhappily, not the case in this instance. Certain benefits are paid by the State to the citizen, which come directly from taxation, but which are not equal in the case of men and women.

One very glaring instance is that of compensation for war injuries for gainfully-employed civilians. The money with which those people are compensated is raised solely by taxation. It is a very shocking thing that for a woman injured in an air raid the award—derived solely from taxation—is, in the case of 100 per cent. injury, only two-thirds of the benefit which is given to a man in like circumstances. Whatever the response of the Chancellor of the Exchequer, and whatever the attitude of the House on this subject, I can assure hon. Members that I have addressed meetings on the matter all over the country, and I can always guarantee to get my audience 100 per cent. in favour of equal compensation for men and women for war injuries. The Chancellor must not laugh at that. The other day, at the meeting of the Conservative Central Council, the Government saw fit to send the Minister of Pensions down to oppose my motion that compensation for war injuries should be equal in the case of both men and women; and a very sorry figure the Minister of Pensions cut. Suffice it to say that the motion, in spite of such heavy opposition, was carried by at least 99 per cent.

I was not laughing at my hon. Friend. I was only thinking that whatever she brought forward she would have equal success.

I must say that these unsolicited bouquets rather take the wind out of my sails. I hope it augurs well for the spirit in which the Chancellor will meet my request. I have always stood for equality of opportunity as between men and women; therefore, I should very much regret to see an unequal rate of Income Tax as between the two sexes; but hon. Members will appreciate that it takes a great deal of trouble and ingenuity to raise these points on the Budget, and this was the only method by which to draw attention to the glaring injustices which women are suffering at present in the incidence of payments derived direct from taxation. The Chancellor may say that Income Tax is derived to a greater extent from the male sex than from my own sex, but that is not true. There may be a smaller sum paid in Income Tax by women than by men; but how much-Income Tax would men be able to pay were it not for the help of women? If they were not cared for from the cradle to the grave by women, they would not reach even the rather lamentable degree of efficiency which they now reach. I rather fear that the Chancellor is funking the job of replying, and is leaving it to the Financial Secretary. If so, I hope that the Financial Secretary will at least show that he is fully conscious of the grave injustice that is being done to women. In some of the cities which have recently been bombed there is a very strong feeling among the men that this injustice should be wiped away. I hope that I shall have the help of the Chancellor in achieving that aim.

I desire to support the Amendment which has been moved by the hon. Lady the Member for Frome (Mrs. Tate). She has set a very good example, in dealing with a very difficult subject, in keeping within the rules of Order, and I hope that I may be able to follow that example. The Chancellor of the Exchequer told us just now that he was extremely anxious to secure agreement. I think his words on Clause 18 were that he was anxious not to provoke controversy. I therefore hope that, in view of that, he will give sympathetic consideration to the purpose behind this Amendment and the motive which has actuated the hon. Lady in moving it.

I welcome the opportunity of supporting the Amendment and of being able to say that feeling on this matter is not confined to women only, but that men themselves feel that there is an injustice which is perpetuated by making the Income Tax the same for women as for men, whereas the benefits which are derived from this taxation are confined to the one sex only. I welcome the Amendment also because it is a sign of the offensive spirit, and, in order to remove misunderstanding, I had better explain that by that I mean the spirit of attack. The hon. Lady, in moving the Amendment, has carried the war into the enemy's country, and I re- gret to say that the enemy in this instance is the Chancellor of the Exchequer. He cannot oppose the Amendment with the argument that it involves sex discrimination, because, as the Committee have been reminded to-day, he has already laid down the law of sex discrimination in another very important matter—the question of compensation for air-raid injury. There is no justification whatever for it, and, therefore, he must expect the reply to that argument that, in the view of those who support the Amendment, "What is sauce for the goose is sauce for the gander." I submit, therefore, that in moving the Amendment, the hon. Lady, true to her sex, is perfectly logical, but I think I can say, what is characteristic of her sex, that she is prepared to compromise on this matter to the extent that, if the Chancellor of the Exchequer wants to get over the difficulty created by the Amendment and to be able to maintain the same standard of Income Tax for men and women—a desire which, as the hon. Lady has already said, she herself shares with the Chancellor of the Exchequer—he can obtain what he and she also both require by withdrawing the unjust discrimination which exists in the matter of injury as a result of airraid damage. I therefore support the Amendment for the reasons which have been put forward by the hon. Lady, and I hope that the Chancellor of the Exchequer will realise that there is a very considerable feeling about the discrimination in that matter and that that is the reason why this particular Amendment has been put forward.

I will not detain the Committee for long, but I cannot hear this question raised without just adding my voice, because the hon. Lady the Member for Frome (Mrs. Tate) has shown courage and ingenuity in raising it. I do not entertain any hope that the Chancellor will accept the Amendment, but I would be glad if he did. I believe that the great majority of the women in this country care so much for the causes for which they are fighting that they are willing to play their part in helping to find the money, but the argument which the hon. Lady, and the hon. Member for Cheltenham (Mr. Lipson), put forward is perfectly logical. I want to utter this little word of warning. There really is a growing sense of intense irritation among women of all parties and of no party in the country at what they conceive to be the regular Government game with women of "Heads I win, tails you lose." It is not only on the question of taxation, but in many other fields, which it would be out of Order for me to enumerate here, that women are in the mood that although most of them may appear to be agitated a little by this sort of question—I have never yet met a woman, or a man cither, who disagrees with the principle of equal rights of compensation for war injuries—they may remain silent on the subject because they are too busy in carrying on their various war efforts. But, like men, they keep all these things and ponder them in their hearts, and, as one great woman leader said in the last war—it was Mrs. Pankhurst—speaking of a Minister with whom she had a bone to pick, "We have buried the bone, but we have not forgotten where we have buried it." I would like to warn the Chancellor of the Exchequer that the number of bones all over the country which women have buried and which they would like, when the time comes, to pick with the Chancellor of the Exchequer is rapidly growing, and we have not forgotten where we have buried them.

I would like very briefly to support the Amendment of the hon. Lady the Member for Frome (Mrs. Tate) and to say how pleased I was to see that she had brought up this case to-day in the very clever and cunning way she did. She, I believe, somehow regards the State as a big insurance company to which we are all compelled to pay a premium, and for which it gives certain benefits. It is extremely unfair that the heaviest premium should be demanded by the State from a certain sex and that the benefits that are paid out to them should be only two-thirds of the benefits given to the men.

I support the Amendment and congratulate the hon. Lady the Member for Frome (Mrs. Tate) upon her effort in the matter. She might well have asked that the amount which women might be expected to pay should not be 6s. 8d. but 5s. I support the Amendment on the broad grounds that we as a nation are still of the opinion that the position of women should be a subsidiary one both in the industrial and many other fields, and as long as that out-of-date theory is held by industries, then, in the matter of the burden of taxation, the State, in order to be equitable, must make the amount less for women than for men. No one has given an explanation of why women do not receive equal compensation for—

That is just the point I have been watching. Other hon. Members have got very near to it, and I think I have stopped the hon. Member in time. He must not discuss the question of the merits or otherwise of equal compensation.

Though we may not discuss that question, may we not mention it? Would it be in Order to mention the discrimination made by industry generally between women and men with regard to equal work and equal wages?

Yes, it can be mentioned, but not discussed. The hon. Member, I feel sure, knows that what would be an appropriate subject for Debate by itself on one of those principles is not a Debate which can be founded on this Amendment.

Then all one can say, broadly speaking, is that so long as the present attitude prevails Amendments of this character will be submitted to the House where, at least, we can show intelligent decision in the matter.

I would like to congratulate the hon. Member for Frome (Mrs. Tate) on the ingenious method by which she was able to put down this Amendment. I regret, however, that I cannot support her, for a reason with which I think she will be so sympathetic that she will be disposed to withdraw her Amendment. The reason why I oppose it is very simple. My hon. Friend desires to reduce Income Tax for women in order to put right another matter which she thinks is wrong. If we had two rates of taxation, one for men and the other for women, my hon. Friend is doing exactly that which she is most anxious not to do, namely, to create inequality. She wishes to see equal rights, yet her speech has counteracted that very suggestion. I am wholly in favour of what my hon. Friend desires to do, namely, that which is in the minds of all hon. Members, but I shall be out of Order if I develop that to-day. This Amendment would cause inequality among men and women and, as I have stated, would defeat the real object my hon. Friend has in mind. I therefore trust she will withdraw it.

Finance Bills during the war have been discussed very narrowly on the basis of what was in the Bill. Hon. Members have gone back to the old technique, and have done it very well, of raising issues quite different from the apparent purpose of the Amendment. I played the game myself at times in the past, and, as one technician to another, I would like to compliment the hon. Lady who put down the Amendment and the hon. Member for the English Universities (Miss Rathbone), who represent two classes of women taxpayers, married women and spinsters, on having been able to raise a discussion. But I cannot deal with the purposes, some of them, I think, undisclosed, behind this Amendment. I have to deal with the Amendment as it is. While the hon. Member for Frome (Mrs. Tate) may have mothered the Amendment for good reasons, I have to reject it purely on financial reasons. It is quite out of the question that we should make any such concession at the present time. To do so would lose us vast sums in revenue and would be resented, I think, by women in the country who are giving much to the war effort and feel that they should not be excepted from the same sacrifices as their male relatives. They would not like it at all.

It is no good the hon. Lady telling us she can get expressions in favour of her point of view on quite different matters at any meeting in the country and playing that upon the war nerves of my right hon. Friend and myself. We are not concerned with that problem; we are far more concerned with the many demands made throughout the war to give great opportunities of service to women, including the hon. Lady the Member for West Fulham (Dr. Summerskill), who is always asking us to put women into the Home Guard. When the hon. Lady says, "All women ought to pay much less taxation," one does not suspect for one minute that these matters have any personal application. The hon. Ladies who mothered the Amendment do not really want to pay less tax. They would be in a very unique position if they did. I must, however, point out what it would mean if the Amendment was accepted. Take the case of a single man and a spinster, with earned incomes of £300 a year. Under this Amendment a single man would pay £66 2s. 6d. in tax and a spinster £44.

The hon. Lady says, "How right", but this war is not being fought so that women will be richer at the end of it than men. At the other end of the scale, possibly that to which the hon. Lady belongs, on an unearned income of £100,000 a year a single man, under the existing scale, is left with £5,750 after paying tax. I bring out this figure once more because it shows by the general imposition of taxation what the Clause means. As I have said, a single man would be left with £5,750. A single woman, under the Amendment, would be left with £22,395, and I have the feeling that if women in the country were left with such higher incomes and purchasing power it might have a very inflationary effect. An object of the Budget and the Finance Bill has been to deal with the question of inflation, and I find it hard to imagine, on the spur of the moment, a better move towards a fully inflationary movement than to allow this tremendously increased purchasing power to all women just because they are women. So, on purely financial grounds, which are the only grounds for discussing this Amendment—I am not concerned with what the hon. Lady has in mind; I do not know, and probably she would not tell me everything—the acceptance of this Amendment is out of the question. In fact, the hon. Member for the English Universities gave the show away just now by saying she would be rather surprised and, I think, slightly grieved if it was accepted. To leave a final thought with the hon. Lady the Member for Frome, if seems to me that if you want more money to spend in a particular direction, one of the craziest ways of getting it is to move an Amendment which would take the money from a pool out of which alone any increased payments could be made.

As no one would be sorrier than myself to see this Amendment carried—I only brought it forward to raise the question of equal compensation for war injuries which a certain instinct for which women are so famous seems to tell me I have done successfully—I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

I take it that this is a suitable opportunity to raise the question of the enactments in regard to Income Tax and their re-enactment for the ensuing year. I should be glad if the Chancellor of the Exchequer would tell the Committee whether, in the interval since the previous stage of our proceedings on the Budget, he has given consideration to the points I put before him in the Second Reading Debate. I am aware of the difficulties of the situation, the need the Chancellor has for money, and the need he has had for the steep increases in taxation that have been imposed in recent years, but as I said in the Second Reading Debate, that is all the more reason why he should ease the burden in those cases where it presses heavily. On that occasion I gave several illustrations, and, of course, the Financial Secretary gave natural and obvious reasons why there would be difficulty in meeting my suggestions; but I hope the Chancellor will go a little more into the spirit of the matter, because he must recognise that these high rates of tax press much more heavily on certain people than they do on others.

I have purposely refrained from taking up the time of the Committee by putting a number of Amendments on the Order Paper, more particularly because I realised that it was for the Chancellor rather than the Committee to decide in what particular way any relief could be given, but by way of focusing the mind of the Chancellor on these points, I would like to ask him whether, if he cannot do anything in the matter now, he will, between now and the time when he brings forward further financial proposals a year hence, give earnest consideration to the possibilities of meeting the hardest cases. I want to mention three types of very hard cases. First, there are the cases of old people who cannot readjust their life in the way that younger people can to new circumstances, and who are placed in extraordinary difficulty in that respect. Secondly, there are the cases of elderly people who have dependants living with them, or persons who are not relatives acting as housekeepers. Thirdly, there are the cases of elderly people who are suffering from some infirmity and who need a housekeeper, but who are not allowed to have any deduction simply because they do not belong to that particular class—an arbitrary class, as I think the Chancellor must admit, of widowers and, I think, one other category—who are at present allowed this concession. I ask the Chancellor whether he has had time to give consideration to these matters and whether he can make any suggestions for improvement, and in so far as he does not feel able to go as far as that, I ask him at any rate to promise that between now and next year he will give special attention to the cases of hardship to which I have referred.

I think the Chancellor will recollect that on one or two previous occasions I have tried to ventilate a small grievance, but one of importance to the people concerned, in connection with the administration of Income Tax. The right hon. Gentleman will remember, perhaps, that early in the war I asked a Question about the payment of Is. 3d. an hour to members of the Royal Observer Corps and he replied that such payment was to be regarded as out-of-pocket expenses. The answer which he gave was very definite. Members of the Royal Observer Corps naturally noticed that reply, and later on they were astonished to find that the Is. 3d. an hour paid as out-of-pocket expenses was included in their assessments for Income Tax purposes.

I have treated the hon. Member with some leniency in allowing him to set out this point quite fully, but it would be out of Order for him to develop it further.

May I ask for your guidance, Sir Dennis, as I have tried to raise this matter on several occasions? When would it be in Order for me to raise points concerning the administration of Income Tax by the commissioners who collect it? I thought it might be proper to do so when we were discussing the imposition of the tax.

I do not think I can here and now go into the question of when it would be in Order for the hon. Member to raise this matter, but clearly it cannot be raised on this Clause, and indeed, I think not on this Bill.

I want to follow up the appeal made to the Chancellor of the Exchequer by my right hon. Friend the Member for East Edinburgh (Mr. Pethick-Lawrence) by citing a case that is deserving of consideration, namely, that of blind persons who are handicapped to the extent of requiring the services of someone to look after them all the time. There is no allowance for that sort of help being given to blind persons. I have in mind the case of a blind person who has a pension that just meets the cost of the accommodation in which he lives. The pension has been paid for by regular contributions, as the person concerned is an ex-school teacher, and has paid for this superannuation allowance. The whole of this pension, however, is taken up in paying for his accommodation, and the service which that person requires because of his being helpless —

I do not know whether I allowed the right hon. Member for East Edinburgh (Mr. Pethick-Lawrence) to go farther than I ought to have done, but the hon. Member will recognise that if he wanted to move an Amendment to effect what he has referred to, he could not do it by Amendment to this Clause. He would have to move a new Clause. Therefore, he will recognise that it would be out of Order to discuss the matter on this Clause.

I was hoping that the leniency which you, Sir Dennis, extended to my right hon. Friend might be allowed to me, so that I could ask further questions on this particular type of case, and ask the Chancellor to give consideration to these matters before bringing forward another Budget.

The hon. Member has succeeded in raising the point before being stopped, and I can only ask him to console himself with that fact, and not discuss the matter further.

The right hon. Member for East Edinburgh (Mr. Pethick-Lawrence) referred, in his speech, to a number of hard cases some of which would be covered, I think, by a new Clause which I have on the Order Paper later. I rise now only to say that I hope if I do not develop any argument of my own following his argument on that subject, that in itself will not be taken as a reason why my new Clause should not later be called.

I think it is apparent that I can only make some general observations upon the important point which my right hon. Friend the Member for East Edinburgh (Mr. Pethick-Lawrence) has raised on this and previous occasions. One entirely sympathises, of course, with the point of view which he has put forward on a matter which appeals to most of us. He has put to me the case of a number of people who are in less fortunate circumstances than others, and he has asked whether something can be done for them. I would, however, remind my right hon. Friend of two things. The first is that I am afraid all of us, even those people who may be described as badly circumstanced at the present time, have undoubtedly to suffer to some extent, some perhaps more than others, as a result of this war. But one would not be accused of being hard, in making the observation that the suffering which may arise from the imposition of taxation is not comparable with what millions of people are suffering in the world to-day. We must have some sense of proportion when we deal with matters of this kind, and one need only make that allusion, and leave it at that.

The second general observation is that, while it is true that some of these old people—and I very much regret it—will be deprived of some measure of comfort which means a good deal to them, this Budget remains as it was when it was presented, and, so far as the main proposals are concerned, no one need make any contribution, as will be realised when I recall that the chief items under which I am to obtain revenue are tobacco, alcohol and entertainments. A good many people have, in fact, written to me telling me what a splendid Budget it is, because they are not in any way affected by it, and nobody need be affected by it if they refrain from consuming tobacco and alcohol. Therefore one must keep a sense of proportion in these matters. It may be that a number of people will suffer a certain amount of hardship and be disagreeably affected by this Budget, but the fact remains that it does not in any way affect what one might call the necessities of life. While I very much regret that I happen to be the instrument whereby an old age pensioner is not able to have so many pipes of tobacco, one cannot, of course, put this in the same category as other matters and what other people are suffering in the world to-day. I say that in answer to my right hon. Friend.

The other point which I wish to emphasise is that, as I said in my speech on the Second Reading of the Finance Bill, we have not been unmindful of this particular section of the community. If you take the Government's policy as a whole, not only in connection with Budget matters, but in connection with economic matters generally, you can put up a tremendous case for what has been done for the people for whom my right hon. Friend has been speaking. I have not been in any way unmindful of their position, and provision has been made for them at a very considerable charge to the State. These people for whom my right hon. Friend is speaking have benefited from the fixation of maximum prices. That policy is still being pursued by the Government. No one has, in fact, benefited more than they. As I pointed out in my Budget speech, the food index figures have been reduced as a result of the Government's policy. If one asks whether it is not very harsh that old age pensioners, or other people on fixed incomes, for whom I have a great deal of sympathy, should be affected by the doubling of the Entertainments Tax and this terribly high taxation on alcohol and tobacco —

I do not think the country is worried about old age pensioners and the Entertainments Duty. What the country is really worried about is that the old age pensioner is not receiving more from public assistance to buy these necessaries which have risen in price.

I appreciate the point, and I am endeavouring to say that, if you look at the balance on the one side, you must also look at the balance on the other. I would remind the Committee that the food index figure for last April was 23 per cent. above the level at the outbreak of war, and that it is now only 18 per cent. above that level. You may say that it is not sufficient, but it is a very striking item of the other side of the balance-sheet.

I am referring to the ordinary food index. You may attempt to minimise that, and say that everything is not included, but, if you want to be fair to the country and to these people— and I had an opportunity of talking to a number of these people the other day—it is only right to point out that, as my right hon. Friend knows, the annual cost of stabilising prices has already reached the sum of £125,000,000. I anticipate, owing to the further measures I have had to take in connection with utility clothing, and particularly in connection with boots and shoes, that the cost to the State will be bigger during this year than last year. Therefore, one can contend that that is another considerable item on the other side of the balance-sheet. I know it can be said that old age pensioners and people with limited incomes do not make very large purchases of clothing at the present time, and that they use what is given to them and that sort of thing, but the course which the President of the Board of Trade is taking with regard to utlity clothes, and particularly with regard to boots and shoes, is an item you must put on the other side of the balance-sheet. I do not want to make a controversial statement, but, if you looked at the balance-sheet to see on which side the old age pensioner stood, you could, if you wanted, say, taking all things into consideration, that these people may not be worse off but better off as a result of the Government's proposals.

My right hon. Friend, speaking with great persuasiveness and authority, asked me if I would not consider these cases. Of course, I will consider them, but I can hold out no undertaking. We shall have to see what the course of our financial affairs is. We shall have to see whether hon. Members opposite make any further demands upon me in other connections or whether they are realising that in the end all these things have to be paid for, sometimes by the sections of the community for whom my right hon. Friend has been speaking. That is a lesson that has to be learned. My hon. Friend knows it— he has often put that forward—but not everyone else does, and I hope that those who are thinking of these sections of the community to-day will be temperate in their requests and demands as far as the future is concerned. I should only be too glad if things turned out in such a way that I could give relief here and there, as I have shown it is my endeavour to do during the two years that I have been Chancellor of the Exchequer.

Question, "That the Clause stand part of the Bill," put and agreed to.

Clause 21 ordered to stand part of the Bill.

CLAUSE 22.—(Increase of allowance in respect of wife's earned income.)

Motion made, and Question proposed, "That the Clause stand part of the Bill."

I listened with very great interest to the Budget Statement and read it again very carefully afterwards. I have also read the White Paper which the right hon. Gentleman has issued on the subject of this Clause, but I am still unconvinced of the necessity of this vast expenditure of £25,000,000. At present the married working woman has an exemption of nine-tenths of her wages up to £45, and now the right hon. Gentleman proposes to raise this exemption to £80 at a cost of £25,000,000 to the State.

I am discussing Clause 22, which proposes to substitute £80 for £45 as the limit of exemption. The Chancellor of the Exchequer himself said that it is going to cost the State £25,000,000. I feel that this expenditure is excessive. While I sympathise very deeply with the married woman who is working and getting her well-earned wages, I cannot sympathise any less with the working woman who is stopping at home and looking after perhaps four or five children and not getting any exemption whatever. The Chancellor, when he thought of this, must have said with the poet: my right, I cannot help wishing that some new Aristophanes would arise to deal with these modern Cleons.

May I contrast what the Chancellor is proposing now with the totally different policy adopted by the Coalition Government of 1931? Then we were faced with the terrible crisis of the pound sterling, and what the Government did was to reduce wages and cut down salaries, even those of His Majesty's Judges, which was of doubtful legality, and increase taxation enormously. Then they had the courage to go to the country, and the country ratified their economies by an overwhelming majority. But when I hear the Chancellor proposing to allocate no less than £125,000,000 towards a reduction in food prices, and at the same time refraining from putting an extra tax on the lowest seats in the cinema, I cannot help asking whether the historian will not say of the British people what the great satirist Juvenal said of the Roman Plebs:

Unlike my hon. Friend, I welcome the provisions of this Clause. It is there, no doubt, to encourage women who are not otherwise fully occupied to go into industrial work, but I think it should be observed that in accentuating the discrimination between women gainfully occupied and women not occupied, it it unfortunate. It should be constantly borne in mind that the majority of women who are not engaged in industry are doing full-time jobs in their own homes. Most of them have families and many, in addition, have both adults and children billeted upon them, and in their spare time they are likely to be performing much voluntary service. In those circumstances, in a provision which ignores the fact that many married women without earned income are performing just as well a public service as those women who have gone into industry and are getting earned incomes, there is something lacking. Until that is made good, a grave injustice will remain. The Clause has not touched the root of the problem. The real trouble lies with the joint assessment of husband and wife. The Clause has merely added another patch, although in itself a good patch, to our existing patchwork system of allowances. In the White Paper on taxation of weekly wage-earners it was stated, in paragraph 43:

"It has, for instance, been repeatedly alleged that a single woman in industrial employment is in a more favourable position than a married woman, but this is only true where the earnings are large."

The fact is that a couple gain financially by being married only if the woman has a modest earned income and no unearned income. Otherwise they lose. Is this fair or desirable? Consider the case of a couple where the woman is engaged whole time in her home doing a really full-time job, with perhaps a large family, and who, therefore, has no possibility of earning anything. That couple receive a personal allowance of £140. If they were unmarried they would get a personal allowance of £80 each. That is not the whole story. With a married couple the first £165 of their joint taxable incomes is taxed at the reduced rate of 6s. 6d. in the £, whereas if they were unmarried, the first £165 of each of their separate incomes would be taxed at the reduced rate. That makes a substantial difference, and it is absurd to suggest that the system of allowances does not grievously hit married women, and especially married women with unearned incomes. I submit that until the whole system of allowances and the incidence of taxation upon married persons are changed so that there is separate assessment of husband and wife, the allowances being recast, we shall not get a satisfactory position. In recasting such allowances one thing should be especially singled out for improvement; that is, the child allowance, which at £50 is totally inadequate.

Question, "That the Clause stand part of the Bill," put, and agreed to.

Clauses 23 to 26 ordered to stand part of the Bill.

CLAUSE 27.—(Farming.)

Motion made, and Question proposed, "That the Clause stand part of the Bill."

This is the Clause under which Schedule B tax on farming is trebled. There seems to be some doubt as to exactly on what land of a farmer the trebled tax is to apply. Will it apply to pleasure grounds or gardens on a farm, or only to agricultural and farming ground proper? I should have thought that it was to the latter only, but as there is some doubt about it perhaps the Financial Secretary will clear it up.

I do not think there is any doubt about it, but I can state what the position is. Under Section 10 of the Finance Act, 1941, farming is in general treated as a trade, and accordingly assessable under Schedule D by reference to actual profits instead of under Schedule B by reference to the annual value of the land. We have widened the scope this year by reducing the minimum figure from £300 to £100. Therefore, we have merely brought in a lot more properties. Section 11 of the Act exempted from the compulsory transfer to Schedule D farmers not exceeding £300 in annual value. It applies only to what is generally called farming land. In arriving at the total, market garden land, the profits from which are now chargeable under Schedule D, is included with ordinary farming land. That is, I think, quite clear and I do not think there is any conceivable doubt about it.

Question, "That the Clause stand part of the Bill," put, and agreed to.

CLAUSE 28.—(Exemption from tax of interest on tax reserve certificates and repeal of provisions as to allowance of discount on tax paid in advance.)

Motion made, and Question proposed, "That the Clause stand part of the Bill."

The introduction, or possibly the reintroduction, of an interest or any form of annual income which by law is free from taxation is the introduction of a bad principle, even if other evils did not flow from this Clause. It is a bad system for the State to exempt from tax anything which may be regarded as income. This Clause allows an interesting and simple loophole for tax evasion. I take it that in the Chancellor's mind this exclusion of the interest on Treasury Tax Reserve Certificates, which runs at 1 per cent. free of tax, is a quid pro quo for the abolition of the 2½ per cent. rebate which used to be allowable on the pre-payment of Schedule D. The Tax Reserve Certificate is not limited to Schedule D. It can be taken up by any taxpayer to meet future tax. Take the case of the Schedule A Surtax payer—and the bulk of the very large incomes arise under that Schedule. The Schedule A Surtax payer who has £100,000 of tax to pay next year goes to his bank and borrows that amount and buys a Tax Reserve Certificate. He pays 4 per cent. on that. He therefore pays the bank £4,000 in interest. That is set against his highest range of income, which bears 19s. 6d. in the £. Therefore, the net cost to the Surtax payer of borrowing £100,000 is £100. He buys a Tax Reserve Certificate for £100,000 and gets 1 per cent. interest for 12 months, which is £1,000. He has borrowed money from the bank which costs him £100 for the year, so that he has made £900 clear profit on the transaction. This is an anomalous state of affairs. This Clause is not only bad from a general principle standpoint in excluding certain income from tax, but it offers a simple opportunity for the Surtax payer to make a considerable increase in his income, because £900 free of tax is a considerable increase in anybody's income in these days.

The hon. Member for Chesterfield (Mr. Benson) is always very ingenious in submitting these mathematical calculations which, in point of fact, have no practical relevance at all.

Because the case stated is a purely theoretical one. I have not checked the hon. Member's figures, but I know that he is sufficiently accurate to make out a mathematical case. It starts by saying that the taxpayer borrows £100,000 from the bank in order to take up Tax Reserve Certificates. I should be very much surprised if any bank lent him any money for the purpose.

Because the general understanding is—we have discussed this matter before in regard to war savings and the rest—that the banks will not lend money to individuals in order that they may put that money into any form of war savings, and Tax Reserve Certificates are akin to war savings. I do not suppose for a minute that such a case as the hon. Member described could arise, except as a mathematical calculation; and, further, there are not so many people with £100,000 of income at any given moment which they could invest in Tax Reserve Certificates. The maximum period for which interest can be earned on Tax Reserve Certificates is two years, and they can only be tendered in respect of direct liabilities to taxation. In the case of very large incomes it is probably true to say that a high proportion of the income has already had tax deducted at source. That is why I say that though theoretically some such procedure is no doubt possible, in practice I do not think it could arise in any given case. The hon. Member keeps on saying that it could arise, but on the case he put it involves the proposition that the bank would lend £100,000 to a particular taxpayer to buy these certificates. I say that is not likely to happen in practice, because it would be contrary to Government policy; and, secondly, the number of people able to find that amount of money straight off out of income none of which has had tax deducted at source is so small that we need not bother ourselves about that very slight possibility when taking into account the advantages of having Tax Reserve Certificates.

In passing, I may say that this is not a quid pro quo for Sub-section (2) of the Clause. Sub-section (2), which abolishes the discount, gives effect to a recommendation made a very long time ago, and obviously it is desirable to do it now when there is another possibility of advance investments for tax purposes. The other side of the picture, against the theoretical one, is, I submit, that over £200,000,000 of these Tax Reserve Certificates have been taken up by people as providing one simple way by which they can, as they get in their money, put some of it aside to meet their tax obligations, which the hon. Member, as a Surtax payer, knows are very difficult to budget for on account of the lag before one has to find Surtax money. These Tax Reserve Certificates have served a very useful purpose, otherwise certificates to that amount would not have been sold. While my right hon. Friend, when he agreed to these various proposals, was well aware that in a certain minute number of cases affecting very high Surtax payers there might be some advantage over the advantages given to the general run of taxpayers, he knew that that was just part of the risk that one had to take. In order to make the certificates attractive for their purpose, one had to take account of the general body of people rather than the minute fraction of them, if indeed they exist to-day, to whom the hon. Member has called attention. The proof of this particular pudding is in the eating, in the sale of the very large number of certificates which has been effected.

I think the right hon. and gallant Gentleman might have thanked my hon. Friend the Member for Chesterfield (Mr. Benson) for pointing out this loophole. On a previous Clause I showed that the Chancellor had gone to a great deal of trouble and expense over a very doubtful net collection of tax. If my hon. Friend has made out his case, I should have thought the Financial Secretary could have met it by giving powers to an inspector of taxes such as are possessed in the case of Excess Profits Tax, where the inspector has power, if he thinks a step has been taken to avoid tax, to disallow it.

Question, "That the Clause stand part of the Bill," put, and agreed to.

Clauses 29 to 33 ordered to stand part of the Bill.

CLAUSE 34.—(Power to require production of accounts and books.)

I beg to move, in page 17, line 31, to leave out from "inspection" to "by" in line 32.

Clauses 32 and 33 dealt with cases of fraud and make very necessary Amendments to the law, and I have no doubt that in that type of case it is necessary that the Commissioners of Inland Revenue should have power to require the production of accounts, books and documents. But Clause 34 by itself is not confined to cases of fraud or suspected fraud. The two categories of cases to which it applies are those in which a taxpayer delivers no statement of his income and those in which the Commissioners of Inland Revenue are not satisfied with a statement which he has delivered. In such cases the Clause empowers the Commissioners to deliver a notice in writing to the taxpayer requiring him to produce for the inspection of the surveyor or any officer authorised by the Commissioners all books, accounts and documents in his possession or within his power which contain information as to transactions of the trade, profession or vocation of the taxpayer. It is the very widest possible power of calling on the taxpayer to disclose both books relating to his business and all other books, however private they may be, which contain any sort of information.

There is a very long history behind this Clause. Up to now the House has never given the Commissioners the right to require discovery of taxpayers' books. That has been regarded as an invasion of the privacy of the citizen which previous Parliaments—if it ever has been discussed here—have never thought fit to grant. Therefore, it is a new and very wide power for which the Commissioners are, asking. Their remedy has always been that they could assess a taxpayer at any figure they liked. If he did not deliver a statement of income, or if they had any reason to be dissatisfied with the statement delivered, they could put his income at any figure they liked, and their practice has been to double it and steep it up each year until the time comes when the taxpayer simply has to cry for mercy, and the terms of granting mercy are that he must then produce his books and show what is his correct income. That has been the system in the past. The alteration is one which, I think I am right in saying, was recommended by the Commission on Income Tax some years ago, and therefore some change obviously ought to be made, and the only questions which I and the hon. Members who are supporting this Amendment would raise are, first, who should have the right to examine the taxpayer's books; and secondly, ought there not to be some limit put upon the books, accounts and documents which the Commissioners can call to be produced?

In connection with this Clause, I should like to refer, only for the purpose of this Clause, to the Tenth Schedule, under which the machinery of assessment and collection is being slightly altered to the extent that the surveyor now will deal with one Additional Commissioner only. If the Additional Commissioner is satisfied with what the surveyor has put in front of him, he, one man only, can approve the assessment, which then becomes the liability of the taxpayer in respect of the Crown. That is instead of it going to the General Commissioners or any other body of people. The machinery, by this very Bill, is proposed to be very much simplified, no doubt wisely, and brought into the hands of fewer people.

In the ordinary way, it would be possible for surveyors and Additional Commissioners to make this an extremely burdensome provision on the most honest and upright of taxpayers. It could easily be used to become a matter of course, so that, in support of every statement we made every year, we should have to produce books, accounts and documents to justify our figures. This could easily be done in cases where professional and business books are kept. They are there, and it would be simple; but a large number of individuals who come within the scope of the Clause do not keep business books in any shape or form. Probably the only book which contains any record of expenditure and income is their bank book or possibly some book or diary— now I am rather thinking of farmers—in which they jot down whether they sold beasts at the market, and that sort of thing. The only books called upon might be books of a very personal nature indeed. If the Commissioners had the right to call for such books, we suggest that the books should go only to senior officials to be examined and should not be examined locally by whoever happens to be the local surveyor, inspector or local Commissioner, or whoever the Commissioners like to appoint for that purpose. The Amendment therefore raises the question as to who should be the people with the right to examine such books. By striking out the words, as proposed, you would keep examination in the hands of the Commissioners themselves and not in the hands of junior officials acting on behalf of the Commissioners.

No, "Commissioners" would mean Additional Commissioners. The Additional Commissioner is a Commissioner and not an official. That is the suggestion I would put forward as regards examination. It is put forward frankly having regard to the statement made by my right hon. and gallant Friend the Financial Secretary when the matter was referred to on the Second Reading. He said that this power was not intended by the Commissioners to be used at all, except in very exceptional cases, and that there was to be no general authority given to anybody—this was the effect of it—to require the production of books to check ordinary returns, where there was no reason to think that the taxpayer was other than honest and doing his best, and so forth. Much as one values statements made from the Front Bench in this House, one knows very well that elsewhere they do not carry that weight which they ought to carry, once this House has parted with a Bill. Therefore, I move the Amendment in the hope of somehow putting that statement into legislative effect in this Clause.

Perhaps I might deal with the second Amendment that is on the Paper in my name now, so as to save time. I am suggesting that there should be some limit on the books, accounts and documents. "Documents" includes everything— letters, correspondence, diaries and every blessed piece of writing on which a person jots down notes relating to his private affairs. It would be very burdensome, even if any of us were suspected of being guilty of endeavouring to defraud the Revenue, if we had a note handed to us that we had a produce every book, account and document in our possession containing information as to transactions relating to trade, profession or vocation and, if we failed to produce them, had to suffer a fine of £50 a day for every day we were in default. It would very often mean a search through all sorts of private documents in order to make sure that we had not left out something which had reference to a transaction. I should have thought that all that the Commissioners really wanted were the books, accounts and documents of the business. If the words I suggest were put in, it would confine this provision to ordinary business books, from which I should think the Commissioners would get all they Could possibly expect to get, and sufficient for their purposes.

I want to make one final remark about this Clause before I sit down. I do not believe that the difficulty of the Commissioners in finding out people's incomes arises in cases where traders, professional men or others keep books. The cases where difficulty arises are where no books are kept and everything is done by cash transaction. For this sort of case the Clause would have no effect at all. I suggest to the Committee that the wording of the Clause is very wide and that it would be wise in the interests of everybody to consider whether some limitation, both as to the persons who are to make the inspection and as to the books, accounts and documents to be inspected, should not be introduced into the Clause.

I sincerely hope that the Chancellor will not accept this proposed limitation. The hon. and learned Mem- ber for Ashford (Mr. Spens) suggests that if a taxpayer is compelled to supply books under the Clause, they should be inspected only by the General Commissioners or Assistant Commissioners and not by the inspectors. The General Commissioners are not experts in Income Tax; the people who require these books are the very people whom the hon. and learned Member would exclude from seeing them, namely, the inspectors. This Clause is required, not because farmers jot down their transactions in a notebook, but because there are a large number of very clever and unscrupulous people who dodge taxes, by keeping two sets of books or possibly by failing to enter important transactions, and whose machinations can only be traced by a very careful and expert examination of the whole of the books of account. How can the General Commissioners possibly deal with that? They are not accountants or experts in bookkeeping; they are respectable and worthy gentlemen who have one real function and one only, and that is an appellate function. It is essential that in cases of this kind the whole of the books should be under the investigation of the inspector.

There is one other point. I think that what is in the hon. and learned Gentleman's mind is that the taxpayer's privacy should be guarded. It may not affect a taxpayer in a large city, where there are tens of thousands of taxpayers, whether the General Commissioners see his books or not, because he probably does not know the names of the General Commissioners. As a Manchester taxpayer, I do not know the names of my General Commissioners, and I am quite certain that they do not know my name. But in a rural area, where everybody knows everybody, it is most undesirable that a taxpayer's books should be disclosed, possibly, to his next door neighbour. I will give the hon. and learned Gentleman an instance.

But that is largely the reason why I move the Amendment; because the local inspector of taxes in a small country town knows everybody, and if he has the right to call for the books of everybody in the town, he will know everything about everybody in the town.

But the inspector of taxes is not a competitor of the business men in that town, whereas the Commissioners of Taxes may be. Let me give the hon. and learned Member a case. There is one small area where there are four General Commissioners. They have all chosen to be assessed by the Special Commissioners rather than let their brother Commissioners see their own books or know what their own income is.

But what possible objection can there be on the part of the honest citizen to disclosing his books of account to an important Government official—not a minor official, as was suggested by the hon. and learned Gentleman, because an inspector or surveyor is not a minor official—sworn to secrecy and trained in the examination of books?

With regard to the limitation of documents, any limitation of documents, particularly in fraud cases, which I think the Chancellor has in his mind, will be extremely difficult. The possible danger that a farmer may have to produce his diary does not seem to be a very serious danger to contemplate. The remedy is in the farmer's hands: let him enter his transactions in a cash book, and not in his private diary.

A much better instance is that of a taxpayer having to produce his personal pass-book.

I see no objection whatever, and if I remember rightly it was recommended by the Royal Commission on Income Tax that pass-books should be available. In Australia pass-books are available to inspectors of taxes.

The pass-book of a business, but not the personal account.

I must say that I am not so scared of my personal account being seen by an inspector of taxes. I see no reason why this veil of secrecy should be thrown over it. One must assume that the inspector of taxes is a reasonable being. The hon. and learned Member said that in a roundabout way, by doubling-up the assessment, it is possible to compel the taxpayer to do anything which the inspector wishes. This is merely giving a direct method of getting at the books for the year, whereas the doubling-up method may not be effective. We know perfectly well that the inspector has quite enough work to do without sticking his nose into irrelevant material. I do not think any charge can be brought against the Inland Revenue as a whole that they are unconscionable or that they put the community to undue trouble, but when we are safeguarding the revenue against people who deliberately dodge it by the falsification of books or the suppression of evidence, I think the inspectors ought to have adequate power to get at the facts.

I want to say only one word. In consideration of the production of books, documents, papers, etc., I would ask the Chancellor of the Exchequer to bear in mind the position of the small farmer who is most honest, who does not want in any way to avoid paying his taxes, but who works hard all day, comes home tired at night and cannot keep books. In my own personal experience, some of them come to me and ask me to fill in these new agricultural forms for them, and I know they cannot keep books. I want the Chancellor to visualise a man of that description, quite innocent of trying to rob the Treasury, being hauled up before a court of law with all these heavy penalties hanging over his head, and saying that he has no books or only a rough diary. Will a justice of the peace impose heavy penalties on such a man simply because he is incapable, or has not had the training and education to keep proper books? I would ask the Chancellor to take into consideration the position of men of that sort.

I am glad to have an opportunity of making a statement on the Clause and on the points raised in the Amendments, and I want to make one or two general observations about the Clause before I go on to the special point. These observations are by way of introduction to the points raised in the Amendment. It might well strike one as remarkable that this business of collecting taxes and assessing individuals in respect of their trade profits has been carried on during all these years without the power to call for books. After all, the books are the best evidence, and my hon. and learned Friend is quite right in saying that the Royal Commission in 1920 re- commended that this power should be taken. One reason why we have got on without it is because, in the vast majority of cases of honest people, they do disclose their books when any question arises. Normally, of course, a return is made, and it is accepted, but if a question arises, the ordinary trader says, "Here are my books; have a look at them." Indeed, the relationship between the taxpayer under Schedule D, and I dare say other Schedules, and the surveyors and authorities is a perfectly friendly one. The last thing the Inland Revenue wants is that that should be disturbed by this Clause or by some misunderstanding of the use that will be made of it.

Another reason why we have got on without is, as my hon. and learned Friend said, because there is the power of making an estimated assessment. If a man will not produce his books and there is reason to think his figure is not correct, an estimated assessment can be made; theoretically, he may be assessed for £1,000,000 and then told to prove that that is not his income. It is not a very satisfactory method, because we have had cases in which the estimated assessment, though no doubt the people who made it thought they had put it high enough, was in fact less than the man's income; he paid it because it was less than his actual profit. I think that my hon. and learned Friend does not really dispute that it is desirable there should be a power of this kind. We have no intention, and do not desire, that it should be part of the general means of working the business of assessment that the taxpayer should be asked to produce his books.

It is. Perhaps the hon. Member will be patient. It is for this reason that this power has not been given to local inspectors and surveyors. There may have been some confusion as under Sub-section (1) the permission of the Commissioners of Inland Revenue, the six gentlemen who are at the head of the whole Revenue Department has to be sought and obtained for an order to be made under that paragraph. It is not a question of any General Commissioner having the power. The permission of the Commissioners of Inland Revenue has to be got. That was put in specially because conscientious local inspectors, seeing this we did not desire conscientious or overpower, to go using it indiscriminately. Therefore, the General Commissioners of Inland Revenue retain complete control as to how this power is used.

Does that mean it is the Commissioners who are to find themselves not satisfied with the statement, not the local people?

Yes. The words are quite clear:

"… or where the Commissioners of Inland Revenue are not satisfied with the statement delivered by any such person …"

Where the local inspector is not satisfied obviously they will not be aware of the local position until the local inspector has reported to them. I take it the inspector will report that he requires these powers, and that on good grounds shown to them the Commissioners will then give him permission.

I am not sure whether the hon. Gentleman wants me to tell him what the position is or whether he wants to tell me. The General Commissioners do not know anything about the case of A.B. in the country until they get a report from the local inspector or surveyor, and he will not send an application it he is completely satisfied with the information he has obtained. So the first step in the proceedings is that he has to send up an application with details to the Commissioners and say, "I ask for your consent for an order of this kind to be issued." Under the Statute the matter has to be considered by the Commissioners and those who assist them, and this will ensure, or it is intended to ensure, and I am sure it will ensure, because the Commissioners are alive to the importance of the point, that this power is used only in proper cases, and I hope that my hon. Friends will feel that it does ensure, so far as Sub-section (1) is concerned, that there will be no abuse.

It sometimes happens, when a local inspector is not satisfied with accounts, that he places the case before the local Commissioner. Would he be the man to decide whether the matter should be placed before the local Commissioner or the Commissioners sitting in London?

I am dealing with Sub-section (1) of this Clause, which gives power to order in effect the production of books. I am pointing out that that power can only be given by the Commissioners of Inland Revenue in London, five or six gentlemen who constitute the Board of Inland Revenue sitting at Somerset House. Local Commissioners do not come into it at all so far as Subsection (1) is concerned. My hon. and learned Friend's Amendment would have meant that the only people who could see the books would be the General Commissioners in London, which he could not have intended. I agree with what the hon. Member for Chesterfield (Mr. Benson) said, that we feel that the Inspector or Surveyor must himself see the books. He is the man whose business it is. We hope we have safeguarded against the too extensive use of the power, but having done that, the Surveyor must see the books. Under Sub-section (2) the power is given to the Appeal Commissioners to call for books, and there is no Amendment down for that. I think my hon. Friends probably accept that. May I just say a word on the second point about cases in which separate business or trade accounts are not kept? We do not and cannot restrict the power sought to cases of suspected fraud. That is the main class of case we have in mind, but we do not want so to restrict it, because there might be other cases where someone sends in a statement which is obviously doubtful. It would put the Commissioners and everyone in a very invidious position if they had formally to say that they suspected fraud. It would be very unfair to the man.

It is in the main for cases in which fraud is suspected that we need the power sought under Sub-sections (1) and (2). I appreciate what my hon. and learned Friend said, that, of course, one does not want unnecessarily to ask a man to produce before a surveyor—although sworn to secrecy—or anyone else, details of private matters which have no concern with Income Tax. No doubt there are such cases. I cannot but think, so far as farmers are concerned, that as they get used to the Schedule D system they will more and more keep separate banking and farming accounts which will have a separate pass-book and so on. No doubt it is very desirable, particularly if people have, as they may have, entries in their ordinary pass-book they would not wish the surveyor to see, that they should keep a separate trade banking account and a separate trade or business pass-book. There is great difficulty in cutting down in words this power. Indeed, my hon. and learned Friend shied at his own Amendment. He realised that if you could only call for books which related solely to transactions of trade that would produce an absurd result, dealing as we are with a limited class of fraudulent or potentially fraudulent people. You would only have to put something else in the book, and so it could not be called for. I therefore see great difficulty in restricting the power. To take an example, in the case of an individual or a one-man company one of the common fraudulent devices is to sell goods and get the purchaser to give you two cheques. One goes into the business pass-book and one goes into a private account. When you are dealing with that sort of case, to put in words which limit you to calling only for the business passbooks would hamstring your power.

The right hon. and learned Gentleman must surely be aware that the amount of evasion practised by cash transaction is very much greater than that by the double-cheque system. Why has he left apparently untouched that vast field of evasion and concentrated on the narrower field of evasion in this Clause?

Because if there is a cash transaction and a record of it, it is covered by this. If there is a cash transaction and no record of it, obviously the Clause dealing with the power to get documents will not help. There is, of course, the existing power in Section 139 to issue what is called a precept, calling for information; and if false information is given in reply, that is an offence. If you suspect that a man is incorrect in respect of cash transactions, there is also the estimated assessment.

I am not complaining that you are seeking powers to deal with this class of evasion, but I am complaining that you are seeking powers to deal with this class and not taking adequate powers to deal with other classes of evasion.

Other classes of evasion do not arise on this Amendment.

I think we have such powers; but, of course, we cannot discuss them now. We want to make it as clear as words can that it is not intended that this should be the normal procedure. Without restricting it to fraud cases, it is intended in the main for cases where some sort of fraud is suspected, or where information which would be forthcoming in the ordinary course from an honest man who wants to find out what his liabilities are is not forthcoming. It would be impracticable not to allow the books when produced to be seen by an inspector, and it would be impracticable to devise any form of words which would rule out in any way a book which might contain some private items as well as the trade transactions. For those reasons, we cannot recommend the Committee to accept the Amendment. We do not in the least complain about the points which have been raised, or about the spirit in which they have been put forward.

I apologise, both to my right hon. and learned Friend and to the Committee, for not appreciating that the Commissioners of Inland Revenue meant the Board of Inland Revenue. I was under the impression that it referred to local Commissioners, and that the term included generally Commissioners anywhere. It is a very different thing if the power is to be exercised solely by responsible members of the Board, and not by a number of subordinate Commissioners all over the country. In those circumstances, and in view of the tone of my right hon. and learned Friend's answer, I do not think it would be proper to press the Amendment.

Amendment, by leave, withdrawn.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

I fully appreciate the reason for the Clause, and it has my fullest support; but there is a possibility that giving these new powers to the inspector of taxes and others may develop in a way of which Parliament is perhaps not aware at the moment. It is something quite new, and at present, I believe, quite justified. But there is an Amendment down in the names of two of my colleagues and myself, which was not put down by me, though I agreed that my name should be put to it. There has been some mistake. It is an Amendment to Clause 32. I would like the Chancellor, between now and the Report stage, to add these words:

"This Section shall cease to have effect two years after the end of the present war."

Two years after the war we shall have had some experience of how these new powers in the hands of officials work. If they are unfair to the honest business man —and most business men are in that category—and if business men are treated in a way which is not justified, this House will have the right to withdraw or continue the powers as it decides. I ask the Chancellor to consider limiting the duration of these powers by adding those words, on the next stage.

If we accepted this suggestion, we should be showing a lack of faith in the wisdom, workableness and fairness of this new provision, which we do not feel. It was, substantially, though in somewhat different form, recommended by the Royal Commission on Income Tax in 1920. It seems, on the face of it, to be sensible, and the only surprising thing is that it has not been proposed before. If my hon. Friend or any other hon. Member is dissatisfied with the working of it, he could always raise the matter by putting down a new Clause to restrict or abolish the power.

Question, "That the Clause stand part of the Bill," put, and agreed to.

Clauses 35 to 40 ordered to stand part of the Bill.

CLAUSE 41.—(Assessment and collection of Income Tax and Land Tax.)

Motion made, and Question proposed, "That the Clause stand part of the Bill."

This Clause, which is the operative Clause for the Tenth Schedule, wherein one finds the proposed amendments to Income Tax procedure, is extremely disappointing. The Chancellor referred in his Second Reading speech to the improvement in Income Tax machinery, and to the fact that he had been in consultation with the clerks to the commissioners, who, he said, had been extremely helpful. I want within the limits of Parliamentary politeness to sug- gest to the Chancellor that that statement was entire moonshine, and that he knew that it was moonshine when he made it. I suggest that the clerks to the commissioners have not been helpful; but that they have been, as always when it touched their privileges, unhelpful and obstructive; that the constructive machinery has not been touched as a result of the negotiations; that there is nothing in the Tenth Schedule which in any way limits the present power of the clerks to the commissioners; and that what they have agreed to are trivial matters affecting other persons than themselves.

This is a matter which can be discussed on the Schedule, but not on this Clause.

With great respect, surely this is the operative Clause? Although one might come under your whip if one made the same speech on the Clause and on the Schedule, surely it is possible to discuss this on the Clause and not on the Schedule? We are discussing whether this Clause should stand part; and I am giving reasons why I feel disposed to vote against the Clause. One cannot leave this Clause in the Bill and then eliminate the Schedule, and surely this discussion must take place upon it.

No, I have to put the Question, "That this be the Tenth Schedule to the Bill," and that is the time when the hon. Gentleman can reject the whole Schedule, or he may have amended it in the meantime.

Supposing we eliminate the Tenth Schedule and we then have Clause 41 of the Bill standing, surely there can be a general discussion? I am not raising a detailed discussion of the Schedule but a general discussion on the whole question arising out of the simplification of the procedure of the assessment of Income Tax.

So long as we do not anticipate the discussion that ought to take place on the Schedule and not now.

What I have to say now has very little relationship either to the Schedule or to the material of the Schedule. What I wish to say has relationship to the simplification and procedure of the assessment and collection.

And the procedure of assessment? It is that with which I want to deal. The main trouble, particularly with the assessment of tax, lies in the archaic powers of clerks to the Commissioners, and not one of these powers has been touch or eliminated. In order to give a clear idea of the almost Gilbertian machinery with which we collect Income Tax, one must put the whole thing in a historical perspective. I make no apology for reminding the Committee that when the Income Tax was first introduced by Pitt it was regarded as an appalling invasion of the liberties of the subject. Pitt managed to obtain his Income Tax law only by renouncing for the central Government either the power of assessment of Income Tax on the individual or the power of collection, and renouncing also any control over Income Tax machinery. When Income Tax was first introduced the assessment and the collection and everything else were in the hands of private citizens. These citizens, known as General or Local Commissioners, were appointed by the local justices of the peace, and the General Commissioners for the area appointed the assessors of Income Tax and the collectors. The assessors were gentlemen who, by virtue of their local knowledge, were supposed to guess at the incomes of their next-door neighbours. The whole of this machinery was in the hands of the General or Local Commissioners. They appointed everybody, and the clerks to the Commissioners, the assessors and collectors were their servants. With the growth of Income Tax from these very humble beginnings the central Government had to build up a parallel machine to the local machine established by William Pitt. We have had to build up the whole Inland Revenue machine as we know it, with its highly skilled inspectors, possessing a technical knowledge of the law which the General Commissioners, the clerks to the Commissioners and the assessors cannot claim.

To-day the assessor, who was an important man 150 years ago, has a purely nominal, negligible function to perform, and the whole of the assessment is really in the hands of the inspectors. They do the real work, but the curious thing is that the old machinery remains almost intact. We still have this gentleman known as the assessor as an integral part of the machinery. We still have the clerks to the Commissioners doing an enormous amount of purely clerical, copying work. All their former duties remain intact, and in order that the clerks to the Commissioners may do their formal clerical copying work, certain things are laid down. One thing, for instance, that is laid down under the 1918 Income Tax law is that they shall number the pages of the books of the assessment board. To do this work the books of assessment, which are the tools of the inspector of Inland Revenue, have to be taken to the inspector's office six or seven times a year during the very busiest period of the whole of the assessment. They have to be taken to the clerks to the Commissioners' office, fetched back and then taken to the clerks to the Commissioners' office and fetched back again to the inspector's office. They go backwards and forwards six or seven times, and in the busiest period of the whole of the Income Tax year they are out of the inspector's office for something like six or seven weeks in order that the clerks to the Commissioners may number the pages of the books, add up the details and get them signed by the assessor, who has never seen the books or the assessments. All this work, which is done by the clerks to the Commissioners, is of the most trivial, clerical character, and they get in temporary labour of a not very good quality to do it for them.

Despite the fact that this practice was condemned by the Income Tax Commissioners in 1919 and that the inspectors of taxes and the local staffs of the Board of Inland Revenue have been urging upon the Government to keep all the simple clerical work in one office, the clerks to the Commissioners, praised by the right hon. Gentleman and described as helpful, still retain this machinery, which, in the words of the Royal Commission, was condemned as archaic and as being out of relation to modern realities, and they point blank refuse to give it up. What is the result? There is disorganisation of the work of the Inland Revenue, and the Chancellor knows of it perfectly well. You get a considerable increase in costs, delays in the settlement of assessment, which affects the taxpayer, and continued trouble and nuisance. The amount of trouble, nuisance and delay caused by the doing of this clerical work in the office of the clerks to the Commissioners is three or four times the amount of anything that is saved by the Tenth Schedule.

I must interrupt the hon. Member. He is referring to what is in the Tenth Schedule, and this discussion should take place on the Tenth Schedule and not now. Supposing it were amended, we could discuss the whole thing, but at the moment it is not, and I must rule, therefore, that the discussion should take place on the Tenth Schedule and not now.

I bow to your Ruling, Colonel Clifton Brown, but it is a bit difficult to make one's speech in two halves. I hope that the Chancellor of the Exchequer will not forget the matter.

No, Sir.

Question, "That the Clause stand part of the Bill," put, and agreed to.

Clauses 42 to 48 ordered to stand part of the Bill.

NEW CLAUSE.—(Provision as to orders for relief from Purchase Tax of utility goods.)

(1) In an order made under Section twenty of the Finance (No. 2) Act, 1940, directing that purchase tax shall cease to be chargeable, or that a lower rate shall be substituted for a greater rate, the definition of the class of goods in respect of which the order is to have effect may be limited by reference to use of the utility mark, notwithstanding that the effect of the order as respects any particular goods may be thereby rendered dependent on the operation for the time being of any provision made by or under the Limitation of Supplies (Cloth and Apparel) Order, 1941, or by or under any other order which may be made by the Board of Trade for regulating the use of the said mark in relation to goods of any kind.

(2) In this Section the expression "the utility mark" means the mark shown in the Sixth Schedule to the Limitation of Supplies (Cloth and Apparel) Order, 1941.

(3) This Section shall be deemed to have come into operation on the fifteenth day of April, nineteen hundred and forty-two.—[ Sir K. Wood .]

Brought up, and read the First time.

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

This Clause makes provision as to orders for relief from Purchase Tax on utility goods. It is required in order to implement the promise of exemption from Purchase Tax on utility goods, as stated by me on the Second Reading of the Finance Bill. It is true that Treasury orders can be made in relation to utility goods which are subject to the Purchase Tax, but the Board of Trade, by an amendment of the Limitation of Supplies Order, may at any time bring such goods within the scope of the Purchase Tax or remove them from the scope of the tax. In other words, an Order which the Treasury can make delegates to the Board of Trade the power vested by the Finance (No. 2) Act of 1940 in the Treasury to render goods chargeable to or exempt from this tax. The Treasury's powers are subject to affirmation by the House of Commons. The effect of the Limitation of Supplies Order by the Board of Trade may be to exempt an article from tax or to withdraw exemption from it without the affirmation of the House of Commons, and therefore, in order that the matter should receive the approval of the House, I am bringing this Clause forward to-day. It is submitted for insertion in the Bill, and it will ensure the validity of exemptions resulting from the changes in the definition of utility goods by the Board of Trade.

I do not quite understand why this Clause was not in the original Bill and why the Chancellor put it down now. Is it because he has discovered between the introduction of the Bill and to-day that a Clause to this effect should have been in the Bill, or is it because alterations in the proposals which he has made since have necessitated bringing in this Clause?

I think the proper way to put it is this. It might have been argued that I need not put the Clause in at all, but I wanted the matter to come before the House of Commons, because the right hon. Gentleman is always saying that the House of Commons ought to keep a measure of control over such matters. On reflection, I thought it better to put down a Clause for to-day.

Question put, and agreed to.

Clause read a Second time, and added to the Bill.

NEW CLAUSE.—(Extension of Section 13 (1) of Finance (No. 2) Act, 1940, to getting of timber.)

Subsection (1) of section thirteen of the Finance (No. 2) Act, 1940, which makes special provisions as regards trades consisting in the getting of minerals or oil from mines, oil wells or similar natural sources of a wasting nature, is hereby extended so as to include the getting of timber grown in the United Kingdom.— [ Mr. Liddall .]

Brought up, and read the First time.

I beg to move, "That the Clause be read a Second time." Recently the Chancellor very kindly received a deputation, consisting of the hon. Member for the Forest of Dean (Mr. Price), the hon. and gallant Member for Central Portsmouth (Major Ralph Beaumont), the hon. Member for Brigg (Mr. Quibell) and myself, and then appeared to appreciate the importance of the home-grown timber industry. He gave no hope of any relief from E.P.T. so far as the timber merchant is concerned, but he said he would give careful consideration to any proposal for postwar reconstruction such as would enable replanting to take place. Many of my hon. Friends find it extremely difficult to understand the attitude of the Chancellor in admitting the justice of landowners' claims in this matter, but refusing relief to the trade. It is thought that the Chancellor himself cannot realise how serious this is to the home-grown timber trade. The country must have manufactured timber, both for the immediate prosecution of the war and for many other necessities. Owing to shipping difficulties, the raw material for this purpose must to a very large extent be drawn from the timber grown in this country. The home-grown timber industry is the chief body concerned in this matter.

Owing to the neglect of past Governments, there has been at all times a very inadequate supply of growing timber, and by reason of the present urgent increased demand for manufactured articles it begins to become plain that after the war there will not be a sufficient supply to keep the industry employed. The more industry responds to calls made upon it now, the less will be its chance of doing any business at all when peace returns. In fact, I know of no other industry for which the position will be so serious. If the war lasts much longer, there will be practically no business to reconstruct, and for that reason I, with the support of my hon. Friends, move this new Clause, which asks that home-grown timber be placed in the same category as mines, oil wells or similar natural resources of a wasting nature.

I understand from what the hon. Member for Lincoln (Mr. Liddall) was saying that he was really dealing with this matter from the point of view of the timber merchants and their trade.

Yes, but the trade of the timber merchant, like the trade of any other merchant or manufacturer, is the business of transforming some war product into a finished article. The question of wasting assets, such as oil from mines which, indeed, is quoted in this new Clause, is entirely a different question. The problem is not the same.

But the Government urged the increased production of more manufactured timber, which cannot be manufactured except from the raw material, which is home-grown timber.

That applies to many other articles. If the hon. Gentleman will allow me to put my case, I think he will see what I am trying to say, which is that trade or manufacture is the business of transforming raw material into something else. The question which was dealt with by this House with regard to wasting assets is an entirely different question, because there it is a question of consuming at an increased rate some substance, say oil, for the sake of the argument, which cannot, whatever you do, be replaced. You cannot put more oil into the ground in order to get it up again in 20 or 30 years' time. Once it is taken out, that is the end of the oil, and so it is with the minerals to which reference has been made. In that case diminution is absolute; in the case of timber it is not, because timber can be replanted and felled after the generation which is required for the trees to grow. It is not at all on the same lines as some raw material which can never be replaced. The question of the wasting asset of timber is not a question of the trade which has the business of transferring raw timber into planks, etc. It is a question of the woodland owner— the owner of the land, whose trees are cut down, and who then plants new trees, which will be cut down in his son's time or his grandson's time. That is an entirely different question. In so far as there is any problem with regard to woodland owners, it is a matter which can be discussed directly between them and the Inland Revenue authorities with regard to their liability under the Excess Profits Tax.

As I understood my hon. Friend's explanation of his new Clause, he has not got that part of the problem in mind, but is concerned with the fact that during the war it is necessary to cut down a great deal more of the standing timber than would be cut down in normal times, so that pro tanto there will be less standing timber when the war is over to be cut by those who deal in timber, and to that extent, consequently, there will be a diminished opportunity for trade for the timber merchants. Of course, there will be less timber to the extent to which the cutting has been accelerated during the war, but that is not a matter with which we can deal at present, or indeed, I should think, at any time, because it is something which is general to vast sections of trade in this country. Unfortunately, a great many industries, as a result of the war, will not find themselves so well placed after the war, and certainly for many years after the war will not be able to resume to their full capacity the work which they did before the war. Of that there is no question.

I am afraid my right hon. Friend could not possibly ask the Committee to put timber merchants in some preferential position, with regard to their post-war trade, as compared with any other industry in the country. I am afraid that all these industries will have to stand on the same basis; but of course, in so far as there is any Excess Profits Tax payable now by the timber merchants, or by anybody else, the 20 per cent. rebate which will become available after the war will come the way of the timber merchants just as it will come the way of other merchants, traders, manufacturers, or businesses. As my hon. Friend has pointed out that he was dealing merely with the trade aspect of the merchants and the manufacturers, and not with the proposition of wasting' assets, which is not relevant in this particular case, I am afraid I must ask the Committee not to accept the new Clause.

Naturally, I am very disappointed at my right hon. and gallant Friend's lack of sympathy for the new Clause. On the question of home-grown timber, he seems to hide too much behind the merchant as such.

I hope that when my hon. Friend says "merchant as such" he is not trying to imply that I have any hostility towards any merchants. What I have said is that the case he has put deals with the general manufacturing industry, and is not concerned with the actual growing of the timber, which is a matter for the woodland owner.

My disappointment is due to the fact that my right hon. and gallant Friend did not concentrate more on the home-grown timber, which the Government are urging us to cut down and use for the manufacture of materials required in the war effort, and realise that there will be a shortage. However, I do not wish to press the new Clause to a Division, and, therefore, I beg to ask leave to withdraw the Clause.

Motion and Clause, by leave, withdrawn.

NEW CLAUSE—(Relief in respect of earned income.)

Where the owner of an estate himself manages the same any income which is charged under Schedule A and is immediately-derived by the owner from the estate shall to the extent of one-twentieth part of such income be deemed to be earned income of the owner for the purposes of subsection (1) of Section fifteen (Allowances in respect of earned income, etc.) of the Finance Act, 1925, as amended by subsequent enactments.— [ Brigadier-General Clifton Brown .]

Brought up, and read the First time.

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

It is an extraordinary thing that at the present time the owner of an estate, who normally would employ an agent to manage the estate but who now may have to run it himself, cannot draw for himself the earned income allowance to which an agent would be entitled, and to which, if he were himself the director of an estate company, he would be entitled. The purpose of the new Clause is to end that anomaly.

The Committee know the continued interest which my hon. and gallant Friend has in these matters, and I think he has put forward his case as completely as it could be put forward, but I cannot advise the Committee to accept the new Clause. What is the proposal and the intention of the Clause? It is to enable the owner of an estate who manages the property himself to claim the earned income relief of one-tenth on an amount equal to one-twentieth of the income of the estate as assessed to Income Tax under Schedule "A." I think the underlying idea behind my hon. and gallant Friend's proposal would appear to be that the owner should be treated as if he were earning a salary or fee of 5 per cent. of the income of the estate for managing it, so that he could, in fact, by that means get earned income relief on that part of the estate income.

I should have great difficulty in accepting the principle which would follow if this new Clause were accepted. I always have to consider what the possible reactions of these proposals would be. There is, in fact, a broad distinction between income which is derived from salary, and professional and trading activities, in respect of which earned income relief may be claimed under the existing law, and income which is derived from the investment of capital. The income which the owner of an estate derives from his estate is clearly income which falls into the latter category. I am afraid it would be in complete conflict with the general principle of the earned Income Tax allowance to allow an owner of investment income to earmark part of his income from his property as earned income upon the ground that he devotes time and energy to the management of his property. I suppose that the management of a considerable fortune inevitably involves a certain amount of expenditure of time and thought and money, whether the management is carried on by the owner or by persons employed for the purpose. While there may be different degrees of management, directly I acceded to this request, I suppose other people would come along and say, "I would, like to have a similar arrangement as far as the investment of my property is concerned," property which, of course, might not be land. In other words, there would be demands from the owners of personal property as well as the owners of real property, and one would not see an end to a concession of this kind. I appreciate what my hon. and gallant Friend has in mind, but I am afraid I cannot recommend the Committee to accept this New Clause which would lead me into great difficulties.

The Chancellor of the Exchequer has decided that an owner managing his own property and receiving an income, or fee, is not allowed to treat it as earned income. Suppose the owner formed his estate into a company and became the managing director, and the company decided to pay him an income similar to what he thought he should receive as owner of the farm if his income were assessed as earned income. Is there any difference between the owner who receives a fee for which he gets an earned income allowance because it has been received from the company, and the man who has not formed his estate into a company and who does not receive this allowance?

I am afraid that is on a different basis altogether. I know that my hon. Friend would not expect, because one particular method is adopted, that I should alter the position of the other methods. If this method was being adopted in such a way as to defeat the Revenue, I should have to take steps in the other direction.

The Chancellor of the Exchequer says "defeating the Revenue." Does he mean to say that a man who forms his estate into a company is defeating the Revenue?

All I can say is that I cannot accept a principle of this kind because it would lead me into great difficulties.

In view of the fact that when I moved the New Clause I did not foresee all of its implications—although I do see the point raised by my hon. Friend the Member for Southampton (Mr. Craven-Ellis)—I beg leave to withdraw the Clause.

Motion and Clause, by leave, withdrawn.

NEW CLAUSE.—(Amendment of Rule 8 of No. V in Schedule A.)

(1) For the purposes of Rule 8 of No. V of Schedule A as amended by section twenty-five (Amendment of Rule 8 of No. V in Schedule A) of the Finance Act, 1924, the expression "additions or improvements to farmhouses, buildings or cottages in paragraph 2 of the said rule shall be deemed to include any works executed upon land in order to comply with the directions of a War Agricultural Executive Committee (including the felling and grubbing up of trees or hedges); and the said rule shall have effect as if at the end of the said paragraph there were added the words "or with any directions of a War Agricultural Executive Committee."

(2) In this section "War Agricultural Executive Committee" has the meaning assigned to that expression by the Agriculture (Miscellaneous War Provisions) Act, 1940.— [ Brigadier-General Clifton Brown .]

Brought up, and read the First time.

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

I hope that I shall have better luck in moving this New Clause. It deals with a very small matter as far as the Treasury is concerned, although it is a matter of great importance to farm owners. It is necessary that farm buildings, fences and things of that kind which are necessary in connection with food production should be kept in order. At present, maintenance claims include replacement of farmhouses, buildings, cottages, and fences. There are, however, many things which are not covered, including items ordered by the war agricultural executive committees to meet the needs of food production. Property is not improved by the holding of military manoeuvres, and there are also various Government Orders which affect estates. It seems to me that we are justified in asking that maintenance claims should embrace all those things for the period of the war, and especially those things which are ordered by the war agricultural executive committees.

I hope that the Chancellor of the Exchequer will give consideration to this New Clause. Many owners of farm property, after they have paid Income Tax, tithes and War Damage Insurance, have little left to go round for improvements, and especially for those improvements ordered by the war agricultural executive committees. I think, therefore, that some recognition might be given on the lines suggested by my hon. and gallant Friend.

I can assure my hon. Friend the Member for the Forest of Dean (Mr. Price) that as soon as a New Clause is put down on the Order Paper it naturally receives the immediate consideration of my right hon. Friend. We have looked very carefully into this New Clause, but I am afraid my hon. and gallant Friend the Member for Newbury (Brigadier-General Clifton Brown) is again unfortunate. He is making a suggestion to the Committee which, I am sorry to say, I shall have to ask them to repel. Rule 8 to which he refers is the Rule under which an owner of property who incurs expenditure on maintenance, repairs, insurance and management of his property which on a five years' average exceeds the amount of the flat rate allowance for repairs can claim relief from Income Tax Schedule A in respect of the excess. That is what the Rule does, and it is upon this Rule that my hon. and gallant Friend seeks to hang his New Clause. There was one relief granted under that Rule in 1924, when it was decided to admit capital expenditure incurred on additions or improvements to farmhouses and so on in so far as they were carried out in order to comply with the provisions of a statute or a regulation or by-law of a local authority. That is the only breach which has been made in the Rule, and it is fundamental in the Rule—and this is fundamental to the whole system of Income Tax—that capital expenditure is not admissible as deductions for Income Tax purposes.

My hon. and gallant Friend goes on to argue that all sorts of things are being done at the present time under the ægis of the war agricultural executive committees and that therefore all these ought to be brought within the scope of this Rule. I am afraid that just because one little breach has been made in a Rule it does not necessarily follow that you must go on enlarging it, because in the end there will be no Rule. The general argument might also be put forward that a lot of things which are being done under the compulsory directions of the war agricultural executive committees rank for grants. For example, there is a 50 per cent. grant for lime, a 50 per cent. grant for improvements to farm ditches, a 50 per cent. grant for field drainage and mole drainage, a 50 per cent. grant for water supply and so on. That being the position with regard to the principal activities undertaken, admittedly by compulsory order, it seems to me that it would be very difficult, and would require very complicated and administrative provisions, to provide that the expenditure should also be admissible as a deduction, when so much of it has actually been paid by direct grants from the State.

There is another point. This particular problem is not peculiar to agriculture. Other people in other walks of life and other businesses have had to spend money as the result of compulsory orders of one kind and another for all purposes and it is not suggested that that expenditure should rank as revenue expenditure for Income Tax purposes. I only mention two which have been brought to my notice. One is considerable expenditure for structural alterations in connection with air-raid precautions and the second, which I take from the shipping world, is considerable expenditure which has been incurred, for example, in stiffening ships in order to put on the necessary antiaircraft guns and the like. They are very akin to the expenditure my hon. and gallant Friend has in mind. [ Interruption .] This is not the last stage of the Bill and if my hon. and gallant Friend finds that I am incorrect in anything, that I have said, I shall be glad to withdraw it, but I do not think I am. The fact remains that a great deal of work done on the land as a result of compulsory orders is grant-aided and to that extent, quite apart from the question of principle that you must not confuse capital expenditure and make that into a relief from annual tax, it would be very difficult to disentangle completely how much would be due in any particular case which had been grant-aided. That is why I must ask the Committee not to accept the new Clause.

There may be some capital expenditure which is imperative on the owner simply for war purposes, and that capital expenditure may be no good after the war. The owner might have to put up additional buildings to store grain and that sort of thing.

It might be no good after the war in some cases but it might be extraordinarily good after the war in other cases.

Motion, and Clause, by leave, withdrawn.

NEW CLAUSE.—(Relief in respect of inherently unproductive plant.)

Subsection (1) of section thirty-four of the Finance Act, 1940, shall be amended by the omission of the words "and in all chargeable accounting periods."—[ Mr. Brooke .]

Brought up, and read the First time.

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

This Clause seems quite simple on the Order Paper, but it is, in reality, somewhat complex. Perhaps I can best explain it by stating the present position under the law, as I understand it. The Section of the Act of 1940 which I desire to amend deals with what are there described as inherently unproductive assets. Let us imagine two companies, A and B, which in the standard period both had the same capital, we will say £200,000. Company A was fully operating. In the case of company B, how-ever, £50,000 of its capital had been laid out in an extension of plant, which was not during that period in a state of production. The buildings, for instance, may have been unfinished, and the plant not yet ready to start up. At any rate, that £50,000 could contribute nothing to the company's profits in that period. It is, therefore, provided, quite rightly, by Section 34 that the company may apply for its standard capital to be reduced in respect of that part of its capital which was at that time unproductive, and allowances may be granted accordingly. In the case I have given the company would be permitted to claim a deduction of £50,000 from its standard capital.

Now let us see what happens later. In a subsequent year, perhaps in the present year, both companies are carrying out a further extension. They are each extending their works at a cost of £50,000, and in this chargeable period, when they are liable to Excess Profits Tax, in both cases the plant on which they are spending that £50,000 is not yet in production. Company A has no difficulty. Under the law it can claim an increase of capital even though the £50,000 which it is now spending is not yet productive. But in the case of company B the Revenue authorities will point to Section 34 and will say, "In your standard period you claimed a de- duction because then you had £50,000 unproductive capital. For that reason we cannot allow you to treat as an increase of capital in this chargeable period the £50,000 which you are now spending." That is to say, if we look backwards, Section 34 is entirely successful in putting on to some sort of equality in the standard period two different companies, one of which had some part of its capital unproductive at that time, whereas the other had its capital value productive. But, having put the two on an equality at the start, it then creates a situation in which nowadays, if they both expand, they go on to an inequality again, because Section 34 says that the deduction for unproductive assets, if it is made in the standard period, must also be made in all chargeable accounting periods.

Therefore it is happening at the present time that companies otherwise identical, which are expanding in an identical manner, are treated differently for E.P.T., solely because one of them had good and equitable cause to claim an alteration through Section 34 in its standard period. I do not know whether I have succeeded in making this complicated matter any clearer to the Committee than it was at the beginning. I hope, however, that the Chancellor will give his consideration to it. I am fortified in that hope partly because the total sum of money involved cannot be very great, partly because I know that he wishes to do equal justice between one taxpayer and another, and finally because, whereas most Amendments which any of us move to Finance Bills would complicate the law, this new Clause would, strange as it may seem, simplify it.

I think the Committee will agree that my hon. Friend has put his case with great force and clearness. It is now for me to make some observations upon it and to give reasons why I cannot recommend the Committee to accept his proposal. Section 34, Subsection 1, of the Finance Act, 1940, provided for a relief to a taxpayer part of whose capital was, in the standard period, sunk in assets which were inherently unproductive. Such a concern would, but for Section 34, have been under the disadvantage that, if the capital became productive in the chargeable accounting period, the profits made thereon would have swelled the excess profits chargeable to tax, while the standard profits contained, by way of offset, no element of profit on that very capital. The remedy which was suggested and provided for by Section 34 in the simple case was that the assets which were unproductive should be eliminated from the capital in the standard period, so that when they became productive in the chargeable accounting period they would rank as increased capital, and thus the standard profits, in relation to that chargeable accounting period, would be increased by an allowance of 8 per cent. upon that capital.

There are, however, two classes of case in which it would not be reasonable to grant relief. The first is that if the same assets are unproductive both in the standard period and in the chargeable accounting period, there is no hardship, for the chargeable profits do not include any profits from the unproductive capital. The second is that if assets which were unproductive in the standard period become productive in the chargeable accounting period, and at the same time, there are, in the chargeable accounting period, other assets which are unproductive, the unproductive assets in the standard period are balanced, in whole or in part, by the unproductive assets in the chargeable accounting period, and, to the extent to which the items balance each other, there is again no hardship.

The first observation I would make is that Section 34 is not applicable except at the option of the taxpayer, and therefore it goes on to provide that, in computing capital employed in the business, the assets which were unproductive in the standard period, and any other assets of the trade or business shall be treated as not having been assets of the business in any part of the period during which they were inherently unproductive. The Rule is to apply in computing the capital in the standard period "and in all chargeable accounting periods." My hon. Friend wants to have these words left out. I must observe that the Section is not applicable unless it is put into operation at the option of the taxpayer himself. If he thinks it would be to his disadvantage, he may not put it into operation and he may wait to later accounting periods before exercising his choice, but if he does exercise his choice it is only fair and right that it should apply to all chargeable accounting periods.

There is the further point to be made that if a tax-payer who has exercised the option finds at a later stage in the tax, that the application of the Section has become a disadvantage to him over the whole period, the Commissioners of Inland Revenue raise no objection to the withdrawal of the original application, subject of course to the necessary adjustments. Therefore, I suggest that the provisions of the Section are obviously reasonable and can only be put into operation at the instance of the taxpayer. My hon. Friend, as I anticipated he might, gave an illustration of two companies, compared their lots, and argued that one was unfavourably treated compared with the other. I might very well reply that the remedy would not be to accept the new Clause but to deprive company A of what certain people might call the indulgent treatment which in the instance that he gave they had received. The provisions of Section 34 followed a number of negotiations with representatives of industry who pleaded that unproductive capital should be eliminated in computing the capital of the standard period and agreed with the Board of Inland Revenue that, where this was done at the option of the taxpayer for the standard period, the same rule should apply to the chargeable accounting period. Therefore, my hon. Friend's new Clause seeks, unwittingly I have no doubt, to remove a condition that was accepted by industry when the provision was put into the Finance Act of 1940. In those circumstances, I must ask my hon. Friend, notwithstanding the clear way he put the matter, not to press his new Clause.

I am grateful to my right hon. Friend for what he has said, and particularly for the remarks he has made about the attitude of the Commissioners. I find it difficult to accept his argument that Parliament should be debarred from urging the Government to accept a proposal, on the ground that an agreement had been reached outside Parliament between the Government and a section of the taxpayers. I note from his speech that he agrees in his heart that some inequality of treatment takes place under the Section. I do not wish to press the matter further now, and I beg to ask leave to withdraw the Clause.

Motion and Clause, by leave, withdrawn.

NEW CLAUSE.—(Further rights of appeal.)

Notwithstanding the provisions of paragraph ( a ) of subsection (2) of section twenty-one of the Finance (No. 2) Act, 1939, an appeal shall lie to the Board of Referees against any direction, or refusal to make a direction, by the Commissioners of Inland Revenue under any of the following sections, namely: —

( a ) Subsection (1) of section fourteen of the Finance (No. 2) Act, 1939;

( b ) Paragraph 11 of Part 1 of the Seventh Schedule to the Finance (No. 2) Act, 1939;

( c ) Subsection (1) of section thirty-one of the Finance Act, 1940;

( d ) Subsection (5) of section thirty-three of the Finance Act, 1940.

Notice of appeal must be given within thirty days of the Commissioners intimating their decision, or within thirty days of the passing of this Act, where the decision of the Commissioners was given before the passing of the Act.—[ Mr. Spens .]

Brought up, and read the First time.

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

This Clause goes back to the controversy which started when the Act of 1939 was before the House, at a time when there was practically no appeal at all from decisions of the Commissioners. The Board of Referees was introduced as a body to which certain matters were allowed to go on appeal, but a number of matters were still left to be dealt with at the discretion of the Commissioners, and the Act of 1939 provided that where that expression was used, there was no appeal to the Board of Referees or to anybody else. What happens as regards matters which are left to the discretion of the Commissioners no one can know except accountants and other agents who represent the taxpayers when points in dispute arise, and I am putting forward this new Clause because it embodies part of what is asked for by certain eminent members of the accountants' profession. The grounds on which they ask for it are stated in an article in the tax supplement to the "Accountant" of 2nd May. One reason why this further right of appeal to the Board of Referees is wanted is that when a matter which comes within the discretion of the Commissioners is raised, the person representing the taxpayer deals with it with the inspector or other official, and after discussion that official makes a report to the Commissioners of Inland Revenue. They give their decision, but there is no right to submit a taxpayer's case direct to the Commissioners of Inland Revenue. It is claimed that it is desirable that matters in dispute should be argued out before the Board of Referees, with both sides of the question discussed within the knowledge of the taxpayer.

The further points on which it is suggested a right of appeal should be given to the taxpayer are four. The first deals with the apportionment of accounts for the purpose of ascertaining standard profits and chargeable profits. No one who knows anything about accounts will fail to realise that if a wrong apportionment is made as regards the standard period, a very serious wrong may be suffered by the taxpayer for the whole period of the Excess Profits Tax charge. The second point concerns the allocation over the accounting period of profits or losses on contracts extending beyond the accounting period. Very much the same position arises there, because if you bring into one period more than you ought to or into another less than you ought to you again get a situation in which the payment of large sums of money may turn out to the detriment of the taxpayer. The third point concerns the power under Section 1 of the Act of 1940 to increase the minimum standard up to an additional £4,000, a matter which at present is left entirely to the discretion of the Commissioners. The fourth point arises where the Commissioners have a discretion to allow a deduction in respect of directors' remuneration. Those are four very arguable matters, and therefore, it is suggested, they are all proper matters to go before the Board of Referees, where the taxpayer would be enabled to make his case instead of, as at present, their being settled according to decisions which come from the Commissioners of Inland Revenue.

Although I would not say that in every case the decisions of the Commissioners in these and similar cases have given complete satisfaction, because, obviously, some applications which have been made have been refused, on the whole, apart from the article in the "Accountant" which has been referred to, there has been very little evidence of any dissatisfaction with the way in which the Commissioners have administered the discretion conferred upon them. Indeed, in certain cases the complaint has been that more discretion has not been conferred upon the Commissioners, so that hard cases could be dealt with. If one looks at the general nature and background of Excess Profits Tax one sees that it does raise a lot of very complex problems which require adjustment for this circumstance and that, and it would be very difficult to lay down a code which would enable adjustments to be made in exceptional oases otherwise than as a matter of discretion. The first point submitted by my hon. and learned Friend referred to cases where the accounting period cuts across the standard or chargeable period, that is to say where you may have nine months of one year and three months of another year in one accounting period. Normally, one would apply the arithmetical standard and take three-fourths of one and a quarter of the other, but in cases where the Commissioners are asked to exercise this discretion, somebody may think that for some reason that would be unfair, saying that the quarter of the second accounting period was exceptionally profitable or the reverse, and that, therefore, the arithmetical standard ought not to apply. It would be difficult to set out a form of words which could be applied by an independent tribunal, but if you leave the matter in the discretion of the Commissioners they can take account of exceptional circumstances in cases where to apply the arithmetical rule would inflict hardship and do their best to be fair.

The same question would arise, too, as regards contracts, though as a matter of fact there has been no application for adjustment in the case of a contract which extends beyond the period. The question of payments up to £4,000 to other directors must also be a matter of discretion; it would be very hard to lay down a code. The same observation applies to cases where companies were director-controlled at one time and not at another. Obviously one appreciates the argument "Here is a matter which may affect liability, and why should there not be an appeal to a tribunal?" The answer is that if you are to have appeal to a tribunal, you must lay down a code of principles which that tribunal could apply, and that would be very difficult. It does not exist at the present time. Although there may have been complaint against some decisions, we believe that, on the whole, the present system of leaving matters to the discretion of the Commissioners has worked to the satisfaction of those concerned. If we tried to tie them up tighter and lay down a code we might find that we had left outside certain categories of cases which ought to be considered. For those reasons the Government cannot advise the Committee to accept this new Clause. My hon. and learned Friend said he thought there had been some dissatisfaction with the way in which these matters were administered. I do not think it would be practicable or desirable to have anything in the nature of a legal hearing, but I will certainly see whether the suggestion can be looked into in order to see whether the point can be met so that although there was no hearing those affected could get a chance of making their submissions in writing, in a document to go before the Commissioners.

Question, "That the Clause be read a Second time," put, and negatived.

NEW CLAUSE (Extension to single persons of housekeeper allowances.)

The right to a deduction conferred on widowers by Section nineteen of the Finance Act, 1920, as amended by Section twenty-two of the Finance Act, 1924, in respect of a person resident with a widower in the capacity of a housekeeper shall be extended to single persons, including divorced persons.— [ Mr. Brooke .]

Brought up, and read the First time.

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

I hope that the Committee will attach very great importance to this matter. I would make it clear at the outset that the proposed new Clause is drafted in extremely wide terms, because I had the idea that Members in all parts of the Committee might desire to raise a variety of hard cases under the existing law. I do not think it would be right for the Government to accept the proposed new Clause in full, but I am absolutely convinced that the Chancellor must give very careful thought to meeting, in some way, existing cases of hardship.

As I understand it, the present situation is that a widower is allowed rebate of tax on £50, in respect of a housekeeper living with him. Any person, whether married, widowed or single, is also allowed rebate of tax on £25, in respect of an infirm or aged relative whom he or she has to support. There are many cases of great hardship in these days of high Income Tax in which no relief whatever can be claimed in respect of people who are truly dependants. I should like to give the Committee an instance which came to my notice the other day. It concerned a family of three, the taxpayer, his elderly and infirm father and the taxpayer's sister, who was compelled to live at home in order to look after the father. She might otherwise have gone out to work and earned a contribution to the household expenses, but the physical illness of the father rendered that impossible. Had the taxpayer been a widower he could at once have claimed rebate of tax on £50 in respect of his sister living with him as a housekeeper. If his sister had been compelled to remain at home, not in order to look after the father, but because she herself was elderly or infirm, the taxpayer again could have claimed a rebate in respect of her. But in such a case as this, merely because the taxpayer has never been married, he is deprived of any rebate at all, and deprived of any allowance in respect of that close relative who is clearly dependent upon him.

I know that the Chancellor will remind the Committee that this matter of the housekeeper allowance has been raised in days past during discussions of previous Finance Bills; so it has. I make no apology for raising it again. Times have changed. Income Tax, which was at 4s. 6d. in the £ when the housekeeper allowance for widowers was first introduced, is now at 10s. in the £. No taxpayer has the same amount of surplus as he may then have had for the support of dependent relatives. Not only that, but the mere fact of a high rate of Income Tax has increased the contrast between the treatment of the widower and the treatment of a single person. In the case which I have mentioned, the taxpayer can claim no relief. If, next door to him, there happened to be living a man with exactly the same family relationships and household, except that he was a widower, this widower would be able to obtain a rebate of tax of 10s. in the £ on £50—value £25 a year, or nearly 10s. a week. That would make a considerable difference in the net income of the two identical households, especially in these days when finance presses hard on all of us.

I fully realise, as I have tried to make clear, that the proposed new Clause would, in the form in which I have drafted it, open the door too wide. It might give opportunities for claiming rebate to numbers of young people who, in my view, would have no right to do so. However, I am convinced that a position has been reached in this country in which the Chancellor of the Exchequer must examine very carefully the anomalies arising under the housekeeper allowance, so as to prevent the real unfairness and hardships which now exist in many cases.

I wish to support the proposed new Clause. The housekeeper allowance, and the benefit which a widow or widower gets out of it, arise more or less by accident. Historically, the original allowance was made for someone to look after children. In this country, that allowance obviously could be extended only to widowers and widows. It would not have been proper to grant a similar allowance to single persons at that time, but, having started with an allowance for people to look after the children of widowers and widows, there slipped in at a later stage an allowance for a housekeeper, in cases where there were no children. I cannot understand why a single person, in a proper case and where there are no children, is not entitled to an allowance for a housekeeper, where the housekeeper is necessary to look after that single person, as distinct from the case of a widower or a widow. It seems one of the greatest anomalies in our Income Tax arrangements at the present time.

I hope that the Chancellor will give consideration to the underlying idea of the proposed new Clause. I know we have repeatedly discussed similar suggestions during the last eight or ten years in the Committee stage of the Finance Bill and have obtained a good many concessions, but now that more people are paying Income Tax than before, cases have arisen in industrial districts which show clearly that consideration should be given to a Clause of this kind. I have a perpetual correspondent who writes to me every year about three weeks before Budget day, asking whether the Chancellor proposes to deal with this particular matter. He does not hesitate to express in fairly strong terms his views about the Chancellor and the local Income Tax surveyor, for turning him down. [HON. MEMBERS: "Tell us what he said."] I do not think I could if I tried. The case I have in mind is that of a bachelor who has a fairly decent position at a colliery, and is keeping a sister as he has done for years. He has never had any thought of getting married and leaving the household; he has stuck to it in season and out of season, and now he can get no relief at all in respect of his sister, because he happens to be a single man. I do not think that the Chancellor would oppose this Clause on the ground of cost. It would not be very costly. I think I know the objection that has been made for quite a number of years to this idea, but I still think that in these days, when we have brought in millions more taxpayers and are getting cases of real hardship, more consideration should be given to a new Clause of this kind. I hope that my right hon. Friend will try to meet the wish of the Committee, because I believe it to be absolutely unanimous.

At an earlier stage in to-day's Debate the Financial Secretary said how deplorable it would be to pass any proposal which increased the income of a woman because she was a woman. I venture to suggest that at the present time, with the law as it is, the income and spending power of a man are often increased purely because he is a man. I will give the Committee just one instance which came to my notice very recently. A woman and a man entered a Government training centre early in the war and both reached a fair degree of proficiency in the engineering trade. They found employment in the same factory, and were put on exactly the same type of work for the same hours. They turned out to be of precisely equal proficiency.

The man was paid £75 a year more for his work than the woman—that is an injustice to which, of course, my sex are well accustomed. In addition, however, the man happened to be a married man without any children, and therefore he got a rebate of Income Tax on £60 because of his wife. Both the woman and the man were doing work which made it absolutely impossible for them to look after their own homes. It was work of very great importance and they worked very long hours. The woman was unmarried and had an invalid sister keeping house for her, and this is her position: because she is an unmarried woman she has no housekeeper's allowance. That makes her £60 a year worse off then the married man, although she has a sister to keep, and, in addition, her work, which is precisely the same as the man's, is paid £75 a year less than the man's. That is a very clear case of a man having his spending power increased by £115 a year just because he is a man, a thing which the Financial Secretary was deploring with so much eloquence a little earlier in the day. I have been 11 years in the House of Commons, and therefore it does not surprise and certainly does not shock me to see the Government eat its own words, but even I should not like to see the Financial Secretary do so within the space of three or four hours, because even the Government might get a little indigestion from that form of indulgence.

I feel very strongly on this Clause. It only asks for the rectification of a longstanding and grave injustice which, because of the present incidence of Income Tax, is becoming a really serious matter. I agree with the hon. Member for West Lewisham (Mr. Brooke), that the actual wording of the Clause is too wide. Under the present wording, it would, of course, be possible for a young man or a young woman of 21 years of age to claim rebate of Income Tax for a sister or brother when they could very well look after themselves or perhaps have somebody else to do it. That, I am quite sure, is not what the Committee wishes; nevertheless, unless the Chancellor can give us some assurance that before the Report stage he will give special consideration to these hard cases, I beg the Committee to show, by going into the Lobby against the Government, that they will not go on year after year complacently permitting these injustices.

I have a shrewd suspicion, judging by the smile on the face of the Chancellor, that he is inclined to favour the arguments submitted from both sides of the Committee. [AN HON. MEMBER: "You are an optimist."] I am an optimist, but if the right hon. Gentleman is not already convinced, I hope that he and the Committee will take into account two cases which have been sent to me from my division. I think the arguments used in this instance by two brothers are very useful and deserving of consideration. One brother is a widower and the other is a bachelor, and it is argued in a communication that I have received that this, as it stands, is anti-bachelor legislation. The bachelor I refer to lives with his mother. He cannot receive any allowance at all for his mother, because he himself cannot regard her as anything beyond his housekeeper. As he is a bachelor, the allowance, whatever it may be, which is made to the other brother, a widower, is denied to him, though both earn practically the same salary. The mother also is denied the old age pension —her husband was not a contributor—and she is told that as she is living with her son, whose income I believe is round about £400 a year, he must provide for her. The other brother who is a widower has an aunt living with him, and she of course is naturally taken into account. He receives the full allowance of £50. Naturally, these two brothers are wondering who drafted this provision, and why there cannot be some change in the legislation. They say that it is anti-bachelor legislation, and I think that the Committee, and the Chancellor in particular, would do well to examine it from the angle I have mentioned. It is not at all complicated. Adjustments can be made and ought to be made very promptly.

It shows how impartial I am, if this is called anti-bachelor legislation, that I as a bachelor should have to defend the present position. I hope it speaks well for my intellectual impartiality. The hon. Gentleman who moved this Amendment and others have admitted no doubt as to whether this Clause could be accepted as it stood, and suggested that probably it was drawn in far too wide terms. I have to deal with the Clauses as they stand on the Order Paper, and not as they might be. As it stands now the proposition is to extend housekeeper allowance to single persons, including divorced persons. It is quite true that the whole question of allowances throughout the whole range of Income Tax has been for many years a vexed one. Sometimes they have been extended in one direction, sometimes in another, some of them too complicated to understand. Some of the reliefs which have been granted and the reasons for the grant of those reliefs have been wrapped in obscurity.

Mention has been made of dependants' allowances. That is not what this Clause is about. It is about housekeeper allowances. The hon. Lady the Member for Frome (Mrs. Tate) quoted the case of a woman who went out to work and supported an invalid sister, for whom she gets no allowance. If that sister were a dependant and an invalid and—unless my memory is at fault—if the invalid's income was less than £50 per annum, the taxpayer would get dependant's allowance for her. Therefore it looks as if in this particular case, the person concerned has not received the allowance to which she is entitled under the law. One cannot however discuss the case without the full details. I am repeating what the hon. Lady said, and I would just like to say that there must be something wrong because the allowances are not quite as she stated.

Putting aside the case of dependants, let us deal with the case of housekeepers. The history of the housekeeper allowance being £50 is that it was introduced in 1920 and there were two allowances—the allowance given to a widow or widower who had a relative to look after the children and that to the unmarried person who maintained a widowed mother or other family relative to look after young brothers or sisters. In both cases the housekeeper allowance depended on there being young children in the house. The hon. and learned Member for Ashford (Mr. Spens) said it was quite by accident that this was extended. I am not in a position to say how far it was accidental or not, but it was extended in the Act of 1924, presumably for reasons thought good by the then Chancellor of the Exchequer. It was extended to a widow or a widower irrespective of there being any children in the household.

Those are the three cases, two of the cases being concerned with children, and the other being the case of the widow or widower. To extend that allowance now to all single persons would be a very costly undertaking and I would ask the Committee, realising how they feel about some of the personal difficulties involved, to look at the whole picture which has been drawn by these tremendous taxation proposals. This is not the only hardship case with regard to allowances. Hon. Members, through their correspondence, know quite well as I do that a number of others could have been brought out of the pot, so to speak, and exhibited to-day. But the proposal of the Clause would be a great and costly extension of the scope of allowances. I hope hon. Members will not misunderstand me if I use the word "servant" or think that I cast any aspersion in choosing between the word "housekeeper" and "servant." In certain cases if there is not a relationship there is no very wide difference between a housekeeper and a servant. There is no Income Tax allowance for a servant. You may have the case of a family, of a husband and wife with small children, where the husband and wife both go out to work, and have to employ some one to look after their children in their absence because they think it their duty, on account of the war, or perhaps because of ordinary economic reasons, that they should both take jobs. There is no allowance in that case because the person employed would be a servant, whereas if the wife were dead, such a person would be described as a housekeeper and would attract the allowance. I give that case to show the sort of anomaly which can already exist. It may be that there are a husband and wife with children and the wife is a permanent invalid and through illness is unable to look after the children and requires some one to do so. Under the Income Tax law there would be no allowance for such a person as a housekeeper.

It is by no means an easy proposition to apply, once you get out of the comparatively narrow classes for which the housekeeper allowance is now given and start expanding it. It opens up a wider field than some hon. Members have thought. I would stress the point in the Clause about divorced persons, because no one has referred to that part of the proposal. That, in itself, might involve a very extensive non-collection of Income Tax because if you give a housekeeper allowance to a person who is divorced, presumably you have to give it to both parties to the divorce, and there would be two housekeeper allowances, as the result of the break-up of one home, where there was no housekeeper allowance before. Anyhow, it would be a rather strange thing to single out divorced persons for some relief of taxation, though it was in fact a housekeeper relief, at a time when so many married families are suffering heavily under the general burden of taxation. It would be quixotic to go out of one's way to give such relief when married persons with families consider themselves entitled to relief because of the difficulties and the high cost of looking after children in these days.

The right hon. and gallant Gentleman is perfectly fair in what he has said on this point. I should like to make clear that the mention of divorced persons is included, not to favour them, but because if no mention was made of them there would be a gap and a certain class of persons would be entirely uncovered by the legislation.

I appreciate that point, and it is quite true that it cuts both ways. It is very hard where there are children and one of the divorced parties has to look after children, and where there would be a housekeeper allowance if the other party were physically dead and not merely maritally dead. I was making the point that it was not such an easy matter as some hon. Members appear to think. I must come back to the general proposition, which my right hon. Friend considered very carefully before the Debate, that, taking the broad picture, the very heavy taxation of last year from which everyone is suffering to-day does weigh very hard on many sections of the community. The House and the country accepted it, realising that that was part of the cost we all must pay to provide the finances for carrying on the war. The fact that this issue was not raised last year was a reflection of the feeling of the House at that time. Since then, individual cases have been brought up: I have had to deal with many hard cases.

But it is only fair to remind the Committee, as people speaking from this Box have probably done during the passage of many Finance Bills, that the Royal Commission on Income Tax said that it was in fact absolutely impossible for any Income Tax code to contain provision to meet every case of alleged hardship, and that, you had to draw the lines very broadly. That argument has been sustained for many years. It is only now, by the extension of the Income Tax code to such a large number of persons, that problems have cropped up in places which hitherto were untouched—unexpected places, too, sometimes—and many persons are beginning to realise some of the difficulties which left them cold when other people experienced them in the past. If it is true that it is very difficult to build up a code which will cover all these hardship cases in peace-time, the Committee will realise that it is harder still to embark upon any patchwork of changes and reliefs in war-time. My right hon. Friend, feeling great sympathy, as everybody must—and as we do when we get letters from the people concerned—with these cases, has, I am afraid, not for the first time, to steel his heart and say that it is impossible to make such a wide breach as this Clause would entail in that part of the Income Tax code. Regretfully, I ask the Committee not to accept the New Clause.

The Financial Secretary has dealt with the matter very fairly, but I do not think the Government can be allowed to get away with it quite so easily as that. I do not think the Financial Secretary has fully realised why this question has come into such prominence. I remember the days when Income Tax was a pure and simple tax. There was no allowance for wife, or children, or dependants, or housekeepers, or anything of the kind. People did not worry about it, because the tax was only a few pence in the pound. When the imposition is small it is not necessary to be particular about cases where it happens to fall more hardly than in others. It is only when the amount rises until it exhausts a very large part of the income that such cases come into prominence. Then you get these marginal cases of exceptional hardship. The Financial Secretary was quite right when he said that last year we felt the great necessity of raising money, and we did not demand that these hard cases should be met; but as time goes on, and the war continues, and taxation remains at a very high level, Members feel that the Government must make some alleviation in the lot of these people.

I remember how the matter arose. In the old days the wife was regarded as a sort of appendage of the husband. That is no exaggeration. It was said that the husband kept his wife. It was not in the least true; but the fact was that the services which the wife rendered to the household were entirely disregarded. The analogy of a very rich man, whose wife was in fact being kept by her husband, was assumed to apply to the bulk of the population, where the wife rendered considerable services to her husband, acting as housekeeper, nurse, and in many other ways doing a large amount of work. In those days there was no differentiation in the allowances for a single person and a married person. But then the principle was adopted that the exemption should be increased if a man was married, in which case the household consisted of two persons at least, instead of one. The exemption was not doubled, but it was greater than that for a single person. Then there were further allowances for children. Then people said, "What is the position if the man is under the misfortune of losing his wife?" When they got to that problem, they realised that the man, instead of having got out of the liability of keeping his wife, had to keep a housekeeper, and to pay her a salary as well. The widower with children to bring up was in a worse position than another man who had a wife, who did all the work for nothing except for her board. Therefore, the House insisted upon some allowance being made in that case.

As the hon. and learned Member for Ashford (Mr. Spens) has pointed out, there crept in a further case. A widower who had a housekeeper to look after his children was getting an allowance, whereas a widower who had an aged relative, whom he was keeping, did not get an allowance for the housekeeper who was necessary to look after the aged relative. The whole position is utterly anomalous. I do not think the Financial Secretary will deny it. It is quite indefensible. I agree that to open the door, as this Clause would, to enable any head servant to be classed as a housekeeper would merely be to afford relief from Income Tax to any person who was rich enough to keep a servant to look after his house. I and other Members in the course of various stages of the Bill have pointed out cases of exceptional hardship, and I hope that we shall obtain a promise of consideration by the Chancellor of the Exchequer between now and next year at any rate. I do not think he can do it between now and the Report stage of the Bill, and the hon. lady the Member for Frome (Mrs. Tate) may ask him for that, but I am afraid that he is not likely to agree to it.

I rather regret the present suggestion of the right hon. Gentleman the Member for East Edinburgh (Mr. Pethick-Lawrence), in view of the fact that we do not know from one week to another who will be in possession of the office.

I hope that we shall keep the Chancellor of the Exchequer in his office for another year, but even if he were moved to a higher sphere, I am sure that any investigations which he in his wisdom had carried out would be transferred to his successor. We ought to obtain a promise of real consideration being given to this matter. I have known the Chancellor of the Exchequer in his conduct of Bills, and when he makes a promise of consideration he means it, and he generally carries it out in a liberal spirit, and I hope that he will give that promise to-day. Clearly here is a gross anomaly which presses with really great hardship in certain cases, notably of sickness, spinsters, and cases in which the payer of the tax is rendering a real service to the community by bearing the burden of the upkeep of some person who would otherwise be chargeable to the State or to a local authority. These people are entitled to some consideration, and I hope that the Chancellor of the Exchequer will give us a promise that real consideration will be given to this matter.

I would like to say a word or two on this matter. It is true, as my right hon. Friend, and my hon. Friend behind have said, that the presentation of cases of this character appeal to every one in this Committee. On the one hand, you could say that the difficulties of cases like these have been accentuated by the considerable increase in Income Tax, while on the other hand I hope that my hon. Friends will equally appreciate the position in which I find myself, and that as the years go by, in face of the present problems, my particular aspect of the problem becomes more difficult. One argument might very well be that if this case, strong as it may be, was rejected in peace-time for various reasons, it is exceedingly difficult for me to make this concession in a time such as I have had to experience since I have been Chancellor of the Exchequer. I could myself put upon the Order Paper, if I were in the position of hon. Members, a number of cases of this kind almost as strong and difficult to resist. If you were dealing with them entirely on their merits, you could put one case after another before the Committee quite as strong as the one that is being put before the Committee at the present time.

I would remind the Committee of the fact that I made no reduction as far as this allowance is concerned in my previous Budget. It has remained as it was originally fixed by the Committee. I will, as it is my duty to do in my present position, examine all these various phases of the Income Tax. I only hope that it may be possible to look round and see whether some alleviations can be made. It all depends upon how matters go and how my hon. Friends behave themselves in the interval between now and the next Budget. I hear whisperings occasionally of all sorts of further demands which are to be made upon me. I hope that they will keep in mind these very strong cases which the right hon. Gentleman has put before the Committee and that they will not be so forthcoming in coming to me with all sorts of proposals. We have to have regard very seriously to the financial considerations. Nothing can be worse from the point of view even of the cases which have been mentioned than that our finances should get out of hand. We certainly have been very successful with the aid of the House, and not by myself alone, in restraining and maintaining our finances in a not unsatisfactory condition. I am anxious indeed that we shall continue in that task. Nothing is more difficult and objectionable to me personally than not to be able to say, in cases of this kind, how much I would like to meet the desires of the Committee, but it is my particular job to take a little more comprehensive view and reject suggestions of this kind, not on the merits of this particular case only, but because they open a very wide door indeed, which, if I once opened, I do not know how I should be able to close it. The right hon. Gentleman has appealed to me. I can give no undertaking. I must watch carefully the finances of the country, but between now and the next Budget I shall examine all such considerations as my right hon. Friend has put before the Committee.

I am encouraged by the manner in which the Committee have received my proposed New Clause. The Government must have recognised that there is a widespread feeling in all parts of the Committee about the hardships which arise under existing legislation. I trust that the Chancellor of the Exchequer will give his very active thought to removing these hardships. It is by far the best way if he can find the means himself of removing them. But some of them are of such a character that Parliament cannot allow them to continue indefinitely, and I must give notice that, unless the Government find means to meet them, I reserve the right to bring this matter up again, in a narrower form, on the most suitable occasion. Subject to that, I beg to ask leave to withdraw the Clause.

Motion and Clause, by leave, withdrawn.

Ordered, "That the Chairman do report Progress, and ask leave to sit again," put, and agreed to.—[ Major Sir James Edmondson .]

Committee report Progress; to sit again upon the next Sitting Day.

Convoy Commodores (Widows' Pensions)

Motion made, and Question proposed, "That this House do now adjourn."— [ Sir J. Edmondson .]

I would like to say at once how-very grateful I am for the opportunity of raising this matter of pensions for widows of naval officers who lose their lives at sea. The question of the pensions payable to the widows and dependants of naval officers serving in a rank lower than that upon retirement and losing their lives while on active service is one which has been raised on several occasions by Question and answer in this House. Notwithstanding that the First Lord of the Admiralty succeeded in wringing an improvement out of the Treasury, the position is still very unsatisfactory, especially in regard to the widow of a retired admiral who has served as a commodore R.N.R. in charge of a convoy. These admirals have waived their rank and are now commodores R.N.R., and as a direct consequence of their having waived their rank, their widows receive substantially less pension than they would have received had the officers been serving in Flag rank.

Let me explain to the House why it is these retired flag officers serve as commodores R.N.R. It is not because the rank of admiral is too high a rank for the officer in command of the convoy to hold. Far from it. The Admiralty are only too thankful to have these experienced retired flag officers to take charge of convoys. The reason why these flag officers now serve as commodores R.N.R. is because command at sea is vested in the officer in command of the escort—a naval officer— and in order to get over the difficulty of having the "officer in charge of the convoy senior to the naval officer in the escort, these retired officers waive their rank and serve as commodores R.N.R., as a direct consequence of which their widows are very severely penalised. My hon. Friend the Member for Wallsend (Miss Ward) put a Question last Wednesday to the First Lord of the Admiralty, who stated that the Admiralty, in common with the two other Service Deparments, had been empowered to grant a supplementary-widow's pension up to a maximum of £65 a year. But in the case of a widow of a retired full admiral who has served as a commodore R.N.R. the maximum is £30 a year. I presume that officers of the rank of vice-admiral or rear-admiral will get less. It is not exactly a princely sum. Many of these flag officers served prior to the war in flag rank. All of them have reached flag rank.

May I bring to the notice of the House the fact that during the last war the widow of a commodore in charge of a convoy received a pension of £320 or £300 a year? In this war she is to-day receiving £260 a year. Is it suggested that the duties which these commodores discharge are less arduous? They are far more arduous and hazardous. Is it suggested that the cost of living is less to-day than it was during the last war? Has the Exchequer completely forgotten the immense increase in taxation which these widows have to pay out of the miserable pittance which they are awarded? This grant, the First Lord stated, was given in order that a widow of a retired officer who lost his life as a result of further war service shall not normally receive less than if her husband had lost his life on Civil Defence service. In order to assess what their widows should receive, the services of these officers at sea are compared with the services of officers in Civil Defence service. I see that the Minister of Pensions shakes his head in dissent, but the First Lord of the Admiralty stated that the grant was given so that they should not receive less than they would if their husbands lost their lives in the Civil Defence services.

I have three comments to make on that statement. First, it only shows what a miserable, cheese-paring, parsimonious pension the widows received prior to this grant. Secondly, these flag officers who are serving as commodores fall into a special category which has no parallel in any other Service, and their widows should receive special consideration. Thirdly, to compare the services rendered to the country by these officers— one of the most important, most hazardous and most exacting of all Naval Services—with the services rendered by men in Civil Defence at home is, in my opinion, a monstrous injustice to these officers. That is what is being done with regard to the pensions granted to their widows. One is really amazed that the Admiralty should ever have agreed to the pension of £240 a year which was granted to the widows of these flag officers. Who is to blame, the Admiralty or the Treasury? I know that the Admiralty have been fighting this matter, and that they have wrung some small concession from the Treasury. Therefore, it must be the Treasury who is to blame, but whoever is to blame, the pension granted reflects little or no credit on those responsible for the decision.

I can tell the House that 13 of these retired admirals have already made the supreme sacrifice at sea—a very high proportion of those employed, higher, I am certain, than in any branch of any other Service employed by the country at the present time. These men deserve well of their country—none better. They deserve well of their country for their long and meritorious service prior to the war, let alone the services which they are now rendering. I am glad to see that my right hon. Friend the First Lord of the Admiralty is present. He will agree with me that no greater services are rendered to the country than those rendered by these gallant admirals who go to sea in charge of convoys. Up to the present there has been small recognition of their great services. The duties which these officers carry out, I repeat, are of the most important, most hazardous and the most exacting of all naval services at the present time, and their efficient performance requires an officer of long experience, great qualities of leadership, and seamanlike qualities of a very high order.

The Admiralty are only too glad to get these retired naval flag officers. The voyages which they undertake are long and very arduous, and the conditions in which they serve are, in many instances, absolutely deplorable. I will not enlarge upon that now, but they impose a long and ceaseless strain. It is not the pay which these officers receive that I complain about; they do not complain about that; it is the miserable pension given to their widows when these gallant officers lose their lives. It is that parsimonious pension which is raising such widespread dissatisfaction, and when the country knows about it, the country will be appalled at what is being done. Naval officers on the cheap and widows cheaper still is not a policy which can commend itself either to this House or to the country. I therefore most earnestly appeal on behalf of these officers that their widows shall receive a just and improved pension. I suggest that the vocal expressions of gratitude which are so readily given for the great services they render to the State should take the form of increased and better pensions and the removal of this blot of parsimonious treatment for the widows of these flag retired officers serving to-day as commodores R.N.R.

My hon. and gallant Friend the Member for South Paddington (Vice-Admiral Taylor) has put the case very strongly, and I cannot say any more from that point of view. I raised this matter with the First Lord of the Admiralty nearly a year ago, and he told me he was negotiating with the Treasury and hoped there would be a satisfactory outcome. I raised it because I received a letter from a friend of mine, who is the widow of the first commodore to lose his life. He was a vice-admiral. His widow told me that her pension was fixed in January last year at £240, which left her with only £12 per month after Income Tax at £96 had been deducted at source. That is no comparison with the pension paid to a widow of a commodore in the last war, and I cannot understand why the Admiralty agreed to the amount being cut down from £300—£320, as has been done. I take it that this lady will now receive a slightly increased pension— probably £30 for a full admiral and £20 for a vice-admiral. At the same time I received a letter from a vice-admiral serving as a commodore with convoys. He is also a friend of mine. He told me that he had crossed the Atlantic 20 times, and that from the experiences he had had he could not really go on hoping to do it all through the war. He said, "I would like to feel that my widow will get a fair pension, or at least the sort of pension widows received in the last war." Apparently he knew at the time, although I did not, that the amount had been reduced.

It is not, of course, the fault of the Minister of Pensions; it is a matter between the Admiralty and the Treasury, and it is a matter which ought to be fought out by the Admiralty with the Treasury. I was a member of the Board of Admiralty in that settling-up period after the last war when a great number of officers had to be axed. Lord Beatty was First Sea Lord, and I was his deputy, and we declined to axe any officers until we got fair treatment for them from the Treasury, and negotiations dragged on for about a year. I remember the Treasury stating that not only had everyone's pay been raised, but that flag and entertainment allowances had been raised. They asked, "How do you justify that? We cannot afford to entertain now." Lord Beatty and I and the other naval members of the Board put our heads together. We said that we would agree to go back to the pre-war flag allowances provided the Treasury would grant these officers who were being axed the pensions which they ought to receive. That stands to-day. It means that an admiral has to keep a table and provide meals for the five or six officers of his staff and entertain on exactly the same allowance which his predecessors received 50 years ago.

It was a very considerable reduction we made as a self-denying ordinance by flag officers to enable young officers who were being axed to get fair treatment. I remember one of them coming up to me in my club and saying, "Cæsar, in death we salute thee." They knew the fight which we had put up. I suggest that the First Lord of the Admiralty puts up a fight now—perhaps he can make a self-denying ordinance too, to get fair treatment for these widows. I do not know where it will come from, but it is not right and fair, and the country ought not to allow these gallant officers, who have given up so much to the convoy service, to go about feeling that their widows are to be so badly treated.

It being the hour appointed for the interruption of Business, the Motion for the Adjournment of the House lapsed, without Question put :

Motion made, and Question proposed, "That this House do now adjourn."— [ Mr. Adamson .]

I rise to support my hon. and gallant colleague. He has made his case with the vigour of a young commander and a still younger vice-admiral. He has been very patriotic in dropping his rank, and we all congratulate him on being able to serve as he is now doing. I hope the First Lord will see fit to give him a better place than he now holds. I hope the Minister of Pensions and the First Lord will try to get more money for the widows of these 13 commodores who have lost their lives. Naval officers have great calls on their purse. They have to keep up a position, they have to belong to a mess, which is very costly, they have practically to keep two homes running, and they can never save any money at all. Very few of them have anything to leave their widows when they pass from this world. I have noticed many wills of Members of this House, and even hon. Members above the Gangway sometimes leave substantial sums. I have often thought that naval officers cannot do that. I therefore submit that those in charge of this case should be a little more generous to these widows. After all, they are left to us in sacred trust, and it seems to me almost incredible that during the last war a widow over 40 with one child should have got £320, and now the figure is only £260. Who is responsible for this reduction? Surely it cannot be said that the cost of living is so very different from what it was in the last war. It was pretty costly then, and it is costly now. Is the Treasury responsible, or does the Admiralty make out these pensions and submit them to the Treasury, or how is it arranged? These officers have been so patriotic as to take on this responsible work of convoying our ships carrying food and raw material and munitions to this country and to Russia, dropping their former rank. They are mostly over 60 years of age. I think the country would not like to see their widows treated unfairly.

I should like to say how much I appreciate having listened to the three speeches that have been delivered on this very important question. The hon. and gallant Members have put the case very fairly. May I first clear away one point as regards the rate of pensions generally? On the general question of pensions, it is not true to say that the amount that was paid during the last war to the widow of a commodore was £320.

I have it too, and if the hon. and gallant Gentleman will listen, he will get the right story. During the last war the rate varied, and there were three or four increases. The rate that was given to the hon. and gallant Member to-day in reply to a Question was that the rate of pensions provided in 1919, that is, after the war, was at the rate for the widow of a commodore of £320 per annum. That was based on the cost-of-living figure which was then very high. The present rates have been fixed all along on the cost-of-living figure. As this has increased, the pensions have been increased, with a promise from the Government that when the cost-of-living figure reaches that of 1919, generally speaking—although not in every case, because certain variations had to be made for definite reasons—the pensions will be on the same lines as those in 1919. A number of people keep saying that the pensions paid during the last war were greater than in this war. That is not a fact. It was after the last war, when we knew our liabilities and what the cost-of-living figure was, that the pensions were fixed. I hope that hon. Members, in quoting the pensions that these widows receive, will not deduct Income Tax and give the reduced figure as the pension figure. Income Tax applies to everyone, whether he receives a pension, an income or money from investments. Hon. Members should quote the real figure which my Department pays out. We can then get a better comparison than by giving the figure after Income Tax has been deducted.

I do not know, but I do not think it matters whether they are paid gross or nett. There is an amount deducted which it is legal for the pensioner to pay. Income Tax is not my affair, however, and my duty is to pay the pensions laid down by Parliament. As Minister of Pensions, I have to look at this matter from two points of view, and I want hon. Members to have a little consideration for me in my position as Minister. I have to carry out either a Royal Warrant, or a scheme that has been approved, or an Order in Council that has been made to deal with a particular service. The Order in Council lays it down that where a retired officer is reemployed in a rank lower than that which he held on the active list and is killed as a result of his service in that lower rank, his widow is entitled to a pension appropriate to the employment which resulted in his death. That has been modified by the special provision recently introduced by my right hon. Friend the First Lord, but, apart from this modification, the only pension which can be awarded under the present Regulations is that provided by this Order in Council. That is my position as Minister of Pensions, and I have explained it time and again to several hon. Members who have approached me on this question. They have agreed that I cannot do more than is provided for in the Order.

I have also another duty, and that is to state to the House exactly what are my reactions as Minister of Pensions to the merits of the case as put forward by my hon. and gallant Friends. I do not think anyone in this House or outside it will accuse me of minimising the value of the services which these men are rendering to their country. I represent an important port, and I know what the men who are serving in the Royal Navy and in the Royal Naval Reserve are doing in convoy work and in performing other important duties essential to the national welfare. My hon. and gallant Friends said that everybody showers paeans of praise on them, but that that is not enough, and that something more than words is wanted. But I have to consider this matter from all angles, because while I agree that those men are engaged on a very special service, and are very gallant men indeed to offer their services in this dangerous work, in which they take great risks, still I have to consider what the reactions will be upon other Services. We have in the other Services retired officers who are reemployed in a lower rank. The grading of a widows' pension according to the rank her husband was occupying is clearly justified for one reason only, in my view, and that is to mark the varying degrees of responsibility discharged by officers in the posts they occupied at the time of death. It is a plain fact that in the cases now in question the officers were discharging responsibilities which the Admiralty considered appropriate to the rank of commodore.

There are the reverse cases. There are men in the Army who are given temporary higher rank because they are doing special work. If death results from carrying out that particular job, who would suggest that we should pension the widow on the scale of the man's real rank, which is a lower rank? Therefore the principle has been adopted of granting a pension according to the rank in which the man was serving at the time when death took place. I submit that it is very difficult to take one specially-employed class of men out of the general position as it affects all other officers who are serving in a rank either higher or lower than their ordinary rank. We must take that difficulty into account in dealing with this question.

On the question of these particular men, we should be in a very difficult position if we pensioned the widows of these men, holding flag rank but still acting as commodores on their flag rank appointments, because, as my hon. and gallant Friends will know, we have men serving as commodores who are under the orders of officers who are not themselves of flag rank. Then we should have the anomaly, which would soon be pointed out to me, that the widows of those men were being pensioned at a higher rate than the widow of the man who was actually in command of them. That would create a very great difficulty, and I submit that it is something which I must take into account and which the Government also must take into account. Again, if a retired officer were advanced to a higher rank, and therefore entrusted with greater responsibilities, there could be no question of assessing his widow's pension according to the rank he held on the retired list. The principle in this case is applied when the new rank is lower than the old, That is a difficulty I am facing. We want to take this matter into full consideration.

I noticed in the Press the other day an article written by one who signed himself as a naval correspondent, but I am afraid that some of the statements which he made misled people in various details. The article was headed, "Offered under new concessions," and it was shown that some of the figures were less than others now drawn. I would point out that in no circumstances does anybody draw less than he would have been entitled to before the concession was made and that in the vast majority of cases considerably more is actually drawn. My hon. and gallant Friend admitted that an improvement had been made by the concession. To say that anybody gets less is wrong. It is definitely laid down that in no circumstances shall anybody draw less, and I want to clear that point out of the way.

The reason why this concession was made so that it coincided with the Civil Defence services was because it was thought to be a grave injustice that the widow of a naval officer should draw less pension than if that retired officer, instead of going back into the naval service, had gone into Civil Defence work. I would like to draw a comparison between the two risks. From what I have myself seen in London and in many of the towns which have been blitzed, I submit that it is a very dangerous occupation for a man to be engaged in Civil Defence, just as it is undoubtedly very dangerous for a man to be engaged in the work of convoying ships. We ought not to set up a rivalry between the two Services. My hon. and gallant Friend mentioned the Home Guard, and I shook my head, because the widow of a Home Guard officer who is killed receives only the same pension as the widow of a private. It does not apply to the Home Guard officer, but it applies to the Civil Defence officer of a high rank. I think the table shows that reasonably fair treatment has been meted out.

My hon. and gallant Friend mentioned certain figures. It would be as well if we quoted one or two of them to show exactly how the case stands. In the case of an admiral serving as a commodore, his widow will receive actually £65 a year more than her ordinary rate of pension, that is to say, what she would have been entitled to if her husband had died a natural death. It is not a question of being parsimonious. There is an additional gratuity of £800, plus that £65 more. In her case, there would have been no gratuity if her husband had died a natural death. I do not think it can be said that that is parsimonious. Of course, it can be argued, as in all pensions cases, that it would be better to give more and more, if the country could afford it.

Would the Minister be good enough to tell us what this widow would actually get if her husband died a natural death? Let us have the figures?

Yes, Sir. Let us take the case of a vice-admiral serving as commodore; that is a reasonable thing to take, because that is more frequently the rank serving as commodore. In the first place, let me explain—my hon. and gallant Friends know all about this—that many men who were commodores on retirement were promoted to the rank of vice-admiral. That was a very good thing, as a reward for the services which they have rendered, but they have never really flown their flag. We have only one case out of all these cases where the officer really did fly his flag. I am only pointing that matter out.

I know of my own personal knowledge that there are officers who served in flag rank prior to the war and who have served as commodores of convoys in this war. I could name them.

I am speaking of the cases with which I had to deal. I made inquiries to find out where the injustice came in. I was just referring to the cases that have come to me where the men have been killed and we have had to give a pension and gratuity. I can only deal with those cases which I know about. It is not a big point, but I am stating it is so that we have a clear picture of the whole position.

A vice-admiral's widow would be entitled to a pension of £187 10s. per annum if he died a natural death. That is because he has served his country for so many years, and that is what she would receive if he died before she did. Before the amendment made by my right hon. Friend the First Lord, she did not get a war pension of £260 plus a lump sum of £800 if he was killed in action. It is quite true to say that she does not receive under the concession more than the £260 plus £800, because that is the same figure as would apply to a Civil Defence officer, but there are other cases. Take an admiral serving as a commodore. His widow if he died a natural death would be entitled to £225 a year. Under the war pensions scheme, before the alteration was made, she got £260 plus £800 gratuity. Now, under the new scheme, she gets £290 plus £800 gratuity, so the concession that was made does represent an improvement in those cases.

Surely my hon. and gallant Friend will take into account the annuity value of the £800, which is worth at any rate something in the way of an annual income. I will say this in passing: These gratuities are not given to other ranks, and it might be advanced as a grievance that the officers receive them and the men do not, if we did not take them into account as an addition to the pension. I think it is only right and fair that we should take them into account; otherwise what is the use of giving them? We will take the case of a rear-admiral who, like my hon. and gallant Friend, has come forward in a very patriotic way and is now acting as a commander. Am I right?

He is a vice-admiral and is acting as a commander. I hope we shall never have to deal with his case, because I hope he will survive this war. If he dies a natural death, his widow will receive £187 10s. a year as an undoubted right. Under the old scheme she would receive £195 a year plus £450, but under the new concession as announced by my right hon. Friend the First Lord she is now entitled—and this is one of the Cases where there is a real benefit—to £252 10s. plus £450 gratuity. I hope it will not be very long before he is promoted from commander to something higher, and then we can show a higher pension although not a higher increase under the new Regulation. If, therefore, anyone says to me that the new Regulations have not really done something worth while towards meeting this difficult position, it is not correct.

I want hon. Members to realise my position as Minister of Pensions. If I began to take certain sections and say, "They are doing an extraordinarily good job of work, and we must give them a higher pension," other people would be at a grave disadvantage. It might be said that I ought to give a higher pension to the widows of the men in the commandos, and with some force, because they are undoubtedly taking very grave risks. But, on the other hand, the woman who loses her husband from some disability due to service, even if he dies in hospital, has to face the world without her husband just as the other woman has. While I again repeat that these men are undoubtedly doing a very dangerous job and deserve the thanks of every man, woman and child in this country for it, I am certain that the House will agree with me that the only right and proper thing for me to do as Minister of Pensions, having to deal with all the Services, with the Civil Defence volunteers, with the civil population in case of air raids, and having to meet hundreds of cases which people think are hard cases, is to try to deal fairly and squarely with all those sections and to see that there is no discrimination as between one section and another.

With all humility, I assure hon. Members that if they had my job to do and had to go into all these many claims that are being made and in which one feels one would like to give way because of special circumstances—and I would repeat that this is a very special circumstance— I am afraid that to give way would arouse more difficulties than it would appease any discontent which there may be. I hope it is rather an overstatement that there is wide discontent over this matter. I have talked to many naval officers. I have friends who are naval officers, and I do not find that they regard this as a matter for discontent. It is true that they feel that some special consideration should be given. I find that the same arguments are used for other sections of the Fighting Services. When I put it to them that they entered this Service because they wanted to do their bit, they agree and say they are content. My experience has been that now this new concession has been made so that their widows are not in any worse position than the widows of officers in the other Services, discontent has been removed. Both myself and the First Lord are prepared to listen to any cases which appear to be cases of hardship. The other Service Ministers too are desirous to do the fair and square thing to those who are doing so much for their country.

May I ask whether, in view of the special category into which these officers fall, some steps cannot be taken to alter this Order in Council which binds the Minister to give the pension which is at present in force?

I have tried to point out what are my particular difficulties as Minister of Pensions, though people not having these difficulties may hold different views. This discussion will appear in the OFFICIAL REPORT in the morning and will be read by those who are interested, both Members of the House and members of the Government. I cannot give any promise as to what can be done. All I can say is that this discussion, like other discussions on pension questions, will be carefully considered by myself afterwards in the light of my reading of the speeches made, and I have not the slightest doubt they will be considered by the Service Ministers and other members of the Government who are interested in these matters.

I am bound to say that the speech of the Minister of Pensions, although exceedingly clever, has not really answered the case at all. We all know that he carries out his duties with the greatest kindness and the greatest possible sense of fairness, but he is bound by the Order in Council. Our complaint is that the Admiralty have not taken steps to restore to the widows of these officers the proper pensions due to their rank. He compared the admiral's pension and said that if he had died a natural death, his widow would have previously received a pension of £230 a year but now gets £290 and £800 gratuity. But he omitted to tell the House that if the admiral had been killed in action, his widow would have got £500 a year pension. These men are performing a service not comparable to any other service. It is impossible to compare it with service in Civil Defence. They are serving at sea. They are carrying out the same kind of duties which they originally went to sea to perform. I hope that this question will not be allowed to die. This is an injustice to a deserving body of men which one would have expected the First Lord to have done his best to have removed.

He has. You have no right to say that.

It being the hour appointed for the Adjournment of the House , MR. DEPUTY-SPEAKER adjourned the House, without Question put, pursuant to the Standing Order .