House of Commons
Wednesday, April 17, 1946
The House met at a Quarter past Two o' Clock
PRAYERS
[Mr. SPEAKER in the Chair ]
GLASGOW CORPORATION BILL
( by Order )
Second Reading deferred till Thursday, 9th May, at Seven o'clock.
ORAL ANSWERS TO QUESTIONS
REGULATIONS AND ORDERS (FORMS)
asked the Attorney-General how many persons have been charged with failing to fill in application forms for the supply of goods under Defence Regulations and Statutory Orders which do not specify the necessity for filling in such forms; and which such Regulations and Orders were involved.
I know of no such case, nor do I think it likely that the Departments concerned would prosecute in the circumstances referred to by the hon. and gallant Member. If, however, the hon. and gallant Member has any specific case in mind and will send me particulars I will be glad to look into it.
Is not the Attorney-General aware that on 2nd April a woman was charged, under Defence Regulation 55. in the terms of my Question? Would he take steps to see that any expense to which such people are put is refunded to them?
I should like to have particulars of that case. If the hon. and gallant Gentleman could tell me the name of the women I might be able to answer him. If not, perhaps he will let me have particulars of the case, and I will then look into it.
ROYAL AIR FORCE
Lasham Station
asked the Under-Secretary of State for Air for what purpose the air station at Lasham, near Alton, Hampshire is now being used; when it is proposed to derequisition the site of this station; and what steps it is proposed to take to restore to agriculture this area of formerly productive land.
Lasham will almost certainly become a permanent Royal Air Force Station. We are at present using it for a repair and salvage unit, and a contract has been let there for work on gliders. This limits the agricultural use of the land to grass for drying.
Is the hon. Member aware that this station occupies what was very good agricultural land? Is there any justification for making this place into a permanent Royal Air Force station, in view of the great loss that that will mean to agriculture?
I am very willing to look into this matter, but this is a concrete runwayed airfield, so that a very great deal of the agricultural use has, I am afraid, gone in any case, and the place is considered very suitable for a permanent R. A. F. station.
Is my hon. Friend aware that, even if the land between the runways cannot be used, there is, as he will see if he looks at the map of the perimeter, a considerable amount of grassland to the North, East and West that undoubtedly could be used as agricultural land, even if the aerodrome is being used? Would he consider this matter again, so that my forefathers, who used to farm this land, will be able to sleep peacefully once more in their graves?
We have every sympathy with my hon. Friend and his forefathers. At the moment the place is being used as a repair and salvage depot. That might limit the agricultural use of the land a little more than if this were only a flying ground. I will certainly look into the matter again.
Airman's Sentence
asked the Under-Secretary of State for Air if he will now make a statement on the case of Aircraft-man Cymbalist; and if he will quash the sentence of 10 years' imprisonment passed on this airman for his part in the recent R. A. F. strikes.
asked the Under-Secretary of State for Air whether he is now able to make a statement regarding the case of Aircraftman Cymbalist, who was sentenced to 10 years' imprisonment by a court martial at Singapore.
The proceedings of this case have now been received in this country and will come before the Air Council for review in due course.
Aircrew Training
asked the Under-Secretary of State for Air whether he is aware of the resentment of young men who join the A. T. C. and are accepted and trained for aircrews and are then considered redundant and trained as transport drivers whilst other young men are still being recruited for aircrews; and if he will take steps to put an end to this grievance.
All candidates for aircrew duties, whether they have been in the A. T. C. or not, now have to enlist in the Royal Air Force for ground employment in the first instance, but they are then considered for aircrew training if they are willing to undertake a period of regular and reserve service. Large numbers of aircrew and aircrew trainees are now inevitably surplus to requirements, and therefore, in order to even out the rate of release between trades, redundant aircrew and trainees have had to be allotted to ground duties.
Would the hon. Gentleman take steps to consult the Minister of Civil Aviation to see whether these air crew trainees might be absorbed in civil aviation?
Not so much the trainees, as some of the most experienced air crews of Transport Command, have been reabsorbed in that way. We are, of course, in constant contact with the Ministry of Civil Aviation on that question.
Is the bait of attachment to aircrews still being offered to young men as an inducement for them to join the A. T. C.?
No, Sir, it is not possible to guarantee to A. T. C. cadets that all of them can become air crew. We have stated that several times, in this House and elsewhere.
Overseas Personnel (Marriage)
asked the Under-Secretary of State for Air if he is aware that 1081364 Corporal E. S. Baker, Air Headquarters, R.A.F., Kandy, intends to marry an Anglo-Indian girl resident in Nagpur, but that this intention, which has the approval of his parents, has been frustrated by his commanding officer's disapproval of such a marriage, and if he will take steps to facilitate this marriage and to secure sympathetic consideration of this airman's application for a year's extension of service.
Yes, Sir. This case was first considered overseas under the previous wartime policy. We have, however, recently made it clear that a member of the Royal Air Force serving abroad should he allowed to marry whomsoever he wishes, subject only to Service requirements, which it should usually be possible to meet now that the war is over except for the present special conditions in ex-enemy countries. The command have therefore been asked to reconsider this case and I hope that I shall shortly be able to tell my hon. Friend that it has had a happy ending.
Can the Minister tell us what are the special requirements?
It is a question of posting, usually in these cases.
Demobilisation
asked the Under-Secretary of State for Air the number of equipment officers, respectively, in the R. A. F. on 1st July, 1945, released since 1st July, 1945, commissioned since 1st July, 1945, transferred from other branches or Services since 1st July, 1945, and under instruction at present.
asked the Under-Secretary of State for Air how the average release groups for ground officers compare with those for equipment officers.
With permission, I will circulate in the OFFICIAL REPORT a statement giving the detailed information required by the hon. and gallant Member for Dumfries (Major N. Macpherson). Equipment officers are at present five groups behind the general level of release, and the position will get worse before it gets better. To meet this emergency we have decided to commission more airmen in the equipment branch in addition to training every suitable general duties officer who can be made available and with these measures the position should improve, particularly when they reach the groups from 30 onwards.
In view of the answer that the Minister has already given me that it takes only six weeks to train an equipment officer, can he say why it has not been possible to improve the situation before, or to prevent it from getting worse?
There are several answers to that question. The most general one is the very considerable speed-up of releases, which has again increased the burden on equipment officers, and has made the output from the training courses inadequate to meet the situation. We are now taking the measures just announced of supplementing our training forces by the commissioning of airmen in the branch.
Following is the statement: R.A.F. Equipment Officers Strength on 1st July, 1945 4,748 Released: 1st July, 1945 to 1st March, 1946 1,503 Commissioned: 1st July, 1945 to 1st March, 1946 160 Transferred or attached from other branches: 1st July, 1945 to 1st March, 1946 419* Under training at 1st April, 1946 132 * Redundant general duties officers who are trained as equipment officers remain available for flying duties and are not formally transferred. The figure of 419 includes 401 general duties officers.
Accidents (Press Reports)
asked the Under-Secretary of State for Air whether he will withhold from newspapers the news of loss of service aircraft until there has been time to inform next-of-kin in each case.
No, Sir. The newspapers must be free to publish their own reports of an air accident in the same way as any other news, but the Press and the B.B.C. are cooperating closely with the Air Ministry in endeavouring to prevent the publication of the names of casualties until the next-of-kin have been informed. We do not, except under special circumstances, issue our official communiqués till we feel confident that the next-of-kin will have heard.
Is the Minister aware that announcements of disastrous accidents cause grave anxiety to people who have reason to think that their next-of-kin may be involved? Has he considered whether anything can be done by way of asking the organs of publicity in this country to delay publication, perhaps for 12 hours, in order to give the Air Ministry an opportunity to inform next-of-kin first?
We have thought this matter out very carefully and have had considerable consultation with the Press upon it. I doubt whether they would be willing to go further than to delay publication of the names.
Officer's Death, Bucharest
asked the Under-Secretary of State for Air if he has yet received the report of the proceedings of the court of inquiry into the shooting in Bucharest of 184570 Flying-Officer K. R. Archer.
I have received a preliminary report that this officer was killed in a tragic accident on the night of 1st-2nd April. A court of inquiry has been held, but the proceedings have not yet reached this country.
Will a report of the proceedings be made available to Archer's father when they are received, as he has been caused considerable anxiety by the conflicting reports of the cause of the accident?
I think I should have to have notice of that Question.
Malta (Tour Expired Men)
asked the Under-Secretary of State for Air if he is aware that a considerable number of the wireless operators at the R. A. F. W/T station at Malta have exceeded the normal period of overseas tour; and when these airmen are likely to be repatriated.
We are already starting to bring home airmen from Malta and other places who have become tour expired under the new rule, but, as I stated when announcing the reduced overseas tour, it will take till 1st October next to get the last of them home.
Personal Case
asked the Under-Secretary of State for Air why 1645929 L.A.C. Attwood, who is due for release under Class B, and has been transferred to Worli transit camp to await passage to this country, has been prevented from leaving and told that the reason for his detention is secret and that he can give up hope of departure.
I have called for a full report on this case and will communicate with the hon. and learned Member as soon as possible. I understand that the airman concerned has been placed under arrest, and, in that case, the Air Force Act provides that he must be given, within 24 hours at the most, a written account of the offence with which he is charged.
Oversea Establishments (Reduction)
asked the Under-Secretary of State for Air to state the total number of R.A.F. personnel now stationed in Iceland, the Azores and Bermuda; whether he is satisfied that they are fully occupied, and why the establishments at these places are not reduced and the officers and airmen brought home.
It would not he in accordance with present policy to give the numbers of our Forces in particular places overseas. All these establishments are reviewed at frequent intervals to keep them down to the minimum needed. For example we have made a big reduction in the Azores since my reply of 6th March to my hon. Friend the Member for Maldon (Mr. Driberg). We have also arranged for a major cut in advance of our complete withdrawal from Iceland and for all but one Met. section to leave Bermuda.
Would the Minister kindly look into this question to see whether more drastic reductions of establishments cannot be made, in view et the fact that very few aircraft are now using these stations?
If I were at liberty to give the hon. and gallant Member the figures, he would see that the reductions in most of these cases could hardly be more drastic than they are.
Why is it necessary under peace conditions to keep aircraft and aircraft personnel any longer in such places as the Azores and Iceland?
As I have stated before in the House, it is very largely because of the Trans-Atlantic services, partly civil, in which we are helping the civil services with the Royal Air Force meteorological service and so on, and shall have to do so for a little while longer.
Should not the occupation of these territories come before the Security Council of the United Nations?
Incidents, India (Investigations)
asked the Under-Secretary of State for Air why the Special Intelligence Branch is now interrogating large numbers of men at Drigh Road, Karachi, about the incidents which took place there in January last, although they have already been the subject of an official inquiry; and, as official promises of no victimisation have been given, whether he will investigate the allegations which have been put before him of oppression, threats and intimidation employed in these interrogations.
asked the Under-Secretary of State for Air if he has considered the letter from an airman stationed in Sind, concerning the method of inquiry as to the alleged leaders of recent demonstrations in the R. A. F., a copy of which letter has been supplied by the hon. Member for Mile End; and if he will make a statement thereon.
An inquiry under the chairmanship of the Inspector General has been held, as the House knows. The results of this inquiry made it necessary to undertake the investigations to which the hon. Members refer, in order to determine whether evidence exists which should be considered by court-martial. Such Service investigations must he carried out in accordance with the King's Bench "Judges' Rules." These are set out in the Manual of Air Force Law, which itself re-emphasises them in paragraph 77. These are the opening words of the paragraph: …it is contrary to the elementary principles of English law to endeavour to trap a man into incriminating himself… In this case the investigators were specially warned before the investigation began of the necessity of keeping strictly to these regulations. Further steps have now been taken to see that this has been done
Has the Minister had time to examine the copious reports I put before him showing the repeated abominable departure from the King's Bench "Judges' Rules" by these investigators, and can he say anything further about taking action on that? And further can he say how these further investigations square with the promises of no victimisation?
I have, of course, studied the reports which the hon. and learned Member has submitted to me, and while I cannot express any view at this stage as to whether the allegations are well founded or not, I have taken the further step of calling the attention of the investigators to the great importance of adhering to the clearly laid down rules.
What about the question of victimisation?
Will the Minister look into the case which has been sent to him and other cases of a similar kind, and inquire into the allegations made about the nature of the investigations, and not leave it alone to the investigators to decide the question?
The allegations submitted to me by my hon. Friend were part of the case which I am bringing to the attention of the authorities in the command concerned.
Will the Minister answer how he squares all this investigation with the promises of no victimisation?
I have seen statements that there has been condonation in the legal term in these cases, but these matters, I take it, are sub judice and. I could not express any opinion.
Is the Minister aware that in the case of one of my constituents who was included in this investigation, particulars of which I have sent him, the investigating officer preceded his questions to the airman concerned by a reference to a sentence of 10 years on the airman Cymbalist, which the Under-Secretary told us today has not yet been confirmed?
I said that that sentence, in common with all sentences by court martial for long terms, comes before the Air Council for review.
Wartime Buildings (Disposal)
asked the Under-Secretary of State for Air whether he will consult with the local planning authorities before buildings, erected by his Department during the war, are offered for sale to landowners and others, in view of the fact that many of these buildings do not conform to town planning and building bye-law requirements of local authorities.
Our policy in this matter is similar to that of the War Office which was set out in the reply given to the hon. Member yesterday by my right hon. Friend the Secretary of State for War.
Is the Minister aware that the local authorities do not wish the countryside to be littered for all time by these temporary buildings, which become ramshackle before long?
No, I think the relaxation is meant to be a purely temporary one.
CIVIL AVIATION
B. O. A. C. (Aircraft and Staff)
asked the Parliamentary Secretary to the Ministry of Civil Aviation how many aircraft were operated by B. O. A. C., and the total number of employees on 1st March, 1946.
One hundred and ninety-five aircraft were in operation by the British Overseas Airways Corporation on 1st March, 1946. The total number of persons employed by the Corporation on that date was 21,367.
Will the Parliamentary Secretary state if the figures given include all the ground staff overseas; and will he undertake to review this very great number from top to bottom to see if their presence is really necessary?
The figure does include a considerable number of persons engaged overseas. The number of persons engaged is, strictly speaking, a matter for the Corporations concerned in their independence of management, but I shall be glad to keep it under review.
Can the Parliamentary Secretary say what proportion of that 21,367 are employed in the offices of the Corporation here in London?
The headquarters staff in London, including all staff based in London, is 1,190.
Heathrow (Permanent Buildings)
asked the Parliamentary Secretary to the Ministry of Civil Aviation what is the present position regarding the design and construction of suitable aerodrome buildings for the use of Heathrow as a civil airport; and what is the target date to which they are working for completion of the buildings.
It is proposed to set up a Departmental Committee to coordinate the needs of all prospective users, British and foreign, of the permanent terminal building, who will be invited to put forward their requirements to this committee. The committee will also consider the accommodation needed for all essential services which have to be located in the terminal area. When these requirements have been received they will be passed to architects to prepare designs and thereafter a target date for completion can be set. Meanwhile, temporary buildings on the site are being adapted for use and more will be put up as labour and materials are available.
Does not my hon. Friend consider that this matter is urgent, and can he account for the delay of over six months which has already occurred since his Noble Friend first started taking an interest in Heathrow? Can he give an assurance now that this committee will make its findings at an early date and that as soon as it has made its findings the specifications will be issued to enable the design for the buildings to go out to open competition?
I can assure my hon. and gallant Friend that an early decision will certainly be given. On the first part of his question, I would point out that it is desirable to get the aerodrome into operation as early as possible, but the needs of terminal buildings must be balanced against housing, which is our primary commitment.
Could not the situation that was likely to arise have been foreseen by reasonable analysis? We have wasted over six months already.
Can the hon. Gentleman give the House an assurance on what he said in his answer to the last question, that the plans will be put out to pub competition in order to get the best design possible?
That is under examination, and I think it will take place.
Constellation Aircraft
asked the Parliamentary Secretary to the Ministry of Civil Aviation on what date it is expected that the Constellation aircraft on order from the U.S.A. will commence operation on the Atlantic air-route; and if he will publish the financial and statistical calculations which prompted the decision to purchase Constellation aircraft and which indicated that the Transaction would earn more dollars than would be expended on the purchase and maintenance during the time that no similar British aircraft would be available.
With regard to the first part of the Question, the position remains As stated in my reply to my hon. Friend the Member for Uxbridge (Mr. Beswick) on 6th February last. With regard to the second part of the Question, the decision to purchase Constellation aircraft was based on many considerations, including prospective operating costs and revenue earnings. The forecast of such matters is necessarily a matter of estimation and the procedure is one which affects all aircraft procurement. In view of possible detriment to the operators by publication of such forecasts, it would not be right to make public the particular details to which my hon. and gallant Friend refers.
asked the Parliamentary Secretary to the Ministry of Civil Aviation whether he can now give delivery dates of the Constellations that we are purchasing from the U.S.A.; and whether crews have been dispatched to the U.S.A. for training on these aircraft.
Two Constellations are expected to be delivered during this month and three in May. As to the second part of the Question, I refer my hon. Friend to the reply I gave to the hon. and gallant Member for South Blackpool (Wing-Commander Robinson) on 13th February last.
Fares
asked the Parliamentary Secretary to the Ministry of Civil Aviation why the recently published rates for B. O. A. C. traffic are 2½ times higher than those charged by U.S. airline companies over the past eight years and nearly double those charged by Scottish Airline, Limited, despite the difficulties placed in the way of the latter company in obtaining adequate petrol supplies.
Without accepting the validity of the ratios quoted by the hon. and gallant Member, in the absence of any indication of the particular British Overseas Airways Corporation rates to which he refers, I would point out that neither the Scottish Airline rate, nor the rates charged by American Airlines on internal services, which presumably form the basis of his comparison, are appropriate to the widely different conditions of operation of international services which British Overseas Airways Corporation operate. Fares on international services are now subject to international agreements, and the rates of the British Corporations on these services will be identical with those charged by foreign airlines operating on the same routes under such agreements.
Obviously I cannot accept that answer, and I would ask the hon. Gentleman if he can give any ex planation of the apparent hostility of the Government to the development of Scottish Airlines? Furthermore, is he aware that this latest agreement, signed with Eire a few days ago, is regarded in Scotland as a national insult to the country?
If it is so regarded, there is no foundation for it.
Is my hon. Friend aware that the proposed international rates between New York and Prestwick, New York and London, and New York and Rineanna show definitely that Prestwick is placed at a disadvantage as compared with Rineanna, when the rates are calculated on a fair mileage basis?
My hon. Friend is only saying in another way that it takes rather longer to get to London via Prestwick than it does via Rineanna.
On a point of Order, Mr. Speaker. Would I be in Order in moving the immediate Adjournment of the House in order to bring to the notice of the House that there is no Minister in the Cabinet apparently speaking for Scotland?
Any Motion of this kind is in Order, but whether I could accept it or not is a different matter.
In view of your apparent dislike of giving me permission on that point, Mr. Speaker, I beg to give notice that I will raise the matter on the Adjournment. I hope, by your good will, tomorrow.
MALAYA
Proposed Union
asked the Secretary of State for the Colonies whether, in view of the proposed establishment of a Malayan Union, he has made any approach to the Government of the Chinese Republic to obtain permission for all Chinese desiring to secure Malayan Union citizenship to divest themselves of allegiance to China; and, if so, at what date and with what result.
Before His Majesty's Government's policy regarding Malayan Union citizenship was announced detailed consideration was given to the point raised in the hon. and gallant Member's Question. I understand that no divestment of Chinese nationality is possible under Chinese law and no approach was therefore made to the Government of the Chinese Republic. The possession of Chinese nationality by Malayan Union citizens would not, however, create a novel situation. Their position will be no more anomalous than that of Chinese born in the Straits Settlements or other parts of His Majesty's dominions who have in the past been, and will continue to be, British subjects and therefore of dual nationality.
In view of that very important statement, do not the present proposals constitute a very great potential menace to the whole Malay race unless the proposals in regard to citizenship are modified?
That is a matter to which the Governor is giving consideration at the present time.
asked the Secretary of State for the Colonies whether it is intended under the Malayan Union Order in Council to transfer to the Malayan Union assets of the Malay States located outside Malaya.
The only Malay State which is outside the Malayan Union is Brunei. It is not intended to transfer Brunei's assets to the Union. All assets, whether located in Malaya or in any other country of the Malay States named in the Order in Council have been so transferred, with the exception of any assets which may fall within the terms of paragraph 12 ( d ) of the White Paper (Cmd. 6749).
asked the Secretary of State for the Colonies which Malayan Sultans have denounced the agreements signed between them and Sir Harold MacMichael.
I have been informed by the Sultan of Perak that all the Malay Sultans have given notice that they cannot recognise as effective the agreements they signed with Sir Harold MacMichael. At my request the Governor of the Malayan Union has informed the Sultans in reply that I am aware of no circumstances attending the signing of the agreements which would justify the Sultans in refusing to recognise these agreements as effective, and that I cannot admit the right of one party to withdraw from engagements solemnly entered into.
In view of the unanimous reaction of one set of parties to the bargain, does the right hon. Gentleman really intend, like Shylock, to insist on the letter of his bond, and is he aware of the consequences that attended that attitude that adroit negotiator?
Has the right hon. Gentleman any comments to make on the very remarkable letter in yesterday's "Times," signed by a very large number of advisers to the various Malay States?
This is not the place to make a comment upon such a letter A comment was made in reply to the letter by the Public Relations Officer of the Colonial Office yesterday.
Singapore (Deportations)
asked the Secretary of State for the Colonies how many leaders of the Singapore Labour Union have been deported and on what grounds, to what country and under what authority; if he will cause a public inquiry to be held into the administration of Malaya and the relations of the British administration to the Singapore working-class movement; and if meanwhile he will stop all threatened deportation of labour leaders.
asked the Secretary of State for the Colonies why the chairman of the Singapore Labour Union and nine other Chinese are to be deported from Singapore; and if he will cause their deportation to be delayed until the matter has been further investigated.
Ten Chinese have been expelled from Singapore under the civil law of the Colony on the ground that their expulsion was conducive to the public good. These persons had already been detained by the Military Administration after having attempted, in defiance of police instructions, to organise a demonstration on 15th February, which would have been prejudicial to law and order. Full warning had been given by the authorities before action was taken.
I am advised that these men were in no sense genuine labour leaders, and that their activities were making impossible the development of a trade union movement on sound and democratic lines which is now being undertaken by an experienced Trade Union officer from this country. Their aims were disruptive, and they had no real popular support. On the other hand, they and their associates had been able, by a policy of wholesale intimidation of labour, to hamper the work of government and to jeopardize the speedy rehabilitation of Singapore. The present administration of Singapore has only been in existence since 1st April, and I see no reason for a public inquiry as suggested by the hon. Member.
Would the Minister state what was the purpose of the demonstration to which he takes exception? Further, will be answer sections one and three of my Question?
Whatever the purpose of the demonstration, the police advised those who organised it that it was untimely and dangerous to hold it.
What about the purpose?
I am not speaking about the purpose. It was untimely and dangerous, and as a result it led not only to bloodshed, but to a very serious situation in Singapore.
Is it not the case that these men were active in the anti-Japanese resistance movement during the occupation, and also that the trade union development which my right hon. Friend commends is being organised on lines of racial discrimination instead of inter-racially, which would contribute to the Malayan union which is desired?
I have no knowledge of their activities during the Japanese occupation, but I am convinced from advice I have received that the trade union which they organised was not on the lines which we in this country consider is a genuine trade union.
Could the Minister tell us how many of these people of the so called working class movement are tram drivers and dockers and other such types of workers that we associate with the term, or whether their main job and function is mischief making and keeping our men in Singapore longer than they ought to be kept there?
Not without notice.
WEST INDIES (TRANSPORT SERVICES)
asked the Secretary of State for the Colonies (1) whether any decision has yet been arrived at as to the conditions under which a mail and passenger service between this country and Trinidad and the lower West Indies will be expected to operate;
(2) what steps he is taking to ensure that regular and permanent passenger services, adequate to cope with the traffic potential of the area, are provided between the United Kingdom and Trinidad and the lower West Indies.
With regard to air services, I am considering, in consultation with my Noble Friend the Minister of Civil Aviation, the most suitable arrangements for the provision of air communication linking the United Kingdom with the Caribbean area. With regard to shipping, I am in consultation with my right hon. Friend the Minister of Transport, and I would invite attention to his reply of 17th December last. to a Question by the hon. Member for Eastbourne (Mr. C. S. Taylor).
asked the Secretary of State for the Colonies how many aircraft and what types are now being used by British West Indian Airways; and what services they are operating at present.
British West Indian Airways are now operating with five aircraft: two Lockheed Lodestars, one Lockheed 12A and two Hudsons. They have recently acquired three more Lockheed Lodestars which will come into operation next month, when the two Hudsons will be withdrawn from service. From Trinidad the company operates weekly sixteen services to Barbados, five services to Grenada and three services each to British Guiana, Tobago, St. Lucia, Antigua and St. Kitts. The company operates also once weekly between Trinidad, Santo Domingo and Jamaica and once weekly between Barbados and British Guiana. "On demand" services are operated between Jamaica and Belize in British Honduras.
Will the Minister represent that British aircraft should be used on this, route at the earliest opportunity?
It is intended that they will be used as soon as they can be acquired.
Could the right hon. Gentleman say whether there has been any reduction in the rate of subsidy which it was found necessary to pay last year?
Yes, Sir, I think the reduction has been fairly considerable.
TANGANYIKA (SETTLEMENT)
asked the Secretary of State for the Colonies whether he will give an assurance that all non-native settlement in Tanganyika will take place as part of an overall plan so that no small farmers will be settled until the Government is satisfied that there will be an adequate labour supply with the prospect of satisfactory wage rates.
Yes, Sir. I will give attention to the point raised by my hon and gallant Friend.
asked the Secretary of State for the Colonies whether the scheme for non-native settlement, now being considered by the Government of Tanganyika, provides for the settling of individual farmers or of trained key-workers in larger undertakings.
These schemes are still being worked out by the Land Settlement Board in Tanganyika. It is premature to make any definite statement about their details.
May I ask the Secretary of State whether he will maintain the principle that no land will be alienated to non-natives without the specific consent of the Secretary of State?
We are seeing that native interests are being protected in every possible way.
CEYLON (OFFICIAL LANGUAGE)
asked the Secretary of State for the Colonies if he will prevent the attempt now being made in Ceylon to secure the adoption of Sinhalese as the only official language to the exclusion of Tamil.
I am not aware that any attempt is being made in Ceylon to secure the object described by my hon. Friend. If, however, he can furnish me with further particulars, I will look into the matter.
Yes, Sir, I will.
In view of the fact that an attempt is being made in Ceylon to oust English and displace it as an official language, and in view of the fact that most Sinhalese and Tamils either know English, or strongly desire to know English, will my right hon. Friend commend to them the example of sensible Irishmen like Burke, Swift, Shaw and O'Casey, who remain very Irish while using the tongue of the Sassenach and Shakespeare?
There is another Question on the Order Paper on that subject.
FOOD SUPPLIES
Rabbits
asked the Minister of Food what quantities of Australian rabbits he intends to import during the next six months; and whether that amount represents Australia's exportable surplus for Britain.
I have agreed to buy at least 8,000 tons of rabbits from Australia and New Zealand this season, of which about 4,500 tons will come from Australia. With regard to the second part of the Question, I shall be glad to take all the supplies which both Australia and New Zealand can send me, and have already arranged to buy more Australian frozen rabbits this season than I did last.
Would the Minister bear in mind that the demand is very much greater than it was prewar and that the quantities he has just announced are very much less than prewar importations?
The quantity before 1938 was about 9,000 tons and I am taking 8,000 tons, so that I am gradually getting back to it.
Norweģian Oil
asked the Minister of Food the tonnage of Norwegian herring oil hardened and available for margarine; and what amount he intends to purchase for British use.
Norwegian herring oil is not available for purchase by the United Kingdom under the Combined Food Board arrangements, and I do not know the amount that is being produced.
Are not the Combined Food Board responsible for feeding our people?
The Combined Food Board are responsible for allocating but, on the other hand, I understand that the Norwegian authorities have prohibited the export of this oil.
Whale Oil
asked the Minister of Food the total amount of whale oil produced by British, Norwegian and Argentinian floating factories and shore plants in the Antarctic to date; and what amount will be available for British use.
The latest returns of whale oil produced by floating factories and shore plants are as follow:
Tons. British catch up to 31st March 37,000 Norwegian catch up to 23rd March 80,800 Argentine catch up to 17th March 10,000
The total quantity of whale oil now allocated to the United Kingdom by the Combined Food Board is 62,40o tons.
Is the House to understand from that answer that the fats situation is very much better than it was originally deemed to be by the right hon. Gentleman?
The hon. Member should understand exactly the contrary. It is not better.
Has the Minister satisfied himself that all British floating factories are in fact in use? Is he aware that there is one standing outside Falmouth which could he repaired, and has not been repaired, and that at a time when many men in Falmouth Dockyard are being taken away for want of work?
Every possible step has been taken for this season which is now ended, but for the next sea n all ships which were then under repair will, I hope, be available.
Do the 60,000 odd tons of whale oil correspond to the ioo,000 tons the Minister mentioned in the last Debate and the 135,000 tons?
No, the facts are that the allocation is 62,400 tons as against the original allocation of 85,500 tons.
Piģs
asked the Minister of Food whether, in view of the precarious position of pig breeders throughout the country, who now have insufficient feeding stuffs to bring to maturity their three- to six-months-old store pigs and cannot find an outlet for them in the markets owing to the would-be buyers holding off because they, in turn, have no feeding stuffs, he will introduce an order permitting the sale and slaughter of this sized pig through the local retailers.
No such order is required since my Department will be prepared to purchase for slaughter all pigs suitable for retail butchers.
Does not the Aliruster realise the almost incredible difficulties of pig breeders who were encouraged to increase their herds last autumn and now have no feeding stuffs and are compelled to sell pigs at an uneconomic price? Is the Minister going to make up the loss they have sustained due to his action last autumn?
There are no indications that large numbers of these pigs will be offered for slaughter when the feeding stuffs are reduced. Prices for store pigs have not declined since the feeding stuffs allocation was reduced. Prices are higher than they were a year ago.
In view of the fact that I do not accept the Minister's explanation, may I register a vigorous and spirited protest?
Cost-of-Living Subsidies
asked the Minister of Food whether, with the Ministers of Labour and Agriculture, he will arrange a practical scheme for producers to obtain a fair market value for their products without State subsidies, in view of the difficulties which the present system entails in arriving at a fair valuation for wages under the present system of false food prices.
I would refer the hon. Member to the speech of my right hon. Friend the Chancellor of the Exchequer on 9th April, in which he confirmed the Government's intention to hold the cost-of-living index at its present level during 1946 by provision of the necessary cost of-living subsidies.
Is the Minister aware that these subsidies are not producer subsidies at all but are consumer subsidies, and that they unbalance the whole agricultural system, making it impossible to pay a really adequate wage to the workers?
Tea
asked the Minister of Food whether, in view of the abundant supplies of tea in the country, he will now consider taking it off the ration.
My hon. Friend is unfortunately mistaken in assuming that there are abundant supplies of tea in the country. Existing stocks are little more than sufficient to maintain the regular distribution of tea and are expected to be considerably depleted by the end of the year. I can assure my hon. Friend that I shall not maintain tea rationing a day longer than is necessary.
Is the Minister aware that within the last fortnight representatives of certain large wholesale firms in the city of Bristol have stated that they have large stocks of tea which they are anxious to dispose of to retailers?
No doubt that is true, but I have to be responsible for it.
Marmalade Oranges
asked the Minister of Food what proportion of the oranges for marmalade imported this year were destroyed before they reached the shops.
Slightly less than 2 per cent. of the bitter oranges imported this season for distribution to the public for domestic marmalade making were destroyed before they reached the shops as unfit for human consumption.
Drainage Workers (Rations)
asked the Minister of Food if he will consider issuing extra rations to employees of rural drainage authorities on the same scale as those issued to agricultural workers.
I assume that the workers referred to are engaged on draining agricultural land. These are already entitled to the extra rations granted to agricultural workers, with the exception of the special seasonal allowances which are only granted in respect of seasonal work.
Is the right hon. Gentleman aware that these men are doing a job which is not only vital to agriculture but of which the conditions are often very much worse? Will he, therefore, consider putting them on exactly the same footing as agricultural workers in view of the fact that they are on the same footing in regard to insurance?
They are on exactly the same footing as agricultural workers. They receive an extra cheese allowance of 12 ounces a week and the following rationed foods: 11/8o ounces of tea, one ounce of sugar, milk at current scales—nine pints per 100 beverages—but they are not allowed to take tea or sugar home dry.
Is my right hon. Friend aware that unless the farm workers get more food there will be an avalanche of them leaving the land because they cannot go on doing the hard work on present rations?
Why not do something for the farm workers? I am tired of asking.
Choice of Retailers
asked the Minister of Food when freedom will again be restored to the public to choose their own retailers.
The public will again be given an opportunity to change their retailers, except for milk, at the beginning of the new rationing year, 21st July. I am considering the possibility of allowing further changes during the course of the rationing year.
In view of the fact that milk supplies are more abundant than for a long time, why cannot the Minister allow the same freedom to be accorded to people to choose their own dairy as is accorded to people to choose their own baker?
I have gone carefully into the matter, but while this industry is maintained as a rationalised industry, I cannot permit a change of retailer. However, I am considering bringing in that change next year
Is my right hon. Friend aware how unfair this compulsion to patronise one particular retailer is to housewives? It means that many of us have been compelled to lose our dividends. We are not allowed to purchase through our usual Co-operative channels, and we have lost quite a large sum of money in dividends. I wonder if the Minister would consider restoring that dividend.
Jellies
asked the Minister of Food if he will state the basic price of gelatine allowed for the manufacture of table jellies in fixing the retail prices.
My Department is engaged in discussions with the manufacturers of table jellies on costs and prices, and publication of figures might well be prejudicial to public interest.
Rations and Points Values
asked the Minister of Food if he will publish a comprehensive list showing ration and points entitlement for children and adults and a schedule of the points value of all foodstuffs now on points; and if he will issue a similar schedule at regular intervals.
A list of retail controlled prices (groceries and provisions) including information about points values, rations and availability of coupons, is already published and is on sale. I will send my hon. Friend a copy.
Would my right hon. Friend consider issuing a list which could be fixed up in shops, as it would prove of great convenience to housewives and shopkeepers?
It is one of the conditions that each shopkeeper should display them in his shop.
Sweets (Victory Celebrations)
asked the Minister of Food whether it is his intention to allow an extra ration of sweets for children to coincide with the Victory celebrations of 8th June
Much as I should like to accept my hon. Friend's suggestion, I regret that the present shortage of raw materials makes it impossible for me to do so.
Would my right hon. Friend consider allocating some of the large stocks now held by the brewing industry for such a purpose? It would be very popular in these days.
Brewing Cereals
asked the Minister of Food if he will refuse to grant additional quotas of grain to brewers during the present world grain shortage.
There is no indication that it will be necessary to issue licences to brewers to buy more than the 814,000 tons of cereals which it is estimated they will need, during the present brewing year up to 30th September next, on the basis of current production requirements.
TRADE AND COMMERCE
Cotton Control Purchases
asked the President of the Board of Trade on what price basis the Government, through the agency of members of the Liverpool Cotton Exchange, has bought raw cotton this year from American shippers.
The Cotton Control have bought cotton from members of the Liverpool Cotton Exchange, acting as agents for American shippers, at prices based on New York quotations for delivery at a future date.
Does it not mean, in fact. that the Government are making use of the New York futures market?
Of course it does. but it is not hedging on the market.
Requisitioned Premises, Knowle
asked the President of the Board of Trade when the hon. Member for Solihull can expect a reply to his letter of 10th January in respect of the Greswolde Garage, Knowle.
I cannot trace receipt of the letter of 10th January to which the hon. Member refers. I can, however, inform him that Greswolde Garage, which has been under requisition for the use of the Ministry of Supply, will be vacated in the course of the next few weeks. A formal request to vacate was issued on 26th March last.
Household Goods (Coupons)
asked the President of the Board of Trade whether he will now allow small hand-towels and similar articles of household goods to be purchased without personal coupons being surrendered.
No, Sir. I am not yet in a position to take such articles off the ration.
When the President of the Board of Trade is reconsidering the allocation of coupons for towels, in regard to which there is some anomaly, will he consider allowing the smallest of them to be sold coupon free?
The matter is under consideration at the moment, and I shall make a statement as soon as I can.
Bottle Production (Coal Supplies)
asked the President of the Board of Trade if he is aware that production of glass bottles, so urgently needed at the present time, is being restricted by cuts in fuel; and if he will take steps to remedy this.
I am aware that some manufacturers of glass bottles are finding difficulty in obtaining sufficient fuel to increase their production to the desired level. As in all other industries, stocks of fuel have had to be reduced to a very low level, but my regional controllers are doing all they can, in collaboration with the regional officers of the Ministry of Fuel and Power, to help in individual cases of special difficulty.
Could the hon. Gentleman say when the cuts will be restored, as promises of help when difficulty occurs will not produce any bottles now?
The cuts will be restored as soon as the fuel position allows.
COLONIAL EMPIRE
Labour Commissioners
asked the Secretary of State for the Colonies in which Colonies the head of the Labour Department is a member of the Executive Council or the Legislative Council.
In Tanganyika, Mauritius and Fiji the head of the Labour Department is a member of the Legislative Council. In Ceylon, labour administration and policy are directed by a Minister of the State Council. As a general rule the labour commissioners attend meetings of the Legislative Council when labour questions are under discussion. If important labour legislation is being introduced they are, where the Constitution permits, appointed extraordinary members of the Council. The question of making the labour commissioner a permanent member of the Legislative Council is being considered in Nigeria and Kenya.
In view of the constitution of the present Government, will the right hon. Gentleman not look into this matter afresh?
I am looking into this matter at the present time.
Economic Development Plans
asked the Secretary of State for the Colonies which colonies have completed their ten year economic development plans; and what expenditure is proposed from British and local funds.
As the reply contains figures and is in some detail, I will, with my hon. and gallant Friend's permission, circulate it in the OFFICIAL REPORT.
Following is the statement:
Plans have been completed and approved for Nigeria and Zanzibar. The former proposes expenditure of £23 million from the Colonial Development and Welfare Vote, £15 million from Nigerian revenues and £17 million to be raised by loan. The Zanzibar plan includes £750,000 from the Colonial Development and Welfare Vote, £460,000 from Zanzibar revenues and £250,000 to be raised by loan. The Zanzibar plan has not yet been approved by the Legislature.
Draft ten year plans have been prepared in Cyprus, Fiji, Grenada, Jamaica and dependencies, Nyasaland, Sierra Leone, St. Lucia and St. Vincent. These plans which are not in all cases complete and cover, in some instances, a shorter period than ten years, are now being considered and revised in the Colonies concerned and the expenditure proposed from local revenues and loan has not yet been fixed. The contributions which will be available to the Colonies concerned from United Kingdom funds are set out in enclosure 2 to Command Paper 6713. In a number of other Colonies plans are in an active state of preparation.
Universal Suffrage
asked the Secretary of State for the Colonies which Colonies have instituted universal adult suffrage, for either central or local governmental authorities.
Universal adult suffrage for the purpose of central government elections is in force in Ceylon, Jamaica and Trinidad. It has recently also been adopted in Trinidad for the purpose of electing county councillors. I am keeping in mind the desirability of extending this principle in other areas as and when circumstances permit and new constitutions are established.
SEYCHELLES (COCONUT INDUSTRY)
asked the Secretary of State for the Colonies if the Colony of Seychelles still relies mainly on the coconut palm industry as in the past, or if a more balanced industrial economy has now been established
Seychelles is still primarily dependent on the coconut industry which in 1945 comprised nearly two-thirds of her exports and was valued at nearly £150,000. The possibilities of economic development was considered in 1945 after a Report had been submitted by an agricultural expert. In view of the rock nature of the islands it has not been possible to achieve any substantial variation of agricultural industries and coconuts still remain the dominant export.
Has the attempt to introduce the essential oils industry been a failure?
I would like my hon. Friend to give notice of that question.
KOREA
asked the Secretary of State for Foreign Affairs whether he is now in a position to make a statement about the future status of Korea; and the form and extent of British aid which is to be given to Korea.
The United States-Soviet Joint Commission set up in accordance with the decision of the Moscow Conference of December last has met in Seoul and is engaged, in consultation with Korean democratic parties and social bodies, in preparing recommendations for the establishment of a Provisional Korean Government. In accordance with the Moscow decision, these recommendations will in due course be presented for consideration to the United States, Soviet, Chinese and United Kingdom Governments. With regard to the second part of the Question, U.N.R.R.A. is authorised to provide assistance to Korea if and when it is invited to do so.
RUSSIA AND PERSIA (OIL AGREEMENT)
asked the Secretary of State for Foreign Affairs what steps he has taken to ensure that the recently concluded agreement between Russia and Persia does not conflict with, or have adverse effects upon, the supply of oil to this country from Persia.
The published terms of the agreement are being studied by His Majesty's Government. As far as we can see it does not impinge upon our oil supplies from Persia. We have not objected to the Soviet Government making arrangements for obtaining oil from Northern Persia, but we urged that negotiations to this end should not be conducted under duress. We are desirous of making further contracts with the Persian Government but we have been aware that the question should not be re-opened before the withdrawal of foreign troops in accordance with the Treaty of 1942 was completed. His Majesty's Government have strictly respected this. His Majesty's Government will, of course, continue to give very close attention to this vital matter.
Will my right hon. Friend make it plain that the interests of this country in this matter are not financial oil interests, as suggested in this Question, but the interests of peace and security throughout the world?
That is why we objected to forcing the Persian Government to negotiate with Russian troops on her soil.
BRITISH COUNCIL (CHAIRMAN)
asked the Secretary of State for Foreign Affairs whether he can now state the name of the new chairman of the British Council.
I regret I am not yet in a position to do so, but hope very shortly to be in a position to make an announcement.
Does my right hon. Friend realise that this very important post has now been vacant for 10 months? Is he not a member of a Government that gets things done?
Yes, Sir. It is because I have been getting things done that I have not filled the post.
POLAND (PEASANT PARTY)
asked the Secretary of State for Foreign Affairs whether he is aware that since the death of M. Witos, the Polish Peasant Party. which commands considerable support in Poland, has been unrepresented in the Polish Praesidium, and that as a result of the recent appointment of Dr. Putek, a member of the Peasant Party, in the place of a member of P.S.L. as Minister of Posts and Telegraphs, P.S.L. have now only two representatives in the Government besides M. Mikolajczyk; whether His Majesty's Government have protested to the Polish Provisional Government against the small representation now given to P.S.L., and what reply has been received.
I am aware of the circumstances mentioned by the hon. and gallant Member. His Majesty's Government are considering the effect of this failure to maintain the balance of parties agreed in Moscow as part of the arrangements for forming the Polish Provisional Government of National Unity in accordance with the Crimea Agreement on Poland.
Does not show discrimination against the holding of free elections?
I think it would have been better if the agreement had been stuck to.
CIVIL AVIATION
MALAYA
FOOD SUPPLIES
TRADE AND COMMERCE
COLONIAL EMPIRE
ROYAL NAVY
Personal Case
asked the First Lord of the Admiralty whether, in view of the fact that the senior naval lieutenant aboard the ss. "Orion" testified on 7th April that passage to the wife of Marine Williams was refused owing to prejudice, he will now cause an inquiry to be made with a view to preventing a recurrence of these regrettable incidents.
It has not been possible to identify the naval officer referred to, or to confirm that any statements have been made to the Press on this subject. Further inquiries are, however, being made in conjunction with my right hon. Friend the Minister of Transport. I should welcome any help my hon. Friend can give in investigating this matter.
Permanent Commissions
asked the First Lord of the Admiralty whether any special consideration is given to ex-prisoners of war who apply for permanent commissions in the Royal Marines.
In making selections for permanent commissions, all the facts of an officer's career are given due weight. Ex-prisoners of war do not receive special consideration as such, but like other candidates they are given full consideration on their merits.
Auxiliary Hospital, Southport
asked the First Lord of the Admiralty if he is aware of the complaints regarding the Royal Naval Auxiliary Hospital, Southport; and if he will have the allegations of uncleanli ness, shortage of linen and use of cracked crockery by patients investigated.
No complaints concerning the Royal Naval Auxiliary Hospital, Southport, have been received either by the Admiralty or the medical officer in charge of the hospital. A recent inspection by a senior officer of the Medical Director General's Department fails to support the allegations now made. The paintwork is, however, three years old, and its dilapidated condition may give the impression of dirt. There has been no shortage of linen except during the strike of laundry workers at Southport about four to five weeks ago, but even then there was no serious shortage. The crockery is quite serviceable; although certain items are cracked, they do not form any undue proportion.
Is the bon. Gentleman aware that those complaints also apply, to a very large degree, to the Royal Naval Hospital at Haslar? There seem grounds to believe that this is a complaint that can justly be made.
I cannot accept that without investigation. I am perfectly willing to investigate.
BUSINESS OF THE HOUSE
May I ask the Prime Minister if he will state the Business for the first week after the Recess?
The Business for the first week after the Easter Recess will be as follows: Tuesday, 30th April, Wednesday, 1st May, and Thursday, 2nd May (until 6.30 p.m.)—Second Reading of the National Health Service Bill.
After 6.30 p.m. on Thursday, we shall take the Committee stage of the necessary Money Resolution; consideration of Lords Amendments to the Education Bill, and further progress will be made with the Post Office and Telegraph (Money) Bill.
Friday, 3rd May.—Supply (6th allotted day) (1st part); Committee. A Debate will take place on unemployment, with particular reference to demobilised officers and men of the Fighting Services.
I hope the Prime Minister will be able to assure us that the Com- mittee stage of the National Health Service Bill will be taken on the Floor of the House.
I am afraid I am not in a position to give that assurance at the present time.
I hope we may assume that very considerable thought will be given to this point. The Bill is not a party Bill in the ordinary sense. It divides opinion on both sides of the House and there is a very great volume of opinion—[HON. MEMBERS: "No."] All right; hon. Members opposite are all disciplined, and cannot say anything else. Certainly it divides opinion among all classes of Members on this side of the House. Moreover, it is a Measure in which we all have a great common share. Therefore, it seems particularly appropriate that the difficult points, which have arrayed behind them so much public opinion in the country, should be dealt with in Committee of the whole House and not by a Committee upstairs. Having regard to the fact that if it were done in Committee upstairs the Report stage would have to be very much more lengthy, it is quite possible there would be no loss of time by taking it on the Floor.
We will give very full consideration to all the points made by the right hon. Gentleman. Some of them I thought rather gave weight to the suggestion that it should be taken upstairs.
Will the Prime Minister bear in mind that the Committee stage of the Act of 1911 was taken on the Floor of this House?
That is quite a long time ago.
I remember it very well indeed. Might I ask the Prime Minister whether he will make arrangements for a Debate on foreign affairs to be held in the last part of the month of May?
I will, of course, take note of the right hon. Gentleman's request, but I am sure the right hon. Gentleman will realise the difficulty of announcing a definite date just at the present time until we see how things are going and what is the most appropriate time. I suggest that the matter can be explored through the usual channels to find out what date will be most convenient to all parties.
It is some time since we had a Debate on that subject, and a great many things are taking place in the world. We feel that the House ought to be kept apprised of what is going on, and ought to have the opportunity of keeping itself in step, and, if possible, in harmony with the wishes of the Government in these matters. I hope that, during the latter half of May, an opportunity may be found. I can see that the actual date may be difficult to fix. We may even have to ask for two days, but that, again, I am sure, can be arranged without the Government having to take time from other Business.
I should like to meet the convenience of everybody in regard to that, and the only difficulty is that I cannot give a date at the present time. If we had such a date, it would be appropriate for the Debate to take place on a Supply Day.
I will renew my request after the holidays,
May I ask whether the Prime Minister can give any indication when the Second Reading of the Civil Aviation Bill will be taken, and, secondly, if he will give an assurance that more than one day will be allotted to that revolutionary change in air transport?
It will be shortly after Easter. One always has to have a sense of proportion in judging what are revolutionary changes.
Will the Prime Minister bear in mind, nevertheless, that this is a revolutionary change so far as Scotland is concerned, and that this is a question which will range far and wide, and will he consider that in allotting any suitable time for discussion of this great Measure?
Yes, Sir, certainly.
Will the Prime Minister consider the refusal last week of the Leader of the House to provide time for a discussion of the Motion on the Order Paper signed by some 200 hon. Members dealing with the question of the counting of non-established service for pensions in the public service?
[ That the whole question of the counting of unestablished service for Civil Service pensions should be referred to a Select Committee of the House. ]
I regret that, in the present state of public business, I see no prospect of being able to allot a special day. No doubt, the hon. Member will find an opportunity of getting in on that subject on an appropriate occasion.
Is not the Prime Minister aware that this is the kind of issue which has been raised over and over again in the inconclusive form which Debates on the Adjournment and so on provide, that this question is many years old and ought to have been settled many years ago, and that it is within the clear decision of this House, which we can only secure by discussion on a Motion? Cannot the right hon. Gentleman, in the interests of the poor men concerned, for they are poor men and public servants, at least provide us with half a day in which to get to grips with this problem and remove it from the agenda of the House?
As at present advised, I can see no prospect in the immediate future of giving a day.
Could not the House return on Monday, instead of Tuesday, so that we could have the Debate on the Monday?
May I ask the Prime Minister if he will give an assurance that we will have a Debate an Egypt and the Sudan as soon as possible after the conclusion of the Cairo Conference?
I think it would be rather premature to give a decision as to a specific date now, but it may be a suitable subject for the Debate on foreign affairs.
Will not the Prime Minister give time for a discussion on the administration of the British zone in Germany, as the House would like the opportunity of having something to say about the £80 million?
The hon. Member will realise that he can raise that on a Supply Day, and, if he consults the usual channels, it can be arranged.
IRON AND STEEL INDUSTRY (GOVERNMENT PROPOSALS)
The House will remember that on 19th November, 1945, in announcing the Government's plans for the socialisation of industries, the Lord President of the Council stated that the Coalition Government had invited the iron and steel industry to submit a report on the improvements required to put the industry on an efficient operating basis, and that His Majesty's Government proposed to await this report before taking final decisions on the future organisation of the iron and steel industry. A report prepared by the British Iron and Steel Federation was received and has been considered. It set out plans for the development and modernisation of the industry over the next five to seven years at an estimated cost of £168,000,000. Proposals were also made to effect a certain rationalisation of production in order to achieve maximum plant efficiency. Reports have also been received from the Joint Iron Council dealing with the foundry iron and iron foundry sides of the industry. The Government welcome these reports as an important contribution to the planned development of this basic industry.
After full consideration the Government have reached the conclusion that the position of the industry and its importance in the national economy necessitate a large measure of public ownership and that legislation for this purpose should be prepared. Meanwhile, immediate discussion will take place to ensure that urgent modernisation and development schemes are carried through without delay. The Government are anxious to secure the utmost cooperation of both managements and workers during the period which will be necessary for the preparation and putting into effect of the scheme of public ownership. For this period I propose to establish a Control Board. This Board will replace the existing Iron and Steel Control, and will be responsible to me for the general control and supervision of the industry. The Board will pay special attention, in consultation with the industry. to facilitating the early execution of the urgent development schemes. The Board will also act as my advisers on questions arising in the preparation of the scheme of nationalisation, including the definition of the sections of the industry to be taken into public ownership.
I think the House must have been astonished at the statement to which we have just listened. First, it is quite clear that the Government have no plan of their own. They have reached their decision without having any plan of their own. During the next year or two, so far as I can gather from the statement which has been vouchsafed, they are going to seek reasons to justify the decision they have now taken. I had always understood—
I am sorry to interrupt the right hon. Gentleman, but it looks to me as if he were starting a Debate on this matter.
I am very grateful to you, Mr. Speaker, for drawing attention to this point. It is, to my mind, very much open to question, if I may respectfully say so, whether a statement of such great and far-reaching importance should be flung out to us without a Motion for the Adjournment of the House being moved by the Minister, in order to enable the necessary preliminary discussion to take place. I have always understood that, when Ministers made very serious statements of this character, a certain latitude of comment, as distinct from what may be called debating statements, was permitted to the other side, otherwise we get neither the opportunity of making our protest at this moment, nor the full Debate which certainly should have followed such an astonishing announcement as we have just heard. I hope, therefore, I may have what has often, in my recollection, been permitted to those who sat on the Opposition side here in the days of the war—the opportunity to comment upon an important statement of policy. [ Interruption. ] I am addressing Mr. Speaker, and not the hon. Member who interrupts. I am very ready to address him when his turn comes. I am asking the Chair whether reasonable latitude of comment will not be permitted.
The right hon. Gentleman's comment should be put in the form of a question, otherwise it is quite possible that we should have an irregular Debate with no Question before the House. That is the real difficulty. We cannot move the Adjournment of the House on this subject because it involves legislation and would therefore be out of Order. I am quite prepared to allow reasonable comment, but I think it is better to ask questions.
I will endeavour, with the utmost timidity and with any ingenuity I can command, to couch my comment in interrogative form. Am I not right in assuming that the steel industry stands out in pleasing contrast to many other industries? Surely, I may he permitted to remind His Majesty's Government, for the purpose of ascertaining their reaction, that the Coalition Government, in which we all served, asked the industry to produce a plan? That is the plan, is it not, to which the right hon. Gentleman has just referred? And has it not been in the hands of the Government since December last? Does it not comprise a very full provision of new capital? In fact, if my memory serves me, the right hon. Gentleman mentioned the figure of £168 million—I hope I heard aright—to be provided by the steel industry for the development and improved efficiency of its whole machinery. Why, in the face of these facts, have the Government—
On a point of Order. As this speech is in manuscript, Mr Speaker, is the right hon. Gentleman in Order?
I can assure the hon. Gentleman that any notes I have in manuscript are only the result of my general reflections upon the rumours which we have heard, and I am asking the Government to consider the different points which I am raising. I do not understand why hon. Gentlemen opposite should be so afraid of this matter being debated. Have they already begun to be ashamed of the plan? May I also ask whether it is a fact that in this statement the Government have not even defined and delineated the portions of the iron and steel industry which are to be nationalised and that all they are going to do is to try to find this out during the next year or two? Why should the industry be disturbed in this way? What right has the right hon. Gentleman to talk about the "Dunkirk spirit" when. the next moment, he comes forward and makes an announcement of this character?
I should like to ask three specific questions which arise out of this announcement. Why is meant by the term "a considerable measure of public ownership"? It might mean anything and it might mean nothing. Is it intended to introduce legislation for this public ownership within the lifetime of the present Parliament? We should have an answer to that. The Prime Minister is the Minister to answer about legislation. Is legislation necessary to set up the Board and, if so, when will it be introduced? I think we should have an answer to those questions now. It is all very well making statements of this kind but they should, at any rate, be complete in the main essentials. I ask the Government very carefully to consider, and to search their hearts and consciences, whether they are taking this step on the grounds of helping forward the trade and productivity of the country, or whether it is not due to some obscure political—
On a point of Order. As a comparatively new Member of this House, may I ask for your Ruling, Mr. Speaker, on this exhibition of evading the practice and customs of this honourable House by the right hon. Gentleman, who is taking advantage of his position as Leader of the Opposition?
I hope this discussion will not continue much longer. We are really getting into a full Debate. I admit that it is a very difficult situation when an important statement of this kind is made. Naturally, one is prepared to give a little latitude, but I hope this discussion will not develop into a real Debate.
It is not my intention, for one moment, to attempt to lead this discussion into a Debate. When it comes to a Debate, a great many more things will have to be said. I must confess that the question arose in my mind immediately on hearing this statement: Is this business, or is it politics? Of course, we must ask for a day at the earliest possible opportunity to discuss and debate this matter fully without the necessary restrictions which custom and Order impose,it this time. There I leave it for the moment. I am content to say that, so far as we are informed at present, the announcement to which we have just listened wears the aspect of a singularly questionable, and, indeed, thoroughly disreputable performance.
I find it rather difficult, Mr. Speaker, to keep in my head the large variety of questions on various topics addressed to 'different Members of the Government, some to me and some to other Ministers, by the right hon. Gentleman. I will reply to those addressed to me. In the first place, the general matter of the nationalisation of this industry could have been discussed on the King's Speech. There was, secondly, an opportunity for discussing it in the very general Debate which was introduced on a Vote of Censure on the subject of nationalisation. The third point is that, of course, an opportunity can be afforded at the right time for discussing this, but a long speech at the end of Questions is not the most suitable occasion. In regard to legislation, this will, of course, be introduced for this purpose, and before the end of this Parliament. I should have thought it was obvious to anybody that, with an important industry like this, and with the decision to nationalise, interim arrangements had to be made for carrying on the industry with the good will of all working in it. My final point is that if the right hon. Gentleman was taken by surprise at this statement, he was remarkably well prepared for it.
I always devote the utmost attention to any duty which I may be called upon to discharge. I do not see why I should be criticised for that. Would the right hon. Gentleman kindly answer the questions I asked him, whether legislation is necessary to set op the Board, and if so, when that legislation will be introduced?
We have sufficient powers of control and direction during the transitional period.
Will the Government make available the report which apparently has been in their hands since December?
To do that, I must seek the permission of the authors of the report.
Surely, it must he produced to the House.
Could you give the House guidance on this point, Mr. Speaker? We have had a statement pre- pared by the Minister and, according to the length of the questions—or the statement—which followed from the Leader of the Opposition, it would appear that some kind of courtesy through the usual channels had been afforded to the right hon. Gentleman in that he was given some indication of what we were going to be told. In my opinion, this has led to a Debate, and I ask whether, in the case of future statements of this nature, this courtesy, enabling briefs to be prepared beforehand by the Leader of the Opposition, will be extended so as to promote a Debate in which we can all join?
I cannot say anything about the courtesies which go on through the usual channels. I am afraid it does not come within my power to prevent or encourage them. I know nothing about the matter. I quite agree that if statements are made it is unfortunate, to say the least, if they result in prolonged and irregular Debates. May I remind the House that this is, perhaps, one of those times of excitement and tension when, after all, the House of Commons is showing that it is a live body?
On that point, may I be permitted to inform you, Mr. Speaker, that I am not aware of any exceptional courtesies which I have received in this matter, except that last week I asked the Chief Whip whether a statement would be made on Monday or Tuesday, and, at any rate, to let me know on which day it would be made? Otherwise, when I collected my thoughts upon this subject and barbed one or two interrogatory arrows, I had not at that time received any information which was not in the possession of the House. Therefore, I hope I shall not be accused of having ill-treated or ill-returned any courtesy with which I have been treated, not only by the Government but by hon. Members opposite.
While heartily welcoming this statement made by the Minister of Supply, which is on the right lines, I would like to ask if the Government intend to take over all the derelict steelworks in this country. If they are, it will spell disaster. This is a different industry from coalmining and railways. By that I mean that we can build new steelworks, and that is our only way out. We have got to build new steelworks, even more up to date than those in America, and not take on a lot of derelict steelworks. I know one steel- works, the owners of which pretend they do not want them taken off their hands. I warn the Minister not to be led away, because we are not tied up in the same way as we are with the mines. There we had hardly any way out, and we would not have any way out with the railways, but we have a way out in this case. We cannot build a railway to compete with the present railway system, but we can put down new steelworks. We would get the men, and hon. Members opposite would not get them because the men would not work for them. Then they would come and appeal to us, and ask us to take the steelworks off their hands.
On a point of Order, Mr. Speaker. With great respect, did you not give a Ruling that this Debate should be continued only in the form of questions?
Those were only the preliminary remarks.
I thought I gave a fairly strong indication of the procedure which I thought should be followed. Perhaps it has not been followed exactly, and I hope the rest of these proceedings will be in the form of interrogatories as far as possible.
Is it not the case that the Leader of the Opposition put his arguments in an interrogatory manner, and that my hon. Friend the Member for Dumbarton Burghs (Mr. Kirkwood) put his interrogatives in an argumentative manner?
I did not stop the hon. Member 'for Dumbarton Burghs (Mr. Kirkwood) because I thought what was sauce for the gander, was sauce for the goose.
On a point of Order. I think you will remember, Mr. Speaker, that during the last Parliament a certain hon. Member opposing the Coalition Government felt that statements made by Ministers after Questions were liable to put the House in an awkward position. Surely, on this occasion, it has been shown that the practice, which has slowly grown, is liable to develop, even if only interrogatories are allowed, to a stage at which you, Sir, might find great difficulty in stopping such discussion. I do not know how you visualise stopping these interrogatories, but surely it might be suggested at some time that a document of this importance should be issued in the form of a White Paper so that there could be an opportunity for debate. There is nothing, at the moment, on which a Debate can take place.
I appreciate the arguments which the hon. Gentleman has adduced, and I have no doubt they will be carefully considered for future application.
I wish to raise another point of Order which I think is important. I have always understood that it is a Rule of the House that if, in the course of a statement or a speech, a Minister refers to a document and quotes figures from it, it is obligatory upon him, on request. to make the substance of that report available to Members of the House. I would like to ask your Ruling, Sir, on whether that would not apply to the report on the steel industry to which the Minister has referred.
I do not know that the Minister quoted it. He mentioned it. I cannot remember offhand the actual wording of the Rule, but I think if it is a departmental document, it does not necessarily have to be produced. It must be something analogous to a document produced in a court of law, or an Ambassador's report, so far as I remember. No doubt, it will be within the recollection of the Minister, but as far as I know he did not actually quote from it.
He did.
I certainly understood, and I think other hon. Members did, that not only did the Minister quote from a report, but he quoted precise figures. The figure that stays in my memory is the figure of £168 millions for recasting the steel industry.
Even so, it may not necessarily be a document which comes under the Rule. I do not think myself that it is.
Cannot the Government relieve us of this difficulty, by saying that they will publish the report?
My right hon. Friend said that it would require the permission of the authors. That can be ascertained. I see no objection to publishing the report if the authors agree.
Having regard to the fact that the British Iron and Steel Federation has consistently put the interests of its members before the interests of the nation, and that its restrictions and practices are crippling national recovery, will the Minister promise to draw from the ranks of technicians and managers the members of the advisory council of which he has spoken; and will he call in American and Continental experts, as may be found desirable?
At this stage I do not think it would be possible to define the personnel of the Control Board The need for having up-to-date technical advice will certainly not be overlooked.
Could I ask the Prime Minister, with reference to a phrase which he used in his answer, whether there is any difference between the words he used, and the statement made by the Minister of Supply? The Prime Minister used the expression "nationalise the steel industry," whereas the Minister of Supply confined himself to the much more general term "a considerable measure of public ownership." Is there any difference between those phrases, and which is the view he holds; or are we to gather the Prime Minister is only taking a somewhat cursory view of this particular problem?
Perhaps the right hon. Gentleman did not follow the statement, or he would have seen that two phrases were used in the statement made by my right hon. Friend. One statement was "a measure of public ownership "and the other was" nationalisation." I am sure the right hon. Gentleman would not wish the same word to be used all the time, The iron and steel industry is an industry with very great ramifications. I thought there was common agreement that any form of nationalisation must consider these various ramifications, and it was not suggested for a moment that everything would be nationalised. Part would he nationalised and part not. [ Interruption. ] Really hon. Members opposite are getting 'very indignant. Is it to be suggested that, in this announcement, every single detail about the plan should be set out? Surely hon. Members can afford to wait.
May I seek your guidance, Mr. Speaker, on one point? I understood the bulk of the statement of the Minister of Supply to deal with an interim period under the proposed new Board, and that was the main subject of the subsequent interrogation. When, at an earlier stage, you ruled on the propriety of our proceedings, I understood you to say that the Minister's statement could not be discussed on a Motion for the Adjournment, because legislation was involved Subsequently the right hon. Gentleman the Prime Minister rose in his place and said that for the purpose of setting up this interim Board no legislation was required. In those circumstances, in my respectful submission to you, Mr. Speaker, on your former Ruling, it would now be quite in Order for somebody on the Government Front Bench to move the Adjournment of the House in order that this subject could be properly debated. As I understand it there is nothing in your Ruling to prevent that. Am I right in saying, that we could put the proceedings in Order, and discuss the statement properly, without the limitations to which the right hon. Gentleman the Member for Woodford (Mr. Churchill) was subjected, if, in reliance on the statement of the Prime Minister, that this Board could be set up without legislation, the Adjournment of the House were now moved?
That would De a very narrow point indeed. It would be bound to involve legislation, and it would be very difficult for the Speaker to control the Debate. Quite frankly, it seems to me impossible to accept a Motion for the Adjournment on that point alone, because it would inevitably involve a discussion on legislation, in view of the object for which I gather the Board is being set up. Further to the point of Order raised by the hon. Member for Rugby (Mr. W. J. Brown) I have refreshed by memory. I will read the following extract from Standing Orders: It a. Minister of the Clown quotes from a despatch, or other State paper…"— I do not think either affects this point. This ruling is analogous to the rules observed in courts of law against the quoting of documents not produced in evidence, but it cannot be applied to private documents. The document in question seems to be a private document, therefore the Rule does not apply.
It is obvious that it does not come under the Standing Order you have just quoted In those circumstances, and in view of the general desire of many hon. Members to get all the relevant information on this matter, may I ask the Prime Minister or the Minister of Supply to do their best to see it it can he published?
If the hon. Member had been listening, he would have heard me say, about five or six minutes ago, that publication depended on getting the permission of the authors, and that I would seek that permission.
The Prime Minister did not use that expression.
He did.
If my point was the narrow point you suggested, Mr. Speaker, of course I do not press it. I understood from the Prime Minister that this Board was not a board that would carry on for any short interim. The only undertaking about legislation was that it would be in the lifetime of this Parliament; there was no suggestion about this Session. I do not think the point can be a narrow one. We may be operating under this Board for years.
Arising out of that point of Order, Mr. Speaker, could you help me, in view of a correction which I received on another occasion? I understood the hon. and learned Gentleman the Member for the Combined English Universities (Mr. Strauss) used the phrase "We could put the whole of this discussion in order "if something were done. Is not that a gross reflection upon the Chair?
I do not think it was meant as a gross reflection upon the Chair. I think it was an honest desire to try to get a discussion, and to get me to look kindly on this proposal. There is another point which the hon. Member forgot, namely, that the Minister said he thought that, in clue course, there would be a Debate on the matter.
No.
I suggested that the matter of a Debate should be raised through the usual channels. On a point put to you, Mr. Speaker, may I say that we did take a definite decision with regard to the public ownership of the iron and steel industry, and in doing so also announced certain interim arrangements, and those interim arrangements were part and parcel of the nationalisation. It is quite impossible to sever one from the other. Therefore, I submit, Sir, that your Ruling with regard to the Adjournment Debate must hold.
On the question of the Debate, am I right in thinking that the right lion. Gentleman is willing, in principle, to give a Debate on a Motion, when the whole matter can be discussed freely at the earliest convenient moment after we reassemble?
I should like to know what kind of a Motion the right hon. Gentleman proposes.
Surely it is for the Government to propose the Motion, when they come forward with a scheme affecting one of our greatest industries? Surely the Government would not shrink from bringing a proposal to the House of Commons?
Not necessarily. It is a matter of administration, and it can be raised on administration. It is a matter of the introduction of legislation.
There is to be no legislation for some time. May I remind the right hon. Gentleman that he has just explained that no legislation will be needed for the Board, and the other legislation is not to come forward until after the Board has made prolonged inquiries, and the education of Ministers on the subject is completed? Surely we are entitled to have this Debate, and the Government should put down a Motion in terms agreeable to themselves at the earliest possible date; that is not a matter for the Opposition.
I think the right hon. Gentleman might discuss this through the usual channels. When an indication of legislation is given by the Government, with an indication of interim arrangements, it is not therefore necessary for the Government to put down a Motion. It is a matter for legislation.
Does not the right hon. Gentleman realise that, in a matter of this kind, it is not simply a question of procedure? Following the declaration which has been made great anxiety is felt, and it may be that the trade of the country will be hampered. We ought to know where we are, at an early opportunity. [ Interruption. ] I am putting this point to the Prime Minister. We have a right to know exactly what the position is, not in every detail, but in broad outline. I hope we may hear from the Prime Minister something a little more definite than a mere indication to probe the secret channels.
As one of the Members for the great city of Sheffield, which derives its whole living from steel, I would like to ask the Minister two questions. Is he aware of the very grave apprehension his statement will arouse in the minds of those people engaged in the steel industry at the suggestion of further Government interference at a dangerous time like this? In order to put his proposals into operation, has he a further plan to give full employment to the thousands of steel workers in the industry when this acrobatic policy becomes a complete failure?
Answer.
rose —
Perhaps we had better allow the right hon. Gentleman to answer.
In answer to the hon. Member for Hallam, Sheffield (Mr. Jennings) I would say that I am aware there are differing opinions on this matter. I believe there is a very large body of opinion in the industry which will welcome the Government's proposals. With regard to the second part of the hon. Member's question, it is the belief of the Government that only by bringing important sections of this industry under public ownership can the necessary modernisation and development be proceeded with actively.
Will the right hon. Gentleman not agree that the main object of the Government's proposals is to enable industry, for the first time in many decades, to get steel and iron as cheaply as they have been available for many years past to our foreign competitors?
The primary purpose of these proposals is to improve the efficiency of the industry.
On a point of Order. In view of the fact that the Minister's statement today amounted to little more than a reiteration of the programme outlined at the General Election, may I submit to you, Sir, that questions should not be allowed at this stage? [HON. MEMBERS: "Oh."] May I submit that questions are out of Order which are not for the purpose of eliciting information?
I agree with the hon. Gentleman that I should like to see this discussion come to an end, but hon. Members have their rights, and I am not going to stop free speech in this House.
May I say, with great respect, Sir, that I was in no way seeking to restrict the right of free speech? But I have been ruled out of Order on many occasions on my questions—[ Interruption. ] I have had questions ruled out of Order on the ground that they were not asked for the purpose of eliciting information. May I suggest that what is sauce for the goose, is sauce for the gander?
I have an idea that it we trust to the common sense of hon. Members, they will see these questions come to an end fairly soon.
May I ask the Prime Minister a question? Is he aware that once the Government become monopolist producers of iron and steel in this country they will have to enter into sharp and daily competition with every other steel producing country in the world, and will find themselves in rivalry with the United States of America, Australia, India, Belgium, and a great many other countries? Does he really think that is going to help the Foreign Secretary to establish good relations with other countries? Is it not common sense that if we are to have State monopolies, they should be, at least, confined to goods and services which do not enter into international trade?
The short answer to the hon. Gentleman is that difficulty has been caused between countries, in international affairs, often by private monopolies.
Is the right hon. Gentleman aware of the satisfaction that will be occasioned by this announcement to the vast body of workers in this industry? I should like to ask him if there will be an opportunity to debate this question of some measure of public ownership which has been raised. Some hon. Members on this side of the House, I believe, have the idea that there might possibly be an opening under this kind of control, for a certain amount of divided responsibility, which might not prove satisfactory. May I ask my right hon. Friend if he recalls that the periods of great prosperity and full employment in this industry have been during the periods of war and rumours of war? Does he realise that there will be great satisfaction in all parts of the country at the removal of the temptation to make profit out of war by friends of non. Members opposite?
Are we right in assuming that no step will be taken, even administratively, with regard to this industry', for any change, before the House has had an opportunity of full discussion of it?
Certainly not. Administration must go on.
Not before we have had an opportunity to debate the proposal?
The hon. and learned Gentleman, I thought, said any step at all." I have already explained that my right hon. Friend is going to have discussions with the industry.
Cannot the Prime Minister assure us that he is not going to take any important, decisive administrative step, before this matter is debated?
No. I am certainly not going to give an assurance like that.
Hitler.
On a point of Order. Is it in Order for a Member of this House to accuse the Prime Minister of acting like Hitler?
On a point of Order—[ Interruption ]. I am going to make a point of Order.
Is the point of Order the right hon. Gentleman wishes to raise the same as the point of Order raised by the hon. Member for South Cardiff (Mr. Callaghan)? I do not think it is. The hon. Members asks if it is in Order to call the Prime Minister "Hitler." I, personally, do not think that ought to have been said.[HON. MEMBERS: "Withdraw."] Hon. Members ought not to accuse other hon. Members, by calling them offensive names.
Of course, Sir, I withdraw it unreservedly. But may I ask all sides of the House what difference there is between the policy—
I think we ought to be prepared to leave it at that. The House is always generous to repentant sinners, and not quite so much to one who tries to carry on the controversy.
May I now submit my point of Order? We heard just now the Prime Minister say that he could not give any guarantee that some urgent, definite, important administrative step might not be taken even before we meet again after the holidays and have a chance of debating this matter. Does that not affect the position created by the statement this afternoon, in the sense that it constitutes a matter of urgent public importance? The Prime Minister is not prepared to give us an assurance that the position will still be open. What we apprehend to be great evils will follow from this departure. Until we meet again we lie under the shadow of some far-reaching, administrative step. Is that not a case within the meaning of the Standing Order justifying the moving of the Adjournment of the House?
No. I think that, in either case, the whole matter would be involved in future legislation, which would render the discussion out of Order. Supposing the Government take some drastic action, which the right hon. Gentleman seems to fear, it would be open to the Opposition, if the Government should so act, to put down a Motion of Censure straight away.
A bit late.
May I now ask a question which I was not able to get in earlier because the fight between the Front Benches was so hot? At what stage in the proceedings is it intended to draw the line between private enterprise and nationalisation?
That is a matter upon which I should like to take the advice of the Control Board.
Does the right hon. Gentleman really mean to say that he has made all this announcement, without having arrived at a clear opinion as to where this line of delimitation is to be drawn?
It is necessary to give this matter prolonged consideration in the circumstances of varying plants, and it is necessary that there should be technical advice, which can only be given, in the opinion of the Government, by a board constitutionally arranged.
I have been trying for the last half-hour to catch your eye, Sir. With respect to the last statement of the right hon. Gentleman, does he not agree that, at least, his statement today will have an unsettling effect upon a very wide range of British industry? Is it not necessary in the Government's own interests, and in the interests of the country's advance, to state now, in some way, the limitation of his policy? How far does it go, roughly?
Answer.
That is the same question, in a different form, as that which I answered before. It is necessary to have technical advice in the particular circumstances.
Will the iron ore producing interests be included in this scheme of public ownership? If so, will those interests be included in the proposed board?
It is not possible to go into details of delimitation at this stage.
Does not every word of this conversation and the statement by the Minister show that we are in the presence of a pure political ramp?
NEW TOWNS BILL
"to provide for the creation of new towns by means of development corporations, and for purposes connected therewith "presented by Mr. Silkin; supported by Mr. Herbert Morrison, Mr. Arthur Greenwood, the Chancellor of the Exchequer, Mr. Westwood, Mr. Aneurin Bevan, Mr. Belcher and Mr. Fred Marshall; to be read a Second time upon Tuesday, 30th April, and to be printed. [Bill 110.]
SITTINGS OF THE HOUSE
Resolved: That this House do meet Tomorrow at Eleven o'Clock; that no Questions be taken after Twelve o'Clock; and that at Five o'Clock Mr. Speaker do adjourn the House without Question put."—[ The Prime Minister. ]
ADJOURNMENT (EASTER)
Motion made, and Question proposed, "That this House, at its rising Tomorrow, do adjourn till Tuesday, 30th April."—[ The Prime Minister. ]
4.17 p.m.
Is it not important that this matter of the iron and steel industry, the urgency of which has been demonstrated, should be discussed immediately?
We are now considering another matter, the Easter Recess Adjournment Motion.
That is the point was raising. In view of the statement made by the Prime Minister, and in view of the obvious urgency of this matter, could we not immediately debate this whole question?
It is quite impossible. The Question now is that the House do adjourn until 30th April, and, therefore, that Debate would be out of Order. We have already resolved that the House will meet tomorrow at Eleven o'Clock and that no Questions will be taken after Twelve o'Clock.
Should not this House return this day week instead of 30th April, in order to provide an opportunity to debate this matter next week? We could then have two or three days' Debate instead of having an Easter Recess? That would give plenty of opportunity for this matter to be discussed. Obviously, it is of great importance to the steel industry to know where they are. A two-day Debate next week instead of taking the Easter Recess would give an opportunity for the Government to make a full statement of the position, and we on this side would have our opportunity of stating our objections and of discussing those points which have been ruled out of Order today. The difficulty about discussion being in Order would be overcome if that course were pursued. Is it not possible for us to resolve that this House should return this day week, instead of on the day on which it was originally decided that the House should resume its sittings? Is it not possible for this House to return on this day week?
It is open even now, for the hon. Member to move an Amendment to the Motion.
I beg to move, to leave out "Tuesday, 30th April," and to add" Wednesday next."
The reason for moving this Amendment is that it is of great urgency that this House should discuss the matters which have been raised by the statement of the Minister of Supply, and the further statement. made by the Prime Minister. I do not want to delay the House improperly, but this is a matter of great importance to thousands of steel workers and to millions of consumers, because steel is the basis of many of our industries, and the basis of much of the export trade, which is so necessary for our future existence. I submit that there can be no matter of greater urgency to the future of this country than the announcement which has just been made by the Minister of Supply. For those reasons I desire to move this Amendment.
I beg to second the Amendment.
Question put, "That the words ' Tuesday, 30th April,' stand part of the Question."
The House divided: Ayes, 264; Noes, 147.
Main Question again Proposed.
On a point of Order, Mr. Speaker. May we know what exactly is happening? Has a Division been called or not?
An hon. Member raising a point of Order, at this stage, must be seated and covered. I think that we have ruled in the past, that a handkerchief or an Order Paper is not a sufficient covering, and if the hon. Member wishes to raise a point of Order now he must obtain a hat.
Resolved: That this House, at its rising Tomorrow, do adjourn till Tuesday, 30th April.
BUSINESS OF THE HOUSE
Motion made, and Question put, That the Proceedings on Consideration of Lords Amendments to the Acquisition of Land (Authorisation Procedure) Bill, be exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House)."—[ The Prime Minister. ]
The House divided: Ayes 261; Noes, 141.
WAYS AND MEANS
REPORT [9th April]
Resolutions reported:
CONTINUANCE OF PART I OF THE SAFE GUARDING OF INDUSTRIES ACT, 1921. (CUSTOMS)
1" That the duties of customs chargeable under the Safeguarding of Industries Act, 1921, for a period expiring on the nineteenth day of August, nineteen hundred and forty-six, shall continue to be chargeable for a further period of two years from the said day."
COFFEE AND CHICORY EXTRACTS, ETC. (CUSTOMS)
2. "That customs duties shall be charged on preparations consisting of or including extracts, essences, or other concentrations of coffee or chicory imported into the United Kingdom at the following rates, that is to say— preparations not being Empire products—the lb. (dry weight) —9d. preparations being Empire products—the lb. (dry weight) —7½d. or, where the preparation contains, as a part or ingredient thereof, any article which is liable to customs duty apart from this Resolution, with the duty aforesaid or with the duty chargeable in accordance with the Schedule to the Customs Tariff Act, 1876. whichever is the higher."
COCOA DRAWBACK—THEOBROMINE. (CUSTOMS)
3. "That drawback under Subsection (2) of Section two of the Finance Act, 1911 (which provides for a drawback on goods manufactured or prepared from cocoa) shall not be paid in respect of theobromine."
ENTERTAINMENTS DUTY—GAMES AND SPORTS, ETC. (EXCISE)
4."That as respects payments for admission to entertainments held on or after the fifth day of Nay, nineteen hundred and forty-six, in subsection (3) of section one of the Finance Act, 1935 (which provides for reduced rates of entertainments duty in the case of stage plays and certain other entertainments) for the words "a circus or a travelling show" there shall be substituted the words "a circus, a travelling show, a menagerie, or any game or sport other than the racing or trial of speed of animals, vehicles, vessels or aircraft."
And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."
ENTERTAINMENTS—EDUCATIONAL ENTERTAINMENTS. (EXCISE)
5. "That in lieu of the exemption from entertainments duty of entertainments provided for partly educational purposes by a society, institution or committee not conducted or established for profit, there shall be an exemption of entertainments which consist of a stage play, a ballet, a performance of music, the exhibition of a cinematograph film, a lecture, a recitation, an exhibition of artistic work or an industrial exhibition, being entertainments provided by a society, institution or committee which is not conducted or established for profit and the aims, objects and activities of which are partly educational.
And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."
PASSENGER AIRCRAFT LICENCES. (EXCISE)
6. "That an excise duty of one pound shall be charged on licences, to be taken out annually by the owner of a passenger aircraft or his agent, authorising the sale of intoxicating liquor to passengers in the aircraft."
PURCHASE TAX (EXEMPTIONS AND REDUCTIONS OF RATES)
7. "That as from the tenth day of April, nineteen hundred and forty-six, subject to any subsequent order under section twenty of the Finance (No. 2) Act, 1940,— ( a ) purchase tax shall cease to be charge. able in respect of goods of the classes specified in Part I of the Table set out at the end of this Resolution; and ( b ) purchase tax shall become chargeable at the reduced rate and at the basic rate in respect of goods of the classes specified respectively in Parts II and III of the said Table, not being in any case goods of the classes specified in the third column of the Seventh Schedule to the Finance (No. 2) Act 1940, or in Part I of the said Table.
PART I
Classes of Goods becoming Exempt
Upholstered mattresses with interior springs to which the mark shown in the Third Schedule to the Apparel and Textiles Order, 1942, is applied in a manner consistent with any requirements as to the manner of application thereof imposed by or under that Order or the Limitation of Supplies (Cloth and Apparel) Order, 1941, and having effect in relation to such goods.
The following articles of a kind used in the preparation or serving of food or drink (but not including goldsmiths' and silversmiths' wares):— 1. Articles of china, porcelain, earthenware, stoneware or other potteryware. 2. Glassware, not being cut glass. 3. Hollow-ware of iron or steel (whether enamelled or not), aluminium, magnesium, copper or brass. 4. Articles of celluloid, bakelite or other plastic material derived from cellulose, casein, papier mache or synthetic resin.
Cupboards, dressers, draining boards and similar articles designed for use in kitchens, Electric kettles and other cooking utensils incorporating heating elements (but not including goldsmiths' and silversmiths' wares).
Thermal insulation covers designed for domestic water systems.
Portable lamps of the following descriptions:— 1. Hand lamps designed for operation from electric mains. 2. Head, side and tail lamps designed for use on railways. 3. Signal gantry lamps.
Accessories for domestic stoves, grates, ranges and fireplaces, of the following descriptions:— 1 Fire bricks and similar articles designed for use as fuel economisers. 2. Trivets and similar articles.
Epidiascopes.
Sensitised document base paper, transparent tracing paper base and tracing cloth.
Clocks designed for use as public clocks with dials not less than two feet in diameter or with dials having a diagonal measurement of two feet six inches or more.
Typewriters, dictaphones, calculating machines and other office machinery. Cash registers.
PART II
Classes of Goods becoming chargeable at reduced rate
Vacuum flasks and vacuum jars, being flasks and jars of a kind used for domestic purposes (but not including goldsmiths' and silversmiths' wares).
Lawn mowers and garden rollers.
PART III
Classes of Goods becoming chargeable at basic rate
Walking sticks and canes, being sticks and canes which, except for the ferrules, are wholly of wood.
Hair waving and hair drying machines.
Garden furniture (but not including garden ornaments).
Trunks, bags, wallets, jewel cases, pouches, purses, suitcases and similar receptacles being articles of leather, hide or skin, designed for use solely for the purposes of any trade, profession, employment or vocation and unsuitable for use for other purposes.
Photographic cameras.
Photographic enlargers.
Projectors for sub-standard film or for slides.
Lenses and other parts of, and accessories to, such cameras, enlargers or projectors as are mentioned in this Part of this Table.
Unexposed sensitised photographic paper, cloth, plates and film.
Musical instruments, including gramophones, player pianos and other similar instruments, and accessories to, and parts of, musical instruments.
Gramophone records. Player piano records.
Radio gramophones."
PURCHASE TAX—PROCESSORS
8. "That as from such date as may be specified by any Act of the present Session relating to Finance (not being a date earlier than the passing of this Resolution) — ( a ) purchase tax shall be charged where any process is applied to, or so as to produce, chargeable goods of a class specified by or under any such Act; ( b ) all persons who, in the course of or 10r the purposes of their business, apply any process to, or so to produce, any such goods shall be included among the persons who are, under the enactments relating to purchase tax, required to be registered; ( c ) the said enactments shall have effect subject to such adaptations and modifications connected with the matters aforesaid as may he provided for by any such Act."
INCOME TAX—MARRIED WOMEN'S EARNED INCOME
9. ' That Subsection (2) of Section 18 of the Finance Act, 1920 (which, as amended by subsequent enactments, provides, in the case of married persons, for an allowance in respect of wives' earned income of an amount equal to nine-tenths of that earned income or an allowance of eighty pounds, whichever is the less) shall have effect as if the words "seven-eighths" were substituted for the words "nine-tenths" and the words "one hundred and ten pounds" were substituted for the words "eighty pounds."
And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."
INCOME TAX—BENEFIT AND FAMILY ALLOWANCES
10. "That income tax shall he charged on benefit under any Act of the present Session relating to national insurance or any Act amending any such Act, and on family allowances payable under the Family Allowances Act, 1945, or any Act amending that Act."
SURTAX ON SETTLED INCOME
11." That where income arising during the lifetime of the settlor is by virtue or in consequence of a settlement made on or after the tenth day of April, nineteen hundred and forty-six, payable to or applicable for the benefit of any person other than the settlor, it shall, unless it is income from property of which the settlor has divested himself absolutely by the settlement, be treated for surtax purposes as income of the settlor; but this shall not apply to any income if the income is payable to an individual for his own use or is applicable for the benefit of an individual named in the settlement, and the individual to whom it is payable or for whose benefit it is applicable is neither in the service of the settlor nor accustomed to act as the settlor's solicitor or agent."
EXCESS PROFITS TAX—TERMINAL PROVISIONS
12. "That it is expedient to make provision as to the extent to which matters arising during any accounting period falling wholly or partly after such date as may be fixed by any Act of the present Session relating to Finance for the termination of excess profits tax can be taken into account for the purposes of excess profits tax."
NATIONAL DEFENCE CONTRIBUTION—EFFECT OF TERMINATION OF EXCESS PROFITS TAX
13. "That Section nineteen of the Finance (No. 2) Act, 1939 (which fixes the relation of excess profits tax to the national defence contribution) shall not apply to the national defence contribution for any accounting period or part of an accounting period falling after such date as may be fixed by any Act of the present Session relating to Finance for the termination of excess profits tax, and that amendments consequential on the termination of excess profits tax shall be made in the enactments relating to the assessment and collection of the national defence contribution."
RATES OF ESTATE DUTY
14. "That in the case of persons dying on or after the tenth day of April, nineteen hundred and forty-six, the scale of rates set out in the Table below shall be substituted for the stale of rates set out in the Sixth Schedule to the Finance (No. 2) Act, 1940, as the scale of rates of estate duty.
TABLE Principal Value of Estate Rate per cent of Duty. Not exceeding £2,000 Nil Exceeding— —2,000 and not exceeding 3,000 1 3,000 and not exceeding 5,000 2 5,000 and not exceeding 7.500 3 7.500 and not exceeding 10,000 4 10,000 and not exceeding 12,500 6 12,500 and not exceeding 15,000 8 15,000 and not exceeding 20,000 10 20,000 and not exceeding 25,000 12 25,000 and not exceeding 30,000 14 30,000 and not exceeding 35,000 16 35,000 and not exceeding 40,000 18 40,000 and not exceeding 45,000 20 45,000 and not exceeding 50,000 22 50,000 and not exceeding 60,000 24 60,000 and not exceeding 75,000 27 75,000 and not exceeding 100,000 30 100,000 and not exceeding 150,000 35 150,000 and not exceeding 200,000 40 200,000 and not exceeding 250,000 45 250,000 and not exceeding 300,000 50 300,000 and not exceeding 500,000 55 500,000 and not exceeding 750,000 60 750,000 and not exceeding 1,000,000 65 1,000,000 and not exceeding 2,000,000 70 2,000,000 and not exceeding 75
ESTATE DUTY—GIFTS inter vivos, ETC.
15. "That, in the case of persons dying on or after the tenth day of April, nineteen hundred and forty-six, periods of five years and two years before the death shall be substituted for the periods of three years and one year before the death which are material for estate duty purposes in relation to gifts inter vivos and in certain other circumstances."
STAMPS—UNIT TRUSTS
16. "That— ( a ) the enactments imposing stamp duty shall, with such modifications as may be specified in any Act of the present Session relating to Finance, have effect as if units or other shares in property subject to unit trust schemes were stock, releases or reissues of such units (including issues of fresh units where other units have been released) were transfers, and bearer certificates in respect of such units were stock certificates to bearer, and where, whether before or after the passing of this Resolution, such bearer certificates as aforesaid have been issued before the passing of the said Act, stamp duty Mall be charged in respect thereof when they are assigned, transferred or in any manner negotiated; ( b ) stamp duty shall be charged under the heading "Settlement" on the trust deed or other similar instrument of a unit trust whatever the nature of the property which becomes subject to the trusts and by reference to the amount or value of all such property, and shall be so charged as often as any property becomes subject to the trusts as if, on each occasion, a new deed or other instrument were executed in relation to the new property."
SAFEGUARDING OF INDUSTRIES
Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution.
4.45 P.m.
I hope we are going to get some explanation from the Chancellor of the Exchequer, or the Financial Secretary to the Treasury, of the reasons why this proposal is fixed for a period of two years and what, if any, consultations are going on with regard to the future. I should like to take this opportunity of saying something upon this Resolution, which is applicable to the Resolutions as a whole. The Chancellor of the Exchequer is aware that the Report stage of the Budget Resolutions is being taken unprecedently early after the Committee stage. It is the usual practice to leave one whole week between the conclusion of the Committee stage and the taking of the Report stage of the Resolutions. Of course, we on this side of the House make no complaint, because we know it is done to meet our convenience on the question of the National Health Bill. But it is clear that in such a limited time, it has not been possible to ascertain as fully as one would wish, the reaction which some of these Resolutions may have upon various individuals or industries in this country. Therefore, both on this and subsequent Resolutions I should make it plain that the mere failure to put down an Amendment, so as to raise some particular point during the discussion, will not preclude us from doing so when we come to another stage with similar opportunities, the Committee stage of the Finance Bill. I hope that the hon. Gentleman the Financial Secretary to the Treasury will give us a fuller explanation of the reasons for this Resolution than the Chancellor was able to give during his Budget speech.
4.48 p.m.
As I think the right hon. Gentleman the Member for West Bristol (Mr. Stanley) knows, the duties to which the Resolution refer are commonly known as the key industry duties. They were first imposed under the Safeguarding of Industries Act. 1921, for a period of five years. At the end of that time, they were continued for another ten years and after that for a further ten years. Unless something is done about it now, they are due to expire on the i9th August next. The question of their continuation has been a subject of consideration both by the Board of Trade and by the Customs and Excise, and their future cannot yet be decided with any certainty until the wider policy to be followed is decided. It is obvious that the status quo must be continued, until a firm decision is reached. With regard to the period of two years, it is hoped that that will be enough to enable a decision on their future to he taken.
It is also put at two years for the simple reason that the United States have views on Imperial Preference, and it was felt that it would be unfair to them, as well as to the House, to impose these duties for a longer period than two years. I hope that with that short explanation the House will be willing to agree to the Resolution.
I would like to thank the Chancellor for some head signs which he gave when my right hon. Friend the Member for West Bristol (Mr. Stanley) was saying how much he regretted the short time available between the Budget Statement and the bringing forward of these Resolutions today. I am sure that even for old Members of the House it must he difficult, let alone for new Members. At any rate, I have found it so, because I am not clever in these matters. I would like to congratulate the Government, as I may not be able to do often today, on this Resolution. This is one of the small sound things they are doing, and I welcome the continuance of the duties' period for two more years. I also congratulate the Financial Secretary, who made it plain that if there is no policy, and the Government do not know where they are, it is better to preserve the status quo. I only wish that more Members of the Treasury Bench were possessed of his wisdom and advice. I think he will go far. By continuing the period for a further two years industries are enabled to know where they are, and for that reason I am sure every Member of my party will welcome the Resolution. When we can get this Government to preserve a sensible status quo, and not create indecision, some of us feel it is our duty to say what nice things we can about them.
I, too, am very glad to see that these duties are to be continued, and the only doubt I have is whether, in this particular case, two years will be long enough, having regard to the fact that the Government have announced that they intend to proceed with the nationalisation of the iron and steel industry. There have been occasions when the Government have sought to take powers for a further five years, and when we have appealed to them to limit the period to two years. On this occasion, however, our views are in reverse. We should like to see a longer period. I am glad that the Government think it is necessary to safeguard some of our industries in this way.
I would like to associate myself with what has been said from this side of the House, because I remember the maiden speech I made when I came into the House of Commons at the time when Lord Baldwin, then Mr. Stanley Baldwin, was President of the Board of Trade. I am, therefore, particularly pleased that these duties are to continue, in view of the expansionist policy upon which the Government are about to embark in regard to the iron and steel industry.
I had assumed that the hon. Gentleman the Member for Torquay (Mr. C. Williams) had a greater knowledge of the subject than he apparently has, but I would direct his attention to the White Paper, No. 6709, which can be obtained in the Vote Office. That White Paper is entitled, "Proposals for Consideration of an International Conference on Trade and Employment." The reason for not suggesting that the duties should be continued for more than two years is because the Government have a moral obligation in this matter. The Conference has not yet met and, therefore, it is impossible to say what our future fiscal policy will be.
As I listened to the second intervention of the Financial Secretary, with the attention that I always give to whatever he says, I had the feeling that there was more behind his remarks than was apparently behind his first speech. First of all, I understood him to say that the duties were to be continued for a further two years while the Government made up their mind. [An HON. MEMBER: "If they can.''] Oh, yes, I believe that even this Government can make up their mind in two years. The hon. Gentleman said that the Government should have the opportunity of considering the position, and referred us to Command Paper No. 6709, which is familiar to every Member of the House as one dealing with international labour and commerce. I think we might be able to extract, on this Resolution, something more about the Government's approach to international labour and commercial problems than we have yet secured.
We are grateful to the Financial Secretary for his explanation of this Resolution, but on reconsideration we think that the period for which these duties is to be renewed may well prove to he too short, and we shall probably pursue the matter further on the Finance Bill.
Question, "That this House doth agree with the Committee in the said Resolution," put, and agreed to.
COFFEE AND CHICORY EXTRACTS (CUSTOMS)
Motion made, and Question proposed, " That this House doth agree with the Committee in the said Resolution."
5.0 p.m.
This Resolution looks fairly harmless on the Paper, but it raises two points of considerable importance. On the face of it, it might be thought that what we were doing was putting the duty on imported coffee and chicory extracts. That is not really so, because in one of the less interesting parts of the Chancellor's Budget speech, referring to this matter, he said: ' I also propose to remove the statutory prohibition on the import of coffee essences and to substitute an import duty. But no import licences will be granted for the present."—[OFFICIAL REPORT, 9th April, 1946; Vol. 421, C. 1826.] That seems to me to put the House in rather an objectionable position, because here we are asked to agree to a Resolution without knowing what its consequences will be. It is becoming rather a usual habit with Ministers to confuse the issue by playing cat and mouse with the public, as we saw earlier today. For instance, the Government allow a company to make very large profits on Government contracts and then take away 100 per cent. in Excess Profits Tax and they repeal the Trade Disputes Act but take greater powers under Defence Regulation 58AA. I feel that before we agree to this Resolution, we ought to know what the Government really intend. Do they intend the Resolution to be a dead letter because they are not going to issue any import licences, or if they do not intend it to be a dead letter, what are the circumstances in which they would issue licences, and when are those circumstances likely to arise? I suspect we shall receive the answer—I hope not —that they have not the slightest idea.
But assuming that the Government do not mean this Resolution to be complete nonsense, there arises a second point which concerns a rather new aspect of the old controversy of free trade and protection. It would be out of Order to go over arguments on free trade and protection used during the last 150 years, and I have no doubt the right hon. Gentleman is familiar with many of them. The background of all the arguments as to whether an industry should or should not be protected was the assumption that the industry could get the raw materials. As I understand it, the coffee extract industry in this country are restricted to 60 per cent. of the sugar they had before the war, and although they have the plant and the men and long to supply all their customers, they cannot do so because they cannot get raw materials. Meanwhile the demand very much exceeds the supply.
The further question arises as to whether it is really fair to give away a home market now supplied, or which could be supplied, by the trade in this country when you are not allowing that trade to compete because they are not given sufficient raw material. Finally, I ask the right hon. Gentleman, Is it wise to spend dollars on importing a finished article rather than on importing a raw material which would supply our own makers at home and enable them to manufacture this stuff? I very much hope the House will not agree to this Resolution without receiving proper information about what the Government intend to do about import licences and without a firm assurance that the trade in this country will be fairly treated in this matter.
I will try to answer the points put by the hon. Member for Flint (Mr. Birch). This Resolution does not involve any controversy on the merits of free trade or protection. What it does is to tidy up an anomalous position. Under Section 42 of the old Customs Consolidation Act, 1876, there was a prohibition imposed entirely on the import of these extracts of coffee and chicory. That was done simply because it was then considered impracticable to work out a duty which would operate fairly. It has been represented time after time since then that the difficulties could be overcome, and that really the complete prohibition was no more than a hindrance to legitimate trade. What this Resolution purports to do is this, and no more: It is a convenient method of imposing an import duty on this particular type of extract. It has now been found practicable to do so, and all the Resolution does is to replace the complete prohibition by what is considered to be a reasonable import duty on the coffee extract.
The result is that the extract is still subject to the provisions of the Import, Export and Customs Powers (Defence) Act, 1939, and the mere abolition of the restriction does not mean, as the hon. Gentleman indicated, that coffee and chicory extracts can be freely imported even subject to payment of the import duty. The Board of Trade must still think it proper to grant the necessary licence. The hon. Member for Flint asked the Government's intentions with regard to that. All I can say is that it will be taken into account in due course, and when and if it is feasible and proper in all the circumstances, in the opinion of the responsible Minister, the licence will be granted, and not before.
The hon. Gentleman asked whether we should not give the industry in this country other raw materials in order to enable the industry to be developed now that the import is allowed. Again, that depends upon the availability of raw materials. It is impossible, on the face of it, to give any promise with regard to allocations that will be made available to the industry. The Resolution is a modest one. It does not introduce any revolutionary change, and in point of fact it will result in a very modest income to the Inland Revenue. The total income from coffee is of the order of £400,000 a year, and the import duty payable in respect of extracts will be commensurate, and quite negligible in amount. With that explanation, I hope the House will now agree to the Resolution.
Will the hon. and learned Gentleman the Solicitor-General or the right hon. Gentleman the Chancellor of the Exchequer give us a little further explanation of the rates of duty proposed? Are they designed to correspond to the existing duties on raw coffee? May we also have an explanation of the meaning et the rather complicated phrase at the end of the Resolution which provides for alternative rates of duty in certain cases?
If I may have the permission of the House to speak again, I apologise for not having dealt with both the points that were raised. The rate of duty is calculated as follows. Roasted and ground coffee bears a duty of 2d. a lb. it is calculated that about 4 lbs. or 4½lbs. of roasted and ground coffee are required to produce approximately 1 lb. of coffee extract. Therefore, the duty is calculated upon the 4½ lbs. in order to produce a roughly commensurate duty. With regard to the second question, the answer is that the provision is designed to prevent a form of tax evasion which would otherwise be comparatively simple. Suppose that there is a compound which includes coffee extract and includes also saccharine, unless the combined mixture is taxable at the higher rate applicable to saccharine, it would be possible to evade a great deal of tax liability. Saccharine is payable at 7s. 6d. an ounce, that is to say, about £6 a lb. Therefore, it is provided, in order to prevent the mixing of a highly taxed commodity like saccharine with a much more lowly taxed commodity like coffee extract, that in the event of the two being combined into a single product the higher rate of duty, namely, that payable on saccharine, in the instance I have given, shall be the duty which is applicable. The object of the second part of the Resolution is simply to prevent that form of tax evasion which would otherwise be quite simple.
The hon. and learned Gentleman the Solicitor-General has addressed the House twice on this Reso- lution, the second time by leave of the House, as is customary. I hope that on future occasions he will endeavour to restrain his anxiety to answer the points that have been raised, so that when he does rise he may have an opportunity of replying to all the points which various hon. Members wish to put to him. Otherwise, he may find leave to speak again refused on a number of occasions.
The hon. and learned Gentleman stated that it had been found practicable to introduce this form of words, and he then referred to certain legislation dated 1939 under which he said licences were to be granted by the Board of Trade. The point I wish to make is that surely the Ministry of Food comes into this matter of coffee. After all, coffee is a foodstuff with which one would expect the Ministry of Food to be concerned. Yet we have the Solicitor-General quoting to u, Regulations of Customs and Excise and referring to licences issued by the Board of Trade. Surely, the Ministry of Food is to be consulted as to whether these imports should be permitted? I should be grateful if—speaking for a third time by the leave of the House perhaps—the Solicitor-General would say whether the Ministry is to be consulted in any way in this matter.
Of course the Ministry of Food will be consulted on all matters relating to food, but the actual licensing authority under the Statute is the Board of Trade. Theirs is the hand that moves, and the Ministry of Food exercise their influence as to what the amount taken shall be.
I am grateful to the learned Solicitor-General for explaining—
Should not the right hon. Gentleman ask for leave to speak again?
On a point of Order, Major Milner: I have not yet made a speech. I interjected during the speech of the hon. and learned Solicitor-General to ask him to elucidate a point he had made, but if you consider, Mr. Deputy-Speaker, that I have made a speech I will ask the leave of the House to speak a second time, as did the hon. and learned Gentleman. I confess that even after hearing the explanation of the hon. and learned Solicitor-General I am still mystified by the purpose of the Government in bringing this Resolution before the House. Ail we have had to go upon in this matter hitherto are two sentences in the Budget speech of the Chancellor, in which he stated: I also propose to remove the statutory prohibition on the import of coffee essences, and to substitute an import duty. He added: But no import licences will be granted for the present."—[OFFICIAL REPORT, 9th April, 5946; Vol. 425, C. 1826.] Rather to my surprise the hon. and learned Solicitor-General has stated that the statutory prohibition on the import of coffee essences was not a wartime prohibition but has been in operation, apparently, since the Customs and Tariff Act of 1876. For no less than 69 years, through all the great free trade era, there has been this prohibition on the import into this country of essences and extracts of coffee. After the prohibition has extended all this time, and when the Chancellor is badly in need of every bit of foreign exchange upon which he can lay his hands, and of dollars in particular—and after all, it is from the United States, I understand, that any possible import of coffee essences and coffee extracts will come — it does seem the most astonishing thing that at this time, when every dollar is precious to us beyond all words, that the Chancellor should propose to repeal the statutory prohibition and to substitute therefor a rather low rate of duty. It is a low rate of duty because it corresponds, we are told, with the duty of twopence a pound on coffee, and the duty on coffee is exceedingly low compared with the duty on tea, as every housewife is surely aware. It therefore seems an amazing thing that the Chancellor, for some reason which is not in the least clear to anybody, is going to permit the import of coffee extracts and essences at a very low rate of customs duty.
5.15 p.m.
The House is bound to ask itself why this is being done. Where has the pressure come from? In the near future we shall be discussing proposals for widening the area of free trade throughout the world with the United States and other countries. Would it not be a good thing to go into that conference with a certain number of points to concede at the time, instead of disarming ourselves in advance by abolishing at this stage a statutory prohibition upon the import of coffee essences and substituting for it a very low rate of duty? As I have said, we are bound to ask ourselves why this is being done. It becomes all the more obscure when the Chancellor goes on to say, "But when we have established this rate of duty by Act of Parliament, it is not our present intention to allow any of these products to cross our shores." I must admit that I am completely mystified by what the Chancellor proposes to do.
He is going to put something on the Statute Book which will, apparently, be completely useless and meaningless for some unlimited period of time. All this does, of course, is to frighten very considerably those people engaged in the coffee trade in this country who have known hitherto that there would be no competition from imports of essences and extracts. It seems to me that the Chancellor's proposal will do only one thing, and that is to provide a feeling of uncertainty and lack of confidence in a small section of British industry.
I want to refer to an industry in the town of Chippenham where we make Nescafe, a most admirable product. Throughout the war I have been able to smell it, but not to get it, and now I very much desire to get it. Like my right hon. Friend the Member for North Leeds (Mr. Peake) I am mystified about this point. The Chancellor says that no import licences will be granted at present; the learned Solicitor-General said that the yield from this tax was likely to be only a modest sum, in which case there must be some imports. Either the right hon. Gentleman or the hon. Gentleman must have some idea in his mind of when the import licences are to be granted. I should like to know when the modest revenue anticipated by the learned Solicitor-General will start coming in, and I should also like an assurance that the raw materials which are contained in the essences could not be obtained in their raw state, whether they be coffee, sugar or saccharin, in order that firms such as Nestles, about which I happen to know, and other manufacturers of coffee essences in this country, can produce to capacity. I should like to know this before we start importing manufactured products which must necessarily mean paying foreign exchange for labour in some other country than our own.
The learned Solicitor-General was good enough to inform us that this Resolution was not revolutionary, and that was a very comforting assurance. What rather puzzles me is why it was necessary to have this Resolution at all if, as the hon. and learned Gentleman said, the result is almost negligible. If the Resolution was going to produce money or to help trade and industry, I could understand it. Although I do not understand the whole purpose of the Resolution I feel that it must have some meaning. I do not believe that it is negligible and I welcome the fact that the Government are exercising their right and duty to put a higher rate of duty on foreign produce than on Empire produce. I should like to know whether there has been any consultation or agreement with producers in the Dominions. We have a right to information on that point. We want to know how the figures are arrived at. There is a difference of 1½d between 7½d. and 9d., and if they relate to an extract, presumably there will be very much more coffee in the extract than there would be of raw coffee. We ought to make a marked difference between Dominions coffee and coffee coming from somewhere else. On that point we ought to have a little more clarification before we finish with this matter.
On one point, I definitely agree with what was said on behalf of the Government. I have read the last paragraph of the Resolution with care and I interpret it as I think the Government have interpreted it. It relates to the case in which there is an article containing two substances, one with a high rate of duty and the other with a low rate of duty. The interpretation is that the whole thing should be taxed at the higher rate. That is something which I have no doubt the Government learned from their predecessors as they do sometimes. There is probably some further reason for the Resolution which has not yet been mentioned by the Government. One reason may be to build up the amount of the extract that we get, rather than have to ship the bulk of it in coffee. Thus we shall save shipping. Perhaps this proposal has been made at the instance of the Ministry of Transport, and it may be a most excellent idea.
Before we pass away from this Resolution we ought to be sure that the amount of the preference is adequate and that we are doing nothing by way of this duty, in relation to the carrying of this coffee extract from America, that will make the dollar position more difficult. When that point was made I saw that the Chancellor of the Exchequer looking, not as though the point was entirely a new one on him, but as though it was a little bit fresh on him. He now shakes his head, but not very thoroughly. In all probability, he may have had some vague idea but perhaps he has not given it complete fullness of thought. He ought to take warning that although we encourage the import of extract of coffee from America, perhaps only a small amount, it might do something to make our dollar balance a little worse. I understand that a certain amount of this coffee is made for the people of this country. I know that labour conditions do not affect hon. Members on the other side of the House, but I ask them to consider whether the Duty is now sufficient.
I would like to raise a point arising out of the equation of one unit of raw material to four units of concentrated essence. It seems to me that it operates in two ways, as my hon. Friend the Member for Chippenham (Mr. Eccles) has said. Surely, the House would wish that there should be discrimination in regard to the finished article, as distinct from the raw coffee. Therefore, there should not be an exact equation of four to one, if that is a fact, but there should be some means of stimulating home production, since that, presumably, is an important factor in the decision whether we should continue to refuse to have any imports whatever of this essence.
Is it certain that the concentration cannot be keyed up? We are saying here that the ratio is four to one. I admit that is a dry weight and not a wet weight. Even so, is it not possible for somebody seeking to import coffee to get behind these duties on raw coffee by producing a greater concentration than four to one? In that case, they would be importing coffee, if the ratio were eight to one, at half the duty on raw coffee. It would be almost the state of affairs that the right hon. Gentleman is seeking to achieve by the second part of the Resolution, in which he says that saccharine and other substances of more value ought to be cut down in weight.
Ministers tend to intervene too much, perhaps, in response to the Opposition. I have to ask the leave of the House to speak again.
On a point of Order, Mr Deputy-Speaker. May I ask whether the right hon. Gentleman is actually speaking with the leave of the House?
I understood that the right hon. Gentleman did seek, and obtained, the leave of the House.
I wished, Mr. Deputy-Speaker, to make sure that I was in Order. We are making too much heavy weather, intellectually, about this matter. There is a statutory prohibition. In the general fiscal law there are practically no other statutory prohibitions in the whole of our armoury. This is an exceptional state of the law. Before the last war, these matters were frequently considered, and attempts were made to construct an international convention which would be widely applied. The League of Nations spent a lot of time on it. The general feeling then was that statutory prohibitions were objectionable and that there ought to be other means to give effective control of trade. We are all in favour of some control of trade. The old fashioned Free Trader is, I hope and believe, as dead as the dodo. We arc all controllers now. The view taken before the war was that statutory prohibitions were, in general, undesirable. Representatives of His Majesty's Government often supported that view at international conferences. The view was then taken that import duties, in some cases, it may be very high duties, were a better method of preventing or limiting the entry of goods which it was desired to prevent or to limit.
During the war, primarily for exchange reasons, import licences were introduced. They are still a very important part of our machinery and will continue to be so for some time to come. It therefore appeared to His Majesty's Government that we should take this opportunity of getting rid of this very anomalous statutory prohibition and substitute the wider terms of the import duty. I sought to make this matter clear in my Budget speech that there is no present intention to grant import licences for these substances; nor will import licences be granted until the general situation as regards foreign exchange permits. The House will, of course, have an opportunity of discussing, if it desires, the intention of the Government when the time should come to permit import licences. For all practical purposes there is no change in the position. In place of the statutory prohibition, there is now refusal of import licences. None the less, we think this is a tidier and better way of doing it, and that is why this proposal is made. It has the advantage—
rose —
5.30 p.m.
Would it not be more convenient if I made my reply to the hon. Member for Torquay (Mr. C. Williams)? There is the further advantage that under a statutory prohibition you can give no Imperial Preference—you can give nothing to anyone—but under this plan you can give Imperial Preference. "That is one of the advantages of this arrangement. As to the amounts of 9d. for non-Empire and 7½d. for Empire products, it has been our desire to translate the existing preferential margin in respect of coffee into this differential gap. We are applying the preferential rebate of one-sixth on Empire products—that is how the figure is arrived at—which is the same as the rebate now applied on coffee itself. This seems to us a fair and reasonable thing to do.
I would not think it proper that I should ask the leave of the House to speak a third time on this relatively unimportant Resolution, but if the right hon. Gentleman opposite wishes to put a question I will do so. I am only anxious to keep in order and to assist in providing any elucidation that is required, but if there are no further questions to be put, I trust that we may now have the Resolution. I should hesitate to ask the leave of the House to speak a third time on the matter.
I hope the right hon. Gentleman will not impose such a self-denying ordinance on himself. The House will be delighted to hear him any number of times, until we get our questions answered. If the hon. Member for Evesham (Mr. De la Bère) were in the House at the moment, he could only describe the present situation as "most unsatisfactory." We have had speeches from the Solicitor-General and from the Chancellor of the Exchequer. Both have been most courteous, and both have given, I must confess, an entirely different picture of the situation. Let me take first what the Solicitor-General told us. He told us that this tax had been in existence since 1876, and that, since 1876, various generations of Customs and Excise officials, Financial Secretaries to the Treasury, Solicitors-General, and Chancellors of the Exchequer had been trying to find some way of taxing this product instead of the prohibition. Suddenly this year they have found it and the method is to put a tax of so many pence per lb. on the product. That is not exactly a revolutionary financial proposal. If for 70 years people have really been trying to find a way of taxing this instead of the prohibition, they would have come upon this discovery rather earlier, and, quite frankly, it makes me feel that we are not being told the whole truth and that there is something more than this sudden financial discovery behind the change which is now being made.
The Solicitor-General very nearly let the cat out of the bag—the head certainly peeped out—when he told us what revenue was derived from this taxation and seemed to be proceeding to read from his brief what was to be the estimated revenue from the new tax which is now proposed, until he rememBèred, most fortunately, that the Chancellor of the Exchequer had said during his Budget speech that anyhow no importation of these goods was going to be allowed and therefore there could not be any revenue on them. What on earth was the reason, if in fact no importation of these goods is to be allowed, for bringing in this new tax? The Solicitor-General said something else which was most interesting and I hope he will pursue it. The House will certainly give him leave to do so. He referred to the representations which have been made about imposing this duty.
The House would be very glad to know from whom those representations came. Did they come from manufacturers in this country, did they come from consumers in this country, or did they come from exporters in America or elsewhere who hoped to have a chance of importing these products into this country, for which in return we shall have to pay dollars? We should know at whose instance—which to us seems quite meaningless—this is being done?
My final point to the Chancellor of the Exchequer is that he has said that, in the meantime at any rate, he does not intend to grant any import licences for the products on which he is now imposing a tax instead of a prohibition of imports. He knows, of course, that the people who would be supplying these goods in this country today are now suffering under a rationing system and that they are not able, because of the rationing system, to produce up to 100 per cent. of their capacity. Can we have an assurance that this 'ban on imports is to be continued by the Chancellor of the Exchequer until the industry in this country is relieved of the handicap which rationing places upon it, so that once the Government throw competition, for no discoverable reason, open to imports from abroad, at any rate manufacturers in this country will he able to start on a level and without handicap? I am speaking for all on this side of the House when I say unless we have some clearer indication of the purpose behind what seems up to now a meaningless transaction, we shall suspect the worst—not that the Government have brought down something which means nothing, but that they are concealing from us, what it really means. In that case we shall be forced to divide against the Resolution.
Question put, "That this House doth agree with the Committee in the said Resolution."
The House divided: Ayes, 244; Noes, 125.
ENTERTAINMENTS DUTY— GAMES AND SPORTS
Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
5.49 P.m.
It was a matter of great pleasure to many of us on this side of the House when the Chancellor, in his Budget speech, announced that he was making a concession in respect of Entertainments Duty for sports and games. The pity of it was that, having been defeated last November on an Amendment to the Finance Bill to achieve this, we found that the Chancellor, having previously gone into the Lobby against us, was willing to make this concession. While it is a pleasure to us, I think it is a far greater relief to hundreds of his supporters sitting behind him. All candidates at a General Election receive a number of the usual questionnaires which they can answer if they think fit. I believe that there was never a questionnaire to which such a unanimous "Yes" was given than that which was sent to candidates on behalf of local or county swimming clubs, rowing clubs, boxing clubs and so forth asking them to support the reduction of Entertainments Duty on sports and games, with the result that, in November last, literally hundreds of hon. Members on the other side of the House were compelled to vote against the promise given at the General Election. Now they have absolution from the Chancellor of the Exchequer in the Budget he has introduced.
When the Chancellor made his speech last week he said he hoped that the saving on Entertainments Duty would be handed on to the public in the form of reduced entrance fees. This we have seen is already being promised. It naturally does not apply to the present season for football clubs and they have not said anything about it. But there was an announcement yesterday from the M.C.C., Middlesex and Yorkshire that at their cricket matches during the summer, they are going to make the reduction which the Chancellor suggested. Whether the professional football clubs will all be able to do the same when the end of August comes, may be a matter of some dubiety at the moment. I notice that in view of the concession the professional footballers' union are going to apply for increased wages for players. That may be a very difficult matter to settle. If there is a strike of professional footballers, the Minister of Labour will not be in a position to send 22 soldiers in a lorry to take the place of Aston Villa versus Arsenal.
Why not?
The hon. Member for Northampton (Mr. Paget) appears to be pleased with the idea of having some soldiers to play instead of the usual professional teams. I think the professional football clubs will make the concession, not to the players, but in respect of entrance fees.
One set of sports bodies who will not be able to accede to the request of the Chancellor, are those which devote the whole of their surplus funds to the public benefit. I will mention two such bodies which illustrate the point, the Amateur Boxing Association and the Amateur Swimming Association. The Amateur Boxing Association have, for many years, devoted the whole of their surplus funds to teaching the noble art of self-defence to young people. They have been prevented during the war from doing this in respect of boys still at school, because they had no surplus funds. Their funds were always raised by subscriptions, and the holding of championships and exhibition bouts in different parts of the country. When they held these during the war, they did not put up the price of entrance fees to meet the additional Entertainments Duty, consequently, at the end of each year, they found themselves with practically no surplus.
The same applies to the Amateur Swimming Association who have devoted all their surplus funds to teaching boys and girls to swim. In each of these, and many similar cases, associations when they have public exhibitions will go on charging the same fees as they did during the war. There will probably be no concession to the public, because these associations wish to follow their old practice of using the surplus funds for the benefit of the younger generation. I warmly acknowledge the benefit of the introduction of the concession which was partly suggested by the Financial Secretary to the Treasury, when he spoke against my Amendment on the subject last November.
I also welcome this concession. There are many local football clubs and sports associations who have had very great difficulties in making ends meet. in addition there are repertory theatres who make a cultural contribution to the life of the community, particularly in country towns, and they have found it very difficult to carry on. This concession will be a great help to them.
What is the principle upon which this exemption will be applied to one form of entertainment and not to another? There spring to one's mind horseracing and greyhound racing. If the principle be that the exemption is to apply to forms of entertainment which are not merely or principally gambling vehicles, one would say immediately that that is a very intelligible and proper distinction. But why exempt professional boxing? I am told, by those who have been to recent Albert Hall exhibitions, that the bookmaking carried on there was just as open as on a racecourse. There is very little ground indeed for exempting professional boxing from any form of taxation. Professional boxing is a thing which any Government should watch with a good deal of care.
In the professional arena, there are long contests and tremendous punching power is developed which is permanently injurious to the people who indulge in it. It is then that there are cases of punch-drunkenness which go near to the verge of insanity, permanent insanity, induced for the pleasure and amusement of spectators, and, what is worse, as a money making vehicle for gamblers. I urge very strongly that this matter should be considered and a distinction drawn between the amateur boxing and three-round competitions, which, I believe we would all encourage, Services boxing and local sports associations boxing on the one hand and professional boxing on the other. We should not do anything which will assist this racket of professional boxing; it ought not to be encouraged. [An HON. MEMBER: "What about all-in wrestling? "] The same would apply to all-in wrestling, though I would say that although all-in wrestling appears to be more spectacularly brutal, it is far less likely to be so, though it is not a very edifying spectacle. The Resolution contains the words: …other than the racing or trial of speed of animals,… etc. Is homo sapiens included as an animal or not? Does the Resolution cover human racing sports or not? In a good many definitions man is the foremost animal. I would ask whether foot races are included in this.
6.0 p.m.
I join in the congratulations which have been offered to the Chancellor of the Exchequer on this concession. In South Wales, particularly among the struggling Rugby clubs, it is welcome as a valuable help. Speaking as one who has the honour to represent the city which has the finest Rugby club in the four countries—
No.
I must appeal for your protection, Mr. Deputy-Speaker. I repeat —doubtless I shall be contradicted in later speeches if hon. Members do not agree with me—that Cardiff Rugby Football Club is undoubtedly the finest Rugby football club. On their behalf, and on behalf of all those other Rugby clubs, particularly the smaller ones, in the South Wales area, who have been struggling very hard, I welcome this as a valuable concession.
I wish to ask the Chancellor if he will extend his bounty to one other type of entertainment, or whatever one cares to call it. I refer to the work done by the small motor clubs up and down the country. I have in mind motor-cycle meetings that are held from time to time. I am not speaking of dirt track races—they would possibly fall into the same category as big boxing—but of the small motor-cycle meetings that are held from time to time, not to provide a profit, but because there is a conjunction of like minded men, not wealthy men, who get together and who like to indulge in this form of sport. I have here the programme of a meeting held on Saturday, l6th March, that is, before Budget day. I would draw the Financial Secretary's attention to the fact that it states, firstly, that it is a test of reliability, and not a race. I wonder if that excludes it from the motor racing which is referred to in the Resolution. Secondly, it is a test of the skill of the riders, and of the steering qualities of their machines. I think it probable that it is a test of skill, a test of reliability. It is not a speed trial, it is a time trial. For the narrow reason of encouraging a useful sport, and for the perhaps wider reason that the sterling qualities of these machines may help to develop our export trade, I hope that my right hon. Friend will consider including this form of sport in his conces- sion. This is not a "money-spinner," for the bookmakers. It is not a source of profit to anybody. It depends very largely on the weather whether a meeting is run at a profit or a loss. In those circumstances, if my right hon. Friend has a few pounds to give away, as I have no doubt he has—it would not be a big concession—would he be prepared to consider the claims of these people?
I should like to support what was said by the hon. Member for Harwich (Sir S. Holmes). I am particularly glad that he reminded the House of the Amendment moved from this side of the House in November last year, which sought to achieve what the Chancellor is now proposing in this Resolution, a reduction of tax on certain forms of public entertainment. It is well worth stressing the point he made, because it shows that hon. and right hon. Gentlemen on the Treasury Bench and those behind them realise that they will have to do something if they are to consolidate the votes which sent them to this House in such large numbers last July, and that those of them who are on the Front Bench are getting apprehensive about the state of public opinion. All this talk about nationalisation will not go far enough. They must be up and doing to consolidate their vote.
Having said that, I would add that I am very glad indeed that the Chancellor has seen fit to make this deathbed repentance on behalf of himself, and those hon. and right hon. Gentlemen who sit with him and behind him. This concession will be received, indeed has already been received, very warmly indeed by the lovers of those sports which will he covered by the reduction of Entertainments Duty, I also wish to associate myself with what the hon. Member for Harwich said about the Chancellor's hope that clubs, football clubs particularly, will be able to do something in the way of the reduction of the prices of admission they charge to their grounds. It should be said that perhaps it may not be easy for all these clubs to bring about this reduction at once, because as the hon. Member said, many of them have been finding themselves increasingly in low water in these difficult years, and it would be a little unfair if the public expected an immediate advantage from them. I hope that clubs, particularly football clubs, as and when opportunity offers, will make this desirable reduction by passing on the benefits they are to receive from the Treasury to the public, who in such large numbers have patronised their grounds. I say that as one who has in his constituency an important football ground which draws large numbers of people from a wide area in South Scotland whenever matches arc played there.
The hon. Member for Northampton (Mr Paget) appeared to wish that the benefits of the reduced Entertainments Duty ought not to be extended to the sport of boxing. I think—I do not say this offensively—that he made a somewhat vicious attack upon that form of sport, and I could see that his remarks were not received with the approbation which one would have expected from his friends who sit upon the other side of the House. It would seem that he was out of tune, or out of step, with them. I dissociate myself from what the hon. Member said on that point. Perhaps I have not attended so many boxing entertainments in my life as he has done, but I cannot agree that the amount of gambling on boxing is as heavy, or is conducted in as blatant a way, as he has just suggested to the House.
I agree with one thing he said. He asked—and I hope whoever is to reply will be in a position to answer—whether human beings engaged in foot racing would be excluded from the benefits of this reduction. I think such events should not be excluded. There is a lot to be said for the complete withdrawal of Entertainments Duty on all forms of sport, but I do not intend to go into that matter. It should not be taken for granted that all the people who go to horse racing are merely animated by a vicious desire to bet or gamble. Far from it. I see the hon. Member for Dumbarton Burghs (Mr. Kirkwood) looking at me. I feel sure he will agree with me that large numbers of people in his own Division, and very large numbers in the Division of the hon. Gentleman the Member for West Fife (Mr. Gallacher), would welcome a reduction so far as race meetings are concerned. I am delighted to see the hon. Member is nodding at me. It is probably the first time that complete unanimity has prevailed between us. I wholeheartedly welcome and support this Resolution.
I feel that someone ought to say how much we appreciate what the Government have done. The hon. Member who has just sat down who, I think, represents somewhere in North Wales—
I really must protest against that ery unnecessary remark. I have known the hon. Member for Torquay (Mr. C. Williams) for a considerable time and he knows perfectly well that I have nothing to do with North Wales.
I do not wish in any way to offend my hon. Friend. I was never quite sure which part he represented—North or South Wales. I want to comment on two points. I want to be sure that wrestling matches such as we have in Cornwall are exempt. I think they are exempt, but I would like to be absolutely certain. This is a sport which is rather different from that enjoyed in other parts of the country. It is one of the things on which I might be allowed to speak as it has rather a closer association with Cornwall than with other parts of the country.
Would the hon. Gentleman also include the Cumberland style of wrestling?
If the hon. Gentleman had not interrupted me I was just going to say that.
Is it not true that on the opposite side of the House hon. Members are more used to catch-as-catch-can?
I really would not he quite sure. If I was to take the liberty, I could go into the different forms of wrestling at great length. The other point upon which I should like a little more information is the question of menageries or zoological gardens. I do not know whether they come under this heading or whether they should be considered under Item 4 or 5. I want to be sure whether or not an institution such as a zoo, if it is not run as a private hobby, will get the advantage of this concession. This is a matter which has gone on for a long time. The duty has been paid, or has not been paid, during the war. It is a matter in which I have some slight personal interest as far as my constituency is concerned. I am glad that I roused the interest of hon. Members opposite when I began talking of menageries. I congratulate hon. Members opposite. They are accepting our advice over and over again. It shows that, although they have made very bad mistakes, and are making worse ones every day, as far as this particular matter is concerned, they are improving a little, if very slowly. They could have got all the kudos for this last Resolution, but now, as always, whenever anything good is done, it happens as a result of the suggestions of the Conservative Party.
6.15 p.m.
The remarks we have just heard from the hon. Member for Torquay (Mr. C. Williams) prompt me to put one brief point to the Financial Secretary. What situation will arise if in connection with a circus or a menagerie, as it has been called, there takes place, as part of the performance, some form of chariot racing, or other contest of that kind, which may well form part of the circus proceedings in the ring?
I need hardly say how glad we on this side of the House are that the Government have introduced this admirable Resolution. Naturally, we welcome the concession wholeheartedly. We are very glad that hon. Members opposite who were compelled—I am sure much against their will in many cases—to vote against this concession on a previous occasion, should now be in the happy position of being able to support the reduction of tax on certain entertainments, games and sports. I took a considerable interest in this matter when I was at the Treasury. I have no doubt that the Financial Secretary has had the advantage of reading the minutes I left him on this subject. It was my unhappy lot to be at the Treasury at a time when no concessions with regard to taxation were possible. All of us who were there felt, as indeed the Financial Secretary and the Chancellor of the Exchequer must have felt, the desirability of a concession in this direction.
I am a little surprised that all-in wrestling—if I read this correctly—is given the advantage of this concession when horse racing, the sport of kings and also the sport of the people, does not benefit from it. I hope very much indeed that before the next Budget comes for ward, the Chancellor of the Exchequer will be able to see his way to extend this concession to horse racing. I am sure there are few sports which the people of this country enjoy more, or which are taxed so heavily, or on which the concession is more desired. I do not represent a constituency which has many amenities for sports of this kind. In the City of London we have more churches than any other constituency in England, but I think we have fewer football and cricket grounds. None the less, I should like to say that my constituents in the City, just as much as the constituents in any other part of the country, welcome this concession. We on this side of the House give it our blessing,
I am, of course, grateful for the bouquets which have been showered on my right hon. Friend the Chancellor of the Exchequer for having introduced this Resolution. When we discussed this matter last October and, unfortunately, had to resist the blandishments of Members, I think that many hon. Members did feel that it was probable something might very well happen in April. It has happened. I for one am delighted to feel that the Resolution is here. It came about very largely because of the feeling in the House at that time that, in particular, football clubs, were in a bad way and should be helped. I am delighted to think that football clubs have already got together and that it is likely that some of this concession, at any rate, will be passed on to the spectators. Twopence of it, I think, added to the tenpence-halfpenny which they had before, may possibly go to the football clubs, and the rest be passed on. I also understand that the county cricket clubs are hoping, almost immediately after the Budget is dealt with, to hold a meeting to investigate how they can also share the concession now being given with their spectators, I was asked a number of questions, many of them, I think, by hon. Members with their tongues in their cheeks. Quite obviously, humans are not included in the term "animal." The Zoo is actually now exempt, as it is not run at a profit: menageries will come under the terms of this Resolution.
I am sorry to interrupt the hon. Gentleman, but that is a matter on which I have had correspondence with the Treasury. I do not expect him to give me an answer now, but, if the hon. Gentleman would look into the matter between now and the Report stage and let me have a letter on the subject, I should be quite happy about it.
I am not entirely clear what the hon. Member is asking. I am sorry if I have not completely taken his point, but I can tell him, without any equivocation, that menageries are included in this concession.
Will the hon. Gentleman inquire into that point—
They are entitled to and will actually get the concession. Any menagerie or circus will get it.
I am sorry to interrupt again. Any zoo gets it, yes, but I would like a definite assurance about menageries, and if the Treasury will let me have a letter on that point—
I can tell the hon. Gentleman now that "zoo" includes menagerie and "menagerie" includes zoo. The hon. Gentleman's constituents in Torquay can feel perfectly happy about it.
It is a Tory menagerie.
I was asked by the hon. Member for South Cardiff (Mr. Callaghan) whether the Chancellor would give consideration to the inclusion of small motor clubs in this concession, particularly when they hold motorcycle meetings. The short answer to that is once you begin to deal with track racing at all, you never know where you are going to stop. All sorts of other amateur clubs would feel, and not without reason, that they should be entitled to the concession, supposing motorcycle clubs were included. If my hon Friend feels very deeply about this, he has his remedy. Unfortunately, we do not finish with this Resolution when we pass it tonight. There is the Finance Bill, and, if my hon. Friend feels strongly on the matter, he may test the feeling of the House by moving an Amendment later to that Bill. All-in wrestling is, at the moment, undoubtedly included; whether it should have been included is another matter.
Could I have an assur- ance that that includes Cumberland wrestling? A concession has been given to the rest of Wales, which the hon. Gentleman represents.
Clearly, I have nothing to do with the rest of Wales. I am sure the hon. and gallant Gentleman did not mean it in that sense.
Question, "That this House doth agree with the Committee in the said Resolution," put, and agreed to.
ENTERTAINMENTS—EDUCATIONAL ENTERTAINMENTS (EXCISE)
I beg to move, in line 4, after "music," to insert "Eisteddfod."
Hon. Members will like myself have read this Resolution with considerable interest. It deals with exemption from Entertainments Duty, and I am sure that I am right in saying that the word "Eisteddfod" ought to be included among those. I shall be told, of course, that it is not necessary to have the word "Eisteddfod" there at all; it is assumed by the Treasury that an Eisteddfod is covered, but let me call the attention of 'the Financial Secretary to the vocabulary of the Resolution. The exemption from Entertainments Duty will cover a stage play. Well, an Eisteddfod is not a stage play. It will cover a ballet. That is not an Eisteddfod either. The Eisteddfod is not of necessity a preponderance of music. I ought to know as much about it as any hon. Members; and if hon. Gentlemen challenge me I may sing them some Welsh songs as an example. Seriously, the Eisteddfod is not an exhibition of a kinematograph by any means.
What is it?
It is not a lecture; it is not a speech and certainly it is not a recitation. It is not an exhibition of artistic work or an industrial exhibition either. I am asked, what is an Eisteddfod? An Eisteddfod may be all these and more, or less.
It cannot be.
If my hon. Friend would do me the favour of attending the next Welsh National Eisteddfod, he would not then talk so glibly. There is something peculiar about an Eisteddfod. It is, of course, a Welsh national institution on the pattern of the country itself. What brass bands are to Lancashire, the Eisteddfod is to Wales. [HON. MEMBERS: "0h."] I want this institution exempted from taxation. I understand that the National Eisteddfod is already exempt, but that some local Eisteddfodau are not. Let me remind hon. Gentlemen that the case I have in mind is one from England. Manchester Welsh people recently held an Eisteddfod, to the delight of English people. The English people always have had a taste for the best products of other nationalities. That event was held in Manchester and the tickets were taxed for Entertainments Duty. I want it to be made clear that that cannot happen again. It may be that the promoters of that Eisteddfod in Manchester may be able to reclaim the money they paid in tax, but that, clearly, is a waste of the time of civil servants. I am very anxious, therefore, that this word shall be inserted in the Resolution. The House should remember that most hon. Members from Wales, and most hon. Members who hail from Wales representing English seats, are, in the main, the products of the Welsh Eisteddfod. If they are not, they cannot be very good Members of any Parliament.
This institution is peculiar to the Welsh nation. It has existed from about the eighth century; there are traces of it as early as the fourth century. It is an institution of the common people, run by ordinary men and women; the farm labourers, in every hamlet in the Principality take a part in the proceedings. It is a cultural organisation; and if there is any profit to be gained out of an Eisteddfod it ultimately finds its way to some other educational institution. For all those reasons I plead that this word should be included. I would assure my hon. Friend the Financial Secretary that it is necessary, although I have the impression that the reply he will give to me is that it is not. If I thought that all the taxing officers of the country knew that in advance, I would not press my Amendment. I am satisfied that when the tax officer in England comes across the word "Eisteddfod" he regards it almost as if it were a circus or menagerie. In Wales, on the other hand, they understand what it means, and a Welsh tax officer will know at once that it is a cultural effort on behalf of the people.
I would plead with my right hon. Friend the Chancellor of the. Exchequer to import a little of the William Morris and John Ruskin idea into his Budget as a whole instead of leaning so much towards Engels and Karl Marx. I am in favour of exempting from taxation all educational institutions. I have travelled a great deal like some of my hon. Friends, I find that we have produced in this country some institutions which are worth copying throughout the world, and the Eisteddfod is one. Our ideas of Parliamentary government are indeed worth copying in some of the countries which I have recently visited. Finally, we must remember that democracy does not come from above; democracy and freedom emerge from below, and the motto of the Welsh National Eisteddfod is a very appropriate one, and one which should appeal to us all. It is "Truth against the World." If there is one thing that ought to be preached in the sad world in which we live today it is that truth makes men free. The Eisteddfod stands for all that. I trust that because of these arguments my right hon. Friend will be convinced and that he will accept my Amendment.
6.30 p.m.
I beg to second the Amendment.
I heartily support and endorse all the observations my hon. Friend has so eloquently made about one of our finest institutions. Anyone who has the remotest perception of the domestic life and the cultural activities of the people of Wales will immediately ask, on perusing this Resolution, what the position is of the Eisteddfod, of our national and local Eisteddfodau, of which we have about 100 in the course of a year. It may well be said that they are covered by one of the expressions used in the Resolution as it stands, but I, like the hon. Member for Westhoughton (Mr. Rhys Davies) would like a specific answer to that question, because it would appear to me to be monstrous if this form of educational entertainment were not covered by the Resolution. I cannot think of a more apt description of our Eisteddfodau than that of an educational entertainment.
Even if assume that the Eisteddfod is included among the expressions at present used in the Resolution, I would still say that the position is not really a satisfactory one. After all, the Eisteddfod is a very unique and distinct type of entertainment, and it should be specified by name in a Resolution of this kind. When we look at the games and sports mentioned in the Resolution, we find that there is a high degree of particularisation. Circuses, travelling shows and menageries are mentioned, but, presumably, the Eisteddfod is left to come under the description of "a performance of music." As the hon. Member for Westhoughton has already explained, the Eisteddfod is that, but it is also something far more, and I hope we shall have an assurance that it is covered by this Resolution and that, at a later stage, the word "Eisteddfod" will be embodied in it.
I can save the House a good deal of time by saying straight away that I am advised by those who have had considerable experience in drafting this type of Resolution that "Eisteddfod "is included. I was not surprised that my hon. Friend the Member for Westhoughton (Mr. Rhys Davies) said he had a shrewd idea of what I was going to say in reply, because I had already informed him of what I was going to say.
The hon. Gentleman was not supposed to say that.
I had hoped that that assurance would have been enough for him. We have to resist this Amendment for two reasons: first, because it is redundant, and, second, because, if it is included, it will make the words used in Section 1 (3) of the Finance Act, 1935, read differently from the Resolution, and lawyers may have difficulty later on because it is included in the one and not in the other. A Clause in the Finance Bill will be based on this Resolution, and I can assure the House that the Clause covering this matter will be drafted in such a way as to include Eisteddfodau. It is quite clear that "Eisteddfod" does cover music, recitation, and, sometimes, as in the days of Earl Lloyd-George, lectures or addresses. What we have to make sure of is that it covers not only one type of entertainment but several when taken in conjunction during one performance. As I say, I am told that the point is covered in the Resolution, but we will see that the terms of the Finance Bill when it is brought in make it clear, without any doubt, that Eisteddfod and Eisteddfodau are included.
In view of the very satisfactory reply which I have received from my hon. Friend, I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution.'
Now that the Amendment has been disposed of, I think I ought to say that my hon. Friends and I on this side of the House approve of the contents of the Resolution. If my recollection serves me right, a proposal of this character was included in the Finance Bill brought forward by my right hon. Friend the Member for the Scottish Universities (Sir J. Anderson) before the General Election last year, and I think that the present Chancellor of the Exchequer indicated last October that he was willing to do something about it at an early date. As everybody knows, the task placed upon the Board of Customs and Excise, even though they have the help of an Advisory Committee in this matter, is one which it is quite impossible to discharge under the present law.
It has to be decided whether or not any individual performance is partly educational in character. We thus have the absurdity of having two lists of plays, films and so on, some of which have been held to be partly educational and some of which have been held not to be within the definition. "Charlie's Aunt," I think, has been held to be a partly educational entertainment, and so has that rather bawdy 18th century play, Congreve's" Love for Love." When I was at the Treasury that fact produced a great many protests from people who saw the play, expecting to see something of highly educational value and finding that they had both got out of paying the entertainment tax and had also seen something which horrified their susceptibilities.
The proposal in the Resolution, as I understand it, is that the test in the future shall be the aims of the society producing the entertainment, and not the character of the individual show. This is what was pressed upon us at the Treasury by the society representing authors, of which the hon. Member for Eton and Slough (Mr. Levy) is a member and who came with other playwrights to the Treasury to press this point of view. There will still remain, of course, the general test that the society producing must not be conducted for profit. It is in respect of that part of the proposal that I would ask the Financial Secretary or the Solicitor-General for one or two assurances. Once we have the position whereby Entertainments Duty will not be levied where the play is produced by a society not operating for profit, we may have some abuse of this provision. Obviously, more people will go to see a show if the charge is reduced by the absence of Entertainments Duty than if the duty has to be paid. Given shows of equal merit, a show which does not have to pay Entertainments Duty will yield much higher profits and it will, therefore, be possible for the actors and actresses in it to be remunerated at a much higher rate. There is always the possibility that societies will be formed—and I believe some have already been formed—not having profit as one of their objectives, but the profit actually goes in a very high scale of remuneration paid, for instance, to an actor-manager.
I hope, therefore, that when we come to the Finance Bill it will be made clear that exemption will not automatically be given for all time to any body which can show that it is not conducted for profit. I hope that from time to time there will be some review of these bodies and that some certificate will have to be obtained, be it from the Board of Customs and Excise or elsewhere, to dispense with the necessity for the payment of Entertainments Duty. Broadly speaking, the test by means of the object of the society is undoubtedly much better than the test by means of the character of the individual show. It is much easier to administer, it is much more straightforward and satisfactory, but it may in certain circumstances be liable to abuse. I hope, therefore, that the Ministers concerned will reserve some discretion in the Board of Customs and Excise or in the Treasury to disallow the exemption from Entertainments Duty in cases where it can clearly be shown to have been abused.
6.45 p.m.
My right hon. Friend the Member for North Leeds (Mr. Peake) has asked the learned Solicitor-General to give a clarification of the question whether or not a society is conducted for profit. I would like the answer to be carried a stage further so that we may know precisely what is meant by "partly educational." As the learned Solicitor-General will know much better than I can explain to the House, an expression of this kind can be construed strictly or narrowly; and I believe if it ever came before the courts, it would be construed in favour of the society concerned. That being so, it would be open to a society to show that part of its purpose was educational. There would immediately arise the question, What does" educational" mean? It may be that there is a statutory definition which may be incorporated in this Resolution to prevent any doubt arising. But "education" does not mean merely reading, writing and arithmetic, nor merely learning the arts and the sciences. There is such a thing as political education. One has to put the question, for instance, whether the Fabian Society, which, I presume, exists for educating people in Socialism, the Society of Individualists, which educates people in freedom and democracy, and so on, are to be regarded as educational or partly educational, so that they will be entitled to benefit from this Resolution.
Less controversially perhaps, but with very great sincerity, I would like to mention the question of operatic and dramatic societies generally. There are many Members in this House who have benefited from such education as they received from those societies in the past; and there are many Members who probably would have benefited if they had taken advantage of their opportunities. Operatic and dramatic societies do their best to cover their expenses, but frequently do not exist for the making of profit. They exist partly for the entertainment of their neighbours and partly for the education of their members in the arts of opera and the dramas, and very valuable education it is. Perhaps the learned Solicitor-General would give us some idea of their position.
Finally, I wish to mention the question of schools. Strictly speaking, I would have thought that "a society, institu- tion, or committee "included the board of governors of a school; and, if that school were not carried on for profit, it would be entitled at its annual concert or on any other occasion to the benefit of this Resolution. A slight complication arises there, because we have schools which, according to their original foundation, were not intended to be carried on for profit, but which, in fact, ultimately did make slight profits from time to time. Then there are schools which present the converse problem of being private schools originally intended to be carried on for profit, but which succeeded in being carried on at a loss. How do those institutions fare in the interpretation which the Solicitor-General wishes to give to these words? In view of these doubts, it may be that the learned Solicitor-General, instead of asking the House to accept this Resolution, will consult the Chancellor of the Exchequer once more and take such steps as he thinks necessary in order to consult the various authorities on the subject, because it seems to me to be a complicated and difficult matter.
I would like to exact one more assurance from the Financial Secretary that the effect of this Resolution will not result in difficulties being put in the way of a small society developing its enterprise. It is possible that that may happen, because it is quite easy for a society to describe itself as "non-profit making," to produce evidence to that effect and to go on with a stage play which is educational. Anybody can say whether a play is educational, from examining and reading it. It may take some time when the society itself has to prove it is an educational society. During that time of development and of establishing its reputation, the society will not benefit from the reduction in tax. I would like to be absolutely clear as to the purpose of this Resolution. Is it for administrative convenience only? Can the Financial Secretary give us an assurance that it will not hamper and impede the formation and development of new societies?
I would point out to the Financial Secretary something which has caused a little doubt in my constituency, as, no doubt, in many others. What will be the position of the youth organisations? They exist primarily for the cultural and physical development of the members. One of the sections of those societies is that which presents dramatic plays. Will those societies be exempt?
I would like to take up two points which have been made by certain hon. and right hon. Gentlemen opposite. The right hon. Gentleman the Member for North Leeds (Mr. Peake)—who, I recall with appreciation, received myself and other Members of my trade union very sympathetically on this matter—made one point which I think is of great importance, namely, that the greatest possible care should be taken to ensure that no loopholes are left open for bodies which are not fully and completely non-profit making to pass as non-profit making companies. I would emphasise that not only actors or managers, but even authors, should not be allowed more than their normal rate of royalties, or more than their normal salaries. It is not beyond the power of the Board of Customs and Excise to come to some reasonable assessment of what that should be. If that mattes is sufficiently emphasised, then the point made by the hon. Member for Huntingdon (Mr. Renton), when he asked for some definition of the phrase "partly educational," is answered automatically.
For it has always been a fact that, fortunately, the theatre attracts a number of enthusiasts, a number of people who are anxious to do the best they can in the theatre, people who would be ready to work, and work well, regardless of profit. As I understand it, one of the purposes of this Resolution is to give encouragement to those people This is a means of doing it in such a way as to avoid the necessity of discriminating as between play and play, and more or less avoiding the necessity—unless the point is unduly pressed—of discriminating as between one society and another. In other words, it avoids all the dangers existing in the law at the present moment in regard to discrimination; for discrimination means censorship. If the maximum emphasis is placed on the elimination of loopholes for profit-making, then the question of whether societies are "partly educational" or not will answer itself, because people who are willing to forgo profit will presumably be more concerned with the cultural than the commercial aspect of the theatre. In conclusion, I would thank the Chancellor of the Exchequer for the inclusion of this valuable Resolution.
My hon. Friend the Member for Eton and Slough (Mr. Benn Levy) has lightened my burden considerably. What he has said helps to throw light on this matter and does, I think, answer the questions that have been put. As the right hon. Gentleman the Member for North Leeds (Mr. Peake) said, this Resolution was introduced, I think in these exact terms, in the Budget of April, 1945, but owing to the approaching General Election it was dropped when the shorter Budget was introduced. There was also some talk of introducing it in the Budget last October but then it was feat that, as that Budget was long enough anyhow, the matter might remain where it was until this April. We now have the Resolution in front of the House. The question whether a society is partly educational or not is a question of fact, and each society must be judged on its merits in that regard. My hon. Friend the Member for Thornbury (Mr. Alpass) asked whether youth organisations would be included. The answer is that some of them undoubtedly would be and some of them would not. It would be a question of fact in each individual case.
I was referring more particularly to the small organisations which are administered by the county educational committees.
I think it more than likely that they would be covered, but it would be difficult for me now to say that they definitely would be without going into the circumstances of those organisations and seeing what they were. There will be very close control of the powers laid down in this Resolution. Customs and Excise, who will deal with this matter, will watch societies extremely carefully and will see, as far as they can--and I think they can be relied upon to do their duty in this matter—that this exemption is not abused. There are, very properly, in the commercial world quite a number of people watching this matter with a jealous eye, because they feel that this type of performance may do harm to, for example, the commercial theatre. Therefore, the fact that many people will be watching this, in addition to the Customs and Excise, should mean that very little abuse will take place or pass unchallenged. I have been asked whether the exemption would be given automatically, and whether there would be a review of each case from time to time. The answer is, of course there will be reviews from time to time. This matter will be watched in all its aspects. With that assurance, and realising that all parties expected to agree to this exemption a year ago, I hope the House will now pass it.
The hon. Gentleman has not answered the question whether this Resolution is likely to make the formation of new societies possible.
I thought the hon. Gentleman the Member for Eton and Slough had answered the Noble Lord. It is our hope that this new provision will not hamper the growth of societies or the formation of new ones. I see no reason why it should, now that all societies will know exactly where they are. Before, every time they wanted to give a performance, they had to go to the Customs and Excise to ascertain in advance whether they would get exemption or not. Now the society, whatever its size, will know in advance exactly where it is in this matter. I think that answers the Noble Lord.
Could the Financial Secretary give the House an assurance that political education is not education as envisaged in this Resolution?
It is not for me to say whether political talks and lectures are educational or not. As I said earlier, it is a question of fact. A society is formed; the Customs and Excise look at its constitution, and if it has articles, or memorandum of association Customs and Excise will no doubt look at them too, and, I take it, will also look at the balance sheets as the years go by. If a society happens to be a political society and claims that it is also educational and non-profit making, it is not for me to say what the Customs and Excise will decide under the law. If the hon. Gentleman, however, would like me to hazard an opinion, I would say the Customs and Excise would probably indicate that such a society was not educational in the strict sense of the word.
PASSENGER AIRCRAFT LICENCES (EXCISE)
Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
7.0 p.m
Does this Resolution mean that while travelling by air one would be "out of bounds" and able to get cheap drink, as one does on a ship? I hope we will take every possible step to make our flying attractive, but I think it would be a rather poor idea if, at a certain moment after leaving the earth, we could have a whisky free of duty. I hope that is not the intention of the Government.
I fear the brevity of this Resolution may conceal from some hon. Members the fact that there are a number of very dangerous aspects in this matter, not only as regards the question of liquor being sold in aeroplanes, but from the point of view of the general attitude the Government will take upon licensing questions of all kinds. I agree that this provision, promised by the Chancellor in his Budget speech, does carry out a definite recommendation of the Royal Commission on Licensing of 1929-1931. I recall that that Royal Commission was set up by a Labour Government which definitely promised, in its General Election programme, that it would set up such a commission to examine the whole question of licensing. The report then given was a very full report and covered every aspect of the question. Since then successive Governments—and I shall be glad to be corrected on this if I am wrong—have taken this line: if we are to tackle the question of the extension of licences in certain places we ought not to proceed piecemeal, but deal with the problem as a whole. For that reason I am rather sorry that the Chancellor, in dealing with the matter—which I agree is not, intrinsically, very highly dangerous —has opened the door for a consideration of licensing in a good many other ways.
The general provision of transport in this country has become associated increasingly with licensing. For example, there is the case of shipping transport and also that of the restaurant trains. Nevertheless, when it came to a question of licensing transport vehicles on the road the Royal Commission drew the line and said, "No." There were too many dangers associated with it. I notice also, that when the Royal Commission, which agrees with the provisions the Chancellor puts forward, came to the question of licensing aeroplanes, it did point out the danger of insobriety that might be involved, and suggested that, although the experiment might be tried out, if things did not turn out quite as expected, the provision ought to be withdrawn.
The Royal Commission also made one or two other suggestions and I am not sure that the Chancellor has provided for them. For example, the suggestion was made that in aeroplanes the pilot officer, as is the case with most drivers of motor buses, should keep free of alcoholic beverages during the time of duty and for a period shortly before duty. It was pointed out when road transport was dealt with that the rule of abstinence was laid down by most of the transport companies for their drivers; and it was suggested by the Royal Commission that the driver of a plane on which a licence existed, might well be required by his employers to follow that rule. The provision, of course, is to be applied to the State-run aeroplane services, and the Chancellor referred with some pride in his Budget speech to the fact that this was the way a public service was able to deal with things. I want to know whether public services in this matter really will be as good as the private transport services on the roads, and will lay down as a rule that alcohol should not be touched by those engaged in running the planes.
I know it is possible for alcohol to be obtained by a pilot while on service in running one of the larger planes. I observed, for example, on one of the European transport planes, that during the flight of the plane the pilot left his locked-in compartment, and came through to the place where the passengers were. Of course on the plane in which I travelled there was, naturally, no drink to be obtained, and I am not able to say what would happen in one in which drink was supplied, but if it had been supplied in this aircraft it would have been possible for the pilot to indulge in alcoholic beverages which were provided for the use of the passengers. I hope that the Government will look again pretty carefully at these provisos which were suggested in the Royal Commission's Report, and will see to it that drink is kept carefully away from pilots on duty.
I observe that some hon. Members opposite are treating this matter flippantly, as though it did not matter. Its importance should be remembered, especially where the sight of the pilot is concerned, his power to concentrate his vision, especially at times of landing, and to observe the point which he is approaching at the time of landing. It was shown beyond all shadow of doubt, in the medical evidence given to the Royal Commission, that vision is much interfered with when alcohol has been taken. Beyond all shadow of doubt, in modern transport planes the pilot and the alcohol should be kept absolutely apart. I am speaking very seriously because I know that a great question of public safety is involved in this.
The Royal Commission's Report did suggest that the licence duty should have some relationship to the privilege that was being granted. I do not know whether the Chancellor considers that £1 licence duty per annum is adequate from an aeroplane running, say, 24 or 30 passengers, to whom intoxicating liquors are being supplied. I do not know whether £1 is in proportion to what the Royal Commission suggested. I hope he will look at that matter again. It is certain that I should not be in Order in moving any increase in that duty, but with this point in mind, I hope the Government will again very carefully reconsider this suggestion. They may be opening the door to a much wider question. If they are willing to open that door, I hope they will come to us with a properly considered licensing Bill to settle the problem.
I was a passenger in 1909 in my own father's aircraft. It was a perilous venture. He had no intention of taking his hand off the controls to effect the sale of alcohol at that time, but I should like to know if the intention of this provision is that the pilot shall do so, or whether there is some drafting mistake, and that it should be fare-paying passenger in both cases. It seems to me most improbable that anybody would be able to effect a sale up in the air in a passenger aircraft, unless it happened to be a farepaying passenger, and that seems to be a point worth clearing up.
I can assure the hon. Member for West Ealing (Mr. J. Hudson) that no Member on this side of the House would regard the prospect of flying behind an intoxicated pilot as being a matter for flippancy. We should regard the prospect with the gloomiest of apprehensions. But in order to relieve his apprehensions I would suggest to the House that this Resolution has remarkably little to do with that remote and gloomy idea. As I understand it, this is a revenue raising proposal, but I do feel that it is one for which we should be given some explanation. In the course of his Budget speech the right hon. Gentleman referred in one sentence to this provision in these words: It will also provide, for the first time—and this will be good news for travellers—for the issue of Excise licences for the sale of liquor and tobacco in aircraft? That shows what a socialised service can do."—[OFFICIAL REPORT, 9th April, 1946; Vol. 421, c. 1825.] I do not wholly understand why this should be a matter of congratulation to travellers, inasmuch as alcohol has been served in passenger aircraft for many years, and the only variation effected by this Resolution is the imposition of a small tax upon it. It argues a somewhat fresh and youthful optimism on the part of the right hon. Gentleman to feel that any section of the community will regard the levying of an additional tax as good news. I believe that that illusion accounts for a certain part of his Budget.
Be that as it may, I should like some explanation why it has been thought necessary at this stage to impose this small and irritating tax, calculated at the rate of £1 per annum per aircraft. Having regard to the measures the Government are taking in another Measure, to which I am not permitted to refer, there will undoubtedly be very few aircraft indeed in this country and, therefore, the yield will be extremely small. I would ask the right hon. Gentleman why it is thought worth while to impose a tax whose yield will be negligible, but which will involve some cost of collection and a certain amount of administrative difficulty and friction. These small taxes are very rarely worth the cost or trouble of collection. They are rarely worth even the paper used for printing them in a Budget Resolution. I do feel the House is entitled to know why this is being done.
There are possibilities of considerable complication. Is it intended to levy this duty only in respect of aircraft flying on internal routes? Or is it to be done on aircraft operating from this country abroad? Is it to affect foreign aircraft which call in this country? It is, indeed, a stimulating prospect to envisage an American aircraft, forced down by bad weather at, say, Prestwick, being met upon the airfield by a representative of the right hon. Gentleman with a demand for £1. Is it intended that this tax shall be levied on all aircraft of British registry, even those which may have no home base in this country? Will it be levied on aircraft on, say, the Indian and Australian run, or on all aircraft whether deliberately or fortuitously landing in this country? The complexities are quite considerable, and it is most unfortunate in these circumstances that the Law Officers of the Crown, after their period of Trappist silence last night, are not here to advise the House on these difficulties. I think we are entitled to an explanation why, with all the administrative difficulties, the Chancellor thought it really worth while to grub for the air passengers' farthings.
7.15 p.m.
It is with my customary reluctance that I enter into discussion. I followed, with the House and the country, the speech of the Chancellor. This was the first of his Excise proposals. I am quoting from HANSARD of that date. He said: First, as to Customs and Excise.… I remember that even on these dark back Benches, we hesitated, held our breath, to hear what the first of these proposals was to be, and what was the great mystery the veil of which he was about to rend in twain. The first was this good news for travellers that he is to provide for the first time—and this Government gets things done—the issue of Excise licences for the sale of liquor and tobacco in aircraft. Then, the right hon. Gentleman knowing the depression which had settled upon the back benches of the Tory Party, added encouragingly: That shows what a Socialised service can do.''—[OFFICIAL REPORT, 9th April, 1946; Vol. 421, c. 1825.] So we have this really preposterous proposal before us this evening. What is the proposal? The proposal is to charge £1 for the right to sell intoxicating liquor and tobacco in an aircraft for as often as an aircraft flies in the air, 365 days if it can, for 24 hours every one of those days. It would not be for me as a Scotsman to protest at any generosities of the Chancellor, but he must be hard up for revenue—he will be—if he is not only scraping in the bowels of the earth, and on the surface of this planet, but is also now up in the air after the elusive paper pound in order to supply the revenue with which he will stand in so sore need before his race is run.
The possibilities of the proposal must have been envisaged by you, Sir, as by all other hon. Members of the House. I am an enterprising private enterpriser. I come to the Chancellor and draw his attention, not too markedly, to the somewhat restrictive character of our liquor laws. If I am the proprietor of an hotel or the keeper of an inn or public house, there are severe restrictions on the times at which I may sell these potent fluids which give so much encouragement to the children of men. But no. Under the new proposal the Chancellor proposes to license the Empyrean—the whole air. At any time, day or night, for there may be aerial bottle parties to Hugh Dalton, here, there and everywhere—perhaps drinking Highland dew above the mountains themselves. This is not what Parliament envisaged. This proposal will affect tremendously the support which, under false pretences, the Labour Party has received from the temperance and teetotal parties, and will reveal to the world at large the extreme difficulties to which the Chancellor is pushed to secure revenue. These proposals are not measured by space; aerial bottle parties will now be permitted by the right hon. Gentleman's majestic global proposals. This is among the most romantic of suggestions in what the public have admitted to be a dull, pedestrian and commonplace Budget. The Chancellor, in the night watches, felt, when he was taking his glass of milk, that he must give the public something which would be full of guts. And now we have this preposterous proposal.
But there is another aspect to it. If my hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) had not mentioned a certain word, I should not have interrupted, because it is one of those words which should not be mentioned in this House. My hon. Friend mentioned the word and place of Prestwick, and indicated that some returning Columbus might land there and be demanded the sum of £1 in dispensation of what had taken place while passing over the Scottish coast. It may be that the plane was really intended for Heathrow, but was unable to land because of fog. Possibly it had spent two and a half hours making its way to Prestwick. The necessities of the passengers would have to be met by the issue of sustaining liquor, and so Prestwick comes into this Debate. I want to point out that in Scotland we are not allowed to drink in licensed premises on Sunday, but by this technical arrangement, it will be possible for the bibulous, the intemperate, the Sabbath breakers and others to enter one of the Chancellor's aircraft, the proprietor having paid £1, and drink to their heart's content on Sunday, Monday or any other day in the week to the marvellous service which has been offered. I am glad that this proposal is being treated seriously. It challenges the whole canons of taxation, in that it taxes us in a new sphere. There is a large section of the population of this country who do not favour an undue and improper consumption of liquor, and it will be on record that it was the Labour Party in power which faced the future by enlarging the opportunities for consuming intoxicating liquor.
I think it is indeed fortunate that there is no intention of applying this tax to flights of fancy. I am not a member of that romantic unworldly race, the Scots, and I should like to come down to practical considerations. What is the use of transferring £1 from the airborne pocket of the Chancellor of the Exchequer—because it is going to belong to him—to the chair-borne divisions which look after customs and excise? This proposal has been introduced as a wonderful glittering gift by the Chancellor, but in fact it transfers something which will in any case belong to him to another pocket, and is a sheer waste of public time. I suggest that the hollow background to this gift is typical of many which we have received from him. He should drop it, and not take to transferring something which is of little value from one pocket to another.
I think there has been a great deal of unnecessary discussion tonight, mostly, if I may say so, due to a misunderstanding on the purpose of this Resolution. It neither seeks to teach pilots to drink, nor does it provide for a pilot to pull the joy stick with one hand and open a bottle of beer for the passengers with the other. Nothing of that kind is envisaged or intended. Nor is it designed purely as a revenue raising project. The amount of revenue will be negligible, but the Resolution has been put before the House because the Minister of Civil Aviation feels that aircraft ought to be put on the same level as passenger trains and ships, and be allowed, when flying within the confines of Great Britain and three miles out to sea, to have licences issued enabling foreign or British aircraft to sell intoxicating liquor or tobacco. It is true that one finds occasionally that aircraft sell tobacco and intoxicating liquor before they are outside the three-mile limit, but that is illegal and should not take place. This proposal for the first time makes it legal for an aircraft, if it is so minded, to carry and sell intoxicating liquor and tobacco.
Will the Financial Secretary say how he ascertains what is in the mind of an aircraft?
I apologise. Immediately I said that I realised that an aircraft had no mind of its own.
The Financial Secretary referred to the sale of tobacco. As I read it, the Resolution refers only to intoxicating liquor.
It will be permissible to sell tobacco as well. It is not necessary to mention tobacco specifically in this Resolution. The proposals in this Resolution put aircraft on the same level as railway restaurant cars and ships. Railway restaurant cars are a more correct parallel, and that is why £1 is to be charged rather than £10 which is the present licence duty charged for passenger vessels. We consider that the time has arrived when aircraft should be given these facilities if owners wish to have them. In these days, air travel has become so normal a mode of travel that this morning, for example, I had breakfast in Geneva, where I was looking across the lakes and mountains, and lunch in London. That sort of thing is now being done day by day. Obviously, this provision is something which aircraft companies find of use, and that being so, the Minister of Civil Aviation feels that the time has come to introduce it, and that is why this Resolution is put before the House.
7.30 p.m.
Was it not definitely recommended in the Royal Commission's Report that a rule should be made that the pilots of these planes should not be supplied with liquor, and that they should give an undertaking that they would not take liquor while on duty? Is it not desirable when a public corporation is concerned that there should be some such provision?
This is not the place to make a provision of that kind. All companies and lines lay down regulations and they lay down fairly severe regulations concerning the conduct of their pilots. If my hon. Friend has any observations to make about that, obviously this is not the time or place to make them. We are dealing here with the issuing of licences and not with the conduct of pilots, and whether they should or should not be required by those who employ them never to touch intoxicating liquors, during certain times of the day.
There are two questions to which I should like to have answers. Why is it not necessary to have a Resolution about Excise Duty for tobacco? The Chancellor of the Exchequer, in his Budget speech, talked about introducing Excise licences for the sale of liquor and tobacco. My second question is this: The Financial Secretary has said that there was no desire to raise revenue by this Excise duty. If that be so, why should even a charge of £1 be levied; why not issue licences without a charge?
I think that the Financial Secretary misrepresented me and, therefore, failed to answer my question. The point I was making was not that the pilot had to take his hands off the controls in order to sell liquor, but that it was a passenger plane and not a fare paying paying passenger plane. My question was whether this Resolution will apply only to fare paying passenger planes or to all passenger planes, including private planes.
The obvious test is whether the stuff is sold. If anyone owns a private plane and takes his friends in it he could, if he wished, put into the plane a case of beer. No one could prevent him from doing so or demand that he should take out a licence for it when he took the aircraft off the ground. In reply to the hon. Member for Twickenham (Mr Keeling), the answer is that already people may take out a licence to sell tobacco, and, therefore, all we are concerned with here is the licensing, for the first time—the legal licensing—of aircraft to carry intoxicants.
rose
If hon. Members wait until after the hon. Gentleman has made his statement and then get up to ask questions, they must not expect a reply.
Surely, Mr. Speaker, it sometimes happens that we hope during the course of a speech to get answers to particular questions, and, when they are not forthcoming, we rise afterwards to put a specific question with the purpose of getting a reply. Surely that is not out of Order.
It is quite in Order for the hon. Gentleman to reply, but the leave of the House has to be granted.
PURCHASE TAX (EXEMPTIONS AND REDUCTIONS OF RATES)
Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
May I ask, Mr. Speaker, whether it is your intention to select any of the Amendments that are on the Order Paper?
I think it is a question of calling all or none, and that it would be better if they were taken on the Committee stage of the Finance Bill. They could have no effect now, because there can be no question of reduction in taxation coming into this now.
On a point of Order, Mr. Speaker. I gather that your Ruling is not on the ordinary question of selection between one Amendment and another, but a decision that on the Report stage of the Budget Resolutions, although we shall, no doubt, have many Amendments on the Purchase Tax, no Amendments are to he selected.
On the Budget Resolutions this is not really necessary. This is not a question of raising money or reducing taxation, but of giving a general picture reflecting the Budget proposals.
It provides a double opportunity, and it may be for the convenience of the House to discuss these matters now. It might mean that if some of the Amendments were selected now they could be discussed today, and that would leave further opportunities when we came to the Committee stage of the Finance Bill to discuss others. I noticed, Mr. Speaker, that you called an Amendment in the name of the hon. Member for Westhoughton (Mr. Rhys Davies) on a previous Resolution, after "music," insert "Eisteddfod." It would appear that that would also fall within the Ruling which you have given. This is not a matter of great importance, or one which affects taxation, but it would give an opportunity for discussion, at this stage, of a matter which otherwise would go in with a number of others. If particular Amendments can only be discussed on the Committee stage of the Finance Bill, it is not until we have the Finance Bill that we can see the necessity for them.
I should have hesitated very much about moving any of these Amendments on the Report stage and getting a negative answer. If I had been Chairman of Ways and Means I should not have dreamt of selecting it. I should have thought it far better to act on the Committee stage of the Finance Bill because it gives the Chancellor of the Exchequer two or three weeks to consider the matter, by having it brought to his notice by seeing it on the Order Paper.
I am much obliged for what you have said, Mr. Speaker. I hope that the Chairman of Ways and Means will read this in HANSARD. It would appear that when we are discussing this matter on the Committee stage of the Finance Bill all these Amendments can then be discussed.
I have merely said what I would have done if I had been Chairman of Ways and Means. The Chairman of Ways and Means must be free to make his own selections uninfluenced.
My Amendment on the Paper is to increase taxation—unpopular and unique though such a proposal is. Shall I have an opportunity, on the Committee stage of the Finance Bill, to raise it, if it is not called now?
If it is to increase taxation, I should not call it because it would be out of Order.
Would it be in Order to put one or two arguments to the Chancellor of the Exchequer on these Amendments which have been ruled out of Order, with a view to the Chancellor giving them consideration?
I have not said that they are out of Order. I have merely said that I have not selected them. It is open to hon. Members to raise any points they like and they will not be handicapped, by having had an adverse decision, in subsequent proceedings.
There is perhaps a little more in this, than first meets the eye. For example, I had an Amendment on the Order Paper which was not called, and I should have liked some indication from the Chancellor as to whether he would be prepared favourably to consider the suggestions contained in it in the Finance Bill. The value of a favourable indication now would be that those who are responsible for the production of the articles concerned would not lose even three weeks in placing orders for the raw materials to provide for housing, which, after all, is one of the most important matters with which this House and this Government are concerned at the present time. We have already heard from the Minister of Works how the housing programme is being delayed by the lack of household equipment and fitments, which are not coming forward in sufficient quantities and at the right time.
I was hoping that we might get from the Chancellor an indication that he would include in the exemption from tax suction cleaners, which I should have thought were absolutely essential for housewives in keeping their houses clean, and that he would also have exempted washing machines. I have often heard women say that those who deal with these things at the Treasury obviously know nothing of the difficulties of the housewife, otherwise they would deal differently with the problems with which they are faced now. Women often have no facilities for washing at home and they tell me that they have to send their soiled linen, at great expense, to the laundry and have to wait six, eight or ten weeks before it is sent back. If they had the facilities in the way of washing machines they could do it much better and more quickly at home. In addition to washing machines, irons should be exempted too to enable the women to finish off the job. Last autumn when I mentioned the need for exemption from Purchase Tax of kettles the Chancellor was good enough to promise that he would favourably consider the matter in this Budget. He has done so, but he has left out other things equally important and necessary for the convenience of the housewives. They have enough difficulties to face and we ought to do all we can to help them. I hope I shall get an indication from the Chancellor that he is prepared to make provision in the Finance Bill for what I ask.
There is one other point in connection with Resolution 7 which is really of some importance, and to which the Chancellor made no direct reference in his Budget speech. That is the problem of giving relief to the retailer for the tax which he has paid on purchasing goods which he may have had in stock at the time when the tax was reduced or cancelled. One of the difficulties which arise from this is that, although at the present time there is a shortage of some of these things, it still remains a fact that distribution of such things as are available is very unequal. In some parts of the country one can get things with comparative ease, but 50 or 60 miles away they are practically unobtainable. The result is that customers may refuse to purchase the goods that may be in short supply in one area, and will make arrangements to go and purchase them in another, where the supplies for the time being are more plentiful. This matter was discussed during the Debate on the Finance Bill last year, and I understand, rightly or wrongly, that discussions proceeded between the producer and the retailer and the Treasury officials to see if this difficulty could be overcome. I realise that this is not an easy thing to dispose of, and all I am asking is that the Chancellor will look at it and will give it further consideration between now and the passing of the Finance Bill. If I get that promise and also a promise in regard to the inclusion of further articles in the tax exemption I shall be satisfied.
7.45 p.m.
I should like to refer to Purchase Tax and exemptions in general without specifically mentioning any article. I do so on the premise that we on this side of the House represent the working classes, despite the superstructure imposed on us, by the Eton and Harrow backgrounds of some in our midst. Appreciating as I do the fact that Purchase Tax is a restrictive tax in times of short supply, I would point out that it bears most harshly on the working class.
Harder than the Income Tax?
I believe a case might be made out to show that that is so, but I would be out of Order if I indulged in any arguments regarding Income Tax. I repeat, Purchase Tax is a restrictive tax on short supplies, and it is appreciated that it is applied for that purpose. However, it is a fact that in the main it does not affect the wealthy because they have the wherewithal to purchase whatever goods they like; nor does it affect the middle classes who are more or less in the same category. But I do submit that it affects the working classes. They have not the money available with which to buy articles, on which the Purchase Tax is still levied. I should like to adduce two points which I presented on the Finance Bill last November on this question. There are two main elements. First there is the Serviceman returning to civilian life with an all too small war gratuity. Sometimes, after six years of service, his total emoluments are £85, and he finds it impossible to set up a home on that sum with the Purchase Tax on household articles. Secondly, there is the question of reconstruction in every household as well as the reconstruction throughout the country. Every housewife after six years of war, of impoverishment and of trials has a right to buy household articles free of Purchase Tax. These are the two elements concerned, and, accordingly, I again plead with the Chancellor to con- sider these things favourably and exempt the lower range articles from Purchase Tax, thus lightening the burden on the working classes with which we on this side are concerned.
I should like to say a few words but I say them with a certain amount of embarrassment. I am aware that the Chancellor is in the very unpleasant position in having to say "I cannot" or "I shall not" to many suggestions. I am certain he does not like doing it, because his imposing exterior is matched by an even more enormous heart. I am certain he does not like always having to say "I will not" or "I cannot" Nevertheless, I do ask him to consider one point very seriously. I ask him to help one of the hardest hit sections of the community—hoteliers and the boarding house keepers in the country. These people in the so-called ex-defence areas suffered particularly, especially in regard to linen, towels and blankets, and they are in no position to buy at the present ruling prices. They have suffered badly during the war; they have made no profit; indeed, they have suffered loss over a number of years, and they have not the money now to buy in the open market. Those who were evacuated lost sheets and blankets, either through looting or theft, which were prevalent in my Division, the Isle of Thanet. Soldiers were there in large numbers, and it was impossible to take adequate precautions to see that property was safeguarded.
People were evacuated at a moment's notice, especially at the time of Dunkirk, and they left things in their homes as they were. When they came back they found that articles had gone. Where people did not evacuate, they had others billeted on them, and sheets were worn out. We have been told by the President of the Board of Trade that in the majority of cases it is impossible to issue priority dockets. If that had been possible the situation would have been met. For instance, sheets which can be obtained on priority dockets can be bought at an extremely reasonable price. But in the open market there is an enormous differentiation. I would remind the Chancellor that we in the coastal areas have a very important job to do. We are trying to provide holidays for the people of Britain, and we are in a difficult position. Often, hotels were bombed, or ruined by troops, and it would help us enormously if we could get some of the requisites we need to help us in building up our hotels and boarding houses for the holiday trade. I hope the Chancellor will grant this concession, and embody it in the Finance Bill when it comes before the House.
With regard to the Purchase Tax generally, I am quite prepared, and, indeed, anxious, to collect from various parts of the House Members' suggestions as to what are the most urgent claims, either for the abolition of the tax altogether or a reduction of the rates. The Resolution which is before us, however, is in itself a reasonable advance—Members may think it does not go far or fast enough—towards the alleviation of the burden of Purchase Tax, partly by a complete remission of the tax on a wide range of articles, including household requisites and electric kettles in particular, on which I was pressed in my previous Budget by the hon. Member for Stockport (Sir A. Gridley). This Resolution provides for the sweeping away altogether of Purchase Tax over a wide range of articles of considerable importance to the housewife and to others, and for a reduction of the rate of tax on a number of other articles. It provides for a series of concessions which will cost, in a full year, £15¼ million, and £12 million this year. That money will be added to the purchasing power of the community.
I must be cautious on this matter. If I were to give way to the pleas which have been put forward so persuasively from all sections of the House, I should run a grave inflationary risk—and I am sure the House and the country would not wish me to do that. The next six months will be a testing time. If, during that time, we can get the upsurge I hope for—and for which there is a great deal of evidence—in the production of goods for the home market and for export, then things will look more hopeful in the Autumn and we may be able to contemplate that by that time a new outflow of goods will be available to meet increased expenditure on social services, postwar credits refunds and family allowances. In the next Budget I may be able, quite safely, without endangering the economic fabric of the country through inflation, to go considerably further than it would be wise to go now.
At this stage, the total additional relief I can give in regard to Purchase Tax must not be excessive. It must be strictly limited in terms of prudence. But I want to make it quite clear that I will, on the Committee stage of the Finance Bill, be prepared to make further concessions. They must not, however, add up to too large an amount. My mind is not yet finally fixed as to what I can best concede upon, and there will be opportunities, on the Committee stage of that Bill, for arguments to be deployed in favour of this or that concession, to which I will listen attentively. There are one or two directions in which I am inclined to hope that I can do a little, but the total must be limited.
When will that be?
On the Committee stage of the Finance Bill. If I may say so, I think Mr. Speaker's advice not to subject particular Amendments, at this stage, to debate, division, and perhaps defeat, was wise, because that would tend to rule them out. For instance, I make no special commitment with regard to electric irons, but they stand rather high in the list of further concessions, following on the concession already made in regard to electric kettles. If my hon. Friend the Member for North Bradford (Mrs. Nichol), who had an Amendment down today dealing with electric irons, had it rejected now, pending consideration of the whole group of proposals, that would have embarrassed me if I had felt that I was able, on the Committee stage of the Finance Bill, to agree to the concession. Therefore, I think that it is much better that divisions on particular items should not be forced today, and that I should have a little time to think further and to receive representations, which Members may care to make, in regard to items in respect of which they think concessions might be made. I promise to do what I think is reasonably safe to do, and not more.
With regard to retailers, I think they are very apt to exaggerate their own disabilities and difficulties. If the Purchase Tax is reduced or remitted, and a retailer has already paid tax on the stock he holds, he is under no obligation to reduce his price on that stock. The Board of Trade's price controls, which I know something about, provide that if the tax be remitted and the controlled price of the non-tax paid stock is correspondingly reduced, the price reduction, with the power of the law behind it, should not operate on stocks on which tax has been paid. I can assure retailers that there is no intention of treating them harshly or unreasonably in this matter. There is no doubt that retailers gain an advantage from a general tax reduction. If not, the only remedy for the retailers' grievance is never to reduce the tax, and if that is presented to them as an alternative, they do not jump at it. They gain much more on the swings than they can lose on the roundabouts, over a period of time. When a tax is reduced or remitted, trade increases and demand expands. I feel that the retailers are reasonably assured of fair treatment. I have made it abundantly clear that on tax-paid stock they are entitled to charge the same price as they would have charged if the tax had not been remitted or reduced. But I will look into the matter again and see whether there is any need to do anything further. I am inclined to think that there is no such need.
8.0 p.m.
I should like to make one general point about exemptions from the Purchase Tax. Almost all utility products are exempted from the Purchase Tax. As I mentioned in my Budget speech, the utility blanket has now taken its place in the list of utility goods, and is being exempted. Utility clothing, furniture, and goods marked "Utility" under the Board of Trade specifications, are exempted from the Purchase Tax. It was I who, when President of the Board of Trade, negotiated that with the late Sir Kingsley Wood when he was Chancellor of the Exchequer. Following our conversations, we agreed that, in order to encourage the utility lines of production and prevent the Purchase Tax from registering excessively on the cost of living index, into which these necessities of life entered very largely, utility productions should be, almost by definition, exempted from the Purchase Tax. I believe that is a thoroughly sound principle, and in so far as the Board of Trade produce further utility products, it will usually follow that they will not be subject to Purchase Tax.
My hon. Friend the Member for Stretford (Mr. Austin) raised the general issue of the Purchase Tax versus other kinds of tax. It would be out of Order for me to go too deeply into that question, but I will repeat in a sentence what I said in my speech at the end of the Budget Debates. I am absolutely sure—and I think I would get a majority in a vote at the end of any discussion in a local debating society composed of any group of thoughtful citizens—that much more importance is attached today to alleviating the burden of Income Tax. It is the Income Tax, much more than indirect taxation affecting the prices of goods many of which they do not want to buy, which concerns the people. This, of course, is opposed to the old-fashioned view, but I stand for the new outlook, and not for the old theories of generations ago.
The point I had in mind, with reference to the Purchase Tax, was the pathetic plight of a returning soldier who has a small gratuity, and who is not affected to any great degree by Income Tax, but who in very difficult circumstances is trying to set up a home on £40,£60 or £100.
With him I am most sympathetic, but it will be found that, particularly when these new proposals come into operation, practically all the things which such a person wants to buy are free of Purchase Tax. A mink coat is not, but why should the mink coat of the millionaire's mistress be free of Purchase Tax? There is a large range of articles which really are not necessary for any reasonable life. Why should we debar ourselves, on the ground of some Victorian doctrine, from collecting taxation upon articles that are far outside the purchasing power of the working class? Why should not those people pay? Why should it all be lumped on to the workers in the form of direct taxation, as theorists sometimes demand and wartime Governments, to a great extent, endeavoured to bring about? Income Tax is the most vexatious of all imposts, and I shall continue to endeavour to lighten its burden on all sections of the community, and to give a preference to lightening Income Tax rather than to lightening the indirect taxation on things that are not really necessary. I hope it will be appreciated that we are moving forward prudently, and yet noticeably, in the direction of alleviating the burden of the Purchase Tax, by way of removing it from an appreciable range of goods and reducing the rate over a further considerable range. Between now and the Committee stage of the Finance Bill I will give careful thought to the various suggestions that have been made and which will be made in the course of further Debates on particular commodities. I give a definite undertaking to make some further reductions in the Purchase Tax. I must keep it within bounds, and I will do my best to arrive at a fair and reasonable conclusion as to what articles stand next in the reasonable priority for remission.
With regard to direct taxation versus indirect taxation, is not the real point that indirect taxation is regressive in its incidence on the taxpayer, whereas direct taxation is not, and is the validity of that old argument refused now by the Chancellor?
A tax which falls only on luxuries cannot be regressive upon those who are unable to purchase luxuries. With regard to the Purchase Tax, if Purchase Tax is increasingly restricted to luxury articles which are not bought by the majority of the people, it cannot be regressive on the majority of the people. I hasten to add that I think the arguments about regressive and progressive taxation cannot be usefully applied to single taxes. They can be applied only to the tax system as a whole. If, in the tax system as a whole there is a progressive tax on income, then the progressive character of the tax system will assert itself through this taxation, and there will not be a system that is regressive upon the general body of taxpayers.
rose —
I cannot allow the hon. Gentleman to subject the Chancellor to a series of questions. The hon. Member must wait to catch my eye.
I think the House welcomes very much the Chancellor's assurance that when we reach the Committee stage of the Finance Bill he will examine, subject to the limitation of safeguarding the Exchequer and preventing inflationary rises, such items as may be suggested to him. I venture to prophesy that there will be more suggestions than he is able to accept, but I ask him, in directing his mind to these matters, to endeavour to establish some definite line of principle and not to yield to what I would call pressure groups. I have examined Parts I and II of the Table, and I am bound to say that I cannot quite see the principle on which the Chancellor is working. The hon. Member for Stretford (Mr. Austin) made a clear case for the furnishing of the home of the ex-Service man. If the Chancellor will accept that as a principle, I am sure he will have the agreement of the whole House. Already certain items are exempted from the Purchase Tax—utility mattresses, utility blankets, and what the Chancellor euphemistically calls pots and pans. When we come to knives and forks, what about them? I have read Part I, and I feel that while hollowware of iron and steel may be exempted, a steel knife may attract tax because it is not hollow ware.
Will the Chancellor endeavour to establish it as a principle that, in the case of young people who are furnishing a home, or people who are re-equipping their home after the war, he will do all he can to see that everything they. may reasonably need is entirely free of Purchase Tax?
I do not believe that that is the principle upon which this Table has been drawn up. I believe it has been drawn up with a view to preparing what appears to be a rather impressive list without it costing the Chancellor too much money. There are other matters of principle upon which the Chancellor could approach this matter. The first is that nothing in the nature of luxuries should be allowed to escape tax at a high rate, but that is not the principle which the Chancellor has adopted. If the House will examine Part II it will be seen that player piano records are to be relieved of some part of their tax, but by their very nature they are of use only with a player piano, which is one of the more expensive forms of instrument, not likely to be found in a working-class home. The Chancellor is not maintaining the principle of keeping tax at a high rate on luxuries.
Another principle, on which the right hon. Gentleman could have worked, is to exempt those articles in the greatest demand by working-class people with the lowest income. That is a principle which I would endorse if it were enunciated in clear terms, but the Chancellor has not done this. The exemption he has given applies not to things which are purchased by the working classes but, for example, to lawn mowers—
A good many working-class people have gardens.
I do not dispute that, but I am thinking of the very poorest section of the community whom the Chancellor does not appear to have considered. He has allowed his mind to wander on the subject of the millionaire's mistress in her mink coat, but has not thought of the poor woman with several children. He has not exempted the bucket and spade with which the children will play on the sands this summer. Why should not children's toys be exempted before garden rollers and lawn mowers? Why does the Chancellor draw up the list in this way? Surely, the children have had a bad enough time in this war to warrant the exemption of their toys before garden rollers or public clocks. I really do not understand this Schedule. For example, "clocks designed for use as public clocks" are to be exempt, but garden furniture, not being garden ornaments, is not to benefit from the tax reduction. What is a sundial? Is it a public clock, is it garden furniture, or is it a garden ornament? How is the Chancellor's mind working in these matters?
I am very glad that the right hon. Gentleman has said that he is prepared to examine these various suggestions as they are put to him, and I know he will honour the pledge. If we must have this —in my view—thoroughly undesirable Purchase Tax for a further period of years, we should not exempt articles as such. What we must do is to exempt groups of articles which affect certain sections of the community. The principle upon which I suggest that the Chancellor should work is that the first claim for exemption and abatement of tax must be for those articles which are required by the young man and his girl as they establish their new home. If the right hon. Gentleman were to proceed in this way he would be working on principles which commend themselves to the whole House. Finally, I would urge once again that he should do all he possibly can to make sure that children's toys are also free from tax up to a certain limit.
8.15 p.m.
I want to induce the Chancellor to be a little more explicit about his general attitude towards Purchase Tax. In his effort to be conciliatory this evening he has indicated, or hinted, that he dislikes the whole business, and that he looks forward to the day when, by the last of a series of concessions, Purchase Tax will he swept away altogether. In the next breath, in a sort of debating society manner, he is all in favour of modernity and of indirect taxation which is, in fact, one of the most antiquated forms of taxation in the world and, I should have thought, one of the most deleterious. When the right hon. Gentleman made his Budget speech he said he did not regard Purchase Tax as temporary but thought it had come to stay. He wanted it for two reasons; so far as I can see they are, first, in order to help to pay the bill for social betterment. I could tell him how to raise a good many more million pounds without recourse to the Purchase Tax.
How?
If the Chancellor is good I will tell him at the proper stage in the Bill. [HON. MEMBERS: "Tell us."] It would be entirely out of order for me to do that now. As his second reason the Chancellor added that he liked the tax because at present it "mops up "purchasing Power. I think the House is entitled to be told by the Chancellor whether he thinks this is in essence an objectionable tax, only to be justified by the circumstances, or whether, when he said it had come to stay, he meant that it is to become a permanent part of our fiscal system and part of the wonderful superstructure of indirect taxation to which he looks forward. I hope the right hon. Gentlemen will enlighten us on this point because I believe it to be important.
I should like to do what we have been encouraged slightly to do by the Chancellor, namely, to call attention to certain matters which we believe are important at this early stage, although not on the principle that the early bird catches the worm. I should like to draw attention particularly to the fact that if we look at the Table in Part II we find that the greedy are provided for with vacuum flasks, and the corpulent with garden rollers, and, in Part III, the lame are to be relieved by walking sticks and canes, wholly of wood." The bald are to be slightly insulted by some relief on hair waving and drying machines, and those who hope to live in peace and quiet will be horrified to see that player pianos and other musical instruments, and parts of musical instruments, are to be given some relief, but the deaf are to get no relief at all. As many of us know, one of the most awful tragedies is the person who is struggling with deafness. Deaf aids are very expensive things indeed. I feel sure that the deaf will not be forgotten for although they represent such a small proportion of the population they are a very tragic one.
I should like to take this my first opportunity of thanking the Chancellor for removing Purchase Tax from office machinery. At a very late hour I moved an Amendment on this question in a rather angry House, but I have since been supported in a most helpful way by hon. Members on the other side of the House and met by the Chancellor, and I am very glad gratefully to report the happy issue of all our labours. I had intended merely to express my thanks and nothing else, but the Chancellor has provoked me with his desire to decry Victorian financial principles. It seems to me that Mr. Gladstone in his preference for direct taxation rather than indirect taxation was doing something which the Chancellor is now reversing—in my opinion, quite wrongly so.
Mr. Gladstone, if I remember rightly, said that he regarded direct taxation and indirect taxation as two charming ladies to both of whom it was his duty to pay court.
The right hon. Gentleman's recollection is no doubt perfectly true, but he is doing rather the reverse of what Mr. Gladstone did. It is only to one charming lady that the right hon. Gentleman pays court, and it is on behalf of the other one that I am now pleading. The proposal to put and to keep Purchase Tax on certain articles is thoroughly damaging to the community, for a reason which ought to make itself commendable to hon. Members opposite. Direct taxation falls upon shoulders best capable of hearing it, whereas indirect taxation, in the expanding consumption for which we all hope, is bound to fall on those who are less well off and irrespective of their wealth.
I pleaded with the Chancellor for the removal of Purchase Tax on stationery. When an unemployed man writes a letter to apply for a job he is paying indirect taxation. The Chancellor of the Exchequer said he thought that a representative debating society would favour indirect taxation rather than direct taxation. He qualified that by saying that it would have to be an intelligent debating society. That being so, I do not agree with him. I think he would soon find that an intelligent debating society would take the view that indirect taxation fell upon the whole community irrespective of wealth, whereas direct taxation was properly rated to the shoulders of those best able to bear it. I seriously question the policy upon which the Chancellor is embarking Members opposite. It is contrary to their whole principles to prefer indirect taxation. Indirect taxation, it is true, is psychologically more acceptable than direct taxation. One thing that any debating society would immediately say is: "Yes, we give out 25s. 9d. and we get back if we want whisky."
This argument is very interesting, but I hope the hon. Member is proposing to link it up with the Resolution now under discussion.
It is in reference to the Purchase Tax and the Chancellor's proposal to make the tax permanent and more universal. That is the issue, and I think he is wrong. The Chancellor of the Exchequer brought forward the question of the debating society. He said that the average citizen would prefer indirect taxation to direct taxation. I say that psychologically he is wrong True, the taxpayer who gets goods in return for his money does not recognise that he is paying tax and therefore accepts it, and when he pays his Income Tax he realises that he is paying tax, and resents it.
The Chancellor of the Exchequer may have digressed in that direction, but I cannot allow the hon. Member to continue to follow that line of argument. I do not find in the Resolution a proposal to make the Purchase Tax permanent.
That being so, I will close with my opening remark, which is one of heartfelt thanks to the Chancellor of the Exchequer on behalf of myself and my hon. Friends who supported me in my plea.
We fully understand the Chancellor of the Exchequer's apprehensions with regard to inflationary trends and so on. On this occasion there is no suggestion that we want to do anything to endanger the main fabric of the structure. Whether we agree with the Chancellor that the Purchase Tax is a desirable form of taxation can be debated upon another occasion. One of the features associated with the Purchase Tax which always struck me is that the Chancellor of the Exchequer and the Financial Secretary to the Treasury become subject to a tremendous amount of pressure. The existence of pressure groups is something which we have to consider in determining whether or not this is a desirable form of taxation. I do not propose to pursue that part of the subject now, particularly as I see your eye is upon me, Mr. Deputy-Speaker. We are not at the moment discussing the permanence of this tax.
Nor would I enter into an expression of my views on the question of direct and indirect taxation. I could say quite a lot about it on another occasion. I was very glad to hear the Chancellor say one thing. He said he was hoping that the Income Tax burdens on all sections of the community would be lightened in due course. I welcome that very much indeed. It is the first time any sort of expression of that kind has come from the Chancellor of the Exchequer, and many of my friends will wish to thank him for it. We had got into our heads that he was adopting a somewhat partisan attitude in these matters, but we are relieved to hear that his intentions for the future are more broad minded.
The hon. and learned Member for Exeter (Mr. Maude) referred to one of the most important points mentioned today, and that is the case of the deaf. When we come to the Customs Duty rather than the Purchase Tax I shall have more to say about the deaf. At present there is a Customs Duty of about 20 per cent. on deaf aids, and I propose to move when the appropriate time comes in the Finance Bill to get that matter discussed, and I hope the Chancellor will be able to make a concession. Here we are dealing with Purchase Tax. There is only one class of battery which is at present subject to Purchase Tax—the low tension—which is frequently used for deaf aids, and I hope the Chancellor will be able to find some means of relieving these batteries. The technical difficulty is very great, but it has been overcome in some countries by using a special colour for these batteries. Against that is the consideration that it is not so easy to get batteries for deaf people if they are not part of the general supply of batteries for the country, and that may be a disadvantage, but I hope the Chancellor will waive any Purchase Tax or Customs Duty on those used by the deaf. We have done a tremendous lot for the blind in this country and I should be gratified if we could do something for the deaf. I thank the Chancellor for his suggestion that we may make proposals to him in the course of the next few weeks. We shall certainly take advantage of his offer, and, meanwhile, we shall be glad to see this Resolution passed.
INCOME TAX—MARRIED WOMEN'S EARNED INCOME
Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
We support this Resolution, but we only support it with enthusiasm on account of the special circumstances in which we now find ourselves. Any taxation proposal which under normal circumstances gives too much encouragement to married women to work so that they would be obliged to neglect their families is something we must watch very carefully, but we recognise that in present circumstances there is advantage to the community in accepting this Resolution.
8.30 p.m.
My right hon. Friend has said that we on these benches, as a party, do not oppose the Resolution, but I think there probably are individuals amongst us who take very great exception to the purport of it. In speaking against this Resolution, I do not want it to be thought that I am opposed to earned income allowances in general, still less to benefits to married women. What distresses me is the conjunction of that allowance with the class, and also the end to which this Resolution is directed. What does it do? It offers a financial inducement to married women to leave their homes and to spend long hours and, for many of them, dreary, spiritually unprofitable, nerve-racking hours in business establishments, and in factories engaged on mass production. Now production is important. We are all agreed about that. We are agreed about the vital need to encourage our export trade, we are agreed about the value of a growing quantity of consumption goods in staving off inflation. Nevertheless, I believe that hon. Members in all parts of the House ought to ask themselves in the coming months whether production is important enough to justify any financial device which operates against the perpetuation of home life and against the birthrate.
Perhaps the most serious long-term problem with which this country is confronted is the decline in the population. It is significant, but perhaps scarcely surprising, that there has been absolutely nothing in either of the first two Socialist Budgets to bring aid and comfort to the home and to facilitate the birth and maintenance of children. I hope to develop that point a little on the Second Reading of the Finance Bill; I should be out of Order in doing it now. To some extent there is a place for women in industry. I am far from arguing that every woman's place is in the home, but if we are to apply financial stimuli, surely the class to apply it to in the first instance is the unmarried women. It appears that the Chancellor of the Exchequer is not interested in unmarried women. What has he done? Instead of increasing the allowance to married women earning income and leaving unmarried women untouched, the Chancellor ought to have done just the opposite; he ought to have increased the allowance to married women when they are dependent upon their husbands' earnings, and widened the gap between earned and unearned income allowance for unmarried women. Recently the spinsters besieged the lobbies of the House—
They are still outside.
—asking for pensions. I do not think they should be denied all payments. Let them have their pension, but let them have it in the form of earned income allowance which will necessitate their taking employment to earn that income.
Would the Noble Lord like to go and tell them that?
I am quite prepared to. It is altogether incomprehensible to me that the Chancellor of the Exchequer should have begun his drive for production with married women, and have made no proposals at all for these pension-hunting maidens outside.
I strongly oppose this Resolution, and I would ask hon. Members on this side of the House to come into the Lobby tonight, but for the fact that I realise that many of my hon. Friends lay particular stress at the present time upon the nature of the industrial problem, of which they have intimate knowledge. Nevertheless, it is just this kind of legislation, which is remorselessly eating away the home, that we on this side of the House will have to oppose, and oppose resolutely, one day, and to my mind the sooner we do it the better. I hope we shall get a sympathetic reply from the Government tonight. The Financial Secretary is by nature a sympathetic man. The fact that he is married, and has children, ought to make him even more sympathetic. I urge the Government to say that this is a temporary provision and that the undesirable trend will be reversed next year when production is easier. Without that assurance, we on these Benches would, I feel, be justified, next year, in voting on a specific Amendment to the Finance Bill designed to achieve the object we have at heart.
I feel it is very necessary that this House should realise that unless married women are given this encouragement in industry, which so badly needs their help, we will not be able to rehabilitate industry and help forward the country in its struggle to achieve that home life which we so desire. Our women have been used to work in factories and fields through dire necessity. The wages of our menfolk over long periods have been such that when young folk marry, their livelihood is lowered to such an extent that, unless the women go to work, it has been almost impossible to give children the standard of living they require. It is academic to say that we should keep our women folk at home in order that they may bear their families. As an example, I would quote the boot and shoe industry. The bottleneck there has been caused because we have lost the services of our skilled women. This is holding up production and the same position arises in other industries. Because, through economic necessity, women were forced into the factories, when the war came, we had to recruit women who had left the industry. That had to he done so that they could continue with the skilled job which they knew.
Until we are able to draw on single women new to the industry, we are bound to ask married women to come back into industry Is it to be expected that we on this side of the House believe our women go to work because they desire to go to work? Of course not. Our women would be prepared to stay at home to look after their families in the same way as others more fortunately placed. When our women go into factories and work 45 or 48 hours a week, is it to be expected that they are able to perform all the duties housewifery demands? Of course not. Many a shilling goes out of the pockets of housewives in order to pay for those duties to be performed while they are at work. The relief which the Chancellor is giving is compensation for the expenses that our women folk have to face.
I rise to draw attention to the usual misprint which we anticipate in everything the Government bring forward. It is to be found in line 5 and I express the hope that the Government's hope for the year will not be irremediably vitiated by it.
That is a better point than usual from the other side of the House.
There is little occasion for me to deal at length with this short Debate. Except perhaps for the Noble Lord, there is, I think, universal agreement in the House that a provision of this kind, as a temporary measure, will be necessary, certainly for this year and possibly for a year or two to come. That at the present time married women should be given this extra inducement either to go back into or remain in industry is, I think, universally recognised. That is the reason why they have been put in this advantageous position compared with unmarried women or even with men. In the knowledge that it is possible every year to alter and change the taxes and rates of allowances, I hope that the House will give us this Resolution.
INCOME TAX—BENEFIT AND FAMILY ALLOWANCES
I beg to move, in line 1, after "tax," to insert: at the rates applicable to earned income. The purpose of this Amendment is to ensure that the taxation which has to be borne on receipts by men and women under the family allowances scheme and under the National Insurance scheme shall be taxed at the more favourable rate, and not at the more favourable rate to the Treasury. I put down a Question on this subject, and I received an answer from the Chancellor to the effect that he did not wish to anticipate his Budget statement. I listened carefully, and have looked through his Budget statement, to find out if it gave me an answer to that question. So far as I know there was no answer to it. If I have overlooked it, I hope that the Financial Secretary will stop me at this point and save me from taking up the time of the House. From his silence, I gather, it is intended that the rate shall be at the unearned income rate, and that I must continue to speak on this Amendment.
The difficulty that the Chancellor is up against, I imagine, is not very great in making this concession, because in the fiat place, in my estimate, over 99 per cent. of the people who will benefit under these two great schemes will be wage-earners of the very kind who, Members on both sides of the House would agree, should pay the lowest rate of tax on benefits of this kind. In the second place we must remember that these benefits which they will have provided, will have been out of their earnings—out of their contributions of 4s. 7d. a week, which will be paid to the State. Again we must bear in mind that the majority of these payments will no doubt bear some tax, even when the exemption rate is raised. Single men and women are likely to have a low exemption rate, even for many years to come, and if the Chancellor likes to calculate the figures at which tax will have to be paid on benefits of this kind, he will be surprised how many millions of people in this country will he involved by this Amendment.
8.45 p.m.
I would like to refer the Financial Secretary to column 1833 in the Chancellor's Budget speech, where he very clearly shows the linkage between the deductions which he is allowing everybody to make from their taxable incomes on account of their contributions on the one hand and the taxation of the payments which are going to be paid out under these schemes. His actual words are: It is a necessary counterpart of this proposal that, apart from lump sum payments, such as death and maternity benefits, … Incidentally I should say that maternity benefits were earned, if anything is earned. … all benefits, and not merely some, as now, should be assessed for Income Tax." —[OFFICIAL REPORT, 9th April, 1946; Vol.421, c. 1833.] Clearly, the taxation of these benefits is linked up with the remission of taxation on the contributions when they are made by the taxpayer. It is after all a form of tax which the contributor is already paying.
So far as I can see, there are only minor difficulties and I do not know what is holding the Chancellor from giving this concession. The only reason that I can see, and that I at once admit, is that some of these people may at some stage of their life be getting remission for their contributions against unearned income and, therefore, it may be argued that when they come to benefit they should pay also at unearned income rates. Surely, the numbers of such cases will be very small indeed? I should be very surprised if these people are not either attracted or induced, or in some other ways influenced, to go to work; in which case their benefits will be an addition to an earned and not an unearned income. It seems to me to be only fair that even their contributions when received should be taxed only at the lower rates and not at the higher rates.
I beg to second the Amendment.
I would like to support the observations made by the hon. Member for Bath (Mr. I. J. Pitman). I think this is a very difficult case for the Financial Secretary to answer. The case which the Financial Secretary will have to answer is that these increased incomes must be treated either as earned income or as unearned income. It must be one or the other. It may be the Treasury wish to treat them all as unearned income in that they do not arise as a result of gainful employment. In that case I think the Financial Secretary is going to be quite wrong. If cases are examined in detail it will be found that certain kinds of benefit are likely to arise. There will be benefits in respect of industrial injury. That is only to fill the gap between the earning of an income before injury and the resumption of gainful employment after injury. To treat the period when the poor man is sick and away from work as the period when his income is to be treated as unearned income is an extraordinary approach to the problem. Then there is the question of sickness benefit. The vast majority of the people of this country are earning their living. Payments made when they are away from work through sickness should be regarded as a contribution made by the State to ease the situation.
The hon. Member for Bath suggested that, of all benefits, maternity benefit is the one to be regarded as most properly earned. Surely, the idea of paying family allowances in respect of children is to enable the mothers to take care of the children and have more money to spend on them. On the other hand, we have to face the fact that certain allowances, such as the retirement allowance, are paid conditionally on not earning income. It may be that those allowances, with other private means, will bring a person liable and within the taxable limits of income. It is extraordinarily difficult to know what is the right way of dealing with this, but I think the Financial Secretary will be interpreting the will of the House if he treats all these modest payments, payable week by week, in the main, through the Ministry of National Insurance, as earned income, whether, in fact, they are earned income or not.
I think we can dispose of this quite simply. If I understand the object of the mover of the Amendment, it is to secure that benefits under the National Insurance Bill and Family Allowances Act should rank as earned income when computing, in the hon. Member's own words, tax at the rates applicable to earned income. Quite frankly, we cannot accept this Amendment, for the one reason that, technically, these words would be unacceptable, because there are no rates of Income Tax applicable to earned income. The earned income relief is given by way of a percentage reduction on the total amount of a man's income, and not by way of a rate or rates of relief applicable to earned income.
Actually, however, this Amendment deals with reliefs, and the Resolution with which we are dealing refers to a charge which it is desired to impose, and, therefore, we are talking about two very different things, and this is not the place to consider a matter of this kind. The Finance Bill, which will be introduced in due course, will be the proper vehicle for the points put forward by the two hon. Members opposite to be ventilated. I may, perhaps, say, for their information and of the House, that the Clause which we propose to put into the Finance Bill will provide for the grant, in respect of benefits and family allowances, of the earned income relief of one-tenth, which is the present rate, and which, of course. after October, will be adjusted to one-eighth. I take it that that will meet the points raised by the hon. Gentlemen opposite.
I should like to thank the Financial Secretary for that. I am sorry if I seem not to have made myself clear. I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
The meaning of the next Amendment is not very clear to me, but I will call on the hon. Member for Bath (Mr. Pitman) to move it, and perhaps he will explain it to me.
I beg to move, in line 4, at the end, to add: Provided that where a widowed mother of children, being qualified as a claimant, marries someone other than the father or putative father of such children no income tax shall be charged. This Amendment is designed particularly to benefit widows and orphans, a purpose which this House has Scriptural and quite normal reasons to wish to achieve. The point at issue is this. Let us take a war widow, who is left a widow as the result of her husband being killed in this war, and who has, shall we say, four or five children. She ought, and I think the House will agree, to re-marry, and, in seeking a new husband, the children themselves are a potential handicap. It is, however, a handicap plus, because, not only does she have to find a man to marry her who will take on a e children, but she has to find a man who will take on the children plus the Income Tax liability on the family allowances which she personally receives, as of right, under the proposals which this House in its wisdom has put forward in the Family Allowances scheme, so that her situation as a prospective bride is very much worse than I think this House would wish it to be.
It is perfectly true that the new husband's contributions to the Family Allowances scheme have been, in the past, tax free to him, but so they would be were he not to marry and so they will be for everybody else in the realm. For that reason I would think it was not a fair reply to my proposal to say that the new husband will be getting Income Tax relief on his weekly contribution because, whether he marries the woman or not, he will still get that Income Tax relief. Therefore, I cannot see that the Financial Secretary has any difficulty facing him on at any rate that issue.
You will notice, Sir, in that part of my Amendment which may not have been clear to you, that I have been at great pains to leave out widowers because it seems to me that widowers are in a completely different category to widows. To begin with, owing to the Income Tax laws, they do not as widows do bring a tax liability to the other partner of the marriage; they merely continue an existing liability. The tax is their liability only and they alone can be sued for it. In the second place, I think we ought to exclude widowers because, after all, it is man who propose and woman who disposes and, looked at from the angle of a widower with a number of children, it is entirely up to the woman whether she accepts him or not, whereas, on the other hand, the widow cannot very well propose matrimony to her intended husband, so that it is a very different state of affairs. I have also been at pains in that part of the Amendment to leave out the cases of illegitimate children being legitimised on marriage. I should, however, be perfectly happy to accept that also from the Financial Secretary if it is his wish, but I do not want to press him farther than he will willingly go. Similarly, I have left out the case of the divorced person who remarries and, as it were, "reparents his own children." With all those safeguards, I should have thought this was an Amendment which would commend itself to the Financial Secretary and to the House, and I hope he can meet me on this question.
9.0 p.m.
I am not sure that I really understand what the hon. Gentleman wants to do here, but so far as I do understand, I assume that what he wishes is that where a widow with children gets family allowances for them at the rate of 5s. a week, she should pay no tax on that money. I think that the case he has in mind is where a widow marries again. He seems to take exception to the fact, unless I very much misunderstood him that that income will be included in the husband's for tax purposes. But what has the lady to complain of in that case? She has the right to draw the money from the Post Office, and he gets charged the tax on it.
I do not see how it can benefit a woman if we attempted to alter that set of circumstances. I would say—and perhaps it will shorten the Debate—that I know how strongly the hon. Gentleman feels on this subject, because I remember that he put down a Question on it to the Lord President some little time ago, but this is not the place to debate it. After the Recess we shall consider the Finance Bill, and that will be the occasion on which this matter can be argued, if the hon. Gentleman wishes, at some length, and a proper Amendment can be put down if he so desires. It cannot be done here because we are dealing with a Resolution which imposes a charge.
I thank the Financial Secretary. I would like, however, to make the position clear so that he can consider it before I put down an Amendment to the Finance Bill. The proposal is directed to the period before a widow remarries. The issue is that she is much less acceptable for re-marriage because she carries with her not only children but a liability in respect of tax, and her earmarked husband will have to take on as well as the children the tax liability. I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
Before we part with this Resolution I would be grateful if the Financial Secretary could give us some details of how it is proposed to collect this tax. He indicated that the purpose of this Resolution is to bring into charge benefits payable under any Act relating to national insurance, including family allowances. In replying to the hon. Member for Bath (Mr. I. J. Pitman), he pointed out that while the allowances, such as family allowances in respect of children, would be payable to the wife, the tax would be assessed on the husband's income. I would be glad of some further information on how this question of allowances is related to Pay-as-you-earn. By the Ninth Resolution we encourage married women to remain at work. Therefore, it is not unreasonable to assume that in a large number of cases there will be at least three sources of income in the home —the earnings of the husband and the wife, and family allowances or other allowances coming under national insurance. Family allowances are fixed, and while the code number fixed by the inspector of taxes has been communicated to the employer of the man or wife, only the passing of the child out of the provisions in respect of family allowances, or the entry of another child into the family, will alter the coding.
On the other hand, other allowances are now being brought in. The first one which occurs to me is maternity benefit. Under the Bill as drafted, it is proposed that maternity benefit shall be payable during a period before and after the birth of the child. Does that mean that the code card has to be altered in the case of the man, that the inspector of taxes is required to communicate to the man's employer an alteration of the code number in terms of maternity benefit payable to his wife, and then, when the period of benefit is exhausted, a further communication will have to be made to the employer, with the position restored subject to such adjustments as there may be for family allowances? If so, I can see nothing but an intolerable burden being placed upon the inspector of taxes, who will be collecting information and revising the code card while, in the same way, the employer will be adjusting his deductions from time to time.
On the other hand, is it proposed that these allowances shall be taxed at source? I am sure that this Resolution was not produced by the Chancellor without considerable thought, but these are problems which must be solved because they are practical problems of administration. I would be grateful if the Financial Secretary would tell us how it is proposed to collect taxes on these items. How much work will it impose on the local inspector of taxes? How much work will be imposed upon the employers? Finally, will there be any direct link between the Ministry of National Insurance and the inspector of taxes?
Perhaps I might speak again, with the leave of the House. This is being made far more complicated than it really is. Normally, as I think the House knows, husband and wife are treated as one, and a joint allowance is given to them both. Normally, as the husband is the breadwinner, he gets the allowance through his Income Tax, it being done through the code number he is given. If a married woman living with her husband desires to be assessed separately, usually the amount is split between the two, and she has her own separate assessment. Notice of that had to be given to the local inspector of taxes. That is an abnormal method, if I may so term it. In that case, the assumption is that the benefits—particularly the family allowance, as it is laid down in the Act that it should be subject to tax—will go in as part of the total income in that home. If the wife draws the allowance, the husband will normally get the joint allowance for that purpose. I see no difficulty about it whatever. If the woman is assessed separately, normally the husband will be charged for it because it is primarily his duty to keep his family, although the wife may go to the post office and draw the money. In the first instance it is taken care of in the code number that is given to the husband.
Would the Financial Secretary deal with the maternity benefit?
The whole thing is on the same basis. Family allowances were used as an example. Even now people get £1 a year for the widows' and old age pensioners' insurance contribution. What they will get when this becomes law is an allowance of £11 a year instead of £1 a year. That assumes the contributions will be about £10 a year, upon which they will get benefit.
SURTAX ON SETTLED INCOME
Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
I think I am right in saying that this is a Resolution which will, in future, prohibit the making of seven-year covenants to charitable and other beneficiaries in order to avoid paying Surtax. It is a very great pity that this should have been brought in, for a variety of reasons. We are not given any indication of the size of this problem. For example, if the Treasury is losing £1 million a year it would be something to worry about, but we are not told how much money is being lost. There are a great number of very worthy institutions and causes which are benefiting to a very large extent by the use of the seven-year covenant. It is not always realised that a large number of these seven-year covenants are paid by people who do not pay the highest rate of Surtax. Even the learned Solicitor-General, on his £5,000 a year, may be giving some of these covenants, and he does not pay a high rate of Surtax, or at any rate not a very high rate. That is a general question.
I now want to ask a question on a particular point. It may be rather too technical to he answered now, but I should like attention to be given to it in the future. There are many people who give pensions to their old servants on a seven-year covenant. That applies particularly to certain landed estates, where the pension can be appreciably higher by reason of the fact that it is a seven-year covenant, and therefore the donor of the covenant does not have to pay Income Tax or Surtax on the amount. It appears to me from this Resolution that the words "neither in the service of the settlor "may cover the case of a pensioner who was in the service of the settlor. As this is a most useful method of giving pensions to people who have served well in the past, I feel it would be ungracious and unkind of the Government if they were to take away this right.
Is not it a fact that a very large number of these covenants have been made in response to advertisements by the Red Cross? Had this money not been given to the Red Cross the money would have had to be found by the Government, who stood behind the Red Cross in their war work.
The Government pay it, and others get the honour.
It was given by the Government in any case.
No, it was not given by the Government. The Red Cross advertised that the money was doubled this way.
The Government gave 19s. 6d. out of every £1.
9.15 p.m.
I disagree completely with the hon. Member for Ripon (Mr. York) when he says it is a very great pity this Resolution should have been brought in. In my view it should have been brought in years ago, because, as the Chancellor of the Exchequer said, this is a ramp, which Surtax payers have been using for years in order to canalise their Surtax liability into channels they desire and not into the revenue channels. There are two types, as I see it. First, there is the seven-year covenant, under which the settlor undertakes to pay a certain amount to a hospital in deduction of tax. The result is that the State pays to that hospital that amount in Income Tax and Surtax which the payer is entitled to de- duct, from his total tax liability. The second type is that to which the hon. Member for Ripon referred, the people, particularly those with landed estates, who give pensions to their old servants Why should the State pay these pensions? Why should these landlords be public benefactors at the public expense? That is the issue here.
Will the hon. Gentleman allow me? If he uses that argument, then the pensioner of any firm is a pensioner of the State, because if a firm does pay pensions to its ex-employees, those pensions are allowed against the firm's Income Tax.
May I take the House for a moment through some of the processes by which this racket has been operated? The Duke of Westminster in 1932 or 1933—
On a point of Order, Sir. Is it in Order for the hon. Gentleman to call first a ramp and then a racket a practice which up to this moment has been completely within the law? The hon. Gentleman may not approve of the law, but up to this moment it has been the law. I submit that it is out of Order for words of that kind to be used with regard to perfectly legal operations. I ask you, Sir, to consider whether he should not withdraw the words.
I think we are really allowed to use fairly strong language about what we do not approve. It may have been legal but, after all, one can have a legal ramp.
Does that apply also to the word "racket "? That was the last word the hon. Member used.
I think the words "ramp" and "racket" have similar meanings, and I think therefore, the word "racket" can be included.
I have no doubt that the right hon. and gallant Gentleman the Member for Gainsborough (Captain Crookshank) will not like to hear the actions of the Duke of Westminster quoted as a ramp or a racket, but I will not embarrass you, Sir, by subjecting you to further points of Order, and I will avoid using these descriptive nouns.
On a point of Order. Is it in Order for the hon. Gentleman to refer in the manner he has to a Member of another place?
I am not quite sure, but I think the hon. Member was referring to a Member of another place in his individual capacity as a citizen. I think that we are entitled to cite the case of a Member of another place in his individual capacity as a citizen.
Is it public knowledge or secret information the hon. Member for South Cardiff (Mr. Callaghan) has secured in another capacity?
If hon. Gentlemen opposite will be less anxious to protect these people and prefer to hear the case, I think we shall find I am not out of Order. This gentleman—there is no need for me to use many adjectives, because the facts stand out—in 1932 or 1933 made a number of deeds under the Act as it stands.
Entirely legally.
The purpose of those deeds was to ensure that his estate servants should he paid moneys out of his Surtax and Income Tax in lieu of—
May I raise another point of Order with you, Sir? On what basis can the hon. Gentleman be giving this House information about the private tax arrangements of an individual member of the public, let alone a Member of another place? But whoever he is, what authority has the hon. Gentleman to say whether this gentleman entered into deeds, for whatever purpose?
I have no knowledge of the individual case to which the hon. Gentleman is referring, but the hon. Gentleman refers to it on his own responsibility.
Further to that point of Order. The hon. Gentleman gave the name. Why is he able to give this information?
I say that I have no knowledge of the case to which the hon. Gentleman refers.
Is it in Order, Sir, for an hon. Member who, I understand from an official book, was formerly a member of the Inland Revenue Department, to disclose to this House such information as may have come to him in his official capacity?
I have no knowledge of what the hon. Member was before he entered this House. The hon. Member may refer to a book, but I cannot read all of them. The hon. Gentleman makes his statement on his own responsibility.
On a point of Order. Is it in Order for an hon. Member to insinuate that a Member of this House is disclosing information he obtained in his official capacity, confidentially, as a civil servant?
How does he know?
I am not quite sure that an insinuation was made. I think it was a question the hon. Gentleman asked.
Surely, it would be in Order if, instead of the term he used, the hon. Gentleman just described it as a ramp.
When we come to the word "ramp" I have a little doubt, because I heard the Leader of the Opposition earlier today say that other proposals were a ramp.
Is the answer to my point of Order that I am entitled to describe the language of the hon. Member as a ramp?
Perhaps we have now cleared up all the points of Order, and I may again be allowed to enter the Debate. I will satisfy the curiosity of hon. Members opposite as to how this information came to me. The plain truth is—and if hon. Members had allowed me to say this ten minutes ago we could have saved a considerable amount of time—that this legal case was taken to the House of Lords. It was heard by the Special Commissioners, and it went from them to the King's Bench Division. The King's Bench Division found in favour of the Revenue Department, at which time the score was two nil for the Revenue Department. It then went to the Court of Appeal, where it went against the Revenue, and it became two to one, and, finally, it went to the House of Lords, where the score became two all, and if hon. Members care to go to the Library they will be able to read the full details. I say that this Resolution is long overdue, and that it should have been introduced by a Conservative Government years ago if they had had any regard for the public interest and the public purse. This has become a method by which, as Lord Atkin said in giving his judgment on this case, Surtax payers have been able to rid themselves of a considerable amount of their Surtax liability, at the public expense. That is why this Resolution is necessary.
Let me refer once again to the Duke of Westminster. He made a series of deeds for his employees whose services ranged in length from four years to 40 years, under which he undertook to pay them, by means of seven years covenants, certain sums of money. He wanted these sums to be regarded as in lieu of wages, but, under the Truck Act, he was not able to say that in so many words, and so instead he wrote to all of his estate servants, Mr. Allman, the gardener, and others, and said in effect, "I realise you have a perfect right to claim your wages, but I hope you will regard this deed as being in satisfaction of part of your wages." He did that not only for his estate servants, but for Mr. Blow, a Fellow of the Royal Institute of British Architects, to whom he was paying £2,000 a year for looking after his affairs. As Lord Atkin has said, it was trying to rid the Duke of Surtax liability, and the payment was costing him not £2,000 a year, but maybe £200 a year, and the State was paying the balance. Is that the sort of thing which hon. Members opposite wish to defend? Call it a legal ramp or what you like, it is certainly a racket.
On a point of Order, Mr. Speaker. Has it not been held again and again by your predecessors, and is it not laid down in Erskine May, that a Member of this House may not make a reflection on the personal honour of a Member of another place?
This is a case which, apparently, has been to the House of Lords as a law case. The hon. Member is merely quoting evidence given before the public, which has also been quoted in the Press. Therefore, it cannot be a reflection on the Member of another place, but is a public matter.
I think that the hon. Gentleman is quite entitled to refer to a case. Possibly, Mr. Speaker, your atten- tion was for a moment diverted when the hon. Gentleman said it was a racket. I ask you definitely whether it is in Order to describe the action of a Member of another place as "a racket".
I do not know if the hon. Gentleman described the action of a Member of another place as a racket. I thought that he was quoting a legal case and that he quoted a judgment from which he regarded the whole system as a racket. If that is so it would be open to any hon. Member in this House to refer to it. Surely it would be perfectly in Order to state his opinion of the existing law.
I understand you to say, Mr. Speaker, that the judge accepted this as a racket but that was not what the hon. Gentleman said at all. In the hearing of everyone on this side of the House the hon. Gentleman said that it was a racket, referring to the action of the Duke of Westminster, and I ask you whether that is in Order.
He described the whole system as a racket and that is not a reflection upon a Member of another place. The Duke of Westminster happened to be the individual brought up in the case. but it might have been anyone else.
I will leave the matter to speak for itself Here was a taxpayer who was paying an architect £2,000 a year for his services, and he drew up a deed which said that Mr. Blow, the architect, was being paid "in consideration of past services and that for motives of concern for his interest" the taxpayer is desirous to secure for him £2,000 a year which the State mostly pays. Hon. Members opposite can describe that in any way they like. I know what I call it.
I am not concerned to defend settlements on servants. I want to say something about the effect of this Resolution on charities. I have yet to hear it suggested that these settlements on charities are a racket. Either they are desirable or they are not desirable. If they are desirable, how can they be described as a racket? If they are not desirable, how was it that the Treasury—the Government—with their eyes perfectly open—encouraged these seven year settlements on charities? This Resolution is going to have a very serious effect on charities, and it will undoubtedly act as a deterrent to the benevolent public from making these settlements. I want to know whether the Chancellor of the Exchequer really persists in his intention to apply this new arrangement to charities. I would draw his attention to the last three lines of the Resolution, which exempts settlements which are made: for the benefit of an individual named in the settlement, and the individual to whom it is payable or for whose benefit it is applicable is neither in the service of the settlor nor accustomed to. act as the settlor's solicitor or agent. I want to know why charities should not be added to that exemption. Today, under the law, which under those last three lines is not going to be interfered with, you can make a settlement on a spinster aunt for seven years, and she will get the benefit, and you will get the benefit of a reduction in Surtax; but if you make it on a home for spinster aunts in general you are going to be penalised under this provision. What could be more absurd than that? I ask the Chancellor of the Exchequer to consider whether there can be any justification at all for penalising charities in the way in which he proposes to do under this Resolution.
I would like to say a word or two largely on the question of this distribution to charities. The plain truth is surely this: If you give fro a year to a charity, you deprive yourself of fro and give the charity £10. So long as charities exist, that is a very reasonable and ordinary thing to do, if your income permits you to do it. I suppose that the provision was originally meant to provide a little relief from taxed income, but someone hit on the idea that if you wrapped it up in a covenant, you gave £10 and the Government, in fact, gave £3, £6 or £7 to a charity. Thus by giving money to a charity, a donor compels the Government to go short of money. The money goes to the charity whether it is a charity of which the general public would approve or not.
9.30 p.m.
Speaking for myself, I do not suppose I am any more fasticams than other people who occasionally have fro to spare. I was giving a sum of money to a benevolent association of my own profession a few years ago, and I was asked by a very respectable, elderly member of my profession, who is in charge of this charity, whether I would enter into one of these covenants. I do not suppose I am any more morally scrupulous than anyone else, but having looked at it I came to the conclusion it was a racket, and I said I would not do it. I expected to be snubbed for being too pious, instead of which I got a letter from the old gentleman—who I am,tire was a member of the Party opposite—in which he agreed that it was merely a racket. That is how the thing struck me. if anyone wants to give to a charity, let him give it out of his own pocket.
Hon. Members on the other side of the House have referred to this scheme as a racket. I think it is a misnomer. It is a super-racket. What they object to is when it comes under the Super Tax rate, but they are perfectly well prepared to swallow it when it comes under the Income Tax rate. I think we should ask the Chancellor to clear our consciences, and our pockets, and do away with this thing altogether on Income Tax as well as Surtax. Hon. Members opposite seem to have an elastic kind of conscience which allows them to accept it as long as only Income Tax is concerned but not if it is Surtax.
There are two points which arise out of what has been said by the hon. and learned Member for North Hammersmith (Mr. Pritt). I think they are important and should be borne in mind on this matter. One of the reasons why these covenants were asked for was not because of tax evasion, but because so many charities had found out how difficult it was to budget year by year if they did not know what was coming in. They have got some assurance of what their income will be through this scheme.
If that is so, why does every charity which asks people to covenant for seven years, point out that it would help in tax payments?
I think I made it clear that the main point from the charities' aspect, was that they should have a consistent income coming in, and by the covenant they know they are going to get a certain amount. I believe that there are charities which do that. I am not going to defend anything said by the hon. Member for South Cardiff (Mr. Callaghan), but I should like to support my hon. Friend the Member for Twickenham (Mr. Keeling) in what he said. I believe that the charities were helped by this, and I hope that reconsideration will be given to the way in which the Resolution is drafted.
We have had a long Debate on this Resolution, and a certain amount of heat has been engendered, which I do not think would have been engendered if we had looked at the thing fairly and clearly, and had seen what does take place. No one has got anything against charities and everyone hopes that deserving charities will continue to flourish. But look at the figures and see what happens under these seven year covenants. Suppose a person has an income of over £20,000 a year, taxable at the appropriate rate of Income Tax and Surtax. If that person contributes £1,000 a year to a charity under the terms of a seven year covenant, the result is that he pays out of his own pocket out of that £1000 no more than £25 and the rest of the £1,000 is paid by the Treasury. Those figures are arithmetically correct. That is the position. Whether one calls it a racket, or by any other epithet, it cannot logically or rationally be justified.
rose —
Perhaps it would be better if the hon. Gentleman would let me develop my argument. Nobody could logically justify that position, however much one wants to see deserving charities flourish and have plenty of funds at their disposal. My hon. Friend the Member for South Cardiff (Mr. Callaghan) quoted a case which was heard in the House of of Lords. His argument did not seem to be understood by Members opposite. What he did say was not that it was a racket, but that it was a legal racket. That was not criticism against the Noble Lord concerned in the case, so much as against the system of law which made that possible. That system has to be altered, and that is what this Resolution sets out to do.
The hon. Member for Ripon (Mr. York) started by saying, "Does it really matter and has it got to dimensions which make it worthy of being embodied in a Resolution of this sort?" I understood the hon. Member to say that if the Treasury lost £1,000,000 a year as the result of not being paid Surtax under the terms of seven-year covenants, he would be disposed to support the Resolution. Well, I can give him the figure. The amount which is lost by the Treasury every year, as the result of these seven year covenants, is £1,250,000—
rose —
The Resolution provides that payment made under seven-year covenants shall not qualify for deductions for Surtax purposes. That is all we are seeking to do.
rose —
I have said perfectly clearly, and I repeat, that the loss to the Treasury, as a result of the seven-year covenants, is now in the order of £1,250,000 a year.
rose —
We are not in any way interfering with charities. They are entitled to be relieved of the liability to pay Income Tax on contributions made to them. That position is not affected. All we are seeking to do by legislation, for which this Resolution paves the way, is to provide that if a person wishes to make contributions to charity, that charity may claim repayment of tax, but the person who makes the contribution, if he makes it under the terms of a seven-year covenant, shall not be entitled to deduct the amount of his contribution for the purpose of his Surtax assessment. The figure I have given can be verified by a simple mathematical calculation by applying the ordinary tax and Surtax rates appropriate to incomes over £20,000 a year. The conclusion is inescapable that out of every £1000 paid to charity, the taxpayer pays no more than £25. It is a perfectly indefensible position. It is ridiculous that a person who gains kudos by being a contributor to the extent of £1,000 per annum to charity should pay only £25.
How many of the £20,000 class of people is the hon. and learned Gentleman referring to?
The number of deeds is, I think, 250,000
Will the hon. and learned Gentleman allow me—
What I have said is arithmetically correct. It is undoubtedly fantastic that the Treasury should be mulcted, year after year, of a sum in excess of £1 million in order that people who have very heavy Surtax incomes should gain kudos by making payments to charities which, in fact, they never make, and which are paid out of the pockets of the general body of taxpayers.
May I ask the Chancellor of the Exchequer a question, since the Solicitor-General refused to give an answer? The Solicitor-General mentioned the sum of £1,250,000 lost by the Treasury every year. All I wanted to ask, although the Solicitor-General was not prepared to give me an opportunity to do so, was whether that is the sum lost by the Income Tax and Surtax portion of these seven year grants, or the Surtax portion alone?
The figure quoted by my hon. and learned Friend is the amount which we hope to recover by this very moderate Amendment of the law. Let me hasten to add that some people think this proposal is too moderate and that these contributions should be disallowed not only for Surtax but for Income Tax also; and for that there is some case, but being anxious in these matters not to press too hard, I have limited my proposal at this stage to disallowing—
It is a racket.
So it is. I said in my Budget speech that it has become a bit of a ramp.
Since the right hon. Gentleman referred to me, I said it was—to use a term which has been held to be in Order—a racket on the part of the Government to avoid placing this burden on the backs of their own supporters.
Whether it is a ramp or a racket, we are going to stop it. We begin by stopping it in respect of the Surtax. I cannot believe that seriously any hon. or right hon. Gentleman opposite can defend a state of affairs which has been explained so lucidly by my hon. and learned Friend the Solicitor-General. If people are making contributions to charity, we are very happy that they should continue to do so, but they should not, in effect, claim to make contributions to charity when 19s. 6d. out of every £ they purport to pay is found by the Treasury. The short answer to the right hon. Gentleman the Member for West Bristol (Mr. Stanley) is that the figure quoted by my hon. and learned Friend is the amount lost in respect of the Surtax allowance alone. It is that which we seek by this Amendment to recover.
If this system is a ramp in the case of charities, why is it not also a ramp in the excepted cases mentioned in the last three lines of the Resolution?
I speak again by leave of the House. It was thought that, in the case of relatives and people of that sort, it was not unreasonable that provision should be made, and the right to claim deduction against Surtax assessments nevertheless retained. That is why the Resolution makes an exception in the case where the settlor divests himself of the capital comprised by the settlement, and also where he makes a settlement in favour of a particular individual for his own use, which is designed to provide for the case of relatives and similar dependants. There is the further proviso in the Resolution that any such beneficiary is not to be a person who is in the employment of the settlor, or a person who is his solicitor or agent. The object of that proviso is to prevent the operation of the law as laid down in the case about the Duke of Westminster, to which reference has been made in this Debate. It is simply a concession in the case of bona fide dispositions in order to support relatives and other similarly dependent persons.
9.45 P.m.
Considerable heat has been engendered in the course of this not very lengthy Debate, and a certain amount of prejudice has undoubtedly been introduced, particularly by the speech of the hon. Member for South Cardiff (Mr. Callaghan).
I wanted it to be.
The hon. Member wanted to introduce it and he was quite successful. He takes a great interest in these affairs. He was for some years with the Board of Inland Revenue and no doubt watches closely the cases taken to the House of Lords.
And, may I say, caused a great deal of indignation among the staff of the Board of Inland Revenue.
I was saying that the hon. Member obviously took a great deal of interest in these cases and watched those which were taken to the House of Lords. He has taken advantage of his knowledge and experience to introduce into his speech a considerable amount of prejudice. I was making a statement which was perfectly true and which the hon. Member has accepted.
I should like to make one point in relation to the question raised by my hon. Friend the hon. Member for Ripon (Mr. York), who wanted to secure the position of pensioned employees in the case of a landed estate. I hope that the Chancellor will agree with me that such pensioned employees are in fact protected under the last two lines of this Resolution as drafted because once they have retired they are no longer in the service of the settlor. The learned Solicitor-General agrees that that is the position—and it is quite right that it should be so—and I therefore take exception to what the hon. Member for South Cardiff said. In the case of an ordinary landed estate the method of accountancy for calculating Income Tax is different from that adopted by a company. In the case of a limited liability company the pensions of the servants are a charge against the profits of the company. In the case of the landed estate there may not be sufficient net income from the estate to pay the pensions of the servants who have retired from working on that estate, and it is therefore obviously right that the Chancellor should make this provision because it merely puts the proprietor of the landed estate in exactly the same position as the limited liability company. In view of this I think that the hon. Member for South Cardiff did less than justice to the case made by my hon. Friend the Member for Ripon. We on this side of the House do not intend to vote against this Resolution, but we shall want to scrutinise the Clauses very carefully when we see them in the Finance Bill.
I think this is a very important matter and that this Debate has been unduly truncated because I have not heard anything said from either side of the House on behalf of the Surtax payers. It may be that the experience of being a Surtax payer is a rare one—at least on the other side of the House. It is difficult for hon and right hon. Members to have a sympathetic or understanding approach to this matter. Taxation without representation was looked upon as an evil in the days of Edmund Burke; I think taxation without representation on the severe scale upon which it falls on Surtax payers is undoubtedly evil, and hon. and right hon. Members opposite do not know from their own experience—
On a point of Order. Is this argument relevant to the Motion we are discussing?
No doubt the hon. Member noticed that I was leaning rather forward in my chair. I was wondering whether the hon. Member for South Edinburgh (Sir W. Darling) was about to develop a general argument on Surtax, and if so I should have stopped him.
There is no need in this case to develop a general argument, but I thought that, in view of the fact that a restriction was being imposed upon the free rights hitherto enjoyed by Surtax payers, and in view of what hon Members and, indeed, right hon. Members opposite have said about a racket and a ramp, it would be permissible for me to say something on the subject.
That would be going outside the scope of the discussion.
If that would be beyond the scope which the Rules of the House permit, I will, if you will allow me, follow the assured and well-trodden track of the Duke of Westminster. Apparently that path, which I myself thought a little doubtful, is one which I may pursue with the encouragement and enlightenment not only of the hon. Member for South Cardiff (Mr. Callaghan) but of the Chancellor of the Exchequer himself. In that connection the House is greatly enlightened by the specialist knowledge of hon. and right hon. Members who have had the advantage of being members of the staff of the Inland Revenue. It is the tradition, the proud tradition, of this House that our varied experiences, in obscure as well as in notable circumstances, has brought rich contributions to our Debates. Therefore I welcome the intervention of one who has been a member of the staff of the Inland Revenue. I listened to the hon. Member for South Cardiff, but I was surprised that after so concentrated, and I have no doubt constant and highly intelligent, perusal of difficult documents, he was not able to make a better speech.
As to his remarks about such covenants as we are discussing, it is true to say, as I can, from my own knowledge and not without some experience, that those covenants have, almost without exception—in fact, I cannot think of any exception —been paid partly by the State and partly by the covenanters, and they have always been benevolent in their intention. Before the Government dry up the springs of charity, let them bear in mind what has happened. Were those gifts immoral in their direction? Were they devoted to some vile purpose or contrary to the best interests of the State? Did they do any evil in any direction at any time? Were they covenants that any honest citizen could have said were undesirable? If the answer to those questions is "No," then His Majesty's Government are taking a step which will stop the outpourings of human charity. They will prevent some individual who has rightly acquired, by his own legal activities, the purchase and the possession of property, from disposing of it in his own way. [HON. MEMBERS: "No.']
There is a phrase saying that a man can do what he likes with his own. The new attack upon property will recoil upon the heads of those who make it. If this Resolution is approved, many good causes will suffer and many great public works will be weakened.
Does the hon. Member mean that the springs of charity will dry up if the Surtax payer cannot contribute to charities at the public expense?
I only know what has inspired the springs of charity up to now, the generous heart and open hand of good people. We are told by His Majesty's Government that they are going to substitute for all these generous outpourings of willing hands some niggardly proposal of a highly artificial and compli cated piece of machinery, known as the National Health Insurance Scheme. if I were a sick and suffering person, and I had to choose between the monuments of personal charity I see around me and the airy prospects opening out in the future and which are going to come from the Government Front Bench, I would prefer rather to rely upon what is here than upon expectations of something which might not be realised. It will be apparent in this House that His Majesty's Government, while seizing revenue, as we learned from an earlier Resolution, by putting a£1 duty on the right to sell liquor in aeroplanes, are drying up£I,250,000 of generous donations given by generous people. That will be the position—although with a lavish hand they encourage the consumption of drink on aeroplanes, with a niggardly hand they withdraw what has been the established practice of many generous citizens for generations.
EXCESS PROFITS TAX TERMINAL PROVISIONS
Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
When the Chancellor in his Budget Statement came to this question of the abolition of E.P.T. at the end of this year, he made this reference of which I will remind the House: As I propose that E.P.T. shall come to an end this year, I am including in the Finance Bill appropriate provisions dealing with terminal losses—allowance for deferred repairs and renewals, post-E.P.T. expenditure on the rehabilitation of industry to a peace-time footing, and fails in stock values. He added: I propose also to fix the date at which the provisions relating to exceptional depreciation are to come into operation."— [OFFICIAL REPORT, 9th April, 1946; Vol. 421, c. 1837.] This Resolution is in very general terms. The fact that a Resolution is required shows that the provisions, as I understand it—I may be wrong here, but I think not—will charge tax as well as get a relief from tax; otherwise the Resolution, I am advised, would not be necessary. The words in the Resolution cover the extent to which matters arising after the end of E.P.T. can be taken into account for the purposes of E.P.T. I am quoting from the Resolution. These powers appear to give power to relate profits arising after the end of E.P.T. to be brought back into E.P.T. On the other hand, Section 30 of the Finance Bill (No. 2) Act, 1945, which is already on the Statute Book, provides' that no relief shall be given in respect of any deficiency of profit occurring in any chargeable accounting period after 1st January, 1947.
We seem, therefore, to be in this position, that profits may be brought back into the E.P.T. but deficiencies of profit may not be brought back into E.P.T. If I am right, it is obvious thato these two situations must somehow or other be brought into line to avoid one-sided legislation against the taxpayer. In other words, profits or losses after 1st January, 1946, should not be capable of being related to tax under E.P.T. unless those profits and losses arrive from circumstances present during the E.P.T. period. I raise that point now because I think it is a matter which merits the most careful consideration between now and the time when the Finance Bill is drafted.
In addition, speaking for myself as an industrialist and, I am sure, on behalf of all industries that are affected by this tax, we are grateful to the Chancellor for redeeming what we understood would be his hopes to bring it to an end at the end of 1946. Those of us who remember the trouble after the end of the previous war, when we had E.P.D. instead of E.P.T., and the fact that there was no financial machinery for winding things up at the end of that war, with the result that there was chaos and muddle and prolongation for a lengthy period of disputes and arbitration and so on, welcome the fact that there is to be legislation this time which will make a clean wind-up of these postwar tax liabilities. So, while I ask the Chancellor to be good enough to look into the first part of my remarks, I would thank him, on behalf of industry, for redeeming his promise to wipe out E.P.T.
10.0 p.m.
In view of the way in which the hon. Member for Stockport (Sir A. Gridley) has dealt with this Resolution, there seems little left for me to say. He quoted briefly from what the Chancellor said on this matter and there is no point in my repeating what the Chancellor actually said. This deals, as he very properly said, with terminal losses, and it is essential that the two periods should coincide. The period will be laid down in the Finance Bill, and I can only assure the hon. Gentleman, and the House generally, that due note will be taken of what he has said tonight and, in so far as we can cover further points—I think we have, in fact, already covered the points he mentioned—and make it even clearer than it otherwise may be, that these two periods must coincide, we shall see that that is done.
NATIONAL DEFENCE CONTRIBUTION
Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
Could we have a short explanation of this rather complicated provision?
It is complicated and rather technical but, briefly, the provision is that the Excess Profits Tax and the National Defence Contribution are alternative taxes, and the higher one goes, as against the one which would impose a lesser charge—I have here a note of an example which perhaps will explain it better than any amount of words.
Taking the liability for chargeable accounting periods during which both E.P.T. and N.D.C. are in operation, taking E.P.T. at about £500,000, and N.D.C. at £200,000, the £500,000 would be the amount charged and not the £200,000. If E.P.T. goes, as it is going, there may be some slop-over, so that the difference between £500,000 and £200,000 may make it appear that tax has been liquidated because, going back to N.D.C., it might be assumed by some people that there was £300,000 there to play with. What we are trying to do here —and the Finance Bill will see that we do it—is to see that that kind of thing does not arise. What will happen is that E.P.T. will come to an end and N.D.C. will go on, and N.D.C. will be the rate charged. This Resolution will see that that rate is charged.
RATES OF ESTATE DUTY
Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
This Resolution, of course, raises an important question, in fact one of the most important points in the Budget. It is in a form which both confers benefits, and increases charges. It is not, therefore, in a form against which we could divide because, in doing so, we should deprive a number of people of a benefit which this is giving to them, and of which we approve. But we shall seek on a more appropriate occasion to discuss at much greater length the effects of this Resolution. We do not propose to do so this evening, for the reason that we have a number of other important matters still to discuss, and I am anxious that, perhaps for the first time, this matter should be discussed by means of argument and not by means of prejudice. I notice that although hon. Members opposite are reluctant at any time to abandon prejudice for argument, they are even more reluctant to do so as the evening goes on. We have had the example of the hon. Member for South Cardiff (Mr. Callaghan)
It was the right hon. Gentleman's leader who started it this afternoon.
I do not know whether the hon. Member was here during the Debate to which I am referring, but he can read it in HANSARD tomorrow. We feel that the whole question of Death Duties raises important economic questions which, at some time or other, should be discussed as a serious business and not as a pleasurable game of soaking the rich. On the Committee stage of the Budget Resolutions we tried to raise points upon this matter but we got no answers to them. I want the right hon. Gentleman to understand that although at this stage, and this hour of the evening, we shall not divide the House on this Resolution, at later stages we shall raise the matter and hope for an explanation.
ESTATE DUTY—GIFTS INTER VIVOS
I beg to move, in line 5, at the end, to add: but this provision shall not apply in the ease of any gifts made before the said date. Under the recent law, a gift must have been made more than three years before the death of the donor in order to escape Estate Duty. Under this Resolution, the gift would have to be made more than five years before the death of the donor in order to escape Estate Duty. While I deplore the increase in this period, if this period is to be extended by effect being given to this Resolution, I do not think it ought to be permitted to operate in any sense retrospectively. The Resolution relates to persons dying on or after 10th April this year, but, nonetheless, it will affect gifts which have been made in the past. The purpose of my Amendment is to exclude from its operation gifts made before the date of the recent Budget. I think that it would inflict injustice if such gifts were not excluded.
May I give an example of the kind of thing I have in mind? Supposing that four years ago a man made a gift to a relative, he was quite entitled to assume during the past year that that gift would not be assessed to Estate Duty. During that time, when he quite reasonably acted under that assumption, he may well have made other dispositions of property. In the event of his death during the next year the gift which I have mentioned would become assessable for Estate Duty, and that might upset, to a very large measure, the computations upon which he had based his various dispositions. That is only one example. To take the broad view, I submit that if the law is to be changed in this way, although I deplore it, then it should not have any retrospective effect.
I beg to second the Amendment.
The point is a small but clear and important one. The general principle about retrospective legislation is that all Governments have at times indulged in it, both in financial and other matters, but it is in itself highly undesirable, and only to be justified if there is some absolutely overriding necessity to compel it, a necessity which does not seem here to be at all present. My hon. Friend has made quite clear what is the difficulty with which people will be faced if this Amendment is rejected. It is that supposing that Mr. Gold had made a gift of money to Mr. Flake in December, 1942, he would, as he was entitled to do under the law, have waited in a condition of ill-concealed anxiety until December, 1945, and if, when that time came, he had found Mr. Flake still in vigorous and offensive health, he would have then been entitled to think that Estate Duty would not be charged. Now, so long as Mr. Flake survives until 10th April, 1946, he has to wait another two years in this state of anxiety. That is the inconvenience.
Let me put it quite seriously in the form in which this inconvenience will be felt. When' I was at Oxford I derived great profit from reading a work about public finance by the Chancellor. I learned from it many things to my advantage. One thing which I had previously not known, and which I have since discovered to be true, was contained in an ingenious argument in which the Chancellor maintained that Estate Duties, in fact, as the world now is, are not taxes on capital to nearly so great an extent as is commonly imagined. The reason they are not, according to his argument, is that people to such a large extent insure against them, and, therefore, they are substantially paid by the insurance companies, and the Chancellor thinks that an admirable plan. Apparently he thinks it is bad citizenship to hedge against the price of cotton but that it is good citizenship to hedge against the death of one's great aunt. These insurance policies, in the case of Mr. Gold, would be taken on Mr. Flake's life to December, 1945, and would, therefore, have run out. But supposing Mr. Flake should be so inconsiderate as to die between 10th April, 1946, and December, 1947, Estate Duty would have to be paid, and there would be no insurance to help to pay it. That is a practical and perfectly clear point.
10.15 p.m.
This could only be justified if one took the line that gifts inter vivos were as a general rule either immoral or undesirable and were, in fact, either a ramp or a racket. I think nobody could seriously take that line again, least of all the Chancellor, for another most ingenious argument which I learned from the Chancellor was in the same book. The Chancellor is arguing that equality of income is a desirable thing and makes the highly original and ingenious point, quite clearly true when one thinks of it, but not one I have come across in the works of any other economist. It is that inequalities of income are not merely between class and class and profession and profession but one of the greatest inequalities of society is the inequality of income between the old and the young. In his book the Chancellor says: The heavy inheritance tax further tends slightly to reduce the inequality of incomes by stimulating gifts inter vivos from the old to the young. Therefore, so far from gifts being discouraged, they are things to be encouraged. It is quite true he puts his point and raises the question in the cautious language in which it is proper to raise a question to which no one knows the answer. But it is his conclusion that on the whole they tend towards the greater equalisation of income. Therefore, for that further reason I would commend my hon. Friend's Amendment to the Chancellor's attention. In this book there are other observations with which I myself could not agree quite so wholeheartedly as those to which I have referred. It seems to me he makes some rather unqualifiedly harsh judgments on the whole system of inheritances which makes me the more filled with admiration and delight to find that he has, in spite of these judgments, been the first Chancellor to propose a diminution and extension in some cases of Estate Duty. It is a wonderful conversion. There has been no conversion so wonderful since the time of St. Paul—though I am bound to say, in the case of the right hon. Gentleman, he got to Damascus first, and was converted afterwards. He found that the more convenient arrangement. Nevertheless, I would appeal to him to support my hon. Friend's Amendment. I appeal to the Chancellor to base his Budget in this respect, at any rate, upon the financial principles of Professor Dalton.
I wish to make one or two comments on the two speeches to which we have just listened. Surely, the word "retrospective" is being misunderstood. "Retrospective imposition of the tax" I understand to mean that somebody, who is living tomorrow, will be liable to Estate Duty tomorrow, because we pass this Resolution. We are not saying anyone who is living tomorrow shall be deemed to be dead. The second point is that the hon. Member for Sutton Coldfield (Sir J. Mellor) gave us the instance of the testator who may have made his gift four years ago, who for the last year has considered that gift would be immune from Estate Duty when he died. Tomorrow, he will find that something has happened to upset everything that he has done in regard to this disposition of his estate in his will. The implication, of course, is that his estate will have to bear the Estate Duty, but that is not so. There may be cases of aggregation, but nobody can say what the effect will be. Actually, this Amendment will not affect testators, because they have never had to pay the duty. One donee is liable.
We, on this side of the House, listened very carefully to the two very impressive speeches in which this Amendment was moved and seconded, and also to the speech of my hon. Friend on this side. We shall consider these arguments on the Committee stage of the Finance Bill. What the hon. Member for Sutton Coldfield (Sir J. Mellor) is really proposing is that the five-year period, if I may so describe it—the five years that have got to elapse between the gift and death in order to relieve the gift of Estate Duty—should run as from the date which he mentioned in his Amendment that is to say, the five years, as it were, should start from now. In support of that argument, he quoted an example which is really not in consonance with his own proposition, because he quoted the example of the covenant of four years ago. We feel that no case has been made out, or can be made out, for saying that the five years should run from now into the future, which would be the case if the Resolution only applied to gifts as made from now on. What we shall consider while drafting the Finance Bill is whether we can make any concession in regard to the sort of things that have been instanced in regard to gifts made four years ago. I make it clear that we do not give any sort of undertaking in that connection, but we will consider it and will bear in mind the arguments which the hon. Member has adduced, and, upon that assurance, I would invite him, with the leave of the House, to withdraw his Amendment.
I think it is difficult to argue this matter from individual cases. Quite obviously, one cannot say that a man who made a gift three or four years ago is going to die during the next four years; equally obviously, there are going to be cases of hardship in that men who are still living today, will die. I think the Chancellor will do well to give rather wider consideration to the matter than the Solicitor-General has indicated, as this matter cannot be argued from individual cases, and I think the suggestions made by my hon. Friend should receive consideration between now and the next stage.
My hon. Friend moved his Amendment extremely well, and the House was much impressed by the two speeches made in support, but, on the terms of the Resolution, what the Government propose to do here compares very unfavourably with what they are doing on the Resolution which we have recently been discussing dealing with seven-year covenants. Under the seven-year covenant Resolution, all arrangements made previous to the date of the Budget will stand. Under this Resolution, as drawn, arrangements entered into as long as nearly five years ago may be upset, unless some Amendment is made.
I draw the attention of the Chancellor and of the Solicitor-General to the terms of the Finance Act, 1909. In the year 1909, the period for gifts inter vivos , which had been fixed at one year when Estate Duty was instituted in 1894, was extended to three years, but a Subsection was put into the Finance Bill saying that this extension should not apply to gifts made before 30th April, 1908. That is to say, all gifts made more than one year before the date of the Budget of that year were liable to Estate Duty. I, there- fore, suggest to the Chancellor that, on the Committee stage of the Finance Bill, he should accept an Amendment which will protect arrangements entered into more than three years before the date of the current Budget. There is a precise precedent for doing tins in the Finance Act of 1909, and I hope the Chancellor will see his way to give us an assurance that that precedent will be followed.
We shall have a look at it.
In view of what the Solicitor-General has said, I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
When he introduced this proposal, the Chancellor did not say one single word in explanation of the reason for it. Perhaps the reason in the case of gifts inter vivos to private persons is obvious, but it is not obvious why the Chancellor should propose to extend the period in the case of gifts to a charity from one year to two. The reason for having a period at all is, no doubt, to 'prevent death-bed transfers to a charity from being free of death duties. But after all, one does not normally lie on one's death bed for over a year, and I cannot see why this period should be increased in the case of charities from one to two years. The reason for having a shorter period for charities than for individuals is, surely, to encourage transfers to charities, but the result of increasing the period from one year to two will be to discourage such transfers to charities. Is that the object of the Chancellor, and, if not, what is the object?
It is felt that it would be in consonance with the provision which extends the three years into five in the case of individuals, and would be in accord with that and with the extra revenue which that would produce, to prolong the period in the case of charities analagous to that. The object is really to prevent gifts made shortly before death from depriving the Revenue of income which it should enjoy.
Is not that sufficiently covered by the existing period of one year?
It is a question of degree. It has differed from time to time, and the feeling of the Government is that the periods which have hitherto obtained, of three and one years, respectively, are inadequate and result in the Exchequer losing a certain amount of revenue from Estate Duty. The reason, therefore, is one of degree. One has to try and assess what is the proper period, having regard to all the circumstances, to fix as the time beyond which gifts made shall not escape Estate Duty in the event of the testator dying within the allotted period. It is for that reason that it was thought that the two periods, not only the one, should be prolonged, and an appropriate addition was made in the case of trusts, having regard to the increase in the length of time which was decided upon in the case of gifts to individuals.
The Solicitor-General seems to be furnished with the weakest brief I have ever known. When it comes to the Finance Bill, we should like to pursue this matter of the charities. I am not referring to the earlier part of the discussion, on which I understand the right hon. Gentleman has made a concession.
NATIONAL DEBT (PERMANENT ANNUAL CHARGE)
Resolution reported: That it is expedient to authorise— (a) the issue out of the Consolidated Fund of the sum of four hundred and ninety million pounds for the permanent annual charge for the National Debt for the current financial year, instead of the sum of three hundred and fifty-live million pounds; (b) the provision out of money borrowed for the purpose under the National Loans Act, 1939, instead of out of the permanent annual charge for the National Debt, of the sums required for the current financial year for the purposes mentioned in paragraph (a) or paragraph (b) of subsection (4) of section twenty-three of the Finance Act, 1928, as amended by any subsequent enactment."
FINANCE (POST-WAR REFUNDS OF INCOME TAX)
Resolution reported: That, for the purposes of any Act of the present Session relating to Finance, it is expedient to authorise— (a) the issue out of the Consolidated Fund of any sums ascertained and recorded under section seven of the Finance Act, 1941, falling to be credited to a man of sixty-five years or upwards or a woman of sixty years or upwards, in respect of income tax for the year 1941–42, the year 1942–43. or the year 1943–44; (b) the borrowing of money under the National Loans Act, 1939, for the purpose of providing the sums so issued."
Motion made, and Question proposed, That this House doth agree with the Committee in the said Resolution."
10.30 p.m.
I should have thought, Mr. Speaker, that the Chancellor would have risen—
Does the right hon. and gallant Gentleman wish to know something?
I should have thought the Chancellor would have given some information on this provision. If the Resolution is passed it will mean that postwar credits will be paid to men of 65 and upwards and to women of 60 and upwards, as he told us in his Budget speech. I think we might have some explanation of his startling change of attitude on this matter. It is not long ago since we raised this matter, and this is a recognition of the proposals we made from this side of the House on 29th November, and against which hon. Members on the other side voted. My hon. and gallant Friend the Member for West Edinburgh (Lieut.-Commander Hutchison) moved a new Clause on that date for the repayment of postwar credits for persons of ho years on or before the date specified. One point I should like the Chancellor to explain is why he has applied these proposals to men of 65 and women of 6o. Why has he not taken the flat rate we suggested? It is just in order to be awkward, and to be able to tell his supporters "Of course we have not supported the Opposition proposal "? He then goes on to say he will not restrict the payment to old age pensioners, but will accept the eligibility of age only and that this is for reasons of economy of labour. This is a great revolution. It is very far away from what the Chancellor said a few weeks ago, and I suggest that we are entitled to know why he has done this. May I remind the House of a few sentences the right hon. Gentleman used when he argued against the proposition of my hon. and gallant Friend the Member for West Edinburgh who said that the postwar credits should be given to people of 60 and over? The hon. Member for Nelson and Colne (Mr. Silverman) said that the payment should be to old age pensioners on grounds of need. This is what the Chancellor had to say to the proposal, which is almost the same as that which he is producing today: This Clause has been very properly criticised by my right hon. Friend as an indiscriminate proposal regarding all persons over 66. whatever their need, who have a postwar credit. All this does is to pay credits to men over 65 and to women over 60. The right hon. Gentleman went on to say: This is going to put into the first line of priority among others the millionaire over 60. It is therefore quite indefensible. The right hon. Gentleman has no difficulty in saying why he rejected the Conservative proposal to give postwar credits to millionaires over 60. What is he going to say now, for that is exactly what he is proposing to do? He went on to say on the same occasion: I venture to suggest…that we cannot get justice or distribution according to need, which is what believe in, merely by taking an automatic age criterion."—[OFFICIAL REPORT, 29th November, 1945, Vol. 416, c. 1622.] The Resolution authorises payment to men of 65 and women of 60. It is hardly surprising that the right hon. Gentleman did not get up to defend his proposal, and I would like him, if he would be so kind, to explain why he has made this differentiation in age. I feel that he has been prompted to this by the attention we gave to the matter in November last, and the new Clause then proposed from this side of the House, which the right hon. Gentleman and his friends so incontinently and, as it turns out, so unwisely, rejected.
The right hon. and gallant Gentleman has enjoyed himself. He has enjoyed his own retrospective oratory. He is one of the most gifted of our foes. He has done well with his opportunities. Last October, many proposals were made, including a group of proposals concerned with the repayment of postwar credits. All these I resisted; and in my view resisted them rightly at that time. But nothing remains eternally unchanged—well, I hope, nothing; though perhaps the mentality of some of the hon. Gentlemen opposite does. As we move on from stage to stage, things become possible which earlier, even if just possible, would have been most unwise. Last October, when my first Budget was under discussion here, we were at the beginning of a new phase of our national and economic life. We were seeking to repair the ravages of war, we were seeking to get production moving again; we were accelerating the release of men from the Forces; and at that time it was necessary to be exceedingly cautious in the granting of any concession which might have the effect of expanding purchasing power in advance of expanding production. Therefore, I had at that time, to present a firm, reasoned resistance to this proposal, which was most ardently pressed not only, and not most, I think, from the other side of the House, but equally from this side of the House. My hon. Friend, the Member for Nelson and Colne (Mr. S. Silverman) was much more passionate about this than the right hon. and gallant Gentlemen opposite. It is true that they were temporarily allied in argument, but the difference between them was that the hon. Member for Nelson and Collie had a greater sense of the importance of timing this concession. The right hon. and gallant Gentlemen opposite disregarded the momentary difficulties that were confronting us at the conclusion of the war, whereas my hon. friends were convinced, by the argument I employed at that time, that while I could not give way, I could give them hope that it might be possible before long. The time has come now. I hope that the right hon. Gentleman will be consistent with the view he took last November and will not oppose what I am offering today —safely and prudently offering. [An HON. MEMBER: "Offering to the millionaire."] I will deal with the millionaire' in a moment. I am now speaking generally of the old people. A great advantage of these Debates is that one is able to find out how opinion is moving in various sections of the House, and the Chancellor is assisted, on the information gained, in deciding in which direction it would be most in accord with the broad feeling of the House for him to move, as and when it became possible to make concessions. What total concessions can be made at any one time must depend on the general economic and other situations. As a result of six months—and it will grow into six years—of competent government, and of industrial revival, and of rapid release of men from the Forces, and of the skilled workers' contributions all over the country, we are able to make larger concessions than would have been wise six months ago.
Therefore, we come to this demand which was made with such force from all parts of the House on behalf of the old people. At one time I played with the idea that we might have some scheme for the release of credits, whereby in any given year we should release all the credits accruing in respect of that year's contribution; for example, all the postwar credits accruing in the first year of the system should all be repaid in this financial year, all those accruing in the second financial year should be paid the next year, and so on. I pondered on this idea, but it appeared to me not to be wise at this stage, because to give back a whole year's credits seemed to me and to my advisers to be unduly inflationary. Therefore, I considered what section of postwar credits, belonging to a particular year, we should give in priority over others, and, having regard to the views expressed in the House, it appeared to me to be best to concentrate upon the older people. Then I considered—and I am answering the right hon. and gallant Gentleman with complete frankness—whether it would be right and proper to restrict repayments to old age pensioners, and, in principle, there is a great deal to be said for that. But there are two reasons against it, which have decided me to recommend what I am now proposing. One reason is that there are a large number of border-line cases. If you take the old age pensioners, some would say "What about the police pensioner? He is a deserving person." There are other old people, too, who are near to the old age pension limit. And so you are led from point to point, and there is no clear administrative line of division to take. Therefore, I am making a concession, which I thought would be welcome to Members on the other side, by giving the benefit of repayment for old people of 65 and 60. If the Opposition put down an Amendment eliminating the Surtax payers, I will undertake to give it most careful consideration, but, as at present advised, I think it would be adminstratively simpler to let them all come in. All we have to do now is to require evidence of the date of birth.
The reason for taking 65 years of age for men, and 60 years of age for women, is that these are the ages, under the law, when old age pensions become payable —in industrial life women are eligible for retirement at an earlier age than men. But, if I have been too generous to the rich, let the Opposition put down an Amendment and I will give it careful consideration. The first three years which it is here proposed to repay are the three years in respect of which certificates —the actual pieces of paper—have been distributed. There again it is administratively convenient to arrange that these three years shall be repayable together, and it is also to minimise the danger of inflationary repercussions that only three years arc payable out of five. It is also convenient from the administrative point of view, because the Inland Revenue have had a hard time of it lately, and have not been able to complete arrangements for the distribution of the certificates for the last two years. In this case, by making this definite payment to the limited group of people we are going to emphasise that these post war credits are real charges, which are going to be met by the Government.
10.45 p.m.
Even at this late hour it is really impossible to let the Chancellor of the Exchequer get away with that. He knows quite well that we on this side of the House welcome the proposals in this Resolution, because they are on the lines of our proposals last November. What we regret is that a few months ago the Chancellor should have so categorically rejected these proposals, not because, as he would like the House to believe now, of the danger of inflation and the impossibility of spending this money, but because, as he said, even if he had the money available it was the wrong way to do it and it would be indefensible to take, as he is now taking, a clear age classification. Naturally, in order to persuade his own followers—though they do not require much persuasion—to follow the Government Whips into the Lobby he had to bring in his little piece about the rich. What really has happened is that since he spoke in November he has had a month or two in which to think. Some people, of course, would say—though it is not the right hon. Gentlemen who sit on the Front Bench opposite—that he required to go through the process of ratiocination before he went through the process of elucidation. The fact is, of course, that having thought about it he now finds that what he said last November was quite wrong.
We are delighted that he should find it out and that he should impress upon the House this lesson—that in future we must recognise that when the Chancellor makes a statement it is very often not the result of a long process of thought and of discussion and of investigation in his Department but is merely the thoughts that spring to his mind at the moment. Though we know that what we put forward is likely in the first place to be rejected, it certainly will encourage us to know that, after a period of reflection, the Chancellor will agree with us. Whilst we accept with gratitude the general proposals, I desire to say that we were not impressed by the reason given for the differentiation between the male and female sexes. The whole point of the repayment of the postwar credits on the basis of age was the desire of the House that the old people should have a chance of enjoying repayment before they die. I do not believe that there is, in fact, five years' difference in the life of a male and a female. This differentiation means, in effect, that the man will have less opportunity of enjoying his postwar credit. Certainly, when we come to another stage, we shall want to examine more closely this differentiation, for which, at present, we do not see any justification.
I fear that the Chancellor thinks that we are not likely to welcome this because of selfish reasons. I would like to assure him, and I think that I can speak on behalf of all the Members on this side of the House, that it is very largely from unselfish reasons that we welcome this Resolution. We sit here daily and see the grey heads on the Front Bench opposite, and the 81 Members of H.M. Government who are remunerated at rates up to£10,000 a year, and we are very glad indeed that they should have this return on their postwar credits. It is, therefore, in a spirit of real unselfishness that I welcome this Resolution.
What evidence of age is required? Is everyone to be required to produce a birth certificate?
FINANCE (NATIONAL LAND FUND)
Resolution reported: That, for the purposes of any Act of the present Session relating to Finance, it is expedient to authorise the issue during the current financial year from the Consolidated Fund of the sum of fifty million pounds to a National Land Fund to be established under the said Act and used to make good any duty satisfied by a transfer of property under section fifty-six of the Finance (1909–10) Act, 1910, and for such other purposes as Parliament may hereafter determine.
Motion made, and Question proposed, That this House doth agree with the Committee in the said Resolution."
There are one or two comments which I should like to make on this Resolution. I would recall to hon. Members the words with which the Chancellor opened his Budget. Tonight we have learned that the words "ramp" and "racket" are in Order, but I am not quite certain whether the word "humbug" is in Order. So as to keep away from that danger, I will just make the comment that this behaviour on behalf of the Government is very odd. The Chancellor on 9th April explained to us, with obvious relish, that he was going to set aside, which is what this Resolution does, the sum of£50 million for a special Fund, to be called the National Land Fund, to be available for a variety of purposes all designed to increase the national estate. He pointed out that it would be possible, if it was considered in the public interest, for land to be transferred through this Fund to the National Trust or the Youth Hostels Association—a most extraordinary combination of bodies. [HON. MEMBERS: "Why? "] Because, up to now, I understood that the National Trust looked after properties and houses handed over to them, whereas the Youth Hostels Association was more concerned with little huts—I do not say that in any derogatory sense—used by young men and women on hiking tours. It seemed to me that they were in quite different categories; but never mind, the idea is that the Chancellor should find various associations into whose charge he could put these various properties. I am not quarrelling with that. The Chancellor then went on to make the lyrical peroration which so surprised us, because it was rather out of context with the rather harsh realities of the financial situation with which he had regaled us for one and three quarter hours. One detected in the final passages of his speech a real affection for the beauty of our countryside, and, apparently, a fervid desire to do what he could to conserve what it was possible to conserve. I cannot begin to do that with the emphasis of the Chancellor of the Exchequer, but I would quote this to make the point of which I want the House to he aware, and that is the "oddity" of the behaviour of the Government—that being a word which is orderly. The right hon. Gentleman said: There is still wonderful beauty to be found in our country. Much of it has been spoiled and ruined beyond repair; but we still have a great wealth and variety of natural scenery in this land."—[OFFICIAL REPORT, 9th April, 1946; vol. 421, C. 1844] Much of this land has been spoiled and ruined beyond repair, as the Chancellor agrees, and his colleagues agree. What on earth, then, is the Minister of Fuel and Power doing at this very moment? That is why I say the behaviour of the Government is odd. We have the Chancellor coming down here a fortnight ago with his lyrical description of how beautiful the countryside is, asking this House to vote £50,000,000 towards conserving it. And then, in spite of all the protests from South Yorkshire, in spite of all the protests from the present owner of the property, in spite of all the propositions which he made to try and save one of the most magnificent beauty spots in South Yorkshire, in spite of all these descriptions from the Chancellor in his Budget speech, the Government—who, after all, are collectively responsible—are now—
Order.
The right hon. and gallant Gentleman is riding off the Resolution.
No, Sir, with all due respect. This money is to be voted because there is still beauty to be found in our country. The right hon. Gentleman said: Much of it has been spoiled and ruined beyond repair…The best that remains should surely be the heritage not of a few private owners but of all our people."—[OFFICIAL REPORT, 9th April, 1946, Vol. 421, C. 1844.] To achieve that, might have been the first fruits of this Fund, instead of which, the Minister of Fuel and Power, who is a Cabinet colleague of the right hon. Gentleman and has Cabinet responsibility, has been allowed by this Government to desecrate South Yorkshire.
The right hon. and gallant Gentleman is going right outside the Resolution. Might I remind him of what it says: … a National Land Fund to be established under the said Act and used to make good any duty satisfied by a transfer of property under section fifty-six of the Finance (1909–10) Act, 1910, and for such other purposes as Parliament may hereafter determine. It is not for the preservation of Wentworth.
With all due respect, Mr. Speaker, that is not what the Chancellor said.
The right hon. and gallant Gentleman must speak to the Resolution, not about what the Chancellor said.
What about such other purposes as Parliament may hereafter determine "? Are we to take it from your Ruling, Sir, that the Clauses of the Finance Bill which will be founded on this Resolution can deal only with the transfer of property as the result of death?
No, but it only means National Trust and societies like that.
With all respect, Mr. Speaker, that, I thought, was the point I was endeavouring to make because—[HON. MEMBERS: "Oh !"] Certainly. As I understood it, during the recent negotiations one of the proposals was that this property should be transferred to the National Trust, and the Fund was to finance just that kind of transaction. I understood that the £50,000,000 was to be used in part in that way, but, of course, if I am entirely wrong, if I am out of Order, I naturally say no more about it. If, however, it is possible for the Chancellor to keep in Order in replying, I hope he will set our doubts at rest because that is what we had understood. I am very sorry to have transgressed.
Is not the operative fact of the remarks that the right hon. and gallant Gentleman has been making that the property to which the Chancellor referred has been damaged beyond repair, whereas the property from which coal is now being removed will be completely and thoroughly restored after the operation?
I do not know how far we can go into those operative facts, but I imagine it is for the Minister of Town and Country Planning to express a view on that, and I hope that he has been consulted by the Government collectively on this issue. If I cannot pursue that any further, Mr. Speaker, may I invite the Chancellor to be quite specific as to what he intends by this? Then perhaps, if it is found that the "other purposes" cover exactly the point which I had deduced from his Budget speech, while I may have exhausted my right to pursue this subject, without the leave of the House, perhaps some of my hon. Friends will be able to probe the matter further.
11.0 p.m.
I hope I can clarify the point raised by the right hon. Gentleman. The proposal in the Finance Bill will be closely linked with the provision in the previous Finance (1909–10) Act, 1910, whereby, under certain conditions, land may be tendered in payment of death duties. As I sought to explain in my Budget speech, although this has stood upon the Statute Book as the law of this country since 1910 it has in fact been practically unused. I propose to make it operate on a considerable scale subject, as the law now stands, to the agreement of all parties, namely the executors of the estate of the deceased on the one hand and the Board of Inland Revenue on the other. As I informed the Committee of Ways and Means when I was making my Budget speech, so far as the Board of Inland Revenue are concerned I have instructed them that, henceforth, wherever suitable land is offered by the executors in payment of death duties, they are to show willingness to accept it. This is a voluntary arrangement. I hope in the future there will be a larger number of cases than there have been in the past in which this mode of payment will be acceptable to the Board of Inland Revenue, on the one hand, and the executors, on the other hand. In the Finance Bill this provision is wholly linked with the payment of death duties in the form of land.
I might perhaps mention that it is intended that land so tendered may be accepted by some department of the Government, in which case the Land Fund will not be drawn upon—for example by the Forestry Commission in cases where land, which is suitable for afforestation is handed over by the executors of some deceased person. I am anxious to make it clear that in such a case the Land Fund will not be drawn upon as the Board of Inland Revenue will be reimbursed by the Forestry Commission out of their Vote. The total Vote for the Commission would not be increased, except with the authority of this House, but of the money voted by this House for the Commission some part would be paid back to the Board of Inland Revenue in return for the land so acquired. Similarly with regard to other Government Departments.
I contemplate, however, in addition, that there should be provision in the Finance Bill whereby—I am not bound by the words I am going to read out but this is the first attempt at a suitable phraseology—if any society, or body, not trading for profit and having as its object, or one of its objects, the preservation of amenities enjoyed by the public, or the acquisition of land to be used by the public, that such a body,should also be eligible to receive land from the Board of Inland Revenue, subject perhaps to certain conditions, or subject perhaps to part payment of the value of the land. Such a body, which might be the National Trust, the Youth Hostels Association, or other bodies which fall within the same definition, should be eligible to receive land.
May I ask, Mr. Speaker, whether care will be taken in all these transactions—and here I apologise for using a rather pompous term—to preserve the rare fauna? Most of the trust societies already take care to preserve these fauna, and in connection with this proposal, I think this is most important.
I agree with the Noble Lord. I do not think this is a matter on which there will be any controversy or dispute among what I might describe as knowledgeable persons in all parts of the House. I think we are all agreed about that. I entirely accept the Noble Lord's observations. We are very anxious to preserve, so far as we can, what he has referred to as rare fauna.
I add one other point. This sum of money which is being set aside for this purpose is being loosely linked, in not too pedantic a fashion I agree, with receipts accruing to the Revenue in the form of payment for war stores. I remember the discussions which took place at the end of the last war in which criticism was made by a number of very competent authorities in the House of Commons at that time, of the way in which receipts from war stores were flung into the ordinary stream of revenue. Many people said that that was not the proper way to deal with this exceptional situation and these exceptional receipts and that they ought to be treated in an exceptional fashion. It appeared to me and to my colleagues in the Government that it would be a reasonable provision to take some part of the proceeds of war stores and put them into this fund for this purpose, linking it, in the first instance, with the death duties on land and also making provision for the future, in the next few years, in legislation on the subject of amenities in general, and on National Parks in particular.
My right hon. Friend the Minister of Town and Country Planning has made it quite clear, with the authority of the Cabinet, that in due course, when the legislative programme permits, he will introduce legislation on the subject of National Parks and I hope that this will not be controversial between the parties. It appeared to me that it would be advantageous when this legislation comes along, whether it be next session or whenever it comes along, that there should be what I might describe as a nest egg, set aside, which could be used to finance some of the operations necessary in order to give to the public permanent access to the National Parks—Snowdonia, or the Peak District, the Lake District, wherever you wish, or any place where a man, not too pot-bellied, could still walk. I do not contemplate that this£50 million will all be spent at once. It would perhaps be spent over a period of four or five years and it would be possible to replenish the fund if it were exhausted. Meantime, I feel that this is about the right kind of sum to set aside, having regard to the claims that might be made against it.
Before the right hon. Gentleman sits down, I wonder if he would be so good as to answer the point I made on Second Reading about this Fund. It does seem to me an entirely vague sort of financial arrangement, because it will be found, when the time comes, that the Chancellor is not setting aside any money at all. The Treasury has always taken the greatest objection to setting up any special fund, and the Chancellor has not made any attempt to justify the use of procedure of this kind.
I should like to say a word or two on how this Fund will affect the National Trust. I am on its Executive Committee. It will affect the National Trust in two ways, as the Chancellor has explained. The National Trust would like to discuss the details with him. I presume they will be free in the future, as in the past, to accept or decline land which is offered to them under either of the two schemes. The National Trust is one of the largest landowners in the country, thanks to the public spirit of landowners and other benefactors, and I am very sorry that, while holding out this helping hand to the National Trust, the Chancellor is stabbing it in the back by discouraging seven-year covenants. I hope that in the Finance Bill he will make provision for exempting the Trust on that point.
11.10 p.m.
There are three questions which I should like to put. First, will the Fund be available to transfer to the National Trust not only land but also historic and beautiful houses? I imagine that the answer is "Yes." The second point I want to make is that the National Trust has no large revenue and has in the past been bound to refuse properties unless accompanied by a maintenance fund. Will the Chancellor provide in the Finance Bill, if not to include specifically, at least not to exclude that when a property is handed over under his scheme, there shall be some maintenance fund to go with it? Thirdly, what about land which he receives in lieu of death duties but which has no special landscape or aesthetic value or historic interest—land which the National Trust does not want? What is the Chancellor going to do with it? Is he going to sell it, or is he going to join the ranks of the Government Departments which are becoming large landowners? Is he going to become, as the Minister of Fuel and Power said he was becoming the other day, a large farmer on his own account?
I should know perhaps what the Chancellor's hopes and intentions are, but I do hope he will explain the financial procedure in connection with this matter. I understood we were budgeting for a deficit for this year. Now I understand that the Chancellor is going to set aside out of this deficit a reserve, and is asking his shareholders—the taxpayers of this country—to support this reserve for a purpose he has not specified.
FINANCE (EXCHANGE EQUALISATION ACCOUNT)
Resolution reported: That, for the purposes of any Act of the present Session relating to Finance, it is expedient to authorise the extension of the purposes for which the Exchange Equalisation Account may be used so as to include the conservation or disposition in the national interest of the means of making payments abroad.
Motion made, and Question proposed, ":That this House doth agree with the Committee in the said Resolution."
11.15 p.m.
I think that, even at this late hour, the House should understand what it is passing. We previously allowed this Resolution to go, although I do not think anybody on this side of the House, or on the other side, had the slightest idea of what it was. The Resolution is to the effect that it is expedient to authorise the extension of the purpose for which the Exchange Equalisation Account shall be used to acquire funds in the national interest and the means of making payments abroad; but the Exchange Equalisation Account is veiled in secrecy. It was established some years before the war to enable fluctuations in rates of exchange to be ironed out by means of transactions carried out by the Bank of England on behalf of the Treasury. It had put at its disposal, I think, some£150 million. Only the Public Accounts Committee sees what are the resources of the Exchange Equalisation Fund, and I am therefore in a privileged position. I am not free to disclose the results of my inquiries in the House. At the same time I am deeply puzzled by this Resolution. The Exchange Equalisation Fund may already hold, and does, of course, hold, foreign currencies of all descriptions, and I hope the Chancellor of the Exchequer, or his willing assistant, the Financial Secretary, will explain what is meant by the words, "Conservation or disposition in the national interest as a means of making payments abroad "; and how, in fact, the addition of these words will broaden the scope of the work of the Exchange Equalisation Fund.
I will do my best to reply to the right hon. Gentleman, in so far as I am able at this late hour. As the House knows, the Exchange Equalisation Account was set up by the Finance Act of 1932. Later on, just before the war broke out, or almost immediately after—at any rate in 1939—the Currency (Defence) Act was passed. This provided that, notwithstanding anything in the Act of 1932, the funds of the account could be invested in securities or for purchases of gold in such manner as the Treasury thought expedient for securing the defence of the realm and the prosecution of the war. Quite obviously, the Act of 1939, now that the war is over, will have to be abrogated. It is also clear that in view of conditions generally we cannot go back to the provisions of the Act of 1932. Therefore, it is essention some time quite soon to make provision for this account to be widened in scope in order to meet the present and future needs.
We are later in the year, as I think the House knows, going to introduce an Exchange Control Bill. It was hoped to introduce it fairly soon, but the possibilities now are that we may not get it until the autumn. But that is some time ahead, and it is felt by the Government that to wait until the autumn to make some changes in the law, which in our view are necessary, is too long to wait. Therefore, this Budget Resolution has been proposed which will allow us to bring this account up to date, without waiting to include provisions for so doing in the Exchange Control Bill, which may not, as I say, be presented to the House until later this year.
The Financial Secretary has not explained why the 1932 Act is not sufficient to the purpose today.
I cannot. This account is a peculiar and special one. I can say no more tonight than that in the view of the Government, following on the war, and the conditions prevailing in the world and in this country, the provision, laid down in, I think, Section 24 of the Finance Act of 1932, are quite insufficient now for the control of exchanges.
The hon. Gentleman has still not explained. Can he tell us exactly what the Section does, and why it is not sufficient?
The Resolution is broad in its scope; it gives powers for changes to be made. What those changes will be is a matter for the House to decide in due course. I would point out that these Resolutions often appear to be obscure and to be drawn in fairly wide terms.
One does not expect particularity in Resolutions, because you get that in the Bill, but we passed a Budget Resolution in the knowledge that in a few weeks we should have a Bill which would give a full explanation. We are now told that the Bill to be founded upon this Resolution may not be introduced until next autumn.
rose —
The hon. Member may speak again only by leave of the House.
Perhaps, with the leave of the House, I might apologise if I have misled right and hon. Members. It is because the Exchange Control Bill will not be introduced in the near future, not until next autumn, that it is essential that these powers should be taken. The proposal is that the changes should now be made in the Finance Bill which will be introduced in a few weeks' time.
How do these powers square with Bretton Woods? How is it that we are introducing an exchange control for ourselves, when the Chancellor has made it perfectly clear that we joined Bretton Woods?
On the contrary, all persons who joined the Bretton Woods "club" are required by the terms of the "club" to introduce and operate an exchange control on capital transactions.
rose —
I would point out that the hon. and gallant Member is not entitled to speak twice without permission.
May I ask leave of the House?
No.
I have not spoken yet and perhaps I may intervene. Since the Financial Secretary has spoken I have taken advantage of the opportunity to get hold of the Finance Act.
I would point out that the right hon. and 'gallant Gentleman is not allowed to address the House twice.
With great respect, I only interrupted the Financial Secretary to ask a question.
I understood that the right hon. and gallant Gentleman had already spoken.
Then may I put another question? Will the Financial Secretary say specifically what is inadequate for present purposes in Section 24 of the Finance Act, 1932? We are talking about changing the law and we are entitled to know. The Financial Secretary quoted the Act, but he did not say what was wrong with it. I do not propose to quote it, but if any Member wishes, I will read out the Section.
Is the right hon. and gallant Member asking a question or making a speech?
I do not know myself which I am doing. Section 24 of the Finance Act, 1932, is the Section which sets up the Account. Subsection (2) says it may be wound up, and Subsection (3) says that: The Treasury may cause any funds in the Account to be invested in securities or in the purchase of gold. Subsection (4) states that there should be issued to the account a sum: not exceeding in aggregate one hundred and fifty million pounds. That has since been amended. Is it Section 5, 6 or 7? If the Financial Secretary will kindly let us know we shall be better able to judge between now and the next day for financial business. If not, we shall want to protest further and put down Amendments to these proposals. But the House is entitled to know.
11.30 p.m.
By leave of the House I will answer that point, but this must be my last intervention on this Resolution. It is perfectly true, as the right hon. Gentleman says, that the Finance Act, 1932, particularly Section 24 (3), would appear to give us all the powers we want, but it has to be remembered that that Section has been greatly modified by the Currency Act which we passed in 1939, and which still subsists. It is the superimposing of the 1939 Act on the Act of 1932 which gives us the situation as it exists today and to which we must direct our attention. We can repeal the 1939 Act if we choose, which would take us back to the Act of 1932. As a matter of fact, owing to the conditions during the war and the passing of the 1939 Act the operations of this Account, which the right hon. Gentleman the Member for North Leeds (Mr. Peake) knows something about, now go far beyond the conditions laid down in the Act of 1932. So something has to be done. We therefore propose that the best place to do it is in the Finance Bill which will be introduced in a few moments. When that Bill comes to be discussed hon. Members will have ample opportunity of discussing the points to which reference has been made tonight if they so desire.
The Financial Secretary to the Treasury has referred to the Currency Act of 1939, which he has informed the House still subsists. Perhaps he would be good enough to explain to those hon. Members of the House who have not fully appreciated the force of the argument he has so far adumbrated the reasons why, if the 1939 Act is still on the Statute Book, it is necessary to take these further powers. I do not know, but perhaps he will tell the House whether this Act is due to expire and on what date. If it is due to expire in the near future, there is ample precedent for continuing it in force for a further time. If that be so, is not that a simpler process? He has told us the position is confused through superimposing the 1939 Act on the 1932 Act. Will he tell the House if the position is changing and why it is changing? It is not satisfactory to leave the matter in its present form, and, therefore, even if the Financial Secretary has to ask leave of the House to speak again, and even though he told us that his previous speech was his final one, will he explain the position which he has, so far, signally failed to do?
I have not yet had an opportunity of intervening in this Debate. I should like to ask the Financial Secretary whether, in fact, the answer to my right hon. and gallant Friend the Member for Gainsborough (Captain Crookshank) is not this. The right hon. Gentleman asked whether it was Section I, 2, 3, 4, 5, 6, or 7 which was causing the trouble. Is it not really Subsection (3) of Section 24? That Subsection says: The Treasury may cause any funds in the Account to be invested in securities or in the purchase of gold in such manner as they think best adopted for checking undue fluctuations in the exchange value of sterling. Is it not a fact that the Chancellor wants to use this fund for powers in excess of controlling undue fluctuations in the exchange value of sterling? Is not that the true reason for the Resolution brought forward tonight?
We cannot tell the right hon. Gentleman any more.
WAYS AND MEANS [11th April]
Resolution reported:
AMENDMENT OF LAW
" That it is expedient to amend the law with respect to the National Debt and the public revenue, and to make further provision in connection with finance."
Bill ordered to be brought in upon the said Resolution and upon the other Resolution reported from the Committee of Ways and Means and the Resolutions re- ported from the Committees on National Debt (Permanent Annual Charge), Finance (Post-war Refunds of Income Tax), Finance (National Land Fund) and Finance (Exchange Equalisation Account), and agreed to this day, by the Chairman of Ways and Means, the Chancellor of the Exchequer and Mr. Glenvil Hall.
FINANCE (No. 2) BILL
" to grant certain duties, to alter other duties, and to amend the law relating to the Public Revenue and the National Debt, and to make further provision in connection with Finance," presented accordingly, and read the First time; to be read a Second time upon Tuesday, 30th April, and to be printed. [Bill 111.]
IMPORT DUTIES (EXEMPTIONS)
Resolved: That the Import Duties (Exemptions) (No. 1) Order, 1946 (S.R. & O., 1946, No. 419), dated 25th March, 1946, made by the Treasury under the Import Duties Act, 1932, a copy of which Order was presented on 29th March, be approved."—[ Mr. Dalton .]
IMPORT DUTIES (ADDITIONAL)
Resolved: That the Additional Import Duties (No. 1 Order, 1946 (S.R. & O., 1946, No. 420), dated 26th March, 1946, made by the Treasury under the Import Duties Act, 1932, a copy of which Order was presented on 29th March, be approved."—[ Mr. Dalton .]
ACQUISITION OF LAND (AUTHORISATION PROCEDURE) BILL
Order read for consideration of Lords Amendments.
Motion made, and Question proposed, "That the Lords Amendments be now considered."—[ Mr. Key .]
11.30 p.m.
I do not feel disposed to agree to this Motion without taking the opportunity of voicing a protest at the manner in which these complicated Amendments come to us at such short notice. They were only given to hon. Members today. The Bill is of a technical character, and to understand the Amendments which have been made in another place requires a certain amount of study. I have been able to give that study to them in the course of the day, and the indignation which I would otherwise have thought it proper to express is modified by consideration that the Amendments, on the whole, appear to be of a beneficial character and leave the Bill better than it was when it left this House. I cannot refrain, however, from observing that it is a little strange that during the passage of this Bill through this House, complaint was made by the Minister of Health of the time consumed in Standing Committee in its consideration. Yet, all the time—which was alleged to be excessive—spent on the Bill by this House was, apparently, not enough to enable the Government to introduce all the Amendments which they desired. They come to us now, after what they say was excessive time spent in this House, with a completely new Clause, and some 20 odd Amendments which they had to leave over until the Bill reached another place.
I do not wish to arrest the business of the House. I understand that the Government are anxious to get the Bill now, and as I say the Amendments appear to be of a beneficial character, and I do not propose to object to them. I console myself, as, no doubt, will other hon. Members on this side of the House, with the reflection that it is very pleasant:o observe that His Majesty's Government have recognised the great value of the other place as a revising and reforming Chamber. On the Third Reading of this Bill, the Minister of Health expressed some indignation because mention was made of the other place. He seemed to think that some threat of a kind which was inimical to this House was being suggested by hon. Members on this side. There was nothing of the kind. I suggested that the Government themselves might have been wise to introduce major Amendments there for further consideration. They have taken that advice, and the result is this sheet of Amendments and this completely new Clause. I hope that the experience of the necessity for prolonged consideration in drafting legislation of this difficult character will induce them, on any future occasion on which they venture into this realm, to be more considerate to hon. Members.
Lords Amendments considered accordingly.
CLAUSE 2.— (Temporary powers for speedy acquisition of land in urgent cases.)
Lords Amendment: In page 3, line 4o, leave out "as the case may be."
I beg to move, "That this House doth agree with the Lords in the said Amendment."
This is a drafting Amendment. These words appear three lines further down and there is no need to have them in twice.
Lords Amendment: In page 4, line 23, leave out "entered on" and insert "took possession of."
I beg to move, "That this House doth agree with the Lords in the said Amendment."
In this case the feeling was that the words "entered on "at first really expressed the intention, but what was implied was "entering on for the purposes of taking possession." We think these new words are clearer.
CLAUSE 3.—(Power to extinguish certain public rights of way over land acquired.)
Lords Amendment: In page 5, line 15, leave out "the agreement to acquire the land" and insert "agreement."
I beg to move "That this House doth agree with the Lords in the said Amendment." In this case we desire to make a certain modification in this Subsection for this purpose. The Clause, as drafted, deals with the question of the acquisition of land under the Town and Country Planning Act of 1944, whereby the Minister can make an Order for its acquisition without compensation, the actual price being paid being that of the site value. In order to make this plain, and to be certain that it does not operate except in the cases where actual possession has been taken of the land, this series of Amendments has been put down.
Lords Amendment: In page 7, line 42, at the end, insert new Clause A ( Application of S. 1 to local Acts ).
(1) Where, apart from this Act, power to authorise a local authority to purchase land compulsorily is conferred by any enactment contained in a local Act and in force immediately before the commencement of this Act, the Minister of Health may by order made on the application of the local authority direct that section one of this Act shall apply in relation to the enactment as if the enact-merit were contained in a public general Act:
Provided that nothing in an order under this section shall empower the authorisation of a compulsory purchase in accordance with the provisions of section two of this Act.
(2) Where an order has come into operation under this section the last foregoing section shall apply as if the local Act to which the order relates were specified in the Fourth Schedule to this Act, and as if there were specified in the second column of that Schedule such amendments of the local Act as may be provided for in the order, being amendments appearing to the Minister to be consequential on the making of the order.
(3) Any order under this section made after the expiration of two years from the commencement of this Act shall be subject to special parliamentary procedure.
I beg to move That this House doth agree with the Lords in the said Amendment."
The reason for this new Clause is that many authorities have local Acts which give them powers for the compulsory acquisition of land. Certain of those powers will be repealed by this Bill, and therefore it was felt necessary to bring the operations clearly into the Bill. I would point out that these operations apply only to the Clause 1 procedure, and the proviso in Subsection (1) definitely prohibits their use for the purpose of the quicker acquisition of land under Clause 2.
I do not rise to voice any disagreement with this Amendment. I think it is a useful qualifying procedure, but I think it would be as well to draw attention to Subsection (3) of the proposed new Clause, which says: Any order under this section made after the expiration of two years from the commencement of this Act shall be subject to special Parliamentary procedure. I understand that after a lapse of two years from the commencement of the Act, the further safeguard of special Parliamentary procedure is to apply to Orders made under this new Clause.
Yes, that is so.
CLAUSE 8.—(Provisions as to Scotland.)
Lords Amendment: In page 9, line 29, leave out from "For" to "references" in line 33.
I beg to move, "That this House doth agree with the Lords in the said Amendment."
This is a drafting Amendment. Perhaps I may be allowed to mention, along with it, the Amendment to page 10, line 47. These two go together.
Lords Amendment: In page 10, line 15, after "expression," insert: 'appropriate Minister ' means in relation to the undertaking of the North of Scotland Hydro-Electric Board, the Secretary of State; the expression.
I beg to move, "That this House doth agree with the Lords in the said Amendment."
This Amendment goes along with the Amendment in page 11, line 36, to leave out Subsection (13). These are drafting Amendments, consequent on the new Clause 3 which was introduced when the Bill was recommitted.
FIRST SCHEDULE.—(Procedure for Authorising Compulsory Purchases.)
Lords Amendment: In page 17, line 20, after "under" insert "this Act or."
I beg to move, "That this House doth agree with the Lords in the said Amendment."
This Amendment relates to the grounds under which the compulsory purchase order may be challenged in the courts. One of the limitations upon the purchase order is included in the First Schedule of this Bill. Therefore, in order that persons may be enabled to challenge the validity of the order if the confirming authority ignores the statutory limitation in paragraph 5 of the First Schedule it is necessary that these words be inserted.
I think this is a distinct improvement on the original drafting of the Bill.
Lords Amendment: In page 17, line 26, leave out "twenty-eight days" and insert "six weeks."
11.45 p.m.
I beg to move, "That this House doth agree with the Lords in the said Amendment."
When the Bill left this House the period of 28 days was included. It is now proposed it should be extended to six weeks. This is an extension of the time which is given to the owner of the land for the purpose of questioning the validity of the compulsory purchase order. It was felt it was necessary to give that additional time in order that the necessary consultation and legal advice could be obtained.
THIRD SCHEDULE.—(Provisions as to Authorisations under Section 2.)
Lords Amendment: In page 22, line 33, at the end, insert: and as soon as may be after the authorisation has been given or the decision has been taken to refuse it the confirming authority shall send to any person who has made representations with respect thereto specifying an address for the purposes of this paragraph, notification thereof in a registered letter by post to the address specified.
I beg to move, "That this House doth agree with the Lords in the said Amendment."
This Amendment is to make certain that the confirming authority having received objections from certain people with regard to the compulsory purchase order shall be under an obligation to notify the objectors of the fact that a decision has been made with regard to the matter.
FOURTH SCHEDULE.—(Minor and Consequential Amendments.)
Lords Amendment: In page 37, line 21, at the end, insert: The Police Act, 1946 (9 & so Geo. 6. c.). In section five, in subsection (3), after the words Local Government Act, 1933 ' there shall be inserted the words ' and the Acquisition of Land (Authorisation Procedure) Act, 1946: In section fifteen, the words ' by means of an order made by the council and confirmed ' shall cease to have effect.
I beg to move, "That this House doth agree with the Lords in the said Amendment."
When the Bill left this House the Police Act had not become an Act. It is now included in this Schedule in order to bring it into line with the provisions of this Bill so far as it affects compulsory purchases by the Police authorities.
Remaining Lords Amendments agreed to [ One with Special Entry. ].
CONSOLIDATION BILLS
"Mr. Goodrich discharged from the Select Committee appointed to join with a Select Committee appointed by the Lords on Consolidation Bills; Mr. Stanley Evans added."—[ Mr. Joseph Henderson .]
GERMANY (MEMBERS' VISITS)
Motion made, and Question proposed, "That this House do now adjourn."— [ Hr. Joseph Henderson .]
11.47 p.m.
I rise for the purpose of putting some questions of great importance to the Secretary of State for War of which I have given him previous notice in writing. I only propose to detain the House for a few minutes, but I hope, Mr. Deputy-Speaker, that some of my hon. Friends, who have the same views on this matter as I have, will catch your eye. I understand, after the discussion that we had last night, that hon. Members who have the Adjournment have certain rights and if I speak for only five minutes, I think it is only right that hon. Members who are associated with me in this question should express their views.
The questions which I want to put to the Secretary of State for War are these. First: Will the Government make a declaration, which it seems to me is certainly required, that they alone are constitutionally responsible to the House for the conditions governing the entry of British civilians, including hon. Members of this House, into Germany, although their actions must be guided by military requirements? My second question is: What are the conditions today, how are this House and the rest of the public to ascertain them, and has any official statement on the subject been published? My third question is: Will the Minister give an assurance that there will be no discrimination as between individual Members who want to visit the British Zone in Germany? There was a case of an hon. Member opposite—I forget his constituency—who made a speech last week in Germany. A short time ago—and I have his authority to say so—my hon. Friend the Member for Solihull (Mr. M. Lindsay) was refused permission to go to the British Zone in Berlin. That seems to me to be discrimination that is entirely wrong. I have only one comment to make in putting these questions. Whether we like the Boches or not—and I personally dislike them as a people—we should all realise the fact, which I supose no one will dispute, that the Government are responsible for controlling millions of them and, as we were told in the course of the Budget Debate, they are costing the British taxpayer a very large amount of money. Under our Constitution the Government can only exercise their responsibility through the King in Parliament—a fine old phrase; it is through the Sovereign and this House and another place that these responsibilities are exercised. I am genuinely grateful for the support I get from the other side in this matter. I think there are no Party differences on this question. I believe that the Army and the Military Government are doing fine work in Germany, but whether they are doing it well or not the movements of Members of this House should not be hampered.
Mr. Deputy-Speaker, before the noble Lord sits down—
I have sat down.
I should like to ask the Noble Lord a question, Mr. Deputy-Speaker, but he does not seem willing to answer me.
This is a matter for the Noble Lord to decide and not for the Chair. The Noble Lord had concluded his speech, therefore the hon. Member must wait and catch my eye.
Is not it in Order for an hon. Member to raise a question in Debate after another hon. Member has spoken?
It is quite in Order, but the Chair has no power to insist on the right hon. Gentleman replying.
11.51 p.m.
I should like to support the plea which the Noble Lord has made that the regulations under which Members of this House may visit Germany shall at least be made clear, if they cannot be simplified. Today, nearly a year after we have gained victory over Germany, there still appear to be conditions existing which are the conditions of an operational time. I hope that the right hon. Gentleman, when he replies, will be able to lift this veil or, at least, give reasons for it remaining. At the same time, I hope he will not offer the too easy defence, for instance, the sort of defence that could be made by the General Staff that it is for reasons of security, or the defence made by the Q Staff, that it is because of problems of transport, rations, and accommodation. He cannot now suppose these to be insuperable difficulties.
These restrictions remain because, I fear, they may be thought convenient by those in control. I know that some visitors can be a nuisance, and perhaps it is in order to prevent these people from coming and being a nuisance that those in control are perpetuating this ban. There must be many Members of this House who have asked permission to visit Germany recently, and, unless they arc journalists, who seem to have special privileges, who have been refused. Some organised parties have gone to Germany, but these organised parties can only be for the very few, and not all of these parties have been allowed to visit Berlin. I am very grateful for having been included in one of these parties. I found both the Army commanders and the heads of the Military Government most hospitable and helpful, but they did not allow us to visit Berlin, which is, I suppose, the centre of Germany we should have liked most to visit. I do not know what useful purpose these rules serve. But I do know one result: they have created a black market. No doubt the intelligence branches which advise the right hon. Gentleman opposite have told him about this. It works in several ways, I am told, but I did not take advantage of it myself. If you have friends in high places who invite you to Germany there is little obstacle put in your way. This is most unfair.
The problem of the occupation of Germany may well be with us for a genera tion, and if we are to minimise the difficulties which are bound to arise, responsible people must be in possession of some first hand knowledge; and that cannot be gained only by reading the newspapers or by reading the "British Zone Review." Hence I hope that when the right hon. Gentleman replies he will say that, in future, instead of preventing hon. Members of this House and other persons from visiting Germany more freely than at present, we are going to encourage them to make visits to that country and that we will no longer consider Germany as a sort of forbidden land, a European Tibet, as it is at the moment
11.55 p.m.
I want to ask only one question of the Chancellor of the Duchy of Lancaster. I want to ask him why, when I was in Germany with the permission of his colleague, the Secretary of State for War, as he well knew, he wrote to a British major-general employed by the Control Commission in Berlin and said he would be obliged if the major-general did not invite me to stay with him. I showed him that letter from my friend. I want an explanation why he took that action when, a month later, a member of his own political party, a Member of this House, was allowed to go to Berlin, presumably with his permission. I am not making any charge. I am very glad that that Member of the House and of his party did go to Berlin; I think all Members should go. But I also think that I am entitled to an explanation as to why I was prevented from going.
11.57 p.m.
I am grateful to you for having caught your eye, Mr. Deputy-Speaker, because I am anxious to elicit why certain obstacles were put in the way of certain hon. Members visiting the Berlin area. In October last I was fortunate to be one of a party of eight Members chosen to go to Germany—five others from this House and two from another place. I lobbied those Members and felt certain that they wanted to go to Berlin. I put this view to the War Office but no facilities were made available for us to go there. I was told that a trip to Berlin was impracticable. An hon. Member opposite who was one of the party will agree that this was so, and I felt puzzled because we were all most anxious to go there. I would like to testify to the courtesy and good grace of the Control Commission in the area which we did visit. I do feel, however, that hon. Members of this House are owed some explanation of why difficulties are put in the way of visiting other areas, possibly because of the proximity to the Russian area. I do not know. But the courtesy which was extended to myself and other Members of the party stands out in sharp contrast to the discourtesy extended to me tonight by the Noble Lord the Member for Horsham (Earl Winter-ton) in refusing to give way.
On a point of Order, Mr. Deputy-Speaker. I did not refuse to give way. I resumed my seat. The hon. Member should be asked to withdraw that remark.
I think the hon. Member would be unwise to pursue that course of argument and he should withdraw the remark.
I realise that the Noble Lord resumed his seat, but had I been in a similar position I would very readily have given way.
12 a.m.
Quite apart from courtesies or discourtesies or personalities, I would like, on the merits of the case advanced, to support what was said by the Noble Lord and hon. Members opposite. I simply want to remind my right hon. Friend of two rather separate things that happened a year or so ago. The first thing is that it is exactly a year next Sunday, this coming Easter day, since a small party of hon. Members of this House and of another place went to Buchenwald concentration camp at the invitation of the Supreme Commander and at the request of His Majesty's Government. Some of these hon. Members, such as the hon. and gallant Member for Epsom (Sir A. Southby), have never fully recovered from that experience. These hon. Members believed that they were doing a public service, and a service to this House, by going there. I believe that hon. Members can still do a similar service, and perhaps even a greater service today, by going to Germany, either in organised groups, or as individuals.
The second point, which I think the Secretary of State for War will remember, is that during the last Parliament there was a considerable fuss in this House because two hon. Members were denied, by the Coalition Government, the right to visit France. So much fuss was kicked up about it, and there was such a stir in all quarters of the House, that the then Home Secretary, the present Lord President of the Council, gracefully yielded and these two hon. Members were able to go to France, as they were entitled to do. This is not in any way a Party matter—
Hear, hear—and only one hon. Member has tried to make it so.
It is a matter of the status, and even of the privilege, of hon. Members of this House. I do not believe that a Government has any right whatever, except in the strict and narrow sense of military security, to obstruct hon. Members who desire, in the pursuit of their lawful occasions, to find out the facts of what is going on in the world, and how the money of the British taxpayer is being spent from going to any country in Europe.
12.3 a.m.
I thank the Noble Lord the Member for Horsham (Earl Winterton) for giving me the opportunity to make a statement upon this matter. He asked me what was the constitutional position. The position is not quite so simple. The Government are responsible for the conduct of affairs in Germany and in Austria, and for the conditions governing the entry of hon. Members into these countries. As Secretary of State for War, I am a member of the Government responsible for making decisions upon matters of this kind. This matter is not as simple as it appears on the surface, and I think that the House will agree that it is not an easy task to make decisions in matters of this kind. We have in Germany a country which has been bombed and fought over, and it has its food troubles. It has no communications, and there is practically no accommodation. Let me make it clear that most, if not all, of the Members who go to Germany or Austria are dependent upon the Army for accommodation, transport and food. That ought to be quite clear, and it is the money of the taxpayers which is involved in this matter. It is right that Members should keep in close contact with the position in Germany, and that they should be in contact with our troops in Germany and Austria. The question was as to the method of doing it I decided in the first place to ask that arrangements should be made through the Whips, if this matter were to be done on the group system. One hon. Member has just mentioned what was done during the war. That was the general manner in which it was done then because of the difficulties of transport and also of food and accommodation. I think that the best way to keep the House in touch with affairs there is by the group plan. However, I did not limit myself to that method. As some hon. Members know quite well, I reserved to myself the right, where the case was quite good, of selecting individual Members who might want to go for special purposes.
When I returned just before Christmas I found that Members had been refused while I was away. I decided to reconsider the particular conditions under which those Members wanted to go. I managed to send one or two of them, but there were certain difficulties, which were not the fault of my hon. Friend the Chancellor of the Duchy of Lancaster, who cooperated with me at every stage in this matter. One discovery I made as a result of deciding that I would take Members on their merits, in addition to the group system, was that there was quite a rush of Members who wished to go, and it was practically impossible to deal with the number who wanted to go at a particular period. I want to be quite frank with the House: I have decided, in co-operation with the Chancellor of the Duchy of Lancaster, and through the Whips, generally speaking, to keep to the group system.
Will the right hon. Gentleman please explain what he means by "generally speaking "? Surely, he must have the group system or a general system. He cannot make exceptions, otherwise there will be trouble.
I want to make it clear to the House that I stand by the group system, whereby representatives from all parties, from time to time, will be able to visit either Germany or Austria, but I said "generally speaking," because I think there may be exceptional cases. I do not want to tie myself down absolutely, but except in those cases, I can tell the right hon. Gentleman that the group system will be adhered to. The House realises the difficulties there are in both the countries concerned. There have been three groups already, and I am grateful for their cooperation in this matter. It has been suggested that I should visit Germany, and no one would be more pleased than I would to do so, but until I do so, I am grateful for the experience of those who have gone and who, when they have returned, have told me where they have been, what are the defects they have observed and whether they have anything to say of the troops and their conduct.
There were three such visits made from 20th to 24th and 23rd to 27th of October of last year. At the end of the year, the weather was so bad and circumstances were so difficult in Germany that groups had to be suspended.
The House will be interested to know that a delegation will leave this House on Tuesday next and will return in time for the resumption of Parliament on 3oth April. If they go during the Recess there is more time for them to spend in Germany or Austria. They will get all possible facilities. They can see the formations and units, as those Members who have been there know quite well. In the limited time available, they will have the opportunity of obtaining a firsthand picture of the working of the Military Government and the Control Commission.
I think that I have answered the questions of the right hon. Gentleman as to who is responsible, and as to the conditions. There was one point raised by an hon. Member about the discrimination made between hon. Members.
Perhaps the right hon. Gentleman will allow the Chancellor of the Duchy of Lancaster to give me the explanation for which I asked and to which I think I am entitled.
I do not quite get the point as to why the hon. Gentleman was not allowed to go to Berlin.
Perhaps I might be allowed to explain. When I came back from Germany I showed a letter to the Chancellor of the Duchy of Lancaster which was written by a friend of mine, a major-general, in Berlin, who is employed under the Control Commission. The Chancellor, although he knew that I was in Berlin with the permission of his colleagues, wrote to my friend that he would be obliged if this major-general in Berlin would not invite me to go there, as it would be an embarrassment to him. Yet another member of his Party, I was very glad to see, went to Berlin a month ago.
The hon. Gentleman will answer that when I close. All I can say is that I have told the House of the conditions under which hon. Members of this House go. I leave it to my hon. Friend to answer that particular question. I trust that the House is satisfied with the efforts which I am making to meet the wishes of the House, and to keep the House in contact with the conditions generally in Germany and Austria.
12.13 a.m.
I have been asked to reply on the particular case to which reference has been made, and I do so with the greatest pleasure. A number of remarks have been made concerning the arrangements that have existed in connection with these visits, and the hon. Member for Westmorland (Mr. Vane) referred to the fact that there has been a kind of black market going on in these visits. I am afraid there is a certain amount of truth in it, but the Government are not responsible for that black market.
Reference has been made to an hon. Member who spoke in Germany last week. The only case I know of that kind is of an hon. Member who was in the American Zone, which is not within our jurisdiction. Reference was made to an hon. Member who was in Berlin last week. I do not know what hon. Member is referred to, but he certainly did not go with my permission, nor, as far as I am aware, with the permission of my right hon. Friend the Secretary of State for War.
To come to the case of the hon. Member for Solihull (Mr. M. Lindsay), the situation is that before the Control Office was set up, visits such as were made into Germany were made to the B.A.O.R. under the jurisdiction of the Secretary of State for War, who was entirely responsible for Germany at that time. When the Control Office was set up, organised visits were arranged in conjunction with the Whips, and I was responsible for making the arrangements. I was requested by the Commander-in-Chief at a certain stage last winter, when transport difficulties were very severe and there were other difficulties as well, to consider suspending these official visits. I agreed, in consultation with the Whips, that they should be suspended for the convenience of the Control Authorities in Germany. That was the position at Christmas when I learned, to my astonishment, that the hon. Member for Solihull and others had, by some means, found their way into Germany. Before he got into Germany he was in Brussels. I made inquiries into the position because I understood he had made application to enter Germany—the British Zone—and I learned to my astonishment that he was going at the personal invitation of one of the officers in Germany, who was, presumably, offering him the hospitality of the Army resources—accommodation, food, and so on. Having suspended the official visits of Members of Parliament, going in on the legitimate business of Members of Parliament to make inquiries into conditions, I could not see any justification for allowing individual Members to go over there on the personal invitation of officers or other persons in high places. Accordingly, when I was asked by General Erskine, who happened to meet the hon. Member in Brussels—General Erskine was proceeding to Berlin to take up a position on the Control Commission and telephoned my office to ask what was the position, because he understood there was a ban—we told him the position and, as far as the Control Commission was concerned, Members of Parliament were not to be allowed in the British Zone when official visits were suspended.
It being half an hour after the conclusion of Business exempted from the provisions of the Standing Order (Sittings of the House), Mr. DEPUTY-SPEAKER adjourned the House, without Question put, pursuant to the Standing Order, as modified for this Session by the Order made upon 16th August .
Adjourned at Sixteen Minutes past Twelve o'Clock.