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Commons Chamber

Volume 410: debated on Thursday 26 April 1945

House of Commons

Thursday, April 26, 1945

The House met at a Quarter past Two o'Clock

Prayers

[Mr. SPEAKER in the Chair ]

Oral Answers to Questions

Industrial Reconversion

Disabled Ex-Servicemen (Training)

asked the Minister of Labour to what extent disabled ex-Servicemen are being trained by private firms.

Many private firms are training disabled ex-Servicemen, but I regret that statistics regarding the number are not available.

Young Women (Continued Registration)

asked the Minister of Labour if he proposes to continue to call up the younger women of the country who are just reaching 18 years of age after the teermination of the war with Germany.

As stated in the White Paper on the re-allocation of man-power between civilian employments (Cmd. 6568), it is the intention of the Government to continue to register young women, and to require those who are available, in accordance with current rules, to take or continue in work, or to take training in accordance with the current labour priorities, so long as this is necessary in the national interest.

Domestic Work (Release Priority)

asked the Minister of Labour whether, in order to meet the need, he will provide that any woman in the Forces or the W.L.A. who qualifies herself in domestic science or undertakes to take up domestic work on demobilisation, will be given priority of release from the Services.

Women will be released from the Women's Auxiliary Service according to age and length of service, except for a small number required for urgent reconstruction work. I am not prepared to introduce or impose conditions of release which would interfere with the liberty of these women to choose the profession they wish to follow on release. As regards the W.L.A., it will be essential to maintain these numbers at the highest possible level for some considerable time.

Does not the right hon. Gentleman think that this would be a more effectual way of solving this problem than some of the more cumbrous methods which he has adopted?

Yes, Sir, but I have to be extremely careful not to introduce into the release scheme an undue pressure which interferes with the liberty of the subject after his release.

Does the right hon. Gentleman propose to make early arrangements to facilitate the return of these Land Army girls to domestic work, and more adequate compensation?

Some of the women may not regard domestic work as an adequate compensation.

I believe many of the women would prefer it to what they are getting now.

Architects and Surveyors

asked the Minister of Labour if he is satisfied that the number of architects and surveyors that will be released from war-time duties will, in addition to those who are now available, be sufficient to enable the Government's announced housing programme and other essential construction work required during the first two post-war years to be completed.

I am satisfied that existing arrangements providing for the release of architects and surveyors for the housing programme go as far as possible, and that we must have regard both to the needs of the Services and to the needs of the housing departments. Subject to the requirements of the Services, we are doing and shall continue to do all we can to provide the housing staff which is essentially required.

Has my right hon. Friend not gone into this definitely, and calculated the number of architects required in relation to the number of operatives, so that we can be getting on with the housing programme?

Yes, I have calculated, but I am not going to allow architects or anybody else to jump the claims of the ordinary Class A man.

While I quite agree with my right hon. Friend, is he not aware that this is not a question of anybody jumping a claim but of providing houses for our people?

I am quite certain that there is a definite effort to put pressure upon me for certain professions to get their men out in advance of the ordinary unknown man, and I stand for the unknown man.

Transferred Workers (Return Facilities)

asked the Minister of Labour whether he is making arrangements to give financial assistance to enable workers to return to their home districts when released from work to which they were transferred by his Ministry.

Yes, Sir. Workers who, on transfer away from home, qualified for financial assistance from the Ministry will, in general, be eligible, on release to return to the home area, for free travelling warrants for themselves and their dependants, together with assistance towards the cost of removal of their household effects. Those of them who find it necessary to take lodgings while seeking accommodation for their families may also receive, among other facilities, a temporary grant of lodging allowances at the current rate of 24s. 6d. a week for a period not exceeding three months if they are placed by the Ministry in work of national importance in the home area.

Has the right hon. Gentleman any idea of the number of people involved in this transfer?

I could not give an estimate. It must run into thousands, I should think.

Questions

National Service (Armed Forces) Acts

asked the Minister of Labour whether he will consider in any further modifications of the National Service Acts, providing that no youth whose parents have, or have had, four sons in His Majesty's Services, two of whom have been killed or severely wounded, shall be called up for service abroad; and if this is not possible, provide that the fourth and fifth member of the family be retained in home service until one of the others has been discharged from service.

While sympathising with my hon. Friend's suggestion, I am afraid the proposal in the first part of the Question is not practicable. As regards the second part, the use of persons enlisted under the National Service (Armed Forces) Acts is a matter for the Service authorities concerned.

Military Service (Directed Mineworkers)

asked the Minister of Labour if youths, who have been directed to the mines under the ballot will, when released from the mines, be still liable to military service.

Although the men concerned will be legally liable for military service, I do not propose to enforce their liability if they have served in the mines for a period equivalent to that which they would have served in the Forces.

Reconstruction, Plymouth (Technical Staff)

asked the Minister of Labour whether his attention has been called to the application on behalf of the Plymouth Council for technical staff to enable the engineer and surveyor to prepare for housing and reconstruction, and the fact that his Department caused a delay of ten weeks in the publication of an advertisement and a further delay in sanctioning the appointment of men selected, and that a period of six months is now occupied in complying with the procedure laid down in the Restrictions on Engagements Order; and if he will take immediate steps to remedy these matters.

My inquiries are not completed, and I will write to the hon. and Noble Lady as soon as possible.

Will the right hon. Gentleman remember that we cannot even get our housing plans prepared, let alone get the houses built, until the men are released and the architects are also there?

I will take this up, and, if there has been any mistake, I will correct it.

Civil Defence

Baffle Walls, Glasgow (Removal)

asked the Secretary of State for the Home Department if he is aware of the danger in Glasgow streets and pavements caused by baffle walls; and if, in view of the changed conditions now prevailing, he will give permission to the local authorities to have them removed.

I would refer my hon. Friend to the answer I gave last Thursday to the hon. Member for West Fife (Mr. Gallacher).

Would the right hon. Gentleman reconsider this matter, in view of the fact that, in tenement dwellings in Scotland, these baffle walls, besides being a nuisance in the street, cause great difficulties to people removing their furniture?

I have considered that, and I think my hon. Friend will find that, subject to labour problems and other problems of that sort, the matter is dealt with in a communication which I am sending to the local authorities.

Will the right hon. Gentleman see that the authorities are given the powers to remove them where they have the labour available for that purpose?

I think that is consistent with the communication which has been, or is being, sent to the local authorities.

Will the right hon. Gentleman also bear in mind the peculiar situation in this case and the insanitary conditions which all this stuff is causing in our tenement dwellings?

Yes, Sir, I have seen them myself, and I appreciate my hon. Friend's point. The only thing that I must be careful about is that it might be a choice between building labour for houses and labour for this purpose. I am sure my hon. Friend has made a fair point and I will be sympathetic about it.

Old Age Pensioners

asked the Secretary of State for the Home Department how many old age pensioners were killed and how many were injured while engaged on Civil Defence duties.

I regret that no figures are available, nor could any reliable statistics now be compiled without a disproportionate expenditure of time and labour. I have no reason to suppose that the number is any considerable proportion of the total numbers discharged or still employed.

asked the Minister of Health how many old age pensioners who were engaged on Civil Defence have died since being stood down from this Service.

I regret that this information is not available.

Air Raid Shelters (Removal)

asked the Secretary of State for the Home Department if he contemplates an early demolition of surface shelters; and whether directions will be given to remove first those that have been contributory factors in street accidents.

The removal of unwanted surface or other shelters will necessarily be a gradual process dependent entirely on the amount of labour which can be spared for the purpose, having regard to the prior claims of the housing programme and other works of comparable urgency. Subject, however, to the availability of labour, I propose in due course to ask local authorities to give an appropriate preference to the removal of certain specified classes of shelter, including surface shelters which constitute a serious source of danger to traffic.

Does the reply from the Minister indicate that it is within his power to give directions with regard to the sequence of the removal of such shelters, especially with regard to Glasgow, in view of the manner in which the streets there are occupied by children, in the summer months, because no other playgrounds are available for them?

Yes, Sir. We are issuing guidance to the local authorities, which should be followed consistently with the labour supply being available.

Will it be permissible for householders to remove small obstructions which merely adjoin or are in front of their dwellings?

Questions

Metropolitan Stipendiary Magistrates (Appointments)

asked the Secretary of State for the Home Department why the recent appointments to the bench of the Metropolitan Stipendiary Magistrates have not complied with the stipulation that such a magistrate must have practised at the Bar for seven years immediately previous to such appointment.

asked the Secretary of State for the Home Department when and where Miss Sybil Campbell practised as a barrister during the seven years immediately preceding her appointment as a Metropolitan police magistrate, as required by statute; when she last acted as an advocate in a court of justice on behalf of private clients, occupied professional chambers and otherwise practised at the Bar in the sense in which that term is generally understood.

With permission, I will answer Question 13 and Question 15 together.

On a point of Order. I never know what the right formula is regarding the phrase "with permission," but the second Question to which the right hon. Gentleman is referring is in my name, and, if it is my permission that is sought, I would rather have these Questions dealt with separately.

The only object of this procedure is to avoid the answer being read twice.

Miss Campbell was called in November, 1922, and practised at 4, Brick Court, Temple, in the chambers of Mr. Henry H. Maddocks. When in September, 1939, she accepted temporary employment as a civil servant in the Enforcement Branch of the Ministry of Food, she not only kept her name up in chambers but continued to pay contributions to the clerk's salary. There was nothing in the terms of her temporary employment to prevent her from carrying on her profession, and she had, in fact, no intention of cutting herself adrift from her private practice. I am advised that, in these circumstances, Miss Campbell can properly be regarded as satisfying the statutory conditions of qualification for the appointment.

Would the right hon. Gentleman bear in mind that the Question also refers to the appointment of Mr. Wightwick? Was he not a civil servant, and did his appointment comply with the Act of 1838 as regards practice at the Bar? I also do not agree with what the right hon. Gentleman said in his reply.

I understand that his appointment did so comply. If we are going to run the doctrine that if people temporarily give up their normal legal practice as a result of public service, military or otherwise, in case of war, they are to be disqualified, I think we shall do grave injustice.

Is it not a fact that this question would never have been raised at all, had it not been for the appointment of a woman and for the miasma of prejudice which perpetually envelops the mind of the hon. Member for Southampton (Dr. Russell Thomas)?

There have been previous appointments on which this question was raised. It has not been raised with me, before I did appoint a woman.

May I assure the right hon. Gentleman that my inquiry into this appointment has no relation to the lady's sex at all, and ask him whether he does not think that amending legislation is required in order that those who have rendered service in Government Departments and in other capacities during the war, shall come within the statutory qualification; and is he aware of the concern which exists over the apparent tendency to man the judiciary with servants of the Executive?

No, Sir, any suggestion by my hon. and gallant Friend of an attempt to man the judiciary with servants of the Executive is untrue, and capable of resentment, if I were sensitive. There is no such attempt whatever and I see no need for amending legislation. This has been done, and proper legal advice has been given; and not only was legal advice to this effect given to me, but it was given by a previous Attorney-General in another kind of Administration altogether.

Is the Home Secretary aware that this lady has a reputation at the Bar as good as any of the more recent appointments to similar positions?

As I am still enveloped in a miasma, and as the right hon. Gentleman appears to have misled His Majesty, I intend to raise the matter on the Adjournment.

General Election

Returned Evacuees

asked the Secretary of State for the Home Department what arrangements will be made to ensure that persons who return home between 31st January, 1945, and the General Election, such as the 500,000 evacuees from London, will be able to vote.

The two registers to be published on 7th May and 15th October will include in respect of any constituency the names of persons whose addresses on the qualifying dates, namely, 31st January and 30th June respectively—as shown on their identity cards—were in that constituency. Provision is made whereby a person who by reason of the nature of his occupation, service or employment cannot vote in person in his constituency can apply to vote by post as an absent voter within a period of nine days from the date of the publication of the appropriate list. The last date for any such application in the case of the May register was 9th April.

As regards a person who returns home after the qualifying date he may of course vote in person in the constituency for which he is registered, but the existing law does not enable him to vote in the constituency comprising his home since that is not the constituency for which he is registered. At any election it is inevitable that under any system of a fixed date register there will be many persons who, by reason of removal, are unable to exercise their vote, but I realise that the war and the consequential movements of the population have aggravated the difficulties. It is by no means easy to find a solution. Parliament decided that the scheme of continuous registration for which provision was made in the Act of 1943 could not be effectively operated at present and by the Act of 1945 substituted a register compiled by reference to a fixed qualifying date. The matter is receiving further consideration, but as at present advised I cannot see any practicable solution which is not likely to give rise to even greater anomalies.

While I am aware that my right hon. Friend is fully seized of the tremendous importance of this question and that hundreds of thousands of people are probably involved, may I ask whether he would consider, between now and the time when, I understand, he is going to introduce another Election Bill dealing with Parliamentary expenses, that he might have a Clause inserted there extending the period for people who are to be on the absent voters' list?

I am considering whether, if the legislation to which my hon. Friend refers eventuates—about which I cannot be certain—I can find a solution of this problem, and, if so, I would be very happy to make provision in that Bill. But it is a difficult question, and I confess that owing to war-time difficulties there will be a number of imperfections in the May register.

While recognising the great difficulties of my right hon. Friend, may I ask if he is aware that the whole House will co-operate with him in order to see that as few people as possible shall be disfranchised and that everybody who so desires shall have the opportunity to vote?

I am obliged to my right hon. Friend, and I can assure him that it is the wish of the House, as it is of myself and the Government, and as it is our duty to see, that every conceivable person be given the utmost facility to vote if it is at all possible. I am sure that the House will co-operate with me to that end.

Will the Home Secretary consider altering the date from 30th June to 30th August?

I am afraid I cannot at present, but later on, as printing facilities get better, we may be able to advance the qualifying date. We are up against the most shocking difficulty in printing. I hope—touching wood—that the register will appear on 7th May, but it has been an awful difficulty to get enough printing labour and plant to do it.

Can the right hon. Gentleman say to what extent this problem will diminish if the October register is in force before the Election, as there will probably be a substantial increase by that time?

I hope that with every week that passes after the end of the Europeon war, things will get easier. Therefore, I hope there will be a material improvement by the October register, but it would be rather reckless on my part if, even now, I promised that the October register would, be as perfect as I and the House would wish it to be.

Is the right hon. Gentleman aware that there are hundreds of people left off the register, and hundreds more put on in the wrong parishes, and would he give more time to getting adjustments made?

I am not going to dispute whether my hon. and gallant Friend is right or wrong. He may be right but I am in this dilemma, that there was a wish that the register should be available as early as possible in case a General Election became unavoidable and necessary. That being so, I have to contract the dates or hold them within a slight restriction, otherwise the result is that the publication date of the register must be correspondingly later. That is the dilemma in which I am placed.

Would it not be better to delay publication rather than that so many should be left off the register?

Can the Home Secretary say whether, when a claim has been made and the due date has been delayed, there is any further appeal, or anything he can do in the matter?

There are facilities for claims and objections, if I remember rightly, before the registration officer. My recollection is that that is final, and if I am right, I do not see what else one can do. Again the time factor comes in.

War Damage Repair Workers (Voting)

asked the Secretary of State for the Home Department what steps he is taking to enable workers engaged on war damage or other work in Great Britain to vote in a General Election for the British House of Commons.

As I indicated in my reply to the hon. Member for West Fife (Mr. Gallacher) on 12th April, this matter is receiving consideration, but I am not yet in a position to make any statement.

When my right hon. Friend is in a position to make a statement, will he make it as soon as possible?

Questions

Channel Islands (Relief Supplies)

asked the Secretary of State for the Home Department, now that the war in Europe is drawing to a close and that there is more shipping available, if he will consider authorising more food and medical supplies being sent to our people in the Channel Islands; and if a second vessel will now be spared to help these people who are in great need.

The Home Office is in close touch with the International Red Cross, and everything possible is being done to meet the requests for supplies that are conveyed to us. The shipping situation is not so favourable as my hon. Friend suggests, but the House will realise that so long as enemy forces can threaten shipping, and the German garrison remains in the Channel Islands, the problem is not simply one of finding another ship, but involves the arrangement of safe conducts.

Can my right hon. Friend tell us if it is possible for the "Vega" to make more journeys?

I cannot answer for shipping. That is primarily for the Minister of War Transport but I should think that it is very doubtful if it could be done. I should think that we get all out of that ship we can, and it is certainly my wish that we should do so.

Do we get anything like good distribution? Have we real information that these people are getting 95 per cent. of the stuff that is going in? Is some of it going to the Germans? Has my right hon. Friend any idea about that?

It is no good my pretending to have detailed knowledge about this as we are not in possession of these islands and can only pick up such information as comes our way. We are doing the best we can in the circumstances.

Is not the real concern that is felt in this country that fellow subjects of ours are still under the Germans and will not the right hon. Gentleman make the strongest possible representations to the War Cabinet? Why are they not taking the islands?

If the Noble Lord will reflect, he will see that there are two ways of taking the islands. One is to wait until you can take them without material damage; the other is to go in right away without notice, when we should probably inflict great damage on the Channel Islands and many casualties on the islanders.

Will the Home Secretary assure the House that he is doing his utmost to secure the use of a second ship, as the present ship is being used to the extreme limit?

I am doing all I can. I am not the Shipping Minister, and shipping is very tight indeed in the prosecution of the war, but I can assure the House that my only anxiety is to do everything I can for the Channel Islands all the time, and I will do so.

German National (Internment)

asked the Secretary of State for the Home Department, who made representations that Alfred Ignatz Maria Kraus, who came to this country in September, 1944, should be treated as a refugee; and whether he has full information as to the activities of this man during the month he was at liberty.

No such representations have been made and Kraus has in fact not at any time been regarded or treated as a refugee. He has been interned as a civilian alien of enemy nationality. There are no grounds for suspecting that this alien engaged in any harmful activities in this country, but as stated in answer to a previous Question, I was not prepared, on the information obtained subsequent to his arrival, to allow him to be at liberty in this country.

Whilst thanking my right hon. Friend for his reply, may I ask if he has any information as to whether this man was a Nazi and a member of the Reichswehr; and, if so, can he say how it came that he was running loose in this country for a whole month before he was apprehended?

It was admitted, when the War Secretary was questioned about it, that there were irregularities in his arrival. We got track of him as quickly as we could and I put him "inside." Therefore my hon. Friend may take it that he is being safely taken care of and need not have any undue loss of sleep at night owing to his apprehensions about the security of the State.

But is my right hon. Friend quite sure that he has the fullest information about this man, and did this man make a full statement to the Home Office when he was arrested?

I think we know all about him; in fact, the hon. Member would be surprised how much we know about all sorts of things.

Liquor Licences (War-Time Applications)

asked the Secretary of State for the Home Department whether, in view of the expected early ending of the European war, he will instruct licensing authorities to grant licences, or to grant transfer of licences, only to ex-Service men and women and civilians compulsorily displaced by war circumstances, for a period to the end of the Japanese war and 12 months afterwards, so that such persons may be able to establish themselves and build up a goodwill.

I assume that this question refers to licences for the sale of intoxicating liquor. The grant and transfer of such licences are placed by law within the discretion of the licensing justices, subject to an appeal to Quarter Sessions in the case of transfers; and it is not open to me to instruct justices as to the exercise of their judicial discretion. I am, however, in full sympathy with the object of my hon. and gallant Friend in drawing attention to the matter, and I do not doubt that the licensing justices will, in accord with national feeling, look sympathetically upon applications from any persons in the categories mentioned who have suitable qualifications. Where such applicants, as is often the case, must first secure from the owners of the licensed premises an offer of a lease, or of an appointment as manager, I believe they also will prove sympathetic.

Is the right hon. Gentleman not aware that in recent years most of the licences referred to, particularly off licences, have belonged to the brewers and not to the individuals, and that is the great danger?

Could my right hon. Friend ask the hon. Member why he is so interested in the drink trade?

Police Force, Leeds

asked the Secretary of State for the Home Department whether, in view of the increase in house-breaking and other crime in Leeds, he will now arrange for an increase in the police force in that area.

Any question of an increase in the establishment of a police force is, in the first instance, a matter for consideration by the local police authority. I may say, however, that the increase in crimes against property to which my hon. Friend refers is not peculiar to Leeds and there would, therefore, be no justification for increasing the strength of the Leeds City police Force at the expense of other Forces, as would be necessary if any adjustment were to be made before it is possible to resume recruitment for the police service generally.

Does my right hon. Friend know that policemen in the Leeds reserve have been transferred to other areas, resulting in a considerable reduction in the reserve in Leeds, and there has been an epidemic of burglaries and other crimes there during recent weeks owing to this fall in the number of policemen?

There has been crime everywhere and there have been difficulties everywhere. If the Leeds police authority make representations to me, I will see what I can do, but it is difficult to transfer policemen from one area to another when they are all rather tightly placed.

Shop Hours and Conditions (Committee)

asked the Secretary of State for the Home Department whether he has given further consideration to the representations made on behalf of trade organisations for the amendment of the Shops Act to make latest closing hours 7 p.m. with 8 p.m. on late night, instead of 8 p.m. and 9 p.m. as at present; and if he has any statement to make on the matter.

The Government have been giving attention not only to the closing hours of shops but also to other related questions, including the hours of employment of young persons and the question of the further regulation of health, welfare and safety conditions in shops and other non-industrial premises, and they have decided to appoint a Committee to examine these matters. I am not yet in a position to announce the composition or precise terms of reference of the proposed Committee.

Will the Home Secretary accelerate as much as he can the proceedings of the Committee, so that a decision may be reached at the earliest possible moment?

Yes, Sir, but my first problem will be to accelerate the appointment of the Committee and I will do all I can in that way.

Travel to France (Exit Permits)

asked the Secretary of State for the Home Department the reasons for which he issued exit permits to the Dowager Duchess of Sutherland and her personal maid for the purpose of travelling to France.

British subjects who were normally resident in France before the war are eligible for exit permits to enable them to return to their homes; and these two cases were dealt with on this basis.

Is it not surprising, if applications of this nature are granted with such alacrity, that applications of hon. Members to visit liberated countries are not granted in the same way?

Not in the least. I think if people had their permanent home in France or Belgium before the war, every hon. Member with a sense of fairness would agree that they are entitled to go back.

Residence Permits, Northern Ireland

asked the Secretary of State for the Home Department whether he is now in a position to rescind the Emergency Order of 1942, as it applies to Northern Ireland, whereby residence permits must be obtained for all those who were not residing in Northern Ireland before 1st January, 1940.

Can the right hon. Gentleman state to the House if the emergency still exists in Northern Ireland so that permits have to be continued? Is he further aware that the ex-Service men, on return to their own homes there, are compelled to take out a residence permit before they can go back to the towns to which they belong?

It depends where their homes were before, but I think Northern Ireland is entitled to these powers. She will be facing some difficult economic problems with the rest of us, and I think this Parliament must take an interest in enabling Northern Ireland to protect itself within reason.

Is the right hon. Gentleman aware that it is the ex-Service men who enlisted in Northern Ireland of their own accord who, on returning to their own homes, are asked to take out a residence permit in exactly the same way as any foreigner going into the country?

Perhaps the hon. Gentleman will let me have particulars about that. I should have thought if they were already residents there, they would have been all right.

Taxicabs, London (Defective Speedometers)

asked the Secretary of State for the Home Department if he is aware that taxicabs with defective speedometers are sometimes passed as fit for service by the police authorities in London and that owing to the non-working of this instrument a driver is placed at a disadvantage when charged with exceeding the speed limit; and will he take steps to ensure that taxicabs are not passed as fit for service when it is known at the time of examination that the instrument is out of order.

In view of the shortage of labour and spare parts a few taxi-cabs have been allowed to continue in service pending the repair of faulty speedometers. The alternative is to withdraw the vehicles from public service, thus reducing the number of taxis available to the public, and depriving the drivers of their means of livelihood. The drivers are experienced and should not have any undue difficulty in keeping within the speed limits.

Buchenwald Camp Inmates (Admission to United Kingdom)

asked the Secretary of State for the Home Department whether surviving inmates of the Buchenwald camp, whose only relatives have homes in this country, will be allowed to come to this country to join their relatives.

I cannot give any general undertaking of the kind suggested, but I should be prepared to consider any individual case sympathetically on its merits.

Would my right hon. Friend, whose personal good will in these matters is beyond any question, remember that in these cases the hope of rejoining their families is the only thing these people have left in the world; and will he see that no general principle adopted previously is allowed to stand in the way of dealing with suitable cases of this kind?

I can assure my hon. Friend that I will certainly keep those points in mind.

Would my right hon. Friend bear in mind the fact that there are a great many other camps where similar conditions prevail?

Nursery School Teachers (Training)

asked the Minister of Education how many nursery school teachers are now being trained in existing training colleges and in emergency training colleges.

No training college or course is devoted solely to training for teaching in nursery schools, and it is impossible, without specific inquiry, to say what numbers of students are at present including training for nursery school teaching in their courses.

I realise that no colleges are specifically or entirely given up to it, but would my right hon. Friend try to get the information? It ought not to be very difficult, because they are perfectly straightforward statistics.

These straightforward statistics are all very well, but we have to have the man-power to collect them, and as matters are to-day I do not think we can find the necessary labour to do that. I may say that 10 permanent colleges are providing courses for nursery school work in their training; that two emergency colleges which are just being opened will provide similar courses and that there will be others who will do the same. We must see when a student takes on training what the adaptability and suitability of that student are, and then put him on to the course that suits him best.

Housing

Jerry-Building

asked the Minister of Health what steps have been taken to eliminate jerry-building.

A voluntary scheme for the certification and guaranteeing of houses constructed to an approved standard has been formulated by the National House Builders' Registration Council. The council have applied for the scheme to be approved by me under Section 5 of the Building Societies Act, 1939, and I am at present in communication with them on the subject.

Will my right hon. and learned Friend make it quite clear that prefabricated houses will not in any way come under the heading of "jerry-built"?

Bombed-Out Persons (Reserved Accommodation)

asked the Minister of Health whether he will release the pool of empty houses and flats at present held as a reserve for bombed-out persons so that this accommodation may be used by overcrowded families of Service men at the discretion of local authorities.

I assume that my hon. and gallant Friend is referring to the London area. In this area, no houses or flats in a habitable condition are held empty as a reserve for bombed-out persons, but are at once offered to homeless families, of which there is still a considerable number waiting to be rehoused. The homeless must clearly have priority over the inadequately housed.

Building Industry (Man-Power)

asked the Minister of Health if he is satisfied that the housing programmes drawn up by his Department for execution by the Ministry of Works and the local authorities for the first two post-war years, can be completed by the professional and operative members of the building industry that will be avail able from existing A and B demobilisation schemes of the Ministry of Labour in addition to those from any other sources.

I have every hope that the building industry will have the capacity to handle the housing programme in the first two post-war years.

Has my right hon. and learned Friend made definite calculations as to the number of men required to undertake this enormous programme? It is a matter of fact, and not of hope.

The programme has been based on estimates. There cannot be definite calculations, but we are hoping to improve on the present estimate.

Is my right hon. and learned Friend sure that a proper balance between all the different types of professional and operative people will be available to ensure the satisfactory fulfilment of his programme? Quite a lot of people with experience do not agree with him.

Requisitioned Dwelling Houses (Release)

asked the Minister of Health, in view of the shortage of dwelling-houses, what steps he is now taking to secure the release of domestic premises at present being used either as stores or offices.

The release of dwelling-houses held for the purposes mentioned in the Question is regarded as a matter of first priority, and the Departments concerned are making every effort to return them to normal use as quickly as possible.

Is my right hon. and learned Friend in consultation with his colleagues, particularly the Secretary of State for War, with regard to military establishments which may be turned over for this purpose?

I can assure my hon. Friend that I am, and that my right hon. Friend the Secretary of State for War is giving close attention to it.

Will the Minister kindly say what he means by "first priority," in view of the fact that the Ministry of Labour does not consider it as being anything like a first priority?

This is a question of the release of premises from requisitioning, and I said that the release of ordinary dwelling houses has first priority in derequisitioning.

asked the Minister of Health at what date houses in Lea Bridge Road and Whipps Cross ceased to be actually used for accommodating Service personnel; when these houses were notified as being vacant for civil accommodation; how long they have now been vacant; how many persons have been enabled to find shelter in any of these houses; and why more of them have not been occupied.

Four houses in Lea Bridge Road were taken over by my Department from the Military on the 11th November, 1944, and five houses at Whipps Cross in September, 1944. They have suffered heavy war damage and have not yet been used for civilian occupation. It has not so far been possible to transfer labour for work on these unoccupied houses from the more urgent work of repairing occupied war damaged houses.

Will everything be done to assist the local authorities to put these houses in order?

Everything is being done to provide the maximum of labour for the area in question.

Is my right hon. and learned Friend aware that these are what are known as C (b) houses, that the orders for the repair of C (b) houses have only just been issued, and that the hon. Member for West Walthamstow is the chairman of the Committee responsible for them and therefore they are in good hands?

House Prices

asked the Minister of Health if it is proposed to raise the value of a house that may be purchased under the terms of the Small Dwellings Acquisition Act, to a sum above £800, so that the operation of the Act may not suffer as a consequence of increased house purchase prices.

Sites (Acquisition)

asked the Minister of Health what progress has been made in the matter of housing sites in the area to which his attention has been drawn, and concerning which the borough council reported in July last that preliminary estimates amounting to £346,125 had been approved for the acquisition of land; whether the council's valuers were instructed to proceed with negotiations with the landowners; and in what proportion of cases the council valuers have been unable to come to terms with the owners without the use of compulsory acquisition powers.

43 and 44.

asked the Minister of Health (1) whether he is aware that the Strood, Kent, Rural District Council has arranged to purchase housing sites at Cobham from the War Department and at Cooling and Casiton from the Ecclesiastical Commissioners; and what are the area, the purchase price and the previous rateable value in each instance;

(2) whether the Strood, Kent, Rural District Council has succeeded in acquiring sites at Luddersdown, Meopham, Shorne and Stoke; and what are the area, purchase price and rateable value of each site.

asked the Minister of Health if the Tonbridge Rural Council has yet succeeded in acquiring any or all of the following housing sites: Ashurst Road, Ashurst, 0.50 acres, The Green, part of Tatty's Farm, Maidstone Road, Matfield, 2.175 acres, Carpenter's Lane, Hadlow, 2.5 acres, Furnace Lane and Gibbett Lane, Horsmonden, 4.46 acres, and Furnace Lane, Lamberhurst, 3 acres; what price has been agreed in each case and what was the previous rateable value; and whether he has approved the purchase of the following sites: Ringden Meadow, Paddock Wood, 14.52 acres, Crockhurst Street, Tudeley, 1 acre, Mount Pleasant, Hildenborough, 2 acres, Riding Lane, Hildenborough, 0.92 acres, High Street, Bidborough, 1.50 acres, stating the price proposed and the previous rateable value.

asked the Minister of Health what is the total area of land required by Eastbourne Town Council for housing purposes in addition to three acres at the junction of Churchdale Road and Northbourne Road; what area of this land has been acquired; and the purchase price and the previous rateable value.

Public Health

G.W.R. Medical Fund Society

asked the Minister of Health if he will give an assurance that the special work carried out by the Great Western Railway Medical Fund Society will be furthered and extended in his proposals for the new health service.

The special organisation and experience of this Society will certainly not be overlooked, but I can give no specific assurances at this stage.

Is my right hon. and learned Friend aware that there is very real anxiety in Swindon lest the unique work of this Society, which differs from others, will be restricted in future? Will he not give an assurance that its work will not be frustrated under any of his new proposals?

I thoroughly appreciate the good work which the Society has done, and in many directions I feel that that good work can be carried further.

Medical Officer, Chatham (Call-up)

asked the Minister of Health whether he has considered the protest by the Chatham Borough Council against the possible calling up of Dr. J. C. Sleigh, Medical Officer of Health for Chatham, for civilian duties attached to the R.A.M.C.; and, in view of the shortage of doctors in the district and the urgency of the matter, what action he proposes to take.

Yes, Sir. This matter has been fully considered in consultation with the Central Medical War Committee, who have recommended that Dr. Sleigh be called up The need for officers experienced in public health and hygiene for the Civil Affairs Branch of the R.A.M.C. is very pressing and, though some sacrifice of services or of standards may be unavoidable, I am advised that alternative arrangements for carrying on Dr. Sleigh's work can be made. I regret that in these circumstances I cannot oppose Dr. Sleigh's recruitment.

Is my right hon. and learned Friend aware of the very high infantile mortality which is at present prevailing in the Medway towns, and does he not think that the health of British children should come before the health of German civilians, who have always done what they could to suppress life instead of saving it?

It is not merely a case of the health of German civilians. My hon. and gallant Friend must realise that the borough of which Dr. Sleigh is medical officer is one of three towns which are extremely close together — Chatham, Gillingham and Rochester, There, the assistant medical officers will be reduced only from six to five by this action, and I am advised that the question which my hon. and gallant Friend has raised will not really be affected.

Medical Students

asked the Minister of Health the average number of medical students accepted at the teaching hospitals for the three years prior to the war; and how many it is proposed to admit this autumn.

The number is 1,462. The number of admissions for the session beginning next autumn is not yet known, since the medical schools will not complete the selection of candidates until later in the year.

Can the Minister say whether the number of admissions will be substantially larger than the average fox pre-war years, in view of the need for more doctors under any national health scheme?

The average figure for the three years before the war was 1,462, including 226 women, and admissions for the present academic year were also 1,462, including 374 women. As I have indicated before, one cannot increase automatically or readily the numbers in medical schools. There is great difficulty in obtaining staff, but we are doing all we can.

asked the Minister of Health what steps he is taking to enable would-be women medical students, who have been refused admission to the teaching hospitals this autumn, to obtain medical training.

I would refer my hon. Friend to the reply given to my hon. Friends the Members for West Fulham (Dr. Summerskill) and South Tottenham (Mr. Messer) on 29th March, in which I dealt fully with this matter.

Will the Minister give further consideration to making use of public hospitals for this purpose, in view of the fact that girls are disappointed at not being able to follow their medical training?

Does the Ministry intend to ignore the demands of women medical students who are asking for accommodation in hospitals? In view of the fact that there is a shortage of doctors, does he intend to treat these students as redundant labour?

I am not ignoring any demand, but I cannot accede to a demand for medical teaching when the teachers are not there.

Christian Science Nurses

asked the Minister of Health why certain individuals attached to the Christian Science movement have been permitted to call themselves nurses, in view of the recent Act which limits the description "nurse" to those suitably qualified.

My hon. Friend is under a misapprehension. I have not yet brought into operation the provisions of Subsection (1) of Section 6 of the Nurses Act, 1943, which will restrict the use of the title "nurse," or made regulations under proviso ( b ) to that Sub-section. When I do so, it is my intention to require Christian Science nurses to describe themselves as "Christian Science nurses."

Is the right hon. and learned Gentleman aware that the whole purpose of that Act was to protect State registered nurses and protect the public from impostors, and is he aware that in this specially privileged group, the Christian Science group, the women have no nursing qualifications whatsoever?

As I told the House on an earlier occasion, an assurance on this matter was given by my predecessor, and I think it was very largely based on the fact that the House, when the Public Health Act, 1936, became law, gave statutory recognition to Christian Science nursing homes. I think the object of the Act will be sufficiently and properly met by a provision that Christian Science nurses should be required so to describe themselves.

Is my right hon. and learned Friend aware that those who, like myself, are interested in the lay administration of hospitals are very anxious to see this provision brought into operation as soon as possible so that the points which my right hon. Friend has made may be clear to the public?

There were difficulties about bringing the regulations into operation, particularly in relation to an omission in the drafting of the Act; but it is my hope to make the regulations at an early date.

Is the right hon. and learned Gentleman aware that Christian Science nurses do no harm to anybody, which is more than can be said of quite a lot of doctors?

Is the right hon. and learned Gentleman aware that these people are not nurses, not scientists and not Christians?

Water Supply, Hanbury

asked the Minister of Health whether, in view of the fact that there is no piped water supply at Hanbury, Bromsgrove, Worcestershire, and that the wells run dry after a few weeks drought, he will take active steps to assist the Hanbury Parish Council in providing a piped water supply for the residents in this district.

The provision of an adequate water supply to the parish of Hanbury is the duty of the Droitwich rural district council and not of the parish council. Whilst I shall be glad to consider any scheme for improved supplies which the rural district council may submit to me, I am bound to add that improvement of water supply conditions generally in rural areas must await the time when materials and particularly labour can be made available after the end of the war in Europe.

Is my right hon. and learned Friend aware that there is no piped water supply or any adequate supply of any sort in this place, and will he assist me in seeing that there are no watertight compartments in Whitehall?

There should be no watertight compartments in my Department, but the rural district council has not yet put up a scheme.

Hospital Staff Appointments (Service Applicants)

asked the Minister of Health whether he can give an undertaking that, except in cases where the circumstances render it imperative, permanent appointments on the staffs of hospitals under his Department, or any health services of the country, will not be made so long as medical officers now serving in the Forces are not in a position to compete for such appointments on terms equal to those enjoyed by medical practitioners who are not serving in the Forces.

So far as concerns medical appointments within the sphere of my Department, the policy of approving such appointments only on a temporary basis under present conditions is being closely observed.

Will my right hon. and learned Friend look very carefully into this matter, because a certain number of appointments are believed to have been made to the exclusion of the possibility of competition from officers who are now serving?

I have told my hon. and gallant Friend what is my intention and I believe to be my practice, but if he will bring to my attention any particular case, I will of course look into it.

Is the right hon. and learned Gentleman aware of the widespread dissatisfaction existing among those serving in the Forces regarding two recent appointments of medical officers of health at Cambridge mental hospital and at Aberdeen mental hospital?

Emergency Nurseries

asked the Minister of Health whether he will maintain a direct grant for emergency nurseries over the next two years and include young children in such nurseries, whether their mothers are engaged on war-work or any other work.

Children of working mothers are admitted to war-time nurseries whether the mother is engaged on war work or on other work. The need for war-time nurseries on their present basis must depend on the need for the employment of women with young children, on which I must be guided by my right hon. Friend the Minister of Labour and National Service. I am considering with my right hon. Friend the Minister of Education what interim arrangements should be made for nursery provision after the war-time nurseries cease to be required in connection with production purposes, but are still needed for other reasons; but I am not yet able to make a statement on the subject.

Will the right hon. and learned Gentleman accelerate that decision before the staffs have entirely gone away?

Is it not the policy of the Government to put the children from two to four in nursery schools? I hope they will not depart from that even in this emergency stage because most people want children under two to be home with their mothers. That is what they should aim for.

Questions

War Workers (Billeting Allowance)

asked the Minister of Health if he is satisfied that the 5s. a week allowance paid to householders accommodating essential war workers, under notices served under Regulation 22 of the Defence Regulations, is now adequate; and whether he will arrange for a suitable increase in this allowance.

The householder provides lodging only with reasonable access to water and sanitary conveniences, and 5s. a week is in my view adequate for this minimum requirement.

Does the Minister know the views of the local authorities in Britain, and is he aware of the representations which have been made that 5s. is not enough?

I am not aware of the views of all the local authorities, but this is a case of the provision of accommodation, and water and sanitary requirements are not matters which are affected by any rise in the cost of living, or anything of that kind.

Is my right hon. and learned Friend aware that this charge is less than the charge made by a Salvation Army common lodging house? Does he consider that 5s. is sufficient?

This is, of course, the same figure as is applicable in the case of adults billeted under arrangements made by my Department, where lodging only is provided. Quite often more than one person is billeted in one room and voluntary agreements are often made for the provision of food or for facilities of one kind or another, in return for additional payment.

Coastal Areas (Rehabilitation Grants)

asked the Minister of Health how many people have applied for the £150 grant allocated to the coastal area from the Humber to Cornwall for rehabilitation; what steps have been taken to publicise that grant locally; and what reports local authorities have been asked to give the Ministry on the distribution of this loan.

The administration of the scheme, including arrangements for local publicity, is in the hands of the councils authorised by me to operate it subject to the terms of a memorandum circulated to them, and I am not aware therefore of the number of applications for loans received by them. Councils are required, after an initial advance has been made to them on account, to submit monthly returns showing the total amount of loans issued by them during the preceding month in accordance with the memorandum, and the balance of the advance outstanding.

Can my right hon. Friend give any figures for the month so far?

Enemy Rocket Attacks

asked the Prime Minister whether he is now able to make any statement with regard to the enemy rocket attacks.

While thanking my right hon. Friend for his reply, may I ask him whether he can give an assurance to the House that there is no prospect that they are likely to be resumed?

It is my duty to record facts rather than indulge in prophecy, but I have recorded certain facts with a very considerable air of optimism which I trust will not be brought into mockery by events.

Should not we offer congratulations to the Royal Air Force for stopping these rocket bombs?

We must offer them to the Royal Air Force for what they did, we must offer them to the Antiaircraft gunners for what they did, but we must not forget it was the British Armies that took the sites.

asked the Prime Minister when he expects to be in a position to make a comprehensive statement on the V 2 activities against London and Southern England.

Later on an account of this ordeal so valiantly borne—of which the brunt fell on London in an almost overwhelming degree—should certainly be prepared.

Can my right hon. Friend say when he is likely to be in a position to make a fuller report on these rockets?

I have got to make a fuller report on all sort of things in the near future, and I am not sure the rockets will stand in a very high priority.

Victory Day (Observance)

asked the Prime Minister if, in order to promote a sense of partnership among the members of the United Nations, he and the other leaders of the Great Powers will suggest that Victory Day be celebrated on the same day in each country.

May I ask whether this matter will be considered and whether in that consideration account will be taken of the feeling of many of us that it would be a mockery for us to ring joybells and feast while our fellow countrymen in the Channel Islands are still under the German heel and while Holland and Norway are suffering severely from German tyranny?

That is one of the reasons why I think great caution should be observed in any celebration. However, great events might occur which, even if they did not affect every particular locality or point, would nevertheless stir the people here, and they might indulge in some few moments of rejoicing before turning to their other heavy tasks.

Would it not equally be madness in this country for us to ring joybells and go feasting while men are going out to Burma and are still fighting in Burma?

It would be very foolish to have any celebrations or speeches made or joybells rung about the defeat of Germany—after all, a considerable event—without at the same time public men of every party making it perfectly clear that our war with Japan goes forward.

Agriculture

Watercourses (Maintenance)

asked the Minister of Agriculture whether he will consider introducing legislation to give to county councils greater powers than they already possess to enable them to provide a service for keeping the watercourses clear or to require the occupiers to keep them clear.

The Joint Parliamentary Secretary to the Ministry of Agriculture
(Mr. Tom Williams)

The existing power of county councils in regard to the maintenance of watercourses will be reviewed in connection with any legislation it may be decided to introduce for amending the Land Drainage Act, 1930.

Is my right hon. Friend not aware that prevention is better than cure, and will he see that the county councils are provided with adequate powers to deal with these matters in future? This is a very important matter.

County Institute, Preston (Diploma Courses)

asked the Minister of Agriculture if he will reconsider his decision to discontinue the provision of diploma courses at the County Institute of Agriculture, Hutton, Preston, in view of their value for many Lancashire students who are anxious to take up careers in dairying; and, since the institute is adequately equipped and staffed, permit these courses to be taken until the whole position of dairying courses is clarified.

My right hon. Friend has not decided to discontinue the provision of diploma courses at Hutton. They were suspended in 1940. He is not prepared to agree to their resumption, in face of the Luxmoore Committee's recommendation against overlapping between farm institutes and agricultural colleges, until the problem has been further considered by the two committees now sitting under the chairmanship of Dr. Thomas Loveday.

India

Air-Conditioning Plant

asked the Secretary of State for India when he expects to have air-conditioning plant installed in the residences and offices of political officers in the Persian Gulf.

I have no information on the subject, but am consulting the Government of India. Air-conditioning plant is in very short supply. The Government of India require large quantities of it for the improvement of conditions in military hospitals and troop trains, and these requirements will necessarily take priority over civilian needs.

Is my right hon. Friend aware that for many years commercial undertakings have had air-conditioning in this part of the world not only for their employees but also for their poultry? Is it not possible for employees of the State at least to have this facility to make them more efficient?

Franchise

asked the Secretary of State for India whether, before coming to any decision about the transfer of power now vested in the Central Government of India to a Government based on certain Indian parties, he will consider the ordering of fresh elections for the Central Legislature on a more widely extended franchise than that which exists at present.

I note the hon. Member's suggestion, but would remind him that any extension of the present franchise is likely to raise controversial issues and would also involve a great deal of preparatory work in India.

In view of the fact that the franchise is on a very restricted basis, is it not time that we looked into the matter very seriously?

If a new state of affairs arises, many matters will have to be considered. I am only pointing out that this particular matter could not be dealt with at all expeditiously.

San Francisco Conference (Representation)

asked the Secretary of State for India what is the status of India at the forthcoming San Francisco Conference; and by whom the Indian representative was nominated and appointed.

The status of India at the San Francisco Conference is the same as that of the other United Nations taking part. The selection of Sir Ramaswami Mudaliar and Sir Firoz Khan Noon as Delegates was made by the Governor-General in Council. Sir V. T. Krishnamachari agreed to serve as a third Delegate at the invitation of the Crown Representative.

It is not a matter for the Legislative Council, but for the Executive of the Council.

Enemy Atrocities (Publicity)

asked the Secretary of State for India if he is satisfied that adequate publicity is being given throughout India to the brutality and atrocities of Germany and Japan, so that the people of India may realise what would have happened to India if Germany and Japan had been victorious.

The Government of India are anxious that the widest publicity should be given to these atrocities. They have been supplied at their own request by radio and air mail with a comprehensive selection of photographs of Nazi concentration camps. In addition to the reports which reach India through Press channels, the Ministry of Information have furnished the Government of India by cable with full accounts for publicity purposes. I am informed that the Indian Press has shown itself fully alive to this aspect of German and Japanese aggression.

While this publicity may be very desirable, would it not be better if the Indian political leaders were released?

Care of Prisoners (Allied Warning to Germany)

( by Private Notice ) asked the Prime Minister whether his attention has been drawn to the anxiety felt in many quarters because the Allied warning to Germany about the care of prisoners appears to be limited to Allied prisoners of war, internees and deported citizens of the United Nations, and whether he will make it clear that its scope extends to all prisoners in Nazi hands of whatever race or origin, and in particular to Stateless Jews and German and Austrian political prisoners.

The Allied warning to Germany about the care of prisoners is not in principle limited to Allied prisoners of war, internees and deported citizens of the United Nations. Its scope extends to all prisoners in Nazi hands, of whatever race, origin or religion, including Stateless Jews and German and Austrian political prisoners who have suffered as the result of sympathy with or activities on behalf of the cause for which the United Nations are righting. His Majesty's Government, in common with other Governments of the United Nations, have repeatedly declared their intention to hold enemy authorities responsible for the maltreatment of persons who have been imprisoned on grounds of race and religion.

I must add that in framing this answer I have not had time to consult other Allied Governments upon its actual terms. But I cannot conceive there is the slightest difference between us on the main principles.

Is the right hon. Gentleman aware that his answer will afford unspeakable relief in many quarters where great anxiety has been felt?

Does this statement cover those Italians who have been employed by the Germans and who are in sympathy with the United Nations?

Business of the House

The Business for next week will be as follows:

Tuesday—Second Reading of the Education (Scotland) Bill and Committee stage of the necessary Money Resolution.

Wednesday—Committee stage of the Requisitioned Land Bill.

Thursday—Report stage of the Budget Resolutions and Second Reading of the National Loans Bill. Afterwards we hope to conclude the Committee stage of the Requisitioned Land Bill.

The House must help us in these matters if we want to have time to discuss anything that may come up. That is always a thing to keep in view. We must get through the machine work.

Friday—We shall make further progress with the Income Tax Bill and take the Second Reading of the Forestry Bill and Committee stage of the necessary Money Resolution.

Here I may say that we really ought to be able to compress the finishing discussions on the Income Tax Bill so as to give time for the Second Reading of the Forestry Bill.

During the week we shall ask the House to approve the Fish Sales (Charges) (No. 2) Order and the Milk Marketing (County of Banff) (Charges) Order.

While fully appreciating the necessity for getting through the Business as expeditiously as possible, may I ask whether the right hon. Gentleman is aware that there is a reasoned Amendment to the Forestry Bill on Second Reading; and whether he will bear in mind that it is not quite such a non-controversial Measure as it may appear to be at first sight, and see that it does have proper consideration and sufficient time on the Second Reading?

I really think there is not very much more to be fought out on the Income Tax Bill. Therefore, I hope it will be over in an hour or so. That will give quite a good run for the Forestry Bill and the line of difference which may emerge will no doubt be focused in the Amendment.

May I ask the Prime Minister whether he will hold over the Money Resolution in connection with the Scottish Education Bill until a later stage, because one of the big questions that will come up on the Second Reading and the Committee stage will be the question of finance. It is a very difficult question.

I am affording a full day for this Debate, and while I am the last person to underrate the importance of the Money Resolution and considerations which may arise upon that, I could not promise any special day.

I am not asking for a special day, but is the Prime Minister aware that there is a certain fixed allocation for Scotland, that the Scottish authorities are not in agreement with the fixed allocation, and that they want it changed, and it would be very bad if the Money Resolution were passed before we got to the Amendments on the Committee stage dealing with this fixed allocation?

We must get the Bill to the Committee on Tuesday next—we really must—so that they can get at loggerheads about it, but I am quite ready to consider, if there is a general wish among the Scottish Members for an extension of time on Tuesday, affording such an opportunity, even though there would not be a large majority of the House in favour of it.

As regards the Business on Friday, could my right hon. Friend give an undertaking that if the proceedings on the Income Tax Bill appear likely to go on for any substantial time, the proceedings on the Income Tax Bill will be sacrificed rather than those on the Forestry Bill?

If I were a Latin scholar I would say solvitur ambulando —[ Interruption ]—there seems to be a difference of opinion about the end of the word. I certainly would not commit myself to a decided view either way. We had better see how we get on. The main point remains that we want to get the Forestry Bill and the Committee stage of the Money Resolution. Whether the Income Tax Bill could be adjourned if the discussion becomes too lengthy or not, I cannot say at the moment—I am an amateur in these matters, and my boss is in San Francisco—but if we can get it out of the way, it would be a great help.

Can the right hon. Gentleman give any indication of when we are likely to have the Committee stage of the Family Allowances Bill?

This statement deals only with next week's Business. A later announcement will be made upon the point raised by my hon. Friend.

Can the right hon. Gentleman state whether the House is likely to have an early opportunity of debating the White Paper recently issued concerning the report on the Rent Restrictions Committee?

Can the right hon. Gentleman say when the report of the Parliamentary delegation to the camp at Buchenwald is likely to be available to hon. Members and also whether the photographs, if any were taken, are to be published?

I cannot speak now about the photographs, though it seems to me a very wide selection has been published in the daily Press. I cannot speak about the photographs in regard to time; anything the House wishes to see will not be held from it on account of its revolting aspect, but so far as the report is concerned, it is being prepared by trusted Members of both Houses, and of course their report will be laid before the House at the earliest moment, which I think will be to-morrow. I have only read a portion of it myself. It seems to be of a most painful character and is deeply interesting.

May I ask whether the right hon. Gentleman has given consideration to a suggestion made some days ago that other Members of Parliament should be given an opportunity of seeing conditions, if not in a concentration camp, at any rate on the Western Front?

I would have to be satisfied that there is a general desire. I am quite sure that General Eisenhower would meet any wishes we put forward in this matter. But there is a lot going on; troops are moving very fast and very far, and great movements are in progress. Besides that, masses of prisoners are being rescued and others in greater numbers are being taken. All these have to be fed and moved across roads already crowded, and I would not like to ask too much of General Eisenhower. I am certain that if the House wishes it very much, such a request would be granted.

Can the right hon. Gentleman say whether there is likely to be an opportunity for a Debate on Bretton Woods?

I would certainly deprecate discussing that at this moment, especially during next week.

House of Commons Library (Reorganisation)

I desire to ask you, Mr. Speaker, a question of which I have already given notice. Have you any statement to make as regards the reorganisation of the Library of the House of Commons?

Yes. For some time I have been considering the problem of our Library and I have received a unanimous report from the Library Advisory Committee suggesting a complete scheme of reorganisation, so as to bring it up-to-date with modern standards and to fulfil adequately the requirements justifiably expected of it by hon. Members. I therefore suggested to the Leader of the House that a Select Committee be appointed to consider this scheme. This might be thought to involve unnecessary delay, but I think the time spent might well prove a saving in the long run, because the proposals of any scheme must fall as regards some aspects within my province, and as regards others within that of the Commissioners who regulate the Offices of the House of Commons, and these proposals ought not to be dealt with separately but as part of a single connected whole. I am glad to say the Government have agreed to the appointment of a Select Committee and I hope that this will appear to-morrow on the Order Paper, and I hope also that the proposal will commend itself to the House.

Domestic Coal Supplies (Price Increase)

I should like, with the permission of the House to make a statement on coal prices and on the supply of house coal in the next twelve months. Hon. Members will recall that in the recent Command Paper on the operation of the Coal Charges Account it was stated that a debt to the Exchequer of £25,750,000 had been incurred in financing coal production. To provide funds for repaying this debt I propose to increase the price of coal as from 1st May by 3s. 6d. per ton. There will be a similar increase in the price of domestic coke. The decline in colliery output must also be reflected in the quantities of solid fuel available for domestic consumption over the next 12 months. The demand for the larger sizes of coal normally consumed by the householder continues at a high level; in particular, the requirements of the railways and public utility services must be met. When these requirements have been met I estimate that the total quantity available for domestic consumption will be less by some 5 per cent. than last year.

In order that each household may be aware, as early as possible, of the supplies available to it, I am announcing to-day the maximum quantities which may be acquired during the next 12 months. To ensure that the reduced supplies shall be spread as equitably as possible I have decided to alter the basis of these restrictions. In the past the permitted maximum has each year allowed the supplier a margin within which he had discretion, according to the supplies available. I have now considerably reduced this margin, so that the permitted maximum shall be more closely related to the average available supply. Consumers who need more than the average must obtain a licence from the local fuel overseer.

The restrictions will, therefore, provide that the maximum quantity of coal which may be obtained without licence from May, 1945, to April, 1946, inclusive, will be 50 cwt. in the North and 34 cwt. in the South. These quantities should, with care, be sufficient for those who have alternative means of heating and cooking, but additional quantities will be made available under licence to those who depend entirely on solid fuel, or whose needs are above the average. Full details will be given in the Press. Those who have the necessary space should stock during the summer, but stocking in excess of the quantities allowed in each period must be done under licence. Consumers who have obtained their full annual quantities in this way may not, of course, obtain any further supplies until after the end of April, 1946. Forms of application for stocking licences will be obtainable from local fuel overseers. As regards coke and other boiler fuels, the amounts which will be available to consumers for the twelve months will be two tons for the whole country, the maximum permitted quantities, except under licence, being one ton during the period May to October and one ton during the period November to April.

In view of this unexpected announcement of these very drastic proposals, would it not be desirable to defer the final decision upon them, particularly as regards the increase in the price of coal, which is bound to affect industry as well as concerning domestic consumers, until the House has had an opportunity of considering the matter? Is my right hon. and gallant Friend aware that during the Budget Debate this week the Chancellor of the Exchequer referred to rising prices and the possibility of inflation, and is it not desirable to consider this coal question in relation to the general national economy? Will the right hon. and gallant Gentleman not consider holding up this matter for a week or two at any rate, in order to enable the House to express an opinion, particularly as there have been several rather high increases in the price of coal?

I am afraid I could not accept my hon. Friend's suggestion, because it is the policy of the Government, and I think the right policy, that this industry should not be subsidised, and any delay in introducing this change, particularly at this time of year, will have a very bad effect. In regard to the general question of prices and the reference made to the speech of my right hon. Friend the Chancellor of the Exchequer, I would point out that the increase in price which I am now suggesting will bring the retail price of coal to 50 per cent. above its pre-war level, which compares favourably with prices as a whole.

Did my ears deceive me or did the right hon. Gentleman really say that there was to be a further increase of 3s. 6d. a ton after all the previous increases? It seems an extra large amount.

I can only repeat what I told my hon. Friend the Member for Seaham (Mr. Shinwell) that with this increase the retail price of coal is only 50 per cent. above its pre-war level, which compares very favourably with prices generally.

My right hon. and gallant Friend has stated that the price of coal is to be increased by 3s. 6d. a ton. Will he tell us what price per cwt. will be charged by the retailer to the consumer?

In view of the fact that the impression has lately been gaining ground that hotels and blocks of flats are receiving far more than their fair share of the solid fuels available, will the right hon. and gallant Gentleman say how he intends to distribute the coal available to flats and hotels?

There will be a careful scrutiny of their claims, and they will have to apply for a licence if they want extra quantities.

May I ask the right hon. and gallant Gentleman to consider again the request made by the hon. Member for Seaham (Mr. Shinwell)? The price of coal will have its effect upon people dependent upon the social services and people with small incomes. May I ask that the increase should be deferred until the whole implications of it have been considered by the House? Surely the House should have an opportunity of considering the whole aspect of the matter before we are involved in this very sudden change. May I say, further, that it is not quite a fair thing that the right hon. and gallant Gentleman should appear at the end of Questions and, without any notice, fling this at us?

I am sure my hon. Friend knows me well enough to acquit me of any discourtesy. There was a Question on this subject on the Order Paper to-day, a written Question it is true, and I thought it was fairer to the House that I should make this statement before the answer to the written Question, and that is why it has been made. This is also the last day on which there is a Question hour in this House before 1st May, and I do assure my hon. Friend that if we cannot get this advance at the time we want it it will simply increase the indebtedness of the Fund. The change is not so drastic as the hon. Member wanted to make out. I must repeat that this addition to the price of coal still leaves it only 50 per cent. above what it was pre-war.

I would appeal to my right hon. and gallant Friend to leave this matter over for consideration and allow the House an opportunity to have a discussion upon it. After all, this question is creating a lot of trouble, and the House ought to have an opportunity of discussing it before anything drastic is done. May I say, further, that this increase of price will have to be paid by those with lower incomes, including old age pensioners, and we understood from the Budget Statement that if prices increased it might alter the balance of what is called fixed prices. I think the House ought to have time to consider this matter.

I may say that the House will have to consider it, but I think that before asking for delay—I am not inclined to agree with it—the House should remember that by far the greatest cause of the increase in prices is found in the wage increases to miners that have occurred since the beginning of the war, and I am not aware that anybody in this country thinks it other than fair that the wages of miners should be brought up to a level comparable with the wages of those who do similar work. Therefore, whatever the House does we shall have to meet this cost, and I suggest that for the sake of the nation and industry it is far better for the public to know what they are paying.

In view of the further restrictions which my right hon. and gallant Friend has announced in the quantities of coal which will be allowed, can he tell the House whether he is going to make any arrangement to prevent an increase in consumption of gas and electricity by those who have alternative means of heating?

The present maximum restrictions have been come to in order to take more account of those who have alternative means of heating and cooking. Those who have no alternative means can ask for greater allowances than those stipulated.

May I ask whether, while these increased prices are imposed upon our own people, any of our coal will be exported for sale abroad?

I think I have assured the House before that, up to date, the only coal that we have exported has been coal which was vitally necessary to operations overseas, and I can assure my hon. Friend that we shall not depart from that practice.

As the price of coal enters into the price of every commodity in this country, has my right hon. and gallant Friend consulted with the other Government Departments as to what will be the effect upon our export trade of the very high price of coal?

My hon. Friend is aware that one of the purposes of the Technical Committee which reported recently was to see how the price of coal could be reduced by greater efficiency, and that is absolutely essential for the future of this country.

Instead of the plan which has been outlined to us, will the right hon. and gallant Gentleman reconsider the question of introducing a real rationing scheme that will show some sense of fairness? Does he realise that people who have no alternative to coal as a means of heating will be put into the wretched position of having to apply for a licence? Will he consider introducing a real rationing scheme that will do justice to poor people in a way that this plan does not?

As my hon. Friend is aware, a rationing scheme was considered some time ago and was not accepted, and nothing that has happened since, on further examination of the question, leads me to think it would be any more practicable to-day. It is impracticable in the case of gas and electricity to work a rationing scheme. With the maximum permitted quantity fixed at the figure it is to-day a margin is left for those who have no other means of heating and cooking.

Would the right hon. and gallant Gentleman say whether he now proposes to rationalise local distribution?

As I told my hon. Friend some weeks back, that is one of the things I have been looking into. A great deal has been done, but there are tremendous difficulties. I can assure her that everything possible will be done.

In view of the exhaustion last winter of the emergency coal dumps in London, and the possibility of a recurrence of the same conditions—difficulties of transport during bad weather, etc.—and the very serious situation which would arise in London if those conditions occurred again and there were no dumps on which to draw, do the Government contemplate building up small dumps in London during the summer months?

The object of the Government was to build up sufficient stocks to serve as a cushion in the case of such difficulties. It is true that a large number of these dumps were exhausted, in the case of some by the coal being distributed to ordinary merchants, and of others by the cash and carry system. Of course we shall do everything we can to replace those dumps, but they had been built up over a period of some years and it would not be possible to do so much in a shorter time.

In order that the House should have some idea of the significance of this change, has my right hon. and gallant Friend made any calculations as to the effect it will have on the Cost of living? He said that the 150 per cent. price was less than the average increase in pre-war prices, but the Chancellor of the Exchequer told us in his Budget speech that the cost of living was 129 per cent. of pre-war and he proposed to keep it to 135 per cent. as an absolute maximum.

Subject to correction I believe that this rise will make a difference of .7.

In speaking about the rise of 50 per cent. in price has the Minister considered that the quality of the coal is not half what it was before the war? The people are paying about 50 per cent. more for ordinary stones such as they could pick up in the garden.

If what my hon. Friend said were indeed true, it would make my problem a very simple one. In fact, there is a deterioration in quality to a certain extent, and that is unavoidable, being largely due to war conditions—shortage of labour and the arrangements for screening. After all, there are other commodities which have risen far more in price than has coal and the quality of which is nothing like so good.

In regard to the suggestion that consideration might be given to those who have no alternative fuel, may I ask the Minister whether he can cite a single area where that has been operated?

That is certainly not so, but the hon. Member knows that there have recently been special circumstances in the Rhondda, owing to very severe operational demands necessitating certain changes which we made.

Is it not a fact that the Rhondda, at no time during this period, has had its permitted quantities of coal?

That is not really so, but there are exceptional circumstances in every district. There is, too, in the Rhondda, a large number of people who get coal in quite a different method from others.

May I ask the Prime Minister, as he can see there is very strong feeling in the House against these changes, whether he thinks any harm would be done if the matter were deferred, say for 10 days or so, to allow the House to have the matter clarified, and the effects studied, particularly the effect upon industry?

Questions designed to elicit information, or emphasise points of view, may be numerous without necessarily indicating very strong feeling in the House, which at any rate at this moment is a small one. I do not feel that we ought to delay action in the direction which has been indicated by the Minister of Fuel and Power. It is much better to face the facts as they are set out. The Cabinet were fully aware that this would be a painful and unpopular measure. While, in the military field, you may have many things that will be most cheering, in the other fields one must undoubtedly look forward to the necessity of taking a great many steps which will not be popular and of denying a great many steps that will be popular. In this case, we thought it out very carefully, with great reluctance to add so heavy a charge to a necessity of life. We came to the conclusion that it was our duty to put this matter before the House. The House will have full opportunity, as occasion arises, of criticising us for the action we have taken, but it is perfectly honourable and straightforward. I am bound to say I think the public ought to know as soon as possible where they are in these matters as they arise and become apparent.

In view of the fact that this rise in the price of coal to the consumer is only the natural consequence of the disastrous rise in the price of the production of coal throughout this war—[HON. MEMBERS: "Oh."]—may I ask—

May I ask the Prime Minister whether the Cabinet will give further consideration to the question of a subsidy for coal; and whether he can say why, if a subsidy is good for bread, it is bad for coal?

Water Bill

Reported, with Amendments, from Standing Committee A.

Bill, as amended (in the Standing Committee), to be considered upon Thursday, 10th May; and to be printed. [Bill 47.]

Minutes of Proceedings to be printed. [No. 76.]

Standing Orders

Resolutions reported from the Standing Orders Committee:

1. "That, in the case of the Ponty-pool Gas [ Lords ] Petition for Bill, the Standing Orders ought to be dispensed with:—That the parties be permitted to proceed with their Bill."

2. "That in the case of the Newcastle-upon-Tyne Corporation [ Lords ] Petition for Bill, the Standing Orders ought to be dispensed with:—That the parties be permitted to proceed with their Bill."

Resolutions agreed to.

Selection (Standing Committees)

Colonel Sir CHARLES MACANDREW reported from the Committee of Selection, That they had discharged the following Members from Standing Committee A: Mr. Butcher, Mr. Emmott, Colonel Sir Arthur Evans and Major Sir Jocelyn Lucas, and had appointed in substitution Lieut.-Colonel Dower, Sir Arnold Gridley, Mr. John Maclay and Sir George Schuster.

Orders of the Day

Ways and Means

Considered in Committee [ Progress, 25 th April ].

[Mr. CHARLES WILLIAMS in the Chair]

Amendment of Law

Question again proposed,

"That it is expedient to amend the law relating to the National Debt and the Public Revenue, and to make further provision in connection with finance."—[ Sir J. Anderson. ]

3.49 p.m.

On a point of Order. Before this discussion is resumed, may I ask, in view of the fact that the Financial Secretary to the Treasury when winding up the Debate last night did not deal with a single point made by hon. Members during yesterday's Debate, whether we may have an assurance from the Chancellor of the Exchequer that the points will be answered, by whoever winds up the Debate to-night?

We can agree with the Chancellor's suggestion that it was unfortunate that he has had to bring forward a new Budget when events are moving so fast and the nation is looking forward to the future. That future is so concerned with finance that it would have been easier to leave the discussion over since the war is still on. We cannot expect the Chancellor to be quite clear in his mind on all the details, and if he is not clear, how can he tell us all that we should like to hear? What he has done has been to continue the old Budget for another three, four, or it may be six months, and then, what would have been the normal Budget will be introduced. I feel that that is a most satisfactory solution of the difficulty. I do not agree with the right hon. Member for East Edinburgh (Mr. Pethick-Lawrence) that a supplementary Budget increases the danger of inflation. I most certainly am not going to offer the Chancellor advice on inflation. There are other matters on which we can talk with more advantage.

This does not mean that the present Budget is barren. On the contrary, it contains some most important developments. In the speech of the Chancellor, there was a wealth of information, set out in a manner which shows that the Chancellor has definite views on the need for action and that he will take the necessary steps as soon as circumstances allow. The question of double taxation, on which the Chancellor made an announcement, has worried us for many years, and we congratulate him and his officials upon having got over the first hurdle in such a complete manner. There are no "ifs" or "buts" about the solution at which we have arrived with the United States. The only thing that remains now is for the arrangement to be carried through. The United States is probably the most important oversea nation with whom we treat, but there are others with whom some people deal entirely, and so we need to carry this scheme forward, particularly as we are engaged in negotiation, with Dominions particularly, and other countries, about what is known as complementary production. Double taxation has always been a great bar to the satisfactory carrying out of any arrangement.

The Chancellor has given increased help to small businesses, and if he carries forward the help he gave last time, he will remove still further the difficulties with which smaller business men are surrounded. It will not amount to a great deal individually, and because of that, his figure of £12,000,000 shows how widespread the benefits will be. I come from the city of small businessmen, Birmingham, and they will be very grateful to him for the concession he has made. The Chancellor knows that a mass of hard cases will be left untouched, but I will not harry him. We have told the story here, year after year, of businesses with low standards, unable to improve their position, and of all the anomalies which the tax has brought in its train. It is based on a standard which is now fully a decade old. We have moved a long way from it. Though it was thought out, it was not a carefully planned scheme. It was a war-time measure intended to take the profit out of war. I hope that when the Chancellor directs his mind to his supplementary Budget he will do something to help the hard cases which have been patiently waiting for assistance.

We might bring forward now the question of post-war credits. They were to be granted for reconstruction; we accept that. We know that there will be no question about their being given, but reconstruction has actually started at the present moment. Government plant and machinery are being acquired and transferred, and the Government are asking for the money for the plant to be paid. Could there not be some arrangement for payment in respect of Government property which is being transferred to be charged against the credits which industry is to have? We have been assured that there is no doubt they will receive those credits. Other reserves and funds are being used for the payments, and when the time comes for the credits to replace them, the statement may be made: "This is for replacements, but you are using it for ordinary purposes which will affect dividend distribution." If the Chancellor could see his way to make the distribution in some way, it would be an earnest, and would make for certainty among the people who are thinking that post-war credits belong to Never-Never Land.

I should like to comment on motor car taxation. The suggested alteration leaves the problem unsolved, if expansion is the aim of the concession. It will help by leaving designers of cars a certain amount of latitude but the choice which we have before us is to go on using the motor car industry as a means of raising taxation, or to provide additional employment and help in the export drive. The hon. Member for Chesterfield (Mr. Benson) was quite wrong when he said that the makers are responsible for the present artificial position; they have been forced into it, by Government policy. For reasons which we know, Government policy has been to make motoring very expensive. Taxation has been levied on the motor vehicle because motorists were thought to be a class of the population who were able to provide additional taxation. This taxation has been increased to a very high figure; it has risen very much more than any other.

I never suggested that the motor manufacturers were responsible for the high taxation. I suggested that they were responsible for the form of taxation, which gives them an immense protection against American imports.

That is not so. I have been in the industry almost the whole of my business life, and I can assure the hon. Member that we had nothing whatever to do with the imposition of the horse-power tax. In the early days, our engines were designed without any connection whatever with the formula. It was only after the Treasury had adopted what was known as the R.A.C. rating that engineers began to design engines specially made to suit those conditions.

Does the hon. Member suggest that the motor manufacturers had nothing to do with the Chancellor's decision?

The Chancellor is a man with a mind of his own. All he did was to hear the various views put forward on what would best help the British motor industry in the future. The present method was chosen, but it is certainly unfair to suggest that the method of taxation by which motor-cars are rated, is in any way, the fault or the responsibility of the motor industry. They have only adapted themselves to it.

In the United States they have developed large cars. Our public has been obliged to take smaller cars, not because, in the first instance, there was any desire for them, but because smaller cars were the only means of keeping down running costs. The taxes on motor-cars were, originally, luxury taxes, and have been continued on an article which has become one of common use. It provides an example very much like that of the old days when some Chancellor of the Exchequer hit on the bright idea of taxing windows. For many years, because windows were a luxury, they were taxed. But the day came when it was decided in the national interest to take that tax off windows and let in the light. The day will come, I hope, when it will be possible for us to regard the transport industry as of more importance than a tax-carrying medium for the Government. Great credit is due to the British manufacturers, who with ingenuity and adaptability, have overcome this handicap, and have produced cars which have a very high efficiency, based on a small engine, because of a high taxation policy. These small cars are highly efficient. I would remind the Committee that it is upon the basis of that experience, that technique, that the high-compression, high-speed aero-engine has been developed. Such an engine provides an instance in which a great horse-power per lb. weight is required. British aero-engines, because of this experience and technique, caused through this taxation policy, have produced the best weight per power ratio in aero-engines in the whole world.

We are now urged to make motor-cars for export, but our export trade has been in the past, and it seems to me will be for the future, based on what is the home demand, and that has not changed even now. The argument is sometimes put forward: Why not produce special models for export? That will not help, because if we decided to make special models for export—50,000 or 100,000—we could not compete with the Americans. They were making 4,000,000 cars before the war; our output was in the neighbourhood of 400,000. If the Americans were exporting something like 10 per cent. of their whole output, that was more than our whole production. That is the secret. There is no superior ability. When I went to America recently, I was told, "When you hear all this talk about American super-efficiency, just look out for a travel-ling belt." That is a right method of assessing the difference. That is where America beats us—in large quantities. Come down to small quantities, and we need not fear America. Go into the shipping trade or the electric power industry, and there we can beat them. Give us the opportunity of making anything like the American quantities, and, with our labour costs against theirs, we shall beat them. That is why the British car is a small car, because it is based upon the expensive nature of motoring. Because we make something which our own people want, and the Americans do not make, we went out into the world and found markets where small cars were appreciated, markets which were steadily increasing. But do not expect us to compete in the same way with the large output of the Americans.

I have been urged, not only by the motor industry but by other industries, to impress upon the Chancellor that the Purchase Tax is a war-time tax, which was imposed for restricting the consumption of goods at a time when they were scarce. If we are to go back, a little later on, to full employment, it will be quite impossible to keep the Purchase Tax, because it will hinder the development of business. We are relying upon the Chancellor to treat this tax, not as a revenue-producing tax, but what it was conceived as—a means of restriction of consumption in days of scarcity, and, as those days disappear, to remove it, so that we can have full production.

I congratulate the Inland Revenue on the success of their efforts in introducing Pay-as-you-earn. We in industry did our share. We worked and helped, but we appreciate what a gigantic task it must have been for the overloaded Inland Revenue officials to carry through. It has been a great success. I have made inquiries among workers and employers' and commercial associations, and I have heard not a single complaint. A major change has been made and everybody is almost happy—[ Interruption ]. Of course, nobody is quite happy paying taxes, but I have had one or two people come to me and say, almost joyfully, that when they returned to work after being ill, they had a nest-egg given to them. The scheme was well thought out, and the greatest credit is due to those who thought it out and carried it out. The Chancellor did just reveal a corner of his mind. He let us see that he realised that we want one of these days to be able to look forward to tax reduction. If we are to have full employment we must have tax reduction. At present we in industry have one customer. That customer is very good; he gives us orders and if we have not got the plant he helps us to get it; if we cannot get the material, he helps us to provide it, and he makes his payments regularly. We have no fear of bad debts. When that customer's war demands are no longer there, and his orders come to an end, we shall have a very different problem. There will be no full employment unless we have full consumption, and there will be no full consumption unless there is full spending capacity, and there will be no full spending capacity if the Chancellor takes it all in taxes.

4.11 p.m.

My hon. Friend who has just addressed the Committee has, for many years, been prominently associated with large-scale industrial undertakings. He has discussed the Budget which is now before us largely from the standpoint of big business and, in a minor degree, of small business undertakings. That is quite legitimate, and indeed it is what we expect from my hon. Friend. There can be no ground of complaint on that score. On the other hand my hon. Friends the Member for Leigh (Mr. Tinker) and the Member for Ince (Mr. Brown) and, looking back over the last two days' Debate, several other hon. Members on these benches, have considered the Budget proposals from the standpoint of old age pensioners, of workers and of people with low incomes. I propose to look at this Budget, and what emerges from it, from the standpoint of the nation as a whole.

The Budget has been described in a variety of terms. As we might have expected, it was ably presented by my right hon. Friend. It has been described as "pedestrian," to use the language of my right hon. Friend the Member for East Edinburgh (Mr. Pethick-Lawrence), it has been described as "unexciting," as a "stalemate Budget." For my part I found the Budget interesting, not so much because of the taxation aspects, which are neither exciting nor particularly diverting, but because my right hon. Friend directed attention to what, after all, is the primary consideration of every one of us, that is, the economic future of this country. The Budget Debate has disclosed some interesting opinions, some of them clear beyond any possibility of doubt, others somewhat nebulous in character. I shall deal with the latter, to begin with. The Chancellor of the Exchequer warned us of the grave dangers that were ahead; that there were many problems likely to confront the nation; that we must be careful. He exhorted us to accept discipline and the like. That was, from his standpoint, a legitimate warning, but I doubt whether it fully represents the opinion of the Government as a whole. I say that because, reading the newspapers this week, I discovered an extract from a speech by Lord Woolton, who is a member of the Government, and not only a member of the Government but the Minister charged with the study and, it is to be hoped, the application of reconstruction policy: not a subordinate member of the Government, but one highly placed, one deserving of respect, one to whose views we must give great weight. He said:

The other matter to which I referred, upon which there can be no question, no ambiguity, upon which there is now apparently complete clarification, is that of controls, upon which my right hon. Friend the Financial Secretary dilated yesterday. He informed us, quite emphatically, with no reservations whatever—we can consult the official records—that willy-nilly—mark you, willy-nilly—there would be controls for at any rate four years. How Members of the Government can reconcile that emphatic declaration with the peculiar utterances of the Chairman of the Conservative Party organisation on the public platform, and, indeed, with the utterances of the Prime Minister at the Conservative Party Conference—no doubt, intended for window-dressing purposes—and with the declaration made by Sir Evan Gibb yesterday, at the annual meeting of the London Chamber of Commerce, when he described controls as strangling in their nature, and said that they must be speedily removed, is difficult to see. When my right hon. Friend made that declaration yesterday, I interjected, not with any desire to be troublesome but because I thought it was the appropriate occasion for such an observation, that the remark he had made should be sent to the Conservative Party organisation. It ought to be inscribed on the portals of their headquarters, embodied in every manifesto sent out by the Conservative Party: "Controls will continue for at least another four years"; so that at the next General Election we shall not be engaged in bitter political conflict on that subject. It is no longer a party issue; it is raised above the party struggle; there is continuity in controls policy.

It is just as well that that should be emphasised, because we have suffered considerably and harshly at the mouths of some Conservative Party spokesmen, even Ministerial spokesmen, in recent weeks, and in particular we have suffered from the declarations made by one member of the Government, namely, the Chancellor of the Duchy of Lancaster, the leader of the Liberal Nationals, who is ready to say anything at all, whether it is on the left, in the centre, or on the right, so long as he can attach himself to some Government.

The right hon. Gentleman is not here, and I do not think that the hon. Member should make an attack of that kind upon him in his absence.

If we are never to engage in any criticism of right hon. Gentlemen when they are absent, we shall be debarred from making criticism on almost every occasion. At any rate, the right hon. Gentleman can consult the official records. Whether my hon. Friend, who has come to the assistance of the leader of the Liberal National Party, likes it or not, we shall indulge in this criticism, because it is legitimate. I repeat that on this subject of controls we have now had this emphatic utterance, and I hope that the Government do not change their mind in the course of this Debate.

If the hon. Member reads the Financial Secretary's speech carefully, he will see that the stress was put not on controls, but on priorities in a time of scarcity, when there is not enough to go round.

I hate to say it to my hon. and youthful Friend, but that is infantile. We know what is meant by priorities, we know how they emerge, we know what the subject really embodies; but if my hon. Friend would care to suggest that the controls should be abandoned, I should be glad to sit down and afford him ample opportunity of doing so—with the consent, of course, of yourself, Captain Cobb. Apparently he is a little reluctant, so I will leave the matter there.

What is the problem that confronts us? Here is a nation emerging, slowly and laboriously, from the fires of war, scarred and bruised, but, nevertheless, still on its toes. There will be a vast range of problems in the post-war years that have to be scaled and overcome, but we have a wealth of experience to guide us, experience derived from the practice of the war, from the organisation that has been set up, and I suggest that that experience, gained during the war, should be carried over into the days of peace. That is the first consideration. What are the facts about our economic position? Let us consider it in relation to the economic position of other great countries; it is quite idle to consider the economic position of this country in isolation. What was the position before the war? We seldom had less than 10 per cent. of unemployment in this country, and frequently we had 20 per cent. of unemployment. What did that mean? I am not going to speak in emotional terms of the harsh effects on those who suffered from unemployment: in terms of national income—and that is the subject that is before us—it meant an actual loss in the inter-war years of £10,000,000,000, or a sum equal to two years' income. There was, as a result of unemployment, a diminution of the national income.

Consider our position in terms of production. I will not weary the Committee with figures, but this can be said, because I think it sums up the point. If we had proceeded at the same rate as was in operation before the war, it would have taken 46 years to double the production of this country, but America, proceeding at the rate in operation before the war, would have doubled her production in half that time, and in the case of Soviet Russia the period would have been nine years. We have to consider our position in those terms. Obviously, there is no difference of opinion among us as to the need for correction, as to the need for further development, as to the objective. Every one of us desires, or ought to desire, to raise the standard of living of the people of the country, and, obviously, for that purpose, to maximise production. If we are agreed about that, let us consider a further proposition which is related to this problem.

As I see it, the problem can be divided into two parts. One is—to put it briefly—what is to be the size of the national cake? The other is, how is the national cake to be shared out? What are the ingredients in the national cake? First of all, there is labour. My right hon. Friend the Financial Secretary said yesterday—and this has been said during the Debate by other Members, and it has been said outside—that there will be a shortage of labour after the war, at any rate for a considerable time to come. I think that that is highly speculative. It depends on a great many factors. The right hon. Gentleman seems to think and, indeed, there are some employers of labour and orthodox economists who seem to think, that this is a very serious matter. I can imagine employers of labour regarding it as serious because it removes to a large extent the element of competition. The result is that wages have a tendency to rise, and it puts a powerful weapon in the hands of the workers. Employers naturally prefer that condition of things where there is a vast reservoir of unemployed labour available to industry, for it enables them to bargain. In fact, we need not concern ourselves with the actual supply of labour if we promote efficiency in production.

Take the building trade. If we can provide excavators instead of navvies, no doubt we will discover as, indeed, we have discovered, that one excavator can do in a day as much work as 20 or 30 navvies. Therefore, the problem of labour supply need not concern us unduly if we are prepared to promote efficiency in production and produce the mechanisation required. So I beg hon. Members not to regard this question of labour supply in a pessimistic vein or to be apprehensive lest there should not be a sufficient supply of work people ready to undertake industrial tasks. It all depends on what industry is prepared to do. That is a subject to which we must address ourselves, for it is the essence of the case.

There is another ingredient, and it is one to which I have partly referred, namely, industrial re-equipment. If we are to build up our industries and, in particular, assist to rehabilitate our export trade and survive as a great economic Power—and survival as a great economic Power gives us our part in the moral leadership of the world, for without it we cannot assume that role—we must introduce into industry the highest form of mechanisation. [An HON. MEMBER: "That will take labour."] In certain circumstances it might displace labour. It will obviously take labour to begin with, but subsequently it may displace labour. It depends on the nature of your system. Our purpose is to introduce into industry the highest form of equipment and mechanisation and to associate it with efficiency. These are the ingredients. The question emerges, who is going to do it? Is it to be left to the private manufacturer, to free enterprise, or is the State to play its part in the promotion of mechanisation in industry? If it is left to the private manufacturer, there is no assurance that it will be carried through. What assurance have we?

Surely the hon. Gentleman must give some credit to the immense amount of work that has been done by private manufacturers for generations past. The private manufacturer gives tremendous thought and effort to promote efficiency in his own works.

It is true that something has been done, but nothing like enough. Let me give an example. There is a wealth of illustrations, but I will take one that occurs to me because of my hon. Friend's interjection. We have had presented to us the Reid Report on the technical aspects of coalmining. What does it convey? That the mining industry in this country suffers from the lack of mechanisation. There is a vested interest in obsolescence. There are manufacturers who are not prepared to take the risk. I am not complaining of this; I merely state the fact. There is a vested interest in retaining obsolescent plant, partly because manufacturers are afraid to take the risk and partly because they have not the financial means.

What does the hon. Member mean by the State? Does he mean the party Government in office at the time, or the Civil Service?

I will come to that in time. It is an important point and, no doubt, it will emerge at the next General Election. I emphasise the point that the question of obsolescence must be tackled. Who is to do it? In the mining industry it will require millions of money in order to undertake the task of re-equipment and improve mechanisation. Who is to do it? To leave it to the private manufacturer, to the coalowner, to the entrepreneur and the rest of them is no guarantee that it will be carried through. I should like to know what the Chancellor has to say on this head. Does he propose to institute some form of direction? If he does, will he tell us the nature of the direction? If he does not, will he give some guarantee that the trading and industrial interests of the country will take the requisite steps to put industry on its feet and enable it to maximise production and maintain full employment? We are entitled to put these questions, particularly on the eve of the post-war years when these problems will assume alarming proportions.

We have been discussing this week the question of taxation, and I agree that taxation enters into this question. I have listened this week—and I beg the Committee to forgive the language I use—to the queerest, quaintest and, indeed, the most monstrous arguments, on the subject of taxation. I am not a financial expert or an economist, but I am bound to say that some of the arguments I have listened to amazed me and, indeed, frightened me. Let us consider what the position is. We have heard arguments from many quarters in support of the demand that taxation should be reduced. It is a very plausible suggestion because everyone wants his own personal taxation to be reduced. What is meant by reducing taxation? Hon. Members opposite, and some right hon. Members also, think that if taxation is reduced, it will encourage investment and production, and indeed, that unless taxation is reduced, there will be no encouragement of the kind we desire. In point of fact, taxation can be increased and it may have a beneficial effect. Take the case of a man who pays 19s. 6d. in the £ taxation. I have been told that there are some people paying that rate, and I often wonder how these poor people manage to live on the other 6d. It is a source of wonderment to me. Apparently, they get on quite well; at any rate, they get on and there seems to be no starvation.

They are living on their capital.

They are living, that is the point. What has the poor fellow to do who has no capital? The fact that a man pays 19s. 6d. in the £ may provide the incentive to produce more in order to earn more, because the more pounds he has the less harsh is the effect of his taxation. I am not arguing that we should increase taxation to that extent, but it may have that effect. In peace-time, naturally, if you impose Excess Profits Tax on industry, that is to say, take from industry all the extra profits earned above a certain standard, it may remove incentive. It leaves industry without any resources, or it seems to do so. Sometimes there are resources that are not disclosed. Nevertheless, it may have that effect and industry may not prosper in consequence. While the capitalist system is retained, we must expect capitalist undertakings to make a profit. I am not concerned much about limiting their profits. I am concerned about transferring capitalist undertakings from private to public hands, a much more profitable proposition and a much more direct method of approach. So I am not worrying very much about the profits that are made except with this qualification, that if capitalist undertakings are earning high profits at the expense of the wage earner or, alternatively, at the expense of the consumer by charging too high prices, the State ought to step in and prevent it. With that reservation I do not object, while the capitalist system exists, to industrial undertakings making their profits.

Therefore, while I am in agreement with the proposition that in peace-time there must be some readjustment of Excess Profits Tax, I am not in agreement that personal taxation should be reduced as a means of providing an incentive to the restoration of industry. On the other hand, there is something to be said for removing some of the inequalities in taxation. If a man with £100 a week pays £70 in taxation, he has still £30 left. If a workman earns £7 a week and pays 35s. in taxation, his position is relatively much worse. While I am not suggesting that at this stage the Chancellor is in a position to iron out these inequalities or to remove some of the burdens that have been imposed on the lowest scale of Income Tax payers, at the same time it is a matter that ought to be adjusted, particularly in view of rising prices which bear more harshly on the people at the lower end of the scale than on those at the other.

So much for that. The question is, How are we going to put into industry the necessary resources that are going to lift industry up to the level we desire? Is it going to be left to private enterprise, or is the State going to step in? I suggest that the State must step in, and that the State can step in only by one of two methods. Either the State must direct the industry, use its influence by the use of the taxation device, or it must take the industry over. Of course, in the case of coal, I do not think that there is the slightest chance that, by using the taxation expedient, you are going to transform the position. That industry has got to be taken over sooner or later, and, in my judgment, sooner rather than later; and I think we must do the same with transport, because, in this regard, I should like to say that one of the chief defects in our industrial system is the high cost of production. When we are discussing this question, hon. Members on the other side declare that we must reduce wages, but that only reduces consuming power and does not solve the problem at all. We could solve it by increased efficiency—mechanisation, as I have said—but, obviously, we cannot do that in coal or transport, while leaving the industry and services in private hands, because there is no guarantee that it is going to be done. Because the costs of fuel and power and transport are important ingredients in the cost of production in industry in this country. I say it is highly important that these industries and services should be taken over.

The question is whether we can use the device of taxation for our purpose. What is the proposition? It is that we should reduce taxation because we are quite certain that there will be more investment in industry. There is no guarantee of that, either. Supposing the Chancellor of the Exchequer reduces taxation by 2s. in the £. What is going to be done with the money which the recipients will have had put in their hands? They may spend it. Has my right hon. Friend thought about that? They may spend it on what is available of luxury articles. They may, in the post-war years, go abroad; there is nothing to prevent that. The effect of that would be of no advantage to the Chancellor of the Exchequer, certainly of no advantage to the State, and certainly of no advantage to industry. On the other hand, they may invest that reduction of taxation of 2s. in the £. but the question I put here, and I think it is quite a proper question, is, What would be the nature of the investment? You might have a form of investment derived from savings of one kind or another, and that would be of no advantage to the community.

Is the hon. Member talking about the immediate future, when there will not be enough materials to go round for consumption and investment, or is he talking about some remote period?

I am concerned with the next five or ten years, and, indeed, when my hon. Friend says there is going to be a shortage of supplies in the immediate transition period, what do we mean by a shortage of supplies? A shortage of bread, of margarine, of bacon and eggs or the necessaries of life? If well-to-do people have the advantage of a reduction of 2s. in the £ taxation, they may not buy more bread, butter, margarine, or bacon and eggs, but they may use the money for the purpose of buying luxury articles, or alternatively, for investing in luxury trades. What sort of direction are we going to have there? If we had a guarantee, and I put the proposition sharply to hon. Members, that, as a result of reductions in taxation, the money would be used for the purpose of rebuilding our industrial position, that would be quite a different matter, but I say that, under private enterprise as things are, there is no guarantee at all.

Now I come to the question of the share of the cake. We had an example to-day of what happens—a most alarming example—when the Minister of Fuel and Power came down with the unexpected announcement of the increase in the cost of coal of 3s. 6d. per ton. First of all, it has an alarming, an adverse, effect on industry. It is bound to have. I am not going to discuss the cost-of-living index figures. What is the use of going into that, when everybody knows that, when industry has to pay 3s. 6d. a ton more for coal, it is bound to affect its position and its future? To say that this is due to the high wages in the mining industry is a monstrous suggestion. It is monstrous because what you are saying, in fact, is that you can only build up industry in this country at the expense of impoverished miners and impoverished workmen. This is 1945; not 1845.

In any case they would have to say that the miners were more highly paid than other workers, whereas 20 categories of British workers are still more highly paid than the miners.

I am obliged to my hon. Friend; it is a sound point. Even if you reduce the wages of the miners, and this side will not accept that by any means, is it suggested that that is going to be beneficial from the point of view of the community? I am speaking of the general effect on industry. There has got to be a balance between productivity investment and spending. Who is going to hold the balance? Is it going to be left to the interplay of forces that are fortuitous, or is there to be wise control, direction, discipline and organisation? What we have got to consider is this. This is the choice, as I see it, before this country, before hon. Members, before the present Government and before any subsequent Government: whether we are going to have a planned and coherent economic system or an orgy of economic frightfulness. Let me say a few more words on the subject of the share of the national cake. I may be indulging in a little heresy in what I am now going to say.

Frankly, if I had my way, instead of making cash payments through what are called social services or extended social services, I would make payments in kind. I will give two reasons why I think it is more desirable. First, it is not affected to the same extent by the changes in the cost of living. The fluctuations, sometimes violent, sometimes mild, that occur from time to time concerning the cost of living have their harsh effects when you are the recipient of a monetary payment. Take the case of the old age pensioner. The 10s. a week pension, and even the supplementary allowances, mean nothing in face of the rise in the cost of living. It is a different thing if there are payments in kind.

There are a variety of devices that could be employed. Let us take the case of school children. We do provide meals for school children. We also provide milk for them, but it is largely for necessitous school children. It would be a very desirable thing, from the standpoint of the community, that we should provide a hot meal every day for every child attending school, provide free milk, and I go beyond that and say provide two pairs of shoes and a school uniform. Let us consider what that means. It puts a bottom into agriculture. It provides a measure of stability for one of the most important industries in the country by using, very largely, home-produced foodstuffs, but it does something more. If the Northamptonshire and Leicestershire shoemakers, and the shoemaking industry generally, know that there is a stable market every year for 4,000,000 school children for two pairs of shoes a year—that is 8,000,000 pairs of shoes each year—it puts a bottom into the shoe industry. That is the sort of thing it needs. It is not only an advantage for the people concerned, but it is advantageous from the national standpoint.

As regards the old age pensioners, one of the biggest reforms that could be advanced is to give them, not another 5s. or 10s. a week, but cottages at a minimum rent, with free coal and light. That is the way to enable people to live in security and comfort, and it could be done. I venture to say that it could be done with as little cost as the expenditure incurred in many of the social services that are now being advocated. I put it forward, not in any hope that it is going to be accepted, but because it is part of the national pattern that we have to weave in order to bring society up to the highest standard.

A last word about the export trade. It is a subject upon which I frequently dilate, and I am bound to say that I often find myself at loggerheads on this subject with other hon. Members, but I have received ample evidence in the course of this Debate that, at last, we have made the discovery that the main, if not the exclusive, reason for exports is that we have to pay for imports. How often have we been told that one of the reasons is to provide employment and build up industry. That is not the reason at all. We export because we have to import. After the war, we shall have to import vast quantities of raw materials and we shall have to pay for them. But how are we going to build up our exports? It is all very well for hon. Members opposite to cry: "Build up our export trade." How is it going to be done? By leaving it to the individual exporter? By leaving it to the hon. and gallant Member for Hornsey (Captain Gammans)? What a crude conception. Is there any guarantee that these people are going to export? I appeal to my right hon. Friend not to be deluded by these people, for his concern is equal to my own, or I could put it the other way round and say that we both agree on the need for exports to pay for imports. Suppose he came to the assistance of exporters by providing subsidies or by offering all the available advice at the disposal of the Department of Overseas Trade. What guarantee have we that they are going to export?

After all is said and done, manufacturers in this country would prefer to produce for the home market rather than the export market, because there is not the same risk in the home market. There is a speculative risk in the export market. How is that going to be dealt with? First of all there is the question of imports. If we are to import, who is going to import? Are you going to allow these people to undertake the importation of commodities, to import what pleases them? It might be luxury articles for all we know. We have to see that we only allow into this country goods we need in order to build up our industries and to provide for the sustenance of our people in so far as our own agriculture cannot sustain it. That means direction, organisation, State activity, and not leaving it to these people who have made a mess of it in the past and are always shouting their heads off about the need for building up exports.

As regards the export side of it my right hon. Friend must see to it that he builds up some kind of export machinery. It cannot be left to them. This is how we have to build up our national economy, and it cannot be built up in any other way. I look forward to the future with optimism. I believe that our industries can be rehabilitated and I agree with what my right hon. Friend the Member for East Edinburgh (Mr. Pethick-Lawrence) said yesterday—and it has been said many times—that we have immense skill, craftsmanship and technical science in this country. We have vast resources and goodwill throughout the world, and that counts for a great deal. We have all these resources, but we have to harness them to a national scheme in which the State must play a very large part. But in particular I look forward with optimism to the future because I do not believe that the electors of this country will allow the people who have made a muddle of it in the past to carry on much longer. If we are to promote full employment to provide for the needs of the people of this country and take our part in the industrial and economic life of the world, we have to develop a new system and depart from traditions, however honourable they may seem to be, and give the people of this country an opportunity of living the kind of life to which we believe they are entitled and to which hon. Members opposite say they are entitled but which they are unable to bring about, because they are reluctant to undertake the tasks of organisation which are so essential.

5.3 p.m.

I hope that my hon. Friend the Member for Seaham (Mr. Shinwell) will forgive me if I do not follow him on a number of the topics upon which, to use his own words, he has dilated in the course of his interesting speech; nor, referring to his opening sentence, do I speak here to-day for big business or for little business, but as a very ordinary citizen who tries to take an intelligent interest in our national finances and to make some contribution to the subject from time to time. I do not wish therefore, as other speakers have done, to apply any adjective to the Chancellor's Budget, to describe it as negative or pedestrian or as "a message from the half-way house" or any epithet of that kind. No Chancellor has probably had to make his Budget proposals and his statement at a more awkward time. There has never been a greater need for taking thought for the morrow on the economic situation or less information upon which that thought could be accurately founded. Therefore, we are grateful for such practical help as he has seen his way to make to our economic arrangements at the moment, and we give him full credit for the good intentions which he has expressed and his indications of the way in which he proposes to move in the future.

I was struck with one observation he made in his opening sentences when he said that our financial record in the war gave us no cause for regret. That is certainly true, and it is perhaps the natural modesty of the Chancellor which made him state it in that way, for not only does it not give us cause for regret but it gives us cause for very great satisfaction. If anyone in the early days of the war had told us that after five and a half years of war we would have a National Debt, the interest charge of which would be no more than the percentage charged on the national income at the end of the last war, he would have been told that he was talking nonsense. There are many things which are very remarkable about our financial record. Some aspects of it are matters which have not only served us in war time, but will travel with us in peace time. The record of management of our level of interest rates, essentially brought about almost entirely in war time, will be a very valuable asset to us when we face the difficulties of peace time. That is a very important thing.

Another matter which is important, though other Members may not agree with me, is the fact that there has been a very wide and substantial redistribution of the national income. That has been brought about in war time and it is very substantial, far more substantial than is generally realised, and it will remain with us in peace time. The development of social services, such as the scheme of family allowances, will stabilise that redistribution of the national income. Of course, as an hon. Member says, anything may go wrong, but these are important matters which, if we behave with the prudence which we have acquired in the war, will enable us to face the difficulties of the future. There are adverse results of our war-time finances. One is the position of our industries. They have been deprived by taxation of reserves to re-equip, to modernise plant and to develop, especially research, referred to in many speeches in this Debate. In any scheme such as the Chancellor promised us on surveying our tax structure, a very high priority ought to be given to all means which can be devised for increasing development and production.

There is another very serious difficulty on which my right hon. Friend spoke yesterday at some length, and with which I find myself in sympathy, and that is the enormous increase in and the heavy burden of our sterling indebtedness to countries overseas. It is in that connection that I derive great encouragement from the Treaty which my right hon. Friend has made with the United States on double taxation. That is an important matter. It is important not merely for the immediate and practical aid which it gives to international trade, but for the further reason—and I hope I am right in this—that it is an indication of the spirit in which we are going to try and develop our international arrangements and negotiations in future. It is of the very utmost consequence not only to us, but to the whole of the world, and to the whole of international economic prosperity, that we should carry forward into the peace the spirit of mutual aid and Lend-Lease, the practical application of the sentiments of President Roosevelt, that great man. In one of his greatest acts, the institution of mutual aid, he said, speaking of the countries which were engaged in the war, that in the war effort the contribution should not be decided by casualties or the actual volume of any country's contribution but rather by the fact that when people were working together for a common aim and each, did his best to the limit of his capacity no question of debts could arise between them.

My right hon. Friend yesterday said—and the whole Committee will agree with him—that it would be contrary to our reputation and be intolerable if we should seek to deal with, or alter, these matters by any one-sided—he said "unilateral"—arrangement without consultation. But it would be equally intolerable, seeing that these enormous indebtednesses are incurred in a common war, that they operate for the service and benefit of those for whom we have contracted the obligation if they were to be regarded, to use the Chancellor's words, as an ordinary commercial transaction. Therefore, I am sure that the Committee will stand by the Chancellor and I have little doubt that he will be successful, in the atmosphere which, I hope, will prevail, in making an arrangement on the lines of common justice as well as in the mutual interests of all the parties concerned.

Our interests in these matters do not end with the war. We are pledged, as I understand it, by the Atlantic Charter and by the Conferences, from the first Hot Springs Conference, to work together for the common benefit and for the mutual prosperity of all countries. Therefore, it is essential that we should have a new spirit in dealing with these mutual transactions after the war, not a spirit based on "snatch and grab" or "catch-as-catch-can," or we shall never succeed in achieving any kind of prosperity. The Chancellor, if he is able, in the autumn or some other time, to meet us again with further proposals will, no doubt, have something more to say on reflection and second thoughts with regard to our tax structure. I have no doubt that when he reaches the stage when the situation may enable him to make a relaxation in taxation, he will, no doubt, give a very high priority to any aid which can be given to our industry and to the full development of our productive resources.

An hon. Member, a short time ago, was pleading for an early revision of the Purchase Tax. I am not certain whether the Purchase Tax should be one of the first taxes to go. I could see a situation in which it might be highly advisable to keep it on. We have not finally defeated the danger of inflation and the Purchase Tax might well be useful in that connection. In the first 12 months after the war, if the patriotic restraint upon spending should be relaxed in any way before there is a corresponding amount of goods coming forward to absorb that money, there would be a very real danger of inflation in this country.

It is essential that the savings movement, which has become a very strong social habit, should be continued, especially during the early days following the end of the war. It might very well be a question of whether the Purchase Tax should or should not be one of the first to be reduced. I want to point out that in this country at the present time one of the matters on which there is the greatest amount of feeling is the question of housing, especially for men coming back from the Services, and it would be a great thing if the Chancellor would give consideration to the relaxation of the Purchase Tax—either by the overhead reduction of the tax or by the exclusion of certain articles such as furniture, and other things, which will be the immediate need of the ex-Serviceman when he succeeds in getting a house. That will certainly be most acceptable and, from every likely point of view, very advisable.

I want to refer to a matter which the Chancellor of the Exchequer did not mention, or if he did, only very slightly. That is the question of what is to happen to the sums which will undoubtedly be realised from the sale and disposal of the very large amount of capital assets, surplus stores, which we have acquired during the war. There is a perpetual blackout in this country with regard to our capital assets. I do not know, and I am not sure that the Chancellor of the Exchequer knows, the actual total of the capital assets of this country. It has never been disclosed. This most admirable White Paper contains little or no reference to them. While on that, I am wondering whether there would be any objection, or practical difficulty, in the White Paper being published in future years a little before the Budget Statement. It is a very valuable document and our discussion of the Budget would be aided very substantially if it were possible to have sight of that document a week or more before the Budget is introduced.

My right hon. Friend said that, taking the total expenditure of the war, a sum of £14,300,000,000 had been raised in one way or another for the purpose of capital expenditure. To that figure there must be added a very large sum in respect of capital assets—maybe wool, cardboard, land, buildings, machinery, factories, etc.—and in the course of time very large sums must flow into the Exchequer. If I am right in that, I want to suggest to him that we should have a self-denying ordinance, and that at least a substantial portion of the sum realised should be devoted to the repayment and liquidation of the National Debt, and I would ask that consideration might be given to that point.

I am tempted now to pass on to something which happened just before our discussion this afternoon—the statement made by the Minister of Fuel and Power—and to ask for a little more information and to make some comments on the present situation with regard to the subsidies in the Budget. The subsidies in the Budget are of the order of £225,000,000—a very substantial amount—and most of them are being devoted to the purpose of aid to agriculture, subsidies to the Ministry of Food, and also subsidies to promote some particular object such as the milk scheme. There is no doubt at all, from the economic point of view at all events, that these subsidies are necessary, so far as they are devoted to agriculture, to provide an adequate wage for the agricultural workers. However, there seems to be some confusion here in our national policy in this regard because when a question was put to the Minister of Fuel and Power from above the Gangway whether it would not be better to have a subsidy in order to help the mining industry and to keep miners' wages on a satisfactory basis, it was stated clearly that it was not the policy of the Government to subsidise the wages of the miners.

That was not put from above the Gangway at all; it came from the hon. Member for Cheltenham (Mr. Lipson).

My hon. Friend, I hope, will acquit me of any intention to saddle him or his friends with anything he did not say, but a reply was made announcing to an hon. Member of this House that it was not the policy of the Government to help the mining industry by means of a subsidy. However, that is precisely the policy being carried out with regard to agriculture. I would ask, therefore, if the whole question of subsidies could be clarified and the direction in which we are moving clearly indicated. There can be no question at this moment of doing away with the policy of subsidies; it would at once lead to a tremendous rise in the cost of living, something probably much more sensational than anything we have had during the war, and would probably put up the cost of living 50 per cent. or even more above the pre-war level. I notice my right hon. Friend shaking his head, but surely it would lead to a substantial rise in the cost of living, which would be followed by increases in wages and an inflationary spiral would be started at once. Just where do we stand?

It is quite clear that the amount of subsidy may increase. There may be larger quantities of subsidised foodstuffs coming into this country which would lead to an automatic increase in the subsidy. It is also more than likely that world prices, which are higher now than the prices at which wheat and other materials are being bought in this country, may rise rapidly. They are not likely to fall. In that case, also, there would be an increase in the subsidy. It would be interesting to know just what the policy is, and how far we intend to go, because we cannot go on for ever raising the amount of subsidy.

Is not this largely a question of definition? Take the example, for instance, of the proposed free and universal medical service for this country. Would the hon. Gentleman regard it as a subsidy to the medical profession?

One could, I think, develop that, and it would take us over education and other things.

But I was dealing with it in a more limited way from the point of view of our present Budget discussion. However, I shall certainly give some further thought to the suggestion made by my hon. Friend. There does not seem to be, so far as I can ascertain, any definite policy in this matter, and I want to make a suggestion in regard to our tax structure. It might be no bad thing to consider whether, with regard to the milk scheme, it would not be a good idea to carry out and, if possible, extend the very important thing referred to by the hon. Member for Seaham, namely, that we should deliberately fix the indirect taxation upon some less necessary articles and, indeed, luxury articles at a higher level than it otherwise would be in order to pay for the vitally important milk scheme.

I have had these points in my mind to mention to the Committee at this stage of our discussion, but I cannot disguise from myself the truth of what the Chancellor told the Committee, about the difficulties which confront us. They are formidable, but I have no doubt whatever that they can be overcome. We have to carry forward into peace some of the qualities which have stood us in such good stead during the war, one of which is courage to face what may be irritating circumstances. Above all we have to realise that whatever relaxation may come to us in the early days after the war—and everyone is entitled to some leisure—we can only win through by means of hard work and active development in every possible direction. That is the only possible basis. If there were any doubt as to whether we are capable of overcoming the difficulties which lie before us, I suggest that we look back over the history of the last five and a half years. There is nothing of which we have been frightened. We have shown that there is no task of organisation which, when we set our minds to it, we cannot carry out. We have also shown that if there is anything we want badly enough, we can get it. Democracy has stood its testing time and has come out of it well; it remains to be seen whether we shall do as well in peace. My own conviction is that we can and will.

5.27 p.m.

I do not intend to follow what the hon. Gentleman the Member for East Birkenhead (Mr. Graham White) has said in all particulars, but I was interested to hear his repudiation of the old Liberal doctrine of laissez faire, which he described as "snatch and grab." I would like to say a few words about the lecture on elementary economics delivered by the hon. Member for Seaham (Mr. Shinwell). I was able to agree with him in only two of his observations—one; that the Conservatives are concerned with the conditions of the people of this country; the other, the vital importance of reviving our export trade. Apart from that, I am afraid I found nothing in what he said with which I could agree. He said that if the future were left to free enterprise there was no guarantee that there would be the promotion of efficiency. It is all very well to talk of people making a mess and a muddle of things, but one thing the hon. Gentleman did not do was to indicate how handing over all our industries to the State or to the Civil Service gave any guarantee of increased efficiency. Every indication so far as we can see is to the contrary.

He gave the illustration of the coal industry. He referred to the Reid Report. I should have thought that the last 20 years would have shown to any impartial observer the disastrous effects on that industry of increasing State interference. I, for one, am in favour of paying high wages to the miners; I agree with the hon. Gentleman about that; but high wages must be related to one other thing that I did not observe him mention, and that was output. We know now that although the number employed in the industry have increased, output has decreased, and I should have been interested to hear whether the hon. Member was in favour, as is the practice in a Socialist country, of relating wages to output. I do not want to take up too much time in dealing with what he said. He referred to applying wise discipline and I suppose he meant that discipline should be applied to all equally and without any discrimination. He made a passing reference to the boot and shoe industry in Northamptonshire, and it seemed to me that he was under the impression that our children went unshod, and that that was the basis of his argument for putting what I think he called a bottom into the industry.

However, I did not get up to try to deal with the hon. Gentleman's speech. I rise chiefly to ask my right hon. Friend—and I join in the many congratulations which have been showered on him—to elucidate two parts of his speech. In the course of his observations on Tuesday my right hon. Friend referred to double taxation. I am a little sorry that we have not been able to achieve it all through the Empire, and that we did not make our efforts to do that in the Empire first before achieving it with the United States. My right hon. Friend said: quid pro quo was not received by giving that vast concession.

The other matter I wish to refer to is in connection with the existing treatment of foreign films which are exhibited in this country. Are the people who show films here allowed under the existing law to take back their profits tax free? If that be true, it seems to me that we are subsidising foreign competition with our British film industry in which, incidentally, I have no interest at all. If it be true that any part of the rent for foreign films shown here does avoid tax liability, I hope my right hon. Friend will say when that practice was started, what authority there was for it, and what sums have gone from this country in the war years, up to now, on that account. Beyond saying that I am fully in favour of schemes for avoiding double taxation, and preferably that they should first apply within the Empire, that is all I desire to ask about that matter. The Chancellor also said in his Budget speech:

5.34 p.m.

I have been in the House for a number of years, during which I have listened to many Budget Debates. What strikes me about this Debate is the comparative lack of interest which has been shown in it. It seems to me that the Committee is not facing the realities of the situation, because if anything postulates the effects of this war, it is the Budget which the Chancellor presented on Tuesday. As I have said, there is an apparent lack of interest. It may be that Members' minds are far away, and that they are thinking of a quick, or relatively quick, military victory, but the fact is that even after the military victory the problems with which the right hon. Gentleman is concerned will remain. I am surprised at this relative lack of interest not merely in the financial aspects of the Budget, but in the economic facts underlying it. I gathered from the Chancellor that we are in the transitional period from war-time to peace-time economy, and I think it is relevant to the discussion to try to ascertain what are the differences, if any, between war-time and peace-time economy.

It is true that during the war we have had a national effort. Everything has been subjected, as it were, to one overriding necessity—the winning of the military victory. The Chancellor has become the biggest customer in our economy. I was looking at some figures yesterday, and, speaking from memory, I think that in our peace-time economy personal purchases amounted to about 18 per cent. of the national production, while during the war the State has been a customer for between 60 and 65 per cent. of our national production, for the purpose of carrying on the war. In a war-time economy personal expenditure recedes into the background, and the State takes its place. I imagine that when the war ends there will be a complete reversal of that policy. The need for guns, bombs, khaki and soldiers will go—at least, we hope so—and the economy which is now devoted to fighting the war, and which is, in a way, a waste economy, will disappear. A welfare economy will have to take its place, and I am wondering whether we shall have the same great productive effort when that time comes as we have had during the war. I take it from the political outlook of hon. Members opposite that the State will recede into the background, will go out of commission, and that there will be more and more dependence upon personal economy, personal expenditure. The challenge before the party opposite is this: whether, in a peace-time era, a welfare economy can work, whether the same national purpose will be there whether the same co-ordination and organisation will be there, or whether we shall go back to the units that make up all national economy.

I have heard a great deal about export trade, and the Chancellor is giving his mind to helping trade by the relief of capital equipment. This nation must have more efficient capital equipment. It must produce more. Reliefs by Income Tax and various other devices are brought forward in order that British industry may be more productive. But is that the solution of the problem? Is it any solution to make British capital more productive, or our technical efficiency better than it was? Certainly, we should make our technical efficiency better. As has been said, the general well-being of the country will depend on the size of the cake but, on the other hand, the size of the cake will depend solely on the technical efficiency of British industry. Hon. Members opposite will not escape the crisis in the post-war world merely by an improvement of technical efficiency. History shows us plainly that of equal importance is the position of the common people, whether they can buy what modern industry can produce. Therefore, the solution of the economic crisis will not be found merely by bending our energies to extending our export trade.

It is generally said that we can export and import goods, that goods will pay for goods. But that is not the fact. Export trade, under our present system, is an export of capital. It is not an exchange of goods for goods. A most respectable representative of the financial classes, the late Mr. McKenna, some ten or 15 years ago, delivered a speech to the American Bankers' Association in which he said: impasse. We produce more than we can consume ourselves or exchange for the products of other nations—

Does the hon. Member really think the position has not changed at all since that was said? There has been a complete change in the position.

There is no escape from the terrific productivity of modern technical equipment under the existing system. Our people had not enough purchasing power to buy the goods we could produce; nor had people abroad the purchasing power to consume the goods we produced. There will be a more terrific crisis in America than there will be here. What I say is that the efforts of the Chancellor of the Exchequer should not be directed towards increasing productive power, but should be directed, now and in the future, to increasing the consumptive power of our people so that they can buy back what modern industry can produce. It cannot be done under a system in which private units produce. There must be a collective system. There is in the Library a remarkable State document from the American State Department which specifically states that the crisis in America in 1929 was due to the fact that the people there could not buy what America could produce and could not buy what was coming into the country from abroad. I have here a quotation from Colin Clark about the 1929 prices in America:

"At the peak of the trade boom in the United States of America in 1929, prices were slightly rising, but owing to technical improvements unaccompanied by a rise in wages, costs had been falling substantially. In order to maintain equilibrium throughout this period, prices ought to have fallen in accord with costs, or else wages should have risen in accordance with technical improvements. In fact, this was a period of headlong rise in industrial profits, due to a fall in costs unaccompanied by a fall in prices, which directly led to stock exchange speculation and hence to the crisis."

Profits were rising. Profits have risen during this war, and now take a greater percentage of the national income than they did before the war. Are horn. Members opposite looking forward to a period of prosperity after the war? Can this system be administered for human welfare? It can be administered effectively for the purposes of war, but economically the war is devastation. Capital assets have been destroyed to an unprecedented degree. Never has there been fought a war in which capital has been destroyed to such an extent as it has been in this war.

The hon. Member has given us an admirable exposition of Saye's Law which was established over 100 years ago, and which was completely exploded by Lord Keynes in 1936.

I do not understand Lord Keynes' monetary theories, but I say quite definitely that I do not believe, after a war of this kind, with its terrific capital devastation, you can easily enter under the present system of society into a world of plenty and welfare. This war has got to be paid for economically. One cannot escape high policy in relation to the Budget, because the Budget goes right to the heart of this policy. Particularly with the new line of the Treasury, the Budget is the instrument either of social well being or social ill, of economic progress or economic retardation. I sometimes wonder whether in the realm of high policy we have realised that there is what might be called the imposition of an American policy upon us. Europe is being devastated. For five years British economy has been devoted to expenditure economically upon waste.

I ask the representatives of the Treasury to tell us plainly whether, under their system of economy, out of this ocean of economic waste, devastation of capital, obsolescence of capital in this country and devastation of capital throughout Europe, they can say to our people in this Budget or in the next Budget, "Here is welfare, here is a rising standard of life." Can they build houses? Can they keep our people in employment? Up to now—and this needs no economic theory to prove it, for it is proved by experience—they have only been able to put people to work while we were at war. Our people went to work during the last war. During the period between the two wars there were deep depression and unemployment. Our people went back to work during this war. This means that under this system they can only give full employment when it is directed to waste. I ask hon. Members opposite and my hon. Friends on this side to face up to the terrific economic consequences of the last five years. Devastation has been rampant. The Chancellor should be concerned not merely with the symbols, with pounds, shillings and pence, but with high social policy, as he has been in this Budget.

Therefore, I profoundly disagree with those hon. Members opposite, and even those hon. Members on this side, who say easily that we can enter a new world and that a new Jerusalem will be built. The times before us are extremely difficult and rather dark. A national purpose will go from us when the war is ended, and there will be conflicting interests. There is a national purpose now in defeating Hitler, but that national purpose will go when he has been defeated. What national purpose can we put in place of it? Can we put in place of it the national purpose of human welfare? I hope so. But if we do, that national purpose will have to be built, as it were, on terrific devastation, on the most unprecedented destruction of capital assets the world has ever seen. I am sorry this Debate has not shown a live interest in this, because it is absolutely at the centre of things. The Chancellor of the Exchequer, in a war economy and more particularly in a peace economy, is the most important symbolic figure in the Government. What policy has he got? What policy has he for the export trade? That would be quite easy if it were merely an exchange of goods, but it is not so. Are hon. Members opposite prepared for a free world with free markets? Of course, they are not. They will still try to get watertight markets through the tariffs that have been raised before. It would be a good thing if the tables reappeared in one White Paper, and one would like to see less of the Oxford School of Statistics in it. One would like a little more plain English. But let that pass.

I do not think we ought to let that pass. I think this document is prepared with great skill and care and reflects the greatest credit on those responsible for it. It is a great advantage to have a document of this kind presented to us on the occasion of a Budget Debate.

Then it is my lack of intelligence. I cannot follow economic phrases which change from year to year. I cannot quite understand, incidentally, why there is not something there about the cost of living, as there was in the previous White Paper. After our experience of the last war, and the deep depression between the wars, with millions of unemployed, I ask hon. Members opposite what justification they have for any faith in the future. They ought to justify the system for which they stand, and give the people confidence that peace, which is essential to full employment, security and good will amongst the nations of the world can be obtained while their competitive system exists.

6.3 p.m.

It is refreshing to find that the Budget has given such general satisfaction at the moment, but this is tempered by the hope that its successor will bring a measure of well-deserved relief to the taxpayers. I congratulate the Chancellor of the Exchequer on the wisdom of his Budget. It is a cautious Budget, introduced in a very captivating statement by a cautious Chancellor. It clearly envisages a happier and better day for Britain and for the world. Later on Budget Day we had a herald of that better day in the switching on of the light in the lantern over Big Ben. The old world as we knew it before 1939 has gone. We have entered on a new stage of the world's history and we shall show our wisdom in adjusting our Parliamentary and national life to the new conditions into which we have come. If we are to make good as a nation and hold our place in the world, a readjustment of every part of our national life is essential for the welfare of the country. There is no use sitting down and whining and saying "If circumstances had been otherwise, what a different world we should be in." It is for us to face the future with courage, with our loins girt, and in a high spirit of hope and buoyancy. We are living in God's world and, despite everything that has happened, the best is yet to be. This should bring hope and encouragement to all of us, to go forward and achieve something greater and grander than has ever yet been achieved.

God has triumphed throughout the ages and He is triumphing again, and I stand by that four-square. What a wonderful God he is. I praise His name.

I am afraid we cannot discuss that particular question now.

I would not have mentioned it if the hon. Member opposite had not done so. What a grand thing it is that, despite every difficulty in the way, we have been able to cover by taxation over one half of our huge expenditure. It deserves to be written in golden letters on the pages of history. A nation with a record like that can lift up its head for it has a bright future before it.

I am very glad that the question of double taxation has been faced at long last. Such a proposal as that now before us was long overdue, and I hope that this difficulty, which has caused so much annoyance and vexation, will be pursued to the end in the interest of all. I hope this arrangement will not be confined to the United States but will be extended to all the countries of the Empire. It is pleasant to know that small business men are to receive some relief from Excess Profits Tax. That also was overdue. I am hopeful that in the next Budget the Excess Profits Tax will be reduced, and that the Purchase Tax will be brought to a minimum for all articles that we require for our ordinary comfort and convenience. The nation must be free to breathe again. We are hampered and hemmed in by controls; we must be given freedom to breathe by the removal of those controls. Those that are specially pressing on the people must be removed first, and, if we are to take our place in the world, and make our industries prosperous, and not only maintain but expand our export trade, we must have freedom of exports. We cannot do this if our hands are tied by war-time controls.

The hon. Member cannot go into the question of controls now, except such controls as, for instance, the limitation of consumption by taxes, say, on whiskey.

I bow to your Ruling, Mr. Williams, but the question will come up again. It is with pleasure that I state that Northern Ireland has played a noble part in the war. One has only to reread the letter which the Prime Minister wrote to Mr. Andrews on his retirement from the Premiership of Northern Ireland, to see what we have tried to do to bring about victory. At the most critical stage of the war we kept the Atlantic waterway open, and I hope that what we have done will not be forgotten. Last year we paid into the Imperial Treasury £35,000,000 of free money.

The hon. Member is boasting of what Northern Ireland has done. Is it not true that Northern Ireland refused to accept conscription?

That £35,000,000 represents £27 per head of the population, man, woman and child. I hope that will not be forgotten in the days to come. I put a Question to the Chancellor of the Exchequer regarding our contribution, and in his answer he said:

I feel very strongly that our finances must be raised from the mere material to the spiritual level, in order that they may be used generously for the promotion of the brotherhood of man as inculcated by the Lord Jesus Christ. They should be used in the coming days, to bridge the gulf between what have been called the classes and the masses. I am firmly convinced that that will be the uppermost thought in the hearts of men in the new world into which we are passing, and we neglect this at our peril. We are at the dawning of a brighter and better day, through the goodness of God in granting victory to the cause of right. If I could speak to the nation from the Floor of this Committee I would say: Let us, as a nation, never forget the goodness and mercy of God, and let us walk humbly before Him, and carry out the advice of St. Paul, to work with both our hands and "to live soberly, righteously, godly." That will meet both the spiritual and economic problems of the coming days, and I am convinced it is the only highway to the brave new world we are anticipating—the brave new world of prosperity and enduring peace.

6.17 p.m.

Every hon. Member who has risen has congratulated the Chancellor of the Exchequer on his Budget speech. I feel that I should have congratulated him, had he been present, on enduring the Debate in the way he has done. It has been a trying time for me at any rate. After Question time to-day there was a dramatic incident when the House was informed that the price of coal was to be increased by something like 3s. 6d. per ton. There were signs of apprehension in the House that such an increase would not only be severe on the poor, but would also be detrimental to the industries of the country because of the wave of the cost rippling through industry. I looked at the Chancellor of the Exchequer when this discussion of coal was taking place, and he preserved his calm, classic manner. I wondered whether the House really connected the Chancellor of the Exchequer with the circumstances which have given rise to this increase in the cost of coal. Here we are wanting coal. For years we have expended vast sums of money in order to induce more coal to come out of the earth. New machinery is now being installed, some of good quality and some of doubtful quality. Commissioners have been appointed. I was thinking the other day that if the Minister of Fuel and Power got from the earth as many tons of coal as he has appointed new officials in his Department, we would not be suffering from a coal dearth at the moment. But we have gone to all this expense, and set up this elaborate bureaucratically-governed coal industry, and less coal is coming out of the earth.

One of the things you should do if you wish anyone to render you service is to encourage him to the fullest extent in paying him for the service he renders. But what are the facts about the miners? In his Budget speech, the Chancellor seemed to take a certain amount of credit to himself for having realised £540,000,000 out of Pay-as-you-earn. When you want the miners to produce more coal you proceed to tax their wages. I wish to say this to the Financial Secretary in all sincerity: If you relieve the miners of the tax on their wages now, you will get more coal out of the earth than you want. I state that as a direct challenge to this Committee. Take the taxes off the miners' wages and you will get more coal than you want. Not merely is it noticeable amongst miners. On the farms, farmers will tell you that Pay-as-you-earn is making agricultural labour begin to slacken off in parts of the week. The Committee will have to face this; whenever the worker comes to the point when he knows he is getting into peril with the Chancellor of the Exchequer—I hope the Financial Secretary will take this sincerely—

The purpose of having a Debate on the Budget is to find out whether the economic effect of the taxation is detrimental to the progress of the community, and that is what I am trying to find out. It is an undeniable fact that, in every form of industrial activity the moment employees reach that day in the week when they know the Chancellor is going to operate in gathering Income Tax, they immediately slacken down. I challenge the Treasury and the Committee on this point. It is no good saying coal will cost us 3s. 6d. more per ton. It is no use saying, as I heard this afternoon, that if you give wages there must also be production. Naturally, it is an honest contract that if you are given a good wage you should have the decency to meet the other side of the contract and give full service in return. But in the middle of the contract comes the Chancellor of the Exchequer who says that in proportion to whatever one is producing in coal, the greater will be the tax levied week by week in Pay-as-you-earn.

Nothing is more distressing than to observe the superficial manner in which the Chancellor and hon. Members treat this, as if it were just a matter of saying "We want to get more money as a matter of expediency," and then look around the emporium to see where they can obtain it without any regard to the results of that form of taxation. I heard a speech this afternoon by the hon. Member for Seaham (Mr. Shinwell) who spoke for a full hour. I was interested to know whether he would deal with the Budget, but he did not. I am always interested to find out how far the hon. Member understands an economic problem when he sees one. Yesterday there were two speeches of much interest, and one of them was by the right hon. Gentleman the Member for East Edinburgh (Mr. Pethick-Lawrence). He said that with heavy taxation levied upon industry, it was not likely that private individuals would undertake hazardous industries if they found they were going to pay 19s. 6d. in the pound on their profits. He truly said that it would have the same effect if you levied taxation on the earnings of the worker. The hon. Member for Seaham seemed to think it did not matter where the taxes were placed. He said to-day that it was nonsense to speak about relieving industry of taxation. When taxation is levied upon human effort, whether it be private or public, then in proportion to the taxation, you make it lose interest and, as it were, dispirit it. That is a psychological fact.

We had another speech from an authority on finance, the hon. Member for Chesterfield (Mr. Benson). I listened and I was astonished. Whenever the Chancellor is not quite sure if he has every taxpayer in the bag, you can always depend upon the hon. Member for Chesterfield to tell him how to catch them. I am sure if I went into the Treasury I would find in their Department more devices for catching tax-evaders invented by the hon. Member for Chesterfield than by anybody else. One merely has to look at HANSARD. The hon. Member said if Income Tax became too heavy it was a danger. Now he is asking the Chancellor to have a review of the economic effect of Income Tax. I never thought the day would arrive when he would come to that. I derive a certain amount of consolation from the fact that the right hon. Gentleman the Member for East Edinburgh recognises that taxation can become dangerous to industry and to human effort if levied beyond a certain, point, and that the hon. Member for Chesterfield is, at last, beginning to see that Income Tax may became a veritable wasp among producers. He is asking the Treasury to have an inquiry to ascertain the effects of Income Tax. I ask the Committee to look at the Report of the last Commission; it is a vast volume, and a more crazy document one never read.

What are the facts about taxation? There is nothing difficult about it. It is the simplest thing, and should be discussed in this Committee. It is only complicated because we are not just when assessing the wealth of the community and deciding where the taxes should be levied. There are only two places where you can levy taxation. You can levy taxes upon the value of things produced by human labour, or you can levy taxes upon ground rent. Those are the only two bases upon which you can levy taxation. The more you levy taxes upon the value of things produced by human labour, whether they be commodities or income, the more you increase the cost of production of things, and the more you dispirit the man who produces if you levy taxes upon his income. That is what we do in this country. I say this to the Committee in all sincerity; it is about the fourth time I have said it, I think. The Physiocrats, who were the fathers of political economy, declared that taxation, if rightly used, could raise the whole community, and taxation, if wrongly placed, could lead finally to bloody revolution. Where are we going now? Can any serious Member of this Committee look at taxation as it stands now, and look also at the future facing the industries of this country, and believe that we can carry this heavy taxation on our industry and enter into competition with other countries not carrying the same weight of taxation as ourselves?

Take housing alone. We want more houses and we are devising schemes for producing more houses. At the same time we in the House of Commons are passing Acts which will throw dead weights upon houses and make housing an impossibility, because we are levying taxes upon human effort and upon the products of men's hands. When are we going to wake up and see that that way lies destruction? The miner says, "I am not going to work for John Anderson after. Wednesday night," or as they say in North Staffordshire, "I inna gon ta work for Anderson." When I meet men who have business concerns I find that they too resort to all kinds of devices in order to avoid taxation. It is the natural disposition of men to resort to devices to throw off taxation which is levied upon their industry and their effort. I want the Committee to look at this tendency in all seriousness. It is not complicated. Taxation can only be levied upon two bases. I repeat, you can tax industry and the fruits of industry and as you do so, you increase, in proportion, dispiritedness and disgruntlement; or you can levy taxation on the value of land.

Perhaps the hon. Member will forgive me for interrupting, but suppose I had a piece of land. [HON. MEMBERS: "Hear, hear."] I nearly had a piece one day. Suppose we altered the bases of taxation and adopted taxation of land values. A fellow is going to build an industry on my land. Do I charge him a big rent for the land, or do I charge him a small rent, and take a bigger share of his industry?

I think that what my hon. Friend means is that he would pass the taxation on to the user.

No. Suppose I have a piece of land. [HON. MEMBERS: "Hear, hear."] I am only supposing. As things are now, I might charge £1,000 a year as rent. Suppose the basis of taxation is changed to the taxation of land values. Suppose somebody comes to put an industry on my land. Should I say to him: "Instead of charging £1,000 a year as rent, I will give you the land at a rental of £1 per year, and you can give me a share in your industry"?

Let me tell the hon. Member what will happen. I must meet this point swiftly. A valuer will value the site as though there were no building on it. He will ask himself what that site would sell for in the open market, apart from the value of the improvements on it, and the tax will be levied upon that figure, whether the owner has a part share in the factory or not. The matter is simple, and yet it seems to evade even the brilliant brain of my hon. Friend.

Taxation is levied on the land, and on what is called its market value. What the hon. Member is asking for is increased value, as a result of building on that land, in order to bring in the taxation that will meet the needs of the country. Those on the other side are clever enough to arrange it so that the increased value of land does not appear in the rent, but appears in an entirely different form.

I merely want to give satisfaction to my hon. Friend, since I have been asked a question and—

I do not mind either hon. Gentleman discussing this matter, since it is perfectly in Order to discuss alternative methods of taxation in a certain way, but if this little argument is to become a private discussion between the two hon. Members, it is getting rather away from the Budget.

Some hon. Members of this Committee do not understand that the value of the land grows with the population upon it. The value of the land is easily ascertained, and forms a just basis of the taxation. I want to stress that if the House of Commons will not face this matter seriously, the result will be very ruinous. This is not a matter of party politics, God knows. The science of economics knows nothing about political parties. It is a science. You might as well go into a chemist's shop with a prescription, and say: "Make this up Labour Party," or "Make this up Tory Party."

The present canons of taxation are leading this country on to the road of ruination, for the taxes are increasing year by year. We have an ironical situation. Poverty is clamouring for more State charity, while unemployment, which is caused in its early stages by land monopoly, is clamouring for Beveridge and so-called security. The State has no money at all except what it can wring out of the taxpayer. We have an economic system which is constantly creating poverty, in a state of society where men are becoming humane and intelligent. When men see other men suffering from those evil effects, they become emotional and fly to Acts of Parliament in order to give something back to the people who are in poverty. Economic forces work constantly creating unemployment and poverty, yet we come here moving for more Acts of Parliament, for more doles and more insurances. I well remember the present Lord Chancellor stating at that Box: "It is now an accepted principle of the Treasury to use taxation to distribute the wealth of the community." What does that mean but the slave State? That is all it means; one part of the community is to be heavily taxed to make up the income of those who are being starved on the other side of the scale. That means a vast army of bureaucrats at the Treasury watching the men with incomes, and clawing some of it in, and after deducting their own salaries out of it, hand over the residue. What a damnable conception of society. God did not create poverty. It is here because we, who are supposed to be statesmen, do not bring ourselves seriously into tune with the fundamental laws of justice.

There are two great principles that must guide civilisation and must be watched by those who come in here as Members of Parliament.—By the way, when a man becomes a Member of Parliament, he is supposed to know the cause of poverty and how to cure it. I wonder how many hon. Members would pass an examination to-night on the subject.—The first of the two things to be watched are: What is the relationship of the community to free access to natural opportunities, and how far can people within the State freely use their labour power to produce the things which they want from the earth, the land on which they live? If that principle is restricted in any shape or form, unemployment is inevitable. Next in importance to labour and land is: How is taxation levied? One of the most famous statesmen in the House of Commons said: "By the process of indirect taxation I can take the shirt from a man's back and he will not know how I did it." Bismarck, of loved memory, when he became the first Chancellor of the Federated States of Germany, said: "I am going to assume the canons of indirect taxation, for psychological reasons." What were they? They were that if you put your taxes in the teapot, the coffeepot or on the silk stockings, the people do not see you, but you get the taxes all the same.

Indirect taxation has effects which have been noticeable in Germany as in this country. So long as the poor knew that direct taxation was being levied on the rich they clamoured for more State subventions and enjoyed it. In fact it became a canon in their minds, that it was the rich who should be "soaked" by taxation so that they themselves could get some back, through the circuitous route of the Treasury. But when someone kindly puts in front of the Chancellor the fact that he has got beyond a certain mark in taxation and that the so-called upper-classes cannot bear any more, he is forced to put a little direct taxation on the working class; and then the trouble begins. I warn the Chancellor: Take off your Pay-as-you-earn nonsense, if you want to avoid revolt in this country. I warn him that it is damming the effort of production I say to him, "If in pursuit of this mad policy you put more direct taxes on the workers, as sure as we are in this Committee to-night, bloody revolution will be the reply." I am not exaggerating. Carlyle said there was no force more potent for driving men to revolt than taxation. We are on the road now. I say with all solemnity to the Front Bench and I wish Sir John Anderson were in his place now. [An HON. MEMBER: "Where is he?"] I do not know and I do not blame him. Sir John—

I should have said "The Chancellor of the Exchequer." I forgot for the moment, and I apologise. I am not blaming the right hon. Gentleman for being absent. [An HON. MEMBER: "I am."] No, because we were here together, and we had to suffer some very long speeches. I do not know how some people can get up here and bore the Committee for over half an hour.

I will finish my speech now. Whatever laughter we may get out of it, this is a serious matter. I ask that the Chancellor shall look into this matter, because I consider it is a potent danger to the State, and will be a greater stimulus to reaction than the increases in the price of coal. I should not be surprised if people began to say that those increases are due to the miners wanting more wages. There are three basic industries in this country, coalmining, agriculture, and the sea, and the men who work in them should be the most highly paid workers in the State, instead of being right down at the bottom.

I do not want to interrupt the hon. Member more than I can help, but we cannot discuss rates of wages. If one hon. Member does it, some other hon. Member who follows will want to do the same. We can only refer to the present level of taxation, and methods of raising the money.

I can assure you, Mr. Williams, I have enough knowledge of our procedure to respect the Chair and to keep in Order, and I would remind you that we are dealing with a new state of affairs, a Budget which is taxing wages. I cannot avoid referring to it, but I am pointing out that three industries are basic to the operations of Great Britain, and that instead of the wages of their workers being taxed those workers should have a far better wage than they are now getting, and it should be tax free. The moment you put taxes upon them, their reaction is to produce less. The Government can go on spending money upon American machinery, as they are doing in my constituency—I go down and have a look at it occasionally—but no more coal will come up. I am in a challenging mood and I again say, that if the Chancellor takes the tax off the miners wages, we shall get more coal than we want.

I want to rebut the argument that is very often put up that miners' wages cause the high price of coal. We should give the miner three times the wages he is getting now as an encouragement to him. If I had to dig coal for a living, I should want £15 for a one-lb. bag. I know the lives that the men live in my constituency, and I say that the miners should not be blamed for increased prices, a statement that has been made here today. An attempt will be made to say that the miners are to blame for the increase in the price of coal. I want to lay the blame where I think it ought to be put. Taxation has been the main cause of less coal being brought up, side by side with greater expenditure in an attempt to encourage the production of more coal.

I again ask the Committee to do something, to underpin Great Britain, not weaken her by false canons of taxation. I ask that, not for my sake nor for any Party's sake. I speak now in this corner of the Committee with a certain amount of latitude, not bound down by Party Whips or Party aspirations. I speak my mind with freedom. I think every man who comes to this House should do so. I am doing so, free from any inclination to pursue a Government job in the near future, nor to please a Party Whip. I am speaking with all sincerity, which will I hope at least claim some attention from the Treasury Bench. Why do I ask what I have just asked? It is for this reason. Great Britain to-night stands as a bulwark against a flood of tragedy on the Continent. To-day we are the only country that can shed the light of civilisation on a distraught Europe. If we go down, civilisation in Western Europe is dead. It is for that reason that I am in all sincerity urging the Committee to look to it that no false step is made at the Treasury, which is at the centre of Government, that will lead to the destruction of our country.

6.47 p.m.

The Committee will have listened with great attention to the very exhilarating and spirited speech of my hon. Friend opposite. I knew when he rose that somehow or other we should get round to the taxation of land values, because I can recall the number of times he has identified himself in this House with acceptance of a false economic principle. Indeed, if he looks back to the time when under the guidance of a now departed statesman, taxation of land values was decided upon, he will recall the effect of that taxation upon the building of houses for the people of this country. At that time housing of the people was brought to a standstill, because of the production of a Measure for which that great statesman was responsible. I think the hon. Member will realise that in the course of one or two Budgets provision made for revenue from that source had to be washed out of the Budget preparations.

We have had a very interesting speech this evening from my hon. Friend the Member for Down (Dr. Little). I mention that only because he has given evidence of what Northern Ireland has done for the maintenance of our public finance in this country. I am glad he has the courage to speak to the Committee, not only because he indicated the outstanding part of Northern Ireland in contributing to the finances of the nation, but because of the high level to which he raised the Debate during the presentation of his case. We had this afternoon a very remarkable eruption, a volcanic eruption, from the hon. Member for Seaham (Mr. Shinwell). We are all acquainted with the seismic disturbances for which he has been responsible in this House over so many years. What does he want to substitute for the present Budget, for the present system of public finance? He would introduce the State into everything, as a guide and directing influence in the whole of our industrial and social life. I submit that it would be a sad day for this country, for industry and for the social outlook of our people if the State took control of our destinies in the way he indicated. How did we get and maintain our financial power in preparation for the prosecution of the war? How did we maintain the necessary public finance in the course of the war? It was because private enterprise in this country had produced the resources, maintained the organisation and was responsible for the means by which public finance could be maintained, as it has been during the war.

The hon. Member for Seaham spoke about unemployment and dealt with the coal situation. I am sorry he is not present, because I am averse to saying anything about an hon. Member who is not present. I do not intend to say anything very hard. He talked about unemployment and the difficulties of the coal situation, and gave his own version of the policy which should be followed. He was himself at one time a Minister of the Crown, responsible for the policy affecting the production of coal. I would like to know what contribution he made at that time to the solution of the coal situation.

I am sure the hon. Member will be prepared to give a testimonial to anybody who is at variance with hon. Members on this side of the Committee. There are two matters to which I should like to call attention. I have heard every Budget speech in this Committee since 1921, and I think the Chancellor has been more complete and more logical, conveying more the spirit of his own personal competence, than I have ever known a Chancellor to be. I believe his speech is a tribute to the value of private enterprise in the industrial life of the country. [An HON. MEMBER: "What is private enterprise?"] Private enterprise makes people work hard, makes profits and pays the people properly—

Is it not the case that before the war, under private enterprise, more than 2,000,000 people in this country were not working at all? How does the hon. Member suggest that it makes people work harder?

Private enterprise before the war had sought to secure the home market of this country for our own people. Until we had that protection after the passing of the Ottawa Resolutions in 1932, we were helpless in dealing with that problem, to the solution of which neither the hon. Member nor his friends contributed any help worth a twopenny ticket. I wish to support the suggestion made by my hon. Friend the Member for Walsall (Sir G. Schuster) that an industrial survey should be made of the productive capacity of the country. Since we had the first census of production, which was carried out with so much care and skill by the noble Lord who was then President of the Board of Trade, we have had no survey which would enable us carefully to scrutinise the distribution of taxation over the various sources of national enterprise. I hope the Financial Secretary will treat that suggestion seriously, and that it will be made a part of the policy of the Government in the future. I wish also to support my hon. Friend the Member for Walsall in his suggestion that there should be a national balance sheet from year to year, in which income and expenditure would be related to the taxable capacity of the country. That has not been done up to the present, and I hope that the suggestion will be taken into account by the Treasury.

I am very pleased, because I am interested in some American concerns, with the work done by the Treasury in the more careful adjustment of double taxation, but I think they must go a little further. Above all, in relation to the future of our public finance in this country, we shall have to take careful note of the immense development of productive enterprise in the United States in order to secure the best possible part of the world's markets. I was glad that some reference was made to a Birmingham enterprise as showing what can be done by careful and thoughtful examination of a longdistance outlook in industry. During the last two years Cadbury Brothers, in Birmingham, have issued publications of a most helpful and most provocative character from the point of view of progress in industry. I would commend these publications to my hon. Friends in the Committee. They certainly show what thought, careful examination of possibilities and research into market possibilities overseas, have gone to build up the great enterprise for which that firm is responsible.

In relation to our taxation and our future financial power, I see danger in the present position with which we are confronted in the United States. Over the last 12 months, at least, a great organisation has been built up in the United States in preparation for production for world markets, as soon as hostilities cease. Mr. James F. Byrnes, chief of the great production machine, released 25 per cent. of the whole United States productive organisation, in preparation for post-war trade. This country, because of the limitations imposed upon it by the exigencies of war, has been unable to do anything of that kind. In the last 12 months 25 per cent. of the immense organisation of the United States has been engaged on the production of articles to strengthen her competitive power in every part of the world.

It is not. I advocate the profit-making motive. I do not see what point there is in that interruption.

There was not much profit out of the system pursued under the taxation of land values. Take the shipping industry, one of our sources of invisible exports. I have in my hand a report from the United States Bureau of Information in London. The figures, for shipping alone, I commend to hon. Members for our ports. This report dated 22nd April, says that the total of ships launched up to 1st January, since 7th December, 1941, numbered 5,930. These include ships of 16,700 tons, three Liberty ships of 10,500 tons, and seven Victory ships of 7,800 tons. I give these figures to indicate what we have to face in the shipping industry alone in competition with the United States. I hope that the Chancellor of the Exchequer, whose wisdom and kindly understanding in all these matters passes all praise, will exercise his ingenuity and skill in dealing with the United States to get an understanding that we should have a fair share of the competitive market of the world vis-á-vis the United States.

I wish the hon. Member for Seaham would give a little more generous thought to the problems arising out of the war. His speech was a masterly example of flatulent oratory, which did not make one single convincing point. I was glad to hear the tribute paid to him for the admirable quality of his speech by my hon. Friend the Member for Burslem (Mr. MacLaren). I have no doubt that the hon. Member for West Fife (Mr. Gallacher) would have paid him a compliment in the same admirable style.

For the annoyance that he has given to the hon. Member and his associates.

We are facing a most difficult time, and it is sad to see how few Members are present in this Committee. We are dealing with problems of vast consequence, not merely to the future of our own country and of the Empire, but to the future of the whole world, and I am ashamed that so comparatively few Members have come here.

I am certain that if the hon. Gentleman took it into his head to deal with the profit motive as it affects his own interest, and his sympathy with the Russian peoople, we should have a much larger number of Members present. These great problems have to be faced, and, as an old Member of this House, who has been in public life for 40 years, I deplore the fact that we have to fight a party election. The responsibility resting upon the Members of this House who come back after a General Election will be just as great as, if not greater than, it is at this moment. I deplore that fact that we are driven to a General Election at a time when the full thought and constructive genius of the country ought to be directed to solving the problems of the future. My hon. Friend the Member for Edgbaston (Sir P. Bennett) said that the Chancellor has not given us a lot but he is doing a great favour to the little man. That £12,000,000, small as it appears in this gigantic Budget, will be a great blessing. The Chancellor's last Budget and the present one are really helpful measures for the industry of this country. No Chancellor that I can remember has taken into consideration more carefully the effect of his financial provisions for the year on the progress of industry and the maintenance of employment. Therefore, I congratulate my right hon. Friend upon his work, and I say that the Committee ought to be grateful to him for the contribution he is making to the future welfare of this country.

7.7 p.m.

The Chancellor of the Exchequer has received general congratulations upon the Budget, and I think one of the reasons is that it is a Budget that most people expected. It is a standstill Budget. The hon. Member for Moseley (Sir P. Hannon) showed that, while he appreciated the Chancellor's general outlook, he has a great deal of misgiving about the future. The hon. Member for Burslem (Mr. MacLaren), in a speech along the line that he has advocated for many years, also took a somewhat pessimistic view. I must join in this pessimistic outlook. I would appeal to the Chancellor, even at this late hour, to consider some relief to people of small incomes. The class that I have in mind particularly are the old age pensioners, the people with small fixed incomes, and those receiving only a small wage.

The hon. Member for Burslem pointed to a very serious matter in connection with recent developments in the payment of Income Tax by manual workers. The Chancellor of the Exchequer has reduced the personal allowance to such a small sum that many of those people have been gathered into the Income Tax net. That is against good canons of taxation. It is a gross abuse to tax people upon the necessaries of life: the burden should fall upon the luxuries of life. Many people with small incomes have a very hard struggle to make ends meet, and the Chancellor has now so much lowered the figure at which exemption from Income Tax can be claimed that those people are caught in the net. Their contribution is not much to the National Exchequer, but it means hard suffering for them. The Chancellor should consider, even in this Budget, making some concession to those people. The hon. Member for Moseley complimented the Chancellor upon what he was doing for the small man. If he can do something for people enjoying excess profits from their small businesses, all the more am I justified in making a claim for the old age pensioners, the people with small fixed incomes, and the people with small wages. I am greatly disappointed that he has not tried to meet the demands that the old age pensioners have made in recent years. They have not asked for much, and I deplore the fact that another Budget has been introduced without making any concessions to a section who possibly have had a more difficult time during the war than any other.

When I was in the Labour Party, when some of us pressed for a more violent direct frontal attack upon the party of privilege and wealth opposite, we were often told to wait until the Budget came, and that then we would see the opening of a fierce campaign. I have heard many Budgets introduced. There has been a penny added here or sixpence put on to the Income Tax; and sometimes the Chancellor has been able to take a few pence off the Income Tax; but at the end of the day the position has been pretty much the same. We have had a Labour Chancellor of the Exchequer, backed by only a minority in the House, introducing Budgets which did not make any fundamental change. I have heard many Budgets, and I begin to wonder whether we are really not living in a madhouse, with the Chancellor as the mad hatter who is in charge of affairs. The right hon. Gentleman will appreciate that I am not referring to him in particular. Perhaps he is not as mad a hatter as some of the other mad hatters who have preceded him in this office. [An HON. MEMBER: "He is not a hatter."] I agree that one of his colleagues may be more of an expert on hats that he is. The reason I say that we are living in a madhouse is that the Chancellor has told us we have spent £25,000,000,000 in order to secure victory in this war; that people are now meeting at San Francisco to provide for future peace and security; and yet we are assured that in the years after the war we will be spending hundreds of millions per annum more than we spent in the years preceding 1939 on the instruments of death and destruction. Is there not much to be said for the idea that there is something of the madhouse in the state of the world? If, after spending all that money to win the victory, we are going to spend hundreds of millions on armaments in succeeding years, we are certainly not winning the peace.

If the hon. Member had a house which he forgot to insure, and it was burned down, would he not be inclined to be not so forgetful afterwards and take out an insurance policy when he rebuilt his house?

My hon. Friend raises an analogy which is not sound. Let me deal with the facts that I have put forward in connection with this expenditure upon armaments, and not with the expenditure upon some supposititious house. I could say something in regard to the expenditure on housing—

The hon. Gentleman knows that this is not an occasion for discussing expenditure. The Committee of Ways and Means deals with the raising of money to meet expenditure.

I was a little carried away, and I will perhaps be pardoned by you, Major Milner, when I say that I was thinking of the tremendous housing scandal in my own Division, to which I hoped to refer. I am surprised that the Chancellor and his colleagues seem to show in the Budget so little appreciation of the difficulties that we shall have to face in the future, and so little realisation of the fact that, if we are to deal decently with things in the future, we must arrange matters in accordance with a completely different monetary policy. We shall also have to overcome the weaknesses that arise out of the private ownership of the means of production, distribution and exchange. We certainly cannot go back to the old private profit economy.

The Chancellor said that the Government were ruled in connection with the Budget by their policy of full employment. When I read his words, I looked once or twice to see how he spelt the word "full." I felt that if he spelt it "fool," he would have come nearer to the truth with regard to the possibilities of the future, because, as far as I can see, we are to be guided by a very foolish policy. There is no prospect of full employment in future along the lines indicated by this Budget, that is, along the lines of seeking to develop prosperity by private profit in industry. The hon. Member for Moseley spoke of the need, if there was to be a prosperous future, of the Government doing all they can to further private enterprise, free enterprise and free competition. Yet, in his closing sentences, he pleaded with the Chancellor that we should not have competition with America, but should try to get co-operation instead. Look at the tremendous production of shipping by the United States, he said; could we not, instead of going into fierce competition with them to capture markets, have a policy of co-operation? There is the greatest lack of that co-operation in the discussions that take place about our budgeting for the future.

I am hoping that some day soon we shall have a Chancellor who will budget on a different basis altogether. I hope that he will not take as his fundamental problem how to raise a certain sum of money by the imposition of Income Tax, but will regard as his fundamental problem how to make provision for the human needs of so many millions of men, women and children, and so arrange the national Budget that their needs will be satisfied. I hope that he will, in order to do that, so arrange the Budget that the whole potential of production will be utilised, so that the whole resources of the country will be at the disposal of the people. In that way the mental and spiritual abilities of our people will be raised, and we shall achieve a real social system that will provide peace and plenty for all.

7.28 p.m.

However much I may disagree with my hon. Friend the Member for Camlachie (Mr. Stephen), I agree with him that war is madness, and I hope that he will support any proposition put forward by the National Government to prevent it in the future. The Chancellor has heard many compliments for his Budget speech, and I would like to add my measure of congratulations. I hope that he will in the next few months consider the Entertainments Duty so far as it affects sports grounds. I have especially in mind such places as Lord's Cricket Ground, where the M.C.C. not only arrange cricket matches which we all enjoy seeing, and which give such a tremendous amount of relaxation, but also arrange for the youngsters to play and practise cricket. That is good for them, not only from the point of view of physique, but from the point of view of character building. There are many large county and other sports grounds which are suffering owing to the high Entertainments Duty. I do not ask for anything to be done at once, but I would like it to be considered, because one knows that the Treasury need a good deal of time to consider any relaxation of taxation. I hope that the Chancellor will give some attention to my plea and ask his officials to see what can be done.

We are all hoping for a speedy end of the war in Europe, and hope that the war against Japan will not last much longer. When all the people return home, we hope that their hours of work will be fewer than in the past and that there will be more leisure for grown-ups and youngsters. We, therefore, want to give them opportunities of healthy recreation and relaxation. All these sports clubs have approached me because they know I am keen on sports and on the health of the youngsters, and I submit this suggestion to the Chancellor with confidence.

7.30 p.m.

I would like to pay my tribute to the Chancellor of the Exchequer for his second Budget, which he introduced on Tuesday. I would particularly stress the great value which I think the country will attach to the White Paper which has been presented to the House. It included statistics of a most unusual character, and gave a fund of information, in connection with which I will have a little to say later. The Budget can be divided, I think, into three parts. The first one made a start in the reduction of taxation. It is quite true that my right hon. Friend did not give a great deal away. Nor do I think that was expected by the House or the country. Secondly, he dealt with the removal of double taxation, which will be of very considerable advantage and will have reactions and repercussions which can only be to the advantage of industry and the country. Thirdly, my right hon. Friend laid emphasis on our country's position in relation to balance of payments and stressed the need for a speedy increase in our exports. I would especially pay my tribute to my right hon. Friend for his consistent policy in advocating cheap money. I think it is a remarkable tribute to him that, during the last 25 years, the interest on the National Debt has increased only from £328,000,000 in 1920–21 to £420,000,000 for the financial year just ended. That shows an increase of only £92,000,000 per annum, and that is equivalent to rather less than 1s. in the £ on our income tax. This includes the period of five and a half years of the greatest war in our history.

I would direct the attention of my right hon. Friend to one point which I regard with considerable misgiving. I refer to our overseas investments. My right hon. Friend, during his Budget speech, referred to the fact that we have lost a great proportion of our investments overseas. They have been reduced by no less than £1,000,000,000. To-day, we have incurred liabilities abroad to an amount of some £4,000,000,000, whereas, before the war, we were a creditor nation to the extent of approximately £3,500,000,000. The point I would specially impress on my right hon. Friend is that I would like to see them give a little more consideration to conserving those investments which are still held overseas, and which, in amount, still approximate to some £2,000,000,000. One only has to view the amount of money invested in the South American countries. In those countries—I give as an illustration the Argentine—we have some £400,000,000 of British money invested in railways, and my right hon. Friend might give a litle more consideration to those investments and that we may get a fair deal so that the interest payments which they are in a position to effect are made. The countries in South America have adequate sterling or dollar balances with which to meet their obligations, if they were disposed to do so, and I believe that, if the Chancellor will take an active interest in these investments, it would be possible, by mutual agreement, not only to enhance their value, but to increase the invisible imports to this country in the form of interest and dividends. These in their turn, will pay for the raw materials, and, in particular, for the feeding stuffs, which we are purchasing and will have to continue to purchase from the South American countries.

I feel that the whole policy of post-war taxation should be directed towards encouraging economic incentive. In the interests of the nation, it is essential that, for the post-war years, everyone should contribute their maximum effort, and, at the same time, consume as little as possible, because goods will be scarce and the development of our export trade will be essential to achieve this end. Indirect taxation, in my opinion, should be kept high, including the Purchase Tax and luxury taxes, in order to discourage spending. Relief should take the form of a reduction in the standard rate of Income Tax as soon as practicable and to the maximum amount possible. Excess Profits Tax should be removed entirely at the earliest opportunity, in order to give the incentive, initiative and enterprise to industry which are conspicuously absent now. A style of taxation which, in effect, virtually makes the Government the senior partner in industry cannot fail to have the widest and most serious repercussions, and, if pursued in the post-war period, may have far reaching and decisive results as regards the future of trade and industry in this country.

My hon. Friend the Member for Burslem (Mr. MacLaren) made reference to-day to the incidence of Pay-as-you-earn, and I agree with him in the point he made that it had a direct effect upon the output of industry. Those of us who are engaged in industry know perfectly well that no man or woman pays, with any degree of pleasure, his or her Income Tax, and when they arrive at a certain point, that is when one-half of the earnings are deducted in the form of Income Tax, it is only human nature that they should not give the same amount of energy and initiative to production as they would do if there were no Income Tax. But we all appreciate that Income Tax is a part of our method of raising money for the national revenue and that it is one generally accepted as fair and equitable. But I want to suggest that my hon. Friend the Member for Burslem should have gone further and indicated that it is not only the working man and working woman who is bearing the incidence of taxation to-day. The high rate of direct taxation, which I claim has passed saturation point, has a direct bearing upon those engaged in industry. It is a fact—

Is it not a fact that there is more employment and greater production per man to-day, when the taxes are high, than there was before the war, when the taxes were only half as much?

Yes, that, of course, is generally accepted, but the reason is to be found in the fact that we are at war. No one raises any objection to the high rate of Income Tax and Surtax which prevails to-day but willingly accepts it as not only right but inevitable, but I wonder how many of my hon. Friends have had an opportunity of studying the statistics given in this White Paper. There, they will find that, in 1930–39, in the whole of the British Isles, there were 7,000 people who had a nett income of £6,000 a year or over. How many of my hon. Friends appreciate the figure to-day? The official figure shown in the White Paper is 80. One cannot expect the great industrialists in this country to risk losing their capital. Perhaps they may have to put £250,000 into some enterprise, knowing that, however successful it is, they could not retain more than £6,000 nett profit and risk losing the whole of the money which they had put into that enterprise. During war-time, that, of course, is accepted, but do not let us fail to remember that, if industry is to expand, if we are to have initiative and enterprise in industry in the post-war years, there must be a drastic reduction in the rate of direct taxation.

I have said that I am of opinion that direct taxation has passed saturation point. I need only give one set of figures to prove my case. Before the war, in 1939–40, when Surtax was at a comparatively reasonable rate, it brought into the Exchequer £79,000,000. When Surtax was put up to 9s. 6d. in the £, making, with Income Tax, a total at the high level of 19s. 6d. in the £, what did we find? In 1940–41 it went down from £79,000,000 to £76,000,000; in 1941–42 it went down still further, to £74,000,000, and the following year it went down slightly more, and for the year which has just ended Surtax has brought in some £6,000,000 less than the Chancellor of the Exchequer budgeted for. The figure was £73,500,000, which is the lowest amount of revenue received from Surtax since before the war. I really cannot conceive how it would be possible to have a clearer example of how the incidence of high direct taxation has not increased but has reduced revenue. Unless the incidence of direct taxation is materially reduced in the post-war years, this country will suffer to an extent which may well be alarming.

There is one point which I would very much like to raise, but it would probably be inexpedient to do so. I would like to remind the Committee of one of our greatest national institutions from which we derive a large revenue, both direct and indirect. A man has mortgaged virtually all his assets in order to be a member of what I have in mind, relating, as it does, to insurance. He pays to-day in Income Tax and Surtax an amount not equal to, but sometimes in excess of, what he in fact receives. Unless that matter is taken seriously into account the position will become precarious. Britain is at the crossroads. She will either decline or increase her greatness; there is no standing quiescent. Which is it to be? The next 25 years will be the testing time. We must see that we stand the test in fact, in spirit and in purpose.

7.48 p.m.

The Chancellor has given us another Budget in which, as he said last year, the mixture is as before. In this he is undoubtedly right. He is now being, and he will be in the future, subjected to considerable pressure to lower direct taxation, and the speech to which we have just listened is only an example of the kind of pressure which will be put upon him. I very much hope that he will resist this pressure. Much as many of us, including myself, would like a lower Income Tax it is our duty to consider the interest of the nation as a whole in a matter of this kind. What is the use of reducing the taxation, particularly direct taxation, if the material goods are not there to purchase? It is only doing the very thing which brought about the disaster after the last war, when there was abundant spending power and not the material goods to purchase. This was a condition in which inflation was bound to flourish, and did flourish.

The Chancellor should not consider a reduction of taxation until there are sufficient peace-time goods in the country which can be purchased by the community. When that time comes, he must look round and see whether he can first relieve those who are most in need of relief, and in this respect there come the lower incomes. He ought to alter the allowances whereby the very low range incomes are brought in; he ought to relieve those first and particularly the old age pensioners before he considers a general reduction of the standard rate. Even here he should be careful. Income Tax and Surtax are instruments, rightly used, for the purpose of distributing the national income. This principle I hope has come to stay in our national balance sheet. If the standard rate of Income Tax comes down, I hope that Surtax will be kept on, as an instrument whereby the national income is redistributed. If the national income is like a cake, direct taxation should be the means by which fair slices are given to all members of the community.

I am prepared to admit that unless certain other factors are dealt with that cake may be a small cake in the post-war world. The Chancellor has hinted in his speech that we have our export trade and foreign trade balance to consider and it will be a very important factor in the size of the cake. It will not be satisfactory if we divide the cake only into a lot of small slices, so that everybody gets a fair share; we have to see that the cake is big. We can only do that if our foreign trade and balance of payments are of a nature which can properly ensure that the cake is large—that the national income is big. That is the problem about which those of us who consider it are somewhat disturbed. A very large expansion of consumption at home is bound to mean in a country like this, so dependent on certain raw materials which are not produced here, large purchases of such necessary articles as timber, certain metals, oils, cotton and tropical products. As the Chancellor pointed out all this has to be paid for, not as it was before the war by interest on foreign investments but directly by the export trade. Unless we are able to keep our industry up to such a pitch of perfection that it is able to meet foreign competition, particularly American competition and possibly Russian competition after the war, we shall not be able to secure those raw materials and foods which will alone guarantee to us a high standard of living. Therefore it is abundantly necessary that we must maintain those controls over production and priorities which will ensure to our export trades the raw materials which they need.

Those who talk about getting rid of controls do not consider for a moment the enormous importance of controls upon this aspect of our post-war problem. The export trade ought to have the first opportunity of getting those raw materials which will be in short supply. Moreover, our taxation system ought to give relief so as to direct income, not to personal expenditure but rather to capital goods and capital equipment. Russia passed through a period before the war of grave stress and strain when in her Five-Year-Plan she took a large slice of her national income and devoted it to capital equipment which alone has made it possible for her to get through these recent dreadful years. I do not think that we shall have to go through so bad a time, but we shall have to pass through a time after this war when we shall have to direct a large portion of our national income to the re-equipment of our industry.

Here it comes about that the incidence of taxation can be of great help. The depreciation allowances which are included in the Income Tax Bill now before this House are one way in which that can be done. My hon. Friend the Member for Chesterfield (Mr. Benson) in his interesting speech yesterday referred to differential rates of taxation as a method by which this could possibly be achieved. I am not prepared to deny that that might be a possibility but a better way seems to be by allowances and depreciation of machinery enabling firms and companies and on another scale farmers and those who are engaged in agriculture to put by reserves in such a way that they can get their industry up to a high standard of efficiency. Therefore, I hope that it will be possible to make in the immediate post-war period substantial contributions by relieving taxation not for the purpose of the money going to personal incomes but directing it in such a way that it goes first and foremost to capital equipment so earnestly needed.

There is one other point that I would like to raise and that is our overseas indebtedness. The Chancellor pointed out the very serious position and that instead of having a thousand million invested abroad we are a debtor nation and £4,000,000,000 in debt to other countries. Of this £2,000,000,000 has been incurred in the Middle East of which I presume half of it is in India and a good part of the rest in Egypt and some of it in the Middle Eastern countries and the rest scattered about the world. If it is of any help to him I think that this Committee should say that we will back him up in every step that he takes to see that this problem is handled satisfactorily. After the last war we owed a debt of £1,000,000,000 to the United States. It was treated as a commercial debt and the Chancellor was quite right to say that a debt of this kind should not be treated as a commercial debt in future. The result of our debt to the United States was a deadlock and, finally, the wiping out of that debt.

We do not want a one-sided solution of this. We want bilateral agreements. I hope—and if this Committee can give the Chancellor any moral support in the matter, I think we should give it—that he will be able to secure satisfactory terms for the solution of these debts. After all, we have saved India from invasion by Japan; we have saved Egypt from invasion by Germany; and I think we are entitled, when we come to settle that debt, to a reasonable arrangement whereby it is written down and payment is made in the only way in which it can be made, by the export of goods. These countries are perfectly entitled to ask that they are not paid in things which they do not really need, such as lipstick, perfumes, or something which is of no material advantage to the country, but I have no doubt that these countries could take payment to a considerable degree in the form of public works, electric machinery, and all the kinds of things which we can perfectly well supply.

I make no apology for dealing with this matter because very little has been said about it in this Debate. I think it is evtremely important that it should be referred to to-day because the Chancellor paid some attention to it in his speech and I can see that it causes him some considerable concern, as it must cause concern to those who consider our post-war balance of payments. If, however, the matter is regarded in the light which I have indicated, I think it can be solved and we need not, therefore, take too gloomy a view of this post-war indebtedness because I believe it can be solved along the right lines.

8.2 p.m.

I have been somewhat surprised during these last three days, and I have little doubt that my right hon. Friend has been surprised too, at the great volume of congratulation which has fallen upon him because, although the speech with which he introduced his Budget was up to his very highest standard—and more than that I cannot say—yet the Budget itself was just precisely what the country and every hon. Member anticipated. It was, indeed, a continuation of the policy of taxing our people to the greatest possible extent so that we might pay out of revenue as large a proportion as possible of our war expenditure. Apart from the small, but still valuable concession which my right hon. Friend was able to grant in relation to Excess Profits Tax, there was nothing unexpected in the Budget at all. However, I feel that my right hon. Friend deserves to be very warmly congratulated on having successfully concluded the negotiations into which he entered with the United States in regard to double taxation, and I can only hope that the results may be as beneficial to the country at large as has been anticipated.

That part of my right hon. Friend's speech which has attracted most public attention was his reference to the fact that he might introduce a revised Budget in the autumn of this year. Of course, the public interest in that statement arises from the fact that people are hoping that at that date he will be able to indicate that he will remit to a very considerable extent the present burden of taxation. For reasons which I propose to give, I do not think it will be possible for my right hon. Friend to do very much in that direction, and I hope, therefore, that he may see his way to express emphatically his position in the matter, so that there may not be any great public disappointment. Yesterday my right hon. Friend the Member for East Edinburgh (Mr. Pethick-Lawrence), speaking on post-war expenditure, said that in the year 1948 that might well amount to some £2,000,000,000. When we take into consideration the very large charges for our Defence Forces at that date, the great commitments in regard to social services into which we have entered, and also the fact that we shall probably have to fund a large measure of external debt, I personally feel it may well exceed that figure. I would like the Committee to consider just what the Chancellor may be able to do in relation to an expenditure of that size, with the present revenue which he is receiving, and the remissions of taxation which will almost be forced upon him by events.

If I judge my right hon. Friend's mind aright, it seems to me that his greatest desire is to get industry and trade going at the earliest possible moment. If he is going to do that, then I suggest the first thing he will have to do is to encourage enterprise and the will to take risks. I do not believe he will be successful in doing that unless he remits altogether the Excess Profits Tax. If he does that, then he immediately loses some £500,000,000 of revenue.

I would ask the hon. and gallant Gentleman, without any desire to be personal, if there has been anybody in this country more enterprising than the Minister of Labour, and what has profit had to do with it?

I do not think that enters into the matter. The next item of importance to which I think the Chancellor will have to address his attention is the removal of the Purchase Tax from necessary goods. I am alluding to household effects, to necessary wearing apparel and to essentials of that kind. When my right hon. Friend has done that, surely as the result of the reduction in the earnings of people which must come about through the abolition of overtime, he will then have to consider some reduction in the duty on such things as spirits, beer and tobacco. If all these things are taken together, the cumulative effect is likely to be that his revenue will be reduced to the region of some £2,000,000,000. That is going to leave him very little with which he can reduce the present rate of Income Tax—something which is altogether essential if enterprise is to be stimulated once more and if the taking of risks is to be encouraged; if, in fact, we are to have that large cake to which the hon. Member for the Forest of Dean (Mr. Price) alluded.

As was pointed out by the right hon. Gentleman the Member for East Edinburgh yesterday, and again by the hon. Member for Burslem (Mr. MacLaren) this afternoon—there is a great deterrent to effort by every section of the community, whether rich or poor, by the maintenance of the basic rate of Income Tax as 10s. in the £. Therefore it seems to me that the main problem which my right hon. Friend has to solve is how he is to reduce the basic rate of Income Tax. If he can come to this House, perhaps in the autumn of this year, and tell us how that is to be done and to what extent he can do it, then I am certain that he will receive an even greater volume of congratulation than he has received during this Debate. In the meantime may I again ask my right hon. Friend to endeavour to emphasise once more that he may not be able, in the autumn of this year, or in the immediate future, to make that reduction of taxation which the country may otherwise anticipate?

8.10 p.m.

In what may be the penultimate speech before the Chancellor replies to this Debate, I would like to make one or two observations in regard to the general aspect of the speeches we have listened to to-day. Many congratulations have been showered on the head of the Chancellor, fulsome praise has been bestowed upon him. He has been praised not only by certain Members of the Committee but in the first-class leaders of the "Financial Times" and the large national Conservative daily newspapers, which have described his Budget as being sane, sensible and intelligent. But I do not consider for a moment that the right hon. Gentleman is worthy of praise, except in so far as he has contrived, within the severe limits imposed upon him by the Government, to try to balance income and expenditure. Beyond that, this Budget is a class Budget. It is weighted against the poor elements of the community.

We are often hearing about the principle of the equality of sacrifice in this war, but that is one of the most exploded notions I have ever heard. I remember as a youth going to a meeting in the last war, and standing open-mouthed in admiration for a glib-tongued orator who was not speaking for my party, and who said: "We have been fighting in a big war, both capitalists and workers. We have all given of our best, and I do not see why we should not unite and share the results of this war. After all, when we were in trouble capitalists and workers were all in the same boat." At that, a perky member of the audience interjected: "But who the hell did the rowing? The working class." [HON. MEMBERS: "Order."] If I am a little out of Order it will be a change from the circumspect and smug speeches which have been made in various parts of the Committee to-day, and no apologies are needed. The fact is that the poor people have always had to do the rowing, in and out of wars, and that although we have been told that there are only 80 people with incomes of £6,000 a year after paying Income Tax, that is not the case. It has been said that a few years ago there were thousands in that exalted financial category and that now there has been a diminution as the result of great sacrifices, that rich people's bosoms have been overflowing with the milk of human kindness. The hon. Member for Ealing (Sir F. Sanderson) almost cried, as if in pain, at the possible thought that Supertax payers would be so treated by the Government that we might lose the Supertax class altogether. I have never heard such topsy-turvy economics in all my life.

I see on the Front Bench my right hon. Friend the Minister of Labour, who has discharged his duties with consummate skill and who has, indeed, been a bulwark in this Government. Had it not been for him we would have been in a parlous labour situation, and it is appropriate that he should be sitting on the Treasury Bench now because, indirectly, he has been one of the greatest wealth producers in the country. I will tell him why. In 1938 there were 17,750,000 people working in this country. In 1944 the number had risen to 24,000,000. In July, 1944, the average number of hours worked by a male worker was 50½, and by a female worker, 44½. That does not take into account the black-out, going to and from work, and all the other difficulties with which workers generally had to contend. All this has been done in the interest of the community. Occasionally workers have become discontented by wrongful treatment, and political capital has been made out of it by such people as hon. Members opposite. Nevertheless, the work of this country is produced by those who have given of the labour of their muscle and the application of their brain. No one knows that better than the Chancellor who is a charming and benign individual, and who, I know, will not misinterpret what I am saying. He would have done a bigger job for the nation if he had had regard for the people who fall within the lower Income Tax category. How is it possible for a worker with £150 per annum to pay Income Tax on it? A worker earning £3 a week is called upon to pay a substantial part of it away in Income Tax. That is very wrong and most improper. It causes hurt and is totally disproportionate to the amount of pain that the Chancellor, in his kindlier moments, would not wish to give to such people if he was aware of the position.

We have the old age pensioners, for whom my hon. Friend the Member for Leigh (Mr. Tinker) has often made so many passionate pleas in this House. If they happen to have a little augmentation of their pension they are often compelled to pay out a certain amount to the State. To talk of this Budget as being fair and equitable is entirely beside the point. It is not how much a man pays to the nation which is an indication of his contribution to the war effort, but how much he has left after he has paid. There are two principles which go to the making of a good economy. One is that the worker, by hand or brain, is entitled to the full fruits of his enterprise and productivity, and not to the partial fruits, and the second is that production of all commodities in the community should be for the use of the whole nation and not for individual aggrandisement and profit. If you accept these principles how can you possibly talk about equality of sacrifice when, obviously, the greatest proportion of sacrifice is made, economically speaking, by the suppressed classes? It is ridiculous, and no one knows that better than the Government Front Bench.

I know it is very easy to leave the sphere of true economic thinking and to enter into the sphere of sentimentalism. On this occasion I shall try not to fall into that temptation, and I will ask the Chancellor why the people to whom I have been referring have to pay such a great share towards the national income. The right hon. Gentleman, for all his false interpretation of economics, is a well-meaning man. The road to hell is paved with good intentions, but, withal, he is a kindly man. I do not think that he would wittingly and knowingly wish to inflict hurt or harm on any section of the community, yet in spite of his great brain and comprehensive grasp of many of the intricacies of government and the like he has never yet realised that the wealthy people to whom I have been referring ought to pay a greater share towards the national income.

There is one other thing I want to say to the Chancellor. Let me give one simple example of the creation of wealth. If an employer, one of those wonderful employers we hear so much about, an employer of 100 workers, pays his workers an average of £5 a week, and if we assume, as is quite reasonable, that they produce an average of £10 worth of commodities a week, he gets a gross profit of £5 out of each worker. If for rent, interest and depreciation of capital he allows £2 or even £3, he still gets £2 or £3 net profit out of each worker. That employer is then called a fine fellow, a bulwark of the nation. He is the man who gives rise to all this talk about the enterprise of individuals, their magnificent contribution to the war, with all the blether about destroying individual initiative and enterprise. The very system on which we live has done more to destroy individual enterprise and initiative than could have been done by any other system devised by man. The only individual enterprise and initiative that there are have been displayed in battle, because in battle, when the nation has to throw in all its weight, the class relationship is to a large extent dissolved, and on the battlefield every man takes his chance. That is why we got the Mulberry, and the wonderful feats that have been performed on the battlefield. We got them not as a result of the system, but because of the extraordinary state of affairs which decrees that all should contribute to the national emergency.

There is a great deal of cant and humbug trotted out from time to time about the necessity of conserving our capitalist people in this country, because, as was said in 1931, they might take their capital abroad. They cannot take their real capital, in the true conception of the term, abroad. They can take their odious personalities abroad, they can take some paper money abroad, but the mills, factories, workshops and the land and its productivity, will always remain in this country. That fallacy has been exploded time and again in this House. There is talk about the patriotism of these people. What are they doing for the country? The fact remains that at the time of economic and political crisis they were the first to threaten us with taking their capital out of the country. If the war has taught us one lesson, it is the lesson of sacrifice by the glorious men and women who have contributed so much towards the preservation of this country. If what they have done means anything at all, then let us in financial terms interpret it in a more equitable sense, and let the next Budget be more broadly based, more humane and more understanding and have regard, in particular, to the needs of the poor and of those who have so little money and so much to do with that little amount. I ask the Chancellor to give heed to that, and I trust that my poor words may carry to him a message that will cause him to be a little more understanding and sympathetic with the poor in the future.

8.24 p.m.

We have come to the end of a three days' Debate, a very interesting Debate in the course of which a great many arguments, some mutually destructive, have been advanced and a great many points have been raised. My right hon. Friend the Financial Secretary to the Treasury, in winding up last night's Debate, dealt with quite a number of them. I shall do my best, in the time available to me, to deal with at any rate the most important, or what seems to me to be the most important, of the points that have still to be disposed of. The hon. Member for Newcastle-under-Lyme (Mr. Mack) made a very eloquent speech, in the course of which he presented certain computations designed to prove his case. I could do sums, too, if I wanted, but I will say just one word about the case, to which I am not in any way blind, of the person at the bottom of the income scale. I have, in the course of the consideration which has led up to this Budget, looked at every aspect of our tax structure. I made it perfectly clear in my Budget speech that I thought there should be, as soon as possible, a comprehensive review. I say without any hesitation that in the course of any such review the system of tax allowances and abatements will have to be included.

I know that taxation at the present levels, under the present conditions, is burdensome. It is burdensome not only to the people at the bottom of the scale. There are people with obligations, married people with children and other dependants, who may have incomes well above the taxable minimum, but who feel the pressure of tax very acutely. The hon. Member took the case of a person with an income of £150 a year, and he said that person might have to pay a very considerable sum in Income Tax. If he is married, he pays nothing. If he is unmarried and has no dependants he pays, I think, £17 in tax, of which nearly £10 is represented by a post-war credit which will be returned to him. That, in fact, is the position. While I do not maintain for one moment that the tax does not, in individual cases, encroach upon the amount available on a reasonable view for the purchase of the necessaries of life, with a little margin, I think, on the whole, we can without doing violence to our consciences wait until it is possible to review the whole system of direct taxation.

Before I come to some of the more general considerations that have been raised in the Debate, there are one or two specific points of importance to which I should like to refer. My hon. Friend the Member for Daventry (Mr. Manningham-Buller) raised two questions in regard to the double taxation agreement, an agreement which, I have been very glad to note, has been received with approbation in all quarters of the Committee. My hon. Friend asked about film royalties. I had said that, as a result of the agreement, the tax which at present is levied in America on film royalties coming to this country at the rate of 30 per cent. will be withdrawn. There will no longer be a tax of that kind. I said that that would bring American taxation into line with taxation here. The point my hon. Friend made as I understood him, was that he thought we had been remiss in not collecting the sort of tax which our American friends are now going to abandon on film royalties paid by this country to film producers in America. But in my view, there would have been at no time, according to our conceptions of taxation, any justification whatsoever for levying a tax on those payments as such. To collect such taxation would be equivalent to imposing direct taxation on remittances from this country to another country in respect of goods imported into this country.

But is not that precisely what the Americans have been doing hitherto, as regards their withholding tax in the matter of British film royalties earned in the United States of America?

That is exactly the tax which, I am glad to say, the Americans are no longer going to charge. I am trying to explain the doctrine which we apply here, and interruptions like that of my hon. Friend do not help me. If I can succeed in making myself clear to my hon. Friend, what I wish to say is this. To charge a tax, not on profits, but on payments for goods or services coming from another country, would be wrong. If someone here buys something in America, and has to pay a certain sum of money, we do not seek to impose a tax on that payment and, if we tried, we should get into deep water. We have not increased the Customs duty above its present level because we have come to the conclusion that to do so would only add to the costs of exhibitors here. There would be nothing to prevent us putting the tax up if we thought it right to do so, but to put a tax analogous to Income Tax on a payment which does not represent profit at all—there are expenses in respect of films sent to this country—would be entirely wrong. That is the view which the tax authorities have taken and I think it is a sound view which we must maintain in analogous cases, and I am glad that the Americans have agreed to extend similar treatment to us.

The second point that my hon. Friend raised was entirely different. He referred to what I had said about the undertaking which we have given in signing the agreement to exchange information with the American tax authorities in certain circumstances and he seemed to be somewhat concerned lest, in giving that undertaking, we had done something contrary to the interests of the country. I hope to be able to reassure him. The Clause relating to the exchange of information is very narrowly drawn. What it does is to put an obligation on the revenue authorities of this country to communicate confidentially to the revenue authorities of the United States such information already available to us under the existing law, as may be necessary either for the working of the double taxation agreement or for the purpose of preventing fraud or evasion. That is the substance of the undertaking. The information must be already in the possession of the revenue authorities of this country and it must be such information as is necessary—and that means necessary to the satisfaction of the revenue authorities here—for the three purposes which I have specified; and when the information is given there is an obligation on the revenue authorities of the United States to treat it as secret and not to be disclosed to anyone.

I do not think there is anything in that undertaking, without which we certainly should not have got the double-taxation agreement, to which anyone in this country could legitimately object. I went into the matter with very great care, having in my mind certain criticisms, misjudged and misdirected as I thought, in regard to the obligations we undertook the other day to give information in entirely different circumstances to the French Government about certain assets in this country which have actually passed into the control of the Custodian of Enemy Property. Having that in mind, I looked at this proposal with the greatest care and satisfied myself before entering into the obligation that it was in no way prejudicial to any legitimate interest here.

It is, of course, fully reciprocal.

My hon. Friend the Member for Edgbaston (Sir P. Bennett) referred to Excess Profits Tax credits and asked a question which amounted to this. He said, "These credits are not being repaid, but already firms are incurring expenditure on development. Can they do so with the assurance that the credits, when they are paid, will be regarded as available to cover such expenditure?" I can give an unqualified answer in the affirmative. If a firm draws on its reserves, or gets an overdraft, in order to carry out development for post-war purposes, the fact that the obligation in connection with the development may be incurred now, before Parliament has decided on the repayment of these credits, will not in any way prejudice the firm concerned. It is important that that assurance should be given, because it is in the general interest that development should be undertaken as soon as it is physically possible.

Will my right hon. Friend develop that a little further? He said, "If a firm draws on its reserves or gets an overdraft." Does it make any difference if the firm does it out of its own resources?

It makes no difference at all. The definite prohibition in the Statute is against using these credits to pay additional dividends.

My hon. Friend the Member for North-East Leeds (Mr. Craik Henderson) raised a question about capital issues. He asked whether the existing capital issues control was going on indefinitely. I think the answer to that point is really contained in a statement that I made two months ago when I said: merely making a factual statement by reference to the external cost of goods and services, which was considerably above 150, and I said that, on a realistic view, we ought to look at these things in terms of the value of money on the 150 level, rather than 130. He must not read anything more into what I said than that.

Now I come to a much more difficult topic—what he had to say about banks. The hon. Member for Rugby (Mr. W. J. Brown) followed him up and described the operations of a bank, as he understood them, creating something out of nothing and charging on it, and creating something more and charging on that, and gave the impression of an institution piling up enormous profits at the expense of the community. I have never found it altogether easy to meet the arguments of my hon. Friend, because, frankly, I have not always been able to understand them, but I think what he has in mind is that somehow or other, by some occult process, what he calls new money comes into existence without any real deserving effort on the part of anybody, and that someone gets away with a lot of profit. So far as the currency of this country is increased—and it has increased enormously during the war—that is absolutely under the control of the Government; no addition can be made without the authority of the Treasury, and the whole of the profit goes to the Exchequer. Apart from that, there is expansion of credit or bankers' money, or whatever it may be called. I am not able to put a figure on that; I have not got the data.

Because I have not. I have told the Committee before that I had not got the data. I have no means of measuring the amount of so-called new money which comes into existence. I cannot deal in complete detail with this at the moment, but I do say that the Treasury watch very closely the operations of the banks, and if there were any excessive profit arising anywhere the Treasury would have something to say about it. The banks do not escape the effect of full taxation on all the profits they make. True, during the war, in certain directions, their revenue has increased. Equally is it true that because of the war their revenue in other directions has fallen away. I have seen no sign whatever of any substantial inflation of profits of the banks as a result of the war, and if there were any it would come not only within the sphere of Income Tax but they would have to pay Excess Profits Tax.

May I ask if the Chancellor would deal with the policy set forth in the "Economist" editorial columns, that the new money could be created—

I doubt if that is relevant to the matter under discussion.

As my right hon. Friend is doing me the honour of taking the trouble to try to answer my question, perhaps he would explain how it is that he finds it impossible to get at the data which would tell him how much new money is created.

Because I do not quite know, apart from expanded currency, what is meant by new money. I may be able to deal with this more fully on some other occasion. My hon. Friend must not be too discouraging. I really am doing my best.

This has been a battle-between the Chancellor and myself for many years. Will he deny that the effect of changing Treasury deposit receipts into long-dated loans, is very undesirable from the point of view of the community?

Of course I will. Our debt must be fairly distributed between long-term and short-term, and it is essential when the short-term debt gets beyond a certain proportion of the total that steps should be taken to put it on a more permanent basis. I do not think the hon. Gentleman should be too ready to criticise the handling of the general debt situation of the country. We can go into this more fully later on. Perhaps one day I shall have an opportunity of explaining to my hon. Friend the exact, mechanism by which, through the banks, the finance of the war is arranged. It would perhaps be interesting to him, and perhaps to others.

There is one other point with which I will deal very briefly, and that concerns the possibility of raising large sums, of money by a method of taxation to which we have not hitherto for practical purposes had recourse. The hon. Member for Burslem (Mr. MacLaren) will know what I mean. My hon. Friend the Member for Rugby also referred to this, and he seemed to think—and it is in the minds of a number of hon. Members—that when an increase in the value of land becomes apparent, for example through a lease falling in and being renewed, that that is the occasion when there suddenly comes into existence a large amount of new capital which could be taxed. Nothing of the sort. The accretion of capital value is a process which is going on continuously. Land is changing hands all the time, and on a rising market at increasing rates, and unless you are going to do very grave injustice you cannot suddenly pounce selectively on that class of property and seek to take enormous sums from those persons who at that time happen to be in possession of that type of property rather than some other kind of property. That simple fact imposes a definite limit on what you can raise by a tax of this kind without injustice. If any hon. Member suggests that the Government have disregarded this matter and they have no policy at all, I would ask that hon. Member to look at the White Paper on Compensation and Betterment and he will see a long term plan for dealing with this particular subject which some regard as of great social benefit.

As my right hon. Friend has referred to the White Paper on Compensation and Betterment, could he say whether there is any chance of a Debate upon it?

I would like to deal with, this "hat trick" of the Chancellor's. May I ask the Chancellor—I would like his attention, apart from the interesting conversation between himself and the Financial Secretary—

The Chancellor of the Exchequer has listened to a great many speeches, and I think it would be advisable, if we are to have any interruptions, to have them in the form of questions.

Will the right hon. Gentleman explain to the Committee why it is, with these ever-increasing values which attach to land, he absolutely refuses to disclose the effect of them when sales take place and why he refuses to admit them for Excess Profits Tax?

My hon. Friend ought to know perfectly well that I have no discretion in these matters. The law as passed by this House has to be enforced. It does not rest with me.

It may not be an answer, but it will have to serve. My hon. Friend the Member for East Birkenhead (Mr. Graham White) raised a number of points in a very friendly speech, if I might say so. He seemed to me to be under a misapprehension on one point. I think he understood me as having said that out of a total expenditure of £27,000,000,000 during the war, some £14,000,000,000 represented capital expenditure.

That was a complete misapprehension. The figure I gave—I think it was £14,000,000,000—represented the amount that had been raised otherwise than out of revenue. It had nothing to do with capital or revenue account. I think that was the misunderstanding.

My hon. Friend raised a point which I had had under consideration, when he asked whether it would not be possible on future occasions to arrange for the White Paper to be issued rather earlier than on Budget day. The same point had been put to me by the hon. Member for Chesterfield (Mr. Benson). I will certainly look into that matter for a future occasion. I do not know if it will be possible, but I will look into it.

May I pass to a rather important question raised by a number of hon. Members, in regard to the cost of food subsidies, and the general policy of the Government in regard to subsidies? The current cost—I think this figure has been given before—of food subsidies is £225,000,000. Of that amount, £65,000,000 is in respect of imported food. Of the remainder, £15,500,000 is attributable to the national milk scheme, and £5,500,000 to the scheme for milk in schools. The remaining £139,000,000 is paid in respect of home produced food. Whether that amount is regarded as representing a subsidy to the fanner, or an aid to the consumer is a question on which it is hardly profitable to dwell.

The fact is that in present circumstances, when the agricultural industry in this country is being pressed to develop beyond the normal point which ecenomic conditions would determine, when marginal land is under cultivation and when marginal production is being secured from the land by special devices, it is reasonable that the State should pay a certain sum to prevent the cost to the consumer being governed by the cost of production on the marginal land. I do not see any close analogy between this subsidy on food, and, for example, the question of a subsidy on coal, which is produced in less than normal quantities under more or less normal conditions, and where there is no question of the cost of imports coming into calculation.

As to the policy for the future we will, I hope, continue the subsidies on food, so far as is necessary to keep the cost of living stable, so long as the conditions under which food is being produced are abnormal; but I have every hope that it will be found possible gradually to taper off those subsidies, without any shock to our economic structure.

Will it not be necessary to take very great care not to allow too much importation of foodstuffs so that we shall not destroy agriculture in this country?

My hon. Friend need not be afraid. We cannot sustain the population of this country without importing foodstuffs in very large quantities. There is no danger to agriculture from that source.

My right hon. Friend the Member for East Edinburgh (Mr. Pethick-Lawrence) Who opened the Debate yesterday, rather questioned what I said about the possibility of another Budget later in the year. Of course he understood perfectly well, as I am sure all hon. Members did, that I was not pledging whoever may be Chancellor of the Exchequer later in the year to any particular course. But it did seem to me that as a Budget related to the actual facts of the situation, which at the moment are not capable of a precise estimate, could not be given now, it would be not unnatural and perhaps convenient if a further review could be made later in the year and further Budget proposals then submitted. There is no pledge, but I would just say something about an important point which might not have been present to the mind of my right hon. Friend.

Under the new system which we have devised for Pay-as-you-earn for Income Tax, there is a very elaborate machinery indeed to ensure collection of the tax at the proper rates. I doubt whether it would ever be possible in the future, so long as that system continues, to do what we have always been in the habit of doing in the past—that is to introduce changes in Income Tax, in the rates or the structure of the Income Tax, to come into effect immediately. Therefore, if it appeared towards the end of the year that it would be possible to make an adjustment in the structure of Income Tax, there would, from that point of view—which is rather peculiar and not unimportant—be a case for asking the House to address itself to that question, even though the actual changes might not take effect until the normal date, the beginning of the next financial year. I have that matter very much in my mind. Perhaps I might have mentioned it when I threw out my suggestion.

I thought that my right hon. Friend was somewhat concerned, as were some other hon. Gentlemen—my hon. Friend the Member for Kidderminster (Sir J. Wardlaw-Milne) for example, and my hon. Friend the Member for Lowestoft (Mr. Loftus)—at the thought that there would be a great, pent-up accumulation of purchasing power, which it would be dangerous to have released, at the moment when, by a reduction in taxation, further purchasing power was being created. That is undoubtedly a matter that we shall have to keep very clearly in view. It is very relevant to the release of various credits—Income Tax credits, soldiers and serving men's credits, payment of service gratuities and even the payment of family allowances—and we shall have to keep all those things carefully in view. We must endeavour to ensure that there is no expansion of purchasing power out of scale with the volume of goods and services that may, for the moment, be available.

Now, I would like to come to some points that were raised in the interesting speech of my hon. Friend the Member for Seaham (Mr. Shinwell). He thought he had detected some inconsistency between one War Cabinet Minister and another. I was surprised that that was the impression he had. He referred to a remark that my colleague Lord Woolton had made, I think in the other place, when Lord Woolton said that we could look forward to a period of great prosperity when there would be a great deal of money, shortly after the termination of hostilities. My hon. Friend thought that that statement was difficult to reconcile with what I had said. In my Budget speech I tried to make it clear that I thought that, from an anti-inflationary point of view, our most difficult period would be shortly after the termination of hostilities, when there might be a false impression of prosperity, a kind of false boom; but that, if we did not profit by our experience after the last war, we might have a tremendous inflation, followed very soon by a disastrous slump. I do not think there was any inconsistency. My colleague was referring to one aspect of the matter and I was referring to another, but they were perfectly consistent.

My hon. Friend had something to say about controls. I do not know that I found myself in disagreement with anything that he said on the subject. I do not think so. The representative spokesmen of all parties in this House have taken occasion to assure the public that they would not support control for the sake of control; but, equally, representatives of all parties have made it clear that controls must continue so long as they are necessary in the interests of the country. There may be differences of opinion as to when a particular control can safely be relaxed, but I believe we are absolutely at one about the continuance, for example of the control of rationing. We are not going to give up rationing until we see quite clearly that that course can be undertaken without hardship to any section of the community. Rationing without control is a contradiction in terms.

My hon. Friend then turned to what, from my point of view, was much more debatable ground, when he began to talk about industry and the conditions under which industry was going to be carried on after the war. He used some such words as these—that a decision has to be made, in regard to particular industries, as to whether they are left to private enterprise or whether the State has to step in. I do not think that those are mutually exclusive alternatives. You may leave a thing to private enterprise, and at the same time reserve certain power to the State. In regard to industry, I have proposed, and the proposals are at this moment before the House, certain measures, with a view to encouraging private industry to embark on development of one kind or another. A little while ago I addressed the House about a plan for providing additional facilities for the financing of industrial development. It seems to me that every sort of compromise is possible, certainly in theory, and, I believe in practice, between undiluted private enterprise and full State control.

That is really not my point. The point which I put to my right hon. Friend and the Committee was this: If it is agreed that in order to help British industry, we must have more mechanisation, must remove obsolete plant and so on; have we any guarantee that private industry will undertake that task, and if they do not, is it not then necessary for the State to direct private industry or, alternatively, to take it over?

My hon. Friend said that in another passage. He said, as I remember quite well—I paid close attention to his speech—that private enterprise has a vested interest in obsolescence. I am doing my best to ensure that it shall not have such an interest and that industrial buildings, some of which are woefully decayed, decrepit and obsolescent if not obsolete, shall be brought up to date. Speaking for myself I would say that if in any particular direction private enterprise is seen to be failing to do what is necessary in the general interest, the State will have to take notice of it, and consider how best to deal with the situation. I do not think it can be dealt with by pinning one's faith to particular shibboleths. One has to look at it from a practical point of view and see what is best to be done.

There is one point on which I found myself in disagreement with my hon. Friend, though for the most part I found myself in agreement with him. I was glad to find that he and I seemed to be in agreement, at least, about the importance of the export trade. We crossed swords some time ago, when my hon. Friend asked, "What are you going to do if you find you cannot develop the export trade? Are you going to wring your hands and give up the struggle?" Now he makes it quite clear that he realises how necessary the export trade is. I emphatically agree with him, and I am glad that we are at one in that, at any rate. Where we still disagree is in this: My hon. Friend referred to the fact that he understood that certain taxpayers in the country were paying tax at a rate as high as 19s. 6d. in the £. He did not seem to think that mattered very much; he did not see why that high rate of tax should have any deterrent effect on enterprise and industry. I prefer the view of my right hon. Friend the Member for East Edinburgh, who was not afraid to accept my contention, in my speech, that heavy taxation of that kind is necessarily deterrent, is in itself a bad thing, and that we should try to reduce it. How can you expect people to take risks or exert themselves—ordinary human beings, not exceptional people—how can you expect them to strain themselves, to face the risk of loss—

Is it not the case that in this country, since the war started, there have been more initiative, more energy, more enthusiasm and more enterprise, with all the heavy taxation, than there ever was when there was lower taxation?

There are things which one will do when one's life is at stake, which one will not do just for the sake of a little extra here and there.

I think I ought to correct any false impression. I was not arguing that we should tax anybody at 19s. 6d. in the pound. My argument was that it does not always follow that the only method of providing incentive is to reduce personal taxation, that personal taxation can be increased, and that, because it bears harshly, one may be inspired with an incentive in order to get, for example, greater armaments.

I know that argument very well. I have heard it said that if only farmer's prices were reduced they would plough more land because they would have to plough more land to make enough to live on. I have heard similar arguments put forward about the wages of labour. I do not accept them. I really think that if my hon. Friend would bear with me just a little longer, we would find we were in agreement on that, and then we should both have to look round carefully for points of disagreement.

I have finished what I wanted to say. I have dealt with most of the important points that have been raised. This has been, from my point of view, a very satisfactory debate.

I made a special appeal to the Chancellor—I admit he was not present at the time—about this question of the coal increase announced to-day, and its relationship to Pay-as-you-earn, the bad economic effect of that on the production of coal, and the relieving of miners of that burden.

Is not that very much the point I have been making? I have just said, that I have heard the argument that if people are taxed beyond a certain point, they will cease working. On the other hand, there is the opposite argument that if they have to work harder and longer in order to make enough, whether the cutting down of their receipts is due to taxation or not, they might work harder and longer. It is a question of psychology. I believe that if there were more things that people wanted, on which they could spend money, it would be found that in spite of taxation under Pay-as-you-earn, they would go on earning more. [ Interruption. ] We are getting into dangerous agreement.

If I may be allowed to conclude, I was saying that this has been a very satisfactory Debate from my point of view. There has been very little to criticise in the Budget perhaps, because there was very little in the Budget itself. But there was much more in my Budget statement, and I have been very glad to find, not from a personal point of view at all, so much agreement with the presentation of our general financial situation that I tried to give to the Committee in my Budget statement, because it is really very desirable that we should try to find common ground in these matters, which are of such vital importance to us all in the future.

I am happy to think that there has displayed itself in the course of this Debate, and also outside, a very-considerable degree of understanding, and a very great measure of general agreement. May I say, in conclusion, how very grateful I am personally to hon. Members in all quarters of the House for the consideration and kindness they have shown? I have never wound up a Debate on any previous occasion with the same sense of general good will in all quarters.

Question put, and agreed to.

Resolved:

"That it is expedient to amend the law relating to the National Debt and the Public Revenue, and to make further provision in connection with finance."

Resolution to be reported To-morrow; Committee to sit again To-morrow.

Ways and Means

Considered in Committee.

[Mr. CHARLES WILLIAMS in the Chair]

National Loans

Resolved:

"That—

Resolution to be reported To-morrow; Committee to sit again To-morrow.

The Remaining Orders were read, and postponed.

National Health Service

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

9.13 p.m.

I do not often trouble this House by raising a matter on the Adjournment, but in this case the answers that Ministers have given to the Questions I have put to them on the White Paper on health services have been so profoundly unsatisfactory that I felt I had to raise the matter to-night. Furthermore, this is a matter which concerns the public, and I felt that it should be further ventilated. The future health services of this country will concern every man, woman and child, and the quality of them will, no doubt, determine the rise or fall of the morbidity and mortality rates of the country. Last year a White Paper was introduced in this House, and the House debated it; and we were of the opinion that the principles of the White Paper had been very carefully discussed. In fact, I find it very difficult to understand why it is necessary to bring a White Paper to this House if the fundamental principles have already been thoroughly discussed, and if it is intended to change those principles I suggest that the Government should produce another White Paper, in order that the House should discuss it.

For some months after the White Paper was introduced last year rumours reached some of us that the Minister was having further discussions with interested bodies—bodies, by the way, which had already discussed these matters over a period of months. We waited patiently. Finally, the rumours were substantiated, and a document was circulated to over 70,000 doctors in this country. The document was marked: "Not for publication." I find it difficult to understand why 70,000 doctors in this country should be given this document, and should know the contents, while millions of potential patients—

It being a quarter past Nine o'Clock, the Motion for the Adjournment of the House lapsed, without Question put.

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

—who are closely concerned with the contents of the White Papers, and will be called upon to finance these proposals when they reach the Statute Book, are left in ignorance. I feel that the time has come when this document, which was marked: "Not to be published" because it could not stand the glare of publicity, is no longer secret. It is deplorable that negotiations have been conducted by the Minister and by interested bodies, and that the Minister has connived at keeping this secret from the House. I feel that the time has come when I am in a position to reveal the contents of this document, because already newspapers, medical publications and leaflets of all kinds have been published, giving the details of the document, and have been distributed not only among doctors but among laymen.

I think it is generally known that in the proposals which the Minister has put to the British Medical Association there is a complete change in the attitude of the Government towards the new health services. Let me take the health centres, in the first place. Progressive medical opinion in this country has felt that the health centres were to form a very important part of the new health structure. We pictured the health centres as places where doctors would co-operate rather than complete. We thought that a new spirit would prevail, that the preventive approach to medicine would be emphasised, rather than the curative, and so on. In the new proposals which the Minister has put to the British Medical Association it is suggested that there should be a few experimental health centres in the country, but that the local authorities should have no clinical supervision; that the doctors would come and work there but their work would not be supervised in any way; that the only contract between the doctor and the local authority would, in effect, be that of landlord and tenant. I think that I am right in this interpretation, because the doctor can conduct his private practice in the health centre—this is the proposal—in exactly the same way as it is conducted outside. We have looked forward to the day when doctors will be employed in the health centres on a full salaried basis. That has all gone.

It is only fair that I should ask the hon. Lady to say to what document she is referring. She has referred to some document, and so far has given the impression, no doubt unintentionally, that it is a document issued by the Ministry of Health. I think that if she is referring to some document which she has received as a member of the British Medical Association, from them, she had better make it clear.

Quite; I am going to make it clear in a moment. The document, as the Minister knows well, was published by the B.M.A., and I am going to quote from it.

The hon. Lady must not say that I know well that it was published by the B.M.A. No document has been published by the B.M.A. A document has been sent to members and others marked: "Not for publication." That, I gather, is the document to which she is referring.

If the Minister had listened to what I was saying in my opening remarks he would have heard I was referring to a document which was marked: "Not for publication." It has been mentioned in the House on many occasions and questions have been put to the Minister about it. The document has been circulated to doctors by the British Medical Association, and I have said that the time has come when the contents of the document are no longer secret. Questions have been put to the Minister by me, by the hon. Member for Cheltenham (Mr. Lipson) and by other Members about the document. Lay persons throughout the country have seen it. A leaflet has been issued by another organisation. "The Times" and medical journals have already summarised the proposals in the document. That is the document I am speaking about.

I listened very carefully, and I am still not clear who is the author of the document. Is it a Government or a B.M.A. document?

I have been speaking for some minutes, and if the hon. Member will be patient I will tell him more about the document. It was sent to members of the medical profession by the British Medical Association, and my assertion is that it contains proposals made by the Minister of Health which are to be put to a representative meeting of doctors next week, and that at the eleventh hour the time has arrived to reveal this matter, which is of concern to the whole country, because it concerns not only the medical profession but every man, woman and child. I was dealing with certain of the fundamental changes in the document, because I do not want someone to challenge me and say there are no fundamental changes.

I want to prove my assertion, which I have tried to put in questions to the Minister, that the Minister has made these proposals to the British Medical Association, which he has denied time after time. So far as the change in the health services is concerned, I have shown that it is not a change of detail, but a complete change in principle. So far as the local authorities are concerned, a great deal of their power is to be whittled away. The full-time salaried medical service which we all looked forward to, and which we approved last year, is to be dropped. There is a suggestion that there will be some part-time service; otherwise, doctors are to be paid on a per capita basis. One could sum up this document by saying that, instead of that great reform welcomed last year, the Minister is proposing to the British Medical Association that they should have an extension of what is known as the panel system. Now, in view of the assertions which I have made, and which have been denied by the Minister, the time has arrived when I must call the Minister's bluff. On 3rd May doctors are meeting to consider his proposals. The Minister has thrown doubts on my veracity in this House, and the House must know whether it is he or I who have been departing from the truth. I go so far as to say that I want to expose a piece of calculated political dishonesty.

I want to refresh the Minister's memory. I will take, for instance, two relevant Questions put to the Minister on 12th April. I asked one but the one put by the right hon. Gentleman the Member for East Edinburgh (Mr. Pethick-Lawrence) is relevant. He asked:

9.28 p.m.

We have listened with considerable attention to the revelations which the hon. Lady has had to make to the House, but I cannot help feeling that, having been led up the garden path, we have not seen at the end of it the mystery disclosed" to us that we anticipated. I am bound to say that I put a completely different interpretation upon the statements that the Minister of Health has made to that which has been upon them by the hon. Lady. It seems to me that what he has said is, in effect, this: "I have had discussions with the British Medical Association which cannot commit my colleagues in the Government, and which cannot commit the members of the British Medical Association. Let the negotiating committee talk to the doctors and see if they agree. If they do, I will talk to my colleagues in the Government and see if I can pursuade them to agree. As the negotiating committee may be let down by the doctors, so I, on my part, until I have talked with my colleagues, cannot be certain that these proposals will commend themselves to the Government." That seems to me to be the situation, and I cannot understand why the hon. Lady should assume that negotiations of this kind, which surely in the long run will save the time of the House, could in any way be stigmatised as improper or subversive of the authority of the House.

There was, surely, nothing sacrosanct about the White Paper. It was, clearly, a series of proposals to be discussed, and, if necessary, torn to pieces by the House if the House did not like it, and, in fact, if one reads the Debate which took place on 17th March of last year, one will see that these proposals came under very considerable criticism. So far as one can judge—[ Interruption. ] If the hon. Lady would care to return the compliment which we on this side paid to her, I should be obliged. The point that I was making was that, in the course of the Debate on the White Paper, these proposals came under very considerable criticism from this side, and those of us who want to see a National Health Service brought into operation should surely be grateful to the Minister for having undertaken these long, difficult and protracted negotiations in order to try to make the proposals more acceptable to the House as a whole.

The hon. Lady has regretted the disappearance of the salaried doctor. We, on this side of the House, regard the civil servant doctor as one of the big flaws in the original proposals. We do not want to see the doctor in the Civil Service or the patient in the pigeon-hole. The final point that I desire to make is that the House was in no way committed to the White Paper. The Resolution that was passed was in very simple terms: and it is a travesty of the fact to present these changes as defying the decision to which the House came. I would only add this—that a year is a long time for a body such as the British Medical Association to be considering proposals of this kind. Ultimately, it is not the B.M.A., it is not even the Socialist Medical Association, which decides what the National Health Service is going to be. It is this House, and I agree to this extent with the hon. Lady that when the B.M.A. have finished their discussions next week, we ought then to be in full possession of the facts so that this House can properly turn its attention to the final form which the health service is to take.

9.33 p.m.

I want to support what my hon. Friend has said, because I think the hon. Lady has put a most mischievous view of the situation before the House. After all, what did the White Paper set out to do? It set out to examine the whole question generally. It set out to say what a health service meant, what had been done and what is being done and to help people to look at the matter for themselves. That seems to me a thoroughly democratic aim. The Government also said that though they thought that the proposals which they put forward were the best possible proposals they wanted, and welcomed, constructive criticism, so that the Measure which they eventually put before the House should be largely an agreed Measure. The Minister seems to me to have taken a commonsense course. My right hon. and learned Friend wanted constructive criticism, and he therefore discussed the proposals with the three bodies which were most likely to be able to offer that constructive criticism, the British Medical Association, the British Hospitals Association and the local authorities, and discussed the alternative proposals, which he is prepared to put before his colleagues, if they meet with that measure of agreement which is desired.

I do not want to go, as the hon. Lady has gone, into the details of these proposals. I only want to say that I criticised the White Paper in the House. In another sphere, and not as a Member of this House, I have seen certain of the alternative proposals which have been placed before one of these bodies, and, in my opinion, they go a long way to improve the White Paper proposals. I hope that we shall not, at the present time, try to throw a spanner into the negotiations which are, at present, going on but that we shall let those negotiations be carried on, in confidence. It is certain that, if you want a free and frank discussion, you do not want third parties coming in who are going to make political capital out of what they hear. If we want really sound proposals, we have to let people who can offer constructive criticism, get round the table and discuss the matter with the Minister. I am satisfied that, as far as the negotiations have gone, the alternative proposals will be a great improvement and that we should allow the Minister to continue in his good work and bring before us the alternative proposals which we need if we are to get the National Health Service, which we must have in this country, if we are to be a healthy nation, and be able to produce, as is essential, the utmost possible wealth per head.

Does not the hon. Member agree that it would have been better if the British Medical Association had done just what the British Hospitals Association and the local authorities association have done and not made public the negotiations which have been going on?

I think that the answer is that the document was marked "Secret and confidential." I cannot answer for the British Medical Association, but I know that the British Hospitals Association took careful steps to see that the document was not published.

9.37 p.m.

There were three main features in the hon. Lady's speech, two of which did not surprise me, but the third did. I was not surprised at the violence of her language, which my right hon. Friend the Secretary of State for Scotland, who has been engaged in these negotiations with me, must regard as being addressed to himself along with me. I was not surprised at the fact that the hon. Lady appeared to show a curious ignorance of the steps to be taken in working out a service of this comprehensive nature, involving so many of those most deeply interested, from every point of view, in the health services of this country. What surprised me very much was the ignorance of a member of the medical profession of the White Paper itself. In her opening observations the hon. Lady said she found it difficult to understand why the White Paper had been published at all and, indeed, expressed surprise that discussions had followed the publication of the White Paper.

I said if it was to be changed fundamentally I would not obviously have made such a remark. If it was to be changed in detail, "Yes" but not if it was to be changed in principle.

It is obvious that I cannot go into changes or what changes might be considered, fundamental or otherwise. I must swiftly review the history of the matter. The proposition of a comprehensive health service was initiated by the Government in a speech by my right hon. Friend now the Chancellor of the Exchequer in February, 1943. In the course of the following 12 months there were a number of discussions, to which the hon. Lady has previously referred. May I recall to her memory what the White Paper itself said—that it (the White Paper) did not purport to sum up the discussions which had taken place up to that time or to reflect any agreement or represent any views reached in those discussions." That would be inconsistent with the terms on which the discussions were undertaken." On the other hand, as soon as the White Paper was published and debated, here and in another place, it was understood by all that detailed discussions would follow. On page 77 of the White Paper the phrase is used that the White Paper would serve as a focus for detailed discussion. That is the discussion that has since been going on and is still going on.

I would like to make it clear to the House that no member of the medical profession has disclosed to me the document to which the hon. Lady has been referring and which she has thought right to disclose to a large number of lay people and, indeed, to the whole of the public.

What inevitably happens in discussions such as we have been having? The various interested bodies and associations—the local authorities have been referred to, the voluntary hospitals, the medical profession, the dental profession, the nurses, the Trades Union Congress—many come to discuss and make their criticisms and suggestions. They suggest modifications which may be considered a lessening of the proposals; they suggest developments which may be an increase in the scope of the proposals; and eventually it becomes possible to see a general concurrence of views emerging in the direction of a generally agreed modification. May I remind the House that the professed intention of these discussions is expressed on the very first page of the White Paper? In the last sentence on page 5 it says:

How do those discussions proceed? It is quite clear that the whole of the medical profession cannot come to discuss these matters with the Secretary of State for Scotland and myself, nor can all those interested in voluntary hospitals, nor can all those engaged in the work of the local authorities. They send their spokesmen, and the time comes when their spokesmen desire to report on the progress of the discussions. That is what has occurred. With regard to four very substantial sections of interested opinion—the local authorities, the voluntary hospitals, the medical profession and the dental profession—that is going on at this moment.

But there are no "proposals." What the hon. Lady read out did not indicate in any way that I was going to recommend or press proposals upon my colleagues. The Secretary of State for Scotland and I myself have not yet reached a stage in the discussions when we can put the whole thing together to put before our colleagues. To suggest, in those circumstances, that anything has yet been dropped, that anything has yet been added, is really quite fantastic. There are no new Government proposals and I can take no responsibility at all for the terms of what the hon. Lady has read out which, as I have told her and told the House, I have not seen myself—

Am I to understand that this is completely unauthorised, and that these doctors should not have been called to this meeting next week believing that the right hon. and learned Gentleman is willing to put to his colleagues these proposals if they commend themselves to the medical profession?

It is quite clear that in an endeavour to reach the general agreement which was contemplated by the White Paper it is necessary, at a certain stage, to discover what can be agreed. I can take no responsibility for the contents of that document, which I have not seen and which was not intended for my eyes—it was a confidential document, not for publication and—with all respect to the hon. Lady, who used the word "published" of it—which was not published—it was circulated to members of the British Medical Association and other members of the profession.

Are we to take it that the statements in this paper which purport to have come from the Minister were never submitted to him to get his consent? Is that what he is saying?

I cannot do more than repeat what I have said. I cannot take responsibility nor make any statement about the terms of a document which I have not seen, though it is a document of a kind which it is perfectly proper should come into existence, of a kind which is similar to that which was, I believe, circulated by the representatives of voluntary hospitals to their members. What I would like to say, however, is this—that I consider it most unfortunate and most regrettable—it has nothing to do with me, and I am quite sure it has nothing to do with the negotiating body of the medical profession, who have been carrying on these discussions with me—that this has ever been published or has ever appeared in the Press. It has not occurred with regard to the other bodies with whom I have been discussing these matters, and I should have thought the hon. Lady would regret that it had occurred in the middle of these most important discussions.

9.44 p.m.

I hope we shall have another opportunity of discussing this matter. [HON. MEMBERS: "Why?"] Because I believe they have done quite the right thing in a democratic constitution. All they have done so far is to ask the Minister to consider certain proposals. He wants them to show exactly how far they will go, and then they are prepared to put certain proposals before their members which the Minister has said he is willing to place before his colleagues—

The hon. Lady must give me a chance; she has had hers.

It being a Quarter to Ten o'Clock, Mr. SPEAKER adjourned the House, without Question put, pursuant to the Standing Order.